[Federal Register Volume 74, Number 143 (Tuesday, July 28, 2009)]
[Rules and Regulations]
[Pages 37394-37425]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-17177]



[[Page 37393]]

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Part III





Department of the Treasury





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Alcohol and Tobacco Tax and Trade Bureau



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27 CFR Parts 17, 19, 20, et al.



Liquor Dealer Recordkeeping and Registration, and Repeal of Certain 
Special (Occupational) Taxes; Temporary Rule and Proposed Rule

Federal Register / Vol. 74, No. 143 / Tuesday, July 28, 2009 / Rules 
and Regulations

[[Page 37394]]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Parts 17, 19, 20, 22, 24, 25, 26, 27, 28, 31, 40, 44, 46, 
and 70

[Docket No. TTB-2009-0003; T.D. TTB-79; Re: Notice No. 96]
RIN 1513-AB63


Liquor Dealer Recordkeeping and Registration, and Repeal of 
Certain Special (Occupational) Taxes

AGENCY: Alcohol and Tobacco Tax and Trade Bureau, Treasury.

ACTION: Temporary rule; Treasury decision.

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SUMMARY: This temporary rule amends the regulations administered by the 
Alcohol and Tobacco Tax and Trade Bureau, to reflect the repeal of 
certain special (occupational) taxes by section 11125 of the Safe, 
Accountable, Flexible, Efficient Transportation Equity Act: A Legacy 
for Users. The repeal involves such taxes on alcohol beverage producers 
and dealers, tax-free alcohol users, denatured spirits users and 
dealers, and persons claiming drawback for the manufacture of 
nonbeverage alcoholic products. In place of the special (occupational) 
tax requirement, the amended law requires recordkeeping and 
registration by dealers in distilled spirits, wines, and beer, and by 
manufacturers of nonbeverage products who claim drawback. We also are 
soliciting comments from all interested parties on these regulatory 
amendments through a notice of proposed rulemaking published elsewhere 
in this issue of the Federal Register.

DATES: Effective Dates: This temporary rule is effective July 28, 2009 
through July 30, 2012.

FOR FURTHER INFORMATION CONTACT: For questions concerning registration 
or occupational tax filing procedures, contact Jackie Feinauer, 
National Revenue Center, Alcohol and Tobacco Tax and Trade Bureau (800-
937-8864); for other questions concerning this document, contact Steve 
Simon, Regulations and Rulings Division, Alcohol and Tobacco Tax and 
Trade Bureau (202-453-2164).

SUPPLEMENTARY INFORMATION: 

Background

    On August 10, 2005, the President signed into law the ``Safe, 
Accountable, Flexible, Efficient Transportation Equity Act: A Legacy 
for Users,'' Public Law 109-59, 119 Stat. 1953 (the Act). Section 11125 
of the Act amended certain provisions of the Internal Revenue Code of 
1986 (IRC) (26 U.S.C.) to repeal, effective July 1, 2008, the 
provisions covering special (occupational) taxes (also referred to in 
this document as SOT or special taxes) on:
    <bullet> Producers and dealers of alcohol beverages,
    <bullet> Manufacturers of nonbeverage products,
    <bullet> Users of tax-free alcohol, and
    <bullet> Users and dealers of specially denatured spirits.
    Although section 11125 repealed the tax for these occupations, it 
did not remove the recordkeeping and registration requirements for 
dealers in alcohol beverages and for manufacturers of nonbeverage 
products. Under section 11125, all persons who sell distilled spirits, 
wine, or beer are dealers. As explained below, this covers only those 
dealers who sell alcohol products fit for beverage use.
    The IRC chapter 51 and 52 provisions referred to above, and the 
regulations promulgated thereunder and contained in title 27 of the 
Code of Federal Regulations, are administered by the Alcohol and 
Tobacco Tax and Trade Bureau (TTB).
    In order to remove the special (occupational) taxes on producers 
and marketers of alcohol beverages, paragraph (a) of section 11125 
repealed the following subparts and sections of IRC chapter 51, 
subchapter A, part II:
    <bullet> Subpart A relating to proprietors of distilled spirits 
plants, bonded wine cellars, etc. (26 U.S.C. 5081);
    <bullet> Subpart B relating to brewers (26 U.S.C. 5091-5093);
    <bullet> Subpart D relating to wholesale dealers, except for 
sections 5114 and 5116 (26 U.S.C. 5111-5113 and 5117);
    <bullet> Subpart E relating to retail dealers, except for section 
5124 (26 U.S.C. 5121-5123 and 5125); and
    <bullet> Subpart G relating to general provisions, except for 
sections 5142, 5143, 5145, and 5146 (26 U.S.C. 5141 and 5147-5149).
    Section 11125(a) also did away with the special (occupational) tax 
on nonbeverage drawback claimants by removing from 26 U.S.C. 5131 the 
reference to annual payment of a special tax. Finally, section 11125(a) 
did away with the special (occupational) tax on industrial use of 
distilled spirits by repealing 26 U.S.C. 5276.
    Paragraph (b) of section 11125 made a number of conforming 
amendments to IRC chapter 51, subchapter A, part II. These amendments 
involved:
    <bullet> Redesignating subpart C as subpart A;
    <bullet> Redesignating subpart F as subpart B (with sections 5131 
through 5134 redesignated as sections 5111 through 5114);
    <bullet> Removing the special tax rate provision from redesignated 
section 5111; and
    <bullet> Adding new subparts C (containing new sections 5121 
through 5124) and D (containing new sections 5131 and 5132). Note: A 
technical error in the designation of section 5121 was corrected by 
section 11(a)(31) of the Tax Technical Corrections Act of 2007 (Pub. L. 
110-172, 121 Stat. 2487).
    New sections 5121, 5122, and 5123 were obtained by redesignating 
sections 5114, 5124, and 5146, respectively. The text of former section 
5112 is included in new section 5121, and the text of former section 
5122 is included in new section 5122. New section 5124, titled 
``Registration by Dealers,'' is patterned after existing section 
7011(a). New section 5131 was obtained by redesignating section 5116, 
and new section 5132 contains, with a change, the text of former 
section 5117.
    Paragraph (b) of section 11125 made additional conforming 
amendments elsewhere in the IRC, of which we note the following:
    <bullet> Chapter 51, subchapter J, part V (section 5691) was 
repealed (although the terms of section 5691(b) were included in new 
section 5121(c)(4)); and
    <bullet> Sections 5142, 5143, and 5145 were redesignated as 
sections 5732, 5733, and 5734 in subchapter D of chapter 52, relating 
to the special tax on tobacco occupations, which remains in effect.

Temporary Rule

    Based on the July 1, 2008, effective date of the repeal of certain 
special (occupational) taxes, as described above, TTB believes that the 
proper administration of the repeal and the related changes to 
recordkeeping and registration requirements necessitates immediate 
adoption of the implementing regulations as a temporary rule.

Public Participation

    To submit comments on the regulatory amendments contained in this 
temporary rule, please refer to the related notice of proposed 
rulemaking on this subject published elsewhere in this issue of the 
Federal Register.

Basic Interpretative Considerations

    Based on a careful reading of the amendments set out in section 
11125 of the Act and resulting statutory language, TTB has applied the 
following considerations in preparing the regulatory changes to title 
27 of the Code of Federal Regulations (27 CFR) set forth in this 
document:

[[Page 37395]]

    1. Application. Consistent with the Government's longstanding 
interpretation of the IRC, liquor dealer recordkeeping and registration 
requirements apply only to dealers in alcohol fit for beverage use. 
See, e.g., 26 CFR 194.21 (1960 ed.). ``Alcohol fit for beverage use'' 
not only includes alcohol beverages but also includes alcoholic 
products for industrial use, unless the products are unfit for beverage 
use.
    2. Frequency of registration. SOT for dealers was an annual tax, 
and filing of the return and registration was required by regulation on 
an annual basis. However, the IRC does not, and never did, require 
annual dealer registration, only that such dealers must ``register with 
the Secretary.'' We see no reason to continue the annual filing 
requirement in the absence of annual collection of a tax. Instead, the 
regulatory changes in this document lessen the dealers' burden by 
requiring registration upon entering business as a dealer, with 
subsequent registrations required only for reporting changes in certain 
information and upon termination of business. On the other hand, 
Manufacturer of Nonbeverage Products (MNBP) drawback claimant 
registration is required annually because of the wording of 26 U.S.C. 
5112. For persons filing MNBP drawback claims under the IRC, the first 
claim for the calendar year will satisfy the registration requirement 
if the claim contains the required registration information; subsequent 
claims with updated information will be considered amended 
registrations.
    3. Registration of proprietors of distilled spirits plants, bonded 
wine cellars, etc. Since the definition of ``dealer'' in new section 
5121(c)(4) of the IRC refers to ``any person who sells, or offers for 
sale, any distilled spirits, wines, or beer,'' the requirements for 
recordkeeping and registration by dealers will also apply to 
proprietors of distilled spirits plants, bonded wine premises, taxpaid 
wine bottling houses, and breweries, if those proprietors sell their 
products or offer them for sale. Although these persons previously were 
generally exempted by 26 U.S.C. 5113 from the registration requirements 
applicable to liquor and beer dealers, this situation changed when 
section 11125 of the Act repealed section 5113 of the IRC and thereby 
deleted the exemption under section 5113.
    In order to minimize the resulting regulatory burden, TTB has 
determined that proprietors of distilled spirits plants, bonded wine 
premises, and taxpaid wine bottling houses who have qualified under the 
IRC, and brewers who hold approved brewers' notices under the IRC, will 
be deemed to have registered as dealers. In other words, the 
qualification and brewer's notice will serve as the registration 
required by section 11125. As part of the qualification or notice 
process, the proprietor must file and maintain in a current status all 
the information required for dealer registration under section 11125. 
Required notices of changes to the information required for IRC 
qualification or the brewer's notice will be considered as amendments 
to the dealer registration, and notice that the proprietor is going out 
of business will terminate the dealer registration as well.
    4. Proprietors will be registered as wholesale liquor dealers. 
Proprietors of distilled spirits plants, bonded wine premises, and 
taxpaid wine bottling houses qualified under the IRC, and brewers who 
hold approved brewers notices under the IRC, will be treated as 
wholesale liquor dealers for registration purposes. This will allow the 
proprietor to sell distilled spirits, wine or beer at wholesale or 
retail from the covered location. For proprietors who have retail 
operations such as taverns on brewery premises, or who run wholesale or 
import operations from their premises and sell alcohol beverages other 
than the ones they produce, this interpretation will give maximum 
registration flexibility. Because industrial distilled spirits plants 
are qualified under the IRC, they will be considered as having 
registered as a wholesale liquor dealer for sales of undenatured 
alcohol. Even though a proprietor who makes no sales of alcohol fit for 
beverage use is not required to register, we believe this approach 
imposes the least overall burden. Since there is no cost to the 
proprietor, there is no reason to make a distinction in the 
registration.
    5. Persons who must register on Form 5630.5d. Persons required to 
hold a basic permit under the Federal Alcohol Administration (FAA) Act 
as wholesalers or importers are considered dealers under section 11125, 
and so must file a registration on Form 5630.5d, as must retail 
dealers. This registration will remain in effect as long as the 
required information remains the same. Changes must be reported by 
filing of an amended Form 5630.5d if any of the required information 
changes, and the registrations must be terminated when covered 
operations cease. States, localities, and the District of Columbia are 
required to register only once as a wholesaler and once as a retailer 
in order to cover all operations within the jurisdiction in question.
    6. Records. Required records for wholesale and retail liquor and 
beer dealers are specified in 27 CFR part 31 and are not significantly 
changed by this document. Breweries and proprietors of distilled 
spirits plants, bonded wine premises, and taxpaid wine bottling houses, 
who keep required records under the applicable IRC regulations, need 
not generate additional records as dealers for the same transactions.
    7. Transition to new rules. For persons who were required to 
register and report changes on TTB Form 5630.5 during the SOT 
suspension period (July 1, 2005, through June 30, 2008), any 
registration filed after January 1, 2007, will constitute a valid 
registration required on or after July 1, 2008, and will continue in 
effect until the required registration information changes or 
operations are terminated. Therefore, such existing registrants will 
not have to re-register to comply with the new registration 
requirements. However, existing businesses that have not registered on 
or after January 1, 2007, must file a one-time registration on or 
before July 1, 2009, using TTB Form 5630.5d. The reasons for these 
dates are as follows: (1) Technically, the last registration required 
under the regulations for the 3-year SOT suspension was due on or 
before July 1, 2007. Most registrants would probably have filed before 
the deadline, but few, if any, would have filed before January 1, 2007; 
and (2) since this document was not published before July 1, 2008, the 
first registration under these new regulations--except for new 
businesses--will be due July 1, 2009. This transition rule applies to 
alcohol beverage dealers, breweries, and proprietors of distilled 
spirits plants, bonded wine premises, and taxpaid wine bottling houses, 
but not to MNBP drawback claimants. As noted above, MNBPs will be 
considered registered when they file the first claim for each year.
    8. Effective date. The amendments made by section 11125 were 
effective on July 1, 2008. However, these regulations take effect on 
the date of their publication in the Federal Register. For the period 
between July 1, 2008, and the effective date of the temporary 
regulations, TTB will not apply or enforce any regulatory provision 
that is clearly inconsistent with current law, since statutory 
provisions always take precedence over conflicting regulations. On the 
other hand, any regulations that are not in conflict with current law 
(for example, the prior recordkeeping requirements) would remain in 
effect until superseded by the new temporary regulations. Further, 
section 11125

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specifies, in paragraph (c), that its amendments ``shall not apply to 
taxes imposed for periods before such date [July 1, 2008].'' Therefore, 
persons who failed to pay special (occupational) tax when it was in 
force are not excused from their prior liability by the repeal of this 
tax.
    9. Employer identification number. Section 6109(a)(1) of the IRC 
(26 U.S.C. 6109(a)(1)) states: ``Any person required under the 
authority of this title to make a return, statement, or other document 
shall include in such return, statement, or other document such 
identifying number as may be prescribed for securing proper 
identification of such person.'' In accordance with this provision and 
subsection (d) of section 6109, the regulations promulgated by this 
document require inclusion of the employer identification number (EIN) 
on registrations for alcohol dealers and manufacturers of nonbeverage 
products. This requirement is unchanged from prior regulations.
    Section 6723 of the IRC imposes a penalty of $50 for each ``failure 
by any person to comply with a specified information reporting 
requirement on or before the time prescribed therefor.'' The definition 
of ``specified information reporting requirement'' in 26 U.S.C. 
6724(d)(3) includes ``any requirement contained in the regulations 
prescribed under section 6109 that a person--(i) include his TIN 
[taxpayer identification number; see 26 U.S.C. 7701(a)(41)] on any 
return, statement, or other document * * *.'' The requirement, imposed 
by these regulations, to include the EIN on the registration is such an 
information reporting requirement. Because a person who does not submit 
a registration has failed to include his EIN on the registration, as 
required, the $50 penalty of 26 U.S.C. 6723 applies. Per 26 U.S.C. 
6724(a), this penalty is not imposed when there is reasonable cause for 
the failure. These principles are reflected in the new temporary 
regulations at 27 CFR 31.14.
    10. Confidentiality of registration information. Because 
registration is required under new section 5112 or 5124 of the IRC, the 
submitted information is subject to the confidentiality and disclosure 
requirements of section 6103 of the IRC, even though most alcohol 
beverage dealers are no longer TTB taxpayers. Accordingly, such 
registration is held to be an ``information return'' within the intent 
of 26 U.S.C. 6103. This holding is reflected in the new temporary 
regulations at 27 CFR 31.15, set forth below.
    11. Tobacco. Section 11125 did not repeal the special 
(occupational) tax on any tobacco occupations; therefore, manufacturers 
of tobacco products, manufacturers of cigarette papers and tubes, and 
tobacco export warehouse proprietors must continue to register and pay 
the special (occupational) tax every year.

Discussion of Specific Regulatory Changes

Part 17--Drawback on Taxpaid Distilled Spirits Used in Manufacturing 
Nonbeverage Products

    The regulations in 27 CFR part 17 govern claims for drawback on 
taxpaid distilled spirits that are used in manufacturing nonbeverage 
products. Several subparts and sections within part 17 are amended in 
this document to conform with the changes made by section 11125 of the 
Act.
    Subpart C Revised. Subpart C has been substantially amended by 
removing all sections relating to special tax and redesignating the 
subpart as ``Subpart C--Registration''. As noted above, effective July 
1, 2008, IRC section 5132 was redesignated as section 5112. As 
redesignated, this section continues to require that every person who 
claims drawback for the manufacture of nonbeverage products must 
register annually as a nonbeverage domestic drawback claimant. Section 
5112 does not specify either how registration will be accomplished or 
the items of information that must be provided as part of the 
registration process. However, as discussed above, TTB has decided that 
registration will be accomplished when the claimant submits a claim for 
drawback along with the supporting information that must be submitted 
with the claim. Thus, the filing of the claim will satisfy the 
requirement to register.
    The revised subpart now includes a new Sec.  17.21 that explains 
this registration of nonbeverage drawback claimants. The revised 
subpart also contains two new sections (Sec. Sec.  17.22 and 17.23) 
relating to the use of, and application for, the employer 
identification number.
    Subpart D Removed. Subpart D--Special Tax Stamps, consisting of 
Sec. Sec.  17.51 through 17.93 and covering the issuance of special tax 
stamps, their subsequent amendment, and refunds of special tax, has 
been removed and reserved.
    Location of Records and Recovery Operations. Several sections 
relating to records (Sec. Sec.  17.161, 17.168, and 17.171) have been 
amended to delete references to the premises covered by the special tax 
stamp.
    Miscellaneous Amendments. In addition to the above amendments, TTB 
has made several minor amendments to the regulations in part 17 by 
removing references to special tax within various sections. We also 
amended several legal citations within the regulations to reflect the 
redesignation of certain sections of law effective July 1, 2008. 
Finally, Sec.  17.4 is revised to reflect the OMB control numbers that 
were assigned when the Alcohol and Tobacco Tax and Trade Bureau was 
created and to remove references to sections that have been removed 
from part 17.

Part 19--Distilled Spirits Plants

    The regulations in 27 CFR part 19 govern operations at distilled 
spirits plants. Several subparts and sections within part 19 have been 
revised or otherwise amended.
    Subpart Ca--Dealer Registration. Subpart Ca has been revised in 
order to remove all references to special tax, and the subpart heading 
has been revised to read ``Dealer Registration and Recordkeeping''. 
Effective July 1, 2008, every proprietor of a distilled spirits plant 
who sells or offers for sale any distilled spirits, wines, or beer must 
register as a dealer. As noted above, TTB has determined that 
proprietors who have registered the distilled spirits plant under the 
qualification provisions of part 19 will be deemed to have registered 
as wholesale liquor dealers at the distilled spirits plant premises. 
The revised subpart Ca includes a new Sec.  19.50 which explains the 
registration process for proprietors. In addition, the revised subpart 
contains a new section on amending the registration (Sec.  19.51) and a 
new section on dealer records (Sec.  19.52).
    Dealer Recordkeeping. Although distilled spirits plants proprietors 
who sell, or offer for sale, distilled spirits fit for beverage use 
will be subject to the recordkeeping requirements of 26 U.S.C. 5121, 
new Sec.  19.52 provides that the records required by subpart W of part 
19 will satisfy those requirements, except where the distilled spirits 
plant engages in dealer operations not already covered by the 
recordkeeping requirements of part 19.
    Alcohol Fuel Plants. In general, alcohol fuel plants would not be 
subject to the requirements applicable to alcohol beverage dealers, 
because they generally do not produce and sell alcohol fit for beverage 
use. However, an alcohol fuel plant that sells distilled spirits that 
have not been rendered unfit for beverage use (for transfer in bond to 
a distilled spirits plant or another alcohol fuel plant) would meet the 
definition of a ``dealer.'' Therefore,

[[Page 37397]]

Sec.  19.906 is revised to clarify that such an alcohol fuel plant is 
subject to the provisions of revised subpart Ca.
    Miscellaneous Amendments. In addition to the above amendments, TTB 
has made several minor amendments to the regulations in part 19 to 
remove references to special tax in various sections. We also amended 
several legal citations within the regulations to reflect the 
redesignation of certain sections of law that went into effect on July 
1, 2008. For example, a reference to ``26 U.S.C. 5131-5134'' in the 
definition of ``alcoholic flavoring material'' of Sec.  19.11 has been 
replaced with a reference to ``26 U.S.C. 5111-5114''.

Part 20--Distribution and Use of Denatured Alcohol and Rum

    The regulations in 27 CFR part 20 govern the distribution and use 
of denatured alcohol and rum. Effective July 1, 2008, section 
11125(a)(3) of the Act repealed 26 U.S.C. 5276, which imposed a special 
tax on dealers and users of denatured alcohol and rum. Accordingly, in 
part 20, subpart Ca--Special (Occupational) Taxes has been removed and 
reserved. TTB also notes in this regard that dealers and users of 
denatured alcohol and rum who operate within the requirements of the 
law and regulations, selling denatured products for nonbeverage 
purposes only, are not considered to be ``dealers'' under the IRC and 
therefore will not be required to register as such.

Part 22--Distribution and Use of Tax-Free Alcohol

    The regulations in 27 CFR part 22 govern the distribution and use 
of tax-free alcohol. As in the case of part 20 discussed above, the 
repeal of 26 U.S.C. 5276, which imposed a special tax on users of tax-
free alcohol, necessitates the removal from part 22 of subpart Ca--
Special (Occupational) Taxes. Similarly, users of tax-free alcohol are 
generally not considered to be ``dealers'' under the IRC and therefore 
will not be required to register as such. However, this document also 
amends Sec.  22.102 to provide that any person who sells tax-free 
alcohol will become a dealer and therefore will be subject to the 
provisions of part 31 (since tax-free alcohol is fit for beverage use).

Part 24--Wine

    The regulations in 27 CFR part 24 govern operations at bonded wine 
premises and taxpaid wine bottling houses.
    Dealer Registration. As a result of the changes to the IRC made by 
section 11125 of the Act, effective July 1, 2008, every proprietor of 
bonded wine premises and every proprietor of a taxpaid wine bottling 
house who sells or offers for sale any distilled spirits, wines, or 
beer must register as a dealer. As noted above, TTB has determined that 
proprietors who have qualified as a bonded wine premises or taxpaid 
wine bottling house under part 24 will be deemed to have registered as 
a wholesale liquor dealer at those premises. Section 24.52 is revised 
to explain the registration process for these proprietors.
    Dealer Recordkeeping. Although proprietors of wine premises who 
sell beverage wine (or who offer it for sale) will be subject to the 
recordkeeping requirements of 26 U.S.C. 5121, Sec.  24.54 is revised to 
provide that the records required by subpart O of part 24 will satisfy 
these requirements, except where the bonded wine cellar or taxpaid wine 
bottling house engages in dealer operations not covered by the 
recordkeeping requirements of part 24.
    Miscellaneous Amendments to Part 24. Several sections in part 24 
relating to special tax have been removed. In addition, several 
sections have been amended by removing all reference to special tax and 
by replacing those references, where appropriate, with provisions 
covering the registration of proprietors as dealers. TTB notes that 
with regard to Sec.  24.146, which covers bonds, although the specific 
reference to special tax is removed, bonds will still cover liability 
for unpaid special tax that was due prior to the repeal. Finally, Sec.  
24.53 is revised to cover amendment of the dealer registration.

Part 25--Beer

    The regulations in 27 CFR part 25 govern operations at breweries. 
Subpart I and several sections in part 25 have been amended.
    Subpart I--Dealer Registration. Subpart I has been revised in order 
to remove all sections relating to special tax, and the subpart heading 
has been revised to read ``Subpart I--Dealer Registration and 
Recordkeeping.'' As a result of the changes to the IRC made by section 
11125 of the Act, effective July 1, 2008, every proprietor of a brewery 
who sells or offers for sale any distilled spirits, wines, or beer must 
register as a dealer. As noted above, TTB has determined that 
registration of the brewery premises will be accomplished when the 
proprietor files a Brewer's Notice, Form 5130.10, and TTB approves the 
notice. The revised subpart includes Sec.  25.112, which explains the 
registration process for proprietors. In addition, the revised subpart 
contains a section on amending the registration (Sec.  25.113), which 
provides that amendments to the brewer's notice serve as amended dealer 
registrations, and a section on dealer records (Sec.  25.114--see the 
description of this section immediately below).
    Dealer Recordkeeping. Although brewers who sell beverage beer (or 
offer it for sale) will be subject to the recordkeeping requirements of 
26 U.S.C. 5121, the records required by subpart U of part 25 provide 
similar information. Therefore, Sec.  25.114 provides that the records 
of subpart U will satisfy the requirements of section 5121 of the IRC, 
except where the brewer engages in dealer operations not covered by the 
recordkeeping requirements of part 25.
    Employer Identification Number. Section 25.168, which concerns 
employer identification numbers, has been amended to revise a cross 
reference to instructions regarding the application for an employer 
identification number. Those instructions were formerly in subpart I 
and addressed the preparation of the special tax return. Since subpart 
I now deals with dealer registration, those instructions have been 
removed from that subpart and added as a new Sec.  25.169, and the 
cross reference in Sec.  25.168 has been revised accordingly.
    Miscellaneous Amendments. In addition to the above amendments, TTB 
has made several minor amendments to the part 25 regulations by 
removing references to special tax in various sections.

Part 26--Liquors and Articles From Puerto Rico and the Virgin Islands

    The regulations in 27 CFR part 26 govern operations of persons 
bringing alcohol beverages and certain other alcoholic products to the 
United States from Puerto Rico and the Virgin Islands. These persons 
include brewers, proprietors of distilled spirits plants and bonded 
wine cellars, dealers in denatured alcohol, and nonbeverage drawback 
claimants. Accordingly, several sections in part 26 are affected.
    Industrial Alcohol. Since the special tax provisions on tax-free 
alcohol users, and on denatured spirits users and dealers, are 
repealed, Sec.  26.36 is amended by removing references to that tax, 
and Sec.  26.47 is removed. Because tax-free alcohol is fit for 
beverage use, persons shipping such alcohol to the United States for 
sale are subject to registration as alcohol beverage dealers; however, 
such registration will be accomplished by obtaining a distilled spirits 
plant permit and complying with the other requirements of 27 CFR part 
19. Section 26.36(b) is amended accordingly. Section 26.46, which 
relates only to special (occupational) tax

[[Page 37398]]

on distilled spirits plant proprietors, is removed.
    Nonbeverage drawback claimant registration. Sections 26.171 and 
26.173 (Puerto Rico), and Sec. Sec.  26.307 and 26.309 (Virgin 
Islands), are revised or otherwise amended to replace references to the 
special tax for nonbeverage drawback claimants with a discussion of the 
new registration requirement for claimants similar to the discussion in 
part 17 above.
    Dealer registration. In Sec. Sec.  26.44 and 26.45 (Puerto Rico) 
and Sec. Sec.  26.210 and 26.211 (Virgin Islands), references to the 
special tax registration and return for alcohol occupations are changed 
to refer to dealer registration and recordkeeping.
    Miscellaneous Amendments. We changed a legal citation within the 
definition of ``eligible flavors'' and several informational citations 
to reflect the redesignation of certain sections of law affected by 
section 11125 of the Act. We made some minor technical amendments in 
Sec. Sec.  26.173(a) and 26.309(a) relating to the description of the 
drawback rate and the procedure for filing drawback claims. In 
Sec. Sec.  26.173(c) and 26.309(c), we replaced the requirement for 
entering the control number on the special tax stamp with a requirement 
for entering the claimant's employer identification number, since the 
special tax return (which is no longer filed by these claimants) 
formerly supplied TTB with that information.

Part 27--Importation of Distilled Spirits, Wines, and Beer

    The regulations in 27 CFR part 27 govern operations of persons 
importing distilled spirits, wine, and beer into the United States. 
Several sections of regulations within part 27 have been amended.
    Dealer registration. In Sec. Sec.  27.30 and 27.31, references to 
the special tax registration and return for alcohol occupations are 
changed to refer to dealer registration.
    Miscellaneous Amendments. We also changed a legal citation within 
the definition of ``eligible flavors'' and several informational 
citations to reflect the redesignation of certain sections of law 
affected by section 11125 of the Act.

Part 28--Exportation of Alcohol

    The regulations in 27 CFR part 28 govern operations by persons 
exporting distilled spirits, wines, and beer to foreign countries and 
possessions of the United States. Section 28.212, dealing with persons 
authorized to export wine with benefit of drawback, is revised to 
replace the reference to payment of special tax as a wholesale liquor 
dealer with a reference to registration as such a dealer under part 31. 
Also, the authority citation for part 28 is revised to reflect the 
repeal or redesignation of certain sections of law by section 11125 of 
the Act.

Part 31--Alcohol Beverage Dealers

    The regulations in 27 CFR part 31 govern the operations of alcohol 
beverage dealers. The principal subject matter of part 31 historically 
has been the special (occupational) tax. The elimination of that tax 
makes it necessary to revise the entire part. In general, we have 
attempted in this document to retain as much of the old part 31 as can 
be adapted to the IRC provisions as amended by section 11125 of the 
Act. Nevertheless, the new part 31 set forth in this document is 
significantly shorter. References to the special (occupational) tax are 
removed, the part is reorganized, conforming changes are made to cross 
references, and OMB information collection approval numbers are 
updated. Several new sections are added to clarify producers' status as 
dealers (Sec.  31.48), to describe situations where registration is 
required (Sec. Sec.  31.137 and 31.138), to clarify liability for 
special (occupational) tax for periods prior to its elimination (Sec.  
31.234), and to set forth penalty and disclosure provisions (Sec. Sec.  
31.14 and 31.15). In addition, sections concerning preparation of the 
special tax return are redrafted to cover preparation of the dealer 
registration form, and sections concerning exemption from dealer's 
special tax for persons who registered as producers are removed.
    Sections that formerly clarified liability for special tax have 
been revised to clarify when persons are considered to be dealers 
subject to the regulations. Some of these clarifications in part 31 
were based on specific statutory exemptions formerly contained in 26 
U.S.C. 5113 and 5123. Although these two statutory provisions were 
repealed by section 11125 of the Act, we will continue to apply those 
exemptions as administrative interpretations.
    As noted above, the exemption in repealed section 5113 of the IRC 
for proprietors of controlled premises (distilled spirits plants, 
bonded wine cellars, taxpaid wine bottling houses, and breweries) has 
been retained in effect by allowing qualification documents and records 
required by part 19, 24, or 25, as applicable, to satisfy the alcohol 
dealer registration and recordkeeping requirements (Sec. Sec.  31.48, 
31.154). Other exemptions and exceptions in repealed section 5113 that 
are retained in the revised part 31 texts pertain to: States, political 
subdivisions, etc. (Sec. Sec.  31.43, 31.153); creditors, fiduciaries, 
and officers of court (Sec. Sec.  31.62(a), (b) and (c)); retiring 
partners or representatives of deceased partners (Sec.  31.62(d)); 
persons returning liquors for credit, refund, or exchange (Sec.  
31.67); dealers making sales on purchaser dealers' premises (Sec. Sec.  
31.52 and 31.53); retail dealers selling in liquidation (Sec.  31.66); 
and retail dealers selling to limited retail dealers (Sec.  31.55(b)).
    Exemptions and exceptions contained in repealed section 5123 of the 
IRC that are retained in the revised part 31 texts pertain to: 
Wholesale dealers making retail sales (Sec.  31.51); retail dealers 
``at large'' (Sec.  31.94); dealers on trains, aircraft, or vessels 
(Sec. Sec.  31.91 through 31.93); and liquor stores operated by States, 
political subdivisions, etc. (Sec. Sec.  31.43, 31.153). The exemption 
from additional special tax when a wholesale or retail dealer in beer 
begins to sell other liquors, which was formerly provided for in 
repealed sections 5113(g) and 5123(c) of the IRC, is not retained in 
the revised part 31 texts for registration purposes, because section 
11125 of the Act requires a dealer to register his or her ``trade or 
business'' (see new Sec.  31.75).
    The table below shows the source of, and extent of the change 
reflected in, each section in revised part 31:

------------------------------------------------------------------------
             New section                       Source  (action)
------------------------------------------------------------------------
31.0................................  31.1 (P)
------------------------------------------------------------------------
                      Subpart A--General Provisions
------------------------------------------------------------------------
31.1................................  31.11 (P)
31.2................................  31.2 (O)
31.3................................  31.3 (P)
31.4................................  31.4 (P)
------------------------------------------------------------------------
                  Subpart B--Administrative Provisions
------------------------------------------------------------------------
31.11...............................  31.41 (P)
31.12...............................  31.42 (O)
31.13...............................  31.43 (O)
31.14...............................  31.109, 31.111 (C)
31.15...............................  26 U.S.C. 6103 (N)
------------------------------------------------------------------------
               Subpart C--Activities Subject to this Part
------------------------------------------------------------------------
31.21...............................  31.21 (P)
31.22...............................  31.22 (O)
------------------------------------------------------------------------
                           Dealers Classified
------------------------------------------------------------------------
31.31...............................  31.23 (P)
31.32...............................  31.24 (P)
31.33...............................  31.25 (P)
31.34...............................  31.26 (P)
31.35...............................  31.27 (O)
31.36...............................  31.28 (O)
------------------------------------------------------------------------

[[Page 37399]]

 
              Certain Organizations, Agencies, and Persons
------------------------------------------------------------------------
31.41...............................  31.29 (P)
31.42...............................  31.30 (P)
31.43...............................  31.31 (P)
31.44...............................  31.32 (P)
31.45...............................  31.33 (P)
31.46...............................  31.34 (P)
31.47...............................  31.35 (P)
31.48...............................  (N)
------------------------------------------------------------------------
                  Subpart D--Exemptions and Exceptions
------------------------------------------------------------------------
          Persons Exempt From Registration and/or Recordkeeping
------------------------------------------------------------------------
31.51...............................  31.23(c)(1) and 31.25(c)(1) (C)
31.52...............................  31.185 (P)
31.53...............................  31.186 (P)
31.54...............................  31.187 (P)
31.55...............................  31.187a (P)
------------------------------------------------------------------------
             Persons Who Are Not Dealers in Liquors or Beer
------------------------------------------------------------------------
31.61...............................  31.181 (C)
31.62...............................  31.188 (P)
31.63...............................  31.189 (P)
31.64...............................  31.190 (P)
31.65...............................  31.191 (P)
31.66...............................  31.192 (O)
31.67...............................  31.193 (P)
------------------------------------------------------------------------
                Subpart E--Places Subject to Registration
------------------------------------------------------------------------
31.71...............................  31.51 (P)
31.72...............................  31.52 (O)
31.73...............................  31.53 (P)
31.74...............................  31.54 (P)
31.75...............................  31.72 (C)
------------------------------------------------------------------------
             Sales in Two or More Areas on the Same Premises
------------------------------------------------------------------------
31.81...............................  31.57 (P)
31.82...............................  31.58 (P)
31.83...............................  31.59 (P)
------------------------------------------------------------------------
                       Sales in Multiple Locations
------------------------------------------------------------------------
31.91...............................  31.124 (P)
31.92...............................  31.125 (P)
31.93...............................  31.126 (P)
31.94...............................  31.127 (P)
31.95...............................  31.55 (P)
31.96...............................  31.56 (P)
------------------------------------------------------------------------
                         Subpart F--Partnerships
------------------------------------------------------------------------
31.101..............................  31.91 (P)
31.102..............................  31.92 (P)
31.103..............................  31.93 (P)
31.104..............................  31.94 (P)
------------------------------------------------------------------------
               Subpart G--Registration Form, TTB F 5630.5d
------------------------------------------------------------------------
31.111..............................  31.102 (C)
31.112..............................  31.106(c) (P)
31.113..............................  31.104a (P)
31.114..............................  31.106 (P)
31.115..............................  31.106a (P)
31.116..............................  31.107 (P)
------------------------------------------------------------------------
             Subpart H--Changes in Registration Information
------------------------------------------------------------------------
            Changes Requiring Registration as a New Business
------------------------------------------------------------------------
31.121..............................  31.161 (P)
31.122..............................  31.162 (P)
31.123..............................  31.163 (P)
31.124..............................  31.164 (P)
31.125..............................  (N)
------------------------------------------------------------------------
                              Other Changes
------------------------------------------------------------------------
31.131..............................  31.151 (C)
31.132..............................  31.165 (P)
31.133..............................  31.165 (C)
31.134..............................  31.166 (P)
31.135..............................  31.167 (P)
31.136..............................  31.168 (P)
31.137..............................  (N)
31.138..............................  (N)
------------------------------------------------------------------------
   Subpart I--Restrictions Relating to Purchases of Distilled Spirits
------------------------------------------------------------------------
31.141..............................  31.211 (P)
------------------------------------------------------------------------
                     Subpart J--Records and Reports
------------------------------------------------------------------------
                 Wholesale Dealers' Records and Reports
------------------------------------------------------------------------
31.151..............................  31.221 (P)
31.152..............................  31.222 (P)
31.153..............................  31.223 (P)
31.154..............................  31.224 (P)
31.155..............................  31.225 (P)
31.156..............................  31.226 (P)
31.157..............................  31.227 (P)
31.158..............................  31.228 (P)
31.159..............................  31.229 (O)
31.160..............................  31.230 (O)
31.161..............................  31.231 (P)
31.162..............................  31.232 (P)
31.163..............................  31.233 (P)
------------------------------------------------------------------------
            Filing of Wholesale Dealer's Records and Reports
------------------------------------------------------------------------
31.171..............................  31.235 (P)
31.172..............................  31.236 (P)
------------------------------------------------------------------------
                         Retail Dealer's Records
------------------------------------------------------------------------
31.181..............................  31.234 (O)
------------------------------------------------------------------------
                     Retention of Records and Files
------------------------------------------------------------------------
31.191..............................  31.237 (P)
31.192..............................  31.238 (P)
------------------------------------------------------------------------
         Subpart K--Reuse and Possession of Used Liquor Bottles
------------------------------------------------------------------------
31.201..............................  31.261 (N)
31.202..............................  31.262 (P)
31.203..............................  31.263 (N)
31.204..............................  31.264 (P)
------------------------------------------------------------------------
           Subpart L--Packaging of Alcohol for Industrial Uses
------------------------------------------------------------------------
31.211..............................  31.271 (P)
31.212..............................  31.272 (O)
------------------------------------------------------------------------
    Subpart M--Distilled Spirits for Export with Benefit of Drawback
------------------------------------------------------------------------
31.221..............................  31.281 (P)
31.223..............................  31.283 (P)
------------------------------------------------------------------------
                        Subpart N--Miscellaneous
------------------------------------------------------------------------
31.231..............................  31.291 (O)
31.232..............................  31.292 (O)
31.233..............................  31.293 (P)
31.234..............................  (N)
------------------------------------------------------------------------
* Actions: (C) = Complete revision;
(N) = New section; (O) = No revision;
(P) = Partial revision.

Part 40--Manufacture of Tobacco Products and Cigarette Papers and Tubes

    The regulations in 27 CFR part 40 govern manufacturers of tobacco 
products and cigarette papers and tubes. Although section 11125 of the 
Act did not do away with the special tax on tobacco occupations, TTB 
believes that it would be appropriate to have the special tax 
provisions applicable to tobacco products and cigarette papers and 
tubes in one place, similar to the approach taken in revised part 31 
for alcohol beverage dealer registration. Accordingly, in this document 
we have removed and reserved a number of part 40 sections and 
transferred their contents to a new subpart D in part 46, which 
contains miscellaneous regulations relating to tobacco products and 
cigarette papers and tubes.
    In addition to the transfer of special tax provisions to part 46, 
this document includes a number of other changes to the part 40 texts. 
A definition of ``special tax'' is added to Sec.  40.11 to facilitate 
its use in the part 40 texts in place of ``special (occupational) 
tax.'' Section 40.31 is amended by removing the 1988 transition rule in 
paragraph (b), clarifying liability for special tax under a 
partnership, and updating the informational citation at the end of the 
section. The informational citation at the end of Sec.  40.371 is also 
amended to reflect the redesignation of certain IRC sections by section 
11125 of the Act. Finally, Sec. Sec.  40.33 and 40.373 are revised to 
serve as cross references to the special tax provisions of part 46.

Part 44--Exportation of Tobacco Products and Cigarette Papers and 
Tubes, Without Payment of Tax, or With Drawback of Tax

    The regulations in 27 CFR part 44 govern exportation of tobacco 
products and cigarette papers and tubes. For the same reason stated for 
part 40 above, we

[[Page 37400]]

have transferred the part 44 special tax provisions to new subpart D of 
part 46.
    For the same reason stated for Sec.  40.11 above, a definition of 
``special tax'' is added to Sec.  44.11. In addition, Sec.  44.31 is 
amended by removing the superseded 1988 transition rule in paragraph 
(b), clarifying liability for special tax under a partnership, and 
updating the informational citation at the end to reflect the 
redesignation of certain IRC sections by section 11125 of the Act. 
Finally, Sec.  44.33 is revised to direct users to part 46 for 
additional provisions concerning special tax.

Part 46--Miscellaneous Regulations Relating to Tobacco Products and 
Cigarette Papers and Tubes

    As discussed above, we are adding a new subpart D to 27 CFR part 46 
to set forth provisions related to special tax on tobacco product and 
related occupations. Certain sections are consolidated from parts 40 
and 44, and others are adopted from the liquor dealer regulations in 
part 31. The regulations adopted for part 46 from part 31 reflect 
special tax policy positions developed through rulemaking during the 
time we administered the dealer's tax. Because we would be guided by 
these positions if similar questions arose concerning regulated 
entities in the tobacco product and related occupations, we are 
adopting them for part 46 purposes to preserve the precedents that 
existed. The table below shows the source of each new subpart D 
section:

------------------------------------------------------------------------
         New section number                         Source
------------------------------------------------------------------------
46.91...............................  new
46.92...............................  new
46.93...............................  31.57 and 31.71
46.94...............................  31.4, 31.123
46.95...............................  31.91
------------------------------------------------------------------------
                         Payment of Special Tax
------------------------------------------------------------------------
46.101..............................  40.33, 40.373, and 44.33
46.102..............................  40.34 and 44.34
46.103..............................  31.104
46.104..............................  31.105
46.105..............................  31.138
46.106..............................  31.122
46.107..............................  31.109
46.108..............................  31.110
46.109..............................  31.111
------------------------------------------------------------------------
                           Special Tax Stamps
------------------------------------------------------------------------
46.116..............................  40.35, 40.374, and 44.35
46.117..............................  31.132
46.118..............................  31.133
46.119..............................  31.153
46.120..............................  31.134
46.121..............................  31.135
------------------------------------------------------------------------
            Changes in Businesses Holding Special Tax Stamps
------------------------------------------------------------------------
46.126..............................  40.36, 40.375, 44.36 and 31.151-
                                       31.152
46.127..............................  40.36, 40.375, 44.36, 17.77, and
                                       31.163
------------------------------------------------------------------------
           Stamps for Incorrect Period or Incorrect Liability
------------------------------------------------------------------------
46.131..............................  31.136
46.132..............................  31.137-139
------------------------------------------------------------------------
                  Abatement or Refund of Special Taxes
------------------------------------------------------------------------
46.136..............................  31.201
46.137..............................  31.202
46.138..............................  31.203
------------------------------------------------------------------------

    We did not adopt those provisions of part 31 that dealt with 
exemptions and exceptions from liquor dealers tax because we do not 
believe they are relevant to the special tax on tobacco product and 
related occupations.

Part 70--Procedure and Administration

    Part 70 of 27 CFR sets forth the procedural and administrative 
rules of the Alcohol and Tobacco Tax and Trade Bureau. We have amended 
various sections within part 70 to change references to special tax on 
alcohol occupations to references to dealer registration or claimant 
registration while retaining or adding references to special tax on 
tobacco occupations. We have also removed references to OMB approval 
after Sec. Sec.  70.411, 70.412, and 70.414, and 70.431, because those 
sections are part of the Statement of Procedural Rules. These sections 
do not impose a recordkeeping requirement but rather only point to 
regulatory provisions that do impose a recordkeeping requirement. 
Finally, no changes were made to the title of subpart D or to 
Sec. Sec.  70.61, 70.64, 70.433, 70.441, 70.442, or 70.448, because 
they refer to occupational taxes that are still in effect.

Regulatory Flexibility Act

    We certify that this temporary rule will not have a significant 
economic impact on a substantial number of small entities. Accordingly, 
a regulatory flexibility analysis is not required. The relevant 
collections of information derive directly from the Internal Revenue 
Code of 1986, as amended, and the regulations in this rule concerning 
these collections merely implement the statutory requirements. 
Likewise, any secondary or incidental effects, and any reporting, 
recordkeeping, or other compliance burdens flow directly from the 
statute. Pursuant to 26 U.S.C. 7805(f), this temporary regulation will 
be submitted to the Chief Counsel for Advocacy of the Small Business 
Administration for comment on its impact on small businesses.

Paperwork Reduction Act

    TTB has provided estimates of the burdens that the collections of 
information contained in these regulations impose, and these estimated 
burdens have been reviewed and approved by the Office of Management and 
Budget (OMB) in accordance with the Paperwork Reduction Act of 1995 (44 
U.S.C. 3507) and assigned control numbers 1513-0088, 1513-0112, and 
1513-0113. Finally, TTB has provided the public with notice of these 
collections of information and solicited comments on them, with the 
most recent notices being published in the Federal Register on May 2, 
2006 (71 FR 25889) for OMB No. 1513-0088, November 21, 2007 (72 FR 
65646) for OMB No. 1513-0113, and September 4, 2008 (73 FR 51699) for 
OMB No. 1513-0112. To date, TTB has not received any comments in 
response to these notices.
    Under the Paperwork Reduction Act of 1995, an agency may not 
conduct or sponsor, and a person is not required to respond to, a 
collection of information unless it displays a valid OMB control 
number.
    Comments concerning suggestions for reducing the burden of the 
collections of information in this document should be directed to Mary 
A. Wood, Alcohol and Tobacco Tax and Trade Bureau, at any of these 
addresses:
    <bullet> P.O. Box 14412, Washington, DC 20044-4412;
    <bullet> 202-927-8525 (facsimile); or
    <bullet> <a href="/cdn-cgi/l/email-protection#066069746b65696b6b636872754672726428616970"><span class="__cf_email__" data-cfemail="a7c1c8d5cac4c8cacac2c9d3d4e7d3d3c589c0c8d1">[email protected]</span></a> (e-mail).

Executive Order 12866

    This is not a significant regulatory action as defined in E.O. 
12866. Therefore, it requires no regulatory assessment.

Inapplicability of Prior Notice and Comment and Delayed Effective Date 
Procedures

    Because this document merely implements a law which was effective 
on July 1, 2008, and because immediate guidance is necessary to 
implement the provisions of the law, it is found to be impracticable to 
issue this Treasury decision with notice and public procedure under 5 
U.S.C. 553(b).
    Pursuant to the provisions of 5 U.S.C. 553(d)(1), (d)(2), and 
(d)(3), we are issuing these regulations without a delayed effective 
date. These temporary regulations recognize an exemption within the 
meaning of section 553(d)(1)

[[Page 37401]]

and (d)(2) because they lessen burdens by recognizing previously filed 
documents as registration and recognize longstanding agency 
interpretations in previously published regulations, respectively. 
Furthermore, TTB has determined that good cause exists to provide 
industry members with immediate guidance on their utilization of 
registration procedures in accordance with section 553(d)(3).

Drafting Information

    Steve Simon, Daniel Hiland, and Marjorie Ruhf of the Regulations 
and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau, drafted 
this document. Other personnel also participated in its development.

List of Subjects

27 CFR Part 17

    Administrative practice and procedure, Claims, Cosmetics, Customs 
duties and inspection, Drugs, Excise taxes, Exports, Imports, Liquors, 
Packaging and containers, Puerto Rico, Reporting and recordkeeping 
requirements, Spices and flavorings, Surety bonds, Virgin Islands.

27 CFR Part 19

    Administrative practice and procedures, Caribbean Basin Initiative, 
Claims, Electronic funds transfers, Excise taxes, Exports, Gasohol, 
Imports, Labeling, Liquors, Packaging and containers, Puerto Rico, 
Reporting and recordkeeping requirements, Research, Security measures, 
Surety bonds, Vinegar, Virgin Islands, Warehouses.

27 CFR Part 20

    Alcohol and alcoholic beverages, Claims, Cosmetics, Excise taxes, 
Labeling, Packaging and containers, Penalties, Reporting and 
recordkeeping requirements, Surety bonds.

27 CFR Part 22

    Administrative practice and procedure, Alcohol and alcoholic 
beverages, Excise taxes, Reporting and recordkeeping requirements, 
Surety bonds.

27 CFR Part 24

    Administrative practice and procedure, Claims, Electronic fund 
transfers, Excise taxes, Exports, Food additives, Fruit juices, 
Labeling, Liquors, Packaging and containers, Reporting and 
recordkeeping requirements, Research, Scientific equipment, Spices and 
flavoring, Surety bonds, Vinegar, Warehouses, Wine.

27 CFR Part 25

    Administrative practice and procedure, Beer, Claims, Electronic 
funds transfers, Excise taxes, Exports, Labeling, Packaging and 
containers, Reporting and recordkeeping requirements, Research, Surety 
bonds.

27 CFR Part 26

    Administrative practice and procedure, Alcohol and alcoholic 
beverages, Caribbean Basin Initiative, Claims, Customs duties and 
inspection, Electronic funds transfers, Excise taxes, Packaging and 
containers, Puerto Rico, Reporting and recordkeeping requirements, 
Surety bonds, Virgin Islands, Warehouses.

27 CFR Part 27

    Alcohol and alcoholic beverages, Beer, Cosmetics, Customs duties 
and inspection, Electronic funds transfers, Excise taxes, Imports, 
Labeling, Liquors, Packaging and containers, Reporting and 
recordkeeping requirements, Wine.

27 CFR Part 28

    Aircraft, Alcohol and alcoholic beverages, Armed forces, Beer, 
Claims, Excise taxes, Exports, Foreign trade zones, Labeling, Liquors, 
Packaging and containers, Reporting and recordkeeping requirements, 
Surety bonds, Vessels, Warehouses, Wine.

27 CFR Part 31

    Alcohol and alcoholic beverages, Excise taxes, Exports, Packaging 
and containers, Reporting and recordkeeping requirements.

27 CFR Part 40

    Cigars and cigarettes, Claims, Electronic funds transfers, Excise 
taxes, Imports, Labeling, Packaging and containers, Reporting and 
recordkeeping requirements, Surety bonds, Tobacco.

27 CFR Part 44

    Aircraft, Armed forces, Cigars and cigarettes, Claims, Customs 
duties and inspection, Excise taxes, Exports, Foreign trade zones, 
Labeling, Packaging and containers, Reporting and recordkeeping 
requirements, Surety bonds, Tobacco, Vessels, Warehouses.

27 CFR Part 46

    Administrative practice and procedure, Cigars and cigarettes, 
Claims, Excise taxes, Packaging and containers, Penalties, Reporting 
and recordkeeping requirements, Seizures and forfeitures, Surety bonds, 
Tobacco.

27 CFR Part 70

    Administrative practice and procedure, Claims, Excise taxes, 
Freedom of information, Law enforcement, Penalties, Reporting and 
recordkeeping requirements, Surety bonds.

Authority and Issuance

0
For the reasons discussed in the preamble, TTB amends 27 CFR parts 17, 
19, 20, 22, 24, 25, 26, 27, 28, 31, 40, 44, 46, and 70 as set forth 
below:

PART 17--DRAWBACK ON TAXPAID DISTILLED SPIRITS USED IN 
MANUFACTURING NONBEVERAGE PRODUCTS

0
1. The authority citation for part 17 is revised to read as follows:

    Authority:  26 U.S.C. 5010, 5111-5114, 5123, 5206, 5273, 6065, 
6091, 6109, 7213, 7652, 7805; 31 U.S.C. 9301, 9303, 9304, 9306.


Sec.  17.1   [Amended]

0
2. Section 17.1 is amended by removing the words, ``the payment of 
special (occupational) taxes in order to be eligible to receive 
drawback;''.
0
3. Section 17.4 is revised to read as follows:


Sec.  17.4   OMB control numbers assigned under the Paperwork Reduction 
Act.

    (a) Purpose. This section collects and displays the control numbers 
assigned to the information collection requirements of this part by the 
Office of Management and Budget under the Paperwork Reduction Act of 
1995.
    (b) OMB control number 1513-0013. OMB control number 1513-0013 is 
assigned to the following section in this part: Sec.  17.106.
    (c) OMB control number 1513-0014. OMB control number 1513-0014 is 
assigned to the following sections in this part: Sec. Sec.  17.6 and 
17.105.
    (d) OMB control number 1513-0021. OMB control number 1513-0021 is 
assigned to the following sections in this part: Sec. Sec.  17.121, 
17.126, 17.127, 17.132, and 17.136.
    (e) OMB control number 1513-0130. OMB control number 1513-0130 is 
assigned to the following sections in this part: Sec. Sec.  17.142, 
17.145, and 17.146.
    (f) OMB control number 1513-0036. OMB control number 1513-0036 is 
assigned to the following section in this part: Sec.  17.6.
    (g) OMB control number 1513-0072. OMB control number 1513-0072 is 
assigned to the following sections in this part: Sec. Sec.  17.3, 
17.111, 17.112, 17.122, 17.123, 17.124, 17.125, 17.143, 17.168(a), 
17.183, and 17.187.
    (h) OMB control number 1513-0073. OMB control number 1513-0073 is 
assigned to the following sections in this part: Sec. Sec.  17.161, 
17.162, 17.163,

[[Page 37402]]

17.164, 17.165, 17.166, 17.167, 17.168(b), 17.169, 17.170, 17.182, and 
17.186.
    (i) OMB control number 1513-0088. OMB control number 1513-0088 is 
assigned to the following section in this part: Sec.  17.23.
    (j) OMB control number 1513-0098. OMB control number 1513-0098 is 
assigned to the following sections in this part: Sec. Sec.  17.147 and 
17.182.


Sec.  17.11   [Amended]

0
4. Section 17.11 is amended by removing the definition of ``Special 
tax''.
0
5. Subpart C is revised to read as follows:
Subpart C--Registration
Sec.
17.21 Registration.
17.22 Employer identification number.
17.23 Application for employer identification number.

Subpart C--Registration


Sec.  17.21   Registration.

    Every person claiming drawback under this part must register 
annually as a nonbeverage domestic drawback claimant. Registration will 
be accomplished when the claimant submits the first drawback claim for 
each year along with the supporting data required under subpart G of 
this part. No registration is required for any year in which the 
claimant does not file a claim for drawback.


Sec.  17.22   Employer identification number.

    Every person who claims drawback under this part must enter on each 
claim for drawback filed on TTB Form 5620.8, Claim--Alcohol, Tobacco, 
and Firearms Taxes, the employer identification number (EIN) assigned 
by the Internal Revenue Service.

(26 U.S.C. 6109, 6723)


Sec.  17.23   Application for employer identification number.

    (a) Use Form SS-4. A claimant 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 http://www.irs.gov or from the TTB National Revenue Center. The 
claimant must file this form with IRS in accordance with the 
instructions on the form.
    (b) One EIN only. Each claimant must obtain and use only one EIN, 
regardless of the number of places of business for which a claim is 
filed under this part.

(26 U.S.C. 6109)

Subpart D--[Removed and Reserved]

0
6. Subpart D is removed and reserved.

0
7. Section 17.101 is revised to read as follows:


Sec.  17.101   Bonds in general.

    (a) Requirement. A bond must be filed by each person claiming 
drawback on a monthly basis. Persons who claim drawback on a quarterly 
basis are not required to file bonds. The bond requirement of this part 
may be satisfied either by a bond obtained from an authorized surety 
company or by deposit of collateral security.
    (b) Bond form. The bond must be prepared and executed on TTB Form 
5154.3, Bond for Drawback Under 26 U.S.C. 5111, in accordance with the 
provisions of this part and the instructions printed on the form.
    (c) Bonds executed before July 1, 2008. On and after July 1, 2008, 
a reference to 26 U.S.C. 5131-5134 in a bond executed on TTB Form 
5154.3, Bond for Drawback Under 26 U.S.C. 5131, shall be understood to 
refer to the sections redesignated as 26 U.S.C. 5111-5114 by section 
11125 of Public Law 109-59.
    (d) Approval. The appropriate TTB officer is authorized to approve 
all bonds and consents of surety required by this part.


Sec.  17.134   [Amended]

0
8. In Sec.  17.134, the first sentence is amended by removing the 
reference ``26 U.S.C. 5131'' and adding, in its place, the reference 
``26 U.S.C. 5111''.


Sec.  17.141   [Amended]

0
9. Section 17.141 is amended:
0
a. In the second sentence, by removing the reference ``26 U.S.C. 5134'' 
and adding, in its place, the reference ``26 U.S.C. 5114''; and
0
b. By removing the last sentence.


Sec.  17.146   [Amended]

0
10. In Sec.  17.146, the introductory text is amended by removing the 
words ``set forth'' and adding, in their place, the word ``show'', and 
paragraph (a) is removed and reserved.


Sec.  17.148   [Amended]

0
11. Section 17.148 is amended:
0
a. In paragraph (a), by removing the reference ``26 U.S.C. 5131-5134'' 
and adding, in its place, the reference ``26 U.S.C. 5111-5114'';
0
b. In the first sentence of paragraph (b), by removing the citation 
``26 U.S.C. 5131-5134'' and adding in its place the citation ``26 U.S.C 
5111-5114''; and
0
c. At the end of the section, by removing the informational reference 
``(Sec. 452, Pub. L. 98-369, 98 Stat. 819 (26 U.S.C.5134(c))'' and 
adding, in its place, the informational reference ``(26 U.S.C. 
5114(c))''.

0
12. Section 17.161 is amended by revising the last sentence to read as 
follows:


Sec.  17.161   General.

    * * * The records shall be kept complete and current at all times 
and shall be retained by the manufacturer at the place where the 
taxpaid distilled spirits are used in the manufacture or production of 
nonbeverage products, for the period prescribed in Sec.  17.170.

0
13. In Sec.  17.168, the last sentence of paragraph (a) is revised to 
read as follows:


Sec.  17.168  Recovered spirits.

    (a) * * * Recovery operations may only be conducted on the premises 
where the recovered spirits were used in the manufacture or production 
of nonbeverage or intermediate products.
* * * * *

0
14. Section 17.171 is amended:
0
a. By revising the first sentence to read as set forth below.
0
b. At the end of the section, by removing the informational reference 
``(Sec. 5133, 68A Stat. 623 (26 U.S.C. 5133); sec. 201, Pub. L. 85-859, 
72 Stat. 1348 (26 U.S.C. 5146))'' and adding, in its place, the 
informational reference ``(26 U.S.C. 5113, 5123)''.


Sec.  17.171  Inspection of records.

    All of the records, forms, and documents required to be retained by 
Sec.  17.170 shall be kept at the premises where distilled spirits are 
used in the manufacture or production of nonbeverage products and shall 
be readily available during the manufacturer's regular business hours 
for examination and copying by the appropriate TTB officers. * * *


Sec.  17.181  [Amended]

0
15. In Sec.  17.181, the last sentence is amended by removing the 
reference ``26 U.S.C. 5134'' and adding, in its place, the reference 
``26 U.S.C. 5114''.

0
16. Section 17.182 is amended by revising the first sentence to read as 
follows:


Sec.  17.182  Drawback claims by druggists.

    Drawback of tax under 26 U.S.C. 5114 is allowable on taxpaid 
distilled spirits used by druggists in compounding prescriptions. * * *

0
17. Section 17.187 is amended by revising the second sentence to read 
as follows:

[[Page 37403]]

Sec.  17.187  Discontinuance of business.

    * * * Upon discontinuance of business, a manufacturer's entire 
stock of taxpaid distilled spirits on hand may be sold in a single sale 
without the necessity of qualifying as a wholesaler under part 1 of 
this chapter or registering and keeping records as a liquor dealer 
under part 31 of this chapter. * * *

PART 19--DISTILLED SPIRITS PLANTS

0
18. The authority citation for part 19 is revised to read as follows:

    Authority:  19 U.S.C. 81c, 1311; 26 U.S.C. 5001, 5002, 5004-
5006, 5008, 5010, 5041, 5061, 5062, 5066, 5101, 5121, 5122-5124, 
5171-5173, 5175, 5176, 5178-5181, 5201-5204, 5206, 5207, 5211-5215, 
5221-5223, 5231, 5232, 5235, 5236, 5241-5243, 5271, 5273, 5301, 
5311-5313, 5362, 5370, 5373, 5501-5505, 5551-5555, 5559, 5561, 5562, 
5601, 5612, 5682, 6001, 6065, 6109, 6302, 6311, 6676, 6806, 7510, 
7805; 31 U.S.C. 9301, 9303, 9304, 9306.


Sec.  19.11  [Amended]

0
19. Section 19.11 is amended:
0
a. In the definition of ``Alcoholic flavoring materials'', by removing 
the reference ``26 U.S.C. 5131-5134'' and adding, in its place, the 
reference ``26 U.S.C. 5111-5114''.
0
b. In the definition of ``Eligible flavor'', by removing from paragraph 
(1) the reference ``26 U.S.C. 5134'' and adding, in its place, the 
reference ``26 U.S.C. 5114''.

0
20. Subpart Ca is revised to read as follows:
Subpart Ca--Dealer Registration and Recordkeeping
Sec.
19.49 Definitions.
19.50 Dealer registration.
19.51 Amending the dealer registration.
19.52 Dealer records.

Subpart Ca--Dealer Registration and Recordkeeping


Sec.  19.49  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.

(26 U.S.C. 5121, 5122)


Sec.  19.50  Dealer registration.

    Every proprietor who sells or offers for sale any alcoholic product 
(distilled spirits, wines, or beer) fit for beverage use must register 
as a dealer under part 31 of this chapter. However, the proprietor's 
application for registration of a distilled spirits plant filed under 
subpart G of this part, and approval of that application by the 
appropriate TTB officer, will constitute the proprietor's registration 
as a dealer at the distilled spirits plant. Every proprietor registered 
as a dealer under this subpart will be classified as a wholesale dealer 
in liquors (see Sec.  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, beer, or other proprietors' spirits. A proprietor who conducts 
business as a dealer at a location other than the distilled spirits 
plant must register and keep records in accordance with part 31 of this 
chapter.

(26 U.S.C. 5124)


Sec.  19.51  Amending the dealer registration.

    Every proprietor registered as a dealer under this subpart must 
maintain a current and accurate distilled spirits plant registration. 
Whenever there is a change to any of the information provided in the 
proprietor's approved notice of registration, the proprietor must amend 
the registration within the time period specified in subpart G of this 
part. An amendment of the proprietor's distilled spirits plant 
registration will also serve as an amendment of the proprietor's dealer 
registration under this subpart. The proprietor's dealer registration 
will also terminate when distilled spirits plant operations under the 
notice of registration terminate.

(26 U.S.C. 5124)


Sec.  19.52  Dealer records.

    Every dealer is required to maintain records of transactions. 
Distilled spirits transactions that appear in the records required by 
subpart W of this part will meet the proprietor's recordkeeping 
requirements as a dealer. For other transactions not covered in the 
distilled spirits plant records, such as retail sales of wine or beer 
in a restaurant at the distilled spirits plant, or operations as a 
wholesale dealer in wine or beer, the proprietor must keep the records 
specified for dealers in part 31 of this chapter.

(26 U.S.C. 5121, 5122)


Sec.  19.63  [Amended]

0
21. In Sec.  19.63, the last sentence is amended by removing the words 
``, including special (occupational) tax,''.


Sec.  19.65  [Amended]

0
22. Section 19.65 is amended by removing the last sentence.


Sec.  19.67  [Amended]

0
23. Section 19.67 is amended:
0
a. In paragraph (a)(1), by removing the words ``and pay special 
(occupational) tax''; and
0
b. In paragraph (a)(2), by removing the words ``(except the payment of 
special (occupational) tax)''.


Sec.  19.71  [Amended]

0
24. In Sec.  19.71, paragraph (a) is amended by removing the last 
sentence.


Sec.  19.374  [Amended]

0
25. In Sec.  19.374, the second sentence is amended by removing the 
reference ``26 U.S.C. 5131-5134'' and adding, in its place, the 
reference ``26 U.S.C. 5111-5114''.

0
26. Section 19.906 is revised to read as follows:


Sec.  19.906  Dealer registration and recordkeeping.

    An alcohol fuel plant that sells spirits that have not been 
rendered unfit for beverage use is subject to the requirements of 
subpart Ca of this part, except that the references in Sec. Sec.  19.50 
and 19.51 to ``subpart G'' should be taken to refer to Sec. Sec.  
19.910 through 19.950, and the reference in Sec.  19.51 to ``subpart 
W'' should be taken to refer to Sec. Sec.  19.980 through 19.988.

PART 20--DISTRIBUTION AND USE OF DENATURED ALCOHOL AND RUM

0
27. The authority citation for part 20 continues to read as follows:

    Authority:  26 U.S.C. 5001, 5206, 5214, 5271-5275, 5311, 5552, 
5555, 5607, 6065, 7805.

Subpart Ca--[Removed and Reserved]

0
28. Subpart Ca is removed and reserved.


Sec.  20.241  [Amended]

0
29. Section 20.241 is amended by removing the last sentence.

PART 22--DISTRIBUTION AND USE OF TAX-FREE ALCOHOL

0
30. The authority citation for part 22 is revised to read as follows:

    Authority:  26 U.S.C. 5001, 5121, 5123, 5206, 5214, 5271-5275, 
5311, 5552, 5555,

[[Page 37404]]

6056, 6061, 6065, 6109, 6151, 6806, 7805; 31 U.S.C. 9304, 9306.

Subpart Ca--[Removed and Reserved]

0
31. Subpart Ca is removed and reserved.

0
32. In Sec.  22.102, the last sentence of paragraph (d) is revised to 
read as follows:


Sec.  22.102  Prohibited uses.

* * * * *
    (d) * * * Any permittee who sells tax-free alcohol becomes subject 
to the provisions of part 31 of this chapter.


Sec.  22.171  [Amended]

0
33. In Sec.  22.171, the last sentence of paragraph (a) is removed.

PART 24--WINE

0
34. The authority citation for part 24 is revised to read as follows:

    Authority:  5 U.S.C. 552(a); 26 U.S.C. 5001, 5008, 5041, 5042, 
5044, 5061, 5062, 5121, 5122-5124, 5173, 5206, 5214, 5215, 5351, 
5353, 5354, 5356, 5357, 5361, 5362, 5364-5373, 5381-5388, 5391, 
5392, 5511, 5551, 5552, 5661, 5662, 5684, 6065, 6091, 6109, 6301, 
6302, 6311, 6651, 6676, 7302, 7342, 7502, 7503, 7606, 7805, 7851; 31 
U.S.C. 9301, 9303, 9304, 9306.

0
35. The undesignated center heading directly above Sec.  24.50 is 
revised to read, ``DEALER REGISTRATION AND RECORDKEEPING''.


Sec.  24.50  [Removed and reserved]

0
36. Section 24.50 is removed and reserved.
0
37. Sections 24.51 through 24.54 are revised to read as follows:


Sec.  24.51  Definitions.

    For purposes of Sec. Sec.  24.52 through 24.54 of this part, 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.

(26 U.S.C. 5121, 5122)


Sec.  24.52  Dealer registration.

    Every proprietor 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 
proprietor's application to establish and operate a bonded wine 
premises or taxpaid wine bottling house filed under subpart D of this 
part, and approval of that application by the appropriate TTB officer, 
will constitute the proprietor's registration as a dealer at the 
approved bonded or taxpaid wine premises. Every proprietor registered 
as a dealer under this section will be classified as a wholesale dealer 
in liquors (see Sec.  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 spirits, beer, or other proprietors' wine. As provided in Sec.  
31.52 of this chapter, the proprietor is subject to no additional 
registration for making sales of wine or beer at the customer's place 
of business. Otherwise, a proprietor who conducts business as a dealer 
at a location other than the bonded wine premises or taxpaid wine 
bottling house must register and keep records in accordance with part 
31 of this chapter.

(26 U.S.C. 5124)


Sec.  24.53  Amending the dealer registration.

    Every proprietor registered as a dealer under Sec.  24.52 must 
maintain a current and accurate application file under subpart D of 
this part. Whenever there is a change to any of the information 
provided in the proprietor's approved application, the proprietor must 
amend the application within the time period specified in subpart D of 
this part. An amendment of the proprietor's wine premises approved 
application will also amend the proprietor's dealer registration under 
Sec.  24.52. The proprietor's dealer registration will also terminate 
when wine operations authorized under this part terminate.

(26 U.S.C. 5124)


Sec.  24.54  Dealer records.

    Every dealer is required to maintain records of transactions. Wine 
transactions that appear in the records required by subpart O of this 
part will meet the proprietor's recordkeeping requirements as a dealer. 
For other transactions not covered in the wine premises records, such 
as retail sales of distilled spirits or beer in a restaurant at the 
wine premises, or operations as a wholesale dealer in distilled spirits 
or beer, the proprietor must keep the records specified for dealers in 
part 31 of this chapter.

(26 U.S.C. 5121, 5122, 5123)


Sec.  24.55  [Removed]

0
38. Section 24.55 is removed.


Sec.  24.146  [Amended]

0
39. In Sec.  24.146, paragraph (a) is amended by removing the second 
sentence.

PART 25--BEER

0
40. The authority citation for part 25 is revised to read as follows:

    Authority:  19 U.S.C. 81c; 26 U.S.C. 5002, 5051-5054, 5056, 
5061, 5121, 5122-5124, 5222, 5401-5403, 5411-5417, 5551, 5552, 5555, 
5556, 5671, 5673, 5684, 6011, 6061, 6065, 6091, 6109, 6151, 6301, 
6302, 6311, 6313, 6402, 6651, 6656, 6676, 6806, 7342, 7606, 7805; 31 
U.S.C. 9301, 9303-9308.


Sec.  25.24  [Amended]

0
41. Section 25.24 is amended:
0
a. In paragraph (a)(5) by adding the word ``and'' at the end of the 
paragraph after the semicolon;
0
b. By removing paragraph (a)(6); and
0
c. By redesignating paragraph (a)(7) as paragraph (a)(6).

0
42. Subpart I is revised to read as follows:
Subpart I--Dealer Registration and Recordkeeping
Sec.
25.111 Definitions.
25.112 Dealer registration.
25.113 Amending the dealer registration.
25.114 Dealer records.

Subpart I--Dealer Registration and Recordkeeping


Sec.  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.

(26 U.S.C. 5121, 5122)


Sec.  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

[[Page 37405]]

in liquors (see Sec.  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 Sec.  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.

(26 U.S.C. 5124)


Sec.  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.

(26 U.S.C. 5124)


Sec.  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.

(26 U.S.C. 5121, 5122)


Sec.  25.168   [Amended]

0
43. In Sec.  25.168, the last sentence is amended by removing the 
reference ``Sec. Sec.  25.122 and 25.123'' and adding, in its place, 
the reference ``Sec.  25.169''.

0
44. New Sec.  25.169 is added to read as follows:


Sec.  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 
http://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.

(26 U.S.C. 6109)


Sec.  25.275   [Removed]

0
45. Section 25.275 is removed and reserved.

PART 26--LIQUORS AND ARTICLES FROM PUERTO RICO AND THE VIRGIN 
ISLANDS

0
46. The authority citation for part 26 is revised to read as follows:

    Authority:  19 U.S.C. 81c; 26 U.S.C. 5001, 5007, 5008, 5010, 
5041, 5051, 5061, 5111-5114, 5121, 5122-5124, 5131-5132, 5207, 5232, 
5271, 5275, 5301, 5314, 5555, 6001, 6301, 6302, 6804, 7101, 7102, 
7651, 7652, 7805; 27 U.S.C. 203, 205; 31 U.S.C. 9301, 9303, 9304, 
9306.


Sec.  26.11   [Amended]

0
47. In Sec.  26.11, the definition of ``Eligible flavor'' is amended by 
removing from paragraph (1) the reference ``26 U.S.C. 5134'' and 
adding, in its place, the reference ``26 U.S.C. 5114''.

0
48. Section 26.36 is amended:
0
a. In paragraph (b), by revising the first sentence;
0
b. In paragraph (c), by revising the first sentence; and
0
c. In paragraph (d)(2)(i), by removing the words ``, and pays special 
(occupational) tax,''.
    The revisions read as follows:


Sec.  26.36   Products exempt from tax.

* * * * *
    (b) Industrial spirits. A distiller of industrial spirits who 
registers and files a bond as a distilled spirits plant in accordance 
with part 19 of this chapter may ship industrial spirits to a tax-free 
alcohol user in the United States who holds a permit issued under part 
22 of this chapter. * * *
    (c) Denatured spirits. A distiller who registers and files a bond 
as a distilled spirits plant in accordance with part 19 of this chapter 
and who denatures spirits in accordance with parts 19 and 21 of this 
chapter may ship completely denatured alcohol to anyone in the United 
States, and may ship specially denatured spirits to a dealer or user of 
specially denatured spirits in the United States or Puerto Rico who 
holds a permit issued under part 20 of this chapter.
    * * *
* * * * *

0
49. The undesignated center heading before Sec.  26.44 is revised to 
read as follows: ``DEALER REGISTRATION AND RECORDKEEPING''.

0
50. Sections 26.44 and 26.45 are revised to read as follows:


Sec.  26.44   Liquor dealer registration and recordkeeping.

    Every person bringing liquors into the United States from Puerto 
Rico who sells, or offers for sale, such liquors must register and keep 
records as a wholesale dealer in liquor or as a retail dealer in liquor 
in accordance with part 31 of this chapter.

(26 U.S.C. 5121, 5122, 5123, 5124.)


Sec.  26.45   Warehouse receipts covering distilled spirits.

    The sale of warehouse receipts for distilled spirits is equivalent 
to the sale of distilled spirits. Accordingly, every person bringing 
distilled spirits into the United States from Puerto Rico who sells, or 
offers for sale, warehouse receipts for distilled spirits stored in 
warehouses, or elsewhere, must register and keep records as a dealer in 
liquors at the place where the warehouse receipts are sold, or offered 
for sale, in accordance with part 31 of this chapter.

(26 U.S.C. 5121, 5122, 5123, 5124)


Sec. Sec.  26.46 and 26.47   [Removed and reserved]

0
51. Sections 26.46 and 26.47 are removed and reserved.

0
52. Section 26.171 is revised to read as follows:


Sec.  26.171   Claimant registration.

    Any person filing claim for drawback of tax on eligible articles 
brought into the United States from Puerto Rico must register annually 
as a nonbeverage domestic drawback claimant. Registration will be 
accomplished when the claimant submits the first drawback claim for 
each year, along with the required supporting data for the claim, under 
subpart G of part 17 of this chapter. For purposes of registration, 
subpart C part 17 of this chapter shall apply as if the use and tax 
determination occurred in the United States at the time the article was 
brought

[[Page 37406]]

into the United States, and each business location from which entry of 
eligible articles is caused or effected shall be treated as a place of 
manufacture.

0
53. Section 26.173 is amended:
0
a. In paragraph (a), by removing the second sentence and adding, in its 
place, two new sentences;
0
b. By removing and reserving paragraph (b)(1); and
0
c. By revising paragraph (c)(1).
    The addition and revisions read as follows:


Sec.  26.173   Claims for drawback.

    (a) * * * Upon finding that the claimant has satisfied the 
requirements of this subpart, the appropriate TTB officer will allow 
the drawback at $1 less than the rate applicable under 26 U.S.C. 
7652(f). Claims for products manufactured in Puerto Rico must be filed 
separately from claims filed under part 17 of this chapter for products 
manufactured in the United States.
* * * * *
    (c) * * *
    (1) The claimant's employer identification number, as required by 
Sec. Sec.  17.31 and 17.32 of this chapter; and
* * * * *

0
54. The undesignated center heading before Sec.  26.210 is revised to 
read as follows: ``DEALER REGISTRATION AND RECORDKEEPING''.

0
55. Sections 26.210 and 26.211 are revised to read as follows:


Sec.  26.210   Liquor dealer registration and recordkeeping.

    Every person bringing liquors into the United States from the 
Virgin Islands who sells, or offers for sale, such liquors must 
register and keep records as a wholesale dealer in liquor or as a 
retail dealer in liquor in accordance with part 31 of this chapter.

(26 U.S.C. 5121, 5122, 5123, 5124)


Sec.  26.211   Warehouse receipts covering distilled spirits.

    The sale of warehouse receipts for distilled spirits is equivalent 
to the sale of distilled spirits. Accordingly, every person bringing 
distilled spirits into the United States from the Virgin Islands who 
sells, or offers for sale, warehouse receipts for distilled spirits 
stored in warehouses, or elsewhere, must register and keep records as a 
dealer in liquors at the place where the warehouse receipts are sold, 
or offered for sale, in accordance with part 31 of this chapter.

(26 U.S.C. 5121, 5122, 5123, 5124)


0
56. Section 26.307 is revised to read as follows:


Sec.  26.307   Claimant registration.

    Any person filing claim for drawback of tax on eligible articles 
brought into the United States from the Virgin Islands must register 
annually as a nonbeverage domestic drawback claimant. Registration will 
be accomplished when the claimant submits the first drawback claim for 
each year, along with the required supporting data for the claim, under 
subpart G of part 17 of this chapter. For purposes of registration, 
subpart C of part 17 of this chapter shall apply as if the use and tax 
determination occurred in the United States at the time the article was 
brought into the United States, and each business location from which 
entry of eligible articles is caused or effected shall be treated as a 
place of manufacture.

0
57. Section 26.309 is amended:
0
a. In paragraph (a), by removing the second sentence and adding, in its 
place, two new sentences;
0
b. By removing and reserving paragraph (b)(1); and
0
c. By revising paragraph (c)(1).
    The addition and revisions read as follows:


Sec.  26.309   Claims for drawback.

    (a) * * * Upon finding that the claimant has satisfied the 
requirements of this subpart, the appropriate TTB officer will allow 
the drawback at $1 less than the rate applicable under 26 U.S.C. 
7652(f). Claims for products manufactured in the Virgin Islands must be 
filed separately from claims filed under part 17 of this chapter for 
products manufactured in the United States.
* * * * *
    (c) * * *
    (1) The claimant's employer identification number, as required by 
Sec. Sec.  17.31 and 17.32 of this chapter; and
* * * * *

PART 27--IMPORTATION OF DISTILLED SPIRITS, WINES, AND BEER

0
58. The authority citation for part 27 is revised to read as follows:

    Authority:  5 U.S.C. 552(a), 19 U.S.C. 81c, 1202; 26 U.S.C. 
5001, 5007, 5008, 5010, 5041, 5051, 5054, 5061, 5121, 5122-5124, 
5201, 5205, 5207, 5232, 5273, 5301, 5313, 5555, 6302, 7805.


Sec.  27.1   [Amended]

0
59. Section 27.1 is amended by removing the words ``special 
(occupational) and''.


Sec.  27.11   [Amended]

0
60. In Sec.  27.11, the definition of ``Eligible flavor'' is amended by 
removing from paragraph (1) the reference ``26 U.S.C. 5134'' and 
adding, in its place, the reference ``26 U.S.C. 5114''.

0
61. Revise subpart C to read as follows:

Subpart C--Dealer Registration and Recordkeeping


Sec.  27.30   Dealer registration and recordkeeping.

    Importers engaged in the business of selling, or offering for sale, 
distilled spirits, wines, or beer are subject to the provisions of part 
31 of this chapter relating to dealer registration and records. Part 31 
requires the filing of TTB Form 5630.5d with TTB, in accordance with 
the instructions on the form, before commencing business and on or 
before July 1 of each year thereafter if there have been any changes. 
The dealer must file an amended registration and give notice of 
termination in accordance with the rules of part 31.

(26 U.S.C. 5121, 5122, 5123, 5124)


Sec.  27.31   Warehouse receipts covering distilled spirits.

    The sale of warehouse receipts for distilled spirits is equivalent 
to the sale of distilled spirits. Accordingly, every person engaged in 
business as an importer of distilled spirits who sells, or offers for 
sale, warehouse receipts for distilled spirits stored in customs bonded 
warehouses, or elsewhere, must register and keep records as a dealer in 
liquors at the place where the warehouse receipts are sold or offered 
for sale, in accordance with part 31 of this chapter.

(26 U.S.C. 5121, 5122, 5123, 5124)

PART 28--EXPORTATION OF ALCOHOL

0
62. The authority citation for part 28 is revised to read as follows:

    Authority:  5 U.S.C. 552(a); 19 U.S.C. 81c, 1202; 26 U.S.C. 
5001, 5007, 5008, 5041, 5051, 5054, 5061, 5121, 5122, 5201, 5205, 
5207, 5232, 5273, 5301, 5313, 5555, 6302, 7805; 27 U.S.C. 203, 205; 
44 U.S.C. 3504(h).


0
63. Section 28.212 is revised to read as follows:


Sec.  28.212   Persons authorized.

    Persons who have qualified under this chapter as proprietors of 
distilled spirits plants, bonded wine cellars, or taxpaid wine bottling 
houses, and persons who are wholesale liquor dealers (as defined

[[Page 37407]]

in Sec.  31.32 of this chapter) and have registered as a wholesale 
liquor dealer in accordance with part 31 of this chapter, are 
authorized to remove wines under the provisions of this subpart.

(26 U.S.C. 5062)

0
64. Part 31 is revised to read as follows:

PART 31--ALCOHOL BEVERAGE DEALERS

Sec.
31.0 Scope.
Subpart A--General Provisions
31.1 Definitions.
31.2 Territorial extent.
31.3 Basic permit requirements.
31.4 Relation to State and municipal law.
Subpart B--Administrative Provisions
31.11 Forms prescribed.
31.12 Right of entry and examination.
31.13 Delegations of the Administrator.
31.14 Penalties.
31.15 Disclosure of information.
Subpart C--Activities Subject to This Part
31.21 Basis of regulation.
31.22 Selling or offering for sale.

Dealers Classified

31.31 Retail dealer in liquors.
31.32 Wholesale dealer in liquors.
31.33 Retail dealer in beer.
31.34 Wholesale dealer in beer.
31.35 Limited retail dealer; persons eligible.
31.36 Sales of 20 wine gallons (75.7 liters) or more.

Certain Organizations, Agencies, and Persons

31.41 Clubs or similar organizations.
31.42 Restaurants serving liquors with meals.
31.43 States, political subdivisions thereof, or the District of 
Columbia.
31.44 Sales of denatured spirits or articles.
31.45 Sales of alcoholic compounds, preparations, or mixtures 
containing distilled spirits, wines, or beer.
31.46 Sales by agencies and instrumentalities of the United States.
31.47 Warehouse receipts covering spirits.
31.48 Alcohol beverage producers, processors, and bonded 
warehousemen.
Subpart D--Exemptions and Exceptions

Persons Exempt From Registration and/or Recordkeeping

31.51 Wholesale dealers making retail sales.
31.52 Wholesale dealers in liquors consummating sales of wines or 
beer at premises of other dealers.
31.53 Wholesale dealers in beer consummating sales at premises of 
other dealers.
31.54 Hospitals.
31.55 Limited retail dealers.

Persons Who Are Not Dealers in Liquors or Beer

31.61 Single sale of liquors or warehouse receipts.
31.62 Persons making casual sales.
31.63 Agents, auctioneers, brokers, etc., acting on behalf of 
others.
31.64 Apothecaries or druggists selling medicines and tinctures.
31.65 Persons selling products unfit for beverage use.
31.66 Retail dealer selling entire stock in liquidation.
31.67 Persons returning liquors for credit, refund, or exchange.
Subpart E--Places Subject to Registration
31.71 Registration required for each place of business.
31.72 Place of sale.
31.73 Place of offering for sale.
31.74 Places of storage; deliveries therefrom.
31.75 Dealer in beer and dealer in liquors at the same location.

Sales in Two or More Areas on the Same Premises

31.81 General.
31.82 Hotels.
31.83 Ball park, race track, etc.; sales throughout the premises.

Sales in Multiple Locations

31.91 Passenger trains, aircraft, and vessels.
31.92 Carriers not engaged in passenger service.
31.93 Supply boats or vessels.
31.94 Retail dealers ``At Large.''
31.95 Caterers.
31.96 Peddling.
Subpart F--Partnerships
31.101 Registration of partners.
31.102 Addition of partners or incorporation of partnership.
31.103 Formation of a partnership by two dealers.
31.104 Withdrawal of one or more partners.
Subpart G--Registration Form, TTB F 5630.5d
31.111 Date registration form is due.
31.112 Registration of multiple locations.
31.113 Place for filing registration form.
31.114 Completion of registration form.
31.115 Employer identification number.
31.116 Execution of registration form.
Subpart H--Changes in Registration Information

Changes Requiring Registration as a New Business

31.121 Sale of business.
31.122 Incorporation of business.
31.123 New corporation.
31.124 Stockholder continuing business of corporation.
31.125 Cross references.

Other Changes

31.131 Change of address.
31.132 Change in name or style of business.
31.133 Change in management.
31.134 Increase in capital stock of a corporation.
31.135 Change in ownership of capital stock.
31.136 Change in membership of unincorporated club.
31.137 Withdrawal of partner(s).
31.138 Discontinuance of business.
Subpart I--Restrictions Relating to Purchases of Distilled Spirits
31.141 Unlawful purchases of distilled spirits.
Subpart J--Records and Reports

Wholesale Dealers' Records and Reports

31.151 General requirements as to distilled spirits.
31.152 Requirements as to wines and beer.
31.153 Records to be kept by States, political subdivisions of 
States, or the District of Columbia.
31.154 Records to be kept by alcohol beverage producers, processors, 
and bonded warehousemen.
31.155 Records of receipt.
31.156 Records of disposition.
31.157 Canceled or corrected records.
31.158 Previously prescribed or approved records of receipt and 
disposition.
31.159 Variations in format or preparation of records.
31.160 Monthly summary report.
31.161 Conversion between metric and U.S. units.
31.162 Discontinuance of business.
31.163 Requirements when a wholesale dealer in liquors maintains a 
retail department.

Filing of Wholesale Dealer's Records and Reports

31.171 Method of filing.
31.172 Place of filing.

Retail Dealer's Records

31.181 Requirements for retail dealers.

Retention of Records and Files

31.191 Period of retention.
31.192 Photographic copies of records.
Subpart K--Reuse and Possession of Used Liquor Bottles
31.201 Refilling of liquor bottles.
31.202 Possession of refilled liquor bottles.
31.203 Possession of used liquor bottles.
31.204 Mixed cocktails.
Subpart L--Packaging of Alcohol for Industrial Uses
31.211 Requirements and procedure.
31.212 Labeling.
Subpart M--Distilled Spirits for Export With Benefit of Drawback
31.221 General.
31.223 Records and reports.
Subpart N--Miscellaneous
31.231 Destruction of marks and brands on wine containers.
31.232 Wine bottling.
31.233 Mixing cocktails in advance of sale.
31.234 Liability for special (occupational) tax.


[[Page 37408]]


    Authority:  26 U.S.C. 5001, 5002, 5121, 5122-5124, 5131, 5132, 
5206, 5207, 5273, 5301, 5352, 5555, 5603, 5613, 5681, 5687, 6061, 
6065, 6071, 6091, 6103, 6109, 6723, 6724, 7805.


Sec.  31.0  Scope.

    This part contains the requirements relating to the registration of 
wholesale and retail dealers in liquors and in beer and to the 
operations of such dealers, including recordkeeping requirements, 
prescribed under title 26 of the United States Code. This part also 
contains provisions relating to entry of dealers' premises and 
inspection of their records by TTB officers.

Subpart A--General Provisions


Sec.  31.1  Definitions.

    As used in this part, the following terms shall have the meanings 
indicated unless either the context in which they are used requires a 
different meaning, or a different definition is prescribed for a 
particular subpart, section, or portion of this part:
    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 
1135.31, Delegation of the Administrator's Authorities in 27 CFR Part 
31, Alcohol Beverage Dealers.
    Beer. Beer, ale, porter, stout, and other similar fermented 
beverages (including sake or similar products) of any name or 
description containing one-half of 1 percent or more of alcohol by 
volume, brewed or produced from malt, wholly or in part, or from any 
substitute therefor.
    Beverage use or use for beverage purposes. Use as an alcohol 
beverage.
    Bonded wine cellar. An establishment qualified under this chapter 
for the production, blending, cellar treatment, storage, bottling, and 
packaging or repackaging of untaxpaid wine.
    Brewery. An establishment qualified under this chapter for the 
production of beer.
    CFR. The Code of Federal Regulations.
    Dealer. Any person who sells, or offers for sale, any distilled 
spirits, wines, or beer.
    Denatured spirits or denatured alcohol. Spirits to which 
denaturants have been added as prescribed under this chapter.
    Distilled spirits or spirits. That substance known as ethyl 
alcohol, ethanol, or spirits of wine in any form, including all 
dilutions and mixtures thereof, from whatever source or by whatever 
process produced.
    Distilled spirits plant. An establishment qualified under part 19 
of this chapter for the production, storage, or processing of distilled 
spirits.
    Gallon or wine gallon. A United States gallon of liquid measure 
equivalent to the volume of 231 cubic inches.
    Liquor bottle. A bottle made of glass or earthenware, or of other 
suitable material approved by the Food and Drug Administration, which 
has been designed or is intended for use as a container for distilled 
spirits for sale for beverage purposes and which has been determined by 
the appropriate TTB officer to adequately protect the revenue.
    Liquors. Distilled spirits, wines, or beer.
    Liter. A metric unit of capacity equal to 1,000 cubic centimeters 
of alcoholic beverage, and equivalent to 33.814 fluid ounces.
    Person. An individual, trust, estate, partnership, association or 
other unincorporated organization, fiduciary, company, or corporation, 
the District of Columbia, or a State or a political subdivision thereof 
(including a city, county, or other municipality).
    Place or place of business. The entire office, plant, or area of 
the business in any one location under the same proprietorship; and 
passageways, streets, highways, rail crossings, waterways, or 
partitions dividing the premises shall not be deemed a separation for 
the purposes of this part, if the various divisions are otherwise 
contiguous.
    Reclaim. To grind up a liquor bottle or container and use the 
ground up material to make products other than liquor bottles or 
containers.
    Recycle. To grind up a liquor bottle or container and use the 
ground up material to make new liquor bottles or containers.
    Sale at retail or retail sale. Sale of liquors to a person other 
than a dealer.
    Sale at wholesale or wholesale sale. Sale of liquors to a dealer.
    This chapter. Chapter I of title 27 of the Code of Federal 
Regulations.
    U.S.C. The United States Code.
    Wine. When used without qualification, the term includes every kind 
(class and type) of product produced on bonded wine premises from 
grapes, other fruit (including berries), or other suitable agricultural 
products and containing not more than 24 percent of alcohol by volume. 
The term includes all imitation, other than standard, or artificial 
wine and compounds sold as wine. A wine product containing less than 
one-half of one percent alcohol by volume is not taxable as wine when 
removed from the bonded wine premises.
(26 U.S.C. 5002, 5041, 5052, 7805)

Sec.  31.2  Territorial extent.

    The provisions of this part shall be applicable in the several 
States of the United States and the District of Columbia.


Sec.  31.3  Basic permit requirements.

    Every person, except an agency of a State or political subdivision 
thereof, who intends to engage in the business of purchasing distilled 
spirits, wines, or beer for sale to other dealers for nonindustrial 
use, or to engage in the business of importing distilled spirits, 
wines, or beer for nonindustrial use, is required under part 1 of this 
chapter to obtain a basic permit authorizing such person to engage in 
such business.


Sec.  31.4  Relation to State and municipal law.

    Compliance with the requirements of this part shall not be held to 
exempt any person from any penalty or punishment provided by the laws 
of any State for carrying on any trade or business within such State, 
or in any manner to authorize the commencement or continuance of such 
trade or business contrary to the laws of such State or in places 
prohibited by municipal law; nor shall such compliance be held to 
prohibit any State from placing a duty or tax on the same trade or 
business, for State or other purposes.

Subpart B--Administrative Provisions


Sec.  31.11  Forms prescribed.

    (a) The appropriate TTB officer is authorized to prescribe all 
forms required by this part. 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.
    (b) Forms prescribed by this part are available for printing 
through the TTB Web site (http://www.ttb.gov) or by mailing a request 
to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue 
Center, 550 Main Street, Suite 8002, Cincinnati, OH 45202.

(5 U.S.C. 552(a))


Sec.  31.12  Right of entry and examination.

    Any appropriate TTB officer may enter during business hours the 
premises (including places of storage) of any dealer for the purpose of 
inspecting

[[Page 37409]]

or examining any records or other documents required to be kept by such 
dealer under this part and any distilled spirits, wines, or beer kept 
or stored by such dealer on such premises.

(26 U.S.C. 5123)


Sec.  31.13  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 1135.31, Delegation of the Administrator's 
Authorities in 27 CFR Part 31, Alcohol Beverage Dealers. You may obtain 
a copy of this order by accessing the TTB Web site (http://www.ttb.gov) 
or by mailing a request to the Alcohol and Tobacco Tax and Trade 
Bureau, National Revenue Center, 550 Main Street, Room 1516, 
Cincinnati, OH 45202.


Sec.  31.14  Penalties.

    (a) Criminal penalties. Criminal penalties for failure to comply 
with the requirements of this part are imposed by 26 U.S.C. 5603 and 
5687. A failure to register as required by this part may result in a 
penalty under 26 U.S.C. 5603(b).
    (b) Administrative penalty. An administrative penalty for failure 
to supply the required identifying number (employer identification 
number) in a dealer's registration is imposed by 26 U.S.C. 6723. The 
penalty is $50 for each such failure, but not more than $100,000 for 
all such failures during a calendar year. A failure to submit a 
registration includes a failure to include the identifying number on 
the registration.
    (c) Reasonable cause. The administrative penalty described in 
paragraph (b) of this section is not imposed when it is shown that the 
failure was due to reasonable cause and not due to willful neglect. A 
dealer who believes that the circumstances that led to the failure were 
reasonable and who desires to have the penalty waived shall submit a 
written statement, under the penalty of perjury, affirmatively showing 
all of the circumstances alleged as reasonable causes for the failure. 
If the appropriate TTB officer determines that the failure was due to a 
reasonable cause and not to willful neglect, the penalty will not be 
assessed. If the dealer exercised ordinary business care and prudence 
but was nevertheless unable to comply with the requirement, then the 
failure was due to reasonable cause. Mere ignorance of the law will not 
be considered a reasonable cause.

(26 U.S.C. 5603, 5687, 6109, 6723, 6724)


Sec.  31.15  Disclosure of information.

    Alcohol dealer registration forms are ``information returns'' as 
that term is used in 26 U.S.C. 6103 and, as such, are not subject to 
disclosure except as provided in that law.
(26 U.S.C. 6103)

Subpart C--Activities Subject to This Part


Sec.  31.21  Basis of regulation.

    Persons engaging in or carrying on the business or occupation of 
selling or offering for sale alcoholic liquors fit for use as a 
beverage, or any alcoholic liquors sold for use as a beverage, are 
subject to the provisions of this part. The classes of liquor dealer 
business and the conditions under which the provisions of this part 
apply to them are specified in Sec. Sec.  31.31 through 31.34.


Sec.  31.22  Selling or offering for sale.

    Whether the activities of any person constitute engaging in the 
business of selling or offering for sale is to be determined by the 
facts in each case. Any manner of selling or offering for sale, even 
though to a restricted class of persons or without a view to profit, is 
within the scope of this part.

Dealers Classified


Sec.  31.31  Retail dealer in liquors.

    (a) General. Except as otherwise provided in paragraph (b) of this 
section, every person who sells or offers for sale distilled spirits, 
wines, or beer to any person other than a dealer is a retail dealer in 
liquors for purposes of this part. Every retail dealer in liquors must 
comply with the registration and other requirements of this part, 
unless the dealer is covered by an applicable exemption under subpart D 
of this part.
    (b) Persons not deemed to be retail dealers in liquors. The 
following persons are not retail dealers in liquors within the meaning 
of this part:
    (1) A retail dealer in beer as described in Sec.  31.33(a),
    (2) A limited retail dealer as described in Sec.  31.35, or
    (3) A person who sells or offers for sale distilled spirits, wines, 
or beer only as provided in Sec.  31.61 through Sec.  31.64 or Sec.  
31.65(a).

(26 U.S.C. 5122)


Sec.  31.32  Wholesale dealer in liquors.

    (a) General. Except as otherwise provided in paragraph (b) of this 
section, every person who sells or offers for sale distilled spirits, 
wines, or beer to another dealer is a wholesale dealer in liquors for 
purposes of this part. Every wholesale dealer in liquors must comply 
with the registration and other requirements of this part, unless the 
dealer is covered by an applicable exemption under subpart D of this 
part.
    (b) Persons not deemed to be wholesale dealers in liquors. The 
following persons are not wholesale dealers in liquors within the 
meaning of this part:
    (1) A wholesale dealer in beer as described in Sec.  31.34(a);
    (2) A person who sells or offers for sale distilled spirits, wines, 
or beer only as provided in Sec. Sec.  31.61 through 31.64, Sec.  
31.65(a), or Sec.  31.66; or
    (3) A person returning liquors for credit, refund, or exchange as 
provided in Sec.  31.67.

(26 U.S.C. 5121)


Sec.  31.33  Retail dealer in beer.

    (a) General. Except as otherwise provided in paragraph (b) of this 
section, every person who sells or offers for sale beer, but not 
distilled spirits or wines, to any person other than a dealer is a 
retail dealer in beer for purposes of this part. Every retail dealer in 
beer must comply with the registration and other requirements of this 
part, unless the dealer is covered by an applicable exemption under 
subpart D of this part.
    (b) Persons not deemed to be retail dealers in beer. The following 
persons are not retail dealers in beer within the meaning of this part:
    (1) A limited retail dealer as described in Sec.  31.35, or
    (2) A person who does not sell or offer for sale distilled spirits 
or wines and sells beer or offers beer for sale only as provided in 
Sec.  31.61 through Sec.  31.63 or Sec.  31.65(a).

(26 U.S.C. 5122)


Sec.  31.34  Wholesale dealer in beer.

    (a) General. Except as otherwise provided in paragraph (b) of this 
section, every person who sells or offers for sale beer, but not 
distilled spirits or wines, to another dealer is a wholesale dealer in 
beer for purposes of this part. Every wholesale dealer in beer must 
comply with the registration and other requirements of this part, 
unless the dealer is covered by an applicable exemption under subpart D 
of this part.
    (b) Persons not deemed to be wholesale dealers in beer. The 
following persons are not wholesale dealers in beer within the meaning 
of this part:
    (1) A person who does not sell or offer for sale distilled spirits 
or wines and sells beer or offers beer for sale only as provided in 
Sec. Sec.  31.61 through 31.63, Sec.  31.65(a), Sec.  31.66, or Sec.  
31.67; or
    (2) A person returning beer for credit, refund or exchange as 
provided in Sec.  31.56.


[[Page 37410]]


(26 U.S.C. 5121)


Sec.  31.35   Limited retail dealer; persons eligible.

    Any person selling distilled spirits, beer, or wine, or any 
combination thereof, to members, guests, or patrons of bona fide fairs, 
reunions, picnics, carnivals, or similar outings, and any fraternal, 
civic, church, labor, charitable, benevolent, or ex-servicemen's 
organization selling distilled spirits, beer, or wine, or any 
combination thereof, on the occasion of any kind of entertainment, 
dance, picnic, bazaar, or festival held by it, is a ``limited retail 
dealer'' if the person or organization is not otherwise engaged in 
business as a dealer.

(26 U.S.C. 5122)


Sec.  31.36   Sales of 20 wine gallons (75.7 liters) or more.

    Any person who sells or offers for sale distilled spirits, wines, 
or beer, in quantities of 20 wine gallons (75.7 liters) or more, to the 
same person at the same time, shall be presumed and held to be a 
wholesale dealer in liquors or a wholesale dealer in beer, as the case 
may be, unless the seller shows by satisfactory evidence that the sale, 
or offer for sale, was made to a person other than a dealer.

(26 U.S.C. 5121)

Certain Organizations, Agencies, and Persons


Sec.  31.41   Clubs or similar organizations.

    (a) Subject to paragraph (b) of this section, a club or similar 
organization is a dealer for purposes of this part if the club or 
organization:
    (1) Furnishes liquors to members under conditions constituting a 
sale (including the acceptance of orders therefor, furnishing the 
liquors ordered and collecting the price thereof); or
    (2) Conducts a bar for the sale of liquors on the occasion of an 
outing, picnic, or other entertainment, unless the club is a ``limited 
retail dealer'' described in Sec.  31.35. The registration of the 
proprietor of the premises where the bar is located will not relieve 
the club or organization from its own obligation to register; or
    (3) Purchases liquors for members without prior agreement 
concerning payment therefor and such organization subsequently recoups 
those costs.
    (b) Compliance with the registration and other requirements of this 
part is not required if money is collected in advance from members for 
the purchase of liquors, or if money is advanced for the purchase of 
liquors pursuant to an agreement with the members for reimbursement.

(26 U.S.C. 5122)


Sec.  31.42   Restaurants serving liquors with meals.

    Proprietors of restaurants and other persons who serve liquors with 
meals to paying customers, even if no separate or specific charge for 
the liquors is made, are dealers subject to the provisions of this 
part.

(26 U.S.C. 5122)


Sec.  31.43   States, political subdivisions of States, or the District 
of Columbia.

    A State, a political subdivision of a State, or the District of 
Columbia, that engages in the business of selling, or offering for 
sale, distilled spirits, wines, or beer is not exempt from the 
requirements of this part. However, no such governmental entity shall 
be required to register more than once as a retail dealer in liquors 
regardless of the number of locations at which the entity carries on 
business as a retail dealer in liquors. Any such governmental entity 
that has properly registered as a wholesale dealer at its principal 
office, and that has properly registered once as a retail dealer in 
liquors or beer, is not required to register again at its retail stores 
by reason of the sale of distilled spirits, wines, or beer at any of 
those locations to dealers qualified to do business as a dealer within 
the jurisdiction of that governmental entity.

(26 U.S.C. 5121)


Sec.  31.44   Sales of denatured spirits or articles.

    It is illegal to sell denatured spirits, or any article containing 
denatured spirits, for beverage purposes. Any person who sells 
denatured spirits, or any substance or preparation made with or 
containing denatured spirits, for use, or for sale for use, for 
beverage purposes, or who sells any such products under circumstances 
in which it might reasonably appear that it is the intention of the 
purchaser to procure the same for sale or use for beverage purposes, is 
subject to the registration and other requirements of this part.

(26 U.S.C. 5273)


Sec.  31.45   Sales of alcoholic compounds, preparations, or mixtures 
containing distilled spirits, wines, or beer.

    (a) General. Compliance with the provisions of this part is 
required with respect to the sale, or offering for sale, of alcoholic 
compounds, preparations, or mixtures containing distilled spirits, 
wines, or beer, unless those compounds, preparations, or mixtures are 
unfit for use for beverage purposes and are sold solely for use for 
nonbeverage purposes.
    (b) Products unfit for beverage use. Products described in Sec.  
19.58 of this chapter, for which manufacturers are exempt from 
qualification requirements, shall be deemed to be unfit for beverage 
purposes for the purposes of this part.


Sec.  31.46   Sales by agencies and instrumentalities of the United 
States.

    Unless specifically exempt by statute, any agency or 
instrumentality of the United States, including post exchanges, ship's 
stores, ship's service stores, and commissaries, or any canteen, club, 
mess, or similar organization operated under regulations of any such 
agency or instrumentality, that sells, or offers for sale, distilled 
spirits, wines, or beer must comply with the registration and other 
requirements of this part as a dealer in liquors or a dealer in beer, 
as the case may be.

(26 U.S.C. 5121, 5122)


Sec.  31.47   Warehouse receipts covering spirits.

    The sale of warehouse receipts for distilled spirits is equivalent 
to the sale of distilled spirits. Accordingly, every person who sells, 
or offers for sale, warehouse receipts for distilled spirits held or 
stored in a distilled spirits plant, customs bonded warehouse, or 
elsewhere, is required to register and keep records as a wholesale 
dealer in liquors, or as a retail dealer in liquors, as the case may 
be, at the place where those warehouse receipts are sold, or offered 
for sale, unless the person is exempt from those requirements under 
subpart D of this part.

(26 U.S.C. 5121, 5122)


Sec.  31.48   Alcohol beverage producers, processors, and bonded 
warehousemen.

    Brewers and proprietors of distilled spirits plants, bonded wine 
cellars, bonded wine warehouses, and taxpaid wine bottling houses who 
make sales, whether of their own alcohol beverage products or of such 
products produced by others, are not exempt from registration and 
recordkeeping as dealers under this part. However, the registration and 
recordkeeping requirements applicable to such persons are prescribed in 
parts 19 (Distilled Spirits Plants), 24 (Wine), and 25 (Beer) of this 
chapter.

Subpart D--Exemptions and Exceptions

Persons Exempt From Registration and/or Recordkeeping


Sec.  31.51   Wholesale dealers making retail sales.

    A wholesale dealer in liquors who sells, or offers for sale, 
distilled spirits,

[[Page 37411]]

wines, or beer, and a wholesale dealer in beer who sells, or offers for 
sale, only beer, whether to dealers or to persons other than dealers, 
at any place where the wholesale dealer in liquors or beer has 
appropriately registered under this part, is exempt from registration 
at that place as a retail dealer in liquors or in beer.


Sec.  31.52   Wholesale dealers in liquors consummating sales of wines 
or beer at premises of other dealers.

    (a) Sales of wines. Any wholesale dealer in liquors (including the 
proprietor of a bonded wine cellar) who has registered as a wholesale 
dealer in liquors for the place from which that dealer conducts selling 
operations may consummate sales of wines to other wholesale or retail 
dealers in liquors, or to limited retail dealers, at the purchasers' 
places of business without having to register again as a wholesale 
dealer on account of those sales.
    (b) Sales of beer. Any wholesale dealer in liquors who has already 
registered as such may also consummate sales of beer to wholesale or 
retail dealers in beer, to wholesale or retail dealers in liquors, or 
to limited retail dealers, at the purchasers' place of business without 
having to register again as a wholesale dealer on account of those 
sales.


Sec.  31.53   Wholesale dealers in beer consummating sales at premises 
of other dealers.

    Any dealer who has registered as a wholesale dealer in beer for the 
place from which that dealer conducts selling operations may consummate 
sales of beer (but not wines or distilled spirits) to other dealers at 
the purchasers' places of business without having to register again as 
a wholesale dealer on account of those sales.


Sec.  31.54   Hospitals.

    Hospitals and similar institutions furnishing liquors to patients 
are not required to register or keep records under this part, provided 
that no specific or additional charge is made for the liquors so 
furnished.


Sec.  31.55   Limited retail dealers.

    (a) Sales by limited retail dealers. Limited retail dealers, as 
described in Sec.  31.35, are not required to register or keep records 
under this part.
    (b) Sales to limited retail dealers. Retail dealers in liquors or 
beer who make sales at their registered places of business to limited 
retail dealers are not required under this part, solely by virtue of 
those sales, to register or keep records as wholesale dealers.

Persons Who Are Not Dealers in Liquors or Beer


Sec.  31.61   Single sale of liquors or warehouse receipts.

    A single sale of distilled spirits, wines, or beer, or a single 
sale of one or more warehouse receipts for distilled spirits, 
unattended by circumstances showing the person making the sale to be 
engaged in that activity as a business, does not subject the vendor to 
the registration and other requirements of this part.

(26 U.S.C. 5121, 5122)


Sec.  31.62   Persons making casual sales.

    Certain persons making casual sales of liquors are not dealers for 
purposes of this part and therefore are not required to register, keep 
records, or submit a report as required of dealers under this part. 
These persons are:
    (a) Administrators, executors, receivers, and other fiduciaries who 
receive liquors in their fiduciary capacities and sell them in one 
parcel or at public auction in parcels of not less than 20 wine gallons 
(75.7 liters);
    (b) Creditors who receive liquors as security for, or in payment 
of, debts and sell them in one parcel or at a public auction in parcels 
of not less than 20 wine gallons (75.7 liters);
    (c) Public officers or court officials who levy on liquors under 
order or process of any court or magistrate and sell them in one parcel 
or at public auction in parcels of not less than 20 wine gallons (75.7 
liters); and
    (d) A retiring partner, or representative of a deceased partner, 
who sells liquors to the incoming or remaining partner, or partners, of 
a partnership.


Sec.  31.63   Agents, auctioneers, brokers, etc., acting on behalf of 
others.

    Certain persons may sell liquors as agents or employees of others 
(principals), or may receive and transmit orders therefor to a dealer, 
without being considered a dealer on account of those activities. Those 
persons, who have no property rights in the liquors sold, may make 
collections for their principals and receive commissions for their 
services, or may guarantee the payment of accounts, without being 
required to register or keep records under this part. In all such 
cases, however, the principal is required to register and keep records, 
as provided in this part, at each place where sales are consummated, 
unless the principal is exempt from those requirements under the 
provisions of this subpart. The persons covered by this section are:
    (a) Auctioneers who merely sell liquors at auction on behalf of 
others;
    (b) Agents or brokers who solicit orders for liquors in the name of 
a principal, but who neither stock nor deliver the liquors for which 
orders are taken;
    (c) Employees who merely sell liquors on behalf of their employers; 
and
    (d) Retail dealers in liquors or retail dealers in beer who merely 
receive and transmit to a wholesale dealer orders for liquors or beer 
to be billed, charged, and shipped to customers by such wholesale 
dealers.


Sec.  31.64   Apothecaries or druggists selling medicines and 
tinctures.

    Apothecaries and druggists who use wines or spirituous liquors for 
compounding medicines and in making tinctures that are unfit for use 
for beverage purposes are not considered to be dealers by reason of the 
sale of those compounds or tinctures for nonbeverage purposes.

(26 U.S.C. 5002)


Sec.  31.65   Persons selling products unfit for beverage use.

    (a) Vendors not deemed to be dealers. No person selling or offering 
for sale for nonbeverage purposes products qualifying as unfit for use 
for beverage purposes under Sec.  19.58 of this chapter shall be 
deemed, solely by reason of such sales, to be a dealer.
    (b) Restrictions. Any person who sells or offers for sale any 
nonbeverage products for use, or for sale for use, for beverage 
purposes, or who sells any of such products under circumstances in 
which it might reasonably appear that it is the intention of the 
purchaser to procure the product for sale or use for beverage purposes, 
must register and keep records as required under this part as a 
wholesale dealer in liquors, retail dealer in liquors, wholesale dealer 
in beer, or retail dealer in beer, as appropriate.


Sec.  31.66   Retail dealer selling entire stock in liquidation.

    No retail dealer in liquors or retail dealer in beer shall be 
deemed to be a wholesale dealer in liquors or a wholesale dealer in 
beer by virtue of selling in liquidation that dealer's entire stock of 
liquors in one parcel, or in parcels, each of which embraces not less 
than the entire stock of distilled spirits, of wines, or of beer, which 
parcels may contain a combination of any or all such liquors, to any 
other dealer. A retail dealer making such sale or sales is not required 
to register or to keep records or submit reports of those sales.

[[Page 37412]]

Sec.  31.67   Persons returning liquors for credit, refund, or 
exchange.

    No retail dealer in liquors or retail dealer in beer, or other 
person, shall be deemed to be a wholesale dealer in liquors or a 
wholesale dealer in beer by virtue of a bona fide return of distilled 
spirits, wines, or beer to the dealer from whom the distilled spirits, 
wines, or beer were purchased (or to the successor of such vendor's 
business or line of merchandise) for credit, refund, or exchange; and 
the giving of such credit, refund or exchange shall not be deemed to be 
a purchase within the meaning of Sec.  31.141 of this part. Except in 
the case of wholesale dealers in liquors required to keep records of 
their transactions under Sec. Sec.  31.155 and 31.156, or retail 
dealers required to keep records under Sec.  31.171, persons returning 
liquors as provided in this section are not required to keep records or 
submit reports of such transactions.

(26 U.S.C. 5132)

Subpart E--Places Subject to Registration


Sec.  31.71   Registration required at each place of business.

    Except as otherwise provided in Sec.  31.43 and in subpart D of 
this part, registration is required under this part for each and every 
place where distilled spirits, wines, or beer are sold or offered for 
sale. No person may engage in any business for which registration is 
required until the place of business has been registered in accordance 
with this part.


Sec.  31.72   Place of sale.

    For purposes of this part, the place at which ownership of liquors 
is transferred, actually or constructively, is the place of sale.


Sec.  31.73   Place of offering for sale.

    Liquors are considered to be offered for sale at the place where 
they are kept for sale and where a sale could take place, and at any 
place where sales are in fact consummated. Liquors are not considered 
to be offered for sale by sending an agent out to take orders, or by 
establishing an office for the mere purpose of taking orders, so long 
as in each case the orders received are transmitted to the principal 
for acceptance at the place where that principal has registered under 
this part or where the principal is exempt from registration as 
provided in subpart D of this part.


Sec.  31.74  Places of storage; deliveries therefrom.

    Registration is not required under this part for warehouses and 
similar places that are used by dealers merely for the storage of 
liquors and that are not places where orders for liquors are accepted. 
When orders for liquors are received and duly accepted at a place that 
the dealer has registered under this part, the subsequent actual 
delivery of the liquors from a place of storage does not require 
registration at that place of storage. Except as otherwise provided in 
Sec. Sec.  31.52 and 31.53, a dealer who registered a given place, and 
who makes actual delivery of liquors from a warehouse at another place, 
must register for the place where ownership of the liquors is 
transferred if there was no prior constructive delivery by the 
acceptance of an order for the liquors at the place covered by the 
existing registration.


Sec.  31.75  Dealer in beer and dealer in liquors at the same location.

    Any person who registers as a wholesale dealer in beer or retail 
dealer in beer and who thereafter begins to sell distilled spirits or 
wine must also register as a wholesale dealer in liquors or retail 
dealer in liquors before commencing the sale, or offering for sale, of 
distilled spirits or wine.

(26 U.S.C. 5124)

Sales in Two or More Areas on the Same Premises


Sec.  31.81   General.

    When liquors are sold by a proprietor in two or more areas within 
the proprietor's place of business, only one registration is required 
under this part. When the proprietor leases to another person or 
persons the privilege of selling liquors in two or more areas within 
the proprietor's place of business, whether the privilege is exercised 
separately or simultaneously with the proprietor or another 
concessionaire, each lessee is required to register only once.


Sec.  31.82   Hotels.

    The proprietor of a hotel who conducts the sale of liquors 
throughout the hotel premises is only required to register under this 
part for one place. For example, different areas operated by the 
proprietor in the hotel, such as banquet rooms, meeting rooms, and 
guest rooms, collectively constitute a single place of business. When a 
concessionaire conducts the sale of liquors at two or more areas in a 
hotel, those areas are regarded as a single place of business, and the 
concessionaire is required to register only once.


Sec.  31.83   Ball park, race track, etc.; sales throughout the 
premises.

    The proprietor of a ball park, race track, stadium, pavilion, or 
other similar enclosure constituting one premises, who engages in the 
business of selling liquors throughout that enclosure, including sales 
from baskets or containers by employees on the proprietor's behalf, is 
required to register only once for the entire enclosure. Each 
concessionaire having the same privilege throughout the enclosure, 
whether the privilege is exercised separately or simultaneously with 
the proprietor or another concessionaire, is required to register only 
once for the entire enclosure.

Sales in Multiple Locations


Sec.  31.91   Passenger trains, aircraft, and vessels.

    Persons who carry on the business of a retail dealer in liquors or 
of a retail dealer in beer on trains, aircraft, boats, or other 
conveyances engaged in the business of carrying passengers may conduct 
that business throughout the passenger carrying train, aircraft, boat, 
or other vessel, after filing only one registration under this part. 
Such persons must specify on the registration form the number of 
passenger carriers for which registration is being completed.


Sec.  31.92   Carriers not engaged in passenger service.

    Except as otherwise provided in Sec.  31.93, the retailing of 
liquors on any train, aircraft, boat, or other conveyance that is not 
engaged in the business of carrying passengers is prohibited.


Sec.  31.93   Supply boats or vessels.

    Persons may carry on the business of a retail dealer in liquor or 
of a retail dealer in beer on supply boats or vessels operated by them 
when those persons operate from a fixed address in a port or harbor and 
supply exclusively boats or other vessels, or persons thereon, at that 
port or harbor. Such persons must specify, on an attachment to the 
registration form, the following: that the business will consist of 
supplying exclusively boats, vessels, or persons thereon; the name of 
the port or harbor at which the business is to be carried on; and the 
fixed address from which operations are to be conducted. When such 
sales are to be made from two or more supply boats or vessels, the 
dealer must also specify on the attachment the number of supply boats 
or vessels for which registration is being made. If the dealer operates 
from two or more fixed addresses, the dealer must prepare one 
registration form covering all of those

[[Page 37413]]

addresses and must include on the attachment to the registration form 
the number of supply boats or vessels operating from each address.


Sec.  31.94   Retail dealers ``At Large.''

    A retail dealer in liquors or a retail dealer in beer whose 
business requires the dealer to travel from place to place, such as a 
dealer who sells at carnivals or circuses, must register ``At Large'' 
covering the dealer's activities throughout the United States by filing 
only one registration. A dealer submitting such a registration must 
state on the registration form, or on an attachment thereto, the nature 
of the dealer's business and the reason the dealer requires 
registration ``At Large.''


Sec.  31.95   Caterers.

    (a) General. When a contract to furnish liquors is made by a 
caterer at a place of business for which the caterer has registered 
under this part, no additional registration is required by virtue of 
the serving of the liquors at a different location.
    (b) Additional registration. When the contract of a caterer 
provides for the sale of liquors by the drink at a place, or 
simultaneously at different places, other than the place of business 
for which the caterer has registered under this part, a separate 
registration is required for each such place if the caterer does not 
keep the records specified in paragraph (c) of this section.
    (c) Records. Caterers must maintain sufficient commercial records 
to identify all locations where activities subject to registration 
occur. These commercial records must indicate the names and addresses 
of locations where alcoholic beverages have been sold or offered for 
sale and the dates and times that those activities occurred. These 
commercial records must be available to an appropriate TTB officer upon 
request.

(26 U.S.C. 5121, 5122)


Sec.  31.96  Peddling.

    No person shall peddle distilled spirits, wines, or beer, except in 
the circumstances described in Sec. Sec.  31.52, 31.53, and 31.93. 
Persons peddling liquors to whom Sec. Sec.  31.52, 31.53, and 31.93 do 
not apply are required to register at each place where sales are 
consummated.

Subpart F--Partnerships


Sec.  31.101   Registration of partners.

    Any number of persons carrying on one business in partnership at 
any one place must register only once for that business.


Sec.  31.102   Addition of partners or incorporation of partnership.

    Where a number of persons who have filed a registration under this 
part as partners admit one or more new members to the partnership or 
form a corporation (a separate legal entity) to take over the business, 
the new partnership or corporation must register as a new dealer before 
commencing business.

(26 U.S.C. 5121, 5122, 5124)


Sec.  31.103   Formation of a partnership by two dealers.

    Where two persons form a partnership after each has registered for 
a business carried on by himself, the partnership must register as a 
new dealer to cover the business conducted by the partnership.

(26 U.S.C. 5121, 5122, 5124)


Sec.  31.104   Withdrawal of one or more partners.

    When one or more partners withdraw from a partnership that has 
registered under this part, the remaining partner, or partners, must 
register the change in control by filing an amended registration form 
on or before the following July 1.

Subpart G--Registration Form, TTB F 5630.5d


Sec.  31.111   Date registration form is due.

    (a) General. Dealers must register by filing the registration form, 
TTB Form 5630.5d, before engaging in business and on or before July 1 
of each year thereafter. However, as long as none of the information 
specified on the form has changed since the previous registration form 
was filed, no additional registration is required. If the registration 
form is received in the mail and the U.S. postmark on the cover shows 
that it was deposited in the mail in the United States within the time 
prescribed for filing in an envelope or other appropriate wrapper that 
was properly addressed with postage prepaid, the form will be 
considered as timely filed. If the postmark is not legible, the sender 
has the burden of proving the date when the postmark was made. When 
registered mail is used, the date of postal registration will be 
accepted as the postmark date.
    (b) Transition rule. Dealers already engaged in business prior to 
July 1, 2008, must register as an ``existing business'' unless they had 
registered, in accordance with regulations in effect at the time of 
registration, on or after January 1, 2007. This one-time registration 
is due on or before July 1, 2009.

(26 U.S.C. 6071)


Sec.  31.112   Registration of multiple locations.

    A dealer required to register at two or more locations shall file 
one registration form, prepared as provided in Sec.  31.114(c), to 
cover all such locations.


Sec.  31.113   Place for filing registration form.

    The registration form, TTB Form 5630.5d, must be filed with TTB in 
accordance with the instructions on the form.


Sec.  31.114   Completion of registration form.

    (a) General. Dealers must register by filing the registration form, 
TTB Form 5630.5d, Alcohol Dealer Registration. The registration form 
must be filed with TTB in accordance with this subpart and the 
instructions on the form.
    (b) Preparation of TTB Form 5630.5d. All of the information called 
for on TTB Form 5630.5d must be provided. This information includes the 
following:
    (1) The true name of the dealer.
    (2) The trade name(s) (if any) of the business(es) subject to the 
registration requirement.
    (3) The employer identification number (see Sec.  31.115).
    (4) The mailing address of the dealer's principal place of business 
(or principal office, in the case of a corporate dealer).
    (5) The exact location of each place of business, by name and 
number of building or street, or if these do not exist, by some 
specific description in addition to the post office address.
    (6) The business telephone number of each place of business.
    (7) The class(es) of dealer in which the dealer operates a 
business.
    (8) Ownership and control information. This consists of the name, 
position, and residence address of every owner of the business and of 
every person having power to control its management and policies with 
respect to the activity subject to registration. ``Owner of the 
business'' includes every partner, if the dealer is a partnership, and 
every person owning 10 percent or more of its stock, if the dealer is a 
corporation. However, the ownership and control information required by 
this paragraph need not be stated if the same information has been 
previously provided to TTB and that previously provided information is 
still current.
    (c) Multiple locations and/or classes of dealers. A dealer required 
to register at more than one location or for more than one class of 
dealers must--
    (1) File one registration form, TTB Form 5630.5d, to cover all 
locations and classes of dealers; and
    (2) Prepare, on the form, or on an attachment identified with the

[[Page 37414]]

taxpayer's name, mailing address (as shown on TTB Form 5630.5d), and 
employer identification number, a list showing, by States, the trade 
name, address, telephone number, and dealer class of each location for 
which registration is being made. The original of the list must be 
filed with TTB on or with the registration form, and a copy must be 
retained at the dealer's principal place of business (or principal 
office, in the case of a corporate dealer) for the period specified in 
Sec.  31.191.

(26 U.S.C. 7805)


Sec.  31.115   Employer identification number.

    (a) Requirement. The employer identification number (as defined in 
26 CFR 301.7701-12) of a dealer who has been assigned such a number 
must be shown on each registration form filed under this part. A dealer 
who does not have such a number must apply for one as provided in 
paragraph (b) of this section and enter ``number applied for'' in the 
space for the number on the registration form; then, upon receipt of 
the number from the Internal Revenue Service, the dealer must provide 
it to TTB by separate correspondence. Failure of a dealer to include 
the employer identification number may result in the imposition of the 
penalty specified in Sec.  31.14(b).
    (b) Application for employer identification number. Each dealer who 
files a registration form and who has not already been assigned an 
employer identification number must file Internal Revenue Service (IRS) 
Form SS-4 to apply for one. The dealer shall apply for and be assigned 
only one employer identification number, regardless of the number of 
places of business for which the dealer is required to file a 
registration form under this part. The employer identification number 
shall be applied for no later than 7 days after the filing of the 
taxpayer's first registration form. IRS Form SS-4 may be obtained from 
the director of an IRS service center, from any IRS district director, 
from http://www.irs.gov/, or from TTB's National Revenue Center.

(26 U.S.C. 6109)


Sec.  31.116   Execution of registration form.

    The registration of an individual proprietor shall be signed by the 
proprietor, the registration of a partnership shall be signed by a 
member of the firm, and the registration of a corporation shall be 
signed by a duly authorized officer thereof; however, any individual, 
partnership, or corporation that is a proprietor may appoint an agent 
to sign on the proprietor's behalf. The person signing the registration 
form must identify his or her signing capacity as ``individual owner,'' 
``member of firm,'' ``agent,'' or ``attorney-in-fact,'' as appropriate, 
or, in the case of a corporation, by the title of the signing officer. 
A receiver, trustee, assignee, executor, administrator, or other legal 
representative who continues the business of a dealer by reason of 
death, insolvency, or other circumstance must indicate the fiduciary 
capacity in which he or she acts. Registration forms signed by persons 
as agents or attorneys-in-fact will not be accepted unless, in each 
instance, the principal named on the form has executed a power of 
attorney authorizing that person to sign and that power of attorney is 
filed with the TTB officer with whom the TTB Form 5630.5d is required 
to be filed. Form 5630.5d must be verified by a written declaration 
that it has been executed under the penalties of perjury.

(26 U.S.C. 6061, 6065)

Subpart H--Changes in Registration Information

Changes Requiring Registration as a New Business


Sec.  31.121   Sale of business.

    Under this part, registration is personal to the one who registered 
and is not transferable from one dealer to another. Where a change 
occurs in the proprietorship of a business for which registration has 
been completed, the successor must register as a new business.

(26 U.S.C. 5124)


Sec.  31.122   Incorporation of business.

    Where an individual or a firm engaged in business requiring 
registration under this part forms a corporation to take over and 
conduct the business, the corporation, as a separate legal entity, must 
register in its own name as a new business.

(26 U.S.C. 5124)


Sec.  31.123   New corporation.

    Where a new corporation is formed to take over and conduct the 
business of one or more corporations that have registered under this 
part, the new corporation must register in its own name as a new 
business.

(26 U.S.C. 5124)


Sec.  31.124   Stockholder continuing business of corporation.

    A registration completed by a corporation as a dealer in liquors, 
or as a dealer in beer, cannot cover the same business carried on by 
one or more of its stockholders after dissolution of the corporation. 
The stockholder(s) must register as a new business.

(26 U.S.C. 5124)


Sec.  31.125  Cross references.

    See also Sec. Sec.  31.75, 31.102, and 31.103 for other situations 
requiring registration as a new dealer.

Other Changes


Sec.  31.131  Change of address.

    (a) General. A dealer who removes the business to a place other 
than that for which the dealer is registered must register the change 
with TTB by filing an amended registration form, TTB Form 5630.5d, on 
or before the next July 1 following the change.
    (b) Caterers. A caterer who sells liquor by the drink at locations 
other than his or her principal place of business shall not be required 
to provide the change of location registration prescribed in paragraph 
(a) of this section for those catering activities, provided that the 
caterer maintains the records required by Sec.  31.95(c). For a 
permanent change in location of the principal place of business, the 
caterer must file an amended registration form in accordance with 
paragraph (a) of this section.


Sec.  31.132  Change in name or style of business.

    A dealer who has registered for a business at a given location must 
complete an amended registration, and submit it on or before the next 
July 1, to report a change in the name or style (trade name) under 
which the dealer conducts that business.


Sec.  31.133  Change in management.

    A change in management that involves no change in ownership of the 
business requires an amended registration only if the change involves a 
person who is responsible for controlling the management policies or 
buying or selling practices of the business pertaining to alcohol 
beverages. The amended registration must be submitted on TTB Form 
5630.5d on or before the next July 1 following the change.

(26 U.S.C. 5124)


Sec.  31.134  Increase in capital stock of a corporation.

    An amended registration is not required by reason of an increase in 
the capital stock of a corporation so long as a new corporation is not 
created under the laws of the State of incorporation and provided that 
the change does not alter the list of stockholders owning 10 percent or 
more of the capital stock.

(26 U.S.C. 5121, 5122, 5124)

[[Page 37415]]

Sec.  31.135  Change in ownership of capital stock.

    Registration as a new business is not required merely by reason of 
the sale or transfer of all or a controlling interest in the capital 
stock of a corporation. However, an amended registration is required if 
the sale or transfer alters the list of stockholders owning 10 percent 
or more of the capital stock. The amended registration must be filed on 
or before the next July 1 following the sale or transfer.


Sec.  31.136  Change in membership of unincorporated club.

    Registration of an unincorporated club is not required by reason of 
changes in membership, when those changes do not result in the 
dissolution of the club and the formation of a new club, unless the 
changes involve a person with the power to control the management 
policies or buying or selling practices pertaining to alcohol. In the 
latter case, the filing of an amended registration is required on or 
before the next July 1.


Sec.  31.137  Withdrawal of partner(s).

    Withdrawal of partner(s) requires an amended registration. See 
Sec.  31.104.


Sec.  31.138  Discontinuance of business.

    A dealer going out of business must register that event within 30 
days by filing a registration form, TTB Form 5630.5d, in accordance 
with instructions on the form.

Subpart I--Restrictions Relating to Purchases of Distilled Spirits


Sec.  31.141  Unlawful purchases of distilled spirits.

    (a) General. It is unlawful for any dealer to purchase distilled 
spirits for resale from any person other than:
    (1) A wholesale dealer (including a State, a political subdivision 
of a State, the District of Columbia, and a distilled spirits plant) 
who is required to keep records under Sec. Sec.  31.151 through 31.163 
pertaining to the place where the distilled spirits are purchased;
    (2) A retail liquor store operated by a State, a political 
subdivision of a State, or the District of Columbia; or
    (3) A person not required to register as a wholesale liquor dealer, 
as provided in Sec. Sec.  31.62, 31.63, 31.66, and 31.67.
    (b) Special provision for limited retail dealers. A limited retail 
dealer may purchase distilled spirits from a retail dealer in liquors 
for resale.

(26 U.S.C. 5132)

Subpart J--Records and Reports

Wholesale Dealers' Records and Reports


Sec.  31.151  General requirements as to distilled spirits.

    Except as otherwise provided in Sec. Sec.  31.153 and 31.154, every 
wholesale dealer in liquors must keep daily records of the physical 
receipt and disposition of distilled spirits in accordance with 
Sec. Sec.  31.155 and 31.156. When required in writing by the 
appropriate TTB officer, a wholesale dealer in liquors must also 
prepare and file a monthly summary report totaling the daily receipts 
and disposition of distilled spirits in accordance with Sec.  31.160.

(26 U.S.C. 5121)


Sec.  31.152  Requirements as to wines and beer.

    Every wholesale dealer in liquors who receives wines, or wines and 
beer, and every wholesale dealer in beer must keep at the dealer's 
place of business a complete record showing the quantities of wine and 
beer received, from whom the wine and beer were received, and the dates 
of receipt. This record, which must be kept for a period of not less 
than three years as prescribed in Sec.  31.191, shall consist of all 
purchase invoices or bills covering wines and beer received or, at the 
option of the dealer, a book record containing all of the required 
information. Wholesale dealers are not required to prepare or submit 
reports to the appropriate TTB officer of transactions relating to 
wines and beer.

(Approved by the Office of Management and Budget under control 
number 1513-0065) (26 U.S.C. 5121)


Sec.  31.153  Records to be kept by States, political subdivisions of 
States, or the District of Columbia.

    The provisions of this subpart regarding the maintenance of records 
and the submission of reports shall not apply to States, political 
subdivisions of States, or the District of Columbia, or to any liquor 
stores operated by such entities that maintain, and make available for 
inspection by appropriate TTB officers, records that will enable TTB to 
verify receipts of wines and beer and to trace readily all distilled 
spirits received and disposed of by those entities. However, States, 
political subdivisions of States, and the District of Columbia, and 
liquor stores operated by such entities, must, on request of the 
appropriate TTB officer, furnish such transcripts, summaries, and 
copies of records with respect to distilled spirits as that TTB officer 
may require.

(26 U.S.C. 5121)


Sec.  31.154  Records to be kept by alcohol beverage producers, 
processors, and bonded warehousemen.

    Wholesale liquor dealer operations conducted by brewers and by 
proprietors of distilled spirits plants, bonded wine cellars, bonded 
wine warehouses, and taxpaid wine bottling houses must be recorded and 
reported in accordance with the applicable provisions of parts 19, 24, 
and 25 of this chapter. To the extent that the same transactions are 
required to be recorded or reported by this part and by part 19, 24, or 
25, the records and reports required by those parts will satisfy the 
requirements of this part.

(26 U.S.C. 5207, 5367, 5415)


Sec.  31.155  Records of receipt.

    (a) Information required. Every wholesale dealer in liquors must 
maintain a daily record of the physical receipt of each individual lot 
or shipment of distilled spirits. This record must show, at a minimum, 
the following:
    (1) Name and address of consignor;
    (2) Date of receipt, including date of inventory for recorded 
gains;
    (3) Brand name;
    (4) Name of producer or bottler. However, this may be omitted if 
the dealer keeps available for inspection a separate list or record 
identifying the producer or bottler with the brand name;
    (5) Kind of spirits. However, this may be omitted if the dealer 
keeps available for inspection a separate list or record identifying 
``kind'' with the brand name;
    (6) Quantity actually received, showing number of packages, if any, 
and number of cases by size of bottle, and explaining any difference 
from the quantity shown on the commercial papers covering the shipment; 
and
    (7) Package identification numbers of containers of alcohol 
received for repackaging for industrial use pursuant to subpart L of 
this part.
    (b) Form of record. The record required by paragraph (a) of this 
section must be a part of the accounting system and must consist of 
consignors' invoices (or, if those invoices are not available on the 
day the shipment is received, memorandum receiving records prepared on 
the day of receipt of the distilled spirits, including records of 
inventory for recorded gains) and credit memorandums covering distilled 
spirits returned to the dealer.

(Approved by the Office of Management and Budget under control 
number 1513-0065) (26 U.S.C. 5121)

[[Page 37416]]

Sec.  31.156  Records of disposition.

    (a) Information required. Every wholesale dealer in liquors must 
prepare a daily record of the physical disposition of each individual 
lot of distilled spirits. This record must show, at a minimum, the 
following:
    (1) Name and address of consignee;
    (2) Date of disposition, including date of discovery in the case of 
casualty, theft or recorded inventory losses;
    (3) Brand name;
    (4) Kind of spirits. However, this may be omitted if the dealer 
keeps available for inspection a separate list or record identifying 
``kind'' with the brand name;
    (5) Number of packages, if any, and number of cases by size of 
bottle; and
    (6) Package identification numbers of containers of alcohol 
repackaged for industrial use pursuant to subpart L of this part.
    (b) Form of record. The record required by paragraph (a) of this 
section must be part of the accounting system and must consist of 
wholesale dealer's invoices (or, if those invoices are not available at 
the time the spirits are removed, memorandum shipping records prepared 
at the time of removal of the distilled spirits, including date of 
discovery in the case of casualty, theft or recorded inventory losses).

(Approved by the Office of Management and Budget under control 
number 1513-0065) (26 U.S.C. 5121)


Sec.  31.157  Canceled or corrected records.

    Entries on the records of receipt and disposition prescribed by 
Sec. Sec.  31.155 and 31.156 must not be erased or obliterated. 
Correction or deletion of any entry must be accomplished by drawing a 
line through the entry and inserting an appropriate correction or 
explanation. If a wholesale dealer in liquors voids an invoice for any 
reason, the file copy prescribed in Sec.  31.181 must be marked 
``Cancelled'' and must be filed as provided in that section; any 
remaining copy of the voided invoice must be destroyed or similarly 
cancelled and filed. If a new invoice is prepared, its serial number 
must be cross referenced on any retained copies of the cancelled 
invoice.

(26 U.S.C. 5121)


Sec.  31.158  Previously prescribed or approved records of receipt and 
disposition.

    A wholesale dealer in liquors may continue to use records of 
receipt and disposition in a format previously prescribed or approved. 
Those records must show the information required by paragraph (a) of 
Sec.  31.155 or paragraph (a) of Sec.  31.156, as applicable. The 
records must be preprinted with the name and address of the wholesale 
dealer. Each sheet or page must bear a preprinted serial number, or 
page serial numbers may be affixed in unbroken sequence during the 
preparation or processing of the records. A serial number must not be 
duplicated within a period of 6 months.

(26 U.S.C. 5121)


Sec.  31.159  Variations in format or preparation of records.

    (a) Authorization. The appropriate TTB officer may approve 
variations in the type and format of records of receipt and disposition 
required under Sec. Sec.  31.155 and 31.156, or in the methods of 
preparing those records, when it is shown that variations from the 
requirements are necessary in order to use data processing equipment, 
other business machines, or existing accounting systems, and provided 
that the variation will not unduly hinder the effective administration 
of this part, jeopardize the revenue, or be contrary to any provision 
of law. A dealer who wishes to employ such a variation must submit a 
written application to the appropriate TTB officer. The application 
must describe the proposed variation and set forth the need for it. 
Variations in type and format of records or methods of preparation must 
not be employed until approval is received from the appropriate TTB 
officer.
    (b) Requirements. Any information required by this part to be kept 
or filed is subject to the provisions of law and this part relating to 
required records and reports, regardless of the form or manner in which 
kept or filed.

(Approved by the Office of Management and Budget under control 
number 1513-0067)


Sec.  31.160  Monthly summary report.

    (a) Requirement. Every wholesale dealer in liquors must, when 
required, submit monthly to the appropriate TTB officer a summary 
report of the total quantities of all distilled spirits received and 
disposed of daily during the month (including the date of discovery for 
theft, casualty and inventory losses and inventory gains). This report 
must be posted by the wholesaler on a daily basis. If there were no 
receipts or disposals of distilled spirits during the month, the report 
must be marked ``No Transactions During Month.'' This report must be 
filed not later than the 15th day of the month following the report 
period, with a copy retained by the dealer. The appropriate TTB officer 
may authorize a dealer, upon request, to post the report less 
frequently until otherwise notified; the appropriate TTB officer's 
authorization will specify the intervals at which the posting will be 
accomplished, but not less frequently than monthly.
    (b) Form of report. When required under paragraph (a) of this 
section, the monthly summary report may be prepared in a format that is 
adapted to the dealer's accounting and recordkeeping systems. In 
addition to any other information shown therein, the report must 
include:
    (1) Daily totals of all bottled spirits received and disposed of, 
recorded by wine gallons or liters;
    (2) Daily totals of all bulk spirits in packages received and 
disposed of, recorded by proof gallons; and
    (3) Entries showing, by date, each disposition caused by an 
inventory, casualty, or theft loss and each receipt caused by a 
recorded gain in inventory.
    (c) Declaration. When required to be filed, the monthly summary 
report must bear the following declaration signed by the dealer or an 
authorized agent:

    I declare under the penalties of perjury that I have examined 
this report and, to the best of my knowledge and belief, it is true, 
correct, and complete and is supported by true, correct, and 
complete records which are available for inspection.

    (d) Other records. Even if the monthly summary report is not 
required by the appropriate TTB officer, every wholesale dealer in 
distilled spirits must maintain and make available for review by 
appropriate TTB officers:
    (1) Records of receipt required by Sec.  31.155;
    (2) Records of disposition, required by Sec.  31.156; and
    (3) Any other supporting information or documents regarding the 
receipt and disposition of distilled spirits that have a direct role in 
determining the completeness and accuracy of the receipt and 
disposition records.

(Approved by the Office of Management and Budget under control 
number 1513-0065) (26 U.S.C. 5121)


Sec.  31.161   Conversion between metric and U.S. units.

    When liters are converted to wine gallons, the quantity in liters 
must be multiplied by 0.264172 to determine the equivalent quantity in 
wine gallons. Once converted to wine gallons, the proof gallons of 
spirits in cases must be determined as provided in Sec.  30.52 of this 
chapter. Cases containing the same quantity of spirits of the same 
proof in metric bottles may be converted to U.S. units by multiplying 
the liters in one case by the number of cases to be converted, as 
follows:
    (a) If the conversion from liters to U.S. units is made before 
multiplying by the number of cases, the quantity in U.S.

[[Page 37417]]

units must be rounded to the sixth decimal; and
    (b) If the conversion is made after multiplying by the number of 
cases, the quantity in U.S. units must be rounded to the nearest 
hundredth.

(26 U.S.C. 7805; 27 U.S.C. 205)


Sec.  31.162   Discontinuance of business.

    When a wholesale dealer in liquors who is required, under Sec.  
31.160, to file a monthly summary report discontinues business, a 
monthly summary report marked ``Final'' must be filed covering 
transactions through the date of discontinuance.

(26 U.S.C. 5121)


Sec.  31.163   Requirements when a wholesale dealer in liquors 
maintains a retail department.

    (a) Constructive receipt and sale. When a wholesale dealer in 
liquors maintains a separate department on the premises for the 
retailing of distilled spirits, and the retail sales of distilled 
spirits normally represent 90 percent or more of the volume of 
distilled spirits sold, the dealer may ``constructively'' receive all 
distilled spirits in the retail department. Sales involving a wholesale 
transaction may be ``constructively'' sold through the wholesale 
department.
    (1) Receipts. In lieu of maintaining and preparing the records 
required by Sec.  31.155, a wholesale dealer may constructively receive 
all distilled spirits in its retail department. In this case, the 
receiving document will serve as a receipt for (through) the wholesale 
department and a disposition (transfer) to the retail department. The 
receiving document must be maintained by the retail department in 
accordance with Sec.  31.171.
    (2) Dispositions. In lieu of maintaining and preparing the records 
required by Sec.  31.156, a wholesale dealer may constructively sell 
distilled spirits from its retail department to other dealers. The 
sales invoice or bill must be filed in the wholesaler's disposition 
records and will serve as a record of receipt from the retail 
department and a record of disposition to another dealer.
    (b) Receipt and disposition records. Except as provided in 
paragraph (a) of this section, a wholesale dealer must prepare and 
maintain the required records of receipt and disposition as prescribed 
in Sec. Sec.  31.155 and 31.156. Transfers between the wholesale and 
retail departments will be treated in the same manner as any other 
transaction involving the wholesale department.
    (c) Monthly summary report. When required by Sec.  31.160, a 
wholesale dealer must prepare and file the monthly summary report of 
actual or constructive receipts and dispositions of all distilled 
spirits.
    (d) Physical separation. Wholesale and retail departments need not 
be physically separated.

(26 U.S.C. 5121)

Filing of Wholesale Dealers' Records and Reports


Sec.  31.171   Method of filing.

    A wholesale dealer may file the records of receipt and disposition 
required by Sec. Sec.  31.155 and 31.156 in accordance with the 
wholesaler's regular accounting and recordkeeping systems. The required 
records must include the dealer's own file copies of the receiving or 
shipping invoices and must be filed according to the following rules:
    (a) Wholesale dealers may file records of receipt and disposition 
in accordance with their own filing system as long as the records are 
filed by transaction or reporting date and the filing system 
systematically and accurately accounts for all receipts and 
dispositions of distilled spirits.
    (b) The required records of receipt and disposition must be filed 
not later than one business day following the date the transaction 
occurred.
    (c) Supporting documents for receipts and dispositions, such as 
delivery receipts and bills of lading, also may be filed in accordance 
with the wholesaler's regular accounting and recordkeeping practices.

(26 U.S.C. 5121, 5122, 5123)


Sec.  31.172   Place of filing.

    Records of receipt and disposition and monthly summary reports 
required by Sec. Sec.  31.155, 31.156, and 31.160 must be maintained at 
the dealer's place of business. The appropriate TTB officer may, upon 
request, authorize maintenance of files, or an individual file, at 
another business location under the control of the same wholesale 
dealer, when it is determined that such maintenance will not cause 
undue inconvenience to TTB officers desiring to examine those files.

(26 U.S.C. 5123)

Retail Dealer's Records


Sec.  31.181   Requirements for retail dealers.

    (a) Records of receipt. All retail dealers must keep at their place 
of business complete records showing the quantities of all distilled 
spirits, wines, and beer received, from whom the distilled spirits, 
wines, and beer were received, and the dates of receipt. However, the 
appropriate TTB officer may, upon request, authorize the maintenance of 
records at another business premises also under the control of the same 
retail dealer when it is determined that such maintenance will not 
cause undue inconvenience to TTB officers desiring to examine those 
records. Records of receipts shall consist of all purchase invoices or 
bills covering distilled spirits, wines, and beer received, or, at the 
option of the retail dealer, a book record containing all of the 
required information.
    (b) Records of sales of 20 wine gallons (75.7 liters) or more. 
Every retail dealer who makes sales of distilled spirits, of wines, or 
of beer in quantities of 20 wine gallons (75.7 liters) or more to the 
same person at the same time must prepare and keep a record of each 
sale. The record must show the date of sale, the name and address of 
the purchaser, the kind and quantity of each kind of liquors sold, and 
the serial numbers of all full cases of distilled spirits included in 
the sale. Each entry on that record must be supported by a 
corresponding delivery receipt (which may be executed on a copy of the 
sales slip) signed by the purchaser or the purchaser's agent.

(Approved by the Office of Management and Budget under control 
number 1513-0066) (26 U.S.C. 5122, 5123)

Retention of Records and Files


Sec.  31.191   Period of retention.

    All records and files, all documents or copies of documents 
supporting these records and files, and all file copies of reports, 
submitted as required by this part, must be retained by the person 
required to have them, for a period of not less than three years and, 
during the retention period, must be available, during business hours, 
for inspection and copying by the appropriate TTB officers. In 
addition, the appropriate TTB officer may require retention of the 
documents and other records for an additional period of not more than 
three years if it is determined that such additional retention is 
necessary.

(26 U.S.C. 5123)


Sec.  31.192   Photographic copies of records.

    (a) General. Dealers may record, copy, or reproduce records 
required by this part. Dealers may use any process that accurately 
reproduces the original record and that forms a durable medium for 
preserving the original record.
    (b) Copies of records treated as original records. Whenever records 
are reproduced under this section, the reproduced records must be 
preserved in conveniently accessible files, and provision must be made 
for examining, viewing, and using the reproduced record in the same 
manner as if it were

[[Page 37418]]

the original record. A reproduced record will be treated and considered 
for all purposes as though it were the original record. All provisions 
of law and regulations applicable to the original record 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 
a dealer, even though it may be an executed duplicate or other copy of 
the document.

(26 U.S.C. 5555)

Subpart K--Reuse and Possession of Used Liquor Bottles


Sec.  31.201   Refilling of liquor bottles.

    No person who sells, or offers for sale, distilled spirits, or 
agent or employee of such person, shall:
    (a) Place in any liquor bottle any distilled spirits whatsoever 
other than those contained in that bottle at the time of closing under 
the provisions of 26 U.S.C. chapter 51; or
    (b) By the addition of any substance whatsoever to any liquor 
bottle, in any manner alter or increase any portion of the original 
contents contained in that bottle at the time of closing under the 
provisions of 26 U.S.C. chapter 51.

(26 U.S.C. 5301)


Sec.  31.202   Possession of refilled liquor bottles.

    No person who sells, or offers for sale, distilled spirits, or 
agent or employee of such person, shall:
    (a) Possess any liquor bottle in which any distilled spirits have 
been placed in violation of the provisions of Sec.  31.201; or
    (b) Possess any liquor bottle, any portion of the contents of which 
has been altered or increased in violation of the provisions of Sec.  
31.201.

(26 U.S.C. 5301)


Sec.  31.203   Possession of used liquor bottles.

    The possession of used liquor bottles by any person other than the 
person who empties the contents thereof is prohibited except in the 
following circumstances:
    (a) The owner or occupant of any premises on which the used bottles 
have been lawfully emptied may assemble the bottles on such premises--
    (1) For delivery to a bottler or importer on specific request of 
that bottler or importer;
    (2) For destruction, either on the premises on which the bottles 
are emptied or elsewhere, including disposition for purposes that will 
result in the bottles being rendered unusable as bottles; or
    (3) In the case of unusual or distinctive bottles, for disposition 
or sale as collectors' items or for other purposes not involving the 
packaging of any product for sale;
    (b) Any person may possess, offer for sale, or sell unusual or 
distinctive bottles for purposes not involving the packaging of any 
product for sale; and
    (c) Any person may assemble used liquor bottles for the purpose of 
recycling or reclaiming the glass or other approved liquor bottle 
material.

(26 U.S.C. 5301)


Sec.  31.204   Mixed cocktails.

    A retail liquor dealer who mixes cocktails or compounds any 
alcoholic liquors in advance of sale, as provided in Sec.  31.233, may 
not use liquor bottles in which distilled spirits have been previously 
packaged for the storage of the mixture or compound pending that sale.

(26 U.S.C. 5301)

Subpart L--Packaging of Alcohol for Industrial Uses


Sec.  31.211   Requirements and procedure.

    Upon compliance with the provisions of part 19 of this chapter 
applicable to persons repackaging distilled spirits, and subject to the 
requirements of paragraphs (a) through (c) of this section, a dealer 
engaged in the business of supplying distilled spirits for industrial 
use may obtain bulk alcohol on which the tax has been paid or 
determined and repackage the alcohol for sale for industrial use in 
containers of a capacity in excess of 1 wine gallon and not more than 5 
wine gallons.
    (a) Qualification procedure. An application for registration, TTB 
Form 5110.41, and an application for an operating permit, TTB Form 
5110.25, modified in accordance with instructions of the appropriate 
TTB officer, must be executed and filed with the appropriate TTB 
officer. No alcohol shall be repackaged until the approved application 
for registration and the approved operating permit are received.
    (b) Operations. Repackaging operations must be conducted in 
accordance with the bottling and packaging requirements of part 19 of 
this chapter. Packaging and labeling operations may be carried on 
without supervision of a TTB officer unless the appropriate TTB officer 
requires supervision.
    (c) Records. The dealer must keep daily records showing the bulk 
alcohol received, dumped for packaging, packaged, and disposed of, 
including the name and address of each consignor and consignee. The 
dealer must prepare a monthly report on TTB Form 5110.28 of bulk 
alcohol received, packaged, and disposed of. Reports on Form 5110.28 
must be submitted to the appropriate TTB officer not later than the 
15th day of the month following the period covered by the report. 
Records, documents, or copies of documents supporting the records, and 
copies of reports submitted to the appropriate TTB officer, must be 
filed and retained as prescribed in Sec. Sec.  31.172 and 31.191.

(26 U.S.C. 5131, 5206)


Sec.  31.212   Labeling.

    Every dealer packaging alcohol for industrial use must affix to 
each package filled a label bearing in conspicuous print the words 
``Alcohol'' and ``For Industrial Use,'' the proof of the alcohol, the 
capacity of the container, and the packaging dealer's name and address. 
The dealer may incorporate in the label other appropriate statements; 
however, such statements must not obscure or contradict the data 
required by this section to be shown on such labels.

(26 U.S.C. 5131, 5206)

Subpart M--Distilled Spirits for Export with Benefit of Drawback


Sec.  31.221   General.

    A State, a political subdivision of a State, or a person holding a 
wholesale liquor dealer's basic permit issued under part 1 of this 
chapter may export bottled taxpaid distilled spirits with benefit of 
drawback as provided in Sec.  28.171 of this chapter. The marking of 
cases, the preparation of notice of shipment on TTB Form 5110.30, the 
removal and exportation of the distilled spirits, and the filing of 
claims by the processor of the spirits must be in accordance with the 
applicable provisions of parts 19 and 28 of this chapter.


Sec.  31.223   Records and reports.

    The provisions of subpart J of this part regarding records and 
reports relating to liquors for domestic use also apply to export 
transactions permitted under this subpart.

Subpart N--Miscellaneous


Sec.  31.231   Destruction of marks and brands on wine containers.

    A dealer who empties any cask, barrel, keg, or other bulk container 
of wine must scrape or obliterate from the empty container all marks, 
brands, tags, or labels placed thereon under the provisions of part 24 
of this chapter as evidence of the payment or determination of the tax 
on the wine

[[Page 37419]]

removed in the container from the bonded wine cellar.


Sec.  31.232  Wine bottling.

    Each person desiring to bottle, package, or repackage taxpaid wines 
must, before carrying on those operations, apply and receive permission 
from the appropriate TTB officer in accordance with part 24 of this 
chapter. The decanting of wine by caterers or other retail dealers for 
table or room service, banquets, and similar purposes shall not be 
considered as ``bottling,'' if the decanters are not furnished for the 
purpose of carrying wine away from the area where served.

(26 U.S.C. 5352)


Sec.  31.233  Mixing cocktails in advance of sale.

    A retail liquor dealer shall not mix cocktails, or compound any 
alcoholic liquors in advance of sale, except for the purpose of 
filling, for immediate consumption on the premises, orders received, or 
expected to be immediately received, at the bar. See Sec.  31.204 for 
additional mixed cocktail rules.

(26 U.S.C. 5002)


Sec.  31.234  Liability for special (occupational) tax.

    The special (occupational) tax on alcohol beverage dealers was 
suspended for the period July 1, 2005, through June 30, 2008, and was 
repealed effective July 1, 2008. Dealers who were engaged in business 
prior to the suspension period remain liable for payment of the special 
(occupational) tax in accordance with the laws and regulations in 
effect at that time. The tax return to be used for payment of any past-
due special (occupational) tax is TTB Form 5630.5a.

(Section 11125, Pub. L. 109-59, 119 Stat. 1953)

PART 40--MANUFACTURE OF TOBACCO PRODUCTS AND CIGARETTE PAPERS AND 
TUBES

0
65. The authority citation for part 40 is revised to read as follows:

    Authority:  26 U.S.C. 448, 5701, 5703-5705, 5711-5713, 5721-
5723, 5731-5734, 5741, 5751, 5753, 5761-5763, 6061, 6065, 6109, 
6151, 6301, 6302, 6311, 6313, 6402, 6404, 6423, 6676, 6806, 7011, 
7212, 7325, 7342, 7502, 7503, 7606, 7805; 31 U.S.C. 9301, 9303, 
9304, 9306.

0
66. Section 40.11 is amended by adding, in alphabetical order, a 
definition of ``special tax'' to read as follows:


Sec.  40.11  Meaning of terms.

* * * * *
    Special tax. The special (occupational) tax on manufacturers of 
tobacco products, manufacturers of cigarette papers and tubes, and 
export warehouse proprietors, imposed by 26 U.S.C. 5731.
* * * * *

0
67. Section 40.31 is amended by removing and reserving paragraph (b) 
and by adding new paragraph (d) and revising the informational 
reference at the end of the section to read as follows:


Sec.  40.31  Liability for special tax.

* * * * *
    (d) Payment of tax. Special tax must be paid by return. The 
prescribed return is TTB Form 5630.5t, Special Tax Registration and 
Return--Tobacco. Special tax returns, with payment of tax, must be 
filed with TTB in accordance with the instructions on the form and the 
requirements of subpart D of part 46 of this chapter.

(26 U.S.C. 5731, 5733)


0
68. Section 40.33 is revised to read as follows:


Sec.  40.33  Cross reference.

    For additional rules pertaining to liability for special tax, 
filing special tax returns, issuance and examination of special 
(occupational) tax stamps, and notification of changes to special tax 
stamps, see subpart D of part 46 of this chapter.


Sec. Sec.  40.34, 40.35, and 40.36  [Removed and reserved]

0
69. Sections 40.34, 40.35, and 40.36 are removed and reserved.

0
70. Section 40.371 is amended by adding a new paragraph (c) and 
revising the informational reference at the end of the section to read 
as follows:


Sec.  40.371  Liability for special tax.

* * * * *
    (c) Payment of tax. Special tax must be paid by return. The 
prescribed return is TTB Form 5630.5t, Special Tax Registration and 
Return--Tobacco. Special tax returns, with payment of tax, must be 
filed with TTB in accordance with the instructions on the form and the 
requirements of subpart D of part 46 of this chapter.

(26 U.S.C. 5731, 5733)


0
71. Section 40.373 is revised to read as follows:


Sec.  40.373  Cross reference.

    For additional rules pertaining to liability for special tax, 
filing special tax returns, issuance and examination of special tax 
stamps, and notification of changes to special tax stamps, see subpart 
D of part 46 of this chapter.


Sec. Sec.  40.374 and 40.375  [Removed and reserved]

0
72. Sections 40.374 and 40.375 are removed and reserved.

PART 44--EXPORTATION OF TOBACCO PRODUCTS AND CIGARETTE PAPERS AND 
TUBES, WITHOUT PAYMENT OF TAX, OR WITH DRAWBACK OF TAX

0
73. The authority citation for part 44 is revised to read as follows:

    Authority: 26 U.S.C. 448, 5701, 5703-5705, 5711-5713, 5721-5723, 
5731-5734, 5741, 5751, 5754, 6061, 6065, 6151, 6402, 6404, 6806, 
7011, 7212, 7342, 7606, 7805; 31 U.S.C. 9301, 9303, 9304, 9306.


0
74. Section 44.11 is amended by adding, in alphabetical order, a 
definition of ``special tax'' to read as follows:


Sec.  44.11  Meaning of terms.

* * * * *
    Special tax. The special (occupational) tax on manufacturers of 
tobacco products, manufacturers of cigarette papers and tubes, and 
export warehouse proprietors, imposed by 26 U.S.C. 5731.
* * * * *

0
75. Section 44.31 is amended by removing and reserving paragraph (b) 
and by adding new a paragraph (d) and revising the informational 
reference at the end of the section to read as follows:


Sec.  44.31  Liability for special tax.

* * * * *
    (d) Payment of tax. Special tax must be paid by return. The 
prescribed return is TTB Form 5630.5t, Special Tax Registration and 
Return--Tobacco. Special tax returns, with payment of tax, must be 
filed with TTB in accordance with the instructions on the form and the 
requirements of subpart D of part 46 of this chapter.

(26 U.S.C. 5731, 5733)


0
76. Section 44.33 is revised to read as follows:


Sec.  44.33  Cross reference.

    For additional rules pertaining to liability for special 
(occupational) tax, filing special tax returns, issuance and 
examination of special tax stamps, and notification of changes to 
special tax stamps, see subpart D of part 46 of this chapter.


Sec. Sec.  44.34, 44.35, and 44.36  [Removed and reserved]

0
77. Sections 44.34, 44.35, and 44.36 are removed and reserved.

[[Page 37420]]

PART 46--MISCELLANEOUS REGULATIONS RELATING TO TOBACCO PRODUCTS AND 
CIGARETTE PAPERS AND TUBES

0
78. The authority citation for part 46 is revised to read as follows:

    Authority:  18 U.S.C. 2341-2346, 26 U.S.C. 5061, 5704, 5708, 
5731-5734, 5751, 5754, 5761-5763, 6001, 6601, 6621, 6622, 7212, 
7342, 7602, 7606, 7805; 44 U.S.C. 3504(h), 49 U.S.C. 782, unless 
otherwise noted.


0
79. Part 46 is amended by adding a new subpart D to read as follows:
Subpart D--Rules for Special (Occupational) Tax
Sec.
46.91 Scope of subpart.
46.92 Meaning of terms.
46.93 Multiple businesses of same ownership and location.
46.94 Relation to State and municipal law.
46.95 Liability of partners.

Payment of Special Tax

46.101 Special tax returns.
46.102 Employer identification number.
46.103 Time for filing return and paying tax.
46.104 Method of payment.
46.105 Receipt for taxes.
46.106 Receipt in lieu of stamp prohibited.
46.107 Penalty for failure to file return or to pay tax.
46.108 Interest on unpaid tax.
46.109 Waiver of penalties.

Special Tax Stamps

46.116 Issuance, distribution, and examination of special tax 
stamps.
46.117 Lost or destroyed stamps.
46.118 Certificate in lieu of lost or destroyed special tax stamp.
46.119 Errors disclosed by taxpayers.
46.120 Errors discovered on inspection.

Changes in Businesses Holding Special Tax Stamps

46.126 Change in name or address.
46.127 Change in ownership.

Stamps for Incorrect Period or Incorrect Liability

46.131 General.
46.132 Credit for incorrect stamp.

Abatement or Refund of Special Taxes

46.136 Claims.
46.137 Time limit on filing of claim for refund.
46.138 Discontinuance of business.

Subpart D--Rules for Special (Occupational) Tax


Sec.  46.91  Scope of subpart.

    This subpart contains rules relating to special (occupational) 
taxes that must be paid by manufacturers of tobacco products, 
manufacturers of cigarette papers and tubes, and export warehouse 
proprietors.


Sec.  46.92  Meaning of terms.

    As used in this subpart, the following terms shall have the 
meanings indicated unless either the context in which they are used 
requires a different meaning, or a different definition is prescribed 
for a particular section or portion of this subpart:
    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 
1135.46, Delegation of the Administrator's Authorities in 27 CFR Part 
46, Miscellaneous Regulations Relating to Tobacco Products and 
Cigarette Papers and Tubes.
    CFR. The Code of Federal Regulations.
    Cigarette paper. Paper, or any other material except tobacco, 
prepared for use as a cigarette wrapper.
    Cigarette tube. Cigarette paper made into a hollow cylinder for use 
in making cigarettes.
    Export warehouse. A bonded internal revenue warehouse for the 
storage of tobacco products and cigarette papers and tubes, upon which 
the internal revenue tax has not been paid, for subsequent shipment to 
a foreign country, Puerto Rico, the Virgin Islands, or a possession of 
the United States, or for consumption beyond the jurisdiction of the 
internal revenue laws of the United States.
    Export warehouse proprietor. Any person who operates an export 
warehouse.
    Manufacturer of cigarette papers and tubes. Any person who 
manufactures cigarette paper, or makes up cigarette paper into tubes, 
except for his own personal use or consumption.
    Manufacturer of tobacco products. Any person who manufactures 
tobacco products.
    Person. An individual, a trust, estate, partnership, association or 
other unincorporated organization, fiduciary, company, or corporation, 
or the District of Columbia, a State, or a political subdivision 
thereof (including a city, county, or other municipality).
    Special tax. The special (occupational) tax on manufacturers of 
tobacco products, manufacturers of cigarette papers and tubes, and 
export warehouse proprietors, imposed by 26 U.S.C. 5731.
    Tax year. The period from July 1 of one calendar year through June 
30 of the following calendar year.
    This chapter. Chapter I of title 27 of the Code of Federal 
Regulations.
    Tobacco products. Cigars, cigarettes, smokeless tobacco, pipe 
tobacco, and roll-your-own tobacco.
    U.S.C. The United States Code.


Sec.  46.93  Multiple businesses of same ownership and location.

    (a) Where more than one type of taxable business is conducted by 
the same person at the same place, special tax for each business must 
be paid at the rates prescribed for each.
    (b) Where the same type of taxable business is conducted by the 
same person in different areas of the same premises, only one special 
tax payment is required.

(26 U.S.C. 5733)


Sec.  46.94   Relation to State and municipal law.

    (a) General. The payment of special (occupational) tax does not 
exempt any person from any penalty or punishment provided by the laws 
of any State for carrying on any trade or business within that State, 
nor does it authorize the commencement or continuance of any trade or 
business contrary to State law or in places prohibited by county or 
municipal law. Payment of this tax does not prohibit any State from 
placing an additional duty or tax on the same trade or business, for 
State or other purposes.
    (b) Special tax stamps. TTB officers are without authority to 
refuse to issue a special tax stamp to a person engaged in business in 
violation of State law. The stamp is not a Federal permit or license, 
but is merely a receipt for the tax. The stamp affords the holder no 
protection against prosecution for violation of State law.

(26 U.S.C. 5734)


Sec.  46.95   Liability of partners.

    Any number of persons carrying on one business in partnership at 
any one place during any tax year are required to pay only one special 
tax.

(26 U.S.C. 5733)

Payment of Special Tax


Sec.  46.101   Special tax returns.

    (a) Preparation of TTB Form 5630.5t. Every manufacturer of tobacco 
products, manufacturer of cigarette papers and tubes, and export 
warehouse proprietor is required to pay special (occupational) tax and 
file a return on TTB Form 5630.5t, ``Special Tax Registration and 
Return--Tobacco.'' TTB Form 5630.5t must be completed in accordance 
with the instructions on the form, and all of the information called 
for on the form must be provided, including the following:
    (1) Name of the taxpayer.
    (2) Trade name(s) (if any) of the business(es) subject to special 
(occupational) tax.

[[Page 37421]]

    (3) Employer identification number (see Sec.  46.102).
    (4) Exact location of the place of business, by name and number of 
building or street, or if these do not exist, by some specific 
description in addition to the post office address. In the case of one 
return for two or more locations, the address to be shown must be the 
taxpayer's principal place of business (or principal office, in the 
case of a corporate taxpayer).
    (5) Class(es) of special tax to which the taxpayer is subject.
    (6) Ownership and control information. This consists of the name, 
position, and residence address of every owner of the business and of 
every person having power to control its management and policies with 
respect to the activity subject to special tax. ``Owner of the 
business'' includes every partner, if the taxpayer is a partnership, 
and every person owning 10 percent or more of its stock, if the 
taxpayer is a corporation. However, the ownership and control 
information required by this paragraph need not be stated if the same 
information has been previously provided to TTB in connection with a 
permit application and that previously provided information is still 
current.
    (b) Multiple locations and/or classes of tax. A taxpayer subject to 
special tax for the same period at more than one location or for more 
than one class of tax must--
    (1) File one special tax return, TTB Form 5630.5t, with payment of 
tax, to cover all such locations and classes of tax; and
    (2) Prepare, in duplicate, a list identified with the taxpayer's 
name, address (as shown on TTB Form 5630.5t), employer identification 
number, and period covered by the return. The list must show, by State, 
the name, address, and tax class of each location for which special tax 
is being paid. The original of the list must be filed with TTB as an 
attachment to TTB Form 5630.5t, and the copy must be retained at the 
taxpayer's principal place of business (or principal office, in the 
case of a corporate taxpayer) for a period of three years from the date 
of the return.
    (c) Signing of TTB Form 5630.5t--(1) By principal. The return of an 
individual proprietor must be signed by the individual. The return of a 
partnership must be signed by a general partner. The return of a 
corporation must be signed by an officer. In each case, the person 
signing the return must designate his or her capacity as ``individual 
owner,'' ``member of firm,'' or, in the case of a corporation, the 
officer's title.
    (2) By fiduciary. A receiver, trustee, assignee, executor, 
administrator, or other legal representative who continues the business 
of a bankrupt, insolvent, deceased, or otherwise incapacitated person 
must indicate the capacity in which the fiduciary acts.
    (3) By agent or attorney in fact. If a return is signed by an agent 
or attorney in fact, the signature must be preceded by the name of the 
principal and followed by the title of the agent or attorney in fact. A 
return signed by a person as agent will not be accepted unless there is 
filed, with the TTB office with which the return is required to be 
filed, a power of attorney authorizing the agent to perform the act.
    (d) Perjury statement. Each TTB Form 5630.5t must contain, or be 
verified by, a written declaration that the return has been executed 
under the penalties of perjury.

(26 U.S.C. 5732, 6061, 6065, 6151, 7011) (Approved by the Office of 
Management and Budget under control number 1513-0112)


Sec.  46.102   Employer identification number.

    (a) Requirement. The employer identification number (as defined in 
26 CFR 301.7701-12) of the taxpayer who has been assigned such a number 
must be shown on each special tax return, including each amended 
return, filed under this subpart. Failure of the taxpayer to include 
the employer identification number may result in the imposition of the 
penalty specified in Sec.  70.113 of this chapter.
    (b) Application for employer identification number. Each taxpayer 
who files a special tax return and who has not already been assigned an 
employer identification number must file Internal Revenue Service (IRS) 
Form SS-4 to apply for one. The taxpayer must apply for and be assigned 
only one employer identification number, regardless of the number of 
places of business for which the taxpayer is required to file a special 
tax return. The taxpayer must apply for the employer identification 
number no later than 7 days after the filing of the taxpayer's first 
special (occupational) tax return. IRS Form SS-4 may be obtained from 
the director of an IRS service center, from any IRS district director, 
or from http://www.irs.gov/.

(26 U.S.C. 6109)


Sec.  46.103   Time for filing return and paying tax.

    The return, along with remittance of special tax, must be filed on 
or before the date of commencing business as a manufacturer of tobacco 
products, manufacturer of cigarette papers or tubes, or export 
warehouse proprietor, and thereafter every year on or before July 1. If 
the return and applicable tax are received in the mail and the U.S. 
postmark on the cover shows that it was deposited in the mail in the 
United States within the time prescribed for filing in an envelope or 
other appropriate wrapper which was properly addressed with postage 
prepaid, the return will be considered as timely filed. If the postmark 
is not legible, the sender has the burden of proving the date when the 
postmark was made. When registered mail is used, the date of 
registration will be accepted as the postmark date. When certified mail 
is used, the date of the postmark on the sender's receipt of certified 
mail is treated as the postmark date.

(26 U.S.C. 5732, 6011, 6071)


Sec.  46.104   Method of payment.

    Payment of special tax must be made in cash, or by check or money 
order payable to Alcohol and Tobacco Tax and Trade Bureau. If a check 
or money order so tendered is not honored when presented for payment, 
the person who tendered the check or money order will remain liable for 
the payment of the special tax, and for all penalties and additions, to 
the same extent as if the check or money order had not been tendered. 
In addition, unless the person who tendered the check or money order 
can show that the check or money order was issued in good faith, and 
with reasonable cause to believe that it would be duly paid, there must 
be paid as penalty an amount equal to 1 percent of the amount of the 
check or money order, except that if the amount of the check or money 
order is less than $500, the penalty will be $5, or the amount of the 
check or money order, whichever is less.

(26 U.S.C. 6311, 6657)


Sec.  46.105   Receipt for taxes.

    Subject to Sec.  46.106, the appropriate TTB officer will issue a 
receipt to a taxpayer if cash is received as a remittance in payment of 
special tax (including penalties and interest, if any), or for any type 
of remittance received if the taxpayer requests a receipt.


Sec.  46.106   Receipt in lieu of stamp prohibited.

    No receipt will be issued in lieu of issuance of a special tax 
stamp under Sec.  46.116. A receipt may be given only pending the 
issuance of a stamp, or where the tax liability relates to a prior tax 
year.

(26 U.S.C. 6314)

[[Page 37422]]

Sec.  46.107   Penalty for failure to file return or to pay tax.

    (a) Failure to file return. Any person required by this subpart to 
file a return on TTB Form 5630.5t who fails to file the return on or 
before the date for filing prescribed in Sec.  46.103 must pay, in 
addition to the tax, a delinquency penalty, unless it is shown that 
such failure is due to reasonable cause and not due to willful neglect 
(see Sec.  46.109). The delinquency penalty for failure to file the 
return on or before the last date prescribed will be 5 percent of the 
amount required to be shown as tax on the return if the failure to file 
is for not more than one month; with an additional 5 percent for each 
additional month or fraction thereof during which the delinquency 
continues, but not more than 25 percent in the aggregate.
    (b) Failure to pay tax. Any person who files a return on TTB Form 
5630.5t under this subpart and who fails to pay the amount shown as tax 
on the return on or before the date prescribed in Sec.  46.103 for 
payment of such tax, must pay a penalty, in addition to the tax, unless 
it is shown that such failure is due to reasonable cause and not due to 
willful neglect (see Sec.  46.109). The penalty for failure to pay the 
tax on or before the date prescribed for payment is 0.5 percent of the 
amount shown as tax on the return if the failure to pay is not for more 
than one month; with an additional 0.5 percent for each additional 
month or fraction thereof during which the failure continues, but not 
more than 25 percent in the aggregate. Any person required to pay the 
special tax who willfully fails to pay the tax shall be fined not more 
than $5,000, or imprisoned not more than 2 years, or both, for each 
such offense.
    (c) Limitations. With respect to any return on Form 5630.5t, the 
amount of the addition under paragraph (a) of this section will be 
reduced by the amount of the addition under paragraph (b) of this 
section for any month to which an addition to tax applies under both 
paragraph (a) and paragraph (b) of this section. If the amount of tax 
required to be shown as tax on the return is less than the amount shown 
as tax on such return, the penalties prescribed in paragraphs (a) and 
(b) of this section will be applied by substituting that lower amount.

(26 U.S.C. 5731, 6651)


Sec.  46.108   Interest on unpaid tax.

    (a) General. Interest is due on unpaid special tax from the date 
the tax was required to be paid to the date paid. Interest will be 
charged for each day at the rate prescribed by law in effect on that 
day. Interest accruing after December 31, 1982, is compounded daily.
    (b) Adjusted interest rates. Adjusted interest rates, determined in 
accordance with the procedure prescribed by 26 U.S.C. 6621(b), are 
announced quarterly by the Commissioner of Internal Revenue. The 
appropriate TTB officer will provide information, when requested, 
regarding interest rates applicable to specific time periods.

(26 U.S.C. 6601, 6621)


Sec.  46.109   Waiver of penalties.

    In every case where a special tax return is not filed, or the tax 
is not paid, at the time prescribed in Sec.  46.103, the delinquency 
penalties specified in Sec.  46.107 for failure to file a return or for 
failure to pay the amount shown as tax on the return will be asserted 
and collected unless a reasonable cause for delay in filing the return 
or payment of the tax is clearly established. A taxpayer who believes 
the circumstances that delayed such taxpayer's filing of the return or 
payment of the tax are reasonable, and who desires to have the 
penalties waived, must submit with the return a written statement under 
the penalty of perjury, affirmatively showing all of the circumstances 
alleged as reasonable causes for delay. If the appropriate TTB officer 
determines that the delinquency was due to a reasonable cause and not 
to willful neglect or gross negligence, the addition to the tax will be 
waived. If the taxpayer exercised ordinary business care and prudence 
and was nevertheless unable to file the return within the prescribed 
time, or if the taxpayer made a satisfactory showing that the taxpayer 
exercised ordinary business care and prudence in providing for payment 
of the tax liability and was nevertheless either unable to pay the tax 
or would have suffered an undue hardship if the taxpayer had paid on 
the due date, then the delay is due to reasonable cause. Mere ignorance 
of the law will not be considered a reasonable cause.

(26 U.S.C. 6651)

Special Tax Stamps


Sec.  46.116   Issuance, distribution, and examination of special tax 
stamps.

    (a) Issuance of special tax stamps. Upon filing a properly executed 
return on TTB Form 5630.5t together with the full tax remittance, the 
taxpayer will be issued an appropriately designated special tax stamp. 
If the return covers multiple locations, TTB will send to the 
taxpayer's principal place of business (or principal office in the case 
of a corporate taxpayer) one appropriately designated stamp for each 
location listed on the attachment to TTB Form 5630.5t required by Sec.  
46.101(b)(2).
    (b) Distribution of special tax stamps for multiple locations. On 
receipt of the special tax stamps, the taxpayer must verify that there 
is one stamp for each location listed on the attachment to TTB Form 
5630.5t and that the information on each stamp is correct. The taxpayer 
must then forward each stamp to the place of business designated on the 
stamp. Incorrect stamps must be returned to the appropriate TTB officer 
as provided in Sec.  46.120.
    (c) Examination of special tax stamps. Each stamp denoting payment 
of special tax must be kept available for inspection by an appropriate 
TTB officer during business hours at the location for which the stamp 
is designated.

(26 U.S.C. 5732)


Sec.  46.117   Lost or destroyed stamps.

    If a special tax stamp has been lost or destroyed, the taxpayer 
must immediately notify the TTB officer who issued the stamp. A 
``Certificate in Lieu of Lost or Destroyed Special Tax Stamp'' will be 
issued to the taxpayer who submits an affidavit explaining to the 
satisfaction of the appropriate TTB officer that the stamp was lost or 
destroyed. The certificate must be kept available for inspection in the 
same manner as prescribed for a special tax stamp in Sec.  46.116(c).


Sec.  46.118   Certificate in lieu of lost or destroyed special tax 
stamp.

    The provisions of this subpart relating to special tax stamps apply 
as well to certificates in lieu of lost or destroyed special tax stamps 
issued to taxpayers under Sec.  46.117.


Sec.  46.119  Errors disclosed by taxpayers.

    On receipt of a special tax stamp, the taxpayer must examine it to 
ensure that the name and address are correctly stated; if not, the 
taxpayer must return the stamp to the TTB officer who issued it, with a 
statement showing the nature of the error and the correct name or 
address. The appropriate TTB officer, on receipt of such stamp and 
statement, will compare the data on the stamp with that of the Form 
5630.5t in TTB files, correct the error if made in the TTB office, and 
return the stamp to the taxpayer. However, if the error was in the 
taxpayer's preparation of the Form 5630.5t, the appropriate TTB officer 
will require the taxpayer to file a new Form 5630.5t, designated 
``Amended Return,'' setting forth the taxpayer's correct name and 
address, and a statement explaining the error on the original Form 
5630.5t. On receipt of the amended Form 5630.5t and a satisfactory 
explanation of the

[[Page 37423]]

error, the appropriate TTB officer will make the proper correction on 
the stamp and return it to the taxpayer.


Sec.  46.120  Errors discovered on inspection.

    When a TTB officer discovers on a special tax stamp a material 
error in the name, ownership, or address of the taxpayer, that officer 
will require the taxpayer to surrender the erroneous tax stamp and 
prepare a new Form 5630.5t, designated ``Amended Return,'' showing 
correctly all of the information required in Sec.  46.101 and 
containing, in the body of the form or in an attachment thereto, a 
statement of the reason for requesting correction of the stamp. On 
receipt of the amended return and an acceptable explanation for the 
error, the officer will make the proper correction on the stamp and 
return it to the taxpayer. However, if the error found by the TTB 
officer is on a special tax stamp issued as a result of a return on 
Form 5630.5t filed under Sec.  46.101(b), that officer will instruct 
the taxpayer to return the stamp, with a statement showing the nature 
of the error and the correct data, to the TTB officer who issued the 
stamp, for correction in accordance with Sec.  46.119.

Changes in Businesses Holding Special (Occupational) Tax Stamps


Sec.  46.126  Change in name or address.

    (a) Change in name. If there is a change in the corporate or firm 
name, or in the trade name, as shown on TTB Form 5630.5t, the taxpayer 
must file an amended special tax return as soon as practicable after 
the change, covering the new corporate or firm name, or trade name. No 
new special tax is required to be paid. The taxpayer must attach the 
special tax stamp for endorsement of the change in name.
    (b) Change in location--(1) General. If there is a change in 
location of a taxable place of business, the taxpayer must, within 30 
days after the change, file with TTB an amended special tax return 
covering the new location. The taxpayer must attach the special tax 
stamp or stamps for endorsement of the change in location. No new 
special tax is required to be paid. However, if the taxpayer does not 
file the amended return within 30 days, the taxpayer is required to pay 
a new special tax and obtain a new special tax stamp.
    (2) Procedure. If the taxpayer's original return on TTB Form 
5630.5t covered only one location, the taxpayer may deliver the amended 
return and the stamp at any TTB office, or to any TTB officer 
inspecting the business, in lieu of mailing them to TTB. If the 
taxpayer's original return covered multiple locations under the 
provisions of Sec.  46.101(b), he or she must forward with the amended 
return an attachment showing both the old and new address of any place 
of business which has been relocated, and the special tax stamp 
covering the location from which the business was removed. The 
appropriate TTB officer receiving such return or stamp will, if the 
return is submitted within the 30-day period, enter the proper 
endorsement on the stamp and return it to the taxpayer.
(26 U.S.C. 5733, 7011)


Sec.  46.127  Change in ownership.

    (a) General. A special tax stamp is a receipt for tax, personal to 
the one to whom issued, and is not transferable from one manufacturer 
of tobacco products, manufacturer of cigarette papers and tubes, or 
export warehouse proprietor to another. If there is a change in the 
ownership of a special-tax payer, the successor must pay a new special 
(occupational) tax and obtain the required special tax stamp(s). 
Examples of changes in ownership that require payment of a new special 
tax include, but are not limited to, the following:
    (1) Sale of business;
    (2) Formation of a partnership by two persons who have paid special 
tax;
    (3) Addition of a partner;
    (4) Incorporation of the business;
    (5) Creation of a new corporation to replace one or more 
corporations that have paid special tax; and
    (6) Stockholder continuing the business of a corporation after its 
dissolution.
    (b) Changes that do not require payment of a new special tax. The 
following changes do not require payment of a special tax:
    (1) Increase in capital stock of a corporation.
    (2) Change in ownership of any or all of the capital stock of a 
corporation.
    (c) Exemption for certain successors. Persons identified in 
paragraph (d) of this section as having the right of succession may 
carry on the business for the remainder of the tax year for which the 
special tax was paid, without paying a new special tax, if within 30 
days after the date on which the successor begins to carry on the 
business, the successor files with TTB a special tax return on TTB Form 
5630.5t showing the basis of succession. A person who is a successor to 
a business for which special tax has been paid, and who fails to 
register the succession, is liable for special tax computed from the 
first day of the calendar month in which the successor began to carry 
on the business.
    (d) Persons having right of succession. The right of succession 
referred to in paragraph (c) of this section will pass to the 
identified persons in the following circumstances:
    (1) Death. The surviving spouse or child, or the executor, 
administrator, or other legal representative, of a deceased taxpayer;
    (2) Succession of spouse. A husband or wife succeeding to the 
business of his or her living spouse;
    (3) Insolvency. A receiver or trustee in bankruptcy, or an assignee 
for the benefit of creditors;
    (4) Withdrawal from firm. The partner or partners remaining after 
the death or withdrawal of a member of a partnership.

(26 U.S.C. 5733)

Stamps for Incorrect Period or Incorrect Liability


Sec.  46.131  General.

    If a taxpayer through error has filed a return and paid special tax 
for an incorrect period of liability or for an incorrect class of 
business, the taxpayer must prepare a corrected TTB Form 5630.5t, 
designated ``Amended Return,'' for each tax year involved and must 
submit the amended return, or returns, with remittance for the total 
applicable tax and additions to the tax (delinquency penalties and 
interest), to TTB in accordance with the instructions on the Form 
5630.5t or, if the error is discovered by a TTB officer inspecting the 
premises, to that officer. Subject to the limitations imposed by 26 
U.S.C. 6511, the incorrectly paid tax (including additions thereto) may 
be allowed as a credit against the correct tax (including any additions 
thereto), as provided in Sec.  46.132, on surrender of the incorrect 
stamp or stamps, with the amended return or returns noted to show that 
credit is requested. Any incorrectly paid tax (including additions 
thereto) that is not credited as provided in Sec.  46.132, including 
any creditable tax and additions thereto in excess of the correct tax 
(including additions thereto), may be refunded pursuant to Sec. Sec.  
46.136 through 46.138 if the taxpayer files a corrected return on Form 
5630.5t with remittance of the correct amount of tax (including any 
additions thereto). A new stamp will be issued only for a current 
period of liability.

(26 U.S.C. 6011)


Sec.  46.132  Credit for incorrect stamp.

    (a) General. The appropriate TTB officer may credit the tax 
(including additions thereto) paid for an incorrect stamp if the 
taxpayer has filed an amended return showing the correct tax on TTB 
Form 5630.5t and has, with the amended return, surrendered the 
incorrect stamp for credit.

[[Page 37424]]

    (b) Underpayment. Where the correct tax (including any additions 
thereto) exceeds the incorrect tax paid, the appropriate TTB officer 
may credit the tax paid against the correct tax upon remittance of the 
difference between the tax paid and the correct tax plus any additions 
thereto.
    (c) Overpayment. Where the tax (and additions thereto) paid for the 
surrendered incorrect stamp exceeds the amount due, the appropriate TTB 
officer will advise the taxpayer to file a claim for refund of that 
excess on TTB Form 5620.8. Sections 46.136 through 46.138 apply to all 
claims for refund.

(26 U.S.C. 6402, 6511)

Abatement or Refund of Special Taxes


Sec.  46.136  Claims.

    Claims for abatement of assessment of special tax (including 
penalties and interest), or for refund of an overpayment of special tax 
(including interest and penalties), must be filed on TTB Form 5620.8. 
The claim must be filed with the appropriate TTB officer. Each claim 
must set forth in detail each ground on which it is based and must 
contain facts sufficient to explain to the appropriate TTB officer the 
exact basis for the claim. If the claim is for refund of special tax 
for which a stamp was issued, either the stamp must be attached to and 
be made a part of the claim, or the claimant must include in the claim 
a satisfactory explanation of the reason why the stamp cannot be 
submitted.


Sec.  46.137  Time limit on filing of claim for refund.

    No claim for the refund of a special tax or penalty will be allowed 
unless presented within 3 years after the filing of the related tax 
return or within 2 years after the payment of such tax or penalty, 
whichever of these periods expires later.

(26 U.S.C. 6511)


Sec.  46.138  Discontinuance of business.

    A dealer who for any reason discontinues business is not entitled 
to a refund of special tax for the unexpired portion of the tax year 
for which the special tax stamp was issued.

(26 U.S.C. 5732)

PART 70--PROCEDURE AND ADMINISTRATION

0
80. The authority citation for part 70 is revised to read as follows:

    Authority:  5 U.S.C. 301 and 552; 26 U.S.C. 4181, 4182, 5123, 
5203, 5207, 5275, 5367, 5415, 5504, 5555, 5684(a), 5741, 5761(b), 
5802, 6020, 6021, 6064, 6102, 6155, 6159, 6201, 6203, 6204, 6301, 
6303, 6311, 6313, 6314, 6321, 6323, 6325, 6326, 6331-6343, 6401-
6404, 6407, 6416, 6423, 6501-6503, 6511, 6513, 6514, 6532, 6601, 
6602, 6611, 6621, 6622, 6651, 6653, 6656-6658, 6665, 6671, 6672, 
6701, 6723, 6801, 6862, 6863, 6901, 7011, 7101, 7102, 7121, 7122, 
7207, 7209, 7214, 7304, 7401, 7403, 7406, 7423, 7424, 7425, 7426, 
7429, 7430, 7432, 7502, 7503, 7505, 7506, 7513, 7601-7606, 7608-
7610, 7622, 7623, 7653, 7805.


Sec.  70.1  [Amended]

0
81. In Sec.  70.1, the last sentence of paragraph (a)(3) is amended by 
adding after ``and firearms taxes,'' the words ``registration of 
dealers in alcohol fit for beverage use,''.


Sec.  70.96  [Amended]

0
82. In Sec.  70.96, the third sentence of paragraph (c) is amended by 
removing the words ``of liquor dealers''.


Sec.  70.321  [Amended]

0
83. Section 70.321 is amended:
0
a. In paragraph (a), by removing and reserving paragraphs (a)(1) 
through (a)(5) and by removing the undesignated concluding text; and
0
b. By removing the OMB justification statement at the end of the 
section.

0
84. Section 70.411 is amended:
0
a. In paragraph (a), by removing the second sentence;
0
b. In paragraph (b), by adding, after the first sentence, a new 
sentence to read as set forth below;
0
c. Also in paragraph (b), in the last sentence, by adding after 
``qualification'' the words ``and registration'';
0
d. In paragraph (c)(16), by removing the words ``special (occupational) 
taxes imposed on wholesale and retail dealers in liquors, wholesale and 
retail dealers in beer, and limited retail dealers'' and adding, in 
their place, the words ``registration requirement imposed on wholesale 
and retail dealers in liquors and wholesale and retail dealers in 
beer'';
0
e. In paragraph (c)(27), by removing the words ``special (occupational) 
and''; and
0
f. By removing the OMB justification statement at the end of the 
section.


Sec.  70.411  Imposition of taxes, qualification requirements, and 
regulations.

* * * * *
    (b) * * * Dealers in alcohol products fit for beverage use and 
manufacturers of nonbeverage products who claim drawback under section 
5114 of the Internal Revenue Code must register. * * *
* * * * *


Sec.  70.412  [Amended]

0
 85. Section 70.412 is amended:
0
a. In paragraph (a), by removing the sixth sentence and, in the last 
sentence, by removing the words ``and the payment of occupational 
taxes''; and
0
b. By removing the OMB justification statement at the end of the 
section.


Sec.  70.414  [Amended]

0
86. Section 70.414 is amended:
0
a. By removing and reserving paragraph (h);
0
b. In paragraph (j), by removing the words ``and claims for refund of 
special (occupational) tax,''; and
0
c. By removing the OMB justification statement at the end of the 
section.

0
87. New Sec. Sec.  70.421 and 70.422 are added between the end of the 
Sec.  70.420 and the undesignated center heading below it, to read as 
follows:


Sec.  70.421  Alcohol dealer registration.

    Every person who sells, or offers for sale, any alcohol product 
(distilled spirits, wines, or beer) fit for beverage use must register 
with the Alcohol and Tobacco Tax and Trade Bureau. The specific 
requirements are contained in the following regulations:
    (a) For proprietors of distilled spirits plants, parts 19 and 31 of 
this chapter;
    (b) For bonded wineries, bonded wine cellars, bonded wine 
warehouses, and taxpaid wine bottling houses, parts 24 and 31 of this 
chapter;
    (c) For brewers, parts 25 and 31 of this chapter;
    (d) For persons bringing distilled spirits, wines, or beer from 
Puerto Rico and the Virgin Islands to the United States, parts 26 and 
31 of this chapter;
    (e) For importers of distilled spirits, wines, or beer, parts 27 
and 31 of this chapter; and
    (f) For wholesalers and retailers of distilled spirits, wines, or 
beer, part 31 of this chapter.


Sec.  70.422  Registration of manufacturers of nonbeverage products.

    For provisions regarding the registration of persons claiming 
drawback on distilled spirits used in the manufacture of certain 
nonbeverage products, see part 17 of this chapter.


Sec.  70.431  [Amended]

0
88. Section 70.431 is amended by removing the word ``and'' at the end 
of paragraph (b)(7)(ii), by removing the period at the end of paragraph 
(b)(7)(iii) and adding, in its place, a semicolon followed by the word 
``and'', and by adding a new paragraph (b)(7)(iv) to read as follows:


Sec.  70.431  Imposition of taxes; regulations.

* * * * *
    (b) * * *

[[Page 37425]]

    (7) * * *
    (iv) Liability for special (occupational) tax, filing special tax 
returns, issuance and examination of special tax stamps, and 
notification of changes to special tax stamps.
* * * * *

    Signed: October 17, 2008.
John J. Manfreda,
Administrator.
    Approved: March 20, 2009.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).


    Editorial Note: This document was received in the Office of the 
Federal Register on July 15, 2009.

[FR Doc. E9-17177 Filed 7-27-09; 8:45 am]
BILLING CODE 4810-31-P


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