Alcohol and Tobacco Tax and Trade Bureau, Treasury § 25.55

Alcohol and Tobacco Tax and Trade Bureau, Treasury Pt. 25

(a) It contains no more than 0.64 pear is for a purpose other than fla- gram of carbon dioxide per 100 milli- voring, TTB will consider such factors liters of wine; as the labeling and advertising of the (b) It is derived primarily from ap- product. Any written or pictorial ref- ples or pears, or from apple juice con- erence to a material derived from a centrate or pear juice concentrate and fruit other than apple or pear (other water, as described in § 24.332(a); than the inclusion of a wine treating (c) It contains no fruit product or material in an ingredient labeling fruit flavoring other than apple or statement) in the labeling or adver- pear, as described in § 24.332(b) and (c); tising of a wine will be treated as evi- and dence that the wine treating material (d) It contains at least one-half of 1 was added for the purpose of flavoring percent and less than 8.5 percent alco- the wine. hol by volume. (c) Flavorings. Wine is not eligible for (Sec. 335, Pub. L. 114–113, 129 Stat. 3109, as the hard cider tax rate if it contains amended (26 U.S.C. 5041)) any fruit flavoring other than apple or pear. For purposes of this section, a § 24.332 Hard cider materials. fruit flavoring other than apple or pear This section pertains to wine that is is any flavoring that imparts the flavor eligible for the hard cider tax rate as of a fruit other than apple or pear and set out in § 24.331. includes a natural fruit flavor, an arti- (a) Apples and pears. Wine will be con- ficial fruit flavor, and a natural flavor sidered to be derived primarily from that artificially imparts the flavor of a apples or pears, or from apple juice fruit that is not contained in that fla- concentrate or pear juice concentrate vor. In determining whether the use of and water, if the apple juice, pear juice, a flavoring imparts the flavor of a fruit or combination of apple and pear juice, other than apple or pear, TTB will con- or the equivalent amount of consider such factors as the labeling and centrate of apple and/or pear juice re- advertising of the product. Any written constituted to the original brix of the or pictorial reference to a fruit flavor juice prior to concentration, or any other than apple or pear in the labeling combination thereof, represents more or advertising of a wine that contains a than 50 percent of the volume of the flavoring will be treated as evidence finished product. that the wine contains a flavoring that (b) Fruit products. (1) Wine is not eli- imparts a fruit flavor other than apple gible for the hard cider tax rate if it or pear and thus the wine is not eligi- contains any fruit product other than ble for the hard cider tax rate. The use apple or pear. A fruit product is any of spices, honey, hops, or pumpkins as material derived or made from any a flavoring will not make a wine ineli- fruit or part of a fruit, including but gible for the hard cider tax rate. not limited to, concentrates, extracts, juices, powders, or wine spirits. (Sec. 335, Pub. L. 114–113, 129 Stat. 3109, as (2) Notwithstanding the provisions of amended (26 U.S.C. 5041)) § 24.332(b)(1), an authorized wine treating material set forth in § 24.246 that is PART 25—BEER derived from a fruit other than apple or pear may be used in the production of Subpart A—Scope of Regulations wine otherwise eligible for the hard cider tax rate if it is used for a purpose Sec. other than flavoring and it is either 25.1 Production and removal of beer. used in accordance with the wine treat- 25.2 Territorial extent. ing materials provisions of § 24.246 (if 25.3 Forms prescribed. used in a natural wine), or used in 25.4 Related regulations. amounts insufficient to impart a fruit 25.5 OMB control numbers assigned under the Paperwork Reduction Act. flavor other than apple or pear (if used 25.6 Delegations of the Administrator. in a special natural wine or other than standard wine). In determining wheth- Subpart B—Definitions er the use of wine treating materials derived from a fruit other than apple or 25.11 Meaning of terms.

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STANDARDS FOR BEER ALTERNATION OF OPERATIONS 25.15 Materials for the production of beer. 25.81 Alternation of brewery and bonded or taxpaid wine premises. Subpart C—Location and Use of Brewery DISCONTINUANCE OF BUSINESS 25.21 Restrictions on location. 25.85 Notice of permanent discontinuance. 25.22 Continuity of brewery. 25.23 Restrictions on use. Subpart H—Bonds and Consents of Surety 25.24 Storage of beer. 25.25 Operation of a tavern on brewery 25.91 Requirement for bond. premises. 25.92 Consent of surety. 25.93 Penal sum of bond. Subpart D—Construction and Equipment 25.94 Strengthening bonds. 25.95 Superseding bonds and new bonds for CONSTRUCTION existing brewers. 25.31 Brewery buildings. 25.96 Superseding bond. 25.97 Continuation certificate. EQUIPMENT 25.98 Surety or security. 25.35 Tanks. 25.99 Filing powers of attorney. 25.36 Empty container storage. DISAPPROVAL OR TERMINATION OF BONDS OR CONSENTS OF SURETY Subpart E—Measurement of Beer 25.101 Disapproval of bonds or consents of 25.41 Measuring system required. surety. 25.42 Testing of measuring devices. 25.102 Termination of surety’s liability. 25.103 Notice by surety for relief from liabil- Subpart F—Miscellaneous Provisions ity under bond. 25.104 Termination of bonds. 25.51 Right of Entry and Examination. 25.105 Release of collateral security. 25.52 Variations from requirements. 25.106 Application to terminate bond by existing brewer who becomes exempt from SAMPLES bond requirements. 25.53 Submissions of samples of fermented products. Subpart I—Dealer Registration and Recordkeeping FORMULAS 25.111 Definitions. 25.55 Formulas for fermented products. 25.112 Dealer registration. 25.56 Filing of formulas. 25.113 Amending the dealer registration. 25.57 Formula information. 25.114 Dealer records. 25.55 New and superseding formulas. Subpart J—Marks, Brands, and Labels Subpart G—Qualification of a Brewery 25.141 Barrels and kegs. ORIGINAL QUALIFICATION 25.142 Bottles. 25.61 General requirements for notice. 25.143 Cases. 25.62 Data for notice. 25.144 Rebranding barrels and kegs. 25.63 Notice of registration. 25.145 Tanks, vehicles, and vessels. 25.64 Maintenance of notice file. 25.65 Power of attorney. Subpart K—Tax on Beer 25.66 Organizational documents. 25.67 [Reserved] LIABILITY FOR TAX 25.68 Description of brewery. 25.151 Rate of tax. 25.152 Reduced rate of tax for certain brew- CHANGES AFTER ORIGINAL QUALIFICATION ers. 25.71 Amended or superseding notices. 25.153 Persons liable for tax. 25.72 Change in proprietorship. 25.73 Change in partnership. DETERMINATION OF TAX 25.74 Change in stockholders. 25.155 Types of containers. 25.75 Change in officers and directors. 25.156 Determination of tax on keg beer. 25.76 [Reserved] 25.157 Determination of tax on bottled beer. 25.77 Change in location. 25.158 Tax computation for bottled beer. 25.78 Change in premises. 25.159 Time of tax determination and pay- 25.79 Change in bond status. ment; offsets.

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25.160 Tax adjustment for brewers who Subpart M—Beer Returned to Brewery produce more than 2,000,000 barrels of beer. 25.211 Beer returned to brewery. 25.212 Beer returned to brewery from which PREPARATION AND REMITTANCE OF TAX removed. RETURNS 25.213 Beer returned to brewery other than 25.163 Method of tax payment. that from which removed. 25.164 Deferred payment return periods—annual, quarterly, and semimonthly. Subpart N—Voluntary Destruction 25.164a Special September rule for taxes due 25.221 Voluntary destruction of beer. by semimonthly return. 25.222 Notice of brewer. 25.165 Payment of tax by electronic fund 25.223 Destruction of beer off brewery prem- transfer. ises. 25.166 Payment of reduced rate of tax. 25.167 Notice of brewer to pay reduced rate 25.224 Refund or adjustment of tax. of tax. 25.225 Destruction of taxpaid beer which 25.168 Employer identification number. was never removed from brewery prem- 25.169 Application for employer identifica- ises. tion number. Subpart O—Beer Purchased From Another PREPAYMENT OF TAX Brewer 25.173 Brewer in default. 25.231 Finished beer. 25.174 Bond not sufficient. 25.232 Basic permit. 25.175 Prepayment of tax. Subpart P—Cereal Beverage FAILURE TO PAY TAX 25.177 Evasion of or failure to pay tax; fail- 25.241 Production. ure to file a tax return. 25.242 Markings.

Subpart L—Removals Without Payment of Subpart Q—Removal of Brewer’s Yeast and Tax Other Articles

TRANSFER TO ANOTHER BREWERY OF SAME 25.251 Authorized removals. OWNERSHIP 25.252 Records.

25.181 Eligibility. Subpart R—Beer Concentrate 25.182 Kinds of containers. 25.183 Determination of quantity trans- 25.261 General. ferred. 25.262 Restrictions and conditions on proc- 25.184 Losses in transit. esses of concentration and reconstitu- 25.185 Mingling. tion. 25.186 Record of beer transferred. 25.263 Production of concentrate and reconstitution of beer. REMOVAL OF BEER UNFIT FOR BEVERAGE USE 25.264 Transfer between breweries. 25.191 General. 25.192 Removal of sour or damaged beer. Subpart S—Pilot Brewing Plants REMOVALS FOR ANALYSIS, RESEARCH, 25.271 General. DEVELOPMENT OR TESTING 25.272 Application. 25.195 Removals for analysis. 25.273 Action on application. 25.196 Removals for research, development 25.274 Bond. or testing. 25.275 [Reserved] 25.276 Operations and records. REMOVAL OF BEER TO A CONTIGUOUS 25.277 Discontinuance of operations. DISTILLED SPIRITS PLANT 25.201 Removal by pipeline. Subpart T—Refund or Adjustment of Tax or Relief From Liability EXPORTATION 25.281 General. 25.203 Exportation without payment of tax. 25.282 Beer lost by fire, theft, casualty, or act of God. BEER FOR PERSONAL OR FAMILY USE 25.283 Claims for refund of tax. 25.205 Production. 25.284 Adjustment of tax. 25.206 Removal of beer. 25.285 Refund of beer tax excessively paid. 25.207 Removal from brewery for personal or 25.286 Claims for remission of tax on beer family use. lost in transit between breweries.

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Subpart U—Records and Reports Revenue Center, 550 Main Street, Room 1516, Cincinnati, OH 45202. 25.291 Records. 25.292 Daily records of operations. [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986; 51 FR 25.293 Record of ballings and alcohol con- 10540, Mar. 27, 1986, as amended by T.D. 372, tent. 61 FR 20724, May 8, 1996; T.D. ATF–437, 66 FR 25.294 Inventories. 5478, Jan. 19, 2001; T.D. TTB–44, 71 FR 16941, 25.295 Record of unsalable beer. Apr. 4, 2006] 25.296 Record of beer concentrate. 25.297 Report of Operations, Form 5130.9 or § 25.4 Related regulations. Form 5130.26. 25.298 Excise tax return, Form 5000.24. Regulations relating to this part are 25.299 Execution under penalties of perjury. listed below: 25.300 Retention and preservation of 27 CFR Part 7—Labeling and Advertising of records. Malt Beverages. 25.301 Photographic copies of records. 27 CFR Part 28—Exportation of Alcohol. AUTHORITY: 19 U.S.C. 81c; 26 U.S.C. 5002, 27 CFR Part 29—Stills and Miscellaneous 5051–5054, 5056, 5061, 5121, 5122–5124, 5222, 5401– Regulations. 5403, 5411–5417, 5551, 5552, 5555, 5556, 5671, 5673, 31 CFR Part 225—Acceptance of Bonds Se- 5684, 6011, 6061, 6065, 6091, 6109, 6151, 6301, 6302, cured by Government Obligations in Lieu 6311, 6313, 6402, 6651, 6656, 6676, 6806, 7342, 7606, of Bonds with Sureties. 7805; 31 U.S.C. 9301, 9303–9308. [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as SOURCE: T.D. ATF–224, 51 FR 7673, Mar. 5, amended by T.D. ATF–462, 66 FR 42737, Aug. 1986, unless otherwise noted. 15, 2001; T.D. TTB–8, 69 FR 3830, Jan. 27, 2004; T.D. TTB–146, 82 FR 1126, Jan. 4, 2017] EDITORIAL NOTE: Nomenclature changes to part 25 appear by T.D. ATF–437, 66 FR 5478, § 25.5 OMB control numbers assigned 5479, Jan. 19, 2001. under the Paperwork Reduction Act. Subpart A—Scope of Regulations (a) Purpose. This section collects and displays the control numbers assigned § 25.1 Production and removal of beer. to information collection requirements The regulations in this part relate to by the Office of Management and Budg- beer and cereal beverages and cover the et contained in 27 CFR Part 25 under location, construction, equipment, op- the Paperwork Reduction Act of 1980, erations and qualifications of breweries Pub. L. 96–511. and pilot brewing plants. (b) Display, OMB control number 1512– 0045. OMB control number 1512–0045 is § 25.2 Territorial extent. assigned to the following sections in 27 This part applies to the several CFR Part 25: §§ 25.23, 25.25, 25.52, 25.61, States of the United States and the 25.62, 25.64, 25.66, 25.67, 25.68, 25.71, 25.72, District of Columbia. 25.73, 25.74, 25.75, 25.76, 25.77, 25.78, 25.81, 25.85, 25.103, 25.114, 25.141, 25.142, 25.144, § 25.3 Forms prescribed. 25.158, 25.167, 25.184, 25.213, 25.222, 25.225, (a) The appropriate TTB officer is au- 25.272, 25.273, 25.277, 25.282, 25.299. thorized to prescribe all forms required (c) Display, OMB control number 1512– by this part, including bonds, applica- 0052. OMB control number 1512–0052 is tions, notices, reports, returns, and assigned to the following sections in 27 records. All of the information called CFR Part 25: §§ 25.296(b), 25.297. for in each form shall be furnished as (d) Display, OMB control number 1512– indicated by the headings on the form 0079. OMB control number 1512–0079 is and the instructions on or pertaining assigned to the following section in 27 to the form. In addition, information CFR Part 25: § 25.65. called for in each form shall be fur- (e) Display, OMB control number 1512– nished as required by this part. The 0141. OMB control number 1512–0141 is form will be filed in accordance with assigned to the following sections in 27 the instructions for the form. CFR Part 25: §§ 25.281, 25.282, 25.286. (b) Forms prescribed by this part are (f) Display, OMB control number 1512– available for printing through the TTB 0333. OMB control number 1512–0333 is Web site (http://www.ttb.gov) or by mail- assigned to the following sections in 27 ing a request to the Alcohol and To- CFR Part 25: §§ 25.42, 25.142, 25.186, bacco Tax and Trade Bureau, National 25.192, 25.195, 25.196, 25.211, 25.252, 25.264,

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25.276, 25.284, 25.291, 25.292, 25.293, 25.294, Appropriate TTB officer. An officer or 25.295, 25.296(a), 25.300, 25.301. employee of the Alcohol and Tobacco (g) Display, OMB control number 1512– Tax and Trade Bureau (TTB) author- 0457. OMB control number 1512–0457 is ized to perform any functions relating assigned to the following section in 27 to the administration or enforcement CFR Part 25: § 25.165. of this part by TTB Order 1135.25, Dele- (h) Display, OMB control number 1512– gation of the Administrator’s Authori- 0467. OMB control number 1512–0467 is ties in 27 CFR Part 25, Beer. assigned to the following sections in 27 Balling. The percent by weight of dis- CFR Part 25: §§ 25.122, 25.160, 25.163, solved solids at 60 °F. present in wort 25.164, 25.165, 25.166, 25.167, 25.168, 25.175, and beer, usually determined by a ball- 25.224, 25.284, 25.285, 25.298. ing saccharometer. (i) Display, OMB control number 1512– Bank. Any commercial bank. 0472. OMB control number 1512–0472 is Banking day. Any day during which a assigned to the following sections in 27 bank is open to the public for carrying CFR Part 25: §§ 25.111, 25.112, 25.113, on substantially all its banking func- 25.114, 25.117, 25.118, 25.119, 25.121, 25.126, tions. 25.127, 25.131, 25.132, 25.133, 25.134. Barrel. When used as a unit of meas- (j) Display, OMB control number 1512– ure, the quantity equal to 31 U.S. gal- 0478. OMB control number 1512–0478 is lons. When used as a container, a con- assigned to the following sections in 27 sumer package or keg containing a CFR Part 25: §§ 25.24, 25.35, 25.141, 25.142, quantity of beer listed in § 25.156, or 25.143, 25.145, 25.192, 25.196, 25.231, 25.242, other size authorized by the appro- 25.251, 25.263. priate TTB officer. Beer. Beer, ale, porter, stout, and [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986; 51 FR other similar fermented beverages (in- 10540, Mar. 27, 1986; T.D. ATF–268, 53 FR 8628, cluding sake´ and similar products) of Mar. 16, 1988] any name or description containing one-half of one percent or more of alco- § 25.6 Delegations of the Adminis- hol by volume, brewed or produced trator. from malt, wholly or in part, or from The regulatory authorities of the Ad- any substitute for malt. Standards for ministrator contained in this part are the production of beer appear in § 25.15. delegated to appropriate TTB officers. Bonded premises of a distilled spirits These TTB officers are specified in plant. The bonded premises of a dis- TTB Order 1135.25, Delegation of the tilled spirits plant as described in part Administrator’s Authorities in 27 CFR 19 of this chapter. This term includes Part 25, Beer. You may obtain a copy premises described in the preceding of this order by accessing the TTB Web sentence even if the distilled spirits site (http://www.ttb.gov) or by mailing a plant proprietor, as authorized under request to the Alcohol and Tobacco the exemption set forth in § 19.151(d) of Tax and Trade Bureau, National Rev- this chapter, has not provided a bond enue Center, 550 Main Street, Room for the premises. 1516, Cincinnati, OH 45202. Bonded wine premises. Bonded wine [T.D. TTB–44, 71 FR 16941, Apr. 4, 2006] premises established under part 24 of this chapter. This term includes premises described in the preceding sen- Subpart B—Definitions tence even if the proprietor, as authorized under the exemption set forth in § 25.11 Meaning of terms. § 24.146(d) of this chapter, has not pro- When used in this part, where not vided a bond for the premises. otherwise distinctly expressed or mani- Bonded winery. The premises of a festly incompatible with the intent bonded winery as described in part 24 of thereof, terms have the meanings given this chapter. This term includes prem- in this section. ises described in the preceding sen- Administrator. The Administrator, Al- tence even if the proprietor, as author- cohol and Tobacco Tax and Trade Bu- ized under § 24.146(d) of this chapter, reau, Department of the Treasury, has not provided a bond for the prem- Washington, DC. ises.

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Bottle. A bottle, can or similar con- tionship, via the Federal Reserve Com- tainer. munications System (FRCS) or Bottling. The filling of bottles, cans, Fedwire to the Treasury Account at and similar containers. the Federal Reserve Bank of New York. Brewer. Any person who brews beer Executed under penalties of perjury. (except a person who produces only Signed with the prescribed declaration beer exempt from tax under 26 U.S.C. under the penalties of perjury as pro- 5053(e)) and any person who produces vided on or with respect to the return, beer for sale. claim, form, or other document or, Brewery. The land and buildings de- when no form of declaration is prescribed in the Brewer’s Notice, Form scribed, with the declaration: ‘‘I de- 5130.10, where beer is to be produced clare under the penalties of perjury and packaged. that this llllll (insert type of Brewing. The production of beer for document such as statement, report, sale. certificate, application, claim, or other Business day. The 24-hour cycle of op- document), including the documents erations in effect at the brewery and submitted in support thereof, has been described on the Brewer’s Notice, Form examined by me and, to the best of my 5130.10. knowledge and belief, is true, correct Calendar quarter. A 3-month period and complete.’’ during the year as follows: January 1 Fiscal year. The period which begins through March 31; April 1 through June October 1 and ends on the following 30; July 1 through September 30; and September 30. October 1 through December 31. Gallon. The liquid measure con- Cereal beverage. A beverage, produced taining 231 cubic inches. either wholly or in part from malt (or Losses. Known quantities of beer lost a substitute for malt), and either fer- due to breakage, casualty, or other un- mented or unfermented, which con- usual cause. tains, when ready for consumption, less Package. A bottle, can, keg, barrel, or than one-half of 1 percent of alcohol by other original consumer container. volume. Packaging. The filling of any pack- Commercial bank. A bank, whether or age. not a member of the Federal Reserve Person. An individual, trust, estate, System, which has access to the Fed- partnership, association, company, or eral Reserve Communications System corporation. (FRCS) or Fedwire. The ‘‘FRCS’’ or Racking. The filling of kegs or bar- ‘‘Fedwire’’ is a communications net- rels. work that allows Federal Reserve Sys- Removed for consumption or sale. Ex- tem member banks to effect a transfer cept when used with respect to beer re- of funds for their customers (or other moved without payment of tax as au- commercial banks) to the Treasury Ac- thorized by law, (a) the sale and trans- count at the Federal Reserve Bank of fer of possession of beer for consump- New York. tion at the brewery, or (b) any removal Concentrate. Concentrate produced of beer from the brewery. from beer by the removal of water Secretary. The Secretary of the Treas- under the provisions of subpart R of ury or his or her delegate. this part. The processes of concentra- Service center. An Internal Revenue tion of beer and reconstitution of beer Service Center in any of the Internal are considered authorized processes in Revenue regions. the production of beer. Shortage. An unaccounted for discrep- Director of the service center. A Direc- ancy (missing quantity) of beer dis- tor of an Internal Revenue Service Cen- closed by physical inventory. ter. This chapter. Title 27, Code of Federal District Director. A district director of Regulations, Chapter I (27 CFR Chapter internal revenue. I). Electronic fund transfer or EFT. Any Treasury account. The Department of transfer of funds made by a brewer’s the Treasury’s General Account at the commercial bank, either directly or Federal Reserve Bank of New York. through a correspondent banking rela- U.S.C. The United States Code.

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Wort. The product of brewing before fective administration of this part will fermentation which results in beer. be hindered. [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as (Sec. 201, Pub. L. 85–859, 72 Stat. 1389, as amended by T.D. ATF–345, 58 FR 40357, July amended (26 U.S.C. 5402)) 28, 1993; T.D. ATF–437, 66 FR 5478, Jan. 19, 2001; T.D. TTB–21, 70 FR 235, Jan. 3, 2005; T.D. § 25.22 Continuity of brewery. TTB–44, 71 FR 16941, Apr. 4, 2006; T.D. TTB– Brewery premises will be unbroken 91, 76 FR 5478, Feb. 1, 2011; T.D. TTB–146, 82 except that they may be separated by FR 1126, Jan. 4, 2017] public passageways, streets, highways, STANDARDS FOR BEER waterways, carrier rights-of-way, or partitions. If the brewery premises are § 25.15 Materials for the production of separated, the parts will abut on the beer. dividing medium and be adjacent to each other. If the brewer has facilities (a) Beer must be brewed from malt or for loading, or for case packing or stor- from substitutes for malt. Only rice, age which are located within reason- grain of any kind, bran, glucose, sugar, able proximity to the brewery, the ap- and molasses are substitutes for malt. propriate TTB officer may approve In addition, you may also use the fol- these facilities as part of the brewery if lowing materials as adjuncts in fer- the revenue will not be jeopardized. menting beer: honey, fruit, fruit juice, fruit concentrate, herbs, spices, and (Sec. 201, Pub. L. 85–859, 72 Stat. 1389, as amended (26 U.S.C. 5402)) other food materials. (b) You may use flavors and other § 25.23 Restrictions on use. nonbeverage ingredients containing alcohol in producing beer. Flavors and (a) Use of brewery in production of beer or cereal beverage. A brewery may be other nonbeverage ingredients con- used only for the following purposes in- taining alcohol may contribute no volving the production of beer or cereal more than 49% of the overall alcohol beverages: content of the finished beer. For exam- (1) For producing, packaging and ple, a finished beer that contains 5.0% storing beer, cereal beverages, vita- alcohol by volume must derive a min- mins, ice, malt, malt syrup, and other imum of 2.55% alcohol by volume from by-products of the brewing process, or the fermentation of ingredients at the soft drinks and other nonalcoholic bev- brewery and may derive not more than erages; 2.45% alcohol by volume from the addi- (2) For processing spent grain, carbon tion of flavors and other nonbeverage dioxide, and yeast; and ingredients containing alcohol. In the (3) For storing packages and supplies case of beer with an alcohol content of necessary or connected to brewery op- more than 6% by volume, no more than erations. 1.5% of the volume of the beer may (b) Other authorized uses. A brewer consist of alcohol derived from added may use a brewery for other purposes, flavors and other nonbeverage ingredi- not involving the production of beer or ents containing alcohol. cereal beverage, upon approval from the appropriate TTB officer, if the pur- [T.D. TTB–21, 70 FR 235, Jan. 3, 2005] poses: (1) Require the use of by-products or Subpart C—Location and Use of waste from the production of beer; Brewery (2) Utilize buildings, rooms, areas, or equipment not fully employed in the § 25.21 Restrictions on location. production or packaging of beer; A brewery may not be established or (3) Are reasonably necessary to real- operated in any dwelling house or on ize the maximum benefit from the board any vessel or boat, or in any premises and equipment and reduce the building or on any premises where the overhead of the brewery; revenue will be jeopardized or the ef- (4) Are in the public interest because of emergency conditions;

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(5) Involve experiments or research mined may be stored in any suitable lo- projects related to equipment, mate- cation in the brewery. rials, processes, products, by-products, (Sec. 201, Pub. L. 85–859, 72 Stat. 1389, as or waste of the brewery; or amended (26 U.S.C. 5411)) (6) Involve operation of a tavern on [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as brewery premises in accordance with amended by T.D. ATF–268, 53 FR 8628, Mar. § 25.25. 16, 1988; T.D. TTB–25, 70 FR 19883, Apr. 15, (c) Application. Except as provided in 2005; T.D. TTB–79, 74 FR 37404, July 28, 2009] § 25.25 for operation of a tavern on brewery premises, a brewer desiring to § 25.25 Operation of a tavern on brew- use a brewery for other purposes shall ery premises. submit to the appropriate TTB officer , (a) General. A brewer desiring to op- an application listing the purposes. erate a tavern as an alternate use of The appropriate TTB officer will ap- brewery premises, shall submit a Brew- prove the application if the use for er’s Notice, Form 5130.10 containing other purposes will not jeopardize the the information required by paragraph revenue or impede the effective admin- (b) of this section. If the appropriate istration of this part and is not con- TTB officer finds that the operation of trary to specific provisions of law. the tavern on brewery premises will not jeopardize the revenue or impede (Sec. 201, Pub. L. 85–859, 72 Stat. 1389, as the effective administration of this amended (26 U.S.C. 5411)) part and is not contrary to specific pro- [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as visions of law, the approval of the amended by T.D. ATF–268, 53 FR 8628, Mar. Brewer’s Notice, Form 5130.10 shall 16, 1988] constitute approval of the alternate use of brewery premises, in lieu of the § 25.24 Storage of beer. application required by § 25.23. As used (a) Taxpaid beer. Beer of a brewer’s in this section, ‘‘tavern’’ means a por- own production on which the tax has tion of brewery premises where beer is been paid or determined may not be sold to consumers. Food, and/or tax- stored in the brewery, except as pro- paid wine, and/or taxpaid distilled spir- vided in § 25.25 or § 25.213. Beer produced its may also be sold at a tavern oper- by other brewers may be stored at the ated on brewery premises. Taxpaid beer brewery under the following condi- produced by other brewers may be re- tions: ceived, stored and sold on brewery (1) Taxpaid beer will be segregated in premises in accordance with § 25.24. such a manner as to preclude mixing (b) Brewer’s Notice. In preparing the with nontaxpaid beer; Brewer’s Notice, Form 5130.10, the applicant shall show the following infor- (2) If required by Part 1 of this chap- mation, in addition to the information ter, the brewer shall have a wholesalers required by the form: or importers basic permit under the (1) The applicant shall identify the Federal Alcohol Administration Act, portion of the brewery which will be and keep records of the taxpaid beer as operated as a tavern by providing a a wholesaler or importer under part 31 diagram or narrative description of the of this chapter. boundaries of the tavern. The diagram (3) Taxpaid beer may be stored in or description shall identify areas of packages; the brewery which are accessible to the (4) Taxpaid beer may not be re- public and areas which are not. The ap- labeled; plicant shall describe security meas- (5) Taxpaid beer may not be shown on ures to be used to segregate public required brewery records; and areas from non-public areas. (6) The appropriate TTB officer may (2) The applicant shall describe in de- require physical segregation of taxpaid tail the method to be used for meas- beer, or marking to show the status of uring beer for the purposes of tax de- taxpaid beer, if necessary to protect termination. the revenue. (3) The applicant shall identify the (b) Untaxpaid beer. Packaged beer on tanks which will periodically contain which tax has not been paid or deter- tax-determined beer, and any other

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areas where tax-determined beer will use, as a receptacle for wort, beer or be stored. concentrate produced from beer shall: (c) Procedures. The following proce- (a) Be durably marked with a serial dures shall apply to operation of a tav- number and capacity; and ern on brewery premises: (b) Be equipped with a suitable meas- (1) The brewery shall have a suitable uring device. The brewer may provide method for measurement of the beer, meters or other suitable portable de- such as a meter or gauge glass. Tax devices for measuring contents of tanks termination shall consist of the meas- or containers in lieu of providing each urement of the beer and the prepara- tank or container with a measuring de- tion of the brewer’s record of tax deter- vice. mination, required by § 25.292(a)(8). The taxes shall be determined prior to the (Sec. 201, Pub. L. 85–859, 72 Stat. 1395, as amended (26 U.S.C. 5552)) time that the beer is dispensed into a container for consumption. § 25.36 Empty container storage. (2) If the brewer uses one or more tanks for tax determination, the fol- Empty barrels, kegs, bottles, other lowing procedures shall apply: containers, or other supplies stored in (i) Each such tank shall be durably the brewery will be segregated from marked with the words ‘‘tax-deter- filled containers. mination tank’’; (Sec. 201, Pub. L. 85–859, 72 Stat. 1389, as (ii) The taxes shall be determined amended (26 U.S.C. 5411)) each time beer is added to a tax-determination tank; and Subpart E—Measurement of Beer (iii) The brewer may never simulta- neously pump into and out of a tax-de- § 25.41 Measuring system required. termination tank. The brewer shall accurately and reli- (3) A brewer qualified under this sec- ably measure the quantity of beer tion may store, on brewery premises, transferred from the brewery cellars tax-determined beer which is intended for bottling and for racking. The brew- for sale at a tavern operated on brewer may use a measuring device, such as ery premises, in accordance with this a meter or gauge glass, or any other section. The prohibition of § 25.24 shall suitable method. not apply to such tax-determined beer. (4) Beer consumed by employees and (Sec. 201, Pub. L. 85–859, 72 Stat. 1395, as visitors in the brewery’s tavern shall amended (26 U.S.C. 5552)) be beer on which the tax has been paid § 25.42 Testing of measuring devices. or determined. (a) General requirements. If a meas- [T.D. ATF–268, 53 FR 8628, Mar. 16, 1988] uring device such as a meter or gauge glass is used to measure beer, the brew- Subpart D—Construction and er shall periodically test the measuring Equipment device and adjust or repair it, if necessary. The brewer shall keep records CONSTRUCTION of tests available for inspection by appropriate TTB officers. Records of tests § 25.31 Brewery buildings. will include: Brewery buildings shall be arranged (1) Date of test; and constructed to afford adequate pro- (2) Identity of meter or measuring de- tection to the revenue and to facilitate vice; inspection by appropriate TTB officers. (3) Result of test; and (Sec. 201, Pub. L. 85–859, 72 Stat. 1389, as (4) Corrective action taken, if nec- amended (26 U.S.C. 5402)) essary. (b) Requirements for beer meters. The EQUIPMENT allowable variation for beer meters as established by testing may not exceed § 25.35 Tanks. ±0.5 percent. If a meter test discloses Each stationary tank, vat, cask or an error in excess of the allowable vari- other container used, or intended for ation, the brewer shall immediately

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adjust or repair the meter. Adjust- (2) Application. A brewer who pro- ments will reduce the error to as near poses to employ methods of operations zero as practicable. or construction or equipment other (c) Authority to require tests. If the ap- than as provided in this part shall sub- propriate TTB officer has reason to be- mit an application to the appropriate lieve that the accuracy or reliability of TTB officer. The application will de- a measuring device is not being prop- scribe the proposed variation and state erly maintained, he or she may require the need for it. The brewer shall sub- the brewer to test the measuring de- mit drawings or photographs if nec- vice and, if necessary, adjust or repair essary to describe the proposed vari- the measuring device. ation. (Sec. 201, Pub. L. 85–859, 72 Stat. 1395, as (3) Approval by appropriate TTB offi- amended (26 U.S.C. 5552)) cer. The appropriate TTB officer may approve the use of an alternate method Subpart F—Miscellaneous or procedure if: Provisions (i) The brewer shows good cause for its use; § 25.51 Right of Entry and Examina- (ii) It is consistent with the purpose tion. and effect of the procedure prescribed An appropriate TTB officer may by this part and provides equal secu- enter, during normal business hours, a rity to the revenue; brewery or other place where beer is (iii) It is not contrary to law; and stored and may, when the premises are (iv) It will not cause an increase in open at other times, enter those prem- cost to the Government and will not ises in the performance of official du- hinder the effective administration of ties. Appropriate TTB officers may this part. make inspections as the appropriate (4) Exceptions. The appropriate TTB TTB officer deems necessary to deter- officer may not authorize an alternate mine that operations are conducted in method or procedure relating to the compliance with the law and this part. giving of any bond, or to the assess- The owner of any building or place ment, payment, or collection of tax. where beer is produced, made, or kept, (5) Conditions of approval. A brewer or person having charge over such may not employ an alternate method premises, who refuses to admit an ap- or procedure until the appropriate TTB propriate TTB officer acting under 26 officer has approved its use. The brewer U.S.C. 7606, or who refuses to permit an shall, during the terms of the author- appropriate TTB officer to examine ization of an alternate method or pro- beer must, for each refusal, forfeit $500. cedure, comply with the terms of the [T.D. ATF–437, 66 FR 5478, Jan. 19, 2001] approved application. (b) Emergency variations from require- § 25.52 Variations from requirements. ments—(1) Application. When an emer- (a) Exceptions to construction, equip- gency exists, a brewer may apply to ment and methods of operations—(1) Gen- the appropriate TTB officer for a vari- eral. The appropriate TTB officer may ation from the requirements of this approve details of construction, equip- part relating to construction, equipment or methods of operations, in lieu ment, and methods of operation. The of those specified in this part. The brewer shall describe the proposed vari- brewer shall show that it is impracti- ation and set forth the reasons for cable to conform to the prescribed using it. specification, and that the proposed (2) Approval. The appropriate TTB of- variance: ficer may approve an emergency vari- (i) Will afford the protection to the ation from requirements if: revenue intended by the specifications (i) An emergency exists; in this part; (ii) The variation from the require- (ii) Will not hinder the effective ad- ments is necessary; ministration of this part, and (iii) It will afford the same security (iii) Is not contrary to any provision and protection to the revenue as in- of law. tended by the specific regulations;

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(iv) It will not hinder the effective FORMULAS administration of this part; and (v) It is not contrary to law. § 25.55 Formulas for fermented products. (3) Conditions of approval. A brewer may not employ an emergency vari- (a) For what fermented products must a ation from the requirements until the formula be filed? You must file a for- appropriate TTB officer has approved mula for approval by TTB if you intend its use. Approval of variations from re- to produce: quirements are conditioned upon com- (1) Any fermented product that will pliance with the conditions and limita- be treated by any processing, filtra- tions set forth in the approval. tion, or other method of manufacture (c) Automatic termination of approval. that is not generally recognized as a If the brewer fails to comply in good traditional process in the production of faith with the procedures, conditions a fermented beverage designated as or limitations set forth in the ap- ‘‘beer,’’ ‘‘ale,’’ ‘‘porter,’’ ‘‘stout,’’ proval, authority for the variation ‘‘lager,’’ or ‘‘malt liquor.’’ For purposes from requirements is automatically of this paragraph: terminated and the brewer is required (i) Removal of any volume of water to comply with prescribed require- from beer, filtration of beer to substantially change the color, flavor, or char- ments of regulations. acter, separation of beer into different (d) Withdrawal of approval. The appro- components, reverse osmosis, con- priate TTB officer may withdraw ap- centration of beer, and ion exchange proval of an alternate method or proce- treatments are examples of non-tradi- dure, approved under paragraph (a) or tional processes for which you must (b) of this section, if the appropriate file a formula. TTB officer finds that the revenue is (ii) Pasteurization, filtration prior to jeopardized or the effective administra- bottling, filtration in lieu of pasteur- tion of this part is hindered by the ap- ization, centrifuging for clarity, proval. lagering, carbonation, and blending are (Sec. 201, Pub. L. 85–859, 72 Stat. 1395, as examples of traditional processes for amended, 1396, as amended (26 U.S.C. 5552, which you do not need to file a for- 5556)) mula. [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as (iii) If you have questions about amended by T.D. ATF–437, 66 FR 5479, Jan. whether or not use of a particular proc- 19, 2001] ess not listed in this section requires the filing of a formula, you may re- SAMPLES quest a determination from TTB in accordance with paragraph (f) of this sec- SOURCE: Sections 25.53 and 25.55 through tion. 25.58 appear at 70 FR 235, Jan. 3, 2005, unless (2) Any fermented product to which otherwise noted. flavors or other nonbeverage ingredients (other than hop extract) con- § 25.53 Submissions of samples of fer- taining alcohol will be added. mented products. (3) Subject to paragraph (f) of this The appropriate TTB officer may, at section, any fermented product to any time, require you to submit sam- which coloring or natural or artificial ples of: flavors will be added. (a) Cereal beverage, sake´, or any fer- (4) Subject to paragraph (f) of this mented product produced at the brew- section, any fermented product to ery, which fruit, fruit juice, fruit con- (b) Materials used in the production centrate, herbs, spices, honey, maple of cereal beverage, sake´, or any fer- syrup, or other food materials will be mented product; and added. (5) Sake´, including flavored sake´ and (c) Cereal beverage, sake´, or any fer- sparkling sake´. mented product, in conjunction with (b) Are separate formulas required for the filing of a formula. different products? (1) You must file a (26 U.S.C. 5415, 5555, 7805(a)) separate formula for approval for each

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different fermented product for which a (2) You may request a determination formula is required. from TTB on whether or not the use of (2) You may file a formula for a beer a process not listed in paragraph (a)(1) base to be used in the production of one of this section will require the filing of or more other fermented products. The a formula or whether the use of a par- beer base must conform to the stand- ticular coloring, flavoring or food ma- ards set forth in § 25.15. terial may be exempted from the for- (c) When must I file a formula? (1) Ex- mula filing requirement of paragraph cept as provided in paragraph (c)(2) of (a)(3) or paragraph (a)(4) of this sec- this section, you may not produce a tion. You should mail your request to fermented product for which a formula the Assistant Chief, Advertising, La- is required until you have filed and re- beling and Formulation Division, Alco- ceived approval of a formula for that hol and Tobacco Tax and Trade Bu- product. reau, 1310 G Street, NW., Washington, (2) You may, for research and devel- DC 20220. opment purposes (including consumer (i) When requesting a determination taste testing), produce a fermented as to whether a process is subject to product without an approved formula, the formula filing and approval re- but you may not sell or market this quirement, the request must include: product until you receive approval of (A) A detailed description of the pro- the formula for it. (d) How long is my formula approval posed process; valid? Your formula approved under (B) Evidence establishing that the this section remains in effect until: proposed process is generally recog- you supersede it with a new formula; nized as a traditional process in the you voluntarily surrender the formula; production of a fermented beverage TTB cancels or revokes the formula; or designated as ‘‘beer,’’ ‘‘ale,’’ ‘‘porter,’’ the formula is revoked by operation of ‘‘stout,’’ ‘‘lager,’’ or ‘‘malt liquor’’; and law or regulation. (C) An explanation of the effect of (e) Are my previously approved state- the proposed process on the production ments of process valid? Your statements of a fermented product. of process approved before January 3, (ii) When requesting an exemption 2006 are considered approved formulas from the formula filing requirement in under this section, provided that any paragraph (a)(3) or paragraph (a)(4) of finished product that could be made this section regarding coloring, fla- under the statement of process would voring, or food material ingredients, be in compliance with the provisions of the request must include the following this part. You do not need to submit a information: formula for approval if a statement of (A) A description of the proposed in- process that remains valid covers the gredient; product. (B) Evidence establishing that the (f) Determinations by TTB regarding proposed ingredient is generally recog- specific processes and ingredients. (1) The nized as a traditional ingredient in the appropriate TTB officer may determine production of a fermented beverage whether or not use of a process not designated as ‘‘beer,’’ ‘‘ale,’’ ‘‘porter,’’ listed in paragraph (a)(1) of this section ‘‘stout,’’ ‘‘lager,’’ or ‘‘malt liquor’’; and requires you to file a formula for ap- (C) An explanation of the effect of proval. The appropriate TTB officer the proposed ingredient in the produc- may also exempt the use of a particular coloring, flavoring, or food mation of a fermented product. terial from the formula filing require- § 25.56 Filing of formulas. ment of paragraph (a)(3) or paragraph (a)(4) of this section upon a finding (a) What are the general requirements that the coloring, flavoring, or food for filing a formula? (1) You must file material in question is generally recog- your formula in writing. Your formula nized as a traditional ingredient in the must identify each brewery where the production of a fermented beverage formula applies by including each designated as ‘‘beer,’’ ‘‘ale,’’ ‘‘porter,’’ brewery name, address, and registry ‘‘stout,’’ ‘‘lager,’’ or ‘‘malt liquor.’’ number.

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(2) You must serially number each (b) Process information. For each for- formula, commencing with ‘‘1’’ and mula you must describe in detail each continuing in numerical sequence. process used to produce a fermented (3) You must date and sign each for- beverage. mula. (c) Alcohol content. For each formula (4) You must file two copies of each you must state the alcohol content of formula with TTB. the fermented product after fermenta- (b) Where do I file a formula? File your tion and the alcohol content of the fin- formula with the Assistant Chief, Ad- ished product. vertising, Labeling and Formulation (d) Beer base formulas. You must refer Division, Alcohol and Tobacco Tax and in your formula to any approved for- Trade Bureau, 1310 G Street, NW., mula number that covers the produc- Washington, DC 20220. tion of any beer base used in producing the formula product. If the beer base (26 U.S.C. 5401, 7805) was produced by another brewery of § 25.57 Formula information. the same ownership, you must also provide the name and address or name and (a) Ingredient information. (1) For each registry number of that brewery. formula you must list each separate in- (e) Additional information. The appro- gredient and the specific quantity used, priate TTB officer may at any time re- or a range of quantities used. You may quire you to file additional informa- include optional ingredients in a for- tion concerning a fermented product, mula if they do not impact the labeling ingredients, or processes, in order to or identity of the finished product. determine whether a formula should be (2) For fermented products con- approved or disapproved or whether the taining flavorings you must list for approval of a formula should be contin- each formula: The name of the flavor; ued. the product number or TTB drawback number and approval date of the flavor; (26 U.S.C. 5415, 5555, 7805(a)) the name and location (city and State) of the flavor manufacturer; the alcohol § 25.58 New and superseding formulas. content of the flavor; and the point of (a) New formulas. Except as otherwise production at which the flavor was provided in paragraph (b) of this sec- added (that is, before, during, or after tion, you must file a new formula (with fermentation). a new formula number) for approval by (3) For formulas that include the use TTB if you— of flavors and other nonbeverage ingre- (1) Create an entirely new fermented dients containing alcohol, you must ex- product that requires a formula; plicitly indicate: (2) Add new ingredients to an exist- (i) The volume and alcohol content of ing formulation; the beer base; (3) Delete ingredients from an exist- (ii) The maximum volumes of the fla- ing formulation; vors and other nonbeverage ingredients (4) Change the quantity of an ingre- containing alcohol to be used; dient used from the quantity or range (iii) The alcoholic strength of the fla- of usage in an approved formula; vors and other nonbeverage ingredients (5) Change an approved processing, containing alcohol; filtration, or other special method of (iv) The overall alcohol contribution manufacture that requires the filing of to the finished product provided by the a formula; or addition of any flavors or other non- (6) Change the contribution of alco- beverage ingredients containing alcohol from flavors or ingredients that hol. You are not required to list the al- contain alcohol. cohol contribution of individual flavors (b) Superseding formulas. You may file and other nonbeverage ingredients con- a superseding formula, instead of a new taining alcohol. You may state the formula, if you have made any change total alcohol contribution from these listed in paragraphs (a)(2) through ingredients to the finished product; and (a)(6) of this section and that change is (v) The final volume and alcohol con- not of a type that would require a hold- tent of the finished product. er of a certificate of label approval to

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file a new application for label ap- which is necessary to protect and in- proval on TTB Form 5100.31. sure collection of the revenue. (1) A superseding formula replaces an (Sec. 201, Pub. L. 85–859, 72 Stat. 1388, as existing formula, and you should file amended (26 U.S.C. 5401)) one only if you do not intend to use the [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as existing formula any more. A super- amended by T.D. ATF–437, 66 FR 5479, Jan. seding formula must be filed with TTB 19, 2001] for approval. When TTB approves a superseding formula, TTB will cancel § 25.62 Data for notice. your previous formula. (a) Required information. The brewer (2) You may use the same formula shall prepare the notice on Form number for a superseding formula that 5130.10 and shall include the following you used for the formula the super- information: seding formula replaces, but you must (1) Serial number. annotate the formula number to indi- (2) Purpose for which filed. cate it is a superseding formula num- (3) Name and principal business address of the brewer and the location of ber. (For example, ‘‘Formula 2, super- the brewery if different from the busi- seding.’’) ness address. (c) When you file a new or super- (4) Statement of the type of business seding formula with TTB, you must organization and of the persons inter- follow the procedures and other re- ested in the business, supported by the quirements of §§ 25.56 and 25.57. information listed in § 25.66. (5) Description of brewery, as speci- Subpart G—Qualification of a fied in § 25.68. Brewery (6) A list of trade names which the brewer intends to use in doing business ORIGINAL QUALIFICATION or in packaging beer. (7) [Reserved] § 25.61 General requirements for no- (8) The name and address of the tice. owner of the land or buildings comprising the brewery, and of any mort- (a) Establishment. Operations as a gagee or other encumbrancer of the brewer may be conducted only by a land or buildings comprising the brew- person who has given notice as a brewery. er under this subpart. A person may (9) The 24-hour cycle of operations at not commence the business of a brewer the brewery which is to be the brewer’s until the appropriate TTB officer ap- business day. proves the brewery and the brewer’s (10) The process by which the brewer notice, including all documents made intends to render beer unfit for bev- part of that notice. erage use when beer is to be removed (b) Brewer’s Notice, Form 5130.10. Each for use in manufacturing under person must, before commencing busi- §§ 25.191–25.192. ness as a brewer, give notice on Form (11) Statement showing ownership or 5130.10. Each person continuing busi- controlling interests in other breweries ness as a brewer as provided in § 25.71 which will establish eligibility for the must give notice on Form 5130.10. Each transfer of beer without payment of notice will be executed under penalties tax between breweries of the same own- of perjury, and all written statements, ership, as authorized in § 25.181. affidavits, and other documents sub- (12) The date of the notice and the mitted in support of the notice will be name and signature of the brewer or person authorized to sign on behalf of made part of the notice. the brewer. (c) Additional information. The appro- (13) A statement whether the brewer priate TTB officer may at any time re- is required to furnish a bond under quire the brewer to furnish, as part of § 25.91. the notice, additional information (b) Incorporation by reference. If any of the information required by paragraph (a)(4) of this section is on file with a

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TTB office in connection with the qual- (2) List of directors and officers, ification of any other premises oper- showing their names and addresses; ated by the brewer, that information, if (3) Extracts or digests of minutes of accurate and complete, may be incor- meetings of board of directors, author- porated into the brewer’s notice by ref- izing certain individuals to sign for the erence. corporation; and (Sec. 201, Pub. L. 85–859, 72 Stat. 1388, as (4) Statement showing the number of amended (26 U.S.C. 5401)) shares of stock or other evidence of ownership, authorized and outstanding, [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. TTB–21, 70 FR 237, Jan. 3, and the voting rights of the respective 2005; T.D. TTB–91, 76 FR 5478, Feb. 1, 2011; owners or holders. T.D. TTB–146, 82 FR 1127, Jan. 4, 2017] (b) Articles of partnership. Copy of the articles of partnership or association, § 25.63 Notice of registration. if any, or certificate of partnership or The Brewer’s Notice, Form 5130.10, association if required to be filed by when approved by the appropriate TTB any State, county, or municipality. officer, will constitute the notice of (c) Statement of interest. (1) Names and registration of the brewery. The appro- addresses of all persons having 10 per- priate TTB officer will not approve the cent or more stock in the corporation, notice until the notice and all incor- or other legal entity, and the nature porated documents are complete, accu- and amount of the stockholding or rate, and in compliance with the re- other interest of each, whether the in- quirements of this part. A person may terest appears in the name of the inter- not operate a brewery until the notice ested party or in the name of another required by this subpart has been ap- person. If a corporation is wholly proved by the appropriate TTB officer. owned or controlled by another corporation, those persons of the parent (Sec. 201, Pub. L. 85–859, 72 Stat. 1388, as corporation who meet the above stand- amended (26 U.S.C. 5401)) ards are considered to be the persons § 25.64 Maintenance of notice file. interested in the business of the subsidiary, and the names thereof need be The brewer shall maintain the ap- furnished only upon request of the approved Brewer’s Notice, Form 5130.10, propriate TTB officer; or and all incorporated documents at the (2) In the case of an individual owner brewery premises, in complete and cur- or partnership, the name and address of rent condition, readily available for in- each person holding an interest in the spection by an appropriate TTB officer. brewery, whether the interest appears (Sec. 201, Pub. L. 85–859, 72 Stat. 1388, as in the name of the interested party or amended (26 U.S.C. 5401)) in the name of another for that person. (d) Availability of additional corporate § 25.65 Power of attorney. documents. The originals of documents The brewer shall execute and file a required to be submitted under this Form 1534 (5000.8) for each person au- section, and additional documents such thorized to sign or act on behalf of the as the articles of incorporation, by- brewer. The Form 1534 (5000.8) is not re- laws, and State certificates authorizing quired for persons whose authority is the brewer to operate in the State furnished in the Brewer’s Notice, Form where located (if other than the State 5130.10. in which the brewery is incorporated) (Sec. 201, Pub. L. 85–859, 72 Stat. 1388, as shall be made available to any appro- amended (26 U.S.C. 5401)) priate TTB officer upon request. In the case of multiplant brewers, these docu- § 25.66 Organizational documents. ments may be made available at the The supporting information required brewer’s home brewery. Each brewer’s by paragraph (a)(4) of § 25.62 includes, notice filed by multiplant brewers will as applicable, the following: state the location where these cor- (a) Corporate documents. (1) Corporate porate documents may be inspected. charter or a certificate of corporate ex- (Sec. 201, Pub. L. 85–859, 72 Stat. 1388, as istence or incorporation; amended (26 U.S.C. 5401))

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§ 25.67 [Reserved] § 25.72 Change in proprietorship. (a) General. If there is a change in the § 25.68 Description of brewery. proprietorship of a brewery, the out- (a) The Brewer’s Notice, Form going brewer shall comply with the re- 5130.10, will include a description of (1) quirements of § 25.85. The successor each tract of land comprising the brew- brewer shall, before beginning oper- ery, and (2) a listing of each brewery ations, qualify in the same manner as building by its designated letter or the proprietor of a new brewery. The number, giving the approximate successor brewer shall file a new notice ground dimensions and the purpose for and bond in his or her own name, ex- which ordinarily used. cept that the successor brewer is not (b) The description of the land will be required to file a bond if the brewer is in sufficient detail to enable appro- exempt from bond requirements under priate TTB officers to determine the § 25.91(e). Beer on hand may be trans- boundaries of the brewery. ferred without payment of tax to the (Sec. 201, Pub. L. 85–859, 72 Stat. 1388, as successor brewer and will be accounted amended (26 U.S.C. 5401)) for by that brewer. (b) Fiduciary. (1) If the successor to CHANGES AFTER ORIGINAL the brewer is an administrator, execu- QUALIFICATION tor, receiver, trustee, assignee or other fiduciary, the fiduciary may in lieu of § 25.71 Amended or superseding notices. filing a new notice and bond, file an amended notice and furnish a consent (a) Requirement for amended notice. (1) of surety extending the terms of the When there is a change with respect to predecessor’s bond or continuation cer- the information shown in the Brewer’s tificate. A fiduciary is not required to Notice, Form 5130.10, the brewer shall furnish a consent of surety under this within 30 days of the change (except as paragraph if the brewer is exempt from otherwise provided in this subpart) bond requirements under § 25.91(e). submit an amended notice setting forth (2) The fiduciary shall furnish the ap- the new information. Changed notices propriate TTB officer a certified copy will be submitted in skeleton form, of the court order or other document with unchanged items marked ‘‘No showing qualification as fiduciary. The change since Form 5130.10, Serial No. effective date of the qualifying docu- lll.’’ (2) The appropriate TTB officer may ments filed by a fiduciary will be the require immediate filing of an amended same as the date of the order, or the Form 5130.10 if the accuracy of existing date therein specified for the fiduciary documents has been affected by any to assume control. If the fiduciary was change. not appointed by the court, the date of (b) Requirement for superseding notice. the appointment will be the effective (1) The appropriate TTB officer may re- date of the qualifying documents filed quire a brewer to file a new and com- by the fiduciary. plete notice, superseding those pre- (Sec. 201, Pub. L. 85–859, 72 Stat. 1388, as viously filed, in conjunction with the amended (26 U.S.C. 5401)) filing of a new bond. This superseding [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as notice will become effective on the amended by T.D. TTB–146, 82 FR 1127, Jan. 4, date of the brewer’s bond or on the 2017] date of the brewer’s bond continuation certificate. § 25.73 Change in partnership. (2) If the information required by (a) New notice required. The with- § 25.62(a) (4), (5), (6), (7), (9), and (10) is drawal of one or more members of a on file as part of an approved Form partnership or the taking in of a new 5130.10 and is current, the brewer may partner, whether active or silent, con- incorporate by reference those docu- stitutes a change in proprietorship. Un- ments as part of any superseding no- less exempted by paragraph (b) of this tice. section, the death, bankruptcy or adju- (Sec. 201, Pub. L. 85–859, 72 Stat. 1388, as dicated insolvency of one or more part- amended (26 U.S.C. 5401)) ners results in a dissolution of the

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partnership and a change in proprietor- § 25.75 Change in officers and direc- ship. The successor shall qualify the tors. brewery in the same manner as the When there is any change in the list proprietor of a new brewery. of officers or directors furnished under (b) Continuing partnership. A sur- the provisions of § 25.66(a)(4), the brew- viving partner or partners may con- er shall submit, within 30 days of the tinue to operate the brewery for pur- change, an amended notice on Form poses of liquidation and settlement 5130.10. If the brewer has shown to the under the following conditions: satisfaction of the appropriate TTB of- (1) Under the laws of the State where ficer that certain corporate officers the partnership was formed, the part- listed on the original notice have no re- nership is not terminated on death or sponsibilities in connection with the insolvency of a partner(s); and operations covered by the notice, the (2) Under the laws of the State where appropriate TTB officer may waive the the partnership was formed, the sur- requirements for submitting applica- viving partner(s) has the exclusive tions for amended notice to cover right to control and possession of the changes of those corporate officers. In partnership assets for the purpose of the case of multiplant brewers, new liquidation and settlement; and brewers notices need not be filed for (3) If the brewer has filed a bond, a those breweries in which the lists of of- consent of surety is filed in which the ficers and directors are incorporated by surety and the surviving partner(s) reference in their brewer’s notices agree to remain liable on the bond. under § 25.62(b). (c) Settlement of partnership. If the (Sec. 201, Pub. L. 85–859, 72 Stat. 1388, as surviving partner(s) acquires the busi- amended (26 U.S.C. 5401)) ness on completion of the settlement of the partnership, that partner(s) must § 25.76 [Reserved] qualify in his or her own name from the date of acquisition. The partner(s) § 25.77 Change in location. must give a new brewer’s notice on When there is a change in the loca- Form 5130.10 and a new bond on Form tion of the brewery, the brewer shall 5130.22, except that the partner(s) is not file an amended Form 5130.10, and a required to file a bond if the brewer is new bond, Form 5130.22, or a consent of exempt from bond requirements under surety, Form 5000.18, as required under § 25.91(e). § 25.91, extending the terms of the bond or continuation certificate to cover op- (Sec. 201, Pub. L. 85–859, 72 Stat. 1388, as erations at the new location. The brew- amended (26 U.S.C. 5401)) er is not required to file a new bond or [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986; 51 FR consent of surety if the brewer is ex- 10540, Mar. 27, 1986; T.D. TTB–146, 82 FR 1127, empt from bond requirements under Jan. 4, 2017] § 25.91(e). § 25.74 Change in stockholders. (Sec. 201, Pub. L. 85–859, 72 Stat. 1388, as Changes in the list of stockholders amended (26 U.S.C. 5401)) furnished under the provisions of [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as § 25.66(c)(1) shall be submitted annually amended by T.D. TTB–146, 82 FR 1127, Jan. 4, by the brewer on July 1 or on any other 2017] date approved by the appropriate TTB § 25.78 Change in premises. officer. When the sale or transfer of capital stock results in a change in the Except as authorized in § 25.81, when control or management of the business, the brewery is to be extended or cur- notification of the change will be made tailed, the brewer shall file an amended within 30 days in accordance with Form 5130.10. The additional facilities § 25.71. covered by the extension may not be used for the proposed purposes, and the (Sec. 201, Pub. L. 85–859, 72 Stat. 1388, as portion to be curtailed may not be used amended (26 U.S.C. 5401)) for other than the previously approved

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purposes, prior to approval of Form and hour of the alternation, the brewer 5130.10 shall (Sec. 201, Pub. L. 85–859, 72 Stat. 1388, as (1) Remove all beer on brewery prem- amended (26 U.S.C. 5401)) ises to be alternated to bonded or taxpaid wine premises, or § 25.79 Change in bond status. (2) Remove all wine from bonded to A brewer must file an amended Brew- taxpaid wine premises to be alternated er’s Notice, Form 5130.10, if the brew- to brewery premises. er’s bond status changes because ei- (d) Information for notice. The notice ther: required by paragraph (c) of this sec- (a) A brewer has not furnished any tion will contain the following infor- bond and has become required to fur- mation: nish a bond as provided under § 25.95(b); (1) Plant name and address; or (2) Serial number; (b) A brewer has furnished a bond, (3) Effective date and hour of pro- has become exempt from bond require- posed change; ments under § 25.91(e), and chooses to terminate all bond coverage as pro- (4) Whether premises are to be cur- vided under § 25.106. tailed or extended; (5) Purpose of curtailment or exten- [T.D. TTB–146, 82 FR 1127, Jan. 4, 2017] sion; ALTERNATION OF OPERATIONS (6) Identification of the special diagram depicting the premises as they § 25.81 Alternation of brewery and exist when curtailed or extended; and bonded or taxpaid wine premises. (7) Date of execution and signature of (a) General. A brewer operating a con- brewer. tiguous bonded winery or taxpaid wine (e) Separation of premises. The appro- bottling house may, as provided in this priate TTB officer may require that section, alternate the use of each prem- the portion of brewery or bonded or ises by extension or curtailment. taxpaid wine premises extended or cur- (b) Qualifying documents. The brewer tailed under this section be separated, shall file and receive approval of the in a manner satisfactory to the appro- following qualifying documents: priate TTB officer, from the remaining (1) Form 5120.25 and Form 5130.10 to portion of the brewery or bonded or cover the curtailment and extension of taxpaid premises. the premises to be alternated. (2) Special diagrams, in duplicate, de- (Sec. 201, Pub. L. 85–859, 72 Stat. 1388, as lineating the brewery premises and the amended, 1389, as amended, 1390, as amended bonded or taxpaid wine premises as (26 U.S.C. 5401, 5411, 5415)) they will exist both during extension [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986; 51 FR and curtailment. The diagrams will 9190, Mar. 18, 1986, as amended by T.D. ATF– clearly depict all areas, buildings, 299, 55 FR 24989, June 19, 1990; TD TTB–146, 82 floors, rooms, equipment and pipelines FR 1127, Jan. 4, 2017] which are to be subject to alternation in their relative operating sequence. DISCONTINUANCE OF BUSINESS (3) Evidence of existing bond, consent of surety, continuation certificate, or a § 25.85 Notice of permanent discontinuance. new bond to cover the proposed alternation of premises, except to the ex- When a brewer desires to discontinue tent no bond is required under § 24.146 business permanently, he or she must of this chapter or § 25.91(e). file a notice on Form 5130.10. The brew- (c) Brewer’s responsibility. After ap- er must state the purpose of the notice proval of qualifying documents, the as ‘‘Discontinuance of business’’ and brewer may alternate the designated give the date of the discontinuance. premises pursuant to a letterhead no- When all beer has been lawfully dis- tice submitted to the appropriate TTB posed of, appropriate TTB officer will officer. The notice will contain the in- approve the Form 5130.10 and return a formation required by paragraph (d) of copy to the brewer. The brewer shall this section. Prior to the effective date file a report on Form 5130.9 showing no

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beer or cereal beverage on hand and bond, continuation certificate, or con- marked ‘‘Final Report.’’ sent of surety, as required by this part. (e) Bond exemption. A brewer who (Sec. 201, Pub. L. 85–859, 72 Stat. 1388, as pays tax on a deferred basis under amended (26 U.S.C. 5401)) § 25.164 is not required to provide a [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as bond to cover operations and with- amended by T.D. ATF–437, 66 FR 5479, Jan. drawals of beer during any portion of a 19, 2001] calendar year for which the brewer is eligible to use an annual or quarterly Subpart H—Bonds and Consents return period under § 25.164(c)(2) or of Surety (c)(3). A brewer is considered to be paying tax on a deferred basis for purposes § 25.91 Requirement for bond. of the preceding sentence even if the (a) General. Except as provided in brewer does not pay tax during every paragraph (e) of this section, every per- return period as long as the brewer in- son intending to commence the busi- tends to pay tax in a future period. See ness of a brewer shall file a bond, Form §§ 25.62 and 25.79 for rules governing ap- 5130.22, as prescribed in this subpart, plying for this bond exemption. See covering operations at the brewery, at § 25.95 for rules governing when an ex- the time of filing the original Brewer’s isting brewer who has not provided a bond under this paragraph must obtain Notice, Form 5130.10. Every brewer in- bond coverage. tending to continue the business of a brewer shall, once every 4 years, or as (Sec. 201, Pub. L. 85–859, 72 Stat. 1388, as provided in § 25.95, execute and file a amended (26 U.S.C. 5401); sec. 4(a), Pub. L. 91– new bond, or continuation certificate 673, 84 Stat. 2057 (26 U.S.C. 5417)) as provided in § 25.97. [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as (b) Conditions of the bond. The Brew- amended by T.D. ATF–437, 66 FR 5479, Jan. er’s Bond, Form 5130.22, will be condi- 19, 2001; T.D. TTB–146, 82 FR 1127, Jan. 4, tioned upon the brewer faithfully com- 2017] plying with all provisions of law and § 25.92 Consent of surety. regulations relating to the activities covered by the bond, and upon paying A brewer may change the terms of all taxes imposed by 26 U.S.C. Chapter any bond filed under this part by filing 51 and all interest and penalties in- a consent of surety. Consents of surety curred or fines imposed for violations will be executed on Form 5000.18 by the of those provisions. brewer and the surety on the bond, (c) Additional information. The appro- with the same formality and proof of priate TTB officer shall require, in con- authorization as required for the exe- nection with any brewer’s bond, a cution of a bond. statement executed under the penalties (Sec. 201, Pub. L. 85–859, 72 Stat. 1388, as of perjury, as to whether the principal amended (26 U.S.C. 5401)) or any person owning, controlling, or [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as actively participating in the manage- amended by T.D. TTB–146, 82 FR 1127, Jan. 4, ment of the business of the principal 2017] has been convicted of or has compromised any offense set forth in § 25.93 Penal sum of bond. § 25.101(a)(1), or has been convicted of (a) General. Except as provided in any offense set forth in § 25.101(a)(2). In paragraph (a)(3) of this section, a brew- the event the above statement contains er must furnish a bond of a penal sum an affirmative answer, the applicant as prescribed in this section. shall submit a statement describing in (1) Brewers who pay taxes using semi- detail the circumstances surrounding monthly periods. In the case of a brewer the conviction or compromise. who pays taxes using semimonthly re- (d) Bond required before beginning busi- turn periods under § 25.164(c)(1), the ness. A person may not begin business penal sum of the brewers bond must be or continue business as a brewer until equal to 10 percent of the maximum first receiving notice that the appro- amount of tax calculated at the rates priate TTB officer has approved the prescribed by law which the brewer will

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become liable to pay during a calendar § 25.94 Strengthening bonds. year during the period of the bond on (a) Requirement. When the penal sum beer: of the brewer’s bond (calculated as pro- (i) Removed for transfer to the brew- vided in § 25.93) in effect is not suffi- ery from other breweries owned by the cient, the principal may prepay the tax same brewer; on beer as provided in subpart K of this (ii) Removed without payment of tax part, or give a strengthening bond in for export or for use as supplies on ves- sufficient penal sum if the surety is the sels and aircraft; same as on the bond in effect. If the (iii) Removed without payment of tax surety is not the same, a new bond cov- for use in research, development, or ering the entire liability is required. testing; and (b) Restrictions. A strengthening bond (iv) Removed for consumption or may not in any way release a former sale. bond or limit a bond to less than the (2) Brewers who pay taxes using quar- full penal sum. terly or annual return periods. In the (c) Date of execution. Strengthening case of a brewer who pays taxes using bonds will show the current date of annual or quarterly return periods execution and their effective date. under § 25.164(c)(2) or (c)(3), the penal (Sec. 201, Pub. L. 85–859, 72 Stat. 1388, as sum of the brewers bond is $1,000 and amended (26 U.S.C. 5401)) covers the beer described in paragraph (a)(1)(i)–(iv) of this section. § 25.95 Superseding bonds and new (3) Brewers who are exempt from bond bonds for existing brewers. requirements. This section does not (a) Superseding bonds. The appro- apply to a brewer who is exempt from priate TTB officer may at any time, at bond requirements under § 25.91(e). his or her discretion, require a new (b) Concentrate. A brewer who con- bond that supersedes the existing bond. centrates beer under subpart R of this A superseding bond is required imme- part shall calculate the penal sum of diately in the case of insolvency of a the bond by computing 10 percent of surety. Executors, administrators, as- the amount of tax at the rates pre- signees, receivers, trustees, or other scribed by law, on the maximum quan- persons acting in a fiduciary capacity tity of beer used in the production of must execute a superseding bond or ob- concentrate during a calendar year. tain a consent of surety on all bonds in The brewer shall add this amount to effect. When the interests of the Gov- the penal sum calculated under para- ernment so demand, or in any case graph (a) of this section to determine when the security of the bond becomes the total penal sum of the brewer’s impaired for any reason, the principal bond. will be required to give a superseding bond. When a bond is found to be not (c) Maximum and minimum penal sums. acceptable by the appropriate TTB offi- The maximum penal sum of the bond cer, the principal will be required im- (or total penal sum if original and mediately to obtain a satisfactory su- strengthening bonds are filed) is not to perseding bond or discontinue business. exceed $150,000 when the tax on beer is (b) New bonds for existing brewers—(1) to be prepaid, or $500,000 when the tax General. Subject to paragraph (b)(2) of is to be deferred as provided in § 25.164. this section, if an existing brewer has The minimum penal sum of a bond is not furnished a bond covering oper- $1,000. ations and withdrawals of beer because (Sec. 201, Pub. L. 85–859, 72 Stat. 1388, as the brewer was exempt from bond re- amended (26 U.S.C. 5401)) quirements under § 25.91(e), the brewer must furnish a bond as provided in this [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as subpart beginning in any portion of a amended by T.D. TTB–41, 71 FR 5603, Feb. 2, 2006; T.D. TTB–89, 76 FR 3511, Jan. 20, 2011; calendar year following the first date T.D. TTB–94, 76 FR 52862, Aug. 24, 2011; T.D. on which the aggregate amount of tax TTB–109, 77 FR 72941, Dec. 7, 2012; T.D. TTB– due from the brewer during the cal- 123, 79 FR 58679, Sept. 30, 2014; T.D. TTB–146, endar year exceeds $50,000. When fur- 82 FR 1127, Jan. 4, 2017] nishing the bond, the brewer must also

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file an amended Brewer’s Notice, Form attesting to continuation of the bond. 5130.10, as provided in § 25.79 to change Each continuation certificate will con- the brewer’s bond status. stitute a bond and all provisions of law (2) Grace period for new bonds for exist- and regulations applicable to bonds on ing brewers—(i) Bonds covering oper- Form 5130.22 given under this part, in- ations. Except as provided in paragraph cluding the disapproval of bonds, are (b)(2)(ii) of this section, an existing applicable to continuation certificates. brewer who must furnish a bond as pro- (Sec. 201, Pub. L. 85–859, 72 Stat. 1388, as vided in paragraph (b)(1) of this section amended (26 U.S.C. 5401)) will be treated as having furnished the required bond if the brewer submits the § 25.98 Surety or security. bond on Form 5130.22 no later than 30 days following the first date on which (a) Bond coverage. Bonds required by the aggregate amount of tax due from this part will be given with corporate the brewer during the relevant cal- surety or collateral security. endar year exceeds $50,000. Except as (b) Corporate surety. Surety bonds provided in paragraph (b)(2)(ii) of this may be given only with surety compa- section, the brewer will be treated as nies holding certificates of authority having furnished the required bond for from the Secretary as acceptable sure- the purposes of this paragraph until ties on Federal bonds, subject to the TTB approves or disapproves the bond. limitations set forth in the current re- (ii) Bonds covering tax-deferred remov- vision of Treasury Department Cir- als. The grace period specified in para- cular 570, Companies Holding Certifi- graph (b)(2)(i) of this section does not cates of Authority as Acceptable Sure- apply to beer removed for consumption ties on Federal Bonds and as Accept- or sale on deferred payment of tax. A able Reinsuring Companies. brewer that must furnish a bond under (c) Availability of Circular 570. Depart- paragraph (b)(1) of this section may not ment of the Treasury Circular 570 is remove beer for consumption or sale on published in the FEDERAL REGISTER an- deferred payment of tax until TTB ap- nually on the first business day in proves the bond. July, and supplemental changes are published periodically thereafter. The (Sec. 201, Pub. L. 85–859, 72 Stat. 1388, as most recent circular and any supple- amended (26 U.S.C. 5401)) mental changes to it may be viewed on [T.D. TTB–146, 82 FR 1128, Jan. 4, 2017] the Bureau of the Fiscal Service Web site at https://www.fiscal.treasury.gov/ § 25.96 Superseding bond. fsreports/ref/suretyBnd/c570.htm. When the principal submits a new (d) More than one corporate surety. A bond to supersede a bond or bonds in bond may be executed by two or more effect, the appropriate TTB officer, corporate sureties. Each corporate sur- after approving the superseding bond, ety may limit its liability in terms on will issue a notice of termination for the face of the bond in a specified the superseded bond under the provi- amount. This amount may not exceed sions of this subpart. Superseding the limitations set forth for corporate bonds will show the current date of security by the Secretary which are set execution and their effective date. forth in the current revision of Treas- ury Department Circular No. 570. The § 25.97 Continuation certificate. sum of the liabilities for the sureties If the contract of surety between the will equal the required penal sum of brewer and the surety on an expiring the bond. bond or continuation certificate is con- (e) Deposit of collateral securities in tinued in force for a succeeding period lieu of corporate surety. Bonds or notes of not less than 4 years from the expi- of the United States, or other obliga- ration date of the bond or continuation tions which are unconditionally guar- certificate, the brewer may submit, in anteed as to both interest and principal lieu of a new bond, a Brewer’s Bond by the United States, may be pledged Continuation Certificate on Form and deposited by principals as collat- 5130.23, executed under the penalties of eral security in lieu of corporate surety perjury, by the brewer and the surety in accordance with 31 CFR part 225.

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(f) Bond guaranteed by deposit of cash have been compromised with the indi- or cash equivalent. As an alternative to vidual, firm, partnership, corporation, the corporate surety bond under para- or association on payment of penalties graph (b) of this section, a person can or otherwise; or file a bond that guarantees payment of (2) Any felony under a law of any the liability by submitting cash or its State or the District of Columbia, or equivalent (including a money order, the United States, prohibiting the cashier’s check, or personal check). manufacture, sale, importation, or Cash or its equivalent must be no less transportation of distilled spirits, than the penal sums of the required wines, beer, or other intoxicating liq- bonds. Bonds described in this para- uor. graph will be released if there are no (b) Appeal of disapproval. If the bond outstanding liabilities when the bond or consent of surety is disapproved, the is terminated. Cash equivalents must person giving the bond or consent of be payable to the Alcohol and Tobacco surety may appeal the disapproval to Tax and Trade Bureau. the appropriate TTB officer, who will (96 Stat. 1068, 1085 (31 U.S.C. 9304–9308); sec. grant a hearing in the matter if re- 201, Pub. L. 85–859, 72 Stat. 1388, as amended quested by the applicant or brewer, and (26 U.S.C. 5401)) whose decision will be final. [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as (Sec. 201, Pub. L. 85–859, 72 Stat. 1394, as amended by T.D. TTB–146, 82 FR 1128, Jan. 4, amended (26 U.S.C. 5551)) 2017] [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as § 25.99 Filing powers of attorney. amended by T.D. ATF–437, 66 FR 5479, Jan. 19, 2001] Each bond, continuation certificate, and each consent of surety will be ac- § 25.102 Termination of surety’s liabil- companied by a power of attorney au- ity. thorizing the agent or officer to exe- The liability of a surety on a bond re- cute the document. The power of attor- quired by this part will be terminated ney will be prepared on a form provided only as to liability arising on or after: by the surety company and executed (a) The effective date of a super- under the corporate seal of the com- seding bond; pany. If the power of attorney sub- (b) The date of approval of the dis- mitted is other than a manually signed continuance of business of the brewer; original, it will be accompanied by a (c) Following the giving of notice by certificate of its validity. the surety; or (96 Stat. 1068, 1085 (31 U.S.C. 9304–9308)) (d) In the case of a brewer who applies to terminate a surety bond under DISAPPROVAL OR TERMINATION OF BONDS § 25.106, the date that TTB approves the OR CONSENTS OF SURETY brewer’s application under that section. § 25.101 Disapproval of bonds or consents of surety. (Sec. 201, Pub. L. 85–859, 72 Stat. 1388, as (a) Reasons for disapproval. The appro- amended (26 U.S.C. 5401)) priate TTB officer may disapprove a [T.D. TTB–146, 82 FR 1128, Jan. 4, 2017] bond or consent of surety if the individual, firm, partnership, corporation, § 25.103 Notice by surety for relief or association giving the bond or con- from liability under bond. sent of surety, or if any of the above A surety may, at any time, in writ- entities owning, controlling or actively ing, notify the principal and the appro- participating in the management of a priate TTB officer that the surety de- business giving a bond as a brewer, has sires after a specified date (not less been previously convicted in a court of than 60 days after the date of service competent jurisdiction of: on the principal) to be relieved of any (1) Any fraudulent noncompliance liability under the bond which is in- with any provision of law of the United curred by the principal after the date States if it related to internal revenue named in the notice. The surety shall or customs taxation of distilled spirits, include proof of service of the notice on wines or beer, or if the offense shall the principal with the notice filed with

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the appropriate TTB officer. The notice § 25.106 Application to terminate bond will become effective on the date by existing brewer who becomes ex- named, unless the surety withdraws empt from bond requirements. the notice, in writing. The surety on If a brewer has held a bond and be- the bond remains liable under the bond comes exempt from bond requirements with respect to any liability incurred under § 24.91(e), the brewer may apply by the principal while the bond is in ef- to TTB to terminate the bond. To fect. apply, the brewer must file an amendment to the Brewer’s Notice, Form (Sec. 201, Pub. L. 85–859, 72 Stat. 1388, as amended (26 U.S.C. 5401)) 5130.10, as provided in § 25.79. The brewer must accurately state in the submis- § 25.104 Termination of bonds. sion to TTB that the brewer: (a) Will withdraw beer for deferred (a) General. Brewer’s bonds may be payment of tax under § 25.164; terminated as to liability for future re- (b) Reasonably expects to be liable movals or receipts under the following for not more than $50,000 in taxes with circumstances: respect to beer imposed by 26 U.S.C. (1) Pursuant to application of the 5051 and 7652 for the current calendar surety as provided in § 25.103; year (see definition of ‘‘Reasonably ex- (2) On approval of a superseding bond pects’’ in § 25.164(c)(4)(ii)); and as provided in § 25.95; (c) Was liable for not more than (3) When a brewer discontinues busi- $50,000 in such taxes in the preceding ness as provided in § 25.85; or calendar year. (4) When an existing brewer who be- [T.D TTB–146, 82 FR 1128, Jan. 4, 2017] comes exempt from bond requirements terminates the bond as provided in § 25.106. Subpart I—Dealer Registration and (b) Notification. On termination of the Recordkeeping surety’s liability under a bond, the appropriate TTB officer will notify the SOURCE: T.D. TTB–79, 74 FR 37404, July 28, principal and sureties. 2009, unless otherwise noted. (31 U.S.C. 9301, 9303) § 25.111 Definitions. [T.D. TTB–146, 82 FR 1128, Jan. 4, 2017] For purposes of this subpart, the following terms have the meanings indi- § 25.105 Release of collateral security. cated: Dealer. A person who sells, or offers Bonds, notes, and other obligations for sale, any alcohol product (distilled of the United States, pledged and de- spirits, wines, and/or beer) fit for bev- posited as security in connection with erage use. bonds required by this part will be re- Retail dealer in liquors. A dealer who leased in accordance with 31 CFR part sells, or offers for sale, distilled spirits, 225. When the appropriate TTB officer wines, or beer to any person other than determines there is no outstanding li- a dealer. ability against the bond and that it is Wholesale dealer in liquors. A dealer no longer necessary to hold the secu- who sells, or offers for sale, distilled rity, he or she shall fix the date or spirits, wines, or beer to another deal- dates on which a part or all of the secu- er. rity will be released. At any time prior to the release of the security, the ap- (26 U.S.C. 5121, 5122) propriate TTB officer may, for proper § 25.112 Dealer registration. cause, extend the date of release of the security for an additional length of Every brewer who sells, or offers for time as may be appropriate. sale, any alcohol product (distilled spirits, wines, or beer) fit for beverage (31 U.S.C. 9301, 9303) use must register as a dealer in accord- [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as ance with part 31 of this chapter. How- amended by T.D. TTB–146, 82 FR 1128, Jan 4, ever, the Brewer’s Notice, TTB Form 2017] 5130.10, filed under subpart G of this

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part, and approval of that notice by the ified for dealers in part 31 of this chap- appropriate TTB officer, will con- ter. stitute the brewer’s registration as a (26 U.S.C. 5121, 5122) dealer at the brewery. Every brewer registered as a dealer under this subpart will be classified as a wholesale Subpart J—Marks, Brands, and dealer in liquors (see § 31.32 of this Labels chapter) and as such may also operate § 25.141 Barrels and kegs. as a retail dealer in liquors without additional registration. Registration cov- (a) General requirements. The brewer’s ers all sales from the same location, in- name or trade name and the place of cluding sales of wine, spirits, or other production (city and, if necessary for identification, State) shall be perma- brewers’ beer. As provided in § 31.52 of nently marked on each barrel or keg. If this chapter, the brewer is subject to the place of production is clearly no additional registration for making shown on the bung or on the tap cover, sales of wine or beer at the customer’s or on a label securely affixed to each place of business. Otherwise, a brewer barrel or keg, the place of production who conducts business as a dealer at a need not be permanently marked on location other than the brewery must each barrel or keg. No statement as to register and keep records in accordance payment of internal revenue taxes may with part 31 of this chapter. be shown. (26 U.S.C. 5124) (b) Breweries of same ownership. (1) If two or more breweries are owned or op- § 25.113 Amending the dealer registra- erated by the same person, firm, or cor- tion. poration (as defined in § 25.181), the place of production: Every brewer registered as a dealer (i) May be shown as the only location under this subpart must maintain a on the bung, or on the tap cover, or on current and accurate Brewer’s Notice, a separate label attached to the keg; TTB Form 5130.10. Whenever there is a (ii) May be included in a listing of change to any of the information pro- the locations of breweries qualified vided in the approved Brewer’s Notice, under this part if the place of produc- the brewer must amend the notice tion is not given less emphasis than within the time period specified in sub- any of the other locations; or part G of this part. An amendment to (iii) Need not be shown if the brew- the Brewer’s Notice, Form 5130.10, will er’s principal place of business is shown also serve as an amendment of the in lieu of any other location. The brew- brewer’s dealer registration under this er’s principal place of business will be subpart. The brewer’s dealer registra- the location of a brewery operated by tion will also terminate when brewery the brewer and qualified under this operations under the Brewer’s Notice part. terminate. (2) If the location of two or more breweries is shown on the keg, bung, (26 U.S.C. 5124) tap cover, or on a separate label at- § 25.114 Dealer records. tached to the keg (paragraph (b)(1)(ii)), or if the brewer’s principal place of Every dealer is required to maintain business is shown in lieu of the actual records of transactions. Beer trans- place of production (paragraph actions that appear in the records re- (b)(1)(iii)), the brewer shall indicate the quired by subpart U of this part will actual place of production by printing, meet the brewer’s recordkeeping re- coding or other markings on the keg, quirements as a dealer. For other bung, tap cover, or on a separate label transactions not covered in the brew- attached to the keg. The coding system ery records, such as retail sales of wine employed will permit an appropriate or distilled spirits in a restaurant at TTB officer to determine the place of the brewery, or operations as a whole- production (including street address if sale dealer in wine or distilled spirits, two or more breweries are located in the brewer must keep the records spec- the same city) of the beer. The brewer

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must notify the appropriate TTB offi- duction (including street address if two cer prior to employing a coding sys- or more breweries are located in the tem. same city) of the beer. The brewer (c) Label approval required. Labels or must notify the appropriate TTB offcer tap covers used by brewers shall be prior to employing a coding system. covered by certificates of label ap- (c) Distinctive names. If the brewer’s proval, Form 5100.31, when required by name, trade name or brand name in- part 7 of this chapter. cludes the name of a city which is not the place where the beer was produced, (Approved by the Office of Management and Budget under control number 1512–0474) the appropriate TTB officer may require the brewer to state the actual (Sec. 201, Pub. L. 85–859, 72 Stat. 1389, as place of production on the label. amended (26 U.S.C. 5412)) (d) Tolerances. The statement of net [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as contents shall indicate exactly the vol- amended by T.D. ATF–225, 51 FR 8492, Mar. ume of beer within the bottle except 12, 1986; T.D. ATF–437, 66 FR 5479, Jan. 19, for variations in measuring as may 2001] occur in filling conducted in compli- § 25.142 Bottles. ance with good commercial practice. The barrel equivalent of bottles filled (a) Label requirements. Each bottle of during a consecutive three month pe- beer shall show by label or otherwise riod, calculated on the basis of the the name or trade name of the brewer, brewer’s fill test records, may not vary the net contents of the bottle, the na- more than 0.5 percent from the barrel ture of the product such as beer, ale, equivalent of bottles filled during the porter, stout, etc., and the place of pro- same period, calculated on the basis of duction (city and, when necessary for the stated net contents of the bottles. identification, State). No statement as The brewer is liable for the tax on the to payment of internal revenue taxes entire amount of beer removed, with- may be shown. out benefit of tolerance, when the fill (b) Breweries of same ownership. (1) If of bottles and cans exceeds the toler- two or more breweries are owned or op- ance for the three month period, or erated by the same person, firm, or cor- when filling is not conducted in com- poration (as defined in § 25.181), the pliance with good commercial practice. place of production: (e) Label approval required. Labels (i) May be shown as the only location used by brewers shall be covered by on the label; certificates of label approval, Form (ii) May be included in a listing of 5100.31, when required by part 7 of this the locations of breweries qualified chapter. under this part if the place of produc- (f) Short-fill bottles. A brewer may dis- tion is not given less emphasis than pose of taxpaid short-fill bottles of beer any of the other locations; or to employees for their use but not for (iii) Need not be shown if the brew- resale. These bottles need not be la- er’s principal place of business is shown beled, but if labeled they need not show in lieu of any other location. The brew- an accurate statement of net contents. er’s principal place of business will be the location of a brewery operated by (Approved by the Office of Management and the brewer and qualified under this Budget under control number 1512–0474) part. (Sec. 201, Pub. L. 85–859, 72 Stat. 1389, as (2) If the location of two or more amended (26 U.S.C. 5412)) breweries is shown on the label (para- [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as graph (b)(1)(ii)), or if the brewer’s prin- amended by T.D. ATF–225, 51 FR 8492, Mar. cipal place of business is shown on the 12, 1986; T.D. ATF–437, 66 FR 5479, Jan. 19, label in lieu of the actual place of pro- 2001] duction (paragraph (b)(1)(iii)), the brewer shall indicate the actual place § 25.143 Cases. of production by printing, coding or (a) Brewer’s name. The brewer’s name other markings on the label, bottle, or trade name will be shown on each crown or lid. The coding system em- case or other shipping container of bot- ployed will permit an appropriate TTB tled beer. A brewer may use unmarked officer to determine the place of pro- cases to hold:

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(1) Cartons of beer, if the visible por- bly mark each tank, tank car, tank tion of the cartons shows the required truck, tank ship, barge, or deep tank of name; or a vessel in accordance with paragraph (2) Bottles or cans with plastic car- (b) of this section. These marks may be riers, if the visible portion of the bot- placed on a label securely affixed to tles or cans shows the required name. the route board of the container. (b) Other information. The brewer may (b) The brewer shall mark each con- show on a case or shipping container tainer with— the place of production (city and, when (1) The designation ‘‘Beer’’; necessary for identification, State), (2) The brewer’s name; and the addresses of other breweries (3) The address of the brewery from owned by the same person, firm, or cor- which removed; poration (as defined in § 25.181). If only (4) The address of the brewery to one address is shown, it will be that of which transferred or the marks re- the producing brewery, or of the brew- quired for exportation in Part 28 of this er’s principal place of business. chapter, as applicable; (Approved by the Office of Management and (5) The date of shipment; and Budget under control number 1512–0474) (6) The quantity, expressed in bar- (Sec. 201, Pub. L. 85–859, 72 Stat. 1389, as rels. amended (26 U.S.C. 5412)) (Sec. 201, Pub. L. 85–859, 72 Stat. 1334, as [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as amended, 1389, as amended (26 U.S.C. 5053, amended by T.D. ATF–225, 51 FR 8492, Mar. 5414)) 12, 1986] [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as § 25.144 Rebranding barrels and kegs. amended by T.D. TTB–8, 69 FR 3830, Jan. 27, 2004] (a) A brewer may not use a barrel or keg which bears the name of more than one brewer, and except as provided in Subpart K—Tax on Beer § 25.231, may not use a barrel or keg LIABILITY FOR TAX bearing the name of a brewer other than the producing brewer. § 25.151 Rate of tax. (b) A brewer who purchases or otherwise obtains barrels or kegs from an- All beer, brewed or produced, and re- other brewer shall permanently remove moved for consumption or sale, is sub- or durably cover the original marks ject to the tax prescribed by 26 U.S.C. and brands after notifying the appro- 5051, for every barrel containing not priate TTB officer of the proposed ac- more than 31 gallons, and at a like rate tion. A brewer may use the barrels or for any other quantity or for the frac- kegs obtained without removing or tional parts of a barrel as authorized in covering the original marks and brands § 25.156. if the brewer: (Sec. 201, Pub. L. 85–859, 72 Stat. 1333, as (1) Adopts a trade name substantially amended (26 U.S.C. 5051, 5052)) identical to the name appearing on the barrels or kegs; or § 25.152 Reduced rate of tax for cer- (2) Succeeds to a brewer who has dis- tain brewers. continued business, in which case the (a) General. Section 5051(a)(2) of Title brewer may add marks or brands, in ac- 26 U.S.C. provides for a reduced rate of cordance with § 25.141, which indicate tax on the first 60,000 barrels of beer re- ownership. moved for consumption or sale by a (Sec. 201, Pub. L. 85–859, 72 Stat. 1389, as brewer during a calendar year. To be amended (26 U.S.C. 5412)) eligible to pay the reduced rate of tax, a brewer: § 25.145 Tanks, vehicles, and vessels. (1) Shall brew or produce the beer at (a) Each brewer who transfers beer to a qualified brewery in the United another brewery of the same ownership States; (as defined in § 25.181), or who exports (2) May not produce more than beer without payment of tax, as pro- 2,000,000 barrels of beer per calendar vided in § 25.203, shall plainly and dura- year; and

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(3) May not be a member of a ‘‘con- apportion the 60,000 barrels among the trolled group’’ of brewers whose mem- breweries in the manner described in bers together produce more than the notice as provided by § 25.167(b)(3). 2,000,000 barrels of beer per calendar (d) Controlled groups of brewers. Mem- year. bers of a controlled group of brewers The appropriate TTB officer shall deny shall include the combined production use of the reduced rate of tax provided of beer by all member brewers when de- by 26 U.S.C. 5051(a)(2) where it is deter- termining eligibility under the 2,000,000 mined that the allowance of such a re- limitation. The reduced rate of tax ap- duced rate would benefit a person who plies to the first 60,000 barrels of beer would otherwise fail to qualify for use removed for consumption or sale in a of such rate. calendar year by the controlled group (b) Definitions. For the purpose of de- of brewers; the controlled group of termining eligibility for payment of brewers shall apportion the 60,000 bar- the reduced rate of tax on beer, terms rels among member brewers in the have the following meanings: manner described in each brewer’s no- (1) Controlled group. A related group of brewers as defined in 26 U.S.C. tice as provided by § 25.167(b)(3). 5051(a)(2)(B). Controlled groups include, (Sec. 201, Pub. L. 85–859, 72 Stat. 1333, as but are not limited to: amended (26 U.S.C. 5052)) (i) Parent-subsidiary controlled [T.D. ATD–224, 51 FR 7673, Mar. 5, 1986, as groups as defined in 26 CFR 1.1563– amended by T.D. ATF–307, 55 FR 52738, Dec. 1(a)(2); 21, 1990; T.D. ATF–345, 58 FR 40357, July 28, (ii) Brother-sister controlled groups 1993] as defined in 26 CFR 1.1563–1(a)(3); and (iii) Combined groups as defined in 26 § 25.153 Persons liable for tax. CFR 1.1563–1(a)(4). Stock ownership in a corporation need not be direct and The tax imposed by law on beer (in- 51% constructive ownership, defined in cluding beer purchased or procured by 26 CFR 1.1563–3, may be acquired one brewer from another) shall be paid through: by the brewer of the beer at the brew- (A) An option to purchase stock; ery where produced. The tax on beer (B) Attribution from partnerships; transferred to a brewery from other (C) Attribution from estate or trusts; breweries owned by the same brewer in (D) Attribution from corporations; or accordance with subpart L of this part (E) Ownership by spouses, children, shall be paid by the brewer at the brew- grandchildren, parents, and grand- ery from which the beer is removed for parents. consumption or sale. (2) Production of beer. The production of beer as recorded in the brewer’s (Sec. 201, Pub. L. 85–859, 72 Stat. 1334, as daily records and reported in the Brew- amended, 1389, as amended (26 U.S.C. 5054, er’s Report of Operations, Form 5130.9. 5413, 5414)) For the purpose of determining compli- DETERMINATION OF TAX ance with the 2,000,000 barrel limitation, production of beer by a brewer or § 25.155 Types of containers. a controlled group of brewers includes both beer produced at qualified brew- Beer may be removed from a brewery eries within the United States and beer for consumption or sale only in barrels, produced outside the United States. kegs, bottles, and similar containers, (c) Brewers operating more than one as provided in this part. A container brewery. Brewers who operate more which the appropriate TTB officer de- than one brewery shall include the termines to be similar to a bottle or combined production of beer at all can will be treated as a bottle for pur- their breweries when determining eligi- poses of this part. A container which bility under the 2,000,000 barrel limita- the appropriate TTB officer determines tion. The reduced rate of tax applies to to be similar to a barrel or keg and the first 60,000 barrels of beer removed which conforms to one of the sizes pre- for consumption or sale in a calendar scribed for barrels or kegs in § 25.156 year by the brewer; the brewer shall

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will be treated as such for purposes of (a) For U.S. measure bottles. this part. Bottle size (net contents in fluid Number Barrel (Sec. 201, Pub. L. 85–859, 72 Stat. 1389, as ounces) of bottles equiva- amended, 1390, as amended (26 U.S.C. 5412, per case lent 5416)) 6 ...... 12 0.01815 6 ...... 24 0.03629 § 25.156 Determination of tax on keg 7 ...... 12 0.02117 beer. 7 ...... 24 0.04234 7 ...... 32 0.05645 (a) In determining the tax on beer re- 7 ...... 35 0.06174 moved in kegs, a barrel is regarded as 7 ...... 36 0.06351 a quantity of not more than 31 gallons. 7 ...... 40 0.07056 The authorized fractional parts of a 7 ...... 48 0.08468 8 ...... 12 0.02419 barrel are whole barrels, halves, thirds, 8 ...... 24 0.04839 quarters, sixths, and eighths, and beer 8 ...... 36 0.07258 may be removed in kegs rated at those 8 ...... 48 0.09677 capacities. The following keg sizes are 10 ...... 12 0.03024 10 ...... 24 0.06048 also authorized at the stated barrel 10 ...... 48 0.12097 equivalents: 11 ...... 12 0.03327 11 ...... 24 0.06653 Size of keg Barrel 11.5 ...... 24 0.06956 equivalent 12 ...... 12 0.03629 12 ...... 15 0.04536 5 gallons ...... 0.16129 12 ...... 20 0.06048 30 liter ...... 0.25565 12 ...... 24 0.07258 50 liter ...... 0.42608 12 ...... 30 0.09073 12 ...... 48 0.14516 (b) If any barrel or authorized size 12 ...... 50 0.15121 keg contains a quantity of beer more 14 ...... 12 0.04234 than 2 percent in excess of its rated ca- 14 ...... 24 0.08468 16 (1 pint) ...... 12 0.04839 pacity, tax will be determined and paid 16 (1 pint) ...... 24 0.09677 on the actual quantity of beer (without 22 ...... 12 0.06653 benefit of any tolerance) contained in 22 ...... 24 0.13306 the keg. 24 ...... 12 0.07258 24 ...... 24 0.14516 (c) The quantities of keg beer re- 30 ...... 12 0.09073 moved subject to tax will be computed 32 (1 quart) ...... 12 0.09677 to 5 decimal places. The sum of the 40 ...... 12 0.12097 quantities computed for any one day 64 ...... 1 0.01613 64 ...... 4 0.06452 will be rounded to 2 decimal places and 64 ...... 6 0.09677 the tax will be calculated and paid on 128 (1 gallon) ...... 1 0.03226 the rounded sum. 288 ...... 1 0.07258 (26 U.S.C. 5051) (b) For metric measure bottles. [T.D. ATF–345, 58 FR 40357, July 28, 1993] Number Barrel Bottle size (metric net contents) of bottles equiva- § 25.157 Determination of tax on bot- per case lent tled beer. 500 milliliters ...... 24 0.10226 The quantities of bottled beer re- 750 milliliters ...... 12 0.07670 moved subject to tax shall be computed 1 liter ...... 12 0.10226 to 5 decimal places in accordance with 2 liters ...... 6 0.10226 the table and instructions in § 25.158. 5 liters ...... 1 0.04261 The sum of the quantities computed for (c) For other case sizes. If beer is to be any one day will be rounded to 2 dec- removed in cases or bottles of sizes imal places and the tax will be cal- other than those listed in the above ta- culated and paid on the rounded sum. bles, the brewer shall notify the appro- (Sec. 201, Pub. L. 85–859, 72 Stat. 1333, as priate TTB officer in advance and re- amended (26 U.S.C. 5051)) quest to be advised of the fractional barrel equivalent applicable to the pro- § 25.158 Tax computation for bottled posed case size. beer. Barrel equivalents for various case (26 U.S.C. 5412) sizes are as follows: [T.D. ATF–345, 58 FR 40357, July 28, 1993]

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§ 25.159 Time of tax determination and brewer shall make tax adjustments for payment; offsets. all breweries where tax was paid at the (a) Time and payment. The tax on beer lower rate that year, and shall include will be determined at the time of its interest payable from the date on removal for consumption or sale, and which tax was paid at the lower rate. will be paid by return as provided in In the case of a controlled group of this part. brewers whose production exceeds (b) Offsets. During any business day, 2,000,000 barrels of beer, all member the quantity of beer returned to the brewers who paid tax at the lower rate same brewery from which removed is shall make tax adjustments as deter- to be taken as an offset against or de- mined in this section. ducted from the total quantity of beer removed for consumption or sale from (Sec. 201, Pub. L. 85–859, 72 Stat. 1333, as amended (26 U.S.C. 5051)) that brewery on the day that the beer is returned. PREPARATION AND REMITTANCE OF TAX (c) Offsets not allowed. An offset or de- RETURNS duction for returned beer will not be allowed if: § 25.163 Method of tax payment. (1) The brewer was indemnified by insurance or otherwise in respect of the A brewer shall pay the tax on beer by tax; or return on TTB F 5000.24, as provided in (2) The brewer does not issue credit §§ 25.164, 25.164a, 25.173, and 25.175. In to the customer for the tax on the re- paying the tax, a fractional part of a turned beer within 30 days of the recent will be disregarded unless it turn of the beer. If the tax is not time- amounts to one-half cent or more, in ly credited after the offset or deduction which case it will be increased to one is taken, the brewer shall make an in- cent. creasing adjustment on the next tax return. [T.D. ATF–251, 52 FR 19314, May 22, 1987, as amended by T.D. ATF–365, 60 FR 33669, June (Sec. 201, Pub. L. 85–859, 72 Stat. 1334, as 28, 1995; T.D. TTB–89, 76 FR 3511, Jan. 20, 2011; amended, 1335, as amended (26 U.S.C. 5054, T.D. TTB–94, 76 FR 52862, Aug. 24, 2011] 5056, 5061)) § 25.164 Deferred payment return peri- § 25.160 Tax adjustment for brewers ods—annual, quarterly, and semi- who produce more than 2,000,000 monthly. barrels of beer. (a) Requirement for filing. This section Each brewer who has paid tax on beer governs payment of tax on a deferred by return, Form 5000.24, at the reduced basis. Each brewer must pay the tax on rate of tax during a calendar year, but beer (unless prepaid) by return on whose production (or the production of Form 5000.24. The brewer must file a controlled group of brewers of which Form 5000.24 as a return regardless of the brewer is a member) exceeds whether tax has been prepaid as pro- 2,000.000 barrels of beer in that calendar vided in § 25.175 during the return pe- year, is no longer eligible to pay tax on riod. The brewer must file a return on beer at the reduced rate of tax for any beer removed that calendar year for Form 5000.24 for each return period consumption or sale. The brewer shall even though no beer was removed for make a tax adjustment for the pay- consumption or sale. ment of additional tax no later than (b) Payment of tax. The brewer must the return period in which production include for payment with the return (or the production of a controlled the full amount of tax required to be group of brewers of which the brewer is determined (and which has not been a member) exceeds 2,000,000 barrels of prepaid) on all beer removed for con- beer. The adjustment will be deter- sumption or sale during the period cov- mined by multiplying the difference ered by the return. between the higher and lower rates of (c) Return periods—(1) Semimonthly re- tax applicable to beer by the number of turn period. Except in the case of a tax- barrels removed by the brewer that payer who qualifies for annual or quar- year at the reduced rate of tax. The terly return periods as provided in

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paragraphs (c)(2) or (c)(3) of this sec- (4) Additional rules for annual and tion, all taxpayers must use semi- quarterly return periods. The following monthly return periods for deferred additional rules apply to the annual payment of tax. The semimonthly re- and quarterly return period procedure turn periods run from the brewer’s under this section: business day beginning on the first day (i) A ‘‘taxpayer’’ is an individual, cor- of each month through the brewer’s poration, partnership, or other entity business day beginning on the 15th day that is assigned a single Employer of that month, and from the brewer’s Identification Number as defined in 26 business day beginning on the 16th day CFR 301.7701–12; of the month through the brewer’s (ii) ‘‘Reasonably expects’’ means that business day beginning on the last day there is no existing or anticipated cir- of the month, except as otherwise pro- cumstance known to the taxpayer vided in § 25.164a. (such as an increase in production ca- (2) Annual return period. Subject to pacity) that would cause the taxpayer’s paragraph (b)(4) of this section, a tax- tax liability to exceed the prescribed payer who reasonably expects to be lia- limit; ble for not more than $1,000 in taxes (iii) A taxpayer with multiple loca- with respect to beer imposed by 26 tions must combine the beer tax liabil- U.S.C. 5051 and 7652 in the current cal- ity for all locations to determine eligi- endar year, and that was liable for not bility for the return procedures; more than $1,000 in such taxes in the (iv) A taxpayer who has both domes- preceding calendar year, may choose to tic operations and import transactions use an annual return period. However, must combine the beer tax liability on the taxpayer may not use the annual the domestic operations and the im- return period procedure for any portion ports to determine eligibility for the of the calendar year following the first return procedures; date on which the aggregate amount of (v) The controlled group rules of 26 tax due from the taxpayer during the U.S.C. 5061(e), which concern treatment calendar year exceeds $1,000, and any of controlled groups as one taxpayer, tax which has not been paid on that do not apply for purposes of deter- date will be due on the 14th day after mining eligibility for the return proce- the last day of the quarterly or semi- dures. However, a taxpayer who is eli- monthly period in which that date oc- gible for the return procedures, and curs. who is a member of a controlled group (3) Quarterly return period. A taxpayer that owes $5 million or more in beer ex- may choose to use a quarterly return cise taxes per year, is required to pay period if the taxpayer was not liable taxes by electronic fund transfer for more than $50,000 in taxes with re- (EFT). Payments via EFT must be spect to beer imposed by 26 U.S.C. 5051 transmitted in accordance with section and 7652 in the preceding calendar year 5061(e); and if that taxpayer reasonably expects (vi) A new taxpayer is eligible to use to be liable for not more than $50,000 in the return procedures in the first year such taxes during the current calendar of business simply if the taxpayer rea- year. In such a case the last day for sonably expects to be liable for not paying the tax and filing the return more than $1,000 (in the case of the an- will be the 14th day after the last day nual return procedure) or $50,000 (in the of the calendar quarter. However, the case of the quarterly return procedure) taxpayer may not use the quarterly re- in beer taxes during that calendar turn period procedure for any portion year; and of the calendar year following the first (vii) If a taxpayer becomes ineligible date on which the aggregate amount of to use a return procedure prescribed in tax due from the taxpayer during the paragraph (c)(2) or (c)(3) of this section calendar year exceeds $50,000, and any because the taxpayer’s liability ex- tax that has not been paid on that date ceeds $1,000 or $50,000, respectively, will be due on the 14th day after the during a taxable year, that taxpayer last day of the semimonthly period in may resume using that return proce- which that date occurs. dure only after a full calendar year has

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passed during which the taxpayer’s li- § 25.164a Special September rule for ability did not exceed $1,000 or $50,000, taxes due by semimonthly return. as the case may be. A taxpayer may (a) Division of second semimonthly pe- not use an annual or quarterly return riod. (1) General. Except as otherwise procedure during any calendar year in provided in paragraph (a)(2) of this sec- which the taxpayer reasonably expects tion, the second semimonthly period to be liable for more than $1,000, in the for the month of September is divided case of the annual return procedure, or into two payment periods, from the $50,000, in the case of the quarterly re- 16th day through the 26th day, and turn procedure, in beer taxes. from the 27th day through the 30th day. (d) Time for filing returns and paying The brewer shall file a return, TTB F tax. Except as otherwise provided in 5000.24, and make remittance, for the § 25.164a for semimonthly tax returns, period September 16–26, no later than the brewer must file the tax return, September 29. The brewer shall file a TTB F 5000.24, for each return period, return on TTB F 5000.24, and make re- and make remittance as required by mittance, for the period September 27– this section, not later than the 14th 30, no later than October 14. day after the last day of the return period. If the due date falls on a Satur- (2) Taxpayment not by electronic fund day, Sunday, or legal holiday, the re- transfer. In the case of taxes for which turn and remittance are due on the im- remittance by electronic fund transfer mediately preceding day that is not a (EFT) is not required by § 25.165, the Saturday, Sunday, or legal holiday, ex- second semimonthly period of Sep- cept as otherwise provided in tember is divided into two payment pe- § 25.164a(c). riods, from the 16th day through the (e) Timely filing. (1) When the brewer 25th day, and from the 26th day sends the semimonthly, quarterly, or through the 30th day. The brewer shall annual tax return, Form 5000.24, by file a return on TTB F 5000.24, and U.S. mail, in accordance with the in- make remittance, for the period Sep- structions on the form, as required by tember 16–25, no later than September this section, with remittance as pro- 28. The brewer shall file a return on vided for in this section, or without re- TTB F 5000.24, and make remittance, mittance as provided for in § 25.165, the for the period September 26–30, no later date of the official postmark of the than October 14. United States Postal Service stamped (b) Amount of payment—Safe harbor on the cover in which the return and rule. (1) General. Taxpayers are consid- remittance were mailed is considered ered to have met the requirements of the date of delivery of the return and paragraph (a)(1) of this section if the the date of delivery of the remittance, amount paid no later than September if enclosed with the return. When the 29 is not less than 11/15ths (73.3 percent) postmark on the cover is illegible, the of the tax liability incurred for the burden is on the brewer to prove when semimonthly period beginning on Sep- the postmark was made. tember 1 and ending on September 15, (2) When the brewer sends the semi- and if any underpayment of tax is paid monthly, quarterly, or annual return by October 14. with or without remittance by reg- (2) Taxpayment not by EFT. Taxpayers istered mail or by certified mail, the are considered to have met the require- date of registry or the date of the post- ments of paragraph (a)(2) of this sec- mark on the sender’s receipt of cer- tion if the amount paid no later than tified mail will be treated as the date September 28 is not less than 2/3rds of delivery of the return and of the re- (66.7 percent) of the tax liability in- mittance, if enclosed with the return. curred for the semimonthly period beginning on September 1 and ending on (Approved by the Office of Management and September 15, and if any underpayment Budget under control number 1513–0083) of tax is paid by October 14. (Aug. 16, 1954, ch. 736, 68A Stat. 775, as (c) Weekends and holidays. If the re- amended (26 U.S.C. 6302); sec. 201, Pub. L. 85– quired taxpayment due date for the pe- 859, 72 Stat. 1335, as amended (26 U.S.C. 5061)) riod September 16–25 or September 16– [T.D. TTB–146, 82 FR 1129, Jan. 4, 2017] 26, as applicable, falls on a Saturday or

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legal holiday, the return and remittances by EFT. For purposes of this tance are due on the immediately pre- section, the dollar amount of tax liabil- ceding day. If the required due date ity is defined as the gross tax liability falls on a Sunday, the return and re- on all taxable removals, determined in mittance are due on the immediately accordance with § 25.159, and importa- following day. tions (including beer brought into the (d) Example: Payment of tax for the United States from Puerto Rico or the month of September. (1) Facts. X, a brew- Virgin Islands) during the calendar er required to pay taxes by electronic year, without regard to any drawbacks, fund transfer, incurred tax liability in credits, or refunds, for all premises the amount of $30,000 for the first semi- from which such activities are con- monthly period of September. For the ducted by the taxpayer. Overpayments period September 16–26, X incurred tax are not taken into account in summa- liability in the amount of $45,000, and rizing the gross tax liability. for the period September 27–30, X in- (2) For the purposes of this section, a curred tax liability in the amount of taxpayer includes a controlled group of $2,000. corporations, as defined in 26 U.S.C. (2) Payment requirement. X’s payment 1563, and implementing regulations in of tax in the amount of $30,000 for the 26 CFR 1.1563–1 through 1.1563–4, except first semimonthly period of September that the words ‘‘at least 80 percent’’ is due no later than September 29 shall be replaced by the words ‘‘more (§ 25.164(d)). X’s payment of tax for the than 50 percent’’ in each place it ap- period September 16–26 is also due no pears in subsection (a) of 26 U.S.C. 1563, later than September 29 (§ 25.164a(a)(1)). as well as in the implementing regula- X may use the safe harbor rule to de- tions. Also, the rules for a ‘‘controlled termine the amount of payment due for group of corporations’’ apply in a simi- the period of September 16–26 lar fashion to groups which include (§ 25.164a(b)). Under the safe harbor partnerships and/or sole proprietor- rule, X’s payment of tax must not be ships. If one entity maintains more less than $21,990.00, that is, 11/15ths of than 50% control over a group con- the tax liability incurred during the sisting of corporations and one, or first semimonthly period of September. more, partnerships and/or sole propri- Additionally, X must pay the tax in etorships, all of the members of the the amount of $2,000 for the period Sep- controlled group are one taxpayer for tember 27–30 no later than October 14 the purpose of determining who is re- (§ 25.164a(a)(1)). X must also pay the un- quired to make remittances by EFT. derpayment of tax, $23,010.00, for the (3) A taxpayer who is required by this period September 16–26, no later than section to make remittances by EFT October 14 (§ 25.164a(b)). shall make a separate EFT remittance [T.D. TTB–89, 76 FR 3512, Jan. 20, 2011, as and file a separate return, Form amended by T.D. TTB–94, 76 FR 52862, Aug. 5000.24, for each brewery from which 24, 2011] beer is removed upon determination of tax. § 25.165 Payment of tax by electronic (b) Requirements. (1) On or before Jan- fund transfer. uary 10 of each calendar year, except (a) Eligible brewers. (1) Each taxpayer for a taxpayer already remitting the who was liable, during a calendar year, tax by EFT, each taxpayer who was lia- for a gross amount equal to or exceed- ble for a gross amount equal to or ex- ing five million dollars in beer taxes ceeding five million dollars in beer combining tax liabilities incurred taxes combining tax liabilities in- under this part and parts 26 and 27 of curred under this part and parts 26 and this chapter, shall use a commerical 27 of this chapter, during the previous bank in making payment by electronic calendar year, shall notify, in writing fund transfer (EFT) of beer taxes dur- the appropriate TTB officer. The notice ing the succeeding calendar year. Pay- shall be an agreement to make remit- ment of beer taxes by cash, check, or tances by EFT. money order, as described in § 25.163, is (2) For each return filed in accord- not authorized for a taxpayer who is ance with this part, the taxpayer shall required by this section to make remit- direct the taxpayer’s bank to make an

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electronic fund transfer in the amount 6656, as applicable, for failure to make of the taxpayment to the Treasury Ac- a taxpayment by EFT on or before the count as provided in paragraph (e) of close of business on the prescribed last this section. The request shall be made day for filing. to the bank early enough for the trans- (e) Procedure. Upon the notification fer to be made to the Treasury Account required under paragraph (b)(1) of this by no later than the close of business section, the appropriate TTB officer on the last day for filing the return, will issue to the taxpayer a TTB Proce- prescribed in §§ 25.164 or 25.175. The re- dure entitled ‘‘Payment of Tax by Elec- quest shall take into account any time tronic Fund Transfer.’’ This publica- limit established by the bank. tion outlines the procedure a taxpayer (3) If a taxpayer was liable for less is to follow when preparing returns and than five million dollars in beer taxes during the preceding calendar year, EFT remittances in accordance with combining tax liabilities incurred this part. The U.S. Customs Service under this part and parts 26 and 27 of will provide the taxpayer with instruc- this chapter, the taxpayer may choose tions for preparing EFT remittances either to continue remitting the tax as for payments to be made to the U.S. provided in this section or to remit the Customs Service. tax with the return as prescribed by (Act of August 16, 1954, 68A Stat. 775, as § 25.164. Upon filing the first return on amended (26 U.S.C. 6302); Sec. 201, Pub. L. 85– which the taxpayer chooses to dis- 859, 72 Stat. 1335, as amended (26 U.S.C. 5061)) continue remitting the tax by EFT and to begin remitting the tax with the tax [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as return, the taxpayer shall notify the amended by T.D. ATF–245, 52 FR 532, Jan. 7, 1987; T.D. ATF–251, 52 FR 19314, May 22, 1987; appropriate TTB officer by attaching a T.D. ATF–262, 52 FR 47560, Dec. 15, 1987; T.D. written notification to Form 5000.24, ATF–437, 66 FR 5479, Jan. 19, 2001; T.D. ATF– stating that no taxes are due by EFT 459, 66 FR 38550, July 25, 2001; T.D. ATF–479, because the tax liability during the 67 FR 30798, May 8, 2002] preceding calendar year was less than five million dollars, and that the re- § 25.166 Payment of reduced rate of mittance will be filed with the tax re- tax. turn. (a) By return, Form 5000.24. A brewer (c) Remittance. (1) Each taxpayer who is eligible to pay the reduced rate shall show on the return, Form 5000.24, of tax on beer may, upon filing the no- information about remitting the tax for that return by EFT and shall file tice required by § 25.167, pay the re- the return with TTB, in accordance duced rate of tax on beer by return for with the instructions on Form 5000.24. deferred payment of tax as provided in (2) Remittances shall be considered § 25.164 or by prepayment return as pro- as made when the taxpayment by elec- vided in § 25.175. Payment of reduced tronic fund transfer is received by the rate of tax on beer by return, Form Treasury Account. For purposes of this 5000.24, may commence with any tax section, a taxpayment by electronic return filed during a calendar year and fund transfer shall be considered as re- will continue until the brewer has tax- ceived by the Treasury Account when paid 60,000 barrels of beer at the lower it is paid to a Federal Reserve Bank. rate of tax, or taxpaid the number of (3) When the taxpayer directs the barrels of beer apportioned under bank to effect an electronic fund trans- § 25.167(b)(3) for that calendar year. fer message as required by paragraph (b) By claim for refund of tax. A brew- (b)(2) of this section, any transfer data er, eligible to pay the reduced rate of record furnished to the taxpayer, tax on beer during a calendar year, but through normal banking procedures, who has not paid the reduced rate of will serve as the record of payment, tax by return during that year, may and will be retained as part of required file a claim, Form 2635, (5620.8) for re- records. fund of tax excessively paid on beer (d) Failure to make a taxpayment by EFT. The taxpayer is subject to a penalty imposed by 26 U.S.C. 5684, 6651, or

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during that year. Claims for refund of by the brewer under penalties of per- tax will be filed as provided in § 25.285. jury as defined in § 25.11. (Sec. 201, Pub. L. 85–859, 72 Stat. 1333, as (Act of Aug. 16, 1954, 68A Stat. 749, as amend- amended (26 U.S.C. 5051)) ed (26 U.S.C. 6065); sec. 201, Pub. L. 85–859, 72 Stat. 1390, as amended, 1395, as amended (26 [T.D. ATF–224, 51 FR 7673, Mar. 5, 1987, as U.S.C. 5415, 5555)) amended by T.D. ATF–251, 52 FR 19313, May 22, 1987; T.D. TTB–41, 71 FR 5604, Feb. 2, 2006] § 25.168 Employer identification number. § 25.167 Notice of brewer to pay reduced rate of tax. The employer identification number (a) Requirement to file notice. Every (defined at 26 CFR 301.7701–12) of the brewer who desires to pay the reduced taxpayer who has been assigned the rate of tax on beer authorized by 26 number will be shown on each return U.S.C. 5051(a)(2) by tax return, Form on Form 5000.24, filed under this part. 5000.24, shall prepare a notice con- Failure of the taxpayer to include the taining the information required by employer identification number on paragraph (b) of this section. The brew- Form 5000.24 may result in imposition er shall file this notice with the appro- of the penalty specified in § 70.113 of priate TTB officer for the first return this chapter. A brewer shall apply for period (or prepayment return) during an employer identification number on which the brewer pays tax on beer at IRS Form SS–4 as provided in § 25.169. the reduced rate. The brewer shall file (Pub. L. 87–397, 75 Stat. 828, as amended (26 the notice each year in which payment U.S.C. 6109, 6676)) of the reduced rate of tax on beer is [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as made by return. amended by T.D. ATF–301, 55 FR 47605, Nov. (b) Information to be furnished. Each 14, 1990; T.D. TTB–79, 74 FR 37405, July 28, notice described in paragraph (a) of 2009] this section will contain the following information: § 25.169 Application for employer iden- (1) A statement that the brewer will tification number. not or is not likely to produce more (a) Form SS–4. The taxpayer must ob- than 2,000,000 barrels of beer in the cal- tain an employer identification num- endar year for which the notice is filed. ber (EIN) by filing an application with (2) A statement that the brewer is the Internal Revenue Service (IRS) on not a member of a controlled group of IRS Form SS–4. Form SS–4 is available brewers, or if the brewer is a member from the local IRS Service Center, of a controlled group of brewers, a from the IRS District Director, the IRS statement that the controlled group Web site at http://www.irs.gov or from will not or is not likely to produce TTB’s National Revenue Center. The more than 2,000,000 barrels of beer in taxpayer may file this form with IRS the calendar year for which the notice by mail, telephone, or fax by following is filed. the instructions on the form. (3) If the brewer operates more than (b) Time limit. If the taxpayer has not one brewery, a statement of the loca- already received, or applied for, an EIN tions of all the breweries and a state- at the time that the first return on ment of how the 60,000 barrel limita- TTB Form 5000.24, Excise Tax Return, tion for the reduced rate of tax will be is filed, the taxpayer must apply for an apportioned among the breweries. If EIN not later than seven days from the the brewer is a member of a controlled date of filing the Form 5000.24. group of brewers, a statement of the (c) One EIN only. Each taxpayer must names and locations of all other brew- obtain and use only one EIN, regardless ers in the group and a statement of of the number of places of business for how the 60,000 barrels limitation will which the proprietor is required to file be apportioned among the brewers in a tax return under this subpart. the group. (c) Perjury statement. Each notice de- (26 U.S.C. 6109) scribed in this section will be executed [T.D. TTB–79, 74 FR 37405, July 28, 2009]

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PREPAYMENT OF TAX the tax under the provisions of this subpart, the brewer shall prepay the § 25.173 Brewer in default. tax before any beer is removed for con- (a) When a remittance in payment of sumption or sale, or taken out of the taxes on beer is not paid upon present- brewery for removal for consumption ment of check or money order ten- or sale. dered, or when the brewer is otherwise (b) Method of prepayment. (1) Prepay- in default in payment of tax under ment will be made by forwarding a tax § 25.164, beer may not be removed for return, Form 5000.24, with remittance, consumption or sale or taken from the covering the tax on beer. brewery for consumption or sale until (2) If a brewer is required by § 25.165 the tax has been prepaid as provided in to make payment of tax by electronic § 25.175. The brewer shall continue to fund transfer, the brewer shall prepay prepay while in default and thereafter the tax before any beer can be removed until the appropriate TTB officer finds for consumption or sale by completing the revenue will not be jeopardized by the return and by forwarding it, in ac- deferred payment of tax as provided in cordance with the instructions on the § 25.164. form. At the same time, the brewer (b) Any remittance made while the shall direct his or her bank to make re- brewer is required to prepay under this mittance by EFT. section will be in cash or in the form of (3) For the purpose of complying with a certified, cashier’s or treasurer’s this section, the term forwarding means check drawn on any bank or trust com- depositing in the U.S. mail, properly pany incorporated under the laws of addressed in accordance with the in- the United States, or under the law of structions on the form. any State, Territory, or possession of (Act of Aug. 16, 1954, 68A Stat. 777, as amend- the United States, or in the form of a ed (26 U.S.C. 6311); sec. 201, Pub. L. 85–859, 72 money order as provided in § 70.61 of Stat. 1335, as amended (26 U.S.C. 5061)) this chapter (payment by check or money order), or will be made in the [T.D. ATF–224, 51 FR 7673, Mar. 5, 1987, as form of an electronic fund transfer as amended by T.D. ATF–251, 52 FR 19313, May 22, 1987; T.D. TTB–146, 82 FR 1130, Jan. 4, provided by §§ 25.164 and 25.165. 2017] [T.D. ATF–224, 51 FR 7673, Mar. 5, 1987, as amended by T.D. ATF–251, 52 FR 19313, May FAILURE TO PAY TAX 22, 1987; T.D. ATF–301, 55 FR 47605, Nov. 14, 1990] § 25.177 Evasion of or failure to pay tax; failure to file a tax return. § 25.174 Bond not sufficient. Sections 5671, 5673, 5684, 6651, and 6656 When a brewer has filed a bond and of Title 26 United States Code provide the penal sum of the brewer’s bond is penalties for evasion or failure to pay in less than the maximum amount, the tax on beer or for failure to file a tax brewer shall prepay the tax on any return. withdrawal which would cause the out- (Act of Aug. 16, 1954, 68A Stat. 821, as amend- standing liability for tax to exceed the ed, 826, as amended (26 U.S.C. 6651, 6656); sec. limits of coverage of the bond. Prepay- 201, Pub. L. 85–859, 72 Stat. 1408, 1410, as ments will be made in accordance with amended (26 U.S.C. 5671, 5673, 5684)) § 25.175. [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as Subpart L—Removals Without amended by T.D. TTB–146, 82 FR 1130, Jan. 4, Payment of Tax 2017] TRANSFER TO ANOTHER BREWERY OF § 25.175 Prepayment of tax. SAME OWNERSHIP (a) General. When a brewer has filed a bond and a brewer is required to prepay § 25.181 Eligibility. tax under § 25.173, or if the penal sum of A brewer may remove beer without the bond, Form 5130.22, is insufficient payment of tax for transfer to any for deferral of payment of tax on beer other brewery of the same ownership. to be removed for consumption or sale, These removals include a removal from or if a brewer is not entitled to defer a brewery owned by one corporation to

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a brewery owned by another corpora- lowance of the loss if there are no cir- tion if (a) one corporation owns the cumstances indicating that the beer, or controlling interest in the other cor- any portion of the beer lost, was stolen poration, or (b) the controlling interest or otherwise diverted to an unlawful in each corporation is owned by the purpose. same person. Beer removed under this (c) Losses requiring claim. If loss of section may, while in transit, be recon- beer during transit exceeds two percent signed to another brewery of the same of the quantity shipped, the brewer ownership or be returned to the ship- shall submit a claim under penalties of ping brewery. perjury for remission of the tax on the (Sec. 201, Pub. L. 85–859, 72 Stat. 1389, as entire loss. The brewer shall prepare amended (26 U.S.C. 5414)) and submit the claim as provided in § 25.286. § 25.182 Kinds of containers. (d) Losses requiring immediate report. A brewer may transfer beer without The brewer shall report to the appro- payment of tax from one brewery to priate TTB officer a loss by fire, theft, another brewery belonging to the same casualty or any other unusual loss as brewer (a) in the brewer’s packages or soon as it becomes known. (b) in bulk containers, subject to limitations and conditions as may be im- (Sec. 201, Pub. L. 85–859, 72 Stat. 1335, as posed by the appropriate TTB officer. amended 1389 (26 U.S.C. 5056, 5414)) The brewer shall mark, brand or label [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as containers as provided by subpart J of amended by T.D. ATF–437, 66 FR 5479, Jan. this part. 19, 2001; T.D. TTB–146, 82 FR 1130, Jan. 4, 2017] (Sec. 201, Pub. L. 85–859, 72 Stat. 1389, as amended (26 U.S.C. 5414)) § 25.185 Mingling. § 25.183 Determination of quantity Beer transferred without payment of transferred. tax from one brewery to another brew- The shipping brewer shall determine ery belonging to the same brewer may the quantity of beer shipped at the be mingled with beer of the receiving time of removal from the consignor brewery. The brewer may handle the brewery, and the receiving brewer shall beer transferred in accordance with the determine the quantity of beer re- requirements of this part relating to ceived at the time of receipt at the beer produced in the receiving brewery. consignee brewery. The brewer shall (Sec. 201, Pub. L. 85–859, 72 Stat. 1389, as equip the consignor and consignee amended (26 U.S.C. 5414)) breweries with suitable measuring devices to allow accurate determination § 25.186 Record of beer transferred. of the quantities of beer to be shipped and received in bulk conveyances. (a) Preparation of invoice. When beer is transferred between breweries with- (Sec 201, Pub. L. 85–859, 72 Stat. 1389, as out payment of tax, the shipping brew- amended (26 U.S.C. 5414)) er shall prepare a serially numbered in- § 25.184 Losses in transit. voice or commercial record, in duplicate, covering the transfer. The invoice (a) Liability for losses. The brewery to will be marked ‘‘transfer without pay- which beer is transferred is liable for ment of tax’’ and will contain the fol- the tax on beer lost in transit. If beer lowing information: is reconsigned while in transit or re- (1) Name and address of shipping turned to the shipping brewery, the brewer; brewery to which the beer is reconsigned or returned is liable for the tax (2) Date of shipment; on beer lost in transit. (3) Name and address of receiving (b) Losses allowable without claim. If brewer; loss of beer being transferred does not (4) For cases, the number and size of exceed two percent of the quantity cases and the total barrels; shipped, the brewer is not required to (5) For kegs, the number and size of file a report of loss or a claim for al- kegs and the total barrels;

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(6) For shipments in bulk containers, material at alcohol fuel plants quali- the type of container, identity of the fied under subpart Y of part 19 of this container and the total barrels. chapter. (b) Reconsignment of beer. When beer (Sec. 201, Pub. L. 85–859, 72 Stat. 1334, as is reconsigned in transit to another amended (26 U.S.C. 5053)) brewery of the same ownership, the shipping brewer shall (1) prepare a new § 25.192 Removal of sour or damaged invoice showing reconsignment to an- beer. other brewery and shall void all copies (a) Containers. The brewer shall re- of the original invoice, or (2) shall move sour or damaged beer (1) in casks mark all copies of the original invoice or other packages, containing not less with the words ‘‘Reconsigned to than one barrel each and unlike those ,’’ followed by the name and ad- lll ordinarily used for packaging beer, or dress of the brewery to which the beer (2) in tanks, tank cars, tank trucks, is reconsigned. tank ships, barges, or deep tanks of a (c) Disposition of invoice. On shipment vessel. The brewer shall mark the na- of the beer, the shipping brewer shall ture of the contents on each container. send the original copy of the invoice to (b) Beer meter. The brewer shall re- the receiving brewer, and shall retain move sour or damaged beer without the other copy for the brewery records. passing it through the meter (if any) or On receipt of the beer, the receiving racking machine. brewer (including a brewer to whom (c) Records and reports. The brewer beer was returned or reconsigned in shall record the removal of sour or transit) shall note on the invoice any damaged beer in daily records under discrepancies in the beer received, and § 25.292 and on the Brewer’s Report of retain the invoice in the brewery Operations, Form 5130.9. records. (d) Preparation of records and report. (Sec. 201, Pub. L. 85–859, 72 Stat. 1334, as The shipping brewer shall use the in- amended (26 U.S.C. 5033)) voice showing beer removed to another [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as brewery without payment of tax in pre- amended by T.D. ATF–345, 58 FR 40357, July paring daily records under § 25.292 and 28, 1993] in preparing the Brewer’s Report of Op- erations, Form 5130.9. The receiving REMOVALS FOR ANALYSIS, RESEARCH, brewer (including a brewer to whom DEVELOPMENT OR TESTING beer was returned or reconsigned in § 25.195 Removals for analysis. transit) shall use the invoice showing beer received from another brewery A brewer may remove beer, without without payment of tax in preparing payment of tax, to a laboratory for daily records under § 25.292 and in pre- analysis to determine the character or paring the Brewer’s Report of Oper- quality of the product. Beer may be re- ations, Form 5130.9. moved for analysis in packages or in bulk containers. The brewer shall (Sec. 201. Pub. L. 85–859, 72 Stat. 1389, as record beer removed for analysis in amended (26 U.S.C. 5414)) daily records under § 25.292 and on the [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as Brewer’s Report of Operations, Form amended by T.D. ATF–345, 58 FR 40357, July 5130.9. 28, 1993] (Sec. 201, Pub. L. 85–859, 72 Stat. 1334, as REMOVAL OF BEER UNFIT FOR BEVERAGE amended (26 U.S.C. 5053)) USE [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF–345, 58 FR 40357, July § 25.191 General. 28, 1993] A brewer may remove sour or damaged beer, or beer which the brewer has § 25.196 Removals for research, devel- deliberately rendered unfit for bev- opment or testing. erage use, from the brewery without (a) A brewer may remove beer, with- payment of tax for use in manufac- out payment of tax, for use in research, turing. Unfit beer may be removed development, or testing (other than under this section for use as distilling consumer testing or other market

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analysis) of processes, systems, mate- ery in bottles, kegs, or in bulk con- rials, or equipment relating to beer or tainers. brewery operations. Beer may be re- (Sec. 309, Tariff Act of 1930, 46 Stat. 690, as moved for research, development or amended (19 U.S.C. 1309); sec. 3, Act of June testing in packages or in bulk con- 18, 1934, 48 Stat. 999, as amended (19 U.S.C. tainers. 81c); sec. 201, Pub. L. 85–859, 72 Stat. 1334, as (b) The brewer shall mark each bar- amended (26 U.S.C. 5053)) rel, keg, case, or shipping container [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, T.D. with the name and address of the brew- TTB–8, 69 FR 3830, Jan. 27, 2004] er and of the consignee, the identity of the product, and the quantity of the BEER FOR PERSONAL OR FAMILY USE product. If necessary to protect the § 25.205 Production. revenue, the appropriate TTB officer may require a brewer to mark each (a) Any adult may produce beer, container with the words ‘‘Not for Con- without payment of tax, for personal or sumption or Sale.’’ If beer is removed family use and not for sale. An adult is in a bulk conveyance, the brewer shall any individual who is 18 years of age or place the marks on the route board of older. If the locality in which the the conveyance. household is located requires a greater (c) The brewer shall record beer re- minimum age for the sale of beer to in- moved for research, development, or dividuals, the adult shall be that age testing in daily records under § 25.292 before commencing the production of beer. This exemption does not author- and on the Brewer’s Report of Oper- ize the production of beer for use con- ations, Form 5130.9. trary to State or local law. (Sec. 201, Pub. L. 85–859, 72 Stat. 1334, as (b) The production of beer per house- amended (26 U.S.C. 5053)) hold, without payment of tax, for per- [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as sonal or family use may not exceed: amended by T.D. ATF–345, 58 FR 40357, July (1) 200 gallons per calendar year if 28, 1993] there are two or more adults residing in the household, or REMOVAL OF BEER TO A CONTIGUOUS (2) 100 gallons per calendar year if DISTILLED SPIRITS PLANT there is only one adult residing in the household. § 25.201 Removal by pipeline. (c) Partnerships except as provided in A brewer may remove beer from the § 25.207, corporations or associations brewery, without payment of tax, by may not produce beer, without pay- pipeline to the bonded premises of a ment of tax, for personal or family use. distilled spirits plant which is author- (Sec. 201, Pub. L. 85–859, 72 Stat. 1334, as ized to produce distilled spirits and amended (26 U.S.C. 5053)) which is located contiguous to the brewery. § 25.206 Removal of beer. (Sec. 201, Pub. L. 85–859, 72 Stat. 1365, as Beer made under § 25.205 may be re- amended, 1389, as amended (26 U.S.C. 5222, moved from the premises where made 5412)) for personal or family use including use at organized affairs, exhibitions or EXPORTATION competitions such as homemaker’s contests, tastings or judging. Beer re- § 25.203 Exportation without payment moved under this section may not be of tax. sold or offered for sale. A brewer may remove beer without (Sec. 201, Pub. L. 85–859, 72 Stat. 1334, as payment of tax (a) for exportation, (b) amended (26 U.S.C. 5053)) for use as supplies on vessels and aircraft, or (c) for transfer to and deposit § 25.207 Removal from brewery for in foreign-trade zones for exportation personal or family use. or for storage pending exportation, in Any adult, as defined in § 25.205, who accordance with Part 28 of this chap- operates a brewery under this part as ter. Beer may be removed from a brew- an individual owner or in partnership

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with others, may remove beer from the (2) Quantity of beer returned; brewery without payment of tax for (3) If the title to the beer has passed, personal or family use. The amount of the name and address of the person re- beer removed for each household, with- turning the beer; and out payment of tax, per calendar year (4) Name and address of the brewery may not exceed 100 gallons if there is from which the beer was removed, if one adult residing in the household or different from the brewery to which re- 200 gallons if there are two or more turned. adults residing in the household. Beer (d) Supporting records. The records of removed in excess of the above limita- returned beer will be supported by in- tions will be reported as a taxable re- voices, credit memoranda or other moval. commercial papers, and will differen- tiate beween beer returned to the brew- (Sec. 201, Pub. L. 85–859, 72 Stat. 1334, as ery from which removed and beer re- amended (26 U.S.C. 5053)) turned to a brewery different from the one from which removed. Subpart M—Beer Returned to (Sec. 201, Pub. L. 85–859, 72 Stat. 1334, as Brewery amended, 1335, as amended, 1390, as amended (26 U.S.C. 5054, 5056, 5415)) § 25.211 Beer returned to brewery. (a) General. Beer, produced in the § 25.212 Beer returned to brewery United States, on which the brewer has from which removed. paid or determined the tax may be re- If beer on which the tax has been de- turned to any brewery of the brewer. termined or paid is returned to the Upon return of the beer to the brewery, brewery from which removed, the brew- the brewer shall determine the actual er shall take the quantity of beer as an quantity of beer received, expressed in offset or deduction against the quan- barrels. For cases or bottles, the label tity of beer removed for consumption may be used to determine the quantity. or sale from the brewery on that busi- When kegs or cases containing less ness day, as provided in § 25.159 than the original contents are received, (Sec. 201, Pub. L. 85–859, 72 Stat. 1335, as the brewer shall determine the actual amended, 1390, as amended (26 U.S.C. 5056, quantity of beer by weight or by other 5415)) accurate means. The brewer shall determine the balling and alcohol con- § 25.213 Beer returned to brewery tent of returned keg beer unless the other than that from which re- keg is equipped with tamper-proof fit- moved. tings. The quantity of beer returned (a) Refund or adjustment of tax. If beer may be established by weighing indi- on which the tax has been determined vidual packages and subtracting pack- or paid is returned to a brewery of the age weight, or by weighing accumu- brewer other than the one from which lated beer and subtracting tare weight removed, the brewer may make a claim of dumpsters, pallets, packages and the for refund or relief of tax or may make like. an adjustment to the beer tax return, (b) Disposition of returned beer. The for the tax on the beer returned to the brewer may dispose of beer returned brewery. The brewer may not take an under this subpart in any manner pre- offset for beer returned to the brewery scribed for beer which has never left other than the one from which re- the brewery. If returned beer is again moved. Procedures for filing claims for removed for consumption or sale, tax refund or relief of tax or for making ad- will be determined and paid without re- justments to the beer tax return are spect to the tax which was determined contained in subpart T of this part. or paid at the time of prior removal of (b) Notice. A brewer need not file no- the beer. tice of intention to return beer to a (c) Records. For beer returned to the brewery other than the one from which brewery under this subpart, the brew- removed unless required by the appro- er’s daily records under § 25.292 will priate TTB officer. When a notice is re- show: quired, the brewer shall serially num- (1) Date; ber each notice and execute it under

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penalties of perjury as defined in § 25.11. mined at a location other than any of The brewer must file it with the appro- the breweries operated by the brewer, priate TTB officer. The notice will con- upon compliance with this subpart. tain the following information: (Sec. 201, Pub. L. 85–859, 72 Stat. 1335, as (1) The number and sizes of kegs and amended (26 U.S.C. 5056)) the actual quantity of beer, in barrels; or the number of cases and the number [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986; 51 FR and sizes of bottles within the cases 9190, Mar. 18, 1986; T.D. ATF–268, 53 FR 8629, and the actual quantity of beer, in bar- Mar. 16, 1988, as amended by T.D. 372, 61 FR 20724, May 8, 1996; T.D. TTB–91, 76 FR 5478, rels; Feb. 1, 2011] (2) The name and address of the brewery from which the beer was removed; § 25.222 Notice of brewer. (3) A statement that the tax on the (a) Beer to be destroyed. When a brew- beer has been fully paid or determined er possesses beer which has been tax- and the rate at which the tax on the paid or tax determined and which the beer was paid or determined; and brewer wishes to destroy at a location (4) If the title to the beer has passed, other than at any of the brewer’s brew- the name and address of the person re- eries, the brewer shall give written no- turning the beer. tice of intention to destroy the beer. (c) Return of beer. If the brewer is re- The brewer must submit this notice to quired to file a notice of intention to the appropriate TTB officer. return beer to the brewery, the brewer (b) Execution of notice. The brewer may bring the beer onto the brewery shall serially number each notice and premises prior to filing the notice. The execute each notice under penalties of brewer shall segregate the returned perjury as defined in § 25.11. The brewer beer from all other beer at the brewery shall specify the date on which the beer and clearly identify it as returned beer. is to be destroyed; this date may not be The returned beer will be retained in- less than 12 days from the date the no- tact for inspection by an appropriate tice is mailed or delivered to the appro- TTB officer until the notice has been priate TTB officer. filed and disposition authorized. (c) Information to be furnished. The (Sec. 201, Pub. L. 85–859, 72 Stat. 1335, as notice will contain the following infor- amended (26 U.S.C. 5056)) mation: [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as (1) The number and sizes of kegs and amended by T.D. ATF–437, 66 FR 5479, Jan. the actual quantity of beer, in barrels; 19, 2001] or the number of cases and the number and sizes of bottles within the cases, Subpart N—Voluntary Destruction and the actual quantity of beer in barrels. When kegs containing less than § 25.221 Voluntary destruction of beer. the actual contents are to be de- (a) On brewery premises. (1) A brewer stroyed, the brewer shall determine the may destroy, at the brewery, beer on actual content of beer by weight or by which the tax has not been determined other accurate means. or paid. (2) The date on which the beer was (2) A brewer operating a tavern on received for destruction. brewery premises under § 25.25 may de- (3) A statement that the tax on the stroy taxpaid or tax-determined beer beer has been fully paid or determined stored on brewery premises, in accord- and the rate at which the tax on the ance with the requirements of § 25.225. beer was paid or determined. (b) Destruction without return to brew- (4) If the title of the beer has passed, ery. A brewer may destroy beer on the name and address of the person re- which the tax has been paid or deter- turning the beer.

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(5) The location at which the brewer ing adjustments to tax returns are con- desires to destroy the beer and the rea- tained in subpart T of this part. son for not returning the beer to the (Sec. 201, Pub. L. 85–859, 72 Stat. 1335, as brewery. amended (26 U.S.C. 5056)) (Sec. 201, Pub. L. 85–859, 72 Stat. 1335, as amended (26 U.S.C. 5056)) § 25.225 Destruction of taxpaid beer which was never removed from [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as brewery premises. amended by T.D. ATF–437, 66 FR 5479, Jan. 19, 2001] (a) General. A brewer operating a tavern on brewery premises under § 25.25 § 25.223 Destruction of beer off brew- may destroy taxpaid or tax-determined ery premises. beer which was never removed from (a) Destruction without supervision. A brewery premises, in accordance with brewer may destroy beer without su- the recordkeeping requirements of pervision if the appropriate TTB officer paragraph (b) of this section, and with does not advise the brewer before the the benefit of the tax refund provisions date specified in the notice that de- of paragraph (c) of this section. struction of the beer is to be super- (b) Recordkeeping. (1) When taxpaid or vised. tax-determined beer which was never (b) Destruction with supervision. The removed from brewery premises is de- appropriate TTB officer may require stroyed, the brewer shall prepare a that an appropriate TTB officer verify record of the quantity of beer de- the information in the notice of destroyed, and the reason for, date of, struction or witness the destruction of and method of, destruction. The brewer the beer. The appropriate TTB officer may prepare this record on Form 2635 may also require a delay in the de- (5620.8) for submission as a claim under struction of the beer or, if the place of § 25.283. destruction is not readily accessible to (2) When required by the appropriate an appropriate TTB officer, may re- TTB officer, the brewer shall notify the quire that the beer be moved to a more appropriate TTB officer prior to the in- convenient location. In this case, the tended destruction, in accordance with brewer may not destroy the beer except procedures established by the appro- under the conditions imposed by the priate TTB officer. appropriate TTB officer. (c) Refund of tax. After destruction is completed, the brewer may file a claim (Sec. 201, Pub. L. 85–859, 72 Stat. 1335, as for refund or credit of tax, in accord- amended (26 U.S.C. 5056)) ance with § 25.283(c). [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF–437, 66 FR 5479, Jan. [T.D. ATF–268, 53 FR 8629, Mar. 16, 1988, as 19, 2001; T.D. TTB–91, 76 FR 5478, Feb. 1, 2011] amended by T.D. TTB–91, 76 FR 5478, Feb. 1, 2011] § 25.224 Refund or adjustment of tax. (a) Claim for refund or relief of tax. The Subpart O—Beer Purchased From tax paid by a brewer on beer produced Another Brewer in the United States and destroyed in accordance with this subpart may be § 25.231 Finished beer. refunded to the brewer. If the tax has (a) A brewer may obtain beer in bar- not been paid, the brewer may be re- rels and kegs, finished and ready for lieved of liability for the tax. Claims sale from another brewer. The pur- for refund or relief of tax will be filed chasing brewer may furnish the pro- as provided in subpart T of this part. ducing brewer barrels and kegs marked (b) Adjustments to the excise tax return. with the purchasing brewer’s name and A brewer may make an adjustment location. The producing brewer shall (without interest) to the excise tax re- pay the tax as provided in subpart K of turn, Form 5000.24, covering the tax this part. paid on beer produced in the United (b) A brewer may not purchase tax- States and destroyed in accordance paid or tax determined beer from an- with this subpart. Procedures for mak- other brewer in bottles or cans which

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bear the name and address of the pur- taxable under section 5051 I.R.C.’’ chasing brewer. Other information which is not incon- (Sec. 201, Pub. L. 85–859, 72 Stat. 1389, as sistent with the requirements of this amended (26 U.S.C. 5413)) section may be shown on bottle lablels. (d) Cases. The brewer shall mark § 25.232 Basic permit. cases or shipping containers to show A brewer who engages in the business the nature of the product and the name of purchasing beer for resale is required or trade name and address of the brew- to possess a wholesaler’s or importer’s er. basis permit under the provisions of section 3(c) of the Federal Alcohol Ad- (Sec. 201, Pub. L. 85–859, 72 Stat. 1389, as amended (26 U.S.C. 5411)) ministration Act and part 1 of this chapter. Subpart Q—Removal of Brewer’s Subpart P—Cereal Beverage Yeast and Other Articles § 25.241 Production. § 25.251 Authorized removals. Brewers may produce cereal beverage (a) Brewer’s yeast. A brewer may re- and remove it without payment of tax move brewer’s yeast, in liquid or solid from the brewery. The method of pro- form containing not less than 10 per- duction shall insure that the alcohol cent solids (as determined by the meth- content of the cereal beverage will not ods of analysis of the American Society increase while in the original container of Brewing Chemists), from the brew- after removal from the brewery. The ery in barrels, tank trucks, in other brewer shall keep cereal beverage sepa- suitable containers, or by pipeline. rate from beer, and shall measure the (b) Containers. Containers will bear a quantity of cereal beverage transferred label giving the name and location of for packaging in accordance with the brewery and including the words § 25.41. ‘‘Brewer’s Yeast.’’ (Sec. 201, Pub. L. 85–859, 72 Stat. 1389, as (c) Pipeline. If brewer’s yeast is re- amended (26 U.S.C. 5411)) moved by pipeline, the pipeline will be § 25.242 Markings. described in the Brewer’s Notice, Form 5130.10. The premises where the brew- (a) Designation. When bottled or er’s yeast is received is subject to in- packaged, cereal beverage may be des- spection by an appropriate TTB officer ignated ‘‘Cereal Beverage,’’ ‘‘Malt Bev- during ordinary business hours. erage,’’ ‘‘Near Beer,’’ or other distinctive name. If designated ‘‘Near Beer,’’ (d) Other articles. A brewer may re- those words will be printed identically move malt, malt syrup, wort, and other in the same size or style of type, in the articles from the brewery. same color of ink, and on the same (e) Methods of Analysis of the American background. Society of Brewing Chemists, Seventh Edi- (b) Barrels and kegs. A brewer may re- tion (1976). In reference to paragraph (a) move cereal beverage in barrels and of this section, this incorporation by kegs if the sides are durably painted at reference was approved by the Director each end with a white stripe not less of the Federal Register on March 23, than 4 inches in width and the heads 1981, and is available for inspection or are painted in a solid color, with con- at the National Archives and Records spicuous lettering in a contrasting Administration (NARA). For informa- color reading ‘‘Nontaxable under section on the availability of this mate- tion 5051 I.R.C.’’ The brewer shall also rial at NARA, call 202–741–6030, or go legibly mark the brewer’s name or to: http://www.archives.gov/fed- trade name and the address on the con- erallregister/ tainer. codeloflfederallregulations/ (c) Bottles. Bottle labels shall show ibrllocations.html. This publication is the name or trade name and address of available from the American Society of the brewer, the distinctive name of the beverage, if any, and the legend ‘‘Non-

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Brewing Chemists, 40 Pilot Knob Road, which has not been concentrated and St. Paul, Minnesota 55121. reconstituted. (Sec. 201, Pub. L. 85–859, 72 Stat. 1389, as (Sec. 201, Pub. L. 85–859, 72 Stat. 1388, as amended (26 U.S.C. 5411)) amended (26 U.S.C. 5401)) [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as amended at 69 FR 18803, Apr. 9, 2004] amended by T.D. TTB–8, 69 FR 3830, Jan. 27, 2004]

§ 25.252 Records. § 25.262 Restrictions and conditions on (a) Production. The brewer shall keep processes of concentration and re- records of the production of malt constitution. syrup, wort, and other articles which (a) Conditions on concentration. A are removed from the brewery. The brewer may not employ any process of record shall include the quantities and concentration which separates alcohol kinds of materials used, and in the case spirits from any fermented substance. of wort and concentrated wort, the (b) Conditions on reconstitution—(1) balling. The process of reconstitution of beer will consist of the addition to the con- (b) Removals. The brewer shall keep centrate of carbon dioxide and water records of removals of brewer’s yeast, only. malt and other articles from the brew- (2) A brewer may not employ any ery. The record shall include the quan- process of concentration or reconstitu- tity and date of removal of each lot, tion unless the beer upon reconstitu- and the name and address of the con- tion will, without the addition of any signee. These records may consist of substance other than carbon dioxide invoices or shipping documents. and water, possess the taste, aroma, (c) Inspection. All records under this color, and other characteristics of beer section shall be available for inspec- which has not been concentrated. tion at the brewery by an appropriate (3) The process of reconstitution TTB officer during normal business shall provide for the addition of suffi- hours. cient water to restore the concentrate to a volume not less than, and an alco- (Sec. 201, Pub. L. 85–859, 72 Stat. 1390, as hol content not greater than, that of amended (26 U.S.C. 5415)) the beer used to produce the concentrate. Subpart R—Beer Concentrate (Sec. 201, Pub. L. 85–859, 72 Stat. 1315, as amended, 1388, as amended (26 U.S.C. 5002, § 25.261 General. 5401)) (a) Authorized processes. A brewer may, in accordance with this subpart— § 25.263 Production of concentrate and (1) Produce concentrate from beer, reconstitution of beer. (2) Reconstitute beer from con- (a) Operations at brewery. A brewer centrate, may concentrate beer or reconstitute (3) Transfer concentrate from one beer only at a brewery. brewery to another brewery of the (b) Marking of containers. Containers of concentrate transferred to other same ownership, and breweries of the same ownership, and (4) Remove concentrate without pay- containers of concentrate removed for ment of tax for exportation, or for export shall be marked, branded and la- transfer to and deposit in a foreign- beled in the same manner as prescribed trade zone for exportation or for stor- for containers of beer in subpart J of age pending exportation in accordance this part. All containers shall be iden- with Part 28 of this chapter. tified as containers of beer con- (b) Brewery treatment of concentrate. centrate. Beer reconstituted from concentrate in (c) Mingling with beer. A brewer may accordance with this subpart shall (ex- not mingle concentrate with cept with respect to the additional la- unconcentrated beer. A brewer may beling of reconstituted beer under mingle reconstituted beer with other § 25.263) be treated the same as beer beer at the brewery.

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(d) Additional labeling. Barrels, kegs, ceiving brewer shall note on the in- and bottles containing beer produced voice any discrepancies in the con- from concentrate will show by label or centrate received and retain the in- otherwise the statement ‘‘PRODUCED voice in the brewery records. FROM . . . CONCENTRATE,’’ the blank to be filled in with the appro- Subpart S—Pilot Brewing Plants priate class designation of the beer (beer, lager, ale, stout, etc.) from which § 25.271 General. the concentrate was made. The statement will be conspicuous and readily (a) Establishment. A person may es- legible and, in the case of bottled beer, tablish and operate a pilot brewing will appear in direct conjunction with, plant off the brewery premises for re- and as a part of, the class designation. search, analytical, experimental, or de- All parts of the class designation will velopmental purposes relating to beer appear in lettering of substantially the or brewery operations. Pilot brewing same size and kind. plants will be established as provided (e) Records and reports. Brewers pro- in this subpart. ducing concentrate and brewers recon- (b) Authorized removals. Beer may be stituting beer from concentrate shall removed from a pilot brewing plant keep the records and reports required only for analysis or organoleptic exam- by subpart U of this part. ination. (c) Transfers between brewery and pilot § 25.264 Transfer between breweries. brewing plant. Subject to subpart L of (a) Authorized transfers. A brewer may this part, beer may be transferred to a remove from the brewery, without pay- pilot brewing plant from a brewery of ment of tax, concentrate produced the same ownership, and beer may be from beer for transfer to any other transferred without payment of tax brewery of the same ownership (within from a pilot brewing plant to a brewery the limits of ownership described in of the same ownership. § 25.181). (d) Other regulations applicable. The (b) Record of concentrate transferred. provisions of subparts A, B, F, I, K, and When transferring concentrate between of §§ 25.63, 25.64, and 25.21 are applicable breweries, the shipping brewer shall to pilot brewing plants established prepare for each conveyance a serially under this subpart. Also, the provisions numbered invoice or commercial of §§ 25.72–25.75, 25.77, 25.92 and 25.94– record covering the transfer. The in- 25.105 relating to bonds, and consents voice will be clearly marked to indi- of surety, and of §§ 25.131–25.134 are ap- cate that concentrate produced from plicable to bonds and consents of sur- beer is being transferred. The invoice ety given, and to changes in the propri- will contain the following information: etorship, location, and premises of (1) Name and address of shipping pilot brewing plants established under brewer; this subpart. (2) Date of shipment; (3) Name and address of receiving (Sec. 4, Pub. L. 91–673, 84 Stat. 2057, as amended (26 U.S.C. 5417)) brewer; (4) The number of containers trans- § 25.272 Application. ferred, the balling, percentage of alcohol by volume, and the total barrels of (a) Form of application. Any person concentrate; and desiring to establish a pilot brewing (5) A description of the beer from plant under the subpart shall file an which the concentrate was produced in- application with the appropriate TTB cluding the number of barrels, balling, officer. The application will be in writ- and percentage of alcohol by volume. ing and will include the following: (c) Disposition of invoice. On shipment (1) Name and address of the appli- of the concentrate, the shipping brewer cant; shall send the original copy of the in- (2) Description of the premises and voice to the receiving brewer and shall equipment to be used in the operations; retain a copy for the brewery records. (3) Nature, purpose, and extent of the On receipt of the concentrate, the re- operations; and

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(4) A statement that the applicant (b) Penal sum. The penal sum of a agrees to comply with all provisions of bond covering the premises of a pilot this part applicable to the operations brewing plant will be an amount equal to be conducted. to the potential tax liability of the (b) Additional information. The appro- maximum quantity of beer on hand, in priate TTB officer may at any time be- transit to the plant, and unaccounted fore or after approval of an application, for at any one time, computed by mul- require the submission of additional in- tiplying the quantity of beer in barrels formation necessary for administration by the rate of tax in 26 U.S.C. 5051. The of this part or for protection of the rev- penal sum of the bond (or total penal enue. sum if original and strengthening (c) Authorization of operations. The bonds are filed) may not exceed $50,000 appropriate TTB officer may authorize or be less than $500. (c) The bond will the operation of a pilot brewing plant Conditions of bonds. be conditioned that the operator of the if it is determined that the plant will pilot brewing plant shall pay, or cause be operated solely for one or more of to be paid, to the United States accord- the purposes specified in § 25.271, and ing to the laws of the United States that operations will not jeopardize the and the provisions of this part, the revenue. taxes, including penalties and interest (d) Withdrawal of authorization. The for which the operator shall become appropriate TTB officer may withdraw liable, on all beer brewed, produced, or authorization to operate a pilot brew- received on the premises. ing plant if in his or her judgment, the (d) Bond exemption. A person is not revenue would be jeopardized by the required to provide a bond under this operations of the plant. section if the person is a brewer quali- (e) Commencement of operations. A per- fied under this part and if, under son may not begin operation of a pilot § 25.91(e), the person is exempt from brewing plant until the appropriate bond requirements applicable to brew- TTB officer has approved the applica- ers. tion required by this section. (Sec. 4, Pub. L. 91–673, 84 Stat. 2057, as (Sec. 4, Pub. L. 91–673, 84 Stat. 2057, as amended (26 U.S.C. 5417)) amended (26 U.S.C. 5417)) [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as § 25.273 Action on application. amended by T.D TTB–146, 82 FR 1130, Jan. 4, 2017] If the appropriate TTB officer approves the application for a pilot brew- § 25.275 [Reserved] ing plant, he or she will note approval on the application and forward a copy § 25.276 Operations and records. to the applicant. The applicant must (a) Commencement of operations. A per- file the copy of the approved applica- son may commence operation of a pilot tion at the premises, available for in- brewing plant upon receipt of the ap- spection by an appropriate TTB officer. proved application and any required bond. [T.D. ATF–437, 66 FR 5480, Jan. 19, 2001] (b) Reports. The operator of a pilot brewing plant is not required to file the § 25.274 Bond. Brewer’s Report of Operations, Form (a) Requirement. Except as provided in 5130.9. paragraph (d) of this section, any per- (c) Records. The operator of a pilot son requesting authorization to estab- brewing plant must maintain records lish a pilot brewing plant under this which, in the opinion of the appro- subpart shall execute and file a brew- priate TTB officer, are appropriate to er’s bond, Form 5130.22. A person may the type of operation being conducted. not begin operation of a pilot brewing These records will include information plant until receiving notice from the sufficient to account for the receipt, appropriate TTB officer of the approval production, and disposition of all beer of the bond. Operations may continue received or produced on the premises, only as long as an approved bond is in and the receipt (and disposition, if re- effect. moved) of all brewing materials. These

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records will be available for inspection ficer that the tax was paid or deter- by an appropriate TTB officer. mined at the higher rate of tax. (Sec. 4, Pub. L. 91–673, 84 Stat. 2057, as (Sec. 201, Pub. L. 85–859, 72 Stat. 1335, as amended (26 U.S.C. 5417)) amended (26 U.S.C. 5056)) [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as § 25.282 Beer lost by fire, theft, cas- amended by T.D. ATF–345, 58 FR 40357, July ualty, or act of God. 28, 1993; T.D. ATF–437, 66 FR 5480, Jan. 19, 2001; T.D. TTB–146, 82 FR 1130, Jan. 4, 2017] (a) General. The tax paid by any brewer on beer produced in the United § 25.277 Discontinuance of operations. States may be adjusted (without inter- When operations of a pilot brewing est) on the excise tax return, may be plant are to be discontinued, the oper- refunded or credited (without interest) ator shall notify the appropriate TTB or, if the tax has not been paid, the officer stating the purpose of the no- brewer may be relieved of liability for tice and giving the date of discontinu- the tax if, before transfer of title to the ance. When operations have been com- beer to any other person, the beer is pleted and all beer at the premises has lost, whether by theft or otherwise, or been disposed of and accounted for, the is destroyed or otherwise rendered appropriate TTB officer will note ap- unmerchantable by fire, casualty, or proval on the notice and return a copy act of God. The tax liability on exces- to the operator. sive losses of beer from transfer between breweries of the same ownership may be remitted as provided in § 25.286. Subpart T—Refund or Adjustment (b) Unmerchantable beer. When beer is of Tax or Relief From Liability rendered unmerchantable by fire, casualty, or act of God, refund, credit or § 25.281 General. adjustment of tax, or relief from liabil- (a) Reasons for refund or adjustment of ity of tax will not be allowed unless the tax or relief from liability. The tax paid brewer proves to the satisfaction of the by a brewer on beer produced in the appropriate TTB officer that the beer United States may be refunded, or ad- cannot be salvaged and returned to the justed on the tax return (without inter- market for consumption or sale. est) or, if the tax has not been paid, the (c) Beer lost or destroyed. When beer is brewer may be relieved of liability for lost or destroyed, whether by theft or the tax on: otherwise, the appropriate TTB officer (1) Beer returned to any brewery of may require the brewer to file a claim the brewer subject to the conditions for relief from the tax and to submit outlined in subpart M of this part; proof as to the cause of the loss. (2) Beer voluntarily destroyed by the (d) Beer lost by theft. When it appears brewer subject to the conditions out- that beer was lost by theft, the tax lined in subpart N of this part; shall be collected unless the brewer (3) Beer lost by fire, theft, casualty, proves to the satisfaction of the appro- or act of God subject to the conditions priate TTB officer that the theft oc- outlined in § 25.282. curred before removal from the brew- (b) Refund of beer tax excessively paid. ery and occurred without connivance, A brewer may be refunded the tax ex- collusion, fraud, or negligence on the cessively paid on beer subject to the part of the brewer, consignor, con- conditions outlined in § 25.285. signee, bailee, or carrier, or the em- (c) Rate of tax. Brewers who have filed ployees or agents of any of them. the notice required by § 25.167 and who (e) Notification of appropriate TTB offi- have paid the tax on beer at the re- cer. (1) A brewer who sustains a loss of duced rate of tax shall make claims for beer before transfer of title of the beer refund or relief of tax, or adjustments to another person and who desires to on the tax return, based upon the lower adjust the tax on the excise tax return rate of tax. However, a brewer may or to file a claim for refund or for relief make adjustments or claims for refund from liability of tax, must, on learning or relief of tax based on the higher rate of the loss of beer, immediately notify of tax if the brewer can establish to the in writing the appropriate TTB officer satisfaction of the appropriate TTB of- of the nature, cause, and extent of the

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loss, and the place where the loss oc- (9) A statement that the tax has been curred. Statements of witnesses or fully paid or determined; and other supporting documents must be (10) A reference to the notice (if re- furnished if available. quired) filed under §§ 25.213 or 25.222. (2) A brewer possessing (b) Beer lost, destroyed, or rendered unmerchantable beer and who desires unmerchantable. Claims for refund of to adjust the tax on the excise tax re- tax on beer lost, whether by theft or turn or to file a claim for refund or for otherwise, or destroyed or otherwise relief from liability must notify in rendered unmerchantable by fire, cas- writing the appropriate TTB officer, of ualty, or act of God shall contain: the circumstances by which the beer (1) Information required by para- became unmerchantable, and must graphs (a)(1), (2), (3), (5), and (6) of this state why the beer cannot be salvaged section; and returned to the market for con- (2) A statement of the circumstances sumption or sale. surrounding the loss; (f) Additional information. The appro- (3) When applicable, the reason the priate TTB officer may require the beer rendered unmerchantable cannot brewer to submit additional evidence be returned to the market for con- necessary to verify the tax adjustment sumption or sale; or for use in connection with a claim. (4) Date of the loss, and if lost in (Sec. 201, Pub. L. 85–859, 72 Stat. 1335, as transit, the name of the carrier; amended (26 U.S.C. 5056)) (5) A reference incorporating the notice required by § 25.282; and [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as (6) When possible, affidavits of per- amended by T.D. ATF–437, 66 FR 5480, Jan. 19, 2001] sons having knowledge of the loss, unless the affidavits are contained in the § 25.283 Claims for refund of tax. notice given under § 25.282. (a) Beer returned to brewery or volun- (c) Voluntary destruction of taxpaid tarily destroyed at a location other than a beer which was never removed from brew- brewery. Claims for refund of tax on ery premises. Claims for refund or credit beer returned to a brewery under the of tax on beer voluntarily destroyed provisions of § 25.213 or voluntarily de- under the provisions of § 25.225, shall in- stroyed at a location other than a clude: brewery shall include: (1) Information required by para- (1) The name and address of the brew- graphs (a)(1), (a)(2), (a)(3), (a)(5), and er filing the claim, the address of the (a)(9) of this section; and brewery from which the beer was re- (2) The information contained in the moved, and the address of the brewery record required by § 25.225(b). to which the beer was returned, as ap- (d) Additional evidence. The appro- plicable; priate TTB officer may require the sub- (2) The quantity of beer covered by mission of additional evidence in sup- the claim and the rate(s) of tax at port of any claim filed under this sec- which the beer was tax paid or deter- tion. mined; (e) Filing of claim. Claim for refund of (3) The amount of tax for which the tax shall be filed on Form 2635 (5620.8). claim is filed; Claims shall be filed within 6 months (4) The reason for return or voluntary after the date of the return, loss, de- destruction of the beer and the related struction, or rendering facts; unmerchantable. Claims will not be al- (5) Whether the brewer is indemnified lowed if filed after the prescribed time by insurance or otherwise in respect of or if the claimant was indemnified by the tax, and if so, the nature of the in- insurance or otherwise in respect of the demnification; tax. (6) The claimant’s reasons for believ- (Sec. 201, Pub. L. 85–859, 72 Stat. 1335, as ing the claim should be allowed; amended (26 U.S.C. 5056)) (7) The date the beer was returned to [T.D. ATF–224, 51 FR 7673, Mar. 5, 1987, as the brewery, if applicable; amended by T.D. ATF–251, 52 FR 19314, May (8) The name of the person from 22, 1987; T.D. ATF–268, 53 FR 8629, Mar. 16, whom the beer was received; 1988; T.D. ATF–437, 66 FR 5480, Jan. 19, 2001]

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§ 25.284 Adjustment of tax. or rendering unmerchantable of the (a) Adjustment of tax in lieu of refund. beer. (2) Adjustment of the tax paid will be In lieu of filing a claim for refund of made without interest. tax as provided in § 25.283, a brewer (3) An adjustment may not be taken may make an adjustment (without in- if the brewer was indemnified by insur- terest) to the excise tax return, Form ance or otherwise in respect of the tax. 5000.24, for the amount of tax paid on (f) Records. When brewers make ad- beer returned to the brewery, volun- justments on the excise tax return in tarily destroyed, lost, destroyed, or lieu of filing a claim, they shall keep rendered unmerchantable. the following records; (b) Beer returned to brewery other than (1) For beer returned to the brewery from which removed. An adjustment or voluntarily destroyed, the records may be made on the excise tax return required by §§ 25.283(a)(1), (2), (4), (5), for the amount of tax paid on beer re- (7), (8), and (10). turned to the brewery under § 25.213. (2) For beer lost, destroyed, or ren- The adjustment will be made on the dered unmerchantable, the records re- tax return filed for the brewery to which the beer was returned. The ad- quired by § 25.283 (a)(1), (2), (5), (b) (2), justment may not be made prior to the (3), (4), (5), and (6). return of beer to the brewery. If the (Sec. 201, Pub. L. 85–859, 72 Stat. 1335, as brewer is required to file a notice under amended (26 U.S.C. 5056)) § 25.213, the adjustment may not be [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as made until the appropriate TTB officer amended by T.D. ATF–437, 66 FR 5480, Jan. authorizes disposition of the beer. 19, 2001; T.D. ATF–437a, 66 FR 17809, Apr. 4, (c) Beer voluntarily destroyed. An ad- 2001] justment may be made on the excise tax return for the amount of tax paid § 25.285 Refund of beer tax excessively on beer voluntarily destroyed under paid. subpart N of this part. The adjustment (a) Eligibility. A brewer who, under will be made on the tax return filed for the provisions of § 25.152, is eligible to the brewery from which the beer was pay the reduced rate of tax on beer pre- removed. The adjustment may not be scribed by 26 U.S.C. 5051 (a)(2), but who made prior to the destruction of the did not pay tax at the reduced rate by beer. return, Form 5000.24, during the cal- (d) Beer lost, destroyed or rendered endar year for which the brewer was el- unmerchantable. An adjustment may be igible, may file a claim for refund of made on the excise tax return for the tax excessively paid on beer for that amount of tax paid on beer lost, de- year. The brewer shall file the claim stroyed, or rendered unmerchantable for refund to tax on Form 2635 (5620.8) under § 25.282. The adjustment will be within the period of limitation pre- made on the tax return filed for the scribed in 26 U.S.C. 6511(a). For rules brewery from which the beer was re- relating to the period of limitation on moved. A brewer may not make an ad- filing claims, see §§ 70.82 and 70.83. justment prior to notification required (b) Calculation of refund. The brewer under § 25.282(e). When beer appears to shall file the claim based on the quan- have been lost due to theft, the brewer tity of beer eligible to be taxpaid at the may not make an adjustment to the lower rate of tax, but which was paid tax return until establishing to the at the higher rate of tax, subject to a satisfaction of the appropriate TTB of- maximum of 60,000 barrels of beer per ficer that the theft occurred before re- calendar year or the limitation as de- moval from the brewery and occurred termined in § 25.152(d). The brewer shall without connivance, collusion, fraud, exclude from the claim the quantity of or negligence on the part of the brewer, beer removed that calendar year on consignor, consignee, bailee, or carrier, which a credit or refund at the higher or the employees or agents of any of rate of tax has been taken. them. (c) Information to be furnished. Each (e) Condition of adjustments. (1) All ad- claim for refund of tax filed under this justments will be made within 6 section shall include the following in- months of the return, destruction, loss, formation:

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(1) Name and address of the brewer. (1) The date of the shipment; (2) Quantity of beer covered by the (2) The quantity of beer lost (number claim as determined in paragraph (b) of and size of packages and their equiva- this section. lent in barrels), and the rate(s) of tax (3) Amount of tax paid in excess. at which the beer would have been re- (4) A statement of the exact number moved for consumption or sale; of barrels of beer which the brewer pro- (3) The percent of loss; duced during the calendar year. (4) The specific cause of the loss; (5) A statement that the brewer is (5) The nature of the loss (leakage, not a member of a controlled group of breakage, casualty, etc.); brewers (as defined in § 25.152(b)(1) or, if (6) Information as to whether the the brewer is a member of a controlled claimant has been indemnified by in- group of brewers, a list of the names surance or otherwise in respect to the and addresses of all the members of the tax, or has any claim for indemnifica- controlled group of brewers and a tion; and statement of the combined number of (7) For losses due to casualty or acci- barrels of beer produced by all mem- dent, statements from the carrier or bers of the controlled group in the cal- other persons having personal knowl- endar year. edge of the loss, if available. (6) If the brewer is a member of a controlled group of brewers, a state- (27 U.S.C. 5056, 5414) ment of how the 60,000 barrel limita- [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986; 51 FR tion for the reduced rate of tax is to be 9190, Mar. 18, 1986; T.D. ATF–345, 58 FR 40357, apportioned among the members of the July 28, 1993] controlled group of brewers. Subpart U—Records and Reports (Act of August 16, 1954, 68A Stat. 791, as amended (26 U.S.C. 6402); sec. 201, Pub. L. 85– § 25.291 Records. 859, 72 Stat. 1333, as amended (26 U.S.C. 5051)) (a) General. (1) The records to be [T.D. ATF–224, 51 FR 7673, Mar. 5, 1987, as amended by T.D. ATF–251, 52 FR 19314, May maintained by brewers include: 22, 1987; T.D. ATF–437, 66 FR 5480, Jan. 19, (i) All individual transaction forms, 2001] records, and summaries specifically required by this part; § 25.286 Claims for remission of tax on (ii) All supplemental, auxiliary, and beer lost in transit between brew- source data used in the compilation of eries. required forms, records, and sum- (a) Filing of claim. Claims for remis- maries, and for preparation of reports, sion of tax on beer lost in transit be- returns, and claims; and tween breweries of the same ownership (iii) Copies of notices, reports, re- shall be prepared on Form 2635 (Form turns, and approved applications and 5620.8) by the brewer or the brewer’s other documents relating to operations authorized agent and submitted with and transactions. the Form 5130.9 of the receiving brew- (2) The records required by this part ery for the reporting period in which may consist of the brewer’s commer- the shipment is received. When the loss cial documents, rather than records is by casualty, the claim will be sub- prepared expressly to meet the require- mitted with the Form 5130.9 for the re- ments of this part, if those documents porting period in which the loss is dis- contain all the details required by this covered. When, for valid reason, the re- part, are consistent with the general quired claim cannot be submitted with requirements of clarity and accuracy, Form 5130.9, the brewer shall attach a and do not result in difficulty in their statement to Form 5130.9 stating the examination. reason why the claim cannot be filed at (b) Entries. (1) Each entry required by the time and stating when it will be this part to be made in daily records filed. A claim will not be allowed un- will be made not later than the close of less filed within 6 months of the date of the business day next succeeding the the loss. day on which the transaction occurs. (b) Information to be shown. The claim (2) When the brewer prepares trans- will show the following information: action or business records concurrenty

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with the individual operation or trans- (2) Beer and cereal beverage produced action and these records contain all (including water added after produc- the required information with respect tion is determined). to the operation or transaction, entries (3) Beer and cereal beverage trans- in daily records may be made not later ferred for and returned from bottling. than the close of business the third (4) Beer and cereal beverage trans- business day succeeding the day on ferred for and returned from racking. which the operation or transaction oc- (5) Beer and cereal beverage bottled. curs. (6) Beer and cereal beverage racked. (c) Content. (1) All entries in the daily (7) Cereal beverage removed from the records required by this subpart will brewery. show the date of the operation or (8) Beer removed for consumption or transaction. sale. For each removal, the record will (2) Daily records will accurately and show the date of removal, the person to clearly reflect the details of each oper- whom the beer was shipped or delivered ation or transaction and, as applicable, (not required for sales in quantities of contain all data necessary to enable— one-half barrel or less for delivery at (i) Brewers to prepare summaries, re- the brewery), and the quantities of beer ports, and returns required by this removed in kegs and in bottles. part, and (9) Beer removed without payment of (ii) Appropriate TTB officers to tax. For each removal, the record will verify removals of beer and cereal bev- show the date of removal, the person to erages, to verify claims, and to ascer- whom the beer was shipped or deliv- tain if there has been compliance with ered, and the quantities of beer re- law and regulations. moved in kegs, bottles, tanks, tank (d) Format. (1) The brewer’s copies of cars, tank trucks, tank ships, barges or prescribed forms which bear all re- deep tanks of vessels. quired details will be utilized as daily (10) Packaged beer used for labora- records. tory samples at the brewery. (2) When a form is not prescribed, the (11) Beer consumed at the brewery. records required by this subpart will be (12) Beer returned to the brewery those commercial records used by the from which removed. brewer in the accounting system and (13) Beer returned to the brewery will bear all required details. after removal from another brewery (3) The brewer shall maintain daily owned by the brewer. records required by this part so they (14) Beer reconditioned, used as mate- clearly and accurately reflect all man- rial, or destroyed. datory information. When the format (15) Beer received from other brew- or arrangement of the daily records is eries or received from pilot brewing such that the information is not clear- plants. ly or accurately shown, the appropriate (16) Beer and cereal beverage lost due TTB officer may require a format or to breakage, theft, casualty, or other arrangement which will clearly and ac- unusual cause. curately show the information. (17) Brewing materials sold or trans- (Sec. 201, Pub. L. 85–859, 72 Stat. 1390, as ferred to pilot brewing plants (includ- amended (26 U.S.C. 5415)) ing the name and address of the person to whom shipped or delivered) and § 25.292 Daily records of operations. brewing materials used in the manufac- (a) Daily records. A brewer shall ture of wort, wort concentrate, malt maintain daily records of operations syrup, and malt extract for sale or re- which show by quantity the following: moval. (1) Each kind of material received (18) Record of tests of measuring de- and used in the production of beer and vices. cereal beverage (including the balling (19) Beer purchased from other brew- and the quantity of each type of mate- ers in the purchasing brewer’s barrels rial used in the production of wort or and kegs and such beer sold to other concentrated wort). brewers.

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(b) Daily summary records. A brewer inspection by an appropriate TTB offi- shall maintain daily summaries of the cer. following transactions: (Sec. 201, Pub. L. 85–859, 72 Stat. 1390, as (1) Beer and cereal beverage bottled; amended (26 U.S.C. 5415)) (2) Beer and cereal beverage racked; [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as (3) Beer removed for consumption or amended by T.D. TTB–91, 76 FR 5478, Feb. 1, sale; 2011] (4) Beer returned to the brewery from which removed; § 25.295 Record of unsalable beer. (5) Beer returned to the brewery after A brewer having unsalable beer in removal from another brewery owned packages or tanks in the brewery may by the brewer; and destroy, recondition, or use the beer as (6) Brewing materials, beer and ce- material. The brewer shall report the real beverage in process, and finished quantity of the beer destroyed, recon- beer and cereal beverage on hand. ditioned, or used as materials, in daily records and on Form 5130.9. If the (Sec. 201, Pub. L. 85–859, 72 Stat. 1390, as unsalable beer consists of rejects from amended, 1395, as amended (26 U.S.C. 5415, the packaging operations, the beer may 5555)) be destroyed without being included in [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986; 51 FR the packaging production records, and, 9190, Mar. 18, 1986; T.D. TTB–91, 76 FR 5478, when so destroyed, will be so reported Feb. 1, 2011] in the brewer’s daily records and on Form 5130.9. When reject bottled beer is § 25.293 Record of ballings and alcohol to be consumed at the brewery or sold content. to brewery employees, or is cased or The brewer shall maintain a record of otherwise accumulated pending other the ballings of the wort produced, and disposition, the quantity will be in- of the ballings and the alcohol content cluded in the packaging production and of beer and cereal beverage transferred be so reported in the brewer’s daily for bottling and racking, between brew- records and on Form 5130.9. eries in bulk conveyances, and to pilot (Sec. 201, Pub. L. 85–859, 72 Stat. 1389 as brewing plants. Records showing amended, 1390, as amended, 1395 as amended ballings and alcohol content need not (26 U.S.C. 5411, 5415, 5555)) be consolidated and averaged daily unless the brewer so desires. § 25.296 Record of beer concentrate. (Sec. 201, Pub. L. 85–859, 72 Stat. 1390, as (a) Daily records. A brewer who pro- amended (26 U.S.C. 5415)) duces concentrate or reconstitutes beer shall maintain daily records which ac- § 25.294 Inventories. curately reflect the balling, quantity, (a) The brewer shall take a physical and alcohol content of— inventory of beer and cereal beverage (1) Beer entered into the concentra- at least once each calendar month. The tion process; brewer may take this inventory within (2) Concentrate produced; 7 days of the close of the calendar (3) Concentrate transferred to other month for which made. breweries; (4) Concentrate exported; (b) The brewer shall make a record of (5) Concentrate received; inventories of beer or cereal beverage (6) Concentrate used in reconsti- which will show the following: tuting beer; and (1) Date taken; (7) Beer reconstituted. (2) Quantity of beer and cereal bev- (b) Summary report of operations. A erage on hand; brewer who produces concentrate or re- (3) Losses, gains, and shortages; and constitutes beer shall report by specific (4) Signature, under penalties of per- entries on Form 5130.9, the quantity of jury of the brewer or person taking beer entered into the concentration this inventory. process, and the quantity of beer recon- (c) The brewer shall retain inventory stituted from concentrate. In addition, records and make them available for the brewer shall prepare on Form

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5130.9, a summary accounting of all vious month of that quarter. When fil- concentrate operations at the brewery ing the first monthly report, a brewer for the reporting period. This summary shall state on the form that it will be accounting will show, in barrels of 31 liable for more than $50,000 in taxes for gallons with fractions rounded to 2 dec- the current calendar year and will imal places: henceforth submit monthly filings. The (1) Concentrate on hand beginning of brewer shall then continue to file Form the reporting period; 5130.9 for each subsequent month of (2) Concentrate on hand end of the re- that calendar year. porting period; (3) The appropriate TTB officer may (3) Concentrate produced; at any time require a brewer who is fil- (4) Concentrate received; and ing Form 5130.9 or Form 5130.26 quar- (5) Specific disposition of concentrate terly to file such report monthly on such as ‘‘used in reconstitution,’’ ‘‘re- Form 5130.9 if there is a jeopardy to the moved for export,’’ ‘‘removed to for- revenue. eign-trade zone,’’ or ‘‘transferred to (c) Retention. The brewer shall retain other breweries.’’ a copy of Form 5130.9 or Form 5130.26 (26 U.S.C. 5415) (or any successor form) as part of the brewery records. [T.D. ATF–224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF–345, 58 FR 40358, July (26 U.S.C. 5415, 5555) 28, 1993] [T.D. ATF–345, 58 FR 40358, July 28, 1993, as § 25.297 Report of Operations, Form amended by T.D. ATF–437, 66 FR 5480, Jan. 5130.9 or Form 5130.26. 19, 2001; T.D. TTB–123, 79 FR 58679, Sept. 30, 2014] (a) Monthly report of operations. Ex- cept as provided in paragraph (b) of § 25.298 Excise tax return, Form this section, each brewer shall prepare 5000.24. and submit a monthly report of brew- All entries on the excise tax return, ery operations on Form 5130.9. Form 5000.24, will be fully supported by (b) Quarterly report of operations. (1) accurate and complete records. The For calendar quarters commencing on brewer shall file a copy of Form 5000.24 or after January 1, 2015, a brewer who as a part of the records at the brewery. was liable for not more than $50,000 in taxes with respect to beer imposed by (Sec. 201, Pub. L. 85–859, 72 Stat. 1335, as 26 U.S.C. 5051 and 7652 in the preceding amended, 1390, as amended, 1395, as amended calendar year and reasonably expects (26 U.S.C. 5061, 5415, 5555)) to be liable for not more than $50,000 in § 25.299 Execution under penalties of such taxes during the current calendar perjury. year shall file quarterly Form 5130.9 or Form 5130.26 (or any successor forms). When a return, form, or other docu- For purposes of this section, ‘‘reason- ment is required by this part or in the ably expects’’ means that the brewer instruction on or with the return, was liable for not more than $50,000 in form, or other document to be executed taxes the previous calendar year and under the penalties of perjury, as de- that there is no other existing or an- fined in § 25.11, it will be so executed ticipated circumstance known to the and will be signed by the brewer or brewer (such as an increase in produc- other duly authorized person. tion capacity) that would cause the (Act of August 16, 1954, 68A Stat. 749, as brewer’s liability to increase beyond amended (26 U.S.C. 6065)) that level in the current calendar year. (2) If a brewer determines that it will § 25.300 Retention and preservation of be liable for more than $50,000 in taxes records. with respect to beer imposed by 26 (a) Place of maintenance. Records re- U.S.C. 5051 and 7652 during the current quired by this part will be prepared and calendar year, the brewer shall file kept by the brewer at the brewery Form 5130.9 monthly beginning with where the operation or transaction oc- the first month during which the tax curs and will be available for inspec- liability exceeds $50,000, and shall con- tion by any appropriate TTB officer currently file Form 5130.9 for any pre- during business hours.

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(b) Reproduction of original records. the same as if it were the original Whenever any record, because of its record, and it will be treated and con- condition, becomes unsuitable for its sidered for all purposes as through it intended or continued use, the brewer were the original record. All provisions shall reproduce the record by a process of law and regulations applicable to the under § 25.301. The reproduced record original are applicable to the repro- will be treated and considered for all duced record. As used in this section, purposes as though it were the original ‘‘original record’’ means the record re- record, and all provisions of law appli- quired by this part to be maintained or cable to the original are applicable to preserved by the brewer, even though it the reproduction. may be an executed duplicate or other (c) Retention of records. Records re- copy of the document. quired by this part will be preserved for a period of not less than three years (Sec. 201, Pub. L. 85–859, 72 Stat. 1390, as amended, 1395, as amended (26 U.S.C. 5415, from the date thereof or the date of the 5555)) last entry required to be made thereon, whichever is later. The appropriate TTB officer may require records to be PART 26—LIQUORS AND ARTICLES kept for an additional period not ex- FROM PUERTO RICO AND THE ceeding three years in any case where VIRGIN ISLANDS such retention is deemed necessary or advisable for the protection of the rev- Subpart A—Scope of Regulations enue. Sec. (d) Data Processing. (1) Notwith- 26.1 Alcoholic products coming into the standing any other provision of this United States from Puerto Rico and the section, record data maintained on Virgin Islands. data processing equipment may be kept 26.2 Forms prescribed. at a location other than the brewery if 26.3 Delegations of the Administrator. the original transaction (source) Subpart B—Definitions records required by §§ 25.292–25.298 are kept available for inspection at the 26.11 Meaning of terms. brewery. (2) Data which has been accumulated Subpart C [Reserved] on cards, tapes, discs, or other accepted record media will be retrievable within Subpart Ca—Rum Imported Into the United five business days. States From Areas Other Than Puerto (3) The applicable data processing Rico and the Virgin Islands program will be made available for ex- 26.30 Excise taxes. amination if requested by an appro- 26.31 Formula. priate TTB officer. Subpart Cb—Products Coming into the (Sec. 201, Pub. L. 85–859, 72 Stat. 1390, as United States From Puerto Rico amended (26 U.S.C. 5415)) 26.35 Taxable status. § 25.301 Photographic copies of 26.36 Products exempt from tax. records. 26.36a–26.36b [Reserved] (a) General. Brewers may record, 26.36c Shipments of bulk distilled spirits to the United States without payment of copy, or reproduce records required by tax. this part. Brewers may use any process 26.37 Alcohol and Tobacco Tax and Trade which accurately reproduces the origi- Bureau Officers. nal record and which forms a durable 26.38 Containers of distilled spirits. medium for reproducing and preserving 26.39 Labels. the original record. 26.40 Marking containers of distilled spirits. (b) Copies of records treated as original 26.41 Destruction of marks and brands. 26.43 Samples. records. Whenever records are reproduced under this section, the repro- DEALER REGISTRATION AND RECORDKEEPING duced records will be preserved in con- 26.44 Liquor dealer registration and record- veniently accessible files, and provi- keeping. sions will be made for examining, view- 26.45 Warehouse receipts covering distilled ing and using the reproduced record spirits.

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