27 CFR Ch. I (4–1–13 Edition) § 22.173

§ 22.173 27 CFR Ch. I (4–1–13 Edition)

(e) Tax-free spirits obtained by Gov- PART 24—WINE ernment agencies may not be used for non-Government purposes. Subpart A—Scope [T.D. ATF–199, 50 FR 9183, Mar. 6, 1985; 50 FR Sec. 20099, May 14, 1985] 24.1 General. 24.2 Territorial extent. § 22.173 Procurement of tax-free spir- 24.4 Related regulations. its. Each Government agency shall retain Subpart B—Definitions the original of its permit, Form 5150.33, 24.10 Meaning of terms. on file. When placing an initial order with a vendor, the agency shall forward Subpart C—Administrative and a photocopy of its permit with the pur- Miscellaneous Provisions chase order for tax-free spirits. In the AUTHORITIES case of an agency holding a single per- 24.19 Delegations of the Administrator. mit for use of other sub-agencies, the 24.20 Forms prescribed. photocopy of the permit shall contain 24.21 Modified forms. an attachment listing all other loca- 24.22 Alternate method or procedure. tions authorized to procure tax-free 24.25 Emergency variations from require- spirits. Any subsequent purchases from ments. the same vendor need only contain the 24.26 Authority to approve. 24.27 Segregation of operations. permit number on the purchase order. 24.28 Installation of meters, tanks, and other apparatus. § 22.174 Receipt of shipment. 24.29 Claims. On receipt of a shipment of tax-free 24.30 Supervision. spirits, a representative of the Govern- 24.31 Submission of forms and reports. ment agency shall inspect the ship- 24.32 Records. 24.35 Right of entry and examination. ment for any loss or deficiency. In the 24.36 Instruments and measuring devices. case of loss or deficiency, the agency 24.37 Samples for the United States. shall annotate the receiving document and forward a copy to the appropriate FACILITIES AND ASSISTANCE TTB officer. 24.40 Gauging and measuring. 24.41 Office facilities. § 22.175 Discontinuance of use. EMPLOYER IDENTIFICATION NUMBER When a Government agency, holding 24.45 Use on returns. a permit issued under this subpart, no 24.46 Application. longer intends to procure and use tax- 24.47 Execution of IRS Form SS–4. free spirits, the permit shall be returned to the appropriate TTB officer DEALER REGISTRATION AND RECORDKEEPING for cancellation. All photocopies of the 24.50 [Reserved] permit furnished to vendors shall be re- 24.51 Definitions. turned to the agency for destruction. 24.52 Dealer registration. 24.53 Amending the dealer registration. § 22.176 Disposition of excess spirits. 24.54 Dealer records. At the time of discontinuance of use ASSESSMENTS of tax-free spirits, a Government agen- 24.60 General. cy may dispose of any excess tax-free 24.61 Assessment of tax. spirits (a) by transferring the spirits to 24.62 Notice. another Government agency holding a CLAIMS permit, (b) by returning the spirits to a 24.65 Claims for wine or spirits lost or de- vendor, or (c) in any manner author- stroyed in bond. ized by the appropriate TTB officer. 24.66 Claims on wine returned to bond. Tax-free spirits may not be disposed of 24.67 Other claims. to the general public. 24.68 Insurance coverage. 24.69 Filing of claims. 24.70 Claims for credit of tax.

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TAX EXEMPT WINE 24.128 Continuing partnerships. 24.129 Change in location. 24.75 Wine for personal or family use. 24.130 Change in volatile fruit-flavor con- 24.76 Tax exempt cider. centrate operations. 24.77 Experimental wine. 24.131 Change in building construction and FORMULAS use of premises. 24.80 General. ALTERNATION 24.81 Filing of formulas. 24.135 Wine premises alternation. 24.82 Samples. 24.136 Procedure for alternating proprietors. ESSENCES 24.137 Alternate use of the wine premises for customs purposes. 24.85 Essences. 24.86 Essences produced on wine premises. PERMANENT DISCONTINUANCE OF OPERATIONS 24.87 Essences made elsewhere. 24.140 Notice. CONVEYANCE OF WINE OR SPIRITS ON WINE 24.141 Bonded wine warehouse. PREMISES BONDS AND CONSENTS OF SURETY 24.90 Taxpaid products. 24.145 General requirements. 24.91 Conveyance of untaxpaid wine or spir- 24.146 Bonds. its. 24.147 Operations bond or unit bond. 24.92 Products in customs custody. 24.148 Penal sums of bonds. 24.149 Corporate surety. SAMPLES 24.150 Powers of attorney. 24.95 General. 24.151 Deposit of collateral security. 24.96 Use off premises. 24.152 Consents of surety. 24.97 Use on premises. 24.153 Strengthening bonds. 24.154 New or superseding bonds. Subpart D—Establishment and Operations 24.155 Disapproval and appeal from disapproval. 24.100 General. 24.156 Termination of bonds. 24.157 Application by surety for relief from PREMISES AND OPERATIONS bond. 24.101 Bonded wine premises. 24.158 Extent of relief. 24.102 Premises established for taxpaid wine 24.159 Release of collateral security. operations. 24.103 Other operations. Subpart E—Construction and Equipment

APPLICATION 24.165 Premises. 24.105 General. 24.166 Buildings or rooms. 24.106 Basic permit requirements. 24.167 Tanks. 24.107 Designation as a bonded winery. 24.168 Identification of tanks. 24.108 Bonded wine warehouse application. 24.169 Pipelines. 24.109 Data for application. 24.170 Measuring devices and testing instru- 24.110 Organizational documents. ments. 24.111 Description of premises. 24.112 Name of proprietor and trade names. Subpart F—Production of Wine 24.113 Description of volatile fruit-flavor 24.175 General. concentrate operations. 24.176 Crushing and fermentation. 24.114 Registry of stills. 24.177 Chaptalization (Brix adjustment). 24.115 Registry number. 24.178 Amelioration. 24.116 Powers of attorney. 24.179 Sweetening. 24.117 Maintenance of application file. 24.180 Use of concentrated and unconcentrated fruit juice. CHANGES SUBSEQUENT TO ORIGINAL 24.181 Use of sugar. ESTABLISHMENT 24.182 Use of acid to correct natural defi- 24.120 Amended application. ciencies. 24.121 Changes affecting permits. 24.183 Use of distillates containing 24.122 Change in name of proprietor or trade aldehydes. name. 24.184 Use of volatile fruit-flavor con- 24.123 Change in stockholders. centrate. 24.124 Change in corporate officers. 24.125 Change in proprietorship. Subpart G—Production of Effervescent 24.126 Change in proprietorship involving a Wine bonded wine warehouse. 24.127 Adoption of formulas. 24.190 General.

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24.191 Segregation of operations. 24.246 Materials authorized for the treat- 24.192 Process and materials. ment of wine and juice. 24.193 Conversion into still wine. 24.247 Materials authorized for the treatment of distilling material. Subpart H—Production of Special Natural 24.248 Processes authorized for the treat- Wine ment of wine, juice, and distilling material. 24.195 General. 24.249 Experimentation with new treating 24.196 Formula required. material or process. 24.197 Production by fermentation. 24.250 Application for use of new treating 24.198 Blending. material or process.

Subpart I—Production of Agricultural Wine BOTTLING, PACKING, AND LABELING OF WINE 24.200 General. 24.255 Bottling or packing wine. 24.201 Formula required. 24.256 Bottle aging wine. 24.202 Dried fruit. 24.257 Labeling wine containers. 24.203 Honey wine. 24.258 Certificates of approval or exemption. 24.204 Other agricultural products. 24.259 Marks. 24.260 Serial numbers or filling date. Subpart J—Production of Other Than Subpart M—Losses of Wine Standard Wine 24.265 Losses by theft. 24.210 Classes of wine other than standard 24.266 Inventory losses. wine. 24.267 Losses in transit. 24.211 Formula required. 24.268 Losses by fire or other casualty. 24.212 High fermentation wine. 24.213 Heavy bodied blending wine. Subpart N—Removal, Return and Receipt 24.214 Spanish type blending sherry. 24.215 Wine or wine products not for bev- of Wine erage use. TAXPAID REMOVALS 24.216 Distilling material. 24.217 Vinegar stock. 24.270 Determination of tax. 24.218 Other wine. 24.271 Payment of tax by return with remittance. Subpart K—Spirits 24.272 Payment of tax by electronic fund transfer. 24.225 General. 24.273 Exception to filing semimonthly or 24.226 Receipt or transfer of spirits. quarterly tax returns. 24.227 Transfer of spirits by pipeline for im- 24.274 Failure to timely pay tax or file a re- mediate use. turn. 24.228 Transfer of spirits by pipeline to a 24.275 Prepayment of tax. spirits storage tank. 24.276 Prepayment of tax; proprietor in de- 24.229 Tank car and tank truck require- fault. ments. 24.277 Date of mailing or delivering of re- 24.230 Examination of tank car or tank turns. truck. 24.278 Tax credit for certain small domestic 24.231 Receipt of spirits in sealed bulk con- producers. tainers. 24.279 Tax adjustments related to wine cred- 24.232 Gauge of spirits. it. 24.233 Addition of spirits to wine. 24.234 Other use of spirits. TRANSFER OF WINE IN BOND 24.235 Taxpayment or destruction of spirits. 24.280 General. 24.236 Losses of spirits. 24.281 Consignor premises. 24.237 Spirits added to juice or concentrated 24.282 Multiple transfers. fruit juice. 24.283 Reconsignment. Subpart L—Storage, Treatment and 24.284 Consignee premises. Finishing of Wine REMOVALS WITHOUT PAYMENT OF TAX 24.240 General. 24.290 Removal of wine as distilling mate- 24.241 Decolorizing juice or wine. rial. 24.242 Authority to use greater quantities of 24.291 Removal of wine for vinegar produc- decolorizing material in juice or wine. tion. 24.243 Filtering aids. 24.292 Exported wine. 24.244 Use of acid to stabilize standard wine. 24.293 Wine for Government use. 24.245 Use of carbon dioxide in still wine. 24.294 Destruction of wine.

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RETURN OF UNMERCHANTABLE WINE TO BOND § 24.4 Related regulations. 24.295 Return of unmerchantable wine to Regulations related to this part are bond. listed below: TAXPAID WINE OPERATIONS 26 CFR Part 301—Procedure and Administra- tion. 24.296 Taxpaid wine operations. 27 CFR Part 1—Basic Permit Requirements Under the Federal Alcohol Administration Subpart O—Records and Reports Act. 27 CFR Part 2—Nonindustrial Use of Dis- 24.300 General. tilled Spirits and Wine. 24.301 Bulk still wine record. 27 CFR Part 4—Labeling and Advertising of 24.302 Effervescent wine record. Wine. 24.303 Formula wine record. 27 CFR Part 9—American Viticultural Areas. 24.304 Chaptalization (Brix adjustment) and 27 CFR Part 16—Alcoholic Beverage Health amelioration record. Warning Statement 24.305 Sweetening record. 27 CFR Part 18—Production of Volatile 24.306 Distilling material or vinegar stock Fruit-Flavor Concentrates. record. 27 CFR Part 19—Distilled Spirits Plants. 24.307 Nonbeverage wine record. 24.308 Bottled or packed wine record. 27 CFR Part 26—Liquors and Articles from Puerto Rico and the Virgin Islands. 24.309 Transfer in bond record. 24.310 Taxpaid removals from bond record. 27 CFR Part 27—Importation of Distilled Spirits, Wines and Beer. 24.311 Taxpaid wine records. 24.312 Unmerchantable wine returned to 27 CFR Part 28—Exportation of Alcohol. bond record. 27 CFR Part 29—Stills and Miscellaneous 24.313 Inventory record. Regulations. 24.314 Label information record. 27 CFR Part 30—Gauging Manual. 24.315 Materials received and used record. 27 CFR Part 31—Alcohol Beverage Dealers. 24.316 Spirits record. 27 CFR Part 71—Rules of Practice in Permit 24.317 Sugar record. Proceedings. 24.318 Acid record. 31 CFR Part 225—Acceptance of Bonds, 24.319 Carbon dioxide record. Notes, or Other Obligations Issued or Guar- 24.320 Chemical record. anteed by the United States as Security in 24.321 Decolorizing material record. Lieu of Surety or Sureties on Penal Bonds. 24.322 Allied products record. [T.D. ATF–299, 55 FR 24989, June 19, 1990, as 24.323 Excise Tax Return form. amended by T.D. ATF–459, 66 FR 38550, July 25, 2001; T.D. ATF–463, 66 FR 42734, Aug. 15, AUTHORITY: 5 U.S.C. 552(a); 26 U.S.C. 5001, 5008, 5041, 5042, 5044, 5061, 5062, 5121, 5122–5124, 2001; T.D. ATF–462, 66 FR 42736, Aug. 15, 2001; 5173, 5206, 5214, 5215, 5351, 5353, 5354, 5356, 5357, T.D. ATF–470, 66 FR 58944, Nov. 26, 2001; T.D. 5361, 5362, 5364–5373, 5381–5388, 5391, 5392, 5511, ATF–479, 67 FR 30798, May 8, 2002; T.D. TTB– 5551, 5552, 5661, 5662, 5684, 6065, 6091, 6109, 6301, 8, 69 FR 3830, Jan. 27, 2004; T.D. TTB–25, 70 6302, 6311, 6651, 6676, 7302, 7342, 7502, 7503, 7606, FR 19882, Apr. 15, 2005] 7805, 7851; 31 U.S.C. 9301, 9303, 9304, 9306.

SOURCE: T.D. ATF–299, 55 FR 24989, June 19, Subpart B—Definitions 1990, unless otherwise noted. § 24.10 Meaning of terms. Subpart A—Scope When used in this part and in the forms prescribed under this part, terms § 24.1 General. will have the meanings ascribed in this section. Words in the plural form also The regulations in this part relate to include the singular, and vice versa, and the establishment and operation (in- words indicating the masculine gender cluding incidental activities) of wine also include the feminine. The terms premises and to the treatment and ‘‘includes’’ and ‘‘including’’ do not ex- classification of wine. clude items not enumerated which are § 24.2 Territorial extent. in the same general class. The definitions in this section do not supersede This part applies to the several or affect the requirements of part 4 of States of the United States and the this chapter, relative to the labeling of District of Columbia. wine under the provisions of the Fed- (Sec. 201, Pub. L. 85–859, 72 Stat. 1337, as eral Alcohol Administration Act (49 amended (26 U.S.C. 5065)) Stat. 981; 27 U.S.C. 205).

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Administrator. The Administrator, Al- conducted and other authorized oper- cohol and Tobacco Tax and Trade Bu- ations may be conducted. reau, Department of the Treasury, Bottle. A container four liters or less Washington, DC. in capacity, regardless of the material Affiliated persons or firms. When used from which it is made, used to store in connection with ‘‘own production’’, wine or to remove wine from the wine one or more bonded wine premises pro- premises. prietors associated as members of the Bottler. A proprietor of wine premises same farm cooperative, or any one or established under the provisions of this more bonded wine premises proprietors part who fills wine into a bottle. affiliated within the meaning of sec- Brix. The quantity of dissolved solids tion 117(a)(5) of the Federal Alcohol expressed as grams of sucrose in 100 Administration Act, as amended (49 grams of solution at 60 degrees F. (20 Stat. 989; 27 U.S.C. 211). degrees C.) (Percent by weight of Agricultural wine. Wine made from sugar). suitable agricultural products other Bulk container. Any container larger than the juice of grapes, berries, or than 60 liters. other fruits. Business day. Any day, other than Allied products. Commercial fruit Saturday, Sunday, or a legal holiday. products and by-products (including (The term ‘‘legal holiday’’ includes all volatile fruit-flavor concentrate) not holidays in the District of Columbia taxable as wine. and statewide holidays in a particular Amelioration. The addition to juice or State in which a claim, report, or re- natural wine before, during, or after turn, as the case may be, is required to fermentation, of either water or pure be filed, or the act is required to be dry sugar, or a combination of water performed.) and sugar to adjust the acid level. Calendar quarter and quarterly. These Appropriate TTB officer. An officer or terms refer to the three-month periods employee of the Alcohol and Tobacco ending on March 31, June 30, Sep- Tax and Trade Bureau (TTB) author- tember 30, or December 31. ized to perform any functions relating to the administration or enforcement Calendar year. The period which be- of this part by TTB Order 1135.24, Dele- gins January 1 and ends on the fol- gation of the Administrator’s Authori- lowing December 31. ties in 27 CFR Part 24, Wine. Case. Two or more bottles, or one or Artificially carbonated wine. Effer- more containers larger than four liters, vescent wine artificially charged with enclosed in a box or fastened together carbon dioxide and containing more by some other method. than 0.392 grams of carbon dioxide per Chaptalization (Brix adjustment). The 100 milliliters. addition of sugar or concentrated juice Bonded wine cellar. Premises estab- of the same kind of fruit to juice before lished under the provisions of this part. or during fermentation to develop alco- For the purposes of this part a wine hol by fermentation. premises designated a bonded winery is Cider. See definitions for hard cider also a bonded wine cellar. and tax exempt cider. For a description Bonded wine premises. Premises estab- of an additional product which may be lished under the provisions of this part called cider, see § 4.21(e)(5) of this chap- on which operations in untaxpaid wine ter. are authorized to be conducted. Concentrate plant. An establishment Bonded wine warehouse. Bonded ware- qualified under part 18 of this chapter house facilities established under the for the production of volatile fruit-fla- provisions of this part on wine prem- vor concentrate. ises by a warehouse company or other Container. A receptacle, regardless of person for the storage of wine and al- the material from which it is made, lied products for credit purposes. used to store wine or to remove wine Bonded winery. Premises established from wine premises. (Also see the defi- under the provisions of this part on nition of bulk container for containers which wine production operations are larger than 60 liters).

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Director of the service center. A direc- vator, or any person acting in any fidu- tor of an internal revenue service cen- ciary capacity for any person. ter. Financial institution. A bank or other Distilled spirits plant. An establish- financial institution, whether or not a ment qualified under part 19 of this member of the Federal Reserve Sys- chapter (excluding alcohol fuel plants) tem, which has access to the Federal for producing, warehousing, or proc- Reserve Communications System essing of distilled spirits (including de- (FRCS) or Fedwire. The ‘‘FRCS’’ or natured spirits), or manufacturing of ‘‘Fedwire’’ is a communications net- articles. work that allows Federal Reserve Sys- Distilling material. Any fermented or tem member financial institutions to other alcoholic substance capable of, or effect a transfer of funds for their cus- intended for use in, the original dis- tomers (or other financial institutions) tillation or other original processing of to the Treasury account at the Federal spirits. Reserve Bank. District director. A district director of Fold. The ratio of the volume of the internal revenue. fruit must or juice to the volume of the volatile fruit-flavor concentrate pro- Effervescent wine. A wine containing duced from the fruit must or juice; for more than 0.392 grams of carbon diox- example, one gallon of volatile fruit- ide per 100 milliliters. flavor concentrate of 100-fold would be Electronic fund transfer (EFT). Any the product from 100 gallons of fruit transfer of funds effected by a propri- must or juice. etor’s financial institution, either di- Foreign wine. Wine produced outside rectly or through a correspondent the United States. banking relationship, via the Federal Formula wine. Special natural wine, Reserve Communications System agricultural wine, and other than (FRCS) or Fedwire to the Treasury Ac- standard wine (except for distilling ma- count at the Federal Reserve Bank. terial and vinegar stock) produced on Executed under penalties of perjury. bonded wine premises under an ap- Signed with the prescribed declaration proved formula. under the penalties of perjury as pro- Fruit wine. Wine made from the juice vided on or with respect to the return, of sound, ripe fruit (other than grapes). claim, form, or other document or, Fruit wine also includes wine made where no form of declaration is pre- from berries or wine made from a com- scribed, with the declaration: ‘‘I de- bination of grapes and other fruit (in- clare under the penalties of perjury cluding berries). that this lllll (insert type of doc- Gallon or wine gallon. A United States ument such as statement, report, cer- gallon of liquid measure equivalent to tificate, application, claim, or other the volume of 231 cubic inches. document), including the documents Grams per liter. For the purposes of submitted in support thereof, has been this part, the unit of measure equiva- examined by me and, to the best of my lent to the ‘‘parts per thousand’’ unit knowledge and belief, is true, correct, of measure prescribed in the Internal and complete.’’ Revenue Code of 1986, as amended. Export or exportation. A severance of Grape wine. Wine made from the juice goods from the mass of things belong- of sound, ripe grapes. ing to the United States with the in- Hard cider. Still wine derived pri- tention of uniting them to the mass of marily from apples or apple con- things belonging to some foreign coun- centrate and water (apple juice, or the try and will include shipments to any equivalent amount of concentrate re- possession of the United States. For constituted to the original brix of the the purposes of this part, shipments to juice prior to concentration, must rep- the Commonwealth of Puerto Rico and resent more than 50 percent of the vol- to the territories of the Virgin Islands, ume of the finished product) containing American Samoa, and Guam will also no other fruit product nor any artifi- be treated as exportations. cial product which imparts a fruit fla- Fiduciary. A guardian, trustee, execu- vor other than apple; containing at tor, receiver, administrator, conser- least one-half of 1 percent and less than

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7 percent alcohol by volume; having Lot. Wine of the same type. When the taste, aroma, and characteristics used with reference to a ‘‘lot of wine generally attributed to hard cider; and bottled’’, lot means the same type of sold or offered for sale as hard cider. wine bottled or packed on the same Heavy bodied blending wine. Wine date into containers. made from fruit without added sugar, Must. Unfermented juice or any mix- with or without added wine spirits, and ture of juice, pulp, skins, and seeds pre- conforming to the definition of natural pared from grapes or other fruit (in- wine in all respects except as to max- cluding berries). imum total solids content. Natural wine. The product of the juice High-proof concentrate. A volatile or must of sound, ripe grapes or other fruit-flavor concentrate (essence) that sound, ripe fruit (including berries) has an alcohol content of more than 24 made with any cellar treatment au- percent by volume and is unfit for bev- thorized by subparts F and L of this erage use (nonpotable) because of its part and containing not more than 21 natural constituents, i.e., without the percent by weight (21 degrees Brix de- addition of other substances. alcoholized wine) of total solids. In bond. When used with respect to Nonbeverage wine. Wine, or wine prod- wine or spirits, ‘‘in bond’’ refers to ucts made from wine, rendered unfit wine or spirits possessed under bond to for beverage use in accordance with secure the payment of the taxes im- § 24.215. posed by 26 U.S.C. Chapter 51, and on Own production. When used with ref- which such taxes have not been determined. The term includes any wine or erence to wine in a bonded winery, the spirits on the bonded wine premises or term means wine produced by fer- a distilled spirits plant, or in transit mentation in the same bonded winery, between bonded premises (including in whether or not produced by a prede- the case of wine, bonded wine prem- cessor in interest at the bonded winery. ises). Additionally, the term refers to The term includes wine produced by wine withdrawn without payment of fermentation in bonded wineries owned tax under 26 U.S.C. 5362 and to spirits or controlled by the same or affiliated withdrawn without payment of tax persons or firms when located within under 26 U.S.C. 5214 (a)(5) or (a)(13) the same State. with respect to which relief from liabil- Packer. A proprietor of wine premises ity has not yet occurred. established under the provisions of this Invert sugar syrup. A substantially part who fills wine into a container colorless solution of invert sugar which larger than four liters. has been prepared by recognized meth- Person. An individual, trust, estate, ods of inversion from pure dry sugar partnership, association, company, or and contains not less than 60 percent corporation. When used in connection sugar by weight (60 degrees Brix). with penalties, seizures, and forfeit- Juice. The unfermented juice (con- ures, the term includes an officer or centrated or unconcentrated) of grapes, employee of a corporation or a member other fruit (including berries) and au- or employee of a partnership, who as thorized agricultural products exclu- an officer, employee or member, is sive of pulp, skins, or seeds. under a duty to perform the act in re- Kind. Kind means the class and type spect of which the violation occurs. of wine prescribed in this part and in 27 Proof. The ethyl alcohol content of a CFR part 4. liquid at 60 degrees Fahrenheit, stated Lees. The settlings of wine. as twice the percent of ethyl alcohol by Liquid sugar. A substantially color- volume. less refined sugar and water solution Proof gallon. A United States gallon containing not less than the equivalent of liquid at 60 degrees Fahrenheit of 60 percent pure dry sugar by weight which contains 50 percent by volume of (60 degrees Brix). ethyl alcohol having a specific gravity Liter. A metric unit of capacity equal of 0.7939 at 60 degrees Fahrenheit re- to 1,000 cubic centimeters at 20 degrees ferred to water at 60 degrees Fahr- C. or 33.814 United States fluid ounces enheit as unity, or the alcoholic equiv- at 68 degrees F. of alcoholic beverage. alent thereof.

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Proprietor. The person qualified under Still wine. Wine containing not more this part to operate a wine premises, than 0.392 gram of carbon dioxide per and includes the term ‘‘winemaker’’ 100 milliliters. when the context so requires. Sugar. Pure dry sugar, liquid sugar, Pure dry sugar. Refined sugar 95 per- and invert sugar syrup. cent or more by weight dry, having a Sweetening. The addition of juice, dextrose equivalent of not less than 95 concentrated juice or sugar to wine percent on a dry basis, and produced after the completion of fermentation from cane, beets, or fruit, or from grain and before taxpayment. or other sources of starch. Tax exempt cider. Cider produced in Reconditioning. The conduct of oper- accordance with § 24.76 ations, after original bottling or pack- Tax year. The period from July 1 of ing, to restore wine to a merchantable one calendar year through June 30 of condition. The term includes relabeling the following year. or recasing operations. Taxpaid wine. Wine on which the tax Same kind of fruit. In the case of imposed by law has been determined, grapes, all of the species and varieties regardless of whether the tax has actu- of grapes. In the case of fruits other ally been paid or the payment of tax than grapes, this term includes all of has been deferred. the several species and varieties of any Taxpaid wine bottling house. Premises given kind; except that this will not established under the provisions of this preclude a more precise identification part primarily for bottling or packing of the composition of the product for taxpaid wine. the purpose of its designation. Taxpaid wine premises. Premises es- Secretary. The Secretary of the Treas- tablished under the provisions of this ury or the Secretary’s designated dele- part on which taxpaid wine operations gate. other than bottling are authorized to Sparkling wine or champagne. An ef- be conducted. fervescent wine containing more than This chapter. Title 27, Code of Federal 0.392 gram of carbon dioxide per 100 Regulations, chapter I (27 CFR chapter milliliters of wine resulting solely I). from the secondary fermentation of the Total solids. The degrees Brix of wine within a closed container. unfermented juice or dealcoholized Special natural wine. A product pro- wine. duced from a base of natural wine (in- Treasury Account. The Department of cluding heavy bodied blending wine) to Treasury’s General Account at the which natural flavorings are added, and Federal Reserve Bank of New York. made pursuant to an approved formula U.S.C. The United States Code. in accordance with subpart H of this United States wine. Wine produced on part. bonded wine premises in the United Specially sweetened natural wine. A States. product made with a base of natural Unmerchantable wine. Wine which has wine and having a total solids content been taxpaid, removed from bonded in excess of 17 percent by weight (17 de- wine premises, and subsequently re- grees Brix dealcoholized wine) and an turned to a bonded wine premises alcohol content of not more than 14 under the provisions of § 24.295 for the percent by volume. purpose of reconditioning, reformula- Spirits. That substance known as tion or destruction. ethyl alcohol, ethanol, or spirits of Vinegar. A wine or wine product not wine in any form (including all dilu- for beverage use produced in accord- tions or mixtures thereof, from what- ance with the provisions of this part ever source or by whatever process pro- and having not less than 4.0 grams (4.0 duced), but not denatured spirits unless percent) of volatile acidity (calculated specifically stated. as acetic acid and exclusive of sulfur Standard wine. Natural wine, spe- dioxide) per 100 milliliters of wine. cially sweetened natural wine, special Volatile fruit-flavor concentrate. Any natural wine, and standard agricul- concentrate produced by any process tural wine, produced in accordance which includes evaporations from any with subparts F, H, and I of this part. fruit mash or juice.

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Wine. When used without qualifica- by this part. All of the information tion, the term includes every kind called for in each form will be fur- (class and type) of product produced on nished as indicated by the headings on bonded wine premises from grapes, the form and the instructions on or other fruit (including berries), or other pertaining to the form and as required suitable agricultural products and con- by this part. The form will be filed in taining not more than 24 percent of al- accordance with the instructions for cohol by volume. The term includes all the form. imitation, other than standard, or arti- (b) Forms prescribed by this part are ficial wine and compounds sold as wine. available for printing through the TTB A wine product containing less than Web site (http://www.ttb.gov) or by mail- one-half of one percent alcohol by vol- ing a request to the Alcohol and To- ume is not taxable as wine when re- bacco Tax and Trade Bureau, National moved from the bonded wine premises. Revenue Center, 550 Main Street, Room Wine premises. Premises established 1516, Cincinnati, OH 45202. under the provisions of this part on [T.D. ATF–299, 55 FR 24989, June 19, 1990, as which wine operations or other oper- amended by T.D. 372, 61 FR 20724, May 8, 1996; ations are authorized to be conducted. T.D. ATF–409, 64 FR 13683, Mar. 22, 1999; T.D. Wine spirits. Brandy or wine spirits TTB–44, 71 FR 16938, Apr. 4, 2006] authorized under 26 U.S.C. 5373 for use in wine production. § 24.21 Modified forms. [T.D. ATF–299, 55 FR 24989, June 19, 1990, as (a) General. The appropriate TTB offi- amended by T.D. ATF–312, 56 FR 31077, July cer may approve the use of a modified 9, 1991; T.D. ATF–398, 63 FR 44783, Aug. 21, form in lieu of the prescribed form re- 1998; T.D. ATF–409, 64 FR 13683, Mar. 22, 1999; quired by this part, when in the judg- T.D. TTB–41, 71 FR 5602, Feb. 2, 2006; T.D. ment of the appropriate TTB officer: TTB–44, 71 FR 16938, Apr. 4, 2006; T.D. TTB– (1) Good cause has been shown for the 89, 76 FR 3509, Jan. 20, 2011] use of the modified form and EFFECTIVE DATE NOTE: By TTB–2011–0001, (2) The use of the modified form will 76 FR 3509, Jan. 20, 2011, § 24.10 was amended not result in a net increase in cost to by revising the definition of ‘‘Calendar quar- the Government or hinder the effective ter and quarterly’’, effective from Feb. 22, administration of this part. 2011 to Feb. 24, 2014. Except to adapt tax returns for use with data processing equipment, no Subpart C—Administrative and proposal for modification of a pre- Miscellaneous Provisions scribed form relating to qualification, to the giving of any bond, or to the as- AUTHORITIES sessment, payment, or collection of tax § 24.19 Delegations of the Adminis- will be approved under this section. trator. (b) Application. The proprietor who desires to modify a prescribed form Most of the regulatory authorities of shall submit a written application to the Administrator contained in this the appropriate TTB officer. The appli- part are delegated to appropriate TTB cation will state the reasons a modified officers. These TTB officers are speci- form is necessary and be accompanied fied in TTB Order 1135.24, Delegation of by a copy of the proposed form with the Administrator’s Authorities in 27 typical entries. CFR Part 24, Wine. You may obtain a (c) Conditions. A modified form may copy of this order by accessing the TTB not be used until the application has Web site (http://www.ttb.gov) or by mail- been approved by the appropriate TTB ing a request to the Alcohol and To- officer. Authorization for the use of a bacco Tax and Trade Bureau, National modified form is conditioned on com- Revenue Center, 550 Main Street, Room pliance with the procedures, condi- 1516, Cincinnati, OH 45202. tions, and limitations specified in the [T.D. TTB–44, 71 FR 16938, Apr. 4, 2006] approval of the application. The use of a modified form does not relieve the § 24.20 Forms prescribed. proprietor from any requirement of (a) The appropriate TTB officer is au- this part. Authority for use of a modi- thorized to prescribe all forms required fied form may be withdrawn whenever

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in the judgment of the appropriate (c) Conditions. The proprietor shall, TTB officer the effective administra- during the period of authorization for tion of this part is hindered by the con- an alternate method or procedure, tinuation of the authority. comply with the terms of the approved application. Authorization for any al- (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as ternate method or procedure may be amended, 1395, as amended (26 U.S.C. 5367, 5555)) withdrawn whenever in the judgment of the appropriate TTB officer the rev- (Approved by the Office of Management and enue is jeopardized or the effective ad- Budget under control number 1512–0292) ministration of this part is hindered by [T.D. ATF–299, 55 FR 24989, June 19, 1990, as the continuation of the authorization. amended by T.D. ATF–409, 64 FR 13683, Mar. 22, 1999] (Sec. 201, Pub. L. 85–859, 72 Stat. 1395, as amended (26 U.S.C. 5556)) § 24.22 Alternate method or procedure. (Approved by the Office of Management and Budget under control number 1512–0292) (a) General. The proprietor, on specific approval of the appropriate TTB [T.D. ATF–299, 55 FR 24989, June 19, 1990, as officer as provided in this section, may amended by T.D. ATF–409, 64 FR 13683, 13684, use an alternate method or procedure Mar. 22, 1999] in lieu of a method or procedure spe- § 24.25 Emergency variations from re- cifically prescribed in this part. As quirements. used in this section, an alternate meth- (a) General. The appropriate TTB offi- od or procedure also includes alternate cer may approve construction, equip- construction or equipment. No alter- ment, and methods of operation other nate method or procedure relating to than as specified in this part, when in the giving of any bond or to the assess- the judgment of such officer an emer- ment, payment, or collection of tax, gency exists, the proposed variations will be authorized under this section. from the specified requirements are The appropriate TTB officer may ap- necessary, and the proposed variations: prove an alternate method or proce- (1) Will afford the security and pro- dure, subject to stated conditions, tection to the revenue intended by the when in the judgment of the appro- prescribed specifications; priate TTB officer: (2) Will not hinder the effective ad- (1) Good cause has been shown for the ministration of this part; and use of the alternate method or proce- (3) Will not be contrary to any provi- dure; sions of law. (2) The alternate method or proce- (b) Application. The proprietor must dure is within the purpose of, and con- submit a written application to the ap- sistent with the effect intended by, the propriate TTB officer within 24 hours specifically prescribed method or proof any temporary approval granted cedure, and affords equivalent security under paragraph (c) of this section, to the revenue; and which describes the proposed variation, (3) The alternate method or proce- and sets forth the reasons therefor. dure will not be contrary to any provi- (c) Temporary approval. The propri- sion of law, will not result in an in- etor who desires to employ an emer- crease in cost to the Government, and gency variation from requirements will not hinder the effective adminis- must contact the appropriate TTB offi- tration of this part. cer and request temporary approval (b) Application. The proprietor who until the written application, required desires to employ an alternate method by paragraph (b) of this section, is or procedure shall submit a written ap- acted upon. The appropriate TTB offi- plication to the appropriate TTB officer will be a subordinate of the TTB of- cer. The application will specifically ficer designated in paragraph (a) of this describe the proposed alternate method section. Where the emergency threat- or procedure, and will set forth the rea- ens life or property, the proprietor may sons therefor. Alternate methods or take immediate action to correct the procedures will not be employed until situation without prior notification; the application is approved by the ap- however, the proprietor must promptly propriate TTB officer. contact the appropriate TTB officer

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and file with that officer a report convent the commingling of standard wine cerning the emergency and the action with other than standard wine. taken to correct the situation. (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as (d) Conditions. The proprietor must, amended (26 U.S.C. 5365)) during the period of variation from requirements granted under this section, [T.D. ATF–299, 55 FR 24989, June 19, 1990, as comply with the terms of the approved amended by T.D. ATF–409, 64 FR 13683, Mar. 22, 1999] application. A failure to comply in good faith with any procedures, condi- § 24.28 Installation of meters, tanks, tions, and limitations will automati- and other apparatus. cally terminate the authority for a The appropriate TTB officer may re- variation. Upon termination of the var- quire the proprietor to install meters, iation, the proprietor must fully com- tanks, pipes, or any other apparatus for ply with requirements of regulations the purpose of protecting the revenue. for which the variation was authorized. Any proprietor refusing or neglecting Authority for any variation may be to install a required apparatus will not withdrawn whenever in the judgment be permitted to conduct business. of the appropriate TTB officer the revenue is jeopardized or the effective ad- (Sec. 201, Pub. L. 85–859, 72 Stat. 1395, as ministration of this part is hindered by amended (26 U.S.C. 5552)) the continuation of the variation. [T.D. ATF–299, 55 FR 24989, June 19, 1990, as [T.D. ATF–409, 64 FR 13684, Mar. 22, 1999] amended by T.D. ATF–409, 64 FR 13683, Mar. 22, 1999] § 24.26 Authority to approve. § 24.29 Claims. The appropriate TTB officer is au- The appropriate TTB officer may re- thorized to approve, except as other- quire the proprietor or other person wise provided in this part, all applica- liable for the tax on wine or spirits to tions, bonds, consents of surety, quali- file a claim and to submit evidence of fying documents, claims, and any other loss in any case where wine or spirits documents required by or filed under are lost or destroyed. this part, whether for original establishment, for changes subsequent to es- (Sec. 201, Pub. L. 85–859, 72 Stat. 1323, as tablishment, for discontinuance of amended, 1381, as amended (26 U.S.C. 5008, business, for remission, abatement, 5043, 5370)) credit, or refund of tax, or for any (Approved by the Office of Management and other purpose. Budget under control number 1512–0492) (Sec. 201, Pub. L. 85–859, 72 Stat. 1378, as [T.D. ATF–299, 55 FR 24989, June 19, 1990, as amended (26 U.S.C. 5351)) amended by T.D. ATF–409, 64 FR 13683, Mar. 22, 1999] (Approved by the Office of Management and Budget under control number 1512–0292) § 24.30 Supervision. [T.D. ATF–299, 55 FR 24989, June 19, 1990, as The appropriate TTB officer may re- amended by T.D. ATF–409, 64 FR 13683, Mar. quire that operations on wine premises 22, 1999] be supervised by any number of appro- § 24.27 Segregation of operations. priate TTB officers necessary for the protection of the revenue or for the en- The appropriate TTB officer may re- forcement of 26 U.S.C. chapter 51 and quire the proprietor to segregate oper- applicable regulations. ations within any wine premises established under this part, by partitions or (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as otherwise, to the extent deemed nec- amended, 1395, as amended (26 U.S.C. 5366, essary to prevent jeopardy to the rev- 5553)) enue, to prevent confusion between op- [T.D. ATF–299, 55 FR 24989, June 19, 1990, as erations, to prevent substitution with amended by T.D. ATF–409, 64 FR 13683, 13684, respect to the several methods of pro- Mar. 22, 1999] ducing effervescent wine, and to pre-

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§ 24.31 Submission of forms and re- amended (26 U.S.C. 5560, 7342, 7601, 7602, ports. 7606)) The appropriate TTB officer may re- [T.D. ATF–299, 55 FR 24989, June 19, 1990, as quire the proprietor to submit to an amended by T.D. ATF–409, 64 FR 13684, Mar. appropriate TTB officer copies of pre- 22, 1999] scribed transaction forms, records, reports, or source records used to prepare § 24.36 Instruments and measuring de- records, reports or tax returns. vices. (Sec. 201, Pub. L. 85–859, 72 Stat. 1396, as All instruments and measuring de- amended (26 U.S.C. 5555)) vices required by this part to be fur- (Approved by the Office of Management and nished by the proprietor for the pur- Budget under control number 1512–0492) pose of testing and measuring wine, spirits, volatile fruit-flavor con- [T.D. ATF–299, 55 FR 24989, June 19, 1990, as centrate, and materials will be main- amended by T.D. ATF–409, 64 FR 13683, 13684, Mar. 22, 1999] tained by the proprietor in accurate and readily usable condition. The ap- § 24.32 Records. propriate TTB officer may disapprove The appropriate TTB officer may re- the use of any equipment or means of quire the proprietor to maintain any measurement found to be unsuitable record required by this part in a pre- for the intended purpose, inaccurate, or scribed format or arrangement or oth- not in accordance with regulations. In erwise change the method of record- this case, the proprietor shall promptly keeping in any case where the required provide suitable and accurate equip- information is not clearly or accu- ment or measuring devices. (Sec. 201, rately reflected. Pub. L. 85–859, 72 Stat. 1379, as amended, 1381, as amended (26 U.S.C. 5357, (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as 5366, 5368, 5552)) amended, 1395, as amended (26 U.S.C. 5367, 5555)) [T.D. ATF–299, 55 FR 24989, June 19, 1990, as (Approved by the Office of Management and amended by T.D. ATF–409, 64 FR 13684, Mar. Budget under control number 1512–0298) 22, 1999] [T.D. ATF–299, 55 FR 24989, June 19, 1990, as § 24.37 Samples for the United States. amended by T.D. ATF–409, 64 FR 13683, Mar. 22, 1999] Appropriate TTB officers are authorized to take samples of wine, spirits, § 24.35 Right of entry and examina- volatile fruit-flavor concentrate, or tion. any other material which may be added Under 26 U.S.C. 7601, 7602, and 7606, to wine products, for analysis, testing, appropriate TTB officers have author- etc., free of tax to determine compli- ity to inspect during normal business ance with the provisions of law and hours the records, stocks, and wine regulation. premises (including any portion designated as a bonded wine warehouse) of (Sec. 201, Pub. L. 85–859, 72 Stat. 1380, as the proprietor to determine compliance amended, 1382, as amended, 1392, as amended, with all provisions of the internal rev- 1396, as amended (26 U.S.C. 5362, 5373, 5511, 7510)) enue laws and regulations. In addition, for the purposes prescribed in 27 CFR [T.D. ATF–299, 55 FR 24989, June 19, 1990, as 70.22, appropriate TTB officers may ex- amended by T.D. ATF–409, 64 FR 13684, Mar. amine financial records, books of ac- 22, 1999] count, and any other books, papers, records, and data relevant to an in- FACILITIES AND ASSISTANCE quiry. Any denial or interference with § 24.40 Gauging and measuring. any inspection by the proprietor, or by agents or employees of the proprietor, Appropriate TTB officers may re- is a violation of 26 U.S.C. 7342 and may quire the proprietor to furnish the nec- be subject to an appropriate penalty. essary facilities and assistance to (August 16, 1954, Ch. 736, 68A Stat. 872, gauge or measure wine or spirits in any as amended, 901, as amended, 903, as container or to examine any apparatus,

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equipment, container, or material on (b) An application on IRS Form SS– wine premises. 4 will be made by the taxpayer who, prior to filing the first return, has nei- (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as ther secured nor made application for amended, 1381, as amended, 1395, as amended, 1396, as amended (26 U.S.C. 5357, 5366, 5368, an employer identification number. An 5555)) application on IRS Form SS–4 will be filed on or before the seventh day after [T.D. ATF–299, 55 FR 24989, June 19, 1990, as the date on which the first return is amended by T.D. ATF–409, 64 FR 13684, Mar. filed. 22, 1999] (c) Each taxpayer shall make appli- § 24.41 Office facilities. cation for and be assigned only one employer identification number, regard- The appropriate TTB officer may re- less of the number of places of business quire the proprietor to furnish tempo- for which the taxpayer is required to rarily a suitable work area, desk and file a tax return under the provisions of equipment necessary for the use of ap- this part. (Pub. L. 87–397, 75 Stat. 828, propriate TTB officers in performing as amended (26 U.S.C. 6109)) Government duties whether or not such office space is located at the spe- (Approved by the Office of Management and cific premises where regulated oper- Budget under control number 1512–0492) ations occur or at corporate business § 24.47 Execution of IRS Form SS–4. offices where no regulated activity occurs. Such office facilities will be sub- (a) Preparation. The application on ject to approval by the appropriate IRS Form SS–4, together with any sup- TTB officer. plementary statement, will be prepared in accordance with the form instruc- [T.D. ATF–409, 64 FR 13684, Mar. 22, 1999] tions and applicable regulations. The application will be filed with the direc- EMPLOYER IDENTIFICATION NUMBER tor of the internal revenue service center as instructed on the Form SS–4. § 24.45 Use on returns. (b) Signature. The application will be The employer identification number signed by: (as defined at 26 CFR 301.7701–12) of the (1) The individual, if the taxpayer is taxpayer who has been assigned such a an individual; or, number will be shown on each return (2) The president, vice president, filed pursuant to the provisions of this other principal officer, or other person part, including amended returns. Fail- authorized to sign, if the taxpayer is a ure of the taxpayer to include the em- corporation; or, ployer identification number on any re- (3) A responsible and duly authorized turn filed pursuant to the provisions of member or officer having knowledge of this part may result in the assertion its affairs, if the taxpayer is a partner- and collection of the penalty pre- ship or other unincorporated organiza- scribed in 27 CFR 70.113 of this chapter. tion; or, (Pub. L. 87–397, 75 Stat. 828, as amended (4) The fiduciary, if the taxpayer is a (26 U.S.C. 6109, 6676)) trust or estate. (Pub. L. 87–397, 75 Stat. 828, as amended (26 U.S.C. 6109)) (Approved by the Office of Management and Budget under control number 1512–0492) (Approved by the Office of Management and Budget under control number 1512–0492) [T.D. ATF–299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF–301, 55 FR 47605, Nov. DEALER REGISTRATION AND 14, 1990] RECORDKEEPING

§ 24.46 Application. § 24.50 [Reserved] (a) An employer identification number will be assigned pursuant to appli- § 24.51 Definitions. cation on Internal Revenue Service For purposes of §§ 24.52 through 24.54 (IRS) Form SS–4 filed by the taxpayer. of this part, the following terms have IRS Form SS–4 may be obtained from the meanings indicated: the director of the service center or Dealer. A person who sells, or offers from any district director. for sale, any alcohol product (distilled

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spirits, wines, and/or beer) fit for bev- proved application, the proprietor must erage use. amend the application within the time Retail dealer in liquors. A dealer who period specified in subpart D of this sells, or offers for sale, distilled spirits, part. An amendment of the proprietor’s wines, or beer to any person other than wine premises approved application a dealer. will also amend the proprietor’s dealer Wholesale dealer in liquors. A dealer registration under § 24.52. The propri- who sells, or offers for sale, distilled etor’s dealer registration will also ter- spirits, wines, or beer to another deal- minate when wine operations author- er. ized under this part terminate. (26 U.S.C. 5121, 5122) (26 U.S.C. 5124) [T.D. TTB–79, 74 FR 37404, July 28, 2009] [T.D. TTB–79, 74 FR 37404, July 28, 2009]

§ 24.52 Dealer registration. § 24.54 Dealer records. Every proprietor who sells or offers Every dealer is required to maintain for sale any alcohol product (distilled records of transactions. Wine trans- spirits, wines, or beer) fit for beverage actions that appear in the records re- use must register as a dealer in accord- quired by subpart O of this part will ance with part 31 of this chapter. How- meet the proprietor’s recordkeeping re- ever, the proprietor’s application to es- quirements as a dealer. For other tablish and operate a bonded wine transactions not covered in the wine premises or taxpaid wine bottling premises records, such as retail sales of house filed under subpart D of this distilled spirits or beer in a restaurant part, and approval of that application at the wine premises, or operations as by the appropriate TTB officer, will a wholesale dealer in distilled spirits or constitute the proprietor’s registration beer, the proprietor must keep the as a dealer at the approved bonded or records specified for dealers in part 31 taxpaid wine premises. Every propri- of this chapter. etor registered as a dealer under this section will be classified as a wholesale (26 U.S.C. 5121, 5122, 5123) dealer in liquors (see § 31.32 of this [T.D. TTB–79, 74 FR 37404, July 28, 2009] chapter) and as such may also operate as a retail dealer in liquors without ad- ASSESSMENTS ditional registration. Registration covers all sales from the same location, in- § 24.60 General. cluding sales of spirits, beer, or other Where the appropriate TTB officer proprietors’ wine. As provided in § 31.52 determines by examination of records, of this chapter, the proprietor is sub- inventories, or otherwise that the pro- ject to no additional registration for prietor has incurred liability for the making sales of wine or beer at the tax on wine, distilled spirits, or special customer’s place of business. Other- (occupational) tax, and the proprietor wise, a proprietor who conducts busi- does not pay the tax upon notification ness as a dealer at a location other of the liability, the tax will be as- than the bonded wine premises or tax- sessed. paid wine bottling house must register (August 16, 1954, Ch. 736, 68A Stat. 767, as and keep records in accordance with amended (26 U.S.C. 6201)) part 31 of this chapter. (Approved by the Office of Management and (26 U.S.C. 5124) Budget under control number 1512–0492) [T.D. TTB–79, 74 FR 37404, July 28, 2009] [T.D. ATF–299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF–409, 64 FR 13683, Mar. § 24.53 Amending the dealer registra- 22, 1999] tion. Every proprietor registered as a deal- § 24.61 Assessment of tax. er under § 24.52 must maintain a cur- When wine or spirits in bond are lost rent and accurate application file or destroyed (except wine or spirits on under subpart D of this part. Whenever which the tax is not collectible by rea- there is a change to any of the infor- son of the provisions of 26 U.S.C. 5008 or mation provided in the proprietor’s ap- 26 U.S.C. 5370, as applicable) and the

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proprietor or other person liable for A claim filed under this paragraph will the tax on the wine or spirits fails to set forth the following information: file a claim when required pursuant to (1) The name, registry number, and § 24.29 or when the claim is denied, the location of the distilled spirits plant tax will be assessed. In any case where which produced the spirits; wine is produced, imported, or received (2) The serial numbers of the con- otherwise than as authorized by law, or tainers from which the spirits were where wine or spirits are removed, pos- lost, the quantity lost from each, and sessed, or knowingly used in violation the total quantity of spirits covered by of applicable law, or volatile fruit-fla- the claim; vor concentrate is sold, transported, or (3) The total amount of tax for which used in violation of law, the tax will be claim is filed; assessed. (4) The date of the loss or destruction (Sec. 201, Pub. L. 85–859, 72 Stat. 1314, as (or, if not known, the date of dis- amended, 1323, as amended, 1332, as amended, covery); 1335, as amended, 1381, as amended, 1387, as (5) The nature and cause (if known) amended, 1392, as amended (26 U.S.C. 5001, of the loss will be stated specifically 5008, 5043, 5061, 5370, 5391, 5512)) and in sufficient detail to disclose all (Approved by the Office of Management and material facts and circumstances sur- Budget under control number 1512–0492) rounding the loss; (6) If lost in transit, the name of the § 24.62 Notice. carrier and the points between which If an investigation or an examination shipped; and of records discloses that liability for (7) If lost by theft, evidence estab- the tax on wine or distilled spirits, or lishing that the loss did not occur as special (occupational) tax has been in- the result of negligence, connivance, curred by the proprietor, the appro- collusion, or fraud on the part of the priate TTB officer will notify the pro- proprietor, owner, consignor, con- prietor by letter of the basis and the signee, bailee or carrier, or the agents amount of the proposed assessment in or employees of any of them. order to afford the proprietor an oppor- (b) Claim for allowance of loss on wine. tunity to submit a protest, with sup- A claim for allowance of loss required porting evidence, within 45 days, or to by this part, relating to the loss or de- request a conference with regard to the struction of wine in bond, will be filed tax liability. However, if collection of with the appropriate TTB officer. A the tax liability may be jeopardized by claim for allowance of loss for wine a delay, the appropriate TTB officer lost in transit, by fire or other cas- may take immediate jeopardy assess- ualty, or any other extraordinary or ment action pursuant to 26 U.S.C. 6861. unusual losses, including a loss by (Sec. 201, Pub. L. 85–859, 72 Stat. 1323, as theft, will be filed immediately. Any amended, 1381, as amended (26 U.S.C. 5008, other claim for allowance of loss will 5370, 6862)) be attached to and submitted with the (Approved by the Office of Management and TTB F 5120.17, Report of Bonded Wine Budget under control number 1512–0492) Premises Operations, for the reporting period in which the inventory required [T.D. ATF–299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF–409, 64 FR 13683, Mar. by § 24.313 is taken or, in the case of 22, 1999] discontinuance of the premises or change in proprietorship, to the final CLAIMS report filed. A claim filed under this paragraph will set forth the informa- § 24.65 Claims for wine or spirits lost tion required by paragraphs (a)(5) to or destroyed in bond. (a)(7) of this section and, in addition, (a) Claim for remission of tax on spirits. will set forth the following informa- All claims for remission of tax required tion: by this part, relating to the loss or de- (1) The original volume of wine which struction of spirits in bond, will be sustained the loss, the tax class, the filed with the appropriate TTB officer quantity of wine lost, and the percent- within 30 days of discovery of the loss. age of wine lost;

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(2) Where the claim covers losses sus- lost in transit, the claim will be sup- tained at bonded wine premises during ported by a copy of the carrier’s bill of the tax year, the claimant shall state: lading. (i) The quantities of wine on hand at the beginning of the tax year, received (Sec. 201, Pub. L. 85–859, 72 Stat. 1323, as in bond during the tax year, and pro- amended, 1381, as amended, 1382, as amended (26 U.S.C. 5008, 5370, 5373)) duced during the tax year; (ii) Where the percentage of loss is (Approved by the Office of Management and calculated separately by tax class, the Budget under control numbers 1512–0216 and volume of wine by tax class; and 1512–0492) (iii) If effervescent wine is produced, [T.D. ATF–299, 55 FR 24989, June 19, 1991, as the volume of wine produced by fer- amended by T.D. ATF–338, 58 FR 19063, Apr. mentation in bottles, by artificial 12, 1993; T.D. ATF–376, 61 FR 31030, June 19, carbonation, and by bulk processing; 1996; T.D. ATF–409, 64 FR 13683, Mar. 22, 1999] and (3) Claims covering losses of wine § 24.66 Claims on wine returned to during transit in bond will show the bond. volume lost from each container, the (a) General. A claim for credit or re- serial number, if any, and the volume fund, or relief from liability, of tax on shipped. unmerchantable United States wine re- (c) Claim for abatement, credit or returned to bonded wine premises will be fund. A claim for an abatement of an filed with the appropriate TTB officer assessment under § 24.61, or credit or within six months after the date of the refund of tax which has been paid or return of the wine to bond. A single determined, will be filed with the ap- claim may not be filed under this sec- propriate TTB officer in accordance tion for a quantity on which credit or with the provisions of this paragraph refund of tax would be in an amount and the provisions of 27 CFR part 70, less than $25. This limitation does not subpart F. A claim filed under this apply with respect to any returned paragraph with respect to spirits, wine, wine on which the six month period for or volatile fruit-flavor concentrate, filing a claim will expire. will set forth the applicable informa- (b) Filing. A claim filed under this tion required by paragraphs (a) and (b) section will set forth the following in- of this section. In addition, any claim formation: filed under this paragraph will set (1) The kind, volume, and tax class of forth the following information: (1) The date of the assessment for the wine; which abatement is claimed; and (2) As to each tax class, the amount (2) The name, registry number, and of tax previously paid or determined; address of the premises where the tax and was assessed (or name, address, and (3) The date the wine was returned to title of any other person who was as- bond. sessed the tax, if the tax was not as- (c) Indemnification or recompense. A sessed against the proprietor). claim filed under this section will (d) Indemnification or recompense. A specify whether the claimant has been claim filed under paragraph (a) or (b) of or will be indemnified or recompensed this section will specify whether the for the wine returned to bond and if so, claimant has been or will be indem- the amount and nature of indemnity or nified or recompensed for the spirits or recompense and the actual value of the wine lost and, if so, the amount and na- wine, less the tax. ture of indemnity or recompense and the actual value of the spirits or wine, (Sec. 201., Pub. L. 85–859, 72 Stat. 1332, as amended, 1380, as amended (26 U.S.C. 5044, less the tax. 5361, 5371)) (e) Supporting documents. A claim filed under paragraph (a), (b), or (c) of (Approved by the Office of Management and this section will be supported by affida- Budget under control number 1512–0492) vits of persons having personal knowl- [T.D. ATF–299, 55 FR 24989, June 19, 1990, as edge of the loss or destruction. In addi- amended by T.D. ATF–409, 64 FR 13683, Mar. tion, if filed for tax on wine or spirits 22, 1999]

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§ 24.67 Other claims. (1) Show the name, address, and title The requirements with respect to a of the claimant; claim for: (2) Be signed by the claimant or the (a) Remission of tax on wine with- duly authorized agent of the claimant; drawn without payment of tax under and the provisions of § 24.292, and lost in (3) Be executed under the penalties of transit to the port of export, vessel or perjury. aircraft, foreign-trade zone, customs (b) Supporting documents. Forms, sup- bonded warehouse, or manufacturing porting statements, and any other doc- bonded warehouse, as applicable, are uments required by this part to be sub- contained in 27 CFR part 28. mitted with a claim will be attached to (b) Refund or credit of any tax im- the claim and be considered a part of posed on wine or other liquors by 26 the claim. The appropriate TTB officer U.S.C. chapter 51, part I, subchapter A, may require the submission of addi- on the grounds that an amount of tax tional evidence in support of any claim was assessed or collected erroneously, filed under this part. illegally, without authority, or in any manner wrongfully, or on the grounds (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as that the amount was excessive, are amended (26 U.S.C. 5064, 5370)) contained in 27 CFR part 70 subpart F. (Approved by the Office of Management and (c) Payment of an amount equal to Budget under control number 1512–0492) the internal revenue tax paid or deter- [T.D. ATF–299, 55 FR 24989, June 19, 1990, as mined and customs duties paid on amended by T.D. ATF–409, 64 FR 13683, Mar. wines or other liquors previously with- 22, 1999] drawn, which are lost, rendered unmar- ketable, or condemned by a duly au- § 24.70 Claims for credit of tax. thorized official as a result of Claims for credit of tax, as provided (1) A major disaster, in this part, may be filed after deter- (2) Fire, flood, casualty, or other disaster, or mination of the tax whether or not the (3) Breakage, destruction, or damage tax has been paid. Where a claim for (excluding theft) resulting from van- credit of tax is filed, the claimant dalism or malicious mischief, are found shall, upon receipt of notification of al- in 27 CFR part 70, subpart G. lowance of credit from the appropriate TTB officer, make an adjusting entry (Approved by the Office of Management and on the next tax return (or returns) to Budget under control number 1512–0492) the extent necessary to exhaust the [T.D. ATF–299, 55 FR 24989, June 19, 1990, as credit. The claimant shall also make amended by T.D. ATF–376, 61 FR 31030, June an explanatory statement on each tax 19, 1996; T.D. TTB–8, 69 FR 3830, Jan. 27, 2004] return specifically identifying the noti- § 24.68 Insurance coverage. fication of allowance of credit. The claimant may not anticipate allowance The remission, abatement, refund, of a credit or make an adjusting entry credit, or other relief, of taxes on wine in a tax return until TTB has acted on or spirits provided for under this part the claim. will be allowed only to the extent that the claimant is not indemnified or rec- (Sec. 201, Pub. L. 85–859, 72 Stat. 1332, as ompensed for such tax by any valid amended, 1335, as amended, 1381, as amended, claim of insurance or otherwise. 1395, as amended (26 U.S.C. 5043, 5044, 5061, 5370, 5555)) (Sec. 201, Pub. L. 85–859, 72 Stat. 1382, as amended (26 U.S.C. 5064, 5371)) (Approved by the Office of Management and Budget under control number 1512–0492) § 24.69 Filing of claims. [T.D. ATF–299, 55 FR 24989, June 19, 1990, as (a) Claims. All claims filed under this amended by T.D. ATF–409, 64 FR 13683, Mar. part for abatement, refund, credit, or 22, 1999] remission of tax will be filed on TTB F 5620.8 (2635). Each claim filed under this part will:

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TAX EXEMPT WINE Report of Bonded Wine Premises Oper- ations. § 24.75 Wine for personal or family use. (Sec. 201, Pub. L. 85–859, 72 Stat. 1331, as (a) General. Any adult may, without amended (26 U.S.C. 5042)) payment of tax, produce wine for per- (Approved by the Office of Management and sonal or family use and not for sale. Budget under control number 1512–0216) (b) Quantity. The aggregate amount [T.D. ATF–299, 55 FR 24989, June 19, 1991, as of wine that may be produced exempt amended by T.D. ATF–338, 58 FR 19064, Apr. from tax with respect to any household 12, 1993; T.D. ATF–344, 58 FR 40354, July 28, may not exceed: 1993] (1) 200 gallons per calendar year for a household in which two or more adults § 24.76 Tax exempt cider. reside, or Cider, when produced solely from the (2) 100 gallons per calendar year if noneffervescent fermentation of apple there is only one adult residing in the juice without the use of any preserva- household. tive method or material, and when produced at a place other than a bonded (c) Definition of an adult. For the pur- wine premises and sold or offered for poses of this section, an adult is any sale as cider, and not as wine or as a individual who is 18 years of age or substitute for wine, is not subject to older. However, if the locality in which the tax on wine, or to the provisions of the household is located has estab- this part. lished by law a greater minimum age at which wine may be sold to individ- (Sec. 201, Pub. L. 85–859, 72 Stat. 1331, as uals, the term ‘‘adult’’ will mean an in- amended (26 U.S.C. 5042)) dividual who has attained that age. § 24.77 Experimental wine. (d) Proprietors of bonded wine premises. (a) General. Any scientific university, Any adult, defined in § 24.75(c), who op- college of learning, or institution of erates a bonded wine premises as an in- scientific research may, without pay- dividual owner or in partnership with ment of tax, produce, receive, blend, others, may produce wine and remove treat, and store wine for experimental it from the bonded wine premises free or research use, but not for consump- of tax for personal or family use, sub- tion (other than organoleptic tests) or ject to the limitations in § 24.75(b). sale, and may receive wine spirits with- (e) Limitation. This exemption should out payment of tax in quantities as not in any manner be construed as au- may be necessary for the production of thorizing the production of wine in vio- wine. lation of applicable State or local law. (b) Qualification. An institution that Except as provided in § 24.75(d), this ex- wants to conduct experimental wine emption does not otherwise apply to operations must apply in letter form to partnerships, corporations, or associa- the appropriate TTB officer. The appli- tions. cation will show the name and address (f) Removal. Wine produced under this of the institution, the nature, extent, section may be removed from the and purpose of the operations to be premises where made for personal or conducted, describe the operations and family use including use at organized equipment and the location at which operations will be conducted (including affairs, exhibitions or competitions, identification of the building or build- such as home winemaker’s contests, ings, or portions thereof, to be used), tastings or judgings, but may not and the security measures to be pro- under any circumstances be sold or of- vided. If wine spirits are to be used, fered for sale. The proprietor of a bond- that fact will be stated together with ed wine premises shall pay the tax on the estimated annual requirements in any wine removed for personal or fam- proof gallons. A secure place of storage ily use in excess of the limitations pro- under lock will be provided for such vided in this section and shall also spirits and will be described in the ap- enter all quantities removed for per- plication. The applicant must, when re- sonal or family use on TTB F 5120.17, quired by the appropriate TTB officer,

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furnish as part of the application, addi- FORMULAS tional information that may be necessary to determine whether the appli- § 24.80 General. cation should be approved. Operations The proprietor shall, before produc- may not begin until authorized by the tion, obtain approval of the formula appropriate TTB officer. and process by which special natural (c) Procurement of spirits. Where the wine, agricultural wine, and other than approved application provides for the standard wine (except distilling mate- use of wine spirits in experimental rial or vinegar stock) are to be made. wine operations, such spirits may be The formula must be prepared and filed on TTB F 5120.29, Formula and Process procured to the extent stated in the ap- for Wine, in accordance with the in- proved qualifying application. How- structions on the form. A nonbeverage ever, an application will be filed with wine formula will show the intended the appropriate TTB officer and au- use of the finished wine or wine prod- thorization obtained for each wine spir- uct. Any formula approved under this its procurement. section will remain in effect until re- (d) Records. All approved qualifying voked, superseded, or voluntarily sur- documents and applications will be re- rendered. Except for research, develop- tained in the files of the institution ment, and testing, no special natural and will be exhibited on request to ap- wine, agricultural wine, or, if required propriate TTB officers. No reports con- to be covered by an approved formula, cerning wine or wine spirits need be wine other than standard wine may be filed unless required by appropriate produced prior to approval by the ap- TTB officer, but records appropriate to propriate TTB officer of a formula cov- the experiments to be conducted and ering each ingredient and process (if records documenting the disposition of the process requires approval) used in the wine and wine spirits will be re- the production of the product. tained and will be made available for (Sec. 201, Pub. L. 85–859, 72 Stat. 1380, as inspection by appropriate TTB officers. amended, 1381, as amended, 1386, as amended, If wine spirits are used, the records will 1395, as amended (26 U.S.C. 5361, 5367, 5386, 5387, 5555)) show the quantities of spirits received and used each day. (Approved by the Office of Management and Budget under control number 1512–0059) (e) Discontinuance. When an institution discontinues experimental wine [T.D. ATF–299, 55 FR 24989, June 19, 1990, as operations, all remaining wine or wine amended by T.D. ATF–409, 64 FR 13684, Mar. 22, 1999] spirits will be disposed of either by destruction or shipment to premises au- § 24.81 Filing of formulas. thorized to receive wine or wine spirits. The proprietor shall on each formula A letter application will be filed with filed designate all ingredients and, if the appropriate TTB officer and au- required, describe each process used to thorization obtained prior to the de- produce the wine. The addition or struction or shipment of the wine or elimination of ingredients, changes in wine spirits. When the authorized de- quantities used, and changes in the struction or shipment has been com- process of production, or any other pleted, a letter notification will be sent change in an approved formula, will re- to the appropriate TTB officer. quire the filing of a new TTB F 5120.29. After a change in formula is approved, (Sec. 201, Pub. L. 85–859, 72 Stat. 1331, as the original formula must be surren- amended (26 U.S.C. 5042)) dered to the appropriate TTB officer. (Approved by the Office of Management and The proprietor shall serially number Budget under control numbers 1512–0292 and each formula, commencing with ‘‘1’’ 1512–0298) and continuing thereafter in numerical [T.D. ATF–299, 55 FR 24989, June 19, 1990, as sequence. Nonbeverage wine formulas amended by T.D. ATF–409, 64 FR 13683, 13684, will be prefixed with the symbol ‘‘NB.’’ Mar. 22, 1999] The appropriate TTB officer may at any time require the proprietor to file a statement of process in addition to

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that required by the TTB F 5120.29 or than 10 percent nor its alcohol content any other data to determine whether more than four percent by volume. the formula should be approved or the (Sec. 201, Pub. L. 85–859, 72 Stat. 1386, as approval continued. amended (26 U.S.C. 5386)) (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as amended, 1395, as amended (26 U.S.C. 5367, § 24.86 Essences produced on wine 5555)) premises. Wine, taxpaid spirits, or spirits with- (Approved by the Office of Management and drawn tax-free may be used in the pro- Budget under control number 1512–0059) duction of essences on wine premises. [T.D. ATF–299, 55 FR 24989, June 19, 1990, as The description of the process for pro- amended by T.D. ATF–409, 64 FR 13684, Mar. ducing the essence may be included as 22, 1999] part of a formula for the production of a formula wine or a separate formula § 24.82 Samples. may be filed on TTB F5120.29. If a sepa- Except for vinegar and salted wine as rate formula is filed for the essence, defined in § 24.215, the proprietor shall the serial number of the formula by submit under separate cover at the which it is produced will be shown in time of filing any nonbeverage wine the TTB F 5120.29 covering the formula formula a 750 mL sample of the base wine in which it is to be used. If an es- wine used and a 750 mL sample of the sence is to be made in quantities great- finished wine or wine product. The later than required for individual lots of ter sample will be considered rep- formula wine, and stored on the prem- resentative of the finished product. ises, a separate formula will be filed for Any material change in the flavor or the essence. Essences made on wine other characteristics of the finished premises with wine spirits withdrawn product from that of the approved sam- free of tax pursuant to 26 U.S.C. ple will require the filing of a new for- 5214(a)(5) may only be used in the pro- mula even though the ingredients may duction of a formula wine, and may not be the same. In addition, the appro- be removed from the premises where priate TTB officer may, at any time, made. Essences made on wine premises require the proprietor to submit sam- with the use of tax-free spirits with- ples of any wine or wine product made drawn free of tax pursuant to 26 U.S.C. in accordance with an approved for- 5214(a)(13) may only be used in the pro- mula or of any materials used in production of a nonbeverage wine or wine duction. product and may not be removed from the premises where made. The TTB F (Sec. 201, Pub. L 85–859, 72 Stat. 1380, as 5120.29 for the production of an essence amended (26 U.S.C. 5362)) is filed in the same manner as for the (Approved by the Office of Management and production of formula wine and a sam- Budget under control number 1512–0059) ple of the essence produced will be at least four fluid ounces. [T.D. ATF–299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF–312, 56 FR 31077, July (Sec. 201, Pub. L. 85–859, 72 Stat. 1386, as 9, 1991; T.D. ATF–409, 64 FR 13684, Mar. 22, amended (26 U.S.C. 5386)) 1999] (Approved by the Office of Management and Budget under control number 1512–0059) ESSENCES § 24.87 Essences made elsewhere. § 24.85 Essences. Before an essence not made on wine Essences or extracts (preparations of premises may be used in the production natural constituents extracted from of formula wine, the manufacturer of fruit, herbs, berries, etc.) may be used the essence shall obtain approval from in the production of any formula wine the appropriate TTB officer. The re- except agricultural wine. The essences quest for approval will identify the es- may be produced on wine premises or sence by name or number and by the elsewhere. Where an essence contains name of the manufacturer, and a sam- spirits, use of the essence may not in- ple of at least four fluid ounces of the crease the volume of the wine more essence will be submitted. However, a

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request for approval and submission of premises other than bonded wine prem- a sample is not required if the essence ises; is made pursuant to approval of a for- (b) The untaxpaid wine or spirits are mula on TTB F 5530.5, Formula and kept completely separate from taxpaid Process for Nonbeverage Product. Es- wine or spirits; and sences made under an approved for- (c) A description of the means and mula on TTB F 5530.5 will be described route of conveyance and of the portions on TTB F 5120.29 by showing the name of the bonded wine premises between of the manufacturer, the manufactur- which wine or spirits will be conveyed, er’s nonbeverage drawback formula as well as a copy of any agreement fur- number, and the date of approval by nished by the owner or lessee of a pri- the appropriate TTB officer. vate roadway, have been submitted to (Sec. 201, Pub. L. 85–859, 72 Stat. 1386, as and approved by the appropriate TTB amended (26 U.S.C. 5386)) officer. (Approved by the Office of Management and Budget under control number 1512–0059) (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as amended, 1381, as amended (26 U.S.C 5357, [T.D. ATF–299, 55 FR 24989, June 19, 1990, as 5365)) amended by T.D. ATF–409, 64 FR 13683, Mar. 22, 1999] (Approved by the Office of Management and Budget under control number 1512–0298) CONVEYANCE OF WINE OR SPIRITS ON [T.D. ATF–299, 55 FR 24989, June 19, 1990, as WINE PREMISES amended by T.D. ATF–409, 64 FR 13683, 13684, Mar. 22, 1999] § 24.90 Taxpaid products. Taxpaid wine or other taxpaid prod- § 24.92 Products in customs custody. ucts may be conveyed across bonded Products in customs custody may be wine premises, but may neither be conveyed across bonded wine premises stored nor allowed to remain on bonded subject to the following conditions: wine premises and will be kept sepa- (a) The products are not stored or al- rate from untaxpaid wine or spirits. However, upon payment or determina- lowed to remain on bonded wine prem- tion of the tax, bulk wine may remain ises beyond the close of the business on bonded wine premises until the day; and close of the business day following the (b) The products in customs custody day the tax was paid or determined, re- are kept separate from wine and spirits spectively, or the bonded wine premises on bonded wine premises. on which the tank is located may be al- (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as ternated as taxpaid wine premises. amended, 1380, as amended, 1381, as amended (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as (26 U.S.C 5357, 5361, 5365)) amended (26 U.S.C. 5365)) SAMPLES § 24.91 Conveyance of untaxpaid wine or spirits. § 24.95 General. Untaxpaid wine or spirits may be Wine or wine spirits may be with- conveyed between different portions of drawn free of tax from a bonded wine the same bonded wine premises. premises for use by or for the account Untaxpaid wine or spirits may also be of the proprietor or the agents of the conveyed by uninterrupted transpor- proprietor, for analysis or testing, tation over any public thoroughfare, or organoleptically or otherwise. Wine or over a private roadway if the owner or wine spirits may be used for testing lessee of the roadway agrees, in writ- purposes, and wine may be used for ing, to allow appropriate TTB officers tasting or sampling on bonded wine access to the roadway to perform their premises free of tax. official duty. The conveyance of wine or spirits as authorized in this section (Sec. 201, Pub. L. 85–859, 72 Stat. 1380, as is subject to the following conditions: amended, 1382, as amended (26 U.S.C. 5362, (a) The untaxpaid wine or spirits are 5372, 5373)) not stored or allowed to remain on any

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§ 24.96 Use off premises. specimen will be marked ‘‘Sample for The proprietor may remove samples Analysis Only’’ and will show the kind of wine or wine spirits free of tax for of wine or wine spirits. analysis or testing purposes. (b) Tasting. The proprietor may take (a) Size. The size of each sample may samples of wine free of tax for not be more than one liter for each lot organoleptic tasting on bonded wine of wine or wine spirits to be analyzed premises. If a room or area is set aside or tested unless the appropriate TTB for public tasting purposes, a record officer authorizes a larger quantity. will be maintained showing the date, (b) Disposition of samples. Remnants quantity and kind of wine transferred or residues of samples remaining after to the room or area for tasting. analysis or testing, and which are not (c) Limitation. The tax will be col- retained as specimens, will be de- lected on any wine or wine spirits with- stroyed or returned to bonded wine drawn under this section which are premises. Free of tax samples or resi- used or disposed of for purposes other dues may not be consumed or sold. than as authorized. When the quantity (c) Records. The proprietor shall of wine or wine spirits withdrawn maintain records of all samples taken under this section exceeds the amount for analysis or testing, showing the necessary for the purpose intended the size of each sample, the kind of wine or tax will be collected on such excess. wine spirits, date of removal, and the (Sec. 201, Pub. L. 85–859, 72 Stat. 1382, as name and address to where sent. amended (26 U.S.C. 5362, 5372)) (d) Labeling of samples. Each sample (Approved by the Office of Management and taken for analysis or testing will be la- Budget under control numbers 1512–0298 and beled ‘‘Sample for Analysis Only’’. The 1512–0503) label will show the name, address, and registry number of the bonded wine Subpart D—Establishment and premises, date, and the kind of wine or wine spirits. Operations (e) Limitation. The tax will be col- § 24.100 General. lected on any wine or wine spirits withdrawn under this section which are Each person desiring to conduct oper- used or disposed of for purposes other ations in wine production, as specified than as authorized. When the quantity in § 24.101(b), (other than the produc- of wine or wine spirits withdrawn tion of wine free of tax as provided in under this section exceeds the amount §§ 24.75 through 24.77) shall, prior to necessary for the purpose intended the commencing operations, establish wine tax will be collected on such excess. premises, make application as provided in § 24.105, file bond, and receive per- (Sec. 201, Pub. L. 85–859, 72 Stat. 1380, as mission to operate wine premises as amended, 1381, as amended, 1382, as amended provided in this part. After approval, (26 U.S.C. 5362, 5367, 5368, 5373)) the wine premises will be designated a (Approved by the Office of Management and bonded winery, bonded wine cellar or Budget under control numbers 1512–0298 and taxpaid wine bottling house. As pro- 1512–0503) vided in § 24.107, the designated bonded [T.D. ATF–299, 55 FR 24989, June 19, 1990, as winery will be used if production oper- amended by T.D. ATF–409, 64 FR 13683, Mar. ations are to be conducted. In addition, 22, 1999] wine premises may be used, in accordance with the provisions of this part, § 24.97 Use on premises. for the conduct of certain other oper- (a) Analysis or testing. The proprietor ations. may take samples of wine or wine spirits free of tax for analysis or testing on (Sec. 201, Pub. L. 85–859, 72 Stat. 1378, as bonded wine premises. The proprietor amended (26 U.S.C. 5351, 5352)) shall maintain records showing the (Approved by the Office of Management and size, kind of wine or wine spirits, date, Budget under control number 1512–0058) and disposition of each sample retained [T.D. ATF–299, 55 FR 24989, June 19, 1990, as as a laboratory specimen. The label of amended by T.D. ATF–409, 64 FR 13684, Mar. each sample retained as a laboratory 22, 1999]

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PREMISES AND OPERATIONS § 24.109, the establishment of taxpaid wine premises. § 24.101 Bonded wine premises. (a) Taxpaid wine premises. Premises (a) General. A person desiring to con- on which taxpaid United States or for- duct operations involving untaxpaid eign wine may be received and stored, wine, including the use of spirits in or blended with wine of the same kind wine production, shall file an applica- and tax class, or reconditioned, and re- tion and bond as provided in § 24.105. moved. Further, a warehouse company or (b) Taxpaid wine bottling house prem- other person may, upon obtaining the ises. Premises on which taxpaid United consent of the proprietor and the sur- States or foreign wine may be received, ety on the bond and upon filing an ap- stored, mixed with wine of the same plication, as provided in § 24.108, and re- kind, tax class and country of origin to ceiving approval, establish at the wine facilitate handling, reconditioned, bot- premises a bonded wine warehouse for tled or packed, and removed. the storage of wine and allied products for credit purposes. (Sec. 201, Pub. L. 85–859, 72 Stat. 1378, as (b) Authorized operations. Except as amended, 1381, as amended (26 U.S.C. 5352, provided in this part, no operation may 5363)) be conducted on bonded wine premises (Approved by the Office of Management and other than those authorized. The fol- Budget under control number 1512–0058) lowing operations are authorized: (1) The receipt, production, blending, § 24.103 Other operations. cellar treatment, storage, and bottling Upon the specific approval of the ap- or packing of untaxpaid wine; propriate TTB officer, other operations (2) The use of wine spirits in beverage not provided for in this part may be wine production and the use of spirits conducted on wine premises. Authority in nonbeverage wine production; (3) The receipt, preparation, use, or to conduct other operations may be ob- removal of fruit, concentrated or tained by submitting an application to unconcentrated fruit juice, or other the appropriate TTB officer. The appli- materials to be used in the production cation must specifically describe the or cellar treatment of wine; and operation to be conducted and the wine (4) The preparation, storage, or re- premises and equipment to be used. An moval of commercial fruit products appropriate TTB officer may make any and by-products (including volatile inquiry necessary to determine wheth- fruit-flavor concentrate) not taxable as er the conduct of other operations on wine. wine premises would jeopardize the revenue, conflict with wine operations, (Sec. 201, Pub. L. 85–859, 72 Stat. 1378, as or be contrary to law. Other operations amended, 1379, as amended, 1380, as amended authorized under this section will be (26 U.S.C. 5351, 5353, 5361)) conducted in accordance with the con- (Approved by the Office of Management and ditions, limitations, procedures, and Budget under control number 1512–0058) terms stated in the approved applica- [T.D. ATF–299, 55 FR 24989, June 19, 1990, as tion. Authority to conduct other oper- amended by T.D. ATF–409, 64 FR 13684, Mar. ations may be withdrawn whenever the 22, 1999] appropriate TTB officer determines the conduct of the other operations on § 24.102 Premises established for taxpaid wine operations. wine premises jeopardizes the revenue, conflicts with wine operations, or is A person desiring to bottle or pack contrary to law. taxpaid United States or foreign wine shall file an application as provided in [T.D. ATF–409, 64 FR 13685, Mar. 22, 1999] § 24.105 to establish a taxpaid wine bottling house premises. A person desiring APPLICATION to conduct taxpaid United States or foreign wine operations, other than § 24.105 General. bottling or packing taxpaid wine, at A person desiring to establish a bond- bonded wine premises shall include in ed winery, bonded wine cellar or tax- their application, as provided in paid wine bottling house shall file an

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application on TTB F 5120.25, Applica- application for a basic permit will be tion to Establish and Operate Wine filed at the time of filing an original or Premises. Approval of TTB F 5120.25 amended application on TTB F 5120.25. will constitute authorization for the Operations requiring a basic permit proprietor to operate. The premises may not be conducted until the basic may not be used for the conduct of op- permit application is approved. No erations under this part unless the pro- Wine Producer’s and Blender’s Basic prietor has a valid approved applica- Permit or Wine Blender’s Basic Permit tion for the operations. The application is required for a bonded wine cellar es- will be executed under the penalties of tablished only for the purpose of stor- perjury and all written statements, af- ing untaxpaid wine even though an ap- fidavits, and any document incor- proved application, TTB F 5120.25, and porated by reference will be considered bond are required. a part of the application. In any instance where a bond is required to be (Sec. 201, Pub. L. 85–859, 72 Stat. 1378, as given or a permit obtained to engage in amended (26 U.S.C. 5351)) an operation, the currently approved (Approved by the Office of Management and application will not be valid with re- Budget under control number 1512–0058) spect to that operation if the bond or [T.D. ATF–299, 55 FR 24989, June 19, 1990, as permit is no longer in effect. In this amended by T.D. ATF–409, 64 FR 13685, Mar. case, the proprietor shall again file an 22, 1999] application and obtain approval before engaging in operations at the wine § 24.107 Designation as a bonded win- premises. A new application is not re- ery. quired when a strengthening bond is Bonded wine premises which will be filed pursuant to § 24.153 or a new bond used for the production of wine or for or superseding bond is filed pursuant to production processes involving the use § 24.154. The appropriate TTB officer of wine will be designated a bonded may require the filing of a new or an winery unless the proprietor applies for amended application in any instance a bonded wine cellar designation. If the where the currently approved applica- proprietor of a bonded wine premises tion is inadequate or incorrect in any designated as a bonded winery does not respect. engage in wine production operations, (August 16, 1954, Ch. 736, 68A Stat. 749, as the appropriate TTB officer may notify amended (26 U.S.C. 6065); sec. 201, Pub. L. 85– the proprietor that the designation of 859, 72 Stat. 1379, as amended, 1392, as amend- the premises is changed from a bonded ed (26 U.S.C. 5356, 5511)) winery to a bonded wine cellar. (Approved by the Office of Management and Budget under control number 1512–0058) (Sec. 201, Pub. L. 85–859, 72 Stat. 1378, as amended (26 U.S.C. 5351)) [T.D. ATF–299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF–409, 64 FR 13683, Mar. (Approved by the Office of Management and 22, 1999] Budget under control number 1512–0058) [T.D. ATF–299, 55 FR 24989, June 19, 1990, as § 24.106 Basic permit requirements. amended by T.D. ATF–409, 64 FR 13683, Mar. Any person intending to engage in 22, 1999] the business of producing or blending wine or purchasing wine for resale at § 24.108 Bonded wine warehouse appli- wholesale is required under the Federal cation. Alcohol Administration Act, as amend- A warehouse company or other per- ed (49 Stat. 978; 27 U.S.C. 203) to obtain son desiring to establish a bonded wine a basic permit. A State, a political sub- warehouse on bonded wine premises for division of a State, or officers or em- storing wine or allied products for ployees of a State or political subdivi- credit purposes shall file an applica- sion acting in their official capacity tion, in letter form, with the appro- are exempted from this requirement. priate TTB officer. The name and ad- The issuance of a basic permit under dress of the applicant and of the bond- the Act is governed by regulations in 27 ed wine premises, and the approximate CFR part 1. Where a basic permit is re- area and storage capacity (in gallons) quired to engage in an operation, an of the bonded wine warehouse, will be

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stated in the application. The application of the operations, a list of the tion will be accompanied by a signed premises, and a statement as to the re- statement from the proprietor of the lationship, if any, of the operation to bonded wine premises requesting the wine operations on wine premises. If establishment of the warehouse, and any of the information required by the consent of the surety of the bond paragraph (c) of this section is on file for the bonded wine premises. with the appropriate TTB officer in (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as connection with any other premises op- amended (26 U.S.C. 5353)) erated by the applicant, that information, if accurate and complete, may be (Approved by the Office of Management and incorporated by reference and made a Budget under control number 1512–0058) part of the application. In this case, [T.D. ATF–299, 55 FR 24989, June 19, 1990, as the name, address, and if any, registry amended by T.D. ATF–409, 64 FR 13683, Mar. number of the premises where the in- 22, 1999] formation is filed will be stated in the § 24.109 Data for application. application. The applicant shall, when required by the appropriate TTB offi- The TTB F 5120.25 is prepared in ac- cer, furnish as part of the application, cordance with the instructions on the additional information as may be nec- form and will include the following, as essary to determine whether the appli- applicable: cation should be approved. If any of the (a) Serial number; submitted information changes during (b) Name and principal business ad- the pending application, the applicant dress of the applicant and the address shall immediately notify the appro- of the wine premises if different from priate TTB officer of the revised infor- the business address; (c) Statement of the type of business mation. organization and of each person having (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as an interest in the business, supported amended, 1392, as amended (26 U.S.C. 5356, by the items of information listed in 5361, 5511)) § 24.110; (Approved by the Office of Management and (d) Indicate whether the application Budget under control number 1512–0058) is for the purpose of establishing a bonded winery, bonded wine cellar, or [T.D. ATF–299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF–409, 64 FR 13685, Mar. taxpaid wine bottling house. Also, indi- 22, 1999] cate whether a taxpaid wine premises is to be established if the application is § 24.110 Organizational documents. for a bonded winery or bonded wine cellar; The supporting information required (e) List of the offices, the incumbents by paragraph (c) of § 24.109, includes, as of which are authorized by the articles applicable, copies of: of incorporation or the board of direc- (a) Corporate documents. (1) Corporate tors to act on behalf of the proprietor charter or a certificate of corporate ex- or to sign the applicant’s name; istence or incorporation. (f) Description of the premises (see (2) List of the directors and officers, § 24.111); showing their names and addresses. (g) Trade names (see § 24.112); (3) Certified extracts or digests of (h) Description of spirits operations; minutes of meetings of the board of di- (i) With respect to wine premises to rectors, authorizing certain individuals which the application relates, a list of to sign for the corporation. the applicant’s basic permits and bonds (4) Statement showing the number of (including those filed with the applica- shares of each class of stock or other tion) showing the name of the surety evidence of ownership, authorized and for each bond; outstanding, and the voting rights of (j) Description of volatile fruit-flavor the respective owners or holders of concentrate operations (see § 24.113); stock. and (b) Articles of partnership. True copies (k) If other operations not specifi- of the articles of partnership, if any, cally authorized by this part are to be and of the certificate of partnership or conducted on wine premises, a descrip- association.

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(c) Statement of interest. (1) Names and wine premises and taxpaid wine prem- addresses of the 10 persons having the ises. The means employed to afford se- largest ownership or other interest in curity and protect the revenue will be each of the classes of stock in the cor- described. If required by the appro- poration, or other legal entity, and the priate TTB officer to segregate oper- nature and amount of the stockholding ations within the premises, the manner or other interest of each, whether the by which the operations are segregated interest appears in the name of the in- will be described. Each building on terested party or in the name of an- wine premises will be described as to other party. If a corporation is wholly- size, construction, and use. Buildings owned or controlled by another cor- on wine premises which will not be poration, those persons of the parent used for wine operations will be de- corporation who meet the above stand- scribed only as to size and use. If the ards are considered to be the persons interested in the business of the sub- wine premises consist of a part of a sidiary, and the names thereof need to building, the rooms or floors will be be furnished only upon the request of separately described. The activities the appropriate TTB officer. conducted in the adjoining portions of (2) In the case of an individual owner the building and the means of ingress or partnership, the name and address of and egress from the wine premises will each person interested in the wine be described. premises, whether the interest appears (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as in the name of the interested party or amended, 1381, as amended (26 U.S.C. 5356, in the name of another for that person. 5357, 5365)) (d) Availability of additional corporate documents. The originals of documents (Approved by the Office of Management and required to be submitted under this Budget under control number 1512–0058) section and additional documents that [T.D. ATF–299, 55 FR 24989, June 19, 1990, as may be required by the appropriate amended by T.D. ATF–409, 64 FR 13683, Mar. TTB officer (such as articles of incor- 22, 1999] poration, bylaws, and any certificate issued by a State authorizing oper- § 24.112 Name of proprietor and trade ations) must be made available to any names. appropriate TTB officer upon request. The applicant shall list on the appli- (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as cation, TTB F 5120.25, the proprietor’s amended (26 U.S.C. 5356)) name or the operating trade name, if different than the proprietor’s name, (Approved by the Office of Management and Budget under control number 1512–0058) and any bottling or packing trade names. However, if a bottling or pack- [T.D. ATF–299, 55 FR 24989, June 19, 1990, as ing trade name is listed on a basic per- amended by T.D. ATF–409, 64 FR 13683, 13685, mit issued to the proprietor under the Mar. 22, 1999] Federal Alcohol Administration Act (49 § 24.111 Description of premises. Stat 978; 27 U.S.C. 204), that trade name is not required to be listed again on the The application will include a description of each tract of land com- application. If State or local law re- prising wine premises. The description quires the registration of a trade name, will be by directions and distances, in the applicant shall certify that each feet and inches (or hundredths of feet), trade name listed on the application is with sufficient particularity to enable so registered. A trade name may not be ready determination of the bounds of used prior to approval of the applica- the wine premises. When required by tion or issuance of a basic permit cov- the appropriate TTB officer, a diagram ering the use of the name. of the wine premises, drawn to scale, (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as will be furnished. The description will amended (26 U.S.C. 5356)) clearly indicate any area of the wine premises to be used as bonded wine (Approved by the Office of Management and premises, used as taxpaid wine prem- Budget under control number 1512–0058) ises, or alternated for use as bonded

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§ 24.113 Description of volatile fruit- § 24.115 Registry number. flavor concentrate operations. Upon approval of the application, the Each applicant intending to produce appropriate TTB officer will assign a volatile fruit-flavor concentrate shall registry number to the bonded winery, include on the TTB F 5120.25 applica- bonded wine cellar, or taxpaid wine tion a step-by-step description of the bottling house. The registry number production procedure to be employed. will be used in all correspondence and The description will commence with on all documents filed subsequently in the obtaining of juice from the fruit connection with the operation of the and continue through each step of the premises and will be shown where re- process to removal of volatile fruit-fla- quired on labels and markings of con- vor concentrate from the system. If tainers or cases filled at the wine volatile fruit-flavor concentrate con- premises. taining more than 24 percent alcohol (Approved by the Office of Management and (high-proof concentrates (essences)) is Budget under control numbers 1512–0058 and to be produced, the proprietor shall in- 1512–0503) dicate any step in the production pro- [T.D. ATF–299, 55 FR 24989, June 19, 1990, as cedure at which any spirits may be fit amended by T.D. ATF–409, 64 FR 13683, Mar. for beverage purposes. The maximum 22, 1999] quantity in gallons of fruit must used and volatile fruit-flavor concentrate § 24.116 Powers of attorney. produced in 24 hours, the maximum The proprietor shall file with the ap- and minimum fold, and the maximum propriate TTB officer a power of attor- percent of alcohol in the volatile fruit- ney for each person authorized to sign flavor concentrate will be stated for or to act on behalf of the proprietor as each kind of fruit used. an attorney-in-fact. A power of attor- (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as ney is not required for any person amended, 1380, as amended, 1392, as amended whose authority has been furnished in (26 U.S.C. 5356, 5361, 5511)) the application. If not limited in dura- tion, the power of attorney will con- (Approved by the Office of Management and Budget under control number 1512–0058) tinue in effect until written notice of revocation is received by the appro- [T.D. ATF–299, 55 FR 24989, June 19, 1990. as priate TTB officer or operations are amended by T.D. TTB–91, 76 FR 5478, Feb. 1, terminated. 2011] (Approved by the Office of Management and § 24.114 Registry of stills. Budget under control number 1512–0058) Any still intended for use in the pro- [T.D. ATF–299, 55 FR 24989, June 19, 1990, as duction of volatile fruit-flavor con- amended by T.D. ATF–409, 64 FR 13683, 13685, centrate will be set up on bonded wine Mar. 22, 1999] premises. Each still is subject to the provisions of subpart C of part 29 of § 24.117 Maintenance of application file. this chapter and will be registered. The listing of a still in the application, and The proprietor shall maintain an ap- the approval of the application, will, as plication file with the information re- provided in 27 CFR 29.55, constitute quired by § 24.109 in complete and cur- registration. rent condition, readily available at the wine premises for inspection by appro- (Sec. 201, Pub. L. 85–859, 72 Stat. 1355, as priate TTB officers. amended, 1379, as amended, 1392, as amended (26 U.S.C. 5179, 5356, 5511)) (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as amended (26 U.S.C. 5356, 5367)) (Approved by the Office of Management and Budget under control number 1512–0058) (Approved by the Office of Management and Budget under control number 1512–0058) [T.D. ATF–299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF–409, 64 FR 13685, Mar. [T.D. ATF–299, 55 FR 24989, June 19, 1990, as 22, 1999; T.D. ATF–462, 66 FR 42737, Aug. 15, amended by T.D. ATF–409, 64 FR 13684, Mar. 2001] 22, 1999]

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CHANGES SUBSEQUENT TO ORIGINAL amended application or issuance of an ESTABLISHMENT amended permit, as the case may be.

§ 24.120 Amended application. (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as amended (26 U.S.C. 5356)) Where there is a change in any of the information included in the current ap- (Approved by the Office of Management and Budget under control number 1512–0058) proved application, the proprietor shall, within 30 days of the change (ex- § 24.123 Change in stockholders. cept as otherwise provided in this part), submit an amended application If there is a change in the list of to the appropriate TTB officer and set stockholders furnished under the provi- forth the information necessary to sions of § 24.110(c)(1), the proprietor make the application file accurate and may, in lieu of submission within 30 current. Where the change affects only days of the change under the provisions pages or parts of pages of the current of § 24.120, submit a new list of stock- application, as many complete pages as holders annually on May 1, or any will enable the replacement of the other approved date, to the appropriate pages affected and maintenance of the TTB officer which has on file the list of file as provided in § 24.117 will be sub- stockholders, provided the sale or mitted. transfer of capital stock does not result in a change in the control or man- (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as agement of the business. amended (26 U.S.C. 5356)) (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as (Approved by the Office of Management and amended (26 U.S.C. 5356)) Budget under control number 1512–0058) (Approved by the Office of Management and [T.D. ATF–299, 55 FR 24989, June 19, 1990, as Budget under control number 1512–0058) amended by T.D. ATF–409, 64 FR 13683, Mar. 22, 1999] [T.D. ATF–299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF–409, 64 FR 13683, Mar. § 24.121 Changes affecting permits. 22, 1999] The proprietor shall follow the provi- § 24.124 Change in corporate officers. sions of 27 CFR part 1 to effect any change pertaining to a permit issued Where there is any change in the list under the Federal Alcohol Administra- of corporate officers furnished under tion Act. the provisions of § 24.110(a)(2), the proprietor shall submit, within 30 days of (49 Stat. 978; 27 U.S.C. 203). the change, an amended application supported by a new list of corporate of- § 24.122 Change in name of proprietor ficers and a statement of the changes or trade name. reflected in the new list. Where the Where there is to be a change in the proprietor has shown that certain cor- name of the proprietor or operating porate officers listed on the original trade name, the proprietor shall file an application have no responsibilities in amended application and, if a basic connection with the operations covered permit has been issued under the Fed- by the application, the appropriate eral Alcohol Administration Act (49 TTB officer may waive the require- Stat. 978; 27 U.S.C. 203), an application ment for submitting an amended appli- for amendment of the basic permit. cation to cover a change in those cor- Where there is a change in or addition porate officers. of a trade name, the proprietor shall file an amended application or, if a (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as amended (26 U.S.C. 5356)) basic permit has been issued under the Federal Alcohol Administration Act (49 (Approved by the Office of Management and Stat. 978; 27 U.S.C. 203), an application Budget under control number 1512–0058) for amendment of the basic permit. Op- [T.D. ATF–299, 55 FR 24989, June 19, 1990, as erations under a new name may not be amended by T.D. ATF–409, 64 FR 13683, Mar. conducted before approval of the 22, 1999]

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§ 24.125 Change in proprietorship. copy of a foreclosure action, or a copy (a) General. If there is a change in the of the court order directing the liquida- proprietorship of wine premises quali- tion of the business, and, if the wine fied to operate under this part, the out- premises is covered by a bond, a con- going proprietor shall comply with the sent of surety wherein the surety and requirements of § 24.140, and the suc- the fiduciary agree to remain liable on cessor shall, before commencing oper- the bond. ations, apply for and obtain any re- (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as quired permits, file any required bonds, amended (26 U.S.C. 5356)) and file an application for and receive permission to operate in the same man- (Approved by the Office of Management and Budget under control number 1512–0058) ner as a person qualifying a new wine premises; however, the successor may, [T.D. ATF–299, 55 FR 24989, June 19, 1990, as in the manner provided in § 24.127, amended by T.D. ATF–312, 56 FR 31077, July adopt the approved formulas of the 9, 1991; T.D. ATF–409, 64 FR 13683, Mar. 22, outgoing proprietor. Wine, spirits, and 1999] winemaking materials may be trans- § 24.126 Change in proprietorship in- ferred from an outgoing proprietor to a volving a bonded wine warehouse. successor in the manner provided in § 24.140. Where a bonded wine warehouse has (b) Fiduciary. A successor to the pro- been established on wine premises and prietorship of wine premises who is an it is desired to continue the operation administrator, executor, receiver, of the bonded wine warehouse subse- trustee, assignee, or other fiduciary quent to a change in the proprietorship shall, except as otherwise provided in of the bonded winery or bonded wine this section, comply with the provi- cellar, the proprietor of the bonded sions of paragraph (a) of this section. wine warehouse shall file a letter appli- However, in lieu of filing a new bond, if cation, accompanied by an affirming a bond is required, the fiduciary may statement from the new proprietor of furnish a consent of surety extending the bonded winery or bonded wine cel- the terms of any bonds of the prede- lar, requesting the continuation of the cessor, and any pertinent information bonded wine warehouse and also file contained in the predecessor’s applica- evidence of sufficient bond coverage. tion may be incorporated by reference. In addition, the fiduciary shall furnish (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as amended (26 U.S.C. 5353)) a certified copy of the order of the court or other pertinent document (Approved by the Office of Management and showing the appointment as such fidu- Budget under control number 1512–0058) ciary. The effective date of the qualifying documents filed by a fiduciary § 24.127 Adoption of formulas. will be the effective date of the court The adoption of approved formulas order, or the date specified for the fidu- by a successor proprietor will be in the ciary to assume control. If the fidu- form of an application, filed with the ciary was not appointed by a court, the appropriate TTB officer. The applica- date of assuming control will coincide tion will list the formulas for adoption with the effective date of the quali- by formula number, name of product, fying documents filed by the fiduciary. and date of approval. The application (c) Exception. A fiduciary intending will clearly show that the outgoing to liquidate the business conducted on proprietor has authorized the successor wine premises, i.e., disposition of any proprietor’s use of the approved for- wine and spirits on hand, including use mulas. of any cellar treatment necessary to put the wine in merchantable condi- (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as amended (26 U.S.C. 5356)) tion, who does not intend to produce wine, or use spirits, or receive wine in (Approved by the Office of Management and bond may be exempted from qualifying Budget under control number 1512–0058) as the proprietor of the wine premises [T.D. ATF–299, 55 FR 24989, June 19, 1990, as upon filing with the appropriate TTB amended by T.D. ATF–409, 64 FR 13683, Mar. officer a statement to that effect, a 22, 1999]

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§ 24.128 Continuing partnerships. used prior to approval of the amended application. If, under the laws of the particular State, the partnership is not termi- (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as nated upon the death or insolvency of a amended, 1392, as amended (26 U.S.C. 5356, partner but continues until the dissolu- 5511)) tion of the partnership is completed, (Approved by the Office of Management and and the surviving partner has the ex- Budget under control number 1512–0058) clusive right to the control and possession of the partnership assets for the § 24.131 Change in building construc- purpose of liquidation and settlement, tion and use of premises. the surviving partner may continue to Where a change is to be made to operate the wine premises under the buildings located on wine premises, or prior qualification of the partnership, in the use of any portion of the wine provided a consent of surety is filed premises, which affects the accuracy of wherein the surety and the surviving the application, the proprietor shall, partner agree to remain liable on any before making such change in con- bond covering the bonded wine prem- struction or use, submit a notice to the ises. A surviving partner who acquires appropriate TTB officer. The notice the business on completion of the dis- will describe the proposed change in solution of the partnership shall qual- detail. The proprietor shall include the ify from the date of acquisition, as pro- change covered by the notice in the vided in § 24.125(a). The rule set forth in next amended TTB F 5120.25 required to this section will also apply where there be filed, unless the appropriate TTB of- is more than one surviving partner. ficer requires immediate amendment. (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as amended (26 U.S.C. 5356)) amended (26 U.S.C. 5356)) (Approved by the Office of Management and (Approved by the Office of Management and Budget under control number 1512–0058) Budget under control number 1512–0058) [T.D. ATF–299, 55 FR 24989, June 19, 1990, as § 24.129 Change in location. amended by T.D. ATF–312, 56 FR 31077, July Where there is a change in the loca- 9, 1991; T.D. ATF–409, 64 FR 13685, Mar. 22, tion of wine premises, the proprietor 1999] shall file an amended application and ALTERNATION an application for amendment of the basic permit, if any, and if a bond has § 24.135 Wine premises alternation. been filed, either a new bond or a consent of surety. Operation of wine prem- (a) General. The proprietor of a bond- ises may not be commenced at the new ed winery or bonded wine cellar may location prior to approval of the alternate all or a portion of wine prem- amended application and issuance of ises for use as a taxpaid wine bottling any amended permit. house or use as taxpaid wine premises. The proprietor may also alternate the (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as use of adjacent or contiguous premises amended (26 U.S.C. 5356)) qualified under 26 U.S.C. chapter 51 (Approved by the Office of Management and (distilled spirits plant, brewery, etc.) Budget under control number 1512–0058) for use as wine premises or vice versa. If a proprietor of a bonded wine cellar or § 24.130 Change in volatile fruit-flavor winery wishes to use all or a portion of concentrate operations. such premises alternately as a volatile If the proprietor desires to make any fruit-flavor concentrate plant or vice- change in the process employed to a-versa, the proprietor must comply produce volatile fruit-flavor con- with the requirements of §§ 18.40 centrate and the change affects the ac- through 18.43 of this title. curacy of the description of process in- (b) Qualifying documents. Where the cluded in the application, the propri- proprietor desires to alternate bonded etor shall file an amended application wine premises as taxpaid wine bottling to include the amended or new process. house premises or taxpaid wine prem- The new or changed process may not be ises, or other premises qualified under

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26 U.S.C. chapter 51, the following conditioned on compliance by the pro- qualifying documents will be filed: prietor with the provisions of this sec- (1) A statement on the application tion. Authority for the alternation of TTB F 5120.25 that an alternation of bonded wine premises, taxpaid wine wine premises will occur; bottling house premises, taxpaid wine (2) Evidence of existing bond, consent premises, or other premises qualified of surety, or a new bond covering the under 26 U.S.C. chapter 51 may be with- alternation; drawn whenever in the judgment of the (3) A description of how taxpaid wine appropriate TTB officer the revenue is or spirits, or untaxpaid wine or spirits jeopardized or the effective administra- will be identified and segregated; and tion of this part is hindered by the con- (4) Any other document or additional tinuation of the authorization. information the appropriate TTB offi- (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as cer may require. amended, 1380, as amended, 1381, as amended (c) Alternation. After the necessary (26 U.S.C. 5356, 5357, 5361, 5363, 5365, 5367)) qualifying documents have been ap- (Approved by the Office of Management and proved by the appropriate TTB officer, Budget under control number 1512–0058) the proprietor may alternate wine premises as described in the applica- [T.D. ATF–299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF–409, 64 FR 13683, 13685, tion. Any portion of wine premises on Mar. 22, 1999; T.D. ATF–455, 66 FR 29483, May which taxpaid wine is located will be 31, 2001] considered taxpaid wine premises or taxpaid wine bottling house premises § 24.136 Procedure for alternating pro- and any portion of the premises on prietors. which wine not identified as taxpaid is (a) General. Wine premises, or parts located will be considered bonded wine thereof, may be operated alternately premises. The proprietor shall, prior to by proprietors who have each filed and the initial alternation of the premises, received approval of the necessary ap- identify by portable signs or tags, or by plications and bonds and have qualified any other method or manner satisfac- under the provisions of this part. tory to the appropriate TTB officer, ei- Where operations by alternating pro- ther all taxpaid wine on taxpaid wine prietors are limited to parts of the premises or taxpaid wine bottling wine premises, the application will de- house premises or all untaxpaid wine scribe areas, buildings, floors, or rooms on bonded wine premises. which will be alternated and will be ac- (d) Segregation. The proprietor shall companied by a diagram delineating keep untaxpaid wine or spirits phys- the parts of the wine premises to be al- ically separated from taxpaid wine or ternated. A separate diagram will be spirits and on the designated premises. submitted to depict each arrangement This separation will be by use of tanks, under which the wine premises will be rooms, buildings, partitions, pallet operated. Once the qualifying docu- stacks, or complete physical separa- ments have been approved, and oper- tion, or by any other method or man- ations initiated, the wine premises, or ner which will clearly and readily dis- parts thereof, may be alternated. Any tinguish untaxpaid wine or spirits from transfer of wine, spirits, or other ac- taxpaid wine or spirits and is satisfac- countable materials from one propri- tory to the appropriate TTB officer. etor to the other proprietor will be in- Where necessary for the protection of dicated in the records and reports of the revenue or enforcement of 26 U.S.C. each proprietor. Operation of a bonded chapter 51, the appropriate TTB officer winery engaged in the production of may require that the portions of wine wine by an alternate proprietor will be premises alternated under this section at least one calendar day in length. be separated by partitions or other- (b) Alternation. All operations in any wise. area, building, floor, or room to be al- (e) Conditions. Authority for the alternated will be completely finished ternation of bonded wine premises, tax- and all wine, spirits, and other ac- paid wine bottling house premises, tax- countable materials will be removed paid wine premises, or other premises from the alternated wine premises or qualified under 26 U.S.C chapter 51 is transferred to the incoming proprietor.

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However, wine, spirits, and other ac- customs and the appropriate TTB offi- countable materials may be retained in cer. When it is necessary to convey locked tanks at wine premises to be al- wine in customs custody across bonded ternated and remain in the custody of wine premises, the proprietor shall the outgoing proprietor. comply with the provisions of § 24.92. (c) Bonds. The outgoing proprietor (b) Qualifying documents. Where the who has filed bond and intends to re- proprietor desires to alternate a por- sume operation of the alternated areas, tion of wine premises for customs use, buildings, floors, or rooms following the following qualifying documents suspension of operations by an alter- will be filed: nating proprietor shall execute a con- (1) TTB F 5120.25 to cover the alter- sent of surety to continue in effect all nation; bonds. Where wine, spirits, or other ac- (2) A diagram clearly depicting any countable materials subject to tax area, building, floor, room or major under 26 U.S.C. chapter 51 are to be re- equipment in use during the alter- tained in tanks on the wine premises to nation; and be alternated, the outgoing proprietor (3) Any other documents or addi- shall also execute a consent of surety tional information the appropriate to continue the liability of all bonds TTB officer may require. for the tax on the materials, notwith- (c) Alternation. After approval of the standing the change in proprietorship. qualifying documents by the appro- (d) Records. Each proprietor shall priate TTB officer, the proprietor may maintain separate records and submit alternate the wine premises. Portions a separate TTB F 5120.17, Report of of the wine premises to be excluded by Bonded Wine Premises Operations. All curtailment or included by extension transfers of wine, spirits, and other ac- may not be used for purposes other countable materials will be reflected in than those authorized. Prior to the ef- the records of each proprietor. Each fective date and hour of the alter- proprietor shall maintain a record nation, the proprietor shall remove all showing the name and registry number wine and spirits from the portion of the of the incoming or outgoing proprietor, wine premises to be alternated for cus- the effective date and hour of alter- toms purposes. nation, and the quantity in gallons and (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as the percent alcohol by volume or proof amended, 1380, as amended, 1381, as amended of any wine, spirits, or other account- (26 U.S.C. 5356, 5357, 5361, 5365, 5367)) able materials transferred or received. (Approved by the Office of Management and (Sec. 201, Pub. L. 85–859, 72 Stat. 1378, as Budget under control number 1512–0058) amended, 1379, as amended, 1380, as amended, [T.D. ATF–299, 55 FR 24989, June 19, 1990, as 1381, as amended, 1382, as amended (26 U.S.C. amended by T.D. ATF–344, 58 FR 40354, July 5351, 5352, 5354, 5356, 5361, 5362, 5363, 5367, 28, 1993; T.D. ATF–409, 64 FR 13683, 13685, 5373)) Mar. 22, 1999] (Approved by the Office of Management and Budget under control numbers 1512–0058, PERMANENT DISCONTINUANCE OF 1512–0216 and 1512–0298) OPERATIONS

[T.D. ATF–299, 55 FR 24989, June 19, 1990, as § 24.140 Notice. amended by T.D. ATF–338, 58 FR 19064, Apr. 12, 1993] (a) General. Where all or part of the operations at a wine premises are to be § 24.137 Alternate use of the wine permanently discontinued, the propri- premises for customs purposes. etor shall file with the appropriate (a) General. The wine premises may TTB officer a notice in letter form to be alternated as a Customs Bonded cover the discontinuance. The propri- Warehouse under applicable customs etor shall state in the notice the date laws and regulations, for the purpose of on which operations will be discon- measuring, gauging, and bottling or tinued and, if the wine premises are to packing wine. The use of the portion of be transferred to a successor propri- the wine premises alternated as a Cus- etor, the name of the successor propri- toms Bonded Warehouse is subject to etor. Any basic permit issued to the the approval of the district director of proprietor under the Federal Alcohol

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Administration Act (49 Stat. 978; 27 § 24.141 Bonded wine warehouse. U.S.C. 203) for the operation discon- Where all operations at a bonded tinued will be submitted to the appro- wine warehouse are to be permanently priate TTB officer with a written re- discontinued, the warehouse proprietor quest for cancellation. shall file with the appropriate TTB of- (b) Bonded wine premises. The propri- ficer a notice in letter form to cover etor shall certify in the notice, as ap- the discontinuance. The warehouse plicable, that: proprietor shall state in the notice the (1) All wine, spirits, or volatile fruit- name, registry number, and address of flavor concentrate have been lawfully the wine premises on which the ware- removed from bonded wine premises, house facilities are located and the destroyed, or transferred to a successor date on which operations of the bonded as of the effective date of discontinu- wine warehouse will be discontinued. ance, (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as (2) No wine, spirits, or volatile fruit- amended (26 U.S.C. 5353)) flavor concentrate are in transit to (Approved by the Office of Management and bonded wine premises, and Budget under control number 1512–0292) (3) All approved applications covering the transfer of spirits to bonded [T.D. ATF–299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF–409, 64 FR 13683, Mar. wine premises have been returned to 22, 1999] the appropriate TTB officer. The proprietor shall submit a report BONDS AND CONSENTS OF SURETY marked ‘‘Final’’ on the TTB F 5120.17, Report of Bonded Wine Premises Oper- § 24.145 General requirements. ations. Any wine, spirits, or volatile Each person required to file a bond or fruit-flavor concentrate transferred to consent of surety under this part must a successor will be identified as prepare, execute and submit the bond ‘‘Transferred to successor’’ on the re- or consent of surety on the prescribed port and identified as ‘‘Received from form in accordance with this part and predecessor’’ on the initial report filed the instructions printed on the form. A by the successor. person may not commence or continue (c) Taxpaid wine bottling house prem- any business or operation relating to wine until all bonds and consents of ises or Taxpaid wine premises. The pro- surety required under this part with re- prietor shall certify in the notice that spect to the business or operation have all taxpaid United States or foreign been approved by the appropriate TTB wine on hand have been disposed of, or officer. if not yet disposed of, the manner of disposition and the time period in (Sec. 201, Pub. L. 85–859, 72 Stat. 1394, as which the disposition will occur. The amended (26 U.S.C. 5551)) proprietor shall include taxpaid United (Approved by the Office of Management and States wine on the TTB F 5120.17 report Budget under control number 1512–0058) marked ‘‘Final.’’ Any United States [T.D. ATF–299, 55 FR 24989, June 19, 1990, as taxpaid wine transferred to a successor amended by T.D. ATF–409, 64 FR 13685, Mar. will be identified as ‘‘Transferred to 22, 1999] successor’’ on the report and identified as ‘‘Received from predecessor’’ on the § 24.146 Bonds. initial report filed by the successor. (a) Wine bond. The proprietor shall give bond on TTB F 5120.36, Wine Bond, (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as to cover the liability for excise taxes amended (26 U.S.C. 5367)) imposed by the Internal Revenue Code (Approved by the Office of Management and of 1986, on wines produced or received Budget under control numbers 1512–0058 and by the proprietor. The bond will apply 1512–0216) to wine, spirits, and volatile fruit-fla- [T.D. ATF–299, 55 FR 24989, June 19, 1990, as vor concentrate, or other commodities amended by T.D. ATF–338, 58 FR 19064, Apr. subject to tax under 26 U.S.C. chapter 12, 1993; T.D. ATF–409, 64 FR 13683, Mar. 22, 51, in transit to or on bonded wine 1999] premises, and to the operations of the

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bonded wine premises, whether the withdraws wine from a bonded wine transaction or operation on which the premises without payment of tax for proprietor’s liability is based occurred use in the manufacture of vinegar shall on or off the proprietor’s premises. The file a bond on TTB F 5510.2, Bond Cov- bond will provide that the proprietor ering Removal to and Use of Wine at shall faithfully comply with all provi- Vinegar Plant, to ensure the payment sions of law and regulation relating to of the tax on the wine until such wine activities covered by the bond. This becomes vinegar. bond has a tax obligation limit of $500 for wine removed from bonded wine (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as premises on which the tax has been de- amended, 1380, as amended (26 U.S.C. 5354, termined, but not paid, unless the total 5362)) penal sum of the operations bond is (Approved by the Office of Management and $2,000 or more and the proprietor and Budget under control number 1512–0058) the surety designate $1,000 of this amount as the obligation limit for wine [T.D. ATF–299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF–338, 58 FR 19064, Apr. on which the tax has been determined, 12, 1993; T.D. TTB–79, 74 FR 37404, July 28, but not paid. 2009] (b) Tax deferral bond. Where the proprietor removes wine from bonded wine § 24.147 Operations bond or unit bond. premises for consumption or sale, after determination and before payment of Notwithstanding the provisions of tax, and the tax unpaid at any one § 24.146, each person intending to com- time amounts to more than $500, the mence or to continue business as the proprietor shall, in addition to any proprietor of a bonded wine premises other bond required by this part, fur- with an adjacent or contiguous dis- nish a tax deferral bond on TTB F tilled spirits plant qualified under 27 5120.36, Wine Bond, to ensure payment CFR part 19 for the production of dis- of the tax on the wine. Under the con- tilled spirits shall, in lieu of a winery ditions provided in paragraph (a) of bond and the bonds required under the this section, this amount may be provisions of 26 U.S.C. 5173, as amend- changed to $1,000 by the terms of the ed, give an operations bond or unit bond or through a consent of surety be- bond in accordance with the applicable tween the proprietor and the surety. provisions of 27 CFR part 19. The tax deferral bond and the wine bond may be submitted on the same (Sec. 805(c), Pub. L. 96–39, 93 Stat. 276 (26 TTB F 5120.36. U.S.C. 5173)) (c) Wine vinegar plant bond. The pro- (Approved by the Office of Management and prietor of a wine vinegar plant who Budget under control number 1512–0058)

§ 24.148 Penal sums of bonds. The penal sums of bonds prescribed in this part are as follows:

Penal sum Bond Basis Minimum Maximum

(a) Wine Bond, TTB F 5120.36 (1) Wine operations coverage. (i) Not less than the tax on all $1,000 $50,000 wine or spirits possessed, in transit, or unaccounted for at any one time, taking into account the appropriate small producer wine tax credit. (ii) Where the liability exceeds $250,000 ...... 100,000 (2) Tax deferral coverage. Where the unpaid tax amounts to 500 250,000 more than $500, not less than the amount of tax which, at any one time, has been determined but not paid. Exception: $1,000 of the wine operations coverage may be allocated to cover the amount of tax which, at any one time, has been determined but not paid, if the total operations coverage is $2,000 or more.

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Penal sum Bond Basis Minimum Maximum

(b) Wine Vinegar Plant Bond, Not less than the tax on all wine on hand, in transit, or unac- 1,000 100,000 TTB F 5510.2. counted for at any one time. * The proprietor of bonded wine premises who operates an adjacent or contiguous wine vinegar plant with a wine bond that does not cover the operation may file a consent of surety to extend the terms of the wine bond in lieu of filing a wine vinegar plant bond.

(26 U.S.C. 5354, 5362) (Approved by the Office of Management and Budget under control number 1513–0009) [T.D. TTB–64, 72 FR 65454, Nov. 21, 2007]

§ 24.149 Corporate surety. the appropriate TTB officer may require a certification of validity. (a) Surety bonds required by this part may be obtained only from cor- (July 30, 1947, Ch. 390, Pub. L. 80–280, 61 Stat. porate sureties which hold certificates 648, as amended (26 U.S.C. 6, 7)) of authority from and are subject to (Approved by the Office of Management and the limitations prescribed by the Sec- Budget under control number 1512–0058) retary as set forth in the current revi- [T.D. ATF–299, 55 FR 24989, June 19, 1990, as sion of Treasury Department Circular amended by T.D. ATF–409, 64 FR 13683, Mar. No. 570 (Companies Holding Certifi- 22, 1999] cates of Authority as Acceptable Sure- ties on Federal bonds and as Accept- § 24.151 Deposit of collateral security. able Reinsuring Companies). (a) Bonds or notes of the United (b) Treasury Department Circular States, or other obligations which are No. 570 is published in the FEDERAL unconditionally guaranteed as to both REGISTER yearly on the first working interest and principal by the United day in July. As revisions of the cir- States, may be pledged and deposited cular occur, the revisions are published as collateral security in lieu of cor- in the FEDERAL REGISTER. Copies may porate sureties in accordance with the be obtained from the Audit Staff, Fi- provisions of Treasury Department Cir- nancial Management Service, Depart- cular No. 154 (31 CFR part 225, Accept- ment of the Treasury, Washington, DC ance of Bonds, Notes or Other Obliga- 20226. tions Issued or Guaranteed by the (July 30, 1947, Ch. 390, Pub. L. 80–280, 61 Stat. United States as Security in Lieu of 648, as amended (6 U.S.C. 6, 7)) Surety or Sureties on Penal Bonds). Cash, postal money orders, certified § 24.150 Powers of attorney. checks, cashiers’ checks, or treasurers’ Each bond, and each consent to checks may also be furnished as collat- changes in the terms of a bond, will be eral security in lieu of corporate sure- accompanied by a power of attorney ties. whereby the surety authorizes the (b) Treasury Department Circular agent or officer who executed the bond No. 154 is periodically revised and con- or consent to act on behalf of the sur- tains the provisions of 31 CFR part 225 ety. The appropriate TTB officer may and the forms prescribed in 31 CFR require additional evidence of the au- part 225. Copies of the circular may be thority of the agent or officer of the obtained from the Surety Bond Branch, surety to execute the bond or consent. Financial Management Service, De- The power of attorney will be prepared partment of the Treasury, Washington, on a form provided by the surety and DC 20226. executed under the corporate seal of (July 30, 1947, Ch. 390, 61 Stat. 650 (6 U.S.C. the surety. If the power of attorney is 15); August 16, 1954, Ch. 736, 68A Stat. 847, as other than a manually signed original, amended (26 U.S.C. 7101))

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§ 24.152 Consents of surety. show the current date of execution and Consents of surety to changes in the the effective date. terms of bonds will be executed on (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as Form 1533 by the principal and by the amended, 1380, as amended, 1394, as amended surety with the same formality and (26 U.S.C. 5354, 5362, 5551)) evidence of authority as is required for (Approved by the Office of Management and the execution of bonds. Budget under control number 1512–0058) (Approved by the Office of Management and [T.D. ATF–299, 55 FR 24989, June 19, 1990, as Budget under control number 1512–0058) amended by T.D. ATF–409, 64 FR 13683, Mar. § 24.153 Strengthening bonds. 22, 1999] In any instance where the penal sum § 24.155 Disapproval and appeal from of the bond on file becomes insuffi- disapproval. cient, the principal shall either give a strengthening bond with the same sur- (a) Disapproval. The appropriate TTB ety to attain a sufficient penal sum or officer may disapprove any bonded give a new bond covering the entire li- wine premises bond or consent of sur- ability. Strengthening bonds will not ety if the individual, firm, partnership, be approved where any notation is corporation, or association giving the made thereon which is intended, or bond, or owning, controlling, or ac- which may be construed, as a release of tively participating in the manage- any former bond, or as limiting the ment of the bonded wine premises of amount of either bond to less than its the individual, firm, partnership, cor- full penal sum. Strengthening bonds poration, or association giving the will show the current date of execution bond, has been previously convicted in and the effective date. a court of competent jurisdiction of: (Sec. 201, Pub. L. 85–859, 72 Stat. 1394, as (1) Any fraudulent noncompliance amended (26 U.S.C. 5551)) with any provision of any law of the (Approved by the Office of Management and United States, if such provision relates Budget under control number 1512–0058) to internal revenue or customs tax- ation of distilled spirits, wine, or beer, § 24.154 New or superseding bonds. or if such offense has been com- When, in the opinion of the appro- promised with the person on payment priate TTB officer, the interests of the of penalties or otherwise, or Government demand it, or in any case (2) Any felony under a law of any where the validity of the bond becomes State, or of the District of Columbia, impaired in whole or in part for any or of the United States, prohibiting the reason, the principal will be required to manufacture, sale, importation, or give a new bond. A new bond will be re- transportation of distilled spirits, quired immediately in the case of the wine, beer, or other intoxicating liq- insolvency of a corporate surety. Ex- uor. ecutors, administrators, assignees, re- ceivers, trustees, or other persons act- (b) Appeal from disapproval. Where a ing in a fiduciary capacity, to continue bond or consent of surety is dis- or to liquidate the business of the prin- approved by the appropriate TTB offi- cipal, will execute and file a new bond cer, the person giving the bond may ap- or obtain the consent of the surety or peal the disapproval to the Adminis- sureties on the existing bond or bonds. trator. The decision of the Adminis- When under the provisions of § 24.157 trator will be final. the surety has filed an application to (Sec. 201, Pub. L. 85–859, 72 Stat. 1394, as be relieved of liability under any bond amended (26 U.S.C. 5551)) given under this part and the principal desires or intends to continue business (Approved by the Office of Management and or operations to which the bond re- Budget under control number 1512–0058) lates, the principal shall file a valid su- [T.D. ATF–299, 55 FR 24989, June 19, 1990, as perseding bond to be effective on or be- amended by T.D. ATF–409, 64 FR 13683, Mar. fore the date specified in the surety’s 22, 1999] notice. New or superseding bonds will

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§ 24.156 Termination of bonds. from liability to the extent set forth in § 24.158. A bond prescribed in § 24.146 may be terminated as to future liability pursu- (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as ant to application by the surety as pro- amended, 1380, as amended (26 U.S.C. 5354, 5362)) vided in § 24.157; pursuant to approval of a superseding bond; upon receipt of (Approved by the Office of Management and notification from the principal that the Budget under control number 1512–0058) business has been discontinued and all [T.D. ATF–299, 55 FR 24989, June 19, 1990, as wine and spirits have been removed amended by T.D. ATF–409, 64 FR 13683, Mar. from the bonded wine premises as pro- 22, 1999] vided in § 24.140(b); or in the case of a § 24.158 Extent of relief. tax deferral bond, the termination will (a) General. The surety on any bond be issued upon receipt of written notifi- required by this part who has filed a cation from the principal that remov- notice for relief from liability as pro- als of wine requiring a tax deferral vided in § 24.157 will be relieved from li- bond have been discontinued. ability under bond as set forth in this (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as section. amended (26 U.S.C. 5354)) (b) Wine bond. Where a new or superseding bond is filed, the surety of the (Approved by the Office of Management and existing bond will be relieved of future Budget under control number 1512–0058) liability with respect to wine, spirits, volatile fruit-flavor concentrate, or § 24.157 Application by surety for re- any other commodities subject to tax lief from bond. under 26 U.S.C. chapter 51 on hand or in A surety on any bond required by transit to bonded wine premises on or this part may at any time, in writing, after the effective date of the new or notify the principal and the appro- superseding bond. Notwithstanding priate TTB officer in whose office the such relief, the surety will remain lia- bond is on file, that it desires after a ble for the tax on all wine or volatile specified date, to be relieved of liabil- fruit-flavor concentrate produced at, ity under the bond. The date may not and for wine, spirits, and volatile fruit- be less than 10 days after the date no- flavor concentrate consigned to, the tice is received by the appropriate TTB bonded wine premises, and for all other officer in the case of a tax deferral liabilities incurred, during the term of bond, and not less than 90 days after the bond. Where a new or superseding bond is not filed the surety will, in ad- the date the notice is received in the dition to the continuing liabilities case of a bonded wine premises bond or specified above, remain liable for all wine vinegar plant bond. The surety wine, spirits, volatile fruit-flavor con- will also file with the appropriate TTB centrate, or other commodities subject officer an acknowledgment, or other to tax under 26 U.S.C. chapter 51 on evidence of service, of a notice on the hand or in transit to bonded wine principal. The 10 day or 90 day period premises on the date specified in the does not commence until both the ac- notice, until all the wine, spirits, vola- knowledgment or other evidence of tile fruit-flavor concentrate, or com- service and the notice are filed. If a no- modities subject to tax under 26 U.S.C. tice is not thereafter withdrawn in chapter 51 have been lawfully disposed writing, the rights of the principal as of, or a new bond has been filed cov- supported by the bond will be termi- ering the liability. nated on the date specified in the no- (c) Tax deferral bond. The surety will tice, and the surety will be relieved be relieved of liability for the tax on any wine removed from the bonded wine premises after the date specified in the notice. The surety will continue to be liable for the tax on wine removed for consumption or sale on or before the date specified in the notice, until all tax is fully paid.

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(d) Wine vinegar plant bond. The sur- to be conducted and to afford adequate ety will be relieved of liability for tax protection to the revenue. on wine withdrawn for the manufac- (Sec. 201, Pub. L. 85–859, 72 Stat. 1378, as ture of vinegar after the date specified amended, 1379, as amended, 1380, as amended, in the notice. The surety will continue 1381, as amended (26 U.S.C. 5351, 5352, 5357, to be liable for the tax on wine with- 5361, 5363)) drawn on or before the date specified in [T.D. ATF–299, 55 FR 24989, June 19, 1990, as the notice, until all wine is fully ac- amended by T.D. ATF–409, 64 FR 13683, Mar. counted for. 22, 1999] (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as § 24.166 Buildings or rooms. amended, 1380, as amended (26 U.S.C. 5354, All buildings or rooms on wine prem- 5362)) ises in which wine operations or other (Approved by the Office of Management and operations as are authorized in this Budget under control number 1512–0058) part are conducted will be located, constructed, and equipped in a manner § 24.159 Release of collateral security. suitable for the intended purpose and Collateral security pledged and de- to afford adequate protection to the posited will be released only in accord- revenue. Each building or room will be ance with the provisions of 31 CFR part constructed of substantial materials 225. The collateral security will not be and separated from adjacent or contig- released by the appropriate TTB officer uous buildings, rooms, or designated until liability under the bond for which areas in a manner satisfactory to the it was pledged has been terminated. If appropriate TTB officer. Where spirits satisfied that the interests of the Gov- are to be received and stored in pack- ernment will not be jeopardized, the ages, a storage room equipped for locking will be provided. The proprietor appropriate TTB officer will fix the shall make provisions to assure TTB date or dates on which a part or all of officers have ready ingress to and the collateral security may be re- egress from any building or room on leased. At any time prior to the release wine premises, and shall furnish at the of the collateral security, the appro- request of the appropriate TTB officer priate TTB officer may, for proper evidence that the means of ingress and cause, extend the date of release of the egress by TTB officers are assured. security for such additional length of Where the appropriate TTB officer time as deemed appropriate. finds that any building or room on (July 30, 1947, Ch. 390, Pub. L. 80–280, 61 Stat. wine premises is located, constructed, 650 (31 U.S.C. 9301, 9303)) or equipped as to afford inadequate protection to the revenue, the propri- (Approved by the Office of Management and etor will be required to make changes Budget under control number 1512–0058) in location, construction, or equipment [T.D. ATF–299, 55 FR 24989, June 19, 1990, as to the extent necessary to afford ade- amended by T.D. ATF–409, 64 FR 13683, Mar. quate protection to the revenue. 22, 1999] (Sec. 201, Pub. L. 85–859, 72 Stat. 1378, as amended, 1379, as amended (26 U.S.C. 5352, Subpart E—Construction and 5357)) Equipment (Approved by the Office of Management and Budget under control number 1512–0058) § 24.165 Premises. [T.D. ATF–299, 55 FR 24989, June 19, 1990, as Wine premises will be located, con- amended by T.D. ATF–409, 64 FR 13683, Mar. structed, and equipped, subject to ap- 22, 1999] proval by the appropriate TTB officer, in a manner suitable for the operations § 24.167 Tanks. (a) General. All tanks on wine premises used for wine operations or for other operations as are authorized in this part will be suitable for the intended purpose. Each tank used for

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wine operations will be located, constructed to prevent extraction of the structed, and equipped as to permit contents of the tank. ready examination and a means of ac- (Sec. 201, Pub. L. 85–859, 72 Stat. 1378, as curately determining the contents. amended, 1379, as amended, 1395, as amended Any tank used for wine operations not (26 U.S.C. 5352, 5357, 5552)) enclosed within a building or room will (Approved by the Office of Management and be enclosed within a secure fence un- Budget under control number 1512–0058) less the premises where the tank is lo- [T.D. ATF–299, 55 FR 24989, June 19, 1990, as cated are enclosed by a fence or wall, amended by T.D. ATF–312, 56 FR 31078, July or all tank openings are equipped for 9, 1991; T.D. ATF–409, 64 FR 13683, Mar. 22, locking and are locked when used for 1999] wine operations and there is no proprietor’s representative on the wine prem- § 24.168 Identification of tanks. ises, or the appropriate TTB officer has (a) General. Each tank, barrel, pun- approved some other adequate means cheon, or similar bulk container, used of revenue protection. All open tanks to ferment wine or used to process or will be under a roof or other suitable store wine, spirits, or wine making ma- covering. terials will have the contents marked (b) Other requirements. Each tank and will be marked as required by this used for the taxpayment of wine, stor- section. (b) Tank markings. (1) Each tank will age of spirits, or spirits additions will have a unique serial number; be constructed and equipped as follows: (2) Each tank will be marked to show (1) An accurate means of measuring its current use, either by permanent the contents of each tank will be pro- markings or by removable signs of du- vided by the proprietor. When a means rable material; and of measuring is not a permanent fix- (3) If used to store wine made in ac- ture of the tank, the tank will be cordance with a formula, the formula equipped with a fixed device to allow number will be marked or otherwise in- the approximate contents to be deter- dicated on the tank. mined readily; (c) Puncheon and barrel markings. (2) Safe access to all parts of a tank Puncheons and barrels, or similar bulk will be provided by the proprietor; containers over 100 gallons capacity, (3) Tanks may not be used until they will be marked in the same manner as are accurately calibrated and a state- tanks. A permanent serial number need ment of certification of accurate cali- not be marked on puncheons and bar- bration is on file at the premises; rels, or similar bulk containers of 100 (4) If a tank or its means of meas- gallons capacity or less, used for storage, but the capacity must be perma- uring is changed as to location or posi- nently marked. tion subsequent to original calibration, the tank may not be used until recali- (Sec. 201, Pub. L. 85–859, 72 Stat. 1378, as brated; and amended, 1379, as amended (26 U.S.C. 5352, 5357)) (5) All openings in tanks used for the storage, weighing, or measuring of (Approved by the Office of Management and spirits, or for the addition of spirits to Budget under control number 1512–0503) wine, will be equipped for locking or [T.D. ATF–299, 55 FR 24989, June 19, 1990, as have a similar means of revenue pro- amended by T.D. TTB–91, 76 FR 5478, Feb. 1, tection. Any vents, flame arrestors, 2011] foam devices, or other safety devices § 24.169 Pipelines. affixed to a spirits tank will be con- Pipelines, including flexible hoses, used to convey wine, spirits, or volatile fruit-flavor concentrate will be constructed, connected, arranged, and secured so as to afford adequate protection to the revenue and to permit ready examination. The appropriate TTB officer may approve pipelines

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which cannot be readily examined if no Subpart F—Production of Wine jeopardy to the revenue is created. § 24.175 General. (Sec. 201, Pub. L. 85–859, 72 Stat. 1378, as amended, 1379, as amended, 1395, as amended The kinds of wine which may be pro- (26 U.S.C. 5352, 5357, 5552)) duced on bonded wine premises are as follows: [T.D. ATF–299, 55 FR 24989, June 19, 1990, as (a) Natural wine produced in accord- amended by T.D. ATF–409, 64 FR 13683, Mar. ance with subparts F and G of this 22, 1999] part; § 24.170 Measuring devices and testing (b) Special natural wine produced in instruments. accordance with subpart H of this part; (c) Agricultural wine produced in ac- (a) Measuring devices. The appropriate cordance with subpart I of this part; TTB officer may at any time require and proprietors to provide at their own ex- (d) Other than standard wine pro- pense equipment for ascertaining the duced in accordance with subpart J of capacity and contents of tanks and this part. other storage containers, and scales (Sec. 201, Pub. L. 85–859, 72 Stat. 1380, as and measuring devices for weighing amended, 1383, as amended, 1384, as amended, and measuring wine, spirits, volatile 1385, as amended, 1386, as amended (26 U.S.C. fruit-flavor concentrate, or materials 5361, 5382, 5384, 5385, 5386, 5387)) received and used in the production or treatment of wine. Where winemaking § 24.176 Crushing and fermentation. materials or other materials used in (a) Natural wine production. Water the treatment of wine are used imme- may be used to flush equipment during diately upon receipt on wine premises, the crushing process or to facilitate or received and stored on bonded wine fermentation but the density of the premises in original sealed shipping juice may not be reduced below 22 de- containers with a stated capacity, the grees Brix. However, if the juice is al- quantity shown on the commercial in- ready less than 23 degrees Brix, the use voice or other document covering the of water to flush equipment or facili- shipment may be accepted by the pro- tate fermentation is limited to a juice prietor and entered into records in lieu density reduction of no more than one degree Brix. At the start of fermenta- of measuring the materials upon re- tion no material may be added except ceipt. water, sugar, concentrated fruit juice (b) Testing instruments. The proprietor from the same kind of fruit, malo-lac- shall have ready access to equipment tic bacteria, yeast or yeast cultures for determining the alcohol content grown in juice of the same kind of unless the proprietor only receives and fruit, and yeast foods, sterilizing stores on wine premises bottled or agents, precipitating agents or other packed wine with evidence showing the approved fermentation adjuncts. Water alcohol content has been determined. may be used to rehydrate yeast to a The proprietor who bottles or packs maximum to two gallons of water for wine shall have ready access to equip- each pound of yeast; however, except ment for determining the net contents for an operation involving the prepara- of bottled or packed wine. The appro- tion of a yeast culture starter and priate TTB officer may require other must mixture for later use in initiating testing instruments based upon the fermentation, the maximum volume proprietor’s operations. increase of the juice after the addition of rehydrated yeast is limited to 0.5 (Sec. 201, Pub. L. 85–859, 72 Stat. 1379, as percent. After fermentation natural amended, 1395, as amended (26 U.S.C. 5357, 5552)) wines may be blended with each other only if produced from the same kind of (Approved by the Office of Management and fruit. Budget under control number 1512–0298) (b) Determination of wine produced. [T.D. ATF–299, 55 FR 24989, June 19, 1990, as Upon completion of fermentation or re- amended by T.D. ATF–409, 64 FR 13683, Mar. moval from the fermenter, the volume 22, 1999] of wine will be accurately determined,

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recorded and reported on TTB F 5120.17, tion and is calculated as tartaric acid Report of Bonded Wine Premises Oper- for grapes, malic acid for apples, and ations, as wine produced. Any wine or citric acid for other fruit. Each 20 gal- juice remaining in fermentation tanks lons of ameliorating material added to at the end of the reporting period will 1,000 gallons of juice or wine will re- be recorded and reported on TTB F duce the fixed acid level of the juice or 5120.17. wine by 0.1 gram per liter (the fixed [T.D. ATF–312, 56 FR 31078, July 9, 1990, as acid level of the juice or wine may not amended by ATF–338, 58 FR 19064, Apr. 12, be less than 5.0 gram per liter after the 1993] addition of ameliorating material). (b) Limitations. (1) Amelioration is § 24.177 Chaptalization (Brix adjust- permitted only at the bonded wine ment). premises where the natural wine is pro- In producing natural grape wine from duced. juice having a low sugar content, pure (2) The ameliorating material added dry sugar or concentrated grape juice to juice or wine may not reduce the may be added before or during fer- fixed acid level of the ameliorated juice mentation to develop alcohol. In pro- or wine to less than 5.0 grams per liter. ducing natural fruit wine from juice (3) For all wine, except for wine de- having a low sugar content, sugar, or scribed in paragraph (b)(4) of this sec- concentrated juice of the same kind of tion, the volume of ameliorating mate- fruit may be added before or during fer- rial added to juice or wine may not ex- mentation to develop alcohol. The ceed 35 percent of the total volume of quantity of sugar or concentrated juice ameliorated juice or wine (calculated added may not raise the original den- exclusive of pulp). Where the starting sity of the juice above 25 degrees Brix. fixed acid level is or exceeds 7.69 grams If grape juice or grape wine is amelio- per liter, a maximum of 538.4 gallons of rated after chaptalization, the quan- ameliorating material may be added to tity of pure dry sugar added to juice for each 1,000 gallons of wine or juice. chaptalization will be included as ame- (4) For wine produced from any fruit liorating material. If fruit juice or (excluding grapes) or berry with a nat- fruit wine is ameliorated after ural fixed acid of 20 parts per thousand chaptalization, pure dry sugar added or more (before any correction of such under this section is not considered as fruit or berry), the volume of amelio- ameliorating material. However, if rating material added to juice or wine fruit juice or fruit wine is ameliorated may not exceed 60 percent of the total after chaptalization and liquid sugar or volume of ameliorated juice or wine invert sugar syrup is used to chaptalize (calculated exclusive of pulp). If the the fruit juice, the volume of water starting fixed acid level is or exceeds contained in the liquid sugar or invert 12.5 grams per liter, a maximum of sugar syrup will be included as amelio- 1,500 gallons of ameliorating material rating material. may be added to each 1,000 gallons of (Sec. 201, Pub. L. 85–859, 72 Stat. 1385, as wine or juice. amended (26 U.S.C. 5382, 5384)) (26 U.S.C. 5383, 5384). [T.D. ATF–299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF–312, 56 FR 31078, July [T.D. ATF–299, 55 FR 24989, June 19, 1990, as 9, 1991; T.D. ATF–413, 64 FR 46844, Aug. 27, amended by T.D. ATF–403, 64 FR 50253, Sept. 1999] 16, 1999; T.D. ATF–458, 66 FR 37578, July 19, 2001] § 24.178 Amelioration. (a) General. In producing natural § 24.179 Sweetening. wine from juice having a fixed acid (a) General. In producing natural level exceeding 5.0 grams per liter, the wine, sugar, juice or concentrated fruit winemaker may adjust the fixed acid juice of the same kind of fruit may be level by adding ameliorating material added after fermentation to sweeten (water, sugar, or a combination of wine. When juice or concentrated fruit both) before, during and after fer- juice is added, the solids content of the mentation. The fixed acid level of the finished wine may not exceed 21 per- juice is determined prior to fermenta- cent by weight. When liquid sugar or

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invert sugar syrup is used, the result- § 24.180 Use of concentrated and ing volume may not exceed the volume unconcentrated fruit juice. which would result from the maximum Concentrated fruit juice reduced with use of pure dry sugar only. water to its original density, or to 22 (b) Grape wine. Any natural grape degrees Brix, or to any degree of Brix wine of a winemaker’s own production between its original density and 22 de- may have sugar added after ameliora- grees Brix, and unconcentrated fruit tion and fermentation provided the fin- juice reduced with water to not less ished wine does not exceed 17 percent than 22 degrees Brix, is considered total solids by weight if the alcohol juice for the purpose of standard wine content is more than 14 percent by vol- production. Concentrated fruit juice re- ume or 21 percent total solids by duced with water to any degree of Brix weight if the alcohol content is not greater than 22 degrees Brix may be more than 14 percent by volume. further reduced with water to any de- (c) Fruit wine. Any natural fruit wine gree of Brix between its original den- of a winemaker’s own production may sity and 22 degrees Brix. The propri- have sugar added after amelioration etor, prior to using concentrated fruit and fermentation provided the finished juice in wine production, shall obtain a statement in which the producer cer- wine does not exceed 21 percent total tifies the kind of fruit from which it solids by weight and the alcohol con- was produced and the total solids content is not more than 14 percent by vol- tent of the juice before and after con- ume. centration. Concentrated or (d) Specially sweetened natural wine. unconcentrated fruit juice may be used Specially sweetened natural wine is in juice or wine made from the same produced by adding to natural wine of kind of fruit for the purposes of the winemaker’s own production suffi- chaptalizing or sweetening, as provided cient pure dry sugar, juice or con- in this part. Concentrated fruit juice, centrated fruit juice of the same kind or juice which has been concentrated of fruit, separately or in combination, and reconstituted, may not be used in so that the finished product has a total standard wine production if at any solids content between 17 percent and time it was concentrated to more than 35 percent by weight, and an alcohol 80 degrees Brix. content of not more than 14 percent by (Sec. 201, Pub. L. 85–859, 72 Stat. 1383, as volume. Natural wine containing added amended (26 U.S.C. 5382)) wine spirits may be used in the production of specially sweetened natural (Approved by the Office of Management and Budget under control number 1512–0298) wine; however, wine spirits may not be added to specially sweetened natural [T.D. ATF–299, 55 FR 24989, June 19, 1990, as wine. Specially sweetened natural amended by T.D. ATF–413, 64 FR 46845, Aug. 27, 1999] wines may be blended with each other, or with natural wine or heavy bodied § 24.181 Use of sugar. blending wine (including juice or concentrated fruit juice to which wine Only sugar, as defined in § 24.10, may spirits have been added), in the further be used in the production of standard wine. The quantity of sugar used will production of specially sweetened nat- be determined either by measuring the ural wine only if the wines (or juice) so increase in volume or by considering blended are made from the same kind that each 13.5 pounds of pure dry sugar of fruit. results in a volumetric increase of one (Sec. 201, Pub. L. 85–859, 72 Stat. 1383, as gallon. amended, 1384, as amended, 1385, as amended, (Sec. 201, Pub. L. 85–859, 72 Stat. 1383, as 1386, as amended (26 U.S.C. 5382, 5383, 5384, amended, 1384, as amended, 1385, as amended, 5385)) 1387, as amended (26 U.S.C. 5382, 5383, 5384, [T.D. ATF–299, 55 FR 24989, June 19, 1990, as 5392)) amended by T.D. ATF–312, 56 FR 31078, July [T.D. ATF–299, 55 FR 24989, June 19, 1990, as 9, 1991] amended by T.D. ATF–312, 56 FR 31078, July 9, 1991]

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§ 24.182 Use of acid to correct natural liter of fixed acid (calculated as malic deficiencies. acid for apples and citric acid for other (a) General. Acids of the kinds occur- fruit (including berries). ring in grapes or other fruit (including (d) Other use of acid. A winemaker de- berries) may be added within the limi- siring to use an acid other than the tations of § 24.246 to juice or wine in acids allowed in paragraphs (a) and (b) order to correct natural deficiencies; of this section to correct natural defi- however, no acid may be added to juice ciencies shall follow the procedure pre- or wine which is ameliorated to correct scribed in § 24.250. A winemaker desir- natural deficiencies except that in the ing to use acid to stabilize standard production of grape wine, tartaric acid wine shall follow the requirements pre- may be used to reduce the pH of the scribed by § 24.244. juice or wine. If tartaric acid is used to (Sec. 201, Pub. L. 85–859, 72 Stat. 1383, as correct the pH of grape juice or wine, amended (26 U.S.C. 5382)) the fixed acid level of the juice shall be measured prior to the addition of any [T.D. ATF–299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF–312, 56 FR 31078, July tartaric acid to determine the max- 9, 1991; T.D. ATF–350, 58 FR 52230, Oct. 7, 1993] imum quantity of ameliorating material allowed. In addition, when using § 24.183 Use of distillates containing tartaric acid to reduce the pH of ame- aldehydes. liorated grape juice or wine, the pH Distillates containing aldehydes may cannot be reduced below 3.0. be received on wine premises for use in (b) Grape wine. Tartaric acid or malic the fermentation of wine and then re- acid, or a combination of tartaric acid turned to the distilled spirits plant and malic acid, may be added prior to from which distillates were withdrawn or during fermentation, to grapes or juice from grapes. In addition, after as distilling material. Distillates pro- fermentation is completed, citric acid, duced from one kind of fruit may not fumaric acid, malic acid, lactic acid or be used in the fermentation of wine tartaric acid, or a combination of two made from a different kind of fruit. or more of these acids, may be added to Distillates containing aldehydes which correct natural deficiencies. However, are received at bonded wine premises the use of these acids, either prior to, and not immediately used will be during or after fermentation, may not placed in a locked room or tank on increase the fixed acid level of the fin- bonded wine premises. Distillates con- ished wine (calculated as tartaric acid) taining aldehydes may not be mingled above 9.0 grams per liter. In cases with wine spirits. If the distillates con- where the wine contains 8.0 or more tain less than 0.1 percent of aldehydes, grams of total solids per 100 milliliters the proprietor shall comply with any of wine, acids may be added to the ex- additional condition relating to the re- tent that the finished wine does not ceipt, storage, and use which the ap- contain more than 11.0 grams per liter propriate TTB officer may require to of fixed acid (calculated as tartaric assure that the distillates are properly acid). used and accounted for. (c) Fruit wine. Only citric acid may be (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as added to citrus fruit, juice or wine, amended, 1382, as amended (26 U.S.C. 5367, only malic acid may be added to ap- 5373)) ples, apple juice or wine, and only cit- [T.D. ATF–299, 55 FR 24989, June 19, 1990, as ric acid or malic acid may be added to amended by T.D. ATF–409, 64 FR 13683, Mar. other fruit (including berries) or to 22, 1999] juice or wine derived from other fruit (including berries) to correct natural § 24.184 Use of volatile fruit-flavor con- deficiencies to 9.0 grams per liter of centrate. finished wine; however, if the wine con- (a) General. In the cellar treatment of tains 8.0 or more grams of total solids natural wine of the winemaker’s own per 100 milliliters of wine, acids may be production there may be added volatile added to correct natural deficiencies to fruit-flavor concentrate produced from the extent that the finished wine does the same kind of fruit or from the same not contain more than 11.0 grams per variety of berry or grape so long as the

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proportion of volatile fruit-flavor con- have an alcohol content in excess of 14 centrate added to the wine does not ex- percent by volume. However, wine con- ceed the equivalent proportion of vola- taining more than 14 percent of alcohol tile fruit-flavor concentrate of the by volume may be used in preparing a original juice or must from which the dosage for finishing sparkling wine or wine was produced. artificially carbonated wine. (b) Use of juice or must from which (Sec. 201, Pub. L. 85–859, 72 Stat. 1383, as volatile fruit-flavor has been removed. amended (26 U.S.C. 5382)). Juice, concentrated fruit juice, or must processed at a concentrate plant is con- [T.D. ATF–299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF–312, 56 FR 31078, July sidered to be pure juice, concentrated 9, 1991] fruit juice, or must even though volatile fruit-flavor has been removed if, at § 24.191 Segregation of operations. a concentrate plant or at bonded wine Where more than one process of pro- premises, there is added to the juice, ducing sparkling wine or artificially concentrated fruit juice, or must (or in carbonated wine is used, the appro- the case of bonded wine premises, to priate TTB officer may require the por- wine of the winemaker’s own production of the premises used for the pro- tion made therefrom), either the iden- duction and storage of wine made by tical volatile fruit-flavor removed or each process (bottle fermented, bulk an equivalent quantity of volatile fermented or artificially carbonated) fruit-flavor concentrate derived from to be segregated as provided by § 24.27. the same kind of fruit or from the same variety of berry or grape. (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as (c) Certificate required. The proprietor, amended (26 U.S.C. 5365)) prior to the use of volatile fruit flavor [T.D. ATF–299, 55 FR 24989, June 19, 1990, as concentrate in wine production, shall amended by T.D. ATF–409, 64 FR 13683, Mar. obtain a certificate from the producer 22, 1999] stating the kind of fruit or the variety of berry or grape from which it was § 24.192 Process and materials. produced and the total solids content In preparing still wine for the proof the juice before and after concentra- duction of sparkling wine or artifi- tion. cially carbonated wine, sugar and acid of the kinds and within the limitations (Sec. 201. Pub. L. 85–859, 72 Stat. 1383, as amended (26 U.S.C. 5382)) prescribed in § 24.182 may be added with yeast or yeast culture to acclimate the (Approved by the Office of Management and yeast and to facilitate the process of Budget under control number 1512–0298) secondary fermentation or to correct the wine. Fruit syrup, sugar, wine, Subpart G—Production of wine spirits, and acid may be used in Effervescent Wine preparing a finishing dosage for sparkling wine or artificially carbonated § 24.190 General. wine provided the dosage does not ex- Effervescent wine may be made on ceed 10 percent by volume of the fin- bonded wine premises. Where the effer- ished product. Where the proprietor de- vescence results from fermentation of sires to use more than 10 percent by the wine within a closed container, the volume finishing dosage, the proprietor wine is classed and taxed as sparkling shall file for a formula approval under wine. The use of carbon dioxide, nitro- § 24.80. The fruit syrup, wine spirits and gen gas, or a combination of both, is wine used will come from the same permitted to maintain counterpressure kind of fruit as the wine from which during the transfer and bottling of the sparkling wine or artificially car- sparkling wine. Wine carbonated by in- bonated wine is made. In the produc- jection of carbon dioxide is classed and tion of sparkling wine or artificially taxed as artificially carbonated wine. carbonated wine, taxpaid wine spirits Sparkling wine, artificially carbonated or wine spirits withdrawn tax-free may wine, and any wine used as a base in be used. Tax-free wine spirits may only the production of sparkling wine or ar- be used in the production of sparkling tificially carbonated wine, may not wine or artificially carbonated wine

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which is a natural wine. In the refer- § 24.196 Formula required. mentation and finishing of a sparkling Before producing any special natural wine, the acids and materials specifi- wine, the proprietor shall receive ap- cally authorized in § 24.246 may be used. proval of the formula by which it is to (Sec. 201, Pub. L. 85–859, 72 Stat. 1383, as be made as provided by § 24.80. Any amended (26 U.S.C. 5382)) change in a formula will be approved in advance as provided by § 24.81. (Approved by the Office of Management and Budget under control number 1512–0059) (Sec. 201, Pub. L. 85–859, 72 Stat. 1386, as amended (26 U.S.C. 5386)) § 24.193 Conversion into still wine. (Approved by the Office of Management and Sparkling wine or artificially carbon- Budget under control number 1512–0059) ated wine may be dumped for use as still wine. The dumping process will § 24.197 Production by fermentation. allow the loss of carbon dioxide re- In producing special natural wine by maining in the wine. fermentation, flavoring materials may be added before or during fermentation. (Sec. 201, Pub. L. 85–859, 72 Stat. 1331, as amended (26 U.S.C. 5041, 5361)) Special natural wine produced by fermentation may be ameliorated in the same manner and to the same extent as Subpart H—Production of Special natural wine made from the same fruit. Natural Wine Spirits may not be added to special natural wine with the exception of § 24.195 General. spirits contained in the natural wine Special natural wine is a flavored used as a base or in authorized essences wine made on bonded wine premises made on bonded wine premises as pro- from a base of natural wine. The fla- vided in § 24.86 or in approved essences voring added may include natural made elsewhere. Upon removal of the herbs, spices, fruit juices, natural aro- wine from fermenters, the volume of matics, natural essences or other nat- liquid will be determined accurately ural flavoring, in quantities or propor- and recorded as wine produced. The tions such that the resulting product quantity of liquid in fermenters at the derives character and flavor distinctive close of each reporting period will be from the base wine and distinguishable reported on the TTB F 5120.17, Report from other natural wine. Fruit juices of Bonded Wine Premises Operations. may not be used to give to one natural (Sec. 201, Pub. L. 85–859, 72 Stat. 1386, as wine the flavor of another but may be amended (26 U.S.C. 5386)) used with herbs or spices to produce a wine having a distinctive flavor. Car- (Approved by the Office of Management and amel and sugar may be used in a spe- Budget under control numbers 1512–0216 and 1512–0298) cial natural wine. However, the minimum 60 degrees Brix limitations pre- [T.D. ATF–299, 55 FR 24989, June 19, 1990, as scribed in the definition of ‘‘Liquid amended by ATF–338, 58 FR 19064, Apr. 12, pure sugar’’ and ‘‘Invert sugar syrup’’ 1993] in § 24.10 do not apply to materials used § 24.198 Blending. in the manufacture of vermouth. Fin- ished vermouth will contain a min- Special natural wine may be blended imum of 80 percent by volume natural with other special natural wine of the wine. Heavy bodied blending wine and same class and kind, and with heavy juice or concentrated fruit juice to bodied blending wine, or natural wine which wine spirits have been added of the same kind of fruit, in the further may be used in the production of spe- production of special natural wine. The cial natural wine pursuant to formula blending of special natural wines pro- approval. duced under different formulas requires the filing and approval of a formula au- (Sec. 201, Pub. L. 85–859, 72 Stat. 1386, as thorizing a blending; however, where amended (26 U.S.C. 5386)) two or more formulas have been ap- (Approved by the Office of Management and proved for the production of special Budget under control number 1512–0059) natural wine of the same type, e.g.,

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producing a sweet vermouth by blend- formula will be approved in advance as ing sweet vermouths produced under provided by § 24.81. two or more approved formulas, the (Sec. 201, Pub. L. 85–859, 72 Stat. 1386, as submission and approval of an addi- amended (26 U.S.C. 5387)) tional formula is not required. (Approved by the Office of Management and (Sec. 201, Pub. L. 85–859, 72 Stat. 1386, as Budget under control number 1512–0059) amended (26 U.S.C. 5386)) [T.D. ATF–299, 55 FR 24989, June 19, 1990, as (Approved by the Office of Management and amended by T.D. ATF–409, 64 FR 13685, Mar. Budget under control number 1512–0059) 22, 1999]

Subpart I—Production of § 24.202 Dried fruit. Agricultural Wine In the production of wine from dried fruit, a quantity of water sufficient to § 24.200 General. restore the moisture content to that of Agricultural wine may be produced the fresh fruit may be added. If it is de- on bonded wine premises from suitable sired not to restore the moisture con- agricultural products other than the tent of the dried fruit to that of the juice of fruit. Water or sugar, or both, fresh fruit, or if the moisture content may be used within the limitations of is not known, sufficient water may be added to reduce the density to 22 de- this subpart in the production of agri- grees Brix. If the dried fruit liquid cultural wine. Agricultural wine may after restoration is found to be defi- not be flavored or colored; however, cient in sugar, sufficient pure dry hops may be used in the production of sugar may be added to increase the honey wine. Spirits may not be used in total solids content to 25 degrees Brix. the production of the wine and a wine After addition of water to the dried made from one agricultural product fruit, the resulting liquid may be ame- may not be blended with a wine made liorated with either water or sugar, or from another agricultural product. Ag- both, in such total volume as may be ricultural wine made with sugar in ex- necessary to reduce the natural fixed cess of the limitations of this subpart acid level of the mixture to a minimum is other than standard wine and will be of 5.0 grams per liter; however, in no segregated and clearly identified. Since event may the volume of the amelio- grain, cereal, malt, or molasses are not rating material exceed 35 percent of suitable materials for the production of the total volume of the ameliorated agricultural wine, these materials may juice or wine (calculated exclusive of not be received on bonded wine prem- pulp). Pure dry sugar may be used for ises. Beverage alcohol products made sweetening. After complete fermenta- with these materials are not classed as tion or complete fermentation and wine and may not be produced or sweetening, the finished product may stored on bonded wine premises. not have a total solids content that exceeds 35 degrees Brix. (Sec. 201, Pub. L. 85–859, 72 Stat. 1386, as amended (26 U.S.C. 5387)) (26 U.S.C. 5387) [T.D. ATF–299, 55 FR 24989, June 19, 1990, as § 24.201 Formula required. amended by T.D. TTB–23, 70 FR 2801, Jan. 18, Before producing any agricultural 2005] wine, the proprietor shall obtain an approval of the formula and process by § 24.203 Honey wine. which it is to be made pursuant to the (a) Subject to paragraph (b) of this provisions of § 24.80. Any change in a section, a winemaker, in the production of wine from honey, may add the following: (1) Water to facilitate fermentation, provided the density of the honey and water mixture is not reduced below 13 degrees Brix;

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(2) Hops in quantities not to exceed (g) Wines other than those in classes one pound for each 1,000 pounds of listed in paragraphs (a), (b), (c), (d), (e), honey; and and (f), of this section produced as pro- (3) Pure, dry sugar or honey for vided in § 24.218. sweetening. Sugar may be added only after fermentation is completed. (Sec. 201, Pub. L. 85–859, 72 Stat. 1387, as amended (26 U.S.C. 5388)) (b) After complete fermentation or complete fermentation and sweetening, § 24.211 Formula required. the wine may not have an alcohol content of more than 14 percent by volume The proprietor who desires to or a total solids content that exceeds produce wine other than standard wine 35 degrees Brix. shall first obtain approval of the formula by which it is to be made, except (26 U.S.C. 5387) that no formula is required for dis- [T.D. TTB–23, 70 FR 2801, Jan. 18, 2005] tilling material or vinegar stock. The formula is filed as provided by § 24.80. § 24.204 Other agricultural products. Any change in the formula will be ap- In the production of wine from agri- proved in advance as provided by cultural products, other than dried § 24.81. fruit and honey, water and sugar may (Sec. 201, Pub. L. 85–859, 72 Stat. 1387, as be added to the extent necessary to fa- amended (26 U.S.C. 5388)) cilitate fermentation; Provided, That the total weight of pure dry sugar used (Approved by the Office of Management and for fermentation is less than the Budget under control number 1512–0059) weight of the primary winemaking ma- [T.D. ATF–299, 55 FR 24989, June 19, 1990, as terial and the density of the mixture amended by T.D. ATF–409, 64 FR 13685, Mar. prior to fermentation is not less than 22, 1999] 22 degrees Brix, if water, or liquid sugar, or invert sugar syrup is used. § 24.212 High fermentation wine. Additional pure dry sugar may be used High fermentation wine is wine made for sweetening, provided the alcohol with the addition of sugar within the content of the finished wine after com- limitations prescribed for natural wine plete fermentation or after complete except that the alcohol content after fermentation and sweetening, is not complete fermentation or complete fer- more than 14 percent by volume and mentation and sweetening is more than the total solids content is not more 14 percent and wine spirits have not than 35 degrees Brix. been added. Although high fermentation wine is not a standard wine, it is (Sec. 201, Pub. L. 85–859, 72 Stat. 1386, as amended, 1387, as amended (26 U.S.C. 5387)) produced, stored, and handled on bonded wine premises subject to the same Subpart J—Production of Other marking or labeling requirements. Than Standard Wine (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as amended, 1387, as amended (26 U.S.C. 5365, § 24.210 Classes of wine other than 5388)) standard wine. § 24.213 Heavy bodied blending wine. The following classes of wine are not standard wine: Heavy bodied blending wine is wine (a) High fermentation wine, produced made for blending purposes from grapes as provided in § 24.212; or other fruit without added sugar, and (b) Heavy bodied blending wine, pro- with or without added wine spirits, and duced as provided in § 24.213; having a total solids content in excess (c) Spanish type blending sherry, proof 21 percent. Heavy bodied blending duced as provided in § 24.214; wine may be used in blending with (d) Wine products not for beverage other wine made from the same kind of use, produced as provided in § 24.215; fruit or for removal upon payment of (e) Distilling material, produced as tax, not for sale or consumption as bev- provided in § 24.216; erage wine. Upon removal, the shipping (f) Vinegar stock, produced as pro- containers and shipping records will be vided in § 24.217; and marked ‘‘Heavy Bodied Blending

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Wine—Not for Sale or Consumption as ping records for transfers in bond of Beverage Wine.’’ nonbeverage wine or wine products will be marked ‘‘Not for Sale or Consump- (Sec. 201, Pub. L. 85–859, 72 Stat. 1380, as amended, 1387, as amended (26 U.S.C. 5361, tion as Beverage Wine.’’ Upon removal 5388)) from bonded wine premises free of tax, containers of nonbeverage wine or wine (Approved by the Office of Management and products will be marked to clearly in- Budget under control numbers 1512–0298 and 1512– 0503) dicate such products are not for sale or consumption as beverage wine, e.g., § 24.214 Spanish type blending sherry. salted wine, vinegar, nonbeverage cooking wine. Blending wine made with partially (b) Salted wine. Salted wine is a wine caramelized grape concentrate may be or wine product not for beverage use produced, stored, and handled on, or produced in accordance with the provi- transferred in bond between, bonded sions of this section and having not wine premises, or removed upon pay- less than 1.5 grams of salt per 100 milli- ment of tax, not for sale or consump- liter of wine. (12.5 pounds of salt/100 tion as beverage wine. Wine of a high gallons of wine.) solids content and dark in color, pro- (c) Vinegar. Vinegar is a wine or wine duced under this section, is designated product not for beverage use produced ‘‘Spanish Type Blending Sherry.’’ Upon in accordance with the provisions of removal, the shipping containers will this section and having not less than be marked with the applicable designa- 4.0 grams (4.0 percent) of volatile acid- tion and the legend ‘‘Not for Sale or ity (calculated as acetic acid and ex- Consumption as Beverage Wine.’’ Span- clusive of sulfur dioxide) per 100 milli- ish type blending sherry is not stand- liters of wine. ard wine and may not be blended with standard wine except pursuant to an (Sec. 201, Pub. L. 85–859 and Sec. 455, Pub. L. approved formula or in the further pro- 98–369, 72 Stat. 1380, as amended (26 U.S.C. duction of this type of wine. 5361, 5362)) (Approved by the Office of Management and (Sec. 201, Pub. L. 85–859, 72 Stat. 1380, as Budget under control number 1512–0503) amended, 1381, as amended, 1387, as amended (26 U.S.C. 5361, 5388)) [T.D. ATF–299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF–312, 56 FR 31079, July (Approved by the Office of Management and 9, 1991] Budget under control numbers 1512–0059 and 1512–0503) § 24.216 Distilling material. § 24.215 Wine or wine products not for Wine may be produced on bonded beverage use. wine premises from grapes and other (a) General. Wine, or wine products fruit, natural fruit products, or fruit made from wine, may be treated with residues, for use as distilling material, methods or materials which render the using any quantity of water desired to wine or wine products unfit for bev- facilitate fermentation or distillation. erage use. No wine or wine products so No sugar may be added in the produc- treated may contain more than 21 per- tion of distilling material. Distillates cent of alcohol by volume at the time containing aldehydes may be used in of withdrawal free of tax from bonded the fermentation of wine to be used as wine premises; nor may any wine or distilling material. Lees, filter wash, wine product so withdrawn be used in and other wine residues may also be ac- the compounding of distilled spirits or cumulated on bonded wine premises for wine for beverage use or in the manu- use as distilling material. facture of any product intended to be (Sec. 201, Pub. L. 85–859, 72 Stat. 1380, as used in the compounding. Wine or wine amended, 1381, as amended, 1382, as amended products produced under this section (26 U.S.C. 5361, 5373)) will be clearly identified and segregated from beverage wine products § 24.217 Vinegar stock. while stored on bonded wine premises Vinegar stock may be produced on and may be transferred in bond be- bonded wine premises with the addition tween bonded wine premises. The ship- of any quantity of water desired to

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meet commercial standards for the the wine and the spirits are produced production of vinegar. Vinegar stock from the same kind of fruit. In the case may be made only by the addition of of natural still wine, wine spirits may water to wine or by the direct fer- be added in any State only to wine pro- mentation of the juice of grapes or duced by fermentation on bonded wine other fruit with added water. premises located within the same State. If wine has been ameliorated, (Sec. 201, Pub. L. 85–859, 72 Stat. 1380, as amended, 1381, as amended (26 U.S.C. 5361)) wine spirits may be added (whether or not wine spirits were previously added) § 24.218 Other wine. only if the wine contains not more (a) General. Other than standard wine than 14 percent of alcohol by volume not included in other sections in this derived from fermentation. Spirits subpart are considered other wine. other than wine spirits may be re- Those wines considered to be other ceived, stored and used on bonded wine wine include: premises only for the production of (1) Wine made with sugar, water, or nonbeverage wine and nonbeverage sugar and water beyond the limitations wine products. Wooden storage tanks prescribed for standard wine. used for the addition of spirits may be (2) Wine made by blending wines pro- used for the baking of wine. duced from different kinds of fruit. (Sec. 201, Pub. L. 85–859 and Sec. 455, Pub. L. (3) Wine made with sugar other than 98–369, 72 Stat. 1381–1384, as amended (26 pure dry sugar, liquid pure sugar, and U.S.C. 5214, 5366, 5373, 5382, 5383)) invert sugar syrup. [T.D. ATF–299, 55 FR 24989, June 19, 1990, as (4) Wine made with materials not au- amended by T.D. ATF–312, 56 FR 31079, July thorized for use in standard wine. 9, 1991; T.D. TTB–91, 76 FR 5478, Feb. 1, 2011] (b) Production of other wine. Other wine may be made on bonded wine § 24.226 Receipt or transfer of spirits. premises but will remain segregated When spirits are received at the from standard wine. Other wine will bonded wine premises, the proprietor have a basic character derived from the shall determine that the spirits are the primary winemaking material. If sugar same as described on the transfer is used to make other wine, the aggre- record and follow the procedures pre- gate weight of the sugar used before scribed by § 19.407 of this chapter. A and during fermentation will be less copy of the transfer record, annotated than the weight of the primary wine to show any difference between the de- producing material. Wine spirits may scription of spirits and quantity re- be added to other wine. Upon removal, ceived, will be maintained by the pro- other wine will be marked or labeled prietor as a record of receipt. If spirits with a designation which will ade- are to be transferred to a distilled spir- quately disclose the nature and com- its plant or to bonded wine premises, position of the wine. the proprietor shall use the transfer (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as record and procedures prescribed by amended, 1387, as amended (26 U.S.C. 5365, § 19.405 of this chapter. 5388)) (Sec. 201, Pub. L. 85–859, 72 Stat. 1382, as (Approved by the Office of Management and amended (26 U.S.C. 5373)) Budget under control number 1512–0503) (Approved by the Office of Management and Budget under control number 1512–0298) Subpart K—Spirits [T.D. ATF–299, 55 FR 24989, June 19, 1990, as amended by T.D. TTB–92, 76 FR 9171, Feb. 16, § 24.225 General. 2011] The proprietor of a bonded wine premises may withdraw and receive § 24.227 Transfer of spirits by pipeline spirits without payment of tax from for immediate use. the bonded premises of a distilled spir- Spirits transferred by pipeline for its plant for uses as are authorized in immediate use are gauged either by this part. Wine spirits produced in the weight or by volume on the bonded United States may be added to natural premises of the distilled spirits plant. wine on bonded wine premises if both Where the spirits are gauged on the

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bonded premises of the distilled spirits volume at the time of receipt by the plant, the pipelines will be directly proprietor. If the tank car or tank connected with the spirits addition truck has been accurately calibrated tanks. The valves in the pipeline will and the calibration chart is available be closed and locked with a lock at all at the bonded wine premises, the spir- times except when necessary to be its may be gauged by volume in the opened for the transfer of spirits. tank car or tank truck. In any case Where the proprietor has placed wine where a volume gauge is made, the ac- in a spirits addition tank and has de- tual measurements of the spirits in the termined the quantity of spirits to be gauging tank, tank car, or tank truck, added, the spirits may be transferred. and the temperature of the spirits will be recorded on the copy of the transfer (Sec. 201, Pub. L. 85–859, 72 Stat. 1382, as amended (26 U.S.C. 5373)) record accompanying the shipment. [T.D. ATF–299, 55 FR 24989, June 19, 1990, as (Sec. 201, Pub. L. 85–859, 72 Stat. 1360, as amended by T.D. ATF–312, 56 FR 31079, July amended, 1362, as amended, 1381, as amended 9, 1991] (26 U.S.C. 5206, 5214, 5366)) (Approved by the Office of Management and § 24.228 Transfer of spirits by pipeline Budget under control number 1512–0298) to a spirits storage tank. [T.D. ATF–299, 55 FR 24989, June 19, 1990, as Where it is desired to transfer spirits amended by T.D. ATF–409, 64 FR 13684, Mar. by pipeline to bonded wine premises 22, 1999] and store the spirits prior to use, there will be provided a suitable tank for § 24.231 Receipt of spirits in sealed storing the spirits. The spirits to be bulk containers. transferred, if not gauged on the bond- The proprietor shall examine sealed ed premises of the distilled spirits bulk containers (packages) of spirits plant, will be gauged by weight or vol- received at the bonded wine premises ume on bonded wine premises. to verify that the containers are the (Sec. 201, Pub. L. 85–859, 72 Stat. 1382, as same as those described on the transfer amended (26 U.S.C. 5373)) record accompanying the shipment. Any container which appears to have [T.D. ATF–299, 55 FR 24989, June 19, 1990, as been tampered with or from which spir- amended by T.D. ATF–312, 56 FR 31079, July 9, 1991] its appear to have been removed or lost will be gauged by the proprietor and § 24.229 Tank car and tank truck re- the proprietor shall prepare and submit quirements. to the appropriate TTB officer a state- Railroad tank cars and tank trucks ment setting forth fully the cir- used to transport spirits for use in wine cumstances and apparent cause of any production will be constructed, loss. marked, filled, labeled, and inspected (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as in the manner required by regulations amended, 1382, as amended (26 U.S.C. 5366, in 27 CFR part 19. 5367, 5368, 5373)) (Sec. 201, Pub. L. 85–859, 72 Stat. 1360, as (Approved by the Office of Management and amended, 1362, as amended (26 U.S.C. 5206, Budget under control numbers 1512–0292 and 5214)) 1512–0298) [T.D. ATF–299, 55 FR 24989, June 19, 1990, as § 24.230 Examination of tank car or amended by T.D. ATF–409, 64 FR 13683, Mar. tank truck. 22, 1999] Upon arrival of a tank car or tank truck at the bonded wine premises, the § 24.232 Gauge of spirits. proprietor shall carefully examine the (a) If the spirits to be used are in a car or truck to see whether the seals spirits storage tank on bonded wine are intact and whether there is any premises, or are received immediately evidence of tampering or loss by leak- prior to use from a distilled spirits ing or otherwise. Any evidence of loss plant not adjacent or contiguous to will be reported to the appropriate TTB bonded wine premises, the proprietor officer. The contents of the tank car or shall determine the proof of the spirits tank truck will be gauged by weight or and the quantity used by volume gauge

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or by weight. Upon completion of the bulk wine record. The alcohol content transfer of spirit from the spirits stor- of wine after the addition of spirits age tank to the spirits addition tank, may not exceed 24 percent by volume. the proprietor shall lock the spirits (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as storage tank. amended, 1382, as amended, 1383, as amended (b) If the spirits are received from the (26 U.S.C. 5367, 5373, 5382)) adjacent or contiguous bonded premises of a distilled spirits plant and are (Approved by the Office of Management and Budget under control number 1512–0298) transferred directly into a spirits addition tank, the gauge of the spirits § 24.234 Other use of spirits. made on the distilled spirits plant The proprietor producing sparkling premises will be used. The proprietor wine, artificially carbonated wine, for- at the distilled spirits plant premises mula wine, or essences for which spir- shall deliver a transfer record to the its are required may use tax-free wine proprietor of bonded wine premises who spirits or brandy. For nonbeverage shall acknowledge receipt of the spirits wine, tax-free spirits other than wine on the transfer record. (c) If the spirits are received in pack- spirits or brandy may also be used. The ages and the quantity of spirits needed spirits received by the proprietor will for the addition is not equal to the con- be locked in a secure room or locker on tents of full packages, a portion of one bonded wine premises. The spirits will package may be used and the remnant remain in the original container in the package returned to the spirits storage storeroom until withdrawn for use. room. The proprietor shall gauge the (Sec. 201, Pub. L. 85–859, 72 Stat. 1382, as remnant package and attach to it a amended, 1383, as amended (26 U.S.C. 5373, label showing the date of gauge, the 5382)) weight of the remnant package, and the proof. The remnant package will be § 24.235 Taxpayment or destruction of spirits. used at the first opportunity. (a) Taxpayment of spirits. The propri- (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as etor who wants to taxpay spirits shall amended, 1382, as amended (26 U.S.C. 5367, 5368, 5373)) follow the prepayment of tax procedures of § 19.233 of this chapter. (Approved by the Office of Management and (b) Destruction of spirits. The propri- Budget under control number 1512–0298) etor who wants to destroy spirits shall § 24.233 Addition of spirits to wine. file an application with the appropriate TTB officer stating the quantity of (a) Prior to the addition of spirits. Wine spirits, the proposed date and method will be placed in tanks approved for the of destruction, and the reason for de- addition of spirits. The proprietor shall struction. Spirits may not be destroyed accurately measure the wine, deter- prior to approval by the appropriate mine its alcohol content, determine TTB officer. the proof of the spirits to be added, cal- culate the quantity of spirits required, (Sec. 201, Pub. L. 85–859, 72 Stat. 1382, as and enter the details in the record of amended (26 U.S.C. 5373)) spirits added to wine. (Approved by the Office of Management and (b) After the addition of spirits. The Budget under control number 1512–0292) proprietor shall thoroughly agitate the [T.D. ATF–299, 55 FR 24989, June 19, 1990, as contents of the tank to assure a com- amended by T.D. ATF–409, 64 FR 13684, Mar. plete mixture of the wine and spirits. 22, 1999; T.D. TTB–92, 76 FR 9171, Feb. 16, The proprietor shall then measure the 2011] volume of wine in the tank, take a representative sample of the wine, and § 24.236 Losses of spirits. test for alcohol content. The result of Losses by theft or any other cause of the measurement and test and the spirits while on bonded wine premises quantity of spirits added will be en- or in transit are to be determined and tered in the record of spirits added to reported at the time the losses are dis- wine. The volume of wine used and the covered. A physical inventory of the volume of wine resulting from the addi- spirits storage tanks will be taken at tion of spirits will be entered in the the close of any month during which

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spirits were used in wine production, or ishing of wine are listed in §§ 24.246 and upon completion of spirits use for the 24.248 of this subpart. month or at any other time required by (Sec. 201, Pub. L. 85–859, 72 Stat. 1378, as the appropriate TTB officer. Any loss amended, 1379, as amended, 1383, as amended, which has not previously been reported 1395, as amended (26 U.S.C. 5352, 5357, 5382, will be determined by the inventory. 5552)) [T.D. ATF–299, 55 FR 24989, June 19, 1990, as (Sec. 201, Pub. L. 85–859, 72 Stat. 1323, as amended by T.D. ATF–312, 56 FR 31079, July amended (26 U.S.C. 5008, 5373)) 9, 1991] (Approved by the Office of Management and Budget under control number 1512–0292) § 24.241 Decolorizing juice or wine. [T.D. ATF–299, 55 FR 24989, June 19, 1990, as (a) Conditions and limitations. If the amended by T.D. ATF–409, 64 FR 13683, Mar. proprietor wishes to use activated car- 22, 1999] bon or other decolorizing material to remove color from juice or wine, the § 24.237 Spirits added to juice or con- following conditions and limitations centrated fruit juice. will be met: (1) The wine will retain a vinous Juice or concentrated fruit juice to character after being treated with acti- which spirits have been added may not vated carbon or other decolorizing ma- have an alcohol content exceeding 24 terial; percent by volume. Although not con- (2) The quantity of activated carbon sidered to be wine, juice or con- used to treat the wine, including the centrated fruit juice to which spirits juice from which the wine was pro- have been added will be included in the duced, may not exceed twenty-five appropriate tax class of any wine in- pounds per 1,000 gallons (3.0 grams per ventory and will be properly identified. liter) (see paragraph (b) of this sec- Juice or concentrated juice to which tion); and wine spirits are added will be reported (3) The wine treated with decol- on the TTB F 5120.17, Report of Bonded orizing material will have a color of Wine Premises Operations, as wine, but not less than 0.6 Lovibond in a one-half a separate record will be maintained. inch cell or not more than 95 percent transmittance per AOAC Method (Sec. 201, Pub. L. 85–859, 72 Stat. 1383, as 11.003–11.004 (see paragraph (c) of this amended (26 U.S.C. 5382)) section). However, the proprietor may (Approved by the Office of Management and produce a wine having a color of less Budget under control numbers 1512–0216 and than 0.6 Lovibond or more than 95 per- 1512–0298) cent transmittance per AOAC Method [T.D. ATF–299, 55 FR 24989, June 19, 1990, as 11.003–11.004 by using normal methods amended by T.D. ATF–338, 58 FR 19064, Apr. and without the use of decolorizing ma- 12, 1993] terial. (b) Transfer in bond. When a con- Subpart L—Storage, Treatment signor proprietor transfers wine treated with activated carbon or other de- and Finishing of Wine colorizing material to a consignee proprietor, the consignor proprietor shall § 24.240 General. record on the shipping record: Wine will be stored on bonded wine (1) The amount of wine which has premises in buildings or tanks con- been treated under the provisions of structed and secured in accordance this section; and with the provisions of §§ 24.166 and (2) The quantity of decolorizing ma- 24.167. Wine will be stored in tanks, terial used in treating the wine, includ- casks, barrels, cased or uncased bot- ing the juice from which the wine was tles, or in any other suitable container, produced, before its transfer. The con- which will not contaminate the wine. signee proprietor may further treat the Specifically authorized materials and wine with decolorizing material as long processes for the treatment and fin- as the consignee proprietor has a copy of the shipping record and complies with the requirements of this section.

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(c) Incorporation by reference. The tive of the lot of juice or wine for ex- ‘‘Official Methods of Analysis of the amination by the TTB laboratory. Association of Official Analytical (c) Samples and chemical analysis—(1) Chemists’’ (AOAC Method 11.003–11.004; Samples. If the appropriate TTB officer 13th Edition 1980) is incorporated by requires samples under paragraph (b) of reference in this part. This incorpora- this section, the proprietor shall pre- tion by reference was approved by the pare samples representative of the lot Director of the Federal Register, and is of juice or wine for examination. The available for inspection or at the Na- samples will consist of: tional Archives and Records Adminis- tration (NARA). For information on (i) The juice or wine before treat- the availability of this material at ment with decolorizing material, NARA, call 202–741–6030, or go to: http:// (ii) The juice or wine after treatment www.archives.gov/federallregister/ with decolorizing material, and codeloflfederallregulations/ (iii) The decolorizing material used. ibrllocations.html. The publication is (2) Chemical analysis. If the TTB available from the Association of Offi- chemical analyses of the samples shows cial Analytical Chemists, 11 North 19th that the proposed treatment would re- Street, Suite 210, Arlington, Virginia move only color and will not remove 22209. the vinous characteristics of the wine, (Sec. 201, Pub. L. 85–859, 72 Stat. 1383, as the appropriate TTB officer will return amended (26 U.S.C. 5382)) an approved copy of the proprietor’s (Approved by the Office of Management and written notice. If the TTB chemical Budget under control number 1512–0298) analysis shows that the proposed treat- [T.D. ATF–299, 55 FR 24989, June 19, 1990, as ment is not acceptable, the appropriate amended at 69 FR 18803, Apr. 9, 2004] TTB officer will send the proprietor a letter stating the reason(s) for dis- § 24.242 Authority to use greater quan- allowing the proposed treatment. tities of decolorizing material in juice or wine. (Sec. 201, Pub. L. 85–859, 72 Stat. 1383, as (a) Proprietor’s notice. If the propri- amended (26 U.S.C. 5382)) etor desires to remove color from juice (Approved by the Office of Management and prior to fermentation or if color in ex- Budget under control numbers 1512–0292 and cess of that normally present in wine 1512–0298) develops during the production or stor- [T.D. ATF–299, 55 FR 24989, June 19, 1990, as age of a particular lot or lots, and if amended by T.D. ATF–409, 64 FR 13683, Mar. the proprietor desires to use activated 22, 1999] carbon in excess of twenty-five pounds per 1,000 gallons (3.0 grams per liter) of § 24.243 Filtering aids. juice or wine to remove this color, the Inert fibers, pulps, earths, or similar proprietor, prior to starting the treatment, shall submit to the appropriate materials, may be used as filtering aids TTB officer a written notice for each in the cellar treatment and finishing of lot of juice or wine to be treated for de- wine. Agar-agar, carrageenan, cel- colorization. The written notice will lulose, and diatomaceous earth are state commonly employed inert filtering and (1) The reason for the treatment; clarifying aids. In general, there is no (2) The volume, kind, and type of limitation on the use of inert materials juice or wine to be treated; and no records need be maintained con- (3) The kind and quantity of decol- cerning their use. However, if the inert orizing material to be used; and, material is dissolved in water prior to (4) The length of time the decol- addition to wine, then the records re- orizing material is in contact with the quired by § 24.301 will be maintained. juice or wine. Filtering aids which contain active (b) Action by the appropriate TTB offi- chemical ingredients or which may cer on proprietor’s notice. Upon receipt alter the character of wine, may be of the proprietor’s notice, the appropriate TTB officer may require the proprietor to submit samples representa-

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used only in accordance with the provi- or by any other form of representation, sions of § 24.246. misrepresents any still wine to be effervescent wine or a substitute for ef- (Sec. 201, Pub. L. 85–859, 72 Stat. 1383, as amended (26 U.S.C. 5382)) fervescent wine. (Approved by the Office of Management and (Sec. 201, Pub. L. 85–859, 72 Stat. 1331, as Budget under control number 1512–0298) amended, 1381, as amended, 1407, as amended (26 U.S.C. 5041, 5367, 5662)) § 24.244 Use of acid to stabilize stand- [T.D. ATF–299, 55 FR 24989, June 19, 1990, as ard wine. amended by T.D. ATF–409, 64 FR 13683, Mar. Standard wine other than citrus 22, 1999] wine, regardless of the fixed acid level, may be stabilized as a part of the fin- § 24.246 Materials authorized for the ishing process by the addition of citric treatment of wine and juice. acid within the limitations of § 24.246. (a) Wine. Materials used in the proc- Standard wine (including citrus wine) ess of filtering, clarifying, or purifying may be stabilized by the addition of fu- wine may remove cloudiness, precipita- maric acid within the limitations of tion, and undesirable odors and flavors, § 24.246. but the addition of any substance for- (Sec. 201, Pub. L. 85–859, 72 Stat. 1383, as eign to wine which changes the char- amended (26 U.S.C. 5382)) acter of the wine, or the abstraction of ingredients which will change its char- § 24.245 Use of carbon dioxide in still acter, to the extent inconsistent with wine. good commercial practice, is not per- The addition of carbon dioxide to mitted on bonded wine premises. The (and retention in) still wine is per- materials listed in this section are ap- mitted if at the time of removal for proved, as being consistent with good consumption or sale the still wine does commercial practice in the production, not contain more than 0.392 grams of cellar treatment, or finishing of wine, carbon dioxide per 100 milliliters of and where applicable in the treatment wine. However, a tolerance of not more of juice, within the general limitations than 0.009 grams per 100 milliliters to of this section: Provided, That: the maximum limitation of carbon di- (1) When the specified use or limita- oxide in still wine will be allowed tion of any material on this list is de- where the amount of carbon dioxide in termined to be unacceptable by the excess of 0.392 grams per 100 milliliters U.S. Food and Drug Administration, is due to mechanical variations which the appropriate TTB officer may cancel can not be completely controlled under or amend the approval for use of the good commercial practice. A tolerance material in the production, cellar will not be allowed where it is found treatment, or finishing of wine; and that the proprietor continuously or in- (2) Where water is added to facilitate tentionally exceeds 0.392 grams of car- the solution or dispersal of a material, bon dioxide per 100 milliliters of wine the volume of water added, whether the or where the variation results from the material is used singly or in combina- use of methods or equipment deter- tion with other water based treating mined by the appropriate TTB officer materials, may not total more than not in accordance with good commer- one percent of the volume of the treat- cial practice. The proprietor shall de- ed wine, juice, or both wine and juice, termine the amount of carbon dioxide from which such wine is produced. added to wine using authorized test (b) Formula wine. In addition to the procedures. Penalties are provided in 26 material listed in this section, other U.S.C. 5662 for any person who, whether material may be used in formula wine by manner of packaging or advertising if approved for such use.

MATERIALS AUTHORIZED FOR TREATMENT OF WINE AND JUICE

Materials and use Reference or limitation

Acacia (gum arabic): To clarify and to stabilize wine ...... The amount used shall not exceed 2 lbs/1000 gals. (0.24 g/L of wine. 21 CFR 184.1330 (GRAS) *See footnote below.

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MATERIALS AUTHORIZED FOR TREATMENT OF WINE AND JUICE—Continued

Materials and use Reference or limitation

Acetaldehyde: For color stabilization of juice prior to concentra- The amount used must not exceed 300 ppm, and the finished tion. concentrate must have no detectable level of the material. 21 CFR 182.60 (GRAS). Activated carbon: To assist precipitation during fermentation ...... 27 CFR 24.176. GRAS per FDA advisory opinion dated 1/26/ 79. To clarify and to purify wine ...... The amount used to clarify and purify wine shall be included in the total amount of activated carbon used to remove excessive color in wine. 27 CFR 24.241 and 24.242 (GRAS). To remove color in wine and/or juice from which the The amount used to treat the wine, including the juice from wine was produced. which the wine was produced, shall not exceed 25 lbs/1000 gal. (3.0 g/L). If the amount necessary exceeds this limit, a notice is required pursuant to 27 CFR 24.242 (GRAS). Albumen (egg white): Fining agent for wine ...... May be prepared in a light brine 1 oz. (28.35 grams) potassium chloride, 2 lbs (907.2 grams) egg white, 1 gal. (3.785 L) of water. Usage not to exceed 1.5 gals. of solution per 1,000 gals. of wine. (GRAS). Alumino-silicates (hydrated) e.g., Bentonite (Wyoming clay) and 21 CFR ¤¤ 182.2727, 182.2729, 184.1155 (GRAS) and Kaolin: To clarify and to stabilize wine or juice. 186.1256. GRAS per FDA advisory opinion dated July 26, 1985. Ammonium phosphate (mono- and di basic): Yeast nutrient in The amount used shall not exceed 8 lbs. per 1000 gals. (0.96 wine production and to start secondary fermentation in the g/L) of wine. 21 CFR 184.1141 (GRAS). production of sparkling wines. Ascorbic acid iso-ascorbic acid (erythorbic acid): To prevent oxi- May be added to grapes, other fruit (including berries), and dation of color and flavor components of juice and wine. other primary wine making materials, or to the juice of such materials, or to the wine, within limitations which do not alter the class or type of the wine. 21 CFR 182.3013 and 182.3041 (GRAS). Calcium carbonate (with or without calcium salts of tartaric and malic acids): To reduce the excess natural acids in high acid wine, The natural or fixed acids shall not be reduced below 5 g/L. and in juice prior to or during fermentation.. 21 CFR 184.1069 and 184.1099, and 184.1191 (GRAS). A fining agent for cold stabilization...... The amount used shall not exceed 30 lbs/1000 gals. (3.59 g/ L) of wine. Calcium pantothenate: Yeast nutrient to facilitate fermentation The amount used must not exceed 0.1 lb. per 25,000 gallons. of apple wine. 21 CFR 184.1212 (GRAS). Calcium sulfate (gypsum): To lower pH in sherry wine...... The sulfate content of the finished wine shall not exceed 2.0g/ L, expressed as potassium sulfate. 27 CFR 24.214. 21 CFR 184.1230 (GRAS). Carbon dioxide (including food grade dry ice): To stabilize * * * 27 CFR 24.245. and to preserve wine. 21 CFR 184.1240 (GRAS). Casein, potassium salt of casein: To clarify wine ...... GRAS per FDA opinions of 02/23/60 and 08/25/61. 27 CFR 24.243. Citric acid: To correct natural acid deficiencies in wine ...... 27 CFR 24.182 and 24.192. 21 CFR 182.1033 (GRAS). To stabilize wine other than citrus wine ...... The amount of citric acid shall not exceed 5.8 lbs/1000 gals. (0.7 g/L). 27 CFR 24.244. 21 CFR 182.1033 (GRAS). Copper sulfate: To remove hydrogen sulfide and/or mercaptans The quantity of copper sulfate added (calculated as copper) from wine. must not exceed 6 parts copper per million parts of wine (6.0 mg/L). The residual level of copper in the finished wine must not exceed 0.5 parts per million (0.5 mg/L). 21 CFR 184.1261 (GRAS). Defoaming agents (polyoxyethylene 40 monostearate, silicon di- Defoaming agents which are 100% active may be used in oxide, dimethylpoly-siloxane, sorbitan monostearate, glyceryl amounts not exceeding 0.15 lbs/1000 gals. (0.018 g/L of mono-oleate and glyceryl dioleate): To control foaming, fer- wine. Defoaming agents which are 30% active may be used mentation adjunct. in amounts not exceeding 0.5 lbs/1000 gals. (0.06 g/L) of wine. Silicon dioxide shall be completely removed by filtration. The amount of silicon remaining in the wine shall not exceed 10 parts per million. 21 CFR 173.340 and 184.1505. Dimethyl dicarbonate: To sterilize and to stabilize wine, dealcoholized wine, Must meet the conditions prescribed by FDA in 21 CFR and low alcohol wine. 172.133. DMDC may be added to wine, dealcoholized wine, and low alcohol wine in a cumulative amount not to exceed 200 parts per million (ppm). Enzymatic activity: Various uses as shown below ...... The enzyme preparation used shall be prepared from nontoxic and nonpathogenic microorganisms in accordance with good manufacturing practice and be approved for use in food by either FDA regulation or by FDA advisory opinion.

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MATERIALS AUTHORIZED FOR TREATMENT OF WINE AND JUICE—Continued

Materials and use Reference or limitation

Carbohydrase (alpha-Amylase): To convert starches to The amylase enzyme activity shall be derived from Aspergillus fermentable carbohydrates. niger, Aspergillus oryzae, Bacillus subtilis, or barley malt per FDA advisory opinion of 8/18/83 or from Rhizopus oryzae per 21 CFR 173.130 or from Bacillus licheniformis per 21 CFR 184.1027. Carbohydrase (beta-Amylase): To convert starches to The amylase enzyme activity shall be derived from barley malt fermentable carbohydrates. per FDA advisory opinion dated 8/18/83. Carbohydrase (Glucoamylase, Amylogluco-sidase): To The amylase enzyme activity shall be derived from Aspergillus convert starches to fermentable carbohydrates. niger or Aspergillus oryzae per FDA advisory opinion dated 8/18/83 or from Rhizopus oryzae per 21 CFR 173.130 or from Rhizopus niveus per 21 CFR 173.110. Carbohydrase (pectinase, cellulase, hemicellulase): To The enzyme activity used must be derived from Aspergillus facilitate separation of juice from the fruit. aculeatus. FDA advisory opinion dated12/19/1996. Catalase: To clarify and to stabilize wine ...... The enzyme activity used shall be derived from Aspergillus niger or bovine liver per FDA advisory opinion dated 8/18/ 83 (GRAS). Cellulase: To clarify and to stabilize wine and to facili- The enzyme activity used shall be derived from Aspergillus tate separation of the juice from the fruit. niger per FDA advisory opinion dated 8/18/83 (GRAS). Cellulase (beta-glucanase): To clarify and filter wine .... The enzyme activity must be derived from Tricoderma longibrachiatum. The amount used must not exceed 3 g/hl. 21 CFR 184.1250 (GRAS). Glucose oxidase: To clarify and to stabilize wine ...... The enzyme activity used shall be derived from Aspergillus niger per FDA advisory opinion of 8/18/83 (GRAS). Lysozyme: To stabilize wines from malolactic acid bac- The amount used must not exceed 500 mg/L. FDA advisory terial degradation.. opinion dated 12/15/93. Pectinase: To clarify and to stabilize wine and to facili- The enzyme activity used shall be derived from Aspergillus tate separation of juice from the fruit. niger per FDA advisory opinion dated 8/18/83 (GRAS). Protease (general): To reduce or to remove heat labile The enzyne activity used shall be derived from Aspergillus proteins. niger or Bacillus subtilis per FDA advisory opinion dated 08/ 18/83 or from Bacillus licheniformis per 21 CFR 184.1027 (GRAS). Protease (Bromelin): To reduce or to remove heat la- The enzyme activity used shall be derived from Ananus bile proteins. comosus or Ananus bracteatus (L) per FDA advisory opinion dated 08/18/83 (GRAS). Protease (Ficin): To reduce or to remove heat labile The enzyme activity used shall be derived from Ficus spp. per proteins. FDA advisory opinion dated 08/18/83 (GRAS). Protease (Papain): To reduce or to remove heat labile The enzyme activity used shall be deived from Carica papaya proteins. (L) per 21 CFR 184.1585 (GRAS). Protease (Pepsin): To reduce or to remove heat labile The enzyme actvity used shall be derived from porcine or bo- proteins. vine stomachs per FDA advisory opinion dated 08/18/83 (GRAS). Protease (Trypsin): To reduce or to remove heat labile The enzyme activity used shall be derived from porcine or bo- proteins. vine pancreas per FDA advisory opinion dated 08/18/83 (GRAS). Urease: To reduce levels of naturally occurring urea in The urease enzyme activity shall be derived from wine to help prevent the formation of ethyl carba- Lactobacillus fermentum per 21 CFR 184.1924. Use is lim- mate. ited to not more than 200 mg/L and must be filtered prior to final packaging of the wine. Ethyl maltol: To stabilize wine ...... Use authorized at a maximum level of 100mg/L in all standard wines except natural wine produced from Vitis vinifera grapes. FDA advisory opinion dated 12/1/86. Ferrocyanide compounds (sequestered complexes): To remove No insoluble or soluble residue in excess of 1 part per million trace metal from wine and to remove objectionable levels of shall remain in the finished wine and the basic character of sulfide and mercaptans from wine. the wine shall not be changed by such treatment. GRAS per FDA advisory opinion of 06/22/82. Ferrous sulfate: To clarify and to stabilize wine ...... The amount used shall not exeed 3 ozs./1000 gals. (0.022 g/ L) of wine. 21 CFR 184.1315 (GRAS). Fumaric acid: To correct natural acid deficiencies in grape wine ...... The fumaric acid content of the finished wine shall not exceed 25 lbs/1000 gals (3.0 g/L). 27 CFR 24.182 and 24.192. 21 CFR 172.350. To stabilize wine ...... The fumaric acid content of the finished wine shall not exceed 25 lbs/1000 gals (3.0 g/L). 27 CFR 24.244. 21 CFR 172.350. Gelatin (food grade): To clarify juice or wine ...... (GRAS). Granular cork: To smooth wine ...... The amount used shall not exceed 10 lbs/1000 gals. of wine (1.2 g/L). GRAS per FDA advisory opinion dated 02/25/85. Isinglass: To clarify wine ...... GRAS per FDA advisory opinion dated 02/25/85. Lactic acid: To correct natural acid deficiencies in grape wine ... 27 CFR 24.182 and 24.192. 21 CFR 184.1061 (GRAS). Malic acid: To correct natural acid deficiencies in juice or wine .. 27 CFR 24.182 and 24.192. 21 CFR 184.1069 (GRAS).

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MATERIALS AUTHORIZED FOR TREATMENT OF WINE AND JUICE—Continued

Materials and use Reference or limitation

Malo-lactic bacteria: To stabilize grape wine ...... Malo-lactic bacteria of the type Leuconostoc oenos may be used in treating wine. GRAS per FDA advisory opinion dated 02/25/85. Maltol: To stabilize wine ...... Use authorized at a maximum level of 250 mg/L in all standard wine except natural wine produced from Vitis vinifera grapes. FDA advisory opinion dated 12/1/86. Milk products (pasteurized whole, skim, or half-and-half): Fining agent for grape wine or sherry ...... The amount used must not exceed 2.0 liters of pasteurized milk products per 1,000 liters (0.2 percent V/V) of wine. To remove off flavors in wine ...... The amount used must not exceed 10 liters of pasteurized milk products per 1,000 liters (1 percent V/V) of wine. Nitrogen gas: To maintain pressure during filtering and bottling 21 CFR 184.1540 (GRAS). or canning of wine and to prevent oxidation of wine. Oak chips or particles, uncharred and untreated: To smooth 21 CFR 172.510. wine. Oxygen and compressed air: May be used in juice and wine ...... None. Polyvinyl-polypyr-rolidone (PVPP): To clarify and to stabilize wine and to remove color The amount used to treat the wine, including the juice from from red or black wine or juice. which the wine was produced, shall not exceed 60 lbs/1,000 gals. (7.19 g/L) and shall be removed during filtration. PVPP may be used in a continuous or batch process. The finished wine shall retain vinous character and shall have color of not less than 0.6 Lovibond in a one-half inch cell or not more than 95 percent transmittance per **AOAC Method 11.003Ð11.004 (14th Ed.). 21 CFR 173.50. Potassium bitartrate: To stabilize grape wine ...... The amount used shall not exceed 35 lbs/1000 gals. (4.19 g/ L) of grape wine. 21 CFR 184.1077 (GRAS). Potassium carbonate and/or potassium bicarbonate To reduce excess natural acidity in wine, and in juice The natural or fixed acids shall not be reduced below 5 parts prior to or during fermentation. per thousand (5 g/L). 21 CFR 184.1619 and 184.1613 (GRAS). Potassium citrate: pH control agent and sequestrant in treat- The amount of potassium citrate shall not exceed 25 lbs/1000 ment of citrus wines. gals. (3.0 g/L) of finished wine. 27 CFR 24.182. 21 CFR 182.1625 and 182.6625 (GRAS). Potassium meta-bisulfite: To sterilize and to preserve wine ...... The sulfur dioxide content of the finished wine shall not exceed the limitations prescribed in 27 CFR 4.22. 21 CFR 182.3637 (GRAS). Silica gel (colloidal silicon dioxide): To clarify wine or juice ...... Use must not exceed the equivalent of 20 lbs. colloidal silicon dioxide at a 30% concentration per 1000 gals. of wine. (2.4 g/L). Silicon dioxide must be completely removed by filtration. 21 CFR 172.480. Sorbic acid and potassium salt of sorbic acid: To sterilize and to The finished wine shall contain not more than 300 milligrams preserve wine; to inhibit mold growth and secondary fer- of sorbic acid per liter of wine. 21 CFR 182.3089 and mentation. 182.3640 (GRAS). Soy flour (defatted): Yeast nutrient to facilitate fermentation of The amount used shall not exceed 2 lbs/1000 gals. (0.24 g/L) wine. of wine. (GRAS). Sulfur dioxide: To sterilize and to preserve wine ...... The sulfur dioxide content of the finished wine shall not exceed the limitations prescribed in 27 CFR 4.22(b)(1). 21 CFR 182.3862 (GRAS). Tannin: To adjust tannin content in apple juice or in apple wine The residual amount of tannin shall not exceed 3.0 g/L, calculated as gallic acid equivalents (GAE). GRAS per FDA advisory opinions dated 4/6/59 and 3/29/60. Total tannin shall not be increased by more than 150 milligrams/liter by the addition of tannic acid (polygalloylglucose). To clarify or to adjust tannin content of juice or wine The residual amount of tannin, calculated in gallic acid equiva- (other than apple). lents, shall not exceed 0.8 g/L in white wine and 3.0 g/L in red wine. Only tannin which does not impart color may be used in the cellar treatment of juice or wine. GRAS per FDA advisory opinions dated 4/6/59 and 3/29/60. Total tannin shall not be increased by more than 150 milligrams/liter by the addition of tannic acid (poly-galloylglucose). Tartaric acid: To correct natural acid deficiencies in grape juice/wine Use as prescribed in 27 CFR 24.182 and 24.192. 21 CFR and to reduce the pH of grape juice/wine where 184.1099 (GRAS). ameliorating material is used in the production of grape wine. Thiamine hydrochloride: Yeast nutrient to facilitate fermentation The amount used shall not exceed 0.005 lb/1000 gals. (0.6 of wine. mg/L) of wine or juice. 21 CFR 184.1875 (GRAS). Yeast, autolyzed: Yeast nutrient to facilitate fermentation in the 21 CFR 172.896 and 184.1983. GRAS per FDA advisory production of grape or fruit wine. opinion of 10/06/59.

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MATERIALS AUTHORIZED FOR TREATMENT OF WINE AND JUICE—Continued

Materials and use Reference or limitation

Yeast, cell wall/membranes of autolyzed yeast: To facilitate fer- The amount used shall not exceed 3 lbs/1000 gals. (0.36 g/L) mentation of juice/wine. of wine or juice. (GRAS). * GRAS—An acronym for ‘‘generally recognized as safe.’’ The term means that the treating material has an FDA listing in Title 21, Code of Federal Regulations, Part 182 or Part 184, or is considered to be generally recognized as safe by advisory opinion issued by the U.S. Food and Drug Administration. ** AOAC—Association of Official Analytical Chemists. *** To stabilize—To prevent or to retard unwanted alteration of chemical and/or physical properties.

(Sec. 201, Pub. L. 85–859, 72 Stat. 1383, as amended (26 U.S.C. 5381, 5382, 5385, 5386, and 5387)) [T.D. ATF–299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF–312, 56 FR 31079, July 9, 1991; T.D. ATF–350, 58 FR 52231, Oct. 7, 1993; T.D. ATF–350, 60 FR 38959, July 31, 1995; T.D. ATF– 371, 61 FR 21079, May 9, 1996; T.D. ATF–409, 64 FR 13683, Mar. 22, 1999; T.D. TTB–17, 69 FR 67643, Nov. 19, 2004; T.D. TTB–61, 72 FR 51709, Sept. 11, 2007]

§ 24.247 Materials authorized for the tions specified in this section: Provided, treatment of distilling material. That when the specified use or limitation of any material on this list is de- The materials listed in this section termined to be unacceptable by the as well as the materials listed in U.S. Food and Drug Administration, § 24.246 are approved as being accept- the appropriate TTB officer may cancel able in good commercial practice for or amend the approval for use of the use by proprietors in the treatment of material in the treatment of distilling distilling material within the limita- material.

Materials Use Reference or limitation

Ammonium phosphate Yeast nutrient in distilling material ...... The amount used shall not exceed 10 lbs/1000 gals. (mono- and di basic. (1.2 g/L). 21 CFR 184.1141 (GRAS).1 See footnote below. Benzoic acid, potassium and To prevent fermentation of the sugar in The amount used shall not exceed 0.1% (w/v) as ben- sodium salts of benzoic wine being accumulated as distilling zoic acid. GRAS per FDA advisory opinions dated 9/ acid. material. 22/82 and 9/8/83. 21 CFR 184.1021 and 184.1733 (GRAS). Enzyme activity ...... The enzyme preparation used shall be prepared from nontoxic and nonpathogenic microorganisms in accordance with good manufacturing practice and be approved for use in food by either FDA regulation or by FDA advisory opinion. Carbohydrase (alpha- Amy- To convert starches to fermentable The amylase enzyme activity shall be derived from As- lase). carbohydrates. pergillus niger, Aspergillus oryzae, Bacillus subtilis, or barley malt per FDA advisory opinion of 8/18/83 or from Rhizopus oryzae per 21 CFR 173.130 or from Bacillus licheniformis per 21 CFR 184.1027. Carbohydrase (beta- Amy- To convent starches to fermentable The amylase enzyme activity shall be derived from bar- lase). carbohydrates. ley malt per FDA advisory opinion dated 8/18/83. Carbohydrase To convent starches to fermentable The amylase enzyme actvity shall be derived from As- (Glucoamylase, carbohydrates. pergillus niger or Aspergillus oryzae per FDA advi- Amylogluco-sidase). sory opinion dated 8/18/83 or from Rhizopus oryzae per 21 CFR 173.130 or from Rhizopus niveus per 21 CFR 173.110. Copper sulfate...... To eliminate hydrogen sulfide and The finished brandy or wine spirits produced from dis- mercaptans. tilling material to which copper sulfate has been added shall not contain more than 2 parts per million (2 mg/L) residual copper. GRAS per FDA advisory opinion of 7/23/69. Hydrogen peroxide ...... To reduce the bisulfite aldehyde com- The amount used shall not exceed 200 parts per mil- plex in distilling material. lion. 21 CFR 184.1366 (GRAS). Potassium permanganate ..... Oxidizing agent ...... The finished brandy or wine spirits produced from distilling material to which potassium permanganate has been added must be free of chemical residue resulting from such treatment. (GRAS) Sodium hydroxide ...... Acid neutralizing agent ...... The finished brandy or wine spirits produced from distilling material to which sodium hydroxide has been added must be free of chemical residue resulting from such treatment. 21 CFR 184.1763 (GRAS).

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Materials Use Reference or limitation

Sulfuric acid ...... To effect favorable yeast development 27 CFR 24.216 (GRAS), 21 CFR 184.1095 (GRAS). in distilling material; to prevent fermentation of the sugar in wine being accumulated as distilling material; to lower pH to 2.5 in order to prevent putrefaction and/or ethyl acetate development. 1 GRAS—An acronym for ‘‘generally recognized as safe.’’ The term means that the treating material has an FDA listing in title 21, Code of Federal Regulations, part 182 or part 184, or is considered to be generally recognized as safe by the U.S. Food and Drug Administration.

(Sec. 201, Pub. L. 85–859, 72 Stat. 1383, as amended (26 U.C.S. 5381, 5382, 5385, 5386, and 5387)). [T.D. ATF–299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF–409, 64 FR 13683, Mar. 22, 1999]

§ 24.248 Processes authorized for the and distilling material, within the gen- treatment of wine, juice, and dis- eral limitations of this section: Pro- tilling material. vided, That when the specified use or Any process which changes the char- limitation of any process on this list is acter of the wine to the extent incon- determined to be unacceptable for use sistent with good commercial practice in foods and beverages by the U.S. is not permitted on bonded wine prem- Food and Drug Administration, the ap- ises. The processes listed in this sec- propriate TTB officer may cancel or tion are approved as being consistent amend the approval for use of the proc- with good commercial practice for use ess in the production, cellar treatment, by proprietors in the production, cellar or finishing of wine, juice, and dis- treatment, or finishing of wine, juice, tilling material.

PROCESSES AUTHORIZED FOR THE TREATMENT OF WINE, JUICE, AND DISTILLING MATERIAL

Processes Use Reference or limitation

Electrodialysis ...... To aid in the removal of tartrates ...... This process must not alter the vinous character of the wine. Elimination of sulfur dioxide To reduce the sulfur dioxide content of Use of a physical process to remove sulfur dioxide from by physical process. juice. juice must not alter the basic character of the juice so treated Ion exchange ...... Various applications in the treatment of Anion, cation, and non-ionic resins, except those ani- juice or wine: onic resins in the mineral acid state, may be used in batch or continuous column processes as total or partial treatment of wine, provided that with regard to juice or finished wine; 1. Such treatment does not alter the fruit character of the juice or wine. 2. The treatment does not reduce the color of the juice or wine to less than that normally contained in such juice or wine. 3. Treatment does not increase inorganic anions in the juice or wine by more than 10 mg/L. 4. The treatment does not reduce the metallic cation concentration in the juice or wine to less than 300 mg/L. 5. The treatment does not reduce natural or fixed acid in grape wine below 4 g/L for red table wines, 3 g/L for white table wines, 2.5 g/L for all other grape wines, 4 g/L for wine other than grape wine. 6. Treatment does not reduce the pH of the juice or wine to less than pH 2.8 nor increase the pH to more than pH 4.5.

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PROCESSES AUTHORIZED FOR THE TREATMENT OF WINE, JUICE, AND DISTILLING MATERIAL— Continued

Processes Use Reference or limitation

7. The resins used have not imparted to the juice or wine any material or characteristic (incidental to the resin treatment) which may be prohibited under any other section of the regulations in this part. The winemaker may employ conditioning and/or regenerating agents consisting of water, fruit acids common to the wine or juice being treated, and inorganic acids, salts and/or bases provided the conditioned or regen- erated resin is rinsed with water until the resin and container are essentially free from unreacted (excess) conditioning or regenerating agents prior to the introduction of the juice or wine. 21 CFR 173.25. Metal reducing matrix sheet To reduce the level of metals such as (1) The active ingredient, polyvinylimidazol, must not processing. copper and iron in wine. constitute more than 40% by weight of the sheet. (2) Use of the sheet must not significantly alter the color of the wine. Nanofiltration ...... To reduce the level of volatile acidity in This process must use permeable membranes which wine (used with ion exchange). are selective for molecules not greater than 150 molecular weight with transmembrane pressures of 250 psi or less. Osmotic transport 1 ...... For alcohol reduction ...... (1) Use must not alter the vinous character of the wine (2) None of the stripping solution may migrate into the wine. Reverse osmosis 1 ...... To reduce the ethyl alcohol content of Permeable membranes which are selective for mol- wine and to remove off flavors in ecules not greater than 500 molecular weight with wine. transmembrane pressures of 200 psi and greater. The addition of water other than that originally present prior to processing will render standard wine ‘‘other than standard.’’ Use shall not alter vinous character. Spinning cone column 1 ...... To reduce the ethyl alcohol content of Use shall not alter vinous character. For standard wine, wine and to remove off flavors in the same amount of essense must be added back to wine. any lot of wine as was originally removed. Sulfide reducing matrix sheet To reduce the level of sulfides in wine (1) The active ingredient, polyvinylimidazol, must not processing. constitute more than 40% by weight of the sheet. (2) Use of the sheet must not significantly alter the color of the wine. Thermal gradient processing To separate wine into low alcohol and The fractions derived from such processing shall retain high alcohol wine fractions. vinous character. Such treatment shall not increase the alcohol content of the high alcohol fraction to more than 24 percent by volume. The addition of water other than that originally present in the wine prior to processing will render standard wine ‘‘other than standard.’’ To separate juice into low Brix and The low Brix fraction derived from such processing may high Brix juice fractions. be used in wine production. The high Brix fraction derived from such processing shall not be diluted with water for use in wine production. Thin-film evaporation under To separate wine into a low alcohol Use shall not alter vinous character. Water separated reduced pressure 1. wine fraction and into a higher alco- with alcohol during processing may be recovered by hol distillate. refluxing in a closed continuous system and returned to the wine. The addition of water other than that originally present in the wine prior to processing, will render standard wine ‘‘other than standard.’’ Ultrafiltration ...... To remove proteinaceous material Permeable membranes which are selective for mol- from wine; to reduce harsh tannic ecules greater than 500 and less than 25,000 molec- material from white wine produced ular weight with transmembrane pressures less than from white skinned grapes; to re- 200 psi. Use shall not alter vinous character. 21 CFR move pink color from blanc de noir 175.300, 177.1520, 177.1550, 177.1630, 177.2440, wine; to separate red wine into low 177.2600, and 177.2910. color and high color wine fractions for blending purposes. 1 This process must be done on distilled spirits plant premises. However, reverse osmosis, under certain limited conditions, may be used on bonded winery premises if ethyl alcohol is only temporarily created within a closed system.

(Sec. 201, Pub. L. 85–859, 72 Stat. 1383, as amended (26 U.S.C. 5381, 5382, 5385, 5386, and 5387)). [T.D. ATF–299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF–312, 56 FR 31081, July 9, 1991; T.D. ATF–350, 58 FR 52232, Oct. 7, 1993; T.D. ATF–371, 61 FR 21079, May 9, 1996; T.D. ATF– 409, 64 FR 13683, Mar. 22, 1999; T.D. TTB–17, 69 FR 67644, Nov. 19, 2004]

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§ 24.249 Experimentation with new 24.247, 24.248, or elsewhere in this part, treating material or process. an application shall be filed with the (a) General. The proprietor may, appropriate TTB officer to show that under the provisions of this section, the proposed material or process is a conduct on bonded wine premises such cellar treatment consistent with good experimentation with a treating mate- commercial practice. rial or process as the appropriate TTB (b) Data required. The application will officer finds may be conducted in a include the following: manner that will not jeopardize the (1) The name and description of the revenue, conflict with wine operations, material or process; or be contrary to law. (2) The purpose, the manner, and the (b) Application. The proprietor who extent to which the material or process wants to conduct experimentation is to be used together with any tech- must file an application with the ap- nical bulletin or other pertinent infor- propriate TTB officer setting forth in mation relative to the material or detail the experimentation to be con- process; ducted and the facilities and equip- (3) A sample, if a proposed material; ment to be used. The proposed experi- (4) Documentary evidence of the U.S. mentation must not be conducted until Food and Drug Administration’s ap- the appropriate TTB officer has deter- proval of the material for its intended mined that the conduct of such experi- purpose in the amounts proposed for mentation must not jeopardize the rev- the particular treatment con- enue, conflict with wine operations, or templated; be contrary to law, and has approved (5) The test results of any laboratory- the application. scale pilot study conducted by the (c) Segregation of operations. Experi- winemaker in testing the material and mentation authorized under this sec- an evaluation of the product and of the tion will be conducted with the degree treatment including the results of tests of segregation from wine operations as of the shelf life of the treated wine; may be required by the appropriate (6) A tabulation of pertinent informa- TTB officer under the provisions of tion derived from the testing program § 24.27. conducted by the chemical manufac- (d) Records. The proprietor shall, with turer demonstrating the function of respect to each experiment authorized the material or process; by this section, keep records of the (7) A list of all chemicals used in kind and quantity of materials re- compounding the treating material and ceived and used and the volume of wine the quantity of each component; treated and the manner by which dis- (8) The recommended maximum and posed. minimum amounts, if any, of the mate- (e) Disposition of the wine. The dis- rial proposed to be used in the treat- position of the wine subjected to exper- ment and a statement as to the volume imental treatment will conform to the of water required, if any, to facilitate conditions stated in the authorization the addition of the material or oper- to conduct the experimentation. ation of the process; and (9) Two 750-milliliter samples rep- (Sec. 201, Pub. L. 85–859 (72 Stat. 1383, as resentative of the wine before and after amended (26 U.S.C. 5361, 5382)) treatment. Information of a confiden- (Approved by the Office of Management and tial or proprietary nature to the manu- Budget under control numbers 1512–0292 and facturer or supplier of the treating ma- 1512–0298) terial or process may be forwarded by [T.D. ATF–299, 55 FR 24989, June 19, 1990, as the manufacturer or supplier to the ap- amended by T.D. ATF–409, 64 FR 13683, 13685, propriate TTB officer with a reference Mar. 22, 1999] to the application filed by the winemaker. Information contained within § 24.250 Application for use of new the winemaker’s application can be treating material or process. disclosed to the public, subject to the (a) General. If the proprietor desires limitations of 26 U.S.C. 6103 and 7213. to use a material or process which is (c) Use of cellar treatment. The propri- not specifically authorized in §§ 24.246, etor may not use the proposed treating

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material or process until a determina- of wine which are sold or otherwise dis- tion has been made by the appropriate posed of by the proprietor to employees TTB officer that the intended use of for personal consumption need not be the material or process is acceptable in labeled, but, if labeled, need not show good commercial practice. an accurate statement of net contents. (d) Processing of application. After (c) Tax tolerance. The net contents of evaluation of the data submitted with bottles or other containers of the application, the appropriate TTB untaxpaid wine in the same tax class officer will make a decision regarding filled during six consecutive tax return the acceptability of the proposed treatment in good commercial practice. The periods, as determined from the bonded appropriate TTB officer will notify the wine premises proprietor’s fill test proprietor of the approval or dis- records, shall not vary by more than 0.5 approval of the application. percent from the net contents as stated on the bottles or other containers. The (Sec. 201, Pub. L. 85–859, 72 Stat. 1383, as bonded wine premises proprietor is lia- amended (26 U.S.C. 5381, 5382, 5385, 5386, and 5387)) ble for the tax on the entire amount of wine in the same tax class when that (Approved by the Office of Management and wine is removed from bond, without Budget under control numbers 1512–0292 and 1512–0298) benefit of tolerance, when the fill of bottles or other containers exceeds a [T.D. ATF–299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF–409, 64 FR 13683, 13685, 0.5 percent average of a period which Mar. 22, 1999] consists of six consecutive tax returns, or when filling is not conducted in BOTTLING, PACKING, AND LABELING OF compliance with good commercial WINE practice. (d) Fill tests. The proprietor shall test § 24.255 Bottling or packing wine. at representative intervals wine bot- (a) General. Proprietors of a bonded tled or packed during the bottling or wine premises and a taxpaid wine bot- packing operation of each bottling or tling house premises shall be held packing line to determine if the wine strictly responsible for the correct de- contained in the bottle or other con- termination of the quantity and alco- tainer is in agreement with that stated hol content of wine removed. As re- on the label, bottle, or other container. quired by § 24.170, appropriate and accu- (e) Alcohol tests. The proprietor shall rate measures and instruments for test the alcohol content by volume to measuring and testing the wine will be provided at each wine premises. determine the tax class of the wine and (b) Bottle or other container fill. Pro- to ensure the alcohol content to be prietors of bonded wine premises and stated on the label is in agreement taxpaid wine bottling house premises with the requirement of § 24.257. shall fill bottles or other containers as (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as nearly as possible to conform to the amended (26 U.S.C. 5368)) amount shown on the label or blown in the bottle or marked on any container (Approved by the Office of Management and Budget under control numbers 1512–0298 and other than a bottle; but in no event 1512–0503) may the amount of wine contained in any individual bottle, due to lack of § 24.256 Bottle aging wine. uniformity of the bottles, vary from the amount stated more than 1.0 per- Wine bottled or packed and stored for cent for 15.0 liters and above, 1.5 per- the purpose of aging need not have la- cent for 1.0 liter to 14.9 liters, 2.0 per- bels affixed until the wine is removed cent for 750 mL, 3.0 percent for 375 mL, for consumption or sale. However, the 4.5 percent for 187 mL and 100 mL, and bins, pallets, stacks, cases or con- 9.0 percent for 50 mL; and in such case, tainers of unlabeled wine will be there will be substantially as many marked in some manner to show the bottles overfilled as there are bottles kind (class and type) and alcohol con- underfilled for each lot of wine bottled. tent of the wine. If the unlabeled wine Short-filled bottles or other containers is stored at a location other than the

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bottling or packing winery, the reg- wines under 7 percent alcohol is under istry number of the bottling or packing the jurisdiction of the Food and Drug winery will also be shown. Administration. (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as (iv) The statement of composition amended, 1407, as amended (26 U.S.C. 5368, must include enough information to 5662)) identify the tax class when viewed with the alcohol content. First, the wine (Approved by the Office of Management and Budget under control number 1512–0503) should be identified by the word ‘‘wine,’’ ‘‘mead,’’ ‘‘cider’’ or ‘‘perry,’’ as § 24.257 Labeling wine containers. applicable. If the wine contains more (a) The proprietor must label each than 0.392 grams of carbon dioxide per bottle or other container of beverage 100 milliliters, the word ‘‘sparkling’’ or wine prior to removal for consumption ‘‘carbonated,’’ as applicable, must be or sale. The minimum type size for in- included in the statement of composi- formation required by this section is: 2 tion. If the statement of composition millimeters for containers of more leaves doubt as to the tax class of the than 187 milliliters and 1 millimeter wine, the wine must be marked ‘‘tax for containers of 187 milliliters or less. class 5041(b)(1) IRC’’ or an equivalent The maximum type size for alcohol phrase. For example, a still wine content statements is 3 millimeters un- marked ‘‘wine’’ and ‘‘16 percent alcohol less the container is larger than 5 li- by volume’’ is adequately marked to ters. The label must be securely affixed identify its tax class as 5041(b)(2). A and show: still wine marked ‘‘hard cider’’ and ‘‘9 (1) The name and address of the wine percent alcohol by volume’’ is ade- premises where bottled or packed; quately marked to identify its tax (2) The brand name, if different from class as 5041(b)(1). A still wine marked above; ‘‘raspberry hard cider’’ and ‘‘9 percent (3) The alcohol content as percent by alcohol by volume’’ is adequately volume or the alcohol content stated in marked to identify its tax class as accordance with 27 CFR part 4. For 5041(b)(1). A still wine eligible for the wine with less than 7 percent alcohol hard cider tax rate marked ‘‘cider’’ or by volume stated on the label there is ‘‘hard cider’’ and ‘‘6 percent alcohol by allowed an alcohol content tolerance of volume’’ is adequately marked to iden- plus or minus .75 percent by volume; tify its tax class as 5041(b)(6). However, and if a still wine that is not eligible for (4) The kind of wine, shown as fol- the hard cider tax rate is marked lows: ‘‘cider’’ or ‘‘hard cider’’ and ‘‘6 percent (i) If the wine contains 7 percent or alcohol by volume’’ it is not ade- more alcohol by volume and must have quately marked to identify its tax label approval under 27 CFR part 4, the class as 5041(b)(1), so the tax class must kind of wine is the class, type, or other be shown. designation provided in that part. (5) The net content of the container (ii) If the wine has an exemption unless the net content is permanently from label approval, an adequate state- marked on the container as provided in ment of composition may be used in- 27 CFR part 4. stead of the class and type in 27 CFR (b) The information shown on any part 4. label applied to bottled or packed wine (iii) If the wine contains less than 7 is subject to the recordkeeping require- percent alcohol by volume, an adequate ments of § 24.314. (Sec. 201, Pub. L. 85– statement of composition may be used 859, 72 Stat. 1381, as amended, 1407, as instead of the class and type in 27 CFR amended (26 U.S.C. 5368, 5388, 5662)) part 4. The rules in 27 CFR part 4 per- (c) Use of semi-generic designations—(1) taining to label approval and standards In general. Semi-generic designations of fill do not apply to wine under 7 per- may be used to designate wines of an cent alcohol by volume. The rules in 27 origin other than that indicated by CFR part 16 requiring a Health Warn- such name only if— ing Statement do apply to all wines (i) There appears in direct conjunc- over 1⁄2 percent alcohol. Except for the tion therewith an appropriate appella- rules noted in this section, labeling of tion of origin, as defined in part 4 of

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this chapter, disclosing the true place bulk containers of special natural wine of origin of the wine, and or other wine produced under § 24.218; (ii) The wine so designated conforms (4) The net contents of each con- to the standard of identity, if any, for tainer larger than four liters or each such wine contained in part 4 of this case in wine gallons, or for containers chapter or, if there is no such standard, larger than four liters or cases filled to the trade understanding of such according to metric measure, the con- class or type. tents in liters. If wine is removed in (2) Determination of whether a name is cases, the cases may be marked to semi-generic—(i) In general. Except as show the number and size of bottles or provided in paragraph (c)(2)(ii) of this other containers in each case in lieu of section, a name of geographic signifi- the net contents of the case; and cance, which is also the designation of (5) Except for cases, the date of re- a class or type of wine, shall be deemed moval or shipment. to have become semi-generic only if so (b) Application of marks. Required found by the Administrator. marks may be cut, printed, or other- (ii) Certain names treated as semi-ge- wise legibly and durably marked upon neric. The following names shall be the container larger than four liters or treated as semi-generic: Angelica, Bur- the case or placed on a label or tag se- gundy, Claret, Chablis, Champagne, curely affixed to the case or container Chianti, Malaga, Marsala, Madeira, larger than four liters. Moselle, Port, Rhine Wine or Hock, (c) Location of marks. Required marks Sauterne, Haut Sauterne, Sherry, will be placed on a container larger Tokay. than four liters or on the side of a case for ready examination by appropriate (See: 26 U.S.C. 5368, 5388, 5662) TTB officers. (Approved by the Office of Management and (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as Budget under control number 1512–0503) amended, 1387, as amended, 1407, as amended [T.D. ATF–299, 55 FR 24989, June 19, 1990, as (26 U.S.C. 5368, 5388, 5662)) amended by T.D. ATF–312, 56 FR 31082, July (Approved by the Office of Management and 9, 1991; T.D. ATF–350, 58 FR 52232, Oct. 7, 1993; Budget under control number 1512–0503) T.D. ATF–398, 63 FR 44783, Aug. 21, 1998; T.D. ATF–470, 66 FR 58944, Nov. 26, 2001] [T.D. ATF–299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF–312, 56 FR 31082, July § 24.258 Certificates of approval or ex- 9, 1991; T.D. ATF–409, 64 FR 13684, Mar. 22, emption. 1999] The proprietor shall obtain a certifi- § 24.260 Serial numbers or filling date. cate of label approval or a certificate Each container larger than four li- of exemption from label approval as re- ters or each case used for removing quired by 27 CFR part 4. wine for consumption or sale will be (August 29, 1935, ch. 814, Sec. 5, 49 Stat. 981, marked with a serial number or filling as amended (27 U.S.C. 205)) date at the time of filling or when such containers or cases are prepared for re- § 24.259 Marks. moval. Serial numbers will commence (a) Required marks. Each container with ‘‘1’’ and continue until the nu- larger than four liters or each case meral ‘‘1,000,000’’ is reached, whereupon used to remove wine for consumption the series may recommence with the or sale will be durably marked to show numeral ‘‘1.’’ However, the proprietor the following information: may initiate a new series after the nu- (1) The serial number or filling date meral ‘‘1,000,000’’ has been reached pro- as provided in § 24.260; vided no numeral will be used more (2) The name (or trade name) and the than once during a 12-month period. If registry number of the bottlers wine desired, a separate series of numbers premises; with letter prefixes may be used for (3) The kind (class and type) and the containers larger than four liters and alcohol content of the wine. The kind for cases, or for cases filled on different of wine and alcohol content will be bottling lines, or for removals from dif- stated in accordance with § 24.257. The ferent loading docks. The proprietor formula number will be marked on may mark containers larger than four

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liters or the cases with the filling date wine will be recorded and reported as in lieu of using a serial number or use required by § 24.313. both a serial number and the filling (b) Bulk wine losses. The physical in- date. However, if the proprietor desires ventory of bulk wine will determine to change from the use of a serial num- losses due to spillage, leakage, soak- ber to use of a filling date, or vice versa, age, evaporation, and other losses nor- a notice will be sent to the appropriate mally occurring from racking and fil- TTB officer before making the change. tering since the previous physical in- Where United States or foreign wine is ventory required by this section. A recased, the cases will be marked with claim for allowance of loss, under the the date of recasing, preceded by the provisions of § 24.65, is required for in- letter ‘‘R’’, in lieu of serial number or ventory losses in production or stor- filling date. age: (1) Where there are circumstances in- (72 Stat. 1381; 26 U.S.C. 5367, 5368) dicating that all or a part of the wine (Approved by the Office of Management and reported lost was unlawfully removed, Budget under control number 1512–0503) or [T.D. ATF–299, 55 FR 24989, June 19, 1990, as (2) Where the loss on bonded wine amended by T.D. ATF–312, 56 FR 31082, July premises during the annual period ex- 9, 1991; T.D. ATF–409, 64 FR 13683, Mar. 22, ceeds three percent of the aggregate 1999] volume of wine on-hand at the beginning of the annual period and the vol- Subpart M—Losses of Wine ume of wine received in bond during the annual period; or the loss exceeds § 24.265 Losses by theft. six percent of the still wine produced by fermentation; or the loss exceeds six The proprietor shall be liable for and percent of the sparkling wine produced pay the tax on wine unlawfully re- by fermentation in bottles; or the loss moved while on bonded wine premises, exceeds three percent of the special or while in transit thereto or there- natural wine produced under § 24.195 or from in bond, unless the proprietor or other wine produced under § 24.218; or other person responsible for the tax, es- the loss exceeds three percent of the tablishes to the satisfaction of the ap- artificially carbonated wine produced; propriate TTB officer that the theft did or the loss exceeds three percent of the not occur as the result of connivance, bulk process sparkling wine produced. collusion, fraud or negligence on the part of the proprietor or other person The percentage applicable to each tax responsible for the tax or the owner, class of wine will be calculated sepa- consignor, consignee, bailee, or carrier, rately, unless the calculation is im- or their agents or employees. practicable because of the mixture of different tax classes by addition of (Sec. 201, Pub. L. 85–859, 72 Stat, 1381, as wine spirits or blending during the an- amended (26 U.S.C. 5370)) nual period, in which case the percent- [T.D. ATF–299, 55 FR 24989, June 19, 1990, as age will be calculated on the aggregate amended by T.D. ATF–409, 64 FR 13683, Mar. volume. Wine removed immediately 22, 1999; T.D. ATF–432, 65 FR 69253, Nov. 16, after production for use as distilling 2000] material and on which the usual racking, clarifying, and filtering losses § 24.266 Inventory losses. are not sustained, will not be included (a) General. The proprietor shall take in the calculations. a physical inventory of all untaxpaid (c) Bottle and other container wine wine on-hand on bonded wine premises losses. Wine filled into a bottle or other as of the close of business each tax similar containers are not subject to year, or where a cycle different from losses due to spillage, leakage, soak- the tax year has been established as age, evaporation, and other losses nor- provided in § 24.313, the inventory will mally occurring from racking and fil- be taken annually at the end of that tering. In addition, wine that has been cycle, or at any time required by an ap- filled into a bottle or other similar propriate TTB officer. The physical in- containers can be accurately accounted ventory of bulk and bottled or packed for and any unexplained shortage is

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considered evidence of an unreported Subpart N—Removal, Return and removal. Therefore, the proprietor Receipt of Wine shall pay the tax on any unexplained loss of untaxpaid bottled or packed TAXPAID REMOVALS wine disclosed by inventory or otherwise. § 24.270 Determination of tax. The tax on wine is determined at the (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as time of removal from a bonded wine amended (26 U.S.C. 5367, 5369, 5370)) premises for consumption or sale. Sec- (Approved by the Office of Management and tion 5041 of title 26, United States Budget under control number 1512–0492) Code, imposes an excise tax, at the [T.D. ATF–299, 55 FR 24989, June 19, 1990, as rates prescribed, on all wine (including amended by T.D. ATF–312, 56 FR 31082, July imitation, substandard, or artificial 9, 1991] wine, and compounds sold as wine, which contain 24 percent or less of al- § 24.267 Losses in transit. cohol by volume) produced in or im- Where the loss in transit of bulk wine ported into the United States. Wine shipped in bond or the total daily bulk containing more that 24 percent of al- wine in bond shipments received in cohol by volume is classed as distilled bond from the same winery exceeds one spirits and taxed accordingly. The tax percent (two percent on trans- is determined and paid on the volume continental shipments) of the volume of wine: (a) In bottles or other containers shipped, the proprietor of the receiving filled according to United States meas- bonded wine premises shall imme- ure recorded to the nearest 10th gallon; diately notify the appropriate TTB of- or, ficer and file a claim under the provi- (b) In bottles or other containers sions of § 24.65. filled according to metric measure, on (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as the volume of wine in United States amended (26 U.S.C. 5370)) wine gallons to the nearest 10th gallon; or (Approved by the Office of Management and Budget under control number 1512–0492) (c) In the case of pipeline removals, on the volume of bulk wine removed re- [T.D. ATF–299, 55 FR 24989, June 19, 1990, as corded to the nearest whole gallon, amended by T.D. ATF–409, 64 FR 13685, Mar. five-tenths gallon being converted to 22, 1999] the next full gallon. § 24.268 Losses by fire or other cas- (Sec. 201, Pub. L. 85–859, 72 Stat. 1331, as ualty. amended (26 U.S.C. 5041)) See §§ 24.278 and 24.279 of this part for regula- The proprietor must immediately re- tions concerning credit against the wine tax port any loss by theft, fire or other cas- for certain bonded wine premises proprietors. ualty, or any other extraordinary or [T.D. ATF–299, 55 FR 24989, June 19, 1990, as unusual loss to the appropriate TTB of- amended by T.D. ATF–307, 55 FR 52737, Dec. ficer. If required by the appropriate 21, 1990] TTB officer, the proprietor must file a claim under the provisions of § 24.65. § 24.271 Payment of tax by return with The volume of wine loss must be re- remittance. ported on TTB F 5120.17 for the report- (a) General. The tax on wine is paid ing period during which the loss oc- by an Excise Tax Return, TTB F curred. 5000.24, which is filled with remittance (check, cash, or money order) for the (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as full amount of tax due. Prepayments of amended (26 U.S.C. 5370)) tax on wine during the period covered (Approved by the Office of Management and by the return are shown separately on Budget under control number 1512–0492) the Excise Tax Return form. If no tax [T.D. ATF–299, 55 FR 24989, June 19, 1990, as is due for the return period, the filing amended by T.D. ATF–338, 58 FR 19064, Apr. of a return is not required. 12, 1993; T.D. ATF–409, 64 FR 13685, Mar. 22, (b) Return periods and due dates. —(1) 1999] Return periods. —(i) Semimonthly return

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period. Except in the case of a taxpayer (D) A taxpayer who has both domes- who qualifies for, and chooses to use, tic operations and import transactions the annual return period as provided in must combine the wine tax liability on § 24.273 or the quarterly return period the domestic operations and the im- as provided in paragraph (b)(1)(ii) of ports to determine eligibility for the this section, all taxpayers who have quarterly return procedure; filed a bond for deferred payment of (E) The controlled group rules of 26 taxes must use semimonthly return pe- U.S.C. 5061(e), which concern treatment riods. The semimonthly return periods of controlled groups as one taxpayer, run from the 1st day through the 15th do not apply for purposes of deter- day of each month, and from the 16th mining eligibility for the quarterly re- day through the last day of each turn procedure. However, a taxpayer month, except as otherwise provided in who is eligible for the quarterly return paragraph (c) of this section. procedure, and who is a member of a (ii) Quarterly return period. A tax- controlled group that owes $5 million payer who has filed a bond for deferred or more in wine excise taxes per year, payment of taxes may choose to use a is required to pay taxes by electronic quarterly return period if the taxpayer fund transfer (EFT). Quarterly pay- was not liable for more than $50,000 in ments via EFT shall be transmitted in taxes with respect to wine imposed by accordance with section 5061(e); 26 U.S.C. 5041 and 7652 in the preceding (F) A new taxpayer is eligible to file calendar year and if that taxpayer rea- quarterly returns in the first year of sonably expects to be liable for not business simply if the taxpayer reason- more than $50,000 in such taxes during ably expects to be liable for not more the current calendar year. In such a than $50,000 in wine taxes during that case the last day for paying the tax and calendar year; and filing the return shall be the 14th day (G) If a taxpayer filing quarterly ex- after the last day of the calendar quar- ceeds $50,000 in tax liability during a ter. However, the taxpayer may not use taxable year and therefore must revert to the semimonthly return procedure, the quarterly return period procedure that taxpayer may resume quarterly for any portion of the calendar year payments only after a full calendar following the first date on which the year has passed during which the tax- aggregate amount of tax due from the payer’s liability did not exceed $50,000. taxpayer during the calendar year ex- (2) Semimonthly and quarterly tax re- ceeds $50,000, and any tax that has not turn due dates. The taxpayer shall file been paid on that date shall be due on the semimonthly or quarterly return, the 14th day after the last day of the with remittance, for each return period semimonthly period in which that date not later than the 14th day after the occurs. The following additional rules last day of the return period. If the due apply to the quarterly return period date falls on a Saturday, Sunday, or procedure under this section: legal holiday, the return and remit- (A) A ‘‘taxpayer’’ is an individual, tance are due on the immediately pre- corporation, partnership, or other enti- ceding day that is not a Saturday, Sun- ty that is assigned a single Employer day, or legal holiday, except as other- Identification Number as defined in 26 wise provided in paragraph (c)(3) of this CFR 301.7701–12; section. (B) ‘‘Reasonably expects’’ means that (c) Special September rule for taxes due there is no existing or anticipated cir- by semimonthly return. —(1) Division of cumstance known to the taxpayer second semimonthly period.— (i) General. (such as an increase in production ca- Except as otherwise provided in para- pacity) that would cause the taxpayer’s graph (c)(1)(ii) of this section, the sec- tax liability to exceed the prescribed ond semimonthly period for the month limit; of September is divided into two pay- (C) A taxpayer with multiple loca- ment periods, from the 16th day tions must combine the wine tax liabil- through the 26th day, and from the 27th ity for all locations to determine eligi- day through the 30th day. The propri- bility for the quarterly return proce- etor shall file a return on TTB F dure; 5000.24, and make remittance, for the

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period September 16–26, no later than curred tax liability in the amount of September 29. The proprietor shall file $45,000, and for the period September a return on TTB F 5000.24, and make re- 27–30, X incurred tax liability in the mittance, for the period September 27– amount of $2,000. 30, no later than October 14. (ii) Payment requirement. X’s payment (ii) Taxpayment not by electronic fund of tax in the amount of $30,000 for the transfer. In the case of taxes for which first semimonthly period of September remittance by electronic fund transfer is due no later than September 29 (EFT) is not required by § 24.272, the (§ 24.271(b)). X’s payment of tax for the second semimonthly period of Sep- period September 16–26 is also due no tember is divided into two payment pe- later than September 29 riods, from the 16th day through the (§ 24.271(c)(1)(i)). X may use the safe 25th day, and from the 26th day harbor rule to determine the amount of through the 30th day. The proprietor payment due for the period of Sep- shall file a return on TTB F 5000.24, and tember 16–26 (§ 24.271(c)(2)). Under the make remittance, for the period Sep- safe harbor rule, X’s payment of tax tember 16–25, no later than September must not be less than $21,990.00, that is, 28. The proprietor shall file a return on 11/15ths of the tax liability incurred TTB F 5000.24, and make remittance, during the first semimonthly period of for the period September 26–30, no later September. Additionally, X must pay than October 14. the tax in the amount of $2,000 for the (2) Amount of payment—Safe harbor period September 27–30 no later than rule.— (i) General. Taxpayers are con- October 14 (§ 24.271(c)(1)(i)). X must also sidered to have met the requirements pay the underpayment of tax, $23,010.00, of paragraph (c)(1)(i) of this section if for the period September 16–26, no later the amount paid no later than Sep- than October 14 (§ 24.271(c)(2)). tember 29 is not less than 11/15ths (73.3 [T.D. TTB–89, 76 FR 3509, Jan. 20, 2011] percent) of the tax liability incurred EFFECTIVE DATE NOTE: By T.D. TTB–89, 76 for the semimonthly period beginning FR 3509, Jan. 20, 2011, § 24.271 was revised, ef- on September 1 and ending on Sep- fective Feb. 22, 2011 to Feb. 24, 2014. tember 15, and if any underpayment of tax is paid by October 14. § 24.272 Payment of tax by electronic (ii) Taxpayment not by EFT. Tax- fund transfer. payers are considered to have met the (a) General. (1) During a calendar requirements of paragraph (c)(1)(ii) of year any proprietor who is liable for a this section if the amount paid no later gross amount of wine excise tax equal than September 28 is not less than 2/ to or exceeding $5 million combining 3rds (66.7 percent) of the tax liability tax liabilities incurred under this part incurred for the semimonthly period and parts 26 and 27 of this chapter, beginning on September 1 and ending shall during the succeeding calendar on September 15, and if any under- year use a financial institution in mak- payment of tax is paid by October 14. ing payment by electronic fund trans- (3) Weekends and holidays. If the refer (EFT) of wine taxes for that year. A quired taxpayment due date for the pe- proprietor who is required by this sec- riod September 16–25 or September 16– tion to make remittance by EFT may 26, as applicable, falls on a Saturday or not effect payment of wine taxes by legal holiday, the return and remit- cash, check, or money order as de- tance are due on the immediately prescribed in § 24.271. ceding day. If the required due date (2) For the purposes of this section, falls on a Sunday, the return and re- the dollar amount of tax liability is de- mittance are due on the immediately fined as the gross tax liability on all following day. taxable withdrawals and importations (4) Example: Payment of tax for the (including wines brought into the month of September.— (i) Facts. X, a pro- United States from Puerto Rico or the prietor required to pay taxes by elec- Virgin Islands) during the calendar tronic fund transfer, incurred tax li- year, without regard to any drawback, ability in the amount of $30,000 for the credit, or refund, for all premises from first semimonthly period of September. which the activities are conducted by For the period September 16–26, X in- the proprietor.

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(3) For the purposes of this section, a by § 24.271. Upon filing the first return proprietor includes a controlled group on which the proprietor chooses to dis- of corporations, as defined in 26 U.S.C. continue remittance of the tax by EFT 5061 (e)(3). Also, the rules for a ‘‘con- and to begin remittance of the tax with trolled group of corporations’’ apply in the tax return, the proprietor shall no- a similar fashion to groups which in- tify the appropriate TTB officer by at- clude partnerships and/or sole propri- taching a written notification to the etorships. If one entity maintains more tax form stating that no wine excise than 50 percent control over a group tax is due by EFT because the tax li- consisting of corporations and one, or ability during the preceding calendar more, partnerships and/or sole propri- year was less than $5 million, and that etorships, all of the members of the the remittance will be filed with the controlled group are one taxpayer for tax return. the purpose of determining who is re- (c) Remittance. (1) The proprietor quired to make remittances by EFT. shall show on the tax return informa- (4) A proprietor who is required by this section to make remittances by tion about remitting the tax for that EFT shall, for each bonded wine prem- return by EFT and shall file the return ises from which wine is withdrawn with TTB in accordance with the in- upon determination of tax, make a sep- structions on the tax form. arate EFT remittance and file a sepa- (2) Remittances will be considered as rate tax return. made when the taxpayment by elec- (b) Requirements. (1) On or before Jan- tronic fund transfer is received by the uary 10 of each calendar year, except Treasury Account. For purposes of this for a proprietor already remitting the section, a taxpayment by electronic tax by EFT, each proprietor who was fund transfer will be considered as re- liable during the previous calendar ceived by the Treasury Account when year for a gross amount of wine excise it is paid to a Federal Reserve Bank. tax equal to or exceeding $5 million, (3) When the proprietor directs the fi- combining tax liabilities incurred nancial institution to effect an elec- under this part and parts 26 and 27 of tronic fund transfer message as re- this chapter, shall give written notice quired by paragraph (b) (2) of this sec- to the appropriate TTB officer agreeing tion, the transfer data record furnished to make remittances by EFT. to the proprietor through normal bank- (2) For each return filed in according procedures will serve as the record ance with this subpart, the proprietor of payment, and will be retained as shall direct the proprietor’s financial part of the required records. institution to make an electronic fund (d) Failure to make a taxpayment by transfer in the amount of the EFT. The proprietor is subject to a pen- taxpayment to the Treasury Account alty imposed by 26 U.S.C. 5684, 6651, and as provided in paragraph (e) of this sec- 6656, as applicable, for failure to make tion. The request will be made to the financial institution early enough for a taxpayment by EFT on or before the the transfer of funds to be made to the close of business on the prescribed last Treasury Account by no later than the day for filing. close of business on the last day for fil- (e) Procedure. Upon the notification ing the return as prescribed in § 24.271. required under paragraph (b)(1) of this The request will take into account any section, the appropriate TTB officer time limit established by the financial will issue to the proprietor a TTB Pro- institution. cedure entitled, Payment of Tax by (3) If the proprietor was liable during Electronic Fund Transfer. This publi- the preceding calendar year for less cation outlines the procedure a propri- than $5 million in wine excise taxes, etor follows when preparing returns combining tax liabilities incurred and EFT remittances in accordance under this part and parts 26 and 27 of with this subpart. The United States this chapter, the proprietor may Customs Service will provide the pro- choose either to continue remitting the prietor with instructions for preparing tax as provided in this section or to EFT remittances for payments to be remit the tax with return as prescribed made to the United States Customs

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Service for payment of excise tax on file Excise Tax Returns on a semi- imported wine. monthly or quarterly basis. (c) Other rules apply. A proprietor (Sec. 201, Pub. L. 85–859, 72 Stat. 1335, as who files on a calendar year basis amended (26 U.S.C. 5061)) under this section is subject to the fail- (Approved by the Office of Management and ure to pay or file provisions of § 24.274. Budget under control numbers 1512–0467 and 1512–0492) [T.D. TTB–89, 76 FR 3510, Jan. 20, 2011] [T.D. ATF–299, 55 FR 24989, June 19, 1990, as EFFECTIVE DATE NOTE: By T.D. TTB–89, 76 amended by T.D. ATF–409, 64 FR 13683, 13685, FR 3510, Jan. 20, 2011, § 24.273 was revised, ef- Mar. 22, 1999; T.D. ATF–459, 66 FR 38550, July fective Feb. 22, 2011 to Feb. 24, 2014. 25, 2001; T.D. ATF–479, 67 FR 30798, May 8, 2002; T.D. TTB–91, 76 FR 5478, Feb. 1, 2011] § 24.274 Failure to timely pay tax or file a return. § 24.273 Exception to filing semi- Penalties for failure to pay tax at the monthly or quarterly tax returns. time required, for willful refusal to pay (a) Eligibility for annual filing. A pro- the tax and for fraudulent nonpayment prietor may file the Excise Tax Return, of tax are provided for in 26 U.S.C. 5661 TTB F 5000.24, and remittance within 30 and 6656. In addition to these penalties, days after the end of the calendar year there is a penalty for the delinquent instead of semimonthly or quarterly as filing of a tax return, imposed as an ad- provided in § 24.271, if the proprietor dition to the tax shown on the return, has not given a bond for deferred pay- amounting to five percent for each ment of wine excise tax and if the pro- month or fraction thereof of the delin- prietor: quency, not exceeding 25 percent in the (1) Paid wine excise taxes in an aggregate, unless it is shown that the amount less than $1000 during the pre- delinquency is due to reasonable cause vious calendar year, or and not to willful neglect. (2) Is the proprietor of a newly estab- (Sec. 201, Pub. L. 85–859, 72 Stat. 1407, as lished bonded wine premises and ex- amended, 1410, as amended (26 U.S.C. 5661, pects to pay less than $1000 in wine ex- 5684, 6651, 6656)) cise taxes before the end of the calendar year. § 24.275 Prepayment of tax. (b) Loss of eligibility for annual filing. (a) General. The proprietor shall, be- (1) If before the close of the current fore removal of wine for consumption calendar year the wine excise tax owed or sale, file Excise Tax Return, TTB F will exceed the amount of the coverage 5000.24, with remittance, where: under the proprietor’s operations bond (1) Required to prepay tax under for wine removed from bonded wine § 24.276; or, premises on which tax has been deter- (2) The tax deferral bond is not in the mined but not paid, the proprietor will maximum penal sum and the tax deter- file an Excise Tax Return with the mined and unpaid at any one time ex- total remittance on the date the wine ceeds the penal sum of the bond by excise tax owed will exceed such more than the amount of such tax cov- amount and file an aggregate Excise ered by the wine operations coverage of Tax Return within 30 days after the the wine bond; or, close of the calendar year showing the (3) There is no approved tax deferral total wine tax liability for such cal- bond and the total amount of tax un- endar year. If before the close of the paid at any one time exceeds the current calendar year the wine excise amount of the wine operations cov- tax liability (including any amounts erage of the wine bond designated for paid or owed) equals $1000 or more, the wine removed from bonded wine prem- proprietor will commence semimonthly ises on which tax has been determined or quarterly filing of the wine Excise but not paid. Tax Returns and making of payments The return with remittance is for- as required by § 24.271. warded pursuant to the instructions (2) If there is a jeopardy to the rev- printed on the return. For the purpose enue, the appropriate TTB officer may of complying with this section, the at any time require the proprietor to term ‘‘forwarding’’ means deposit in

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the United States mail properly ad- order) or in the form of an electronic dressed to TTB. fund transfer. (b) Electronic fund transfer. When the (August 16, 1954, ch. 736, 68A Stat. 775, as proprietor is required by § 24.272 to de- amended, 777, as amended, 391 as amended (26 liver payment of tax by electronic fund U.S.C. 6301, 6311, 6302)) transfer, the proprietor shall prepay (Approved by the Office of Management and the tax before any wine can be removed Budget under control numbers 1512–0467 and for consumption or sale by: 1512–0492) (1) Completing the Excise Tax Return [T.D. ATF–299, 55 FR 24989, June 19, 1990, as and by mailing it, as instructed on the amended by T.D. ATF–301, 55 FR 47605, Nov. form, to TTB and 14, 1990; T.D. ATF–409, 64 FR 13683, Mar. 22, (2) Directing the proprietor’s finan- 1999] cial institution to effect an electronic fund transfer. § 24.277 Date of mailing or delivering of returns. (August 16, 1954, ch. 736, 68A Stat. 775, as (a) When the proprietor sends the Ex- amended, 777, as amended, 391, as amended cise Tax Return, TTB F 5000.24, with or (26 U.S.C. 6301, 6311, 6302)) without remittance, by United States (Approved by the Office of Management and mail, the official postmark of the Budget under control numbers 1512–0467 and United States Postal Service stamped 1512–0492) on the cover of the envelope in which [T.D. ATF–299, 55 FR 24989, June 19, 1990, as the return was mailed is considered the amended by T.D. ATF–338, 58 FR 19064, Apr. date of delivery of the tax return and, 12, 1993] if accompanied, the date of delivery of the remittance. When the postmark on § 24.276 Prepayment of tax; proprietor the cover is illegible, it is the propri- in default. etor’s responsibility to prove when the When the proprietor fails to forward postmark was made. a payment for wine excise tax due by (b) When the proprietor sends the tax return by registered mail or by cer- presentment of a check or money tified mail, the date of registry or the order, or when the proprietor is other- date of the postmark on the sender’s wise in default of payment of the tax, receipt of certified mail, as the case no wine may be removed for consump- may be, is treated at the date of deliv- tion or sale until the tax has been paid ery of the tax return and, if accom- for the period of the default and until panied, the date of delivery of the re- the appropriate TTB officer finds the mittance. revenue will not be jeopardized by the late payment of the tax. Any remit- (August 16, 1954, ch. 736, 68A Stat. 775, as amended, 777, as amended, 391, as amended tance made during the period of the de- (26 U.S.C. 6301, 6311, 6302)) fault will be in cash, or will be in the form of a certified, cashier’s, or treas- (Approved by the Office of Management and Budget under control numbers 1512–0467 and urer’s check drawn on any financial in- 1512–0492) stitution incorporated under the laws of the United States, or under the laws § 24.278 Tax credit for certain small of any State, Territory, or possession domestic producers. of the United States, or in the form of (a) General. A person who produces a money order, as provided in 27 CFR not more than 250,000 gallons of wine 70.61 (payment by check or money during the calendar year may take a credit against any tax imposed by Title 26 of the United States Code (other than Chapters 2, 21, and 22), in an amount computed in accordance with paragraph (d) of this section, on the first 100,000 gallons of wine (other than champagne and other sparkling wine) removed during that year for consumption or sale. This credit applies only to

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wine that has been produced at a quali- (iii) That producer holds title to that fied bonded wine premises in the wine at the time of its removal and United States. The small domestic provides to the transferee such infor- wine producer tax credit is available mation as is necessary to properly de- only to eligible proprietors engaged in termine the transferee’s credit under the business of producing wine. A pro- this paragraph; and prietor who has a basic permit to (iv) At the time of taxable removal, produce wine but does not produce the producer provides to the transferee, wine during a calendar year may not in writing (each retaining a copy with take the small producer wine tax credit the record of taxpaid removal from on wine removed during that calendar bond pursuant to § 24.310), the following year. A proprietor who has obtained a information: new wine producer basic permit may (A) The names of the producer and not take the small producer wine tax transferee; credit on wine removed until the pro- (B) The quantity and tax class of the prietor has produced wine. ‘‘Produc- wines to be shipped; tion’’ of wine includes those activities (C) The date of removal from bond for described in paragraph (e)(1) of this consumption or sale; section. (D) A confirmation that the producer (b) Special rules relating to eligibility is eligible for credit, with the credit for wine credit—(1) Controlled groups. rate to which the wines are entitled; For purposes of this section and § 24.279, and the term ‘‘person’’ includes a con- (E) A confirmation that the subject trolled group of corporations, as de- shipment is within the first 100,000 gal- fined in 26 U.S.C. 1563(a), except that lons of eligible wine removed by (or on the phrase ‘‘more than 50 percent’’ behalf of) the producer for the calendar must be substituted for the phrase ‘‘at year. least 80 percent’’ wherever it appears. (c) Time for determining and allowing Also, the rules for a ‘‘controlled group credit. The credit referred to in paragraph (a) of this section will be deter- of corporations’’ apply in a similar mined at the same time as the tax is fashion to groups that include partner- determined under 26 U.S.C. 5041(a), and ships and/or sole proprietorships. Pro- will be allowable at the time any tax duction and removals of all members of described in paragraph (a) of this sec- a controlled group are treated as if tion is payable. The credit allowable by they were the production and removals this section is treated as if it con- of a single taxpayer for the purpose of stitutes a reduction in the rate of the determining what credit a person may tax. use. (d) Computation of credit. The credit (2) Credit for transferees in bond. A which may be taken on the first 100,000 person other than the eligible small gallons of wine (other than champagne producer (hereafter in this paragraph and other sparkling wine) removed for referred to as the ‘‘transferee’’) may consumption or sale by an eligible per- take the credit under paragraph (a) of son during a calendar year is computed this section that would be allowed to as follows: that producer if the wine removed by (1) For persons who produce 150,000 the transferee had been removed by the gallons or less of wine during the cal- producer on that date, under the fol- endar year, the credit is $0.90 per gal- lowing conditions: lon for wine ($0.056 for hard cider); (i) Wine produced by any person (2) For persons who produce more would be eligible for any credit under than 150,000 gallons but not more than this section if removed by that person 250,000 gallons during the calendar during the calendar year; year, the credit is reduced by 1 percent (ii) Wine produced by that person is for every 1,000 gallons produced in ex- removed during that calendar year by cess of 150,000 gallons. For example, the the transferee to whom that wine was credit that would be taken by a person transferred in bond and who is liable who produced 160,500 gallons of wine for the tax imposed by 26 U.S.C. 5041 and hard cider during a calendar year with respect to that wine; would be reduced by 10 percent, for a

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net credit against the tax of $0.81 per credit rate, and the total credit taken gallon for wine or $0.0504 for hard cider, on behalf of each producer during the as long as the wine or hard cider was tax return period. among the first 100,000 gallons removed (g) Denial of deduction. Pursuant to 26 for consumption or sale during the cal- U.S.C. 5041(c)(5), any deduction under endar year. 26 U.S.C. subtitle A with respect to any (e) Definitions—(1) Production. For tax against which the credit is allowed purposes of determining if a person’s under paragraph (a) of this section production of wine is within the 250,000 must only be for the amount of the tax gallon limit, production includes, in as reduced by the credit. addition to wine produced by fermenta- (h) Exception to credit. The appro- tion, any increase in the volume of priate TTB officer will deny any tax wine due to the winery operations of credit taken under paragraph (a) of amelioration, wine spirits addition, this section where it is determined sweetening, or production of formula that the allowance of the credit would wine. Production of champagne and benefit a person who would otherwise other sparkling wines is included for fail to qualify for the use of the credit. purposes of determining whether total (26 U.S.C. 5041(c).) production of a winery exceeds 250,000 gallons. Production includes all wine (Approved by the Office of Management and produced at qualified bonded wine Budget under control number 1513–0104) premises within the United States and [T.D. TTB–64, 72 FR 65454, Nov. 21, 2007] wine produced outside the United States by the same person. § 24.279 Tax adjustments related to (2) Removals. For purposes of deter- wine credit. mining if a person’s removals are with- (a) Increasing adjustments. Persons in the 100,000 gallon limit, removals in- who produce more wine than the clude wine that the person removed amount used in computation of the from all qualified bonded wine prem- credit, or who lose eligibility by not ises within the United States. Wine re- producing during a calendar year, must moved by a transferee in bond under make increasing tax adjustments. paragraph (b)(2) of this section must be Where an increasing adjustment to a counted against the 100,000 gallon limit person’s tax return is necessary as a re- of the small producer who owns that sult of an incorrect credit rate claimed wine, and not against the limit of the pursuant to § 24.278, that person must transferee in bond if the transferee is make the adjustment on the Excise also a small producer. Champagne and Tax Return, TTB F 5000.24, no later other sparkling wines, which are not than the return period in which pro- eligible for credit, do not count as reduction (or the production of the con- movals against the 100,000 gallon limit. trolled group of which the person is a (f) Preparation of tax return. A person member) exceeds the amount used in who is eligible for the credit must show computation of the credit. If the ad- the amount of wine tax before credit on justment is due to failure to produce, the Excise Tax Return, TTB F 5000.24, the person must make the adjustment and must enter the quantity of wine no later than the last return period of subject to the credit and the applicable the calendar year. The adjustment is credit rate as the explanation for an the difference between the credit taken adjusting entry in Schedule B of the re- for prior return periods in that year turn for each tax period. Where a per- and the appropriate credit for those re- son does not use the credit authorized turn periods. The person must make by this section to directly reduce the tax adjustments for all bonded wine rate of Federal excise tax on wine, that premises where excess credits were person must report on TTB F 5000.24 taken against tax that year, and must where the credit will be, or has been, include interest payable. In the case of applied. Where a transferee in bond a person who continued to deduct cred- takes credit on behalf of one or more it after reaching the 100,000 gallon small producers, the transferee must maximum during the calendar year, show in Schedule B of the return the that person must make an adjustment name of each producer, each producer’s in the full amount of excess credit

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taken and must include interest pay- TRANSFER OF WINE IN BOND able under 26 U.S.C. 6601 from the date on which the excess credit was taken. § 24.280 General. In addition, the person must include Wine may be removed for transfer in the penalty payable under 26 U.S.C. bond, from one bonded wine premises 6662 if the appropriate TTB officer de- to another bonded wine premises or to termines that the underpayment was a distilled spirits plant. For bulk wine due to negligence or disregard of rules transferred in bond between adjacent or regulations and advises the person or contiguous bonded wine premises or to include the penalty as part of the to an adjacent or contiguous distilled adjustment. The appropriate TTB offi- spirits plant, an accurately calibrated cer will provide information, when re- tank for measuring the wine is requested, regarding interest rates appli- quired on at least one of the premises. The volume of wine transferred will be cable to specific time periods and re- recorded to the nearest whole gallon, garding any applicable penalties. In the five-tenths gallon being converted to case of a controlled group of bonded the next full gallon. wine premises that took excess credits, all member proprietors who took incor- (Sec. 201, Pub. L. 85–859, 72 Stat. 1380, as rect credits must make tax adjust- amended (26 U.S.C. 5362)) ments as determined in this section. In § 24.281 Consignor premises. the case of a small producer who instructed a transferee in bond to take Prior to transferring wine in bond, credit as authorized by § 24.278(b)(2), the proprietor shall prepare a transfer and subsequently determines that the record prescribed by § 24.309. Except for multiple transfers as provided in credit was less or not applicable, that § 24.282, a transfer record will be pre- producer must immediately inform the pared for each shipment. On comple- transferee in bond, in writing, of the tion of lading (or completion of trans- correct credit information. The transfer by pipeline), the proprietor shall re- feree must make any increasing adjust- tain one copy of the transfer record for ment on its next tax return based on the files and forward the original to revised credit information given by the the consignee (by the close of the next producer or a TTB officer. business day). (b) Decreasing adjustments. Where a person fails to deduct the credit or de- (Sec. 201, Pub. L. 85–859, 72 Stat. 1380, as amended (26 U.S.C. 5362) ducts less than the appropriate credit provided for by § 24.278 during the cal- (Approved by the Office of Management and endar year, the person may file a claim Budget under control number 1512–0298) for refund of excess tax paid. The claim [T.D. ATF–299, 55 FR 24989, June 19, 1990, as must be filed in accordance with § 24.69. amended by T.D. ATF–312, 56 FR 31082, July In the case of wine removed on behalf 9, 1991] of a small producer by a transferee in § 24.282 Multiple transfers. bond, if the transferee in bond was in- (a) Truck. The proprietor may use one structed to deduct credit and failed to transfer record for all wine shipped by deduct credit or deducted less than the truck on the same day to other prem- appropriate credit and was later reim- ises. The proprietor shall prepare a bursed for the tax by that producer, the shipment or delivery order for each transferee may file the claim. The pro- shipment showing date of transfer, visions of 26 U.S.C. 6423 and 27 CFR name and address of the proprietor and part 70, subpart F, will apply, and the consignee, number of cases or con- producer and transferee in bond must tainers, serial numbers of cases (if any) show that the conditions of § 24.278(b)(2) or container identification marks, and were met. quantity shipped in gallons or liters. A (26 U.S.C. 5041(c)) copy of the shipping or delivery order will be retained by the proprietor and a (Approved by the Office of Management and copy sent with the shipment. On com- Budget under control number 1513–0088) pletion of lading the last truck for the [T.D. TTB–64, 72 FR 65455, Nov. 21, 2007] day, the proprietor shall prepare and

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process a transfer record as provided in REMOVALS WITHOUT PAYMENT OF TAX § 24.281. (b) Pipeline. The proprietor may use § 24.290 Removal of wine as distilling one transfer record for all wine (includ- material. ing distilling material and vinegar (a) General. Still wine may be re- stock) transferred by pipeline to adja- moved without payment of tax to the cent premises during a month. At the production facilities of a distilled spir- end of the month, the proprietor shall its plant for use as distilling material. prepare and process a transfer record The volume of distilling material may as provided in § 24.281. be determined at either the bonded wine premises or the distilled spirits (Sec. 201, Pub. L. 85–859, 72 Stat. 1380, as plant. amended (26 U.S.C 5362)) (b) Special natural wine. Unmarket- (Approved by the Office of Management and able special natural wine may be re- Budget under control number 1512–0298) moved to a distilled spirits plant for use as distilling material in the pro- § 24.283 Reconsignment. duction of wine spirits (but not bran- Prior to or on arrival at the premises dy). Where sugar has been used in the of a consignee, wine transferred in production of special natural wine, the bond may be reconsigned by the con- wine may not be removed for use as signor. The bond of the proprietor to distilling material if the unfermented whom the wine is reconsigned will sugars therein have been fermented cover the wine while in transit after re- prior to the removal. If wine spirits consignment. Notice of cancellation of produced from special natural wine the shipment will be made to the other contain any flavor characteristics of proprietors involved by the proprietor the special natural wine, the wine spir- who reconsigned the wine. Where re- its may be used only in the production consignment is to other than the ship- of a special natural wine. ping proprietor, a new transfer record (Sec. 201, Pub. L. 85–859, 72 Stat. 1380, as prominently marked ‘‘Reconsignment’’ amended, 1382, as amended, 1395, as amended will be prepared and processed as pro- (26 U.S.C. 5362, 5373, 5552)) vided by § 24.281. § 24.291 Removal of wine for vinegar (Sec. 201, Pub. L. 85–859, 72 Stat. 1380, as production. amended (26 U.S.C 5362)) (a) General. Still wine may be re- (Approved by the Office of Management and moved from bonded wine premises, Budget under control number 1512–0298) without payment of tax, for use in the manufacture of vinegar. Where the pro- § 24.284 Consignee premises. prietor is also the proprietor of a vin- When wine is received by transfer in egar plant located adjacent or contig- bond, the consignee shall check the uous to the bonded wine premises, wine shipment against the transfer record may be removed without payment of and determine by volumetric measure tax upon filing a consent of surety ex- or weight the quantity received. The tending the terms of the wine bond to date received and, if different from the cover the removal and use of wine in quantity shipped, the quantity received the manufacture of vinegar. Where the will be recorded on the transfer record. proprietor of a vinegar plant is not the See § 24.267 for provisions applicable to proprietor of an adjacent or contiguous losses in transit. Sealed containers or bonded wine premises, the proprietor of cases received without apparent loss the vinegar plant may receive wine, need not be measured or weighed. The without payment of tax, for use in the consignee will retain the original of manufacture of vinegar by filing a bond the transfer record and any accom- under the provisions of § 24.146(c) to panying documents. cover the removal to and use of wine at the vinegar plant. (Sec. 201, Pub. L. 85–859, 72 Stat. 1380, as (b) Vinegar plant records. Each propri- amended (26 U.S.C. 5362)) etor of a vinegar plant to which wine is (Approved by the Office of Management and shipped, without payment of tax, for Budget under control number 1512–0298) use in the manufacture of vinegar shall

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keep a record of all wine received and will be in accordance with the proce- used for the manufacture of vinegar dures in part 28 of this chapter. and of all vinegar produced and dis- (b) Return of wine to bonded storage. posed of. The record will show the fol- Wines which have been lawfully with- lowing information: drawn, without payment of tax, under (1) The volume and alcohol content of the provisions of part 28 of this chapter all wine received, the date of receipt, may be returned to bonded wine prem- and the name, registry number, and ad- ises from which withdrawn for storage dress of the bonded wine premises from pending subsequent removal for lawful which received; purposes. On return of wine to bonded (2) The volume and alcohol content of wine premises, the proprietor shall all wine used in the manufacture of record the receipt showing the vinegar, and the date of use; gallonage of each tax class received (3) The volume and grain strength of and returned to storage on bonded wine the vinegar produced, and the date of premises and shall report the return on production. (This volume will be re- the TTB F 5120.17, Report of Bonded ported on a 100-grain strength basis and Wine Premises Operations for the re- will be determined by multiplying the porting period with an explanatory no- wine gallons of vinegar produced by the tation. All provisions of this part appli- grain strength thereof and dividing the cable to wine in bond at bonded wine result by 100); and premises and to removals from bond (4) The names and addresses of all are applicable to returned wine. persons to whom vinegar is shipped, (Sec. 201, Pub. L. 85–859, 72 Stat. 1380, as the volume and grain strength shipped amended (26 U.S.C. 5362)) to each, and the date of shipment. (Grain strength is a measure of the (Approved by the Office of Management and acetic acid content of vinegar, ex- Budget under control numbers 1512–0216 and 1512–0298) pressed as 10 times the grams of acetic acid per 100 mL). [T.D. ATF–299, 55 FR 24989, June 19, 1990, as (c) Inspection of vinegar plants. The amended by T.D. ATF–338, 58 FR 19065, Apr. proprietor of a vinegar plant receiving 12, 1993; T.D. TTB–8, 69 FR 3830, Jan. 27, 2004] wine, without payment of tax, for use § 24.293 Wine for Government use. in the manufacture of vinegar shall make the premises and records avail- (a) General. Wine may be removed able for inspection by appropriate TTB from bonded wine premises, free of tax, officers during regular business hours. for use of the Government of the United States, or any agency thereof, (August 16, 1954, ch. 736, 68A Stat. 903, as upon receipt of a proper Government amended (26 U.S.C. 7606); Sec. 201, Pub. L. 85– order signed by the officer in charge of 859, 72 Stat. 1380, as amended (26 U.S.C. 5362)) the department, institution, station, or (Approved by the Office of Management and similar establishment, to which the Budget under control numbers 1512–0058, wine is to be shipped or other officer 1512–0292 and 1512–0298) duly authorized to sign the order. The [T.D. ATF–299, 55 FR 24989, June 19, 1990, as governmental order will show the kind, amended by T.D. ATF–409, 64 FR 13684, Mar. quantity and alcohol content of the 22, 1999] wine desired; and the purpose for which the wine is to be used. Wine may also § 24.292 Exported wine. be removed for use by the governments (a) General. Wine may be removed of the several states and the District of from a bonded wine premises without Columbia, or of any subdivision there- payment of tax for exportation, for use of, or by any agency of the govern- on vessels and aircraft, for transpor- ments, free of tax, from bonded wine tation to and deposit in a ‘‘Class 6’’ premises for analysis, testing, research manufacturing bonded warehouse, for or experimentation. transfer to and deposit in a customs (b) Bill of lading and report of ship- bonded warehouse, and for transfer to ment. Where wine is shipped by com- and deposit in a foreign-trade zone for mon carrier, the proprietor shall retain exportation or for storage pending ex- a copy of the bill of lading, covering portation. Removals of wine for export the shipment, with the TTB F 5120.17,

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Report of Bonded Wine Premises Oper- excluding any dilution by water or ations for the reporting period in which other substance. the shipment is made. The bill of lad- (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as ing will show the name and address of amended (26 U.S.C. 5367, 5370)) the agency to which the wine is shipped, identifying marks on con- (Approved by the Office of Management and tainers or cases, and alcohol content of Budget under control numbers 1512–0216 and 1512–0298) the wine. The governmental order, or a copy of the order, will be filed at the [T.D. ATF–299, 55 FR 24989, June 19, 1990, as bonded wine premises available for in- amended by T.D. ATF–338, 58 FR 19065, Apr. spection by appropriate TTB officers. 12, 1993; T.D. ATF–409, 64 FR 13686, Mar. 22, 1999] (Sec. 201, Pub. L. 85–859, 72 Stat. 1380, as amended, 1381, as amended (26 U.S.C. 5362, RETURN OF UNMERCHANTABLE WINE TO 5367, 7510)) BOND (Approved by the Office of Management and Budget under control numbers 1512–0216 and § 24.295 Return of unmerchantable 1512–0298) wine to bond. [T.D. ATF–299, 55 FR 24989, June 19, 1990, as (a) General. Wine produced in the amended by T.D. ATF–312, 56 FR 31082, July United States which has been taxpaid, 9, 1991; T.D. ATF–338, 58 FR 19065, Apr. 12, removed from bonded wine premises, 1993; T.D. ATF–409, 64 FR 13684, Mar. 22, 1999] and subsequently determined to be unmerchantable may be returned to § 24.294 Destruction of wine. bonded wine premises for recondi- (a) General. Wine on bonded wine tioning, reformulation or destruction. premises may be destroyed on or off The tax paid on United States wine wine premises by the proprietor with- may, when such wine is returned to out payment of tax. A proprietor who bond, be refunded or credited, without wants to destroy wine on or off wine interest, to the proprietor of the bond- premises must file with the appropriate ed wine premises to which such wine is TTB officer an application stating the delivered. However, no tax paid on any kind, alcohol content, and approximate United States wine for which a claim volume of wine to be destroyed, where has been or will be made under the pro- the wine is to be destroyed, and the visions of 27 CFR part 70, subpart G reason for destruction. Wine to be de- will be refunded or credited. If the tax stroyed must be inspected, and the de- on the United States wine has been destruction supervised, by an appropriate termined but not paid, the person lia- TTB officer unless the appropriate TTB ble for the tax may, when such wine is officer authorizes the proprietor to de- returned to bond, be relieved of the li- stroy the wine without inspection and ability. Claims for refund or credit, or supervision. The wine must not be de- relief from tax paid or determined on stroyed until the proprietor has re- United States wine returned to bond ceived authority from the appropriate are filed in accordance with § 24.66. TTB officer. (b) Receipt. The quantity of (b) Record of destruction. The propri- unmerchantable taxpaid United States etor shall maintain a record of the vol- wine returned to bond is determined ume destroyed and include the quan- upon receipt on bonded wine premises. tity on the TTB F 5120.17, Report of The quantity determined will be en- Bonded Wine Premises Operations. If tered on the TTB F 5120.17, Report of part of the volume of the material de- Bonded Wine Premises Operations for stroyed is not wine, the volume de- the reporting period during which the stroyed will be reported on the basis of United States wine is returned. actual wine content of the material, (c) Records. The proprietor shall maintain records covering each lot of

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unmerchantable taxpaid wine returned premises is prohibited. Taxpaid wine of to bond in accordance with § 24.312. different national origins, but of the same kind and tax class, may only be (Sec. 201, Pub. L. 85–859, 72 Stat. 1332, as amended, 1382, as amended (26 U.S.C. 5044, blended on taxpaid wine premises. (Sec. 5371)) 201, Pub. L. 85–859, 72 Stat. 1407 (26 U.S.C. 5352, 5661)) (Approved by the Office of Management and Budget under control numbers 1512–0216, [T.D. ATF–299, 55 FR 24989, June 19, 1990, as 1512–0298 and 1512–0492) amended by T.D. ATF–409, 64 FR 13683, Mar. [T.D. ATF–299, 55 FR 24989, June 19, 1990, as 22, 1999] amended by T.D. ATF–312, 56 FR 31082, July 9, 1991; T.D. ATF–338, 58 FR 19065, Apr. 12, Subpart O—Records and Reports 1993; T.D. ATF–344, 58 FR 40354, July 28, 1993; T.D. ATF–376, 61 FR 31030, June 19, 1996] § 24.300 General.

TAXPAID WINE OPERATIONS (a) Records and reports. A proprietor who conducts wine operations shall § 24.296 Taxpaid wine operations. maintain wine transaction records and (a) General. The proprietor may con- submit reports as required by this part. duct taxpaid wine operations author- Transaction records may be recorded in ized by § 24.102 in an area designated as wine gallons or in liters. However, re- a taxpaid wine premises at a bonded quired reports will show wine volumes wine premises or at a taxpaid wine bot- in wine gallons. The equivalent wine tling house. Taxpaid foreign wine may gallons of wine bottled or packed and be received on the taxpaid wine prem- labeled according to metric measure ises for reconditioning and removal will be determined using the following without retaxpayment or for destruc- conversion factors: tion without credit of tax. Any taxpaid (1) Per case. Equivalent gallonage wine operations will be separate from may be determined using the following all nontaxpaid wine operations and conversion factors for cases of metric taxpaid wine will be clearly identified bottles: as provided in § 24.135. The appropriate Equiva- TTB officer may require any additional Bottles per case Net content each bottle lent segregation and identification of tax- gallonage paid wine operations as deemed nec- 120 50 mL...... 1.58502 essary to protect the revenue. 60 100 mL...... 1.58502 (b) Treatment and blending. Taxpaid 48 187 mL...... 2.37119 wine may be treated with sulfur diox- 24 375 mL...... 2.37753 ide compounds, refrigeration or pas- 12 750 mL...... 2.37753 12 1 liter...... 3.17004 teurization and may also be preserved, 6 1.5 liter...... 2.37753 filtered or clarified by the use of meth- 4 3 liter...... 3.17004 ods or materials which will not change the basic character of the wine. Water (2) Per liter. Equivalent gallonage may not be added to taxpaid wine. The may be determined by multiplying proprietor who desires to treat wine in total liters by a conversion factor of any manner (other than by simple fil- 0.26417 gallons per liter. tration or the use of sulfur compounds, (b) Time of making entries. Any oper- refrigeration or pasteurization) shall ation or transaction is to be entered in first file with the appropriate TTB offi- records or commercial papers at the cer an application giving the details of time the operation or transaction oc- the proposed treatment. The proprietor curs, except that where records are may not use the treatment prior to ap- posted from source records or from sup- proval. The proprietor may incur civil plemental auxiliary records prepared or criminal liability for using an unau- at the time the operation or trans- thorized treatment of untaxpaid wine. action occurs, entries in another record Wine of the same kind (class and type), may be deferred to not later than the national origin and tax class may only close of business of the third business be mixed to facilitate handling at a day succeeding the day on which the taxpaid wine bottling house; otherwise, operation or transaction occurs. The the blending of taxpaid wine on such proprietor shall retain all source

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records and all supplemental or auxil- duced under this section, the repro- iary records which support entries in duced records will be preserved in con- other records or commercial papers in veniently accessible files, and provi- order to facilitate verification of oper- sions will be made for examining, view- ations by appropriate TTB officers. ing and using the reproduced record Source records and supplemental or the same as if it were the original auxiliary records may be used as a record, and it will be treated and con- record of an operation or transaction sidered for all purposes as though it and to prepare the TTB F 5120.17, Re- were the original record. All provisions port of Bonded Wine Premises Oper- of law and regulations applicable to the ations, provided the record will readily original are applicable to the repro- allow for verification of an operation duced record. As used in this para- or transaction by appropriate TTB offi- graph, ‘‘original record’’ means the cers. record required to be maintained or (c) Prescribed forms. All reports re- preserved by the proprietor, even quired by this part must be submitted though it may be an executed duplicate on forms prescribed by § 24.20. Entries or other copy of the document. will be made as indicated by the head- (g) TTB F 5120.17, Report of Bonded ings of the columns and lines, and as Wine Premises Operations. A proprietor required by the instructions for the who conducts bonded wine premises op- form. Report forms are furnished free erations must complete and submit of cost. TTB F 5120.17 in accordance with the (d) Period of retention. All prescribed instructions on the form. returns, reports and records (including (1) Monthly report. The proprietor source records) will be retained by the proprietor for a period of not less than must submit TTB F 5120.17 on a month- three years from the record date or the ly basis, except as otherwise provided date of the last entry required to be in paragraph (g)(2) or (g)(3) of this sec- made in the record, whichever is later. tion. However, the appropriate TTB officer (2) Quarterly or annual report. —(i) may require records to be kept an addi- General. A proprietor may file a com- tional period not exceeding three years pleted TTB F 5120.17 on a quarterly or in any case where retention is deter- annual basis if the proprietor meets mined to be necessary. the criteria in paragraph (g)(2)(ii) or (e) Data processing. (1) Notwith- (g)(2)(iii) of this section. To begin the standing any other provision of this quarterly or annual filing of a report of section, data maintained on data proc- bonded wine premises operations, a essing equipment may be kept at a lo- proprietor must state the intent to do cation other than the wine premises if so in the ‘‘Remarks’’ section when fil- the original operation or transaction ing the prior month’s TTB F 5120.17. A source records required by this subpart proprietor who is commencing oper- are kept available for inspection at the ations during a calendar year and ex- wine premises. pects to meet these criteria may use a (2) Data which has been accumulated letter notice to the appropriate TTB on cards, tapes, discs, or other accepted officer and file TTB F 5120.17 quarterly recording media will be retrievable or annually for the remaining portion within five business days. of the calendar year. If a proprietor be- (3) The applicable data processing comes ineligible for quarterly or an- program will be made available for ex- nual filing by exceeding the applicable amination if requested by an appro- tax liability or activity limit, the propriate TTB officer. prietor must file TTB F 5120.17 for that (f) Photographic copies of records. The month and for all subsequent months proprietor may record, copy, or repro- of the calendar year. If there is jeop- duce records required by this part and ardy to the revenue, the appropriate may use any process which accurately TTB officer may at any time require reproduces the original record and any proprietor otherwise eligible for which forms a durable medium for re- quarterly or annual filing of a report of producing and preserving the original bonded wine premises operations to file record. Whenever records are repro- such report monthly.

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(ii) Eligibility for quarterly report fil- ation occurs, a TTB F 5120.17 will not ing. In order to be eligible to file TTB be filed. F 5120.17 on a quarterly basis, the pro- (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as prietor must be filing quarterly tax re- amended (26 U.S.C. 5367, 5555)) turns under § 24.271, and the proprietor must not expect the sum of the bulk (Approved by the Office of Management and and bottled wine to be accounted for in Budget under control numbers 1512–0216 and 1512–0298) all tax classes to exceed 60,000 gallons for any one quarter during the calendar [T.D. ATF–299, 55 FR 24989, June 19, 1990, as year when adding up the bulk and bot- amended by T.D. ATF–338, 58 FR 19065, Apr. tled wine on hand at the beginning of 12, 1993; T.D. ATF–409, 64 FR 13683, 13684 and the month, bulk wine produced by fer- 13686, Mar. 22, 1999; T.D. TTB–41, 71 FR 5603, Feb. 2, 2006; T.D. TTB–89, 76 FR 3511, Jan. 20, mentation, sweetening, blending, ame- 2011] lioration or addition of wine spirits, bulk wine bottled, bulk and bottled EFFECTIVE DATE NOTE: By T.D. TTB–89, 76 wine received in bond, taxpaid wine re- FR 3511, Jan. 20, 2011, § 24.300 was amended by revising paragraph (g), effective Feb. 22, 2011 turned to bond, bottled wine dumped to to Feb. 24, 2014. bulk, inventory gains, and any activity written in the untitled lines of the re- § 24.301 Bulk still wine record. port form which increases the amount A proprietor who produces or re- of wine to be accounted for. ceives still wine in bond, (including (iii) Eligibility for annual report filing. wine intended for use as distilling ma- In order to be eligible to file TTB F terial or vinegar stock to which water 5120.17 on an annual basis, the propri- has not yet been added) shall maintain etor must be filing annual tax returns records of transactions for bulk still under § 24.273, and the proprietor must wine. Records will be maintained for not expect the sum of the bulk and bot- each tax class of still wine including tled wine to be accounted for in all tax the date the transaction occurred. The classes to exceed 20,000 gallons for any bulk still wine record will contain the one month during the calendar year following: when adding up the bulk and bottled (a) The volume produced by fer- wine on hand at the beginning of the mentation in wine gallons determined month, bulk wine produced by fer- by actual measurement; mentation, sweetening, blending, ame- (b) The volume received, shipped tax- lioration or addition of wine spirits, paid, removed (e.g., taxpaid, in bond, bulk wine bottled, bulk and bottled export, family use, samples) and used wine received in bond, taxpaid wine re- in sparkling wine production; if a tax turned to bond, bottled wine dumped to credit under 26 U.S.C. 5041(c) may be bulk, inventory gains, and any activity claimed, the record will be maintained written in the untitled lines of the re- in sufficient detail to insure that such port form which increases the amount a tax credit is properly claimed; of wine to be accounted for. (c) The specific type of production (3) A proprietor No reportable activity. method used, e.g., natural fermenta- who files a monthly TTB F 5120.17 and tion, amelioration, sweetening, addi- does not expect an inventory change or tion of spirits, blending; any reportable operations to be con- (d) The volume of wine used and pro- ducted in a subsequent month or duced by amelioration, addition of months may attach to the filed TTB F spirits or sweetening, as determined by 5120.17 a statement that, until a change measurements of the wine before and in the inventory or a reportable oper- after production. (e) The volume of wine used for and produced by blending, if wines of different tax classes are blended together; (f) The volume of wine used to produce formula wine, vinegar stock and distilling material;

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(g) The volume of wine removed to (f) The quantity of any finishing dos- fermenters for refermentation or re- age used (See § 24.192); moved directly to the production fa- (g) The volume of finished sparkling cilities of a distilled spirits plant or wine or artificially carbonated wine vinegar plant; bottled or packed (amount produced); (h) Where a process authorized under (h) The quantity of each item used in § 24.248 is employed, records will be the production of dosages, e.g., wine, maintained to allow for verification of sugar, spirits; any limitation specified for the process (i) An explanation of any unusual employed and to ensure that the use of transaction. (Sec. 201, Pub. L. 85–859, 72 the process is consistent with good Stat. 1381, as amended (26 U.S.C. 5367)); commercial practice; and (i) Where a treating material is dissolved or dispersed in water as author- (j) If the proprietor is an importer of ized in this part, the volume of water wine to which the provisions of § 27.140 added to the wine; of this chapter apply, any certification (j) An explanation of any unusual or other records required at the time of transaction. (Sec. 201, Pub. L. 85–859, 72 release from customs custody under Stat. 1381, as amended (26 U.S.C. 5367)); that section. and (Approved by the Office of Management and (k) If the proprietor is an importer of Budget under control number 1512–0298) wine to which the provisions of § 27.140 of this chapter apply, any certification [T.D. ATF–299, 55 FR 24989, June 19, 1990, as or other records required at the time of amended by T.D. ATF–312, 56 FR 31082, July 9, 1991; T.D. TTB–31, 70 FR 49483, Aug. 24, release from customs custody under 2005] that section. (Approved by the Office of Management and § 24.303 Formula wine record. Budget under control number 1512–0298) A proprietor who produces beverage [T.D. ATF–299, 55 FR 24989, June 19, 1990, as formula wine shall maintain records amended by T.D. ATF–307, 55 FR 52738, Dec. showing by transaction date the details 21, 1990; T.D. ATF–312, 56 FR 31082, July 9, of production. The formula wine record 1991; T.D. TTB–31, 70 FR 49483, Aug. 24, 2005] will contain the following: § 24.302 Effervescent wine record. (a) A number for each lot produced; (b) The approved formula number for A proprietor who produces or re- each lot; ceives sparkling wine or artificially carbonated wine in bond shall maintain (c) The volume of wine used in the records showing the transaction date production; and details of production, receipt, stor- (d) The volume produced and the gain age, removal, and any loss incurred. or loss resulting from the production of Records will be maintained for each each lot as determined by comparing specific process used (bulk or bottle the volume finished with the volume fermented, artificially carbonated) and used (report the total loss or gain on by the specific kind of wine, e.g., grape, the TTB F 5120.17 for the period in pear, cherry. The record will contain question); the following: (e) An explanation of any unusual (a) The volume of still wine filled loss or gain; into bottles or pressurized tanks prior (f) The production of essences show- to secondary fermentation or prior to ing the formula number, quantities of the addition of carbon dioxide; spirits and herbs used, and the amount (b) The quantity of any first dosage produced; used; (g) The quantity of essences pur- (c) Any in-process bottling losses, chased, and the use, transfer or other e.g., refilling, spillage, breakage; disposition of essences produced or pur- (d) The volume of bottle fermented chased; and sparkling wine in process, transferred and received; (e) The volume returned to still wine;

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(h) A record of the receipt and use or (b) Supporting records. The ameliora- other disposition of all herbs, aro- tion record will show the basis for en- matics, essences, extracts, or other fla- tries and calculations, including deter- voring materials used in the produc- mination of the natural fixed acid level tion of formula wine. and total solids content of juice, as ap- (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as plicable. The records are maintained amended (26 U.S.C. 5367)) on the basis of annual accounting periods, with each period commencing on (Approved by the Office of Management and Budget under control numbers 1512–0059, July 1 of a year and ending on the fol- 1512–0216 and 1512–0298) lowing June 30, except the record for an accounting period may be continued [T.D. ATF–299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF–338, 58 FR 19065, Apr. after June 30, where the juice or wine 12, 1993] included therein is to be held after that date for completion. When the amelio- § 24.304 Chaptalization (Brix adjust- ration of wine included in the record ment) and amelioration record. for one accounting period is complete, (a) General. A proprietor who the record is closed and any unused chaptalizes juice or ameliorates juice ameliorating material may not be or wine, or both, shall maintain a used. The proprietor may mix wines be- record of the operation and the trans- fore amelioration of the wine is com- action date. Records will be main- pleted; however, the proprietor shall tained for each kind of wine produced additionally maintain records nec- (grape, apple, strawberry, etc.). No essary to establish the quantity of un- form of record is prescribed, but the used authorized material to which the record maintained will contain the in- resultant mixture would be entitled so formation necessary to enable appro- that appropriate TTB officers may priate TTB officers to readily deter- readily ascertain compliance with ame- mine compliance with chaptalization lioration limitations. and amelioration limitations. All quantities will be recorded in wine gal- (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as lons, and, where sugar is used, the amended 1385, as amended (26 U.S.C. 5367, quantity will be determined either by 5384)) measuring the increase in volume or, (Approved by the Office of Management and for pure dry sugar by considering that Budget under control number 1512–0298) each 13.5 pounds results in a volu- [T.D. ATF–299, 55 FR 24989, June 19, 1990, as metric increase of one gallon. If grape amended by T.D. ATF–312, 56 FR 31082, July juice is chaptalized and subsequently 9, 1991; T.D. ATF–409, 64 FR 13684, Mar. 22, this juice or wine is ameliorated, the 1999] quantity of pure dry sugar added to juice will be included as ameliorating § 24.305 Sweetening record. material. If fruit juice other than grape A proprietor who sweetens natural is chaptalized and this juice or wine is wine with sugar or juice ameliorated, the quantity of pure dry (unconcentrated or concentrated) sugar added for chaptalization is not under the provisions of this part shall considered ameliorating material; how- maintain a record of sweetening by ever, if liquid sugar or invert sugar transaction date. The record will con- syrup is used, the quantity of water in tain the following: such sugar is included as ameliorating material. The record will include the (a) The gallons and degrees Brix of following: the wine before sweetening; (1) The volume of juice (exclusive of (b) If concentrate is used, the degrees pulp) deposited in fermenters; Brix of the concentrate; (2) The maximum volume of amelio- (c) If sugar or juice, or both, are used, rating material to which the juice is the gallon equivalent that would be re- entitled, as provided in § 24.178; quired to sweeten the volume of wine (3) The volume of ameliorating or to its maximum authorized total solids chaptalizing material used; and content; (4) The volume of material author- (d) The quantity of sugar or juice ized but not yet used. used for sweetening; and

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(e) The gallons and degrees Brix of beverage wine or wine product pro- the wine produced by sweetening. duced; (d) The volume, percent alcohol by (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as amended (26 U.S.C. 5367)) volume, and formula number, if applicable, of the nonbeverage wine or wine (Approved by the Office of Management and products received; Budget under control number 1512–0298) (e) The volume, percent alcohol by volume, and formula number, if appli- § 24.306 Distilling material or vinegar stock record. cable, of the nonbeverage wine or wine products removed; A proprietor who produces or re- (f) The name and address of the per- ceives wine containing excess water son to whom removed; however, on any which will be used expressly as dis- individual sale of less than 80 liters the tilling material or vinegar stock shall name and address of the purchaser need maintain a record by transaction date not be recorded; and showing the amount and kind pro- (g) In the case of vinegar production, duced, received, from whom received, the acetic acid and ethyl alcohol con- removed, and to whom sent. The pro- tent of the vinegar. prietor shall keep a record of each type of material from which the distilling When the proprietor sends nonbeverage material or vinegar stock was fer- wine or wine products free of tax to an mented (e.g., grape, apple, strawberry). adjacent or contiguous premises oper- The volume of distilling material or ated by the proprietor, records required vinegar stock produced, including wine by paragraphs (e) and (g) of this section lees refermented for use as distilling will be maintained at each location. material, will be recorded upon re- (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as moval from fermenting tanks. How- amended (26 U.S.C. 5367)) ever, the provisions of this section do (Approved by the Office of Management and not apply to standard wine or Budget under control number 1512–0298) unwatered wine lees recorded on the proprietor’s record of bulk still wine § 24.308 Bottled or packed wine and removed for use as distilling mate- record. rial or vinegar stock. A proprietor who bottles, packs, or (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as receives bottled or packed beverage amended (26 U.S.C. 5367)) wine in bond shall maintain a record, by tax class, as follows: (Approved by the Office of Management and (a) The date, kind of wine, the num- Budget under control number 1512–0298) ber and size of bottle or other con- [T.D. ATF–299, 55 FR 24989, June 19, 1990, as tainer filled (if not available in another amended by T.D. ATF–312, 56 FR 31083, July record), and volume of wine bottled or 9, 1991] packed, received in bond, returned to bond, and removed, e.g., taxpaid re- § 24.307 Nonbeverage wine record. movals, in bond removals, dumped to A proprietor who produces nonbev- bulk or destroyed, breakage, used for erage wine or wine products shall tasting. The volume recorded as bot- maintain a record by transaction date tled for bottle fermented sparkling of such wine produced, received and wine is determined after the disgorging withdrawn as follows: and refilling process. (a) The kind, volume, and percent al- (b) The label used on bottles or other cohol by volume of wine or wine prod- containers will be shown in the record ucts made from wine, which was ren- by using the ‘‘Applicant’s Serial No.’’ dered unfit for beverage use; which appears as item 2 on the label (b) The kind and quantity of mate- approval form, TTB F 5100.31 or a simi- rials received and used to render wine, lar system which will allow for or wine products made from wine, unfit verification of labels used on bottles or for beverage use; containers. (c) The name, volume, percent alco- (c) The fill tests and alcohol tests re- hol by volume, and formula number, if quired by § 24.255 for each lot of wine produced under a formula, of each non- bottled or packed, or for each bottling

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or packing line operated each day, decolorizing material used and kind showing the date, type of test, item and quantity of acid used. tested and the test results. (Sec 201, Pub. L. 85–859, 72 Stat. 1381, as (d) If a tax credit under 26 U.S.C. amended (26 U.S.C. 5367)) 5041(c) may be claimed, the record will (Approved by the Office of Management and be maintained in sufficient detail to in- Budget under control number 1512–0298) sure that such a tax credit is properly claimed. [T.D. ATF–299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF–307, 55 FR 52738, Dec. (Approved by the Office of Management and 21, 1990; T.D. ATF–312, 56 FR 31083, July 9, Budget under control number 1512–0298) 1991; T.D. TTB–91, 76 FR 5478, Feb. 1, 2011] [T.D. ATF–299, 55 FR 24989, June 19, 1990, as § 24.310 Taxpaid removals from bond amended by T.D. ATF–307, 55 FR 52738, Dec. record. 21, 1990; T.D. ATF–312, 56 FR 31083, July 9, 1991] A proprietor removing wine from bond for consumption or sale on deter- § 24.309 Transfer in bond record. mination of tax shall maintain a record of wine removed at the time of removal A proprietor who transfers wine in either to taxpaid wine premises, tax- bond shall prepare a transfer record. paid wine bottling house premises, or The transfer record will show: for direct shipment. The record will (a) The name, address and registry show the date of removal, the name number of the proprietor; and address of the person to whom (b) The name, address and registry shipped, and the volume, kind (class number of the consignee; and type), and alcohol content of the (c) The shipping date; wine. However, on any individual sale (d) The kind of wine (class and type); of less than 80 liters, the name and ad- (e) The alcohol content or the tax dress of the purchaser need not be re- class; corded. The proprietor who removes (f) The number containers larger taxpaid bulk wine to another wine than four liters and cases; premises shall prepare the shipping (g) The serial numbers of cases (if record and follow the procedures pre- any) or containers larger than four li- scribed by § 24.281. The volume of wine ters; removed taxpaid will be summarized (h) Any bulk container identification daily by tax class in wine gallons to marks; the nearest tenth gallon. (i) The volume shipped in gallons or (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as liters; (if a tax credit under 26 U.S.C. amended (26 U.S.C. 5367)) 5041(c) may be claimed, the record will (Approved by the Office of Management and be maintained in sufficient detail to in- Budget under control number 1512–0298) sure that such a tax credit is properly claimed); [T.D. ATF–299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF–312, 56 FR 31083, July (j) The serial number of any seal 9, 1991] used; (k) For unlabeled bottled or packed § 24.311 Taxpaid wine record. wine, the registry number of the A proprietor who has taxpaid United bottler or packer; States or foreign wine on taxpaid wine (l) Information necessary for compli- premises or on taxpaid wine bottling ance with § 24.314, e.g., the varietal, house premises shall maintain records vintage, appellation of origin designa- as follows: tion of the wine or any other informa- (a) Record of receipts. (1) The name tion that may be stated on the label; and address of the person or wine prem- and ises from whom received; (m) Information as to any added sub- (2) The registry number (if any) of stance or cellar treatment for which a the wine premises from which received; label declaration is required for the (3) The date of receipt; finished product, or any other cellar (4) The kind of wine (class, type and, treatment for which limitations are in the case of foreign wine, country of prescribed in this part, e.g., amount of origin);

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(5) Alcohol content or tax class of the (e) The serial numbers or other iden- wine; and, tifying marks on the cases or con- (6) The volume of wine received in li- tainers in which the wine was received; ters and gallons. and (b) Record of removals. (1) The name (f) The final disposition of the wine. and address of the person to whom removed; however, on any individual sale (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as of less than 80 liters, the name and ad- amended (26 U.S.C. 5367)) dress of the purchaser need not be re- (Approved by the Office of Management and corded; Budget under control number 1512–0298) (2) The date of removal; [T.D. ATF–299, 55 FR 24989, June 19, 1990, as (3) The kind of wine (class, type and, amended by T.D. ATF–312, 56 FR 31083, July in the case of foreign wine or a blend of 9, 1991] United States and foreign wine, country of origin); and § 24.313 Inventory record. (4) The volume of wine shipped in liters or gallons. A proprietor who files monthly or (c) Record of cases or containers filled. quarterly reports shall prepare a record (1) The date the cases or containers of the physical inventory of all wine were filled; and spirits in storage at the close of (2) The kind (class, type, and in the business for each tax year, or where a case of foreign wine or a blend of different cycle has been established, United States and foreign wine, coun- the inventory will be taken at the end try of origin) of wine bottled or packed; of that annual period. Such proprietors (3) The number of the tank used to may use an annual inventory period fill the bottles or other containers; different from the period beginning (4) The size of bottles or other con- July 1 and ending June 30 by submit- tainers and the number of cases or con- ting a notice to the appropriate TTB tainers filled; officer. However, proprietors who file (5) The serial number or date of fill quarterly reports must select an an- marked on the cases or containers nual inventory period that begins on filled; and the first day of a calendar quarter. Pro- (6) The total volume of wine bottled prietors who file reports on a calendar or packed in liters or wine gallons. year basis under the provisions of (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as § 24.300(g) of this part shall take the amended (26 U.S.C. 5367)). physical inventory at the close of the calendar year. The inventory record (Approved by the Office of Management and will be retained on file with the propri- Budget under control number 1512–0298) etor’s TTB F 5120.17, Report of Bonded [T.D. ATF–299, 55 FR 24989, June 19, 1990, as Wine Premises Operations, for the re- amended by T.D. ATF–312, 56 FR 31083, July porting period when the inventory was 9, 1991] taken. If a proprietor who files month- § 24.312 Unmerchantable wine re- ly reports takes a complete inventory turned to bond record. at other times during the year, losses A proprietor shall maintain a record disclosed will be reported on the TTB F of any unmerchantable taxpaid wine 5120.17 and the inventory record will be returned to bond as follows: maintained on file with the report for (a) The kind, volume, and tax class of each month when an inventory was the wine; taken. The proprietor’s inventory (b) With regard to each tax class, the record will include: amount of tax previously paid or deter- (a) Description of wine. (1) State the mined; generic name (e.g., port, claret) or des- (c) The location of the wine premises ignate as a white, rose or red table or at which the wine was bottled or dessert wine; or packed and, if known, the identity of (2) Wine intended to be marketed the bonded wine premises from which with a vintage date, varietal name, or removed on determination of tax; geographical designation will be appro- (d) The date the wine was returned to priately identified, e.g., 1977 Napa Val- bond; ley Pinot Noir; and

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(3) If the wine is other than grape are subject to the record retention re- wine, state the type, e.g., orange, quirements of § 24.300(d). honey. (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as (b) Bulk containers. Tanks containing amended (26 U.S.C. 5367)) wine will be listed by tank number. (Approved by the Office of Management and Bulk containers which are barrels or Budget under control number 1512–0298) puncheons containing the same kind of wine may be summarized, e.g., 10 bar- [T.D. ATF–299, 55 FR 24989, June 19, 1990, as amended by T.D. TTB–91, 76 FR 5478, Feb. 1, rels—red table wine 500 gals.; 2011] (c) Cases, bottles and other similar containers. The total volume of one kind of § 24.315 Materials received and used wine in cases, bottles and similar con- record. tainers may be entered as one item and (a) General. A proprietor who pro- appropriately identified; duces wine shall maintain a record (d) Inventory summary. The volume of showing the receipt and use or other bulk and bottled or packed wine will be disposition of basic winemaking mate- totaled separately in wine gallons or in rials received on wine premises. The liters, by tax class, and reported on the record will show the date of receipt, TTB F 5120.17. Spirits will also be to- the quantity received, the name and taled and reported on the TTB F address from whom received, and the 5120.17; and date of use or other disposition of the (e) Inventory record. All inventory materials. For any material stored off pages will be numbered consecutively wine premises, invoices or other com- and the last inventory page will be mercial papers covering the purchase dated and signed after the statement, will also be kept available for inspec- ‘‘Under penalties of perjury, I declare tion. Where grapes (or other fruit) re- that I have examined this inventory ceived on wine premises are used in record and to the best of my knowledge producing juice to be stored for future use or for removal, the record will and belief, it is a true, correct and show the quantity used and juice pro- complete record of all wine and spirits duced. required to be inventoried.’’ (b) Concentrated fruit juice. When con- (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as centrated fruit juice or must is pro- amended (26 U.S.C. 5367, 5369)) duced or received, the record will show (Approved by the Office of Management and the degrees Brix of the juice before and Budget under control numbers 1512–0216 and after concentration, the volume of 1512–0298) juice before and after reconstitution, the volume of reconstitution water [T.D. ATF–299, 55 FR 24989, June 19, 1990, as used for each dilution of the con- amended by T.D. ATF–338, 58 FR 19065, Apr. centrate, and, if volatile fruit flavor 12, 1993; T.D. ATF–409, 64 FR 13683, Mar. 22, 1999; T.D. TTB–41, 71 FR 5603, Feb. 2, 2006] was added, the kind and volume. Where fruit or juice is used to produce con- § 24.314 Label information record. centrated juice, the record will also show the quantity of fruit or volume of A proprietor who removes bottled or juice used. If the concentrated fruit packed wine with information stated juice is removed for use by another on the label (e.g., varietal, vintage, ap- proprietor, a copy of the certificate re- pellation of origin, analytical data, quired by § 24.180 will be retained. The date of harvest) shall have complete record of concentrated fruit juice will records so that the information appear- contain the information necessary to ing on the label may be verified by a determine compliance with the limita- TTB audit. A wine is not entitled to tions prescribed in § 24.180. Incomplete have information stated on the label or inaccurate records of concentrated unless the information can be readily fruit juice may result in the wine pro- verified by a complete and accurate duced from the concentrated fruit juice record trail from the beginning source to be designated substandard. material to removal of the wine for (c) Volatile fruit-flavor concentrate. If consumption or sale. All records nec- volatile fruit-flavor concentrate is re- essary to verify wine label information ceived, the record will show the volume

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received, the fold, the percent of alco- anced and the quantity of each kind of hol by volume, any loss in transit, and sugar remaining on hand will be shown. the use or other disposition of the vola- (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as tile fruit-flavor concentrate. amended (26 U.S.C. 5367)) (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as (Approved by the Office of Management and amended (26 U.S.C. 5367)) Budget under control number 1512–0298) (Approved by the Office of Management and [T.D. ATF–299, 55 FR 24989, June 19, 1990, as Budget under control number 1512–0298) amended by T.D. ATF–338, 58 FR 19065, Apr. 12, 1993] § 24.316 Spirits record. A proprietor who receives, stores, or § 24.318 Acid record. uses spirits shall maintain a record of A proprietor who adds acid to correct receipt and use. The record will show a natural deficiency in juice or wine or the date of receipt, from whom re- to stabilize wine shall maintain a ceived, and the kind and proof gallons. record showing date of use, the kind The spirits record will also show by and quantity of acid used, the kinds date and proof gallons the spirits used and volume of juice or wine in which or removed from bonded wine premises used, and, when used to correct natural and to whom. The proof gallons of spir- deficiency, the fixed acid level of juice its received, used, removed from bond- or of wine before and after the addition ed wine premises, and on hand will be of acid. The record will account for all summarized and the account balanced acids received and be supported by pur- at the end of each reporting period and chase invoices. reported on the TTB F 5120.17. (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as amended (26 U.S.C. 5367)) amended, 1382, as amended, 1383, as amended (Approved by the Office of Management and (26 U.S.C. 5367, 5373)) Budget under control number 1512–0298) (Approved by the Office of Management and Budget under control numbers 1512–0216 and § 24.319 Carbon dioxide record. 1512–0298) A proprietor who uses carbon dioxide [T.D. ATF–299, 55 FR 24989, June 19, 1990, as in still wine shall maintain a record of amended by T.D. ATF–312, 56 FR 31083, July the laboratory tests conducted to es- 9, 1991; T.D. ATF–338, 58 FR 19065, Apr. 12, tablish compliance with the limita- 1993] tions prescribed in § 24.245. § 24.317 Sugar record. (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as A proprietor who receives, stores, or amended (26 U.S.C. 5367)) uses sugar shall maintain a record of (Approved by the Office of Management and receipt and use. The record will show Budget under control number 1512–0298) the date of receipt, from whom received, and the kind and quantity. In- § 24.320 Chemical record. voices covering purchases will be re- A proprietor who uses chemicals, pre- tained. When sugar is used for servatives, or other such materials chaptalization (Brix adjustment), ame- shall maintain a record of the pur- lioration or sweetening, the record will chase, receipt and disposition of these show the date, kind, and quantity used. materials. The record will show the The sugar record will also show sugar kinds and quantities received, the date used in the production of allied prod- of receipt, and the names and addresses ucts and any sugar removed from the from whom purchased. A record of use wine premises. At the close of each re- in juice or wine of any of these mate- porting period, the account will be bal- rials, except for filtering aids, inert fining agents, sulfur dioxide, carbon dioxide (except as provided in § 24.319), nitrogen and oxygen, will be maintained, showing the kind, quantity, and date of

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use, and kind and volume of juice or with the instructions printed on the wine in which used. form. (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as (August 16, 1954, ch. 736, 68A Stat. 775, as amended (26 U.S.C. 5367)) amended, 777, as amended, 391, as amended, 917, as amended (26 U.S.C. 5061, 7805)) (Approved by the Office of Management and Budget under control number 1512–0298) (Approved by the Office of Management and Budget under control numbers 1512–0467 and [T.D. ATF–299, 55 FR 24989, June 19, 1990, as 1512–0492) amended by T.D. ATF–312, 56 FR 31083, July 9, 1991] [T.D. ATF–299, 55 FR 24989, June 19, 1990, as amended by T.D. TTB–91, 76 FR 5478, Feb. 1, § 24.321 Decolorizing material record. 2011] A proprietor who treats juice or wine PART 25—BEER to remove excess color with activated carbon or any other decolorizing mate- Subpart A—Scope of Regulations rial shall maintain a record to show: (a) The date the decolorizing mate- Sec. rial is added to the juice or wine; 25.1 Production and removal of beer. (b) The type (e.g. grape variety or 25.2 Territorial extent. kind of wine) and volume of juice or 25.3 Forms prescribed. 25.4 Related regulations. wine treated with decolorizing mate- 25.5 OMB control numbers assigned under rial; and the Paperwork Reduction Act. (c) The kind and quantity of decol- 25.6 Delegations of the Administrator. orizing material used to treat the juice or wine. Subpart B—Definitions (Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as 25.11 Meaning of terms. amended (26 U.S.C. 5367)) STANDARDS FOR BEER (Approved by the Office of Management and Budget under control number 1512–0298) 25.15 Materials for the production of beer. Subpart C—Location and Use of Brewery § 24.322 Allied products record. A proprietor who uses fruit, fruit 25.21 Restrictions on location. juice or concentrated fruit juice in the 25.22 Continuity of brewery. production of allied products shall 25.23 Restrictions on use. 25.24 Storage of beer. maintain a record of these materials in 25.25 Operation of a tavern on brewery accordance with § 24.315. The record premises. will also show the production and disposition of other allied products. If Subpart D—Construction and Equipment sugar, acids, or chemicals are used in allied products, the receipt and use will CONSTRUCTION also be recorded. 25.31 Brewery buildings.

(Sec. 201, Pub. L. 85–859, 72 Stat. 1381, as EQUIPMENT amended (26 U.S.C. 5367)) 25.35 Tanks. (Approved by the Office of Management and 25.36 Empty container storage. Budget under control number 1512–0298) Subpart E—Measurement of Beer § 24.323 Excise Tax Return form. 25.41 Measuring system required. A proprietor who removes wine sub- 25.42 Testing of measuring devices. ject to tax shall prepare a TTB F 5200.24, Excise Tax Return, unless ex- Subpart F—Miscellaneous Provisions empted under the provisions of § 24.273. 25.51 Right of Entry and Examination. Any increase or decrease in tax due to 25.52 Variations from requirements. previous return errors or for authorized credits will be shown on the return. SAMPLES The TTB F 5000.24 will be prepared and 25.53 Submissions of samples of fermented filed by the proprietor in accordance products.

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