Repeal of Special (Occupational) Tax on Alcohol Occupations

On August 10, 2005, President Bush signed into law the “Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users,” Public Law 109-59.  Section 11125 of that act permanently repeals, effective July 1, 2008, the special (occupational) taxes on

• producers and marketers of alcohol beverages,
• manufactures of non-beverage products,
• users of tax-free alcohol, and
• users and dealers of specially denatured spirits.

Although the tax has been repealed, recordkeeping and registration requirements remain.  Further, any tax liabilities that were incurred for periods before the law’s effective date remain and will be collected.  (However, there is no liability for alcohol occupations, other than users of tax-free alcohol and users and dealers of specially denatured spirits, during the previously enacted 3-year tax suspension that runs from July 1, 2005, through June 30, 2008.)

Section 11125 of Public Law 109-59 does not affect any tobacco occupations; therefore,

• manufacturers of tobacco products,
• manufacturers of cigarette papers and tubes, and
• tobacco export warehouse proprietors

must continue to register and pay the special (occupational) tax every year.  The registration and tax for these tobacco occupations is due before beginning business, and on or before July 1 of every year after that.

TTB plans to issue regulations amendments to implement the repeal before its July 1, 2008, effective date.  Corresponding changes will be made throughout the TTB Website as appropriate.