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To all Retail Dealers of Distilled Spirits, Wine or Beer:
This publication will explain the principal Federal liquor laws and regulations which affect you. Its purpose is to help you conduct your business in compliance with the law and regulations.
You should read the entire text and retain it or bookmark it for further reference. Later, when you have a particular question, you will find the answer by using the Table of Contents.
If you need more specific or detailed information, you may obtain copies of the complete regulations, Title 27 CFR (which includes Part 194, Liquor Dealers), by purchasing them from the Superintendent of Documents, Government Printing Office (GPO), Washington, DC 20402. Copies of this publication are available for purchase at GPO's bookstores in most major cities. In addition, you can go to GPO's website to order or download the regulations in Title 27, Code of Federal Regulations, Part 194, or you can visit ATF's website (http://www.atf.treas.gov) to download these regulations.
You should also feel free to contact ATF's National Revenue Center concerning any of the requirements that may not be clear to you. For your convenience, the mailing address and telephone number of the National Revenue Center are listed on the final page of this publication.
Bradley A. Buckles
Director,
Bureau of Alcohol,
Tobacco and Firearms
1.
General
(Contents)
Retail dealers
of distilled spirits, wine or beer must comply with certain requirements
of federal laws and regulations. Failure to comply with these requirements
carries severe penalties and renders the dealer liable to criminal prosecution.
This publication summarizes the more important provisions of federal laws
and regulations applicable to retail dealers.
2.
Tax on Retail Dealers
(Contents)
The law defines a retail dealer as a person who sells to any person other than a dealer. This includes sales for on-premises consumption (e.g. bars, restaurants, clubs, sports arenas, etc.). All retail dealers (except in the case of "limited" dealers) are required to pay special occupational tax and obtain a special tax stamp before commencing business, and on or before July 1 and thereafter, if they continue in business.
A retail dealer
who handles distilled spirits, wine or beer or any combination of distilled
spirits, wine or beer and malt beverages must pay special tax at the rate
of $250 a year. When the tax is paid in full, the dealer will be issued
a special tax stamp for the class of business for which the tax is paid.
The special tax stamp is issued to cover only one place of business. If
retail dealers conduct business at more than one location, they must pay
special tax and obtain a special tax stamp for each location. Persons engaged
in the sales of distilled spirits, wine or beer, who willingly fail to
pay the tax, render themselves liable to a fine of not more than $5000,
imprisonment for not more than 2 years, or both.
3.
No Tax on Limited Retail Dealers
(Contents)
Limited retail dealers are not required to pay special tax. The term "limited retail dealer" means any fraternal, civic, church, labor, charitable, benevolent, or ex-serviceperson's organization making sales of distilled spirits, wine or beer on the occasion of any kind of entertainment, dance, picnic, bazaar, or festival it holds.
It also refers
to any person making sales of distilled spirits, wine or beer, to the members,
guests, or patrons of bona fide fairs, reunions, picnics, carnivals, or
other similar outings, if such organization or person is not otherwise
engaged in business as a dealer. For confirmation that a specific type
of organization qualifies as a limited retail dealer, contact ATF's National
Revenue Center listed on the final page of this publication.
4.
Stamp Not a License
(Contents)
The special
tax stamp is a receipt for payment of the special occupational tax as a
dealer. It is not a "Federal License" and does not confer any privileges
on the dealer.
5.
Time for Payment of Special Tax
(Contents)
Every retail
dealer who is subject to special occupational tax must file a special tax
return (ATF Form 5630.5) with, and pay the proper special tax to, the Bureau
of Alcohol, Tobacco and Firearms in accordance with the instructions on
the return form. ATF Form 5630.5 must be filed, with remittance,
before the dealers commence business, and on or before July 1 and thereafter,
if they continue in business. The dealer must file a tax return and pay
the special tax to avoid liability for interest and delinquency penalties
for late filing and/or late payment.
6.
Retail Dealers Conducting Business at More Than
One Location
(Contents)
Every retail
dealer conducting business at more than one location subject to special
tax (retail dealer in liquor or beer) for the same period is required to
(1) file only one special tax return (ATF Form 5630.5), with remittance,
to cover all such locations and (2) prepare, in duplicate, a list showing
by States, the name, address, tax class and other key data described in
the instructions for each location for which special tax is being paid.
The original of the list must be attached to the ATF Form 5630.5 and the
copy retained by the dealer.
7.
Employer Identification Number
(Contents)
All retail dealers
are required to show their employer identification number on the special
tax return (ATF Form 5630.5). Retail dealers who do not have an employer
identification number should file an application on Internal Revenue Service
Form SS-4 for this number. An Form SS-4 may be obtained from the director
of the Internal Revenue Service Center or any district director of the
IRS. The Form SS-4 should be filed with the official designated on the
form, on or before the seventh day after the date on which the dealer files
the first special tax return.
8.
Computation of Tax
(Contents)
Special tax is computed on the basis of a tax year which begins on July 1 and ends on the following June 30. A retail dealer who commences business at any time in July is required to pay special tax for the entire tax year. A dealer in business on June 30 who continues operations in the month of July is required to pay special tax for the new tax year which begins July 1. Dealers who begin business in any month other than July are required to pay special tax from the first of the month in which they begin business to the following June 30.
For example, a dealer who commences business on August 20 is required to pay for 11 full months (August 1 - June 30 following), or eleven-twelfths of the annual rate.
9.
Tax Not Refundable
(Contents)
A retail dealer
who discontinues business during the tax year is not entitled to a refund
of tax for the unexpired portion of the tax year for which the special
tax stamp was issued. However, the full amount of tax may be refunded if
the dealer did not sell (or offer for sale) any liquors during the period
covered by the stamp.
10.
Special Tax Stamp to be Kept Available for Examination
(Contents)
All retail dealers
are required to keep their special tax stamp (receipt for payment of special
tax) available in their place of business for inspection by any ATF officer.
11.
Changes in Location of Business
(Contents)
(a) General - All retail dealers who move their place of business, to a location other than that indicated on their tax stamp, must register such changes of address within 30 days from the date they begin to sell (or offer for sale) liquors at the new location. The change in location must be registered by completing a new ATF Form 5630.5 (marked "amended return") and surrendering the special tax stamp for amendment. The stamp will be amended and returned to the dealer at the new address. Failure to register the change of location within 30 days will subject the dealer to a new tax at the new location.12. Change in Ownership or Control of Business(b) Retail dealers conducting business at one location - Every retail dealer who conducts business at only one location, and moves such place of business, must indicate on an amended return the new address of the business and the date business commenced at the new location. The amended return, together with the special tax stamp, must either be mailed to the Bureau of Alcohol, Tobacco and Firearms or given to an ATF officer inspecting the business. The stamp will be amended and returned to the dealer at the new address.
(c) Retail dealers conducting business at more than one location - All retail dealers who conduct business at more than one location subject to special tax, and who move one of the businesses to a new location, must indicate on the amended return the name and address of the principal place of business (or principal office, if the dealer is a corporation) and the date business commenced at the new location. In addition, they must indicate on an attachment to the amended return the name and the old and new addresses of the business which moved to the new location. The amended return and attachment, together with the special tax stamp, must be submitted to the Bureau of Alcohol, Tobacco and Firearms. The stamp will be amended and returned to the dealer at their principal place of business.
(Contents)
(a) Change in control - Certain persons other than the dealer who paid the special tax may, without paying additional special tax, secure the right to carry on the same business at the same address for the remainder of the taxable period for which the special tax was paid. These persons are:13. Requirements on Retail Dealers Who Sell to Other Dealers(i) The widow/widower or child, or executor, administrator, or other legal representative of a deceased dealer;In order to secure this right, the person(s) continuing the business must register the change in control with the Bureau of Alcohol, Tobacco and Firearms within 30 days from the date on which they begin to carry on the business. The registration must be made by completing a new ATF Form 5630.5 (marked "Amended Return") showing the basis of the succession, and submitting the amended return and the unexpired tax stamp to ATF, as set forth in paragraph 10. The stamp will be amended and returned to the successor. Failure to register the succession within 30 days will subject the successor(s) to a new tax and interest, and possible delinquency penalty, for the taxable period in which they began to carry on the business.(ii) A Husband/wife succeeding to the business of his or her living spouse;
(iii) A receiver or trustee in bankruptcy, or an assignee for benefit of creditors; and
(iv) The partner of partners remaining after death or withdrawal of a member of a partnership.
(b) Change in ownership - A special tax stamp cannot be sold by the original purchaser and except as shown in the paragraph (a) above, cannot be transferred. The new owner must secure a new tax stamp when the business is sold, or the partnership, when a new partner is taken into the business.
(Contents)
(a) Tax Liability as wholesale dealer - A retail dealer becomes a wholesale dealer when selling distilled spirits, wine or beer to another dealer other than a limited retail dealer. The tax on a wholesale dealer in beer is $500 for the tax year. The tax on a wholesale dealer in liquors is also $500 for the tax year. A retail dealer does not incur liability as a wholesale dealer for sales of wine or beer to a limited retail dealer, provided all such sales are made at the retail dealer's place of business covered by the special tax stamp. Persons who incur liability as wholesale dealers in beer or wholesale dealers in liquors and who willfully fail to pay the tax as such, render themselves liable to a fine of not more than $5000, imprisonment of not more than 2 years, or both.14. Sales in Quantities of 20 Wine Gallons(b) Permit requirements - Retail dealers may not sell any distilled spirits, wine or beer to another dealer for purposes of resale until they obtain a wholesaler's basic permit under the Federal Alcohol Administration Act. Persons who violate any of the permit requirements of the Act become liable to penalties. Forms on which to apply for permits may be obtained from ATF's National Revenue Center listed on the final page of this publication, for use by dealers who intend to conduct business.
(Contents)
Under law, a
retailer who sells or offers for sale distilled spirits, wine or beer in
quantities of 20 wine gallons (75.7 liters) or more to the same person
at the same time is presumed to be engaged in business as a wholesale dealer.
The seller may overcome this presumption only by furnishing satisfactory
evidence that the sale was made to a person who is not a dealer.
15.
Liability of Additional Taxes for "Peddling"
(Contents)
Retailers may
sell liquors only at the place of business covered by their special tax
stamp. If they sell at any other place, or if they deliver liquors for
which they have not received a prior order at the place of business covered
by the special tax stamp, they are required to pay special tax as a dealer
at each place where they make a sale or delivery.
16.
Closure on Bottles of Distilled Spirits
(Contents)
Distilled spirits
plants and importers are required to securely affix an antitampering closure
or similar device to all bottles or other containers of distilled spirits.
This would apply to bottles of whiskey, gin, rum, brandy, vodka, alcoholic
cordials containing distilled spirits, and all other similar liquors. The
closure must be of a type that is broken when the container is opened,
leaving a portion of the closure on the container. Products may be closed
with a proprietary paper seal, metal roll-on, plastic pilfer-proof cap,
lead foil capsule with zip tab, cello-seal with zip tab, Internal Revenue
Service strip seal or similar device. Retailers who receive liquor bottles
without the required closures, or with broken closures, should report these
containers to an ATF area office.
17.
Refilling, Reusing and Disposing of Liquor Bottles
(Contents)
(a) Refilling or reusing liquor bottles - Any retail dealer, or agent or employee of such dealer, who refills any liquor bottle with distilled spirits, or who reuses any liquor bottle by adding distilled spirits or any substance (including water) to the original contents is subject to a fine of not more than $1000 or imprisonment for not more than 1 year, or both.(b) Disposition of liquor bottle - The possession of used liquor bottles by any person other than the one who emptied the contents thereof is prohibited, except that this prohibition shall not (1) prevent the owner or occupant of any premises on which such bottles have been lawfully emptied from assembling the same on such premises (i) for delivery to a bottler or importer on specific request for such bottler or importer; (ii) for destruction either on the premises on which the bottles are emptied or elsewhere, including disposition for purposes which will result in the bottles being rendered unusable as bottles; or (iii) in the case of unusual or distinctive bottles, for disposition as collectors' items or for other purposes not involving the packaging of any products for sale; (2) prevent any person from possessing, offering for sale, or selling such unusual or distinctive bottles for purposes not involving the packaging of any product for sale; or (3) prevent any person from assembling used liquor bottles for the purpose of recycling or reclaiming the glass or other approved liquor bottle material. Any person possessing liquor bottles in violation of law or regulations is subject to a fine of not more that $1000, imprisonment for not more than 1 year, or both.
18.
Prohibited Purchases of Distilled Spirits
(Contents)
Retail dealers
may purchase distilled spirits only from wholesale dealers who have paid
the special tax as such or who are not required to pay special tax as wholesale
dealers. Examples of those not required to pay this tax are: (a) proprietors
of distilled spirits plants; (b) administrators, executors, or receivers
in bankruptcy who are disposing of assets; and (c) dealers who are going
out of business and selling their entire stock. A dealer who makes prohibited
purchases of distilled spirits is subject to a fine of not more than $1000,
imprisonment for not more than 1 year, or both.
19.
Required Records
(Contents)
All retail dealers must either keep a record in book form showing the date and quantity of all distilled spirits, wine and beer received on their premises, and from whom received, or keep all invoices of, and bills for all distilled spirits, wine or beer received. Also, every retail dealer is required to keep a record of sales of distilled spirits, wine or beer in quantities of 20 wine gallons or more to the same person at the same time, which shows (a) the date of sale, (b) name and address of purchaser, (c) kind and quantity of liquors sold and (d) the serial numbers of any full cases of distilled spirits in the sale. A dealer who, with fraudulent intent, fails or refuses to keep the required records, is subject to a fine of not more than $10,000 and imprisonment for not more than 5 years, and a dealer who, without fraudulent intent, fails to keep the required records is subject to a fine of not more than $1000, imprisonment for not more than 1 year, or both.
20.
Inspection by Alcohol, Tobacco and Firearms Officers
(Contents)
A retail dealer's place of business and the stock of liquors are subject to inspection by ATF officers having proper credentials. The ATF officers are authorized to examine records, collect special tax and penalties, and to accept tender of offers in compromise of liability arising from a violation of Federal liquor laws. The ATF officer will issue a receipt to a dealer if cash is received as a remittance in payment of special tax (including penalties and interest, if any), or for any type of remittance received if the dealer requests a receipt.
If any dealer
forcibly rescues any liquor or other property seized by an ATF officer,
or attempts to do so, he is subject to a fine of either not more than $500
or double the value of the property rescued, whichever is greater, or imprisonment
for not more than 2 years. Any retailer who forcibly obstructs or attempts
to obstruct an ATF officer in the performance of his duties is subject
to a fine of not more than $5000 or imprisonment for not more than 3 years,
or both, except that if the offense is committed only by threats of force,
the person convicted thereof shall be fined not more than $3000 or imprisoned
for not more than 1 year, or both.
21.
Obtaining ATF Form 5630.5, Annual Special Tax Registration
and Return
(Contents)
An ATF Form 5630.5 may be obtained from the National Revenue Center shown below, or downloaded from the website at http://www.atf.treas.gov/forms/pdfs/f56305.pdf.
ATF National
Revenue Center
550 Main Street,
Room 8002
Cincinnati, OH
45202
(800) 937-8864