[Code of Federal Regulations]
[Title 27, Volume 1, Parts 1 to 199]
[Revised as of April 1, 1999]
From the U.S. Government Printing Office via GPO Access
[CITE: 27CFR25]
[Page 595-644]
PART 25--BEER
Subpart A--Scope of Regulations
Sec.
25.1 Production and removal of beer.
25.2 Territorial extent.
25.3 Forms prescribed.
25.4 Related regulations.
25.5 OMB control numbers assigned under the Paperwork Reduction Act.
Subpart B--Definitions
25.11 Meaning of terms.
Subpart C--Location and Use of Brewery
25.21 Restrictions on location.
25.22 Continuity of brewery.
25.23 Restrictions on use.
25.24 Storage of beer.
25.25 Operation of a tavern on brewery premises.
Subpart D--Construction and Equipment
Construction
25.31 Brewery buildings.
[[Page 596]]
Equipment
25.35 Tanks.
25.36 Empty container storage.
Subpart E--Measurement of Beer
25.41 Measuring system required.
25.42 Testing of measuring devices.
Subpart F--Miscellaneous Provisions
25.51 ATF officer's right of entry and examination.
25.52 Variations from requirements.
Subpart G--Qualification of a Brewery
Original Qualification
25.61 General requirements for notice.
25.62 Data for notice.
25.63 Notice of registration.
25.64 Maintenance of notice file.
25.65 Power of attorney.
25.66 Organizational documents.
25.67 Statement of process.
25.68 Description of brewery.
Changes After Original Qualification
25.71 Amended or superseding notices.
25.72 Change in proprietorship.
25.73 Change in partnership.
25.74 Change in stockholders.
25.75 Change in officers and directors.
25.76 Change in statement of process.
25.77 Change in location.
25.78 Change in premises.
Alternation of Operations
25.81 Alternation of brewery and bonded or taxpaid wine premises.
Discontinuance of Business
25.85 Notice of permanent discontinuance.
Subpart H--Bonds and Consents of Surety
25.91 Requirement for bond.
25.92 Consent of surety.
25.93 Penal sum of bond.
25.94 Strengthening bonds.
25.95 New bond.
25.96 Superseding bond.
25.97 Continuation certificate.
25.98 Surety or security.
25.99 Filing powers of attorney.
Disapproval or Termination of Bonds or Consents of Surety
25.101 Disapproval of bonds or consents of surety.
25.102 Termination of surety's liability.
25.103 Notice by surety for relief from liability under bond.
25.104 Termination of bonds.
25.105 Release of collateral security.
Subpart I--Special Taxes
Liability for Special Tax
25.111 Brewer's special tax.
25.111a Special tax rates.
25.111b Reduced rate of tax for small brewers.
25.112 Wholesaler's special tax.
25.113 Each place of business taxable.
25.114 Exemptions from dealer's special taxes.
Execution of Special Tax Returns
25.117 Special tax returns.
25.118 Preparation of AFT Form 5630.5.
25.119 Multiple locations and/or classes of tax.
25.120 Signing of ATF Forms 5630.5.
Employer Identification Numbers
25.121 Employer identification number.
25.122 Application for employer identification number.
25.123 Preparation and filing of IRS Form SS-4.
Special Tax Stamps
25.125 Issuance of special tax stamps.
25.126 Distribution of stamps for multiple locations.
25.127 Examination of special tax stamps.
Changes in Special Tax Stamps
25.131 Change in name.
25.132 Change in proprietorship.
25.133 Persons having right of succession.
25.134 Change in location.
Subpart J--Marks, Brands, and Labels
25.141 Barrels and kegs.
25.142 Bottles.
25.143 Cases.
25.144 Rebranding barrels and kegs.
25.145 Tanks, vehicles, and vessels.
Subpart K--Tax on Beer
Liability for Tax
25.151 Rate of tax.
25.152 Reduced rate of tax for certain brewers.
25.153 Persons liable for tax.
Determination of Tax
25.155 Types of containers.
25.156 Determination of tax on keg beer.
25.157 Determination of tax on bottled beer.
25.158 Tax computation for bottled beer.
25.159 Time of tax determination and payment; offsets.
25.160 Tax adjustment for brewers who produce more than 2,000,000
barrels of beer.
[[Page 597]]
Preparation and Remittance of Tax Returns
25.163 Method of tax payment.
25.164 Semimonthly return.
25.164a Special rule for taxes due for the month of September
(effective after December
31, 1994).
25.165 Payment of tax by electronic fund transfer.
25.166 Payment of reduced rate of tax.
25.167 Notice of brewer to pay reduced rate of tax.
25.168 Employer identification number.
Prepayment of Tax
25.173 Brewer in default.
25.174 Bond not sufficient.
25.175 Prepayment of tax.
Failure To Pay Tax
25.177 Evasion of or failure to pay tax; failure to file a tax return.
Subpart L--Removals Without Payment of Tax
Transfer to Another Brewery of Same Ownership
25.181 Eligibility.
25.182 Kinds of containers.
25.183 Determination of quantity transferred.
25.184 Losses in transit.
25.185 Mingling.
25.186 Record of beer transferred.
Removal of Beer Unfit for Beverage Use
25.191 General.
25.192 Removal of sour or damaged beer.
Removals for Analysis, Research, Development or Testing
25.195 Removals for analysis.
25.196 Removals for research, development or testing.
Removal of Beer to a Contiguous Distilled Spirits Plant
25.201 Removal by pipeline.
Exportation
25.203 Exportation without payment of tax.
Beer for Personal or Family Use
25.205 Production.
25.206 Removal of beer.
25.207 Removal from brewery for personal or family use.
Subpart M--Beer Returned to Brewery
25.211 Beer returned to brewery.
25.212 Beer returned to brewery from which removed.
25.213 Beer returned to brewery other than that from which removed.
Subpart N--Voluntary Destruction
25.221 Voluntary destruction of beer.
25.222 Notice of brewer.
25.223 Destruction of beer off brewery premises.
25.224 Refund or adjustment of tax.
25.225 Destruction of taxpaid beer which was never removed from brewery
premises.
Subpart O--Beer Purchased From Another Brewer
25.231 Finished beer.
25.232 Basic permit.
Subpart P--Cereal Beverage
25.241 Production.
25.242 Markings.
Subpart Q--Removal of Brewer's Yeast and Other Articles
25.251 Authorized removals.
25.252 Records.
Subpart R--Beer Concentrate
25.261 General.
25.262 Restrictions and conditions on processes of concentration and
reconstitution.
25.263 Production of concentrate and reconstitution of beer.
25.264 Transfer between breweries.
Subpart S--Pilot Brewing Plants
25.271 General.
25.272 Application.
25.273 Action on application.
25.274 Bond.
25.275 Special tax.
25.276 Operations and records.
25.277 Discontinuance of operations.
Subpart T--Refund or Adjustment of Tax or Relief From Liability
25.281 General.
25.282 Beer lost by fire, theft, casualty, or act of God.
25.283 Claims for refund of tax.
25.284 Adjustment of tax.
25.285 Refund of beer tax excessively paid.
25.286 Claims for remission of tax on beer lost in transit between
breweries.
Subpart U--Records and Reports
25.291 Records.
25.292 Daily records of operations.
25.293 Record of ballings and alcohol content.
[[Page 598]]
25.294 Inventories.
25.295 Record of unsalable beer.
25.296 Record of beer concentrate.
25.297 Brewer's Report of Operations, Form 5130.9.
25.298 Excise tax return, Form 5000.24.
25.299 Execution under penalties of perjury.
25.300 Retention and preservation of records.
25.301 Photographic copies of records.
Authority: 19 U.S.C. 81c; 26 U.S.C. 5002, 5051-5054, 5056,
5061,
5091, 5111, 5113, 5142, 5143, 5146, 5222, 5401-5403, 5411-5417, 5551,
5552, 5555, 5556, 5671, 5673, 5684, 6011, 6061, 6065, 6091, 6109, 6151,
6301, 6302, 6311, 6313, 6402, 6651, 6656, 6676, 6806, 7011, 7342, 7606,
7805; 31 U.S.C. 9301, 9303-9308.
Source: T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, unless otherwise noted.
Sec. 25.1 Production and removal of beer.
The regulations in this part relate to beer and cereal beverages
and cover the location, construction, equipment, operations and qualifications
of breweries and pilot brewing plants.
Sec. 25.2 Territorial extent.
This part applies to the several States of the United States
and the District of Columbia.
Sec. 25.3 Forms prescribed.
(a) The Director is authorized to prescribe all forms required
by this part, including bonds, applications, notices, reports, returns,
and records. All of the information called for in each form shall be furnished
as indicated by the headings on the form and the instructions on or pertaining
to the form. In addition, information called for in each form shall be
furnished as required by this part.
(b) Requests for forms should be mailed to the ATF Distribution
Center, 7943 Angus Court, Springfield, Virginia 22153.
[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986; 51 FR 10540, Mar. 27, 1986, as
amended by T.D. 372, 61 FR 20724, May 8, 1996]
Sec. 25.4 Related regulations.
Regulations relating to this part are listed below:
27 CFR Part 7--Labeling and Advertising of Malt Beverages.
27 CFR Part 170--Miscellaneous Regulations Relating to Liquor.
27 CFR Part 252--Exportation of Liquors.
31 CFR Part 225--Acceptance of Bonds, Notes, or Other Obligations Issued
or Guaranteed by the United States as Security in Lieu of Surety or Sureties
on Penal Bonds.
Sec. 25.5 OMB control numbers assigned under the Paperwork Reduction Act.
(a) Purpose. This section collects and displays the control
numbers assigned to information collection requirements by the Office of Management
and Budget contained in 27 CFR Part 25 under the Paperwork Reduction Act
of 1980, Pub. L. 96-511.
(b) Display, OMB control number 1512-0045. OMB control number
1512-0045 is assigned to the following sections in 27 CFR Part 25: Secs.
25.23, 25.25, 25.52, 25.61, 25.62, 25.64, 25.66, 25.67, 25.68, 25.71, 25.72,
25.73, 25.74, 25.75, 25.76, 25.77, 25.78, 25.81, 25.85, 25.103, 25.114,
25.141, 25.142, 25.144, 25.158, 25.167, 25.184, 25.213, 25.222, 25.225,
25.272, 25.273, 25.277, 25.282, 25.299.
(c) Display, OMB control number 1512-0052. OMB control number
1512-0052 is assigned to the following sections in 27 CFR Part 25: Secs.
25.296(b), 25.297.
(d) Display, OMB control number 1512-0079. OMB control number
1512-0079 is assigned to the following section in 27 CFR Part 25: Sec. 25.65.
(e) Display, OMB control number 1512-0141. OMB control number
1512-0141 is assigned to the following sections in 27 CFR Part 25: Secs.
25.281, 25.282, 25.286.
(f) Display, OMB control number 1512-0333. OMB control number
1512-0333 is assigned to the following sections in 27 CFR Part 25: Secs.
25.42, 25.142, 25.186, 25.192, 25.195, 25.196, 25.211, 25.252, 25.264,
25.276, 25.284, 25.291, 25.292, 25.293, 25.294, 25.295, 25.296(a), 25.300,
25.301.
(g) Display, OMB control number 1512-0457. OMB control number
1512-0457 is assigned to the following section in 27 CFR Part 25: Sec.
25.165.
(h) Display, OMB control number 1512-0467. OMB control number
1512-0467 is assigned to the following sections in 27 CFR Part 25: Secs.
25.122, 25.160, 25.163, 25.164, 25.165, 25.166, 25.167, 25.168, 25.175,
25.224, 25.284, 25.285, 25.298.
(i) Display, OMB control number 1512-0472. OMB control number
1512-0472 is assigned to the following sections in 27 CFR Part 25: Secs.
25.111, 25.112, 25.113,
[[Page 599]]
25.114, 25.117, 25.118, 25.119, 25.121, 25.126, 25.127, 25.131, 25.132, 25.133,
25.134.
(j) Display, OMB control number 1512-0478. OMB control number
1512-0478 is assigned to the following sections in 27 CFR Part 25: Secs.
25.24, 25.35, 25.141, 25.142, 25.143, 25.145, 25.192, 25.196, 25.231, 25.242,
25.251, 25.263.
[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986; 51 FR 10540, Mar. 27, 1986; T.D.
ATF-268, 53 FR 8628, Mar 16, 1988]
Sec. 25.11 Meaning of terms.
When used in this part, where not otherwise distinctly expressed
or manifestly incompatible with the intent thereof, terms have the meanings given
in this section.
Area supervisor. The supervisory officer of a Bureau of Alcohol, Tobacco and Firearms area office.
ATF officer. An officer of the Bureau of Alcohol, Tobacco and Firearms (ATF) authorized to perform any function relating to the administration or enforcement of this part.
Balling. The percent by weight of dissolved solids at 60 deg.F. present in wort and beer, usually determined by a balling saccharometer.
Bank. Any commercial bank.
Banking day. Any day during which a bank is open to the public for carrying on substantially all its banking functions.
Barrel. When used as a unit of measure, the quantity equal to 31 U.S. gallons. When used as a container, a consumer package or keg containing a quantity of beer listed in Sec. 25.156, or other size authorized by the regional director (compliance).
Beer. Beer, ale, porter, stout, and other similar fermented beverages (including sake or similar products) of any name or description containing one-half of one percent or more of alcohol by volume, brewed or produced from malt, wholly or in part, or from any substitute for malt.
Bottle. A bottle, can or similar container.
Bottling. The filling of bottles, cans, and similar containers.
Brewer. Any person who brews beer (except a person who produces only beer exempt from tax under 26 U.S.C. 5053(e)) and any person who produces beer for sale.
Brewery. The land and buildings described in the Brewer's Notice, Form 5130.10, where beer is to be produced and packaged.
Brewing. The production of beer for sale.
Business day. The 24-hour cycle of operations in effect at the brewery and described on the Brewer's Notice, Form 5130.10.
Calendar quarter. A 3-month period during the year as follows: January 1 through March 31; April 1 through June 30; July 1 through September 30; and October 1 through December 31.
Cereal beverage. A beverage, produced either wholly or in part from malt (or a substitute for malt), and either fermented or unfermented, which contains, when ready for consumption, less than one-half of 1 percent of alcohol by volume.
Commercial bank. A bank, whether or not a member of the Federal Reserve System, which has access to the Federal Reserve Communications System (FRCS) or Fedwire. The ``FRCS'' or ``Fedwire'' is a communications network that allows Federal Reserve System member banks to effect a transfer of funds for their customers (or other commercial banks) to the Treasury Account at the Federal Reserve Bank of New York.
Concentrate. Concentrate produced from beer by the removal of water under the provisions of subpart R of this part. The processes of concentration of beer and reconstitution of beer are considered authorized processes in the production of beer.
Delegate. Any officer, employee, or agency of the Department of the Treasury authorized by the Secretary of the Treasury directly, or indirectly by one or more redelegations of authority, to perform the functions mentioned or described in the context.
Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the Department of the Treasury, Washington, DC.
Director of the service center. A Director of an Internal Revenue Service Center.
District Director. A district director of internal revenue.
[[Page 600]]
Electronic fund transfer or EFT. Any transfer of funds made
by a brewer's commercial bank, either directly or through a correspondent banking
relationship, via the Federal Reserve Communications System (FRCS) or Fedwire
to the Treasury Account at the Federal Reserve Bank of New York.
Executed under penalties of perjury. Signed with the prescribed declaration under the penalties of perjury as provided on or with respect to the return, claim, form, or other document or, when no form of declaration is prescribed, with the declaration: ``I declare under the penalties of perjury that this------(insert type of document such as statement, report, certificate, application, claim, or other document), including the documents submitted in support thereof, has been examined by men and, to the best of my knowledge and belief, is true, correct and complete.''
Fiscal year. The period which begins October 1 and ends on the following September 30.
Gallon. The liquid measure containing 231 cubic inches.
Losses. Known quantities of beer lost due to breakage, casualty, or other unusual cause.
Package. A bottle, can, keg, barrel, or other original consumer container.
Packaging. The filling of any package.
Person. An individual, trust, estate, partnership, association, company, or corporation.
Racking. The filling of kegs or barrels.
Region. A Bureau of Alcohol, Tobacco and Firearms region.
Regional director (compliance). The principal ATF regional official responsible for administering regulations in this part.
Removed for consumption or sale. Except when used with respect to beer removed without payment of tax as authorized by law, (a) the sale and transfer of possession of beer for consumption at the brewery, or (b) any removal of beer from the brewery.
Secretary. The Secretary of the Treasury or his or her delegate.
Service center. An Internal Revenue Service Center in any of the Internal Revenue regions.
Shortage. An unaccounted for discrepancy (missing quantity) of beer disclosed by physical inventory.
This chapter. Title 27, Code of Federal Regulations, Chapter I (27 CFR Chapter I).
Treasury account. The Department of the Treasury's General Account at the Federal Reserve Bank of New York.
U.S.C. The United States Code.
Wort. The product of brewing before fermentation which results
in beer.
[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-345, 58 FR
40357, July 28, 1993]
Sec. 25.21 Restrictions on location.
A brewery may not be established or operated in any dwelling
house or on board any vessel or boat, or in any building or on any premises where
the revenue will be jeopardized or the effective administration of this
part will be hindered.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5402))
Sec. 25.22 Continuity of brewery.
Brewery premises will be unbroken except that they may be
separated by public passageways, streets, highways, waterways, carrier
rights-of-way, or partitions. If the brewery premises are separated, the parts will
abut on the dividing medium and be adjacent to each other. If the brewer
has facilities for loading, or for case packing or storage which are located
within reasonable proximity to the brewery, the regional director (compliance)
may approve these facilities as part of the brewery if the revenue will
not be jeopardized.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5402))
Sec. 25.23 Restrictions on use.
(a) Use of brewery in production of beer or cereal beverage.
A brewery may be used only for the following purposes involving the production
of beer or cereal beverages:
(1) For producing, packaging and storing beer, cereal beverages, vitamins,
ice, malt, malt syrup, and other
[[Page 601]]
by-products of the brewing process, or soft drinks and other nonalcoholic
beverages;
(2) For processing spent grain, carbon dioxide, and yeast;
and
(3) For storing packages and supplies necessary or connected
to brewery operations.
(b) Other authorized uses. A brewer may use a brewery for
other purposes, not involving the production of beer or cereal beverage,
upon approval from the Director, if the purposes:
(1) Require the use of by-products or waste from the production
of beer;
(2) Utilize buildings, rooms, areas, or equipment not fully
employed in the production or packaging of beer;
(3) Are reasonably necessary to realize the maximum benefit
from the premises and equipment and reduce the overhead of the brewery;
(4) Are in the public interest because of emergency conditions;
(5) Involve experiments or research projects related to equipment, materials,
processes, products, by-products, or waste of the brewery; or
(6) Involve operation of a tavern on brewery premises in
accordance with Sec. 25.25.
(c) Application. Except as provided in Sec. 25.25 for operation
of a tavern on brewery premises, a brewer desiring to use a brewery for
other purposes shall submit to the Director through the appropriate regional director
(compliance), an application listing the purposes. The Director will approve
the application if the use for other purposes will not jeopardize the revenue
or impede the effective administration of this part and is not contrary
to specific provisions of law.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5411))
[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-268, 53 FR
8628, Mar 16, 1988]
Sec. 25.24 Storage of beer.
(a) Taxpaid beer. Beer of a brewer's own production on which
the tax has been paid or determined may not be stored in the brewery, except
as provided in Sec. 25.25 or Sec. 25.213. Beer produced by other brewers may
be stored at the brewery under the following conditions:
(1) Taxpaid beer will be segregated in such a manner as
to preclude mixing with nontaxpaid beer;
(2) If required by Part 1 of this chapter, the brewer shall
have a wholesalers or importers basic permit under the Federal Alcohol Administration
Act, and keep records of the taxpaid beer as a wholesaler or importer under
Part 194 of this chapter.
(3) Taxpaid beer may be stored in packages;
(4) Taxpaid beer may not be relabeled;
(5) Taxpaid beer may not be shown on required brewery records;
(6) The brewer shall purchase a special tax stamp as a wholesaler, if
required by Part 194 of this chapter; and
(7) The regional director (compliance) may require physical segregation
of taxpaid beer, or marking to show the status of taxpaid beer, if necessary
to protect the revenue.
(b) Untaxpaid beer. Packaged beer on which tax has not been
paid or determined may be stored in any suitable location in the brewery.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5411))
[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-268, 53 FR
8628, Mar 16, 1988]
Sec. 25.25 Operation of a tavern on brewery premises.
(a) General. A brewer desiring to operate a tavern as an
alternate use of brewery premises, shall submit a Brewer's Notice, ATF
F 5130.10 containing the information required by paragraph (b) of this
section. If the regional director (compliance) finds that the operation
of the tavern on brewery premises will not jeopardize the revenue or impede
the effective administration of this part and is not contrary to specific provisions
of law, the approval of the Brewer's Notice, ATF F 5130.10 shall constitute
approval of the alternate use of brewery premises, in lieu of the application
required by Sec. 25.23. As used in this section, ``tavern'' means a portion
of brewery premises where beer is sold to consumers. Food, and/or taxpaid
wine, and/or taxpaid distilled spirits may also be sold at a tavern operated
on brewery premises. Taxpaid beer
[[Page 602]]
produced by other brewers may be received, stored and sold on brewery premises
in accordance with Sec. 25.24.
(b) Brewer's Notice. In preparing the Brewer's Notice, AFT
F 5130.10, the applicant shall show the following information, in addition to
the information required by the form:
(1) The applicant shall identify the portion of the brewery
which will be operated as a tavern by providing a diagram or narrative description
of the boundaries of the tavern. The diagram or description shall identify
areas of the brewery which are accessible to the public and areas which
are not. The applicant shall describe security measures to be used to segregate
public areas from non-public areas.
(2) The applicant shall describe in detail the method to
be used for measuring beer for the purposes of tax determination.
(3) The applicant shall identify the tanks which will periodically contain
tax-determined beer, and any other areas where tax-determined beer will
be stored.
(c) Procedures. The following procedures shall apply to operation
of a tavern on brewery premises:
(1) The brewery shall have a suitable method for measurement
of the beer, such as a meter or gauge glass. Tax determination shall consist
of the measurement of the beer and the preparation of the brewer's record of
tax determination, required by Sec. 25.292(a)(8). The taxes shall be determined
prior to the time that the beer is dispensed into a container for consumption.
(2) If the brewer uses one or more tanks for tax determination,
the following procedures shall apply:
(i) Each such tank shall be durably marked with the words
``tax-determination tank'';
(ii) The taxes shall be determined each time beer is added
to a tax-determination tank; and
(iii) The brewer may never simultaneously pump into and out
of a tax-determination tank.
(3) A brewer qualified under this section may store, on brewery premises,
tax-determined beer which is intended for sale at a tavern operated on
brewery premises, in accordance with this section. The prohibition of Sec.
25.24 shall not apply to such tax-determined beer.
(4) Beer consumed by employees and visitors in the brewery's
tavern shall be beer on which the tax has been paid or determined.
[T.D. ATF-268, 53 FR 8628, Mar 16, 1988]
Construction
Sec. 25.31 Brewery buildings.
Brewery buildings shall be arranged and constructed to afford adequate
protection to the revenue and to facilitate inspection by ATF officers.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5402))
Equipment
Sec. 25.35 Tanks.
Each stationary tank, vat, cask or other container used,
or intended for use, as a receptacle for wort, beer or concentrate produced
from beer shall:
(a) Be durably marked with a serial number and capacity;
and
(b) Be equipped with a suitable measuring device. The brewer
may provide meters or other suitable portable devices for measuring contents of
tanks or containers in lieu of providing each tank or container with a
measuring device.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 U.S.C. 5552))
Sec. 25.36 Empty container storage.
Empty barrels, kegs, bottles, other containers, or other
supplies stored in the brewery will be segregated from filled containers.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5411))
Sec. 25.41 Measuring system required.
The brewer shall accurately and reliably measure the quantity
of beer transferred from the brewery cellars for bottling and for racking. The
brewer may use a measuring device, such as
[[Page 603]]
a meter or gauge glass, or any other suitable method.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 U.S.C. 5552))
Sec. 25.42 Testing of measuring devices.
(a) General requirements. If a measuring device such as a
meter or gauge glass is used to measure beer, the brewer shall periodically
test the measuring device and adjust or repair it, if necessary. The brewer shall
keep records of tests available for inspection by ATF officers.
Records of tests will include:
(1) Date of test;
(2) Identity of meter or measuring device;
(3) Result of test; and
(4) Corrective action taken, if necessary.
(b) Requirements for beer meters. The allowable variation
for beer meters as established by testing may not exceed <plus-minus>0.5
percent.
If a meter test discloses an error in excess of the allowable variation, the brewer shall immediately adjust or repair the meter. Adjustments will reduce the error to as near zero as practicable.
(c) Authority to require tests. If the regional director (compliance)
has reason to believe that the accuracy or reliability of a measuring device
is not being properly maintained, he or she may require the brewer to test
the measuring device and, if necessary, adjust or repair the measuring
device.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 U.S.C. 5552))
Sec. 25.51 ATF officer's right of entry and examination.
An ATF officer may enter, during normal business hours, a
brewery or other place where beer is stored and may, when the premises
are open at other times, enter those premises in the performance of official
duties. ATF officers shall make inspections as the regional director (compliance)
deems necessary to determine that operations are conducted in compliance
with the law and this part. The owner of any building or place where beer
is produced, made, or kept, or person having charge over such premises,
who refuses to admit an ATF officer acting under 26 U.S.C. 7606, or who
refuses to permit an ATF officer to examine beer shall, for each refusal,
forfeit $500.
(Act of August 16, 1954, 68A Stat. 872, 903, as amended (26 U.S.C. 7342, 7606))
Sec. 25.52 Variations from requirements.
(a) Exceptions to construction, equipment and methods of
operations
(1) General. The Director may approve details of construction,
equipment or methods of operations, in lieu of those specified in this
part. The brewer shall show that it is impracticable to conform to the
prescribed specification, and that the proposed variance: (i) will afford
the protection to the revenue intended by the specifications in this part; (ii)
will not hinder the effective administration of this part, and (iii) is
not contrary to any provision of law.
(2) Application. A brewer who proposes to employ methods
of operations or construction or equipment other than as provided in this part
shall submit an application to the regional director (compliance). The
application will describe the proposed variation and state the need for
it. The brewer shall submit drawings or photographs if necessary to describe
the proposed variation.
(3) Approval by Director. The Director may approve the use
of an alternate method or procedure if:
(i) The brewer shows good cause for its use;
(ii) It is consistent with the purpose and effect of the
procedure prescribed by this part and provides equal security to the revenue;
(iii) It is not contrary to law; and
(iv) It will not cause an increase in cost to the Government
and will not hinder the effective administration of this part.
(4) Exceptions. The Director may not authorize an alternate
method or procedure relating to the giving of any bond, or to the assessment, payment,
or collection of tax.
(5) Conditions of approval. A brewer may not employ an alternate method
or procedure until the Director has approved its use. The brewer shall,
during
[[Page 604]]
the terms of the authorization of an alternate method or procedure, comply
with the terms of the approved application.
(b) Emergency variations from requirements--
(1) Application. When an emergency exists, a brewer may apply to the regional director (compliance) for a variation from the requirements of this part relating to construction, equipment, and methods of operation. The brewer shall describe the proposed variation and set forth the reasons for using it.
(2) Approval. The regional director (compliance) may approve an emergency variation from requirements if:
(i) An emergency exists;
(ii) The variation
from the requirements is necessary;
(iii) It will afford
the same security and protection to the revenue as intended by the specific
regulations;
(iv) It will not hinder
the effective administration of this part; and
(v) It is not contrary
to law.
(3) Conditions of approval. A brewer may
not employ an emergency variation from the requirements until the regional
director (compliance) has approved its use. Approval of variations from
requirements are conditioned upon compliance with the conditions and limitations
set forth in the approval.
(c) Automatic termination
of approval. If the brewer fails to comply in good faith with the procedures,
conditions or limitations set forth in the approval, authority for the
variation from requirements is automatically terminated and the brewer
is required to comply with prescribed requirements of regulations.
(d) Withdrawal of approval.
The Director may withdraw approval of an alternate method or procedure,
approved under paragraph (a) of this section, if the Director finds that
the revenue is jeopardized or the effective administration of this part
is hindered by the approval. The regional director (compliance) may withdraw
approval of an emergency variation from requirements, approved under paragraph
(b) of this section, if the regional director (compliance) finds that the
revenue is jeopardized or the effective administration of this part is
hindered by the approval.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended, 1396, as amended (26
U.S.C. 5552, 5556))
Original Qualification
Sec. 25.61 General requirements for notice.
(a) Establishment. Operations as a brewer may be conducted
only by a person who has given notice as a brewer under this subpart. A
person may not commence the business of a brewer until the regional director (compliance)
approves the brewery and the brewer's notice, including all documents made
part of that notice.
(b) Brewer's Notice, Form 5130.10. Each person shall, before commencing
business as a brewer, give notice on Form 5130.10 to the regional director
(compliance) of the region in which the brewery is located. Each person
continuing business as a brewer as provided in Sec. 25.71 shall give notice
on Form 5130.10 to the regional director (compliance). Each notice will
be executed under penalties of perjury, and all written statements, affidavits,
and other documents submitted in support of the notice will be made part
of the notice.
(c) Additional information. The regional director (compliance)
may at any time require the brewer to furnish, as part of the notice, additional
information which is necessary to protect and insure collection of the
revenue.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))
Sec. 25.62 Data for notice.
(a) Required information. The brewer shall prepare the notice
on Form 5130.10 and shall include the following information:
(1) Serial number.
(2) Purpose for which filed.
(3) Name and principal business address of the brewer and
the location of the brewery if different from the business address.
[[Page 605]]
(4) Statement of the type of business organization and of
the persons interested in the business, supported by the information listed in
Sec. 25.66.
(5) Description of brewery, as specified in Sec. 25.68.
(6) A list of trade names which the brewer intends to use
in doing business or in packaging beer.
(7) A statement of process for fermented beverages if required
by Sec. 25.67.
(8) The name and address of the owner of the land or buildings comprising
the brewery, and of any mortgagee or other encumbrancer of the land or
buildings comprising the brewery.
(9) The 24-hour cycle of operations at the brewery which
is to be the brewer's business day.
(10) The process by which the brewer intends to render beer
unfit for beverage use when beer is to be removed for use in manufacturing under
Secs. 25.191-25.192.
(11) Statement showing ownership or controlling interests
in other breweries which will establish eligibility for the transfer of
beer without payment of tax between breweries of the same ownership, as authorized
in Sec. 25.181.
(12) The date of the notice and the name and signature of
the brewer or person authorized to sign on behalf of the brewer.
(b) Incorporation by reference. If any of the information
required by paragraph (a)(4) of this section is on file with the regional director
(compliance) of any ATF region in connection with the qualification of
any other premises operated by the brewer, that information, if accurate
and complete, may be incorporated into the brewer's notice by reference.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))
Sec. 25.63 Notice of registration.
The Brewer's Notice, Form 5130.10, when approved by the regional director
(compliance), will constitute the notice of registration of the brewery.
The regional director (compliance) will not approve the notice until the
notice and all incorporated documents are complete, accurate, and in compliance
with the requirements of this part. A person may not operate a brewery
until the notice required by this subpart has been approved by the regional
director (compliance).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))
Sec. 25.64 Maintenance of notice file.
The brewer shall maintain the approved Brewer's Notice, Form 5130.10,
and all incorporated documents at the brewery premises, in complete and
current condition, readily available for inspection by an ATF officer.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))
Sec. 25.65 Power of attorney.
The brewer shall execute and file with the regional director (compliance)
a Form 1534 (5000.8) for each person authorized to sign or act on behalf
on the brewer. The Form 1534 (5000.8) is not required for persons whose
authority is furnished in the Brewer's Notice, Form 5130.10.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))
Sec. 25.66 Organizational documents.
The supporting information required by paragraph (a)(4) of Sec.
25.62 includes, as applicable, the following:
(a) Corporate documents.
(1) Corporate charter or a certificate
of corporate existence or incorporation;
(2) List of directors and officers, showing
their names and addresses;
(3) Extracts or digests of minutes of
meetings of board of directors, authorizing certain individuals to sign
for the corporation; and
(4) Statement showing the number of shares
of stock or other evidence of ownership, authorized and outstanding, and
the voting rights of the respective owners or holders.
(b) Articles of partnership.
Copy of the articles of partnership or association, if any, or certificate
of partnership or association if required to be filed by any State, county,
or municipality.
(c) Statement of interest.
(1) Names and addresses of all persons having 10 percent or more stock
in the corporation, or other legal entity, and the nature and amount of
the stockholding or
[[Page 606]]
other interest of each, whether the interest appears in the name of the interested
party or in the name of another person. If a corporation is wholly owned
or controlled by another corporation, those persons of the parent corporation
who meet the above standards are considered to be the persons interested
in the business of the subsidiary, and the names thereof need be furnished
only upon request of the regional director (compliance); or
(2) In the case of an individual owner or partnership, the name and address
of each person holding an interest in the brewery, whether the interest
appears in the name of the interested party or in the name of another for
that person.
(d) Availability of additional corporate documents. The
originals of documents required to be submitted under this section, and
additional documents such as the articles of incorporation, bylaws, and
State certificates authorizing the brewer to operate in the State where located
(if other than the State in which the brewery is incorporated) shall be
made available to any ATF officer upon request. In the case of multiplant
brewers, these documents may be made available at the brewer's home brewery.
Each brewer's notice filed by multiplant brewers will state the location
where these corporate documents may be inspected.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))
Sec. 25.67 Statement of process.
(a) The Brewer's Notice, Form 5130.10 will contain a statement
of
process for any fermented beverage which the brewer intends to produce
and market under a name other than ``beer,'' ``ale,'' ``porter,''
``stout,'' ``lager,'' or ``malt liquor.''
(b) The statement of process will give the name or designation
of
the product, the kinds and quantities of materials to be used, the
method of manufacture, and the approximate alcohol content of the
finished product.
(c) A statement of process for any fermented beverage (other
than
sake or cereal beverage) will not be approved unless the base product
has the characteristics of beer as defined in Sec. 25.11.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended, 1388, as amended
(26 U.S.C. 5052, 5401))
Sec. 25.68 Description of brewery.
(a) The Brewer's Notice, Form 5130.10, will include a description
of
(1) each tract of land comprising the brewery, and (2) a listing of each
brewery building by its designated letter or number, giving the
approximate ground dimensions and the purpose for which ordinarily used.
(b) The description of the land will be in sufficient detail
to
enable ATF officers to determine the boundaries of the brewery.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))
Changes After Original Qualification
Sec. 25.71 Amended or superseding notices.
(a) Requirement for amended notice. (1) When there is a change
with
respect to the information shown in the Brewer's Notice, Form 5130.10,
the brewer shall within 30 days of the change (except as otherwise
provided in this subpart) submit to the regional director (compliance)
an amended notice setting forth the new information. Changed notices
will be submitted in skeleton form, with unchanged items marked ``No
change since Form 5130.10, Serial No. ______.''
(2) The regional director (compliance) may require immediate
filing
of an amended Form 5130.10 if the accuracy of existing documents has
been affected by any change.
(b) Requirement for superseding notice. (1) The regional
director
(compliance) may require a brewer to file a new and complete notice,
superseding those previously filed, in conjunction with the filing of a
new bond. This superseding notice will become effective on the date of
the brewer's bond or on the date of the brewer's bond continuation
certificate.
(2) If the information required by Sec. 25.62(a) (4), (5),
(6), (7),
(9), and (10) is on file as part of an approved Form 5130.10 and is
current, the brewer may
[[Page 607]]
incorporate by reference those documents as part of any superseding
notice.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))
Sec. 25.72 Change in proprietorship.
(a) General. If there is a change in the proprietorship of
a
brewery, the outgoing brewer shall comply with the requirements of
Sec. 25.85. The successor brewer shall, before beginning operations,
qualify in the same manner as the proprietor of a new brewery. The
successor brewer shall file a new notice and bond in his or her own
name. Beer on hand may be transferred without payment of tax to the
successor brewer and will be accounted for by that brewer.
(b) Fiduciary. (1) If the successor to the brewer is an
administrator, executor, receiver, trustee, assignee or other fiduciary,
the fiduciary may in lieu of filing a new notice and bond, file an
amended notice and furnish a consent of surety extending the terms of
the predecessor's bond or continuation certificate.
(2) The fiduciary shall furnish the regional director (compliance)
a
certified copy of the court order or other document showing
qualification as fiduciary. The effective date of the qualifying
documents filed by a fiduciary will be the same as the date of the
order, or the date therein specified for the fiduciary to assume
control. If the fiduciary was not appointed by the court, the date of
the appointment will be the effective date of the qualifying documents
filed by the fiduciary.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))
Sec. 25.73 Change in partnership.
(a) New notice required. The withdrawal of one or more members
of a
partnership or the taking in of a new partner, whether active or silent,
constitutes a change in proprietorship. Unless exempted by paragraph (b)
of this section, the death, bankruptcy or adjudicated insolvency of one
or more partners results in a dissolution of the partnership and a
change in proprietorship. The successor shall qualify the brewery in the
same manner as the proprietor of a new brewery.
(b) Continuing partnership. A surviving partner or partners
may
continue to operate the brewery for purposes of liquidation and
settlement under the following conditions:
(1) Under the laws of the State where the partnership was
formed,
the partnership is not terminated on death or insolvency of a
partner(s); and
(2) Under the laws of the State where the partnership was
formed,
the surviving partner(s) has the exclusive right to control and
possession of the partnership assets for the purpose of liquidation and
settlement; and
(3) A consent of surety is filed in which the surety and
the
surviving partner(s) agree to remain liable on the bond.
(c) Settlement of partnership. If the surviving partner(s)
acquires
the business on completion of the settlement of the partnership, that
partner(s) shall qualify in his or her own name from the date of
acquisition and give a new brewer's notice on Form 5130.10 and a new
bond on Form 5130.22.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))
[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986; 51 FR 10540, Mar. 27, 1986]
Sec. 25.74 Change in stockholders.
Changes in the list of stockholders furnished under the provisions
of Sec. 25.66(c)(1) shall be submitted annually by the brewer on July 1
or on any other date approved by the regional director (compliance).
When the sale or transfer of capital stock results in a change in the
control or management of the business, notification of the change will
be made within 30 days in accordance with Sec. 25.71.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))
Sec. 25.75 Change in officers and directors.
When there is any change in the list of officers or directors
furnished under the provisions of Sec. 25.66(a)(4), the brewer shall
submit, within 30 days of the change, an amended notice on Form 5130.10.
If the brewer has shown to the satisfaction of the regional director
[[Page 608]]
(compliance) that certain corporate officers listed on the original
notice have no responsibilities in connection with the operations
covered by the notice, the regional director (compliance) may waive the
requirements for submitting applications for amended notice to cover
changes of those corporate officers. In the case of multiplant brewers,
new brewers notices need not be filed for those breweries in which the
lists of officers and directors are incorporated by reference in their
brewer's notices under Sec. 25.62(b).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))
Sec. 25.76 Change in statement of process.
When there is a change in the information in a statement
of process
required by Sec. 25.62(a)(7) for any fermented beverage produced and
marketed under a name other than ``beer,'' ``ale,'' ``porter,''
``stout,'' ``lager,'' or ``malt liquor,'' the brewer shall submit an
amended notice and obtain approval of the notice prior to using the
changed statement of process.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))
Sec. 25.77 Change in location.
When there is a change in the location of the brewery, the
brewer
shall file an amended Form 5130.10, and a new bond, Form 5130.22, or a
consent of surety, Form 1533 (5000.18), in accordance with Sec. 25.91,
extending the terms of the bond or continuation certificate to cover
operations at the new location. The brewer may not begin operations at
the new location until the regional director (compliance) approves the
required documents.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))
Sec. 25.78 Change in premises.
Except as authorized in Sec. 25.81, when the brewery is to
be
extended or curtailed, the brewer shall file with the regional director
(compliance) an amended Form 5130.10. The additional facilities covered
by the extension may not be used for the proposed purposes, and the
portion to be curtailed may not be used for other than the previously
approved purposes, prior to approval of Form 5130.10
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))
Alternation of Operations
Sec. 25.81 Alternation of brewery and bonded or taxpaid wine premises.
(a) General. A brewer operating a contiguous bonded winery
or
taxpaid wine bottling house may, as provided in this section, alternate
the use of each premises by extension or curtailment.
(b) Qualifying documents. The brewer shall file with the
regional
director (compliance) and receive approval of the following qualifying
documents:
(1) ATF F 5120.25 and Form 5130.10 to cover the curtailment
and
extension of the premises to be alternated.
(2) Special diagrams, in duplicate, delineating the brewery
premises
and the bonded or taxpaid wine premises as they will exist both during
extension and curtailment. The diagrams will clearly depict all areas,
buildings, floors, rooms, equipment and pipelines which are to be
subject to alternation in their relative operating sequence.
(3) Evidence of existing bond, consent of surety, continuation
certificate, or a new bond to cover the proposed alternation of
premises.
(c) Brewer's responsibility. After approval of qualifying
documents,
the brewer may alternate the designated premises pursuant to a
letterhead notice submitted to the regional director (compliance)
through the ATF area supervisor. The notice will contain the information
required by paragraph (d) of this section. Prior to the effective date
and hour of the alternation, the brewer shall (1) remove all beer on
brewery premises to be alternated to bonded or taxpaid wine premises, or
(2) remove all wine from bonded to taxpaid wine premises to be
alternated to brewery premises.
(d) Information for notice. The notice required by paragraph
(c) of
this section will contain the following information:
(1) Plant name and address;
(2) Serial number;
(3) Effective date and hour of proposed change;
[[Page 609]]
(4) Whether premises are to be curtailed or extended;
(5) Purpose of curtailment or extension;
(6) Identification of the special diagram depicting the premises
as
they exist when curtailed or extended; and
(7) Date of execution and signature of brewer.
(e) Separation of premises. The regional director (compliance)
may
require that the portion of brewery or bonded or taxpaid wine premises
extended or curtailed under this section be separated, in a manner
satisfactory to the regional director (compliance), from the remaining
portion of the brewery or bonded or taxpaid premises.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended, 1389, as amended,
1390, as amended (26 U.S.C. 5401, 5411, 5415))
[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986; 51 FR 9190, Mar. 18, 1986; as
amended by T.D. ATF-299, 55 FR 24989, June 19, 1990]
Discontinuance of Business
Sec. 25.85 Notice of permanent discontinuance.
When a brewer desires to discontinue business premanently,
he or she
shall file with the regional director (compliance) a notice on Form
5130.10. The brewer shall state the purpose of the notice as
``Discontinuance of business'' and give the date of the discontinuance.
When all beer has been lawfully disposed of, the regional director
(compliance) will approve the Form 5130.10 and return a copy to the
brewer. The brewer shall file a report on Form 5130.9 showing no beer or
cereal beverage on hand and marked ``Final Report.''
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))
Subpart H--Bonds and Consents of Surety
Sec. 25.91 Requirement for bond.
(a) General. Every person intending to commence the business
of a
brewer shall file a bond, Form 5130.22, as prescribed in this subpart,
covering operations at the brewery, at the time of filing the original
Brewer's Notice, Form 5130.10. Every brewer intending to continue the
business of a brewer shall, once every 4 years, or as provided in
Sec. 25.95, execute and file a new bond, or continuation certificate as
provided in Sec. 25.97, with the regional director (compliance).
(b) Conditions of the bond. The Brewer's Bond, Form 5130.22,
will be
conditioned upon the brewer faithfully complying with all provisions of
law and regulations relating to the activities covered by the bond, and
upon paying all taxes imposed by 26 U.S.C. Chapter 51 and all interest
and penalties incurred or fines imposed for violations of those
provisions.
(c) Additional information. The regional director (compliance)
shall
require, in connection with any brewer's bond, a statement executed
under the penalties of perjury, as to whether the principal or any
person owning, controlling, or actively participating in the management
of the business of the principal has been convicted of or has
compromised any offense set forth in Sec. 25.101(a)(1), or has been
convicted of any offense set forth in Sec. 25.101(a)(2). In the event
the above statement contains an affirmative answer, the applicant shall
submit a statement describing in detail the circumstances surrounding
the conviction or compromise.
(d) Bond required before beginning business. A person may
not begin
business or continue business as a brewer until first receiving notice
that the regional director (compliance) has approved the bond,
continuation certificate, or consent of surety, as required by this
part.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401);
sec. 4(a), Pub. L. 91-673, 84 Stat. 2057 (26 U.S.C. 5417))
Sec. 25.92 Consent of surety.
A brewer may change the terms of any bond filed under this
part by
filing a consent of surety. Consents of surety will be executed on Form
1533 (5000.18) by the brewer and the surety on the bond, with the same
formality and proof of authorization as required for the execution of a
bond.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))
[[Page 610]]
Sec. 25.93 Penal sum of bond.
(a) Calculation. The penal sum of the brewer's bond will
be equal to
10 percent of the maximum amount of tax, calculated at the rates
prescribed by law, which the brewer will become liable to pay during a
calendar year during the period of the bond on beer:
(1) Removed for transfer to the brewery from other breweries
owned
by the same brewer;
(2) Removed without payment of tax for export or for use
as supplies
on vessels and aircraft;
(3) Removed without payment of tax for use in research, development,
or testing; and
(4) Removed for consumption or sale.
(b) Concentrate. A brewer who concentrates beer under subpart
R of
this part shall calculate the penal sum of the bond by computing 10
percent of the amount of tax at the rates prescribed by law, on the
maximum quantity of beer used in the production of concentrate during a
calendar year. The brewer shall add this amount to the penal sum
calculated under paragraph (a) of this section to determine the total
penal sum of the brewer's bond.
(c) Maximum and minimum penal sums. The maximum penal sum
of the
bond (or total penal sum if original and strengthening bonds are filed)
is not to exceed $150,000 when the tax on beer is to be prepaid, or
$500,000 when the tax is to be deferred as provided in Sec. 25.164. The
minimum penal sum of a bond is $1,000.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))
Sec. 25.94 Strengthening bonds.
(a) Requirement. When the penal sum of the brewer's bond
(calculated
as provided in Sec. 25.93) in effect is not sufficient, the principal
may prepay the tax on beer as provided in subpart K of this part, or
give a strengthening bond in sufficient penal sum if the surety is the
same as on the bond in effect. If the surety is not the same, a new bond
covering the entire liability is required.
(b) Restrictions. A strengthening bond may not in any way
release a
former bond or limit a bond to less than the full penal sum.
(c) Date of execution. Strengthening bonds will show the
current
date of execution and their effective date.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))
Sec. 25.95 New bond.
The regional director (compliance) may at any time, at his
or her
discretion, require a new bond. A new bond is required immediately in
the case of insolvency of a surety. Executors, administrators,
assignees, receivers, trustees, or other persons acting in a fiduciary
capacity shall execute a new bond or obtain a consent of surety on all
bonds in effect. When the interests of the Government so demand, or in
any case when the security of the bond becomes impaired for any reason,
the principal will be required to give a new bond. When a bond is found
to be not acceptable by the regional director (compliance), the
principal will be required immediately to obtain a new and satisfactory
bond or discontinue business.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))
Sec. 25.96 Superseding bond.
When the principal submits a new bond to supersede a bond
or bonds
in effect, the regional director (compliance) after approving the
superseding bond, will issue a notice of termination for the superseded
bond under the provisions of this subpart. Superseding bonds will show
the current date of execution and their effective date.
Sec. 25.97 Continuation certificate.
If the contract of surety between the brewer and the surety
on an
expiring bond or continuation certificate is continued in force for a
succeeding period of not less than 4 years from the expiration date of
the bond or continuation certificate, the brewer may submit, in lieu of
a new bond, a Brewer's Bond Continuation Certificate on Form 5130.23,
executed under the penalties of perjury, by the brewer and the surety
attesting to continuation of the bond. Each continuation certificate
will constitute a bond and all provisions of law and regulations
applicable to bonds on
[[Page 611]]
Form 5130.22 given under this part, including the disapproval of bonds,
are applicable to continuation certificates.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))
Sec. 25.98 Surety or security.
(a) Bond coverage. Bonds required by this part will be given
with
corporate surety or collateral security.
(b) Corporate surety. Surety bonds may be given only with
surety
companies holding certificates of authority from the Secretary as
acceptable sureties on Federal bonds, subject to the limitations set
forth in the current revision of Treasury Department Circular No. 570,
Companies Holding Certificates of Authority as Acceptable Reinsuring
Companies.
(c) Revisions of Circular No. 570. Treasury Department Circular
No.
570 is published in the Federal Register annually as of the first
workday in July. As they occur, interim revisions of the circular are
published in the Federal Register. Copies may be obtained from the
Surety Bond Branch, Financial Management Service, Department of the
Treasury, Washington, DC 20226.
(d) More than one corporate surety. A bond may be executed
by two or
more corporate sureties. Each corporate surety may limit its liability
in terms on the face of the bond in a specified amount. This amount may
not exceed the limitations set forth for corporate security by the
Secretary which are set forth in the current revision of Treasury
Department Circular No. 570. The sum of the liabilities for the sureties
will equal the required penal sum of the bond.
(e) Deposit of collateral securities in lieu of corporate
surety.
Bonds or notes of the United States, or other obligations which are
unconditionally guaranteed as to both interest and principal by the
United States, may be pledged and deposited by principals as collateral
security in lieu of corporate surety in accordance with 31 CFR Part 225.
(96 Stat. 1068, 1085 (31 U.S.C. 9304-9308); sec. 201, Pub. L. 85-859, 72
Stat. 1388, as amended (26 U.S.C. 5401))
Sec. 25.99 Filing powers of attorney.
Each bond, continuation certificate, and each consent of
surety will
be accompanied by a power of attorney authorizing the agent or officer
to execute the document. The power of attorney will be prepared on a
form provided by the surety company and executed under the corporate
seal of the company. If the power of attorney submitted is other than a
manually signed original, it will be accompanied by a certificate of its
validity.
(96 Stat. 1068, 1085 (31 U.S.C. 9304-9308))
Disapproval or Termination of Bonds
or Consents of Surety
Sec. 25.101 Disapproval of bonds or consents of surety.
(a) Reasons for disapproval. The regional director (compliance)
may
disapprove a bond or consent of surety if the individual, firm,
partnership, corporation, or association giving the bond or consent of
surety, or if any of the above entities owning, controlling or actively
participating in the management of a business giving a bond as a brewer,
has been previously convicted in a court of competent jurisdiction of:
(1) Any fraudulent noncompliance with any provision of law
of the
United States if it related to internal revenue or customs taxation of
distilled spirits, wines or beer, or if the offense shall have been
compromised with the individual, firm, partnership, corporation, or
association on payment of penalties or otherwise; or
(2) Any felony under a law of any State or the District of
Columbia,
or the United States, prohibiting the manufacture, sale, importation, or
transportation of distilled spirits, wines, beer, or other intoxicating
liquor.
(b) Appeal of disapproval. If the regional director (compliance)
disapproves a bond or consent of surety, the person giving the bond may
appeal the disapproval to the Director, who will grant a hearing in the
matter if requested by the applicant or brewer. The decision of the
Director shall be final.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1394, as amended (26 U.S.C. 5551))
[[Page 612]]
Sec. 25.102 Termination of surety's liability.
The liability of a surety on a bond required by this part
will be
terminated only as to liability arising on or after: (a) the effective
date of a superseding bond; (b) the date of approval of the
discontinuance of business of the brewer; or (c) following the giving of
notice by the surety as provided in Sec. 25.103.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))
Sec. 25.103 Notice by surety for relief from liability under bond.
A surety may, at any time, in writing, notify the principal
and the
regional director (compliance) that the surety desires after a specified
date (not less than 60 days after the date of service on the principal)
to be relieved of any liability under the bond which is incurred by the
principal after the date named in the notice. The surety shall include
proof of service of the notice on the principal with the notice filed
with the regional director (compliance). The notice will become
effective on the date named, unless the surety withdraws the notice, in
writing. The surety on the bond remains liable under the bond with
respect to any liability incurred by the principal while the bond is in
effect.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))
Sec. 25.104 Termination of bonds.
Brewer's bonds may be terminated as to liability for future
removals
or receipts (a) pursuant to application of the surety as provided in
Sec. 25.103, (b) on approval of a superseding bond, or (c) on
notification by the principal that the business has been discontinued.
On termination of the surety's liability under a bond, the regional
director (compliance) will notify the principal and sureties.
(31 U.S.C. 9301, 9303)
Sec. 25.105 Release of collateral security.
Bonds, notes, and other obligations of the United States,
pledged
and deposited as security in connection with bonds required by this part
will be released in accordance with 31 CFR Part 225. When the regional
director (compliance) determines there is no outstanding liability
against the bond and that it is no longer necessary to hold the
security, he or she shall fix the date or dates on which a part or all
of the security will be released. At any time prior to the release of
the security, the regional director (compliance) may, for proper cause,
extend the date of release of the security for an additional length of
time as may be appropriate.
(31 U.S.C. 9301, 9303)
Subpart I--Special Taxes
Liability for Special Tax
Sec. 25.111 Brewer's special tax.
(a) General. Every brewer shall pay a special (occupational)
tax at
the rate specified by Sec. 25.111a or Sec. 25.111b, whichever is
applicable. The tax shall be paid on or before the date of commencing
business as a brewer, and thereafter every year on or before July 1. On
commencing business, the tax shall be computed from the first day of the
month in which liability is incurred, through the following June 30.
Thereafter, the tax shall be computed for the entire year (July 1
through June 30).
(b) Transition rule. A brewer who was engaged in business
on January
1, 1988, and paid a special (occupational) tax for a taxable period
which began before January 1, 1988, and included that date, shall pay an
increased special tax for the period January 1, 1988, through June 30,
1988. The increased special tax shall not exceed one-half the excess (if
any) of (1) the rate of special tax in effect on January 1, 1988, over
(2) the rate of such tax in effect on December 31, 1987. The increased
special tax shall be paid on or before April 1, 1988.
(26 U.S.C. 5091, 5142)
[T.D. ATF-271, 53 FR 17547, May 17, 1988]
Sec. 25.111a Special tax rates.
(a) Prior rates. The special (occupational) tax imposed on
brewers
prior to January 1, 1988, was $110 a year, except that the special tax
for any brewer of less than 500 barrels a year was $55 a year.
(b) Rate effective January 1, 1988. The special tax rate
imposed on
brewers
[[Page 613]]
(other than small brewers as defined in Sec. 25.111b) is $1000 a year.
(26 U.S.C. 5091)
[T.D. ATF-271, 53 FR 17547, May 17, 1988]
Sec. 25.111b Reduced rate of tax for small brewers.
(a) General. Effective January 1, 1988, 26 U.S.C. 5091(b)
provides
for a reduced rate of tax with respect to any brewer whose gross
receipts (for the most recent taxable year ending before the first day
of the taxable period to which the tax imposed by Sec. 25.111 relates)
are less than $500,000. The rate of tax for such a brewer is $500 a
year. The ``taxable year'' to be used for determining gross receipts is
the taxpayer's income tax year. All gross receipts of the taxpayer shall
be included, not just the gross receipts of the business subject to
special tax. Proprietors of new businesses that have not yet begun a
taxable year, as well as proprietors of existing businesses that have
not yet ended a taxable year, who commence a new activity subject to
special tax, qualify for the reduced special (occupational) tax rate,
unless the business is a member of a ``controlled group''; in that case,
the rules of paragraph (b) of this section shall apply.
(b) Controlled group. In determining gross receipts, all
persons
treated as one taxpayer under 26 U.S.C. 5061(e)(3) shall be treated as
one taxpayer for purposes of paragraph (a) of this section. ``Controlled
group'' means a controlled group of corporations, as defined in 26
U.S.C. 1563, and implementing regulations in 26 CFR 1.1563-1 through
1.1563-4, except that the words ``at least 80 percent'' shall be
replaced by the words ``more than 50 percent'' in each place they appear
in subsection (a) of 26 U.S.C. 1563, as well as in the implementing
regulations. Also, the rules for a ``controlled group of corporations''
apply in a similar fashion to groups which include partnerships and/or
sole proprietorships. If one entity maintains more than 50% control over
a group consisting of corporations and one, or more, partnerships and/or
sole proprietorships, all of the members of the controlled group are one
taxpayer for the purpose of this section.
(c) Short taxable year. Gross receipts for any taxable year
of less
than 12 months shall be annualized by multiplying the gross receipts for
the short period by 12 and dividing the result by the number of months
in the short period as required by 26 U.S.C. 448(c)(3).
(d) Returns and allowances. Gross receipts for any taxable
year
shall be reduced by returns and allowances made during that year under
26 U.S.C. 448(c)(3).
(26 U.S.C. 448, 5061, 5091)
[T.D. ATF-271, 53 FR 17547, May 17, 1988]
Sec. 25.112 Wholesaler's special tax.
A brewer shall be subject to or exempt from a wholesaler's
special
(occupational) tax as provided in Part 194 of this chapter.
(26 U.S.C. 5111, 5142)
[T.D. ATF-271, 53 FR 17548, May 17, 1988]
Sec. 25.113 Each place of business taxable.
(a) General. A brewer incurs special tax liability at each
place of
business in which an occupation subject to special tax is conducted. A
place of business means the entire office, plant or area of the business
in any one location under the same proprietorship. Passageways, streets,
highways, rail crossings, waterways, or partitions dividing the premises
are not sufficient separation to require additional special tax, if the
divisions of the premises are otherwise contiguous.
(b) Exception for contiguous areas. A brewer will not incur
additional special tax liability for sales of beer made at a location
other than on brewery premises described on the brewer's notice, Form
5130.10, if the location where such sales are made is contiguous to the
brewery premises in the manner described in paragraph (a) of this
section.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1347, as amended (26 U.S.C. 5143))
Sec. 25.114 Exemptions from dealer's special taxes.
(a) Brewer. A brewer is not required to pay special tax as
a
wholesale or retail dealer in beer because of sales, at the principal
place of business or at the brewery, of beer which at the time of
[[Page 614]]
sale is stored at the brewery or which had been removed and stored in a
taxpaid storeroom operated in connection with the brewery. Each brewer
shall have only one exemption from dealer's special tax for each
brewery. The brewer may designate, in writing to the regional director
(compliance), that the principal place of business will be exempt from
dealer's special tax; otherwise, the exemption will apply to the
brewery.
(b) Wholesale dealer. A wholesale dealer in beer who has
paid the
appropriate special tax will not again be required to pay special tax as
a wholesale dealer in beer because of sales of beer to wholesale or
retail dealers in liquors or beer or to limited retail dealers, at the
purchaser's place of business.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1340, as amended (26 U.S.C. 5113))
Execution of Special Tax Returns
Sec. 25.117 Special tax returns.
Special tax shall be paid by return. The prescribed return
is ATF
Form 5630.5, Special Tax Registration and Return. Special tax returns,
with payment of tax, shall be filed with ATF in accordance with
instructions on the form.
[T.D. ATF-271, 53 FR 17548, May 17, 1988]
Sec. 25.118 Preparation of ATF Form 5630.5.
All of the information called for on Form 5630.5 shall be
provided,
including:
(a) The true name of the taxpayer.
(b) The trade name(s) (if any) of the business(es) subject
to
special tax.
(c) The employer identification number (see Sec. 25.121).
(d) The exact location of the place of business, by name
and number
of building or street, or if these do not exist, by some description in
addition to the post office address. In the case of one return for two
or more locations, the address to be shown shall be the taxpayer's
principal place of business (or principal office, in the case of a
corporate taxpayer).
(e) The class(es) of special tax to which the taxpayer is
subject.
(f) Ownership and control information: that is, the name,
position,
and residence address of every owner of the business and of every person
having power to control its management and policies with respect to the
activity subject to special tax. ``Owner of the business'' shall include
every partner, if the taxpayer is a partnership, and every person owning
10% or more of its stock, if the taxpayer is a corporation. However, the
ownership and control information required by this paragraph need not be
stated if the same information has been previously provided to ATF in
connection with the Brewer's Notice, and if the information previously
provided is still current.
[T.D. ATF-271, 53 FR 17548, May 17, 1988]
Sec. 25.119 Multiple locations and/or classes of tax.
A taxpayer subject to special tax for the same period at
more than
one location or for more than one class of tax shall--
(a) File one special tax return, ATF Form 5630.5, with payment
of
tax, to cover all such locations and classes of tax; and
(b) Prepare, in duplicate, a list identified with the taxpayer's
name, address (as shown on ATF Form 5630.5), employer identification
number, and period covered by the return. The list shall show, by
States, the name, address, and tax class of each location for which
special tax is being paid. The original of the list shall be filed with
ATF in accordance with instructions on the return, and the copy shall be
retained at the taxpayer's principal place of business (or principal
office, in the case of a corporate taxpayer) for the period specified in
Sec. 25.300(c).
[T.D. ATF-271, 53 FR 17548, May 17, 1988]
Sec. 25.120 Signing of ATF Forms 5630.5.
(a) Ordinary returns. The return of an individual proprietor
shall
be signed by the individual. The return of a partnership shall be signed
by a general partner. The return of a corporation shall be signed by any
officer. In each case, the person signing the return shall designate his
or her capacity as ``individual owner,'' ``member of firm,'' or, in the
case of a corporation, the title of the officer.
[[Page 615]]
(b) Fiduciaries. Receivers, trustees, assignees, executors,
administrators, and other legal representatives who continue the
business of a bankrupt, insolvent, deceased person, etc., shall indicate
the fiduciary capacity in which they act.
(c) Agent or attorney in fact. If a return is signed by an
agent or
attorney in fact, the signature shall be preceded by the name of the
principal and followed by the title of the agent or attorney in fact. A
return signed by a person as agent will not be accepted unless there is
filed, with the ATF office with which the return is required to be
filed, a power of attorney authorizing the agent to perform the act.
(d) Perjury statement. ATF Forms 5630.5 shall contain or
be verified
by a written declaration that the return has been executed under the
penalties of perjury.
(26 U.S.C. 5142, 6061, 6065, 6151, 7011)
[T.D. ATF-271, 53 FR 17548, May 17, 1988]
Employer Identification Numbers
Sec. 25.121 Employer identification number.
The employer identification number (defined in 26 CFR 301.7701-12)
of the taxpayer who has been assigned such a number shall be shown on
each special tax return, including amended returns, filed under this
subpart. Failure of the taxpayer to include the employer identification
number may result in the imposition of the penalty specified in
Sec. 70.113 of this chapter.
(26 U.S.C. 6109, 6676)
[T.D. ATF-271, 53 FR 17548, May 17, 1988, as amended by T.D. ATF-301, 55
FR 47605, Nov. 14, 1990]
Sec. 25.122 Application for employer identification number.
Each taxpayer who files a special tax return, who has not
already
been assigned an employer identification number, shall file IRS Form SS-
4 to apply for one. The taxpayer shall apply for and be assigned only
one employer identification number, regardless of the number of places
of business for which the taxpayer is required to file a special tax
return. The employer identification number shall be applied for no later
than 7 days after the filing of the taxpayer's first special tax return.
IRS Form SS-4 may be obtained from the director of an IRS service center
or from any IRS district director.
(26 U.S.C. 6109)
[T.D. ATF-271, 53 FR 17548, May 17, 1988]
Sec. 25.123 Preparation and filing of IRS Form SS-4.
The taxpayer shall prepare and file IRS Form SS-4, together
with any
supplementary statement, in accordance with the instructions on the form
or issued in respect to it.
(26 U.S.C. 6109)
[T.D. ATF-271, 53 FR 17549, May 17, 1988]
Special Tax Stamps
Sec. 25.125 Issuance of special tax stamps.
Upon filing a properly executed return on ATF Form 5630.5,
together
with the full remittance, the taxpayer will be issued an appropriately
designated special tax stamp. If the return covers multiple locations,
the taxpayer will be issued one appropriately designated stamp for each
location listed on the attachment required by Sec. 25.119, but showing,
as to name and address, only the name of the taxpayer and the address of
the taxpayer's principal place of business (or principal office in the
case of a corporate taxpayer).
(26 U.S.C. 6806)
[T.D. ATF-271, 53 FR 17549, May 17, 1988]
Sec. 25.126 Distribution of stamps for multiple locations.
On receipt of the special tax stamps, the taxpayer shall
verify that
there is one stamp for each location listed on the attachment to Form
5630.5. The taxpayer shall designate one stamp for each location and
type on each stamp the address of the business conducted for which that
stamp is designated. The taxpayer shall then forward each stamp to the
place of business designated on the stamp.
[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-251, 52
FR 19313, May 22, 1987]
[[Page 616]]
Sec. 25.127 Examination of special tax stamps.
All stamps denoting payment of special tax will be kept available
for inspection by ATF officers, at the location for which designated,
during business hours.
(Act of August 16, 1954 68A Stat. 831, as amended (26 U.S.C. 6806); sec.
201, Pub. L. 85-859, 72 Stat. 1348, as amended (26 U.S.C. 5146))
Changes in Special Tax Stamps
Sec. 25.131 Change in name.
If there is a change in the corporate or firm name, or in
the trade
name, as shown on Form 5630.5, the brewer shall file an amended special
tax return as soon as practicable after the change covering the new
corporate or firm name, or trade names. No new special tax is required
to be paid. The brewer shall attach the special tax stamp for
endorsement of the change in name.
(26 U.S.C. 7011)
[T.D. ATF-271, 53 FR 17549, May 17, 1988]
Sec. 25.132 Change in proprietorship.
(a) General. If there is a change in the proprietorship of
a
brewery, the successor shall obtain the required special tax stamps.
(b) Exemption for certain successors. Persons having the
right of
succession provided for in Sec. 25.133 may carry on the business for the
remainder of the period for which the special tax was paid, if within 30
days after the date on which the successor begins to carry on the
business, the successor files a return on Form 5630.5, which shows the
basis of succession. A person who is a successor to a business for which
special tax has been paid and who fails to register the succession is
liable for special tax computed from the first day of the calendar month
in which he or she began to carry on the business.
(Act of August 16, 1954, 68A Stat. 845, as amended (26 U.S.C. 7011);
sec. 201, Pub. L. 85-859, 72 Stat. 1347, as amended (26 U.S.C. 5143))
[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-251, 52
FR 19313, May 22, 1987]
Sec. 25.133 Persons having right of succession.
Under the conditions indicated in Sec. 25.132, the right
of
succession will pass to certain persons in the following cases:
(a) Death. The widowed spouse or child, or executor, administrator,
or other legal representative of the taxpayer;
(b) Succession of spouse. A husband or wife succeeding to
the
business of his or her spouse (living);
(c) Insolvency. A receiver or trustee in bankruptcy, or an
assignee
for benefit of creditors;
(d) Withdrawal from firm. The partner or partners remaining
after
death or withdrawal of a member.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1347, as amended (25 U.S.C. 5143))
Sec. 25.134 Change in location.
If there is a change in location of a taxable place of business,
the
brewer shall, within 30 days after the change, file with ATF an amended
special tax return covering the new location. The brewer shall attach
the special tax stamp or stamps, for endorsement of the change in
location. No new special tax is required to be paid. However, if the
brewer does not file the amended return within 30 days, the brewer is
required to pay a new special tax and obtain a new special tax stamp.
(26 U.S.C. 5143, 7011)
[T.D. ATF-271, 53 FR 17549, May 17, 1988]
Subpart J--Marks, Brands, and Labels
Sec. 25.141 Barrels and kegs.
(a) General requirements. The brewer's name or trade name
and the
place of production (city and, if necessary for identification, State)
shall be permanently marked on each barrel or keg. If the place of
production is clearly shown on the bung or on the tap cover, or on a
label securely affixed to each barrel or keg, the place of production
need not be permanently marked on each barrel or keg. No statement as to
payment of internal revenue taxes may be shown.
[[Page 617]]
(b) Breweries of same ownership. (1) If two or more breweries
are
owned or operated by the same person, firm, or corporation (as defined
in Sec. 25.181), the place of production:
(i) May be shown as the only location on the bung, or on
the tap
cover, or on a separate label attached to the keg;
(ii) May be included in a listing of the locations of breweries
qualified under this part if the place of production is not given less
emphasis than any of the other locations; or
(iii) Need not be shown if the brewer's principal place of
business
is shown in lieu of any other location. The brewer's principal place of
business will be the location of a brewery operated by the brewer and
qualified under this part.
(2) If the location of two or more breweries is shown on
the keg,
bung, tap cover, or on a separate label attached to the keg (paragraph
(b)(1)(ii)), or if the brewer's principal place of business is shown in
lieu of the actual place of production (paragraph (b)(1)(iii)), the
brewer shall indicate the actual place of production by printing, coding
or other markings on the keg, bung, tap cover, or on a separate label
attached to the keg. The coding system employed will permit an ATF
officer to determine the place of production (including street address
if two or more breweries are located in the same city) of the beer. The
brewer shall notify the regional director (compliance) prior to
employing a coding system.
(c) Label approval required. Labels or tap covers used by
brewers
shall be covered by certificates of label approval, Form 5100.31, when
required by Part 7 of this chapter.
(Approved by the Office of Management and Budget under control number
1512-0474)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5412))
[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-225, 51
FR 8492, Mar. 12, 1986]
Sec. 25.142 Bottles.
(a) Label requirements. Each bottle of beer shall show by
label or
otherwise the name or trade name of the brewer, the net contents of the
bottle, the nature of the product such as beer, ale, porter, stout,
etc., and the place of production (city and, when necessary for
identification, State). No statement as to payment of internal revenue
taxes may be shown.
(b) Breweries of same ownership. (1) If two or more breweries
are
owned or operated by the same person, firm, or corporation (as defined
in Sec. 25.181), the place of production:
(i) May be shown as the only location on the label;
(ii) May be included in a listing of the locations of breweries
qualified under this part if the place of production is not given less
emphasis than any of the other locations; or
(iii) Need not be shown if the brewer's principal place of
business
is shown in lieu of any other location. The brewer's principal place of
business will be the location of a brewery operated by the brewer and
qualified under this part.
(2) If the location of two or more breweries is shown on
the label
(paragraph (b)(1)(ii)), or if the brewer's principal place of business
is shown on the label in lieu of the actual place of production
(paragraph (b)(1)(iii)), the brewer shall indicate the actual place of
production by printing, coding or other markings on the label, bottle,
crown or lid. The coding system employed will permit an ATF officer to
determine the place of production (including street address if two or
more breweries are located in the same city) of the beer. The brewer
shall notify the regional director (compliance) prior to employing a
coding system.
(c) Distinctive names. If the brewer's name, trade name or
brand
name includes the name of a city which is not the place where the beer
was produced, the Director may require the brewer to state the actual
place of production on the label.
(d) Tolerances. The statement of net contents shall indicate
exactly
the volume of beer within the bottle except for variations in measuring
as may occur in filling conducted in compliance with good commercial
practice. The barrel equivalent of bottles filled during a consecutive
three month period, calculated on the basis of the brewer's fill test
records, may not vary more than 0.5 percent from the barrel equivalent
of bottles filled during the
[[Page 618]]
same period, calculated on the basis of the stated net contents of the
bottles. The brewer is liable for the tax on the entire amount of beer
removed, without benefit of tolerance, when the fill of bottles and cans
exceeds the tolerance for the three month period, or when filling is not
conducted in compliance with good commercial practice.
(e) Label approval required. Labels used by brewers shall
be covered
by certificates of label approval, Form 5100.31, when required by Part 7
of this chapter.
(f) Short-fill bottles. A brewer may dispose of taxpaid short-fill
bottles of beer to employees for their use but not for resale. These
bottles need not be labeled, but if labeled they need not show an
accurate statement of net contents.
(Approved by the Office of Management and Budget under control number
1512-0474)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5412))
[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-225, 51
FR 8492, Mar. 12, 1986]
Sec. 25.143 Cases.
(a) Brewer's name. The brewer's name or trade name will be
shown on
each case or other shipping container of bottled beer. A brewer may use
unmarked cases to hold:
(1) Cartons of beer, if the visible portion of the cartons
shows the
required name; or
(2) Bottles or cans with plastic carriers, if the visible
portion of
the bottles or cans shows the required name.
(b) Other information. The brewer may show on a case or shipping
container the place of production (city and, when necessary for
identification, State), and the addresses of other breweries owned by
the same person, firm, or corporation (as defined in Sec. 25.181). If
only one address is shown, it will be that of the producing brewery, or
of the brewer's principal place of business.
(Approved by the Office of Management and Budget under control number
1512-0474)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5412))
[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-225, 51
FR 8492, Mar. 12, 1986]
Sec. 25.144 Rebranding barrels and kegs.
(a) A brewer may not use a barrel or keg which bears the
name of
more than one brewer, and except as provided in Sec. 25.231, may not use
a barrel or keg bearing the name of a brewer other than the producing
brewer.
(b) A brewer who purchases or otherwise obtains barrels or
kegs from
another brewer shall permanently remove or durably cover the original
marks and brands after notifying the regional director (compliance) of
the proposed action. A brewer may use the barrels or kegs obtained
without removing or covering the original marks and brands if the
brewer: (1) Adopts a trade name substantially identical to the name
appearing on the barrels or kegs; or (2) succeeds to a brewer who has
discontinued business, in which case the brewer may add marks or brands,
in accordance with Sec. 25.141, which indicate ownership.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5412))
Sec. 25.145 Tanks, vehicles, and vessels.
(a) Each brewer who transfers beer to another brewery of
the same
ownership (as defined in Sec. 25.181), or who exports beer without
payment of tax, as provided in Sec. 25.203, shall plainly and durably
mark each tank, tank car, tank truck, tank ship, barge, or deep tank of
a vessel in accordance with paragraph (b) of this section. These marks
may be placed on a label securely affixed to the route board of the
container.
(b) The brewer shall mark each container with--
(1) The designation ``Beer'';
(2) The brewer's name;
(3) The address of the brewery from which removed;
(4) The address of the brewery to which transferred or the
marks
required for exportation in Part 252 of this chapter, as applicable;
(5) The date of shipment; and
(6) The quantity, expressed in barrels.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended, 1389, as amended
(26 U.S.C. 5053, 5414))
[[Page 619]]
Subpart K--Tax on Beer
Liability for Tax
Sec. 25.151 Rate of tax.
All beer, brewed or produced, and removed for consumption
or sale,
is subject to the tax prescribed by 26 U.S.C. 5051, for every barrel
containing not more than 31 gallons, and at a like rate for any other
quantity or for the fractional parts of a barrel as authorized in
Sec. 25.156.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended (26 U.S.C. 5051,
5052))
Sec. 25.152 Reduced rate of tax for certain brewers.
(a) General. Section 5051(a)(2) of Title 26 U.S.C. provides
for a
reduced rate of tax on the first 60,000 barrels of beer removed for
consumption or sale by a brewer during a calendar year. To be eligible
to pay the reduced rate of tax, a brewer:
(1) Shall brew or produce the beer at a qualified brewery
in the
United States;
(2) May not produce more than 2,000,000 barrels of beer per
calendar
year; and
(3) May not be a member of a ``controlled group'' of brewers
whose
members together produce more than 2,000,000 barrels of beer per
calendar year.
The regional director (compliance) shall deny use of the reduced rate of
tax provided by 26 U.S.C. 5051(a)(2) where it is determined that the
allowance of such a reduced rate would benefit a person who would
otherwise fail to qualify for use of such rate.
(b) Definitions. For the purpose of determining eligibility
for
payment of the reduced rate of tax on beer, terms have the following
meanings:
(1) Controlled group. A related group of brewers as defined
in 26
U.S.C. 5051(a)(2)(B). Controlled groups include, but are not limited to:
(i) Parent-subsidiary controlled groups as defined in 26
CFR 1.1563-
1(a)(2);
(ii) Brother-sister controlled groups as defined in 26 CFR
1.1563-
1(a)(3); and
(iii) Combined groups as defined in 26 CFR 1.1563-1(a)(4).
Stock
ownership in a corporation need not be direct and 51% constructive
ownership, defined in 26 CFR 1.1563-3, may be acquired through:
(A) An option to purchase stock;
(B) Attribution from partnerships;
(C) Attribution from estate or trusts;
(D) Attribution from corporations; or
(E) Ownership by spouses, children, grandchildren, parents,
and
grandparents.
(2) Production of beer. The production of beer as recorded
in the
brewer's daily records and reported in the Brewer's Report of
Operations, Form 5130.9. For the purpose of determining compliance with
the 2,000,000 barrel limitation, production of beer by a brewer or a
controlled group of brewers includes both beer produced at qualified
breweries within the United States and beer produced outside the United
States.
(c) Brewers operating more than one brewery. Brewers who
operate
more than one brewery shall include the combined production of beer at
all their breweries when determining eligibility under the 2,000,000
barrel limitation. The reduced rate of tax applies to the first 60,000
barrels of beer removed for consumption or sale in a calendar year by
the brewer; the brewer shall apportion the 60,000 barrels among the
breweries in the manner described in the notice as provided by
Sec. 25.167(b)(3).
(d) Controlled groups of brewers. Members of a controlled
group of
brewers shall include the combined production of beer by all member
brewers when determining eligibility under the 2,000,000 limitation. The
reduced rate of tax applies to the first 60,000 barrels of beer removed
for consumption or sale in a calendar year by the controlled group of
brewers; the controlled group of brewers shall apportion the 60,000
barrels among member brewers in the manner described in each brewer's
notice as provided by Sec. 25.167(b)(3).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended (26 U.S.C. 5052))
[T.D. ATD-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-307, 55
FR 52738, Dec. 21, 1990; T.D. ATF-345, 58 FR 40357, July 28, 1993]
Sec. 25.153 Persons liable for tax.
The tax imposed by law on beer (including beer purchased
or procured
by one brewer from another) shall be paid
[[Page 620]]
by the brewer of the beer at the brewery where produced. The tax on beer
transferred to a brewery from other breweries owned by the same brewer
in accordance with subpart L of this part shall be paid by the brewer at
the brewery from which the beer is removed for consumption or sale.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended, 1389, as amended
(26 U.S.C. 5054, 5413, 5414))
Determination of Tax
Sec. 25.155 Types of containers.
Beer may be removed from a brewery for consumption or sale
only in
barrels, kegs, bottles, and similar containers, as provided in this
part. A container which the Director determines to be similar to a
bottle or can will be treated as a bottle for purposes of this part. A
container which the Director determines to be similar to a barrel or keg
and which conforms to one of the sizes prescribed for barrels or kegs in
Sec. 25.156 will be treated as such for purposes of this part.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended, 1390, as amended
(26 U.S.C. 5412, 5416))
Sec. 25.156 Determination of tax on keg beer.
(a) In determining the tax on beer removed in kegs, a barrel
is
regarded as a quantity of not more than 31 gallons. The authorized
fractional parts of a barrel are whole barrels, halves, thirds,
quarters, sixths, and eighths, and beer may be removed in kegs rated at
those capacities. The following keg sizes are also authorized at the
stated barrel equivalents:
------------------------------------------------------------------------
Barrel
Size of keg
equivalent
------------------------------------------------------------------------
5 gallons..................................................
0.16129
30 liter...................................................
0.25565
50 liter...................................................
0.42608
------------------------------------------------------------------------
(b) If any barrel or authorized size keg contains a quantity
of beer
more than 2 percent in excess of its rated capacity, tax will be
determined and paid on the actual quantity of beer (without benefit of
any tolerance) contained in the keg.
(c) The quantities of keg beer removed subject to tax will
be
computed to 5 decimal places. The sum of the quantities computed for any
one day will be rounded to 2 decimal places and the tax will be
calculated and paid on the rounded sum.
(26 U.S.C. 5051)
[T.D. ATF-345, 58 FR 40357, July 28, 1993]
Sec. 25.157 Determination of tax on bottled beer.
The quantities of bottled beer removed subject to tax shall
be
computed to 5 decimal places in accordance with the table and
instructions in Sec. 25.158. The sum of the quantities computed for any
one day will be rounded to 2 decimal places and the tax will be
calculated and paid on the rounded sum.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended (26 U.S.C. 5051))
Sec. 25.158 Tax computation for bottled beer.
Barrel equivalents for various case sizes are as follows:
(a) For U.S. measure bottles.
------------------------------------------------------------------------
Number of
Bottle size (net contents in fluid ounces)
bottles Barrel
per case equivalent
------------------------------------------------------------------------
6................................................
12 0.01815
6................................................
24 0.03629
7................................................
12 0.02117
7................................................
24 0.04234
7................................................
32 0.05645
7................................................
35 0.06174
7................................................
36 0.06351
7................................................
40 0.07056
7................................................
48 0.08468
8................................................
12 0.02419
8................................................
24 0.04839
8................................................
36 0.07258
8................................................
48 0.09677
10...............................................
12 0.03024
10...............................................
24 0.06048
10...............................................
48 0.12097
11...............................................
12 0.03327
11...............................................
24 0.06653
11.5.............................................
24 0.06956
12...............................................
12 0.03629
12...............................................
15 0.04536
12...............................................
20 0.06048
12...............................................
24 0.07258
12...............................................
30 0.09073
12...............................................
48 0.14516
12...............................................
50 0.15121
14...............................................
12 0.04234
14...............................................
24 0.08468
16 (1 pint)......................................
12 0.04839
16 (1 pint)......................................
24 0.09677
22...............................................
12 0.06653
22...............................................
24 0.13306
24...............................................
12 0.07258
24...............................................
24 0.14516
[[Page 621]]
30...............................................
12 0.09073
32 (1 quart).....................................
12 0.09677
40...............................................
12 0.12097
64...............................................
1 0.01613
64...............................................
4 0.06452
64...............................................
6 0.09677
128 (1 gallon)...................................
1 0.03226
288..............................................
1 0.07258
------------------------------------------------------------------------
(b) For metric measure bottles.
------------------------------------------------------------------------
Number of
Bottle size (metric net contents)
bottles Barrel
per case equivalent
------------------------------------------------------------------------
500 milliliters..................................
24 0.10226
750 milliliters..................................
12 0.07670
1 liter..........................................
12 0.10226
2 liters.........................................
6 0.10226
5 liters.........................................
1 0.04261
------------------------------------------------------------------------
(c) For other case sizes. If beer is to be removed in cases
or
bottles of sizes other than those listed in the above tables, the brewer
shall notify the regional director (compliance) in advance and request
to be advised of the fractional barrel equivalent applicable to the
proposed case size.
(26 U.S.C. 5412)
[T.D. ATF-345, 58 FR 40357, July 28, 1993]
Sec. 25.159 Time of tax determination and payment; offsets.
(a) Time and payment. The tax on beer will be determined
at the time
of its removal for consumption or sale, and will be paid by return as
provided in this part.
(b) Offsets. During any business day, the quantity of beer
returned
to the same brewery from which removed is to be taken as an offset
against or deducted from the total quantity of beer removed for
consumption or sale from that brewery on the day that the beer is
returned.
(c) Offsets not allowed. An offset or deduction for returned
beer
will not be allowed if:
(1) The brewer was indemnified by insurance or otherwise
in respect
of the tax; or
(2) The brewer does not issue credit to the customer for
the tax on
the returned beer within 30 days of the return of the beer. If the tax
is not timely credited after the offset or deduction is taken, the
brewer shall make an increasing adjustment on the next tax return.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended, 1335, as amended
(26 U.S.C. 5054, 5056, 5061))
Sec. 25.160 Tax adjustment for brewers who produce more than 2,000,000
barrels of beer.
Each brewer who has paid tax on beer by return, Form 5000.24,
at the
reduced rate of tax during a calendar year, but whose production (or the
production of a controlled group of brewers of which the brewer is a
member) exceeds 2,000.000 barrels of beer in that calendar year, is no
longer eligible to pay tax on beer at the reduced rate of tax for any
beer removed that calendar year for comsumption or sale. The brewer
shall make a tax adjustment for the payment of additional tax no later
than the return period in which production (or the production of a
controlled group of brewers of which the brewer is a member) exceeds
2,000,000 barrels of beer. The adjustment will be determined by
multiplying the difference between the higher and lower rates of tax
applicable to beer by the number of barrels removed by the brewer that
year at the reduced rate of tax. The brewer shall make tax adjustments
for all breweries where tax was paid at the lower rate that year, and
shall include interest payable from the date on which tax was paid at
the lower rate. In the case of a controlled group of brewers whose
production exceeds 2,000,000 barrels of beer, all member brewers who
paid tax at the lower rate shall make tax adjustments as determined in
this section.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended (26 U.S.C. 5051))
Preparation and Remittance of Tax Returns
Sec. 25.163 Method of tax payment.
A brewer shall pay the tax on beer by return on Form 5000.24,
as
provided in Secs. 25.164, 25.164a, 25.173 and 25.175. The brewer shall
pay the tax by remittance at the time the tax return is rendered, and
the remittance will be by check or money order payable to the ``Bureau
of Alcohol, Tobacco and Firearms'' and
[[Page 622]]
mailed with the return, or will be effected by an electronic fund
transfer. In paying the tax, a fractional part of a cent will be
disregarded unless it amounts to one-half cent or more, in which case it
will be increased to one cent.
[T.D. ATF-251, 52 FR 19314, May 22, 1987, as amended by T.D. ATF-365, 60
FR 33669, June 28, 1995]
Sec. 25.164 Semimonthly return.
(a) Requirement for filing. Each brewer shall pay the tax
on beer
(unless prepaid) by semimonthly return on Form 5000.24. The brewer shall
file Form 5000.24 as a semimonthly return regardless of whether tax has
been prepaid as provided in Sec. 25.175 during the return period. The
brewer shall file a return on Form 5000.24 for each return period even
though no beer was removed for consumption or sale.
(b) Payment of tax. The brewer shall include for payment
with the
return the full amount of tax required to be determined (and which has
not been prepaid) on all beer removed for consumption or sale during the
period covered by the return.
(c) Return periods. Except as provided in Sec. 25.164a, return
periods run from the brewer's business day beginning on the first day of
each month through the brewer's business day beginning on the 15th day
of that month, and from the brewer's business day beginning on the 16th
day of the month through the brewer's business day beginning on the last
day of the month.
(d) Time for filing returns and paying tax. Except as provided
in
Sec. 25.164a the brewer shall file the semimonthly tax return, Form
5000.24, for each return period, and make remittance as required by this
section, not later than the 14th day after the last day of the return
period. If the due date falls on a Saturday, Sunday, or legal holiday,
the return and remittance shall be due on the immediately preceding day
which is not a Saturday, Sunday, or legal holiday, except as provided by
Sec. 25.164a(c).
(e) Timely filing. (1) When the brewer sends the semimonthly
tax
return, Form 5000.24, by U.S. mail, in accordance with the instructions
on the form, as required by this section, with remittance as provided
for in this section, or without remittance as provided for in
Sec. 25.165, the date of the official postmark of the United States
Postal Service stamped on the cover in which the return and remittance
were mailed is considered the date of delivery of the return and the
date of delivery of the remittance, if enclosed with the return. When
the postmark on the cover is illegible, the burden is on the brewer to
prove when the postmark was made.
(2) When the brewer sends the semimonthly return with or
without
remittance by registered mail or by certified mail, the date of registry
or the date of the postmark on the sender's receipt of certified mail be
treated as the date of delivery of the semimonthly return and of the
remittance, if enclosed with the return.
(Approved by the Office of Management and Budget under control number
1512-0467)
(Aug. 16, 1954, ch. 736, 68A Stat. 775, as amended (26 U.S.C. 6302);
sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5061))
[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-246, 52
FR 668, Jan. 8, 1987; T.D. ATF-251, 52 FR 19314, May 22, 1987, T.D. ATF-
365, 60 FR 33669, June 28, 1995]
Sec. 25.164a Special rule for taxes due for the month of September
(effective after December
31, 1994).
(a)(1) Except as provided in paragraph (a)(2) of this section,
the
second semimonthly period for the month of September shall be divided
into two payment periods, from the 16th day through the 26th day, and
from the 27th day through the 30th day. The brewer shall file a return
on Form 5000.24, and make remittance, for the period September 16-26, no
later than September 29. The brewer shall file a return on Form 5000.24,
and make remittance, for the period September 27-30, no later than
October 14.
(2) Taxpayment not by electronic fund transfer. In the case
of taxes
not required to be remitted by electronic fund transfer as prescribed by
Sec. 25.165, the second semimonthly period of September shall be divided
into two payment periods, from the 16th day through the 25th day, and
the 26th day through the 30th day. The brewer shall file a return on
Form 5000.24, and make remittance, for the period September 16-25, no
later than September 28. The
[[Page 623]]
brewer shall file a return on Form 5000.24, and make remittance, for the
period September 26-30, no later than October 14.
(b) Amount of payment: Safe harbor rule. (1) Taxpayers are
considered to have met the requirements of paragraph (a)(1) of this
section, if the amount paid no later than September 29 is not less than
\11/15\ (73.3 percent) of the tax liability incurred for the semimonthly
period beginning on September 1 and ending on September 15, and if any
underpayment of tax is paid by October 14.
(2) Taxpayers are considered to have met the requirements
of
paragraph (a)(2) of this section, if the amount paid no later than
September 28 is not less than \2/3\rds (66.7 percent) of the tax
liability incurred for the semimonthly period beginning on September 1
and ending on September 15, and if any underpayment of tax is paid by
October 14.
(c) Last day for payment. If the required due date for taxpayment
for the periods September 16-25 or September 16-26 as applicable, falls
on a Saturday or legal holiday, the return and remittance shall be due
on the immediately preceding day. If the required due date falls on a
Sunday, the return and remittance shall be due on the immediately
following day.
(d) Example. Payment of tax for the month of September--(1)
Facts.
X, a brewer required to pay taxes by electronic fund transfer, incurred
tax liability in the amount of $30,000 for the first semimonthly period
of September. For the period September 16-26, X incurred tax liability
in the amount of $45,000, and for the period September 27-30, X incurred
tax liability in the amount of $2,000.
(2) Payment requirement. X's payment of tax in the amount
of $30,000
for the first semimonthly period of September is due no later than
September 29 (Sec. 25.164(d)). X's payment of tax for the period
September 16-26 is also due no later than September 29
(Sec. 25.164a(a)(1)). X may use the safe harbor rule to determine the
amount of payment due for the period of September 16-26
(Sec. 25.164a(b)). Under the safe harbor rule, X's payment of tax must
equal $21,990.00, \11/15\ths of the tax liability incurred during the
first semimonthly period of September. Additionally, X's payment of tax
in the amount of $2,000 for the period September 27-30 must be paid no
later than October 14 (Sec. 25.164a(a)(1)). X must also pay the
underpayment of tax, $23,010.00, for the period September 16-26, no
later than October 14 (Sec. 25.164a(b)).
[T.D. ATF-365, 60 FR 33669, June 28, 1995]
Sec. 25.165 Payment of tax by electronic fund transfer.
(a) Eligible brewers. (1) Each taxpayer who was liable, during
a
calendar year, for a gross amount equal to or exceeding five million
dollars in beer taxes combining tax liabilities incurred under this part
and Parts 250 and 251 of this chapter, shall use a commerical bank in
making payment by electronic fund transfer (EFT) of beer taxes during
the succeeding calendar year. Payment of beer taxes by cash, check, or
money order, as described in Sec. 25.163, is not authorized for a
taxpayer who is required by this section to make remittances by EFT. For
purposes of this section, the dollar amount of tax liability is defined
as the gross tax liability on all taxable removals, determined in
accordance with Sec. 25.159, and importations (including beer brought
into the United States from Puerto Rico or the Virgin Islands) during
the calendar year, without regard to any drawbacks, credits, or refunds,
for all premises from which such activities are conducted by the
taxpayer. Overpayments are not taken into account in summarizing the
gross tax liability.
(2) For the purposes of this section, a taxpayer includes
a
controlled group of corporations, as defined in 26 U.S.C. 1563, and
implementing regulations in 26 CFR 1.1563-1 through 1.1563-4, except
that the words ``at least 80 percent'' shall be replaced by the words
``more than 50 percent'' in each place it appears in subsection (a) of
26 U.S.C. 1563, as well as in the implementing regulations. Also, the
rules for a ``controlled group of corporations'' apply in a similar
fashion to groups which include partnerships and/or sole
proprietorships. If one entity maintains more than 50% control over a
group consisting of corporations and one, or
[[Page 624]]
more, partnerships and/or sole proprietorships, all of the members of
the controlled group are one taxpayer for the purpose of determining who
is required to make remittances by EFT.
(3) A taxpayer who is required by this section to make remittances
by EFT shall make a separate EFT remittance and file a separate return,
Form 5000.24, for each brewery from which beer is removed upon
determination of tax.
(b) Requirements. (1) On or before January 10 of each calendar
year,
except for a taxpayer already remitting the tax by EFT, each taxpayer
who was liable for a gross amount equal to or exceeding five million
dollars in beer taxes combining tax liabilities incurred under this part
and Parts 250 and 251 of this chapter, during the previous calendar
year, shall notify, in writing the regional director (compliance), for
each region in which taxes are paid. The notice shall be an agreement to
make remittances by EFT.
(2) For each return filed in accordance with this part, the
taxpayer
shall direct the taxpayer's bank to make an electronic fund transfer in
the amount of the taxpayment to the Treasury Account as provided in
paragraph (e) of this section. The request shall be made to the bank
early enough for the transfer to be made to the Treasury Account by no
later than the close of business on the last day for filing the return,
prescribed in Secs. 25.164 or 25.175. The request shall take into
account any time limit established by the bank.
(3) If a taxpayer was liable for less than five million dollars
in
beer taxes during the preceding calendar year, combining tax liabilities
incurred under this part and Parts 250 and 251 of this chapter, the
taxpayer may choose either to continue remitting the tax as provided in
this section or to remit the tax with the return as prescribed by
Sec. 25.164. Upon filing the first return on which the taxpayer chooses
to discontinue remitting the tax by EFT and to begin remitting the tax
with the tax return, the taxpayer shall notify the regional director
(compliance) by attaching a written notification to Form 5000.24,
stating that no taxes are due by EFT because the tax liability during
the preceding calendar year was less than five million dollars, and that
the remittance will be filed with the tax return.
(c) Remittance. (1) Each taxpayer shall show on the return,
Form
5000.24, information about remitting the tax for that return by EFT and
shall file the return with ATF, in accordance with the instructions on
Form 5000.24.
(2) Remittances shall be considered as made when the taxpayment
by
electronic fund transfer is received by the Treasury Account. For
purposes of this section, a taxpayment by electronic fund transfer shall
be considered as received by the Treasury Account when it is paid to a
Federal Reserve Bank.
(3) When the taxpayer directs the bank to effect an electronic
fund
transfer message as required by paragraph (b)(2) of this section, any
transfer data record furnished to the taxpayer, through normal banking
procedures, will serve as the record of payment, and will be retained as
part of required records.
(d) Failure to make a taxpayment by EFT. The taxpayer is
subject to
a penalty imposed by 26 U.S.C. 5684, 6651, or 6656, as applicable, for
failure to make a taxpayment by EFT on or before the close of business
on the prescribed last day for filing.
(e) Procedure. Upon the notification required under paragraph
(b)(1)
of this section, the regional director (compliance) will issue to the
taxpayer an ATF Procedure entitled ``Payment of Tax by Electronic Fund
Transfer.'' This publication outlines the procedure a taxpayer is to
follow when preparing returns and EFT remittances in accordance with
this part. The U.S. Customs Service will provide the taxpayer with
instructions for preparing EFT remittances for payments to be made to
the U.S. Customs Service.
(Act of August 16, 1954, 68A Stat. 775, as amended (26 U.S.C. 6302);
Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5061))
[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-245, 52
FR 532, Jan. 7, 1987; T.D. ATF-251, 52 FR 19314, May 22, 1987; T.D. ATF-
262, 52 FR 47560, Dec. 15, 1987]
Sec. 25.166 Payment of reduced rate of tax.
(a) By return, Form 5000.24. A brewer who is eligible to
pay the
reduced rate
[[Page 625]]
of tax on beer may, upon filing the notice required by Sec. 25.167, pay
the reduced rate of tax on beer by semimonthly return as provided in
Sec. 25.164 or by prepayment return as provided in Sec. 25.175. Payment
of reduced rate of tax on beer by return, Form 5000.24, may commence
with any tax return filed during a calendar year and will continue until
the brewer has taxpaid 60,000 barrels of beer at the lower rate of tax,
or taxpaid the number of barrels of beer apportioned under
Sec. 25.167(b)(3) for that calendar year.
(b) By claim for refund of tax. A brewer, eligible to pay
the
reduced rate of tax on beer during a calendar year, but who has not paid
the reduced rate of tax by return during that year, may file a claim,
Form 2635, (5620.8) for refund of tax excessively paid on beer during
that year. Claims for refund of tax will be filed as provided in
Sec. 25.285.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended (26 U.S.C. 5051))
[T.D. ATF-224, 51 FR 7673, Mar. 5, 1987, as amended by T.D. ATF-251, 52
FR 19313, May 22, 1987
Sec. 25.167 Notice of brewer to pay reduced rate of tax.
(a) Requirement to file notice. Every brewer who desires
to pay the
reduced rate of tax on beer authorized by 26 U.S.C. 5051(a)(2) by tax
return, Form 5000.24, shall prepare a notice containing the information
required by paragraph (b) of this section. The brewer shall file this
notice with the regional director (compliance) for the first return
period (or prepayment return) during which the brewer pays tax on beer
at the reduced rate. The brewer shall file the notice each year in which
payment of the reduced rate of tax on beer is made by return.
(b) Information to be furnished. Each notice described in
paragraph
(a) of this section will contain the following information:
(1) A statement that the brewer will not or is not likely
to produce
more than 2,000,000 barrels of beer in the calendar year for which the
notice is filed.
(2) A statement that the brewer is not a member of a controlled
group of brewers, or if the brewer is a member of a controlled group of
brewers, a statement that the controlled group will not or is not likely
to produce more than 2,000,000 barrels of beer in the calendar year for
which the notice is filed.
(3) If the brewer operates more than one brewery, a statement
of the
locations of all the breweries and a statement of how the 60,000 barrel
limitation for the reduced rate of tax will be apportioned among the
breweries. If the brewer is a member of a controlled group of brewers, a
statement of the names and locations of all other brewers in the group
and a statement of how the 60,000 barrels limitation will be apportioned
among the brewers in the group.
(c) Perjury statement. Each notice described in this section
will be
executed by the brewer under penalties of perjury as defined in
Sec. 25.11.
(Act of Aug. 16, 1954, 68A Stat. 749, as amended (26 U.S.C. 6065); sec.
201, Pub. L. 85-859, 72 Stat. 1390, as amended, 1395, as amended (26
U.S.C. 5415, 5555))
Sec. 25.168 Employer identification number.
The employer identification number (defined at 26 CFR 301.7701-12)
of the taxpayer who has been assigned the number will be shown on each
return on Form 5000.24, filed under this part. Failure of the taxpayer
to include the employer identification number on Form 5000.24 may result
in imposition of the penalty specified in Sec. 70.113 of this chapter. A
brewer shall apply for an employer identification number on IRS Form SS-
4 as provided in Secs. 25.122 and 25.123.
(Pub. L. 87-397, 75 Stat. 828, as amended (26 U.S.C. 6109, 6676))
[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-301, 55
FR 47605, Nov. 14, 1990]
Prepayment of Tax
Sec. 25.173 Brewer in default.
(a) When a remittance in payment of taxes on beer is not
paid upon
presentment of check or money order tendered, or when the brewer is
otherwise in default in payment of tax under Sec. 25.164, beer may not
be removed for consumption or sale or taken from the brewery for
consumption or sale until the tax has been prepaid as provided in
[[Page 626]]
Sec. 25.175. The brewer shall continue to prepay while in default and
thereafter until the regional director (compliance) finds the revenue
will not be jeopardized by deferred payment of tax as provided in
Sec. 25.164.
(b) Any remittance made while the brewer is required to prepay
under
this section will be in cash or in the form of a certified, cashier's or
treasurer's check drawn on any bank or trust company incorporated under
the laws of the United States, or under the law of any State, Territory,
or possession of the United States, or in the form of a money order as
provided in Sec. 70.61 of this chapter (payment by check or money
order), or will be made in the form of an electronic fund transfer as
provided by Secs. 25.164 and 25.165.
[T.D. ATF-224, 51 FR 7673, Mar. 5, 1987, as amended by T.D. ATF-251, 52
FR 19313, May 22, 1987; T.D. ATF-301, 55 FR 47605, Nov. 14, 1990]
Sec. 25.174 Bond not sufficient.
When the penal sum of the brewer's bond is in less than the
maximum
amount, the brewer shall prepay the tax on any withdrawal which would
cause the outstanding liability for tax to exceed the limits of coverage
of the bond. Prepayments will be made in accordance with Sec. 25.175.
Sec. 25.175 Prepayment of tax.
(a) General. When a brewer is required to prepay tax under
Sec. 25.173, or if the penal sum of the bond, Form 5130.22, is
insufficient for deferral of payment of tax on beer to be removed for
consumption or sale, or if a brewer is not entitled to defer the tax
under the provisions of this subpart, the brewer shall prepay the tax
before any beer is removed for consumption or sale, or taken out of the
brewery for removal for consumption or sale.
(b) Method of prepayment. (1) Prepayment will be made by
forwarding
a tax return, Form 5000.24, with remittance, covering the tax on beer.
(2) If a brewer is required by Sec. 25.165 to make payment
of tax by
electronic fund transfer, the brewer shall prepay the tax before any
beer can be removed for consumption or sale by completing the return and
by forwarding it, in accordance with the instructions on the form. At
the same time, the brewer shall direct his or her bank to make
remittance by EFT.
(3) For the purpose of complying with this section, the term
forwarding means depositing in the U.S. mail, properly addressed in
accordance with the instructions on the form.
(Act of Aug. 16, 1954, 68A Stat. 777, as amended (26 U.S.C. 6311); sec.
201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5061))
[T.D. ATF-224, 51 FR 7673, Mar. 5, 1987, as amended by T.D. ATF-251, 52
FR 19313, May 22, 1987]
Failure to Pay Tax
Sec. 25.177 Evasion of or failure to pay tax; failure to file a tax
return.
Sections 5671, 5673, 5684, 6651, and 6656 of Title 26 United
States
Code provide penalties for evasion or failure to pay tax on beer or for
failure to file a tax return.
(Act of Aug. 16, 1954, 68A Stat. 821, as amended, 826, as amended (26
U.S.C. 6651, 6656); sec. 201, Pub. L. 85-859, 72 Stat. 1408, 1410, as
amended (26 U.S.C. 5671, 5673, 5684))
Subpart L--Removals Without Payment of Tax
Transfer to Another Brewery of Same Ownership
Sec. 25.181 Eligibility.
A brewer may remove beer without payment of tax for transfer
to any
other brewery of the same ownership. These removals include a removal
from a brewery owned by one corporation to a brewery owned by another
corporation if (a) one corporation owns the controlling interest in the
other corporation, or (b) the controlling interest in each corporation
is owned by the same person. Beer removed under this section may, while
in transit, be reconsigned to another brewery of the same ownership or
be returned to the shipping brewery.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5414))
[[Page 627]]
Sec. 25.182 Kinds of containers.
A brewer may transfer beer without payment of tax from one
brewery
to another brewery belonging to the same brewer (a) in the brewer's
packages or (b) in bulk containers, subject to limitations and
conditions as may be imposed by the regional director (compliance). The
brewer shall mark, brand or label containers as provided by subpart J of
this part.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5414))
Sec. 25.183 Determination of quantity transferred.
The shipping brewer shall determine the quantity of beer
shipped at
the time of removal from the consignor brewery, and the receiving brewer
shall determine the quantity of beer received at the time of receipt at
the consignee brewery. The brewer shall equip the consignor and
consignee breweries with suitable measuring devices to allow accurate
determination of the quantities of beer to be shipped and received in
bulk conveyances.
(Sec 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5414))
Sec. 25.184 Losses in transit.
(a) Liability for losses. The brewer is liable under the
bond of the
brewery to which beer is transferred for the tax on beer lost in
transit. If the brewer reconsigns beer while in transit or returns beer
to the shipping brewery, the brewer is liable under the bond of the
brewery to which the beer is reconsigned or returned for the tax on beer
lost in transit.
(b) Losses allowable without claim. If loss of beer being
transferred does not exceed two percent of the quantity shipped, the
brewer is not required to file a report of loss or a claim for allowance
of the loss if there are no circumstances indicating that the beer, or
any portion of the beer lost, was stolen or otherwise diverted to an
unlawful purpose.
(c) Losses requiring claim. If loss of beer during transit
exceeds
two percent of the quantity shipped, the brewer shall submit a claim
under penalties of perjury for remission of the tax on the entire loss.
The brewer shall submit the claim to the regional director (compliance)
of the region in which the brewery to which the beer was shipped,
reconsigned or returned, is located. The brewer shall prepare and submit
the claim as provided in Sec. 25.286.
(d) Losses requiring immediate report. The brewer shall report
to
the regional diretor (compliance) a loss by fire, theft, casualty or any
other unusual loss as soon as it becomes known.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended 1389 (26 U.S.C.
5056, 5414))
Sec. 25.185 Mingling.
Beer transferred without payment of tax from one brewery
to another
brewery belonging to the same brewer may be mingled with beer of the
receiving brewery. The brewer may handle the beer transferred in
accordance with the requirements of this part relating to beer produced
in the receiving brewery.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5414))
Sec. 25.186 Record of beer transferred.
(a) Preparation of invoice. When beer is transferred between
breweries without payment of tax, the shipping brewer shall prepare a
serially numbered invoice or commercial record, in duplicate, covering
the transfer. The invoice will be marked ``transfer without payment of
tax'' and will contain the following information:
(1) Name and address of shipping brewer;
(2) Date of shipment;
(3) Name and address of receiving brewer;
(4) For cases, the number and size of cases and the total
barrels;
(5) For kegs, the number and size of kegs and the total barrels;
(6) For shipments in bulk containers, the type of container,
identity of the container and the total barrels.
(b) Reconsignment of beer. When beer is reconsigned in transit
to
another brewery of the same ownership, the shipping brewer shall (1)
prepare a new invoice showing reconsignment to another brewery and shall
void all copies of the original invoice, or (2) shall mark all copies of
the original invoice with the words ``Reconsigned to
[[Page 628]]
______,'' followed by the name and address of the brewery to which the
beer is reconsigned.
(c) Disposition of invoice. On shipment of the beer, the
shipping
brewer shall send the original copy of the invoice to the receiving
brewer, and shall retain the other copy for the brewery records. On
receipt of the beer, the receiving brewer (including a brewer to whom
beer was returned or reconsigned in transit) shall note on the invoice
any discrepancies in the beer received, and retain the invoice in the
brewery records.
(d) Preparation of records and report. The shipping brewer
shall use
the invoice showing beer removed to another brewery without payment of
tax in preparing daily records under Sec. 25.292 and in preparing the
Brewer's Report of Operations, Form 5130.9. The receiving brewer
(including a brewer to whom beer was returned or reconsigned in transit)
shall use the invoice showing beer received from another brewery without
payment of tax in preparing daily records under Sec. 25.292 and in
preparing the Brewer's Report of Operations, Form 5130.9.
(Sec. 201. Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5414))
[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-345, 58
FR 40357, July 28, 1993]
Removal of Beer Unfit for Beverage Use
Sec. 25.191 General.
A brewer may remove sour or damaged beer, or beer which the
brewer
has deliberately rendered unfit for beverage use, from the brewery
without payment of tax for use in manufacturing. Unfit beer may be
removed under this section for use as distilling material at alcohol
fuel plants qualified under subpart Y of part 19 of this chapter.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended (26 U.S.C. 5053))
Sec. 25.192 Removal of sour or damaged beer.
(a) Containers. The brewer shall remove sour or damaged beer
(1) in
casks or other packages, containing not less than one barrel each and
unlike those ordinarily used for packaging beer, or (2) in tanks, tank
cars, tank trucks, tank ships, barges, or deep tanks of a vessel. The
brewer shall mark the nature of the contents on each container.
(b) Beer meter. The brewer shall remove sour or damaged beer
without
passing it through the meter (if any) or racking machine.
(c) Records and reports. The brewer shall record the removal
of sour
or damaged beer in daily records under Sec. 25.292 and on the Brewer's
Report of Operations, Form 5130.9.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended (26 U.S.C. 5033))
[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-345, 58
FR 40357, July 28, 1993]
Removals for Analysis, Research,
Development or Testing
Sec. 25.195 Removals for analysis.
A brewer may remove beer, without payment of tax, to a laboratory
for analysis to determine the character or quality of the product. Beer
may be removed for analysis in packages or in bulk containers. The
brewer shall record beer removed for analysis in daily records under
Sec. 25.292 and on the Brewer's Report of Operations, Form 5130.9.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended (26 U.S.C. 5053))
[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-345, 58
FR 40357, July 28, 1993]
Sec. 25.196 Removals for research, development or testing.
(a) A brewer may remove beer, without payment of tax, for
use in
research, development, or testing (other than consumer testing or other
market analysis) of processes, systems, materials, or equipment relating
to beer or brewery operations. Beer may be removed for research,
development or testing in packages or in bulk containers.
(b) The brewer shall mark each barrel, keg, case, or shipping
container with the name and address of the brewer and of the consignee,
the identity of the product, and the quantity of the
[[Page 629]]
product. If necessary to protect the revenue, the regional director
(compliance) may require a brewer to mark each container with the words
``Not for Consumption or Sale.'' If beer is removed in a bulk
conveyance, the brewer shall place the marks on the route board of the
conveyance.
(c) The brewer shall record beer removed for research, development,
or testing in daily records under Sec. 25.292 and on the Brewer's Report
of Operations, Form 5130.9.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended (26 U.S.C. 5053))
[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-345, 58
FR 40357, July 28, 1993]
Removal of Beer to a Contiguous
Distilled Spirits Plant
Sec. 25.201 Removal by pipeline.
A brewer may remove beer from the brewery, without payment
of tax,
by pipeline to the bonded premises of a distilled spirits plant which is
authorized to produce distilled spirits and which is located contiguous
to the brewery.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1365, as amended, 1389, as amended
(26 U.S.C. 5222, 5412))
Exportation
Sec. 25.203 Exportation without payment of tax.
A brewer may remove beer without payment of tax (a) for exportation,
(b) for use as supplies on vessels and aircraft, or (c) for transfer to
and deposit in foreign-trade zones for exportation or for storage
pending exportation, in accordance with Part 252 of this chapter. Beer
may be removed from a brewery in bottles, kegs, or in bulk containers.
(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended (19 U.S.C.
1309); sec. 3, Act of June 18, 1934, 48 Stat. 999, as amended (19 U.S.C.
81c); sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended (26 U.S.C.
5053))
Beer For Personal or Family Use
Sec. 25.205 Production.
(a) Any adult may produce beer, without payment of tax, for
personal
or family use and not for sale. An adult is any individual who is 18
years of age or older. If the locality in which the household is located
requires a greater minimum age for the sale of beer to individuals, the
adult shall be that age before commencing the production of beer. This
exemption does not authorize the production of beer for use contrary to
State or local law.
(b) The production of beer per household, without payment
of tax,
for personal or family use may not exceed:
(1) 200 gallons per calendar year if there are two or more
adults
residing in the household, or
(2) 100 gallons per calendar year if there is only one adult
residing in the household.
(c) Partnerships except as provided in Sec. 25.207, corporations
or
associations may not produce beer, without payment of tax, for personal
or family use.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended (26 U.S.C. 5053))
Sec. 25.206 Removal of beer.
Beer made under Sec. 25.205 may be removed from the premises
where
made for personal or family use including use at organized affairs,
exhibitions or competitions such as homemaker's contests, tastings or
judging. Beer removed under this section may not be sold or offered for
sale.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended (26 U.S.C. 5053))
Sec. 25.207 Removal from brewery for personal or family use.
Any adult, as defined in Sec. 25.205, who operates a brewery
under
this part as an individual owner or in partnership with others, may
remove beer from the brewery without payment of tax for personal or
family use. The amount of beer removed for each household, without
payment of tax, per calendar year may not exceed 100 gallons if there is
one adult residing in the household or 200 gallons if there are two or
more adults residing in the household. Beer removed in excess of the
above limitations will be reported as a taxable removal.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended (26 U.S.C. 5053))
[[Page 630]]
Subpart M--Beer Returned to Brewery
Sec. 25.211 Beer returned to brewery.
(a) General. Beer, produced in the United States, on which
the
brewer has paid or determined the tax may be returned to any brewery of
the brewer. Upon return of the beer to the brewery, the brewer shall
determine the actual quantity of beer received, expressed in barrels.
For cases or bottles, the label may be used to determine the quantity.
When kegs or cases containing less than the original contents are
received, the brewer shall determine the actual quantity of beer by
weight or by other accurate means. The brewer shall determine the
balling and alcohol content of returned keg beer unless the keg is
equipped with tamper-proof fittings. The quantity of beer returned may
be established by weighing individual packages and subtracting package
weight, or by weighing accumulated beer and subtracting tare weight of
dumpsters, pallets, packages and the like.
(b) Disposition of returned beer. The brewer may dispose
of beer
returned under this subpart in any manner prescribed for beer which has
never left the brewery. If returned beer is again removed for
consumption or sale, tax will be determined and paid without respect to
the tax which was determined or paid at the time of prior removal of the
beer.
(c) Records. For beer returned to the brewery under this
subpart,
the brewer's daily records under Sec. 25.292 will show:
(1) Date;
(2) Quantity of beer returned;
(3) If the title to the beer has passed, the name and address
of the
person returning the beer; and
(4) Name and address of the brewery from which the beer was
removed,
if different from the brewery to which returned.
(d) Supporting records. The records of returned beer will
be
supported by invoices, credit memoranda or other commercial papers, and
will differentiate beween beer returned to the brewery from which
removed and beer returned to a brewery different from the one from which
removed.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended, 1335, as amended,
1390, as amended (26 U.S.C. 5054, 5056, 5415))
Sec. 25.212 Beer returned to brewery from which removed.
If beer on which the tax has been determined or paid is returned
to
the brewery from which removed, the brewer shall take the quantity of
beer as an offset or deduction against the quantity of beer removed for
consumption or sale from the brewery on that business day, as provided
in Sec. 25.159
(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended, 1390, as amended
(26 U.S.C. 5056, 5415))
Sec. 25.213 Beer returned to brewery other than that from which
removed.
(a) Refund or adjustment of tax. If beer on which the tax
has been
determined or paid is returned to a brewery of the brewer other than the
one from which removed, the brewer may make a claim for refund or relief
of tax or may make an adjustment to the beer tax return, for the tax on
the beer returned to the brewery. The brewer may not take an offset for
beer returned to the brewery other than the one from which removed.
Procedures for filing claims for refund or relief of tax or for making
adjustments to the beer tax return are contained in Supart T of this
part.
(b) Notice. A brewer need not file notice of intention to
return
beer to a brewery other than the one from which removed unless required
by the regional director (compliance). When a notice is required, the
brewer shall serially number each notice and execute it under penalties
of perjury as defined in Sec. 25.11. The brewer shall file it with the
regional director (compliance) through the area supervisor of the area
in which the brewery is located where the beer is to be returned. The
notice will contain the following information:
(1) The number and sizes of kegs and the actual quantity
of beer, in
barrels; or the number of cases and the number and sizes of bottles
within the cases and the actual quantity of beer, in barrels;
(2) The name and address of the brewery from which the beer
was
removed;
[[Page 631]]
(3) A statement that the tax on the beer has been fully paid
or
determined and the rate at which the tax on the beer was paid or
determined; and
(4) If the title to the beer has passed, the name and address
of the
person returning the beer.
(c) Return of beer. If the brewer is required to file a notice
of
intention to return beer to the brewery, the brewer may bring the beer
onto the brewery premises prior to filing the notice. The brewer shall
segregate the returned beer from all other beer at the brewery and
clearly identify it as returned beer. The returned beer will be retained
intact for inspection by an ATF officer until the notice has been filed
and disposition authorized.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5056))
Subpart N--Voluntary Destruction
Sec. 25.221 Voluntary destruction of beer.
(a) On brewery premises. (1) A brewer may destroy, at the
brewery,
beer on which the tax has not been determined or paid.
(2) A brewer operating a tavern on brewery premises under
Sec. 25.25
may destroy taxpaid or tax-determined been stored on brewery premises,
in accordance with the requirements of Sec. 25.225.
(b) Destruction without return to brewery. A brewer may destroy
beer
on which the tax has been paid or determined at a location other than
any of the breweries operated by the brewer, upon compliance with this
subpart.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5056))
[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986; 51 FR 9190, Mar. 18, 1986; T.D.
ATF-268, 53 FR 8629, Mar 16, 1988, as amended by T.D. 372, 61 FR 20724,
May 8, 1996]
Sec. 25.222 Notice of brewer.
(a) Beer to be destroyed. When a brewer possesses beer which
has
been taxpaid or tax determined and which the brewer wishes to destroy at
a location other than at any of the brewer's breweries, the brewer shall
give written notice of intention to destroy the beer. The brewer shall
submit this notice to the regional director (compliance) through the
area supervisor of the area in which the beer is to be destroyed.
(b) Execution of notice. The brewer shall serially number
each
notice and execute each notice under penalties of perjury as defined in
Sec. 25.11. The brewer shall specify the date on which the beer is to be
destroyed; this date may not be less than 12 days from the date the
notice is mailed or delivered to the area supervisor.
(c) Information to be furnished. The notice will contain
the
following information:
(1) The number and sizes of kegs and the actual quantity
of beer, in
barrels; or the number of cases and the number and sizes of bottles
within the cases, and the actual quantity of beer in barrels. When kegs
containing less than the actual contents are to be destroyed, the brewer
shall determine the actual content of beer by weight or by other
accurate means.
(2) The date on which the beer was received for destruction.
(3) A statement that the tax on the beer has been fully paid
or
determined and the rate at which the tax on the beer was paid or
determined.
(4) If the title of the beer has passed, the name and address
of the
person returning the beer.
(5) The location at which the brewer desires to destroy the
beer and
the reason for not returning the beer to the brewery.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5056))
Sec. 25.223 Destruction of beer off brewery premises.
(a) Destruction without supervision. A brewer may destroy
beer
without supervision if the regional director (compliance) does not
advise the brewer before the date specified in the notice that
destruction of the beer is to be supervised.
(b) Destruction with supervision. The regional director (compliance)
may require that an ATF officer verify the information in the notice of
destruction or witness the destruction of the beer. The regional
director (compliance) may also require a delay in the destruction of the
beer or, if the place of destruction is not readily accessible to an ATF
officer, may require that the
[[Page 632]]
beer be moved to a more convenient location. In this case, the brewer
may not destroy the beer except under the conditions imposed by the
regional director (compliance).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5056))
Sec. 25.224 Refund or adjustment of tax.
(a) Claim for refund or relief of tax. The tax paid by a
brewer on
beer produced in the United States and destroyed in accordance with this
subpart may be refunded to the brewer. If the tax has not been paid, the
brewer may be relieved of liability for the tax. Claims for refund or
relief of tax will be filed as provided in subpart T of this part.
(b) Adjustments to the excise tax return. A brewer may make
an
adjustment (without interest) to the excise tax return, Form 5000.24,
covering the tax paid on beer produced in the United States and
destroyed in accordance with this subpart. Procedures for making
adjustments to tax returns are contained in subpart T of this part.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5056))
Sec. 25.225 Destruction of taxpaid beer which was never removed
from
brewery premises.
(a) General. A brewer operating a taven on brewery premises
under
Sec. 25.25 may destroy taxpaid or tax-determined beer which was never
removed from brewery premises, in accordance with the recordkeeping
requirements of paragraph (b) of this section, and with the benefit of
the tax refund provisions of paragraph (c) of this section.
(b) Recordkeeping. (1) When taxpaid or tax-determined beer
which was
never removed from brewery premises is destroyed, the brewer shall
prepare a record of the quantity of beer destroyed, and the reason for,
date of, and method of, destruction. The brewer may prepare this record
on Form 2635 (5620.8) for submission as a claim under Sec. 25.283.
(2) When required by the regional director (compliance),
the brewer
shall notify the area supervisor prior to the intended destruction, in
accordance with procedures established by the regional director
(compliance).
(c) Refund of tax. After destruction is completed, the brewer
may
file a claim for refund or credit of tax, in accordance with
Sec. 25.283(c).
[T.D. ATF-268, 53 FR 8629, Mar 16, 1988]
Subpart O--Beer Purchased From Another Brewer
Sec. 25.231 Finished beer.
(a) A brewer may obtain beer in barrels and kegs, finished
and ready
for sale from another brewer. The purchasing brewer may furnish the
producing brewer barrels and kegs marked with the purchasing brewer's
name and location. The producing brewer shall pay the tax as provided in
subpart K of this part.
(b) A brewer may not purchase taxpaid or tax determined beer
from
another brewer in bottles or cans which bear the name and address of the
purchasing brewer.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5413))
Sec. 25.232 Basic permit.
A brewer who engages in the business of purchasing beer for
resale
is required to possess a wholesaler's or importer's basis permit under
the provisions of section 3(c) of the Federal Alcohol Administration Act
and Part 1 of this chapter.
Subpart P--Cereal Beverage
Sec. 25.241 Production.
Brewers may produce cereal beverage and remove it without
payment of
tax from the brewery. The method of production shall insure that the
alcohol content of the cereal beverage will not increase while in the
original container after removal from the brewery. The brewer shall keep
cereal beverage separate from beer, and shall measure the quantity of
cereal beverage transferred for packaging in accordance with Sec. 25.41.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5411))
[[Page 633]]
Sec. 25.242 Markings.
(a) Designation. When bottled or packaged, cereal beverage
may be
designated ``Cereal Beverage,'' ``Malt Beverage,'' ``Near Beer,'' or
other distinctive name. If designated ``Near Beer,'' those words will be
printed identically in the same size or style of type, in the same color
of ink, and on the same background.
(b) Barrels and kegs. A brewer may remove cereal beverage
in barrels
and kegs if the sides are durably painted at each end with a white
stripe not less than 4 inches in width and the heads are painted in a
solid color, with conspicuous lettering in a contrasting color reading
``Nontaxable under section 5051 I.R.C.'' The brewer shall also legibly
mark the brewer's name or trade name and the address on the container.
(c) Bottles. Bottle labels shall show the name or trade name
and
address of the brewer, the distinctive name of the beverage, if any, and
the legend ``Nontaxable under section 5051 I.R.C.'' Other information
which is not inconsistent with the requirements of this section may be
shown on bottle lablels.
(d) Cases. The brewer shall mark cases or shipping containers
to
show the nature of the product and the name or trade name and address of
the brewer.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5411))
Subpart Q--Removal of Brewer's
Yeast and Other Articles
Sec. 25.251 Authorized removals.
(a) Brewer's yeast. A brewer may remove brewer's yeast, in
liquid or
solid form containing not less than 10 percent solids (as determined by
the methods of analysis of the American Society of Brewing Chemists),
from the brewery in barrels, tank trucks, in other suitable containers,
or by pipeline.
(b) Containers. Containers will bear a label giving the name
and
location of the brewery and including the words ``Brewer's Yeast.''
(c) Pipeline. If brewer's yeast is removed by pipeline, the
pipeline
will be described in the Brewer's Notice, Form 5130.10. The premises
where the brewer's yeast is received is subject to inspection by an ATF
officer during ordinary business hours.
(d) Other articles. A brewer may remove malt, malt syrup,
wort, and
other articles from the brewery.
(e) Methods of Analysis of the American Society of Brewing
Chemists,
Seventh Edition (1976). In reference to paragraph (a) of this section,
this incorporation by reference was approved by the Director of the
Federal Register on March 23, 1981, and is available for inspection at
the Office of the Federal Register, 800 North Capitol Street, NW., suite
700, Washington, DC. This publication is available from the American
Society of Brewing Chemists, 40 Pilot Knob Road, St. Paul, Minnesota
55121.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5411))
Sec. 25.252 Records.
(a) Production. The brewer shall keep records of the production
of
malt syrup, wort, and other articles which are removed from the brewery.
The record shall include the quantities and kinds of materials used, and
in the case of wort and concentrated wort, the balling.
(b) Removals. The brewer shall keep records of removals of
brewer's
yeast, malt and other articles from the brewery. The record shall
include the quantity and date of removal of each lot, and the name and
address of the consignee. These records may consist of invoices or
shipping documents.
(c) Inspection. All records under this section shall be available
for inspection at the brewery by an ATF officer during normal business
hours.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended (26 U.S.C. 5415))
Subpart R--Beer Concentrate
Sec. 25.261 General.
(a) Authorized processes. A brewer may, in accordance with
this
subpart--
(1) Produce concentrate from beer,
(2) Reconstitute beer from concentrate,
(3) Transfer concentrate from one brewery to another brewery
of the
same ownership, and
[[Page 634]]
(4) Remove concentrate without payment of tax for exportation,
or
for transfer to and deposit in a foreign-trade zone for exportation or
for storage pending exportation in accordance with Part 252 of this
chapter.
(b) Brewery treatment of concentrate. Beer reconstituted
from
concentrate in accordance with this subpart shall (except with respect
to the additional labeling of reconstituted beer under Sec. 25.263) be
treated the same as beer which has not been concentrated and
reconstituted.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))
Sec. 25.262 Restrictions and conditions on processes of concentration
and reconstitution.
(a) Conditions on concentration. A brewer may not employ
any process
of concentration which separates alcohol spirits from any fermented
substance.
(b) Conditions on reconstitution--(1) The process of reconstitution
of beer will consist of the addition to the concentrate of carbon
dioxide and water only.
(2) A brewer may not employ any process of concentration
or
reconstitution unless the beer upon reconstitution will, without the
addition of any substance other than carbon dioxide and water, possess
the taste, aroma, color, and other characteristics of beer which has not
been concentrated.
(3) The process of reconstitution shall provide for the addition
of
sufficient water to restore the concentrate to a volume not less than,
and an alcohol content not greater than, that of the beer used to
produce the concentrate.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1315, as amended, 1388, as amended
(26 U.S.C. 5002, 5401))
Sec. 25.263 Production of concentrate and reconstitution of beer.
(a) Operations at brewery. A brewer may concentrate beer
or
reconstitute beer only at a brewery.
(b) Marking of containers. Containers of concentrate transferred
to
other breweries of the same ownership, and containers of concentrate
removed for export shall be marked, branded and labeled in the same
manner as prescribed for containers of beer in subpart J of this part.
All containers shall be identified as containers of beer concentrate.
(c) Mingling with beer. A brewer may not mingle concentrate
with
unconcentrated beer. A brewer may mingle reconstituted beer with other
beer at the brewery.
(d) Additional labeling. Barrels, kegs, and bottles containing
beer
produced from concentrate will show by label or otherwise the statement
``PRODUCED FROM . . . CONCENTRATE,'' the blank to be filled in with the
appropriate class designation of the beer (beer, lager, ale, stout,
etc.) from which the concentrate was made. The statement will be
conspicuous and readily legible and, in the case of bottled beer, will
appear in direct conjunction with, and as a part of, the class
designation. All parts of the class designation will appear in lettering
of substantially the same size and kind.
(e) Records and reports. Brewers producing concentrate and
brewers
reconstituting beer from concentrate shall keep the records and reports
required by subpart U of this part.
Sec. 25.264 Transfer between breweries.
(a) Authorized transfers. A brewer may remove from the brewery,
without payment of tax, concentrate produced from beer for transfer to
any other brewery of the same ownership (within the limits of ownership
described in Sec. 25.181).
(b) Record of concentrate transferred. When transferring
concentrate
between breweries, the shipping brewer shall prepare for each conveyance
a serially numbered invoice or commercial record covering the transfer.
The invoice will be clearly marked to indicate that concentrate produced
from beer is being transferred. The invoice will contain the following
information:
(1) Name and address of shipping brewer;
(2) Date of shipment;
(3) Name and address of receiving brewer;
(4) The number of containers transferred, the balling, percentage
of
alcohol by volume, and the total barrels of concentrate; and
[[Page 635]]
(5) A description of the beer from which the concentrate
was
produced including the number of barrels, balling, and percentage of
alcohol by volume.
(c) Disposition of invoice. On shipment of the concentrate,
the
shipping brewer shall send the original copy of the invoice to the
receiving brewer and shall retain a copy for the brewery records. On
receipt of the concentrate, the receiving brewer shall note on the
invoice any discrepancies in the concentrate received and retain the
invoice in the brewery records.
Subpart S--Pilot Brewing Plants
Sec. 25.271 General.
(a) Establishment. A person may establish and operate a pilot
brewing plant off the brewery premises for research, analytical,
experimental, or developmental purposes relating to beer or brewery
operations. Pilot brewing plants will be established as provided in this
subpart.
(b) Authorized removals. Beer may be removed from a pilot
brewing
plant only for analysis or organoleptic examination.
(c) Transfers between brewery and pilot brewing plant. Subject
to
subpart L of this part, beer may be transferred to a pilot brewing plant
from a brewery of the same ownership, and beer may be transferred
without payment of tax from a pilot brewing plant to a brewery of the
same ownership.
(d) Other regulations applicable. The provisions of subparts
A, B,
F, I, K, and of Secs. 25.63, 25.64, and 25.21 are applicable to pilot
brewing plants established under this subpart. Also, the provisions of
Secs. 25.72-25.75, 25.77, 25.92 and 25.94-25.105 relating to bonds, and
consents of surety, and of Secs. 25.131-25.134 are applicable to bonds
and consents of surety given, and to changes in the proprietorship,
location, and premises of pilot brewing plants established under this
subpart.
(Sec. 4, Pub. L. 91-673, 84 Stat. 2057, as amended (26 U.S.C. 5417))
Sec. 25.272 Application.
(a) Form of application. Any person desiring to establish
a pilot
brewing plant under the subpart shall file an application with the
regional director (compliance). The application will be in writing and
will include the following:
(1) Name and address of the applicant;
(2) Description of the premises and equipment to be used
in the
operations;
(3) Nature, purpose, and extent of the operations; and
(4) A statement that the applicant agrees to comply with
all
provisions of this part applicable to the operations to be conducted.
(b) Additional information. The regional director (compliance)
may
at any time before or after approval of an application, require the
submission of additional information necessary for administration of
this part or for protection of the revenue.
(c) Authorization of operations. The regional director (compliance)
may authorize the operation of a pilot brewing plant if it is determined
that the plant will be operated solely for one or more of the purposes
specified in Sec. 25.271, and that operations will not jeopardize the
revenue.
(d) Withdrawal of authorization. The regional director (compliance)
may withdraw authorization to operate a pilot brewing plant if in his or
her judgment, the revenue would be jeopardized by the operations of the
plant.
(e) Commencement of operations. A person may not begin operation
of
a pilot brewing plant until the regional director (compliance) has
approved the application required by this section.
(Sec. 4, Pub. L. 91-673, 84 Stat. 2057, as amended (26 U.S.C. 5417))
Sec. 25.273 Action on application.
If the regional director (compliance) approves the application
for a
pilot brewing plant, he or she will note approval on the application and
forward a copy to the applicant. The applicant shall file the copy of
the approved application at the premises, available for inspection by an
ATF officer.
Sec. 25.274 Bond.
(a) Requirement. Any person requesting authorization to establish
a
pilot brewing plant under this subpart shall execute and file a brewer's
bond, Form
[[Page 636]]
5130.22. A person may not begin operation of a pilot brewing plant until
receiving notice from the regional director (compliance) of the approval
of the bond. Operations may continue only as long as an approved bond is
in effect.
(b) Penal sum. The penal sum of a bond covering the premises
of a
pilot brewing plant will be an amount equal to the potential tax
liability of the maximum quantity of beer on hand, in transit to the
plant, and unaccounted for at any one time, computed by multiplying the
quantity of beer in barrels by the rate of tax in 26 U.S.C. 5051. The
penal sum of the bond (or total penal sum if original and strengthening
bonds are filed) may not exceed $50,000 or be less than $500.
(c) Conditions of bonds. The bond will be conditioned that
the
operator of the pilot brewing plant shall pay, or cause to be paid, to
the United States according to the laws of the United States and the
provisions of this part, the taxes, including penalties and interest for
which the operator shall become liable, on all beer brewed, produced, or
received on the premises.
(Sec. 4, Pub. L. 91-673, 84 Stat. 2057, as amended (26 U.S.C. 5417))
Sec. 25.275 Special tax.
The special tax imposed on a brewer by 26 U.S.C. 5091 shall
be paid
in accordance with subpart I of this part.
Sec. 25.276 Operations and records.
(a) Commencement of operations. A person may commence operation
of a
pilot brewing plant upon receipt of the approved application and bond.
(b) Reports. The operator of a pilot brewing plant is not
required
to file the Brewer's Report of Operations, Form 5130.9 with the regional
director (compliance).
(c) Records. The operator of a pilot brewing plant shall
maintain
records which, in the opinion of the regional director (compliance), are
appropriate to the type of operation being conducted. These records will
include information sufficient to account for the receipt, production,
and disposition of all beer received or produced on the premises, and
the receipt (and disposition, if removed) of all brewing materials.
These records will be available for inspection by an ATF officer.
(Sec. 4, Pub. L. 91-673, 84 Stat. 2057, as amended (26 U.S.C. 5417))
[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-345, 58
FR 40357, July 28, 1993]
Sec. 25.277 Discontinuance of operations.
When operations of a pilot brewing plant are to be discontinued,
the
operator shall notify the regional director (compliance) stating the
purpose of the notice and giving the date of discontinuance. When
operations have been completed and all beer at the premises has been
disposed of and accounted for, the regional director (compliance) will
note approval on the notice and return a copy to the operator.
Subpart T--Refund or Adjustment of Tax or Relief From
Liability
Sec. 25.281 General.
(a) Reasons for refund or adjustment of tax or relief from
liability. The tax paid by a brewer on beer produced in the United
States may be refunded, or adjusted on the tax return (without interest)
or, if the tax has not been paid, the brewer may be relieved of
liability for the tax on:
(1) Beer returned to any brewery of the brewer subject to
the
conditions outlined in subpart M of this part;
(2) Beer voluntarily destroyed by the brewer subject to the
conditions outlined in subpart N of this part;
(3) Beer lost by fire, theft, casualty, or act of God subject
to the
conditions outlined in Sec. 25.282.
(b) Refund of beer tax excessively paid. A brewer may be
refunded
the tax excessively paid on beer subject to the conditions outlined in
Sec. 25.285.
(c) Rate of tax. Brewers who have filed the notice required
by
Sec. 25.167 and who have paid the tax on beer at the reduced rate of tax
shall make claims for refund or relief of tax, or adjustments on the tax
return, based upon the lower rate of tax. However, a brewer may make
adjustments or claims for refund or relief of tax based on the higher
rate of tax if the brewer can establish to the satisfaction of the
regional director
[[Page 637]]
(compliance) that the tax was paid or determined at the higher rate of
tax.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5056))
Sec. 25.282 Beer lost by fire, theft, casualty, or act of God.
(a) General. The tax paid by any brewer on beer produced
in the
United States may be adjusted (without interest) on the excise tax
return, may be refunded or credited (without interest) or, if the tax
has not been paid, the brewer may be relieved of liability for the tax
if, before transfer of title to the beer to any other person, the beer
is lost, whether by theft or otherwise, or is destroyed or otherwise
rendered unmerchantable by fire, casualty, or act of God. The tax
liability on excessive losses of beer from transfer between breweries of
the same ownership may be remitted as provided in Sec. 25.286.
(b) Unmerchantable beer. When beer is rendered unmerchantable
by
fire, casualty, or act of God, refund, credit or adjustment of tax, or
relief from liability of tax will not be allowed unless the brewer
proves to the satisfaction of the regional director (compliance) that
the beer cannot be salvaged and returned to the market for consumption
or sale.
(c) Beer lost or destroyed. When beer is lost or destroyed,
whether
by theft or otherwise, the regional director (compliance) may require
the brewer to file a claim for relief from the tax and to submit proof
as to the cause of the loss.
(d) Beer lost by theft. When it appears that beer was lost
by theft,
the tax shall be collected unless the brewer proves to the satisfaction
of the regional director (compliance) that the theft occurred before
removal from the brewery and occurred without connivance, collusion,
fraud, or negligence on the part of the brewer, consignor, consignee,
bailee, or carrier, or the employees or agents of any of them.
(e) Notification of regional director (compliance). (1) A
brewer who
sustains a loss of beer before transfer of title of the beer to another
person and who desires to adjust the tax on the excise tax return or to
file a claim for refund or for relief from liability of tax, shall, on
learning of the loss of beer, immediately notify in writing the regional
director (compliance) of the region in which the loss occurred of the
nature, cause, and extent of the loss, and the place where the loss
occurred. Statements of witnesses or other supporting documents shall be
furnished if available.
(2) A brewer possessing unmerchantable beer and who desires
to
adjust the tax on the excise tax return or to file a claim for refund or
for relief from liability shall notify in writing the regional director
(compliance) of the region in which the beer is, of the circumstances by
which the beer became unmerchantable, and shall state why the beer
cannot be salvaged and returned to the market for consumption or sale.
(f) Additional information. The regional director (compliance)
may
require the brewer to submit additional evidence necessary to verify the
tax adjustment or for use in connection with a claim.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5056))
Sec. 25.283 Claims for refund of tax.
(a) Beer returned to brewery or voluntarily destroyed at
a location
other than a brewery. Claims for refund of tax on beer returned to a
brewery under the provisions of Sec. 25.213 or voluntarily destroyed at
a location other than a brewery shall include:
(1) The name and address of the brewer filing the claim,
the address
of the brewery from which the beer was removed, and the address of the
brewery to which the beer was returned, as applicable;
(2) The quantity of beer covered by the claim and the rate(s)
of tax
at which the beer was tax paid or determined;
(3) The amount of tax for which the claim is filed;
(4) The reason for return or voluntary destruction of the
beer and
the related facts;
(5) Whether the brewer is indemnified by insurance or otherwise
in
respect of the tax, and if so, the nature of the indemnification;
(6) The claimant's reasons for believing the claim should
be
allowed;
(7) The date the beer was returned to the brewery, if applicable;
[[Page 638]]
(8) The name of the person from whom the beer was received;
(9) A statement that the tax has been fully paid or determined;
and
(10) A reference to the notice (if required) filed under
Secs. 25.213 or 25.222.
(b) Beer lost, destroyed, or rendered unmerchantable. Claims
for
refund of tax on beer lost, whether by theft or otherwise, or destroyed
or otherwise rendered unmerchantable by fire, casualty, or act of God
shall contain:
(1) Information required by paragraphs (a)(1), (2), (3),
(5), and
(6) of this section;
(2) A statement of the circumstances surrounding the loss;
(3) When applicable, the reason the beer rendered unmerchantable
cannot be returned to the market for consumption or sale;
(4) Date of the loss, and if lost in transit, the name of
the
carrier;
(5) A reference incorporating the notice required by Sec.
25.282;
and
(6) When possible, affidavits of persons having knowledge
of the
loss, unless the affidavits are contained in the notice given under
Sec. 25.282.
(c) Voluntary destruction of taxpaid beer which was never
removed
from brewery premises. Claims for refund or credit of tax on beer
voluntarily destroyed under the provisions of Sec. 25.225, shall
include:
(1) Information required by paragraphs (a)(1), (a)(2), (a)(3),
(a)(5), and (a)(9) of this section; and
(2) The information contained in the record required by
Sec. 25.225(b).
(d) Additional evidence. The regional director (compliance)
may
require the submission of additional evidence in support of any claim
filed under this section.
(e) Filing of claim. Claim for refund of tax shall be filed
on Form
2635 (5620.8) with the regional director (compliance) of the region in
which the beer was lost, returned, destroyed, or rendered
unmerchantable. Claims shall be filed within 6 months after the date of
the return, loss, destruction, or rendering unmerchantable. Claims will
not be allowed if filed after the prescribed time or if the claimant was
indemnified by insurance or otherwise in respect of the tax.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5056))
[T.D. ATF-224, 51 FR 7673, Mar. 5, 1987, as amended by T.D. ATF-251, 52
FR 19314, May 22, 1987; T.D. ATF-268, 53 FR 8629, Mar 16, 1988]
Sec. 25.284 Adjustment of tax.
(a) Adjustment of tax in lieu of refund. In lieu of filing
a claim
for refund of tax as provided in Sec. 25.283, a brewer may make an
adjustment (without interest) to the excise tax return, Form 5000.24,
for the amount of tax paid on beer returned to the brewery, voluntarily
destroyed, lost, destroyed, or rendered unmerchantable.
(b) Beer returned to brewery other than from which removed.
An
adjustment may be made on the excise tax return for the amount of tax
paid on beer returned to the brewery under Sec. 25.213. The adjustment
will be made on the tax return filed for the brewery to which the beer
was returned. The adjustment may not be made prior to the return of beer
to the brewery. If the brewer is required to file a notice under
Sec. 25.213, the adjustment may not be made until the regional director
(compliance) authorizes disposition of the beer.
(c) Beer voluntarily destroyed. An adjustment may be made
on the
excise tax return for the amount of tax paid on beer voluntarily
destroyed under subpart N of this part. The adjustment will be made on
the tax return filed for the brewery from which the beer was removed.
The adjustment may not be made prior to the destruction of the beer.
(d) Beer lost, destroyed or rendered unmerchantable. An adjustment
may be made on the excise tax return for the amount of tax paid on beer
lost, destroyed, or rendered unmerchantable under Sec. 25.282. The
adjustment will be made on the tax return filed for the brewery from
which the beer was removed. A brewer may not make an adjustment prior to
notification of the regional director (compliance) required under
Sec. 25.282(e). When beer appears to have been lost due to theft, the
brewer may not make an adjustment to the tax return until establishing
to the satisfaction of the regional director (compliance) that the theft
occurred
[[Page 639]]
before removal from the brewery and occurred without connivance,
collusion, fraud, or negligence on the part of the brewer, consignor,
consignee, bailee, or carrier, or the employees or agents of any of
them.
(e) Condition of adjustments. (1) All adjustments will be
made
within 6 months of the return, destruction, loss, or rendering
unmerchantable of the beer.
(2) Adjustment of the tax paid will be made without interest.
(3) An adjustment may not be taken if the brewer was indemnified
by
insurance or otherwise in respect of the tax.
(f) Records. When brewers make adjustments on the excise
tax return
in lieu of filing a claim, they shall keep the following records;
(1) For beer returned to the brewery or voluntarily destroyed,
the
records required by Secs. 25.283(a)(1), (2), (4), (5), (7), (8), and
(10).
(2) For beer lost, destroyed, or rendered unmerchantable,
the
records required by Sec. 25.283 (a)(1), (2), (5), (b) (2), (3), (4),
(5), and (6).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5056))
Sec. 25.285 Refund of beer tax excessively paid.
(a) Eligibility. A brewer who, under the provisions of Sec.
25.152,
is eligible to pay the reduced rate of tax on beer prescribed by 26
U.S.C. 5051 (a)(2), but who did not pay tax at the reduced rate by
return, Form 5000.24, during the calendar year for which the brewer was
eligible, may file a claim for refund of tax excessively paid on beer
for that year. The brewer shall file the claim for refund to tax on Form
2635 (5620.8) with the regional director (compliance) in the region in
which the brewer's principal place of business is located, within the
period of limitation prescribed in 26 U.S.C. 6511(a). For rules relating
to the period of limitation on filing claims, see Secs. 70.82 and 70.83.
(b) Calculation of refund. The brewer shall file the claim
based on
the quantity of beer eligible to be taxpaid at the lower rate of tax,
but which was paid at the higher rate of tax, subject to a maximum of
60,000 barrels of beer per calendar year or the limitation as determined
in Sec. 25.152(d). The brewer shall exclude from the claim the quantity
of beer removed that calendar year on which a credit or refund at the
higher rate of tax has been taken.
(c) Information to be furnished. Each claim for refund of
tax filed
under this section shall include the following information:
(1) Name and address of the brewer.
(2) Quantity of beer covered by the claim as determined in
paragraph
(b) of this section.
(3) Amount of tax paid in excess.
(4) A statement of the exact number of barrels of beer which
the
brewer produced during the calendar year.
(5) A statement that the brewer is not a member of a controlled
group of brewers (as defined in Sec. 25.152(b)(1) or, if the brewer is a
member of a controlled group of brewers, a list of the names and
addresses of all the members of the controlled group of brewers and a
statement of the combined number of barrels of beer produced by all
members of the controlled group in the calendar year.
(6) If the brewer is a member of a controlled group of brewers,
a
statement of how the 60,000 barrel limitation for the reduced rate of
tax is to be apportioned among the members of the controlled group of
brewers.
(Act of August 16, 1954, 68A Stat. 791, as amended (26 U.S.C. 6402);
sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended (26 U.S.C. 5051))
[T.D. ATF-224, 51 FR 7673, Mar. 5, 1987, as amended by T.D. ATF-251, 52
FR 19314, May 22, 1987
Sec. 25.286 Claims for remission of tax on beer lost in transit between
breweries.
(a) Filing of claim. Claims for remission of tax on beer
lost in
transit between breweries of the same ownership shall be prepared on
Form 2635 (ATF F 5620.8) by the brewer or the brewer's authorized agent
and submitted with the Form 5130.9 of the receiving brewery for the
reporting period in which the shipment is received. When the loss is by
casualty, the claim will be submitted with the Form 5130.9 for the
reporting period in which the loss is discovered. When, for valid
reason, the required claim cannot be submitted with Form 5130.9, the
brewer shall attach a statement to Form 5130.9 stating the
[[Page 640]]
reason why the claim cannot be filed at the time and stating when it
will be filed. A claim will not be allowed unless filed with the
regional director (compliance) within 6 months of the date of the loss.
(b) Information to be shown. The claim will show the following
information:
(1) The date of the shipment;
(2) The quantity of beer lost (number and size of packages
and their
equivalent in barrels), and the rate(s) of tax at which the beer would
have been removed for consumption or sale;
(3) The percent of loss;
(4) The specific cause of the loss;
(5) The nature of the loss (leakage, breakage, casualty,
etc.);
(6) Information as to whether the claimant has been indemnified
by
insurance or otherwise in respect to the tax, or has any claim for
indemnification; and
(7) For losses due to casualty or accident, statements from
the
carrier or other persons having personal knowledge of the loss, if
available.
(27 U.S.C. 5056, 5414)
[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986; 51 FR 9190, Mar. 18, 1986; T.D.
ATF-345, 58 FR 40357, July 28, 1993]
Subpart U--Records and Reports
Sec. 25.291 Records.
(a) General. (1) The records to be maintained by brewers
include:
(i) All individual transaction forms, records, and summaries
specifically required by this part;
(ii) All supplemental, auxiliary, and source data used in
the
compilation of required forms, records, and summaries, and for
preparation of reports, returns, and claims; and
(iii) Copies of notices, reports, returns, and approved applications
and other documents relating to operations and transactions.
(2) The records required by this part may consist of the
brewer's
commercial documents, rather than records prepared expressly to meet the
requirements of this part, if those documents contain all the details
required by this part, are consistent with the general requirements of
clarity and accuracy, and do not result in difficulty in their
examination.
(b) Entries. (1) Each entry required by this part to be made
in
daily records will be made not later than the close of the business day
next succeeding the day on which the transaction occurs.
(2) When the brewer prepares transaction or business records
concurrenty with the individual operation or transaction and these
records contain all the required information with respect to the
operation or transaction, entries in daily records may be made not later
than the close of business the third business day succeeding the day on
which the operation or transaction occurs.
(c) Content. (1) All entries in the daily records required
by this
subpart will show the date of the operation or transaction.
(2) Daily records will accurately and clearly reflect the
details of
each operation or transaction and, as applicable, contain all data
necessary to enable--
(i) Brewers to prepare summaries, reports, and returns required
by
this part, and
(ii) ATF officers to verify removals of beer and cereal beverages,
to verify claims, and to ascertain if there has been compliance with law
and regulations.
(d) Format. (1) The brewer's copies of prescribed forms which
bear
all required details will be utilized as daily records.
(2) When a form is not prescribed, the records required by
this
subpart will be those commercial records used by the brewer in the
accounting system and will bear all required details.
(3) The brewer shall maintain daily records required by this
part so
they clearly and accurately reflect all mandatory information. When the
format or arrangement of the daily records is such that the information
is not clearly or accurately shown, the regional director (compliance)
may require a format or arrangement which will clearly and accurately
show the information.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended (26 U.S.C. 5415))
[[Page 641]]
Sec. 25.292 Daily records of operations.
(a) Daily records. A brewer shall maintain daily records
of
operations which show by quantity the following:
(1) Each kind of material received and used in the production
of
beer and cereal beverage (including the balling and the quantity of each
type of material used in the production of wort or concentrated wort).
(2) Beer and cereal beverage produced (including water added
after
production is determined).
(3) Beer and cereal beverage transferred for and returned
from
bottling.
(4) Beer and cereal beverage transferred for and returned
from
racking.
(5) Beer and cereal beverage bottled.
(6) Beer and cereal beverage racked.
(7) Cereal beverage removed from the brewery.
(8) Beer removed for consumption or sale. For each removal,
the
record will show the date of removal, the person to whom the beer was
shipped or delivered (not required for sales in quantities of one-half
barrel or less for delivery at the brewery), and the quantities of beer
removed in kegs and in bottels.
(9) Beer removed without payment of tax. For each removal,
the
record will show the date of removal, the person to whom the beer was
shipped or delivered, and the quantities of beer removed in kegs,
bottles, tanks, tank cars, tank trucks, tank ships, barges or deep tanks
of vessels.
(10) Packaged beer used for laboratory samples at the brewery.
(11) Beer consumed at the brewery.
(12) Beer returned to the brewery from which removed.
(13) Beer returned to the brewery after removal from another
brewery
owned by the brewer.
(14) Beer reconditioned, used as material, or destroyed.
(15) Beer received from other breweries or received from
pilot
brewing plants.
(16) Beer and cereal beverage lost due to breakage, theft,
casualty,
or other unusual cause.
(17) Brewing materials sold or transferred to pilot brewing
plants
(including the name and address of the person to whom shipped or
delivered) and brewing materials used in the manufacture of wort, wort
concentrate, malt syrup, and malt extract for sale or removal.
(18) Record of tests of measuring devices.
(19) Beer purchased from other brewers in the purchasing
brewer's
barrels and kegs and such beer sold to other brewers.
(b) Daily summary records. A brewer shall maintain daily
summaries
of the following transactions:
(1) Beer and cereal beverage bottled;
(2) Beer and cereal beverage racked;
(3) Beer removed for consumption or sale;
(4) Beer returned to the brewery from which removed;
(5) Beer returned to the brewery after removal from another
brewery
owned by the brewer; and
(6) Brewing materials, beer and cereal beverage in process,
and
finished beer and cereal beverage on hand.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended, 1395, as amended
(26 U.S.C. 5415, 5555))
[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986; 51 FR 9190, Mar. 18, 1986]
Sec. 25.293 Record of ballings and alcohol content.
The brewer shall maintain a record of the ballings of the
wort
produced, and of the ballings and the alcohol content of beer and cereal
beverage transferred for bottling and racking, between breweries in bulk
conveyances, and to pilot brewing plants. Records showing ballings and
alcohol content need not be consolidated and averaged daily unless the
brewer so desires.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended (26 U.S.C. 5415))
Sec. 25.294 Inventories.
(a) The brewer shall take a physical inventory of beer and
cereal
beverage at least once each calender month. The brewer may take this
inventory within 7 days of the close of the calendar month for which
made.
(b) The brewer shall make a record of inventories of beer
or cereal
beverage which will show the following:
(1) Date taken;
(2) Quantity of beer and cereal beverage on hand;
(3) Losses, gains, and shortages; and
[[Page 642]]
(4) Signature, under penalties of perjury of the brewer or
person
taking this inventory.
(c) The brewer shall retain inventory records and make them
available for inspection by an ATF officer.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended (26 U.S.C. 5415))
Sec. 25.295 Record of unsalable beer.
A brewer having unsalable beer in packages or tanks in the
brewery
may destroy, recondition, or use the beer as material. The brewer shall
report the quantity of the beer destroyed, reconditioned, or used as
materials, in daily records and on Form 5130.9. If the unsalable beer
consists of rejects from the packaging operations, the beer may be
destroyed without being included in the packaging production records,
and, when so destroyed, will be so reported in the brewer's daily
records and on Form 5130.9. When reject bottled beer is to be consumed
at the brewery or sold to brewery employees, or is cased or otherwise
accumulated pending other disposition, the quantity will be included in
the packaging production and be so reported in the brewer's daily
records and on Form 5130.9.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389 as amended, 1390, as amended,
1395 as amended (26 U.S.C. 5411, 5415, 5555))
Sec. 25.296 Record of beer concentrate.
(a) Daily records. A brewer who produces concentrate or
reconstitutes beer shall maintain daily records which accurately reflect
the balling, quantity, and alcohol content of--
(1) Beer entered into the concentration process;
(2) Concentrate produced;
(3) Concentrate transferred to other breweries;
(4) Concentrate exported;
(5) Concentrate received;
(6) Concentrate used in reconstituting beer; and
(7) Beer reconstituted.
(b) Summary report of operations. A brewer who produces concentrate
or reconstitutes beer shall report by specific entries on Form 5130.9,
the quantity of beer entered into the concentration process, and the
quantity of beer reconstituted from concentrate. In addition, the brewer
shall prepare on Form 5130.9, a summary accounting of all concentrate
operations at the brewery for the reporting period. This summary
accounting will show, in barrels of 31 gallons with fractions rounded to
2 decimal places:
(1) Concentrate on hand beginning of the reporting period;
(2) Concentrate on hand end of the reporting period;
(3) Concentrate produced;
(4) Concentrate received; and
(5) Specific disposition of concentrate such as ``used in
reconstitution,'' ``removed for export,'' ``removed to foreign-trade
zone,'' or ``transferred to other breweries.''
(26 U.S.C. 5415)
[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-345, 58
FR 40358, July 28, 1993]
Sec. 25.297 Brewer's Report of Operations, Form 5130.9.
(a) Monthly report of operations. Except as provided in paragraph
(b) of this section, each brewer shall prepare and submit a monthly
report of brewery operations on Form 5130.9 to the regional director
(compliance) not later than the 15th day of the month following the
close of the month for which prepared.
(b) Quarterly report of operations. (1) For calendar quarters
commencing on or after October 1, 1993, a brewer who produces less than
10,000 barrels of beer per calendar year may file the report of brewery
operations quarterly. The report will be filed on Form 5130.9 with the
regional director (compliance) not later than the 15th day of the month
following the close of the calendar quarter for which prepared. For the
purpose of establishing whether a quarterly report may be filed, the
brewer will determine annual production of beer by adding up the
quantities of beer produced, water/liquids added in cellars, and beer
received from other breweries and from pilot brewing plants for all
months of the previous calendar year.
(2) To begin the quarterly filing of a Brewer's Report of
Operations, a brewer will state such intent in the ``Remarks'' section
when filing the last monthly Form 5130.9 before the calendar quarter
during which the brewer
[[Page 643]]
will commence quarterly filings. A brewer beginning business may file
Form 5130.9 quarterly if the brewer states in the ``Remarks'' section of
its initial monthly Form 5130.9 that the annual production of beer is
not likely to exceed 10,000 barrels.
(3) If a brewer determines that the 10,000 barrel quantity
for a
calendar year will be exceeded in any month, the brewer shall file a
Form 5130.9 for that month and for all subsequent months of the calendar
year.
(4) The regional director (compliance) may at any time require
a
brewer who is filing a Brewer's Report of Operations quarterly to file
such report monthly if there is a jeopardy to the revenue.
(c) Retention. The brewer shall retain a copy of the Form
5130.9 as
part of the brewery records.
(26 U.S.C. 5415, 5555)
[T.D. ATF-345, 58 FR 40358, July 28, 1993]
Sec. 25.298 Excise tax return, Form 5000.24.
All entries on the excise tax return, Form 5000.24, will
be fully
supported by accurate and complete records. The brewer shall file a copy
of Form 5000.24 as a part of the records at the brewery.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended, 1390, as amended,
1395, as amended (26 U.S.C. 5061, 5415, 5555))
Sec. 25.299 Execution under penalties of perjury.
When a return, form, or other document is required by this
part or
in the instruction on or with the return, form, or other document to be
executed under the penalties of perjury, as defined in Sec. 25.11, it
will be so executed and will be signed by the brewer or other duly
authorized person.
(Act of August 16, 1954, 68A Stat. 749, as amended (26 U.S.C. 6065))
Sec. 25.300 Retention and preservation of records.
(a) Place of maintenance. Records required by this part will
be
prepared and kept by the brewer at the brewery where the operation or
transaction occurs and will be available for inspection by any ATF
officer during business hours.
(b) Reproduction of original records. Whenever any record,
because
of its condition, becomes unsuitable for its intended or continued use,
the brewer shall reproduce the record by a process under Sec. 25.301.
The reproduced record will be treated and considered for all purposes as
though it were the original record, and all provisions of law applicable
to the original are applicable to the reproduction.
(c) Retention of records. Records required by this part will
be
preserved for a period of not less than three years from the date
thereof or the date of the last entry required to be made thereon,
whichever is later. The regional director (compliance) may require
records to be kept for an additional period not exceeding three years in
any case where such retention is deemed necessary or advisable for the
protection of the revenue.
(d) Data Processing. (1) Notwithstanding any other provision
of this
section, record data maintained on data processing equipment may be kept
at a location other than the brewery if the original transaction
(source) records required by Secs. 25.292-25.298 are kept available for
inspection at the brewery.
(2) Data which has been accumulated on cards, tapes, discs,
or other
accepted record media will be retrievable within five business days.
(3) The applicable data processing program will be made available
for examination if requested by an ATF officer.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended (26 U.S.C. 5415))
Sec. 25.301 Photographic copies of records.
(a) General. Brewers may record, copy, or reproduce records
required
by this part. Brewers may use any process which accurately reproduces
the original record and which forms a durable medium for reproducing and
preserving the original record.
(b) Copies of records treated as original records. Whenever
records
are reproduced under this section, the reproduced records will be
preserved in conveniently accessible files, and provisions will be made
for examining, viewing and using the reproduced record
[[Page 644]]
the same as if it were the original record, and it will be treated and
considered for all purposes as through it were the original record. All
provisions of law and regulations applicable to the original are
applicable to the reproduced record. As used in this section, ``original
record'' means the record required by this part to be maintained or
preserved by the brewer, even though it may be an executed duplicate or
other copy of the document.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended, 1395, as amended
(26 U.S.C. 5415, 555
This was last updated on September 17, 1999