[Code of Federal Regulations]
[Title 27, Volume 1]
[Revised as of April 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 27CFR70.411]

[Page 1033-1036]
 
            TITLE 27--ALCOHOL, TOBACCO PRODUCTS AND FIREARMS
 
 CHAPTER I--ALCOHOL AND TOBACCO TAX AND TRADE BUREAU, DEPARTMENT OF THE 
                                TREASURY
 
PART 70--PROCEDURE AND ADMINISTRATION--Table of Contents
 
Subpart E--Procedural Rules Relating to Alcohol, Tobacco, Firearms, and 
                               Explosives
 
Sec. 70.411  Imposition of taxes, qualification requirements, and regulations.

    Source: T.D. ATF-251, 52 FR 19325, May 22, 1987. Redesignated by 
T.D. ATF-301, 55 FR 47653, Nov. 14, 1990.

        Provisions Relating to Distilled Spirits, Wines, and Beer


    (a) Imposition of taxes. Subchapter A of Chapter 51 of the Internal 
Revenue Code of 1954 imposes taxes on distilled spirits (including 
alcohol), wine and beer. Occupational taxes are imposed upon brewers, 
dealers in liquors, and proprietors of distilled spirits plants, bonded 
wine cellars, bonded wine warehouses, and taxpaid wine bottling houses; 
on industrial users of tax-free distilled spirits; on dealers, users, 
and recoverers of specially denatured spirits; and as a prerequisite for 
drawback under section 5134 of the Internal Revenue Code, upon 
manufacturers of nonbeverage products.
    (b) Qualification requirements. Distillers, winemakers, brewers, 
warehousemen, rectifiers, bottlers, dealers in specially denatured 
alcohol, users of tax-free and specially denatured alcohol, and 
wholesalers and importers of liquors, are required to qualify with ATF 
usually by filing notice or application and bond with, and procuring 
permit from, the appropriate ATF officer. Detailed information 
respecting such qualification, including the forms to be used and the 
procedure to be followed, is contained in the respective regulations 
described in paragraph (c) of this section.
    (c) Regulations. The procedural requirements with respect to matters 
relating to distilled spirits, wines, and beer which are within the 
jurisdiction of the ATF are published in the regulations described in 
this paragraph. These regulations contain full information as to the 
general course and method by which the functions concerning liquors are 
channeled and determined, including the nature and requirements

[[Page 1034]]

of formal and informal procedures, the forms, records, reports, and 
other documents required, and the contents of applications, notices, 
registrations, permits, bonds, and other documents. Supplies of 
prescribed forms may be obtained from the ATF Distribution Center, 7943 
Angus Court, Springfield, Virginia 22153. The following is a brief 
description of the several regulations arranged according to the 
principal subjects and operations concerned:
    (1) Establishment and operation of distilled spirits plants. Part 19 
of title 27 CFR contains the regulations relating to the location, 
qualification, construction, arrangement, equipment, and operations 
(including activities incident thereto) of distilled spirits plants for 
the production and/or warehousing (including denaturation), and bottling 
(including bottling in bond) of distilled spirits. Part 19 also contains 
the regulations relating to distilled spirits for fuel use and the 
production of vinegar by the vaporizing process.
    (2) Miscellaneous liquor transactions. Part 29 of 27 CFR contains 
miscellaneous regulations relative to the manufacture, removal, and use 
of stills and condensers, and to the notice, registration, and 
recordkeeping requirements therefor.
    (3) [Reserved]
    (4) Gauging of distilled spirits. Part 30 of title 27 CFR contains 
the regulations that. prescribe the gauging instruments, and methods or 
techniques to be used in measuring distilled spirits (including 
denatured spirits). Tables are provided for use in making the necessary 
computation from gauge data.
    (5) Rules of practice in permit proceedings. Part 71 of title 27 CFR 
contains the rules governing the procedure and practice in connection 
with the disapproval of applications for basic permits, and for the 
issuance of citations for the suspension, revocation, and annulment of 
such permits under sections 3 and 4 of the Federal Alcohol 
Acministration Act (27 U.S.C. 201 et seq.), and disapproval, suspension, 
and revocation of industrial use, operating, withdrawal, and tobacco 
permits under the Internal Revenue Code. Such rules also govern, insofar 
as applicable, any adversary proceeding involving adjudication required 
by statute to oe determined on the record, after opportunity for 
hearing, under laws administered by the Bureau of Alcohol, Tobacco and 
Firearms.
    (6) Basic permit requirements under the Federal Alcohol 
Administration Act. 27 CFR part 1, issued pursuant to the Federal 
Alcohol Administration Act, as amended, contains the requirements 
relative to the issuance under the Act of basic permits to producers, 
rectifiers, blenders, bottlers, warehousemen, importers, and wholesalers 
of distilled spirits, wine, or beer, and the amendment, duration, 
revocation, suspension, or annulment of such permits.
    (7) Bulk sales and bottling of distilled spirits. 27 CFR part 3, 
issued under the Federal Alcohol Administration Act, as amended, 
contains the requirements relative to bulk sales and bottling of 
distilled spirits under the Federal Alcohol Administration Act, 
including the terms of warehouse receipts for distilled spirits in bulk.
    (8) Labeling and advertising of distilled spirits. 27 CFR part 5, 
issued under the Federal Alcohol Administration Act, as amended, 
contains the requirements relative to the labeling and advertising of 
distilled spirits under the Federal Alcohol Administration Act, 
including standards of identity for distilled spirits, standards of fill 
for bottles of distilled spirits, withdrawal of bottled imported 
distilled spirits from customs custody, and the issuance of certificates 
of label approval and certificates of exemption from label approval.
    (9) American viticultural areas. Part 9 of title 27 CFR contains the 
regulations that relate to American viticultural areas. The viticultural 
areas described in these regulations are approved for use as 
appellations of origin in accordance with 27 CFR part 4.
    (10) Production and removal of wine. Part 24 of title 27 CFR 
contains the regulations relative to the establishment and operation of 
bonded wine cellars, including bonded wineries, for the production, 
cellar treatment, and storage of wines, including amelioration, 
sweetening, addition of volatile fruit flavor concentrates, addition of 
wine spirits (including distillates containing aldehydes), blending, and 
other cellar

[[Page 1035]]

treatment; removals; taxpayment; return of unmerchantable taxpaid wine; 
use of wine for distilling material and manufacture of vinegar; and 
record and report requirements.
    (11) Bottling or Packaging of taxpaid wine. Part 24 of title 27 CFR 
contains the regulations relative to the establishment, qualification, 
and operations of taxpaid wine bottling houses on premises other than 
those of a plant operated under part 19 of title 27 CFR, and to the 
bottling and packaging of taxpaid United States and foreign wines at 
such premises.
    (12) Nonindustrial use of distilled spirits and wine. 27 CFR part 2, 
issued under the Federal Alcohol Administration Act, as amended, 
specifies what uses of distilled spirits and wine are considered 
``nonindustrial,'' as that term is used in section 17 of the Federal 
Alcohol Administration Act.
    (13) Labeling and advertising of wine. 27 CFR part 4, issued under 
the Federal Alcohol Administration Act, as amended, contains the 
requirements relative to the labeling and advertising of wine under the 
Federal Alcohol Administration Act, including standards of identity for 
wine, standards of fill for containers of wine, the withdrawal of 
imported wine from customs custody, and the issuance of certificates of 
label approval and certificates of exemption from label approval.
    (14) Establishment and operations of breweries and experimental 
breweries. Part 25 of title 27 CFR contains the regulations relating to 
the production (including concentration and reconstitution incident 
thereto) and removal of beer and cereal beverages. The regulations cover 
the location, construction, equipment, and operations of breweries; and 
the qualification of such establishments, including the ownership, 
control, and management thereof, and the establishment and operations of 
experimental breweries.
    (15) Labeling and advertising of malt beverages. 27 CFR part 7, 
issued under the Federal Alcohol Administration Act, as amended, 
contains the requirements relative to the labeling and advertising of 
malt beverages (beer) under the Federal Alcohol Administration Act, 
including withdrawal of imported malt beverages from customs custody, 
and the issuance of certificates of label approval.
    (16) Liquor dealers. Part 194 of title 27 CFR contains the 
regulations relative to the special (occupational) taxes imposed on 
wholesale and retail dealers in liquors, wholesale and retail dealers in 
beer, and limited retail dealers; restrictions on purchases of distilled 
spirits; reuse or refilling of liquor bottles; sale or possession of 
refilled or used liquor bottles; repackaging of alcohol for industrial 
use; recordkeeping and reporting requirements; and provisions relating 
to entry of premises and inspection of records.
    (17) Drawback of tax on spirits used in nonbeverage products. Part 
17 of title 27 CFR contains the regulations which relate to obtaining 
drawback of internal revenue tax on distilled spirits used in the 
manufacture or production of medicines, medicinal preparations, food 
products, flavors, or flavoring extracts, which are unfit for beverage 
purposes.
    (18) Production of volatile fruit-flavor concentrates. Part 18 of 
title 27 CFR contains the regulations relating to the manufacture, 
removal, sale, storage, transfer in bond, transportation, recordkeeping 
and reporting requirements, and use of volatile fruit flavor 
concentrates. It includes provisions regarding the location, 
qualification, use, and operations of concentrate plants.
    (19) Tied-House. 27 CFR part 6, issued under the Federal Alcohol 
Administration Act, as amended, specifies practices which are prohibited 
by subsection (b) of section 5 of the Act and provides the exception to 
these prohibitions. This part applies only to transactions between 
industry members and retailers.
    (20) Exclusive outlets. 27 CFR part 8, issued under the Federal 
Alcohol Administration Act, as amended, specifies practices which are 
prohibited by subsection (a) of section 5 of the Act. This part applies 
only to transactions between industry members and retailers.
    (21) Commercial bribery. 27 CFR part 10, issued under the Federal 
Alcohol Administration Act, as amended, specifies practices which are 
prohibited by subsection (c) of section 5 of the Act.

[[Page 1036]]

This part applies to transactions between industry members and 
employees, officers, or representatives of trade buyers.
    (22) Consignment sales. 27 CFR part 11, issued under the Federal 
Alcohol Administration Act, as amended, specifies sales arrangements 
prohibited by subsection (d) of section 5 of the Act and contains 
guidelines concerning the return of distilled spirits, wines, and malt 
beverages from a trade buyer. The regulations in this part apply to 
transactions between industry members and trade buyers.
    (23) Distribution and use of denatured alcohol and rum. Part 20 of 
title 27 CFR contains the regulations relating to the procurement, use, 
disposition, and recovery of denatured alcohol, specially denatured rum, 
and articles containing denatured spirits; and includes requirements in 
respect to industrial use and withdrawal permits; and the packaging, 
labeling, sales, rebottling, and reprocessing of articles containing 
specially denatured spirits.
    (24) Formulas for denatured alcohol and rum. Part 21 of title 27 CFR 
contains the regulations relating to the formulation of completely 
denatured alcohol, specially denatured alcohol, and specially denatured 
rum; to the use of specially denatured spirits; and to the 
specifications for denaturants. The procedural requirements relative to 
the production of denatured alcohol and specially denatured rum are 
prescribed in part 19 of title 27 CFR, and those relative to the 
distribution and use of denatured alcohol and specially denatured rum 
are prescribed in part 20 of title 27 CFR.
    (25) Distribution and use of tax-free alcohol. Part 22 of title 27 
CFR contains the regulations relating to tax-free alcohol and covers the 
procurement, storage, use, and recovery of such alcohol; and included 
requirements in respect to industrial use and withdrawal permits.
    (26) Liquors and articles from Puerto Rico and the Virgin Islands. 
Part 26 of title 27 CFR contains the regulations relating to the 
production, bonded warehousing, and withdrawal of distilled spirits, and 
denatured spirits, and the manufacture of articles in Puerto Rico and 
the Virgin Islands to be brought into the United States free of tax and 
the collection of internal revenue taxes on taxable alcoholic products 
coming into the United States from Puerto Rico and the Virgin Islands. 
Regulations respecting spirits produced in Puerto Rico or the Virgin 
Islands and brought into the United States and transferred from customs 
custody to internal revenue bond are also contained in this part.
    (27) Importation of liquors. Part 27 of title 27 CFR contains the 
substantive and procedural requirements relative to the importation of 
distilled spirits, wines, and beer into the United States from foreign 
countries including special (occupational) and commodity taxes, permits, 
marking, branding, and labeling of containers and packages.
    (28) Exportation of liquors. Part 252 of title 27 CFR contains the 
regulations relating to exportation including, where applicable, lading 
for use on vessels and aircraft, transfer to a foreign-trade zone, or 
transfer to a manufacturing bonded warehouse, Class 6, of distilled 
spirits (including specially denatured spirits), beer (including beer 
concentrate), and wine, and transfer of distilled spirits and wine for 
deposit in a customs bonded warehouse, whether without payment of tax, 
free of tax, or with benefit of drawback. It includes requirements with 
respect to removal, shipment, lading, deposit, evidence of exportation, 
losses, claims, and bonds.

(Approved by the Office of Management and Budget under control number 
1512-0472)

[T.D. ATF-251, 52 FR 19325, May 22, 1987, as amended by T.D. ATF-271, 53 
FR 17549, May 17, 1988; T.D. ATF-299, 55 FR 24989, June 19, 1990. 
Redesignated and amended by T.D. ATF-301, 55 FR 47606, 47653, Nov. 14, 
1990; T.D. ATF-376, 61 FR 31031, June 19, 1996; T.D. ATF-379, 61 FR 
31426, June 20, 1996; T.D. ATF-432, 65 FR 69253, Nov. 16, 2000; T.D. 
ATF-450, 66 FR 29028, May 29, 2001; T.D. ATF-459, 66 FR 38550, July 25, 
2001; T.D. ATF-463, 66 FR 42734, Aug. 15, 2001; T.D. ATF-462, 66 FR 
42737, Aug. 15, 2001; T.D. ATF-479, 67 FR 30799, May 8, 2002]