[Code of Federal Regulations]
[Title 27, Volume 1]
[Revised as of April 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 27CFR22.102]

[Page 573]
 
            TITLE 27--ALCOHOL, TOBACCO PRODUCTS AND FIREARMS
 
 CHAPTER I--ALCOHOL AND TOBACCO TAX AND TRADE BUREAU, DEPARTMENT OF THE 
                                TREASURY
 
PART 22_DISTRIBUTION AND USE OF TAX-FREE ALCOHOL--Table of Contents
 
                    Subpart G_Use of Tax-Free Alcohol
 
Sec.  22.102  Prohibited uses.

    (a) Usage. Under no circumstances may tax-free alcohol withdrawn 
under this part be used for beverage purposes, food products, or in any 
preparation used in preparing beverage or food products.
    (b) Selling. Persons qualified under this part are prohibited from 
selling tax-free alcohol, using tax-free alcohol in the manufacture of 
any product for sale, or selling any products resulting from the use of 
tax-free alcohol. A separate charge may be made by a hospital, 
sanitarium or clinic for medicines compounded with tax-free alcohol and 
dispensed to patients for use on the premises, as provided in Sec. Sec.  
22.105 and 22.106. Hospitals may not furnish tax-free alcohol for use of 
physicians in their private practice.
    (c) Removal from premises. Persons qualified under this part may not 
remove tax-free alcohol or products resulting from the use of tax-free 
alcohol from the permit premises unless specifically authorized by the 
terms of their permit, or permission is obtained from the appropriate 
TTB officer, except that:
    (1) Products made through the use of tax-free alcohol which contain 
no alcohol may be removed to other premises for the sole purpose of 
further research; or
    (2) Under the provisions of Sec. Sec.  22.105 and 22.106, clinics 
operated for charity and not for profit may compound bona fide medicines 
with tax-free alcohol, and dispense the medicine from the premises for 
use by its patients outside of the clinic, if the furnishing of the 
medicine is not conditioned upon payment.
    (d) Liability for tax. Permittees who use tax-free alcohol in any 
manner prohibited by this section become liable for the tax on the 
alcohol. Any permittee who sells tax-free alcohol also becomes liable 
for special (occupational) tax as a liquor dealer.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended, 1343, as amended, 
1362, as amended (26 U.S.C. 5001, 5121, 5214))