Established Brewery TTB Requirements: Excise Taxes, Record Keeping, Reports, Brewer's Bond, Labeling / Formulations
The TTB has the following list of requirements for anyone interested in starting a brewery:
The Taxman Cometh, and That Right Soon...
- When you start a brewery, you have the privilege of paying what are called 'excise taxes'. Excise taxes are a lot like sales tax, only instead of paying taxes on what you sell, you pay taxes on what you produce - whether you sell it or not. Another characteristic of excise taxes is that they're often hidden in the price of whatever item is being purchase - like gasoline, and well, beer. The current federal excise tax rate for breweries is $18/barrel for breweries that produce 2M barrels or more annually. For breweries that produce less beer than that amount, the rate is $7/barrel.
- Now that we know the federal excise tax rate for breweries, let's break down how and when you'll be paying those taxes:
- When you file your federal excise tax returns depends on the amount of excise taxes you are expected to pay during the present calendar year. If you're expecting to pay less than $50,000 in excise taxes (roughly 7143 barrels) this year, you're required to file quarterly tax returns using form 5000.24 Excise Tax Return which you can submit electronically at pay.gov. If you expect to pay more than $50,000 in excise taxes, you will have to file the same form on a semi-monthly basis. No, semi-monthly doesn't mean every 2 months...it means every two weeks. Payment is also due upon return filing.
Record Breaking Recordkeeping
The TTB requires you to keep the following records of operations and finances:
- Daily Records of Operations
- Records of Bailing & Alcohol Content
- Inventory Records
- Records of Unsalable Beer
- Records of Beer Concentrate
These records are to be kept on brewery premises and made available for inspection by a TTB officer during normal business hours. Records must be maintained for a minimum of 3 years.
Reports - Which Are Different Than Records And Returns...
Each quarter you are required to file an operational report based on the following critieria:
- If you were liable for less than $50,000 in excise taxes: File out report: TTB F 5130.26
- If you were liable for more than $50,000 in excise taxes: File report: TTB 5130.9
Changes - Not Just A Great Song By Tupac
In the event any of the following changes are made to the brewery, you'll need to notify the TTB:
- Address / Location
- Add / Remove Individual's Signing Authority
- Add / Remove Power of Attorney
- Business Name Change
- Add / Remove Brewery Trade Name
- Change in Brewery Operations
- Change in Control
- Change in Officer, Director, Member, or Stockholder/Interest
- Bond Superseding / Strengthening / Continuation
- Adding Additional Brewery Premises
- Add / Remove Brewery Alternation of Proprietor
- Add / Remove Variance or Alternate Method
- Termination of Brewery
Updated in 2017, only breweries expected to be liable for more than $50,000 in excise taxes are required to carry a Brewer's Bond (yay!). The Brewer's Bond expires 4 years from the effective date listed at the bottom of the bond. To avoid losing the right to manufacture beer, an established Brewer's Bond will need to be continued using continuation form TTB F 5130.23
If your brewery plans to ship products across state lines, you'll need to seek approval from the TTB prior to doing so. You may submit your bottle/can labels online via the TTBs COLA system or you can submit a copy of your label with form TTB F 5100.31 and mail it to the TTB at Advertising, Labeling, & Formulation Division, TTB, 1310 G Street, NW, Box 12, Washington, DC 20005. The TTB may also require you to submit your formula for approval before you submit your labels.