Proposals on the Production of Agricultural Wines

By Jennifer Berry (716) 434-8039

ATF will be proposing two changes to the production regulations for agricultural wines. Agricultural wines are defined in the regulations as wines made from agricultural products other than the juice of fruit - for example raisins, honey, rhubarb, etc. The first proposed change would allow agricultural wine makers to produce a standard agricultural wine with an alcohol by volume content of more than 14 percent.

The regulations in 27 CFR Part 24 currently classify agricultural wines with a higher alcohol content as "other than standard" wines. The second change would remove the minimum starting Brix of 22 degrees for agricultural wines. ATF is making these proposals after receiving petitions from a Texas raisin wine producer and a Colorado honey wine producer. The Regulations Division has drafted a Notice of Proposed Rulemaking proposing the changes, and hopes, upon publication, to receive comments from producers and consumers of agricultural wines. q

Acceleration of Returns and Payment of Excise Taxes Due in September

By Phyllis St. Clair (513) 684-3334

Public Law No. 103-465, the Uruguay Round Agreements Act, permanently accelerated the payment of taxes due on distilled spirits, wine, beer, tobacco products, and cigarette papers and tubes for the second semimonthly period of September. The new law split the second semimonthly period of September into two payment periods and required receipt of payment as described below. q

ALCOHOL AND TOBACCO TAXPAYERS REQUIRED TO FILE BY EFT

For those taxpayers required to file their payments by electronic fund transfer (EFT), the accelerated payment period is from September 16-26. Payment of taxes and a return for this accelerated payment period is due on or before September 28.

Industry Circular 95-4 outlines the accelerated payment periods and due dates. This year the accelerated period is September 16-26 and the return and payment of taxes are due on September 29, a Saturday. Therefore, it is due on Friday, September 28. Had the date fallen on Sunday, the return and payment of taxes would have been due on the following Monday.

Tax payment and a return for the remaining four days of the semi-monthly period, September 27-30 is due on October 12. For the short period, September 27-30, this return and tax payment is due on October 14. However, this day falls on a Sunday. Since this return is not an accelerated period, the return and taxes are due on Friday, October 12, as set forth in the regulations. q

Safe harbor - Under a safe harbor, the accelerated payment requirement is satisfied if the taxpayer pays an amount equal to 11/15th (73.3 percent) of the liability for the first semi-monthly period in September and any underpayment of tax for the accelerated period is paid by October 12. Taxpayers should show any increasing or decreasing adjustment for the accelerated period in Schedule A or B of the tax return due on October 12.

ALCOHOL AND TOBACCO TAXPAYERS NOT REQUIRED TO FILE BY EFT

For those taxpayers not required to file their payments by electronic fund transfer (EFT), the accelerated payment period is from September 16-25. Payment of taxes and a return for this period is due on or before September 28. Industry Circular 95-4 outlines the accelerated payment periods and due dates. This year the accelerated period is September 16-26 and the return and payment of taxes are due on September 29, a Saturday. Therefore, it is due on Friday, September 28. Had the date fallen on Sunday, the return and payment of taxes would have been due on the following Monday. A return and tax payment for the remaining five days of the semi-monthly period, September 26-30 is due on October 12. For the short period, September 26-30, this return and tax payment is due on October 14. However, this day falls on a Sunday. Since this return is not an accelerated period, the return and taxes are due on Friday, October 12, as set forth in the regulations.

Safe harbor - Under a safe harbor, the accelerated payment requirement is satisfied if the taxpayer pays an amount equal to 2/3rds (66.7 percent) of the liability for the first semi-monthly period in September and any underpayment of tax for the accelerated period is paid by October 12. Taxpayers should show any increasing or decreasing adjustment for the accelerated period in Schedule A or B of the tax return due on October 12.

Additional information about the accelerated return filings and payments should be directed to the Chief, National Revenue Center at (513) 684-3334 or 1-800-398-2282. q