Liquor Laws and Regulations for Retail Dealers

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John Manfreda, Administrator

To all Retail Dealers of Distilled Spirits, Wine or Beer:
This publication will explain the principal Federal liquor laws and regulations that affect you. Its purpose is to help you conduct your business in compliance with the law and regulations.

You should read the entire text and retain it or bookmark it for further reference. Later, when you have a particular question, you will find the answer by using the Table of Contents.

If you need more specific or detailed information, you may obtain copies of the complete TTB regulations, Title 27 CFR (which includes Part 31, Alcohol Beverage Dealers), by visiting TTB's Regulations page at TTB.gov. Copies of the CFR are available for viewing at the Code of Federal Regulations (Annual Edition) page at the U.S. Government Printing Office Web site; you can also browse the e-CFR, a currently updated version of the CFR.

Please feel free to contact TTB's National Revenue Center concerning any of the requirements that may not be clear to you. For your convenience, the mailing address and telephone number of the National Revenue Center are listed on the final page of this publication.

John Manfreda
Administrator,
Tax and Trade Bureau


Liquor Laws and Regulations for Retail Dealers

Contents
1. General
2. Retail Dealers Must Register with TTB
3. Requirement to Amend Registration
4. Requirements on Retail Dealers Who Sell to Other Dealers
5. Closures on Bottles of Distilled Spirits
6. Refilling, Reusing and Disposing of Liquor Bottles
7. Prohibited Purchases of Distilled Spirits
8. Required Records
9. Inspection by Alcohol and Tobacco Tax and Trade Officers

1. General

Retail dealers of distilled spirits, wine or beer must comply with certain requirements of federal laws and regulations. Failure to comply with these requirements carries severe penalties and renders the dealer liable to criminal prosecution. This publication summarizes the more important provisions of federal laws and regulations applicable to retail dealers.

2.   Retail Dealers Must Register with TTB

Although the special tax for retail dealers has been repealed, every retail dealer is still required to register with TTB using TTB F 5630.5d.  Also remember that you still must pay any past due tax liabilities that were incurred for periods before the effective date of the repeal using TTB F 563 0.5a. For more information, call
877-882-3277 or visit the Special (Occupational) Tax Frequently Asked Questions page at TTB.gov.

3. Requirement to Amend Registration

You must amend your registration using TTB F 5630.5d if you move your place of business or if there is a change in ownership or control of the business.

4. Requirements on Retail Dealers Who Sell to Other Dealers

(a)  Registration as wholesale dealer - A retail dealer becomes a wholesale dealer when selling distilled spirits, wine or beer to another dealer other than a limited retail dealer. Under law, a retailer who sells or offers for sale distilled spirits, wine or beer in quantities of 20 wine gallons (75.7 liters) or more to the same person at the same time is presumed to be engaged in business as a wholesale dealer. The seller may overcome this presumption only by furnishing satisfactory evidence that the sale was made to a person who is not a dealer.

(b)  Permit requirements - Retail dealers may not sell any distilled spirits, wine or beer to another dealer for purposes of resale until they obtain a wholesaler's basic permit under the Federal Alcohol Administration Act. Persons who violate any of the permit requirements of the Act become liable to penalties. Forms on which to apply for permits may be obtained from TTB's National Revenue Center listed on the final page of this publication, for use by dealers who intend to conduct business.

5.   Closures on Bottles of Distilled Spirits

Distilled spirits plants and importers are required to securely affix a tamper-evident closure or similar device to all bottles or other containers of distilled spirits. This would apply to bottles of whiskey, gin, rum, brandy, vodka, cordials containing distilled spirits, and all other similar liquors. The closure must be a type that is broken when the container is opened, leaving a portion of the closure on the container. Products may be closed with a proprietary paper seal, metal roll-on, plastic pilfer-proof cap, lead foil capsule with zip tab, cello-seal with zip tab, strip stamp or similar device. Retailers, who receive liquor bottles without the required closures, or with broken closures, should report these containers to a TTB officer.

6.   Refilling, Reusing and Disposing of Liquor Bottles

(a)  Refilling or reusing liquor bottles - Any retail dealer, or agent or employee of such dealer, who refills any liquor bottle with distilled spirits, or who reuses any liquor bottle by adding distilled spirits or any substance (including water) to the original contents is subject to a fine of not more than $1000 or imprisonment for not more than 1 year, or both.

(b)  Disposition of liquor bottle - The possession of used liquor bottles by any person other than the one who emptied the contents thereof is prohibited, except that this prohibition shall not:

(1)  prevent the owner or occupant of any premises on which such bottles have been lawfully emptied from assembling the same on such premises

(i)   for delivery to a bottler or importer on specific request for such bottler or importer;

(ii)   for destruction either on the premises on which the bottles are emptied or elsewhere, including disposition for purposes which will result in the bottles being rendered unusable as bottles; or

(iii)  in the case of unusual or distinctive bottles, for disposition as collectors' items or for other purposes not involving the packaging of any products for sale;

(2)  prevent any person from possessing, offering for sale, or selling such unusual or distinctive bottles for purposes not involving the packaging of any product for sale; or

(3)  prevent any person from assembling used liquor bottles for the purpose of recycling or reclaiming the glass or other approved liquor bottle material.

Any person possessing liquor bottles in violation of law or regulations is subject to a fine of not more that $1000, imprisonment for not more than 1 year, or both.

7.   Prohibited Purchases of Distilled Spirits

Retail dealers may purchase distilled spirits only from wholesale dealers who are required to keep records pursuant to regulations under section 5121 of the Internal Revenue Code of 1986 (26 U.S.C. 5121) or from (a) proprietors of distilled spirits plants; (b) administrators, executors, or receivers in bankruptcy who are disposing of assets; and (c) dealers who are going out of business and selling their entire stock. A dealer who makes prohibited purchases of distilled spirits is subject to a fine of not more than $1000, imprisonment for not more than 1 year, or both. 

8.   Required Records

All retail dealers must either keep a record in book form showing the date and quantity of all distilled spirits, wine and beer received on their premises, and from whom received, or keep all invoices of, and bills for all distilled spirits, wine or beer received. Also, every retail dealer is required to keep a record of sales of distilled spirits, wine or beer in quantities of 20 wine gallons or more to the same person at the same time, which shows (a) the date of sale, (b) name and address of purchaser, (c) kind and quantity of liquors sold and (d) the serial numbers of any full cases of distilled spirits in the sale. A dealer who, with fraudulent intent, fails or refuses to keep the required records, is subject to a fine of not more than $10,000 and imprisonment for not more than 5 years, and a dealer who, without fraudulent intent, fails to keep the required records is subject to a fine of not more than $1000, imprisonment for not more than 1 year, or both.

9. Inspection by Alcohol and Tobacco Tax and Trade Officers

A retail dealer's place of business and the stock of liquors are subject to inspection by TTB officers having proper credentials. The TTB officers are authorized to examine records and to accept tender of offers in compromise of liability arising from a violation of Federal liquor laws. The TTB officer will issue a receipt to a dealer for any type of remittance received if the dealer requests a receipt.

If any dealer forcibly rescues any liquor or other property seized by a TTB officer, or attempts to do so, he is subject to a fine of either not more than $500 or double the value of the property rescued, whichever is greater, or imprisonment for not more than 2 years. Any retailer who forcibly obstructs or attempts to obstruct a TTB officer in the performance of his duties is subject to a fine of not more than $5000 or imprisonment for not more than 3 years, or both, except that if the offense is committed only by threats of force, the person convicted thereof shall be fined not more than $3000 or imprisoned for not more than 1 year, or both.

For further information, contact:
Alcohol and Tobacco Tax and Trade Bureau
National Revenue Center
550 Main Street Suite 8002
Cincinnati, Ohio 45202
Toll Free: 1-877-TTB-FAQS (1-877-882-3277)
Submit an online inquiry

Page last reviewed/updated: 08/29/2012


 
 
 

When Disaster Strikes

Businesses (retailers, wholesalers, importers, export warehouse proprietors, and manufacturers of beverage alcohol and tobacco products) may file claims with the Alcohol and Tobacco Tax and Trade Bureau (TTB) for the payment (refund or allowance of credit) of Federal excise taxes paid on beverage alcohol or tobacco products lost, rendered unmarketable, or condemned by a duly authorized official under various circumstances, including where the President has declared a major disaster.

Claims are subject to a number of conditions, including those relating to…

  • Timeframe: You must file your claim with TTB within 6 months from the date of a disaster. If the President declares or determines a major disaster, claims must be filed no later than 6 months from the date the President declared the major disaster.
  • Theft: Alcohol and tobacco products lost due to theft are not eligible for a disaster claim. However under certain conditions, distillers (26 U.S.C. section 5008), brewers (26 U.S.C. section 5056), and wineries (26 U.S.C. section 5370) may obtain relief from the excise taxes where they can show that the theft was not the result of connivance, collusion, fraud or negligence on the part of the distiller, brewer or winery or any of its consignor, consignee, bailor, bailee, or carrier, or the employees or agents of any of those people.
  • Alcohol Products: For distilled spirits, wine, and beer, TTB will not allow claims for less than $250 for losses resulting from a disaster unless the President has declared a major disaster area. There is no minimum dollar amount placed on claims relating to presidentially declared disasters.
  • Tobacco and Related Products: For tobacco products, cigarette papers and tubes, the $250 minimum claim amount does not apply. Retailer or wholesaler claims can only be filed if the loss is due to a presidentially declared disaster area.
  • Insurance: TTB will not pay claims if your insurance covers the amount of the Federal excise tax paid or you are otherwise indemnified by parties such as carriers, business partners, shipping companies, third-party insurance policies, etc. for the tax loss. For example, if your insurance policy covers the full amount that you paid for destroyed alcohol or tobacco products, including the amount paid for any excise tax, then you are not eligible to file a claim for those products.
  • Purchase Price: Your claim must state whether taxes were included in the purchase price of the products. If your claim includes imported products, you must state whether duties were included in the purchase price. Claims for customs duties must be submitted separately to U.S. Customs. Claims for tax on products of Puerto Rico must be filed with the government of Puerto Rico.
  • Proof of Ownership:  You must prove that you owned the products at the time of the disaster with the intent to sell them.
  • Goods in Transit:  If your goods were in transit, you may be eligible for payment if you hold title to those goods. If any portion of your claim includes goods in transit, please include a statement indicating who held title at the time of the disaster.
  • Payment of Claims: TTB will pay claims without interest on an amount equal to taxes paid or determined on distilled spirits, wine, beer or tobacco products lost, made un-merchantable, or condemned by a duly authorized official as a result of fire, flood, or other disaster. Before you destroy any un-merchantable or condemned products, contact TTB and ask if the Bureau wants to witness the destruction.
  • TTB Guidance:  26 U.S.C. 5064, for alcohol, and 26 U.S.C. 5705 and 5708, for tobacco, are the sections of the Internal Revenue Code which will allow you to file your claim for payment under various circumstances relating to disasters.

Filing your claim:

You must file your claim(s) using TTB Form 5620.8 Claim - Alcohol, Tobacco and Firearms Taxes, and mail the form to the following address:

Alcohol and Tobacco Tax and Trade Bureau
National Revenue Center
550 Main Street
Suite 8002
Cincinnati, Ohio 45202-5215

In addition, you must provide the following information on TTB Form 5620.8 in Item 11 for losses incurred:

  • Distilled Spirits - Brand, type, bottle size, bottles per case, alcohol content ( or proof), number of cases, proof gallons per case, total in proof gallons, tax rate per unit, and total tax.
  • Wine - Brand, type, bottle size, bottles per case, percent of alcohol by volume, liters per case, number of cases, total liters, tax rate per unit, and total tax.
  • Beer - Brand, size of unit, number of units, tax rate per unit, and total tax.
  • Tobacco Products and Cigarette Papers and Tubes - Brand, type of tobacco product, unit of measure, total quantity, tax rate, and total tax. Provide proof that the products were taxed at the rate you are claiming or were removed tax paid during the period that the rate was effective.

noteNOTE
Supporting documentation is necessary to process your claim without delay. You must submit on the claim form any evidence or statement made by State or local officials regarding the condition of the property. You must submit proof that you were not indemnified by any valid claim of insurance or otherwise include a copy of your insurance policy with your claim. If your records are lost, you must obtain other supporting documentation that might be available such as copies of invoices from your supplier, copies of inventory records from your accountant, or copies of banking or insurance records.



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For more information on disaster claims and filing, contact the National Revenue Center at 1-877-882-3277 or contact us online.

Page last reviewed/updated: 06/26/2014

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