TTB Business Central - Maintaining Compliance as a Nonbeverage Alcohol Dealer or User

To withdraw specially denatured spirits, you must make a copy of the permit, manually sign, and date and send the copy to your supplier. You may make as many copies as necessary to be sure that each of your suppliers, or prospective suppliers, is in possession of a copy of your permit.  You must also write the word “COPY” across the face of the permit.  After you have sent the copy to your supplier, there is no need to submit one with future orders as long as the permit remains accurate and has not been amended.

You must file TTB F 5150.18, User's Report of Denatured Alcohol or Rum, summarizing your specially denatured spirits activities during the fiscal year July 1st through June 30th. This report is to be submitted to the address on the form by July 15th each year.

You are responsible for making sure that your withdrawals of alcohol do not exceed the capacity of your storage facilities or the quantity authorized by your permit. You must keep records of your receipt and use of specially denatured spirits as required by 
27 CFR 20.263 and 27 CFR 20.264.

If the article that you plan to manufacture is not covered by one of the general use formulas set out in 27 CFR 20.112-119, you must submit TTB F 5150.19, Formula and/or Process for Articles Made with Specially Denatured Spirits, in duplicate, to our laboratory at the following address:

Alcohol and Tobacco Tax and Trade Bureau 
National Laboratory Center
6000 Ammendale Road
Ammendale, MD 20705-1250

Attention: SDA

Return to Top

A supplier may not ship specially denatured spirits to you until they have a photocopy of your permit in their possession (27 CFR 20.161). Before your first order is placed as a dealer in specially denatured spirits you must make a copy of your permit, manually sign the copy, enter the date of signature, and then send a copy to your suppliers.  You must write the word “COPY” across the face of the permit.  Once a supplier has a copy of your permit there is no need to send one with subsequent orders except in the case of an amended permit.

Furthermore, as a dealer of specially denatured alcohol, you may not ship specially denatured spirits to your customers unless you have a signed copy of their permit.

You must keep records of your receipt and use of specially denatured spirits as required by 27 CFR 20.262.

Return to Top

Reports will be prepared and kept at the premises and available for inspection by a TTB officer during business hours. Preserve required records for a period of not less than three years from either the date of the transaction or the date of the last entry required to be made, whichever is later.

• Users
  You must file TTB Form 5150.18, User's Report of Denatured Alcohol or Rum, summarizing your specially denatured spirits activities during the fiscal year July 1st through June 30th. This report is due in this office by July 15th each year.  Download TTB F 5150.18 [PDF]
• Where to File:            
  Alcohol and Tobacco Tax and Trade Bureau 
  National Revenue Center
  550 Main St, Ste. 8002, 
  Cincinnati, OH 45202-3222

Return to Top

Any change in the name, address, ownership, management or control of the business must be reported to TTB without delay. If you filed your original application on paper, and haven't requested that your data be migrated to our Permits Online system, you should file these amendments on the TTB forms described in the applicable regulations. If you filed your original application through Permits Online, you should also electronically file your amendments in Permits Online. For more information see the regulations at 27 CFR 20.56-64.

• Change in Location
  Select this amendment if you will be moving your business operations to another location within the same state.  If moving to another state you will need to file an original application.
• Change in Mailing Address 
  Select this amendment if there has been a change to where you will receive mail.
• Change in Premises Address – USPS 
  Select this amendment if your address was changed by the United States Postal Service but no physical move has taken place.
• Add/Remove Signing Authority 
  Select this amendment if you will be making any changes to the existing signing authority on file.  You will be required to attach the appropriate documentation showing where the authorization is granted.
• Add/Remove Power of Attorney 
  Select this amendment if adding or removing individuals from outside your company with the power to sign and/or act on behalf of the company.  When adding a Power of Attorney you can upload the form in Permits Online or mail to the address on the form. Download Power of Attorney form TTB F 5000.8  [PDF]
• Change in Business Name 
  Select this amendment if there has been a change to your legal business entity’s name.  You will need to attach a copy of your amended articles showing the name change.
• Change in Control 
  A change in actual or legal control occurs when there are changes in stock ownership, LLC membership ownership, or possibly major changes in the corporate officers or directors of a corporation.  In such situations, the legal business entity which operated the business in the past continues to operate the subject business.  In other words, the same legal entity remains in existence which continues to operate the business in question.
  
  If adding a new person, an Owner Officer Information Application must be completed through Permits Online if your records are in Permits Online.
• Change in Officer, Director, Member, or Stockholder/Interest 
  Select this amendment when there is a change in the officers, directors, members and managers, as well as any shareholders who hold 10 percent or more.  An Owner Officer Information Application must be completed for each new person through Permits Online.
• Add/Remove Variance or Alternate Method 
  Selecting this amendment is a request to vary from the regulations.  You will need a letterhead notice stating the regulations you wish to vary from along with a reason why this variance is needed.
• Termination of Business 
  Select this amendment if you are discontinuing business.

Return to Top

For your reading, here is easy access to the Code of Federal Regulations and public laws relating to the specially denatured alcohol (SDA) industry.

• Laws
  26 U.S.C. 5273 - Sale, Use, and Recovery of Denatured Distilled Spirits
• Regulations
  Select an item to view the relevant section of the Code of Federal Regulations.
  • 27 CFR Part 20, Distribution and Use of Denatured Alcohol and Rum
  • 27 CFR Part 21, Formulas for Denatured Alcohol and Rum
  • List of products and processes using specially denatured alcohol and rum, and the corresponding authorized formulas
  • List of denaturants authorized for denatured spirits

Return to Top

Storage facilities must be of sufficient capacity to hold the maximum quantity on hand at any one time, and must be constructed and secured to prevent unauthorized access. Stationary storage tanks must be equipped with a means for measuring spirits.

Return to Top

There are additional responsibilities and requirements that you may have to meet, including state laws. 

• TTB personnel have the right of entry into your premises.
  
   
• Please ensure you are in compliance with your state and local authorities before commencing operations (including building/use permits and zoning requirements).  If you intend to sell your products in any other State (other than the State in which you are applying), you must contact each state individually because they all have different shipping laws.

Return to Top

You must maintain records of your receipt and use of tax-free alcohol, and take a physical inventory of the alcohol on a semi-annual basis.

You must monitor your withdrawals to ensure that the cumulative quantity withdrawn or received during a calendar year does not exceed the amount authorized by your permit. If you need more alcohol than your permit allows, you must obtain from TTB an updated permit authorizing the appropriate amount, and provide to your supplier a copy of the updated permit.

Anyone removing, selling, transporting, or using tax-free alcohol in violation of the law or regulations will be required to pay the distilled spirits federal excise tax on the alcohol.

Return to Top

If you filed your original application on paper, and haven't requested that your data be migrated to our Permits Online system, you should file these amendments on the TTB forms described in the applicable regulations. If you filed your original application through Permits Online, you should also electronically file your amendments in Permits Online. For more information about changes see the regulations at 27 CFR 22.57-64.

• Change in Location (Premises)
  Select this amendment if you will be moving your business operations to another location within the same state.
• Change in Mailing Address
  Select this amendment if there has been a change to where you will receive mail.
• Change in Permit  Address – USPS
  Select this amendment if your address was changed by the United States Postal Service but no physical move has taken place.
• Add/Remove Signing Authority
  Select this amendment if you will be making any changes to the existing signing authority on file.  You will be required to attach the appropriate documentation showing where the authorization is granted.
• Add/Remove Power of Attorney
  Select this amendment if adding or removing individuals from outside your company with the power to sign and/or act on behalf of the company.  When adding a Power of Attorney you must upload the form into Permits Online. Download  TTB F 5000.8 PDF].
• Change in Business Name
  Select this amendment if there has been a change to your legal business entity’s name.  You will need to attach a copy of your amended articles showing the name change.
• Change in Control
  A change in actual or legal control occurs in stock ownership, LLC membership ownership, or possibly major changes in the corporate officers or directors of a corporation.  In such situations, the legal business entity which operated the business in the past continues to operate the business.  In other words, the same legal entity remains in existence.
• Change in Officer, Director, Member, or Stockholder/Interest
  Select this amendment when there is a change in the officers, directors, members and managers, as well as any stockholders who hold percent or more.  An Owner Officer Information Application must be completed for each new person through Permits Online.
• Add/Remove Variance or Alternate Method
  Selecting this amendment is a request to vary from the regulations.  You will need to state the regulations you wish to vary from along with an explanation of why this variance is needed.
• Termination of Business
  Select this amendment if you are discontinuing business.  If you permanently discontinue operations under your permit, you must give written notice to TTB’s National Revenue Center (NRC), surrender your permit, and properly dispose of all alcohol you have on hand before the NRC terminates your permit. You must also retrieve all photocopies of your permit from suppliers and destroy them.
• Add/Remove Ship to Location
  Select this amendment if you will have a designated area where the alcohol will be delivered and dispersed to the location (on the permit) where operations are being conducted. For example, alcohol is shipped to a central location, such as, a receiving dock, and then ship from the dock to the permitted premises. You will need to give a list of each ship to location within Permits Online.
• Add/Remove Use Location (State Agencies Only)
  Select this amendment if you will are a state agency that will have multiply locations where alcohol will be used. For example, a state-approved university may have one permit for several areas where alcohol is used on campus. A list for each location must be documented.
• Change in Withdrawal Amount
  Select this amendment if you will Increase or decrease your authorized annual amount of alcohol used. If increasing your annual withdrawals over 1500 proof gallons a year, you will be required to submit for additional information, such as organization documents.

Return to Top

• Laws
  Please select an item to view the statute.
•  
  • § 5214. Withdrawal of distilled spirits from bonded premises free of tax or without payment of tax  
  • § 5312. Production and use of distilled spirits for experimental research
• Regulations
  Select an item to view the relevant section of the Code of Federal Regulations.
  27 CFR Part 22, Distribution and Use of Tax-Free Alcohol.

Return to Top

• Copy of Permit
  To withdraw tax-free alcohol, you must make a copy of your permit, manually sign the copy, enter the date of signature, and send the copy to your supplier. You may make as many copies as necessary to be sure that each of your suppliers, or prospective suppliers, has a copy of your permit. After you have sent the copy to your supplier, there is no need to submit one with subsequent orders.
  
  More Information
  An approved tax-free alcohol user may withdraw alcohol from a bonded distilled spirits plant, free of tax. The alcohol withdrawn under these conditions may only be used for nonbeverage purposes and not for resale or use in the manufacture of any product for sale, subject to the use limitations specified in Subpart G of Part 22 of TTB regulations. 

Return to Top

• Beverage Purposes
  Under no circumstances may tax-free alcohol withdrawn be used for beverage purposes, food products, or in any preparation used in preparing beverage or food products.
• Alcohol Sale
  Persons 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 27 CFR 22.105   and 27 CFR 22.106.   Hospitals may not furnish tax-free alcohol for use of physicians in their private practice.
• Removal from Premises
  Persons 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.

Return to Top

There are additional responsibilities and requirements that you may have to meet including state laws.  

• TTB personnel have the right of entry into your premises.
• Please ensure you are in compliance with your state and local authorities before commencing operations (including building/use permits and zoning requirements).

Return to Top