Requirements for Medium or Large Alcohol Fuel Plant Operations

As long as the fuel alcohol is withdrawn from an AFP under the provisions of 27 CFR, part 19, subpart X, taxes are not due. The statutory provisions of 26 U.S.C. 5181 provide for the withdrawal of distilled spirits from AFP premises free of tax exclusively for fuel use as provided in 26 U.S.C. 5214(a)(12), and section 5214(a)(12) states that distilled spirits on which the tax has not been paid or determined, subject to such regulations as the secretary shall prescribe, may be withdrawn from bonded premises free of tax .

No taxes are due in the following circumstances:

• When the fuel alcohol is withdrawn from an AFP (see 27 CFR, part 19, subpart X)
• When distilled spirits are withdrawn from an AFP premises for fuel use (see 26 U.S.C. 5181 and 26 U.S.C. 5214(a)(12))
• When distilled spirits, on which tax has not been paid or determined, subject to such regulations as the secretary shall prescribe, are withdrawn from bonded premises (see 5214(a)(12)).
  
  
• Unfit for Beverage Use
  Distilled spirits that have been rendered unfit for beverage use (see 27 CFR, part 19, subpart X) may be withdrawn tax-free from the premises of an AFP exclusively for fuel use (see 27 CFR 19.728).
  
  
• Diversion of Spirits
  Payment of tax will be required in the case of diversion of spirits to beverage use or other unauthorized dispositions. The provisions of 27 CFR part 19, are applicable to distilled spirits for fuel use. Specifically:

• • The imposition of tax liability (27 CFR 19.21 — 19.25);
  • The assessment of tax (27 CFR 19.253 and 19.254); and
  • Claims for tax (27 CFR 19.262and 19.263).

Return to Top

You can file most operational reports electronically using Pay.gov.  It’s secure, free, and can be faster and less costly than using paper forms. 

Return to Top

As a permit holder, you must prepare and keep records at the alcohol fuel plant premises and available for inspection by a TTB officer during business hours.  You must 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.

• Records you are required to maintain:
• • Annual Physical Inventory ( 27 CFR 19.710)
  • Daily Quantity (volume or weight) and proof of spirits produced ( 27 CFR 19.714 – 19.718)
  • Quantity (volume or weight) of spirits on-hand and received
  • Quantity (volume or weight) and types of materials added to render spirits unfit for beverage use
  • Quantity (volume or weight) of fuel alcohol manufactured
  • Disposition of spirits and fuel alcohol
  • Statement of the kind and quantity of materials used to produce spirits
  • Operations that are verifiable by TTB
  • Commercial records that you keep
  • Entries made on day the operation or transaction occurs

Return to Top

You must report to us any change in the name, address, ownership, management or control of the business without delay.  You should file your amendments through Permits Online.

Amendments within Permits Online are divided into two categories:  commonly filed and *commodity specific.  Listed below are commonly filed amendments and specifically filed amendments for alcohol fuel plants. 

• Change in Plant Location (Premises) (27 CFR 19.690)
  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.  You will need to submit a new diagram, lease agreement, and either a superseding bond or consent of surety.

• Change in Mailing Address (27 CFR 19.691)
  Select this amendment if there has been a change to where you will receive mail.

• Change in Premises Address – USPS (27 CFR 19.691)
  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 scan and upload your 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 (27 CFR 19.688)
  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. 

• Change in Officer, Director, Member, or Stockholder/Interest (27 CFR 19.687)
  Select this amendment when there is a change in the officers, directors, members and managers, as well as any stockholders/interest holders 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 (27 CFR 19.665 – 19.667)
  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 (27 CFR 19.695)
  Select this amendment if you are discontinuing business. 

• AFP Bond – Superseding/Strengthening* (27 CFR 19.700)
  Select this amendment if there will be any changes to your current approved bond, such as, an increase in penal sum or a different surety company.

• Change in AFP Equipment*
  Select this amendment to convey a change in major equipment, or construction or use of the building(s) comprising of your premises, including an extension or curtailment of your approved premises.

• AFP Receiving Spirits or Denatured Spirits by Transfer in Bond* (27 CFR 19.733)
  Select this amendment if you will be receiving spirits transferred in bond to your approved premise from another location.

• Change in AFP Bonded Premises (Extended, Curtailed, or Modified)*
  Select this amendment is there will be any changes to your bonded premises, to include a change in major equipment, construction, or use of the building(s) comprising your premises, including an extension or curtailment of your approved premises.

• Change in Size/Type* (27 CFR 19.685)
  Select this amendment if you will have any change to the approved size of your plant due to an increase or decrease in production.

Note:  The description of stills on the approved alcohol fuel producer's permit application constitutes registration of stills (see 27 CFR 19.680). A change in type or location of a still constitutes amendment of the permit. Permits can be amended through Permits Online.

Return to Top

TTB has been delegated authority under 26 U.S.C. Chapter 51 of the Internal Revenue Code of 1986 (IRC) to publish regulations pertaining to Alcohol Fuel Plants, or AFPs (see  Section 5181 of the IRC (26 U.S.C. 5181)).

Section 5181 of the IRC also provides for the establishment of AFPs to produce, process, store, and use or distribute distilled spirits to be used exclusively for fuel use.

Return to Top

Distilled spirits plant proprietors are required to gauge the amount removed from their bonded premises. If you are a distilled spirits plant proprietor, you will need to "gauge" the spirits; in other words, determine the quantity and proof of the spirits.

• Requirements
  Gauges are required:

• • On completion of production of spirits
  • On receipt of spirits at the plant
  • Prior to the addition of materials to render spirits unfit for beverage use
  • Before withdrawal from premise or other disposition (fuel alcohol –volume only is required)
  • When spirits are to be inventoried

• Processes
  If you are an alcohol fuel plant, it is important that you know how to proof your spirits correctly.  See our Distilled Spirits - Frequently Used Proofing Processes page for our TTB Proofing Video Series and other helpful proofing resources that will help guide you through the proofing process.  Note: Methods used must be accurate (volume must be temperature-corrected).

Return to Top

 

The materials on the Authorized Materials for Fuel Alcohol (PDF) list are approved to render spirits unfit for beverage use, thus making the spirits acceptable for withdrawal from alcohol fuel plants as fuel alcohol (see 27 CFR 19.746(b)). 

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.  See our direct shipping page for more information.

Return to Top