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Ruling 74-19

ATF Ruling 74-19

The Bureau of Alcohol, tobacco and Firearms has been requested to restudy its position as set out in Revenue Ruling 72-95 which, as now stated, requires the recalculation and recording of the applicable percentages required to qualify a wine for purposes of vintage, appellation of origin and varietal designation when minor volume increases occur from wine spirits addition for the adjustment of alcohol content, from the use of a bentonite slurry, or from other authorized additions subsequent to the "initial production."

The Bureau recognizes that certain authorized additions may be made to raw wine subsequent to the initial production which are necessary to the process of finishing, polishing and stabilizing wine prior to bottling. The Bureau also recognizes that it is, at times, necessary or desirable to make minor adjustments of alcohol content by further additions of wine spirits subsequent to the initial wine spirits addition. Percentage recalculation to reflect each of such minor adjustments would be burdensome and would frequently result only in reducing the total eligible wine by fractional percentages. To permit minor increases in volume subsequent to the initial production process without recalculation of eligible percentages, the conditions of Revenue Ruling 72-95 are restated as follows: The amount of sugar, sugar-water solution, or liquid sugar used in the production of wine historically has been excluded from percentage calculation to qualify a wine under 27 CFR Part 4, for purposes of vintage, appellation of origin, and varietal designation.

On the basis of this rationale, it is held that certain other authorized additions to wine need not be taken into account when calculating the applicable percentages required to establish vintage, appellation of origin and varietal designation. Those authorized additions shall include the wine spirits used in the initial production, the wine spirits used for the final adjustment of alcoholic content and such other material that must be added as an essential part of the fining and finishing of the wine. However, except for volume increases resulting from the addition of spirits, the combined total of other treatments shall not be excluded from percentage calculations if the volume of wine is increased by more than one percent.

Revenue Ruling 72-95, C. B. 72-1,429 (Internal Revenue) is hereby superseded.

26 CFR 240.916,, 27 CFR 4.10(h), 27 CFR 4.23 and 27 CFR 4.25.

Last updated: May 2, 2024