Bonded Wine Premises Proprietors Removing Taxpaid or Tax Determined Wine and Filing a Drawback Claim
The following information addresses the most pertinent regulatory requirements pertaining to bonded wine premises proprietors removing taxpaid or tax determined wine from bonded wine premises for:
- Use as supplies on vessels and aircraft;
- Transfer to a foreign-trade zone; and
- Shipment to the U.S. armed forces for use overseas.
The regulations pertaining to the production of wine are contained in part 24 of Title 27 of the Code of Federal Regulations (CFR), while those pertaining to the exportation of wine are contained in 27 CFR, part 28. For the complete and regularly updated set of export regulations, please visit the e-CFR.
Authorized exportation of taxpaid or tax determined wine.
The provisions of 27 CFR 28.211 provide that taxpaid or tax determined wine produced in the United States may be removed from bonded wine premises for:
- Exportation to a foreign country;
- Use as supplies on the vessels and aircraft described in 27 CFR 28.21; or
- Transfer to and deposit in a foreign-trade zone for exportation or storage pending exportation.
The provisions of 27 CFR 28.243 provide for the shipment of taxpaid wine to the U.S. armed forces for use overseas.
In addition to the labeling requirements prescribed in 27 CFR part 24, 27 CFR 28.216 requires that the bonded wine premises proprietor mark the word “Export” on each container or case of wine, before removal for export, for use on vessels or aircraft, or for transfer to a foreign-trade zone.
Drawback notice and claim for taxpaid wine.
To obtain a refund of excise tax paid on wine that has been exported, or otherwise removed as listed above, bonded wine premises proprietors must file TTB F 5120.24, "Drawback on Wines Exported," in accordance with the instructions on that form.
For exportations, transfers to vessels, and transfers to foreign-trade zones, the regulations in 27 CFR 28.214 require that TTB F 5120.24 be prepared in quadruplicate and given a serial number beginning with "1" for the first day of January of each year and running consecutively thereafter to December 31.
For transfers as supplies on aircraft, the regulations in 27 CFR 28.214 require that TTB F 5120.24 be prepared in quadruplicate with an additional copy marked "Consignee’s Copy", and given a serial number beginning with "1" for the first day of January of each year and running consecutively thereafter to December 31.
Certificate of tax determination.
As required by 27 CFR 28.215, bonded wine premises proprietors must complete Parts I and III of TTB F 5120.20, “Certificate of Tax Determination – Wine” if the proprietor was the person who paid the excise tax on the wine, or Parts I and II if another party paid the excise tax. Part III must be completed by the party that paid the tax.
Proof of exportation.
In conjunction with submitting TTB F 5120.24, the bonded wine premises proprietor must submit appropriate and acceptable proof of exportation, which may vary depending on the purpose for the export and final destination of the product.For details on acceptable proof of exportation, please see 27 CFR 28.40, 28.41, and 28.42.
Industry Circulars 2000-2 and 2004-3 pertain to the exportation of taxpaid alcohol; however, TTB accepts the forms of proof of exportation outlined in those industry circulars as proof of exportation of taxpaid wine. In order to provide the type of proof of exportation as outline in Industry Circular 2004-3, the bonded wine premises proprietor must apply for and receive approval for the alternate method or procedure outlined in that Industry Circular.
Industry Circular 2004-3 notes that acceptable proof of exportation includes “all documents that substantiate the transaction as a removal for export.” Proof of export may include your system of commercial records, such as purchase orders, production schedules, inland bills of lading, ocean bills of lading, accounts receivable, letters of credit, proofs or payment, etc.
Report of wine premises operations.
Taxpaid exports are not shown as ‘Exported’ on TTB F 5120.17, “Report of Wine Premises Operations” because the wine had been previously taxably removed from inventory.
For information on other export certificates that may be required for exports to certain countries (e.g. Certificate of Free Sale), please visit our Export Documents page.
TTB G: 2010-13
Oct. 06, 2010