Filing Claims for Taxes on Losses Caused by Natural Disasters
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
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.
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.