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Drawback Tutorial

Important links

1% lists - solutions of natural or artificial flavor chemicals unfit at 1% (wt/wt) in 95% v/v ethanol
Tolerance table - used to determine range in alcohol content of finished products

The following can be accessed at the Lab’s Limited Ingredients Web page. 

  • Approved colors
  • The FDA list of limited ingredients
  • TTB limited ingredients
  • The FDA list of prohibited ingredients

Other sources of information:

Definitions

5010 Tax Credit: For a complete explanation, please visit the Beverage Alcohol page.

Absolute ethanol:  Also called 200 proof ethanol or anhydrous ethanol.  It is ethanol with all of the water removed.

Artificial (including nature identical):  Please see 21 CFR 101.22 for a detailed discussion of food labeling requirements.

Density: Mass divided by volume.  Please see the density section for a complete explanation.

Drawback:  The portion of excise taxes paid on distilled spirits returned to the manufacturer of nonbeverage products when tax-paid alcohol is used to produce approved products unfit for beverage purposes.

GRAS: Generally Recognized As Safe – See the FDA's website for more information.

Intermediate products: Products to which all three of the following conditions apply: (1) they are made with taxpaid distilled spirits, (2) they have been disapproved for drawback, and (3) they are made by the manufacturer exclusively for its own use in the manufacture of nonbeverage products approved for drawback.

Natural:  Please see 21 CFR 101.22 for a detailed discussion of food labeling requirements.

Neutral grain spirits:  A clear liquid distilled at high ethyl alcohol content. The term neutral refers to the substance's neutral odor and lack of characteristic taste. The grain from which it is derived can be any of the common cereal grains.

Nonbeverage products:  The products in this class must meet two criteria.  They must be unfit for beverage purposes and they must fall within one of the six eligible product classes.  The six classes are foods, flavors, flavoring extracts, medicines, medicinal preparations, and perfumes.

Proof:  A measure of the amount of ethanol in distilled spirits. Proof is twice the percentage of ethanol by volume.  For example, 95% ethanol by volume is 190 proof ethanol.

Proof gallon:  The official definition (as found in 27 CFR 19.11) is a gallon of liquid at 60 degrees Fahrenheit which contains 50 percent by volume of ethyl alcohol having a specific gravity of 0.7939 at 60 degrees Fahrenheit referred to water at 60 degrees Fahrenheit as unity, or the alcoholic equivalent thereof.

To calculate proof gallons from wine gallons, use the following formula:

(Proof ÷ 100) × wine gallons = proof gallons

Example:      (80 proof ÷ 100) × 1 wine gallon = 0.8 proof gallons

Recovered spirits: Taxpaid spirits that have been salvaged, after use in the manufacture of a product or ingredient, so that the spirits are reusable.

Unfit for beverage purposes: The average person would not mistake the product for an alcoholic beverage.

Wine gallon:  Common measure of volume containing 128 liquid ounces, regardless of ethanol content.

Page last reviewed/updated: 02/11/2019

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