What Domestic Activities Constitute 'Processing' for the Purpose of Determining Eligibility for the Reduced Distilled Spirits Tax Rates?
Reduced tax rates are allowed on distilled spirits that are distilled or processed by a domestic distilled spirits plant (DSP) and removed by a DSP during the calendar year. A domestic DSP is considered a processor of distilled spirits if it “manufactures, mixes, or otherwise processes distilled spirits” or “manufactures any article.” See 26 U.S.C. 5002(a)(5)(A). “The term ‘processor’ includes (but is not limited to) a rectifier, bottler, or denaturer.” See 26 U.S.C. 5002(a)(5)(B). For distilled spirits removed after December 31, 2021, “[a] distilled spirit shall not be treated as processed [for reduced rate purposes] unless a process described in [26 U.S.C. 5002(a)(5)(A)] (other than bottling) is performed with respect to such distilled spirit.” See 26 U.S.C. 5001(c)(5).
For purposes of the reduced rates, a domestic DSP is considered a processor of distilled spirits if it:
- manufactures distilled spirits,
- mixes distilled spirits with materials including flavors, wines, water (except that the addition of water during the normal process of bottling for the purpose of ensuring label proof does not constitute “processing” for reduced rate purposes), or other distilled spirits of any type, and/or
- otherwise physically changes the distilled spirits inside the container, including filtering distilled spirits to remove material from those distilled spirits.
Processing does not include changing the marks or labels on distilled spirits containers or repacking containers of distilled spirits without physically changing the distilled spirits inside the containers.
Note: Eligibility for the reduced tax rates or new tax credits may be limited by application of the single taxpayer or controlled group rules.
U.S. Customs and Border Protection: Trade Facilitation and Cargo Security Summit 2024
 TTB-regulated industries may find this notice of interest.
SOURCE: Federal Register / Vol. 88, No. 215 / Wednesday, November 8, 2023
AGENCY: U.S. Customs and Border Protection, Department of Homeland Security.
ACTION: Notice of 2024 Trade Facilitation and Cargo Security Summit
SUMMARY: This document announces that U.S. Customs and Border Protection (CBP) will convene the 2024 Trade Facilitation and Cargo Security (TFCS) Summit in Philadelphia, PA, on March 26–28, 2024. The 2024 TFCS Summit will be open for the public to attend in person or via webinar. The 2024 TFCS Summit will feature CBP personnel, members of the trade community, and members of other government agencies in panel discussions on CBP’s role in international trade initiatives and programs. Members of the international trade and transportation communities and other interested parties are encouraged to attend.
DATES: Tuesday, March 26, 2024 (opening remarks and general sessions, 8 a.m.–5 p.m. EDT), Wednesday, March 27, 2024 (breakout sessions, 8 a.m.–5 p.m. EDT), and Thursday, March 28, 2024 (breakout sessions, 8 a.m.–12 p.m. EDT).
TTB Career Opportunity for Recent Graduates: Auditor (Financial)
Are you a recent graduate and interested in a career at an agency that ranks in the top 10% of Best Places to Work in the Federal Government? If yes, consider applying for this TTB job.
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