[Title 27 CFR ]
[Code of Federal Regulations (annual edition) - April 1, 2002 Edition]
[From the U.S. Government Printing Office]



[[Page i]]



                    27


          Parts 1 to 199

                         Revised as of April 1, 2002

Alcohol, Tobacco Products and Firearms





          Containing a codification of documents of general 
          applicability and future effect
          As of April 1, 2002
          With Ancillaries
          Published by
          Office of the Federal Register
          National Archives and Records
          Administration

A Special Edition of the Federal Register



[[Page ii]]

                                      




                     U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2002



  For sale by the Superintendent of Documents, U.S. Government Printing 
                                  Office
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[[Page iii]]




                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 27:
          Chapter I--Bureau of Alcohol, Tobacco and Firearms, 
          Department of the Treasury                                 3
  Finding Aids:
      Material Approved for Incorporation by Reference........    1265
      Table of CFR Titles and Chapters........................    1267
      Alphabetical List of Agencies Appearing in the CFR......    1285
      Redesignation Table.....................................    1295
      List of CFR Sections Affected...........................    1297



[[Page iv]]


      


                     ----------------------------

                     Cite this Code:  CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus,  27 CFR 1.1 refers 
                       to title 27, part 1, 
                       section 1.

                     ----------------------------

[[Page v]]



                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

    The contents of the Federal Register are required to be judicially 
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
together to determine the latest version of any given rule.
    To determine whether a Code volume has been amended since its 
revision date (in this case, April 1, 2002), consult the ``List of CFR 
Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative 
List of Parts Affected,'' which appears in the Reader Aids section of 
the daily Federal Register. These two lists will identify the Federal 
Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

    Each volume of the Code contains amendments published in the Federal 
Register since the last revision of that volume of the Code. Source 
citations for the regulations are referred to by volume number and page 
number of the Federal Register and date of publication. Publication 
dates and effective dates are usually not the same and care must be 
exercised by the user in determining the actual effective date. In 
instances where the effective date is beyond the cut-off date for the 
Code a note has been inserted to reflect the future effective date. In 
those instances where a regulation published in the Federal Register 
states a date certain for expiration, an appropriate note will be 
inserted following the text.

OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires 
Federal agencies to display an OMB control number with their information 
collection request.

[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
amendments to existing regulations in the CFR. These OMB numbers are 
placed as close as possible to the applicable recordkeeping or reporting 
requirements.

OBSOLETE PROVISIONS

    Provisions that become obsolete before the revision date stated on 
the cover of each volume are not carried. Code users may find the text 
of provisions in effect on a given date in the past by using the 
appropriate numerical list of sections affected. For the period before 
January 1, 1986, consult either the List of CFR Sections Affected, 1949-
1963, 1964-1972, or 1973-1985, published in seven separate volumes. For 
the period beginning January 1, 1986, a ``List of CFR Sections 
Affected'' is published at the end of each CFR volume.

INCORPORATION BY REFERENCE

    What is incorporation by reference? Incorporation by reference was 
established by statute and allows Federal agencies to meet the 
requirement to publish regulations in the Federal Register by referring 
to materials already published elsewhere. For an incorporation to be 
valid, the Director of the Federal Register must approve it. The legal 
effect of incorporation by reference is that the material is treated as 
if it were published in full in the Federal Register (5 U.S.C. 552(a)). 
This material, like any other properly issued regulation, has the force 
of law.
    What is a proper incorporation by reference? The Director of the 
Federal Register will approve an incorporation by reference only when 
the requirements of 1 CFR part 51 are met. Some of the elements on which 
approval is based are:
    (a) The incorporation will substantially reduce the volume of 
material published in the Federal Register.
    (b) The matter incorporated is in fact available to the extent 
necessary to afford fairness and uniformity in the administrative 
process.
    (c) The incorporating document is drafted and submitted for 
publication in accordance with 1 CFR part 51.
    Properly approved incorporations by reference in this volume are 
listed in the Finding Aids at the end of this volume.
    What if the material incorporated by reference cannot be found? If 
you have any problem locating or obtaining a copy of material listed in 
the Finding Aids of this volume as an approved incorporation by 
reference, please contact the agency that issued the regulation 
containing that incorporation. If, after contacting the agency, you find 
the material is not available, please notify the Director of the Federal 
Register, National Archives and Records Administration, Washington DC 
20408, or call (202) 523-4534.

CFR INDEXES AND TABULAR GUIDES

    A subject index to the Code of Federal Regulations is contained in a 
separate volume, revised annually as of January 1, entitled CFR Index 
and Finding Aids. This volume contains the Parallel Table of Statutory 
Authorities and Agency Rules (Table I). A list of CFR titles, chapters, 
and parts and an alphabetical list of agencies publishing in the CFR are 
also included in this volume.
    An index to the text of ``Title 3--The President'' is carried within 
that volume.
    The Federal Register Index is issued monthly in cumulative form. 
This index is based on a consolidation of the ``Contents'' entries in 
the daily Federal Register.
    A List of CFR Sections Affected (LSA) is published monthly, keyed to 
the revision dates of the 50 CFR titles.


[[Page vii]]


REPUBLICATION OF MATERIAL

    There are no restrictions on the republication of material appearing 
in the Code of Federal Regulations.

INQUIRIES

    For a legal interpretation or explanation of any regulation in this 
volume, contact the issuing agency. The issuing agency's name appears at 
the top of odd-numbered pages.
    For inquiries concerning CFR reference assistance, call 202-523-5227 
or write to the Director, Office of the Federal Register, National 
Archives and Records Administration, Washington, DC 20408 or e-mail 
[email protected].

SALES

    The Government Printing Office (GPO) processes all sales and 
distribution of the CFR. For payment by credit card, call 202-512-1800, 
M-F, 8 a.m. to 4 p.m. e.s.t. or fax your order to 202-512-2250, 24 hours 
a day. For payment by check, write to the Superintendent of Documents, 
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Customer Service call 202-512-1803.

ELECTRONIC SERVICES

    The full text of the Code of Federal Regulations, the LSA (List of 
CFR Sections Affected), The United States Government Manual, the Federal 
Register, Public Laws, Public Papers, Weekly Compilation of Presidential 
Documents and the Privacy Act Compilation are available in electronic 
format at www.access.gpo.gov/nara (``GPO Access''). For more 
information, contact Electronic Information Dissemination Services, U.S. 
Government Printing Office. Phone 202-512-1530, or 888-293-6498 (toll-
free). E-mail, [email protected].
    The Office of the Federal Register also offers a free service on the 
National Archives and Records Administration's (NARA) World Wide Web 
site for public law numbers, Federal Register finding aids, and related 
information. Connect to NARA's web site at www.nara.gov/fedreg. The NARA 
site also contains links to GPO Access.

                              Raymond A. Mosley,
                                    Director,
                          Office of the Federal Register.

April 1, 2002.



[[Page ix]]



                               THIS TITLE

    Title 27--Alcohol, Tobacco Products, and Firearms is composed of two 
volumes, parts 1-199 and part 200 to end. The contents of these volumes 
represent all current regulations issued by the Bureau of Alcohol, 
Tobacco and Firearms, Department of the Treasury as of April 1, 2002.

    A redesignation table appears in the Finding Aids section of the 
volume containing parts 1-199.

[[Page x]]






[[Page 1]]



            TITLE 27--ALCOHOL, TOBACCO PRODUCTS AND FIREARMS




                   (This book contains parts 1 to 199)

  --------------------------------------------------------------------
                                                                    Part

chapter i--Bureau of Alcohol, Tobacco and Firearms, 
  Department of the Treasury................................           1

Cross References: U.S. Customs Service, Department of the Treasury: See 
  19 CFR Chapter I.

  Federal Trade Commission: See 16 CFR Chapter I.

  Food and Drug Administration, Department of Health and Human Services: 
See 21 CFR Chapter I.

  Foreign Trade Statistics, Bureau of the Census, Department of 
Commerce: See 15 CFR Part 30.

  Postal Service: See section 124 of the Domestic Mail Manual.


  Other regulations issued by the Department of the Treasury appear in 
title 26; 31 CFR chapter I.


Abbreviations: The following abbreviations are used in this chapter:
    ATF=Alcohol, Tobacco and Firearms.   T.D.=Treasury Decision.

[[Page 3]]



 CHAPTER I--BUREAU OF ALCOHOL, TOBACCO AND FIREARMS, DEPARTMENT OF THE 
                                TREASURY




  --------------------------------------------------------------------


  Editorial Note: The regulations appearing in this title were 
originally issued by the Federal Alcohol Administration, which was 
abolished by Reorganization Plan No. III, Apr. 2, 1940, 5 FR 2107, 3 
CFR, 1940 Supp. Treasury Order 30, June 12, 1940, 5 FR 2212, issued 
under sections 2 and 8 of Reorganization Plan No. III (54 Stat. 1232) 
provided that these regulations continue in effect as regulations of the 
Bureau of Alcohol, Tobacco and Firearms.

                          SUBCHAPTER A--LIQUORS
Part                                                                Page
1               Basic permit requirements under the Federal 
                    Alcohol Administration Act, 
                    nonindustrial use of distilled spirits 
                    and wine, bulk sales and bottling of 
                    distilled spirits.......................           5
4               Labeling and advertising of wine............          13
5               Labeling and advertising of distilled 
                    spirits.................................          45
6               ``Tied-House''..............................          73
7               Labeling and advertising of malt beverages..          84
8               Exclusive outlets...........................          97
9               American viticultural areas.................         101
10              Commercial bribery..........................         231
11              Consignment sales...........................         234
12              Foreign nongeneric names of geographic 
                    significance used in the designation of 
                    wines...................................         238
13              Labeling proceedings........................         241
16              Alcoholic beverage health warning statement.         250
17              Drawback on taxpaid distilled spirits used 
                    in manufacturing nonbeverage products...         252
18              Production of volatile fruit-flavor 
                    concentrate.............................         276
19              Distilled spirits plants....................         287
20              Distribution and use of denatured alcohol 
                    and rum.................................         425
21              Formulas for denatured alcohol and rum......         467
22              Distribution and use of tax-free alcohol....         496
24              Wine........................................         520
25              Beer........................................         607
26              Liquors and articles from Puerto Rico and 
                    the Virgin Islands......................         656

[[Page 4]]

29              Stills and miscellaneous regulations........         710
30              Gauging manual..............................         714
                          SUBCHAPTER B--TOBACCO
40              Manufacture of tobacco products and 
                    cigarette papers and tubes..............         727
44              Exportation of tobacco products and 
                    cigarette papers and tubes, without 
                    payment of tax, or with drawback of tax.         784
45              Removal of tobacco products and cigarette 
                    papers and tubes, without payment of 
                    tax, for use of the United States.......         824
46              Miscellaneous regulations relating to 
                    tobacco products and cigarette papers 
                    and tubes...............................         832
                         SUBCHAPTER C--FIREARMS
47              Importation of arms, ammunition and 
                    implements of war.......................         852
53              Manufacturers excise taxes--firearms and 
                    ammunition..............................         865
55              Commerce in explosives......................         927
                       SUBCHAPTERS D-E [RESERVED]
                 SUBCHAPTER F--PROCEDURES AND PRACTICES
70              Procedure and administration................         973
71              Rules of practice in permit proceedings.....        1103
72              Disposition of seized personal property.....        1121
                       SUBCHAPTERS G-L [RESERVED]
          SUBCHAPTER M--ALCOHOL, TOBACCO AND OTHER EXCISE TAXES
178             Commerce in firearms and ammunition.........        1131
179             Machine guns, destructive devices, and 
                    certain other firearms..................        1199
194             Liquor dealers..............................        1227
198-199         [Reserved]

     

  Additional supplementary publications are issued covering individual 
parts of the Alcohol, Tobacco and Firearms Regulations, the Tobacco Tax 
Guide, and Regulations Under Tax Conventions.

[[Page 5]]



                          SUBCHAPTER A--LIQUORS





  PART 1--BASIC PERMIT REQUIREMENTS UNDER THE FEDERAL ALCOHOL ADMINISTRATION ACT, NONINDUSTRIAL USE OF DISTILLED SPIRITS AND WINE, BULK SALES AND BOTTLING OF 
DISTILLED SPIRITS--Table of Contents




                            Subpart A--Scope

Sec.
1.1  General.
1.2  Territorial extent.
1.3  Forms prescribed.
1.4  Delegations of the Director.

                         Subpart B--Definitions

1.10  Meaning of terms.

                        Subpart C--Basic Permits

                              When Required

1.20  Importers.
1.21  Domestic producers, rectifiers, blenders, and warehousemen.
1.22  Wholesalers.
1.23  State agencies.

                    Persons Entitled to Basic Permits

1.24  Qualifications of applicants.

                        Applications for Permits

1.25  General.
1.26  Incomplete or incorrectly executed applications.
1.27  Change in ownership, management, or control of the applicant.
1.29  Individual plant or premises.
1.30  Power of attorney; Form 5000.8 (1534).
1.31  Denial of permit applications.

                              Authorization

1.35  Authority to issue, amend, deny, suspend, revoke, or annul basic 
          permits.

                 Amendment and Duration of Basic Permits

1.40  Change of name.
1.41  Change of address.
1.42  Change in ownership, management, or control of business.
1.43  Duration of permits.
1.44  Automatic termination of permits.

          Revocation, Suspension, or Annulment of Basic Permits

1.50  Revocation or suspension.
1.51  Annulment.
1.52  Disposition of stocks of alcoholic beverages upon revocation, 
          annulment, or automatic termination of basic permit.

                              Miscellaneous

1.55  Recalling permits for correction.
1.56  Oaths and affirmations.
1.57  Procedure.
1.58  Filing of permits.
1.59  Public information as to applications acted upon.

       Subpart D--Nonindustrial Use of Distilled Spirits and Wine

                       Uses Regarded as Industrial

1.60  Use of distilled spirits.
1.61  Use of wine.
1.62  Use of distilled spirits or wine for experimental purposes and in 
          manufacture of nonbeverage products.

                      Uses Classed as Nonindustrial

1.70  General.
1.71  Distilled spirits in containers of a capacity of one gallon or 
          less.

         Subpart E--Bulk Sales and Bottling of Distilled Spirits

                         Bulk Sales and Bottling

1.80  Sales of distilled spirits in bulk.
1.81  Importation of distilled spirits in bulk.
1.82  Acquiring or receiving distilled spirits in bulk for 
          redistillation, processing, rectification, warehousing, or 
          warehousing and bottling.
1.83  Acquiring or receiving distilled spirits in bulk for addition to 
          wine.
1.84  Acquisition of distilled spirits in bulk by Government agencies.

                           Warehouse Receipts

1.90  Distilled spirits in bulk.
1.91  Bottled distilled spirits.

              Sales of Distilled Spirits for Industrial Use

1.95  General.

    Authority: 27 U.S.C. 203, 204, 206, 211 unless otherwise noted.

    Source: T.D. ATF-373, 61 FR 26098, May 24, 1996, unless otherwise 
noted.

    Editorial Note: Nomenclature changes to part 1 appear by T.D. ATF-
463, 66 FR 42733, Aug. 15, 2001.

[[Page 6]]



                            Subpart A--Scope



Sec. 1.1  General.

    (a) The regulations in this part relate to requirements governing 
the issuance, amendment, denial, revocation, suspension, automatic 
termination, and annulment of basic permits and the duration of permits, 
except that the provisions of part 71, Rules of Practice in Permit 
Proceedings, of this chapter are hereby made applicable to 
administrative proceedings with respect to the application for, and to 
the suspension, revocation, or annulment of, basic permits under the 
Federal Alcohol Administration Act.
    (b) The regulations in this part also specify what uses of distilled 
spirits and wine are ``nonindustrial,'' as that term is used in section 
117 of the Federal Alcohol Administration Act (27 U.S.C. 211). Finally, 
this part, in accordance with section 106 of the Federal Alcohol 
Administration Act (27 U.S.C. 206), contains the substantive 
requirements relative to bulk sales and bottling of distilled spirits 
under the Federal Alcohol Administration Act, including the terms of 
warehouse receipts for distilled spirits in bulk. No procedural 
requirements are prescribed.



Sec. 1.2  Territorial extent.

    The provisions of this part are applicable to the several States of 
the United States, the District of Columbia and Puerto Rico.



Sec. 1.3  Forms prescribed.

    (a) The appropriate ATF officer is authorized to prescribe all forms 
required by this part. All of the information called for in each form 
shall be furnished as indicated by the headings on the form and the 
instructions on or pertaining to the form. In addition, information 
called for in each form shall be furnished as required by this part. The 
form will be filed in accordance with the instructions for the form.
    (b) Forms may be requested from the ATF Distribution Center, P.O. 
Box 5950, Springfield, Virginia 22153-5190, or by accessing the ATF web 
site (http://www.atf.treas.gov/).

[T.D. ATF-373, 61 FR 26098, May 24, 1996, as amended by T.D. ATF-416, 64 
FR 49985, Sept. 15, 1999]



Sec. 1.4  Delegations of the Director.

    Most of the regulatory authorities of the Director contained in this 
part 1 are delegated to appropriate ATF officers. These ATF officers are 
specified in ATF Order 1130.6, Delegation Order--Delegation of the 
Director's Authorities in Part 1, Basic Permit Requirements Under the 
Federal Alcohol Administration Act, Nonindustrial Use of Distilled 
Spirits and Wine, Bulk Sales and Bottling of Distilled Spirits. ATF 
delegation orders, such as ATF Order 1130.6, are available to any 
interested person by mailing a request to the ATF Distribution Center, 
P.O. Box 5950, Springfield, Virginia 22150-5190, or by accessing the ATF 
web site (http://www.atf.treas.gov/).

[T.D. ATF-416, 64 FR 49985, Sept. 15, 1999]



                         Subpart B--Definitions



Sec. 1.10  Meaning of terms.

    As used in this part, unless the context otherwise requires, terms 
shall have the meaning ascribed in this part.
    Act. The Federal Alcohol Administration Act.
    Alcohol. Ethyl alcohol distilled at or above 190 deg. proof.
    Applicant. Any person who has filed an application for a basic 
permit under the Federal Alcohol Administration Act with the appropriate 
ATF officer.
    Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this part by ATF Order 
1130.6, Delegation Order--Delegation of the Director's Authorities in 27 
CFR Part 1, Basic Permit Requirements Under the Federal Alcohol 
Administration Act, Nonindustrial Use of Distilled Spirits and Wine, 
Bulk Sales and Bottling of Distilled Spirits.
    Basic permit. A document issued under the Act authorizing a person 
to engage in activities at a particular location.

[[Page 7]]

    Brandy. Brandy or wine spirits for addition to wines as permitted by 
internal revenue law.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC.
    Distilled spirits. Section 117(a) of the Federal Alcohol 
Administration Act (27 U.S.C. 211(a)) defines ``distilled spirits'' as 
ethyl alcohol, hydrated oxide of ethyl, spirits of wine, whiskey, rum, 
brandy, gin, and other distilled spirits, including all dilutions and 
mixtures thereof for nonindustrial use.
    In bulk. Distilled spirits in containers having a capacity in excess 
of one wine gallon.
    Other term. Any other term defined in the Federal Alcohol 
Administration Act and used in this part shall have the same meaning 
assigned to it by the Act.
    Permittee. Any person holding a basic permit issued under the 
Federal Alcohol Administration Act.
    Person. Any individual, partnership, joint-stock company, business 
trust, association, corporation, or other form of business enterprise, 
including a receiver, trustee, or liquidating agent.
    Resale at wholesale. A sale to any trade buyer.
    Trade buyer. Any person who is a wholesaler or retailer of distilled 
spirits, wine, or malt beverages.
    Wine. Section 117(a) of the Federal Alcohol Administration Act (27 
U.S.C. 211(a)) defines ``wine'' as:
    (a) Wine as defined in section 610 and section 617 of the Revenue 
Act of 1918 (26 U.S.C. 5381-5392), as now in force or hereafter amended, 
and
    (b) Other alcoholic beverages not so defined, but made in the manner 
of wine, including sparkling and carbonated wine, wine made from 
condensed grape must, wine made from other agricultural products than 
the juice of sound, ripe grapes, imitation wine, compounds sold as wine, 
vermouth, cider, perry, and sake; in each instance, only if containing 
not less than 7 percent and not more than 24 percent of alcohol by 
volume, and if for nonindustrial use.
    Wine gallon. The liquid measure equivalent to the volume of 231 
cubic inches.

[T.D. ATF-373, 61 FR 26098, May 24, 1996. Redesignated and amended by 
T.D. ATF-416, 64 FR 49985, Sept. 15, 1999]



                        Subpart C--Basic Permits

    Editorial Note: Nomenclature changes appear by T.D. ATF-416, 64 FR 
49985, Sept. 15, 1999.

                              When Required



Sec. 1.20  Importers.

    No person, except pursuant to a basic permit issued under the Act, 
shall:
    (a) Engage in the business of importing into the United States 
distilled spirits, wine, or malt beverages; or
    (b) While so engaged, sell, offer or deliver for sale, contract to 
sell, or ship, in interstate or foreign commerce, directly or indirectly 
or through an affiliate, distilled spirits, wine, or malt beverages so 
imported.



Sec. 1.21  Domestic producers, rectifiers, blenders, and warehousemen.

    No person, except pursuant to a basic permit issued under the Act, 
shall:
    (a) Engage in the business of distilling distilled spirits, 
producing wine, rectifying or blending distilled spirits or wine, or 
bottling, or warehousing and bottling, distilled spirits; or
    (b) While so engaged, sell, offer or deliver for sale, contract to 
sell, or ship, in interstate or foreign commerce, directly or indirectly 
or through an affiliate, distilled spirits or wine so distilled, 
produced, rectified, blended, or bottled, or warehoused and bottled.



Sec. 1.22  Wholesalers.

    No person, except pursuant to a basic permit issued under the Act, 
shall:
    (a) Engage in the business of purchasing for resale at wholesale, 
distilled spirits, wine, or malt beverages; or,
    (b) While so engaged, receive, sell, offer or deliver for sale, 
contract to sell, or ship in interstate or foreign commerce, directly or 
indirectly or through an affiliate, distilled spirits, wine, or malt 
beverages so purchased.

[[Page 8]]



Sec. 1.23  State agencies.

    This subpart shall not apply to any agency of a State or political 
subdivision thereof or to any officer or employee of any such agency, 
and no such agency or officer or employee thereof shall be required to 
obtain a basic permit under this subpart.

                    Persons Entitled to Basic Permits



Sec. 1.24  Qualifications of applicants.

    The application of any person shall be granted and the permit issued 
by the appropriate ATF officer if the applicant proves to the 
satisfaction of the appropriate ATF officer that:
    (a) Such person (or in case of a corporation, any of its officers, 
directors, or principal stockholders) has not, within 5 years prior to 
the date of application, been convicted of a felony under Federal or 
State law, and has not, within 3 years prior to date of application, 
been convicted of a misdemeanor under any Federal law relating to 
liquor, including the taxation thereof; and
    (b) Such person, by reason of the person's business experience, 
financial standing or trade connections, is likely to commence 
operations as a distiller, warehouseman and bottler, rectifier, wine 
producer, wine blender, importer, or wholesaler, as the case may be, 
within a reasonable period and to maintain such operations in conformity 
with Federal law; and
    (c) The operations proposed to be conducted by such person are not 
in violation of the law of the State in which they are to be conducted.

                        Applications for Permits



Sec. 1.25  General.

    Applications for basic permits to engage in any of the operations 
set forth in Secs. 1.20 to 1.22 must be made on ATF Form 5100.24, or 
5100.18, verified as required by Sec. 1.56, and will be accompanied by 
such affidavits, documents, and other supporting data, as the 
appropriate ATF officer may require. The application will include all 
data, written statements, affidavits, documents, or other evidence 
submitted in support of the application, or upon a hearing.

[T.D. ATF-416, 64 FR 49985, Sept. 15, 1999; T.D. ATF-416a, 64 FR 54776, 
Oct. 8, 1999]



Sec. 1.26  Incomplete or incorrectly executed applications.

    Incomplete or incorrectly executed applications will not be acted 
upon, but the applicant shall be entitled to file a new application 
without prejudice, or to complete the application already filed.



Sec. 1.27  Change in ownership, management, or control of the applicant.

    In the event of any change in the ownership, management, or control 
of the applicant (in case of a corporation, any change in the officers, 
directors, or persons holding more than 10 percent of the corporate 
stock), after the date of filing of any application for a basic permit 
and prior to final action on such application, the applicant shall 
notify the appropriate ATF officer immediately of such change.



Sec. 1.29  Individual plant or premises.

    An application for a basic permit must be filed, and permit issued, 
to cover each individual plant or premises where any of the businesses 
specified in section 103 of the Act is engaged in.

[T.D. ATF-416, 64 FR 49985, Sept. 15, 1999]



Sec. 1.30  Power of attorney; Form 5000.8 (1534).

    If the application and other documents in support of such 
application are signed by an attorney in fact of an individual, 
partnership, association, or corporation, or by one of the members of a 
copartnership or association, or, in the case of a corporation by an 
officer or other person not authorized by the corporation's bylaws or by 
its board of directors to sign such applications and supporting 
documents, the applications must be supported by a duly authenticated 
copy of the power of attorney conferring authority upon the person 
signing the documents to execute the

[[Page 9]]

same. Such powers of attorney will be executed on Form 5000.8 (1534).

(Approved by the Office of Management and Budget under control number 
1512-0079)

[T.D. ATF-373, 61 FR 26098, May 24, 1996, as amended by T.D. ATF-416, 64 
FR 49985, Sept. 15, 1999].



Sec. 1.31  Denial of permit applications.

    If, upon examination of any application for a basic permit, the 
appropriate ATF officer has reason to believe that the applicant is not 
entitled to such a permit, the appropriate ATF officer shall institute 
proceedings for the denial of the application in accordance with the 
procedure set forth in part 71 of this chapter.

                              Authorization



Sec. 1.35  Authority to issue, amend, deny, suspend, revoke, or annul basic permits.

    The authority and power of issuing, amending, or denying basic 
permits, or amendments thereof, is conferred upon the appropriate ATF 
officer except as to agency initiated curtailment. The Director, upon 
consideration of appeals on petitions for review in part 71 of this 
chapter, may order the appropriate ATF officer to issue, deny, suspend, 
revoke, or annul basic permits.

[T.D. ATF-416, 64 FR 49985, Sept. 15, 1999]

                 Amendment and Duration of Basic Permits



Sec. 1.40  Change of name.

    In the event of any change in the name (trade or corporate name) of 
a permittee, or, in the event a permittee desires to engage in 
operations under an additional trade name, such permittee must file 
application Form 5100.18 for an amended basic permit, which application 
must be approved, and amended permit issued, before operations may be 
commenced under the new name.

(Approved by the Office of Management and Budget under control number 
1512-0090)

[T.D. ATF-373, 61 FR 26098, May 24, 1996, as amended by T.D. ATF- 416, 
64 FR 49985, Sept. 15, 1999]



Sec. 1.41  Change of address.

    In the event of a change in address the permittee must file 
application Form 5100.18 for an amended basic permit.

[T.D. ATF-373, 61 FR 26098, May 24, 1996, as amended by T.D. ATF- 416, 
64 FR 49985, Sept. 15, 1999]



Sec. 1.42  Change in ownership, management, or control of business.

    In the event of any change in the ownership, management, or control 
of any business operated pursuant to a basic permit (if the permittee is 
a corporation, if any change occurs in the officers, directors, or 
persons owning or controlling more than 10 percent of the voting stock 
of said corporation) the permittee shall immediately notify the 
appropriate ATF officer of such change, giving the names and addresses 
of all new persons participating in the ownership, management, or 
control of such business, or in the case of a corporation, the names and 
addresses of such new officers, directors, or persons owning or 
controlling more than 10 percent of the voting stock. Notice to the 
appropriate ATF officer of any such change shall be accompanied or 
supplemented by such data in reference to the personal or business 
history of such persons as the appropriate ATF officer may require.



Sec. 1.43  Duration of permits.

    A basic permit shall continue in effect until suspended, revoked, 
annulled, voluntarily surrendered, or automatically terminated, as 
provided in the Act and in this part.



Sec. 1.44  Automatic termination of permits.

    No basic permit shall be leased, sold, or otherwise voluntarily 
transferred, and, in the event of such lease, sale, or other voluntary 
transfer, such basic permit shall automatically terminate thereupon. If 
any basic permit is transferred by operation of law or if actual or 
legal control of the permittee is acquired, directly or indirectly 
whether by stock ownership or in any other manner, by any person, then 
such permit shall be automatically terminated at the expiration of 30 
days thereafter:

[[Page 10]]

Provided, That if within such 30-day period application for a new basic 
permit is made by the transferee or permittee, respectively, then the 
outstanding basic permit shall continue in effect until such time as the 
application is finally acted upon.

          Revocation, Suspension, or Annulment of Basic Permits



Sec. 1.50  Revocation or suspension.

    Whenever the appropriate ATF officer has reason to believe that any 
permittee has willfully violated any of the conditions of the 
permittee's basic permit or has not engaged in the operations authorized 
by the permit for a period of more than two years, the appropriate ATF 
officer shall institute proceedings for the revocation or suspension of 
such permit, in accordance with the procedure set forth in part 71 of 
this chapter, which part is made applicable to such proceedings.



Sec. 1.51  Annulment.

    Whenever the appropriate ATF officer has reason to believe that any 
basic permit was procured through fraud, or misrepresentation or 
concealment of material fact, the appropriate ATF officer shall 
institute proceedings for the annulment of such permit in accordance 
with the procedure set forth in part 71 of this chapter, which part is 
made applicable to such proceedings.



Sec. 1.52  Disposition of stocks of alcoholic beverages upon revocation, annulment, or automatic termination of basic permit.

    In the event of the revocation or annulment of a basic permit, 
pursuant to part 71 of this chapter, or in the event such permit is 
automatically terminated by operation of law (27 U.S.C. 204(g) and 
Sec. 1.44 of this part), the appropriate ATF officer may authorize the 
orderly disposition of stocks of distilled spirits, wines, or malt 
beverages then held by the permittee or former permittee upon such 
conditions as may be considered proper.

                              Miscellaneous



Sec. 1.55  Recalling permits for correction.

    Whenever it shall be discovered that any basic permit has been 
issued authorizing acts, or combinations of acts, which may not 
properly, under the law and regulations, as of now or hereafter in 
force, be authorized, or that any material mistake has occurred in the 
issuance thereof, the holder of such permit shall forthwith surrender 
the same for correction or amendment upon demand of the appropriate ATF 
officer.



Sec. 1.56  Oaths and affirmations.

    A document must be verified by an oath or affirmation taken before a 
person authorized by the laws of the United States or by State or local 
law to administer oaths or affirmations in the jurisdiction where the 
document is executed when required by:
    (a) Regulation; or
    (b) An appropriate ATF officer.

[T.D. ATF-416, 64 FR 49985, Sept. 15, 1999]



Sec. 1.57  Procedure.

    The procedures prescribed by the rules of practice in permit 
proceedings (part 71 of this chapter) are applicable to administrative 
proceedings for the issuance, amendment, denial, revocation, suspension, 
or annulment of basic permits, the issuance of subpoenas and the taking 
of depositions under the Act.



Sec. 1.58  Filing of permits.

    Every person receiving a basic permit under the provisions of this 
part must file the same, at the place of business covered by the basic 
permit, so that it may be examined by appropriate ATF officers.

[T.D. ATF-373, 61 FR 26098, May 24, 1996, as amended by T.D. ATF-416, 64 
FR 49985, Sept. 15, 1999]



Sec. 1.59  Public information as to applications acted upon.

    The appropriate ATF officer shall cause to be maintained currently 
in the appropriate ATF officer's office for public inspection, until the 
expiration of one year following final action on the application, the 
following information with respect to each application for basic permit 
filed:
    (a) The name, including trade name or names, if any, and the address 
of the applicant; the kind of permit applied

[[Page 11]]

for and the location of the business; whether the applicant is an 
individual, a partnership or a corporation; if a partnership, the name 
and address of each partner; if a corporation, the name and address of 
each of the principal officers and of each stockholder owning 10 percent 
or more of the corporate stock.
    (b) The time and place set for any hearing on the application.
    (c) The final action taken on the application. In the event a 
hearing is held upon an application for a basic permit, the appropriate 
ATF officer shall make available for inspection at the appropriate ATF 
officer's office, upon request therefor: The transcript of the hearing, 
a copy of the administrative law judge's recommended decision, a copy of 
the appropriate ATF officer's decision and, in the event of an appeal to 
the Director, the decision on appeal with the reasons given in support 
thereof.

[T.D. ATF-373, 61 FR 26098, May 24, 1996, as amended by T.D. ATF-416, 64 
FR 49985, Sept. 15, 1999]



       Subpart D--Nonindustrial Use of Distilled Spirits and Wine

                       Uses Regarded as Industrial



Sec. 1.60  Use of distilled spirits.

    The following uses of distilled spirits are regarded as 
``industrial'' and will be excluded from any application of the term 
``nonindustrial use.'' The use of distilled spirits:
    (a) Free of tax by, and for the use of, the United States or any 
governmental agency thereof, any State, any political subdivision of a 
State, or the District of Columbia, for nonbeverage purposes; or
    (b) Free of tax for nonbeverage purposes and not for resale or use 
in the manufacture of any product for sale:
    (1) For the use of any educational organization described in 26 
U.S.C. 170(b)(1)(A)(ii) which is exempt from income tax under 26 U.S.C. 
501(a), or for the use of any scientific university or college of 
learning;
    (2) For any laboratory for use exclusively in scientific research;
    (3) For use at any hospital, blood bank, or sanitarium (including 
use in making analysis or test at such hospital, blood bank, or 
sanitarium), or at any pathological laboratory exclusively engaged in 
making analyses, or tests, for hospitals or sanitariums; or
    (4) For the use of any clinic operated for charity and not for 
profit (including use in compounding of bona fide medicines for 
treatment outside of such clinics of patients thereof); or
    (c) Free of tax, after denaturation of such spirits in the manner 
prescribed by law for:
    (1) Use in the manufacture of ether, chloroform, or other definite 
chemical substance where such distilled spirits are changed into some 
other chemical substance and do not appear in the finished product; or
    (2) Any other use in the arts and industries (except for uses 
prohibited by 26 U.S.C. 5273 (b) or (d)) and for fuel, light, and power.



Sec. 1.61  Use of wine.

    The following uses of wine are regarded as ``industrial'' and will 
be excluded from any application of the term ``nonindustrial''. The use 
of wine:
    (a) Without payment of tax for use in the production of vinegar; or
    (b) Free of tax for experimental or research purposes by any 
scientific university, college of learning, or institution of scientific 
research; or
    (c) Free of tax for use by the United States or any agency thereof, 
and for use for analysis, testing, research, or experimentation by the 
governments of the several States and the District of Columbia or of any 
political subdivision thereof or by any agency of such governments; or
    (d) Which has been rendered unfit for beverage use.



Sec. 1.62  Use of distilled spirits or wine for experimental purposes and in manufacture of nonbeverage products.

    The use of distilled spirits or wine for experimental purposes and 
in the manufacture of (a) medicinal, pharmaceutical, or antiseptic 
products, including prescriptions compounded by retail druggists; (b) 
toilet preparations; (c) flavoring extracts, syrups, or food products; 
or (d) scientific, chemical, mechanical, or industrial products,

[[Page 12]]

provided such products are unfit for beverage use, is regarded as 
``industrial,'' and will be excluded from any application of the term 
``nonindustrial use.''

                      Uses Classed as Nonindustrial



Sec. 1.70  General.

    All uses of distilled spirits and wines, except as provided in 
Secs. 1.60, 1.61, and 1.62 of this part, are regarded as 
``nonindustrial.'' Such ``nonindustrial'' use shall include, but not be 
limited to, distilled spirits or wine used for beverage purposes, or in 
the manufacture, rectification, or blending of alcoholic beverages; or 
in the preparation of food or drink by a hotel, restaurant, tavern, or 
similar establishment; or for sacramental purposes; or as a medicine.



Sec. 1.71  Distilled spirits in containers of a capacity of one gallon or less.

    Distilled spirits in containers of a capacity of one wine gallon or 
less, except anhydrous alcohol and alcohol which may be withdrawn free 
of tax under the internal revenue laws, will be deemed to be for 
nonindustrial use.



         Subpart E--Bulk Sales and Bottling of Distilled Spirits

                         Bulk Sales and Bottling



Sec. 1.80  Sales of distilled spirits in bulk.

    It is unlawful for any person to sell, offer to sell, contract to 
sell, or otherwise dispose of distilled spirits in bulk, for 
nonindustrial use, except for export or to the classes of persons 
enumerated in Secs. 1.82, 1.83, and 1.84.



Sec. 1.81  Importation of distilled spirits in bulk.

    It is unlawful for any person to import distilled spirits in bulk, 
for nonindustrial use, except for sale to or for use by the classes of 
persons enumerated in Secs. 1.82, 1.83 and 1.84.



Sec. 1.82  Acquiring or receiving distilled spirits in bulk for redistillation, processing, rectification, warehousing, or warehousing and bottling.

    (a) Proprietors of distilled spirits plants. Persons holding basic 
permits (issued under subpart B of this part) authorizing the 
distilling, processing, rectifying, or warehousing and bottling of 
distilled spirits, or operating permits (issued under Sec. 19.157 and 
succeeding sections of this chapter) may acquire or receive in bulk and 
redistill, warehouse, or process distilled spirits, so far as permitted 
by law.
    (b) Proprietors of class 8 customs bonded warehouses. If the 
permittee operates a class 8 customs bonded warehouse, the permittee may 
acquire or receive in bulk, and warehouse and bottle, imported distilled 
spirits, so far as permitted by the customs laws.

(26 U.S.C. 7805 (68A Stat. 917, as amended); 27 U.S.C. 205 (49 Stat. 
981, as amended))



Sec. 1.83  Acquiring or receiving distilled spirits in bulk for addition to wine.

    Persons holding permits as producers and blenders of wine, may, 
pursuant to such permit, acquire or receive in bulk alcohol or brandy 
for addition to wines.



Sec. 1.84  Acquisition of distilled spirits in bulk by Government agencies.

    Any agency of the United States, or of any State or political 
subdivision thereof, may acquire or receive in bulk, and warehouse and 
bottle, imported and domestic distilled spirits in conformity with the 
internal revenue laws.

                           Warehouse Receipts



Sec. 1.90  Distilled spirits in bulk.

    By the terms of the Act (27 U.S.C. 206), all warehouse receipts for 
distilled spirits in bulk must require that the warehouseman shall 
package such distilled spirits, before delivery, in bottles labeled and 
marked in accordance with law, or deliver such distilled spirits in bulk 
only to persons to whom it is lawful to sell or otherwise dispose of 
distilled spirits in bulk.



Sec. 1.91  Bottled distilled spirits.

    The provisions of the Act, which forbid any person to sell, offer to 
sell, contract to sell, or otherwise dispose of warehouse receipts for 
distilled spirits in bulk, do not apply to warehouse receipts for 
bottled distilled spirits.

    Cross Reference: For labeling of distilled spirits, see part 5 of 
this chapter.

[[Page 13]]

              Sales of Distilled Spirits for Industrial Use



Sec. 1.95  General.

    Distillers, rectifiers, and other permittees engaged in the sale or 
other disposition of distilled spirits for nonindustrial use shall not 
sell or otherwise dispose of distilled spirits in bulk (other than 
alcohol) for industrial use, unless such distilled spirits are shipped 
or delivered directly to the industrial user thereof.



PART 4--LABELING AND ADVERTISING OF WINE--Table of Contents




                            Subpart A--Scope

Sec.
4.1  General.
4.2  Territorial extent.
4.3  Forms prescribed.
4.4  Delegations of the Director.

                         Subpart B--Definitions

4.10  Meaning of terms.

                Subpart C--Standards of Identity for Wine

4.20  Application of standards.
4.21  The standards of identity.
4.22  Blends, cellar treatment, alteration of class or type.
4.23  Varietal (grape type) labeling.
4.24  Generic, semi-generic, and non-generic designations of geographic 
          significance.
4.25  Appellations of origin.
4.25a  Appellations of origin.
4.26  Estate bottled.
4.27  Vintage wine.
4.28  Type designations of varietal significance.

                Subpart D--Labeling Requirements for Wine

4.30  General.
4.32  Mandatory label information.
4.33  Brand names.
4.34  Class and type.
4.35  Name and address.
4.35a  Name and address.
4.36  Alcoholic content.
4.37  Net contents.
4.38  General requirements.
4.38a   Bottle cartons, booklets and leaflets.
4.39  Prohibited practices.

   Subpart E--Requirements for Withdrawal of Wine From Customs Custody

4.40  Label approval and release.
4.45  Certificates of origin and identity.
4.46  Certificate of nonstandard fill.

  Subpart F--Requirements for Approval of Labels of Wine Domestically 
                            Bottled or Packed

4.50  Certificates of label approval.
4.51  Exhibiting certificates to Government officials.
4.52  Photoprints.

                     Subpart G--Advertising of Wine

4.60  Application.
4.61  Definitions.
4.62  Mandatory statements.
4.63  Legibility of mandatory information.
4.64  Prohibited practices.
4.65  Comparative advertising.

                  Subpart H--Standards of Fill for Wine

4.70  Application.
4.71  Standard wine containers.
4.72  Standards of fill.
4.73  Metric standards of fill.

                      Subpart I--General Provisions

4.80  Exports.

                 Subpart J--American Grape Variety Names

4.91  List of approved prime names.
4.92  Alternative names permitted for temporary use.
4.93  Approval of grape variety names.

    Authority: 27 U.S.C. 205, unless otherwise noted.

    Source: T.D. 6521, 25 FR 13835, Dec. 29, 1960, unless otherwise 
noted.

    Editorial Note: Nomenclature changes to part 4 appear by T.D. ATF-
425, 65 FR 11890, Mar. 7, 2000.
    Cross References: Other regulations relating to this part are as 
follows:

27 CFR Part 1--Basic Permit Requirements Under the Federal Alcohol 
Administration Act.
27 CFR Part 5--Labeling and Advertising of Distilled Spirits.
27 CFR Part 7--Labeling and Advertising of Malt Beverages.
27 CFR Part 9--American Viticultural Areas.
27 CFR Part 12--Foreign Nongeneric Names of Geographic Significance Used 
in the Designation of Wines.
27 CFR Part 16--Alcoholic Beverage Health Warning Statement.
27 CFR Part 26--Liquors and Articles from Puerto Rico and the Virgin 
Islands.
27 CFR Part 71--Rules of Practice in Permit Proceedings.
27 CFR Part 240--Wine.

[[Page 14]]

27 CFR Part 251--Importation of Distilled Spirits, Wines and Beer.
27 CFR Part 252--Exportation of Liquors.



                            Subpart A--Scope



Sec. 4.1  General.

    The regulations in this part relate to the labeling and advertising 
of wine.



Sec. 4.2  Territorial extent.

    This part applies to the several States of the United States, the 
District of Columbia, and Puerto Rico.



Sec. 4.3  Forms prescribed.

    (a) The appropriate ATF officer is authorized to prescribe all forms 
required by this part. All of the information called for in each form 
shall be furnished as indicated by the headings on the form and the 
instructions on or pertaining to the form. In addition, information 
called for in each form shall be furnished as required by this part. The 
form will be filed in accordance with the instructions for the form.
    (b) Forms may be requested from the ATF Distribution Center, PO Box 
5950, Springfield, Virginia 22153-5190, or by accessing the ATF web site 
(http://www.atf.treas.gov/).

[T.D. ATF-92, 46 FR 46911, Sept. 23, 1981, as amended by T.D. ATF-249, 
52 FR 5955, Feb. 27, 1987; T.D. 372, 61 FR 20723, May 8, 1996; T.D. ATF-
425, 65 FR 11890, Mar. 7, 2000]



Sec. 4.4  Delegations of the Director.

    Most of the regulatory authorities of the Director contained in this 
Part 4 are delegated to appropriate ATF officers. These ATF officers are 
specified in ATF Order 1130.2A, Delegation Order--Delegation of the 
Director's Authorities in 27 CFR parts 4, 5 and 7, Labeling and 
Advertising of Wine, Distilled Spirits and Malt Beverages. ATF 
delegation orders, such as ATF Order 1130.2A, are available to any 
interested person by mailing a request to the ATF Distribution Center, 
PO Box 5950, Springfield, Virginia 22150-5190, or by accessing the ATF 
web site (http://www.atf.treas.gov/).

[T.D. ATF-425, 65 FR 11890, Mar. 7, 2000]



                         Subpart B--Definitions



Sec. 4.10  Meaning of terms.

    As used in this part, unless the context otherwise requires, terms 
shall have the meaning ascribed in this part.
    Act. The Federal Alcohol Administration Act.
    Added brandy. Brandy or wine spirits for use in fortification of 
wine as permitted by internal revenue law.
    Advertisement. See Sec. 4.61 for meaning of term as used in subpart 
G of this part.
    Alcohol. Ethyl alcohol distilled at or above 190 deg. proof.
    American. The several States, the District of Columbia, and Puerto 
Rico; ``State'' includes the District of Columbia and Puerto Rico.
    Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this part by ATF Order 
1130.2A, Delegation Order--Delegation of the Director's Authorities in 
27 CFR part 4, 5 and 7, Labeling and Advertising of Wine, Distilled 
Spirits and Malt Beverages.
    Bottler. Any person who places wine in containers of four liters or 
less. (See meaning for ``containers'' and ``packer''.)
    Brand label. The label carrying, in the usual distinctive design, 
the brand name of the wine.
    Container. Any bottle, barrel, cask, or other closed receptacle 
irrespective of size or of the material from which made for use for the 
sale of wine at retail. (See meaning for ``bottler'' and ``packer''.)
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC.
    Gallon. A U.S. gallon of 231 cubic inches of alcoholic beverages at 
60  deg.F.
    Interstate or foreign commerce. Commerce between any State and any 
place outside thereof, or commerce within any Territory or the District 
of Columbia, or between points within the same State but through any 
place outside thereof.
    Liter or litre. (a) A metric unit of capacity equal to 1,000 cubic 
centimeters

[[Page 15]]

and equivalent to 33.814 U.S. fluid ounces. For purposes of this part, a 
liter is subdivided into 1,000 milliliters (ml).
    (b) For purposes of regulation, one liter of wine is defined as that 
quantity (mass) of wine occupying a one-liter volume at 20  deg.Celsius 
(68  deg.F).
    Packer. Any person who places wine in containers in excess of four 
liters. (See meaning for ``container'' and ``bottler''.)
    Percent or percentage. Percent by volume.
    Permittee. Any person holding a basic permit under the Federal 
Alcohol Administration Act.
    Person. Any individual, partnership, joint-stock company, business 
trust, association, corporation, or other form of business enterprise, 
including a receiver, trustee, or liquidating agent, and including an 
officer or employee of any agency of a State or political subdivision 
thereof.
    Pure condensed must. The dehydrated juice or must of sound, ripe 
grapes, or other fruit or agricultual products, concentrated to not more 
than 80 deg. (Balling), the composition thereof remaining unaltered 
except for removal of water.
    Restored pure condensed must. Pure condensed must to which has been 
added an amount of water not exceeding the amount removed in the 
dehydration process.
    Sugar. Pure cane, beet, or dextrose sugar in dry for containing, 
respectively, not less than 95 percent of actual sugar calculated on a 
dry basis.
    Total solids. The degrees Brix of the dealcoholized wine restored to 
its original volume.
    Trade buyer. Any person who is a wholesaler or retailer.
    United States. The several States, the District of Columbia, and 
Puerto Rico; the term ``State'' includes the District of Columbia and 
Puerto Rico.
    Use of other terms. Any other term defined in the Federal Alcohol 
Administration Act and used in this part shall have the same meaning 
assigned to it by the Act.
    Wine. (a) Wine as defined in section 610 and section 617 of the 
Revenue Act of 1918 (26 U.S.C. 3036, 3044, 3045) and (b) other alcoholic 
beverages not so defined, but made in the manner of wine, including 
sparkling and carbonated wine, wine made from condensed grape must, wine 
made from other agricultural products than the juice of sound, ripe 
grapes, initation wine, compounds sold as wine, vermouth, cider, perry, 
and sake; in each instance only if containing not less than 7 percent, 
and not more than 24 percent of alcohol by volume, and if for 
nonindustrial use.

[T.D. ATF-48, 43 FR 13532, Mar. 31, 1978, as amended by T.D. ATF-49, 43 
FR 19848, May 9, 1978; T.D. ATF-53, 43 FR 37675, Aug. 23, 1978; 44 FR 
55838, Sept. 29, 1979; T.D. ATF-66, 45 FR 40544, June 13, 1980; T.D. 
ATF-94, 46 FR 55095, Nov. 6, 1981; T.D. ATF-299, 55 FR 24988, June 19, 
1990; T.D. ATF-425, 65 FR 11891, Mar. 7, 2000]



                Subpart C--Standards of Identity for Wine



Sec. 4.20  Application of standards.

    The standards of identity for the several classes and types of wine 
set forth herein shall be applicable to all regulations and permits 
issued under the act. Whenever any term for which a standard of identity 
has been established herein is used in any such regulation or permit, 
such term shall have the meaning assigned to it by such standard of 
identity.



Sec. 4.21  The standards of identity.

    Standards of identity for the several classes and types of wine set 
forth in this part shall be as follows:
    (a) Class 1; grape wine--(1) Grape wine is wine produced by the 
normal alcoholic fermentation of the juice of sound, ripe grapes 
(including restored or unrestored pure condensed grape must), with or 
without the addition, after fermentation, of pure condensed grape must, 
and with or without added grape brandy or alcohol, but without other 
addition or abstraction except as may occur in cellar treatment: 
Provided, That the product may be ameliorated before, during or after 
fermentation by either of the following methods:
    (i) By adding, separately or in combination, dry sugar, or such an 
amount of sugar and water solution as will not increase the volume of 
the resulting product more than 35 percent; but in no

[[Page 16]]

event shall any product so ameliorated have an alcoholic content derived 
by fermentation, of more than 13 percent by volume, or a natural acid 
content, if water has been added, of less than 5 parts per thousand, or 
a total solids content of more than 22 grams per 100 cubic centimeters.
    (ii) By adding, separately or in combination, not more than 20 
percent by weight of dry sugar, or not more than 10 percent by weight of 
water.
    (iii) In the case of domestic wine, in accordance with 26 U.S.C. 
5383.
    (iv) The maximum volatile acidity, calculated as acetic acid and 
exclusive of sulfur dioxide is 0.14 gram per 100 mL (20  deg.C) for 
natural red wine and 0.12 gram per 100 mL (20  deg.C) for other grape 
wine: Provided, That the maximum volatile acidity for wine produced from 
unameliorated juice of 28 or more degrees Brix is 0.17 gram per 100 
milliliters for red wine and 0.15 gram per 100 milliliters for white 
wine. Grape wine deriving its characteristic color or lack of color from 
the presence or absence of the red coloring matter of the skins, juice, 
or pulp of grapes may be designated as ``red wine,'' ``pink (or rose) 
wine,'' ``amber wine,'' or ``white wine'' as the case may be. Any grape 
wine containing no added grape brandy or alcohol may be further 
designated as ``natural.''
    (2) Table wine is grape wine having an alcoholic content not in 
excess of 14 percent by volume. Such wine may also be designated as 
``light wine,'' ``red table wine,'' ``light white wine,'' ``sweet table 
wine,'' etc., as the case may be.
    (3) Dessert wine is grape wine having an alcoholic content in excess 
of 14 percent but not in excess of 24 percent by volume. Dessert wine 
having the taste, aroma and characteristics generally attributed to 
sherry and an alcoholic content, derived in part from added grape brandy 
or alcohol, of not less than 17 percent by volume, may be designated as 
``sherry''. Dessert wines having the taste, aroma and characteristics 
generally attributed to angelica, madeira, muscatel and port and an 
alcoholic content, derived in part from added grape brandy or alcohol, 
of not less than 18 percent by volume, may be designated as 
``angelica,'' ``madeira,'' ``muscatel,'' or ``port'' respectively. 
Dessert wines having the taste, aroma, and characteristics generally 
attributed to any of the above products and an alcoholic content, 
derived in part from added grape brandy or alcohol, in excess of 14 
percent by volume but, in the case of sherry, less than 17 percent, or, 
in other cases, less than 18 percent by volume, may be designated as 
``light sherry,'' ``light angelica,'' ``light madeira,'' ``light 
muscatel'' or ``light port,'' respectively.
    (b) Class 2; sparkling grape wine. (1) Sparkling grape wine 
(including ``sparkling wine,'' ``sparkling red wine'' and ``sparkling 
white wine'') is grape wine made effervescent with carbon dioxide 
resulting solely from the fermentation of the wine within a closed 
container, tank or bottle.
    (2) Champagne is a type of sparkling light wine which derives its 
effervescence solely from the secondary fermentation of the wine within 
glass containers of not greater than one gallon capacity, and which 
possesses the taste, aroma, and other characteristics attributed to 
champagne as made in the champagne district of France.
    (3)(i) A sparkling light wine having the taste, aroma, and 
characteristics generally attributed to champagne but not otherwise 
conforming to the standard for ``champagne'' may, in addition to but not 
in lieu of the class designation ``sparkling wine,'' be further 
designated as:
    (A) ``Champagne style;'' or
    (B) ``Champagne type;'' or
    (C) ``American (or New York State, Napa Valley, etc.) champagne,'' 
along with one of the following terms: ``Bulk process,'' ``fermented 
outside the bottle,'' ``secondary fermentation outside the bottle,'' 
``secondary fermentation before bottling,'' ``not fermented in the 
bottle,'' or ``not bottle fermented.'' The term ``charmat method'' or 
``charmat process'' may be used as additional information.
    (ii) Labels shall be so designed that all the words in such further 
designation are readily legible under ordinary conditions and are on a 
contrasting background. In the case of paragraph (b)(3)(i)(C) of this 
section, ATF will consider whether the label as a whole provides the 
consumer with adequate

[[Page 17]]

information about the method of production and origin of the wine. ATF 
will evaluate each label for legibility and clarity, based on such 
factors as type size and style for all components of the further 
designation and the optional term ``charmat method'' or ``charmat 
process,'' as well as the contrast between the lettering and its 
background, and the placement of information on the label.
    (iii) Notwithstanding the provisions of paragraphs (b)(3)(i)(A), (B) 
and (C) of this section, the appropriate ATF officer may authorize the 
use of a term on sparkling wine labels, as an alternative to those terms 
authorized in paragraph (b)(3)(i) of this section, but not in lieu of 
the required class designation ``sparkling wine,'' upon a finding that 
such term adequately informs the consumer about the method of production 
of the sparkling wine.
    (4) Crackling wine, petillant wine, frizzante wine (including 
cremant, perlant, reciotto, and other similar wine) is sparkling light 
wine normally less effervescent than champagne or other similar 
sparkling wine, but containing sufficient carbon dioxide in solution to 
produce, upon pouring under normal conditions, after the disappearance 
of air bubbles, a slow and steady effervescence evidenced by the 
formation of gas bubbles flowing through the wine. Crackling wine which 
derives its effervescence from secondary fermentation in containers 
greater than 1-gallon capacity shall be designated ``crackling wine--
bulk process,'' and the words ``bulk process'' shall appear in lettering 
of substantially the same size as the words ``crackling wine.''
    (c) Class 3; carbonated grape wine. ``Carbonated grape wine'' 
(including ``carbonated wine,'' ``carbonated red wine,'' and 
``carbonated white wine'') is grape wine made effervescent with carbon 
dioxide other than that resulting solely from the secondary fermentation 
of the wine within a closed container, tank or bottle.
    (d) Class 4; citrus wine. (1)(i) Citrus wine or citrus fruit wine is 
wine produced by the normal alcoholic fermentation of the juice of 
sound, ripe citrus fruit (including restored or unrestored pure 
condensed citrus must), with or without the addition, after 
fermentation, of pure condensed citrus must, and with or without added 
citrus brandy or alcohol, but without any other addition or abstraction 
except as may occur in cellar treatment: Provided, That a domestic 
product may be ameliorated or sweetened in accordance with the 
provisions of 26 U.S.C. 5384 and any product other than domestic may be 
ameliorated before, during, or after fermentation by adding, separately 
or in combination, dry sugar, or such an amount of sugar and water 
solution as will not increase the volume of the resulting product more 
than 35 percent, or in the case of products produced from citrus fruit 
having a normal acidity of 20 parts or more per thousand, not more than 
60 percent, but in no event shall any product so ameliorated have an 
alcoholic content, derived by fermentation, of more than 14 percent by 
volume, or a natural acid content, if water has been added, of less than 
5 parts per thousand, or a total solids content or more than 22 grams 
per 100 cubic centimeters.
    (ii) The maximum volatile acidity, calculated as acetic acid and 
exclusive of sulfur dioxide, shall not be, for natural citrus wine, more 
than 0.14 gram, and for other citrus wine, more than 0.12 gram, per 100 
milliliters (20  deg.C.).
    (iii) Any citrus wine containing no added brandy or alcohol may be 
further designated as ``natural.''
    (2) Citrus table wine or citrus fruit table wine is citrus wine 
having an alcoholic content not in excess of 14 percent by volume. Such 
wine may also be designated ``light citrus wine,'' ``light citrus fruit 
wine,'' ``light sweet citrus fruit wine,'' etc., as the case may be.
    (3) Citrus dessert wine or citrus fruit dessert wine is citrus wine 
having an alcoholic content in excess of 14 percent but not in excess of 
24 percent by volume.
    (4) Citrus wine derived wholly (except for sugar, water, or added 
alcohol) from one kind of citrus fruit, shall be designated by the word 
``wine'' qualified by the name of such citrus fruit, e.g., ``orange 
wine,'' ``grapefruit wine.'' Citrus wine not derived wholly from one 
kind of citrus fruit shall be designated as ``citrus wine'' or ``citrus 
fruit wine'' qualified by a truthful and adequate statement of 
composition appearing in

[[Page 18]]

direct conjunction therewith. Citrus wine rendered effervescent by 
carbon dioxide resulting solely from the secondary fermentation of the 
wine within a closed container, tank, or bottle shall be further 
designated as ``sparkling''; and citrus wine rendered effervescent by 
carbon dioxide otherwise derived shall be further designated as 
``carbonated.''
    (e) Class 5; fruit wine. (1)(i) Fruit wine is wine (other than grape 
wine or citrus wine) produced by the normal alcoholic fermentation of 
the juice of sound, ripe fruit (including restored or unrestored pure 
condensed fruit must), with or without the addition, after fermentation, 
of pure condensed fruit must, and with or without added fruit brandy or 
alcohol, but without other addition or abstraction except as may occur 
in cellar treatment: Provided, That a domestic product may be 
ameliorated or sweetened in accordance with the provisions of 26 U.S.C. 
5384 and any product other than domestic may be ameliorated before, 
during, or after fermentation by adding, separately or in combination, 
dry sugar, or such an amount of dry sugar and water solution as will 
increase the volume of the resulting product, in the case of wines 
produced from any fruit or berry other than grapes, having a normal 
acidity of 20 parts or more per thousand, not more than 60 percent, and 
in the case of other fruit wines, not more than 35%, but in no event 
shall any product so ameliorated have an alcoholic content, derived by 
fermentation, of more than 14 percent by volume, or a natural acid 
content, if water has been added, of less than 5 parts per thousand, or 
a total solids content of more than 22 grams per 100 cubic centimeters.
    (ii) The maximum volatile acidity, calculated as acetic acid and 
exclusive of sulfur dioxide, shall not be, for natural fruit wine, more 
than 0.14 gram, and for other fruit wine, more than 0.12 gram, per 100 
milliliters (20  deg.C.).
    (iii) Any fruit wine containing no added brandy or alcohol may be 
further designated as ``natural.''
    (2) Berry wine is fruit wine produced from berries.
    (3) Fruit table wine or berry table wine is fruit or berry wine 
having an alcoholic content not in excess of 14 percent by volume. Such 
wine may also be designated ``light fruit wine,'' or ``light berry 
wine.''
    (4) Fruit dessert wine or berry dessert wine is fruit or berry wine 
having an alcoholic content in excess of 14 percent but not in excess of 
24 percent by volume.
    (5) Fruit wine derived wholly (except for sugar, water, or added 
alcohol) from one kind of fruit shall be designated by the word ``wine'' 
qualified by the name of such fruit, e.g., ``peach wine,'' ``blackberry 
wine.'' Fruit wine not derived wholly from one kind of fruit shall be 
designated as ``fruit wine'' or ``berry wine,'' as the case may be, 
qualified by a truthful and adequate statement of composition appearing 
in direct conjunction therewith. Fruit wines which are derived wholly 
(except for sugar, water, or added alcohol) from apples or pears may be 
designated ``cider'' and ``perry,'' respectively, and shall be so 
designated if lacking in vinous taste, aroma, and characteristics. Fruit 
wine rendered effervescent by carbon dioxide resulting solely from the 
secondary fermentation of the wine within a closed container, tank, or 
bottle shall be further designated as ``sparkling''; and fruit wine 
rendered effervescent by carbon dioxide otherwise derived shall be 
further designated as ``carbonated.''
    (f) Class 6; wine from other agricultural products. (1)(i) Wine of 
this class is wine (other than grape wine, citrus wine, or fruit wine) 
made by the normal alcoholic fermentation of sound fermentable 
agricultural products, either fresh or dried, or of the restored or 
unrestored pure condensed must thereof, with the addition before or 
during fermentation of a volume of water not greater than the minimum 
necessary to correct natural moisture deficiencies in such products, 
with or without the addition, after fermentation, of pure condensed 
must, and with or without added alcohol or such other spirits as will 
not alter the character of the product, but without other addition or 
abstraction except as may occur in cellar treatment: Provided, That a 
domestic product may be ameliorated or sweetened in accordance with part 
24, of this chapter, and any product other

[[Page 19]]

than domestic may be ameliorated before, during, or after fermentation 
by adding, separately or in combination, dry sugar or such an amount of 
sugar and water solution as will not increase the volume of the 
resulting product more than 35 percent, but in no event shall any 
product so ameliorated have an alcoholic content, derived by 
fermentation of more than 13 percent by volume, or a natural acid 
content, if water has been added, of less than 5 parts per thousand, or 
a total solids content of more than 22 grams per 100 cubic centimeters.
    (ii) The maximum volatile acidity, calculated as acetic acid and 
exclusive of sulfur dioxide, shall not be, for natural wine of this 
class, more than 0.14 gram, and for other wine of this class, more than 
0.12 gram, per 100 milliliters (20  deg.C.).
    (iii) Wine of this class containing no added alcohol or other 
spirits may be further designated as ``natural''.
    (2) Table wine of this class is wine having an alcoholic content not 
in excess of 14 percent by volume. Such wine may also be designated as 
``light''.
    (3) Dessert wine of this class is wine having an alcoholic content 
in excess of 14 percent but not in excess of 24 percent by volume.
    (4) Raisin wine is wine of this class made from dried grapes.
    (5) Sake is wine of this class produced from rice in accordance with 
the commonly accepted method of manufacture of such product.
    (6) Wine of this class derived wholly (except for sugar, water, or 
added alcohol) from one kind of agricultural product shall except in the 
case of ``sake,'' be designated by the word ``wine'' qualified by the 
name of such agricultural product, e.g., ``honey wine,'' ``raisin 
wine,'' ``dried blackberry wine.'' Wine of this class not derived wholly 
from one kind of agricultural product shall be designated as ``wine'' 
qualified by a truthful and adequate statement of composition appearing 
in direct conjunction therewith. Wine of this class rendered 
effervescent by carbon dioxide resulting solely from the secondary 
fermentation of wine within a closed container, tank, or bottle shall be 
further designated as ``sparkling''; and wine of this class rendered 
effervescent by carbon dioxide otherwise derived shall be further 
designated as ``carbonated.''
    (g) Class 7; aperitif wine. (1) Aperitif wine is wine having an 
alcoholic content of not less than 15 percent by volume, compounded from 
grape wine containing added brandy or alcohol, flavored with herbs and 
other natural aromatic flavoring materials, with or without the addition 
of caramel for coloring purposes, and possessing the taste, aroma, and 
characteristics generally attributed to aperitif wine and shall be so 
designated unless designated as ``vermouth'' under paragraph (g)(2) of 
this section.
    (2) Vermouth is a type of aperitif wine compounded from grape wine, 
having the taste, aroma, and characteristics generally attributed to 
vermouth, and shall be so designated.
    (h) Class 8; imitation and substandard or other than standard wine. 
(1) ``Imitation wine'' shall bear as a part of its designation the word 
``imitation,'' and shall include:
    (i) Any wine containing synthetic materials.
    (ii) Any wine made from a mixture of water with residue remaining 
after thorough pressing of grapes, fruit, or other agricultural 
products.
    (iii) Any class or type of wine the taste, aroma, color, or other 
characteristics of which have been acquired in whole or in part, by 
treatment with methods or materials of any kind (except as permitted in 
Sec. 4.22(c)(6)), if the taste, aroma, color, or other characteristics 
of normal wines of such class or type are acquired without such 
treatment.
    (iv) Any wine made from must concentrated at any time to more than 
80 deg. (Balling).
    (2) ``Substandard wine'' or ``other than standard wine'' shall bear 
as a part of its designation the word ``substandard,'' and shall 
include:
    (i) Any wine having a volatile acidity in excess of the maximum 
prescribed therefor in Secs. 4.20 to 4.25.
    (ii) Any wine for which no maximum volatile acidity is prescribed in 
Secs. 4.20 to 4.25, inclusive, having a volatile acidity, calculated as 
acetic acid and exclusive of sulfur dioxide, in excess of 0.14 gram per 
100 milliliters (20  deg.C.).

[[Page 20]]

    (iii) Any wine for which a standard of identity is prescribed in 
this Secs. 4.20 to 4.25, inclusive, which, through disease, 
decomposition, or otherwise, fails to have the composition, color, and 
clean vinous taste and aroma of normal wines conforming to such 
standard.
    (iv) Any ``grape wine'' ``citrus wine,'' ``fruit wine,'' or ``wine 
from other agricultural products'' to which has been added sugar and 
water solution in an amount which is in excess of the limitations 
prescribed in the standards of identity for these products, unless, in 
the case of ``citrus wine,'' ``fruit wine'' and ``wine from other 
agricultural products'' the normal acidity of the material from which 
such wine is produced is 20 parts or more per thousand and the volume of 
the resulting product has not been increased more than 60 percent by 
such addition.
    (i) Class 9; retsina wine. ``Retsina wine'' is grape table wine 
fermented or flavored with resin.

    Cross Reference: For regulations relating to the use of spirits in 
wine, see part 24 of this chapter.

[T.D. 6521, 25 FR 13835, Dec. 29, 1960, as amended by T.D. 6776, 29 FR 
16985, Dec. 11, 1964; T.D. 7185, 37 FR 7975, Apr. 22, 1972; T.D. ATF-48, 
44 FR 55839, Sept. 28, 1979; T.D. ATF-299, 55 FR 24988, June 19, 1990; 
T.D. ATF-312, 56 FR 31076, July 9, 1991; T.D. ATF-335, 58 FR 5615, Jan. 
22, 1993; T.D. ATF-355, 59 FR 14553, Mar. 29, 1994; T.D. 372, 61 FR 
20723, May 8, 1996; T.D. ATF-398, 63 FR 44782, Aug. 21, 1998; T.D. ATF-
403, 64 FR 50252, Sept. 16, 1999; T.D. ATF-458, 66 FR 37578, July 19, 
2001; T.D. ATF-470, 66 FR 58944, Nov. 26, 2001]



Sec. 4.22  Blends, cellar treatment, alteration of class or type.

    (a) If the class or type of any wine shall be altered, and if the 
product as so altered does not fall within any other class or type 
either specified in Secs. 4.20 through 4.25 or known to the trade, then 
such wine shall, unless otherwise specified in this section, be 
designated with a truthful and adequate statement of composition in 
accordance with Sec. 4.34.
    (b) Alteration of class or type shall be deemed to result from any 
of the following occurring before, during, or after production.
    (1) Treatment of any class or type of wine with substances foreign 
to such wine which remain therein: Provided, That the presence in 
finished wine of not more than 350 parts per million of total sulfur 
dioxide, or sulphites expressed as sulfur dioxide, shall not be 
precluded under this paragraph.
    (2) Treatment of any class or type of wine with substances not 
foreign to such wine but which remain therein in larger quantities than 
are naturally and normally present in other wines of the same class or 
type not so treated.
    (3) Treatment of any class or type of wine with methods or materials 
of any kind to such an extent or in such manner as to affect the basic 
composition of the wine so treated by altering any of its characteristic 
elements.
    (4) Blending of wine of one class with wine of another class or the 
blending of wines of different types within the same class.
    (5) Treatment of any class or type of wine for which a standard of 
identity is prescribed in this article with sugar or water in excess of 
the quantities specifically authorized by such standard: Provided, That 
the class or type thereof shall not be deemed to be altered where such 
wine (other than grape wine) is derived from fruit, or other 
agricultural products, having a high normal acidity, if the total solids 
content is not more than 22 grams per 100 cubic centimeters, and the 
content of natural acid is not less than 7.5 parts per thousand and 
where such wine is derived exclusively from fruit, or other agricultural 
products, the normal acidity of which is 20 parts or more per thousand, 
if the volume of the resulting product has been increased not more than 
60 percent by the addition of sugar and water solution, for the sole 
purpose of correcting natural deficiencies due to such acidity, and 
(except in the case of such wine when produced from fruit or berries 
other than grapes) there is stated as part of the class and type 
designation the phrase ``Made with over 35 percent sugar solution.''
    (c) Nothing in this section shall preclude the treatment of wine of 
any class or type in the manner hereinafter specified, provided such 
treatment does not result in the alteration of the class or type of the 
wine under the provisions of paragraph (b) of this section.

[[Page 21]]

    (1) Treatment with filtering equipment, and with fining or 
sterilizing agents.
    (2) Treatment with pasteurization as necessary to perfect the wines 
to commercial standards in accordance with acceptable cellar practice 
but only in such a manner and to such an extent as not to change the 
basic composition of the wine nor to eliminate any of its characteristic 
elements.
    (3) Treatment with refrigeration as necessary to perfect the wine to 
commercial standards in accordance with acceptable cellar practice but 
only in such a manner and to such an extent as not to change the basic 
composition of the wine nor to eliminate any of its characteristic 
elements.
    (4) Treatment with methods and materials to the minimum extent 
necessary to correct cloudiness, precipitation, or abnormal color, odor, 
or flavor developing in wine.
    (5) Treatment with constituents naturally present in the kind of 
fruit or other agricultural product from which the wine is produced for 
the purpose of correcting deficiencies of these constituents, but only 
to the extent that such constituents would be present in normal wines of 
the same class or type not so treated.
    (6) Treatment of any class or type of wine involving the use of 
volatile fruit-flavor concentrates in the manner provided in section 
5382 of the Internal Revenue Code.
    (7) Notwithstanding the provisions of Sec. 4.21(b) (1), (2) and (4), 
(c), (d)(4), (e)(5), and (f)(6) carbon dioxide may be used to maintain 
counterpressure during the transfer of finished sparkling wines from (i) 
bulk processing tanks to bottles, or (ii) bottle to bottle: Provided, 
That the carbon dioxide content of the wine shall not be increased by 
more than 0.009 gm. per 100 ml. during the transfer operation.

[T.D. 6521, 25 FR 13835, Dec. 29, 1960, as amended by T.D. 6776, 29 FR 
16985, Dec. 11, 1964; T.D. 7185, 37 FR 7976, Apr. 22, 1972; T.D. ATF-
403, 64 FR 50253, Sept. 16, 1999; T.D. ATF-458, 66 FR 37578, July 19, 
2001]



Sec. 4.23  Varietal (grape type) labeling.

    (a) General. The names of one or more grape varieties may be used as 
the type designation of a grape wine only if the wine is also labeled 
with an appellation of origin as defined in Sec. 4.25a.
    (b) One variety. Except as provided in paragraph (c) of this 
section, the name of a single grape variety may be used as the type 
designation if not less than 75 percent of the wine is derived from 
grapes of that variety, the entire 75 percent of which was grown in the 
labeled appellation of origin area.
    (c) Exceptions. (1) Wine made from any Vitis labrusca variety 
(exclusive of hybrids with Vitis labrusca parentage) may be labeled with 
the variety name if:
    (i) Not less than 51 percent of the wine is derived from grapes of 
the named variety;
    (ii) The statement ``contains not less than 51 percent (name of 
variety)'' is shown on the brand label, back label, or a separate strip 
label, (except that this statement need not appear if 75 percent or more 
of the wine is derived from grapes of the named variety); and
    (iii) The entire qualifying percentage of the named variety was 
grown in the labeled appellation of origin area.
    (2) Wine made from any variety of any species found by the 
appropriate ATF officer upon appropriate application to be too strongly 
flavored at 75 percent minimum varietal content may be labeled with the 
varietal name if:
    (i) Not less than 51 percent of the wine is derived from grapes of 
that variety;
    (ii) The statement ``contains not less than 51 percent (name of 
variety)'' is shown on the brand label, back label, or a separate strip 
label (except that this statement need not appear if 75 percent or more 
of the wine is derived from grapes of the named variety); and
    (iii) The entire qualifying percentage of the named variety was 
grown in the labeled appellation of origin area.
    (d) Two or more varieties. The names of two or more grape varieties 
may be used as the type designation if:
    (1) All of the grapes used to make the wine are of the labeled 
varieties;
    (2) The percentage of the wine derived from each variety is shown on 
the label (with a tolerance of plus or minus 2 percent); and
    (3)(i) If labeled with a multicounty appellation of origin, the 
percentage of

[[Page 22]]

the wine derived from each variety from each county is shown on the 
label; or
    (ii) If labeled with a multistate appellation of origin, the 
percentage of the wine derived from each variety from each state is 
shown on the label.
    (e) List of approved variety names. Effective February 7, 1996, the 
name of a grape variety may be used as a type designation for an 
American wine only if that name has been approved by the Director. A 
list of approved grape variety names appears in subpart J of this part.

[T.D. ATF-370, 61 FR 538, Jan. 8, 1996]



Sec. 4.24  Generic, semi-generic, and non-generic designations of geographic significance.

    (a)(1) A name of geographic significance which is also the 
designation of a class or type of wine, shall be deemed to have become 
generic only if so found by the appropriate ATF officer.
    (2) Examples of generic names, originally having geographic 
significance, which are designations for a class or type of wine are: 
Vermouth, Sake.
    (b)(1) A name of geographic significance, which is also the 
designation of a class or type of wine, shall be deemed to have become 
semi-generic only if so found by the appropriate ATF officer. Semi-
generic designations may be used to designate wines of an origin other 
than that indicated by such name only if there appears in direct 
conjunction therewith an appropriate appellation of origin disclosing 
the true place of origin of the wine, and if the wine so designated 
conforms to the standard of identity, if any, for such wine contained in 
the regulations in this part or, if there be no such standard, to the 
trade understanding of such class or type. See Sec. 24.257(c) of this 
chapter for exceptions to the appropriate ATF officer's authority to 
remove names from paragraph (b)(2) of this section.
    (2) Examples of semi-generic names which are also type designations 
for grape wines are Angelica, Burgundy, Claret, Chablis, Champagne, 
Chianti, Malaga, Marsala, Madeira, Moselle, Port, Rhine Wine (syn. 
Hock), Sauterne, Haut Sauterne, Sherry, Tokay.
    (c)(1) A name of geographic significance, which has not been found 
by the appropriate ATF officer to be generic or semi-generic may be used 
only to designate wines of the origin indicated by such name, but such 
name shall not be deemed to be the distinctive designation of a wine 
unless the Director finds that it is known to the consumer and to the 
trade as the designation of a specific wine of a particular place or 
region, distinguishable from all other wines.
    (2) Examples of nongeneric names which are not distinctive 
designations of specific grape wines are: American, California, Lake 
Erie, Napa Valley, New York State, French, Spanish. Additional examples 
of foreign nongeneric names are listed in subpart C of part 12 of this 
chapter.
    (3) Examples of nongeneric names which are also distinctive 
designations of specific grape wines are: Bordeaux Blanc, Bordeaux 
Rouge, Graves, Medoc, Saint-Julien, Chateau Yquem, Chateau Margaux, 
Chateau Lafite, Pommard, Chambertin, Montrachet, Rhone, Liebfraumilch, 
Rudesheimer, Forster, Deidesheimer, Schloss Johannisberger, Lagrima, and 
Lacryma Christi. A list of foreign distinctive designations, as 
determined by the Director, appears in subpart D of part 12 of this 
chapter.

[T.D. 6521, 25 FR 13835, Dec. 29, 1960, as amended by T.D. ATF-296, 55 
FR 17967, Apr. 30, 1990; T.D. ATF-398, 63 FR 44783, Aug. 21, 1998; T.D. 
ATF-425, 65 FR 11890, 11891, Mar. 7, 2000]



Sec. 4.25  Appellations of origin.

    (a) A wine shall be entitled to an appellation of origin if (1) at 
least 75 percent of its volume is derived from fruit or agricultural 
products grown in the place or region indicated by such appellation, (2) 
it has been fully manufactured and finished within the State in which 
such place or region is located, and (3) it conforms to the requirements 
of the laws and regulations of such place or region governing the 
composition, method of manufacture, and designation of wines for home 
consumption.
    (b) Wines subjected to cellar treatment outside the place or region 
of origin under the provisions of Sec. 4.22(c), and blends of wines of 
the same origin blended together outside the place or region of origin 
(if all the wines in the

[[Page 23]]

blend have a common class, type or other designation which is employed 
as the designation of the blend) shall be entitled to the same 
appellation of origin to which they would be entitled if such cellar 
treatment or blending took place within the place or region of origin.
    (c) This section does not apply after December 31, 1982.


[T.D. 6521, 25 FR 13835, Dec. 29, 1960, as amended by T.D. 7185, 37 FR 
7976, Apr. 22, 1972; T.D. ATF-201, 50 FR 12533, Mar. 29, 1985]



Sec. 4.25a  Appellations of origin.

    (a) Definition--(1) American wine. An American appellation of origin 
is: (i) The United States; (ii) a State; (iii) two or no more than three 
States which are all contiguous; (iv) a county (which must be identified 
with the word ``county'', in the same size of type, and in letters as 
conspicuous as the name of the county); (v) two or no more than three 
counties in the same States; or (vi) a viticultural area (as defined in 
paragraph (e) of this section).
    (2) Imported wine. An appellation of origin for imported wine is: 
(i) A country, (ii) a state, province, territory, or similar political 
subdivision of a country equivalent to a state or county; or (iii) a 
viticultural area.
    (b) Qualification--(1) American wine. An American wine is entitled 
to an appellation of origin other than a multicounty or multistate 
appellation, or a viticultural area, if:
    (i) At least 75 percent of the wine is derived from fruit or 
agricultural products grown in the appellation area indicated; (ii) it 
has been fully finished (except for cellar treatment pursuant to 
Sec. 4.22(c), and blending which does not result in an alteration of 
class or type under Sec. 4.22(b)) in the United States, if labeled 
``American''; or, if labeled with a State appellation, within the 
labeled State or an adjacent State; or if labeled with a county 
appellation, within the State in which the labeled county is located; 
and (iii) it conforms to the laws and regulations of the named 
appellation area governing the composition, method of manufacture, and 
designation of wines made in such place.
    (2) Imported wine. An imported wine is entitled to an appellation of 
origin other than a viticultural area if:
    (i) At least 75 percent of the wine is derived from fruit or 
agricultural products grown in the area indicated by the appellation of 
origin; and (ii) The wine conforms to the requirements of the foreign 
laws and regulations governing the composition, method of production, 
and designation of wines available for consumption within the country of 
origin.
    (c) Multicounty appellations. An appellation of origin comprising 
two or no more than three counties in the same State may be used if all 
of the fruit or other agricultural products were grown in the counties 
indicated, and the percentage of the wine derived from fruit or other 
agricultural products grown in each county is shown on the label with a 
tolerance of plus or minus two percent.
    (d) Multistate appellation. An appelation of origin comprising two 
or no more than three States which are all contiguous may be used, if:
    (1) All of the fruit or other agricultural products were grown in 
the States indicated, and the percentage of the wine derived from fruit 
or other agricultural products grown in each State is shown on the label 
with a tolerance of plus or minus two percent;
    (2) it has been fully finished (except for cellar treatment pursuant 
to Sec. 4.22(c), and blending which does not result in an alteration of 
class or type under Sec. 4.22(b)) in one of the labeled appellation 
States; (3) it conforms to the laws and regulations governing the 
composition, method of manufacture, and designation of wines in all the 
States listed in the appellation.
    (e) Viticultural area--(1) Definition--(i) American wine. A 
delimited grape growing region distinguishable by geographical features, 
the boundaries of which have been recognized and defined in part 9 of 
this chapter.
    (ii) Imported wine. A delimited place or region (other than an 
appellation defined in paragraph (a)(2)(i) or (a)(2)(ii)) the boundaries 
of which have been recognized and defined by the country of origin for 
use on labels of wine available for consumption within the country of 
origin.

[[Page 24]]

    (2) Establishment of American viticultural areas. Petitions for 
establishment of American viticultural areas may be made to the Director 
by any interested party, pursuant to the provisions of Sec. 70.701(c) of 
this title. The petition may be in the form of a letter, and should 
contain the following information referred to in Sec. 9.3(b) of this 
title.
    (3) Requirements for use. A wine may be labeled with a viticultural 
area appellation if:
    (i) The appellation has been approved under part 9 of this title or 
by the appropriate foreign government;
    (ii) Not less than 85 percent of the wine is derived from grapes 
grown within the boundaries of the viticultural area;
    (iii) In the case of foreign wine, it conforms to the requirements 
of the foreign laws and regulations governing the composition, method of 
production, and designation of wines available for consumption within 
the country of origin; and
    (iv) In the case of American wine, it has been fully finished within 
the State, or one of the States, within which the labeled viticultural 
area is located (except for cellar treatment pursuant to Sec. 4.22(c), 
and blending which does not result in an alteration of class and type 
under Sec. 4.22(b)).
    (4) Overlap viticultural area appellations. An appellation of origin 
comprised of more than one viticultural area may be used in the case of 
overlapping viticultural areas if not less than 85 percent of the volume 
of the wine is derived from grapes grown in the overlapping area.

[T.D. ATF-53, 43 FR 37675, Aug. 23, 1978, as amended by T.D. ATF-84, 46 
FR 29261, June 1, 1981; T.D. ATF-92, 46 FR 46912, Sept. 23, 1981; T.D. 
ATF-195, 50 FR 763, Jan. 7, 1985; T.D. ATF-201, 50 FR 12533, Mar. 29, 
1985; T.D. ATF-222, 51 FR 3774, Jan. 30 1986; T.D. ATF-312, 56 FR 31076, 
July 9, 1991; T.D. ATF-355, 59 FR 14553, Mar. 29, 1994; T.D. ATF-432, 65 
FR 69253, Nov. 16, 2000]



Sec. 4.26  Estate bottled.

    (a) Conditions for use. The term Estate bottled may be used by a 
bottling winery on a wine label only if the wine is labeled with a 
viticultural area appellation of origin and the bottling winery:
    (1) Is located in the labeled viticultural area; (2) grew all of the 
grapes used to make the wine on land owned or controlled by the winery 
within the boundaries of the labeled viticultural area; (3) crushed the 
grapes, fermented the resulting must, and finished, aged, and bottled 
the wine in a continuous process (the wine at no time having left the 
premises of the bottling winery).
    (b) Special rule for cooperatives. Grapes grown by members of a 
cooperative bottling winery are considered grown by the bottling winery.
    (c) Definition of ``Controlled''. For purposes of this section, 
Controlled by refers to property on which the bottling winery has the 
legal right to perform, and does perform, all of the acts common to 
viticulture under the terms of a lease or similar agreement of at least 
3 years duration.
    (d) Use of other terms. No term other than Estate bottled may be 
used on a label to indicate combined growing and bottling conditions.

[T.D. ATF-53, 43 FR 37676, Aug. 23, 1978, as amended by T.D. ATF-201, 50 
FR 12533, Mar. 29, 1985]



Sec. 4.27  Vintage wine.

    (a) General. Vintage wine is wine labeled with the year of harvest 
of the grapes and made in accordance with the standards prescribed in 
classes 1, 2, or 3 of Sec. 4.21. At least 95 percent of the wine must 
have been derived from grapes harvested in the labeled calendar year, 
and the wine must be labeled with an appellation of origin other than a 
country (which does not qualify for vintage labeling). The appellation 
shall be shown in direct conjunction with the designation required by 
Sec. 4.32(a)(2), in lettering substantially as conspicuous as that 
designation. In no event may the quantity of wine removed from the 
producing winery, under labels bearing a vintage date, exceed the volume 
of vintage wine produced in that winery during the year indicated by the 
vintage date.
    (b) American wine. A permittee who produced and bottled or packed 
the wine, or a person other than the producer who repackaged the wine in 
containers of 5 liters (or 1-gallon before January 1, 1979) or less may 
show the

[[Page 25]]

year of vintage upon the label if the person possesses appropriate 
records from the producer substantiating the year of vintage and the 
appellation of origin; and if the wine is made in compliance with the 
provisions of paragraph (a) of this section.
    (c) Imported wine. Imported wine may bear a vintage date if: (1) It 
is made in compliance with the provisions of paragraph (a) of this 
section; (2) it is bottled in containers of 5 liters (or 1-gallon before 
January 1, 1979) or less prior to importation, or bottled in the United 
States from the original container of the product (showing a vintage 
date); (3) if the invoice is accompanied by, or the American bottler 
possesses, a certificate issued by a duly authorized official of the 
country of origin (if the country of origin authorizes the issuance of 
such certificates) certifying that the wine is of the vintage shown, 
that the laws of the country regulate the appearance of vintage dates 
upon the labels of wine produced for consumption within the country of 
origin, that the wine has been produced in conformity with those laws, 
and that the wine would be entitled to bear the vintage date if it had 
been sold within the country of origin.

[T.D. ATF-53, 43 FR 37676, Aug. 23, 1978, as amended by T.D. ATF-195, 50 
FR 763, Jan. 7, 1985]



Sec. 4.28  Type designations of varietal significance.

    The following are type designations of varietal significance for 
American wine. These names may be used as type designations for American 
wines only if the wine is labeled with an appellation of origin as 
defined in Sec. 4.25a.
    (a) Muscadine. An American wine which derives at least 75 percent of 
its volume from Muscadinia rotundifolia grapes.
    (b) Muscatel. An American wine which derives its predominant taste, 
aroma, characteristics and at least 75 percent of its volume from any 
Muscat grape source, and which meets the requirements of 
Sec. 4.21(a)(3).
    (c) Muscat or Moscato. An American wine which derives at least 75 
percent of its volume from any Muscat grape source.
    (d) Scuppernong. An American wine which derives at least 75 percent 
of its volume from bronze Muscadinia rotundifolia grapes.
    (e)(1) Gamay Beaujolais. An American wine which derives at least 75 
percent of its volume from Pinot noir grapes, Valdiguie grapes, or a 
combination of both.
    (2) For wines bottled on or after January 1, 1999, and prior to 
April 9, 2007, the name ``Gamay Beaujolais'' may be used as a type 
designation only if there appears in direct conjunction therewith, but 
on a separate line and separated by the required appellation of origin, 
the name(s) of the grape variety or varieties used to satisfy the 
requirements of paragraph (e)(1) of this section. Where two varietal 
names are listed, they shall appear on the same line, in order of 
predominance. The appellation of origin shall appear either on a 
separate line between the name ``Gamay Beaujolais'' and the grape 
variety name(s) or on the same line as the grape variety name(s) in a 
manner that qualifies the grape variety name(s). The following statement 
shall also appear on the brand or back label: ``Gamay Beaujolais is made 
from at least 75 percent Pinot noir and/or Valdiguie grapes.''
    (3) The designation ``Gamay Beaujolais'' may not be used on labels 
of American wines bottled on or after April 9, 2007.

[T.D. ATF-370, 61 FR 539, Jan. 8, 1996, as amended by T.D. ATF-388, 62 
FR 16490, Apr. 7, 1997; T.D. ATF-388a, 62 FR 33747, June 23, 1997]



                Subpart D--Labeling Requirements for Wine



Sec. 4.30  General.

    (a) Application. No person engaged in business as a producer, 
rectifier, blender, importer, or wholesaler, directly or indirectly or 
through an affiliate, shall sell or ship or deliver for sale or 
shipment, or otherwise introduce in interstate or foreign commerce, or 
receive therein, or remove from customs custody, any wine in containers 
unless such wine is packaged, and such packages are marked, branded, and 
labeled in conformity with this article. Wine domestically bottled or 
packed prior to

[[Page 26]]

Dec. 15, 1936, and imported wine entered in customs bond in containers 
prior to that date shall be regarded as being packaged, marked, branded 
and labeled in accordance with this article, if the labels on such wine 
(1) bear all the mandatory label information required by Sec. 4.32, even 
though such information is not set forth in the manner and form as 
required by Sec. 4.32 and other sections of this title referred to 
therein, and (2) bear no statements, designs, or devices which are false 
or misleading.
    (b) Alteration of labels. (1) It shall be unlawful for any person to 
alter, mutilate, destroy, obliterate or remove any mark, brand, or label 
upon wine held for sale in interstate or foreign commerce or after 
shipment therein, except as authorized by Federal law, or except as 
provided in paragraph (b)(2) of this section: Provided, That the 
appropriate ATF officer may, upon written application, permit additional 
labeling or relabeling of wine for purposes of compliance with the 
requirements of this part or of State law.
    (2) No application for permission to relabel wine need be made in 
any case where there is added to the container, after removal from 
customs custody or from the premises where bottled or packed, a label 
identifying the wholesale or retail distributor thereof, and containing 
no reference whatever to the characteristics of the product.

[T.D. 6521, 25 FR 13835, Dec. 29, 1960, as amended by T.D. ATF-425, 65 
FR 11891, Mar. 7, 2000]

    Cross Reference: For customs warehouses and control of merchandise 
therein, see 19 CFR part 19.



Sec. 4.32  Mandatory label information.

    (a) There shall be stated on the brand label:
    (1) Brand name, in accordance with Sec. 4.33.
    (2) Class, type, or other designation, in accordance with Sec. 4.34.
    (3) Alcohol content, in accordance with Sec. 4.36.
    (4) On blends consisting of American and foreign wines, if any 
reference is made to the presence of foreign wine, the exact percentage 
by volume.
    (b) There shall be stated on any label affixed to the container:
    (1) Name and address, in accordance with Sec. 4.35.
    (2) Net contents, in accordance with Sec. 4.37. If the net contents 
is a standard of fill other than an authorized metric standard of fill 
as prescribed in Sec. 4.73, the net contents statement shall appear on a 
label affixed to the front of the bottle.
    (c) There shall be stated on the brand label or on a back label a 
statement that the product contains FD&C Yellow No. 5, where that 
coloring material is used in a product bottled on or after October 6, 
1984.
    (d) There shall be stated on a front or back label, separate and 
apart from all other information, the following statement when saccharin 
is present in the finished product: Use of this product may be hazardous 
to your health. This product contains saccharin which has been 
determined to cause cancer in laboratory animals.
    (e) Declaration of sulfites. There shall be stated on a front label, 
back label, strip label or neck label, the statement ``Contains 
sulfites'' or ``Contains (a) sulfiting agent(s)'' or a statement 
identifying the specific sulfiting agent where sulfur dioxide or a 
sulfiting agent is detected at a level of 10 or more parts per million, 
measured as total sulfur dioxide. The provisions of this paragraph shall 
apply to:
    (1) Any certificate of label approval issued on or after January 9, 
1987;
    (2) Any wine bottled on or after July 9, 1987, regardless of the 
date of issuance of the certificate of label approval; and,
    (3) Any wine removed on or after January 9, 1988.

(Paragraph (e) approved by the Office of Management and Budget under 
Control No. 1512-0469)

[T.D. 6521, 25 FR 13835, Dec. 29, 1960, as amended by T.D. ATF-150, 48 
FR 45556, Oct. 6, 1983; T.D. ATF-195, 50 FR 763, Jan. 7, 1985; T.D. ATF-
220, 50 FR 51852, Dec. 20, 1985; T.D. ATF-236, 51 FR 34710, Sept. 30, 
1986; T.D. ATF-282, 54 FR 7162, Feb. 16, 1989; T.D. ATF-312, 56 FR 
31076, 31077, July 9, 1991]



Sec. 4.33  Brand names.

    (a) General. The product shall bear a brand name, except that if not 
sold under a brand name, then the name of the person required to appear 
on the

[[Page 27]]

brand label shall be deemed a brand name for the purpose of this part.
    (b) Misleading brand names. No label shall contain any brand name, 
which, standing alone, or in association with other printed or graphic 
matter creates any impression or inference as to the age, origin, 
identity, or other characteristics of the product unless the appropriate 
ATF officer finds that such brand name, either when qualified by the 
word ``brand'' or when not so qualified, conveys no erroneous 
impressions as to the age, origin, identity, or other characteristics of 
the product.
    (c) Trade name of foreign origin. This section shall not operate to 
prohibit the use by any person of any trade name or brand of foreign 
origin not effectively registered in the United States Patent Office on 
August 29, 1935, which has been used by such person or his predecessors 
in the United States for a period of at least five years immediately 
preceding August 29, 1935: Provided, That if such trade name or brand is 
used, the designation of the product shall be qualified by the name of 
the locality in the United States in which produced, and such 
qualifications shall be in script, type, or printing as conspicuous as 
the trade name or brand.



Sec. 4.34  Class and type.

    (a) The class of the wine shall be stated in conformity with subpart 
C of this part if the wine is defined therein, except that ``table'' 
(``light'') and ``dessert'' wines need not be designated as such. In the 
case of still grape wine there may appear, in lieu of the class 
designation, any varietal (grape type) designation, type designation of 
varietal significance, semigeneric geographic type designation, or 
geographic distinctive designation, to which the wine may be entitled. 
In the case of champagne, or crackling wines, the type designation 
``champagne'' or ``crackling wine'' (``petillant wine'', ``frizzante 
wine'') may appear in lieu of the class designation ``sparkling wine''. 
In the case of wine which has a total solids content of more than 17 
grams per 100 cubic centimeters the words ``extra sweet'', ``specially 
sweetened'', ``specially sweet'' or ``sweetened with excess sugar'' 
shall be stated as a part of the class and type designation. The last of 
these quoted phrases shall appear where required by part 24 of this 
chapter, on wines sweetened with sugar in excess of the maximum 
quantities specified in such regulations. If the class of the wine is 
not defined in subpart C, a truthful and adequate statement of 
composition shall appear upon the brand label of the product in lieu of 
a class designation. In addition to the mandatory designation for the 
wine, there may be stated a distinctive or fanciful name, or a 
designation in accordance with trade understanding. The statement of 
composition will not include any reference to a varietal (grape type) 
designation, type designation of varietal significance, semi-generic 
geographic type designation, or geographic distinctive designation. All 
parts of the designation of the wine, whether mandatory or optional, 
shall be in direct conjunction and in lettering substantially of the 
same size and kind.
    (b) An appellation of origin such as ``American,'' ``New York,'' 
``Napa Valley,'' or ``Chilean,'' disclosing the true place of origin of 
the wine, shall appear in direct conjunction with and in lettering 
substantially as conspicuous as the class and type designation if:
    (1) A varietal (grape type) designation is used under the provisions 
of Sec. 4.23;
    (2) A type designation of varietal significance is used under the 
provisions of Sec. 4.28;
    (3) A semi-generic type designation is employed as the class and 
type designation of the wine pursuant to Sec. 4.24(b);
    (4) A product name is qualified with the word ``Brand'' under the 
requirements of Sec. 4.39 (j); or
    (5) The wine is labeled with the year of harvest of the grapes, and 
otherwise conforms with the provisions of Sec. 4.27. The appellation of 
origin for vintage wine shall be other than a country.

[T.D. ATF-53, 43 FR 37677, Aug. 23, 1978; T.D. ATF-48, 44 FR 55839, 
Sept. 28, 1979, as amended by T.D. ATF-195, 50 FR 763, Jan. 7, 1985; 
T.D. ATF-229, 51 FR 20482, June 5, 1986; T.D. ATF-312, 56 FR 31077, July 
9, 1991; T.D. ATF-370, 61 FR 539, Jan. 8, 1996; T.D. ATF-431, 65 FR 
59724, Oct. 6, 2000]

[[Page 28]]



Sec. 4.35  Name and address.

    (a) American wine. On labels of containers of American wine, there 
shall be stated the name of the bottler or packer and the place where 
bottled or packed (or until January 1, 1985, in lieu of such place, the 
principal place of business of the bottler or packer if in the same 
State where the wine was bottled or packed, and, if bottled or packed on 
bonded premises, the AFT registry number of the premises) immediately 
preceded by the words ``bottled by'' or ``packed by'' except that:
    (1) If the bottler or packer is also the person who made not less 
than 75 percent of such wine by fermenting the must and clarifying the 
resulting wine, or if such person treated the wine in such manner as to 
change the class thereof, there may be stated, in lieu of the words 
``bottled by'' or ``packed by,'' the words ``produced and bottled by,'' 
or ``produced and packed by.''
    (2) If the bottler or packer has also either made or treated the 
wine, otherwise than as described in paragraph (a)(1) of this section, 
there may be stated, in lieu of the words ``Bottled by'' or ``Packed 
by'' the phrases ``Blended and bottled (packed) by,'' ``Rectified and 
bottled (packed) by.'' ``Prepared and bottled (packed) by,'' ``Made and 
bottled (packed) by,'' as the case may be, or, in the case of imitation 
wine only, ``Manufactured and bottled (packed) by.''
    (3) In addition to the name of the bottler or packer and the place 
where bottled or packed (but not in lieu thereof) there may be stated 
the name and address of any other person for whom such wine is bottled 
or packed, immediately preceded by the words ``Bottled for'' or ``Packed 
for'' or ``Distributed by'' or other similar statement; or the name and 
principal place of business of the rectifier, blender, or maker, 
immediately preceded by the words ``Rectified by,'' ``Blended by'' or 
``Made by,'' respectively, or, in the case of imitation wine only, 
``Manufactured by.''
    (b) Imported wine. On labels of containers of imported wine, there 
shall be stated the words ``Imported by'' or a similar appropriate 
phrase, and immediately thereafter the name of the permittee who is the 
importer, agent, sole distributor, or other person responsible for the 
importation, together with the principal place of business in the United 
States of such person. In addition, but not in lieu thereof, there may 
be stated the name and principal place of business of the foreign 
producer, blender, rectifier, maker, bottler, packer, or shipper, 
preceded by the phrases ``Produced by,'' ``Blended by,'' ``Rectified 
by,'' ``Made by,'' ``Bottled by,'' ``Packed by,'' ``Shipped by,'' 
respectively, or, in the case of imitation wine only, ``Manufactured 
by.''
    (1) If the wine is bottled or packed in the United States, there 
shall be stated, in addition, the name of the bottler or packer and the 
place where bottled or packed immediately preceded by the words 
``bottled by'' or ``packed by'' except that if the wine is bottled or 
packed in the United States for the person responsible for the 
importation there may be stated, in lieu of the above-required 
statements, the name and principal place of business in the United 
States of such person, immediately preceded by the phrase ``imported by 
and bottled (packed) in the United States for'' (or a similar 
appropriate phrase). If, however, the wine is bottled or packed in the 
United States by the person responsible for the importation there may be 
stated, in lieu of the above-required statements, the name and principal 
place of business in the United States of such person, immediately 
preceded by the phrase ``Imported and bottled (packed) by'' or a similar 
appropriate phrase.
    (2) If the wine is blended, bottled, or packed in a foreign country 
other than the country of origin and the country of origin is stated or 
otherwise indicated on the label, there shall also be stated the name of 
the bottler, packer, or blender, and the place where bottled, packed, or 
blended, immediately preceded by the words ``Bottled by'', ``Packed 
by'', ``Blended by'', or other appropriate statement.
    (c) Form of address. The ``place'' stated shall be the post office 
address (after December 31, 1984, the post office address shall be the 
address shown on the basic permit or other qualifying document of the 
premises at which the operations took place; and there shall

[[Page 29]]

be shown the address for each operation which is designated on the 
label. An example of such use would be ``Produced at Gilroy, California, 
and bottled at San Mateo, California, by XYZ Winery''), except that the 
street address may be omitted. No additional places or addresses shall 
be stated for the same person unless (1) such person is actively engaged 
in the conduct of an additional bona fide and actual alcoholic beverage 
business at such additional place or address, and (2) the label also 
contains in direct conjunction therewith, appropriate descriptive 
material indicating the function occurring at such additional place or 
address in connection with the particular product.
    (d) Trade or operating names. The trade or operating name of any 
person appearing upon any label shall be identical with a name appearing 
on the basic permit or notice.
    (e) This section does not apply after July 27, 1994.

[T.D. 6521, 25 FR 13835, Dec. 29, 1960, as amended by T.D. 7185, 37 FR 
7976, Apr. 22, 1972; T.D. ATF-53, 43 FR 37677, Aug. 23, 1978; T.D. ATF-
126, 48 FR 2764, Jan. 21, 1983; T.D. ATF-194, 50 FR 759, Jan. 7, 1985; 
T.D. ATF-209, 50 FR 27821, July 8, 1985T.D. ATF-328, 57 FR 33114, July 
27, 1992]



Sec. 4.35a  Name and address.

    (a) American wine--(1) Mandatory statement. A label on each 
container of American wine shall state either ``bottled by'' or ``packed 
by'' followed by the name of the bottler or packer and the address (in 
accordance with paragraph (c)) of the place where the wine was bottled 
or packed. Other words may also be stated in addition to the required 
words ``bottled by'' or ``packed by'' and the required name and address 
if the use of such words is in accordance with paragraph (a)(2) of this 
section.
    (2) Optional statements. (i) In addition to the statement required 
by paragraph (a)(1), the label may also state the name and address of 
any other person for whom the wine was bottled or packed, immediately 
preceded by the words ``bottled for'' or ``packed for'' or ``distributed 
by.''
    (ii) The words defined in paragraphs (a)(2)(iii)-(a)(2)(vi) may be 
used, in accordance with the definitions given, in addition to the name 
and address statement required by paragraph (a)(1). Use of these words 
may be conjoined, using the word ``and'', and with the words ``bottled 
by'' or ``packed by'' only if the same person performed the defined 
operation at the same address. More than one name is necessary if the 
defined operation was performed by a person other than the bottler or 
packer and more than one address statement is necessary if the defined 
operation was performed at a different address.
    (iii) Produced or Made means that the named winery:
    (A) Fermented not less than 75% of such wine at the stated address, 
or
    (B) Changed the class or type of the wine by addition of alcohol, 
brandy, flavors, colors, or artificial carbonation at the stated 
address, or
    (C) Produced sparkling wine by secondary fermentation at the stated 
address.
    (iv) Blended means that the named winery mixed the wine with other 
wines of the same class and type at the stated address.
    (v) Cellared, Vinted or Prepared means that the named winery, at the 
stated address, subjected the wine to cellar treatment in accordance 
with Sec. 4.22(c).
    (b) Imported wine--(1) Mandatory statements. (i) A label on each 
container of imported wine shall state ``imported by'' or a similar 
appropriate phrase, followed immediately by the name of the importer, 
agent, sole distributor, or other person responsible for the 
importation, followed immediately by the address of the principal place 
of business in the United States of the named person.
    (ii) If the wine was bottled or packed in the United States, the 
label shall also state one of the following:
    (A) ``Bottled by'' or ``packed by'' followed by the name of the 
bottler or packer and the address (in accordance with paragraph (c)) of 
the place where the wine was bottled or packed; or
    (B) If the wine was bottled or packed for the person responsible for 
the importation, the words ``imported by and bottled (packed) in the 
United States for'' (or a similar appropriate phrase) followed by the 
name and address of the principal place of business in the

[[Page 30]]

United States of the person responsible for the importation; or
    (C) If the wine was bottled or packed by the person responsible for 
the importation, the words ``imported and bottled (packed) by'' followed 
by the name and address of the principal place of business in the United 
States of the person responsible for the importation.
    (iii) If the wine was blended, bottled or packed in a foreign 
country other than the country of origin, and the label identifies the 
country of origin, the label shall state ``blended by,'' ``bottled by,'' 
or ``packed by,'' or other appropriate statement, followed by the name 
of the blender, bottler or packer and the place where the wine was 
blended, bottled or packed.
    (2) Optional statements. In addition to the statements required by 
paragraph (b) (1), the label may also state the name and address of the 
principal place of business of the foreign producer. Other words, or 
their English-language equivalents, denoting winemaking operations may 
be used in accordance with the requirements of the country of origin, 
for wines sold within the country of origin.
    (c) Form of address. The ``place'' stated shall be the post office 
address shown on the basic permit or other qualifying document of the 
premises at which the operations took place; and there shall be shown 
the address for each operation which is designated on the label. An 
example of such use would be ``Produced at Gilroy, California, and 
bottled at San Mateo, California, by XYZ Winery,'' except that the 
street address may be omitted. No additional places or addresses shall 
be stated for the same person unless:
    (1) Such person is actively engaged in the conduct of an additional 
bona fide and actual alcoholic beverage business at such additional 
place or address, and
    (2) The label also contains in direct conjunction therewith, 
appropriate descriptive material indicating the function occurring at 
such additional place or address in connection with the particular 
product.
    (d) Trade or operating names. The trade or operating name of any 
person appearing upon any label shall be identical with a name appearing 
on the basic permit or other qualifying document.
    (e) The provisions of this section are optional until they become 
mandatory July 27, 1994.

[T.D. ATF-328, 57 FR 33114, July 27, 1992; 57 FR 37591, Aug. 19, 1992]



Sec. 4.36  Alcoholic content.

    (a) Alcoholic content shall be stated in the case of wines 
containing more than 14 percent of alcohol by volume, and, in the case 
of wine containing 14 percent or less of alcohol by volume, either the 
type designation ``table'' wine (``light'' wine) or the alcoholic 
content shall be stated. Any statement of alcoholic content shall be 
made as prescribed in paragraph (b) of this section.
    (b) Alcoholic content shall be stated in terms of percentage of 
alcohol by volume, and not otherwise, as provided in either paragraph 
(b)(1) or (2) of this section:
    (1) ``Alcohol ---- % by volume,'' or similar appropriate phrase; 
Provided, that if the word ``alcohol'' and/or ``volume'' are 
abbreviated, they shall be shown as ``alc.'' (alc) and/or ``vol.'' 
(vol), respectively. Except as provided in paragraph (c) of this 
section, a tolerance of 1 percent, in the case of wines containing more 
than 14 percent of alcohol by volume, and of 1.5 percent, in the case of 
wines containing 14 percent or less of alcohol by volume, will be 
permitted either above or below the stated percentage.
    (2) ``Alcohol ---- % to ---- % by volume,'' or similar appropriate 
phrase; Provided, that if the word ``alcohol'' and/or ``volume'' are 
abbreviated, they shall be shown as ``alc.'' (alc) and/or ``vol.'' 
(vol), respectively. Except as provided in paragraph (c) of this 
section, a range of not more than 2 percent, in the case of wines 
containing more than 14 percent of alcohol by volume, and of not more 
than 3 percent, in the case of wines containing 14 percent or less of 
alcohol by volume, will be permitted between the minimum and maximum 
percentages stated, and no tolerances will be permitted either below 
such minimum or above such maximum.
    (c) Regardless of the type of statement used and regardless of 
tolerances

[[Page 31]]

normally permitted in direct statements and ranges normally permitted in 
maximum and minimum statements, alcoholic content statements, whether 
required or optional, shall definitely and correctly indicate the class, 
type and taxable grade of the wine so labeled and nothing in this 
section shall be construed as authorizing the appearance upon the labels 
of any wine of an alcoholic content statement in terms of maximum and 
minimum percentages which overlaps a prescribed limitation on the 
alcoholic content of any class, type, or taxable grade of wine, or a 
direct statement of alcoholic content which indicates that the alcoholic 
content of the wine is within such a limitation when in fact it is not.

[T.D. 6521, 25 FR 13835, Dec. 29, 1960, as amended by T.D. ATF-275, 53 
FR 27046, July 18, 1988]



Sec. 4.37  Net contents.

    (a) Statement of net contents. The net contents of wine for which a 
standard of fill is prescribed in Sec. 4.73 shall be stated in the same 
manner and form as set forth in the standard of fill. The net content of 
wine for which no standard of fill is prescribed in Sec. 4.73 shall be 
stated in the metric system of measure as follows:
    (1) If more than one liter, net contents shall be stated in liters 
and in decimal portions of a liter accurate to the nearest one-hundredth 
of a liter.
    (2) If less than one liter, net contents shall be stated in 
milliliters (ml).
    (b) Statement of U.S. equivalent net contents. When net contents of 
wine are stated in metric measure, the equivalent volume in U.S. measure 
may also be shown. If shown, the U.S. equivalent volume will be shown as 
follows:
    (1) For the metric standards of fill: 3 liters (101 fl. oz.); 1.5 
liters (50.7 fl. oz.); 1 liter (33.8 fl. oz.); 750 ml (25.4 fl. oz.); 
500 ml (16.9 fl. oz.); 375 ml (12.7 fl. oz.); 187 ml (6.3 fl. oz.); 100 
ml (3.4 fl. oz.); and 50 ml (1.7 fl. oz.).
    (2) Equivalent volumes of less than 100 fluid ounces will be stated 
in fluid ounces only, accurate to the nearest one-tenth of a fluid 
ounce; for example, 700 ml (23.7 fl. oz.).
    (3) Equivalent volumes of 100 fluid ounces or more will be stated in 
fluid ounces only, accurate to the nearest whole fluid ounce; for 
example, 6 liters (203 fl. oz.).
    (c) Net contents marked in bottle. The net contents need not be 
stated on any label if the net contents are displayed by having the same 
blown, etched, sand-blasted, marked by underglaze coloring, or otherwise 
permanently marked by any method approved by the appropriate ATF 
officer, in the sides, front, or back of the bottle, in letters and 
figures in such manner as to be plainly legible under ordinary 
circumstances, and such statement is not obscured in any manner in whole 
or in part.
    (d) Tolerances. Statement of net contents shall indicate exactly the 
volume of wine within the container, except that the following 
tolerances shall be allowed:
    (1) Discrepancies due exclusively to errors in measuring which occur 
in filling conducted in compliance with good commercial practice.
    (2) Discrepancies due exclusively to differences in the capacity of 
containers, resulting solely from unavoidable difficulties in 
manufacturing such containers so as to be of uniform capacity: Provided, 
That no greater tolerance shall be allowed in case of containers which, 
because of their design, cannot be made of approximately uniform 
capacity than is allowed in case of containers which can be manufactured 
so as to be of approximately uniform capacity.
    (3) Discrepancies in measure due to differences in atmospheric 
conditions in various places and which unavoidably result from the 
ordinary and customary exposure of alcoholic beverages in containers to 
evaporation. The reasonableness to discrepancies under this paragraph 
shall be determined on the facts in each case.
    (e) Unreasonable shortages. Unreasonable shortages in certain of the 
containers in any shipment shall not be compensated by overages in other 
containers in the same shipment.

[T.D. ATF-12, 39 FR 45222, Dec. 31, 1974, as amended by T.D. ATF-49, 43 
FR 19848, May 9, 1978; T.D. ATF-76, 46 FR 1727, Jan. 7, 1981; T.D. ATF-
303, 55 FR 42713, Oct. 23, 1990]

[[Page 32]]



Sec. 4.38  General requirements.

    (a) Legibility. All labels shall be so designed that all the 
statements thereon required by Secs. 4.30 through 4.39 are readily 
legible under ordinary conditions, and all such statement shall be on a 
contrasting background.
    (b) Size of type. (1) Containers of more than 187 milliliters. All 
mandatory information required on labels by this part, except the 
alcoholic content statement, shall be in script, type, or printing not 
smaller than 2 millimeters; except that if contained among other 
descriptive or explanatory information, the script, type, or printing of 
the mandatory information shall be of a size substantially more 
conspicuous than that of the descriptive or explanatory information.
    (2) Containers of 187 milliliters or less. All mandatory information 
required on labels by this part, except the alcoholic content statement, 
shall not be smaller than 1 millimeter, except that if contained among 
other descriptive or explanatory information, the script, type, or 
printing of the mandatory information shall be of a size substantially 
more conspicuous than that of the descriptive or explanatory 
information.
    (3) Alcoholic content statements shall not appear in script, type, 
or printing larger or more conspicuous than 3 millimeters nor smaller 
than 1 millimeter on labels of containers having a capacity of 5 liters 
or less and shall not be set off with a border or otherwise accentuated.
    (c) English language. All mandatory label information shall be 
stated on labels in the English language, except that the brand name, 
the place of production, and the name of the manufacturer, producer, 
blender, bottler, packer, or shipper appearing on the label need not be 
in the English language if the words ``product of'' immediately precede 
the name of the country of origin stated in accordance with customs 
requirements. Additional statements in foreign languages may be made on 
labels, if they do not in any way conflict with, or contradict the 
requirements of Secs. 4.30 through 4.39.
    (d) Location of label. Labels shall not obscure Government stamps 
nor be obscured thereby.
    (e) Labels firmly affixed. All labels shall be affixed to containers 
of wine in such manner that they cannot be removed without thorough 
application of water or other solvents.
    (f) Additional information on labels. Labels may contain information 
other than the mandatory label information required by Secs. 4.30 
through 4.39, if such information complies with the requirements of such 
sections and does not conflict with, nor in any manner qualify 
statements required by this part. In addition, information which is 
truthful, accurate, and specific, and which is neither disparaging nor 
misleading may appear on wine labels.
    (g) Representations as to materials. If any representation (other 
than representations or information required by Secs. 4.30 through 4.39 
or percentage statements required or permitted by this part) is made as 
to the presence, excellence, or other characteristic of any ingredient 
in any wine, or used in its production, the label containing such 
representation shall state, in print, type, or script, substantially as 
conspicuous as such representation, the name and amount in percent by 
volume of each such ingredient.
    (h) Statement of contents of containers. Upon request of the 
appropriate ATF officer, there shall be submitted a full and accurate 
statement of the contents of the containers to which labels are to be or 
have been affixed.

[T.D. ATF-53, 43 FR 37677, Aug. 23, 1978, as amended by T.D. ATF-66, 45 
FR 40544, June 13, 1980; T.D. ATF-94, 46 FR 55095, Nov. 6, 1981; T.D. 
ATF-249, 52 FR 5955, Feb. 27, 1987; T.D. ATF-275, 53 FR 27046, July 18, 
1988; T.D. ATF-312, 56 FR 31077, July 9, 1991]



Sec. 4.38a  Bottle cartons, booklets and leaflets.

    (a) General. An individual covering, carton, or other container of 
the bottle used for sale at retail (other than a shipping container), or 
any written, printed, graphic, or other matter accompanying the bottle 
to the consumer buyer shall not contain any statement, design, device, 
or graphic, pictorial, or emblematic representation that is prohibited 
by Secs. 4.30 through 4.39 on labels.
    (b) Sealed cartons. If bottles are enclosed in sealed opaque 
coverings, cartons, or other containers used for sale

[[Page 33]]

at retail (other than a shipping container), such coverings, cartons, or 
other containers must bear all mandatory label information.
    (c) Other cartons. (1) If an individual covering, carton, or other 
container of the bottle used for sale at retail (other than a shipping 
container) is so designed that the bottle is readily removable, it may 
display any information which is not in conflict with the label on the 
bottle contained therein.
    (2) Cartons displaying brand names and/or designations must display 
such names and designations in their entirety--brand names required to 
be modified, e.g. by ``Brand'' or ``Product of U.S.A.'', must also 
display such modification.
    (3) Wines for which a truthful and adequate statement of composition 
is required must display such statement.

[T.D. ATF-36, 41 FR 47425, Oct. 29, 1976]



Sec. 4.39  Prohibited practices.

    (a) Statements on labels. Containers of wine, or any label on such 
containers, or any individual covering, carton, or other wrapper of such 
container, or any written, printed, graphic, or other matter 
accompanying such container to the consumer shall not contain:
    (1) Any statement that is false or untrue in any particular, or 
that, irrespective of falsity, directly, or by ambiguity, omission, or 
inference, or by the addition of irrelevant, scientific or technical 
matter, tends to create a misleading impression.
    (2) Any statement that is disparaging of a competitor's products.
    (3) Any statement, design, device, or representation which is 
obscene or indecent.
    (4) Any statement, design, device, or representation of or relating 
to analyses, standards, or tests, irrespective of falsity, which the 
appropriate ATF officer finds to be likely to mislead the consumer.
    (5) Any statement, design, device or representation of or relating 
to any guarantee, irrespective of falsity, which the appropriate ATF 
officer finds to be likely to mislead the consumer. Money-back 
guarantees are not prohibited.
    (6) A trade or brand name that is the name of any living individual 
of public prominence, or existing private or public organization, or is 
a name that is in simulation or is an abbreviation thereof, or any 
graphic, pictorial, or emblematic representation of any such individual 
or organization, if the use of such name or representation is likely 
falsely to lead the consumer to believe that the product has been 
endorsed, made, or used by, or produced for, or under the supervision 
of, or in accordance with the specifications of, such individual or 
organization; Provided, That this paragraph shall not apply to the use 
of the name of any person engaged in business as a producer, blender, 
rectifier, importer, wholesaler, retailer, bottler, or warehouseman of 
wine, nor to the use by any person of a trade or brand name that is the 
name of any living individual of public prominence or existing private 
or public organization, provided such trade or brand name was used by 
him or his predecessors in interest prior to August 29, 1935.
    (7) Any statement, design, device, or representation (other than a 
statement of alcohol content in conformity with Sec. 4.36), which tends 
to create the impression that a wine:
    (i) Contains distilled spirits;
    (ii) Is comparable to a distilled spirit; or
    (iii) Has intoxicating qualities.

However, if a statement of composition is required to appear as the 
designation of a product not defined in these regulations, such 
statement of composition may include a reference to the type of 
distilled spirits contained therein.
    (8) Any coined word or name in the brand name or class and type 
designation which simulates, imitates, or which tends to create the 
impression that the wine so labeled is entitled to bear, any class, 
type, or permitted designation recognized by the regulations in this 
part unless such wine conforms to the requirements prescribed with 
respect to such designation and is in fact so designated on its labels.
    (9) Any word in the brand name or class and type designation which 
is the name of a distilled spirits product or which simulates, imitates, 
or created the impression that the wine so labeled is, or is similar to, 
any product customarily made with a distilled spirits

[[Page 34]]

base. Examples of such words are: ``Manhattan,'' ``Martini,'' and 
``Daquiri'' in a class and type designation or brand name of a wine 
cocktail; ``Cuba Libre,'' ``Zombie,'' and ``Collins'' in a class and 
type designation or brand name of a wine specialty or wine highball; 
``creme,'' ``cream,'' ``de,'' or ``of'' when used in conjunction with 
``menthe,'' ``mint,'' or ``cacao'' in a class and type designation or a 
brand name of a mint or chocolate flavored wine specialty.
    (b) Statement of age. No statement of age or representation relative 
to age (including words or devices in any brand name or mark) shall be 
made, except (1) for vintage wine, in accordance with the provisions of 
Sec. 4.27; (2) references relating to methods of wine production 
involving storage or aging in accordance with Sec. 4.38(f); or (3) use 
of the word ``old'' as part of a brand name.
    (c) Statement of bottling dates. The statement of any bottling date 
shall not be deemed to be a representation relative to age, if such 
statement appears in lettering not greater than 8-point Gothic caps and 
in the following form: ``Bottled in ----'' (inserting the year in which 
the wine was bottled).
    (d) Statement of miscellaneous dates. No date, except as provided in 
paragraphs (b) and (c) of this section with respect to statement of 
vintage year and bottling date, shall be stated on any label unless in 
addition thereto and in direct conjunction therewith in the same size 
and kind of printing, there shall be stated an explanation of the 
significance thereof such as ``established'' or ``founded in''. If any 
such date refers to the date of establishment of any business or brand 
name, it shall not be stated, in the case of containers of a capacity of 
5 liters or less, in any script, type, or printing larger than 2 
millimeters, and shall be stated in direct conjunction with the name of 
the person, company, or brand name to which it refers if the appropriate 
ATF officer finds that this is necessary in order to prevent confusion 
as to the person, company, or brand name to which the establishment date 
is applicable.
    (e) Simulation of Government stamps. (1) No labels shall be of such 
design as to resemble or simulate a stamp of the United States 
Government or any State or foreign government. No label, other than 
stamps authorized or required by the United States Government or any 
State or foreign government, shall state or indicate that the wine 
contained in the labeled container is produced, blended, bottled, 
packed, or sold under, or in accordance with, any municipal, State or 
Federal Government authorization, law, or regulation, unless such 
statement is required or specifically authorized by Federal, State or 
municipal law or regulation, or is required or specifically authorized 
by the laws or regulations of a foreign country. If the municipal, 
State, or Federal Government permit number is stated upon a label, it 
shall not be accompanied by any additional statement relating thereto.
    (2) Bonded wine cellar and bonded winery numbers may be stated but 
only in direct conjunction with the name and address of the person 
operating such wine cellar or winery. Statement of bonded wine cellar or 
winery numbers may be made in the following form: ``Bonded Wine Cellar 
No. ----'', ``Bonded Winery No. ----'', ``B. W. C. No. ----'', ``B. W. 
No. ----''. No additional reference thereto shall be made, nor shall any 
use be made of such statement that may convey the impression that the 
wine has been made or matured under Government supervision or in 
accordance with Government specifications or standards.
    (3) If imported wines are covered by a certificate of origin and/or 
a certificate of vintage date issued by a duly authorized official of 
the appropriate foreign government, the label, except where prohibited 
by the foreign government, may refer to such certificate or the fact of 
such certification, but shall not be accompanied by any additional 
statements relating thereto. The reference to such certificate or 
certification shall be substantially in the following form:

    This product accompanied at the time of the importation by a 
certificate issued by the
________________________________________________________________________

                          (Name of government)

    government indicating that the product is

[[Page 35]]

________________________________________________________________________

                 (Class and type as stated on the label)

    and (if label bears a statement of vintage date) that the wine is of 
the vintage of
________________________________________________________________________

                  (Year of vintage stated on the label)

    (f) Use of the word ``Importer'', or similar words. The word 
Importer, or similar words, shall not be stated on labels on containers 
of domestic wine except as part of the bona fide name of a permittee for 
or by whom, or of a retailer for whom, such wine is bottled, packed or 
distributed: Provided, That in all cases where such words are used as 
part of such name, there shall be stated on the same label the words 
``Product of the United States'', or similar words to negative any 
impression that the product is imported, and such negative statement 
shall appear in the same size and kind of printing as such name.
    (g) Flags, seals, coats of arms, crests, and other insignia. Labels 
shall not contain, in the brand name or otherwise, any statement, 
design, device, or pictorial representation which the appropriate ATF 
officer finds relates to, or is capable of being construed as relating 
to, the armed forces of the United States, or the American flag, or any 
emblem, seal, insignia, or decoration associated with such flag or armed 
forces; nor shall any label contain any statement, design, device, or 
pictorial representation of or concerning any flag, seal, coat of arms, 
crest or other insignia, likely to mislead the consumer to believe that 
the product has been endorsed, made, or used by, or produced for, or 
under the supervision of, or in accordance with the specifications of 
the government, organization, family, or individual with whom such flag, 
seal, coat of arms, crest, or insignia is associated.
    (h) Curative and therapeutic claims. Labels shall not contain any 
statement, design, representation, pictorial representation, or device 
representing that the use of wine has curative or therapeutic effects if 
such statement is untrue in any particular or tends to create a 
misleading impression.
    (i) Geographic brand names. (1) Except as provided in subparagraph 
2, a brand name of viticultural significance may not be used unless the 
wine meets the appellation of origin requirements for the geographic 
area named.
    (2) For brand names used in existing certificates of label approval 
issued prior to July 7, 1986:
    (i) The wine shall meet the appellation of origin requirements for 
the geographic area named; or
    (ii) The wine shall be labeled with an appellation of origin in 
accordance with Sec. 4.34(b) as to location and size of type of either:
    (A) A county or a viticultural area, if the brand name bears the 
name of a geographic area smaller than a state, or;
    (B) A state, county or a viticultural area, if the brand name bears 
a state name; or
    (iii) The wine shall be labeled with some other statement which the 
appropriate ATF officer finds to be sufficient to dispel the impression 
that the geographic area suggested by the brand name is indicative of 
the origin of the wine.
    (3) A name has viticultural significance when it is the name of a 
state or county (or the foreign equivalents), when approved as a 
viticultural area in part 9 of this chapter, or by a foreign government, 
or when found to have viticultural significance by the appropriate ATF 
officer.
    (j) Product names of geographical significance (not mandatory before 
January 1, 1983). The use of product names with specific geographical 
significance is prohibited unless the appropriate ATF officer finds that 
because of their long usage, such names are recognized by consumers as 
fanciful product names and not representations as to origin. In such 
cases the product names shall be qualified with the word ``brand'' 
immediately following the product name, in the same size of type, and as 
conspicuous as the product name itself. In addition, the label shall 
bear an appellation of origin under the provisions of Sec. 4.34(b), and, 
if required by the appropriate ATF officer, a statement disclaiming the 
geographical reference as a representation as to the origin of the wine.
    (k) Other indications of origin. Other statements, designs, devices 
or representations which indicate or infer an

[[Page 36]]

origin other than the true place of origin of the wine are prohibited.
    (l) Foreign terms. Foreign terms which: (1) Describe a particular 
condition of the grapes at the time of harvest (such as ``Auslese,'' 
``Eiswein,'' and ``Trockenbeerenauslese''); or (2) denote quality under 
foreign law (such as ``Qualitatswein'' and ``Kabinett'') may not be used 
on the labels of American wine.
    (m) Use of a vineyard, orchard, farm or ranch name. When used in a 
brand name, a vineyard, orchard, farm or ranch name having geographical 
or viticultural significance is subject to the requirements of 
Secs. 4.33(b) and 4.39(i) of this part. Additionally, the name of a 
vineyard, orchard, farm or ranch shall not be used on a wine label, 
unless 95 percent of the wine in the container was produced from primary 
winemaking material grown on the named vineyard, orchard, farm or ranch.
    (n) Use of a varietal name, type designation of varietal 
significance, semi-generic name, or geographic distinctive designation. 
Labels that contain in the brand name, product name, or distinctive or 
fanciful name, any varietal (grape type) designation, type designation 
of varietal significance, semi-generic geographic type designation, or 
geographic distinctive designation, are misleading unless the wine is 
made in accordance with the standards prescribed in classes 1, 2, or 3 
of Sec. 4.21. Any other use of such a designation on other than a class 
1, 2, or 3 wine is presumed misleading.

[T.D. 6521, 25 FR 13841, Dec. 29, 1960, as amended by T.D. ATF-53, 43 FR 
37678, Aug. 23, 1978; T.D. ATF-94, 46 FR 55095, Nov. 6, 1981; T.D. ATF-
126, 48 FR 2764, Jan. 21, 1983; T.D. ATF-180, 49 FR 31671, Aug. 8, 1984; 
T.D. ATF-229, 51 FR 20482, June 5, 1986; 51 FR 21547, June 13, 1986; 
T.D. ATF-355, 59 FR 14553, Mar. 29, 1994; T.D. ATF-431, 65 FR 59724, 
Oct. 6, 2000]



   Subpart E--Requirements for Withdrawal of Wine From Customs Custody



Sec. 4.40  Label approval and release.

    (a) Certificate of label approval. No imported beverage wine in 
containers shall be released from U.S. Customs custody for consumption 
unless there is deposited with the appropriate Customs officer at the 
port of entry the original or a photostatic copy of an approved 
certificate of label approval, ATF Form 5100.31.
    (b) If the original or photostatic copy of ATF Form 5100.31 has been 
approved, the brand or lot of imported wine bearing labels identical 
with those shown thereon may be released from U.S. Customs custody.
    (c) Relabeling. Imported wine in U.S. Customs custody which is not 
labeled in conformity with certificates of label approval issued by the 
appropriate ATF officer must be relabeled prior to release under the 
supervision and direction of Customs officers of the port at which the 
wine is located.
    (d) Cross reference. For procedures regarding the issuance, denial, 
and revocation of certificates of label approval, as well as appeal 
procedures, see part 13 of this chapter.

[T.D. ATF-66, 45 FR 40546, June 13, 1980, as amended by T.D. ATF-94, 46 
FR 55095, Nov. 6, 1981; T.D. ATF-242, 51 FR 39525, Oct. 29, 1986; T.D. 
ATF-359, 59 FR 42160, Aug. 17, 1994; T.D. ATF-406, 64 FR 2128, Jan. 13, 
1999]



Sec. 4.45  Certificates of origin and identity.

    Imported wine shall not be released from customs custody for 
consumption unless the invoice is accompanied by a certificate of origin 
issued by a duly authorized official of the appropriate foreign 
government, if the issuance of such certificates with respect to such 
wine has been authorized by the foreign government concerned, certifying 
as to the identity of the wine and that the wine has been produced in 
compliance with the laws of the respective foreign government regulating 
the production of such wine for home consumption.



Sec. 4.46  Certificate of nonstandard fill.

    A person may import wine in containers not conforming to the metric 
standards of fill prescribed at Sec. 4.73 if the wine is:
    (a) Accompanied by a statement signed by a duly authorized official 
of the appropriate foreign country, stating that the wine was bottled or 
packed before January 1, 1979;

[[Page 37]]

    (b) Being withdrawn from a Customs bonded warehouse into which it 
was entered before January 1, 1979; or
    (c) Exempt from the standard of fill requirements as provided by 
Sec. 4.70(b)(1) or (2).

[T.D. ATF-76, 46 FR 1727, Jan. 7, 1981]



  Subpart F--Requirements for Approval of Labels of Wine Domestically 
                            Bottled or Packed



Sec. 4.50  Certificates of label approval.

    (a) No person shall bottle or pack wine, other than wine bottled or 
packed in U.S. Customs custody, or remove such wine from the plant where 
bottled or packed, unless an approved certificate of label approval, ATF 
Form 5100.31, is issued by the appropriate ATF officer.
    (b) Any bottler or packer of wine shall be exempt from the 
requirements of this section if upon application the bottler or packer 
shows to the satisfaction of the appropriate ATF officer that the wine 
to be bottled or packed is not to be sold, offered for sale, or shipped 
or delivered for shipment, or otherwise introduced in interstate or 
foreign commerce. Application for exemption shall be made on ATF Form 
5100.31 in accordance with instructions on the form. If the application 
is approved, a certificate of exemption will be issued on the same form.
    (c) Cross reference. For procedures regarding the issuance, denial, 
and revocation of certificates of label approval, and certificates of 
exemption from label approval, as well as appeal procedures, see part 13 
of this chapter.

[T.D. ATF-66, 45 FR 40546, June 13, 1980, as amended by T.D. ATF-94, 46 
FR 55095, Nov. 6, 1981; T.D. ATF-242, 51 FR 39525, Oct. 29, 1986; T.D. 
ATF-344, 58 FR 40354, July 28, 1993; T.D. ATF-406, 64 FR 2128, Jan. 13, 
1999; T.D. ATF-425, 65 FR 11891, Mar. 7, 2000]



Sec. 4.51  Exhibiting certificates to Government officials.

    Any bottler or packer holding an original or duplicate original of a 
certificate of label approval or a certificate of exemption shall, upon 
demand, exhibit such certificate to a duly authorized representative of 
the United States Government.



Sec. 4.52  Photoprints.

    Photoprints or other reproductions of certificates of label approval 
or certificates of exemption are not acceptable, for the purposes of 
Secs. 4.50 through 4.52, as substitutes for an original or duplicate 
original of a certificate of label approval, or a certificate of 
exemption. The appropriate ATF officer will, upon the request of the 
bottler or packer, issue duplicate originals of certificates of label 
approval or of certificates of exemption if wine under the same brand is 
bottled or packed at more than one plant by the same person, and if the 
necessity for the duplicate originals is shown and there is listed with 
the appropriate ATF officer the name and address of the additional 
bottling or packing plant where the particular label is to be used.



                     Subpart G--Advertising of Wine



Sec. 4.60  Application.

    No person engaged in the business as a producer, rectifier, blender, 
importer, or wholesaler of wine, directly or indirectly or through an 
affiliate, shall publish or disseminate or cause to be published or 
disseminated by radio or television broadcast, or in any newspaper, 
periodical, or any publication, by any sign or outdoor advertisement, or 
any other printed or graphic matter, any advertisement of wine, if such 
advertising is in, or is calculated to induce sale in, interstate or 
foreign commerce, or is disseminated by mail, unless such advertisement 
is in conformity with Secs. 4.60-4.65 of this part. Provided, that such 
sections shall not apply to outdoor advertising in place on September 7, 
1984, but shall apply upon replacement, restoration, or renovation of 
any such advertising; and provided further, that such sections shall not 
apply to a retailer or the publisher of any newspaper, periodical, or 
other publication, or radio or television broadcast, unless such 
retailer or publisher or radio or television broadcaster is engaged in 
business as a producer, rectifier, blender, importer, or wholesaler of 
wine, directly or indirectly, or through an affiliate.

[T.D. ATF-180, 49 FR 31672, Aug. 8, 1984]

[[Page 38]]



Sec. 4.61  Definitions.

    As used in Secs. 4.60 through 4.65 of this part, the term 
advertisement includes any written or verbal statement, illustration, or 
depiction which is in, or calculated to induce sales in, interstate or 
foreign commerce, or is disseminated by mail, whether it appears in a 
newspaper, magazine, trade booklet, menu, wine card, leaflet, circular, 
mailer, book insert, catalog, promotional material, sales pamphlet, or 
any written, printed, graphic, or other matter accompanying the 
container, representations made on cases, billboard, sign, or othe 
outdoor display, public transit card, other periodical literature, 
publication, or in a radio or television broadcast, or in any other 
media; except that such term shall not include:
    (a) Any label affixed to any container of wine, or any individual 
covering, carton, or other wrapper of such container which constitute a 
part of the labeling under provisions of Secs. 4.30-4.39 of this part.
    (b) Any editorial or other reading material (i.e., news release) in 
any periodical or publication or newspaper for the publication of which 
no money or valuable consideration is paid or promised, directly or 
indirectly, by any permittee, and which is not written by or at the 
direction of the permittee.

[T.D. ATF-180, 49 FR 31672, Aug. 8, 1984]



Sec. 4.62  Mandatory statements.

    (a) Responsible advertiser. The advertisement shall state the name 
and address of the permittee responsible for its publication or 
broadcast. Street number and name may be omitted in the address.
    (b) Class, type, and distinctive designation. The advertisement 
shall contain a conspicuous statement of the class, type, or distinctive 
designation to which the product belongs, corresponding with the 
statement of class, type, or distinctive designation which is required 
to appear on the label of the product.
    (c) Exception. (1) If an advertisement refers to a general wine line 
or all of the wine products of one company, whether by the company name 
or by the brand name common to all the wine in the line, the only 
mandatory information necessary is the name and address of the 
responsible advertiser. This exception does not apply where only one 
type of wine is marketed under the specific brand name advertised.
    (2) On consumer specialty items, the only information necessary is 
the company name or brand name of the product.

[T.D. 6521, 25 FR 13835, Dec. 29, 1960, as amended by T.D. ATF-180, 49 
FR 31672, Aug. 8, 1984]



Sec. 4.63  Legibility of mandatory information.

    (a) Statements required under Secs. 4.60 through 4.65 of this part 
to appear in any written, printed, or graphic advertisement shall be in 
lettering or type size sufficient to be conspicuous and readily legible.
    (b) In the case of signs, billboards, and displays the name and 
address of the permittee responsible for the advertisement may appear in 
type size of lettering smaller than the other mandatory information, 
provided such information can be ascertained upon closer examination of 
the sign or billboard.
    (c) Mandatory information shall be so stated as to be clearly a part 
of the advertisement and shall not be separated in any manner from the 
remainder of the advertisement.
    (d) Mandatory information for two or more products shall not be 
stated unless clearly separated.
    (e) Mandatory information shall be so stated in both the print and 
audio-visual media that it will be readily apparent to the persons 
viewing the advertisement.

[T.D. ATF-180, 49 FR 31672, Aug. 8, 1984]



Sec. 4.64  Prohibited practices.

    (a) Restrictions. The advertisement of wine shall not contain:
    (1) Any statement that is false or untrue in any material 
particular, or that, irrespective of falsity, directly, or by ambiguity, 
omission, or inference, or by the addition of irrelevant, scientific or 
technical matter tends to create a misleading impression.
    (2) Any statement that is disparaging of a competitor's products.

[[Page 39]]

    (3) Any statement, design, device, or representation which is 
obscene or indecent.
    (4) Any statement, design, device, or representation of or relating 
to analyses, standards, or tests, irrespective of falsity, which the 
appropriate ATF officer finds to be likely to mislead the consumer.
    (5) Any statement, design, device, or representation of or relating 
to any guarantee, irrespective of falsity, which the appropriate ATF 
officer finds to be likely to mislead the consumer. Money-back 
guarantees are not prohibited.
    (6) Any statement that the wine is produced, blended, bottled, 
packed, or sold under, or in accordance with, any municipal, State, or 
Federal Government authorization, law, or regulations; and if a 
municipal, State, or Federal permit number is stated, the permit number 
shall not be accompanied by any additional statement relating thereto.
    (7) Any statement of bonded winecellar and bonded winery numbers 
unless stated in direct conjunction with the name and address of the 
person operating such winery or storeroom. Statement of bonded 
winecellar and bonded winery numbers may be made in the following form: 
``Bonded Winecellar No. ----,'' ``Bonded Winery No. ----,'' ``B. W. C. 
No. ----,'' ``B. W. No. ----.'' No additional reference thereto shall be 
made, nor shall any use be made of such statement that may convey the 
impression that the wine has been made or matured under Government 
supervision or in accordance with Government specifications or 
standards.
    (8) Any statement, design, device, or representation which relates 
to alcohol content or which tends to create the impression that a wine:
    (i) Contains distilled spirits; or
    (ii) Is comparable to a distilled spirit; or
    (iii) Has intoxicating qualities.

However, if a statement of composition is required to appear as the 
designation of a product not defined in these regulations, such 
statement of composition may include a reference to the type of 
distilled spirits contained therein. Further, an approved wine label, 
which bears the statement of alcohol content may be depicted in any 
advertising media, or an actual wine bottle showing the approved label 
bearing the statement of alcoholic content may be displayed in any 
advertising media.
    (9) Any word in the brand name or class and type designation which 
is the name of a distilled spirits product or which simulates, imitates, 
or creates the impression that the wine so labeled is, or is similar to, 
any product customarily made with a distilled spirits base.
    (b) Statements inconsistent with labeling. (1) Advertisements shall 
not contain any statement concerning a brand or lot of wine that is 
inconsistent with any statement on the labeling thereof.
    (2) Any label depicted on a bottle in an advertisement shall be a 
reproduction of an approved label.
    (c) Statement of age. No statement of age or representation relative 
to age (including words or devices in any brand name or mark) shall be 
made, except (1) for vintage wine, in accordance with the provisions of 
Sec. 4.27; (2) references in accordance with Sec. 4.38(f); or (3) use of 
the word ``old'' as part of a brand name.
    (d) Statement of bottling dates. The statement of any bottling date 
shall not be deemed to be a representation relative to age, if such 
statement appears without undue emphasis in the following form: 
``Bottled in ----'' (inserting the year in which the wine was bottled).
    (e) Statement of miscellaneous dates. No date, except as provided in 
paragraphs (c) and (d) of this section, with respect to statement of 
vintage year and bottling date, shall be stated unless, in addition 
thereto, and in direct conjunction therewith, in the same size and kind 
of printing there shall be stated an explanation of the significance of 
such date: Provided, That if any date refers to the date of 
establishment of any business, such date shall be stated without undue 
emphasis and in direct conjunction with the name of the person to whom 
it refers.
    (f) Flags, seals, coats of arms, crests, and other insignia. No 
advertisement shall contain any statement, design, device, or pictorial 
representation of or

[[Page 40]]

relating to, or capable of being construed as relating to, the armed 
forces of the United States, or of the American flag, or of any emblem, 
seal, insignia, or decoration associated with such flag or armed forces; 
nor shall any advertisement contain any statement, device, design, or 
pictorial representation of or concerning any flag, seal, coat of arms, 
crest, or other insignia likely to mislead the consumer to believe that 
the product has been endorsed, made, or used by, or produced for, or 
under the supervision of, or in accordance with the specifications of 
the government, organization, family, or individual with whom such flag, 
seal, coat of arms, crests, or insignia is associated.
    (g) Statements indicative of origin. No statement, design, device, 
or representation which tends to create the impression that the wine 
originated in a particular place or region, shall appear in any 
advertisement unless the label of the advertised product bears an 
appellation of origin, and such appellation of origin appears in the 
advertisement in direct conjunction with the class and type designation.
    (h) Use of the word ``importer'' or similar words. The word importer 
or similar words shall not appear in advertisements of domestic wine 
except as part of the bona fide name of the permittee by or for whom, or 
of a retailer for whom, such wine is bottled, packed or distributed: 
Provided, That in all cases where such words are used as part of such 
name, there shall be stated the words ``Product of the United States'' 
or similar words to negate any impression that the product is imported, 
and such negating statements shall appear in the same size and kind of 
printing as such name.
    (i) Curative and thereapeutic claims. Advertisements shall not 
contain any statement, design, representation, pictorial representation, 
or device representing that the use of wine has curative or therapeutic 
effects if such statement is untrue in any particular or tends to create 
a misleading impression.
    (j) Confusion of brands. Two or more different brands or lots of 
wine shall not be advertised in one advertisement (or in two or more 
advertisements in one issue of a periodical or newspaper, or in one 
piece of other written, printed, or graphic matter) if the advertisement 
tends to create the impression that representations made as to one brand 
or lot apply to the other or others, and if as to such latter the 
representations contravene any provision of Secs. 4.60 through 4.64 or 
are in any respect untrue.
    (k) Deceptive advertising techniques. Subliminal or similar 
techniques are prohibited. ``Subliminal or similar techniques,'' as used 
in this part, refers to any device or technique that is used to convey, 
or attempts to convey, a message to a person by means of images or 
sounds of a very brief nature that cannot be perceived at a normal level 
of awareness.

[T.D. 6521, 25 FR 13843, Dec. 29, 1960, as amended by T.D. 6976, 33 FR 
15025, Oct. 8, 1968; T.D. ATF-53, 43 FR 37678, Aug. 23, 1978; T.D. ATF-
180, 49 FR 31672, Aug. 8, 1984]



Sec. 4.65  Comparative advertising.

    (a) General. Comparative adverstising shall not be disparaging of a 
competitor's product.
    (b) Taste tests. (1) Taste test results may be used in 
advertisements comparing competitors' products unless they are 
disparaging, deceptive, or likely to mislead the consumer.
    (2) The taste test procedure used shall meet scientifically accepted 
procedures. An example of a scientifically accepted procedure is 
outlined in the Manual on Sensory Testing Methods, ASTM Special 
Technical Publication 434, published by the American Society for Testing 
and Materials, 1916 Race Street, Philadelphia, Pennsylvania 19103, ASTM, 
1968, Library of Congress Catalog Card Number 68-15545.
    (3) A statement shall appear in the advertisement providing the name 
and address of the testing administrator.

[T.D. ATF-180, 49 FR 31673, Aug. 8, 1984]



                  Subpart H--Standards of Fill for Wine



Sec. 4.70  Application.

    (a) Except as provided in paragraph (b) of this section, no person 
engaged in

[[Page 41]]

business as a producer, rectifier, blender, importer, or wholesaler of 
wine, directly or indirectly or through an affiliate, shall sell or ship 
or deliver for sale or shipment, or otherwise introduce in interstate or 
foreign commerce, or receive therein, or remove from customs custody, 
any wine unless such wine is bottled or packed in the standard wine 
containers herein prescribed.
    (b) Sections 4.70 through 4.73 do not apply to:
    (1) Sake;
    (2) Wine packed in containers of 18 liters or more;
    (3) Imported wine in the original containers in which entered 
customs custody if the wine was bottled or packed before January 1, 
1979; or
    (4) Wine domestically bottled or packed, either in or out of customs 
custody, before October 24, 1943, if the container, or the label on the 
container, bears a conspicuous statement of the net contents, and if the 
actual capacity of the container is not substantially less than the 
apparent capacity upon visual examination under ordinary conditions of 
purchase or use.
    (c) Section 4.73 does not apply to wine domestically bottled or 
packed, either in or out of customs custody, before January 1, 1979, if 
the wine was bottled or packed according to the standards of fill 
prescribed by Sec. 4.72.

[T.D. ATF-12, 39 FR 45222, Dec. 31, 1974, as amended by T.D. ATF-49, 43 
FR 19848, May 9, 1978; T.D. ATF-76, 46 FR 1727, Jan. 7, 1981]



Sec. 4.71  Standard wine containers.

    (a) A standard wine container shall be made, formed and filled to 
meet the following specifications:
    (1) Design. It shall be so made and formed as not to mislead the 
purchaser. Wine containers shall be held (irrespective of the 
correctness of the net contents specified on the label) to be so made 
and formed as to mislead the purchaser if the actual capacity is 
substantially less than the apparent capacity upon visual examination 
under ordinary conditions of purchase or use; and
    (2) Fill. It shall be so filled as to contain the quantity of wine 
specified in one of the standards of fill prescribed in Sec. 4.72 or 
Sec. 4.73; and
    (3) Headspace. It shall be made and filled as to have a headspace 
not in excess of 6 percent of its total capacity after closure if the 
net content of the container is 187 milliliters or more, and a headspace 
not in excess of 10 percent of such capacity in the case of all other 
containers.

[T.D. ATF-12, 39 FR 45222, Dec. 31, 1974]



Sec. 4.72  Standards of fill.

    (a) The standards of fill for wine shall be the following, subject 
to the tolerances hereinafter allowed:
    (1) For all wines:

4.9 gallons.                          1 pint.
3 gallons.                            \4/5\ pint.
1 gallon.                             \1/2\ pint.
\4/5\ gallon.                         \2/5\ pint.
\1/2\ gallon.                         4 ounces.
\2/5\ gallon.                         3 ounces.
1 quart.                              2 ounces.
\4/5\ quart.
 

    (2) In addition, for aperitif wines only: \15/16\ quart:
    (b) The tolerances in fill shall be the same as are allowed by 
Sec. 4.37 in respect to statement of net contents upon labels.
    (c) This section does not apply after December 31, 1978.

[T.D. ATF-12, 39 FR 45223, Dec. 31, 1974, as amended by T.D. ATF-76, 46 
FR 1727, Jan. 7, 1981]



Sec. 4.73  Metric standards of fill.

    (a) Authorized standards of fill. The standards of fill for wine are 
the following:

3 liters.                             375 milliliters.
1.5 liters.                           187 milliliters.
1 liter.                              100 milliliters.
750 milliliters.                      50 milliliters.
500 milliliters.                      ..................................
 

    (b) Sizes larger than 3 liters. Wine may be bottled or packed in 
containers of 4 liters or larger if the containers are filled and 
labeled in quantities of even liters (4 liters, 5 liters, 6 liters, 
etc.).
    (c) Tolerances. The tolerances in fill are the same as are allowed 
by Sec. 4.37 in respect to statement of net contents on labels.

[T.D. ATF-12, 39 FR 45223, Dec. 31, 1974, as amended by T.D. ATF-49, 43 
FR 19848, May 9, 1978; T.D. ATF-76, 46 FR 1727, Jan. 7, 1981; T.D. ATF-
303, 55 FR 42713, Oct. 23, 1990]

[[Page 42]]



                      Subpart I--General Provisions



Sec. 4.80  Exports.

    The regulations in this part shall not apply to wine exported in 
bond.



                 Subpart J--American Grape Variety Names

    Source: T.D. ATF-370, 61 FR 539, Jan. 8, 1996, unless otherwise 
noted.



Sec. 4.91  List of approved prime names.

    The following grape variety names have been approved by the Director 
for use as type designations for American wines. When more than one name 
may be used to identify a single variety of grape, the synonym is shown 
in parentheses following the prime grape names. Grape variety names may 
appear on labels of wine in upper or in lower case, and may be spelled 
with or without the hyphens or diacritic marks indicated in the 
following list.

Aglianico
Agwam
Albemarle
Aleatico
Alicante Bouschet
Aligote
Alvarelhao
Arneis
Aurore
Bacchus
Baco blanc
Baco noir
Barbera
Beacon
Beclan
Bellandais
Beta
Black Pearl
Blanc Du Bois
Blue Eye
Bonarda
Bountiful
Burdin 4672
Burdin 5201
Burdin 11042
Burgaw
Burger
Cabernet franc
Cabernet Pfeffer
Cabernet Sauvignon
Calzin
Campbell Early (Island Belle)
Canada Muscat
Captivator
Carignane
Carlos
Carmenere
Carmine
Carnelian
Cascade
Castel 19-637
Catawba
Cayuga White
Centurion
Chambourcin
Chancellor
Charbono
Chardonel
Chardonnay
Chasselas dore
Chelois
Chenin blanc
Chief
Chowan
Cinsaut (Black Malvoisie)
Clairette blanche
Clinton
Colombard (French Colombard)
Colobel
Cortese
Corvina
Concord
Conquistador
Couderc noir
Counoise
Cowart
Creek
Cynthiana (Norton)
Dearing
De Chaunac
Delaware
Diamond
Dixie
Dolcetto
Doreen
Dornfelder
Dulcet
Durif
Dutchess
Early Burgundy
Early Muscat
Edelweiss
Eden
Ehrenfelser
Ellen Scott
Elvira
Emerald Riesling
Feher Szagos
Fernao Pires
Fern Munson
Flame Tokay
Flora
Florental
Folle blanche
Fredonia
Freisa
Fry
Furmint
Gamay noir
Garronet
Gewurztraminer
Gladwin 113
Glennel
Gold

[[Page 43]]

Golden Isles
Golden Muscat
Grand Noir
Green Hungarian
Grenache
Grignolino
Grillo
Gros Verdot
Helena
Herbemont
Higgins
Horizon
Hunt
Iona
Isabella
Ives
James
Jewell
Joannes Seyve 12-428
Joannes Seyve 23-416
Kerner
Kay Gray
Kleinberger
LaCrosse
Lake Emerald
Lambrusco
Landal
Landot noir
Lenoir
Leon Millot
Limberger (Lemberger)
Madeline Angevine
Magnolia
Magoon
Malbec
Malvasia bianca
Marechal Foch
Marsanne
Melody
Melon de Bourgogne (Melon)
Merlot
Meunier (Pinot Meunier)
Mish
Mission
Missouri Riesling
Mondeuse (Refosco)
Montefiore
Moore Early
Morio-Muskat
Mourvedre (Mataro)
Muller-Thurgau
Munch
Muscadelle
Muscat blanc (Muscat Canelli)
Muscat du Moulin
Muscat Hamburg (Black Muscat)
Muscat of Alexandria
Muscat Ottonel
Naples
Nebbiolo
Negrette
New York Muscat
Niagara
Noah
Noble
Norton (Cynthiana)
Ontario
Orange Muscat
Palomino
Pamlico
Pedro Ximenes
Petit Verdot
Petite Sirah
Peverella
Pinotage
Pinot blanc
Pinot gris (Pinot Grigio)
Pinot noir
Precoce de Malingre
Pride
Primitivo
Rayon d'Or
Ravat 34
Ravat 51 (Vignoles)
Ravat noir
Redgate
Regale
Riesling (White Riesling)
Rkatziteli (Rkatsiteli)
Roanoke
Rosette
Roucaneuf
Rougeon
Roussanne
Royalty
Rubired
Ruby Cabernet
St. Croix
St. Laurent
Saint Macaire
Salem
Salvador
Sangiovese
Sauvignon blanc (Fume blanc)
Scarlet
Scheurebe
Semillon
Sereksiya
Seyval (Seyval blanc)
Siegerrebe
Siegfried
Southland
Souzao
Steuben
Stover
Sugargate
Sultanina (Thomspon Seedless)
Summit
Suwannee
Sylvaner
Symphony
Syrah (Shiraz)
Swenson Red
Tarheel
Taylor
Tempranillo (Valdepenas)
Teroldego
Thomas
Thompson Seedless (Sultanina)
Tinta Madeira
Tinto cao
Tocai Friulano
Topsail
Touriga

[[Page 44]]

Traminer
Traminette
Trousseau
Trousseau gris
Ugni blanc (Trebbiano)
Valdiguie
Valerien
Van Buren
Veeblanc
Veltliner
Ventura
Verdelet
Verdelho
Vidal blanc
Villard blanc
Villard noir
Vincent
Viognier
Vivant
Welsch Rizling
Watergate
Welder
Yuga
Zinfandel

[T.D. ATF-370, 61 FR 539, Jan. 8, 1996, as amended by T.D. ATF-417, 64 
FR 49388, Sept. 13, 1999; T.D. ATF-433, 65 FR 78096, Dec. 14, 2000; T.D. 
ATF-466, 66 FR 49280, Sept. 27, 2001]

    Effective Date Note: By T.D. ATF-475, 67 FR 11918, Mar. 18, 2002, 
Sec. 4.91 was amended by adding the names ``Albari[ntilde]o'', 
``Alvarinho'', ``Black Corinth'', and ``Fiano'' in alphabetical order, 
to the list of prime grape names, effective May 17, 2002. For the 
convenience of the user, the additions are set forth as follows:

Sec. 4.91  List of approved prime names.

                                * * * * *

Albari[ntilde]o (Alvarinho)

                                * * * * *

Alvarinho (Albari[ntilde]o)

                                * * * * *

Black Corinth

                                * * * * *

Fiano

                                * * * * *



Sec. 4.92  Alternative names permitted for temporary use.

    The following alternative names shown in the left column may be used 
as the type designation for American wine in lieu of the prime name of 
the grape variety shown in the right column. Alternative names listed in 
the left column may only be used for wine bottled prior to the date 
indicated.
    (a) Wines bottled prior to January 1, 1997.

                       Alternative Name/Prime Name

Baco 1--Baco noir
Baco 22A--Baco blanc
Bastardo--Trousseau
Black Spanish--Lenoir
Burdin 7705--Florental
Cayuga--Cayuga White
Chancellor noir--Chancellor
Chasselas--Chasselas dore
Chevrier--Semillon
Chelois noir--Chelois
Couderc 71-20--Couderc noir
Couderc 299-35--Muscat du Moulin
Foch--Marechal Foch
Franken Riesling--Sylvaner
Gutedel--Chasselas dore
Ives Seedling--Ives
Jacquez--Lenoir
Joannes Seyve 26-205--Chambourcin
Landot 244--Landal
Landot 4511--Landot noir
Millot--Leon Millot
Moore's Diamond--Diamond
Norton Seedling--Norton
Pfeffer Cabernet--Cabernet Pfeffer
Pineau de la Loire--Chenin blanc
Pinot Chardonnay--Chardonnay
Ravat 262--Ravat noir
Rulander--Pinot gris
Seibel 128--Salvador
Seibel 1000--Rosette
Seibel 4986--Rayon d'Or
Seibel 5279--Aurore
Seibel 5898--Rougeon
Seibel 7053--Chancellor
Seibel 8357--Colobel
Seibel 9110--Verdelet
Seibel 9549--De Chaunac
Seibel 10878--Chelois
Seibel 13053--Cascade
Seibel 14596--Bellandais
Seyve-Villard 5-276--Seyval
Seyve-Villard 12-309--Roucaneuf
Seyve-Villard 12-375--Villard blanc
Seyve-Villard 18-283--Garronet
Seyve-Villard 18-315--Villard noir
Seyve-Villard 23-410--Valerien
Sweetwater--Chasselas dore
Verdelet blanc--Verdelet
Vidal 256--Vidal blanc
Virginia Seedling--Norton
Walschriesling--Welsch Rizling
Welschriesling--Welsch Rizling
    (b) Wines bottled prior to January 1, 1999.

                       Alternative Name/Prime Name

Cabernet--Cabernet Sauvignon
Grey Riesling--Trousseau gris
Muscat Frontignan--Muscat blanc
Muscat Pantelleria--Muscat of Alexandria
Napa Gamay--Valdiquie

[[Page 45]]

Pinot Saint George--Negrette
Sauvignon vert--Muscadelle
    (c) Wines bottled prior to January 1, 2006.

                       Alternative Name/Prime Name

Johannisberg Riesling--Riesling

[T.D. ATF-370, 61 FR 539, Jan. 8, 1996, as amended by T.D. ATF-417, 64 
FR 49388, Sept. 13, 1999]



Sec. 4.93  Approval of grape variety names.

    (a) Any interested person may petition the Director for the approval 
of a grape variety name. The petition may be in the form of a letter and 
should provide evidence of the following--
    (1) Acceptance of the new grape variety,
    (2) The validity of the name for identifying the grape variety,
    (3) That the variety is used or will be used in winemaking, and
    (4) That the variety is grown and used in the United States.
    (b) For the approval of names of new grape varieties, documentation 
submitted with the petition to establish the items in paragraph (a) of 
this section may include--
    (1) reference to the publication of the name of the variety in a 
scientific or professional journal of horticulture or a published report 
by a professional, scientific or winegrowers' organization,
    (2) reference to a plant patent, if so patented, and
    (3) information pertaining to the commercial potential of the 
variety, such as the acreage planted and its location or market studies.
    (c) The Director will not approve a grape variety name if:
    (1) The name has previously been used for a different grape variety;
    (2) The name contains a term or name found to be misleading under 
Sec. 4.39; or
    (3) The name of a new grape variety contains the term ``Riesling.''
    (d) For new grape varieties developed in the United States, the 
Director may determine if the use of names which contain words of 
geographical significance, place names, or foreign words are misleading 
under Sec. 4.39. The Director will not approve the use of a grape 
variety name found to be misleading.
    (e) The Director shall publish the list of approved grape variety 
names at least annually in the Federal Register.

(Approved by the Office of Management and Budget under Control Number 
1512-0513)



PART 5--LABELING AND ADVERTISING OF DISTILLED SPIRITS--Table of Contents




                            Subpart A--Scope

Sec.
5.1  General.
5.2  Related regulations.
5.3  Forms prescribed.
5.4  Delegations of the Director.

                         Subpart B--Definitions

5.11  Meaning of terms.

         Subpart C--Standards of Identity for Distilled Spirits

5.21  Application of standards.
5.22  The standards of identity.
5.23  Alteration of class and type.

                          Subpart Ca--Formulas

5.25  Application.
5.26  Formula requirements.
5.27  Formulas.
5.28  Adoption of predecessor's formulas.

         Subpart D--Labeling Requirements for Distilled Spirits

5.31  General.
5.32  Mandatory label information.
5.33  Additional requirements.
5.34  Brand names.
5.35  Class and type.
5.36  Name and address.
5.37  Alcohol content.
5.38  Net contents.
5.39  Presence of neutral spirits and coloring, flavoring, and blending 
          materials.
5.40  Statements of age and percentage.
5.41  Bottle cartons, booklets and leaflets.
5.42  Prohibited practices.

       Subpart E--Standards of Fill for Bottled Distilled Spirits

5.45  Application.
5.46  Standard liquor bottles.
5.47  Standards of fill (distilled spirits bottled before January 1, 
          1980).
5.47a  Metric standards of fill (distilled spirits bottled after 
          December 31, 1979).

[[Page 46]]

 Subpart F--Requirements for Withdrawal From Customs Custody of Bottled 
                       Imported Distilled Spirits

5.51  Label approval and release.
5.52  Certificates of age and origin.
5.53  Certificate of nonstandard fill.

 Subpart G--Requirements for Approval of Labels of Domestically Bottled 
                            Distilled Spirits

5.55  Certificates of label approval.
5.56  Certificates of age and origin.

               Subpart H--Advertising of Distilled Spirits

5.61  Application.
5.62  Definition.
5.63  Mandatory statements.
5.64  Legibility of mandatory information.
5.65  Prohibited practices.
5.66  Comparative advertising.

    Authority: 26 U.S.C. 5301, 7805, 27 U.S.C. 205.

    Source: T.D. 7020, 34 FR 20337, Dec. 30, 1969, unless otherwise 
noted.

    Editorial Note: Nomenclature changes to part 5 appear by T.D. ATF-
425, 65 FR 11891, Mar. 7, 2000.



                            Subpart A--Scope



Sec. 5.1  General.

    The regulations in this part relate to the labeling and advertising 
of distilled spirits. This part applies to the several States of the 
United States, the District of Columbia, and the Commonwealth of Puerto 
Rico, but does not apply to distilled spirits for export.



Sec. 5.2  Related regulations.

    Regulations relating to this part are listed below:

27 CFR Part 1--Basic Permit Requirements under the Federal Alcohol 
Administration Act.
27 CFR Part 2--Nonindustrial Use of Distilled Spirits and Wine.
27 CFR Part 3--Bulk Sales and Bottling of Distilled Spirits.
27 CFR Part 4--Labeling and Advertising of Wine.
27 CFR Part 7--Labeling and Advertising of Malt Beverages.
27 CFR Part 16--Alcoholic Beverage Health Warning Statement.
27 CFR Part 19--Distilled Spirits Plants.
27 CFR Part 26--Liquors and Articles from Puerto Rico and the Virgin 
Islands.
27 CFR Part 71--Rules of Practice in Permit Proceedings.
27 CFR Part 251--Importation of Distilled Spirits, Wines and Beer.
27 CFR Part 252--Exportation of Liquors.

(26 U.S.C. 7805 (68A Stat. 917, as amended); 27 U.S.C. 205 49 Stat. 981, 
as amended)

[T.D. 720, 34 FR 20637, Dec. 30, 1969, as amended by T.D. ATF-62, 44 FR 
71620, Dec. 11, 1979; T.D. ATF-114, 47 FR 43947, Oct. 5, 1982; 55 FR 
5421, Feb. 14, 1990; T.D. ATF-459, 66 FR 38549, July 25, 2001; T.D. ATF-
463, 66 FR 42733, Aug. 15, 2001]



Sec. 5.3  Forms prescribed.

    (a) The appropriate ATF officer is authorized to prescribe all forms 
required by this part. All of the information called for in each form 
shall be furnished as indicated by the headings on the form and the 
instructions on or pertaining to the form. In addition, information 
called for in each form shall be furnished as required by this part. The 
form will be filed in accordance with the instructions for the form.
    (b) Forms may be requested from the ATF Distribution Center, PO Box 
5950, Springfield, Virginia 22153-5190, or by accessing the ATF web site 
(http://www.atf.treas.gov/).

[T.D. ATF-92, 46 FR 46912, Sept. 23, 1981, as amended by T.D. ATF-249, 
52 FR 5956, Feb. 27, 1987; T.D. 372, 61 FR 20723, May 8, 1996; T.D. ATF-
425, 65 FR 11891, Mar. 7, 2000]



Sec. 5.4  Delegations of the Director.

    Most of the regulatory authorities of the Director contained in this 
part 5 are delegated to appropriate ATF officers. These ATF officers are 
specified in ATF Order 1130.2A, Delegation Order--Delegation of the 
Director's Authorities in 27 CFR parts 4, 5 and 7, Labeling and 
Advertising of Wine, Distilled Spirits and Malt Beverages. ATF 
delegation orders, such as ATF Order 1130.2A, are available to any 
interested person by mailing a request to the ATF Distribution Center, 
PO Box 5950, Springfield, Virginia 22150-5190, or by accessing the ATF 
web site (http://www.atf.treas.gov/).

[T.D. ATF-425, 65 FR 11891, Mar. 7, 2000]



                         Subpart B--Definitions



Sec. 5.11  Meaning of terms.

    When used in this part and in forms prescribed under this part, 
where not

[[Page 47]]

otherwise distinctly expressed or manifestly incompatible with the 
intent thereof, terms shall have the meaning ascribed in this section. 
Any other term defined in the Federal Alcohol Administration Act and 
used in this part shall have the same meaning assigned to it by such 
Act.
    Act. The Federal Alcohol Administration Act.
    Advertisement. See Sec. 5.62 for meaning of term as used in subpart 
H of this part.
    Age. The period during which, after distillation and before 
bottling, distilled spirits have been stored in oak containers. ``Age'' 
for bourbon whisky, rye whisky, wheat whisky, malt whisky, or rye malt 
whisky, and straight whiskies other than straight corn whisky, means the 
period the whisky has been stored in charred new oak containers.
    Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this part by ATF Order 
1130.2A, Delegation Order--Delegation of the Director's Authorities in 
27 CFR part 4, 5 and 7, Labeling and Advertising of Wine, Distilled 
Spirits and Malt Beverages.
    Bottle. Any container, irrespective of the material from which made, 
used for the sale of distilled spirits at retail.
    Brand label. The principal display panel that is most likely to be 
displayed, presented, shown, or examined under normal and customary 
conditions of display for retail sale, and any other label appearing on 
the same side of the bottle as the principal display panel. The 
principal display panel appearing on a cylindrical surface is that 40 
percent of the circumference which is most likely to be displayed, 
presented, shown, or examined under normal and customary conditions of 
display for retail sale.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC.
    Distilled spirits. Ethyl alcohol, hydrated oxide of ethyl, spirits 
of wine, whisky, rum, brandy, gin, and other distilled spirits, 
including all dilutions and mixtures thereof, for nonindustrial use. The 
term ``distilled spirits'' shall not include mixtures containing wine, 
bottled at 48 degrees of proof or less, if the mixture contains more 
than 50 percent wine on a proof gallon basis.
    Gallon. U.S. gallon of 231 cubic inches of alcoholic beverage at 60 
deg.F.
    In bulk. In containers having a capacity in excess of 1 wine gallon 
(3.785 liters).
    Interstate or foreign commerce. Commerce between any State and any 
place outside thereof, or commerce within any Territory or the District 
of Columbia, or between points within the same State but through any 
place outside thereof.
    Liter or litre. A metric unit of capacity equal to 1,000 cubic 
centimeters of distilled spirits at l5.56  deg.C (60  deg.F.), and 
equivalent to 33.814 U.S. fluid ounces. A liter is subdivided into 1,000 
milliliters. milliliter or milliliters may be abbreviated as ``ml''.
    Permittee. Any person holding a basic permit under the Federal 
Alcohol Administration Act.
    Person. Any individual, partnership, joint stock company, business 
trust, association, corporation, or other form of business enterprise, 
including a receiver, trustee, or liquidating agent and including an 
officer or employee of any agency of a State or political subdivision 
thereof; and the term ``trade buyer'' means any person who is a 
wholesaler or retailer.
    Produced at. As used in Secs. 5.22 and 5.52 in conjunction with 
specific degrees of proof to describe the standards of identity, means 
the composite proof of the spirits after completion of distillation and 
before reduction in proof.
    Proof gallon. A gallon of liquid at 60  deg.F. which contains 50 
percent by volume of ethyl alcohol having a specific gravity of 0.7939 
at 60  deg.F. referred to water at 60  deg.F. as unity, or the alcoholic 
equivalent thereof.
    Season. The period from January 1 through June 30, is the spring 
season and the period from July 1 through December 31 is the fall 
season.
    United States. The several States and Territories and the District 
of Columbia; the term ``State'' includes a Territory and the District of 
Columbia; and

[[Page 48]]

the term ``Territory'' means the Commonwealth of Puerto Rico.

(26 U.S.C. 7805 (68 Stat. 917, as amended); 27 U.S.C. 205 (49 Stat. 981, 
as amended))

[T.D. ATF-48, 43 FR 13533, Mar. 31, 1978; 44 FR 55839, Sept. 28, 1979, 
as amended by T.D. ATF-62, 44 FR 71620, Dec. 11, 1979; T.D. ATF-66, 45 
FR 40547, June 13, 1980; T.D. ATF-94, 46 FR 55096, Nov. 6, 1981; T.D. 
ATF-198, 50 FR 8463, Mar. 1, 1985; T.D. ATF-230, 51 FR 21748, June 16, 
1986; T.D. ATF-425, 65 FR 11891, Mar. 7, 2000]



         Subpart C--Standards of Identity for Distilled Spirits



Sec. 5.21  Application of standards.

    The standards of identity for the several classes and types of 
distilled spirits set forth in this part shall be applicable only to 
distilled spirits for beverage or other nonindustrial purposes.



Sec. 5.22  The standards of identity.

    Standards of identity for the several classes and types of distilled 
spirits set forth in this section shall be as follows (see also 
Sec. 5.35, class and type):
    (a) Class 1; neutral spirits or alcohol. ``Neutral spirits'' or 
``alcohol'' are distilled spirits produced from any material at or above 
190 deg. proof, and, if bottled, bottled at not less than 80 deg. proof.
    (1) ``Vodka'' is neutral spirits so distilled, or so treated after 
distillation with charcoal or other materials, as to be without 
distinctive character, aroma, taste, or color.
    (2) ``Grain spirits'' are neutral spirits distilled from a fermented 
mash of grain and stored in oak containers.
    (b) Class 2; whisky. ``Whisky'' is an alcoholic distillate from a 
fermented mash of grain produced at less than 190 deg. proof in such 
manner that the distillate possesses the taste, aroma, and 
characteristics generally attributed to whisky, stored in oak containers 
(except that corn whisky need not be so stored), and bottled at not less 
than 80 deg. proof, and also includes mixtures of such distillates for 
which no specific standards of identity are prescribed.
    (1)(i) ``Bourbon whisky'', ``rye whisky'', ``wheat whisky'', ``malt 
whisky'', or ``rye malt whisky'' is whisky produced at not exceeding 
160 deg. proof from a fermented mash of not less than 51 percent corn, 
rye, wheat, malted barley, or malted rye grain, respectively, and stored 
at not more than 125 deg. proof in charred new oak containers; and also 
includes mixtures of such whiskies of the same type.
    (ii) ``Corn whisky'' is whisky produced at not exceeding 160 deg. 
proof from a fermented mash of not less than 80 percent corn grain, and 
if stored in oak containers stored at not more than 125 deg. proof in 
used or uncharred new oak containers and not subjected in any manner to 
treatment with charred wood; and also includes mixtures of such whisky.
    (iii) Whiskies conforming to the standards prescribed in paragraphs 
(b)(1)(i) and (ii) of this section, which have been stored in the type 
of oak containers prescribed, for a period of 2 years or more shall be 
further designated as ``straight''; for example, ``straight bourbon 
whisky'', ``straight corn whisky'', and whisky conforming to the 
standards prescribed in paragraph (b)(1)(i) of this section, except that 
it was produced from a fermented mash of less than 51 percent of any one 
type of grain, and stored for a period of 2 years or more in charred new 
oak containers shall be designated merely as ``straight whisky''. No 
other whiskies may be designated ``straight''. ``Straight whisky'' 
includes mixtures of straight whiskies of the same type produced in the 
same State.
    (2) ``Whisky distilled from bourbon (rye, wheat, malt, or rye malt) 
mash'' is whisky produced in the United States at not exceeding 160 deg. 
proof from a fermented mash of not less than 51 percent corn, rye, 
wheat, malted barley, or malted rye grain, respectively, and stored in 
used oak containers; and also includes mixtures of such whiskies of the 
same type. Whisky conforming to the standard of identity for corn whisky 
must be designated corn whisky.
    (3) ``Light whisky'' is whisky produced in the United States at more 
than 160 deg. proof, on or after January 26, 1968, and stored in used or 
uncharred new oak containers; and also includes mixtures of such 
whiskies. If ``light

[[Page 49]]

whisky'' is mixed with less than 20 percent of straight whisky on a 
proof gallon basis, the mixture shall be designated ``blended light 
whisky'' (light whisky--a blend).
    (4) ``Blended whisky'' (whisky--a blend) is a mixture which contains 
straight whisky or a blend of straight whiskies at not less than 20 
percent on a proof gallon basis, excluding alcohol derived from added 
harmless coloring, flavoring or blending materials, and, separately, or 
in combination, whisky or neutral spirits. A blended whisky containing 
not less than 51 percent on a proof gallon basis of one of the types of 
straight whisky shall be further designated by that specific type of 
straight whisky; for example, ``blended rye whisky'' (rye whisky--a 
blend).
    (5)(i) ``A blend of straight whiskies'' (blended straight whiskies) 
is a mixture of straight whiskies which does not conform to the standard 
of identify for ``straight whisky.'' Products so designated may contain 
harmless coloring, flavoring, or blending materials as set forth in 27 
CFR 5.23(a).
    (ii) ``A blend of straight whiskies'' (blended straight whiskies) 
consisting entirely of one of the types of straight whisky, and not 
conforming to the standard for straight whisky, shall be further 
designated by that specific type of straight whisky; for example, ``a 
blend of straight rye whiskies'' (blended straight rye whiskies). ``A 
blend of straight whiskies'' consisting entirely of one of the types of 
straight whisky shall include straight whisky of the same type which was 
produced in the same State or by the same proprietor within the same 
State, provided that such whisky contains harmless coloring, flavoring, 
or blending materials as stated in 27 CFR 5.23(a).
    (iii) The harmless coloring, flavoring, or blending materials 
allowed under this section shall not include neutral spirits or alcohol 
in their original state. Neutral spirits or alcohol may only appear in a 
``blend of straight whiskies'' or in a ``blend of straight whiskies 
consisting entirely of one of the types of straight whisky'' as a 
vehicle for recognized flavoring of blending material.
    (6) ``Spirit whisky'' is a mixture of neutral spirits and not less 
than 5 percent on a proof gallon basis of whisky, or straight whisky, or 
straight whisky and whisky, if the straight whisky component is less 
than 20 percent on a proof gallon basis.
    (7) ``Scotch whisky'' is whisky which is a distinctive product of 
Scotland, manufactured in Scotland in compliance with the laws of the 
United Kingdom regulating the manufacture of Scotch whisky for 
consumption in the United Kingdom: Provided, That if such product is a 
mixture of whiskies, such mixture is ``blended Scotch whisky'' (Scotch 
whisky--a blend).
    (8) ``Irish whisky'' is whisky which is a distinctive product of 
Ireland, manufactured either in the Republic of Ireland or in Northern 
Ireland, in compliance with their laws regulating the manufacture of 
Irish whisky for home consumption: Provided, That if such product is a 
mixture of whiskies, such mixture is ``blended Irish whisky'' (Irish 
whisky--a blend).
    (9) ``Canadian whisky'' is whisky which is a distinctive product of 
Canada, manufactured in Canada in compliance with the laws of Canada 
regulating the manufacture of Canadian whisky for consumption in Canada: 
Provided, That if such product is a mixture of whiskies, such mixture is 
``blended Canadian whisky'' (Canadian whisky--a blend).
    (c) Class 3; gin. ``Gin'' is a product obtained by original 
distillation from mash, or by redistillation of distilled spirits, or by 
mixing neutral spirits, with or over juniper berries and other 
aromatics, or with or over extracts derived from infusions, 
percolations, or maceration of such materials, and includes mixtures of 
gin and neutral spirits. It shall derive its main characteristic flavor 
from juniper berries and be bottled at not less than 80 deg. proof. Gin 
produced exclusively by original distillation or by redistillation may 
be further designated as ``distilled''. ``Dry gin'' (London dry gin), 
``Geneva gin'' (Hollands gin), and ``Old Tom gin'' (Tom gin) are types 
of gin known under such designations.
    (d) Class 4; brandy. ``Brandy'' is an alcoholic distillate from the 
fermented juice, mash, or wine of fruit, or from the residue thereof, 
produced at less than 190 deg. proof in such manner that the

[[Page 50]]

distillate possesses the taste, aroma, and characteristics generally 
attributed to the product, and bottled at not less than 80 deg. proof. 
Brandy, or mixtures thereof, not conforming to any of the standards in 
paragraphs (d) (1) through (8) of this section shall be designated as 
``brandy'', and such designation shall be immediately followed by a 
truthful and adequate statement of composition.
    (1) ``Fruit brandy'' is brandy distilled solely from the fermented 
juice or mash of whole, sound, ripe fruit, or from standard grape, 
citrus, or other fruit wine, with or without the addition of not more 
than 20 percent by weight of the pomace of such juice or wine, or 30 
percent by volume of the lees of such wine, or both (calculated prior to 
the addition of water to facilitate fermentation or distillation). Fruit 
brandy shall include mixtures of such brandy with not more than 30 
percent (calculated on a proof gallon basis) of lees brandy. Fruit 
brandy, derived from grapes, shall be designated as ``grape brandy'' or 
``brandy'', except that in the case of brandy (other than neutral 
brandy, pomace brandy, marc brandy or grappa brandy) distilled from the 
fermented juice, mash, or wine of grapes, or the residue thereof, which 
has been stored in oak containers for less than 2 years, the statement 
of class and type shall be immediately preceded, in the same size and 
kind of type, by the word ``immature''. Fruit brandy, other than grape 
brandy, derived from one variety of fruit, shall be designated by the 
word ``brandy'' qualified by the name of such fruit (for example, 
``peach brandy''), except that ``apple brandy'' may be designated 
``applejack''. Fruit brandy derived from more than one variety of fruit 
shall be designated as ``fruit brandy'' qualified by a truthful and 
adequate statement of composition.
    (2) ``Cognac'', or ``Cognac (grape) brandy'', is grape brandy 
distilled in the Cognac region of France, which is entitled to be so 
designated by the laws and regulations of the French Government.
    (3) ``Dried fruit brandy'' is brandy that conforms to the standard 
for fruit brandy except that it has been derived from sound, dried 
fruit, or from the standard wine of such fruit. Brandy derived from 
raisins, or from raisin wine, shall be designated as ``raisin brandy''. 
Other brandies shall be designated in the same manner as fruit brandy 
from the corresponding variety or varieties of fruit except that the 
name of the fruit shall be qualified by the word ``dried''.
    (4) ``Lees brandy'' is brandy distilled from the lees of standard 
grape, citrus, or other fruit wine, and shall be designated as ``lees 
brandy'', qualified by the name of the fruit from which such lees are 
derived.
    (5) ``Pomace brandy'', or ``marc brandy'', is brandy distilled from 
the skin and pulp of sound, ripe grapes, citrus or other fruit, after 
the withdrawal of the juice or wine therefrom, and shall be designated 
as ``pomace brandy'', or ``marc brandy'', qualified by the name of the 
fruit from which derived. Grape pomace brandy may be designated as 
``grappa'' or ``grappa brandy''.
    (6) ``Residue brandy'' is brandy distilled wholly or in part from 
the fermented residue of fruit or wine, and shall be designated as 
``residue brandy'' qualified by the name of the fruit from which 
derived. Brandy distilled wholly or in part from residue materials which 
conforms to any of the standards set forth in paragraphs (d) (1), (3), 
(4), and (5) of this section may, regardless of such fact, be designated 
``residue brandy'', but the use of such designation shall be conclusive, 
precluding any later change of designation.
    (7) ``Neutral brandy'' is brandy produced at more than 170 deg. 
proof and shall be designated in accordance with the standards in this 
paragraph, except that the designation shall be qualified by the word 
``neutral''; for example, ``neutral citrus residue brandy''.
    (8) ``Substandard brandy'' shall bear as a part of its designation 
the word ``substandard'', and shall include:
    (i) Any brandy distilled from fermented juice, mash, or wine having 
a volatile acidity, calculated as acetic acid and exclusive of sulfur 
dioxide, in excess of 0.20 gram per 100 cubic centimeters (20  deg.C.); 
measurements of volatile acidity shall be calculated exclusive of water 
added to facilitate distillation.

[[Page 51]]

    (ii) Any brandy which has been distilled from unsound, moldy, 
diseased, or decomposed juice, mash, wine, lees, pomace, or residue, or 
which shows in the finished product any taste, aroma, or characteristic 
associated with products distilled from such material.
    (e) Class 5; blended applejack. ``Blended applejack'' (applejack--a 
blend) is a mixture which contains at least 20 percent of apple brandy 
(applejack) on a proof gallon basis, stored in oak containers for not 
less than 2 years, and not more than 80 percent of neutral spirits on a 
proof gallon basis if such mixture at the time of bottling is not less 
than 80 deg. proof.
    (f) Class 6; rum. ``Rum'' is an alcoholic distillate from the 
fermented juice of sugar cane, sugar cane syrup, sugar cane molasses, or 
other sugar cane by-products, produced at less than 190 deg. proof in 
such manner that the distillate possesses the taste, aroma and 
characteristics generally attributed to rum, and bottled at not less 
than 80 deg. proof; and also includes mixtures solely of such 
distillates.
    (g) Class 7; Tequila. ``Tequila'' is an alcoholic distillate from a 
fermented mash derived principally from the Agave Tequilana Weber 
(``blue'' variety), with or without additional fermentable substances, 
distilled in such a manner that the distillate possesses the taste, 
aroma, and characteristics generally attributed to Tequila and bottled 
at not less than 80 deg. proof, and also includes mixtures solely of 
such distillates. Tequila is a distinctive product of Mexico, 
manufactured in Mexico in compliance with the laws of Mexico regulating 
the manufacture of Tequila for consumption in that country.
    (h) Class 8; cordials and liqueurs. Cordials and liqueurs are 
products obtained by mixing or redistilling distilled spirits with or 
over fruits, flowers, plants, or pure juices therefrom, or other natural 
flavoring materials, or with extracts derived from infusions, 
percolation, or maceration of such materials, and containing sugar, 
dextrose, or levulose, or a combination thereof, in an amount not less 
than 2\1/2\ percent by weight of the finished product.
    (1) ``Sloe gin'' is a cordial or liqueur with the main 
characteristic flavor derived from sloe berries.
    (2) ``Rye liqueur'', ``bourbon liqueur'' (rye, bourbon cordial) are 
liqueurs, bottled at not less than 60 deg. proof, in which not less than 
51 percent, on a proof gallon basis, of the distilled spirits used are, 
respectively, rye or bourbon whisky, straight rye or straight bourbon 
whisky, or whisky distilled from a rye or bourbon mash, and which 
possess a predominant characteristic rye or bourbon flavor derived from 
such whisky. Wine, if used, must be within the 2\1/2\ percent limitation 
provided in Sec. 5.23 for coloring, flavoring, and blending materials.
    (3) ``Rock and rye'', ``rock and bourbon'', ``rock and brandy'', 
``rock and rum'' are liqueurs, bottled at not less than 48 deg. proof, 
in which, in the case of rock and rye and rock and bourbon, not less 
than 51 percent, on a proof gallon basis, of the distilled spirits used 
are, respectively, rye or bourbon whisky, straight rye or straight 
bourbon whisky, or whisky distilled from a rye or bourbon mash, and, in 
the case of rock and brandy and rock and rum, the distilled spirits used 
are all grape brandy or rum, respectively; containing rock candy or 
sugar syrup, with or without the addition of fruit, fruit juices, or 
other natural flavoring materials, and possessing, respectively, a 
predominant characteristic rye, bourbon, brandy, or rum flavor derived 
from the distilled spirits used. Wine, if used, must be within the 2\1/
2\ percent limitation provided in Sec. 5.23 for harmless coloring, 
flavoring, and blending materials.
    (4) ``Rum liqueur,'' ``gin liqueur,'' ``brandy liqueur,'' are 
liqueurs, bottled at not less than 60 proof, in which the distilled 
spirits used are entirely rum, gin, or brandy, respectively, and which 
possess, respectively, a predominant characteristic rum, gin, or brandy 
flavor derived from the distilled spirits used. In the case of brandy 
liqueur, the type of brandy must be stated in accordance with 
Sec. 5.22(d), except that liqueurs made entirely with grape brandy may 
be designated simply as ``brandy liqueur.'' Wine, if used, must be 
within the 2\1/2\ percent limitation provided for in Sec. 5.23 for 
harmless coloring, flavoring, and blending materials.

[[Page 52]]

    (5) The designation of a cordial or liqueur may include the word 
``dry'' if the sugar, dextrose, or levulose, or a combination thereof, 
are less than 10 percent by weight of the finished product.
    (6) Cordials and liqueurs shall not be designated as ``distilled'' 
or ``compound''.
    (i) Class 9; flavored brandy, flavored gin, flavored rum, flavored 
vodka, and flavored whisky. ``Flavored brandy, ``flavored gin,'' 
``flavored rum,'' ``flavored vodka,'' and ``flavored whisky,'' are 
brandy, gin, rum vodka, and whisky, respectively, to which have been 
added natural flavoring materials, with or without the addition of 
sugar, and bottled at not less than 60 deg. proof. The name of the 
predominant flavor shall appear as a part of the designation. If the 
finished product contains more than 2\1/2\ percent by volume of wine, 
the kinds and precentages by volume of wine must be stated as a part of 
the designation, except that a flavored brandy may contain an additional 
12\1/2\ percent by volume of wine, without label disclosure, if the 
additional wine is derived from the particular fruit corresponding to 
the labeled flavor of the product.
    (j) Class 10; imitations. Imitations shall bear, as a part of the 
designation thereof, the word ``imitation'' and shall include the 
following:
    (1) Any class or type of distilled spirits to which has been added 
coloring or flavoring material of such nature as to cause the resultant 
product to simulate any other class or type of distilled spirits;
    (2) Any class or type of distilled spirits (other than distilled 
spirits required under Sec. 5.35 to bear a distinctive or fanciful name 
and a truthful and adequate statement of composition) to which has been 
added flavors considered to be artificial or imitation. In determining 
whether a flavor is artificial or imitation, recognition will be given 
to what is considered to be ``good commercial practice'' in the flavor 
manufacturing industry;
    (3) Any class of type of distilled spirits (except cordials, 
liqueurs and specialties marketed under labels which do not indicate or 
imply, that a particular class or type of distilled spirits was used in 
the manufacture thereof) to which has been added any whisky essense, 
brandy essence, rum essence, or similar essence or extract which 
simulates or enhances, or is used by the trade or in the particular 
product to simulate or enhance, the characteristics of any class or type 
of distilled spirits;
    (4) Any type of whisky to which beading oil has been added;
    (5) Any rum to which neutral spirits or distilled spirits other than 
rum have been added;
    (6) Any brandy made from distilling material to which has been added 
any amount of sugar other than the kind and amount of sugar expressly 
authorized in the production of standard wine; and
    (7) Any brandy to which neutral spirits or distilled spirits other 
than brandy have been added, except that this provision shall not apply 
to any product conforming to the standard of identity for blended 
applejack.
    (k) Class 11; geographical designations. (1) Geographical names for 
distinctive types of distilled spirits (other than names found by the 
appropriate ATF officer under paragraph (k)(2) of this section to have 
become generic) shall not be applied to distilled spirits produced in 
any other place than the particular region indicated by the name, unless 
(i) in direct conjunction with the name there appears the word ``type'' 
or the word ``American'' or some other adjective indicating the true 
place of production, in lettering substantially as conspicuous as such 
name, and (ii) the distilled spirits to which the name is applied 
conform to the distilled spirits of that particular region. The 
following are examples of distinctive types of distilled spirits with 
geographical names that have not become generic: Eau de Vie de Dantzig 
(Danziger Goldwasser), Ojen, Swedish punch. Geographical names for 
distinctive types of distilled spirits shall be used to designate only 
distilled spirits conforming to the standard of identity, if any, for 
such type specified in this section, or if no such standard is so 
specified, then in accordance with the trade understanding of that 
distinctive type.

[[Page 53]]

    (2) Only such geographical names for distilled spirits as the 
appropriate ATF officer finds have by usage and common knowledge lost 
their geographical significance to such extent that they have become 
generic shall be deemed to have become generic. Examples at London dry 
gin, Geneva (Hollands) gin.
    (3) Geographical names that are not names for distinctive types of 
distilled spirits, and that have not become generic, shall not be 
applied to distilled spirits produced in any other place than the 
particular place or region indicated in the name. Examples are Cognac, 
Armagnac, Greek brandy, Pisco brandy, Jamaica rum, Puerto Rico rum, 
Demerara rum.
    (4) The words ``Scotch'', ``Scots'' ``Highland'', or ``Highlands'' 
and similar words connoting, indicating, or commonly associated with 
Scotland, shall not be used to designate any product not wholly produced 
in Scotland.
    (l) Class 12; products without geographical designations but 
distinctive of a particular place. (1) The whiskies of the types 
specified in paragraphs (b) (1), (4), (5), and (6) of this section are 
distinctive products of the United States and if produced in a foreign 
country shall be designated by the applicable designation prescribed in 
such paragraphs, together with the words ``American type'' or the words 
``produced (distilled, blended) in ----'', the blank to be filled in 
with the name of the foreign country: Provided, That the word 
``bourbon'' shall not be used to describe any whisky or whisky-based 
distilled spirits not produced in the United States. If whisky of any of 
these types is composed in part of whisky or whiskies produced in a 
foreign country there shall be stated, on the brand label, the 
percentage of such whisky and the country of origin thereof.
    (2) The name for other distilled spirits which are distinctive 
products of a particular place or country, an example is Habanero, shall 
not be given to the product of any other place or country unless the 
designation for such product includes the word ``type'' or an adjective 
such as ``American'', or the like, clearly indicating the true place of 
production. The provision for place of production shall not apply to 
designations which by usage and common knowledge have lost their 
geographical significance to such an extent that the appropriate ATF 
officer finds they have become generic. Examples are Slivovitz, 
Zubrovka, Aquavit, Arrack, and Kirschwasser.

[T.D. 7020, 34 FR 20337, Dec. 30, 1969, as amended by T.D. ATF-7, 38 FR 
33471, Dec. 5, 1973; T.D. ATF-36, 41 FR 47426, Oct. 29, 1976; T.D. ATF-
37, 41 FR 48121, Nov. 2, 1976; T.D. ATF-48, 44 FR 55839, Sept. 28, 1979; 
T.D. ATF-62, 44 FR 71620, Dec. 11, 1979; T.D. ATF-66, 45 FR 40547, June 
13, 1980; T.D. ATF-94, 46 FR 55096, Nov. 6, 1981; T.D. ATF-259, 52 FR 
41422, Oct. 28, 1987; T.D. ATF-324, 57 FR 29020, June 30, 1992]



Sec. 5.23  Alteration of class and type.

    (a) Additions. (1) The addition of any coloring, flavoring, or 
blending materials to any class and type of distilled spirits, except as 
otherwise provided in this section, alters the class and type thereof 
and the product shall be appropriately redesignated.
    (2) There may be added to any class or type of distilled spirits, 
without changing the class or type thereof, (i) such harmless coloring, 
flavoring, or blending materials as are an essential component part of 
the particular class or type of distilled spirits to which added, and 
(ii) harmless coloring, flavoring, or blending materials such as 
caramel, straight malt or straight rye malt whiskies, fruit juices, 
sugar, infusion of oak chips when approved by the Director, or wine, 
which are not an essential component part of the particular distilled 
spirits to which added, but which are customarily employed therein in 
accordance with established trade usage, if such coloring, flavoring, or 
blending materials do not total more than 2\1/2\ percent by volume of 
the finished product.
    (3) ``Harmless coloring, flavoring, and blending materials'' shall 
not include (i) any material which would render the product to which it 
is added an imitation, or (ii) any material, other than caramel, 
infusion of oak chips, and sugar, in the case of Cognac brandy; or (iii) 
any material whatsoever in the case of neutral spirits or straight 
whiskey, except that vodka may be treated with sugar in an amount not to 
exceed

[[Page 54]]

2 grams per liter and a trace amount of citric acid.
    (b) Extractions. The removal from any distilled spirits of any 
constituents to such an extent that the product does not possess the 
taste, aroma, and characteristics generally attributed to that class or 
type of distilled spirits alters the class and type thereof, and the 
product shall be appropriately redesignated. In addition, in the case of 
straight whisky the removal of more than 15 percent of the fixed acids, 
or volatile acids, or esters, or soluble solids, or higher alcohols, or 
more than 25 percent of the soluble color, shall be deemed to alter the 
class or type thereof.
    (c) Exceptions. (1) This section shall not be construed as in any 
manner modifying the standards of identity for cordials and liqueurs, 
flavored brandy, flavored gin, flavored rum, flavored vodka, and 
flavored whisky or as authorizing any product which is defined in 
Sec. 5.22(j), Class 10, as an imitation to be otherwise designated.
    (2) [Reserved]

[T.D. 7020, 34 FR 20337, Dec. 30. 1969, as amended by T.D. ATF-360, 59 
FR 67222, 67223, Dec. 29, 1994; T.D. ATF-369, 61 FR 67327, Dec. 29, 
1995]



                          Subpart Ca--Formulas

    Source: T.D. ATF-62, 44 FR 71620, Dec. 11, 1979, unless otherwise 
noted.



Sec. 5.25  Application.

    The requirements of this subpart shall apply to:
    (a) Proprietors of distilled spirits plants qualified as processors 
under 27 CFR part 19;
    (b) Persons in Puerto Rico who manufacture distilled spirits 
products for shipment to the United States. Formulas need only be filed 
for those products which will be shipped to the United States; and
    (c) Persons who ship into the United States, Virgin Islands 
distilled spirits products.



Sec. 5.26  Formula requirements.

    (a) General. An approved formula is required to blend, mix, purify, 
refine, compound, or treat spirits in a manner which results in a change 
of character, composition, class or type of the spirits. Form 5110.38 
(27-B Supplemental) shall be filed in accordance with the instructions 
on the form and shall designate all ingredients and, if required, the 
process used. Any approved formula on Form 27-B Supplemental or Form 
5110.38 shall remain in effect until revoked, superseded, or voluntarily 
surrendered. Any existing qualifying statements as to the rate of tax or 
the limited use of drawback flavors appearing on a Form 27-B 
Supplemental are obsolete.
    (b) Change in formula. Any change in an approved formula shall 
require the filing of a new Form 5110.38. After a change in a formula is 
approved, the original formula shall be surrendered to the appropriate 
ATF officer.

[T.D. ATF-62, 44 FR 71620, as amended by T.D. ATF-425, 65 FR 11891, Mar. 
7, 2000]



Sec. 5.27  Formulas.

    Formulas are required for distilled spirits operations which change 
the character, composition, class or type of spirits as follows:
    (a) The compounding of spirits through the mixing of any coloring, 
flavoring, wine, or other material with distilled spirits;
    (b) The manufacture of an intermediate product to be used 
exclusively in other distilled spirits products on bonded premises;
    (c) Any filtering or stabilizing process which results in a product 
which does not possess the taste, aroma, and characteristics generally 
attributed to that class or type of distilled spirits; and, in the case 
of straight whisky, results in the removal of more than 15 percent of 
the fixed acids, volatile acids, esters, soluble solids, or higher 
alcohols, or more than 25 percent of the soluble color;
    (d) The mingling of spirits (including merchandise returned to bond) 
which differ in class or type of materials from which produced;
    (e) The mingling of spirits stored in charred cooperage with spirits 
stored in plain or reused cooperage, or the mixing of spirits that have 
been treated with wood chips with spirits not so treated, or the mixing 
of spirits that have been subjected to any treatment which changes their 
character with

[[Page 55]]

spirits not so treated, unless it is determined that the composition of 
the spirits is the same, notwithstanding the storage in different kinds 
of cooperage or the treatment of a portion of the spirits;
    (f) The use (except as authorized for production or storage 
operations as provided by 27 CFR part 19) of any physical or chemical 
process or any apparatus which accelerates the maturing of the spirits;
    (g) The steeping or soaking of fruits, berries, aromatic herbs, 
roots, seeds, etc., in spirits or wines;
    (h) The artificial carbonating of spirits;
    (i) The blending in Puerto Rico of spirits with any liquors 
manufactured outside of Puerto Rico;
    (j) The production of gin by--
    (1) Redistillation over juniper berries and other natural aromatics, 
or the extracted oils of such, of spirits distilled at or above 190 
degrees of proof, free from impurities, including spirits of such a 
nature recovered by redistillation of imperfect gin spirits; and
    (2) Mixing gin with other spirits;
    (k) The treatment of gin by--
    (1) Addition or abstraction of any substance or material other than 
pure water after redistillation in a manner that would change its class 
and type designation; and
    (2) Addition of any substance or material other than juniper berries 
or other natural aromatics, or the extracted oils of such, or pure water 
to the spirits, before or during redistillation, in a manner that would 
change its class and type designation;
    (l) The production of vodka by--
    (1) Treatment of neutral spirits with not less than one ounce of 
activated carbon per 100 wine gallons of spirits;
    (2) Redistillation of pure spirits so as to be without distinctive 
character, aroma, taste, or color;
    (3) Mixing with other spirits or with any other substance or 
material except pure water, after production; and
    (m) The recovery of spirits by redistillation from distilled spirits 
products containing other alcoholic ingredients and from spirits which 
have previously been entered for deposit. However, no formula shall be 
required for spirits redistilled into any type of neutral spirits other 
than vodka or spirits redistilled at less than 190 degrees of proof 
which lack the taste, aroma and other characteristics generally 
attributed to whisky, brandy, rum, or gin, and are designated as 
``Spirits,'' preceded or followed by a word or phrase descriptive of the 
material from which produced. Such spirits redistilled on or after July 
1, 1972, may not be designated ``Spirits Grain'' or ``Grain Spirits.''

(26 U.S.C. 7805 (68A Stat. 917, as amended); 27 U.S.C. 205 (49 Stat. 
981, as amended))

[T.D. ATF-198, 50 FR 8463, Mar. 1, 1985, as amended by T.D. ATF-259, 52 
FR 41423, Oct. 28, 1987]



Sec. 5.28  Adoption of predecessor's formulas.

    The adoption by a successor of approved Forms 5110.38 (27-B 
Supplemental) shall be in the form of an application filed with the 
appropriate ATF officer. The application shall list the formulas for 
adoption by:
    (a) Formula number,
    (b) Name of product, and
    (c) Date of approval.

The application shall clearly show that the predecessor has authorized 
the use of his previously approved formulas by the successor.



         Subpart D--Labeling Requirements for Distilled Spirits



Sec. 5.31  General.

    (a) Application. No person engaged in business as a distiller, 
rectifier, importer, wholesaler, or warehouseman and bottler, directly 
or indirectly, or through an affiliate, shall sell or ship or deliver 
for sale or shipment or otherwise introduce in interstate or foreign 
commerce, or receive therein, or remove from customs custody, any 
distilled spirits in bottles, unless such bottles are marked, branded, 
labeled, or packaged, in conformity with Secs. 5.31 through 5.42.
    (b) Alteration of labels. It shall be unlawful for any person to 
alter, mutilate, destroy, obliterate, or remove any mark, brand, or 
label on distilled spirits held for sale in interstate or foreign 
commerce or after shipment therein, except:

[[Page 56]]

    (1) As authorized by Federal law;
    (2) When an additional labeling or relabeling of bottled distilled 
spirits is accomplished with labels covered by certificates of label 
approval which comply with the requirements of this part and with State 
law;
    (3) That there may be added to the bottle, after removal from 
customs custody, or prior to or after removal from bonded premises, 
without application for permission to relabel, a label identifying the 
wholesale or retail distributor thereof or identifying the purchaser or 
consumer, and containing no references whatever to the characteristics 
of the product.

(26 U.S.C. 7805 (68A Stat. 917, as amended); 27 U.S.C. 205 (49 Stat. 
981, as amended))

[T.D. 7020, 34 FR 20637, Dec. 30, 1969, as amended by T.D. ATF-62, 44 FR 
71621, Dec. 11, 1979; T.D. ATF-198, 50 FR 8464, Mar. 1, 1985]



Sec. 5.32  Mandatory label information.

    There shall be stated:
    (a) On the brand label:
    (1) Brand name.
    (2) Class and type, in accordance with Sec. 5.35.
    (3) Alcoholic content, in accordance with Sec. 5.37.
    (4) In the case of distilled spirits packaged in containers for 
which no standard of fill is prescribed in Sec. 5.47, net contents in 
accordance with Sec. 5.38(b) or Sec. 5.38a(b)(2).
    (b) On the brand label or on a back label:
    (1) Name and address, in accordance with Sec. 5.36.
    (2) In the case of imported spirits, the country of origin, in 
accordance with Sec. 5.36.
    (3) In the case of distilled spirits packaged in containers 
conforming to the standards of fill prescribed in Sec. 5.47 or 
Sec. 5.47a, net contents in accordance with Sec. 5.38(a), Sec. 5.38a(a), 
or Sec. 5.38a(b)(1).
    (4) Coloring or flavoring, in accordance with Sec. 5.39.
    (5) A statement that the product contains FD&C Yellow No. 5, where 
that coloring material is used in a product bottled on or after October 
6, 1984.
    (6) The following statement when saccharin is present in the 
finished product: Use of this product may be hazardous to your health. 
This product contains saccharin which has been determined to cause 
cancer in laboratory animals.
    (7) Declaration of sulfites. There shall be stated, the statement 
``Contains sulfites'' or ``Contains (a) sulfiting agent(s)'' or a 
statement identifying the specific sulfiting agent where sulfur dioxide 
or a sulfiting agent is detected at a level of 10 or more parts per 
million, measured as total sulfur dioxide. The sulfite declaration may 
appear on a strip label or neck label in lieu of appearing on the front 
or back label. The provisions of this paragraph shall apply to:
    (i) Any certificate of label approval issued on or after January 9, 
1987;
    (ii) Any distilled spirits bottled on or after July 9, 1987, 
regardless of the date of issuance of the certificate of label approval; 
and,
    (iii) Any distilled spirits removed on or after January 9, 1988.
    (8) Percentage of neutral spirits and name of commodity from which 
distilled, or in the case of continuously distilled neutral spirits or 
gin, the name of the commodity only, in accordance with Sec. 5.39.
    (9) A statement of age or age and percentage, when required, in 
accordance with Sec. 5.40.
    (10) State of distillation of domestic types of whisky and straight 
whisky, except light whisky and blends, in accordance with Sec. 5.36.
    (c) In the case of a container which has been excepted under the 
provisions of Sec. 5.46(d), the information required to appear on the 
``brand label,'' as defined, may appear elsewhere on such container if 
it can be demonstrated that the container cannot reasonably be so 
designed that the required brand label can be properly affixed.

(Paragraph (b)(7) approved by the Office of Management and Budget under 
Control No. 1512-0469)

[T.D. 7020, 34 FR 20337, Dec. 30, 1969, as amended by T.D. ATF-25, 41 FR 
10220, Mar. 10, 1976; 41 FR 11022, Mar. 16, 1976; T.D. ATF-94, 46 FR 
55096, Nov. 6, 1981; T.D. ATF-150, 48 FR 45556, Oct. 6, 1983; 48 FR 
46518, Oct. 13, 1983; T.D. ATF-220, 50 FR 51852, Dec. 20, 1985; T.D. 
ATF-236, 51 FR 34710, Sept. 30, 1986; T.D. ATF-282, 54 FR 7162, Feb. 16, 
1989; T.D. ATF-312, 56 FR 31077, July 9, 1991; T.D. ATF-344, 58 FR 
40354, July 28, 1993; T.D. ATF-425, 65 FR 11891, Mar. 7, 2000]

[[Page 57]]



Sec. 5.33  Additional requirements.

    (a) Contrasting background. Labels shall be so designed that the 
statements required by this subpart are readily legible under ordinary 
conditions, and such statements shall be on a contrasting background.
    (b) Location of statements and size of type. (1) Statements required 
by this subpart, except brand names, shall appear generally parallel to 
the base on which the bottle rests as it is designed to be displayed or 
shall be otherwise equally conspicuous.
    (2) Statements required by this subpart, except brand names and the 
declaration of sulfites in Sec. 5.32(b)(7), shall be separate and apart 
from any other descriptive or explanatory matters.
    (3) If not separate and apart from other descriptive or explanatory 
matter printed on the label, the statement declaring the presence of 
sulfites shall be of a size substantially more conspicuous than 
surrounding nonmandatory labeling information.
    (4) Statements of the type of distilled spirits shall be as 
conspicuous as the statement of the class to which it refers, and in 
direct conjunction therewith.
    (5) Statements required by this subpart, except brand names, shall 
be in script, type, or printing not smaller than 2 millimeters (or 8-
point gothic until January 1, 1983), except that, in the case of labels 
on bottles of 200 milliliters or less capacity, such script, type, or 
printing shall not be smaller than 1 millimeter (or 6-point gothic until 
January 1, 1983).
    (6) When net contents are stated either in metric measures or in 
both metric and U.S. fluid measures, statements required by the subpart, 
except brand names, shall be in script, type, or printing not smaller 
than 2 millimeters (or 8-point gothic until January 1, 1983), except 
that, in the case of labels on bottles of 200 milliliters or less 
capacity such script, type, or printing shall not be smaller than 1 
millimeter (or 6-point gothic until January 1, 1983).
    (c) English language. The requirements of this subpart shall be 
stated in the English language, except that the brand name need not be 
in English, and for products bottled for consumption within Puerto Rico 
the required information may be stated in the Spanish language if the 
net contents and, if the product is an imitation, the word ``imitation'' 
are also stated in the English language.
    (d) Location of label. Labels shall not obscure government stamps or 
be obscured thereby. Labels shall not obscure any markings or 
information required to be permanently marked in the bottle by other 
U.S. Treasury Department regulations.
    (e) Labels firmly affixed. Labels which are not an integral part of 
the bottle shall be affixed to bottles in such manner that they cannot 
be removed without thorough application of water or other solvents.
    (f) Additional information on labels. Labels may contain information 
other than the mandatory label information required by this subpart if 
the information does not conflict with, or in any manner qualify, 
statements required by this part.
    (g) Contents of bottles. A complete and accurate statement of the 
contents of the bottles to which labels are to be or have been affixed 
shall be submitted, on request, to the appropriate ATF officer.

[T.D. 7020, 34 FR 20337, Dec. 30, 1969, as amended by T.D. ATF-66, 45 FR 
40548, June 13, 1980; T.D. ATF-94, 46 FR 55096, Nov. 6, 1981; T.D. ATF-
236, 51 FR 34710, Sept. 30, 1986; T.D. ATF-425, 65 FR 11891, Mar. 7, 
2000]



Sec. 5.34  Brand names.

    (a) Misleading brand names. No label shall contain any brand name, 
which, standing alone, or in association with other printed or graphic 
matter, creates any impression or inference as to the age, origin, 
identity, or other characteristics of the product unless the appropriate 
ATF officer finds that such brand name (when appropriately qualified if 
required) conveys no erroneous impressions as to the age, origin, 
identity, or other characteristics of the product.
    (b) Trade name of foreign origin. Paragraph (a) of this section does 
not prohibit the use by any person of any trade name or brand of foreign 
origin not effectively registered in the U.S. Patent Office on August 
29, 1935, which has been used by such person or his

[[Page 58]]

predecessors in the United States for a period of at least 5 years 
immediately preceding August 29, 1935: Provided, That if such trade name 
or brand is used, the designation of the product shall be qualified by 
the name of the locality in the United States in which produced, and 
such qualification shall be in script, type, or printing as conspicuous 
as the trade name or brand.



Sec. 5.35  Class and type.

    (a) Designation of product. The class and type of distilled spirits 
shall be stated in conformity with Sec. 5.22 if defined therein. In all 
other instances the product shall be designated in accordance with trade 
and consumer understanding thereof, or, if no such understanding exists, 
by a distinctive or fanciful name, and in either case (except as 
provided in paragraph (b)(2) of this section) followed by a truthful and 
adequate statement of composition. The word ``cordial'' or ``liqueur'' 
need not be stated in the case of cordials and liqueurs unless the 
appropriate ATF officer finds such word is necessary to clearly indicate 
that the product is a cordial or liqueur.
    (b) Products designed in accordance with trade and consumer 
understanding. In the case of products designated in accordance with 
trade and consumer understanding:
    (1) A statement of the classes and types of distilled spirits used 
in the manufacture thereof shall be deemed a sufficient statement of 
composition in the case of highballs, cocktails, and similar prepared 
specialties when the designation adequately indicates to the consumer 
the general character of the product.
    (2) No statement of composition is required if the designation 
through general and established usage adequately indicates to the 
consumer the composition of the product.

A product shall not bear a designation which indicates it contains a 
class or type of distilled spirits unless the distilled spirits therein 
conform to such class and type.
    (c) Origin of whiskies in mixtures. In the case of any of the types 
of whisky defined in Sec. 5.22(b), Class 2, which contains any whisky or 
whiskies produced in a country other than that indicated by the type 
designation, there shall be stated on the brand label the percentage of 
such whisky and the country or origin thereof. In the case of mixtures 
of whisky, not conforming to any type designation in Sec. 5.22(b), Class 
2, the components of which were distilled in more than one country, 
there shall be stated in direct conjunction with the class designation 
``whisky'' a truthful and adequate statement of the composition of the 
product.
    (d) Whisky manufactured in Scotland, Ireland, or Canada. All whisky 
manufactured in Scotland, Ireland, or Canada, shall be deemed to be 
Scotch, Irish, or Canadian whisky, and shall be so designated, in 
conformity with Sec. 5.22(b) (7), (8), and (9), unless the application 
of such designation to the particular product will result in consumer 
deception, or unless such a product is not entitled to such designation 
under the laws of the country in which manufactured.
    (e) Cordials and liqueurs. The alcoholic components of cordails and 
liqueurs may, but need not, be stated on labels.



Sec. 5.36  Name and address.

    (a) ``Bottled by''. (1) On labels of domestic distilled spirits 
there shall be stated the phrase ``bottled by'', ``packed by'', or 
``filled by'', immediately followed by the name (or trade name) of the 
bottler and the place where such distilled spirits are bottled. If the 
bottler is the actual bona fide operator of more than one distilled 
spirits plant engaged in bottling operations, there may, in addition, be 
stated immediately following the name (or trade name) of such bottler 
the addresses of such other plants.
    (2) Where distilled spirits are bottled by or for the distiller 
thereof, there may be stated, in lieu of the phrase ``bottled by'', 
``packed by'', or ``filled by'', followed by the bottler's name (or 
trade name) and address, the phrase ``distilled by'', followed by the 
name, or the trade name under which the particular spirits were 
distilled, or (except in the case of distilled spirits labeled as 
bottled in bond) any trade name shown on the distiller's permit 
(covering the premises where the particular

[[Page 59]]

spirits were distilled), and the address (or addresses) of the 
distiller.
    (3) Where ``straight whiskies'' of the same type which have been 
produced in the same State by two or more different distillers are 
combined (either at time of bottling or at a warehouseman's bonded 
premises for further storage) and subsequently bottled and labeled as 
``straight whisky,'' such ``straight whisky'' shall be labeled in 
accordance with the requirements of paragraph (a)(1) of this section. 
Where such ``straight whisky'' is bottled by or for the distillers 
thereof, there may be stated on the label, in lieu of the requirements 
of paragraph (a)(1) of this section, the phraise ``distilled by,'' 
followed by the names (or trade names) of the different distillers who 
distilled a portion of the ``straight whisky,'' the addresses of the 
distilleries where the ``straight whisky'' was distilled, and the 
percentage of ``straight whisky'' distilled by each distiller (with a 
tolerance of plus or minus 2 percent). In the case where ``straight 
whisky'' is made up of a mixture of ``straight whiskies'' of the same 
type from two or more different distilleries of the same proprietor 
located within the same State, and where the ``straight whisky'' is 
bottled by or for the proprietor thereof, such ``straight whisky'' may 
be labeled, in lieu of the requirements of paragraph (a)(1) of the this 
section, with the phrase ``distilled by'' followed by the name (or trade 
name) of the proprietor and the addresses of the different distilleries 
which distilled a portion of the ``straight whisky.''
    (4) Where distilled spirits are bottled by or for the rectifier 
thereof, there may be stated, in lieu of the phrase ``bottled by'', 
``packed by'', or ``filled by'', followed by the bottler's name (or 
trade name) and address, the phrases ``blended by'', ``made by'', 
``prepared by'', ``manufactured by'', or ``produced by'' (whichever may 
be appropriate to the act of rectification involved) followed by the 
name (or trade name), and the address (or addresses) of the rectifier.
    (5) In addition to the requirements of paragraphs (a)(1) and (a)(2) 
of this paragraph, the labels of bottled in bond spirits shall bear the 
real name of the distillery or the trade name under which the distillery 
produced and warehoused the spirits, the number of the plant in which 
produced and the number of the plant in which bottled.
    (6) The label may state the address of the proprietor's principal 
place of business in lieu of the place where the bottling, distilling or 
rectification operation occurred, if the address where the operation 
occurred is indicated by printing, coding, or other markings, on the 
label or on the bottle.
    (b) ``Imported by''. (1) On labels of imported distilled spirits, 
bottled prior to importation, there shall be stated the words ``imported 
by'', ``imported exclusively by'', or a similar appropriate phrase, and 
immediately thereafter the name of the importer, or exclusive agent, or 
sole distributor, or other person responsible for the importation, 
together with the principal place of business in the United States of 
such person.
    (2) On labels of imported distilled spirits bottled after 
importation there shall be stated:
    (i) The name of the bottler and place where bottled, immediately 
preceded by the words ``bottled by'', ``packed by'', or ``filled by''; 
or
    (ii) The name of the bottler and place where bottled, immediately 
preceded by the words ``bottled by'', ``packed by'', or ``filled by'' 
and in conjunction therewith the name and address of the person 
responsible for the importation, in the manner prescribed in paragraph 
(b)(1) of this section; or
    (iii) The name and principal place of business in the United States 
of the person responsible for the importation, if the spirits are 
bottled for such person, immediately preceded by the phrase ``imported 
by and bottled (packed), (filled) in the United States for'' (or a 
similar appropriate phrase); or,
    (iv) In the case of imported distilled spirits bottled after 
importation by the person responsible for the importation, the words 
``imported and bottled (packed), (filled) by'', ``imported and bottled 
(packed), (filled) exclusively by'', or a similar appropriate phrase, 
and immediately thereafter the name of such person and the address of 
the place where bottled or the address of

[[Page 60]]

such person's principal place of business.
    (c) Post office address. The ``place'' stated shall be the post 
office address, except that the street address may be omitted. No 
additional places or addresses shall be stated for the same person, firm 
or corporation, unless (1) such person or retailer is actively engaged 
in the conduct of an additional bona fide and actual alcoholic beverage 
business at such additional place or address, and (2) the label also 
contains in direct conjunction therewith, appropriate descriptive 
material indicating the function occurring at such additional place or 
address.
    (d) State of distillation. Except in the case of ``light whisky'', 
``blended light whisky'', ``blended whisky'', ``a blend of straight 
whiskies'', or ``spirit whisky'', the State of distillation shall be 
shown on the label of any whisky produced in the United States if the 
whisky is not distilled in the State given in the address on the brand 
label. The appropriate ATF officer may, however, require the State of 
distillation to be shown on the label or he may permit such other 
labeling as may be necessary to negate any misleading or deceptive 
impression which might be created as to the actual State of 
distillation. In the case of ``light whisky'', as defined in 
Sec. 5.22(b)(3), the State of distillation shall not appear in any 
manner on any label, when the appropriate ATF officer finds such State 
is associated by consumers with an American type whisky, except as a 
part of a name and address as set forth in paragraph (a) of this 
section.
    (e) Country of origin. On labels of imported distilled spirits there 
shall be stated the country of origin in substantially the following 
form ``Product of ------------'', the blank to be filled in with the 
name of the country of origin.
    (f) Trade names. The trade name of any permittee appearing on any 
label must be identical to the trade name listed on the permittee's 
basic permit.

(26 U.S.C. 7805 (68A Stat. 917, as amended); 27 U.S.C. 205 (49 Stat. 
981, as amended))

[T.D. 7020, 34 FR 20637, Dec. 30, 1969, as amended by T.D. ATF-62, 44 FR 
71621, Dec. 11, 1979; T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; T.D. ATF-
259, 52 FR 41423, Oct. 28, 1987; T.D. ATF-260, 52 FR 42101, Nov. 3, 
1987; T.D. ATF-425, 65 FR 11891, Mar. 7, 2000]



Sec. 5.37  Alcohol content.

    (a) Statements--(1) Mandatory statement. The alcohol content for 
distilled spirits shall be stated in percent-alcohol-by-volume. Products 
such as ``Rock and Rye. or similar products containing a significant 
amount of solid material shall state the alcohol content at the time of 
bottling as follows: ``Bottled at ------ percent-alcohol-by-volume.''
    (2) Optional statement. In addition, the label may also state the 
alcohol content in degrees of proof if this information appears in 
direct conjunction (i.e. with no intervening material) with the 
statement expressed in percent-alcohol-by-volume. If both forms of 
alcohol content are shown, the optional statement in degrees of proof 
shall be placed in parentheses, in brackets, or otherwise distinguished 
from the mandatory statement in percent-alcohol-by-by-volume to 
emphasize the fact that both expressions of alcohol content mean the 
same thing.
    (b) Tolerances. The following tolerances shall be allowed (without 
affecting the labeled statement of alcohol content) for losses of 
alcohol content occurring during bottling:
    (1) Not to exceed 0.25 percent alcohol by volume for spirits 
containing solids in excess of 600 mg per 100 ml; or
    (2) Not to exceed 0.25 percent alcohol by volume for any spirits 
product bottled in 50 or 100 ml size bottles; or

[[Page 61]]

    (3) Not to exceed 0.15 percent alcohol by volume for all other 
spirits.

(Approved by the Office of Management and Budget under Control Number 
1512-0482)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1394, as amended (26 U.S.C. 
5301(a)); 49 Stat. 917, as amended (27 U.S.C. 205(e))

[T.D. ATF-237, 51 FR 36394, Oct. 10, 1986, as amended by T.D. ATF-288, 
54 FR 47769, Nov. 17, 1989]



Sec. 5.38  Net contents.

    (a) Bottles conforming to metric standards of fill. The net contents 
of distilled spirits shall be stated in the same manner and form as set 
forth in the standards of fill in Sec. 5.47a.
    (b) Bottles not conforming to the metric standards of fill. The net 
contents for distilled spirits bottled before January 1, 1980, in 
bottles not conforming to the metric standards of fill, shall be stated 
in the same manner and form as set forth in Sec. 5.47(a), except for 
cordials and liqueurs, cocktails, highballs, bitters and specialties, as 
specified by the Director. The net contents for these specialty products 
shall be stated in U.S. measure (i.e., gallons, quarts, pints, fluid 
ounces).
    (c) Net contents marked in bottles. The net contents need not be 
marked on any lable if they are legibly blown, etched, sandblasted, 
marked by underglaze coloring, or otherwise permanently marked by any 
method approved by the appropriate ATF officer on the side, front, or 
back of the container in an unobscured location. containers of 200 ml or 
greater capacity shall bear letters and figures of not less than one-
quarter inch height.
    (d) Qualifying statements. Words or phrases qualifying statements of 
net contents are prohibited.

(Sec. 5, 49 Stat. 981, as amended (27 U.S.C. 205); 26 U.S.C. 5301)

[T.D. ATF-146, 48 FR 43321, Sept. 23, 1983, as amended by T.D. ATF-249, 
52 FR 5956, Feb. 27, 1987]



Sec. 5.39  Presence of neutral spirits and coloring, flavoring, and blending materials.

    (a) Neutral spirits and name of commodity. (1) In the case of 
distilled spirits (other than cordials, liqueurs, and specialties) 
produced by blending or rectification, if neutral spirits have been used 
in the production thereof, there shall be stated the percentage of 
neutral spirits so used and the name of the commodity from which such 
neutral spirits have been distilled. The statement of percentage and the 
name of the commodity shall be made in substantially the following form: 
``--------% neutral spirits distilled from -------------- (insert grain, 
cane products, or fruit as appropriate)''; or ``--------% neutral 
spirits (vodka) distilled from -------------- (insert grain, cane 
products, or fruit, as appropriate)''; or ``--------% grain (cane 
products), (fruit) neutral spirits'', or ``--------% grain spirits.''
    (2) In the case of neutral spirits or of gin produced by a process 
of continuous distillation, there shall be stated the name of the 
commodity from which such neutral spirits or gin have been distilled. 
The statement of the name of the commodity shall be made in 
substantially the following form: ``Distilled from grain'', or 
``Distilled from cane products'', or ``Distilled from fruit''.
    (b) Coloring materials. The words ``artifically colored'' shall be 
stated on the label of any distilled spirits containing synthetic or 
natural materials which primarily contribute color, or when the label 
conveys the impression that the color is derived from a source other 
than the actual source, except that:
    (1) If no coloring material other than natural flavoring material 
has been added, there may be stated in lieu of the words ``artificially 
colored'' a truthful and adequate statement of the source of the color;
    (2) If no coloring material other than those certified as suitable 
for use in foods by the Food and Drug Administration has been added, 
there may be stated in lieu of the words ``artificially colored,'' the 
words ``certified color added''; and
    (3) If no coloring material other than caramel has been added, there 
may be stated in lieu of the words ``artificially colored,'' the words 
``colored with caramel,'' or a substantially similar statement, but no 
such statement is required for the use of caramel in brandy,

[[Page 62]]

rum, or tequila, or in any type of whisky other than straight whisky.
    (c) Treatment with wood. The words ``colored and flavored with wood 
------ (insert chips, slabs, etc., as appropriate)'' shall be stated as 
a part of the class and type designation for whisky and brandy treated, 
in whole or in part, with wood through percolation, or otherwise, during 
distillation or storage, other than through contact with the oak 
container. Provided, that the above statement shall not apply to brandy 
treated with an infusion of oak chip in accordance with Sec. 5.23(a).

[T.D. 720, 34 FR 20637, Dec. 30, 1969, as amended by T.D. ATF-94, 46 FR 
55097, Nov. 6, 1981; T.D. ATF-292, 55 FR 1065, Jan. 11, 1990]



Sec. 5.40  Statements of age and percentage.

    (a) Statements of age and percentage for whisky. In the case of 
straight whisky bottled in conformity with the bottled in bond labeling 
requirements and of domestic or foreign whisky, whether or not mixed or 
blended, all of which is 4 years old or more, statements of age and 
percentage are optional. As to all other whiskies there shall be stated 
the following:
    (1) In the case of whisky, whether or not mixed or blended but 
containing no neutral spirits, the age of the youngest whisky. The age 
statement shall read substantially as follows: ``------ years old.''
    (2) In the case of whisky, containing neutral spirits, if any of the 
straight whisky and/or other whisky is less than 4 years old, the 
percentage by volume of straight whisky and/or other whisky, and the age 
of the straight whisky (the youngest if two or more) and the age of such 
other whisky (the youngest if two or more). If all the straight whisky 
and/or other whisky is 4 years or more old, the age and percentage 
statement for such whiskies is optional. The age and percentage 
statement for straight whiskies and/or other whisky, whether required or 
optional, shall be stated in immediate conjunction with the neutral 
spirits statement required by Sec. 5.39, and shall read substantially as 
follows:
    (i) If only one straight whisky and no other whisky is contained in 
the blend: ``---- percent straight whisky ---- years old.''
    (ii) If more than one straight whisky and no other whisky is 
contained in the blend: ``---- percent straight whiskies ---- years or 
more old.'' The age blank shall be filled in with the age of the 
youngest straight whisky. In lieu of the foregoing, a statement may be 
made of the ages and percentages of each of the straight whiskies 
contained in the blend: ``---- percent straight whisky ---- years old, 
---- percent straight whisky ---- years old, and ---- percent straight 
whisky ---- years old.''
    (iii) If only one straight whisky and one other whisky is contained 
in the blend: ``---- percent straight whisky ---- years old, ---- 
percent whisky ---- years old.''
    (iv) If more than one straight whisky and more than one other whisky 
is contained in the blend: ``---- percent straight whiskies ---- years 
or more old, ---- percent whiskies ---- years or more old.'' The age 
blanks shall be filled in with the ages of the youngest straight whisky 
and the youngest other whisky. In lieu of the foregoing, a statement may 
be made of the ages and percentages of each of the straight whiskies and 
other whiskies contained in the blend: ``---- percent straight whisky --
-- years old, ---- percent straight whisky ---- years old, ---- percent 
whisky ---- years old, and ---- percent whisky ---- years old.''
    (3) In the case of imported whiskies described in Sec. 5.22(l), 
Class 12, the labels shall state the ages and percentages in the same 
manner and form as is required for the same type of whisky produced in 
the United States.
    (4) Notwithstanding the foregoing provisions of this paragraph, in 
the case of whisky produced in the United States and stored in reused 
oak containers, except for corn whisky, and for light whisky produced on 
or after January 26, 1968, there shall be stated in lieu of the words 
``---- years old'' the period of storage in reused oak containers as 
follows: ``---- stored ---- years in reused cooperage.''
    (5) Optional age statements shall appear in the same form as 
required age statements.

[[Page 63]]

    (b) Statements of age for rum, brandy, and Tequila. Age may, but 
need not, be stated on labels of rums, brandies, and Tequila, except 
that an appropriate statement with respect to age shall appear on the 
brand label in case of brandy (other than immature brandies and fruit 
brandies which are not customarily stored in oak containers) not stored 
in oak containers for a period of at least 2 years. If age is stated, it 
shall be substantially as follows: ``---- years old''; the blank to be 
filled in with the age of the youngest distilled spirits in the product.
    (c) Statement of storage for grain spirits. In case of grain 
spirits, the period of storage in oak containers may be stated in 
immediate conjunction with the required percentage statement; for 
example, ``----% grain spirits stored ---- years in oak containers.''
    (d) Other distilled spirits. Age, maturity, or similar statements or 
representations as to neutral spirits (except for grain spirits as 
stated in paragraph (c) of this section), gin, liqueurs, cordials, 
cocktails, highballs, bitters, flavored brandy, flavored gin, flavored 
rum, flavored vodka, flavored whisky, and specialties are misleading and 
are prohibited from being stated on any label.
    (e) Miscellaneous age representations. (1) Age may be understated 
but shall not be overstated.
    (2) If any age, maturity, or similar representation is made relative 
to any distilled spirits (such representations for products enumerated 
in paragraph (d) of this section are prohibited), the age shall also be 
stated on all labels where such representation appears, and in a manner 
substantially as conspicuous as such representation: Provided. That the 
use of the word ``old'' or other word denoting age, as part of the brand 
name, shall not be deemed to be an age representation: And provided 
further, That the labels of whiskies and brandies (except immature 
brandies) not required to bear a statement of age, and rum and Tequila 
aged for not less than 4 years, may contain general inconspicuous age, 
maturity or similar representations without the label bearing an age 
statement.

(26 U.S.C. 7805 (68A Stat. 917, as amended); 27 U.S.C. 205 (49 Stat. 
981, as amended))

[T.D. 7020, 34 FR 20637, Dec. 30, 1969, as amended by T.D. ATF-62, 44 FR 
71621, Dec. 11, 1979; T.D. ATF-198, 50 FR 8464, Mar. 1, 1985]



Sec. 5.41  Bottle cartons, booklets and leaflets.

    (a) General. An individual covering, carton, or other container of 
the bottle used for sale at retail (other than a shipping container), or 
any written, printed, graphic, or other matter accompanying the bottle 
to the consumer buyer shall not contain any statement, design, device, 
or graphic, pictorial, or emblematic representation that is prohibited 
by Secs. 5.31 through 5.42 on labels.
    (b) Sealed opaque cartons. If bottles are enclosed in sealed opaque 
coverings, cartons, or other containers used for sale at retail (other 
than shipping containers), such coverings, cartons, or other containers 
must bear all mandatory label information.
    (c) Other cartons. (1) If an individual covering, carton, or other 
container of the bottle used for sale at retail (other than a shipping 
container) is so designed that the bottle is readily removable, it may 
display any information which is not in conflict with the label on the 
bottle contained therein.
    (2) Cartons displaying brand names and/or designations must display 
such names and designations in their entirety--brand names required to 
be modified, e.g. by ``Brand'' or ``Product of U.S.A.'', must also 
display such modification.
    (3) Specialty products for which a truthful and adequate statement 
of composition is required must display such statement.

[T.D. 7020, 34 FR 20337, Dec. 30, 1969, as amended by T.D. ATF-36, 41 FR 
47426, Oct. 29, 1976]



Sec. 5.42  Prohibited practices.

    (a) Statements on labels. Bottles containing distilled spirits, or 
any labels on such bottles, or any individual covering, carton, or other 
container of

[[Page 64]]

such bottles used for sale at retail, or any written, printed, graphic, 
or other matter accompanying such bottles to the consumer shall not 
contain:
    (1) Any statement that is false or untrue in any particular, or 
that, irrespective of falsity, directly, or by ambiguity, omission, or 
inference, or by the addition of irrelevant, scientific or technical 
matter, tends to create a misleading impression.
    (2) Any statement that is disparaging of a competitor's product.
    (3) Any statement, design, device, or representation which is 
obscene or indecent.
    (4) Any statement, design, device, or representation of or relating 
to analyses, standards, or tests, irrespective of falsity, which the 
appropriate ATF officer finds to be likely to mislead the consumer.
    (5) Any statement, design, device, or representation of or relating 
to any guarantee, irrespective of falsity, which the appropriate ATF 
officer finds to be likely to mislead the consumer. Money-back 
guarantees are not prohibited.
    (6) A trade or brand name that is the name of any living individual 
of public prominence, or existing private or public organization, or is 
a name that is in simulation or is an abbreviation thereof, or any 
graphic, pictorial, or emblematic representation of any such individual 
or organization, if the use of such name or representation is likely to 
falsely lead the consumer to believe that the product has been endorsed, 
made, or used by, or produced for, or under the supervision of, or in 
accordance with the specifications of, such individual or organization: 
Provided, That this paragraph shall not apply to the use of the name of 
any person engaged in business as a distiller, rectifier, blender, or 
other producer, or as an importer, wholesaler, retailer, bottler, or 
warehouseman, of distilled spirits, nor to the use by any person of a 
trade or brand name that is the name of any living individual of public 
prominence or existing private or public organization, provided such 
trade or brand name was used by him or his predecessors in interest 
prior to August 29, 1935.
    (b) Miscellaneous. (1) Labels shall not be of such design as to 
resemble or simulate a stamp of the U.S. Government or any State or 
foreign government. Labels, other than stamps authorized or required by 
this or any other government, shall not state or indicate that the 
distilled spirits are distilled, blended, made, bottled, or sold under, 
or in accordance with, any municipal, State, Federal, or foreign 
authorization, law, or regulations, unless such statement is required or 
specifically authorized by Federal, State, municipal, or foreign law or 
regulations. The statements authorized by this part to appear on labels 
for domestic distilled spirits are ``Distilled (produced, barreled, 
warehoused, blended, or bottled, or any combination thereof, as the case 
may be) under United States (U.S.) Government supervision'', or in the 
case of distilled spirits labeled as bottled in bond, ``Bottled in bond 
under United States (U.S.) Government supervision''. If the municipal, 
State, or Federal Government permit number is stated on a label, it 
shall not be accompanied by any additional statement relating thereto.
    (2) If imported distilled spirits are covered by a certificate of 
origin or of age issued by a duly authorized official of the appropriate 
foreign government, the label, except where prohibited by the foreign 
government, may refer to such certificate or the fact of such 
certification, but shall not be accompanied by any additional statement 
relating thereto. The reference to such certificate or certification 
shall, in the case of Cognac, be substantially in the following form: 
``This product accompanied at the time of importation by an `Acquit 
Regional Jaune d'Or' issued by the French Government, indicating that 
this grape brandy was distilled in the Cognac Region of France''; and in 
the case of other distilled spirits, substantially in the following 
form: ``This product accompanied at time of importation by a certificate 
issued by the ---- government (name of government) indicating that the 
product is ---- (class and type as required to be stated on the label), 
and (if label claims age) that none of the distilled spirits are of an 
age less than stated on this label.''

[[Page 65]]

    (3) The words ``bond'', ``bonded'', ``bottled in bond'', ``aged in 
bond'', or phrases containing these or synonymous terms, shall not be 
used on any label or as part of the brand name of domestic distilled 
spirits unless the distilled spirits are:
    (i) Composed of the same kind of spirits produced from the same 
class of materials;
    (ii) Produced in the same distilling season by the same distiller at 
the same distillery;
    (iii) Stored for at least four years in wooden containers wherein 
the spirits have been in contact with the wood surface except for gin 
and vodka which must be stored for at least four years in wooden 
containers coated or lined with paraffin or other substance which will 
preclude contact of the spirits with the wood surface;
    (iv) Unaltered from their original condition or character by the 
addition or subtraction of any substance other than by filtration, chill 
proofing, or other physical treatments (which do not involve the 
addition of any substance which will remain incorporated in the finished 
product or result in a change in class or type);
    (v) Reduced in proof by the addition of pure water only to 100 
degrees of proof; and
    (vi) Bottles at 100 degrees of proof.

In addition to the requirements of Sec. 5.36(a) (1) or (2), the label 
shall bear the real name of the distillery or the trade name under which 
the distillery produced and warehoused the spirits, and the plant (or 
registered distillery) number in which produced; and the plant number in 
which bottled. The label may also bear the name or trade name of the 
bottler.
    (4) The words ``bond'', ``bonded'', ``bottled in bond'', ``aged in 
bond'', or phrases containing these or synonymous terms, shall not be 
used on any label or as part of the brand name of imported distilled 
spirits unless the distilled spirits meet in all respects the 
requirements applicable to distilled spirits bottled for domestic 
consumption, so labeled, and unless the laws and regulations of the 
country in which such distilled spirits are produced authorize the 
bottling of distilled spirits in bond and require or specifically 
authorize such distilled spirits to be so labeled. All spirits labeled 
as ``bonded'', ``bottled in bond'', or ``aged in bond'' pursuant to the 
provisions of this paragraph shall bear in direct conjunction with such 
statement and in script, type, or printing substantially as conspicuous 
as that used on such statement, the name of the country under whose laws 
and regulations such distilled spirits were so bottled.
    (5) The word ``pure'' shall not be stated upon labels unless:
    (i) It refers to a particular ingredient used in the production of 
the distilled spirits, and is a truthful representation about that 
ingredient; or
    (ii) It is part of the bona fide name of a permittee or retailer for 
whom the distilled spirits are bottled; or
    (iii) It is part of the bona fide name of the permittee who bottled 
the distilled spirits.
    (6) Distilled spirits shall not be labeled as ``double distilled'' 
or ''triple distilled'' or any similar term unless it is a truthful 
statement of fact; except that ``double distilled'' or ``triple 
distilled'' shall not be permitted on labels of distilled spirits 
produced by the redistillation method when a second or third 
distillation step is a necessary distillation process for the production 
of the product.
    (7) Labels shall not contain any statement, design, device, or 
pictorial representation which the appropriate ATF officer finds relates 
to, or is capable of being construed as relating to, the armed forces of 
the United States, or the American flag, or any emblem, seal, insignia, 
or decoration associated with such flag or armed forces; nor shall any 
label contain any statement, design, device, or pictorial representation 
of or concerning any flag, seal, coat of arms, crest or other insignia, 
likely to mislead the consumer to believe that the product has been 
endorsed, made, or used by, or produced for, or under the supervision 
of, or in accordance with the specifications of the government, 
organization, family, or individual with whom such flag, seal, coat of 
arms, crest, or insignia is associated.
    (8) Curative and therapeutic claims. Labels shall not contain any 
statement, design, representation, pictorial

[[Page 66]]

representation, or device representing that the use of distilled spirits 
has curative or therapeutic effects if such statement is untrue in any 
particular or tends to create a misleading impression.

(26 U.S.C. 7805 (68A Stat. 917, as amended); 27 U.S.C. 205 (49 Stat. 
981, as amended))

[T.D. 7020, 34 FR 20637, Dec. 30, 1969, as amended by T.D. ATF-62, 44 FR 
71621, Dec. 11, 1979; T.D. ATF-180, 49 FR 31673, Aug. 8, 1984; 49 FR 
35768. Sept. 12, 1984; T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 
23410, June 4, 1985]



       Subpart E--Standards of Fill for Bottled Distilled Spirits



Sec. 5.45  Application.

    No person engaged in business as a distiller, rectifier, importer, 
wholesaler, or warehouseman and bottler, directly or indirectly, or 
through an affiliate, shall sell or ship or deliver for sale or 
shipment, or otherwise introduce in interstate or foreign commerce, or 
receive therein or remove from customs custody any distilled spirits in 
bottles unless such distilled spirits are bottled and packed in 
conformity with Secs. 5.46 through 5.47a.

(Sec. 5, 49 Stat. 981, as amended (27 U.S.C. 205); 26 U.S.C. 5301)

[T.D. ATF-25, 41 FR 10221, Mar. 10, 1976; T.D. ATF-146, 48 FR 43321, 
Sept. 23, 1983]



Sec. 5.46  Standard liquor bottles.

    (a) General. A standard liquor bottle shall be one so made and 
formed, and so filled, as not to mislead the purchaser. An individual 
carton or other container of a bottle shall not be so designed as to 
mislead purchasers as to the size of the bottles.
    (b) Headspace. A liquor bottle of a capacity of 200 milliliters or 
more shall be held to be so filled as to mislead the purchaser if it has 
a headspace in excess of 8 percent of the total capacity of the bottle 
after closure.
    (c) Design. A liquor bottle shall be held (irrespective of the 
correctness of the stated net contents) to be so made and formed as to 
mislead the purchaser, if its actual capacity is substantially less than 
the capacity it appears to have upon visual examination under ordinary 
conditions of purchase or use.
    (d) Exceptions--(1) Distinctive liquor bottles. The headspace and 
design requirements in paragraphs (b) and (c) of this section do not 
apply to liquor bottles that are specifically exempted by the 
appropriate ATF oficer, pursuant to an application filed by the bottler 
or importer.
    (2) Cross reference. For procedures regarding the issuance, denial 
and revocation of distinctive liquor bottle approvals, as well as appeal 
procedures, see part 13 of this chapter.

(Sec. 5, 49 Stat. 981, as amended (27 U.S.C. 205); 26 U.S.C. 5301)

[T.D. 7020, 34 FR 20337, Dec. 30, 1969, as amended by T.D. ATF-25, 41 FR 
10221, Mar. 10, 1976; 41 FR 11022, Mar. 16, 1976; T.D. ATF-62, 44 FR 
71622, Dec. 11, 1979; T.D. ATF-146, 48 FR 43321, Sept. 23, 1983; T.D. 
ATF-406, 64 FR 2129, Jan. 13, 1999]



Sec. 5.47  Standards of fill (distilled spirits bottled before January 1, 1980).

    (a) Authorized standards of fill. The standards of fill for all 
distilled spirits, whether domestically bottled, or imported, subject to 
the tolerances allowed in this section, shall be as follows:

1 gallon.                             \4/5\ pint.
\1/2\ gallon.                         \1/2\ pint.
1 quart.                              \1/8\ pint.
\4/5\ quart.                          \1/10\ pint.
1 pint.                               \1/16\ pint (brandy only).
 

    (b) Tolerances. The following tolerances shall be allowed:
    (1) Discrepancies due to errors in measuring which occur in filling 
conducted in compliance with good commercial practice.
    (2) Discrepancies due to differences in the capacity of bottles, 
resulting solely from unavoidable difficulties in manufacturing such 
bottles to a uniform capacity: Provided, That no greater tolerance shall 
be allowed in case of bottles which, because of their design, cannot be 
made of approximately uniform capacity than is allowed in case of 
bottles which can be manufactured so as to be of approximately uniform 
capacity.
    (3) Discrepancies in measure due to differences in atmospheric 
conditions in various places and which unavoidably result from the 
ordinary and customary exposure of alcoholic beverages

[[Page 67]]

in bottles to evaporation. The reasonableness of discrepancies under 
this paragraph shall be determined on the facts in each case.
    (c) Unreasonable shortages. Unreasonable shortages in certain of the 
bottles in any shipment shall not be compensated by overages in other 
bottles in the same shipment.
    (d) Limitations. This section does not apply after December 31, 
1979.

(Sec. 5, 49 Stat. 981, as amended (27 U.S.C. 205); 26 U.S.C. 5301)

[T.D. 7020, 34 FR 20337, Dec. 30, 1969, as amended by T.D. ATF-25, 41 FR 
10221, Mar. 10, 1976; T.D. ATF-146, 48 FR 43321, Sept. 23, 1983]



Sec. 5.47a  Metric standards of fill (distilled spirits bottled after December 31, 1979).

    (a) Authorized standards of fill. The standards of fill for 
distilled spirits are the following:
    (1) For containers other than cans described in paragraph (a)(2), of 
this section--

1.75 liters
1.00 liter
750 milliliters
500 milliliters (Authorized for bottling until June 30, 1989)
375 milliliters
200 milliliters
100 milliliters
50 milliliters

    (2) For metal containers which have the general shape and design of 
a can, which have a closure which is an integral part of the container, 
and which cannot be readily reclosed after opening--

355 milliliters
200 milliliters
100 milliliters
50 milliliters

    (b) Tolerances. The following tolerances shall be allowed:
    (1) Discrepancies due to errors in measuring which occur in filling 
conducted in compliance with good commercial practice.
    (2) Discrepancies due to differences in the capacity of bottles, 
resulting solely from unavoidable difficulties in manufacturing such 
bottles to a uniform capacity: Provided, That no greater tolerance shall 
be allowed in case of bottles which, because of their design, cannot be 
made of approximately uniform capacity than is allowed in case of 
bottles which can be manufactured so as to be of approximately uniform 
capacity.
    (3) Discrepancies in measure due to differences in atmospheric 
conditions in various places and which unavoidably result from the 
ordinary and customary exposure of alcoholic beverages in bottles to 
evaporation. The reasonableness of discrepancies under this paragraph 
shall be determined on the facts in each case.
    (c) Unreasonable shortages. Unreasonable shortages in certain of the 
bottles in any shipment shall not be compensated by overages in other 
bottles in the same shipment.
    (d) Distilled spirits bottled before January 1, 1980. Distilled 
spirits bottled domestically before January 1, 1980, may be marketed 
after December 31, 1979, if such distilled spirits were bottled in 
accordance with Sec. 5.47. (See Sec. 5.53 for similar provisions 
relating to distilled spirits imported in original containers.)

(Sec. 5, 49 Stat. 981, as amended (27 U.S.C. 203); 26 U.S.C. 5301)

[T.D. ATF-25, 41 FR 10221, Mar. 10, 1976, as amended at 41 FR 11022, 
Mar. 16, 1976; 41 FR 11497, Mar. 19, 1976; T.D. ATF-35, 41 FR 46859, 
Oct. 26, 1976; T.D. ATF-62, 44 FR 71622, Dec. 11, 1979; T.D. ATF-146, 48 
FR 43321, Sept. 23, 1983; T.D. ATF-228, 51 FR 16170, May 1, 1986; T.D. 
ATF-326, 57 FR 31128, July 14, 1992]



 Subpart F--Requirements for Withdrawal From Customs Custody of Bottled 
                       Imported Distilled Spirits



Sec. 5.51  Label approval and release.

    (a) Certificate of label approval. Bottled distilled spirits shall 
not be released from Customs custody for consumption unless there is 
deposited with the appropriate Customs officer at the port of entry the 
original or a photostatic copy of an approved certificate of label 
approval, ATF Form 5100.31.
    (b) Release. If the original or photostatic copy of ATF Form 5100.31 
has been approved, the brand or lot of distilled spirits bearing labels 
identical with those shown thereon may be released from U.S. Customs 
custody.

[[Page 68]]

    (c) Relabeling. Imported distilled spirits in U.S. Customs custody 
which are not labeled in conformity with certificates of label approval 
issued by the appropriate ATF officer must be relabeled prior to release 
under the supervision of the Customs officers of the port at which the 
spirits are located.
    (d) Statements of process. ATF Forms 5100.31 covering labels for gin 
bearing the word ``distilled'' as a part of the designation shall be 
accompanied by a statement prepared by the manufacturer, setting forth a 
step-by-step description of the manufacturing process.
    (e) Cross reference. For procedures regarding the issuance, denial, 
and revocation of certificates of label approval, as well as appeal 
procedures, see part 13 of this chapter.

[T.D. ATF-66, 45 FR 40549, June 13, 1980, as amended by T.D. ATF-94, 46 
FR 55097, Nov. 6, 1981; T.D. ATF-242, 51 FR 39525, Oct. 29, 1986; T.D. 
ATF-359, 59 FR 42160, Aug. 17, 1994; T.D. ATF-406, 64 FR 2129, Jan. 13, 
1999]



Sec. 5.52  Certificates of age and origin.

    (a) Scotch, Irish, and Canadian whiskies. Scotch, Irish, and 
Canadian whiskies, imported in bottles, shall not be released from 
customs custody for consumption unless the invoice is accompanied by a 
certificate of origin issued by a duly authorized official of the 
British, Irish, or Canadian Government, certifying (1) that the 
particular distilled spirits are Scotch, Irish, or Canadian whisky, as 
the case may be, (2) that the distilled spirits have been manufactured 
in compliance with the laws of the respective foreign governments 
regulating the manufacture of whisky for home consumption, and (3) that 
the product conforms to the requirements of the Immature Spirits Act of 
such foreign governments for spirits intended for home consumption. In 
addition, a duly authorized official of the appropriate foreign 
government must certify to the age of the youngest distilled spirits in 
the bottle. The age certified shall be the period during which, after 
distillation and before bottling, the distilled spirits have been stored 
in oak containers.
    (b) Brandy, Cognac, and rum. Brandy (other than fruit brandies of a 
type not customarily stored in oak containers) or Cognac, imported in 
bottles, shall not be released from customs custody for consumption 
unless accompanied by a certificate issued by a duly authorized official 
of the appropriate foreign country certifying that the age of the 
youngest brandy or Cognac in the bottle is not less than 2 years, or if 
age is stated on the label that none of the distilled spirits are of an 
age less than that stated. If the label of any rum, imported in bottles, 
contains any statement of age, the rum shall not be released from 
customs custody for consumption unless accompanied by a certificate 
issued by a duly authorized official of the appropriate foreign country, 
certifying to the age of the youngest rum in the bottle. The age 
certified shall be the period during which, after distillation and 
before bottling, the distilled spirits have been stored in oak 
containers. If the label of any fruit brandy, not stored in oak 
containers, bears any statement of storage in other type containers, the 
brandy must be accompanied by a certificate issued by a duly authorized 
official of the appropriate foreign government certifying to such 
storage. Cognac, imported in bottles, shall not be released from customs 
custody for consumption unless the invoice is accompanied by a 
certificate issued by a duly authorized official of the French 
Government, certifying that the product is grape brandy distilled in the 
Cognac region of France and entitled to be designated as ``Cognac'' by 
the laws and regulations of the French Government.
    (c) Tequila. (1) Tequila, imported in bottles, shall not be released 
from customs custody for consumption unless a certificate of a duly 
authorized official of the Mexican Government that the product is 
entitled to be designated as Tequila under the applicable laws and 
regulations of the Mexican Government is filed with the application for 
release.
    (2) If the label of any Tequila imported in bottles, contains any 
statement of age, the Tequila shall not be released from customs custody 
for consumption unless a certificate of a duly authorized official of 
the Mexican Government as to the age of the youngest Tequila in the 
bottle is filed with the application for release. The age certified 
shall be the period during which

[[Page 69]]

the Tequila has been stored in oak containers after distillation and 
before bottling.
    (d) Other whiskies. Whisky, as defined in Sec. 5.22(b) (1), (4), 
(5), and (6), imported in bottles, shall not be released from customs 
custody for consumption unless accompanied by a certificate issued by a 
duly authorized official of the appropriate foreign government 
certifying:
    (1) In the case of whisky, whether or not mixed or blended but 
containing no neutral spirits, (i) the class and type thereof, (ii) the 
American proof at which produced, (iii) that no neutral spirits (or 
other whisky in the case of straight whisky) has been added as a part 
thereof or included therein, whether or not for the purpose of replacing 
outage, (iv) the age of the whisky, and (v) the type of oak container in 
which such age was acquired (whether new or reused; also whether charred 
or uncharred);
    (2) In the case of whisky containing neutral spirits, (i) the class 
and type thereof, (ii) the percentage of straight whisky, if any, used 
in the blend, (iii) the American proof at which the straight whisky was 
produced, (iv) the percentage of other whisky, if any, in the blend, (v) 
the percentage of neutral spirits in the blend, and the name of the 
commodity from which distilled, (vi) the age of the straight whisky and 
the age of the other whisky in the blend, and (vii) the type of oak 
containers in which such age or ages were acquired (whether new or 
reused; also whether charred or uncharred).
    (e) Miscellaneous. Distilled spirits (other than Scotch, Irish, and 
Canadian whiskies, and Cognac) in bottles shall not be released from 
customs custody for consumption unless the invoice is accompanied by a 
certificate of origin issued by a duly authorized official of the 
appropriate foreign government, if the issuance of such certificates 
with respect to such distilled spirits has been authorized by the 
foreign government concerned, certifying as to the identity of the 
distilled spirits and that the distilled spirits have been manufactured 
in compliance with the laws of the respective foreign government 
regulating the manufacture of such distilled spirits for home 
consumption.

[T.D. 7020, 34 FR 20337, Dec. 30, 1969, as amended by T.D. ATF-7, 38 FR 
33471, Dec. 5, 1973]



Sec. 5.53  Certificate of nonstandard fill.

    (a) Distilled spirits imported in original containers not conforming 
to the metric standards of fill prescribed in Sec. 5.47a shall not be 
released from Customs custody after December 31, 1979:
    (1) Unless the distilled spirits are accompanied by a statement 
signed by a duly authorized official of the appropriate foreign country, 
stating that the distilled spirits were bottled or packed prior to 
January 1, 1980; or
    (2) Unless the distilled spirits are being withdrawn from a Customs 
bonded warehouse or foreign trade zone into which entered on or before 
December 31, 1979.
    (b) Distilled spirits imported in 500 ml containers shall not be 
released from Customs custody after June 30, 1989:
    (1) Unless the distilled spirits are accompanied by a certificate 
issued by the government of the appropriate foreign country, stating 
that the distilled spirits were bottled or packed prior to July 1, 1989; 
or
    (2) Unless the distilled spirits are being withdrawn from a Customs 
bonded warehouse or foreign trade zone into which entered on or before 
June 30, 1989.

[T.D. ATF-25, 41 FR 10222, Mar. 10, 1976, as amended by T.D. ATF-228, 51 
FR 16170, May 1, 1986]



 Subpart G--Requirements for Approval of Labels of Domestically Bottled 
                            Distilled Spirits



Sec. 5.55  Certificates of label approval.

    (a) Requirement. Distilled spirits shall not be bottled or removed 
from a plant, except as provided in paragraph (b) of this section, 
unless the proprietor possesses a certificate of label approval, ATF 
Form 5100.31, covering the labels on the bottle, issued by the 
appropriate ATF officer pursuant to application on such form. 
Application for certificates of label approval covering labels for

[[Page 70]]

imported gin bearing the word ``distilled'' as a part of the designation 
shall be accompanied by a statement prepared by the manufacturer setting 
forth a step-by-step description of the manufacturing process.
    (b) Exemption. Any bottler of distilled spirits shall be exempt from 
the requirements in paragraph (a) of this section and Sec. 5.56 if the 
bottler possesses a certificate of exemption from label approval, ATF 
Form 5100.31, issued by the appropriate ATF officer pursuant to 
application on that Form showing that the distilled spirits to be 
bottled are not to be sold, offered for sale, or shipped or delivered 
for shipment, or otherwise introduced into interstate or foreign 
commerce.
    (c) Miscellaneous. Photoprints or other reproductions of 
certificates of label approval, or certificates of exemption are not 
acceptable as substitutes for an original or duplicate original (issued, 
on request, by the appropriate ATF officer) of a certificate. The 
original or duplicate original of such certificates shall, on demand, be 
exhibited to an authorized officer of the U.S. Government.
    (d) Cross reference. For procedures regarding the issuance, denial, 
and revocation of certificates of label approval and certificates of 
exemption from label approval, as well as appeal procedures, see part 13 
of this chapter.

[T.D. ATF-66, 45 FR 40550, June 13, 1980, as amended by T.D. ATF-94, 46 
FR 55097, Nov. 6, 1981; T.D. ATF-242, 51 FR 39525, Oct. 29, 1986; T.D. 
ATF-406, 64 FR 2129, Jan. 13, 1999]



Sec. 5.56  Certificates of age and origin.

    Distilled spirits imported in bulk for bottling in the United States 
shall not be removed from the plant where bottled unless the bottler 
possesses certificates of age and certificates of origin applicable to 
such spirits which are similar to the certificates required by Sec. 5.52 
for like distilled spirits imported in bottles.



               Subpart H--Advertising of Distilled Spirits



Sec. 5.61  Application.

    No person engaged in business as a distiller, rectifier, importer, 
wholesaler, or warehouseman and bottler of distilled spirits, directly 
or indirectly or through an affiliate, shall publish or disseminate or 
cause to be published or disseminated by radio or television broadcast, 
or in any newspaper, periodical, or any publication, by any sign or 
outdoor advertisement, or any other printed or graphic matter, any 
advertisement of distilled spirits, if such advertising is in, or is 
calculated to induce sales in, interstate or foreign commerce, or is 
disseminated by mail, unless such advertisement is in conformity with 
Secs. 5.61 through 5.66 of this part. Provided, that such sections shall 
not apply to outdoor advertising in place on (effective date of this 
treasury decision), but shall apply upon replacement, restoration, or 
renovation of any such advertising; and provided further, that such 
sections shall not apply to a retailer or the publisher of any 
newspaper, periodical, or other publication, or radio or television 
broadcast, unless such retailer or publisher or radio or television 
broadcaster is engaged in business as a distiller, rectifier, importer, 
wholesaler, or warehouseman and bottler of distilled spirits, directly 
or indirectly, or through an affiliate.

[T.D. ATF-180, 49 FR 31673, Aug. 8, 1984]



Sec. 5.62  Definition.

    As used in Secs. 5.61 through 5.66 of this part, the term 
``advertisement'' includes any written or verbal statement, 
illlustration, or depiction which is in, or calculated to induce sales 
in, interstate or foreign commerce, or is disseminated by mail, whether 
it appears in a newspaper, magazine, trade booklet, menu, wine card, 
leaflet, circular, mailer, book insert, catalog, promotional material, 
sales pamphlet, or in any written, printed, graphic, or other matter 
accompanying the bottle, representations made on cases or in any 
billboard, sign, other outdoor display, public transit card, other 
periodical literature, publication, or in a radio or television 
broadcast, or in any other media; except that such term shall not 
include:
    (a) Any label affixed to any bottle of distilled spirits; or any 
individual covering, carton, or other container of the bottle which 
constitute a part of the labeling under Secs. 5.31 through 5.42 of this 
part.

[[Page 71]]

    (b) Any editorial or other reading material (i.e., news release) in 
any periodical or publication or newspaper for the publication of which 
no money or valuable consideration is paid or promised, directly or 
indirectly, by any permittee, and which is not written by or at the 
direction of the permittee.

[T.D. ATF-180, 49 FR 31673, Aug. 8, 1984]



Sec. 5.63  Mandatory statements.

    (a) Responsible advertiser. The advertisement shall state the name 
and address of the permittee responsible for its publication or 
broadcast. Street number and name may be omitted in the address.
    (b) Class and type. The advertisement shall contain a conspicuous 
statement of the class to which the product belongs and the type thereof 
corresponding with the statement of class and type which is required to 
appear on the label of the product.
    (c) Alcohol content--(1) Mandatory statement. The alcohol content 
for distilled spirits shall be stated in percent-alcohol-by-volume. 
Products such as ``Rock and Rye'' or similar products containing a 
significant amount of solid material shall state the alcohol content at 
the time of bottling as follows: ``Bottled at ------ percent-alcohol-by-
volume.''
    (2) Optional statement. In addition, the advertisement may also 
state the alcohol content in degrees of proof if this information 
appears in direct conjunction (i.e. with no intervening material) with 
the statement expressed in percent-alcohol-by-volume. If both forms of 
alcohol content are shown, the optional statement in degrees of proof 
shall be placed in parentheses, in brackets, or otherwise distinguished 
from the mandatory statement in percent-alcohol-by-volume to emphasize 
the fact that both expressions of alcohol content mean the same thing.
    (d) Percentage of neutral spirits and name of commodity. (1) In the 
case of distilled spirits (other than cordials, liqueurs, and 
specialties) produced by blending or rectification, if neutral spirits 
have been used in the production thereof, there shall be stated the 
percentage of neutral spirits so used and the name of the commodity from 
which such neutral spirits have been distilled. The statement of 
percentage and the name of the commodity shall be made in substantially 
the following form: ``----% neutral spirits distilled from -------- 
(insert grain, cane products, or fruit, as appropriate)''; or ----% 
neutral spirits (vodka) distilled from -------- (insert grain, cane 
product, or fruit, as appropriate)''; or ``----% grain (cane products), 
(fruit) neutral spirits''; or ``----% grain spirits''.
    (2) In the case of neutral spirits or of gin produced by a process 
of continuous distillation, there shall be stated the name of the 
commodity from which such neutral spirits or gin has been distilled. The 
statement of the name of the commodity shall be made in substantially 
the following form: ``Distilled from grain'', or ``Distilled from cane 
products'', or ``Distilled from fruit.''
    (e) Exception. (1) If an advertisement refers to a general distilled 
spirits line or all of the distilled spirits products of one company, 
whether by the company name or by the brand name common to all the 
distilled spirits in the line, the only mandatory information necessary 
is the name and address of the responsible advertiser. This exception 
does not apply where only one type of distilled spirits is marketed 
under the specific brand name advertised.
    (2) On consumer specialty items, the only information necessary is 
the company name or brand name of the product.

[T.D. 7020, 34 FR 20337, Dec. 30, 1969, as amended by T.D. ATF-180, 49 
FR 31674, Aug. 8, 1984; T.D. ATF-237, 51 FR 36394, Oct. 10, 1986]



Sec. 5.64  Legibility of mandatory information.

    (a) Statements required under Secs. 5.61 through 5.66 of this part 
to appear in any written, printed, or graphic advertisement shall be in 
lettering or type size sufficient to be conspicuous and readily legible.
    (b) In the case of signs, billboards, and displays the name and 
address of the permittee responsible for the advertisement may appear in 
type size of lettering smaller than the other mandatory information, 
provided such information can be ascertained upon

[[Page 72]]

closer examination of the sign or billboard.
    (c) Mandatory information shall be so stated as to be clearly a part 
of the advertisement and shall not be separated in any manner from the 
remainder of the advertisement.
    (d) Manadatory information for two or more products shall not be 
stated unless clearly separated.
    (e) Mandatory information shall be so stated in both the print and 
audio-visual media that it will be readily apparent to the persons 
viewing the advertisement.

[T.D. ATF-180, 49 FR 31674, Aug. 8, 1984]



Sec. 5.65  Prohibited practices.

    (a) Restrictions. An advertisement of distilled spirits shall not 
contain:
    (1) Any statement that is false or untrue in any material 
particular, or that, irrespective of falsity, directly, or by ambiguity, 
omission, or inference, or by the addition of irrelevant, scientific or 
technical matter tends to create a misleading impression.
    (2) Any statement that is disparaging of a competitor's product.
    (3) Any statement, design, device, or representation which is 
obscene or indecent.
    (4) Any statement, design, device, or representation of or relating 
to analyses, standards or tests, irrespective of falsity, which the 
appropriate ATF officer finds to be likely to mislead the consumer.
    (5) Any statement, design, device, or representation of or relating 
to any guarantee, irrespective of falsity, which the appropriate ATF 
officer finds to be likely to mislead the consumer. Money-back 
guarantees are not prohibited.
    (6) Any statement that the distilled spirits are distilled, blended, 
made, bottled, or sold under or in accordance with any municipal, State, 
Federal, or foreign authorization, law, or regulation, unless such 
statement appears in the manner authorized by Sec. 5.42 for labels of 
distilled spirits. If a municipal, State or Federal permit number is 
stated, such permit number shall not be accompanied by any additional 
statement relating thereto.
    (7) The words ``bond'', ``bonded'', ``bottled in bond'', ``aged in 
bond'', or phrases containing these or synonymous terms, unless such 
words or phrases appear, pursuant to Sec. 5.42, on labels of the 
distilled spirits advertised, and are stated in the advertisement in the 
manner and form in which they are permitted to appear on the label.
    (8) The word ``pure'' unless:
    (i) It refers to a particular ingredient used in the production of 
the distilled spirits, and is a truthful representation about the 
ingredient; or
    (ii) It is part of the bona fide name of a permittee or retailer 
from whom the distilled spirits are bottled; or
    (iii) It is part of the bona fide name of the permittee who bottled 
the distilled spirits.
    (9) The words ``double distilled'' or ``triple distilled'' or any 
similar terms unless it is a truthful statement of fact; except that 
``double distilled'' or ``triple distilled'' shall not be permitted in 
advertisements of distilled spirits produced by the redistillation 
method when a second or third distillation step is a necessary 
distillation process for the production of the product.
    (b) Statements inconsistent with labeling. (1) Advertisements shall 
not contain any statement concerning a brand or lot of distilled spirits 
that is inconsistent with any statement on the labeling thereof.
    (2) Any label depicted on a bottle in an advertisement shall be a 
reproduction of an approved label.
    (c) Statement of age. The advertisement shall not contain any 
statement, design, or device directly or by implication concerning age 
or maturity of any brand or lot of distilled spirits unless a statement 
of age appears on the label of the advertised product. When any such 
statement, design, or device concerning age or maturity is contained in 
any advertisement, it shall include (in direct conjunction therewith and 
with substantially equal conspicuousness) all parts of the statement, if 
any, concerning age and percentages required to be made on the label 
under the provisions of Secs. 5.31 through 5.42. An advertisement for 
any whisky or brandy (except immature brandies) which is not required to 
bear a statement of age on the label or an

[[Page 73]]

advertisement for any rum or Tequila, which has been aged for not less 
than 4 years may, however, contain inconspicuous, general representation 
as to age, maturity or other similar representations even though a 
specific age statement does not appear on the label of the advertised 
product and in the advertisement itself.
    (d) Curative and therapeutic claims. Advertisements shall not 
contain any statement, design, representation, pictorial representation, 
or device representing that the use of distilled spirits has curative or 
therapeutic effects if such statement is untrue in any particular or 
tends to create a misleading impression.
    (e) Place of origin. The advertisement shall not represent that the 
distilled spirits were manufactured in or imported from a place or 
country other than that of their actual origin, or were produced or 
processed by one who was not in fact the actual producer or processor.
    (f) Confusion of brands. Two or more different brands or lots of 
distilled spirits shall not be advertised in one advertisement (or in 
two or more advertisements in one issue of a periodical or newspaper, or 
in one piece of other written, printed, or graphic matter) if the 
advertisement tends to create the impression that representations made 
as to one brand or lot apply to the other or others, and if as to such 
latter the representations contravene any provisions of this subpart or 
are in any respect untrue.
    (g) Flags, seals, coats of arms, crests, and other insignia. An 
advertisement shall not contain any statement, design, device, or 
pictorial representation which the appropriate ATF officer finds relates 
to, or is capable of being construed as relating to the armed forces of 
the United States, or the American flag, or any emblem, seal, insignia, 
or decoration associated with such flag or armed forces; nor shall any 
advertisement contain any statement, design, device, or pictorial 
representation of or concerning any flag, seal, coat of arms, crest, or 
other insignia, likely to mislead the consumer to believe that the 
product has been endorsed, made, or used by, or produced for, or under 
the supervision of, or in accordance with the specifications of the 
government, organization, family, or individual with whom such flag, 
seal, coat of arms, crest, or insignia is associated.
    (h) Deceptive advertising techniques. Subliminal or similar 
techniques are prohibited. ``Subliminal or similar techniques,'' as used 
in this part, refers to any device or technique that is used to convey, 
or attempts to convey, a message to a person by means of images or 
sounds of a very brief nature that cannot be perceived at a normal level 
of awareness.

[T.D. 7020, 34 FR 20337, Dec. 30, 1969, as amended by T.D. ATF-180, 49 
FR 31674, Aug. 8, 1984]



Sec. 5.66  Comparative advertising.

    (a) General. Comparative advertising shall not be disparaging of a 
competitor's product.
    (b) Taste tests. (1) Taste test results may be used in 
advertisements comparing competitors' products unless they are 
disparaging, deceptive, or likely to mislead the consumer.
    (2) The taste test procedure used shall meet scientifically accepted 
procedures. An example of a scientifically accepted procedure is 
outlined in the Manual on Sensory Testing Methods, ASTM Special 
Technical Publication 434, published by the American Society for Testing 
and Materials, 1916 Race Street, Philadelphia, Pennsylvania 19103, ASTM, 
1968, Library of Congress Catalog Card Number 68-15545.
    (3) A statement shall appear in the advertisement providing the name 
and address of the testing administrator.

[T.D. ATF-180, 49 FR 31674, Aug. 8, 1984]



PART 6--``TIED-HOUSE''--Table of Contents




                     Subpart A--Scope of Regulations

Sec.
6.1  General.
6.2  Territorial extent.
6.3  Application.
6.4  Jurisdictional limits.
6.5  Delegations of the Director.
6.6  Administrative provisions.

                         Subpart B--Definitions

6.11  Meaning of terms.

[[Page 74]]

                     Subpart C--Unlawful Inducements

                                 General

6.21  Application.

                       Interest in Retail License

6.25  General.
6.26  Indirect interest.
6.27  Proprietary interest.

                       Interest in Retail Property

6.31  General.
6.32  Indirect interest.
6.33  Proprietary interest.
6.34  Mortgages.
6.35  Renting display space.

                       Furnishing Things of Value

6.41  General.
6.42  Indirect inducement through third party arrangements.
6.43  Sale of equipment.
6.44  Free warehousing.
6.45  Assistance in acquiring license.
6.46-6.47  [Reserved]

         Paying for Advertising, Display or Distribution Service

6.51  General.
6.52  Cooperative advertising.
6.53  Advertising in ballparks, racetracks, and stadiums.
6.54  Advertising in retailer publications.
6.55  Display service.
6.56  Renting display space.

                           Guaranteeing Loans

6.61  Guaranteeing loans.

                           Extension of Credit

6.65  General.
6.66  Calculation of period.
6.67  Sales to retailer whose account is in arrears.

                               Quota Sales

6.71  Quota sales.
6.72  ``Tie-in'' sales.

                          Subpart D--Exceptions

6.81  General.
6.82  [Reserved]
6.83  Product displays.
6.84  Point of sale advertising materials and consumer advertising 
          specialties.
6.85  Temporary retailers.
6.86-6.87  [Reserved]
6.88  Equipment and supplies.
6.89-6.90  [Reserved]
6.91  Samples.
6.92  Newspaper cuts.
6.93  Combination packaging.
6.94  Educational seminars.
6.95  Consumer tasting or sampling at retail establishments.
6.96  Consumer promotions.
6.97  [Reserved]
6.98  Advertising service.
6.99  Stocking, rotation, and pricing service.
6.100  Participation in retailer association activities.
6.101  Merchandise.
6.102  Outside signs.

                          Subpart E--Exclusion

6.151  Exclusion, in general.
6.152  Practices which put retailer independence at risk.
6.153  Criteria for determining retailer independence.

    Authority: 15 U.S.C. 49-50; 27 U.S.C. 202 and 205; 44 U.S.C. 
3504(h).

    Source: T.D. ATF-74, 45 FR 63251, Sept. 23, 1980, unless otherwise 
noted.



                     Subpart A--Scope of Regulations



Sec. 6.1  General.

    The regulations in this part, issued pursuant to section 105 of the 
Federal Alcohol Administration Act (27 U.S.C. 205), specify practices 
that are means to induce under section 105(b) of the Act, criteria for 
determining whether a practice is a violation of section 105(b) of the 
Act, and exceptions to section 105(b) of the Act. This part does not 
attempt to enumerate all of the practices that may result in a violation 
of section 105(b) of the Act. Nothing in this part shall operate to 
exempt any person from the requirements of any State law or regulation.

[T.D. ATF-364, 60 FR 20421, Apr. 26, 1995]



Sec. 6.2  Territorial extent.

    This part applies to the several States of the United States, the 
District of Columbia, and Puerto Rico.



Sec. 6.3  Application.

    (a) General. This part applies only to transactions between industry 
members and retailers. It does not apply to transactions between two 
industry members (for example, between a producer and a wholesaler), or 
to transactions between an industry member and a retailer wholly owned 
by that industry member.
    (b) Transaction involving State agencies. The regulations in this 
part apply

[[Page 75]]

only to transactions between industry members and State agencies 
operating as retailers as defined in this part. The regulations do not 
apply to State agencies with regard to their wholesale dealings with 
retailers.



Sec. 6.4  Jurisdictional limits.

    (a) General. The regulations in this part apply where:
    (1) The industry member induces a retailer to purchase distilled 
spirits, wine, or malt beverages from such industry member to the 
exclusion in whole or in part of products sold or offered for sale by 
other persons in interstate or foreign commerce; and
    (2) If: (i) The inducement is made in the course of interstate or 
foreign commerce; or
    (ii) The industry member engages in the practice of using an 
inducement to such an extent as substantially to restrain or prevent 
transactions in interstate or foreign commerce in any such products; or
    (iii) The direct effect of the inducement is to prevent, deter, 
hinder or restrict other persons from selling or offering for sale any 
such products to such retailer in interstate or foreign commerce.
    (b) Malt beverages. In the case of malt beverages, this part applies 
to transactions between a retailer in any State and a brewer, importer, 
or wholesaler of malt beverages inside or outside such State only to the 
extent that the law of such State imposes requirements similar to the 
requirements of section 105(b) of the Federal Alcohol Administration Act 
(27 U.S.C. 205(b)), with respect to similar transactions between a 
retailer in such State and a brewer, importer, or wholesaler or malt 
beverage in such State, as the case may be.

[T.D. ATF-74, 45 FR 63251, Sept. 23, 1980, as amended by T.D. ATF-364, 
60 FR 20421, Apr. 26, 1995]



Sec. 6.5  Delegations of the Director.

    Most of the regulatory authorities of the Director contained in this 
part 6 are delegated to appropriate ATF officers. These ATF officers are 
specified in ATF Order 1130.7, Delegation Order--Delegation of the 
Director's Authorities in 27 CFR Parts 6, 8, 10 and 11. ATF delegation 
orders, such as ATF Order 1130.7, are available to any interested person 
by mailing a request to the ATF Distribution Center, P.O. Box 5950, 
Springfield, Virginia 22150-5190, or by accessing the ATF web site 
(http://www.atf.treas.gov/).

[T.D. ATF-428, 65 FR 52019, Aug. 28, 2000]



Sec. 6.6  Administrative provisions.

    (a) General. The Act makes applicable the provisions including 
penalties of sections 49 and 50 of Title 15, United States Code, to the 
jurisdiction, powers and duties of the Director under this Act, and to 
any person (whether or not a corporation) subject to the provisions of 
law administered by the Director under this Act. The Act also provides 
that the Director is authorized to require, in such manner and such form 
as he or she shall prescribe, such reports as are necessary to carry out 
the powers and duties under this chapter.
    (b) Examination and subpoena. Any appropriate ATF officer shall at 
all reasonable times have access to, for the purpose of examination, and 
the right to copy any documentary evidence of any person, partnership, 
or corporation being investigated or proceeded against. An appropriate 
ATF officer shall also have the power to require by subpoena the 
attendance and testimony of witnesses and the production of all such 
documentary evidence relating to any matter under investigation, upon a 
satisfactory showing the requested evidence may reasonably be expected 
to yield information relevant to any matter being investigated under the 
Act.
    (c) Reports required by the appropriate ATF officer--(1) General. 
The appropriate ATF officer may, as part of a trade practice 
investigation of an industry member, require such industry member to 
submit a written report containing information on sponsorships, 
advertisements, promotions, and other activities pertaining to its 
business subject to the Act conducted by, or on behalf of, or benefiting 
the industry member.
    (2) Preparation. The report will be prepared by the industry member 
in letter form, executed under the penalties of perjury, and will 
contain the

[[Page 76]]

information specified by the appropriate ATF officer. The period covered 
by the report will not exceed three years.
    (3) Filing. The report will be filed in accordance with the 
instructions of the appropriate ATF officer.

(Approved by the Office of Management and Budget under control number 
1512-0392)

[T.D. ATF-364, 60 FR 20421, Apr. 26, 1995. Redesignated and amended by 
T.D. ATF-428, 65 FR 52019, Aug. 28, 2000]



                         Subpart B--Definitions



Sec. 6.11  Meaning of terms.

    As used in this part, unless the context otherwise requires, terms 
have the meanings given in this section. Any other term defined in the 
Federal Alcohol Administration Act and used in this part shall have the 
meaning assigned to it by that Act.
    Act. The Federal Alcohol Administration Act.
    Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this part by ATF Order 
1130.7, Delegation Order--Delegation of the Director's Authorities in 27 
CFR Parts 6, 8, 10 and 11.
    Brand. For purposes of administering this part, the term ``brand'' 
refers to differences in the brand name of a product or in the nature of 
a product. Examples of different brands are products having a different 
brand name or class, type, or kind designation; appellation of origin 
(wine); vintage date (wine); age (distilled spirits); or percentage of 
alcohol. Differences in packaging such as difference in label design or 
color, or a different style, type or size of container are not 
considered different brands.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC.
    Equipment. All functional items such as tap boxes, glassware, 
pouring racks, and similar items used in the conduct of a retailer's 
business.
    Industry member. Any person engaged in business as a distiller, 
brewer, rectifier, blender, or other producer, or as an importer or 
wholesaler, of distilled spirits, wine or malt beverages, or as a 
bottler, or warehousemen and bottler, of distilled spirits; industry 
member does not include an agency of a State or political subdivision 
thereof, or an officer or employee of such agency.
    Product. Distilled spirits, wine or malt beverages, as defined in 
the Federal Alcohol Administration Act.
    Retail establishment. Any premises where distilled spirits, wine or 
malt beverages are sold or offered for sale to consumers, whether for 
consumption on or off the premises where sold.
    Retailer. Any person engaged in the sale of distilled spirits, wine 
or malt beverages to consumers. A wholesaler who makes incidental retail 
sales representing less than five percent of the wholesaler's total 
sales volume for the preceding two-month period shall not be considered 
a retailer with respect to such incidental sales.

[T.D. ATF-74, 45 FR 63251, Sept. 23, 1980, as amended by T.D. ATF-364, 
60 FR 20421, Apr. 26, 1995; T.D. ATF-428, 65 FR 52020, Aug. 28, 2000]



                     Subpart C--Unlawful Inducements

                                 General



Sec. 6.21  Application.

    Except as provided in subpart D, it is unlawful for any industry 
member to induce, directly or indirectly, any retailer to purchase any 
products from the industry member to the exclusion, in whole or in part, 
of such products sold or offered for sale by other persons in interstate 
or foreign commerce by any of the following means:
    (a) By acquiring or holding (after the expiration of any license 
held at the time the FAA Act was enacted) any interest in any license 
with respect to the premises of the retailer;
    (b) By acquiring any interest in the real or personal property 
owned, occupied, or used by the retailer in the conduct of his business;
    (c) By furnishing, giving, renting, lending, or selling to the 
retailer, any equipment, fixtures, signs, supplies, money, services or 
other thing of value, subject to the exceptions contained in subpart D;

[[Page 77]]

    (d) By paying or crediting the retailer for any advertising, 
display, or distribution service;
    (e) By guaranteeing any loan or the repayment of any financial 
obligation of the retailer;
    (f) By extending to the retailer credit for a period in excess of 
the credit period usual and customary to the industry for the particular 
class of transactions as prescribed in Sec. 6.65; or
    (g) By requiring the retailer to take and dispose of a certain quota 
of any such products.

                       Interest in Retail License



Sec. 6.25  General.

    The act by an industry member of acquiring or holding any interest 
in any license (State, county or municipal) with respect to the premises 
of a retailer constitutes a means to induce within the meaning of the 
Act.

[T.D. ATF-364, 60 FR 20421, Apr. 26, 1995]



Sec. 6.26  Indirect interest.

    Industry member interest in retail licenses includes any interest 
acquired by corporate officials, partners, employees or other 
representatives of the industry member. Any interest in a retail license 
acquired by a separate corporation in which the industry member or its 
officials, hold ownership or are otherwise affiliated, is an interest in 
a retail license.



Sec. 6.27  Proprietary interest.

    (a) Complete ownership. Outright ownership of a retail business by 
an industry member is not an interest which may result in a violation of 
section 105(b)(1) of the Act.
    (b) Partial ownership. Less than complete ownership of a retail 
business by an industry member constitutes an interest in a retail 
license within the meaning of the Act.

[T.D. ATF-74, 45 FR 63251, Sept. 23, 1980, as amended by T.D. ATF-364, 
60 FR 20421, Apr. 26, 1995]

                       Interest in Retail Property



Sec. 6.31  General.

    The act by an industry member of acquiring an interest in real or 
personal property owned, occupied, or used by the retailer in the 
conduct of business constitutes a means to induce within the meaning of 
the Act.

[T.D. ATF-364, 60 FR 20421, Apr. 26, 1995]



Sec. 6.32  Indirect interest.

    Industry member interest in retail property includes any interest 
acquired by corporate officials, partners, employees or other 
representatives of the industry member. Any interest in retail property 
acquired by a separate corporation in which the industry member or its 
officials, hold ownership or are otherwise affiliated, is an interest in 
retail property.



Sec. 6.33  Proprietary interest.

    (a) Complete ownership. Outright ownership of a retail business by 
an industry member is not an interest that may result in a violation of 
section 105(b)(2) of the Act.
    (b) Partial ownership. Less than complete ownership of a retail 
business by an industry member constitutes an interest in retail 
property within the meaning of the Act.

[ T.D. ATF-74, 45 FR 63251, Sept. 23, 1980, as amended by T.D. ATF-364, 
60 FR 20421, Apr. 26, 1995]



Sec. 6.34  Mortgages.

    The acquisition of a mortgage on a retailer's real or personal 
property by an industry member constitutes an interest in the retailer's 
property within the meaning of the Act.



Sec. 6.35  Renting display space.

    The renting of display space by an industry member at a retail 
establishment constitutes an interest in the retailer's property within 
the meaning of the Act.

                       Furnishing Things of Value



Sec. 6.41  General.

    Subject to the exceptions listed in subpart D, the act by an 
industry member of furnishing, giving, renting, lending, or selling any 
equipment, fixtures, signs, supplies, money, services, or other things 
of value to a retailer constitutes a means to induce within the meaning 
of the Act.

[T.D. ATF-364, 60 FR 20421, Apr. 26, 1995]

[[Page 78]]



Sec. 6.42  Indirect inducement through third party arrangements.

    (a) General. The furnishing, giving, renting, lending, or selling of 
equipment, fixtures, signs, supplies, money, services, or other thing of 
value by an industry member to a third party, where the benefits 
resulting from such things of value flow to individual retailers, is the 
indirect furnishing of a thing of value within the meaning of the Act. 
Indirect furnishing of a thing of value includes, but is not limited to, 
making payments for advertising to a retailer association or a display 
company where the resulting benefits flow to individual retailers.
    (b) Exceptions. An indirect inducement will not arise where the 
thing of value was furnished to a retailer by the third party without 
the knowledge or intent of the industry member, or the industry member 
did not reasonably foresee that the thing of value would have been 
furnished to a retailer. Things which may lawfully be furnished, given, 
rented, lent, or sold by industry members to retailers under subpart D 
may also be furnished directly by a third party to a retailer.

[T.D. ATF-364, 60 FR 20421, Apr. 26, 1995]



Sec. 6.43  Sale of equipment.

    A transaction in which equipment is sold to a retailer by an 
industry member, except as provided in Sec. 6.88, is the selling of 
equipment in within the meaning of the Act regardless of how sold. 
Further, the negotiation by an industry member of a special price to a 
retailer for equipment from an equipment company is the furnishing of a 
thing of value within the meaning of the Act.

[T.D. ATF-74, 45 FR 63251, Sept. 23, 1980, as amended by T.D. ATF-364, 
60 FR 20422, Apr. 26, 1995]



Sec. 6.44  Free warehousing.

    The furnishing of free warehousing by delaying delivery of distilled 
spirits, wine, or malt beverages beyond the time that payment for the 
product is received, or if a retailer is purchasing on credit, delaying 
final delivery of products beyond the close of the period of time for 
which credit is lawfully extended, is the furnishing of a service or 
thing of value within the meaning of the Act.



Sec. 6.45  Assistance in acquiring license.

    Any assistance (financial, legal, administrative or influential) 
given the retailer by an industry member in the retailer's acquisition 
of the retailer's license is the furnishing of a service or thing of 
value within the meaning of the Act.



Sec. 6.46-6.47  [Reserved]

         Paying for Advertising, Display or Distribution Service



Sec. 6.51  General.

    The act by an industry member of paying or crediting a retailer for 
any advertising, display, or distribution service constitutes a means to 
induce within the meaning of the Act, whether or not the advertising, 
display, or distribution service received by the industry member in 
these instances is commensurate with the amount paid therefor. This 
includes payments or credits to retailers that are merely 
reimbursements, in full or in part, for such services purchased by a 
retailer from a third party.

[T.D. ATF-364, 60 FR 20422, Apr. 26, 1995]



Sec. 6.52  Cooperative advertising.

    An arrangement in which an industry member participates with a 
retailer in paying for an advertisement placed by the retailer 
constitutes paying the retailer for advertising within the meaning of 
the Act.



Sec. 6.53  Advertising in ballparks, racetracks, and stadiums.

    The purchase, by an industry member, of advertising on signs, 
scoreboards, programs, scorecards, and the like at ballparks, racetracks 
or stadiums, from the retail concessionaire constitutes paying the 
retailer for an advertising service within the meaning of the Act.



Sec. 6.54  Advertising in retailer publications.

    The purchase, by an industry member, of advertising in a retailer 
publication for distribution to consumers or the general public 
constitutes paying

[[Page 79]]

the retailer for advertising within the meaning of the Act.



Sec. 6.55  Display service.

    Industry member reimbursements to retailers for setting up product 
or other displays constitutes paying the retailer for rendering a 
display service within the meaning of the Act.



Sec. 6.56  Renting display space.

    A promotion whereby an industry member rents display space at a 
retail establishment constitutes paying the retailer for rendering a 
display service within the meaning of the Act.

                           Guaranteeing Loans



Sec. 6.61  Guaranteeing loans.

    The act by an industry member of guaranteeing any loan or the 
repayment of any financial obligation of a retailer constitutes a means 
to induce within the meaning of the Act.

[T.D. ATF-364, 60 FR 20422, Apr. 26, 1995]

                           Extension of Credit



Sec. 6.65  General.

    Extension of credit by an industry member to a retailer for a period 
of time in excess of 30 days from the date of delivery constitutes a 
means to induce within the meaning of the Act.

[T.D. ATF-364, 60 FR 20422, Apr. 26, 1995]



Sec. 6.66  Calculation of period.

    For the purpose of this part, the period of credit is calculated as 
the time elapsing between the date of delivery of the product and the 
date of full legal discharge of the retailer, through the payment of 
cash or its equivalent, from all indebtedness arising from the 
transaction.



Sec. 6.67  Sales to retailer whose account is in arrears.

    An extension of credit (for product purchases) by an industry member 
to a retailer whose account is in arrears does not constitute a means to 
induce within the meaning of the Act so long as such retailer pays in 
advance or on delivery an amount equal to or greater than the value of 
each order, regardless of the manner in which the industry member 
applies the payment in its records.

[T.D. ATF-364, 60 FR 20422, Apr. 26, 1995]

                               Quota Sales



Sec. 6.71  Quota sales.

    The act by an industry member of requiring a retailer to take and 
dispose of any quota of distilled spirits, wine, or malt beverages 
constitutes a means to induce within the meaning of the Act.

[T.D. ATF-364, 60 FR 20422, Apr. 26, 1995]



Sec. 6.72  ``Tie-in'' sales.

    The act by an industry member of requiring that a retailer purchase 
one product (as defined in Sec. 6.11) in order to obtain another 
constitutes a means to induce within the meaning of the Act. This 
includes the requirement to take a minimum quantity of a product in 
standard packaging in order to obtain the same product in some type of 
premium package, i.e., a distinctive decanter, or wooden or tin box. 
This also includes combination sales if one or more products may be 
purchased only in combination with other products and not individually. 
However, an industry member is not precluded from selling two or more 
kinds or brands of products to a retailer at a special combination 
price, provided the retailer has the option of purchasing either product 
at the usual price, and the retailer is not required to purchase any 
product it does not want. See Sec. 6.93 for combination packaging of 
products plus non-alcoholic items.

[T.D. ATF-364, 60 FR 20422, Apr. 26, 1995]



                          Subpart D--Exceptions



Sec. 6.81  General.

    (a) Application. Section 105(b)(3) of the Act enumerates means to 
induce that may be unlawful under the subsection, subject to such 
exceptions as are prescribed in regulations, having due regard for 
public health, the quantity and value of articles involved, established 
trade customs not contrary to the public interest, and the purposes of 
that section. This subpart implements section 105(b)(3) of the Act and

[[Page 80]]

identifies the practices that are exceptions to section 105(b)(3) of the 
Act. An industry member may furnish a retailer equipment, inside signs, 
supplies, services, or other things of value, under the conditions and 
within the limitations prescribed in this subpart.
    (b) Recordkeeping Requirements. (1) Industry members shall keep and 
maintain records on the permit or brewery premises, for a three year 
period, of all items furnished to retailers under Secs. 6.83, 6.88, 
6.91, 6.96(a), and 6.100 and the commercial records required under 
Sec. 6.101. Commercial records or invoices may be used to satisfy this 
recordkeeping requirement if all required information is shown. These 
records shall show:
    (i) The name and address of the retailer receiving the item;
    (ii) The date furnished;
    (iii) The item furnished;
    (iv) The industry member's cost of the item furnished (determined by 
the manufacturer's invoice price); and
    (v) Charges to the retailer for any item.
    (2) Although no separate recordkeeping violation results, an 
industry member who fails to keep such records is not eligible for the 
exception claimed.

(Approved by the Office of Management and Budget under control number 
1512-0392)

[T.D. ATF-364, 60 FR 20422, Apr. 26, 1995]



Sec. 6.82  [Reserved]



Sec. 6.83  Product displays.

    (a) General. The act by an industry member of giving or selling 
product displays to a retailer does not constitute a means to induce 
within the meaning of section 105(b)(3) of the Act provided that the 
conditions prescribed in paragraph (c) of this section are met.
    (b) Definition. ``Product display'' means any wine racks, bins, 
barrels, casks, shelving, or similar items the primary function of which 
is to hold and display consumer products.
    (c) Conditions and limitations. (1) The total value of all product 
displays given or sold by an industry member under paragraph (a) of this 
section may not exceed $300 per brand at any one time in any one retail 
establishment. Industry members may not pool or combine dollar 
limitations in order to provide a retailer a product display valued in 
excess of $300 per brand. The value of a product display is the actual 
cost to the industry member who initially purchased it. Transportation 
and installation costs are excluded.
    (2) All product displays must bear conspicuous and substantial 
advertising matter on the product or the industry member which is 
permanently inscribed or securely affixed. The name and address of the 
retailer may appear on the product displays.
    (3) The giving or selling of such product displays may be 
conditioned upon the purchase of the distilled spirits, wine, or malt 
beverages advertised on those displays in a quantity necessary for the 
initial completion of such display. No other condition can be imposed by 
the industry member on the retailer in order for the retailer to receive 
or obtain the product display.

[T.D. ATF-364, 60 FR 20422, Apr. 26, 1995]



Sec. 6.84  Point of sale advertising materials and consumer advertising specialties.

    (a) General. The act by an industry member of giving or selling 
point of sale advertising materials and consumer advertising specialties 
to a retailer does not constitute a means to induce within the meaning 
of section 105(b)(3) of the Act provided that the conditions prescribed 
in paragraph (c) of this section are met.
    (b) Definitions--(1) Point of sale advertising materials are items 
designed to be used within a retail establishment to attract consumer 
attention to the products of the industry member. Such materials 
include, but are not limited to: posters, placards, designs, inside 
signs (electric, mechanical or otherwise), window decorations, trays, 
coasters, mats, menu cards, meal checks, paper napkins, foam scrapers, 
back bar mats, thermometers, clocks, calendars, and alcoholic beverage 
lists or menus.
    (2) Consumer advertising specialties are items that are designed to 
be carried away by the consumer, such as trading stamps, nonalcoholic 
mixers, pouring racks, ash trays, bottle or can openers, cork screws, 
shopping bags, matches,

[[Page 81]]

printed recipes, pamphlets, cards, leaflets, blotters, post cards, 
pencils, shirts, caps, and visors.
    (c) Conditions and limitations. (1) All point of sale advertising 
materials and consumer advertising specialties must bear conspicuous and 
substantial advertising matter about the product or the industry member 
which is permanently inscribed or securely affixed. The name and address 
of the retailer may appear on the point of sale advertising materials.
    (2) The industry member may not directly or indirectly pay or credit 
the retailer for using or distributing these materials or for any 
expense incidental to their use.

[T.D. ATF-364, 60 FR 20423, Apr. 26, 1995]



Sec. 6.85  Temporary retailers.

    (a) General. The furnishing of things of value to a temporary 
retailer does not constitute a means to induce within the meaning of 
section 105(b)(3) of the Act.
    (b) Definition. For purposes of administering this part, a temporary 
retailer is a dealer who is not engaged in business as a retailer for 
more than four consecutive days per event, and for not more than five 
events in a calendar year.

[T.D. ATF-364, 60 FR 20423, Apr. 26, 1995]



Secs. 6.86-6.87  [Reserved]



Sec. 6.88  Equipment and supplies.

    (a) General. The act by an industry member of selling equipment or 
supplies to a retailer does not constitute a means to induce within the 
meaning of section 105(b)(3) of the Act if the equipment or supplies are 
sold at a price not less than the cost to the industry member who 
initially purchased them, and if the price is collected within 30 days 
of the date of the sale. The act by an industry member of installing 
dispensing accessories at the retailer's establishment does not 
constitute a means to induce within the meaning of the Act as long as 
the retailer bears the cost of initial installation. The act by an 
industry member of furnishing, giving, or selling coil cleaning service 
to a retailer of distilled spirits, wine, or malt beverages does not 
constitute a means to induce within the meaning of section 105(b)(3) of 
the Act.
    (b) Definition. ``Equipment and supplies'' means glassware (or 
similar containers made of other material), dispensing accessories, 
carbon dioxide (and other gasses used in dispensing equipment) or ice. 
``Dispensing accessories'' include items such as standards, faucets, 
cold plates, rods, vents, taps, tap standards, hoses, washers, 
couplings, gas gauges, vent tongues, shanks, and check valves.

[T.D. ATF-364, 60 FR 20423, Apr. 26, 1995]



Secs. 6.89-6.90  [Reserved]



Sec. 6.91  Samples.

    The act by an industry member of furnishing or giving a sample of 
distilled spirits, wine, or malt beverages to a retailer who has not 
purchased the brand from that industry member within the last 12 months 
does not constitute a means to induce within the meaning of section 
105(b)(3) of the Act. For each retail establishment the industry member 
may give not more than 3 gallons of any brand of malt beverage, not more 
than 3 liters of any brand of wine, and not more than 3 liters of 
distilled spirits. If a particular product is not available in a size 
within the quantity limitations of this section, an industry member may 
furnish to a retailer the next larger size.

[T.D. ATF-364, 60 FR 20423, Apr. 26, 1995]



Sec. 6.92  Newspaper cuts.

    Newspaper cuts, mats, or engraved blocks for use in retailers' 
advertisements may be given or sold by an industry member to a retailer 
selling the industry member's products.

[T.D. ATF-364, 60 FR 20423, Apr. 26, 1995]



Sec. 6.93  Combination packaging.

    The act by an industry member of packaging and distributing 
distilled spirits, wine, or malt beverages in combination with other 
(non-alcoholic) items for sale to consumers does not constitute a means 
to induce within the meaning of section 105(b)(3) of the Act.

[T.D. ATF-364, 60 FR 20423, Apr. 26, 1995]

[[Page 82]]



Sec. 6.94  Educational seminars.

    An industry member may give or sponsor educational seminars for 
employees of retailers either at the industry member's premises or at 
the retail establishment. Examples would be seminars dealing with use of 
a retailer's equipment, training seminars for employees of retailers, or 
tours of industry member's plant premises. This section does not 
authorize an industry member to pay a retailer's expense in conjunction 
with an educational seminar (such as travel and lodging). This does not 
preclude providing nominal hospitality during the event.

[T.D. ATF-74, 45 FR 63251, Sept. 23, 1980, as amended by T.D. ATF-364, 
60 FR 20423, Apr. 26, 1995]



Sec. 6.95  Consumer tasting or sampling at retail establishments.

    An industry member may conduct tasting or sampling activities at a 
retail establishment. The industry member may purchase the products to 
be used from the retailer, but may not purchase them from the retailer 
for more than the ordinary retail price.



Sec. 6.96  Consumer promotions.

    (a) Coupons. The act by an industry member of furnishing to 
consumers coupons which are redeemable at a retail establishment does 
not constitute a means to induce within the meaning of section 105(b)(3) 
of the Act, provided the following conditions are met:
    (1) All retailers within the market where the coupon offer is made 
may redeem such coupons; and
    (2) An industry member may not reimburse a retailer for more than 
the face value of all coupons redeemed, plus a usual and customary 
handling fee for the redemption of coupons.
    (b) Direct offerings. Contest prizes, premium offers, refunds, and 
like items may be offered by industry members directly to consumers. 
Officers, employees and representatives of wholesalers or retailers are 
excluded from particiption.

[T.D. ATF-74, 45 FR 63251, Sept. 23, 1980, as amended by T.D. ATF-364, 
60 FR 20423, Apr. 26, 1995]



Sec. 6.97  [Reserved]



Sec. 6.98  Advertising service.

    The listing of the names and addresses of two or more unaffiliated 
retailers selling the products of an industry member in an advertisement 
of that industry member does not constitute a means to induce within the 
meaning of section 105(b)(3) of the Act, provided:
    (a) The advertisement does not also contain the retail price of the 
product (except where the exclusive retailer in the jurisdiction is a 
State or a political subdivision of a State), and
    (b) The listing is the only reference to the retailers in the 
advertisement and is relatively inconspicuous in relation to the 
advertisement as a whole, and
    (c) The advertisement does not refer only to one retailer or only to 
retail establishments controlled directly or indirectly by the same 
retailer, except where the retailer is an agency of a State or a 
political subdivision of a State.

[T.D. ATF-364, 60 FR 20423, Apr. 26, 1995]



Sec. 6.99  Stocking, rotation, and pricing service.

    (a) General. Industry members may, at a retail establishment, stock, 
rotate and affix the price to distilled spirits, wine, or malt beverages 
which they sell, provided products of other industry members are not 
altered or disturbed. The rearranging or resetting of all or part of a 
store or liquor department is not hereby authorized.
    (b) Shelf plan and shelf schematics. The act by an industry member 
of providing a recommended shelf plan or shelf schematic for distilled 
spirits, wine, or malt beverages does not constitute a means to induce 
within the meaning of section 105(b)(3) of the Act.

[T.D. ATF-364, 60 FR 20424, Apr. 26, 1995]



Sec. 6.100  Participation in retailer association activities.

    The following acts by an industry member participating in retailer 
association activities do not constitute a means to induce within the 
meaning of section 105(b)(3) of the Act:
    (a) Displaying its products at a convention or trade show;

[[Page 83]]

    (b) Renting display booth space if the rental fee is the same as 
paid by all exhibitors at the event;
    (c) Providing its own hospitality which is independent from 
association sponsored activities;
    (d) Purchasing tickets to functions and paying registration fees if 
the payments or fees are the same as paid by all attendees, participants 
or exhibitors at the event; and
    (e) Making payments for advertisements in programs or brochures 
issued by retailer associations at a convention or trade show if the 
total payments made by an industry member for all such advertisements do 
not exceed $300 per year for any retailer association.

[T.D. ATF-364, 60 FR 20424, Apr. 26, 1995]



Sec. 6.101  Merchandise.

    (a) General. The act by an industry member, who is also in business 
as a bona fide producer or vendor of other merchandise (for example, 
groceries or pharmaceuticals), of selling that merchandise to a retailer 
does not constitute a means to induce within the meaning of section 
105(b)(3) of the Act, provided:
    (1) The merchandise is sold at its fair market value;
    (2) The merchandise is not sold in combination with distilled 
spirits, wines, or malt beverages (except as provided in Sec. 6.93);
    (3) The industry member's acquisition or production costs of the 
merchandise appears on the industry member's purchase invoices or other 
records; and
    (4) The individual selling prices of merchandise and distilled 
spirits, wines, or malt beverages sold in a single transaction can be 
determined from commercial documents covering the sales transaction.
    (b) Things of value covered in other sections of this part. The act 
by an industry member of providing equipment, fixtures, signs, 
glassware, supplies, services, and advertising specialties to retailers 
does not constitute a means to induce within the meaning of section 
105(b)(3) of the Act only as provided in other sections within this 
part.

[T.D. ATF-364, 60 FR 20424, Apr. 26, 1995]



Sec. 6.102  Outside signs.

    The act by an industry member of giving or selling outside signs to 
a retailer does not constitute a means to induce within the meaning of 
section 105(b)(3) of the Act provided that:
    (a) The sign must bear conspicuous and substantial advertising 
matter about the product or the industry member which is permanently 
inscribed or securely affixed;
    (b) The retailer is not compensated, directly or indirectly such as 
through a sign company, for displaying the signs; and
    (c) The cost of the signs may not exceed $400.

[T.D. ATF-364, 60 FR 20424, Apr. 26, 1995]



                          Subpart E--Exclusion

    Source: T.D. ATF-364, 60 FR 20424, Apr. 26, 1995, unless otherwise 
noted.



Sec. 6.151  Exclusion, in general.

    (a) Exclusion, in whole or in part occurs:
    (1) When a practice by an industry member, whether direct, indirect, 
or through an affiliate, places (or has the potential to place) retailer 
independence at risk by means of a tie or link between the industry 
member and retailer or by any other means of industry member control 
over the retailer; and
    (2) Such practice results in the retailer purchasing less than it 
would have of a competitor's product.
    (b) Section 6.152 lists practices that create a tie or link that 
places retailer independence at risk. Section 6.153 lists the criteria 
used for determining whether other practices can put retailer 
independence at risk.



Sec. 6.152  Practices which put retailer independence at risk.

    The practices specified in this section put retailer independence at 
risk. The practices specified here are examples and do not constitute a 
complete list of those practices that put retailer independence at risk.

[[Page 84]]

    (a) The act by an industry member of resetting stock on a retailer's 
premises (other than stock offered for sale by the industry member).
    (b) The act by an industry member of purchasing or renting display, 
shelf, storage or warehouse space (i.e. slotting allowance).
    (c) Ownership by an industry member of less than a 100 percent 
interest in a retailer, where such ownership is used to influence the 
purchases of the retailer.
    (d) The act by an industry member of requiring a retailer to 
purchase one alcoholic beverage product in order to be allowed to 
purchase another alcoholic beverage product at the same time.



Sec. 6.153  Criteria for determining retailer independence.

    The criteria specified in this section are indications that a 
particular practice, other than those in Sec. 6.152, places retailer 
independence at risk. A practice need not meet all of the criteria 
specified in this section in order to place retailer independence at 
risk.
    (a) The practice restricts or hampers the free economic choice of a 
retailer to decide which products to purchase or the quantity in which 
to purchase them for sale to consumers.
    (b) The industry member obligates the retailer to participate in the 
promotion to obtain the industry member's product.
    (c) The retailer has a continuing obligation to purchase or 
otherwise promote the industry member's product.
    (d) The retailer has a commitment not to terminate its relationship 
with the industry member with respect to purchase of the industry 
member's products.
    (e) The practice involves the industry member in the day-to-day 
operations of the retailer. For example, the industry member controls 
the retailer's decisions on which brand of products to purchase, the 
pricing of products, or the manner in which the products will be 
displayed on the retailer's premises.
    (f) The practice is discriminatory in that it is not offered to all 
retailers in the local market on the same terms without business reasons 
present to justify the difference in treatment.



PART 7--LABELING AND ADVERTISING OF MALT BEVERAGES--Table of Contents




                            Subpart A--Scope

Sec.
7.1  General.
7.2  Territorial extent.
7.3  Forms prescribed.
7.4  Related regulations.
7.5  Delegations of the Director.

                         Subpart B--Definitions

7.10  Meaning of terms.

           Subpart C--Labeling Requirements for Malt Beverages

7.20  General.
7.21  Misbranding.
7.22  Mandatory label information.
7.23  Brand names.
7.24  Class and type.
7.25  Name and address.
7.26  Alcoholic content [suspended as of April 19, 1993; see Sec. 7.71].
7.27  Net contents.
7.28  General requirements.
7.29  Prohibited practices.

 Subpart D--Requirements for Withdrawal of Imported Malt Beverages From 
                             Customs Custody

7.30  Application.
7.31  Label approval and release.

    Subpart E--Requirements for Approval of Labels of Malt Beverages 
                     Domestically Bottled or Packed

7.40  Application.
7.41  Certificates of label approval.
7.42  Exhibiting certificates to Government officials.

                Subpart F--Advertising of Malt Beverages

7.50  Application.
7.51  Definitions.
7.52  Mandatory statements.
7.53  Legibility of mandatory information.
7.54  Prohibited practices.
7.55  Comparative advertising.

                      Subpart G--General Provisions

7.60  Exports.

     Subpart H--Interim Regulations for Alcoholic Content Statements

7.71  Alcoholic content.

    Authority: 27 U.S.C. 205.

[[Page 85]]


    Source: T.D. 6521, 25 FR 13859, Dec. 29, 1960, unless otherwise 
noted.

    Editorial Note: Nomenclature changes to part 7 appear by T.D. ATF-
425, 65 FR 11891, Mar. 7, 2000.



                            Subpart A--Scope



Sec. 7.1  General.

    The regulations in this part relate to the labeling and advertising 
of malt beverages.



Sec. 7.2  Territorial extent.

    This part applies to the several States of the United States, the 
District of Columbia and the Commonwealth of Puerto Rico.



Sec. 7.3  Forms prescribed.

    (a) The appropriate ATF officer is authorized to prescribe all forms 
required by this part. All of the information called for in each form 
shall be furnished as indicated by the headings on the form and the 
instructions on or pertaining to the form. In addition, information 
called for in each form shall be furnished as required by this part. The 
form will be filed in accordance with the instructions for the form.
    (b) Forms may be requested from the ATF Distribution Center, P.O. 
Box 5950, Springfield, Virginia 22153-5190, or by accessing the ATF web 
site (http://www.atf.treas.gov/).

[T.D. ATF-92, 46 FR 46912, Sept. 23, 1981, as amended by T.D. ATF-249, 
52 FR 5956, Feb. 27, 1987; T.D. 372, 61 FR 20723, May 8, 1996; T.D. ATF-
425, 65 FR 11891, Mar. 7, 2000]



Sec. 7.4  Related regulations.

    Regulations relating to this part are listed below:

27 CFR Part 1--Basic Permit Requirements Under the Federal Alcohol 
Administration Act.
27 CFR Part 4--Labeling and Advertising of Wine.
27 CFR Part 5--Labeling and Advertising of Distilled Spirits.
27 CFR Part 16--Alcoholic Beverage Health Warning Statement.
27 CFR Part 25--Beer.
27 CFR Part 26--Liquors and Articles from Puerto Rico and the Virgin 
Islands.
27 CFR Part 71--Rules of Practice in Permit Proceedings.
27 CFR Part 251--Importation of Distilled Spirits, Wines and Beer.

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-294, 55 
FR 5421, Feb. 14, 1990; T.D. ATF-459, 66 FR 38549, July 25, 2001; T.D. 
ATF-463, 66 FR 42733, Aug. 15, 2001]



Sec. 7.5  Delegations of the Director.

    Most of the regulatory authorities of the Director contained in this 
Part 7 are delegated to appropriate ATF officers. These ATF officers are 
specified in ATF Order 1130.2A, Delegation Order--Delegation of the 
Director's Authorities in 27 CFR parts 4, 5 and 7, Labeling and 
Advertising of Wine, Distilled Spirits and Malt Beverages. ATF 
delegation orders, such as ATF Order 1130.2A, are available to any 
interested person by mailing a request to the ATF Distribution Center, 
PO Box 5950, Springfield, Virginia 22150-5190, or by accessing the ATF 
web site (http://www.atf.treas.gov/).

[T.D. ATF-425, 65 FR 11891, Mar. 7, 2000]



                         Subpart B--Definitions



Sec. 7.10  Meaning of terms.

    As used in this part, unless the context otherwise requires, terms 
shall have the meaning ascribed in this subpart.
    Act. The Federal Alcohol Administration Act.
    Advertisement. See Sec. 7.51 for meaning of term as used in subpart 
F of this part.
    Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this part by ATF Order 
1130.2A, Delegation Order--Delegation of the Director's Authorities in 
27 CFR part 4, 5 and 7, Labeling and Advertising of Wine, Distilled 
Spirits and Malt Beverages.
    Brand label. The label carrying, in the usual distinctive design, 
the brand name of the malt beverage.
    Bottler. Any person who places malt beverages in containers of a 
capacity of one gallon or less.
    Container. Any can, bottle, barrel, keg, or other closed receptacle, 
irrespective of size or of the material from

[[Page 86]]

which made, for use for the sale of malt beverages at retail.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC.
    Gallon. A U.S. gallon of 231 cubic inches of malt beverages at 39.1 
deg.F (4  deg.C). All other liquid measures used are subdivisions of the 
gallon as defined.
    Interstate or foreign commerce. Commerce between any State and any 
place outside thereof, or commerce within any Territory or the District 
of Columbia, or between points within the same State but through any 
place outside thereof.
    Malt beverage. A beverage made by the alcoholic fermentation of an 
infusion or decoction, or combination of both, in potable brewing water, 
of malted barley with hops, or their parts, or their products, and with 
or without other malted cereals, and with or without the addition of 
unmalted or prepared cereals, other carbohydrates or products prepared 
therefrom, and with or without the addition of carbon dioxide, and with 
or without other wholesome products suitable for human food consumption.
    Other terms. Any other term defined in the Federal Alcohol 
Administration Act and used in this part shall have the same meaning 
assigned to it by the Act.
    Packer. Any person who places malt beverages in containers of a 
capacity in excess of one gallon.
    Person. Any individual, partnership, joint-stock company, business 
trust, association, corporation, or other form of business enterprise, 
including a receiver trustee, or liquidating agent, and including an 
officer or employee of any agency of a State or political subdivision 
thereof.
    United States. The several States, the District of Columbia, and 
Puerto Rico; the term ``State'' includes the District of Columbia and 
Puerto Rico.

[T.D. ATF-48, 43 FR 13534, Mar. 31, 1978; 44 FR 55839, Sept. 28, 1979, 
as amended by T.D. ATF-66, 45 FR 40550, June 13, 1980; T.D. ATF-94, 46 
FR 55097, Nov. 6, 1981; T.D. ATF-344, 58 FR 40354, July 28, 1993; T.D. 
ATF-425, 65 FR 11892, Mar. 7, 2000]



           Subpart C--Labeling Requirements for Malt Beverages



Sec. 7.20  General.

    (a) Application. This subpart shall apply to malt beverages sold or 
shipped or delivered for shipment, or otherwise introduced into or 
received in any State from any place outside thereof, only to the extent 
that the law of such State imposes similar requirements with respect to 
the labeling of malt beverages not sold or shipped or delivered for 
shipment or otherwise introduced into or received in such State from any 
place outside thereof.
    (b) Marking, branding, and labeling. No person engaged in business 
as a brewer, wholesaler, or importer of malt beverages, directly or 
indirectly, or through an affiliate, shall sell or ship, or deliver for 
sale or shipment, or otherwise introduce in interstate or foreign 
commerce, or receive therein, or remove from Customs custody any malt 
beverages in containers unless the malt beverages are packaged, and the 
packages are marked, branded, and labeled in conformity with this 
subpart.
    (c) Alteration of labels. (1) It shall be unlawful for any person to 
alter, mutilate, destroy, obliterate, or remove any mark, brand, or 
label upon malt beverages held for sale in interstate or foreign 
commerce or after shipment therein, except as authorized by Federal law. 
The appropriate ATF officer may, upon written application, permit 
additional labeling or relabeling of malt beverages in containers if, in 
his judgment, the facts show that the additional labeling or relabeling 
is for the purpose of compliance with the requirements of this subpart 
or of State law.
    (2) Application for permission to relabel shall be accompanied by 
two complete sets of the old labels and two complete sets of any 
proposed labels, together with a statement of the reasons for 
relabeling, the quantity and the location of the malt beverages, and the 
name and address of the person by whom they will be relabeled.

[T.D. 6521, 25 FR 13859, Dec. 29, 1960, as amended by T.D. ATF-66, 45 FR 
40551, June 13, 1980; T.D. ATF-425, 65 FR 11892, Mar. 7, 2000]

[[Page 87]]



Sec. 7.21  Misbranding.

    Malt beverages in containers shall be deemed to be misbranded:
    (a) If the container fails to bear on it a brand label (or a brand 
label and other permitted labels) containing the mandatory label 
information as required by Secs. 7.20 through 7.29 and conforming to the 
general requirements specified in this part.
    (b) If the container, cap, or any label on the container, or any 
carton, case, or other covering of the container used for sale at 
retail, or any written, printed, graphic, or other matter accompanying 
the container to the consumer buyer contains any statement, design, 
device, or graphic, pictorial, or emblematic representation that is 
prohibited by Secs. 7.20 through 7.29.
    (c) If the container has blown, branded, or burned therein the name 
or other distinguishing mark of any person engaged in business as a 
brewer, wholesaler, bottler, or importer, of malt beverages, or of any 
other person, except the person whose name is required to appear on the 
brand label.



Sec. 7.22  Mandatory label information.

    There shall be stated:
    (a) On the brand label:
    (1) Brand name, in accordance with Sec. 7.23.
    (2) Class, in accordance with Sec. 7.24.
    (3) Name and address (except when branded or burned in the 
container) in accordance with Sec. 7.25, except as provided in paragraph 
(b) of this section.
    (4) Net contents (except when blown, branded, or burned, in the 
container) in accordance with Sec. 7.27.
    (b) On the brand label or on a separate label (back or front):
    (1) In the case of imported malt beverages, name and address of 
importer in accordance with Sec. 7.25.
    (2) In the case of malt beverages bottled or packed for the holder 
of a permit or a retailer, the name and address of the bottler or 
packer, in accordance with Sec. 7.25.
    (3) Alcoholic content, when required by State law, in accordance 
with Sec. 7.71.
    (4) A statement that the product contains FD&C Yellow No. 5, where 
that coloring material is used in a product bottled on or after October 
6, 1984.
    (5) The following statement, separate and apart from all other 
information, when saccharin is present in the finished product: Use of 
this product may be hazardous to your health. This product contains 
saccharin which has been determined to cause cancer in laboratory 
animals.
    (6) Declaration of sulfites. The statement ``Contains sulfites'' or 
``Contains (a) sulfiting agent(s)'' or a statement identifying the 
specific sulfiting agent where sulfur dioxide or a sulfiting agent is 
detected at a level of 10 or more parts per million, measured as total 
sulfur dioxide. The sulfite declaration may appear on a strip label or 
neck label in lieu of appearing on the front or back label. The 
provisions of this paragraph shall apply to:
    (i) Any certificate of label approval issued on or after January 9, 
1987;
    (ii) Any malt beverage bottled on or after July 9, 1987, regardless 
of the date of issuance of the certificate of label approval; and,
    (iii) Any malt beverage removed on or after January 9, 1988.
    (7) Declaration of aspartame. The following statement, in capital 
letters, separate and apart from all other information, when the product 
contains aspartame in accordance with Food and Drug Administration (FDA) 
regulations:

``PHENYLKETONURICS: CONTAINS PHENYLALANINE.''

(Paragraph (b)(6) approved by the Office of Management and Budget under 
Control No. 1512-0469)

[T.D. 6521, 25 FR 13859, Dec. 29, 1960, as amended by T.D. ATF-94, 46 FR 
55097, Nov. 6, 1981; T.D. ATF-150, 48 FR 45557, Oct. 6, 1983; T.D. ATF-
220, 50 FR 51852, Dec. 20, 1985; T.D. ATF-236, 51 FR 34710, Sept. 30, 
1986; T.D. ATF-282, 54 FR 7162, Feb. 16, 1989; T.D. ATF-312, 56 FR 
31077, July 9, 1991; T.D. ATF-339, 58 FR 21231, Apr. 19, 1993; T.D. ATF-
347, 58 FR 44132, Aug. 19, 1993]



Sec. 7.23  Brand names.

    (a) General. The product shall bear a brand name, except that if not 
sold under a brand name, then the name of the person required to appear 
on the brand label shall be deemed a brand name for the purpose of this 
part.
    (b) Misleading brand names. No label shall contain any brand name, 
which,

[[Page 88]]

standing alone, or in association with other printed or graphic matter, 
creates any impression or inference as to the age, origin, identity, or 
other characteristics of the product unless the appropriate ATF officer 
finds that such brand name, either when qualified by the word ``brand'' 
or when not so qualified, conveys no erroneous impressions as to the 
age, origin, identity, or other characteristics of the product.
    (c) Trade name of foreign origin. This section shall not operate to 
prohibit the use by any person of any trade name or brand of foreign 
origin not effectively registered in the United States Patent Office on 
August 29, 1935, which has been used by such person or his predecessors 
in the United States for a period of at least 5 years immediately 
preceding August 29, 1935: Provided, That if such trade name or brand is 
used, the designation of the product shall be qualified by the name of 
the locality in the United States in which produced, and such 
qualification shall be in script, type, or printing as conspicuous as 
the trade name or brand.



Sec. 7.24  Class and type.

    (a) The class of the malt beverage shall be stated and, if desired, 
the type thereof may be stated. Statements of class and type shall 
conform to the designation of the product as known to the trade. If the 
product is not known to the trade under a particular designation, a 
distinctive or fanciful name, together with an adequate and truthful 
statement of the composition of the product, shall be stated, and such 
statement shall be deemed to be a statement of class and type for the 
purposes of this part.
    (b) Malt beverages which have been concentrated by the removal of 
water therefrom and reconstituted by the addition of water and carbon 
dioxide shall for the purpose of this part be labeled in the same manner 
as malt beverages which have not been concentrated and reconstituted, 
except that there shall appear in direct conjunction with, and as a part 
of, the class designation the statement ``PRODUCED FROM----CONCENTRATE'' 
(the blank to be filled in with the appropriate class designation). All 
parts of the class designation shall appear in lettering of 
substantially the same size and kind.
    (c) No product shall be designated as ``half and half'' unless it is 
in fact composed of equal parts of two classes of malt beverages the 
names of which are conspicuously stated in conjunction with the 
designation ``half and half''.
    (d) Products containing less than one-half of 1 percent (.5%) of 
alcohol by volume shall bear the class designation ``malt beverage,'' or 
``cereal beverage,'' or ``near beer.'' If the designation ``near beer'' 
is used, both words must appear in the same size and style of type, in 
the same color of ink, and on the same background. No product containing 
less than one-half of 1 percent of alcohol by volume shall bear the 
class designations ``beer'', ``lager beer'', ``lager'', ``ale'', 
``porter'', or ``stout'', or any other class or type designation 
commonly applied to malt beverages containing one-half of 1 percent or 
more of alcohol by volume.
    (e) No product other than a malt beverage fermented at comparatively 
high temperature, possessing the characteristics generally attributed to 
``ale,'' ``porter,'' or ``stout'' and produced without the use of 
coloring or flavoring materials (other than those recognized in standard 
brewing practices) shall bear any of these class designations.
    (f) Geographical names for distinctive types of malt beverages 
(other than names found under paragraph (g) of this section to have 
become generic) shall not be applied to malt beverages produced in any 
place other than the particular region indicated by the name unless (1) 
in direct conjunction with the name there appears the word ``type'' or 
the word ``American'', or some other statement indicating the true place 
of production in lettering substantially as conspicuous as such name, 
and (2) the malt beverages to which the name is applied conform to the 
type so designated. The following are examples of distinctive types of 
beer with geographical names that have not become generic; Dortmund, 
Dortmunder, Vienna, Wein, Weiner, Bavarian, Munich, Munchner, Salvator, 
Kulmbacher, Wurtzburger, Pilsen (Pilsener and Pilsner): Provided, That

[[Page 89]]

notwithstanding the foregoing provisions of this section, beer which is 
produced in the United States may be designated as ``Pilsen,'' 
``Pilsener,'' or ``Pilsner'' without further modification, if it 
conforms to such type.
    (g) Only such geographical names for distinctive types of malt 
beverages as the appropriate ATF officer finds have by usage and common 
knowledge lost their geographical significance to such an extent that 
they have become generic shall be deemed to have become generic, e.g., 
India Pale Ale.
    (h) Except as provided in Sec. 7.23(b), geographical names that are 
not names for distinctive types of malt beverages shall not be applied 
to malt beverages produced in any place other than the particular place 
or region indicated in the name.

[T.D. 6672, 28 FR 9637, Aug. 31, 1963, as amended at 29 FR 3572, Mar. 
20, 1964; T.D. ATF-249, 52 FR 5956, Feb. 27, 1987; T.D. ATF 280, 54 FR 
3594, Jan. 25, 1989; T.D. ATF-425, 65 FR 11892, Mar. 7, 2000]



Sec. 7.25  Name and address.

    (a) Domestic malt beverages. (1) On labels of containers of domestic 
malt beverages there shall be stated the name of the bottler or packer 
and the place where bottled or packed. The bottler's or packer's 
principal place of business may be shown in lieu of the actual place 
where bottled or packed if the address shown is a location where 
bottling or packing operation takes place. The appropriate ATF officer 
may disapprove the listing of a principal place of business if its use 
would create a false or misleading impression as to the geographic 
origin of the beer.
    (2) If malt beverages are bottled or packed for a person other than 
the actual bottler or packer there may be stated in addition to the name 
and address of the bottler or packer (but not in lieu of), the name and 
address of such other person immediately preceded by the words ``bottled 
for,'' ``distributed by,'' or other similar appropriate phrase.
    (b) Imported malt beverages. On labels of containers of imported 
malt beverages, there shall be stated the words ``imported by,'' or a 
singular appropriate phrase, and immediately thereafter the name of the 
permittee who is the importer, or exclusive agent, or sole distributor, 
or other person responsible for the importation, together with the 
principal place of business in the United States of such person. In 
addition there may, but need not, be stated unless required by State or 
foreign law or regulation the name and principal place of business of 
the foreign manufacturer, bottler, packer, or shipper.
    (c) Post-office address. The ``place'' stated shall be the post-
office address, except that the street address may be omitted. No 
additional places or addresses shall be stated for the same person, 
unless (1) such person is actively engaged in the conduct of an 
additional bona fide and actual malt beverage business at such 
additional place or address, and (2) the label also contains, in direct 
conjunction therewith, appropriate descriptive material indicating the 
function occurring at such additional place or address in connection 
with the particular malt beverage.

(Approved by the Office of Management and Budget under control number 
1512-0474)

[T.D. 6551, 25 FR 13859, Dec. 29, 1960, as amended by T.D. ATF-225, 51 
FR 8492, Mar. 12, 1986]



Sec. 7.26  Alcoholic content [suspended as of April 19, 1993; see Sec. 7.71].

    (a) The alcoholic content and the percentage and quantity of the 
original extract shall not be stated unless required by State law. When 
alcoholic content is required to be stated, but the manner of statement 
is not specified in the State law, it shall be stated in percentage of 
alcohol by weight or by volume, and not by proof or by maximums or 
minimums. Otherwise the manner of statement shall be as specified in the 
State law.
    (b) The terms ``low alcohol'' or ``reduced alcohol'' may be used 
only on malt beverage products containing less than 2.5 percent alcohol 
by volume.
    (c) The term ``non-alcoholic'' may be used on malt beverage 
products, provided the statement ``contains less than 0.5 percent (or 
.5%) alcohol by volume'' appears in direct conjunction with it, in 
readily legible printing and on a completely contrasting background.

[[Page 90]]

    (d) The term ``alcohol-free'' may be used only on malt beverage 
products containing no alcohol.

[T.D. 6521, 25 FR 13859, Dec. 29, 1960, as amended by T.D. ATF 280, 54 
FR 3594, Jan. 25, 1989; T.D. ATF-339, 58 FR 21231, Apr. 19, 1993]

    Effective Date Note: At 58 FR 21231, Apr. 19, 1993, Sec. 7.26 was 
suspended indefinitely.



Sec. 7.27  Net contents.

    (a) Net contents shall be stated as follows:
    (1) If less than 1 pint, in fluid ounces, or fractions of a pint.
    (2) If 1 pint, 1 quart, or 1 gallon, the net contents shall be so 
stated.
    (3) If more than 1 pint, but less than 1 quart, the net contents 
shall be stated in fractions of a quart, or in pints and fluid ounces.
    (4) If more than 1 quart, but less than 1 gallon, the net contents 
shall be stated in fractions of a gallon, or in quarts, pints, and fluid 
ounces.
    (5) If more than 1 gallon, the net contents shall be stated in 
gallons and fractions thereof.
    (b) All fractions shall be expressed in their lowest denominations.
    (c) The net contents need not be stated on any label if the net 
contents are displayed by having the same blown, branded, or burned in 
the container in letters or figures in such manner as to be plainly 
legible under ordinary circumstances and such statement is not obscured 
in any manner in whole or in part.



Sec. 7.28  General requirements.

    (a) Contrasting background. All labels shall be so designed that all 
statements required by this subpart are readily legible under ordinary 
conditions, and all the statements are on a contrasting background.
    (b) Size of type-- (1) Containers of more than one-half pint. Except 
for statements of alcoholic content, all mandatory information required 
on labels by this part shall be in script, type, or printing not smaller 
than 2 millimeters. If contained among other descriptive or explanatory 
information, the script, type, or printing of all mandatory information 
shall be of a size substantially more conspicuous than that of the 
descriptive or explanatory information.
    (2) Containers of one-half pint or less. Except for statements of 
alcoholic content, all mandatory information required on labels by this 
part shall be in script, type, or printing not smaller than 1 
millimeter. If contained among other descriptive or explanatory 
information, the script, type, or printing of all mandatory information 
shall be of a size substantially more conspicuous than that of the 
descriptive or explanatory information.
    (3) Alcoholic content statement. All portions of the alcoholic 
content statement shall be of the same size and kind of lettering and of 
equally conspicuous color. Unless otherwise required by State law, the 
statement of alcoholic content shall be in script, type, or printing:
    (i) Not smaller than 1 millimeter for containers of one-half pint or 
less, or smaller than 2 millimeters for containers larger than one-half 
pint; or
    (ii) Not larger than 3 millimeters for containers of 40 fl. oz. or 
less, or larger than 4 millimeters for containers larger than 40 fl. oz.
    (c) English language. All information, other than the brand name, 
required by this subpart to be stated on labels shall be in the English 
language. Additional statements in foreign languages may be made, if the 
statements do not conflict with, or are contradictory to, the 
requirements of this subpart. Labels on containers of malt beverages 
bottled or packed for consumption within Puerto Rico may, if desired, 
state the information required by this subpart solely in the Spanish 
language, in lieu of the English language, except that the net contents 
shall also be stated in the English language.
    (d) Labels firmly affixed. All labels shall be affixed to containers 
of malt beverages in such manner that they cannot be removed without 
thorough application of water or other solvents.
    (e) Additional information. Labels may contain information other 
than the mandatory label information required by this subpart if the 
information complies with the requirements of this subpart and does not 
conflict with, or in

[[Page 91]]

any manner qualify, statements required by this part.

[T.D. ATF-66, 45 FR 40552, June 13, 1980, as amended by T.D. ATF-94, 46 
FR 55097, Nov. 6, 1981; T.D. ATF-339, 58 FR 21231, Apr. 19, 1993]



Sec. 7.29  Prohibited practices.

    (a) Statements on labels. Containers of malt beverages, or any 
labels on such containers, or any carton, case, or individual covering 
of such containers, used for sale at retail or any written, printed, 
graphic, or other matter accompanying such containers to the consumer 
shall not contain:
    (1) Any statement that is false or untrue in any particular, or 
that, irrespective of falsity, directly, or by ambiguity, omission, or 
inference, or by the addition of irrelevant, scientific or technical 
matter, tends to create a misleading impression.
    (2) Any statement that is disparaging of a competitor's products.
    (3) Any statement, design, device, or representation which is 
obscene or indecent.
    (4) Any statement, design, device, or representation of or relating 
to analyses, standards, or tests, irrespective of falsity, which the 
appropriate ATF officer finds to be likely to mislead the consumer.
    (5) Any statement, design, device, or representation of or relating 
to any guarantee, irrespective of falsity, which the appropriate ATF 
officer finds to be likely to mislead the consumer. Money-back 
guarantees are not prohibited.
    (6) A trade or brand name that is the name of any living individual 
of public prominence, or existing private or public organization, or is 
a name that is in simulation or is an abbreviation thereof, or any 
graphic, pictorial, or emblematic representation of any such individual 
or organization, if the use of such name or representation is likely 
falsely to lead the consumer to believe that the product has been 
endorsed, made, or used by, or produced for, or under the supervision 
of, or in accordance with the specifications of, such individual or 
organization: Provided, That this paragraph shall not apply to the use 
of the name of any person engaged in business as a producer, importer, 
bottler, packer, wholesaler, retailer, or warehouseman, of malt 
beverages, nor to the use by any person of a trade or brand name that is 
the name of any living individual of public prominence, or existing 
private or public organization, provided such trade or brand name was 
used by him or his predecessors in interest prior to August 29, 1935.
    (b) Simulation of Government stamps. No label shall be of such 
design as to resemble or simulate a stamp of the United States 
Government or of any State or foreign government. No label, other than 
stamps authorized or required by the United States Government or any 
State or foreign government, shall state or indicate that the malt 
beverage contained in the labeled container is brewed, made, bottled, 
packed, labeled, or sold under, or in accordance with, any municipal, 
State, Federal, or foreign government authorization, law, or regulation, 
unless such statement is required or specifically authorized by Federal, 
State, or municipal, law or regulation, or is required or specifically 
authorized by the laws or regulations of the foreign country in which 
such malt beverages were produced. If the municipal or State government 
permit number is stated upon a label, it shall not be accompanied by an 
additional statement relating thereto, unless required by State law.
    (c) Use of word ``bonded'', etc. The words ``bonded'', ``bottled in 
bond'', ``aged in bond'', ``bonded age'', ``bottled under customs 
supervision'', or phrases containing these or synonymous terms which 
imply governmental supervision over production, bottling, or packing, 
shall not be used on any label for malt beverages.
    (d) Flags, seals, coats of arms, crests, and other insignia. Labels 
shall not contain, in the brand name or otherwise, any statement, 
design, device, or pictorial representation which the appropriate ATF 
officer finds relates to, or is capable of being construed as relating 
to, the armed forces of the United States, or the American flag, or any 
emblem, seal, insignia, or decoration associated with such flag or armed 
forces; nor shall any label contain any statement, design, device, or 
pictorial representation of or concerning any flag, seal, coat of arms, 
crest or other

[[Page 92]]

insignia, likely to mislead the consumer to believe that the product has 
been endorsed, made, or used by, or produced for, or under the 
supervision of, or in accordance with the specifications of the 
government, organization, family, or individual with whom such flag, 
seal, coat of arms, crest, or insignia is associated.
    (e) Curative and therapeutic claims. Labels shall not contain any 
statement, design, representation, pictorial representation, or device 
representing that the use of malt beverage has curative or therapeutic 
effects if such statement is untrue in any particular or tends to create 
a misleading impression.
    (f) Use of words ``strong,'' ``full strength,'' and similar words. 
Labels shall not contain the words ``strong,'' ``full strength,'' 
``extra strength,'' ``high test,'' ``high proof,'' ``pre-war strength,'' 
``full oldtime alcoholic strength,'' or similar words or statements, 
likely to be considered as statements of alcoholic content, unless 
required by State law. This does not preclude use of the terms ``low 
alcohol,'' ``reduced alcohol,'' ``non-alcoholic,'' and ``alcohol-free,'' 
in accordance with Sec. 7.71 (d), (e), and (f), nor does it preclude 
labeling with the alcohol content in accordance with Sec. 7.71.
    (g) Use of numerals. Labels shall not contain any statements, 
designs, or devices, whether in the form of numerals, letters, 
characters, figures, or otherwise, which are likely to be considered as 
statements of alcoholic content, unless required by State law, or as 
permitted by Sec. 7.71.
    (h) Coverings, cartons, or cases. Individual coverings, cartons, 
cases, or other wrappers of containers of malt beverages, used for sale 
at retail, or any written, printed, graphic, or other matter 
accompanying the container shall not contain any statement or any 
graphic pictorial, or emblematic representation, or other matter, which 
is prohibited from appearing on any label or container of malt 
beverages.

[T.D. 6521, 25 FR 13859, Dec. 29, 1960, as amended by T.D. ATF-66, 45 FR 
40552, June 13, 1980; T.D. ATF-180, 49 FR 31674, Aug. 8, 1984; T.D. ATF 
280, 54 FR 3594, Jan. 25, 1989; T.D. ATF-339, 58 FR 21232, Apr. 19, 
1993]



 Subpart D--Requirements for Withdrawal of Imported Malt Beverages From 
                             Customs Custody



Sec. 7.30  Application.

    Sections 7.30 and 7.31 shall apply to withdrawals of malt beverages 
from customs custody only in the event that the laws or regulations of 
the State in which such malt beverages are withdrawn for consumption 
require that all malt beverages sold or otherwise disposed of in such 
State be labeled in conformity with the requirements of Secs. 7.20 
through 7.29.



Sec. 7.31  Label approval and release.

    (a) Certificate of label approval. No imported malt beverages in 
containers shall be released from Customs custody for consumption unless 
there is deposited with the appropriate Customs officer at the port of 
entry the original or a photostatic copy of an approved certificate of 
label approval, ATF Form 5100.31.
    (b) Release. If the original or photostatic copy of ATF Form 5100.31 
has been approved, the brand or lot of imported malt beverages bearing 
labels identical with those shown thereon may be released from U.S. 
Customs custody.
    (c) Relabeling. Imported malt beverages in U.S. Customs custody 
which are not labeled in conformity with certificates of label approval 
issued by the appropriate ATF officer must be relabeled, prior to 
release, under the supervision and direction of the U.S. Customs 
officers of the port at which the malt beverages are located.

[[Page 93]]

    (d) Cross reference. For procedures regarding the issuance, denial, 
and revocation of certificates of label approval, as well as appeal 
procedures, see part 13 of this chapter.

[T.D. ATF-66, 45 FR 40552, June 13, 1980, as amended by T.D. ATF-94, 46 
FR 55097, Nov. 6, 1981; T.D. ATF-242, 51 FR 39525, Oct. 29, 1986; T.D. 
ATF-359, 59 FR 42160, Aug. 17, 1994; T.D. ATF-406, 64 FR 2129, Jan. 13, 
1999]



    Subpart E--Requirements for Approval of Labels of Malt Beverages 
                     Domestically Bottled or Packed



Sec. 7.40  Application.

    Sections 7.40 through 7.42 shall apply only to persons bottling or 
packing malt beverages (other than malt beverages in customs custody) 
for shipment, or delivery for sale or shipment, into a State, the laws 
or regulations of which require that all malt beverages sold or 
otherwise disposed of in such State be labeled in conformity with the 
requirements of Secs. 7.20 through 7.29.



Sec. 7.41  Certificates of label approval.

    (a) Requirement. No person may bottle or pack malt beverages, or 
remove malt beverages from the plant where bottled or packed unless an 
approved certificate of label approval, ATF Form 5100.31, is issued.
    (b) Cross reference. For procedures regarding the issuance, denial, 
and revocation of certificates of label approval, as well as appeal 
procedures, see part 13 of this chapter.

[T.D. ATF-406, 64 FR 2129, Jan. 13, 1999, as amended by T.D. ATF-425, 65 
FR 11892, Mar. 7, 2000]



Sec. 7.42  Exhibiting certificates to Government officials.

    Any bottler or packer holding an original or duplicate original of a 
certificate of label approval shall, upon demand exhibit such 
certificate to a duly authorized representative of the United States 
Government or any duly authorized representative of a State or political 
subdivision thereof.



                Subpart F--Advertising of Malt Beverages



Sec. 7.50  Application.

    No person engaged in business as a brewer, wholesaler, or importer, 
of malt beverages directly or indirectly or through an affiliate, shall 
publish or disseminate or cause to be published or disseminated by radio 
or television broadcast, or in any newspaper, periodical, or any 
publication, by any sign or outdoor advertisement, or in any other 
printed or graphic matter, any advertisement of malt beverages, if such 
advertising is in, or is calculated to induce sales in, interstate or 
foreign commerce, or is disseminated by mail, unless such advertisement 
is in conformity with Secs. 7.50-7.55 of this part. Provided, that such 
sections shall not apply to outdoor advertising in place on (effective 
date of this Treasury decision), but shall apply upon replacement, 
restoration, or renovation of any such advertising; and provided 
further, that Secs. 7.50-7.55 of this part shall apply to advertisements 
of malt beverages intended to be sold or shipped or delivered for 
shipment, or otherwise introduced into or received in any State from any 
place outside thereof, only to the extent that the laws of such State 
impose similar requirements with respect to advertisements of malt 
beverages manufactured and sold or otherwise disposed of in such State. 
And provided further that such sections shall not apply to a retailer or 
the publisher of any newspaper, periodical, or other publication, or 
radio or television broadcast, unless such retailer or publisher or 
radio or television broadcaster is engaged in business as a brewer, 
wholesaler, bottler, or importer of malt beverages, directly or 
indirectly, or through an affiliate.

[T.D. ATF-180, 49 FR 31675, Aug. 8, 1984]



Sec. 7.51  Definitions.

    As used in Secs. 7.50 through 7.55 of this part, the term 
``advertisement'' includes any written or verbal statement, 
illustration, or depiction which is in, or calculated to induce sales 
in, interstate or foreign commerce, or is disseminated by mail, whether 
it appears in a newspaper, magazine, trade

[[Page 94]]

booklet, menu, wine card, leaflet, circular, mailer, book insert, 
catalog, promotional material, sales pamphlet, or in any written, 
printed, graphic, or other matter accompanying the container, 
representations made on cases, or in any billboard, sign, or other 
outdoor advertisement, public transit card, other periodical literature, 
publication, or in a radio or television broadcast, or in any other 
media; except that such term shall not include:
    (a) Any label affixed to any container of malt beverages; or any 
coverings, cartons, or cases of containers of malt beverages used for 
sale at retail which constitute a part of the labeling under Secs. 7.20 
through 7.29 of this part.
    (b) Any editorial or other reading material (i.e., news release) in 
any periodical or publication or newspaper for the publication of which 
no money or valuable consideration is paid or promised, directly or 
indirectly, by any brewer, and which is not written by or at the 
direction of the brewer.

[T.D. ATF-180, 49 FR 31675, Aug. 8, 1984]



Sec. 7.52  Mandatory statements.

    (a) Responsible advertiser. The advertisement shall state the name 
and address of the brewer, bottler, packer, wholesaler, or importer 
responsible for its publication or broadcast. Street number and name may 
be omitted in the address.
    (b) Class. The advertisement shall contain a conspicuous statement 
of the class to which the product belongs, corresponding to the 
statement of class which is required to appear on the label of the 
product.
    (c) Exception. (1) If an advertisement refers to a general malt 
beverage line or all of the malt beverage products of one company, 
whether by the company name or by the brand name common to all the malt 
beverages in the line, the only mandatory information necessary is the 
name and address of the responsible advertiser. This exception does not 
apply where only one type of malt beverage is marketed under the 
specific brand name advertised.
    (2) On consumer specialty items, the only information necessary is 
the company name or brand name of the product.

[T.D. 6521, 25 FR 13859, Dec. 29, 1960, as amended by T.D. ATF-180, 49 
FR 31675, Aug. 8, 1984]



Sec. 7.53  Legibility of mandatory information.

    (a) Statements required under Secs. 7.50 through 7.55 of this part 
that appear in any written, printed, or graphic advertisement shall be 
in lettering or type size sufficient to be conspicuous and readily 
legible.
    (b) In the case of signs, billboards, and displays the name and 
address of the permittee responsible for the advertisement may appear in 
type size of lettering smaller than the other mandatory information, 
provided such information can be ascertained upon closer examination of 
the sign or billboard.
    (c) Mandatory information shall be so stated as to be clearly a part 
of the advertisement and shall not be separated in any manner from the 
remainder of the advertisement.
    (d) Mandatory information for two or more products shall not be 
stated unless clearly separated.
    (e) Mandatory information shall be so stated in both the print and 
audiovisual media that it will be readily apparent to the persons 
viewing the advertisement.

[T.D. ATF-180, 49 FR 31675, Aug. 8, 1984]



Sec. 7.54  Prohibited statements.

    (a) General prohibition. An advertisement of malt beverages shall 
not contain:
    (1) Any statement that is false or untrue in any material 
particular, or that, irrespective of falsity, directly, or by ambiguity, 
omission, or inference, or by the addition of irrelevant, scientific or 
technical matter, tends to create a misleading impression.
    (2) Any statement that is disparaging of a competitor's products.
    (3) Any statement, design, device, or representation which is 
obscene or indecent.
    (4) Any statement, design, device, or representation of or relating 
to analyses, standards, or tests, irrespective of

[[Page 95]]

falsity, which the appropriate ATF officer finds to be likely to mislead 
the consumer.
    (5) Any statement, design, device, or representation of or relating 
to any guarantee, irrespective of falsity, which the appropriate ATF 
officer finds to be likely to mislead the consumer. Money-back 
guarantees are not prohibited.
    (6) Any statement that the malt beverages are brewed, made, bottled, 
packed, labeled, or sold under, or in accordance with, any municipal, 
State, or Federal authorization, law, or regulation; and if a municipal 
or State permit number is stated, the permit number shall not be 
accompanied by any additional statement relating thereto.
    (7) The words ``bonded'', ``bottled in bond'', ``aged in bond'', 
``bonded age'', ``bottled under customs supervision'', or phrases 
containing these or synonymous terms which imply governmental 
supervision over production, bottling, or packing.
    (b) Statements inconsistent with labeling. (1) Advertisements shall 
not contain any statement concerning a brand or lot of malt beverages 
that is inconsistent with any statement on the labeling thereof.
    (2) Any label depicted on a bottle in an advertisement shall be a 
reproduction of an approved label.
    (c) Alcoholic content. (1) Advertisements shall not contain the 
words ``strong,'' ``full strength,'' ``extra strength,'' ``high test,'' 
``high proof,'' ``full alcohol strength,'' or any other statement of 
alcoholic content, or any statement of the percentage and quantity of 
the original extract, or any numerals, letters, characters, figures, or 
similar words or statements, likely to be considered as statements of 
alcoholic content, unless required by State law. This does not preclude 
use of the terms ``low alcohol,'' ``reduced alcohol,'' ``non-
alcoholic,'' and ``alcohol-free,'' as used on labels, in accordance with 
Sec. 7.71 (d), (e), and (f).
    (2) An approved malt beverage label which bears a statement of 
alcoholic content permitted under Sec. 7.71 may be depicted in any 
advertising media. The statement of alcoholic content on the label may 
not appear more prominently in the advertisement than it does on the 
approved label.
    (3) An actual malt beverage bottle showing the approved label 
bearing a statement of alcoholic content permitted under Sec. 7.71 may 
be displayed in any advertising media.
    (d) Class. (1) No product containing less than one-half of 1 per 
centum of alcohol by volume shall be designated in any advertisement as 
``beer'', ``lager beer'', ``lager'', ``ale'', ``porter'', or ``stout'', 
or by any other class or type designation commonly applied to fermented 
malt beverages containing one-half of 1 per centum or more of alcohol by 
volume.
    (2) No product other than a malt beverage fermented at comparatively 
high temperature, possessing the characteristics generally attributed to 
``ale,'' ``porter,'' or ``stout'' and produced without the use of 
coloring or flavoring materials (other than those recognized in standard 
brewing practices) shall be designated in any advertisement by any of 
these class designations.
    (e) Curative and therapeutic claims. Advertisements shall not 
contain any statement, design, representation, pictorial representation, 
or device representing that the use of malt beverages has curative or 
therapeutic effects if such statement is untrue in any particular or 
tends to create a misleading impression.
    (f) Confusion of brands. Two or more different brands or lots of 
malt beverages shall not be advertised in one advertisement (or in two 
or more advertisements in one issue of a periodical or a newspaper or in 
one piece of other written, printed, or graphic matter) if the 
advertisement tends to create the impression that representations made 
as to one brand or lot apply to the other or others, and if as to such 
latter the representations contravene any provision of Secs. 7.50 
through 7.54 or are in any respect untrue.
    (g) Flags, seals, coats of arms, crests, and other insignia. No 
advertisement shall contain any statement, design, device, or pictorial 
representation of or relating to, or capable of being construed as 
relating to the armed forces of the United States, or of the American 
flag, or of any emblem, seal, insignia, or decoration associated with 
such

[[Page 96]]

flag or armed forces; nor shall any advertisement contain any statement, 
device, design, or pictorial representation of or concerning any flag, 
seal, coat of arms, crest, or other insignia, likely to mislead the 
consumer to believe that the product has been endorsed, made, or used 
by, or produced for, or under the supervision of, or in accordance with 
the specifications of the government, organization, family, or 
individual with whom such flag, seal, coat of arms, crest, or insignia 
is associated.
    (h) Deceptive advertising techniques. Subliminal or similar 
techniques are prohibited. ``Subliminal or similar techniques,'' as used 
in this part, refers to any device or technique that is used to convey, 
or attempts to convey, a message to a person by means of images or 
sounds of a very brief nature that cannot be perceived at a normal level 
of awareness.

[T.D. 6521, 25 FR 13859, Dec. 29, 1960, as amended by T.D. ATF-180, 49 
FR 31675, Aug. 8, 1984; T.D. ATF 280, 54 FR 3594, Jan. 25, 1989; T.D. 
ATF-339, 58 FR 21232, Apr. 19, 1993]



Sec. 7.55  Comparative advertising.

    (a) General. Comparative advertising shall not be disparaging of a 
competitor's product.
    (b) Taste tests. (1) Taste test results may be used in 
advertisements comparing competitors' products unless they are 
disparaging, deceptive, or likely to mislead the consumer.
    (2) The taste test procedure used shall meet scientifically accepted 
procedures. An example of a scientifically accepted procedure is 
outlined in the Manual on Sensory Testing Methods, ASTM Special 
Technical Publication 434, published by the American Society for Testing 
and Materials, 1916 Race Street, Philadelphia, Pennsylvania 19103, ASTM, 
1968, Library of Congress Catalog Card Number 68-15545.
    (3) A statement shall appear in the advertisement providing the name 
and address of the testing administrator.

[T.D. ATF-180, 49 FR 31676, Aug. 8, 1984]



                      Subpart G--General Provisions



Sec. 7.60  Exports.

    This part shall not apply to malt beverages exported in bond.



     Subpart H--Interim Regulations for Alcoholic Content Statements



Sec. 7.71  Alcoholic content.

    (a) General. Alcoholic content and the percentage and quantity of 
the original gravity or extract may be stated on a label unless 
prohibited by State law. When alcoholic content is stated, and the 
manner of statement is not required under State law, it shall be stated 
as prescribed in paragraph (b) of this section.
    (b) Form of statement. (1) Statement of alcoholic content shall be 
expressed in percent alcohol by volume, and not by percent by weight, 
proof, or by maximums or minimums.
    (2) For malt beverages containing 0.5 percent or more alcohol by 
volume, statements of alcoholic content shall be expressed to the 
nearest one-tenth of a percent, subject to the tolerance permitted by 
paragraph (c) (1) and (2) of this section. For malt beverages containing 
less than 0.5 percent alcohol by volume, alcoholic content may be 
expressed in one-hundredths of a percent, subject to the tolerance 
permitted in paragraph (c)(3) of this section.
    (3) Alcoholic content shall be expressed in the following fashion: 
``alcohol--percent by volume,'' ``alcohol by volume--percent,'' ``--
percent alcohol by volume,'' or ``--percent alcohol/volume.'' The 
abbreviations ``alc'' and ``vol'' may be used in lieu of the words 
``alcohol'' and ``volume,'' and the symbol ``%'' may be used in lieu of 
the word ``percent.''
    (c) Tolerances. (1) For malt beverages containing 0.5 percent or 
more alcohol by volume, a tolerance of 0.3 percent will be permitted, 
either above or below the stated percentage of alcohol. Any malt 
beverage which is labeled as containing 0.5 percent or more alcohol by 
volume may not contain less than 0.5 percent alcohol by volume, 
regardless of any tolerance.
    (2) For malt beverages which are labeled as ``low alcohol'' or 
``reduced alcohol'' under paragraph (d) of this section, the actual 
alcoholic content may not equal or exceed 2.5 percent alcohol by volume, 
regardless of any tolerance permitted by paragraph (c)(1) of this 
section.

[[Page 97]]

    (3) For malt beverages containing less than 0.5 percent alcohol by 
volume, the actual alcoholic content may not exceed the labeled 
alcoholic content. A malt beverage may not be labeled with an alcoholic 
content of 0.0 percent alcohol by volume unless it is also labeled as 
``alcohol free'' and contains no alcohol.
    (d) Low alcohol and reduced alcohol. The terms ``low alcohol'' or 
``reduced alcohol'' may be used only on malt beverages containing less 
than 2.5 percent alcohol by volume.
    (e) Non-alcoholic. The term ``non-alcoholic'' may be used on malt 
beverages, provided the statement ``contains less than 0.5 percent (or 
.5%) alcohol by volume'' appears in direct conjunction with it, in 
readily legible printing and on a completely contrasting background.
    (f) Alcohol free. The term ``alcohol free'' may be used only on malt 
beverages containing no alcohol.

[T.D. ATF-339, 58 FR 21232, Apr. 19, 1993]



PART 8--EXCLUSIVE OUTLETS--Table of Contents




                     Subpart A--Scope of Regulations

Sec.
8.1  General.
8.2  Territorial extent.
8.3  Application.
8.4  Jurisdictional limits.
8.5  Delegations of the Director.
8.6  Administrative provisions.

                         Subpart B--Definitions

8.11  Meaning of terms.

                     Subpart C--Prohibited Practices

8.21  General.
8.22  Contracts to purchase distilled spirits, wine, or malt beverages.
8.23  Third party arrangements.

                          Subpart D--Exclusion

8.51  Exclusion, in general.
8.52  Practices which result in exclusion.
8.53  Practice not resulting in exclusion.
8.54  Criteria for determining retailer independence.

    Authority: 15 U.S.C. 49-50; 27 U.S.C. 202 and 205; 44 U.S.C. 
3504(h).

    Source: T.D. ATF-74, 45 FR 63256, Sept. 23, 1980, unless otherwise 
noted.



                     Subpart A--Scope of Regulations



Sec. 8.1  General.

    The regulations in this part, issued pursuant to section 105 of the 
Federal Alcohol Administration Act (27 U.S.C. 205), specify arrangements 
which are exclusive outlets under section 105(a) of the Act and criteria 
for determining whether a practice is a violation of section 105(a) of 
the Act. This part does not attempt to enumerate all of the practices 
prohibited by section 105(a) of the Act. Nothing in this part shall 
operate to exempt any person from the requirements of any State law or 
regulation.

[T.D. ATF-364, 60 FR 20425, Apr. 26, 1995]



Sec. 8.2  Territorial extent.

    This part applies to the several States of the United States, the 
District of Columbia, and Puerto Rico.



Sec. 8.3  Application.

    (a) General. This part applies only to transactions between industry 
members and retailers. It does not apply to transactions between two 
industry members; for example, between a producer and a wholesaler.
    (b) Transactions involving State agencies. The regulations in this 
part apply only to transactions between industry members and State 
agencies operating as retailers as defined in this part. The regulations 
do not apply to State agencies with regard to their wholesale dealings 
with retailers.



Sec. 8.4  Jurisdictional limits.

    (a) General. The regulations in this part apply where:
    (1) The industry member requires, by agreement or otherwise, a 
retailer to purchase distilled spirits, wine, or malt beverages from 
such industry member to the exclusion in whole or in part of products 
sold or offered for sale by other persons in interstate or foreign 
commerce; and
    (2) If: (i) The requirement is made in the course of interstate or 
foreign commerce; or
    (ii) The industry member engages in the practice of using a 
requirement to

[[Page 98]]

such an extent as substantially to restrain or prevent transactions in 
interstate or foreign commerce in any such products; or
    (iii) The direct effect of the requirement is to prevent, deter, 
hinder, or restrict other persons from selling or offering for sale any 
such products to such retailer in interstate or foreign commerce.
    (b) Malt beverages. In the case of malt beverages, this part applies 
to transactions between a retailer in any State and a brewer, importer, 
or wholesaler of malt beverages inside or outside such State only to the 
extent that the law of such State imposes requirements similar to the 
requirements of section 5(a) of the Federal Alcohol Administration Act 
(27 U.S.C. 205(a)), with respect to similar transactions between a 
retailer in such State and a brewer, importer, or wholesaler of malt 
beverages in such State.



Sec. 8.5  Delegations of the Director.

    Most of the regulatory authorities of the Director contained in this 
part 8 are delegated to appropriate ATF officers. These ATF officers are 
specified in ATF Order 1130.7, Delegation Order--Delegation of the 
Director's Authorities in 27 CFR parts 6, 8, 10 and 11. ATF delegation 
orders, such as ATF Order 1130.7, are available to any interested person 
by mailing a request to the ATF Distribution Center, P.O. Box 5950, 
Springfield, Virginia 22150-5190, or by accessing the ATF web site 
(http://www.atf.treas.gov/).

[T.D. ATF-428, 65 FR 52020, Aug. 28, 2000]



Sec. 8.6  Administrative provisions.

    (a) General. The Act makes applicable the provisions including 
penalties of sections 49 and 50 of Title 15, United States Code, to the 
jurisdiction, powers and duties of the Director under this Act, and to 
any person (whether or not a corporation) subject to the provisions of 
law administered by the Director under this Act. The Act also provides 
that the Director is authorized to require, in such manner and such form 
as he or she shall prescribe, such reports as are necessary to carry out 
the powers and duties under this chapter.
    (b) Examination and subpoena. Any appropriate ATF officer shall at 
all reasonable times have access to, for the purpose of examination, and 
the right to copy any documentary evidence of any person, partnership, 
or corporation being investigated or proceeded against. An appropriate 
ATF officer shall also have the power to require by subpoena the 
attendance and testimony of witnesses and the production of all such 
documentary evidence relating to any matter under investigation, upon a 
satisfactory showing the requested evidence may reasonably be expected 
to yield information relevant to any matter being investigated under the 
Act.
    (c) Reports required by the appropriate ATF officer--(1) General. 
The appropriate ATF officer may, as part of a trade practice 
investigation of an industry member, require such industry member to 
submit a written report containing information on sponsorships, 
advertisements, promotions, and other activities pertaining to its 
business subject to the Act conducted by, or on behalf of, or benefiting 
the industry member.
    (2) Preparation. The report will be prepared by the industry member 
in letter form, executed under the penalties of perjury, and will 
contain the information specified by the appropriate ATF officer. The 
period covered by the report will not exceed three years.
    (3) Filing. The report will be filed in accordance with the 
instructions of the appropriate ATF officer.

(Approved by the Office of Management and Budget under control number 
1512-0392)

[T.D. ATF-364, 60 FR 20425, Apr. 26, 1995. Redesignated and amended by 
T.D. ATF-428, 65 FR 52020, Aug. 28, 2000]



                         Subpart B--Definitions



Sec. 8.11  Meaning of terms.

    As used in this part, unless the context otherwise requires, terms 
have the meanings given in this section. Any other term defined in the 
Federal Alcohol Administration Act and used in this part shall have the 
meaning assigned to it by that Act.
    Act. The Federal Alcohol Administration Act.

[[Page 99]]

    Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this part by ATF Order 
1130.7, Delegation Order--Delegation of the Director's Authorities in 27 
CFR parts 6, 8, 10 and 11.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC.
    Industry member. Any person engaged in business as a distiller, 
brewer, rectifier, blender, or other producer, or as an importer or 
wholesaler, of distilled spirits, wine or malt beverages, or as a 
bottler, or warehouseman and bottler, of distilled spirits; industry 
member does not include an agency of a State or political subdivision 
thereof, or an officer or employee of such agency.
    Product. Distilled spirits, wine or malt beverages, as defined in 
the Federal Alcohol Administration Act.
    Retailer. Any person engaged in the sale of distilled spirits, wine 
or malt beverages to consumers. A wholesaler who makes incidental retail 
sales representing less than five percent of the wholesaler's total 
sales volume for the preceding two-month period shall not be considered 
a retailer with respect to such incidental sales.

T.D. ATF-74, 45 FR 63256, Sept. 23, 1980, as amended by T.D. ATF-364, 60 
FR 20425, Apr. 26, 1995; T.D. ATF-428, 65 FR 52020, Aug. 28, 2000]



                     Subpart C--Prohibited Practices



Sec. 8.21  General.

    It is unlawful for an industry member to require, by agreement or 
otherwise, that any retailer purchase distilled spirits, wine, or malt 
beverages from the industry member to the exclusion, in whole or in 
part, of products sold or offered for sale by other persons in 
interstate or foreign commerce. This prohibition includes purchases 
coerced by industry members, through acts or threats of physical or 
economic harm, as well as voluntary industry member-retailer purchase 
agreements.



Sec. 8.22  Contracts to purchase distilled spirits, wine, or malt beverages.

    Any contract or agreement, written or unwritten, which has the 
effect of requiring the retailer to purchase distilled spirits, wine, or 
malt beverages from the industry member beyond a single sales 
transaction is prohibited. Examples of such contracts are:
    (a) An advertising contract between an industry member and a 
retailer with the express or implied requirement of the purchase of the 
advertiser's products; or
    (b) A sales contract awarded on a competitive bid basis which has 
the effect of prohibiting the retailer from purchasing from other 
industry members by:
    (1) Requiring that for the period of the agreement, the retailer 
purchase a product or line of products exclusively from the industry 
member; or
    (2) Requiring that the retailer purchase a specific or minimum 
quantity during the period of the agreement.



Sec. 8.23  Third party arrangements.

    Industry member requirements, by agreement or otherwise, with non-
retailers which result in a retailer being required to purchase the 
industry member's products are within the exclusive outlet provisions. 
These industry member requirements are covered whether the agreement or 
other arrangement originates with the industry member or the third 
party. For example, a supplier enters into a contractual agreement or 
other arrangement with a third party. This agreement or arrangement 
contains an industry member requirement as described above. The third 
party, a ballclub, or municipal or private corporation, not acting as a 
retailer, leases the concession rights and is able to control the 
purchasing decisions of the retailer. The third party, as a result of 
the requirement, by agreement or otherwise, with the industry member, 
requires the retailer to purchase the industry member's products to the 
exclusion, in whole or in part, of products sold or offered for sale by 
other persons in interstate or foreign commerce. The business 
arrangements entered into by the industry member and the third party

[[Page 100]]

may consist of such things as sponsoring radio or television 
broadcasting, paying for advertising, or providing other services or 
things of value.

[T.D. ATF-364, 60 FR 20425, Apr. 26, 1995]



                          Subpart D--Exclusion

    Source: T.D. ATF-364, 60 FR 20425, Apr. 26, 1995, unless otherwise 
noted.



Sec. 8.51  Exclusion, in general.

    (a) Exclusion, in whole or in part occurs:
    (1) When a practice by an industry member, whether direct, indirect, 
or through an affiliate, places (or has the potential to place) retailer 
independence at risk by means of a tie or link between the industry 
member and retailer or by any other means of industry member control 
over the retailer, and
    (2) Such practice results in the retailer purchasing less than it 
would have of a competitor's product.
    (b) Section 8.52 lists practices that result in exclusion. Section 
8.53 lists practices not resulting in exclusion. Section 8.54 lists the 
criteria used for determining whether other practices can put retailer 
independence at risk.



Sec. 8.52  Practices which result in exclusion.

    The practices specified in this section result in exclusion under 
section 105(a) of the Act. The practices specified here are examples and 
do not constitute a complete list of such practices:
    (a) Purchases of distilled spirits, wine or malt beverages by a 
retailer as a result, directly or indirectly, of a threat or act of 
physical or economic harm by the selling industry member.
    (b) Contracts between an industry member and a retailer which 
require the retailer to purchase distilled spirits, wine, or malt 
beverages from that industry member and expressly restrict the retailer 
from purchasing, in whole or in part, such products from another 
industry member.



Sec. 8.53  Practice not resulting in exclusion.

    The practice specified in this section is deemed not to result in 
exclusion under section 105(a) of the Act: a supply contract for one 
year or less between the industry member and retailer under which the 
industry member agrees to sell distilled spirits, wine, or malt 
beverages to the retailer on an ``as needed'' basis provided that the 
retailer is not required to purchase any minimum quantity of such 
product.



Sec. 8.54  Criteria for determining retailer independence.

    The criteria specified in this section are indications that a 
particular practice, other than those in Secs. 8.52 and 8.53, places 
retailer independence at risk. A practice need not meet all of the 
criteria specified in this section in order to place retailer 
independence at risk.
    (a) The practice restricts or hampers the free economic choice of a 
retailer to decide which products to purchase or the quantity in which 
to purchase them for sale to consumers.
    (b) The industry member obligates the retailer to participate in the 
promotion to obtain the industry member's product.
    (c) The retailer has a continuing obligation to purchase or 
otherwise promote the industry member's product.
    (d) The retailer has a commitment not to terminate its relationship 
with the industry member with respect to purchase of the industry 
member's products.
    (e) The practice involves the industry member in the day-to-day 
operations of the retailer. For example, the industry member controls 
the retailer's decisions on which brand of products to purchase, the 
pricing of products, or the manner in which the products will be 
displayed on the retailer's premises.
    (f) The practice is discriminatory in that it is not offered to all 
retailers in the local market on the same terms without business reasons 
present to justify the difference in treatment.

[[Page 101]]



PART 9--AMERICAN VITICULTURAL AREAS--Table of Contents




                      Subpart A--General Provisions

Sec.
9.1  Scope.
9.2  Territorial extent.
9.3  Relation to parts 4 and 70 of this chapter.

                         Subpart B--Definitions

9.11  Meaning of terms.

             Subpart C--Approved American Viticultural Areas

9.21  General.
9.22  Augusta.
9.23  Napa Valley.
9.24  Chalone.
9.25  San Pasqual Valley.
9.26  Guenoc Valley.
9.27  Lime Kiln Valley.
9.28  Santa Maria Valley.
9.29  Sonoma Valley.
9.30  North Coast.
9.31  Santa Cruz Mountains.
9.32  Los Carneros.
9.33  Fennville.
9.34  Finger Lakes.
9.35  Edna Valley.
9.36  McDowell Valley.
9.37  California Shenandoah Valley.
9.38  Cienega Valley.
9.39  Paicines.
9.40  Leelanau Peninsula.
9.41  Lancaster Valley.
9.42  Cole Ranch.
9.43  Rocky Knob.
9.44  Solano County Green Valley.
9.45  Suisun Valley.
9.46  Livermore Valley.
9.47  Hudson River Region.
9.48  Monticello.
9.49  Central Delaware Valley.
9.50  Temecula.
9.51  Isle St. George.
9.52  Chalk Hill.
9.53  Alexander Valley.
9.54  Santa Ynez Valley.
9.55  Bell Mountain.
9.56  San Lucas.
9.57  Sonoma County Green Valley.
9.58  Carmel Valley.
9.59  Arroyo Seco.
9.60  Shenandoah Valley.
9.61  El Dorado.
9.62  Loramie Creek.
9.63  Linganore.
9.64  Dry Creek Valley.
9.65  North Fork of Roanoke.
9.66  Russian River Valley.
9.67  Catoctin.
9.68  Merritt Island.
9.69  Yakima Valley.
9.70  Northern Sonoma.
9.71  Hermann.
9.72  Southeastern New England.
9.73  Martha's Vineyard.
9.74  Columbia Valley.
9.75  Central Coast.
9.76  Knights Valley.
9.77  Altus.
9.78  Ohio River Valley.
9.79  Lake Michigan Shore.
9.80  York Mountain.
9.81  Fiddletown.
9.82  Potter Valley.
9.83  Lake Erie.
9.84  Paso Robles.
9.85  Willow Creek.
9.86  Anderson Valley.
9.87  Grand River Valley.
9.88  Pacheco Pass.
9.89  Umpqua Valley.
9.90  Willamette Valley.
9.91  Walla Walla Valley.
9.92  Madera.
9.93  Mendocino.
9.94  Howell Mountain.
9.95  Clarksburg.
9.96  Mississippi Delta.
9.97  Sonoita.
9.98  Monterey.
9.99  Clear Lake.
9.100  Mesilla Valley.
9.101  The Hamptons, Long Island.
9.102  Sonoma Mountain.
9.103  Mimbres Valley.
9.104  South Coast.
9.105  Cumberland Valley.
9.106  North Yuba.
9.107  Lodi.
9.108  Ozark Mountain.
9.109  Northern Neck George Washington Birthplace.
9.110  San Benito.
9.111  Kanawha River Valley.
9.112  Arkansas Mountain.
9.113  North Fork of Long Island.
9.114  Old Mission Peninsula.
9.115  Ozark Highlands.
9.116  Sonoma Coast.
9.117  Stags Leap District.
9.118  Ben Lomond Mountain.
9.119  Middle Rio Grande Valley.
9.120  Sierra Foothills.
9.121  Warren Hills.
9.122  Western Connecticut Highlands.
9.123  Mt. Veeder.
9.124  Wild Horse Valley.
9.125  Fredericksburg in the Texas Hill Country.
9.126  Santa Clara Valley.
9.127  Cayuga Lake.
9.129  Arroyo Grande Valley.
9.130  San Ysidro District.
9.131  Mt. Harlan.
9.132  Rogue Valley.
9.133  Rutherford.
9.134  Oakville.
9.135  Virginia's Eastern Shore.

[[Page 102]]

9.136  Texas Hill Country.
9.137  Grand Valley.
9.138  Benmore Valley.
9.139  Santa Lucia Highlands.
9.140  Atlas Peak.
9.141  Escondido Valley.
9.143  Spring Mountain District.
9.144  Texas High Plains.
9.145  Dunnigan Hills.
9.146  Lake Wisconsin.
9.147  Hames Valley.
9.148  Seiad Valley.
9.149  St. Helena.
9.150  Cucamonga Valley.
9.151  Puget Sound.
9.152  Malibu-Newton Canyon.
9.153  Redwood Valley.
9.154  Chiles Valley.
9.155  Texas Davis Mountains.
9.156  Diablo Grande.
9.157  San Francisco Bay.
9.158  Mendocino Ridge.
9.159  Yorkville Highlands.
9.160  Yountville.
9.162  Santa Rita Hills.
9.164  River Junction.
9.165  Applegate Valley.
9.166  Diamond Mountain District.
9.167  Red Mountain.
9.168  Fair Play.
9.170  Long Island.
9.172  West Elks.
9.173  Rockpile.

    Authority: 27 U.S.C. 205.

    Source: T.D. ATF-60, 44 FR 56692, Oct. 2, 1979, unless otherwise 
noted.



                      Subpart A--General Provisions



Sec. 9.1  Scope.

    The regulations in this part relate to American viticultural areas.



Sec. 9.2  Territorial extent.

    This part applies to the several States of the United States, the 
District of Columbia, and Puerto Rico.



Sec. 9.3   Relation to parts 4 and 70 of this chapter.

    (a) Procedure. In accordance with Secs. 4.25a(e)(2) and 70.701(c) of 
this chapter, the Director shall receive petitions to establish American 
viticultural areas and shall use the informal rulemaking process, under 
5 U.S.C. 553, in establishing viticultural areas in this part.
    (b) Information to establish an American viticultural area. A 
petition, made in writing, shall contain the following information:
    (1) Evidence that the name of the viticultural area is locally and/
or nationally known as referring to the area specified in the 
application;
    (2) Historical or current evidence that the boundaries of the 
viticultural area are as specified in the application;
    (3) Evidence relating to the geographical features (climate, soil, 
elevation, physical features, etc.) which distinguish the viticultural 
features of the proposed area from surrounding areas;
    (4) The specific boundaries of the viticultural area, based on 
features which can be found on United States Geological Survey 
(U.S.G.S.) maps of the largest applicable scale; and
    (5) A copy of the appropriate U.S.G.S. map(s) with the boundaries 
prominently marked. (For U.S.G.S. maps, write the U.S. Geological 
Survey, Branch of Distribution, Box 25286, Federal Center, Denver, 
Colorado 80225. If the map name is not known, request a map index by 
State.)

[T.D. ATF-60, 44 FR 56692, Oct. 2, 1979, as amended by T.D. ATF-92, 46 
FR 46913, Sept. 23, 1981; T.D. ATF -355, 59 FR 14553, Mar. 29, 1994; 
T.D. ATF-432, 65 FR 69253, Nov. 16, 2000]



                         Subpart B--Definitions



Sec. 9.11  Meaning of terms.

    As used in this part, unless the context otherwise requires, terms 
shall have the meaning ascribed in this section.
    American. Of or relating to the several States, the District of 
Columbia, and Puerto Rico; ``State'' includes the District of Columbia 
and Puerto Rico.
    Approved map. The map used to define the boundaries of an approved 
viticultural area.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC.
    Use of other terms. Any other term defined in the Federal Alcohol 
Administration Act and used in this part shall have the same meaning 
assigned to it by the Act.
    U.S.G.S. The United States Geological Survey.
    Viticultural area. A delimited, grape-growing region distinguishable 
by geographical features, the boundaries of

[[Page 103]]

which have been delineated in subpart C of this part.



             Subpart C--Approved American Viticultural Areas



Sec. 9.21  General.

    The viticultural areas listed in this subpart are approved for use 
as appellations of origin in accordance with part 4 of this chapter.



Sec. 9.22  Augusta.

    (a) Name. The name of the viticultural area described in this 
section is ``Augusta.''
    (b) Approved maps. The approved maps for the Augusta viticultural 
area are two U.S.G.S. maps. They are titled:
    (1) ``Washington East, Missouri'', 7.5 minute quadrangle; and
    (2) ``Labadie, Missouri'', 7.5 minute quadrangle.
    (c) Boundaries. The boundaries of the Augusta viticultural area are 
located in the State of Missouri and are as follows:
    (1) The beginning point of the boundary is the intersection of the 
St. Charles County line, the Warren County line and the Franklin County 
line.
    (2) The western boundary is the St. Charles County-Warren County 
line from the beginning point to the township line identified on the 
approved maps as ``T45N/T44N.''
    (3) The northern boundary is the township line ``T45N/T44N'' from 
the St. Charles County-Warren County line to the range line identified 
on the approved maps as ``R1E/R2E.''
    (4) The eastern boundary is the range line ``R1E/R2E'' from township 
line ``T45N/T44N'' extended to the St. Charles County-Franklin County 
line.
    (5) The southern boundary is the St. Charles County-Franklin County 
line from the extension of range line ``R1E/R2E'' to the beginning 
point.

[T.D. ATF-72, 45 FR 41633, June 20, 1980]



Sec. 9.23  Napa Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Napa Valley.''
    (b) Approved maps. The maps showing the boundaries of the Napa 
Valley viticultural area are the:
    (1) ``Mt. St. Helena'' U.S.G.S. 7.5 minute quadrangle;
    (2) ``Detert Reservoir'' U.S.G.S. 7.5 minute quadrangle;
    (3) ``St. Helena'' U.S.G.S. 15 minute quadrangle;
    (4) ``Jericho Valley'' U.S.G.S. 7.5 minute quadrangle;
    (5) ``Lake Berryessa'' U.S.G.S. 15 minute quadrangle;
    (6) ``Mt. Vaca'' U.S.G.S. 15 minute quadrangle;
    (7) ``Cordelia'' U.S.G.S. 7.5 minute quadrangle;
    (8) ``Cuttings Wharf'' U.S.G.S. 7.5 minute quadrangle; and
    (9) Appropriate Napa County tax assessor's maps showing the Napa 
County-Sonoma County line.
    (c) Boundaries. The Napa Valley viticultural area is located within 
Napa County, California. From the beginning point at the conjuction of 
the Napa County-Sonoma County line and the Napa County-Lake County line, 
the boundary runs along--
    (1) The Napa County-Lake County line;
    (2) Putah Creek and the western and southern shores of Lake 
Berryessa;
    (3) The Napa County-Solano County line; and
    (4) The Napa County-Sonoma County line to the beginning point.

[T.D. ATF-79, 46 FR 9063, Jan. 28, 1981, as amended by T.D. ATF-201, 50 
FR 12533, Mar. 29, 1985]



Sec. 9.24  Chalone.

    (a) Name The name of the viticultural area described in this section 
is ``Chalone.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Chalone viticultural area are four U.S.G.S. 7.5 minute 
quadrangle maps. They are titled:
    (1) ``Mount Johnson, California, 1968'';
    (2) ``Bickmore Canyon, California, 1968'';
    (3) ``Soledad, California, 1955''; and
    (4) ``North Chalone Peak, California, 1969.''
    (c) Boundaries. The Chalone viticultural area includes 8640 acres, 
primarily located in Monterey County, California, with small portions in 
the north and east located in San Benito

[[Page 104]]

County, California. The boundaries of the Chalone viticultural area 
encompass:
    (1) Sections 35 and 36, in their entirety, of T.16 S., R.6.E.;
    (2) Sections 1, 2 and 12, in their entirety, of T.17 S., R.6 E.;
    (3) Sections 6, 7, 8, 9, 16, and 17, in their entirety, the western 
half of Section 5, and the eastern half of Section 18 of T.17 S., R.7 
E.; and
    (4) Section 31, in its entirety, and the western half of Section 32 
of T.16 S., R.7 E.

[T.D. ATF-107, 47 FR 25519, June 14, 1982]



Sec. 9.25  San Pasqual Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``San Pasqual Valley.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries are three U.S.G.S. maps. They are entitled:
    (1) ``Escondido Quadrangle, California--San Diego County'', 7.5 
minute series;
    (2) ``San Pasqual Quadrangle, California--San Diego County'', 7.5 
minute series;
    (3) ``Valley Center Quadrangle, California--San Diego County'', 7.5 
minute series.
    (c) Boundaries. The San Pasqual Valley viticultural area is located 
in San Diego County, California.
    (1) From the beginning point at the intersection of Interstate 15 
and the 500-foot contour line, north of the intersection of point of 
Interstate 15 and T.12 S./T.13 S., the boundary line follows the 500-
foot contour line to;
    (2) The point nearest San Pasqual Road and the 500-foot contour 
line, the boundary line follows the Escondido Corporate Boundary line to 
the 500-foot contour line on the hillock and circumnavigates said 
hillock back to the Escondido Corporate Boundary line and returns to the 
500-foot contour line nearest to San Pasqual Road and;
    (3) Continues along the 500-foot contour line completely around San 
Pasqual Valley to a point where the 500-foot contour line intersects 
with Pomerado Road, at this point, the boundary line, in a straight, 
northwesterly direction crosses over to;
    (4) The 500-foot contour line of Battle Mountain, following the 500-
foot contour line around Battle Mountain to point nearest to Interstate 
15, at which point the boundary line crosses over to Interstate 15; and
    (5) Continues northward along Interstate 15 to the point of 
beginning.

[T.D. ATF-92, 46 FR 41493, Sept. 23, 1981]



Sec. 9.26  Guenoc Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Guenoc Valley.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Guenoc Valley viticultural area are four USGS maps. 
They are titled:
    (1) ``Middletown Quadrangle, California-Lake Co.,'' 7.5 minute 
series;
    (2) ``Jericho Valley Quadrangle, California,'' 7.5 minute series;
    (3) ``Detert Reservoir Quadrangle, California,'' 7.5 minute series; 
and
    (4) ``Aetna Springs Quadrangle, California,'' 7.5 minute series.
    (c) Boundaries. The Guenoc Valley viticultural area is located 
within Lake County, California. The beginning point of the boundary is 
Station 20 of Denton's Survey of Guenoc Rancho, presently marked by a 
1\1/2\ inch galvanized pipe located atop Jim Davis Peak. On the approved 
maps, Jim Davis Peak is the unnamed peak (elevation 1,455 feet) located 
on the western boundary of Section 35, Township 11 North, Range 6 West. 
From this beginning point the boundary runs:
    (1) South 07 deg.49[min]34[sec] East, 9,822.57 feet to the USGS 
triangulation station ``Guenoc;''
    (2) Then, South 29 deg.14[min]31[sec] West, 10,325.08 feet;
    (3) Then, South 00 deg.00[min] West, 2,100.00 feet;
    (4) Then, North 90 deg.00[min] West, 4,150.00 feet;
    (5) Then, North 24 deg.23[min]11[sec] West, 16,469.36 feet;
    (6) Then, North 75 deg.47[min]20[sec] East, 7,943.08 feet; and
    (7) Then, North 60 deg.47[min]00[sec] East, 7,970.24 feet to the 
beginning point.

[T.D. ATF-95, 46 FR 56786, Nov. 19, 1981]

[[Page 105]]



Sec. 9.27  Lime Kiln Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Lime Kiln Valley.''
    (b) Approved Map. The appropriate map for determining the boundaries 
of the Lime Kiln Valley Viticultural area is: ``Paicines Quadrangle, 
California,'' 1968, 7.5 minute series.
    (c) Boundaries. The Lime Kiln Valley viticultural area is located in 
San Benito County, California. From the beginning point at the 
intersection of Thompson Creek and Cienega Road, the boundary proceeds, 
in a straight line to the summit of an unnamed peak (1,288 feet) in the 
northwest quarter of Section 28, T.14 S./R.6 E.;
    (1) Thence in a straight line from the summit of the unnamed peak 
(1,288 feet) to a point where it intersects the 1,400-foot contour line, 
by the elevation marker, in the southwest quarter of T.14 S./R.6 E, 
Section 28;
    (2) Thence following the 1,400-foot contour line through the 
following sections; Sections 28, 29, and 30, T.14 S./R.6 E.; Section 25, 
T.14 S./R.5 E.; Sections 30, 19, 20, and returning to 19, T.14 S./R.6 
E., to a point where the 1,400-foot contour line intersects with the 
section line between Sections 19 and 18, T.14 S./R.6 E.;
    (3) Thence in a straight line to the Cienega School Building along 
Cienega Road;
    (4) Thence along Cienega Road to the point of beginning.

[T.D. ATF-106, 47 FR 24296, June 4, 1982, as amended by T.D. ATF-249, 52 
FR 5956, Feb. 27, 1987]



Sec. 9.28  Santa Maria Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Santa Maria Valley.''
    (b) Approved maps. The approved maps for the Santa Maria Valley are 
two U.S.G.S. maps entitled:
    (1) ``Santa Maria'', N.I. 10-6, 9, series V 502, scale 1: 250,000; 
and
    (2) ``San Luis Obispo'', N.I. 10-3, series V 502, scale 1: 250,000.
    (c) Boundaries. The boundaries of the Santa Maria Valley 
viticultural area are located in portions of Santa Barbara and San Luis 
Obispo Counties, California, and are as follows:
    (1) Beginning at a point east of Orcutt where Highway U.S. 101 and 
the unnamed road (known locally as Clark Road) intersects; Thence 
northerly along U.S. 101 to a point where it intersects with Highway 
166;
    (2) Thence along Highway 166 in a general easterly direction to a 
point where Highway 166 intersects with the section line at the 
southwest section of Chimney Canyon;
    (3) Thence in a straight, southerly, line to the summit of Los 
Coches Mountain (3016 feet);
    (4) Thence in a straight, southeasterly, line to the summit of Bone 
Mountain (2822 feet);
    (5) Thence in a straight, south-southwesterly, line to the 
intersection of two unnamed roads (known locally as Alisos Canyon Road 
and Foxen Canyon Road) in Foxen Canyon at the elevation marker of 1116 
feet;
    (6) Thence along the unnamed road (known locally as Foxen Canyon 
Road) in a northwesterly direction to the community of Sisquoc; and
    (7) Thence in a westerly direction along the unnamed road (known 
locally as Clark Road) to the point of beginning.

[T.D. ATF-89, 46 FR 39812, Aug. 5, 1981, as amended by T.D. ATF-216, 50 
FR 43130, Oct. 24, 1985]



Sec. 9.29  Sonoma Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Sonoma Valley.''
    (b) Approved maps. The maps showing the boundaries of the Sonoma 
valley viticultural area are entitled:
    (1) ``Cuttings Wharf, Calif.'', 1949 (photorevised 1968 and 
photoinspected 1973), 7.5 minute quadrangle;
    (2) ``Petaluma Point, Calif.'', 1959 (photorevised 1968 and 
photoinspected 1973), 7.5 minute quadrangle;
    (3) ``Sears Point, Calif.'', 1951 (photorevised 1968), 7.5 minute 
quadrangle;
    (4) ``Petaluma River, Calif.'', 1954 (photorevised 1968 and 1973), 
7.5 minute quadrangle;
    (5) ``Glen Ellen, Calif.'', 1954 (photorevised 1968 and 
photoinspected 1973), 7.5 minute quadrangle;
    (6) ``Cotati, Calif.'', 1954 (photorevised 1968 and 1973), 7.5 
minute quadrangle;

[[Page 106]]

    (7) ``Santa Rosa, Calif.'', 1954 (photorevised 1968 and 1973), 7.5 
minute quadrangle;
    (8) ``Kenwood, Calif.'', 1954 (photorevised 1968 and photoinspected 
1973), 7.5 minute quadrangle; and
    (9) Appropriate Sonoma County tax assessor's maps showing the Sonoma 
County-Napa County line.
    (c) Boundaries. The Sonoma Valley viticultural area is located 
within Sonoma County, California. From the beginning point at the 
junction of Tolay Creek and San Pablo Bay, the boundary runs:
    (1) Northerly along Tolay Creek to Highway 37;
    (2) Westerly along Highway 37 to its junction with Highway 121;
    (3) Northwesterly in a straight line to the peak of Wildcat 
Mountain;
    (4) Northwesterly in a straight line to Sonoma Mountain to the 
horizontal control station at elevation 2,271 feet;
    (5) Northwesterly in a straight line to the peak of Taylor Mountain;
    (6) Northeasterly in a straight line to the point at which Los 
Alamos Road joins Highway 12;
    (7) Easterly in a straight line to the peak of Buzzard Peak;
    (8) Easterly in a straight line to the peak of Mount Hood;
    (9) Easterly in a straight line to an unnamed peak located on the 
Sonoma County-Napa County line and identified as having an elevation of 
2,530 feet (This unnamed peak is located in the northeast quarter of 
Section 9, Township 7 North, Range 6 West, Mt. Diablo Base and 
Meridian);
    (10) Southerly along the Sonoma County-Napa County line to the point 
at which Sonoma Creek enters San Pablo Bay; and
    (11) Southwesterly along the shore of San Pablo Bay to the beginning 
point.

[T.D. ATF-96, 46 FR 59238, Dec. 4, 1981, as amended by T.D. ATF-201, 50 
FR 12533, Mar. 29, 1985; T.D. ATF-249, 52 FR 5956, Feb. 27, 1987]



Sec. 9.30  North Coast.

    (a) Name. The name of the viticultural area described in this 
section is ``North Coast.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the North Coast viticultural area are three U.S.G.S. maps. 
They are entitled:
    (1) ``San Francisco, Cal.'', scaled 1:250,000, edition of 1956, 
revised 1980;
    (2) ``Santa Rosa, Cal.'', scaled 1:250,000, edition of 1958, revised 
1970; and
    (3) ``Ukiah, Cal.'', scaled 1:250,000, edition of 1957, revised 
1971.
    (c) Boundaries. The North Coast viticultural area is located in 
Lake, Marin, Mendocino, Napa, Solano, and Sonoma Counties, California. 
The beginning point is found on the ``Santa Rosa, California'' U.S.G.S. 
map at the point where the Sonoma and Marin County boundary joins the 
Pacific Ocean.
    (1) Then east and southeast following the boundary between Marin and 
Sonoma Counties to the point where Estero Americano/Americano Creek 
crosses State Highway 1 east of Valley Ford;
    (2) Then southeast in a straight line for approximately 22.0 miles 
to the peak of Barnabe Mountain (elevation 1466 feet);
    (3) Then southeast in a straight line for approximately 10.0 miles 
to the peak of Mount Tamalpais (western peak, elevation 2604 feet);
    (4) Then northeast in a straight line for approximately 5.8 miles to 
the confluence of San Rafael Creek and San Rafael Bay in San Rafael;
    (5) Then north and northeast following San Rafael Bay and San Pablo 
Bay to Sonoma Creek;
    (6) Then north following Sonoma Creek to the boundary between Napa 
and Solano Counties;
    (7) Then east and north following the boundary between Napa and 
Solano Counties to the right-of-way of the Southern Pacific Railroad in 
Jameson Canyon;
    (8) Then east following the right-of-way of the Southern Pacific 
Railroad to the junction with the Southern Pacific in Suisun City;
    (9) Then north in a straight line for approximately 5.5 miles to the 
extreme southeastern corner of Napa County;
    (10) Then north following the boundary between Napa and Solano 
Counties to the Monticello Dam at the eastern end of Lake Berryessa;

[[Page 107]]

    (11) Then following the south and west shore of Lake Berryessa to 
Putah Creek;
    (12) Then northwest following Putah Creek to the boundary between 
Napa and Lake Counties;
    (13) Then northwest in a straight line for approximately 11.4 miles 
to the peak of Brushy Sky High Mountain (elevation 3196 feet);
    (14) Then northwest in a straight line for approximately 5.0 miles 
to Bally Peak (elevation 2288 feet);
    (15) Then northwest in a straight line for approximately 6.6 miles 
to the peak of Round Mountain;
    (16) Then northwest in a straight line for approximately 5.5 miles 
to Evans Peak;
    (17) Then northwest in a straight line for approximately 5.0 miles 
to Pinnacle Rock Lookout;
    (18) Then northwest in a straight line for approximately 8.0 miles 
to Youngs Peak (elevation 3683 feet);
    (19) Then northwest in a straight line for approximately 11.2 miles 
to the peak of Pine Mountain (elevation 4057 feet);
    (20) Then northwest in a straight line for approximately 12.1 miles 
to the peak of Sanhedrin Mountain (elevation 6175 feet);
    (21) Then northwest in a straight line for approximately 9.4 miles 
to the peak of Brushy Mountain (elevation 4864 feet);
    (22) Then southwest in a straight line for approximately 17.6 miles 
to the confluence of Redwood Creek and the Noyo River;
    (23) Then west following the Noyo River to its mouth at the Pacific 
Ocean;
    (24) Then southeast following the Pacific Ocean shoreline to the 
point of beginning.

[T.D. ATF-145, 48 FR 42977, Sept. 21, 1983]



Sec. 9.31  Santa Cruz Mountains.

    (a) Name. The name of the viticultural area described in this 
section is ``Santa Cruz Mountains.''
    (b) Approved maps. The 24 approved U.S.G.S. maps for determining the 
boundaries are 23 7.5 minute scale and one 5 x 11 minute scale.
    (1) ``Ano Nuevo Quadrangle, California'';
    (2) ``Big Basin Quadrangle, California'';
    (3) ``Castle Rock Ridge Quadrangle, California'';
    (4) ``Cupertino Quadrangle, California'';
    (5) ``Davenport Quadrangle, California--Santa Cruz County'';
    (6) ``Felton Quadrangle, California--Santa Cruz County'';
    (7) ``Franklin Point Quadrangle, California'';
    (8) ``Half Moon Bay Quadrangle, California--San Mateo County'';
    (9) ``La Honda Quadrangle, California-- San Mateo County'';
    (10) ``Laurel Quadrangle, California'';
    (11) ``Loma Prieta Quadrangle, California'';
    (12) ``Los Gatos Quadrangle, California'';
    (13) ``Mt. Madonna Quadrangle, California'';
    (14) ``Mindego Hill Quadrangle, California'';
    (15) ``Morgan Hill Quadrangle, California--Santa Clara County'';
    (16) ``Palo Alto Quadrangle, California'';
    (17) ``San Gregorio Quadrangle, California--San Mateo County'';
    (18) ``San Mateo Quadrangle, California--San Mateo County'';
    (19) ``Santa Teresa Hills Quadrangle--Santa Clara County'';
    (20) ``Soquel Quadrangle, California--Santa Cruz County'';
    (21) ``Watsonville East Quadrangle, California'';
    (22) ``Watsonville West Quadrangle, California'';
    (23) ``Woodside Quadrangle, California--San Mateo County''; and
    (24) One 5 x 11 minute series map entitled: ``Santa Cruz, 
California.''
    (c) Boundaries. The Santa Cruz Mountains viticultural area is 
located in portions of San Mateo, Santa Clara, and Santa Cruz Counties, 
California.
    (1) From the beginning point where Highway 92 and the 400-foot 
contour line intersect (Half Moon Bay Quadrangle), the boundary line 
follows Highway 92, beginning in a southeasterly direction, to a point 
where Highway 92 and the 400-foot contour line intersect (San Mateo 
Quadrangle);

[[Page 108]]

    (2) Thence along the 400-foot contour line, beginning in a 
southeasterly direction, to a point where the 400-foot contour line and 
Canada Road intersect (Woodside Quadrangle);
    (3) Thence along Canada Road, beginning in a southerly direction, to 
a point where Canada Road and Highway 280 intersect (Woodside 
Quadrangle);
    (4) Thence along Highway 280, beginning in a southeasterly 
direction, to a point where Highway 280 and 84 intersect (Palo Alto 
Quadrangle);
    (5) Thence along Highway 84, beginning in a southwesterly direction, 
to a point where Highway 84 and Mountain Home Road intersect (Woodside 
Quadrangle);
    (6) Thence along Mountain Home Road, beginning in a southerly 
direction, to a point where Mountain Home Road and Portola Road 
intersect (Palo Alto Quadrangle);
    (7) Thence along Portola Road, beginning in a westerly direction, to 
a point where Portola Road and Highway 84 intersect (Woodside 
Quadrangle);
    (8) Thence along Highway 84, beginning in a southwesterly direction, 
to a point where Highway 84 and the 600-foot contour line intersect 
(Woodside Quadrangle);
    (9) Thence along the 600-foot contour line, beginning in a 
northeasterly direction, to a point where the 600-foot contour line and 
Regnart Road intersect (Cupertino Quadrangle);
    (10) Thence along Regnart Road, beginning in a northeasterly 
direction, to a point where Regnart Road and the 400-foot contour line 
intersect (Cupertino Quadrangle);
    (11) Thence along the 400-foot contour line, beginning in a 
southerly direction, to a point where the 400-foot contour line and the 
north section line of Section 35, T. 6 S./R. 2 W, intersect (Cupertino 
Quadrangle);
    (12) Thence along the north section line of Sections 35 and 36, in 
an easterly direction, to a point where the section line and Highway 85 
intersect (Cupertino Quadrangle);
    (13) Thence along Highway 85, in a southerly direction, to a point 
where Highway 85 and the southern section line of Section 36 intersect 
(Cupertino Quadrangle);
    (14) Thence along the section line, in a westerly direction, to a 
point where the section line and the 600-foot contour line intersect 
(Cupertino Quadrangle);
    (15) Thence along the 600-foot contour line, beginning in a 
southerly direction, to a point where the 600-foot contour line and 
Pierce Road intersect (Cupertino Quadrangle);
    (16) Thence along Pierce Road, in a southerly direction, to a point 
where Pierce Road and the 800-foot contour line intersect (Cupertino 
Quadrangle);
    (17) Thence along the 800-foot line, beginning in a northwesterly 
direction, to a point where the 800-foot contour line and the east 
section line of Section 25, T. 10 S./R. 2 E., intersect (Mt. Madonna 
Quadrangle);
    (18) Thence along the east section line, in a southerly direction, 
to a point where this section line and the 800-foot contour line 
intersect (Mt. Madonna Quadrangle);
    (19) Thence along the 800-foot contour line, beginning in a 
southeasterly direction, to a point where the 800-foot contour line and 
Highway 152 intersect (Watsonville East Quadrangle);
    (20) Thence along Highway 152, in a southwesterly direction, to a 
point where Highway 152 and the 400-foot contour line intersect 
(Watsonville East Quadrangle);
    (21) Thence along the 400-foot contour line, beginning in a 
northwesterly direction, to a point where the 400-foot contour line and 
the Felton Empire Road intersect (Felton Quadrangle);
    (22) Thence along Felton Empire Road, in an easterly direction, to a 
point where Felton Empire Road and Highway 9 intersect (Felton 
Quadrangle);
    (23) Thence along Highway 9, in a southerly direction, to a point 
where Highway 9 and Bull Creek intersect (Felton Quadrangle);
    (24) Thence along Bull Creek, beginning in a southwesterly 
direction, to a point where Bull Creek and the 400-foot contour line 
intersect (Felton Quadrangle); and
    (25) Thence along the 400-foot contour line, beginning in a 
southeasterly direction, back to the point of beginning.

[T.D. ATF-98, 46 FR 59240, Dec. 4, 1981]

[[Page 109]]



Sec. 9.32  Los Carneros.

    (a) Name. The name of the viticultural area described in this 
section is ``Los Carneros.''
    (b) Approved maps. The approved maps for the Carneros viticultural 
area are the following U.S.G.S. maps:
    (1) ``Sonoma Quadrangle, California,'' 7.5 minute series 
(topographic), 1951 (photorevised 1968).
    (2) ``Napa Quadrangle, California--Napa Co.,'' 7.5 minute series 
(topographic), 1951 (photorevised 1968 and 1973).
    (3) ``Cuttings Wharf Quadrangle, California,'' 7.5 minute series 
(topographic), 1949 (photorevised 1968; photoinspected 1973).
    (4) ``Sears Point Quadrangle, California,'' 7.5 minute series 
(topographic), 1951 (photorevised 1968).
    (5) ``Petaluma River Quadrangle,California--Sonoma Co.,'' 7.5 minute 
series (topographic), 1954 (photorevised 1980).
    (6) ``Glen Ellen Quadrangle, California--Sonoma Co.,'' 7.5 minute 
series (topographic), 1954 (photorevised 1980).
    (c) Boundaries. The boundaries of the Carneros viticultural area are 
located in Napa and Sonoma Counties, California, and are as follows:
    (1) The point of beginning is the intersection of highway 12/121 and 
the Napa County-Sonoma County line, near the extreme southeast corner of 
the Sonoma Quadrangle map.
    (2) From there, following the Napa County-Sonoma County line 
generally northwestward for about 1.6 miles to the summit of an unnamed 
hill with a marked elevation of 685 ft.
    (3) From there in a straight line northeastward to the summit of 
Milliken Peak (743 ft.), located on the Napa Quadrangle map.
    (4) From there due eastward to the 400 ft. contour line.
    (5) Then following that contour line generally northwestward to 
Carneros Creek (on the Sonoma Quadrangle map).
    (6) Then following the same contour line generally southeastward to 
the range line R. 5 W/R. 4 W (on the Napa Quadrangle map).
    (7) Then continuing to follow the same contour line generally 
northward for about one mile, till reaching a point due west of the 
summit of an unnamed hill having a marked elevation of 446 ft. (That 
hill is about .8 mile southwest of Browns Valley School.)
    (8) From that point due eastward to the summit of that hill.
    (9) From there in a straight line northeastward across Buhman Avenue 
to the summit of an unnamed hill having a marked elevation of 343 ft.
    (10) From there due eastward to the Napa-Entre Napa land grant 
boundary.
    (11) Then northeastward along that land grant boundary to Browns 
Valley Road.
    (12) Then eastward along Browns Valley Road to Highway 29.
    (13) Then southward along Highway 29 to Imola Avenue.
    (14) Then eastward along Imola Avenue to the Napa River.
    (15) Then generally southward along the west bank of the Napa River 
to the Southern Pacific Railroad tracks
    (16) Then generally westward and northwestward along the Southern 
Pacific Railroad tracks to their intersection with the township line T. 
5 N./T. 4 N. (on the Sears Point Quadrangle map).
    (17) From there due westward to the Northwestern Pacific Railroad 
tracks.
    (18) Then generally southward along the Northwestern Pacific 
Railroad tracks to Highway 37.
    (19) The westward along Highway 37 to its intersection with Highway 
121.
    (20) From there northwestward in a straight line to the summit of 
Wildcat Mountain (682 ft.).
    (21) From there northwestward, following a straight line toward the 
summit of Sonoma Mountain (2295 ft.--on the Glenn Ellen Quadrangle map) 
till reaching a point due west of the intersection of Lewis Creek with 
the 400-ft. contour line. (That point is about 4\1/3\ miles southeast of 
Sonoma Mountain.)
    (22) From that point due eastward to Lewis Creek.
    (23) Then generally southeastward along Lewis Creek to Felder Creek.
    (24) Then generally eastward along Felder Creek to Leveroni Road (on 
the Sonoma Quadrangle map).
    (25) Then generally eastward along Leveroni Road to Napa Road.

[[Page 110]]

    (26) Then eastward and southeastward along Napa Road to Highway 12/
121.
    (27) Then eastward along Highway 12/121 to the starting point.

[T.D. ATF-142, 48 FR 37368, Aug. 18, 1983, as amended by T.D. ATF-249, 
52 FR 5956, Feb. 27, 1987]



Sec. 9.33  Fennville.

    (a) Name. The name of the viticultural area described in this 
section is ``Fennville.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Fennville Viticultural Area are three U.S.G.S. maps. 
They are entitled:
    (1) ``Fennville Quadrangle, Michigan-Allegan County,'' 15 minute 
series;
    (2) ``Bangor Quadrangle, Michigan,'' 15 minute series; and
    (3) ``South Haven Quadrangle, Michigan,'' 15 minute series.
    (c) Boundaries. The Fennville viticultural area is primarily located 
in the southwestern portion of Allegan County, Michigan, with a small 
finger extending into the northwest corner of Van Buren County, 
Michigan.
    (1) The western boundary is the eastern shore of Lake Michigan, 
extending from the Black River, at the City of South Haven, north to the 
Kalamazoo River.
    (2) The northern boundary is the Kalamazoo River, extending easterly 
from Lake Michigan to 86 deg.5[min] west longitude.
    (3) The eastern boundary is the 86 deg.5[min] west longitude 
meridian, extending from the Kalamazoo River to the intersection of the 
Middle Fork of the Black River.
    (4) The southern boundary is the Middle Fork of the Black River 
extending westerly from 86 deg.5[min] west longitude until it joins the 
Black River, continuing west along the Black River to the eastern shore 
of Lake Michigan.

[T.D. ATF-91, 46 FR 46320, Sept. 18, 1981]



Sec. 9.34  Finger Lakes.

    (a) Name. The name of the viticultural area described in this 
section is ``Finger Lakes.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Finger Lakes viticultural area are two U.S.G.S. maps 
scaled 1:250,000. They are entitled:
    (1) ``Rochester,'' Location diagram NK 18-1, 1961; and
    (2) ``Elmira,'' Location diagram NK 18-4, 1968.
    (c) Boundaries. The boundaries of the Finger Lakes viticultural 
area, based on landmarks and points of reference found on the approved 
maps, are as follows:
    (1) Starting at the most northwest point, the intersection of the 
Erie Canal and the north/south Conrail line south of the City of 
Rochester.
    (2) Then east along the course of the Erie Canal approximately 56 
miles (45 miles due east) to the intersection of New York State Highway 
89 (NY-89).
    (3) Then south on NY-89 four miles to the intersection of highway 
US-20.
    (4) Then east on US-20 for 36 miles to the intersection of 
interstate 81 (I-81).
    (5) Then south along I-81 for ten miles to NY-281.
    (6) Then south along NY-281 for 20 miles around the western city 
limits of Cortland where NY-281 becomes NY-13.
    (7) Then continuing southwest on NY-13 (through the cities of Dryden 
and Ithaca) approximately 36 miles to the intersection of NY-224.
    (8) Then due west one mile to the southern boundary of Schuyler 
County.
    (9) Then continuing west along this county line 20 miles to the 
community of Meads Creek.
    (10) Then north along the Schuyler-Steuben county line four miles to 
the major east-west power line.
    (11) Then west along the power line for eight miles to the 
intersection of NY-17 (four miles southeast of the community of Bath).
    (12) Then northwest on NY-17 approximately nine miles to the 
intersection of I-390.
    (13) Then northwest on I-390 for 21 miles to the intersection of NY-
36.
    (14) Then north for two miles through the community of Dansville to 
NY-63.
    (15) Then northwest on NY-63 approximately 18 miles to the 
intersection of NY-39, just south of Genesco.
    (16) Then north on NY-39 nine miles to the intersection where the 
west and north/south Conrail lines meet at the community of Avon.

[[Page 111]]

    (17) Then north along the north/south Conrail line for 15 miles to 
the beginning point at the intersection of the Erie Canal.

[T.D. ATF-113, 47 FR 38518, Sept. 1, 1982, as amended by T.D. ATF-249, 
52 FR 5956, Feb. 27, 1987]



Sec. 9.35  Edna Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Edna Valley.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Edna Valley viticultural area for four U.S.G.S. maps, 
They are titled:
    (1) ``San Luis Obispo Quadrangle, California--San Luis Obispo Co.,'' 
7.5 minute series;
    (2) ``Lopez Mtn, Quadrangle, California--San Luis Obispo Co.,'' 7.5 
minute series;
    (3) ``Pismo Beach Quadrangle, California--San Luis Obispo Co.,'' 7.5 
minute series; and
    (4) ``Arroyo Grande NE Quadrangle, California--San Luis Obispo 
Co.'', 7.5 minute series.
    (c) Boundaries. The Edna Valley viticultural area is located in San 
Luis Obispo County, California. The beginning point is Cuesta Canyon 
County Park, located on U.S.G.S. map ``San Luis Obispo Quadrangle'' at 
the north end of Section 25, Township 30 South, Range 12 East.
    (1) From the beginning point, the boundary runs southwesterly along 
San Luis Obispo Creek to a point .7 mile southerly of the confluence 
with Davenport Creek;
    (2) Thence due east to the intersection with the 400-foot contour 
line of the northeastern flank of the San Luis Range;
    (3) Thence in a generally easterly and then a southeasterly 
direction along this 400-foot contour line of the northeastern flank of 
the San Luis Range, which forms the southwestern rim of Edna Valley, to 
the township line identified as ``T31S/T32S'' on the U.S.G.S. map;
    (4) Thence east along township line ``T31S/T32S'', across Price 
Canyon to Tiber;
    (5) Thence in a generally easterly direction along the 400-foot 
contour line of Tiber Canyon and the southern rim of Canada Verde, 
crossing Corbit Canyon Road and continuing along the 400-foot contour 
line to longitude line 120 deg.32[min]30[sec];
    (6) Thence north along longitude line 120 deg.32[min]30[sec] to the 
600-foot contour line of the southwestern flank of the Santa Lucia 
Mountain Range;
    (7) Thence in a generally northwesterly direction along the 600-foot 
contour line of the southwestern flank of the Santa Lucia Range to 
Cuesta Canyon County Park, the beginning point.

[T.D. ATF-101, 47 FR 20299, May 12, 1982, as amended by T.D. ATF-249, 52 
FR 5956, Feb. 27, 1987]



Sec. 9.36  McDowell Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``McDowell Valley.''
    (b) Approved maps. The appropriate map for determining the 
boundaries of the McDowell Valley viticultural area is a USGS map. That 
map is titled: ``Hopland Quadrangle California'' 7.5 minute series.
    (c) Boundaries. (1) Beginning at the northwest corner of Section 22 
T13N R11W.
    (2) Then southerly along the section line between Sections 22 and 21 
approximately 1700 feet to the intersection of the section line and the 
ridge line (highest elevation line) between the McDowell Creek Valley 
and the Dooley Creek Valley.
    (3) Then southeasterly along the ridge line (highest elevation line) 
to the intersection of the ridge line and the 1000-foot contour line in 
Section 27.
    (4) Then southeasterly and on the McDowell Creek Valley side of the 
ridge along the 1000-foot contour line to the intersection of the 1000-
foot contour line and the south section line of Section 27.
    (5) Then easterly along the section line between Sections 27 and 34 
and between Sections 26 and 35 to the intersection of the section line 
and the centerline of Younce Road.
    (6) Then southeasterly and then northeasterly along Younce Road to 
the intersection of Younce Road and the section line between Sections 26 
and 35.

[[Page 112]]

    (7) Then due north from the section line, across Coleman Creek 
approximately 1250 feet, to the 1000-foot contour line.
    (8) Then westerly and then meandering generally to the north and 
east along the 1000-foot contour line to the intersection of the 1000-
foot contour line and section line between Sections 26 and 25.
    (9) Then continuing along the 1000-foot countour line easterly and 
then northwesterly in Section 25 to the intersection of the 1000-foot 
contour line and the section line between Sections 26 and 25.
    (10) Then northerly along the 1000-foot contour line to the 
intersection of the 1000-foot contour line and the section line between 
Sections 23 and 24.
    (11) Then northerly along the section line across State Highway 175 
approximately 1000 feet to the intersection of the section line and the 
1000-foot contour line.
    (12) Then generally to the northwest along the 1000-foot contour 
line through Sections 23 and 14 and into Section 15 to the intersection 
of the 1000-foot contour line and the flowline of an unnamed creek near 
the northeast corner of Section 15.
    (13) Then southwesterly and down stream along the flowline of said 
unnamed creek and across Section 15, to the stream's intersection with 
the section line between Sections 15 and 16.
    (14) Then southerly along the section approximately 100 feet to the 
northwest corner of Section 22 and to the point of beginning.

[T.D. ATF-97, 46 FR 59243, Dec. 4, 1981, as amended by T.D. ATF-249, 52 
FR 5956, Feb. 27, 1987]



Sec. 9.37  California Shenandoah Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Shenandoah Valley'' qualified by the word ``California'' in 
direct conjunction with the name ``Shenandoah Valley.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the California Shenandoah Valley viticultural area are two 
1962 U.S.G.S. maps. The maps are titled: ``Fiddletown Quadrangle 
California'' 7.5 minute series and ``Amador City Quadrangle California-
Amador Co.'' 7.5 minute series.
    (c) Boundaries. The Shenandoah Valley viticultural Area is located 
in portions of Amador and El Dorado Counties of California. The 
boundaries are as follows:
    (1) Beginning at the point where the Consumnes River meets Big 
Indian Creek.
    (2) Then south, following Big Indian Creek, until Big Indian Creek 
meets the boundary between Sections 1 and 2 of Township 7 North Range 10 
East.
    (3) Then following this boundary south until it meets the Oleta 
(Fiddletown) Road.
    (4) Then following the Oleta Road east until it meets the boundary 
between Sections 6 and 5 of Township 7 North Range 11 East.
    (5) Then following that boundary north into Township 8 North Range 
11 East, and continues north on the boundary between Sections 31 and 32 
until this boundary meets Big Indian Creek.
    (6) Then following Big Indian Creek in a northeasterly direction 
until Big Indian Creek meets the boundary between Sections 28 and 27 of 
Township 8 North Range 11 East.
    (7) Then following this boundary north until it reaches the 
southeast corner of Section 21 of Township 8 North Range 11 East.
    (8) The boundary then proceeds east, then north, then west along the 
boundary of the western half of Section 22 of Township 8 North Range 11 
East to the intersection of Sections 16, 15, 21, and 22.
    (9) Then proceeding north along the boundary line between Sections 
16 and 15 of Township 8 North Range 11 East and continues north along 
the boundary of Sections 9 and 10 of Township 8 North Range 11 East to 
the intersection of Sections 9, 10, 3, and 4 of Township 8 North Range 
11 East.
    (10) Then proceeding west along the boundary of Sections 9 and 4.
    (11) Then continuing west along the boundary of Sections 5 and 8 of 
Township 8 North Range 11 East to the Consumnes River.

[[Page 113]]

    (12) Then the boundary proceeds west along the Consumnes River to 
the point of the beginning.

[T.D. ATF-121, 47 FR 57696, Dec. 28, 1982, as amended by T.D. ATF-249, 
52 FR 5957, Feb. 27, 1987]



Sec. 9.38  Cienega Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Cienega Valley.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Cienega Valley viticultural area are four U.S.G.S. 
maps. They are titled:
    (1) ``Hollister Quadrangle, California,'' 7.5 minute series (1971);
    (2) ``Tres Pinos Quadrangle, California,'' 7.5 minute series (1971);
    (3) ``Mt. Harlan Quadrangle, California,'' 7.5 minute series (1968); 
and
    (4) ``Paicines Quadrangle, California,'' 7.5 minute series (1968).
    (c) Boundaries. The Cienega Valley viticultural area is located in 
San Benito County, California. The beginning point is the Gaging 
Station, located on U.S.G.S. map ``Paicines Quadrangle'' in the 
southeast portion of Section 21, Township 14 South, Range 6 East.
    (1) From the beginning point, the boundary follows the Pescadero 
Creek Bed in a southeasterly direction about 100 feet to the unimproved 
road and continues southwesterly on the unimproved road .5 mile to where 
it intersects with the south border of Township 14 South, Range 6 East, 
Section 21;
    (2) Thence in a straight line to the southwest portion of Section 
28, Township 14 South, Range 6 East, where the 1400-foot contour line 
intersects the south border of Section 28;
    (3) Thence following the 1400-foot contour line through the 
following sections; Sections 28, 29, and 30, Township 14 South, Range 6 
East; Section 25, Township 14 South, Range 5 East; Sections 30, 19, 20, 
and returning to 19, Township 14 South, Range 6 East, to a point where 
the 1400-foot contour line intersects with the section line between 
Sections 19 and 18, Township 14 South, Range 6 East;
    (4) Thence in a straight line due north to the intersection with the 
1200-foot contour line in Section 18, Township 14 South, Range 6 East;
    (5) Thence following the 1200-foot contour line in a generally 
northwesterly direction to where it intersects with the north boundary 
of Township 14 South, Range 5 East, Section 10; then following this 
boundary line in a northwesterly direction to where this boundary 
intersects with the 1600-foot contour line; thence following the 1600-
foot contour line in a generally northerly direction to where it 
intersects with the unimproved road;
    (6) Thence looping southward along the unimproved road and 
continuing on in an easterly direction past the designated ``Spring'' 
and then in a northeasterly direction parallel with the Gulch to the 
Vineyard School on Cienega Road; thence in a southeasterly direction on 
Cienega Road .4 mile to where the unimproved road intersects; thence 
traveling north and following the unimproved road in a northwesterly 
direction about 5. mile; then looping in an easterly direction .75 mile 
to the intersection of the unimproved road and branching in a 
southeasterly direction;
    (7) Thence crossing Township 13 South to Township 14 South and 
following the unimproved road to the intersection of the western border 
of Township 14 South, Range 6 East, Section 6; thence south to the 
northwest corner of Section 7;
    (8) Thence continuing in a straight diagonal line to the southeast 
corner of Township 14 South, Range 6 East, Section 7; thence from the 
southeast corner of Section 7 .25 mile west to where it intersects with 
an unimproved road;
    (9) Thence following this unimproved road in a southeasterly 
direction to the Gaging Station, the point of beginning.

[T.D. ATF-109, 47 FR 36126, Aug. 19, 1982]



Sec. 9.39  Paicines.

    (a) Name. The name of the viticultural area described in this 
section is ``Paicines.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Paicines viticultural area are the three U.S.G.S. 
maps. They are titled:
    (1) ``Tres Pinos Quadrangle, California,'' 7.5 minute series (1971);
    (2) ``Paicines Quadrangle, California,'' 7.5 minute series (1968); 
and

[[Page 114]]

    (3) ``Cherry Peak Quadrangle, California,'' 7.5 minute series 
(1968).
    (c) Boundaries. The Paicines viticultural area is located in San 
Benito County, California. The beginning point is the northwestern-most 
point of the proposed area at Township 14 South, Range 6 East, Section 
3, northwest corner, located on U.S.G.S. map ``Tres Pinos Quadrangle.''
    (1) From the beginning point the boundary runs east along the north 
border of Sections 3, 2, and 1, Township 14 South, Range 6 East;
    (2) Thence south along the east border of Section 1, Township 14 
South, Range 6 East; thence east along the north border of Section 7, 
Township 14 South, Range 7 East; thence south along the east border of 
Section 7, Township 14 South, Range 7 East;
    (3) Thence continuing south along the east border of Section 18, 
Township 14 South, Range 7 East; thence east along the north border of 
Section 20, Township 14 South, Range 7 East; thence south along the east 
border of Sections 20, 29 and 32, Township 14 South, Range 7 East;
    (4) Thence continuing south along the east border of Section 5, 
Township 15 South, Range 7 East; thence south along the east border of 
Sections 8 and 17, Township 15 South, Range 7 East to latitude line 
36 deg.37[min]30[sec];
    (5) Thence west along latitude line 36 deg.37[min]30[sec] to the 
west border of Section 18, Township 15 South, Range 7 East;
    (6) Thence north along the west border of Sections 18 and 7, 
Township 15 South, Range 7 East; thence west along the south border of 
Section 1, Township 15 South, Range 6 East; thence north along the west 
border of Section 1, Township 15 South, Range 6 East to the 800-foot 
elevation contour line and then in a generally northwest direction along 
this 800-foot contour line to where it intersects with the south border 
of Section 35, Township 14 South, Range 6 East;
    (7) Thence west along the south border of Section 35, Township 14 
South, Range 6 East; thence north along the east border of Section 34, 
Township 14 South, Range 6 East; thence in a northwest direction along 
the northeast border of Section 34, Township 14 South, Range 6 East; 
thence continuing in a northwest direction along the east border of 
Section 27, Township 14 South, Range 6 East;
    (8) Thence continuing in a northwest direction to the northeast 
border of Section 22, Township 14 South, Range 6 East to where an 
unnamed, unimproved dirt road intersects the northeast border; thence 
east and then northwest along the unimproved dirt road to the 
intersection with the San Benito River; thence following the San Benito 
River and meandering north to the intersection with the east border of 
Section 4, Township 14 South, Range 6 East;
    (9) Thence continuing north along the east border of Section 4, 
Township 14 South, Range 6 East to the point of beginning.

[T.D. ATF-108, 47 FR 35481, Aug. 16, 1982]



Sec. 9.40  Leelanau Peninsula.

    (a) Name. The name of the viticultural area described in this 
section is ``Leelanau Peninsula.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Leelanau Peninsula viticultural area are four U.S.G.S. 
maps. They are entitled:
    (1) ``Empire Quadrangle, Michigan,'' 15 minute series;
    (2) ``Maple City Quadrangle, Michigan,'' 15 minute series;
    (3) ``Traverse City Quadrangle, Michigan,'' 15 minute series; and
    (4) ``Northport Quadrangle, Michigan,'' 15 minute series.
    (c) Boundaries. The Leelanau Peninsula viticultural area encompasses 
all of Leelanau County, Michigan, excluding the offshore islands.

[T.D. ATF-99, 47 FR 13329, Mar. 30, 1982]



Sec. 9.41  Lancaster Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Lancaster Valley.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Lancaster Valley viticultural area are two U.S.G.S. 
maps. They are entitled:
    (1) ``Lancaster County, Pennsylvania'', scaled 1:50,000, edition of 
1977; and

[[Page 115]]

    (2) ``Honey Brook Quadrangle'', 7.5 minute series, edition of 1955, 
photorevised 1969 and 1974.
    (c) Boundaries. The Lancaster Valley viticultural area is located in 
Lancaster County and Chester County, Pennsylvania. The beginning point 
is where Pennsylvania Highway 23 crosses the Lancaster and Berks County 
boundary.
    (1) Then in a southeasterly direction following the Lancaster County 
boundary for approximately 0.9 mile to the 500 foot contour line 
immediately south of the Conestoga River.
    (2) Then following the 500 foot contour in a southwesterly direction 
to the Caernarvon-East Earl Township boundary.
    (3) Then south approximately 0.1 mile following the Caernarvon-East 
Earl Township boundary to U.S. Highway 322.
    (4) Then west following U.S. Highway 322 for approximately 1.7 miles 
to the electric transmission line between Fetterville and Cedar Grove 
School.
    (5) Then southwest in a straight line for approximately 5.2 miles to 
the intersection of Earl, Upper Leacock, and Leacock Townships at the 
Mill Creek.
    (6) Then southeast following the boundary between Earl Township and 
Leacock Township to the point where Earl, East Earl, Salisbury, and 
Leacock Townships intersect.
    (7) Then east in a straight line for approximately 4.8 miles to the 
point where the 500 foot contour line intersects Pequea Creek northwest 
of Mt. Pleasant School.
    (8) Then following the 500 foot contour line past Cole Hill through 
the town of Gap and along Mine Ridge to the 76 deg.07[min]30[sec] west 
longitude line in Paradise Township.
    (9) Then southwest in a straight line for approximately 7.7 miles to 
the Boehm Church south of Willow Street.
    (10) The northwest in a straight line for approximately 1.2 miles to 
the township school in West Willow.
    (11) Then west in a straight line for 4.2 miles to the confluence of 
Stehman Run and the Conestoga River.
    (12) Then northwest in a straight line for approximately 0.5 mile to 
the confluence of Indian Run and Little Conestoga Creek.
    (13) Then west following Indian Run for approximately 3.6 miles to 
the source of the more northerly branch.
    (14) Then northwest in a straight line for approximately 0.25 mile 
to the source of Wisslers Run.
    (15) Then west following Wisslers Run downstream for approximately 
0.7 mile to the 300 foot contour line.
    (16) Then north following the 300 foot contour line to its 
intersection with Pennsylvania Highway 999 in Washington Boro.
    (17) Then east following Pennsylvania Highway 999 to the school in 
Central Manor.
    (18) Then northeast in a straight line for approximately 2.7 miles 
to the point where the West Branch of the Little Conestoga Creek 
intersects with Pennsylvania Highway 462.
    (19) Then west following Pennsylvania Highway 462 for approximately 
1.5 miles to Strickler Run.
    (20) Then following Strickler Run southwest to the Columbia 
municipal boundary.
    (21) Then north following the eastern boundary of Columbia to 
Shawnee Run.
    (22) Then northeast in a straight line for approximately 5.8 miles 
to the intersection of Pennsylvania Highway 23 and Running Pump Road 
[unnamed on map] at elevation check point 436 near Centerville.
    (23) Then east following Pennsylvania Highway 23 for approximately 
0.5 mile to the 400 foot contour line.
    (24) Then following the 400 foot contour line north around Chestnut 
Ridge, past Millers Run and continuing until the 400 foot contour line 
intersects an unnamed stream.
    (25) Then due south in a straight line for approximately 0.8 mile to 
Pennsylvania Highway 23.
    (26) Then west following Pennsylvania Highway 23 to the intersection 
with Pennsylvania Highway 441 at Marietta.
    (27) Then west following Pennsylvania Highway 441 to Pennsylvania 
Highway 241 near Bainbridge.
    (28) Then northwest in a straight line for approximately 5.5 miles 
to the point where the Consolidated Railroad Corporation crosses the 
West Donegal-

[[Page 116]]

Mount Joy Township boundary in Rheems.
    (29) Then east in a straight line for approximately 3.3 miles to the 
Mt. Pleasant Church.
    (30) Then east in a straight line for approximately 3.8 miles to the 
Erismans Church.
    (31) Then east in a straight line for approximately 3.3 miles to the 
point where the 400 foot contour line crosses Pennsylvania Highway 72 
south of Valley View.
    (32) Then following the 400 foot contour line east to Pennsylvania 
Highway 501.
    (33) Then east in a straight line for approximately 2.9 miles to the 
Union Meetinghouse.
    (34) Then southeast in a straight line for approximately 1.0 miles 
to the point where Pennsylvania Highway 272 (indicated as U.S. Highway 
222 on the map) crosses Cocalico Creek (which forms the boundary between 
West Earl and Warwick Townships).
    (35) Then northwest following the West Earl Township boundary to its 
intersection with U.S. Highway 322 southeast of Ephrata.
    (36) Then east in a straight line for approximately 3.4 miles to the 
Lincoln Independence School.
    (37) Then southeast in a straight line for approximately 1.7 miles 
to the West Terre Hill School.
    (38) Then east in a straight line for approximately 8.5 miles to the 
beginning point.

[T.D. ATF-102, 47 FR 20301, May 12, 1982]



Sec. 9.42  Cole Ranch.

    (a) Name. The name of the viticultural area described in this 
section is ``Cole Ranch.''
    (b) Approved map. The approved map for the Cole Ranch viticultural 
area is the U.S.G.S. map entitled ``Elledge Peak Quadrangle California--
Mendocino County,'' 7.5 minute series (topographic), 1958.
    (c) Boundaries. The boundaries of the Cole Ranch viticultural area 
are located in Mendocino County California and are as follows:
    (1) The point of beginning is the intersection of the 1480-foot-
elevation contour line with the Boonville-Ukiah Cutoff Road near the 
southest coner of section 13;
    (2) The Boundary follows the 1480-foot-elevation contour line 
southerly, then easterly, within section 24, then easterly and 
northwesterly within section 19 to its first intersection with this 
section line. The boundary proceeds due west on the north section line 
of section 19 until it intersects with the Boonville-Ukiah Cutoff Road;
    (3) The boundary follows this road northwesterly to the point of 
beginning.

[T.D. ATF-130, 48 FR 16248, Apr. 15, 1983]



Sec. 9.43  Rocky Knob.

    (a) Name. The name of the viticultural area described in this 
section is ``Rocky Knob.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Rocky Knob viticultural area are two 1968 U.S.G.S. 
maps. The maps are entitled: ``Willis Quadrangle Virginia'' 7.5 minute 
series and ``Woolwine Quadrangle Virginia'' 7.5 minute series.
    (c) Boundaries. The Rocky Knob viticultural area is located in Floyd 
and Patrick Counties in southern Virginia. The boundaries are as 
follows:
    (1) The beginning point is the intersection of Virginia State Route 
Nos. 776 and 779 at Connors Grove.
    (2) Then follow State Route No. 779 south and east to the Blue Ridge 
Parkway.
    (3) Then south on the parkway to its first intersection with State 
Route No. 758.
    (4) Then follow State Route No. 758 east to the intersection of 
State Route No. 726 at the southern boundary of the Rocky Knob 
Recreation Area.
    (5) Then follow the boundary of the Rocky Knob Recreation Area south 
then in a northeastern direction to where the boundary first intersects 
State Route No. 8.
    (6) Then from that point at State Route No. 8, proceed northeast in 
a straight line to State Route No. 719 and Widgeon Creek at a point 
about 0.7 of a mile west of the intersection of State Route Nos. 719 and 
710.
    (7) Then proceed northwest in a straight line to the intersection 
with State Route No. 710 and the Blue Ridge Parkway.

[[Page 117]]

    (8) Then follow the Parkway southwest to the intersection with State 
Route No. 726.
    (9) Then turn right on State Route No. 726 and proceed 0.6 of a mile 
to a roadway at the 3308 elevation point on the map.
    (10) Then from that point, proceed west in a straight line back to 
the starting point at Connors Grove.

[T.D. ATF-124, 48 FR 1293, Jan. 12, 1983, as amended by T.D. ATF-249, 52 
FR 5957, Feb. 27, 1987]



Sec. 9.44  Solano County Green Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Green Valley'' qualified by the words ``Solano County'' in 
direct conjunction with the name ``Green Valley.'' On a label the words 
``Solano County'' may be reduced in type size to the minimum allowed in 
27 CFR 4.38(b).
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Green Valley viticultural area are two U.S.G.S. maps. 
They are titled:
    (1) ``Mt. George Quadrangle, California'', 7.5 minute series (1968); 
and
    (2) ``Cordelia Quadrangle, California'', 7.5 minute series (1968).
    (c) Boundaries. The Green Valley viticultural area is located in 
Solano County, California. The beginning point is the intersection of 
the township line identified as T6N/T5N with the westernmost point of 
the Solano County/Napa County line on the north border of Section 4, 
located on U.S.G.S. map ``Mt. George Quadrangle.''
    (1) From the beginning point, the boundary runs in a southerly 
direction along the Napa/Solano County border to State Road 12;
    (2) Thence east along State Road 12 to where it intersects with 
Interstate 80;
    (3) Thence southwest on Interstate 80 to where it intersects with 
the Southern Pacific Railroad track;
    (4) Thence in an easterly direction along the Southern Pacific 
Railroad track to where it intersects with range line ``R3W/R2W'';
    (5) Thence due north on range line ``R3W/R2W'' to where it 
intersects with the Solano County/Napa County line;
    (6) Thence due west along the Solano County/Napa County line to the 
point of beginning.

[T.D. ATF-122, 47 FR 37922, Dec. 29, 1982]



Sec. 9.45  Suisun Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Suisun Valley.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Suisun Valley viticultural area are four U.S.G.S. 
maps. They are titled:
    (1) ``Mt. George Quadrangle, California'', 7.5 minute series (1968);
    (2) ``Fairfield North Quadrangle, California'', 7.5 minute series 
(1973);
    (3) ``Fairfield South Quadrangle, California'', 7.5 minute series 
(1968); and
    (4) ``Cordelia Quadrangle, California'', 7.5 minute series (1968).
    (c) Boundaries. The Suisun Valley viticultural area is located in 
Solano County, California. The beginning point is the intersection of 
the Southern Pacific Railroad track with range line ``R3W/R2W'' in the 
town of Cordelia, located on U.S.G.S. map ``Cordelia Quadrangle.''
    (1) From the beginning point, the boundary runs northeast in a 
straight line to the intersection of Ledgewood Creek with township line 
``T5N/T4N'';
    (2) Thence in a straight line in a northeast direction to Bench Mark 
(BM) 19 located in the town of Fairfield;
    (3) Thence in a straight line due north to Soda Springs Creek;
    (4) Thence in a straight line in a northwest direction to the 
extreme southeast corner of Napa County located just south of Section 
34, Township 6 North, Range 2 West;
    (5) Thence due west along the Napa/Solano County border to where it 
intersects with range line ``R3W/R2W'';
    (6) Thence due south along range line ``R3W/R2W'' to the point of 
beginning.

[T.D. ATF-117, 47 FR 52997, Nov, 24, 1982]



Sec. 9.46  Livermore Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Livermore Valley.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of

[[Page 118]]

the Livermore Valley viticultural area are seven U.S.G.S. maps. They are 
titled.
    (1) ``Dublin Quadrangle, California,'' 7.5 minute series (1980);
    (2) ``Livermore Quadrangle, California,'' 7.5 minute series (1973);
    (3) ``La Costa Valley Quadrangle, California--Alameda Co.,'' 7.5 
minute series (1968);
    (4) ``Mendenhall Springs Quadrangle, California--Alameda Co.,'' 7.5 
minute series (1971);
    (5) ``Altamont Quadrangle, California--Alameda Co.,'' 7.5 minute 
series (1968);
    (6) ``Byron Hot Springs Quadrangle, California,'' 7.5 minute series 
(1968);
    (7) ``Tassajara Quadrangle, California,'' 7.5 minute series (1968);
    (c) Boundaries. The Livermore Valley viticultural area is located in 
Alameda County, California. The beginning point is Bench Mark (BM) 425 
located along the Alameda County/Contra Costa County line in the top 
portion of U.S.G.S. map ``Dublin Quadrangle.''
    (1) From the beginning point, the boundary runs in a southeasterly 
direction along an unnamed road which crosses Interstate 580 and turns 
into Foothill Road;
    (2) Thence continuing along Foothill Road in a southeasterly 
direction to the intersection of Castlewood Drive which is located 
directly east of the Castlewood Country Club;
    (3) Thence east on Castlewood Drive to Bench Mark (BM) 333;
    (4) Thence in a straight line in a southeasterly direction to VABM 
Vern (1264) located on U.S.G.S. map ``Livermore Quadrangle'';
    (5) Thence continuing in a southeasterly direction in a straight 
line to Bench Mark (BM) 580, located in the northeast corner of U.S.G.S. 
map ``La Costa Valley Quadrangle'';
    (6) Thence in a straight line in a southeasterly direction to the 
northeast corner of Section 15, located in the northwest portion of 
U.S.G.S. map ``Mendenhall Springs Quadrangle'';
    (7) Thence south to the southeast corner of Section 15, then east on 
the south border of Section 14, then south along the west boundary of 
Section 24;
    (8) Thence east on the south border of Sections 24 and 19 to the 
southwest corner of Section 20;
    (9) Thence north along the east boundaries of Sections 19, 18, 7, 6, 
31, 30, 19, 18, 7, 6, 31, 30, 19 and 18 located on U.S.G.S. maps 
``Mendenhall Springs Quadrangle,'' ``Altamont Quadrangle,'' and ``Byron 
Hot Springs Quadrangle'';
    (10) Thence west along the northern boundaries of Sections 18, 13, 
14, 15, and 16 to where the northern boundary line of Section 16 
intersects with the Alameda County/Contra Costa County line, located in 
the southeast corner of U.S.G.S. map ``Tassajara Quadrangle'';
    (11) Thence in a southwesterly direction along the Alameda County/
Contra Costa County line to the point of beginning.

[T.D. ATF-112, 47 FR 38520, Sept. 1, 1982]



Sec. 9.47  Hudson River Region.

    (a) Name. The name of the viticultural area described in this 
section is ``Hudson River Region.''
    (b) Approved maps. The approved maps for determining the boundaries 
of Hudson River Region viticultural area are four U.S.G.S. maps, as 
follows:
    (1) Albany (NK 18-6), scale of 1:250,000 series;
    (2) Hartford (NK 18-9), scale of 1:250,000 series;
    (3) Scranton (NK 18-8), scale of 1:250,000 series;
    (4) Binghamton (NK 18-5), scale of 1:250,000 series.
    (c) Boundary. The Hudson River Region viticultural area is located 
in New York State. The boundary is as follows:
    (1) The beginning point is the point where N.Y. Route 15 (Merritt 
Parkway) crosses the New York-Connecticut state line.
    (2) The boundary proceeds northerly along the New York-Connecticut 
state line and the New York-Massachusetts state line to the northeast 
corner of Columbia County, New York.
    (3) The boundary proceeds westerly along the Columbia County-
Rensselaer County line to the Columbia County-Greene County line in the 
Hudson River.
    (4) The boundary proceeds southerly along the Columbia County-Greene 
County line in the Hudson River to the northeast corner of Ulster 
County.

[[Page 119]]

    (5) The boundary proceeds westerly along the Ulster County-Greene 
County line to N.Y. Route 214.
    (6) The boundary proceeds southerly along the eastern side of N.Y. 
Route 214 to the junction with N.Y. Route 28 in Phoenicia.
    (7) The boundary proceeds southerly along the eastern side of N.Y. 
Route 28 to the junction with N.Y. Route 28A.
    (8) The boundary proceeds southerly along the eastern side of N.Y. 
Route 28A to the intersection with the secondary, hard surface, 
southbound road leading toward Samsonville.
    (9) The boundary proceeds southerly along the eastern side of this 
southbound road through Samsonville, Tabasco, Mombaccus, Fantinekill, 
and Pataukunk to the junction with U.S. Route 209.
    (10) The boundary proceeds southerly along the eastern side of U.S. 
Route 209 to the New York-Pennsylvania state line in the Delaware River.
    (11) The boundary proceeds easterly along the Delaware River to the 
New York-New Jersey state line.
    (12) The boundary proceeds easterly along the New York-New Jersey 
state line to N.Y. Route 17.
    (13) The boundary proceeds northerly along the western side of N.Y. 
Route 17 to the junction with Interstate Route 287.
    (14) The boundary proceeds easterly along the northern side of 
Interstate Route 287 to the junction with N.Y. Route 15.
    (15) The boundary proceeds easterly along the northern side of N.Y. 
Route 15 to the beginning point.

[T.D. ATF-105, 47 FR 24294, June 4, 1982]



Sec. 9.48  Monticello.

    (a) Name. The name of the viticultural area described in this 
section is ``Monticello.''
    (b) Approved maps. Approved maps for the Monticello viticultural 
area are three 1971 U.S.G.S. maps titled:
    (1) Charlottesville Quadrangle, Virginia: 1:250,000 minute series;
    (2) Roanoke Quadrangle, Virginia: 1:250,000 minute series; and
    (3) Washington, DC: 1:250,000 minute series.
    (c) Boundaries. (1) From Norwood, Virginia, following the Tye River 
west and northwest until it intersects with the eastern boundary of the 
George Washington National Forest;
    (2) Following this boundary northeast to Virginia Rt. 664;
    (3) Then west following Rt. 664 to its intersection with the Nelson 
County line;
    (4) Then northeast along the Nelson County line to its intersection 
with the Albemarle County line at Jarman Gap;
    (5) From this point continuing northeast along the eastern boundary 
of the Shenandoah National Park to its intersection with the northern 
Albemarle County line;
    (6) Continuing northeast along the Greene County line to its 
intersection with Virginia Rt. 33;
    (7) Follow Virginia Rt. 33 east to the intersection of Virginia Rt. 
230 at Stanardsville;
    (8) Follow Virginia Rt. 230 north to the Greene County line (the 
Conway River);
    (9) Following the Greene County line (Conway River which becomes the 
Rapidan River) southeast to its intersection with the Orange County 
line;
    (10) Following the Orange County line (Rapidan River) east and 
northeast to its confluence with the Mountain Run River;
    (11) Then following the Mountain Run River southwest to its 
intersection with Virginia Rt. 20;
    (12) Continuing southwest along Rt. 20 to the corporate limits of 
the town of Orange;
    (13) Following southwest the corporate limit line to its 
intersection with U.S. Rt. 15;
    (14) Continuing southwest on Rt. 15 to its intersection with 
Virginia Rt. 231 in the town of Gordonsville;
    (15) Then southwest along Rt. 231 to its intersection with the 
Albemarle County line.
    (16) Continuing southwest along the county line to its intersection 
with the James River;
    (17) Then following the James River to its confluence with the Tye 
River at Norwood, Virginia, the beginning point.

[T.D. ATF-164, 49 FR 2758, Jan. 23, 1984, as amended by T.D. ATF-249, 52 
FR 5957, Feb. 27, 1987; T.D. ATF-255, 52 FR 23652, June 24, 1987]

[[Page 120]]



Sec. 9.49  Central Delaware Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Central Delaware Valley.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Central Delaware Valley viticultural area are nine 
U.S.G.S. maps in the 7.5 minute series (topographic). They are titled:
    (1) Bloomsbury Quadrangle, New Jersey, 1955 (photorevised 1970).
    (2) Riegelsville Quadrangle, Pennsylvania-New Jersey, 1956 
(photorevised 1968 and 1973).
    (3) Frenchtown Quadrangle, Pennsylvania-New Jersey, 1955 
(photorevised 1970).
    (4) Lumberville Quadrangle, Pennsylvania-New Jersey, 1955 
(photorevised 1968 and 1973).
    (5) Stockton Quadrangle, New Jersey-Pennsylvania, 1954 (photorevised 
1970).
    (6) Hopewell Quadrangle, New Jersey, 1954 (photorevised 1970).
    (7) Buckingham Quadrangle, Pennsylvania--Bucks Co., 1953 
(photorevised 1968 and 1973).
    (8) Lambertville Quadrangle, Pennsylvania-New Jersey, 1953 
(photorevised 1968 and 1973).
    (9) Pennington Quadrangle, New Jersey-Pennsylvania 1954 
(photorevised 1970).
    (c) Boundary--(1) General. The Central Delaware Valley viticultural 
area is located in Pennsylvania and New Jersey. The starting point of 
the following boundary description is the summit of Strawberry Hill, 
which is located in New Jersey near the Delaware River about one mile 
northwest of Titusville, at the southern end of the Central Delaware 
Valley viticultural area. The starting point is found on the 
Lambertville Quadrangle map.
    (2) Boundary Description: (i) From the summit of Strawberry Hill 
(475 feet) in a straight line to the summit of Mt. Canoe (428 feet--on 
the Pennington Quadrangle map).
    (ii) From there due east to Mercer County Route 579 (Bear Tavern 
Road) about .2 mile south of Ackors Corner.
    (iii) Then northward along Mercer 579 to Harbourton.
    (iv) From there northwestward along Route 3 (Mount Airy-Harbourton 
Road) to the 2nd English Presbyterian Church in Mount Airy (on the 
Stockton Quadrangle map).
    (v) From there along Old York Road northward to Benchmark 157 on 
U.S. Route 202.
    (vi) From there westward along Queen Road and northwestward along 
Mount Airy Road to Dilts Corner.
    (vii) From there northwestward along Dilts Corner Road to Sandy 
Ridge Church.
    (viii) From there northwestward via Cemetary Road to Benchmark 305.
    (ix) From there northward along Covered Bridge Road to Green 
Sergeant Covered Bridge.
    (x) From there generally westward along Sanford Road to its 
intersection with Route 519 about one mile north of Rosemont.
    (xi) From there northward along Route 519 (via Kingwood, Barbertown 
and Baptistown) to Palmyra (on the Frenchtown Quadrangle map).
    (xii) From the intersection in Palmyra, in a straight line northward 
to the 487 ft. elevation point near Nishisakawick Creek.
    (xiii) From there in a straight line northwestward to Benchmark 787 
on Rt. 579 (a secondary hard surface highway, unnamed on the map).
    (xiv) From there northward along Route 579 to Benchmark 905 (on the 
Bloomsbury Quadrangle map).
    (xv) From there in a straight line westward to the 952 ft. summit 
;of Musconetcong Mountain (on the Frenchtown Quadrangle map).
    (xvi) From there in a straight line southwestward to the 836 ft. 
summit of Musconetcong Mountain (on the Riegelsville Quadrangle map).
    (xvii) From there in straight lines connecting the 838 ft., 839 ft., 
707 ft., and 386 ft. summits of Musconetcong Mountain.
    (xviii) From the 386 ft. summit of Musconetcong Mountain in a 
straight line across the Delaware River to the intersection of Routes 
611 and 212.
    (xix) From there along Route 212 to the intersection with the lane 
going up Mine Hill.
    (xx) From there in a straight line to the summit of Mine Hill (488 
feet).
    (xxi) From there in a straight line southwestward to the 522 ft. 
summit elevation point.

[[Page 121]]

    (xxii) From there southeastward to the summit of Chestnut Hill (743 
feet).
    (xxiii) From there in a straight line southeastward to the 347 ft. 
summit elevation point (located south of Kintnersville near Benchmark 
173, about .1 mile west of Route 611).
    (xxiv) From there in a straight line eastward to the summit of 
Coffman Hill (826 feet).
    (xxv) From there in a straight line southeastward to the 628 ft. 
summit elevation point (about .3 mile north of Camp Davis).
    (xxvi) From there in a straight line southeastward to the point 
where Bridgeton, Nockamixon, and Tinicum Townships meet (on the 
Frenchtown Quadrangle map).
    (xxvii) From there in a straight line southward to the intersection 
of Slant Hill Road (Covered Bridge Road) and Stump Road in Smiths Corner 
(on the Lumberville Quadrangle map).
    (xxviii) From there in a straight line southeastward to the 472 ft. 
elevation point near Rocky Ridge School.
    (xxix) From there southeastward in a straight line to the 522 ft. 
elevation point on Plumstead Hill.
    (xxx) From there in a straight line to the 482 ft. elevation point 
about .7 mile northwest of Lahaska.
    (xxxi) From there in a straight line southeastward to the 352 ft. 
elevation point approximately .6 mile northeast of Lahaska.
    (xxxii) From there in a straight line to the point where a power 
transmission line crosses the 400 ft. contour line on the south side of 
Solebury Mountain (on the Lambertville Quadrangle map).
    (xxxiii) From there in a straight line to the tower on Bowman Hill 
in Washington Crossing State Park.
    (xxxiv) From there in a straight line across the Delaware River to 
the starting point, the summit of Strawberry Hill (475 feet).

[T.D. ATF-168, 49 FR 10117, Mar. 19, 1984, as amended by T.D. ATF-249, 
52 FR 5958, Feb. 27, 1987]



Sec. 9.50  Temecula.

    (a) Name. The name of the viticultural area described in this 
section is ``Temecula.''
    (b) Approved map. The approved maps for determining the boundary of 
the Temecula viticultural area are seven U.S.G.S. guadrangle maps in the 
7.5 minute series, as follows:
    (1) Wildomar, California, dated 1953, photorevised 1973;
    (2) Fallbrook, California, dated 1968;
    (3) Murrieta, California, dated 1953, photorevised 1979;
    (4) Temecula, California, dated 1968, photorevised 1975;
    (5) Pechanga, California, dated 1968;
    (6) Sage, California, dated 1954;
    (7) Bachelor Mountain, California, dated 1953, photorevised 1973.
    (c) Boundary. The Temecula viticultural area is located in Riverside 
County, California. The boundary is as follows:
    (1) The beginning point is the northernmost point of the Santa Rosa 
Land Grant where the Santa Rosa Land Grant boundary intersects the 
easternmost point of the Cleveland National Forest boundary.
    (2) The boundary follows the Cleveland National Forest boundary 
southwesterly to the point where it converges with the Riverside County-
San Diego County line.
    (3) The boundary follows the Riverside County-San Diego County line 
southwesterly, then southeasterly to the point where the Riverside 
County-San Diego County line diverges southward and the Santa Rosa Land 
Grant boundary continues southeasterly.
    (4) The boundary follows the Santa Rosa Land Grant boundary 
southeasterly, then northeasterly, to its intersection with the Temecula 
Land Grant boundary.
    (5) The boundary follows the Temecula Land Grant boundary 
southeasterly, then northeasterly, to its intersection with the Little 
Temecula Land Grant boundary.
    (6) The boundary follows the Little Temecula Land Grant boundary 
southeasterly to its intersection with the boundary of that portion of 
the Pechanga Indian Reservation which, until 1907, was Lot ``E'' of the 
Little Temecula Land Grant.
    (7) The boundary follows the Pechanga Indian Reservation boundary 
southeasterly, then northeasterly (including that portion of the 
Penchanga

[[Page 122]]

Indian Reservation in the approved viticultural area) to the point at 
which it rejoins the Little Temecula Land Grant boundary.
    (8) The boundary follows the Little Temecula Land Grant boundary 
northeasterly to its intersection with the Pauba Land Grant boundary.
    (9) The boundary follows the Pauba Land Grant boundary 
southeasterly, then northeasterly, to the north-south section line 
dividing Section 23 from Section 24 in Township 8 South, Range 2 West.
    (10) The boundary follows this section line south to the 1500-foot 
contour line.
    (11) The boundary follows the 1500-foot contour line easterly to the 
range line dividing Range 2 West from Range 1 West.
    (12) The boundary follows this range line north, across California 
State Highway 71/79, to the 1400-foot contour line of Oak Mountain.
    (13) The boundary follows the 1400-foot contour line around Oak 
Mountain to its intersection with the 117 deg.00[min] West longitude 
meridian.
    (14) The boundary follows the the 117 deg.00[min] West longitude 
meridian north to its intersection with the Pauba Land Grant boundary.
    (15) The boundary follows the Pauba Land Grant boundary 
northwesterly, then west, then south, then west, to Warren Road (which 
coincides with the range line dividing Range 1 West from Range 2 West).
    (16) The boundary follows Warren Road north to an unnamed east-west, 
light-duty, hard or improved surface road (which coincides with the 
section line dividing Section 12 from Section 13 in Township 7 South, 
Range 2 West).
    (17) The boundary follows this road west to the north-south section 
line dividing Section 13 from Section 14 in Township 7 South, Range 2 
West.
    (18) The boundary follows this section line south to its 
intersection with Buck Road (which coincides with the east-west section 
line on the southern edge of Section 14 in Township 7 South, Range 2 
West).
    (19) The boundary follows Buck Road west to the point where it 
diverges northwesterly from the section line on the southern edge of 
Section 14 in Township 7 South, Range 2 West.
    (20) The boundary follows this section line west, along the southern 
edges of Sections 14, 15, 16, 17, and 18 in Township 7 South, Range 2 
West, to Tucalota Creek.
    (21) The boundary follows Tucalota Creek southerly to Santa 
Gertrudis Creek.
    (22) The boundary follows Santa Gertrudis Creek southwesterly to 
Murrieta Creek.
    (23) The boundary proceeds northwesterly along the westernmost 
branches of Murrieta Creek to its intersection with Hayes Avenue, 
northwest of Murrieta, California.
    (24) The boundary follows Hayes Avenue northwesterly, approximately 
4,000 feet, to its terminus at an unnamed, unimproved, fair or dry 
weather road.
    (25) The boundary follows this road southwesterly to Murrieta Creek.
    (26) The boundary proceeds northwesterly along the westernmost 
branches of Murrieta Creek to its intersection with Orange Street in 
Wildomar, California.
    (27) From the intersection of Murrieta Creek and Orange Street in 
Wildomar, California, the boundary proceeds in a straight line to the 
beginning point.

[T.D. ATF-188, 49 FR 42566, Oct. 23, 1984; 49 FR 43455, Oct. 29, 1984, 
as amended by T.D. ATF-221, 51 FR 750, Jan. 8, 1986; T.D. ATF-249, 52 FR 
5958, Feb. 27, 1987]



Sec. 9.51  Isle St. George.

    (a) Name. The name of the viticultural area described in this 
section is ``Isle St. George.''
    (b) Approved maps. The approved map for determining the boundary of 
the Isle St. George viticultural area is the U.S.G.S. quadrangle map, 
``Put-in-Bay, Ohio'', 7.5 minute series, edition of 1969.
    (c) Boundaries. The Isle St. George viticultural area is located 
entirely within Ottawa County, Ohio. The boundary of the Isle St. George 
viticultural area is the shoreline of the island named ``North Bass 
Island'' on the ``Put-in-Bay, Ohio'' U.S.G.S. map, and the viticultural 
area comprises the entire island.

[T.D. ATF-110, 47 FR 36421, Aug. 20, 1982]

[[Page 123]]



Sec. 9.52  Chalk Hill.

    (a) Name. The name of the viticultural area described in this 
section is ``Chalk Hill.''
    (b) Approved maps. The appropriate maps for determining the boundary 
of the Chalk Hill viticultural area are the U.S.G.S. topographic maps 
titled:
    ``Mark West Springs Quadrangle, California'', 7.5 minute series, 
1958; and,
    ``Healdsburg Quadrangle, California'', 7.5 minute series, 1955 
(Photorevised 1980).
    (c) Boundary. The Chalk Hill viticultural area is located near the 
town of Windsor in Sonoma County, California. From the beginning point 
on the south line of Section 2, Township 8 North (T. 8 N.), Range 9 West 
(R. 9 W.) at the intersection of Arata Lane and Redwood Highway (a.k.a. 
Old Highway 101), on the ``Healdsburg Quadrangle'' map, the boundary 
proceeds--
    (1) Southeasterly along Redwood Highway through Section 11, T. 8 N., 
R. 9 W., to the point of intersection with Windsor River Road;
    (2) Then westerly along Windsor River Road on the south boundary of 
Section 11, T. 8 N., R. 9 W., to the point of intersection with Starr 
Road;
    (3) The southerly along Starr Road to the point of intersection with 
the south line of Section 14, T. 8 N., R. 9 W.;
    (4) Then easterly along the south line of Sections 14 and 13, T. 8 
N., R. 9 W. and Section 18, T. 8 N., R. 8 W., to the point of 
intersection with the Redwood Highway;
    (5) Then southeasterly along the Redwood Highway to the intersection 
with an unnamed road that intersects the Redwood Highway at a right 
angle from the northeast near the southwest corner of Section 28 near 
Mark West Creek, T. 8 N., R. 8 W.;
    (6) Then northeast approximately 500 feet along the unnamed road to 
its intersection with the Pacific Gas and Electric power transmission 
line;
    (7) Then northeast approximately 1,000 feet along the power 
transmission line (paralleling the unnamed road) to the point where the 
power transmission line turns in a northerly direction;
    (8) Then in a northerly direction along the power transmission line 
to the point of its intersection with the south line of Section 17, T. 8 
N., R. 8 W.;
    (9) Then east along the south line of Sections 17, 16 and 15, T. 8 
N., R. 8 W. to the point of intersection with Mark West Road on the 
``Mark West Quadrangle Map'';
    (10) Then northerly for approximately 1.3 miles along Mark West Road 
(which becomes Porter Creek Road), then northeasterly for approximately 
1.7 miles on Porter Creek Road to its intersection with the unnamed 
medium duty road that parallels Porter Creek in Section 12, T. 8 N., R. 
8 W.; then northeasterly on the Franz Valley Road over the Tarwater 
Grade and continuing along the Franz Valley Road for approximately 3 
miles to its intersection with Franz Creek (approximately 2,000 feet 
west of the range line common to R. 7 W. and R. 8 W. in T. 9 N. and 
approximately 1,150 feet north of the north line of Section 25, T. 9 N., 
R. 8 W.);
    (11) Then westerly along Franz Creek to its point of intersection 
with the east line of Section 21, T. 9 N., R. 8 W.;
    (12) Then southerly along the east line of Section 21 to the 
southeast corner thereof;
    (13) Then southerly, approximately 0.08 mile, along the west line of 
section 27, T. 9 N., R. 8 W., to the point at which an unnamed 
unimproved road which parallels the south bank of Martin Creek 
intersects the west line of section 27,   T. 9 N., R. 8 W.;
    (14) Then southeasterly, approximately 1.07 miles, along said road 
to the point at which the road is crossed by the east line of section 
27,   T. 9 N., R. 8 W.;
    (15) Then southerly, approximately 0.65 mile, along the east lines 
of sections 27 and 34, T. 9 N., R. 8 W., to the point in the northeast 
corner of section 34, T. 9 N., R. 8 W. where the north fork of Barnes 
Creek intersects such line in section 34, T. 9 N., R. 8 W.;
    (16) Then continuing along the north fork of Barnes Creek, 
approximately 0.5 mile, in a generally westerly direction to a small 
dwelling at the eastern terminus of an unnamed unimproved road (known 
locally as the access to the

[[Page 124]]

Shurtleff Ranch) in section 34, T. 9 N., R. 8 W.;
    (17) Then continuing in a generally westerly direction, 
approximately 1.4 miles, along the unnamed unimproved road (known 
locally as the access to the Shurtleff Ranch) to its intersection with 
an unnamed unimproved road (known locally as Spurgeon Road) in section 
33, T. 9 N., R. 8 W. on the Healdsburg, California, Quadrangle Map;
    (18) Then westerly, approximately 0.45 mile, along the unnamed 
unimproved road (known locally as Spurgeon Road) to the point where the 
road intersects Chalk Hill Road in section 32, T. 9 N., R. 8 W.;
    (19) Then in a generally northwesterly direction, approximately 1.3 
miles, along Chalk Hill Road to the point where Chalk Hill Road crosses 
Brooks Creek in section 29, T. 9 N., R. 8 W.;
    (20) Then north in a straight line, approximately 0.2 mile, to the 
top of a peak identified as Chalk Hill;
    (21) Then west-northwesterly in a straight line to the confluence of 
Brooks Creek and the Russian River;
    (22) Then westerly along the Russian River to the point of 
intersection with the range line common to R. 8 W. and R. 9 W. in T. 9 
N.;
    (23) Then southwesterly in a straight line to the point of a hill 
identified as having an elevation of 737 feet;
    (24) Then south-southwesterly in a straight line to the point at the 
easterly terminus of Reiman Road;
    (25) Then southwesterly in a straight line to the point at the 
intersection of the township line common to T. 8 N. and T. 9 N. in R. 9 
W. and the frontage road (a.k.a. Los Amigos Road) for U.S. Highway 101;
    (26) Then west approximately 3,000 feet along the township line 
common to T. 8 N. and T. 9 N. in R. 9 W.;
    (27) Then southerly for approximately 2,000 feet in a straight line 
to the point of intersection with an unnamed stream drainage;
    (28) Then east in a straight line to the point of intersection with 
Eastside Road;
    (29) Then northeasterly along Eastside Road to the point of 
intersection with Redwood Highway;
    (30) Then southeasterly along Redwood Highway to the point of 
beginning.

[T.D. ATF-155, 48 FR 48812, Oct. 21, 1983, as amended by T.D. ATF-272, 
53 FR 17023, May 13, 1988]



Sec. 9.53  Alexander Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Alexander Valley.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Alexander Valley viticultural area are seven U.S.G.S. 
maps entitled:
    (1) ``Mark West Springs Quadrangle, California,'' 7.5 minute series, 
1958;
    (2) ``Mount St. Helena Quadrangle, California,'' 7.5 minute series, 
1959;
    (3) ``Jimtown Quadrangle, California--Sonoma County,'' 7.5 minute 
series, 1955 (Photorevised 1975);
    (4) ``Geyserville Quadrangle, California--Sonoma County,'' 7.5 
minute series, 1955 (Photorevised 1975);
    (5) ``Healdsburg Quadrangle, California--Sonoma County,'' 7.5 minute 
series, 1955;
    (6) ``Asti Quadrangle, California,'' 7.5 minute series, 1959 
(Photorevised 1978); and
    (7) ``Cloverdale Quadrangle, California,'' 7.5 minute series, 1960.
    (c) Boundaries. The Alexander Valley viticultural area is located in 
northeastern Sonoma County, California. From the beginning point at the 
northeast corner of Section 32, Township 12 North (T. 12 N.), Range 10 
West (R. 10 W.), on the Asti Quadrangle map, the boundary runs--
    (1) West along the north line of Sections 32 and 31, T. 12 N., R. 10 
W., and Sections 36, 35, and 34, T. 12 N., R. 11 W., to the northwest 
corner of Section 34, on the Cloverdale Quadrangle map;
    (2) Then south along the west line of Section 34 to the southwest 
corner thereof;
    (3) Then east southeasterly in a straight line to the southeast 
corner of section 2, T. 11 N., R. 11 W.;
    (4) Then south southeasterly in a straight line to the southeast 
corner of section 24, T. 11 N., R. 11 W.;
    (5) Then southeasterly in a straight line across sections 30, 31 and 
32, T. 11 N., R.. 10 W., to the point at 38 deg.45[min] N.

[[Page 125]]

latitude and 123 deg.00[min] E. longitude in section 5, T. 10 N., R. 10 
W.;
    (6) Then southeasterly in a straight line approximately 11,000 feet 
(closely following the ridge line) to the northwest corner of Section 
10, T. 10 N., R.10 W. on the Geyserville Quadrangle map;
    (7) [Reserved]
    (8) Then southerly along the west line of Section 10, T. 10 N., R. 
10 W.;
    (9) Then S. 74 degrees, E. 2,800 feet in a straight line to the 
northeasterly tip of a small lake;
    (10) Then N. 57 degrees, E. 2,300 feet in a straight line to the 
southeast corner of Section 10, T. 10 N., R. 10 W.;
    (11) Then S. 16 degrees, E. 1,800 feet in a straight line to the 
point on a peak identified as having an elevation of 664 feet;
    (12) Then S. 55 degrees, E. 7,900 feet in a straight line to the 
most northerly point on the northeasterly line of ``Olive Hill'' 
Cemetery, lying on the easterly side of a light-duty road identified as 
Canyon Road;
    (13) Then southeasterly along the northeasterly line of ``Olive 
Hill'' cemetery to most easterly point thereon;
    (14) Then southerly 3,000 feet along the meanders of the west fork 
of Wood Creek to the point lying 400 feet north of the point on a peak 
identified as having an elevation of 781 feet;
    (15) Then southerly 400 feet in a straight line to the point on a 
peak identified as having an elevation of 781 feet;
    (16) Then S. 50\1/2\ degrees, E. 15,200 feet in a straight line to 
the point lying at the intersection of Lytton Creek with the township 
line common to T. 9 N. and T. 10 N. in R. 9 W.;
    (17) Then southerly along the meanders of Lytton Creek to the point 
of intersection with a light-duty road identified as Lytton Springs Road 
in T. 9 N., R. 9 W.;
    (18) Then easterly along Lytton Springs Road to the point of 
intersection with a heavy-duty road identified as U.S. Highway 101 
(a.k.a. Redwood Highway), on the Jimtown Quadrangle map;
    (19) Then southerly along U.S. Highway 101 to the point of 
intersection with an unnamed light-duty road (known locally as Chiquita 
Road), on the Geyserville Quadrangle map;
    (20) Then easterly along the unnamed light-duty road to the point of 
intersection with an unnamed heavy-duty road (known locally as 
Healdsburg Avenue), on the Jimtown Quadrangle map;
    (21) Then southeasterly in a straight line approximately 11,000 feet 
to the 991-foot peak of Fitch Mountain;
    (22) Then east southeasterly approximately 7,000 feet in a straight 
line to the peak identified as having an elevation of 857 feet;
    (23) Then east southeasterly approximately 1,750 feet to the peak 
identified as Black Peak;
    (24) Then southeasterly approximately 7,333 feet to the peak 
identified as having an elevation of 672 feet;
    (25) Then northeasterly approximately 5,000 feet in a straight line 
to the point of confluence of Brooks Creek with the Russian River in T. 
9 N., R. 8 W., on the Healdsburg Quadrangle map;
    (26) Then east-southeasterly 2,400 feet in a straight line to the 
top of a peak identified as Chalk Hill;
    (27) Then south from said peak, in a straight line, approximately 
0.2 mile to the point where Chalk Hill Road crosses Brooks Creek (on the 
Healdsburg Quadrangle map);
    (28) Then southeasterly, approximately 1.3 miles, along the roadbed 
of Chalk Hill Road to the point near the confluence of Brooks Creek and 
Barnes Creek where Chalk Hill Road intersects an unnamed unimproved road 
(known locally as Spurgeon Road) that parallels Barnes Creek in section 
32,   T. 9 N., R. 8 W.;
    (29) Then easterly, approximately 0.45 mile, along said road (known 
locally as Spurgeon Road) to the point where the road is intersected by 
an unnamed unimproved road (known locally as the access to the Shurtleff 
Ranch) in section 33, T. 9 N., R. 8 W.;
    (30) Then continuing along the unnamed unimproved road (known 
locally as the access to the Shurtleff Ranch), approximately 1.33 miles, 
in a generally easterly direction, to the eastern terminus of said road 
at a small dwelling along the north fork of Barnes Creek in section 34, 
T. 9 N., R. 8 W. on the Mark West Springs, California, Quadrangle map;

[[Page 126]]

    (31) Then easterly along the north fork of Barnes Creek, 
approximately 0.5 mile, to the point in the northeast corner of section 
34, T. 9 N., R. 8 W. where the north fork of Barnes Creek intersects the 
east line of section 34, T. 9 N., R. 8 W.;
    (32) Then north, approximately 0.65 mile, along the east lines of 
sections 34 and 27, T. 9 N., R. 8 W., to the point at which an unnamed 
unimproved road which parallels the south bank of Martin Creek 
intersects the eastern border of section 27, T. 9 N., R. 8 W.;
    (33) Then in a generally northwesterly direction, approximately 1.07 
miles, along said road to the point at which the road is crossed by the 
west line of section 27, T. 9 N., R. 8 W.;
    (34) Then north, approximately 0.08 mile, along the west line of 
section 27, T. 9 N., R. 8 W., to the southeast corner of section 21, T. 
9 N., R. 8 W.;
    (35) Then northerly along the east line of Sections 21, 16, and 9, 
T. 9 N., R. 8 W. to the northeast corner of Section 9, on the Mount St. 
Helena Quadrangle map;
    (36) Then westerly along the north line of Section 9 to the 
northwest corner thereof, on the Jimtown Quadrangle map;
    (37) Then northerly along the western lines of section 4, of T. 9 N, 
R. 8 W., and sections 33, 28, 21, 16, and 9 of T. 10 N., R. 8 W.;
    (38) Then westerly along the northern lines of section 8 and 7, T. 
10 N., R. 8 W. and section 12, T. 10 N., R. 9 W. to the southeastern 
corner of section 2, T. 10 N., R. 9 W.;
    (39) Then northwesterly in a straight line to the eastern line of 
section 3 at 38 degrees 45 minutes latitude, T. 10 N., R. 9 W.;
    (40) Then westerly along latitude line 38 degrees 45 minutes to the 
point lying at 122 degrees 52 minutes 30 seconds longitude;
    (41) Then northwesterly in a straight line to the southeast corner 
of section 4, T. 11 N., R. 10 W., on the Asti, Quadrangle map;
    (42) Then northeasterly in a straight line to the southeast corner 
of section 34, T. 12 N., R. 10 W.;
    (43) Then north along the east boundary of section 34, T. 12 N., R. 
10 W., to the northeast corner of section 34, T. 12 N., R. 10 W.;
    (44) Then west along the north boundaries of sections 34 and 33, T. 
12 N., R. 10 W., to the point of beginning.

[T.D. ATF-187, 49 FR 42724, Oct. 24, 1984, as amended by T.D. ATF-233; 
51 FR 30354, Aug. 26, 1986; T.D. ATF-272, 53 FR 17025, May 13, 1988; 
T.D. ATF-300, 55 FR 32402, Aug. 9, 1990; T.D. ATF-468, 66 FR 50565, Oct. 
4, 2001]



Sec. 9.54  Santa Ynez Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Santa Ynez Valley.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Santa Ynez Valley viticultural area are 12 U.S.G.S. 
quadrangle maps. They are entitled:
    (1) ``Figueroa Mountain, Cal.'', 7.5 minute series, edition of 1959;
    (2) ``Foxen Canyon, Cal.'', 7.5 minute series, edition of 1964;
    (3) ``Lake Cachuma, Cal.'', 7.5 minute series, edition of 1959;
    (4) ``Lompoc, Cal.'', 7.5 minute series, edition of 1959 
(photorevised 1974);
    (5) ``Lompoc Hills, Cal.'', 7.5 minute series, edition of 1959;
    (6) ``Los Alamos, Cal.'', 7.5 minute series, edition of 1959;
    (7) ``Los Olivos, Cal.'', 7.5 minute series, edition of 1959 
(photoinspected 1974);
    (8) ``Santa Rosa Hills, Cal.'', 7.5 minute series, edition of 1959;
    (9) ``Santa Ynez, Cal.'', 7.5 minute series, edition of 1959 
(photorevised 1974);
    (10) ``Solvang, Cal.'', 7.5 minute series, edition of 1959 
(photorevised 1974);
    (11) ``Zaca Creek, Cal.'', 7.5 minute series, edition of 1959; and
    (12) ``Zaca Lake, Cal.'', 7.5 minute series, edition of 1964.
    (c) Boundaries. The Santa Ynez Valley viticultural area is located 
within Santa Barbara County, California. The beginning point is found on 
the ``Los Alamos, California'' U.S.G.S. map where California Highway 246 
(indicated as Highway 150 on the Los Alamos map) intersects with the 
120 deg.22[min]30[sec] longitude line.
    (1) Then north following the 120 deg.22[min]30[sec] longitude line 
to Cebada Canyon Road.
    (2) Then northeast following Cebada Canyon Road and an unnamed jeep

[[Page 127]]

trail to the northern boundary of Section 9, T. 7 N., R. 33 W.
    (3) Then east following the northern boundaries of Sections 9, 10, 
11, 12, 7, and 8 to the northeast corner of Section 8, T. 7 N., R. 33 W.
    (4) Then south following the eastern boundaries of Sections 8 and 17 
to the intersection with the boundary dividing the La Laguna and San 
Carlos de Jonata Land Grants.
    (5) Then east following the boundary between the La Laguna and the 
San Carlos de Jonata Land Grants to the intersection with Canada de 
Santa Ynez.
    (6) Then northeast in a straight line for approximately 3.6 miles to 
Benchmark 947 at U.S. Highway 101.
    (7) Then northeast in a straight line for approximately 2.6 miles to 
the southwest corner of the La Zaca Land Grant.
    (8) Then following the boundary of the La Zaca Land Grant north, 
then east to its northeast corner.
    (9) Then east in a straight line for approximately 2.0 miles to the 
point of intersection of the La Laguna and Sisquoc Land Grants with the 
Los Padres National Forest.
    (10) Then following the boundary of the Los Padres National Forest 
south, east, and south until it intersects with the eastern boundary of 
Section 29, T. 7 N., R. 29 W.
    (11) Then south following the eastern boundaries of Sections 29, 32, 
5, 8, and 17 to the boundary of the Cachuma Recreation Area at Bitt 
Benchmark 1074.
    (12) Then following the boundary of the Cachuma Recreation Area west 
and south to the point of intersection with the Los Padres National 
Forest.
    (13) Then south and west following the boundary of the Los Padres 
National Forest to its intersection with the Las Cruces Land Grant at 
the southwest corner of Section 12, T. 5 N., R. 32 W.
    (14) Then north following the boundary of the Las Cruces Land Grant 
to the southeast corner of Section 26, T. 6 N., R. 32 W.
    (15) Then west following the southern boundaries of Sections 26, 27, 
28, and 29 to the intersection with the northern boundary of the San 
Julian Land Grant at the southwestern corner of Section 29, T. 6 N., R. 
32 W.
    (16) Then northwest following the boundary of the San Julian Land 
Grant to its intersection with the 120 deg.22[min]30[sec] longitude 
line.
    (17) Then northwest in a straight line for approximately 3.2 miles 
to the point where Santa Rosa Road intersects Salsipuedes Creek.
    (18) Then following Salsipuedes Creek downstream to the point of 
confluence with the Santa Ynez River.
    (19) Then northeast in a straight line for approximately 1.4 miles 
to an unnamed hill, elevation 597 feet.
    (20) Then northeast in a straight line for approximately 1.7 miles 
to the point of beginning.

[T.D. ATF-132, 48 FR 16252, Apr. 15, 1983]



Sec. 9.55  Bell Mountain.

    (a) Name. The name of the viticultural area described in this 
section is ``Bell Mountain.''
    (b) Approved map. The appropriate map for determining the boundaries 
of the Bell Mountain viticultural area is one U.S.G.S. map, titled: 
Willow City Quadrangle, 7.5 minute series, 1967.
    (c) Boundary--(1) General. The Bell Mountain viticultural area is 
located in Gillespie County, Texas. The starting point of the following 
boundary description is the summit of Bell Mountain (1,956 feet).
    (2) Boundary Description. (i) From the starting point, the boundary 
proceeds due southward for exactly one half mile;
    (ii) Then southeastward in a straight line to the intersection of 
Willow City Loop Road with an unnamed unimproved road, where marked with 
an elevation of 1,773 feet;
    (iii) Then generally southward along Willow City Loop Road (a light-
duty road) to Willow City.
    (iv) Then continuing southward and westward along the same light-
duty road to the intersection having an elevation of 1,664 feet;
    (v) Then continuing westward along the light-duty road to the 
intersection having an elevation of 1,702 feet;
    (vi) Then turning southward along the light-duty road to the 
intersection having an elevation of 1,736 feet;

[[Page 128]]

    (vii) Then turning westward along the light-duty road to the 
intersection having an elevation of 1,784 feet;
    (viii) Then turning southward and then westward, following the 
light-duty road to its intersection with Texas Highway 16, where marked 
with an elevation of 1,792 feet;
    (ix) Then due westward to the longitude line 98 deg.45[min];
    (x) Then northward along that longitude line to a point due west of 
an unnamed peak with an elevation of 1,784 feet;
    (xi) Then due eastward to the summit of that unnamed peak;
    (xii) Then in a straight line eastward to the intersection of an 
unnamed unimproved road with Texas Highway 16, where marked with an 
elevation of 1,822 feet;
    (xiii) Then following that unnamed road, taking the right-hand fork 
at an intersection, to a point due west of the summit of Bell Mountain;
    (xiv) Then due eastward to the summit of Bell Mountain.

[T.D. ATF-238, 51 FR 36400, Oct. 10, 1986]



Sec. 9.56  San Lucas.

    (a) Name. The name of the viticultural area described in this 
section is ``San Lucas.''
    (b) Approved maps. The appropriate maps for determining the boundary 
of San Lucas viticultural area are the following four U.S.G.S. 
topographical maps of the 7.5 minute series:

San Lucas, CA, 1949, photorevised 1979,
Nattrass Valley, CA, 1967,
San Ardo, CA, 1967, and,
Espinosa Canyon, CA, 1949, photorevised 1979.

    (c) Boundary. The San Lucas viticultural area is located in Monterey 
County in the State of California. The boundary is as follows:

    Beginning on the ``San Lucas Quadrangle'' map at the northwest 
corner of section 5 in Township 21 South, Range 9 East, the boundary 
proceeds northeasterly in a straight line approximately 0.35 mile to the 
630-foot promontory in section 32, T. 20 S., R. 9 E.;
    (1) Then east southeasterly in a straight line approximately 0.6 
mile to the 499-foot promontory in the southwest corner of section 33, 
T. 20 S., R. 9 E.;
    (2) Then east southeasterly in a straight line approximately 1.3 
miles to the 847-foot promontory in section 3, T. 21 S., R. 9 E., on the 
``Nattrass Valley Quadrangle'' map;
    (3) Then south southeasterly in a straight line approximately 2.2 
miles to the 828-foot promontory in section 14, T. 21 S., R. 9 E., on 
the ``San Ardo Quadrangle'' map;
    (4) Then east southeasterly in a straight line approximately 1.3 
miles to the 868-foot promontory in section 13, T. 21 S., R. 9 E.;
    (5) Then southeasterly in a straight line approximately 0.94 mile to 
the 911-foot promontory in section 19, T. 21 S., R. 10 E.;
    (6) Then easterly in a straight line approximately 1.28 miles to the 
1,042-foot promontory in section 20, T. 21 S., R. 10 E.;
    (7) Then east northeasterly in a straight line approximately 1.28 
miles to the 998-foot promontory in southeast corner of section 16, T. 
21 S., R. 10 E.;
    (8) Then southerly in a straight line approximately 2.24 miles to 
the 1,219-foot promontory near the east boundary of section 28, T. 21 
S., R. 10 E.;
    (9) Then southwesterly in a straight line approximately 1.5 miles to 
the 937-foot promontory near the north boundary of section 32, T. 21 S., 
R. 10 E.;
    (10) Then southwesterly in a straight line approximately 0.34 mile 
to the 833-foot promontory in section 32, T. 21 S., R. 10 E.;
    (11) Then south southeasterly in a straight line approximately 0.5 
mile to the 886-foot ``Rosenberg'' promontory in section 32, T. 21 S., 
R. 10 E.;
    (12) Then south southeasterly approximately 1.1 miles to the 781-
foot promontory in section 5, T. 22 S., R. 10 E.;
    (13) Then southeasterly in a straight line approximately 0.7 mile to 
the 767-foot promontory in section 9, T. 22 S., R. 10 E.;
    (14) Then southerly in a straight line approximately 0.5 mile to the 
647-foot promontory along the south boundary of section 9, T. 22 S., R. 
10 E.;
    (15) Then southwesterly in a straight line approximately 2.67 miles 
to the 835-foot promontory in section 19, T. 22 S., R. 10 E.;
    (16) Then west southwesterly in a straight line approximately 1.1 
miles to the 1,230-foot promontory in section 24, T. 22 S., R. 9 E.;
    (17) Then north northwesterly in a straight line approximately 1.4 
miles to the 1,149-foot promontory in section 14, T. 22 S., R. 9 E.;
    (18) Then northwesterly in a straight line approximately 0.57 mile 
to the 1,128-foot promontory in section 11, T. 22 S., R. 9 E.;
    (19) Then west southwesterly in a straight line approximately 0.58 
mile to the 1,220-foot promontory near the north boundary of section 15, 
T. 22 S., R. 9 E.;
    (20) Then northwesterly in a straight line approximately 1.33 miles 
to the 1,071-foot promontory in the northwest corner of section 9, T. 22 
S., R. 9 E.;
    (21) Then northwesterly in a straight line approximately 2.82 miles 
to the 1,004-foot

[[Page 129]]

promontory in section 31, T. 21 S., R. 9 E., on the ``Espinosa Canyon 
Quadrangle'' map;
    (22) Then north northwesterly in a straight line approximately 1.32 
miles to the 882-foot promontory in section 25, T. 21 S., R. 8 E.;
    (23) Then northwesterly in a straight line approximately 1.05 miles 
to the 788-foot promontory in section 23, T. 21 S., R. 8 E.;
    (24) Then northerly in a straight line approximately 1.54 miles to 
the 601-foot promontory in section 13, T. 21 S., R. 8 E.;
    (25) Then northeasterly in a straight line approximately 3.2 miles 
to the point of beginning.

[T.D. ATF-248, 52 FR 2945, Jan. 29, 1987]



Sec. 9.57  Sonoma County Green Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Green Valley'' qualified by the words ``Sonoma County'' in 
direct conjunction with the name ``Green Valley.'' On a label the words 
``Sonoma County'' may be reduced in type size to the minimum allowed in 
27 CFR 4.38(b).
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Green Valley viticultural area are three U.S.G.S. 
maps. They are titled:
    (1) ``Sebastopol Quadrangle, California--Sonoma Co.'', 7.5 minute 
series (1954, photorevised 1980);
    (2) ``Camp Meeker Quadrangle, California--Sonoma Co.'', 7.5 minute 
series (1954, photorevised 1971); and
    (3) ``Guerneville Quadrangle, California--Sonoma Co.'', 7.5 minute 
series (1955).
    (c) Boundaries. The Green Valley viticultural area is located in 
Sonoma County, California. The beginning point is located in the 
northeastern portion of the ``Camp Meeker Quadrangle'' map where the 
line separating Section 31 from section 32, in Township 8 North (T.8N.), 
Range 9 West (R.9W.) intersects River Road.
    (1) From the beginning point, the boundary runs south along the line 
separating Section 31 from Section 32, continuing south along Covey Road 
(shown on the map as an unnamed, light-duty road) to the town of 
Forestville where Covey Road intersects with State Highway 116 
(Gravenstein Highway).
    (2) Thence east along State Highway 116 until it turns in a 
southeasterly direction and then proceeding along State Highway 116 in a 
southeasterly direction until the point at which State Highway 116 
intersects State Highway 12 in the town of Sebastopol (located on the 
``Sebastopol Quadrangle'' map);
    (3) Thence in a southwesterly direction on State Highway 12 through 
the town of Sebastopol;
    (4) Thence in a westerly direction on State Highway 12, which 
becomes Bodega Road, until Bodega Road intersects with Pleasant Hill 
Road;
    (5) Thence in a southerly direction on Pleasant Hill Road until it 
intersects with Water Trough Road;
    (6) Thence westerly and then northwesterly on Water Trough Road 
until it intersects with Gold Ridge Road;
    (7) Thence in a southwesterly, northwesterly, and then a 
northeasterly direction along Gold Ridge Road until it intersects with 
Bodega Road;
    (8) Thence in a southwesterly direction along Bodega Road until 
Bodega Road intersects with Jonive Road in Township 6 North (T.6N.), 
Range 9 West (R.9W.) located in the southeast portion of U.S.G.S. map 
``Camp Meeker Quadrangle'';
    (9) Thence proceeding in a northwesterly direction on Jonive Road 
until it intersects Occidental Road;
    (10) Thence proceeding on Occidental Road in a northwesterly 
direction until Occidental Road intersects the west border of Section 
35;
    (11) Thence proceeding due north along the west borders of Sections 
35, 26, 23, and 14 to the northwest corner of Section 14;
    (12) Thence in an easterly direction along the north border of 
Section 14 to the northeast corner of Section 14;
    (13) Thence north along the west borders of Sections 12, 1, and 36 
to the northwest corner of Section 36 located in the extreme southern 
portion of the ``Guerneville Quadrangle'' map;
    (14) Thence in an easterly direction along the north border of 
Section 36 until it intersects with River Road;
    (15) Thence in a southeasterly direction along River Road to the 
point of beginning located on the ``Camp Meeker Quadrangle'' map.

[T.D. ATF-161, 48 FR 52579, Nov. 21, 1983]

[[Page 130]]



Sec. 9.58  Carmel Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Carmel Valley.''
    (b) Approved maps. The approved maps for determining the boundary of 
the Carmel Valley viticultural area are five U.S.G.S. topographic maps 
in the 7.5 minute series, as follows:
    (1) Mt. Carmel, Calif., dated 1956;
    (2) Carmel Valley, Calif., dated 1956;
    (3) Ventana Cones, Calif., dated 1956;
    (4) Chews Ridge, Calif., dated 1956; and
    (5) Rana Creek, Calif., dated 1956.
    (c) Boundary. The Carmel Valley viticultural area is located in 
Monterey County, California. The boundary is as follows:
    (1) The beginning point is the northeast corner of Section 5 in 
Township 17 South, Range 2 East.
    (2) The boundary follows the Los Laurelles Land Grant boundary 
south, then easterly, to the north-south section line dividing Section 9 
from Section 10 in Township 17 South, Range 2 East.
    (3) The boundary follows this section line south to the southwest 
corner of Section 22 in Township 17 South, Range 2 East.
    (4) From this point, the boundary follows section lines in Township 
17 South, Range 2 East:
    (i) To the southeast corner of Section 22,
    (ii) To the southwest corner of Section 26,
    (iii) To the southeast corner of Section 26,
    (iv) To the southwest corner of Section 36.
    (5) From this point, the boundary follows the Los Padres National 
Forest boundary east, then south, then east to the southwest corner of 
Section 9 in Township 18 South, Range 3 East.
    (6) The boundary follows the section line east to the southeast 
corner of the same section, where the section line rejoins the Los 
Padres National Forest boundary.
    (7) The boundary follows the Los Padres National Forest boundary to 
the north-south section line dividing Section 11 from Section 12 in 
Township 18 South, Range 3 East.
    (8) The boundary follows this section line north to the township 
line dividing Township 17 South from Township 18 South.
    (9) The boundary follows this township line west to the north-south 
section line dividing Section 34 from Section 35 in Township 17 South, 
Range 3 East.
    (10) The boundary follows this section line north to the Los 
Tularcitos Land Grant boundary.
    (11) The boundary follows the Los Tularcitos Land Grant boundary 
northwesterly to the Carmel River.
    (12) The boundary follows the Carmel River northerly to the Los 
Tularcitos Land Grant boundary.
    (13) The boundary follows the Los Tularcitos Land Grant boundary 
northeasterly to the unsurveyed township line (approximate location 
denoted by a line of red dashes) dividing Township 16 South form 
Township 17 South.
    (14) The boundary follows the unsurveyed township line west to the 
beginning point.

[T.D. ATF-119, 47 FR 55916, Dec. 14, 1982]



Sec. 9.59  Arroyo Seco.

    (a) Name. The name of the viticultural area described in this 
section is ``Arroyo Seco.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Arroyo Seco viticultural area are four U.S.G.S. 
quadrangle maps. They are entitled:
    (1) ``Greenfield, California,'' 7.5 minute series, edition of 1956;
    (2) ``Paraiso Springs, California,'' 7.5 minute series, edition of 
1956;
    (3) ``Soledad, California,'' 7.5 minute series, edition of 1955; and
    (4) ``Sycamore Flat, California,'' 7.5 minute series, edition of 
1956 (photoinspected 1972).
    (c) Boundaries. The Arroyo Seco viticultural area is located in 
Monterey County, California. The beginning point is found on the 
``Sycamore Flat'' U.S.G.S. map at the junction of Arroyo Seco Road and 
the Carmel Valley Road (indicated as the Jamesburg Road on the map).
    (1) Then east following Arroyo Seco Road to the southwest corner of 
Section 22, T. 19 S., R. 5 E.

[[Page 131]]

    (2) Then east following the southern boundaries of Sections 22, 23, 
24, 19, and 20 to the southeastern corner of Section 20, T. 19 S., R. 6 
E.
    (3) Then northeast in a straight line for approximately 1.3 miles to 
the summit of Pettits Peak.
    (4) Then northeast in a straight line for approximately 1.8 miles to 
the point where the 400[min] contour line intersects the northern 
boundary of Section 14, T. 19 S., R. 6 E.
    (5) Then east following the 400[min] contour line to a point 
immediately west of the Reservoir within the Posa de los Ositos Land 
Grant.
    (6) Then following the ridge line in a northeasterly direction for 
approximately 7.5 miles to U.S. Highway 101 at the intersection of 
Underwood Road.
    (7) Then east following Underwood Road to its intersection with the 
Posa de los Ositos Land Grant.
    (8) Then north following the boundary of the Posa de los Ositos Land 
Grant to the west bank of the Salinas River.
    (9) Then northwest following the west bank of the Salinas River to 
the southern boundary of Section 17, T. 18 S., R. 7 E.
    (10) Then due west for approximately 2.0 miles following the 
southern boundary of Section 17, and continuing to U.S. Highway 101.
    (11) Then following U.S. Highway 101 in a northwesterly direction to 
its intersection with Paraiso Road.
    (12) Then south following Paraiso Road to the intersection with 
Clark Road.
    (13) Then south in a straight line for approximately 1.8 miles to 
the northeast corner of Section 5, T. 19 S., R. 6 E.
    (14) Then due south following the eastern boundaries of Sections 5, 
8, and 17, to Arroyo Seco Road.
    (15) Then southwest in a straight line for approximately 1.0 mile to 
Bench Mark 673.
    (16) Then west in a straight line for approximately 1.8 miles to 
Bench Mark 649.
    (17) Then northwest in a straight line for approximately 0.2 mile to 
the northeast corner of Section 23, T. 19 S., R. 5 E.
    (18) Then west following the northern boundaries of Section 23 and 
22 to the northwest corner of Section 22, T. 19 S., R. 5 E.
    (19) Then south in a straight line for approximately 1.0 mile to the 
point of beginning.

[T.D. ATF-131, 48 FR 16246, Apr. 15, 1983]



Sec. 9.60  Shenandoah Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Shenandoah Valley.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Shenandoah Valley viticultural area are four U.S.G.S. 
Eastern United States 1:250,000 scale maps. The maps are titled: Roanoke 
(1971), Charlottesville (1956, with a revision in 1965), Cumberland 
(1956, revised 1969) and Baltimore (1957, revised 1978).
    (c) Boundaries. The Shenandoah Valley Viticultural area is located 
in Frederick, Clarke, Warren, Shenandoah, Page, Rockingham, Augusta, 
Rockbridge, Botetourt, and Amherst Counties in Virginia, and Berkeley 
and Jefferson Counties in West Virginia. The boundaries are as follows:
    (1) The boundary line starts at the point of the intersection of the 
Potomac River and the Virginia-West Virginia State line approximately 
eight miles east of Charlestown, West Virginia.
    (2) Then the boundary proceeds southwesterly approximately 14.8 
miles along the State line, which essentially follows the crest of the 
Blue Ridge Mountains, to its intersection with the western border line 
of Clarke County, Virginia.
    (3) Then the boundary continues approximately 13.8 miles 
southwesterly along the county line and the crest of the Blue Ridge to 
its intersection with the western boundary line of Warren County, 
Virginia.
    (4) Then the boundary continues approximately 15 miles along the 
Warren County line to its intersection with the Skyline Drive.
    (5) Then the boundary continues approximately 71 miles in a 
southwesterly direction along the Skyline Drive and the Blue Ridge to 
its intersection with the Blue Ridge Parkway.

[[Page 132]]

    (6) Then the boundary continues approximately 53 miles in a 
southeasterly direction along the Blue Ridge Parkway to its intersection 
with the James River.
    (7) Then the boundary proceeds approximately 44 miles along the 
James River in a west-northwesterly direction to its intersection with 
the northwest boundary line of the Jefferson National Forest near Eagle 
Rock.
    (8) Then the boundary proceeds approximately 10.5 miles in a 
northeasterly direction along the Jefferson National Forest line and 
along the crest of North Mountain to its intersection with the western 
boundary line of Rockbridge County.
    (9) Then the boundary continues approximately 23 miles along the 
county line in the same northeasterly direction to its intersection with 
the Chesapeake and Ohio Railroad.
    (10) Then the boundary continues approximately 23 miles along the 
railroad between the Great North Mountain and the Little North Mountain 
to its intersection with the southeastern boundary line of the George 
Washington National Forest at Buffalo Gap.
    (11) Then the boundary continues approximately 81 miles 
northeasterly along the George Washington National Forest Line to the 
Vertical Control Station, (elevation 1883), on the crest of Little North 
Mountain approximately 3 miles west of Van Buren Furnace.
    (12) Then the boundary line continues approximately 53 miles 
northeasterly along the crest of Little North Mountain to its 
intersection with the Potomac River in Fort Frederick State Park.
    (13) Then the boundary continues approximately 47.4 miles 
southeasterly along the Potomac River to the beginning point at that 
Rivers intersection with the boundary line between West Virginia and 
Virginia.

[T.D. ATF-120, 47 FR 57698, Dec. 28, 1982, as amended by T.D. ATF-249, 
52 FR 5958, Feb. 27, 1987]



Sec. 9.61  El Dorado.

    (a) Name. The name of the viticultural area described in this 
section is ``El Dorado.''
    (b) Approved maps. The approved U.S.G.S. topographic maps (7.5 
series; quadrangles) showing the boundaries of the El Dorado 
viticultural area, including quadrangles showing the area within the 
boundaries, are as follows:
    (1) ``Pilot Hill, California,'' 1954 (photorevised 1973);
    (2) ``Auburn, California,'' 1953 (photorevised 1973);
    (3) ``Greenwood, California,'' 1949 (photorevised 1973);
    (4) ``Georgetown, California,'' 1949 (photorevised 1973);
    (5) ``Foresthill, California,'' 1949 (photorevised 1973);
    (6) ``Michigan Bluff, California,'' 1952 (photorevised 1973);
    (7) ``Tunnel Hill, California,'' 1950 (photorevised 1973);
    (8) ``Slate Mountain, California,'' 1950 (photorevised 1973);
    (9) ``Pollock Pines, California,'' 1950 (photorevised 1973);
    (10) ``Stump Spring, California,'' 1951 (photorevised 1973);
    (11) ``Caldor, California,'' 1951 (photorevised 1973);
    (12) ``Omo Ranch, California,'' 1952 (photorevised 1973);
    (13) ``Aukum, California,'' 1952 (photorevised 1973);
    (14) ``Fiddletown, California,'' 1949;
    (15) ``Latrobe, California,'' 1949 (photorevised 1973);
    (16) ``Shingle Springs, California,'' 1949;
    (17) ``Coloma, California,'' 1949 (photorevised 1973);
    (18) ``Garden Valley, California,'' 1949 (photorevised 1973);
    (19) ``Placerville, California,'' 1949 (photorevised 1973);
    (20) ``Camino, California,'' 1952 (photorevised 1973);
    (21) ``Sly Park, California,'' 1952 (photorevised 1973);
    (c) Boundaries. The boundaries of the El Dorado viticultural area 
which is located in El Dorado County, California, are as follows:
    (1) The beginning point of the boundaries is the intersection of the 
North Fork of the American River (also the boundary line between El 
Dorado and Placer Counties) and the township line ``T. 11 N./T. 12 N.'' 
(``Pilot Hill'' Quadrangle);

[[Page 133]]

    (2) Thence northeast along the North Fork of the American River to 
its divergence with the Middle Fork of the American River, continuing 
then, following the Middle Fork of the American River to its 
intersection with the Rubicon River which continues as the boundary line 
between El Dorado and Placer Counties (``Auburn,'' ``Greenwood,'' 
``Georgetown,'' ``Foresthill,'' and ``Michigan Bluff'' Quadrangles);
    (3) Thence southeast along the Rubicon River to its intersection 
with the range line ``R. 11 E./R. 12 E.'' (``Tunnel Hill'' Quadrangle);
    (4) Thence south along the range line through T. 13 N. and T. 12 N., 
to its intersection with the township line ``T. 12 N./T. 11 N.'' 
(``Tunnel Hill'' and ``Slate Mountain'' Quadrangles);
    (5) Thence east along the range line to its intersection with the 
range line ``R. 12 E./R. 13 E.'' (``Slate Mountains'' and ``Pollock 
Pines'' Quadrangles);
    (6) Thence south along the range line to its intersection with the 
township line ``T. 11 N./T. 10 N.'' (``Pollock Pines'' Quadrangle);
    (7) Thence east along the township line to its intersection with the 
range line ``R. 13 E./R. 14 E.'' (``Pollock Pines'' and ``Stump Spring'' 
Quadrangles);
    (8) Thence south along the range line through T. 10 N., T. 9 N., and 
T. 8 N. to its intersection with the South Fork of the Cosumnes River 
(also the boundary line between El Dorado and Amador Counties) (``Stump 
Spring'' and ``Caldor'' Quadrangles);
    (9) Thence west and northwest along the South Fork of the Cosumnes 
River to its intersection with range line ``R. 11 E./R. 10 E.'' 
(``Caldor,'' ``Omo Ranch,'' ``Aukum,'' and ``Fiddletown'' Quadrangles);
    (10) Thence north along the range line to its intersection with the 
township line ``T. 8 N./T. 9 N.'' (``Fiddletown'' Quadrangle);
    (11) Thence west along the township line to its intersection with 
range line ``R. 10 E./R. 9 E.'' (``Fiddletown'' and ``Latrobe'' 
Quadrangles);
    (12) Thence north along the range line to its intersection with U.S. 
Route 50;
    (13) Thence west along U.S. Route 50 to its intersection with 
Cameron Park Drive;
    (14) Thence north along Cameron Park Drive to its intersection with 
Green Valley Road;
    (15) Thence east along Green Valley Road to its intersection with 
range line R.10 E/ R.9 E;
    (16) Thence north along the range line to its intersection with the 
township line T.10 N./ T.11 N;
    (17) Thence east along the township line approximately 4,000 feet to 
its intersection with the range line ``R. 9 E./R. 10 E.'' (``Coloma'' 
Quadrangle);
    (18) Thence north on the range line to its intersection with the 
township line ``T. 11 N./T. 12 N.'' (``Coloma'' Quadrangle); and
    (19) Thence west along the township line to the point of beginning 
(``Coloma'' and ``Pilot Hill'' Quadrangles).

[T.D. ATF-152, 48 FR 46520, Oct. 13, 1983, as amended by T.D. ATF-254, 
52 FR 23651, June 24, 1987]



Sec. 9.62  Loramie Creek.

    (a) Name. The name of the viticultural area described in this 
section is ``Loramie Creek.''
    (b) Approved map. The approved map for the Loramie Creek 
viticultural area is the U.S.G.S. map entitled ``Fort Loramie 
Quadrangle, Ohio--Shelby Co.,'' 7.5 minute series (topographic), 1961 
(photoinspected 1973).
    (c) Boundaries. The Loramie Creek viticultural area is located 
entirely within Shelby County, Ohio. The boundaries are as follows:
    (1) From the beginning point of the boundary at the intersection of 
State Route 47 and Wright-Puthoff Road, the boundary runs southward on 
Wright-Puthoff Road for a distance of 1\3/8\ miles to the intersection 
of the Wright-Puthoff Road with Consolidated Railroad Corporation 
(indicated on the U.S.G.S. map as New York Central Railroad);
    (2) Then along the Consolidated Railroad Corporation right-of-way in 
a southwesterly direction for a distance of 2\1/8\ miles to the 
intersection of the Consolidated Railroad Corporation right-of-way with 
Loramie Creek;

[[Page 134]]

    (3) Then upstream along Loramie Creek in a northwesterly direction 
for a distance of approximately 3\1/2\ miles to the intersection of 
Loramie Creek and State Route 47;
    (4) Then eastward on State Route 47 for a distance of approximately 
4\1/8\ miles to the beginning point of State Route 47 and Wright-Puthoff 
Road.

[T.D. ATF-118, 47 FR 53356, Nov. 26, 1982]



Sec. 9.63  Linganore.

    (a) Name. The name of the viticultural area described in this 
section is ``Linganore.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Linganor viticultural area are five U.S.G.S 
topographic maps. They are--
    (1) ``Walkersville Quadrangle, Maryland--Frederick Co.'', 7.5 minute 
series, 1953 (Photorevised 1979);
    (2) ``Libertytown Quadrangle, Maryland'', 7.5 minute series, 1944 
(Photorevised 1971);
    (3) ``Damascus Quadrangle, Maryland'', 7.5 minute series, 1944 
(Photorevised 1979);
    (4) ``Winfield Quadrangle, Maryland'', 7.5 minute series, 1950 
(Photorevised 1979); and
    (5) ``Union Bridge Quadrangle, Maryland,'' 7.5 minute series, 1953 
(Photorevised 1971).
    (c) Boundaries. The Linganore viticultural area is located in north 
central Maryland and encompasses parts of Frederick and Carroll 
Counties. From the beginning point lying at the confluence of Linganore 
Creek and the Monocacy River, on the Walkersville Quadrangle map, the 
boundary runs--
    (1) South-southeasterly 5,000 feet in a straight line to the point 
lying approximately 1,000 feet south of Interstate Highway 70 at the 
intersection of two unnamed light duty roads in the town of 
Bartonsville;
    (2) Then east-southeasterly 15,500 feet in a straight line to the 
point lying at the intersection of Mussetter Road and latitude line 39 
degrees 22 minutes 30 seconds;
    (3) Then east-northeasterly 8,125 feet in a straight line to the 
point lying at the intersection of Mill Road and State Highway 144;
    (4) Then easterly along State Highway 144 on the Walkersville 
Quadrangle, Libertytown Quadrangle, and Damascus Quadrangle maps to the 
point of intersection with State Highway 27, approximately midway 
between the towns of Ridgeville and Parrsville, on the Damascus 
Quadrangle map;
    (5) Then northeasterly along State Highway 27 on the Damascus 
Quadrangle, Libertytown Quadrangle, and Winfield Quadrangle maps to the 
point of intersection with State Highway 26 in the town of Taylorsville 
on the Winfield Quadrangle map;
    (6) Then northerly 2,750 feet in a straight line to the point on a 
hill identified as having an elevation of 850 feet;
    (7) Then northwesterly 21,000 feet in a straight line to the point 
lying at the intersection of State Highway 31 and latitude line 39 
degrees 30 minutes on the Libertytown Quadrangle and Union Bridge 
Quadrangle maps;
    (8) Then westerly 15,625 feet along latitude line 39 degrees 30 
minutes to the point of intersection with Copper Mine Road;
    (9) Then northwesterly along Copper Mine Road on the Union Bridge 
Quadrangle map to the point of intersection with longitude line 77 
degrees 15 minutes;
    (10) Then southerly 5,250 feet along longitude line 77 degrees 15 
minutes to the point of intersection with latitude line 39 degrees 30 
minutes on the Union Bridge Quadrangle and Walkersville Quadrangle maps;
    (11) Then southwesterly 46,750 feet in a straight line on the 
Walkersville Quadrangle map to the point of beginning.

[T.D. ATF-140, 48 FR 37374, Aug. 18, 1983]



Sec. 9.64  Dry Creek Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Dry Creek Valley.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Dry Creek Valley viticultural area are six U.S.G.S. 
topographic maps. They are--
    (1) ``Geyserville Quadrangle, California--Sonoma County,'' 7.5 
minute series, 1955 (Photorevised 1975);

[[Page 135]]

    (2) ``Jimtown Quadrangle, California--Sonoma County,'' 7.5 minute 
series, 1955 (Photorevised 1975);
    (3) ``Healdsburg Quadrangle, California--Sonoma County,'' 7.5 minute 
series, 1955 (Photorevised 1980);
    (4) ``Guerneville Quadrangle, California--Sonoma County,'' 7.5 
minute series, 1955;
    (5) ``Cazadero Quadrangle, California--Sonoma County,'' 7.5 minute 
series, 1978; and
    (6) ``Warm Springs Dam Quadrangle (formerly `Skaggs Springs 
Quadrangle'), California--Sonoma County,'' 7.5 minute series, 1978.
    (c) Boundaries. The Dry Creek Valley viticultural area is located in 
north central Sonoma County, California. From the beginning point, lying 
at the intersection of latitude line 38 degrees 45 minutes and the 
northwest corner of Section 5, T. 10 N., R. 10 W. on the ``Geyserville 
Quadrangle'' map, the boundary runs--
    (1) Southeasterly in a straight line approximately 11,000 feet 
(closely following the ridge line) to the northeast corner of Section 9, 
T. 10 N., R. 10 W.;
    (2) Then southerly along the east line of Section 9 to the southeast 
corner thereof;
    (3) Then S. 74 degrees, E. 2,800 feet in a straight line to the 
northeasterly tip of a small unnamed lake;
    (4) Then N. 57 degrees, E. 2,300 feet in a straight line to the 
southeast corner of Section 10, T. 10 N., R. 10 W.;
    (5) Then S. 16 degrees, E. 1,800 feet in a straight line to the 
point on a peak identified as having an elevation of 664 feet;
    (6) Then S. 55 degrees, E. 7,900 feet in a straight line to the most 
northerly point on the northeasterly line of ``Olive Hill'' cemetery 
lying on the easterly side of Canyon Road;
    (7) Then southeasterly along the northeasterly line of ``Olive 
Hill'' cemetery to the most easterly point thereon;
    (8) Then S. 2 degrees, E. 3,100 feet in a straight line to the point 
in the westerly fork of Wood Creek lying at the westerly terminus of a 
dirt road;
    (9) Then southerly 3,000 feet along the west fork of Wood Creek to 
the point lying 400 feet north of the point on a peak identified as 
having an elevation of 781 feet;
    (10) Then southerly 400 feet in a straight line to the point on a 
peak identified as having an elevation of 781 feet;
    (11) Then S. 50\1/2\ degrees, E. 15,500 feet in a straight line to 
the point lying at the intersection of Lytton Creek and the township 
line common to T. 9 N. and T. 10 N. in R. 9 W.;
    (12) Then southerly along the meanders of Lytton Creek to the point 
of intersection with Lytton Springs Road in T. 9 N., R. 9 W.;
    (13) Then easterly along Lytton Springs Road to the point of 
intersection with U.S. Highway 101 (a.k.a. Redwood Highway) on the 
``Jimtown Quadrangle'' map;
    (14) Then southerly along U.S. Highway 101 to the point of 
intersection with an unnamed light duty road (known locally as Chiquita 
Road) on the ``Geyserville Quadrangle'' map;
    (15) Then easterly along the unnamed light duty road to the point of 
intersection with an unnamed heavy duty road (known locally as 
Healdsburg Avenue) on the ``Jimtown Quadrangle'' map;
    (16) Then southerly along the unnamed heavy duty road through the 
town of Healdsburg to the point of intersection with the Russian River 
on the ``Healdsburg Quadrangle'' map;
    (17) Then southerly along the meanders of the Russian River to the 
confluence of Dry Creek;
    (18) Then west-southwesterly 1,300 feet in a straight line to an 
unnamed light duty road (known locally as Foreman Lane);
    (19) Then westerly along the unnamed light duty road, crossing West 
Dry Creek Road and passing Felta School, to the point of intersection 
with Felta Creek on the ``Guerneville Quadrangle'' map;
    (20) Then southwesterly 18,000 feet along the meanders of Felta 
Creek to the point lying at the intersection of three springs in T. 8 
N., R. 10 W., approximately 300 feet east from the word ``Springs'';
    (21) Then S. 58 degrees, W. 15,000 feet in a straight line to the 
southwest corner of Section 9, T. 8 N., R. 10 W.;
    (22) Then northerly along the west line of Sections 9 and 4, T. 8 
N., R. 10

[[Page 136]]

W., continuing along the west line of Section 33, T. 9 N., R. 10 W. to 
the northwest corner thereof;
    (23) Then westerly along the south line of Sections 29 and 30, T. 9 
N., R. 10 W. to the southwest corner of Section 30 on the ``Cazadero 
Quadrangle'' map;
    (24) Then northerly along the west line of Sections 30 and 19, T. 9 
N., R. 10 W. to the northwest corner of Section 19;
    (25) Then westerly along the south line of Section 13, T. 9 N., R. 
11 W. to the southwest corner thereof;
    (26) Then southwesterly 14,200 feet in a straight line to the 
northeast corner of Section 20, T. 9 N., R. 11 W.;
    (27) Then westerly along the north line of Section 20 to the 
northwest corner thereof;
    (28) Then northerly along the east line of Sections 18, 7, and 6, T. 
9 N., R. 11 W., continuing along the east line of Sections 31, 30, 19, 
18, 7, and 6, T. 10 N., R. 11 W. to the point of intersection with 
latitude line 38 degrees 45 minutes on the ``Warm Springs Dam 
Quadrangle'' map; and
    (29) Then easterly along latitude line 38 degrees 45 minutes to the 
point of beginning on the ``Geyserville Quadrangle'' map.

[T.D. ATF-137, 48 FR 35397, Aug. 4, 1983, as amended by T.D. ATF-468, 66 
FR 50565, Oct. 4, 2001]



Sec. 9.65  North Fork of Roanoke.

    (a) Name. The name of the viticultural area described in this 
section is ``North Fork of Roanoke.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the North Fork of Roanoke viticultural area are six 
U.S.G.S. Virginia, 7.5 minute series maps. They are:
    (1) McDonalds Mill Quadrangle, 1965;
    (2) Glenvar Quadrangle, 1965;
    (3) Elliston Quadrangle, 1965;
    (4) Ironto Quadrangle, 1965;
    (5) Blacksburg Quadrangle, 1965; and
    (6) Newport Quadrangle, 1965.
    (c) Boundaries. The North Fork of Roanoke viticultural area is 
located in parts of Roanoke and Montgomery Counties in southern 
Virginia.
    (1) The point of the beginning is in the north at the intersection 
of State Routes 785 and 697 in Roanoke County.
    (2) Then the boundary follows State Route 697 northeast over 
Crawford Ridge to the intersection at State Route 624.
    (3) Then the boundary turns southwest on State Route 624 along the 
boundary of the Jefferson National Forest and then continues across the 
Montgomery County line to U.S. 460 (business).
    (4) Then the boundary follows U.S. Route 460 (business) south 
through the town of Blacksburg.
    (5) Then the boundary continues on U.S. Route 460 (bypass) to the 
intersection of U.S. Route 460 East, where it turns east for 
approximately one mile to the intersection of U.S. Interstate Highway 81 
at Interchange 37.
    (6) Then the boundary continues northeast on Interstate Highway 81 
to its intersection with State Route 603 at interchange 38.
    (7) Then the boundary continues northwest on State Route 603 to its 
intersection with State Route 629.
    (8) Then the boundary follows State Route 629 (which later becomes 
State Route 622 north of Brandshaw Creek) 2 miles across the Roanoke 
County line to where it intersects the Chesapeake and Potomac Telephone 
Company right-of-way.
    (9) Then the boundary turns northwest along the C & P right-of-way 
over Pearis Mountain to the point where the right-of-way intersects 
State Route 785, one quarter mile northeast of the intersections of 
State Routes 785 and 697.
    (10) Then the boundary follows State Route 784 back to the beginning 
point.

[T.D. ATF-129, 48 FR 16250, Apr. 15, 1983, as amended by T.D. ATF-249, 
52 FR 5958, Feb. 27, 1987]



Sec. 9.66  Russian River Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Russian River Valley.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Russian River Valley viticultural area are the 1954 
U.S.G.S. 7.5 minute series maps titled:

``Healdsburg Quadrangle, California''
``Guerneville Quadrangle, California''
``Cazadero Quadrangle, California''
``Duncans Mills Quadrangle, California''

[[Page 137]]

``Camp Meeker Quadrangle, California''
``Valley Ford Quadrangle, California''
``Sebastopol Quadrangle, California''
``Santa Rosa Quadrangle, California''
``Mark West Springs Quadrangle, California''
``Jimtown Quadrangle, California''

    (c) Boundaries. The Russian River Valley viticultural area is 
located in Sonoma County, California.
    (1) Starting point Healdsburg map-Healdsburg Avenue Bridge over the 
Russian River at Healdsburg. Proceed south along Russian River to the 
point where Russian River and Dry Creek converge, from this point 
proceed west in a straight line to Forman Lane.
    (2) Proceed west along Foreman Lane to where it crosses Westside 
Road and becomes Felta School Road.
    (3) Proceed west on Felta School Road to the point where it crosses 
Felta Creek.
    (4) Proceed 18000[min] up Felta Creek to its headwaters as shown on 
the Guerneville, map as ``Springs.''
    (5) Proceed southwest in a straight line 58 degrees W 27000[min] to 
an intersection with Hulbert Creek on the Cazadero map.
    (6) Proceed south and southeast along Hulbert Creek to the point 
where it intersects California Hwy 116 on the Duncan Mills map.
    (7) Proceed in a westerly direction along California Hwy 116 to 
Monte Rio where it intersects the Bohemian Hwy.
    (8) Proceed southeast along the Bohemian Hwy onto the Camp Meeker 
Map and then the Valley Ford map to the town of Freestone where it 
intersects the Bodega Road.
    (9) Proceed northeast along the Bodega Road onto the Sebastopol map 
to the city of Sebastopol where it becomes California Hwy 12 then 
northeast along California Hwy 12 to its intersection with Wright Road.
    (10) Proceed north along Wright Road to where it becomes Fulton Road 
and into the town Fulton to where in intersects River Road.
    (11) Proceed east along River Road to its intersection with Mark 
West Springs Road.
    (12) Proceed north east along Mark West Springs Road through the 
Santa Rosa map and onto the Mark West map to where it becomes Porter 
Creek Road and onto its intersection with Franz Valley Road.
    (13) Proceed in a northerly direction along Franz Vally Road to the 
northerly most crossing of Franz Creek.
    (14) Proceed west along Franz Creek until it intersects the line 
separating Section 21 and Section 22.
    (15) Proceed south on this line separating Section 21 and 22 to the 
corner common to Section 21 and 22 and Section 27 and 28.
    (16) Proceed west from the common corner of Section 21 and 22 and 27 
and 28 and in a straight line to the peak of Chalk Hill on the 
Healdsburg map.
    (17) Proceed west from the peak of Chalk Hill in a straight line to 
the point where Brooks Creek joins the Russian River.
    (18) Proceed north west in a straight line 8000[foot] to a peak 
marked 772[foot] elv. on the Jimtown map.
    (19) Proceed north west in a straight line from hill top 772[foot] 
elv. to hill top 596 elv.
    (20) Proceed north west in a straight line from hill top 596[foot] 
elv. to hill top 516[foot] elv.
    (21) Proceed north west in a straight line from hill top 516[foot] 
elv. to hill top 530[foot] elv.
    (22) Proceed west in a straight line from hill top 530[foot] elv. to 
hill top 447[foot] elv.
    (23) Proceed west in a straight line from hill top 447[foot] elv. to 
the point where Alexander Valley Road meets Healdsburg Avenue.
    (24) Proceed south along Healdsburg Avenue through the city of 
Healdsburg on the Healdsburg map to the point where it crosses the 
Russian River at the point of beginning.

[T.D. ATF-159, 48 FR 48813, Oct. 21, 1983, as amended by T.D. ATF-249, 
52 FR 5959, Feb. 27, 1987]



Sec. 9.67  Catoctin.

    (a) Name. The name of the viticultural area described in this 
section is ``Catoctin.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Catoctin viticultural area are 12 U.S.G.S. maps in the 
scale 1:24,000. They are--
    (1) ``Point of Rocks Quadrangle, Maryland--Virginia,'' 7.5 minute 
series, 1970;

[[Page 138]]

    (2) ``Buckeystown Quadrangle, Maryland,'' 7.5 minute series, 1952 
(Photorevised 1971);
    (3) ``Frederick Quadrangle, Maryland,'' 7.5 minute series, 1953 
(Photorevised 1980);
    (4) ``Catoctin Furnace Quadrangle, Maryland,'' 7.5 minute series, 
1953 (Photorevised 1979);
    (5) ``Blue Ridge Summit Quadrangle, Maryland--Pennsylvania,'' 7.5 
minute series, 1953 (Photorevised 1971);
    (6) ``Emmitsburg Quadrangle, Maryland--Pennsylvania,'' 7.5 minute 
series, 1953 (Photorevised 1971);
    (7) ``Smithsburg Quadrangle, Maryland--Pennsylvania,'' 7.5 minute 
series, 1953 (Photorevised 1971);
    (8) ``Myersville Quadrangle, Maryland,'' 7.5 minute series, 1953 
(Photorevised 1971);
    (9) ``Funkstown Quadrangle, Maryland,'' 7.5 minute series, 1953 
(Photorevised 1971);
    (10) ``Keedysville Quadrangle, Maryland--West Virginia,'' 7.5 minute 
series, 1978;
    (11) ``Harpers Ferry Quadrangle, Virginia--Maryland--West 
Virginia,'' 7.5 minute series, 1969; and
    (12) ``Charles Town Quadrangle, West Virginia--Virginia--Maryland,'' 
7.5 minute series, 1978;
    (13) ``Middletown Quadrangle, Maryland,'' 7.5 minute series, 1953 
(photorevised 1979);
    (c) Boundaries. The Catoctin viticultural area is located in western 
Maryland and encompasses parts of Frederick and Washington Counties. 
From the beginning point at the point where U.S. Highway 15 crosses the 
Potomac River and enters the land mass of Maryland on the ``Point of 
Rocks Quadrangle'' map, the boundary runs--
    (1) Northerly 1,100 feet in a straight line to the point of 
intersection with a 500-foot contour line;
    (2) Then northeasterly along the meanders of the 500-foot contour 
line on the ``Point of Rocks Quadrangle,'' ``Buckeystown Quadrangle,'' 
``Frederick Quadrangle,'' ``Catoctin Furnace Quadrangle,'' ``Blue Ridge 
Summit Quadrangle,'' and ``Emmitsburg Quadrangle'' maps to the point of 
intersection with the Maryland--Pennsylvania State line on the 
``Emmitsburg Quadrangle'' map;
    (3) Then west along the Maryland-Pennsylvania State line on the 
``Emmitsburg Quadrangle,'' ``Blue Ridge Summit Quadrangle,'' and 
``Smithsburg Quadrangle'' maps to the point of intersection with the 
first 800-foot contour line lying west of South Mountain on the 
``Smithsburg Quadrangle'' map;
    (4) Then southwesterly along the meanders of the 800-foot contour 
line on the ``Smithburg Quadrangle,'' ``Myersville Quadrangle,'' 
``Funkstown Quadrangle,'' and ``Keedysville Quadrangle'' maps to the 
point of intersection with an unnamed light duty road (known locally as 
Clevelandville Road) north of the town of Clevelandville on the 
``Keedysville Quadrangle'' map;
    (5) Then southerly along the unnamed light duty road to the point of 
intersection with Reno Monument Road;
    (6) Then southwesterly 13,500 feet in a straight line to the point 
lying at the intersection of Highway 67 and Millbrook Road;
    (7) Then westerly along Millbrook Road to the point of intersection 
with Mount Briar Road;
    (8) Then northerly along Mount Briar Road to the point of 
intersection with a 500-foot contour line;
    (9) Then northerly along the 500-foot contour line to the point of 
intersection with Red Hill Road;
    (10) Then southerly along the 500-foot contour line to the point of 
intersection with Porterstown Road;
    (11) Then south-southwesterly 29,000 feet in a straight line to the 
most eastern point on the boundary line of the Chesapeake and Ohio Canal 
National Historical Park lying north of the town of Dargan;
    (12) Then southwesterly 7,500 feet in a straight line to the point 
of the ``Harpers Ferry Quadrangle'' map lying approximately 600 feet 
northwest of Manidokan Camp at the confluence of an unnamed stream and 
the Potomac River; and
    (13) Then easterly along the meanders of the Potomac River on the 
``Harpers Ferry Quadrangle,'' ``Charles Town Quadrangle,'' and ``Point 
of

[[Page 139]]

Rocks Quadrangle'' maps to the point of beginning.

[T.D. ATF-154, 48 FR 46523, Oct. 13, 1983, as amended by T.D. ATF-249, 
52 FR 5959, Feb. 27, 1987]



Sec. 9.68  Merritt Island.

    (a) Name. The name of the viticultural area described in this 
section is ``Merritt Island.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Merritt Island viticultural area are two U.S.G.S. 
maps, 7.5 minute series. They are entitled:
    (1) ``Clarksburg Quadrangle, California,'' 1967 (Photo revised 
1980); and
    (2) ``Courtland Quadrangle, California,'' 1978.
    (c) Boundaries. The Merritt Island viticultural area is located in 
Yolo County, California, six miles south of the City of Sacramento. The 
boundaries of the Merritt Island viticultural area, using landmarks and 
points of reference found on the appropriate U.S.G.S. maps, are as 
follows:
    (1) Starting at the most southernly point, the intersection of 
Sutter Slough with the Sacramento River.
    (2) Then west along the course of Sutter Slough for 0.54 miles until 
it intersects Elk Slough.
    (3) Then northeast along the course of Elk Slough for 9.58 miles to 
the community of Clarksburg and the intersection of Sacramento River.
    (4) Then southeasterly along the course of the Sacramento River for 
7.8 miles to the beginning point.

[T.D. ATF-134, 48 FR 22146, May 17, 1983, as amended by T.D. ATF-249, 52 
FR 5959, Feb. 27, 1987]



Sec. 9.69  Yakima Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Yakima Valley.''
    (b) Approved maps. The approved maps for determining the boundary of 
the Yakima Valley viticultural area are two U.S.G.S. maps. They are 
entitled:
    (1) ``Walla Walla, Washington,'' scaled 1:250,000, edition of 1953, 
limited revision 1963; and
    (2) ``Yakima, Washington,'' scaled 1:250,000, edition of 1958, 
revised 1971.
    (c) Boundaries. The Yakima Valley viticultural area is located in 
Benton and Yakima Counties, Washington. The beginning point is found on 
the ``Yakima, Washington,'' U.S.G.S. map at the Wapato Dam located on 
the Yakima River.
    (1) Then east following the crest of the Rattlesnake Hills across 
Elephant Mountain, Zillah Peak, High Top (elevation 3031 feet), and an 
unnamed mountain (elevation 3629 feet) to the Bennett Ranch;
    (2) Then due east approximately 0.2 mile to the boundary of the 
Hanford Atomic Energy Commission Works;
    (3) Then southeast following the boundary of the Hanford AEC Works 
along the Rattlesnake Hills to the Yakima River;
    (4) Then southeast across the top of Red Mountain to the peak of 
Badger Mountain;
    (5) Then due south for approximately 4.9 miles to the 1000 foot 
contour line immediately south of the Burlington Northern Railroad 
(indicated on map as the Northern Pacific Railroad);
    (6) Then west following the 1000 foot contour line to its 
intersection with U.S. Highway 97 immediately west of Hembre Mountain;
    (7) Then west following the Toppenish Ridge, across an unnamed 
mountain (elevation 2172 feet), an unnamed mountain (elevation 2363 
feet), to the peak of Toppenish Mountain (elevation 3609 feet);
    (8) Then northwest in straight line for approximately 9.3 miles to 
the lookout tower at Fort Simcoe Historical State Park;
    (9) Then north in a straight line for approximately 11.7 miles to an 
unnamed peak, (elevation 3372 feet); and
    (10) Then east following Ahtanum Ridge, crossing unnamed peaks of 
2037 feet elevation, 2511 feet elevation, 2141 feet elevation, to the 
Wapato Dam at the point of beginning.

[T.D. ATF-128, 48 FR 14375, Apr. 4, 1983]



Sec. 9.70  Northern Sonoma.

    (a) Name. The name of the viticultural area described in this 
section is ``Northern Sonoma.''
    (b) Approved maps. The approved maps for determining the boundary of

[[Page 140]]

the Northern Sonoma viticultural area are the U.S.G.S. Topographical Map 
of Sonoma County, California, scale 1:100,000, dated 1970, the Asti 
Quadrangle, California, 7.5 minute series (Topographic) Map, dated 1959, 
photorevised 1978, and the Jimtown Quadrangle, California-Sonoma County, 
7.5 Minute series (Topographic) Map, dated 1955, photorevised 1975.
    (c) Boundary. The Northern Sonoma Viticultural area is located in 
Sonoma County, California. The boundary description in paragraphs (c)(1) 
through (c)(28) of this section includes (in parentheses) the local 
names of roads which are not identified by name on the map.
    (1) On the U.S.G.S. Topographical Map of Sonoma County, California, 
the beginning point is the point, in the town of Monte Rio, at which a 
secondary highway (Bohemian Highway) crosses the Russian River.
    (2) The boundary follows this secondary highway (Bohemian Highway) 
southeasterly across the Russian River, along Dutch Bill Creek, through 
the towns of Camp Meeker, Occidental, and Freestone, then northeasterly 
to the point at which it is joined by State Highway 12.
    (3) The boundary follows State Highway 12 through the town of 
Sebastopol to the point, near a bench mark at elevation 96 feet, at 
which it intersects a northbound secondary highway (Fulton Road) leading 
toward the town of Fulton.
    (4) The boundary follows this secondary highway (Fulton Road) north 
to the town of Fulton where it intersects an east-west secondary highway 
(River Road).
    (5) The boundary follows this secondary highway (River Road)--
    (i) East past U.S. Highway 101 (where the name of this secondary 
highway changes to Mark West Springs Road),
    (ii) Easterly, then northerly to the town of Mark West Springs 
(where the name of this secondary highway changes to Porter Road),
    (iii) Easterly to the town of Petrified Forest (where the name of 
this secondary highway changes to Petrified Forest Road), and
    (iv) Northeasterly to the Sonoma County-Napa County line.
    (6) The boundary follows the Sonoma County-Napa County line 
northerly to the Sonoma County-Lake County line.
    (7) The boundary follows the Sonoma County-Lake County line 
northwesterly to the section line on the north side of Section 11, 
Township 10 North, Range 8 West.
    (8) The boundary follows this section line west to the northwest 
corner of Section 9, Township 10 North, Range 8, West.
    (9) The boundary follows the section line south to the southwest 
corner of Section 4, Township 9 North, Range 8, West.
    (10) The boundary proceeds northerly along the western lines of 
section 4, of Township 9 North, Range 8 West, and sections 33, 28, 21, 
16, and 9 of Township 10 North, Range 8 West of the Jimtown Quadrangle 
map.
    (11) The boundary proceeds westerly along the northern lines of 
sections 8 and 7, Township 10 North, Range 8 West and section 12, 
Township 10 North, Range 9 West to the southeastern corner of section 2, 
Township 10 North, Range 9 West.
    (12) The boundary proceeds northwesterly in a straight line to the 
eastern line of section 3 at 38 degrees 45 minutes latitude, Township 10 
North, Range 9 West.
    (13) The boundary proceeds westerly along latitude line 38 degrees 
45 minutes to the point lying at 122 degrees 52 minutes 30 seconds 
longitude.
    (14) The boundary proceeds northwesterly in a straight line to the 
southeast corner of section 4, Township 11 North, Range 10 West, on the 
Asti, Quadrangle map.
    (15) The boundary proceeds northeasterly in a straight line to the 
southeast corner of section 34, Township 12 North, Range 10 West.
    (16) The boundary proceeds north along the east boundary of section 
34, Township 12 North, Range 10 West on the U.S.G.S. Topographical Map 
of Sonoma County, California, to the Sonoma County-Mendocino County 
line.
    (17) The boundary proceeds along the Sonoma County-Mendocino County 
line west then south to the southwest corner of section 34, Township 12 
North, Range 11 West.

[[Page 141]]

    (18) The boundary proceeds in a straight line east southeasterly to 
the southeast corner of section 2, Township 11 North, Range 11 West.
    (19) The boundary proceeds in a straight line south southeasterly to 
the southeast corner of section 24, Township 11 North, Range 11 West.
    (20) The boundary proceeds in a straight line southeasterly across 
sections 30, 31, and 32 in Township 11 North, Range 10 West, to the 
point at 38 degrees 45 minutes North latitude parallel and 123 degrees 
00 minutes East longitude in section 5, Township 10 North, Range 10 
West.
    (21) The boundary proceeds along this latitude parallel west to the 
west line of section 5, Township 10 North, Range 11 West.
    (22) The boundary proceeds along the section line south to the 
southeast corner of section 18, Township 9 North, Range 11 West.
    (23) The boundary proceeds in a straight line southwesterly 
approximately 5 miles to the peak of Big Oat Mountain, elevation 1,404 
feet.
    (24) The boundary proceeds in a straight line southerly 
approximately 2\3/4\ miles to the peak of Pole Mountain, elevation 2,204 
feet.
    (25) The boundary proceeds in a straight line southeasterly 
approximately 4\3/4\ miles to the confluence of Austin Creek and the 
Russian River.
    (26) The boundary proceeds along the Russian River northeasterly, 
then southeasterly to the beginning point.

[T.D. ATF-204, 50 FR 20562, May 17, 1985, as amended by T.D. ATF-233; 51 
FR 30354, Aug. 26, 1986; T.D. ATF-300, 55 FR 32402, Aug. 9, 1990]



Sec. 9.71  Hermann.

    (a) Name. The name of the viticultural area described in this 
section is ``Hermann.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Hermann viticultural area are six U.S.G.S. Missouri 
Quadrangle maps, 7.5 minute series. They are entitled:
    (1) Hermann (1974).
    (2) Berger (1974).
    (3) Gasconade (1974).
    (4) Pershing (1974).
    (5) Swiss (1973).
    (6) Dissen (1973).
    (c) Boundaries. The Hermann viticultural area is located in central 
Missouri along and south of the Missouri River, in the northern portions 
of Gasconade and Franklin Counties. The boundaries of the Hermann 
viticultural area, using landmarks and points of reference found on the 
appropriate U.S.G.S. maps, are as follows:
    (1) Starting at the intersection of the Gasconade River with the 
Missouri River.
    (2) Then continuing east and northeast approximately 16.5 miles 
along the Missouri River Pacific Railroad, as it parallels the Missouri 
River, to the Gasconade/Franklin County line.
    (3) Then continuing along the Missouri Pacific Railroad southeast 
approximately 8.5 miles to the intersection Big Berger Creek.
    (4) Then southwest along the winding course of Big Berger Creek for 
approximately 20 miles (eight miles due southwest) to Township line 
T.44/45N.
    (5) Then west along the T.44/45N. line approximately 15.5 miles to 
the intersection of First Creek.
    (6) Then north and northwest along the course of First Creek 
approximately 13.7 miles (6.5 miles straight northwest) to the 
intersection of the Gasconade River.
    (7) Then northeast along the course of the Gasconade River 
approximately 3.8 miles to the beginning point.

[T.D. ATF-136, 48 FR 37372, Aug. 18, 1983, as amended by T.D. ATF-249, 
52 FR 5959, Feb. 27, 1987]



Sec. 9.72  Southeastern New England.

    (a) Name. The name of the viticultural area described in this 
section is ``Southeastern New England.''
    (b) Approved maps. The approved maps for determining the boundary of 
the Southeastern New England viticultural area are three U.S.G.S. maps. 
They are entitled:
    (1) ``Boston, Mass.; N.H.; Conn.; R.I.; Maine'', scaled 1:250,000, 
edition of 1956, revised 1970;
    (2) ``Hartford, Conn.; N.Y.; N.J.; Mass.'', scaled 1:250,000, 
edition of 1962, revised 1975; and
    (3) ``Providence, R.I.; Mass.; Conn.; N.Y.'', scaled 1:250,000, 
edition of 1947, revised 1969.

[[Page 142]]

    (c) Boundaries. The Southeastern New England viticultural area is 
located in the counties of New Haven, New London, and Middlesex in 
Connecticut; in the counties of Bristol, Newport, Providence, and 
Washington, in Rhode Island; and in the counties of Barnstable, Bristol, 
Dukes, Nantucket, Norfolk, and Plymouth in Massachusetts. The beginning 
point is found on the ``Hartford'' U.S.G.S. map in New Haven Harbor;
    (1) Then north following the Quinnipiac River to U.S. Interstate 91;
    (2) Then east following U.S. Interstate 91 to Connecticut Highway 
80;
    (3) Then east following Connecticut Highway 80 to Connecticut 
Highway 9 near Deep River;
    (4) Then north following Connecticut Highway 9 to Connecticut 
Highway 82;
    (5) Then north, east, south and east following Connecticut Highway 
82 and 182 to Connecticut Highway 2 in Norwich;
    (6) Then east following Connecticut Highway 2 to Connecticut Highway 
165;
    (7) Then east following Connecticut and Rhode Island Highway 165 to 
Interstate Highway 95 near Millville;
    (8) Then north following Interstate Highway 95 to the Kent County-
Washington County boundary;
    (9) Then east following the Kent County-Washington County boundary 
into Narragansett Bay;
    (10) Then north through Narragansett Bay, the Providence River, and 
the Blackstone River to the Rhode Island-Massachusetts State boundary;
    (11) Then east and south following the Rhode Island-Massachusetts 
State boundary to the Norfolk-Bristol (Mass.) County boundary;
    (12) Then northeast following the Norfolk-Bristol (Mass.) County 
boundary to the Amtrak right-of-way (Penn Central on map) northeast of 
Mansfield;
    (13) Then north following the Amtrak right-of-way to the Neponset 
River immediately east of the Norwood Memorial Airport;
    (14) Then northeast following the Neponset River into Dorchester 
Bay;
    (15) Then east following the Norfolk-Suffolk County boundary, and 
the Plymouth-Suffolk County boundary into Massachusetts Bay;
    (16) Then returning to the point of beginning by way of 
Massachusetts Bay, the Atlantic Ocean, Block Island Sound and Long 
Island Sound; and including all of the offshore islands in Norfolk, 
Plymouth, Barnstable, Nantucket, Dukes, and Bristol Counties, 
Massachusetts; all offshore islands in Rhode Island; and all offshore 
islands in Connecticut east of the Quinnipiac River.

[T.D. ATF-169, 49 FR 11830, Mar. 28, 1984]



Sec. 9.73  Martha's Vineyard.

    (a) Name. The name of the viticultural area described in this 
section is ``Martha's Vineyard.''
    (b) Approved maps. The approved map for determining the boundary of 
the Martha's Vineyard viticultural area is the U.S.G.S. map, 
``Providence, R.I.; Mass.; Conn.; N.Y.;'' scaled 1:250,000, edition of 
1947 revised 1969.
    (c) Boundaries. The Martha's Vineyard viticultural area is located 
entirely within Dukes County, Massachusetts. The boundary of the 
Martha's Vineyard viticultural area is the shoreline of the islands 
named ``Martha's Vineyard'' and ``Chappaquiddic Island'' on the 
``Providence'' U.S.G.S. map, and the viticultural area comprises the 
entire area of the islands.

[T.D. ATF-193, 50 FR 256, Jan 3, 1985]



Sec. 9.74  Columbia Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Columbia Valley.''
    (b) Approved maps. The approved maps for determining the boundary of 
the Columbia Valley viticultural area are nine 1:250,000 scale U.S.G.S. 
maps. They are entitled:
    (1) ``Concrete, Washington, U.S.; British Columbia, Canada,'' 
edition of 1955, limited revision 1962;
    (2) ``Okanogan, Washington,'' edition of 1954, limited revision 
1963;
    (3) ``Pendleton, Oregon, Washington,'' edition of 1953, revised 
1973;
    (4) ``Pullman, Washington, Idaho,'' edition of 1955, revised 1974;
    (5) ``Ritzville, Washington,'' edition of 1953, limited revision 
1965;
    (6) ``The Dalles, Oregon, Washington,'' edition of 1953, revised 
1971;

[[Page 143]]

    (7) ``Walla Walla, Washington, Oregon,'' edition of 1953, limited 
revision 1963;
    (8) ``Wenatchee, Washington,'' edition of 1957, revised 1971; and
    (9) ``Yakima, Washington,'' edition of 1958, revised 1971.
    (c) Boundaries. The Columbia Valley viticultural area is located in 
Adams, Benton, Chelan, Columbia, Douglas, Ferry, Franklin, Garfield, 
Grant, Kittitas, Klickitat, Lincoln, Okanogan, Stevens, Walla Walla, 
Whitman, and Yakima Counties, Washington, and in Gilliman, Morrow, 
Sherman, Umatilla, and Wasco Counties, Oregon. The beginning point is 
found on ``The Dalles'' U.S.G.S. map at the confluence of the Klickitat 
and Columbia Rivers:
    (1) Then north and east following the Klickitat and Little Klickitat 
Rivers to U.S. Highway 97 northeast of Goldendale;
    (2) Then north following U.S. Highway 97 to the 1,000[foot] contour 
line southwest of Hembre Mountain;
    (3) Then west following the Toppenish Ridge, across unnamed 
mountains of 2,172[foot] and 2,363[foot] elevation, to the peak of 
Toppenish Mountain, elevation 3,609[foot];
    (4) Then northwest in a straight line for approximately 11.3 miles 
to the intersection of Agency Creek with the township line between R. 15 
E. and R. 16 E.;
    (5) Then north following the township line between R. 15 E. and R. 
16 E. to the Tieton River;
    (6) Then northeast following the Tieton River to the confluence with 
the Naches River;
    (7) Then east in a straight line for approximately 15.3 miles to the 
intersection of the 46 deg.45[min] latitude line with the Yakima River;
    (8) Then north following the Yakima River to the confluence with the 
North Branch Canal approximately one mile northwest of Throp;
    (9) Then north, east, and southeast following the North Branch Canal 
to its intersection with U.S. Interstate 90 in Johnson Canyon;
    (10) Then east following U.S. Interstate 90 to the Columbia River;
    (11) Then north following the Columbia River to the township line 
between T. 21 N. and T. 22 N. immediately north of the Rock Island Dam;
    (12) Then west following the township line between T. 21 N. and T. 
22 N. for approximately 7.1 miles (from the west shore of the Columbia 
River) to the 2,000[foot] contour line immediately west of Squilchuck 
Creek;
    (13) Then north and west following the 2,000[foot] contour line to 
the township line between R. 18 E. and R. 19 E. west of the landing area 
at Cashmere-Dryden;
    (14) Then north following the township line between R. 18 E. and R. 
19 E. for approximately 4.4 miles to the 2,000[foot] contour line in 
Ollala Canyon;
    (15) Then east, north, and northwest following the 2,000[foot] 
contour line to the township line between R. 19 E. and R. 20 E. 
immediately west of Ardenoir;
    (16) Then north following the township line between R. 19 E. and R. 
20 E for approximately 2.8 miles to the 2,000[foot] contour line 
immediately north of the secondary road;
    (17) Then southwest and north following the 2,000[foot] contour line 
to the township line between T. 28 N. and T. 29 N.;
    (18) Then east following the township line between T. 28 N. and T. 
29 N. for approximately 2.1 miles to the 2,000[foot] contour line 
immediately east of Lake Chelan;
    (19) Then southeast and north following the 2,000[foot] contour line 
(beginning in the ``Wenatchee'' U.S.G.S. map, passing through the 
``Ritzville'' and ``Okanogan'' maps, and ending in the ``Concrete'' map) 
to the point where the 2,000[foot] contour line intersects the township 
line between T. 30 N. and T. 31 N. immediately west of Methow;
    (20) Then east following the township line between T. 30 N. and T. 
31 N. for approximately 20.2 miles to the 2,000[foot] contour line east 
of Monse;
    (21) Then south and east following the 2,000[foot] contour line to 
the township line between T. 30 N. and T. 31 N. west of Alkali Lake;
    (22) Then northeast in a straight line for approximately 10.7 miles 
to the point of intersection of the 2,000[foot] contour line with Coyote 
Creek;
    (23) Then east, north, south, east, and north following the 
2,000[foot] contour line to the township line between T. 29 N.

[[Page 144]]

and T. 30 N. immediately west of the Sanpoil River;
    (24) Then east following the township line between T. 29 N. and T. 
30 N. for approximately 2.3 miles to the 2,000[foot] contour line 
immediately east of the Sanpoil River;
    (25) Then south, east, and north following the 2,000[foot] contour 
line to the township line between T. 29 N. and T 30 N. at Ninemile Flat;
    (26) Then east following the township line between T. 29 N. and T. 
30 N. for approximately 10.7 miles to the township line between R. 36 E. 
and R. 37 E.;
    (27) Then south following the township line between R. 36 N. and R. 
37 E. to the township line between T. 26 N. and T. 27 N.;
    (28) Then west following the township line between T. 26 N. and T. 
27 N. to Banks Lake;
    (29) Then south following Banks Lake to Dry Falls Dam;
    (30) Then west and south following U.S. Highway 2 and Washington 
Highway 17 to the intersection with Washington Highway 28 in Soap Lake;
    (31) Then southeast in a straight line for approximately 4.7 miles 
to the source of Rocky Ford Creek near a fish hatchery;
    (32) Then south following Rocky Ford Creek and Moses Lake to U.S. 
Interstate 90 southwest of the town of Moses Lake;
    (33) Then east following U.S. Interstate 90 to the Burlington 
Northern (Northern Pacific) Railroad right-of-way at Raugust Station;
    (34) Then south following the Burlington Northern (Northern Pacific) 
Railroad right-of-way to Washington Highway 260 in Connell;
    (35) Then east following Washington Highway 260 through Kahlotus to 
the intersection with Washington Highway 26 in Washtucna;
    (36) Then east following Washington Highways 26 and 127 through La 
Crosse and Dusty to the intersection with U.S. Highway 195 at Colfax;
    (37) Then south following U.S. Highway 195 to the Washington-Idaho 
State boundary;
    (38) Then south following the Washington-Idaho State boundary to the 
Snake River and continuing along the Snake River to the confluence with 
Asotin Creek;
    (39) Then west following Asotin Creek and Charley Creek to the 
township line between R. 42 E. and R. 43 E.;
    (40) Then north following the township line between R. 42 E. and R. 
43 E. to Washington Highway 128 in Peola;
    (41) Then north following Washington Highway 128 to the intersection 
with U.S. Highway 12 in Pomeroy;
    (42) Then west following U.S. Highway 12 for approximately 5 miles 
to the intersection with Washington Highway 126 [in Zumwalt];
    (43) Then southwest following Washington Highway 126 and U.S. 
Highway 12 through Marengo, Dayton, and Waitsburg to a point where an 
unnamed light-duty road leaves Highway 12 in an easterly direction in 
Minnick Station, Washington;
    (44) Then east following the unnamed light-duty road for 
approximately 250 feet until it reaches the 2000[foot] contour line;
    (45) Then south and southwest following the 2000[foot] contour line 
to the place where it crosses Oregon Highway 74 in Windmill, Oregon;
    (46) Then west following Oregon Highway 74 to Highway 207 in 
Heppner;
    (47) Then southwest following Oregon Highway 207 to Highway 206 in 
Ruggs;
    (48) Then northwest following Oregon Highway 206 to the intersection 
with the township line between T. 1 S. and T. 2 S.;
    (49) Then west following the township line between T. 1 S. and T. 2 
S. to the Deschutes River;
    (50) Then north following the Deschutes River to the Willamette Base 
Line;
    (51) Then west following the Willamette Base Line to the township 
line between R. 12 E. and R. 13 E.;
    (52) Then north following the township line between R. 12 E. and R. 
13. to the Columbia River;
    (53) Then west following the Columbia River to the confluence with 
the Klickitat River and the point of beginning.

[T.D. ATF-190, 49 FR 44897, Nov. 13, 1984, as amended by T.D. ATF-249, 
52 FR 5959, Feb. 27, 1987; 52 FR 10224, Mar. 31, 1987; T.D. ATF-344, 58 
FR 40354, July 28, 1993; T.D. ATF-441, 66 FR 11542, Feb. 26, 2001]

[[Page 145]]



Sec. 9.75  Central Coast.

    (a) Name. The name of the viticultural area described in this 
section is ``Central Coast.''
    (b) Approved maps. The approved maps for determining the boundary of 
the Central Coast viticultural area are the following 18 U.S.G.S. 
topographic maps:
    (1) Monterey, California (formerly, the Santa Cruz map), scale 
1:250,000, NJ 10-12, dated 1974;
    (2) Watsonville East, Calif. Quadrangle, Scale 1:24,000, dated 1955, 
photorevised 1968;
    (3) Mt. Madonna, Calif. Quadrangle, Scale 1:24,000, dated 1955, 
photorevised 1980;
    (4) Loma Prieta, Calif. Quadrangle, Scale 1:24,000, dated 1955, 
photorevised 1968;
    (5) Morgan Hill, Calif. Quadrangle, Scale 1:24,000, dated 1955, 
photorevised 1980;
    (6) Santa Teresa Hills, Calif. Quadrangle, Scale 1:24,000, dated 
1953, photorevised 1968;
    (7) Los Gatos, Calif. Quadrangle, Scale 1:24,000, dated 1953, 
photorevised 1980;
    (8) Castle Rock Ridge, Calif. Quadrangle, Scale 1:24,000, dated 
1955, photorevised 1968, photoinspected 1973;
    (9) San Jose, California, scale 1:250,000, NJ 10-9, dated 1962, 
revised 1969;
    (10) Dublin, Calif. Quadrangle, scale 1:24,000, dated 1961, 
photorevised 1980;
    (11) Livermore, Calif. Quadrangle, scale 1:24,000, dated 1961, 
photorevised 1968 and 1973;
    (12) Tassajara, Calif. Quadrangle, scale 1:24,000, dated 1953, 
photoinspected 1974;
    (13) Byron Hot Springs, Calif. Quadrangle, scale 1:24,000, dated 
1953, photorevised 1968;
    (14) Altamont, Calif. Quadrangle, scale 1:24,000, dated 1953, 
photorevised 1968;
    (15) Mendenhall Springs, Calif. Quadrangle, scale 1:24,000, dated 
1956, photorevised 1971;
    (16) San Luis Obispo, California, scale 1:250,000, NI 10-3, dated 
1956, revised 1969 and 1979;
    (17) Santa Maria, California, scale 1:250,000, NI 10-6, 9, dated 
1956, revised 1969;
    (18) Los Angeles, California, scale 1:250,000, NI 11-4, dated 1974;
    (19) Diablo, California, scale 1:24,000, dated 1953, Photorevised 
1980;
    (20) Clayton, California, scale 1:24,000, dated 1953, Photorevised 
1980;
    (21) Honker Bay, California, scale 1:24,000, dated 1953, 
Photorevised 1980;
    (22) Vine Hill, California, scale 1:24,000, dated 1959, Photorevised 
1980;
    (23) Benicia, California, scale 1:24,000, dated 1959, Photorevised 
1980;
    (24) Mare Island, California, scale 1:24,000, dated 1959, 
Photorevised 1980;
    (25) Richmond, California, scale 1:24,000, dated 1959, Photorevised 
1980;
    (26) San Quentin, California, scale 1:24,000, dated 1959, 
Photorevised 1980;
    (27) Oakland West, California, scale 1:24,000, dated 1959, 
Photorevised 1980;
    (28) San Francisco North, California, scale 1:24,000, dated 1956, 
Photorevised 1968 and 1973;
    (29) San Francisco South, California, scale 1:24,000, dated 1956, 
Photorevised 1980;
    (30) Montara Mountain, California, scale 1:24,000, dated 1956, 
Photorevised 1980;
    (31) Half Moon Bay, California, scale 1:24,000, dated 1961, 
Photoinspected 1978, Photorevised 1968 and 1973;
    (32) San Gregorio, California, scale 1:24,000, dated 1961, 
Photoinspected 1978, Photorevised 1968;
    (33) Pigeon Point, California, scale 1:24,000, dated 1955, 
Photorevised 1968;
    (34) Franklin Point, California, scale 1:24,000, dated 1955, 
Photorevised 1968;
    (35) Ano Nuevo, California, scale 1:24,000, dated 1955, Photorevised 
1968;
    (36) Davenport, California, scale 1:24,000, dated 1955, Photorevised 
1968;
    (37) Santa Cruz, California, scale 1:24,000, dated 1954, 
Photorevised 1981;
    (38) Felton, California, scale 1:24,000, dated 1955, Photorevised 
1980;
    (39) Laurel, California, scale 1:24,000, dated 1955, Photoinspected 
1978, Photorevised 1968;
    (40) Soquel, California, scale 1:24,000, dated 1954, Photorevised 
1980; and
    (41) Watsonville West, California, scale 1:24,000, dated 1954, 
Photorevised 1980.
    (c) Boundary. The Central Coast viticultural area is located in the 
following California counties: Monterey, Santa Cruz, Santa Clara, 
Alameda, San

[[Page 146]]

Benito, San Luis Obispo, Santa Barbara, San Francisco, San Mateo, and 
Contra Costa. The Santa Cruz Mountains viticultural area is excluded. 
(The boundaries of the Santa Cruz Mountains viticultural area are 
described in 27 CFR Sec. 9.31.)
    (1) The beginning point is the point at which the Pajaro River flows 
into Monterey Bay. (Monterey map)
    (2) The boundary follows north along the shoreline of the Pacific 
Ocean (across the Watsonville West, Soquel, Santa Cruz, Davenport, Ano 
Nuevo, Franklin Point, Pigeon Point, San Gregorio, Half Moon Bay, 
Montara Mountain and San Francisco South maps) to the San Francisco/
Oakland Bay Bridge. (San Francisco North Quadrangle)
    (3) From this point, the boundary proceeds east on the San 
Francisco/Oakland Bay Bridge to the Alameda County shoreline. (Oakland 
West Quadrangle)
    (4) From this point, the boundary proceeds east along the shoreline 
of Alameda County and Contra Costa County across the Richmond, San 
Quentin, Mare Island, and Benicia maps to a point marked BM 15 on the 
shoreline of Contra Costa County. (Vine Hill Quadrangle)
    (5) From this point, the boundary proceeds in a southeasterly 
direction in a straight line across the Honker Bay map to Mulligan Hill 
elevation 1,438. (Clayton Quadrangle)
    (6) The boundary proceeds in southeasterly direction in a straight 
line to Mt. Diablo elevation 3,849. (Clayton Quadrangle)
    (7) The boundary proceeds in a southeasterly direction in a straight 
line across the Diablo and Tassajara maps to Brushy Peak elevation 
1,702. (Byron Hot Springs Quadrangle)
    (8) The boundary proceeds due south, approximately 400 feet, to the 
northern boundaries of Section 13, Township 2 South, Range 2 East. 
(Byron Hot Springs Quadrangle)
    (9) The boundary proceeds due east along the northern boundaries of 
Section 13 and Section 18, Township 2 South, Range 3 East, to the 
northeast corner of Section 18. (Byron Hot Springs Quadrangle)
    (10) Then proceed south along the eastern boundaries of Sections 18, 
19, 30, and 31 in Township 2 South, Range 3 East to the southeast corner 
of Section 31. (Byron Hot Springs Quadrangle)
    (11) Then proceed east along the southern border of Section 32, 
Township 2 South, Range 3 East to the northwest corner of Section 4. 
(Altamont Quadrangle)
    (12) Then proceed south along the western border of Sections 4 and 
9. (Altamont Quadrangle)
    (13) Then proceed south along the western border of Section 16 
approximately 4275 feet to the point where the 1100 meter elevation 
contour intersects the western border of Section 16. (Altamont 
Quadrangle)
    (14) Then proceed in a southeasterly direction along the 1100 meter 
elevation contour to the intersection of the southern border of Section 
21 with the 1100 meter elevation contour. (Altamont Quadrangle)
    (15) Then proceed west to the southwest corner of Section 20. 
(Altamont Quadrangle)
    (16) Then proceed south along the western boundaries of Sections 29 
and 32, Township 3 South, Range 3 East and then south along the western 
boundaries of Sections 5, 8, 17, 20, Township 4 South, Range 3 East to 
the southwest corner of Section 20. (Mendenhall Springs Quadrangle)
    (17) The boundary follows the east-west section line west along the 
southern boundary of Section 19 in Township 4 South, Range 3 east, and 
west along the southern boundary of Section 24 in Township 4 South, 
Range 2 east, to the southwest corner of that Section 24. (Mendenhall 
Springs Quadrangle)
    (18) The boundary follows the north-south section line north along 
the western boundary of Section 24 in Township 4 South, Range 2 east, to 
the northwest corner of that Section 24. (Mendenhall Springs Quadrangle)
    (19) The boundary follows the east-west section line west along the 
southern boundary of Section 14 in Township 4 South, Range 2 east, to 
the southwest corner of that Section 14. (Mendenhall Springs Quadrangel)
    (20) The boundary follows the north-south section line north along 
the

[[Page 147]]

western boundary of Section 14 in Township 4 South, Range 2 east, to the 
Hetch Hetchy Aqueduct. (Mendenhall Springs Quadrangle)
    (21) The boundary follows the Hetch Hetchy Aqueduct southwesterly to 
the range line dividing Range 1 East from Range 2 East. (San Jose map)
    (22) The boundary follows this range line south to its intersection 
with State Route 130. (San Jose map)
    (23) The boundary follows State Route 130 southeasterly to its 
intersection with the township line dividing Township 6 South from 
Township 7 South. (San Jose map)
    (24) From this point, the boundary proceeds in a straight line 
southeasterly to the intersection of the township line dividing Township 
7 South from Township 8 South with the range line dividing Range 2 East 
from Range 3 East. (San Jose map)
    (25) From this point, the boundary proceeds in a straight line 
southeasterly to the intersection of the township line dividing Township 
8 South from Township 9 South with the range line dividing Range 3 East 
from Range 4 East. (San Jose map)
    (26) From this point, the boundary proceeds in a straight line 
southeasterly to the intersection of Coyote Creek with the township line 
dividing Township 9 South from Township 10 South. (San Jose map)
    (27) From this point, the boundary proceeds in a straight line 
southeasterly to the intersection of the 37 deg.00[min] North 
latitude parallel with State Route 152. (San Jose map)
    (28) The boundary follows the 37 deg.00[min] North 
latitude parallel east to the range line dividing Range 5 East from 
Range 6 East. (Monterey map)
    (29) The boundary follows this range line south to the San Benito-
Santa Clara County line. (Monterey map)
    (30) The boundary follows the San Benito-Santa Clara County line 
easterly to the San Benito-Merced County line. (Monterey map)
    (31) The boundary follows the San Benito-Merced County line 
southeasterly to the conjunction of the county lines of San Benito, 
Merced, and Fresno Counties. (Monterey map)
    (32) From this point, the boundary proceeds in a southwesterly 
extension of the Merced-Fresno County line to Salt Creek. (Monterey map)
    (33) From this point, the boundary proceeds in a straight line 
southeasterly to the conjunction of the county lines of Monterey, San 
Benito, and Fresno Counties. (Monterey map)
    (34) The boundary follows the Monterey-Fresno County line 
southeasterly to the Monterey-Kings County line. (Monterey and San Luis 
Obispo maps)
    (35) The boundary follows the Monterey-Kings County line 
southeasterly to the San Luis Obispo-Kings County line. (San Luis Obispo 
map)
    (36) The boundary follows the San Luis Obispo-Kings County line east 
to the San Luis Obispo-Kern County line. (San Luis Obispo map)
    (37) The boundary follows the San Luis Obispo-Kern County line 
south, then east, then south to the point at which the county line 
diverges easterly from the range line dividing Range 17 East from Range 
18 East. (San Luis Obispo map)
    (38) The boundary follows this range line south to the township line 
dividing Township 28 South from Township 29 South. (San Luis Obispo map)
    (39) The boundary follows the township line west to the range line 
dividing Range 13 East from Range 14 East. (San Luis Obispo map)
    (40) The boundary follows this range line south to the boundary of 
the Los Padres National Forest. (San Luis Obispo map)
    (41) The boundary follows the boundary of the Los Padres National 
Forest southeasterly to the creek of Toro Canyon. (San Luis Obispo, 
Santa Maria, and Los Angeles maps)
    (42) The boundary follows the creek of Toro Canyon southerly to the 
Pacific Ocean. (Los Angeles map)
    (43) The boundary follows the shoreline of the Pacific Ocean and 
Monterey Bay northerly to the beginning point. (Los Angeles, Santa 
Maria, San Luis Obispo, and Monterey maps)

[T.D. ATF-216, 50 FR 43130, Oct. 24, 1985, as amended by T.D. ATF-407, 
64 FR 3023, Jan. 20, 1999]



Sec. 9.76  Knights Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Knights Valley.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Knights Valley viticultural area are four U.S.G.S. 
maps. They are--

[[Page 148]]

    (1) ``Mount St. Helena Quadrangle, California,'' 7.5 minute series, 
1959 (Photoinspected 1973);
    (2) ``Jimtown Quadrangle, California,'' 7.5 minute series, 1955 
(Photorevised 1975);
    (3) ``Mark West Springs Quadrangle, California,'' 7.5 minute series, 
1958; and
    (4) ``Detert Reservoir Quadrangle, California,'' 7.5 minute series, 
1958 (Photorevised 1980).
    (c) Boundary. The Knights Valley viticultural area is located in 
northeastern Sonoma County, California. From the beginning point lying 
at the intersection of the Sonoma/Lake County line and the north line of 
Section 11, Township 10 North (T. 10 N.), Range 8 West (R. 8 W.) on the 
``Mount St. Helena Quadrangle'' map, the boundary runs--
    (1) Westerly along the north line of Sections 11, 10, and 9, T. 10 
N., R. 8 W. to the northwest corner of Section 9 on the ``Jimtown 
Quadrangle'' map;
    (2) Then southerly along the west line of Sections 9, 16, 21, 28, 
and 33, T. 10 N., R. 8 W., continuing along the west line of Section 4, 
T. 9 N., R. 8 W. to the southwest corner thereof;
    (3) Then easterly along the south line of Section 4 to the southeast 
corner thereof on the ``Mount St. Helena Quadrangle'' map;
    (4) Then southerly along the west line of Sections 10, 15, and 22, 
T. 9 N., R. 8 W. to the point of intersection with Franz Creek in 
Section 22 on the ``Mark West Springs Quadrangle'' map;
    (5) Then easterly along Franz Creek approximately 14,000 feet to the 
centerline of Franz Valley Road;
    (6) Then southerly along the centerline of Franz Valley Road to the 
point of intersection with the west line of Section 6, T. 8 N., R. 7 W.;
    (7) Then southerly along the west line of Section 6 to the southwest 
corner thereof;
    (8) Then easterly along the south line of Sections 6, 5, and 4, T. 8 
N., R. 7 W. to the southeast corner of Section 4;
    (9) Then northerly along the east line of Section 4 to the point of 
intersection with the Sonoma/Napa County line;
    (10) Then northerly along the meanders of the Sonoma/Napa County 
line on the ``Mark West Springs Quadrangle,'' ``Detert Reservoir 
Quadrangle,'' and ``Mount St. Helena Quadrangle'' maps to the point of 
intersection with the Lake County line on the ``Mount St. Helena 
Quadrangle'' map;
    (11) Then northerly along the meanders of the Sonoma/Lake County 
line on the ``Mount St. Helena Quadrangle'' and ``Detert Reservoir 
Quadrangle'' maps to the point of beginning.

[T.D. ATF-158, 48 FR 48816, Oct. 21, 1983]



Sec. 9.77  Altus.

    (a) Name. The name of the viticultural area described in this 
section is ``Altus.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Altus viticultural area are five U.S.G.S. maps in the 
7.5 minute series. They are titled:
    (1) Ozark Quadrangle, 1966.
    (2) Coal Hill Quadrangle, 1961.
    (3) Hartman Quadrangle, 1961.
    (4) Hunt Quadrangle, 1963.
    (5) Watalula Quadrangle, 1973.
    (c) Boundary--(1) General. The Altus viticultural area is located in 
Arkansas. The starting point of the following boundary description is 
the crossing of the Missouri Pacific Railroad over Gar Creek, near the 
Arkansas River at the southeast corner of the city of Ozark, Arkansas 
(on the Ozark Quadrangle map).
    (2) Boundary Description:
    (i) From the crossing of the Missouri Pacific Railroad over Gar 
Creek, following the railroad tracks eastward to the crossing over 
Horsehead Creek (on the Hartman Quadrangle map).
    (ii) From there northward along Horsehead Creek to the merger with 
Dirty Creek (on the Coal Hill Quadrangle map).
    (iii) From there generally northwestward along Dirty Creek to 
Arkansas Highway 352 (where Dirty Creek passes under the highway as a 
perennial stream--on the Hunt Quadrangle map).
    (iv) From there along Highway 352 westward to Arkansas Highway 219 
(on the Watalula Quadrangle map).
    (v) Then southward along Highway 219 to Gar Creek (on the Ozark 
Quadrangle map).

[[Page 149]]

    (vi) Then southeastward along Gar Creek to the beginning point.

[T.D. ATF-176, 49 FR 22471, May 30, 1984]



Sec. 9.78  Ohio River Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Ohio River Valley.''
    (b) Approved maps. The approved maps for determining the boundary of 
the Ohio River Valley viticultural area are 12 U.S.G.S. topographic maps 
in the scale 1:250,000, as follows:
    (1) Paducah NJ 16-7 (dated 1949, revised 1969);
    (2) Belleville NJ 16-4 (dated 1958, revised 1977);
    (3) Vincennes NJ 16-5 (dated 1956, revised 1969);
    (4) Louisville NJ 16-6 (dated 1956, revised 1969);
    (5) Cincinnati NJ 16-3 (dated 1953, revised 1974);
    (6) Columbus NJ 17-1 (dated 1967);
    (7) Clarksburg NJ 17-2 (dated 1956, limited revision 1965);
    (8) Canton NJ 17-11 (dated 1957, revised 1969);
    (9) Charleston NJ 17-5 (dated 1957, limited revision 1965);
    (10) Huntington NJ 17-4 (dated 1957, revised 1977);
    (11) Winchester NJ 16-9 (dated 1957, revised 1979); and
    (12) Evansville NJ 16-8 (dated 1957, revised 1974);
    (c) Boundary. The Ohio River Valley viticultural area is located in 
Indiana, Ohio, West Virginia and Kentucky. The boundary description in 
paragraphs (c)(1)-(c)(21) of this section includes, for each point, the 
name of the map sheet (in parentheses) on which the point can be found.
    (1) The beginning point is the point at which the Kentucky, 
Illinois, and Indiana State lines converge at the confluence of the 
Wabash River and the Ohio River (Paducah map).
    (2) The boundary follows the Illinois-Indiana State line northerly 
(across the Belleville map) to Interstate Route 64 (Vincennes map).
    (3) From the intersection of Interstate Route 64 and the Wabash 
River, the boundary proceeds in a straight line northeasterly to the 
town of Oatsville in Pike County, Indiana (Vincennes map).
    (4) The boundary proceeds in a straight line southeasterly to the 
point in Spencer County, Indiana, at which State Route 162 diverges 
northerly from U.S. Route 460, which is knownlocally as State Route 62 
(Vincennes map).
    (5) The boundary proceeds in a straight line northeasterly to the 
point in Harrison County, Indiana, at which State Route 66 diverges 
northerly from State Route 64 (Vincennes map).
    (6) The boundary proceeds in a straight line northeasterly (across 
the Louisville map) to the town of New Marion in Ripley County, Indiana 
(Cincinnati map).
    (7) The boundary proceeds in a straight line northerly to the town 
of Clarksburg in Decatur County, Indiana (Cincinnati map).
    (8) The boundary proceeds in a straight line easterly to the town of 
Ridgeville in Warren County, Ohio (Cincinnati map).
    (9) The boundary proceeds in a straight line southeasterly to the 
town of Chapman in Jackson County, Ohio (Columbus map).
    (10) The boundary proceeds in a straight line northeasterly to the 
town identified on the map as Hesboro, also known as Ilesboro, in 
Hocking County, Ohio (Columbus map).
    (11) The boundary proceeds in a straight line northeasterly to the 
town of Tacoma in Belmont County, Ohio (Clarksburg map).
    (12) The boundary proceeds in a straight line easterly to the town 
of Valley Grove in Ohio County, West Virginia (Canton map).
    (13) The boundary proceeds in a straight line southerly to the town 
of Jarvisville in Harrison County, West Virginia (Clarksburg map).
    (14) The boundary proceeds in a straight line southwesterly to the 
town of Gandeeville in Roane County West Virginia (Charleston map).
    (15) The boundary proceeds in a straight line southwesterly to the 
town of Atenville in Lincoln County West Virginia (Huntington map).
    (16) The boundary proceeds in a straight line westerly to the town 
of Isonville in Elliott County, Kentucky (Huntington map).

[[Page 150]]

    (17) The boundary proceeds in a straight line northwesterly to the 
town of Berlin in Bracken County, Kentucky (Louisville map).
    (18) The boundary proceeds in a straight line westerly to the town 
of Dry Ridge in Grant County, Kentucky (Louisville map).
    (19) The boundary proceeds in a straight line southwesterly to the 
town of Crest in Hardin County, Kentucky (Winchester map).
    (20) The boundary proceeds in a straight line westerly to the 
intersection of State Route 56 and U.S. Route 41 in the city of Sebree 
in Webster County, Kentucky (Evansville map).
    (21) The boundary proceeds in a straight line northwesterly to the 
beginning point (Paducah map).

[T.D. ATF-144, 48 FR 40379, Sept. 7, 1983, as amended by T.D. ATF-249, 
52 FR 5959, Feb. 27, 1987]



Sec. 9.79  Lake Michigan Shore.

    (a) Name. The name of the viticultural area described in this 
section is ``Lake Michigan Shore.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Lake Michigan Shore viticultural area are four 
U.S.G.S. maps, 1:250,000 series. They are entitled: (1) Chicago (1953, 
revised 1970); (2) Fort Wayne (1953, revised 1969); (3) Racine (1958, 
revised 1969); and (4) Grand Rapids (1958, revised 1980).
    (c) Boundaries. The Lake Michigan Shore viticultural area is located 
in the southwestern corner of the State of Michigan. The boundaries of 
the Lake Michigan Shore viticultural area, using landmarks and points of 
reference found on the appropriate U.S.G.S maps, are as follows:
    (1) Starting at the most northern point, the intersection the 
Kalamazoo River with Lake Michigan.
    (2) Then southeast along the winding course of the Kalamazoo River 
for approximately 35 miles until it intersects the Penn Central railroad 
line just south of the City of Otsego.
    (3) Then south along the Penn Central railroad line, through the 
City of Kalamazoo, approximately 25 miles until it intersects the Grand 
Trunk Western railroad line at the community of Schoolcraft.
    (4) Then southwest along the Grand Trunk Western railroad line 
approximately 35 miles to the Michigan/ Indiana State line.
    (5) Then west along the Michigan-Indiana State line approximately 38 
miles until it meets Lake Michigan.
    (6) Then north along the eastern shore of Lake Michigan 
approximately 72 miles to the beginning point.

[T.D. ATF-153, 48 FR 46526, Oct. 13, 1983, as amended by T.D. ATF-249, 
52 FR 5959, Feb. 27, 1987]



Sec. 9.80  York Mountain.

    (a) Name. The name of the viticultural area described in this 
section is ``York Mountain.''
    (b) Approved map. The approved map for the York Mountain 
viticultural area is the U.S.G.S. map entitled ``York Mountain 
Quadrangle,'' 7.5 minute series (topographic), 1949 (photorevised 1979).
    (c) Boundaries. The York Mountain viticultural area is located in 
San Luis Obispo County, California. The boundaries are as follows:
    (1) From the beginning point at the northwest corner of the York 
Mountain Quadrangle map where the Dover Canyon Jeep Trail and Dover 
Canyon Road intersect, proceed east along Dover Canyon Road 1.5 miles to 
the western boundary line of Rancho Paso de Robles;
    (2) Follow the western boundary line of Rancho Paso de Robles 
southwest 6.0 miles to where the boundary joins Santa Rita Creek;
    (3) Turn right at Santa Rita Creek and follow the creek 5 miles to 
where the waters of Dover Canyon and Santa Rita Creek meet; and
    (4) Then proceed north along Dover Canyon Creek to its intersection 
with Dover Canyon Road, then following Dover Canyon Road (which becomes 
Dover Canyon Jeep Trail) back to the point of beginning.

[T.D. ATF-143, 48 FR 38463, Aug. 24, 1983, as amended by T.D. ATF-249, 
52 FR 5959, Feb. 27, 1987]



Sec. 9.81  Fiddletown.

    (a) Name. The name of the viticultural area described in this 
section is ``Fiddletown.''

[[Page 151]]

    (b) Approved maps. The approved maps for the Fiddletown viticultural 
area are four U.S.G.S. maps entitled:
    (1) Fiddletown, CA, 1949, 7.5 minute series;
    (2) Amador City, CA, 1962, 7.5 minute series;
    (3) Pine Grove, CA, 1948 (photoinspected 1973), 7.5 minute series;
    (4) Aukum, CA, 1952 (photorevised 1973), 7.5 minute series.
    (c) Boundaries. The Fiddletown viticultural area is located in 
Amador County, California. The boundaries are as follows:
    (1) From the beginning point at the north boundary where Fiddletown 
Shenandoah Road crosses Big Indian Creek in Section 28, Township 8 N, 
Range 11 E, proceed in a southwesterly direction following Big Indian 
Creek through the southeast corner of Section 29, crossing the northwest 
corner of Section 32 to where it meets Section 31;
    (2) Then in a southerly direction follow the Section line between 
Sections 31 and 32, Township 8 N, Range 11 E, and Sections 5 and 6, 7 
and 8, Township 7 N, Range 11 E, to where the Section line meets the 
South Fork of Dry Creek;
    (3) Then following the South Fork of Dry Creek in an easterly 
direction crossing the lower portions of Sections 8, 9, 10, 11, 12 and 
into Township 8 N, Range 12 E, at Section 7 and across Section 7 to 
where it meets Section 8;
    (4) Then north following the Section line between Sections 7 and 8, 
5 and 6 into Township 8 N, Range 12 E, between Sections 31 and 32, to 
Big Indian Creek; and
    (5) Then following Big Indian Creek in a northwesterly direction 
through Sections 31, 30, 25, 26 and 27, returning to the point of 
beginning.

[T.D. ATF-147, 48 FR 45239, Oct. 4, 1983, as amended by T.D. ATF-249, 52 
FR 5959, Feb. 27, 1987]



Sec. 9.82  Potter Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Potter Valley.''
    (b) Approved map. The approved maps for the Potter Valley 
viticultural area are the U.S.G.S. maps entitled ``Potter Valley 
Quadrangle, California,'' 1960, and ``Ukiah Quadrangle, California,'' 
1958, 15 minute series (topographic).
    (c) Boundaries. The Potter Valley viticultural area is located in 
Mendocino County, California. The boundaries are as follows:
    (1) From the beginning point at the southeast corner of quadrant 36 
and southwest corner of quadrant 32 (a point where Mendocino and Lake 
Counties border on the T. 17 N.-T. 16 N. township line), the boundary 
runs northwest to the northeastern corner of quadrant 4, on the T. 18 
N.-T. 17 N. township line;
    (2) Then west to the northwest corner of quadrant 1;
    (3) Then south to the southwest corner of quadrant 36;
    (4) Then east to R. 12 W.-R. 11 W. range line at the southeast 
corner of quadrant 36;
    (5) Then south to Highway 20;
    (6) Then southeast on Highway 20 to where Highway 20 passes from 
quadrant 20 to quadrant 21; and
    (7) Thence northeast, returning to the point of beginning.

[T.D. ATF-151, 48 FR 46521, Oct. 13, 1983]



Sec. 9.83  Lake Erie.

    (a) Name. The name of the viticultural area described in this 
section is ``Lake Erie.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Lake Erie viticultural area are four U.S.G.S. maps. 
They are titled:
    (1) ``Toledo,'' scale 1:250,000 (1956, revised 1978);
    (2) ``Cleveland,'' scale 1:250,000 (1956, revised 1972);
    (3) ``Erie,'' scale 1:250,000 (1959, revised 1972); and
    (4) ``Buffalo,'' scale 1:250,000 (1962).
    (c) Boundaries. The Lake Erie viticultural area is located along the 
shore and on the islands of Lake Erie across the States of New York, 
Pennsylvania, and Ohio. The beginning point is where Buffalo Creek 
empties into Lake Erie at Buffalo Harbor.
    (1) From the beginning point the boundary proceeds up Buffalo Creek 
to the confluence of Cazenovia Creek.
    (2) The boundary proceeds up Cazenovia Creek and thence up the west 
branch of Cazenovia Creek to a point approximately one mile north of

[[Page 152]]

Colden, New York, exactly 12 statute miles inland from any point on the 
shore of Lake Erie.
    (3) The boundary proceeds southwestward and along a line exactly 12 
statute miles inland from any point on the shore of Lake Erie to a point 
approximately one mile north of Dayton, New York, where it intersects 
the 1,300-foot contour line.
    (4) The boundary proceeds generally southwestward along the 1,300-
foot contour line to a point almost two miles north-northwest of Godard, 
Pennsylvania, exactly six statute miles inland from any point on the 
shore of Lake Erie.
    (5) The boundary proceeds southwestward along a line exactly six 
statute miles inland from any point on the shore of Lake Erie to the 
point where it intersects Ohio Route 45 near the intersection with 
Interstate 90.
    (6) The boundary proceeds southward along Ohio Route 45 to a point 
exactly 14 statute miles inland from any point on the shore of Lake Erie 
approximately one mile north of Rock Creek, Ohio.
    (7) The boundary proceeds southwestward, then westward, then 
northwestward along a line 14 statute miles inland from any point on the 
shore of Lake Erie to the point where it intersects the Ohio-Michigan 
boundary just north of Centennial, Ohio.
    (8) The boundary then follows the Ohio-Michigan border in an 
easterly direction to the shoreline of Lake Erie. Thence in a generally 
southeasterly direction along the shoreline of Lake Erie to the mouth of 
the Portage River just north of Port Clinton. Thence due north in a 
straight line to the United States-Canada border. Thence in a 
southeasterly and then an easterly direction along the United States-
Canada border until a point is reached which is due north of the 
easternmost point of Kelleys Island.
    (9) The boundary then proceeds due south until it reaches the 
shoreline of Lake Erie. Thence the boundary follows the lakeshore in a 
generally northeasterly direction to the beginning point at the mouth of 
Buffalo Creek.

[T.D. ATF-156, 48 FR 48819, Oct. 21, 1983]



Sec. 9.84  Paso Robles.

    (a) Name. The name of the viticultural area described in this 
section is ``Paso Robles''.
    (b) Approved map. The map showing the boundaries of the Paso Robles 
viticultural area is: ``San Luis Obispo'', NI 10-3, scale 1:250,000 
(1956, revised 1969).
    (c) Boundaries. The Paso Robles viticultural area is located within 
San Luis Obispo County, California. From the point of beginning where 
the county lines of San Luis Obispo, Kings and Kern Counties converge, 
the county line also being the township line between T.24S. and T.25S., 
in R.16E.:
    (1) Then in a westerly direction along this county line for 42 miles 
to the range line between R.9E. and R.10E.;
    (2) Then in a southerly direction for 12 miles along the range line 
to the southwest of corner of T.26S. and R.10E.;
    (3) Then in a southeasterly direction, approximately 5.5 miles to a 
point of intersection of the Dover Canyon Jeep Trail and Dover Canyon 
Road;
    (4) Then in an easterly direction along Dover Canyon Road, 
approximately 1.5 miles, to the western border line of Rancho Paso de 
Robles;
    (5) Then, following the border of the Paso Robles land grant, 
beginning in an easterly direction, to a point where it intersects the 
range line between R.11E. and R.12E.;
    (6) Then southeasterly for approximately 16.5 miles to the point of 
intersection of the township line between T.29S. and T.30S. and the 
range line between R.12E. and R.13E.;
    (7) Then in an easterly direction for approximately 6 miles to the 
range line between R.13E. and R.14E.;
    (8) Then in a northerly direction for approximately 6 miles to the 
township line between T.28S. and T.29S.;
    (9) Then in an easterly direction for approximately 18 miles to the 
range line between R.16E. and R.17E.;
    (10) Then in a northerly direction for approximately 24 miles to the 
point of beginning.

[T.D. ATF-148, 48 FR 45241, Oct. 4, 1983, as amended by T.D. ATF-377, 61 
FR 29953, June 13, 1996]

[[Page 153]]



Sec. 9.85  Willow Creek.

    (a) Name. The name of the viticultural area described in this 
section is ``Willow Creek.''
    (b) Approved map. The map showing the boundary of the Willow Creek 
viticultural area is: ``Willow Creek Quadrangle,'' California, U.S.G.S. 
15 minute series (1952).
    (c) Boundaries. The Willow Creek viticultural area is located within 
portions of Humboldt and Trinity Counties, California. From the point of 
beginning where the 1,000-foot contour line intersects Kirkham Creek 
(directly north of section 19, T.7 N./R.5E.), beginning in a southerly 
direction, the boundary line the 1,000-foot contour line to;
    (1) The point of intersection between the 1,000-foot contour line 
and the north section line of section 27, T.6N./R.5E.;
    (2) Then in a straight, north easterly line to the point of 
intersection between the 1,000-foot contour line and the east section 
line of section 13, T.6N./R.5E.;
    (3) Then in a straight, northwesterly line to the point of 
intersection between the 1,000-foot contour line and the north section 
line of section 11, T.6N./R.5E.;
    (4) Then in a straight, south-southwesterly line to the point of 
intersection between the 1,000-foot contour line and the east section 
line of section 15, T.6N./R.5E.;
    (5) Then following the 1,000-foot contour line, beginning in a 
westerly direction, to the point of intersection between the 1,000-foot 
contour line and Coons Creek;
    (6) Then in a straight, westerly line to the point of beginning.

[T.D. ATF-141, 48 FR 37376, Aug. 18, 1983]



Sec. 9.86  Anderson Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Anderson Valley.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Anderson Valley viticultural area are three U.S.G.S. 
maps. They are titled:
    (1) ``Navarro Quadrangle, California--Mendocino Co.,'' 15 minute 
series (1961);
    (2) ``Boonville Quadrangle, California--Mendocino Co.,'' 15 minute 
series (1959); and
    (3) ``Ornbaun Valley Quadrangle, California,'' 15 minute series 
(1960).
    (c) Boundaries. The Anderson Valley viticultural area is located in 
the western part of Mendocino County, California. The beginning point is 
at the junction of Bailey Gulch and the South Branch North Fork Navarro 
River in Section 8, Township 15 North (T.15N.), Range 15 West (R.15W.), 
located in the northeast portion of U.S.G.S. map ``Navarro Quadrangle.''
    (1) From the beginning point, the boundary runs southeasterly in a 
straight line to an unnamed hilltop (elevation 2015 feet) in the 
northeast corner of Section 9, T.13N., R.13W., located in the southeast 
portion of U.S.G.S. map ``Boonville Quadrangle'';
    (2) Then southwesterly in a straight line to Benchmark (BM) 680 in 
Section 30, T.13N., R.13W., located in the northeast portion of U.S.G.S. 
map ``Ornbaun Valley Quadrangle'';
    (3) Then northwesterly in a straight line to the intersection of an 
unnamed creek and the south section line of Section 14, T.14N., R.15W., 
located in the southwest portion of U.S.G.S. map ``Boonville 
Quadrangle'';
    (4) Then in a westerly direction along the south section lines of 
Sections 14, 15, and 16, T.14N., R.15W., to the intersection of the 
south section line of Section 16 with Greenwood Creek, approximately .2 
miles west of Cold Springs Road which is located in the southeast 
portion of U.S.G.S. map ``Navarro Quadrangle'';
    (5) Then in a southwesterly and then a northwesterly direction along 
Greenwood Creek to a point in Section 33 directly south (approximately 
1.4 miles) of Benchmark (BM) 1057 in Section 28, T.15N., R.16W.;
    (6) Then directly north in a straight line to Benchmark (BM) 1057 in 
Section 28, T.15N., R.16W.;
    (7) Then in a northeasterly direction in a straight line to the 
beginning point.

[T.D. ATF-139, 48 FR 37370, Aug. 18, 1983]

[[Page 154]]



Sec. 9.87  Grand River Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Grand River Valley.''
    (b) Approved map. The approved map for determining the boundary of 
the Grand River Valley viticultural area is the U.S.G.S. topographic map 
in the scale of 1:250,000, entitled Cleveland, number NK 17-8, dated 
1956, revised 1972.
    (c) Boundary. The Grand River Valley viticultural area is located in 
the following Ohio counties: Lake, Geauga, and Ashtabula. The 
viticultural area consists of all of the land within the Lake Erie 
viticultural area, described in Sec. 9.83, which is also within 2 
statute miles, in any direction, of the Grand River. Specifically, the 
Grand River Valley viticultural area consists of all of the land west of 
Ohio Route 45 which is within 2 statute miles, in any direction, of the 
Grand River, and which is also within 14 statute miles inland from any 
point on the shore of Lake Erie.

[T.D. ATF-157, 48 FR 48821, Oct. 21, 1983]



Sec. 9.88  Pacheco Pass.

    (a) Name. The name of the viticultural area described in this 
section is ``Pacheco Pass.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of Pacheco Pass viticultural area are two U.S.G.S. maps. They 
are titled:
    (1) San Felipe Quadrangle, 7.5 minute series, 1955 (photorevised 
1971).
    (2) Three Sisters Quadrangle, 7.5 minute series, 1954 (photorevised 
1971).
    (c) Boundary--(1) General. The Pacheco Pass viticultural area is 
located in California. The starting point of the following boundary 
description is the crossing of Pacheco Creek under California Highway 
156, about 4 miles north of Hollister Municipal Airport, in San Benito 
County, California.
    (2) Boundary Description. (i) From the starting point northwestward 
along Pacheco Creek to the intersection with the straight-line extension 
of Barnheisel Road. (Note.-- This is an old land grant boundary and 
appears on the U.S.G.S. map as the western boundary of an orchard.)
    (ii) From there in a straight line northeastward to the intersection 
of Barnheisel Road and California Highway 156.
    (iii) From there northward along Highway 156 to California Highway 
152 (``Pacheco Pass Highway'').
    (iv) Then northward along Pacheco Pass Highway to the 37 deg. 
latitude line.
    (v) Then eastward along that latitude line to the land line R. 5E./
R. 6E.
    (vi) Then southward along that land line, crossing Foothill Road, 
and continuing southward to a point exactly 2,300 feet south of Foothill 
Road.
    (vii) From there is a straight line to the starting point.

[T.D. ATF-167, 49 FR 9169, Mar. 12, 1984]



Sec. 9.89  Umpqua Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Umpqua Valley.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Umpqua Valley viticultural area are two U.S.G.S. maps. 
They are titled:
    (1) ``Roseburg,'' scale 1:250,000 (1958, revised 1970); and
    (2) ``Medford,'' scale 1:250,000 (1955, revised 1976).
    (c) Boundaries. The Umpqua Valley viticultural area is located 
entirely within Douglas County, Oregon, which is in the southwest part 
of the State. The beginning point is the intersection of Interstate 
Highway 5 with the Douglas/Lane County line in Township 21 South (T21S), 
Range 4 West (R4W) on the ``Roseburg'' map.
    (1) From the beginning point, the boundary proceeds north along the 
Douglas/Lane County line approximately .5 miles to the the 1,000-foot 
contour line;
    (2) Thence northwest along the 1,000-foot contour line to the 
Douglas/Lane County line; thence west along the Douglas/Lane County line 
approximately 2.5 miles, returning to the 1,000-foot contour line; 
thence in a generally westerly direction along the 1,000-foot contour 
line to the R9W/R10W range line;
    (3) Thence south along the R9W/R10W range line approximately 2.75 
miles to the center of the Umpqua River; thence along a straight line in 
an easterly direction approximately 6.25 miles to the

[[Page 155]]

intersection of range line R8W/R9W with the center of the Umpqua River; 
thence south along range line R8W/R9W approximately 3.5 miles to its 
intersection with township line T22S/T23S;
    (4) Thence southeast approximately 8.5 miles along a straight line 
to the intersection of township line T23S/T24S with range line R7W/R8W; 
thence south along the R7W/R8W range line approximately 8 miles to its 
intersection with the 1,000-foot contour line; thence in a southeasterly 
direction in a straight line approximately 3.5 miles toward the 
intersection of township line T25S/T26S with range line R6W/R7W, 
returning to the 1,000-foot contour line;
    (5) Thence in a southerly direction along the 1,000-foot contour 
line to the intersection of township line T27S/T28S with range line R7W/
R8W; thence in a southwesterly direction in a straight line 
approximately 3.5 miles toward the intersection of township line T28S/
T29S with range line R8W/R9W, returning to the 1,000-foot contour line; 
thence south along the 1,000-foot contour line to its intersection with 
township line T29S/T30S;
    (6) Thence east along township line T29S/T30S approximately .33 
miles, rejoining the 1,000-foot contour line; thence in a northerly and 
eventually a southerly direction along the 1,000-foot contour line past 
the town of Riddle on the ``Medford'' map to range line R6W/R7W; thence 
south along the R6W/R7W range line approximately .5 miles back to the 
1,000-foot contour line;
    (7) Thence in an easterly, westerly, and eventually a northerly 
direction along the 1,000-foot contour line to a point approximately 3.5 
miles east of Dillard, where the contour line crosses Interstate Highway 
5 on the ``Roseburg'' map; thence northeast along Interstate Highway 5 
approximately .25 mile, returning to the 1,000-foot contour line; thence 
in a generally northeasterly, southeasterly, northwesterly, and 
eventually a northeasterly direction along the 1,000-foot contour line 
past the town of Idleyld Park to the R2W/R3W range line;
    (8) Thence north along range line R2W/R3W approximately 1.75 miles 
to the T25S/T26S township line; thence west along township line T25S/
T26S approximately .25 mile, returning to the 1,000-foot contour line; 
thence in a generally westerly and then a northerly direction along the 
1,000-foot contour line up the valley of Calapooya Creek to the R3W/R4W 
range line; thence north along range line R3W/R4W approximately 2.25 
miles, back to the 1,000-foot contour line;
    (9) Thence in a westerly and then a northerly direction along the 
1,000-foot contour line to the T23S/T24S township line; thence east 
along the T23S/T24S township line approximately 2.75 miles to the 1,000-
foot contour line; thence in a northerly direction along the 1,000-foot 
contour line to its intersection with the Douglas/Lane County line; 
thence north along the Douglas/Lane County line approximately .75 mile 
to the point of beginning.

[T.D. ATF-170, 49 FR 12246, Mar. 29, 1984]



Sec. 9.90  Willamette Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Willamette Valley.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Willamette Valley viticultural area are three U.S.G.S. 
Oregon maps scaled 1:250,000. They are entitled:
    (1) ``Vancouver,'' Location Diagram NL 10-8, 1958 (revised 1974).
    (2) ``Salem,'' Location Diagram NL 10-11, 1960 (revised 1977).
    (3) ``Roseburg,'' Location Diagram NL 10-2, 1958 (revised 1970).
    (c) Boundaries. The Willamette Valley viticultural area is located 
in the northwestern part of Oregon, and is bordered on the north by the 
Columbia River, on the west by the Coast Range Mountains, on the south 
by the Calapooya Mountains, and on the east by the Cascade Mountains, 
encompassing approximately 5,200 square miles (3.3 million acres). The 
exact boundaries of the viticultural area, based on landmarks and points 
of reference found on the approved maps, are as follows: From the 
beginning point at the intersection of the Columbia/Multnomah County 
line and the Oregon/Washington State line;
    (1) West along the Columbia/Multnomah County line 8.5 miles to its 
intersection with the Washington/Multnomah County line;

[[Page 156]]

    (2) South along the Washington County line 5 miles to its 
intersection with the 1,000 foot contour line;
    (3) Northwest (15 miles due northwest) along the 1,000 foot contour 
line to its intersection with State Highway 47, .5 mile north of 
``Tophill'';
    (4) Then, due west from State Highway 47 one-quarter mile to the 
1,000 foot contour line, continuing south and then southwest along the 
1,000 foot contour line to its intersection with the Siuslaw National 
Forest (a point approximately 43 miles south and 26 miles west of 
``Tophill'' ), one mile north of State Highway 22;
    (5) Due south 6.5 miles to the 1,000 foot contour line on the 
Lincoln/Polk County line;
    (6) Continue along the 1,000 foot contour line (approximately 23 
miles) east, south, and then west, to a point where the Polk County line 
is intersected by the Lincoln/Benton County line;
    (7) South along Lincoln/Benton County line, 11 miles to its 
intersection with the Siuslaw National Forest line;
    (8) East along the Siuslaw National Forest line six miles, and then 
south along the Siuslaw National Forest line six miles to State Highway 
34 and the 1,000 foot contour line;
    (9) South along the 1,000 foot contour line to its intersection with 
Township line T17S/T18S (31 miles southwest, and one mile west of State 
Highway 126);
    (10) East along T17S/T18S 4.5 miles to Range line R6W/R7W, south 
along this range line 2.5 miles to the 1,000 foot contour line;
    (11) Southeast along the 1,000 foot contour line to R5W/R6W 
(approximately six miles); southeast from this point eight miles to the 
intersection of R4W/R5W and T19S/T20S;
    (12) East along T19S/T20S 1.5 miles to the 1,000 foot contour line;
    (13) Following the 1,000 foot contour line north around Spencer 
Butte, and then south to a point along the Lane/Douglas County line one-
half mile north of Interstate Highway 99;
    (14) South along the Lane/Douglas County line 1.25 miles to the 
1,000 foot contour line;
    (15) Following the 1,000 foot contour line around the valleys of 
Little River, Mosby Creek, Sharps Creek and Lost Creek to the 
intersection of R1W/R1E and State Highway 58);
    (16) North along R1W/R1E, six miles, until it intersects the 1,000 
foot contour line just north of Little Fall Creek;
    (17) Continuing along the 1,000 foot contour line around Hills 
Creek, up the southern slope of McKenzie River Valley to Ben and Kay 
Dorris State Park, crossing over and down the northern slope around Camp 
Creek, Mohawk River and its tributaries, Calapooia River (three miles 
southeast of the town of Dollar) to a point where Wiley Creek intersects 
R1E/R1W approximately one mile south of T14S/T13S;
    (18) North along R1E/R1W 7.5 miles to T12S/T13S at Cedar Creek;
    (19) West along T12S/T13S four miles to the 1,000 foot contour line;
    (20) Continuing in a general northerly direction along the 1,000 
foot contour line around Crabtree Creek, Thomas Creek, North Santiam 
River (to its intersection with Sevenmile Creek), and Little North 
Santiam River to the intersection of the 1,000 foot contour line with 
R1E/R2E (approximately one mile north of State Highway 22);
    (21) North along R1E/R2E (through a small portion of Silver Falls 
State Park) 14 miles to T6S/T7S;
    (22) East along T6S/T7S six miles to R2E/R3E;
    (23) North along R2E/R3E six miles to T5S/T6S;
    (24) Due northeast 8.5 miles to the intersection of T4S/T5S and R4E/
R3E;
    (25) East along T4S/T5S six miles to R4E/R5E;
    (26) North along R4E/R5E six miles to T3S/T4S;
    (27) East along T3S/T4S six miles to R5E/R6E;
    (28) North along R5E/R6E 10.5 miles to a point where it intersects 
the Mount Hood National Forest boundary (approximately three miles north 
of Interstate Highway 26);
    (29) West four miles and north one mile along the forest boundary to 
the 1,000 foot contour line (just north of Bull Run River);
    (30) North along the 1,000 foot contour line, into Multnomah County, 
to its intersection with R4E/R5E;

[[Page 157]]

    (31) Due north approximately three miles to the Oregon/Washington 
State line; and
    (32) West and then north, 34 miles, along the Oregon/Washington 
State line to the beginning point.

[T.D. ATF-162, 48 FR 54221, Dec. 1, 1983]



Sec. 9.91  Walla Walla Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Walla Walla Valley.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Walla Walla Valley viticultural area are two U.S.G.S. 
maps, in the scale 1:100,000. They are entitled:
    (1) ``Walla Walla,'' Washington-Oregon, 1980
    (2) ``Pendleton,'' Oregon-Washington, 1983
    (c) Boundaries. The Walla Walla Valley viticultural area is located 
within Walla Walla County in Washington State and Umatilla County in 
Oregon. It is entirely within the Columbia Valley viticultural area. The 
boundaries are as follows:
    (1) The beginning point is on the Walla Walla quadrangle map, in 
T8N/37E, at the point where the 2,000 foot contour line intersects with 
an unnamed light duty road approximately 250 feet east of U.S. Highway 
12 in Minnick, Washington (on maps measured in metric units, this 
elevation is between the 600 and 650 meter contour lines),
    (2) Then the boundary goes northwest in a straight line for 7 
kilometers (km), until it intersects with a power line that runs between 
T8N and T9N,
    (3) Then the boundary follows the power line west for 8 km, where it 
diverges from the power line and goes west-southwest in a straight line 
for approximately 33 km to the intersection of 2 unnamed light duty 
roads in the area marked Ninemile Canyon in the southwest corner of T8N/
R33E,
    (4) Then the boundary goes south-southwest in a straight line 
approximately 8 km, until it reaches U.S. Highway 12, about 2.5 km east 
of Reese, Washington,
    (5) Then the boundary goes south in a straight line for 
approximately 8 km, crossing the Washington-Oregon state line and moving 
onto the Pendleton U.S.G.S. map, where it meets the 450 m contour line 
in T6N/R32E, near an unnamed peak with an elevation of 461 m,
    (6) Then the boundary follows the 450 m contour line in a generally 
southeasterly direction until it intersects Dry Creek in T4N/R35E,
    (7) Then the boundary goes southeast along Dry Creek (Oregon) until 
it reaches the 2000 foot contour line,
    (8) Then the boundary follows the 2000 foot contour line in a 
generally northeasterly direction, crossing the Oregon-Washington state 
line and returning to the Walla Walla U.S.G.S map, until it reaches the 
point of beginning.

[T.D. ATF-441, 66 FR 11542, Feb. 26, 2001]



Sec. 9.92  Madera.

    (a) Name. The name of the viticultural area described in this 
section is ``Madera.''
    (b) Approved maps. The approved maps for determining the boundary of 
the Madera viticultural area are eleven U.S.G.S. maps. They are 
entitled:
    (1) ``Clovis, Cal.,'' 7\1/2\ minute series, edition of 1964, 
photorevised 1972;
    (2) ``Fresno North, Cal.,'' 7\1/2\ minute series, edition of 1965, 
photorevised 1972;
    (3) ``Friant, Cal.,'' 7\1/2\ minute series, edition of 1964;
    (4) ``Lanes Bridge, Cal.,'' 7\1/2\ minute series, edition of 1964, 
photoinspected 1973;
    (5) ``Gregg, Cal.,'' 7\1/2\ minute series, edition of 1965;
    (6) ``Madera, Cal.,'' 7\1/2\ minute series, edition of 1963;
    (7) ``Kismet, Cal.,'' 7\1/2\ minute series, edition of 1961;
    (8) ``Raynor Creek, Cal.,'' 7\1/2\ minute series, edition of 1961;
    (9) ``Fresno, Cal.,'' scaled 1:250,000, edition of 1962, revised 
1971;
    (10) ``Monterey, Cal.,'' scaled 1:250,000, edition of 1974; and
    (11) ``San Jose, Cal.,'' scaled 1:250,000, edition of 1962, revised 
1969.
    (c) Boundaries. The Madera viticultural area is located in Madera 
and Fresno Counties, California. The beginning point is found on the 
``Fresno North,'' 7\1/2\ minute series U.S.G.S. map at the point where 
the San Joaquin River intersects the section line

[[Page 158]]

dividing sections 20 and 29, and sections 21 and 28, T. 12 S., R. 20 E.;
    (1) Then east approximately 6 miles following the section line and 
Shepherd Avenue to the intersection with Sunnyside Road;
    (2) Then north approximately 7 miles following Sunnyside Road and 
continuing along the section line to the point of intersection of 
section 16, 17, 20, and 21, T.11S., R 21E.;
    (3) Then west approximately 17.6 miles following the section line 
and continuing along Avenue 15 to the intersection with the Atchison, 
Topeka and Santa Fe Railroad;
    (4) Then northwest following the Atchison, Topeka and Santa Fe 
Railroad to Road 26;
    (5) Then north following Road 26 and continuing north in a straight 
line to the Chowchilla River in the ``Raynor Creek'' 7\1/2\ minute 
series U.S.G.S. map, and in the ``San Jose'' scaled 1:250,000 U.S.G.S. 
map;
    (6) Then west following the Chowchilla River to the point where the 
Madera County-Merced County boundary diverges from the river;
    (7) Then southwest following the Madera County-Merced County 
boundary to the San Joaquin River;
    (8) Then following the San Joaquin River south and east returning to 
the point of beginning.

[T.D. ATF-192, 49 FR 47833, Dec. 12, 1984; 50 FR 2782, Jan. 22, 1985, as 
amended by T.D. ATF-249, 52 FR 5960, Feb. 27, 1987]



Sec. 9.93  Mendocino.

    (a) Name. The name of the viticultural area described in this 
section is ``Mendocino.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries for the Mendocino viticultural area are seven U.S.G.S. maps. 
They are titled:
    (1) ``Willits Quadrangle, California--Mendocino Co.,'' 15 minute 
series (1961);
    (2) ``Potter Valley Quadrangle, California,'' 15 minute series 
(1960);
    (3) ``Ukiah Quadrangle, California,'' 15 minute series (1958);
    (4) ``Hopland Quadrangle, California,'' 15 minute series (1960);
    (5) ``Boonville Quadrangle, California--Mendocino Co.,'' 15 minute 
series (1959);
    (6) ``Navarro Quadrangle, California--Mendocino Co.,'' 15 minute 
series (1961);
    (7) ``Ornbaun Valley Quadrangle, California,'' 15 minute series 
(1960).
    (c) Boundaries. The ``Mendocino'' viticultural area is located 
entirely within Mendocino County, California. The beginning point is the 
southeast corner of Section 30, Township 12 North (T. 12 N.), Range 10 
West (R. 10 W.) located along the Mendocino County/Sonoma County line in 
the southeast quadrant of U.S.G.S. map ``Hopland Quadrangle.''
    (1) From the beginning point, the boundary runs north along the 
eastern boundary of Sections 30, 19, 18, 7 and 6 to the point labeled 
Jakes Cr (Jakes Creek) located at the northwest corner of Section 5, T. 
12 N., R. 10 W.;
    (2) Thence in a straight line in a northwest direction to the point 
labeled Bedford Rock in Section 3, T. 13 N., R. 11 W.;
    (3) Thence in a straight line in a northwest direction to a point 
labeled Red Mtn in Section 17, T. 14 N., R. 11 W.;
    (4) Thence in a straight line in a northwest direction to the 
southeast corner of Section 25, T. 16 N., R. 11 W.;
    (5) Thence in a straight line in a northeast direction to the 
northeast corner of Section 1, T. 16 N., R. 11 W. located along the 
Mendocino County/Lake County line;
    (6) Thence in a straight line in a northwest direction to the 
northeast corner of Section 5, T. 17 N., R. 11 W.;
    (7) Thence in a westerly direction along the T. 18 N./T. 17 N. 
township line until it intersects with the R. 13 W./R. 12 W. range line;
    (8) Thence in a straight line in a southwest direction to the point 
labeled Eagle Rock located in Section 16, T. 15 N., R. 13 W.;
    (9) Thence in a straight line in a southeast direction to the point 
labeled Bus McGall Peak located in Section 4, T. 13 N., R. 12 W.;
    (10) Thence in a straight line in a westerly direction to an unnamed 
hilltop, elevation 2,015 feet, in the northeast corner of Section 9, T. 
13 N., R. 13 W.;
    (11) Thence in a straight line in a northwest direction to the 
junction of Baily Gulch and the South Branch,

[[Page 159]]

North Fork of the Navarro River, located in Section 8, T.15N., R.15W.;
    (12) Thence in a straight line in a southwest direction to Benchmark 
(BM) 1057 located in Section 28, T. 15 N., R. 16 W.;
    (13) Thence due south in a straight line approximately 1.4 miles to 
Greenwood Creek located in Section 33, T. 15 N., R. 16 W.;
    (14) Thence following Greenwood Creek in a generally southeasterly 
and then a northeasterly direction to where it intersects with the south 
section line of Section 16, T. 14 N., R. 15 W., approximately .2 miles 
west of Cold Springs Road;
    (15) Thence in an easterly direction along the south section lines 
of Sections 16, 15, and 14, T. 14 N., R. 15 W., to the intersection of 
the south section line of Section 14 with an unnamed creek;
    (16) Thence in a straight line in a southeasterly direction to 
Benchmark (BM) 680 located in Section 30, T. 13 N., R. 13 W.;
    (17) Thence continuing in a straight line in a southerly direction 
to the southwest corner of Section 5, T. 12 N., R. 13 W., and the 
Mendocino County/Sonoma County line;
    (18) Thence continuing in a straight line in a southeasterly 
direction to the intersection of the southwest corner of Section 32, T. 
12 N., R. 11 W., and the Mendocino County/Sonoma County line;
    (19) Thence following the Mendocino County/Sonoma County line in an 
easterly, northerly, and then an easterly direction to the beginning 
point.

[T.D. ATF-178, 49 FR 24714, June 15, 1984, as amended by T.D. ATF-397, 
63 FR 16904, Apr. 7, 1998]



Sec. 9.94  Howell Mountain.

    (a) Name. The name of the viticultural area described in this 
section is ``Howell Mountain.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Howell Mountain viticultural area are four U.S.G.S. 
topographic maps in the 7.5 minute series, as follows:
    (1) ``Detert Reservoir, CA.,'' 1959 (photorevised 1980).
    (2) ``Aetna Springs, CA.,'' 1958 (photorevised 1981).
    (3) ``Calistoga, CA.,'' 1958 (photorevised 1980).
    (4) ``St. Helena, CA.,'' 1960 (photorevised 1980).
    (c) Boundaries. The Howell Mountain viticultural area is located in 
Napa County, California, and is part of the Napa Valley viticultural 
area. The exact boundaries of the viticultural area, based on landmarks 
and points of reference found in the approved maps, as follows:
    (1) Beginning at the 1,400 foot contour line at the intersection of 
Sections 15 and 16 in R6W/T9N of the Detert Reservoir Quadrangle 
U.S.G.S. map.
    (2) Then continuing in an east and southeast direction along the 
1,400 foot contour line to the southeast corner of Section 23 in R5W/
T8N.
    (3) Then in a generally northwest direction along the 1,400 foot 
contour line until it intersects the line between Sections 21 and 22 in 
R6W/T9N.
    (4) Then north along the Section 21/22 boundary line to the starting 
point at the 1,400 foot contour line.

[T.D. ATF-163, 48 FR 57487, Dec. 30, 1983, as amended by T.D. ATF-249, 
52 FR 5960, Feb. 27, 1987]



Sec. 9.95  Clarksburg.

    (a) Name. The name of the viticultural area described in this 
section is ``Clarksburg.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Clarksburg viticultural area are eight U.S.G.S. 
topographic maps in the 7.5 minute series, as follows:
    (1) Sacramento West, Calif., 1967 (photorevised 1980).
    (2) Saxon, Calif., 1952 (photorevised 1968).
    (3) Clarksburg, Calif., 1967 (photorevised 1980).
    (4) Florin, Calif., 1968 (photorevised 1980).
    (5) Liberty Island, Calif., 1978.
    (6) Courtland, Calif., 1978.
    (7) Bruceville, Calif., 1978 (photorevised 1980).
    (8) Isleton, Calif., 1978.
    (c) Boundaries. Beginning at a point (on the Sacramento West 
topographic map) in Yolo County in T8N/R4E, at the intersection of 
Jefferson Blvd. and Burrows Ave.,

[[Page 160]]

    (1) Then southwest in a straight line 1.2 miles along Jefferson 
Blvd. to the eastern bank of the Sacramento River Deep Water Ship 
Channel.
    (2) Then southwest along the Sacramento River Deep Water Ship 
Channel, approximately 17 miles to T5N/R3E, to the Class 5 trail on the 
levee connecting the Sacramento River Deep Water Ship Channel and the 
dredger cut Miner Slough, approximately 2 miles from the Solano/Yolo 
County line.
    (3) Then east along the trail to the Miner Slough.
    (4) Then east along Miner Slough to the point where it joins Sutter 
Slough, then south along Sutter Slough around the tip of Sutter Island 
to the junction of Sutter Slough and Steamboat Slough; then north around 
Sutter Island along Steamboat Slough to Section 8 in T5N/R4E where 
Steamboat Slough joins the Sacramento River.
    (5) The southeast following the Sacramento River to the point where 
the Sacramento River meets the Delta Cross Channel at the Southern 
Pacific Railroad in Section 35, T5N/R4E.
    (6) Then northeast along the Southern Pacific Railroad for 2 miles, 
to a point \1/3\ mile past the intersection of the Southern Pacific 
Railroad and the eastern branch of Snodgrass Slough.
    (7) Then east approximately 2\1/2\ miles along the levee to 
Interstate 5 (under construction).
    (8) Then north approximately 8\1/2\ miles along Interstate 5 (under 
construction, proposed, and completed) to Section 18 in T6N/R5E, at the 
intersection of Interstate 5 and Hood Franklin Road.
    (9) Then southwest along Hood Franklin Road to the Southern Pacific 
Railroad Levee, .1 mile northeast of Hood Junction.
    (10) Then north approximately 18 miles along the Southern Pacific 
Railroad Levee to Section 11 in T7N/R4E, at Freeport Blvd., and then 
across the Sacramento River at the line between Sections 11 and 14.
    (11) Then northwest along the west bank of the Sacramento River to 
Burrows Ave.
    (12) Then northwest along Burrows Ave. to the starting point at the 
intersection of Jefferson Blvd. and Burrows Ave.

[T.D. ATF-166, 49 FR 2759, Jan. 23, 1984]



Sec. 9.96  Mississippi Delta.

    (a) Name. The name of the viticultural area described in this 
section is ``Mississippi Delta.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Mississippi Delta viticultural area are three U.S.G.S. 
maps. They are titled:
    (1) Helena, scale of 1:250,000, 1955 (revised 1977).
    (2) Greenwood, scale of 1:250,000, 1953 (revised 1979).
    (3) Jackson, scale of 1:250,000, 1955 (revised 1973).
    (c) Boundary--(1) General. The Mississippi Delta viticultural area 
is located in Mississippi, Louisiana, and Tennessee. The starting point 
of the following boundary description is the intersection of the 
Illinois Central Gulf (I.C.G.) Railroad and the Mississippi River levee 
system, on the southeast side of Lake Horne, between Lake View, 
Mississippi, and Walls, Mississippi, on the Helena map.
    (2) Boundary Description. (i) From the starting point generally 
southward along the Mississippi River levee system until it again 
intersects the I.C.G. Railroad, near Twin Lake, Mississippi (about 10 
miles north of Vicksburg, on the Jackson map). In any place where there 
is more than one continuous levee, the one closest to the Mississippi 
River is the boundary.
    (ii) From the intersection described in paragraph (c)(2)(i), the 
boundary continues southward along the I.C.G. tracks, until they merge 
with another branch of the I.C.G. Railroad, near Redwood, Mississippi.
    (iii) Then generally northeastward along that other branch of the 
I.C.G. Railroad, to the Leflore County-Holmes County line (on the 
Greenwood map).
    (iv) Then southeastward along that county line to the Leflore 
County-Carroll County line.
    (v) Then generally northward along that county line to Mississippi 
Route 7.
    (vi) Then generally northeastward along Route 7 to the 
90 deg.00[min] longitude line.

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    (vii) Then northward along that longitude line to Mississippi Route 
8.
    (viii) Then eastward along Route 8 to Mississippi Route 35.
    (ix) Then northward along Route 35 to Mississippi Route 322 (on the 
Helena map).
    (x) Then generally eastward along Route 322 to the Panola Quitman 
Floodway.
    (xi) Then northward along that floodway to the range line R.9W./
R.8W.
    (xii) Then northward along that range line to the 200 ft. contour 
line (north of Ballentine, Mississippi).
    (xiii) Then generally northeastward along that contour line to 
Mississippi Route 3.
    (xiv) Then northward along Route 3 to the Tunica County-Tate County 
line.
    (xv) Then northward along that county line to the Tunica County-De 
Soto County line.
    (xvi) Then northward along that county line to the I.C.G. Railroad.
    (xvii) Then northward along the I.C.G. tracks to the starting point.

[T.D. ATF-181, 49 FR 34354, Aug. 30, 1984]



Sec. 9.97  Sonoita.

    (a) Name. The name of the viticultural area described in this 
section is ``Sonoita.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of Sonoita viticultural area are seven U.S.G.S. maps. They 
are titled:
    (1) Benson Quadrangle, 15 minute series, 1958.
    (2) Fort Huachuca Quadrangle, 15 minute series, 1958.
    (3) Elgin Quadrangle, 15 minute series, 1958.
    (4) Lochiel Quadrangle, 15 minute series, 1958.
    (5) Mount Wrightson Quadrangle, 15 minute series, 1958.
    (6) Sunnyside Quadrangle, 15 minute series, 1958.
    (7) Empire Mountains Quadrangle, 15 minute series, 1958.
    (c) Bouldary--(1) General. The Sonoita viticultural area is located 
in Arizona. The starting point of the following boundary description is 
the summit of Mount Wrightson (9,543 feet) in the Santa Rita Mountains.
    (2) Boundary Description--(i) From the starting point southeastward 
in a straight line for approximately 24 miles, to the summit of Lookout 
Knob (6,171 feet) in the Canelo Hills.
    (ii) From there in a straight line eastward for approximately 10 
miles, to the summit of Huachuca Peak (8,410 feet) in the Huachuca 
Mountains.
    (iii) From there north-northwestward for approximately 21 miles in a 
straight line to the summit of Granite Peak (7,413 feet) in the 
Whetstone Mountains.
    (iv) From there west-southwestward in a straight line for 
approximately 26 miles, to the summit of Mount Wrightson (the point of 
beginning).

[T.D. ATF-189, 49 FR 43054, Oct. 26, 1984]



Sec. 9.98  Monterey.

    (a) Name. The name of the viticultural area described in this 
section is ``Monterey.''
    (b) Approved maps. The approved maps for determining the boundary of 
the Monterey viticultural area are 36 U.S.G.S. quadrangle maps in the 
7.5 minute series, as follows:
    (1) Sycamore Flat, CA, 1956, photoinspected 1972;
    (2) Junipero Serra Peak, CA, 1949, photoinspected 1972;
    (3) Reliz Canyon, CA, 1949;
    (4) Paraiso Springs, CA, 1956;
    (5) Thompson Canyon, CA, 1949, photo-revised 1979;
    (6) Cosio Knob, CA, 1948, photoinspected 1976;
    (7) Espinosa Canyon, CA, 1948;
    (8) San Ardo, CA, 1967;
    (9) Hames Valley, CA, 1949;
    (10) Tierra Redonda Mtn., CA, 1948;
    (11) Bradley, CA, 1949;
    (12) Wunpost, CA, 1948;
    (13) Pancho Rico Valley, CA, 1967;
    (14) Nattras Valley, CA, 1967;
    (15) San Lucas, CA, 1949;
    (16) Pinalito Canyon, CA, 1969;
    (17) North Chalone Peak, CA, 1969;
    (18) Soledad, CA, 1955;
    (19) Mount Johnson, CA, 1968;
    (20) Gonzales, CA, 1955;
    (21) Mt. Harlan Quadrangle, CA, 1968;
    (22) Natividad Quadrangle, CA, 1947, photo-revised 1968, 
photoinspected 1974;
    (23) San Juan Bautista Quadrangle, CA, 1955, photo-revised 1980;

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    (24) Prunedale Quadrangle, CA, 1954, photo-revised 1981;
    (25) Watsonville East Quadrangle, CA, 1955, photo-revised 1980;
    (26) Watsonville West Quadrangle, CA, 1954, photo-revised 1980;
    (27) Moss Landing Quadrangle, CA, 1954, photo-revised 1980;
    (28) Marina Quadrangle, CA, 1947, photo-revised 1968 and 1974;
    (29) Monterey, CA, 1947, photo-revised 1968, photoinspected 1974;
    (30) Mt. Carmel, CA, 1956, photoinspected 1972;
    (31) Carmel Valley, CA, 1956, photoinspected 1974;
    (32) Spreckels, CA, 1947, photo-revised 1968, photoinspected 1975;
    (33) Chualar, CA, 1947, photo-revised 1968, photoinspected 1974;
    (34) Rana Creek, CA, 1956, photoinspected 1973; and
    (35) Palo Escrito Peak, CA, 1956;
    (36) Greenfield, CA, 1956;
    (37) Salinas, CA, 1947 (photorevised 1975); and
    (38) Seaside, CA, 1947 (photorevised 1968, photoinspected 1974).
    (c) Boundary. The Monterey viticultural area is located in Monterey 
County, California. The boundary is as follows:
    (1) The beginning point is found on the ``Sycamore Flat'' U.S.G.S. 
7.5 minute map at the junction of Arroyo Seco Road and the Jamesburg 
Road, in the southeast corner of section 21, T(ownship) 19 S., R(ange) 5 
E. (This is also the beginning point for the Arroyo Seco viticultural 
area.)
    (2) The boundary proceeds directly west along the southern boundary 
of section 21 to the southwest corner of section 21, T. 19 S., R. 5 E.
    (3) Then southeast in a straight diagonal line across section 28 to 
the southeast corner of section 28, T. 19 S., R. 5 E.
    (4) Then directly east along the southern boundaries of sections 27, 
26 and 25 in T. 19 S., R. 5 E., sections 30, 29, 28, 27, 26 and 25 in T. 
19 S., R. 6 E., and sections 30, 29, and 28 in T. 19 S., R. 7 E. to the 
southeast corner of section 28, T. 19 S., R. 7 E.
    (5) Then south along the eastern boundary of section 33 to the 
southeast corner of section 33, T. 19 S., R. 7 E.
    (6) Then southeast in a straight diagonal line across section 3 to 
the southeast corner of section 3, T. 20 S., R. 7 E.
    (7) Then south southeast in a straight diagonal line across sections 
11 and 14 to the southeast corner of section 14, T. 20 S., R. 7 E.
    (8) Then south along the western boundaries of sections 24 and 25 to 
the southwest corner of section 25, T. 20 S., R. 7 E.
    (9) Then east along the southern boundaries of sections 25 and 30 to 
the southeast corner of section 30, T. 20 S., R. 8 E.
    (10) Then southwest in a straight diagonal line across section 31 to 
the southwest corner of section 31, T. 20 S., R. 8 E.
    (11) Then west along the southern boundary of section 36, T. 20 S., 
R. 7 E., to the northwest corner of section 6, T. 21 S., R. 8 E.
    (12) Then south along the western boundaries of sections 6 and 7 to 
the southwest corner of section 7, T. 21 S., R. 8 E.
    (13) Then west along the northern boundary of section 13 to the 
northwest corner of section 13, T. 21 S., R. 7 E.
    (14) Then south along the western boundaries of sections 13 and 24 
to the southwest corner of section 24, T. 21 S., R. 7 E.
    (15) Then east northeast in a straight diagonal line across section 
24, T. 21 S., R. 7 E., and across section 19, T. 21 S., R. 8 E., to the 
northeast corner of section 19, T. 21 S., R. 8 E.
    (16) Then northeast in a straight diagonal line across section 17 to 
the northeast corner of section 17, T. 21 S., R. 8 E.
    (17) Then southeast in a straight diagonal line across sections 16, 
22, 26 and 36 in T. 21 S., R. 8 E. and across sections 6, 8, and 16 in 
T. 22 S., R. 9 E. to the southeast corner of section 16, T. 22 S., R. 9 
E.
    (18) Then east southeast in a straight diagonal line across sections 
22, 23, 24, T. 22 S., R. 9 E., and across section 19, T. 22 S., R. 10 
E., to the southeast corner of section 19, T. 22 S., R. 10 E.
    (19) Then south southeast in a straight diagonal line across 
sections 29, 32, and 33, T. 22 S., R. 10 E., to the

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southeast corner of section 4, T. 23 S., R. 10 E.
    (20) Then south southeast in a straight diagonal line across 
sections 10, 15, 23, and 26 to the southeast corner of section 26, T. 23 
S., R. 10 E.
    (21) Then northwest in a straight diagonal line across section 26 to 
the northwest corner of section 26, T. 23 S., R. 10 E.
    (22) Then west northwest in a straight diagonal line across sections 
22, 21, 20, and 19, T. 23 S., R. 10 E. to the northwest corner of 
section 24, T. 23 S., R. 9 E.
    (23) Then southeast across sections 24, 25, 30, 31, and 32, to the 
southeast corner of section 5, T. 24 S., R. 10 E.
    (24) Then east southeast in a straight diagonal line across section 
9 to the southeast corner of section 10, T. 24 S., R. 10 E.
    (25) Then south southeast in a straight diagonal line across section 
14 to the southeast corner of section 23, T. 24 S., R. 10 E.
    (26) Then southwest in a straight diagonal line to the southwest 
corner of section 26, T. 24 S., R. 10 E.
    (27) Then south along the western boundary of section 35 to the 
southwest corner of section 35, T. 24 S., R. 10 E.
    (28) Then east along the southern boundaries of sections 35 and 36 
to the southeast corner of section 36, T. 24 S., R. 10 E.
    (29) Then north along the eastern boundaries of sections 36 and 25 
to the northeast corner of section 25, T. 24 S., R. 10 E.
    (30) Then northeast in a straight diagonal line across sections 19, 
18, and 17 to the northeast corner of section 8, T. 24 S., R. 11 E.
    (31) Then west northwest in a straight diagonal line across section 
5 to the northwest corner of section 6, T. 24 S., R. 11 E.
    (32) Then north along the line separating Range 10 E. and Range 11 
E. along the eastern boundary lines of sections 36, 25, 24, 13, 12 and 1 
in Township 23 S., and along the western boundaries of sections 36, 25, 
24, 13, 12 and 1 in Township 22 S., to the northeast corner of section 
36, T. 21 S., R. 10 E.
    (33) Then west northwest in a straight diagonal line across sections 
25, 26, 23, 22, 15, 16 and 9 to the northwest corner of section 8, T. 21 
S., R. 10 E.
    (34) Then northwest in a straight diagonal line to the northwest 
corner of section 6, T. 21 S., R. 10 E.
    (35) Then west along the northern boundary of section 1, T. 21 S., 
R. 9 E. to the southeast corner of section 36, T. 20 S., R. 9 E.
    (36) Then northwest in a straight diagonal line across sections 36, 
26, 22, 16, 8, and 6 in T. 20 S., R. 9 E. to the northwest corner of 
section 6, T. 20 S., R. 9 E.
    (37) Then north along the line separating Range 8 E. and Range 9 E. 
along the western boundaries of sections 36, 25, 24, 13, 12, and 1, T. 
19S., R. 8 E. to the northeast corner of section 1, T. 19 S., R. 9 E.
    (38) Then northwest in a straight diagonal line to the point of 
intersection of the boundary line separating R. 7 E. and R. 8 E. and the 
boundary line separating T. 17 S. and T. 18 S.
    (39) Then west along the northern boundaries of sections 1 and 2 to 
the northwest corner of section 2, T. 18 S., R. 7 E.
    (40) Then northwest in a straight diagonal line across section 34 to 
the northwest corner of section 34, T. 17 S., R. 7 E.
    (41) Then west along the southern boundaries of sections 28 and 29 
to the southwest corner of section 29, T. 17 S., R. 7 E.
    (42) Then northwest in a straight diagonal line across sections 30, 
24, 14, 10 and 4 to the northwest corner of section 4, T. 17 S., R. 6 E.
    (43) Then north northeast in a straight line across the easternmost 
portion of section 32 to the northeast corner of section 32, T. 16 S., 
R. 6 E.
    (44) Then north along the eastern boundary of section 29 to the 
northeast corner of section 29, T. 16 S., R. 6 E.
    (45) Then northwest in a straight diagonal line across section 20 to 
the northwest corner of section 20, T. 16 S., R. 6 E.
    (46) Then west northwest in a straight diagonal line across sections 
18 and 13 to the northwest corner of section 13, T. 16 S., R. 5 E.
    (47) Then north northwest in a straight diagonal line across 
sections

[[Page 164]]

11 and 2 to the northwest corner of section 2, T. 16 S., R. 5 E.
    (48) Then west along the southern boundaries of section 34 and 33 to 
the southwest corner of section 33, T. 15 S., R. 5 E.
    (49) Then north along the western boundary of section 33, T. 15 S., 
R. 5 E., in a straight line for approximately 0.5 mile to the 
intersection with the Chualar Land Grant boundary at the northwestern 
corner of section 33, T. 15 S., R. 5 E.
    (50) Then northeast in a straight diagonal line across the Chualar 
Land Grant and section 27 to the northeast corner of section 27, T. 15 
S., R. 5 E.
    (51) Then northwest in a straight diagonal line across section 22 to 
the northwest corner of section 22, T. 15 S., R. 5 E.
    (52) Then west in a straight line along the southern boundaries of 
sections 16 and 17, T. 15 S., R. 5 E., to the southwest corner of 
section 17 where it intersects with the Encinal Y Buena Esperanza Land 
Grant boundary.
    (53) Then north and then west along the eastern boundary of the 
Encinal Y Buena Esperanza Land Grant and the western boundaries of 
sections 21, 17, 8, and 7, T. 15 S., R. 5 E.
    (54) Then in a straight line from the northwest corner of the 
Encinal Y Buena Esperanza Land Grant boundary and section 7, T. 15 S., 
R. 5 E. in a west northwest direction to the point where the power 
transmission line (with located metal tower) intersects at the western 
boundary of the Cienega del Gabilan Land Grant and the eastern boundary 
of the El Alisal Land Grant, T. 14 S., R. 4 E.
    (55) Then north and then northwest along the boundary line between 
the Cienega del Gabilan Land Grant and El Alisal Land Grant to the 
westernmost corner of the Cienega del Gabilan Land Grant, T. 14 S., R. 4 
E.
    (56) Then west along the boundary line between the Sausal Land Grant 
and La Natividad Land Grant to the point where the boundary line 
intersects Old Stage Road.
    (57) Then north along Old Stage Road to the point where Old Stage 
Road intersects the Monterey County--San Benito County line, T. 13 S., 
R. 4 E.
    (58) Then northwest along the Monterey County--San Benito County 
line to the point near the Town of Aromas where the boundary lines of 
the counties of Monterey, Santa Cruz, and San Benito meet, T. 12 S., R. 
3 E.
    (59) Then in a meandering line along the Monterey County--Santa Cruz 
County line east then southeast to the Pacific Ocean, T. 12 S., R. 1 E.
    (60) Then south along the coastline of Monterey Bay to its 
intersection with the northwesternmost boundary of Fort Ord Military 
Reservation, T. 14 S., R. 1 E.
    (61) Then following the boundry line of the Fort Ord Military 
Reservation in an irregular line generally east, then south, then west 
to the point where the boundary line of the military reservation meets 
the Pacific Ocean, T. 15 S., R. 1 E.
    (62) Then following the coastline of the Monterey Peninsula south 
along the coastline of Carmel Bay to Carmel Point, the northwesternmost 
point of Point Lobos State Reserve on the Carmel Peninsula.
    (63) Then southeast in a straight diagonal line to the southwestern 
corner of section 25, T. 16 S., R. 1 W.
    (64) Then east along the southern boundaries of section 25, T. 16 
S., R. 1 W., and sections 30 and 29, T. 16 S., R. 1 E., to the 
southeastern corner of section 29 where it intersects with the 
southwestern boundary of the El Potrero de San Carlos Land Grant.
    (65) Then southeast along the southwestern boundary line of the El 
Potrero de San Carlos Land Grant to the southeastern corner of section 
33, T. 16 S., R. 1 E.
    (66) Then east along the line separating Township 16 S. and Township 
17 S. and across Pinyon Peak to the southeast corner of section 32, T. 
16 S., R. 2 E. (This is the beginning and ending point of the boundary 
of Carmel Valley viticultural area.)
    (67) Then continuing east along the line separating Township 16 S. 
from Township 17 S. to its point of intersection with the line 
separating Range 2 E. and Range 3 E.
    (68) Then north along the western boundaries of sections 31, 30, 19, 
18, 7

[[Page 165]]

and 6 in T. 16 S., R. 3 E. to the southwestern corner of section 31, T. 
15 S., R. 3 E.
    (69) Then in a straight diagonal line east northeast across sections 
31, 32 and 33, T. 15 S., R. 3 E. to the southeast corner of section 28, 
T. 15 S., R. 3 E.
    (70) Then southeast in a straight diagonal line along the eastern 
boundaries of sections 33 and 34, T. 15 S., R. 3 E., and sections 3, 2, 
12, 16, 20, 21, and 28, T. 16 S., R. 4 E., to the point where the 
eastern boundary line of section 28 intersects the boundary line of the 
Guadalupe Y Llanitos de Los Correos Land Grant.
    (71) Then south to the southwest corner of section 34, T. 16 S., R. 
4 E.
    (72) Then east to the northwest corner of section 2, T. 17 S., R. 4 
E.
    (73) Then south along the eastern boundary of section 3 to the 
southeast corner of section 3, T. 17 S., R. 4 E.
    (74) Then southeast in a straight diagonal line across sections 11, 
13, 19, and 29, to the southeast corner of section 29, T. 17 S., R. 5 E.
    (75) Then south along the western boundary of section 33 to the 
southwest corner of section 33, T. 17 S., R. 5 E.
    (76) Then east along the southern boundary of section 33 to the 
northeast corner of section 4, T. 18 S., R. 5 E.
    (77) Then southeast in a diagonal line acros sections 3 and 11 to 
the southeast corner of section 11, T. 18 S., R. 5 E.
    (78) Then south along the western boundary of section 13 to the 
southwest corner of section 13, T. 18 S., R. 5 E.
    (79) Then southeast in a diagonal line across section 24 to the 
southeast corner of section 24, T. 18 S., R. 5 E.
    (80) Then south along the western boundaries of section 30 and 31 to 
the southwest corner of section 31, T. 18 S., R. 6 E.
    (81) Then east along the southern boundaries of sections 31 and 32 
to the southeast corner of section 32, T. 18 S., R. 6 E. (From this 
point, the Monterey and Arroyo Seco viticultural areas share the same 
boundary lines.)
    (82) Then south along the eastern boundaries of sections 5, 8, and 
17 to Arroyo Seco Road, T. 19 S., R. 6 E.
    (83) Then southwest in a straight line for approximately 1.0 mile to 
Benchmark 673, T. 19 S., R. 6 E.
    (84) Then west in a straight line for approximately 1.8 miles to 
Bench Mark 649.
    (85) Then northwest in a straight line for approximately 0.2 mile to 
the northeast corner of section 23, T. 19 S., R. 5 E.
    (86) Then west following the northern boundaries of sections 23 and 
22 to the northwest corner of section 22, T. 19 S., R. 5 E.
    (87) Then south in a straight line along the western boundary of 
section 22 to the point of beginning.

[T.D. ATF-178, 49 FR 24718, June 15, 1984, as amended by T.D. ATF-249, 
52 FR 5960, Feb. 27, 1987]



Sec. 9.99  Clear Lake.

    (a) Name. The name of the viticultural area described in this 
section is ``Clear Lake.''
    (b) Approved Maps. The appropriate maps for determining the 
boundaries of the Clear Lake viticultural area are four U.S.G.S. maps. 
The maps are titled as follows:
    (1) ``Lower Lake Quadrangle, California,'' 15 minute series, 1958;
    (2) ``Clearlake Oaks Quadrangle, California,'' 15 minute series, 
1960;
    (3) ``Lakeport Quadrangle, California,'' 15 minute series, 1958;
    (4) ``Kelseyville Quadrangle, California,'' 15 minute series, 1959.
    (c) Boundaries. The Clear Lake viticultural area is located in 
southwestern Lake County, California. The descriptive boundaries of the 
viticultural area, using landmarks and points of reference on the 
applicable U.S.G.S. maps, are as follows:

    Lower Lake Quadrangle Map (15 minute series); From the beginning 
point on Mt. Hannah in Section 16, Township 12 North (T12N), Range 8 
West (R8W), identified as having an elevation of 3,978 feet, the 
boundary runs--
    (1) East-southeasterly in a straight line to the point on Seigler 
Mountain in Section 23, T12N/R8W, identified as having an elevation of 
3,692 feet;
    (2) Then east-southeasterly in a straight line to the point on 
Childers Peak in Section 34, T12N/R7W, identified as having an elevation 
of 2,188 feet;
    (3) Then east-northeasterly in a straight line to the point on the 
southeast corner of Section 25, T12N/R7W;
    (4) Then northeasterly in a straight line to the point in Section 
16, T12N/R6W, identified as being the ``Baker Mine;''

[[Page 166]]

    (5) Then northwesterly in a straight line to the point at the 
southeast corner of Section 23, T13N/R7W;
    (6) Then northerly along the east line of Sections 23, 14, 11, and 
2, to the point at the northeast corner of Section 2, T13N/R7W, on the 
Clearlake Oaks Quadrangle map;
    Clearlake Oaks Quadrangle Map (15 minute series); Continuing from 
the northeast corner of Section 2, T13N/R7W--
    (7) Then northwesterly in a straight line to the point in Section 
21, T14N/R7W, at the top of Round Mountain
    (8) Then northwesterly in a straight line to the southeast corner of 
Section 4, T14N/R8W;
    Lakeport Quadrangle Map (15 minute series); Continuing from the 
southeast corner of Section 4, T14N/R8W, on the Clearlake Oaks 
Quadrangle Map--
    (9) Then northwesterly on the Lakeport Quadrangle in a straight line 
to a point on Charlie Alley Peak in Section 28, T16N/R9W, identified as 
having an elevation of 3,482 feet;
    (10) Then westerly in a straight line to a point on Hells Peak in 
Section 29, T16N/R10W, identified as having an elevation of 2,325 feet;
    (11) The southeasterly in a straight line to a point on Griner Peak 
in Section 23, T15N/R10W, identified as having an elevation of 2,132 
feet;
    (12) Then southwesterly in a straight line to a point on Scotts 
Mountain in Section 8, T14N/R10W, identified as having an elevation of 
2,380 feet;
    (13) Then southeasterly in a straight line to a point on Lakeport 
Peak in Section 35, T14N/R10W, identified as having an elevation of 
2,180 feet;
    Kelseyville Quadrangle Map (15 minute series); Continuing from 
Lakeport Peak in Section 35, T14N/R10W, on the Lakeport Quadrangle Map--
    (14) Then southeasterly in a straight line to the point at the 
southwest corner of Section 1, T13N/R10W;
    (15) Then south by southeast in a straight line to the point at the 
southeast corner of Section 36, T13N/R10W;
    (16) Then south by southeasterly in a straight line to the point at 
the southwest corner of Section 18, T12N/R8W;
    (17) Then east by northeast in a straight line to the beginning 
point at Mount Hannah, Section 16, T12N/R8W, on the Lower Lake 
Quadrangle Map.

[T.D. ATF-174, 49 FR 19468, May 8, 1984]



Sec. 9.100  Mesilla Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Mesilla Valley.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of Mesilla Valley viticultural area are 15 U.S.G.S. 
quadrangle 7.5 minute series maps. They are entitled:
    (1) ``Anthony, N. Mex.-Tex.,'' 7.5 minute series, edition of 1955;
    (2) ``Bishop Cap, N. Mex.,'' 7.5 minute series, edition of 1955;
    (3) ``Black Mesa, N. Mex.,'' 7.5 minute series, edition of 1978;
    (4) ``Canutillo, Tex.-N. Mex.,'' 7.5 minute series, edition of 1955 
(photorevised 1967);
    (5) ``Dona Ana, N. Mex.,'' 7.5 minute series, edition of 1978;
    (6) ``La Mesa, N. Mex.,'' 7.5 minute series, edition of 1955;
    (7) ``La Union, N. Mex.-Tex.'' 7.5 minute series, edition of 1955;
    (8) ``Las Cruces, N. Mex.,'' 7.5 minute series, edition of 1978;
    (9) ``Leasburg, N. Mex.,'' 7.5 minute series, edition of 1978;
    (10) ``Little Black Mountain, N. Mex.,'' 7.5 minute series, edition 
of 1978;
    (11) ``Picacho Mountain, N. Mex.,'' 7.5 minute series, edition of 
1978;
    (12) ``San Miguel, N. Mex.,'' 7.5 minute series, edition of 1955;
    (13) ``Smeltertown, Tex.-N. Mex.,'' 7.5 minute series, edition of 
1955 (photorevised 1967 and 1973);
    (14) ``Strauss, N. Mex.-Tex.,'' 7.5 minute series, edition of 1955; 
and
    (15) ``Tortugas Mountain, N. Mex.,'' 7.5 minute series, edition of 
1955.
    (c) Boundaries. The Mesilla Valley viticultural area is located 
within Dona Ana County, New Mexico, and El Paso County, Texas. The 
boundaries are as follows: The beginning point is at the Faulkner Canyon 
on the ``Leasburg, N. Mex.'' U.S.G.S. map at the northwest corner of 
Section 15, Township 21 South (T21S), Range 1 West (R1W).
    (1) From the beginning point, the boundary runs east 3.7 miles along 
the north section line until it converges with the 4,200 foot elevation 
contour line at Section 18, T21S/R1E;
    (2) Then it runs southeasterly 31 miles along the 4,200 foot 
elevation contour line to a point approximately 3.5 miles south of 
Bishop Cap where it intersects the Fort Bliss Military Reservation 
boundary at the northeast portion of Section 13, T25S/R3E on the 
``Bishop Cap, N. Mex.'' U.S.G.S. map;

[[Page 167]]

    (3) Then it follows the Fort Bliss Military Reservation boundary 
south for approximately 3.7 miles and east approximately .8 mile to the 
intersection with the 4,200 foot elevation contour line at the southeast 
portion of Section 6, T26S/R4E on the ``Anthony, N. Mex.-Tex.'' U.S.G.S. 
map;
    (4) Then it runs south along the 4,200 foot elevation contour line 
for approximately 20 miles until it intersects the La Mesa Road (Mesa 
Avenue) in the city limits of El Paso, Texas, on the ``Smeltertown, 
Tex.-N. Mex.'' U.S.G.S. map;
    (5) Then it heads south on the La Mesa Road (Mesa Avenue) for 1.2 
miles until it meets Executive Center Boulevard that goes to La Guna/
Smeltertown;
    (6) Then it travels in a southwesterly direction for 1.1 miles on 
Executive Center Boulevard to La Guna/Smeltertown until it crosses the 
Southern Pacific Railroad tracks at Smeltertown, Texas;
    (7) Then it proceeds back into New Mexico northwesterly along the 
Southern Pacific Railroad tracks approximately 12.5 miles to a point 
near the switch yards at Strauss, New Mexico, where it intersects the 
4,100 foot elevation contour line at the center of Section 24, T28S/R2E 
on the ``Strauss, N. Mex.-Tex.'' U.S.G.S. map;
    (8) Then it follows the 4,100 foot elevation contour line in a 
northwesterly direction for 17 miles until it intersects with the south 
section line of Section 29, T25S/R2E, on the ``Little Black Mountain, N. 
Mex.'' U.S.G.S. map;
    (9) Then it runs westerly approximately .5 mile along the south 
section line until it meets the 4,150 foot elevation contour line at 
Section 29, T25S/R2E;
    (10) Then it follows the 4,150 foot elevation contour line northward 
for 15 miles until it meets with Interstate Highway 70/80/180 at the 
southeast corner of Section 19, T23S/R1E, on the ``Las Cruces, N. Mex.'' 
U.S.G.S. map;
    (11) Then it runs southwest along Interstate Highway 70/80/180 for 
approximately .9 mile until it reaches the 4,200 foot elevation contour 
line at the northwest corner of Section 30, T23S/R1E, on the ``Picacho 
Mt., N. Mex.'' U.S.G.S. map;
    (12) Then it meanders in a northerly direction on the 4,200 foot 
elevation contour line for 15 miles until it reaches the section line at 
the southwest corner of Section 15, T21S/R1W on the ``Leasburg, N. 
Mex.'' U.S.G.S. map;
    (13) Then finally it goes north along the section line to Faulkner 
Canyon until it meets with the northwest corner of Section 15, T21S/R1W, 
which is the beginning point.

[T.D. ATF-197, 50 FR 6163, Feb. 14, 1985]



Sec. 9.101  The Hamptons, Long Island.

    (a) Name. The name of the viticultural area described in this 
section is ``The Hamptons, Long Island.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of ``The Hamptons, Long Island'' viticultural area are 5 
U.S.G.S. maps. They are entitled:
    (1) ``Riverhead, N.Y.,'' 7.5 minute series, scaled at 1:24,000, 
edition of 1956;
    (2) ``Eastport, N.Y.,'' 7.5 minute series, scaled at 1:24,000, 
edition of 1956;
    (3) ``New York, N.Y.; N.J.; Conn., U.S. 1:250,000 series, scaled at 
1:250,000, edition of 1960, revised 1979;
    (4) ``Providence, R.I.; Mass.; Conn.; N.Y., U.S. 1:250,000 series, 
scaled at 1:250,000, edition of 1947, revised 1969, and
    (5) ``Hartford, Conn.; N.Y.; N.J.; Mass., U.S. 1:250,000 series, 
scaled at 1:250,000, edition of 1962, revised 1975.
    (c) Boundaries. The boundaries of the viticultural area are as 
follows: ``The Hamptons, Long Island'' viticultural area is located 
entirely within eastern Suffolk County, Long Island, New York. The 
viticultural area boundaries consist of all of the land areas of the 
South Fork of Long Island, New York, including all of the beaches, 
shorelines, islands and mainland areas in the Townships of Southampton 
and East Hampton (including Gardiners Island). The beginning point is 
found on the ``Riverhead, N.Y.'' U.S.G.S. map on the Peconic River about 
2 miles east of Calverton where the Townships of Riverhead, Brookhaven 
and Southampton meet:
    (1) The boundary travels south approximately 10 miles along the 
Southampton/Brookhaven Township line

[[Page 168]]

until it reaches the dunes on the Atlantic Ocean near Cupsogue Beach on 
the ``Eastport, N.Y.'' U.S.G.S. map.
    (2) Then the boundary proceeds east and west along the beaches, 
shorelines, islands and mainland areas of the entire South Fork of Long 
Island described on the ``New York,'' ``Providence,'' and ``Hartford'' 
U.S.G.S. maps until it reaches the Peconic River near Calverton at the 
beginning point. These boundaries consist of all of the land found in 
the Townships of Southampton and East Hampton (including Gardiners 
Island).

[T.D. ATF-205, 50 FR 20413, May 16, 1985, as amended by T.D. ATF-344, 58 
FR 40354, July 28, 1993]



Sec. 9.102  Sonoma Mountain.

    (a) Name. The name of the viticultural area described in this 
section is ``Sonoma Mountain.''
    (b) Approved maps. The approved maps for determining the boundary of 
the Sonoma Mountain viticultural area are 2 U.S.G.S. topographic maps in 
the 7.5 minute series, as follows:
    (1) Glen Ellen, Calif., dated 1954, photorevised 1980; and
    (2) Kenwood, Calif., dated 1954, photorevised 1980.
    (c) Boundary. The Sonoma Mountain viticultural area is located in 
Sonoma County, California. The boundary is as follows:
    (1) The beginning point is the northern most point at which the 
1600-foot contour line crosses the section line dividing section 22 from 
section 23, in Township 6 North, Range 7 West.
    (2) The boundary follows this section line north to the 800-foot 
contour line.
    (3) The boundary follows the 800-foot contour line westerly, 
easterly, and northerly to Bennett Valley Road.
    (4) The boundary follows Bennett Valley Road easterly to Enterprise 
Road.
    (5) The boundary follows Enterprise Road southeasterly to an unnamed 
stream, in Section 7, Township 6 North, Range 7 West, which crosses 
Enterprise Road near the point at which the road turns from an easterly 
to a southerly direction.
    (6) The boundary follows this stream easterly to the 400-foot 
contour line.
    (7) The boundary follows the 400-foot contour line southerly to the 
township line dividing Township 6 North from Township 5 North.
    (8) The boundary follows a straight line extension of this township 
line west to the 1200-foot contour line.
    (9) The boundary follows the 1200-foot contour line northwesterly to 
the range line dividing Range 6 West from Range 7 West.
    (10) The boundary follows this range line south to the 1600-foot 
contour line.
    (11) The boundary follows this contour line westerly to the 
beginning point.

[T.D. ATF-196, 50 FR 2979, Jan. 23, 1985, as amended by T.D. ATF-249, 52 
FR 5960, Feb. 27, 1987]



Sec. 9.103  Mimbres Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Mimbres Valley.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Mimbres Valley viticultural area are 28 U.S.G.S. 
quadrangle maps (26-7.5 minute series and 2-15 minute series). They are 
entitled:
    (1) ``Akela, N. Mex.,'' 7.5 minute series, edition of 1972;
    (2) ``Antelope Hill, N. Mex.,'' 7.5 minute series, edition of 1963 
(photoinspected 1974);
    (3) ``Bisbee Hills, N. Mex.,'' 7.5 minute series, edition of 1965;
    (4) ``Bowlin Ranch, N. Mex.,'' 7.5 minute series, edition of 1965;
    (5) ``Capital Dome, N. Mex.,'' 7.5 minute series, edition of 1965;
    (6) ``Carne, N. Mex.,'' 7.5 minute series, edition of 1965;
    (7) ``Columbus, N. Mex.,'' 7.5 minute series, edition of 1965;
    (8) ``Columbus NE, N. Mex.,'' 7.5 minute series, edition of 1966;
    (9) ``Columbus SE, N. Mex.,'' 7.5 minute series, edition of 1966;
    (10) ``Deming East, N. Mex.,'' 7.5 minute series, edition of 1965;
    (11) ``Deming West, N. Mex.,'' 7.5 minute series, edition of 1964 
(photoinspected 1972);
    (12) ``Dwyer, N. Mex.,'' 15 minute series, edition of 1956;
    (13) ``Faywood Station, N. Mex.,'' 7.5 minute series, edition of 
1947;

[[Page 169]]

    (14) ``Florida Gap, N. Mex.,'' 7.5 mintue series, edition of 1964;
    (15) ``Goat Ridge, N. Mex.,'' 7.5 minute series, edition of 1964;
    (16) ``Gym Peak, N. Mex.,'' 7.5 minute series, edition of 1964;
    (17) ``Hermanas, N. Mex.,'' 7.5 minute series, edition of 1964;
    (18) ``Malpais Hill, N. Mex.,'' 7.5 minute series, edition of 1965;
    (19) ``Midway Butte, N. Mex.,'' 7.5 minute series, edition of 1965;
    (20) ``Myndus, N. Mex.,'' 7.5 minute series, edition of 1972;
    (21) ``North Peak, N. Mex.,'' 7.5 minute series, edition of 1965;
    (22) ``Red Mountain, N. Mex.,'' 7.5 minute series, edition of 1965;
    (23) ``San Lorenzo, N. Mex.,'' 15 minute series, edition of 1956;
    (24) ``Sibley Hole, N. Mex.,'' 7.5 minute series, edition of 1972;
    (25) ``South Peak, N. Mex.,'' 7.5 minute series, edition of 1965;
    (26) ``Spalding, N. Mex.,'' 7.5 minute series, edition of 1964;
    (27) ``West Lime Hills, N. Mex.,'' 7.5 minute series, edition of 
1965; and
    (28) ``Williams Ranch, N. Mex.,'' 7.5 minute series, edition of 
1964.
    (c) Boundaries. The Mimbres Valley viticultural area is located 
within Grant and Luna Counties, New Mexico. The boundaries are as 
follows: The beginning point is located at Faywood Station on an 
unimproved dirt road at benchmark 4911 in Luna County, New Mexico on the 
northern part of Section 2, Township 21 South (T21S), Range 12 West 
(R12W) on the Faywood Station Quadrangle U.S.G.S. map;
    (1) From the beginning point the boundary runs northeast 2.25 miles 
along an unimproved dirt road until it intersects U.S. Routh 180 
(indicated on map as U.S. Rte. 260) at New Mexico Highway 61 (indicated 
on map as an unnumbered secondary highway) at the south portion of Sec. 
30, T20S/R11W;
    (2) The boundary proceeds in a generally northerly direction on N.M. 
Hwy. 61 for 34.5 miles crossing over U.S. Rte. 90 (indicated on map as 
U.S. Rte. 180) west of San Lorenzo, N.M. until it meets an unimproved 
dirt road near Bear Canyon Dam at the west line of Sec. 28, T16S/R11W on 
the San Lorenzo, N. Mex. U.S.G.S. map;
    (3) It then heads east on the unimproved dirt road for .2 mile until 
it meets the Mimbres River at Sec. 28, T16S/R11W;
    (4) It then goes south on the Mimbres River for .25 mile until it 
intersects the 6,000 foot elevation contour line at Sec. 28, T16S/R11W;
    (5) From there the boundary runs south along the 6,000 foot 
elevation contour line until it meets the east line of Sec. 11, T17S/
R11W;
    (6) Then it proceeds south on the section line for .6 mile until it 
hits the south line of Sec. 12, T17S/R11W;
    (7) Then it travels east on the section line for 1.8 miles until it 
intersects an unimproved dirt road in Noonday Canyon on the north line 
of Sec. 18, T17S/R10W;
    (8) It then heads south on the unimproved dirt road for 2.2 miles 
until it intersects a medium duty road at the northern part of Sec. 30, 
T17S/R10W;
    (9) The boundary goes south on the medium duty road for .8 mile 
until it reaches the north line of Sec. 31, T17S/R10W;
    (10) The boundary goes east 5 miles on the section line to the east 
line of Sec. 36, T17S/R10W;
    (11) The boundary proceeds south on the section line for 13 miles to 
the south line of Sec. 36 (also indicated on map as Luna/Grant Country 
line), T19S/R10W on the Dwyer, N. Mex. U.S.G.S. map;
    (12) The boundary travels west on the Luna/Grant County line for 
three miles to the east line of Sec. 4, T20S/R10W;
    (13) The boundary goes south on the section line for three miles to 
the south line of Sec. 16, T20S/R10W;
    (14) Then it goes west on the section line for approximately .6 mile 
to a light duty road located 500 feet south of Benchmark 5119 on the 
south line of Sec. 16, T20S/R10W;
    (15) The boundary heads south on the light duty road for 
approximately 10.25 miles until it meets Hwy. 180 at Benchmark 4672 near 
the west line of Sec. 9, T22S/R10W on the Spalding, N. Mex. U.S.G.S. 
map;
    (16) Then it proceeds southeasterly on Hwy. 180 for approximately 5 
miles to the north line of Sec. 6, T23S/R9W on the Deming West, N. Mex. 
U.S.G.S. map;

[[Page 170]]

    (17) It then goes east on the section line approximately 11.75 miles 
to the east line of Sec. 1, T23S/R8W on the Carne, N. Mex. U.S.G.S. map;
    (18) It then travels south on the section line for 1.5 miles until 
it meets an unimproved dirt road at Sec. 12, T23S/R8W;
    (19) It follows the unimproved dirt road in a easterly direction for 
3 miles to Carne Windmill at the northeast part of Sec. 17, T23S/R7W;
    (20) From there it follows an unimproved dirt road in a 
southeasterly direction for .75 mile until it meets the south line of 
Sec. 16, T23S/R7W;
    (21) Then it proceeds east along the section line for 9 miles until 
it arrives at the east line of Sec. 24, T23S/R6W on the Myndus, N. Mex. 
U.S.G.S. map;
    (22) Then it goes south on the section line for 15 miles until it 
meets the south line of Sec. 36, T25S/R6W on the Sibley Hole, N. Mex. 
U.S.G.S. map;
    (23) Then it heads west on the section line for 8 miles until it 
intersects the 4,200 foot elevation contour line at the southeast corner 
of Sec. 34, T25S/R7W on the Gym Peak, N. Mex. U.S.G.S. map;
    (24) Then it heads north on the 4,200 foot elevation contour line 
for 11 miles until it meets N.M. Hwy. 549 (indicated on map as U.S. Rte. 
70/80/180) at the southwest corner of Sec. 5, T24S/R7W on the Florida 
Gap, N. Mex. U.S.G.S. map;
    (25) The boundary heads west on M.M. Hwy. 549 (indicated on map as 
U.S. Rte. 70/80/180) for 4.5 miles until it meets the light duty road at 
the east line of Sec. 3, T24S/R8W on the Capital Dome, N. Mex. U.S.G.S. 
map;
    (26) It then goes south on the light duty road/section line for 4 
miles until it meets another light duty road at the south line of Sec. 
22, T24S/R8W;
    (27) Then the boundary heads west for 2 miles on the light duty 
road/section line until it intersects an unimproved dirt road at the 
east line of Sec. 29, T24S/R8W;
    (28) Then it travels south on the unimproved dirt road/section line 
for 2 miles until it meets another unimproved dirt road at the south 
line of Sec. 32, T24S/R8W;
    (29) It then moves west .25 mile on the unimproved dirt road until 
it reaches the east line of Sec. 5, T25S/R8W;
    (30) Then it goes south on the section line for 6 miles until it 
reaches an unimproved dirt road near Crawford Ranch at the north line of 
Sec. 5, T25S/R8W on the South Peak, N. Mex. U.S.G.S. map;
    (31) Then it follows the unimproved dirt road in a southwest then 
southern direction for approximately 3 miles until it hits the north 
line of Sec. 19, T26S/R8W;
    (32) It then travels east for 1.1 mile along the section line until 
it hits the east line of Sec. 20, T26S/R8W;
    (33) From there it proceeds south for 2 miles on the section line 
until it intersects the north line of Sec. 33, T26S/R8W;
    (34) It then heads east for 5 miles on the section line until it 
intersects the east line of Sec. 31, T26S/R7W on the Gym Peak, N. Mex. 
U.S.G.S. map;
    (35) The boundary goes south on the section line for 7 miles until 
it meets the north line of Sec. 5 (which also is a light duty road), 
T28S/R7W on the Columbus NE, N. Mex. U.S.G.S. map;
    (36) Then it goes east for 4 miles on the section line until it 
meets the east line of Sec. 2 near Oney Tank T28S/R7W;
    (37) Then it goes south on the section line for 8.7 miles until it 
meets the New Mexico, U.S.A./Mexico International border at the east 
line of Sec. 17, T29S/R7W on the Columbus SE, N. Mex. U.S.G.S. map;
    (38) The boundary follows in a westerly direction along the 
International border for 23 miles to the west line of Sec. 18, T29S/R10W 
on the Hermanas, N. Mex. U.S.G.S. map;
    (39) It then heads north on the western section for 3.5 miles to the 
north line of Sec. 31, T28S/R10W;
    (40) It then moves east for 13 miles on the section line until it 
intersects the east line of Sec. 32, T28S/R8W on the Columbus, N. Mex. 
U.S.G.S. map;
    (41) Then it follows the section line north for 8 miles until it 
meets the south line of Sec. 18, T27S/R8W on the North Peak, N. Mex. 
U.S.G.S. map;
    (42) Then it proceeds west on the section line for 11 miles to the 
west part of Sec. 16 identified as longitude point 107 degrees, 52 
minutes, 30 seconds,

[[Page 171]]

T27S/R10W on the West Lime Hills, N. Mex. U.S.G.S. map;
    (43) Then it moves north on the 107 degrees, 52 minutes, 30 seconds 
longitude point for 9 miles until it intersects the north line of Sec. 
4, T26S/R10W on the Midway Butte, N. Mex. U.S.G.S. map;
    (44) Then it goes west on the section line for 6.5 miles until it 
meets the west line of Sec. 33, T25S/R11W on the Bisbee Hills, N. Mex. 
U.S.G.S. map;
    (45) The boundary then travels north on the section line for 26.5 
miles (crossing the Southern Pacific Railroad tracks) until it 
intersects with the Atchison, Topeka and Santa Fe Railroad tracks on the 
west line of Sec. 21, T21S/R11W on the Spalding, N. Mex. U.S.G.S. map;
    (46) Finally it follows the Atchison, Topeka and Santa Fe Railroad 
tracks in a northwesterly direction for 5 miles until it reaches the 
beginning point at benchmark 4911 on an unimproved dirt road in Faywood 
Station at Sec. 2, T21S/R12W on the Faywood Station, N. Mex. U.S.G.S. 
map.

[T.D. ATF-217, 50 FR 48081, Nov. 21, 1985]



Sec. 9.104  South Coast.

    (a) Name. The name of the viticultural area described in this 
section is ``South Coast.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of South Coast viticultural area are four U.S.G.S. maps. They 
are titled:
    (1) San Diego, 1:250,000 series, 1958 (revised 1978).
    (2) Santa Ana, 1:250,000 series, 1959 (revised 1979).
    (3) Long Beach, 1:250,000 series, 1957 (revised 1978).
    (4) Wildomar Quadrangle, 7.5 minute series, 1953 (photorevised 
1973).
    (c) Boundary--(1) General. The South Coast viticultural area is 
located in California. The starting point of the following boundary 
description is the northern intersection of the Orange County line with 
the Pacific Ocean (on the Long Beach map).
    (2) Boundary Description. (i) From the starting point generally 
northeastward, eastward, and southeastward along the Orange County line, 
to the intersection of that county line with the township line on the 
northern border of Township 7 South (in Range 6 West; on the Santa Ana 
map).
    (ii) From there eastward along that township line to its 
intersection with the northern boundary of the Temecula viticultural 
area described in Sec. 9.50; at this point, the Temecula viticultural 
area boundary coincides with the boundary of the Cleveland National 
Forest (on the Wildomar Quadrangle map).
    (iii) From there following the northern boundary of the Temecula 
viticultural area, at and near its northernmost point, generally 
northeastward, eastward, and southeastward until the Temecula 
viticultural area boundary again intersects the township line on the 
northern border of Township 7 South (in Range 4 West; thus all of the 
Temecula viticultural area is included inside of South Coast 
viticultural area).
    (iv) Then eastward, along the township line on the northern border 
of Township 7 South, to the San Bernardino Meridian (on the Santa Ana 
map).
    (v) Then southward along the San Bernardino Meridian to the 
Riverside County-San Diego County line.
    (vi) Then westward along that county line for about 7\1/2\ miles, to 
the western boundary of the Cleveland National Forest (near the Pechanga 
Indian Reservation).
    (vii) Then generally southeastward along the Cleveland National 
Forest boundary to where it joins California Highway 76.
    (viii) From there generally southeastward along Highway 76 to 
California Highway 79.
    (ix) Then southeastward along Highway 79 to the township line on the 
northern border of Township 12 South (in Range 3 East).
    (x) Then eastward along that township line to its intersection with 
the range line on the eastern border of Range 3 East.
    (xi) From there southward along that range line to the U.S.-Mexico 
international border.
    (xii) Then westward along that international border to the Pacific 
Ocean.

[[Page 172]]

    (xiii) Then generally northwestward along the shore of the Pacific 
Ocean to the starting point.

[T.D. ATF-218, 50 FR 48084, Nov. 21, 1985]



Sec. 9.105  Cumberland Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Cumberland Valley.''
    (b) Approved maps. The appropriate maps for determining the boundary 
of the Cumberland Valley viticultural area are the following 32 U.S.G.S. 
topographical maps of the 7.5 minute series:
    (1) ``Williamsport Quadrangle'', edition of 1969.
    (2) ``Shepherdstown Quadrangle'', edition of 1978.
    (3) ``Keedysville Quadrangle'', edition of 1978.
    (4) ``Middletown Quadrangle'', edition of 1953, photo-revised 1979.
    (5) ``Myersville Quadrangle'', edition of 1953, photo-revised 1971.
    (6) ``Smithsburg Quadrangle'', edition of 1953, photo-revised 1971.
    (7) ``Waynesboro Quadrangle'', edition of 1944, photo-revised 1968 
and 1973.
    (8) ``Iron Springs Quadrangle'', edition of 1953, photo-revised 1968 
and 1973.
    (9) ``Scotland Quadrangle'', edition of 1944, photo-revised 1968 and 
1973.
    (10) ``Caledonia Park Quadrangle'', edition of 1944, photo-revised 
1968 and 1973.
    (11) ``Walnut Botton Quadrangle'', edition of 1952, photo-revised 
1969 and 1977.
    (12) ``Dickinson Quadrangle'', edition of 1952, photo-revised 1969 
and 1977.
    (13) ``Mount Holly Springs Quadrangle'', edition of 1952, photo-
revised 1968 and 1973.
    (14) ``Mechanicsburg Quadrangle'', edition of 1952, photo-revised 
1968 and 1973.
    (15) ``LeMoyne Quadrangle'', edition of 1963, photo-revised 1972.
    (16) ``Steelton Quadrangle'', edition of 1963, photo-revised 1972.
    (17) ``Harrisburg West Quadrangle'', edition of 1969, photo-revised 
1974.
    (18) ``Wertzville Quadrangle'', edition of 1952, photo-revised 1968 
and 1973.
    (19) ``Sherman's Dale Quadrangle'', edition of 1952, photo-revised 
1968 and 1973.
    (20) ``Landisburg Quadrangle'', edition of 1952, photo-revised 1969 
and 1977.
    (21) ``Andersonburg Quadrangle'', edition of 1952, photo-revised 
1969 and 1977.
    (22) ``Newville Quadrangle'', edition of 1952, photo-revised 1969 
and 1975.
    (23) ``Newburg Quadrangle'', edition of 1966, photo-revised 1973.
    (24) ``Doylesburg Quadrangle'', edition of 1966, photo-revised 1973.
    (25) ``Roxbury Quadrangle'', edition of 1966, photo-revised 1973.
    (26) ``Fannettsburg Quadrangle'', edition of 1966, photo-revised 
1973.
    (27) ``St. Thomas Quadrangle'' edition of 1944, photo-revised 1968 
and 1973.
    (28) ``McConnellsburg Quadrangle'', edition of 1944, photo-revised 
1968 and 1973.
    (29) ``Mercersburg Quadrangle'', edition of 1943, photo-revised 1968 
and 1973.
    (30) ``Clear Spring Quadrangle'', edition of 1955, photo-revised 
1971.
    (31) ``Hedgesville Quadrangle'', edition of 1979.
    (32) ``Mason Dixon Quadrangle'', edition of 1943-53 (photorevised 
1971).
    (33) ``Hagerstown Quadrangle'', edition of 1943-53 (photorevised 
1971, photoinspected 1977).
    (34) ``Funkstown Quadrangle'', edition of 1943-53 (photorevised 
1971, photoinspected 1977).
    (35) ``Plainfield Quadrangle'', edition of 1975.
    (36) ``Shippensburg Quadrangle'', edition of 1973.
    (37) ``Chambersburg Quadrangle'', edition of 1973.
    (38) ``Williamson Quadrangle'', edition of 1973.
    (39) ``Greencastle Quadrangle'', edition of 1973.
    (40) ``Dillsburg Quadrangle'', edition of 1973.
    (c) Boundary. The Cumberland Valley viticultural area is located in 
Washington County in west-central Maryland and Franklin and Cumberland 
counties in south-central Pennsylvania. The boundary is as follows:
    (1) Starting immediately west of the Town of Williamsport in 
Washington County, Maryland, at Lock 45 of the Chesapeake & Ohio (C&O) 
Canal National Historical Park and the confluence of the Potomac River 
and Conococheague Creek (see Williamsport Quadrangle), the boundary 
proceeds in a southeasternly direction along the perimeter of the park 
on the

[[Page 173]]

northeastern bank of the Potomac River to the confluence of Antitam 
Creek and the Potomac River;
    (2) Then southeast of Limekiln Road which runs along the perimeter 
of the park from Antietam Creek to the intersection of Limekiln Road and 
Harpers Ferry Road;
    (3) Then northeasterly a straight line approximately two miles to 
the 952-foot summit of Hawk's Hill;
    (4) Then northerly on a straight line approximately 2.5 miles to the 
intersection of Red Hill Road and Porterstown Road;
    (5) Then southeasterly along Porterstown Road to its intersection 
with Mount Briar--Trego Road;
    (6) Then southerly along Mount Briar--Trego Road to its intersection 
with Millbrook Road;
    (7) Then east along Millbrook Road to its intersection with State 
Route 67, approximately 0.5 mile north of Rohersville, Maryland;
    (8) Then directly east approximately 1.25 miles in a straight line 
to the 1,000-foot contour line of South Mountain;
    (9) Then in a north northeasterly direction along the 1,000-foot 
contour line of South Mountain in Washington County, Maryland, and 
Franklin and Cumberland counties in Pennsylvania to the point on South 
Mountain where the 1,000-foot contour line crosses State Hollow Road 
(Rt. 233);
    (10) Then north along Rt. 233 to the point where it crosses the 750-
foot contour of South Mountain;
    (11) Then east along the 750-foot contour line of South Mountain to 
the point southwest of the Mount Holly Springs Reservoir where Cold 
Spring Run, a tributary of Yellow Breeches Creek, crosses the 750-foot 
contour line, approximately 3 miles southwest of the town of Mount Holly 
Springs, Pennsylvania;
    (12) Then east northeast in a straight line approximately seven 
miles to Center Point Knob, elev. 1050 feet, approximately two miles 
southeast of Boiling Springs, Pennsylvania (see Mechanicsburg 
Quadrangle);
    (13) Then continuing east northeast in a straight line approximately 
six miles to the point where U.S. Rt. 15 crosses Yellow Breeches Creek, 
approximately one mile east of Williams Grove, Pennsylvania;
    (14) Then east and northeast in a meandering line along the north 
bank of Yellow Breeches Creek to its confluence with the Susquehanna 
River;
    (15) Then north along the west bank of the Susquehanna River, which 
forms the western portion of the corporate boundary line of the City of 
Harrisburg, Pennsylvania, to the point where the 300-foot contour line 
and the west bank of the Susquehanna River meet;
    (16) Then directly west to the 700-foot contour line of Blue 
Mountain overlooking the Susquehanna River;
    (17) Then along the 700-foot contour line of Blue Mountain as it 
meanders west and around McClures Gap;
    (18) Then along the 700-foot contour line of Blue Mountain to the 
point where the 700-foot contour line crosses State Rt. 233;
    (19) Then northeast along Rt. 233 through Doubling Gap to the 1,000-
foot contour line of Blue Mountain;
    (20) Then in a generally southwesterly direction along the 1,000-
foot contour line of Blue Mountain into Franklin County to the point 
where the 1,000-foot contour line meets the roadbed of the Pennsylvania 
Turnpike, Interstate 76;
    (21) Then along the roadbed of the Pennsylvania Turnpike to the east 
entrance of the Blue Mountain Tunnel;
    (22) Then in a straight line approximately 6.5 miles to the 
intersection of State Rt. 533 and the 1,000-foot contour line of Blue 
Mountain, approximately one mile west northwest of Upper Strasburg, 
Pennsylvania;
    (23) Then southwest along the 1,000-foot contour line of Blue 
Mountain to and along the 1,000-foot contour line of Broad Mountain;
    (24) Then along the 1,000-foot contour line as it meanders along and 
around Broad Mountain and Front Mountain to the point where the 1,000-
foot contour line crosses Wilson Run near Franklin Furnace, 
Pennsylvania;
    (25) Then southwest in a straight line approximately 3.5 miles to 
Parnell Knob, elev. 2060 feet;
    (26) Then west northwest in a straight line approximately four miles 
to the point where the 1,000-foot contour line crosses Township Run near

[[Page 174]]

Cape Horn on Cove Mountain, approximately two miles north northwest of 
Fort Loudon, Pennsylvania;
    (27) Then southwest along the 1,000-foot contour line of Cove 
Mountain into and out of Cove Gap;
    (28) Then along the 1,000-foot contour line of Cove Mountain and Two 
Top Mountain in Franklin County, Pennsylvania, and Sword Mountain and 
Fairview Mountain in Washington County, Maryland, to the point on 
Fairview Mountain where the 1,000-foot contour line intersects the 
National Road (U.S. Rt. 40);
    (29) Then west along U.S. Rt. 40 approximately 0.5 mile to the 
intersection of U.S. Rt. 40 and Cove Road;
    (30) Then south in a straight line from the intersection of U.S. Rt. 
40 and Cove Road approximately 1.25 miles to the intersection of McCoys 
Ferry Road and State Rt. 56;
    (31) Then south along McCoys Ferry Road to the perimeter of the C&O 
Canal National Historical Park along the Potomac River;
    (32) Then southeast along the perimeter of the C&O National 
Historical Park to the point of beginning.

[T.D. ATF-210, 50 FR 29971, July 23, 1985, as amended by T.D. ATF-249, 
52 FR 5960, Feb. 27, 1987]



Sec. 9.106  North Yuba.

    (a) Name. The name of the viticultural area described in this 
section is ``North Yuba.''
    (b) Approved maps. The appropriate maps for determining the boundary 
of North Yuba viticultural area are the following four U.S.G.S. 
topographical maps of the 7.5 minute series:
    (1) ``Oregon House Quadrangle,'' edition of 1948, photo-revised 
1969.
    (2) ``Rackerby Quadrangle,'' edition of 1948, photo-revised 1969.
    (3) ``Challenge Quadrangle,'' edition of 1948 photo-revised 1969.
    (4) ``French Corral Quadrangle,'' edition of 1948, photo-revised 
1969.
    (c) Boundary. The North Yuba viticultural area is located in Yuba 
County in the State of California. The boundary is as follows:
    (1) Beginning on the ``Oregon House Quadrangle'' map at the point 
where the Browns Valley Ditch crosses Woods Creek in the southwest 
corner of section 25, T. 17 N., R. 6 E., the boundary proceeds 
northeasterly in a meandering line approximately 1.5 miles along the 
east bank of Woods Creek to the point near Richards Ranch where the 
paved light duty road crosses said creek;
    (2) Then west and north, approximately 0.33 mile to the point where 
the paved light duty road meets the unimproved dirt road accessing Dixon 
Hill and Texas Hill;
    (3) Then northwest continuing along the paved light duty road 
approximately 2.75 miles to the intersection at Oregon House of said 
light duty road with the medium duty road which travels east and west 
between Virginia Ranch Reservoir of Dry Creek and the Yuba County 
Forestry Headquarters near Dobbins;
    (4) Then northeasterly, 0.7 mile, along same light duty road to its 
intersection with the unimproved dirt road to Lake Mildred, located in 
the northwest corner of section 2, T. 17 N., R. 6 E.;
    (5) Then northwesterly, 1.0 miles, along the unimproved dirt road to 
the end of said road at the shoreline of Lake Mildred;
    (6) Then southwest along the shoreline of Lake Mildred to the Los 
Verjeles Dam at the westernmost end of said lake;
    (7) Then across the face of said dam and continuing northeast along 
the shoreline of Lake Mildred to the point where the stream running 
through Smokey Ravine flows into Lake Mildred;
    (8) Then north and west along said stream to the point where the 
stream crosses the 1,900-foot contour line in the northeast corner of 
section 27, T. 18 N., R. 6 E.;
    (9) Then southwest in a meandering line along the 1.900-foot contour 
line of Lamb Hill;
    (10) Then northwest along the 1,900-foot contour line of High Spring 
Ridge to the point where the medium duty paved road running north and 
south along Willow Glen Creek crosses the 1,900-foot contour line, 
approximately 0.75 mile north of Finley Ranch;
    (11) Then north along said road, approximately 1 mile, to its 
intersection at Willow Glen Ranch near the west boundary line of section 
15, T. 18 N., R.

[[Page 175]]

6 E., with the light duty road which crosses Critterden Ridge;
    (12) Then in a generally easterly direction along said road, 
approximately 2.0 miles, to its point of intersection with the light 
duty paved road named Frenchtown Road which runs north and south between 
Brownsville and Frenchtown;
    (13) Then south along the Frenchtown Road to the point where the 
road crosses the 1,600-foot contour line in the northwest corner of 
section 24, T. 18 N., R. 6 E.;
    (14) Then east along the 1,600-foot contour line to the point where 
Dry Creek crosses the 1,600-foot contour line near the south boundary 
line of section 13, T. 18 N., R. 6 E.;
    (15) Then south along Dry Creek, approximately 0.16 mile, to the 
confluence of Indiana Creek with Dry Creek;
    (16) Then in a generally easterly direction, approximately 1 mile, 
along Indiana Creek to the confluence of Keystone Creek with Indiana 
Creek;
    (17) Then north along indiana Creek, approximately 0.87 mile, to the 
point where Indiana Creek meets the 2,000-foot contour line of Oregon 
Hills;
    (18) Then in a generally southeasterly direction along the 2,000-
foot contour line of Oregon Hills, approximately 6 miles, to the point 
near the east boundary line of section 9, T. 17 N., R. 7 E., where the 
power transmission line on Red Bluff crosses the 2,000-foot contour 
line;
    (19) Then southwest along the right of way of said power 
transmission line to the point near the south boundary of section 9, T. 
17 N., R. 7 E., where it meets the power transmission line running 
northwest and southeast between Dobbins and the Colgate Power House;
    (20) Then southeast along the power transmission line between 
Dobbins and Colgate Power House to the Colgate Power House;
    (21) Then in a generally westerly direction from the Colgate Power 
House along the power transmission line which crosses over Dobbins Creek 
to the point west of Dobbins Creek where the power transmission line 
intersects the 1,000-foot contour line;
    (22) Then in a generally southwesterly direction along the 1,000-
foot contour line above the north bank of the Yuba River and Harry L. 
Englebright lake of the Yuba River to the intersection of the 1,000-foot 
contour line with Woods Creek in the northeast corner of section 36, T. 
17 N., R. 6 E.;
    (23) Then east and north along the east bank of Woods Creek, 
approximately 0.5 miles, to the point of beginning.

[T.D. ATF-211, 50 FR 30820, July 30, 1985]



Sec. 9.107  Lodi.

    (a) Name. The name of the viticultural area described in this 
section is ``Lodi.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Lodi viticultural area are 20 U.S.G.S. 7.5 minute 
series maps, and are titled as follows:
    (1) ``Valley Springs SW, Calif.'' (1962, photoinspected 1973);
    (2) ``Linden, Calif.'' (1968);
    (3) ``Waterloo, Calif.'' (1968, photoinspected 1978);
    (4) ``Lodi South, Calif.'' (1968, photorevised 1976);
    (5) ``Terminous, Calif.'' (1978);
    (6) ``Thornton, Calif.'' (1978);
    (7) ``Bruceville, Calif.'' (1968, photorevised 1980);
    (8) ``Florin, Calif.'' (1968, photorevised 1980);
    (9) ``Elk Grove, Calif.'' (1968, photorevised 1979);
    (10) ``Sloughouse, Calif.'' (1968, photorevised 1980);
    (11) ``Buffalo Creek, Calif.'' (1967, photorevised 1980);
    (12) ``Folsom SE, Calif.'' (1954, photorevised 1980);
    (13) ``Carbondale, Calif.'' (1968, photorevised 1980);
    (14) ``Goose Creek, Calif.'' (1968, photorevised 1980);
    (15) ``Clements, Calif.'' (1968);
    (16) ``Wallace, Calif.'' (1962);
    (17) ``Lodi North, Calif.'' (1968);
    (18) ``Galt, Calif.'' (1968, photoinspected 1978);
    (19) ``Clay, Calif.'' (1968); and
    (20) ``Lockeford, Calif.'' (1968, photoinspected 1973);
    (c) Boundaries. The Lodi viticultural area is located in California 
in the counties of Sacramento and San Joaquin. The beginning point is 
located in the southeast corner of the viticultural

[[Page 176]]

area where the Calaveras River intersects the eastern boundary of San 
Joaquin County (``Valley Springs, SW'' U.S.G.S. map).
    (1) The boundary proceeds west along the Calaveras River to the 
point of intersection with Eightmile Road (Beginning in the ``Valley 
Springs, SW'' map, passing through the ``Linden'' map and ending in the 
``Waterloo'' map);
    (2) Thence west along Eightmile Road to the point of intersection 
with Interstate Highway 5 (beginning in the ``Waterloo map and ending in 
the ``Lodi South'' map);
    (3) Thence north and then northwest along Interstate Highway 5 to 
its intersection with an unnamed road (known locally as Hood-Franklin 
Road) (beginning on the ``Lodi South'' map passing through the 
``Terminous,'' and ``Thornton,'' maps and ending in the ``Bruceville'' 
map);
    (4) Thence east along Hood-Franklin Road to its intersection with 
Franklin Boulevard (beginning in the ``Bruceville'' map and ending to 
the ``Florin'' map);
    (5) Thence northeast along Franklin Boulevard to its meeting point 
with the section line running due east and connecting to the western end 
of Sheldon Road (``Florin'' map);
    (6) Thence due east along the section line connecting to the western 
end of Sheldon Road (``Florin'' map);
    (7) Thence east along Sheldon Road to its intersection with the 
Central California Traction Co. Railroad (beginning in the ``Florin'' 
map and ending in the ``Elk Grove'' map);
    (8) Thence southeast along the Central California Traction Co. 
Railroad to its point of intersection with Grant Line Road (``Elk 
Grove'' map);
    (9) Thence northeast along Grant Line Road to the point of 
intersection with California State Highway 16 (beginning in the ``Elk 
Grove'' map, passing through the ``Sloughhouse'' map and ending in the 
``Buffalo Creek'' map);
    (10) Thence southeast along California State Highway 16 to the point 
of intersection with Deer Creek (beginning in the ``Buffalo Creek'' map 
and ending in the ``Folsom, SE`` map);
    (11) Thence northeast along Deer Creek to the point of intersection 
with the eastern boundary of Sacramento County (``Folsom, SE'' map);
    (12) Thence southeast along the eastern boundary of Sacramento 
County and then along the eastern boundary of San Joaquin County to the 
point of intersection with the Calaveras River, the point of beginning 
(beginning in the ``Folsom, SE'' map, passing through the 
``Carbondale,'' ``Goose Creek,'' ``Clements,'' and ``Wallace'' maps and 
ending in the ``Valley Springs, SW map).

[T.D. ATF-223, 51 FR 5324, Feb. 13, 1986]



Sec. 9.108  Ozark Mountain.

    (a) Name. The name of the viticultural area described in this 
section is ``Ozark Mountain.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of Ozark Mountain viticultural area are 11 U.S.G.S. maps in 
the scale of 1:250,000. They are titled--
    (1) St. Louis, Missouri (1963, revised 1969);
    (2) Jefferson City, Missouri (1955, revised 1970);
    (3) Springfield, Missouri (1954, revised 1969);
    (4) Joplin, Missouri; Kansas (1954, revised 1974);
    (5) Tulsa, Oklahoma; Arkansas; Missouri; Kansas (1958, revised 
1973);
    (6) Fort Smith, Arkansas-Oklahoma (1978);
    (7) Russellville, Arkansas (compiled in 1954);
    (8) Memphis, Tennessee; Arkansas; Missouri (1953, revised 1978);
    (9) Poplar Bluff, Missouri; Arkansas (1957, revised 1978);
    (10) Paducah, Kentucky; Illinois; Missouri; Indiana (1949, revised 
1969); and
    (11) Rolla, Missouri; Illinois (1954, revised 1969).
    (c) Boundary--(1) General. The Ozark Mountain viticultural area is 
located in Missouri, Oklahoma, and Arkansas. The starting point of the 
following boundary description is the point at which the Missouri River 
joins the Mississippi River north of St. Louis, Missouri (on the St. 
Louis map).
    (2) Boundary Description. (i) The boundary proceeds from the 
starting

[[Page 177]]

point westward along the Missouri River until it meets the Osage River;
    (ii) Then further westward along the Osage River (flowing through 
Lake of the Ozarks and the Harry S. Truman Reservoir) until it passes 
adjacent to Missouri Highway 82 in Osceola, Missouri (on the Jefferson 
City map);
    (iii) Then southwestward along Missouri Highway 82 until it 
intersects U.S. Highway 54 in Eldorado Springs, Missouri (on the Joplin 
map);
    (iv) Then westward along U.S. Highway 54 until it intersects U.S. 
Highway 71 near Nevada, Missouri;
    (v) Then southward along U.S. Highway 71 until it intersects 
Interstate Highway 44, approximately 5 miles south of Carthage, 
Missouri;
    (vi) Then westward and southwestward along Interstate Highway 44 
into the State of Oklahoma, and continuing southwestward until 
Interstate Highway 44 crosses the Neosho River near Miami, Oklahoma (on 
the Tulsa map);
    (vii) Then southward along the Neosho River (flowing through the 
Lake of the Cherokees, Lake Hudson, and Fort Gibson Lake) until it flows 
into the Arkansas River, approximately 2 miles west of Fort Gibson, 
Oklahoma (on the Fort Smith map);
    (viii) Then southward and eastward along the Arkansas River (flowing 
through the Robert S. Kerr Lake) into the State of Arkansas, and 
continuing eastward until the Arkansas River is joined by Vache Grasse 
Creek, approximately 4 miles east of Barling, Arkansas;
    (ix) Then southeastward and southwestward following Vache Grasse 
Creek to the place where it is crossed by Arkansas Highway 10, near 
Greenwood, Arkansas;
    (x) Then westward along Highway 10 to U.S. Highway 71. Note: Highway 
10 is the primary highway leading from Greenwood to Hackett, Arkansas;
    (xi) Then southward and eastward along Highway 71 until it crosses 
Rock Creek;
    (xii) Then northeastward along Rock Creek to Petit Jean Creek;
    (xiii) Then generally northeastward and eastward along Petit Jean 
Creek until it becomes the Petit Jean River (on the Russellville map);
    (xiv) Then generally eastward along the Petit Jean River, flowing 
through Blue Mountain Lake, until the Petit Jean River joins the 
Arkansas River;
    (xv) Then generally eastward along the Arkansas River to Cadron 
Creek;
    (xvi) Then northeastward and eastward along Cadron Creek, for about 
2\1/2\ miles, until it pases under U.S. Highway 64, approximately 3\1/2\ 
miles west of Conway, Arkansas;
    (xvii) Then eastward along U.S. Highway 64 until it intersects U.S. 
Highway 67, near Beebe, Arkansas (on the Memphis map);
    (xviii) Then northeastward along U.S. Highway 67 into the state of 
Missouri, then northward until U.S. Highway 67 intersects U.S. Highway 
60, in Poplar Bluff, Missouri (on the Poplar Bluff map);
    (xix) Then eastward along U.S. Highway 60 until it crosses the 
western boundary of Stoddard County. Note: Here that boundary is the St. 
Francis River;
    (xx) Then northward, northeastward, and eastward along the boundary 
of Stoddard County until it joins the southern boundary of Cape 
Girardeau County (on the Cape Girardeau map);
    (xxi) Then northeastward along the Cape Girardeau County boundary 
until it meets the Mississippi River south of Cape Girardeau, Missouri;
    (xxii) Then northward along the Mississippi River to the starting 
point.

[T.D. ATF-231, 51 FR 24144, July 2, 1986; 51 FR 25366, July 14, 1986]



Sec. 9.109  Northern Neck George Washington Birthplace.

    (a) Name. The name of the viticultural area described in this 
section is ``Northern Neck George Washington Birthplace.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Northern Neck George Washington Birthplace 
viticultural area are 2 U.S.G.S. 1:250,000 scale maps. They are 
entitled:
    (1) Washington, DC; Maryland; Virginia, 1957 (Revised 1979); and
    (2) Richmond, VA; MD., 1973.
    (c) Boundaries. The Northern Neck George Washington Birthplace 
viticultural area consists of all of the lands in the Counties of 
Westmoreland,

[[Page 178]]

King George, Northumberland, Lancaster and Richmond, in the Commonwealth 
of Virginia. The boundaries of the Northern Neck George Washington 
Birthplace viticultural area, using landmarks and points of reference 
found on the appropriate U.S.G.S. maps, are as follows:
    (1) Beginning on the Washington, DC; Maryland; Virginia U.S.G.S. map 
at a point on Potomac Creek where the King George County western 
boundary line at its northermost point intersects Potomac Creek the 
boundary proceeds easterly and southeasterly on the Richmond, VA; MD. 
U.S.G.S. map, along the Virginia shoreline of the Potomac River for 
approximately 66 miles to Smith Point on the Chesapeake Bay;
    (2) Thence southerly along the shoreline of the Chesapeake Bay for 
approximately 20 miles to Windmill Point at the mouth of the 
Rappahannock River;
    (3) Thence northwesterly along the banks of the Rappahannock River 
for approximately 72 air miles to Muddy Creek at the point where the 
western boundary line of King George County at its southernmost point 
begins;
    (4) Thence northward along the King George County/Stafford County 
line approximately 7 miles to the point of the beginning.

[T.D. ATF-250, 52 FR 13082, Apr. 21, 1987]



Sec. 9.110  San Benito.

    (a) Name. The name of the viticultural area described in this 
section is ``San Benito.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of San Benito viticultural area are six U.S.G.S. maps. They 
are titled:
    (1) Hollister Quadrangle, 7.5 minute series, 1955 (photorevised 
1971).
    (2) Tres Pinos Quadrangle, 7.5 minute series, 1955 (photorevised 
1971).
    (3) Quien Sabe Valley Quadrangle, 7.5 minute series, 1968.
    (4) Mt. Harlan Quadrangle, 7.5 minute series, 1968.
    (5) Paicines Quadrangle, 7.5 minute series, 1968.
    (6) Cherry Peak Quadrangle, 7.5 minute series, 1968.
    (c) Boundary--(1) General. The San Benito viticultural area is 
located in San Benito County, California. The starting point of the 
following boundary description is the point where the eastern border of 
Section 17 of Township 15 South, Range 7 East, crosses the latitude 
36 deg.37[min]30[sec] (on the Cherry Peak map).
    (2) Boundary Description. (i) From the starting point, westward 
along latitude 36 deg.37[min]30[sec] to the Range Line R.6E./R.7E. (on 
the Paicines map).
    (ii) Then northward along that range line to the southern border of 
Section 1, Township 15 South, Range 6 East.
    (iii) Then westward along that southern border to the western border 
of the same section.
    (iv) Then northward along that western border to the 800-foot 
contour line.
    (v) Then northwestward along that contour line to the Township Line 
T.14S./T.15S.
    (vi) Then westward along that township line to the southern border 
of Section 34, Township 15 South, Range 6 East.
    (vii) Then continuing westward along that southern border to the 
1200-foot contour line.
    (viii) Then generally northwestward along that contour line until it 
crosses for the second time the southern border of Section 28, Township 
14 South, Range 6 East.
    (ix) Then westward along that southern border to the 1400-foot 
contour line.
    (x) Then following the 1400-foot contour line through the folloowing 
sections: Sections 28, 29, and 30, Township 14 South, Range 6 East; 
Section 25, Township 14 South, Range 5 East; Sections 30, 19, 20, and 
returning to 19, Township 14 South, Range 6 East; to the point where the 
1400-foot contour line intersects the section line between Sections 19 
and 18, Township 14 South, Range 6 East.
    (xi) From there in a straight line due northward to the 1200-foot 
contour line in Section 18, Township 14 South, Range 6 East.
    (xii) Then following the 1200-foot contour line generally 
northwestward to the northern border of Section 10, Township 14 South, 
Range 5 East (on the Mt. Harlan map).
    (xiii) Then following that northern border northwestward to the 
1600-foot contour line.

[[Page 179]]

    (xiv) Then following the 1600-foot contour line generally northward 
to an unimproved road.
    (xv) Then looping southward along the unimproved road and continuing 
eastward past the designated ``Spring'' and then northward parallel with 
Bonanza Gulch to the Vineyard School on Cienega Road (on the Hollister 
map).
    (xvi) From there in a straight line northeastward, crossing Bird 
Creek and the San Benito River, to the northwestern corner of Section 
19, Township 13 South, Range 6 East (on the Tres Pinos map).
    (xvii) From there following the northern border of Sections 19 and 
20, Township 13 South, Range 6 East, to the northeastern corner of 
Section 20.
    (xviii) From there in a straight line due eastward to the Range line 
R.6E./R7E.
    (xix) Then southward along that Range line to the Township line 
T.13S./T.14S.
    (xx) Then eastward along that Township line to the eastern border of 
Section 6, Township 14 South, Range 7 East (on the Quien Sabe Valley 
map).
    (xxi) Then southward along the eastern border of Sections 6, 7, and 
18, Township 14 South, Range 7 East, to the northern border of Section 
20, Township 14 South, Range 7 East (on the Cherry Peak map).
    (xxii) Then eastward along that northern border to the eastern 
border of Section 20.
    (xxiii) Then southward along the eastern border of Sections 20, 29, 
and 32, Township 14 South, Range 7 East, and continuing southward along 
the eastern border of Sections 5, 8, and 17, Township 15 South, Range 7 
East, to the starting point.

[T.D. ATF-258, 52 FR 37137, Oct. 5, 1987]



Sec. 9.111  Kanawha River Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Kanawha River Valley''.
    (b) Approved maps. The approved maps for determining the boundary of 
the Kanawha River Valley viticultural area are 20 U.S.G.S. topographic 
maps in the 7.5-Minute series as follows:
    (1) Addison, Ohio--W. Va., dated 1960;
    (2) Gallipolis, Ohio--W. Va., dated 1958;
    (3) Apple Grove, Ohio--W. Va., dated 1968, photorevised 1975;
    (4) Glenwood, W. Va.--Ohio, dated 1968;
    (5) Milton, W. Va., dated 1972;
    (6) West Hamlin, W. Va., dated 1957;
    (7) Hamlin, W. Va., dated 1958;
    (8) Garrets Bend, W. Va., dated 1958;
    (9) Scott Depot, W. Va., dated 1958;
    (10) Saint Albans, W. Va., dated 1958;
    (11) Pocatalico, W. Va., dated 1958;
    (12) Sissonville, W. Va., dated 1958;
    (13) Romance, W. Va.,--Ky., dated 1957;
    (14) Kentuck, W. Va., dated 1957;
    (15) Kenna, W. Va., dated 1957;
    (16) Ripley, W. Va., dated 1960;
    (17) Cottageville, W. Va., dated 1960;
    (18) Mount Alto, W. Va.--Ohio, dated 1958, photorevised 1972;
    (19) Beech Hill, W. Va.--Ohio, dated 1957, photorevised 1975;
    (20) Cheshire, W. Va.--Ohio, dated 1968;
    (c) Boundary description. The boundary description of the Kanawha 
River Valley viticultural area includes (in parentheses) the name of the 
map on which each described point is found. The boundary description is 
as follows:
    (1) The beginning point is the West Virginia-Ohio State Line at the 
confluence of Champaign Creek and the Ohio River. (Addison quadrangle)
    (2) The boundary follows the West Virginia-Ohio State Line, in the 
Ohio River (across the Gallipolis and Apple Grove quadrangles) 
southwesterly to the point at which the Mason County-Cabell County Line 
intersects the State Line. (Glenwood quadrangle)
    (3) The boundary proceeds in a straight line southerly to the 
benchmark at 583 ft. elevation in the town of Yates Crossing in Cabell 
County, WV. (Milton quadrangle)
    (4) The boundary proceeds in a straight line southeasterly to the 
benchmark at 640 ft. elevation in the town of Balls Gap, in Lincoln 
County, WV. (West Hamlin quadrangle)
    (5) The boundary proceeds in a straight line easterly (across the 
Hamlin, Garrett Bend, and Scott Depot quadrangles) to the benchmark at 
590 ft. elevation in the town of Institute in Kanawha County, WV. (Saint 
Albans quadrangle)

[[Page 180]]

    (6) The boundary proceeds in a straight line northeasterly to the 
benchmark at 654 ft. elevation in the town of Pocatalico, in Kanawha 
County, WV. (Pocatalico quadrangle)
    (7) The boundary proceeds in a straight line northeasterly (across 
the Sissonville quadrangle) to the confluence of Johns Branch and Sugar 
Creek in the town of Romance, in Jackson County, WV. (Romance 
quadrangle)
    (8) The boundary proceeds in a straight line northwesterly (across 
the Kentuck quadrangle) to the confluence of Plum Orchard Run and 
Stonelick Creek in the town of Plum Orchard, in Jackson County, WV. 
(Kenna quadrangle)
    (9) The boundary proceeds in a straight line northwesterly (across 
the Ripley quadrangle) to the Baltimore and Ohio Railroad crossing of 
State Highway 87 in the town of Evans, in Jackson County, WV. 
(Cottageville quadrangle)
    (10) The boundary proceeds in a straight line northwesterly (across 
the Mount Alto quadrangle) to the benchmark at 674 ft. elevation in the 
town of Flatrock, in Mason County, WV. (Beech Hill quadrangle)
    (11) The boundary proceeds northwesterly in a straight line (across 
the Cheshire quadrangle) to the beginning point.

[T.D. ATF-226, 51 FR 11913, Apr. 8, 1986]



Sec. 9.112  Arkansas Mountain.

    (a) Name. The name of the viticultural area described in this 
section is ``Arkansas Mountain.''
    (b) Approved maps. The appropriate maps for determining the boundary 
of the Arkansas Mountain viticultural area are two U.S.G.S. maps, 
titled:
    (1) Russellville, Arkansas, 1:250,000 series compiled in 1954.
    (2) Fort Smith, Arkansas-Oklahoma, 1:250,000 series, 1978.
    (c) Boundary--(1) General. The Arkansas Mountain viticultural area 
is located in northwestern Arkansas. Starting at the point where Frog 
Bayou converges with the Arkansas River, near Yoestown, Arkansas (or the 
Fort Smith map), the boundary proceeds:
    (2) Boundary Description. (i) Southwestward along the Arkansas River 
to Vache Grasse Creek.
    (ii) Then southeastward and southwestward following Vache Grasse 
Creek to the place where it is crossed by Arkansas Highway 10, near 
Greenwood, Arkansas.
    (iii) From there westward along Highway 10 to U.S. Highway 71. 
(Note: Highway 10 is the primary highway leading to Greenwood to 
Hackett, Arkansas.)
    (iv) Then southward and eastward along Highway 71 until it crosses 
Rock Creek.
    (v) Then northeastward along Rock Creek to Petit Jean Creek.
    (vi) Then generally northeastward and eastward along Petit Jean 
Creek until it becomes the Petit Jean River (on the Russellville map).
    (vii) Then generally eastward along the Petit Jean River, flowing 
through Blue Mountain Lake, until the Petit Jean River joins the 
Arkansas River.
    (viii) Then generally eastward along the Arkansas River to Cadron 
Creek.
    (ix) Then generally northward and northeastward along Cadron Creek 
to the place where it is crossed by U.S. Highway 65.
    (x) From there northward along Highway 65 to its intersection with 
Arkansas Highway 16 near Clinton, Arkansas.
    (xi) From there following Highway 16 generally westward to its 
intersection with Arkansas Highway 23 in Brashears, Arkansas.
    (xii) From there southward along Highway 23 to the Madison County-
Franklin County line.
    (xiii) Then westward and southward along that county line to the 
Madison County-Crawford County line.
    (xiv) Then westward along that county line to the Washington County-
Crawford County line.
    (xv) Then westward along that county line to Jones Fork (on the Fort 
Smith map).
    (xvi) Then southward along Jones Fork until it joins Frog Bayou near 
Winfrey, Arkansas.
    (xvii) Then generally southward along Frog Bayou, flowing through

[[Page 181]]

Lake Shepherd Springs and Lake Fort Smith, to the starting point.

[T.D. ATF-235, 51 FR 34205, Sept. 26, 1986]



Sec. 9.113  North Fork of Long Island.

    (a) Name. The name of the viticultural area described in this 
section is ``North Fork of Long Island.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the ``North Fork of Long Island'' viticultural area are 5 
U.S.G.S. maps. They are entitled:
    (1) Wading River, N.Y., 7.5 minute series, scaled at 1:24,000 
edition of 1967.
    (2) Riverhead, N.Y., 7.5 minute series, scaled at 1:24,000, edition 
of 1956.
    (3) New York, N.Y.; N.J.; Conn., U.S., 1:250,000 series, scaled at 
1:250,000, edition of 1960, revised 1979.
    (4) Providence, R.I.; Mass.; Conn., N.Y., U.S., 1:250,000 series, 
scaled at 1:250,000, edition of 1947, revised 1969.
    (5) Hartford, Conn.; N.Y.; N.J.; Mass., U.S., 1:250,000 series, 
scaled at 1,250,000, edition of 1962, revised 1975.
    (c) Boundaries. The boundaries of the proposed viticultural area are 
as follows: The North Fork of Long Island viticultural area is located 
entirely within eastern Suffolk County, Long Island, New York. The 
viticultural area boundaries consist of all of the land areas of the 
North Fork of Long Island, New York, including all of the mainland, 
shorelines and islands in the Townships of Riverhead, Shelter Island, 
and Southold.
    (1) The point of beginning is on the Wading River, N.Y., 7.5 minute 
series, U.S.G.S. map at the northern boundary of the Brookhaven/
Riverhead Township line on the Long Island Sound (approximately 500 feet 
east of the mouth of the Wading River);
    (2) The boundary goes south on the Brookhaven/Riverhead Town line 
for approximately 6.5 miles until it meets the Peconic River 
approximately 1 mile east of U.S. Reservation Brookhaven National 
Laboratory;
    (3) Then the boundary travels east on the Peconic River (Brookhaven/
Riverhead Town line) for 2.7 miles until it meets the Riverhead/
Southampton Township line on the Riverhead, N.Y., U.S.G.S. map;
    (4) It then goes east on the Riverhead/Southampton Township line for 
4.2 miles until it reaches an area where the Peconic River widens north 
of Flanders;
    (5) Then the boundary proceeds east to Orient Point then west along 
the shoreline, beaches, islands, and mainland areas of the North Fork of 
Long Island, described on the ``New York'', ``Providence'' and 
``Hartford'' U.S.G.S. maps until it reaches the Brookhaven/Riverhead 
Township line at the point of beginning. These boundaries consist of all 
the land (and isolated islands including without limitation, Wicopesset 
Island, Robins Island, Fishers Island, Great Gull Island, Plum Island, 
and Shelter Island) in the Townships of Riverhead, Shelter Island, and 
Southold.

[T.D. ATF-240, 51 FR 36398, Oct. 10, 1986]



Sec. 9.114  Old Mission Peninsula.

    (a) Name. The name of the viticultural area described in this 
section is ``Old Mission Peninsula.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the ``Old Mission Peninsula'' viticultural area are 2 
U.S.G.S. Quadrangle (15 Minute Series) maps, scaled at 1:62,500. They 
are entitled:
    (1) Elk Rapids, Mich. (1957); and
    (2) Traverse City, Mich. (1957).
    (c) Boundary. The boundary in Grand Traverse County, Michigan, 
consists of all of Peninsula Township, excluding Marion and Bassett 
Islands. In addition, the viticultural area takes in a small portion of 
Traverse City Township.
    (1) The beginning point is on the Traverse City, Mich., U.S.G.S. map 
at the shoreline of the West Arm of Grand Traverse Bay at Section 1, 
Township 27 North, Range 11 West (T27N, R11W), approximately 500 feet 
due west of the intersection of two unmarked light-duty roads (approx. 
750 feet north of Bryant Park);
    (2) The boundary proceeds north 19 miles along the western shoreline 
of the Old Mission Peninsula until it reaches the lighthouse near Old 
Mission Point at the north side of the Peninsula on the Elk Rapids, 
Mich., U.S.G.S. map, Sec. 23, T30N, R10W;
    (3) It then proceeds south for approximately 19 miles along the 
eastern

[[Page 182]]

shoreline of the peninsula to the southeast portion of an unmarked 
light-duty road (known locally as Eastern Avenue) at Sec. 6, T27N, R10W 
on the Traverse City, Mich., U.S.G.S. map. The unmarked light-duty road 
is located immediately north of Northwestern Michigan College on the 
shoreline of the East Arm of the Grand Traverse Bay;
    (4) The boundary travels west along the unmarked light-duty road 
(known locally as Eastern Avenue) for approximately one mile until it 
meets an unmarked north/south light-duty road at Sec. 1, T27N, R11W; and
    (5) Finally, the boundary proceeds due east 500 feet to the 
beginning point on the shoreline of the West Arm of the Grand Traverse 
Bay at Sec. 1, T27N, R11W.

[T.D. ATF-252, 52 FR 21515, June 8, 1987]



Sec. 9.115  Ozark Highlands.

    (a) Name. The name of the viticultural area described in this 
section is ``Ozark Highlands.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Ozark Highlands viticultural area are three U.S.G.S. 
maps of the 1:250,000 series. They are titled:
    (1) Rolla, Missouri; Illinois, 1954 (revised 1969).
    (2) St. Louis, Missouri; Illinois, 1963 (revised 1969).
    (3) Springfield, Missouri, 1954 (revised 1969).
    (c) Boundary--(1) General. The Ozark Highlands viticultural area is 
located in south central Missouri. The area comprises portions of the 
following counties: Phelps, Maries, Osage, Gasconade, Franklin, 
Crawford, Texas, Shannon, Dent, Reynolds, and Pulaski. The beginning 
point of the following boundary description is the junction of Little 
Piney Creek and the Gasconade River, near Jerome, Missouri (in the 
northwest corner of the Rolla map).
    (2) Boundary Description. (i) From the beginning point, the boundary 
goes northward along the Gasconade River to the latitude line 
38 deg.00[min] (the dividing line between the Rolla and St. Louis maps);
    (ii) Then eastward along that latitude line to U.S. Highway 63;
    (iii) Then northward along U.S. 63 to Spring Creek;
    (iv) Then north-northwestward along Spring Creek to the Gasconade 
River;
    (v) Then northward along the Gasconade River to a power transmission 
line (less than 1 mile north of Buck Elk Creek);
    (vi) Then eastward and east-northeastward along that power 
transmission line to Missouri Route 19;
    (vii) Then southward along Route 19 to the Bourbeuse River;
    (viii) Then east-northeastward along the Bourbeuse River to the 
range line dividing R. 2 W. and R. 1 W.;
    (ix) Then southward along that range line to the Meramec River;
    (x) Then southwestward along the Meramec River to Huzzah Creek;
    (xi) Then southward along Huzzah Creek to Dry Creek (on the Rolla 
map, where Missouri Route 8 crosses Huzzah Creek);
    (xii) Then southward along Dry Creek to Cherry Valley Creek;
    (xiii) Then south-southwestward along Cherry Valley Creek to 
Missouri Route 19;
    (xiv) Then southward and southwestward along Route 19 to Crooked 
Creek;
    (xv) Then northwestward along Crooked Creek to the Meramec River;
    (xvi) Then southward along the Meramec River to Hutchins Creek;
    (xvii) The southeastward along Hutchins Creek to its source near 
Missouri Route 32, across from the Howes Mill Post Office;
    (xviii) Then in a straight line toward the Howes Mill Post Office to 
Route 32;
    (xix) Then eastward along Route 32 to the range line dividing R. 3 
W. and R. 2 W.;
    (xx) Then southward along that range line to the township line 
dividing T. 33 N. and T. 32 N.;
    (xxi) Then westward along that township line (which coincides, in R. 
3 W., with the Reynolds County/Dent County line) to the boundary of 
Clark National Forest;
    (xxii) Then generally southward along that national forest boundary 
to the Dent County/Shannon County line;
    (xxiii) Then westward along that county line to the Current River;
    (xxiv) Then southeastward along the Current River to Missouri Route 
19;

[[Page 183]]

    (xxv) Then southward along Route 19 to Jack's Fork;
    (xxvi) Then westward, southwestward and northwestward along Jack's 
Fork, taking the North Prong, to its northwesternmost source;
    (xxvii) Then in a straight line northwestward to the 
southeasternmost source of Hog Creek;
    (xxviii) Then northwestward along Hog Creek to the Big Piney River 
(on the Springfield map);
    (xxix) Then northward along the Big Piney River to the township line 
dividing T. 35 N. and T. 36 N.;
    (xxx) Then eastward along that township line to Little Piney Creek 
(on the Rolla map);
    (xxxi) Then northward and westward along Little Piney Creek to the 
beginning point.

[T.D. ATF-256, 52 FR 32785, Aug. 31, 1987]



Sec. 9.116  Sonoma Coast.

    (a) Name. The name of the viticultural area described in this 
section is ``Sonoma Coast''.
    (b) Approved map. The approved maps for determining the boundary of 
the Sonoma Coast viticultural area are the following six U.S.G.S. 
topographic maps:
    (1) Sonoma County, California, scale 1:100,000, dated 1970;
    (2) Mark West Springs, California, 7.5-minute series, dated 1958, 
photoinspected 1978;
    (3) Healdsburg, California, 7.5-minute series, dated 1955, 
photorevised 1980;
    (4) Jimtown, California, 7.5-minute series, dated 1955, photorevised 
1975;
    (5) Guerneville, California, 7.5-minute series, dated 1955; and
    (6) Cazadero, California, 7.5-minute series, dated 1978.
    (c) Boundary description. In general, the boundary description of 
the Sonoma Coast viticultural area is found on the U.S.G.S. Topographic 
Map of Sonoma County, California, scale 1:100,000, dated 1970. When a 
point of the boundary description is found on one of the 7.5-minute 
quadrangles, the boundary description indicates this in parentheses. The 
boundary description is as follows:
    (1) The beginning point is the point at which the Sonoma County-
Mendocino County line meets the shoreline of the Pacific Ocean.
    (2) The boundary follows the shoreline of the Pacific Ocean 
southerly to the Sonoma County-Marin County line.
    (3) The boundary follows the Sonoma County-Marin County line 
southeasterly to San Pablo Bay.
    (4) The boundary follows the shoreline of San Pablo Bay easterly to 
the Sonoma County-Napa County line.
    (5) The boundary follows the Sonoma County-Napa County line 
northerly to the peak of Arrowhead Mountain.
    (6) From the peak of Arrowhead Mountain, the boundary proceeds in a 
straight line westerly to the peak of Sonoma Mountain.
    (7) From the peak of Sonoma Mountain, the boundary proceeds in a 
straight line northwesterly to the peak of Taylor Mountain.
    (8) From the peak of Taylor Mountain, the boundary proceeds in a 
straight line northwesterly to the point, near the benchmark at 184 ft. 
elevation in Section 34, Township 8 North, Range 8 West, at which Mark 
West Road crosses an unnamed stream which flows northwesterly into Mark 
West Creek. (Mark West Springs map)
    (9) From this point, the boundary proceeds northerly in a straight 
line to the headwaters of Brooks Creek, in Section 4, Township 8 North, 
Range 8 West. (Mark West Springs map)
    (10) The boundary follows Brooks Creek northwesterly to its 
confluence with the Russian River. (Healdsburg map)
    (11) The boundary proceeds southwesterly in a straight line to an 
unidentified peak at elevation 672 ft. (Healdsburg map)
    (12) The boundary proceeds northwesterly in a straight line to the 
peak identified as Black Peak. (Healdsburg map)
    (13) The boundary proceeds westerly in a straight line to an 
unidentified peak at elevation 857 ft. (Healdsburg map)
    (14) The boundary proceeds westerly in a straight line to the peak 
of Fitch Mountain at elevation 991 ft. (Healdsburg map)
    (15) The boundary proceeds northwesterly in a straight line to the 
intersection, near a benchmark at elevation

[[Page 184]]

154 ft. in the town of Chiquita, of a light-duty road (known locally as 
Chiquita Road) and a southbound primary highway, hard surface road 
(known locally as Healdsburg Avenue). (Jimtown map)
    (16) The boundary follows that road (known locally as Healdsburg 
Avenue) southerly through the city of Healdsburg to the point at which 
it is a light-duty, hard or improved surface road, identified on the map 
as Redwood Highway, which crosses the Russian River, immediately south 
of the city of Healdsburg at a bridge (known locally as the Healdsburg 
Avenue Bridge). (Healdsburg map)
    (17) The boundary follows the Russian River southerly to a point, 
near the confluence with Dry Creek, opposite a straight line extension 
of a light-duty, hard or improved surface road (known locally as Foreman 
Lane) located west of the Russian River. (Healdsburg map)
    (18) The boundary proceeds in a straight line to that road and 
follows it westerly, then south, then westerly, onto the Guerneville 
map, across a secondary highway, hard surface road (known locally as 
Westside Road), and continues westerly, then northwesterly to the point 
at which it crosses Felta Creek. (Guerneville map)
    (19) The boundary follows Felta Creek approximately 18,000 ft. 
westerly to its headwaters, at the confluence of three springs, located 
approximately 5,800 feet northwesterly of Wild Hog Hill. (Guerneville 
map)
    (20) The boundary proceeds in a straight line southwesterly to the 
southwest corner of Section 9, Township 8 North, Range 10 West. 
(Guerneville map)
    (21) The boundary proceeds in a straight line southwesterly to the 
point in, Section 24, Township 8 North, Range 11 West, at which Hulbert 
Creek crosses the 160 ft. contour line. (Cazadero map)
    (22) The boundary follows Hulbert Creek southerly to its confluence 
with the Russian River.
    (23) The boundary follows the Russian River southwesterly to its 
confluence with Austin Creek.
    (24) From this point, the boundary proceeds in a straight line 
northwesterly to the peak of Pole Mountain.
    (25) From the peak of Pole Mountain, the boundary proceeds in a 
straight line northwesterly to the peak of Big Oat Mountain.
    (26) From the peak of Big Oat Mountain, the boundary proceeds in a 
straight line northwesterly to the peak of Oak Mountain.
    (27) From the peak of Oak Mountain, the boundary proceeds in a 
straight line northwesterly approximately 14.5 miles to the Sonoma 
County-Mendocino County line at the northeast corner of Section 25, 
Township 11 North, Range 14 West.
    (28) The boundary follows the Sonoma County-Mendocino County line 
west, then southwesterly to the beginning point.

[T.D. ATF-253, 52 FR 22304, June 11, 1987]



Sec. 9.117  Stags Leap District.

    (a) Name. The name of the viticultural area described in this 
section is ``Stags Leap District.''
    (b) Approved map. The appropriate map for determining the boundaries 
of the Stags Leap District viticultural area is one U.S.G.S. topographic 
map in the 7.5 minute series, scaled 1:24000, titled ``Yountville, 
Calif.,'' 1951 (photorevised 1968).
    (c) Boundaries. The Stags Leap District viticultural area is located 
in Napa County, California, within the Napa Valley viticultural area. 
The boundaries are as follows:
    (1) Commencing at the intersection of the intermittent stream 
(drainage creek) with the Silverado Trail at the 60 foot contour line in 
T6N/R4W, approximately 7 miles north of the city of Napa.
    (2) Then southwest in a straight line, approximately 900 feet, to 
the main channel of the Napa River.
    (3) Then following the main branch of the Napa River (not the 
southern branch by the levee) in a northwesterly then northerly 
direction, until it intersects the medium-duty road (Grant Bdy) in T7N/
R4W, known locally as the Yountville Cross Road.

[[Page 185]]

    (4) Then northeast along the Yountville Cross Road until it 
intersects the medium-duty road, the Silverado Trail.
    (5) Then north along the Silverado Trail approximately 590 feet to a 
gully entering the Silverado Trail from the east.
    (6) Then northeast along the center line of that gully, 
approximately 800 feet, until it intersects the 400 foor contour line in 
Section 30 of T7N/R4W.
    (7) Then in a generally southeast direction, following the 400 foot 
contour line through Sections 29, 32, 33, 4, and 3, until it intersects 
the intermittent stream in the southwest corner of Section 3 in T6N/R4W.
    (8) Then in a generally southwest direction along that intermittent 
stream to the beginning point, at the intersection with the Silverado 
Trail.

[T.D. ATF-281, 54 FR 4018, Jan. 27, 1989]



Sec. 9.118  Ben Lomond Mountain.

    (a) Name. The name of the viticultural area described in this 
section is ``Ben Lomond Mountain.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Ben Lomond Mountain viticultural area are four 7.5 
minute series U.S.G.S. maps. They are titled:
    (1) Davenport Quadrangle (1955, photorevised 1968);
    (2) Big Basin Quadrangle (1955, photorevised 1973);
    (3) Felton Quadrangle (1955, photorevised 1980); and
    (4) Santa Cruz Quadrangle (1954, photorevised 1981).
    (c) Boundaries. The Ben Lomond Mountain viticultural area is located 
entirely within Santa Cruz County, California, which is in the central 
part of the State near the coast. The beginning point is the 
intersection of sections 25, 26, 35 and 36 (Davenport Quadrangle, T. 
10S., R. 3W.) which coincides with the 800-foot contour line and is 
approximately .6 mile northwest of the top of Bald Mountain.
    (1) From the beginning point, the boundary follows the 800-foot 
contour line in a meandering manner in a generally northwesterly 
direction across section 26 into section 27 (T. 10S., R. 3W.).
    (2) Thence along the 800-foot contour line in an easterly and then 
generally a northeasterly direction through section 27 and then back 
across the northwest corner of section 26 and thence in a generally 
northwesterly direction along the 800-foot contour line across sections 
23, 22 and into section 15.
    (3) Thence along the 800-foot contour line in a northerly and then a 
southerly direction across section 22 and eventually in a generally 
northwesterly direction into section 20.
    (4) Thence continuing along the 800-foot contour line in a generally 
northwesterly direction through sections 20, 17, 16, 17, 16, 9, 8, 5, 8, 
7 and 6 (T. 10S., R. 3W.).
    (5) Thence continuing in a northerly direction across sections 5 and 
32 and thence in a southwesterly direction across sections 31 and 6.
    (6) Thence continuing in a generally northerly direction across 
sections 1, 6, 31, 36, 31, 36 and 30 (T. 9S., R. 3W.) to the 
intersection of the 800-foot contour line and Scott Creek in section 19 
(T. 9S., R. 3W.).
    (7) Thence in a northeasterly direction along the south bank of 
Scott Creek through sections 19, 20 and 17 to the intersection of Scott 
Creek with the 1600-foot contour line in section 16 (T. 9S., R. 3W.).
    (8) Thence in a generally northeasterly and then southerly direction 
along the 1600-foot contour line through section 16 and then through the 
southeast and southwest corners of sections 9 and 10 respectively to the 
intersection of the 1600-foot contour line with Jamison Creek in section 
16 (T. 9S., R. 3W.).
    (9) Thence in an easterly direction along the south bank of Jamison 
Creek across sections 15 and 14 (T. 9S., R. 3W.) to the intersection of 
Jamison Creek and the 800-foot contour line in the southeast corner of 
section 14 (T. 9S., R. 3W.).
    (10) Thence in a southeasterly direction in a meandering manner 
along the 800-foot contour line across sections 14, 23, 24, 25 (T. 9S., 
R. 3W.), sections 30 and 31 (T. 9S., R. 2W.), and sections 32, 5, 8, 9, 
16, 17 and 21 (T. 10S., R. 2W.).
    (11) Thence in a southwesterly, then generally a southeasterly and 
then a northwesterly direction along the 800-

[[Page 186]]

foot contour line in a meandering manner to section 31 and then 
continuing on through sections 31 and 30 (T. 10S., R. 2W.).
    (12) Thence continuing along the 800-foot contour line in a 
generally southerly and then a generally northwesterly direction through 
sections 25, 36, 31 and 36 to the point of beginning at the intersection 
of sections 25, 26, 35 and 36 (T. 10S., R. 3W.).

[T.D. ATF-264, 52 FR 46591, Dec. 9, 1987]



Sec. 9.119  Middle Rio Grande Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Middle Rio Grande Valley.''
    (b) Approved maps. The approved maps for determining the boundaries 
of the ``Middle Rio Grande Valley'' viticultural area are 24 U.S.G.S. 
Quadrangle (7.5 Minute Series) maps and 1 (15 Minute Series) U.S.G.S. 
map. They are titled:
    (1) Abeytas, N. Mex. (1952), revised 1979.
    (2) Alameda, N. Mex. (1960), revised 1967 and 1972.
    (3) Alburquerque East, N. Mex. (1960), revised 1967 and 1972.
    (4) Albuquerque West, N. Mex. (1960), revised 1967 and 1972.
    (5) Belen, N. Mex. (1952), revised 1971.
    (6) Bernalillo, N. Mex. (1954), revised 1972.
    (7) Dalies, N. Mex. (1952), revised 1971.
    (8) Isleta, N. Mex. (1952), revised 1967 and 1974.
    (9) La Joya, N. Mex. (1952), revised 1971.
    (10) Lemitar, N. Mex. (1952), revised 1971.
    (11) Loma De Las Canas, N. Mex. (1959), revised 1979.
    (12) Loma Machete, N. Mex. (1954), revised 1972.
    (13) Los Griegos, N. Mex. (1960), revised 1967 and 1972.
    (14) Los Lunas, N. Mex. (1952), revised 1971 and 1974.
    (15) Mesa Del Yeso, N. Mex. (1959).
    (16) Placitas, N. Mex. (1954).
    (17) San Acacia, N. Mex. (1952), revised 1971.
    (18) San Antonio, N. Mex. (1948)--15 minute series.
    (19) San Felipe Pueblo, N. Mex. (1954), revised 1978.
    (20) Santa Ana Pueblo, N. Mex. (1954), revised 1978.
    (21) Socorro, N. Mex. (1959), revised 1971.
    (22) Tome, N. Mex. (1952), revised 1979.
    (23) Turn, N. Mex. (1952), revised 1979.
    (24) Veguita, N. Mex. (1952), revised 1979.
    (25) Wind Mesa, N. Mex. (1952), revised 1967.
    (c) Boundary description. The boundary of the proposed Middle Rio 
Grande Valley viticultural area is as follows:
    (1) The beginning point is at the transmission line tower in the 
middle of Section 34, T14N, R4E of the Santa Ana Pueblo, N. Mex. 
U.S.G.S. map;
    (2) The boundary follows the power transmission line east for 2.5 
miles until it converges with New Mexico State Route 25/Interstate 85 
(now known as Interstate 25) at Sec. 1, T13N, R4E on the San Felipe 
Pueblo, M. Mex. U.S.G.S. map;
    (3) It follows I-25 southwest for 1.2 miles until it arrives at an 
unimproved dirt road approx. .2 mile east of Algodones Cemetery, at Sec. 
11, T13N, R4E on the Placitas, N. Mex. U.S.G.S. map;
    (4) The boundary follows the unimproved dirt road southeast for 5.5 
miles until it meets another unimproved dirt road at Tecolote, NM, south 
of Sec. 27 and 28, T13N, R5E;
    (5) It travels southwest on the unimproved dirt road .7 mile until 
it meets NM-44 approx. 100 feet northwest of BM 6,075 in Placitas, NM, 
at T13N, R5E;
    (6) It then goes southeast on NM-44 for approx. 250 feet until it 
intersects the 6,100 foot elevation contour line approx. 250 feet 
southeast of BM 6,075, at T13N, R5E;
    (7) It then travels west for 3.5 miles on the 6,100 feet elevation 
contour line until it reaches a light-duty road on the Huertas Grant/
Cibola National Forest Boundary at Sec. 6, T12N, R5E;
    (8) The boundary runs north to northwest on the light-duty road for 
approx. .9 mile until it meets NM-44 next to BM 5,875 in Sec. 31, T13N, 
R5E;
    (9) It travels west 5.2 miles on NM-44 until it arrives at I-25 
(southbound interchange) near the Bernalillo Cemetery at T13N, R4E on 
the Bernalillo, N. Mex. U.S.G.S. map;

[[Page 187]]

    (10) It proceeds south on I-25 for approx. 8.6 miles until it 
intersects with NM-556 at the east bound interchange at Sec. 1, T11N, 
R3E on the Alameda, N. Mex. U.S.G.S. map;
    (11) The boundary goes east approx. 5 miles on NM-556 until it 
intersects the 106 deg.30[min] longitude meridian, T11N, R4E;
    (12) Then it goes south on the 106 deg.30[min] longitude meridian 
for approx. 4.5 miles until it arrives at Montgomery Blvd. at Sec. 34, 
T10/11N, R4E;
    (13) The boundary travels west on Montgomery Blvd. for approx. 6.1 
miles until it meets the south exit ramp of 1-25 in Sec. 34, T11N, R3E;
    (14) Then it travels south on I-25 for approx. 13.3 miles (through 
Albuquerque, NM) until it intersects with NM-47 at Sec. 6, T8N, R3E on 
the Isleta, N. Mex. U.S.G.S. map;
    (15) It heads south on NM-47 for approx. 3.2 miles until it 
converges with the 4,900 foot elevation contour line at Isleta Pueblo, 
NM, in Sec. 24, T8N, R2E;
    (16) The boundary follows the 4,900 foot elevation contour line 
south for approx. 25 miles until it arrives at a point north on Madron, 
NM, at the Atchison, Topeka and Santa Fe Railroad (AT&SF RR) tracks, 
approx. 250 feet east of elevation mark 4,889 feet on the Turn, N. Mex. 
U.S.G.S. map;
    (17) It then travels north on the AT&SF RR tracks for approx. 350 
feet until it intersects NM-47 approx. 350 feet north of elevation mark 
4,889 feet;
    (18) The boundary goes southwest on NM-47 (through Turn, N.M.) for 
approx. 2.4 miles until it reaches the 106 deg.45[min] longitude 
meridian between the Turn, N. Mex. & Vequita, N. Mex. U.S.G.S. maps;
    (19) Then it travels south on the 106 deg.45[min] longitude meridian 
for approx. 4.7 miles until it meets the 34 deg.30[min] latitude 
parallel on the Veguita, N. Mex. U.S.G.S. map;
    (20) It then proceeds west on the 34 deg.30[min] latitude parallel 
for approx. 1 mile until it arrives at NM-47 approx. .75 mile south of 
San Juan Church;
    (21) Then it moves south on NM-47 for approx. 13.2 miles until it 
reaches an improved light-duty road at La Joya, NM, approx. 500 feet 
west of La Joya Cemetery on the La Joya, N. Mex. U.S.G.S. map;
    (22) It then travels south on the improved light-duty road for 
approx. 450 feet until it intersects another improved light-duty road;
    (23) Then it goes 500 feet west on the improved light-duty road 
until it reaches a north-south unimproved road at a point approx. .9 
mile east of the AT&SF RR tracks;
    (24) The boundary heads south on the unimproved road for approx. 7.9 
miles until it reaches the 34 deg.15[min] latitude parallel on the La 
Joya, N. Mex. U.S.G.S. map;
    (25) It travels west on the 34 deg.15[min] latitude parallel for 
approx. .9 mile until it intersects the 106 deg.52[min]30[min] longitude 
meridian on the Mesa Del Yeso, N. Mex. U.S.G.S. map;
    (26) It then goes south on the 106 deg.52[min]30[sec] longitude 
meridian for approx. 3.3 miles until it intersects the south section 
line of Sec. 19, T1S, R1E;
    (27) It then runs east for approx. 1.25 miles until it reaches the 
east section line (marked altitude 5,058 feet) of Sec. 20, T1S, R1E;
    (28) It travels south on the section line for approx. 7.1 miles, 
until it meets the Grant Boundary at altitude mark 4,734 feet at Sec. 
32/33, T2S, R1E on the Loma De Las Canas, N. Mex. U.S.G.S. map;
    (29) It proceeds east on the Grant Boundary for .25 mile until it 
arrives at the section line (Grant Boundary at Sec. 32/33, T2S, R1E;
    (30) The boundary moves south on the Grant Boundary for approx. 5.2 
miles until it meets the (Grant Boundary) section line near altitude 
spot 4,702 feet at Sec. 28/29, T3S, R1E;
    (31) The boundary goes west on the section line (Grant Boundary) for 
approx. .25 mile until it arrives at the section line at Sec. 28/29, 
T3S, R1E;
    (32) Then it moves south on the section line for approx. 5.7 miles 
until it meets an unimproved dirt road at Bosquecito, N.M. on the west 
section line of Sec. 9, T4S, R1E on the San Antonio, N. Mex. (15 minute 
series) U.S.G.S. map;
    (33) It heads south on the unimproved dirt road for approx. 2 miles 
until it changes to a light-duty road at Padilla Ranch in Sec. 21, T4S, 
R1E;

[[Page 188]]

    (34) It follows the light-duty road for 2.25 miles until it 
intersects US-380/85, in Sec. 33, T4S, R1E;
    (35) Then it follows US-380/85, first west then it loops north for 
approx. 8 miles until it meets the 34 deg.00[min] latitude parallel;
    (36) The boundary moves west on the 34 deg.00[min] latitude parallel 
of the Socorro, N. Mex. U.S.G.S. map for approx. .75 mile until it meets 
the 4,800 foot elevation contour line in Sec. 35;
    (37) It meanders north on the 4,800 foot elevation contour line for 
approx. 9 miles until it meets the 34 deg.07[min]30[sec] latitude 
parallel;
    (38) It travels east for approx. .2 mile on the 
34 deg.07[min]30[sec] latitude parallel until it meets I-25 (US-60/85);
    (39) It goes north on I-25 (US-60/85) for approx 27.8 miles until it 
meets the Belen Highline Canal levee approx. 1.6 mile south of San 
Antonio Church on the Veguita, N. Mex. U.S.G.S. map;
    (40) Then the boundary follows the Belen Highline Canal north for 
approx. 9.4 miles until it intersects I-25, approx. .5 mile west of 
Bacaville, NM, on the Belen, N. Mex. U.S.G.S. map;
    (41) Then it travels north on I-25 for approx. 16 miles until it 
meets the 34 deg.52[min]30[sec] latitude parallel on the Isleta, N. Mex. 
U.S.G.S. map;
    (42) The boundary goes west on the 34 deg.52 30[sec] latitude 
parallel for approx. 1 mile until it arrives at the 106 deg.45[min] 
longitude meridian;
    (43) Then it moves north on the 106 deg.45[min] longitude meridian 
for approx. 16.5 miles until it reaches the 35 deg.07[min]30[sec] 
longitude meridian on the Albuquerque West, N. Mex. U.S.G.S. map;
    (44) At this point it heads east for approx. 1.2 miles along the 
35 deg.07[min] 30[sec] latitude parallel until it reaches the power 
transmission line towers at Sec. 3/4, T10N, R2E of the Los Griegos, N. 
Mex. U.S.G.S. map; and finally
    (45) From there it follows the power transmission line towers (and 
for 1 mile along a connecting unimproved road) north and northeast for a 
total of approx. 24.4 miles to the point of beginning at Sec. 34, T14N, 
R4E, of the Santa Ana Pueblo, N. Mex. U.S.G.S. map.

[T.D. ATF-266, 52 FR 2836, Feb. 2, 1988]



Sec. 9.120  Sierra Foothills.

    (a) Name. The name of the viticultural area described in this 
section is ``Sierra Foothills.''
    (b) Approved maps. The appropriate maps for determining the boundary 
of the Sierra Foothills viticultural area are four U.S.G.S. 
topographical maps of the 1:250,000 scale:
    (1) ``Chico'' (NJ 10-3), edition of 1958, revised 1970.
    (2) ``Sacramento'' (NJ 10-6), edition of 1957 revised 1970.
    (3) ``San Jose'' (NJ 10-9), edition of 1962, revised 1969.
    (4) ``Mariposa'' (NJ 11-7), edition of 1957, revised 1970.
    (c) Boundary. The Sierra Foothills viticultural area is located in 
portions of the counties of Yuba, Nevada, Placer, El Dorado, Amador, 
Calaveras, Tuolumne and Mariposa, in the State of California. The 
boundary is as follows:
    (1) Beginning on the ``Chico'' map at the point of intersection of 
the north border of T(ownship) 18 N(orth), R(ange) 6 E(ast), with S. 
Honcut Creek the boundary proceeds approximately 3.5 miles, in a 
generally south and southwesterly direction, along the eastern bank of 
S. Honcut Creek to the point where S. Honcut Creek meets the western 
border of T. 18 N., R. 6 E.;
    (2) Then south, approximately 15 miles, along the western borders of 
T. 18 N., T. 17 N., and T. 16 N. in R. 6 E., to the point where the 
western border of T. 16 N., R. 6 E. meets the northernmost perimeter of 
Beale Air Force Base in the southwestern corner of T. 16 N., R. 6 E.;
    (3) Then east, south and west along the perimeter of Beale Air Force 
Base to the point where the perimeter of Beale Air Force Base intersects 
the western border of R. 7 E. in T. 14 N.;
    (4) Then south, approximately 24 miles, along the western borders of 
T. 14 N., T. 13 N., T. 12 N., and T. 11 N. in R. 7 E., to the 
southwestern corner of T. 11 N., R. 7 E. (see ``Sacramento'' map);
    (5) Then east, approximately six miles, along the south border of T. 
11 N., R. 7 E., to the southeastern corner of T. 11 N., R. 7 E.;

[[Page 189]]

    (6) Then in a south southeasterly direction, in a straight line, 
approximately three miles, to the northeasternmost corner of Sacramento 
County in T. 10 N., R. 8 E.;
    (7) Then continuing in a south southeasterly direction, in a 
straight line, along the Sacramento County--El Dorado County line, 
approximately 15 miles, to the point where the county line meets the 
Cosumnes River in the southwestern corner of T. 8 N., R. 9 E.;
    (8) Then south, in a straight line, approximately 14.1 miles, along 
the Sacramento County--Amador County line, to the point where the county 
line meets Dry Creek in the northwestern corner of T. 5 N., R. 9 E.;
    (9) Then in a south southeasterly direction, in a stright line, 
approximately 5.4 miles. along the San Joaquin County--Amador County 
line, to the point where the Mokelumne River forms the Amador County--
Calaveras County line in T. 4 N., R. 9 E.;
    (10) Then continuing in a south southeasterly direction, in a 
straight line, approximately 10.4 miles, along the San Joaquin County-
Calaveras County line, to the point where the power line meets the 
western border of T. 3 N., R. 10 E.;
    (11) Then in a southeasterly direction, in a straight line, 
approximately 22.4 miles, along the Calaveras County-Stanislaus County 
line to the point where the county line meets the Stanislaus River in T. 
1 S., R. 12 E. (see ``San Jose'' map);
    (12) Then in a southeasterly direction, in a straight line, 
approximately 20 miles, along the Tuolumne County-Stanislaus County line 
to the point where the county lines of Tuolumne, Mariposa, Stanislaus 
and Merced counties meet in the southeast corner of T. 3 S., R. 14 E.;
    (13) Then continuing along the Mariposa County-Merced County line in 
a generally southeasterly direction, approximately 37 miles, to the 
point where the county lines of Mariposa, Merced and Madera counties 
meet in the northwestern corner of T. 9 S, R. 18 E.;
    (14) Then northeasterly in a straight line, approximately 23 miles, 
along the Mariposa County-Merced County line to the point, approximately 
one mile west of Miami Mountain, where the Mariposa County-Merced County 
line meets the western border of the boundary of the Sierra National 
Forest in T. 6S, R. 20 E. (see ``Mariposa'' map);
    (15) Then in a generally northerly and westerly direction, along the 
western borders of the Sierra and Stanislaus National Forests in 
Mariposa County (see ``San Jose'' map);
    (16) Then in a generally northerly and westerly direction, along the 
western border of the Stanislaus National Forest in Tuolumne County (see 
``Sacramento'' map);
    (17) Then in a generally northerly and westerly direction, along the 
western border of the Stanislaus National Forest in Calaveras and Amador 
counties;
    (18) Then in a generally northerly and westerly direction, along the 
western border of the El Dorado National Forest in Amador, El Dorado and 
Placer counties (see ``Chico'' map);
    (19) Then in a generally northerly and westerly direction, along the 
western border of the Tahoe National Forest in Placer, Nevada and Yuba 
counties to the point south of Ruef Hill where the western border of the 
Tahoe National Forest intersects the northeast corner of T. 18 N., R. 6 
E.;
    (20) Then west, approximately five miles, along the north border of 
T. 18 N., R. 6 E., to the point of beginning.

[T.D. ATF-261, 52 FR 44105, Nov. 18, 1987]



Sec. 9.121  Warren Hills.

    (a) Name. The name of the viticultural area described in this 
section is ``Warren Hills.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Warren Hills viticultural area are thirteen U.S.G.S. 
maps of the 7.5 minute series. They are titled:
    (1) Riegelsville Quadrangle, Pennsylvania--New Jersey, 1956 
(photorevised 1968 and 1973).
    (2) Bloomsbury Quadrangle, New Jersey, 1955 (photorevised 1970).
    (3) High Bridge Quadrangle, New Jersey, 1954 (photorevised 1970).
    (4) Washington Quadrangle, New Jersey, 1954 (photorevised 1971).

[[Page 190]]

    (5) Hackettstown Quadrangle, New Jersey, 1953 (photorevised 1971, 
photoinspected 1976).
    (6) Tranquility Quadrangle, New Jersey, 1954 (photorevised 1971).
    (7) Newton West Quadrangle, New Jersey, 1954 (photorevised 1971).
    (8) Flatbrookville Quadrangle, New Jersey--Pennsylvania, 1954 
(photorevised 1971).
    (9) Blairstown Quadrangle, New Jersey--Warren Co., 1954 
(photorevised 1971).
    (10) Portland Quadrangle, Pennsylvania--New Jersey, 1955 
(photorevised 1984).
    (11) Belvidere Quadrangle, New Jersey--Pennsylvania, 1955 
(photorevised 1984).
    (12) Bangor Quadrangle, Pennsylvania--New Jersey, 1956 (photorevised 
1968 and 1973).
    (13) Easton Quadrangle, New Jersey--Pennsylvania, 1956 (photorevised 
1968 and 1973).
    (c) Boundary--(1) General. The Warren Hills viticultural area is 
located in Warren County, New Jersey. The beginning point of the 
following boundary description is the junction of the Delaware River and 
the Musconetcong River, at the southern tip of Warren County (on the 
Riegelsville map).
    (2) Boundary Description. (i) From the beginning point, the boundary 
goes northeastward along the Musconetcong River about 32 miles (on the 
Riegelsville, Bloomsbury, High Bridge, Washington, Hackettstown, and 
Tranquaility maps) to the point where it intersects the Warren County-
Sessex County line;
    (ii) Then northwestward along that county line for about 10 miles 
(on the Tranquility, Newton West, and Flatbrookville maps) to Paulins 
Kill;
    (iii) Then generally southwestward along Paulins Kill (on the 
Flatbrookville, Blairstown and Portland maps) to the Delaware River;
    (iv) Then generally south-southwestward along the Delaware River (on 
the Portland, Belvidere, Bangor, Easton, and Reigelsville maps) to the 
beginning point.

[T.D. ATF-276, 53 FR 29676, Aug. 8, 1988]



Sec. 9.122  Western Connecticut Highlands.

    (a) Name. The name of the viticultural area described in this 
section is ``Western Connecticut Highlands.''
    (b) Approved map. The approved map for determining the boundaries of 
the ``Western Connecticut Highlands'' viticultural area is 1 U.S.G.S. 
1:125,000 series map. It is titled State of Connecticut, Compiled in 
1965, Edition of 1966.
    (c) Boundary description. The boundaries of the proposed Western 
Connecticut Highlands viticultural area are as follows:
    (1) The beginning point is where Connecticut Route 15 
(Merritt Parkway) meets the Connecticut-New York State line near 
Glenville, CT, in the Town of Greenwich.
    (2) The boundary goes approximately 80 miles northerly along the 
Connecticut-New York State line to the northwest corner of Connecticut 
at the Town of Salisbury (Connecticut-New York-Massachusetts State 
line);
    (3) The boundary proceeds approximately 32 miles east along the 
Connecticut-Massachusetts State line to the northeast border of the Town 
of Hartland;
    (4) The boundary runs approximately 5 miles south along the eastern 
boundary of the Town of Hartland to the northeast corner of the Town of 
Barkhamstead (Litchfield-Hartford County line);
    (5) The boundary then goes south approximately 25 miles along the 
Litchfield-Hartford County line to the southeast corner of the Town of 
Plymouth (Litchfield-Hartford-New Haven County line);
    (6) The boundary then travels approximately 7 miles west along the 
Litchfield-New Haven County line to Connecticut Route 8 at 
Waterville in the Town of Waterbury;
    (7) The boundary proceeds approximately 25 miles south along 
Connecticut Route 8 to the intersection of Connecticut Route 15 
(Merritt Parkway) near Nichols in the Town of Trumbull;
    (8) The boundary travels approximately 32 miles west along 
Connecticut

[[Page 191]]

Route 15 (Merritt Parkway) to the beginning point.

[T.D. ATF-267, 53 FR 3747, Feb. 9, 1988]



Sec. 9.123  Mt. Veeder.

    (a) Name. The name of the viticultural area described in this 
section is ``Mt. Veeder.''
    (b) Approved Maps. The appropriate maps for determining the 
boundaries of the ``Mt. Veeder'' viticultural area are three U.S.G.S. 
Quadrangle (7.5 Minute Series) maps. They are titled:
    (1) Napa, California (1951 (Photorevised (1980))
    (2) Rutherford, California (1951 (Photorevised (1968))
    (3) Sonoma, California (1951 (Photorevised (1980))
    (c) Boundaries.
    (1) Beginning at unnamed peak, elevation 1,820, on the common 
boundary between Napa County and Sonoma County in section 23, Township 7 
North, Range 6 West, Mount Diablo Base and Meridian on the Rutherford, 
Calif. U.S.G.S. map;
    (2) Thence south along common boundary between Napa County and 
Sonoma County to unnamed peak, elevation 1,135 feet on the Sonoma, 
Calif. U.S.G.S. map;
    (3) Thence continuing south along the ridge line approximately \1/2\ 
mile to unnamed peak, elevation 948 feet;
    (4) Thence due east in a straight line approximately \2/10\ mile to 
the 400 foot contour;
    (5) Thence following the 400 foot contour line north around Carneros 
Valley and then to the west of Congress Valley and Browns Valley on the 
Napa, Calif. U.S.G.S. map;
    (6) Thence paralleling Redwood Road to its intersection with the 
line dividing Range 5 West and Range 4 West, east of the unnamed 837 
foot peak;
    (7) Thence north along the line dividing Range 5 West and Range 4 
West approximately \4/10\ mile to the 400 foot contour;
    (8) Thence briefly southeast, then northwest along the 400 foot 
contour to the point where that contour intersects the northern border 
of Section 10, Township 6 North, Range 5 West immediately adjacent to 
Dry Creek on the Rutherford Calif. U.S.G.S. map;
    (9) Thence northwesterly along Dry Creek through Sections 3 and 4 of 
Township 6 North, Range 5 West, and Sections 32 and 31 of Township 7 
North, Range 5 West, to the fork of Dry Creek near the center of Section 
25 of Township 7 North, Range 6 West;
    (10) Continuing along the northern fork of Dry Creek through 
Sections 25 and 24 of Township 7 North, Range 6 West, to the point at 
which the main channel of Dry Creek ends and divides into three 
tributaries;
    (11) Thence following the middle tributary of Dry Creek through 
Sections 24 and 23 of Township 7 North, Range 6 West, to its source at 
the intersection with a trail indicated on the map;
    (12) Thence following a straight line west approximately \1/10\ mile 
to the top of unnamed peak, elevation 1,820, the beginning point.

[T.D. ATF-295, 55 FR 5844, Feb. 20, 1990, as amended by T.D. ATF-351, 58 
FR 65126, Dec. 13, 1993]



Sec. 9.124  Wild Horse Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Wild Horse Valley.''
    (b) Approved Map. The appropriate map for determining the boundaries 
of the ``Wild Horse Valley'' viticultural area is one U.S.G.S. 
Quadrangle (7.5 Minute Series) map. It is titled Mt. George, California 
(1951), photorevised 1968.
    (c) Boundaries. The boundaries of the Wild Horse Valley viticultural 
area (in Napa and Solano Counties) are as follows:
    (1) The beginning point is on the section line boundary between 
Section 33, Range 3 West, Township 6 North and Section 4, Range 3 West, 
Township 5 North, Mount Diablo Range and Meridian, marked with an 
elevation of 1,731 feet, which is a northwest corner of the boundary 
between Napa and Solano Counties.
    (2) From the beginning point, the boundary runs in a north-
northeasterly direction approximately .9 mile to the summit of an 
unnamed hill having a marked elevation of 1,804 feet;
    (3) Then northeasterly approximately .7 mile to the summit of an 
unnamed hill having a marked elevation of 1,824 feet;

[[Page 192]]

    (4) Then south-southeasterly approximately .6 mile to the summit of 
an unnamed hill having a marked elevation of 1,866 feet;
    (5) Then south-southeasterly approximately .5 mile to the summit of 
an unnamed hill having a marked elevation of 2,062 feet;
    (6) Then southerly approximately .7 mile to the summit of an unnamed 
hill having a marked elevation of 2,137 feet;
    (7) Then south-southeasterly approximately .4 mile to the summit of 
an unnamed hill having a marked elevation of 1,894 feet;
    (8) Then southerly approximately 2.3 miles to the midpoint of the 
section line boundary between Sections 15 and 22, Township 5 North, 
Range 3 West, Mount Diablo Range and Meridian;
    (9) Then southwesterly approximately 1.3 miles to the summit of an 
unnamed hill having a marked elevation of 1,593 feet;
    (10) Then west-northwesterly approximately 1.2 miles to the summit 
of an unnamed hill, on the Napa/Solano County boundary, having a marked 
elevation of 1,686 feet;
    (11) Then north-northeasterly approximately 1.5 miles to the summit 
of an unnamed hill having a marked elevation of 1,351 feet;
    (12) Then north-northeasterly approximately 1.2 miles to the summit 
of an unnamed hill having a marked elevation of 1,480 feet; and
    (13) Then north-northwesterly approximately 1.0 miles to the point 
of beginning.

[T.D. ATF-278, 53 FR 48247, Nov. 30, 1988]



Sec. 9.125  Fredericksburg in the Texas Hill Country.

    (a) Name. The name of the viticultural area described in this 
section is ``Fredericksburg in the Texas Hill Country.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the Fredericksburg in the Texas Hill Country viticultural 
area are six U.S.G.S. topographical maps of the 1:24,000 scale. They are 
titled:
    (1) Stonewall Quadrangle (1961);
    (2) Cain City Quadrangle (1963);
    (3) Fredericksburg East Quadrangle (1967, photorevised 1982);
    (4) Cave Creek School Quadrangle (1961);
    (5) Fredericksburg West Quadrangle (1967, photorevised 1982); and
    (6) Lady Bird Johnson Park Quadrangle (1964, photoinspected 1979).
    (c) Boundaries. The Fredericksburg in the Texas Hill Country 
viticultural area is located entirely in Gillespie County, Texas, in the 
central part of the State approximately 80 miles west of Austin. The 
beginning point is on the Stonewall Quadrangle map near Blumenthal at a 
point on U.S. Route 290 approximately .1 mile east of bench mark (BM) 
1504, at the junction of a light-duty road known locally as Jung Road.
    (1) From the beginning point, the boundary proceeds on Jung Road in 
a northwesterly direction across the Pedernales River.
    (2) Then northwesterly approximately 1 mile along Jung Road as it 
parallels the Pedernales River.
    (3) Then north along Jung Road approximately 3.9 miles to a point 
where Jung Road meets a medium-duty road known locally as Texas Ranch 
Road 2721.
    (4) Then westerly approximately .1 mile on Texas Ranch Road 2721 to 
a point where it meets a medium-duty road known locally as Texas Ranch 
Road 1631.
    (5) Then northeasterly along Texas Ranch Road 1631 approximately 1 
mile to a point where Texas Ranch Road 1631 crosses the 1,800 foot 
contour line.
    (6) Then northwesterly in a meandering manner along the 1,800-foot 
contour line to the point where the 1,800-foot contour line crosses 
State Route 16.
    (7) Then in a generally westerly direction along the 1,800-foot 
contour line to the point where the 1,800-foot contour line crosses 
State Route 965.
    (8) Then in a northwesterly and then generally a southeasterly 
direction along the 1,800-foot contour line to a point where the 1,800-
foot contour line goes just south of the Kordzik Hills approximately 1 
mile due east of the city of Fredericksburg.
    (9) Then continuing on the 1,800-foot contour line in a generally 
northwesterly, southerly, and again northwesterly direction to the point 
where the

[[Page 193]]

1,800-foot contour line crosses Loudon Road approximately 4 miles 
northwest of Fredericksburg.
    (10) Then continuing on the 1,800-foot contour line in a 
northwesterly, then generally a southeasterly, westerly and finally a 
southerly direction to a point where the 1,800-foot contour line crosses 
a light-duty road known locally as Hayden Ranch Road about 50 yards 
north of Texas Ranch Road 2093.
    (11) Then 50 yards south on Hayden Ranch Road to Texas Ranch Road 
2093 and then east on Texas Ranch Road 2093 approximately .15 mile to an 
unimproved, southbound, gravel and dirt county road known locally as 
Beverly Gold's Road.
    (12) Then approximately 2.6 miles south on Beverly Gold's Road to a 
point where it joins Texas State Route 16.
    (13) Then approximately 1.5 miles northeast on State Route 16 to a 
light-duty county road known locally as Bear Creek Road.
    (14) Then approximately 1 mile in a southeasterly, northeasterly, 
and then a southerly direction along Bear Creek Road to the point where 
the road crosses the 1,700-foot contour line.
    (15) Then in a generally easterly direction for approximately 10 
miles along the 1,700-foot contour line to a point where the 1,700-foot 
contour line crosses Texas Ranch Road 1376.
    (16) Then approximately 3.1 miles southeast along Texas Ranch Road 
1376 to a light-duty road at Luckenbach known locally both as Kunz-Klien 
Road and Luckenbach Road.
    (17) Then approximately 1.3 miles in a generally northeasterly and 
then an easterly direction along Luckenbach Road and continuing along 
Luckenbach Road in a northerly direction about 2.5 miles to the point 
where Luckenbach Road joins U.S. Route 290.
    (18) Then west approximately .2 mile on U.S. Route 290 to the 
intersection with Jung Road, the point of beginning.

[T.D. ATF-279, 53 FR 51541, Dec. 22, 1988]



Sec. 9.126  Santa Clara Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Santa Clara Valley.''
    (b) Approved Maps. The appropriate maps for determining the 
boundaries of the ``Santa Clara Valley'' viticultural area are 25 
U.S.G.S. Quadrangle (7.5 Minute Series) maps. They are titled:
    (1) Calaveras Reservoir, Calif., 1961 (photorevised 1980);
    (2) Castle Rock Ridge, Calif., 1955 (photorevised 1968), 
photoinspected 1973;
    (3) Chittenden, Calif., 1955 (photorevised 1980);
    (4) Cupertino, Calif., 1961 (photorevised 1980);
    (5) Gilroy, Calif., 1955 (photorevised 1981);
    (6) Gilroy Hot Springs, Calif., 1955 (photorevised 1971), 
photoinspected 1973;
    (7) Lick Observatory, Calif., 1955 (photorevised 1968), 
photoinspected 1973;
    (8) Loma Prieta, Calif., 1955 (photorevised 1968);
    (9) Los Gatos, Calif., 1953 (photorevised 1980);
    (10) Milpitas, Calif., 1961 (photorevised 1980);
    (11) Mindego Hill, Calif., 1961 (photorevised 1980);
    (12) Morgan Hill, Calif., 1955 (photorevised 1980);
    (13) Mt. Madonna, Calif., 1955 (photorevised 1980);
    (14) Mt. Sizer, Calif., 1955 (photorevised 1971), photoinspected 
1978;
    (15) Mountain View, Calif., 1961 (photorevised 1981);
    (16) Newark, Calif., 1959 (photorevised 1980);
    (17) Niles, Calif., 1961 (photorevised 1980);
    (18) Pacheco Peak, Calif., 1955 (photorevised 1971);
    (19) Palo Alto, Calif., 1961 (photorevised 1973);
    (20) San Felipe, Calif., 1955 (photorevised 1971);
    (21) San Jose East, Calif., 1961 (photorevised 1980);
    (22) San Jose West, Calif., 1961 (photorevised 1980);
    (23) Santa Teresa Hills, Calif., 1953 (photorevised 1980);
    (24) Three Sisters, Calif., 1954 (photorevised 1980);
    (25) Watsonville East, Calif., 1955 (photorevised 1980); and

[[Page 194]]

    (c) The boundaries of the proposed Santa Clara Valley viticultural 
area are as follows:
    (1) The beginning point is at the junction of Elephant Head Creek 
and Pacheco Creek (approx. .75 mile southwest of the Pacheco Ranger 
Station) on the Pacheco Peak, Calif. U.S.G.S. map.
    (2) From the beginning point the boundary moves in a northerly 
direction up Elephant Head Creek approx. 1.2 miles until it intersects 
the 600 foot elevation contour line;
    (3) Then it meanders in a northwesterly direction along the 600 foot 
contour line approx. 55 miles until it intersects Vargas Road in the 
northwest portion of Sec. 25, T4S/RlW on the Niles, Calif. U.S.G.S. map;
    (4) Then it travels in a northwesterly direction approx. .6 mile to 
the intersection of Morrison Canyon Road in the eastern portion of Sec. 
23, T4S/RlW;
    (5) Then it follows Morrison Canyon Road west approx. 1.5 miles to 
Mission Boulevard (Highway 238) at Sec. 22, T4S/RlW;
    (6) Then it moves northwest on Mission Boulevard (Highway 238) 
approx. .6 mile to the intersection of Mowry Avenue just past the 
Sanatorium at Sec. 22, T4S/RlW;
    (7) It then goes in a southwesterly direction on Mowry Avenue 
approx. 3.6 miles to the intersection of Nimitz Freeway (Highway 880) 
(depicted on the map as Route 17) at Sec. 5, T5S/RlW, on the Newark, 
Calif. U.S.G.S. map;
    (8) It then moves along the Nimitz Freeway (Highway 880) in a 
southeasterly direction for approx. 9 miles to the intersection of 
Calaveras Boulevard (Highway 237) at Milpitas on the Milpitas, Calif. 
U.S.G.S. map;
    (9) Then it follows Highway 237 in a westerly direction approx. 7.2 
miles to intersection of Bay Shore Freeway (Highway 101) at Moffett 
Field on the Mt. View, Calif. U.S.G.S. map;
    (10) Then in a northwest direction follow Bay Shore Freeway (Highway 
101) for approx. 6.5 miles to the intersection of the San Francisquito 
Creek (Santa Clara County/San Mateo County boundary) at Palo Alto T5S/
R2W, on the Palo Alto, Calif. U.S.G.S. map;
    (11) Then it heads west on San Francisquito Creek (Santa Clara 
County/San Mateo County boundary) approx. 7 miles until it converges 
with Los Trancos Creek (Santa Clara County/San Mateo County boundary) 
near Bench Mark 172, approx. 100 feet east of Alpine Road;
    (12) It travels south approx. 4 miles along Los Trancos Creek (Santa 
Clara County/San Mateo County boundary) until it intersects the 600 foot 
elevation contour line at El Corte De Madera, approx. .5 mile north of 
Trancos Woods on the Mindego Hill, Calif. U.S.G.S. map;
    (13) It moves along the 600 foot elevation contour line in a 
southeasterly direction approx. 10 miles to Regnart Road at Regnart 
Creek on the Cupertino, Calif. U.S.G.S. map;
    (14) It goes northeast along Regnart Road, approx. .7 mile to the 
400 foot elevation contour line (.3 mile southwest of Regnart School);
    (15) It travels along the 400 foot elevation contour line southeast 
approx. 1.4 miles to the north section line of Section 36, T7S/R2W at 
Blue Hills, CA;
    (16) The boundary goes east on the section line approx. .4 mile to 
Saratoga Sunnyvale Road (Highway 85);
    (17) It travels south on Saratoga Sunnyvale Road (Highway 85) 
approx. 1 mile to the south section line of Section 36, T7/8S R2W;
    (18) Then it goes west on the section line approx. .75 mile to the 
first intersection of the 600 foot elevation contour line;
    (19) It follows the 600 foot elevation contour line southeast 
approx. .75 mile to Pierce Road south of Calabazas Creek;
    (20) It then travels south on Pierce Road approx. .4 mile to the 
first intersection of the 800 foot elevation contour line;
    (21) Then it runs southeast approx. 28 miles on the 800 foot 
elevation contour line to the east section line of Sec. 25, T10S/R2E/R3E 
approx. .5 mile north of Little Arthur Creek on the Mt. Madonna, Calif. 
U.S.G.S. map;
    (22) Then it goes south on the section line approx. .5 mile to the 
800 foot elevation contour line approx. .2 mile south of Little Arthur 
Creek;
    (23) Then it goes southeast along the 800 foot elevation contour 
line approx. 2.7 miles to Hecker Pass Road (Highway 152) approx. 1.25 
miles east of

[[Page 195]]

Hecker Pass on the Watsonville East, Calif. U.S.G.S. map;
    (24) The boundary goes northeast on Hecker Pass Road (Highway 152) 
approx. .75 mile to the intersection of the 600 foot elevation contour 
line just west of Bodfish Creek;
    (25) It travels southeast along the 600 foot elevation contour line 
approx. 7.3 miles to the first intersection of the western section line 
of Sec. 30, T11S/R3E/R4E on the Chittenden, Calif. U.S.G.S. map;
    (26) Then it follows south along the section line approx. 1.9 miles 
to the south township line at Sec. 31, T11S/T12S, R3E/R4E;
    (27) It moves in an easterly direction along the township line 
approx. 12.4 miles to the intersection of T11S/T12S and R5E/R6E on the 
Three Sisters, Calif. U.S.G.S. map;
    (28) Then it goes north along R5E/R6E range line approx. 5.3 miles 
to Pacheco Creek on the Pacheco Creek, Calif. U.S.G.S. map;
    (29) Then it moves northeast along Pacheco Creek approx. .5 mile to 
Elephant Head Creek at the point of beginning.

[T.D. ATF-286, 54 FR 12606, Mar. 28, 1989]



Sec. 9.127  Cayuga Lake.

    (a) Name. The name of the viticultural area described in this 
section is ``Cayuga Lake.''
    (b) Approved maps. The appropriate map for determining the 
boundaries of the Cayuga Lake viticultural area is one U.S.G.S. map 
scaled 1:250,000, titled ``Elmira, New York; Pennsylvania,'' 1962 
(revised 1978).
    (c) Boundaries. The Cayuga Lake viticultural area is located within 
the counties of Seneca, Tompkins, and Cayuga, in the State of New York, 
within the Finger Lakes viticultural area. The boundaries are as 
follows:
    (1) Commencing at the intersection of State Route 90 with State 
Route 5 in Cayuga County, north of Cayuga Lake.
    (2) Then south along State Route 90 to a point approximately one 
mile past the intersection of State Route 90 with State Route 326.
    (3) Then south along the primary, all-weather, hard surface road, 
approximately \3/4\ mile, until it becomes State Route 90 again at Union 
Springs.
    (4) Then south/southeast along State Route 90 until it intersects 
the light-duty, all-weather, hard or improved surface road, 
approximately 1.5 miles west of King Ferry.
    (5) Then south along another light-duty, all-weather, hard or 
improved surface road, approximately 4 miles, until it intersects State 
Route 34B, just south of Lake Ridge.
    (6) Then follow State Route 34B in a generally southeast direction 
until it intersects State Route 34, at South Lansing.
    (7) Then south along State Route 34, until it meets State Route 13 
in Ithaca.
    (8) Then southwest along State Routes 34/13, approximately 1.5 
miles, until it intersects State Route 79, in Ithaca.
    (9) Then west along State Route 79, approximately \1/2\ mile, until 
it intersects State Route 96.
    (10) Then along State Route 96, in a generally northwest direction, 
until it intersects State Routes 414 and 96A in Ovid.
    (11) Then north along State Routes 96/414, until they divide, 
approximately 2.5 miles north of Ovid.
    (12) Then along State Route 414, in a generally northeast direction, 
until it meets U.S. Route 20 in the town of Seneca Falls.
    (13) Then along U.S. Route 20, in a northeast direction, until it 
intersects State Routes 318, 89, and 5.
    (14) Then along U.S. Route 20/State Route 5, in a northeast 
direction, to the beginning point, at the intersection with State Route 
90.

[T.D. ATF-269, 53 FR 9769, Mar. 25, 1988]



Sec. 9.129  Arroyo Grande Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Arroyo Grande Valley.''
    (b) Approved maps. The appropriate maps for determining the boundary 
of Arroyo Grande Valley viticultural area are four U.S.G.S. 
topographical maps of the 1:24,000 scale:
    (1) ``Arroyo Grande, NE, California,'' edition of 1965, photorevised 
1978.
    (2) ``Tar Spring Ridge, California,'' edition of 1967.
    (3) ``Nipomo, California,'' edition of 1965.

[[Page 196]]

    (4) ``Oceano, California,'' edition of 1965, photorevised 1979.
    (c) Boundary: The Arroyo Grande Valley viticultural area is located 
in San Luis Obispo County in the State of California. The boundary is as 
follows:
    (1) Beginning on the ``Arroyo Grande'' map at the point of 
intersection of State Route 227 and Corbit Canyon Road in Arroyo Grande 
Township, the boundary proceeds approximately 0.1 mile, in a 
northwesterly direction, along the roadway of State Route 227 to the 
point where State Route 227 intersects with Printz Road in Poorman 
Canyon in the Santa Manuela land grant;
    (2) Then northwesterly, approximately 1.5 miles, along Printz Road 
to its intersection with Noyes Road in the Santa Manuela land grant;
    (3) Then northerly, approximately 1.5 miles, along Noyes Road to its 
intersection with State Route 227 (at vertical control station ``BM 
452'') in the Santa Manuela land grant;
    (4) Then in a northeasterly direction in a straight line 
approximately 1.4 miles to the intersection of Corbit Canyon Road with 
an unnamed, unimproved road at Verde in the Santa Manuela land grant;
    (5) Then approximately 1.9 miles in a generally northeasterly 
direction, along the meanders of said unimproved road to its easternmost 
point, prior to the road turning back in a northwesterly direction to 
its eventual intersection with Biddle Ranch Road;
    (6) Then in a northwesterly direction approximately 1.13 miles in a 
straight line to the summit of an unnamed peak identified as having an 
elevation of 626 feet in the Santa Manuela land grant;
    (7) Then easterly, approximately 0.46 mile in a straight line, to 
the summit of an unnamed peak identified as having an elevation of 635 
feet, in the Santa Manuela land grant;
    (8) Then east northeasterly, approximately 0.27 mile in a straight 
line, to the summit of an unnamed peak identified as having an elevation 
of 799 feet, in the Santa Manuela land grant;
    (9) Then easterly, approximately 0.78 mile in a straight line, to 
the summit of an unnamed peak identified as having an elevation of 952 
feet, in the Santa Manuela land grant;
    (10) Then easterly, approximately 0.7 mile in a straight line, to 
the summit of an unnamed peak identified as having an elevation of 1,188 
feet, in the southwest corner of section 29, T. 31 S., R. 14 E.;
    (11) Then east southeasterly, approximately 0.9 mile in a straight 
line, to the point at which Upper Arroyo Grande Road crosses the 
spillway of Lopez Dam in section 32, T. 31 S., R. 14 E. (see ``Tar 
Spring Ridge'' map);
    (12) Then, in a generally easterly direction, approximately 3.64 
miles along Upper Arroyo Grande Road (under construction) to the point 
where the broken red line for the proposed location of said road 
diverges in a northerly direction from the light duty roadbed of said 
road in the Arroyo Grande land grant (north of section 35, T. 31 S., R. 
14 E.);
    (13) Then, in a generally northerly direction, approximately 2.5 
miles, along the broken red line for the proposed location of Upper 
Arroyo Grande Road to its point of intersection with an unnamed 
unimproved road (this intersection being 1.2 miles northwest of Ranchita 
Ranch) in the Arroyo Grande land grant;
    (14) From the point of intersection of the proposed location of 
Upper Arroyo Grande Road and the unnamed unimproved road, the boundary 
proceeds in a straight line, east northeasterly, approximately 1.8 
miles, to the summit of an unnamed peak identified as having an 
elevation of 1,182 feet, in the northwest corner of section 19, T. 31 
S., R. 15 E.;
    (15) Then southeasterly, approximately 1.8 miles in a straight line, 
to the summit of an unnamed peak identified as having an elevation of 
1,022 feet, in the northeast corner of section 29, T. 31 S., R. 15 E.;
    (16) Then west southwesterly, approximately 0.84 mile in a straight 
line, to the summit of an unnamed peak identified as having an elevation 
of 1,310 feet, in the northeast corner of section 30, T. 31 S., R. 15 
E.;
    (17) Then south southeasterly, approximately 1.46 miles in a 
straight line, to the summit of an unnamed peak identified as having an 
elevation of 1,261 feet, in section 32, T. 31 S., R. 15 E.;

[[Page 197]]

    (18) Then southeasterly, approximately 0.7 mile in a straight line, 
to the summit of an unnamed peak identified as having an elevation of 
1,436 feet, in the northwest corner of section 4, T. 32 S., R. 15 E.;
    (19) Then southwesterly, approximately 1.07 miles in a straight 
line, to the summit of an unnamed peak identified as having an elevation 
of 1,308 feet, in the Huasna land grant;
    (20) Then west northwesterly, approximately 1.50 miles in a straight 
line, to the summit of an unnamed peak identified as having an elevation 
of 1,070 feet, along the east border of section 1, T. 32 S., R. 14 E.;
    (21) Then south southeasterly, approximately 1.38 miles in a 
straight line, to the summit of an unnamed peak identified as having an 
elevation of 1,251 feet, in the Hausna land grant;
    (22) Then southwesterly, approximately 0.95 mile in a straight line, 
to the summit of an unnamed peak identified as having an elevation of 
1,458 feet, in the Santa Manuela land grant;
    (23) Then southeasterly, approximately 0.8 mile in a straight line, 
to the summit of an unnamed peak identified as having an elevation of 
1,377 feet, in the Huasna land grant;
    (24) Then southwesterly, approximately 1.4 miles in a straight line, 
to the summit of an unnamed peak identified as having an elevation of 
1,593 feet, in the Santa Manuela land grant (See ``Nipomo'' map);
    (25) Then southwesterly, approximately 1.1 miles in a straight line, 
to the jeep trail immediately north of the summit of an unnamed peak 
identified as having an elevation of 1,549 feet, just north of section 
35, T. 32 S., R. 14 E.;
    (26) Then north northwesterly, approximately 2.73 miles along the 
jeep trail on Newsom Ridge to the point of intersection of said jeep 
trail and an unnamed unimproved road (immediately north of section 28, 
T. 32 S., R. 14 E.);
    (27) Then southerly, approximately 1.63 miles along said unimproved 
road to its intersection with Upper Los Berros No. 2 Road in section 33, 
T. 32 S., R. 14 E.;
    (28) Then southwesterly, approximately 3.27 miles along the stream 
in Los Berros Canyon (of which approximately 2.0 miles are along Upper 
Los Berros No. 2 Road) to the point at which U.S. Highway 101 crosses 
said stream in section 35, T. 12 N., R. 35 W. (See ``Oceano'' map);
    (29) Then across U.S. Highway 101 and continuing in a southwesterly 
direction approximately 0.1 mile to Los Berros Arroyo Grande Road;
    (30) Then following Los Berros Arroyo Grande Road in generally a 
northwesterly direction approximately 4 miles until it intersects with 
Valley Road;
    (31) Then following Valley Road in generally a northerly direction 
approximately 1.2 miles until it intersects with U.S. Highway 101;
    (32) Then in a northwesterly direction along U.S. Highway 101 
approximately .35 mile until it intersects with State Highway 227;
    (33) Then in a northeasterly and then a northerly direction along 
State Highway 227 approximately 1.4 miles to the point of beginning.

[T.D. ATF-291, 55 FR 287, Jan. 4, 1990]



Sec. 9.130  San Ysidro District.

    (a) Name. The name of the viticultural area described in this 
section is ``San Ysidro District.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the San Ysidro District viticultural area are four 
U.S.G.S. Quadrangle (7.5 minute series) maps. They are titled:
    (1) Gilroy, Calif., 1955 (photorevised 1981);
    (2) Chittenden, Calif., 1955 (photorevised 1980);
    (3) San Felipe, Calif., 1955 (photorevised 1971);
    (4) Gilroy Hot Springs, Calif., 1955 (photorevised 1971, 
photoinspected 1978.)
    (c) Boundary. The San Ysidro District viticultural area is located 
in Santa Clara County, California, within the Santa Clara Valley 
viticultural area. The boundary is as follows:
    (1) The beginning point is the intersection of California State 
Highway 152 and Ferguson Road with an un-named wash, or intermittent 
stream, on the Gilroy, Calif., U.S.G.S. map;
    (2) From the beginning point, the boundary follows the wash 
northeast as

[[Page 198]]

it runs co-incident with the old Grant boundary for approximately 3,800 
feet;
    (3) The boundary then follows the wash when it diverges from the old 
Grant boundary and continues approximately 2,300 feet in a northeasterly 
direction, crosses and recrosses Crews Road, then follows the wash 
southeast until the wash turns northeast in section 35, T.10S., R.4E., 
on the Gilroy Hot Springs, Calif., map;
    (4) The boundary then diverges from the wash, continuing in a 
straight line in a southeasterly direction, across an unimproved road, 
until it intersects with the 600 foot contour line.
    (5) The boundary then proceeds in a straight line at about the 600 
foot elevation in a southeasterly direction until it meets the minor 
northerly drainage of the San Ysidro Creek;
    (6) The boundary then follows the minor northerly drainage of San 
Ysidro Creek southeast for approximately 2,000 feet to the seasonal pond 
adjacent to Canada Road;
    (7) From the seasonal pond, the boundary follows the southerly 
drainage of San Ysidro Creek for about 1,300 feet until it reaches the 
southwest corner of section 36, T.10S., R.4E.;
    (8) The boundary then continues in a straight line in a southerly 
direction across Canada Road for approximately 900 feet until it 
intersects with the 600 foot contour line;
    (9) The boundary follows the 600 foot contour line for approximately 
6,000 feet in a generally southeasterly direction, diverges from the 
contour line and continues southeast another 1,200 feet until it meets 
an unimproved road near the north end of a seasonal pond on the San 
Felipe, Calif., U.S.G.S. map;
    (10) The boundary follows the unimproved road to Bench Mark 160 at 
Highway 152.
    (11) The boundary then follows Highway 152 in a northwesterly 
direction across the northeast corner of the Chittenden, Calif., 
U.S.G.S. map, and back to the beginning point at the junction of 
Ferguson Road and Highway 152.

[T.D. ATF-305, 55 FR 47749, Nov. 15, 1990]



Sec. 9.131  Mt. Harlan.

    (a) Name. The name of the viticultural area described in this 
section is ``Mt. Harlan.''
    (b) Approved Maps. The appropriate maps for determining the 
boundaries of the ``Mt. Harlan'' viticultural area are two U.S.G.S. 
Quadrangle (7.5 Minute Series) maps. They are titled:
    (1) Mt. Harlan, California (Photorevised (1984)).
    (2) Paicines, California (Photorevised (1984)).
    (c) Boundaries. (1) The point of beginning is the unnamed 
3,063[foot] peak on the county line between San Benito and Monterey 
Counties in Township 14 S., Range 5 E., Section 34 of the ``Mt. 
Harlan,'' California Quadrangle map.
    (2) From the point of beginning on the Mt. Harlan Quadrangle map 
proceed in a generally northwesterly direction along the county line 
through Sections 34 and 33, briefly into Section 28 and back through 
Section 33, and then through Sections 32, 29, and 30 all in Township 14 
S., Range 5 E., to the point at which the county line intersects the 
line between Sections 30 and 19 of said Township and Range.
    (3) Thence proceed in a straight line northeast approximately 750 
feet to the commencement of the westernmost stream leading into 
Pescadero Creek. The stream commences in the southwest corner of Section 
19 in Township 14 S., Range 5 E.
    (4) Thence following the stream in a northeasterly direction to its 
intersection with the 1,800-foot contour line near the center of Section 
19 in Township 14 S., Range 5 E.
    (5) Thence following the 1,800[foot] contour line in a southeasterly 
and then northeasterly direction through Sections 19, 20, 17, 16, 15, 
14, then through the area north of Section 14, then southerly through 
Section 13 on the Mt. Harlan Quadrangle map and continuing on the 
``Paicines,'' California Quadrangle map to the point at which the 1800-
foot contour line intersects the line between Sections 13 and 24 of 
Township 14 S., Range 5 E.
    (6) Thence along the 1,800[foot] contour line through Section 24, 
back up through Section 13, and then in a southerly direction through 
Sections

[[Page 199]]

18, 19, and 30 (all on the Paicines Quadrangle map), then westerly 
through Section 25 on the Paicines Quadrangle map and continuing on the 
Mt. Harlan Quadrangle map, and then through Section 26 to the point of 
intersection of said 1,800[foot] contour and Thompson Creek near the 
center of Section 26 in Township 14 S., Range 5 E., on the Mt. Harlan 
Quadrangle map.
    (7) Thence southwesterly along Thompson Creek to its commencement in 
the northwest corner of Section 34, Township 14 S., Range 5 E.
    (8) Thence in a straight line to the beginning point.

[T.D. ATF-304, 55 FR 47747, Nov. 15, 1990]



Sec. 9.132  Rogue Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Rouge Valley.''
    (b) Approved map. The appropriate map for determining the boundaries 
of the Rogue Valley viticultural area is one U.S.G.S. map titled 
``Medford,'' scale 1:250,000 (1955, revised 1976).
    (c) Boundaries. The Rogue Valey viticultural area is located 
entirely within Jackson and Josephine Counties in southwestern Oregon. 
The boundaries are as follows:
    (1) Beginning at the point of intersection of Interstate 5 and the 
Josephine County/Douglas County line approximately 20 miles north of 
Grants Pass, the boundary proceeds southerly and southwesterly along 
U.S. Interstate 5 to and including the town of Wolf Creek;
    (2) Then westerly and southerly out of the town of Wolf Creek along 
the Southern Pacific Railway Line to and including the town of Hugo;
    (3) Then southwesterly along the secondary, hard surface road known 
as Hugo Road to the point where the Hugo Road crosses Jumpoff Joe Creek;
    (4) Then westerly and down stream along Jumpoff Joe Creek to the 
intersection of Jumpoff Joe Creek and the Rogue River;
    (5) Then northwesterly and down stream along the Rogue River to the 
first point where the Wild and Scenic Rogue River designated area 
touches the easterly boundary of the Siskiyou National Forest just south 
of Galice;
    (6) Then in a generally southwesterly direction (with many 
diversions) along the easterly border of the Siskiyou National Forest to 
the 42 degree 0 minute latitude line;
    (7) Then easterly along the 42 degree 0 minute latitude line to the 
point where the Siskiyou National Forest again crosses into Oregon 
approximately 1 mile east of U.S. Highway 199;
    (8) Then in a generally northeasterly direction and then a 
southeasterly direction (with many diversions) along the northern 
boundary of the Siskiyou National Forest to the point where the Siskiyou 
National Forest touches the Rogue River National Forest at Big Sugarloaf 
Peak;
    (9) Then in a generally easterly direction (with many diversions) 
along the northern border of the Rogue River National Forest to the 
point where the Rogue River National Forest intersects with Slide Creek 
approximately 6 miles southeast of Ashland;
    (10) Then southeasterly and northeasterly along Slide Creek to the 
point where it intersects State Highway 273;
    (11) Then northwesterly along State Highway 273 to the point where 
it intersects State Highway 66;
    (12) Then in an easterly direction approximately 5 miles along State 
Highway 66 to the east line of Township 39 South, Range 2 East (T39S, 
R2E);
    (13) Then following the east line of T39S, R2E, in a northerly 
direction to the northeast corner of T39S, R2E;
    (14) Then westerly approximately 5 miles along the north line of 
T39S, R2E, to the 2,600 foot contour line;
    (15) Then in a northerly direction following the 2,600 foot contour 
line across Walker Creek and then in a southwesterly direction to the 
point where the 2,600 foot contour line touches the east line of T38S, 
R1E;
    (16) Then northerly along the east line of T38S, R1E, to the 
northeast corner of T38S, R1E;
    (17) Then westerly along the north line of T38S, R1E, to the 
northwest corner of T38S, R1E;
    (18) Then northerly along the west line of T37S, R1E, to the 
northwest corner of T37S, R1E.
    (19) Then easterly along the north lines of T37S, R1E, and T37S, 
R2E, to the southeast corner of T36S, R2E;

[[Page 200]]

    (20) Then northerly along the east line of T36S, R2E, to the 
northeast corner of T36S, R2E;
    (21) Then westerly along the north line of T36S, R2E, to the 
northwest corner of T36S, R2E;
    (22) Then northerly along the east line of T35S, R1E, to the 
northeast corner of T35S, R1E;
    (23) Then westerly along the north line of T35S, R1E, to the 
northwest corner of T35S, R1E;
    (24) Then northerly along the east line of T34S, R1W, to the 
northeast corner of T34S, R1W;
    (25) Then westerly along the north lines of T34S, R1E; T34S, R2W; 
T34S, R3W; T34S, R4W; and T34S, R5W, to the northwest corner of T34S, 
R5W;
    (26) Then northerly along the west line of T33S, R5W, to the 
Josephine County/Douglas County line;
    (27) Then westerly along the Josephine County/Douglas County line to 
U.S. Interstate 5, the point of beginning.

[T.D. ATF-310, 56 FR 2435, Jan. 23, 1991]



Sec. 9.133  Rutherford.

    (a) Name. The name of the viticultural area described in this 
section is ``Rutherford.''
    (b) Approved maps. The appropriate maps for determining the boundary 
of the Rutherford viticultural area are two U.S.G.S. topographical maps 
of the 1:24,000 scale:
    (1) ``Yountville Quadrangle, California,'' edition of 1951, 
photorevised 1968.
    (2) ``Rutherford Quadrangle, California,'' edition of 1951, 
photorevised 1968, photoinspected 1973.
    (c) Boundary. The Rutherford viticultural area is located in Napa 
County in the State of California. The boundary is as follows:
    (1) Beginning on the Yountville quadrangle map at the point where 
the county road known as the Silverado Trail intersects Skellenger Lane, 
just outside the southwest corner of Section 12, Township 7 North (T.7 
N.), Range 5 West (R.5 W.), the boundary proceeds in a southwesterly 
direction in a straight line approximately 1.7 miles along Skellenger 
Lane, past its intersection with Conn Creek Road, to the point of 
intersection with the main channel of the Napa River (on the 
``Rutherford'' map);
    (2) Then south along the center of the river bed approximately .4 
miles to the point where an unnamed stream drains into the Napa River 
from the west;
    (3) Then along the unnamed stream in a generally northwesterly 
direction to its intersection with the west track of the Southern 
Pacific Railroad Track;
    (4) Then southeasterly along said railroad track 1,650 feet to a 
point which is approximately 435 feet north of the centerline of the 
entry road to Robert Mondavi Winery (shown on the map) to the southeast 
corner of Assessor's Parcel Number 27-250-14;
    (5) Thence southwesterly S 55 deg.06[min]28[sec] W for 3,869 feet 
along the common boundary between Assessor's Parcel Numbers 27-250-14 
and 27-280-50/51 to the southwest corner of Assessor's Parcel Number 27-
250-14;
    (6) Thence northwesterly N 40 deg.31[min]42[sec] W for 750 feet 
along the westerly property line of Assessor's Parcel Number 27-250-14;
    (7) Thence southwesterly S 51 deg.00[min] W in a straight line to 
the 500-foot contour line of the Mayacamas Range in the northwestern 
corner of Section 28, T.7 N., R.5 W.;
    (8) Then proceeding along the 500-foot contour line in a generally 
northwesterly direction in T.7 N., R.5 W. through Sections 21, 20, 17, 
18, 17, and 18 to the northwest portion of Section 7 where the 500-foot 
contour line intersects a southwestward straight line extension of the 
light-duty road known as Inglewood Avenue;
    (9) Thence in a straight line in a northeasterly direction along 
this extension of Inglewood Avenue to its intersection with the north 
fork of Bale Slough;
    (10) Thence in a southeasterly direction along the north fork of 
Bale Slough approximately 2,750 feet to its intersection with the end of 
the county road shown on the map as Zinfandel Avenue, known locally as 
Zinfandel Lane, near the 201-foot elevation marker;
    (11) Then in a northeasterly direction along Zinfandel Avenue 
(Zinfandel Lane) approximately 2.12 miles to the intersection of that 
road and Silverado

[[Page 201]]

Trail, then continuing northeasterly in a straight line to the 380-foot 
contour line;
    (12) Then following the 380-foot contour line southeasterly through 
Section 33 to the western border of Section 34, T.8 N., R.5 W., then 
following that section line north to the 500-foot contour line;
    (13) Then following the 500-foot contour line southeasterly to the 
western border of Section 2, T.7 N., R.5 W., then south along that 
section line past Conn Creek to its intersection with the 500-foot 
contour line northwest of the unnamed 832-foot peak;
    (14) Then continuing in a westerly direction and then a generally 
southeasterly direction along the 500-foot contour line through Sections 
3, 2, 11 and 12 to the intersection of that contour line with the 
southern border of Section 12 (on Yountville map);
    (15) Then proceeding in a straight line in a westerly direction to 
the intersection of the Silverado Trail with Skellenger Lane, the point 
of beginning.

[T.D. ATF-342, 58 FR 35876, July 2, 1993]



Sec. 9.134  Oakville.

    (a) Name. The name of the viticultural area described in this 
section is ``Oakville.''
    (b) Approved maps. The appropriate maps for determining the boundary 
of the Oakville viticultural area are two U.S.G.S. 7.5 minute series 
topographical maps of the 1:24,000 scale:
    (1) ``Yountville Quadrangle, California,'' edition of 1951, 
photorevised 1968.
    (2) ``Rutherford Quadrangle, California,'' edition of 1951, 
photorevised 1968, photoinspected 1973.
    (c) Boundary. The Oakville viticultural area is located in Napa 
County in the State of California. The boundary is as follows:
    (1) Beginning on the Yountville quadrangle map at the point where 
the county road known as the Silverado Trail intersects Skellenger Lane, 
just outside the southwest corner of Section 12, Township 7 North (T.7 
N.), Range 5 West (R.5 W.), the boundary proceeds in a southwesterly 
direction in a straight line approximately 1.7 miles along Skellenger 
Lane, past its intersection with Conn Creek Road, to the point of 
intersection with the main channel of the Napa River (on the Rutherford 
quadrangle map);
    (2) Then south along the center of the river bed approximately .4 
miles to the point where an unnamed stream drains into the Napa River 
from the west;
    (3) Then along the unnamed stream in a generally northwesterly 
direction to its intersection with the west track of the Southern 
Pacific Railroad Track;
    (4) Then southeasterly along said railroad track 1,650 feet to a 
point which is approximately 435 feet north of the centerline of the 
entry road to Robert Mondavi Winery (shown on the map) to the southeast 
corner of Assessor's Parcel Number 27-250-14;
    (5) Thence southwesterly S 55 deg.06[min]28[sec] W for 3,869 feet 
along the common boundary between Assessor's Parcel Numbers 27-250-14 
and 27-280-50/51 to the southwest corner of Assessor's Parcel Number 27-
250-14;
    (6) Thence northwesterly N 40 deg.31[min]42[sec] W for 750 feet 
along the westerly property line of Assessor's Parcel Number 27-250-14;
    (7) Thence southwesterly S 51 deg.00[min] W in a straight line to 
the 500-foot contour line of the Mayacamas Range in the northwestern 
corner of Section 28, T.7 N., R.5 W.;
    (8) Then proceeding along the 500-foot contour line in a generally 
southeasterly direction through Sections 28, 29, 20, 29, 28, 29, 28, 33 
and 34 of T.7 N., R.5 W. and Section 3 of T.6 N., R.5 W. to its 
intersection with the unnamed stream known locally as Hopper Creek near 
the middle of Section 3;
    (9) Then along the unnamed stream (Hopper Creek) southeasterly and, 
at the fork in Section 3, northeasterly along the stream to the point 
where the stream intersects with the unnamed dirt road in the northwest 
corner of Section 2, T.6 N., R.5 W;
    (10) Then proceed in a straight line to the light duty road to the 
immediate northeast in Section 2, then along the light duty road in a 
northeasterly direction to the point at which the road turns 90 degrees 
to the left;
    (11) Then proceed along the light duty road 625 feet, then proceed 
northeasterly (N 40 deg.43[min] E) in a straight line

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1,350 feet, along the northern property line of Assessor's Parcel Number 
27-380-08 (not shown on the map), to State Highway 29, then continuing 
in a straight line approximately .1 mile to the peak of the 320+ foot 
hill along the western edge of the Yountville Hills;
    (12) Then proceed due east to the second 300-foot contour line, then 
follow that contour line around the Yountville Hills to the north to the 
point at which the 300-foot contour line exits the Rutherford quadrangle 
map for the second time;
    (13) Then proceed (on the Yountville quadrangle map) in a straight 
line in a northeasterly direction approximately N 34 deg.30[min] E 
approximately 1,000 feet to the 90 degree bend in the unimproved dirt 
road shown on the map, then along that road, which coincides with a 
fence line (not shown on the map) to the intersection of Conn Creek and 
Rector Creek;
    (14) Then along Rector Creek to the northeast past the Silverado 
Trail to the Rector Reservoir spillway entrance, then proceed due north 
along the spillway of Rector Reservoir, then east and northeast along 
the shoreline of Rector Reservoir to the point where the first unnamed 
stream enters the Reservoir;
    (15) Thence follow the unnamed stream north and northeast to where 
it intersects an unimproved dirt road at the 1006-foot benchmark;
    (16) Then proceed in a straight line approximately .6 mile due west 
to the intersection of an unnamed stream, then follow said stream 
downslope to the 500-foot contour line, and along that contour line 
northwesterly through sections 18 and 13 to the intersection of the 
contour line with the southern border of Section 12 in T.7 N, R.5 W.;
    (17) Then proceed in a straight line in a westerly direction to the 
intersection of Skellenger Lane with the Silverado Trail, the point of 
beginning.

[T.D. ATF-343, 58 FR 35884, July 2, 1993]



Sec. 9.135  Virginia's Eastern Shore.

    (a) Name. The name of the viticultural area described in this 
section is ``Virginia's Eastern Shore.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the ``Virginia's Eastern Shore'' viticultural area are 3 
U.S.G.S. Quadrangle (1:250,000 Series) maps. They are titled:
    (1) Eastville, VA.; N.C.; MD., 1946 (revised 1969).
    (2) Salisbury, MD.; DEL.; N.J.; VA., 1946 (revised 1969).
    (3) Richmond VA.; MD., 1973.
    (c) Boundary. The Virginia's Eastern Shore viticultural area is 
located in Accomack and Northampton counties, Virginia. The boundary is 
as follows:
    (1) The beginning point is the intersection of the Virginia/Maryland 
border and Chincoteague Bay, near Greenbackville on the Salisbury, MD., 
U.S.G.S. map;
    (2) From the beginning point, the boundary follows the coastline in 
a southwesterly direction. Where there are marshes indicated on the 
U.S.G.S. maps, the boundry is the inland side of these marshes;
    (3) When the boundary reaches the southernmost point of the 
peninsula, on the Eastville, VA., U.S.G.S. map, the boundary turns and 
proceeds in a northwesterly direction, again following the coastline 
around Cherrystone Inlet on the Richmond, VA., U.S.G.S. map;
    (4) The boundary continues to follow the coastline and the inland 
side of any marshes indicated on the U.S.G.S. maps in a northeasterly 
direction, until it reaches the Virginia/Maryland border on the 
Eastville, VA., U.S.G.S. map;
    (5) The boundary then follows the Virginia/Maryland border back to 
the beginning point at Chincoteague Bay on the Salisbury, MD., U.S.G.S. 
map.

[T.D. ATF-309, 56 FR 24, Jan. 2, 1991]



Sec. 9.136  Texas Hill Country.

    (a) Name. The name of the viticultural area described in this 
section is ``Texas Hill Country.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the ``Texas Hill Country'' viticultural area are 7 
U.S.G.S. (scale 1:250,000) maps. They are titled:
    (1) Brownwood, Texas, 1954 (revised 1974);
    (2) Sonora, Texas, 1954 (revised 1978);
    (3) Llano, Texas, 1954 (revised 1975);
    (4) Austin, Texas, 1954 (revised 1974);

[[Page 203]]

    (5) Del Rio, Texas, 1958 (revised 1969);
    (6) San Antonio, Texas, 1954 (revised 1980);
    (7) Seguin, Texas, 1953 (revised 1975).
    (c) Boundary. The Texas Hill Country viticultural area is located in 
portions of McCulloch, San Saba, Lampasas, Burnet, Travis, Williamson, 
Llano, Mason, Menard, Kimble, Gillespie, Blanco, Hays, Kendall, Kerr, 
Edwards, Real, Bandera, Bexar, Comal, Guadalupe, Medina, and Uvalde 
counties, in the State of Texas. The boundary is as follows:
    (1) The beginning point is the intersection of Interstate Highway 35 
and State highway 29 to the north of the city of Austin, on the Austin 
Texas, U.S.G.S. map;
    (2) From the beginning point, the boundary follows State highway 29 
in a west-northwesterly direction to the intersection with U.S. Highway 
183;
    (3) The boundary then follows U.S. Highway 183 in a northwesterly 
direction to the top of the Austin map and across the northeast corner 
of the Llano, Texas, U.S.G.S. map, to the intersecton with State Highway 
190 in Lometa, on the Brownwood, Texas, U.S.G.S. map;
    (4) The boundary then follows State Highway 190 in a southwesterly 
direction through San Saba and Brady on the Brownwood map to the 
intersection of U.S. Highway 83 at Menard, on the Llano, Texas, U.S.G.S. 
map;
    (5) The boundary follows U.S. highway 83 in a southerly direction to 
the town of Junction, where it meets U.S. Highway 377 (Llano map);
    (6) The boundary then follows U.S. Highway 377 southwest to the town 
of Rocksprings, on the Sonora, Texas, U.S.G.S. map, where it meets State 
Highway 55;
    (7) The boundary then follows State Highway 55 in a southeasterly 
direction across the southeast portion of the Del Rio, Texas, U.S.G.S. 
map, and continues to the town of Uvalde, on the San Antonio, Texas, 
U.S.G.S. map, where it meets U.S. Highway 83;
    (8) The boundary then follows U.S. Highway 83 south for 
approximately 2 miles, until it meets U.S. Highway 90;
    (9) The boundary then follows U.S. Highway 90 east across the San 
Antonio map to its intersection with Loop 410 in the city of San 
Antonio;
    (10) The boundary then follows Loop 410 to the west of San Antonio, 
until it meets Interstate Highway 35;
    (11) The boundary then follows Interstate Highway 35 in a 
northeasterly direction across the San Antonio map and then across the 
northwest corner of the Seguin, Texas, U.S.G.S. map until it reaches the 
beginning point at the intersection with State highway 29 on the Austin, 
Texas, U.S.G.S. map.

[T.D. ATF-318, 56 FR 60923, Nov. 29, 1991, as amended by T.D. ATF-344, 
58 FR 40354, July 28, 1993]



Sec. 9.137  Grand Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Grand Valley.''
    (b) Approved maps. The appropriate maps for determining the boundary 
of the Grand Valley viticultural area are six U.S.G.S. (7.5 minute 
series) topographical maps of the 1:24,000 scale:
    (1) ``Palisade Quadrangle, Colorado,'' edition of 1962.
    (2) ``Clifton Quadrangle, Colorado,'' edition of 1962, photorevised 
1973.
    (3) ``Grand Junction Quadrangle, Colorado,'' edition of 1962, 
photorevised 1973.
    (4) ``Colorado National Monument Quadrangle, Colorado,'' edition of 
1962, photorevised 1973.
    (5) ``Fruita Quadrangle, Colorado,'' edition of 1962, photorevised 
1973.
    (6) ``Corcoran Point Quadrangle, Colorado,'' edition of 1962.
    (c) Boundary. The Grand Valley viticultural area is located entirely 
within Mesa County, Colorado, in the western part of the State. The 
boundary is as follows:
    (1) The beginning point is located on the Palisade quadrangle map at 
a point northeast of the city of Palisade where Interstate 70 crosses 
the Colorado River and intersects with U.S. Highways 6 and 24, adjacent 
to and immediately west of the Orchard Mesa Canal Aqueduct;
    (2) From the beginning point, the boundary proceeds due east to the 
adjacent Orchard Mesa Canal Aqueduct and then in a southerly direction 
along the Orchard Mesa Canal Aqueduct to an unnamed creek in the western 
part of

[[Page 204]]

section 11, Township 11 South, Range 98 West (T. 11 S., R. 98 W.);
    (3) Thence in a southeasterly direction along the unnamed creek to 
its intersection with the 5000-foot contour line in the northeast corner 
of section 1, T. 1 S., R. 2 E.;
    (4) Thence in a northwesterly and then a southerly direction along 
the 5000-foot contour line to its intersection with Watson Creek in 
section 12, T. 1 S., R. 2 E.;
    (5) Thence in a southeasterly direction along Watson Creek to its 
intersection with the electrical power lines in the southern part of 
section 12, T. 1 S., R. 2 E.;
    (6) Thence in a southwesterly direction along the electrical power 
lines along the northern slope of Horse Mountain to that point where the 
power lines intersect with the Jeep Trail in the central part of section 
15, T. 1 S., R. 2 E.;
    (7) Thence in a northwesterly direction along the Jeep Trail to its 
intersection with Orchard Mesa Canal No. 2 on the western border of 
section 10, T. 1 S., R. 2 E.;
    (8) Thence in a generally southwesterly direction along Orchard Mesa 
Canal No. 2 through the Clifton quadrangle map to the Canal's junction 
with the Gunnison River on the Grand Junction quadrangle map (western 
part of section 31, T. 1 S., R. 1 E.);
    (9) Thence in a generally northwesterly direction along the Gunnison 
River to its junction with the Colorado River in section 22, T. 1 S., R. 
1 W.;
    (10) Thence continuing in a northwesterly direction along the 
Colorado River to the bridge where County Road 340 crosses the river 
(Section 15, T. 1 S., R. 1 W.);
    (11) Thence in a southwesterly direction along County Road 340 
approximately .2 mile to its intersection with a secondary highway, hard 
surface road, known locally as Monument Road;
    (12) Thence in a southwesterly direction along Monument Road to the 
boundary of the Colorado National Monument, located on the Colorado 
National Monument quadrangle map (section 30, T. 1 S., R. 1 W.);
    (13) Thence in a generally northwesterly direction along the 
boundary of the Colorado National Monument to its intersection with 
County Road 340 (known locally as Broadway) on the northern border of 
section 32, T. 1 N., R. 2 W.;
    (14) Thence in a generally northerly direction along County Road 340 
to the city of Fruita where County Road 340 (known locally as Cherry 
Street) intersects K Road on the Fruita quadrangle map;
    (15) Thence due east on K Road to the northeast corner of section 
17, T. 1 N., R. 1 W., on the Corcoran Point quadrangle map, then 
extending in the same direction in a straight line along the northern 
boundary of section 16, T. 1 N., R. 1 W. to the intersection with the 
Government Highline Canal;
    (16) Thence in a southeasterly direction along the Government 
Highline Canal to its intersection with U.S. Interstate 70 on the Grand 
Junction quadrangle map;
    (17) Thence in an easterly direction along U.S. Interstate 70 
through the Clifton quadrangle map to where Interstate 70 crosses the 
Colorado River and intersects with U.S. Highways 6 and 24 on the 
Palisade quadrangle map, the point of beginning.

[T.D. ATF-317, 56 FR 59216, Nov. 25, 1991]



Sec. 9.138  Benmore Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Benmore Valley.''
    (b) Approved Maps. The appropriate maps for determining the 
boundaries of the Benmore Valley viticultural area are two U.S.G.S. 
maps. They are entitled:
    (1) ``Hopland, CA,'' 7.5 Minute Series, edition of 1960, 
(photoinspected 1975); and
    (2) ``Purdys Gardens, CA,'' 7.5 Minute Series, edition of 1958, 
(photoinspected 1975).
    (c) Boundaries. The Benmore Valley viticultural area is located in 
the southwest corner of Lake County, California. It lies entirely within 
the North Coast viticultural area. The beginning point is an unnamed 
peak of 2788 feet elevation found in the southeast portion of section 
35, T. 14 N., R. 11 W., on the ``Purdys Gardens, CA'' U.S.G.S. map:

[[Page 205]]

    (1) Then southwest in a straight line to the point where an unnamed 
unimproved road crosses the south section line of section 35, T. 14 N., 
R. 11 W., west of Benmore Creek;
    (2) Then following the unnamed unimproved road south to the 
intersection with the boundary between Lake and Mendocino Counties;
    (3) Then following the county boundary between Lake and Mendocino 
Counties east and south to the intersection with the 2800 foot contour 
line;
    (4) Then following the 2800 foot contour line in a northerly and 
then southernly direction to its intersection with the boundary between 
Lake and Mendocino Counties on the southern edge of section 2, T. 13 N., 
R. 11 W;
    (5) Then following the boundary between Lake and Mendocino Counties 
east to the point of intersection of sections 1, 2, 11, and 12, T. 13 
N., R. 11 W;
    (6) Then southeasterly in a straight line to an unnamed peak of 2769 
feet elevation in the center of section 12, T. 13 N., R. 11 W;
    (7) Then south in a straight line to the point where the boundary 
between Lake and Mendocino Counties changes from an east-west direction 
to a north-south direction;
    (8) Then in a straight line in an easterly direction to an unnamed 
peak of 2883 feet elevation in the southwestern portion of section 5, T. 
13 N., R. 10 W;
    (9) Then northeast in a straight line to the easternmost peak of an 
unnamed ridge with four peaks in the center of section 5, T. 13 N., R. 
10 W;
    (10) Then northerly in a straight line to an unnamed peak of 2647 
feet elevation near the north section line of section 5, T. 13 N., R. 10 
W;
    (11) Then westerly in a straight line to the point of intersection 
between section 5, T. 13 N., R 10 W., section 31, T. 14 N., R. 10 W., 
and section 1, T. 13 N., R. 11 W;
    (12) Then northwest in a straight line to an unnamed peak of 2904 
feet elevation in the north portion of section 1, T. 13 N., R. 11 W;
    (13) Then northwest in a straight line to an unnamed peak of 2788 
feet elevation, the point of beginning.

[T.D. ATF-315, 56 FR 52191, Oct. 18, 1991]



Sec. 9.139  Santa Lucia Highlands.

    (a) Name. The name of the viticultural area described in this 
section is ``Santa Lucia Highlands.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the ``Santa Lucia Highlands'' viticultural area are 7 
U.S.G.S. Quadrangle 7.5 minute series topographic maps. They are titled:
    (1) Chualar, Calif., 1947 (photorevised 1984)
    (2) Gonzales, Calif., 1955 (photorevised 1984)
    (3) Rana Creek, Calif., 1956 (photoinspected 1973)
    (4) Palo Escrito Peak, Calif., 1956 (photorevised 1984)
    (5) Soledad, Calif., 1955 (photorevised 1984)
    (6) Sycamore Flat, Calif., 1956 (photorevised 1984)
    (7) Paraiso Springs, Calif., 1956 (photorevised 1984)
    (c) Boundaries. The Santa Lucia Highlands viticultural area is 
located in Monterey County, California. The beginning point is found on 
the ``Chualar, California'' U.S.G.S. map, where Limekiln Creek crosses 
the 360 foot contour interval. This point also coincides with the 
western boundary of the Guadalupe Y Llanitos de los Correos Land Grant 
and the eastern boundary of section 28, T. 16S., R. 4E. The boundary is 
as follows:
    (1) From the beginning point the boundary follows Limekiln Creek for 
approximately 1.25 miles northeast to the 100 foot elevation.
    (2) Then following the 100 foot contour in a southeasterly direction 
for approximately 1 mile, where the boundary intersects the west bank of 
the Salinas River.
    (3) Then following the west bank of the Salinas River in a 
southeasterly direction on the Gonzales, California U.S.G.S. map for 
approximately 2.50 miles to the point on the Palo Escrito Peak, 
California U.S.G.S. map where the river channel crosses the 120 foot 
elevation.
    (4) Then following the 120 foot elevation due south for 
approximately 2,200 feet where it climbs to the 160 foot elevation.
    (5) Then following the 160 foot elevation in a southeasterly 
direction for

[[Page 206]]

approximately 6.50 miles, to the point where the 160 foot elevation 
crosses River Road.
    (6) Then following River Road in a southeasterly direction for 
approximately 1 mile to the junction of River, Fort Romie and Foothill 
Roads.
    (7) Then following Foothill Road in a southeasterly direction for 
approximately 4 miles to the junction of Foothill and Paraiso Roads on 
the Soledad, California U.S.G.S. map.
    (8) Then following Paraiso Road in a southerly direction to the 
intersection with Clark Road on the Paraiso Springs, California U.S.G.S. 
map.
    (9) Then south for approximately 1.8 miles to the southeast corner 
of section 32, T. 18S., R. 6E.
    (10) Then due west along the southern boundaries of sections 32 and 
31, to the southwest corner of section 31, T. 18S., R. 6E.
    (11) Then north along the western boundaries of sections 31 and 30, 
to the northwestern corner of section 30 T. 18S., R. 6E.
    (12) Then northwest in a straight diagonal line to the northwest 
corner of section 24, T. 18S., R. 5E on the Sycamore Flat, California 
U.S.G.S. map.
    (13) Then north along the western boundary of section 13, T. 18S., 
R. 5E., to the northwestern corner of section 13, T. 18S., R. 5E.
    (14) Then northwest in a diagonal line across sections 11 and 3, to 
the northwest corner of section 3, T. 18S., R. 5E on the Palo Escrito 
Peak, California U.S.G.S. map.
    (15) Then due west along the southern boundary of section 33, T. 
17S., R. 5E., to the southwestern corner of section 33, T. 17S., R. 5E.
    (16) Then north along the western boundary of section 33 to the 
southeast corner of section 29, T. 17S., R. 5E.
    (17) Then northwest in a diagonal line through sections 29, 19, 13, 
and 11, to the northwest corner of section 11, T. 17S., R. 4E on the 
Rana Creek, California U.S.G.S. map.
    (18) Then north along the western boundary of section 2, T. 17S., R. 
4E., to the northwestern corner of section 2, T. 17S., R. 4E.
    (19) Then west along the southern boundary of section 34, T. 16S., 
R. 4E., to the southwestern corner of section 34, T. 16S., R. 4E.
    (20) Then north along the eastern boundary of sections 33 and 28, T. 
16S., R. 4E., for approximately 1 mile, to the point where the eastern 
boundary of section 28 T. 165., R. 4E., coincides with the western 
boundary of the Guadalupe Y Llanitos de los Correos Land Grant on the 
Chualar, California U.S.G.S. map.
    (21) Then northwest along the grant line for approximately 2,500 
feet to the point of beginning on Limekiln Creek.

[T.D. ATF-321, 57 FR 20764, May 15, 1992]



Sec. 9.140  Atlas Peak.

    (a) Name. The name of the viticultural area described in this 
section is ``Atlas Peak.''
    (b) Approved maps. The appropriate maps of determining the 
boundaries of the Atlas Peak viticultural area are two U.S.G.S. maps. 
They are entitled:
    (1) ``Yountville, Calif.,'' 7.5 minute series, edition of 1951, 
(photorevised 1968); and
    (2) ``Capell Valley, Calif.,'' 7.5 minute series, edition of 1951, 
(photorevised 1968).
    (c) Boundaries. The Atlas Peak viticultural area is located in Napa 
County, California. It lies entirely within the Napa Valley viticultural 
area. The beginning point is Haystack (peak) found in section 21, T. 7 
N., R. 4 W. on the ``Yountville'' U.S.G.S. map;
    (1) From the beginning point, the boundary proceeds south in a 
straight line approximately 0.5 miles, to the highest point of an 
unnamed peak of 1443 feet elevation on the boundary of sections 21 and 
28, T. 7 N., R. 4 W.;
    (2) Then southeast in a straight line approximately one mile to an 
unnamed pass with an elevation of 1485 feet, located on Soda Canyon 
Road;
    (3) Then easterly in a straight line approximately 0.5 miles to an 
unnamed peak of 2135 feet elevation;
    (4) Then in a generally southeasterly direction, as a series of five 
straight lines connecting the highest points of unnamed peaks with 
elevations of 1778, 2102, 1942, 1871 and 1840 feet, ending in the center 
of section 2, T. 6 N., R. 4 W.;
    (5) Then southeast in a straight line approximately 1.8 miles to the 
highest point of an unnamed peak of 1268 feet

[[Page 207]]

elevation in section 12, T. 6 N., R. 4 W. on the Capell Valley U.S.G.S. 
map;
    (6) Then east-southeast in a straight line approximately 1.1 miles 
to the point where an unnamed tributary stream enters Milliken Creek, 
immediately south of the Milliken Reservoir in section 7, T. 6 N., R. 3 
W.;
    (7) Then following the unnamed stream east-northeast approximately 
0.5 miles to its source;
    (8) Then northeast in a straight line approximately 0.5 miles, 
through the highest point of an unnamed peak of 1846 feet elevation, to 
the 1600 foot contour line in the eastern portion of section 8, T. 6 N., 
R. 3 W.;
    (9) Then following the 1600 foot contour line generally north and 
west for approximately 10 miles, to the point of intersection with the 
boundary line between sections 12 and 13, T. 7 N., R. 4 W. on the 
Yountville U.S.G.S. map;
    (10) Then following the section boundary line west approximately 1.1 
miles to the intersection with an unnamed, unimproved road;
    (11) Then northwest in a straight line approximately 0.7 miles to 
the highest point of an unnamed peak of 2114 feet elevation, located in 
section 10, T. N., R. 4 W.;
    (12) Then northwest in a straight line approximately 0.7 miles to 
the highest point of an unnamed peak of 2023 feet elevation, located in 
section 10, T. N., R. 4 W.;
    (13) Then southwest in a straight line approximately 2.2 miles to 
Haystack (peak), the point of beginning.

[T.D. ATF-320, 57 FR 2681, Jan. 22, 1992]



Sec. 9.141  Escondido Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Escondido Valley.''
    (b) Approved map. The appropriate map for determining the boundaries 
of the ``Escondido Valley'' viticultural area is 1 U.S.G.S. (scale 
1:250,000) map. It is titled Fort Stockton, Texas, 1954 (revised 1973).
    (c) Boundary. The Escondido Valley viticultural area is located in 
Pecos County, Texas. The boundary is as follows:
    (1) The beginning point is the intersection of Interstate Route 10 
(I-10) and an intermittent stream approximately 18 miles east of the 
city of Fort Stockton (standard reference GE3317 on the Fort Stockton, 
Texas, U.S.G.S. map);
    (2) From the beginning point, the boundary follows I-10 in an 
easterly direction approximately 9 miles until a southbound trail 
diverges from I-10 just past the point where it intersects horizontal 
grid line 2 of square GE on the Fort Stockton, Texas, U.S.G.S. map;
    (3) The boundary then follows the trail in a generally southeasterly 
direction about 5 miles until it intersects the 3000 foot contour line;
    (4) The boundary follows the 3000 foot contour line in a generally 
westerly direction approximately 17 miles;
    (5) The boundary continues to follow the 3000 foot contour line as 
it turns sharply northwest, but diverges from the contour line when the 
contour line turns south again;
    (6) From the point where it diverges from the contour line, the 
boundary follows a straight north-northwesterly line as it returns to 
the beginning point at I-10.

[ATF-322, 57 FR 20761, May 15, 1992]



Sec. 9.143  Spring Mountain District.

    (a) Name. The name of the viticultural area described in this 
section is ``Spring Mountain District.''
    (b) Approved maps. The appropriate maps for determining the boundary 
of the Spring Mountain District viticultural area are four U.S.G.S. 7.5 
minute series topographical maps of the 1:24000 scale. They are titled:
    (1) ``Kenwood, Calif.,'' 1954 (photorevised 1980).
    (2) ``Rutherford, Calif.,'' 1951 (photorevised 1968).
    (3) ``St. Helena, Calif.,'' 1960 (photorevised 1980).
    (4) ``Calistoga, Calif.,'' 1958 (photorevised 1980).
    (c) Boundary. The Spring Mountain District viticultural area is 
located in Napa County, California, within the Napa Valley viticultural 
area. The boundary is as follows:
    (1) Beginning on the Calistoga quadrangle map at the Napa-Sonoma 
county line at the boundary line between sections 18 and 19 in T8N/R6W.

[[Page 208]]

    (2) Then east along the boundary line between sections 18 and 19 for 
approximately 3/4 of a mile to its intersection with Ritchie Creek at 
the boundary line between sections 17 and 20.
    (3) Then northeast along Ritchie Creek approximately 2 miles, to the 
400 foot contour line in the northeast corner in section 16 of T8N/R6W.
    (4) Then along the 400 foot contour line in a northeast then 
generally southeast direction, through the St. Helena and Rutherford 
quadrangle maps, approximately 9 miles, past the town of St. Helena to 
the point where it intersects Sulphur Creek in Sulphur Canyon, in the 
northwest corner of section 2 in T7N/R6W.
    (5) Then west along Sulfur Creek (onto the Kenwood quadrangle map) 
and south to the point where it first divides into two intermittent 
streams in section 3 in T7N/R6W.
    (6) Then south along the intermittent stream approximately 1.5 miles 
to the point where it intersects the 2,360 foot contour line in section 
10 in T7N/R6W.
    (7) Then southwest in a straight line, approximately .10 mile, to 
the unnamed peak (elevation 2600 feet) at the boundary line between Napa 
and Sonoma Counties.
    (8) Then in a generally northwest direction along the Napa-Sonoma 
county line, through sections 10, 9, 4, 5, 32, 33, 32, 29, 20, and 19, 
to the beginning point on the Calistoga quadrangle map at the boundary 
between sections 18 and 19 in T8N/R6W.

[T.D. ATF-341, 58 FR 28350, May 13, 1993]



Sec. 9.144  Texas High Plains.

    (a) Name. The name of the viticultural area described in this 
section is ``Texas High Plains.''
    (b) Approved maps. The appropriate maps for determining the boundary 
of the Texas High Plains viticultural area are six U.S.G.S. 
topographical maps of the 1:250,000 scale. They are titled:
    (1) ``Clovis, New Mexico; Texas'' 1954, revised 1973.
    (2) ``Brownfield, Texas; New Mexico'' 1954, revised 1973.
    (3) ``Hobbs, New Mexico; Texas'' 1954, revised 1973.
    (4) ``Plainview, Texas'' 1954, revised 1974.
    (5) ``Lubbock, Texas'' 1954, revised 1975.
    (6) ``Big Spring, Texas'' 1954, revised 1975.
    (c) Boundary. The Texas High Plains viticultural area is located in 
Armstrong, Bailey, Borden, Briscoe, Castro, Cochran, Crosby, Dawson, 
Deaf Smith, Dickens, Floyd, Gaines, Garza, Hale, Hockley, Lamb, Lubbock, 
Lynn, Motley, Parmer, Randall, Swisher, Terry and Yoakum Counties, 
Texas. The boundary is as follows:
    (1) Beginning on the Hobbs, New Mexico; Texas, map at the 
intersection of the Texas-New Mexico border and U.S. Route 180 east of 
Hobbs, New Mexico;
    (2) The boundary follows U.S. Route 180 east through Seminole, Texas 
and onto the Big Spring, Texas, U.S.G.S. map where it intersects with 
the 3,000 foot contour line in the town of Lamesa, Texas;
    (3) The boundary then follows the 3,000 foot contour line in a 
generally northeasterly direction across the U.S.G.S. maps of Big Spring 
and Lubbock, Texas;
    (4) The boundary continues along the 3,000 foot contour line onto 
the map of Plainview, Texas, where it follows a generally northwesterly 
direction until it intersects with State Highway 217 approximately 12 
miles east of Canyon, Texas;
    (5) The boundary then follows State Highway 217 west to Canyon, 
Texas, leaves State Highway 217 and proceeds in a straight line in a 
northwesterly direction until it intersects with U.S. Route 60, still 
within Canyon, Texas;
    (6) The boundary then follows U.S. Route 60 in a southwesterly 
direction onto the U.S.G.S. map of Clovis, New Mexico; Texas, where it 
intersects the Texas-New Mexico border;
    (7) The boundary then follows the Texas-New Mexico border south, 
across the U.S.G.S. map of Brownfield, Texas; New Mexico, to the 
beginning point on the Hobbs, New Mexico; Texas, U.S.G.S. map.

[T.D. ATF-336, 58 FR 11967, Mar. 2, 1993]



Sec. 9.145  Dunnigan Hills.

    (a) Name. The name of the viticultural area described in this 
section is ``Dunnigan Hills.''

[[Page 209]]

    (b) Approved maps. The appropriate maps for determining the boundary 
of the Dunnigan Hills viticultural area are three U.S.G.S. 15 minute 
series topographical maps of the 1:62500 scale. They are titled:
    (1) ``Guinda, Calif.,'' 1959.
    (2) ``Dunnigan, Calif.,'' 1953.
    (3) ``Woodland, Calif.,'' 1953.
    (c) Boundary. The Dunnigan Hills viticultural area is located in 
Yolo County, California. The boundary is as follows:
    (1) The beginning point is on the Dunnigan, Calif., U.S.G.S. map at 
the intersection of Buckeye Creek and U.S. Route 99W just south of the 
Colusa-Yolo county line;
    (2) From the beginning point, the boundary follows Route 99W in a 
southeasterly direction until an unnamed westbound light-duty road 
coincident with a grant boundary (referred to by the petitioner as 
County Road 17) diverges from Route 99W just north of the town of Yolo, 
California, on the Woodland, Calif., U.S.G.S. map;
    (3) The boundary then follows the County Road 17 for approximately 2 
miles to an unnamed southbound light duty road (referred to by the 
petitioner as County Road 95A);
    (4) The boundary then follows County Road 95A south for 
approximately 1/2 mile to an unnamed westbound light duty road (referred 
to by the petitioner as County Road 17A);
    (5) The boundary then proceeds west along County Road 17A for 
approximately 3/8 mile to an unnamed southbound light duty road 
(referred to by the petitioner as County Road 95);
    (6) The boundary then proceeds south along County Road 95 for 
approximately 1 mile to an unnamed light duty road which goes in a 
southwesterly direction (referred to by the petitioner as County Road 
19);
    (7) The boundary then proceeds southwest along County Road 19 for 
approximately 1/4 mile to an unnamed light duty road which travels 
south-southwest (referred to by the petitioner as County Road 94B);
    (8) The boundary then proceeds southwest along County Road 94B 
approximately 1\1/4\ mile until it intersects Cache Creek;
    (9) The boundary then follows Cache Creek in a westerly direction 
5.5 miles until it intersects an unnamed north-south light duty road 
approximately 1 mile north of the city of Madison, California (referred 
to by the petitioner as County Road 89);
    (10) The boundary then follows County Road 89 two miles in a 
northerly direction back on to the Dunnigan, Calif., U.S.G.S. map where 
it intersects an unnamed light duty road (referred to by the petitioner 
as County Road 16);
    (11) The boundary follows County Road 16 west for approximately 2 
miles onto the Guinda, Calif., U.S.G.S. map, where it turns north onto 
an unnamed light-duty road between sections 31 and 32 of T10N/R1W 
(referred to by the petitioner as County Road 87);
    (12) The boundary follows County Road 87 north for 2 miles to an 
unnamed east-west light duty road (referred to by the petitioner as 
County Road 14);
    (13) The boundary follows County Road 14 west for 3 miles, and then 
leaves the unnamed road and turns north on the dividing line between 
sections 22 and 23 of T11N/R2W.
    (14) The boundary continues due north until it intersects Little 
Buckeye Creek just south of the Yolo-Colusa county line;
    (15) The boundary then follows Little Buckeye Creek in an easterly 
direction until it joins Buckeye Creek;
    (16) The boundary then follows Buckeye Creek in an easterly 
direction back to the point of beginning on the Dunnigan, Calif., 
U.S.G.S. map.

[T.D. ATF-340, 58 FR 28352, May 13, 1993]



Sec. 9.146  Lake Wisconsin.

    (a) Name. The name of the viticultural area described in this 
section is ``Lake Wisconsin.''
    (b) Approved maps. The appropriate maps for determining the boundary 
of the ``Lake Wisconsin'' viticultural area are two U.S.G.S. 7.5 minute 
series topographical maps of the 1:24,000 scale. They are titled:
    (1) Sauk City, Wis., 1975; and
    (2) Lodi, Wis., 1975.

[[Page 210]]

    (c) Boundary. The Lake Wisconsin viticultural area is located in 
Columbia and Dane Counties, Wisconsin. The boundary is as follows:
    (1) The point of beginning is on the ``Lodi, Wisc.'' U.S.G.S. map in 
the northeast quarter-section of section 17, Lodi Township, Columbia 
County, where Spring Creek enters Lake Wisconsin;
    (2) From the point of beginning, follow the southern shoreline of 
Lake Wisconsin northwest to where Lake Wisconsin narrows and becomes the 
Wisconsin River on the map, in the vicinity of the town of Merrimac, 
Sauk County;
    (3) Then continue along the southern shoreline of the Wisconsin 
River, west and south past Goose Egg Hill, Columbia County, on the 
``Sauk City, Wisc.'' quadrangle map, and then west to a southwest bend 
in the shoreline opposite Wiegands Bay, Sauk County, where the Wisconsin 
River becomes Lake Wisconsin again on the map;
    (4) Then southwest and south along the eastern shoreline of Lake 
Wisconsin, to the powerplant that defines where Lake Wisconsin ends and 
the Wisconsin River begins again;
    (5) Then continuing south along the Wisconsin River shoreline to 
where it intersects with U.S. Highway 12 opposite Sauk City, Sauk 
County;
    (6) Then in a southeasterly direction on U.S. Highway 12 to the 
intersection at State Highway 188, just over one-half a mile;
    (7) Then in a northeasterly direction about 1,000 feet on State 
Highway 188, to the intersection of Mack Road;
    (8) Then east on Mack Road to the intersection of State Highway Y, 
about 3 miles;
    (9) Then follow State Highway Y in a generally northeasterly 
direction onto the ``Lodi, Wisc.'' quadrangle map and continue in a 
northeasterly direction to the intersection with State Highway 60;
    (10) Then in a northeasterly direction on State Highway 60 to the 
intersection with State Highway 113 in the town of Lodi;
    (11) Then in a northwesterly direction on State Highway 113 to where 
it crosses Spring Creek the second time just before Chrislaw Road;
    (12) Then follow Spring Creek in a northwesterly direction to where 
it enters Lake Wisconsin, the point of beginning.

[T.D. ATF-352, 59 FR 539, Jan. 5, 1994]



Sec. 9.147  Hames Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Hames Valley.''
    (b) Approved maps. The appropriate map for determining the boundary 
of the Hames Valley viticultural area is one U.S.G.S. 15 minute series 
topographical map, titled Bradley Quadrangle, California, edition of 
1961, with a scale of 1:62,500.
    (c) Boundary. The Hames Valley viticultural area is located in 
southern Monterey County in the State of California. The boundary is as 
follows:
    (1) Beginning at the southeast corner of section 26, T. 23 S., R. 10 
E., which coincides with the point where the 640 foot contour line 
crosses the Swain Valley drainage, the boundary proceeds in a straight 
line across section 26 to the northwest corner of section 26, T. 23 S., 
R. 10 E.;
    (2) Then west northwest in a straight line across sections 22, 21, 
20, and 19, T. 23 S., R. 10 E., to the northwest corner of section 24, 
T. 23 S., R. 9 E.;
    (3) Then southeast in a straight line across sections 24, 25, 30, 
31, and 32, to the southeast corner of section 5, T. 24 S., R. 10 E.;
    (4) Then east southeast in a straight line across section 9 to the 
southeast corner of section 10, T. 24 S., R. 10 E.;
    (5) Then east southeast in a straight line for approximately 2.25 
miles to Hill 704, located in section 18, T. 24 S., R. 11 E.;
    (6) Then north northwest in a straight line for approximately 1.35 
miles to Hill 801, located near the northwest corner of section 7, T. 24 
S., R. 11 E., and then continue in a straight line to the northwest 
corner of section 6, T. 24 S., R. 11 E.;
    (7) Then in a generally northwesterly direction along the Salinas 
River for approximately 1 mile to where the Swain Valley drainage enters 
the Salinas River about .11 mile south of the northern boundary line of 
section 36, T. 23 S., R. 10 E.;

[[Page 211]]

    (8) Then in a westerly direction for approximately .75 mile along 
the Swain Valley drainage to the southeast corner of section 26, T. 23 
S., R. 10 E., the point of beginning.

[T.D. ATF-356, 59 FR 14100, Mar. 25, 1994]



Sec. 9.148  Seiad Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Seiad Valley.''
    (b) Approved map. The appropriate map for determining the boundary 
of the Seiad Valley viticultural area is a U.S.G.S. 7.5 minute series 
topographical map of the 1:24000 scale, titled ``Seiad Valley, Calif.,'' 
1980.
    (c) Boundary. The Seiad Valley viticultural area is located in 
Siskiyou County, California. The boundary is as follows:
    (1) The beginning point is the intersection of the 1600 foot contour 
line with the power transmission line north of the Klamath River, near 
Mile 130;
    (2) From the beginning point, the boundary follows the 1600[foot] 
contour line in a generally northeasterly direction until it reaches the 
intersection of an unnamed light duty road and an unimproved road just 
west of Canyon Creek;
    (3) The boundary then follows the unimproved road north to its end, 
then goes east in a straight line until it reaches the 1800[foot] 
contour line;
    (4) The boundary then follows the 1800[foot] contour line in a 
northeasterly direction to the point, near Sawmill Gulch, where the 
contour line crosses Seiad Creek and turns south and west;
    (5) The boundary continues to follow the 1800[foot] contour line as 
it proceeds southwest for approximately 4.5 miles, then turns sharply 
south-southeast for approximately 0.3 miles, until the contour line 
turns sharply east at a point just north of the Klamath River;
    (6) The boundary then diverges from the 1800[foot] contour line and 
proceeds south-southeast in a straight line, across the Klamath River 
and State Route 96, until it intersects with the 1600[foot] contour 
line;
    (7) The boundary then follows the 1600[foot] contour line south and 
west, then north and west, roughly following the course of the Klamath 
River, until it reaches an unnamed peak 1744 feet high;
    (8) The boundary continues along the 1600[foot] contour line as it 
diverges from the Klamath River and proceeds south, just to the east of 
an unnamed light duty road, to the point where that road crosses Grider 
Creek;
    (9) The boundary diverges from the contour line and proceeds west in 
a straight line across the road and Grider Creek until it intersects 
with the 1600[foot] contour line on the west side of Grider Creek;
    (10) The boundary then follows the 1600[foot] contour line north, 
west and north again until it reaches a point where the contour line 
turns west, just south of the Klamath River;
    (11) The boundary diverges from the 1600[foot] contour line and 
proceeds in a straight line in a northeasterly direction, back to the 
point of beginning.

[T.D. ATF-357, 59 FR 26114, May 19, 1994]



Sec. 9.149  St. Helena.

    (a) Name. The name of the viticultural area described in this 
section is ``St. Helena.''
    (b) Approved maps. The appropriate maps for determining the boundary 
of the St. Helena viticultural area are three U.S.G.S. 7.5 minute series 
topographical maps of the 1:24,000 scale. They are titled:
    (1) St. Helena Quadrangle, California, edition of 1960, revised 
1993;
    (2) Calistoga Quadrangle, California, edition of 1958, photorevised 
1980;
    (3) Rutherford Quadrangle, California, edition of 1951, photorevised 
1968, photoinspected 1973.
    (c) Boundary. The St. Helena viticultural area is located in Napa 
County in the State of California. The boundary is as follows:
    (1) Beginning on the Rutherford Quadrangle map at the point of 
intersection between State Highway 29 and a county road shown on the map 
as Zinfandel Avenue, known locally as Zinfandel Lane, the boundary 
proceeds in a southwest direction along Zinfandel Avenue to its 
intersection with the north fork of Bale Slough (blueline stream) near 
the 201 foot elevation marker;
    (2) Thence in a northwesterly direction approximately 2,750 feet 
along the north fork of Bale Slough to a point of intersection with a 
southwesterly

[[Page 212]]

straight line projection of a light duty road locally known as Inglewood 
Avenue;
    (3) Thence in a straight line in a southwesterly direction along 
this projected extension of Inglewood Avenue approximately 2,300 feet to 
its intersection with the 500 foot contour line in Section 7, Township 7 
North (T7N), Range 5 West (R5W);
    (4) Thence along the 500 foot contour line in a generally 
northwesterly direction through Sections 7, 1 and 2, to its intersection 
of the western border of Section 2, T7N, R6W;
    (5) Thence northerly along the western border of Section 2 
approximately 500 feet to its intersection with Sulphur Creek in Sulphur 
Canyon in the northwest corner of Section 2, T7N, R6W;
    (6) Thence along Sulphur Creek in an easterly direction 
approximately 350 feet to its intersection with the 400 foot contour 
line;
    (7) Thence along the 400 foot contour line in a generally easterly, 
then northwesterly, direction past the city of St. Helena (on the St. 
Helena Quadrangle map) to a point of intersection with a southwesterly 
straight line projection of the county road shown as Bale Lane in the 
Carne Humana Rancho on the Calistoga Quadrangle map;
    (8) Thence along the projected straight line extension of Bale Lane 
in a northeasterly direction approximately 700 feet to the intersection 
of State Highway 29 and Bale Lane and continuing northeasterly along 
Bale Lane to its intersection with the Silverado Trail;
    (9) Thence in a northwesterly direction along the Silverado Trail 
approximately 1,500 feet to an unmarked driveway on the north side of 
the Silverado Trail near the 275 foot elevation marker;
    (10) Thence approximately 300 feet northeasterly along the driveway 
to and beyond its point of intersection with another driveway and 
continuing in a straight line projection to the 400 foot contour line;
    (11) Thence in a northerly and then generally southeasterly 
direction along the 400 foot contour line through Sections 10 
(projected), 11, 12, 13, 24 and 25 in T8N, R6W, Section 30 in T8N, R5W, 
Sections 25 and 24 in T8N, R6W, Sections 19 and 30 in T8N, R5W to a 
point of intersection with the city limits of St. Helena on the eastern 
boundary of Section 30 in T8N, R5W, on the St. Helena Quadrangle map;
    (12) Thence north, east and south along the city limits of St. 
Helena to the third point of intersection with the county road known as 
Howell Mountain Road in Section 29, T8N, R5W;
    (13) Thence in a northeasterly direction approximately 900 feet 
along Howell Mountain Road to its intersection with Conn Valley Road;
    (14) Thence northeasterly and then southeasterly along Conn Valley 
Road to its intersection with the eastern boundary of Section 28, T8N, 
R5W;
    (15) Thence south approximately 5,200 feet along the eastern 
boundary of Sections 28 and 33 to a point of intersection with the 380 
foot contour line near the southeast corner of Section 33, T8N, R5W, on 
the Rutherford Quadrangle map;
    (16) Thence in a northwesterly direction along the 380 foot contour 
line in Section 33 to a point of intersection with a northeasterly 
straight line projection of Zinfandel Avenue;
    (17) Thence in a southwesterly direction approximately 950 feet 
along this straight line projection of Zinfandel Avenue to its 
intersection with the Silverado Trail;
    (18) Thence continuing along Zinfandel Avenue in a southwesterly 
direction to its intersection with State Highway 29, the point of 
beginning.

[T.D. ATF-366, 60 FR 47061, Sept. 11, 1995]



Sec. 9.150  Cucamonga Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Cucamonga Valley.''
    (b) Approved maps. The appropriate maps for determining the boundary 
of the Cucamonga Valley viticultural area are the following ten U.S.G.S. 
topographical maps (7.5 minute series 1:24000 scale):
    (1) Mt. Baldy, Calif., 1967, photorevised 1988;
    (2) Cucamonga Peak, Calif., 1966, photorevised 1988;
    (3) Devore, Calif., 1966, photorevised 1988;

[[Page 213]]

    (4) San Bernardino North, Calif., 1967, photorevised 1988;
    (5) Ontario, Calif., 1967, photorevised 1981;
    (6) Guasti, Calif., 1966, photorevised 1981;
    (7) Fontana, Calif., 1967, photorevised 1980;
    (8) San Bernardino South, Calif., 1967, photorevised 1980;
    (9) Prado Dam, Calif., 1967, photorevised 1981;
    (10) Corona North, Calif., 1967, photorevised 1981.
    (c) Boundary. The Cucamonga Valley viticultural area is located in 
San Bernardino and Riverside Counties, California. The boundary is as 
follows:
    (1) The beginning point is the intersection of Euclid Avenue and 
24th Street on the Mt. Baldy, Calif. U.S.G.S. map;
    (2) From the beginning point, the boundary follows 24th Street east 
for approximately 0.3 mile, until it reaches the intersection of 24th 
Street with two unnamed light-duty streets to the north;
    (3) The boundary then diverges from 24th Street and goes straight 
north for approximately 0.3 mile, until it reaches the 2,000 foot 
contour line;
    (4) The boundary then follows the 2,000 foot contour line in a 
generally easterly direction across the Cucamonga Peak, Calif., U.S.G.S. 
map and onto the Devore, Calif., U.S.G.S. map until it reaches Lytle 
Creek Wash;
    (5) The boundary follows the intermittent stream in Lytle Creek Wash 
in a southeasterly direction to the end of the intermittent stream on 
the Devore, Calif., U.S.G.S. map;
    (6) The boundary then continues through Lytle Creek Wash, proceeding 
southeast in a straight line from the end of the intermittent stream, 
across the southwest corner of the San Bernardino North, Calif., 
U.S.G.S. map and onto the San Bernardino, South, Calif., U.S.G.S. map, 
to the northernmost point of the flood control basin at the end of the 
Lytle Creek Wash, a distance of approximately 4.3 miles;
    (7) The boundary then proceeds in a straight line south-southeast 
across the flood control basin to the point where Lytle Creek Channel 
exits the basin;
    (8) The boundary continues along Lytle Creek Channel until it 
empties into Warm Creek;
    (9) The boundary then follows Warm Creek until it meets the Santa 
Ana River;
    (10) The boundary then follows the western edge of the Santa Ana 
River in a generally southwesterly direction until it meets the San 
Bernardino--Riverside County line;
    (11) The boundary follows the county line west, crossing onto the 
Guasti, Calif., U.S.G.S. map, until it reaches the unnamed channel 
between Etiwanda and Mulberry Avenues (identified by the petitioner as 
Etiwanda Creek Channel);
    (12) The boundary then follows Etiwanda Creek Channel in a southerly 
direction until it parallels Bain Street;
    (13) The boundary then diverges from Etiwanda Creek Channel and 
follows Bain Street south until it ends at Limonite Avenue in the 
northeast corner of the Corona North, Calif., U.S.G.S. map;
    (14) The boundary then continues south in a straight line until it 
reaches the northern shore of the Santa Ana River;
    (15) The boundary then follows the north shore of the Santa Ana 
River until it intersects the 560 foot contour line in Section 1 T3S/
R7W;
    (16) The boundary then follows the 560[foot] contour line to the 
north of the Santa Ana River in a generally westerly direction until it 
reaches Euclid Avenue on the Prado Dam, Calif., U.S.G.S. map;
    (17) The boundary then follows Euclid Avenue north to the point of 
beginning.

[T.D. ATF-362, 60 FR 16578, Mar. 31, 1995]



Sec. 9.151  Puget Sound.

    (a) Name. The name of the viticultural area described in this 
section is ``Puget Sound.''
    (b) Approved maps. The appropriate maps for determining the boundary 
of the Puget Sound viticultural area are four 1:250,000 scale U.S.G.S. 
topographical maps, one 1:25,000 scale topographic map, and three 
1:24,000 scale topographic maps. They are titled:
    (1) Hoquiam, Washington, 1958 revised 1974 (1:250,000)

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    (2) Seattle, Washington, 1958 revised 1974 (1:250,000)
    (3) Wenatchee, Washington, 1957 revised 1971 (1:250,000)
    (4) Victoria, B.C., Can., Wash., U.S., 1957 revised (U.S. area) 1974 
(1:250,000)
    (5) Auburn, Washington, 1983 (1:25,000)
    (6) Buckley, Washington, 1993 (1:24,000)
    (7) Cumberland, Washington, 1993 (1:24,000)
    (8) Enumclaw, Washington, 1993 (1:24,000)
    (c) Boundary. The Puget Sound viticultural area is located in the 
State of Washington. The boundaries of the Puget Sound viticultural 
area, using landmarks and points of reference found on appropriate 
U.S.G.S. maps, follow.
    (1) Beginning where the Whatcom county line comes closest to an 
unnamed secondary road (referred to in the petition as Silver Lake Road) 
on the U.S.G.S. map ``Victoria,'' T41N/R6E;
    (2) Then south along Silver Lake Road approximately 5.5 miles to its 
intersection with State Highway 542, T39N/R5E;
    (3) Then west and then southwest along State Highway 542 
approximately 11 miles to its intersection with State Highway 9, T38N/
R5E;
    (4) Then south along State Highway 9 approximately 44 miles to its 
intersection with an unnamed secondary road (referred to in the petition 
as Burn Road) at the town of Arlington, T31N/R5E;
    (5) Then south, southeast along Burn Road approximately 11 miles to 
its intersection with State Highway 92, T30N/R6E;
    (6) Then south along State Highway 92 approximately 3 miles to its 
intersection with an unnamed light duty road (referred to in the 
petition as Machias Hartford Road), T29N/R6E;
    (7) Then south along Machias Hartford Road approximately 4 miles to 
its intersection with an unnamed secondary road (referred to in the 
petition as Lake Roesiger Road), on the U.S.G.S. map ``Wenatchee,'' 
T29N/R7E;
    (8) Then east along Lake Roesiger Road approximately 3.5 miles to 
its intersection with an unnamed secondary road (referred to in the 
petition as Woods Creek Road), T29N/R7E;
    (9) Then south along Woods Creek Road approximately 10.5 miles to 
its intersection with U.S. Highway 2 in the town of Monroe, T27N/R7E;
    (10) Then west along U.S. Highway 2 approximately \1/2\ mile to its 
intersection with State Highway 203, T27N/R6E;
    (11) Then south along State Highway 203 approximately 24 miles to 
its intersection with an unnamed secondary road (referred to in the 
petition as Preston-Fall City Road), at the town of Fall City, T24N/R7E;
    (12) Then southwest along Preston-Fall City Road approximately 4 
miles to its intersection with Interstate Highway 90 at the town of 
Preston, T24N/R7E;
    (13) Then east along Interstate Highway 90 approximately 3 miles to 
its intersection with State Highway 18, T23N/R7E;
    (14) Then southwest along State Highway 18 approximately 7 miles to 
its intersection with an unnamed secondary road (referred to in the 
petition as 276th Avenue SE), T23N/R6E;
    (15) Then south along 276th Avenue SE approximately 5 miles to its 
intersection with State Highway 516 at the town of Georgetown, T22N/R6E;
    (16) Then west along State Highway 516 approximately 2 miles to its 
intersection with State Highway 169 at the town of Summit on the 
U.S.G.S. map, ``Seattle,'' (shown in greater detail on the U.S.G.S. map, 
``Auburn''), T22N/R6E;
    (17) Then south along State Highway 169 approximately 11.5 miles to 
its intersection with State Highway 410 at the town of Enumclaw on the 
U.S.G.S. map, ``Wenatchee,'' (shown in greater detail on the U.S.G.S. 
map, ``Enumclaw''), T20N/R6E;
    (18) Then southwest approximately 5 miles along State Highway 410 
until its intersection with State Highway 165 on the U.S.G.S. map, 
``Seattle,'' (shown in greater detail on the U.S.G.S. map, ``Buckley''), 
T19N/R6E;
    (19) Then southwest on State Highway 165 until its intersection with 
State Highway 162 at the town of Cascade Junction on the U.S.G.S. map, 
``Seattle'' (shown in greater detail on

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the U.S.G.S. Map, ``Buckley''), T19N/R6E;
    (20) Then southwest along State Highway 162 approximately 8 miles to 
its intersection with an unnamed secondary road (referred to in the 
petition as Orville Road E.), T19N/R5E;
    (21) Then south along Orville Road E., approximately 8 miles to its 
intersection with the CMSTP&P railroad at the town of Kapowsin, on the 
U.S.G.S. map, ``Hoquiam,'' T17N/R5E;
    (22) Then south along the CMSTP&P railroad approximately 17 miles to 
where it crosses the Pierce County line at the town of Elbe, T15N/R5E;
    (23) Then west along the Pierce County line approximately 1 mile to 
the eastern tip of Thurston County, T15N/R5E;
    (24) Then west along the Thurston County line approximately 38 miles 
to where it crosses Interstate Highway 5, T15N/R2W;
    (25) Then north along Interstate Highway 5 approximately 18 miles to 
its intersection with U.S. Highway 101 at the town of Tumwater on the 
U.S.G.S. map ``Seattle,'' T18N/R2W;
    (26) Then northwest along U.S. Highway 101 approximately 18 miles to 
its intersection with State Highway 3 at the town of Shelton, T20N/R3W;
    (27) Then northeast along State Highway 3 approximately 24 miles to 
where it crosses the Kitsap County line, T23N/R1W;
    (28) Then north along the Kitsap County line approximately 3 miles 
to the point where it turns west, T23N/R1W;
    (29) Then west along the Kitsap County line approximately 11 miles 
to the point where it turns north, T23N/R3W;
    (30) Then continuing west across Hood Canal approximately 1 mile to 
join with U.S. Highway 101 just south of the mouth of an unnamed creek 
(referred to in the petition as Jorsted Creek), T23N/R3W;
    (31) Then north along U.S. Highway 101 approximately 40 miles to the 
point where it turns west at the town of Gardiner on the U.S.G.S. map 
``Victoria,'' T30N/R2W;
    (32) Then west along U.S. Highway 101 approximately 32 miles to 
where it crosses the Elwha River, T30N/R7W;
    (33) Then north along the Elwha River approximately 6 miles to its 
mouth, T31N/R7W;
    (34) Then continuing north across the Strait of Juan de Fuca 
approximately 5 miles to the Clallam County line, T32N/R7W;
    (35) Then northeast along the Clallam County line approximately 14 
miles to the southwestern tip of San Juan County, T32N/R4W;
    (36) Then northeast along the San Juan County line approximately 51 
miles to the northern tip of San Juan County, T38N/R3W;
    (37) Then northwest along the Whatcom County line approximately 19 
miles to the western tip of Whatcom County, T41N/R5W;
    (38) Then east along the Whatcom County line approximately 58 miles 
to the beginning.

[T.D. ATF-368, 60 FR 51899, Oct. 4, 1995]



Sec. 9.152  Malibu-Newton Canyon.

    (a) Name. The name of the viticultural area described in this 
petition is ``Malibu-Newton Canyon.''
    (b) Approved maps. The appropriate map for determining the boundary 
of the Malibu-Newton Canyon viticultural area is the U.S.G.S. map, 
``Point Dume Quadrangle, California'' (7.5 Minute Series 1:24,000 
Topographic map, photorevised 1981).
    (c) Boundary. The Malibu-Newton Canyon viticultural area is located 
in Los Angeles County, California. The boundary is as follows:
    (1) Beginning at the intersection of the Newton Canyon creek (lowest 
elevation) and an unnamed medium duty road referred to by the petitioner 
as Kanan Dume Road at the boundary of section 13 and 18 on the U.S.G.S. 
map ``Point Dume Quadrangle.''
    (2) Then south along Kanan Dume Road to the point where an unnamed, 
unimproved dirt road referred to by the petitioner as Ramerez Mountain 
Way crosses over Kanan Dume Road at the tunnel in the northwest corner 
of section 19.
    (3) Then east along Ramerez Mountain Way, following the southern 
ridgeline of Newton Canyon, to Latigo Canyon Road in the southwest 
corner of section 17.

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    (4) Then south along Latigo Canyon Road to an unnamed, unimproved 
dirt road referred to by the petitioner as Newton Mountain Way at the 
southern boundary of section 17.
    (5) Then northeast along Newton Mountain Way, following the 
southeastern ridgeline of Newton Canyon, to an unnamed, unimproved dirt 
road referred to by the petitioner as Castro Mountain Way in section 16.
    (6) Then west along Castro Mountain Way, past Castro Peak, following 
the northern ridgeline of Newton Canyon to Latigo Canyon Road in section 
18.
    (7) Then southwest along the natural ridgeline of Newton Canyon to 
the intersection of Kanan Dume Road and the 1,600 foot contour line in 
the southeastern portion of section 13.
    (8) Then southeasterly along Kanan Dume Road to the beginning point.

[T.D. ATF-375, 61 FR 29952, June 13, 1996]



Sec. 9.153  Redwood Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Redwood Valley.''
    (b) Approved maps. The appropriate maps for determining the boundary 
of the Redwood Valley viticultural area are four Quadrangle 7.5 minute 
series 1:24,000 scale U.S.G.S. topographical maps. They are titled:
    (1) Redwood Valley, Calif., 1960, photorevised 1975;
    (2) Ukiah, Calif., 1958, photorevised 1975;
    (3) Laughlin Range, Calif., 1991;
    (4) Orrs Springs, California, provisional edition, 1991.
    (c) Boundary. The Redwood Valley viticultural area is located in the 
east central interior portion of Mendocino County, California. The 
boundaries of the Redwood Valley viticultural area, using landmarks and 
points of reference found on appropriate U.S.G.S. maps, are:
    (1) The beginning point is the intersection of State Highway 20 with 
the eastern boundary of Section 13, T16N/R12W located in the extreme 
northeast portion of the U.S.G.S. map, ``Ukiah, Calif.'';
    (2) Then north along the east boundary line of Sections 12 and 1 to 
the northeast corner of Section 1, T16N/R12W on the U.S.G.S. map, 
``Redwood Valley, Calif.'';
    (3) Then west along the northern boundary line of Section 1 to the 
northwest corner of Section 1, T16N/R12W;
    (4) Then north along the east boundary line of sections 35, 26, 23, 
14, 11, and 2 to the northeast corner of Section 2, T17N/R12W;
    (5) Then west along the northern boundary of Sections 2, 3, 4, 5, 
and 6 to the northwest corner of Section 6, T17N/R12W;
    (6) Then 10 degrees southwest cutting diagonally across Sections 1, 
12, 13 ,24, 25, and 36 to a point at the northwest corner of Section 1, 
T16N/R13W on the U.S.G.S. map, ``Laughlin, Range, Calif.'';
    (7) Then south along the western boundary line of Sections 1 and 12 
to the southwest corner of Section 12, T16N/R13W;
    (8) Then 13 degrees southeast across Sections 13, 18, and 17 to the 
intersection of State Highway 20 and U.S. Highway 101, T16N/R12W on the 
U.S.G.S. map, Ukiah, Calif.''; and
    (9) Then easterly along a line following State Highway 20 back to 
the beginning point at the eastern boundary of Section 13, T16N/R12W 
located in the extreme northeast portion of the U.S.G.S. map ``Ukiah, 
Calif.''

[T.D. ATF-386, 61 FR 67466, Dec. 23, 1996]



Sec. 9.154  Chiles Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Chiles Valley.''
    (b) Approved maps. The appropriate maps for determining the boundary 
of the Chiles Valley viticultural area are four 1:24,000 Scale U.S.G.S. 
topography maps. They are titled:
    (1) St. Helena, CA 1960 photorevised 1980;
    (2) Rutherford, CA 1951 photorevised 1968;
    (3) Chiles Valley, CA 1958 photorevised 1980;
    (4) Yountville, CA 1951 photorevised 1968.
    (c) Boundary. The Chiles Valley viticultural area is located in the 
State of California, entirely within the Napa Valley viticultural area. 
The boundaries of the Chiles Valley viticultural

[[Page 217]]

area, using landmarks and points of reference found on appropriate 
U.S.G.S. maps follow. The local names of roads are identified by name.
    (1) Beginning on the St. Helena, CA quadrangle map at the 
northernmost corner of Rancho Catacula in Section 34, Township 9 North 
(T9N), Range 5 West (R5W), Mount Diablo Base and Meridian (MDBM);
    (2) Then in southwesterly direction along the Rancho Catacula 
boundary line to its intersection with the Rancho La Jota boundary line;
    (3) Then in a south-southeasterly direction approximately 3,800 feet 
along the Rancho Catacula/Rancho La Jota boundary line to the point 
where the Rancho Catacula boundary separates from the common boundary 
with Rancho La Jota;
    (4) Then in a southeasterly direction continuing along the Rancho 
Catacula boundary approximately 23,600 feet to a point of intersection, 
in the NE \1/4\ Sec. 19, T8N, R4W, on the Chiles Valley quadrangle map, 
with a county road known locally as Chiles and Pope Valley Road;
    (5) Then in a southwesterly direction along Chiles and Pope Valley 
Road to a point where it first crosses an unnamed blueline stream in the 
SE \1/4\ Section 19, T8N, R4W;
    (6) Then following the unnamed stream in generally southeast 
direction to its intersection with the 1200 foot contour;
    (7) Then following the 1200 foot contour in a northeasterly 
direction to a point of intersection with the Rancho Catacula boundary 
in section 20, T8N, R4W;
    (8) Then in a southeasterly direction along the Rancho Catcula 
boundary approximately 17,500 feet to the southwest corner of Rancho 
Catacula in section 34, T8N, R4W on the Yountville, CA, quadrangle map;
    (9) Then in a northeasterly direction along the Rancho Catacula 
boundary approximately 650 feet to its intersection with the 1040 foot 
contour;
    (10) Then along the 1040 foot contour in a generally east and 
northeast direction to its intersection with the Rancho Catacula 
boundary;
    (11) Then in a northeasterly direction along the Rancho Catacula 
boundary approximately 1100 feet to its intersection with the 1040 foot 
contour;
    (12) Then along the 1040 foot contour in an easterly direction and 
then in a northwesterly direction to its intersection of the Rancho 
Catacula boundary;
    (13) Then in a southwesterly direction along the Rancho Catacula 
boundary approximately 300 feet to a point of intersection with a line 
of high voltage power lines;
    (14) Then in a westerly direction along the high voltage line 
approximately 650 feet to its intersection with the 1000 foot contour;
    (15) Then continuing along the 1000 foot contour in a generally 
northwesterly direction to the point of intersection with the first 
unnamed blueline stream;
    (16) Then along the unnamed stream in a northerly direction to its 
point of intersection with the 1200 foot contour;
    (17) Then along the 1200 foot contour in a northwesterly direction 
to its points of intersection with the Rancho Catacula boundary in 
Section 35, T9N, R5W on the St. Helena, CA, quadrangle map;
    (18) Then along the Rancho Catacula boundary in a northwesterly 
direction approximately 5,350 feet to a northernmost corner of Rancho 
Catacula, the beginning point on the St. Helena quadrangle map a the 
northernmost corner of Rancho Catacula in Section 34, T9N, R5W, MDBM.

[T.D. ATF-408, 64 FR 7787, Feb. 17, 1999]



Sec. 9.155  Texas Davis Mountains.

    (a) Name. The name of the viticultural area described in this 
section is ``Texas Davis Mountains.''
    (b) Approved map. The appropriate maps for determining the boundary 
of the Texas Davis Mountains viticultural area are two U.S.G.S. metric 
topographical maps of the 1:100 000 scale, titled:
    (1) ``Fort Davis, Texas,'' 1985.
    (2) ``Mount Livermore, Texas--Chihuahua,'' 1985.
    (c) Boundary. The Texas Davis Mountains viticultural area is located 
in Jeff Davis County, Texas. The boundary is as follows:
    (1) The beginning point is the intersection of Texas Highway 17 and 
Farm

[[Page 218]]

Road 1832 on the Fort Davis, Texas, U.S.G.S. map;
    (2) From the beginning point, the boundary follows Highway 17 in a 
southeasterly and then southwesterly direction until it reaches the 
intersection of Limpia Creek with the unnamed stream which flows through 
Grapevine Canyon on the Fort Davis, Texas, U.S.G.S. map;
    (3) The boundary then proceeds in a straight line in a southwesterly 
direction until it meets Highway 118 at a gravel pit 1\3/4\ miles 
southeast of the intersection of Highway 118 and Highway 17;
    (4) The boundary then proceeds in a straight line east by southeast 
until it meets Highway 166 at its junction with Highway 17;
    (5) The boundary then follows Highway 166 in a southwesterly 
direction onto the Mt. Livermore, Texas-Chihuahua, U.S.G.S. map;
    (6) The boundary then continues to follow Highway 166 in a westerly 
direction;
    (7) The boundary then continues to follow Highway 166 as it turns in 
a northerly and then northeasterly direction to the point where it meets 
Highway 118;
    (8) The boundary then follows Highway 118 in a northerly direction 
until it reaches a point where it intersects with the 1600 meter contour 
line, just north of Robbers Roost Canyon;
    (9) The boundary then proceeds in a straight line due east for about 
two miles until it reaches the 1600 meter contour line to the west of 
Friend Mountain;
    (10) The boundary then follows the 1600 meter contour line in a 
northeasterly direction until it reaches the northernmost point of 
Friend Mountain;
    (11) The boundary then diverges from the contour line and proceeds 
in a straight line east-southeast until it reaches the beginning point 
of Buckley Canyon, approximately three fifths of a mile;
    (12) The boundary then follows Buckley Canyon in an easterly 
direction to the point where it meets Cherry Canyon;
    (13) The boundary then follows Cherry Canyon in a northeasterly 
direction to the point where it meets Grapevine Canyon on the Mt. 
Livermore, Texas-Chihuahua, U.S.G.S. map;
    (14) The boundary then proceeds in a straight line from the 
intersection of Cherry and Grapevine Canyons to the peak of Bear Cave 
Mountain, on the Fort Davis, Texas, U.S.G.S. map;
    (15) The boundary then proceeds in a straight line from the peak of 
Bear Cave Mountain to the point where Farm Road 1832 begins;
    (16) The boundary then follows Farm Road 1832 back to its 
intersection with Texas Highway 17, at the point of beginning.

[T.D. ATF-395, 63 FR 11828, Mar. 11, 1998]



Sec. 9.156  Diablo Grande.

    (a) Name. The name of the viticultural area described in this 
section is ``Diablo Grande''.
    (b) Approved maps. The appropriate maps for determining the boundary 
of the Diablo Grande viticultural area are the following four U.S.G.S. 
Quadrangle 7.5 Minute Series (Topographic) maps. They are titled:
    (1) Patterson Quadrangle, California--Stanislaus Co., 1953 
(Photorevised 1971, Photoinspected 1978);
    (2) Copper Mtn. Quadrangle, California--Stanislaus Co., 1953 (Field 
Check 1956, Aerial Photo 1971);
    (3) Wilcox Ridge, California--Stanislaus Co., 1956 (Photorevised 
1971);
    (4) Orestimba Peak, California--Stanislaus Co., 1955 (Photorevised 
1971).
    (c) Boundary. The Diablo Grande viticultural area is located in the 
western foothills of Stanislaus County, California. The beginning point 
is at Reservoir Spillway 780 in section 8, Township 6 South, Range 7 
East (T. 6S., R. 7E.) on the Patterson Quadrangle U.S.G.S. map.
    (1) Then proceed northwest to Salt Grass Springs to the point where 
the 1000 foot contour line crosses the northern section line of section 
9, T. 6S., R. 6E., on the Copper Mtn., Quadrangle U.S.G.S. map.
    (2) Then proceed due south past Copper Mountain in section 16, T. 
6S., R. 6E., to Mikes Peak in section 4, T. 7S., R. 6E., on the Wilcox 
Ridge Quadrangle U.S.G.S. map.

[[Page 219]]

    (3) Then proceed due west to Oristimba Creek in section 6, T. 7S., 
R. 6E.
    (4) Then proceed following Orestimba Creek south/southeast and then 
east/northeast to the point where Orestimba Creek meets Bench Mark 
340 in section 28, T. 7S., R. 7E., on the Orestimba Peak 
Quadrangle U.S.G.S. map.
    (5) Then proceed northwest to the point of beginning at Reservoir 
Spillway 780 in section 8, T. 6S., R. 7E.

[T.D. ATF-399, 63 FR 33853, June 22, 1998]



Sec. 9.157  San Francisco Bay.

    (a) Name. The name of the viticultural area described in this 
section is ``San Francisco Bay.''
    (b) Approved maps. The appropriate maps for determining the boundary 
of the San Francisco Bay viticultural area are forty-two U.S.G.S. 
Quadrangle 7.5 Minute Series (Topographic) maps and one U.S.G.S. 
Quadrangle 5 x 11 Minute (Topographic) map. They are titled:
    (1) Pacheco Peak, California, scale 1:24,000, dated 1955, 
Photorevised 1971;
    (2) Gilroy Hot Springs, California, scale 1:24,000, dated 1955, 
Photoinspected 1978, Photorevised 1971
    (3) Mt. Sizer, California, scale 1:24,000, dated 1955, 
Photoinspected 1978, Photorevised 1971
    (4) Morgan Hill, California, scale 1:24,000, dated 1955, 
Photorevised 1980
    (5) Lick Observatory, California, scale 1:24,000, dated 1955, 
Photoinspected 1973, Photorevised 1968
    (6) San Jose East, California, scale 1:24,000, dated 1961, 
Photorevised 1980;
    (7) Calaveras Reservoir, California, scale 1:24,000, dated 1961, 
Photorevised 1980;
    (8) La Costa Valley, California, scale 1:24,000, dated 1960, 
Photorevised 1968;
    (9) Mendenhall Springs, California, scale 1:24,000, dated 1956, 
Photoinspected 1978, Photorevised 1971;
    (10) Altamont, California, scale 1:24,000, dated 1953, Photorevised 
1981;
    (11) Byron Hot Springs, California, scale 1:24,000, dated 1953, 
Photorevised 1968;
    (12) Tassajara, California, scale 1:24,000, dated 1953, 
Photoinspected 1974, Photorevised 1968;
    (13) Diablo, California, scale 1:24,000, dated 1953, Photorevised 
1980;
    (14) Clayton, California, scale 1:24,000, dated 1953, Photorevised 
1980;
    (15) Honker Bay, California, scale 1:24,000, dated 1953, 
Photorevised 1980;
    (16) Vine Hill, California, scale 1:24,000, dated 1959, Photorevised 
1980;
    (17) Benicia, California, scale 1:24,000, dated 1959, Photorevised 
1980;
    (18) Mare Island, California, scale 1:24,000, dated 1959, 
Photorevised 1980;
    (19) Richmond, California, scale 1:24,000, dated 1959, Photorevised 
1980;
    (20) San Quentin, California, scale 1:24,000, dated 1959, 
Photorevised 1980;
    (21) Oakland West, California, scale 1:24,000, dated 1959, 
Photorevised 1980;
    (22) San Francisco North, California, scale 1:24,000, dated 1956, 
Photorevised 1968 and 1973;
    (23) San Francisco South, California, scale 1:24,000, dated 1956, 
Photorevised 1980;
    (24) Montara Mountain, California, scale 1:24,000, dated 1956, 
Photorevised 1980;
    (25) Half Moon Bay, California, scale 1:24,000, dated 1961, 
Photoinspected 1978, Photorevised 1968 and 1973;
    (26) San Gregorio, California, scale 1:24,000, dated 1961, 
Photoinspected 1978, Photorevised 1968;
    (27) Pigeon Point, California, scale 1:24,000, dated 1955, 
Photorevised 1968;
    (28) Franklin Point, California, scale 1:24,000, dated 1955, 
Photorevised 1968;
    (29) Ano Nuevo, California, scale 1:24,000, dated 1955, Photorevised 
1968;
    (30) Davenport, California, scale 1:24,000, dated 1955, Photorevised 
1968;
    (31) Santa Cruz, California, scale 1:24,000, dated 1954, 
Photorevised 1981;
    (32) Felton, California, scale 1:24,000, dated 1955, Photorevised 
1980;
    (33) Laurel, California, scale 1:24,000, dated 1955, Photoinspected 
1978, Photorevised 1968;
    (34) Soquel, California, scale 1:24,000, dated 1954, Photorevised 
1980;
    (35) Watsonville West, California, scale 1:24,000, dated 1954, 
Photorevised 1980;
    (36) Loma Prieta, California, scale 1:24,000, dated 1955, 
Photoinspected 1978, Photorevised 1968;
    (37) Watsonville East, California, scale 1:24,000, dated 1955, 
Photorevised 1980;

[[Page 220]]

    (38) Mt. Madonna, California, scale 1:24,000, dated 1955, 
Photorevised 1980;
    (39) Gilroy, California, scale 1:24,000, dated 1955, Photorevised 
1981;
    (40) Chittenden, California, scale 1:24,000, dated 1955, 
Photorevised 1980;
    (41) San Felipe, California, scale 1:24,000, dated 1955, 
Photorevised 1971; and
    (42) Three Sisters, California, scale 1:24,000, dated 1954, 
Photoinspected 1978, Photorevised 1971.
    (c) Boundary. The San Francisco Bay viticultural area is located 
mainly within five counties which border the San Francisco Bay and 
partly within two other counties in the State of California. These 
counties are: San Francisco, San Mateo, Santa Clara, Alameda, Contra 
Costa and partly in Santa Cruz and San Benito Counties. The Santa Cruz 
Mountains viticultural area is excluded (see 27 CFR 9.31.) The 
boundaries of the San Francisco Bay viticultural area, using landmarks 
and points of reference found on appropriate U.S.G.S. maps, are as 
follows:
    (1) Beginning at the intersection of the 37 degree 00[min] North 
latitude parallel with State Route 152 on the Pacheco Peak Quadrangle.
    (2) Then proceed in a northwesterly direction in a straight line to 
the intersection of Coyote Creek with the township line dividing 
Township 9 South from Township 10 South on the Gilroy Hot Springs 
Quadrangle.
    (3) Then proceed in a northwesterly direction in a straight line to 
the intersection of the township line dividing Township 8 South from 
Township 9 South with the range line dividing Range 3 East from Range 4 
East on the Mt. Sizer Quadrangle.
    (4) Then proceed in a northwesterly direction in a straight line 
(across the Morgan Hill Quadrangle) to the intersection of the township 
line dividing Township 7 South from Township 8 South with the range line 
dividing Range 2 East from Range 3 East on the Lick Observatory 
Quadrangle.
    (5) Then proceed in a northwesterly direction in a straight line to 
the intersection of State Route 130 with the township line dividing 
Township 6 South from Township 7 South on the San Jose East Quadrangle.
    (6) Then proceed in a northeasterly direction following State Route 
130 to its intersection with the range line dividing Range 1 East from 
Range 2 East on the Calaveras Reservoir Quadrangle.
    (7) Then proceed north following this range line to its intersection 
with the Hetch Hetchy Aqueduct on the La Costa Valley Quadrangle.
    (8) Then proceed in a northeasterly direction in a straight line 
following the Hetch Hetchy Aqueduct to the western boundary of Section 
14 in Township 4 South, Range 2 East on the Mendenhall Springs 
Quadrangle.
    (9) Then proceed south along the western boundary of Section 14 in 
Township 4 South, Range 2 East to the southwest corner of Section 14 on 
the Mendenhall Springs Quadrangle.
    (10) Then proceed east along the southern boundary of Section 14 in 
Township 4 South, Range 2 East to the southeast corner of Section 14 on 
the Mendenhall Springs Quadrangle.
    (11) Then proceed south along the western boundary of Section 24 in 
Township 4 South, Range 2 East to the southwest corner of Section 24 on 
the Mendenhall Springs Quadrangle.
    (12) Then proceed east along the southern boundary of Section 24 in 
Township 4 South, Range 2 East and Section 19 in Township 4 South, Range 
3 East to the southeast corner of Section 19 on the Mendenhall Springs 
Quadrangle.
    (13) Then proceed north along the western boundaries of Sections 20, 
17, 8, and 5 on the Mendenhall Springs Quadrangle in Township 4 South, 
Range 3 East, north (across the Altamont Quadrangle) along the western 
boundaries of Sections 32, 29, to the southwest corner of Section 20, in 
Township 3 South, Range 3 East.
    (14) Then east along the southern boundary of Sections 20, and 21, 
in Township 3 South, Range 3 East on the Altamont Quadrangle to the 1100 
meter elevation contour.
    (15) Then, along the 1100 meter contour in a northwesterly direction 
to the intersection with the western boundary of Section 16, Township 3 
South, Range 3 East on the Altamont Quadrangle.
    (16) Then north along the eastern boundary of Sections 17, 8, and 5 
in

[[Page 221]]

Township 3 South, Range 3 East to the northeast corner of Section 5.
    (17) Then proceed west along the northern border of Section 5 to the 
northwest corner of Section 5.
    (18) Then north along the eastern boundaries of Sections 31, 30, 19, 
and 18 in Township 2 South, Range 3 East to the northeast corner of 
Section 18 on the Byron Hot Springs Quadrangle.
    (19) Then proceed due west along the northern boundaries of Section 
18 and Section 13 (Township 2 South, Range 2 East) to a point 
approximately 400 feet due south of Brushy Peak on the Byron Hot Springs 
Quadrangle.
    (20) Then proceed due north to Brushy Peak (elevation 1,702) on the 
Byron Hot Springs Quadrangle.
    (21) Then proceed in a northwesterly direction in a straight line 
(across the Tassajara and Diablo Quadrangles) to Mt. Diablo (elevation 
3,849) on the Clayton Quadrangle.
    (22) Then proceed in a northwesterly direction in a straight line to 
Mulligan Hill (elevation 1,438) on the Clayton Quadrangle.
    (23) Then proceed in a northwesterly direction in a straight line 
(across the Honker Bay Quadrangle) to a point marked BM 15 on the 
shoreline of Contra Costa County on the Vine Hill Quadrangle.
    (24) Then proceed west along the shoreline of Contra Costa County 
and Alameda County (across the Quadrangles of Benicia, Mare Island, 
Richmond, and San Quentin) to the San Francisco/Oakland Bay Bridge on 
the Oakland West Quadrangle.
    (25) Then proceed west on the San Francisco/Oakland Bay Bridge to 
the San Francisco County shoreline on the San Francisco North 
Quadrangle.
    (26) Then proceed along the San Francisco, San Mateo, and Santa Cruz 
County shoreline (across the Quadrangles of San Francisco South, Montara 
Mountain, Half Moon Bay, San Gregorio, Pigeon Point, Franklin Point, Ano 
Nuevo and Davenport) to the place where Majors Creek flows into the 
Pacific Ocean on the Santa Cruz Quadrangle.
    (27) Then proceed northeasterly along Majors Creek to its 
intersection with the 400 foot contour line on the Felton Quadrangle.
    (28) Then proceed along the 400 foot contour line in a generally 
easterly/northeasterly direction to its intersection with Bull Creek on 
the Felton Quadrangle.
    (29) Then proceed along Bull Creek to its intersection with Highway 
9 on the Felton Quadrangle.
    (30) Then proceed along Highway 9 in a northerly direction to its 
intersection with Felton Empire Road.
    (31) Then proceed along Felton Empire Road in a westerly direction 
to its intersection with the 400 foot contour line on the Felton 
Quadrangle.
    (32) Then proceed along the 400 foot contour line (across the 
Laurel, Soquel, Watsonville West and Loma Prieta Quadrangles) to its 
intersection with Highway 152 on the Watsonville East Quadrangle.
    (33) Then proceed along Highway 152 in a northeasterly direction to 
its intersection with the 600 foot contour line just west of Bodfish 
Creek on the Watsonville East Quadrangle.
    (34) Then proceed in a generally east/southeasterly direction along 
the 600 foot contour line (across the Mt. Madonna and Gilroy 
Quadrangles), approximately 7.3 miles, to the first intersection of the 
western section line of Section 30, Township 11 South, Range 4 East on 
the Chittenden Quadrangle.
    (35) Then proceed south along the section line approximately 1.9 
miles to the south township line at Section 31, Township 11 South, Range 
4 East on the Chittenden Quadrangle.
    (36) Then proceed in an easterly direction along the township line 
(across the San Felipe Quadrangle), approximately 12.4 miles to the 
intersection of Township 11 South and Township 12 South and Range 5 East 
and Range 6 East on the Three Sisters Quadrangle.
    (37) Then proceed north along the Range 5 East and Range 6 East 
range line approximately 5.5 miles to Pacheco Creek on the Pacheco Creek 
Quadrangle.
    (38) Then proceed northeast along Pacheco Creek approximately .5 
mile to the beginning point.

[T.D. ATF-407, 64 FR 3024, Jan. 20, 1999]

[[Page 222]]



Sec. 9.158  Mendocino Ridge.

    (a) Name. The name of the viticultural area described in this 
section is ``Mendocino Ridge.''
    (b) Approved maps. The appropriate maps for determining the boundary 
of the Mendocino Ridge viticultural area are four 1:62,500 scale 
U.S.G.S. topographical maps. They are titled:
    (1) Ornbaun Valley Quadrangle, California, 15 minute series 
topographic map, 1960;
    (2) Navarro Quadrangle, California, 15 minute series topographic 
map, 1961;
    (3) Point Arena Quadrangle, California, 15 minute series topographic 
map, 1960;
    (4) Boonville Quadrangle, California, 15 minute series topographic 
map, 1959.
    (c) Boundary. The Mendocino Ridge viticultural area is located 
within Mendocino County, California. Within the boundary description 
that follows, the viticultural area starts at the 1200 foot elevation 
(contour line) and encompasses all areas at or above the 1200 foot 
elevation line. The boundaries of the Mendocino Ridge viticultural area, 
using landmarks and points of reference found on appropriate U.S.G.S. 
maps, follow.
    (1) Beginning at the Mendocino/Sonoma County line at the mouth of 
the Gualala River, where the Gualala River empties into the Pacific 
Ocean, in section 27 of Township 11 North (T11N), Range 5 West (R5W), 
located in the southeastern portion of U.S.G.S. 15 minute series map, 
``Point Arena, California;''
    (2) Then following the Mendocino/Sonoma County line eastward to the 
southeast corner of section 8 in T11N/R13W, on the U.S.G.S. 15 minute 
map, ``Ornbaun Valley, California;''
    (3) Then from the southeast corner of section 8 in T11N/R13W 
directly north approximately 3+ miles to the southwest corner of section 
9 in T12N/R13W;
    (4) Then proceeding in a straight line in a northwesterly direction 
to the southwestern corner of section 14 in T13N/R14W;
    (5) Then directly north along the western line of section 14 in 
T13N/R14W to a point on the western line of section 14 approximately \1/
4\ from the top where the Anderson Valley viticultural area boundary 
intersects the western line of section 14 in T13N/R14W;
    (6) Then in a straight line, in a northwesterly direction, to the 
intersection of an unnamed creek and the south section line of section 
14, T14N/R15W, on the U.S.G.S. 15 minute series map, ``Boonville, 
California;''
    (7) Then in a westerly direction along the south section lines of 
sections 14 and 15 in T14N/R15W to the southwest corner of section 15, 
T14N/R15W, on the U.S.G.S. 15 minute series map, ``Navarro, 
California;''
    (8) Then in a northerly direction along the western section lines of 
sections 15, 10, and 3 in T14N/R15W in a straight line to the 
intersection of the Navarro River on the western section line of section 
3 in T14N/R15W;
    (9) Then in a northwesterly direction along the Navarro River to the 
mouth of the river where it meets the Pacific Ocean in section 5 of 
T15N/R17W;
    (10) Then in a southern direction along the Mendocino County 
coastline to the Mendocino/Sonoma County line to the beginning point at 
the mouth of the Gualala River in section 27 of T11N/R15W, on the 
U.S.G.S. 15 minute series map, ``Point Arena, California.''

[T.D. ATF-392, 62 FR 55516, Oct. 27, 1997]



Sec. 9.159  Yorkville Highlands.

    (a) Name. The name of the viticultural area described in this 
section is ``Yorkville Highlands.''
    (b) Approved maps. The appropriate maps for determining the boundary 
of the Yorkville Highlands viticultural area are the following six 
U.S.G.S. topographical maps (7.5 minute series, 1:24000 scale):
    (1) Gube Mountain, Calif., provisional edition 1991;
    (2) Big Foot Mountain, Calif., provisional edition 1991;
    (3) Cloverdale, Calif., 1960, photoinspected 1975;
    (4) Ornbaun Valley Quadrangle, Calif., provisional edition, 1991;
    (5) Yorkville, Calif., provisional edition, 1991;
    (6) Hopland, Calif., 1960, photoinspected 1975.
    (c) Boundary. The Yorkville Highlands viticultural area is located 
in Mendocino County, California. The boundary is as follows:

[[Page 223]]

    (1) The beginning point is Benchmark 680, located in Section 30, T. 
12 N., R. 13 W., on the Ornbaum Valley quadrangle map;
    (2) From the beginning point, the boundary proceeds in a straight 
line in a northeasterly direction to a point intersecting the North Fork 
of Robinson Creek and the Section 20, T. 13 N., R. 13 W.;
    (3) The boundary then proceeds in a straight line in a southeasterly 
direction to the summit of Sanel Mountain, located at the southeast 
corner of Section 30, T. 13 N., R. 12 W., on the Yorkville quadrangle 
map;
    (4) The boundary then proceeds in a straight line in a southeasterly 
direction until it reaches the southeast corner of Section 15, T. 12 N., 
R 11 W., on the Hopland quadrangle map;
    (5) The boundary then proceeds south, following the eastern 
boundaries of Sections 22 and 27, T. 12 N., R 11 W., until it reaches 
the Mendocino-Sonoma County line on the Cloverdale quadrangle map;
    (6) The boundary then follows the Mendocino-Sonoma county line west, 
south and west until it reaches the southwest corner of Section 32, T. 
12 N., R. 11 W.;
    (7) The boundary then diverges from the county line and proceeds in 
a northwesterly direction, traversing the Big Foot Mountain quadrangle 
map, until it reaches the southwest corner of Section 5, T. 12 N., R. 13 
W. on the Ornbaun Valley quadrangle map;
    (8) The boundary proceeds in a straight line in a northerly 
direction until it reaches the beginning point at Benchmark 680.

[T.D. ATF-397, 63 FR 16904, Apr. 7, 1998]



Sec. 9.160  Yountville.

    (a) Name. The name of the viticultural area described in this 
section is ``Yountville.''
    (b) Approved maps. The appropriate maps for determining the boundary 
of the Yountville viticultural area are four 1:24,000 Scale U.S.G.S. 
topography maps. They are titled:
    (1) Napa, CA 1951 photorevised 1980;
    (2) Rutherford, CA 1951 photorevised 1968;
    (3) Sonoma, CA 1951 photorevised 1980;
    (4) Yountville, CA 1951 photorevised 1968.
    (c) Boundary. The Yountville viticultural area is located in the 
State of California, entirely within the Napa Valley viticultural area. 
The boundaries of the Yountville viticultural area, using landmarks and 
points of reference found on appropriate U.S.G.S. maps are as follows:
    (1) Beginning on the Rutherford quadrangle map at the intersection 
of the 500 foot contour line with an unnamed stream known locally as 
Hopper Creek north of the center of Section 3, T6N, R5W, Mount Diablo 
Meridan (MDM);
    (2) Then along the unnamed stream (Hopper Creek) southeasterly, and 
at the fork in Section 3, northeasterly along the stream to the point 
where the stream intersects with an unnamed dirt road in the northwest 
corner of Section 2, T6N, R5W, MDM;
    (3) Then in a straight line to the light duty road to the immediate 
northeast in Section 2, then along the light duty road in a 
northeasterly direction to the point at which the road turns 90 degrees 
to the left;
    (4) Then northerly along the light duty road 625 feet, then 
northeasterly (N 40 deg. by 43[foot]) in a straight line 1,350 feet, 
along the northern property line of Assessor's Parcel Number 27-380-08, 
to State Highway 29, then continuing in a straight line approximately 
500 feet to the peak of the 320 plus foot hill along the western edge of 
the Yountville hills;
    (5) Then east to the second 300 foot contour line, then along said 
contour line around the Yountville hills to the north to the point at 
which the 300 foot line exits the Rutherford quadrangle for the second 
time;
    (6) Then, on the Yountville quadrangle map, in a straight line in a 
northeasterly direction approximately N34 deg. by 30[foot] E 
approximately 1,000 feet to the 90 degree bend in the unimproved dirt 
road shown on the map, then along that road, which coincides with a 
fence line to the intersection of Conn Creek and Rector Creek;
    (7) Then along Rector Creek to the northeast past Silverado Trail to 
the Rector Reservoir spillway entrance, then south approximately 100 
feet to

[[Page 224]]

the 400 foot contour line, then southerly along the 400 foot contour 
line approximately 4200 feet to the intersection with a gully in section 
30, T7N, R4W, MDM;
    (8) Then southwesterly down the center of the gully approximately 
800 feet to the medium duty road known as Silverado Trail, then 
southeasterly along the Silverado Trail approximately 590 feet to the 
medium duty road known locally Yountville Cross Road;
    (9) Then southwesterly along the Yountville Cross Road (denoted as 
GRANT BDY on the map) approximately 4,700 feet to the main branch of the 
Napa River, then following the western boundary of the Stags Leap 
District viticultural area, first southerly down the center of the Napa 
River approximately 21,000 feet, then leaving the Napa River 
northeasterly in a straight line approximately 900 feet to the 
intersection of the Silverado Trail with an intermittent stream at the 
60 foot contour line in T6N, R4W, MDM;
    (10) Then along the Silverado Trail southerly approximately 3,200 
feet, passing into the Napa quadrangle, to a point which is east of the 
confluence of Dry Creek with the Napa River; then west approximately 600 
feet to said confluence; then northwesterly along Dry Creek 
approximately 3,500 feet, passing into the Yountville quadrangle to a 
fork in the creek; then northwesterly along the north fork of Dry Creek 
approximately 5,700 feet to the easterly end of the light duty road 
labeled Ragatz Lane;
    (11) Then southwesterly along Ragatz Lane to the west side of State 
Highway 29, then southerly along Highway 29 by 982 feet to the easterly 
extension of the north line boundary of Napa County Assessor's parcel 
number 034-170-015, then along the north line of APN 034-170-015 and its 
extension westerly 3,550 feet to the dividing line Between R4W and R5W 
on the Napa quadrangle, then southwesterly approximately 1000 feet to 
the peak denoted as 564 (which is about 5,500 feet easterly of the 
northwest corner of the Napa quadrangle); then southwesterly 
approximately 4,000 feet to the peak northeast of the reservoir gauging 
station denoted as 835;
    (12) Then southwesterly approximately 1,500 feet to the reservoir 
gauging station, then west to the 400 foot contour line on the west side 
of Dry Creek, then northwesterly along the 400 foot contour line to the 
point where the contour intersects the north line of Section 10. T6N, 
R5W, MDM, immediately adjacent to Dry Creek on the Rutherford, CA map;
    (13) Then northwesterly along Dry Creek approximately 6,500 feet to 
BM503, then northeasterly approximately 3,000 feet to the peak denoted 
as 1478, then southeasterly approximately 2,300 feet to the beginning of 
the creek known locally as Hopper Creek, then southeasterly along Hopper 
Creek approximately 2,300 feet to the point of beginning.

[T.D. ATF-410, 64 FR 13513, Mar. 19, 1999]



Sec. 9.162  Santa Rita Hills.

    (a) Name. The name of the viticultural area described in this 
section is ``Santa Rita Hills.''
    (b) Approved maps. The appropriate maps for determining the boundary 
of the Santa Rita Hills viticultural area are five (5) U.S.G.S. 
Quadrangle 7.5 Minute Series maps titled:
    (1) ``Lompoc, Calif.,'' edition of 1959 (photorevised in 1982).
    (2) ``Lompoc Hills, Calif.,'' edition of 1959 (photoinspected 1971).
    (3) ``Los Alamos, Calif.,'' edition of 1959.
    (4) ``Santa Rosa Hills, Calif.,'' edition of 1959 (photoinspected 
1978).
    (5) ``Solvang, Calif.,'' edition of 1959 (photorevised 1982).
    (c) Boundary. The ``Santa Rita Hills'' viticultural area is located 
within Santa Barbara County, California. The boundary is as follows:
    (1) The beginning point is found on the Solvang, California U.S.G.S. 
Quadrangle map at an unnamed hilltop, elevation 1600 feet, in section 
27, T.6N, R. 32W, on the Slvang, Calif., Quadrangle U.S.G.S. map.
    (2) Then proceed north and slightly west 2.3 miles to an unnamed 
hilltop elevation 1174 feet, Section 15, T.6N., R. 32W.
    (3) Proceed west and slightly north 1.85 miles to an unnamed hilltop 
elevation 899 feet within the heart of the Santa Rosa Land Grant, T.7N., 
R. 32W,

[[Page 225]]

on the Santa Rosa Hills, Calif., Quadrangle U.S.G.S. map.
    (4) Proceed north approximately 2 miles to an unnamed hilltop 
elevation 1063 feet within the northeastern part of the Santa Rosa Land 
Grant, T.7N, R. 32W, on the Los Alamos, Calif., Quadrangle U.S.G.S. map.
    (5) Proceed northwest 1.1 miles to an unnamed hilltop elevation 961 
feet. Section 29, T.7N., R. 32W.
    (6) Proceed north and slightly east 1.1 miles to an unnamed 
elevation 1443 feet. Section 20, T. 7N., R. 32W.
    (7) Proceed west 1.4 miles to an unnamed hilltop elevation 1479 
feet. Section 24, T.7N., R. 33W.
    (8) Proceed north 1.2 miles to an unnamed hilltop elevation 1705 
feet. Section 13, T.7N., R. 33W.
    (9) Proceed northwest approximately 2 miles to an unnamed hilltop 
elevation 1543. Section 10, T.7N., R. 33W.
    (10) Proceed west and slightly south 1.6 miles to an unnamed hilltop 
elevation 935 feet within the northern section of the Santa Rosa Land 
Grant. T.7N., R. 33W.
    (11) Proceed south by southwest 1.5 miles to an unnamed hilltop 
elevation 605 feet in the northern section of the Santa Rosa Land Grant. 
T.7N., R. 33W.
    (12) Proceed west by southwest approximately 2 miles to the point 
where California Highway 246 intersects with the 200-foot elevation 
contour line comprising the western border of the Santa Rita Hills, 
within the Santa Rosa Land Grant. T.7N., R. 34W, on the Lompoc, Calif., 
Quadrangle U.S.G.S. map.
    (13) Proceed following the 200 foot elevation contour line south 
along the western border of the Santa Rita Hills to the extreme southern 
tip of the 200 foot elevation contour that is .6 miles due west of an 
unnamed hilltop 361 feet in elevation in the Canada de Salispuedes Land 
Grant. T.6N., R. 34W.
    (14) Proceed southeast 2.35 miles to an unnamed hilltop elevation 
1070 feet. Section 18, T.6N., R. 33W, on the Lompoc Hills, Calif., 
Quadrangle U.S.G.S. map.
    (15) Proceed east and slightly south 1.95 miles to an unnamed 
hilltop elevation 921 feet. Section 16, T.6N., R. 33W, on the Santa Rosa 
Hills, Calif., Quadrangle U.S.G.S. map.
    (16) Proceed east by southeast 1.35 miles to an unnamed hilltop 
elevation 1307 feet at intersection between Sections 22 and 23. T.6N., 
R. 33W.
    (17) Proceed east 2.35 miles to an unnamed hilltop elevation 1507 
feet in the southern area of the Santa Rosa Land Grant. T.6N., 32W.
    (18) Proceed east by southeast 2.1 miles to an unnamed hilltop 
elevation 1279 feet in the southern area of the Santa Rosa Land Grant. 
T.6N., 32W.
    (19) Then proceed east by southeast 1.45 miles to the point of the 
beginning.

[T.D. ATF-454, 66 FR 29479, May 31, 2001]



Sec. 9.164  River Junction.

    (a) Name. The name of the viticultural area described in this 
section is ``River Junction.''
    (b) Approved maps. The appropriate maps for determining the 
boundaries of the River Junction viticultural area are the following two 
1:24,000 Scale U.S.G.S. topographical maps. They are titled:
    (1) Ripon, CA 1969, photorevised 1980;
    (2) Vernalis, CA 1969, photorevised 1980.
    (c) Boundaries. The River Junction AVA is located in southern San 
Joaquin County, California. The boundaries are as follows:
    (1) Beginning on the Vernalis, CA quadrangle map at the intersection 
of the secondary highway Airport Way and the San Joaquin River levee, 
near Benchmark 35 in T3S/R6E;
    (2) Then in a southeasterly direction, follow the levee along the 
San Joaquin River onto the Ripon, CA quadrangle map;
    (3) Then in a northerly direction around Sturgeon Bend in section 18 
T3S/R7E;
    (4) Then continuing in a generally southeasterly, then northeasterly 
direction along the levee adjoining the Stanislaus River through 
sections 19, 20 and 17 to the point where the levee intersects sections 
17 and 8;
    (5) Then continuing in a northerly direction along the levee in 
section 8 for approximately 1,000 feet;
    (6) Then in a straight line in a northwesterly direction for 
approximately 100 feet to the intersection with Division Road;

[[Page 226]]

    (7) Then in a southwesterly, then northwesterly direction along 
Division Road through sections 8, 17, 18 and 7 to the intersection with 
the secondary highway Airport Way;
    (8) Then in a southwesterly direction along Airport Way onto the 
Vernalis quadrangle map to the starting point at the intersection of 
Airport Way and the San Joaquin River levee T3S/R6E.

[T.D. ATF-452, 66 FR 23592, May 9, 2001]



Sec. 9.165  Applegate Valley.

    (a) Name. The name of the viticultural area described in this 
section is ``Applegate Valley.''
    (b) Approved maps. The appropriate map for determining the 
boundaries of the Applegate Valley viticultural area is one U.S.G.S. map 
titled ``Medford, Oregon; California'' (NK 10-5) scale 1:250,000 (1955, 
revised 1976).
    (c) Boundaries. The Applegate Valley viticultural area is located in 
the State of Oregon within Jackson and Josephine Counties, and entirely 
within the existing Rogue Valley viticultural area. The boundaries are 
as follows:
    (1) Beginning at the confluence of the Applegate River with the 
Rogue River approximately 5 miles west of Grants Pass, the boundary 
proceeds due west to the boundary of the Siskiyou National Forest north 
of Dutcher Creek;
    (2) Then in a straight line in a southerly and westerly direction 
along the boundary of the Siskiyou National Forest to Highway 199;
    (3) Then in a straight line easterly to the peak of Roundtop 
Mountain (4693 feet);
    (4) Then in a straight line easterly and southerly to the peak of 
Mungers Butte;
    (5) Then in a straight line southerly and westerly to Holcomb Peak;
    (6) Then in a generally southeasterly direction along the eastern 
boundary of the Siskiyou National Forest until it joins the northern 
boundary of the Rogue River National Forest;
    (7) Then easterly along the northern boundary of the Rogue River 
National forest to a point due south of the peak of Bald Mountain;
    (8) Then due north to the peak of Bald Mountain (5635 feet);
    (9) Then in a straight-line northerly and westerly to the lookout 
tower on Anderson Butte;
    (10) Then in a straight line northerly and westerly to the peak of 
an unnamed mountain with an elevation of 3181 feet;
    (11) Then in a straight line northerly and westerly to the peak of 
Timber Mountain;
    (12) Then in a straight line westerly and southerly to the middle 
peak of Billy Mountain;
    (13) Then, northerly and westerly by straight lines connecting a 
series of five unnamed peaks with elevations of approximately 3600, 
4000, 3800, 3400, and 3800 feet, respectively;
    (14) Then in a straight line northerly and easterly to Grants Pass 
Peak;
    (15) Then in a straight line westerly to Jerome Prairie;
    (16) Then in a straight line northwesterly to the confluence of the 
Applegate River and the Rogue River and the point of the beginning.

[T.D. ATF-434, 65 FR 78099, Dec. 14, 2000]



Sec. 9.166  Diamond Mountain District.

    (a) Name. The name of the viticultural area described in this 
section is ``Diamond Mountain District.''
    (b) Approved map. The appropriate maps for determining the boundary 
of the Diamond Mountain District viticultural area are two 1:24,000 
Scale U.S.G.S. topography maps.
    They are titled:
    (1) Mark West Springs, CA 1993
    (2) Calistoga, CA 1993.
    (c) Boundaries. The viticultural area is located in Napa County, 
California. The beginning point is where the boundary between Napa and 
Sonoma counties intersects Petrified Forest Road in Section 3 of 
Township 8 North, Range 7 West, Mount Diablo Base and Meridian on the 
Mark West Springs map;
    (1) Then north and east along Petrified Forest Road approximately 
1.9 miles to the point where it intersects the 400-foot contour just 
east of Section 35 of Township 9 North, Range 7 West, Mount Diablo Base 
and Meridian, in the Mallacomes land grant;
    (2) Then generally east southeast along the 400-foot contour 
approximately 6.5 miles to the point where it

[[Page 227]]

intersects Ritchey Creek in Section 3 of Township 8 North, Range 6 West, 
Mount Diablo Base and Meridian;
    (3) Then west southwest along Ritchey Creek approximately 2.2 miles 
to the point where it intersects the boundary between Sections 17 and 20 
of Township 8 North, Range 6 West, Mount Diablo Base and Meridian;
    (4) Then due west in a straight line along the section boundary 
approximately 0.8 miles to the point where it intersects the boundary 
between Napa and Sonoma Counties between Sections 18 and 19 of Township 
8 North, Range 6 West, Mount Diablo Base and Meridian;
    (5) Then generally northwest along the boundary between Napa and 
Sonoma Counties approximately 4.2 miles to the point where it intersects 
Petrified Forest Road, to the point of beginning.

[T.D. ATF-456, 66 FR 29698, June 1, 2001]



Sec. 9.167  Red Mountain

    (a) Name. The name of the viticultural area described in this 
section is ``Red Mountain.''
    (b) Approved maps. The appropriate map for determining the 
boundaries of the Red Mountain viticultural area is one U.S.G.S. map 
titled ``Benton City, Washington'' 7.5 minute series (topographic), 
(1974).
    (c) Boundaries. The Red Mountain viticultural area is located within 
Benton County, Washington, entirely within the existing Yakima Valley 
viticultural area. The boundaries are as follows:
    (1) The northwest boundary beginning on this map at the intersection 
of the 560-foot elevation level and the aqueduct found northwest of the 
center of section 32.
    (2) Then following the aqueduct east to its endpoint at an elevation 
of approximately 650-feet, again in section 32.
    (3) From this point in a straight line southeast to the 1173-foot 
peak, located southeast of the center of section 32.
    (4) From this peak southeast in a straight line across the lower 
southwest corner of section 33 to the 1253-foot peak located due north 
of the center of section 4.
    (5) Then in a straight line southeast to the 1410-foot peak located 
in the southwest corner of section 3.
    (6) From this peak in a straight line southeast to the border of 
sections 10 and 11 where the power line crosses these two sections. This 
intersection is northeast of the center of section 10 and northwest of 
the center of section 11.
    (7) From this point in a straight line south following the border of 
sections 10 and 11 to the corner of sections 10,11,15, and 14. This 
point has an elevation of 684 feet.
    (8) From this point southwest in a diagonal to the 700-foot 
elevation line and then following this 700-foot elevation through 
Section 15 and into section 16.
    (9) Then following the 700-foot elevation line southwest \1/4\ mile 
in a southwest diagonal until it meets the creek bed.
    (10) Following the creek bed southwest through section 16, across 
the extreme southeast corner of section 17 and into the northeast corner 
of section 20 to a point where the creek bed meets the 560-foot 
elevation point.
    (11) From this 560-foot elevation point, running north along this 
elevation line through section 17, through section 8, through section 5 
and through section 32 until meeting the beginning point at the aqueduct 
in section 32.

[T.D. ATF-448, 66 FR 18545, Apr. 10, 2001]



Sec. 9.168  Fair Play.

    (a) Name. The name of the viticultural area described in this 
section is ``Fair Play.''
    (b) Approved maps. The appropriate maps for determining the boundary 
of the Fair Play viticultural area are three United States Geological 
Survey (U.S.G.S.) topographic maps (7.5 minute series; quadrangles). 
They are titled:
    (1) Omo Ranch, California, 1952 (photorevised 1973);
    (2) Aukum, California, 1952 (photorevised 1973);
    (3) Camino, California, 1952 (photorevised 1973).
    (c) Boundaries. The Fair Play viticultural area is located in El 
Dorado County, California and is located

[[Page 228]]

entirely within the existing Sierra Foothills and El Dorado viticultural 
areas. The boundary for Fair Play is as follows:
    (1) The beginning point of the boundary is the intersection of the 
Middle Fork of the Cosumnes River and the U.S.G.S. map section line 
between Sections 26 and 27, T. 9 N., R. 11 E. (``Aukum'' Quadrangle);
    (2) From the beginning point, the boundary follows northeast along 
the Middle Fork of the Cosumnes River until it meets an unnamed medium-
duty road (Mt. Aukum Road or El Dorado County Road E-16) just as it 
crosses onto the ``Camino'' Quadrangle map;
    (3) The boundary continues then northeast along Mt. Aukum Road to 
its intersection with Grizzly Flat Road at the town of Somerset 
(``Camino'' Quadrangle);
    (4) The boundary continues east along Grizzly Flat Road to its 
intersection with the 2200'' contour line.
    (5) The boundary continues along the 2200'' contour line north and 
then east until it intersects with the U.S.G.S. map section line between 
Sections 9 and 10, T. 9 N., R. 12 E. (``Camino'' Quadrangle):
    (6) The boundary then proceeds south along the U.S.G.S. map section 
line between Sections 9 and 10, T. 9 N., R. 12 E., to its intersection 
with the Middle Fork of the Cosumnes River (``Aukum'' Quadrangle);
    (7) The boundary then follows along the Middle Fork of the Cosumnes 
River in a southeasterly direction onto the ``Omo'' Quadrangle map and 
continues until it meets the range line between R. 12 E. and R. 13 E. 
(``Aukum'' Quadrangle and ``Omo Ranch'' Quadrangle);
    (8) The boundary then follows south along the range line between R. 
12 E. and R. 13 E. to its intersection with an unnamed medium-duty road 
in T. 8 N. (Omo Ranch Road) (``Omo Ranch'' Quadrangle);
    (9) The boundary then continues west in a straight line 
approximately 0.3 miles to the point where Cedar Creek intersects with 
the 3200-foot contour line, within Section 1, T. 8 N.,R. 12 E. (``Omo 
Ranch'' Quadrangle);
    (10) The boundary follows along Cedar Creek west and then southwest 
until it empties into Scott Creek (``Aukum'' Quadrangle);
    (11) The boundary then proceeds west along Scott Creek until it 
empties into the South Fork of the Cosumnes River (``Aukum'' 
Quadrangle);
    (12) The boundary continues west along the South Fork of the 
Cosumnes River to its intersection with the U.S.G.S. map section line 
between Sections 14 and 15, T. 8 N., R. 11 E. (``Aukum'' Quadrangle); 
and
    (13) Finally, the boundary follows north along the section line back 
to its intersection with the Middle Fork of the Cosumnes River, the 
point of the beginning. (``Aukum'' Quadrangle).

[T.D. ATF-440, 66 FR 11539, Feb. 26, 2001]



Sec. 9.170  Long Island.

    (a) Name. The name of the viticultural area described in this 
section is ``Long Island.''
    (b) Approved maps. The appropriate maps for determining the boundary 
of the Long Island viticultural area are three United States Geological 
Survey (U.S.G.S.) topographic maps (Scale: 1:250,000). They are titled:
    (1) ``New York, N.Y.; N.J.; Conn.,'' 1960 (revised 1979);
    (2) ``Hartford, Conn.; N.Y.; N.J.; Mass.,'' 1962 (revised 1975); and
    (3) ``Providence, R.I.; Mass.; Conn.; N.Y.,'' 1947 (revised 1969).
    (c) Boundaries. The Long Island viticultural area includes 
approximately 1,170 square miles or 749,146 acres and is made up of the 
counties of Nassau and Suffolk, New York, including all off shore 
islands in those counties.

[T.D. ATF-453, 66 FR 26791, May 15, 2001]



Sec. 9.172  West Elks.

    (a) Name. The name of the viticultural area described in this 
section is ``West Elks.''
    (b) Approved maps. The appropriate maps for determining the boundary 
of the West Elks viticultural area are four United States Geological 
Survey (U.S.G.S.) topographic maps (Scale: 1:250,000). They are titled:
    (1) Lazear Quadrangle (Colorado-Delta Co. 1955 (photorevised 1978));
    (2) Hotchkiss Quadrangle (Colorado-Delta Co. 1965 (photorevised 
1979));

[[Page 229]]

    (3) Paonia Quadrangle (Colorado-Delta Co. 1965 (photorevised 1979); 
and
    (4) Bowie Quadrangle (Colorado-Delta Co. 1965 (photorevised 1978).
    (c) Boundaries. The West Elks viticultural area is located in 
eastern Delta County, Colorado. The beginning point is found on the 
``Bowie Quadrangle'' U.S.G.S. map at the \1/4\ corner common to Sections 
19 and 20, Township 13 South, Range 91 West (T. 13 S., R. 91 W.);
    (1) The boundary proceeds east following the center subdivision 
lines of Sections 20 and 21 to its intersection with Colorado Highway 
133;
    (2) Then northeasterly following Colorado Highway 133 to its 
intersection with the N-S center subdivision line of Section 14, T. 13 
S., R. 91 W., near Juanita Junction;
    (3) Then south following the center subdivision line to its 
intersection with the North Fork of the Gunnison River;
    (4) Then southwesterly following the North Fork of the Gunnison 
River to its intersection with the Stewart Ditch in the extreme southern 
part of Section 15, T. 13 S., R. 91 W.;
    (5) Then southwesterly following the Stewart Ditch to its 
intersection with the section line common to Sections 21 and 28, T. 13 
S., R. 91 W.;
    (6) Then east following the section line common to Sections 21 and 
28 to its intersection with the 6000 foot contour;
    (7) Then southerly following the 6000 foot contour to its second 
intersection with the section line common to Sections 3 and 4, T. 14 S., 
R. 91 W., located on the Paonia, Colo. U.S.G.S. map;
    (8) Then south following the section line common to Sections 3 and 4 
to its intersection with the 6200 foot contour;
    (9) Then southerly following the 6200 foot contour to its 
intersection with the section line common to Sections 16 and 17, T. 14 
S., R. 91 W.;
    (10) Then south following the section line common to Sections 16 and 
17 to the point of intersection of Sections 16, 17, 20 and 21;
    (11) Then west following the section line common to Sections 17 and 
20 to the point of intersection of Sections 17, 18, 19 and 20;
    (12) Then south following the section line common to Sections 19 and 
20 to the N1/16 corner common to Sections 19 and 20;
    (13) Then west following the subdivision line across Section 19 to 
the N1/16 corner common to Section 19, T. 14 S., R. 91 W. and Section 
24, T, 14 S., R. 92 W.;
    (14) Then south following the range line between R. 91 W. and R. 92 
W. to the point of intersection between Sections 19 and 30, T. 14 S., R. 
91 W. and Sections 24 and 25, T. 14 S., R. 92 W.;
    (15) Then west following the section line common to Sections 24 and 
25 to the point of intersection between Sections 23, 24, 25 and 26, 
located on the Hotchkiss, Colo. U.S.G.S. map;
    (16) Then south following the section line common to Sections 25 and 
26 to the point of intersection between Sections 25, 26, 35 and 36;
    (17) Then west following the section lines common to Sections 26 and 
35 and Sections 27 and 34 to the point of intersection between Sections 
27, 28, 33 and 34;
    (18) Then south following the section line common to Sections 33 and 
34 to the point of intersection between Sections 33 and 34, T. 14 S., R. 
92 W. and Sections 3 and 4, T. 15 S., R. 92 W.;
    (19) Then west following the township line between T. 14 S. and T. 
15 S. approximately three miles to the point of intersection between 
Section 31, T. 14 S., R. 92 W., Section 6, T. 15 S., R. 92 W., Section 
1, T. 15 S., R. 93 W., and Section 36, T. 14 S., R. 93 W.;
    (20) Then south following the range line between R. 92 W. and R. 93 
W. to the point of intersection between Sections 6 and 7, T. 15 S., R. 
92 W. and Sections 1 and 12, T. 15 S., R. 93 W.;
    (21) Then west following the section lines common to Sections 1 and 
12 and Sections 2 and 11 to its intersection with the North Fork of the 
Gunnison River, located on the Lazear, Colo. U.S.G.S. map;
    (22) Then westerly following the North Fork of the Gunnison River to 
its intersection with Big Gulch in the extreme northeastern corner of 
Section 6, T. 15 S., R. 93 W.;
    (23) Then northerly following Big Gulch to its intersection with the 
section line common to Sections 17 and 18, T. 14 S., R. 93 W.;

[[Page 230]]

    (24) Then north following the section lines common to Sections 17 
and 18, Sections 7 and 8, and Sections 5 and 6 to the point of 
intersection between Sections 5 and 6, T. 14 S., R. 93 W. and Sections 
31 and 32, T. 13 S., R. 93 W.;
    (25) Then east following the township line between T. 13 S. and T. 
14 S. approximately two miles to the point of intersection between 
Sections 3 and 4, T. 14 S., R. 93 W. and Sections 33 and 34, T. 13 S., 
R. 93 W.;
    (26) Then south following the section line common to Sections 3 and 
4 to the point of intersection between Sections 3, 4, 9 and 10;
    (27) Then east following the section lines for approximately 6 miles 
to the point of intersection between Sections 3, 4, 9 and 10, T. 14 S., 
R. 92 W., located on the Hotchkiss, Colo. U.S.G.S. map;
    (28) Then north following the section line common to Sections 3 and 
4 to the point of intersection between Sections 3 and 4, T. 14 S., R. 92 
W. and Sections 33 and 34, T. 13 S., R. 92 W.;
    (29) Then east following the township line between T. 13 S. and T. 
14 S. to its intersection with the Fire Mountain Canal in the 
southwestern corner of Section 35, T. 13 S., R. 92 W.;
    (30) Then northeasterly following the Fire Mountain Canal through 
the extreme northwest corner of the Paonia, Colo. U.S.G.S. map to its 
intersection with the section line common to Sections 29 and 30, T. 13 
S., R. 91 W., located on the Bowie, Colo. U.S.G.S. map;
    (31) Then north following the section lines common to Sections 29 
and 30 and Sections 19 and 20 to the 1/4 corner common to Sections 19 
and 20, the point of beginning.

[T.D. ATF-445, 66 FR 13430, Mar. 6, 2001]



Sec. 9.173  Rockpile.

    (a) Name. The name of the viticultural area described in this 
section is ``Rockpile''.
    (b) Approved maps. The appropriate maps for determining the boundary 
of the Rockpile viticultural area are four 1:24,000 Scale U.S.G.S. 
topographic maps. They are titled:
    (1) Warm Springs Dam Quadrangle, CA--Sonoma Co. 1978;
    (2) Cloverdale Quadrangle, CA 1975;
    (3) Tombs Creek Quadrangle, CA--Sonoma Co. 1978; and
    (4) Big Foot Mountain Quadrangle, CA 1991.
    (c) Boundary. The Rockpile viticultural area is located in 
northwestern Sonoma County, California. The boundary encircles the 
Rockpile Ranch area, located west of Lake Sonoma. The point of beginning 
is the intersection of Rockpile Road and the Section 15 east boundary 
line, T 10 N, R 11 W (Warm Springs Dam Quadrangle);
    (1) Then proceed straight north to the 800-foot contour line, 
Section 10, T 10 N, R 11 W (Warm Springs Dam Quadrangle);
    (2) Then proceed west along the 800-foot contour line through 
Sections 10, 9, 4, 5, and 32 to the Section 31 east boundary line, T 11 
N, R 11 W (Warm Springs Dam and Cloverdale Quadrangles);
    (3) Then proceed west along the 800-foot contour line in Section 31, 
following the line as it reverses from the west to the east direction, 
returning to the east boundary of Section 31, T 11 N, R 11 W (Cloverdale 
and Big Foot Mountain Quadrangles);
    (4) Then proceed along the 800-foot contour line east through 
Section 32 and northwest through Sections 33, 32, 29, 30, 25, 24, 23, 
14, 15, 22, 21, and 20 to the east boundary line of Section 19, T 11 N, 
R 12 W (Cloverdale and Big Foot Mountain Quadrangles);
    (5) Then proceed west, north, south and east along the meandering 
800-foot contour line, in a loop, crossing the southwest and northwest 
headwaters of Galloway Creek, and returning to the east boundary line of 
Section 19, T 11 N, R 12 W (Big Foot Mountain Quadrangle);
    (6) Then proceed straight north to the Mendocino-Sonoma county 
boundary line, then follow the county line straight west to the R 13 and 
12 W line, and continue straight south to the 1,600-foot contour line in 
the Section 19 southwest corner, T 11 N, R 12 W (Big Foot Mountain 
Quadrangle);
    (7) Then proceed southeast along the meandering 1,600-foot contour 
line to the Section 29 west boundary line, and continue straight south 
to the T 11 and 10 N boundary line, R 12 W (Big Foot Mountain 
Quadrangle);

[[Page 231]]

    (8) Then proceed east along the T 11 and 10 N boundary line to the 
Section 1 west boundary line, R 12 W (Big Foot Mountain Quadrangle);
    (9) Then proceed south along the Section 1 west boundary line, 
turning east at the Section 1 south boundary and continue east to the 
northwest corner of Section 8, T 10 N, R 11 W (Big Foot Mountain, Tombs 
Creek and Warm Springs Dam Quadrangles);
    (10) Then proceed south along the west boundary of Section 8, 
turning east at its southwest corner, and continue east to the 876-foot 
elevation marker, T 10 N, R 11 W (Warm Springs Dam Quadrangle);
    (11) Then proceed straight south approximately 2,000 feet to the 
800-foot contour line, T 10 N, R 11 W (Warm Springs Dam Quadrangle);
    (12) Then follow the 800-foot contour line as it meanders west, 
southeast, southwest, and east to the Section 14 west boundary, and then 
straight north, returning to the point of beginning at Rockpile Road, T 
10 N, R 11 W (Warm Springs Dam Quadrangle).

[T.D. ATF-473, 67 FR 9193, Feb. 28, 2002]

    Effective Date Note: By T.D. ATF-473, 67 FR 9193, Feb. 28, 2002, 
Sec. 9.173 was added to subpart C of part 9, effective Apr. 29, 2002.



PART 10--COMMERCIAL BRIBERY--Table of Contents




                     Subpart A--Scope of Regulations

Sec.
10.1  General.
10.2  Territorial extent.
10.3  Application.
10.4  Jurisdictional limits.
10.5  Delegations of the Director.
10.6  Administrative provisions.

                         Subpart B--Definitions

10.11  Meaning of terms.

                      Subpart C--Commercial Bribery

10.21  Commercial bribery.
10.22  Employee associations.
10.23  Gifts or payments to wholesalers.
10.24  Sales promotion contests.

                          Subpart D--Exclusion

10.51  Exclusion, in general.
10.52  Practice which puts trade buyer independence at risk.
10.53  Practices not resulting in exclusion. [Reserved]
10.54  Criteria for determining trade buyer independence.

    Authority: 15 U.S.C. 49-50; 27 U.S.C. 202 and 205; 44 U.S.C. 
3504(h).

    Source: T.D. ATF-74, 45 FR 63257, Sept. 30, 1980, unless otherwise 
noted.



                     Subpart A--Scope of Regulations



Sec. 10.1  General.

    The regulations in this part, issued pursuant to section 105 of the 
Federal Alcohol Administration Act (27 U.S.C. 205), specify practices 
which may result in violations of section 105(c) of the Act and criteria 
for determining whether a practice is a violation of section 105(c) of 
the Act. This part does not attempt to enumerate all of the practices 
prohibited by section 105(c) of the Act. Nothing in this part shall 
operate to exempt any person from the requirements of any State law or 
regulation.

[T.D. ATF-364, 60 FR 20426, Apr. 26, 1995]



Sec. 10.2  Territorial extent.

    This part applies to the several States of the United States, the 
District of Columbia, and Puerto Rico.



Sec. 10.3  Application.

    (a) General. The regulations in this part apply to transactions 
between industry members and employees, officers, or representatives of 
trade buyers.
    (b) Transactions involving State agencies. The regulations in this 
part apply only to transactions between industry members and employees 
of State agencies operating as retailers, wholesalers, or both. The 
regulations do not apply to State agencies with regard to their dealings 
with employees, officers, or representatives of trade buyers.



Sec. 10.4  Jurisdictional limits.

    (a) General. The regulations in this part apply where:
    (1) The industry member induces a trade buyer to purchase distilled 
spirits, wine, or malt beverages from such industry member to the 
exclusion, in whole or in part, of products sold or offered for sale by 
other persons in interstate or foreign commerce; and

[[Page 232]]

    (2) If: (i) The inducement is made in the course of interstate or 
foreign commerce; or
    (ii) The industry member engages in the practice of using an 
inducement to such an extent as substantially to restrain or prevent 
transactions in interstate or foreign commerce in any such products; or
    (iii) The direct effect of the inducement is to prevent, deter, 
hinder, or restrict other persons from selling or offering for sale any 
such products to such retailer in interstate or foreign commerce.
    (b) Malt beverages. In the case of malt beverages, this part applies 
to transactions between an employee, officer, or representative of a 
trade buyer in any State and a brewer, importer, or wholesaler of malt 
beverages inside or outside such State only to the extent that the law 
of such State imposes requirements similar to the requirements of 
section 5(c) of the Federal Alcohol Administration Act (27 U.S.C. 
205(c)), with respect to similar transactions between an employee, 
officer, or representative of a trade buyer in such State and a brewer, 
importer, or wholesaler of malt beverages in such State.

[T.D. ATF-74, 45 FR 63257, Sept. 30, 1980, as amended by T.D. ATF-364, 
60 FR 20426, Apr. 26, 1995]



Sec. 10.5  Delegations of the Director.

    Most of the regulatory authorities of the Director contained in this 
part 10 are delegated to appropriate ATF officers. These ATF officers 
are specified in ATF Order 1130.7, Delegation Order--Delegation of the 
Director's Authorities in 27 CFR Parts 6, 8, 10 and 11. ATF delegation 
orders, such as ATF Order 1130.7, are available to any interested person 
by mailing a request to the ATF Distribution Center, P.O. Box 5950, 
Springfield, Virginia 22150-5190, or by accessing the ATF web site 
(http://www.atf.treas.gov/).

[T.D. ATF-428, 65 FR 52020, Aug. 28, 2000]



Sec. 10.6  Administrative provisions.

    (a) General. The Act makes applicable the provisions including 
penalties of sections 49 and 50 of Title 15, United States Code, to the 
jurisdiction, powers and duties of the Director under this Act, and to 
any person (whether or not a corporation) subject to the provisions of 
law administered by the Director under this Act. The Act also provides 
that the Director is authorized to require, in such manner and such form 
as he or she shall prescribe, such reports as are necessary to carry out 
the powers and duties under this chapter.
    (b) Examination and subpoena. Any appropriate ATF officer shall at 
all reasonable times have access to, for the purpose of examination, and 
the right to copy any documentary evidence of any person, partnership, 
or corporation being investigated or proceeded against. An appropriate 
ATF officer shall also have the power to require by subpoena the 
attendance and testimony of witnesses and the production of all such 
documentary evidence relating to any matter under investigation, upon a 
satisfactory showing the requested evidence may reasonably be expected 
to yield information relevant to any matter being investigated under the 
Act.
    (c) Reports required by the appropriate ATF officer--(1) General. 
The appropriate ATF officer may, as part of a trade practice 
investigation of an industry member, require such industry member to 
submit a written report containing information on sponsorships, 
advertisements, promotions, and other activities pertaining to its 
business subject to the Act conducted by, or on behalf of, or benefiting 
the industry member.
    (2) Preparation. The report will be prepared by the industry member 
in letter form, executed under the penalties of perjury, and will 
contain the information specified by the appropriate ATF officer. The 
period covered by the report will not exceed three years.
    (3) Filing. The report will be filed in accordance with the 
instructions of the appropriate ATF officer.

(Approved by the Office of Management and Budget under control number 
1512-0392)

[T.D. ATF-364, 60 FR 20426, Apr. 26, 1995. Redesignated and amended by 
T.D. ATF-428, 65 FR 52020, Aug. 28, 2000]

[[Page 233]]



                         Subpart B--Definitions



Sec. 10.11  Meaning of terms.

    As used in this part, unless the context otherwise requires, terms 
have the meanings given in this section. Any other term defined in the 
Federal Alcohol Administration Act and used in this part shall have the 
meaning assigned to it by that Act.
    Act. The Federal Alcohol Administration Act.
    Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this part by ATF Order 
1130.7, Delegation Order--Delegation of the Director's Authorities in 27 
CFR parts 6, 8, 10 and 11.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC.
    Industry member. Any person engaged in business as a distiller, 
brewer, recitifier, blender, or other producer, or as an importer or 
wholesaler of distilled spirits, wine or malt beverages, or as a 
bottler, or warehouseman and bottler, of distilled spirits; industry 
member does not include an agency of a State or political subdivision 
thereof, or an officer or employee of such agency.
    Officer. All corporate executives, including presidents, vice 
presidents, treasurers, and chief executive officers.
    Product. Distilled spirits, wine or malt beverages, as defined in 
the Federal Alcohol Administration Act.
    Trade buyer. Any person who is a wholesaler or retailer of distilled 
spirits, wine, or malt beverages.

[T.D. ATF-74, 45 FR 63257, Sept. 30, 1980, as amended by T.D. ATF-364, 
60 FR 20426, Apr. 26, 1995; T.D. ATF-428, 65 FR 52020, Aug. 28, 2000]



                      Subpart C--Commercial Bribery



Sec. 10.21  Commercial bribery.

    It is unlawful for an industry member, directly or indirectly or 
through an affiliate, to induce a trade buyer to purchase the industry 
member's products, to the complete or partial exclusion of products sold 
or offered for sale by other persons in interstate or foreign commerce, 
by offering or giving a bonus, premium, compensation, or other thing of 
value to any officer, employee, or representative of the trade buyer. 
The bonus, premium, compensation, or other thing of value need not be 
offered or given for the purpose of directly inducing a trade buyer to 
purchase from the seller, but rather is applicable if an industry member 
induces officers, employees or representatives of the trade buyer to 
promote sales of the industry member's products and thereby indirectly 
induces the trade buyer to purchase from the industry member.



Sec. 10.22  Employee associations.

    Gifts, donations, and other payments such as for advertising in 
publications, by an industry member, to trade buyer employee 
associations are considered the same as bonuses, premiums, compensation, 
or other things of value given directly to the employees, since the 
benefits resulting from the gifts or payments flow to the individual 
members of the association.



Sec. 10.23  Gifts or payments to wholesalers.

    Although industry members are not prohibited from offering or giving 
money or other things of value to a wholesale entity (i.e., the 
corporation, partnership, or individual who owns the business), the 
wholesaler will be considered as acting as a mere conduit between its 
officers, employees, or representatives and the industry member, if:
    (a) There is an agreement or understanding, implied or explicit, 
that the money or thing of value will be passed on to the officers, 
employees, or representatives, or
    (b) It is obvious by the very nature of the item given (such as a 
free trip) that a pass through to the officers, employees, or 
representatives is clearly contemplated, or
    (c) The records of the recipient wholesaler do not accurately 
reflect such money or item as an asset or the wholesale entity, thus 
being subject to all ensuing tax consequences as distinguished from the 
receipt of the money

[[Page 234]]

or item as a personal asset of an officer, employee, or representative.



Sec. 10.24  Sales promotion contests.

    Sales contests sponsored by an industry member which offer prizes 
directly or indirectly to trade buyer officers, employees or 
representatives are inducements within the meaning of the Act.



                          Subpart D--Exclusion

    Source: T.D. ATF-364, 60 FR 20427, Apr. 26, 1995, unless otherwise 
noted.



Sec. 10.51  Exclusion, in general.

    (a) Exclusion, in whole or in part occurs:
    (1) When a practice by an industry member, whether direct, indirect, 
or through an affiliate, places (or has the potential to place) trade 
buyer independence at risk by means of a tie or link between the 
industry member and trade buyer or by any other means of industry member 
control over the trade buyer, and
    (2) Such practice results in the trade buyer purchasing less than it 
would have of a competitor's product.
    (b) Section 10.52 lists practices that create a tie or link that 
places trade buyer independence at risk. Section 10.53 is reserved and 
will list practices not resulting in exclusion. Section 10.54 lists the 
criteria used for determining whether other practices can put trade 
buyer independence at risk.



Sec. 10.52  Practice which puts trade buyer independence at risk.

    The practice specified in this section is deemed to place trade 
buyer independence at risk within the description of exclusion in 
Sec. 10.51: Industry member payments of money to the employee(s) of a 
trade buyer without the knowledge or consent of the trade buyer-employer 
in return for the employee agreeing to order distilled spirits, wine, or 
malt beverages from the industry member. The practice enumerated here is 
an example and does not constitute a complete list of those situations 
which result in such control.



Sec. 10.53  Practices not resulting in exclusion. [Reserved]



Sec. 10.54  Criteria for determining trade buyer independence.

    The criteria specified in this section are indications that a 
particular practice between an industry member and an officer, employee, 
or representative of a trade buyer, other than those in Sec. 10.52, 
places trade buyer independence at risk. A practice need not meet all of 
the criteria specified in this section in order to place trade buyer 
independence at risk.
    (a) The practice restricts or hampers the free economic choice of a 
trade buyer to decide which products to purchase or the quantity in 
which to purchase them for sale to retailers and consumers.
    (b) The industry member obligates the trade buyer to participate in 
the promotion to obtain the industry member's product.
    (c) The trade buyer has a continuing obligation to purchase or 
otherwise promote the industry member's product.
    (d) The trade buyer has a commitment not to terminate its 
relationship with the industry member with respect to purchase of the 
industry member's products.
    (e) The practice involves the industry member in the day-to-day 
operations of the trade buyer. For example, the industry member controls 
the trade buyer's decisions on which brand of products to purchase, the 
pricing of products, or the manner in which the products will be 
displayed on the trade buyer's premises.
    (f) The practice is discriminatory in that it is not offered to all 
trade buyers in the local market on the same terms without business 
reasons present to justify the difference in treatment.



PART 11--CONSIGNMENT SALES--Table of Contents




                     Subpart A--Scope of Regulations

Sec.
11.1  General.
11.2  Territorial extent.
11.3  Application.
11.4  Jurisdictional limits.
11.5  Delegations of the Director.
11.6  Administrative provisions.

[[Page 235]]

                         Subpart B--Definitions

11.11  Meaning of terms.

                 Subpart C--Unlawful Sales Arrangements

11.21  General.
11.22  Consignment sales.
11.23  Sales conditioned on the acquisition of other products.
11.24  Other than a bona fide sale.

  Subpart D--Rules for the Return of Distilled Spirits, Wine, and Malt 
                                Beverages

11.31  General.

     Exchanges and Returns for Ordinary and Usual Commercial Reasons

11.32  Defective products.
11.33  Error in products delivered.
11.34  Products which may no longer be lawfully sold.
11.35  Termination of business.
11.36  Termination of franchise.
11.37  Change in product.
11.38  Discontinued products.
11.39  Seasonal dealers.

   Exchanges and Returns for Reasons Not Considered Ordinary and Usual

11.45  Overstocked and slow-moving products.
11.46  Seasonal products.

    Authority: 15 U.S.C. 49-50; 27 U.S.C. 202 and 205.

    Source: T.D. ATF-74, 45 FR 63258, Sept. 23, 1980, unless otherwise 
noted.



                     Subpart A--Scope of Regulations



Sec. 11.1  General.

    The regulations in this part, issued pursuant to section 105 of the 
Federal Alcohol Administration Act (27 U.S.C. 205), specify arrangements 
which are consignment sales under section 105(d) of the Act and contain 
guidelines concerning return of distilled spirits, wine and malt 
beverages from a trade buyer. This part does not attempt to enumerate 
all of the practices prohibited by section 105(d) of the Act. Nothing in 
this part shall operate to exempt any person from the requirements of 
any State law or regulation.

[T.D. ATF-364, 60 FR 20427, Apr. 26, 1995]



Sec. 11.2  Territorial extent.

    This part applies to the several States of the United States, the 
District of Columbia, and Puerto Rico.



Sec. 11.3  Application.

    (a) General. The regulations in this part apply to transactions 
between industry members and trade buyers.
    (b) Transactions involving State agencies. The regulations in this 
part apply to transactions involving State agencies operating as 
retailers or wholesalers.



Sec. 11.4  Jurisdictional limits.

    (a) General. The regulations in this part apply where:
    (1) The industry member sells, offers for sale, or contracts to sell 
to a trade buyer engaged in the sale of distilled spirits, wines, or 
malt beverages, or for any such trade buyer to purchase, offer to 
purchase, or contract to purchase, any such products on consignment or 
under conditional sale or with the privilege of return or on any basis 
other than a bona fide sale, or where any part of such transaction 
involves, directly or indirectly, the acquisition by such person from 
the trade buyer or the agreement to acquire from the trade buyer other 
distilled spirits, wine, or malt beverages; and,
    (2) If: (i) The sale, purchase, offer or contract is made in the 
course of interstate or foreign commerce; or
    (ii) The industry member engages in using the practice to such an 
extent as substantially to restrain or prevent transactions in 
interstate or foreign commerce in any such products; or
    (iii) The direct effect of the sale, purchase, offer or contract is 
to prevent, deter, hinder, or restrict other persons from selling or 
offering for sale any such products to such trade buyer in interstate or 
foreign commerce.
    (b) Malt beverages. In the case of malt beverages, this part applies 
to transactions between a retailer in any State and a brewer, importer, 
or wholesaler of malt beverages inside or outside such State only to the 
extent that the law of such State imposes requirements similar to the 
requirements of section 5(d) of the Federal Alcohol Administration Act 
(27 U.S.C. 205(d)), with respect to similar transactions between a 
retailer in such State and a brewer, importer, or wholesaler of malt 
beverages in such State.

[[Page 236]]



Sec. 11.5  Delegations of the Director.

    Most of the regulatory authorities of the Director contained in this 
part 11 are delegated to appropriate ATF officers. These ATF officers 
are specified in ATF Order 1130.7, Delegation Order--Delegation of the 
Director's Authorities in 27 CFR Parts 6, 8, 10 and 11. ATF delegation 
orders, such as ATF Order 1130.7, are available to any interested person 
by mailing a request to the ATF Distribution Center, P.O. Box 5950, 
Springfield, Virginia 22150-5190, or by accessing the ATF web site 
(http://www.atf.treas.gov/).

[T.D. ATF-428, 65 FR 52021, Aug. 28, 2000]



Sec. 11.6  Administrative provisions.

    (a) General. The Act makes applicable the provisions including 
penalties of sections 49 and 50 of Title 15, United States Code, to the 
jurisdiction, powers and duties of the Director under this Act, and to 
any person (whether or not a corporation) subject to the provisions of 
law administered by the Director under this Act.
    (b) Examination and subpoena. Any appropriate ATF officer shall at 
all reasonable times have access to, for the purpose of examination, and 
the right to copy any documentary evidence of any person, partnership, 
or corporation being investigated or proceeded against. An appropriate 
ATF officer shall also have the power to require by subpoena the 
attendance and testimony of witnesses and the production of all such 
documentary evidence relating to any matter under investigation, upon a 
satisfactory showing the requested evidence may reasonably be expected 
to yield information relevant to any matter being investigated under the 
Act.

[T.D. ATF-364, 60 FR 20427, Apr. 26, 1995. Redesignated and amended by 
T.D. ATF-428, 65 FR 52021, Aug. 28, 2000]



                         Subpart B--Definitions



Sec. 11.11  Meaning of terms.

    As used in this part, unless the context otherwise requires, terms 
have the meanings given in this section. Any other term defined in the 
Federal Alcohol Administration Act and used in this part shall have the 
meaning assigned to it by that Act.
    Act. The Federal Alcohol Administration Act.
    Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this part by ATF Order 
1130.7, Delegation Order--Delegation of the Director's Authorities in 27 
CFR parts 6, 8, 10 and 11.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC.
    Exchange. The transfer of distilled spirits, wine, or malt beverages 
from a trade buyer to an industry member with other products taken as a 
replacement.
    Industry member. Any person engaged in business as a distiller, 
brewer, rectifier, blender, or other producer, or as an importer or 
wholesaler of distilled spirits, wine or malt beverages, or as a bottler 
or warehouseman and bottler, of distilled spirits.
    Product. Distilled spirits, wine or malt beverages, as defined in 
the Federal Alcohol Administration Act.
    Retailer. Any person engaged in the sale of distilled spirits, wine 
or malt beverages to consumers. A wholesaler who makes incidental retail 
sales representing less than five percent of the wholesaler's total 
sales volume for the preceding two-month period shall not be considered 
a retailer with respect to such incidental sales.
    Return. The transfer of distilled spirits, wine, or malt beverages 
from a trade buyer to the industry member from whom purchased, for cash 
or credit.
    Trade buyer. Any person who is a wholesaler or retailer of distilled 
spirits, wine or malt beverages.

[T.D. ATF-74, 45 FR 63258, Sept. 23, 1980, as amended by T.D. ATF-364, 
60 FR 20427, Apr. 26, 1995; T.D. ATF-428, 65 FR 52021, Aug. 28, 2000]

[[Page 237]]



                 Subpart C--Unlawful Sales Arrangements



Sec. 11.21  General.

    It is unlawful for an industry member to sell, offer for sale, or 
contract to sell to any trade buyer, or for any such trade buyer to 
purchase, offer to purchase, or contract to purchase any products (a) on 
consignment; or (b) under conditional sale; or (c) with the privilege of 
return; or (d) on any basis other than a bona fide sale; or (e) if any 
part of the sale involves, directly or indirectly, the acquisition by 
such person of other products from the trade buyer or the agreement to 
acquire other products from the trade buyer. Transactions involving the 
bona fide return of products for ordinary and usual commercial reasons 
arising after the product has been sold are not prohibited.



Sec. 11.22  Consignment sales.

    Consignment sales are arrangements wherein the trade buyer is under 
no obligation to pay for distilled spirits, wine, or malt beverages 
until they are sold by the trade buyer.



Sec. 11.23  Sales conditioned on the acquisition of other products.

    (a) General. A sale in which any part of the sale involves, directly 
or indirectly, the acquisition by the industry member from the trade 
buyer, or the agreement, as a condition to present or future sales, to 
accept other products from the trade buyer is prohibited.
    (b) Exchange. The exchange of one product for another is prohibited 
as a sales transaction conditioned on the acquisition of other products. 
However, the exchange of a product for equal quantities (case for case) 
of the same type and brand of product, in containers of another size is 
not considered an acquisition of ``other'' products and is not 
prohibited if there was no direct or implied privilege of return 
extended when the product was originally sold. Industry members may make 
price adjustments on products eligible for exchange under this 
paragraph.



Sec. 11.24  Other than a bona fide sale.

    ``Other than a bona fide sale'' includes, but is not limited to, 
sales in connection with which the industry member purchases or rents 
the display, shelf, storage or warehouse space to be occupied by such 
products at premises owned or controlled by the retailer.

[T.D. ATF-364, 60 FR 20427, Apr. 26, 1995]



  Subpart D--Rules for the Return of Distilled Spirits, Wine, and Malt 
                                Beverages



Sec. 11.31  General.

    (a) Section 5(d) of the Act provides, in part, that it is unlawful 
to sell, offer to sell, or contract to sell products with the privilege 
of return for any reason, other than those considered to be ``ordinary 
and usual commercial reasons'' arising after the product has been sold. 
Sections 11.32 through 11.39 specify what are considered ``ordinary and 
usual commercial reasons'' for the return of products, and outline the 
conditions and limitations for such returns.
    (b) An industry member is under no obligation to accept the return 
of products for the reasons listed in Secs. 11.32 through 11.39.

     Exchanges and Returns for Ordinary and Usual Commercial Reasons



Sec. 11.32  Defective products.

    Products which are unmarketable because of product deterioration, 
leaking containers, damaged labels or missing or mutilated tamper 
evident closures may be exchanged for an equal quantity of identical 
products or may be returned for cash or credit against outstanding 
indebtedness.

[T.D. ATF-364, 60 FR 20427, Apr. 26, 1995]



Sec. 11.33  Error in products delivered.

    Any discrepancy between products ordered and products delivered may 
be corrected, within a reasonable period after delivery, by exchange of 
the products delivered for those which were ordered, or by a return for 
cash or credit against outstanding indebtedness.



Sec. 11.34  Products which may no longer be lawfully sold.

    Products which may no longer be lawfully sold may be returned for 
cash or credit against outstanding indebtedness. This would include 
situations

[[Page 238]]

where, due to a change in regulation or administrative procedure over 
which the trade buyer or an affiliate of the trade buyer has no control, 
a particular size or brand is no longer permitted to be sold.

[T.D. ATF-364, 60 FR 20428, Apr. 26, 1995]



Sec. 11.35  Termination of business.

    Products on hand at the time a trade buyer terminates operations may 
be returned for cash or credit against outstanding indebtedness. This 
does not include a temporary seasonal shutdown (see Sec. 11.39).

[T.D. ATF-364, 60 FR 20428, Apr. 26, 1995]



Sec. 11.36  Termination of franchise.

    When an industry member has sold products for cash or credit to one 
of its wholesalers and the distributorship arrangement is subsequently 
terminated, stocks of the product on hand may be returned for cash or 
credit against outstanding indebtedness.



Sec. 11.37  Change in product.

    A trade buyer's inventory of a product which has been changed in 
formula, proof, label or container (subject to Sec. 11.46) may be 
exchanged for equal quantities of the new version of that product.



Sec. 11.38  Discontinued products.

    When a producer or importer discontinues the production or 
importation of a product, a trade buyer's inventory of that product may 
be returned for cash or credit against outstanding indebtedness.



Sec. 11.39  Seasonal dealers.

    Industry members may accept the return of products from retail 
dealers who are only open a portion of the year, if the products are 
likely to spoil during the off season. These returns will be for cash or 
for credit against outstanding indebtedness.

   Exchanges and Returns for Reasons Not Considered Ordinary and Usual



Sec. 11.45  Overstocked and slow-moving products.

    The return or exchange of a product because it is overstocked or 
slow-moving does not constitute a return for ``ordinary and usual 
commercial reasons.''



Sec. 11.46  Seasonal products.

    The return or exchange of products for which there is only a limited 
or seasonal demand, such as holiday decanters and certain distinctive 
bottles, does not constitute a return for ``ordinary and usual 
commercial reasons.''



PART 12--FOREIGN NONGENERIC NAMES OF GEOGRAPHIC SIGNIFICANCE USED IN THE DESIGNATION OF WINES--Table of Contents




                      Subpart A--General Provisions

Sec.
12.1  Scope.
12.2  Territorial extent.
12.3  Procedure for recognition of foreign distinctive designations.

Subpart B [Reserved]

     Subpart C--Foreign Nongeneric Names of Geographic Significance

12.21  List of examples of names by country.

 Subpart D--Foreign Nongeneric Names Which Are Distinctive Designations 
                         of Specific Grape Wines

12.31  List of approved names by country.

    Authority: 27 U.S.C. 205.

    Source: T.D. ATF-296, 55 FR 17967, Apr. 30, 1990, unless otherwise 
noted.



                      Subpart A--General Provisions



Sec. 12.1  Scope.

    The regulations in this part relate to foreign names of geographic 
significance used in the designation of wines which are recognized as 
nongeneric under 27 CFR 4.24, and include those nongeneric names which 
the Director has found to be distinctive designations of wine, as 
defined in Sec. 4.24(c)(1) of this chapter.



Sec. 12.2  Territorial extent.

    This part applies to the several States of the United States, the 
District of Columbia, and Puerto Rico.

[[Page 239]]



Sec. 12.3  Procedure for recognition of foreign distinctive designations.

    (a) Procedure. Under the provisions of 27 CFR 70.701(c), the 
Director may approve petitions requesting ATF recognition of names of 
geographic significance which are the distinctive designations of 
specific wines under Sec. 4.24(c) of this chapter.
    (b) Format. A petition shall be in the form of a letterhead 
application requesting that ATF recognize the distinctive wine 
designation listed in their petition. The petition should present 
evidence to support a finding that the geographic designation is known 
to the U.S. consumer and trade as the designation of a specific wine of 
a particular place or region, distinguishable from all other wines. All 
background material and supporting data submitted will be made part of 
the application and will be considered in the review process.

[T.D. ATF-296, 55 FR 17967, Apr. 30, 1990, as amended by T.D. ATF-463, 
66 FR 42733, Aug. 15, 2001]

Subpart B [Reserved]



     Subpart C--Foreign Nongeneric Names of Geographic Significance



Sec. 12.21  List of examples of names by country.

    The names listed in this section are examples of foreign nongeneric 
names of geographic significance under Sec. 4.24(c) (1) and (2) of this 
chapter.
    (a) Argentina: Alto Colorado, Valles Calchaquies.
    (b) Australia: Adelaide, Barossa Valley, Clare Valley, Cowra, 
Forbes, Geelong, Goulburn Valley, Granite Belt, Great Western, Hunter 
Valley, McLaren Vale, Mudgee, Murray River Valley, New South Wales, 
North Richmond, Queensland, South Australia, Swan Valley, Tasmania, 
Victoria, Western Australia, Yarra Valley.
    (c) Austria: Bisamberg-Kreuzenstein, Burgenland, Carnuntum, 
Frauenweingarten, Kapellenweg, Kirchberger Wagram, Matzner Hugel, 
Niederosterreich, Nussberg, Pinkatal, Schatzberg, Sekt, Wachau, 
Weststeiermark, Wien.
    (d) Federal Republic of Germany: Ahr, Bacharach, Bad Durkheim, 
Baden, Badisches Frankenland, Badstube, Bayerischer Bodensee, 
Bernkastel, Bingen, Breisgau, Deidesheimer Hofstuck, Dhroner Hofberger, 
Erdener Treppchen, Graach, Graben, Hessische Bergstrasse, Himmelreich, 
Hochheimer Holle, Johannisberg, Klosterberg, Kocher-Jagst-Tauber, 
Kreuznach, Kurfurstlay, Loreley, Maindreieck, Mainviereck, 
Markgraflerland, Mittelrhein, Moseltor, Nahe, Nierstein, Obermosel, 
Oppenheimer Krotenbrunnen, Ortenau, Remstal-Stuttgart, Rhein-Burgengau, 
Rheinfalz, Rheingau, Rheinhessen, Schloss Bockelheim, Sekt, 
Siebengebirge, Starkenburg, Steigerwald, Sudliche Weinstrasse, Trier, 
Umstadt, Urziger Wurzgarten, Walporzheim/Ahrtal, Wiltinger Scharzberg, 
Winkeler Jesuitengarten, Wonnegau, Wurttemberg, Zell/Mosel.
    (e) France: Ajaccio, Arbois, Auxey-Duresses, Bandol, Bearn, Bellet, 
Bergerac, Blagny, Blaye, Bonnezeaux, Bourg, Buzet, Cadillac, Cahors, 
Canon-Fronsac, Cassis, Cerons, Charlemagne, Chateau Chalon, Chateau-
Grillet, Chinon, Chorey-les-Beaunes, Clos de Tart, Clos des Lambrays, 
Clos Saint-Denis, Collioure, Condrieu, Cornas, Coteaux de l'Aubance, 
Coteaux du Languedoc, Coteaux du Loir, Coteaux du Lyonnais, Coteaux du 
Tricastin, Cotes de Duras, Cotes de Provence, Cotes du Jura, Cotes du 
Roussillon, Cotes du Ventoux, Crepy, Dezize-les-Maranges, Faugeres, 
Fitou, Fixin, Gaillac, Gigondas, Givry, Gros Plant, Irouleguy, 
Jasnieres, Jurancon, Ladoix, L'Etoile, Limoux, Lirac, Loupiac, Madiran, 
Mazis-Chambertin, Menetou Salon, Minervois, Monbazillac, Montagny, 
Monthelie, Montlouis, Montravel, Moulis, Muscat de Beaumes de Venise, 
Muscat de Frontignan, Neac, Pacherenc du Vic Bilh, Palette, Pecharmant, 
Pernand-Vergelesses, Picpoul-de-Pinet, Pineau des Charentes, Pouilly-
Loche, Quarts-de-Chaume, Quincy, Regnie, Reuilly, Rosette, Rully, Saint-
Aubin, Saint-Chinian, Saint-Georges-d'Orques, Saint-Joseph, Saint-
Nicolas-de-Bourgueil, Saint-Peray, Saint-Romain, Saint-Veran, Sainte-
Croix-du-Mont, Saussignac, Sauvignon de Saint-Bris,

[[Page 240]]

Savennieres, Seyssel, Vin de Lavilledieu, Vin de pays de l'Aude, Vin de 
Savoie, Vin du Bugey, Vin du Haut-Poitou.
    (f) Greece: Aghialos, Amynteon, Archanes, Daphnes, Goumenissa, 
Kantza, Mantinea, Mavrodaphni Cefalonia, Mavrodaphni Patras, Moschatos 
Lemnos, Moschatos Rhodes, Naoussa, Nemea, Paros, Peza, Plagies Melitona, 
Rapsani, Retsina Attica, Retsina Megaron, Samos, Santorini, Sitia, 
Sitsa.
    (g) Italy: Abruzzo, Acqui, Affile, Aleatico di Gradoli, Alto Mincio, 
Avellino, Barbera del Monferrato, Basilicata, Bianco di Custoza, Bianco 
Pisano di S. Torpe, Boca, Campidano di Terralba, Castelli di Jesi, 
Chieri, Cinque Terre, Ciro, Colli Albani, Colli del Trasimeno, Diano 
d'Alba, Est! Est! Est! di Montefiascone, Etna, Fara, Faro, Franciacorta, 
Gabiano, Gavi, Ghemme, Ischia, Lambrusco Reggiano, Lamezia, Langhe 
Monregalesi, Lessona, Lipari, Melissa, Metauro, Molise, Olevano Romano, 
Oristano, Ovada, Parrina, Piceno, Piemonte, Piglio, Pollino, Puglia, 
Romagna, Rosso Barletta, Savuto, Sicilia, Sorbara, Sulcis, Taurasi, 
Torgiano, Trani, Valtellina Sassella, Velletri, Veneto, Vermentino di 
Gallura, Vesuvio, Vulture, Zagarolo.
    (h) New Zealand: Blenheim, Canterbury, Central Otago, Gisborne, 
Hawkes Bay, Henderson, Marlborough, Nelson, Northland, Richmond, Rodney, 
South Auckland, Te Kauwhata, Wanganui, Wellington.
    (i) Portugal: Algarve, Alijo, Bairrada, Baixo Corgo, Basto, Beiras, 
Belem, Braga, Bucelas, Camara de Lobos, Campanario, Cantahede, 
Carcavelos, Cartaxo, Chamusca, Colares, Douro, Estremadura, Favaios, 
Lafoes, Lagoa, Lagos, Lamego, Lousada, Meda, Mesao Frio, Moncao, 
Moscatel de Setubal, Murca, Nelas, Penafiel, Pico, Portimao, Preces, 
Ribatejo-Oeste, Sabrosa, Santa Luzia, Sao Joao, Sao Martinho, Sao Pedro, 
Tavira, Torres Vedras, Tras-os-Montes, Viana do Castelo, Vila Real, 
Vinho Verde.
    (j) Romania: Alba Iulia, Arges, Bistrita-Nasaud, Bujoru, Cotesti, 
Cotnari, Dealu Mare, Dealurile, Dragasani, Drobeta Turnuseverin, Istria, 
Ivesti, Jidvei, Medias, Mehedinti, Minis, Moldovei, Murfatlar, 
Nicoresti, Odobesti, Oltina, Panciu, Recas, Sarica Niculitel, Sebes, 
Segarcea, Tecuci-Galati, Teremia, Tirnave.
    (k) Spain: Alella, Alicante, Almansa, Ampurdan-Costa Brava, Campo de 
Borja, Carinena, Cava, Condado de Huelva, Jumilla, La Mancha, 
Manzanilla-Sanlucar de Barrameda, Mentrida, Montilla-Moriles, Navarra, 
Penedes, Priorato, Ribeiro, Ribera del Duero, Rueda, Tarragona, Utiel-
Requena, Valdeorras, Valencia, Yecla.
    (l) Switzerland: Agarn, Aire-la-Ville, Argovie, Auvernier, Avully, 
Berne, Bernex, Bonvillars, Bratsch, Chalais, Chamoson, Cressier, Cully, 
Dardagny, Dezaley, Epesses, Erlenbach, Friburg, Fully, Geneve, Grisons, 
Gy, Herrliberg, Hornussen, La Cote, Lavaux, Lens, Limmattal, Lucerne, 
Lutry, Meilen, Montreux, Neuchatel, Niedergesteln, Riex, Rivaz, 
Schaffhouse, Schlossgut Herdern, Schwyz, Suisse, Swiss, Tessin, 
Thurgovie, Valais, Varen/Varone, Vaud, Veyrier, Villette, Zeneggen, 
Zurcher Unterland, Zurich.
    (m) Yugoslavia: Blatina Mostar, Bolski Plavac, Borje, Brodska 
Grasevina, Crnogorski Vranac, Dingac, Erdutski Burgundac Bijeli, Faros, 
Grk Lumbarda, Ilocka Frankovka, Kutjevacka Grasevina, Merlot Bujstine, 
Plesivicki Rizling Rajnski, Porecki Merlot, Postup, Primostenski Babic, 
Smedereveski Sovinjon, Vinaracki Merlo, Viska Vugava, Vrsacki Rizling, 
Zlata Radgonska Penina.



 Subpart D--Foreign Nongeneric Names Which Are Distinctive Designations 
                         of Specific Grape Wines



Sec. 12.31  List of approved names by country.

    The names listed in this section are foreign nongeneric names of 
geographic significance which are also recognized by the Director as 
distinctive designations of specific grape wines, in accordance with 
Sec. 4.24 (c) (1) and (3) of this chapter.
    (a) Federal Republic of Germany: Bernkasteler Doctor (Doktor), 
Deidesheimer, Dexheimer Doktor, Erbacher Marcobrunn, Forster, Forster

[[Page 241]]

Jesuitengarten, Graacher Himmelreich, Liebfraumilch, Liebfrauenmilch, 
Mosel, Mosel-Saar-Ruwer, Ockfener Bockstein, Piesporter Goldtropfchen, 
Piesporter Michelsberg, Piesporter Treppchen, Rudesheimer, 
Scharzhofberger, Schloss Johannisberger, Schloss Vollrads, Wehlener 
Sonnenuhr, Zeller Schwarze Katz.
    (b) France: Aloxe-Corton, Alsace or Vin d'Alsace, Anjou, Barsac, 
Batard-Montrachet, Beaujolais, Beaujolais Villages, Beaune, Bonnes 
Mares, Bordeaux, Bordeaux Blanc, Bordeaux Rouge, Bourgogne, Brouilly, 
Chambertin, Chambolle-Musigny, Charmes-Chambertin, Chassagne-Montrachet, 
Chateau Lafite, Chateau Margaux, Chateau Yquem, Chateauneuf-du-Pape, 
Chenas, Chevalier-Montrachet, Chiroubles, Clos de la Roche, Clos de 
Vougeot, Corton, Corton-Charlemagne, Cote de Beaune, Cote de Beaune-
Villages, Cote de Brouilly, Cote de Nuits, Cote de Nuits-Villages, Cote 
Rotie, Coteaux du Layon, Cotes du Rhone, Echezeaux, Entre-Deux-Mers, 
Fleurie, Gevrey-Chambertin, Grands Echezeaux, Graves, Haut Medoc, 
Hermitage, La Tache, Loire, Macon, Margaux, Medoc, Mercurey, Meursault, 
Montrachet, Morgon, Moulin-a-Vent, Muscadet, Musigny, Nuits or Nuits-
Saint-Georges, Pauillac, Pomerol, Pommard, Pouilly-Fuisse, Pouilly Fume, 
Puligny-Montrachet, Rhone, Richebourg, Romanee-Conti, Romanee Saint-
Vivant, Rose d'Anjou, Saint-Amour, Saint-Emilion, Saint-Estephe, Saint-
Julien, Sancerre, Santenay, Saumur, Savigny or Savigny-les-Beaunes, 
Tavel, Touraine, Volnay, Vosne-Romanee, Vouvray.
    (c) Italy: Asti Spumante, Barbaresco, Barbera d'Alba, Barbera 
d'Asti, Bardolino, Barolo, Brunello di Montalcino, Dolcetto d'Alba, 
Frascati, Gattinara, Lacryma Christi, Nebbiolo d'Alba, Orvieto, Soave, 
Valpolicella, Vino Nobile de Montepulciano.
    (d) Portugal: Dao, Oporto, Porto, or Vinho do Porto.
    (e) Spain: Lagrima, Rioja.



PART 13--LABELING PROCEEDINGS--Table of Contents




            Subpart A--Scope and Construction of Regulations

Sec.
13.1  Scope of part.
13.2  Delegations of the Director

                         Subpart B--Definitions

13.11  Meaning of terms.

                         Subpart C--Applications

13.20  Forms prescribed.
13.21  Application for certificate.
13.22  Withdrawal of applications.
13.23  Notice of denial.
13.25  Appeal of qualification or denial.
13.26  Decision after appeal of qualification or denial.
13.27  Second appeal of qualification or denial.

             Subpart D--Revocations of Specific Certificates

13.41  Authority to revoke certificates.
13.42  Notice of proposed revocation.
13.43  Decision after notice of proposed revocation.
13.44  Appeal of revocation.
13.45  Final decision after appeal.

         Subpart E--Revocation by Operation of Law or Regulation

13.51  Revocation by operation of law or regulation.
13.52  Notice of revocation.
13.53  Appeal of notice of revocation.
13.54  Decision after appeal.

                        Subpart F--Miscellaneous

13.61  Publicity of information.
13.62  Third-party comment on certificates.
13.71  Informal conferences.
13.72  Effective dates of revocations.
13.73  Effect of revocation.
13.74  Surrender of certificates.
13.75  Evidence of receipt by ATF.
13.76  Service on applicant or certificate holder.
13.81  Representation before ATF.
13.91  Computation of time.
13.92  Extensions.

    Authority: 27 U.S.C. 205(e), 26 U.S.C. 5301 and 7805.

    Source: T.D. ATF-406, 64 FR 2129, Jan. 13, 1999, unless otherwise 
noted.

[[Page 242]]


    Editorial Note: Nomenclature changes to part 13 appear by T.D. ATF-
449, 66 FR 19085, Apr. 13, 2001.



            Subpart A--Scope and Construction of Regulations



Sec. 13.1  Scope of part.

    The regulations in this part govern the procedure and practice in 
connection with the issuance, denial, and revocation of certificates of 
label approval, certificates of exemption from label approval, and 
distinctive liquor bottle approvals under 27 U.S.C. 205(e) and 26 U.S.C. 
5301. The regulations in this part also provide for appeal procedures 
when applications for label approval, exemptions from label approval, or 
distinctive liquor bottle approvals are denied, when such applications 
are approved with qualifications, or when these applications are 
approved and then subsequently revoked.



Sec. 13.2  Delegations of the Director.

    All of the regulatory authorities of the Director contained in part 
13 of the regulations are delegated to appropriate ATF officers. These 
ATF officers are specified in ATF Order 1130.21, Delegation Order--
Delegation of the Director's Authorities in 27 CFR Part 13--Labeling 
Proceedings. ATF delegation orders, such as ATF Order 1130.21, are 
available to any interested person by mailing a request to the ATF 
Distribution Center, P.O. Box 5950, Springfield, Virginia 22150-5950, or 
by accessing the ATF web site (http://www.atf.treas.gov).

[T.D. ATF-449, 66 FR 19085, Apr. 13, 2001]



                         Subpart B--Definitions



Sec. 13.11  Meaning of terms.

    Where used in this part and in forms prescribed under this part, 
where not otherwise distinctly expressed or manifestly incompatible with 
the intent thereof, terms shall have the meaning ascribed in this 
subpart. Words in the plural form shall include the singular, and vice 
versa, and words importing the masculine gender shall include the 
feminine. The terms ``include'' and ``including'' do not exclude things 
not enumerated that are in the same general class.
    Act. The Federal Alcohol Administration Act.
    Applicant. The permittee or brewer whose name, address, and basic 
permit number, or plant registry number, appears on an unapproved ATF F 
5100.31, application for a certificate of label approval, certificate of 
exemption from label approval, or distinctive liquor bottle approval.
    Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this part by ATF Order 
1130.21, Delegation Order--Delegation of the Director's Authorities in 
27 CFR Part 13--Labeling Proceedings.
    ATF. The Bureau of Alcohol, Tobacco and Firearms, Department of the 
Treasury, Washington, DC 20226.
    Brewer. Any person who brews beer (except a person who produces only 
beer exempt from tax under 26 U.S.C. 5053(e)) and any person who 
produces beer for sale.
    Certificate holder. The permittee or brewer whose name, address, and 
basic permit number, or plant registry number, appears on an approved 
ATF F 5100.31, certificate of label approval, certificate of exemption 
from label approval, or distinctive liquor bottle approval.
    Certificate of exemption from label approval. A certificate issued 
on ATF F 5100.31 which authorizes the bottling of wine or distilled 
spirits, under the condition that the product will under no 
circumstances be sold, offered for sale, shipped, delivered for 
shipment, or otherwise introduced by the applicant, directly or 
indirectly, into interstate or foreign commerce.
    Certificate of label approval. A certificate issued on ATF F 5100.31 
that authorizes the bottling or packing of wine, distilled spirits, or 
malt beverages, or the removal of bottled wine, distilled spirits, or 
malt beverages from customs custody for introduction into commerce, as 
long as the project bears labels identical to the labels affixed to the 
face of the certificate, or labels with changes authorized by the 
certificate.

[[Page 243]]

    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC.
    Distilled spirits. Ethyl alcohol, hydrated oxide of ethyl, spirits 
of wine, whisky, rum, brandy, gin, and other distilled spirits, 
including all dilutions and mixtures thereof for nonindustrial use. The 
term ``distilled spirits'' does not include mixtures containing wine, 
bottled at 48 degrees of proof or less, if the mixture contains more 
than 50 percent wine on a proof gallon basis.
    Distinctive liquor bottle. A liquor bottle of distinctive shape or 
design.
    Distinctive liquor bottle approval. Approval issued on ATF F 5100.31 
that authorizes the bottling of distilled spirits, or the removal of 
bottled distilled spirits from customs custody for introduction into 
commerce, as long as the bottle is identical to the photograph affixed 
to the face of the form.
    Interstate or foreign commerce. Commerce between any State and any 
place outside that State, or commerce within any Territory or the 
District of Columbia, or between points within the same State but 
through any place outside that State.
    Liquor bottle: A bottle made of glass or earthenware, or of other 
suitable material approved by the Food and Drug Administration, which 
has been designed or is intended for use as a container for distilled 
spirits for sale for beverage purposes, and which has been determined by 
the appropriate ATF officer to protect the revenue adequately.
    Malt beverage. A beverage made by the alcoholic fermentation of an 
infusion or decoction, or combination of both, in potable brewing water, 
of malted barley with hops, or their parts, or their products, and with 
or without other malted cereals, and with or without the addition of 
unmalted or prepared cereals, other carbohydrates, or products prepared 
therefrom, and with or without the addition of carbon dioxide, and with 
or without other wholesome products suitable for human food consumption.
    Permittee. Any person holding a basic permit under the Federal 
Alcohol Administration Act.
    Person. Any individual, partnership, joint stock company, business 
trust, association, corporation, or other form of business enterprise, 
including a receiver, trustee, or liquidating agent and including an 
officer or employee of any agency of a State or political subdivision 
thereof.
    United States. The several States and Territories and the District 
of Columbia; the term ``State'' includes a Territory and the District of 
Columbia; and the term ``Territory'' means the Commonwealth of Puerto 
Rico.
    Use of other terms. Any other term defined in the Federal Alcohol 
Administration Act and used in this part shall have the same meaning 
assigned to it by the Act.
    Wine. Wine as defined in section 610 and section 617 of the Revenue 
Act of 1918 (26 U.S.C. 3036, 3044, 3045) and other alcoholic beverages 
not so defined, but made in the manner of wine, including sparkling and 
carbonated wine, wine made from condensed grape must, wine made from 
other agricultural products than the juice of sound, ripe grapes, 
imitation wine, compounds sold as wine, vermouth, cider, perry, and 
sake; in each instance only if containing not less than 7 percent, and 
not more than 24 percent of alcohol by volume, and if for nonindustrial 
use.

[T.D. ATF-406, 64 FR 2129, Jan. 13, 1999, as amended by T.D. ATF-449, 66 
FR 19085, Apr. 13, 2001]



                         Subpart C--Applications



Sec. 13.20  Forms prescribed.

    (a) The appropriate ATF officer is authorized to prescribe all forms 
required by this part. All of the information called for in each form 
must be furnished as indicated by the headings on the form and the 
instructions on or pertaining to the form. In addition, the information 
called for in each form is that which is required by this part. The form 
will be filed in accordance with the instructions on the form.
    (b) Forms may be requested from the ATF Distribution Center, P.O. 
Box 5950, Springfield, Virginia 22150-5950, or by accessing the ATF web 
site (http://www.atf.treas.gov).

[T.D. ATF-449, 66 FR 19085, Apr. 13, 2001]

[[Page 244]]



Sec. 13.21  Application for certificate.

    (a) Form of application. An applicant for a certificate of label 
approval, certificate of exemption from label approval, or distinctive 
liquor bottle approval, must send or deliver signed duplicate copies of 
ATF Form 5100.31, ``Application For And Certification/Exemption Of 
Label/Bottle Approval'' according to the instructions for that form. If 
the application complies with applicable laws and regulations, a 
certificate of label approval, certificate of exemption from label 
approval, or distinctive liquor bottle approval will be issued. If the 
approval is qualified in any manner, such qualifications will be set 
forth in the appropriate space on the form.
    (b) Time period for action on application. Within 90 days of receipt 
of an application, the appropriate ATF officer must notify the applicant 
whether the application has been approved or denied. The appropriate ATF 
officer may extend this period of time once, by an additional 90 days, 
if he or she finds that unusual circumstances require additional time to 
consider the issues presented by an application. If the appropriate ATF 
officer extends the period, he or she must notify the applicant by 
letter, along with a brief explanation of the issues presented by the 
label. If the applicant receives no decision from the appropriate ATF 
officer within the time periods set forth in this paragraph, the 
applicant may file an appeal as provided in Sec. 13.25.

[T.D. ATF-406, 64 FR 2129, Jan. 13, 1999, as amended by T.D. ATF-449, 66 
FR 19085, Apr. 13, 2001]



Sec. 13.22  Withdrawal of applications.

    A person who has filed an application for a certificate of label 
approval, certificate of exemption from label approval, or distinctive 
liquor bottle approval, may withdraw such application at any time before 
ATF takes action on the application.



Sec. 13.23  Notice of denial.

    Whenever an application for a certificate of label approval, 
certificate of exemption from label approval, or distinctive liquor 
bottle approval is denied, the appropriate ATF officer must issue to the 
applicant a notice of denial on ATF Form 5190.1, entitled ``ATF F 
5100.31 Correction Sheet,'' briefly setting forth the reasons why the 
label or bottle is not in compliance with the applicable laws or 
regulations. The applicant may then submit a new application for 
approval after making the necessary corrections.

[T.D. ATF-406, 64 FR 2129, Jan. 13, 1999, as amended by T.D. ATF-449, 66 
FR 19085, Apr. 13, 2001]



Sec. 13.25  Appeal of qualification or denial.

    (a) Form of appeal. If an applicant for a certificate of label 
approval, certificate of exemption from label approval, or distinctive 
liquor bottle approval wishes to appeal the qualified approval or denial 
of an application, the applicant may file a written appeal with the 
appropriate ATF officer within 45 days after the date of the notice of 
qualification or denial. The appeal should explain why the applicant 
believes that the label or bottle is in compliance with applicable laws 
and regulations. If no appeal is filed within 45 days after the date of 
the notice of qualification or denial, the notice will be the final 
decision of ATF.
    (b) Informal resolution. Applicants may choose to pursue informal 
resolution of disagreements regarding correction sheets or 
qualifications by requesting an informal conference with the appropriate 
ATF officer. However, formal administrative appeals must comply with the 
provisions of paragraph (a) of this section.



Sec. 13.26  Decision after appeal of qualification or denial.

    (a) Decision. After considering any written arguments or evidence 
presented by the applicant, the appropriate ATF officer must issue a 
written decision to the applicant. If the decision is that the qualified 
approval or denial should stand, a copy of the application, marked 
``appeal denied,'' must be returned to the applicant with an explanation 
of the decision and the specific laws or regulations relied upon

[[Page 245]]

in qualifying or denying the application. If the decision is that the 
certificate of label approval, certificate of exemption from label 
approval, or distinctive liquor bottle application should be approved 
without qualification, the applicant should resubmit ATF Form 5100.31 
and the certificate will be issued.
    (b) Time limits for decision. Within 90 days of receipt of an 
appeal, the appropriate ATF officer must notify the appellant whether 
the appeal has been granted or denied. If an applicant requests an 
informal conference as part of an appeal, as authorized in Sec. 13.71, 
the 90-day period will begin 10 days after the date of the conference to 
allow for consideration of any written arguments, facts or evidence 
submitted after the conference. The appropriate ATF officer may extend 
this period of time once by an additional 90 days if he or she finds 
that unusual circumstances require additional time to consider the 
issues presented by an appeal. If the appropriate ATF officer extends 
the period, he or she must notify the applicant by letter, briefly 
explaining the issues presented by the label. If the appellant receives 
no decision from the appropriate ATF officer within the time periods set 
forth in this paragraph, the appellant may appeal as provided in 
Sec. 13.27.
    (c) Judicial review. Prior to applying to the Federal courts for 
review, an applicant must first exhaust his or her administrative 
remedies, including the appeal rights set forth in this section and 
Sec. 13.27.



Sec. 13.27  Second appeal of qualification or denial.

    (a) Form of appeal. The decision after appeal of qualification or 
denial may be appealed in writing to the appropriate ATF officer within 
45 days after the date of that decision. If the appropriate ATF officer 
concludes that the qualified approval or denial was correct, a copy of 
the application, marked ``appeal denied,'' must be returned to the 
applicant, with an explanation of the decision and the specific laws or 
regulations relied upon in qualifying or denying the application. If the 
appropriate ATF officer concludes that the certificate of label 
approval, certificate of exemption from label approval, or distinctive 
liquor bottle application should be approved without qualification, the 
applicant may resubmit ATF Form 5100.31 and the certificate will be 
issued.
    (b) Time limits for decision after second appeal. Within 90 days of 
receipt of the second appeal, the appropriate ATF officer must notify 
the appellant whether the appeal has been granted or denied. If an 
applicant requests an informal conference as part of an appeal, as 
authorized in Sec. 13.71, the 90-day period will begin 10 days after the 
date of the conference to allow for consideration of any written 
arguments, facts or evidence submitted after the conference. The 
appropriate ATF officer may extend this period of time once, by an 
additional 90 days, if he or she finds that unusual circumstances 
require additional time to consider the unique issues presented by an 
appeal. If the appropriate ATF officer extends the time period, he or 
she must notify the applicant by letter, briefly explaining the issues 
presented by the label. The decision made on the second appeal shall be 
the final decision of ATF.
    (c)  Judicial review. An appeal to the appropriate ATF officer is 
required prior to application to the Federal courts for review of any 
denial or qualification of an application.

[T.D. ATF-406, 64 FR 2129, Jan. 13, 1999; T.D. ATF-406a, 64 FR 10949, 
Mar. 8, 1999, as amended by T.D. ATF-449, 66 FR 19086, Apr. 13, 2001]



             Subpart D--Revocations of Specific Certificates



Sec. 13.41  Authority to revoke certificates.

    Certificates of label approval, certificates of exemption from label 
approval, and distinctive liquor bottle approvals, previously approved 
on ATF Form 5100.31, may be revoked by the appropriate ATF officer upon 
a finding that the label or bottle at issue is not in compliance with 
the applicable laws or regulations.



Sec. 13.42  Notice of proposed revocation.

    Except as provided in Sec. 13.51, when the appropriate ATF officer 
determines

[[Page 246]]

that a certificate of label approval, certificate of exemption from 
label approval, or distinctive liquor bottle approval has been issued 
for a label or bottle that is not in compliance with the laws or 
regulations, he or she must issue to the certificate holder a notice of 
proposed revocation. The notice must set forth the basis for the 
proposed revocation and must provide the certificate holder with 45 days 
from the date of receipt of the notice to present written arguments or 
evidence why the revocation should not occur.



Sec. 13.43  Decision after notice of proposed revocation.

    (a) Decision. After considering any written arguments or evidence 
presented by the certificate holder, the appropriate ATF officer must 
issue a decision. If the decision is to revoke the certificate, a letter 
must be sent to the holder explaining the revocation of the certificate, 
and the specific laws or regulations relied upon in determining that the 
label or bottle was not in conformance with law or regulations. If the 
decision is to withdraw the proposed revocation, a letter of explanation 
must be sent.
    (b) Time limits for decision. Within 90 days of receipt of written 
arguments or evidence from the certificate holder, the appropriate ATF 
officer shall notify the appellant of his or her decision. If a 
certificate holder requests an informal conference as part of an appeal, 
as authorized in Sec. 13.71, the 90-day period will begin 10 days after 
the date of the conference to allow for consideration of any written 
arguments, facts or evidence submitted after the conference. The 
appropriate ATF officer may extend this period of time once by an 
additional 90 days if he or she finds that unusual circumstances require 
additional time to consider the issues presented by a proposed 
revocation. If the appropriate ATF officer extends the time period, he 
or she must notify the applicant by letter, along with a brief 
explanation of the issues under consideration.



Sec. 13.44  Appeal of revocation.

    (a) Filing of appeal. A certificate holder who wishes to appeal the 
decision to revoke a certificate of label approval, certificate of 
exemption from label approval, or distinctive liquor bottle approval, 
may file a written appeal setting forth why the holder believes that the 
decision was erroneous. The appeal must be filed with the appropriate 
ATF officer within 45 days after the date of receipt of the decision to 
revoke a certificate of label approval, certificate of exemption from 
label approval, or distinctive liquor bottle approval.
    (b) Judicial review. An appeal to the appropriate ATF officer is 
required prior to application to the Federal courts for review of any 
revocation of a certificate.

[T.D. ATF-449, 66 FR 19086, Apr.13, 2001]



Sec. 13.45  Final decision after appeal.

    (a) Issuance of decision. After considering any written arguments or 
evidence presented by the certificate holder or the holder's 
representative, the appropriate ATF officer must issue a final decision. 
If the decision is to revoke the certificate of label approval, 
certificate of exemption from label approval, or distinctive liquor 
bottle approval, a letter must be issued explaining the basis for the 
revocation, and the specific laws or regulations relied upon in 
determining that the label or bottle was not in conformance with law or 
regulations. If the decision is to withdraw the proposed revocation, a 
letter explaining the decision must be sent.
    (b) Time limits for decision. Within 90 days of receipt of an 
appeal, the appropriate ATF officer must notify the holder whether the 
appeal has been granted or denied. If a certificate holder requests an 
informal conference as part of an appeal, as authorized in Sec. 13.71, 
the 90-day period will begin 10 days after the date of the conference to 
allow for consideration of any written arguments, facts or evidence 
submitted after the conference. The appropriate ATF officer may extend 
this period of time once by an additional 90 days if he or she finds 
that unusual circumstances require additional time to consider the 
issues presented by an appeal. If the appropriate ATF officer extends 
the period, he or she must notify the holder by letter, briefly 
explaining the issues presented by the label. The

[[Page 247]]

final decision after appeal will be the final decision of ATF.

[T.D. ATF-406, 64 FR 2129, Jan. 13, 1999, as amended by T.D. ATF-449, 66 
FR 19086, Apr. 13, 2001]



         Subpart E--Revocation by Operation of Law or Regulation



Sec. 13.51  Revocation by operation of law or regulation.

    ATF will not individually notify all holders of certificates of 
label approval, certificates of exemption from label approval, or 
distinctive liquor bottle approvals, that their approvals have been 
revoked if the revocation occurs by operation of law or regulation. If 
changes in labeling or other requirements are made as a result of 
amendments or revisions to the law or regulations, the certificate 
holder must voluntarily surrender all certificates that are no longer in 
compliance. The holder must submit applications for new certificates in 
compliance with the new requirements, unless ATF determines that new 
applications are not necessary. If a new application is unnecessary, it 
is the responsibility of the certificate holder to ensure that labels 
are in compliance with their requirements of the new regulations or law.



Sec. 13.52  Notice of revocation.

    If ATF determines that a certificate holder is still using a 
certificate of label approval, certificate of exemption from label 
approval, or distinctive liquor bottle approval that is no longer in 
compliance due to amendments or revisions in the law or regulations, the 
appropriate ATF officer will notify the certificate holder in writing 
that the subject certificate has been revoked by operation of law or 
regulations, with a brief description of the grounds for such 
revocation.



Sec. 13.53  Appeal of notice of revocation.

    Within 45 days after the date of receipt of a notice of revocation 
by operation of law or regulations, the certificate holder may file a 
written appeal with the appropriate ATF officer. The appeal should set 
forth the reasons why the certificate holder believes that the 
regulation or law at issue does not require the revocation of the 
certificate.



Sec. 13.54  Decision after appeal.

    (a) Issuance of decision. After considering all written arguments 
and evidence submitted by the certificate holder, the appropriate ATF 
officer must issue a final decision regarding the revocation by 
operation of law or regulation of the certificate. If the decision is 
that the law or regulation at issue requires the revocation of the 
certificate of label approval, certificate of exemption from label 
approval, or distinctive liquor bottle approval, a letter must be issued 
explaining the basis for the revocation, and citing the specific laws or 
regulations which required the revocation of the certificate. If the 
decision is that the law or regulation at issue does not require the 
revocation of such certificate, a letter explaining the decision must be 
sent to the certificate holder. The decision after appeal will be the 
final decision of the ATF.
    (b) Time limits for decision. Within 90 days of receipt of an 
appeal, the appropriate ATF officer must notify the holder whether the 
appeal has been granted or denied. If a certificate holder requests an 
informal conference as part of an appeal, as authorized in Sec. 13.71, 
the 90-day period will begin 10 days after the date of the conference to 
allow for consideration of any written arguments, facts or evidence 
submitted after the conference. The appropriate ATF officer may extend 
this period of time once by an additional 90 days if he or she finds 
that unusual circumstances require additional time to consider the 
issues presented by an appeal. If the appropriate ATF officer extends 
the period, he or she must notify the holder by letter, briefly 
explaining the issues presented by the label. The decision of the 
appropriate ATF officer shall be the final decision of the ATF.

[T.D. ATF-406, 64 FR 2129, Jan. 13, 1999, as amended by T.D. ATF-449, 66 
FR 19086, Apr. 13, 2001]



                        Subpart F--Miscellaneous



Sec. 13.61  Publicity of information.

    (a) Pending and denied applications. Pending and denied applications 
for

[[Page 248]]

certificates of label approval, certificates of exemption from label 
approval, or distinctive liquor bottle approvals are treated as 
proprietary information, unless the applicant or certificate holder 
provides written authorization to release such information.
    (b) Approved applications. The appropriate ATF officer shall cause 
to be maintained in the ATF Library for public inspection, a copy of 
each approved application for certificate of label approval, certificate 
of exemption from label approval, or distinctive liquor bottle approval. 
These documents may be viewed during business hours at 650 Massachusetts 
Avenue, NW, Washington, DC 20226.
    (c) Revoked certificates. If an approved certificate is subsequently 
revoked, the record of the approved application will remain on file for 
public inspection, but the index will be annotated to show it was 
revoked.
    (d) Further disclosure of information on denied or revoked 
certificates. If an applicant whose application is pending or has been 
denied, or a holder of a revoked certificate of label approval, 
certificate of exemption from label approval, or distinctive liquor 
bottle approval, issues public statements concerning ATF action in 
connection with such application or certificate, then ATF may issue a 
statement to clarify its position or correct any misstatements of fact, 
including a disclosure of information contained on the application or 
certificate of label approval, certificate of exemption from label 
approval, or distinctive liquor bottle approval.



Sec. 13.62.  Third-party comment on certificates.

    When a third party (such as foreign government, another Federal 
agency, a State agency, an industry association, a competitor of a 
certificate holder, a consumer or consumer group, or any other 
interested person) wishes to comment on an approved certificate of label 
approval, certificate of exemption from label approval, or distinctive 
liquor bottle approval, such comments should be submitted in writing to 
the appropriate ATF officer who will review the subject of the comment. 
If the comment raises an issue that is outside the scope of ATF's 
statutory or regulatory authority, or the appropriate ATF officer 
determines that the certificate is in compliance with applicable law and 
regulations, the commenter will be informed that no further action will 
be taken. If the appropriate ATF officer determines that the commenter 
has raised a valid issue that ATF has authority to address, he or she 
will initiate appropriate action. The appropriate ATF officer may, in 
his or her discretion, notify the commenter as to the action being taken 
by ATF with respect to the certificate.

[T.D. ATF-449, 66 FR 19086, Apr. 13, 2001]



Sec. 13.71  Informal conferences.

    (a) General. As part of a timely filed written appeal of a notice of 
denial, a notice of proposed revocation, or a decision to revoke a 
certificate, an applicant or certificate holder may file a written 
request for an informal conference with the appropriate ATF officer 
deciding the appeal.
    (b) Informal conference procedures. The appropriate ATF officer and 
the applicant or certificate holder will agree upon a date for an 
informal conference. The informal conference is for purposes of 
discussion only, and no transcript shall be made. If the applicant or 
certificate holder wishes to rely upon arguments, facts, or evidence 
presented at the informal conference, he or she has 10 days after the 
date of the conference to incorporate such arguments, facts, or evidence 
in a written submission to the appropriate ATF officer.

[T.D. ATF-449, 66 FR 19086, Apr. 13, 2001]



Sec. 13.72  Effective dates of revocations.

    (a) Effective dates--(1) Revocation of specific certificates. A 
written decision to revoke a certificate becomes effective 60 days after 
the date of the decision.
    (2) Revocation by operation of law or regulation. If a certificate 
is revoked by operation of law or regulation, the revocation becomes 
effective on the effective date of the change in law or regulation with 
which the certificate does not comply, or if a separate label compliance 
date is given, on that date.
    (b) Use of certificate during period of appeal. If a certificate 
holder files a

[[Page 249]]

timely appeal after receipt of a decision to revoke a certificate 
pursuant to Sec. 13.44, the holder may continue to use the certificate 
at issue until the effective date of a final decision issued by the 
appropriate ATF officer. However, the effective date of a notice of 
revocation by operation of law or regulations, issued pursuant to 
Sec. 13.52, is not stayed pending the appeal.

[T.D. ATF-406, 64 FR 2129, Jan. 13, 1999, as amended by T.D. ATF-449, 66 
FR 19086, Apr. 13, 2001]



Sec. 13.73  Effect of revocation.

    On and after the effective date of a revocation of a certificate of 
label approval, certificate or exemption from label approval, or 
distinctive liquor bottle approval, the label or distinctive liquor 
bottle in question may not be used to bottle or pack distilled spirits, 
wine or malt beverages, to remove such products from the place where 
they were bottled or packed, or to remove such products from customs 
custody for consumption.



Sec. 13.74  Surrender of certificates.

    On the effective date of a final decision that has been issued to 
revoke a certificate of label approval, certificate of exemption from 
label approval, or distinctive liquor bottle approval, the certificate 
holder must surrender the original of the certificate to ATF for manual 
cancellation. Regardless of whether the original certificate of label 
approval, certificate of exemption from label approval, or distinctive 
liquor bottle approval has been manually canceled or not, the 
certificate is null and void after the effective date of the revocation. 
It is a violation of this section for any certificate holder to present 
a certificate of label approval, certificate of exemption from label 
approval, or distinctive liquor bottle approval to an official of the 
United States Government as a valid certificate after the effective date 
of the revocation of the certificate if the certificate holder has been 
previously notified that such certificate has been revoked by ATF.

[T.D. ATF-406, 64 FR 2129, Jan. 13, 1999, as amended by T.D. ATF-449, 66 
FR 19086, Apr. 13, 2001]



Sec. 13.75  Evidence of receipt by ATF.

    If there is a time limit on ATF action that runs from ATF's receipt 
of a document, the date of receipt may be established by a certified 
mail receipt or equivalent written acknowledgment secured by a 
commercial delivery service or by a written acknowledgment of personal 
delivery. In the absence of proof of receipt, the date the document is 
logged in by ATF will be considered the date of receipt.



Sec. 13.76  Service on applicant or certificate holder.

    (a) Method of service. ATF must serve notices of denial on an 
applicant by first class mail, or by personal delivery. ATF must serve 
notices of proposed revocation and notices of revocation on a 
certificate holder by certified mail, return receipt requested, by a 
commercial delivery service that will provide an equivalent written 
acknowledgment from the recipient, or by personal delivery.
    (b) Date of receipt. If there is a time limit on a certificate 
holder's action that runs from the holder's receipt of a document, the 
date of receipt may be established by a certified mail receipt, an 
equivalent written acknowledgment secured by a commercial delivery 
service, or by a written acknowledgment of personal delivery.
    (c) Person to be served. When service is by mail or other commercial 
delivery service, a copy of the document must be sent to the applicant 
or certificate holder at the address stated in the application or at the 
last known address. If authorized by the applicant or certificate 
holder, the copy of the document may be mailed to a designated 
representative. If service is by personal delivery, a copy of the 
document must be delivered to the certificate holder or to a designated 
representative. In the case of a corporation, partnership, or 
association, personal delivery may be made to an officer, manager, or 
general agent thereof, or to the attorney of record.



Sec. 13.81  Representation before ATF.

    An applicant or certificate holder may be represented by an 
attorney, certified public accountant, or other person recognized to 
practice before

[[Page 250]]

ATF as provided in 31 CFR part 8 (Practice Before the Bureau of Alcohol, 
Tobacco and Firearms). The applicable requirements of 26 CFR 601.521 
through 601.527 (conference and practice requirements for alcohol, 
tobacco, and firearms activities) shall apply.



Sec. 13.91  Computation of time.

    In computing any period of time prescribed or allowed by this part, 
the day of the act, event or default after which the designated period 
of time is to run, is not counted. The last day of the period to be 
computed is counted, unless it is a Saturday, Sunday, or legal holiday, 
in which case the period runs until the next day that is not a Saturday, 
Sunday, or legal holiday. Papers or documents that are required or 
permitted to be filed under this part must be received at the 
appropriate office within the filing time limits, if any.



Sec. 13.92  Extensions.

    An applicant or certificate holder may apply to the appropriate ATF 
officer deciding the appeal for an extension of any time limit 
prescribed in this part. The time limit may be extended if ATF agrees 
the request is reasonable.

[T.D. ATF-406, 64 FR 2129, Jan. 13, 1999, as amended by T.D. ATF-449, 66 
FR 19086, Apr. 13, 2001]



PART 16--ALCOHOLIC BEVERAGE HEALTH WARNING STATEMENT--Table of Contents




                            Subpart A--Scope

Sec.
16.1  General.
16.2  Territorial extent.

                         Subpart B--Definitions

16.10  Meaning of terms.

Subpart C--Health Warning Statement Requirements for Alcoholic Beverages

16.20  General.
16.21  Mandatory label information.
16.22  General requirements.

                      Subpart D--General Provisions

16.30  Certificates of label approval.
16.31  Exports.
16.32  Preemption.
16.33  Civil penalties.

    Authority: 27 U.S.C. 205, 215, 218; 28 U.S.C. 2461 note.

    Source: T.D. ATF-294, 55 FR 5421, Feb. 14, 1990, unless otherwise 
noted.



                            Subpart A--Scope



Sec. 16.1  General.

    The regulations in this part relate to a health warning statement on 
labels of containers of alcoholic beverages.



Sec. 16.2  Territorial extent.

    This part applies to the several States of the United States, the 
District of Columbia, and the territories and possessions of the United 
States.



                         Subpart B--Definitions



Sec. 16.10  Meaning of terms.

    As used in this part, unless the context otherwise requires, terms 
shall have the meaning ascribed in this section.
    Act. The Alcoholic Beverage Labeling Act of 1988.
    Alcoholic beverage. Includes any beverage in liquid form which 
contains not less than one-half of one percent (.5%) of alcohol by 
volume and is intended for human consumption.
    ATF. The Bureau of Alcohol, Tobacco and Firearms, the Department of 
the Treasury.
    Bottle. To fill a container with an alcoholic beverage and to seal 
such container.
    Bottler. A person who bottles an alcoholic beverage.
    Brand label. The label carrying, in the usual distinctive design, 
the brand name of the alcoholic beverage.
    Container. The innermost sealed container, irrespective of the 
material from which made, in which an alcoholic beverage is placed by 
the bottler and in which such beverage is offered for sale to members of 
the general public.
    Health. Includes, but is not limited to, the prevention of 
accidents.
    Person. Any individual, partnership, joint-stock company, business 
trust, association, corporation, or any other business or legal entity, 
including a receiver, trustee, or liquidating agent, and also includes 
any State, any State

[[Page 251]]

agency, or any officer or employee thereof.
    Sale and distribution. Includes sampling or any other distribution 
not for sale.
    State. Includes any political subdivision of any State, the District 
of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the 
Northern Mariana Islands, Guam, the Virgin Islands, American Samoa, Wake 
Island, the Midway Islands, Kingman Reef, or Johnston Island.
    State law. Includes State statutes, regulations and principles and 
rules having the force of law.
    United States. The several States, the District of Columbia, the 
Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana 
Islands, Guam, the Virgin Islands, American Samoa, Wake Island, the 
Midway Islands, Kingman Reef, and Johnston Island.
    Use of other terms. Any other term defined in the Alcoholic Beverage 
Labeling Act and used in this part shall have the same meaning as 
assigned to it by the Act.

[T.D. ATF-294, 55 FR 5421, Feb. 14, 1990, as amended by T.D. ATF-425, 65 
FR 11892, Mar. 7, 2000]



Subpart C--Health Warning Statement Requirements for Alcoholic Beverages



Sec. 16.20  General.

    (a) Domestic products. On and after November 18, 1989, no person 
shall bottle for sale or distribution in the United States any alcoholic 
beverage unless the container of such beverage bears the health warning 
statement required by Sec. 16.21. It is the responsibility of the 
bottler to provide, upon request, sufficient evidence to establish that 
the alcoholic beverage was bottled prior to November 18, 1989.
    (b) Imported products. On and after November 18, 1989, no person 
shall import for sale or distribution in the United States any alcoholic 
beverage unless the container of such beverage bears the health warning 
statement required by Sec. 16.21. This requirement does not apply to 
alcoholic beverages that were bottled in the foreign country prior to 
November 18, 1989. It is the responsibility of the importer to provide, 
upon request, sufficient evidence to establish that the alcoholic 
beverage was bottled prior to such date.



Sec. 16.21  Mandatory label information.

    There shall be stated on the brand label or separate front label, or 
on a back or side label, separate and apart from all other information, 
the following statement:

    GOVERNMENT WARNING: (1) According to the Surgeon General, women 
should not drink alcoholic beverages during pregnancy because of the 
risk of birth defects.
    (2) Consumption of alcoholic beverages impairs your ability to drive 
a car or operate machinery, and may cause health problems.

(Authority: Sec. 8001, Pub. L. 100-690, 102 Stat. 4181, 27 U.S.C. 215)



Sec. 16.22  General requirements.

    (a) Legibility. (1) All labels shall be so designed that the 
statement required by Sec. 16.21 is readily legible under ordinary 
conditions, and such statement shall be on a contrasting background.
    (2) The first two words of the statement required by Sec. 16.21, 
i.e., ``GOVERNMENT WARNING,'' shall apear in capital letters and in bold 
type. The remainder of the warning statement may not appear in bold 
type.
    (3) The letters and/or words of the statement required by Sec. 16.21 
shall not be compressed in such a manner that the warning statement is 
not readily legible.
    (4) The warning statement required by Sec. 16.21 shall appear in a 
maximum number of characters (i.e., letters, numbers, marks) per inch, 
as follows:

------------------------------------------------------------------------
                                                               Maximum
                                                              number of
      Minimum required type size for warning statement        characters
                                                               per inch
------------------------------------------------------------------------
1 millimeter...............................................           40
2 millimeters..............................................           25
3 millimeters..............................................           12
------------------------------------------------------------------------

    (b) Size of type. (1) Containers of 237 milliliters (8 fl. oz.) or 
less. The mandatory statement required by Sec. 16.21 shall be in script, 
type, or printing not smaller than 1 millimeter.
    (2) Containers of more than 237 milliliters (8 fl. oz.) up to 3 
liters (101 fl. oz.). The mandatory statement required by

[[Page 252]]

Sec. 16.21 shall be in script, type, or printing not smaller than 2 
millimeters.
    (3) Containers of more than 3 liters (101 fl. oz.). The mandatory 
statement required by Sec. 16.21 shall be in script, type, or printing 
not smaller than 3 millimeters.
    (c) Labels firmly affixed. Labels bearing the statement required by 
Sec. 16.21 which are not an integral part of the container shall be 
affixed to containers of alcoholic beverages in such manner that thay 
cannot be removed without thorough application of water or other 
solvents.

[T.D. ATF-294, 55 FR 5421, Feb. 14, 1990, as amended by T.D. 372, 61 FR 
20723, May 8, 1996]



                      Subpart D--General Provisions



Sec. 16.30  Certificates of label approval.

    Certificates of label/bottle approval or certificates of exemption 
from label approval on ATF Form 5100.31, issued pursuant to parts 4, 5, 
and 7 of this chapter for imported and domestically bottled wine, 
distilled spirits, and malt beverages, shall not be approved with 
respect to such beverage bottled on and after November 18, 1989, unless 
the label for the container of such beverage bears the health warning 
statement required.

[T.D. ATF-294, 55 FR 5421, Feb. 14, 1990, as amended by T.D. ATF-425, 65 
FR 11892, Mar. 7, 2000]



Sec. 16.31  Exports.

    The regulations in this part shall not apply with respect to 
alcoholic beverages that are produced, imported, bottled, or labeled for 
export from the United States, or for delivery to a vessel or aircraft, 
as supplies, for consumption beyond the jurisdiction of the internal 
revenue laws of the United States: Provided, That this exemption shall 
not apply with respect to alcoholic beverages that are produced, 
imported, bottled, or labeled for sale, distribution, or shipment to 
members or units of the Armed Forces of the United States, including 
those located outside the United States.



Sec. 16.32  Preemption.

    No statement relating to alcoholic beverages and health, other than 
the statement required by Sec. 16.21, shall be required under State law 
to be placed on any container of an alcoholic beverage, or on any box, 
carton, or other package, irrespective of the material from which made, 
that contains such a container.



Sec. 16.33  Civil penalties.

    (a) General. Any person who violates the provisions of this part 
shall be subject to a civil penalty of not more than $10,000, and each 
day shall constitute a separate offense.
    (b) Adjusted penalty for violations occurring after October 23, 
1996. Pursuant to the provisions of the Federal Civil Penalties 
Inflation Adjustment Act of 1990, as amended, the civil penalty provided 
for in paragraph (a) of this section shall be periodically adjusted in 
accordance with inflation. Accordingly, for violations occurring after 
October 23, 1996, the civil penalty shall be not more than $11,000.

[T.D. ATF-385, 61 FR 54936, Oct. 23, 1996]



PART 17--DRAWBACK ON TAXPAID DISTILLED SPIRITS USED IN MANUFACTURING NONBEVERAGE PRODUCTS--Table of Contents




                      Subpart A--General Provisions

Sec.
17.1  Scope of regulations.
17.2  Forms prescribed.
17.3  Alternate methods or procedures.
17.4  OMB control numbers assigned under the Paperwork Reduction Act.
17.5  Products manufactured in Puerto Rico or the Virgin Islands.
17.6  Signature authority.
17.7  Delegations of the Director.

                         Subpart B--Definitions

17.11  Meaning of terms.

                         Subpart C--Special Tax

17.21  Payment of special tax.
17.22  Rate of special tax
17.23  Special tax for each place of business.
17.24  Time for payment of special tax.

                           Special Tax Returns

17.31  Filing of return and payment of special tax.
17.32  Completion of ATF Form 5630.5.
17.33  Signature on returns, ATF Form 5630.5.

[[Page 253]]

17.34  Verification of returns.

                     Employer Identification Number

17.41  Requirement for employer identification number.
17.42  Application for employer identification number.
17.43  Preparation and filing of Form SS-4.

                      Subpart D--Special Tax Stamps

17.51  Issuance of stamps.
17.52  Distribution of stamps for multiple locations.
17.53  Correction of errors on stamps.
17.54  Lost or destroyed stamps.
17.55  Retention of special tax stamps.

                           Change in Location

17.61  General.
17.62  Failure to register.
17.63  Certificates in lieu of lost stamps.

                            Change in Control

17.71  General.
17.72  Right of succession.
17.73  Failure to register.
17.74  Certificates in lieu of lost stamps.
17.75  Formation of partnership or corporation.
17.76  Addition or withdrawal of partners.
17.77  Reincorporation.

                         Change in Name or Style

17.81  General.
17.82  Change in capital stock.
17.83  Sale of stock.

                          Refund of Special Tax

17.91  Absence of liability, refund of special tax.
17.92  Filing of refund claim.
17.93  Time limit for filing refund claim.

                Subpart E--Bonds and Consents of Sureties

17.101  General.
17.102  Amount of bond.
17.103  Bonds obtained from surety companies.
17.104  Deposit of collateral.
17.105  Filing of powers of attorney.
17.106  Consents of surety.
17.107  Strengthening bonds.
17.108  Superseding bonds.

                          Termination of Bonds

17.111  General.
17.112  Notice by surety of termination of bond.
17.113  Extent of release of surety from liability under bond.
17.114  Release of collateral.

                     Subpart F--Formulas and Samples

17.121  Product formulas.
17.122  Amended or revised formulas.
17.123  Statement of process.
17.124  Samples.
17.125  Adoption of formulas and processes.
17.126  Formulas for intermediate products.
17.127  Self-manufactured ingredients treated optionally as unfinished 
          nonbeverage products.

                          Approval of Formulas

17.131  Formulas on ATF Form 5154.1.
17.132  U.S.P., N.F., and H.P.U.S. preparations.
17.133  Food product formulas.
17.134  Determination of unfitness for beverage purposes.
17.135  Use of specially denatured alcohol (S.D.A.).
17.136  Compliance with Food and Drug Administration requirements.
17.137  Formulas disapproved for drawback.

                     Subpart G--Claims for Drawback

17.141  Drawback.
17.142  Claims.
17.143  Notice for monthly claims.
17.144  Bond for monthly claims.
17.145  Date of filing claim.
17.146  Information to be shown by the claim.
17.147  Supporting data.
17.148  Allowance of claims.

                       Spirits Subject to Drawback

17.151  Use of distilled spirits.
17.152  Time of use of spirits.
17.153  Recovered spirits.
17.154  Spirits contained in intermediate products.
17.155  Spirits consumed in manufacturing intermediate products.

                           Subpart H--Records

17.161  General.
17.162  Receipt of distilled spirits.
17.163  Evidence of taxpayment of distilled spirits.
17.164  Production record.
17.165  Receipt of raw ingredients.
17.166  Disposition of nonbeverage products.
17.167  Inventories.
17.168  Recovered spirits.
17.169  Transfer of intermediate products.
17.170  Retention of records.
17.171  Inspection of records.

                   Subpart I--Miscellaneous Provisions

17.181  Exportation of medicinal preparations and flavoring extracts.
17.182  Drawback claims by druggists.

[[Page 254]]

17.183  Disposition of recovered alcohol and material from which alcohol 
          can be recovered.
17.184  Distilled spirits container marks.
17.185  Requirements for intermediate products and unfinished 
          nonbeverage products.
17.186  Transfer of distilled spirits to other containers.
17.187  Discontinuance of business.

    Authority: 26 U.S.C. 5010, 5131-5134, 5143, 5146, 5206, 5273, 6011, 
6065, 6091, 6109, 6151, 6402, 6511, 7011, 7213, 7652, 7805; 31 U.S.C. 
9301, 9303, 9304, 9306.

    Source: T.D. ATF-379, 61 FR 31412, June 20, 1996, unless otherwise 
noted.

    Editorial Note: Nomenclature changes to part 17 appear by T.D. ATF-
436, 66 FR 5470, 5471, Jan. 19, 2001.



                      Subpart A--General Provisions



Sec. 17.1  Scope of regulations.

    The regulations in this part apply to the manufacture of medicines, 
medicinal preparations, food products, flavors, flavoring extracts, and 
perfume that are unfit for beverage use and are made with taxpaid 
distilled spirits. The regulations cover the following topics: obtaining 
drawback of internal revenue tax on distilled spirits used in the 
manufacture of nonbeverage products; the payment of special 
(occupational) taxes in order to be eligible to receive drawback; and 
bonds, claims, formulas and samples, losses, and records to be kept 
pertaining to the manufacture of nonbeverage products.



Sec. 17.2  Forms prescribed.

    (a) The appropriate ATF officer is authorized to prescribe all 
forms, including bonds and records, required by this part. All of the 
information called for in each form shall be furnished as indicated by 
the headings on the form and the instructions on or pertaining to the 
form. In addition, information called for in each form shall be 
furnished as required by this part. The form will be filed in accordance 
with the instructions for the form.
    (b) Forms may be requested from the ATF Distribution Center, P.O. 
Box 5950, Springfield, Virginia 22150-5190, or at the ATF web site 
(http://www.atf.treas.gov/).

[T.D. ATF-379, 61 FR 31412, June 20, 1996, as amended by T.D. ATF-436, 
66 FR 5470, Jan. 19, 2001]



Sec. 17.3  Alternate methods or procedures.

    (a) General. The appropriate ATF officer may approve the use of an 
alternate method or procedure in lieu of a method or procedure 
prescribed in this part if he or she finds that--
    (1) Good cause has been shown for the use of the alternate method or 
procedure;
    (2) The alternate method or procedure is within the purpose of, and 
consistent with the effect intended by, the method or procedure 
prescribed by this part, and affords equivalent security to the revenue; 
and
    (3) The alternate method or procedure will not be contrary to any 
provision of law, and will not result in any increase in cost to the 
Government or hinder the effective administration of this part.
    (b) Application. A letter of application to employ an alternate 
method or procedure must be submitted to the appropriate ATF officer. 
The application shall specifically describe the proposed alternate 
method or procedure, and shall set forth the reasons therefor.
    (c) Approval. No alternate method or procedure shall be employed 
until the application has been approved by the appropriate ATF officer. 
The appropriate ATF officer shall not approve any alternate method 
relating to the giving of any bond or to the assessment, payment, or 
collection of any tax. The manufacturer shall, during the period of 
authorization, comply with the terms of the approved application and 
with any conditions thereto stated by the appropriate ATF officer in the 
approval. Authorization for any alternate method or procedure may be 
withdrawn by written notice from the Director whenever in his or her 
judgment the revenue is jeopardized, the effective administration of 
this part is hindered, or good cause for the authorization no longer 
exists. The manufacturer shall retain, in the records required by 
Sec. 17.170, any authorization

[[Page 255]]

given by the appropriate ATF officer under this section.

[T.D. ATF-379, 61 FR 31412, June 20, 1996, as amended by T.D. ATF-436, 
66 FR 5470, Jan. 19, 2001]



Sec. 17.4  OMB control numbers assigned under the Paperwork Reduction Act.

    (a) Purpose. This section collects and displays the control numbers 
assigned to the information collection requirements of this part by the 
Office of Management and Budget under the Paperwork Reduction Act of 
1980, Public Law 96-511.
    (b) OMB control number 1512-0078. OMB control number 1512-0078 is 
assigned to the following section in this part: Sec. 17.106.
    (c) OMB control number 1512-0079. OMB control number 1512-0079 is 
assigned to the following sections in this part: Secs. 17.6 and 17.105.
    (d) OMB control number 1512-0095. OMB control number 1512-0095 is 
assigned to the following sections in this part: Secs. 17.121, 17.126, 
17.127, 17.132, and 17.136.
    (e) OMB control number 1512-0141. OMB control number 1512-0141 is 
assigned to the following sections in this part: Secs. 17.92, 17.93, 
17.142, 17.145, and 17.146.
    (f) OMB control number 1512-0188. OMB control number 1512-0188 is 
assigned to the following section in this part: Sec. 17.6.
    (g) OMB control number 1512-0378. OMB control number 1512-0378 is 
assigned to the following sections in this part: Secs. 17.3, 17.54, 
17.111, 17.112, 17.122, 17.123, 17.124, 17.125, 17.143, 17.168(a), 
17.183, and 17.187.
    (h) OMB control number 1512-0379. OMB control number 1512-0379 is 
assigned to the following sections in this part: Secs. 17.161, 17.162, 
17.163, 17.164, 17.165, 17.166, 17.167, 17.168(b), 17.169, 17.170, 
17.182, and 17.186.
    (i) OMB control number 1512-0472. OMB control number 1512-0472 is 
assigned to the following sections in this part: Secs. 17.31, 17.32, 
17.33, 17.34, 17.41, 17.53, 17.61, 17.63, 17.71, and 17.74.
    (j) OMB control number 1512-0492. OMB control number 1512-0492 is 
assigned to the following sections in this part: Secs. 17.42, 17.43, 
17.52, and 17.55.
    (k) OMB control number 1512-0500. OMB control number 1512-0500 is 
assigned to the following sections in this part: Secs. 17.31, 17.32, 
17.33, 17.34, 17.41, and 17.53.
    (l) OMB control number 1512-0514. OMB control number 1512-0514 is 
assigned to the following sections in this part: Secs. 17.147 and 
17.182.



Sec. 17.5  Products manufactured in Puerto Rico or the Virgin Islands.

    For additional provisions regarding drawback on distilled spirits 
contained in medicines, medicinal preparations, food products, flavors, 
flavoring extracts, or perfume which are unfit for beverage purposes and 
which are brought into the United States from Puerto Rico or the U.S. 
Virgin Islands, see part 26, subparts I and Ob, of this chapter.

[T.D. ATF-436, 66 FR 5470, 5471, Jan. 19, 2001, as amended by T.D. ATF-
459, 66 FR 38549, July 25, 2001]



Sec. 17.6  Signature authority.

    No claim, bond, tax return, or other required document executed by a 
person as an agent or representative is acceptable unless a power of 
attorney or other proper notification of signature authority has been 
filed with the ATF office where the required document must be filed. The 
appropriate ATF officer with whom the claim or other required document 
is filed may, when he or she considers it necessary, require additional 
evidence of the authority of the agent or representative to execute the 
document. Except as otherwise provided by this part, powers of attorney 
shall be filed on ATF Form 1534 (5000.8), Power of Attorney. 
Notification of signature authority of partners, officers, or employees 
may be given by filing a copy of corporate or partnership documents, 
minutes of a meeting of the board of directors, etc. For corporate 
officers or employees, ATF Form 5100.1, Signing Authority for Corporate 
Officials, may be used. For additional provisions regarding powers of 
attorney, see Sec. 17.105 and 26 CFR part 601, subpart E.

[[Page 256]]



Sec. 17.7  Delegations of the Director.

    The regulatory authorities of the Director contained in this part 17 
are delegated to appropriate ATF officers. These ATF officers are 
specified in ATF Order 1130.13, Delegation Order--Delegation of the 
Director's Authorities in 27 CFR parts 17 and 18. ATF delegation orders, 
such as ATF Order 1130.13, are available to any interested person by 
mailing a request to the ATF Distribution Center, P.O. Box 5950, 
Springfield, VA 22150-5190, or by accessing the ATF web site (http://
www.atf.treas.gov/).

[T.D. ATF-436, 66 FR 5470, Jan. 19, 2001]



                         Subpart B--Definitions



Sec. 17.11  Meaning of terms.

    As used in this part, unless the context otherwise requires, terms 
have the meanings given in this section. Words in the plural form 
include the singular, and vice versa, and words indicating the masculine 
gender include the feminine. The terms ``includes'' and ``including'' do 
not exclude things not listed which are in the same general class.
    Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this part by ATF Order 
1130.13, Delegation Order--Delegation of the Director's Authorities in 
27 CFR Parts 17 and 18.
    Approved, or approved for drawback. When used with reference to 
products and their formulas, this term means that drawback may be 
claimed on eligible spirits used in such products in accordance with 
this part.
    CFR. The Code of Federal Regulations.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of Treasury, Washington, DC 20226.
    Distilled spirits, or spirits. That substance known as ethyl 
alcohol, ethanol, spirits, or spirits of wine in any form (including all 
dilutions and mixtures thereof, from whatever source or by whatever 
process produced).
    Effective tax rate. The net tax rate, after reduction for any credit 
allowable under 26 U.S.C. 5010 for wine and flavor content, at which the 
tax imposed on distilled spirits by 26 U.S.C. 5001 or 7652 is paid or 
determined. For distilled spirits with no wine or flavors content, the 
effective tax rate equals the rate of tax imposed by 26 U.S.C. 5001 or 
7652.
    Eligible, or eligible for drawback. When used with reference to 
spirits, this term designates taxpaid spirits which have not yet been 
used in nonbeverage products.
    Filed. Subject to the provisions of Secs. 70.305 and 70.306 of this 
chapter, a claim for drawback or other document or payment submitted 
under this part is generally considered to have been ``filed'' when it 
is received by the office of the proper Government official; but if an 
item is mailed timely with postage prepaid, then the United States 
postmark date is treated as the date of filing.
    Food products. Includes food adjuncts, such as preservatives, 
emulsifying agents, and food colorings, which are manufactured and used, 
or sold for use, in food.
    Intermediate products. Products to which all three of the following 
conditions apply: they are made with taxpaid distilled spirits, they 
have been disapproved for drawback, and they are made by the 
manufacturer exclusively for its own use in the manufacture of 
nonbeverage products approved for drawback. However, ingredients treated 
as unfinished nonbeverage products under Sec. 17.127 are not considered 
to be intermediate products.
    Medicines. Includes laboratory stains and reagents for use in 
medical diagnostic procedures.
    Month. A calendar month.
    Nonbeverage products. Medicines, medicinal preparations, food 
products, flavors, flavoring extracts, or perfume, which are 
manufactured using taxpaid distilled spirits, and which are unfit for 
use for beverage purposes.
    Person. An individual, trust, estate, partnership, association, 
company, or corporation.
    Proof gallon. 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

[[Page 257]]

at 60 degrees Fahrenheit as unity), or the alcoholic equivalent thereof.
    Quarter. A 3-month period beginning January 1, April 1, July 1, or 
October 1.
    Recovered spirits. Taxpaid spirits that have been salvaged, after 
use in the manufacture of a product or ingredient, so that the spirits 
are reusable.
    Special tax. The special (occupational) tax on manufacturers of 
nonbeverage products, imposed by 26 U.S.C. 5131.
    Subject to drawback. This term is used with reference to spirits. 
Eligible spirits become ``subject to drawback'' when they are used in 
the manufacture of a nonbeverage product. When spirits have become 
``subject to drawback,'' they may be included in the manufacturer's 
claim for drawback of tax covering the period in which they were first 
used.
    Tax year. The period from July l of one calendar year through June 
30 of the following year.
    Taxpaid. When used with respect to distilled spirits, this term 
shall mean that all taxes imposed on such spirits by 26 U.S.C. 5001 or 
7652 have been determined or paid as provided by law.
    This chapter. Chapter I of title 27 of the Code of Federal 
Regulations.
    U.S.C. The United States Code.

[T.D. ATF-379, 61 FR 31412, June 20, 1996, as amended by T.D. ATF-436, 
66 FR 5470, Jan. 19, 2001]



                         Subpart C--Special Tax



Sec. 17.2l  Payment of special tax.

    Each person who uses taxpaid distilled spirits in the manufacture or 
production of nonbeverage products shall pay special tax as specified in 
Sec. 17.22 in order to be eligible to receive drawback on the spirits so 
used. Special tax shall be paid for each tax year during which spirits 
were used in the manufacture of a product covered by a drawback claim. 
If a claim is filed covering taxpaid distilled spirits used during the 
preceding tax year, and special tax has not been paid for the preceding 
tax year, then special tax for the preceding tax year shall be paid. 
Regardless of the portion of a tax year covered by a claim, the full 
annual special tax shall be paid. The manufacturer is not required to 
pay the special tax if drawback is not claimed.



Sec. 17.22  Rate of special tax.

    Effective January 1, 1988, the rate of special tax is $500 per tax 
year for all persons claiming drawback on distilled spirits used in the 
manufacture or production of nonbeverage products.



Sec. 17.23  Special tax for each place of business.

    A separate special tax shall be paid for each place where distilled 
spirits are used in the manufacture or production of nonbeverage 
products, except for any such place in a tax year for which no claim is 
filed, or no drawback is paid, on spirits used at that place.



Sec. 17.24  Time for payment of special tax.

    Special tax may be paid in advance of actual use of distilled 
spirits. Special tax shall be paid before a claimant may receive 
drawback. Special tax may be paid without penalty under 26 U.S.C. 
5134(c) at any time prior to completion of final action on the claim.

                           Special Tax Returns



Sec. 17.31  Filing of return and payment of special tax.

    Special tax shall be paid by return. The prescribed return is ATF 
Form 5630.5, Special Tax Registration and Return. Special tax returns, 
with payment of tax, shall be filed with ATF in accordance with 
instructions on the form.

(26 U.S.C. 609l, 6151)



Sec. 17.32  Completion of ATF Form 5630.5.

    (a) General. All of the information called for on Form 5630.5 shall 
be provided, including:
    (1) The true name of the taxpayer.
    (2) The trade name(s) (if any) of the business(es) subject to 
special tax.
    (3) The employer identification number (see Secs. 17.41-43).
    (4) The exact location of the place of business, by name and number 
of building or street, or if these do not exist, by some description in 
addition to the post office address. In the case of one return for two 
or more locations, the

[[Page 258]]

address to be shown shall be the taxpayer's principal place of business 
(or principal office, in the case of a corporate taxpayer).
    (5) The class of special tax to which the taxpayer is subject.
    (6) Ownership and control information: The name, position, and 
residence address of every owner of the business and of every person 
having power to control its management and policies with respect to the 
activity subject to special tax. ``Owner of the business'' shall include 
every partner if the taxpayer is a partnership, and every person owning 
10% or more of its stock if the taxpayer is a corporation. However, the 
ownership and control information required by this paragraph need not be 
stated if the same information has been previously provided to ATF, and 
if the information previously provided is still current.
    (b) Multiple locations. A taxpayer subject to special tax for the 
same period at more than one location or for more than one class of tax 
shall--
    (1) File one special tax return, ATF Form 5630.5, with payment of 
tax, to cover all such locations and classes of tax; and
    (2) Prepare, in duplicate, a list identified with the taxpayer's 
name, address (as shown on the Form 5630.5), employer identification 
number, and period covered by the return. The list shall show, by 
States, the name, address, and tax class of each location for which 
special tax is being paid. The original of the list shall be filed with 
ATF in accordance with instructions on the return, and the copy shall be 
retained at the taxpayer's principal place of business (or principal 
office, in the case of a corporate taxpayer) for the period specified in 
Sec. 17.170.

(26 U.S.C. 6011, 7011)



Sec. 17.33  Signature on returns, ATF Form 5630.5.

    The return of an individual proprietor shall be signed by the 
proprietor; the return of a partnership shall be signed by a general 
partner; and the return of a corporation shall be signed by a corporate 
officer. All signatures must be original; photocopies are not 
acceptable. In each case, the person signing the return shall designate 
his or her capacity, as ``individual owner,'' ``member of partnership,'' 
or, in the case of a corporation, the title of the officer. Receivers, 
trustees, assignees, executors, administrators, and other legal 
representatives who continue the business of a bankrupt, insolvent, 
deceased person, etc., shall indicate the fiduciary capacity in which 
they act.



Sec. 17.34  Verification of returns.

    ATF Forms 5630.5 shall contain or be verified by a written 
declaration that the return is made under the penalties of perjury.

(68A Stat. 749 (26 U.S.C. 6065))

                     Employer Identification Number



Sec. 17.41  Requirement for employer identification number.

    The employer identification number (defined in 26 CFR 301.7701-12) 
of the taxpayer who has been assigned such a number shall be shown on 
each special tax return (ATF Form 5630.5), including amended returns 
filed under this subpart. Failure of the taxpayer to include the 
employer identification number on Form 5630.5 may result in assertion 
and collection of the penalty specified in Sec. 70.113 of this chapter.

(Secs. 1(a), (b), Pub. L. 87-397, 75 Stat. 828 (26 U.S.C. 6109, 6723))



Sec. 17.42  Application for employer identification number.

    (a) An employer identification number is assigned pursuant to 
application on IRS Form SS-4, Application for Employer Identification 
Number, filed by the taxpayer. Form SS-4 may be obtained from any office 
of the Internal Revenue Service.
    (b) Each taxpayer who files a return on ATF Form 5630.5 shall make 
application on IRS Form SS-4 for an employer identification number, 
unless he or she has already been assigned such a number or made 
application for one. The application on Form SS-4 shall be filed on or 
before the seventh day after the date on which the first return on Form 
5630.5 is filed.
    (c) Each taxpayer shall make application for and shall be assigned 
only one employer identification number, regardless of the number of 
places of

[[Page 259]]

business for which the taxpayer is required to file Form 5630.5.

(Sec. 1(a), Pub. L. 87-397, 75 Stat. 828 (26 U.S.C. 6109))



Sec. 17.43  Preparation and filing of Form SS-4.

    The taxpayer shall prepare and file the application on IRS Form SS-
4, together with any supplementary statement, in accordance with 
instructions on the form or issued in respect to it.

(Sec. 1(a), Pub. L. 87-397, 75 Stat. 828 (26 U.S.C. 6109))



                      Subpart D--Special Tax Stamps



Sec. 17.51  Issuance of stamps.

    Each manufacturer of nonbeverage products, upon filing a properly 
executed return on ATF Form 5630.5, together with the proper tax payment 
in the full amount due, shall be issued a special tax stamp designated 
``Manufacturer of Nonbeverage Products.'' This special tax stamp shall 
not be sold or otherwise transferred to another person (except as 
provided in Secs. 17.71 and 17.72). If the Form 5630.5 submitted with 
the tax payment covers multiple locations, the taxpayer shall be issued 
one appropriately designated stamp for each location listed in the 
attachment to Form 5630.5 required by Sec. 17.32(b)(2), but showing, as 
to name and address, only the name of the taxpayer and the address of 
the taxpayer's principal place of business (or principal office in the 
case of a corporate taxpayer).



Sec. 17.52  Distribution of stamps for multiple locations.

    On receipt of the special tax stamps, the taxpayer shall verify that 
a stamp has been obtained for each location listed on the retained copy 
of the attachment to ATF Form 5630.5 required by Sec. 17.32(b)(2). The 
taxpayer shall designate one stamp for each location and shall type on 
it the trade name (if different from the name in which the stamp was 
issued) and address of the business conducted at the location for which 
the stamp is designated. The taxpayer shall then forward each stamp to 
the place of business designated on the stamp.



Sec. 17.53  Correction of errors on stamps.

    (a) Single location. On receipt of a special tax stamp, the taxpayer 
shall examine it to ensure that the name and address are correctly 
stated. If an error has been made, the taxpayer shall return the stamp 
to ATF at the address shown thereon, with a statement showing the nature 
of the error and setting forth the proper name or address. On receipt of 
the stamp and statement, the data shall be compared with that on ATF 
Form 5630.5, and if an error on the part of ATF has been made, the stamp 
shall be corrected and returned to the taxpayer. If the Form 5630.5 
agrees with the data on the stamp, the taxpayer shall be required to 
file a new Form 5630.5, designated ``Amended Return,'' disclosing the 
proper name and address.
    (b) Multiple locations. If an error is discovered on a special tax 
stamp obtained under the provisions of Sec. 17.32(b), relating to 
multiple locations, and if the error concerns any of the information 
contained in the attachment to Form 5630.5, the taxpayer shall return 
the stamp, with a statement showing the nature of the error and the 
correct data, to his or her principal office. The data on the stamp 
shall then be compared with the taxpayer's copy of the attachment to 
Form 5630.5, retained at the principal office. If the error is in the 
name and address and was made by the taxpayer, the taxpayer shall 
correct the stamp and return it to the designated place of business. If 
the error was made in the attachment to Form 5630.5, the taxpayer shall 
file with ATF an amended Form 5630.5 and an amended attachment with a 
statement showing the error.



Sec. 17.54  Lost or destroyed stamps.

    If a special tax stamp is lost or accidentally destroyed, the 
taxpayer shall immediately notify the appropriate ATF officer. On 
receipt of this notification, the appropriate ATF officer shall issue to 
the taxpayer a ``Certificate in Lieu of Lost or Destroyed Special Tax 
Stamp.'' The taxpayer shall keep the certificate available for 
inspection in the same manner as prescribed for a special tax stamp in 
Sec. 17.55.

[[Page 260]]



Sec. 17.55  Retention of special tax stamps.

    Taxpayers shall keep their special tax stamps at the place of 
business covered thereby for the period specified in Sec. 17.170, and 
shall make them available for inspection by any appropriate ATF officer 
during business hours.

(Title II, sec. 201, Pub. L. 85-859, 72 Stat. 1348 (26 U.S.C. 5146))

                           Change in Location



Sec. 17.61  General.

    A manufacturer who, during a tax year for which special tax has been 
paid, moves its place of manufacture to a place other than that 
specified on the related special tax stamp, shall register the change 
with ATF within 90 days after the move to the new premises, by executing 
a new return on ATF Form 5630.5, designated as ``Amended Return.'' This 
Amended Return shall set forth the time of the move and the address of 
the new location. The taxpayer shall also submit the special tax stamp 
to ATF, for endorsement of the change in location.

(Title II, sec. 201, Pub. L. 85-859, 72 Stat. 1374 (26 U.S.C. 5143))



Sec. 17.62  Failure to register.

    A manufacturer who fails to register a change of location with ATF, 
as required by Sec. 17.61, shall pay a new special tax for the new 
location if a claim for drawback is filed on distilled spirits used at 
the new location during the tax year for which the original special tax 
was paid.



Sec. 17.63  Certificates in lieu of lost stamps.

    The provisions of Secs. 17.61 and 17.62 apply to certificates issued 
in lieu of lost or destroyed special tax stamps.

                            Change in Control



Sec. 17.71  General.

    Certain persons, other than the person who paid the special tax, may 
qualify for succession to the same privileges granted by law to the 
taxpayer, to cover the remainder of the tax year for which the special 
tax was paid. Those who may qualify are specified in Sec. 17.72. To 
secure these privileges, the successor or successors shall file with 
ATF, within 90 days after the date on which the successor or successors 
assume control, a return on ATF Form 5630.5, showing the basis of the 
succession.



Sec. 17.72  Right of succession.

    Under the conditions set out in Sec. 17.71, persons listed below 
have the right of succession:
    (a) The surviving spouse or child, or executor, administrator, or 
other legal representative of a taxpayer.
    (b) A husband or wife succeeding to the business of his or her 
living spouse.
    (c) A receiver or trustee in bankruptcy, or an assignee for the 
benefit of creditors.
    (d) The members of a partnership remaining after the death or 
withdrawal of a general partner.



Sec. 17.73  Failure to register.

    A person eligible for succession to the privileges of a taxpayer, in 
accordance with Secs. 17.71 and 17.72, who fails to register the 
succession with ATF, as required by Sec. 17.71, shall pay a new special 
tax if a claim for drawback is filed on distilled spirits used by the 
successor during the tax year for which the original special tax was 
paid.



Sec. 17.74  Certificates in lieu of lost stamps.

    The provisions of Secs. 17.71-73 apply to certificates issued in 
lieu of lost or destroyed special tax stamps.



Sec. 17.75  Formation of partnership or corporation.

    If one or more persons who have paid special tax form a partnership 
or corporation, as a separate legal entity, to take over the business of 
manufacturing nonbeverage products, the new firm or corporation shall 
pay a new special tax in order to be eligible to receive drawback.



Sec. 17.76  Addition or withdrawal of partners.

    (a) General partners. When a business formed as a partnership, 
subject to special tax, admits one or more new general partners, the new 
partnership shall pay a new special tax in order to

[[Page 261]]

be eligible to receive drawback. Withdrawal of general partners is 
covered by Sec. 17.72(d).
    (b) Limited partners. Changes in the membership of a limited 
partnership requiring amendment of the certificate but not dissolution 
of the partnership are not changes that incur liability to additional 
special tax.



Sec. 17.77  Reincorporation.

    When a new corporation is formed to take over and conduct the 
business of one or more corporations that have paid special tax, the new 
corporation shall pay special tax and obtain a stamp in its own name.

                         Change in Name or Style



Sec. 17.81  General.

    A person who paid special tax is not required to pay a new special 
tax by reason of a mere change in the trade name or style under which 
the business is conducted, nor by reason of a change in management which 
involves no change in the proprietorship of the business.



Sec. 17.82  Change in capital stock.

    A new special tax is not required by reason of a change of name or 
increase in the capital stock of a corporation, if the laws of the State 
of incorporation provide for such changes without creating a new 
corporation.



Sec. 17.83  Sale of stock.

    A new special tax is not required by reason of the sale or transfer 
of all or a controlling interest in the capital stock of a corporation.

                          Refund of Special Tax



Sec. 17.91  Absence of liability, refund of special tax.

    The special tax paid may be refunded if it is established that the 
taxpayer did not file a claim for drawback for the period covered by the 
special tax stamp. If a claim for drawback is filed, the special tax may 
be refunded if no drawback is paid or allowed for the period covered by 
the stamp.



Sec. 17.92  Filing of refund claim.

    Claim for refund of special tax must be filed on ATF Form 2635 
(5620.8), Claim--Alcohol, Tobacco and Firearms Taxes. The claim must set 
forth in detail sufficient reasons and supporting facts of the exact 
basis of the claim. The special tax stamp shall be attached to the 
claim.

(68A Stat. 791 (26 U.S.C. 6402))

[T.D. ATF-379, 61 FR 31412, June 20, 1996, as amended by T.D. ATF-436, 
66 FR 5471, Jan. 19, 2001]



Sec. 17.93  Time limit for filing refund claim.

    A claim for refund of special tax shall not be allowed unless filed 
within three years after the payment of the tax.

(68A Stat. 808 (26 U.S.C. 6511))



                Subpart E--Bonds and Consents of Sureties



Sec. 17.101  General.

    A bond shall be filed by each person claiming drawback on a monthly 
basis. Persons who claim drawback on a quarterly basis are not required 
to file bonds. Bonds shall be prepared and executed on ATF Form 5154.3, 
Bond for Drawback Under 26 U.S.C. 5131, in accordance with the 
provisions of this part and the instructions printed on the form. The 
bond requirement of this part shall be satisfied either by bonds 
obtained from authorized surety companies or by deposit of collateral 
security. Appropriate ATF officers are authorized to approve all bonds 
and consents of surety required by this part.



Sec. 17.102  Amount of bond.

    The bond shall be a continuing one, in an amount sufficient to cover 
the total drawback to be claimed on spirits used during any quarter. 
However, the amount of any bond shall not exceed $200,000 nor be less 
than $1,000.



Sec. 17.103  Bonds obtained from surety companies.

    (a) The bond may be obtained from any surety company authorized by 
the

[[Page 262]]

Secretary of the Treasury to be a surety on Federal bonds. Surety 
companies so authorized are listed in the current revision of Department 
of the Treasury Circular 570 (Companies Holding Certificates of 
Authority as Acceptable Sureties on Federal Bonds and as Acceptable 
Reinsuring Companies), and subject to such amendatory circulars as may 
be issued from time to time. Bonds obtained from surety companies are 
also governed by the provisions of 31 U.S.C. 9304, and 31 CFR part 223.
    (b) A bond executed by two or more surety companies shall be the 
joint and several liability of the principal and the sureties; however, 
each surety company may limit its liability, in terms upon the face of 
the bond, to a definite, specified amount. This amount shall not exceed 
the limitations prescribed for each surety company by the Secretary, as 
stated in Department of the Treasury Circular 570. If the sureties limit 
their liability in this way, the total of the limited liabilities shall 
equal the required amount of the bond.
    (c) Department of the Treasury Circular No. 570 is published in the 
Federal Register annually on the first workday in July. As they occur, 
interim revisions of the circular are published in the Federal Register. 
Copies of the circular may be obtained from: Surety Bond Branch, 
Financial Management Service, Department of the Treasury, Washington, DC 
20227.

(Sec. 1, Pub. L. 97-258, 96 Stat. 1047 (31 U.S.C. 9304))



Sec. 17.104  Deposit of collateral.

    Except as otherwise provided by law or regulations, bonds or notes 
of the United States, or other obligations which are unconditionally 
guaranteed as to both interest and principal by the United States, may 
be pledged and deposited by principals as collateral security in lieu of 
bonds obtained from surety companies. Deposit of collateral security is 
governed by the provisions of 31 U.S.C. 9303, and 31 CFR part 225.

(Sec. 1, Pub. L. 97-258, 96 Stat. 1046 (31 U.S.C. 9301, 9303))



Sec. 17.105  Filing of powers of attorney.

    (a) Surety companies. The surety company shall prepare and submit 
with each bond, and with each consent to changes in the terms of a bond, 
a power of attorney in accordance with Sec. 17.6, authorizing the agent 
or officer who executed the bond or consent to act in this capacity on 
behalf of the surety. The power of attorney shall be prepared on a form 
provided by the surety company and executed under the corporate seal of 
the company. If other than a manually signed original is submitted, it 
shall be accompanied by certification of its validity.
    (b) Principal. The principal shall execute and file a power of 
attorney, in accordance with Sec. 17.6, for every person authorized to 
execute bonds on behalf of the principal.

(Sec. 1, Pub. L. 97-258, 96 Stat. 1047 (31 U.S.C. 9304, 9306))



Sec. 17.106  Consents of surety.

    The principal and surety shall execute on ATF Form 1533 (5000.18), 
Consent of Surety, any consents of surety to changes in the terms of 
bonds. Form 1533 (5000.18) shall be executed with the same formality and 
proof of authority as is required for the execution of bonds.



Sec. 17.107  Strengthening bonds.

    Whenever the amount of a bond on file and in effect becomes 
insufficient, the principal may give a strengthening bond in a 
sufficient amount, provided the surety is the same as on the bond 
already on file and in effect; otherwise a superseding bond covering the 
entire liability shall be filed. Strengthening bonds, filed to increase 
the bond liability of the surety, shall not be construed in any sense to 
be substitute bonds, and the appropriate ATF officer shall not approve a 
strengthening bond containing any notation which may be interpreted as a 
release of any former bond or as limiting the amount of either bond to 
less than its full amount.



Sec. 17.108  Superseding bonds.

    (a) The principal on any bond filed pursuant to this part may at any 
time replace it with a superseding bond.

[[Page 263]]

    (b) Executors, administrators, assignees, receivers, trustees, or 
other persons acting in a fiduciary capacity continuing or liquidating 
the business of the principal, shall execute and file a superseding bond 
or obtain the consent of the surety or sureties on the existing bond or 
bonds.
    (c) When, in the opinion of the appropriate ATF officer, the 
interests of the Government demand it, or in any case where the security 
of the bond becomes impaired in whole or in part for any reason 
whatever, the principal shall file a superseding bond. A superseding 
bond shall be filed immediately in case of the insolvency of the surety. 
If a bond is found to be not acceptable or for any reason becomes 
invalid or of no effect, the principal shall immediately file a 
satisfactory superseding bond.
    (d) A bond filed under this section to supersede an existing bond 
shall be marked by the obligors at the time of execution, ``Superseding 
Bond.'' When such a bond is approved, the superseded bond shall be 
released as to transactions occurring wholly subsequent to the effective 
date of the superseding bond, and notice of termination of the 
superseded bond shall be issued, as provided in Sec. 17.111.

                          Termination of Bonds



Sec. 17.111  General.

    (a) Bonds on ATF Form 5154.3 shall be terminated by the appropriate 
ATF officer, as to liability on drawback allowed after a specified 
future date, in the following circumstances:
    (1) Pursuant to a notice by the surety as provided in Sec. 17.112.
    (2) Following approval of a superseding bond, as provided in 
Sec. 17.108.
    (3) Following notification by the principal of an intent to 
discontinue the filing of claims on a monthly basis.
    (b) However, the bond shall not be terminated until all outstanding 
liability under it has been discharged. Upon termination, the 
appropriate ATF officer shall mark the bond ``canceled,'' followed by 
the date of cancellation, and shall issue a notice of termination of 
bond. A copy of this notice shall be given to the principal and to each 
surety.



Sec. 17.112  Notice by surety of termination of bond.

    A surety on any bond required by this part may at any time, in 
writing, notify the principal and the appropriate ATF officer in whose 
office the bond is on file that the surety desires, after a date named, 
to be relieved of liability under the bond. Unless the notice is 
withdrawn, in writing, before the date named in it, the notice shall 
take effect on that date. The date shall not be less than 60 days after 
the date on which both the notice and proof of service on the principal 
have been received by the appropriate ATF officer. The surety shall 
deliver one copy of the notice to the principal and the original to the 
appropriate ATF officer. The surety shall also file with the appropriate 
ATF officer an acknowledgment or other proof of service on the 
principal.



Sec. 17.113  Extent of release of surety from liability under bond.

    The rights of the principal as supported by the bond shall cease as 
of the date when termination of the bond takes effect, and the surety 
shall be relieved from liability for drawback allowed on and after that 
date. Liability for drawback previously allowed shall continue until the 
claims for such drawback have been properly verified by the appropriate 
ATF officer according to law and this part.



Sec. 17.114  Release of collateral.

    The release of collateral security pledged and deposited to satisfy 
the bond requirement of this part is governed by the provisions of 31 
CFR part 225. When the appropriate ATF officer determines that there is 
no outstanding liability under the bond, and is satisfied that the 
interests of the Government will not be jeopardized, the security shall 
be released and returned to the principal.

(Sec. 1, Pub. L. 97-258, 96 Stat. 1046 (31 U.S.C. 9301, 9303))



                     Subpart F--Formulas and Samples



Sec. 17.121  Product formulas.

    (a) General. Except as provided in Secs. 17.132 and 17.182, 
manufacturers shall

[[Page 264]]

file quantitative formulas for all preparations for which they intend to 
file drawback claims. Such formulas shall state the quantity of each 
ingredient, and shall separately state the quantity of spirits to be 
recovered or to be consumed as an essential part of the manufacturing 
process.
    (b) Filing. Formulas shall be filed on ATF Form 5154.1, Formula and 
Process for Nonbeverage Products. Filing shall be accomplished no later 
than 6 months after the end of the quarter in which taxpaid distilled 
spirits were first used to manufacture the product for purposes of 
drawback. If a product's formula is disapproved, no drawback shall be 
allowed on spirits used to manufacture that product, unless it is later 
used as an intermediate product, as provided in Sec. 17.137.
    (c) Numbering. The formulas shall be serially numbered by the 
manufacturer, commencing with number 1 and continuing thereafter in 
numerical sequence. However, a new formula for use at several plants 
shall be given the highest number next in sequence at any of those 
plants. The numbers that were skipped at the other plants shall not be 
used subsequently.
    (d) Distribution and retention of approved formulas. One copy of 
each approved Form 5154.1 shall be returned to the manufacturer. The 
formulas returned to manufacturers shall be kept in serial order at the 
place of manufacture, as provided in Sec. 17.170, and shall be made 
available to appropriate ATF officers for examination in the 
investigation of drawback claims.

[T.D. ATF-179, 61 FR 31412, June 20, 1996, as amended by T.D. ATF-436, 
66 FR 5471, Jan. 19, 2001]



Sec. 17.122  Amended or revised formulas.

    Except as provided in this section, amended or revised formulas are 
considered to be new formulas and shall be numbered accordingly. Minor 
changes may be made to a current formula on ATF Form 5154.1 with 
retention of the original formula number, if approval is obtained from 
the appropriate ATF officer. In order to obtain approval to make a minor 
formula change, the person holding the Form 5154.1 shall submit a letter 
of application to the appropriate ATF officer, indicating the formula 
change and requesting that the proposed change be considered a minor 
change. Each such application shall clearly identify the original 
formula by number, date of approval, and name of product. The 
application shall indicate whether the product is, has been, or will be 
used in alcoholic beverages, and shall specify whether the proposed 
change is intended as a substitution or merely as an alternative for the 
original formula. No changes may be made to current formulas without 
specific ATF approval in each case.

[T.D. ATF-179, 61 FR 31412, June 20, 1996, as amended by T.D. ATF-436, 
66 FR 5471, Jan. 19, 2001]



Sec. 17.123  Statement of process.

    Any person claiming drawback under the regulations in this part may 
be required, at any time, to file a statement of process, in addition to 
that required by ATF Form 5154.1, as well as any other data necessary 
for consideration of the claim for drawback. When pertinent to 
consideration of the claim, submission of copies of the commercial 
labels used on the finished products may also be required.



Sec. 17.124  Samples.

    Any person claiming drawback or submitting a formula for approval 
under the regulations in this part may be required, at any time, to 
submit a sample of each nonbeverage or intermediate product for 
analysis. If the product is manufactured with a mixture of oil or other 
ingredients, the composition of which is unknown to the claimant, a 1-
ounce sample of the mixture shall be submitted with the sample of 
finished product when so required.



Sec. 17.125  Adoption of formulas and processes.

    (a) Adoption of predecessor's formulas. If there is a change in the 
proprietorship of a nonbeverage plant and the successor desires to use 
the predecessor's formulas at the same location, the successor may, in 
lieu of submitting new formulas in its own name, adopt any or all of the 
formulas of the predecessor by filing a notice of adoption with the 
appropriate ATF officer. The notice shall be filed with the first

[[Page 265]]

claim relating to any of the adopted formulas. The notice shall list, by 
name and serial number, all formulas to be adopted, and shall state that 
the products will be manufactured in accordance with the adopted 
formulas and processes. The notice shall be accompanied by a certified 
copy of the articles of incorporation or other document(s) necessary to 
prove the transfer of ownership. The manufacturer shall retain a copy of 
the notice with the related formulas.
    (b) Adoption of manufacturer's own formulas from a different 
location. A manufacturer's own formulas may be adopted for use at 
another of the manufacturer's plants. Further, a wholly owned subsidiary 
may adopt the formulas of the parent company, and vice versa. A 
letterhead notice must be filed with the appropriate ATF officer and be 
accompanied by two photocopies of each formula to be adopted. The notice 
shall list the numbers of all formulas to be adopted and shall indicate 
the plant where each was originally approved and the plant(s) where each 
is to be adopted. Some evidence of the relationship between the plants 
involved in the adoption shall be attached to the notice. The notice 
shall be referenced in Part IV of the supporting data (ATF Form 5154.2) 
filed with the first claim relating to the adopted formula(s).

[T.D. ATF-179, 61 FR 31412, June 20, 1996, as amended by T.D. ATF-436, 
66 FR 5471, Jan. 19, 2001]



Sec. 17.126  Formulas for intermediate products.

    (a) The manufacturer shall submit a formula on ATF Form 5154.1 for 
each self-manufactured ingredient made with taxpaid spirits and intended 
for the manufacturer's own use in nonbeverage products, unless the 
formula for any such ingredient is fully expressed as part of the 
approved formula for each nonbeverage product in which that ingredient 
is used, or unless the formula for the ingredient is contained in one of 
the pharmaceutical publications listed in Sec. 17.132.
    (b) Upon receipt of Form 5154.1 covering a self-manufactured 
ingredient made with taxpaid spirits, the formula shall be examined 
under Sec. 17.131. If the formula is approved for drawback, the 
ingredient shall be treated as a finished nonbeverage product for 
purposes of this part, rather than as an intermediate product, 
notwithstanding its use by the manufacturer. (For example, see 
Sec. 17.152(d).) If the formula is disapproved for drawback, the 
ingredient may be treated as an intermediate product in accordance with 
this part. Requirements pertaining to intermediate products are found in 
Sec. 17.185(b).
    (c) If there is a change in the composition of an intermediate 
product, the manufacturer shall submit an amended or revised formula, as 
provided in Sec. 17.122.



Sec. 17.127  Self-manufactured ingredients treated optionally as unfinished nonbeverage products.

    A self-manufactured ingredient made with taxpaid spirits, which 
otherwise would be treated as an intermediate product, may instead be 
treated as an unfinished nonbeverage product, if the ingredient's 
formula is fully expressed as a part of the approved formula for the 
nonbeverage product in which the ingredient will be used. A manufacturer 
desiring to change the treatment of an ingredient from ``intermediate 
product'' to ``unfinished nonbeverage product'' (or vice versa) may do 
so by resubmitting the applicable formula(s) on ATF Form 5154.1. 
Requirements pertaining to unfinished nonbeverage products are found in 
Sec. 17.185(c).

                          Approval of Formulas



Sec. 17.131  Formulas on ATF Form 5154.1.

    Upon receipt, formulas on ATF Form 5154.1 shall be examined and, if 
found to be medicines, medicinal preparations, food products, flavors, 
flavoring extracts, or perfume which are unfit for beverage purposes and 
which otherwise meet the requirements of law and this part, they shall 
be approved for drawback. If the formulas do not meet the requirements 
of the law and regulations for drawback products, they shall be 
disapproved.



Sec. 17.132  U.S.P., N.F., and H.P.U.S. preparations.

    (a) General. Except as otherwise provided by paragraph (b) of this 
section

[[Page 266]]

or by ATF ruling, formulas for compounds in which alcohol is a 
prescribed quantitative ingredient, which are stated in the current 
revisions or editions of the United States Pharmacopoeia (U.S.P.), the 
National Formulary (N.F.), or the Homeopathic Pharmacopoeia of the 
United States (H.P.U.S.), shall be considered as approved formulas and 
may be used as formulas for drawback products without the filing of ATF 
Form 5154.1.
    (b) Exceptions. Alcohol (including dehydrated alcohol and dehydrated 
alcohol injection), U.S.P.; alcohol and dextrose injection, U.S.P.; and 
tincture of ginger, H.P.U.S., have been found to be fit for beverage use 
and are disapproved for drawback. All attenuations of other H.P.U.S. 
products diluted beyond one part in 10,000 (``4x'') are also disapproved 
for drawback, unless the manufacturer receives approval for a formula 
submitted on Form 5154.1 in accordance with this subpart. The formula 
for such attenuations shall be submitted with a sample of the product 
and a statement explaining why it should be classified as unfit for 
beverage use.



Sec. 17.133  Food product formulas.

    Formulas for nonbeverage food products on ATF Form 5154.1 may be 
approved if they are unfit for beverage purposes. Approval does not 
authorize manufacture or sale contrary to State law. Examples of food 
products that have been found to be unfit for beverage purposes are 
stated below:
    (a) Sauces or syrups. Sauces, or syrups consisting of sugar 
solutions and distilled spirits, in which the alcohol content is not 
more than 12 percent by volume and the sugar content is not less than 60 
grams per 100 cubic centimeters.
    (b) Brandied fruits. Brandied fruits consisting of solidly packaged 
fruits, either whole or segmented, and distilled spirits products not 
exceeding the quantity and alcohol content necessary for flavoring and 
preserving. Generally, brandied fruits will be considered to have met 
these standards if the container is well filled, the alcohol in the 
liquid portion does not exceed 23 percent by volume, and the liquid 
portion does not exceed 45 percent of the volume of the container.
    (c) Candies. Candies with alcoholic fillings, if the fillings meet 
the standards prescribed for sauces and syrups by paragraph (a) of this 
section.
    (d) Other food products. Food products such as mincemeat, plum 
pudding, and fruit cake, where only sufficient distilled spirits are 
used for flavoring and preserving; and ice cream and ices where only 
sufficient spirits are used for flavoring purposes. Also food adjuncts, 
such as preservatives, emulsifying agents, and food colorings, that are 
unfit for beverage purposes and are manufactured and used, or sold for 
use, in food.



Sec. 17.134  Determination of unfitness for beverage purposes.

    The appropriate ATF officer has responsibility for determining 
whether products are fit or unfit for beverage purposes within the 
meaning of 26 U.S.C. 5131. This determination may be based either on the 
content and description of the ingredients as shown on ATF Form 5154.1, 
or on organoleptic examination. In such examination, samples of products 
may be diluted with water to an alcoholic concentration of 15% and 
tasted. Sale or use for beverage purposes is indicative of fitness for 
beverage use.



Sec. 17.135  Use of specially denatured alcohol (S.D.A.).

    (a) Use of S.D.A. in nonbeverage or intermediate products--(1) 
General. Except as provided in paragraph (b) of this section, the use of 
specially denatured alcohol (S.D.A.) and taxpaid spirits in the same 
product by a nonbeverage manufacturer is prohibited where drawback of 
tax is claimed.
    (2) Alternative formulations. No formula for a product on ATF Form 
5154.1 shall be approved for drawback under this subpart if the 
manufacturer also has on file an approved ATF Form 1479-A or Form 
5150.19, Formula for Article Made With Specially Denatured Alcohol or 
Rum, pertaining to the same product.
    (b) Use of S.D.A. in ingredients--(1) Purchased ingredients. 
Generally, purchased ingredients containing S.D.A.

[[Page 267]]

may be used in nonbeverage or intermediate products. However, such 
ingredients shall not be used in medicinal preparations or flavoring 
extracts intended for internal human use, where any of the S.D.A. 
remains in the finished product.
    (2) Self-manufactured ingredients. Self-manufactured ingredients may 
be made with S.D.A. and used in nonbeverage or intermediate products, 
provided--
    (i) No taxpaid spirits are used in manufacturing such ingredients; 
and
    (ii) All S.D.A. is recovered or dissipated from such ingredients 
prior to their use in nonbeverage or intermediate products. (Recovery of 
S.D.A. shall be in accordance with subpart K of part 20 of this chapter; 
recovered S.D.A., with or without its original denaturants, shall not be 
reused in nonbeverage or intermediate products.)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1372, as amended (26 U.S.C. 5273))



Sec. 17.136  Compliance with Food and Drug Administration requirements.

    A product is not a medicine, medicinal preparation, food product, 
flavor, flavoring extract, or perfume for nonbeverage drawback if its 
formula would violate a ban or restriction of the U.S. Food and Drug 
Administration (FDA) pertaining to such products. If FDA bans or 
restricts the use of any ingredient in such a way that further 
manufacture of a product in accordance with its formula would violate 
the ban or restriction, then the manufacturer shall change the formula 
and resubmit it on ATF Form 5154.1 . This section does not preclude 
approval for products manufactured solely for export or for uses other 
than internal human consumption (e.g. tobacco flavors or animal feed 
flavors) in accordance with laws and regulations administered by FDA. 
Under Sec. 17.123, manufacturers may be required to demonstrate 
compliance with FDA requirements applicable to this section.



Sec. 17.137  Formulas disapproved for drawback.

    A formula may be disapproved for drawback either because it does not 
prescribe appropriate ingredients in sufficient quantities to make the 
product unfit for beverage use, or because the product is neither a 
medicine, a medicinal preparation, a food product, a flavor, nor a 
flavoring extract. The formula for a disapproved product may be used as 
an intermediate product formula under Sec. 17.126. No drawback will be 
allowed on distilled spirits used in a disapproved product, unless that 
product is later used in the manufacture of an approved nonbeverage 
product. In the case of a product that is disapproved because it is fit 
for beverage use, any further use or disposition of such a product, 
other than as an intermediate product in accordance with this part, 
subjects the manufacturer to the qualification requirements of parts 1 
and 19 of this chapter.



                     Subpart G--Claims for Drawback



Sec. 17.141  Drawback.

    Upon the filing of a claim as provided in this subpart, drawback 
shall be allowed to any person who meets the requirements of this part. 
Drawback shall be paid at the rate specified by 26 U.S.C. 5134 on each 
proof gallon of distilled spirits on which the tax has been paid or 
determined and which have been used in the manufacture of nonbeverage 
products. The drawback rate is $1.00 less than the effective tax rate. 
Drawback shall be allowed only to the extent that the claimant can 
establish, by evidence satisfactory to the appropriate ATF officer, the 
actual quantity of taxpaid or tax-determined distilled spirits used in 
the manufacture of the product, and the effective tax rate applicable to 
those spirits. Special tax as a manufacturer of nonbeverage products 
shall be paid before drawback is allowed.



Sec. 17.142  Claims.

    (a) General. The manufacturer must file claim for drawback with the 
appropriate ATF officer who has the authority to approve or disapprove 
claims. A separate claim shall be filed for each place of business. Each 
claim shall pertain only to distilled spirits used in the manufacture or 
production of nonbeverage products during any one quarter of the tax 
year. Unless the manufacturer is eligible to file monthly claims (see 
Secs. 17.143 and 17.144), only one claim per quarter may be filed for 
each place

[[Page 268]]

of business. Claims shall be filed on ATF Form 2635 (5620.8), Claim--
Alcohol and Tobacco Taxes.
    (b) Manufacturers who are also proprietors of distilled spirits 
plants. If a manufacturer of nonbeverage products is owned and operated 
by the same business entity that owns and operates a distilled spirits 
plant, the manufacturer's claim for drawback may be filed for credit on 
Form 2635 (5620.8). After the claim is approved, the distilled spirits 
plant may use the claim as an adjustment decreasing the taxes due in 
Schedule B of ATF Form 5000.24, Excise Tax Return. Adjustments resulting 
from an approved drawback claim are not subject to interest. This 
procedure may be utilized only if the manufacturer of nonbeverage 
products and the distilled spirits plant have the same employer 
identification number.

[T.D. ATF-179, 61 FR 31412, June 20, 1996, as amended by T.D. ATF-436, 
66 FR 5471, Jan. 19, 2001]



Sec. 17.143  Notice for monthly claims.

    If the manufacturer has notified the appropriate ATF officer, in 
writing, of an intention to file claims on a monthly basis instead of a 
quarterly basis, and has filed a bond in compliance with the provisions 
of this part, claims may be filed monthly instead of quarterly. The 
election to file monthly claims shall not preclude a manufacturer from 
filing a single claim covering an entire quarter, or a single claim 
covering just two months of a quarter, or two claims (one of them 
covering one month and the other covering two months). An election for 
the filing of monthly claims may be withdrawn by the manufacturer by 
filing a notice to that effect, in writing, with the appropriate ATF 
officer.



Sec. 17.144  Bond for monthly claims.

    Each person intending to file claims for drawback on a monthly basis 
shall file an executed bond on ATF Form 5154.3, conforming to the 
provisions of subpart E of this part. A monthly drawback claim shall not 
be allowed until bond coverage in a sufficient amount has been approved 
by the regional director (compliance). When the limit of liability under 
a bond given in less than the maximum amount has been reached, further 
drawback on monthly claims may be suspended until a strengthening or 
superseding bond in a sufficient amount is furnished.



Sec. 17.145  Date of filing claim.

    Quarterly claims for drawback shall be filed within six months after 
the quarter in which the distilled spirits covered by the claim were 
used in the manufacture of nonbeverage products. Monthly claims for 
drawback may be filed at any time after the end of the month in which 
the distilled spirits covered by the claim were used in the manufacture 
of nonbeverage products, but shall be filed not later than the close of 
the sixth month succeeding the quarter in which the spirits were used.



Sec. 17.146  Information to be shown by the claim.

    The claim shall set forth the following:
    (a) Whether the special tax has been paid.
    (b) That the distilled spirits on which drawback is claimed were 
fully taxpaid or tax-determined at the effective tax rate applicable to 
the distilled spirits.
    (c) That the distilled spirits on which the drawback is claimed were 
used in the manufacture of nonbeverage products.
    (d) Whether the nonbeverage products were manufactured in compliance 
with quantitative formulas approved under subpart F of this part. (If 
not, attach explanation.)
    (e) That the data submitted in support of the claim are correct.



Sec. 17.147  Supporting data.

    (a) Each claim for drawback shall be accompanied by supporting data 
presented according to the format shown on ATF Form 5154.2, Supporting 
Data for Nonbeverage Drawback Claims (or according to any other suitable 
format which provides the same information). Modifications of Form 
5154.2 may be used without prior authorization, if the modified format 
clearly shows all of the required information that is pertinent to the 
manufacturing operation. Under Sec. 17.123, the appropriate ATF officer 
may require additional supporting

[[Page 269]]

data when needed to determine the correctness of drawback claims.
    (b) Separate data shall be shown for eligible distilled spirits 
taxpaid at different effective tax rates. This requirement applies to 
all eligible spirits, including eligible recovered alcohol and eligible 
spirits contained in intermediate products.
    (c) Separate data shall be shown for imported rum, spirits from 
Puerto Rico containing at least 92% rum, and spirits from the U.S. 
Virgin Islands containing at least 92% rum. The total number of proof 
gallons of each such category used subject to drawback during the claim 
period shall also be shown, with separate totals for each effective tax 
rate. These amounts shall include eligible spirits and rum from 
intermediate products or recovered alcohol.
    (d) Any gain in eligible distilled spirits reported in the 
supporting data shall be reflected by an equivalent deduction from the 
amount of drawback claimed. Gains shall not be offset by known losses.



Sec. 17.148  Allowance of claims.

    (a) General. Except in the case of fraudulent noncompliance, no 
claim for drawback shall be denied for a failure to comply with either 
26 U.S.C. 5131-5134 or the requirements of this part, if the claimant 
establishes that spirits on which the tax has been paid or determined 
were in fact used in the manufacture of medicines, medicinal 
preparations, food products, flavors, flavoring extracts, or perfume, 
which were unfit for beverage purposes.
    (b) Penalty. Noncompliance with the requirements of 26 U.S.C. 5131-
5134 or of this part subjects the claimant to a civil penalty of $1,000 
for each separate product, reflected in a claim for drawback, to which 
the noncompliance relates, or the amount claimed for that product, 
whichever is less, unless the claimant establishes that the 
noncompliance was due to reasonable cause. Late filing of a claim 
subjects the claimant to a civil penalty of $1,000 or the amount of the 
claim, whichever is less, unless the claimant establishes that the 
lateness was due to reasonable cause.
    (c) Reasonable cause. Reasonable cause exists where a claimant 
establishes it exercised ordinary business care and prudence, and still 
was unable to comply with the statutory and regulatory requirements. 
Ignorance of law or regulations, in and of itself, is not reasonable 
cause. Each case is individually evaluated.

(Sec. 452, Pub. L. 98-369, 98 Stat. 819 (26 U.S.C. 5134(c))

                       Spirits Subject to Drawback



Sec. 17.151  Use of distilled spirits.

    Distilled spirits are considered to have been used in the 
manufacture of a product under this part if the spirits are consumed in 
the manufacture, are incorporated into the product, or are determined by 
ATF to have been otherwise utilized as an essential part of the 
manufacturing process. However, spirits lost by causes such as spillage, 
leakage, breakage or theft, and spirits used for purposes such as 
rinsing or cleaning a system, are not considered to have been used in 
the manufacture of a product.



Sec. 17.152  Time of use of spirits.

    (a) General. Distilled spirits shall be considered used in the 
manufacture of a product as soon as that product contains all the 
ingredients called for by its formula.
    (b) Spirits used in an ion exchange column. Distilled spirits used 
in recharging an ion exchange column, the operation of which is 
essential to the production of a product, shall be considered to be used 
when the spirits are entered into the manufacturing system in accordance 
with the product's formula.
    (c) Products requiring additional processing or treatment. Further 
manipulation of a product, such as aging or filtering, subsequent to the 
mixing together of all of its ingredients, shall not postpone the time 
when spirits are considered used, as determined under paragraph (a) of 
this section. This is true even if at the time of use there has not yet 
been a final determination of alcoholic content by assay. If, however, 
it is later found necessary to add more distilled spirits to standardize 
the product, such added spirits shall be

[[Page 270]]

considered as used in the period during which they were added.
    (d) Nonbeverage products used to manufacture other products. 
Nonbeverage products may be used to manufacture other nonbeverage (or 
intermediate) products. However, such subsequent usage of a nonbeverage 
product shall not affect the time when the distilled spirits contained 
therein are considered used. When distilled spirits are used in the 
manufacture of a nonbeverage product, the time of use shall be the point 
at which that product first contains all of its prescribed ingredients, 
and such use shall not be determined by the time of any subsequent usage 
of that product in another product.



Sec. 17.153  Recovered spirits.

    (a) Recovery from intermediate products. Eligible spirits recovered 
in the manufacture of intermediate products are not subject to drawback 
until such recovered spirits are used in the manufacture of a 
nonbeverage product. (However, see Sec. 17.127 with respect to optional 
treatment of ingredients as unfinished nonbeverage products, rather than 
as intermediate products.) Spirits recovered in the manufacture of 
intermediate products shall be reused only in the manufacture of 
intermediate or nonbeverage products.
    (b) Recovery from nonbeverage products. Distilled spirits recovered 
in the manufacture of a nonbeverage product are considered as having 
been used in the manufacture of that product. If the spirits were 
eligible when so used, they became subject to drawback at that time. 
Upon recovery, such spirits may be reused in the manufacture of 
nonbeverage products, but shall not be reused for any other purpose. 
When reused, such recovered spirits are not again eligible for drawback 
and shall not be used in the manufacture of intermediate products.
    (c) Cross references. For additional provisions respecting the 
recovery of distilled spirits and related recordkeeping requirements, 
see Secs. 17.168 and 17.183.



Sec. 17.154  Spirits contained in intermediate products.

    Spirits contained in an intermediate product are not subject to 
drawback until that intermediate product is used in the manufacture of a 
nonbeverage product.



Sec. 17.155  Spirits consumed in manufacturing intermediate products.

    Spirits consumed in the manufacture of an intermediate product--
which are not contained in the intermediate product at the time of its 
use in nonbeverage products--are not subject to drawback. Such spirits 
are not considered to have been used in the manufacture of nonbeverage 
products. However, see Sec. 17.127 with respect to optional treatment of 
ingredients as unfinished nonbeverage products, rather than as 
intermediate products.



                           Subpart H--Records



Sec. 17.161  General.

    Each person claiming drawback on taxpaid distilled spirits used in 
the manufacture of nonbeverage products shall maintain records showing 
the information required in this subpart. No particular form is 
prescribed for these records, but the data required to be shown shall be 
clearly recorded and organized to enable appropriate ATF officers to 
trace each operation or transaction, monitor compliance with law and 
regulations, and verify the accuracy of each claim. Ordinary business 
records, including invoices and cost accounting records, are acceptable 
if they show the required information or are annotated to show any such 
information that is lacking. The records shall be kept complete and 
current at all times, and shall be retained by the manufacturer at the 
place covered by the special tax stamp for the period prescribed in 
Sec. 17.170.



Sec. 17.162  Receipt of distilled spirits.

    (a) Distilled spirits received in tank cars, tank trucks, barrels, 
or drums. For distilled spirits received in tank cars, tank trucks, 
barrels, or drums, the manufacturer shall record, with respect to each 
shipment received--

[[Page 271]]

    (1) The date of receipt;
    (2) The name and address of the person from whom received;
    (3) The serial number or other identification mark (if any) of each 
tank car, tank truck, barrel, or drum;
    (4) The name of the producer or warehouseman who paid or determined 
the tax;
    (5) The effective tax rate (if other than the rate prescribed by 26 
U.S.C. 5001); and
    (6) The kind, quantity, and proof (or alcohol percentage by volume) 
of the spirits.
    (b) Distilled spirits received in bottles. For distilled spirits 
received in bottles, the manufacturer shall record--
    (1) The date of receipt;
    (2) The name and address of the seller;
    (3) The serial number of each case, if the bottles are received in 
cases;
    (4) The name of the bottler;
    (5) The effective tax rate (if other than the rate prescribed by 26 
U.S.C. 5001); and
    (6) The kind, quantity, and proof (or alcohol percentage by volume) 
of the spirits.
    (c) Distilled spirits received by pipeline. For distilled spirits 
received by pipeline, the manufacturer shall record--
    (1) The date of receipt;
    (2) The name of the producer or warehouseman who paid or determined 
the tax;
    (3) The effective tax rate (if other than the rate prescribed by 26 
U.S.C. 5001); and
    (4) The kind, quantity, and proof (or alcohol percentage by volume) 
of the spirits.
    (d) Determination of quantity. At the time of receipt, each 
manufacturer shall determine (preferably by weight) and record the exact 
number of proof gallons of distilled spirits received. The amount 
received in bottles may be determined by the required statements on the 
labels. The amount received in sealed drums with no evidence of leakage 
may be determined from the record of shipment, which is required by 
Sec. 19.780 of this chapter to accompany spirits received from a 
distilled spirits plant. If spirits are received in a tank car or tank 
truck, and the result of the manufacturer's gauge of the spirits is 
within 0.2 percent of the number of proof gallons reported on the record 
of shipment required by Sec. 19.780, then the number of proof gallons 
reported on that record may be recorded as the quantity received. 
Nevertheless, the receiving gauge shall be noted on the record of 
receipt. If, for any shipment, the amount recorded in the manufacturer's 
records as the quantity received is greater than the amount shown as 
taxpaid on the record required by Sec. 19.780, a deduction equivalent to 
the excess shall be made from the amount of drawback claimed in the 
manufacturer's claim covering that period. If no claim is filed for that 
period, then the deduction shall be made in the manufacturer's next 
claim. Losses in transit that exceed the 0.2 percent limitation provided 
in this paragraph shall be determined and noted on the record of 
receipt. Such losses shall not be recorded as distilled spirits 
received.
    (e) Receipt of imported rum, or spirits from Puerto Rico or the 
Virgin Islands. If spirits are received which contain at least 92% rum, 
and which originate from Puerto Rico or the U.S. Virgin Islands, the 
record of receipt shall indicate the place of origin. If rum is 
received, the record shall indicate whether it is from Puerto Rico, from 
the U.S. Virgin Islands, imported from other countries, or domestic.
    (f) Shipments from distilled spirits plants. If spirits are received 
directly from the distilled spirits plant that paid or determined the 
tax, the manufacturer shall retain the record of shipment required by 
Sec. 19.780 of this chapter. To the extent that the information on that 
record duplicates the requirements of this section, retention of that 
record shall satisfy those requirements. If there are differences 
between the information on the record of shipment and the information 
required to be recorded by this section, the requirements of this 
section may be met by appropriate annotations on the record of shipment.



Sec. 17.163  Evidence of taxpayment of distilled spirits.

    (a) Shipments from distilled spirits plants. For each shipment of 
taxpaid spirits from the bonded premises of a

[[Page 272]]

distilled spirits plant, the manufacturer shall obtain the record of 
shipment prepared by the supplier under Sec. 19.780 of this chapter. 
This record shall be retained with the commercial invoice (if the latter 
is a separate document) as evidence of taxpayment of the spirits. The 
record shall show the effective tax rate(s) (if other than the rate 
prescribed by 26 U.S.C. 5001) applicable to the shipment.
    (b) Purchases from wholesale and retail liquor dealers. 
Manufacturers shall obtain commercial invoices or other documentation 
pertaining to purchases of distilled spirits from wholesale and retail 
liquor dealers (including such dealership operations when conducted in 
conjunction with a distilled spirits plant). For spirits other than 
alcohol, grain spirits, neutral spirits, distilled gin, or straight 
whisky (as defined in the standards of identity prescribed by Sec. 5.22 
of this chapter), the manufacturer of nonbeverage products shall obtain 
evidence, from the producer or bottler of the spirits, as to the 
effective tax rate paid thereon.
    (c) Imported spirits. For imported spirits that were taxpaid through 
Customs, evidence of such taxpayment (such as Customs Forms 7501 and 
7505, receipted to indicate payment of tax, and the certificate of 
effective tax rate computation, if applicable) shall be secured from the 
importer and retained by the manufacturer.
    (d) Evidence of effective tax rate. If the evidence of effective tax 
rate, required by this section for distilled spirits products that may 
contain wine or flavors, is not obtained, drawback shall only be allowed 
based on the lowest effective tax rate possible for the kind of 
distilled spirits product used.



Sec. 17.164  Production record.

    (a) General. Each manufacturer shall keep a production record for 
each batch of intermediate product and for each batch of nonbeverage 
product. The production record shall be an original record made at the 
time of production by a person (or persons) having actual knowledge 
thereof. If any product is produced by a continuous process rather than 
by batches, the production record shall pertain to the total quantity of 
that product produced during each claim period.
    (b) Information to be shown. The record shall show the name and 
formula number of the product, the actual quantities of all ingredients 
used in the manufacture of the batch (including the proof or alcohol 
percentage by volume of all spirits), the date when eligible spirits 
were considered used (see Sec. 17.152), the effective tax rate 
applicable to those spirits (if other than the rate prescribed by 26 
U.S.C. 5001), and the quantity of product produced. The alcohol content 
of the product shall be shown if a test of alcohol content was made (see 
paragraph (e) of this section). Usage of eligible and ineligible spirits 
shall be shown separately. If spirits from Puerto Rico or the U.S. 
Virgin Islands, containing at least 92% rum, were used, the record shall 
indicate their place of origin. If rum was used, the record shall 
indicate whether it was from Puerto Rico, from the U.S. Virgin Islands, 
imported from other countries, or domestic. If spirits were recovered, 
the production record shall so indicate, and the record required by 
Sec. 17.168 shall be kept. If drawback is claimed on spirits consumed as 
an essential part of the manufacture of a nonbeverage product, which 
were not contained in that product at its completion, then the 
production record shall show the quantity of spirits so consumed in the 
manufacture of each batch.
    (c) Specificity of information. The production record shall refer to 
ingredients by the same names as are used for them in the product's 
formula. This includes formulas submitted to ATF and formulas contained 
in the publications listed in Sec. 17.132. Other names for the 
ingredients may be added in the production record, if necessary for the 
manufacturer's operations. Usage of ingredients (including spirits) may 
be shown in units of weight or volume.
    (d) Determining quantity of distilled spirits used. Each 
manufacturer shall accurately determine, by weight or volume, and record 
in the production records the quantity of all distilled spirits used. 
When the quantity used is determined by volume, adjustments shall be 
made if the temperature of the spirits is above or below 60 degrees

[[Page 273]]

Fahrenheit. A table for correction of volume of spirituous liquors to 60 
degrees Fahrenheit, Table 7 of the ``Gauging Manual,'' is available. See 
subpart E of part 30 of this chapter and Sec. 30.67. Losses after 
receipt due to leakage, spillage, evaporation, or other causes not 
essential to the manufacturing process shall be accurately recorded in 
the manufacturer's permanent records at the time such losses are 
determined.
    (e) Tests of alcohol content. At representative intervals, the 
manufacturer shall verify the alcohol content of nonbeverage products. 
The results of such tests shall be recorded.



Sec. 17.165  Receipt of raw ingredients.

    For raw ingredients destined to be used in nonbeverage or 
intermediate products, the manufacturer shall record, for each shipment 
received--
    (a) The date of receipt;
    (b) The quantity received; and
    (c) The identity of the supplier.



Sec. 17.166  Disposition of nonbeverage products.

    (a) Shipments. For each shipment of nonbeverage products, the 
manufacturer shall record--
    (1) The formula number of the product;
    (2) The date of shipment;
    (3) The quantity shipped; and
    (4) The identity of the consignee.
    (b) Other disposition. For other dispositions of nonbeverage 
products, the manufacturer shall record--
    (1) The type of disposition;
    (2) The date of disposition; and
    (3) The quantity of each product so disposed of.
    (c) Exception. The manufacturer need not keep the records required 
by paragraphs (a) and (b) of this section for any nonbeverage product 
which either contains less than 3 percent of distilled spirits by 
volume, or is sold by the producer directly to the consumer in retail 
quantities. However, when needed for protection of the revenue, the 
appropriate ATF officer may at any time require the keeping of these 
records upon giving at least five days' notice to the manufacturer.



Sec. 17.167  Inventories.

    (a) Distilled spirits. The ``on hand'' figures reported in Part II 
of ATF Form 5154.2 shall be verified by physical inventories taken as of 
the end of each quarter in which nonbeverage products were manufactured 
for purposes of drawback. Spirits taxpaid at different effective tax 
rates shall be inventoried separately. The inventory record shall show 
the date inventory was taken, the person(s) by whom it was taken, 
subtotals for each product inventoried, and any gains or losses 
disclosed; and shall be retained with the manufacturer's records. The 
manufacturer shall explain in Part IV of the supporting data (Form 
5154.2) any discrepancy between the amounts on hand as disclosed by 
physical inventory and the amounts indicated by the manufacturer's 
records. Any gain in eligible spirits disclosed by inventory requires an 
equivalent deduction from the claim with which the inventory is 
reported. Gains shall not be offset by known losses. If no claim is 
filed for a quarter (nor for any monthly period therein), then no 
physical inventory is required for that quarter.
    (b) Raw ingredients and nonbeverage products. When necessary for 
ensuring compliance with regulations and protection of the revenue, the 
appropriate ATF officer may require a manufacturer to take physical 
inventories of finished nonbeverage products, and/or raw ingredients 
intended for use in the manufacture of nonbeverage or intermediate 
products. The results of such inventories shall be recorded in the 
manufacturer's records. Any discrepancy between the amounts on hand as 
disclosed by physical inventory and such amounts as indicated by the 
manufacturer's records shall also be recorded with an explanation of its 
cause.



Sec. 17.168  Recovered spirits.

    (a) Each manufacturer intending to recover distilled spirits under 
the provisions of this part shall first notify the appropriate ATF 
officer. Any apparatus used to separate alcohol is subject to the 
registration requirements of 26 U.S.C. 5179 and subpart C of part 29 of 
this chapter. Recovery operations

[[Page 274]]

shall only be conducted on the premises covered by the manufacturer's 
special tax stamp.
    (b) The manufacturer shall keep a record of the distilled spirits 
recovered and the subsequent use to which such spirits are put. The 
record shall show--
    (1) The date of recovery;
    (2) The commodity or process from which the spirits were recovered;
    (3) The amount in proof gallons, or by weight and proof (or alcohol 
percentage by volume) of distilled spirits recovered;
    (4) The amount in proof gallons, or by weight and proof (or alcohol 
percentage by volume) of recovered distilled spirits reused;
    (5) The commodity in which the recovered distilled spirits were 
reused; and
    (6) The date of reuse.
    (c) Whenever recovered spirits are destroyed (see Sec. 17.183), the 
record shall further show--
    (1) The reason for the destruction;
    (2) The date, time, location, and manner of destruction;
    (3) The number of proof gallons destroyed; and
    (4) The name of the individual who accomplished or supervised the 
destruction.

[T.D. ATF-379, 61 FR 31412, June 20, 1996, as amended by T.D. ATF-462, 
66 FR 42736, Aug. 15, 2001]



Sec. 17.169  Transfer of intermediate products.

    When intermediate products are transferred as permitted by 
Sec. 17.185(b), supporting records of such transfers shall be kept at 
the shipping and receiving plants, showing the date and quantity of each 
product transferred.



Sec. 17.170  Retention of records.

    Each manufacturer shall retain for a period of not less than 3 years 
all records required by this part, a copy of all claims and supporting 
data filed in support thereof, all commercial invoices or other 
documents evidencing taxpayment or tax-determination of domestic 
spirits, all documents evidencing taxpayment of imported spirits, and 
all bills of lading received which pertain to shipments of spirits. In 
addition, a copy of each formula submitted on ATF Form 5154.1 shall be 
retained at each factory where the formula is used, for not less than 3 
years from the date of filing of the last claim for drawback under the 
formula. A copy of an approval to use an alternate method or procedure 
shall be retained as long as the manufacturer employs the method or 
procedure, and for 3 years thereafter. Further, the appropriate ATF 
officer may require these records, forms, and documents to be retained 
for an additional period of not more than 3 years in any case where he 
or she deems such retention to be necessary or advisable for protection 
of the revenue.



Sec. 17.171  Inspection of records.

    All of the records, forms, and documents required to be retained by 
Sec. 17.170 shall be kept at the place covered by the special tax stamp 
and shall be readily available during the manufacturer's regular 
business hours for examination and copying by appropriate ATF officers. 
At the same time, any other books, papers, records or memoranda in the 
possession of the manufacturer, which have a bearing upon the matters 
required to be alleged in a claim for drawback, shall be available for 
inspection by appropriate ATF officers.

(Sec. 5133, 68A Stat. 623 (26 U.S.C. 5133); sec. 201, Pub. L. 85-859, 72 
Stat. 1348 (26 U.S.C. 5146)).



                   Subpart I--Miscellaneous Provisions



Sec. 17.181  Exportation of medicinal preparations and flavoring extracts.

    Medicinal preparations and flavoring extracts, approved for drawback 
under the provisions of this part, may be exported subject to 19 U.S.C. 
1313(d), which authorizes export drawback equal to the entire amount of 
internal revenue tax found to have been paid on the domestic alcohol 
used in the manufacture of such products. (Note: Export drawback is not 
allowed for imported alcohol under this provision of customs law.) 
Claims for such export drawback shall be filed in accordance with the 
applicable regulations of the U.S. Customs Service. Such claims may 
cover either the full rate of tax which has

[[Page 275]]

been paid on the alcohol, if no nonbeverage drawback has been claimed 
thereon, or else the remainder of the tax if nonbeverage drawback under 
26 U.S.C. 5134 has been or will be claimed.



Sec. 17.182  Drawback claims by druggists.

    Drawback of tax under 26 U.S.C. 5134 is allowable on taxpaid 
distilled spirits used in compounding prescriptions by druggists who 
have paid the special tax prescribed by 26 U.S.C. 5131. The 
prescriptions so compounded shall be shown in the supporting data by 
listing the first and last serial numbers thereof. The amount of taxpaid 
spirits used in each prescription need not be shown, but such 
prescriptions shall be made available for examination by appropriate ATF 
officers. If refills have been made of prescriptions received in a 
previous claim period, their serial numbers shall be recorded 
separately. Druggists claiming drawback as authorized by this section 
are subject to all the applicable requirements of this part, except 
those requiring the filing of quantitative formulas.



Sec. 17.183  Disposition of recovered alcohol and material from which alcohol can be recovered.

    (a) Recovered alcohol. Manufacturers of nonbeverage products shall 
not sell or transfer recovered spirits to any other premises without ATF 
authorization under Sec. 17.3. If recovered spirits are stored pending 
reuse, storage facilities shall be adequate to protect the revenue. If 
recovered spirits are destroyed, the record required by Sec. 17.168(c) 
must be kept. Spirits recovered from intermediate products may be 
destroyed without notice to ATF. Spirits recovered from nonbeverage 
products may be destroyed pursuant to a notice filed with the regional 
director (compliance) at least 12 days prior to the date of destruction. 
The notice shall state the reason for the destruction, the intended date 
of destruction, and the approximate quantity involved. The regional 
director (compliance) may impose specific conditions, including 
requiring that the destruction be witnessed by an appropriate ATF 
officer. Unless the manufacturer is otherwise advised by the regional 
director (compliance) before the date specified in the notice, the 
destruction may proceed as planned.
    (b) By-product material (general). By-product material from which 
alcohol can be recovered shall not be sold or transferred unless the 
alcohol has been removed or an approved substance has been added to 
prevent recovery of residual alcohol. Material from which alcohol can be 
recovered may also be destroyed on the manufacturer's premises by a 
suitable method. Except as provided in paragraph (c) of this section, 
prior written approval shall be obtained from the appropriate ATF 
officer as to the adequacy, under this section, of any substance 
proposed to be added to prevent recovery of alcohol, or of any proposed 
method of destruction.
    (c) Spent vanilla beans. Specific approval from the appropriate ATF 
officer is not required when spent vanilla beans containing residual 
alcohol are destroyed on the manufacturer's premises by burning, or when 
they are removed from those premises after treatment with sufficient 
kerosene, mineral spirits, rubber hydrocarbon solvent, or gasoline to 
prevent recovery of residual alcohol.



Sec. 17.184  Distilled spirits container marks.

    All marks required by Part 19 of this chapter shall remain on 
containers of taxpaid distilled spirits until the contents are emptied. 
Whenever such a container is emptied, such marks shall be completely 
obliterated.

(Sec. 454, Pub. L. 98-369, 98 Stat. 820 (26 U.S.C. 5206(d)))



Sec. 17.185  Requirements for intermediate products and unfinished nonbeverage products.

    (a) General. Self-manufactured ingredients made with taxpaid spirits 
may be accounted for either as intermediate products or as unfinished 
nonbeverage products. The manufacturer may choose either method of 
accounting for such self-manufactured ingredients (see Sec. 17.127). 
However, the method selected determines the requirements that will apply 
to those ingredients, as prescribed in paragraphs (b) and (c) of this 
section.

[[Page 276]]

    (b) Intermediate products. Intermediate products shall be used 
exclusively in the manufacture of nonbeverage products. Intermediate 
products may be accumulated and stored indefinitely and may be used in 
any nonbeverage product whose formula calls for such use. Intermediate 
products shall be manufactured by the same entity that manufactures the 
finished nonbeverage products. Intermediate products shall not be sold 
or transferred between separate and distinct entities. However, they may 
be transferred to another branch or plant of the same manufacturer, for 
use there in the manufacture of approved nonbeverage products. (See 
Sec. 17.169 for recordkeeping requirement.) For the purposes of this 
section, the phrase ``separate and distinct entities'' includes parent 
and subsidiary corporations, regardless of any corporate (or other) 
relationship, and even if the stock of both the manufacturing firm and 
the receiving firm is owned by the same persons.
    (c) Unfinished nonbeverage products. An unfinished nonbeverage 
product shall only be used in the particular nonbeverage product for 
which it was manufactured, and shall be entirely so used within the time 
limit stated in the approved ATF Form 5154.1. Spirits dissipated or 
recovered in the manufacture of unfinished nonbeverage products shall be 
regarded as having been dissipated or recovered in the manufacture of 
nonbeverage products. Spirits contained in such unfinished products 
shall be accounted for in the supporting data under Sec. 17.147 and 
inventoried under Sec. 17.167 as ``in process'' in nonbeverage products. 
Production of unfinished nonbeverage products shall be recorded as an 
integral part of the production records for the related nonbeverage 
products. Unfinished nonbeverage products shall not be transferred to 
other premises.



Sec. 17.186  Transfer of distilled spirits to other containers.

    A manufacturer may transfer taxpaid distilled spirits from the 
original package to other containers at any time for the purpose of 
facilitating the manufacture of products unfit for beverage use. 
Containers into which distilled spirits have been transferred under this 
section shall bear a label identifying their contents as taxpaid 
distilled spirits, and shall be marked with the serial number of the 
original package from which the spirits were withdrawn.



Sec. 17.187  Discontinuance of business.

    The manufacturer shall notify ATF when business is to be 
discontinued. Upon discontinuance of business, a manufacturer's entire 
stock of taxpaid distilled spirits on hand may be sold in a single sale 
without the necessity of qualifying as a wholesaler under part 1 of this 
chapter or paying special tax as a liquor dealer under part 194 of this 
chapter. The spirits likewise may be returned to the person from whom 
purchased, or they may be destroyed or given away.



PART 18--PRODUCTION OF VOLATILE FRUIT-FLAVOR CONCENTRATE--Table of Contents




                            Subpart A--Scope

Sec.
18.1  Scope.
18.2  Applicability of law.
18.3  Unlawful operations.

                         Subpart B--Definitions

18.11  Meaning of terms.

         Subpart C--Administrative and Miscellaneous Provisions

18.12  Delegations of the Director.
18.13  Alternate methods or procedures.
18.14  Emergency variations from requirements.
18.15  Right of entry and examination.
18.16  Forms prescribed.

                          Document Requirements

18.17  Retention of documents.
18.18  Execution under penalties of perjury.
18.19  Security.

                        Subpart D--Qualification

18.21  General.
18.22  Restrictions as to location and use.
18.23  Registry of stills.

                               Application

18.24  Data for application.
18.25  Organizational documents.
18.26  Powers of attorney.
18.27  Additional requirements.

[[Page 277]]

                  Changes After Original Establishment

18.31  General requirements.
18.32  Change in name.
18.33  Change in location.
18.34  Continuing partnerships.
18.35  Change in proprietorship.
18.36  Change in officers and directors.
18.37  Change in stockholders.
18.38  Permanent discontinuance.
18.39  Qualification to alternate a volatile fruit-flavor concentrate 
          plant and a distilled spirits plant.
18.40  Qualification to alternate volatile fruit-flavor concentrate 
          plant and bonded wine cellar.
18.41  Separation of premises.
18.42  Record of alternation.
18.43  Conditions of alternation.

                          Subpart E--Operations

18.51  Processing material.
18.52  Production of high-proof concentrate.
18.53  Use of concentrate.
18.54  Transfer of concentrate.
18.55  Label.
18.56  Receipt of concentrate.

                     Subpart F--Records and Reports

18.61  Records and reports.
18.62  Record of transfer.
18.63  Record of transfer to a bonded wine cellar.
18.64  Photographic copies of records.
18.65  Annual report.

    Authority: 26 U.S.C. 5001, 5171-5173, 5178, 5179, 5203, 5351, 5354, 
5356, 5511, 5552, 6065, 7805.

    Source: T.D. ATF-104, 47 FR 23921, June 2, 1982, unless otherwise 
noted.

    Editorial Note: Nomenclature changes to part 18 appear by T.D. ATF-
436, 66 FR 5471, 5472, Jan. 19, 2001.



                            Subpart A--Scope



Sec. 18.1  Scope.

    The regulations in this part relate to the qualification and 
operation (including activities incident thereto) of plants for the 
manufacture of volatile fruit-flavor concentrate (essence). The 
regulations in this part apply to the several States of the United 
States and the District of Columbia.



Sec. 18.2  Applicability of law.

    Except as specified in 26 U.S.C. 5511, the provisions of 26 U.S.C. 
Chapter 51 are not applicable to the manufacture, by any process which 
includes evaporations from the mash or juice of any fruit, of any 
volatile fruit-flavor concentrate if:
    (a) The concentrate, and the mash or juice from which it is 
produced, contains no more alcohol than is reasonably unavoidable in the 
manufacture of the concentrate; and
    (b) The concentrate is rendered unfit for use as a beverage before 
removal from the place of manufacture, or (in the case of concentrate 
which does not exceed 24 percent alcohol by volume) the concentrate is 
transferred to a bonded wine cellar for use in the production of natural 
wine; and
    (c) The manufacturer of concentrate complies with all requirements 
for the protection of the revenue with respect to the production, 
removal, sale, transportation, and use of concentrate, and of the mash 
or juice from which it is produced, as may be prescribed by this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1392, as amended (26 U.S.C. 5511))



Sec. 18.3  Unlawful operations.

    (a) A manufacturer of concentrate who violates any of the conditions 
stated in Sec. 18.2 is subject to the taxes and penalties otherwise 
applicable under 26 U.S.C. Chapter 51 in respect to such operations.
    (b) Any person who sells, transports, or uses any concentrate or the 
mash or juice from which it is produced in violation of law or 
regulations is subject to all the provisions of 26 U.S.C. Chapter 51 
pertaining to distilled spirits and wines, including those requiring the 
payment of the tax thereon.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended (26 U.S.C. 5001))



                         Subpart B--Definitions



Sec. 18.11  Meaning of terms.

    When used in this part and in forms prescribed under this part, 
where not otherwise distinctly expressed or manifestly incompatible with 
the intent thereof, terms shall have the meaning ascribed in this 
section. Words in the plural form shall include the singular, and vice 
versa, and words importing the masculine gender shall include the 
feminine. The terms ``includes'' and ``including'' do not exclude things 
not

[[Page 278]]

enumerated which are in the same general class.
    Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this part by ATF Order 
1130.13, Delegation Order--Delegation of the Director's Authorities in 
27 CFR Parts 17 and 18.
    Bonded wine cellar. Premises established under 27 CFR part 24 for 
the production, blending, cellar treatment, storage, bottling, or 
packaging of untaxpaid wine, and includes premises designated as 
``bonded winery.''
    Concentrate. Any volatile fruit-flavor concentrate (essence) 
produced by any process which includes evaporations from any fruit mash 
or juice.
    Concentrate plant. An establishment qualified under this part for 
the production of concentrate.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC.
    Distilled spirits plant. An establishment qualified under 27 CFR 
part 19, excluding alcohol fuel plants, for producing, warehousing, or 
processing distilled spirits (including denatured distilled spirits).
    Executed under penalties of perjury. Signed with the prescribed 
declaration under the penalties of perjury as provided on or with 
respect to the application, report, form, or other document or, where no 
form of declaration is prescribed, with the declaration: ``I declare 
under the penalties of perjury that this ---- (insert type of document, 
such as application or report), including the documents submitted in 
support thereof, has been examined by me and, to the best of my 
knowledge and belief, is true, correct and complete.''
    Fold. The ratio of the volume of the fruit mash or juice to the 
volume of the concentrate produced from the fruit mash or juice. For 
example, one gallon of concentrate of 100-fold would be the product from 
100 gallons of fruit mash or juice.
    Fruit. All products commonly known and classified as fruit, berries, 
or grapes.
    Fruit mash. Any unfermented mixture of juice, pulp, skins, and seeds 
prepared from fruit, berries, or grapes.
    High-proof concentrate. For the purposes of this part, ``high-proof 
concentrate'' means a concentrate (essence), as defined in this section, 
that has an alcohol content of more than 24 percent by volume and is 
unfit for beverage use (nonpotable) because of its natural constituents, 
i.e. without the addition of other substances.
    Juice. The unfermented juice (concentrated or unconcentrated) of 
fruit, berries, or grapes, exclusive of pulp, skins, or seeds.
    Person. An individual, trust, estate, partnership, association, 
company, or corporation.
    Processing material. The fruit mash or juice from which concentrate 
is produced.
    Proprietor. A person qualified under this part to operate a 
concentrate plant.
    Registry number. The number assigned to a concentrate plant or a 
bonded wine cellar for an approved application as required by Parts 18 
and 24, respectively.
    U.S.C. The United States Code.

[T.D. ATF-104, 47 FR 23921, June 2, 1982, as amended by T.D. ATF-299, 55 
FR 24989, June 19, 1990; T.D. ATF-436, 66 FR 5471, Jan. 19, 2001; T.D. 
ATF-455, 66 FR 29482, May 31, 2001]



         Subpart C--Administrative and Miscellaneous Provisions



Sec. 18.12  Delegations of the Director.

    The regulatory authorities of the Director contained in this part 18 
are delegated to appropriate ATF officers. These ATF officers are 
specified in ATF Order 1130.13, Delegation Order--Delegation of the 
Director's Authorities in 27 CFR Parts 17 and 18. ATF delegation orders, 
such as ATF Order 1130.13, are available to any interested person by 
mailing a request to the ATF Distribution Center, PO Box 5950, 
Springfield, VA 22150-5190, or by accessing the ATF web site (http://
www.atf.treas.gov/).

[T.D. ATF-436, 66 FR 5471, Jan. 19, 2001]

[[Page 279]]



Sec. 18.13  Alternate methods or procedures.

    (a) General. The proprietor, on specific approval by the appropriate 
ATF officer, may use an alternate method or procedure in lieu of a 
method or procedure specifically prescribed in this part. The 
appropriate ATF officer may approve an alternate method or procedure, 
subject to stated conditions, when he finds that:
    (1) Good cause has been shown for the use of the alternate method or 
procedure;
    (2) The alternate method or procedure is within the purpose of, and 
consistent with the effect intended by the specifically prescribed 
method or procedure, and affords equivalent security to the revenue; and
    (3) The alternate method or procedure will not be contrary to any 
provision of law, and will not result in an increase in cost to the 
Government or hinder the effective administration of this part.
    (b) Application. A proprietor who desires to employ an alternate 
method or procedure shall submit a written application to the 
appropriate ATF officer. The application will specifically describe the 
proposed alternate method or procedure and set forth the reasons 
therefor. Alternate methods or procedures may not be employed until the 
application has been approved by the appropriate ATF officer. 
Authorization for any alternate method or procedure may be withdrawn 
whenever in the judgment of the appropriate ATF officer the revenue is 
jeopardized or the effective administration of this part is hindered by 
the continuation of the authorization.

(Approved by the Office of Management and Budget under control number 
1512-0046)

[T.D. ATF-104, 47 FR 23921, June 2, 1982, as amended by T.D. ATF-381, 61 
FR 37003, July 16, 1996; T.D. ATF-436, 66 FR 5471, Jan. 19, 2001]



Sec. 18.14  Emergency variations from requirements.

    (a) General. The appropriate ATF officer may approve emergency 
variations from requirements specified in this part, where the 
appropriate ATF officer finds that an emergency exists, the proposed 
variations are necessary, and the proposed variations:
    (1) Will afford the security and protection to the revenue intended 
by the prescribed specifications;
    (2) Will not hinder the effective administration of this part; and
    (3) Will not be contrary to any provision of law.

Variations from requirements granted under this section are conditioned 
on compliance with the procedures, conditions, and limitations stated in 
the approval of the application. Failure to comply in good faith with 
such procedures, conditions and limitations will automatically terminate 
the authority for such variations and the proprietor thereupon shall 
fully comply with the prescribed requirements of regulations from which 
the variations were authorized. Authority for any variation may be 
withdrawn whenever in the judgment of the regional director (compliance) 
the revenue is jeopardized or the effective administration of this part 
is hindered by the continuation of such variation.
    (b) Application. A proprietor who desires to employ emergency 
variations shall submit a written application to the appropriate ATF 
officer. The application will describe the proposed variations and set 
forth the reasons therefor. Variations will not be employed until the 
application has been approved, except when an emergency requires 
immediate action to correct a situation that is threatening to life or 
property. Such corrective action may then be taken concurrent with the 
filing of the application and notification of the appropriate ATF 
officer via telephone.

(Approved by the Office of Management and Budget under control number 
1512-0046)

[T.D. ATF-104, 47 FR 23921, June 2, 1982, as amended by T.D. ATF-381, 61 
FR 37003, July 16, 1996]



Sec. 18.15  Right of entry and examination.

    Appropriate ATF officers may at all times, as well by night as by 
day, enter any concentrate plant to make examination of the materials, 
equipment, and facilities thereon; and make such gauges and inventories 
as they deem necessary. Whenever appropriate ATF

[[Page 280]]

officers, having demanded admittance and declared their name and office, 
are not admitted into such premises by the proprietor or other person 
having charge thereof, they may at all times use such force as is 
necessary for them to gain entry to such premises.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1357, as amended, 1392, as amended 
(26 U.S.C. 5203, 5511))



Sec. 18.16  Forms prescribed.

    (a) The appropriate ATF officer is authorized to prescribe all forms 
required by this part. All of the information called for in each form 
will be furnished as indicated by the headings on the form and the 
instructions on or pertaining to the form. In addition, information 
called for in each form will be furnished as required by this part. The 
form will be filed in accordance with the instructions for the form.
    (b) Forms may be requested from the ATF Distribution Center, P.O. 
Box 5950, Springfield, Virginia 22150-5190, or at the ATF web site 
(http://www.atf.treas.gov/).

[T.D. ATF-104, 47 FR 23921, June 2, 1982, as amended by T.D. ATF-249, 52 
FR 5960, Feb. 27, 1987; T.D. 372, 61 FR 20723, May 8, 1996; T.D. ATF-
436, 66 FR 5472, Jan. 19, 2001]

                          Document Requirements



Sec. 18.17  Retention of documents.

    The proprietor shall maintain a file of all approved applications 
and other documents, on or convenient to the concentrate plant premises, 
available for inspection by appropriate ATF officers.

(Approved by the Office of Management and Budget under control number 
1512-0046)

[T.D. ATF-104, 47 FR 23921, June 2, 1982, as amended by T.D. ATF-381, 61 
FR 37003, July 16, 1996]



Sec. 18.18  Execution under penalties of perjury.

    When a form or other document called for under this part is required 
to be executed under penalties of perjury, it will be so executed, as 
defined in Sec. 18.11, and signed by an authorized person.

(Act of August 16, 1954, Pub. L. 591, Chapter 736, 68A Stat. 749 (26 
U.S.C. 6065))



Sec. 18.19  Security.

    The concentrate plant and equipment will be so constructed, 
arranged, equipped, and protected as to afford adequate protection to 
the revenue and facilitate inspection by appropriate ATF officers.



                        Subpart D--Qualification



Sec. 18.21  General.

    A person who desires to engage in the business of manufacturing 
concentrate shall submit an application for registration on Form 27-G 
(5520.3) and receive approval as provided in this part. All written 
statements, affidavits, and other documents submitted in support of the 
application or incorporated by reference are deemed a part thereof.

(Approved by the Office of Management and Budget under control number 
1512-0046)

[T.D. ATF-104, 47 FR 23921, June 2, 1982, as amended by T.D. ATF-381, 61 
FR 37003, July 16, 1996]



Sec. 18.22  Restrictions as to location and use.

    (a) Restrictions. A concentrate plant may not be established in any 
dwelling house or on board any vessel or boat, or on any premises where 
any other business is conducted. The premises of a concentrate plant may 
be used only for the business stated in the approved application for 
registration.
    (b) Exceptions. The appropriate ATF officer may authorize (1) the 
establishment of a concentrate plant on premise where other business is 
conducted, or (2) the use of the premises of a concentrate plant for 
other business. A person or proprietor desiring such authorization shall 
submit a written application to the appropriate ATF officer. The 
application will describe the other business by type and the premises to 
be used. If the premises of a concentrate plant are to be used for other 
business, the relationship (if any) to the concentrate plant will be 
described in the application. A concentrate plant may not be established 
on premises where other business is conducted or used to conduct other 
business until the application is approved. The appropriate ATF officer 
may decline to approve the application or withdraw the

[[Page 281]]

authorization if the revenue is jeopardized or the effective 
administration of this part is hindered.

(Approved by the Office of Management and Budget under control number 
1512-0046)

[T.D. ATF-104, 47 FR 23921, June 2, 1982, as amended by T.D. ATF-381, 61 
FR 37003, July 16, 1996]



Sec. 18.23  Registry of stills.

    The provisions of subpart C of part 29 of this chapter are 
applicable to stills or distilling apparatus located on concentrate 
plant premises used for the production of concentrate. As provided under 
Sec. 29.55, the listing of a still in the application, and approval of 
the application, constitutes registration of the still.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1355, as amended, 1392, as amended 
(26 U.S.C. 5179, 5511))

[T.D. ATF-207, 50 FR 23681, June 5, 1985, as amended by T.D. ATF-462, 66 
FR 42736, Aug. 15, 2001]

                               Application



Sec. 18.24  Data for application.

    Applications on Form 27-G (5520.3) will include the following:
    (a) Serial number;
    (b) Name and principal business address of the applicant, and the 
location of the plant if different from the business address;
    (c) Purpose for which filed;
    (d) Information regarding proprietorship, supported by the 
organizational documents listed in Sec. 18.25; and
    (e) Description of each still and a statement of its maximum 
capacity.

Where any of the information required by this section is on file with 
the appropriate ATF officer, that information, if accurate and complete, 
may be incorporated by reference by the applicant and made a part of the 
application.

(Approved by the Office of Management and Budget under control number 
1512-0046)

[T.D. ATF-104, 47 FR 23921, June 2, 1982, as amended by T.D. ATF-381, 61 
FR 37003, July 16, 1996]



Sec. 18.25  Organizational documents.

    The supporting information required by paragraph (d) of Sec. 18.24 
includes, as applicable:
    (a) Extracts from the articles of incorporation or from the minutes 
of meetings of the board of directors, authorizing the incumbents of 
certain offices, or other persons, to sign for the corporation;
    (b) Names and addresses of the officers and directors (Do not list 
officers and directors who have no responsibility in connection with the 
operation of the concentrate plant.);
    (c) Names and addresses of the 10 persons having the largest 
ownership or other interest in the corporation or other entity, and the 
nature and amount of the stockholding or other interest of each, whether 
the interest appears in the name of the interested party or in the name 
of another for him; and
    (d) In the case of an individual owner or a partnership, the name 
and address of every person interested in the concentrate plant, whether 
the interest appears in the name of the interested party or in the name 
of another for him.



Sec. 18.26  Powers of attorney.

    The proprietor shall execute and file a Form 1534 (5000.8) for every 
person authorized to sign or to act on behalf of the proprietor. (Not 
required for persons whose authority is furnished in the application.)

(Approved by the Office of Management and Budget under control number 
1512-0079)

[T.D. ATF-104, 47 FR 23921, June 2, 1982, as amended by T.D. ATF-381, 61 
FR 37003, July 16, 1996]



Sec. 18.27  Additional requirements.

    (a) The appropriate ATF officer, to protect the revenue, may 
require:
    (1) Additional information in support of an application for 
registration;
    (2) Marks on major equipment to show serial number, capacity, and 
use;
    (3) Installation of meters, tanks, pipes, or other apparatus; and
    (4) Installation of security devices.

[[Page 282]]

    (b) Any proprietor refusing or neglecting to comply with any 
requirement of this section shall not be permitted to operate.

(Approved by the Office of Management and Budget under control number 
1512-0046)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1353, as amended, 
1395, as amended (26 U.S.C. 5172, 5178, 5552))

[T.D. ATF-104, 47 FR 23921, June 2, 1982, as amended by T.D. ATF-381, 61 
FR 37003, July 16, 1996]

                  Changes After Original Establishment



Sec. 18.31  General requirements.

    Where there is a change with respect to the information shown in the 
application, the proprietor shall submit, within 30 days of the change 
(except as otherwise provided in this part), an amended application on 
Form 27-G (5520.3).

(Approved by the Office of Management and Budget under control number 
1512-0046)


(Sec. 201, Pub. L. 85-859, 72 Stat. 1392, as amended (26 U.S.C. 5511))

[T.D. ATF-104, 47 FR 23921, June 2, 1982, as amended by T.D. ATF-381, 61 
FR 37003, July 16, 1996]



Sec. 18.32  Change in name.

    The proprietor shall submit an amended application to cover any 
change in the individual, firm, or corporate name.

(Approved by the Office of Management and Budget under control number 
1512-0046)

[T.D. ATF-104, 47 FR 23921, June 2, 1982, as amended by T.D. ATF-381, 61 
FR 37003, July 16, 1996]



Sec. 18.33  Change in location.

    The proprietor shall submit an amended application to cover a change 
in the location of a concentrate plant. Operation of the concentrate 
plant may not be commenced at the new location prior to approval of the 
amended application.

(Approved by the Office of Management and Budget under control number 
1512-0046)

[T.D. ATF-104, 47 FR 23921, June 2, 1982, as amended by T.D. ATF-381, 61 
FR 37003, July 16, 1996]



Sec. 18.34  Continuing partnerships.

    If, under the laws of the particular State, the partnership is not 
immediately terminated on death or insolvency of a partner, but 
continues until the winding up of the partnership affairs is completed, 
and the surviving partner has the exclusive right to the control and 
possession of the partnership assets for the purpose of liquidation and 
settlement, the surviving partner may continue to operate the plant 
under the prior qualification of the partnership. If the surviving 
partner acquires the business on completion of the settlement of the 
partnership, such partner shall qualify in his own name form the date of 
acquisition, as provided in Sec. 18.35. The rule set forth in this 
section also applies where there is more than one surviving partner.

(Approved by the Office of Management and Budget under control number 
1512-0046)

[T.D. ATF-104, 47 FR 23921, June 2, 1982, as amended by T.D. ATF-381, 61 
FR 37003, July 16, 1996]



Sec. 18.35  Change in proprietorship.

    (a) General. If there is a change in the proprietorship of a 
concentrate plant, the outgoing proprietor shall comply with the 
requirements of Sec. 18.38, and the successor shall, before commencing 
operations, file application and receive approval in the same manner as 
a person qualifying as the proprietor of a new concentrate plant. 
Processing material, concentrate and other materials may be transferred 
from an outgoing proprietor to a successor.
    (b) Fiduciary. A successor to the proprietorship of a concentrate 
plant who is an administrator, executor, receiver, trustee, assignee, or 
other fiduciary shall comply with the provisions of paragraph (a) of 
this section. If the fiduciary was appointed by a court, the effective 
dates of the qualifying documents filed by the fiduciary shall be the 
effective date of the court order, or the date specified therein for the 
fiduciary to assume control. If the fiduciary was not appointed by a 
court, the date the fiduciary assumes control shall coincide with the 
effective date of

[[Page 283]]

the qualifying documents filed by the fiduciary.

(Approved by the Office of Management and Budget under control number 
1512-0046)

[T.D. ATF-104, 47 FR 23921, June 2, 1982, as amended by T.D. ATF-381, 61 
FR 37003, July 16, 1996]



Sec. 18.36  Change in officers and directors.

    The proprietor shall submit an amended application to cover changes 
in the list of officers and directors furnished under the provisions of 
Sec. 18.25.

(Approved by the Office of Management and Budget under control number 
1512-0046)

[T.D. ATF-104, 47 FR 23921, June 2, 1982, as amended by T.D. ATF-381, 61 
FR 37003, July 16, 1996]



Sec. 18.37  Change in stockholders.

    The proprietor shall submit changes in the list of stockholders 
furnished under the provisions of Sec. 18.25 annually on May 1. When the 
sale or transfer of capital stock results in a change of control or 
management of the business, the proprietor shall comply with the 
provisions of Sec. 18.35.

(Approved by the Office of Management and Budget under control number 
1512-0046)

[T.D. ATF-104, 47 FR 23921, June 2, 1982, as amended by T.D. ATF-381, 61 
FR 37003, July 16, 1996]



Sec. 18.38  Permanent discontinuance.

    A proprietor who permanently discontinues the business of a 
concentrate manufacturer shall, after completion of operations, file an 
application on Form 27-G (5520.3) to cover such discontinuance, giving 
the date of the discontinuance.

(Approved by the Office of Management and Budget under control number 
1512-0046)

[T.D. ATF-104, 47 FR 23921, June 2, 1982, as amended by T.D. ATF-381, 61 
FR 37003, July 16, 1996]



Sec. 18.39  Qualification to alternate a volatile fruit-flavor concentrate plant and a distilled spirits plant.

    A proprietor of a volatile fruit-flavor concentrate plant operating 
a contiguous distilled spirits plant may alternate the use of such 
premises between the two functions through extension and curtailment by 
filing with the appropriate ATF officer the following information:
    (a) ATF Form 27-G (5520.3) and ATF Form 5110.41 to cover the 
proposed alternation of premises;
    (b) A special diagram, in duplicate, delineating the premises as 
they will exist, both during extension and curtailment and clearly 
depicting all buildings, floors, rooms, areas, equipment and pipe lines 
(identified individually by letter or number) which are to be subject to 
alternation, in their relative operating sequence; and
    (c) A bond or a consent of surety to cover the proposed alternation 
of premises.

(Approved by the Office of Management and Budget under control number 
1512-0046)

[T.D. ATF-455, 66 FR 29482, May 31, 2001]



Sec. 18.40  Qualification to alternate volatile fruit-flavor concentrate plant and bonded wine cellar.

    A proprietor of a volatile fruit-flavor concentrate plant operating 
a contiguous bonded wine cellar may alternate the use of each premise by 
extension and curtailment by filing with the appropriate ATF officer the 
following information:
    (a) ATF Form 27-G (5520.3) and ATF Form 5120.25 to cover the 
proposed alternation of premises;
    (b) A special diagram, in duplicate, delineating the premises as 
they will exist, both during extension and curtailment and clearly 
depicting all buildings, floors, rooms, areas, equipment and pipe lines 
(identified individually by letter or number) which are to be subject to 
alternation, in their relative operating sequence; and
    (c) A bond or a consent of surety to cover the proposed alternation 
of premises.

(Approved by the Office of Management and Budget under control number 
1512-0046)

[T.D. ATF-455, 66 FR 29482, May 31, 2001]



Sec. 18.41  Separation of premises.

    The appropriate ATF officer may specify additional means of 
separating the volatile fruit-flavor concentrate plant from a distilled 
spirits plant or bonded wine cellar premises.

[T.D. ATF-455, 66 FR 29482, May 31, 2001]

[[Page 284]]



Sec. 18.42  Record of alternation.

    After approval of the qualifying documents for the alternation of 
premises, the proprietor must execute a record each time that the 
premises are alternated. The record will contain the following 
information:
    (a) Identification assigned by ATF, including the plant or registry 
number, of the volatile fruit-flavor concentrate plant and the distilled 
spirits plant or bonded wine cellar;
    (b) Effective date and time of proposed change; and
    (c) Description of the alternation that identifies the diagrams 
depicting the premises before and after the alternation.

(Approved by the Office of Management and Budget under control number 
1512-0046)

[T.D. ATF-455, 66 FR 29482, May 31, 2001]



Sec. 18.43  Conditions of alternation.

    (a) Curtailment of volatile fruit-flavor concentrate plant. The 
proprietor must remove all concentrate, fruit mash, and juice from the 
volatile fruit-flavor concentrate plant alternated to a distilled 
spirits plant or to a bonded wine cellar premises, unless such 
concentrate, fruit mash, or juice is being simultaneously transferred to 
the distilled spirits plant or bonded wine cellar premises.
    (b) Extension of volatile fruit-flavor concentrate premises and 
curtailment of distilled spirits plant. The proprietor must remove all 
spirits, denatured spirits, articles and wine, except for concentrate, 
fruit mash, or juice that is being simultaneously transferred to the 
volatile fruit-flavor concentrate plant.
    (c) Extension of volatile fruit-flavor concentrate premises and 
curtailment of bonded wine cellar premises. The proprietor must remove 
all wine and spirits from the alternated bonded wine cellar premises, 
except for concentrate, fruit mash, or juice that is being 
simultaneously transferred to the volatile fruit-flavor concentrate 
plant.

[T.D. ATF-455, 66 FR 29482, May 31, 2001]



                          Subpart E--Operations



Sec. 18.51  Processing material.

    (a) General. A proprietor may produce processing material or receive 
processing material produced elsewhere. Fermented processing material 
may not be used in the manufacture of concentrate. Processing material 
may be used if it contains no more alcohol than is reasonably 
unavoidable, and must be used when produced, or as soon thereafter as 
practicable.
    (b) Record of processing material. A proprietor shall maintain a 
record, by kind and quantity, of processing material used.

(Approved by the Office of Management and Budget under control number 
1512-0098)

[T.D. ATF-104, 47 FR 23921, June 2, 1982, as amended by T.D. ATF-381, 61 
FR 37003, July 16, 1996]



Sec. 18.52  Production of high-proof concentrate.

    (a) General. High-proof concentrate may be produced in a concentrate 
plant. Concentrate having an alcohol content of more than 24 percent by 
volume that is fit for beverage use may not be produced in a concentrate 
plant.
    (b) Determination. A proprietor shall determine whether a particular 
concentrate is a high-proof concentrate. However, a proprietor may at 
any time submit a written request to the appropriate ATF officer for a 
determination of whether a concentrate is unfit for beverage use. Each 
request for a determination will include information as to kind, percent 
alcohol by volume, and fold of the concentrate. The request will be 
accompanied by a representative 8-ounce sample of the concentrate.

(Approved by the Office of Management and Budget under control number 
1512-0046)

[T.D. ATF-104, 47 FR 23921, June 2, 1982, as amended by T.D. ATF-381, 61 
FR 37003, July 16, 1996]



Sec. 18.53  Use of concentrate.

    Concentrate may be used in the manufacture of any product made in 
the conduct of another business authorized to be conducted on 
concentrate plant

[[Page 285]]

premises under the provisions of Sec. 18.22, if such product contains 
less than one-half of one percent of alcohol by volume.



Sec. 18.54  Transfer of concentrate.

    (a) Concentrate unfit for beverage use. Concentrate (including high-
proof concentrate and concentrate treated as provided in paragraph (c) 
of this section) unfit for beverage use may be transferred for any 
purpose authorized by law.
    (b) Concentrate fit for beverage use. Concentrate fit for beverage 
use may be transferred only to a bonded wine cellar. If such concentrate 
is rendered unfit for beverage use, it may be transferred as provided in 
paragraph (a) of this section.
    (c) Rendering concentrate unfit for beverage use. Concentrate may be 
rendered unfit for beverage use by reducing the alcohol content to not 
more than 15 percent alcohol by volume (if the reduction does not result 
in a concentrate of less than 100-fold), and adding to each gallon 
thereof, in a quantity sufficient to render the concentrate unfit for 
beverage use, the following:
    (1) Sucrose; or
    (2) Concentrated fruit juice, of at least 70 Brix, made from the 
same kind of fruit as the concentrate; or
    (3) Malic, citric, or tartaric acid.
    (d) Record of transfer. The proprietor shall record transfers of 
concentrate (including high-proof concentrate) on a record of transfer 
as required in Secs. 18.62 or 18.63.

(Approved by the Office of Management and Budget under control number 
1512-0098)

[T.D. ATF-104, 47 FR 23921, June 2, 1982, as amended by T.D. ATF-381, 61 
FR 37003, July 16, 1996]



Sec. 18.55  Label.

    Each container of concentrate will have affixed thereto, before 
transfer, a label identifying the product and showing (a) the name of 
the proprietor; (b) the registry number of the plant; (c) the address of 
the plant; (d) the number of wine gallons; and (e) the percent of 
alcohol by volume.

(Approved by the Office of Management and Budget under control number 
1512-0098)

[T.D. ATF-104, 47 FR 23921, June 2, 1982, as amended by T.D. ATF-381, 61 
FR 37003, July 16, 1996]



Sec. 18.56  Receipt of concentrate.

    (a) General. The proprietor of a concentrate plant may accept the 
return of concentrate that the proprietor shipped. In addition, 
concentrate that is unfit for beverage use may be received from another 
concentrate plant for further processing in accordance with this part.
    (b) Record of concentrate received. When concentrate is received, 
the proprietor must record the receipt, including the name of the 
consignor and a notation regarding any loss in transit or other 
discrepancy.

(Approved by the Office of Management and Budget under control number 
1512-0098)

[T.D. ATF-455, 66 FR 29482, May 31, 2001]



                     Subpart F--Records and Reports



Sec. 18.61  Records and reports.

    (a) General. Each proprietor shall keep records and reports as 
required by this part. These records and reports will be maintained on 
or convenient to the concentrate plant and will be available for 
inspection by appropriate ATF officers during business hours. Records 
and reports will be retained by the proprietor for three years from the 
date they were prepared, or three years from the date of the last entry, 
whichever is later.
    (b) Records. Each proprietor shall keep such records relating to or 
connected with the production, transfer, or return of concentrate and 
the juice or mash from which it is produced, as will (1) enable any 
appropriate ATF officer to verify operations and to ascertain whether 
there has been compliance with law and regulations, and (2) enable the 
proprietor to prepare Form 1695(5520.2). A proprietor need not prepare a 
specific record to meet the record requirements of this part. Any book, 
paper, invoice, bill of lading, or

[[Page 286]]

similar document that the proprietor prepares or receives for other 
purposes may be used, if all required information is shown.
    (c) Reports. Each proprietor shall prepare and submit reports 
(including applications) as required by this part.

(Approved by the Office of Management and Budget under control number 
1512-0098)

[T.D. ATF-104, 47 FR 23921, June 2, 1982, as amended by T.D. ATF-172, 49 
FR 14941, Apr. 16, 1984; T.D. ATF-381, 61 FR 37003, July 16, 1996]



Sec. 18.62  Record of transfer.

    When concentrate, juice, or fruit mash is transferred from the 
concentrate plant premises, the proprietor shall prepare, in duplicate, 
a record of transfer. The record of transfer may consist of a commercial 
invoice, bill of lading, or any other similar document. The proprietor 
shall forward the original of the record of transfer to the consignee 
and retain the copy as a record. Each record of transfer shall show the 
following information:
    (a) Name, registry number, and address of the concentrate plant;
    (b) Name and address of the consignee;
    (c) Kind (by fruit from which produced) and description of product, 
e.g. grape concentrate, concentrated grape juice, unconcentrated grape 
juice, grape mash;
    (d) Quantity (in wine gallons); and
    (e) For concentrate, percent of alcohol by volume.

(Approved by the Office of Management and Budget under control number 
1512-0098)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1392, as amended (26 U.S.C. 5511))

[T.D. ATF-104, 47 FR 23921, June 2, 1982, as amended by T.D. ATF-172, 49 
FR 14941, Apr. 16, 1984; T.D. ATF-381, 61 FR 37003, July 16, 1996]



Sec. 18.63  Record of transfer to a bonded wine cellar.

    A proprietor transferring concentrate, juice, or fruit mash to a 
bonded wine cellar shall prepare a record of transfer as required by 
Sec. 18.62 and enter the following additional information:
    (a) Registry number of the bonded wine cellar;
    (b) For each product manufactured from grapes or berries, variety of 
grape or berry;
    (c) For concentrate, fold;
    (d) For juice and fruit mash, whether volatile fruit flavor has been 
removed and, if so, whether the identical volatile fruit flavor has been 
restored; and
    (e) For concentrated juice, total solids content before and after 
concentration.

(Approved by the Office of Management and Budget under control number 
1512-0098)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1392, as amended (26 U.S.C. 5511))

[T.D. ATF-104, 47 FR 23921, June 2, 1982, as amended by T.D. ATF-172, 49 
FR 14941, Apr. 16, 1984; T.D. ATF-381, 61 FR 37003, July 16, 1996]



Sec. 18.64  Photographic copies of records.

    Proprietors may record, copy, or reproduce records required by this 
part by any process which accurately reproduces or forms a durable 
medium for reproducing the original of records. Whenever records are 
reproduced under this section, the reproduced records will be preserved 
in conveniently accessible files, and provisions will be made for 
examining, viewing, and using the reproduced record the same as if it 
were the original record. The reproduced record will be treated and 
considered for all purposes as though it were the original record. All 
provisions of law and regulation applicable to the original record are 
applicable to the reproduced record.



Sec. 18.65  Annual report.

    An annual report, on Form 1695(5520.2), of concentrate plant 
operations shall be prepared by each proprietor and forwarded in 
accordance with the instructions for the form. When a proprietor 
permanently discontinues the business of manufacturing concentrate, the 
proprietor shall submit the annual report in accordance with the 
instructions for the form.

[T.D. ATF-436, 66 FR 5472, Jan. 19, 2001]

[[Page 287]]



PART 19--DISTILLED SPIRITS PLANTS--Table of Contents




                            Subpart A--Scope

Sec.
19.1  General.
19.2  Territorial extent.
19.3  Related regulations.

                         Subpart B--Definitions

19.11  Meaning of terms.

                            Subpart C--Taxes

                             Gallonage Taxes

19.21  Tax.
19.22  Attachment of tax.
19.23  Lien.
19.24  Persons liable for tax.
19.25  Time for tax determination.
19.26  Tax on wine.

                               Assessments

19.31  Production not accounted for.
19.32  Assessment of tax on spirits, denatured spirits, or wines in bond 
          which are lost, destroyed or removed without authorization.

                           Effective Tax Rates

19.34  Computation of effective tax rate.
19.35  Application of effective tax rate (Actual).
19.36  Standard effective tax rate.
19.37  Average effective tax rate.
19.38  Inventory reserve account.

                                 Claims

19.41  Claims on spirits, denatured spirits, articles, or wines lost or 
          destroyed in bond.
19.42  Claims on spirits returned to bonded premises.
19.43  Claims relating to spirits lost after tax determination.
19.44  Execution of claims and supporting documents.
19.45  Claims for credit of tax.
19.46  Adjustments for credited tax.

                Subpart Ca--Special (Occupational) Taxes

19.49  Liability for special tax.
19.50  Rates of special tax.
19.51  Special tax returns.
19.52  Employer identification number.

                           Special Tax Stamps

19.53  Issuance, distribution, and examination of special tax stamps.
19.54  Changes in special tax stamps.

         Subpart D--Administrative and Miscellaneous Provisions

                   Activities Not Subject to This Part

19.57  Recovery and reuse of denatured spirits in manufacturing 
          processes.
19.58  Use of taxpaid distilled spirits to manufacture products unfit 
          for beverage use.

                       Authorities of the Director

19.61  Forms prescribed.
19.62  Alternate methods or procedures.
19.63  Pilot operations.
19.64  [Reserved]
19.65  Experimental distilled spirits plants.
19.66  Application to establish experimental plants.
19.67  Spirits produced in industrial processes.
19.68  Other businesses.
19.70  Exemptions to meet the requirements of National defense.
19.71  Experimental or research operations by scientific institutions 
          and colleges of learning.

            Authorities of the regional director (Compliance)

19.72  Other businesses.
19.73  Emergency variations from requirements.
19.74  Disaster exemptions.
19.75  Assignment of officers and supervision of operations.
19.76  Allowance of remission, abatement, credit or refund of tax.
19.77  Installation of meters, tanks and other apparatus.
19.78  Approval of qualifying documents.
19.79  Discontinuance of storage facilities.

                       Authorities of ATF Officers

19.81  Right of entry and examination.
19.82  Detention of containers.
19.83  Samples for the United States.
19.84  Gauging and measuring equipment.

                    Entry and Examination of Premises

19.86  Furnishing facilities and assistance.

       Gauging of Spirits, Wines or Alcoholic Flavoring Materials

19.91  Gauging.
19.92  When gauges are required.
19.93  Quantity determination of spirits in bond.

          Securing of Conveyances Used for Transporting Spirits

19.96  Securing of conveyances.

            Conveyance of Spirits or Wines on Plant Premises

19.97  Taxpaid spirits or wines on bonded premises.

[[Page 288]]

19.98  Conveyance of untaxpaid spirits or wines within a distilled 
          spirits plant.
19.99  Spirits in customs custody.

                          Penalties of Perjury

19.100  Execution under penalties of perjury.

Subpart E [Reserved]

                       Subpart F--Location and Use

19.131  Restrictions as to location.
19.132  Continuity of premises.
19.133  Use of distilled spirits plant premises.
19.134  Bonded warehouses not on premises qualified for production of 
          spirits.

          Subpart G--Qualification of Distilled Spirits Plants

19.151  General requirements for registration.
19.152  Data for application for registration.
19.153  Statement of physical security.
19.154  Notice of registration.
19.155  Maintenance of registration file.
19.156  Powers of attorney.
19.157  Operating permits.
19.158  Data for application for operating permits.
19.159  Issuance of operating permits.
19.160  Duration of permits.
19.161  Denial of permit.
19.162  Correction of permits.
19.163  Suspension or revocation.
19.164  Rules of practice in permit proceedings.
19.165  Trade names.
19.166  Major equipment.
19.167  Organizational documents.
19.168  Description of plant.
19.169  Registry of stills.
19.170  Statement of production procedure.

                  Changes After Original Qualification

19.180  Application for amended registration.
19.181  Automatic termination of permits.
19.182  Change in name of proprietor.
19.183  Change of trade name.
19.184  Changes in stockholders.
19.185  Changes in officers and directors.
19.186  Change in proprietorship.
19.187  Adoption of formulas.
19.188  Partnerships.
19.189  Change in location.
19.190  Changes in premises.
19.191  Change in operations.
19.192  Change in production procedure.
19.193  Changes in construction or use of buildings and equipment.

                  Operations by Alternating Proprietors

19.201  Procedure for alternating proprietors.

                          Alternate Operations

19.202  Alternate use of premises and equipment for customs purposes.
19.203  Alternation of distilled spirits plant and bonded wine cellar 
          premises.
19.204  Alternation of distilled spirits plant and taxpaid wine bottling 
          house premises.
19.205  Alternate curtailment and extension of bonded premises for use 
          as general premises.
19.206  Curtailment and extension of plant premises for the manufacture 
          of eligible flavors.
19.207  Alternate use of distilled spirits plant and volatile fruit-
          flavor concentrate premises.

                  Permanent Discontinuance of Business

19.211  Notice of permanent discontinuance.

                 Subpart H--Bonds and Consents of Surety

19.231  Filing of operations or unit bonds.
19.232  Additional condition of operations bond.
19.233  Corporate surety.
19.234  Deposit of securities in lieu of corporate surety.
19.235  Consents of surety.
19.236  Filing and execution of powers of attorney.
19.237  Disapproval of bonds or consents of surety.
19.238-19.240  [Reserved]
19.241  Operations bond--distilled spirits plant and adjacent bonded 
          wine cellar.
19.242  Area operations bond.
19.243  Withdrawal bond.
19.244  Unit bond.
19.245  Bonds and penal sums of bonds.
19.246  Strengthening bonds.

                        New or Superseding Bonds

19.247  General.
19.248  New or superseding bond.

                          Termination of Bonds

19.249  Termination of bonds.
19.250  Application of surety for relief from bond.
19.251  Relief of surety from bond.
19.252  Release of pledged securities.

             Subpart I--Construction, Equipment and Security

19.271  Construction of buildings.
19.272  Equipment.
19.273  Tanks.
19.274  Pipelines.
19.275  Continuous distilling system.
19.276  Package scales.
19.277  Measuring devices and proofing instruments.
19.278  Identification of structures, areas, apparatus, and equipment.
19.279  Office facilities.
19.280  Signs.

[[Page 289]]

19.281  Security.
19.282  Breaking Government locks.

                          Subpart J--Production

19.311  Notice by proprietor.
19.312  Receipt of materials.
19.313  Use of materials in production of spirits.
19.314  Removal of fermenting material.
19.315  Removal or destruction of distilling material.
19.316  Distillation.
19.317  Treatment during production.
19.318  Addition of caramel to rum or brandy and addition of oak chips 
          to spirits.
19.319  Production gauge.
19.320  Identification of spirits.
19.321  Entry.
19.322  Distillates containing extraneous substances.

                                 Formula

19.324  Statement of production procedure or Form 5110.38.

                          Chemical By-Products

19.326  Spirits content of chemicals produced.
19.327  Disposition of chemicals.
19.328  Wash water.

                               Inventories

19.329  Production inventories.

                        Subpart K--Redistillation

19.331  General.
19.332  Receipts for redistillation
19.333  Redistillation.

                           Subpart L--Storage

19.341  General.
19.342  Receipt and storage of bulk spirits and wines.
19.343  Addition of oak chips to spirits and addition of caramel to 
          brandy and rum.

                      Filling and Changing Packages

19.344  Filling of packages from tanks.
19.345  Change of packages.

                     Mingling or Blending of Spirits

19.346  Mingling or blending of spirits for further storage.
19.347  Packages dumped for mingling.
19.348  Determining age of mingled spirits.
19.349  Mingled spirits or wines held in tanks.

                               Inventories

19.353  Storage inventories.

Subpart M--Processing Operations Other Than Denaturation and Manufacture 
                               of Articles

19.371  General.

  Receipt and Use of Spirits, Wines, and Alcoholic Flavoring Materials

19.372  Receipt of spirits, wines and alcoholic flavoring materials for 
          processing.
19.373  Use of spirits, wines and alcoholic flavoring materials.
19.374  Manufacture of nonbeverage products, intermediate products or 
          eligible flavors.

                               Obscuration

19.376  Determining obscuration.

                                Formulas

19.378  Formula requirement.

              Bottling, Packaging, and Removal of Products

19.381  Removals from processing.
19.382  Bottling tanks.
19.383  Bottling tank gauge.
19.384  Preparation of bottling or packaging record.
19.385  Labels to agree with contents of tanks and containers.
19.386  Alcohol content and fill.
19.387  Completion of bottling.
19.388  Cases.
19.389  Remnants.
19.390  Filling packages.
19.391  Removal by bulk conveyances or pipelines.
19.392  Rebottling.
19.393  Reclosing and relabeling.
19.394  Bottled-in-bond spirits.
19.395  Labels for export spirits.
19.396  Spirits removed for shipment to Puerto Rico.
19.397  Spirits not originally intended for export.
19.398  Alcohol.

                                 Records

19.400  Daily summary record of spirits bottled or packaged.

                               Inventories

19.401  Inventories of wines and bulk spirits (except in packages) in 
          processing account.
19.402  Inventories of bottled and packaged spirits.

      Subpart N--Denaturing Operations and Manufacture of Articles

19.451  General.

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                              Denaturation

19.452  Formulas.
19.453  Testing of denaturants.
19.454  Gauge of denaturation.
19.455  Dissolving of denaturants.
19.456  Adding denaturants.
19.457  Neutralizing denatured spirits.
19.458  Restoration and redenaturation of recovered denatured spirits 
          and recovered articles.
19.459  Mixing of denatured spirits.
19.460  Conversion of denatured alcohol formulas.
19.461  Receipt and storage of denatured spirits.
19.462  Filling of containers from tanks.
19.463  Containers for denatured spirits.

                               Inventories

19.464  Denatured spirits inventories.

                                Articles

19.471  Manufacture of articles.

                 Subpart O--Spirits From Customs Custody

19.481  General.
19.482  Age and fill date.
19.483  Recording gauge.

                            Imported Spirits

19.484  Marks on containers of imported spirits.

                 Puerto Rican and Virgin Islands Spirits

19.485  Marks on containers of Puerto Rican and Virgin Islands spirits.
19.486  Additional tax on nonbeverage spirits.
19.487  Abatement, remission, credit or refund.

                  Subpart P--Transfers and Withdrawals

                                 General

19.501  Authority to withdraw.
19.502  Withdrawal of spirits on production or filling gauge.
19.503  Determination of tare.

                    Transfer Between Bonded Premises

19.505  Authorized transfers.
19.506  Application to receive spirits in bond.
19.507  Termination of application.
19.508  Consignor premises.
19.509  Reconsignment.
19.510  Consignee premises.

             Withdrawals on Determination and Payment of Tax

19.515  Determination and payment of tax.
19.516  Bond account.
19.517  Gauge for tax determination.
19.518  Imported spirits.
19.519  Methods of tax payment.
19.520  Employer identification number.
19.521  Application for employer identification number.
19.522  Taxes to be collected by returns.
19.523  Time for filing returns.
19.524  Payment of tax by electronic fund transfer.
19.525  Manner of filing returns.
19.526  Removal of spirits on tax determination.

              Withdrawal of Spirits Without Payment of Tax

19.531  Authorized withdrawals without payment of tax.
19.532  Withdrawals of spirits for use in wine production.
19.533  Withdrawal of spirits without payment of tax for experimental or 
          research use.
19.534  Withdrawals of spirits for use in production of nonbeverage wine 
          and nonbeverage wine products.

                    Withdrawal of Spirits Free of Tax

19.536  Authorized withdrawals free of tax.
19.537  Withdrawal of spirits free of tax.
19.538  Withdrawal of spirits by the United States.
19.539  Disposition of excess spirits.
19.540  Removal of denatured spirits and articles.
19.541  Reconsignment.

                     Subpart Q--Losses and Shortages

                                 Losses

19.561  Losses in general.
19.562  Determination of losses in bond.
19.563  Loss of spirits from packages.
19.564  Losses after tax determination.

                                Shortages

19.565  Shortages of bottled distilled spirits.

                     Subpart R--Containers and Marks

                               Containers

19.581  Authorized containers.
19.582  Spirits for nonindustrial use.
19.583  Spirits for industrial use.
19.584  Packages.
19.585  Bulk conveyances.
19.586  Tanks.
19.587  Pipelines.
19.588  Construction of bulk conveyances.
19.589  Restrictions on dispositions of bulk spirits.

                                  Marks

19.592  General.
19.593  Package identification numbers in production and storage.
19.594  Numbering of packages and cases in processing.

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19.595  Specifications for marks.
19.596  Marks on packages of spirits filled on bonded premises.
19.597  Kind of spirits.
19.598  [Reserved]
19.599  Change of packages in storage.
19.600  [Reserved]
19.601  Marks on containers of specially denatured spirits.
19.602  Marks on containers of completely denatured alcohol.
19.603  [Reserved]
19.604  Caution label.
19.605  Additional marks on portable containers.
19.606  Marks on bulk conveyances.
19.607  Marks on cases.
19.608  Cases of industrial alcohol.
19.609  [Reserved]
19.610  Obliteration of marks.
19.611  Relabeling and reclosing off bonded premises.
19.612  Authorized abbreviations to identify marks.

             Subpart S--Liquor Bottle and Label Requirements

19.631  Scope of subpart.

                       Liquor Bottle Requirements

19.632  Bottles authorized.
19.633  Distinctive liquor bottles.
19.634  Receipt and storage of liquor bottles.
19.635  Bottles to be used for display purposes.
19.636  Bottles for testing purposes.
19.637  Bottles not constituting approved containers.
19.638  Disposition of stocks of liquor bottles.
19.639  Use and resale of liquor bottles.

                        Bottle Label Requirements

19.641  Certificate of label approval or exemption.
19.642  Statements required on labels under an exemption from label 
          approval.
19.643  Brand name, kind, alcohol content, and State of distillation.
19.644  Net contents.
19.645  Name and address of bottler.
19.646  Age of whisky containing no neutral spirits.
19.647  Age of whisky containing neutral spirits.
19.648  Age of brandy.
19.649  Presence of neutral spirits and coloring, flavoring, and 
          blending materials.
19.650  Country of origin.

                          Subpart T--Closures.

19.661  General.
19.662  Affixing closures.
19.663  Reclosing.

     Subpart U--Return of Spirits to Bonded Premises and Voluntary 
                               Destruction

                                 Returns

19.681  Return of taxpaid spirits to bonded premises.
19.682  Receipt and gauge of returned taxpaid spirits.
19.683  Return of recovered denatured spirits and recovered articles.
19.684  Articles and spirits residues received for redistillation.
19.685  Return of recovered tax-free spirits, and spirits and denatured 
          spirits withdrawn free of tax.
19.686  Return of spirits withdrawn without payment of tax.
19.687  Return of spirits withdrawn for export with benefit of drawback.
19.688  Abandoned spirits.

                          Voluntary Destruction

19.691  Voluntary destruction.

                      Subpart V--Samples of Spirits

19.701  Spirits withdrawn from bonded premises.
19.702  Samples used on bonded premises.
19.703  Taxpayment of samples.
19.704  Labels.

                     Subpart W--Records and Reports

                                 General

19.721  Records.
19.722  Conversion between metric and U.S. units.
19.723  Maintenance and preservation of records.
19.724  Modified forms.
19.725  Photographic copies of records.
19.726  Authorized abbreviations to identify spirits.

                                 Records

19.731  General.
19.732  Details of daily records.

                           Production Account

19.736  Daily production records.

                             Storage Account

19.740  Daily storage records.
19.741  Package summary records.
19.742  Tank record of wine or spirits of less than 190 degrees of 
          proof.
19.743  Tank summary record for spirits of 190 degrees or more of proof.

                           Processing Account

19.746  Processing.
19.747  Records of manufacturing.
19.748  Dump/batch records.
19.749  Bottling and packaging record.

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19.750  Records of alcohol content and fill tests.
19.751  Records of finished products.
19.752  Denaturation records.
19.753  Record of article manufacture.

                               Tax Records

19.761  Record of tax determination.
19.762  Daily summary record of tax determinations.
19.763  Record of average effective tax rates.
19.764  Inventory reserve records.
19.765  Standard effective tax rates.

                              Other Records

19.766  Record of samples.
19.767  Record of destruction.
19.768  Gauge record.
19.769  Package gauge record.
19.770  Transfer record.
19.771-19.772  [Reserved]
19.773  Daily record of wholesale liquor dealer and taxpaid storeroom 
          operations.
19.774  Record of inventories.
19.775  Record of securing devices.
19.776  Record of scale tests.
19.777  [Reserved]
19.778  Removal on or after January 1, 1987 of Puerto Rican and Virgin 
          Islands spirits, and rum imported from all other areas.
19.779  Record of shipment of spirits and specially denatured spirits 
          withdrawn free of tax.
19.780  Record of distilled spirits shipped to manufacturers of 
          nonbeverage products.

                     Submission of Forms and Reports

19.791  Submission of transaction forms.
19.792  Reports.

       Subpart X--Production of Vinegar by the Vaporizing Process

                            Scope of Subpart

19.821  Production of vinegar by the vaporizing process.

                         Qualification Documents

19.822  Application.
19.823  Changes after original qualification.
19.824  Notice of permanent discontinuance of business.

                       Construction and Equipment

19.825  Construction and equipment.

                            Plant Operations

19.826  Authorized operations.
19.827  Conduct of operations.
19.828  Removals from the premises.

                                 Records

19.829  Daily records.

                    Administrative and Miscellaneous

19.830  Application of distilled spirits tax.

                Subpart Y--Distilled Spirits for Fuel Use

19.901  Scope of subpart.
19.902  Waiver for alcohold fuel plants.
19.903  Alternate methods or procedures.
19.904  Emergency variations from requirements.
19.905  Taxes.
19.906  Special (occupational) tax.

                               Definitions

19.907  Meaning of terms.

                                 Permits

19.910  Application for permit required.
19.911  Criteria for issuance of permit.
19.912  Small plants.
19.913  Action on applications to establish small plants.
19.914  Medium plants.
19.915  Large plants.
19.916  Organizational documents.
19.917  Powers of attorney.
19.918  Information already on file and supplemental information.

               Changes Affecting Applications and Permits

19.919  Changes affecting applications and permits.
19.920  Automatic termination of permits.
19.921  Change in type of alcohol fuel plant.
19.922  Change in name of proprietor.
19.923  Changes in officers, directors, or principal persons.
19.924  Change in proprietorship.
19.925  Continuing partnerships.
19.926  Change in location.

                          Alternate Operations

19.930  Alternating proprietorship.

                  Permanent Discontinuance of Business

19.945  Notice of permanent discontinuance.

                   Suspension or Revocation of Permits

19.950  Suspension or revocation.

                                  Bonds

19.955  Bonds.
19.956  Amount of bond.
19.957  Instructions to compute bond penal sum.
19.958  Conditions of bond.
19.959  Additional provisions with respect to bonds.

                  Construction, Equipment and Security

19.965  Construction and equipment.
19.966  Security.
19.967  Additional security.

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                               Supervision

19.970  Supervision of operations.

                         Accounting for Spirits

19.980  Gauging.
19.981  Inventories.
19.982  Records.
19.983  Spirits rendered unfit for beverage use in the production 
          process.
19.984  Record of spirits received.
19.985  Record of spirits rendered unfit for beverage use.
19.986  Record of dispositions.
19.987  Maintenance and retention of records.
19.988  Reports.

                             Redistillation

19.990  Redistillation of spirits or fuel alcohol received on the plant 
          premises.

                    Uses, Withdrawals, and Transfers

19.995  Use on premises.
19.996  Withdrawal of spirits.
19.997  Withdrawal of fuel alcohol.
19.998  Transfer in bond of spirits.
19.999  Consignor premises.
19.1000  Reconsignment in transit.
19.1001  Consignee premises.
19.1002  Prohibited uses, transfers and withdrawals.

         Materials for Rendering Spirits Unfit for Beverage Use

19.1005  Authorized materials.
19.1006  Other materials.
19.1007  Samples.

                                  Marks

19.1008  Marks.

                   Subpart Z--Paperwork Reduction Act

19.1010  OMB control numbers assigned pursuant to the Paperwork 
          Reduction Act.

    Authority: 19 U.S.C. 81c, 1311; 26 U.S.C. 5001, 5002, 5004-5006, 
5008, 5010, 5041, 5061, 5062, 5066, 5081, 5101, 5111-5113, 5142, 5143, 
5146, 5171-5173, 5175, 5176, 5178-5181, 5201-5204, 5206, 5207, 5211-
5215, 5221-5223, 5231, 5232, 5235, 5236, 5241-5243, 5271, 5273, 5301, 
5311-5313, 5362, 5370, 5373, 5501-5505, 5551-5555, 5559, 5561, 5562, 
5601, 5612, 5682, 6001, 6065, 6109, 6302, 6311, 6676, 6806, 7011, 7510, 
7805; 31 U.S.C. 9301, 9303, 9304, 9306.

    Source: T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, unless otherwise 
noted.

    Editorial Note: Nomenclature changes to part 19 appear by T.D. ATF-
463 and T.D. ATF-462, 66 FR 42733, 42736, Aug. 15, 2001.



                            Subpart A--Scope



Sec. 19.1  General.

    The regulations in this part relate to the location, construction, 
equipment, arrangement, qualification, and operation (including 
activities incident thereto) of distilled spirits plants.



Sec. 19.2  Territorial extent.

    This part applies to the several States of the United States and the 
District of Columbia.



Sec. 19.3  Related regulations.

    Regulations relating to this part are listed below:

27 CFR part 1--Basic Permit Requirements Under the Federal Alcohol 
Administration Act.
27 CFR part 2--Nonindustrial Use of Distilled Spirits and Wine.
27 CFR part 3--Bulk Sales and Bottling of Distilled Spirits.
27 CFR part 4--Wine Labeling and Advertising.
27 CFR part 5--Labeling and Advertising Distilled Spirits.
27 CFR part 20--Distribution and Use of Denatured Alcohol and Rum.
27 CFR part 21--Formulas for Denatured Alcohol and Rum.
27 CFR part 22--Distribution and Use of Tax-Free Alcohol.
27 CFR part 24--Wine.
27 CFR part 26--Liquors and Articles from Puerto Rico and the Virgin 
Islands.
27 CFR part 29--Stills and Miscellaneous Regulations.
27 CFR part 30--Gauging Manual.
27 CFR part 71--Rules of Practice in Permit Proceedings.
27 CFR part 194--Liquor Dealers.
27 CFR part 197--Drawback on Distilled Spirits Used in Manfacturing 
Nonbeverage Products.
27 CFR part 251--Importation of Distilled Spirits, Wine, and Beer.
27 CFR part 252--Exportation of Liquors.
31 CFR part 225--Acceptance of Bonds, Notes, or Other Obligations Issued 
or Guaranteed by the United States as Security in Lieu of Surety or 
Sureties on Penal Bonds.

[T.D. ATF-199, 50 FR 9160, Mar. 6, 1985, as amended by T.D. ATF-207, 50 
FR 23681, June 5, 1985; T.D. ATF-299, 55 FR 24989, June 19, 1990; T.D. 
ATF-459, 66 FR 38549, July 25, 2001]

[[Page 294]]



                         Subpart B--Definitions



Sec. 19.11  Meaning of terms.

    When used in this part and in forms prescribed under this part, 
terms shall have the meaning ascribed in this section. Words in the 
plural form include the singular, and vice versa, and words indicating 
the masculine gender include the feminine. The terms ``includes'' and 
``including'' do not exclude other things not enumerated which are in 
the same general class.
    Alcoholic flavoring materials. Any nonbeverage product on which 
drawback has been or will be claimed under 26 U.S.C. 5131-5134 or 
flavors imported free of tax which are unfit for beverage purposes. The 
term includes eligible flavors but does not include flavorings or 
flavoring extracts manufactured on the bonded premises of distilled 
spirits plant as an intermediate product.
    Application for registration. The application required under 26 
U.S.C. 5171(c).
    Area supervisor. The supervisory officer of the Bureau of Alcohol, 
Tobacco and Firearms area office.
    Article. A product, containing denatured spirits, which was 
manufactured under 27 CFR part 20 or this part.
    ATF bond. For purposes of this part, ATF bond means the internal 
revenue bond as prescribed in 26 U.S.C. Chapter 51.
    ATF officer. An officer or employee of the Bureau of Alcohol, 
Tobacco and Firearms (ATF) authorized to perform any function relating 
to the administration or enforcement of this part.
    Bank. Any commercial bank.
    Banking day. Any day during which a bank is open to the public for 
carrying on substantially all its banking functions.
    Basic permit. The document authorizing the person named therein to 
engage in a designated business or activity under the Federal Alcohol 
Administration Act.
    Bonded premises. The premises of a distilled spirits plant, or part 
thereof, as described in the application for registration, on which 
distilled spirits operations defined in 26 U.S.C. 5002 are authorized to 
be conducted.
    Bottler. A proprietor of a distilled spirits plant qualified under 
this part as a processor who bottles distilled spirits.
    Bulk container. Any approved container having a capacity in excess 
of one wine gallon.
    Bulk conveyance. A tank car, tank truck, tank ship, tank barge, or a 
compartment of any such conveyance, or any other container approved by 
the Director for the conveyance of comparable quantities of spirits, 
including denatured spirits, and wines.
    Bulk distilled spirits. The term bulk distilled spirits means 
distilled spirits in a container having a capacity in excess of one 
gallon.
    Business day. Any day, other than a Saturday, Sunday, or a legal 
holiday. (The term legal holiday includes all holidays in the District 
of Columbia and statewide holidays in the particular State in which the 
claim, report, or return, as the case may be, is required to be filed, 
or the act is required to be performed.)
    Carrier. Any person, company, corporation, or organization, 
including a proprietor, owner, consignor, consignee, or bailee, who 
transports distilled spirits, denatured spirits, or wine in any manner 
for himself or others.
    CFR. The Code of Federal Regulations.
    Commercial bank. A bank, whether or not a member of the Federal 
Reserve system, which has access to the Federal Reserve Communications 
System (FRCS) or Fedwire. The ``FRCS'' or ``Fedwire'' is a 
communications network that allows Federal Reserve system member banks 
to effect a transfer of funds for their customers (or other commercial 
banks) to the Treasury Account at the Federal Reserve Bank of New York.
    Container. A receptacle, vessel, or form of bottle, can, package, 
tank or pipeline (where specifically included) used or capable of being 
used to contain, store, transfer, convey, remove, or withdraw spirits 
and denatured spirits.
    Denaturant or denaturing material. Any material authorized under 27 
CFR part 21 for addition to spirits in the production of denatured 
spirits.
    Denatured spirits. Spirits to which denaturants have been added as 
provided in 27 CFR part 21.

[[Page 295]]

    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC.
    Director of the service center. A director of an internal revenue 
service center.
    Distilled spirits operations. Any authorized distilling, 
warehousing, or processing operations conducted on the bonded premises 
of a plant qualified under this part.
    Distilling material. Any fermented or other alcoholic substance 
capable of, or intended for use in, the original distillation or other 
original processing of spirits.
    District director. A district director of internal revenue.
    Effective tax rate. The net tax rate after reduction for any credit 
allowable under 26 U.S.C. 5010 for wine and flavor content at which the 
tax imposed on distilled spirits by 26 U.S.C. 5001 or 7652 is paid or 
determined.
    Electronic fund transfer or EFT. Any transfer of funds effected by a 
proprietor's commercial bank, either directly or through a correspondent 
banking relationship, via the Federal Reserve Communications System 
(FRCS) or Fedwire to the Treasury Account at the Federal Reserve Bank of 
New York.
    Eligible flavor. A flavor which:
    (1) Is of a type that is eligible for drawback of tax under 26 
U.S.C. 5134,
    (2) Was not manufactured on the premises of a distilled spirits 
plant, and
    (3) Was not subjected to distillation on distilled spirits plant 
premises such that the flavor does not remain in the finished product.
    Eligible wine. Wine on which tax would be imposed by paragraph (1), 
(2), or (3) of 26 U.S.C. 5041(b) but for its removal to distilled 
spirits plant premises and which has not been subject to distillation at 
a distilled spirits plant after receipt in bond.
    Export or exportation. A severance of goods from the mass of things 
belonging to the United States with the intention of uniting them to the 
mass of things belonging to some foreign country and shall include 
shipments to any possession of the United States. For the purposes of 
this part, shipments to the Commonwealth of Puerto Rico, and to the 
territories of the Virgin Islands, American Samoa, and Guam, shall also 
be treated as exportations.
    Fermenting material. Any material which is to be subjected to a 
process of fermentation to produce distilling material.
    Fiduciary. A guardian, trustee, executor, administrator, receiver, 
conservator, or any person acting in any fiduciary capacity for any 
person.
    Fiscal year. The period October 1 of one calendar year through 
September 30 of the following year.
    Gallon or wine gallon. The liquid measure equivalent to the volume 
of 231 cubic inches.
    In bond. When used with respect to spirits, denatured spirits, 
articles, or wine refers to spirits, denatured spirits, articles, or 
wine possessed under bond to secure the payment of the taxes imposed by 
26 U.S.C. Chapter 51, and on which such taxes have not been determined. 
The term includes such spirits, denatured spirits, articles, or wine on 
the bonded premises of a distilled spirits plant, such spirits, 
denatured spirits, or wines in transit between bonded premises 
(including, in the case of wine, bonded wine cellar premises). 
Additionally, the term refers to spirits in transit from customs custody 
to bonded premises, and spirits withdrawn without payment of tax under 
26 U.S.C. 5214, and with respect to which relief from liability has not 
occurred under the provisions of 26 U.S.C. 5005(e)(2).
    Industrial use. As applied to spirits, shall have the meaning 
ascribed in 27 CFR part 2.
    Intermediate product. Any product manufactured pursuant to an 
approved formula under 27 CFR part 5, not intended for sale as such but 
for use in the manufacture of a distilled spirits product.
    I.R.C. The Internal Revenue Code of 1954, as amended.
    Kind. As applied to spirits, except as provided in Sec. 19.597, kind 
shall mean class and type as prescribed in 27 CFR part 5. As applied to 
wines, kind shall mean the classes and types of wines as prescribed in 
27 CFR part 4.
    Liquor bottle. A bottle made of glass or earthenware, or of other 
suitable material approved by the Food and

[[Page 296]]

Drug Administration, which has been designed or is intended for use as a 
container for distilled spirits for sale for beverage purposes and which 
has been determined by the Director to protect the revenue adequately.
    Liter. A metric unit of capacity equal to 1,000 cubic centimeters of 
alcoholic beverage, and equivalent to 33.814 fluid ounces. A liter is 
divided into 1,000 milliliters. Milliliter or milliliters may be 
abbreviated as ``ml.''
    Lot identification. The lot identification described in Sec. 19.593.
    Mash, wort, wash. Any fermented material capable of, or intended 
for, use as a distilling material.
    Nonindustrial use. As applied to spirits, shall have the meaning 
ascribed in 27 CFR part 2.
    Operating permit. The document issued pursuant to 26 U.S.C. 5171(d), 
authorizing the person named therein to engage in the business or 
operation described therein.
    Package. A cask or barrel or similar wooden container, or a drum or 
similar metal container.
    Package identification number. The package identification number 
described in Sec. 19.593.
    Person. An individual, trust, estate, partnership, association, 
company, or corporation.
    Plant or distilled spirits plant. An establishment qualified under 
this part for distilling, warehousing, processing or any combination 
thereof.
    Plant number. The number assigned to a distilled spirits plant by 
the regional director (compliance).
    Processor. Except as otherwise provided under 26 U.S.C. 5002(a)(6), 
any person qualified under this part who manufactures, mixes, bottles, 
or otherwise processes distilled spirits or denatured spirits, or 
manufactures any article.
    Proof. The ethyl alcohol content of a liquid at 60 degrees 
Fahrenheit, stated as twice the percent of ethyl alcohol by volume.
    Proof of distillation. The composite proof of the spirits at the 
time the production gauge is made,or, if the spirits had been reduced in 
proof prior to the production gauge, the proof of the spirits prior to 
such reduction, unless the spirits are subsequently redistilled at a 
higher proof than the proof prior to reduction.
    Proof gallon. 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.
    Proprietor. The person qualified under this part to operate the 
distilled spirits plant.
    Reconditioning. The dumping of distilled spirits products in bond 
after their bottling or packaging, for purposes other than destruction, 
denaturation, redistillation, or rebottling. The term may include the 
filtration, clarification, stabilization, or reformulation of a product.
    Recovered article. An article containing specially denatured spirits 
salvaged without all of its original ingredients, or an article 
containing completely denatured alcohol salvaged without all of the 
denaturants for completely denatured alcohol, under 27 CFR part 20.
    Region. A Bureau of Alcohol, Tobacco and Firearms region.
    Region director (compliance). The principal regional official 
responsible for administering regulations in this part.
    Season. The period from January 1 through June 30, is the spring 
season, and the period from July 1 through December 31 is the fall 
season.
    Secretary. The Secretary of the Treasury or his delegate.
    Service center. An Internal Revenue Service Center in any of the 
Internal Revenue regions.
    Spirits or distilled spirits. That substance known as ethyl alcohol, 
ethanol, or spirits of wine in any form (including all dilutions and 
mixtures thereof, from whatever source or by whatever process produced) 
but not denatured spirits unless specifically stated. The term does not 
include mixtures of distilled spirits and wine, bottled at 48 deg. proof 
or less, if the mixture contains more than 50 percent wine on a proof 
gallon basis.
    Spirits residues. Residues, containing distilled spirits, of a 
manufacturing process related to the production of an article under 27 
CFR part 20.

[[Page 297]]

    Tax-determined or determined. When used with respect to the tax on 
any distilled spirits to be withdrawn from bond on determination of tax, 
shall mean that the taxable quantity of spirits has been established.
    Taxpaid. When used with respect to distilled spirits shall mean that 
all applicable taxes imposed by law in respect of such spirits have been 
determined or paid as provided by law.
    This chapter. Title 27, Code of Federal Regulations, Chapter I (27 
CFR Chapter I).
    Transfer in bond. The removal of spirits, denatured spirits and 
wines from one bonded premises to another bonded premises.
    Treasury Account. The Department of the Treasury's General Account 
at the Federal Reserve Bank of New York.
    Unfinished spirits. Spirits in the production system prior to 
production gauge.
    U.S.C. The United States Code.
    Warehouseman. A proprietor of a distilled spirits plant qualified 
under this part to store bulk distilled spirits.
    Wine spirits. The term ``wine spirits'' means spirits authorized for 
use in wine production by 26 U.S.C. 5373.

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50 
FR 9160, Mar. 6, 1985; T.D. ATF-206, 50 FR 23951, June 7, 1985; T.D. 
ATF-230, 51 FR 21748, June 16, 1986; T.D. ATF-297, 55 FR 18061, Apr. 30, 
1990; T.D. ATF-398, 63 FR 44783, Aug. 21, 1998]



                            Subpart C--Taxes

                             Gallonage Taxes



Sec. 19.21  Tax.

    (a) A tax is imposed by 26 U.S.C. 5001 and 7652 on all spirits 
produced in, imported into or brought into the United States at the rate 
prescribed in section 5001 on each proof gallon and a proportionate tax 
at a like rate on all fractional parts of a proof gallon. Wines 
containing more than 24 percent of alcohol by volume are taxed as 
spirits. All products of distillation, by whatever name known, which 
contain spirits, on which the tax imposed by law has not been paid, and 
any alcoholic ingredient added to such products, are considered and 
taxed as spirits.
    (b) A credit against the tax imposed on distilled spirits by 26 
U.S.C. 5001 or 7652 is allowable under 26 U.S.C. 5010 on each proof 
gallon of alcohol derived from eligible wine or from eligible flavors 
which do not exceed 2\1/2\ percent of the finished product on a proof 
gallon basis. The credit is allowable at the time the tax is payable as 
if it constituted a reduction in the rate of tax.
    (c) Where credit against the tax is desired, the person liable for 
the tax shall establish an effective tax rate in accordance with 
Sec. 19.34. The effective tax rate established will be applied to each 
withdrawal or other taxable disposition of the distilled spirits.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended (26 U.S.C. 5001); 
Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010); Act 
of August 16, 1954, Pub. L. 591, 68A Stat. 907, as amended (26 U.S.C. 
7652)).

[T.D. ATF-297, 55 FR 18061, Apr. 30, 1990]



Sec. 19.22  Attachment of tax.

    Under 26 U.S.C. 5001(b), the tax attaches to spirits as soon as the 
substance comes into existence as such, whether it be subsequently 
separated as pure or impure spirits, or be immediately, or at any 
subsequent time, transferred into any other substance, either in the 
process of original production, or by any subsequent process.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended (26 U.S.C. 5001))



Sec. 19.23  Lien.

    Under 26 U.S.C. 5004, the tax becomes a first lien on the spirits 
from the time the spirits come into existence as such. The conditions 
under which the first lien shall be terminated are described in 26 
U.S.C. 5004.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1317, as amended (26 U.S.C. 5004))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]



Sec. 19.24  Persons liable for tax.

    (a) Distilling. 26 U.S.C. 5005 provides that the distiller of 
spirits is liable for the tax and that each proprietor or possessor of, 
and person in any manner interested in the use of, any still, distilling 
apparatus, or distillery, shall be jointly and severally liable for the 
tax on distilled spirits produced. However,

[[Page 298]]

a person, not an officer or director of a corporate proprietor, owning 
or having the right of control of not more than 10 percent of any class 
of stock of that proprietor, is not liable by reason of the stock 
ownership or control. Persons transferring spirits in bond so liable for 
the tax are relieved of liability if
    (1) The proprietors of transferring and receiving premises are 
independent of each other and neither has a proprietary interest, 
directly or indirectly, in the business of the other, and
    (2) No person so liable for the tax on the spirits transferred 
retains any interest in the spirits.
    (b) Storage on bonded premises. 26 U.S.C. 5005(c) provides that each 
person operating bonded premises shall be liable for the tax on all 
spirits while the spirits are stored on the premises, and on all spirits 
which are in transit to the premises from the time of removal from the 
transferor's bonded premises, pursuant to an approved application. 
Liability for the tax continues until the spirits are transferred or 
withdrawn from bonded premises as authorized by law, or until the 
liability for tax is relieved under the provisions of 26 U.S.C. 5008(a). 
Claims for relief from liability for spirits lost are provided for in 
Sec. 19.41. Voluntary destruction of spirits in bond is provided for in 
subpart U of this part.
    (c) Withdrawals without payment of tax. Under 26 U.S.C. 5005(e), any 
person who withdraws spirits from the bonded premises of a plant without 
payment of tax, as provided in 26 U.S.C. 5214, shall be liable for the 
tax on the spirits from the time of withdrawal. The person shall be 
relieved of any liability at the time the spirits are exported, 
deposited in a foreign-trade zone, used in production of wine, deposited 
in a customs bonded warehouse, laden as supplies upon or used in the 
maintenance or repair of certain vessels or aircraft, or used for 
certain research, development or testing, as provided by law.
    (d) Withdrawals free of tax. Persons liable for tax under paragraph 
(a) of this section, are relieved of the liability on spirits withdrawn 
from bonded premises free of tax under this part, at the time the 
spirits are withdrawn.
    (e) Withdrawn from customs custody without payment of tax. 26 U.S.C. 
5232(a) provides that when imported distilled spirits in bulk containers 
are withdrawn from customs custody and transferred to the bonded 
premises of a distilled spirits plant without payment of the tax imposed 
on imported distilled spirits by 26 U.S.C. 5001, the person operating 
the bonded premises of the distilled spirits plant to which spirits are 
transferred shall become liable for the tax on the spirits upon their 
release from customs custody, and the importer shall thereupon be 
relieved of liability for the tax.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1318, as amended (26 U.S.C. 5005); 
sec. 3, Pub. L. 90-630, 82 Stat. 1328, as amended (26 U.S.C. 5232); sec. 
3, Pub. L. 91-659, 84 Stat. 1965, as amended (26 U.S.C. 5066))



Sec. 19.25  Time for tax determination.

    Except as otherwise provided in this part, the tax on spirits shall 
be determined when the spirits are withdrawn from bond. The tax on 
spirits which are to be withdrawn from bonded premises shall be 
determined upon completion of the gauge for determination of tax and 
before withdrawal from bonded premises.

(Sec. 201, Pub. L. 85-859, 72 Stat 1320, as amended (26 U.S.C. 5006))



Sec. 19.26  Tax on wine.

    (a) Imposition of tax. A tax is imposed by 26 U.S.C. 5041 or 7652 on 
wine (including imitation, substandard, or artificial wine, and 
compounds sold as wine) produced in or imported or brought into the 
United States. Proprietors of distilled spirits plants may become liable 
for wine taxes under 26 U.S.C. 5362(b)(3) in connection with wine 
transferred in bond to a distilled spirits plant. Wine may not be 
removed from the bonded premises of a distilled spirits plant for 
consumption or sale as wine.
    (b) Liability for tax. Except as otherwise provided by law, the 
liability for tax on wine transferred in bond from a bonded wine cellar 
to a distilled spirits plant, or transferred in bond between distilled 
spirits plants, will continue

[[Page 299]]

until the wine is used in a distilled spirits product.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1331, as amended, 1380, as amended 
(26 U.S.C. 5041, 5362))

[T.D. ATF-297, 55 FR 18062, Apr. 30, 1990; 55 FR 23634, June 11, 1990]

                               Assessments



Sec. 19.31  Production not accounted for.

    Where the regional director (compliance) finds that a distiller has 
not accounted for all spirits produced by him, assessment shall be made 
for the tax on the difference between the quantity reported and the 
quantity found to have been actually produced.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1320, as amended (26 U.S.C. 5006))



Sec. 19.32  Assessment of tax on spirits, denatured spirits, or wines in bond which are lost, destroyed or removed without authorization.

    When spirits, denatured spirits, or wines in bond are lost or 
destroyed (except spirits, denatured spirits, or wines on which the tax 
is not collectible by reason of the provisions of 26 U.S.C. 5008 (a) or 
(d) or 26 U.S.C. 5370, as applicable) and the proprietor or other person 
liable for the tax on the spirits, denatured spirits, or wines fails to 
file a claim for remission as provided in Sec. 19.41(a) or when the 
claim is denied, the tax shall be assessed. In any case where spirits, 
denatured spirits, or wines in bond are removed from bonded premises 
other than as authorized by law, the tax shall be assessed. In the case 
of losses under circumstances described in 26 U.S.C. 5006(b) with 
respect to packages of spirits or denatured spirits on bonded premises, 
the tax shall be assessed if the tax is not paid upon the demand of the 
regional director (compliance).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1320, as amended, 1323, as amended, 
1381, as amended (26 U.S.C. 5006, 5008, 5370))

                           Effective Tax Rates

    Source: Sections 19.34 through 19.38 added by T.D. ATF-297, 55 FR 
18062, Apr. 30, 1990, unless otherwise noted.



Sec. 19.34  Computation of effective tax rate.

    (a) The proprietor shall compute the effective tax rate for 
distilled spirits containing eligible wine or eligible flavors as the 
ratio of the numerator and denominator as follows:
    (1) The numerator will be the sum of:
    (i) The proof gallons of all distilled spirits used in the product 
(exclusive of distilled spirits derived from eligible flavors), 
multiplied by the tax rate prescribed by 26 U.S.C. 5001;
    (ii) The wine gallons of each eligible wine used in the product, 
multiplied by the tax rate prescribed by 26 U.S.C. 5041(b)(1), (2), or 
(3), which would be imposed on the wine but for its removal to bonded 
premises; and
    (iii) The proof gallons of all distilled spirits derived from 
eligible flavors used in the product, multiplied by the tax rate 
prescribed by 26 U.S.C. 5001, but only to the extent that such distilled 
spirits exceed 2\1/2\% of the denominator prescribed in paragraph (a)(2) 
of this section.
    (2) The denominator will be the sum of:
    (i) The proof gallons of all distilled spirits used in the product, 
including distilled spirits derived from eligible flavors; and
    (ii) The wine gallons of each eligible wine used in the product, 
multiplied by twice the percentage of alcohol by volume of each, divided 
by 100.
    (b) In determining the effective tax rate, quantities of distilled 
spirits, eligible wine, and eligible flavors will be expressed to the 
nearest tenth of a proof gallon. The effective tax rate may be rounded 
to as many decimal places as the proprietor deems appropriate, provided 
that, such rate is expressed no less exactly than the rate rounded to 
the nearest whole cent, and the effective tax rates for all products 
will be consistently expressed to the same number of decimal places. In 
such case, if the number is less than five it will be dropped; if it is 
five or over, a unit will be added.
    (c) The following is an example of the use of the formula.

                              BATCH RECORD
 
Distilled spirits.........................  2249.1 proof gallons.

[[Page 300]]

 
Eligible wine (14% alcohol by volume).....  2265.0 wine gallons.
Eligible wine (19% alcohol by volume).....  1020.0 wine gallons.
Eligible flavors..........................  100.9 proof gallons.
 


 
    2249.1($13.50)+2265.0($1.07)+1020($1.57)+16.6 \1\ ($13.50)
------------------------------------------------------------------   =
               2249.1+100.9+(2265.0x.28)+(1020x.38)
------------------------------------------------------------------------
 


 
              $30,362.85+$2,423.55+$1,601.40+$224.10
------------------------------------------------------------------   =
                       2,350.0+634.2+387.6
------------------------------------------------------------------------
 


 
                                        $34,611.90
                                     ----------------  =    $10.27, the effective tax
                                          3,371.8                     rate.
----------------------------------------------------------------------------------------------------------------
 
\1\ Proof gallons by which distilled spirits derived from eligible flavors exceed 2\1/2\%) of the total proof
  gallons in the batch (100.9-(2\1/2\%)x3,371.8=16.6).


(Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010))

[T.D. ATF-297, 55 FR 18062, Apr. 30, 1990, as amended by T.D. ATF-307, 
52736, Dec. 21, 1990]



Sec. 19.35  Application of effective tax rate (Actual).

    Any proprietor who does not apply effective tax rates to taxable 
removals in accordance with Sec. 19.36, 19.37 or 19.38 shall establish 
an effective tax rate for each batch of distilled spirits in the 
processing account on which credit against tax is desired for alcohol 
derived from eligible wine or eligible flavors. The effective tax rate 
will be computed in accordance with Sec. 19.34 and will be recorded on 
the dump or batch record for the product, as required by Sec. 19.748. 
The serial numbers of the cases removed at such rate shall be recorded 
on the record of tax determination prescribed in Sec. 19.761 or other 
related record available for examination by any ATF officer.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207); Sec. 201, Pub. 
L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201); Sec 6, Pub. L. 
96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010))



Sec. 19.36  Standard effective tax rate.

    (a) The proprietor may establish a permanent standard effective tax 
rate for any eligible distilled spirits product based on the least 
quantity and the lowest alcohol content of eligible wine or eligible 
flavors used in the manufacture of the product. The permanent standard 
effective tax rate must equal the highest tax rate applicable to the 
product. The proprietor shall maintain a permanent record of the 
standard effective tax rate established for each product in accordance 
with Sec. 19.765. Whenever the proprietor manufactures a batch of the 
product with a lesser quantity or lower alcohol content of eligible wine 
or eligible flavor, he shall keep the cased goods segregated from other 
completed cases of the same product and shall tax determine the product 
in accordance with Sec. 19.35.
    (b) If the regional director (compliance) finds that the use of this 
procedure jeopardizes the revenue or causes administrative difficulty, 
the proprietor shall discontinue the use of the procedure.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207); Sec. 201, Pub. 
L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201); Sec. 6, Pub. L. 
96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010))



Sec. 19.37  Average effective tax rate.

    (a) The proprietor may establish an average effective tax rate for 
any eligible distilled spirits product based on the total proof gallons 
in all batches of the same composition which have been produced during 
the preceding 6-month period and which have been or will be bottled or 
packaged, in whole or in part, for domestic consumption. At the 
beginning of each month, the proprietor shall recompute the average 
effective tax rate so as to include only the immediately preceding 6-
month period.

[[Page 301]]

The average effective tax rate established for a product will be shown 
in the record of average effective tax rates prescribed in Sec. 19.763.
    (b) If the regional director (compliance) finds that the use of this 
procedure jeopardizes the revenue or causes administrative difficulty, 
the proprietor shall discontinue the use of this procedure.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207); Sec. 201, Pub. 
L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201); Sec. 6, Pub. L. 
96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010))



Sec. 19.38  Inventory reserve account.

    (a) The proprietor may establish an inventory reserve account for 
any eligible distilled spirits product by maintaining an inventory 
reserve record as prescribed by 19.764. The effective tax rate applied 
to each removal or other disposition will be the effective tax rate 
recorded on the inventory reserve record from which the removal or other 
disposition is depleted.
    (b) If the regional director (compliance) finds that the use of this 
procedure jeopardizes the revenue or causes administrative difficulty, 
the proprietor shall discontinue the use of this procedure.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207); Sec. 201, Pub. 
L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201); Sec. 6, Pub. L. 
96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010))

                                 Claims



Sec. 19.41  Claims on spirits, denatured spirits, articles, or wines lost or destroyed in bond.

    (a) Claims for remission. All claims for remission of tax required 
by this part, relating to the destruction or loss of spirits, denatured 
spirits, articles, or wines in bond, shall be filed with the regional 
director (compliance) and shall set forth the following:
    (1) Identification (including serial numbers if any) and location of 
the container or containers from which the spirits, denatured spirits, 
articles, or wines were lost, or removed for destruction;
    (2) Quantity of spirits, denatured spirits, articles, or wines lost 
or destroyed from each container, and the total quantity of spirits or 
wines covered by the claim;
    (3) Total amount of tax for which the claim is filed;
    (4) Name, number, and address of the plant from which withdrawn 
without payment of tax or removed for transfer in bond (if claim 
involves spirits so withdrawn or removed or if claim involves wines 
transferred in bond) and date and purpose of such withdrawal or removal, 
except that in the case of imported spirits lost or destroyed while 
being transferred from customs custody to ATF bond as provided in 
Sec. 19.481, the name of the customs warehouse, if any, and port of 
entry will be given instead of the plant name, number, and address;
    (5) Date of the loss or destruction (or, if not known, date of 
discovery), the cause or nature thereof, and all the facts relative 
thereto;
    (6) Name of the carrier, where a loss in transit is involved;
    (7) The name and address of the consignee, in the case of spirits 
withdrawn without payment of tax which are lost before being used for 
research, development or testing;
    (8) If lost by theft, facts establishing that the loss did not occur 
as the result of any negligence, connivance, collusion or fraud on the 
part of the proprietor of the plant, owner, consignor, consignee, 
bailee, or carrier, or the employees or agents of any of them;
    (9) In the case of a loss by theft, whether the claimant is 
indemnified or recompensed for the spirits or wines lost and if so, the 
amount and nature of indemnity or recompense and the actual value of the 
spirits or wines, less the tax.
    (b) Claims for abatement, credit or refund. Claims for abatement of 
an assessment, or for credit or refund of tax which has been paid or 
determined, for spirits, denatured spirits, articles, or wines lost or 
destroyed in bond shall be filed with the regional director 
(compliance). The claims shall set forth the information required under 
paragraph (a) of this section and, in addition, shall set forth--
    (1) The date of assessment or payment (or of tax determination, if 
the tax has not been assessed or paid) of

[[Page 302]]

the tax for which abatement, credit or refund is claimed, and
    (2) The name, plant number, and the address of the plant where the 
tax was determined, paid, or assessed (or name, address and capacity of 
any other person who paid or was assessed the tax, if the tax was not 
paid by or assessed against a proprietor).
    (c) Supporting document. (1) Claims under paragraphs (a) and (b) of 
this section shall be supported (whenever possible) by affidavits of 
persons having personal knowledge of the loss or destruction. For claims 
on spirits, denatured spirits, articles, or wines lost while being 
transferred by carrier, the claim shall be supported by a copy of the 
bill of lading.
    (2) For claims pertaining to losses of spirits withdrawn without 
payment of tax and lost prior to being used for research, development or 
testing, the claim shall be supported by a copy of the proprietor's 
sample record prescribed in subpart W of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended, 1381, as amended 
(26 U.S.C. 5008, 5370))



Sec. 19.42  Claims on spirits returned to bonded premises.

    (a) Claims for credit or refund of tax on spirits which have been 
withdrawn from bonded premises on payment or determination of tax and 
which are returned under 26 U.S.C. 5215 shall be filed with the regional 
director (compliance) and shall set forth the following:
    (1) Quantity of spirits so returned;
    (2) Amount of tax for which the claim is filed;
    (3) Name, address, and plant number of the plant to which the 
spirits were returned and the date of the return;
    (4) The purpose for which returned; and
    (5) The serial number of the gauge record on which the spirits were 
returned.
    (b) If the alcoholic content of the spirits contain at least 92 
percent Puerto Rican or Virgin Islands rum, or if the spirits contain 
rum imported from any area other than Puerto Rico and the Virgin 
Islands, the claim shall show:
    (1) Proof gallons of the finished product derived from Puerto Rican 
or Virgin Islands spirits, or derived from rum imported from any other 
area; and
    (2) The amount of tax imposed by 26 U.S.C. 7652 or 26 U.S.C. 5001, 
determined at the time of withdrawal from bond, on the Puerto Rican or 
Virgin Islands spirits, or on the rum imported from any other area, 
contained in the product.
    (c) Claims for credit or refund of tax on spirits containing 
eligible wine or eligible flavors must set forth the date and serial 
number of the record of tax determination and the effective tax rate at 
which the tax was paid or determined. If this information is not 
provided, the amount of tax claimed will be based on the lowest 
effective tax rate applied to the product.
    (d) Claims for credit or refund of tax shall be filed by the 
proprietor of the plant to which the spirits were returned within six 
months of the date of the return. No interest is allowed on any claims 
for refund or credit.

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-233, 51 
FR 28077, Aug. 5, 1986; T.D. ATF-297, 55 FR 18063, Apr. 30, 1990]



Sec. 19.43  Claims relating to spirits lost after tax determination.

    Claims for abatement, credit, or refund of tax under this part, 
relating to losses of spirits occurring on bonded premises after tax 
determination but prior to physical removal from such premises, shall be 
prepared and filed as provided in, and contain the information called 
for under Sec. 19.41(b) and be supported by documents as provided under 
Sec. 19.41(c).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended (26 U.S.C. 5008))



Sec. 19.44  Execution of claims and supporting documents.

    All claims filed under this part shall be filed on Form 2635 
(5620.8). Claims for abatement, remission, credit, or refund shall (a) 
show the name, address, and capacity of the claimant, (b) be signed by 
the claimant or his duly authorized agent, and (c) be executed under the 
penalties of perjury as provided in Sec. 19.100. Supporting documents 
required by this part to be submitted

[[Page 303]]

with a claim shall be attached to the claim and shall be deemed to be a 
part thereof. The regional director (compliance) may require the 
submission of additional evidence in support of any claim filed under 
this part when deemed necessary for proper action on the claim.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended (26 U.S.C. 5008); 
sec. 807, Pub. L. 96-39, 93 Stat. 285 (26 U.S.C. 5215))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985; T.D. 
ATF-251, 52 FR 19313, May 22, 1987]



Sec. 19.45  Claims for credit of tax.

    Claims for credit of tax, as provided in this part, may be filed 
after determination of the tax whether or not the tax has been paid. The 
claimant may not anticipate allowance of a credit or make an adjusting 
entry in a tax return pending action on the claim.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended (26 U.S.C. 5008); 
sec. 807, Pub. L. 96-39, 93 Stat. 285 (26 U.S.C. 5215))



Sec. 19.46  Adjustments for credited tax.

    When notification of allowance of credit is received from the 
regional director (compliance), including notification of credit for tax 
on spirits exported with benefit of drawback as provided in 27 CFR part 
252, the claimant shall make an adjusting entry and explanatory 
statement (specifically identifying the notification of allowance of 
credit) in the next excise tax return (or returns) to the extent 
necessary to exhaust the credit.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended, 1336, as amended 
(26 U.S.C. 5008, 5062))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-219, 50 
FR 51387, Dec. 17, 1985]



                Subpart Ca--Special (Occupational) Taxes

    Source: T.D. ATF-271, 53 FR 17541, May 17, 1988, unless otherwise 
noted.



Sec. 19.49  Liability for special tax.

    (a) Proprietor of distilled spirits plant--(1) General. Except as 
provided in Sec. 19.906, every proprietor of a distilled spirits plant 
shall pay a special (occupational) tax at a rate specified by 
Sec. 19.50. The tax shall be paid on or before the date of commencing 
business as a distilled spirits plant proprietor, and thereafter every 
year on or before July 1. On commencing business, the tax shall be 
computed from the first day of the month in which liability is incurred, 
through the following June 30. Thereafter, the tax shall be computed for 
the entire year (July 1 through June 30).
    (2) Transition rule. For purposes of paragraph (a)(1) of this 
section, a proprietor engaged in distilled spirits plant operations on 
January 1, 1988, shall be treated as having commenced business on that 
date. The special tax imposed by this transition rule shall cover the 
period January 1, 1988, through June 30, 1988, and shall be paid on or 
before April 1, 1988.
    (b) Liquor Dealer--(1) General. A proprietor of a distilled spirits 
plant shall be subject to or exempt from a liquor dealer's special 
(occupational) tax as provided in part 194 of this chapter.
    (2) Exemption for sales by a proprietor of a distilled spirits 
plant. A proprietor of a distilled spirits plant is not required to pay 
special tax as a wholesale or retail dealer in liquor because of sales, 
at the principal place of business or at the distilled spirits plant, of 
liquor which at the time of sale is stored at the distilled spirits 
plant or which had been removed and stored in a taxpaid storeroom 
operated in connection with the distilled spirits plant. Each proprietor 
of a distilled spirits plant shall have only one exemption from dealer's 
special tax for each distilled spirits plant. The distiller may 
designate, in writing to the regional director (compliance), that the 
principal place of business will be exempt from dealer's special tax; 
otherwise, the exemption will apply to the distilled spirits plant.
    (c) Each place of business taxable--(1) General. A proprietor of a 
distilled spirits plant incurs special tax liability at each place of 
business in which an occupation subject to special tax is conducted. A 
place of business means the entire office, plant or area of the business 
in any one location under the same proprietorship. Passageways,

[[Page 304]]

streets, highways, rail crossings, waterways, or partititions dividing 
the premises are not sufficient separation to require additional special 
tax, if the divisions of the premises are otherwise contiguous.
    (2) Exception for contiguous areas. A proprietor of a distilled 
spirits plant does not incur additional special tax liability for sales 
of liquor made at a location other than on distilled spirits plant 
premises described on the notice of registration, Form 5110.41, if the 
location where such sales are made is contiguous to the distilled 
spirits plant premises in the manner described in paragraph (c)(1) of 
this section.

(26 U.S.C. 5081, 5111, 5113, 5142, 5143)

[T.D. ATF-271, 53 FR 17541, May 17, 1988, as amended by T.D. ATF-285, 54 
FR 12609, Mar. 28, 1989]



Sec. 19.50  Rates of special tax.

    (a) General. Title 26 U.S.C. 5081(a)(1) imposes a special tax of 
$1,000 per year on every proprietor of a distilled spirits plant.
    (b) Reduced rate for small proprietors. Title 26 U.S.C. 5081(b) 
provides for a reduced rate of $500 per year with respect to any 
distilled spirits plant proprietor whose gross receipts (for the most 
recent taxable year ending before the first day of the taxable period to 
which the special tax imposed by Sec. 19.49 relates) are less than 
$500,000. The ``taxable year'' to be used for determining gross receipts 
is the taxpayer's income tax year. All gross receipts of the taxpayer 
shall be included, not just the gross receipts of the business subject 
to special tax. Proprietors of new businesses that have not yet begun a 
taxable year, as well as proprietors of existing businesses that have 
not yet ended a taxable year, who commence a new activity subject to 
special tax, qualify for the reduced special (occupational) tax rate, 
unless the business is a member of a ``controlled group''; in that case, 
the rules of paragraph (c) of this section shall apply.
    (c) Controlled group. All persons treated as one taxpayer under 26 
U.S.C. 5061(e)(3) shall be treated as one taxpayer for the purpose of 
determining gross receipts under paragraph (b) of this section. 
``Controlled group'' means a controlled group of corporations, as 
defined in 26 U.S.C. 1563 and implementing regulations in 26 CFR 1.1563-
1 through 1.1563-4, except that the words ``at least 80 percent'' shall 
be replaced by the words ``more than 50 percent'' in each place they 
appear in subsection (a) of 26 U.S.C. 1563, as well as in the 
implementing regulations. Also, the rules for a ``controlled group of 
corporations'' apply in a similar fashion to groups which include 
partnerships and/or sole proprietorships. If one entity maintains more 
than 50% control over a group consisting of corporations and one, or 
more, partnerships and/or sole proprietorships, all of the members of 
the controlled group are one taxpayer for the purpose of this section.
    (d) Short taxable year. Gross receipts for any taxable year of less 
than 12 months shall be annualized by multiplying the gross receipts for 
the short period by 12 and dividing the result by the number of months 
in the short period, as required by 26 U.S.C. 448(c)(3).
    (e) Returns and allowances. Gross receipts for any taxable year 
shall be reduced by returns and allowances made during that year under 
26 U.S.C. 448(c)(3).

(26 U.S.C. 448, 5061, 5081)



Sec. 19.51  Special tax returns.

    (a) General. Special tax shall be paid by return. The prescribed 
return is ATF Form 5630.5, Special Tax Registration and Return. Special 
tax returns, with payment of tax, shall be filed with ATF in accordance 
with instructions on the form.
    (b) Preparation of ATF Form 5630.5. All of the information called 
for on Form 5630.5 shall be provided, including:
    (1) The true name of the taxpayer.
    (2) The trade name(s) (if any) of the business(es) subject to 
special tax.
    (3) The employer identification number (see Sec. 19.52).
    (4) The exact location of the place of business, by name and number 
of building or street, or if these do not exist, by some description in 
addition to the post office address. In the case of one return for two 
or more locations, the address to be shown shall be the taxpayer's 
principal place of business (or principal office, in the case of a 
corporate taxpayer).

[[Page 305]]

    (5) The class(es) of special tax to which the taxpayer is subject.
    (6) Ownership and control information: that is, the name, position, 
and residence address of every owner of the business and of every person 
having power to control its management and policies with respect to the 
activity subject to special tax. ``Owner of the business'' shall include 
every partner, if the taxpayer is a partnership, and every person owning 
10% or more of its stock, if the taxpayer is a corporation. However, the 
ownership and control information required by this paragraph need not be 
stated if the same information has been previously provided to ATF in 
connection with a permit application, and if the information previously 
provided is still current.
    (c) Multiple locations and/or classes of tax. A taxpayer subject to 
special tax for the same period at more than one location or for more 
than one class of tax shall--
    (1) File one special tax return, ATF Form 5630.5, with payment of 
tax, to cover all such locations and classes of tax; and
    (2) Prepare, in duplicate, a list identified with the taxpayer's 
name, address (as shown on ATF Form 5630.5), employer identification 
number, and period covered by the return. The list shall show, by 
States, the name, address, and tax class of each location for which 
special tax is being paid. The original of the list shall be filed with 
ATF in accordance with instructions on the return, and the copy shall be 
retained at the taxpayer's principal place of business (or principal 
office, in the case of a corporate taxpayer) for the period specified in 
Sec. 19.723(c).
    (d) Signing of ATF Forms 5630.5--(1) Ordinary returns. The return of 
an individual proprietor shall be signed by the individual. The return 
of a partnership shall be signed by a general partner. The return of a 
corporation shall be signed by any officer. In each case, the person 
signing the return shall designate his or her capacity as ``individual 
owner,'' ``member of firm,'' or, in the case of a corporation, the title 
of the officer.
    (2) Fiduciaries. Receivers, trustees, assignees, executors, 
administrators, and other legal representatives who continue the 
business of a bankrupt, insolvent, deceased person, etc., shall indicate 
the fiduciary capacity in which they act.
    (3) Agent or attorney in fact. If a return is signed by an agent or 
attorney in fact, the signature shall be preceded by the name of the 
principal and followed by the title of the agent or attorney in fact. A 
return signed by a person as agent will not be accepted unless there is 
filed, with the ATF office with which the return is required to be 
filed, a power of attorney authorizing the agent to perform the act.
    (4) Perjury statement. ATF Forms 5630.5 shall contain or be verified 
by a written declaration that the return has been executed under the 
penalties of perjury.

(26 U.S.C. 6061, 6065, 6151, 7011)



Sec. 19.52  Employer identification number.

    (a) Requirement. The employer identification number (defined in 26 
CFR 301.7701-12) of the taxpayer who has been assigned such a number 
shall be shown on each special tax return, including amended returns, 
filed under this subpart. Failure of the taxpayer to include the 
employer identification number may result in the imposition of the 
penalty specified in Sec. 70.113 of this chapter.
    (b) Application for employer identification number. Each taxpayer 
who files a special tax return, who has not already been assigned an 
employer identification number, shall file IRS Form SS-4 to apply for 
one. The taxpayer shall apply for and be assigned only one employer 
identification number, regardless of the number of places of business 
for which the taxpayer is required to file a special tax return. The 
employer identification number shall be applied for no later than 7 days 
after the filing of the taxpayer's first special tax return. IRS Form 
SS-4 may be obtained from the director of an IRS service center or from 
any IRS district director.
    (c) Preparation and filing of IRS Form SS-4. The taxpayer shall 
prepare and file IRS Form SS-4, together with any

[[Page 306]]

supplementary statement, in accordance with the instructions on the form 
or issued in respect to it.

(26 U.S.C. 6109)

[T.D. ATF-271, 53 FR 17541, May 17, 1988, as amended by T.D. ATF-301, 55 
FR 47605, Nov. 14, 1990]

                           Special Tax Stamps



Sec. 19.53  Issuance, distribution, and examination of special tax stamps.

    (a) Issuance of special tax stamps. Upon filing a properly executed 
return on ATF Form 5630.5, together with the full remittance, the 
taxpayer will be issued an appropriately designated special tax stamp. 
If the return covers multiple locations, the taxpayer will be issued one 
appropriately designated stamp for each location listed on the 
attachment required by Sec. 19.51(c), but showing, as to name and 
address, only the name of the taxpayer and the address of the taxpayer's 
principal place of business (or principal office in the case of a 
corporate taxpayer).
    (b) Distribution of special tax stamps for multiple locations. On 
receipt of the special tax stamps, the taxpayer shall verify that there 
is one stamp for each location listed on the attachment to ATF Form 
5630.5. The taxpayer shall designate one stamp for each location and 
shall type on each stamp the address of the business conducted at the 
location for which that stamp is designated. The taxpayer shall then 
forward each stamp to the place of business designated on the stamp.
    (c) Examination of special tax stamps. All stamps denoting payment 
of special tax shall be kept available for inspection by ATF officers, 
at the location for which designated, during business hours.

(26 U.S.C. 5146, 6806)



Sec. 19.54  Changes in special tax stamps.

    (a) Change in name. If there is a change in the corporate or firm 
name, or in the trade name, as shown on Form 5630.5, the proprietor 
shall file an amended special tax return as soon as practicable after 
the change, covering the new corporate or firm name, or trade name. No 
new special tax is required to be paid. The proprietor shall attach the 
special tax stamp for endorsement of the change in name.
    (b) Change in proprietorship--(1) General. If there is a change in 
the proprietorship of a distilled spirits plant, the successor shall pay 
a new special tax and obtain the required special tax stamps.
    (2) Exemption for certain successors. Persons having the right of 
succession provided for in paragraph (c) of this section may carry on 
the business for the remainder of the period for which the special tax 
was paid, without paying a new special tax, if within 30 days after the 
date on which the successor begins to carry on the business, the 
successor files a special tax return on ATF Form 5630.5 with ATF, which 
shows the basis of succession. A person who is a successor to a business 
for which special tax has been paid and who fails to register the 
succession is liable for special tax computed from the first day of the 
calendar month in which he or she began to carry on the business.
    (c) Persons having right of succession. Under the conditions 
indicated in paragraph (b)(2) of this section, the right of succession 
will pass to certain persons in the following cases:
    (1) Death. The widowed spouse or child, or executor, administrator, 
or other legal representative of the taxpayer;
    (2) Succession of spouse. A husband or wife succeeding to the 
business of his or her spouse (living);
    (3) Insolvency. A receiver or trustee in bankruptcy, or an assignee 
for benefit of creditors;
    (4) Withdrawal from firm. The partner or partners remaining after 
death or withdrawal of a member.
    (d) Change in location. If there is a change in location of a 
taxable place of business, the proprietor shall, within 30 days after 
the change, file with ATF an amended special tax return covering the new 
location. The proprietor shall attach the special tax stamp or stamps, 
for endorsement of the change in location. No new special tax is 
required to be paid. However, if the proprietor does not file the 
amended return within 30 days, the proprietor is required to pay

[[Page 307]]

a new special tax and obtain a new special tax stamp.

(26 U.S.C. 5143, 7011)



         Subpart D--Administrative and Miscellaneous Provisions

                   Activities Not Subject to This Part



Sec. 19.57  Recovery and reuse of denatured spirits in manufacturing processes.

    The following persons are not, by reason of the activities listed 
below, subject to the provisions of this part, but they shall comply 
with the provisions of part 20 of this chapter relating to the use and 
recovery of spirits or denatured spirits:
    (a) Manufacturers who use denatured spirits, or articles or 
substances containing denatured spirits, in a process wherein any part 
or all of the spirits, including denatured spirits, are recovered.
    (b) Manufacturers who use denatured spirits in the production of 
chemicals which do not contain spirits but which are used on the permit 
premises in the manufacture of other chemicals resulting in spirits as a 
by-product.
    (c) Manufacturers who use chemicals or substances which do not 
contain spirits or denatured spirits (but which were manufactured with 
specially denatured spirits) in a process resulting in spirits as a by-
product.

(Sec 201, Pub. L. 85-859, 72 Stat. 1372, as amended (26 U.S.C. 5273))

[T.D. ATF-379, 61 FR 31425, June 20, 1996]



Sec. 19.58  Use of taxpaid distilled spirits to manufacture products unfit for beverage use.

    (a) General. Apothecaries, pharmacists, and manufacturers are not 
required to qualify as processors under 26 U.S.C. 5171 before 
manufacturing or compounding the following products, if the tax has been 
paid or determined on all of the distilled spirits contained therein:
    (1) Medicines, medicinal preparations, food products, flavors, 
flavoring extracts, and perfume, conforming to the standards for 
approval of nonbeverage drawback products found in Secs. 17.131-17.137 
of this chapter, whether or not drawback is actually claimed on those 
products. Except as provided in paragraph (c) of this section, a formula 
need not be submitted if drawback is not desired.
    (2) Patented, patent, and proprietary medicines that are unfit for 
use for beverage purposes.
    (3) Toilet, medicinal, and antiseptic preparations and solutions 
that are unfit for use for beverage purposes.
    (4) Laboratory reagents, stains, and dyes that are unfit for use for 
beverage purposes.
    (5) Flavoring extracts, syrups, and concentrates that are unfit for 
use for beverage purposes.
    (b) Exceptions; products classed as beverages. Products specified 
under part 17 of this chapter as being fit for beverage use are 
alcoholic beverages. Bitters, patent medicines, and similar alcoholic 
preparations which are fit for beverage purposes, although held out as 
having certain medicinal properties, are also alcoholic beverages. Such 
products are required to be manufactured on the bonded premises of a 
distilled spirits plant, and are subject to the provisions of this part.
    (c) Formulas and samples; when required. On request of the Director, 
or when in doubt as to the classification of a product, the manufacturer 
shall submit to the Director the formula for and a sample of the product 
for examination to verify the manufacturer's claim of exemption from 
qualification requirements.
    (d) Change of formula; when required. If the regional director 
(compliance) finds at any time that any product manufactured under 
paragraph (a) of this section is being used for beverage purposes, or 
for mixing with beverage spirits other than by a processor, he or she 
shall notify the manufacturer to desist from manufacturing the product 
until the formula is changed to make the product not susceptible of 
beverage use and the change is approved by the Director. (However, the 
provisions of this paragraph shall not prohibit such products, which are 
unfit for beverage use, from being used in small quantities for 
flavoring drinks at the time of serving for immediate consumption.) 
Where, pursuant to notice, the manufacturer does not desist, or the 
formula

[[Page 308]]

is not so modified as to make the product unsusceptible of beverage use, 
the manufacturer shall immediately qualify as a processor.

(Sec. 805, Pub. L. 96-39, 93 Stat. 275, 278 (26 U.S.C. 5002, 5171))

[T.D. ATF-379, 61 FR 31425, June 20, 1996]

                       Authorities of the Director



Sec. 19.61  Form prescribed.

    (a) The Director is authorized to prescribe all forms required by 
this part. All of the information required by each form shall be 
furnished, as indicated by the headings on the form and the instructions 
thereon or issued in respect thereto, and as required by this part.
    (b) Requests for forms should be mailed to the ATF Distribution 
Center, 7943 Angus Court, Springfield, Virginia 22153.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. 372, 61 FR 
20724, May 8, 1996]



Sec. 19.62  Alternate methods or procedures.

    The proprietor, on specific approval by the Director as provided in 
this paragraph, may use an alternate method or procedure in lieu of a 
method or procedure specifically prescribed in this part. The Director 
may approve an alternate method or procedure, subject to stated 
conditions, when he finds that--
    (a) Good cause has been shown for the use of the alternate method or 
procedure;
    (b) The alternate method or procedure is within the purpose of, and 
consistent with the effect intended by, the specifically prescibed 
method or procedure, and affords equivalent security to the revenue; and
    (c) The alternate method or procedure will not be contrary to any 
provision of law, and will not result in an increase in cost to the 
Government or hinder the effective administration of this part. No 
alternate method or procedure relating to the giving of any bond or to 
the assessment, payment, or collection of tax, shall be authorized under 
this paragraph. Where the proprietor desires to employ an alternate 
method or procedure, he shall submit a written application to do so to 
the regional director (compliance), for transmittal to the Director. The 
application shall specifically describe the proposed alternate method or 
procedure, and shall set forth the reasons therefor. Alternate methods 
or procedures shall not be employed until the application has been 
approved by the Director. The proprietor shall, during the period of 
authorization of an alternate method or procedure, comply with the terms 
of the approved application. Authorization for any alternate method or 
procedure may be withdrawn whenever in the judgment of the Director the 
revenue is jeopardized or the effective administration of this part is 
hindered by the continuation of such authorization. As used in this 
paragraph, alternate methods or procedures shall include alternate 
construction or equipment.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended, 1395, as amended 
(26 U.S.C. 5178, 5552))



Sec. 19.63  Pilot operations.

    The Director may waive any regulatory provisions of 26 U.S.C. 
Chapter 51, and of the regulations in this part, for temporary pilot or 
experimental operations for the purpose of facilitating the development 
and testing of improved methods of governmental supervision (necessary 
for the protection of the revenue) over plants. For this purpose, the 
Director may, with the approval of the proprietor thereof, designate any 
plant for such operations. The provision of law and regulations waived 
and the period of time during which such waiver shall continue shall be 
stated in writing by the Director. The provisions of this section shall 
not be construed as authority to waive the filing of any bond or the 
payment of any tax, including special (occupational) tax, provided for 
in 26 U.S.C. Chapter 51.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 U.S.C. 5554))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-271 53 
FR 17543, May 17, 1988]

[[Page 309]]



Sec. 19.64  [Reserved]



Sec. 19.65  Experimental distilled spirits plants.

    The Director may authorize the establishment and operation of 
experimental plants for specific and limited periods of time solely for 
experimentation in, or development of--
    (a) Sources of materials from which spirits may be produced;
    (b) Processes by which spirits may be produced or refined; or
    (c) Industrial uses of spirits.

The Director may waive any provision of 26 U.S.C. Chapter 51 (other than 
26 U.S.C. 5312) and of this part (other than this section and 
Sec. 19.66) to the extent he deems necessary to effectuate the purposes 
of 26 U.S.C. 5312(b), except that he may not waive the payment of any 
tax on spirits removed from such plant. A proprietor of an experimental 
distilled spirits plant established under this section is subject to 
special (occupational) tax under subpart Ca of this part and shall hold 
a separate special tax stamp to cover the experimental operations.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1375, as amended (26 U.S.C. 5312))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-271 53 
FR 17543, May 17, 1988]



Sec. 19.66  Application to establish experimental plants.

    Any person desiring to establish an experimental plant shall make 
written application to the Director, through the regional director 
(compliance), and obtain the Director's approval of the proposed 
establishment. The applicant shall file with such application a bond in 
such form and penal sum as required by the Director. The application 
shall state the nature, extent, and purpose of the operations to be 
conducted and describe the operations and equipment, the location of the 
plant (including the proximity to other premises or operations subject 
to the provisions of 26 U.S.C. Chapter 51) and the security measures to 
be provided. The Director may require the submission of additional 
information as he deems necessary. The regional director (compliance) 
shall not permit operations until he has found that the plant conforms 
to the specifications set forth in the application, as approved, and the 
applicant has complied with provisions of 26 U.S.C. Chapter 51, and this 
part not specifically waived by the Director.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1375, as amended (26 U.S.C. 5312))



Sec. 19.67  Spirits produced in industrial processes.

    (a) Applicability. (1) Persons who produce spirits in industrial 
processes (including spirits produced as a by-product in connection with 
chemical or other processes) are distillers and are required to qualify 
and pay special (occupational) tax under provisions of 26 U.S.C. Chapter 
51 and this part.
    (2) The Director may, however, waive any provision of 26 U.S.C. 
Chapter 51, or of this part, with respect to the production of 
nonpotable chemical mixtures containing spirits, including any provision 
relating to qualification (except the payment of special (occupational) 
tax), if such mixtures are produced:
    (i) For transfer to the bonded premises of a distilled spirits plant 
for completion of distilling; or
    (ii) As a by-product which would require expensive and complex 
equipment for the recovery of spirits.
    (3) The waiver under the provisions of paragraph (a)(2)(ii) of this 
section is further conditioned that such mixture would:
    (i) Be destroyed on the premises where produced; or
    (ii) Contain a minimum quantity of spirits practicable with the 
procedure employed, not be subjected to further operations solely for 
the purification or recovery of spirits, and be found by the Director to 
be as nonpotable and at least as difficult with respect to recovery as 
completely denatured alcohol.
    (b) Application for waiver. (1) When the producer of nonpotable 
mixtures desires to secure a waiver of designated provisions of 26 
U.S.C. Chapter 51, or this part, he shall file an application with the 
Director through the regional director (compliance).
    (2) The application shall include, as applicable--
    (i) Name and address of producer;
    (ii) Chemical composition and source of the nonpotable mixture;

[[Page 310]]

    (iii) Approximate percentages of chemicals and spirits in the 
mixture;
    (iv) Method of operation proposed;
    (v) Bonded premises where the mixture will be distilled; and
    (vi) Other pertinent information required by the Director.
    (c) Approval. If the Director finds that the waiver of the 
requirements, or any of them, will not jeopardize the revenue and will 
not unduly hinder supervision of the operations, he may approve the 
application under such terms and conditions as he deems advisable and 
subject to the furnishing of any bond which he deems necessary.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-271 53 
FR 17543, May 17, 1988]



Sec. 19.68  Other businesses.

    The Director may authorize the carrying on of other businesses (not 
specifically prohibited by 26 U.S.C. 5601(a)(6)) on premises of plants 
if he finds that those businesses will not jeopardize the revenue, 
hinder the effective administration of this part, or be contrary to law. 
The authorization will designate the premises (i.e., bonded or general) 
on which such other business is to be conducted.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))



Sec. 19.70  Exemptions to meet the requirements of National defense.

    The Director may temporarily exempt proprietors from any provision 
of the internal revenue laws or this part relating to spirits except 
those requiring payment of tax thereon whenever in his judgement it is 
expedient to do so to meet the requirements of the National defense.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1397, as amended (26 U.S.C. 5561))



Sec. 19.71  Experimental or research operations by scientific institutions and colleges of learning.

    (a) General. The Director may authorize any scientific university, 
college of learning, or institution of scientific research to produce, 
receive, blend, treat, test, and store spirits, without payment of tax, 
for experimental or research use but not for consumption (other than 
organoleptic tests) or sale, in quantities as may be reasonably 
necessary for such purposes. The Director may waive any provision of 26 
U.S.C. Chapter 51 (other than 26 U.S.C. 5312), or this part (other than 
this section) to the extent necessary to effect the purposes of 26 
U.S.C. 5312(a), except he may not waive the payment of any tax on 
distilled spirits removed from any university, college, or institution. 
A person conducting experimental or research operations authorized under 
this section is subject to special (occupational) tax under subpart Ca 
of this part and shall hold a special tax stamp to cover the 
experimental or research operations.
    (b) Qualification. Any university, college, or institution desiring 
to conduct any of the experimental or research operations listed in the 
preceding paragraphs shall make written application, to the Director, 
through the regional director (compliance), and obtain the Director's 
approval of the proposed operations. The applicant shall file with the 
application a bond in a form and penal sum as required by the Director. 
The application shall state the nature, extent, and purpose of the 
operations to be conducted and describe the operations and equipment, 
the location at which operations will be conducted (including 
identification of the building or buildings, or the portions thereof to 
be used), and the security measures to be provided. The Director may 
require any additional information. Operations shall not be commenced 
until authorized by the Director.
    (c) Records. Reports concerning the operations need not be submitted 
unless required by the Director, but records of the quantities of 
spirits produced, received, and used each day shall be made and retained 
for inspection by ATF officers.
    (d) Discontinuance of operations. When operations authorized by the 
Director are discontinued, all remaining spirits shall be disposed of by 
destruction. When these spirits have been destroyed, notice of the 
discontinuance of

[[Page 311]]

operations shall be given to the regional director (compliance).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1375, as amended (26 U.S.C. 5312))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-271, 53 
FR 17543, May 17, 1988]

            Authorities of the Regional Director (Compliance)



Sec. 19.72  Other businesses.

    Application to conduct at a distilled spirits plant a type of 
business other than that of a distiller, warehouseman, or processor may 
be approved by the regional director (compliance) if the Director has, 
as provided in Sec. 19.68, authorized the carrying on of a business of 
the type proposed, unless the regional director (compliance) finds that 
there are particular conditions in respect to the applicant's plant that 
would cause the carrying on of such business to be a jeopardy to the 
revenue or a hindrance to the effective administration of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))



Sec. 19.73  Emergency variations from requirements.

    The regional director (compliance) may approve construction, 
equipment, and methods of operation other than as specified in this 
part, where he finds that an emergency exists and the proposed 
variations from the specified requirements are necessary, and the 
proposed variations--
    (a) Will afford the security and protection to the revenue intended 
by the prescribed specifications;
    (b) Will not hinder the effective administration of this part; and
    (c) Will not be contrary to any provisions of law.

Variations from requirements granted under this paragraph are 
conditioned on compliance with the procedures, conditions, and 
limitations with respect thereto set forth in the approval of the 
application. Failure to comply in good faith with such procedures, 
conditions, and limitations shall automatically terminate the authority 
for such variations and the proprietor thereupon shall fully comply with 
the prescribed requirements of regulations from which the variations 
were authorized. Authority for any variation may be withdrawn whenever 
in the judgement of the regional director (compliance) the revenue is 
jeopardized or the effective administration of this part is hindered by 
the continuation of such variation. Where the proprietor desires to 
employ such variation, he shall submit a written application to do so to 
the regional director (compliance). The application shall describe the 
proposed variations and set forth the reasons therefor. Variations shall 
not be employed until the application has been approved.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended, 1395, as amended 
(26 U.S.C. 5178, 5552))



Sec. 19.74  Disaster exemptions.

    The regional director (compliance) may, whenever he finds that it is 
necessary or desirable, by reason of disaster, temporarily exempt the 
proprietor of any plant from any provisions of the internal revenue laws 
and this part relating to spirits, except those requiring the payment of 
tax on spirits, to the extent he may deem necessary or desirable.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1397, as amended (26 U.S.C. 5562))



Sec. 19.75  Assignment of officers and supervision of operations.

    (a) General. The regional director (compliance) may assign such 
number of ATF officers to distilled spirits plants and utilize controls 
(including the use of Government locks and seals) as necessary to 
maintain supervision of operations conducted at such plants. When 
supervision is necessary:
    (1) The regional director (compliance) may require a proprietor to 
delay any distilled spirits operation so that it may be conducted in the 
presence of an ATF officer; and
    (2) The regional director (compliance) may require the proprietor to 
submit a schedule of operations to an ATF officer.
    (b) Hours of operation. When operations at a distilled spirits plant 
are to be conducted in the presence of an ATF officer, such operations: 
(1) Shall not

[[Page 312]]

be conducted on Sunday unless specifically authorized by the regional 
director (compliance) in each instance on the showing of an emergency; 
and (2) Shall be conducted during an 8-hour period between 7 a.m. and 5 
p.m. unless, pursuant to the proprietor's application the regional 
director (compliance) authorizes the performance and supervision of 
operations during other hours. The regional director (compliance), in 
administering this provision, shall not restrict such operation or 
function to a greater extent than did the provisions of internal revenue 
law and regulations on June 30, 1959.
    (c) Notification of supervision. (1) When it is determined that 
supervision of plant operations is necessary, the regional director 
(compliance) shall notify the proprietor of the extent of ATF 
supervision.
    (2) If supervision of a distilled spirits plant was not terminated 
as of December 31, 1979, notification is not necessary for continued 
supervision.
    (d) Withdrawal of supervision. The regional director (compliance) 
shall notify the proprietor when ATF supervision of plant operations is 
to be withdrawn.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 U.S.C. 5553); 
sec. 806, Pub. L. 96-39, 93 Stat. 279 (26 U.S.C. 5201, 5202))



Sec. 19.76  Allowance of remission, abatement, credit or refund of tax.

    The regional director (compliance) is authorized to allow claims for 
remission, abatement, credit, and refund of tax, filed under the 
provisions of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended (26 U.S.C. 5008))



Sec. 19.77  Installation of meters, tanks and other apparatus.

    The regional director (compliance) is authorized to require the 
proprietor to install meters, tanks, pipes, or any other apparatus which 
the regional director (compliance) deems advisable for the purpose of 
protecting the revenue. Any proprietor refusing or neglecting to install 
such apparatus when so required shall not be permitted to conduct 
business.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 U.S.C. 5552))



Sec. 19.78  Approval of qualifying documents.

    The regional director (compliance) is authorized to approve, except 
as otherwise provided in this part, all qualifying documents, including 
bonds and consents of surety, required by this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1394, as amended 
(26 U.S.C. 5172, 5551); sec. 805, Pub. L. 96-39, 93 Stat. 275, 276 (26 
U.S.C. 5171, 5173))



Sec. 19.79  Discontinuance of storage facilities.

    When the regional director (compliance) finds that any facilities 
for the storage of spirits on bonded premises are unsafe or unfit for 
use, or that spirits stored are subject to great loss or wastage, he may 
require the discontinuance of the use of such facilities and require the 
spirits contained therein to be transferred to such other storage 
facilities as he may designate. Such transfer shall be made at such time 
and under such supervision as the regional director (compliance) may 
require and the expense of the transfer shall be paid by the owner or 
the warehouseman of the spirits. Whenever the owner of such spirits or 
the warehouseman fails to make such transfer within the time prescribed 
or to pay the just and proper expense of such transfer, as ascertained 
and determined by the regional director (compliance), such spirits may 
be seized and sold in the same manner as goods sold on distraint for 
taxes, and the proceeds of such sale shall be applied to the payment of 
the taxes due thereon and the cost and expense of such sale and removal, 
and the balance shall be paid over to the owner of such spirits.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1369, as amended (26 U.S.C. 5236))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]

[[Page 313]]

                       Authorities of ATF Officers



Sec. 19.81  Right of entry and examination.

    Any ATF officer may at all times, as well by night as by day, enter 
any distilled spirits plant, or any other premises where distilled 
spirits operations are carried on, or structure or place used in 
connection therewith for storage or other purposes; to make examination 
of the materials, equipment, and facilities thereon; and make such 
gauges and inventories as he deems necessary. Whenever any ATF officer, 
having demanded admittance, and having declared his name and office, is 
not admitted into such premises by the proprietor or other person having 
charge thereof, he may at all times, use such force as is necessary for 
him to gain entry to such premises.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1357, as amended (26 U.S.C. 5203))



Sec. 19.82  Detention of containers.

    Any ATF officer may detain any container containing, or supposed to 
contain, spirits when such officer has reason to believe that the tax 
imposed by law on such spirits has not been paid or determined as 
required by law or this part, or that such container is being removed in 
violation of law or this part. Every such container may be held by the 
ATF officer at a safe place until it shall be determined whether the 
property so detained is liable by law to be proceeded against for 
forfeiture. However, such summary detention shall not continue in any 
case longer than 72 hours without process of law or intervention of the 
regional director (compliance), unless the person in possession of the 
container immediately prior to its detention, in consideration of the 
container being kept on his premises during detention, executes a waiver 
of the 72-hours limitation on detention of the container.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1375 (26 U.S.C. 5311))



Sec. 19.83  Samples for the United States.

    Any ATF officer is authorized to take samples of spirits, denatured 
spirits, articles, wines, or any other materials which may be added to 
such products for analysis, testing, or other determinations to 
ascertain whether there is compliance with the provisions of law and 
regulations. When such samples are removed from the bonded premises, the 
ATF officer shall give the proprietor a receipt covering the sample so 
removed.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended, 1357, as amended, 
1362, as amended, 1380, as amended (26 U.S.C. 5201, 5203, 5214, 5362))



Sec. 19.84  Gauging and measuring equipment.

    All gauging and measuring equipment and means required by 27 CFR 
part 30 and this part to be furnished by the proprietor for the purpose 
of ascertaining the quantity, alcoholic content, specific gravity, and 
producing capacity of any materials, denaturants, mash, wort, or beer, 
or the quantity and alcoholic content of spirits, denatured spirits, or 
wines, shall be maintained by the proprietor in accurate and readily 
usable condition. Any ATF officer may disapprove the use of any 
equipment or means if such officer finds it would be insufficiently 
accurate and the proprietor shall promptly provide accurate equipment or 
means in lieu of the disapproved equipment or means.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1320, as amended, 1358, as amended 
(26 U.S.C. 5006, 5204))

                    Entry and Examination of Premises



Sec. 19.86  Furnishing facilities and assistance.

    On the demand of any ATF officer or agent, the proprietor shall 
furnish the necessary facilities and assistance to enable the officer or 
agent to gauge the spirits in any container or to examine any apparatus, 
equipment, containers, or materials on the distilled spirits plant 
premises. The proprietor shall also, on demand of an ATF officer or 
agent, open all doors, and open for examination all containers on the 
plant premises. The proprietor shall, on request of an ATF officer, 
furnish the exact locations (including the number of containers at each 
location) of all packages and similar portable approved containers 
within a given lot,

[[Page 314]]

and locations (i.e., buildings, rooms or areas) where spirits in cases 
are stored.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1357, as amended (26 U.S.C. 5203); 
sec. 806, Pub. L. 96-39, 93 Stat. 279 (26 U.S.C. 5202))

       Gauging of Spirits, Wines or Alcoholic Flavoring Materials



Sec. 19.91  Gauging.

    (a) Gauging of spirits and wine. Gauges shall be made by the 
proprietor. However, the regional director (compliance) may require that 
such gauges be made in the presence of and be verified by an ATF 
officer. Gauges of spirits, denatured spirits, or wine shall be made in 
accordance with 27 CFR part 30 and as provided in this part. However, 
the gauge for wine that is to be transferred to a bonded wine cellar 
shall be recorded by kind and percent of alcohol by volume. When bulk 
spirits, denatured spirits, or wines are to be volumetrically measured, 
the measurement shall be in a tank or bulk conveyance for which a 
calibration chart is provided, by a meter approved under Sec. 19.277, 
or, when approved by the Director, by other devices or methods. 
Calibration charts shall be certified as accurate by persons qualified 
to calibrate tanks or bulk conveyances. When spirits in bottles are 
gauged, the gauge may be established on the basis of legible case 
markings and label information, if (1) the bottles are full, and (2) 
there is no evidence that the bottles have been tampered with.
    (b) Gauging of alcoholic flavoring materials. Each alcoholic 
flavoring material shall be gauged when dumped, except that when 
received from a manufacturer in a closed nonporous bottle, can, or 
package such material may be gauged by using the proof derived from the 
container label or a related statement of the proof from the 
manufacturer. When proof is determined from a label or manufacturer's 
statement, the proprietor shall periodically test a sufficient number of 
samples of the alcoholic flavoring material to verify the accuracy of 
the proof so determined and shall record the results of those tests on 
the gauge record. The regional director (compliance) may require that 
all alcoholic flavoring materials be gauged by the methods provided in 
27 CFR part 30.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1396, as amended 
(26 U.S.C. 5204, 5559))



Sec. 19.92  When gauges are required.

    (a) Initial proof. Except for a gauge required by Sec. 19.383 or 
Sec. 19.517 or in any case where the proof changes as a result of a 
storage or processing operation, the initial determination of proof for 
distilled spirits, wine, or eligible flavors may be used whenever a 
subsequent gauge is required by this part to be made at the same plant.
    (b) Required gauges. Spirits, wine and alcoholic flavoring materials 
shall be gauged whenever required by this part. Such gauges include:
    (1) Entered for deposit,
    (2) Filled into packages from storage tanks,
    (3) Transferred or received in bond,
    (4) Transferred between operational accounts,
    (5) Mixed in the manufacture of a distilled spirits product,
    (6) Reduced in proof prior to commencement of bottling,
    (7) Destroyed,
    (8) Removed or withdrawn from bond,
    (9) Returned to bond, or
    (10) As otherwise required by the regional director (compliance).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1396, as amended 
(26 U.S.C. 5204, 5559))

[T.D. ATF-199, 50 FR 9160, Mar. 6, 1985, as amended by T.D. ATF-297, 55 
FR 18063, Apr. 30, 1990]



Sec. 19.93  Quantity determination of spirits in bond.

    Where bulk spirits in bond are gauged for determination of tax, or 
are gauged in packages, the quantity shall be determined by weight 
pursuant to the provisions of 27 CFR part 30. In all other instances 
where spirits are gauged in bond, gauged for denaturation, or are gauged 
for transfer in bond or for withdrawal from bond free of tax or without 
payment of tax, the quantity may be determined by weight or volume. 
Volumetric determinations of

[[Page 315]]

quantity may be made by meters approved under Sec. 19.277.

(Sec, 201, Pub. L. 85-859, 72 Stat. 1396, as amended (26 U.S.C. 5559))

          Securing of Conveyances Used for Transporting Spirits



Sec. 19.96  Securing of conveyances.

    (a) Construction for securing. If a conveyance is required by this 
part to be secured, the conveyance shall be constructed in such manner 
that all openings, including valves (if any) on bulk conveyances, may be 
closed and secured.
    (b) Approval of securing devices. (1) All seals, locks, or other 
devices that are required to be used on conveyances in which spirits are 
transferred in bond, or withdrawn free of tax or without payment of tax, 
shall be approved by the Director prior to use. However, cap seals, at 
least \3/4\ of an inch in diameter, and ball-strap-type (railroad) seals 
with a strap at least \5/16\ of an inch wide may be used on conveyances 
without prior approval of the Director. Such seals shall:
    (i) Be made of durable materials,
    (ii) Bear the plant registration number or name, or readily 
recognizable abbreviation of the name of the proprietor,
    (iii) Bear a serial number including letter prefixes or suffixes, 
that will not be repeated within a six month period,
    (iv) Be durably marked in readily legible form, and
    (v) Be made so that their being opened will leave evidence thereof.
    (2) Seals, locks or other devices that are used on conveyances to 
transport taxpaid spirits, or denatured spirits transferred in bond or 
withdrawn free of tax, need not be approved.
    (c) Furnishing and affixing securing devices. (1) Seals, locks, or 
other devices for use on conveyances shall be furnished and affixed by 
the proprietor.
    (2) The regional director (compliance) may, if he deems necessary, 
require conveyances in which spirits are: (i) transferred in bond, (ii) 
withdrawn free of tax, or (iii) withdrawn without payment of tax, to be 
secured by seals, locks, or other devices approved and furnished by the 
Bureau and affixed by an ATF officer.
    (3) Seals, locks, or other devices shall be affixed:
    (i) As soon as the conveyance is loaded for shipment, and
    (ii) In such a manner that access to the contents of the conveyance 
cannot be gained without showing evidence of tampering.
    (4) The openings of bulk conveyances may be secured with permanent 
seals, locks, or other devices.
    (d) Numbers and marks on proprietor's securing devices. Seals, 
locks, or other devices that are furnished by the proprietor for use on 
conveyances shall be serially numbered. Letter abbreviations of the name 
of a proprietor may not be used unless approved by the Director pursuant 
to written application.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended 1410, as amended 
(26 U.S.C. 5206, 5682))

            Conveyance of Spirits or Wines on Plant Premises



Sec. 19.97  Taxpaid spirits or wines on bonded premises.

    Spirits or wines on which the tax has been paid or determined may be 
conveyed within a plant across bonded premises, but such spirits or 
wines shall not be stored or allowed to remain on the bonded premises 
and shall be kept separate and apart from spirits or wines on which the 
tax has not been paid or determined. However, spirits returned to bonded 
premises in accordance with the provisions of 26 U.S.C. 5215 shall be 
allowed to remain on the bonded premises.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1404, as amended, 
(26 U.S.C. 5201, 5612))



Sec. 19.98  Conveyance of untaxpaid spirits or wines within a distilled spirits plant.

    Untaxpaid spirits or wines may be conveyed between different 
portions of the bonded premises of the same distilled spirits plant, 
across any other premises of such plant; or (by uninterrupted 
transportation) over any public thoroughfare; or (by uninterrupted 
transportation) over a private roadway if the owner, or lessee, of the 
roadway agrees, in writing, to allow ATF officers access to the roadway 
to perform

[[Page 316]]

their necessary duties. The conveyance of spirits or wines as authorized 
in this section is subject to the following conditions:
    (a) The spirits or wines are not stored or allowed to remain on any 
premises of such plant other than bonded premises,
    (b) The spirits or wines are kept completely separate and apart from 
spirits on which the tax has been paid or determined,
    (c) A description of the means and route of the conveyance and of 
the portions of the distilled spirits plant between which spirits or 
wines will be conveyed, and a copy of any agreement furnished by the 
owner, or lessee, of a private roadway have been submitted to and 
approved by the regional director (compliance), and
    (d) Consent of surety on the operations or unit bond has been 
furnished by the proprietor, on Form 1533, extending the terms of the 
bond to cover conveyance of the spirits or wines.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1398, as amended 
(26 U.S.C. 5201, 5601))



Sec. 19.99  Spirits in customs custody.

    Spirits in customs custody may be conveyed, when necessary, across 
distilled spirits plant premises if:
    (a) The spirits are not stored or allowed to remain on the premises 
of the distilled spirits plant,
    (b) The spirits are kept separate and apart from other spirits on 
the premises and are moved expeditiously,
    (c) A description of the means and route of conveyance of the 
spirits across the plant premises has been submitted to and approved by 
the regional director (compliance), and
    (d) Consent of surety on the operations or unit bond has been 
furnished by the proprietor, on Form 1533, extending the terms of the 
bond to cover the conveyance of the spirits.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

                          Penalties of Perjury



Sec. 19.100  Execution under penalties of perjury.

    (a) Declaration. When a return, claim, form, or other document 
called for under this part, or in the instructions thereon, is required 
to be executed under penalties of perjury, it shall contain the 
following declaration:

    I declare under the penalties of perjury that this (insert type of 
document, such as report, or claim), including supporting documents, has 
been examined by me and, to the best of my knowledge and belief, is 
true, correct, and complete.

    (b) Signing. The declaration shall bear the signature and title of 
the proprietor or other duly authorized person.

(Act of August 16, 1954, Pub. L. 591--Chapter 736, 68A Stat. 749 (26 
U.S.C. 6065))

Subpart E [Reserved]



                       Subpart F--Location and Use



Sec. 19.131  Restrictions as to locations.

    Distilled spirits plants shall not be located in any dwelling house, 
or in any shed, yard, or enclosure connected with any dwelling house, or 
on board any vessel or boat, or on premises where beer or wine is 
produced, or liquors of any description are retailed, or (except as 
provided in Sec. 19.133) on premises where any other business is 
conducted.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))



Sec. 19.132  Continuity of premises.

    The continuity of the distilled spirits plant shall be unbroken 
except for separations by public waterways, thoroughfares, or carrier 
rights-of-way. However, where there are other separations of the plant 
premises and all parts of the plant premises are in the same general 
location, the Director may approve the registration of the distilled 
spirits plant if he finds no jeopardy to the revenue.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))



Sec. 19.133  Use of distilled spirits plant premises.

    (a) General. No business or operation shall be conducted on the 
premises of a distilled spirits plant other than those authorized in 
accordance with subpart D of this part or those authorized to be

[[Page 317]]

carried on or conducted by the notice of registration.
    (b) Bonded premises. Bonded premises shall be used exclusively for 
distilled spirits operations. Spirits in packages, cases, or other 
portable containers on bonded premises shall be stored in a room or 
building. However, upon application by the proprietor, the regional 
director (compliance) may approve an alternative method of storage of 
such spirits if such method is suitable for the protection of the 
revenue and the effective administration of this part.
    (c) General premises. General premises are any portion of the 
distilled spirits plant described in the notice of registration other 
than bonded premises. General premises may not be used for any of the 
operations required to be conducted on bonded premises. Business offices 
and service facilities may be included as a part of general premises.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))



Sec. 19.134  Bonded warehouses not on premises qualified for production of spirits.

    (a) Criteria for establishment. (1) A bonded warehouse, other than 
one established on the bonded premises of a distilled spirits plant 
qualified for production of spirits, or contiguous to a distillery 
operated by the warehouseman, may be established if the need therefor is 
clearly shown and the prospective needs of the warehouseman will be for 
the bonded storage of not less than 250,000 wine gallons of bulk 
distilled spirits.
    (2) When commercial bonded warehouses are not available in an area 
and it is impractical to have a warehouse of 250,000 wine gallon 
capacity, the regional director (compliance) may approve the 
establishment of a warehouse without regard to the minimum storage 
requirements.
    (b) Application. (1) The application for registration to establish a 
warehouse shall be accompanied by a separate written application setting 
forth the necessity for the establishment of the warehouse.
    (2) The application shall include:
    (i) Approximate quantity of bulk spirits that will be received, 
stored, and withdrawn annually;
    (ii) Probable number of depositors of spirits;
    (iii) Approximate number of persons to be served from the warehouse; 
and
    (iv) Data or documents indicating the prospective volume of business 
or need for establishment.
    (c) Approval. (1) The regional director (compliance) may approve the 
application for registration if the proposed location of the warehouse 
will not be a jeopardy to the revenue and there is satisfactory evidence 
of the need for establishing a warehouse.
    (2) The regional director (compliance) may also limit the type of 
operation to be conducted at a bonded warehouse established with less 
than the minimum storage requirements.
    (d) Special condition. The proprietor of a warehouse established for 
a limited type of operation shall not, in any manner, expand or change 
his operation to include any other type of operations until, pursuant to 
written application to make such change, he has obtained the approval of 
the regional director (compliance).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178); 
sec. 805a, Pub. L. 96-39, 93 Stat. 275 (26 U.S.C. 5171))



          Subpart G--Qualification of Distilled Spirits Plants



Sec. 19.151  General requirements for registration.

    (a) Operations. Except as otherwise provided by law, operations as a 
distiller, warehouseman, or processor may be conducted only on the 
bonded premises of a distilled spirits plant by a person qualified to 
carry out such operations under this subpart.
    (b) Establishment. A distilled spirits plant may be established only 
by a person who intends to conduct at such plant operations as a 
distiller, as a warehouseman, or as both.
    (c) Registration. Each person shall, before commencing operations at 
a distilled spirits plant, make application for and receive notice of 
registration of his plant with respect to such operations as provided in 
this part. Application for registration shall be made

[[Page 318]]

on Form 5110.41 to the regional director (compliance). Each application 
shall be executed under penalties of perjury, and all written 
statements, affidavits, and other documents submitted in support of the 
application or incorporated by reference shall be deemed to be a part 
thereof. The regional director (compliance) may, in any instance where 
the outstanding notice of registration is inadequate or incorrect in any 
respect, require the filing of an application on Form 5110.41 to amend 
the notice of registration, specifying the respects in which amendment 
is required. Within 60 days after the receipt of such notice, the 
proprietor shall file such application.

(Sec. 201. Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172); 
sec. 805(a), Pub. L. 96-39, 93 Stat. 275 (26 U.S.C. 5171))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]



Sec. 19.152  Data for application for registration.

    Application on Form 5110.41 shall include the following information:
    (a) Serial number and statement of purpose for which filed.
    (b) Name and principal business address of the applicant, and the 
location of the distilled spirits plant if different from the business 
address.
    (c) Statement of the type of business organization and of the 
persons interested in the business, supported by the items of 
information listed in Sec. 19.167.
    (d) Statement of the operations to be conducted.
    (e) In respect of the plant to which the Form 5110.41 relates, a 
list of applicant's operating and basic permits, and of the operations, 
withdrawal, or unit bonds (including those filed with the application) 
with the name of the surety or sureties for each bond.
    (f) List of the offices, the incumbents of which are authorized by 
the articles of incorporation or the board of directors to act on behalf 
of the proprietor or to sign the proprietor's name.
    (g) Description of the plant (see Sec. 19.168).
    (h) List of major equipment (see Sec. 19.166).
    (i) Statement of maximum proof gallons that will be produced in the 
distillery during a period of 15 days, stored on bonded premises, and in 
transit to the bonded premises. (Not required if the operations or unit 
bond is in the maximum sum.)
    (j) With respect to any distilled spirits plant which was not 
qualified to operate before June 1, 1985 a certified statement that 
relevant and material accounting records (including regular books of 
account and such other records and data as may be necessary to support 
such records) will be maintained in accordance with generally accepted 
accounting principles which enable the proprietor to file a correct 
distilled spirits tax return or determine whether he is liable for 
distilled spirits taxes.
    (k) Statement of physical security measures employed (see 
Sec. 19.153).
    (l) As applicable, the following:
    (1) With respect to the operations of a distiller:
    (i) Statement of daily producing capacity in proof gallons.
    (ii) Statement of production procedure (see Sec. 19.170).
    (iii) Statement whether spirits will be redistilled.
    (2) With respect to the operations of a warehouseman:
    (i) Description of the system of storage.
    (ii) Statement of bulk storage capacity in wine gallons.
    (3) With respect to the operations of a processor:
    (i) Statement whether bottling operations will be conducted.
    (ii) Statement whether denaturing operations will be conducted.
    (iii) Statement whether articles will be manufactured.
    (iv) Statement whether spirits will be redistilled.
    (v) Description of the system of storage of spirits bottled and 
cased or otherwise packaged or placed in approved containers for removal 
from bonded premises.
    (4) If any other business is to be conducted on the distilled 
spirits plant premises, as provided by subpart D of this part, a 
description of the business, a list of the buildings and/or equipment to 
be used, and a statement as to the relationship, if any, of the business 
to distilled spirits operations at the plant.

[[Page 319]]


If any of the information required by paragraph (c) of this section is 
on file with the regional director (compliance), that information, if 
accurate and complete, may by incorporation by reference, be made part 
of the application. The applicant shall, when required by the regional 
director (compliance), furnish as a part of the application for 
registration, additional information as may be necessary to determine 
whether the application for registration should be approved.

(68 A Stat. 731, as amended (26 U.S.C. 6001); sec. 201, Pub. L. 85-859, 
72 Stat. 1349, as amended (26 U.S.C. 5172); sec. 805(a), Pub. L. 96-39, 
93 Stat. 275 (26 U.S.C. 5171))



Sec. 19.153  Statement of physical security.

    (a) Content. The statement of security shall include:
    (1) A general description of the physical security at the distilled 
spirits plant, including methods utilized to secure buildings and 
outdoor tanks;
    (2) A statement whether guard personnel are employed;
    (3) A statement whether any electronic or mechanical alarm system is 
used;
    (4) A statement certifying that locks used meet the specifications 
provided in paragraph (e) of Sec. 19.281;
    (5) A list of persons by position or title having responsibility for 
the custody of and access to keys for approved locks used at the 
distilled spirits plant.
    (b) Changes. The proprietor shall file an application for amended 
registration with the regional director (compliance) for any change in 
personnel or procedures contained in the statement of security.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172); 
sec. 805(a), Pub. L. 96-39, 93 Stat. 275 (26 U.S.C. 5171))



Sec. 19.154  Notice of registration.

    The application for registration, when approved, shall constitute 
the notice of registration of the distilled spirits plant. A distilled 
spirits plant shall not be registered or reregistered under this subpart 
until the applicant has complied with all requirements of law and 
regulations relating to the qualification of the business or operations 
in which the applicant intends to engage. A plant shall not be operated 
unless the proprietor has a valid notice of registration covering the 
businesses and operations to be conducted at such plant. In any instance 
where a bond is required to be given or a permit is required to be 
obtained with respect to a business or operation before notice of 
registration of the plant may be received with respect thereto, the 
notice of registration shall not be valid with respect to such business 
or operation in the event that such bond or permit is no longer in 
effect. An application for reregistration shall be filed and notice of 
registration again obtained before engaging in such business or 
operation at such plant. Reregistration is not required when a new bond 
or a strengthening bond is filed pursuant to Sec. 19.246 or 19.247.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172); 
sec. 805a, Pub. L. 96-39, 93 Stat. 275 (26 U.S.C. 5171))



Sec. 19.155  Maintenance of registration file.

    The proprietor shall maintain the registration file in looseleaf 
form in complete and current condition, readily available at the plant 
for inspection by ATF officers.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172))



Sec. 19.156  Powers of attorney.

    The proprietor shall execute and file with the regional director 
(compliance) a Form 1534 (5000.8) for each person authorized to sign or 
to act on behalf of the proprietor. (Not required for persons whose 
authority is furnished in the application for registration.)

(See 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172))



Sec. 19.157  Operating permits.

    (a) General. Except as provided in paragraph (b) of this section, 
each person required to file an application for registration under 
Sec. 19.151 shall make application for and obtain an operating permit 
before commencing any of the following operations:
    (1) Distilling for industrial use.
    (2) Warehousing of spirits for industrial use.
    (3) Denaturing spirits.

[[Page 320]]

    (4) Warehousing of spirits (without bottling) for nonindustrial use.
    (5) Bottling or packaging of spirits for industrial use.
    (6) Manufacturing articles.
    (7) Any other distilling, warehousing, or processing operation not 
required to be covered by a basic permit under the Federal Alcohol 
Administration Act (49 Stat. 978, 27 U.S.C. 203, 204). Application for 
such operating permit shall be made on Form 5110.25 to the regional 
director (compliance).
    (b) Exceptions. The provisions of paragraph (a) of this section 
shall not apply to any agency of a State or political subdivision 
thereof, or to any officer or employee of any such agency acting for the 
agency.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271); 
sec. 805(a), Pub. L. 96-39, 93 Stat. 275 (26 U.S.C. 5171))



Sec. 19.158  Data for application for operating permits.

    Each application on Form 5110.25 shall be executed under the 
penalties of perjury, and all written statements, affidavits, and other 
documents submitted in support of the application shall be deemed to be 
a part thereof. Applications on Form 5110.25 shall include the following 
information:
    (a) Name and principal business address of the applicant.
    (b) Plant address, if different from the business address.
    (c) Description of the operation to be conducted for which an 
operating permit must be obtained.
    (d) Statement of type of business organization and of the persons 
interested in the business, supported by the items of information listed 
in Sec. 19.167.
    (e) Trade names (see Sec. 19.165).
    (f) On specific request of the regional director (compliance), 
furnish a statement as to whether the applicant or any of the persons 
whose names and addresses are required to be furnished under the 
provisions of Sec. 19.167(a)(2) and (c) has ever: (1) Been convicted of 
a felony or misdemeanor under Federal or State law; (2) Been arrested or 
charged with any violation of State or Federal law (convictions or 
arrests or charges for traffic violations need not be reported as to 
paragraphs (f)(1) and (f)(2) of this section, if these violations are 
not felonies); or (3) Applied for, held, or been connected with a 
permit, issued under Federal law to manufacture, distribute, sell or use 
spirits or products containing spirits, whether or not for beverage use, 
or held any financial interest in any business covered by any such 
permit, and, if so, give the number and classification of the permit, 
the period of operation, and state in detail whether the permit was ever 
suspended, revoked, annulled, or otherwise terminated.

Where any of the information required by paragraph (d) or (f)(3) of this 
section is on file with the regional director (compliance), the 
applicant may, by incorporation or by reference, state that the 
information is made a part of the application for an operating permit. 
The applicant shall, when required by the regional director 
(compliance), furnish as a part of his application for an operating 
permit additional information as may be necessary for the regional 
director (compliance) to determine whether the applicant is entitled to 
the permit.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271); 
sec. 805(a), Pub. L. 96-39, 93 Stat. 275 (26 U.S.C. 5171))



Sec. 19.159  Issuance of operating permits.

    Only one operating permit will be issued for a plant. The operating 
permit shall designate the operations permitted. All of the provisions 
of this part relating to the performance of the operations covered by 
the permit shall be included in the provisions and conditions of the 
permit. Operating permits shall be kept posted available for inspection 
at the distilled spirits plant.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271); 
sec. 805(a), Pub. L. 96-39, 93 Stat. 275 (26 U.S.C. 5171))



Sec. 19.160  Duration of permits.

    Operating permits are continuing, unless automatically terminated by 
the terms thereof, suspended or revoked as provided in Sec. 19.163, or 
voluntarily surrendered. The provisions of Sec. 19.181 shall be a part 
of the terms and conditions of all operating permits issued under this 
part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))

[[Page 321]]



Sec. 19.161  Denial of permit.

    If, on examination of an application for an operating permit (or on 
the basis of inquiry or investigation), the regional director 
(compliance) has reason to believe that--
    (a) The applicant (including, in the case of a corporation, any 
officer, director, or principal stockholder, and, in the case of a 
partnership, a partner) is, by reason of his business experience, 
financial standing, or trade connections, not likely to maintain 
operations in compliance with 26 U.S.C. Chapter 51, or regulations 
issued thereunder; or
    (b) The applicant has failed to disclose any material information 
required, or has made any false statement, as to any material fact, in 
connection with the application; or
    (c) The premises on which the applicant proposes to conduct the 
operations are not adequate to protect the revenue; the regional 
director (compliance) may institute proceedings for the denial of the 
application in accordance with the procedures set forth in 27 CFR part 
71.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))



Sec. 19.162  Correction of permits.

    Where an error in an operating permit is discovered, the proprietor 
shall, on demand of the regional director (compliance), immediately 
return the permit for correction.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))



Sec. 19.163  Suspension or revocation.

    Whenever the regional director (compliance) has reason to believe 
that any person holding an operating permit--
    (a) Has not in good faith complied with the provisions of 26 U.S.C. 
Chapter 51, or regulations issued thereunder; or
    (b) Has violated conditions of the permit; or
    (c) Has made any false statement as to any material fact in the 
application therefor; or
    (d) Has failed to disclose any material information required to be 
furnished; or
    (e) Has violated or conspired to violate any law of the United 
States relating to intoxicating liquor or has been convicted of any 
offense under Title 26, U.S.C. punishable as a felony or of any 
conspiracy to commit such offense; or
    (f) Has not engaged in any of the operations authorized by the 
permit for a period of more than 2 years; the regional director 
(compliance) may institute proceedings for the revocation or suspension 
of the permit in accordance with the procedures set forth in 27 CFR part 
71.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))



Sec. 19.164  Rules of practice in permit proceedings.

    The regulations in 27 CFR part 71 are made applicable to the 
procedure and practice in connection with the disapproval of any 
application for an operating permit required by this subpart, and in 
connection with the suspension and revocation of such permit.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))



Sec. 19.165  Trade names.

    (a) Operating permits. Where a trade name is to be used in 
connection with the operations of a plant for which an operating permit 
is required, the proprietor shall list that trade name on Form 5110.25 
(showing the operations in which each trade name will be used) and the 
offices where the trade name is registered, supported by copies of any 
certificate or other document filed or issued in respect to the trade 
name.
    (b) Basic permits. Where any distilling, warehousing, or processing 
operation is required to be covered by a basic permit under the Federal 
Alcohol Administration Act (49 Stat. 978; 27 U.S.C. 203, 204), 
regulations issued under such Act govern the approval and use of trade 
names for those operations.
    (c) Conditions. Operations shall not be conducted under a trade name 
until the proprietor is in possession of an operating or basic permit 
covering the use of such name.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))

[[Page 322]]



Sec. 19.166  Major equipment.

    The following items of major equipment, if on the plant premises, 
shall be described in the application for registration:
    (a) Tanks (serial number and capacity) used in the production, 
storage and processing of distilled spirits, wine, denatured spirits and 
articles;
    (b) Stills (serial number, kind, capacity and intended use). The 
capacity shall be stated as the estimated maximum proof gallons of 
spirits capable of being produced every 24 hours, or (for column stills) 
may be represented by a statement of the diameter of the base and number 
of plates; and
    (c) Condensers (serial number).

A statement of certification of accurate calibration shall be included 
in the description of tanks that are to be used for gauging distilled 
spirits or wine for any purpose.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1352, as amended 
(26 U.S.C. 5172, 5179))



Sec. 19.167  Organizational documents.

    The supporting information required by paragraph (c) of Sec. 19.152, 
and paragraph (d) of Sec. 19.158, includes, as applicable, copies of--
    (a) Corporate documents. (1) Corporate charter or a certificate of 
corporate existence or incorporation.
    (2) List of directors and officers, showing their names and 
addresses.
    (3) Certified extracts or digests of minutes of meetings of board of 
directors, authorizing certain individuals to sign for the corporation.
    (4) Statement showing the number of shares of each class of stock or 
other evidence of ownership, authorized and outstanding, and the voting 
rights of the respective owners or holders.
    (b) Articles of partnership. Copy of the articles of partnership or 
association, if any, or certificate of partnership or association where 
required to be filed by any State, county, or municipality.
    (c) Statement of interest. (1) Names and addresses of the 10 persons 
having the largest ownership or other interest in each of the classes of 
stock in the corporation, or other legal entity, and the nature and 
amount of the stockholding or other interest of each, whether the 
interest appears in the name of the interested party or in the name of 
another for him. If a corporation is wholly owned or controlled by 
another corporation, those persons of the parent corporation who meet 
the above standards are considered to be the persons interested in the 
business of the subsidiary, and the names thereof need be furnished only 
upon request of the regional director (compliance).
    (2) In the case of an individual owner or partnership, the name and 
address of each person interested in the plant, whether the interest 
appears in the name of the interested party or in the name of another 
for that person.
    (d) Availability of additional corporate documents. The originals of 
documents required to be submitted under this section and additional 
documents which may be required by the regional director (compliance) 
such as the articles of incorporation, bylaws, and State certificate 
authorizing operations shall be made available to any ATF officer upon 
request.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended 
(26 U.S.C. 5172, 5271))



Sec. 19.168  Description of plant.

    (a) The application for registration shall include a description of 
each tract of land comprising the distilled spirits plant.
    (b) The description shall:
    (1) Clearly indicate the bonded premises and any general premises 
included as part of the distilled spirits plant; and
    (2) Contain directions and distances in sufficient detail to enable 
ATF officers to readily determine the boundaries of the plant.
    (c) Each building and outside tank used for the production, storage 
and processing of spirits, denatured spirits, articles, or wines shall 
be described by location, size, construction, and arrangement with 
reference to each by its designated number or letter.
    (d) If a plant includes a room or floor in a building, a description 
of the building in which the room or floor is situated and its location 
shall be given.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172))

[[Page 323]]



Sec. 19.169  Registry of stills.

    The provisions of subpart C of part 29 of this chapter are 
applicable to stills or distilling apparatus located on plant premises 
used for distilling. As provided under Sec. 29.55, the listing of a 
still in the application for registration, and approval of the 
application, constitutes registration of the still.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1355, as amended 
(26 U.S.C. 5172, 5179))

[T.D. ATF-207, 50 FR 23681, June 5, 1985]



Sec. 19.170  Statement of production procedure.

    The statement of production procedure in the application for 
registration shall set forth a step-by-step description of the procedure 
employed to produce spirits from an original source, commencing with the 
treating, mashing, or fermenting of the raw materials or substances and 
continuing through each step of the distilling, purifying and refining 
procedure to the production gauge. The kind and approximate quantity of 
each material or substance used in producing, purifying, or refining 
each type of spirits shall be shown.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172))

                  Changes After Original Qualification



Sec. 19.180  Application for amended registration.

    Where there is a change with respect to the information shown in the 
notice of registration, the proprietor shall submit, within 30 days of 
such change (except as otherwise provided in this subpart), an 
application on Form 5110.41 for amended registration. Such application 
shall set forth, on sheets appropriately numbered or otherwise 
identified, the information necessary to make the notice of registration 
accurate and current. Where the change affects only pages or parts of 
pages of the notice of registration, such complete pages shall be 
submitted as will enable the replacement of the pages affected and 
maintenance of the file as provided in Sec. 19.155.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172); 
sec. 805(a), Pub. L. 96-39, 93 Stat. 275 (26 U.S.C. 5171))



Sec. 19.181  Automatic termination of permits.

    (a) Permits not transferable. Operating permits issued under this 
part shall not be transferred. In the event of the lease, sale, or other 
transfer of such a permit, or of the operations authorized thereby, the 
permit shall thereupon automatically terminate.
    (b) Corporations. In the case of a corporation holding an operating 
permit under this part, if actual or legal control of the permittee 
corporation changes, directly or indirectly, whether by reason of change 
in stock ownership or control (in the permittee corporation or in any 
other corporation), by operation of law, or in any other manner, such 
permit may remain in effect with respect to the operation covered 
thereby until the expiration of 30 days after such change, whereupon 
such permit shall automatically terminate. However, if within such 30 
day period an application for a new permit covering such operation is 
made, then the outstanding operating permit may remain in effect with 
respect to the continuation of the operation covered thereby until final 
action is taken on such application. When such final action is taken, 
such outstanding operting permit shall thereupon automatically 
terminate.
    (c) Basic permits. The termination of basic permits is governed by 
the provisions of 27 CFR part 1.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))



Sec. 19.182  Change in name of proprietor.

    Where there is to be a change in the individual, firm, or corporate 
name, the proprietor shall file application to amend the registration 
and to amend the operating and/or basic permit; a new bond or consent of 
surety will not be required. Operations may not be conducted under the 
new name prior to

[[Page 324]]

approval of the amended registration and issuance of the amended permit.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended 
(26 U.S.C. 5172, 5271))



Sec. 19.183  Change of trade name.

    If there is to be a change in, or addition of, a trade name, the 
proprietor shall file application to amend the operating and/or basic 
permit; a new bond or consent of surety will not be required. Operations 
may not be conducted under the new trade name prior to issuance of the 
amended permit.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended, (26 U.S.C. 5271))



Sec. 19.184  Changes in stockholders.

    Changes in the list of stockholders furnished under the provisions 
of Sec. 19.167(c)(1) may, in lieu of submission within 30 days of the 
change under the provisions of Sec. 19.180, be submitted annually by the 
proprietor on May 1 or other date approved by the regional director 
(compliance), except where the sale or transfer of capital stock results 
in a change in the control or management of the business.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended 
(26 U.S.C. 5172, 5271))



Sec. 19.185  Changes in officers and directors.

    Where there is any change in the list of officers and directors 
furnished under the provisions of Sec. 19.167(a)(2), the proprietor 
shall submit, within 30 days of any such change, an application on Form 
5110.41 for amended registration, supported by a new list of officers 
and directors and a statement of the changes reflected in such list. 
Where the proprietor has shown to the satisfaction of the regional 
director (compliance) that certain corporate officers listed on the 
original appplication have no responsibilities in connection with the 
operations covered by the registration, the regional director 
(compliance) may waive the requirements for submitting applications for 
amended registration to cover changes of such corporate officers.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, (26 U.S.C. 5172); 
sec. 805(a), Pub. L. 96-39, 93 Stat. 275 (26 U.S.C. 5171))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]



Sec. 19.186  Change in proprietorship.

    (a) General. If there is a change in the proprietorship of a plant 
qualified under this part, the outgoing proprietor shall comply with the 
requirements of Sec. 19.211, and the successor shall, before commencing 
operations, apply for and obtain the required permits, file the required 
bonds, and file application for and receive notice of registration of 
the plant in the same manner as a person qualifying as the proprietor of 
a new plant, except that the successor may, in the manner provided in 
Sec. 19.187, adopt the approved formulas (5150.9) of the predecessor. 
Spirits may be transferred from an outgoing proprietor of a plant to a 
successor in the manner provided in Sec. 19.201.
    (b) Fiduciary. If the successor to the proprietorship of a plant is 
an administrator, executor, receiver, trustee, assignee or other 
fiduciary, he shall comply with the provisions of paragraph (a) of this 
section except that he may, in lieu of filing a new bond, furnish 
consent of surety extending the terms of the predecessor's bond, and he 
may also incorporate by reference in the application for registration on 
Form 5110.41 any pertinent information contained in the predecessor's 
notice of registration. The fiduciary shall furnish a certified copy of 
the order of the court or other pertinent document showing qualification 
as such fiduciary. The effective dates of the qualifying documents filed 
by the fiduciary shall be the effective date of the court order, or the 
date specified therein for him to assume control. If the fiduciary was 
not appointed by a court, the date of assuming control shall coincide 
with

[[Page 325]]

the effective date of the qualifying documents filed by the fiduciary.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50 
FR 9160, Mar. 6, 1985; 50 FR 20099, May 14, 1985]



Sec. 19.187  Adoption of formulas.

    (a) Forms 5110.38. The adoption by a successor of approved Forms 
5110.38 (27-B Supplemental) shall be in the form of an application, 
filed with the Director. The application shall list the formulas for 
adoption by (1) formula number, (2) name of product, and (3) date of 
approval. The application shall clearly show that the predecessor has 
authorized the use of its previously approved formulas by the successor.
    (b) Form 5150.19. The adoption by a successor of approved Form 
5150.19 (or previously approved Form 1479-A) shall be in accordance with 
Sec. 20.63 of this chapter.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50 
FR 9160, Mar. 6, 1985]



Sec. 19.188  Partnerships.

    If under the laws of the particular State, the partnership is not 
terminated on death or insolvency of a partner, but continues until the 
winding up of the partnership affairs is completed, and the surviving 
partner has the exclusive right to the control and possession of the 
partnership assets for the purpose of liquidation and settlement, such 
surviving partner may continue to operate the plant under the prior 
qualification of the partnership, provided a consent of surety is filed, 
wherein the surety and the surviving partner agree to remain liable on 
the operations or unit bond. If such surviving partner acquires the 
business on completion of the settlement of the partnership, he shall 
qualify in his own name from the date of acquisition, as provided in 
Sec. 19.186(a). The rule set forth in this section shall also apply 
where there is more than one surviving partner.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172))



Sec. 19.189  Change in location.

    Where there is a change in the location of the plant, the proprietor 
shall file applications to amend the registration of the plant and the 
operating and/or basic permit, and either a new bond or a consent of 
surety on Form 1533. Operation of the plant may not be commenced at the 
new location prior to approval of the amended registration and issuance 
of the amended permit.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349 as amended, 1370, as amended 
(26 U.S.C. 5172, 5271); sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 
U.S.C. 5173))



Sec. 19.190  Changes in premises.

    Except as provided in Secs. 19.202, 19.203, 19.204, and 19.205, 
where bonded premises, or any other premises included as a part of the 
plant are to be extended or curtailed, the proprietor shall file an 
application for registration, Form 5110.41, to cover such extension or 
curtailment. Premises and equipment to be included by extension or to be 
excluded by curtailment shall not, prior to approval by the regional 
director (compliance) of the requried documents, be used for other than 
previously approved purposes.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172))



Sec. 19.191  Change in operations.

    If the proprietor proposes to conduct a new business or operation 
involving spirits, he shall file applications to amend the registration 
of the plant and the operating and/or basic permit. If the proprietor 
desires to engage, on the plant premises, in other businesses, as 
provided in subpart D, he shall submit an application to amend the 
registration of the plant to include the information required under 
Sec. 19.152(l)(4). The additional operation or business may not be 
carried on prior to approval of the amended registration and (if 
required) issuance of the amended permit.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended 
(26 U.S.C. 5172, 5271); sec. 805(a), Pub. L. 96-39, 93 Stat. 275 (26 
U.S.C. 5171))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]

[[Page 326]]



Sec. 19.192  Change in production procedure.

    If the proprietor desires to produce a new product or make a change 
in a production procedure which would affect the designation, or 
substantially affect the character of his product, the proprietor shall 
file an application to amend the registration of the plant to include 
the amended or new statement of production procedure. The new or changed 
procedure may not be used prior to approval of the amended registration.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, (26 U.S.C. 5172))



Sec. 19.193  Changes in construction or use of buildings and equipment.

    (a) Changes. When a material change, affecting the accuracy of the 
notice of registration, is to be made in the construction or use of 
buildings or equipment of a plant, other than a change covered by 
Secs. 19.190, 19.202, 19.203, 19.204, or 19.205, the proprietor shall, 
before making such change, submit a letterhead notice to the regional 
director (compliance) through the area supervisor.
    (b) Letterhead notice. The letterhead notice shall:
    (1) Describe the proposed change in detail;
    (2) Be kept on file with the proprietor's current notice of 
registration; and
    (3) After completion of the change, be incorporated in the next 
amendment of the notice of registration on Form 5110.41, unless the 
regional director (compliance) requires immediate amendment.
    (c) Emergency changes. The proprietor may make emergency material 
changes without prior notification, but when such emergency changes are 
made, the proprietor shall promptly report such changes to the area 
supervisor.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, (26 U.S.C. 5172))

                  Operations by Alternating Proprietors



Sec. 19.201  Procedure for alternating proprietors.

    (a) General. A plant, or any part thereof which is suitable for 
qualification as a separate plant, may be operated alternately by 
proprietors who have filed and received approval of the necessary bonds 
and applications for registration, and have otherwise qualified under 
the provisions of this subpart. Where operations by alternating 
proprietors are limited to parts of the plant, the notice of 
registration shall describe the areas, rooms or buildings or combination 
thereof, which will be alternated, and shall be accompanied by special 
diagrams designating the parts of the plant which are to be alternated. 
A special diagram shall be submitted for each arrangement under which 
the premises will be operated. Once such qualifying documents have been 
approved, and initial operations have been conducted thereunder, the 
plant, or parts thereof, may be alternated by the proprietor filing 
notices on Form 5110.34 with the regional director (compliance). Any 
transfer of spirits, idenatured spirits, and wines shall be indicated on 
Form 5110.34 filed by each proprietor.
    (b) Production. Distilling materials and unfinished spirits in any 
bonded areas, rooms or buildings to be alternated shall be processed to 
completion by the outgoing proprietor unless transferred to the incoming 
proprietor. All finished spirits shall be marked and removed by the 
outgoing proprietor in the name in which produced, before production 
gauge is made of any spirits by the incoming proprietor.
    (c) Storage. Spirits and wines in any bonded areas, rooms, or 
buildings to be alternated shall be transferred in bond to the incoming 
proprietor. The outgoing proprietor shall execute a consent of surety on 
Form 1533 (5000.18) to continue in effect the operations or unit bond 
whenever operation of the areas, rooms, or buildings is to be resumed by 
him following suspension of operations by an alternate proprietor.

[[Page 327]]

    (d) Processing. Spirits, denatured spirits, wines and articles in 
any rooms, areas, or buildings to be alternated shall be processed to 
completion and removed from the affected areas, rooms, or buildings by 
the outgoing proprietor prior to the effective date and hours given in 
the notice unless transferred or retained in locked tanks as provided in 
this paragraph. Spirits, denatured spirits, and wines may be transferred 
to the incoming proprietor. Further, the outgoing proprietor shall 
execute a consent of surety on Form 1533 (5000.18) to continue in effect 
the operations or unit bond whenever operation of the affected areas, 
rooms, or buildings is to be resumed by him following suspension of 
operations by the alternate proprietor. Denatured spirits and articles 
may be retained in tanks locked by approved locks, the keys to which are 
in the custody of the outgoing proprietor. In this case, the outgoing 
proprietor shall execute a consent of surety on Form 1533 (5000.18) to 
continue liability on the operations or unit bond for the tax on such 
denatured spirits or articles retained in such tanks, notwithstanding 
the change in proprietorship.
    (e) Records. Each proprietor shall maintain separate records and 
submit separate reports. Records kept by the outgoing proprietor for 
spirits, wines, and alcoholic flavoring materials may be used by the 
incoming proprietor. All transfers of distilling materials, unfinished 
spirits, spirits, denatured spirits, and wines shall be reflected in the 
records of each proprietor.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended 
(26 U.S.C. 5172, 5271))

                          Alternate Operations



Sec. 19.202  Alternate use of premises and equipment for customs purposes.

    (a) General. The premises of a distilled spirits plant may, as 
provided in this section, be alternately curtailed and extended to 
permit the facilities of the distilled spirits plant to be used 
temporarily by customs officers, under applicable customs law and 
regulations, for the purpose of gauging or processing distilled spirits. 
The use of the excluded portion of the premises for customs purposes is 
subject to the approval of the district director of customs. When it is 
necessary to convey spirits in customs custody across the premises of a 
distilled spirits plant, the proprietor shall comply with the provisions 
of Sec. 19.99. When a portion of the distilled spirits plant premises is 
first to be excluded as provided in this section, the proprietor shall 
file with the regional director (compliance) (1) an application for 
registration, Form 5110.41, to cover alternate curtailment and extension 
of premises, and (2) a special diagram, in duplicate, delineating the 
premises as they will exist, both during extension and curtailment, and 
clearly depicting all buildings, floors, rooms, areas, equipment and 
spirits lines (identified individually by letter or number) which are to 
be subject to alternation, in their relative operating sequence. Once 
such qualifying documents have been approved by the regional director 
(compliance), the designated premises and equipment may be alternately 
curtailed or extended pursuant to notice on Form 5110.34. Portions of 
the premises to be excluded by curtailment or included by extension 
shall not be used for purposes other than as set forth in the current 
notice. The proprietor shall remove all spirits from the premises or 
equipment affected by the notice prior to the effective date and hours 
of the notice. However, on release by customs, spirits being transferred 
to bonded premises under 26 U.S.C. 5232, may remain on the premises to 
be reincluded in bonded premises.
    (b) Separation of premises. The portion of the premises which is to 
be excluded from the distilled spirits plant premises as provided in 
this section shall be separated from the remaining portion of the 
distilled spirits plant premises in a manner which satisfies the 
regional director (compliance) that the revenue will not be jeopardized.
    (c) Exception. Notwithstanding the provisions of paragraphs (a) and 
(b) of this section, the bonded premises may be used temporarily without 
filing Form 5110.41 or Form 5110.34, for the sole purpose of gauging 
bulk distilled

[[Page 328]]

spirits to effect their transfer from customs custody to ATF bond.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1358, as amended 
(26 U.S.C. 5172, 5178))



Sec. 19.203  Alternation of distilled spirits plant and bonded wine cellar premises.

    (a) General. A proprietor of a distilled spirits plant operating a 
contiguous bonded wine cellar desiring to alternate the use of each 
premises by extension and curtailment shall file necessary qualifying 
documents with the regional director (compliance).
    (b) Qualifying documents. The proprietor shall file with the 
regional director (compliance):
    (1) Form 5110.41 and Form 5120.25 to cover the proposed alternation 
of premises;
    (2) A special diagram, in duplicate, delineating the premises as 
they will exist, both during extension and curtailment and clearly 
depicting all buildings, floors, rooms, areas, equipment and spirits 
lines (identified individually by letter or number) which are to be 
subject to alternation, in their relative operating sequence; and
    (3) Evidence of existing bond, consent of surety, or a new bond to 
cover the proposed alternation of premises.
    (c) Proprietor's responsibility. After approval of qualifying 
documents for the alternation of premises, and after initial operations 
have been conducted thereunder, the proprietor shall execute Form 
5110.34 each time the premises are alternated. Prior to the effective 
hour of the date shown on the Form 5110.34, the proprietor shall remove 
all spirits, denatured spirits, articles, and wines from the distilled 
spirits plant premises alternated to bonded wine cellar premises. Any 
wine on bonded wine cellar premises shall be removed prior to 
alternation to distilled spirits plant premises unless wine is being 
simultaneously transferred in bond to the distilled spirits plant.
    (d) Separation of premises. Separation of distilled spirits plant 
premises from bonded wine cellar premises after alternation shall be in 
a manner which satisfies the regional director (compliance) that the 
revenue will not be jeopardized.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1353, as amended 
(26 U.S.C. 5172, 5178))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-344, 58 
FR 40354, July 28, 1993]



Sec. 19.204  Alternation of distilled spirits plant and taxpaid wine bottling house premises.

    (a) General. A proprietor of a distilled spirits plant operating a 
contiguous taxpaid wine bottling house desiring to alternate the use of 
each premises by extension and curtailment shall file necessary 
qualifying documents with the regional director (compliance).
    (b) Qualifying documents. The proprietor shall file with the 
regional director (compliance):
    (1) Form 5110.41 and Form 5120.25 to cover the proposed alternation 
of premises;
    (2) A special diagram, in duplicate, delineating the premises as 
they will exist, both during extension and curtailment and clearly 
depicting all buildings, floors, rooms, areas, equipment and spirits 
lines (identified individually by letter or number) which are to be 
subject to alternation, in their relative operating sequence; and
    (3) Evidence of existing bond, consent of surety, or a new bond to 
cover the proposed alternation of premises.
    (c) Proprietor's responsibility. After approval of qualifying 
documents for the alternation of premises, and after initial operations 
have been conducted thereunder, the proprietor shall execute Form 
5110.34 each time the premises are alternated. Prior to the effective 
hour of the date shown on the Form 5110.34, the proprietor shall remove 
all spirits, denatured spirits, articles, and wines from the distilled 
spirits plant premises alternated to taxpaid wine bottling house 
premises. Any wine on taxpaid wine bottling house premises shall be 
removed prior to alternation to distilled spirits plant premises.
    (d) Separation of premises. Separation of distilled spirits plant 
premises from taxpaid wine bottling house premises after alternation 
shall be in a manner which satisfies the regional director

[[Page 329]]

(compliance) that the revenue will not be jeopardized.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1353, as amended 
(26 U.S.C. 5172, 5178))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-344, 58 
FR 40354, July 28, 1993]



Sec. 19.205  Alternate curtailment and extension of bonded premises for use as general premises.

    (a) General. The premises of a distilled spirits plant may, as 
provided in this section, be alternately curtailed and extended to 
permit the bonded premises of the distilled spirits plant to be used 
temporarily as general premises, or to permit the general premises of a 
distilled spirits plant to be used temporarily as bonded premises.
    (b) Qualifying documents. When a portion of the distilled spirits 
plant premises is first to be curtailed or extended as provided in this 
section, the proprietor shall file with the regional director 
(compliance)--
    (1) An application for registration, Form 5110.41, to cover 
alternate extension and curtailment of the premises, and
    (2) A special diagram, in duplicate, delineating the premises as 
they will exist, both during extension and curtailment, and clearly 
depicting all buildings, floors, rooms, areas, equipment and spirits 
lines (identified individually by letter or number) which are to be 
subject to alternation, in their relative operating sequence.
    (c) Proprietor's responsibility. Once such qualifying documents have 
been approved by the regional director (compliance), the designated 
premises and equipment may be alternately curtailed or extended pursuant 
to notice on Form 5110.34. Portions of the premises to be excluded by 
curtailment or included by extension shall not be used for purposes 
other than as set forth in the current notice. The proprietor shall 
remove all spirits, denatured spirits, articles, and wines from the 
premises or equipment affected by the notice prior to the effective date 
and hour of the notice, except that--
    (1) Bonded spirits on portions of bonded premises that are to be 
curtailed to general premises need not be removed if the spirits are 
taxpaid concurrent with the filing of Form 5110.34 to effect 
curtailment; and
    (2) Taxpaid spirits on portions of general premises to be curtailed 
to bonded premises need not be removed if the spirits are to be 
immediately dumped and returned to bond under the provisions of subpart 
U of this part.
    (d) Separation of premises. The portion of the premises which is to 
be curtailed or extended as provided in this section shall be separated 
from the remaining portion of the distilled spirits plant in a manner 
which satisfies the regional director (compliance) that the revenue will 
not be jeopardized.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1353, as amended 
(26 U.S.C. 5172, 5178))



Sec. 19.206  Curtailment and extension of plant premises for the manufacture of eligible flavors.

    (a) General. The premises of a distilled spirits plant may be 
alternately curtailed and extended, as provided in this section, to 
permit the use of the facilities for the manufacture of eligible 
flavors.
    (b) Qualifying documents. When a portion of the distilled spirits 
plant premises is first to be curtailed or extended as provided in this 
section, the proprietor shall file with the regional director 
(compliance)--
    (1) An application for registration, Form 5110.41, to cover 
alternate extension and curtailment of the premises, and
    (2) A special diagram, in duplicate, delineating the premises as 
they will exist, both during extension and curtailment, and clearly 
depicting all buildings, floors, rooms, areas, equipment and spirits 
lines (identified individually by letter or number) which are to be 
subject to alternation, in their relative operating sequence.
    (c) Proprietor's responsibility. Once such qualifying documents have 
been approved by the regional director (compliance), the designated 
premises and equipment may be alternately curtailed or extended pursuant 
to notice on Form 5110.34. Portions of the premises to be excluded by 
curtailment or included by extension shall not be used

[[Page 330]]

for purposes other than as set forth in the current notice. The 
proprietor shall remove all spirits, denatured spirits, articles, and 
wines from the premises or equipment which are to be curtailed from 
bonded premises or are to be included by extension of bonded premises 
prior to the effective date and hour of the notice, except that--
    (1) Bonded spirits on portions of bonded premises that are to be 
curtailed need not be removed if the spirits are taxpaid concurrent with 
the filing of Form 5110.34 to effect curtailment; and
    (2) Taxpaid spirits which are on portions of premises to be included 
by extension of bonded premises and which have not been used in the 
manufacture of a nonbeverage product need not be removed if the spirits 
are to be dumped immediately and returned to bond under the provisions 
of subpart U of this part.
    (d) Separation of premises. The portion of the premises which is to 
be curtailed or extended as provided in this section shall be separated 
from the remaining portion of the distilled spirits plant in a manner 
which satisfies the regional director (compliance) that the revenue will 
not be jeopardized.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1353, as amended 
(26 U.S.C. 5172, 5178))

[T.D. ATF-297, 55 FR 18063, Apr. 30, 1990]



Sec. 19.207  Alternate use of distilled spirits plant and volatile fruit-flavor concentrate premises.

    If a proprietor of distilled spirits plant wishes to use all or a 
portion of such premises alternately as a volatile fruit-flavor 
concentrate plant or vice-a-versa, the proprietor must comply with the 
requirements of Secs. 18.39 and 18.41 through 18.43 of this title.

[T.D. ATF-455, 66 FR 29482, May 31, 2001]

                  Permanent Discontinuance of Business



Sec. 19.211  Notice of permanent discontinuance.

    When the proprietor permanently discontinues any or all of the 
operations listed in the notice of registration, he shall file a Form 
5110.41 to show the discontinuance. Form 5110.41 shall be accompanied 
(a) by all permits issued to the proprietor under this subpart covering 
the discontinued operations, and by the proprietor's request that such 
permits be canceled; (b) by the proprietor's written statement 
disclosing, as applicable, whether (1) all spirits, denatured spirits, 
articles, wines, liquor bottles, and other pertinent items have been 
lawfully disposed of, (2) any spirits, denatured spirits, wines, or 
liquor bottles are in transit to the premises, (3) all approved 
applications for transfer of spirits and denatured spirits to the 
premises have been secured and returned to the regional director 
(compliance) for cancellation; and (c) by pertinent reports coverning 
the discontinued operations (each report shall be marked ``Final 
Report'').

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended 
(26 U.S.C. 5172, 5271))

[T.D. ATF-206, 50 FR 23951, June 7, 1985]



                 Subpart H--Bonds and Consents of Surety



Sec. 19.231  Filing of operations or unit bonds.

    Every person intending to establish a distilled spirits plant shall 
file an operations or unit bond as prescribed in this subpart, covering 
distilled spirits operations at such plant, with the regional director 
(compliance), at the time of filing the original application for 
registration of the plant, and at such other times as are required by 
this part. Such bond shall be conditioned that he shall faithfully 
comply with all provisions of law and regulations relating to activities 
covered by such bond, will pay all taxes imposed by 26 U.S.C. Chapter 
51, and shall pay all penalties incurred or fines imposed for violation 
of any such provisions. The regional director (compliance) may require, 
in connection with any operations or unit bond, a statement, executed 
under the penalties of perjury, as to whether the principal or any 
person owning, controlling, or actively participating in the management 
of the business of the principal has been convicted of or has 
compromised any offense set forth in Sec. 19.237(a)(1) or has been 
convicted of any offense set forth

[[Page 331]]

in Sec. 19.237(a)(2). In the event the above statement contains an 
affirmative answer, the applcant shall submit a statement describing in 
detail the circumstances surrounding such conviction or compromise. No 
person shall comence or continue distilled spirits operations at such 
plant unless he has a valid operations or unit bond (and consent of 
surety, if necessary), as required in respect of such operations by this 
part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1394, as amended (26 U.S.C. 5551); 
sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]



Sec. 19.232  Additional condition of operations bond.

    In addition to the requirements of Sec. 19.231, the operations bond 
shall be conditioned on payment of the tax now or hereafter in force, 
except as provided by law, including taxes on all unexplained shortages 
of bottled distilled spirits.

(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))



Sec. 19.233  Corporate surety.

    (a) Surety bonds required by this part may be given only with 
corporate sureties holding certificates of authority from, and subject 
to the limitations prescribed by, the Secretary as set forth in the 
current revision of Treasury Department Circular 570 (Companies Holding 
Certificates of Authority as Acceptable Sureties on Federal Bonds and as 
Acceptable Reinsuring Companies).
    (b) Treasury Department Circular No. 570 is published in the Federal 
Register yearly as of the first workday of July. As they occur, interim 
revisions of the circular are published in the Federal Register. Copies 
may be obtained from the Audit Staff, Bureau of Government Financial 
Operations, Department of the Treasury, Washington, DC 20226.

(Ch. 390, Pub. L. 80-280, 61 Stat. 648 as amended (31 U.S.C. 9304, 
9306))



Sec. 19.234  Deposit of securities in lieu of corporate surety.

    In lieu of corporate surety, the principal may pledge and deposit, 
as surety for his bond, securities which are transferable and are 
guaranteed as to both interest and principal by the United States, in 
accordance with the provisions of 31 CFR part 225.

(Ch. 390, Pub. L. 80-280, 61 Stat. 650 (31 U.S.C. 9301, 9303))



Sec. 19.235  Consents of surety.

    Consents of surety to changes in the terms of bonds shall be 
executed on Form 1533 by the principal and by the surety with the same 
formality and proof of authority as is required for the execution of 
bonds.

(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))



Sec. 19.236  Filing and execution of powers of attorney.

    (a) Filing. Each bond, and each consent to changes in the terms of a 
bond, shall be accompanied by a power of attorney authorizing the agent 
or officer who executed the bond or consent to so act on behalf of the 
surety. The regional director (compliance) who is authorized to approve 
the bond may require additional evidence of the authority of the agent 
or officer to execute the bond or consent.
    (b) Execution. The power of attorney shall be prepared on a form 
provided by the surety company and executed under the corporate seal of 
the company. If the power of attorney submitted is other than a manually 
signed original, it shall be accompanied by certification of its 
validity.

(Ch. 390, Pub. L. 80-280, 61 Stat. 648 (31 U.S.C. 9304, 9306))



Sec. 19.237  Disapproval of bonds or consents of surety.

    (a) Disapproval. The regional director (compliance) may disapprove 
any bond or consent of surety submitted in respect to the operations of 
a distiller, warehouseman, or processor, if the principal or any person 
owning, controlling, or actively participating in the management of the 
business of the principal shall have been previously

[[Page 332]]

convicted, in a court of competent jurisdiction of--
    (1) Any fraudulent noncompliance with any provision of any law of 
the United States, if such provision related to internal revenue or 
customs taxation of spirits, wines, or beer, or if such an offense shall 
have been compromised with the person on payment of penalties or 
otherwise, or
    (2) Any felony under a law of any State or the District of Columbia, 
or the United States, prohibiting the manufacture, sale, importation, or 
transportation of spirits, wine, beer, or other intoxicating liquor.
    (b) Appeal. Where a bond or consent of surety is disapproved by the 
regional director (compliance), the person giving the bond may appeal to 
the Director, who will hear such appeal. The decision of the Director 
shall be final.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1394, as amended (26 U.S.C. 5551))



Secs. 19.238-19.240  [Reserved]



Sec. 19.241  Operations bond--distilled spirits plant and adjacent bonded wine cellar.

    (a) General. A wine cellar under the provisions of 27 CFR part 24 
shall be treated as being adjacent to a distilled spirits plant if--
    (1) Such distilled spirits plant is qualified under subpart G for 
the production of distilled spirits; and
    (2) Such wine cellar and distilled spirits plant are operated by the 
same person (or in the case of a corporation, by such corporation and 
its controlled subsidiaries). For the purpose of this section a 
controlled subsidiary is a corporation where more than 50 percent of the 
voting power is controlled by the parent corporation.
    (b) Bond in lieu of wine cellar bond. In the case of an adjacent 
bonded wine cellar, a bond furnished under this subpart which covers 
operations at such bonded wine cellar shall be in lieu of any bond which 
would otherwise be required under 26 U.S.C. 5354 with respect to such 
wine cellar (other than supplemental bonds required under the second 
sentence of 26 U.S.C. 5354) and the operations bond listed in 
Sec. 19.245(a)(1).
    (c) Liability. Bonds given under this section shall contain the 
terms and conditions of the bonds in lieu of which they are given. The 
total amount of such operations bond shall be available for the 
satisfaction of any liability incurred under the terms or conditions of 
such bond.

(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-299, 55 
FR 24989, June 19, 1990]



Sec. 19.242  Area operations bond.

    Any person (or, in the case of a corporation, a corporation and its 
controlled subsidiaries) operating more than one plant in a region may 
give an area operations bond covering the operation of any two or more 
of such plants, and any bonded wine cellars which are adjacent to such 
plants and which otherwise could be covered by an operations bond. For 
the purpose of this section, a controlled subsidiary is a corporation 
where more than 50 percent of the voting power is controlled by the 
parent corporation. Bonds given under this section shall be in lieu of 
the bonds which would be required under Sec. 19.245(a) and shall contain 
the terms and conditions of such bonds. If the area operations bond 
covers the operations of more than one corporation, each corporation 
shall be shown as principal, and the bond shall be signed for each 
corporation. The total amount of the area operations bond shall be 
available for the satisfaction of any liability incurred under the terms 
or conditions of such bond.

(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))



Sec. 19.243  Withdrawal bond.

    Any person (or, in the case of a corporation, a corporation and its 
controlled subsidiaries) operating one or more distilled spirits plants 
within a region and who intends to withdraw spirits from bond on 
determination, but before payment, of the tax shall, before making any 
such withdrawal, furnish a withdrawal bond to secure payment of the tax 
on all spirits so withdrawn. Such bond shall be in addition to the 
operations bond, and if the distilled spirits are withdrawn under the 
withdrawal bond, the operations

[[Page 333]]

bond shall no longer cover liability for payment of the tax on the 
spirits withdrawn. For the purpose of this section, a controlled 
subsidiary is a corporation where more than 50 percent of the voting 
power is controlled by the parent corporation. The bond, if it covers 
more than one plant, shall show as to each plant covered by the bond the 
part of the total sum which represents the penal sum (computed in 
accordance with Sec. 19.245) for each such plant. If the penal sum of 
the bond covering a plant, or the penal sum allocated to any plant 
(where the bond covers more than one plant), is in an amount less than 
the maximum prescribed in Sec. 19.245, withdrawals from such plant shall 
not exceed the quantity permissible, as reflected by the penal sum in 
the bond for such plant. Such withdrawal bond shall be conditioned that 
the total amount of the bond shall be available for satisfaction of any 
liability incurred under the terms and conditions of such bond.

(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))



Sec. 19.244  Unit bond.

    Any person (or, in the case of a corporation, a corporation and its 
controlled subsidiaries) who would otherwise be required to give bonds 
for both operations at one or more distilled spirits plants (and any 
adjacent bonded wine cellars) and withdrawals from one or more distilled 
spirits plants within a reigon may, in lieu of furnishing separate bonds 
for operations and withdrawals, furnish a unit bond containing the terms 
and conditions of the bonds in lieu of which it is given. For the 
purpose of this section, a controlled subsidiary is a corporation where 
more than 50 percent of the voting power is controlled by the parent 
corporation. The unit bond shall show as to each plant covered by the 
bond the part of the total sum which represents the penal sum (computed 
in accordance with Sec. 19.245) for operations at and withdrawals from 
each plant. If the penal sum of the bond covering a plant, or the penal 
sum allocated to any plant (if the bond covers more than one plant), is 
in an amount less than the maximum prescribed in Sec. 19.245, operations 
at and/or withdrawals from such plant shall not exceed the quantity 
permissible as reflected by the penal sum in the bond for such plant. 
The unit bond shall be conditioned that the total amount of the bond 
shall be available for satisfaction of any liability incurred under the 
terms and conditions of such bond.

(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))



Sec. 19.245  Bonds and penal sums of bonds.

    The bonds, and the penal sums thereof, required by this subpart, are 
as follows:

                                                    Penal Sum
----------------------------------------------------------------------------------------------------------------
                 Type of bond                                    Basis                    Minimum      Maximum
----------------------------------------------------------------------------------------------------------------
(a) Operations bond:
  (1) One plant bond--
    (i) Distiller.............................  The amount of tax on spirits produced        $5,000     $100,000
                                                 during a period of 15 days.
    (ii) Warehouseman:
      (A) General.............................  The amount of tax on spirits and wines        5,000      200,000
                                                 deposited in, stored on, and in
                                                 transit to bonded premises.
      (B) Limited to storage of spirits in      ......do..............................        5,000       50,000
       packages to a total of not over 50,000
       proof gallons.
    (iii) Distiller and warehouseman..........  The amount of tax on spirits produced        10,000      200,000
                                                 during a period of 15 days, and the
                                                 amount of tax on spirits and wines
                                                 deposited, in stored on, and in
                                                 transit to bonded premises.
    (iv) Distiller and processor..............  The amount of tax on spirits produced        10,000      200,000
                                                 during a period of 15 days, and the
                                                 amount of tax on spirits, denatured
                                                 spirits, articles, and wines
                                                 deposited in, stored on, and in
                                                 transit to bonded premises.

[[Page 334]]

 
    (v) Warehouseman and processor:
      (A) General.............................  The amount of tax on spirits,                10,000      250,000
                                                 denatured spirits, articles, and
                                                 wines deposited in, stored on, and in
                                                 transit to bonded premises.
      (B) Limited to storage of spirits or      ......do..............................       10,000       50,000
       denatured spirits in packages to a
       total of not over 50,000 proof gallons,
       and processing of spirits or denatured
       spirits so stored.
    (vi) Distiller, warehouseman, and           The amount of tax on spirits produced        15,000      250,000
     processor.                                  during a period of 15 days, and the
                                                 amount of tax on spirits, denatured
                                                 spirits, articles, and wines
                                                 deposited in, stored on, and in
                                                 transit to bonded premises.
  (2) Adjacent bonded wine cellars--
    (i) Distiller and bonded wine cellar......  The sum of the amount of tax                  6,000      150,000
                                                 calculated in (a)(1)(i) and with
                                                 respect to bonded wine cellar
                                                 operations, the amount of tax on
                                                 wines and wine spirits possessed and
                                                 in transit.
    (ii) Distiller, warehouseman and bonded     The sum of the amount of tax                 11,000      250,000
     wine cellar.                                calculated in (a)(1)(iii) and with
                                                 respect to bonded wine cellar
                                                 operations, the amount of tax on
                                                 wines and wine spirits possessed and
                                                 in transit.
    (iii) Distiller, processor and bonded wine  The sum of the amount of tax                 11,000      250,000
     cellar.                                     calculated in (a)(1)(iv) and with
                                                 respect to bonded wine cellar
                                                 operations, the amount of tax on
                                                 wines and wine spirits possessed and
                                                 in transit.
    (iv) Distiller, warehouseman, processor     The sum of the amount of tax                 16,000      300,000
     and bonded wine cellar.                     calculated in (a)(1)(vi) and with
                                                 respect to bonded wine cellar
                                                 operations, the amount of tax on
                                                 wines and wine spirits possessed and
                                                 in transit.
(b) Area operations bond:                       The penal sum shall be calculated in
                                                 accordance with the following table:
---------------------------------------------------------------------------------------
Total penal sums as determined under (a)        Requirements for penal sum of area
                                                 operations bond
---------------------------------------------------------------------------------------
Not over $300,000.............................  100 percent.
Over $300,000 but not over $600,000...........  $300,000 plus 70 percent of excess
                                                 over $300,000.
Over $600,000 but not over $1,000,000.........  $510,000 plus 50 percent of excess
                                                 over $600,000.
Over $1,000,000 but not over $2,000,000.......  $710,000 plus 35 percent of excess
                                                 over $1,000,000.
Over $2,000,000...............................  $1,060,000 plus 25 percent of excess
                                                 over $2,000,000.
---------------------------------------------------------------------------------------
(c) Withdrawal bond:
  (1) One plant qualified for distilled         The amount of tax which, at any one           1,000    1,000,000
   spirits operations.                           time, is chargeable against such bond
                                                 but has not been paid.
  (2) Two or more plants in a region qualified  Sum of the penal sums for each plant         (\1\ )       (\2\ )
   for distilled spirits operations.             calculated in (c)(1) of this section.
(d) Unit bond:
  (1) Both operations at a distilled spirits    Total penal sums of (a) and (c)(1) of         6,000    1,300,000
   plant (and any adjacent bonded wine cellar)   this section.
   and withdrawals from the bonded premises of
   the same distilled spirits plant.

[[Page 335]]

 
  (2) Both operations at two or more distilled  Total penal sums of (b) and (c)(2) of        (\3\ )       (\4\ )
   spirits plants (and any adjacent bonded       this section in lieu of which given.
   wine cellar) within the same region and
   withdrawals from the bonded premises of the
   same distilled spirits plants.
----------------------------------------------------------------------------------------------------------------
\1\ Sum of the minimum penal sums required for each plant covered by the bond.
\2\ Sum of the maximum penal sums required for each plant covered by the bond. (The maximum penal sum for one
  plant is $1,000,000.)
\3\ Sum of the minimum penal sums for operations and withdrawal bonds required for each plant covered by the
  bond.
\4\ Sum of the maximum penal sums for area operations bonds and withdrawal bonds required for the plants covered
  by the unit bond.


(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]



Sec. 19.246  Strengthening bonds.

    In all cases when the penal sum of any bond becomes insufficient, 
the principal shall either give a strengthening bond with the same 
surety to attain a sufficient penal sum, or give a new bond to cover the 
entire liability. Strengthening bonds will not be approved where any 
notation is made thereon which is intended, or which may be construed, 
as a release of any former bond, or as limiting the amount of any bond 
to less than its full penal sum. Strengthening bonds shall show the 
current date of execution and the effective date.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1394, as amended (26 U.S.C. 5551); 
sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))

                        New or Superseding Bonds



Sec. 19.247  General.

    New bonds shall be required in case of insolvency or removal of any 
surety, and may, at the discretion of the regional director 
(compliance), be required in any other contingency affecting the 
validity or impairing the efficiency of such bond. Executors, 
administrators, assignees, receivers, trustees, or other persons acting 
in a fiduciary capacity, continuing or liquidating the business of the 
principal, shall execute and file a new bond or obtain the consent of 
the surety or sureties on the existing bond or bonds. When, under the 
provisions of Sec. 19.250, the surety on any bond given under this 
subpart has filed an application to be relieved of liability under said 
bond and the principal desires or intends to continue the business of 
operations to which such bond relates, he shall file a valid superseding 
bond to be effective on or before the date specified in the surety's 
notice. New or superseding bonds shall show the current date of 
execution and the effective date.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended, 1394, as amended 
(26 U.S.C. 5175, 5176, 5551); sec. 805(c), Pub. L. 96-39, 93 Stat. 276 
(26 U.S.C. 5173))



Sec. 19.248  New or superseding bond.

    (a) Operations bond. When a new or superseding operations bond is 
not given as required in Sec. 19.247, the principal shall immediately 
discontinue the business or distilled spirits operations to which such 
bond relates.
    (b) Withdrawal bond. When a new or superseding withdrawal bond is 
not given as required by Sec. 19.247, the principal may not withdraw any 
distilled spirits from bonded premises (other than distilled spirits 
withdrawn under 26 U.S.C. 5214 or 7510) except on prior payment of tax.
    (c) Unit bond. When a new or superseding unit bond is not given as 
required by Sec. 19.247, the principal shall immediately discontinue the 
business or distilled spirits operations to which such bond relates and 
may not withdraw any distilled spirits from bonded premises (other than 
distilled spirits

[[Page 336]]

withdrawn under 26 U.S.C. 5214 or 7510) except on prior payment of tax.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5175, 
5176); sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))

                          Termination of Bonds



Sec. 19.249  Termination of bonds.

    Operations, withdrawal, or unit bonds may be terminated as to 
liability for future withdrawals and/or to future production or 
deposits.
    (a) Pursuant to application of the surety as provided in 
Sec. 19.250.
    (b) On approval of a superseding bond.
    (c) On notification by the principal that he has discontinued 
withdrawals under the bond if such bond was filed solely as a withdrawal 
bond, or
    (d) On notification by the principal that he has discontinued 
business.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5175, 
5176); sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))



Sec. 19.250  Application of surety for relief from bond.

    A surety on any operations, withdrawal, or unit bond may at any time 
in writing notify the principal and the regional director (compliance) 
in whose office the bond is on file that he desires, after a date named, 
to be relieved of liability under said bond. Such date shall be not less 
than 10 days after the date the notice is received by the regional 
director (compliance) in the case of a withdrawal bond, and not less 
than 90 days after the date the notice is received in the case of an 
operations or unit bond. The surety shall also file with the regional 
director (compliance) an acknowledgment or other proof of service on the 
principal. If such notice is not thereafter in writing withdrawn, the 
rights of the principal as supported by said bond shall be terminated on 
the date named in the notice, and the surety shall be relieved from 
liability to the extent set forth in Sec. 19.251.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5175, 
5176); sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))



Sec. 19.251  Relief of surety from bond.

    (a) General. The surety on an operations, withdrawal, or unit bond 
who has filed application for relief from liability as provided in 
Sec. 19.250 shall be relieved from liability under such bond as set 
forth in this section.
    (b) Operations or unit bonds. Where a new or superseding bond is 
filed, the surety shall be relieved of future liability with respect to 
production and deposits wholly subsequent to the effective date of the 
new or superseding bond. Notwithstanding such relief, the surety shall 
remain liable for the tax on all distilled spirits or wines produced, or 
for other liabilities incurred, during the term of the bond. Where a new 
or superseding bond is not filed the surety shall, in addition to the 
continuing liabilities above specified, remain liable under the bond for 
all spirits or wines on hand or in transit to the bonded premises or 
bonded wine cellar, as the case may be, on the date named in the notice 
until all such spirits or wines have been lawfully disposed of, or a new 
bond has been filed by the principal covering the same.
    (c) Withdrawal or unit bonds. The surety shall be relieved from 
liability for withdrawals made wholly subsequent to the date specified 
in the notice, or the effective date of a new bond, if one is given.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5176,); 
sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))



Sec. 19.252  Release of pledged securities.

    Securities of the United States pledged and deposited as provided in 
Sec. 19.234 shall be released only in accordance with the provisions of 
31 CFR part 225. Such securities will not be released by the regional 
director (compliance) until liability under the bond for which they were 
pledged has been terminated. When the regional director (compliance) is 
satisfied that they may be released, he shall fix the date or dates on 
which a part or all of such securities may be released. At any time 
prior to the release of such securities, the regional director 
(compliance) may extend the date of release for such additional length 
of time as he deems necessary.

(Ch. 290, Pub. L. 80-280, 61 Stat. 650 (31 U.S.C. 9301, 9303))

[[Page 337]]



             Subpart I--Construction, Equipment and Security



Sec. 19.271  Construction of buildings

    Buildings in which spirits, denatured spirits, articles, or wines 
are produced, stored, or processed shall be constructed with substantial 
material (e.g., masonry, concrete, wood, metal, etc.), and arranged, 
equipped, and protected to provide adequate security to the revenue.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended) (26 U.S.C. 5178))



Sec. 19.272  Equipment.

    The proprietor shall provide equipment suitable for the operations 
conducted on the distilled spirits plant. The equipment shall also meet 
the needs for revenue protection.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended) (26 U.S.C. 5178))



Sec. 19.273  Tanks.

    (a) General. (1) Tanks used as receptacles for spirits, denatured 
spirits, or wines shall be located, constructed, and equipped to be 
suitable for the intended purpose and to allow ready examination.
    (2) An accurate means of measuring the contents of each tank shall 
be provided by the proprietor.
    (3) When a means of mearuring is not a permanent fixture of the 
tank, the tank shall be equipped with a fixed device to allow the 
approximate contents to be determined readily.
    (4) Tanks used for determining the tax imposed by 26 U.S.C. 5001 
shall be mounted on scales and an additional suitable device shall be 
provided so that the volume of the contents can be quickly and 
accurately determined.
    (5) The proprietor shall install walkways, landings and stairways 
which will permit safe access to all parts of a tank.
    (6) Tanks in which gauges required by this part are to be made shall 
not be used until they are accurately calibrated and a statement of 
certification of accurate calibration is included in the notice of 
registration.
    (7) If tanks or their fixed gauging devices are moved in location or 
position subsequent to original calibration, the tanks shall not be used 
until recalibrated.
    (8) All tanks shall be equipped or situated so that they may be 
locked or otherwise secured.
    (9) Any tank vents, flame arresters, foam devices, or other safety 
devices shall be constructed to prevent extraction of spirits or wines.
    (b) Scale tanks. (1) Beams or dials of scale tanks used for 
determining the tax imposed by 26 U.S.C. 5001 shall have minimum 
graduations not greater than the following:

------------------------------------------------------------------------
          Quantity to be weighed                 Minimum graduation
------------------------------------------------------------------------
Not exceeding 2,000 pounds...............  \1/2\ pound;
Between 2,000 and 6,000 pounds...........  1 pound;
Between 6,000 and 20,000 pounds..........  2 pounds;
Between 20,000 and 50,000 pounds.........  5 pounds;
Over 50,000 pounds.......................  10 pounds.
------------------------------------------------------------------------

    (2) For scales having a capacity greater than 2,000 pounds, the 
minimum quantity which may be entered onto the weighing tank scale for 
gauging for tax determination shall be the greater of
    (i) 1,000 times the minimum graduation of the scale or
    (ii) 5 percent of the total capacity of the weighing tank scale.
    (3) The weighing of lesser quantities for determination of tax may 
be authorized by the regional director (compliance) where the beam of 
the scale is calibrated in \1/2\ pound or 1 pound graduations and it is 
found by actual test that the scales break accurately at each 
graduation.
    (4) Lots of spirits weighing 1,000 pounds or less shall be weighed 
on scales having \1/2\ pound graduations.
    (c) Testing of scale tanks. (1) Proprietors shall ensure the 
accuracy of scales used for weighing lots of spirits or denatured 
spirits through tests conducted at intervals of not more than 6 months, 
and whenever scales are adjusted or repaired.
    (2) Proprietors shall also test, at least once a month, the 
gallonage represented to be in a scale tank against the gallonage 
indicated by volumetric determination of the contents of the tank. 
However, if the scale is not used during a month the volumetric 
determination need only be verified at the next time actually used.

[[Page 338]]

    (3) The volumetric determination shall be made in accordance with 27 
CFR part 30, and if the variation exceeds 0.5 percent of the quantities 
shown to be in the tank, the proprietor shall take appropriate steps to 
have the accuracy of the scale verified.
    (4) When an ATF officer determines that a tank scale may be 
inaccurate, the proprietor shall have the accuracy of the scale tested.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1320, as amended, 1358, as amended, 
1391, as amended (26 U.S.C. 5006, 5204, 5505))



Sec. 19.274  Pipelines.

    (a) General. (1) Pipelines for the conveyance of spirits, denatured 
spirits, articles, or wines shall be of permanent character and 
constructed, connected, arranged, and secured so as to afford adequate 
protection to the revenue and to permit ready examination. However, the 
regional director (compliance) may approve pipelines which may not be 
readily examined if no jeopardy to the revenue is created.
    (2) Where a pipeline connection must be flexible, a hose may be used 
if connected and secured so as to protect the revenue.
    (b) Identification. The regional director (compliance) may require 
permanent pipelines for conveyance of spirits or denatured spirits to be 
color coded to provide identification.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))



Sec. 19.275  Continuous distilling system.

    The distilling system shall be continuous, and designed, 
constructed, and connected in such a manner as to prevent the 
unauthorized removal of distilled spirits.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))



Sec. 19.276  Package scales.

    Proprietors shall ensure the accuracy of scales used for weighing 
packages of spirits through tests conducted at intervals of not more 
than 6 months or whenever scales are adjusted or repaired. However, if 
the scales are not used during such period, the scales need only be 
tested prior to use. Scales used to weigh packages designed to hold 10 
wine gallons or less shall indicate weight in ounces or in hundredths of 
a pound.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))



Sec. 19.277  Measuring devices and proofing instruments.

    (a) General. Proprietors shall provide for their own use accurate 
hydrometers, thermometers, and other necessary equipment to determine 
proof or volume.
    (b) Instruments. Hydrometers and thermometers used by proprietors to 
gauge spirits shall show subdivisions or graduations of proof and 
temperature which are at least as delimitated as those prescribed in 27 
CFR part 30. Proprietors shall make frequent tests of their hydrometers 
and thermometers, and, if they appear to be in error in excess of one 
subdivision, the instruments shall not be used until they are further 
tested and certified as accurate by the manufacturer or another 
qualified person.
    (c) Meters. The regional director (compliance) may approve 
applications to measure spirits by meter for purposes other than tax 
determination. Applications shall include sufficient technical data, 
such as the make, model and accuracy tolerance, to enable the regional 
director (compliance) to evaluate the suitability of the meter for its 
intended use. Corrections for temperature of the spirits being measured 
shall be made in conjunction with the volumetric measurement of spirits 
by meter. If a meter does not have a temperature compensating feature, 
temperature correction shall be ascertained and made from a 
representative sample taken from the spirits being measured.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))



Sec. 19.278  Identification of structures, areas, apparatus, and equipment.

    (a) Each room or enclosed area where spirits, denatured spirits, 
articles, wine, distilling or fermenting materials, or containers are 
held, and each building, within the plant, shall be appropriately marked 
with a distinguishing number or letter.

[[Page 339]]

    (b) Each tank or receptacle for spirits, denatured spirits, or wine 
shall be marked to show a unique serial number and capacity.
    (c) Each still, fermenter, cooker, and yeast tank shall be numbered 
and marked to show its use.
    (d) All other major equipment used for processing or containing 
spirits, denatured spirits, or wine, or distilling or fermenting 
material, and all other tanks, shall be identified as to use unless the 
intended purpose is readily apparent.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))



Sec. 19.279  Office facilities.

    (a) If the regional director (compliance) assigns on a continuing 
basis an ATF officer to a plant to supervise operations, the proprietor 
shall provide an office at the distilled spirits plant for the exclusive 
use of ATF officers in performing their duties. The office shall be 
provided with adequate office furniture, lighting, ventilation, heating, 
and toilet and lavatory facilities. A secure cabinet, fitted for locking 
with a Government lock and of adequate size, shall also be provided by 
the proprietor. The office, facilities, and equipment provided by the 
proprietor shall be subject to the approval of the regional director 
(compliance). Where suitable facilities are otherwise available, the 
regional director (compliance) may waive the requirements for a separate 
Government office.
    (b) If an ATF officer is not assigned to a plant on a continuing 
basis, the regional director (compliance) may require the proprietor to 
provide for Government use a cabinet as specified in paragraph (a) of 
this section.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))



Sec. 19.280  Signs.

    The proprietor shall place and keep conspicuously on the outside of 
his place of business a sign showing the name of the proprietor and 
denoting the business, or businesses, in which engaged.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1355, as amended (26 U.S.C. 5180))



Sec. 19.281  Security.

    (a) General. The proprietor shall provide adequate security measures 
at the distilled spirits plant to protect the revenue.
    (b) Buildings. The buildings, rooms, and partitions shall be 
constructed of substantial materials. Doors, windows, or any other 
openings to the building shall be secured or fastened during times when 
distilled spirits plant operations are not being conducted.
    (c) Outdoor tanks. Outdoor tanks containing spirits, denatured 
spirits, or wine shall be individually locked or locked within an 
enclosure when they are not in use.
    (d) Indoor tanks. Indoor tanks containing spirits, denatured 
spirits, or wines or the rooms or buildings in which they are housed, 
shall be equipped so that they may be secured.
    (e) Approved locks. (1) Approved locks shall be used to secure:
    (i) Outdoor tanks containing spirits in the storage account or on an 
enclosure around such tanks;
    (ii) Indoor tanks containing spirits in the storage account or on 
the door from which access may be gained from the outside to the rooms 
or buildings in which such tanks are housed; and
    (iii) Any doors from which access may be gained from the outside to 
rooms or buildings containing spirits in portable bulk containers in the 
storage account.
    (2) Approved locks shall meet the following minimum specifications:
    (i) Corresponding serial number on the lock and on the key, except 
for master key locking systems;
    (ii) Case hardened shackle at least one-fourth inch in diameter, 
with heel and toe locking;
    (iii) Body width of at least 2;
    (iv) Captured key feature (key may not be removed while shackle is 
unlocked);
    (v) Tumbler with at least 5 pins; and
    (vi) Lock or key contains no bitting data.

Master key locking systems may be used at the option of the proprietor. 
Locks meeting the specifications in this section are approved locks for 
the purpose of 26 U.S.C. 5682. Proprietors

[[Page 340]]

who wish to use locks of unusual design, which do not meet the 
specifications in this part, shall submit an example or prototype of the 
lock to the Director, through the regional director (compliance), with a 
request that the lock be approved for use. The Director may require 
submission of the lock for testing prior to approval.
    (f) Additional security. Where the regional director (compliance) 
finds the construction, arrangement, equipment, or protection 
inadequate, additional security shall be provided (i.e., fences, flood 
lights, alarm systems, guard services) or changes in construction, 
arrangement, or equipment shall be made to be extent necessary to 
protect the revenue.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended, 1410, as amended 
(26 U.S.C. 5178, 5682); sec. 806, Pub. L. 96-39, 93 Stat. 279 (26 U.S.C. 
5202))



Sec. 19.282  Breaking Government locks.

    Where affixed, Government locks shall not be removed without the 
authorization of the area supervisor or an ATF officer, except where a 
person or property is in imminent danger from a disaster or other 
emergency. When a disaster or other emergency occurs, and it is 
impractical to first obtain authorization from an ATF officer, 
Government locks may be removed, by the proprietor, or by police or 
firefighters. When such action is taken, the proprietor shall see that 
security measures are taken to prevent illegal removal of spirits and, 
as soon as practical, shall notify the area supervisor of the action 
taken and submit within 5 days a written report, executed under the 
penalties of perjury, describing the emergency and the action.

(Sec. 806, Pub. L. 96-39, 93 Stat. 279 (26 U.S.C. 5202))



                          Subpart J--Production



Sec. 19.311  Notice by proprietor.

    (a) Commencement of operations. The proprietor shall, before 
commencing production operations or resuming production operations after 
having given notice of suspension, file a notice on Form 5110.34 with 
the area supervisor, specifying the date on which he desires to commence 
or resume operations for the production of spirits. The notice shall be 
filed in accordance with the instructions on the form. The proprietor 
shall not commence or resume operations prior to the time specified in 
the notice.
    (b) Suspension of operations. Any proprietor desiring to suspend 
production operations for a period of 90 days or more shall file notice 
on Form 5110.34 with the area supervisor specifying the date on which he 
will suspend operations. The notice shall be filed in accordance with 
instructions on the form. In case of an accident which makes it apparent 
that operations cannot be conducted for 90 days or more, the proprietor 
shall give immediate notice of suspension on Form 5110.34.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1364, as amended (26 U.S.C. 5221))



Sec. 19.312  Receipt of materials.

    The quantities of fermenting and distilling materials (including 
nonpotable chemical mixtures containing spirits produced in accordance 
with Sec. 19.67), and of spirits, denatured spirits, articles, and 
spirits residues, for redistillation, received on bonded premises shall 
be determined by the proprietor, and reported as provided in subpart W 
of this part. Fermented material (except apple cider exempt from tax 
under 26 U.S.C. 5042(a)(1)) to be used in the production of spirits 
shall be produced on the bonded premises where used or must be received 
on the premises from (a) a bonded wine cellar, in the case of wine, or 
(b) a contiguous brewery where produced, in the case of beer.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1365, as amended 
(26 U.S.C. 5201, 5222, 5223))



Sec. 19.313  Use of materials in production of spirits.

    The proprietor may produce spirits from any suitable material in 
accordance with statements of production procedure in his notice of 
registration. The distillation of nonpotable chemical mixtures received 
pursuant to application as provided in Sec. 19.67 shall be deemed to be 
the original and continuous distillation of the spirits in such mixtures 
and to constitute the production of spirits. Materials from which

[[Page 341]]

alcohol will not be produced may be used in production only if the use 
of the materials is described in approved statements of production 
procedure.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1353, as amended 
(26 U.S.C. 5172, 5178))



Sec. 19.314  Removal of fermenting material.

    Material received for use as fermenting material may be removed from 
or used on bonded premises for other purposes. A record of use or 
removal shall be kept as provided in subpart W of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.315  Removal or destruction of distilling material.

    Except as provided in this section, distilling material shall not be 
removed from bonded premises before being distilled. The proprietor may 
remove mash, wort, wash or other distilling material--(a) to plant 
premises, other than bonded premises for use in such businesses as may 
be authorized under Sec. 19.72; (b) to other premises for use in 
processes not involving the production of (1) spirits, (2) alcoholic 
beverages, or (3) vinegar by the vaporizing process; or (c) for 
destruction. The residue of distilling material not introduced into the 
production system may be removed from the premises if the liquid is 
expressed from the material before removal and such liquid is not 
received at any distilled spirits plant or bonded wine cellar. Residue 
of beer used as distilling material may be returned to the producing 
brewery. Distilling material produced and wine and beer received for use 
as distilling material may be destroyed. A record of removal or 
destruction shall be kept as provided in subpart W of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1365, as amended, 1381, as amended 
(26 U.S.C. 5222, 5370))



Sec. 19.316  Distillation.

    The distillation of spirits shall be such that the spirits pass 
through a continuous system from the first still or other production 
equipment where access to the system would constitute a jeopardy to the 
revenue until the production of the spirits is completed. The distiller 
may, in the course of production, convey the product through as many 
distilling or other production operations as desired, provided the 
operations are continuous. Distilling operations are continuous when the 
spirits are conveyed through the various steps of production as 
expeditiously as plant operation will permit. The collection of 
unfinished spirits for the purpose of redistillation is not deemed to be 
a break in the continuity of the distilling procedure. However, the 
quantity and proof of any unfinished spirits produced from distilling 
materials, the quantity of which was ascertained in the manner 
authorized in Sec. 19.732(c) for such materials, shall be determined and 
recorded before any mingling with other materials or before any further 
operations involving the unfinished spirits outside the continuous 
system. Spirits may be held, prior to the production gauge, only for so 
long as is reasonably necessary to complete the production procedure.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended, 1362, as amended, 
1365, as amended (26 U.S.C. 5178, 5211, 5222))



Sec. 19.317  Treatment during production.

    Spirits may, in the course of original and continuous distillation, 
be purified or refined through, or by use of, any material which will 
not remain incorporated in the finished product. Juniper berries and 
other natural aromatics, or the extracted oils of such, may be used in 
the distillation of gin. Spirits may be percolated through or treated 
with oak chips which have not been treated with any chemical. Materials 
used in treatment of spirits, and which do not remain in the spirits, 
shall be destroyed or so treated as to preclude the extraction of 
potable spirits therefrom.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.318  Addition of caramel to rum or brandy and addition of oak chips to spirits.

    Caramel possessing no material sweetening properties may be added to 
rum or brandy on bonded premises prior to production gauge. Oak chips

[[Page 342]]

which have not been treated with any chemical may be added to packages 
prior to or after production gauge; however, notation to that effect 
shall be made on the record of production gauge as provided in 
Sec. 19.319.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.319  Production gauge.

    (a) General. All spirits shall be gauged by determining quantity and 
proof within a reasonable time after production is completed. Except as 
otherwise specifically provided in this section, quantities may be 
determined by volume or by weight, by approved meter, or, when approved 
by the Director, by other devices or methods which accurately determine 
the quantities. If caramel is added to brandy or rum, the proof of the 
spirits shall be determined after the addition. Spirits in each 
receiving tank shall be gauged before reduction in proof and both before 
and after each removal of spirits therefrom. The gauges shall be 
recorded by the proprietor in the records required by Sec. 19.736.
    (b) Tax to be determined on production gauge. Tax may be determined 
on the basis of the production gauge if:
    (1) Spirits are weighed into bulk conveyances;
    (2) Spirits are uniformly filled by weight into metal packages; or
    (3) Spirits are filled by weight into packages for immediate 
withdrawal from bonded premises and the details of the gauge for each 
package are recorded on a package gauge record according to Sec. 19.769.

Transaction records shall be marked ``Withdrawal on Production Gauge.''
    (c) Tax not to be determined on production gauge. If spirits are 
drawn from the production system into barrels, drums, or similar 
portable containers of the same rated capacity and the containers are 
filled to capacity, and the tax is not to be determined on the basis of 
the production gauge, the gauge may be made by:
    (1) Weighing in a tank, converting the weight into proof gallons, 
and determining the average content of each container; or
    (2) Measuring volumetrically, in a calibrated tank, converting the 
wine gallons determined into proof gallons, and determining therefrom 
the average content of each container; or
    (3) Converting the rated capacity into proof gallons to determine 
the average content of each container; or
    (4) Determining by a device or method approved under the provisions 
of paragraph (a) of this section, the total quantity filled into 
containers, and determining therefrom the average content of each 
container. Rated capacity of new cooperage shall be as prescribed by 
specifications of the manufacturer, or in the case of used cooperage, as 
determined by the proprietor.
    (d) Records of production gauge. In computing the production gauge 
on the basis of average content of packages as provided in paragraph (c) 
of this section, fractional proof gallons shall be rounded to the 
nearest one-tenth and the average content so determined and the number 
of packages filled shall be used in computing the quantity produced. A 
separate gauge record, as prescribed in Sec. 19.768, shall be prepared 
for each lot of packages filled (see Sec. 19.593(b)) and for each 
removal by pipeline or bulk conveyance for deposit in bond on the same 
plant premises. The gauge record shall indicate ``Deposit in storage'' 
or ``Deposit in processing.'' If spirits are to be transferred in bond, 
or withdrawn from bond, as authorized by this part, the production gauge 
shall be made on the form or record required by this part for the 
transaction (accompanied by a package gauge record, if required). Each 
transaction form or record and each package gauge record, if any, shall 
show:
    (1) The real name (or basic operating name as provided in 
Sec. 19.280) of the producer, and, if the spirits are produced under a 
trade name, the trade name under which produced.
    (2) For each remnant container, the actual proof gallons in the 
container.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1362, as amended 
(26 U.S.C. 5204, 5211))



Sec. 19.320  Identification of spirits.

    At the time of production gauge, containers of spirits shall be 
identified by the proprietor in accordance with subpart R of this part. 
When the proprietor desires to enter spirits into bonded

[[Page 343]]

storage for subsequent packaging in wooden packages, he may identify 
such spirits with the specific designation to which they would be 
entitled if drawn into wooden packages, followed by the word 
``Designate,'' for example, ``Bourbon Whisky Designate.''

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1360, as amended 
(26 U.S.C. 5201, 5206))



Sec. 19.321  Entry.

    Pursuant to the production gauge, the proprietor shall make 
appropriate entry for (a) deposit of the spirits on bonded premises for 
storage or processing, (b) withdrawal of the spirits on determination of 
tax, (c) withdrawal of the spirits free of tax, (d) withdrawal of the 
spirits without payment of tax, or (e) transfer of the spirits for 
redistillation. Entry for deposit on the bonded premises of the same 
plant premises shall be made on a gauge record, prepared according to 
Sec. 19.768. When spirits are entered for deposit on another plant 
premises or are entered for withdrawal or redistillation, the applicable 
provisions of subpart K or subpart P of this part shall be followed.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 5211))



Sec. 19.322  Distillates containing extraneous substances.

    (a) Use in production. Distillates containing substantial quantities 
of fusel oil, aldehydes, or other extraneous substances may be removed 
from the distilling system prior to the production gauge for addition to 
fermenting or distilling material at the distillery where produced. 
Distillates removed from the distilling system under the provisions of 
this paragraph shall be added promptly to the fermenting or distilling 
material.
    (b) Use at bonded wine cellar. Distillates containing aldehydes may 
be removed, without payment of tax, to an adjacent bonded wine cellar 
for use therein for fermentation of wine to be used as distilling 
material at the distilled spirits plant from which the distillates were 
removed. The gauge and removal of distillates to an adajcent bonded wine 
cellar shall be in accordance with applicable provisions of subpart P of 
this part relating to withdrawal of wine spirits for use in wine 
production and the receipt and use of such distillates at an adjacent 
bonded wine cellar shall be in accordance with the provisions of 27 CFR 
part 240.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1365, as amended, 
1382, as amended (26 U.S.C. 5201, 5222, 5373))

                                 Formula



Sec. 19.324  Statement of production procedure or Form 5110.38.

    (a) A statement of production procedure is required as provided in 
Sec. 19.170 for the production of spirits from original sources or 
substances.
    (b) As provided in 27 CFR 5.27, an approved formula on Form 5110.38 
is required for the redistillation of spirits in the production account.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1365, as amended, 
1395, as amended (26 U.S.C. 5201, 5222, 5223, 5555))

                          Chemical By-Products



Sec. 19.326  Spirits content of chemicals produced.

    All chemicals produced, including chemical by-products of the 
spirits production system, shall be substantially free of spirits before 
being removed from bonded premises. Except as authorized by the 
Director, the spirits content of such chemicals to be removed from 
bonded premises shall not exceed 10 percent by volume. Proprietors shall 
test chemicals for spirits content. Records of the tests will be 
maintained according to Sec. 19.736.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.327  Disposition of chemicals.

    Chemicals meeting the requirements in Sec. 19.326 may be removed 
from bonded premises by pipeline or in such containers as the proprietor 
may desire. The quantities of such chemicals removed from bonded 
premises shall be determined by the proprietor and records of removals 
maintained according to Sec. 19.736. Packages of such chemicals shall be 
appropriately marked by the proprietor to show the nature of

[[Page 344]]

the contents. Samples of such chemicals may be secured by ATF officers.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1365, as amended 
(26 U.S.C. 5201, 5222))



Sec. 19.328  Wash water.

    Water used in washing chemicals to remove spirits therefrom may be 
run into a wash tank or a distilling material tank, or otherwise 
properly destroyed or disposed of on the premises.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended, 1356, as amended 
(26 U.S.C. 5008, 5201))

                               Inventories



Sec. 19.329  Production inventories.

    Each distiller shall take a physical inventory of the spirits and 
denatured spirits in tanks and other vessels in the production account 
at the close of each calendar quarter and at such other times as the 
regional director (compliance) may require. The inventory shall show 
separately spirits and denatured spirits received for redistillation.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



                        Subpart K--Redistillation



Sec. 19.331  General.

    Distillers or processors may redistill spirits, denatured spirits, 
articles, and spirits residues. Certain products may only be redistilled 
pursuant to an approved formula on Form 5110.38, as specified in 27 CFR 
5.27.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1365, as amended (26 U.S.C. 5223))



Sec. 19.332  Receipts for redistillation.

    Proprietors may receive and redistill spirits or denatured spirits 
which (a) have not been removed from bond; (b) have been withdrawn from 
bond on payment or determination of tax, and are eligible for return to 
bond as provided in subpart U of this part; (c) have been withdrawn from 
bond free of tax or without payment of tax, and are eligible for return 
to bond as provided in subpart U; or (d) have been abandoned to the 
United States and sold to the proprietor without the payment of tax. 
Proprietors may also receive and redistill recovered denatured spirits 
and recovered articles returned under the provisions of Sec. 19.683, and 
articles and spirits residues received under the provisions of 
Sec. 19.684.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1365, as amended 
1370, as amended (26 U.S.C. 5201, 5223, 5243); sec. 807, Pub. L. 96-93 
Stat. 285 (26 U.S.C. 5215))



Sec. 19.333  Redistillation.

    Spirits shall not be redistilled at a proof lower than that 
prescribed for the class and type at which such spirits were originally 
produced, unless the redistilled spirits are to be used in wine 
production, to be used in the manufacture of gin or vodka, or to be 
designated as alcohol. Different kinds of spirits must be redistilled 
separately, or with distilling material of the same kind or type as that 
from which the spirits were originally produced. However, such 
restriction shall not apply when (a) brandy is redistilled into 
``spirits-fruit'' or ``neutral spirits-fruit'' (not for use in wine 
production), (b) whiskey is distilled into ``spirits-grain'' or 
``neutral spirits-grain'', (c) spirits originally distilled from 
different kinds of material are redistilled into ``spirits-mixed'' or 
``neutral spirits-mixed'', or (d) the spirits are redistilled into 
alcohol. All spirits redistilled subsequent to production gauge shall be 
treated the same as if such spirits had been originally produced by the 
redistiller and all provisions of this part and 26 U.S.C. Chapter 51 
(including liability for tax attaching to spirits at the time of 
production) applicable to the original production of spirits shall be 
applicable thereto, except that spirits recovered by redistillation of 
denatured spirits, articles, or spirits residues may not be withdrawn 
from bonded premises except for industrial use or after denaturation 
thereof. Nothing in this section shall be construed as affecting any 
provision of this chapter or of 27 CFR part 5 relating to the labeling 
of distilled spirits.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1365, as amended (26 U.S.C. 5223); 
sec. 807, Pub. L. 96-39, 93 Stat. 285 (26 U.S.C. 5215))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]

[[Page 345]]



                           Subpart L--Storage



Sec. 19.341  General.

    Proprietors who are qualified as warehousemen as provided in this 
part, and who have otherwise complied with the requirements of this part 
for the storage of bulk distilled spirits and wines, shall conduct such 
operations pursuant to the provisions of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.342  Receipt and storage of bulk spirits and wines.

    (a) Deposit. All spirits entered for deposit in the storage account 
after production as provided in subpart J shall be deposited on the 
bonded premises designated in the entry for deposit. Spirits withdrawn 
from customs custody without payment of tax under the provisions of this 
part shall be received on the bonded premises to which so withdrawn and 
(unless to be immediately redistilled) shall be deposited on such 
premises. Spirits transferred in bond as provided in subpart P shall be 
deposited on the bonded premises designated on the transfer record.
    (b) Tanks. If spirits or wines are being deposited in a partially 
filled tank in storage on bonded premises, simultaneous withdrawals may 
not be made therefrom unless the flow of spirits or wines into and out 
of the tank isbeing measured by meters or other devices approved by the 
regional director (compliance) which permit a determination of the 
quantity being deposited and the quantity being removed. Proprietors 
shall maintain records of spirits or wines in tanks in accordance with 
subpart W of this part.
    (c) Storage. Spirits or wines may be held in the storage account in 
tanks or portable bulk containers on the bonded premises. When used for 
such storage, containers shall be kept so that they can be readily 
inspected or inventoried by ATF officers.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1362, as amended, 
1366, as amended, 1398, as amended (26 U.S.C. 5201, 5211, 5212, 5232, 
5601); sec. 806(a), Pub. L. 96-39, 93 Stat. 279 (26 U.S.C. 5202); sec. 
807(a), Pub. L. 96-39, 93 Stat. 286 (26 U.S.C. 5231))



Sec. 19.343  Addition of oak chips to spirits and addition of caramel to brandy and rum.

    Oak chips which have not been treated with any chemical may be added 
to packages either prior to or after filling. When oak chips are added 
to packages, notation of such fact shall be made on all transaction 
records. Caramel possessing no material sweetening properties may be 
added to rum or brandy in packages or tanks.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

                      Filling and Changing Packages



Sec. 19.344  Filling of packages from tanks.

    Spirits or wines may be drawn into packages from storage tanks on 
bonded premises. The spirits or wines in the tank shall be gauged prior 
to filling of packages, and when only a portion of the contents of the 
tank is packaged, the spirits or wines remaining in the tank shall be 
again gauged and such gauges shall be recorded by the proprietor in 
records required by Secs. 19.740 and 19.768. The provisions of 
Sec. 19.319 regarding the filling of packages and the taking of 
production gauges of packages shall be applicable to the filling and 
gauging of packages of spirits under this section.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.345  Change of packages.

    Spirits or wines in storage may be transferred from one package to 
another. Except in the case of spirits of 190 degrees or more proof, 
each new

[[Page 346]]

package shall contain spirits from only one package. Packages shall be 
marked as provided in subpart R of this part. In the case of wines, each 
package shall bear the same marks as the package from which the wine was 
transferred.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

                     Mingling or Blending of Spirits



Sec. 19.346  Mingling or blending of spirits for further storage.

    The following mingling or blending operations are permissible in the 
storage account of a warehouseman:
    (a) Mingling of spirits distilled at 190 degrees or more of proof. 
Spirits distilled at 190 degrees or more of proof, whether or not 
subsequently reduced, may be mingled in storage.
    (b) Mingling of spirits distilled at less than 190 degrees of proof. 
Spirits distilled at less than 190 degrees of proof may be mingled for 
withdrawal or further storage if--
    (1) In the case of domestic spirits:
    (i) Such spirits are of the same kind; and
    (ii) Such spirits were produced in the same State.
    (2) In the case of imported spirits:
    (i) Such spirits are of the same kind;
    (ii) Such spirits were produced in the same foreign country; and
    (iii) Such spirits were treated, blended, or compounded in the same 
foreign country and the duty was paid at the same rate.
    (3) In the case of imported spirits which are recognized as 
distinctive products in 27 CFR part 5:
    (i) Such spirits are of the same kind;
    (ii) Such spirits were produced by the same proprietor in the same 
foreign country; and
    (iii) Such spirits were treated, blended, or compounded by the same 
proprietor in the same foreign country and the duty was paid at the same 
rate.
    (c) Permissible blending of beverage rums or brandies. Fruit 
brandies distilled from the same kind of fruit at not more than 170 
degrees of proof may, for the sole purpose of perfecting such brandies 
according to commercial standards, be blended with each other, or with 
any blend of such fruit brandies in storage. Rums may, for the sole 
purpose of perfecting them according to commercial standards, be blended 
with each other, or with any blend of rums.
    (d) Packaging of mingled spirits or blended rums and brandies. 
Packaging after mingling or blending shall be conducted under the 
provisions of Sec. 19.344. If so desired, the mingled or blended spirits 
may be returned to the packages from which they were dumped for mingling 
or blending, or as many of such packages as are necessary.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1362, as amended 
(26 U.S.C. 5201, 5214))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-259, 52 
FR 41423, Oct. 28, 1987]



Sec. 19.347  Packages dumped for mingling.

    When dumping packages of spirits of less than 190 degrees of proof 
for mingling in the storage account, the proprietor shall record such 
mingling on the tank record prescribed in Sec. 19.742 covering such 
tank. When packages of spirits of 190 degrees or more of proof are to be 
mingled, the proprietor shall record such mingling in the tank summary 
record prescribed in Sec. 19.743 for all tanks of spirits of 190 degrees 
or more of proof. Each package of spirits to be mingled under this 
subpart shall be examined by the proprietor, and if any package bears 
evidence of loss due to theft or unauthorized voluntary destruction, 
such package shall not be dumped until the area supervisor has been 
notified.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.348  Determining age of mingled spirits.

    When spirits are mingled, the age of the spirits for the entire lot 
shall be the age of the youngest spirits contained in the lot.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.349  Mingled spirits or wines held in tanks.

    When spirits of less than 190 degrees of proof or wines are mingled 
in a tank, the proprietor shall gauge the spirits or wines in the tank 
and record the

[[Page 347]]

mingling gauge on the tank record prescribed in Sec. 19.742.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

                               Inventories



Sec. 19.353  Storage inventories.

    Each warehouseman shall take a physical inventory of all spirits and 
wines held in the storage account in tanks and other vessels (except 
packages) at the close of each calendar quarter and at such other times 
as the regional director (compliance) may require. The inventory shall 
separately identify spirits and wines. The results of the inventory 
shall be recorded in accordance with subpart W of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Subpart M--Processing Operations Other Than Denaturation and Manufacture 
                               of Articles



Sec. 19.371  General.

    Proprietors, who are qualified as processors as provided in this 
part, shall conduct operations relating to the manufacture, treatment, 
mixing or bottling of distilled spirits on bonded premises pursuant to 
the provisions of this subpart. Proprietors, who conduct operations 
relating to the denaturation of spirits or the manufacture of articles 
on bonded premises, pursuant to the provisions of subpart N of this 
part, shall be qualified as processors.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

   Receipt and Use of Spirits, Wines and Alcoholic Flavoring Materials



Sec. 19.372  Receipt of spirits, wines and alcoholic flavoring materials for processing.

    (a) Proprietors may receive into the processing account--
    (1) Bulk spirits (i) from the production or storage account at the 
same plant, (ii) by transfer in bond from another distilled spirits 
plant, or (iii) on withdrawal from customs custody under 26 U.S.C. 5232;
    (2) Wines (i) from the storage account at the same plant, or (ii) by 
transfer in bond from a bonded wine cellar or another distilled spirits 
plant;
    (3) Spirits returned to bond under the provisions of 26 U.S.C. 5215; 
or
    (4) Alcoholic flavoring materials.
    (b) Spirits and wines received in bulk containers or conveyances 
shall be recorded as dumped on receipt, but may be retained in the 
containers or conveyances in which received until used. Spirits and 
wines received by pipeline shall be deposited in tanks, gauged by the 
proprietor, and recorded as dumped. Alcoholic flavoring materials may be 
retained in the containers in which received or may be transferred to 
another container if the proprietor marks or otherwise indicates 
thereon, the full identification of the original container, the date of 
receipt, and the quantity deposited. Alcoholic flavoring materials and 
nonalcoholic ingredients shall be considered dumped when mixed with 
spirits or wines. The proof gallon content of spirits, wines, and 
alcoholic flavoring materials shall be determined at the time of 
dumping.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.373  Use of spirits, wines and alcoholic flavoring materials.

    A proprietor shall prepare a dump/batch record according to 
Sec. 19.748 for spirits, wines, alcoholic flavoring materials, and 
nonalcoholic ingredients used in the manufacture of a distilled spirits 
product as follows:
    (a) Dump record. When spirits, wines, or alcoholic flavoring 
materials are dumped for use in the manufacture of a distilled spirits 
product, and when spirits are dumped for redistillation in the 
processing account, the proprietor shall prepare a dump record.
    (b) Batch record. The proprietor shall prepare a batch record to 
report:
    (1) The dumping of spirits which are to be used immediately and in 
their entirety in preparing a batch of a product manufactured under an 
approved formula;
    (2) The use of spirits or wines previously dumped, reported on dump 
records and retained in tanks or receptacles; and
    (3) Any combination of ingredients in paragraphs (b) (1) and (2) of 
this section used in preparing a batch of a product

[[Page 348]]

manufactured under an approved formula.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.374  Manufacture of nonbeverage products, intermediate products, or eligible flavors.

    Distilled spirits and wine may be used for the manufacture of 
flavors or flavoring extracts of a nonbeverage nature as intermediate 
products to be used exclusively in the manufacture of other distilled 
spirits products on bonded premises. Nonbeverage products on which 
drawback will be claimed, as provided in 26 U.S.C. 5131-5134, may not be 
manufactured on bonded premises. Premises used for the manufacture of 
nonbeverage products on which drawback will be claimed must be separated 
from bonded premises. For purposes of computing an effective tax rate, 
flavors manufactured on either the bonded or general premises of a 
distilled spirits plant are not eligible flavors.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

[T.D. ATF-297, 55 FR 18063, Apr. 30, 1990]

                               Obscuration



Sec. 19.376  Determining obscuration.

    Proprietors may determine the proof obsecuration as prescribed in 27 
CFR Sec. 30.32 of spirits to be bottled on the basis of a representative 
sample taken: (a) from a storage tank incident to the transfer of the 
spirits to the processing account, or (b) from a tank after the spirits 
have been dumped for processing, whether or not combined with other 
alcoholic ingredients. The obscuration shall be determined after the 
sample has been reduced to within one degree of the proof at which the 
spirits will be bottled. Only water may be added to a lot of spirits to 
be bottled for which the determination of proof obscuration is made from 
a sample under this section. The proof obscuration for products gauged 
pursuant to this section shall be frequently verified by testing samples 
taken from bottling tanks prior to commencement of bottling.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))

                                Formulas



Sec. 19.378  Formula requirements.

    An approved formula on ATF Form 5110.38 must be secured for spirits 
for domestic use or export as provided in 27 CFR 5.26--5.27 before 
processors may blend, mix, purify, refine, compound or treat spirits in 
any manner which results in a change of character, composition, class or 
type of the spirits including redistillation as provided in Sec. 19.331, 
and the production of gin or vodka by other than original and continuous 
distillation.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1395, as amended 
(26 U.S.C. 5201, 5555))

              Bottling, Packaging, and Removal of Products



Sec. 19.381  Removals from processing.

    Spirits shall not be transferred from processing to the storage 
account. Processors may remove--
    (a) Spirits upon tax determination or withdrawal under the 
provisions of 26 U.S.C. 5214 or 26 U.S.C. 7510;
    (b) Spirits to the production account at the same plant for 
redistillation;
    (c) Bulk spirits by transfer in bond to the production or the 
processing account at another distilled spirits plant for redistillation 
or further processing;
    (d) Spirits or wines for authorized voluntary destruction; or
    (e) Wines by transfer in bond to a bonded wine cellar or to another 
distilled spirits plant. However, wine may not be removed from the 
bonded premises of a distilled spirits plant for consumption or sale as 
wine. Spirits may be bottled and cased for removal. Spirits or wines may 
be removed in any approved bulk container, by pipeline or in bulk 
conveyances on compliance with the provisions of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended, 1320, as amended, 
1323, as amended, 1356, as amended, 1360, as amended, 1362, as amended, 
1365, as amended, 1380, as amended (26 U.S.C. 5001, 5006, 5008, 5201, 
5206, 5212, 5214, 5223, 5362))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-230, 51 
FR 21748, June 16, 1986]

[[Page 349]]



Sec. 19.382  Bottling tanks.

    All spirits shall be bottled from tanks listed and certified as 
accurately calibrated in the notice of registration. However, the 
regional director (compliance) may authorize bottling from original 
packages or special containers where it is impracticable to use a 
bottling tank. Bottlers desiring to bottle from packages or special 
containers shall file notice with the area supervisor. The notice shall 
show the necessity for the operations.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.383  Bottling tank gauge.

    When a distilled spirits product is to be bottled or packaged, the 
proprietor shall gauge the product, on completion of any filtering, 
reduction, or other treatment, and prior to commencement of bottling or 
packaging. Any gauge made under this section shall be made at labeling 
or package marking proof while the product is in the tank from which it 
is to be bottled or packaged, and the details of the gauge shall be 
entered on the bottling and packaging record prescribed in Sec. 19.749.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.384  Preparation of bottling or packaging record.

    The proprietor shall prepare a record for each batch of spirits 
bottled or packaged according to the specifications in Sec. 19.749.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.385  Labels to agree with contents of tanks and containers.

    Labels affixed to containers shall agree in every respect with the 
spirits in the tanks from which the containers were filled. If they do 
not the proprietor shall relabel such spirits with a proper label. The 
proprietor's records shall be such that they will enable ATF officers to 
readily determine, by case or package serial number, which label was 
used on any given filled container.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.386  Alcohol content and fill.

    (a) General. (1) At representative intervals during bottling 
operations, proprietors shall test and examine bottled spirits to 
determine whether those spirits agree in alcohol content and quantity 
(fill) with that stated on the label or bottle.
    (2) If the regional director (compliance) finds that a proprietor's 
test procedures do not protect the revenue and ensure label accuracy of 
the bottled product, the regional director may require corrective 
measures.
    (b) Variations in alcohol content and fill. The proprietor shall 
rebottle, recondition, or relabel spirits if the bottle contents do not 
agree with the respective data on the label or bottle as to:
    (1) Quantity (fill), except for such variation as may occur in 
filling conducted in compliance with good commercial practice with an 
overall objective of maintaining 100 percent fill for spirits bottled; 
and/or
    (2) Alcohol content, subject to a normal drop in alcohol content 
which may occur during bottling operations not to exceed:
    (i) 0.25 percent alcohol by volume for products containing solids in 
excess of 600 mg per 100 ml, or
    (ii) 0.25 percent alcohol by volume for all spirits products bottled 
in 50 or 100 ml size bottles, or
    (iii) 0.15 percent alcohol by volume for all other spirits and 
bottle sizes.

For example, a product with a solids content of less than 600 mg per 100 
ml, labeled as containing 40 percent alcohol by volume and bottled in a 
750 ml bottle, would be acceptable if the test for alcohol content found 
that it contained 39.85 percent alcohol by volume.
    (c) Records. Proprietors shall record the results of all tests of 
alcohol content and quantity (fill) in the record required by 
Sec. 19.750.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1394, as amended 
(26 U.S.C. 5201, 5301)

[51 FR 36395, Oct. 10, 1986, as amended by T.D. ATF-288, 54 FR 47770, 
Nov. 17, 1989]



Sec. 19.387  Completion of bottling.

    When the contents of a bottling tank are not completely bottled at 
the close

[[Page 350]]

of the day, the bottler shall make entries on the bottling and packaging 
record covering the total quantity bottled that day from the tank. 
Entries shall be made not later than the morning of the following 
business day unless the bottler maintains auxiliary or supplemental 
records as provided in Sec. 19.731.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.388  Cases.

    (a) General. (1) On completion of bottling, the filled bottles with 
labels and properly affixed closures or other devices shall be placed in 
cases, and the cases shall be sealed.
    (2) Each case of spirits filled shall be marked as prescribed by 
subpart R of this part before removal from such premises.
    (b) Unsealed cases. (1) Cases may be temporarily retained on bonded 
premises without being sealed pending the affixing to bottles of any 
required labels, State stamps, or seals.
    (2) Unsealed cases containing bottles without labels shall be marked 
in accordance with subpart R of this part, and segregated from other 
cases on bonded premises pending affixing of the labels, State stamps, 
or seals.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1360, as amended 
(26 U.S.C. 5201, 5206))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50 
FR 23951, June 7, 1985]



Sec. 19.389  Remnants.

    Where incident to bottling there remain bottles less than the number 
necessary to fill a case, the bottles, after being affixed with closures 
or other devices and labeled, may be marked as a remnant case as 
provided in subpart R of this part or kept uncased on the bonded 
premises until spirits of the same kind are again bottled. Appropriate 
notation shall be made on the bottling and packaging record to cover the 
bottling and disposition of the remnant. If the remnant is subsequently 
used to complete the filling of a case, an accounting shall be made on 
the subsequent bottling and packaging record showing the use of the 
remnant by adding the remnant gallonage to the quantity to be accounted 
for together with appropriate notation explaining the transactions.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1360, as amended 
(26 U.S.C. 5201, 5206))

[T.D. ATF-206, 50 FR 23951, June 7, 1985]



Sec. 19.390  Filling packages.

    Spirits may be drawn into packages from a tank (conforming to the 
requirements of Sec. 19.273). Such packages shall be gauged by the 
proprietor, and he shall report the details of such gauge on a package 
gauge record, according to Sec. 19.769, and attach a copy of the package 
gauge record to each copy of the bottling and packaging record covering 
the product. Such packages shall be marked as prescribed by subpart R of 
this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.391  Removals by bulk conveyances or pipelines.

    When the spirits in the processing accounts are to be removed in 
bulk conveyances or by pipeline, the proprietor shall record the filling 
of the conveyance or the transfer by pipeline on the bottling and 
packaging record. The spirits shall be removed from bonded premises in 
accordance with subpart P of this part. The cosignor shall forward to 
the consignee a statement of composition or a copy of any formula under 
which such spirits were processed for determining the proper use of the 
spirits, or for the labeling of the finished product. Bulk conveyances 
shall be marked as provided in subpart R of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

[T.D. ATF-206, 50 FR 23951, June 7, 1985]



Sec. 19.392  Rebottling.

    When the spirits are dumped for rebottling, the proprietor shall 
prepare a bottling and packaging record, appropriately modified. If the 
spirits were originally bottled by another proprietor, a statement from 
the original

[[Page 351]]

bottler consenting to the rebottling must be secured by the proprietor.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.393  Reclosing and relabeling.

    The proprietor may reclose or relabel distilled spirits, either 
before removal from bonded premises or after return thereto. The 
reclosing or relabeling of spirits returned to bonded premises shall be 
done immediately, and the spirits promptly removed. When spirits were 
originally bottled by another proprietor, the relabeling proprietor 
shall have on file a statement from the original bottler consenting to 
the relabeling. When spirits are relabeled, the proprietor shall have a 
certificate of label approval or certificate of exemption from label 
approval issued under 27 CFR part 5 for labels used on relabeled 
spirits. The proprietor shall prepare a separate record according to 
Sec. 19.747 to cover the relabeling or reclosing. For spirits returned 
to bond under 26 U.S.C. 5215(c), the proprietor shall annotate such 
information on the record.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1358, as amended 
(26 U.S.C. 5201, 5205); sec. 807, Pub. L. 96-39, 93 Stat. 280 (26 U.S.C. 
5215))

[T.D. ATF-206, 50 FR 23951, June 7, 1985]



Sec. 19.394  Bottled-in-bond spirits.

    Spirits which are labeled as bottled-in-bond for domestic 
consumption shall meet the requirements in 27 CFR part 5 and shall bear 
a closure or other device as required by subpart T of this part.

(Approved by the Office of Management and Budget under control number 
1512-0189)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

[T.D. ATF-206, 50 FR 23951, June 7, 1985]



Sec. 19.395  Labels for export spirits.

    All bottles containing spirits bottled for export shall have 
securely affixed thereto a label showing the following:
    (a) Kind of spirits;
    (b) Percent-alcohol-by-volume of the spirits;
    (c) Net contents, unless the markings on the bottle indicate such 
contents; and
    (d) The name (or, if desired, the trade name) of the bottler.

The bottler may place on the label any additional information that he 
may desire if it is not inconsistent with the required information. The 
label information may be stated in the language of the country to which 
the spirits are to be exported provided the proprietor maintains on file 
an English translation of the information. The net contents and proof 
may be stated in the units of measurement of the foreign country 
provided the proprietor maintains a record of the equivalent units as 
they would be required to be expressed if bottled for domestic 
consumption. The Director may waive the requirement of showing any of 
the information required by this section, other than the kind of 
spirits, upon a showing that the country to which the spirits are to be 
exported prohibits the showing of such information. With respect to kind 
of spirits, the Director may waive the designation required by 27 CFR 
5.22, only to the extent that the label need not bear the word 
``diluted'' on distilled spirits bottled below the minimum bottling 
proof, provided this is in accordance with the rules of the countries to 
which such product is to be exported.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1374, as amended 
(26 U.S.C. 5201, 5301))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-237, 51 
FR 36395, Oct. 10, 1986; T.D. ATF-283, 54 FR 11704, Mar. 22, 1989]



Sec. 19.396  Spirits removed for shipment to Puerto Rico.

    Spirits removed for shipment to Puerto Rico with benefit of drawback 
or without payment of tax under the provisions of 27 CFR part 252 are 
subject to the provisions of 27 CFR part 5 in respect to labeling 
requirements and standards of fill for bottles.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, (26 U.S.C. 5201))

[[Page 352]]



Sec. 19.397  Spirits not originally intended for export.

    Spirits manufactured, produced, bottled in bottles, packed in 
containers, or which are packaged in casks or other bulk containers in 
the United States, originally intended for domestic use may be exported 
with benefit of drawback or without payment of tax if the cases or bulk 
containers are marked as required by 27 CFR part 252. The proprietor may 
relabel the spirits to show any of the information provided for in 
Sec. 19.395. When the proprietor desires to file a claim for drawback on 
spirits prepared for export under this section, the provisions of 27 CFR 
252.195b shall be followed. When the proprietor desires to withdraw 
spirits without payment of tax, he shall file a notice in accordance 
with 27 CFR 252.92.

(Approved by the Office of Management and Budget under control number 
1512-0189)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended, 1358, as amended, 
1362, as amended (26 U.S.C. 5062, 5205, 5214))

[T.D. ATF-206, 50 FR 23951, June 7, 1985]



Sec. 19.398  Alcohol.

    (a) Containers. Subject to the provisions of subpart R of this part, 
alcohol for industrial use may be put in bottles, packages, or other 
containers. Proprietors shall comply with the provisions in subpart S of 
this part when alcohol for nonindustrial domestic use is bottled.
    (b) Closures. Closures or other devices shall be affixed to 
containers of alcohol as provided in subpart T of this part.
    (c) Bottle labels. All bottles of alcohol for industrial use shall 
have affixed thereto a label showing ``Alcohol'' and the name and plant 
number of the bottler. The bottler may place on the label additional 
information, if it is not inconsistent with the required information.
    (d) Case marks. Each case of bottled alcohol shall bear the marks 
prescribed therefor in subpart R of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1369, as amended 
(26 U.S.C. 5201, 5206, 5235, 5301))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50 
FR 23952, June 7, 1985]

                                 Records



Sec. 19.400  Daily summary record of spirits bottled or packaged.

    The proprietor shall maintain a separate daily summary record of 
spirits bottled or packaged as provided in Sec. 19.751.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

                               Inventories



Sec. 19.401  Inventories of wines and bulk spirits (except in packages) in processing account.

    Each proprietor shall take a physical inventory of wines and bulk 
spirits (except in packages) in the processing account at the close of 
each calendar quarter, and at such other time as the regional director 
(compliance) may require. The results of the inventory shall be recorded 
in accordance with subpart W of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.402  Inventories of bottled and packaged spirits.

    (a) Physical inventories. (1) Physical inventories of bottled and 
packaged spirits in the processing account shall be taken for the return 
periods ending June 30 and December 31 of each year, and for other 
return periods as may be required by the regional director (compliance).
    (2) Physical inventories may be taken within a period of a few days 
before or after June 30 or December 31 (or other dates approved by the 
regional director (compliance), if:
    (i) Such period does not include more than one complete weekend; and
    (ii) Necessary adjustments are made to reflect pertinent 
transactions, so that the recorded inventories will agree with the 
actual quantities of bottled or packaged spirits on hand in processing 
at the prescribed times.
    (3) On approval of an application filed with the regional director 
(compliance), required physical inventories may be taken on dates other 
than June 30 and December 31 if the dates established for taking such 
inventories:
    (i) Coincide with the end of a return period, and

[[Page 353]]

    (ii) Are approximately six months apart.
    (4) On approval of the application, the designated inventory dates 
shall take effect with the first inventory scheduled to be taken within 
six months of the previous June 30 or December 31 inventory.
    (b) Waiver of physical inventory. (1) The regional director 
(compliance), on receipt of an application, may relieve a proprietor of 
the requirement of taking the June 30 or December 31 physical inventory, 
(or other date approved under paragraph (a) of this section) if he finds 
that only one such inventory during any 24 consecutive return periods is 
necessary.
    (2) The regional director (compliance) may reimpose the requirement 
for the waived inventory if he finds that it is necessary for law 
enforcement or protection of the revenue.
    (c) Notification of physical inventory. Whenever a physical 
inventory of bottled or packaged spirits is to be taken, the proprietor 
shall, at least 5 business days in advance, notify the area supervisor 
of the date and time he will take such inventory.
    (d) Supervision of physical inventories. Physical inventories 
required under the provisions of this section shall be taken under such 
supervision, or verified in such manner, as the regional director 
(compliance) may require.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



      Subpart N--Denaturing Operations and Manufacture of Articles



Sec. 19.451  General.

    Authorized proprietors who are qualified as processors may conduct 
denaturing operations or manufacture articles pursuant to the provisions 
of this part. Proprietors shall not conduct denaturing operations or 
manufacture articles except as provided in this part. Records of 
denaturing operations and the manufacture of articles shall be 
maintained in accordance with Sec. 19.752 and Sec. 19.753.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178); 
sec. 807(a), Pub. L. 96-39, 93 Stat. 286 (26 U.S.C. 5241))

                              Denaturation



Sec. 19.452  Formulas.

    Spirits shall be denatured in accordance with formulas as authorized 
in 27 CFR part 21 or their alternatives. Denaturing materials shall be 
thoroughly mixed with the spirits being denatured.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1369, as amended (26 U.S.C. 5242); 
sec. 807, Pub. L. 96-39, 93 Stat. 286 (26 U.S.C. 5241))



Sec. 19.453  Testing of denaturants.

    (a) Testing. Proprietors shall ensure that the materials they 
receive for use in denaturing conform to the specifications prescribed 
in 27 CFR part 21. The regional director (compliance) may require the 
testing of denaturants at any time.
    (b) Samples. Samples of denaturants shall be taken in such manner as 
to represent a true composite of the total lot being sampled. When 
samples are tested by persons other than a proprietor, a copy of the 
analysis or a statement, signed by the chemist performing the test, 
shall be secured and filed by the proprietor for each test. Samples of 
denaturants may be taken by ATF officers at any time for testing by 
Government chemists.
    (c) Conformity. When a denaturant does not conform to the 
specifications prescribed under 27 CFR part 21, the proprietor shall not 
use the material unless he treats or manipulates the denaturant to make 
it conform to such specifications. Such treated or manipulated 
denaturant shall again be tested.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1369, as amended (26 U.S.C. 5242))



Sec. 19.454  Gauge for denaturation.

    The proprietor shall gauge spirits before denaturation and after 
denaturation and record each gauge on the record of denaturation as 
prescribed in Sec. 19.752(b). However, spirits dumped from previously 
gauged containers or spirits transferred directly to mixing tanks from 
gauge tanks where they were gauged, need not again be gauged. 
Measurements of spirits and denaturants shall be made by volume, weight, 
by approved meter, or, when

[[Page 354]]

approved by the Director, other devices or methods.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204); 
sec. 807, Pub. L. 96-39, 93 Stat. 286 (26 U.S.C. 5241))



Sec. 19.455  Dissolving of denaturants.

    Denaturants which are difficult to dissolve in spirits at usual 
working temperatures, which are highly volatile, or which become solid 
at such usual temperatures may be liquefied or dissolved in a small 
quantity of spirits or water in advance of their use in the production 
of specially denatured spirits, pursuant to the prescribed formula, so 
long as the proof of the denatured spirits manufactured does not fall 
below the proof prescribed for the applicable formula in 27 CFR part 21. 
Any spirits used in dissolving denaturants and contained in the 
resulting solution shall be included as part of the total quantity of 
spirits denatured in each batch.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1369, as amended (26 U.S.C. 5242))



Sec. 19.456  Adding denaturants.

    Denaturants and spirits shall be mixed in packages, tanks, or bulk 
conveyances on bonded premises. The regional director (compliance) may, 
on written application, authorize other methods of mixing denaturants 
and spirits if he deems such denaturation will not hinder effective 
administration of this part or jeopardize the revenue. If requested by 
the regional director (compliance), the proprietor shall submit a flow 
diagram of the intended process or method of adding denaturants.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1369, as amended (26 U.S.C. 5242))



Sec. 19.457  Neutralizing denatured spirits.

    Proprietors may add trace quantities of compounds such as caustics 
or acids to certain formulas of denatured spirits to neutralize such 
spirits, if the intended effect of the denaturants is not reduced. 
Proprietors who neutralize denatured spirits must record, for each 
formula the kinds and quantities of compounds used, and the formula 
number of the denatured spirits neutralized.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1369, as amended (26 U.S.C. 5242); 
sec. 807, Pub. L. 96-39, 93 Stat. 286 (26 U.S.C. 5241))



Sec. 19.458  Restoration and redenaturation of recovered denatured spirits and recovered articles.

    Recovered denatured spirits and recovered articles received on 
bonded premises, as provided in subpart U of this part, for restoration 
(including redistillation, if necessary) and/or redenaturation may not 
be withdrawn from bonded premises except for industrial use or after 
denaturation thereof. If the recovered or restored denatured spirits or 
recovered articles are to be redenatured and do not require the full 
amount of denaturants for redenaturation, a notation to that effect will 
be made on the record of denaturation required by Sec. 19.752(b).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1369, as amended (26 U.S.C. 5242))



Sec. 19.459  Mixing of denatured spirits.

    (a) Denatured spirits produced under the same formula may be mixed 
on bonded premises.
    (b) Denatured spirits of different formulas may be mixed on bonded 
premises for immediate redistillation at the same plant or at another 
plant in accordance with the provisions of subpart K of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1369, as amended (26 U.S.C. 5242); 
sec. 807, Pub. L. 96-39, 93 Stat. 286 (26 U.S.C. 5241))



Sec. 19.460  Conversion of denatured alcohol formulas.

    (a) Conversion of Formula No. 1. Any specially denatured alcohol, 
except Formulas No. 3-A and No. 30, may be converted into specially 
denatured alcohol, Formula No. 1, by the addition of methyl alcohol and 
either denatonium benzoate, N.F., methyl isobutyl ketone, mixed isomers 
of nitropropane, or methyl n-butyl ketone in accordance with the 
formulation prescribed in Sec. 21.32 of this chapter. For specially 
denatured alcohol Formulas No. 3-A and No. 30, the methyl alcohol 
content shall be reduced to the level

[[Page 355]]

prescribed for specially denatured alcohol Formula No. 1 by the addition 
of ethyl alcohol before adding one of the other ingredients prescribed 
in Sec. 21.32 of this chapter.
    (b) Conversion to Formula No. 29. Any specially denatured alcohol 
may be converted to specially denatured alcohol, Formula No. 29, by the 
addition of acetaldehyde or ethyl acetate, in accordance with the 
formulations prescribed in 27 CFR 21.56.
    (c) General rule. In addition to the conversions provided in 
paragraphs (a) and (b) of this section, any specially denatured alcohol 
may be converted to another specially denatured alcohol formula, if the 
resultant alcohol-denaturant mixture contains only the alcohol and 
denaturant or denaturants in the proportions authorized in 27 CFR part 
21 for the formula to which converted. Specially denatured alcohol which 
is converted under this paragraph may only be used as authorized in 27 
CFR part 21 for the formula to which converted.
    (d) Conditions governing conversion and use. The quantities of 
denaturants required for conversions authorized in paragraphs (a), (b) 
and (c) of this section shall be determined on the basis of the alcohol 
in the formulations. Specially denatured alcohol converted to Formula 
No. 29 may be used as authorized in 27 CFR 21.56(b) except that it shall 
not be used in the manufacture of vinegar, drugs, or medicinal 
chemicals, and the conditions governing use provided in 27 CFR 21.56(c) 
shall apply.
    (e) Conversion to other formulations. Proprietors desiring to 
convert specially denatured alcohol other than as provided in paragraphs 
(a), (b), and (c) of this section shall obtain approval from the 
Director prior to such conversion.
    (f) Conversion to completely denatured alcohol. Any specially 
denatured alcohol not containing methanol or wood alcohol may be 
converted to any one of the completely denatured alcohol formulas, 
prescribed in 27 CFR part 21, by adding the required denaturants.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1369, as amended (26 U.S.C. 5242))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50 
FR 9160, Mar. 6, 1985; T.D. ATF-442, 66 FR 12854, Mar. 1, 2001]



Sec. 19.461  Receipt and storage of denatured spirits.

    (a) Deposit. Denatured spirits produced, received in bond as 
provided in subpart P or returned to bonded premises as provided in 
subpart U of this part, shall be deposited on the bonded premises.
    (b) Tanks. Proprietors shall maintain a record in accordance with 
Sec. 19.752 for tanks in which denatured spirits are stored.
    (c) Storage. Denatured spirits may be stored on bonded premises in 
any container into which denatured spirits may be filled on bonded 
premises. Such containers shall be so stored that they can be readily 
inspected by ATF officers and inventoried. The provisions of Sec. 19.133 
are applicable to storage of denatured spirits in portable containers. 
However, upon application, the regional director (compliance) may 
authorize the proprietor to store packages and cases in any manner which 
safeguards the interests of the Government.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.462  Filling of containers from tanks.

    Denatured spirits may be drawn into portable containers from tanks 
on bonded premises. The denatured spirits in the tanks shall be gauged 
prior to filling of the containers, and when only a portion of the 
contents of the tank is drawn into containers, the denatured spirits 
remaining in the tank shall be again gauged and such gauges shall be 
recorded by the proprietor. The provisions of paragraph (a) and (c) of 
Sec. 19.319 shall be applicable to the filling and gauging of portable 
containers, and denatured spirits may be withdrawn from bonded premises 
for any lawful purpose on the filling gauge.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.463  Containers for denatured spirits.

    Packaging of denatured spirits and the marking of portable 
containers of

[[Page 356]]

such denatured spirits shall be in accordance with requirements of 
subpart R of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))

                               Inventories



Sec. 19.464  Denatured spirits inventories.

    Each proprietor shall take a physical inventory of all denatured 
spirits in the processing account at the close of each calendar quarter 
and at such other times as the regional director (compliance) may 
require. The results of the inventory shall be recorded as provided in 
subpart W of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

                                Articles



Sec. 19.471  Manufacture of articles.

    Proprietors shall manufacture, label, mark, and dispose of articles 
as provided in 27 CFR part 20.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1372, as amended (26 U.S.C. 5273))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50 
FR 9160, Mar. 6, 1985]



                 Subpart O--Spirits from Customs Custody



Sec. 19.481  General.

    Spirits imported or brought into the United States in bulk 
containers may be withdrawn by proprietors from customs custody and 
transferred in such bulk containers or by pipeline without payment of 
tax to the bonded premises of their distilled spirits plant. Spirits 
received on bonded premises as provided in this section may be (a) 
redistilled or denatured only if 185 degrees or more of proof, and (b) 
withdrawn for any purpose authorized by 26 U.S.C. Chapter 51, in the 
same manner as domestic spirits.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1366, as amended (26 U.S.C. 5232))



Sec. 19.482  Age and fill date.

    For the purpose of this part, the age and fill date for spirits that 
are imported or brought into the United States shall be:
    (a) Age. The claimed age, which is supported by the documentation 
required in 27 CFR part 5.
    (b) Fill date. The date that packages of spirits are released from 
customs custody or filled on bonded premises.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.483  Recording gauge.

    (a) When packages of spirits are received from customs custody in 
the storage account, the proprietor shall use the last official gauge to 
compute and record on the deposit records prescribed in Sec. 19.740 for 
each entry the average content of the packages being received which 
shall also provide the basis for entries on the package summary records 
prescribed in Sec. 19.741. If the last official gauge indicates a 
substantial variation in the contents of the packages, the proprietor 
shall group the packages into lots according to their approximate 
contents, and assign a separate lot identification to each group of 
packages, based on the date the packages were received on bonded 
premises.
    (b) When packages of spirits are received from customs custody in 
the processing account, the proprietor shall determine the proof gallons 
of spirits received in each package. The determination may be made by 
use of the last official gauge.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5232))

                            Imported Spirits



Sec. 19.484  Marks on containers of imported spirits.

    (a) General. Each portable bulk container of spirits shall, when 
received on bonded premises under the provisions of Sec. 19.481, or when 
filled on bonded premises, be marked with:
    (1) The name of the importer;
    (2) The country of origin;
    (3) The kind of spirits;
    (4) The package identification number as provided in Sec. 19.593 or 
the package serial number as provided in Sec. 19.594;
    (5) If filled on bonded premises, the date of fill;

[[Page 357]]

    (6) The proof; and
    (7) The proof gallons of spirits in the package. Package 
identification numbers or package serial numbers shall be preceded by 
the symbol ``IMP'' and any distinguishing prefix or suffix used as 
provided in Sec. 19.594. The proprietor who receives packages of 
imported spirits under the provisions of Sec. 19.481 shall be 
responsible for having the required marks placed on such packages. 
Package identification numbers assigned under the provisions of this 
section to packages of spirits received from customs custody shall be 
recorded on the deposit records by the proprietor who receives the 
spirits.
    (b) Exception. Proprietors are relieved from placing prescribed 
marks on packages when the spirits will be removed from the packages 
within 30 days of the date of receipt at the distilled spirits plant. 
Packages not dumped as provided in this paragraph within the time 
prescribed must be promptly marked in the manner required by 
Sec. 19.595. The provisions of this section shall not be construed to 
waive, or authorize the waiver of, the requirements of this part for the 
assigning of package identification numbers or for the recording of such 
package identification numbers on deposit records, and the required 
recording of lot identification numbers and related information on other 
transaction forms, records, or reports.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))

                 Puerto Rican and Virgin Islands Spirits



Sec. 19.485  Marks on containers of Puerto Rican and Virgin Islands spirits.

    (a) Packages received in bond. (1) When packages of Puerto Rican 
spirits are received on the bonded premises of a distilled spirits plant 
under the provisions of this subpart, the markings prescribed by 27 CFR 
26.40, modified to show the serial number of the Form 5110.31 prefixed 
by ``Form 5110.31'', rather than the serial number and identification of 
the Form 487-B, shall be accepted in lieu of the markings prescribed in 
Sec. 19.484. On receipt of packages so marked the proprietor of the 
distilled spirits plant shall show on such packages of spirits the date 
of fill as provided in Sec. 19.482, and the words ``Puerto Rican'' or 
the abbreviation ``P.R.''.
    (2) When packages of Virgin Islands spirits are received on the 
bonded premises of a distilled spirits plant under the provisions of 
this subpart, the markings prescribed by 27 CFR 26.206 that are on such 
packages shall be accepted in lieu of the markings prescribed in 
Sec. 19.484. On receipt of packages so marked the proprietor of the 
distilled spirits plant shall show on such packages of spirits the date 
of fill as provided in Sec. 19.482, and the words ``VIRGIN ISLANDS'' or 
the abbreviation ``V.I.''
    (b) Portable bulk containers. Portable bulk containers of Puerto 
Rican or Virgin Islands spirits filled in ATF bond shall, in addition to 
the required marks prescribed in Sec. 19.596, be marked to show the 
serial number of the approved formula under which produced, and with the 
words ``PUERTO RICAN'' or ``VIRGIN ISLANDS'' or the abbreviation 
thereof. Portable bulk containers containing spirits received in ATF 
bond under the provisions of this subpart shall, in addition to other 
required marks, be marked with the words ``PUERTO RICAN'' or ``VIRGIN 
ISLANDS'' or the abbreviation thereof.
    (c) Cases of bottled alcohol. In addition to other mandatory marks 
prescribed by Sec. 19.608 for cases of bottled alcohol, the words 
``PUERTO RICAN'' or ``VIRGIN ISLANDS'', as appropriate, or the 
abbreviation ``P.R.'' or ``V.I.'' shall precede or follow the word 
``alcohol'' on cases of alcohol from Puerto Rico or the Virgin Islands 
that are bottled and cased on bonded premises.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended, 1369, as amended 
(26 U.S.C. 5206, 5235))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-459, 66 
FR 38549, July 25, 2001]



Sec. 19.486  Additional tax on nonbeverage spirits.

    The additional tax imposed by 26 U.S.C. 5001(a)(9), on imported 
spirits withdrawn from customs custody without payment of tax and 
thereafter withdrawn from bonded premises for beverage purposes, and the 
related

[[Page 358]]

provisons of Sec. 19.518, are not applicable to Puerto Rican or Virgin 
Islands spirits brought into the United States and transferred to bonded 
premises under the provisions of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.487  Abatement, remission, credit or refund.

    The provisions of 26 U.S.C. 5008, authorizing abatement, remission, 
credit or refund for loss or destruction of distilled spirits, shall 
apply to spirits brought into the United States from Puerto Rico or the 
Virgin Islands, with respect to the following:
    (a) Spirits lost while in ATF bond;
    (b) Voluntary destruction of spirits in bond;
    (c) Spirits returned to bonded premises after withdrawal from bonded 
premises without payment of tax; and
    (d) Spirits returned to bonded premises after withdrawal from bonded 
premises upon tax determination.

Claims relating to spirits lost in bond, in addition to the information 
required by Sec. 19.41, shall show the name of the producer, and the 
serial number and date of the formula, where required, under which 
produced.

(Sec. 201, Pub. L. 95-859, 72 Stat. 1323, as amended (26 U.S.C. 5008); 
sec. 807, Pub. L. 96-39, 93 Stat. 285 (26 U.S.C. 5215))



                   Subpart P--Transfer and Withdrawals

                                 General



Sec. 19.501  Authority to withdraw.

    Spirits, denatured spirits, and wines shall be removed from bonded 
premises as provided in this subpart. Spirits entered into bonded 
storage for subsequent packaging in wooden packages, as provided in 
Sec. 19.320, which have not been drawn into such packages at the time of 
withdrawal from bond shall be redesignated to conform to the classes and 
types set out in subpart R of this part and in 27 CFR part 5.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1362, as amended 
(26 U.S.C. 5201, 5212, 5214); sec. 807(a), Pub. L. 96-39, 93 Stat. 285 
(26 U.S.C. 5213))



Sec. 19.502  Withdrawal of spirits on production or filling gauge.

    When the production or filling gauge is made under the provisions of 
Sec. 19.319(b), spirits may be withdrawn from bonded premises for any 
lawful purpose on the production or filling gauge. When the production 
or filling gauge is made under Sec. 19.319(c), spirits may be withdrawn 
without payment of tax for export on the production or filling gauge. 
When spirits which are to be withdrawn on determination of tax on the 
original gauge are transferred in bond, all copies of the transfer 
record prescribed in Sec. 19.770 shall be marked by the proprietor 
``Withdrawal on Original Gauge''.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))



Sec. 19.503  Determination of tare.

    When packages are to be individually gauged for withdrawal from 
bonded premises, actual tare shall be determined in accordance with 27 
CFR part 30.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))

                    Transfers Between Bonded Premises



Sec. 19.505  Authorized transfers.

    (a) Spirits. Bulk spirits or denatured spirits may be transferred in 
bond between the bonded premises of plants qualified under 26 U.S.C. 
5171 or 26 U.S.C. 5181, in accordance with Secs. 19.506 and 19.998, 
respectively.
    (b) Wine. (1) Wines may be transferred (i) from a bonded wine cellar 
to the bonded premises of a distilled spirits plant, (ii) from the 
bonded premises of a distilled spirits plant to a bonded wine cellar, or 
(iii) between the bonded premises of distilled spirits plants.
    (2) Wines transferred to the bonded premises of a distilled spirits 
plant may be used in the manufacture of a distilled spirits product, and 
may not be removed from such bonded premises for consumption or sale as 
wine.
    (c) Alcohol for industrial purposes. Alcohol bottled for industrial 
purposes, as provided in Sec. 19.398, may be transferred between the 
bonded premises of distilled spirits plants in accordance with the 
procedures prescribed in

[[Page 359]]

Sec. Sec. 19.506 through 19.510 for bulk distilled spirits.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1380, as amended 
(26 U.S.C. 5212, 5362); sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 
U.S.C. 5181))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-297, 55 
FR 18064, Apr. 30, 1990]



Sec. 19.506  Application to receive spirits in bond.

    When a proprietor qualified under 26 U.S.C. 5171 desires to have 
spirits or denatured spirits transferred to him in bond which shall not 
include spirits withdrawn from customs custody under 26 U.S.C. 5232, he 
shall make application for such transfer to the regional director 
(compliance) on Form 5100.16. Application to receive such spirits by 
transfer in bond shall not be approved unless the applicant's operations 
or unit bond is in the maximum penal sum, or, if in less than the 
maximum penal sum, is sufficient to cover the tax on the spirits or 
denatured spirits to be transferred in addition to all other liabilities 
chargeable against such bond. The applicant shall deliver one of the 
approved copies of the application to the consignor proprietor.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1318, as amended, 1362, as amended 
(26 U.S.C. 5005, 5112))



Sec. 19.507  Termination of application.

    A proprietor may terminate an approved application, Form 5100.16, at 
any time by
    (a) Retrieving the consignor's copy, and
    (b) Returning this copy, together with his own to the regional 
director (compliance) for cancellation.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1318, as amended (26 U.S.C. 5005))



Sec. 19.508  Consignor premises.

    (a) General. (1) A transfer record shall be prepared according to 
Sec. 19.770 by (i) the consignor proprietor of a distilled spirits plant 
(A) to cover the transfer of spirits or denatured spirits in bond to 
another distilled spirits plant, pursuant to an approved application on 
Form 5100.16, (B) to cover the transfer in bond of spirits or denatured 
spirits to an alcohol fuel plant, or (C) to cover the transfer of wine 
in bond to the bonded premises of a distilled spirits plant or bonded 
wine cellar; or (ii) the consignor proprietor of an alcohol fuel plant 
to cover the transfer of spirits to the bonded premises of a distilled 
spirits plant pursuant to an approved application on Form 5100.16. 
Except as otherwise provided herein, a transfer record shall be prepared 
for each conveyance. The proprietor shall also enter on the transfer 
record the serial numbers of any seals or other devices affixed to a 
conveyance used for shipment of spirits, or denatured spirits. On 
completion of lading (or completion of transfer by pipeline), the 
proprietor shall retain one copy of the transfer record and one copy of 
any accompanying document for his files and forward the original of the 
transfer record and any accompanying document to the consignee (to 
accompany the shipment, if by truck).
    (2) Spirits or denatured spirits produced from petroleum, natural 
gas, or coal may not be transferred to alcohol fuel plants qualified 
under 26 U.S.C. 5181.
    (3) The consignor proprietor may cover on one transfer record all 
packages of spirits shipped by truck on the same day from his bonded 
premises to the bonded premises of another plant. In such case, the 
proprietor shall prepare a shipment and delivery order for each 
shipment, showing the number of packages, their package identification 
or serial numbers, the name of the producer, warehouseman, or processor, 
and the serial numbers of the seals or other devices (if any) applied to 
the truck. Such shipping and delivery order shall be properly 
authenticated and shall consititute a complete record of the spirits so 
transferred in each truck each day. A copy of each shipping and delivery 
order shall be retained by the consignor. On completion of the lading of 
the last truck for the day, the proprietor shall retain one copy of the 
transfer record and one copy of any accompanying document for his files 
and forward the original of the transfer record and any accompanying 
document to the consignee.
    (b) Packages. When spirits are to be transferred in bond in 
packages, the

[[Page 360]]

consignor proprietor shall weigh each package, except (1) when the 
transfer is to be made in a secured conveyance, (2) when the individual 
packages have been securely sealed by the proprietor, or (3) when this 
requirement has been waived by the regional director (compliance) on a 
finding that, because of the location of the premises and the proposed 
method of operation, there will be no jeopardy to the revenue. When 
packages are weighed at the time of shipment, the proprietor shall 
assign temporary serial numbers to the packages and show for each 
package its gross shipment weight on a package gauge record prepared 
according to Sec. 19.769. A copy of the package gauge record shall 
accompany each copy of the transfer record.
    (c) Bulk conveyances and pipelines. When spirits, denatured spirits, 
or wines are to be transferred in bond in bulk conveyances or by 
pipelines, the consignor shall gauge the spirits, denatured spirits, or 
wines and record the quantity so determined on the transfer record 
prescribed in Sec. 19.770. Bulk conveyances of spirits or denatured 
spirits shall be secured by the proprietor.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1367, as amended, 1380, as amended 
(26 U.S.C. 5212, 5362))



Sec. 19.509  Reconsignment.

    Where, prior to or on arrival at the premises of a consignee, 
spirits, denatured spirits, or wines transferred in bond are found to be 
unsuitable for the purpose for which intended, were shipped in error, 
or, for any other bona fide reason, are not accepted by such consignee, 
or are not accepted by a carrier, they may be reconsigned, by the 
consignor, to himself, or to another consignee. In such case, 
application to receive spirits or denatured spirits by transfer in bond 
(on Form 5100.16) shall have been previously approved for the consignee 
(not required in the case of wines or in the case of alcohol fuel plants 
receiving spirits or denatured spirits) and the bond of the proprietor 
to whom the spirits, denatured spirits, or wines are reconsigned shall 
cover such spirits, denatured spirits, or wines while in transit after 
reconsignment. Notice of cancellation of the shipment shall be made by 
the consignor to the consignee. Where the reconsignment is to another 
proprietor, a new transfer record shall be prepared and prominently 
marked with the word ``Reconsignment''.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1367, as amended, 1380, as amended 
(26 U.S.C. 5212, 5362))



Sec. 19.510  Consignee premises.

    (a) General. When spirits, denatured spirits, or wines are received 
by transfer in bond, the consignee proprietor shall examine each 
conveyance to determine whether the securing devices, if any, are intact 
upon arrival at his premises. If the securing devices are not intact, he 
shall immediately notify the area supervisor before removal of any 
spirits from the conveyance. The proprietor shall follow the provisions 
of subpart Q of this part to determine, record, and report losses, if 
any. After execution on the transfer record as prescribed in Sec. 19.770 
or Form 703, as appropriate, of his receipt of the shipment of spirits, 
denatured spirits, or wines, the consignee shall retain the original of 
the transfer record and any accompanying documents for his files, or 
dispose of Form 703 (in the case of wines from a bonded wine cellar), as 
provided in the instructions on the form. Retained copies of transfer 
records and Forms 703 shall become deposit records. Spirits which are 
produced at alcohol fuel plants shall be separately identified and 
accounted for as for fuel use, and may not be withdrawn, used, sold or 
otherwise disposed of for other than fuel use.
    (b) Packages. When spirits are received in packages, the consignee 
proprietor shall weigh each package, except: (1) when the transfer is 
made in a secured conveyance and the securing devices are intact on 
arrival, (2) when the individual packages have been sealed by the 
consignor proprietor and are intact on arrival, or (3) when the 
requirement for weighing the packages at the consignor premises has been 
waived under the provisions of Sec. 19.508(b)(3). The proprietor shall 
record the receiving weight of each package on the accompanying package 
gauge record or on a list with temporary package serial numbers prepared 
by the consignor. A copy of such

[[Page 361]]

package gauge record or list shall remain with the original of the 
transfer record.
    (c) Bulk conveyances and pipelines. When spirits, denatured spirits, 
or wines are received in bulk conveyances or by pipeline, the consignee 
shall gauge the spirits, denatured spirits, or wines and record the 
gauge on the transfer record prescribed in Sec. 19.770 or, in the case 
of wines received from a bonded wine cellar, on Form 703. The consignee 
shall ensure that each conveyance emptied has been thoroughly drained. 
The regional director (compliance) may waive the requirement for gauging 
spirits, denatured spirits, or wines on receipt by pipeline if he finds 
that because of the location of the premises, there will be no jeopardy 
to the revenue.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1380, as amended 
(26 U.S.C. 5204, 5362); sec. 807(a), Pub. L. 96-39, 93 Stat. 285 (26 
U.S.C. 5213))

             Withdrawals on Determination and Payment of Tax



Sec. 19.515  Determination and payment of tax.

    (a) General. Distilled spirits may be withdrawn from bonded premises 
on determination of tax in approved containers, or, to the contiguous 
premises of a manufacturer of nonbeverage products, by pipeline. All tax 
which is to be prepaid or deferred shall be determined prior to the 
physical removal of the spirits from bonded premises. The proprietor 
shall record the results of each tax determination on a record of tax 
determination as required by Sec. 19.761.
    (b) Payment of tax. The tax on the spirits shall be prepaid on Form 
5000.24 before removal of the spirits from bonded premises unless the 
proprietor has furnished a withdrawal or unit bond to secure payment of 
the tax. Where such bond is in less than the maximum penal sum, the 
proprietor shall prepay the tax for any withdrawal which would cause the 
outstanding liability for tax to exceed the limits of coverage under the 
bond.

(Sec. 807, Pub. L. 96-39, 93 Stat. (26 U.S.C. 5213))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-219, 50 
FR 51387, Dec. 17, 1985]



Sec. 19.516  Bond account.

    Where the proprietor has furnished a withdrawal or unit bond to 
cover the tax on spirits withdrawn on determination of tax, and such 
bond is in less than the maximum penal sum, he shall maintain an account 
of his bond and he shall charge the bond with the amount of liability 
incurred on each withdrawal on determination of tax. He shall credit the 
bond on payment of the amount of tax required to be remitted with a 
return and by authorized credits taken on a return. Where a bond in less 
than the maximum penal sum has been allocated among two or more plants, 
as provided in Secs. 19.243 and 19.244, the proprietor shall maintain an 
account at each plant of that part of the penal sum allocated to that 
plant.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.517  Gauge for tax determination.

    (a) Packages. When spirits in packages are to be withdrawn from 
bonded premises on determination of tax on the basis of an individual 
package gauge, each package shall be gauged unless the tax is to be 
determined on the production or filling gauge. When packages are gauged, 
the proprietor shall prepare a package gauge record, according to 
Sec. 19.769, and attach it to the record of tax determination prescribed 
in Sec. 19.761.
    (b) Tanks. Spirits in tanks which are to be withdrawn on 
determination of tax shall be gauged (by weighing and proofing) as 
prescribed in Sec. 19.93, and the elements of the gauge shall be 
recorded on the record of tax determination or on a separate record of 
the gauge for attachment to the record of tax determination.
    (c) Cases. Cases of distilled spirits to be withdrawn from bonded 
premises

[[Page 362]]

shall be tax determined on the basis of the contents thereof. The proof 
gallonage contained in cases shall be determined in accordance with 27 
CFR part 30 and the method prescribed in Sec. 19.722.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358 (26 U.S.C. 5204); sec. 807, 
Pub. L. 96-39, 93 Stat. 285 (26 U.S.C. 5213))



Sec. 19.518  Imported spirits.

    When spirits which have been imported for nonbeverage purposes and 
transferred to bonded premises pursuant to 26 U.S.C. 5232 are withdrawn 
for beverage purposes, there shall be paid, in addition to the internal 
revenue tax imposed by 26 U.S.C. 5001, a tax equal to the duty which 
would have been paid had the spirits been imported for beverage 
purposes, less the duty already paid thereon. The additional tax shall 
be referred to as ``additional tax--less duty'', and shall be paid at 
the time and in the manner that the basic tax is paid. The total 
quantity in proof gallons withdrawn shall be the basis of computing the 
tax at the rates indicated. The amount of the ``additional tax--less 
duty'' shall be stated separately and identified as such on the tax 
return.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended (26 U.S.C. 5001))



Sec. 19.519  Methods of tax payment.

    The tax on spirits shall be paid pursuant to a return on Form 
5000.24, filed as provided in Sec. 19.523 or Sec. 19.524 and 
Sec. 19.525. Except for remittance to be effected by electronic fund 
transfer under Sec. 19.524, remittance for the tax in full shall 
accompany the return and may be in any form which the regional director 
(compliance) is authorized to accept under the provisions of Sec. 70.61 
(Payment by check or money order) and which is acceptable to him. 
However, where a check or money order tendered in payment for taxes is 
not paid on presentment, or where the taxpayer is otherwise in default 
in payment, any remittance made during the period of such default, and 
until the regional director (compliance) finds that the revenue will not 
be jeopardized by the acceptance of a personal check (if acceptable to 
the regional director (compliance)), shall be in cash or in the form of 
a certified, cashier's, or treasurer's check drawn on any bank or trust 
company incorporated under the laws of the United States, or under the 
laws of any State, Territory, or possession of the United States, or a 
money order, as provided in Sec. 70.61. Checks and money orders shall be 
made payable to ``Bureau of Alcohol, Tobacco and Firearms''.

(Act of August 16, 1954, Ch. 736, 68A Stat. 777, as amended (26 U.S.C. 
6311); sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 
5061))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-219, 50 
FR 51387, Dec. 17, 1985; T.D. ATF-251, 52 FR 19313, May 22, 1987; T.D. 
ATF-301, 55 FR 47605, Nov. 14, 1990]



Sec. 19.520  Employer identification number.

    The employer identification number (defined at 26 CFR 301.7701-12) 
of the taxpayer who has been assigned such a number shall be shown on 
each return on Form 5000.24 filed pursuant to the provisions of this 
part. Failure of the taxpayer to include his employer identification 
number on Form 5000.24 may result in assertion and collection of the 
penalty specified in Sec. 70.113 of this chapter.

(Sec. 1, Pub. L. 87-397, 75 Stat. 828, as amended (26 U.S.C. 6109, 
6676))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-219, 50 
FR 51387, Dec. 17, 1985; T.D. ATF-301, 55 FR 47605, Nov. 14, 1990]



Sec. 19.521  Application for employer identification number.

    (a) An employer identification number will be assigned pursuant to 
application on Form SS-4 filed by the taxpayer. Form SS-4 may be 
obtained from the director of the service center or from the district 
director.
    (b) An application on Form SS-4 for an employer identification 
number shall be made by every taxpayer who files a return on Form 
5000.24, but who prior to the filing of his first return on Form 5000.24 
has neither secured an employer identification number nor made 
application therefor. Such application on Form SS-4 shall be filed on or 
before the seventh day after the date

[[Page 363]]

on which such first return on Form 5000.24 is filed.
    (c) Each taxpayer shall make application for and shall be assigned 
only one employer identification number, regardless of the number of 
places of business for which the taxpayer is required to file a tax 
return under the provisions of this part.

(Sec. 1, Pub. L. 87-397, 75 Stat. 828, as amended (26 U.S.C. 6109))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-219, 50 
FR 51387, Dec. 17, 1985]



Sec. 19.522  Taxes to be collected by returns.

    (a) Deferred taxes. The tax on spirits to be withdrawn from bond for 
deferred payment of tax shall be paid pursuant to a semimonthly return 
on Form 5000.24. Except as provided in section 19.523(c), the periods to 
be covered by semimonthly returns on Form 5000.24 shall run from the 1st 
day through the 15th day of each month, and from the 16th day through 
the last day of each month. A return, Form 5000.24, shall be executed 
and filed for each semimonthly return period notwithstanding that no tax 
is due for payment for such period. The proprietor of each bonded 
premises shall include, for payment, on his semimonthly return on Form 
5000.24, the full amount of distilled spirits tax determined in respect 
of all spirits released for withdrawal from the bonded premises on 
determination of tax during the period covered by the return (except 
spirits on which tax has been prepaid).
    (b) Conditions under which deferral is denied. Notwithstanding the 
posting of a withdrawal or unit bond by the proprietor, the tax shall be 
prepaid as provided in paragraph (c) of this section--
    (1) Where a proprietor has defaulted in any payment of tax under 
this section, during the period of such default and until the regional 
director (compliance) finds that the revenue will not be jeopardized by 
deferral; or
    (2) Where a proprietor, who, after having been notified of his 
deficiency by the regional director (compliance) (i) fails to maintain 
records required by this part to substantiate the correctness of his tax 
returns or (ii) otherwise fails to comply with any provisions of this 
part, is so notified by the regional director (compliance).
    (c) Prepaid taxes. The tax on distilled spirits shall be paid 
pursuant to a prepayment return on Form 5000.24 in all cases where the 
tax is required to be paid before the spirits are withdrawn from bond. A 
single prepayment return on Form 5000.24 may cover one or more 
transactions. The proprietor shall note the serial number of the Form 
5000.24 and the date and time such prepayment return was filed on the 
individual record of tax determination.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended, 1395, as amended 
(26 U.S.C. 5061, 5555))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-219, 50 
FR 51387, Dec. 17, 1985; T.D. ATF-365 60 FR 33668, June 28, 1995]



Sec. 19.523  Time for filing returns.

    (a) Payment pursuant to semimonthly return. Where the proprietor of 
bonded premises has withdrawn spirits from such premises on 
determination and before payment of tax, the proprietor shall file a 
semimonthly tax return covering such spirits on Form 5000.24, and 
remittance, as required by Sec. 19.524 or Sec. 19.525, not later than 
the 14th day after the last day of the return period, except as provided 
by paragraph (c) of this section. If the due date falls on a Saturday, 
Sunday, or legal holiday, the return and remittance shall be due on the 
immediately preceding day which is not a Saturday, Sunday, or legal 
holiday, except as provided by paragraph (c)(3) of this section.
    (b) Payment pursuant to prepayment return. If the proprietor of a 
distilled spirits plant desires to withdraw spirits from bonded premises 
on determination of tax and does not have on file an approved withdrawal 
or unit bond of sufficient penal sum to cover the withdrawal, if there 
is default by him in any payment of tax under this part, or the 
proprietor is notified by the regional director (compliance) as provided 
in Sec. 19.522(b)(2), the proprietor shall not remove the spirits from 
the bonded premises until the tax thereon has been paid. To pay the tax, 
the proprietor of the bonded premises shall file a prepayment return on 
Form 5000.24, and remittance as required by

[[Page 364]]

Sec. 19.524 or Sec. 19.525, before removal of the spirits.
    (c) Special rule for taxes due for the month of September (effective 
after December 31, 1994). (1)(i) Except as provided in paragraph 
(c)(1)(ii) of this section, the second semimonthly period for the month 
of September shall be divided into two payment periods, from the 16th 
day through the 26th day, and from the 27th day through the 30th day. 
The proprietor shall file a return on Form 5000.24, and make remittance, 
for the period September 16-26, no later than September 29. The 
proprietor shall file a return on Form 5000.24, and make remittance, for 
the period September 27-30, no later than October 14.
    (ii) Taxpayment not by electronic fund transfer. In the case of 
taxes not required to be remitted by electronic fund transfer as 
prescribed by Sec. 19.524, the second semimonthly period of September 
shall be divided into two payment periods, from the 16th day through the 
25th day, and the 26th day through the 30th day. The proprietor shall 
file a return on Form 5000.24, and make remittance, for the period 
September 16-25, no later than September 28. The proprietor shall file a 
return on Form 5000.24, and make remittance, for the period September 
26-30, no later than October 14.
    (2) Amount of payment: Safe harbor rule. (i) Taxpayers are 
considered to have met the requirements of paragraph (c)(1)(i) of this 
section, if the amount paid no later than September 29 is not less than 
\11/15\ (73.3 percent) of the tax liability incurred for the semimonthly 
period beginning on September 1 and ending on September 15, and if any 
underpayment of tax is paid by October 14.
    (ii) Taxpayers are considered to have met the requirements of 
paragraph (c)(1)(ii) of this section, if the amount paid no later than 
September 28 is not less than 2/3rds (66.7 percent) of the tax liability 
incurred for the semimonthly period beginning on September 1 and ending 
on September 15, and if any underpayment of tax is paid by October 14.
    (3) Last day for payment. If the required taxpayment due date for 
the periods September 16-25 or September 16-26 as applicable, falls on a 
Saturday or legal holiday, the return and remittance shall be due on the 
immediately preceding day. If the required due date falls on a Sunday, 
the return and remittance shall be due on the immediately following day.
    (4) Example. Payment of tax for the month of September. (i) Facts. 
X, a distilled spirits plant proprietor required to pay taxes by 
electronic fund transfer, incurred tax liability in the amount of 
$30,000 for the first semimonthly period of September. For the period 
September 16-26, X incurred tax liability in the amount of $45,000, and 
for the period September 27-30, X incurred tax liability in the amount 
of $2,000.
    (ii) Payment requirement. X's payment of tax in the amount of 
$30,000 for the first semimonthly period of September is due no later 
than September 29 (Sec. 19.522(a)). X's payment of tax for the period 
September 16-26 is also due no later than September 29 
(Sec. 19.523(c)(1)(i)). X may use the safe harbor rule to determine the 
amount of payment due for the period of September 16-26 
(Sec. 19.523(c)(2)). Under the safe harbor rule, X's payment of tax must 
equal $21,990.00, 11/15ths of the tax liability incurred during the 
first semimonthly period of September. Additionally, X's payment of tax 
in the amount of $2,000 for the period September 27-30 must be paid no 
later than October 14 (Sec. 19.523(c)(1)(i)). X must also pay the 
underpayment of tax, $23,010.00, for the period September 16-26, no 
later than October 14 (Sec. 19.523(c)(2)).

(Approved by the Office of Management and Budget under control number 
1512-0467)

[T.D. ATF-219, 50 FR 51387, Dec. 17, 1985, as amended by T.D. ATF-246, 
52 FR 668, Jan. 8, 1987; T.D. ATF-365, 60 FR 33668, June 28, 1995]



Sec. 19.524  Payment of tax by electronic fund transfer.

    (a) General. (1) Each taxpayer who was liable, during a calendar 
year, for a gross amount equal to or exceeding five million dollars in 
distilled spirits taxes combining tax liabilities incurred under this 
part and parts 26 and 251 of this chapter, shall use a commercial bank 
in making payment by electronic fund transfer (EFT) of distilled spirits 
taxes during the succeeding calendar year. Payment of distilled spirits

[[Page 365]]

taxes by cash, check, or money order, as described in Sec. 19.525, is 
not authorized for a taxpayer who is required, by this section, to make 
remittances by EFT. For purposes of this section, the dollar amount of 
tax liability is defined as the gross tax liability on all taxable 
withdrawals and importations (including distilled spirits products 
brought into the United States from Puerto Rico or the Virgin Islands) 
during the calendar year, without regard to any drawbacks, credits, or 
refunds, for all premises from which such activities are conducted by 
the taxpayer. Overpayments are not taken into account in summarizing the 
gross tax liability.
    (2) For the purposes of this section, a taxpayer includes a 
controlled group of corporations, as defined in 26 U.S.C. 1563, and 
implementing regulations in 26 CFR 1.1563-1 through 1.1563-4, except 
that the words ``at least 80 percent'' shall be replaced by the words 
``more than 50 percent'' in each place it appears in subsection (a) of 
26 U.S.C. 1563, as well as in the implementing regulations. Also, the 
rules for a ``controlled group of corporations'' apply in a similar 
fashion to groups which include partnerships and/or sole 
proprietorships. If one entity maintains more than 50% control over a 
group consisting of corporations and one, or more, partnerships and/or 
sole proprietorships, all of the members of the controlled group are one 
taxpayer for the purpose of determining who is required to make 
remittances by EFT.
    (3) A taxpayer who is required by this section to make remittances 
by EFT, shall make a separate EFT remittance and file a separate return, 
ATF F 5000.24, for each distilled spirits plant from which spirits are 
withdrawn upon determination of tax.
    (b) Requirements. (1) On or before January 10 of each calendar year, 
except for a taxpayer already remitting the tax by EFT, each taxpayer 
who was liable for a gross amount equal to or exceeding five million 
dollars in distilled spirits taxes during the previous calendar year, 
combining tax liabilities incurred under this part and parts 26 and 251 
of this chapter, shall notify the regional director (compliance), for 
each region in which taxes are paid. The notice shall be an agreement to 
make remittances by EFT.
    (2) For each return filed in accordance with this part, the taxpayer 
shall direct the taxpayer's bank to make an electronic fund transfer in 
the amount of the taxpayment to the Treasury Account as provided in 
paragraph (e) of this section. The request shall be made to the bank 
early enough for the transfer to be made to the Treasury Account by no 
later than the close of business on the last day for filing the return, 
prescribed in Sec. 19.523. The request shall take into account any time 
limit established by the bank.
    (3) If a taxpayer was liable for less than five million dollars in 
distilled spirits taxes during the preceding calendar year, combining 
tax liabilities incurred under this part and parts 26 and 251 of this 
chapter, the taxpayer may choose either to continue remitting the tax as 
provided in this section or to remit the tax with the return as 
prescribed by Sec. 19.525. Upon filing the first return on which the 
taxpayer chooses to discontinue remitting the tax by EFT and to begin 
remitting the tax with the tax return, the taxpayer shall notify the 
regional director (compliance) by attaching a written notification to 
ATF F 5000.24, stating that no taxes are due by EFT, because the tax 
liability during the preceding calendar year was less than five million 
dollars, and that the remittance shall be filed with the tax return.
    (c) Remittance. (1) Each taxpayer shall show on the return, ATF F 
5000.24, information about remitting the tax for that return by EFT and 
shall file the return with ATF, in accordance with the instructions on 
ATF F 5000.24.
    (2) Remittances shall be considered as made when the taxpayment by 
electronic fund transfer is received by the Treasury Account. For 
purposes of this section, a taxpayment by electronic fund transfer shall 
be considered as received by the Treasury Account when it is paid to a 
Federal Reserve Bank.
    (3) When the taxpayer directs the bank to effect an electronic fund 
transfer message as required by paragraph (b)(2) of this section, any 
transfer data record furnished to the taxpayer, through normal banking 
procedures,

[[Page 366]]

will serve as the record of payment, and shall be retained as part of 
required records.
    (d) Failure to make a taxpayment by EFT. The taxpayer is subject to 
a penalty imposed by 26 U.S.C. 5684, 6651, or 6656, as applicable, for 
failure to make a taxpayment by EFT on or before the close of business 
on the prescribed last day for filing.
    (e) Procedure. Upon the notification required under paragraph (b)(1) 
of this section, the regional director (compliance) will issue to the 
taxpayer an ATF Procedure entitled, Payment of Tax by Electronic Fund 
Transfer. This publication outlines the procedure a taxpayer is to 
follow when preparing returns and EFT remittances in accordance with 
this part. The U.S. Customs Service will provide the taxpayer with 
instructions for preparing EFT remittances for payments to be made to 
the U.S. Customs Service.

(Act of August 16, 1954, 68A Stat. 775, as amended (26 U.S.C. 6302); 
sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5061))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985; 50 
FR 23949, June 7, 1985, as amended by T.D. ATF-219, 50 FR 51388, Dec. 
17, 1985; T.D. ATF-245, 52 FR 532, Jan. 7, 1987; T.D. ATF-251, 52 FR 
19313, May 22, 1987; T.D. ATF-262, 52 FR 47559, Dec. 15, 1987; T.D. ATF-
459, 66 FR 38549, July 25, 2001]



Sec. 19.525  Manner of filing returns.

    (a) Each return on Form 5000.24 shall be filed with the ATF, in 
accordance with the instructions on the form. If the return and 
remittance are to be filed with a designated ATF Officer, the proprietor 
shall file the return and remittance no later than 2:00 p.m. on the date 
the return is required to be filed.
    (b) When the proprietor sends the return on Form 5000.24 by U.S. 
mail, the official postmark of the U.S. Postal Service stamped on the 
cover in which the return was mailed shall be considered the date of 
delivery of the remittance. When the postmark on the cover is illegible, 
the burden of proving when the postmark was made will be on the 
proprietor. When the proprietor sends the return with or without 
remittance by registered mail or by certified mail, the date of registry 
or the date of the postmark on the sender's receipt of certified mail, 
as the case may be, shall be treated as the date of delivery of the 
return and, if accompanied, of the remittance.

(Aug. 16, 1954, ch. 736, 68A Stat. 775, as amended (26 U.S.C. 6302))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-219, 50 
FR 51388, Dec. 17, 1985; T.D. ATF-251, 52 FR 19313, May 22, 1987]



Sec. 19.526  Removal of spirits on tax determination.

    No spirits shall be removed from bonded premises, except as 
otherwise provided by law, unless the tax thereon has been paid or 
determined. A record of tax determination shall be prepared for each 
removal of spirits as provided in Sec. 19.76.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5205); 
sec. 807, Pub. L. 96-39, 93 Stat. 285 (26 U.S.C. 5213))

              Withdrawal of Spirits Without Payment of Tax



Sec. 19.531  Authorized withdrawals without payment of tax.

    Spirits may be withdrawn from bonded premises, without payment of 
tax for:
    (a) Export, as authorized under 26 U.S.C. 5214(a)(4);
    (b) Transfer to customs manufacturing bonded warehouses, as 
authorized under 19 U.S.C. 1311;
    (c) Transfer to foreign-trade zones, as authorized under 19 U.S.C. 
81c;
    (d) Supplies for certain vessels and aircraft, as authorized under 
19 U.S.C. 1309;
    (e) Transfer to customs bonded warehouses, as authorized under 26 
U.S.C. 5066 or 5214(a)(9);
    (f) Use in wine production, as authorized under 26 U.S.C. 5373;
    (g) Transfer to any university, college of learning, or institution 
of scientific research for experimental or research use as authorized 
under 26 U.S.C. 5312(a);
    (h) Research, development or testing, as authorized under 26 U.S.C. 
5214(a)(10). The withdrawal of spirits as provided in paragraphs (a) 
through (e) of this section shall be in accordance with the regulations 
in 27 CFR part 252; or,

[[Page 367]]

    (i) Use in the production on bonded wine cellar premises of wine and 
wine products which will be rendered unfit for beverage use, as 
authorized by 26 U.S.C. 5362(d). The withdrawal of spirits as provided 
in paragraphs (a) through (e) of this section shall be in accordance 
with the regulations in part 252 of this chapter.

(Sec. 311, Tariff Act of 1930, 46 Stat. 691, as amended (19 U.S.C. 
1311); sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1375, as 
amended, 1382, as amended (26 U.S.C. 5214, 5312, 5373); sec. 3, Pub. L. 
91-659, 84 Stat. 1965, as amended (26 U.S.C. 5066); sec. 455, Pub. L. 
98-369, 98 Stat. 494 (26 U.S.C. 5214))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-227, 51 
FR 13216, Apr. 18, 1986]



Sec. 19.532  Withdrawals of spirits for use in wine production.

    Wine spirits may be withdrawn to a bonded wine cellar without 
payment of tax for use in wine production. When wine spirits are 
consigned, the proprietor shall prepare a transfer record according to 
Sec. 19.770. Unless wine spirits in packages are to be withdrawn on the 
production or filling gauge, the proprietor shall prepare a package 
gauge record according to Sec. 19.769 and attach it to the transfer 
record.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1382, as amended 
(26 U.S.C. 5214, 5373))



Sec. 19.533  Withdrawal of spirits without payment of tax for experimental or research use.

    Any scientific university, college of learning, or institution of 
scientific research (which has qualified under the provisions of 
Sec. 19.71 to withdraw spirits from a bonded premises), desiring to 
withdraw a specific quantity of spirits for experimental or research 
use, shall file a letterhead application with the regional director 
(compliance) of the region in which the applicant's premises are 
located.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1375, as amended (26 U.S.C. 5312))



Sec. 19.534  Withdrawals of spirits for use in production of nonbeverage wine and nonbeverage wine products.

    Spirits withdrawn without payment of tax may be removed, pursuant to 
the provisions of part 24 of this chapter, to a bonded wine cellar for 
use in the production of nonbeverage wine and nonbeverage wine products. 
(Sec. 455, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 5214))

[T.D. 372, 61 FR 20724, May 8, 1996]

                    Withdrawal of Spirits Free of Tax



Sec. 19.536  Authorized withdrawals free of tax.

    Pursuant to the regulations in this chapter, spirits may be 
withdrawn from bonded premises free of tax--
    (a) On receipt of a signed photocopy of a permit, issued under part 
22 of this chapter, to procure spirits for nonbeverage purposes and not 
for resale or use in the manufacture of any product for sale, as 
provided in 26 U.S.C. 5214(a)(3);
    (b) On receipt of a signed photocopy of a permit, issued under part 
22 of this chapter, to procure spirits by and for the use of the United 
States or any governmental agency, any State, any political division of 
a State, or the District of Columbia, for nonbeverage purposes as 
provided in 26 U.S.C. 5214(a)(2);
    (c) On receipt of a valid permit, issued under this part, to procure 
spirits by and for the use of the United States, under the provisions of 
26 U.S.C. 7510, for purposes other than as provided in paragraph (b) of 
this section and 26 U.S.C. 5214(a)(2);
    (d) After being specially denatured--
    (1) On receipt of a signed photocopy of a permit to procure 
specially denatured spirits, issued under part 20 of this chapter.
    (2) For export;
    (e) After being completely denatured, for any lawful purpose;
    (f) When contained in an article.

(Act of August 16, 1954, Ch. 736, 68A Stat. 900 (26 U.S.C. 7510); sec. 
201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 5214))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50 
FR 9160, Mar. 6, 1985]



Sec. 19.537  Withdrawal of spirits free of tax.

    Spirits withdrawn free of tax under Sec. 19.536 (a), (b), or (c) 
shall be withdrawn in approved containers and shipped to the consignee 
designated in the permit. Unless the spirits are in cases or are to be 
withdrawn on the

[[Page 368]]

production or filling gauge, the proprietor shall gauge each container. 
If the spirits are in packages which are to be gauged, the proprietor 
shall prepare a package gauge record according to Sec. 19.769, and 
attach it to the record of shipment. For each shipment the proprietor 
shall prepare a record of shipment (shipping invoice, bill of lading, or 
another document intended for the same purpose) and forward the original 
to the consignee, in accordance with Sec. 19.779. Bulk conveyances used 
to transport spirits withdrawn free of tax under this section shall be 
secured in accordance with Sec. 19.96.

(Approved by the Office of Management and Budget under control number 
1512-0334)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 5214))

[T.D. ATF-199, 50 FR 9160, Mar. 6, 1985]



Sec. 19.538  Withdrawal of spirits by the United States.

    (a) Nonbeverage use. (1) Government agencies of the United States, 
intending to procure specially denatured spirits or spirits free of tax 
for nonbeverage purposes, shall make application for and receive a 
permit, Form 5150.33, from the Director. Permits may be issued to 
Government agencies of the United States for:
    (i) Withdrawal and use of specially denatured spirits, in accordance 
with part 20 of this chapter;
    (ii) Withdrawal and use of alcohol free of tax for nonbeverage 
purposes, in accordance with part 22 of this chapter; or
    (iii) Importation and use of alcohol free of tax for nonbeverage 
purposes, in accordance with part 251 of this chapter.
    (2) All permits previously issued to Government agencies of the 
United States for use of spirits or specially denatured spirits on Form 
1444 shall remain valid and will be regulated by the same provisions of 
this chapter as it refers to permits on Form 5150.33.
    (3) A Government agency shall forward a signed copy of its permit, 
Form 5150.33, for retention by the proprietor of the distilled spirits 
plant for the initial purchase. Subsequent orders with the same vendor 
shall refer to the permit number.
    (4) In the case of a Government agency holding a single permit for 
use of other sub-agencies, the signed copy of the permit shall contain 
an attachment listing all other locations authorized to procure spirits 
under that permit.
    (5) For each shipment under this section, the proprietor shall 
prepare a record of shipment and forward the original to the consignee 
agency, in accordance with Sec. 19.779.
    (b) Beverage use. (1) Distilled spirits may be withdrawn free of 
tax, under 26 U.S.C. 7510, for use for beverage purposes by Government 
agencies of the United States on receipt of a proper Government purchase 
order signed by the head of the agency, or an authorized delegate.
    (2) For each withdrawal under paragraph (b)(1) of this section, each 
case removed shall be plainly marked ``For Use of the United States'' in 
addition to the marks required by subpart R of this part.
    (3) For each withdrawal under paragraph (b)(1) of this section, the 
proprietor shall prepare a record containing the information required by 
Sec. 19.761 for a record of tax determination. The proprietor shall mark 
this record ``Free of Tax For Use of the United States.''

(Act of August 16, 1954, Ch. 736, 68A Stat. 900 (26 U.S.C. 7510); sec. 
201, Pub. L. 85-859, 72 Stat. 1370, as amended, 1375, as amended (26 
U.S.C. 5271, 5313))

[T.D. T.D. ATF-199, 50 FR 9160, Mar. 6, 1985]



Sec. 19.539  Disposition of excess spirits.

    Upon discontinuance of use of spirits or specially denatured spirits 
withdrawn free of tax under Sec. 19.538, a Government agency may dispose 
of excess spirits (a) to another Government agency (the receiving agency 
is required to have a permit under part 20 or 22 if the spirits were 
withdrawn for nonbeverage purposes), (b) by returning the spirits to the 
proprietor of a distilled spirits plant, or (c) in any manner authorized 
by the Director. In no case may such spirits be disposed of to

[[Page 369]]

the general public, or otherwise than as provided in this section.

(Act of August 16, 1954, Ch. 736, 68A Stat. 900 (26 U.S.C. 7510); sec. 
201, Pub. L. 85-859, 72 Stat. 1370, as amended, 1375, as amended (26 
U.S.C. 5271, 5313))

[T.D. ATF-199, 50 FR 9161, Mar. 6, 1985]



Sec. 19.540  Removal of denatured spirits and articles.

    (a) Specially denatured spirits. (1) Specially denatured spirits 
withdrawn free of tax under Sec. 19.536(d) shall be shipped in approved 
containers to the consignee designated on the permit. If such spirits 
are for export or for transfer to a foreign-trade zone for export or for 
storage pending exportation, they shall be withdrawn under the 
applicable provisions of part 252 of this chapter.
    (2) Domestic specially denatured spirits may be transferred to 
qualified users located in a foreign-trade zone for use in the 
manufacture of articles under the applicable provisions of part 20 of 
this chapter. The alcohol, as defined in 27 CFR part 20, in domestic 
specially denatured spirits must be produced entirely in the United 
States, including Puerto Rico.
    (3) When specially denatured spirits are shipped to a qualified 
user, dealer, or an applicant or prospective applicant under paragraph 
(c)(2)(ii) of this section, the proprietor shall prepare a record of 
shipment in accordance with Sec. 19.779. Bulk conveyances used to 
transport specially denatured spirits shall be secured in accordance 
with the provisions of Sec. 19.96.
    (b) Completely denatured alcohol. No permit, application, or notice 
is required for removal of completely, denatured alcohol from bonded 
premises.
    (c) Samples of denatured spirits. (1) The proprietor may take 
samples of denatured spirits free of tax which may be necessary for the 
conduct of business.
    (2) The proprietor may furnish samples of specially denatured 
spirits:
    (i) To dealers in, and users of, specially denatured spirits in 
advance of sales; or
    (ii) To applicants or prospective applicants for permits to use 
specially denatured spirits, for experimental purposes or for use in 
preparing samples of a finished product for submission on request by the 
Director.
    (A) Proprietors shall maintain records to ensure that samples of 
specially denatured spirits dispensed to a nonpermittee do not exceed 
five gallons per calendar year. Records of samples of less than five 
gallons shall be maintained as provided in Sec. 19.766.
    (B) Samples in excess of five gallons may be furnished to 
nonpermittees only after the consignee provides the proprietor with a 
letterhead application approved by the regional director (compliance) 
under Sec. 20.252 of this chapter. The proprietor shall retain the 
approved letterhead application on file as a part of the record of 
transaction.
    (C) For each shipment of a sample in excess of five gallons under 
paragraph (c)(2)(ii)(B) of this section, the proprietor shall prepare a 
record of shipment and forward the original to the consignee, in 
accordance with Sec. 19.779.
    (3) Each sample of specially denatured spirits withdrawn under the 
provisions of paragraph (c)(2) of this section shall have a label 
affixed showing the following information:
    (i) The word ``Sample'', and the words ``Specially Denatured 
Alcohol'', or ``Specially Denatured Rum'', whichever is applicable;
    (ii) The name, address, and plant number of the proprietor; and
    (iii) The formula number.
    (d) Articles. Removal of articles from bonded premises shall be in 
accordance with the provisions of part 20 of this chapter.

(Approved by the Office of Management and Budget under control number 
1512-0337)

(48 Stat. 999, as amended, 72 Stat. 1362, as amended, 1370, as amended 
(19 U.S.C. 81c; 26 U.S.C. 5214, 5271))

[T.D. ATF-199, 50 FR 9161, Mar. 1, 1985; 50 FR 20099, May 14, 1985, as 
amended by T.D. ATF-274, 53 FR 25156, July 5, 1988]



Sec. 19.541  Reconsignment.

    (a) Reconsignment. When, prior to or on arrival at the consignee's 
premises, spirits or specially denatured spirits withdrawn free of tax 
under Sec. 19.536 are not accepted by the consignee or by a carrier, the 
spirits may be reconsigned (1) to the consignor, (2) to another 
proprietor for return to the bonded premises under the provisions of 
Sec. 19.685, or

[[Page 370]]

(3) to another permittee holding a valid permit issued under part 20 or 
22 of this chapter, as applicable.
    (b) Consent of surety. In case of reconsignment to bonded premises, 
the provisions of Sec. 19.685, relating to consent of surety in respect 
to return of spirits or specially denatured spirits withdrawn free of 
tax, are applicable.
    (c) Records of reconsignment. In the case of reconsignment, the 
consignor shall cancel the initial record of shipment and prepare a new 
record of shipment, if shipment is to another permittee or proprietor. 
The new record of shipment shall be marked ``Reconsignment.'' File 
copies of the canceled and the new record of shipment will be annotated 
to cross reference each other.

(Records relating to tax-free alcohol approved by the Office of 
Management and Budget under control number 1512-0334; records relating 
to specially denatured spirits approved by the Office of Management and 
Budget under control number 1512-0337)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

[T.D. ATF-199, 50 FR 9161, Mar. 6, 1985]



                     Subpart Q--Losses and Shortages

                                 Losses



Sec. 19.561  Losses in general.

    (a) Allowable losses. Except as provided in paragraph (b) of this 
section, tax shall not be collected or, if paid, the tax shall be 
refunded when spirits, denatured spirits or wines are lost or destroyed 
while in bond.
    (b) Exceptions. Tax shall be collected in the case of:
    (1) Theft, unless the regional director (compliance) finds that the 
theft occurred without connivance, collusion, fraud or negligence on the 
part of the proprietor, owner, consignor, consignee, bailee, or carrier, 
or the employees or agents of any of them;
    (2) Voluntary destruction carried out other than as provided in 
subpart U of this part;
    (3) Unexplained shortage of bottled spirits.
    (c) Burden of proof. When it appears that a loss occurred due to 
theft, the burden of proof shall be on the proprietor or other person 
liable for the tax to establish to the satisfaction of the regional 
director (compliance) that the loss did not result from connivance, 
collusion, fraud, or negligence on the part of the proprietor, owner, 
consignor, consignee, bailee, or carrier, or the employees or agents of 
any of them.
    (d) Claims for losses allowable under this section shall be filed in 
accordance with applicable provisions of subpart C of this part.
    (e) Limitations. The abatement, remission, credit, or refund of 
taxes on spirits, denatured spirits, or wines lost by theft shall be 
allowed only to the extent that the claimant is not indemnified against 
or recompensed for the taxes.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended, 1381, as amended 
(26 U.S.C. 5008, 5370))



Sec. 19.562  Determination of losses in bond.

    (a) General. (1) Losses (whether by theft, unauthorized voluntary 
destruction, or otherwise) of spirits, denatured spirits, and wines 
shall be determined by the proprietor:
    (i) Each time a tank or bulk conveyance is emptied;
    (ii) On the basis of required physical inventories; and
    (iii) Upon discovery of accidents or unusual variations in gauges.
    (2) When it appears that any container in bond has sustained a loss 
resulting from theft or unauthorized voluntary destruction, such loss 
shall be taxpaid or the container shall be segregated (as necessary) 
with the loss reported promptly to the area supervisor.
    (3) In any instance in which spirits, denatured spirits or wines are 
lost or destroyed in bond, whether by theft, unauthorized voluntary 
destruction, or otherwise, the regional director (compliance) may 
require the proprietor or other person liable for the tax to file a 
claim for relief from the tax in accordance with Sec. 19.41.
    (b) Missing packages. Whenever any packages of spirits, denatured 
spirits, or wine recorded as deposited on bonded premises cannot be 
located or otherwise accounted for, the proprietor shall promptly report 
such fact to the area

[[Page 371]]

supervisor, and the proprietor shall either pay the tax on the lost 
spirits, denatured spirits, or wines, or file a claim with respect 
thereto under the provisions of Sec. 19.41.
    (c) Tampering, material deficiency, or loss of proof. When it is 
found that spirits, denatured spirits, or wines in a container have been 
tampered with, or when a material deficiency in the recorded quantity of 
such products is found without evidence of loss by leakage or casualty, 
or when there is a loss of proof of such products not attributable to 
variations in gauging, the proprietor shall segregate the container (as 
necessary) and shall promptly report such fact to the area supervisor, 
unless the proprietor acknowledges liability for the tax on the loss and 
elects to pay the tax on the quantity lost.
    (d) Excessive in-transit losses. Losses of spirits, denatured 
spirits, or wines received in bond in bulk conveyances which exceed one 
percent of the quantity of a product consigned shall be considered as 
excessive in-transit losses. However, in the case of transcontinental 
transfers in bond of wine, only losses in excess of two percent of the 
quantity of wine consigned shall be considered as excessive in-transit 
losses. The proprietor shall promptly report all such excessive in-
transit losses to the area supervisor.
    (e) Storage account loss limitation. When the quantity of spirits 
lost from all the storage tanks and bulk conveyances exceeds 1\1/2\ 
percent of the total quantity contained in the tanks and bulk 
conveyances during the calendar quarter, the loss shall be taxpaid 
unless a claim for remission is filed in accordance with the provisions 
of Sec. 19.41 and is allowed by the regional director (compliance).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended, 1381, as amended 
(26 U.S.C. 5008, 5370))



Sec. 19.563  Loss of spirits from packages.

    (a) Original quantity. Where there is evidence satisfactory to the 
regional director (compliance) that any loss of spirits (including 
denatured spirits) from any package deposited on bonded premises is due 
to theft (except where the regional director (compliance) has made the 
finding provided for in Sec. 19.561(b)) or is due to unauthorized 
voluntary destruction, the regional director (compliance) may require 
the immediate tax payment of the quantity of spirits so lost, except 
where the extent of any loss from causes other than theft or 
unauthorized voluntary destruction can be established by the proprietor 
to the satisfaction of the regional director (compliance), the regional 
director (compliance) may credit the tax on the loss so established 
against the tax on the original quantity.
    (b) Alternative method. Where there is evidence satisfactory to the 
regional director (compliance) that there has been access, other than as 
authorized by law, to the contents of packages entered for deposit on 
bonded premises, and the extent of such access is such as to evidence a 
lack of due diligence or a failure to employ necessary and effective 
controls on the part of the proprietor, the regional director 
(compliance) may (in lieu of the procedure prescribed in paragraph (a) 
of this section) assess an amount equal to the tax on 5 proof gallons of 
spirits on each of the total number of such packages as determined by 
him.
    (c) Applicability to packages filled after entry. The provisions of 
this section apply to spirits (including denatured spirits) which are 
filled into casks or packages as authorized by law, after entry and 
deposit on bonded premises, whether by recasking, filling from tanks, 
mingling, or otherwise. The quantity filled into those casks or packages 
is considered to be the original quantity for the purpose of this 
section in the case of loss from those casks or packages.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1320, as amended (26 U.S.C. 5006))



Sec. 19.564  Losses after tax determination.

    (a) Applicability. Pursuant to a claim, the tax on spirits which are 
lost after determination of tax and before completion of physical 
removal from bonded premises, may be abated or remitted or refunded or 
credited without interest to the proprietor of the bonded premises where 
the loss occurred.

[[Page 372]]

    (b) Conditions. (1) Claims for losses under this section shall be 
filed in accordance with subpart C of this part.
    (2) This section shall not apply if the tax would have been 
collectible by reason of 26 U.S.C. 5008(a)(1) if the loss occurred on 
bonded premises before determination of tax.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended (26 U.S.C. 5008))

                                Shortages



Sec. 19.565  Shortages of bottled distilled spirits.

    An unexplained shortage of bottled distilled spirits shall be 
taxpaid: (a) Immediately on a prepayment return on Form 5000.24, or (b) 
on the semimonthly return on Form 5000.24 for the return period during 
which the shortage was ascertained. Unexplained shortages shall be 
determined by comparing the spirits recorded to be on hand with the 
results of the quantitative determination of the spirits found to be on 
hand by actual count during the physical inventory required by 
Sec. 19.402. When the recorded quantity is greater than the quantity 
determined by the physical inventory, the difference is an unexplained 
shortage. The records shall be adjusted to reflect the physical 
inventory.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended (26 U.S.C. 5008))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-219, 50 
FR 51388, Dec. 17, 1985]



                     Subpart R--Containers and Marks

                               Containers



Sec. 19.581  Authorized containers.

    (a) General. Proprietors shall use for any purpose of containing, 
storing, transferring, conveying, removing, or withdrawing spirits or 
denatured spirits under this part only containers which are authorized 
by, or under the provisions of this part for such purpose, and a 
container so authorized will be deemed to be an approved container for 
such purpose. Except where stated otherwise, the provisions of part 20 
of this chapter apply to containers used for containing, storing and 
shipping of articles, and the provisions of 27 CFR part 24 apply to 
containers used for storage or transfer of wine. Except for liquor 
bottles, this subpart does not regulate or prohibit the use on plant 
premises of any container for purposes other than containing alcoholic 
substances.
    (b) Alternate containers. In addition to the types of containers 
specifically authorized by this part for a particular purpose, a 
container of another type may be authorized for that purpose by the 
Director on a finding by him that the use of such container will afford 
protection to the revenue equal to or greater than that afforded by the 
containers specifically authorized by this part, and that the use will 
not cause administrative difficulty. If another container is so 
authorized by the Director, he shall prescribe the detail and manner in 
which such container shall be constructed, protected, and marked, 
consistent with the provisions of this part and the extent of such use. 
Similarly, where a container authorized for a particular purpose is 
required by this subpart to be made of specified materials, the Director 
may authorize the use of containers made of other materials which he has 
found to be suitable for the intended purpose.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended, 1362, as amended, 
1374, as amended (26 U.S.C. 5206, 5212, 5214, 5301); sec. 805, Pub. L. 
96-39, 93 Stat. 279 (26 U.S.C. 5002); sec. 807, Pub. L. 96-39, 93 Stat. 
285 (26 U.S.C. 5213))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50 
FR 9162, Mar. 6, 1985; T.D. 372, 61 FR 20724, May 8, 1996]



Sec. 19.582  Spirits for nonindustrial use.

    (a) Determination of use. Containers of spirits of a capacity of 1 
gallon (3.875 liters) or less are considered to be for nonindustrial 
use, except for those which contain:
    (1) Anhydrous alcohol; or
    (2) Alcohol which may be withdrawn from bond free of tax.
    (b) Containers. If not inconsistent with the provisions in 27 CFR 
part 5, spirits for nonindustrial use may be filled into:
    (1) Packages, or
    (2) Other containers which are filled during processing operations 
and contain not more than 10 gallons.

[[Page 373]]

    (c) Bottles and labels. The provisions of subpart S of this part 
govern the liquor bottles and labels to be used in bottling spirits for 
nonindustrial domestic use.
    (d) Cases. Spirits for nonindustrial use in containers with a 
capacity of 1 gallon or less shall be placed in cases which afford 
reasonable protection against breakage. Such cases shall not be 
transferred in bond.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended, 1374, as amended 
(26 U.S.C. 5206, 5212, 5301))



Sec. 19.583  Spirits for industrial use.

    (a) Containers. (1) Denatured spirits may be filled into glass or 
metal containers of a capacity not greater than 10 gallons.
    (2) Other spirits for industrial use may be filled into
    (i) Containers of 1 gallon or less; or
    (ii) Glass or metal containers of a capacity of 1 gallon but not 
greater than 10 gallons.
    (b) Encased containers. Unlabeled containers holding from 1 to 10 
gallons of denatured spirits and spirits of 190 degree proof or more for 
industrial use may be encased in wood, fiberboard, or similar material 
if:
    (1) The cases are constructed so that the surface, including the 
opening, of the container is not exposed;
    (2) Required marks are applied to an exterior surface of the case;
    (3) The case is constructed so that the portion containing marks 
will remain attached to the inner container until all the contents have 
been removed; and
    (4) A statement reading ``Do not remove inner container until 
emptied'' or of similar meaning is placed on the portion of the case 
bearing the marks.
    (c) Cases. Except for encased containers, containers for denatured 
spirits and spirits for industrial use of a capacity of 1 gallon or less 
shall be placed in cases which afford reasonable protection against 
breakage.
    (d) Articles. Articles shall be packaged and labeled in accordance 
with the provisions of 27 CFR part 20.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended, 1374, as amended 
(26 U.S.C. 5206, 5301))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50 
FR 9162, Mar. 6, 1985; T.D. ATF-206, 50 FR 23952, June 7, 1985]



Sec. 19.584  Packages.

    Packages may be used on bonded premises for original entry of 
spirits, and for packaging from tanks, storing, transferring in bond, 
and withdrawing from bonded premises of spirits and denatured spirits. 
Packages shall be constructed so as to be capable of secure closure.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))



Sec. 19.585  Bulk conveyances.

    Bulk conveyances which conform to the requirements of Sec. 19.588 
may be used on bonded premises for original entry of spirits, and for 
filling from tanks, storing, transferring in bond, and withdrawing 
taxpaid spirits and denatured spirits. Spirits may be withdrawn free of 
tax, pursuant to the provisions of this part, in a bulk conveyance only 
for use of the United States, or if the Director has authorized the 
proprietor, as provided in Sec. 19.581, to so withdraw such spirits to a 
specified consignee. Spirits may be withdrawn without payment of tax, 
pursuant to the provisions of this part, in bulk conveyances for the 
purposes provided in Sec. 19.531 (a), (b), (c), (e), and (f).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))



Sec. 19.586  Tanks.

    Tanks which conform to the requirements of Sec. 19.273 may be used 
on bonded premises as containers for distilled spirits, denatured 
spirits, articles, and wines.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))

[[Page 374]]



Sec. 19.587  Pipelines.

    Pursuant to the provisions of this part, pipelines which conform to 
the requirements of Sec. 19.274 may be used for (a) the conveyance on 
bonded premises of spirits, denatured spirits, articles, and wines, and 
(b) the conveyance to and from bonded premises of spirits, denatured 
spirits, articles, and wines.

(Sec. 201, Pub. L 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))



Sec. 19.588  Construction of bulk conveyances.

    (a) Construction. All bulk conveyances authorized by this part shall 
conform to the following:
    (1) If the conveyance consists of two or more compartments, each 
shall be so constructed or arranged that emptying of any compartment 
will not afford access to the contents of any other compartment.
    (2) The conveyance (or in the case of compartmented conveyances, 
each compartment) shall be so arranged that it can be completely 
drained.
    (3) Each tank car or tank truck shall have permanently and legibly 
marked thereon its number, capacity in wine gallons, and the name or 
symbol of its owner.
    (4) If the conveyance consists of two or more compartments, each 
compartment shall be identified and the capacity of each shall be marked 
thereon.
    (5) A route board, or other suitable device, for carrying required 
marks or brands shall be provided on each bulk conveyance.
    (6) Calibrated charts showing the capacity of each compartment in 
wine gallons for each inch of depth, shall be available for use in 
measuring the contents of each tank truck, tank ship, or barge.
    (b) Proprietor's responsibility. Before filling any bulk conveyance, 
the proprietor shall examine it to ascertain that it meets the 
requirements of this section and is otherwise suitable for receiving the 
spirits, denatured spirits, or wines, and he shall refrain from, or 
discontinue, using any such conveyance found by him or by an ATF officer 
to be unsuitable.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended, 1362, as amended 
(26 U.S.C. 5206, 5212, 5214); sec. 807, Pub. L. 96-39, 93 Stat. 285 (26 
U.S.C. 5213))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50 
FR 23952, June 7, 1985]



Sec. 19.589  Restrictions on disposition of bulk spirits.

    (a) For nonindustrial use. Spirits for nonindustrial use may be sold 
or disposed of in containers holding more than 1 wine gallon only to the 
persons and for the purposes set forth in 27 CFR part 3.
    (b) For industrial use. Shipment or delivery of spirits (other than 
alcohol or neutral spirits) withdrawn from bond in containers holding 
more than 1 wine gallon for industrial use shall, as provided in 27 CFR 
part 3, be made directly to the user of the spirits.

(Sec. 201, Pub. L. 85-895, 72 Stat. 1356, as amended (26 U.S.C. 5201))

                                  Marks



Sec. 19.592  General.

    Proprietors shall mark, identify, and label all containers of 
spirits or denatured spirits as provided by this part. Containers of 
wine shall be marked in accordance with 27 CFR part 24. Containers of 
articles shall be marked in accordance with 27 CFR part 211.

(Sec. 201 Pub. L. 85-859, 72 Stat. 1358, as amended, 1360, as amended 
(26 U.S.C. 5204, 5206))

[T.D. ATF-206, 50 FR 23952, June 7, 1985, as amended by T.D. 372, 61 FR 
20724, May 8, 1996]



Sec. 19.593  Package identification numbers in production and storage.

    (a) General. Packages of spirits filled during production or storage 
operations after December 31, 1979, shall be marked with a lot 
identification representing the date the package is filled, and 
consisting, in the order shown, as follows:
    (1) The last two digits of the calendar year;

[[Page 375]]

    (2) An alphabetical designation from ``A'' through ``L'', 
representing January through December, in that order;
    (3) The digits corresponding to the day of the month; and
    (4) When more than one lot is filled into packages during the same 
day, for successive lots after the first lot, a letter suffix, in 
alphabetical order, with ``A'' representing the second lot, ``B'' 
representing the third lot, and so forth.

The first three lots filled into packages on January 2, 1980, would be 
identified as ``80A02'', ``80A02A'', ``80A02B''.
    (b) Packages constituting a lot. Packages of spirits received from 
customs custody or filled during any one day shall be given the same lot 
identification subject to the following conditions:
    (1) They are of the same type and either are of the same rated 
capacity or are uniformly filled with the same quantity by weight or 
other method provided in Sec. 19.319;
    (2) They are filled with spirits of the same kind and same proof;
    (3) They are filled with spirits which are mingled in accordance 
with Sec. 19.346; and
    (4) They are filled with imported spirits, Puerto Rican spirits, or 
Virgin Islands spirits, as applicable. Any remnant package shall itself 
constitute a lot.
    (c) Serial numbers. The regional director (compliance) may require 
serial numbers on packages of spirits within the same lot in conjunction 
with the lot identification, at the time of filling, receipt on bonded 
premises, or withdrawal from bond. Proprietors shall assign temporary 
serial numbers to packages for control purposes when they are 
transferred in bond in an unsecured conveyance or gauged after being 
tampered within the storage account.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]



Sec. 19.594  Numbering of packages and cases in processing.

    (a) General. Packages of spirits and denatured spirits filled during 
processing operations and cases containing bottles or other containers 
of spirits and denatured spirits shall, when filled, be consecutively 
numbered in a separate series by the proprietor commencing with ``1'' in 
each series of serial numbers, except that any series of such numbers in 
use may be continued. When the numbering in any series reaches 
``1,000,000'', the proprietor may recommence the series. However, a new 
series for packages of spirits and denatured spirits filled during 
processing operations shall be given an alphabetical prefix or suffix. 
For additional identification, separate series of serial numbers, 
distinguished from each other by the use of alphabetical prefixes or 
suffixes, may be established to identify size of bottles, brand names, 
or other information, on written notice to the regional director 
(compliance). Remnant cases shall be given the serial number of the last 
full case followed by the letter R. Where there is a change in the 
individual, firm, corporate name, or trade name, all series in use at 
that time shall be continued. However, for a change in proprietorship, a 
new series shall be commenced.
    (b) Alternative method for spirits, including denatured spirits, for 
industrial use. Instead of the numbering required by paragraph (a) of 
this section, packages and cases of spirits, including denatured 
spirits, for industrial use filled in processing may be marked with lot 
identification numbers provided in Sec. 19.593.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))



Sec. 19.595  Specifications for marks.

    (a) Manner. (1) The proprietor shall place the prescribed marks on 
cases, encased containers, and packages of spirits and denatured spirits 
so that they are:
    (i) Of sufficient size to be easily read;
    (ii) Of a color distinctly in contrast to that of the background;
    (iii) Legible; and
    (iv) Durable.
    (2) Cases, encased containers or packages may be marked by the use 
of labels which are legible and securely affixed.

[[Page 376]]

    (b) Location. The required marks shall be placed on one side or 
head, as applicable.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))



Sec. 19.596  Marks on packages of spirits filled on bonded premises.

    (a) Packages filled in production or storage. Except as otherwise 
provided in this part, packages of spirits filled in production or 
storage shall be marked with:
    (1) The name of the producer, or his trade name as required by 
paragraph (c) of this section;
    (2) The plant number of the producer, such as ``DSP-KY-708'';
    (3) The kind of spirits or, in the case of distillates removed under 
Sec. 19.322, the kind of distillates such as ``Grape distillate'', 
``Peach distillate'', etc.;
    (4) The package identification number;
    (5) ``BSA'' or ``OC'' when spirits are treated with caramel or oak 
chips, as the case may be;
    (6) The rated capacity of the package in gallons shown as ``RC--G''.
    (7) If packages of spirits of 190 degrees or more of proof are 
filled by other than the producer, the name (or trade name) and plant 
number of the packaging proprietor shall be substituted for that of the 
producer.
    (b) Packages filled in processing. Except as otherwise provided in 
this part, packages of spirits filled in processing shall be marked 
with:
    (1) The name of the processor, or his trade name;
    (2) The plant number of the processor, such as ``DSP-KY-708'';
    (3) The kind of spirits (in the case of an intermediate, the product 
name shown on Form 5110.38);
    (4) The serial number or lot identification number, as applicable, 
and date of filling;
    (5) Proof of spirits; and
    (6) If manufactured under an approved formula, the serial number of 
the formula.
    (c) Real or trade names. The producer's real name or any trade name 
authorized (as provided in Sec. 19.165), at the time of production, may 
be placed on any package filled at the time of production gauge, or at 
the time of original packaging of the spirits in wood when, as provided 
in Sec. 19.320, the spirits were not filled into wooden packages at the 
time of production gauge. When spirits have been mingled under 
Sec. 19.346, the proprietor may use any of the names represented in the 
mingled spirits, but no other name, as the name of the producer to be 
marked on packages filled with such mingled spirits. However, if the 
proprietor was the actual producer of the spirits, he may in any case 
use his real name. The processor's real name or any trade name 
authorized (as provided in Sec. 19.165) may be placed on any package 
filled with spirits during processing operations.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))



Sec. 19.597  Kind of spirits.

    (a) Designation. The designations as to kind of spirits required by 
Sec. 19.596 shall be in accordance with the classes and types of spirits 
set out in 27 CFR part 5, except that:
    (1) Spirits distilled at more than 160 degrees of proof, which lack 
the taste, aroma, and other characteristics generally attributed to 
whisky, brandy, rum, or gin, and which are substantially neutral in 
character, may be designated as ``Alcohol''. When alcohol is withdrawn 
on determination of tax, the designation shall consist of the word 
``Alcohol'' preceded or followed by a word or phrase descriptive of the 
material from which the alcohol was produced.
    (2) The designations for vodka, neutral spirits, or gin shall 
include a word or phrase descriptive of the material from which the 
spirits so designated were produced.
    (3) Spirits distilled at less than 190 degrees of proof which lack 
the taste, aroma, and other characteristics generally attributed to 
whisky, brandy, rum, or gin, may be designated ``Spirits'', preceded or 
followed by a word or phrase descriptive of the material from which 
produced. However, spirits distilled on or after July 1, 1972, as 
provided in this paragraph may not be designated ``Spirits grain'' or 
``Grain spirits''.
    (4) Spirits distilled from fruit at or above 190 degrees of proof, 
if intended

[[Page 377]]

for use in wine production, shall be designated ``Neutral Spirits--
Fruit'', preceded or followed by the name of the fruit from which 
produced.
    (5) Spirits distilled at not more than 160 degrees of proof from a 
fermented mash of not less than 51 percent rye, corn, wheat, malted 
barley, or malted rye grain, packaged in reused cooperage, may be 
designated ``Whisky'' if further qualified with the words ``Distilled 
from rye mash'' (or bourbon, wheat, malt, or rye malt mash, as the case 
may be). However, such spirits shall, if distilled from a fermented mash 
of not less than 80 percent corn, be designated ``Corn Whisky.''
    (b) Change of designation. A proprietor may, on written application 
to, and approval of the regional director (compliance), change the 
original designation for spirits at any time, before their withdrawal 
from bonded premises, to a new designation properly describing the 
spirits in accordance with the provisions of this section.
    (c) Other designations. If the proprietor proposes to produce 
spirits for which a designation has not been prescribed, he shall first 
make written application to the Director for a designation for such 
spirits and such spirits shall be branded accordingly.
    (d) Spirits for nonindustrial use. The provisions of this section 
shall not be construed as authority for applying designations to spirits 
withdrawn for nonindustrial use which designations do not comply with 
provisions of 27 CFR part 5.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))



Sec. 19.598  [Reserved]



Sec. 19.599  Change of packages in storage.

    When spirits are transferred from one package to another as 
authorized in Sec. 19.345, each new package shall be given the same 
package identification number and marks as the original package. The 
proprietor shall prepare and sign a label to be affixed to the head of 
each new package in the manner prescribed for affixing distilled spirits 
stamps. The label shall be in the following form:

    The spirits in this --------------------, (kind of cooperage)------
--------------, (Barrel or drum) package identification No.------------
--------, were transferred from a------------------, ------------------
--, (kind of cooperage)--------------------, (Barrel or drum) on--------
------------, (Date),

________________________________________________________________________

                              (Proprietor)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))



Sec. 19.600  [Reserved]



Sec. 19.601  Marks on containers of specially denatured spirits.

    (a) General. Each package, case, and encased container of specially 
denatured spirits filled on bonded premises shall be marked or labeled 
to show:
    (1) Quantity in gallons;
    (2) Serial number or lot identification number;
    (3) Plant number of the proprietor;
    (4) Designation or abbreviation of the specially denatured spirits 
by kind (alcohol or rum);
    (5) Formula number; and
    (6) Proof of spirits which were denatured at other than 190 degrees 
of proof.
    (b) Bottles. Each bottle shall be marked or labeled to show the 
information prescribed in paragraph (a) (1), (3), (4), (5), and (6) of 
this section.
    (c) Alternate formulations. When spirits are denatured under a 
formula authorizing a choice of types and quantities of denaturants, the 
container or case shall be marked to show actual types and quantities of 
denaturants used.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))



Sec. 19.602  Marks on containers of completely denatured alcohol.

    Each container of completely denatured alcohol, except pipelines and 
bulk conveyances, shall have marked on the head of the package, or side 
of the can or carton, the name of the proprietor by whom the containers 
were filled, the plant number where filled, the contents in wine 
gallons, the apparent proof, the words ``Completely

[[Page 378]]

Denatured Alcohol'', and the formula number.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended) (26 U.S.C. 5206))



Sec. 19.603  [Reserved]



Sec. 19.604  Caution label.

    Each container of completely denatured alcohol containing five 
gallons or less, sold or offered for sale, shall be labeled to show, in 
plain, legible letters, the words ``Completely Denatured Alcohol'' and 
the following statement ``Caution--contains poisonous ingredients.'' The 
name and address of the denaturer may be printed on such label, but no 
other extraneous matter will be permitted thereon without the approval 
of the Director. The word ``pure'', qualifying denatured alcohol, will 
not be permitted to appear on the label or the container.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50 
FR 9162, Mar. 6, 1985]



Sec. 19.605  Additional marks on portable containers.

    (a) In addition to the other marks required by this part, portable 
containers (other than bottles enclosed in cases) of spirits or 
denatured spirits to be withdrawn from the bonded premises:
    (1) Without payment of tax, for export, transfer to customs 
manufacturing bonded warehouses, transfer to foreign-trade zones or 
supplies for certain vessels and aircraft, shall be marked as provided 
in 27 CFR part 252; or
    (2) Tax-free alcohol shall be marked with the word ``Tax-Free.''
    (b) The proprietor may show other information such as brand or trade 
name; caution notices and other material required by Federal, State, or 
local law or regulations; wine or proof gallons; and plant control data. 
However, marks or attachments shall not conceal, obscure, interfere with 
or conflict with the markings required by this subpart.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))



Sec. 19.606  Marks on bulk conveyances.

    (a) The proprietor shall securely attach to the route board, or 
other suitable device, of each bulk conveyance used to transport spirits 
or denatured spirits, a label to identify each conveyance or compartment 
as follows:
    (1) Name, plant number, and location of the consignor;
    (2) Name, plant number, permit number, or registry number (as 
applicable), and location of the consignee;
    (3) Date of shipment;
    (4) Quantity (proof gallons for spirits, wine gallons for denatured 
spirits); and
    (5) Formula number for denatured spirits.
    (b) The provisions of paragraph (a) of this section shall not apply 
when the conveyance is accompanied by documentation which contains the 
information required by paragraph (a) of this section.
    (c) In addition, export shipments shall conform to the requirements 
of 27 CFR part 252.
    (d) Bulk conveyances used to transport articles or wine shall 
conform to the requirements of part 20 or 240 of this chapter, as 
applicable.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50 
FR 9162, Mar. 6, 1985]



Sec. 19.607  Marks on cases.

    (a) Mandatory marks. Except for cases marked as provided in 
Sec. 19.608, the following information shall be plainly marked on each 
case of spirits filled in processing:
    (1) Serial number;
    (2) Kind of spirits;
    (3) Plant number where bottled;
    (4) Date filled;
    (5) Proof; and
    (6) Liters or proof gallons.

Cases removed for export, transfer to customs bonded warehouses or 
customs manufacturing bonded warehouses, transfer to foreign-trade 
zones, or for use as supplies on certain vessels and aircraft, shall 
bear the additional marks required by 27 CFR part 252.

[[Page 379]]

    (b) Other marks. In addition to the required marks on cases filled 
in processing, the proprietor may include other marks such as;
    (1) Name or trade name, and location of desired, of the bottler, and 
in conjunction therewith the word ``Bottler'';
    (2) For products actually distilled or processed by the proprietor, 
his name or trade name, and location, if desired, and in conjunction 
therewith the words ``Distiller'' or ``Processor'' as applicable;
    (3) For products actually imported and bottled by the proprietor, 
the words ``Imported and Bottled By'', followed by his name or trade 
name, and location if desired;
    (4) For products bottled for a dealer, the words ``Bottled For'', 
followed by the name of such dealer;
    (5) Other material required by Federal or State law and regulations; 
or
    (6) Labels or data describing the contents for commercial 
identification or accounting purposes, or indicating payment of State or 
local taxes.


The marks authorized by this paragraph shall not interfere with or 
detract from the mandatory marks prescribed in paragraph (a) of this 
section.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206); 
sec. 3(a), Pub. L. 91-659, 84 Stat. 1965, as amended (26 U.S.C. 5066))



Sec. 19.608  Cases of industrial alcohol.

    (a) Mandatory marks. Each case, including encased containers, of 
alcohol bottled for industrial use in accordance with subpart M of this 
part shall be marked as applicable, to show--
    (1) ``Alcohol'';
    (2) Serial number or lot identification number;
    (3) Plant number;
    (4) Proof;
    (5) Proof gallons;
    (6) ``Tax-Free''; and
    (7) Information required by 27 CFR part 252, for cases withdrawn for 
export, transferred to customs bonded warehouses, transferred to 
foreign-trade zones, or supplies for certain vessels and aircraft.
    (b) Other marks. Cases may be marked with other marks which do not 
interfere with or detract from mandatory case marks in the manner 
permitted by Sec. 19.607.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended, 1369, as amended 
(26 U.S.C. 5206, 5235))



Sec. 19.609  [Reserved]



Sec. 19.610  Obliteration of marks.

    Except as provided in Sec. 19.597(b), the marks required by this 
part to be placed on any container or case shall not be destroyed or 
altered before the container or case is emptied.

(Sec. 454, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 5206))

[T.D. ATF-206, 50 FR 23952, June 7, 1985]



Sec. 19.611  Relabeling and reclosing off bonded premises.

    The proprietor of a distilled spirits plant may relabel, affix brand 
labels, or reclose bottled taxpaid spirits on wholesale liquor dealer 
premises or at a taxpaid storeroom on, contiguous to, adjacent to, or in 
the immediate vicinity of the plant, if such wholesale liquor dealer 
premises or taxpaid storeroom is operated in connection with the plant. 
If products which are relabeled under this section were originally 
bottled by another proprietor, the relabeling proprietor shall have on 
file a statement from the original bottler consenting to the relabeling.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

[T.D. ATF-206, 50 FR 23952, June 7, 1985]



Sec. 19.612  Authorized abbreviations to identify marks.

    In addition to the abbreviations and symbols which are authorized in 
this part for use in marking containers, the following abbreviations may 
be used to identify certain marks:

------------------------------------------------------------------------
                    Mark                             Abbreviation
------------------------------------------------------------------------
Completely Denatured Alcohol...............  CDA
Distilled Spirits Stamps...................  DSS
Gallon or Wine Gallon......................  WG
Gross Weight...............................  G
Proof......................................  P
Specially Denatured:
    Alcohol................................  SDA
    Rum....................................  SDR
Tare.......................................  T
Tax Determined.............................  TD
Wine Spirits Addition......................  WSA
------------------------------------------------------------------------


[[Page 380]]


(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]



             Subpart S--Liquor Bottle and Label Requirements



Sec. 19.631  Scope of subpart.

    The provisions of Secs. 19.632 through 19.639 of this subpart shall 
apply only to liquor bottles having a capacity of 200 ml or more except 
where expressly applied to liquor bottles of less than 200 ml capacity. 
The provisions of Secs. 19.641 through 19.650 of this subpart shall 
apply to all liquor bottles, regardless of size.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended, 1374, as amended 
(26 U.S.C. 5206, 5301))

                       Liquor Bottle Requirements



Sec. 19.632  Bottles authorized.

    Liquor bottles for domestic use shall conform to the applicable 
standards of fill provided in subpart E of 27 CFR part 5, including 
those for liquor bottles of less than 200 ml capacity. The use of any 
bottle size other than as authorized in subpart E of 27 CFR part 5 is 
prohibited for the bottling of nonindustrial distilled spirits for 
domestic purposes.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))



Sec. 19.633  Distinctive liquor bottles.

    (a) Application. A proprietor desiring approval of domestic liquor 
bottles of distinctive shape or design, including bottles of less than 
200 ml capacity, or, to use such distinctive liquor bottles, shall 
submit ATF Form 5100.31 to the Director for approval. The applicant 
shall certify as to the total capacity of a representative sample bottle 
before closure (expressed in milliliters) on each copy of the form. In 
addition, the applicant shall affix a readily legible photograph (both 
front and back of the bottle) to the front of each copy of ATF Form 
5100.31, along with the label(s) to be used on the bottle. The applicant 
shall not submit an actual bottle or an authentic model unless 
specifically requested to do so.
    (b) Approval. Properly submitted ATF Forms 5100.31 for approval of 
distinctive liquor bottles shall be approved by the Director if the 
bottles are found to--
    (1) Meet the requirements of 27 CFR part 5;
    (2) Be distinctive;
    (3) Be suitable for their intended purpose;
    (4) Not jeopardize the revenue; and
    (5) Not be deceptive to the consumer.

The applicant shall keep a copy of the approved ATF Form 5100.31, 
including an approved photograph (both front and back) of the 
distinctive liquor bottle, on file at his premises. If ATF Form 5100.31 
is disapproved, the applicant shall be notified of the Director's 
decision and the reasons therefor.
    (c) Cross reference. For procedures regarding issuance, denial and 
revocation of distinctive liquor bottle approvals, as well as appeal 
procedures, see part 13 of this chapter.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-242, 51 
FR 39525, Oct. 29, 1986; T.D. ATF-406, 64 FR 2134, Jan. 13, 1999]



Sec. 19.634  Receipt and storage of liquor bottles.

    No proprietor shall accept shipment or delivery of liquor bottles 
except from the manufacturer thereof, a supplier abroad, or another 
proprietor. However, the regional director (compliance) may, pursuant to 
letterhead application, authorize a proprietor to receive and reuse 
liquor bottles assembled for such proprietor as provided in 27 CFR 
194.263. Liquor bottles, including those of less than 200 ml capacity, 
shall be stored in a safe and secure place, either on the proprietor's 
qualified premises or at another location.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))



Sec. 19.635  Bottles to be used for display purposes.

    Liquor bottles may be furnished to liquor dealers for display 
purposes, provided that each bottle is marked to show that it is to be 
used for such purpose. The disposition of such bottles,

[[Page 381]]

showing names and addresses of consignees, dates of shipment, and size, 
quantity, and description of bottles, shall be included in the records 
required under Sec. 19.747.

(Approved by the Office of Management and Budget under control number 
1512-0198)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))

[T.D. ATF-206, 50 FR 23952, June 7, 1985]



Sec. 19.636  Bottles for testing purposes.

    Proprietors may ship liquor bottles to persons for testing. The 
disposition of such bottles, showing the name and address of the person 
to whom the bottles are shipped, date of shipment, and the size and 
number of bottles shipped, shall be included in the records required 
under Sec. 19.747.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))



Sec. 19.637  Bottles not consitituting approved containers.

    The Director shall disapprove for use as a liquor bottle any bottle, 
including a bottle of less than 200 ml capacity, which he determines to 
be deceptive. Any such bottle is not an approved container for the 
purposes of Sec. 19.581 of this part, and shall not be used for 
packaging distilled spirits for domestic purposes.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))



Sec. 19.638  Disposition of stocks of liquor bottles.

    When a proprietor discontinues operations, or permanently 
discontinues the use of a particular size or type of liquor bottle, the 
stocks of such bottles on hand shall either be disposed of to another 
person authorized to receive liquor bottles, or destroyed, including 
disposition for purposes which will render them unusable as bottles. 
However, on approval of a written application by the regional director 
(compliance) of the region in which the proprietor's plant is located, 
liquor bottles may be otherwise disposed of.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))



Sec. 19.639  Use and resale of liquor bottles.

    No proprietor shall use any liquor bottle except for packaging 
distilled spirits, or dispose of any empty liquor bottle except to 
another person authorized to receive liquor bottles or as provided in 
Sec. 19.638. Bottles may be furnished to others for display and testing 
purposes as provided in Secs. 19.635 and 19.636, respectively.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))

                        Bottle Label Requirements



Sec. 19.641  Certificate of label approval or exemption.

    (a) Requirement. Proprietors are required by 27 CFR part 5 to obtain 
approval of labels, or exemption from label approval, for any label to 
be used on bottles of spirits for domestic use and shall exhibit 
evidence of label approval, or of exemption from label approval, on 
request of an ATF officer.
    (b) Cross reference. For procedures regarding the issuance, denial 
and revocation of certificates of label approval and certificates of 
exemption from label approval, as well as appeal procedures, see Part 13 
of this chapter.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

[T.D. ATF-406, 64 FR 2134, Jan. 13, 1999]



Sec. 19.642  Statements required on labels under an exemption from label approval.

    All labels to be used on bottles of spirits for domestic use under 
an exemption from label approval shall contain the applicable 
information required in Secs. 19.643 through 19.650. Where a statement 
of age or age and percentage is required, it shall have the meaning 
given, and be stated in the manner provided in 27 CFR part 5.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.643  Brand name, kind, alcohol content, and State of distillation.

    (a) Brand name and kind. The label of distilled spirits shall state 
the brand name and kind, as set out in 27 CFR part 5.

[[Page 382]]

    (b) Alcohol content--(1) Mandatory statement. The label of distilled 
spirits shall state the alcohol content in percent-alcohol-by-volume. 
Products such as ``Rock and Rye'' or similar products containing a 
significant amount of solid material shall state the alcohol content at 
the time of bottling as follows: ``Bottled at ------ percent-alcohol-by-
volume.''
    (2) Optional statement. In addition, the label may also state the 
alcohol content in degrees of proof if this information appears in 
direct conjunction (i.e. with no intervening material) with the 
statement expressed in percent-alcohol-by-volume. If both forms of 
alcohol content are shown, the optional statement in degrees of proof 
shall be placed in parentheses, in brackets, or otherwise distinguished 
from the mandatory statement in percent-alcohol-by-volume to emphasize 
the fact that both expressions of alcohol content mean the same thing.
    (c) State of distillation--(1) Mandatory statement. If a whisky 
produced in the United States was not produced in the State shown on the 
label, the label shall show the State of distillation, except as 
provided by paragraph (c)(2) or (c)(3) of this section. The Director 
may, however, require the State of distillation to be shown on the label 
or permit such other. labeling as may be necessary to preclude any 
misleading or deceptive impression which might otherwise be created as 
to the actual State of distillation.
    (2) Exceptions. The State of distillation is not required to be 
shown on labels of ``blended whisky'', ``a blend of straight whiskies'', 
``spirit whisky'', ``light whisky'', or ``blended light whisky''. The 
State of distillation may be prohibited on certain labels of ``light 
whisky'' or ``blended light whisky'', in accordance with paragraph 
(c)(3) of this section.
    (3) Prohibited statement. The State of distillation may not be 
shown, except as part of the name and address required by 27 CFR 
5.36(a), on labels of ``light whisky'' or ``blended light whisky'' 
produced in a State which the Director finds to be associated by 
consumers with an American type whisky.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201)



Sec. 19.644  Net contents.

    The net contents of liquor bottles shall be shown on the label, 
unless the statement of the net contents is permanently marked on the 
side, front, or back of the bottle.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as ameded (26 U.S.C. 5201))



Sec. 19.645  Name and address of bottler.

    There shall be stated on the label of distilled spirits the phrase 
``Bottled by'', ``packed by'', or ``Filled by'' immediately followed by 
the name (or trade name) of the bottler and the place where such spirits 
are bottled. If the bottler is the actual bona fide operator of more 
than one distilled spirits plant engaged in bottling operations, there 
may, in addition, be stated immediately following the name (or trade 
name) of such bottler the addresses of such other plants. However:
    (a) Where distilled spirits are bottled by or for the distiller 
thereof, there may be stated, in lieu of the phrase ``Bottled by'', 
``Packed by'', or ``Filled by'', followed by the bottler's name (or 
trade name) and address, the phrase ``Distilled by'', followed by the 
name (or trade name) under which the particular spirits were distilled, 
or any trade name shown on the distiller's permit (covering the premises 
where the particular spirits were distilled), and the address (or 
addresses) of the distiller;
    (b) Where ``straight whiskies'' of the same type which have been 
produced in the same State by two or more different distillers are 
combined (either at time of bottling or at a warehouseman's bonded 
premises for further storage) and subsequently bottled and labeled as 
``straight whisky,'' such ``straight whisky'' shall be labeled in 
accordance with the requirements of the first paragraph of this section. 
Where such ``straight whisky'' is bottled by or for the distillers 
thereof, there may be stated on the label, in lieu of the requirements 
of the first paragraph of this section, the phrase ``distilled by,'' 
followed by the names (or trade names) of the different distillers who 
distilled a portion of the ``straight whisky,'' the addresses of the

[[Page 383]]

distilleries where the ``straight whisky'' was distilled, and the 
percentage of ``straight whisky'' distilled by each distiller (with a 
tolerance of plus or minus 2 percent). In the case where ``straight 
whisky'' is made up of a mixture of ``straight whiskies'' of the same 
type from two or more different distilleries of the same proprietor 
located within the same State, and where the ``straight whisky'' is 
bottled by or for the proprietor thereof, such ``straight whisky'' may 
be labeled, in lieu of the requirements of the first paragraph of this 
section, with the phrase ``distilled by'' followed by the name (or trade 
name) of the proprietor and the addresses of the different distilleries 
which distilled a portion of the ``straight whisky.''
    (c) Where distilled spirits are bottled by or for the proprietor of 
a distilled spirits plant, there may be stated, in lieu of the phrase 
``Bottled by'', ``Packed by'', or ``Filled by'', followed by the 
bottler's name (or trade name) and address, the phrase ``Blended by'', 
``Made by'', ``Prepared by'', ``Manufactured by'', or ``Produced by'' 
(whichever may be appropriate to the process involved), followed by the 
name (or trade name) and the address (or addresses) of the distilled 
spirits plant proprietor;
    (d) On labels of distilled spirits bottled for a retailer or other 
person who is not the actual distilled spirits plant proprietor of such 
distilled spirits, there may also be stated the name and address of such 
retailer or other person, immediately preceded by the words ``Bottled 
for'', or ``Distributed by'', or other similar statement; and
    (e) The label may state the address of the proprietor's principal 
place of business in lieu of the place where the bottling, distilling or 
processing operation occurred, if the address where the operation 
occurred is indicated by printing, coding, or other markings, on the 
label or on the bottle. The coding system employed will permit an ATF 
officer to determine where the operation stated on the label occurred. 
Prior to using a coding system, the distilled spirits plant proprietor 
shall send a notice explaining the coding system to the regional 
director (compliance) of each region where a label code is used.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-259, 52 
FR 41423, Oct. 28, 1987; T.D. ATF-260, 52 FR 42101, Nov. 3, 1987]



Sec. 19.646  Age of whisky containing no neutral spirits.

    In the case of whisky containing no neutral spirits, statements of 
age and percentage shall be stated on the label as provided in 27 CFR 
part 5.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.647  Age of whisky containing neutral spirits.

    In the case of whisky containing neutral spirits, the age of the 
whisky or whiskies and the respective percentage by volume of whisky or 
whiskies and neutral spirits, shall be stated on the label as provided 
in part 5 of this chapter.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.648  Age of brandy.

    If brandy is aged for a period of less than two years, the age 
thereof shall be shown on the label.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.649  Presence of neutral spirits and coloring, flavoring, and blending materials.

    The presence of neutral spirits or coloring, flavoring, or blending 
materials shall be stated on labels in the manner provided in 27 CFR 
part 5.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.650  Country of origin.

    On labels of imported distilled spirits there shall be stated the 
country of origin in substantially the following form: ``Product of ----
------------,'' the blank to be filled in with the name of the country 
or origin.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

[[Page 384]]



                           Subpart T--Closures

    Source: T.D. ATF-206, 50 FR 23952, June 7, 1985.



Sec. 19.661  General.

    Each bottle or other container of spirits having a capacity of one 
gallon (3.785 liters) or less shall bear a closure or other device 
affixed in accordance with Sec. 19.662. The closure or other device 
shall be affixed to the container prior to withdrawal from bond or 
customs custody.

(Approved by the Office of Management and Budget under control number 
1512-0461)

(Sec. 454, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 5301))



Sec. 19.662  Affixing closures.

    Closures or other devices on containers having a capacity of one 
gallon (3.785 liters) or less shall be securely affixed to the 
containers so as to leave a portion remaining on the container when the 
container is opened. In addition, the closures or other devices shall be 
constructed in such a manner as to require that they be broken to gain 
access to the contents of the containers.

(Sec. 454, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 5301))



Sec. 19.663  Reclosing.

    Bottles of distilled spirits filled on bonded premises may be 
reclosed under the provisions of subpart M of this part. Bottles of 
distilled spirits to which closures or other devices have been affixed 
may also be reclosed under the provisions of Sec. 19.611.

(Sec. 454, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 5215))



     Subpart U--Return of Spirits to Bonded Premises and Voluntary 
                               Destruction

                                 Returns



Sec. 19.681  Return of taxpaid spirits to bonded premises.

    (a) General. This section and Sec. 19.682 pertain only to taxpaid 
spirits returned to bonded premises under 26 U.S.C. 5215(a). The return 
of taxpaid bottled spirits to bonded premises solely for relabeling or 
reclosing is covered in Sec. 19.393.
    (b) Return. Distilled spirits on which the tax has been paid or 
determined may only be returned to the bonded premises of a distilled 
spirits plant under this section for:
    (1) Destruction, in accordance with Sec. 19.691;
    (2) Denaturation, in accordance with subpart N;
    (3) Redistillation, in accordance with subpart K;
    (4) Reconditioning; or
    (5) Rebottling.
    (c) Claims. Claims for credit or refund of tax on spirits returned 
to bonded premises shall be filed as provided in, and accompanied by the 
information prescribed by, Sec. 19.42.
    (d) Applicability of 26 U.S.C. Chapter 51. All provisions of 26 
U.S.C. Chapter 51 and this part, applicable to spirits in ATF bond, 
shall be applicable to spirits when returned to bonded premises under 
this section. The provisions of this subpart do not apply to taxpaid 
bottled spirits returned to bond solely for relabeling or reclosing and 
under the provisions of subpart M of this part.

(Sec. 807, Pub. L. 96-39, 93 Stat. 285 (26 U.S.C. 5215))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50 
FR 23952, June 7, 1985]



Sec. 19.682  Receipt and gauge of returned taxpaid spirits.

    (a) Dump. Unless returned in the sealed metal drums in which they 
were withdrawn, spirits returned to bonded premises shall be immediately 
dumped.
    (b) Gauge. Spirits returned under Sec. 19.681 shall be gauged upon 
receipt on bonded premises. Such gauge may be established on the basis 
of case markings and label information, as provided in Sec. 19.91.
    (c) Supporting documents. (1) Proprietors must have on file at the 
plant where spirits are returned to bond such documentation as is 
necessary to establish the amount of tax for which a claim for credit or 
refund may be allowed. Proprietors shall maintain credit memoranda or 
comparable financial records evidencing the return of each lot of 
spirits.

[[Page 385]]

    (2) If the spirits contain eligible wine or eligible flavors, the 
proprietor shall also have on file a copy of the record of tax 
determination prescribed by Sec. 19.761, or other documentation which 
establishes the amount of tax for which a claim for credit or refund may 
be allowed. In lieu of establishing the actual effective tax rate of a 
product, the proprietor may claim refund or credit based on the lowest 
effective tax rate applied to the product.

(Sec. 807, Pub. L. 96-39, 93 Stat. 285 (26 U.S.C. 5215); Sec. 807, Pub. 
L. 96-39, 93 Stat. 284 (26 U.S.C. 5207); Sec. 201, Pub. L. 85-859, 72 
Stat. 1356, as amended (26 U.S.C. 5201); Sec. 6, Pub. L. 96-598, 94 
Stat. 3488, as amended (26 U.S.C. 5010))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-297, 55 
FR 18064, Apr. 30, 1990]



Sec. 19.683  Return of recovered denatured spirits and recovered articles.

    Recovered denatured spirits and recovered articles may be returned 
for restoration or redenaturation to the bonded premises of any plant 
authorized to denature spirits, in accordance with the provisions of 27 
CFR part 20. If restoration requires redistillation, the recovered 
denatured spirits or recovered articles may be returned for that purpose 
to bonded premises of a plant authorized to produce or process spirits. 
Recovered denatured spirits or recovered articles shall be gauged on 
receipt.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1363, as amended, 1372, as amended 
(26 U.S.C. 5223, 5273))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50 
FR 9162, Mar. 6, 1985]



Sec. 19.684  Articles and spirits residues received for redistillation.

    Articles manufactured under 27 CFR part 20, and spirits residues of 
manufacturing processes related thereto, may be received on the bonded 
premises of a distilled spirits plant authorized to produce or process 
distilled spirits, for the recovery by redistillation of the distilled 
spirits contained in those materials. The proprietor shall gauge the 
materials when received.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1365, as amended (26 U.S.C. 5223))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50 
FR 9162, Mar. 6, 1985]



Sec. 19.685  Return of recovered tax-free spirits, and spirits and denatured spirits withdrawn free of tax.

    (a) General. Specially denatured spirits withdrawn free of tax under 
the applicable provisions of 27 CFR part 252 for exportation or for 
deposit in a foreign-trade zone, and spirits or denatured spirits 
withdrawn free of tax under the applicable provisions of 27 CFR part 20 
or 22, may be returned: (1) To bonded premises of any distilled spirits 
plant authorized to produce or process distilled spirits, for 
redistillation; or (2) To any bonded premises of a distilled spirits 
plant pending subsequent lawful withdrawal free of tax. Recovered tax-
free spirits may, as provided in 27 CFR part 22, be returned for 
redistillation to bonded premises of any distilled spirits plant 
authorized to produce or process distilled spirits or to any bonded 
premises of a distilled spirits plant for restoration (not including 
redistillation). The return shall be made under the applicable 
provisions of this part and 27 CFR part 20, 22, or 252, as appropriate.
    (b) Bonding requirements. Before spirits or denatured spirits are 
returned to bonded premises, except spirits or denatured spirits 
returned for redistillation, the proprietor shall file a consent of 
surety on Form 1533 to extend the terms of the operations or unit bond 
to cover the return of the spirits. The proprietor may file one consent 
of surety on the bond to extend the terms thereof to cover all spirits 
which may be returned.
    (c) Procedure. When recovered tax-free spirits, spirits, or 
denatured spirits are received, they shall be gauged. When containers of 
spirits removed for export are returned to bond, pending subsequent 
removal for a purpose other

[[Page 386]]

than export, the export marks shall be obliterated.

(Sec. 3, Act of June 13, 1934, 48 Stat. 999, as amended (19 U.S.C. 81c); 
sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended, 1365, as amended 
(26 U.S.C. 5001, 5223))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-199, 50 
FR 9162, Mar. 6, 1985]



Sec. 19.686  Return of spirits withdrawn without payment of tax.

    (a) Spirits withdrawn for export. Spirits lawfully withdrawn without 
payment of tax under the provisions of 27 CFR part 252 for exportation, 
or for transfer to a customs bonded warehouse or a customs manufacturing 
bonded warehouse, or for deposit in a foreign-trade zone, or for use on 
vessels and aircraft, and not so exported, transferred, deposited, or 
used (or laden for use) on a vessel or aircraft, may be returned, under 
the applicable provisions of this part and 27 CFR part 252: (1) To the 
bonded premises of any plant authorized to produce or process distilled 
spirits, for redistillation; or (2) To the bonded premises from which 
withdrawn pending subsequent removal for a lawful purpose.
    (b) Spirits withdrawn for use in wine production. Wine spirits 
withdrawn under Sec. 19.532 for use in wine production, and not so used, 
may be returned to the bonded premises of a distilled spirits plant. The 
consignee proprietor shall obtain approval, as provided in Sec. 19.506. 
The wine spirits shall be removed from the winery in accordance with the 
provisions of 27 CFR part 240.
    (c) Spirits withdrawn for research, development, or testing. Spirits 
withdrawn without payment of tax, under the provisions of subpart V of 
this part, for research, development, or testing may be returned to the 
bonded premises of the distilled spirits plant from which withdrawn. 
After returning these spirits to bonded premises, they shall be 
destroyed, returned to containers, or returned to vessels in the 
distilling system containing similar spirits.
    (d) Procedure. When spirits are received, they shall be gauged by 
the proprietor. When spirits which were removed for exportation are 
returned to bonded premises pending subsequent removal for a purpose 
other than exportation, all export marks on the containers in which the 
spirits are returned shall be obliterated.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1365, as amended, 
1382, as amended (26 U.S.C. 5214, 5223, 5373); sec. 3, Pub. L. 91-659, 
84 Stat. 1965, as amended (26 U.S.C. 5066))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50 
FR 23952, June 7, 1985]



Sec. 19.687  Return of spirits withdrawn for export with benefit of drawback.

    Subject to the provisions of 27 CFR 252.197 through 252.199, whole 
or partial shipments of spirits withdrawn for export with benefit of 
drawback may be returned to: (a) The bonded premises of the distilled 
spirits plant, pursuant to Sec. 19.681, or (b) to a wholesale liquor 
dealer or taxpaid storeroom. Claims filed by proprietors on ATF Form 
5110.30 which include the returned spirits shall be reduced by the 
amount of tax paid or determined on the returned spirits.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended (26 U.S.C. 5062); 
sec. 807, Pub. L. 96-39, 93 Stat. 285 (26 U.S.C. 5215))



Sec. 19.688  Abandoned spirits.

    Spirits abandoned to the United States may be sold, without payment 
of the tax, to a proprietor of a plant for denaturation or for 
redistillation and denaturation, if the plant is authorized to denature 
or redistill and denature spirits. These spirits shall be kept apart 
from all other spirits or denatured spirits until denatured. The receipt 
and gauging provisions of Sec. 19.683 are applicable to these spirits.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5243))

                          Voluntary Destruction



Sec. 19.691  Voluntary destruction.

    (a) General. Spirits, denatured spirits, articles, or wines in bond 
may be voluntarily destroyed as provided in this section. The tax 
liability on spirits, denatured spirits, articles, or wines so destroyed 
is extinguished.
    (b) Wine notice. Wine may be destroyed in bond only after the 
proprietor has filed notice with the regional director (compliance) 
stating the kind

[[Page 387]]

and quantity of wine to be destroyed and the date and manner in which 
the wine is to be destroyed. The wine may be destroyed after such notice 
has been filed.
    (c) Gauging. A proprietor shall gauge spirits, denatured spirits, 
articles, or wines to be destroyed. Gauges of spirits in bottles may be 
established on the basis of legible case markings and label information 
when:
    (1) The bottles are full;
    (2) There is no evidence that the bottles have been tampered with.
    (d) Off bonded premises. Spirits, denatured spirits, articles or 
wines may be removed and destroyed at a location off bonded premises if 
the proprietor has filed a consent of surety to cover such removal. If 
the destruction is accomplished off plant premises, the proprietor shall 
ensure compliance with applicable Federal, State, and local 
environmental laws and regulations.
    (e) Record of destruction. The proprietor shall record the 
destruction of spirits, denatured spirits, articles, or wines as 
provided in Sec. 19.767.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended, 1381, as amended 
(26 U.S.C. 5008, 5370))



                      Subpart V--Samples of Spirits



Sec. 19.701  Spirits withdrawn from bonded premises.

    (a) Samples withdrawn from bonded premises. The proprietor may 
withdraw spirits without payment of tax, or wine spirits or brandy free 
of tax, to the proprietor's laboratory, the laboratory of an affiliated 
or subsidiary corporation, or, if approved by the regional director 
(compliance), to a recognized commercial laboratory for testing or 
analysis (other than consumer testing or other market analysis) to 
determine the quality or character of the finished product. The quantity 
of spirits so withdrawn shall not exceed the amount necessary for 
conduct of the proprietor's operations.
    (b) Customer samples. A quantity of spirits not exceeding 1 liter 
may be furnished to a prospective purchaser for quality testing (other 
than consumer testing or other market analysis) only if a bona fide 
written or oral purchase agreement exists which is contingent upon 
quality approval by the prospective purchaser; except that a sample not 
to exceed 1 liter may be furnished to a prospective customer for quality 
testing in anticipation of a purchase agreement if the customer is 
authorized to receive bulk spirits for industrial use.
    (c) Research or development. Spirits may be withdrawn without 
payment of tax for research, development, or testing (other than 
consumer testing or other market analysis) of processes, systems, 
materials or equipment relating to distilled spirits or distilled 
spirits plant operations. The amount withdrawn shall be limited to an 
amount necessary for conduct of the testing, research or development. If 
the testing, research or development is to be conducted by other than 
the proprietor, the proprietor shall secure a written statement, 
executed by the consignee, agreeing that he will maintain records of the 
receipt, use, and disposition of all spirits received by him and that 
those records and operations will be available during regular business 
hours for inspection by ATF officers.
    (d) Conditions. (1) Records will be maintained in accordance with 
Sec. 19.766 of all spirits taken or withdrawn under the provisions of 
this section.
    (2) Remnants or residues of spirits withdrawn but not used during 
testing, research or development shall be destroyed or returned to the 
bonded premises for storage with similar products or entry in the 
continuous distilling system.
    (e) Limitation. The regional director (compliance) shall proceed to 
collect the tax on any spirits withdrawn under this section which are 
found to have been withdrawn, used or disposed of in a manner not 
authorized by this section.
    (f) Losses. When spirits are lost prior to being used for the 
authorized purpose, the proprietor shall either pay the tax or file a 
claim for remission of tax as prescribed by Sec. 19.41.

(Sec. 201, Pub. L. 86-859, 72 Stat. 1362, as amended, 1382, as amended 
(26 U.S.C. 5214, 5173))

[[Page 388]]



Sec. 19.702  Samples used on bonded premises.

    The proprietor may take samples of spirits for research, 
development, testing, or laboratory analysis conducted in a laboratory 
located on the bonded premises of the distilled spirits plant. The 
applicable purposes, conditions and limitations for samples taken 
pursuant to Sec. 19.701 shall also apply to samples taken as authorized 
by this section.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1382, as amended 
(26 U.S.C. 5008))



Sec. 19.703  Taxpayment of samples.

    When tax is required to be paid on samples:
    (a) If the proprietor is qualified to defer payment of tax, the tax 
shall be included in the proprietor's semimonthly tax return on Form 
5000.24.
    (b) If the proprietor is not qualified to defer the payment of tax, 
the tax shall be paid on a prepayment tax return on Form 5000.24.

[T.D. ATF-219, 50 FR 51388, Dec. 17, 1985]



Sec. 19.704  Labels.

    (a) On each container of spirits to be withdrawn under the 
provisions of Sec. 19.701, the proprietor shall affix a label showing 
the following information:
    (1) Purpose for which withdrawn;
    (2) Kind of spirits;
    (3) Size and the proof of the sample, if known;
    (4) If the spirits are removed to other then adjacent or contiguous 
premises of the proprietor, the name and address of the consignee;
    (5) The proprietor's name, and plant number; and
    (6) The date taken.
    (b) The labeling required by paragraph (a) of this section is not 
necessary when sample containers bear an approved label pursuant to 27 
CFR Part 5 and subpart S of this part and the sample is removed from 
bonded premises to the general premises of the same distilled spirits 
plant.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended, 1362, as amended, 
1382, as amended (26 U.S.C. 5206, 5214, 5373))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50 
FR 23952, June 7, 1985]



                     Subpart W--Records and Reports

                                 General



Sec. 19.721  Records.

    (a) In General. (1) The records to be maintained by proprietors 
shall include:
    (i) All individual transaction forms, records, and summaries 
specifically required by this part;
    (ii) All supplemental, auxiliary, and source data utilized in the 
compilation of required forms, records, and summaries, and for 
preparation of reports, returns, and claims; and
    (iii) Copies of notices, reports, returns, and approved applications 
and other documents relating to operations and transactions.
    (2) The records required by this part may consist of the 
proprietor's commercial documents, rather than records prepared 
expressly to meet the requirements of this part, if such documents 
contain all the details required by this part to be recorded, are 
consistent with the general requirements of clarity and accuracy, and do 
not result in difficulty in their examination.
    (b) Accounts. The records required by this part to be maintained by 
proprietors shall be arranged into three primary operational accounts:
    (1) Production,
    (2) Storage, and
    (3) Processing.

Records shall indicate receipts, movements between accounts, transfers 
in bond, or withdrawals of spirits, denatured spirits, articles, or 
wines.
    (c) Exceptions. The term ``records'' as used in this subpart does 
not include copies of qualifying documents required under subpart G, or 
of bonds required under Subpart H of this part.

[[Page 389]]

    (d) Special provisions. See 27 CFR 70.22 for information with 
respect to ATF examination of financial records and books of account.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))



Sec. 19.722  Conversion between metric and U.S. units.

    When liters are converted to wine gallons, the quantity in liters 
shall be multiplied by 0.264172 to determine the equivalent quantity in 
wine gallons. Cases containing the same quantity of spirits of the same 
proof in metric bottles may be converted to U.S. units by multiplying 
the liters in one case by the number of cases to be converted, as 
follows: (a) If the conversion from liters to U.S. units is made before 
multiplying by the number of cases, the quantity in U.S. units shall be 
rounded to the sixth decimal; or (b) If the conversion is made after 
multiplying by the number of cases, the quantity in U.S. units shall be 
rounded to the nearest hundredth. Once converted to wine gallons, the 
proof gallons of spirits in cases shall be determined as provided in 27 
CFR 30.52.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.723  Maintenance and preservation of records.

    (a) Place of maintenance. Records required by this part shall be 
prepared and kept by the proprietor at the plant where the operation or 
transaction occurs and shall be available for inspection by any ATF 
officer during business hours.
    (b) Reproduction of original records. (1) Whenever any record, 
because of its condition, becomes unsuitable for its intended or 
continued use, the proprietor shall reproduce such record, by a process 
approved by the regional director (compliance) under Sec. 19.725 for 
reproducing records, and such reproduction shall be treated and 
considered for all purposes as though it were the original record.
    (2) All provisions of law applicable to the original record shall be 
applicable to such reproductions.
    (c) Retention of records. (1) Records required by this part shall be 
preserved for a period of not less than three years from the date 
thereof or the date of the last entry required to be made thereon, 
whichever is later. However, the regional director (compliance) may 
require records to be kept for an additional period not exceeding three 
years in any case where such retention is deemed necessary or advisable 
for the protection of the revenue.
    (2) The period for retention of records prescribed in paragraph 
(c)(1) of this section shall not apply to copies of outstanding approved 
formulas or to copies of formulas which form the basis for claims for 
credit or refund of taxes on spirits returned to bonded premises. A copy 
of any such formula shall be kept by the proprietor at the plant where 
spirits are processed subject to the formula or at the plant where such 
spirits are received.
    (d) Data processing. (1) Notwithstanding any other provision of this 
section, record data maintained on data processing equipment may be kept 
at a location other than the plant premises if the original transaction 
(source) records required by Secs. 19.736-19.779 are kept available for 
inspection at the plant premises.
    (2) Data which has been accumulated on cards, tapes, discs, or other 
accepted record media must be retrievable within five business days.
    (3) The applicable data processing program shall be made available 
for examination if requested by an ATF officer.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))



Sec. 19.724  Modified forms.

    (a) Application. Proprietors desiring to modify prescribed forms 
shall submit an application to the Director, through the regional 
director (compliance). The application shall be accompanied by:
    (1) A copy of each proposed form with typical entries; and
    (2) A statement showing the need for use of the modified forms. 
Modified forms shall not be used until approved by the Director.
    (b) Restrictions. The use of modified forms shall not relieve a 
proprietor from any requirement of this part. The Director may require a 
proprietor to immediately discontinue the use of any

[[Page 390]]

modified form when such use is found to pose administrative problems.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))



Sec. 19.725  Photographic copies of records.

    (a) Application. Proprietors who desire to record, copy or reproduce 
records, required by this part, by any process which accurately 
reproduces or forms a durable medium for so reproducing the original of 
such records, shall apply to the regional director (compliance) for 
permission to do so, describing:
    (1) The records to be reproduced,
    (2) The reproduction process to be employed,
    (3) The manner in which the reproductions are to be preserved, and
    (4) The provisions to be made for examining, viewing, and using such 
reproductions.
    (b) Approval. The regional director (compliance) shall not approve 
any application unless the manner of preservation of the reproductions 
and the provisions for examining, viewing, and using such reproductions 
are satisfactory.
    (c) Conditions. Whenever records are reproduced under this section, 
the reproduced records shall be preserved in conveniently accessible 
files, and provisions shall be made for examining, viewing, and using 
the reproduced record the same as if it were the original record, and it 
shall be treated and considered for all purposes as though it were the 
original record. All provisions of law and regulations applicable to the 
original shall be applicable to the reproduced record. As used in this 
section, ``original record'' shall mean the record required by this part 
to be maintained or preserved by the proprietor, even though it may be 
an executed duplicate or other copy of the document.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended, (26 U.S.C 5555))



Sec. 19.726  Authorized abbreviations to identify spirits.

    The following abbreviation may be used, either alone or in 
conjunction with descriptive words, to identify the kind of spirits on 
forms or records:

------------------------------------------------------------------------
              Kinds of spirits                      Abbreviations
------------------------------------------------------------------------
Alcohol....................................  A
Brandy.....................................  BR
Bourbon Whisky.............................  BW
Canadian Whisky............................  CNW
Completely Denatured Alcohol...............  CDA
Corn Whisky................................  CW
Grain Spirits..............................  GS
Irish Whisky...............................  IW
Light Whisky...............................  LW
Malt Whisky................................  MW
Neutral Spirits............................  NS
Neutral Spirits Grain......................  NSG
Rye Whisky.................................  RW
Scotch Whisky..............................  SW
Specially Denatured Alcohol................  SDA
Special Denatured Rum......................  SDR
Tequila....................................  TEQ
Vodka......................................  V
Whisky.....................................  W
------------------------------------------------------------------------


(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))

                                 Records



Sec. 19.731  General.

    (a) Entries. (1) Each entry required by this part to be made in 
daily records shall be made on the day on which the operation or 
transaction occurs.
    (2) When the proprietor prepares supplemental or auxiliary records 
concurrent with the individual operation or transaction, and these 
records contain all the required information with respect to the 
operation or transaction, entries in daily records may be deferred not 
later than the close of business the third business day succeeding the 
day on which the operation or transaction occurs.
    (b) Content. (1) All entries in the daily records required by this 
subpart shall show the date of the operation or transaction.
    (2) Daily records shall accurately and clearly reflect the details 
of each operation or transaction and, as applicable, contain all data 
necessary to enable:
    (i) Identification and proper marking and labeling of spirits, 
denatured spirits, or wines;
    (ii) Proprietors to prepare summaries, reports, and returns required 
by this part; and
    (iii) ATF officers to:
    (A) Verify and trace the quantity and movement of materials, 
spirits, denatured spirits, wines, or alcoholic flavoring materials 
involved in each transaction or operation;

[[Page 391]]

    (B) Verify tax determinations and claims; and
    (C) Ascertain whether there has been compliance with law and 
regulations.
    (c) Format. (1) Proprietor's copies of prescribed forms which bear 
all required details shall be utilized as daily records.
    (2) In instances when a form is not prescribed, the records required 
by this subpart shall be those commercial records used by the proprietor 
in his accounting system and shall bear all required details.
    (3) Daily records required by this part shall be so maintained that 
they clearly and accurately reflect all mandatory information. Where the 
format or arrangement of the daily records is such that the information 
is not clearly or accurately reflected, the regional director 
(compliance) may require a format or arrangement which will clearly and 
accurately reflect the information.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))



Sec. 19.732  Details of daily records.

    The daily records required by this part shall conform to the 
following requirements:
    (a) Spirits shall be recorded by kind and by quantity in proof 
gallons, except as provided in Sec. 19.751.
    (b) Denatured spirits shall be recorded by formula number and by 
quantity in wine gallons.
    (c) Distilling materials produced on the premises shall be recorded 
by kind and by quantity in wine gallons. Chemical byproducts containing 
spirits, articles, spirits residues, and distilling materials received 
on the premises shall be recorded by kind, by percent of alcohol by 
volume, and by quantity in wine gallons. However, when nonliquid 
distilling materials which are not susceptible to such quantitative 
determination are received, the quantity of such materials may be 
determined by weight and shall be so recorded, and the alcohol content 
need not be recorded. When it can be shown that it is impractical to 
weigh or otherwise determine the exact quantity of such nonliquid 
materials, the proprietor may estimate the weight or volume of the 
material.
    (d) Wines shall be recorded by kind, by quantity in wine gallons, 
and by percent of alcohol by volume.
    (e) Alcoholic flavoring materials shall be recorded by kind, formula 
number (if any) and by quantity in proof gallons.
    (f) Containers (other than those bearing lot identification numbers) 
or cases involved in each operation or transaction shall be recorded by 
type, serial number, and the number of containers (including identifying 
marks on bulk conveyances), or cases. However, spirits withdrawn in 
cases may be recorded without the serial numbers of the cases, unless 
the regional director (compliance) requires such recording. Package 
identification numbers, number of packages, and proof gallons per 
package shall be recorded on deposit record in the storage account 
reflecting production gauges or filling of packages from tanks, however, 
only the lot identification, number of packages, and proof gallons per 
package need be shown for transactions in packages of spirits unless 
package identification numbers are specifically required by this part.
    (g) Materials intended for use in the production of spirits shall be 
recorded by kind and by quantity, recording liquids in gallons and other 
materials in pounds, and giving the sugar content for molasses.
    (h) The name and address of the consignee or consignor, and if any, 
the plant number or industrial use permit number of such person, shall 
be recorded for each receipt or removal of materials, spirits, denatured 
spirits, articles, spirits residues, and wine.
    (i) The serial number of the tank used shall be recorded for each 
operation or transaction.
    (j) The rate of duty paid on imported spirits shall be shown on the 
transaction forms or records.
    (k) Records shall identify imported spirits, spirits from Puerto 
Rico, and spirits from the Virgin Islands, or the records shall show 
that a distilled spirits product contains such spirits.
    (l) Records shall identify spirits that are to be used exclusively 
for fuel use.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

[[Page 392]]

                           Production Account



Sec. 19.736  Daily production records.

    (a) Spirits production. Each proprietor shall maintain daily 
production account records of production operations showing:
    (1) The receipt of fermenting material or other nonalcoholic 
material intended for use in the production of spirits.
    (2) The receipt and use of spirits, denatured spirits, articles, and 
spirits residues received for redistillation.
    (3) The fermenting material set in each fermenter or other material 
used in the production of spirits.
    (4) The distilling material produced, received for production, and 
used in production of spirits, or destroyed or removed from the premises 
before being distilled (including the residue of beer returned to the 
producing brewery).
    (5) The gauge of spirits in each receiving tank, the production 
gauge (in proof gallons) of spirits removed from each tank, and the 
transaction form or record and its serial number covering each removal. 
The details of individual packages filled pursuant to production gauge 
for immediate withdrawal from bonded premises shall also be recorded.
    (6) The fermenting materials or other nonalcoholic materials used or 
removed from the premises.
    (7) The quantity and testing for alcoholic content of fusel oil or 
other chemicals removed from the production system and the disposition 
thereof with the name of the consignee, if any.
    (8) The kind and quantity of distillates removed from the production 
system pursuant to Sec. 19.322.
    (9) The kind and quantity of spirits, lost or destroyed prior to 
production gauge. Records pertaining to the production account shall be 
maintained in such a manner that the spirits produced may be traced 
through the distilling system to the mash or other material from which 
produced, and the identity of the spirits thus traced may be clearly 
established.
    (b) Byproduct spirit production. Each proprietor who manufactures 
substances other than spirits, in a process which produces spirits as a 
byproduct, shall maintain daily production records as to each such 
process showing:
    (1) The kind and quantity of materials received, unless included in 
records maintained under paragraph (a) of this section.
    (2) The spirits produced and disposed of.
    (3) The kind and quantity of other substances produced.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985; 50 FR 23410, June 4, 1985]

                             Storage Account



Sec. 19.740  Daily storage records.

    (a) General. Proprietors shall maintain daily records in the storage 
account which shall show for each kind of spirits or wine, as 
applicable:
    (1) Spirits or wines received for deposit in storage;
    (2) Spirits mingled;
    (3) Spirits in tanks;
    (4) Spirits or wines filled into packages from tanks and retained 
for storage;
    (5) Spirits of less than 190 degrees of proof or wines transferred 
from one tank to another;
    (6) Spirits returned to bond;
    (7) Spirits or wines voluntarily destroyed;
    (8) Spirits or wines lost during storage;
    (9) The transfer of spirits or wine from one package to another;
    (10) The addition of oak chips to spirits and the addition of 
caramel to brandy or rum; and
    (11) The disposition of spirits or wines.
    (b) Records covering deposits. The proprietor's copies of gauge 
records, transfer records, or tank records of wines or spirits of less 
than 190 degrees of proof covering: deposit in the storage account of 
spirits received from the production account, from customs custody, or 
by return to bond under subpart U of this part, or of wines or spirits 
from other bonded premises; packages of spirits or wines filled from 
tanks and retained in the storage account after mingling; and wines or 
spirits of less than 190 degrees of proof transferred from one tank to 
another,

[[Page 393]]

shall be utilized by the proprietor to record wines or spirits deposited 
in the storage account. The proprietor shall enter the date of deposit 
of the spirits in storage on the record. Files of deposit records shall 
be maintained for spirits in packages and such files shall be arranged 
by producers (by warehouseman in the case of blended rums or brandies 
and for spirits of 190 degrees or more of proof, by the warehouseman who 
received the spirits from customs custody in the case of imported 
spirits, and by producer in the Virgin Islands or Puerto Rico in the 
case of Virgin Islands or Puerto Rican spirits), in chronological order 
according to the date of deposit in the storage account, and, when 
possible, in sequence by lot identification for packages. (For the 
purpose of records under this section spirits produced under trade names 
shall be treated as being produced under the real name of the proprietor 
[producer].) Also, files of deposit records shall be maintained, in the 
manner prescribed by 19.742, for wines and for spirits of less than 190 
degress of proof in tanks in the storage account with a separate file 
for each tank of wines or spirits. In the case of spirits of 190 degrees 
or more of proof deposited in tanks in the storage account, the 
proprietor shall maintain a separate consolidated file of deposit 
records for all tanks, separately as to gin, vodka, and other spirits as 
applicable, of all such domestic spirits; all such imported spirits duty 
paid at the beverage rate; all such imported spirits duty paid at the 
nonbeverage rate; all such Virgin Islands spirits; and all such Puerto 
Rican spirits. Such files shall be arranged chronologically by date of 
deposit in the warehouse.
    (c) Records covering withdrawals. When wines or spirits other than 
spirits of 190 degrees or more of proof in tanks in the storage account, 
are withdrawn from the storage account the proprietor shall note on the 
record of deposit, the date and disposition of the spirits so that the 
files shall currently reflect the spirits remaining in the storage 
account. When spirits of 190 degrees or more of proof are withdrawn from 
tanks in the storage account the record of deposit need not be noted, 
but semi-annually (as of June 30 and December 31) the proprietor shall 
remove from his consolidated files of active deposit records all such 
records in excess of those required to cover the quantity of spirits 
shown as remaining in tanks. The deposit records so removed shall be 
those covering spirits first deposited in the storage account.

(Sec. 807, Pub. L. 96-39 93 Stat. 284 (26 U.S.C. 5207))



Sec. 19.741  Package summary records.

    (a) General. Each warehouseman shall keep current summary records 
for each kind of spirits or wines in packages, to show the spirits or 
wines deposited in, withdrawn from, and remaining in the storage 
account. Separate accounting records shall be kept for domestic spirits, 
imported spirits, Virgin Islands spirits, Puerto Rican spirits, and 
wine. Package accounts for spirits may be kept by either the season or 
the year the packages were filled with spirits.
    (b) Arrangement. Package summary records shall be prepared and 
arranged separately:
    (1) For domestic spirits of less than 190 degrees of proof, 
alphabetically by State and numerically by the plant number and name of 
the producer or warehouseman.
    (2) For domestic spirits of 190 degrees or more of proof, 
alphabetically by State, and numerically by the plant number and name of 
the warehouseman.
    (3) For imported spirits, alphabetically by State and numerically by 
the plant number and name of the warehouseman who received the spirits 
from customs custody.
    (4) For Puerto Rican or Virgin Islands spirits, alphabetically by 
the name of the producer in Puerto Rico or the Virgin Islands.
    (5) For wine, by kind and tax rate imposed by 26 U.S.C. 5041.
    (c) Details. Package summary records shall show the following 
details:
    (1) The date the summarized transactions occurred;
    (2) For spirits, the number of packages and the proof gallons 
contained therein;
    (3) For wine, the number of packages and the wine gallons contained 
therein;

[[Page 394]]

    (4) Gains or shortages disclosed by inventory or when an account is 
closed; and
    (5) Gallon balances on summary records for spirits and wines 
remaining in the account at the end of each month.
    (d) Summarization. Package summary records shall be consolidated at 
the end of each month, or for lesser periods when required by the 
regional director (compliance), to show for all types of containers and 
kinds of spirits, the total proof gallons received in, withdrawn from, 
and remaining in the storage account.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))



Sec. 19.742  Tank record of wine or spirits of less than 190 degrees of proof.

    (a) General. Proprietors shall keep a record for each tank 
(including bulk conveyance) containing wine or spirits of less than 190 
degrees of proof to show deposits into, withdrawals from, and the 
balance remaining in each tank in the storage account. A new record 
shall be prepared each time wine or spirits are deposited in an empty 
tank. Except as otherwise provided in this section, each transaction 
shall be recorded on the day the transaction occurs.
    (b) Arrangement. Tank records shall be prepared and arranged:
    (1) For domestic spirits, alphabetically by State, and numerically 
by (i) the plant number and name of the producer, or, (ii) for blended 
rums or brandies, the plant number and name of the warehouseman;
    (2) For imported spirits, alphabetically by State, and numerically 
by the plant number and name of the warehouseman;
    (3) For Puerto Rican or Virgin Islands spirits, alphabetically by 
the name of the producer in Puerto Rico or the Virgin Islands; and
    (4) For wine, by kind and tax rate imposed by 26 U.S.C. 5041.
    (c) Details. Tank records shall show the following details:
    (1) Tank record serial number, beginning with ``1'' for each record 
initiated on or after January 1;
    (2) Date of each transaction;
    (3) Identification of the tank;
    (4) Kind of wine or spirits;
    (5) Number and average proof gallon content of packages of spirits 
dumped in the tank, or a notation indicating the deposit in the tank of 
spirits by pipeline;
    (6) Wine gallons of wine, or proof gallons of spirits deposited;
    (7) If subject to age, the age of the youngest spirits in years, 
months and days, each time spirits are deposited;
    (8) Wine gallons of wine, or proof gallons of spirits withdrawn;
    (9) Related transaction form or record and its serial number for 
deposits or withdrawals;
    (10) Wine gallons of wine, or proof gallons of spirits remaining in 
the tank, recorded at the end of each calendar month; and
    (11) Gain or loss disclosed by inventory or on emptying of the tank.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))



Sec. 19.743  Tank summary record for spirits of 190 degrees or more of proof.

    (a) General. Proprietors shall keep a tank summary record for 
spirits of 190 degrees or more of proof held in tanks to show the proof 
gallons deposited into, withdrawn from, and remaining in tanks in the 
storage account. A separate tank summary record shall be prepared for 
each kind of spirits of 190 degrees or more of proof. Entries shall be 
made for each day in which a transaction occurs, and shall be recorded 
as a summary of the individual transactions shown on the deposit 
records.
    (b) Arrangement. Tank summary records shall be prepared and 
arranged:
    (1) For domestic spirits, alphabetically by State, and numerically 
by the plant number and name of the warehouseman;
    (2) For imported spirits, alphabetically by State, and numerically 
by the plant number of the warehouseman who received the spirits from 
customs custody; and
    (3) For spirits from Puerto Rico or the Virgin Islands, 
alphabetically by the name of the producer in Puerto Rico or the Virgin 
Islands.
    (c) Details. Tank summary records shall show the following details:
    (1) Kind of spirits;
    (2) Date of transactions summarized;

[[Page 395]]

    (3) Proof gallons deposited;
    (4) Proof gallons withdrawn;
    (5) Proof gallons remaining in tanks; and
    (6) Gain or loss disclosed by inventory or on emptying of the tanks 
summarized on the record.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

                           Processing Account



Sec. 19.746  Processing.

    Each processor shall maintain daily records of transactions and 
operations with respect to:
    (a) Manufacture of distilled spirits products;
    (b) Finished products;
    (c) Denaturation of spirits; and
    (d) Manufacture of articles.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))



Sec. 19.747  Records of manufacturing.

    Each processor shall maintain daily records of the details of 
manufacturing operations, showing:
    (a) The spirits, wines, and alcoholic flavoring materials received. 
The total receipts shall be summarized showing (1) the spirits received 
from storage or production at the same plant, (2) the spirits received 
from other plants by transfer in bond, (3) spirits received from customs 
custody, (4) wines received from the storage account at the same plant, 
(5) wines received by transfer in bond, and (6) alcoholic flavoring 
materials received.
    (b) The spirits, wines, alcoholic flavoring materials, and other 
ingredients used in the manufacture of a distilled spirits products 
showing the serial number of the dump/batch record covering such dump.
    (c) Bottling or packaging of each batch of spirits, showing the 
serial numbers of the bottling and packaging records covering such 
bottling or packaging.
    (d) The results of bottling proof and fill tests as required by 
Sec. 19.386.
    (e) Receipt, use and disposition of liquor bottles.
    (f) The rebottling, relabeling, and reclosing of bottled products as 
required by Secs. 19.392 and 19.393.
    (g) The spirits, wines, and alcoholic flavoring materials removed 
from the premises.
    (h) The spirits moved to the production account for redistillation.
    (i) Redistillation of spirits, including the production of gin and 
vodka by means other than original and continuous distillation.
    (j) Record of alcoholic flavoring materials deposited into tanks 
prior to dumping showing the consignor, the date and quantity received, 
the name of the product, the date and quantity of each removal from the 
tank and losses.
    (k) Spirits returned to bond.
    (l) The voluntary destruction of spirits and wines.
    (m) The losses as provided in subpart Q of this part.

The records required by paragraph (a) of this section shall also show 
the name and plant number of the producer or processor (warehouseman in 
the case of blended beverage rums or brandies or spirits of 190 degrees 
of more of proof received from storage) for domestic spirits, the name 
of the importer and the country of origin for imported spirits, and the 
name and address of the producer of wines and alcoholic flavoring 
materials.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50 
FR 23953, June 7, 1985]



Sec. 19.748  Dump/batch records.

    (a) Format of dump/batch records. Proprietor's dump/batch records 
shall contain, as applicable, the following:
    (1) Serial number;
    (2) Name and distilled spirits plant number of the producer;
    (3) Kind and age of spirits used with a notation to indicate 
treatment with oak chips, addition of caramel, imported spirits, and 
spirits from Puerto Rico and the Virgin Islands;
    (4) Serial number of tank or container to which ingredients are 
added for use;
    (5) Serial or identification number of tank or container from which 
spirits are removed;
    (6) Quantity by ingredient of other alcoholic ingredients used, 
showing

[[Page 396]]

wine in wine gallons, percentage of alcohol by volume and proof, and 
alcoholic flavoring materials in proof gallons;
    (7) Serial number of source transaction record (e.g., record 
covering spirits previously dumped);
    (8) Date of each transaction;
    (9) Quantity, by ingredient (other than water), of nonalcoholic 
ingredients used;
    (10) Formula number;
    (11) Quantity of ingredients used in the batch that have been 
previously dumped, reported on dump records, and held in tanks or 
containers;
    (12) Total quantity in proof gallons of all alcoholic ingredients 
used;
    (13) Identification of each record to which spirits are transferred;
    (14) Quantity in each lot transferred;
    (15) Date of each transfer;
    (16) Total quantity in proof gallons of product transferred;
    (17) Gain or loss; and
    (18) For each batch to be tax determined in accordance with 
Sec. 19.35, the effective tax rate.
    (b) Redistillation. (1) Dump/batch records shall be prepared to show 
spirits to be redistilled in the processing account, including the 
production of gin or vodka by redistillation. A dump record shall also 
be prepared to record the finished distillate.
    (2) When redistillation requires the use of more than one tank or 
other vessel in a continuous distilling system, the system may be shown 
on the record in lieu of preparing a separate record to show each 
movement of spirits between tanks or vessels.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-297, 55 
FR 18064, Apr. 30, 1990]



Sec. 19.749  Bottling and packaging record.

    The bottling and packaging record shall be prepared and contain the 
following information:
    (a) Tank number(s);
    (b) Serial number (beginning with ``1'' at the start of each 
calendar or fiscal year);
    (c) Formula number (if any) under which the batch was produced;
    (d) Serial number of the dump/batch record from which received;
    (e) Kind of product (including age, if claimed);
    (f) Details of the tank gauge (including proof, wine gallons, proof 
gallons, and, if applicable, obscuration);
    (g) The date the bottles or packages were filled;
    (h) Size of the bottles or packages filled, number of bottles per 
case, and number of cases or packages filled;
    (i) Serial numbers by brand name of cases or other containers 
filled;
    (j) Proof of the spirits bottled or packaged (if different from 
subsection (f));
    (k) Total quantity bottled, packaged or otherwise disposed of in 
bulk;
    (l) Losses or gains; and
    (m) Whether the spirits were labeled as bottled in bond.

(Sec. 807(a), Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))



Sec. 19.750  Records of alcohol content and fill tests.

    (a) Proprietors shall record the results of all tests of alcohol 
content and quantity (fill) conducted.
    (b) The record shall be maintained in a manner and provide 
information that will enable ATF officers to determine whether the 
proprietor has complied with the provisions of Sec. 19.386 by:
    (1) Monitoring operations by conducting alcohol content and fill 
tests; and
    (2) Employing procedures to correct variations in alcohol content 
and fill.
    (c) Alcohol content and fill test records shall contain, at a 
minimum, the following information:
    (1) Date and time of test;
    (2) Bottling tank number;
    (3) Serial number of bottling record;
    (4) Bottling line designation;
    (5) Size of bottle;
    (6) Number of bottles tested;
    (7) Labeled alcohol content;
    (8) Alcohol content found by the test;
    (9) Percentage of variation from 100 percent fill; and
    (10) Corrective action taken, if any.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 U.S.C. 5555); 
Sec. 807(a), Pub. L. 96-39 (26 U.S.C. 5207)

[T.D. ATF-237, 51 FR 36395, Oct. 10, 1986; 51 FR 37271, Oct. 21, 1986]

[[Page 397]]



Sec. 19.751  Records of finished products.

    Each processor shall maintain by proof gallons daily transaction 
records and a daily summary record of spirits bottled or packaged as 
follows:
    (a) Beginning and ending quantity of bottled or packaged spirits on 
hand;
    (b) Spirits bottled or packaged;
    (c) Bottled or packaged spirits disposed of by:
    (1) Withdrawal on tax determination;
    (2) Transfer in bond;
    (3) Withdrawal free of tax or without payment of tax;
    (4) Dumping for further processing;
    (5) Transfer to the production account for redistillation;
    (6) Voluntary destruction;
    (7) Accountable losses;
    (8) Samples;
    (9) Inventory shortages and overages; and
    (10) Other dispositions.

In lieu of showing the proof gallons of spirits on daily transaction 
records of withdrawals from bonded premises, proprietors may show the 
wine gallons or liters and the proof of spirits in cases. Summary 
records shall be used to compile the report required by Sec. 19.792.

(Sec. 807, Pub. L. 96-39, 93 Stat. 283, as amended (26 U.S.C. 5207))



Sec. 19.752  Denaturation records.

    (a) General. Each processor qualified to denature spirits shall 
maintain daily records of denaturation showing:
    (1) Spirits received for, and used in, denaturation;
    (2) Spirits, denatured spirits, recovered denatured spirits, spirits 
residues, and articles redistilled in the processing account for 
denaturation;
    (3) Kind and quantity of denaturants received, used in denaturation 
of spirits, or otherwise disposed of;
    (4) Conversion of denatured alcohol formulas in accordance with 
Sec. 19.460;
    (5) Denatured spirits produced, received, stored in tanks, filled 
into containers, removed, or otherwise disposed of;
    (6) Recovered denatured spirits or recovered articles received, 
restored, and/or redenatured;
    (7) Packages of denatured spirits filled with a separate record for 
each formula number and filed in numerical order according to the serial 
number or lot identification number of the packages;
    (8) Losses; and
    (9) Disposition of denatured spirits.
    (b) Record of denaturation. Each time spirits are denatured, a 
record shall be prepared to show the formula number, the tank in which 
denaturation takes place, the proof gallons of spirits before 
denaturation, the quantity of each denaturant used (in gallons, or in 
pounds or ounces), and wine gallons of denatured spirits produced.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))



Sec. 19.753  Record of article manufacture.

    Each processor qualified to manufacture articles shall maintain 
daily records arranged by the name and authorized use code of the 
article to show the following:
    (a) Quantity, by formula number of denatured spirits used in the 
manufacture of the article;
    (b) Quantity of each article manufactured; and
    (c) Quantity of each article removed, or otherwise disposed of, 
including the name and address of the person to whom sold or otherwise 
disposed of.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

                               Tax Records

    Source: Sections 19.761 through 19.765 added by T.D. ATF-297, 55 FR 
18064, Apr. 30, 1990, unless otherwise noted.



Sec. 19.761  Record of tax determination.

    A serially numbered invoice or shipping document, signed or 
initialed by an agent or employee of the proprietor, will constitute the 
record of tax determination. Although neither the proof gallons nor 
effective tax rates need be shown on the record of tax determination, 
there shall be shown on each invoice or shipping document sufficient 
information to enable ATF officers to determine the total proof gallons 
and, if applicable, each effective tax rate and the proof gallons 
removed at each effective tax rate. For purposes of this part, the total 
proof gallons calculated

[[Page 398]]

from each invoice or shipping document constitutes a single withdrawal.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))



Sec. 19.762  Daily summary record of tax determinations.

    Each proprietor of a distilled spirits plant who withdraws distilled 
spirits on determination of tax, but before payment of tax, shall 
maintain a daily summary record of tax determinations. The summary 
record will show, for each day on which tax determinations occur:
    (a) The serial numbers of the records of tax determination, the 
total proof gallons, rounded to the nearest tenth proof gallon on which 
tax was determined at each effective tax rate, and the total tax; or
    (b) The serial numbers of the records of tax determination, the 
total tax for each record of tax determination and the total tax.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))



Sec. 19.763  Record of average effective tax rates.

    (a) For each distilled spirits product to be tax determined in 
accordance with Sec. 19.37, the proprietor shall prepare a daily summary 
record showing the--
    (1) Serial number of the batch record of each batch of the product 
which will be bottled or packaged, in whole or in part, for domestic 
consumption;
    (2) Proof gallons in each such batch derived from distilled spirits, 
eligible wine, and eligible flavors; and
    (3) Tax liabilities of each such batch determined as follows:
    (i) Proof gallons of all distilled spirits (exclusive of distilled 
spirits derived from eligible flavors), multiplied by the tax rate 
prescribed in 26 U.S.C. 5001;
    (ii) Wine gallons of each eligible wine, multiplied by the tax rate 
which would be imposed on the wine under 26 U.S.C. 5041(b)(1), (2), or 
(3) but for its removal to bonded premises; and
    (iii) Proof gallons of all distilled spirits derived from eligible 
flavors to the extent that such distilled spirits exceed 2\1/2\% of the 
proof gallons in the product, multiplied by the tax rate prescribed in 
26 U.S.C. 5001.
    (b) At the end of each month during which the product is 
manufactured, the proprietor shall determine the--
    (1) Total proof gallons and total tax liabilities for each summary 
record prescribed by paragraph (a) of this section;
    (2) Add the sums from paragraph (b)(1) of this section to the like 
sums determined for each of the preceding five months; and
    (3) Divide the total tax liabilities by the total proof gallons.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))



Sec. 19.764  Inventory reserve records.

    (a) General. The proprietor shall establish an inventory reserve 
account, as provided in this section, for each eligible distilled 
spirits product to be tax determined in accordance with Sec. 19.38.
    (b) Deposit records. For each batch of the product bottled or 
packaged, the proprietor shall enter into the inventory reserve account 
a deposit record, which may be combined with the bottling and packaging 
record required by Sec. 19.749 showing the:
    (1) Name of the product;
    (2) Bottling and packaging record serial number;
    (3) Date the bottling or packaging was completed;
    (4) Total proof gallons bottled and packaged; and
    (5) Effective tax rate of the product computed in accordance with 
Sec. 19.34.
    (c) Depletions. The inventory reserve account for each product will 
be depleted in the same order in which the deposit records were entered 
into such account. A depletion will be recorded for each disposition 
(e.g., a taxable removal, an exportation, an inventory shortage or 
breakage) by entering on the deposit record the:
    (1) Transaction date,
    (2) Transaction record serial number,
    (3) Proof gallons disposed of, and
    (4) Proof gallons remaining. If any depletion exceeds the quantity 
of product remaining on the deposit record, the remaining quantity will 
be depleted, the deposit record closed, and

[[Page 399]]

the remainder of the transaction depleted from the next deposit record.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))



Sec. 19.765  Standard effective tax rates.

    For each product to be tax determined using a standard effective tax 
rate in accordance with Sec. 19.36, the proprietor shall prepare a 
record of the standard effective tax rate computation showing, for one 
proof gallon of the finished product, the following information:
    (a) The name of the product;
    (b) The least quantity of each eligible flavor which will be used in 
the product, in proof gallons, or 0.025 proof gallon, whichever is less;
    (c) The least quantity of each eligible wine which will be used in 
the product, in proof gallons;
    (d) The greatest effective tax rate applicable to the product, 
calculated in accordance with Sec. 19.34 with the values indicated in 
paragraphs (a) and (b) of this section; and
    (e) The date on which the use of the standard effective tax rate 
commenced.

                              Other Records



Sec. 19.766  Record of samples.

    (a) Requirement. The proprietor shall maintain records of all 
samples taken pursuant to subpart V of this part.
    (b) Schedule. (1) When the proprietor takes samples pursuant to an 
established schedule, such schedule may be maintained as the required 
record if it contains that information required by paragraphs (c)(2) 
through (c)(8).
    (2) When unanticipated samples are taken, the schedule shall be 
appropriately supplemented.
    (c) Detail. Sample records shall show:
    (1) Date samples were taken;
    (2) Type and identification of container from which taken;
    (3) Account from which taken;
    (4) Purpose for which taken;
    (5) Size and number of samples taken;
    (6) Kind of spirits;
    (7) Disposition of the sample (e.g., destroyed, returned to 
containers or the distilling system, retained for library purposes); and
    (8) Name and address of the person to whom samples were sent when 
the samples are to be analyzed or tested elsewhere than at the plant 
where secured.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))



Sec. 19.767  Record of destruction.

    The proprietor shall record details of the voluntary destruction of 
spirits, denatured spirits, articles, or wines as follows:
    (a) Identification of the spirits, denatured spirits, articles, or 
wines to include, as applicable, kind, quantity, elements of gauge, name 
and permit number of the producer, warehouseman or processor, and 
identification and type of container.
    (b) The date, time, place and manner of the destruction;
    (c) A statement of whether or not the spirits had previously been 
withdrawn and returned to bond; and
    (d) The name and title of the proprietor's representative who 
accomplished or supervised the destruction.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))



Sec. 19.768  Gauge record.

    When gauges are required to be made by this part or by the regional 
director (compliance), the proprietor shall prepare a gauge record to 
show:
    (a) Serial number, commencing with ``1'' at the start of each 
calendar or fiscal year;
    (b) Reason for making the gauge:
    (1) Production gauge and entry for deposit in the storage or 
processing account at the plant where produced;
    (2) Packaging of spirits or wine filled from a tank in the storage 
account at the same plant;
    (3) Transfer from the processing or storage account to the 
production account for redistillation;
    (4) Repackaging of spirits of 190 degrees or more of proof; or
    (5) Gauge on return to bond in the production or processing account 
of spirits, denatured spirits, recovered spirits, recovered denatured 
spirits, articles, recovered articles, or spirits residues.
    (c) Date of gauge;
    (d) Related form or record (identification, serial number and date);

[[Page 400]]

    (e) Kind of spirits or formula number of denatured spirits;
    (f) Proof of distillation (not required for denatured spirits, 
spirits for redistillation, or spirits of 190 degrees or more of proof);
    (g) When containers are to be filled, the type and number of 
containers;
    (h) Age of spirits;
    (i) Name and plant number of the producer or warehouseman; and
    (j) Gauge data:
    (1) Package identification, tank number, volumetric or weight gauge 
details, proof, and wine gallons;
    (2) Cooperage identification (``C'' for charred, ``REC'' for 
recharred, ``P'' for plain, ``PAR''for paraffined, ``G'' for glued, or 
``R'' for reused);
    (3) Entry proof for whiskey;
    (4) Proof gallons per filled package; and
    (5) Total proof gallons of spirits or wine gallons of denatured 
spirits, recovered denatured spirits, articles, spirits residues, or 
wine.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))



Sec. 19.769  Package gauge record.

    When required by this part and Part 252, a record shall be prepared 
to document the gauge of packages of spirits and to convey information 
on package gauges. The following information shall be recorded:
    (a) Date prepared;
    (b) Identification of the related transaction form or record, and 
its serial number;
    (c) The name and plant number of the producer or processor (For 
blended rums or brandies enter name(s) and plant number of blending 
warehouseman. For spirits of 190 degrees or more of proof, name and 
plant number of the producer or warehouseman, as appropriate; where the 
packages have already been marked, the name and plant number marked 
thereon. For imported spirits, the name of the warehouseman who received 
the spirits from customs custody and name of importer. For Virgin 
Islands or Puerto Rican spirits, the name of the producer in the Virgin 
Islands or Puerto Rico);
    (d) proof of distillation for spirits not over 190 degrees proof; 
and
    (e) For each package--
    (1) Serial or identification number;
    (2) Designate wooden barrels as ``C'' for charred, ``REC'' for 
recharred, ``P'' for plain, ``PAR'' for paraffined, ``G'' for glued, 
``R'' for reused, and ``PS'' if a barrel has been steamed or water 
soaked before filling;
    (3) Kind of spirits;
    (4) Gross weight determined at the time of original gauge, regauge, 
or at time of shipment;
    (5) Present tare on regauge;
    (6) Net weight for filling gauge or regauge;
    (7) Proof;
    (8) Proof gallons for regauge;
    (9) Original proof gallons; and
    (10) Receiving weights, when a material difference appears on 
receipt after transfer in bond of weighed packages.

(Approved by the Office of Management and Budget under control number 
1512-0250)

(Sec. 807, Pub. L. 93-39, 93 Stat. 284 (26 U.S.C. 5207))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50 
FR 23953, June 7, 1985]



Sec. 19.770  Transfer record.

    (a) Consignor. When required by this part, proprietors shall prepare 
a transfer record. The transfer record shall show: (1) Serial number, 
commencing with ``1'' on January 1 of each year;
    (2) Serial number and date of ATF Form 5100.16 (not required for 
wine spirits withdrawn without payment of tax for use in wine 
production);
    (3) Name and distilled spirits plant number of consignor;
    (4) Name and distilled spirits plant number or bonded wine cellar 
number of the consignee;
    (5) Account from which the spirits or wines were removed for 
transfer (i.e., production, storage, or processing account);
    (6) Description of the spirits, denatured spirits, or wine--
    (i) Name and plant number of the producer, warehouseman or processor 
(Not required for denatured spirits or wine. For imported spirits, 
record the name and plant number of the warehouseman or processor who 
received the spirits from customs custody. For transfer of imported 
spirits from customs custody to ATF bond, record the

[[Page 401]]

name of the foreign producer. For Virgin Islands or Puerto Rican 
spirits, show the name of the producer in the Virgin Islands or Puerto 
Rico. For spirits of different producers or warehousemen which have been 
mixed in the processing account, record the name of the processor.);
    (ii) Kind of spirits or wines (For denatured spirits, show kind and 
formula number. For alcohol, show material from which produced. For bulk 
spirits and for alcohol in packages, show kind and proof. For other 
spirits and wines, use kind designation as defined in 27 CFR Part 4 or 5 
as appropriate);
    (iii) Age (in years, months, and days) and year of production;
    (iv) Number of packages or cases with their lot identification 
numbers or serial numbers and date of fill;
    (v) Type of container (If spirits, denatured spirits or wines are to 
be transferred by pipeline, show ``P/L''.);
    (vi) Proof gallons for distilled spirits, or wine gallons for 
denatured spirits or wine;
    (vii) Conveyance identification; and
    (viii) For distilled spirits products which contain eligible wine or 
eligible flavors, the elements necessary to compute the effective tax 
rate as follows:
    (A) Proof gallons of distilled spirits (exclusive of distilled 
spirits derived from eligible flavors);
    (B) Wine gallons of each eligible wine and the percentage of alcohol 
by volume of each; and
    (C) Proof gallons of distilled spirits derived from eligible 
flavors.
    (7) Notation to indicate when spirits are being transferred in bond 
from production facility to another plant;
    (8) Identification of seals, locks or other devices affixed to the 
conveyance or package (Permanent seals affixed to a conveyance and which 
remain intact need not be recorded on the transfer record when a 
permanent record is maintained);
    (9) Date; and
    (10) Signature and title of the consignor with the penalties of 
perjury statement required by Sec. 19.100.
    (b) Consignee. (1) When a proprietor receives wine from a bonded 
wine cellar, the consignee shall complete Form 703 covering such 
transfer in accordance with the instructions thereon.
    (2) When a proprietor receives spirits from an alcohol fuel plant or 
from customs custody, or spirits, denatured spirits and wines from the 
bonded premises of another distilled spirits plant, he shall record the 
results of such receipt on the related transfer record as follows:
    (i) Date of receipt;
    (ii) Notation whether the securing devices on the conveyance were or 
were not intact on arrival (not applicable to spirits transferred in 
unsecured conveyances or denatured spirits);
    (iii) Gauge of spirits, denatured spirits, or wine showing the tank 
number, proof (percent of alcohol by volume for wine) and elements of 
the weight or volumetric determination of quantity, wine gallons or 
proof gallons received, and any losses or gains;
    (iv) Notation of excessive in-transit loss, missing packages, 
tampering, or apparent theft;
    (v) Account into which the spirits, denatured spirits or wines were 
deposited (i.e., production, storage or processing); and
    (vi) Signature and title of the consignee with the penalties of 
perjury statement required by Sec. 19.100.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-297, 55 
FR 18065, Apr. 30, 1990; 55 FR 23635, June 11, 1990]



Secs. 19.771-19.772  [Reserved]



Sec. 19.773  Daily record of wholesale liquor dealer and taxpaid storeroom operations.

    Where the proprietor, in connection with his plant, conducts 
wholesale liquor dealer operations, or operates a taxpaid storeroom, on, 
contiguous to, adjacent to, or in the immediate vicinity of general 
plant premises, or operates taxpaid storage premises at another location 
from which distilled spirits are not sold at wholesale, he shall 
maintain daily records of the receipt and disposition of all distilled 
spirits and wines at such premises, and of all reclosing and relabeling 
operations. The provisions of this section shall also apply to products 
returned to a wholesale liquor dealer or taxpaid storeroom from the 
market. A separate

[[Page 402]]

record shall be kept for each such premises. The records in respect of 
the receipt and disposition of distilled spirits and wines shall contain 
all data necessary (consisting of or supported by records including 
bills of lading and invoices) to enable ATF officers to identify and 
trace such receipt and dispositions and to ascertain whether there has 
been compliance with all laws and regulations relating thereto. In 
addition to any other information shown therein, such records shall 
include:
    (a) For receipts and dispositions--
    (1) The date of the transaction (or date of discovery in the case of 
casualty or theft);
    (2) The name and address of each consignor or consignee, as the case 
may be;
    (3) The brand name;
    (4) The kind of spirits;
    (5) The actual quantity of distilled spirits involved (proof and 
proof gallons if in packages, wine gallons or liters and proof if in 
bottles);
    (6) The package identification or serial numbers of packages 
involved;
    (7) The name of the producer; and
    (8) The country of origin, if imported spirits.
    (b) For case dispositions--In addition to the requirements listed in 
paragraph (a) of this section the regional director (compliance) may, 
upon notice to the dealer, require the recording of case serial numbers 
for dispositions.
    (c) For reclosing or relabeling operations--
    (1) The date of the transaction;
    (2) The serial numbers of cases involved;
    (3) The total number of bottles;
    (4) The name of the bottler; and
    (5) The number and kind of strip stamps used and/or the number of 
alternative devices used.

(Approved by the Office of Management and Budget under control number 
1512-0198)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 U.S.C. 5555))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50 
FR 23953, June 7, 1985]



Sec. 19.774  Record of inventories.

    (a) General. Each proprietor shall make a record of inventories of 
spirits, denatured spirits, and wines required by Secs. 19.329, 19.353, 
19.401, 19.402, and 19.464. The following information shall be shown:
    (1) Date taken;
    (2) Identification of container(s);
    (3) Kind and quantity of spirits, denatured spirits, and wines;
    (4) Losses (whether by theft, voluntary destruction or otherwise), 
gains or shortages; and
    (5) Signature, under penalties of perjury, of the proprietor or 
person taking the inventory.
    (b) Production. Each proprietor shall record the quarterly inventory 
of spirits as provided in paragraph (a) of this section.
    (c) Storage. (1) Each proprietor shall record the quarterly 
inventory of spirits and wines (except those in packages) as provided in 
paragraph (a) of this section.
    (2) Gains or losses disclosed for each container shall be recorded 
on the current tank record (or summary record for spirits of 190 degrees 
or more of proof).
    (d) Processing. Each proprietor shall record inventories as provided 
in paragraph (a) of this section, and for:
    (1) Bulk spirits and wines in process, any gains or losses shall be 
recorded on the individual dump, batch, or bottling record;
    (2) Finished products in bottles and packages, any overages, losses, 
and shortages for the total quantity inventoried shall be recorded in 
records required by Sec. 19.751; and
    (3) Denatured spirits, any gains or losses shall be recorded in the 
record prescribed by Sec. 19.752.
    (e) Retention. Inventory records shall be retained by the proprietor 
and made available for inspection by ATF officers.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))



Sec. 19.775  Record of securing devices.

    Each proprietor shall maintain a record of securing devices by 
serial number showing the number received, affixed to conveyances (in 
serial order), and otherwise disposed of.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

[[Page 403]]



Sec. 19.776  Record of scale tests.

    Proprietors shall maintain records of results of tests conducted in 
accordance with Sec. 19.273 and Sec. 19.276.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))



Sec. 19.777  [Reserved]



Sec. 19.778  Removal on or after January 1, 1987 of Puerto Rican and Virgin Islands spirits, and rum imported from all other areas.

    (a) General. The proprietor shall maintain separate accounts, in 
proof gallons, of Puerto Rican spirits having an alcoholic content of at 
least 92 percent rum, of Virgin Islands spirits having an alcoholic 
content of at least 92 percent rum, and of rum imported from all other 
areas removed from the processing account on determination of tax. 
Quantities of spirits in these categories that are contained in products 
mixed in processing with other alcoholic ingredients may be determined 
by using the methods provided in paragraphs (b), (c), or (d) of this 
section. The proprietor shall report these quantities monthly on Form 
5110.28, Monthly Report of Processing Operations, as provided in 
Sec. 19.792.
    (b) Standard method. For purposes of the separate accounts, 
quantities of spirits in the above categories may be determined based on 
the least amount of such spirits which may be used in each product as 
stated in the approved formula, ATF F 5110.38.
    (c) Averaging method. For purposes of the separate accounts, 
quantities of spirits in the above categories may be determined by 
computing the average quantity of such spirits contained in all batches 
of the same product formulation manufactured during the preceding 6-
month period. The average shall be adjusted at the end of each month so 
as to include only the preceding 6-month period.
    (d) Alternative method. Distilled spirits plant proprietors who wish 
to use an alternative method for determining the amount of spirits in 
these categories contained as ingredients of other distilled spirits 
products shall file an application with the Director. The written 
application shall specifically describe the proposed alternative method, 
and shall set forth the reasons for using the alternative method.
    (e) Transitional rule. On January 1, 1987 the proprietor shall take 
physical inventories of all Puerto Rican spirits, Virgin Islands 
spirits, and rum imported from all other areas which were received into 
the processing account prior to that date. These inventories may be 
taken as provided in Sec. 19.402(a)(2). The results of the inventories 
shall be submitted in a letter to the regional director (compliance) 
within 30 days of the required date of the inventories.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1394, as amended (26 U.S.C. 5555))

[T.D. ATF-239, 51 FR 40026, Nov. 4, 1986]



Sec. 19.779  Record of shipment of spirits and specially denatured spirits withdrawn free of tax.

    (a) General. The proprietor shall prepare a record of shipment, and 
forward the original to the consignee and file a copy, when:
    (1) Samples of specially denatured spirits in excess of five gallons 
are withdrawn in accordance with Sec. 19.540(c)(2);
    (2) Spirits are withdrawn free of tax in accordance with 
Sec. 19.536(a)--(c); and
    (3) Specially denatured spirits are withdrawn free of tax in 
accordance with Secs. 19.536(d) and 19.540.
    (b) Form of record. (1) The record of shipment prescribed in this 
section may consist of a proprietor's commercial invoice, bill of 
lading, or another document intended for the same purpose. Any 
commercial document used as a record of shipment shall:
    (i) Be preprinted with the name and address of the proprietor,
    (ii) Be sequentially numbered, and
    (iii) Be consistently used for the intended purpose.
    (2) In addition to any other information on the document, the record 
of shipment shall contain, as applicable, the following information:
    (i) Date of shipment;
    (ii) Name, address, and permit number of consignee;
    (iii) Kind of spirits;
    (iv) Proof of spirits;
    (v) Formula number(s), for specially denatured spirits;
    (vi) Number and size of containers;

[[Page 404]]

    (vii) Package identification numbers or serial numbers of 
containers; and
    (viii) Total wine gallons (specially denatured spirits) or total 
proof gallons (tax-free alcohol).

(Records relating to tax-free alcohol approved by the Office of 
Management and Budget under control number 1512-0334; records relating 
to specially denatured spirits approved by the Office of Management and 
Budget under control number 1512-0337)

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

[T.D. ATF-199, 50 FR 9162, Mar. 6, 1985]



Sec. 19.780  Record of distilled spirits shipped to manufacturers of nonbeverage products.

    (a) General. Where distilled spirits are shipped to a manufacturer 
of nonbeverage products, the proprietor shall prepare a record of 
shipment, forward the original to the consignee, and retain a copy.
    (b) Form of record. The record of tax determination prescribed by 
Sec. 19.761, or any other document issued by the proprietor and 
containing the necessary information, may be used as the record of 
shipment.
    (c) Required information. In addition to any other information on 
the document, the document used as the record of shipment must contain 
the following information:
    (1) Name, address and registry number of the proprietor;
    (2) Date of shipment;
    (3) Name and address of the consignee;
    (4) Kind, proof, and quantity of distilled spirits in each 
container;
    (5) Number of containers of each size;
    (6) Package identification numbers or serial numbers of containers;
    (7) Serial number of the applicable record of tax determination; and
    (8) For distilled spirits containing eligible wine or eligible 
flavors, the effective tax rate.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207); Sec. 201 Pub. 
L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))

[T.D. ATF-297, 55 FR 18065, Apr. 30, 1990, as amended by T.D. ATF-379, 
61 FR 31426, June 20, 1996]

                     Submission of Forms and Reports



Sec. 19.791  Submission of transaction forms.

    Completed copies of transaction forms which must be submitted to the 
regional director (compliance) under the provisions of this part shall 
be submitted by the proprietor no later than the close of business the 
third business day succeeding the day of the transaction as provided by 
this part and by instructions on the individual forms.

(Sec. 807, Pub. L. 97-39, 93 Stat. 284 (26 U.S.C. 5207))



Sec. 19.792  Reports.

    (a) Reports required by this section shall be prepared as of the end 
of the applicable reporting period. The original shall be submitted to 
the regional director (compliance) and a copy retained by the 
proprietor.
    (b) Proprietors shall submit the following summary reports of their 
operations:

------------------------------------------------------------------------
                Title                   Form No.      Reporting period
------------------------------------------------------------------------
(1) Production report................     5110.40  Monthly.
(2) Storage report...................     5110.11      Do.
(3) Processing reports--
    (i) Manufacture/bottling.........     5110.28      Do.
    (ii) Denaturation (including          5110.43      Do.
     articles).
------------------------------------------------------------------------

    (c) All reports required by this part shall be prepared and 
submitted to the regional director (compliance) not later than the 15th 
day of the month following the close of the reporting period.

(Approved by the Office of Management and Budget under control number 
1512-0198)

(Sec. 807, Pub. L. 96-39, 98 Stat. 284 (26 U.S.C. 5207))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-206, 50 
FR 23953, June 7, 1985]



       Subpart X--Production of Vinegar by the Vaporizing Process

                            Scope of subpart



Sec. 19.821  Production of vinegar by the vaporizing process.

    The regulations in this subpart relate to the production of vinegar 
by the vaporizing process. The regulations cover

[[Page 405]]

requirements governing the location, qualification, changes after 
qualification, construction, equipment, plant operations and records of 
operations at vinegar plants. Except where incorporated by reference, 
the provisions of subpart A through W and subpart Y of this part do not 
apply to vinegar plants using the vaporizing process. The following 
provisions of this part shall apply to this subpart: the meaning of 
terms, Sec. 19.11; other businesses, Sec. 19.68; right of entry and 
examination, Sec. 19.81; furnishing facilities and assistance, 
Sec. 19.86; restrictions as to location, Sec. 19.131; registry of 
stills, Sec. 19.169; and maintenance and preservation of records, 
Sec. 19.723.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended, 1391, as amended 
(26 U.S.C. 5501-5505))

                         Qualification Documents



Sec. 19.822  Application.

    Each person, before commencing the business of manufacturing vinegar 
by the vaporizing process shall make written application to the regional 
director (compliance). The application will include:
    (a) The applicant's name and principal business address (including 
the plant address if different from the principal business address);
    (b) Description of the extent of the premises;
    (c) Description of the type of operations to be conducted; and
    (d) Description of the stills including the name and residence of 
the owner, the kind of still, its capacity and the purpose for which it 
was set up.

The applicant shall receive and approved application from the regional 
director (compliance) prior to commencing business.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended, (26 U.S.C. 5502))



Sec. 19.823  Changes after original qualification.

    When there is a change in the information recorded in the original 
approved application, the proprietor shall make a written notice of the 
change to the regional director (compliance). The notice will identify 
the change and the effective date of the change.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended, (26 U.S.C. 5502))



Sec. 19.824  Notice of permanent discontinuance of business.

    A proprietor who intends to permanently discontinue operations shall 
make written notice to the regional director (compliance). The 
proprietor shall include in the notice a statement of the status of the 
stills.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended, (26 U.S.C. 5502))

                       Construction and Equipment



Sec. 19.825  Construction and equipment.

    A proprietor of a vinegar plant shall construct and equip the 
vinegar plant so that--
    (a) The distilled spirits vapors that are separated by the 
vaporizing process from the mash produced by the manufacturer are 
condensed only by introducing them into the water or other liquid used 
in making the vinegar; and
    (b) The distilled spirits produced can be accurately accounted for 
and are secure from unlawful removal from the premises or from 
unauthorized use.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended, (26 U.S.C. 5502))

                            Plant Operations



Sec. 19.826  Authorized operations.

    Vinegar manufacturers qualified under this subpart are authorized 
to--
    (a) Produce vinegar only by the vaporizing process; and
    (b) Produce distilled spirits of 30 degrees of proof or less only 
for use in the manufacture of vinegar on the vinegar plant premises.



Sec. 19.827  Conduct of operations.

    Vinegar manufacturers qualified under this subpart may--
    (a) Separate by a vaporizing process the distilled spirits from the 
mash produced by him; and
    (b) Condense the distilled spirits vapors by introducing them into 
the water or other liquid used in making the vinegar.

[[Page 406]]



Sec. 19.828  Removals from the premises.

    No person shall remove from the vinegar plant premises vinegar or 
other fluid or material containing more than 2% alcohol by volume.

                                 Records



Sec. 19.829  Daily records.

    Each manufacturer of vinegar by the vaporizing process shall keep 
accurate and complete daily records of production operations that 
include--
    (a) The kind and quantity of fermenting or distilling materials 
received on the premises;
    (b) The kind and quantity of materials fermented or mashed;
    (c) The proof gallons of distilled spirits produced;
    (d) The proof gallons of distilled spirits used in the manufacture 
of vinegar;
    (e) The wine gallons of vinegar produced; and
    (f) The wine gallons of vinegar removed from the premises.

Separate government records need not be kept as long as commercial 
records contain all the required information.

                    Administrative and Miscellaneous



Sec. 19.830  Application of distilled spirits tax.

    The internal revenue tax must be paid on any distilled spirits 
produced in or removed from the premises of a vinegar plant in violation 
of law or this subpart.



                Subpart Y--Distilled Spirits For Fuel Use



Sec. 19.901  Scope of subpart.

    This subpart implements 26 U.S.C. 5181, which authorizes the 
establishment of distilled spirits plants solely for producing, 
processing and storing, and using or distributing distilled spirits to 
be used exclusively for fuel use. This subpart relates to the 
qualification and operation of such distilled spirits plants. Distilled 
spirits plants established under this subpart are designated as alcohol 
fuel plants.

(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))



Sec. 19.902  Waiver for alcohol fuel plants.

    All provisions of subparts A through X of this part and all 
provisions of 26 U.S.C. Chapter 51 are hereby waived except:
    (a) Any provision specifically incorporated by reference in this 
subpart and the cited authority for that provision;
    (b) Any provision requiring the payment of tax;
    (c) Any provisions dealing with penalty, seizure, or forfeiture 
which is applicable to distilled spirits; and
    (d) 26 U.S.C. 5181.

(Sec. 232, Pub. L. 93-224, 94 Stat. 278 (26 U.S.C. 5181))



Sec. 19.903  Alternate methods or procedures.

    The proprietor, on specific approval by the Director as provided in 
this paragraph, may use an alternate method or procedure in lieu of a 
method or procedure specifically prescribed in this subpart or subparts 
A through X of this part where the provisions of those subparts have 
been incorporated by reference in this subpart. The Director may approve 
an alternate method or procedure, subject to stated conditions, when he 
finds that--
    (a) Good cause has been shown for the use of the alternate method or 
procedure;
    (b) The alternate method or procedure is within the purpose of, and 
consistent with the effect intended by, the specifically prescribed 
method or procedure, and affords equivalent security to the revenue; and
    (c) The alternate method or procedure will not be contrary to any 
applicable provision of law, and will not result in an increase in cost 
to the Government or hinder the effective administration of this part. 
No alternate method or procedure relating to the giving of any bond, to 
the assessment, payment or collection of tax, will be authorized under 
this section. Where the proprietor desires to employ an alternate method 
or procedure, he shall submit a written application to do so to the 
regional director (compliance), for transmittal to the Director. The 
application will specifically describe the

[[Page 407]]

proposed alternate method or procedure, and will set forth the reasons 
therefor. The proprietor shall not employ any alternate method or 
procedure until the application has been approved. The proprietor shall, 
during the period of authorization of an alternate method or procedure, 
comply with the terms of the approved application. Authorization for any 
alternate method or procedure may be withdrawn whenever in the judgment 
of the Director the revenue is jeopardized or the effective 
administration of this part is hindered by the continuation of such 
authorization. As used in this section, alternate methods or procedures 
include alternate construction or equipment. The proprietor shall 
retain, as part of the records available for examination by AFT 
officers, any application approved by the Director under the provisions 
of this section.

(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))



Sec. 19.904  Emergency variations from requirements.

    The regional director (compliance) may approve construction, 
equipment, and methods of operation other than as specified in this 
part, where he finds that an emergency exists and the proposed 
variations from the specified requirements are necessary, and the 
proposed variations--
    (a) Will afford the security and protection to the revenue intended 
by the prescribed specifications;
    (b) Will not hinder the effective administration of this part; and
    (c) Will not be contrary to any applicable provisions of law. 
Variations from requirements granted under this section are conditioned 
on compliance with the procedures, conditions, and limitations with 
respect thereto set forth in the approval of the application. Failure to 
comply in good faith with such procedures, conditions, and limitations 
will automatically terminate the authority for such variations and the 
proprietor thereupon shall fully comply with the prescribed requirements 
of regulations from which the variations were authorized. Authority for 
any variation may be withdrawn whenever in the judgment of the regional 
director (compliance) the revenue is jeopardized or the effective 
administration of this part is hindered by the continuation of such 
variation. Where the proprietor desires to employ such variation, he 
shall submit a written application to do so to the regional director 
(compliance). The application will describe the proposed variations and 
set forth the reasons therefor. Variations will not be employed until 
the application has been approved, except when the emergency requires 
immediate action to correct a situation that is threatening to life or 
property. Such corrective action may then be taken concurrent with the 
filing of the application and notification of the regional director 
(compliance), via telephone. The proprietor shall retain, as part of the 
records available for examination by ATF officers, any application 
approved by the regional director (compliance) under the provisions of 
this section.

(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))



Sec. 19.905  Taxes.

    Distilled spirits may be withdrawn free of tax from the premises of 
an alcohol fuel plant exclusively for fuel use in accordance with this 
subpart. Payment of tax will be required in the case of diversion of 
spirits to beverage use or other unauthorized dispositions. The 
provisions of subpart C of this part are applicable to distilled spirits 
for fuel use as follows:
    (a) Imposition of tax liability (Secs. 19.21 through 19.25);
    (b) Assessment of tax (Secs. 19.31 and 19.32); and
    (c) Claims for tax (Secs. 19.41 and 19.44).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended (26 U.S.C. 5001); 
sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

[T.D. ATF-207, 50 FR 23682, June 5, 1985]



Sec. 19.906  Special (occupational) tax.

    (a) General rule. A proprietor of an alcohol fuel plant established 
under this subpart shall be subject to a special (occupational) tax as 
prescribed in subpart Ca of this part, and shall hold a separate special 
tax stamp to cover the alcohol fuel operations.
    (b) Exemption for small plants (effective July 1, 1989). On and 
after July 1, 1989,

[[Page 408]]

paragraph (a) of this section shall not apply to small alcohol fuel 
plants as defined in Sec. 19.907. If the annual production (including 
receipts) of a small plant exceeds 10,000 proof gallons in any calendar 
year, special tax is due as provided in Sec. 19.49(a)(1) for the special 
tax year (July 1 through June 30) commencing during that calendar year, 
regardless of whether an application for change of plant type under 
Sec. 19.921(a) has been filed or approved. If a medium or large plant 
produces 10,000 or fewer proof gallons (including receipts) in any 
calendar year, the plant shall be exempt from special tax under this 
paragraph, as for a small plant, for the special tax year (July 1 
through June 30) commencing during that calendar year, regardless of 
whether an application under Sec. 19.921(c) has been filed or approved.

(26 U.S.C. 5081)

[T.D. ATF-271, 53 FR 17543, May 17, 1988, as amended by T.D. ATF-285, 53 
FR 12609, Mar. 28, 1989; T.D. ATF-312, 56 FR 31077, July 9, 1991]

                               Definitions



Sec. 19.907  Meaning of terms.

    When used in this subpart, and in forms prescribed under this 
subpart, terms shall have the meaning given in this section. Words in 
the plural form include the singular and vice versa, and words 
indicating the masculine gender include the feminine. The terms 
``includes'' and ``including'' do not exclude things not enumerated 
which are in the same general class.
    Alcohol fuel plant or plant. An establishment qualified under this 
subpart solely for producing, processing and storing, and using or 
distributing distilled spirits to be used exclusively for fuel use.
    Alcohol fuel producer's permit. The document issued pursuant to 26 
U.S.C. 5181 authorizing the person named therein to engage in business 
as an alcohol fuel plant.
    ATF officer. An officer or employee of the Bureau of Alcohol, 
Tobacco and Firearms (ATF) authorized to perform any function relating 
to the administration or enforcement of this subpart.
    Bonded premises. The premises of an alcohol fuel plant where 
distilled spirits are produced, processed and stored, and used or 
distributed. Premises of small alcohol fuel plants, which are exempt 
from bonding under Sec. 19.912(b), shall be treated as bonded premises 
for purposes of this subpart.
    CFR. The Code of Federal Regulations.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC.
    Fuel alcohol. Distilled spirits which have been rendered unfit for 
beverage use at an alcohol fuel plant as provided in this subpart.
    Gallon or wine gallon. The liquid measure equivalent to the volume 
of 231 cubic inches.
    Person. An individual, trust, estate, partnership, association, 
company or corporation.
    Proof. The ethyl alcohol content of a liquid at 60 degrees 
Fahrenheit, stated as twice the percent of ethyl alcohol by volume.
    Proof gallon. 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.
    Proprietor. The person qualified under this subpart to operate the 
alcohol fuel plant.
    Region. A Bureau of Alcohol, Tobacco and Firearms region.
    Regional director (compliance). The principal regional official 
responsible for administering regulations in this subpart.
    Render unfit for beverage use. The addition to distilled spirits of 
materials which will not impair the quality of the spirits for fuel use 
as prescribed and authorized by the provisions of this subpart.
    Secretary. The Secretary of the Treasury or his delegate.
    Spirits or distilled spirits. That substance known as ethyl alcohol, 
ethanol, or spirits of wine in any form (including all dilutions and 
mixtures thereof from whatever source or by whatever process produced), 
but not fuel alcohol unless specifically stated. For purposes of this 
subpart, the term

[[Page 409]]

does not include spirits produced from petroleum, natural gas, or coal.
    This chapter. Title 27, Code of Federal Regulations, Chapter I [27 
CFR Chapter I].
    Transfer in bond. The transfer of spirits between alcohol fuel 
plants or the transfer of spirits to or from a distilled spirits plant 
qualified under 26 U.S.C. 5171 and an alcohol fuel plant.
    Type of plant. The following three types of alcohol fuel plants are 
recognized in this subpart:
    (a) Small plant. An alcohol fuel plant which produces (including 
receipts) not more than 10,000 proof gallons of spirits per calendar 
year.
    (b) Medium plant. An alcohol fuel plant which produces (including 
receipts) more than 10,000 and not more than 500,000 proof gallons of 
spirits per calendar year.
    (c) Large plant. An alcohol fuel plant which produces (including 
receipts) more than 500,000 proof gallons of spirits per calendar year.
    U.S.C. The United States Code.

                                 Permits



Sec. 19.910  Application for permit required.

    Any person wishing to establish an alcohol fuel plant shall first 
make application for and obtain an alcohol fuel producer's permit. The 
application for a permit will be on Form 5110.74. The application, in 
duplicate, will be submitted to the regional director (compliance). The 
description of stills on the approved application constitutes 
registration of stills as required by 27 CFR 196.45. Alcohol fuel 
producers' permits are continuing unless automatically terminated under 
Sec. 19.920, suspended or revoked as provided in Sec. 19.950, or 
voluntarily surrendered.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1355, as amended (26 U.S.C. 5179); 
sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))



Sec. 19.911  Criteria for issuance of permit.

    In general, an alcohol fuel producer's permit will be issued to any 
person who completes the required application for permit and who 
furnishes the required bond (if any). However, the regional director 
(compliance) may institute proceedings for the denial of the 
application, if the regional director (compliance) determines that:
    (a) The applicant (including, in the case of a corporation, any 
officer, director, or principal stockholder, and in the case of a 
partnership, a partner) is, by reason of business experience, financial 
standing, or trade connections, not likely to maintain operations in 
compliance with 26 U.S.C. Chapter 51, or regulations issued thereunder; 
or
    (b) The applicant has failed to disclose any material information 
required, or has made any false statement, as to any material fact, in 
connection with the application; or
    (c) The premises on which the applicant proposes to conduct the 
operations are not adequate to protect the revenue. The procedures 
applicable to denial of applications are set forth in 27 CFR Part 71.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271); 
sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))



Sec. 19.912  Small plants.

    Persons wishing to establish a small plant shall apply for a permit 
as provided in this section. Except as provided in paragraph (c) of 
Sec. 19.913, operations may not be commenced until the permit has been 
issued.
    (a) Application for permit. The application (Form 5110.74) shall be 
submitted to the regional director (compliance) and shall set forth the 
following information:
    (1) Name and mailing address of the applicant, and the location of 
the alcohol fuel plant if not apparent from the mailing address;
    (2) A diagram of the plant premises and a statement as to the 
ownership of the premises (if the premises are not owned by the 
proprietor, the owner's consent to access by ATF officers must be 
furnished);
    (3) A description of all stills and a statement of their maximum 
capacity;
    (4) The materials from which spirits will be produced; and
    (5) A description of the security measures to be used to protect 
premises, buildings and equipment where spirits are produced, processed, 
and stored.

[[Page 410]]

    (b) Bond. No bond is required for small plants.

(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))



Sec. 19.913  Action on applications to establish small plants.

    (a) Receipt by the regional director (compliance)--(1) Notice of 
receipt. Within 15 days of receipt of the application, the regional 
director (compliance) shall send a written notice of receipt to the 
applicant. The notice will include a statement as to whether the 
application meets the requirements of Sec. 19.912. If the application 
does not meet those requirements, the application will be returned and a 
new 15-day period will commence upon receipt by the regional director 
(compliance) of the amended or corrected application.
    (2) Failure to give notice. If the required notice of receipt is not 
sent, and the applicant has a receipt indicating that the regional 
director (compliance) has received the application, the 45-day period 
provided for in paragraphs (b) and (c) of this section will commence on 
the fifteenth day after the date the regional director (compliance) 
received the application.
    (3) Limitation. The provisions of subparagraphs (1) and (2) of this 
section apply only to:
    (i) The first application submitted with respect to any one small 
plant in any calendar quarter; and
    (ii) An amended or corrected first application.
    (b) Determination by the regional director (compliance). Within 45 
days from the date the regional director (compliance) sent the applicant 
a notice of receipt of a completed application, the regional director 
(compliance) shall either (1) issue the permit, or (2) give notice in 
writting to the applicant, stating in detail the reason that a permit 
will not be issued. Denial of an application will not prejudice any 
further application for a permit made by the same applicant.
    (c) Presumption of approval. If, within 45 days from the date of the 
notice to the applicant of receipt of a completed application, the 
regional director (compliance) has not notified the applicant of 
issuance of the permit or denial of the application, the application 
shall be deemed to have been approved and the applicant may proceed if a 
permit had been issued.

(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))



Sec. 19.914  Medium plants.

    Any person wishing to establish a medium plant shall make 
application for and obtain in alcohol fuel producer's permit. Operations 
may not be commenced until the application has been approved and the 
permit issued.
    (a) Application for permit. The application (Form 5110.74) shall be 
submitted to the regional director (compliance) and shall set forth the 
following information:
    (1) The information required by Sec. 19.912 (a);
    (2) Statement of maximum total proof gallons of spirits that will be 
produced and received during a calendar year:
    (3) Information identifying the principal persons involved in the 
business and a statement as to whether the applicant or any such person 
has ever been convicted of a felony or misdemeanor under Federal or 
State law; and,
    (4) Statement of the amount of funds invested in the business and 
the source of those funds.
    (b) Bond. A bond of sufficient penal sum, as prescribed in 
Sec. 19.957, is required. The bond must be submitted on Form 5110.56 and 
approved before a permit may be issued.

(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))



Sec. 19.915  Large plants.

    Any person wishing to establish a large plant shall make application 
for and obtain an alcohol fuel producer's permit. Operations may not be 
commenced until the application has been approved and the permit issued.
    (a) Application for permit. The application (Form 5110.74) shall be 
submitted to the regional director (compliance) and shall set forth the 
following information:
    (1) The information required by Sec. 19.912(a);

[[Page 411]]

    (2) Statement of the maximum proof gallons of spirits that will be 
produced and received during a calendar year;
    (3) Information identifying the principal persons involved in the 
business and a statement as to whether the applicant or any such person 
has ever been convicted of a felony or misdemeanor under Federal or 
State law;
    (4) Statement of the amount of funds invested in the business and 
the source of those funds;
    (5) Statement of the type of business organization and of the 
persons interested in the business, supported by the items of 
information listed in Sec. 19.916; and,
    (6) List of the offices, the incumbents of which are authorized by 
the articles of incorporation or the board of directors to act on behalf 
of the proprietor or to sign the proprietor's name.
    (b) Bond. A bond of sufficient penal sum, as prescribed in 
Sec. 19.957, is required. The bond must be submitted on Form 5110.56 and 
approved before a permit may be issued.

(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))



Sec. 19.916  Organizational documents.

    The supporting information required by paragraph (a)(5) of 
Sec. 19.915, includes, as applicable, copies of--
    (a) Corporate documents. (1) Corporate charter or certificate of 
corporate existence or incorporation.
    (2) List of officers and directors, showing their names and 
addresses. However, do not list officers and directors who have no 
responsibilities in connection with the operation of the alcohol fuel 
plant.
    (3) Certified extracts or digests of minutes of meetings of board of 
directors, authorizing certain individuals to sign for the corporation.
    (4) Statement showing the number of shares of each class of stock or 
other evidence of ownership, authorized and outstanding, and the voting 
rights of the respective owners or holders.
    (b) Statement of interest. (1) Names and addresses of the 10 persons 
having the largest ownership or other interest in each of the classes of 
stock in the corporation, or other legal entity, and the nature and 
amount of the stockholding or other interest of each, whether the 
interest appears in the name of the interested party or in the name of 
another for him. If a corporation is wholly owned or controlled by 
another corporation, those persons of the parent corporation who meet 
the above standards are considered to be the persons interested in the 
business of the subsidiary, and the names thereof need be furnished only 
upon request of the regional director (compliance).
    (2) In the case of an individual owner or partnership, the name and 
address of each person interested in the plant, whether the interest 
appears in the name of the interested party or in the name of another 
for that person.
    (c) Availability of additional documents. The originals of documents 
required to be submitted under this section and additional items 
required under Sec. 19.918 such as the articles of incorporation, 
bylaws, State certificate authorizing operations, or articles of 
partnership or association (in the case of a partnership where required 
by State law) shall be made available to any ATF officer upon request.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271); 
sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))



Sec. 19.917  Powers of attorney.

    The proprietor of a large plant shall execute and file with the 
regional director (compliance) a Form 1534 (5000.8), in accordance with 
instructions on the form, for each person authorized to sign or act on 
behalf of the proprietor (Not required for persons whose authority is 
furnished in the application).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))



Sec. 19.918  Information already on file and supplemental information.

    If any of the information required by Secs. 19.912 through 19.916 is 
on file with the regional director (compliance), that information, if 
accurate and complete, may be incorporated by reference and made a part 
of the application. When required by the regional director (compliance), 
the applicant shall furnish as a part of the application for permit, 
additional information as may

[[Page 412]]

be necessary to determine whether the application should be approved.

(Sec. 232, Pub. L. 96-223, 94 Stat. 278, (26 U.S.C. 5181))

               Changes Affecting Applications and Permits



Sec. 19.919  Changes affecting applications and permits.

    When there is a change relating to any of the information contained 
in, or considered a part of, the application on Form 5110.74, the 
proprietor shall within 30 days file with the regional director 
(compliance), a written notice, in duplicate, of such change. Where the 
change affects the terms and conditions of the permit the proprietor 
shall within 30 days (except as otherwise provided in this subpart), 
file with the regional director (compliance), in duplicate, an amended 
application on Form 5110.74.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended 
(26 U.S.C. 5172, 5271); sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 
U.S.C. 5181))



Sec. 19.920  Automatic termination of permits.

    (a) Permits not transferable. Permits issued under this subpart 
shall not be transferred. In the event of the lease, sale, or other 
transfer of such a permit, or of the authorized operations, the permit 
automatically terminates.
    (b) Corporations. In the case of a corporation holding a permit 
under this subpart, if actual or legal control of the permittee 
corporation changes, directly or indirectly, whether by reason of change 
in stock ownership or control (in the permittee corporation or in any 
other corporation), by operation of law, or in any other manner, the 
permit may remain in effect until the expiration of 30 days after the 
change, whereupon the permit will automatically terminate. However, if 
operations are to be continued after the change in control, and an 
application for a new permit is filed within 30 days of the change, then 
the outstanding permit may remain in effect until final action is taken 
on the new application. When final action is taken on the application, 
the outstanding permit automatically terminates.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))



Sec. 19.921  Change in type of alcohol fuel plant.

    (a) Small plants. If the proprietor of a small plant wishes to 
increase production (including receipts) to a level in excess of 10,000 
proof gallons of spirits per calendar year, the proprietor shall first 
furnish a bond and obtain an amended permit by filing application under 
Sec. 19.914 or Sec. 19.915, as applicable. Information filed with the 
original application for permit need not be resubmitted, but may be 
incorporated by reference in the new application.
    (b) Medium plants. Where the proprietor of a medium plant intends to 
increase production (including receipts) above 500,000 proof gallons of 
spirits per calendar year, the proprietor shall first obtain an amended 
permit by filing an application under Sec. 19.915. A new or 
strengthening bond may be required (see Sec. 19.956). Information 
already on file may be incorporated by reference in the new application.
    (c) Curtailment of activities. Proprietors of large or medium plants 
who have curtailed operations to a level where they are eligible to be 
requalified as medium or small plants may, on approval of a letter of 
application by the regional director (compliance), be relieved from the 
additional requirements incident to their original qualification. In the 
case of a change to small plant status, termination of the bond and 
relief of the surety from further liability shall be as provided in 
subpart H of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271); 
sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))



Sec. 19.922  Change in name of proprietor.

    Where there is to be a change in the individual, firm, or corporate 
name, the proprietor shall, within 30 days of the change, file an 
application to

[[Page 413]]

amend the permit; a new bond or consent of surety is not required.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended 
(26 U.S.C. 5172, 5271); sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 
U.S.C. 5181))



Sec. 19.923  Changes in officers, directors, or principal persons.

    Where there is any change in the list of officers, directors, or 
principal persons, furnished under the provisions of Sec. 19.914, 
Sec. 19.915 or Sec. 19.916, the proprietor shall submit, within 30 days 
of any such change, a notice in letter form stating the changes in 
officers, directors, or principal persons. A new list reflecting the 
changes will be submitted with the letter notice.

(Sec. 232, Pub. L. 96-233, 94 Stat. 278 (26 U.S.C. 5181))



Sec. 19.924  Change in proprietorship.

    (a) General. If there is a change in the proprietorship of a plant 
qualified under this part, the outgoing proprietor shall comply with the 
requirements of Sec. 19.945 and the successor shall, before commencing 
operations, apply for and obtain a permit and file the required bond (if 
any) in the same manner as a person qualifying as the proprietor of a 
new plant.
    (b) Fiduciary. A successor to the proprietorship of a plant who is 
an administrator, executor, receiver, trustee, assignee or other 
fiduciary, shall comply with the applicable provisions of 
Sec. 19.186(b).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172))



Sec. 19.925  Continuing partnerships.

    If under the laws of the particular State, the partnership is not 
immediately terminated on death or insolvency of a partner, but 
continues until the winding up of the partnership affairs is completed, 
and the surviving partner has the exclusive right to the control and 
possession of the partnership assets for the purpose of liquidation and 
settlement, the surviving partner may continue to operate the plant 
under the prior qualification of the partnership. However, in the case 
of a large or a medium plant, a consent of surety must be filed, wherein 
the surety and the surviving partner agree to remain liable on the bond. 
If the surviving partner acquires the business on completion of the 
settlement of the partnership, he shall qualify in his own name from the 
date of acquisition, as provided in Sec. 19.924(a). The rule set forth 
in this section will also apply where there is more than one surviving 
partner.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended (26 U.S.C. 5172); 
sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))



Sec. 19.926  Change in location.

    Where there is a change in the location of the plant or of the area 
included within the plant premises, the proprietor shall file an 
application to amend the permit and, if a bond is required, either a new 
bond or a consent of surety on Form 1533 (5000.18). Operation of the 
plant may not be commenced at the new location prior to issuance of the 
amended permit.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended 
(26 U.S.C. 5172, 5271); sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 
U.S.C. 5173); sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

                          Alternate Operations



Sec. 19.930  Alternating proprietorship.

    (a) General. (1) An alcohol fuel plant, or a part thereof, may be 
operated alternately by proprietors if--
    (i) The alcohol fuel plant and the proprietors are otherwise 
qualified under the provisions of this subpart, and
    (ii) The necessary operations bonds (if any) and applications 
covering such operations have been filed with and approved by the 
regional director (compliance).
    (2) Where alternating proprietorship is to be limited to a part of a 
plant, that part must be suitable for qualification as a separate plant.
    (b) Qualifying Documents. Each person desiring to operate an alcohol 
fuel plant as an alternating proprietor shall file with the regional 
director (compliance):
    (1) An application on Form 5110.74 to cover the proposed alternation 
of premises.
    (2) Diagram of premises, in duplicate, showing the arrangement under 
which

[[Page 414]]

the premises will be operated. Diagrams will be prepared in accordance 
with paragraph (c) of this section.
    (3) Evidence of existing operations bond (if any), consent of 
surety, or a new operations bond to cover the proposed alternation of 
premises.
    (4) When required by the regional director (compliance), additional 
information as may be necessary to determine whether the application 
should be approved.
    (c) Diagram of premises. Each person filing an application for 
operation of a plant as an alternating proprietor shall submit a diagram 
of the premises. Where operations by alternating proprietors are limited 
to parts of a plant, a diagram which designates the parts of the plant 
that are to be alternated will be submitted. A diagram will be submitted 
for each arrangement under which the premises will be operated. The 
diagram will be in sufficient detail to establish the boundaries of the 
plant or any part thereof which is to be alternated.
    (d) Alternation Journal. Once the applications have been approved 
and initial operations conducted thereunder, the plant, or parts 
thereof, may be alternated. The outgoing and incoming proprietor shall 
enter into an alternation journal the following information:
    (1) Name or trade name;
    (2) Alcohol fuel plant permit number;
    (3) Date and time of alternation; and
    (4) Quantity of spirits transferred in proof gallons.

The alternation journal will remain in the possession of the incoming 
proprietor until the premises are again alternated whereupon it will be 
transferred to the new incoming proprietor.
    (e) Commencement of operations. Except for spirits transferred to 
the incoming proprietor, the outgoing proprietor shall remove all 
spirits from areas, rooms, or buildings to be alternated, prior to the 
effective date and time shown in the alternation journal. Fuel alcohol 
may be either transferred to the incoming proprietor or may be retained 
by the outgoing proprietor in areas, rooms, or buildings to be 
alternated when the areas, rooms, or buildings are secured with locks, 
the keys to which are in the custody of the outgoing proprietor. 
Whenever operation of the areas, rooms, or buildings is to be resumed by 
a proprietor following suspension of operations by an alternating 
proprietor, the outgoing proprietor (except proprietors of small plants) 
must furnish a consent of surety on Form 1533 (5000.18) to continue in 
effect the operations bond covering his operations. This is to be done 
prior to alternating the premises.
    (f) Records. Each proprietor shall maintain separate records and 
submit separate reports. All transfers of spirits will be reflected in 
the records of each proprietor. The quantity of spirits and fuel alcohol 
transferred will be shown in the production and disposition records of 
the outgoing proprietor. The quantity of spirits transferred will be 
shown in the receipt record of the incoming proprietor. Each outgoing 
and incoming proprietor shall include spirits transferred in 
determinations of plant size and bond amounts. The provisions of 
Sec. 19.921 regarding change in type of plant are applicable to each 
proprietor. Entries into these records will be in the manner prescribed 
in Secs. 19.982, 19.984, and 19.986.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended 
(26 U.S.C. 5172, 5271; sec. 805(a), Pub. 96-39, 93 Stat. 275 (26 U.S.C. 
5171); sec. 232 Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

                  Permanent Discontinuance of Business



Sec. 19.945  Notice of permanent discontinuance.

    A proprietor who permanently discontinues operations as an alcohol 
fuel plant shall, after completion of the operations, file a letterhead 
notice with the regional director (compliance). The notice shall be 
accompanied--
    (a) By the alcohol fuel producer's permit, and by the proprietor's 
request that such permit be canceled;
    (b) By a written statement disclosing, as applicable, whether (1) 
all spirits (including fuel alcohol) have been lawfully disposed of, and 
(2) any spirits are in transit to the premises; and

[[Page 415]]

    (c) By a report covering the discontinued operations (the report 
shall be marked ``Final Report'').

(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1370, as amended 
(26 U.S.C. 5172, 5271); sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 
U.S.C. 5181))

                   Suspension or Revocation of Permits



Sec. 19.950  Suspension or revocation.

    Whenever the regional director (compliance) has reason to believe 
that any person holding an alcohol fuel producer's permit--
    (a) Has not in good faith complied with the applicable provisions of 
26 U.S.C. Chapter 51, or regulations issued thereunder; or
    (b) Has violated conditions of the permit; or
    (c) Has made any false statements as to any material fact in the 
application therefor; or
    (d) Has failed to disclose any material information required to be 
furnished; or
    (e) Has violated or conspired to violate any law of the United 
States relating to intoxicating liquor or has been convicted of any 
offense under Title 26, U.S.C. punishable as a felony or of any 
conspiracy to commit such offense; or
    (f) Has not engaged in any of the operations authorized by the 
permit for a period of more than 2 years; the regional director 
(compliance) may institute proceedings for the revocation or suspension 
of the permit in accordance with the procedures set forth in 27 CFR part 
71.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))

                                  Bonds



Sec. 19.955  Bonds.

    An operations bond is required for medium and large plants. The bond 
will be executed, in duplicate, on Form 5110.56. Surety bonds may be 
given only with corporate sureties holding certificates of authority 
from, and subject to the limitations prescribed by, the Secretary as set 
forth in the current revision of Treasury Department Circular 570. 
However, in lieu of corporate surety the proprietor may pledge and 
deposit as surety for his bond, securities which are transferable and 
are guaranteed as to both interest and principal by the United States, 
in accordance with the provisions of 31 CFR part 225. The regional 
director (compliance) will not release such securities until liability 
under the bond for which they were pledged has been terminated.

(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173); CH. 390, 
Pub. L. 80-280, 61 Stat. 648, 650 (31 U.S.C. 9301, 9303, 9304, 9306); 
sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))



Sec. 19.956  Amount of bond.

    The penal sum of the bond is based on the total quantity of 
distilled spirits to be produced (including receipts) during a calendar 
year. If the level of production and/or receipts at the plant is to be 
increased, and the bond is not in the maximum penal sum, a new or 
strengthening bond shall be obtained.
    (a) Medium plants. A medium plant which will produce (including 
receipts) between 10,000 and 20,000 proof gallons of spirits per year 
requires a bond in the amount of $2,000. For each additional 10,000 
proof gallons (or fraction thereof), the bond amount is increased 
$1,000. The maximum bond for a medium plant is $50,000.
    (b) Large plants. The minimum bond for a large plant is $52,000 
(more than 500,000, but not more than 510,000 proof gallons annual 
production (including receipts)). For each additional 10,000 (or 
fraction) proof gallons, the amount of the bond is increased $2,000. The 
maximum bond for a large plant is $200,000 (more than 1,240,000 proof 
gallons).

(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173); sec. 232, 
Pub. L. 96-233, 94 Stat. 278 (26 U.S.C. 5181))



Sec. 19.957  Instructions to compute bond penal sum.

    (a) Medium plants. To find the required amount of your bond, 
estimate the total proof gallons of spirits to be produced and received 
in a calendar year. The amount of the bond is $1,000 for each 10,000 
proof gallons (or fraction), subject to a minimum of $2,000 and a 
maximum of $50,000. The following table provides some examples:

[[Page 416]]



             Annual Production and Receipts in Proof Gallons
------------------------------------------------------------------------
                                                       But not   Amount
                      More than                         over     of bond
------------------------------------------------------------------------
10,000..............................................    20,000    $2,000
20,000..............................................    30,000     3,000
90,000..............................................   100,000    10,000
190,000.............................................   200,000    20,000
490,000.............................................   500,000    50,000
------------------------------------------------------------------------

    (b) Large plants. To find the required amount of your bond, estimate 
the total proof gallons of spirits to be produced and received in a 
calendar year. The amount of the bond is $50,000 plus $2,000 for each 
10,000 proof gallons (or fraction) over 500,000. The following table 
provides some examples:

             Annual Production and Receipts in Proof Gallons
------------------------------------------------------------------------
                                                      But not    Amount
                     More than                          over     of bond
------------------------------------------------------------------------
500,000............................................    510,000   $52,000
510,000............................................    520,000    54,000
740,000............................................    750,000   100,000
990,000............................................  1,000,000   150,000
1,240,000..........................................  .........   200,000
------------------------------------------------------------------------


(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173; sec. 232, 
Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))



Sec. 19.958  Conditions of bond.

    The bond shall be conditioned on payment of all taxes (including any 
penalties and interest) imposed by 26 U.S.C. Chapter 51, on compliance 
with all requirements of law and regulations, and on payment of all 
penalties incurred or fines imposed for violations of any such 
provisions.

(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173); sec. 232, 
Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))



Sec. 19.959  Additional provisions with respect to bonds.

    Subpart H of this part contains further provisions applicable to 
bonds which, where not inconsistent with this subpart, are applicable to 
bonds of alcohol fuel plants.

                  Construction, Equipment and Security



Sec. 19.965  Construction and equipment.

    Buildings and enclosures where distilled spirits will be produced, 
processed, or stored shall be constructed and arranged to enable the 
proprietor to maintain security adequate to deter diversion of the 
spirits. Distilling equipment shall be constructed to prevent 
unauthorized removal of spirits, from the point where distilled spirits 
come into existence until production is complete and the quantity of 
spirits has been determined. Tanks and other vessels for containing 
spirits shall be equipped for locking and be constructed to allow for 
determining the quantities of spirits therein.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178))



Sec. 19.966  Security.

    Proprietors shall provide security adequate to deter the 
unauthorized removal of spirits. The proprietor shall store spirits 
either in a building, a storage tank, or within an enclosure, which the 
proprietor will keep locked when operations are not being conducted.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178); 
sec. 806, Pub. L. 96-39, 93 Stat. 279 (26 U.S.C. 5202))



Sec. 19.967  Additional security.

    If the regional director (compliance) finds that security is 
inadequate to deter diversion of the spirits, as may be evidenced by the 
occurrence of break-ins or by diversion of spirits to unauthorized 
purposes, additional security measures may be required. Such additional 
measures may include, but are not limited to, the following:
    (a) The erection of a fence around the plant or the alcohol storage 
facility;
    (b) Flood lights;
    (c) Alarm systems;
    (d) Watchman services; or,
    (e) Locked or barred windows.

The exact additional security requirements would depend on the extent of 
the security problems, the volume of alcohol produced, the risk to tax 
revenue, and safety requirements.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1353, as amended (26 U.S.C. 5178); 
sec. 806, Pub. L. 96-39, 93 Stat. 279 (26 U.S.C. 5202))

[[Page 417]]

                               Supervision



Sec. 19.970  Supervision of operations.

    The regional director (compliance) may assign ATF officers to 
premises of plants qualified under this subpart. The authorities of ATF 
officers, provided in Secs. 19.81 through 19.84, and the requirement 
that proprietors furnish facilities and assistance to ATF officers, 
provided in Sec. 19.86, apply to plants qualified under this subpart. 
The provisions of Sec. 19.75 of this part pertaining to the assignment 
of ATF officers and hours of operation, to the extent deemed necessary 
by the regional director (compliance), are applicable to plants 
qualified under this subpart.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1320, as amended, 1356, as amended, 
1357, as amended, 1358, as amended, 1375, as amended, 1396, as amended 
(26 U.S.C. 5006, 5201, 5203, 5204, 5213, 5555); sec. 806, Pub. L. 96-39, 
93 Stat. 279 (26 U.S.C. 5202); sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 
U.S.C. 5207))

                         Accounting for Spirits



Sec. 19.980  Gauging.

    (a) Equipment and method. Proprietors shall gauge spirits by 
accurately determining the proof and quantity of spirits. The proof of 
the spirits shall be determined using a glass cylinder, hydrometer, and 
thermometer. Proprietors may account for fuel alcohol in wine gallons. 
Unless proprietors desire to do so, it is not necessary to determine the 
proof of fuel alcohol manufactured, on-hand, or removed. The Proprietor 
may determine quantity either by volume or weight. A tank or receptacle 
with a calibrated sight glass installed, a calibrated dipstick, 
conversion charts, meters (subject to approval by the regional director 
(compliance)), or other devices or methods approved by the Director, may 
be used to determine quantity by volume. The proprietor shall ensure 
that hydrometers, thermometers, and other equipment used to determine 
proof, volume, or weight are accurate. From time to time ATF officers 
shall verify the accuracy of such equipment. Detailed procedures for 
gauging spirits are provided in 27 CFR part 30.
    (b) When Required. Proprietors shall guage spirits and record the 
results in their records at the following times:
    (1) On completion of production of distilled spirits;
    (2) On receipt of spirits at the plant;
    (3) Prior to the addition of materials to render the spirits unfit 
for beverage use;
    (4) Before withdrawal from plant premises or other disposition of 
spirits (including fuel alcohol); and
    (5) When spirits are to be inventoried.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended, 1358, as amended 
(26 U.S.C. 5201, 5204))



Sec. 19.981  Inventories.

    Proprietors shall take actual physical inventory of all spirits 
(including fuel alcohol) on bonded premises at least once during each 
period for which a report is required by Sec. 19.988. The results of the 
inventory shall be posted in the applicable records required by 
Sec. 19.982.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201))



Sec. 19.982  Records.

    (a) All plants. All proprietors shall maintain records with respect 
to: (1) The quantity and proof of spirits produced; (2) The proof 
gallons of spirits on-hand and received; (3) The quantities and types of 
materials added to render the spirits unfit for beverage use; (4) The 
quantity of fuel alcohol manufactured; and, (5) All dispositions of 
spirits (including fuel alcohol). Fuel alcohol may be recorded in wine 
gallons.
    (b) Medium and large plants. Proprietors of medium and large plants 
shall also record the kind and quantity of materials used to produce 
spirits.
    (c) General requirements. (1) The records must contain sufficient 
information to allow ATF officers to determine the quantities of spirits 
produced, received, stored, or processed and to verify that all spirits 
have been lawfully disposed of or used.
    (2) Records which the proprietor prepares for other purposes (i.e. 
invoices or other commercial records) may be used to meet the record 
requirements of this subpart, so long as they show the required 
information.

[[Page 418]]

    (3) Where the format or arrangement of the record is such that the 
information is not clearly or accurately reflected, the regional 
director (compliance) may require a format or arrangement which will 
clearly and accurately reflect the information.
    (4) Entries required by this subpart to be made into records will be 
made on the day on which the operation or transaction occurs. However, 
these entries may be deferred until the third business day succeeding 
the day on which the operation or transaction occurs when the proprietor 
prepares commercial records concurrent with the individual operation or 
transaction.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))



Sec. 19.983  Spirits rendered unfit for beverage use in the production process.

    Where spirits are rendered unfit for beverage use before removal 
from the production system, the proprietor shall enter into the 
production records, in addition to the quantity and proof of spirits 
produced, the kind and quantity of materials added to each lot of 
spirits. In such a case, a separate record under Sec. 19.985 is not 
required. The quantity of spirits produced will be determined by 
substracting the quantity of materials added to render the spirits unfit 
for beverage use from the quantity of fuel alcohol produced and 
multiplying the resulting figure by the proof of each lot of spirits. 
The proprietor shall determine the proof of each lot of spirits. The 
proprietor shall procure a representative sample of each lot, prior to 
the addition of any material for rendering the spirits unfit for 
beverage use, and proof the sample in accordance with the provisions of 
Sec. 19.980(a). This paragraph applies to in-line addition of materials 
and to systems in which, before any spirits come off the production 
equipment, the proprietor adds materials for rendering the spirits unfit 
for beverage use to the first receptacle where spirits are to be 
deposited.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207); sec. 232, Pub. 
L. 96-222, 94 Stat. 278 (26 U.S.C. 5181))



Sec. 19.984  Record of spirits received.

    The proprietor's copy of the consignor's invoice or other document 
received with the shipment, on which the proprietor has noted the date 
of receipt and quantity received, constitutes the required record.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))



Sec. 19.985  Record of spirits rendered unfit for beverage use.

    The proprietor shall record the kind and quantity of materials added 
to render each lot of spirits unfit for beverage use and the quantity of 
fuel alcohol manufactured (which may be given in wine gallons).

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))



Sec. 19.986  Record of dispositions.

    (a) Fuel alcohol removed. For fuel alcohol removed from the plant 
premises, the commercial record or other document required by 
Sec. 19.997 constitutes the required record.
    (b) Spirits transferred. For spirits transferred in bond (including 
transfers from small plants) to a distilled spirits plant qualified 
under subpart G of this part or to another alcohol fuel plant, the 
commercial invoice or other document required by Secs. 19.508 and 19.999 
constitutes the required record.
    (c) Other dispositions. For spirits or fuel alcohol used or 
otherwise disposed of (e.g., lost, destroyed, redistilled) on the 
premises of the alcohol fuel plant, the proprietor shall maintain a 
record as follows:
    (1) The quantity of spirits (in proof gallons) or fuel alcohol (in 
gallons) and the date of disposition; and,
    (2) The purpose for which used or the nature of the other 
disposition.
    (d) Separate records. Records for dispositions of fuel alcohol and 
spirits will be maintained separately.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207); sec. 232, Pub. 
L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))



Sec. 19.987  Maintenance and retention of records.

    The proprietor shall retain at the plant where an operation or 
transaction occurs the records required by

[[Page 419]]

this subpart for a period of not less than three years from the date 
thereof or from the date of the last entry made thereon, whichever is 
later. Whenever any record because of its condition becomes unsuitable 
for its intended or continued use the proprietor shall reproduce the 
record by a process approved by the regional director (compliance) under 
the provisions of Sec. 19.725. The records shall be available for 
inspectin by any ATF officer during business hours. For records 
maintained on data processing equipment, the provisions of Sec. 19.723 
apply.

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))



Sec. 19.988  Reports.

    Each proprietor shall submit an annual report of their operations, 
Form 5110.75, for the calendar year ending December 31. The proprietor 
shall submit this report to the regional director (compliance) by 
January 30 following the end of the calendar year.

(Sec. 807, Pub. L. No. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

[T.D. ATF-327, 57 FR 32178, July 21, 1992]

                             Redistillation



Sec. 19.990  Redistillation of spirits or fuel alcohol received on the plant premises.

    (a) Receipts for redistillation. Proprietors of alcohol fuel plants 
may receive and redistill spirits. Fuel alcohol may be received on the 
premises of an alcohol fuel plant for the recovery by redistillation of 
the spirits contained therein. Spirits and fuel alcohol received for 
redistillation will be identified as such and will be kept separate from 
other spirits and fuel alcohol on the premises until redistilled. 
Spirits originally produced by the plant and subsequently recovered by 
redistillation will not be included in determinations of plant size and 
bond amounts. Spirits riginally produced at other plants and 
subsequently recovered by redistillation will be included in 
determinations of plant size and bond amounts.
    (b) Recordkeeping. (1) The proprietor shall record in a separate 
record the following information for spirits and fuel alcohol received 
for redistillation.
    (i) Date received;
    (ii) Whether fuel alcohol or spirits;
    (iii) Quantity received;
    (iv) From whom received;
    (v) Reason for redistillation;
    (vi) Date redistilled; and
    (vii) Quantity of spirits recovered by redistillation.
    (2) The proprietor's commercial record required for spirits by 
Sec. 19.999 or for fuel alcohol by Sec. 19.997 and any other commercial 
record received covering spirits or fuel alcohol to be redistilled will 
be filed separately from other records. These records may be used in 
lieu of the record required by paragraph (b)(1) of this section when any 
missing information required to be shown has been entered upon the 
commercial record by the proprietor.
    (c) Status. Spirits recovered by redistillation will be treated the 
same as spirits which have not been redistilled. All provisions of this 
subpart and 26 U.S.C. Chapter 51 (including liability for tax) 
applicable to spirits when originally produced are applicable to spirits 
recovered by redistillation.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1365, as amended, 1370, as amended 
(26 U.S.C. 5223, 5243); sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 
U.S.C. 5181))

                     Uses, Withdrawals and Transfers



Sec. 19.995  Use on premises.

    Spirits may be used as a fuel on the premises of the alcohol fuel 
plant at which produced and need not be rendered unfit for beverage use. 
Proprietors using spirits on the plant premises shall keep the 
applicable records concerning such dispositions as provided in 
Sec. 19.986(c).

(Sec. 232, Pub. L. 96-223, 94 Stat. 278, (26 U.S.C. 5181))



Sec. 19.996  Withdrawal of spirits.

    Before spirits may be withdrawn from the premises of an alcohol fuel 
plant, they must be rendered unfit for beverage use as provided in this 
subpart. Spirits rendered unfit for beverage use (fuel alcohol) may be 
withdrawn free of tax from plant premises exclusively for fuel use.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 5214); 
sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

[[Page 420]]



Sec. 19.997  Withdrawal of fuel alcohol.

    For each shipment or other removal of fuel alcohol from the plant 
premises the consignor shall prepare a commercial invoice, sales slip, 
or similar document. The consignor shall enter on the document the date, 
the quantity of fuel alcohol removed, a description of the shipment (for 
example, number and size of containers, tank truck, etc.), and the name 
and address of the consignee. The consignor shall retain a copy of the 
document as a record.

(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))



Sec. 19.998  Transfer in bond of spirits.

    (a) Transfer between alcohol fuel plants. A proprietor may remove 
spirits from the bonded premises of an alcohol fuel plant (including the 
premises of a small plant) for transfer in bond to another alcohol fuel 
plant. Bulk conveyances in which spirits are transferred shall be 
secured with locks, seals or other devices as prescribed by Sec. 19.96. 
The spirits need not be rendered unfit for beverage use prior to 
transfer. Spirits so transferred may not be withdrawn, used, sold, or 
otherwise disposed of for other than fuel use.
    (b) Transfer to or from other distilled spirits plants. Spirits (not 
including spirits produced from petroleum, natural gas, or coal) may be 
transferred in bond from distilled spirits plants qualified under 
subpart G of this part to alcohol fuel plants. Alcohol fuel plants may 
transfer spirits in bond to distilled spirits plants qualified under 
subpart G of this part. Bulk conveyances in which spirits are 
transferred shall be secured with locks, seals, or other devices as 
prescribed by Sec. 19.96. The spirits need not be rendered unfit for 
beverage use prior to transfer. Spirits so transferred may not be 
withdrawn, used, sold, or otherwise disposed of for other than fuel use.
    (c) Transfer procedures. The procedures in Secs. 19.999 through 
19.1001 pertain only to the transfer of spirits between alcohol fuel 
plants. The procedures in Secs. 19.506 through 19.509 and 19.770 pertain 
to the transfer of spirits from an alcohol fuel plant to a distilled 
spirits plant qualified under 26 U.S.C. 5171. The alcohol fuel plant 
transferring in bond spirits filled into portable containers to the 
bonded premises of a distilled spirits plant qualified under 26 U.S.C. 
5171 shall mark each container as required by Sec. 19.1008(b). The 
procedures in Secs. 19.508, 19.510 and 19.770 pertain to the transfer of 
spirits from a distilled spirits plant to an alcohol fuel plant.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 5212); 
sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))



Sec. 19.999  Consignor premises.

    The consignor shall prepare, in duplicate, a commerical invoice or 
shipping document to cover each shipment of spirits. The consignor shall 
enter on the document the quantity of spirits transferred, the proof of 
the spirits transferred, a description of the shipment (for example, 
number and size of drums or barrels, tank truck, etc.), the name, 
address, and permit number of the consignor and of the consignee, and 
the serial numbers of seals, locks, or other devices used to secure the 
conveyance. The consignor shall forward the original of the document to 
the consignee with the shipment and retain the copy as a record.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 5212))



Sec. 19.1000  Reconsignment in transit.

    When, prior to or on arrival at the premises of a consignee, spirits 
transferred in bond are found to be unsuitable for the intended purpose, 
were shipped in error, or, for any other bona fide reason, are not 
accepted by such consignee, or are not accepted by a carrier, they may 
be reconsigned, by the consignor, to himself, or to another qualified 
consignee. In such case, the bond, if any, of the proprietor to whom the 
spirits are reconsigned shall cover such spirits while in transit after 
reconsignment. In addition, if the spirits are reconsigned to a 
distilled spirits plant qualified under subpart G of this part, an 
application to receive spirits by transfer in bond (on Form 5100.16) 
must have been previously approved for the consignee. Notice of 
cancellation of the shipment shall be made by the consignor to the 
consignee and the consignor shall note the reconsignemnt on

[[Page 421]]

his copy of the document covering the original shipment. Where the 
reconsignment is to another proprietor, a new document shall be prepared 
and prominently marked with the word ``Reconsignment''.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, (26 U.S.C. 5212); 
sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))



Sec. 19.1001  Consignee premises.

    (a) General. When spirits are received by transfer in bond, the 
proprietor shall examine each conveyance to determine whether the locks, 
seals, or other devices are intact upon arrival at his premises. If the 
locks, seals or other devices are not intact, he shall immediately 
notify the area supervisor, before removal of any spirits from the 
conveyance. The consignee shall determine the quantity of spirits 
received and record the quantity and the date received on the document 
received with the shipment. The consignee shall retain the document as 
the record of receipt required by Sec. 19.984.
    (b) Portable containers. When spirits are received in barrels, 
drums, or similar portable containers, the proprietor shall examine each 
container and, unless the transfer was made in a secured conveyance and 
the seals or other devices are intact on arrival, verify the contents of 
each container. The proprietor shall record the quantity received for 
each container on a list, and shall attach a copy of the list to the 
invoice or other document received with the shipment.
    (c) Bulk conveyances and pipelines. When spirits are received in 
bulk conveyances or by pipeline, the consignee shall gauge the spirits 
received and shall record the quantity so determined on the invoice or 
other document received with shipment. However, the regional director 
(compliance) may waive the requirement for gauging spirits on receipt by 
pipeline if, because of the location of the premises, there will be no 
jeopardy to the revenue.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1362, as amended 
(26 U.S.C. 5204, 5212); sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 
U.S.C. 5181))



Sec. 19.1002  Prohibited uses, transfers, and withdrawals.

    No person shall withdraw, use, sell, or otherwise dispose of 
distilled spirits (including fuel alcohol) produced under this subpart 
for other than fuel use. The law imposes criminal penalties on any 
person who withdraws, uses, sells or otherwise disposes of distilled 
spirits (including fuel alcohol) produced under this subpart for other 
than fuel use.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1398, as amended (26 U.S.C. 5601); 
sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

         Materials for Rendering Spirits Unfit for Beverage Use



Sec. 19.1005  Authorized materials.

    (a) General. The Director shall determine and authorize for use 
materials for rendering spirits unfit for beverage use which will not 
impair the quality of the spirits for fuel use. Spirits treated under 
this section will be considered rendered unfit for beverage use and 
eligible for withdrawal as fuel alcohol.
    (b) List. The Director will compile and issue periodically a list of 
materials authorized for rendering spirits unfit for beverage use. The 
list will specify for each material (1) name and (2) quantity required 
to render spirits unfit for beverage use. The list may be obtained at no 
cost upon request from the ATF Distribution Center, 7943 Angus Court, 
Springfield, Virginia 22153.
    (c) Authorized material. Until issuance of the initial list of 
materials authorized for rendering spirits unfit for beverage use, 
proprietors are authorized to add to each 100 gallons of spirits any of 
the following materials in the quantities specified.
    (1) 2 gallons or more of--
    (i) Gasoline or automotive gasoline (for use in engines which 
require unleaded gasoline Environmental Protection Agency and 
manufacturers specifications may require that unleaded gasoline be used 
to render the spirits unfit for beverage use).
    (ii) Kerosene,
    (iii) Deodorized kerosene,
    (iv) Rubber hydrocarbon solvent,
    (v) Methyl isobutyl ketone,
    (vi) Mixed isomers of nitropropane,
    (vii) Heptane, or,

[[Page 422]]

    (viii) Any combination of (i) through (vii); or
    (2) \1/8\ ounce of denatonium benzoate N.F. and 2 gallons of 
isopropyl alcohol.

(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-249, 52 
FR 5961, Feb. 27, 1987; T.D. ATF-442, 66 FR 12854, Mar. 1, 2001]



Sec. 19.1006  Other materials.

    If a proprietor desires to use a material not authorized under 
Sec. 19.1005 to render spirits unfit for beverage use, the proprietor 
shall submit an application to the Director. The application must state 
the name of the material and the quantity of material that the 
proprietor proposes to add to each 100 gallons of spirits. The 
proprietor may be required to submit an 8 ounce sample of the material 
with the application. Material that impairs the quality of the spirits 
for fuel use will not be approved. The proprietor shall not use any 
proposed material prior to its approval. Materials approved for use 
under this section will appear in the next subsequent issuance of the 
list of materials authorized for rendering spirits unfit for beverage 
use provided for under Sec. 19.1005. The proprietor shall retain as part 
of the records available for inspection by ATF officers, any application 
approved by the Director under the provisions of this section.

(Sec. 232, Pub. L. 96-233, 94 Stat. 278 (26 U.S.C. 5181))



Sec. 19.1007  Samples.

    A proprietor may take samples of spirits and fuel alcohol for 
testing and analysis. Samples of spirits may not be removed from the 
premises of the alcohol fuel plant. Samples of fuel alcohol may be 
removed from the premises of the alcohol fuel plant to a bona fide 
laboratory for testing and analysis. The proprietor shall indicate on 
sample containers that the spirits or fuel alcohol contained therein is 
a sample. The proprietor shall account for samples in the record 
provided for in Sec. 19.986.

(Sec. 232, Pub. L. 96-223, 94 Stat. 278 (26 U.S.C. 5181))

                                  Marks



Sec. 19.1008  Marks.

    (a) Fuel alcohol. The proprietor shall conspicuously and permanently 
mark or securely label each container of fuel alcohol containing 55 
gallons or less that will be withdrawn from the plant premises, as 
follows:

                                 WARNING

                              FUEL ALCOHOL

                  MAY BE HARMFUL OR FATAL IF SWALLOWED


The mark or label shall be placed on the head or side of the container, 
and shall be in plain legible letters. Proprietors may place other marks 
or labels on containers so long as they do not obscure the required 
mark.
    (b) Spirits. When barrels, drums or similiar portable containers of 
spirits are to be transferred by a proprietor to a distilled spirits 
plant qualified under subpart G of this part, each container will be 
marked or labeled in plain legible letters on the side or head to show 
the following information:
    (1) Quantity in wine gallons;
    (2) Proof;
    (3) Serial number of container;
    (4) Name, address (city or town and State) and permit number of the 
alcohol fuel plant; and
    (5) The words ``Spirits-For Alcohol Fuel Use Only''.

Proprietors may place other marks or labels on such containers so long 
as they do not obscure the required mark. Serial numbers will be 
assigned consecutively commencing with ``1''. When the numbering of any 
series reaches ``1,000,000'', the proprietor may recommence the series. 
The recommenced series will be given an alphabetical prefix or suffix. 
Where there is a change in proprietorship, or in the individual, firm, 
corporate name or trade name, the series in use at the time of the 
change may be continued.

(Sec. 232, Pub. L. 96-233, 94 Stat. 278, (26 U.S.C. 5181); sec. 201, 
Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))

[[Page 423]]



                   Subpart Z--Paperwork Reduction Act



Sec. 19.1010  OMB control numbers assigned pursuant to the Paperwork Reduction Act.

    (a) Purpose. This subpart displays the control numbers assigned to 
information collection requirements in this part by the Office of 
Management and Budget pursuant to the Paperwork Reduction Act of 1980, 
Pub. L. 96-511. The Department intends that this subpart comply with the 
requirements of section 3507(f) of the Paperwork Reduction Act, which 
requires that agencies display a current control number assigned by the 
Director of the Office of Management and Budget for each agency 
information collection requirement.
    (b) Display.

------------------------------------------------------------------------
                                                             Current OMB
                 Section where identified                    control No.
------------------------------------------------------------------------
19.21.....................................................     1512-0203
19.34.....................................................     1512-0203
19.35.....................................................     1512-0198
                                                               1512-0203
19.36.....................................................     1512-0203
19.37.....................................................     1512-0203
19.38.....................................................     1512-0203
19.41.....................................................     1512-0141
                                                               1512-0203
19.42.....................................................     1512-0141
                                                               1512-0203
19.43.....................................................     1512-0141
                                                               1512-0203
19.44.....................................................     1512-0141
                                                               1512-0203
19.45.....................................................     1512-0203
19.46.....................................................     1512-0203
19.62.....................................................     1512-0206
19.66.....................................................     1512-0206
19.67.....................................................     1512-0206
19.68.....................................................     1512-0462
19.71.....................................................     1512-0206
19.72.....................................................     1512-0206
19.73.....................................................     1512-0206
19.75.....................................................     1512-0206
19.91.....................................................     1512-0206
                                                               1512-0250
19.92.....................................................     1512-0250
19.93.....................................................     1512-0250
19.96.....................................................     1512-0206
19.98.....................................................     1512-0206
19.99.....................................................     1512-0206
19.133....................................................     1512-0206
19.134....................................................     1512-0206
19.151....................................................     1512-0206
19.152....................................................     1512-0206
19.153....................................................     1512-0206
19.154....................................................     1512-0206
19.155....................................................     1512-0206
19.157....................................................     1512-0195
19.158....................................................     1512-0195
19.159....................................................     1512-0195
19.162....................................................     1512-0195
19.165....................................................     1512-0195
19.166....................................................     1512-0206
19.167....................................................     1512-0206
19.168....................................................     1512-0206
19.170....................................................     1512-0206
19.180....................................................     1512-0206
19.182....................................................     1512-0206
19.183....................................................     1512-0195
19.184....................................................     1512-0206
19.185....................................................     1512-0206
19.186....................................................     1512-0206
19.187....................................................     1512-0206
19.189....................................................     1512-0206
19.190....................................................     1512-0206
19.191....................................................     1512-0206
19.192....................................................     1512-0206
19.193....................................................     1512-0206
19.201....................................................     1512-0202
                                                               1512-0206
19.202....................................................     1512-0202
                                                               1512-0206
19.203....................................................     1512-0202
                                                               1512-0206
19.204....................................................     1512-0202
                                                               1512-0206
19.205....................................................     1512-0202
                                                               1512-0206
19.206....................................................     1512-0206
19.211....................................................     1512-0206
19.249....................................................     1512-0206
19.250....................................................     1512-0206
19.251....................................................     1512-0206
19.273....................................................     1512-0250
19.274....................................................     1512-0460
19.276....................................................     1512-0250
19.277....................................................     1512-0206
19.278....................................................     1512-0460
19.280....................................................     1512-0460
19.281....................................................     1512-0206
19.311....................................................     1512-0202
19.312....................................................     1512-0205
19.314....................................................     1512-0205
19.315....................................................     1512-0205
19.316....................................................     1512-0205
19.318....................................................     1512-0250
19.319....................................................     1512-0250
19.320....................................................     1512-0192
                                                               1512-0250
19.321....................................................     1512-0250
19.322....................................................     1512-0250
19.324....................................................     1512-0204
                                                               1512-0206
19.326....................................................     1512-0205
19.327....................................................     1512-0205
                                                               1512-0461
19.329....................................................     1512-0250
19.342....................................................     1512-0192
                                                               1512-0250
19.343....................................................     1512-0250
19.344....................................................     1512-0192
                                                               1512-0250
19.345....................................................     1512-0461
19.347....................................................     1512-0192
19.349....................................................     1512-0192
19.353....................................................     1512-0250
19.372....................................................     1512-0198
19.373....................................................     1512-0198
19.382....................................................     1512-0206
19.383....................................................     1512-0198
19.384....................................................     1512-0198
19.385....................................................     1512-0461
19.386....................................................     1512-0198
                                                               1512-0461
19.387....................................................     1512-0198
19.388....................................................     1512-0461

[[Page 424]]

 
19.389....................................................     1512-0198
19.390....................................................     1512-0198
                                                               1512-0250
                                                               1512-0461
19.391....................................................     1512-0198
19.392....................................................     1512-0198
19.393....................................................     1512-0198
19.394....................................................     1512-0189
                                                               1512-0461
19.395....................................................     1512-0461
19.396....................................................     1512-0461
19.397....................................................     1512-0189
                                                               1512-0190
                                                               1512-0199
                                                               1512-0461
19.398....................................................     1512-0189
                                                               1512-0461
19.400....................................................     1512-0198
19.401....................................................     1512-0250
19.402....................................................     1512-0206
                                                               1512-0250
19.451....................................................     1512-0207
19.453....................................................     1512-0207
19.454....................................................     1512-0250
19.456....................................................     1512-0206
19.457....................................................     1512-0207
19.458....................................................     1512-0207
19.460....................................................     1512-0206
19.461....................................................     1512-0206
19.462....................................................     1512-0250
19.463....................................................     1512-0461
19.464....................................................     1512-0250
19.467....................................................     1512-0141
19.471....................................................     1512-0207
                                                               1512-0461
19.483....................................................     1512-0192
19.484....................................................     1512-0250
                                                               1512-0461
19.485....................................................     1512-0461
19.487....................................................     1512-0203
19.501....................................................     1512-0250
19.502....................................................     1512-0250
19.503....................................................     1512-0250
19.505....................................................     1512-0191
                                                               1512-0250
19.508....................................................     1512-0250
                                                               1512-0461
19.509....................................................     1512-0191
                                                               1512-0250
19.510....................................................     1512-0061
                                                               1512-0250
19.515....................................................     1512-0203
19.516....................................................     1512-0203
19.517....................................................     1512-0203
                                                               1512-0250
19.518....................................................     1512-0203
19.519....................................................     1512-0203
19.520....................................................     1512-0203
19.521....................................................     1512-0203
19.522....................................................     1512-0203
19.523....................................................     1512-0203
19.524....................................................     1512-0203
19.525....................................................     1512-0203
19.526....................................................     1512-0203
19.532....................................................     1512-0250
19.533....................................................     1512-0206
19.537....................................................     1512-0067
                                                               1512-0250
19.540....................................................     1512-0067
                                                               1512-0077
                                                               1512-0250
                                                               1512-0461
19.541....................................................     1512-0067
19.561....................................................     1512-0141
19.562....................................................     1512-0141
                                                               1512-0192
                                                               1512-0206
                                                               1512-0250
19.564....................................................     1512-0141
19.565....................................................     1512-0198
                                                               1512-0203
                                                               1512-0250
19.583....................................................     1512-0461
19.587....................................................     1512-0460
19.588....................................................     1512-0460
19.592....................................................     1512-0461
19.593....................................................     1512-0461
19.594....................................................     1512-0461
19.595....................................................     1512-0461
19.596....................................................     1512-0461
19.597....................................................     1512-0206
                                                               1512-0461
19.599....................................................     1512-0461
19.601....................................................     1512-0461
19.602....................................................     1512-0461
19.604....................................................     1512-0461
19.605....................................................     1512-0189
                                                               1512-0461
19.606....................................................     1512-0461
19.607....................................................     1512-0461
19.608....................................................     1512-0461
19.610....................................................     1512-0189
19.611....................................................     1512-0198
19.633....................................................     1512-0092
19.634....................................................     1512-0206
19.635....................................................     1512-0198
19.636....................................................     1512-0198
19.638....................................................     1512-0206
19.639....................................................     1512-0198
19.640....................................................     1512-0091
19.641....................................................     1512-0204
                                                               1512-0461
19.642....................................................     1512-0461
19.643....................................................     1512-0461
19.644....................................................     1512-0461
19.645....................................................     1512-0461
19.646....................................................     1512-0461
19.647....................................................     1512-0461
19.648....................................................     1512-0461
19.649....................................................     1512-0461
19.650....................................................     1512-0461
19.661....................................................     1512-0461
19.662....................................................     1512-0461
19.663....................................................     1512-0206
19.664....................................................     1512-0056
19.666....................................................     1512-0189
19.668....................................................     1512-0189
19.669....................................................     1512-0056
                                                               1512-0189
19.670....................................................     1512-0189
19.671....................................................     1512-0189
19.672....................................................     1512-0189
19.681....................................................     1512-0141
                                                               1512-0203
19.682....................................................     1512-0203
                                                               1512-0250
19.683....................................................     1512-0250
19.684....................................................     1512-0250
19.685....................................................     1512-0067
19.686....................................................     1512-0191
                                                               1512-0250
19.687....................................................     1512-0199
19.688....................................................     1512-0250
19.691....................................................     1512-0250
19.701....................................................     1512-0206
                                                               1512-0250

[[Page 425]]

 
19.702....................................................     1512-0250
19.703....................................................     1512-0203
19.704....................................................     1512-0461
19.721....................................................     1512-0189
                                                               1512-0192
                                                               1512-0198
                                                               1512-0203
                                                               1512-0205
                                                               1512-0207
                                                               1512-0250
19.723....................................................     1512-0189
                                                               1512-0192
                                                               1512-0198
                                                               1512-0203
                                                               1512-0205
                                                               1512-0207
                                                               1512-0250
                                                               1512-0462
19.724....................................................     1512-0206
19.725....................................................     1512-0206
19.731....................................................     1512-0189
                                                               1512-0192
                                                               1512-0198
                                                               1512-0203
                                                               1512-0205
                                                               1512-0207
                                                               1512-0250
                                                               1512-0189
19.732....................................................     1512-0192
                                                               1512-0198
                                                               1512-0203
                                                               1512-0205
                                                               1512-0207
                                                               1512-0250
19.736....................................................     1512-0205
19.740....................................................     1512-0192
19.741....................................................     1512-0192
19.742....................................................     1512-0192
19.743....................................................     1512-0192
19.747....................................................     1512-0198
19.748....................................................     1512-0198
19.749....................................................     1512-0198
19.750....................................................     1512-0198
19.751....................................................     1512-0198
19.752....................................................     1512-0207
19.753....................................................     1512-0207
19.761....................................................     1512-0203
19.762....................................................     1512-0203
19.763....................................................     1512-0203
19.764....................................................     1512-0203
19.765....................................................     1512-0203
19.766....................................................     1512-0250
19.767....................................................     1512-0250
19.768....................................................     1512-0250
19.769....................................................     1512-0250
19.770....................................................     1512-0215
                                                               1512-0250
19.772....................................................     1512-0189
19.773....................................................     1512-0198
19.774....................................................     1512-0250
19.775....................................................     1512-0250
19.776....................................................     1512-0250
19.778....................................................     1512-0198
19.779....................................................     1512-0067
19.780....................................................     1512-0250
19.791....................................................     1512-0067
                                                               1512-0190
19.792....................................................     1512-0189
                                                               1512-0192
                                                               1512-0198
                                                               1512-0205
                                                               1512-0207
19.821....................................................     1512-0462
19.822....................................................     1512-0462
19.823....................................................     1512-0462
19.824....................................................     1512-0462
19.829....................................................     1512-0462
19.903....................................................     1512-0215
19.904....................................................     1512-0215
19.905....................................................     1512-0141
19.910....................................................     1512-0214
19.912....................................................     1512-0214
19.914....................................................     1512-0214
19.915....................................................     1512-0214
19.916....................................................     1512-0214
19.919....................................................     1512-0215
19.921....................................................     1512-0214
                                                               1512-0215
19.922....................................................     1512-0214
19.923....................................................     1512-0215
19.924....................................................     1512-0214
19.926....................................................     1512-0214
19.930....................................................     1512-0215
19.945....................................................     1512-0215
19.980....................................................     1512-0215
19.981....................................................     1512-0215
19.982....................................................     1512-0215
19.983....................................................     1512-0215
19.984....................................................     1512-0215
19.985....................................................     1512-0215
19.986....................................................     1512-0215
19.987....................................................     1512-0215
19.988....................................................     1512-0215
19.990....................................................     1512-0215
19.995....................................................     1512-0215
19.997....................................................     1512-0215
19.998....................................................     1512-0191
                                                               1512-0215
19.999....................................................     1512-0215
19.1000...................................................     1512-0215
19.1001...................................................     1512-0215
19.1005...................................................     1512-0215
19.1006...................................................     1512-0215
19.1007...................................................     1512-0215
19.1008...................................................     1512-0215
------------------------------------------------------------------------


[T.D. ATF-198, 50 FR 8464, Mar. 1, 1985, as amended by T.D. ATF-297, 55 
FR 18065, Apr. 30, 1990]



PART 20--DISTRIBUTION AND USE OF DENATURED ALCOHOL AND RUM--Table of Contents




                            Subpart A--Scope

Sec.
20.1  General.
20.2  Territorial extent.
20.3  Related regulations.

                         Subpart B--Definitions

20.11  Meaning of terms.

                  Subpart C--Administrative Provisions

                               Authorities

20.20  Delegations of the Director.
20.21  Forms prescribed.

[[Page 426]]

20.22  Alternate methods or procedures; and emergency variations from 
          requirements.
20.23  Approval of formulas and statements of process.
20.24  Allowance of claims.
20.25  Permits.
20.26  Bonds and consents of surety.
20.27  Right of entry and examination.
20.28  Detention of containers.

                            Liability for Tax

20.31  Applicable laws and regulations; persons liable for tax.

                            Marks and Brands

20.33  Time of destruction of marks and brands.

                          Document Requirements

20.36  Execution under penalties of perjury.
20.37  Filing of qualifying documents.

                Subpart Ca--Special (Occupational) Taxes

20.38  Liability for special tax.
20.38a  Special tax returns.
20.39  Employer identification number.

                           Special Tax Stamps

20.40  Issuance, distribution, and examination of special tax stamps.
20.40a  Changes in special tax stamps.

              Subpart D--Qualification of Dealers and Users

                  Application for Permit, Form 5150.22

20.41  Application for industrial alcohol user permit.
20.42  Data for application, Form 5150.22.
20.43  Exceptions to application requirements.
20.44  Disapproval of application.
20.45  Organizational documents.

              Industrial Alcohol User Permit, ATF F 5150.9

20.48  Conditions of permits.
20.49  Duration of permits.
20.50  Correction of permits.
20.51  Suspension or revocation of permits.
20.52  Rules of practice in permit proceedings.
20.53  Powers of attorney.
20.54  Photocopying of permits.
20.55  Posting of permits.

                  Changes After Original Qualification

20.56  Changes affecting applications and permits.
20.57  Automatic termination of permits.
20.58  Adoption of documents by a fiduciary.
20.59  Continuing partnerships.
20.60  Change in name of permittee.
20.61  Change in trade name.
20.62  Change in location.
20.63  Adoption of formulas and statement of process.
20.64  Return of permits.

                           Registry of Stills

20.66  Registry of stills.

                  Permanent Discontinuance of Business

20.68  Notice of permanent discontinuance.

                 Subpart E--Bonds and Consents of Surety

20.71  Bond.
20.72  Evaluation of bond penal sum.
20.73  Corporate surety.
20.74  Filing of powers of attorney.
20.75  Execution of powers of attorney.
20.76  Deposit of securities instead of corporate surety.
20.77  Consents of surety.
20.78  Strengthening bonds.
20.79  Superseding bonds.
20.80  Notice by surety of termination of bond.
20.81  Termination of rights and liability under a bond.
20.82  Release of pledged securities.

              Subpart F--Formulas and Statements of Process

20.91  Formula.
20.92  Samples.
20.93  Changes to formulas.
20.94  Statement of process.
20.95  Developmental samples of articles.

                            Approval Policies

20.100  General.
20.101  Drafting formulas.
20.102  Bay rum, alcoholado, or alcoholado-type toilet waters.
20.103  Articles made with S.D.A. Formula No. 39-C.
20.104  Residual alcohol in spirit vinegar.

                          General-Use Formulas

20.111  General.
20.112  Special industrial solvents general-use formula.
20.113  Proprietary solvents general-use formula.
20.114  Tobacco flavor general-use formula.
20.115  Ink general-use formula.
20.116  Low alcohol general-use formula.
20.117  Reagent alcohol general-use formula.
20.118  Rubbing alcohol general-use formula.
20.119  Toilet preparations containing not less than 10% essential oils 
          general-use formula.

              Subpart G--Requirements Relating to Articles

20.131  Scope of subpart.

[[Page 427]]

20.132  General requirements.
20.133  Registration of persons trafficking in articles.
20.134  Labeling.
20.135  State code numbers.
20.136  Labeling regulations of other agencies.
20.137  Penalties.

         Subpart H--Sale and Use of Completely Denatured Alcohol

20.141  General.
20.142  Records of bulk conveyances.
20.143  Receipt.
20.144  Packages of completely denatured alcohol.
20.145  Encased containers.
20.146  Labels on bulk containers.
20.147  Labels on consumer-size containers.
20.148  Manufacture of articles with completely denatured alcohol.
20.149  Records.

   Subpart I--Operations by Dealers and Users of Specially Denatured 
                                 Spirits

                  Obtaining Specially Denatured Spirits

20.161  Withdrawals under permit.
20.162  Regulation of withdrawals.
20.163  Receipt and storage of specially denatured spirits.

                         Premises and Equipment

20.164  Premises.
20.165  Storage facilities.
20.166  Stills and other equipment.
20.167  Recovered and restored denatured spirits tanks.

                          Inventory and Records

20.170  Physical inventory.
20.171  Record of shipment.
20.172  Records.

                          Operations by Dealers

20.175  Shipment for account of another dealer.
20.176  Packaging by a dealer.
20.177  Encased containers.
20.178  Marks and brands on containers of specially denatured spirits.
20.179  Package identification number or serial number.
20.180  Record of packages filled.
20.181  Limitations on shipments.
20.182  Bulk shipments.

                           Operations by Users

20.189  Use of specially denatured spirits.
20.190  Diversion of articles for internal human use or beverage use.
20.191  Bulk articles.
20.192  Manufacturing record.

                            Subpart J--Losses

20.201  Liability and responsibility of carrier.
20.202  Losses in transit.
20.203  Losses on premises.
20.204  Incomplete shipments.
20.205  Claims.

 Subpart K--Recovery of Denatured Alcohol, Specially Denatured Rum, or 
                                Articles

20.211  General.
20.212  Deposit in receiving tanks.
20.213  Reuse of recovered spirits.
20.214  Shipment for restoration or redenaturation.
20.215  Shipment of articles and spirits residues for redistillation.
20.216  Record of shipment.

                         Subpart L--Destruction

20.221  General.
20.222  Destruction.

Subpart M--Return, Reconsignment and Disposition of Specially Denatured 
                                 Spirits

20.231  Return.
20.232  Reconsignment in transit.
20.233  Disposition after revocation of permit.
20.234  Disposition on permanent discontinuance of use.
20.235  Disposition to another user.

 Subpart N--Use of Specially Denatured Spirits by the United States or 
                            Government Agency

20.241  General.
20.242  Application and permit, Form 5150.33.
20.243  Procurement of specially denatured spirits.
20.244  Receipt of shipment.
20.245  Discontinuance of use.
20.246  Disposition of specially denatured spirits on discontinuance of 
          use.

            Subpart O--Samples of Specially Denatured Spirits

20.251  General.
20.252  Samples larger than five gallons.
20.253  Labels for samples.

                     Subpart P--Records and Reports

20.261  Records of completely denatured alcohol.
20.262  Dealer's records of specially denatured spirits.
20.263  User's records of specially denatured spirits.
20.264  User's records and report of products and processes.
20.265  Retention of invoices.

[[Page 428]]

20.266  Time for making entries in records.
20.267  Filing and retaining records.
20.268  Photographic copies of records.

    Authority: 26 U.S.C. 5001, 5206, 5214, 5271-5275, 5311, 5552, 5555, 
5607, 6065, 7805.

    Source: T.D. ATF-199, 50 FR 9162, Mar. 6, 1985, unless otherwise 
noted.

    Editorial Note: Nomenclature changes to part 20 appear by T.D. ATF-
235, 66 FR 5473-5475, Jan. 19, 2001 and by T.D. ATF-463 and T.D. ATF-
462, 66 FR 42733, 42736, Aug. 15, 2001.



                            Subpart A--Scope



Sec. 20.1  General.

    The regulations in this part relate to denatured distilled spirits 
and cover the procurement, use, disposition, and recovery of denatured 
alcohol, specially denatured rum, and articles containing denatured 
spirits.



Sec. 20.2  Territorial extent.

    (a) This part applies to the several States of the United States, 
the District of Columbia and to denatured spirits and articles coming 
into the United States from Puerto Rico or the Virgin Islands.
    (b) For the purposes of this part, operations in a foreign-trade 
zone located in any State of the United States or the District of 
Columbia are regulated in the same manner as operations in any other 
part of such State or the District of Columbia, with the exception that 
under this part only domestic denatured spirits may be used in the 
manufacture of articles in a foreign-trade zone.

(48 Stat. 999, as amended (19 U.S.C. 81c))

[T.D. ATF-274, 53 FR 25156, July 5, 1988]



Sec. 20.3  Related regulations.

    Regulations related to this part are listed below:

16 CFR Chapter I--Federal Trade Commission.
16 CFR Chapter II--Consumer Product Safety Commission.
21 CFR Chapter I--Food and Drug Administration, Department of Health and 
Human Services.
27 CFR Part 19--Distilled Spirits Plants.
27 CFR Part 21--Formulas for Denatured Alcohol and Rum.
27 CFR Part 26--Liquors and Articles from Puerto Rico and the Virgin 
Islands.
27 CFR Part 29--Stills and Miscellaneous Regulations.
27 CFR Part 71--Rules of Practice in Permit Proceedings.
27 CFR Part 251--Importation of Distilled Spirits, Wines and Beer.
31 CFR Part 225--Acceptance of Bonds, Notes, or Other Obligations Issued 
or Guaranteed by the United States as Security in Lien of Surety or 
Sureties on Penal Bonds.

[T.D. ATF-199, 50 FR 9162, Mar. 6, 1985, as amended by T.D. ATF-207, 50 
FR 23682, June 5, 1985; T.D. ATF-459, 66 FR 38549, July 25, 2001]



                         Subpart B--Definitions



Sec. 20.11  Meaning of terms.

    When used in this part and in forms prescribed under this part, the 
following terms have the meanings given in this section. Words in the 
plural form include the singular, and vice versa, and words importing 
the masculine gender include the feminine. The terms ``includes'' and 
``including'' do not exclude things not enumerated which are in the same 
general class.
    Alcohol. Those spirits known as ethyl alcohol, ethanol, or spirits 
of wine, from whatever source or by whatever process produced; the term 
does not include such spirits as whisky, brandy, rum, gin, or vodka.
    Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this part by ATF Order 
1130.9, Delegation Order--Delegation of the Director's Authorities in 27 
CFR Parts 20, 21 and 22.
    Article. Any substance or preparation in the manufacture of which 
denatured spirits are used, including the product obtained by further 
manufacture or by combination with other materials, if the article 
subjected to further manufacture or combination contained denatured 
spirits.
    Bulk conveyance. Any tank car, tank truck, tank ship, or tank barge, 
or a compartment of any such conveyance, or any other container approved 
by the appropriate ATF officer for the conveyance of comparable 
quantities of denatured spirits or articles.
    CFR. The Code of Federal Regulations.

[[Page 429]]

    Completely denatured alcohol. Those spirits known as alcohol, as 
defined in this section, denatured under the completely denatured 
alcohol formulas prescribed in subpart C of part 21 of this chapter.
    Dealer. A person required to hold a permit to deal in specially 
denatured spirits for resale to persons authorized to purchase or 
receive specially denatured spirits in accordance with this part. The 
term does not include a person who only buys and sells specially 
denatured spirits which that person never physically receives or intends 
to receive.
    Denaturant. Any one of the materials authorized under part 21 of 
this chapter for addition to spirits in the production of denatured 
spirits.
    Denatured spirits. Alcohol or rum to which denaturants have been 
added as provided in part 21 of this chapter.
    Denaturer. The proprietor of a distilled spirits plant who denatures 
alcohol or rum under part 19 of this chapter.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC 20226.
    Distributor. Any person who sells completely denatured alcohol, 
other than a proprietor of a distilled spirits plant who sells such 
alcohol at the plant premises, and any person who sells articles 
containing completely or specially denatured alcohol or specially 
denatured rum, other than the manufacturer, except where otherwise 
specifically restricted in this part.
    Executed under penalties of perjury. Signed with the prescribed 
declaration under the penalties of perjury as provided on or with 
respect to the claim, form, or other document or, where no form of 
declaration is prescribed, with the declaration--

    I declare under the penalties of perjury that this -------- (insert 
type of document, such as statement, report, certificate, application, 
claim, or other document), including the documents submitted in support 
thereof, has been examined by me and, to the best of my knowledge and 
belief, is true, correct, and complete.

    Fiduciary. A guardian, trustee, executor, administrator, receiver, 
conservator, or any person acting in any fiduciary capacity for any 
person.
    Gallon. The liquid measure equivalent to the volume of 231 cubic 
inches.
    Liter or litre. A metric unit of capacity equal to 1,000 cubic 
centimeters of alcohol, and equivalent to 33.814 fluid ounces. A liter 
is divided into 1,000 milliliters. The symbol for milliliter or 
milliliters is ``ml''.
    Manufacturer or user. A person who holds a permit to use specially 
denatured alcohol or specially denatured rum or to recover completely or 
specially denatured alcohol, specially denatured rum, or articles.
    Permit. The document issued under 26 U.S.C. 5271(a), authorizing a 
person to withdraw and deal in or use specially denatured alcohol or 
specially denatured rum or to recover denatured alcohol, specially 
denatured rum, or articles under specified conditions.
    Permittee. Any person holding a permit, Form 5150.9, issued under 
this part to withdraw and deal in or use (including recover) denatured 
spirits.
    Person. An individual, trust, estate, partnership, association, 
company, or corporation.
    Proof. The ethyl alcohol content of a liquid at 60 deg. Fahrenheit, 
stated as twice the percent of ethyl alcohol by volume.
    Proof gallon. A gallon at 60 deg. Fahrenheit which contains 50 
percent by volume of ethyl alcohol having a specific gravity of 0.7939 
at 60 deg. Fahrenheit referred to water at 60 deg. Fahrenheit as unity, 
or the alcoholic equivalent thereof.
    Proprietary solvents. Solvents which are manufactured with specially 
denatured alcohol under the proprietary solvent general-use formula in 
this part.
    Recover. To salvage, after use, specially denatured spirits, 
completely denatured alcohol without all of its original denaturants, or 
any article containing denatured spirits, if (1) the original article 
was made with specially denatured spirits and the salvaged article does 
not contain all of the original ingredients of the article, or (2) the 
original article was made with completely denatured alcohol and the 
salvaged article does not contain

[[Page 430]]

all of the original denaturants of the completely denatured alcohol.
    Recovered article. An article containing specially denatured spirits 
salvaged without all of its original ingredients, or an article 
containing completely denatured alcohol salvaged without all of the 
original denaturants of the completely denatured alcohol.
    Recovered denatured alcohol. Denatured alcohol (except completely 
denatured alcohol containing all of its original denaturants) which has 
been recovered.
    Recovered denatured rum. Denatured rum which has been recovered.
    Restoration. Restoring to the original state (except that the 
restored material may or may not contain denaturants to the same extent 
as the original material) of recovered denatured alcohol, recovered 
specially denatured rum, or recovered articles containing denatured 
alcohol or specially denatured rum. Restoration includes bringing the 
alcohol content of the recovered product to 190 deg. of proof or more or 
to not less than the original proof if less than 190 deg.. Restoration 
also includes the removal of foreign materials by any suitable means.
    Rum. Any spirits produced from sugar cane products and distilled at 
less than 190 deg. proof in such manner that the spirits possess the 
taste, aroma, and characteristics generally attributed to rum.
    Secretary. The Secretary of the Treasury or his delegate.
    Special industrial solvents. Solvents which are manufactured with 
specially denatured alcohol under special industrial solvent general-use 
formula in this part.
    Specially denatured alcohol or S.D.A. Those spirits known as 
alcohol, as defined in this section, denatured under the specially 
denatured alcohol formulas prescribed in part 21 of this chapter.
    Specially denatured rum or S.D.R. Those spirits known as rum, as 
defined in this section, denatured under the specially denatured rum 
formula prescribed in part 21 of this chapter.
    Specially denatured spirits. Specially denatured alcohol or 
specially denatured rum.
    Spirits or distilled spirits. Alcohol or rum as defined in this 
part.
    Tank truck. A tank-equipped semi-trailer, trailer, or truck, 
conforming to the requirements of this part.
    This chapter. Chapter I, Title 27, Code of Federal Regulations.
    U.S.C. The United States Code.

(Approved by the Office of Management and Budget under control number 
1512-0336)

[T.D. ATF-199, 50 FR 9162, Mar. 6, 1985; 50 FR 20099, May 14, 1985, as 
amended by ATF-332, 57 FR 40849, Sept. 8, 1992; T.D. ATF-435, 66 FR 
5473, Jan. 19, 2001]



                  Subpart C--Administrative Provisions

                               Authorities



Sec. 20.20  Delegations of the Director.

    All of the regulatory authorities of the Director contained in this 
Part 20 are delegated to appropriate ATF officers. These ATF officers 
are specified in ATF Order 1130.9, Delegation Order--Delegation of the 
Director's Authorities in 27 CFR Parts 20, 21 and 22. ATF delegation 
orders, such as ATF Order 1130.9, are available to any interested person 
by mailing a request to the ATF Distribution Center, P.O. Box 5950, 
Springfield, Virginia 22150-5950, or by accessing the ATF web site 
(http://www.atf.treas.gov/).

[T.D. ATF-435, 66 FR 5473, Jan. 19, 2001]



Sec. 20.21  Forms prescribed.

    (a) The appropriate ATF officer is authorized to prescribe all forms 
required by this part, including bonds, applications, notices, claims, 
reports, and records. All of the information called for in each form 
shall be furnished as indicated by the headings on the form and the 
instructions on or pertaining to the form. In addition, information 
called for in each form shall be furnished as required by this part. The 
form will be filed in accordance with the instructions for the form.
    (b) Forms may be requested from the ATF Distribution Center, P.O. 
Box 5950, Springfield, Virginia 22150-5950, or by accessing the ATF web 
site (http://www.atf.treas.gov/).

[T.D. ATF-199, 50 FR 9162, Mar. 6, 1985, as amended by T.D. ATF-249, 52 
FR 5961, Feb. 27, 1987; T.D. 372, 61 FR 20724, May 8, 1996; T.D. ATF-
435, 66 FR 5474, Jan. 19, 2001]

[[Page 431]]



Sec. 20.22  Alternate methods or procedures; and emergency variations from requirements.

    (a) Alternate methods or procedures--(1) Application. A permittee, 
after receiving approval from the appropriate ATF officer, may use an 
alternate method or procedure (including alternate construction or 
equipment) in lieu of a method or procedure prescribed by this part. A 
permittee wishing to use an alternate method or procedure may apply to 
the appropriate ATF officer. The permittee shall describe the proposed 
alternate method or procedure and shall set forth the reasons for its 
use.
    (2) Approval by appropriate ATF officer. The appropriate ATF officer 
may approve the use of an alternate method or procedure if:
    (i) The applicant shows good cause for its use;
    (ii) It is consistent with the purpose and effect of the procedure 
prescribed by this part, and provides equal security to the revenue;
    (iii) It is not contrary to law; and
    (iv) It will not cause an increase in cost to the Government and 
will not hinder the effective administration of this part.
    (3) Exceptions. The appropriate ATF officer will not authorize an 
alternate method or procedure relating to the giving of a bond.
    (4) Conditions of approval. A permittee may not employ an alternate 
method or procedure until the appropriate ATF officer has approved its 
use. The permittee shall, during the terms of the authorization of an 
alternate method or procedure, comply with terms of the approved 
application.
    (b) Emergency variations from requirements--(1) Application. When an 
emergency exists, a permittee may apply to the appropriate ATF officer 
for a variation from the requirements of this part relating to 
construction, equipment, and methods of operation. The permittee shall 
describe the proposed variation and set forth the reasons for using it.
    (2) Approval by appropriate ATF officer. The appropriate ATF officer 
may approve an emergency variation from requirements if:
    (i) An emergency exists;
    (ii) The variation from the requirements is necessary;
    (iii) It will afford the same security and protection to the revenue 
as intended by the specific regulations;
    (iv) It will not hinder the effective administration of this part; 
and
    (v) It is not contrary to law.
    (3) Conditions of approval. A permittee may not employ an emergency 
variation from the requirements until the appropriate ATF officer has 
approved its use. Approval of variations from requirements are 
conditioned upon compliance with the conditions and limitations set 
forth in the approval.
    (4) Automatic termination of approval. If the permittee fails to 
comply in good faith with the procedures, conditions or limitations set 
forth in the approval, authority for the variation from requirements is 
automatically terminated and the permittee is required to comply with 
prescribed requirements of regulations from which those variations were 
authorized.
    (c) Withdrawal of approval. The appropriate ATF officer may withdraw 
approval for an alternate method or procedure, may withdraw approval for 
an emergency variation from requirements, approved under paragraph (a) 
or (b) of this section, if the appropriate ATF officer finds that the 
revenue is jeopardized or the effective administration of this part is 
hindered by the approval.

(Approved by the Office of Management and Budget under control number 
1512-0336)

(Act of August 16, 1954, Ch. 736, 68A Stat. 917 (26 U.S.C. 7805); sec. 
201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 U.S.C. 5552))

[T.D. ATF-199, 50 FR 9162, Mar. 6, 1985, as amended by T.D. ATF-235, 66 
FR 5474, Jan. 19, 2001]



Sec. 20.23  Approval of formulas and statements of process.

    The appropriate ATF officer is authorized to approve all formulas 
for articles and statements of process relating to recovery operations 
or other activities required to be submitted on Form 5150.19.



Sec. 20.24  Allowance of claims.

    The appropriate ATF officer is authorized to allow claims for losses 
of

[[Page 432]]

specially denatured alcohol or specially denatured rum.



Sec. 20.25  Permits.

    The appropriate ATF officer must issue permits for the United States 
or a Governmental agency as provided in Sec. 20.241 and industrial 
alcohol user permits, Form 5150.9, required under this part.

[T.D. ATF-435, 66 FR 5474, Jan. 19, 2001]



Sec. 20.26  Bonds and consents of surety.

    The appropriate ATF officer is authorized to approve all bonds and 
consents of surety required by this part.



Sec. 20.27  Right of entry and examination.

    An appropriate ATF officer may enter, during business hours or at 
any time operations are being conducted, any premises on which 
operations governed by this part are conducted to inspect the records 
and reports required by this part to be kept on those premises. An 
appropriate ATF officer may also inspect and take samples of distilled 
spirits, denatured alcohol, specially denatured rum or articles 
(including any substance for use in the manufacture of denatured 
alcohol, specially denatured rum or articles) to which those records or 
reports relate.



Sec. 20.28  Detention of containers.

    (a) Summary detention. An appropriate ATF officer may detain any 
container containing, or supposed to contain, spirits (including 
denatured spirits and articles), when the appropriate ATF officer 
believes those spirits, denatured spirits, or articles were produced, 
withdrawn, sold, transported, or used in violation of law or this part. 
The appropriate ATF officer shall hold the container at a safe place 
until it is determined if the detained property is liable by law to 
forfeiture.
    (b) Limitations. Summary detention may not exceed 72 hours without 
process of law or intervention of the appropriate ATF officer. The 
person possessing the container immediately before its detention may 
prepare a waiver of the 72 hours limitation to have the container kept 
on his or her premises during detention.

(Sec. 201, Pub. L. 85-859, Stat. 1375, as amended (26 U.S.C. 5311))

                            Liability for Tax



Sec. 20.31  Applicable laws and regulations; persons liable for tax.

    (a) All laws and regulations regarding alcohol or rum that is not 
denatured, including those requiring payment of the distilled spirits 
tax, apply to completely denatured alcohol, specially denatured alcohol, 
specially denatured rum, or articles produced, withdrawn, sold, 
transported, or used in violation of laws or regulations pertaining to 
those substances.
    (b) Any person who produces, withdraws, sells, transports, or uses 
completely denatured alcohol, specially denatured alcohol, specially 
denatured rum, or articles in violation of laws or regulations shall be 
required to pay the distilled spirits tax on those substances.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended (26 U.S.C. 5001))

                            Marks and Brands



Sec. 20.33  Time of destruction of marks and brands.

    (a) Any person who empties a package containing denatured alcohol, 
specially denatured rum, or articles made from denatured alcohol or 
specially denatured rum shall immediately destroy or obliterate the 
marks, brands, and labels required by this chapter to be placed on 
packages containing those materials.
    (b) A person may not destroy or obliterate the marks, brands or 
labels until the package or drum has been emptied.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5206))

                          Document Requirements



Sec. 20.36  Execution under penalties of perjury.

    (a) When any form or document prescribed by this part is required to 
be executed under penalties of perjury, the dealer or user or other 
authorized person shall:

[[Page 433]]

    (1) Insert the declaration ``I declare under the penalties of 
perjury that I have examined this -------- (insert the type of document 
such as claim, application, statement, report, certificate), including 
all supporting documents, and to the best of my knowledge and belief, it 
is true, correct, and complete''; and
    (2) Sign the document.
    (b) When the required document already bears a perjury declaration, 
the dealer or user or other authorized person shall sign the document.

(26 U.S.C. 6065)

[T.D. ATF-199, 50 FR 9162, Mar. 6, 1985, as amended by T.D. ATF-332, 57 
FR 40849, Sept. 8, 1992]



Sec. 20.37  Filing of qualifying documents.

    All documents returned to a permittee or other person as evidence of 
compliance with requirements of this part, or as authorization, shall 
except as otherwise provided, be kept readily available for inspection 
by an appropriate ATF officer during business hours.



                Subpart Ca--Special (Occupational) Taxes

    Source: T.D. ATF-271, 53 FR 17544, May 17, 1988, unless otherwise 
noted.



Sec. 20.38  Liability for special tax.

    (a) Industrial alcohol permittee. Except as otherwise provided in 
this section, every person required to hold a permit under 26 U.S.C. 
5271 to procure, use, sell, and/or recover denatured distilled spirits 
for industrial purposes shall pay a special (occupational) tax at the 
rate of $250 per year. A separate tax shall be paid for each industrial 
alcohol permit which the permittee holds, and permits issued under this 
part shall not be valid unless special tax is paid. The tax shall be 
paid on or before the date of commencing business as an industrial 
alcohol permittee, and thereafter every year on or before July 1. On 
commencing business, the tax shall be computed from the first day of the 
month in which liability is incurred, through the following June 30. 
Thereafter, the tax shall be computed for the entire year (July 1 
through June 30).
    (b) Transition rule. For purposes of paragraph (a) of this section, 
a permittee engaged in denatured distilled spirits operations on January 
1, 1988, shall be treated as having commenced business on that date. The 
special tax imposed by this transition rule shall cover the period 
January 1, 1988, through June 30, 1988, and shall be paid on or before 
April 1, 1988.
    (c) Each place of business taxable. Special (occupational) tax 
liability is incurred at each place of business for which a permit under 
subpart D of this part to procure, use, sell, and/or recover denatured 
distilled spirits has been issued. A place of business means the entire 
office, plant or area of the business in any one location under the same 
proprietorship. Passageways, streets, highways, rail crossings, 
waterways, or partitions dividing the premises are not sufficient 
separation to require additional special tax, if the divisions of the 
premises are otherwise contiguous.
    (d) Exception for United States. Agencies and instrumentalities of 
the United States are not required to pay special tax under this 
subpart.
    (e) Exemption for certain educational institutions (effective July 
1, 1989). (1) On and after July 1, 1989, a scientific university, 
college of learning, or institution of scientific research, which holds 
a permit to procure and use specially denatured spirits under this part, 
is exempt from payment of special tax under this subpart if--
    (i) The university, college, or institution procures less than 25 
gallons of specially denatured spirits per calendar year; and
    (ii) Such spirits are procured for use exclusively for experimental 
or research use and not for consumption (other than organoleptic tests) 
or sale.
    (2) A scientific university, college of learning, or institution of 
scientific research, which holds a permit under this part, and which 
does not operate as described in paragraphs (e)(1)(i) and (ii) of this 
section during any calendar year, shall pay special tax as provided in 
Sec. 20.38(a) for the special tax year (July

[[Page 434]]

1 through June 30) commencing during that calendar year.

(26 U.S.C. 5143, 5276)

[T.D. ATF-271, 53 FR 17544, May 17, 1988, as amended by T.D. ATF-285, 54 
FR 12610, Mar. 28, 1989]



Sec. 20.38a  Special tax returns.

    (a) General. Special tax shall be paid by return. The prescribed 
return is ATF Form 5630.5, Special Tax Registration and Return. Special 
tax returns, with payment of tax, shall be filed with ATF in accordance 
with instructions on the form.
    (b) Preparation of ATF Form 5630.5. All of the information called 
for on Form 5630.5 shall be provided, including:
    (1) The true name of the taxpayer.
    (2) The trade name(s) (if any) of the business(es) subject to 
special tax.
    (3) The employer identification number (see Sec. 20.39).
    (4) The exact location of the place of business, by name and number 
of building or street, or if these do not exist, by some description in 
addition to the post office address. In the case of one return for two 
or more locations, the address to be shown shall be the taxpayer's 
principal place of business (or principal office, in the case of a 
corporate taxpayer).
    (5) The class(es) of special tax to which the taxpayer is subject.
    (6) Ownership and control information: That is, the name, position, 
and residence address of every owner of the business and of every person 
having power to control its management and policies with respect to the 
activity subject to special tax. ``Owner of the business'' shall include 
every partner, if the taxpayer is a partnership, and every person owning 
10 percent of more of its stock, if the taxpayer is a corporation. 
However, the ownership and control information required by this 
paragraph need not be stated if the same information has been previously 
provided to ATF in connection with a permit application, and if the 
information previously provided is still current.
    (c) Multiple locations and/or classes of tax. A taxpayer subject to 
special tax for the same period at more than one location or for more 
than one class of tax shall--
    (1) File one special tax return, ATF Form 5630.5, with payment of 
tax, to cover all such locations and classes of tax; and
    (2) Prepare, in duplicate, a list identified with the taxpayer's 
name, address (as shown on ATF Form 5630.5), employer identification 
number, and period covered by the return. The list shall show, by 
States, the name, address, and tax class of each location for which 
special tax is being paid. The original of the list shall be filed with 
ATF is accordance with instructions on the return, and the copy shall be 
retained at the taxpayer's principal place of business (or principal 
office, in the case of a corporate taxpayer) for the period specified in 
Sec. 20.267.
    (d) Signing of ATF Forms 5630.5--(1) Ordinary returns. The return of 
an individual proprietor shall be signed by the individual. The return 
of a partnership shall be signed by a general partner. The return of a 
corporation shall be signed by any officer. In each case, the person 
signing the return shall designate his or her capacity as ``individual 
owner,'' ``member of firm,'' or, in the case of a corporation, the title 
of the officer.
    (2) Fiduciaries. Receivers, trustees, assignees, executors 
administrators, and other legal representatives who continue the 
business of a bankrupt, insolvent, deceased person, etc., shall indicate 
the fiduciary capacity in which they act.
    (3) Agent or attorney in fact. If a return is signed by an agent or 
attorney in fact, the signature shall be preceded by the name of the 
principal and followed by the title of the agent or attorney in fact. A 
return signed by a person as agent will not be accepted unless there is 
filed, with the ATF office with which the return is required to be 
filed, a power of attorney authorizing the agent to perform the act.
    (4) Perjury statement. ATF Forms 5630.5 shall contain or be verified 
by a written declaration that the return has been executed under the 
penalties of perjury.

(26 U.S.C. 5142, 6061, 6065, 6151, 7011)

[[Page 435]]



Sec. 20.39  Employer identification number.

    (a) Requirement. The employer identification number (defined in 26 
CFR 301.7701-12) of the taxpayer who has been assigned such a number 
shall be shown on each special tax return, including amended returns, 
filed under this subpart. Failure of the taxpayer to include the 
employer identification number may result in the imposition of the 
penalty specified in Sec. 70.105 of this chapter.
    (b) Application for employer indentification number. Each taxpayer 
who files a special tax return, who has not already been assigned an 
employer identification number, shall file IRS Form SS-4 to apply for 
one. The taxpayer shall apply for and be assigned only one employer 
identification number, regardless of the number of places of business 
for which the taxpayer is required to file a special tax return. The 
employer identification number shall be applied for no later than 7 days 
after the filing of the taxpayer's first special tax return. IRS Form 
SS-4 may be obtained from the director of an IRS service center or from 
any IRS district director.
    (c) Preparation and filing of IRS Form SS-4. The taxpayer shall 
prepare and file IRS Form SS-4, together with any supplementary 
statement, in accordance with the instructions on the form or issued in 
respect to it.

(26 U.S.C. 6109)

                           Special Tax Stamps



Sec. 20.40  Issuance, distribution, and examination of special tax stamps.

    (a) Issuance of special tax stamps. Upon filing a properly executed 
return on ATF Form 5630.5 together with the full remittance, the 
taxpayer will be issued an appropriately designated special tax stamp. 
If the return covers multiple locations, the taxpayer will be issued one 
appropriately designated stamp for each location listed on the 
attachment required by Sec. 20.38a(c)(2), but showing, as to name and 
address, only the name of the taxpayer and the address of the taxpayer's 
principal place of business (or principal office in the case of a 
corporate taxpayer).
    (b) Distribution of special tax stamps for multiple locations. On 
receipt of the special tax stamps, the taxpayer shall verify that there 
is one stamp for each location listed on the attachment to ATF Form 
5630.5. The taxpayer shall designate one stamp for each location and 
shall type on each stamp the address of the business conducted at the 
location for which that stamp is designated. The taxpayer shall then 
forward each stamp to the place of business designated on the stamp.
    (c) Examination of special tax stamps. All stamps denoting payment 
of special tax shall be kept available for inspection by ATF officers, 
at the location for which designated, during business hours.

(26 U.S.C. 5143, 5146, 6806)



Sec. 20.40a  Changes in special tax stamps.

    (a) Change in name. If there is a change in the corporate or firm 
name, or in the trade name, as shown on ATF Form 5630.5, the permittee 
shall file an amended special tax return, as soon as practicable after 
the change, covering the new corporate or firm name, or trade names. No 
new special tax is required to be paid. The permittee shall attach the 
special tax stamp for endorsement of the change in name.
    (b) Change in proprietorship--(1) General. If there is a change in 
the proprietorship of an industrial alcohol operation, the successor 
shall pay a new special tax and obtain the required special tax stamps.
    (2) Exemption for certain successors. Persons having the right of 
succession provided for in paragraph (c) of this section may carry on 
the business for the remainder of the period for which the special tax 
was paid, without paying a new special tax, if within 30 days after the 
date on which the successor begins to carry on the business, the 
successor files a special tax return on ATF Form 5630.5 with ATF, which 
shows the basis of succession. A person who is a successor to a business 
for which special tax has been paid and who fails to register the 
succession is liable for special tax computed from the first day of the 
calendar month in which he or she began to carry on the business.

[[Page 436]]

    (c) Persons having right of succession. Under the conditions 
indicated in paragraph (b)(2) of this section, the right of succession 
will pass to certain persons in the following cases:
    (1) Death. The widowed spouse or child, or executor, administrator, 
or other legal representative of the taxpayer;
    (2) Succession of spouse. A husband or wife succeeding to the 
business of his or her spouse (living);
    (3) Insolvency. A receiver or trustee in bankruptcy, or an assignee 
for benefit of creditors;
    (4) Withdrawal from firm. The partner or partners remaining after 
death or withdrawal of a member.
    (d) Change in location. If there is a change in location of a 
taxable place of business, the proprietor shall, within 30 days after 
the change, file with ATF an amended special tax return covering the new 
location. The proprietor shall attach the special tax stamp or stamps, 
for endorsement of the change in location. No new special tax is 
required to be paid. However, if the proprietor does not file the 
amended return within 30 days, the proprietor is required to pay a new 
special tax and obtain a new special tax stamp.

(26 U.S.C. 5143, 7011)



              Subpart D--Qualification of Dealers and Users

                  Application for Permit, Form 5150.22



Sec. 20.41  Application for industrial alcohol user permit.

    (a) Dealers. A person who desires to withdraw and deal in specially 
denatured spirits shall, before commencing business, file an application 
on Form 5150.22 for, and obtain a permit, Form 5150.9.
    (b) Users. A person who desires to withdraw and use or recover 
specially denatured spirits shall, before commencing business, file an 
application on Form 5150.22 for, and obtain a permit, Form 5150.9. The 
provisions of this paragraph also apply to persons desiring to recover 
denatured spirits from articles.
    (c) Filing. All applications and necessary supporting documents, as 
required by this subpart, shall be filed with the appropriate ATF 
officer. All data, written statements, certifications, affidavits, and 
other documents submitted in support of the application are considered a 
part of the application.
    (1) Applications filed as provided in this section, shall be 
accompanied by evidence establishing the authority of the officer or 
other person to execute the application.
    (2) A State, political subdivision thereof, or the District of 
Columbia, may specify in the application that it desires a single permit 
authorizing the withdrawal and use of specially denatured spirits in a 
number of institutions under it control. In this instance, the 
application, Form 5150.22, or an attachment, shall clearly show the 
method of distributing and accounting for the specially denatured 
spirits to be withdrawn.
    (d) Exceptions. (1) The proprietor of a distilled spirits plant 
qualified under part 19 of this chapter, who sells specially denatured 
spirits stored at the plant premises is not required to qualify as a 
dealer under this part.
    (2) A permittee who was previously qualified on the effective date 
of this regulation shall not be required to requalify under this part.

[T.D. ATF-199, 50 FR 9162, Mar. 6, 1985; 50 FR 20099, May 14, 1985]



Sec. 20.42  Data for application, Form 5150.22.

    (a) Unless waived under Sec. 20.43, each application on Form 5150.22 
shall include as applicable, the following information:
    (1) Serial number and purpose for which filed.
    (2) Name and principal business address.
    (3) Based on the bona fide requirements of the applicant, the 
estimated quantity of all formulations of specially denatured spirits, 
in gallons, which will be procured during a 12-month period.
    (4) Location, or locations where specially denatured spirits will be 
sold or used if different from the business address.

[[Page 437]]

    (5) Statement that specially denatured spirits will be stored in 
accordance with the requirements of this part.
    (6) For user applications, statement as to the intended use (e.g. 
cosmetics, external medicines, solvents, fuels, mouthwashes, laboratory 
uses, inks, etc.) to be made of the specially denatured spirits, and 
whether recovery, restoration, and redenaturation processes will be 
used.
    (7) Statement as to the type of business organization and of the 
persons interested in the business, supported by the items of 
information listed in Sec. 20.45.
    (8) Listing of the principal equipment to be used in recovery 
processes, including processing tanks, storage tanks, and equipment for 
recovery, restoration, and redenaturation of denatured spirits 
(including the serial number, kind, capacity, names and addresses of 
manufacturer and owner of distilling apparatus along with intended use).
    (9) List of trade names under which the applicant will conduct 
operations, and the offices where these names are registered.
    (10) Listing of the titles of offices, the incumbents of which are 
responsible for the specially denatured spirits activities of the 
business and are authorized by the articles of incorporation, the 
bylaws, or the board of directors to act and sign on behalf of the 
applicant.
    (11) Other information and statements as the appropriate ATF officer 
may require to establish that the applicant is entitled to the permit. 
In the case of a corporation or other legal entity, the appropriate ATF 
officer may require information which establishes that the officers, 
directors and principal stockholders whose names are required to be 
furnished under Sec. 20.45 (a)(2) and (c) have not violated or conspired 
to violate any law of the United States relating to intoxicating liquor 
or have been convicted of any offense under Title 26, U.S.C., punishable 
as a felony or of any conspiracy to commit such offense.
    (b) If any of the information required by paragraphs (a)(4) through 
(a)(10) and any information which may be required under paragraph 
(a)(11) of this section is on file with any appropriate ATF officer, the 
applicant may incorporate this information by reference by stating that 
the information is made a part of the application.



Sec. 20.43  Exceptions to application requirements.

    (a) The appropriate ATF officer may waive detailed application and 
supporting data requirements, other than the requirements of paragraphs 
(a)(1) through (a)(6) and (a)(9) of Sec. 20.42, and paragraph (a)(8) of 
that section as it relates to recovery, restoration and redistillation, 
in the case of--
    (1) All applications, Form 5150.22, filed by States or political 
subdivisions thereof or the District of Columbia, and
    (2) Applications, Form 5150.22, filed by applicants whose annual 
withdrawal and sale or use of specially denatured spirits does not 
exceed 5,000 gallons.
    (b) The waiver, provided for in this section will terminate when the 
permittee, other than a State or a political subdivision thereof, or the 
District of Columbia, files an application to amend its permit, Form 
5150.9, to increase the annual withdrawal and sale or use of specially 
denatured spirits to an amount in excess of 5,000 gallons. In this case, 
the permittee shall also furnish information required by 
Sec. 20.56(a)(2).



Sec. 20.44  Disapproval of application.

    The appropriate ATF officer may, in accordance with part 71 of this 
chapter, disapprove an application for a permit to withdraw and deal or 
use denatured spirits, if on examination of the application (or 
inquiry), the appropriate ATF officer has reason to believe that:
    (a) The applicant is not authorized by law and regulations to 
withdraw and deal in or use specially denatured spirits;
    (b) The applicant (including, in the case of a corporation, any 
officer, director, or principal stockholder, or, in the case of a 
partnership, a partner) is, by reason of their business experience, 
financial standing, or trade connections, not likely to maintain 
operations in compliance with 26 U.S.C.

[[Page 438]]

Chapter 51, or regulations issued under this part;
    (c) The applicant has failed to disclose any material information 
required, or has made any false statement as to any material fact, in 
connection with the application; or
    (d) The premises at which the applicant proposes to conduct the 
business are not adequate to protect the revenue.



Sec. 20.45  Organizational documents.

    The supporting information required by Sec. 20.42(a)(7) includes, as 
applicable:
    (a) Corporate documents. (1) Certified true copy of the certificate 
of incorporation, or certified true copy of certificate authorizing the 
corporation to operate in the State where the premises are located (if 
other than that in which incorporated);
    (2) Certified list of names and addresses of officers and directors, 
along with a statement designating which corporate offices, if 
applicable, are directly responsible for the specially denatured spirits 
portion of the business; and
    (3) Statement showing the number of shares of each class of stock or 
other evidence of ownership, authorized and outstanding, the par value, 
and the voting rights of the respective owners or holders.
    (b) Articles of partnership. True copy of the articles of 
partnership or association, if any, or certificate of partnership or 
association where required to be filed by any State, county, or 
municipality.
    (c) Statement of interest. (1) Names and addresses of persons owning 
10% or more of each of the classes of stock in the corporation, or legal 
entity, and the nature and amount of the stockholding or other interest 
of each, whether such interest appears in the name of the interested 
party or in the name of another for him or her. If a corporation is 
wholly owned or controlled by another corporation, persons owning 10% or 
more of each of the classes of stock of the parent corporation are 
considered to be the persons interested in the business of the 
subsidiary, and the names and addresses of such persons must be 
submitted to the appropriate ATF officer if specifically requested.
    (2) In the case of an individual owner or partnership, name and 
address of every person interested in the business, whether such 
interest appears in the name of the interested party or in the name of 
another for the interested person.

[T.D. ATF-199, 50 FR 9162, Mar. 6, 1985, as amended by T.D. ATF-435, 66 
FR 5474, Jan. 19, 2001]

              Industrial Alcohol User Permit, ATF F 5150.9



Sec. 20.48  Conditions of permits.

    (a) Permits to withdraw and deal in or use specially denatured 
spirits will designate the acts which are permitted, and include any 
limitations imposed on the performance of these acts. All of the 
provisions of this part relating to the use, recovery, restoration or 
redistillation of denatured spirits or articles are considered to be 
included in the provisions and conditions of the permit, the same as if 
set out in the permit.
    (b) An applicant need not have formulas and statements of processes, 
approved by the appropriate ATF officer, prior to the issuance of a 
permit by the appropriate ATF officer.
    (c) A permittee shall not use specially denatured spirits in the 
manufacture or production of any article unless the appropriate ATF 
officer has approved the formula on Form 5150.19 or the article is 
covered by an approved general-use formula.



Sec. 20.49  Duration of permits.

    Permits to withdraw and deal in or use specially denatured spirits 
are continuing unless automatically terminated by the terms thereof, 
suspended or revoked as provided in Sec. 20.51, or voluntarily 
surrendered. The provisions of Sec. 20.57 are considered part of the 
terms and conditions of all permits.



Sec. 20.50  Correction of permits.

    If an error on a permit is discovered, the permittee shall 
immediately return the permit to the appropriate ATF officer for 
correction.

[T.D. ATF-199, 50 FR 9162, Mar. 6, 1985; 50 FR 20099, May 14, 1985]

[[Page 439]]



Sec. 20.51  Suspension or revocation of permits.

    The appropriate ATF officer may institute proceedings under part 71 
of this chapter to suspend or revoke a permit whenever the appropriate 
ATF officer has reason to believe that the permittee:
    (a) Has not in good faith complied with the provisions of 26 U.S.C. 
Chapter 51, or regulations issued under that chapter;
    (b) Has violated the conditions of that permit;
    (c) Has made any false statements as to any material fact in the 
application for the permit;
    (d) Has failed to disclose any material information required to be 
furnished;
    (e) Has violated or conspired to violate any law of the United 
States relating to intoxicating liquor or has been convicted of an 
offense under Title 26, U.S.C., punishable as a felony or of any 
conspiracy to commit such offense;
    (f) Is, by reason of its operations, no longer warranted in 
procuring and dealing in or using specially denatured spirits authorized 
by the permit; or
    (g) Has not engaged in any of the operations authorized by the 
permit for a period of more than 2 years.



Sec. 20.52  Rules of practice in permit proceedings.

    The regulations of part 71 of this chapter apply to the procedure 
and practice in connection with the disapproval of any application for a 
permit and in connection with suspension or revocation of a permit.



Sec. 20.53  Powers of attorney.

    An applicant or permittee shall execute and file a Form 1534, in 
accordance with the instructions on the form, for each person authorized 
to sign or to act on behalf of the applicant or permittee. Form 1534 is 
not required for a person whose authority is furnished in accordance 
with Sec. 20.42(a)(10).



Sec. 20.54  Photocopying of permits.

    A permittee may make photocopies of its permit exclusively for the 
purpose of furnishing proof of authorization to withdraw specially 
denatured spirits from a distilled spirits plant and other persons 
authorized under this part to deal in specially denatured spirits.



Sec. 20.55  Posting of permits.

    Permits issued under this part shall be kept posted and available 
for inspection on the permit premises.

                  Changes After Original Qualification



Sec. 20.56  Changes affecting applications and permits.

    (a) General--(1) Changes affecting application. When there is a 
change relating to any of the information contained in, or considered a 
part of the application on Form 5150.22 for a permit, the permittee 
shall, within 30 days (except as otherwise provided in this subpart) 
file a written notice with the appropriate ATF officer to amend the 
application. However, a change in the information required by 
Sec. 20.42(a)(6) caused by approval of a new formula or statement of 
process shall not require filing a new application unless the approval 
is the permittee's first statement of process covering recovery 
operations.
    (2) Changes affecting waivers. When any waiver under Sec. 20.43 is 
terminated by a change to the application, the permittee shall include 
the current information as to the item previously waived with the 
written notice required in paragraph (a)(1) of this section.
    (3) Changes affecting permit. When the terms of a permit are 
affected by a change, the written notice required by paragraph (a)(1) of 
this section (except as otherwise provided in this subpart) will serve 
as an application to amend the permit.
    (4) Form of notice. A written notice to amend an application on Form 
5150.22 shall--
    (i) Identify the permittee;
    (ii) Contain the permit identification number;
    (iii) Explain the nature of the change and contain any required 
supporting documents;
    (iv) Identify the serial number of the applicable application, Form 
5150.22; and

[[Page 440]]

    (v) Be consecutively numbered and signed by the permittee or any 
person authorized to sign on behalf of the permittee.
    (b) Amended application. The appropriate ATF officer may require a 
permittee to file an amended application on Form 5150.22 when the number 
of changes to the previous application are determined to be excessive, 
or when a permittee has not timely filed the written notice prescribed 
in paragraph (a)(1) of this section. If items on the amended application 
remain unchanged, they will be marked ``No change since Form 5150.22, 
Serial No. --------.''
    (c) Changes in officers, directors and stockholders--(1) Officers. 
In the case of a change in the officers listed under the provisions of 
Sec. 20.45(a)(2), the notice required by paragraph (a)(1) of this 
section shall only apply (unless otherwise required, in writing, by the 
appropriate ATF officer) to those offices, the incumbents of which are 
responsible for the operations covered by this part.
    (2) Directors. In the case of a change in the directors listed under 
the provisions of Sec. 20.45(a)(2), the notice required by paragraph 
(a)(1) of this section shall reflect the changes.
    (3) Stockholders. In lieu of reporting all changes, within 30 days, 
to the list of stockholders furnished under the provisions of 
Sec. 20.45(c)(1), a permittee may, upon filing written notice to the 
appropriate ATF officer and establishing a reporting date, file an 
annual notice of changes. The notice of changes in stockholders does not 
apply if the sale or transfer of capital stock results in a change in 
ownership or control which is required to be reported under Sec. 20.57.

(Approved by the Office of Management and Budget under control number 
1512-0336)



Sec. 20.57  Automatic termination of permits.

    (a) Permit not transferable. Permits issued under this part are not 
transferable. In the event of the lease, sale, or other transfer of such 
a permit. or of the operations authorized by the permit, the permit 
shall, except as provided for in this section, automatically terminate.
    (b) Corporations. (1) If actual or legal control of any corporation 
holding a permit issued under this part changes, directly or indirectly, 
whether by reason of a change in stock ownership or control (in the 
permittee corporation or any other corporation), by operation of law, or 
in any other manner, the permittee shall, within 10 days of the change, 
give written notice to the appropriate ATF officer. Within 30 days of 
the change, the permittee shall file an application for a new permit, 
Form 5150.22 with supporting documents. If an application for a new 
permit is not filed on Form 5150.22 within 30 days of the change, the 
outstanding permit will automatically terminate.
    (2) If an application for a new permit is filed on Form 5150.22 
within the 30-day period prescribed in paragraph (b)(1) of this section, 
the outstanding permit may remain in effect until final action is taken 
on the application. When final action is taken, the outstanding permit 
will automatically terminate and shall be forwarded to the appropriate 
ATF officer.
    (c) Proprietorships. In the event of a change in proprietorship of a 
business of a permittee (as for instance, by reasons of incorporation, 
the withdrawal or taking in of additional partners, or succession by any 
person who is not a fiduciary), the successor shall file written notice 
and make application on Form 5150.22 for a new permit, under the same 
conditions provided for in paragraph (b) of this section. The successor 
may adopt the formulas and statements of process of the predecessor.

(Approved by the Office of Management and Budget under control number 
1512-0336)

[T.D. ATF-199, 50 FR 9162, Mar. 6, 1985; 50 FR 20099, May 14, 1985]



Sec. 20.58  Adoption of documents by a fiduciary.

    If the business covered by a permit issued under this part, is to be 
operated by a fiduciary, the fiduciary may, in lieu of qualifying as a 
new proprietor, file a written notice, and any necessary supporting 
documents, to amend the predecessor's permit. The fiduciary shall 
furnish a consent of surety on Form 1533, extending the terms of the 
predecessor's bond, if any, and may

[[Page 441]]

adopt the formulas and statements of process of the predecessor. The 
effective date of the qualifying documents filed by a fiduciary shall 
coincide with the effective date of the court order or the date 
specified therein for the fiduciary to assume control. If the fiduciary 
was not appointed by the court, the date the fiduciary assumed control 
shall coincide with the effective date of the filing of the qualifying 
documents.



Sec. 20.59  Continuing partnerships.

    (a) General. If, under the laws of a particular State, a partnership 
is not teminated on death or insolvency of a partner, but continues 
until final settlement of the partnership affairs is completed, and the 
surviving partner has the exclusive right to the control and possession 
of the partnership assets for the purpose of liquidation and settlement, 
the surviving partner may continue to withdraw and use specially 
denatured spirits under the prior qualifications of the partnership.
    (b) Bonds. If a bond was required under the previous partnership, 
the surviving partner shall furnish a consent of surety, in which the 
surety and surviving partner agree to remain liable.
    (c) Requalification. If a surviving partner acquires the business on 
completion of the settlement of the partnership, that partner shall 
qualify as a new proprietor, from the date of acquisition, under the 
same conditions and limitations prescribed in Sec. 20.57(c).
    (d) More than one partner. The rule set forth in this section also 
applies if there is more than one surviving partner.

[T.D. ATF-199, 50 FR 9162, Mar. 6, 1985; 50 FR 20099, May 14, 1985]



Sec. 20.60  Change in name of permittee.

    When the only change is a change in the individual, firm, or 
corporation name, a permittee may not conduct operations under the new 
name until a written notice, accompanied by necessary supporting 
documents, to amend the application and permit has been filed and an 
amended permit issued by the appropriate ATF officer.

(Approved by the Office of Management and Budget under control number 
1512-0336)

[T.D. ATF-199, 50 FR 9162, Mar. 6, 1985; 50 FR 20099, May 14, 1985]



Sec. 20.61  Change in trade name.

    If there is to be a change in, or addition of, a trade name, the 
permittee may not conduct operations under the new trade name until a 
written notice has been filed and an amended permit has been issued by 
the appropriate ATF officer. A new bond or consent of surety is not 
required for changes in trade names.

(Approved by the Office of Management and Budget under control number 
1512-0336)



Sec. 20.62  Change in location.

    (a) Permit. When there is to be a change in location, a permittee 
may not conduct operations at the new location until a written notice, 
accompanied by necessary supporting information to amend the application 
and permit has been filed and an amended permit issued by the 
appropriate ATF officer.
    (b) Bond. If required to file a bond, the permittee shall furnish a 
consent of surety on Form 1533 or a new bond to cover the new location.

(Approved by the Office of Management and Budget under control number 
1512-0336)

T.D. ATF-199, 50 FR 9162, Mar. 8, 1985, as amended by T.D. ATF- 435, 66 
FR 5474, jan. 19, 2001]



Sec. 20.63  Adoption of formulas and statements of process.

    (a) The adoption by a successor (proprietorship or fiduciary) of a 
predecessor's formulas and statements of process as provided in 
Sec. 20.57(c), and Sec. 20.58, will be in the form of a certificate 
submitted to the appropriate ATF officer.
    (b) The certificate will contain, as applicable, (1) a list of all 
approved formulas or statements of process in which specially denatured 
spirits are used or recovered, (2) the formulas of specially denatured 
spirits used, (3) the ATF laboratory number of the sample

[[Page 442]]

(if any), (4) the date of approval of Form 1479-A or serial number of 
Form 5150.19, and (5) the applicable code number for the article or 
process. In addition, the certificate will contain the name of the 
successor followed by the phrase ``Formula of -------- (Name of 
predecessor) is hereby adopted.''

(Approved by the Office of Management and Budget under control number 
1512-0336)

[T.D. ATF-199, 50 FR 9162, Mar. 6, 1985; 50 FR 20099, May 14, 1985, as 
amended by ATF-332, 57 FR 40849, Sept. 8, 1992]



Sec. 20.64  Return of permits.

    Following the issuance of a new or amended permit, the permittee 
shall (a) obtain and destroy all photocopies of the previous permit from 
its suppliers, and (b) return the original of the previous permit to the 
appropriate ATF officer.

                           Registry of Stills



Sec. 20.66  Registry of stills.

    The provisions of subpart C of part 29 of this chapter are 
applicable to stills or distilling apparatus located on the premises of 
a permittee used for distilling. As provided under Sec. 29.55, the 
listing of a still in the permit application (Form 5150.22), and 
approval of the application, constitutes registration of the still.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1355, as amended (26 U.S.C. 5179))

[T.D. ATF-207, 50 FR 23682, June 5, 1985]

                  Permanent Discontinuance of Business



Sec. 20.68  Notice of permanent discontinuance.

    (a) Notice. When a permittee permanently discontinues business, a 
written notice shall be filed with the appropriate ATF officer to cover 
the discontinuance. The notice will be accompanied by the permit, and 
contain--
    (1) A request to cancel the permit,
    (2) A statement of the disposition made of all specially denatured 
spirits, as required in Sec. 20.234, and
    (3) The date of discontinuance.
    (b) Bonds. The bond of a permittee may not be canceled until all 
specially denatured spirits have been properly disposed of as required 
by this part.
    (c) Final Reports. The written notice required by this paragraph 
will also be accompanied by a report on Form 5150.18 covering the 
discontinuance and marked ``Final Report.''

(Approved by the Office of Management and Budget under control number 
1512-0336)



                 Subpart E--Bonds and Consents of Surety



Sec. 20.71  Bond.

    (a) Except as provided in paragraph (d) of this section, each 
permittee who intends to withdraw more than 5000 gallons of specially 
denatured spirits per annum shall file a bond, Form 5150.25, before 
issuance of the permit. The penal sum of the bond shall be as follows:

------------------------------------------------------------------------
        Maximum annual withdrawals                 Bond penal sum
------------------------------------------------------------------------
0 to 5,000 gallons........................  No bond required.
Over 5,000 but not over 500,000 gallons...  $2,000 plus $1,000 for each
                                             5,000 gallons of
                                             withdrawals over 10,000
                                             gallons.
Over 500,000 gallons......................  $100,000.
------------------------------------------------------------------------

    (b) The following method may be used to compute your penal sum:
    (1) If the total of your estimated annual withdrawals is divisible 
by 5,000, divide it by 5. The result is your penal sum in dollars.
    (2) If the total of your estimated annual withdrawals is not 
divisible by 5,000, increase it to the next highest number which is 
divisible by 5,000 and divide that number by 5. The result is your penal 
sum in dollars.
    (c) The following are some examples:

------------------------------------------------------------------------
                                                                  Your
                If your annual withdrawals are                 penal sum
                                                                   is
------------------------------------------------------------------------
25,000 gallons...............................................     $5,000
84,500 gallons...............................................     17,000
335,000 gallons..............................................     67,000
------------------------------------------------------------------------

    (d) Any bond previously approved on Form 1475 or 1480 which fulfills 
the penal sum requirements of paragraph (b) of this section shall remain 
valid and will be regulated by the same provisions of this subpart as it 
refers to bonds on ATF F 5150.25. No bond is required if the permittee 
is a State, any

[[Page 443]]

political subdivision of a State, or the District of Columbia.

[T.D. ATF-199, 50 FR 9162, Mar. 6, 1985, as amended by 50 FR 20099, May 
14, 1985]



Sec. 20.72  Evaluation of bond penal sum.

    (a) Permittee's evaluation. Each permittee shall, for the period 
from July 1 through the following June 30, make an annual evaluation of 
the permittee's previous and future needs for specially denatured 
spirits. Based on the results of this evaluation:
    (1) The permittee shall file a new bond in increased penal sum, if 
the existing bond no longer meets the penal sum requirements of 
Sec. 20.71, or
    (2) The permittee may file a new bond in decreased penal sum, if the 
existing bond exceeds the penal sum requirements of Sec. 20.71.
    (b) Authority of appropriate ATF officer. The appropriate ATF 
officer may, at any time, require a permittee to file a new bond in a 
larger penal sum, or require a satisfactory explanation why a new bond 
should not be filed.



Sec. 20.73  Corporate surety.

    (a) Surety bonds required by this part may be given only with 
corporate sureties holding certificates of authority from, and subject 
to the limitations prescribed by, the Secretary in the current revision 
of Treasury Department Circular No. 570.
    (b) Treasury Department Circular No. 570 is published in the Federal 
Register annually as of the first workday in July. As they occur, 
interim revisions of the circular are published in the Federal Register. 
Copies may be obtained from the Surety Bond Branch, Financial Management 
Service, Department of the Treasury, Washington, DC 20226.

[T.D. ATF-199, 50 FR 9162, Mar. 6, 1985; 50 FR 20099, May 14, 1985]



Sec. 20.74  Filing of powers of attorney.

    Each bond, and each consent to changes in the terms of a bond, must 
be accompanied by a power of attorney authorizing the agent or officer 
who executed the bond or consent to act on behalf of the surety. The 
appropriate ATF officer who is authorized to approve the bond may 
require additional evidence of the authority of the agent or officer to 
execute the bond or consent.



Sec. 20.75  Execution of powers of attorney.

    The power of attorney shall be prepared on a form provided by the 
surety company and executed under the corporate seal of the company. If 
the power of attorney submitted is not a manually signed original, it 
shall be accompanied by certification of its validity.



Sec. 20.76  Deposit of securities instead of corporate surety.

    Instead of corporate surety, the principal may pledge and deposit as 
surety for the bond, securities which are transferable and which are 
guaranteed as to both interest and principal by the United States, under 
the provisions of 31 CFR part 225.



Sec. 20.77  Consents of surety.

    Consents of surety to changes in the terms of bonds shall be 
executed on Form 1533 by the principal and by the surety with the same 
formality and proof of authority as is required for the execution of 
bonds.



Sec. 20.78  Strengthening bonds.

    (a) When the penal sum of any bond becomes insufficient, the 
principal shall either give a strengthening bond with the same surety to 
attain a sufficient penal sum, or give a new bond to cover the entire 
liability. A strengthening bond will not be approved if it bears any 
notation which is intended or which may be considered:
    (1) To be a release of any former bond, or
    (2) As limiting the amount of any bond to less than its full penal 
sum.
    (b) Strengthening bonds shall show the date of execution and the 
effective date, and shall be marked ``Strengthening Bond.''



Sec. 20.79  Superseding bonds.

    Superseding bonds are required when insolvency or removal of any 
surety occurs. Superseding bonds may also be required at the discretion 
of the appropriate ATF officer when any other contingency affects the 
validity or impairs

[[Page 444]]

the sufficiency of the bond. If the principal intends to continue the 
transactions to which the bond relates after the surety, under 
Sec. 20.80, has applied for relief of liability under the bond, the 
principal shall file a valid superseding bond to be effective on or 
before the date specified in the surety's application for relief of 
liability. Superseding bonds shall show the date of execution and the 
effective date, and shall be marked ``Superseding Bond.'' If the 
principal does not file a superseding bond when required, the principal 
may not conduct any operation under the permit.



Sec. 20.80  Notice by surety of termination of bond.

    A surety on any bond required by this part may at any time, in 
writing, notify the principal and appropriate ATF officer with whom the 
bond is filed, that the surety desires (after a specified date) to be 
relieved of liability under the bond. The specified date may not be less 
than 90 days after the date the notice is received by the appropriate 
ATF officer. The surety shall also file with the appropriate ATF officer 
an acknowledgment or other proof of service of the notice of termination 
on the principal.

(Approved by the Office of Management and Budget under control number 
1512-0336)



Sec. 20.81  Termination of rights and liability under a bond.

    (a) If the notice of termination given by the surety is not 
withdrawn, in writing, the rights of the principal as supported by the 
bond terminate on the date named in the notice. The surety is relieved 
from liability under a bond as to any operations which are wholly 
subsequent to:
    (1) The date named in a notice of termination (Sec. 20.80); or
    (2) The effective date of a superseding bond (Sec. 20.79); or
    (3) The date of approval of the discontinuance of operations by the 
principal.
    (b) If the principal fails to file a valid superseding bond before 
the date on which the surety desires to be relieved from liability under 
the bond, the surety, notwithstanding the release from liability as 
specified in paragraph (a)(1) of this section, shall remain liable under 
the bond for all specially denatured spirits or articles on hand or in 
transit to the principal on that date until the spirits or articles have 
been lawfully disposed of or a new bond has been filed by the principal.



Sec. 20.82  Release of pledged securities.

    Securities of the United States, pledged and deposited as provided 
in Sec. 20.76, will be released only under the provisions of 31 CFR part 
225. When the appropriate ATF officer is satisfied that they may be 
released, the appropriate ATF officer shall fix the date or dates on 
which a part or all of the securities may be released. At any time 
before the release of the securities, the appropriate ATF officer may 
extend the date of release for any additional length of time considered 
necessary.



              Subpart F--Formulas and Statements of Process



Sec. 20.91  Formula.

    (a) Each article made with specially denatured spirits shall be made 
in accordance with (1) an approved formula, Form 5150.19, or (2) an 
approved general-use formula prescribed in this subpart, approved by the 
appropriate ATF officer as an alternate method, or published as an ATF 
Ruling in the ATF Bulletin. The manufacturer shall file Form 5150.19, 
along with the sample(s) required by Sec. 20.92, and obtain an approved 
formula before manufacturing the article.
    (b) An article made in accordance with a formula on Form 1479-A 
approved under previous regulations in part 211 of this chapter will be 
considered to comply with the requirements of this subpart.
    (c) Any person who has approved formulas or statements of process, 
Form 1479-A or Form 5150.19, which have been discontinued or have become 
obsolete, may submit these formulas or statements of process to the 
appropriate ATF officer for cancellation.



Sec. 20.92  Samples.

    (a) For each formula submitted in accordance with Sec. 20.91 
covering a toilet preparation made with S.D.A. Formula No. 39-C and 
containing an essential

[[Page 445]]

oil, the manufacturer shall submit a 0.5-ounce sample of the essential 
oil used in the article. The appropriate ATF officer may also require 
the manufacturer to submit a sample of any ingredient which is not 
adequately described in the formula.
    (b) For each formula submitted in accordance with Sec. 20.91, the 
appropriate ATF officer may require the manufacturer to submit a 4-ounce 
sample of the finished article.
    (c) The appropriate ATF officer may, at any time, require submission 
of samples of:
    (1) Any ingredient used in the manufacture of an article, or;
    (2) Any article.

[T.D. ATF- 199, 50 FR 1962, Mar. 6, 1985, as amended by T.D. ATF-435, 66 
FR 5474, Jan. 19, 2001]



Sec. 20.93  Changes to formulas.

    (a) General. Except as provided in paragraph (b) of this section, 
any change of ingredients or quantities of ingredients listed in an 
appoved formula shall constitute a different article for which a 
different approved formula is required by Sec. 20.91.
    (b) Exceptions. A different approved formula is not required for the 
following--
    (1) A change from an ingredient identified in the formula by a brand 
name to the same quantity of a chemically identical ingredient acquired 
under a different brand name, or
    (2) A change of an ingredient which is a coloring material.



Sec. 20.94  Statement of process.

    (a) Manufacturers shall submit a statement of process on Form 
5150.19, in accordance with paragraph (b) of this section, covering the 
following activities:
    (1) If specially denatured spirits are used for laboratory or 
mechanical purposes, other than use of S.D.A. Formula No. 3-A, 3-C, or 
30 for laboratory or mechanical purposes not in the development of a 
product;
    (2) If specially denatured spirits are used in a manufacturing 
process in which none of the specially denatured spirits remains in the 
finished product;
    (3) If specially denatured spirits, completely denatured alcohol, or 
articles are used in a manufacturing process and are to be recovered; or
    (4) If recovered denatured spirits are to be redenatured.
    (b) The manufacturer shall submit a separate Form 5150.19 for each 
activity described in paragraph (a) of this section describing the 
process completely.
    (1) If specially denatured spirits are used for laboratory or 
mechanical purposes, other than use of S.D.A. Formula No. 3-A, 3-C, or 
30 for laboratory or mechanical purposes not in the development of a 
product, the Form 5150.19 shall identify the formula number of specially 
denatured spirits, a description of the laboratory or mechanical use, 
and the approximate annual quantity to be used.
    (2) If the Form 5150.19 is submitted covering activities described 
in paragraphs (a)(2), (a)(3), or (a)(4) of this section, the Form 
5150.19 shall also contain the following information:
    (i) Flow diagrams shall be submitted with the Form 5150.19 clearly 
depicting the equipment in its relative operating sequence, with 
essential connecting pipelines and valves. All major equipment shall be 
identified as to its use. The direction of flow through the pipelines 
shall be indicated in the flow diagram. The flow diagram, shall be 
accompanied by a written description of the flow of materials through 
the system.
    (ii) The statement of process shall describe the chemical 
composition of the recovered spirits. The statement of process shall be 
accompanied by a statement of the intended use of the recovered spirits.



Sec. 20.95  Developmental samples of articles.

    (a) A user may use limited quantities of specially denatured spirits 
in the manufacture of samples of articles for submission in accordance 
with Sec. 20.92.
    (b) A user may prepare developmental samples of articles, of limited 
sizes and quantities, for one-time shipment to prospective customers. 
The user shall maintain records showing--
    (1) The types of product samples prepared,
    (2) The size and number of samples sent, on a one-time basis, to 
each prospective customer, and

[[Page 446]]

    (3) The names and addresses of the prospective customers.

(Approved by the Office of Management and Budget under control number 
1512-0337)

[T.D. ATF- 199, 50 FR 1962, Mar. 6, 1985, as amended by T.D. ATF-435, 66 
FR 5474, Jan. 19, 2001]

                            Approval Policies



Sec. 20.100  General.

    (a) In addiiton to the limitations in this part, and if necessary to 
protect the revenue or public safety, the appropriate ATF officer, when 
approving Form 5150.19 may:
    (1) Specify on the Form 5150.19 the size of containers in which any 
article may be sold;
    (2) Specify the maximum quantity that may be sold to any person at 
one time; or
    (3) Restrict the sale of an article to a specific class of vendee 
and for a specific use.
    (b) Approval by the appropriate ATF officer of formulas, samples, or 
statements of process means only that they meet the standards of the 
Bureau of Alcohol, Tobacco and Firearms. The approval does not require 
the issuance of a permit under subpart D of this part to withdraw and 
use specially denatured spirits in those formulas, articles, or 
statements of process.

[T.D. ATF- 199, 50 FR 1962, Mar. 6, 1985, as amended by T.D. ATF-435, 66 
FR 5474, Jan. 19, 2001]



Sec. 20.101  Drafting formulas.

    (a) In preparing Form 5150.19, the manufacturer shall, for each 
ingredient containing ethyl alcohol, identify--
    (1) The percent alcohol by volume of the ingredient, if known, and
    (2) The supplier's name and serial number or approval date of the 
supplier's approved formula covering the manufacture of the ingredient.
    (b) In preparing Form 5150.19, manufacturers may--
    (1) Identify ingredients by generic names rather than brand names, 
and
    (2) Identify quantities of ingredients used in ranges rather than in 
finite quantities.
    (c) If ranges of ingredients are used, as authorized by paragraph 
(b)(2) of this section--
    (1) The lower range shall not be zero for any ingredient, and
    (2) The range for usage of specially denatured spirits shall not 
exceed 5%.



Sec. 20.102  Bay rum, alcoholado, or alcoholado-type toilet waters.

    All bay rum, alcoholado, or alcoholado-type toilet waters made with 
specially denatured alcohol shall contain:
    (a) 1.10 grains of benzyldiethyl (2:6-xylylcarbamoyl methyl) 
ammonium benzoate (Bitrex (THS-839)) in each gallon of finished product 
in addition to any of this material used as a denaturant in the 
specially denatured alcohol, or
    (b) 32 grains of tartar emetic in each gallon of finished product, 
or
    (c) 0.5 avoirdupois ounce of sucrose octaacetate in each gallon of 
finished product.



Sec. 20.103  Articles made with S.D.A. Formula No. 39-C.

    Each article made with S.D.A. Formula No. 39-C shall contain in each 
gallon of finished product not less than 2 fluid ounces of perfume 
material (essential oils, isolates, aromatic chemicals, etc.) 
satisfactory to the appropriate ATF officer.



Sec. 20.104  Residual alcohol in spirit vinegar.

    Commercial strength (40 grain) vinegar made from specially denatured 
alcohol may contain trace amounts of residual alcohol, not to exceed 0.5 
percent of alcohol by volume, in the finished product.

                          General-Use Formulas



Sec. 20.111  General.

    (a) An approved formula on Form 5150.19 is not required for an 
article made in accordance with any approved general-use formula 
prescribed by Secs. 20.112 through 20.119, approved by the appropriate 
ATF officer as an alternate method, or published as an ATF Ruling in the 
ATF Bulletin.
    (b) Any interested party may petition ATF for approval of a new 
general-

[[Page 447]]

use formula by submitting a letter describing the proposed general-use 
formula to the appropriate ATF officer.

(Approved by the Office of Management and Budget under control number 
1512-0336)



Sec. 20.112  Special industrial solvents general-use formula.

    (a) A special industrial solvent is any article made with any other 
ingredients combined with the ingredients in the minimum ratios 
prescribed in this section. A special industrial solvent shall be made 
with S.D.A. Formula No. 1, 3A, or 3C containing, for every 100 parts (by 
volume) of alcohol:
    (1) No less than 1 part (by volume) of one or any combination of the 
following: methyl isobutyl ketone, methyl n-butyl ketone, nitropropane 
(mixed isomers), or ethylene glycol monoethyl ether, and
    (2) No less than 5 parts (by volume) of one or any combination of 
the following: ethyl acetate (equivalent to 85% ester content, as 
defined in Sec. 21.106 of this chapter), isopropyl alcohol, or methyl 
alcohol.
    (b) Special industrial solvents are intended for use as ingredients 
or solvents in manufacturing processes and shall not be distributed 
through retail channels for sale as consumer commodities for personal or 
household use. When a special industrial solvent is used in the 
manufacture of an article for sale, sufficient ingredients shall be 
added to definitely change the composition and character of the special 
industrial solvent. A special industrial solvent shall not be 
reprocessed into another solvent intended for sale if the other solvent 
would contain more than 50% alcohol by volume.
    (c) If this article contains more than 4% by weight of methyl 
alcohol, the label shall have a skull and crossed bones symbol and the 
following words: ``danger,'' ``poison,'' ``vapor harmful,'' ``May be 
fatal or cause blindness if swallowed,'' and ``Cannot be made 
nonpoisonous.''



Sec. 20.113  Proprietary solvents general-use formula.

    (a) A proprietary solvent is any article made with any other 
ingredients combined with the ingredients in the minimum ratios 
prescribed in this section. A proprietary solvent shall be made with 
S.D.A. Formula No. 1 or 3-A containing, for every 100 parts (by volume) 
of alcohol:
    (1) No less than 1 part (by volume) of one or any combination of the 
following: gasoline, unleaded gasoline, heptane, or rubber hydrocarbon 
solvent, and
    (2) No less than 3 parts (by volume) of one or any combination of 
the following: ethyl acetate (equivalent to 85% ester content, as 
defined in Sec. 21.106 of this chapter), methyl isobutyl ketone, methyl 
n-butyl ketone, tert-butyl alcohol, sec-butyl alcohol, nitropropane 
(mixed isomers), ethylene glycol monoethyl ether, or toluene.
    (b) If this article contains more than 4% by weight of methyl 
alcohol, the label shall have a skull and crossed bones symbol and the 
following words: ``danger,'' ``poison,'' ``vapor harmful,'' ``May be 
fatal or cause blindness if swallowed,'' and ``Cannot be made 
nonpoisonous.''



Sec. 20.114  Tobacco flavor general-use formula.

    Tobacco flavor general-use formula is any finished article made with 
S.D.A. Formula No. 4 or S.D.R. Formula No. 4 which--
    (a) Contains sufficient flavors,
    (b) May contain other ingredients, and
    (c) Is packaged, labeled, and sold or used as a tobacco flavor only.



Sec. 20.115  Ink general-use formula.

    Ink general-use formula is any finished article made with S.D.A. 
Formula No. 1, 3-A, 3-C, 13-A, 23-A, 30, 32, or 33 which--
    (a) Contains sufficient pigments, dyes, or dyestuffs,
    (b) May contain other ingredients, and
    (c) Is packaged, labeled and sold or used as an ink.



Sec. 20.116  Low alcohol general-use formula.

    Low alcohol general-use formula is a finished article containing not 
more than 5% alcohol by volume.

[[Page 448]]



Sec. 20.117  Reagent alcohol general-use formula.

    (a) Reagent alcohol is an article (1) made in accordance with 
paragraph (b) of this section, (2) packaged and labeled in accordance 
with paragraph (c) of this section, and (3) distributed in accordance 
with paragraph (d) of this section.
    (b) Reagent alcohol shall be made with 95 parts (by volume) of 
S.D.A. Formula No. 3-A, and 5 part (by volume) of isopropyl alcohol. 
Water may be added at the time of manufacture. Reagent alcohol shall not 
contain any ingredient other than those named in this paragraph.
    (c)(1) Except as provided in paragraph (d) of this section, reagent 
alcohol shall be packaged by the manufacturer in containers not 
exceeding four liters. Each container shall have affixed to it a label 
with the following words, as conspicuously as any other words on the 
labels: ``Reagent Alcohol, Specially Denatured Alcohol Formula 3-A-95 
parts by vol., and Isopropyl Alcohol--5 parts by vol.''
    (2) Because this article contains more than 4% by weight of methyl 
alcohol, the label shall have a skull and crossbones symbol and the 
following words: ``danger,'' ``poison,'' ``vapor harmful,'' ``May be 
fatal or cause blindness if swallowed,'' and ``Cannot be made 
nonpoisonous
    (3) If water is added at the time of manufacture, the label shall 
reflect the composition of the diluted product. If the addition of water 
reduces the methyl alcohol concentration to less than 4% by weight, the 
requirements of paragraph (c)(2) of this section shall not apply.
    (4) A back label shall be attached showing the word ``ANTIDOTE'', 
followed by suitable directions for an antidote.
    (d)(1) Reagent alcohol may be distributed in containers not 
exceeding 4 liters exclusively to laboratories or persons who require 
reagent alcohol for scientific use.
    (2) Reagent alcohol may be distributed in bulk containers to 
proprietors of bona fide laboratory supply houses for packaging and 
resale, and to any other person who was qualified to receive bulk 
shipments of reagent alcohol on the effective date of this part. Reagent 
alcohol may also be distributed in bulk containers to any person who has 
received approval of a letterhead application containing the following:
    (i) The applicant's name, address, and permit number, if any;
    (ii) A description of the security measures which will be taken to 
segregate reagent alcohol from denatured spirits or other alcohol which 
may be on the same premises;
    (iii) A statement that labels required by paragraph (c) of this 
section will be affixed to containers of reagent alcohol filled by the 
applicant;
    (iv) A statement that the applicant will allow appropriate ATF 
officers to inspect the applicant's premises; and
    (v) A statement that the applicant will comply with the requirements 
of Sec. 20.133.

(Approved by the Office of Management and Budget under control number 
1512-0336)

[T.D. ATF- 199, 50 FR 1962, Mar. 6, 1985, as amended by T.D. ATF-435, 66 
FR 5474, Jan. 19, 2001]



Sec. 20.118  Rubbing alcohol general-use formula.

    (a) Rubbing alcohol is an article made with S.D.A. Formula No. 23-H 
(1) containing 70% ethyl alcohol by volume (2) made in accordance with 
one of the two formulas prescribed in paragraph (b) of this section, and 
(3) labeled in accordance with Sec. 20.134(e) of this part.
    (b) Either of the following two formulas is approved for 
manufacturing rubbing alcohol:

                                Formula A
 
S.D.A. formula no. 23-H...................  103.3 fl. oz.
Sucrose octa-acetate......................  0.5 av.oz.
Water.....................................  q.s. 1 gallon.
 
  (If desired, ordorous, medicinal and/or colorative ingredients may be
                                 added.)
                                Formula B
 
S.D.A. formula no. 23-H...................  103.3 fl. oz.
Benzyldiethyl (2: 6-xylylcarbamoyl methyl)  0.88 grains.
 ammonium benzoate (Bitrex (THS-839)).
Water.....................................  q.s. 1 gallon.
 
  (If desired, odorous, medicinal and/or colorative ingredients may be
                                 added.)
 


[[Page 449]]



Sec. 20.119  Toilet preparations containing not less than 10% essential oils general-use formula.

    This general-use formula shall consist of an article containing not 
less than 10% essential oils by volume made with a formula of S.D.A. 
authorized for that article on the following list:

------------------------------------------------------------------------
                                       Product
               Article                   code      Formula authorized
                                         No.
------------------------------------------------------------------------
Bath preparations....................      142  1, 3-A, 3-B, 3-C, 23-A,
                                                 30, 36, 38-B, 39-B, 39-
                                                 C, 40, 40-A, 40-B, 40-
                                                 C.
Colognes.............................      122  38-B, 39, 39-A, 39-B, 39-
                                                 C, 40, 40-A, 40-B, 40-
                                                 C.
Deodorants (body)....................      114  23-A, 38-B, 39-B, 39-C,
                                                 40, 40-A, 40-B, 40-C.
Hair and scalp preparations..........      111  3-B, 23-A, 23-F, 23-H,
                                                 37, 38-B, 39, 39-A, 39-
                                                 B, 39-C, 39-D, 40, 40-
                                                 A, 40-B, 40-C.
Lotions and creams (body, face, and        113  23-A, 23-H, 31-A, 37, 38-
 hand).                                          B, 39, 39-B, 39-C, 40,
                                                 40-A, 40-B, 40-C.
Perfume materials (processing).......      121  38-B, 39, 39-B, 39-C,
                                                 40, 40-A, 40-B, 40-C.
Perfumes and perfume tinctures.......      121  38-B, 39, 39-B, 39-C,
                                                 40, 40-A, 40-B, 40-C.
Shampoos.............................      141  1, 3-A, 3-B, 3-C, 23-A,
                                                 27-B, 31-A, 36, 38-B,
                                                 39-A, 39-B, 40, 40-A,
                                                 40-B, 40-C.
Soaps, toilet........................      142  1, 3-A, 3-C, 23-A, 30,
                                                 36, 38-B, 39-B, 39-C,
                                                 40, 40-A, 40-B, 40-C.
Toilet waters........................      122  38-B, 39, 39-A, 39-B, 39-
                                                 C, 40, 40-A, 40-B, 40-
                                                 C.
------------------------------------------------------------------------


[T.D. ATF-199, 50 FR 9162, Mar. 6, 1985; 50 FR 20099, May 14, 1985]



              Subpart G--Requirements Relating to Articles



Sec. 20.131  Scope of subpart.

    This subpart prescribes requirements relating to articles which may 
affect persons who are not required to obtain a permit under this part. 
These requirements, described in general terms Sec. 20.132, are imposed 
by law. Criminal penalties imposed for violating these requirements are 
described in Sec. 20.137. In this subpart, the term ``article'' means 
any substance or preparation in the manufacture of which denatured 
spirits are used, including the product obtained by further manufacture 
or by combination with other materials, if the article subjected to 
further manufacture or combination contained denatured spirits.



Sec. 20.132  General requirements.

    (a) Internal medicinal preparations and flavoring extracts--(1) 
Manufacture. No person shall use denatured spirits in the manufacture of 
medicinal preparations or flavoring extracts for internal human use 
where any of the spirits remain in the finished product.
    (2) Sale. No person shall sell or offer for sale for internal human 
use any medicinal preparations or flavoring extracts manufactured from 
denatured distilled spirits where any of the spirits remain in the 
finished product.
    (3) Labeling and advertising. Labeling and advertising of articles 
shall not imply that the article is intended for or suitable for 
internal human use.
    (b) Beverage use. No person shall sell or offer for sale any article 
containing denatured spirits for beverage purposes. Labeling and 
advertising of articles shall not imply that the article is intended for 
or suitable for use as a beverage.
    (c) Trafficking in articles. The appropriate ATF officer may impose 
the requirements of Sec. 20.133 on any person who reprocesses, 
rebottles, or repackages articles, deals in articles, or receives 
articles in containers exceeding one gallon.



Sec. 20.133  Registration of persons trafficking in articles.

    (a) Upon written notice from the appropriate ATF officer, any person 
who reprocesses, rebottles, or repackages articles, deals in articles, 
or receives articles in containers exceeding one gallon may be required 
to submit any of the following:
    (1) Nature of activities to be conducted;

[[Page 450]]

    (2) Name and address of supplier;
    (3) Size and type of containers in which articles will be received 
and, if applicable, rebottled or repackaged;
    (4) Maximum quantity of each article to be obtained during any 
calendar month;
    (5) Description of the reprocessing operation;
    (6) Samples of the reprocessed article;
    (7) Labels and advertising materials; and,
    (8) Names and addresses of recipients of articles and quantities 
received;
    (b) The appropriate ATF officer shall prohibit any of the activities 
described in paragraph (a) of this section if the activities pose a 
jeopardy to the revenue, or a burden in administering this part.

(Approved by the Office of Management and Budget under control number 
1512-0336)



Sec. 20.134  Labeling.

    (a) General. Except as provided in paragraph (b) or (c) of this 
section, each article shall, before removal from the manufacturer's 
premises, have a label affixed to its immediate container identifying 
(1) the name, trade name or brand name of the article, and (2) the name 
and address (city and State) of the manufacturer or distributor of the 
article.
    (b) Articles for external human use. Except as provided in paragraph 
(c) of this section, an article intended for external human use shall, 
before removal from the manufacturer's premises, have a label affixed to 
its immediate container identifying the name, trade name or brand name 
of the article. If the volume of the article in the container exceeds 8-
fluid ounces, the label shall also show the information required by 
paragraph (b) (1) or (2) of this section.
    (1) If the article was packaged or bottled by the person who 
manufactured it, the label shall identify--
    (i) The manufacturer's name and the address (city and State) of the 
actual place or places where article was manufactured, or
    (ii) The name and principal office address (city and State) of the 
manufacturer, and the permit number or numbers of the place or places of 
manufacture. However, in lieu of such permit number or numbers, the 
place or places where the manufacturing operation occurred may be 
indicated by a coding system. Prior to using a coding system, the 
manufacturer shall send a notice explaining the coding system to the 
appropriate ATF officer, or
    (iii) The manufacturer's permit number and the name and address 
(city and State), of the person for whom the article was packaged and 
bottled.
    (2) If the article was packaged or bottled by a person other than 
the manufacturer of the article, the label shall identify--
    (i) The name and address (city and State) of the person by whom or 
for whom the article was packaged or bottled, and
    (ii) The permit number of the manufacturer or distributor.
    (3) If a permit number is required to be shown on the label, it may 
be shown utilizing a State code number, in accordance with Sec. 20.135.
    (c) Shipment of unlabeled articles. A manufacturer may, subject to 
the approval of the appropriate ATF officer and compliance with 
Sec. 20.133, remove an unlabeled article from the manufacturer's 
premises, if the outer containers of the article are labeled with the 
name, trade name or brand name of the article and the names and 
addresses (city and State) of the manufacturer and the consignee.
    (d) Use of the words ``denatured alcohol.'' If the words ``denatured 
alcohol'' appear on the label of an article, the label shall also have a 
name, trade name or brand name which appears as conspicuously as the 
words ``denatured alcohol.''
    (e) Use of the words ``rubbing alcohol.'' If the words ``rubbing 
alcohol'' appear on the label of an article, (1) the article shall be 
made in accordance with Sec. 20.118 of this part, and (2) the label (i) 
shall have the words ``rubbing alcohol'' in letters of the same color 
and size, (ii) shall identify the name and address (city and State) of 
the manufacturer or bottler, (iii) shall state the alcohol content as 
70% by volume with no reference to the proof strength, and (iv) shall 
have the warning ``For external use only. If taken internally, will 
cause

[[Page 451]]

serious gastric disturbances.'' An alcohol rub made from any other 
material, such as isopropyl alcohol, shall not be labeled ``Rubbing 
Alcohol'' unless the label informs the consumer that the preparation was 
not made with specially denatured alcohol.
    (f) Distributor labeling. Distributors of an article may place 
minimal identifying information (name, address and a phrase such as 
``distributed by'') on the label of that article (or on an additional 
label) without qualifying in any manner under this part; provided:
    (1) The article is produced, packaged and labeled as provided in 
this part; and
    (2) The distributor does not produce, repackage or reprocess the 
article.

(Approved by the Office of Management and Budget under control number 
1512-0336)

[T.D ATF-199, 50 FR 9162, Mar. 6, 1985, as amended by ATF-332, 57 FR 
40849, Sept. 8, 1992]



Sec. 20.135  State code numbers.

    In showing the permit number on labels as provided in 
Sec. 20.134(b)(2)(ii), the permittee who distributes the article may 
substitute the appropriate number shown below for the State 
abbreviation. For example, permit number SDA-CONN-1234 may be shown on 
the labels as SDA-07-1234. The code numbers for the respective State are 
as follows:

01--Alabama
02--Alaska
03--Arizona
04--Arkansas
05--California
06--Colorado
07--Connecticut
08--Delaware
09--DC
10--Florida
11--Georgia
12--Hawaii
13--Idaho
14--Illinois
15--Indiana
16--Iowa
17--Kansas
18--Kentucky
19--Louisiana
20--Maine
21--Maryland
22--Massachusetts
23--Michigan
24--Minnesota
25--Mississippi
26--Missouri
27--Montana
28--Nebraska
29--Nevada
30--New Hampshire
31--New Jersey
32--New Mexico
33--New York
34--North Carolina
35--North Dakota
36--Ohio
37--Oklahoma
38--Oregon
39--Pennsylvania
40--Rhode Island
41--South Carolina
42--South Dakota
43--Tennessee
44--Texas
45--Utah
46--Vermont
47--Virginia
48--Washington
49--West Virginia
50--Wisconsin
51--Wyoming



Sec. 20.136  Labeling regulations of other agencies.

    (a) General. Other Federal agencies have promulgated regulations 
which may affect labeling of articles, as described in this section.
    (b) Consumer Product Safety Commission. The Consumer Product Safety 
Commission has promulgated regulations to administer the Federal 
Hazardous Substances Act. The regulations in 16 CFR Chapter II require 
warning labels for products containing certain specified substances. For 
example, S.D.A. Formula Nos. 3-A and 30 require warning labels because 
they contain methyl alcohol, a hazardous substance at levels of 4% or 
more by weight. Manufacturers, reprocessors, rebottlers, and repackagers 
who convey articles containing strong chemicals should refer to 16 CFR 
Chapter II for warning label requirements.
    (c) Federal Trade Commission. The Federal Trade Commission (F.T.C.) 
has promulgated regulations to administer the Fair Packaging and 
Labeling Act. The regulations in 16 CFR Chapter I affect packaging and 
labeling of ``consumer commodities.'' The term ``consumer commodities'' 
generally means products intended for retail sale to an individual for 
personal or household use. The F.T.C. regulations do not apply to drugs, 
medical devices, or cosmetics for which the Food and Drug Administration 
enforces the Fair Packaging and Labeling Act (see paragraph (d) of this 
section). Manufacturers, reprocessors, rebottlers, and repackagers who 
convey articles which are ``consumer commodities'' should refer to 16 
CFR Chapter I for packaging and labeling requirements.
    (d) Food and Drug Administration, Department of Health and Human 
Services. The Food and Drug Administration has promulgated regualtions 
in 21 CFR Chapter I to administer the Fair Packaging and Labeling Act 
(as it applies to drugs, medical devices, or cosmetics) and the Federal 
Food, Drug and Cosmetic Act. Manufacturers, reprocessors, rebottlers, 
and repackagers who convey articles which are drugs, medical devices, or 
cosmetics should refer

[[Page 452]]

to 21 CFR Chapter I for packaging and labeling requirements.



Sec. 20.137  Penalties.

    Violation of the requirements prescribed in Sec. 20.132 is 
punishable by a fine of not more than $10,000 and/or imprisonment for 
not more than 5 years for each offense. In addition, persons who 
manufacture (including reprocess), sell, or transport articles in 
violation of this part are liable for payment of a tax on the articles 
at the rate imposed by law on distilled spirits.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended, 1402 (26 U.S.C. 
5001, 5607))



         Subpart H--Sale and Use of Completely Denatured Alcohol



Sec. 20.141  General.

    (a) Each formula of completely denatured alcohol may be sold and 
used for any purpose, subject to the limitations in the formula 
prescribed in part 21 of this chapter. For example, C.D.A. Formula No. 
18 or 19 may be used:
    (1) In the manufacture of definite chemical substances where the 
alcohol is changed into some other chemical substance and does not 
appear in the finished product;
    (2) In the arts and industries, including but not limited to the 
manufacture of cleaning fluids, detergents, proprietary antifreeze 
solutions, thinners, lacquers, and brake fluids; and
    (3) For fuel, light, and power.
    (b) Completely denatured alcohol may not be used in the manufacture 
of preparations or products for internal human use or consumption where 
any of the alcohol or the denaturants used in that alcohol remain in the 
finished product.
    (c) Persons distributing and using (but not recovering for reuse) 
completely denatured alcohol are not required to obtain a permit or file 
a bond under this part.
    (d) Any person recovering completely denatured alcohol for reuse 
shall obtain a permit under subpart D of this part if the recovered 
alcohol does not contain all of the original denaturants of the 
completely denatured alcohol.
    (e) Containers of products manufactured with completely denatured 
alcohol (such as proprietary antifreeze solutions, solvents, thinners, 
and lacquers) may not be branded as completely denatured alcohol. These 
products may not be advertised, shipped, sold, or offered for sale as 
completely denatured alcohol.



Sec. 20.142  Records of bulk conveyances.

    If completely denatured alcohol is to be shipped in a bulk 
conveyance, the shipment shall be accompanied by a record which 
identifies each car, truck, or compartment, the name and location (city 
or town and State) of both the consignor and consignee, the quantity in 
gallons, and the formula number of the completely denatured alcohol.

(Approved by the Office of Management and Budget under control number 
1512-0337)



Sec. 20.143  Receipt.

    Unless completely denatured alcohol received in bulk conveyances or 
by pipeline is to be used immediately, it shall be deposited in storage 
tanks, stored in the tank cars or tank trucks in which received, or 
drawn into packages which shall be marked or labeled as required by this 
subpart.



Sec. 20.144  Packages of completely denatured alcohol.

    Packages containing more than 5 gallons of completely denatured 
alcohol shall be of metal or other equally suitable material approved by 
the appropriate ATF officer. The openings of these packages shall be 
sealed with appropriate seals furnished by the person filling the 
packages.



Sec. 20.145  Encased containers.

    Completely denatured alcohol may be packaged by distributors in 
unlabeled containers which are completely encased in wood, fiberboard, 
or similar material so that the surface (including the opening) of the 
actual container is not exposed. When completely denatured spirits are 
packaged in unlabeled containers, the distributor shall apply the 
required marks or label to an exposed surface of the case. The case 
shall be so constructed that the portion containing the marks will be 
securely attached to the encased container until all of the contents 
have

[[Page 453]]

been removed. A statement reading ``Do Not Remove Inner Container Until 
Emptied,'' or words of similar meaning, shall be placed on the portion 
of the case bearing the marks.



Sec. 20.146  Labels on bulk containers.

    (a) Completely denatured alcohol in bulk containers with a capacity 
exceeding 1 gallon shall be labeled on the head or side of the container 
or on the side of the casing, with the following:
    (1) The name and address of the person filling the containers;
    (2) The contents in gallons:
    (3) The words ``Completely Denatured Alcohol''; and
    (4) The formula number.
    (b) Packages of 5 gallons or less shall bear labels required by 
Sec. 20.147, in lieu of the labels required by this section.
    (c) The letters and figures used for marking packages shall be large 
enough to be easily read and, when printed, labeled, or stenciled, shall 
be in permanent ink and shall contrast distinctly with the background to 
which applied.
    (d) Packages may also be marked with the brand name and a statement 
to the type of merchandise contained in the package if these markings do 
not obscure or detract from the required markings. The person filling 
the packages shall maintain the record required by Sec. 20.261.



Sec. 20.147  Labels on consumer-size containers.

    (a) Each consumer-size container with a capacity of 5 gallons or 
less of completely denatured alcohol sold or offered for sale by a 
distributor shall bear a label showing, in plain, legible letters, the 
following:
    (1) The words ``Completely Denatured Alcohol'';
    (2) The statement ``Caution--contains poisonous ingredients''; and
    (3) The name and address of the distributor filling the packages, 
unless shown elsewhere on the package.
    (b) No other information (except that required by State or Federal 
law) may be shown on the label without the appropriate ATF officer's 
approval. The word ``pure'', qualifying denatured alcohol may not appear 
on the label or the container.
    (c) The requirements of paragraphs (a) and (b) of this section apply 
to any person who sells completely denatured alcohol at wholesale or 
retail.



Sec. 20.148  Manufacture of articles with completely denatured alcohol.

    Articles may be made with completely denatured alcohol for sale 
under brand names. If ingredients are added in sufficient quantities to 
materially change the composition and character of the completely 
denatured alcohol, the article is not classified as completely denatured 
alcohol and may not be marked, branded, or sold as completely denatured 
alcohol.



Sec. 20.149  Records.

    Records of transactions in completely denatured alcohol and articles 
made with completely denatured alcohol shall be maintained as prescribed 
in Sec. 20.261.

(Approved by the Office of Management and Budget under control number 
1512-0337)



   Subpart I--Operations by Dealers and Users of Specially Denatured 
                                 Spirits

                  Obtaining Specially Denatured Spirits



Sec. 20.161  Withdrawals under permit.

    (a) General. The permit, Form 5150.9, issued under subpart D of this 
part, authorizes a person to withdraw specially denatured spirits from 
the bonded premises of a distilled spirits plant or a dealer. If the 
permittee is located in a foreign-trade zone, the permit will be 
qualified so that the permittee may obtain domestic specially denatured 
spirits only. The alcohol in domestic denatured spirits must be produced 
entirely in the United States, including Puerto Rico.
    (b) Photocopying of permit, Form 5150.9. (1) As provided in 
Sec. 20.54, a permittee may make photocopies of its permit, or amended 
permit, for the exclusive purpose of furnishing proof of authorization 
to withdraw specially denatured spirits.
    (2) A permittee need only furnish the photocopy of its permit, or 
amended permit, to a distilled spirits plant or

[[Page 454]]

dealer for the ``initial order'' from that distilled spirits plant or 
dealer.
    (3) When a permittee makes photocopies of its permit, Form 5150.9, 
each copy must be signed, dated, and contain the word ``COPY'' across 
the face.
    (4) A permittee is responsible for obtaining and, as applicable, 
destroying all photocopies of its permit from distilled spirits plants 
and dealers when: (i) An amended or corrected permit is issued which 
supersedes the copy on file, (ii) the permit is canceled by reason of 
requalification as a new permittee, (iii) the permit is revoked or 
suspended, or (iv) upon permanent discontinuance of dealing in or using 
specially denatured spirits.
    (c) Withdrawals. (1) When a permittee places an initial order for 
specially denatured spirits the permittee will forward a signed copy of 
its permit, for retention by the distilled spirits plant or dealer, 
along with the purchase request.
    (2) When the permittee places a subsequent order for specially 
denatured spirits, the purchase request, in addition to any other 
information, will contain the permit identification number along with a 
statement that the permittee possesses a valid permit to withdraw 
specially denatured spirits, a copy of which is on file with the 
supplier.
    (3) Shipments will not be made by a proprietor of a distilled 
spirits plant or dealer until it is in possession of a signed copy of a 
valid permit, Form 5150.9, unless the appropriate ATF officer authorizes 
the shipment.

(19 U.S.C. 81c; Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended, 
1395, as amended (26 U.S.C. 5271, 5555))

[T.D. ATF-199, 50 FR 9162, Mar. 6, 1985; 50 FR 20099, May 14, 1985, as 
amended by T.D. ATF-274, 53 FR 25156, July 5, 1988]



Sec. 20.162  Regulation of withdrawals.

    (a) Each permittee shall regulate its withdrawals of specially 
denatured spirits to ensure that (1) the quantity on hand and 
unaccounted for does not exceed the capacity of the storage facilities, 
and (2) the cumulative quantity withdrawn or received in any calendar 
year does not exceed the quantity authorized by the permit, Form 5150.9. 
Recovered alcohol will be taken into account in determining the total 
quantity of alcohol on hand.
    (b) For the purpose of this section, specially denatured spirits and 
recovered alcohol will be considered as unaccounted for if lost under 
circumstances where a claim for allowance is required by this part and 
the claim has not been allowed, or if used or disposed of in any manner 
not provided for in this part.



Sec. 20.163  Receipt and storage of specially denatured spirits.

    (a) Receipt of bulk conveyances or by pipeline. A permittee who 
receives specially denatured spirits in bulk conveyances or by pipeline 
shall: (1) Deposit the specially denatured spirits into storage tanks as 
provided by Sec. 20.165; (2) draw the specially denatured spirits into 
packages marked and labeled as required by paragraph (b) of this 
section; (3) store the specially denatured spirits in the tank truck or 
tank car in which received if the conveyance is effectively immobilized 
within an enclosure secured to prevent unauthorized access; or (4) use 
the specially denatured spirits immediately in accordance with an 
approved formula or statement of process.
    (b) Marks on portable containers. (1) A user who receives specially 
denatured spirits in bulk conveyances or by pipeline and who transfers 
the spirits to drums shall plainly label them to show (i) the words 
``Specially Denatured Alcohol'' or ``Specially Denatured Rum'', and (ii) 
the formula number.
    (2) A dealer who fills packages of specially denatured spirits shall 
label them in accordance with Sec. 20.178.
    (c) Receipt of portable containers. A permittee who receives 
specially denatured spirits in portable containers such as drums or 
barrels shall transfer the specially denatured spirits to storage tanks 
or deposit the specially denatured spirits in a storeroom as provided in 
Sec. 20.165, or use the spirits in accordance with an approved formula 
or statement of process. A user may not transfer the spirits to other 
portable containers for storage except in the following circumstances:
    (1) Contents of damaged packages may be transferred to new packages 
to prevent loss or waste; or

[[Page 455]]

    (2) Contents of portable containers may be transferred to ``safety'' 
containers to comply with city or State fire code regulations, or on 
filing notice with the appropriate ATF officer to comply with the safety 
practices of the user. The user shall label the new containers with the 
information marked on the original containers and shall also identify 
the new containers as ``repackaged.''
    (d) Record of receipt. Records of receipt will consist of the 
consignor's invoice of bill or lading which identifies the quantities, 
formula number(s), and serial numbers of containers of specially 
denatured spirits, and which has been annotated by the consignee with 
the date of receipt of the shipment.
    (e) Losses. On receipt of specially denatured spirits, the user 
shall determine and account for any losses in transit in accordance with 
subpart J of this part.

(Approved by the Office of Management and Budget under control number 
1512-0337)

                         Premises and Equipment



Sec. 20.164  Premises.

    (a) A permittee shall have premises suitable for the business being 
conducted and adequate for protecting the revenue.
    (b) Storage facilities shall be provided on the premises for 
specially denatured spirits received or recovered. Except as provided in 
paragraph (c) of this section, storage facilities shall consist of 
storerooms, compartments, or stationary storage tanks (not necessarily 
in a room or building).
    (c) A permittee receiving and storing specially denatured spirits in 
tank cars or tank trucks, as provided in Sec. 20.163, need not provide 
stationary storage tanks.
    (d) If specially denatured spirits are received at or removed from a 
permittee's premises in bulk conveyances, suitable facilities for those 
operations shall be provided.
    (e) The appropriate ATF officer may require the storage facilities 
or distilling equipment to be secured with Government locks or seals, or 
both.



Sec. 20.165  Storage facilities.

    (a) Storerooms shall be constructed and secured to prevent 
unauthorized access and the entrance doors shall be equipped for 
locking.
    (b) Each stationary tank used for the storage of specially denatured 
spirits shall be equipped for locking to control access to the denatured 
spirits. An accurate means of measuring its contents shall be provided 
for each tank.
    (c) Storerooms and storage tanks shall be kept locked when 
unattended. A storage cabinet or locker kept inside a room which is 
locked when unattended is considered to be adequately secured.



Sec. 20.166  Stills and other equipment.

    If recovered denatured spirits or articles are to be restored on the 
permittee's premises, all equipment to be used in the restoration 
process shall be located on the permit premises. Distilling apparatus or 
other equipment, including pipelines, for restoration or for recovery, 
shall be constructed and secured in such a manner as to prevent 
unauthorized access to the denatured spirits and so arranged as to be 
readily inspected by appropriate ATF officers.



Sec. 20.167  Recovered and restored denatured spirits tanks.

    Suitable storage tanks shall be provided for recovered and restored 
denatured spirits. Each storage tank for recovered and restored 
denatured spirits shall be--
    (a) Durably marked to show its capacity and use,
    (b) Equipped for locking to control access to the contents, and
    (c) Provided with an accurate means of measuring its contents.

                          Inventory and Records



Sec. 20.170  Physical inventory.

    Once in each calendar year and when requested by an appropriate ATF 
officer, each permittee shall perform and record a physical inventory of 
each formula of new and recovered specially denatured spirits.

(Approved by the Office of Management and Budget under control number 
1512-0337)

[[Page 456]]



Sec. 20.171  Record of shipment.

    (a) Dealer. When a dealer transfers new or recovered specially 
denatured spirits to a distilled spirits plant or permittee in the 
normal course of business or in accordance with Sec. 20.216 or 
Sec. 20.231 of this part, the dealer shall prepare a record of shipment 
in accordance with paragraph (c) of this section. Dealers shall 
consistently use the same record series for the record of shipment. A 
dealer's record of shipment shall show a serial number or other unique 
number.
    (b) User. When a user transfers new or recovered specially denatured 
spirits to a distilled spirits plant or permittee in accordance with 
Sec. 20.216, 20.231, or 20.235 of this part, the user shall prepare a 
record of shipment in accordance with paragraph (c) of this section.
    (c) Record. The record of shipment shall consist of an invoice, bill 
of lading or similar document which shows the following information:
    (1) Date of shipment;
    (2) Consignor's name and address;
    (3) Consignee's name, address, and permit number or distilled 
spirits plant registry number;
    (4) For each formula of specially denatured spirits--
    (i) The formula number,
    (ii) The number and sizes of containers, and
    (iii) The total quantity; and,
    (5) If the specially denatured spirits are recovered, the word 
``recovered'' shall appear on the record.

(Approved by the Office of Management and Budget under control number 
1512-0337)



Sec. 20.172  Records.

    In addition to the records required by this subpart, permittees 
shall maintain records required in subpart P of this part.

(Approved by the Office of Management and Budget under control number 
1512-0337)

                          Operations by Dealers



Sec. 20.175  Shipment for account of another dealer.

    (a) A dealer may order specially denatured spirits shipped directly 
from a denaturer or another dealer to a customer (dealer or user).
    (b) The dealer who ordered the shipment of specially denatured 
spirits shall forward a copy of his or her permit, Form 5150.9, and the 
consignee's permit, Form 5150.9, to the person actually shipping the 
specially denatured spirits.
    (c) The bond of the dealer who ordered the shipment shall be liable 
for the tax while the specially denatured spirits are in transit and the 
bond of the person actually shipping the specially denatured spirits 
shall not be liable.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))



Sec. 20.176  Packaging by a dealer.

    A dealer may package specially denatured spirits in containers of 
any size necessary for the conduct of business. After filling packages, 
the dealer shall accurately determine the contents of each package. 
After filling drums, the dealer shall seal all the drum openings with 
the dealer's own seals. Packages of specially denatured spirits shall be 
marked or labeled in accordance with Sec. 20.178.



Sec. 20.177  Encased containers.

    (a) A dealer may package specially denatured spirits in unlabeled 
containers which are completely encased in wood, fiberboard, or similar 
material. The total surface (including the opening) of the actual 
container of the spirits must be enclosed.
    (b) When specially denatured spirits are packaged in unlabeled 
containers, the bonded dealer shall apply the required marks to an 
exposed surface of the case. The case shall be constructed so that the 
portion bearing the marks will remain securely attached to the encased 
container until all the spirits have been removed. A statement reading 
``Do not remove inner container until emptied,'' or of similar meaning, 
shall be placed on the portion of the case bearing the marks.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))

[[Page 457]]



Sec. 20.178  Marks and brands on containers of specially denatured spirits.

    (a) Required marks. Each dealer who fills packages of specially 
denatured spirits shall mark or label each package with the following 
imformation:
    (1) Quantity, in gallons, or in liters and gallons;
    (2) Package identification number or serial number (see 
Sec. 20.179);
    (3) Name and permit number of the dealer;
    (4) The words ``Specially Denatured Alcohol'' or ``Specially 
Denatured Rum,'' or an appropriate abbreviation;
    (5) Formula number;
    (6) Proof, if the spirits were denatured at other than 190 deg. 
proof;
    (7) Denaturants used, if alcohol was denatured under an approved 
formula authorizing a choice of denaturants; and
    (8) Quantity of denaturants used, if the approved formula authorizes 
a choice of quantities of denaturants.
    (b) Location of marks. The dealer shall place the required marks on 
the head of the package or on the side of the case.
    (c) Other marks. Other marks authorized by this paragraph may not 
interfere with or detract from the marks required by this subpart. The 
dealer may place marks other than the required marks on the Government 
head or Government side of the package if the other marks--
    (1) Are authorized by the appropriate ATF officer, or
    (2) Consist of a brand name, or consist of caution notices, or 
consist of other material required by Federal or State law or 
regulations.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))



Sec. 20.179  Package identification number or serial number.

    (a) Requirement. A dealer who fills packages with specially 
denatured spirits shall mark each package with a package identification 
number, in accordance with paragraph (b) of this section, or a serial 
number, in accordance with paragraph (c) of this section.
    (b) Package identification number. A package identification number 
shall apply to all of the packages filled at the same time on which all 
of the marks required by Sec. 20.178 (a)(1) and (a)(3) through (a)(8) 
are identical. All of the packages in one lot shall be the same type, 
have the same rated capacity, and be uniformly filled with the same 
quantity. A package identification number shall be derived from the date 
on which the package is filled, and shall consist of the following 
elements, in the order shown--
    (1) The last two digits of the calendar year;
    (2) An alphabetical designation from ``A'' through ``L,'' 
representing January through December, in that order;
    (3) The digits corresponding to the day of the month; and
    (4) A letter suffix when more than one identical lot is filled into 
packages during the same day. For successive lots after the first lot, a 
letter suffix shall be added in alphabetical order, with ``A'' 
representing the second lot of the day, ``B'' representing the third lot 
of the day, etc. (e.g. the first three lots filled into packages on 
November 19, 1983, would be identified as ``83K19,'' ``83K19A,'' and 
``83K19B'').
    (c) Serial number. A consecutive serial number shall be marked on 
each package, beginning with the number ``1'' and continuing in regular 
sequence. The dealer shall use a separate but similar number series for 
packages containing specially denatured rum. When any numbering series 
reaches ``1,000,000'', the dealer may recommence the series by providing 
an alphabetical prefix or suffix for each number in the new series.
    (d) Continuation of numbering series. If a change in proprietorship, 
name, or trade name occurs, the numbering system in use at the time of 
the change may be continued. If serial numbers are used at the time of a 
change, the numbering series in use at the time of the change may be 
continued.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended (26 U.S.C. 5206))



Sec. 20.180  Record of packages filled.

    (a) Requirement to keep record. A dealer shall keep a record when 
filling packages with specially denatured spirits. The dealer shall keep 
a separate record of packages for each formula of

[[Page 458]]

specially denatured alcohol and specially denatured rum.
    (b) Information to be shown. The dealer shall show the following 
information on the record of packages filled--
    (1) Date packages filled;
    (2) Package identification number and number of packages in each 
identical lot filled, or the serial numbers;
    (3) Kinds of packages;
    (4) Wine gallons or liters;
    (5) Kind of specially denatured spirits and formula number; and
    (6) Proof, if the spirits were denatured at other than 190 deg. 
proof.
    (c) Filing. The dealer shall retain the record at the premises and 
shall file it according to the serial numbers or package identification 
numbers of the packages.

(Approved by the Office of Management and Budget under control number 
1512-0337)



Sec. 20.181  Limitations on shipments.

    (a) Shipments made under permit. A dealer may ship specially 
denatured spirits to users and other dealers under the consignee's 
permit, Form 5150.9. The dealer may not ship specially denatured spirits 
before receiving the consignee's permit, Form 5150.9, unless the 
shipment has been authorized by the appropriate ATF officer.
    (b) Shipments of samples. A dealer may ship samples of specially 
denatured spirits to the persons authorized to receive them, and in the 
quantities permitted by subpart O of this part.



Sec. 20.182  Bulk shipments.

    (a) Use. Dealers may ship specially denatured spirits in bulk 
conveyances. The dealer shall seal the bulk conveyances at the time of 
filling with railroad or other appropriate serially numbered seals 
dissimilar in marking from cap seals used by the Bureau of Alcohol, 
Tobacco and Firearms. Specially denatured alcohol or specially denatured 
rum from only one consignor may be placed in any one compartment of a 
bulk conveyance. Not less than the entire contents of any one 
compartment may be delivered to any one consignee at any one premises.
    (b) Construction of bulk conveyances. Bulk conveyances shall be 
constructed to conform to the following requirements:
    (1) All openings (including valves) shall be constructed so that 
they may be sealed to prevent unauthorized access to the contents of the 
conveyance. Outlets, valves or other openings to or from tank cars may 
be constructed in such a manner that they may be closed and securely 
fastened on the inside.
    (2) If the conveyance has two or more compartments, the outlets of 
each shall be so equipped that delivery of any compartment will not 
afford access to the contents of any other compartment.
    (3) Each compartment shall be arranged so that it can be completely 
drained.
    (4) Each tank car or tank truck shall be permanently and legibly 
marked with its number, capacity in gallons or liters, and the name or 
symbol of its owner. If the tank car or truck consists of two or more 
compartments, each compartment shall be identified and the capacity of 
each shall be marked thereon.
    (5) Permanent facilities must be provided on tank trucks to permit 
ready examination of manholes or other openings.
    (6) Calibrated charts, prepared or certified by recognized 
authorities or engineers, showing the capacity of each compartment in 
gallons or liters for each inch of depth, must accompany each tank 
truck, tank ship, or tank barge.

                           Operations by Users



Sec. 20.189  Use of specially denatured spirits.

    (a) Specially denatured spirits shall not be used for any purpose 
not authorized in this section.
    (b) Specially denatured spirits shall be used (1) in the manufacture 
of articles in accordance with the formula requirements of subpart F of 
this part, (2) for other purposes in accordance with approved statements 
of process (Sec. 20.94), or (3) in the case of S.D.A. Formula No. 3-A, 
3-C, or 30, for mechanical or laboratory purposes not involving the 
development of a product.
    (c) Each formula of specially denatured spirits may be used only for 
the purposes authorized under part 21 of this chapter.

[[Page 459]]

    (d) By the use of essential oils and chemicals used in the 
manufacture of each liquid article, the user shall ensure that the 
finished article cannot be reclaimed or diverted to beverage use or 
internal human use.
    (e) Each finished article shall conform to the sample, if any, and 
formula for that article approved in accordance with subpart F of this 
part.

[T.D. ATF- 199, 50 FR 1962, Mar. 6, 1985, as amended by T.D. ATF-435, 66 
FR 5475, Jan. 19, 2001]



Sec. 20.190  Diversion of articles for internal human use or beverage use.

    An appropriate ATF officer who has reason to believe that the 
spirits in any article are being reclaimed or diverted to beverage or 
internal human use may direct the permittee to modify an approved 
formula to prevent the reclamation or diversion. The appropriate ATF 
officer may require the permittee to discontinue the use of the formula 
until it has been modified and again approved.

[T.D. ATF- 435, 66 FR 5475, Jan. 19, 2001]



Sec. 20.191  Bulk articles.

    Users who convey articles in containers exceeding one gallon may 
provide the recipient with a photocopy of subpart G of this part to 
ensure compliance with requirements relating to articles. Copies of 
subpart G are printed as ATF Publication 5150.5 and are available from 
the ATF Distribution Center, 7943 Angus Court, Springfield, Virginia 
21153.

[T.D. ATF-199, 50 FR 9162, Mar. 6, 1985, as amended by T.D. ATF-249, 52 
FR 5961, Feb. 27, 1987]



Sec. 20.192  Manufacturing record.

    For each manufacturing process in which specially denatured spirits 
are used, the user shall record:
    (a) Quantity and formula number of new or recovered specially 
denatured spirits used;
    (b) Names and quantities of ingredients used; and
    (c) Name, trade name or brand name and alcoholic content of each 
article or intermediate product manufactured, as applicable.

(Approved by the Office of Management and Budget under control number 
1512-0337)



                            Subpart J--Losses



Sec. 20.201  Liability and responsibility of carrier.

    (a) A person or carrier transporting specially denatured spirits to 
a consignee or returning it to the consignor is responsible for the safe 
delivery and is accountable for any specially denatured spirits not 
delivered.
    (b) A person or carrier transporting specially denatured spirits in 
violation of any law or regulation pertaining thereto, is subject to all 
provisions of law relating to alcohol and the payment of tax thereon, 
and shall be required to pay the tax.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended (26 U.S.C. 5001))



Sec. 20.202  Losses in transit.

    (a) Reporting losses. Upon discovering any loss of specially 
denatured spirits while in transit, the carrier shall immediately inform 
the consignee, in writing, of the facts and circumstances relating to 
the loss. In the case of theft, the carrier shall also immediately 
notify the consignee's appropriate ATF officer of the facts and 
circumstances relating to the loss.
    (b) Recording losses. At the time the shipment or report of loss is 
received, the consignee shall determine the quantity of specially 
denatured spirits lost. The consignee shall note the quantity lost on 
the receiving document and attach all relevant information to the record 
of receipt, prescribed in Sec. 20.163. For the purpose of maintaining 
the records prescribed in subpart P of this part, receipts of specially 
denatured spirits will only include the quantity actually received.
    (c) Claims. A claim for allowances of losses of specially denatured 
spirits will, as prescribed in Sec. 20.205, be filed:
    (1) If the quantity lost in transit exceeds one percent of the total 
quantity shipped and is more than 10 gallons, the consignee shall file a 
claim for allowance of the entire quantity lost; or

[[Page 460]]

    (2) If the loss was due to theft or other unlawful removal, the 
consignee shall file a claim for allowance of the entire quantity lost, 
regardless of the quantity or percentage involved.

(Reporting approved by the Office of Management and Budget under control 
number 1512-0336; recordkeeping approved by the Office of Management and 
Budget under control number 1512-0337)



Sec. 20.203  Losses on premises.

    (a) Recording of losses. A permittee shall determine and record, in 
the records prescribed by subpart P of this part, the quantity of 
specially denatured spirits or recovered alcohol lost on premises:
    (1) When an inventory is taken,
    (2) At the time a container is emptied, or
    (3) Immediately upon the discovery of any loss due to casualty, 
theft or other unusual causes.
    (b) Claims. A claim for allowance of specially denatured spirits 
will be filed as prescribed in Sec. 20.205, in the following 
circumstances:
    (1) If the quantity lost during the annual accounting period 
(Sec. 20.263(c)) exceeds one percent of the quantity to be accounted for 
during that period, and is more than 50 gallons; or,
    (2) If the loss was due to theft or unlawful use or removal, the 
permittee shall file a claim for allowance of losses regardless of the 
quantity involved.

(Approved by the Office of Management and Budget under control number 
1512-0337)



Sec. 20.204  Incomplete shipments.

    (a) Subject to the provisions of this part (and Part 19 of this 
chapter for shipments made by a distilled spirits plant), when 
containers of specially denatured spirits have sustained losses in 
transit other than by theft, and the shipment will not be delivered to 
the consignee, the carrier may return the shipment to the shipper.
    (b) When specially denatured spirits are returned to the shipper in 
accordance with this section, the carrier shall inform the shipper, in 
writing, of the facts and circumstances relating to the loss. In the 
case of theft, the carrier shall also immediately notify the shipper's 
appropriate ATF officer of the facts and circumstances relating to the 
loss.
    (c) Subject to the limitations for loss prescribed in Sec. 20.202, 
the dealer or proprietor shall file a claim for allowance of the entire 
quantity lost, in the same manner provided in that section. The claim 
shall include the applicable data required by Sec. 20.205.



Sec. 20.205  Claims.

    Claims for allowance of losses of specially denatured spirits or 
recovered alcohol will be filed, on Form 2635 (5620.8), within 30 days 
from the date the loss is ascertained, and will contain the following 
information:
    (a) Name, address, and permit number of claimant;
    (b) Identification and location of the container(s) from which the 
specially denatured spirits or recovered alcohol was lost, and the 
quantity lost from each container;
    (c) Total quantity of specially denatured spirits or recovered 
alcohol covered by the claim and the aggregate quantity involved;
    (d) Date of loss or discovery, the cause or nature of loss, and all 
relevant facts, including facts establishing whether the loss occurred 
as a result of negligence, connivance, collusion, or fraud on the part 
of any person, employee or agent participating in or responsible for the 
loss;
    (e) Name of carrier where a loss in transit is involved. The 
carrier's statement regarding the loss, prescribed by Sec. 20.202 or 
Sec. 20.204, will accompany the claim; and,
    (f) Any additional evidence which the appropriate ATF officer may 
require to be submitted in support of the claim.



 Subpart K--Recovery of Denatured Alcohol, Specially Denatured Rum, or 
                                Articles



Sec. 20.211  General.

    (a) Upon filing the appropriate qualifying documents under the 
applicable provisions of subparts D and F of this part and receiving 
approval, a manufacturer using denatured alcohol, specially denatured 
rum, or articles in an approved process may recover the denatured 
alcohol, specially denatured rum, or articles. However, a person

[[Page 461]]

who recovers (1) completely denatured alcohol with all its original 
ingredients, (2) an article made with specially denatured spirits with 
all its original ingredients (or practically so, to the extent that the 
presence of the original denaturants and other ingredients in the 
recovered article make it as nonpotable as the original article), or (3) 
an article made with completely denatured alcohol with all the 
denaturants of the completely denatured alcohol, shall not be required 
to obtain a permit under this part.
    (b) For a determination as to whether obtaining a permit under this 
part is necessary, each person who intends to conduct the recovery 
operations outlined in paragraph (a) of this section shall forward Form 
5150.19 with a sample of the recovered article, to the appropriate ATF 
officer, in accordance with subpart F of this part.
    (c) Restoration and redenaturation may be done by a permittee or by 
the proprietor of a distilled spirits plant.



Sec. 20.212  Deposit in receiving tanks.

    All recovered denatured alcohol, specially denatured rum, or 
articles shall be accumulated (after recovery or restoration is 
completed) in a receiving tank equipped for locking. If the recovered 
product is to be shipped under Sec. 20.214, it may be accumulated in 
appropriately marked packages. All denatured alcohol or specially 
denatured rum recovered shall be measured and a record of the 
measurement shall be made before being redenatured or reused. Recovered 
denatured alcohol or specially denatured rum and new denatured alcohol 
or specially denatured rum shall be kept in separate storage containers 
properly marked for identification.

(Approved by the Office of Management and Budget under control number 
1512-0337)



Sec. 20.213  Reuse of recovered spirits.

    (a) If the denatured alcohol or specially denatured rum is recovered 
in its original denatured state, or practically so, or contains 
substantial quantities of the original denaturants and other ingredients 
which make it unfit for beverage or other internal human medicinal use, 
it may be reused in any approved process without further redenaturation. 
In these cases, the appropriate ATF officer will require samples of the 
recovered product to be taken from time to time to determine if the 
product requires redenaturation.
    (b) If the denatured alcohol or specially denatured rum is not 
recovered in its original denatured state, or practically so, it shall 
be redenatured at the premises of the manufacturer or a denaturer before 
being used. The appropriate ATF officer may require supervision of the 
redenaturation of the recovered spirits by an appropriate ATF officer.



Sec. 20.214  Shipment for restoration or redenaturation.

    Recovered denatured alcohol, recovered specially denatured rum, or 
recovered articles requiring restoration or redenaturation (or both, 
unless the restoration or redenaturation is to be done on the 
manufacturer's premises) shall be shipped to a distilled spirits plant 
or to a permittee. Packages shall be numbered with a package 
identification number or serial number in accordance with Sec. 20.179 
(b) or (c). Packages shall be labeled with the name, address, and permit 
number of the manufacturer, the quantity (in gallons) of spirits 
contained in the package, and the applicable words ``Recovered denatured 
alcohol formula No. ----'' or ``Recovered specially denatured rum 
formula No. ----.'' If the restoration or redenaturation is performed by 
a user or dealer permittee (not a distilled spirits plant), the 
permittee shall return the same materials to the same manufacturer and 
shall not intermingle them with materials received from other sources.



Sec. 20.215  Shipment of articles and spirits residues for redistillation.

    (a) The proprietor of a distilled spirits plant authorized to 
produce distilled spirits may receive for redistillation (1) articles 
manufactured under this part which contain denatured spirits, and (2) 
spirits residues of manufacturing processes related to the manufacture 
of these articles.
    (b) Any person shipping these articles or spirits residues to a 
distilled spirits plant for redistillation shall--

[[Page 462]]

    (1) Identify each package or articles or spirits residues as to 
contents, and
    (2) Mark and serially number each package as provided in 
Sec. 20.214.



Sec. 20.216  Record of shipment.

    A consignor shipping recovered denatured alcohol, recovered 
specially denatured rum, or recovered articles to a distilled spirits 
plant or a permittee shall prepare and forward a record of shipment to 
the consignee, in accordance with Sec. 20.171.

(Approved by the Office of Management and Budget under control number 
1512-0337)



                         Subpart L--Destruction



Sec. 20.221  General.

    A permittee may terminate liability for payment of tax, prescribed 
by law, when specially denatured spirits or recovered alcohol are 
destroyed in accordance with this subpart.



Sec. 20.222  Destruction.

    (a) A permittee who destroys specially denatured spirits or 
recovered alcohol shall prepare a record which identifies--
    (1) The reason for destruction,
    (2) The date, time, location and manner of destruction,
    (3) The quantity involved and, if applicable, identification of 
containers, and
    (4) The name of the individual who accomplished or supervised the 
destruction.
    (b) This record of destruction shall be maintained with the records 
required by subpart P of this part.

(Approved by the Office of Management and Budget under control number 
1512-0337)



Subpart M--Return, Reconsignment and Disposition of Specially Denatured 
                                 Spirits



Sec. 20.231  Return.

    A permittee may, following the receipt of specially denatured 
spirits and for any legitimate reason, return the specially denatured 
spirits to any distilled spirits plant or dealer if the consignee 
consents to the shipment. The consignor shall prepare a record of 
shipment in accordance with Sec. 20.171.

(Approved by the Office of Management and Budget under control number 
1512-0337)



Sec. 20.232  Reconsignment in transit.

    (a) Reconsignment. Specially denatured spirits may be reconsigned to 
another permittee or returned to the consignor if, prior to or on 
arrival at the premises of the consignee, the alcohol is determined to 
be unsuitable for the intended purpose, was shipped in error, or, for 
any bona fide reason, is not accepted by the consignee or carrier.
    (b) Bond coverage. In the case of reconsignment, the bond, if 
required, of the permittee to whom the specially denatured spirits were 
reconsigned will cover the specially denatured spirits while in transit. 
In the case of the return of a shipment, the bond, if required, of the 
consignor will cover the specially denatured spirits while in transit.
    (c) Records of reconsignment. In the case of reconsignment, the 
consignor shall cancel the initial record of shipment and prepare a new 
record of shipment, if the shipment is to another permittee. The new 
record of shipment will be annotated ``Reconsignment.''

(Approved by the Office of Management and Budget under control number 
1512-0337)



Sec. 20.233  Disposition after revocation of permit.

    When any permit issued on Form 5150.9 is revoked, all specially 
denatured spirits in transit and all specially denatured spirits on the 
former permit premises, may be lawfully possessed by the former 
permittee for the exclusive purpose of disposing of the specially 
denatured spirits, for a period of 60 days following the date of 
revocation. Any specially denatured spirits or recovered alcohol not 
disposed of within the specific 60-day period, is subject to seizure and 
forfeiture.



Sec. 20.234  Disposition on permanent discontinuance of use.

    (a) Specially denatured spirits. Specially denatured spirits on hand 
at the time of discontinuance of use, may be disposed of by

[[Page 463]]

    (1) Returning the specially denatured spirits to a distilled spirits 
plant or dealer, as provided in Sec. 20.231,
    (2) Destruction, as provided in Sec. 20.222, or
    (3) Shipped to another user, as provided in Sec. 20.235.
    (b) Recovered denatured alcohol, recovered specially denatured rum, 
or recovered articles. Upon permanent discontinuance of use, a permittee 
may dispose of recovered denatured alcohol, recovered specially 
denatured rum, or recovered articles by
    (1) Shipment to a distilled spirits plant, as provided in 
Sec. 20.215 for articles and spirits residues,
    (2) Destruction, as provided in Sec. 20.222, or
    (3) Upon the filing of an application with the appropriate ATF 
officer, any other approved method.

(Approved by the Office of Management and Budget under control number 
1512-0336)



Sec. 20.235  Disposition to another user.

    (a) A user may dispose of specially denatured spirits to another 
permittee or Government agency.
    (b) The user shall prepare a record of shipment in accordance with 
Sec. 20.171. The packages to be shipped shall bear the name and permit 
number of the user and the marks and labels required under Sec. 20.178. 
The user's copy of the record of shipment shall include an explanation 
of the reason for the disposition.
    (c) The appropriate ATF officer may require a user to apply for and 
obtain a dealer's permit, if shipments under this section are excessive.

(Approved by the Office of Management and Budget under control number 
1512-0337)

[T.D ATF-199, 50 FR 9162, Mar. 6, 1985, as amended by ATF-332, 57 FR 
40849, Sept. 8, 1992]



 Subpart N--Use of Specially Denatured Spirits by the United States or 
                            Government Agency



Sec. 20.241  General.

    The United States or any of its Government agencies may withdraw 
specially denatured spirits from a distilled spirits plant or dealer 
under this part, as authorized by 26 U.S.C. 5214(a)(2) and 5271. Before 
any specially denatured spirits may be withdrawn, a permit to procure 
the spirits shall be obtained as provided in Sec. 20.25. Payment of 
special (occupational) tax and filing of a bond are not required for any 
Governmental agency of the United States to procure specially denatured 
spirits.

(26 U.S.C. 5214, 5271, 5272, 5276)

[T.D. ATF-199, 50 FR 9162, Mar. 6, 1985, as amended by T.D. ATF-285, 54 
FR 12610, Mar. 28, 1989; T.D. ATF-435, 66 FR 5475, Jan. 19, 2001]



Sec. 20.242  Application and permit, Form 5150.33.

    (a) All permits previously issued to the United States or any of its 
Government agencies on Form 1444 shall remain valid and will be 
regulated by the same provisions of this subpart as it refers to permits 
on Form 5150.33.
    (b) A Government agency shall apply for a permit to obtain specially 
denatured spirits on Form 5150.33. Upon approval, Form 5150.33 will be 
returned to the Government agency, and will serve as authority to 
procure specially denatured spirits.
    (c) A Government agency may specify on its application for a permit 
to procure specially denatured spirits, Form 5150.33, that it desires a 
single permit authorizing all sub-agencies under its control to procure 
specially denatured spirits; or each Government location (agency, 
department, bureau, etc.) desiring to procure specially denatured 
spirits may individually submit an application for a permit on Form 
5150.33.
    (d) An application for a permit shall be signed by the head of the 
agency or sub-agency or the incumbent of an office which is authorized 
by the head of the agency or sub-agency, to sign. Evidence of 
authorization to sign for the head of the agency or sub-agency shall be 
furnished with the application.
    (e) Specially denatured spirits obtained by Government agencies may 
not be used for non-Government purposes.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended (26 U.S.C. 5271))

[[Page 464]]



Sec. 20.243  Procurement of specially denatured spirits.

    Government agencies shall retain the original permit, Form 5150.33, 
on file. When placing an initial order with a vendor, the agency shall 
forward a photocopy of its permit with the purchase order for specially 
denatured spirits. In the case of an agency holding a single permit for 
use of other sub-agencies, the photocopy of the permit will contain an 
attachment listing all other locations authorized to procure specially 
denatured spirits. Any subsequent purchases from the same vendor need 
only contain the permit number on the purchase order.



Sec. 20.244  Receipt of shipment.

    On receipt of a shipment of specially denatured spirits, a 
representative of the Government agency shall inspect the shipment for 
any loss or deficiency. In the case of loss or deficiency, the agency 
shall annotate the receiving document and forward a copy to the 
appropriate ATF officer from which the shipment was consigned.



Sec. 20.245  Discontinuance of use.

    When a Government agency, holding a permit issued under this 
subpart, no longer intends to procure and use specially denatured 
spirits, the permit shall be returned to the appropriate ATF officer for 
cancellation. All photocopies of the permit furnished to vendors shall 
be returned to the agency for destruction.



Sec. 20.246  Disposition of specially denatured spirits on discontinuance of use.

    At the time of discontinuance of use of specially denatured spirits, 
a Government agency may dispose of any excess specially denatured 
spirits (a) to another Government agency holding a permit, (b) by 
returning the specially denatured spirits to a vendor, or (c) in any 
manner authorized by the appropriate ATF officer. Specially denatured 
spirits may not be disposed of to the general public.



            Subpart O--Samples of Specially Denatured Spirits



Sec. 20.251  General.

    (a) Applicants and prospective applicants for permits to use 
specially denatured spirits may obtain samples of specially denatured 
spirits for experimental purposes or for preparing samples of finished 
articles as required by Sec. 20.92. Samples of specially denatured 
spirits may only be obtained from distilled spirits plants or dealers.
    (b) Samples not larger than five gallons per calendar year may be 
obtained without a permit. Dealers shall maintain records to ensure that 
samples of specially denatured spirits dispensed to nonpermittee do not 
exceed five gallons per calendar year.
    (c) Samples larger than five gallons per calendar year may be 
obtained without a permit as described in Sec. 20.252.
    (d) Samples of specially denatured spirits shall not be used to 
manufacture articles for commercial sale.

(Approved by the Office of Management and Budget under control number 
1512-0337)

[T.D. ATF-199, 50 FR 9162, Mar. 6, 1985; 50 FR 20099, May 14, 1985, as 
amended by T.D. ATF-435, 66 FR 5475, Jan. 19, 2001]



Sec. 20.252  Samples larger than five gallons.

    (a) General. The appropriate ATF officer may waive the requirement 
to obtain a permit under subpart D of this part if a nonpermittee can 
demonstrate that more than five gallons is necessary to determine if an 
Industrial Use Permit is desired.
    (b) Application. A nonpermittee who wishes to obtain more than five 
galllons of specially denatured spirits to determine if an Industrial 
Use Permit is desired, shall file a letterhead application with the 
appropriate ATF officer in which the nonpermittee's premises are 
located. The letter shall describe why the requested quantity is 
necessary.
    (c) Approval. If the letterhead application is approved, the 
nonpermittee shall submit it to the proprietor of a distilled spirits 
plant or a dealer with

[[Page 465]]

the order for the sample of specially denatured spirits.

(Approved by the Office of Management and Budget under control number 
1512-0336)



Sec. 20.253  Labels for samples.

    When a sample of specially denatured spirits is withdrawn from a 
dealer's premises, that dealer shall attach a label to the sample which 
shows the following information:
    (a) The word ``Sample'';
    (b) The dealer's name, address, and permit number;
    (c) The words ``Specially Denatured Alcohol'' or ``Specially 
Denatured Rum'';
    (d) The quantity; and
    (e) The formula number.



                     Subpart P--Records and Reports



Sec. 20.261  Records of completely denatured alcohol.

    When requested by the appropriate ATF officer, any person who 
receives, packages, stores, disposes of, or uses completely denatured 
alcohol shall keep records of all transactions in completely denatured 
alcohol which will enable appropriate ATF officers to verify and trace 
receipt, packaging, storage, usage, and disposal of the spirits, and to 
determine whether there has been compliance with law and regulations. 
However, on sales in quantities of less than 5 gallons, only the total 
quantity disposed of daily need be recorded.

(Approved by the Office of Management and Budget under control number 
1512-0337)



Sec. 20.262  Dealer's records of specially denatured spirits.

    (a) Each dealer shall maintain separate records of each formula of 
new specially denatured spirits--
    (1) Received, as required by Sec. 20.163,
    (2) Packaged, as required by Sec. 20.180,
    (3) Destroyed, as required by Sec. 20.222,
    (4) Lost, as required by Secs. 20.202-20.204, and
    (5) Transferred to another permittee or a distilled spirits plant, 
as required by Secs. 20.171, 20.216, and 20.231.
    (b) Each dealer shall maintain separate records of each formula of 
recovered specially denatured spirits for each of the transactions 
listed in paragraphs (a)(1) through (a)(5) of this section.
    (c) Once in each calendar year, and when requested by an appropriate 
ATF officer, each dealer shall perform and record a balanced accounting 
of each formula of new and recovered specially denatured spirits using 
the records required by Sec. 20.170 and this section.
    (d) When requested, the dealer shall submit the accounting required 
by paragraph (c) of this section to the appropriate ATF officer.

(Approved by the Office of Management and Budget under control number 
1512-0337)



Sec. 20.263  User's records of specially denatured spirits.

    (a) Each user shall maintain separate records of each formula of new 
specially denatured spirits--
    (1) Received, as required by Sec. 20.163,
    (2) Recovered, as required by Sec. 20.212,
    (3) Used, as required by Sec. 20.192,
    (4) Destroyed, as required by Sec. 20.222,
    (5) Lost, as required by Secs. 20.202-20.203, and
    (6) Transferred to another permittee or a distilled spirits plant, 
as required by Secs. 20.216, 20.231, and 20.235.
    (b) Each user shall maintain separate records of each formula of 
recovered specially denatured spirits for each of the transactions 
listed in paragraphs (a)(1) through (a)(6) of this section.
    (c) Once in each calendar year, and when requested by an appropriate 
ATF officer, each user shall perform and record a balanced accounting of 
each formula of new and recovered specially denatured spirits using the 
records required by Sec. 20.170 and this section.
    (d) When requested, the user shall submit the accounting required by 
paragraph (c) of this section to the appropriate ATF officer.

(Approved by the Office of Management and Budget under control number 
1512-0337)



Sec. 20.264  User's records and report of products and processes.

    (a) Records. (1) Each user shall maintain separate accountings of--
    (i) The number of gallons of each formula of new specially denatured 
spirits used for each product or process, recorded by the code number 
prescribed by Sec. 21.141 of this chapter.

[[Page 466]]

    (ii) The number of gallons of each formula of recovered specially 
denatured spirits used for each product or process, recorded by the code 
number prescribed by Sec. 21.141 of this chapter.
    (2) Each user who recovers specially denatured spirits shall 
maintain separate accountings of the number of gallons of each formula 
of specially denatured spirits recovered from each product or process, 
recorded by the code number prescribed by Sec. 21.141 of this chapter.
    (3) Product or process code numbers are shown on approved formula 
and statement of process forms. For an article made in accordance with a 
general-use formula, the user will refer to Sec. 21.141 of this chapter 
and record the applicable product or process code number.
    (b) Report. Each user shall submit an annual report, Form 5150.18, 
for the period from July 1 through June 30, summarized from the records 
required by this section. The report shall be filed no later than July 
15 following the end of the accounting period.

(Approved by the Office of Management and Budget under control number 
1512-0337)



Sec. 20.265  Retention of invoices.

    (a) Any person required to keep records under this part shall retain 
copies of invoices which will enable appropriate ATF officers to readily 
obtain the details regarding:
    (1) Purchases of all essential oils, chemicals, and other materials 
used in manufacturing articles, including the name and address of the 
vendor, and the quantity;
    (2) Purchases of articles containing specially denatured spirits for 
reprocessing, or purchases of those articles for bottling, repackaging, 
and/or resale, including the name and address of the vendor and the 
quantity; and
    (3) Dispositions of all articles manufactured or received, including 
in each case the name and address of the person to whom sold or 
otherwise disposed of.
    (b) The appropriate ATF officer may, on application filed by the 
permittee, waive the requirements for retaining invoices if the quantity 
sold to any person during a calendar month does not exceed 25 gallons, 
and if a waiver will not hinder the effective administration of this 
part and will not pose a jeopardy to the revenue.

(Approved by the Office of Management and Budget under control number 
1512-0336)



Sec. 20.266  Time for making entries in records.

    Any person who conducts an operation which is required to be 
recorded under this part, shall enter that operation in the records on 
the same day on which the operation occurred. However, the daily posting 
of records may be deferred to conform to the permittee's normal 
accounting cycle if (a) supporting or supplemental records are prepared 
at the time of the operation, and these supporting or supplemental 
records are to be used to post the daily record, and (b) the deferral of 
posting does not pose a jeopardy to the revenue.



Sec. 20.267  Filing and retaining records.

    Any person who is required to maintain records of operations under 
this part shall file and retain records and copies of reports in the 
following manner:
    (a) Keep on file for a period of not less than 3 years after the 
date of the report covering the operation, in such a way as to allow 
inspection by ATF officers, all those records of operations, all 
supporting or supplemental records, and copies of all reports as 
required by this part. However, the appropriate ATF officer may require 
that the records and copies of reports be kept for an additional period, 
not to exceed 3 years.
    (b) File all records and copies of reports at the premises where the 
operations are conducted.
    (c) Make the files of records and copies of reports available to ATF 
officers during regular business hours for examination.

[T.D. ATF- 199, 50 FR 1962, Mar. 6, 1985, as amended by T.D. ATF-435, 66 
FR 5475, Jan. 19, 2001]



Sec. 20.268  Photographic copies of records.

    (a) General. Permittees may record, copy, or reproduce required 
records. Any process may be used which accurately reproduces the 
original record,

[[Page 467]]

and which forms a durable medium for reproducing and preserving the 
original record.
    (b) Copies of records treated as original records. Whenever records 
are reproduced under this section, the reproduced records will be 
preserved in conveniently accessible files, and provisions will be made 
for examining, viewing, and using the reproduced records the same as if 
they were the original record, and they will be treated and considered 
for all purposes as though they were the original record. All provisions 
of law and regulations applicable to the original are applicable to the 
reproduced record. As used in this section, ``original record'' means 
the record required by this part to be maintained or preserved by the 
permittee, even though it may be an executed duplicate or other copy of 
the document.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 U.S.C. 5555))



PART 21--FORMULAS FOR DENATURED ALCOHOL AND RUM--Table of Contents




                      Subpart A--General Provisions

Sec.
21.1  Scope of regulations.
21.2  Forms prescribed.
21.3  Stocks of discontinued formulas.
21.4  Related regulations.
21.5  Denatured spirits for export.
21.6  Incorporations by reference.
21.7  Delegations of the Director.

                         Subpart B--Definitions

21.11  Meaning of terms.

            Subpart C--Completely Denatured Alcohol Formulas

21.21  General.
21.22  Formula No. 18.
21.23  Formula No. 19.
21.24  Formula No. 20.

   Subpart D--Specially Denatured Spirits Formulas and Authorized Uses

21.31  General.
21.32  Formula No. 1.
21.33  Formula No. 2-B.
21.34  Formula No. 2-C.
21.35  Formula No. 3-A.
21.36  Formula No. 3-B.
21.37  Formula No. 3-C.
21.38  Formula No. 4.
21.39  Formula No. 6-B.
21.40  Formula No. 12-A.
21.41  Formula No. 13-A.
21.42  Formula No. 17.
21.43  Formula No. 18.
21.44  Formula No. 19.
21.45  Formula No. 20.
21.46  Formula No. 22.
21.47  Formula No. 23-A.
21.48  Formula No. 23-F.
21.49  Formula No. 23-H.
21.50  Formula No. 25.
21.51  Formula No. 25-A.
21.52  Formula No. 27.
21.53  Formula No. 27-A.
21.54  Formula No. 27-B.
21.55  Formula No. 28-A.
21.56  Formula No. 29.
21.57  Formula No. 30.
21.58  Formula No. 31-A.
21.59  Formula No. 32.
21.60  Formula No. 33.
21.61  Formula No. 35.
21.62  Formula No. 35-A.
21.63  Formula No. 36.
21.64  Formula No. 37.
21.65  Formula No. 38-B.
21.66  Formula No. 38-C.
21.67  Formula No. 38-D.
21.68  Formula No. 38-F.
21.69  Formula No. 39.
21.70  Formula No. 39-A.
21.71  Formula No. 39-B.
21.72  Formula No. 39-C.
21.73  Formula No. 39-D.
21.74  Formula No. 40.
21.75  Formula No. 40-A.
21.76  Formula No. 40-B.
21.77  Formula No. 40-C.
21.78  Formula No. 42.
21.79  Formula No. 44.
21.80  Formula No. 45.
21.81  Formula No. 46.

                Subpart E--Specifications for Denaturants

21.91  General.
21.92  Denaturants listed as U.S.P. or N.F.
21.93  Acetaldehyde.
21.94  Acetaldol.
21.95  Alpha terpineol.
21.96  Ammonia, aqueous.
21.97  Benzene.
21.98  Bone oil (Dipple's oil).
21.99  Brucine alkaloid.
21.100  n-Butyl alcohol.
21.101  tert-Butyl alcohol.
21.102  Caustic soda, liquid.
21.103  Chloroform.
21.104  Cinchonidine.
21.105  Citronella oil, natural.
21.106  Diethyl phthalate.
21.107  Ethyl acetate.
21.108  Ethyl ether.
21.109  Gasoline.
21.110  Gasoline, unleaded.
21.111  Gentian violet.

[[Page 468]]

21.112  Heptane.
21.113  Isopropyl alcohol.
21.114  Kerosene.
21.115  Kerosene (deodorized).
21.116  Methyl alcohol.
21.117  Methyl isobutyl ketone.
21.118  Methyl n-butyl ketone.
21.119  Nicotine solution.
21.120  Nitropropane, mixed isomers of.
21.121  Phenyl mercuric benzoate.
21.122  Pyridine bases.
21.123  Pyronate.
21.124  Quassin.
21.125  Rubber hydrocarbon solvent.
21.126  Safrole.
21.127  Shellac (refined).
21.128  Sodium (metallic).
21.129  Spearmint oil, terpeneless.
21.130  Spike lavender oil, natural.
21.131  Sucrose octaacetate.
21.132  Toluene.
21.133  Vinegar.

 Subpart F--Uses of Specially Denatured Alcohol and Specially Denatured 
                                   Rum

21.141  List of products and processes using specially denatured alcohol 
          and rum, and formulas authorized therefor.

         Subpart G--Denaturants Authorized for Denatured Spirits

21.151  List of denaturants authorized for denatured spirits.

Subpart H--Weights and Specific Gravities of Specially Denatured Alcohol

21.161  Weights and specific gravities of specially denatured alcohol.

    Authority: 5 U.S.C. 552(a); 26 U.S.C. 5242, 7805.

    Source: T.D. ATF-133, 48 FR 24673, June 2, 1983, unless otherwise 
noted.

    Editorial Note: Nomenclature changes to part 21 appear by T.D. ATF-
435, 66 FR 5475, Jan. 19, 2001.



                      Subpart A--General Provisions



Sec. 21.1  Scope of regulations.

    The regulations in this part relate to the formulation of completely 
denatured alcohol, specially denatured alcohol, and specially denatured 
rum; to the specifications for denaturants; and to the uses of denatured 
spirits.



Sec. 21.2  Forms prescribed.

    (a) General. The appropriate ATF officer is authorized to prescribe 
all forms required by this part. All of the information called for in 
each form shall be furnished as indicated by the headings on the form 
and the instructions on or pertaining to the form. In addition, 
information called for in each form shall be furnished as required by 
this part. The form will be filed in accordance with the instructions 
for the form.
    (b) Forms may be requested from the ATF Distribution Center, P.O. 
Box 5950, Springfield, Virginia 22150-5950, or by accessing the ATF web 
site (http://www.atf.treas.gov/).

[T.D. ATF-133, 48 FR 24673, June 2, 1983, as amended by T.D. ATF-249, 52 
FR 5961, Feb. 27, 1987; T.D. 372, 61 FR 20724, May 8, 1996; T.D. ATF-
435, 66 FR 5475, Jan. 19, 2001]



Sec. 21.3  Stocks of discontinued formulas.

    Denaturers, or specially denatured spirits dealers or users, having 
on hand stocks of denaturants or formulas of specially denatured spirits 
no longer authorized by this part may--
    (a) Continue to supply or use those stocks in accordance with 
existing permits until the stocks are exhausted;
    (b) Use up those stocks in any manufacturing process approved by the 
appropriate ATF officer, pursuant to an application filed with him on 
ATF Form 5150.19, Formula for Articles made with Specially Denatured 
Alcohol and Rum;
    (c) On approval of an application, filed with the appropriate ATF 
officer and approved by such officer, destroy those stocks under 
whatever supervision the appropriate ATF officer requires; or
    (d) Otherwise dispose of those stocks in a manner satisfactory to 
the appropriate ATF officer, pursuant to approval of an application.

[T.D. ATF-133, 487 FR 24673, June 2, 1983, as amended by T.D. ATF-435, 
66 FR 5475, Jan. 19, 2001]



Sec. 21.4  Related regulations.

    The procedural and substantive requirements relative to the 
production of denatured alcohol and specially denatured rum are 
prescribed in Part 19 of this chapter, and those relative to the 
distribution and use of denatured alcohol and specially denatured rum

[[Page 469]]

are prescribed in Part 20 of this chapter.

[T.D. ATF-133, 48 FR 24673, June 2, 1983, as amended by T.D. ATF-199, 50 
FR 9183 Mar. 6, 1985]



Sec. 21.5  Denatured spirits for export.

    Spirits may be denatured in accordance with formulas prescribed by 
the government of a foreign country to which the denatured spirits will 
be exported. However, the denaturer must first apply for and obtain 
written permission from the appropriate ATF officer. The application 
shall be submitted to the appropriate ATF officer and shall contain the 
following information:
    (a) A complete list of ingredients for the spirits to be denatured.
    (b) The exact amount of each ingredient to be used in denaturing the 
spirits.
    (c) A copy (accompanied by an English translation as necessary) of 
the law or regulations of the foreign country to which the denatured 
spirits will be exported, specifying the denatured spirits formulation 
prescribed by that country.



Sec. 21.6  Incorporations by reference.

    (a) ``The United States Pharmacopoeia (Twentieth Revision, Official 
from July, 1980) and the National Formulary (Fifteenth Edition, Official 
from July 1, 1980)'' published together as ``The USP and NF Compendia,'' 
are incorporated by reference in this part. This incorporation by 
reference was approved by the Director of the Federal Register. The 
publication may be inspected at the Office of the Federal Register, 800 
North Capitol Street, NW., suite 700, Washington, DC, and is available 
from the United States Pharmacopoeia Convention, Inc., 12601 Twinbrook 
Parkway, Rockville, Maryland 20852.
    (b) Material from Parts 23, 25, and 29 of the 1980 Annual Book of 
ASTM Standards is incorporated by reference in this part. This 
incorporation by reference was approved by the Director of the Federal 
Register. These publications may be inspected at the Office of the 
Federal Register, 800 North Capitol Street, NW., suite 700, Washington, 
DC, and are available from the American Society for Testing and 
Materials, 1916 Race Street, Philadelphia, Pennsylvania 19103.
    (c) Material from the ``Official Methods of Analysis of the 
Association of Official Analytical Chemists (13th Edition 1980)'' (AOAC) 
is incorporated by reference in this part. This incorporation by 
reference was approved by the Director of the Federal Register. This 
publication may be inspected at the Office of the Federal Register, 800 
North Capitol Street, NW., suite 700, Washington, DC, and is available 
from the Association of Official Analytical Chemists, 11 North 19th 
Street, Suite 210, Arlington, Virginia 22209.

(Pub. L. 89-554, 80 Stat. 383 as amended (5 U.S.C. 552(a)))



Sec. 21.7  Delegations of the Director.

    All of the regulatory authorities of the Director contained Part 21 
of the regulations are delegated to appropriate ATF officers. These ATF 
officers are specified in ATF Order 1130.9, Delegation Order--Delegation 
of the Director's Authorities in 27 CFR Parts 20, 21 and 22. ATF 
delegation orders, such as ATF Order 1130.9, are available to any 
interested person by mailing a request to the ATF Distribution Center, 
PO Box 5950, Springfield, Virginia 22150-5950, or by accessing the ATF 
web site ((http://www.atf.treas.gov/).

[T.D. ATF-435, 66 FR 5475, Jan. 19, 2001]



                         Subpart B--Definitions



Sec. 21.11  Meaning of terms.

    When used in this part and in forms prescribed under this part, 
unless the context otherwise requires, terms have the meanings given in 
this section. Words in the plural form include the singular, and vice 
versa, and words indicating the masculine gender include the feminine. 
The terms ``includes'' and ``including'' do not exclude things not 
mentioned which are in the same general class.
    Alcohol. The spirits known as ethyl alcohol, ethanol, or spirits of 
wine, from whatever source or by whatever process produced. The term 
does not include such spirits as whisky, brandy, rum, gin, or vodka.

[[Page 470]]

    Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this part by ATF Order 
1130.9, Delegation Order--Delegation of the Director's Authorities in 27 
CFR Parts 20, 21 and 22.
    CFR. The Code of Federal Regulations.
    C.D.A. Completly denatured alcohol.
    Completely denatured alcohol. The spirits known as alcohol, as 
defined in this section, denatured pursuant to completely denatured 
alcohol formulas prescribed in subpart C of this part.
    Denaturant. A material authorized by this part to be added to 
spirits in order to make those spirits unfit for beverage or internal 
human medicinal use.
    Denatured spirits. Alcohol or rum to which denaturants have been 
added as provided in this part.
    Director. The Director, Bureau of Alcohol, Tobacco and Fireams, the 
Department of the Treasury, Washington, DC 20226.
    Essential oil. Any of the volatile odoriferous natural oils found in 
plants, which impart to such plants odor, and often other characteristic 
properties; also, imitations of such natural oils, as well as aromatic 
substances, and synthetic oils, which possess the denaturing 
characteristics of such natural oils.
    Gallon. The liquid measure equivalent to the volume of 231 cubic 
inches.
    Manufacturer or user. A person who holds a permit, issued under part 
20 of this chapter, to withdraw and use specially denatured alcohol or 
specially denatured rum, or to recover completely or specially denatured 
alcohol, or specially denatured rum, or articles manufactured with 
denatured spirits, or a distilled spirits plant proprietor qualified 
under Part 19 of this chapter as a processor.
    N.F. The National Formulary. The lastest edition is intended unless 
otherwise specified. The designations ``U.S.P.'' and ``N.F.'' are 
considered interchangeable when preparations are transferred from one 
publication to the other. (For incorporation by reference, see 
Sec. 21.6(a).)
    Proof. The ethyl alcohol content of a liquid at 60 degrees 
Fahrenheit, stated as twice the percent of ethyl alcohol by volume.
    Rum. Any spirits produced from sugar cane products and distilled at 
less than 190 proof in such manner that the spirits possess the taste, 
aroma, and characteristics generally attributed to rum.
    S.D.A. Specially denatured alcohol.
    Specially denatured alcohol. Those spirits known as alcohol, as 
defined in this section, denatured pursuant to the specially denatured 
alcohol formulas authorized under subpart D of this part.
    Specially denatured rum. Those spirits known as rum, as defined in 
this section, denatured pursuant to the specially denatured rum formula 
authorized under subpart D of this part.
    Spirits or distilled spirits. Alcohol or rum as defined in this 
part.
    U.S.C. The United States Code.
    U.S.P. The United States Pharmacopoeia. The latest edition is 
intended unless otherwise specified. The designations ``U.S.P.'' and 
``N.F.'' are considered interchangeable when preparations are 
transferred from one publication to the other. (For incorporation by 
reference, see Sec. 21.6(a).)

[T.D. ATF-133, 48 FR 24673, June 2, 1983, as amended by T.D. ATF-199, 50 
FR 9183, Mar. 6, 1985; T.D. ATF-435, 66 FR 5475, Jan. 19, 2001]



            Subpart C--Completely Denatured Alcohol Formulas



Sec. 21.21  General.

    (a) Alcohol shall be completely denatured only in accordance with 
formulas prescribed in this subpart (or in accordance with Sec. 21.5).
    (b) Denaturers may be authorized to add a small quantity of an 
odorant, rust inhibitor, or dye to completely denatured alcohol. Any 
such addition shall be made only on approval by the appropriate ATF 
officer. Request for such approval shall be submitted to the appropriate 
ATF officer.
    (c) Odorants or perfume materials may be added to denaturants 
authorized for completely denatured alcohol in amounts not greater than 
1 part to 250, by weight. However, such addition shall not decrease the 
denaturing value nor change the chemical or physical constants beyond 
the limits of the specifications for these denaturants as

[[Page 471]]

prescribed in subpart E, except as to odor. Proprietors of distilled 
spirits plants using denaturants to which such odorants or perfume 
materials have been added shall inform the appropriate ATF officer, in 
writing, of the names and properties of the odorants or perfume 
materials so used.



Sec. 21.22  Formula No. 18.

    To every 100 gallons of ethyl alcohol of not less than 160 proof 
add:

    2.50 gallons of either methyl isobutyl ketone, mixed isomers of 
nitropropane, or methyl n- butyl ketone;
    0.125 gallon of pyronate or a similar compound;
    0.50 gallon acetaldol (beta-hydroxybutyraldehyde); and
    1.00 gallon of either kerosene, deodorized kerosene, gasoline, 
unleaded gasoline, rubber hydrocarbon solvent, or heptane.



Sec. 21.23  Formula No. 19.

    To every 100 gallons of ethyl alcohol of not less than 160 proof 
add:

    4.0 gallons of either methyl isobutyl ketone, mixed isomers of 
nitropropane, or methyl n- butyl ketone; and
    1.0 gallon of either kerosene, deodorized kerosene, gasoline, 
unleaded gasoline, rubber hydrocarbon solvent, or heptane.



Sec. 21.24  Formula No. 20.

    (a) Formula. To every 100 gallons of ethyl alcohol of not less than 
195 proof add:

    A total of 2.0 gallons of either unleaded gasoline, rubber 
hydrocarbon solvent, kerosene, or deodorized kerosene; or any 
combination of these.

    (b) Authorized use. Restricted to fuel use, comparable to specially 
denatured alcohol ``Use Code No.'' 611, 612, 613, 620, and 630.



   Subpart D--Specially Denatured Spirits Formulas and Authorized Uses



Sec. 21.31  General.

    (a) Formulas for specially denatured spirits. Alcohol and rum shall 
be specially denatured only in accordance with formulas prescribed in 
this subpart (or in accordance with Sec. 21.5).
    (b) Proof of spirits for denaturation. Alcohol of not less than 185 
proof shall be used in the manufacture of all formulas of specially 
denatured alcohol, unless otherwise specifically stated or unless 
otherwise authorized by the appropriate ATF officer. Rum for 
denaturation shall be of not less than 150 proof and may be denatured 
only in accordance with Formula No. 4.
    (c) Use of Denatured Spirits. Users and manufacturers holding 
approved Forms 5150.19 (formerly 1479-A) covering use in processes or 
manufacture of products no longer authorized for a particular formula 
may continue that use. Pursuant to written application and subject to 
the provisions of 26 U.S.C. Chapter 51, Part 20 of this chapter, and 
this part, the appropriate ATF officer, may authorize the use of any 
formula of specially denatured alcohol or specially denatured rum for 
uses not specifically authorized in this part. The code number before 
each item under ``authorized uses'' shall be used in reporting the use 
of specially denatured alcohol or specially denatured rum.

[T.D. ATF-133, 48 FR 24673, June 2, 1983, as amended by T.D. ATF-199, 50 
FR 9183, Mar. 6, 1985]



Sec. 21.32  Formula No. 1.

    (a) Formula. To every 100 gallons of alcohol add:

    Four gallons of methyl alcohol and either \1/8\ avoirdupois ounce of 
denatonium benzoate, N.F.; 1 gallon of methyl isobutyl ketone; 1 gallon 
of mixed isomers of nitropropane; or 1 gallon of methyl n- butyl ketone.

    (b) Authorized uses. (1) As a solvent:

011.  Cellulose coatings.
012.  Synthetic resin coatings.
013.  Shellac coatings.
014.  Other natural resin coatings.
016.  Other coatings.
021.  Cellulose plastics.
022.  Non-cellulose plastics, including resins.
031.  Photographic film and emulsions.
032.  Transparent sheeting.
033.  Explosives.
034.  Cellulose intermediates and industrial collodions.
035.  Soldering flux.
036.  Adhesives and binders.
041.  Proprietary solvents.
042.  Solvents and thinners (other than proprietary solvents or special 
industrial solvents).
043.  Solvents, special (restricted sale).
051.  Polishes.
052.  Inks (not including meat branding inks).

[[Page 472]]

053.  Stains (wood, etc.).
141.  Shampoos.
142.  Soap and bath preparations.
311.  Cellulose compounds (dehydration).
312.  Sodium hydrosulfite (dehydration).
315.  Other dehydration products.
320.  Petroleum products.
331.  Processing pectin.
332.  Processing other food products.
341.  Processing crude drugs.
342.  Processing glandular products, vitamins, hormones, and yeasts.
343.  Processing antibiotics and vaccines.
344.  Processing medicinal chemicals (including alkaloids).
345.  Processing blood and blood products.
349.  Miscellaneous drug processing (including manufacture of pills).
351.  Processing dyes and intermediates.
352.  Processing perfume materials and fixatives.
353.  Processing photographic chemicals.
354.  Processing rosin.
355.  Processing rubber (latex).
358.  Processing other chemicals.
359.  Processing miscellaneous products.
410.  Disinfectants, insecticides, fungicides, and other biocides.
420.  Embalming fluids and related products.
430.  Sterilizing and preserving solutions.
440.  Industrial detergents and soaps.
450.  Cleaning solutions (including household detergents).
481.  Photoengraving and rotogravure dyes and solutions.
482.  Other dye solutions.
485.  Miscellaneous solutions (including duplicating fluids).

    (2) As a raw material:

521.  Ethyl acetate.
522.  Ethyl chloride.
523.  Other ethyl esters.
530.  Ethylamines.
540.  Dyes and intermediates.
551.  Acetaldehyde.
552.  Other aldehydes.
561.  Ethyl ether.
562.  Other ethers.
571.  Ethylene dibromide.
572.  Ethylene gas.
573.  Xanthates.
574.  Fulminate of mercury and other detonators.
575.  Drugs and medicinal chemicals.
579.  Other chemicals.

    (3) As a fuel:

611.  Automobile and supplementary fuels.
612.  Airplane and supplementary fuels.
613.  Rocket and jet fuels.
620.  Proprietary heating fuels.
630.  Other fuel uses.

    (4) As a fluid:

710.  Scientific instruments.
720.  Brake fluids.
730.  Cutting oil.
740.  Refrigerating uses.
750.  Other fluid uses.
760.  Proprietary anti-freeze.

    (5) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).
900.  Specialized uses (unclassified).

[T.D. ATF-133, 48 FR 24673, June 2, 1983, as amended by T.D. ATF-199, 50 
FR 9183, Mar. 6, 1985; T.D. ATF-442, 66 FR 12854, Mar. 1, 2001]



Sec. 21.33  Formula No. 2-B.

    (a) Formula. To every 100 gallons of alcohol add:

    One-half gallon of benzene, \1/2\ gallon of rubber hydrocarbon 
solvent, \1/2\ gallon of toluene, or \1/2\ gallon of heptane.

    (b) Authorized uses. (1) As a solvent:

021.  Cellulose plastics.
022.  Non-cellulose plastics, including resins.
031.  Photographic film and emulsions.
032.  Transparent sheeting.
033.  Explosives.
311.  Cellulose compounds (dehydration).
312.  Sodium hydrosulfite (dehydration).
315.  Other dehydration products.
320.  Petroleum products.
331.  Processing pectin.
332.  Processing other food products.
341.  Processing crude drugs.
342.  Processing glandular products, vitamins, hormones, and yeasts.
343.  Processing antibiotics and vaccines.
344.  Processing medicinal chemicals (including alkaloids).
349.  Miscellaneous drug processing (including manufacture of pills).
351.  Processing dyes and intermediates.
352.  Processing perfume materials and fixatives.
353.  Processing photographic chemicals.
358.  Processing other chemicals.
359.  Processing miscellaneous products.

    (2) As a raw material:

521.  Ethyl acetate.
522.  Ethyl chloride.
523.  Other ethyl esters.
524.  Sodium ethylate, anhydrous.
530.  Ethylamines.
540.  Dyes and intermediates.
551.  Acetaldehyde.
552.  Other aldehydes.
561.  Ethyl ether.
562.  Other ethers.
571.  Ethylene dibromide.
572.  Ethylene gas.
573.  Xanthates.
575.  Drugs and medicinal chemicals.
576.  Organo-silicone products.

[[Page 473]]

579.  Other chemicals.

    (3) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).

    (c) Conditions governing use. This formula shall be used in a closed 
and continuous system unless otherwise authorized by the appropriate ATF 
officer.

[T.D. ATF-133, 48 FR 24673, June 2, 1983, as amended by T.D. ATF-442, 66 
FR 12854, Mar. 1, 2001]



Sec. 21.34  Formula No. 2-C.

    (a) Formula. To every 100 gallons of alcohol add:

    Thirty-three pounds or more of metallic sodium and either \1/2\ 
gallon of benzene, \1/2\ gallon of toluene, or \1/2\ gallon of rubber 
hydrocarbon solvent.

    (b) Authorized uses. (1) As a solvent:

344.  Processing medicinal chemicals (including alkaloids).
358.  Processing other chemicals.
359.  Processing miscellaneous products.

    (2) As a raw material:

523.  Miscellaneous ethyl esters.
530.  Ethylamines.
540.  Dyes and intermediates.
575.  Drugs and medicinal chemicals.
579.  Other chemicals.

    (3) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).

    (c) Conditions governing use. This formula shall be used in a closed 
and continuous system unless otherwise authorized by the appropriate ATF 
officer.



Sec. 21.35  Formula No. 3-A.

    (a) Formula. To every 100 gallons of alcohol add:

    Five gallons of methyl alcohol.

    (b) Authorized uses. (1) As a solvent:

011.  Cellulose coatings.
012.  Synthetic resin coatings.
016.  Other coatings.
021.  Cellulose plastics.
022.  Non-cellulose plastics, including resins.
031.  Photographic film and emulsions.
032.  Transparent sheeting.
033.  Explosives.
034.  Cellulose intermediates and industrial collodions.
035.  Soldering flux.
036.  Adhesives and binders.
041.  Proprietary solvents.
043.  Solvents, special (restricted sale).
051.  Polishes.
052.  Inks (including meat branding inks).
053.  Stains (wood, etc.).
141.  Shampoos.
142.  Soap and bath preparations.
311.  Cellulose compounds (dehydration).
312.  Sodium hydrosulfite (dehydration).
315.  Other dehydration products.
320.  Petroleum products.
331.  Processing pectin.
332.  Processing other food products.
341.  Processing crude drugs.
342.  Processing glandular products, vitamins, hormones, and yeasts.
343.  Processing antibiotics and vaccines.
344.  Processing medicinal chemicals (including alkaloids).
345.  Processing blood and blood products.
349.  Miscellaneous drug processing (including manufacture of pills).
351.  Processing dyes and intermediates.
352.  Processing perfume materials and fixatives.
353.  Processing photographic chemicals.
354.  Processing rosin.
355.  Processing rubber (latex).
358.  Processing other chemicals.
359.  Processing miscellaneous products.
410.  Disinfectants, insecticides, fungicides, and other biocides.
420.  Embalming fluids and related products.
430.  Sterilizing and preserving solutions.
440.  Industrial detergents and soaps.
450.  Cleaning solutions (including household detergents).
470.  Theater sprays, incense, and room deodorants.
481.  Photoengraving and rotogravure dyes and solutions.
482.  Other dye solutions.
485.  Miscellaneous solutions (including duplicating fluids).

    (2) As a raw material:

530.  Ethylamines.
540.  Dyes and intermediates.
575.  Drugs and medicinal chemicals.
576.  Organo-silicone products.
579.  Other chemicals.
590.  Synthetic resins.

    (3) As a fuel:

611.  Automobile and supplementary fuels.
612.  Airplane and supplementary fuels.
613.  Rocket and jet fuels.
620.  Proprietary heating fuels.
630.  Other fuel uses.

    (4) As a fluid:

710.  Scientific instruments.
720.  Brake fluids.
730.  Cutting oils.

[[Page 474]]

740.  Refrigerating uses.
750.  Other fluid uses.

    (5) Miscellaneous uses:

810.  General laboratory and experimental use (own use only).
811.  Laboratory reagents for sale.
812.  Product development and pilot plant uses (own use only).
900.  Specialized uses (unclassified).

[T.D. ATF-133, 48 FR 24673, June 2, 1983, as amended by T.D. ATF-199, 50 
FR 9183, Mar. 6, 1985]



Sec. 21.36  Formula No. 3-B.

    (a) Formula. To every 100 gallons of alcohol add:

    One gallon of pine tar, U.S.P.

    (b) Authorized uses. (1) As a solvent:

111.  Hair and scalp preparations.
141.  Shampoos.
142.  Soap and bath preparations.
410.  Disinfectants, insecticides, fungicides, and other biocides.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.37  Formula No. 3-C.

    (a) Formula. To every 100 gallons of alcohol add:

    Five gallons of isopropyl alcohol.

    (b) Authorized uses. (1) As a solvent:

011.  Cellulose coatings.
012.  Synthetic resin coatings.
016.  Other coatings.
021.  Cellulose plastics.
022.  Non-cellulose plastics, including resins.
031.  Photographic film and emulsions.
032.  Transparent sheeting.
033.  Explosives.
034.  Cellulose intermediates and industrial collodions.
035.  Soldering flux.
036.  Adhesives and binders.
043.  Solvents, special (restricted sale).
051.  Polishes.
052.  Inks (including meat branding inks).
053.  Stains (wood, etc.).
141.  Shampoos.
142.  Soaps and bath preparations.
311.  Cellulose compounds (dehydration).
312.  Sodium hydrosulfite (dehydration).
315.  Other dehydration products.
320.  Petroleum products.
331.  Processing pectin.
332.  Processing other food products.
341.  Processing crude drugs.
342.  Processing glandular products, vitamins, hormones, and yeasts.
343.  Processing antibiotics and vaccines.
344.  Processing medicinal chemicals (including alkaloids).
345.  Processing blood and blood products.
349.  Miscellaneous drug processing (including manufacture of pills).
351.  Processing dyes and intermediates.
352.  Processing perfume materials and fixatives.
353.  Processing photographic chemicals.
354.  Processing rosin.
355.  Processing rubber (latex).
358.  Processing other chemicals.
359.  Processing miscellaneous products.
410.  Disinfectants, insecticides, fungicides, and other biocides.
420.  Embalming fluids and related products.
430.  Sterilizing and preserving solutions.
440.  Industrial detergents and soaps.
450.  Cleaning solutions (including household detergents).
470.  Theater sprays, incense, and room deodorants.
481.  Photoengraving and rotogravure dyes and solutions.
482.  Other dye solutions.
485.  Miscellaneous solutions (including duplicating fluids).

    (2) As a raw material:

530.  Ethylamines.
540.  Dyes and intermediates.
575.  Drugs and medicinal chemicals.
576.  Organo-silicone products.
579.  Other chemicals.
590.  Synthetic resins.

    (3) As a fuel:

611.  Automobile and supplementary fuels.
612.  Airplane and supplementary fuels.
613.  Rocket and jet fuels.
620.  Proprietary heating fuels.
630.  Other fuel uses.

    (4) As a fluid:

710.  Scientific instruments.
720.  Brake fluids.
730.  Cutting oils.
740.  Refrigerating uses.
750.  Other fluid uses.

    (5) Miscellaneous uses:

810.  General laboratory and experimental use (own use only).
811.  Laboratory reagents for sale.
812.  Product development and pilot plant uses (own use only).
900.  Specialized uses (unclassified).

    (c) Conditions governing use. This formula shall not be used in 
manufacturing Reagent alcohol general-use formula under Sec. 20.117 of 
this chapter.

[T.D. ATF-133, 48 FR 24673, June 2, 1983, as amended by T.D. ATF-199, 50 
FR 9183, Mar. 6, 1985]

[[Page 475]]



Sec. 21.38  Formula No. 4.

    (a) Formula. To every 100 gallons of alcohol, or to every 100 
gallons of rum of not less than 150 proof, add:
    One gallon of the following solution: Five gallons of an aqueous 
solution containing 40 percent nicotine; 3.6 avoirdupois ounces of 
methylene blue, U.S.P.; and water sufficient to make 100 gallons.
    (b) Authorized uses. (1) As a solvent:

460.  Tobacco sprays and flavors.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.39  Formula No. 6-B.

    (a) Formula. To every 100 gallons of alcohol add:

    One-half gallon of pyridine bases.

    (b) Authorized uses. (1) As a raw material:

523.  Miscellaneous ethyl esters.
574.  Fulminate of mercury and other detonators.
575.  Drugs and medicinal chemicals.
579.  Other chemicals.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.40  Formula No. 12-A.

    (a) Formula. To every 100 gallons of alcohol add:

    Five gallons of benzene, or 5 gallons of toluene.

    (b) Authorized uses. (1) as a solvent:

021.  Cellulose plastics.
022.  Non-cellulose plastics, including resins.
036.  Adhesives and binders.
342.  Processing glandular products, vitamins, hormones, and yeasts.
343.  Processing antibiotics and vaccines.
344.  Processing medicinal chemicals (including alkaloids).
345.  Processing blood and blood products.
351.  Processing dyes and intermediates.
352.  Processing perfume materials and fixatives.
354.  Processing rosin.
358.  Processing other chemicals.
359.  Processing miscellaneous products.
430.  Sterilizing and preserving solutions.

    (2) As a raw material:

523.  Miscellaneous ethyl esters.
530.  Ethylamines.
540.  Dyes and intermediates.
575.  Drugs and medicinal chemicals.
579.  Other chemicals.

    (3) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.41  Formula No. 13-A.

    (a) Formula. To every 100 gallons of alcohol add:

    Ten gallons of ethyl ether.

    (b) Authorized uses. (1) As a solvent:

015.  Candy glazes.
021.  Cellulose plastics.
022.  Non-cellulose plastics, including resins.
031.  Photographic film and emulsions.
032.  Transparent sheeting.
034.  Cellulose intermediates and industrial collodions.
052.  Inks (not including meat branding inks).
241.  Collodion, U.S.P.
331.  Processing pectin.
332.  Processing other food products.
342.  Processing glandular products, vitamins, hormones, and yeasts.
343.  Processing antibiotics and vaccines.
344.  Processing medicinal chemicals (including alkaloids).
345.  Processing blood and blood products.
349.  Miscellaneous drug processing (including manufacture of pills).
352.  Processing perfume materials and fixatives.
353.  Processing photographic chemicals.
358.  Processing other chemicals.
359.  Processing miscellaneous products.
430.  Sterilizing and preserving solutions.
481.  Photoengraving and rotogravure solutions and dyes.

    (2) As a raw material:

523.  Miscellaneous ethyl esters.
561.  Ethyl ether.
562.  Other ethers.
575.  Drugs and medicinal chemicals.
579.  Other chemicals.

    (3) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.42  Formula No. 17.

    (a) Formula. To every 100 gallons of alcohol add:

    Five-hundredths (0.05) gallon (6.4 fluid ounces) of bone oil 
(Dipple's oil).

    (b) Authorized uses. (1) As a solvent:


[[Page 476]]


344.  Processing medicinal chemicals (including alkaloids).
358.  Processing other chemicals.
359.  Processing miscellaneous products.

    (2) As a raw material:

575.  Drugs and medicinal chemicals.
579.  Other chemicals.

    (3) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.43  Formula No. 18.

    (a) Formula. To every 100 gallons of alcohol of not less than 160 
proof add:

    One hundred gallons of vinegar of not less than 90-grain strength or 
150 gallons of vinegar of not less than 60-grain strength.

    (b) Authorized uses. (1) As a raw material:

511.  Vinegar.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.44  Formula No. 19.

    (a) Formula. To every 100 gallons of alcohol add:

    One hundred gallons of ethyl ether.

    (b) Authorized uses. (1) As a solvent:

031.  Photographic film and emulsions.
034.  Cellulose intermediates and industrial collodions.
241.  Collodion, U.S.P.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.45  Formula No. 20.

    (a) Formula. To every 100 gallons of alcohol add:

    Five gallons of chloroform.

    (b) Authorized uses. (1) As a raw material:

579.  Miscellaneous chemicals (chloroform).

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.46  Formula No. 22.

    (a) Formula. To every 100 gallons of alcohol add:

    Ten gallons of formaldehyde solution, U.S.P.

    (b) Authorized uses. (1) As a solvent:

420.  Embalming fluids and related products.
430.  Sterilizing and preserving solutions.
470.  Theater sprays, incense, and room deodorants.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.47  Formula No. 23-A.

    (a) Formula. To every 100 gallons of alcohol add:

    Eight gallons of acetone, U.S.P.

    (b) Authorized uses. (1) As a solvent:

011.  Cellulose coatings.
012.  Synthetic resin coatings.
013.  Shellac coatings.
014.  Other natural resin coatings.
015.  Candy glazes.
016.  Other coatings.
032.  Transparent sheeting.
034.  Cellulose intermediates and industrial collodions.
035.  Soldering flux.
036.  Adhesives and binders.
042.  Solvents and thinners (other than proprietary solvents or special 
industrial solvents).
052.  Inks (including meat branding inks).
053.  Stains (wood, etc.).
111.  Hair and scalp preparations.
112.  Bay rum.
113.  Lotions and creams (hand, face, and body).
114.  Body deodorants and deodorant creams.
141.  Shampoos.
142.  Soaps and bath preparations.
210.  External pharmaceuticals, not U.S.P. or N.F.
244.  Antiseptic solutions, U.S.P. or N.F.
249.  Miscellaneous external pharmaceuticals, U.S.P. or N.F.
331.  Processing pectin.
332.  Processing other food products.
341.  Processing crude drugs.
342.  Processing glandular products, vitamins, hormones, and yeasts.
343.  Processing antibiotics and vaccines.
344.  Processing medicinal chemicals (including alkaloids).
345.  Processing blood and blood products.
349.  Miscellaneous drug processing (including manufacture of pills).
358.  Processing other chemicals.
359.  Processing miscellaneous products.
410.  Disinfectants, insecticides, fungicides, and other biocides.
420.  Embalming fluids and related products.
430.  Sterilizing and preserving solutions.
440.  Industrial detergents and soaps.

[[Page 477]]

450.  Cleaning solutions (including household detergents).
482.  Miscellaneous dye solutions.
485.  Miscellaneous solutions.

    (2) As a fluid:

740.  Refrigerating uses.
750.  Miscellaneous fluid uses.

    (3) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.48  Formula No. 23-F.

    (a) Formula. To every 100 gallons of alcohol add:

    Three pounds of salicylic acid, U.S.P., 1 pound of resorcinol 
(resorcin), U.S.P., and 1 gallon of bergamot oil, N.F. XI, or bay oil 
(myrcia oil), N.F. XI.

    (b) Authorized uses. (1) As a solvent:

111.  Hair and scalp preparations.
210.  External pharmaceuticals, not U.S.P. or N.F.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.49  Formula No. 23-H.

    (a) Formula. To every 100 gallons of alcohol add:

    Eight gallons of acetone, U.S.P., and 1.5 gallons of methyl isobutyl 
ketone.

    (b) Authorized uses. (1) As a solvent:

111.  Hair and scalp preparations.
113.  Lotions and creams (hand, face, and body).
210.  External pharmaceuticals, not U.S.P. or N.F.
220.  Rubbing alcohols.
410.  Disinfectants, insectides, fungicides, and other biocides.
450.  Cleaning solutions (including household detergents).

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.50  Formula No. 25.

    (a) Formula. To every 100 gallons of alcohol add:

    Twenty pounds of iodine, U.S.P., and 15 pounds of either potassium 
iodide, U.S.P., or sodium iodide, U.S.P.

    (b) Authorized uses. (1) As a solvent:

230.  Tinctures of iodine.
249.  Miscellaneous external pharmaceuticals, U.S.P. or N.F.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.51  Formula No. 25-A.

    (a) Formula. To every 100 gallons of alcohol add:

    A solution composed of 20 pounds of iodine, U.S.P.; 15 pounds of 
either potassium iodide, U.S.P., or sodium iodide, U.S.P.; and 15 pounds 
of water.

    (b) Authorized uses. (1) As a solvent:

230.  Tinctures of iodine.
249.  Miscellaneous external pharmaceuticals, U.S.P. or N.F.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.52  Formula No. 27.

    (a) Formula. To every 100 gallons of alcohol add:

    One gallon of rosemary oil, N.F. XII, and 30 pounds of camphor, 
U.S.P.

    (b) Authorized uses. (1) As a solvent:

210.  External pharmaceuticals, not U.S.P. or N.F.
243.  Liniments, U.S.P. or N.F.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.53  Formula No. 27-A.

    (a) Formula. To every 100 gallons of alcohol add:

    Thirty-five pounds of camphor, U.S.P., and 1 gallon of clove oil, 
N.F.

    (b) Authorized uses. (1) As a solvent:

210.  External pharmaceuticals, not U.S.P. or N.F.
410.  Disinfectants, insecticides, fungicides, and other biocides.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.54  Formula No. 27-B.

    (a) Formula. To every 100 gallons of alcohol add:

    One gallon of lavender oil, N.F., and 100 pounds of green soap, 
U.S.P.

[[Page 478]]

    Note. The requirements of this formula may be met by adding 1 gallon 
of lavender oil, N.F., and 66.5 pounds of U.S.P. quality soap 
concentrate containing 25 percent water to 100 gallons of alcohol and, 
after mixing, by adding thereto 33.5 pounds of water and again mixing.

    (b) Authorized uses. (1) As a solvent:

141.  Shampoos.
210.  External pharmaceuticals, not U.S.P. or N.F.
243.  Liniments, U.S.P. or N.F.
410.  Disinfectants insecticides, fungicides, and other biocides.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.55  Formula No. 28-A.

    (a) Formula. To every 100 gallons of alcohol add:

    One gallon or any combination totaling 1 gallon of either gasoline, 
unleaded gasoline, heptane, or rubber hydrocarbon solvent.

    (b) Authorized uses. (1) As a fuel:

611.  Automobile and supplementary fuels.
612.  Airplane and supplementary fuels.
613.  Rocket and jet fuels.
620.  Proprietary heating fuels.
630.  Other fuel uses.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.56  Formula No. 29.

    (a) Formula. To every 100 gallons of alcohol add:

    One gallon of 100 percent acetaldehyde or 5 gallons of an alcohol 
solution of acetaldehyde containing not less than 20 percent 
acetaldehyde, or 1 gallon of ethyl acetate having an ester content of 
100 percent, or, where approved by the appropriate ATF officer, as to 
material and quantity, not less than 6.8 pounds if solid, or 1 gallon if 
liquid, of any chemical. When material other than acetaldehyde or ethyl 
acetate is proposed to be used, the user shall submit an application for 
such use to the appropriate ATF officer. The application shall include 
specifications, assay methods, and an 8-ounce sample of the substitute 
material for analysis.

    (b) Authorized uses. (1) As a raw material:

511.  Vinegar.
512.  Acetic acid.
521.  Ethyl acetate.
522.  Ethyl chloride.
523.  Other ethyl esters.
530.  Ethylamines.
540.  Dyes and intermediates.
551.  Acetaldehyde.
552.  Other aldehydes.
561.  Ethyl ether.
562.  Other ethers.
571.  Ethylene dibromide.
572.  Ethylene gas.
573.  Xanthates.
575.  Drugs and medicinal chemicals.
579.  Other chemicals.
580.  Synthetic rubber.
590.  Synthetic resins.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).

    (c) Conditions governing use. This formula is restricted to 
processes in which the alcohol loses its identity by being converted 
into other chemicals.



Sec. 21.57  Formula No. 30.

    (a) Formula. To every 100 gallons of alcohol add:

    Ten gallons of methyl alcohol.

    (b) Authorized uses. (1) As a solvent:

011.  Cellulose coatings.
012.  Synthetic resin coatings.
021.  Cellulose plastics.
022.  Non-cellulose plastics, including resins.
031.  Photographic film and emulsions.
035.  Soldering flux.
036.  Adhesives and binders.
042.  Solvents and thinners (other than proprietary solvents or special 
industrial solvents).
051.  Polishes.
052.  Inks (not including meat branding inks).
053.  Stains.
142.  Soap and bath preparations.
331.  Processing pectin.
332.  Processing other food products.
341.  Processing crude drugs.
342.  Processing glandular products, vitamins, hormones, and yeasts.
343.  Processing antibiotics and vaccines.
344.  Processing medicinal chemicals (including alkaloids).
345.  Processing blood and blood products.
349.  Miscellaneous drug processing (including manufacture of pills).
352.  Processing perfume materials and fixatives.
353.  Processing photographic chemicals.
358.  Processing other chemicals.
359.  Processing miscellaneous products.
410.  Disinfectants, insecticides, fungicides, and other biocides.
430.  Sterilizing and preserving solutions.
440.  Industrial detergents and soaps.

[[Page 479]]

450.  Cleaning solutions (including household detergents).
481.  Photoengraving and rotogravure solutions and dyes.
482.  Other dye solutions.
485.  Miscellaneous solutions (including duplicating fluids).

    (2) As a raw material:

575.  Drugs and medicinal chemicals.
576.  Organo-silicone products.
579.  Other chemicals.
590.  Synthetic resins.

    (3) As a fluid in:

740.  Refrigerating uses.
750.  Other fluid uses:

    (4) Miscellaneous uses:

810.  General laboratory and experimental use (own use only).
811.  Laboratory reagents for sale.
812.  Product development and pilot plant uses (own use only).



Sec. 21.58  Formula No. 31-A.

    (a) Formula. To every 100 gallons of alcohol add:

    One hundred pounds of glycerin (glycerol), U.S.P., and 20 pounds of 
hard soap, N.F. XI.

    (b) Authorized uses. (1) As a solvent:

113.  Lotions and creams (hands, face, and body).
131.  Tooth paste and tooth powder.
141.  Shampoos.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.59  Formula No. 32.

    (a) Formula. To every 100 gallons of alcohol add:

    Five gallons of ethyl ether.

    (b) Authorized uses. (1) As a solvent:

031.  Photographic film and emulsions.
034.  Cellulose intermediates and industrial collodions.
052.  Inks (not including meat branding inks).
241.  Collodion, U.S.P.
311.  Ethyl cellulose compounds (dehydration).
332.  Processing miscellaneous food products.
342.  Processing glandular products, vitamins, hormones, and yeasts.
343.  Processing antibiotics and vaccines.
344.  Processing medicinal chemicals (including alkaloids).
430.  Sterilizing and preserving solutions.
481.  Photoengraving and rotogravure solutions and dyes.

    (2) As a raw material:

522.  Ethyl chloride.
523.  Other ethyl esters.
561.  Ethyl ether.
562.  Other ethers.
571.  Ethylene dibromide.
572.  Ethylene gas.
575.  Drugs and medicinal chemicals.
579.  Other chemicals.
580.  Synthetic rubber.

    (3) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.60  Formula No. 33.

    (a) Formula. To every 100 gallons of alcohol add:

    Thirty pounds of gentian violet or gentian violet, U.S.P.

    (b) Authorized uses. (1) As a solvent:

052.  Inks (not including meat branding inks).
210.  External pharmaceuticals, not U.S.P. or N.F.
249.  Miscellaneous external pharmaceuticals, U.S.P. or N.F.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).

    (c) Conditions governing use. Meat branding inks made with Formula 
No. 33 do not meet U.S. Department of Agriculture meat inspection 
specifications for use in Federally inspected establishments. Specially 
denatured alcohol Formulas No. 3-A, 3-C, and 23-A are authorized for 
this purpose.



Sec. 21.61  Formula No. 35.

    (a) Formula. To every 100 gallons of alcohol add:

    29.75 gallons of ethyl acetate having an ester content of 100 
percent by weight or the equivalent thereof not to exceed 35 gallons of 
ethyl acetate with an ester content of not less than 85 percent by 
weight.

    (b) Authorized uses. (1) As a solvent:

015.  Candy glazes.

    (2) Miscellaneous uses:

    812.  Product development and pilot plant uses (own use only).

[[Page 480]]



Sec. 21.62  Formula No. 35-A.

    (a) Formula. To every 100 gallons of alcohol add:

    4.25 gallons of ethyl acetate having an ester content of 100 percent 
by weight or the equivalent thereof not to exceed 5 gallons of ethyl 
acetate with an ester content of not less than 85 percent by weight.

    (b) Authorized uses. (1) As a solvent:

015.  Candy glazes.
331.  Processing pectin.
332.  Processing other food products.
342.  Processing glandular products, vitamins, hormones, and yeasts.
343.  Processing antibiotics and vaccines.
344.  Processing medicinal chemicals (including alkaloids).
349.  Miscellaneous drug processing (including manufacture of pills).
358.  Processing miscellaneous chemicals.
359.  Processing miscellaneous products.

    (2) As a raw material:

511.  Vinegar.
512.  Acetic acid.
521.  Ethyl acetate.
523.  Other ethyl esters.
590.  Synthetic resins.
910.  Animal feed supplements.

    (3) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.63  Formula No. 36.

    (a) Formula. To every 100 gallons of alcohol add:

    Three gallons of ammonia, aqueous, 27 to 30 percent by weight; 3 
gallons of strong ammonia solution, N.F.: 17.5 pounds of caustic soda, 
liquid grade, containing 50 percent sodium hydroxide by weight; or 12.0 
pounds of caustic soda, liquid grade, containing 73 percent sodium 
hydroxide by weight.

    (b) Authorized uses. (1) As a solvent:

141.  Shampoos.
142.  Soap and bath preparations.
210.  External pharmaceuticals, not U.S.P. or N.F.
450.  Cleaning solutions (including household detergents).

    (2) As a raw material:

530.  Ethylamines.
540.  Dyes and intermediates.
579.  Other chemicals.

    (3) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.64  Formula No. 37.

    (a) Formula. To every 100 gallons of alcohol add:

    Forty-five fluid onces of eucalyptol, N.F. XII, 30 avoirdupois 
ounces of thymol, N.F., and 20 avoirdupois ounces of menthol, U.S.P.

    (b) Authorized uses. (1) As a solvent:

111.  Hair and scalp preparations.
112.  Bay rum.
113.  Lotions and creams (hand, face, and body).
131.  Dentifrices.
132.  Mouth washes.
210.  External pharmaceuticals, not U.S.P. or N.F.
244.  Antispetic solutions, U.S.P. or N.F.
410.  Disinfectants, insecticides, fungicides, and other biocides.
430.  Sterilizing and preserving solutions.
470.  Theater sprays, incense, and room deodorants.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.65  Formula No. 38-B.

    (a) Formula. To every 100 gallons of alcohol add:

    Ten pounds of any one, or a total of 10 pounds of two or more, of 
the oils and substances listed below:

Alpha terpineol
Anethole, N.F.
Anise oil, N.F.
Bay oil (myrcia oil), N.F. XI.
Benzaldehyde, N.F.
Bergamot oil, N.F. XI.
Bitter almond oil, N.F. X.
Camphor, U.S.P.
Cedar leaf oil, U.S.P. XIII.
Chlorothymol, N.F. XII.
Cinnamic aldehyde, N.F. IX.
Cinnamon oil, N.F.
Citronella oil, natural.
Clove oil, N.F.
Coal tar, U.S.P.
Eucalyptol, N.F. XII.
Eucalyptus oil, N.F.
Eugenol, U.S.P.
Guaiacol, N.F. X.
Lavender oil, N.F.
Menthol, U.S.P.
Methyl salicylate, N.F.
Mustard oil, volatile (allyl isothiocyanate), U.S.P. XII.
Peppermint oil, N.F.
Phenol, U.S.P.
Phenyl salicylate (salol), N.F. XI.
Pine oil, N.F. XII.
Pine needle oil, dwarf, N.F.
Rosemary oil, N.F. XII.

[[Page 481]]

Safrole.
Sassafras oil, N.F. XI.
Spearmint oil, N.F.
Spearmint oil, terpeneless.
Spike lavender oil, natural.
Storax, U.S.P.
Thyme oil, N.F. XII.
Thymol, N.F.
Tolu balsam, U.S.P.
Turpentine oil, N.F. XI.

    If it is shown that none of the above single denaturants or 
combinations can be used in the manufacture of a particular product, the 
user may submit an application to the appropriate ATF officer, 
requesting permission to use another essential oil or substance having 
denaturing properties satisfactory to the appropriate ATF officer. In 
such a case the user shall furnish the appropriate ATF officer, with 
specifications, assay methods, the name and address of the manufacturer, 
and an 8-ounce sample of the denaturant for analysis.

    (b) Authorized uses. (1) As a solvent:

111.  Hair and scalp preparations.
112.  Bay rum.
113.  Lotions and creams (hand, face, and body).
114.  Deodorants (body).
121.  Perfumes and perfume tinctures.
122.  Toilet waters and colognes.
131.  Dentifrices.
132.  Mouth washes.
141.  Shampoos.
142.  Soap and bath preparations.
210.  External pharmaceuticals, not U.S.P. or N.F.
243.  Liniments, U.S.P. or N.F.
244.  Antiseptic solutions, U.S.P. or N.F.
249.  Miscellaneous external pharmaceuticals, U.S.P. or N.F.
349.  Miscellaneous drug processing (including manufacture of pills).
410.  Disinfectants, insecticides, fungicides, and other biocides.
430.  Sterlizing and preserving solutions.
470.  Theater sprays, incense, and room deodorants.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).

[T.D. ATF-133, 48 FR 24673, June 2, 1983, as amended by T.D. ATF-442, 66 
FR 12854, Mar. 1, 2001]



Sec. 21.66  Formula No. 38-C.

    (a) Formula. To every 100 gallons of alcohol add:

    Ten pounds of menthol, U.S.P., and 1.25 gallons of formaldehyde 
solution, U.S.P.

    (b) Authorized uses. (1) As a solvent:

131.  Dentifrices.
132.  Mouth washes.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.67  Formula No. 38-D.

    (a) Formula. To every 100 gallons of alcohol add:

    Two and one-half pounds of menthol, U.S.P., and 2.5 gallons of 
formaldehyde solution, U.S.P.

    (b) Authorized uses. (1) As a solvent:

131.  Dentifrices.
132.  Mouth washes.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.68  Formula No. 38-F.

    (a) Formula. To every 100 gallons of alcohol add:

    (1) Six pounds of either boric acid, N.F., or Polysorbate 80, N.F.; 
1\1/3\ pounds of thymol, N.F.; 1\1/3\ pounds of chlorothymol, N.F. XII; 
and 1\1/3\ pounds of menthol, U.S.P.; or
    (2) A total of at least 3 pounds of any two or more denaturing 
materials listed under Formula No. 38-B, plus sufficient boric acid, 
N.F., or Polysorbate 80, N.F., to total 10 pounds of denaturant; or
    (3) Seven pounds of zinc chloride, U.S.P., 2.6 fluid ounces of 
hydrochloric acid, N.F., and a total of 3 pounds of any two or more of 
the denaturing materials listed under Formula No. 38-B.

    (b) Authorized uses. (1) As a solvent:

132.  Mouth washes.
210.  External pharmaceuticals, not U.S.P. or N.F.
244.  Antiseptic solutions, U.S.P. or N.F.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.69  Formula No. 39.

    (a) Formula. To every 100 gallons of alcohol add:

    Nine pounds of sodium salicylate, U.S.P., or salicylic acid, U.S.P.; 
1.25 gallons of fluid extract of quassia, N.F. VII; and \1/8\ gallon of 
tert-butyl alcohol.

    (b) Authorized uses. (1) As a solvent:

111.  Hair and scalp preparations.
112.  Bay rum.

[[Page 482]]

113.  Lotions and creams (hand, face, and body).
121.  Perfume and perfume tinctures.
122.  Toilet waters and colognes.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.70  Formula No. 39-A.

    (a) Formula. To every 100 gallons of alcohol add:

    Sixty avoirdupois ounces of any one of the following alkaloids or 
salts together with \1/8\ gallon of tert- butyl alcohol:

Quinine, N.F. X.
Quinine bisulfate, N.F. XI.
Quinine dihydrochloride, N.F. XI.
Cinchonidine.
Cinchonidine sulfate, N.F. IX.

    (b) Authorized uses. (1) As a solvent:

111.  Hair and scalp preparations.
122.  Toilet waters and colognes.
141.  Shampoos.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.71  Formula No. 39-B.

    (a) Formula. To every 100 gallons of alcohol add:

    Two and one-half gallons of diethyl phthalate and \1/8\ gallon of 
tert- butyl alcohol.

    (b) Authorized uses. (1) As a solvent:

111.  Hair and scalp preparations.
112.  Bay rum.
113.  Lotions and creams (hand, face, and body).
114.  Deodorants (body).
121.  Perfumes and perfume tinctures.
122.  Toilet waters and colognes.
141.  Shampoos.
142.  Soap and bath preparations.
210.  External pharmaceuticals, not U.S.P. or N.F.
410.  Disinfectants, insecticides, fungicides, and other biocides.
450.  Cleaning solutions (including household detergents).
470.  Theater sprays, incense, and room deodorants.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.72  Formula No. 39-C.

    (a) Formula. To every 100 gallons of alcohol add:

    One gallon of diethyl phthalate.

    (b) Authorized uses. (1) As a solvent:

111.  Hair and scalp preparations.
113.  Lotions and creams (hand, face, and body).
114.  Deodorants (body).
121.  Perfumes and perfume tinctures.
122.  Toilet waters and colognes.
142.  Soaps and bath preparations.
470.  Theater sprays, incense, and room deodorants.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.73  Formula No. 39-D.

    (a) Formula. To every 100 gallons of alcohol add:

    One gallon of bay oil (myrcia oil), N.F. XI, and either 50 
avoirdupois ounces of quinine sulfate, U.S.P., 50 avoirdupois ounces of 
sodium salicylate, U.S.P.

    (b) Authorized uses. (1) As a solvent:

111.  Hair and scalp preparations.
112.  Bay rum.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.74  Formula No. 40.

    (a) Formula. To every 100 gallons of alcohol add \1/8\ gallon of 
tert-butyl alcohol, and:

    One and one-half avoirdupois ounces of either (1) brucine alkaloid, 
(2) brucine sulfate, N.F. IX, (3) quassin, or (4) any combination of two 
or of three of those denaturants.

    (b) Authorized uses. (1) As a solvent:

111.  Hair and scalp preparations.
112.  Bay rum.
113.  Lotions and creams (hand, face, and body).
114.  Deodorants (body).
121.  Perfumes and perfume tinctures.
122.  Toilet waters and colognes.
141.  Shampoos.
142.  Soaps and bath preparations.
210.  External pharmaceuticals, not U.S.P. or N.F.
410.  Disinfectants, insecticides, fungicides, and other biocides.
450.  Cleaning solutions (including household detergents).
470.  Theater sprays, incense, and room deodorants.

    (2) Miscellaneous uses:


[[Page 483]]


812.  Product development and pilot plant uses (own use only).



Sec. 21.75  Formula No. 40-A.

    (a) Formula. To every 100 gallons of alcohol add:

    One pound of sucrose octaacetate and \1/8\ gallon of tert-butyl 
alcohol.

    (b) Authorized uses. (1) As a solvent:

111.  Hair and scalp preparations.
112.  Bay rum.
113.  Lotions and creams (hand, face, and body).
114.  Deodorants (body).
121.  Perfumes and perfume tinctures.
122.  Toilet waters and colognes.
141.  Shampoos.
142.  Soaps and bath preparations.
210.  External pharmaceuticals, not U.S.P. or N.F.
410.  Disinfectants, insecticides, fungicides, and other biocides.
450.  Cleaning solutions (including household detergents).
470.  Theater sprays, incense, and room deodorants.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.76  Formula No. 40-B.

    (a) Formula. To every 100 gallons of alcohol add:

One-sixteenth avoirdupois ounce of denatonium benzoate, N.F., and \1/8\ 
gallon of tert-butyl alcohol.

    (b) Authorized uses. (1) As a solvent:

111.  Hair and scalp preparations.
112.  Bay rum.
113.  Lotions and creams (hand, face, and body).
114.  Deodorants (body).
121.  Perfumes and perfume tinctures.
122.  Toilet waters and colognes.
141.  Shampoos.
142.  Soaps and bath preparations.
210.  External pharmaceuticals, not U.S.P. or N.F.
410.  Disinfectants, insecticides, fungicides, and other biocides.
450.  Cleaning solutions (including household detergents).
470.  Theater sprays, incense, and room deodorants.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).

[T.D. ATF-133, 48 FR 24673, June 2, 1983, as amended by T.D. ATF-442, 66 
FR 12854, Mar. 1, 2001]



21.77  Formula No. 40-C.

    (a) Formula. To every 100 gallons of alcohol add:

    Three gallons of tert-butyl alcohol.

    (b) Authorized uses. (1) As a solvent:

111.  Hair and scalp preparations.
112.  Bay rum.
113.  Lotions and creams (hand, face, and body).
114.  Deodorants (body).
121.  Perfumes and perfume tinctures.
122.  Toilet waters and colognes.
141.  Shampoos.
142.  Soaps and bath preparations.
210.  External pharmaceuticals, not U.S.P. or N.F.
410.  Disinfectants, insecticides, fungicides, and other biocides.
450.  Cleaning solutions (including household detergents).
470.  Theater sprays, incense, and room deodorants.
485.  Miscellaneous solutions.

    (2) Miscellaneous uses.

812.  Product development and pilot plant uses (own use only).

    (c) Conditions governing use. This formula shall be used only in the 
manufacture of products which will be packaged in pressurized containers 
in which the liquid contents are in intimate contact with the propellant 
and from which the contents are not easily removable in liquid form.



Sec. 21.78  Formula No. 42.

    (a) Formula. To every 100 gallons of alcohol add:

    (1) Eighty grams of potassium iodide, U.S.P., and 109 grams of red 
mercuric iodide, N.F. XI; or
    (2) Ninety-five grams of thimerosal, U.S.P.; or
    (3) Seventy-six grams of any of the following: phenyl mercuric 
nitrate, N.F.; phenyl mercuric chloride, N.F. IX; or phenyl mercuric 
benzoate.

    (b) Authorized uses. (1) As a solvent:

430.  Sterilizing and preserving solutions.

    (2) Miscellaneous uses:


[[Page 484]]


812.  Product development and pilot plant uses (own use only).



Sec. 21.79  Formula No. 44.

    (a) Formula. To every 100 gallons of alcohol add:

    Ten gallons of n-butyl alcohol

    (b) Authorized uses. (1) As a solvent:

430.  Sterilizing and preserving solutions.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).



Sec. 21.80  Formula No. 45.

    (a) Formula. To every 100 gallons of alcohol add:

    Three hundred pounds of refined white or orange shellac.

    (b) Authorized uses. (1) As a solvent:

015.  Candy glazes.

    (2) Miscellaneous uses:

812  Product development and pilot plant uses (own use only).



Sec. 21.81  Formula No. 46.

    (a) Formula. To every 100 gallons of alcohol add:

    Twenty-five fluid ounces of phenol, U.S.P., and 4 fluid ounces of 
methyl salicylate, N.F.

    (b) Authorized uses. (1) As a solvent:

220.  An antiseptic, sterilizing, and bathing solution having restricted 
use.

    (2) Miscellaneous uses:

812.  Product development and pilot plant uses (own use only).

    (c) Conditions governing use. This formula may be used only by 
institutions and organizations which are of a semipublic character and 
engaged in charitable work.



                Subpart E--Specifications for Denaturants



Sec. 21.91  General.

    Denaturants prescribed in this part shall comply with the 
specifications set forth in this subpart. However, in order to meet 
requirements of national defense or for other valid reasons, the 
appropriate ATF officer may, pursuant to written application filed by 
the denaturer, authorize variations from such specifications or 
authorize the use of substitute denaturants if such variation or 
substitution will not jeopardize the revenue. Each such application 
shall identify the applicant by name, address, and permit number; state 
the number of each formula of specially denatured alcohol involved; 
explain why the use of the substitute denaturant, or the variation from 
specifications, as the case may be, is necessary; and include, as 
applicable, either the identity of the approved denaturant for which 
substitution is desired and the identity of the substitute denaturant 
(including the name of the manufacturer) or the identity of the 
prescribed specifications and the proposed variation from those 
specifications. The application shall be accompanied by an 8-ounce 
sample of the proposed denaturing material for analysis.

[T.D. ATF-133, 48 FR 24673, June 2, 1983, as amended by T.D. ATF-442, 66 
FR 12854, Mar. 1, 2001]



Sec. 21.92  Denaturants listed as U.S.P. or N.F.

    Denaturing materials and products listed in this part as ``U.S.P.'' 
or ``N.F.'' shall meet the specifications set forth in the current 
United States Pharmacopoeia or National Formulary, or the latest volume 
of these publications in which the denaturants appeared as official 
preparations.



Sec. 21.93  Acetaldehyde.

    (a) Aldehyde content (as acetaldehyde). Not less than 95.0 percent 
by weight.
    (b) Color. Colorless.
    (c) Odor. Characteristic pungent, fruity odor.
    (d) Specific gravity at 15.56  deg./15.56  deg.C. Not less than 
0.7800.



Sec. 21.94  Acetaldol.

    (a) Purity. Not less than 90 percent by weight acetaldol as 
determined by the following method:

    Dissolve 15 grams of the acetaldol in distilled water and dilute to 
1 liter in a volumetric flask. Transfer 5 ml of this solution to a 250 
ml glass-stoppered flask containing 25 ml distilled water. Add 25 ml of 
a freshly prepared 1 percent sodium bisulfite solution. Prepare a blank 
omitting the acetaldol solution. Place the flasks in a dark place away

[[Page 485]]

from excessive heat or cold and allow to stand six hours. Remove flasks 
and titrate free bisulfite with 0.1 N iodine solution using starch 
indicator.

Percent acetaldol by weight=(ml blank-ml test)x200x0.44/weight of sample

    Titrations in excess of 100 percent may be obtained if the sample 
contains appreciable amounts of acetaldehyde.

    (b) Specific gravity at 20  deg.C. 1.098 to 1.105.



Sec. 21.95  Alpha terpineol.

    (a) Boiling point at 752mm 218.8-219.4  deg.C.
    (b) Density at 15 deg. 0.9386.
    (c) Refractive index at 20 deg. 1.4831.

[T.D. ATF-442, 66 FR 12854, Mar. 1, 2001]



Sec. 21.96  Ammonia, aqueous.

    (a) Alkalinity. Strongly alkaline to litmus.
    (b) Ammonia content. 27 to 30 percent by weight. Accurately weigh a 
glass-stoppered flask containing 25 ml of water, add about 2 ml of the 
sample, stopper, and weigh again. Add methyl red indicator, and titrate 
with 1 N sulfuric acid. Each ml of 1 N sulfuric acid is equivalent to 
17.03 mg of NH3
    (c) Color. Colorless liquid.
    (d) Non-volatile residue. 2 mg maximum. Dilute a portion of the 
sample with 1\1/2\ times its volume of distilled water. Evaporate 10 ml 
of this product to dryness in a tared platinum or porcelain dish. Dry 
residue at 105  deg.C. for 1 hour, cool and weigh.
    (e) Odor. Characteristic (exceedingly pungent).
    (f) Specific gravity at 20  deg./4  deg.C. 0.8920 to 0.9010.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.97  Benzene.

    (a) Distillation range. (For applicable ASTM method, see 1980 Annual 
Book of ASTM Standards, Part 29, page 573, Standard No. D 836-77; for 
incorporation by reference, see Sec. 21.6(b).) When 100 ml of benzene 
are distilled by this method, not more than 1 ml should distill below 77 
 deg.C., and not less than 95 ml below 85  deg.C.
    (b) Odor. Characteristic odor.
    (c) Specific gravity at 15.6  deg./15.6  deg.C. 0.875 to 0.886.
    (d) Water solubility. When 10 ml of benzene are shaken with an equal 
volume of water in a glass-stoppered bottle, graduated to 0.1 ml, and 
allowed to stand 5 minutes to separate, the upper layer of liquid shall 
measure not less than 9.5 ml.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.98  Bone oil (Dipple's oil).

    (a) Color. The color shall be a deep brown.
    (b) Distillation range. When 100 ml are distilled in the manner 
described for pyridine bases, not more than 5.0 ml should distill below 
90  deg.C.
    (c) Pyrrol reaction. Prepare a 1.0 percent solution of bone oil in 
95 percent alcohol. Prepare a second solution containing 0.025 percent 
bone oil by diluting 2.50 ml of the first solution to 100 ml with 95 
percent alcohol. Dip a splinter of pine, previously moistened with 
concentrated hydrochloric acid, into 10 ml of the 0.025 percent bone oil 
solution. After a few minutes the splinter should show a distinct red 
coloration.
    (d) Reaction with mercuric chloride. Add 5 ml of the 1.0 percent 
bone oil solution above to 5 ml of a 2 percent alcoholic solution of 
mercuric chloride. A turbidity is formed at once which separates into a 
flocculent precipitate on standing several minutes. Add 5.0 ml of the 
0.025 percent bone oil solution to 5.0 ml of a 2.0 percent alcoholic 
solution of mercuric chloride. A faint turbidity appears after several 
minutes.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.99  Brucine alkaloid.

    (a) Identification test. Add a few drops of concentrated nitric acid 
to about 10 mg of brucine alkaloid. A vivid red color is produced. 
Dilute the red solution with a few drops of water and add a few drops of 
freshly made dilute stannous chloride solution. A reddish purple 
(violet) color is produced.
    (b) Melting point. 178  deg.1  deg.C. Dry the alkaloid 
in an oven for one hour at 100  deg.C., increase the temperature to 
110 deg.

[[Page 486]]

and dry to a constant weight before taking melting point.
    Note. Brucine alkaloid tetrahydrate melts at 105  deg.C. while the 
anhydrous form melts at 178  deg.C.
    (c) Strychnine test. Brucine alkaloid shall be free of strychnine 
when tested by the method listed under Brucine Sulfate, N.F. IX.
    Note. If the brucine contains as much as 0.05 percent strychnine, a 
clear distinctive violet color, characteristic of strychnine, will be 
obtained.
    (d) Sulfate test. No white precipitate is formed that is not 
dissolved by hydrochloric acid when several drops of a 1 N barium 
chloride solution are added to 10 ml of a solution of the alkaloid.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.100  n-Butyl alcohol.

    (a) Acidity (as acetic acid). 0.03 percent by weight maximum.
    (b) Color. Colorless.
    (c) Dryness at 20  deg.C. Miscible without turbidity with 10 volumes 
of 60 deg. Be1. gasoline.
    (d) Odor. Characteristic odor.
    (e) Specific gravity at 20  deg./20  deg.C. 0.810 to 0.815.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.101  tert-Butyl alcohol.

    (a) Acidity (as acetic acid). 0.003 percent by weight maximum.
    (b) Color. Colorless.
    (c) Distillation range. When 100 ml of tertiary butyl alcohol are 
distilled, none should distill below 78  deg.C. and none above 85 
deg.C. More than 95 percent should distill between 81  deg.-83  deg.C.
    (d) Dryness at 20  deg.C. Miscible without turbidity with 19 volumes 
of 60 deg. Be1. gasoline.
    (e) Freezing point (first needle). Above 20  deg.C.
    (f) Identification test. Place five drops of a solution containing 
approximately 0.1 percent tertiary butyl alcohol in ethyl alcohol in a 
test tube. Add 2 ml of Denige's reagent (dissolve 5 grams of red 
mercuric oxide in 20 ml of concentrated sulfuric acid; add this solution 
to 80 ml of distilled water, and filter when cool). Heat the mixture 
just to the boiling point and remove from the flame. A yellow 
precipitate forms within a few seconds.
    (g) Nonvolatile matter. Less than 0.005 percent by weight.
    (h) Odor. Characteristic odor.
    (i) Residual odor after evaporation. None.
    (j) Specific gravity at 25  deg./25  deg.C. 0.780 to 0.786.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.102  Caustic soda, liquid.

    (a) The liquid caustic soda may consist of either 50 percent or 73 
percent by weight sodium hydroxide in aqueous solution. The amount of 
caustic soda used shall be such that each 100 gallons of alcohol will 
contain not less than 8.76 pounds of sodium hyroxide, anhydrous basis.
    (b) Color. A 2 percent solution of the sodium hydroxide in water 
shall be water-white.
    (c) Assay. The sodium hydroxide content of the caustic soda solution 
shall be determined by the following procedure:

    Accurately weigh 2 grams of liquid caustic soda into a 100 ml 
volumetric flask, dissolve, and dilute to the mark with distilled water 
at room temperature. Transfer a 25 ml aliquot of the solution to a 
titration flask, add 10 ml of 1 percent barium chloride solution, 0.2 ml 
of 1 percent phenolphthalein indicator, and 50 ml of distilled water. 
Titrate with 0.25 N hydrochloric acid to the disappearance of the pink 
color. Not less than 25 ml of the hydrochloric acid shall be required to 
neutralize the sample of diluted 50 percent caustic soda, and not less 
than 36.5 ml of the hydrochloric acid shall be required to neutralize 
the sample of diluted 73 percent caustic soda.
    One ml of 0.25 N hydrochloric acid equals 0.01 gram of sodium 
hydroxide (anhydrous).

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.103  Chloroform.

    (a) Odor. Characteristic odor.
    (b) Specific gravity at 25  deg./25  deg.C. Not less than 1.400.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]

[[Page 487]]



Sec. 21.104  Cinchonidine.

    (a) Melting point. 208 deg. to 210  deg.C.
    (b) Color. White powder.
    (c) Taste. Bitter.
    (d) Test. A solution of cinchonidine in dilute sulfuric acid shall 
not have more than a faint blue fluorescence (to distinguish from 
quinine and quinoidine).

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.105  Citronella oil, natural.

    (a) Java type:
    (1) Alcohol content (as Geraniol). Not less than 85 percent by 
weight.
    (2) Aldehyde content (as Citronellal). Not less than 30 percent by 
weight.
    (3) Refractive index at 20  deg.C. 1.4660 to 1.4745.
    (4) Specific gravity at 25  deg./25  deg.C. 0.875 to 0.893.
    (5) Odor. Characteristic odor.
    (b) Ceylon type:
    (1) Alcohol content (as Geraniol). Not less than 55 percent by 
weight.
    (2) Aldehyde content (as Citronellal). Not less than 7 percent by 
weight.
    (3) Refractive index at 20  deg.C. 1.4790 to 1.4850.
    (4) Specific gravity at 25  deg./25  deg.C. 0.891 to 0.904.
    (5) Odor. Characteristic odor.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.106  Diethyl phthalate.

    (a) Refractive index at 25  deg.C. 1.497 to 1.502.
    (b) Color. Colorless.
    (c) Odor. Practically odorless.
    (d) Solubility. Soluble in 20 parts of 60 percent alcohol.
    (e) Specific gravity at 25  deg./25  deg.C. 1.115 to 1.118.
    (f) Ester content (as diethyl phthalate). Not less than 99 percent 
by weight.

    Note.-- The sample taken for ester determination should be 
approximately 0.8 gram. The number of ml of 0.5 N potassium hydroxide 
used in saponification multiplied by 0.05555 indicates the number of 
grams of ester in the sample taken for assay.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.107  Ethyl acetate.

    (a) 85 percent ester:
    (1) Acidity (as acetic acid). Not more than 0.015 percent by weight.
    (2) Color. Colorless.
    (3) Odor. Characteristic odor.
    (4) Ester content. Not less than 85 percent by weight.
    (5) Specific gravity at 20  deg./20  deg.C. Not less than 0.882.
    (6) Distillation range. (For applicable ASTM method, see 1980 Annual 
Book of ASTM Standards, Part 29, page 70, Standard No. D 302-58 (1975); 
for incorporation by reference, see Sec. 21.6(b).) When 100 ml of ethyl 
acetate are distilled by this method, none shall distill below 70 
deg.C., not more than 10 ml shall distill below 72  deg.C., and none 
above 80  deg.C.
    (b) 100 percent ester:
    (1) Acidity (as acetic acid). Not more than 0.010 percent by weight.
    (2) Color. Colorless.
    (3) Odor. Characteristic odor.
    (4) Ester content. Not less than 99 percent by weight.
    (5) Specific gravity at 20  deg./20  deg.C. Not less than 0.899.
    (6) Distillation range. (For applicable ASTM method, see 1980 Annual 
Book of ASTM Standards, Part 29, page 433, Standard No. D 3127-77; for 
incorporation by reference, see Sec. 21.6(b).) When 100 ml of ethyl 
acetate are distilled by this method, not more than 2 ml shall distill 
below 75  deg.C., and none above 80  deg.C. (760 mm).

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.108  Ethyl ether.

    (a) Odor. Characteristic odor.
    (b) Specific gravity at 15.56  deg./15.56  deg.C. Not more than 
0.728.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.109  Gasoline.

    (a) Distillation range. When 100 ml of gasoline are distilled, none 
shall distill below 90  deg.F. Not more than 5 ml shall be collected 
below 140  deg.F., and not less than 50 ml shall distill below 230 
deg.F.

[[Page 488]]

    (b) Odor. Characteristic odor.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.110  Gasoline, unleaded.

    Conforms to specifications as established by the American Society 
for Testing and Materials (ASTM) in the 1980 Annual Book of ASTM 
Standards, Part 23, page 229, Standard No. D 439-79. Any of the 
``seasonal and geographical'' volatility classes for unleaded gasoline 
are considered suitable as a denaturant. (For incorporation by 
reference, see Sec. 21.6(b).)

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.111  Gentian violet.

    (a) Gentian violet (methyl violet, methylrosaniline chloride) occurs 
as a dark green powder or crystals having metallic luster.
    (b) Arsenic content. Not more than 15 ppm. (as As2 
O3) as determined by the applicable U.S.P. method.
    (c) Identification test. Sprinkle about 1 mg of sample on 1 ml of 
sulfuric acid; it dissolves in the acid with an orange or brown-red 
color. When this solution is diluted cautiously with water, the color 
changes to brown, then to green, and finally to blue.
    (d) Insoluble matter. Not to exceed 0.25 percent when tested by the 
following method:
    Transfer 1.0 gram of sample to a 150 ml beaker containing 50 ml of 
alcohol. Stir to complete solution and filter through a weighed Whatman 
No. 4 filter paper. Wash residue with small amounts of alcohol totaling 
about 50 ml. Dry paper in oven for 30 minutes at 80  deg.C. and weigh. 
Calculate insoluble material.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.112  Heptane.

    (a) Distillation range. No distillate should come over below 200 
deg.F. and none above 211  deg.F.
    (b) Odor. Characteristic odor.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.113  Isopropyl alcohol.

    Specific gravity at 15.56  deg./15.56  deg.C. 0.810 maximum.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.114  Kerosene.

    (a) Distillation range. (For applicable ASTM method, see 1980 Annual 
Book of ASTM Standards, Part 25, page 395, Standard No. D 3699-78 for 
burner fuel; see Part 23, page 849, Standard Nos. D 1655-80a for 
aviation turbine fuels and D 86-78 for distillation of petroleum 
products; for incorporation by reference, see Sec. 21.6(b).) No 
distillate should come over below 340  deg.F. and none above 570  deg.F.
    (b) Flash point. 115  deg.F. minimum.
    (c) Odor. Characteristic odor.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.115  Kerosene (deodorized).

    (a) Distillation range. No distillate should come over below 340 
deg.F. and none above 570  deg.F.
    (b) Flash point. 155  deg.F. minimum.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.116  Methyl alcohol.

    Specific gravity at 15.56  deg./15.56  deg.C. 0.810 maximum.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.117  Methyl isobutyl ketone.

    (a) Acidity (as acetic acid). 0.02 percent by weight, maximum.
    (b) Color. Colorless.
    (c) Distillation range. (For applicable ASTM method, see 1980 Annual 
Book of ASTM Standards, Part 29, page 147, Standard No. D 1153-77; for 
incorporation by reference, see Sec. 21.6(b).) No distillate should come 
over below 111  deg.C. and none above 117  deg.C.
    (d) Odor. Characteristic odor.

[[Page 489]]

    (e) Specific gravity at 20  deg./20  deg.C. 0.799 to 0.804.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.118  Methyl n-butyl ketone.

    (a) Acidity (as acetic acid). 0.02 percent by weight, maximum.
    (b) Color. Colorless.
    (c) Odor. Characteristic odor.
    (d) Refractive index at 20  deg.C. 1.396 to 1.404.
    (e) Specific gravity at 20  deg./20  deg.C. 0.800 to 0.835.
    (f) Distillation range. No distillate should come over below 123 
deg.C. and none above 129  deg.C.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.119  Nicotine solution.

    (a) Composition. Five gallons of an aqueous solution containing 40 
percent nicotine; 3.6 avoirdupois ounces of methylene blue, U.S.P.; 
water sufficient to make 100 gallons.
    (b) Color. One ml of the nicotine solution (previously agitated in 
the presence of air) is measured into 100 ml of water and thoroughly 
mixed. Fifty ml of this colored solution is compared, using Nessler 
tubes, with 50 ml of a standard color solution containing 5 grams of 
CuSO4{5H2 O, C.P. in 100 ml of water. The color 
intensity of the solution tested should be equal to or greater than that 
of the standard solution.
    (c) Nicotine content. The above solution must contain not less than 
1.88 percent of nicotine determined by the following process: 20 ml of 
the solution are measured into a 500 ml Kjeldahl flask provided with a 
suitable bulb tube, 50 ml of 0.1 N NaOH added and the mixture distilled 
in a current of steam until the distillate is no longer alkaline (about 
500 ml). The distillate is then titrated with 0.1 N 
H2SO4 using rosolic acid or methyl red as 
indicator. Not less than 23.2 ml should be required for neutralization.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.120  Nitropropane, mixed isomers of.

    (a) Nitropropane content. A minimum of 94 percent by weight.
    (b) Total nitroparaffin content. A minimum of 99 percent by weight.
    (c) Distillation range. 119 deg. to 113  deg.C.
    (d) Specific gravity at 20 deg./20  deg.C. 0.992 to 1.003.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.121  Phenyl mercuric benzoate.

    (a) Assay (as phenyl mercuric benzoate). Not less than 99.0 percent 
by weight.
    (b) Melting point. Not less than 94  deg.C.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.122  Pyridine bases.

    (a) Alkalinity. One ml of pyridine bases dissolved in 10 ml of water 
is titrated with 1 N H2SO4 until a drop of the 
mixture placed upon Congo paper shows a distinct blue border, which soon 
disappears. A minimum of 9.5 ml of the acid must be required for the end 
point. (Congo paper: filter paper treated with 0.1 percent aqueous 
solution of Congo red and dried.)
    (b) Distillation range. One hundred ml of the denaturant are 
distilled in the following manner: The sample is placed in a short-
necked glass flask of about 200 ml capacity which is rested on an 
asbestos plate having a circular opening of 30 mm in diameter. The neck 
of this flask is fitted with a fractionating tube 12 mm in diameter and 
170 mm long and having a bulb just 1 cm below the side tube which is 
connected with a Liebig condenser having a water jacket not less than 
400 mm in length. A standardized thermometer is placed in the 
fractionating tube so that the mercury bulb is suspended in the center 
of the fractionating bulb. Heat is applied slowly and in such manner 
that 5 ml of distillate is collected per minute in a graduated cylinder. 
At least 50 ml must distill at or below 140  deg.C. and at least 90 ml 
below 160  deg.C.
    (c) Reactions. Dissolve 1 ml of pyridine bases in 100 ml of water.

[[Page 490]]

    (1) Ten ml of this solution are treated with 5 ml of 5 percent 
aqueous solution of anhydrous fused CaCl2 and the mixture 
vigorously shaken. An abundant crystalline separation should occur 
within 10 minutes.
    (2) Ten ml of the pyridine solution mixed with 50 ml of Nessler's 
reagent must give a white precipitate.
    (d) Water content. Twenty ml of pyridine bases are shaken with 20 ml 
of a caustic soda solution having a specific gravity of 1.40 (15.56 
deg./15.56  deg.C.) and the mixture allowed to stand until completely 
separated into two layers. The amount of pyridine base layer should be 
18.5 ml, minimum.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.123  Pyronate.

    Pyronate is a product of the destructive distillation of hardwood 
meeting the following requirements:
    (a) Acidity (as acetic acid). Not more than 0.1 percent by weight, 
determined as follows:
    Add 5.0 ml sample to 100 ml distilled water in an Erlenmeyer flask 
and titrate with 0.1 N NaOH to a bromthymol blue endpoint.
    (b) Color. The color shall be no darker than the color produced by 
2.0 grams of potassium dichromate in 1 liter of water. The comparision 
shall be made in 4-ounce oil sample bottles viewed crosswise.
    (c) Distillation range. When 100 ml are distilled not more than 5 ml 
shall distill below 70  deg.C., not less than 50 ml below 160  deg.C., 
and not less than 90 ml below 205  deg.C.
    Note. Any material submitted as pyronate must agree in color, odor, 
taste and denaturing value with a standard sample furnished by the 
Bureau of Alcohol, Tobacco and Firearms to chemists authorized to 
examine samples of denaturants.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.124  Quassin.

    (a) Quassin is the bitter principle of quassia wood (occurring as a 
mixture of two isomeric forms). It shall be a good commercial grade of 
purified amorphous quassin, standardized as to bitterness.
    (b) Bitterness. An aqueous solution of quassin shall be distinctly 
bitter at a 1 to 250,000 dilution. To test: Dissolve 0.1 gram of quassin 
in 100 ml of 95 percent alcohol, then dilute 4 ml of the solution to 
1,000 ml with distilled water, mix well and taste.
    (c) Identification test. Dissolve about 0.5 gram of quassin in 10 ml 
of 95 percent alcohol and filter. To 5 ml of the filtrate, add 5 ml of 
concentrated hydrochloric acid and 1 mg of phloroglucinol and mix well. 
A red color develops.
    (d) Optical assay. When 1 gram of quassin (in solution in a small 
amount of 95 percent alcohol) is dissolved in 10,000 ml of water, the 
absorbance of the solution in a 1 cm cell at a wavelength of 258 
millimicrons shall not be less than 0.400.
    (e) Solubility. When 0.5 gram of quassin is added to 25 ml of 190 
proof alcohol, it shall dissolve completely.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.125  Rubber hydrocarbon solvent.

    (a) Rubber hydrocarbon solvent is a petroleum derivative.
    (b) Distillation range. When 10 percent of the sample has been 
distilled into a graduated receiver, the themometer shall not read more 
than 170  deg.F. nor less than 90  deg.F. When 90 percent has been 
recovered in the receiver the thermometer shall not read more than 250 
deg.F.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.126  Safrole.

    (a) Congealing point. 10.0 deg. to 11.2  deg.C.
    (b) Refractive index at 20  deg.C. 1.5363 to 1.5385.
    (c) Specific gravity at 15  deg./15  deg.C. 1.100 to 1.107.
    (d) Odor. Characteristic odor.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]

[[Page 491]]



Sec. 21.127  Shellac (refined).

    (a) Arsenic content. Not more than 1.4 parts per million as 
determined by the Gutzeit Method (AOAC method 25.020; for incorporation 
by reference, see Sec. 21.6(c)).
    (b) Color. White or orange.
    (c) Rosin content. None when tested by the following method: Add 20 
ml of absolute alcohol or glacial acetic acid (m. p. 13 deg. to 15 
deg.C.) to 2 grams of the shellac and thoroughly dissolve. Add 100 ml of 
petroleum ether and mix thoroughly. Add approximately 2 liters of water 
and separate a portion of the ether layer (at least 50 ml) and filter if 
cloudy. Evaporate the petroleum ether and test as follows: Solution A--5 
ml of phenol dissolved in 10 ml of carbon tetrachloride. Solution B--1 
ml of bromine dissolved in 4 ml of carbon tetrachloride. To the residue 
obtained above add 2 ml of Solution A and transfer the mixture to a 
porcelain spot plate, filling one cavity. Immediately fill an adjacent 
cavity with solution B. Cover the plate with a watch glass and observe 
any color formation in Solution A. A decided purple or deep indigo blue 
color is an indication of the presence of rosin.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.128  Sodium (metallic).

    (a) Color. Silvery-white (metallic luster) when freshly cut.
    (b) Identification test. Clean a platinum wire by dipping it in 
concentrated hydrochloric acid and holding it over a Bunsen burner until 
the flame is no longer colored. Moisten the wire loop with hydrochloric 
acid and dip it into the sample. Hold the wire in the Bunsen flame and 
note the color. Sodium produces a golden yellow flame; not observed when 
viewed through a cobalt glass.
    (c) Purity. Technical grade or better.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.129  Spearmint oil, terpeneless.

    (a) Carvone content. Not less than 85 percent by weight.
    (b) Refractive index at 20  deg.C. 1.4930 to 1.4980.
    (c) Specific gravity at 25  deg./25  deg.C. 0.949 to 0.956.
    (d) Odor. Characteristic odor.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.130  Spike lavender oil, natural.

    (a) Alcohol content (as borneol). Not less than 30 percent by 
weight.
    (b) Esters (as bornyl acetate). Not less than 1.5 percent by weight.
    (c) Refractive index at 20  deg.C. 1.4630 to 1.4680.
    (d) Specific gravity at 25  deg./25  deg.C. 0.893 to 0.909.
    (e) Odor. Characteristic odor.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.131  Sucrose octaacetate.

    (a) Sucrose octaacetate is an organic acetylation product occurring 
as a white or cream-colored powder having an intensely bitter taste.
    (b) Free acid (as acetic acid). Maximum percentage 0.15 by weight 
when determined by the following procedure: Dissolve 1.0 gram of sample 
in 50 ml of neutralized ethyl alcohol (or S.D.A. No. 3-A, No. 3-C, or 
No. 30) and titrate with 0.1 N sodium hydroxide using phenolphthalein 
indicator.

Percent acid as acetic acid=ml NaOH usedx0.6/ weight of sample

    (c) Insoluble matter. 0.30 percent by weight maximum.
    (d) Melting point. Not less than 78.0  deg.C.
    (e) Purity. Sucrose octaacetate 98 percent minimum by weight when 
determined by the following procedure: Transfer a weighed 1.50 grams 
sample to a 500 ml Erlenmeyer flask containing 100 ml of neutral ethyl 
alcohol (or S.D.A. No. 3-A, No. 3-C, or No. 30) and exactly 50.0 ml of 
0.5 N sodium hydroxide. Reflux for 1 hour on a steam bath, cool and 
titrate the excess sodium hydroxide with 0.5 N sulfuric acid using 
phenolphthalein indicator.


[[Page 492]]


Percent sucrose octaacetate=(ml NaOH-ml 
H2SO4)x4.2412/weight of sample

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.132  Toluene.

    (a) Distillation range. (For applicable ASTM method, see 1980 Annual 
Book of ASTM Standards, Part 29, page 569, Standard No. D 362-75 for 
industrial grade toluene; for incorporation by reference, see 
Sec. 21.6(b).) When 100 ml of toluene are distilled by this method, not 
more than 1 ml should distill below 109  deg.C., and not less than 99 ml 
below 112  deg.C.
    (b) Boiling point. 110.6  deg.1  deg.C.
    (c) Odor. Characteristic odor.
    (d) Specific gravity at 15.56  deg./15.56  deg.C. 0.869 to 0.873.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



Sec. 21.133  Vinegar.

    (a) Vinegar, 90-grain:
    Acidity (as acetic acid). 9.0 percent by weight, minimum.
    (b) Vinegar, 60-grain:
    Acidity (as acetic acid). 6.0 percent by weight, minimum.

[T.D. ATF-133, 48 FR 24673, June 2, 1983. Redesignated by T.D. ATF-442, 
66 FR 12854, Mar. 1, 2001]



 Subpart F--Uses of Specially Denatured Alcohol and Specially Denatured 
                                   Rum



Sec. 21.141  List of products and processes using specially denatured alcohol and rum, and formulas authorized therefor.

    This section lists, alphabetically by product or process, formulas 
of specially denatured alcohol authorized for use in those products or 
processes, and lists the code numbers assigned thereto. Specially 
denatured rum, as well as specially denatured alcohol, may be used in 
tobacco sprays and flavors, Code No. 460, under Formula No. 4.

                 Uses of Specially Denatured Alcohol \1\
------------------------------------------------------------------------
                                    Code
        Product or process           No.        Formulas authorized
------------------------------------------------------------------------
Acetaldehyde.....................     551  1, 2-B, 29.
Acetic acid......................     512  29, 35-A.
Adhesives and binders............     036  1, 3-A, 3-C, 12-A, 23-A, 30.
Aldehydes, miscellaneous.........     552  1, 2-B, 29.
Alkaloids (processing)...........     344  1, 2-B, 2-C, 3-A, 3-C, 12-A,
                                            13-A, 17, 23-A, 30, 32, 35-
                                            A.
Animal feed supplements..........     910  35-A.
Antibiotics (processing).........     343  1, 2-B, 3-A, 3-C, 12-A, 13-A,
                                            23-A, 30, 32, 35-A.
Antifreeze, proprietary..........     760  1.
Antiseptic, bathing solution          220  46.
 (restricted).
Antiseptic solutions, U.S.P. or       244  23-A, 37, 38-B, 38-F.
 N.F.
Bath preparations................     142  1, 3-A, 3-B, 3-C, 23-A, 30,
                                            36, 38-B, 39-B, 39-C, 40, 40-
                                            A, 40-B, 40-C.
Bay rum..........................     112  23-A, 37, 38-B, 39, 39-B, 39-
                                            D, 40, 40-A, 40-B, 40-C.
Biocides, miscellaneous..........     410  1, 3-A, 3-B, 3-C, 23-A, 23-H,
                                            27-A, 27-B, 30, 37, 38-B, 39-
                                            B, 40, 40-A, 40-B, 40-C.
Blood and blood products              345  1, 3-A, 3-C, 12-A, 13-A, 23-
 (processing).                              A, 30.
Brake fluids.....................     720  1, 3-A, 3-C.
Candy glazes.....................     015  13-A, 23-A, 35, 35-A, 45.
Cellulose coatings...............     011  1, 3-A, 3-C, 23-A, 30.
Cellulose compounds (dehydration)     311  1, 2-B, 3-A, 3-C, 32.
Cellulose intermediates..........     034  1, 3-A, 3-C, 13-A, 19, 23-A,
                                            32.
Chemicals (miscellaneous)........     579  1, 2-B, 2-C, 3-A, 3-C, 6-B,
                                            12-A, 13-A, 17, 20, 29, 30,
                                            32, 36.
Cleaning solutions...............     450  1, 3-A, 3-C, 23-A, 23-H, 30,
                                            36, 39-B, 40, 40-A, 40-B, 40-
                                            C.
Coatings, miscellaneous..........     016  1, 3-A, 3-C, 23-A.
Collodions, industrial...........     034  1, 3-A, 3-C, 13-A, 19, 23-A,
                                            32.
Collodion, U.S.P.................     241  13-A, 19, 32.
Colognes.........................     122  38-B, 39, 39-A, 39-B, 39-C,
                                            40, 40-A, 40-B, 40-C.
Crude drugs (processing).........     341  1, 2-B, 3-A, 3-C, 23-A, 30.
Cutting oils.....................     730  1, 3-A, 3-C.
Dehydration products,                 315  1, 2-B, 3-A, 3-C.
 miscellaneous.
Dentifrices......................     131  31-A, 37, 38-B, 38-C, 38-D.
Deodorants (body)................     114  23-A, 38-B, 39-B, 39-C, 40,
                                            40-A, 40-B, 40-C.
Detergents, household............     450  1, 3-A, 3-C, 23-A, 23-H, 30,
                                            36, 39-B, 40, 40-A, 40-B, 40-
                                            C.
Detergents, industrial...........     440  1, 3-A, 3-C, 23-A, 30.
Detonators.......................     574  1, 6-B.
Disinfectants....................     410  1, 3-A, 3-B, 3-C, 23-A, 23-H,
                                            27-A, 27-B, 30, 37, 38-B, 39-
                                            B, 40, 40-A, 40-B, 40-C.

[[Page 493]]

 
Drugs and medicinal chemicals....     575  1, 2-B, 2-C, 3-A, 3-C, 6-B,
                                            12-A, 13-A, 17, 29, 30, 32.
Drugs, miscellaneous (processing)     349  1, 2-B, 3-A, 3-C, 13-A, 23-A,
                                            30, 35-A, 38-B.
Duplicating fluids...............     485  1, 3-A, 3-C, 30.
Dyes and intermediates...........     540  1, 2-B, 2-C, 3-A, 3-C, 12-A,
                                            29, 36.
Dyes and intermediates                351  1, 2-B, 3-A, 3-C, 12-A.
 (processing).
Dye solutions, miscellaneous.....     482  1, 3-A, 3-C, 23-A, 30.
Embalming fluids, etc............     420  1, 3-A, 3-C, 22, 23-A.
Esters, ethyl (miscellaneous)....     523  1, 2-B, 2-C, 6-B, 12-A, 13-A,
                                            29, 32, 35-A.
Ether, ethyl.....................     561  1, 2-B, 13-A, 29, 32.
Ethers, miscellaneous............     562  1, 2-B, 13-A, 29, 32.
Ethyl acetate....................     521  1, 2-B, 29, 35-A.
Ethylamines......................     530  1, 2-B, 2-C, 3-A, 3-C, 12-A,
                                            29, 36.
Ethyl chloride...................     522  1, 2-B, 29, 32.
Ethylene dibromide...............     571  1, 2-B, 29, 32.
Ethylene gas.....................     572  1, 2-B, 29, 32.
Explosives.......................     033  1, 2-B, 3-A, 3-C.
External pharmaceuticals, not         210  23-A, 23-F, 23-H, 27, 27-A,
 U.S.P. or N.F.                             27-B, 33, 36, 37, 38-B, 38-
                                            F, 39-B, 40, 40-A, 40-B, 40-
                                            C.
External pharmaceuticals,             249  23-A, 25, 25-A, 33, 38-B, 40-
 miscellaneous, U.S.P. or N.F.              B.
Fluid uses, miscellaneous........     750  1, 3-A, 3-C, 23-A, 30.
Food products, miscellaneous          332  1, 2-B, 3-A, 3-C, 13-A, 23-A,
 (processing).                              30, 32, 35-A.
Fuel uses, miscellaneous.........     630  1, 3-A, 3-C, 28-A.
Fuels, airplane and supplementary     612  1, 3-A, 3-C, 28-A.
Fuels, automobile and                 611  1, 3-A, 3-C, 28-A.
 supplementary.
Fuels, proprietary heating.......     620  1, 3-A, 3-C, 28-A.
Fuels, rocket and jet............     613  1, 3-A, 3-C, 28-A.
Fungicides.......................     410  1, 3-A, 3-B, 3-C, 23-A, 23-H,
                                            27-A, 27-B, 30, 37, 38-B, 39-
                                            B, 40, 40-A, 40-B, 40-C.
Glandular products (processing)..     342  1, 2-B, 3-A, 3-C, 12-A, 13-A,
                                            23-A, 30, 32, 35-A.
Hair and scalp preparations......     111  3-B, 23-A, 23-F, 23-H, 37, 38-
                                            B, 39, 39-A, 39-B, 39-C, 39-
                                            D, 40, 40-A, 40-B, 40-C.
Hormones (processing)............     342  1, 2-B, 3-A, 3-C, 12-A, 13-A,
                                            23-A, 30, 32, 35-A.
Incense..........................     470  3-A, 3-C, 22, 37, 38-B, 39-B,
                                            39-C, 40, 40-A, 40-B, 40-C.
Inks.............................     052  1, 3-A, 3-C, 13-A, 23-A, 30,
                                            32, 33.
Insecticides.....................     410  1, 3-A, 3-B, 3-C, 23-A, 23-H,
                                            27-A, 27-B, 30, 37, 38-B, 39-
                                            B, 40, 40-A, 40-B, 40-C.
Iodine solutions (including           230  25, 25-A.
 U.S.P. and N.F. tinctures).
Laboratory reagents (for sale)...     811  3-A, 3-C, 30.
Laboratory uses, general (own use     810  3-A, 3-C, 30.
 only).
Lacquer thinners.................     042  1, 23-A.
Liniments, U.S.P. or N.F.........     243  27, 27-B, 38-B.
Lotions and creams (body, face,       113  23-A, 23-H, 31-A, 37, 38-B,
 and hand).                                 39, 39-B, 39-C, 40, 40-A, 40-
                                            B, 40-C.
Medicinal chemicals (processing).     344  1, 2-B, 2-C, 3-A, 3-C, 12-A,
                                            13-A, 17, 23-A, 30, 32, 35-
                                            A.
Miscellaneous chemicals               358  1, 2-B, 2-C, 3-A, 3-C, 12-A,
 (processing).                              13-A, 17, 23-A, 30, 35-A.
Miscellaneous products                359  1, 2-B, 2-C, 3-A, 3-C, 12-A,
 (processing).                              13-A, 17, 23-A, 30, 35-A.
Mouth washes.....................     132  37, 38-B, 38-C, 38-D, 38-F.
Organo-silicone products.........     576  2-B, 3-A, 3-C, 30.
Pectin (processing)..............     331  1, 2-B, 3-A, 3-C, 13-A, 23-A,
                                            30, 35-A.
Perfume materials (processing)...     352  1, 2-B, 3-A, 3-C, 12-A, 13-A,
                                            30.
Perfumes and perfume tinctures...     121  38-B, 39, 39-B, 39-C, 40, 40-
                                            A, 40-B, 40-C.
Petroleum products...............     320  1, 2-B, 3-A, 3-C.
Photoengraving dyes and solutions     481  1, 3-A, 3-C, 13-A, 30, 32.
Photographic chemicals                353  1, 2-B, 3-A, 3-C, 13-A, 30.
 (processing).
Photographic film and emulsions..     031  1, 2-B, 3-A, 3-C, 13-A, 19,
                                            30, 32.
Pill and tablet manufacture......     349  1, 2-B, 3-A, 3-C, 13-A, 23-A,
                                            30, 35-A, 38-B.
Plastics, cellulose..............     021  1, 2-B, 3-A, 3-C, 12-A, 13-A,
                                            30.
Plastics, non-cellulose               022  1, 2-B, 3-A, 3-C, 12-A, 13-A,
 (including resins).                        30.
Polishes.........................     051  1, 3-A, 3-C, 30.
Preserving solutions.............     430  1, 3-A, 3-C, 12-A, 13-A, 22,
                                            23-A, 30, 32, 37, 38-B, 42,
                                            44.
Product development and pilot         812  All formulas.
 plant (own use only).
Proprietary solvents.............     041  1, 3-A.
Refrigerating uses...............     740  1, 3-A, 3-C, 23-A, 30.
Resin coatings, natural..........     014  1, 23-A.
Resin coatings, synthetic........     012  1, 3-A, 3-C, 23-A, 30.
Resins, synthetic................     590  3-A, 3-C, 29, 30, 35-A.
Room deodorants..................     470  3-A, 3-C, 22, 37, 38-B, 39-B,
                                            39-C, 40, 40-A, 40-B, 40-C.
Rosin (processing)...............     354  1, 3-A, 3-C, 12-A.
Rotogravure dyes and solutions...     481  1, 3-A, 3-C, 13-A, 30, 32.
Rubber (latex) (processing)......     355  1, 3-A, 3-C.
Rubber, synthetic................     580  29, 32.
Rubbing alcohol..................     220  23-H.
Scientific instruments...........     710  1, 3-A, 3-C.

[[Page 494]]

 
Shampoos.........................     141  1, 3-A, 3-B, 3-C, 23-A, 27-B,
                                            31-A, 36, 38-B, 39-A, 39-B,
                                            40, 40-A, 40-B, 40-C.
Shellac coatings.................     013  1, 23-A.
Soaps, industrial................     440  1, 3-A, 3-C, 23-A, 30.
Soaps, toilet....................     142  1, 3-A, 3-C, 23-A, 30, 36, 38-
                                            B, 39-B, 39-C, 40, 40-A, 40-
                                            B, 40-C.
Sodium ethylate, anhydrous            524  2-B.
 (restricted).
Sodium hydrosulfite (dehydration)     312  1, 2-B, 3-A, 3-C.
Soldering flux...................     035  1, 3-A, 3-C, 23-A, 30.
Solutions, miscellaneous.........     485  1, 3-A, 3-C, 23-A, 30, 40-C.
Solvents and thinners (other than     042  1, 23-A, 30.
 proprietary solvents or special
 industrial solvents).
Solvents, special (restricted         043  1, 3-A, 3-C.
 sale).
Stains (wood)....................     053  1, 3-A, 3-C, 23-A, 30.
Sterilizing solutions............     430  1, 3-A, 3-C, 12-A, 13-A, 22,
                                            23-A, 30, 32, 37, 38-B, 42,
                                            44.
Theater sprays...................     470  3-A, 3-C, 22, 37, 38-B, 39-B,
                                            39-C, 40, 40-A, 40-B, 40-C.
Tobacco sprays and flavors.......     460  4.
Toilet waters....................     122  38-B, 39, 39-A, 39-B, 39-C,
                                            40, 40-A, 40-B, 40-C.
Transparent sheetings............     032  1, 2-B, 3-A, 3-C, 13-A, 23-A.
Unclassified uses \2\............     900  1, 3-A, 3-C.
Vaccine (processing).............     343  1, 2-B, 3-A, 3-C, 12-A, 13-A,
                                            23-A, 30, 32, 35-A.
Vinegar..........................     511  18, 29, 35-A.
Vitamins (processing)............     342  1, 2-B, 3-A, 3-C, 12-A, 13-A,
                                            23-A, 30, 32, 35-A.
Xanthates........................     573  1, 2-B, 29.
Yeast (processing)...............     342  1, 2-B, 3-A, 3-C, 12-A, 13-A,
                                            23-A, 30, 32, 35-A.
------------------------------------------------------------------------
\1\ Other products or processes may be authorized under Sec.  21.31(c).
\2\ Persons desiring other formulas for this use should indicate the
  fact in the space provided for this purpose on ATF Form 5150.19.


[T.D. ATF-133, 48 FR 24673, June 2, 1983, as amended by T.D. ATF-199, 50 
FR 9183, Mar. 6, 1985; T.D. ATF-435, 66 FR 5475, Jan. 19, 2001; T.D. 
ATF-442, 66 FR 11854, Mar. 1, 2001]



         Subpart G--Denaturants Authorized for Denatured Spirits



Sec. 21.151  List of denaturants authorized for denatured spirits.

    Following is an alphabetical listing of denaturants authorized for 
use in denatured spirits:

    Denaturants Authorized for Completely Denatured Alcohol (C.D.A),
    Specially Denatured Alcohol (S.D.A.), and Specially Denatured Rum
                                (S.D.R.)
 
 
 
Acetaldehyde.........................  S.D.A. 29.
Acetone, U.S.P.......................  S.D.A. 23-A, 23-H.
Acetaldol............................  C.D.A. 18.
Almond oil, bitter, N.F.X............  S.D.A. 38-B.
Alpha Terpineol......................  S.D.A. 38-B.
Ammonia, aqueous.....................  S.D.A. 36.
Ammonia solution, strong, N.F........  S.D.A. 36.
Anethole, N.F........................  S.D.A. 38-B.
Anise oil, N.F.......................  S.D.A. 38-B.
Bay oil (myrcia oil), N.F.XI.........  S.D.A. 23-F, 38-B, 39-D.
Benzaldehyde, N.F....................  S.D.A. 38-B.
Benzene..............................  S.D.A. 2-B, 2-C, 12-A.
Bergamot oil, N.F.XI.................  S.D.A. 23-F. 38-B.
Bone oil (Dipple's oil)..............  S.D.A. 17.
Boric acid, N.F......................  S.D.A. 38-F.
Brucine alkaloid.....................  S.D.A. 40.
Brucine sulfate, N.F.IX..............  S.D.A. 40.
n-Butyl alcohol......................  S.D.A. 44.
tert-Butyl alcohol...................  S.D.A. 39, 39-A, 39-B, 40, 40-A,
                                        40-B, 40-C.
Camphor, U.S.P.......................  S.D.A. 27, 27-A, 38-B.
Caustic soda, liquid.................  S.D.A. 36.
Cedar leaf oil, U.S.P.XIII...........  S.D.A. 38-B.
Chloroform...........................  S.D.A. 20.
Chlorothymol, N.F.XII................  S.D.A. 38-B, 38-F.
Cinchonidine.........................  S.D.A. 39-A.
Cinchonidine sulfate, N.F.IX.........  S.D.A. 39-A.
Cinnamic aldehyde (cinnamaldehyde),    S.D.A. 38-B.
 N.F.IX.
Cinnamon oil, N.F....................  S.D.A. 38-B.
Citronella oil, natural..............  S.D.A. 38-B.
Clove oil, N.F.......................  S.D.A. 27-A, 38-B.
Coal tar, U.S.P......................  S.D.A. 38-B.
Denatonium benzoate, N.F.............  S.D.A. 1, 40-B.
Diethyl phthalate....................  S.D.A. 39-B, 39-C.
Ethyl acetate........................  S.D.A. 29, 35, 35-A.
Ethyl ether..........................  S.D.A. 13-A, 19, 32.
Eucalyptol, N.F.XII..................  S.D.A. 37, 38-B.
Eucalyptus oil, N.F..................  S.D.A. 38-B.
Eugenol, U.S.P.......................  S.D.A. 38-B.
Formaldehyde solution, U.S.P.........  S.D.A. 22, 38-C, 38-D.
Gasoline.............................  C.D.A. 18, 19; S.D.A. 28-A.
Gasoline, unleaded...................  C.D.A. 18, 19, 20; S.D.A 28-A.
Gentian violet.......................  S.D.A. 33.
Gentian violet, U.S.P................  S.D.A. 33.
Glycerin (Glycerol), U.S.P...........  S.D.A. 31-A.
Green soap, U.S.P....................  S.D.A. 27-B.
Guaiacol, N.F.X......................  S.D.A. 38-B.

[[Page 495]]

 
Heptane..............................  C.D.A. 18, 19; S.D.A. 2-B, 28-A.
Hydrochloric acid, N.F...............  S.D.A. 38-F.
Iodine, U.S.P........................  S.D.A. 25, 25-A.
Isopropyl alcohol....................  S.D.A. 3-C.
Kerosene.............................  C.D.A. 18, 19, 20.
Kerosene (deodorized)................  C.D.A. 18, 19, 20.
Lavender oil, N.F....................  S.D.A. 27-B, 38-B.
Menthol, U.S.P.......................  S.D.A. 37, 38-B, 38-C, 38-D, 38-
                                        F.
Mercuric iodide, red, N.F.XI.........  S.D.A. 42.
Methyl alcohol.......................  S.D.A. 1, 3-A, 30.
Methylene blue, U.S.P................  S.D.A. 4; S.D.R. 4.
Methyl isobutyl ketone...............  C.D.A. 18, 19; S.D.A. 1, 23-H.
Methyl n-butyl ketone................  C.D.A. 18, 19; S.D.A. 1.
Methyl salicylate, N.F...............  S.D.A. 38-B, 46.
Mustard oil, volatile (allyl           S.D.A. 38-B.
 isothiocyanate), U.S.P.XII.
Nicotine solution....................  S.D.A. 4; S.D.R. 4.
Nitropropane, mixed isomers of.......  C.D.A. 18, 19; S.D.A. 1.
Peppermint oil, N.F..................  S.D.A. 38-B.
Phenol, U.S.P........................  S.D.A. 38-B, 46.
Phenyl mercuric benzoate.............  S.D.A. 42.
Phenyl mercuric chloride, N.F.IX.....  S.D.A. 42.
Phenyl mercuric nitrate, N.F.........  S.D.A. 42.
Phenyl salicylate (salol), N.F.XI....  S.D.A. 38-B.
Pine needle oil, dwarf, N.F..........  S.D.A. 38-B.
Pine oil, N.F........................  S.D.A. 38-B.
Pine tar, U.S.P......................  S.D.A. 3-B.
Polysorbate 80, N.F..................  S.D.A. 38-F.
Potassium iodide, U.S.P..............  S.D.A. 25, 25-A, 42.
Pyridine bases.......................  S.D.A. 6-B.
Pyronate.............................  C.D.A. 18.
Quassia, fluid extract, N.F.VII......  S.D.A. 39.
Quassin..............................  S.D.A. 40.
Quinine, N.F.X.......................  S.D.A. 39-A.
Quinine bisulfate, N.F.XI............  S.D.A. 39-A, 39-D.
Quinine dihydrochloride, N.F.XI......  S.D.A. 39-A.
Quinine sulfate, U.S.P...............  S.D.A. 39-D.
Resorcinol (Resorcin), U.S.P.........  S.D.A. 23-F.
Rosemary oil, N.F. XII...............  S.D.A. 27, 38-B.
Rubber hydrocarbon solvent...........  C.D.A. 18, 19, 20; S.D.A. 2-B, 2-
                                        C, 28-A.
Safrole..............................  S.D.A. 38-B.
Salicylic acid, U.S.P................  S.D.A. 23-F, 39.
Sassafras oil, N.F.XI................  S.D.A. 38-B.
Shellac (refined)....................  S.D.A. 45.
Soap, hard, N.F.XI...................  S.D.A. 31-A.
Sodium iodide, U.S.P.................  S.D.A. 25, 25-A.
Sodium, metallic.....................  S.D.A. 2-C.
Sodium salicylate, U.S.P.............  S.D.A. 39, 39-D.
Spearmint oil, N.F...................  S.D.A. 38-B.
Spearmint oil, terpeneless...........  S.D.A. 38-B.
Spike lavender oil, natural..........  S.D.A. 38-B.
Storax, U.S.P........................  S.D.A. 38-B.
Sucrose octaacetate..................  S.D.A. 40-A.
Thimerosal, U.S.P....................  S.D.A. 42.
Thyme oil, N.F.XII...................  S.D.A. 38-B.
Thymol, N.F..........................  S.D.A. 37, 38-B, 38-F.
Tolu balsam, U.S.P...................  S.D.A. 38-B.
Toluene..............................  S.D.A. 2-B, 2-C, 12-A.
Turpentine oil, N.F.XI...............  S.D.A. 38-B.
Vinegar..............................  S.D.A. 18.
Zinc chloride, U.S.P.................  S.D.A. 38-F.
 


[T.D. ATF-133, 48 FR 24673, June 2, 1983, as amended by T.D. ATF-442, 66 
FR 12854, Mar. 1, 2001]



Subpart H--Weights and Specific Gravities of Specially Denatured Alcohol



Sec. 21.161  Weights and specific gravities of specially denatured alcohol.

    The weight of one gallon of each formula of specially denatured 
alcohol at 15.56  deg.C. (60  deg.F.) is as listed in this section. The 
specific gravity of each formula of specially denatured alcohol at 15.56 
 deg.C./15.56  deg.C. (60  deg.F./60  deg.F.) in air is as listed in 
this section. (Weight of 1 gallon of water at 15.56  deg.C. (60  deg.F.) 
is 8.32823 pounds in air.)

                        Weights and Specific Gravities of Specially Denatured Alcohol \1\
 [Slight deviations from this table may occur due to variations in specific gravities of authorized denaturants.
      Values for 190 proof determined experimentally in air. Other values calculated from these gravities.]
----------------------------------------------------------------------------------------------------------------
                                                 190 proof               192 proof               200 proof
                               Finished  -----------------------------------------------------------------------
     S.D.A. Formula No.         formula    Wt./gal.                Wt./gal.                Wt./gal.
                                (gals)      in air    Sp. gr. in    in air    Sp. gr. in    in air    Sp. gr. in
                                             (lbs)        air        (lbs)        air        (lbs)        air
----------------------------------------------------------------------------------------------------------------
1...........................      104.0        6.788      0.8151       6.756      0.8112      6.611       0.7938
2-B.........................      100.5        6.795       .8159       6.762       .8119      6.612        .7939
2-C.........................       99.5   ..........  ..........  ..........  ..........      6.959        .8356
3-A.........................      105.0        6.787       .8149       6.755       .8111      6.611        .7938
3-B.........................      101.0        6.810       .8177       6.777       .8137      6.627        .7957
3-C.........................      105.0        6.784       .8146       6.752       .8107      6.608        .7935
4...........................      100.8        6.823       .8193       6.791       .8154      6.640        .7973
6-B.........................      100.5        6.801       .8166       6.768       .8127      6.618        .7947
12-A........................      105.0        6.820       .8189       6.789       .8152      6.645        .7979
13-A........................      109.7        6.740       .8093       6.710       .8057      6.572        .7891
17..........................      100.05       6.795       .8159       6.762       .8119      6.611        .7938
18..........................      195.4        7.802       .9368       7.785       .9348      7.708        .9255

[[Page 496]]

 
19..........................      197.9        6.468       .7766       6.452       .7747      6.375        .7655
20..........................      104.9        7.062       .8480       7.030       .8441      6.886        .8268
22..........................      109.5        7.037       .8450       7.007       .8414      6.868        .8247
23-A........................      107.9        6.788       .8151       6.758       .8115      6.619        .7948
23-F........................      101.5        6.808       .8175       6.776       .8136      6.627        .7957
23-H........................      109.45       6.785       .8147       6.755       .8111      6.617        .7945
25..........................      100.9        7.080       .8501       7.047       .8462      6.897        .8282
25 2........................      100.9        7.083       .8505       7.050       .8465      6.900        .8285
25-A........................      102.5        7.119       .8548       7.087       .8510      6.939        .8332
25-A 2......................      102.5        7.117       .8546       7.085       .8507      6.938        .8331
27..........................      104.7        6.846       .8220       6.814       .8182      6.670        .8009
27-A........................      105.2        6.867       .8245       6.835       .8207      6.692        .8035
27-B........................      112.0        7.027       .8438       6.998       .8403      6.862        .8239
28-A........................      101.0        6.786       .8148       6.753       .8109      6.603        .7929
29..........................      100.76       6.808       .8175       6.775       .8135      6.624        .7954
30..........................      110.0        6.785       .8147       6.755       .8111      6.617        .7945
31-A........................      111.5        7.167       .8606       7.138       .8571      7.002        .8408
32..........................      104.8        6.769       .8128       6.737       .8089      6.593        .7916
33..........................      102.9        6.893       .8277       6.861       .8238      6.714        .8062
35 3........................      135.0        6.956       .8352       6.933       .8325      6.820        .8189
35 4........................      129.75       6.963       .8361       6.937       .8330      6.820        .8189
35-A 3......................      105.0        6.817       .8185       6.785       .8147      6.641        .7974
35-A 4......................      104.25       6.826       .8196       6.794       .8158      6.649        .7984
36..........................      102.7        6.837       .8209       6.804       .8170      6.657        .7993
37..........................      100.9        6.794       .8158       6.762       .8119      6.612        .7939
38-B........................      101.3        6.804       .8170       6.772       .8131      6.622        .7951
38-C........................      102.6        6.832       .8203       6.800       .8165      6.652        .7987
38-D........................      102.7        6.863       .8241       6.830       .8201      6.682        .8023
38-F........................      100.9        6.828       .8199       6.796       .8160      6.646        .7980
39..........................      102.0        6.867       .8245       6.834       .8206      6.686        .8028
39-A........................      100.5        6.810       .8177       6.777       .8137      6.627        .7957
39-B........................      102.7        6.857       .8233       6.825       .8195      6.677        .8017
39-C........................      101.0        6.819       .8188       6.792       .8155      6.642        .7975
39-D........................      101.3        6.819       .8188       6.787       .8149      6.637        .7969
40..........................      100.1        6.795       .8159       6.762       .8119      6.611        .7938
40-A........................      100.2        6.798       .8163       6.765       .8123      6.613        .7941
40-B........................      100.1        6.794       .8158       6.761       .8118      6.610        .7937
40-C........................      103.0        6.788       .8151       6.756       .8112      6.609        .7936
42..........................      100.0        6.797       .8161       6.764       .8122      6.613        .7941
44..........................      110.0        6.790       .8153       6.760       .8117      6.622        .7951
45..........................      129.8        7.545       .9060       7.520       .9030      7.403        .8889
46..........................      100.1        6.805       .8171       6.772       .8131      6.621        .7950
----------------------------------------------------------------------------------------------------------------
1 Where alternate denaturants are permitted, the above weights are based on the first denaturant or combination
  listed in the formula.
2 With sodium iodide.
3 Calculated on the basis of 85 percent ethyl acetate.
4 Calculated on the basis of 100 percent ethyl acetate.



*COM001*PART 22--DISTRIBUTION AND USE OF TAX-FREE ALCOHOL--Table of Contents




                            Subpart A--Scope

Sec.
22.1  General.
22.2  Territorial extent.
22.3  Related regulations.

                         Subpart B--Definitions

22.11  Meaning of terms.

                  Subpart C--Administrative Provisions

                               Authorities

22.20  Delegations of the Director.
22.21  Forms prescribed.
22.22  Alternate methods or procedures; and emergency variations from 
          requirements.
22.23  Allowance of claims.
22.24  Permits.
22.25  Right of entry and examination.
22.26  Detention of containers.

[[Page 497]]

                            Liability for Tax

22.31  Persons liable for tax.

                     Destruction of Marks and Brands

22.33  Time of destruction of marks and brands.

                          Document Requirements

22.35  Execution under penalties of perjury.
22.36  Filing of qualifying documents.

                Subpart Ca--Special (Occupational) Taxes

22.37  Liability for special tax.
22.38  Special tax returns.
22.38a  Employer identification number.

                           Special Tax Stamps

22.39  Issuance, distribution, and examination of special tax stamps.
22.40  Changes in special tax stamps.

                        Subpart D--Qualification

                  Application for Permit, Form 5150.22

22.41  Application for industrial alcohol user permit.
22.42  Data for application, Form 5150.22.
22.43  Exceptions to application requirements.
22.44  Disapproval of application.
22.45  Organizational documents.

              Industrial Alcohol User Permit, ATF F 5150.9

22.48  Conditions of permits.
22.49  Duration of permits.
22.50  Correction of permits.
22.51  Suspension or revocation of permits.
22.52  Rules of practice in permit proceedings.
22.53  Powers of attorney.
22.54  Photocopying of permits.
22.55  Posting of permits.

                  Changes After Original Qualification

22.57  Changes affecting applications and permits.
22.58  Automatic termination of permits.
22.59  Adoption of documents by a fiduciary.
22.60  Continuing partnerships.
22.61  Change in name of permittee.
22.62  Change in trade name.
22.63  Change in location.
22.64  Return of permits.

                           Registry of Stills

22.66  Registry of stills.

           Permanent Discontinuance of Use of Tax-Free Alcohol

22.68  Notice of permanent discontinuance.

Subpart E [Reserved]

                    Subpart F--Premises and Equipment

22.91  Premises.
22.92  Storage facilities.
22.93  Equipment for recovery and restoration of tax-free alcohol.

                   Subpart G--Use of Tax-Free Alcohol

22.101  Authorized uses.
22.102  Prohibited uses.
22.103  States and the District of Columbia.
22.104  Educational organizations, colleges of learning, and scientific 
          universities.
22.105  Hospitals, blood banks, and sanitariums.
22.106  Clinics.
22.107  Pathological laboratories.
22.108  Other laboratories.

          Subpart H--Withdrawal and Receipt of Tax-Free Alcohol

22.111  Withdrawals under permit.
22.112  Regulation of withdrawals.
22.113  Receipt of tax-free alcohol.
22.114  Alcohol received from the General Services Administration.

                            Subpart I--Losses

22.121  Liability and responsibility of carriers.
22.122  Losses in transit.
22.123  Losses on premises.
22.124  Incomplete shipments.
22.125  Claims.

                 Subpart J--Recovery of Tax-Free Alcohol

22.131  General.
22.132  Deposit in storage tanks.
22.133  Shipment for redistillation.
22.134  Records of shipment.

                         Subpart K--Destruction

22.141  General.
22.142  Destruction.

    Subpart L--Return, Reconsignment and Disposition of Tax-Free or 
                            Recovered Alcohol

22.151  Return.
22.152  Reconsignment in transit.
22.153  Disposition after revocation of permit.
22.154  Disposition on permanent discontinuance of use.
22.155  Emergency disposition to another permittee.

                   Subpart M--Records of Transactions

22.161  Records.
22.162  Inventories.
22.163  Time for making entries.

[[Page 498]]

22.164  Filing and retention of records.
22.165  Photographic copies of records.

 Subpart N--Use of Tax-Free Spirits by the United States or Government 
                                 Agency

22.171  General.
22.172  Application and permit, Form 5150.33.
22.173  Procurement of tax-free spirits.
22.174  Receipt of shipment.
22.175  Discontinuance of use.
22.176  Disposition of excess spirits.

    Authority: 26 U.S.C. 5001, 5121, 5142, 5143, 5146, 5206, 5214, 5271-
5276, 5311, 5552, 5555, 6056, 6061, 6065, 6109, 6151, 6806, 7011, 7805; 
31 U.S.C. 9304, 9306.

    Source: T.D. ATF-199, 50 FR 9183, Mar. 6, 1985, unless otherwise 
noted.

    Editorial Note: Nomenclature changes to part 22 appear by T.D. ATF-
435, 66 FR 5476, Jan. 19, 2001 and by T.D. ATF-463 and T.D. ATF-462, 66 
FR 42733, 42736, Aug. 15, 2001.



                            Subpart A--Scope



Sec. 22.1  General.

    The regulations in this part relate to tax-free alcohol and cover 
the procurement, storage, use, and recovery of tax-free alcohol.



Sec. 22.2  Territorial extent.

    This part applies to the several States of the United States and the 
District of Columbia.



Sec. 22.3  Related regulations.

    Regulations related to this part are listed below:

27 CFR Part 19--Distilled Spirits Plants.
27 CFR Part 26--Liquors and Articles from Puerto Rico and the Virgin 
Islands.
27 CFR Part 29--Stills and Miscellaneous Regulations.
27 CFR Part 30--Gauging Manual.
27 CFR Part 71--Rules of Practice in Permit Proceedings.
27 CFR Part 251--Importation of Distilled Spirits, Wines and Beer.
31 CFR Part 225--Acceptance of Bonds, Notes, or Other Obligations Issued 
or Guaranteed by the United States as Security in Lieu of Surety or 
Sureties on Penal Bonds.

[T.D. ATF-199, 50 FR 9183, Mar. 6, 1985, as amended by T.D. ATF-207, 50 
FR 23682, June 5, 1985; T.D. ATF-459, 66 FR 38550, July 25, 2001]



                         Subpart B--Definitions



Sec. 22.11  Meaning of terms.

    When used in this part and in forms prescribed under this part, the 
following terms have the meanings given in this section. Words in the 
plural form include the singular, and vice versa, and words importing 
the masculine gender include the feminine. The terms ``includes'' and 
``including'' do not exclude things not enumerated which are in the same 
general class.
    Alcohol. Spirits having a proof of 190 deg. or more when withdrawn 
from bond, including all subsequent dilutions and mixtures thereof, from 
whatever source or by whatever process produced.
    Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this part by ATF Order 
1130.9, Delegation Order--Delegation of the Director's Authorities in 27 
CFR Parts 20, 21 and 22.
    CFR. The Code of Federal Regulations.
    Clinic. When used in this part the term includes veterinary clinics.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC.
    Executed under penalties of perjury. Signed with the prescribed 
declaration under the penalties of perjury as provided on or with 
respect to the claim, form, or other document or, where no form of 
declaration is prescribed, with the declaration ``I declare under the 
penalities of perjury that this ---------- (insert type of document, 
such as statement, report, certificate, application, claim, or other 
document), including the documents submitted in support thereof, has 
been examined by me and, to the best of my knowledge and belief, is 
true, correct, and complete.''
    Fiduciary. A guardian, trustee, executor, administrator, receiver, 
conservator, or any person acting in any fiduciary capacity for any 
person.
    Gallon or wine gallon. The liquid measure equivalent to the volume 
of 231 cubic inches.

[[Page 499]]

    Hospital. When used in this part the term includes veterinary 
hospitals.
    Initial order. The first order of tax-free alcohol placed by a 
permittee or Governmental agency with a distilled spirits plant or 
vendor, and, the first order placed following the issuance of an amended 
or corrected permit.
    Liter or litre. A metric unit of capacity equal to 1,000 cubic 
centimeters of alcohol, and equivalent to 33.814 fluid ounces. A liter 
is divided into 1,000 milliliters (ml). The symbol for milliliter or 
milliliters is ``ml''.
    Permit. The document issued under 26 U.S.C. 5271(a), authorizing a 
person to withdraw tax-free alcohol from the premises of a distilled 
spirits plant and use such alcohol under specified conditions.
    Permittee. Any person holding a permit, on Form 5150.9, issued under 
this part to withdraw and use tax-free alcohol.
    Person. An individual, trust, estate, partnership, association, 
company, or corporation.
    Proof. The ethyl alcohol content of a liquid at 60 deg. Fahrenheit, 
stated as twice the percent of ethyl alcohol by volume.
    Proof gallon. A gallon at 60 deg. Fahrenheit which contains 50 
percent of volume of ethyl alcohol having a specific gravity of 0.7939 
at 60 deg. Fahrenheit referred to water at 60 deg. Fahrenheit as unity, 
or the alcoholic equivalent thereof.
    Restoration. Restoring to the original state of recovered tax-free 
alcohol, including redistillation of the recovered alcohol to 190 deg. 
or more of proof and the removal of foreign materials by redistillation, 
filtration, or other suitable means.
    Secretary. The Secretary of the Treasury or his delegate.
    Spirits or distilled spirits. The substance known as ethyl alcohol, 
ethanol, or spirits of wine, having a proof of 190 deg. or more when 
withdrawn from bond, including all subsequent dilutions and mixtures 
thereof, from whatever source or by whatever process produced.
    This chapter. Title 27, Code of Federal Regulations, Chapter I (27 
CFR Chapter I).
    U.S.C. The United States Code.

[T.D. ATF-199, 50 FR 9183, Mar. 6, 1985, as amended by T.D. ATF-435, 66 
FR 5475, Jan. 19, 2001]



                  Subpart C--Administrative Provisions

                               Authorities



Sec. 22.20  Delegations of the Director.

    All of the regulatory authorities of the Director contained in this 
Part 22 are delegated to appropriate ATF officers. These ATF officers 
are specified in ATF Order 1130.9, Delegation Order--Delegation of the 
Director's Authorities in 27 CFR Parts 20, 21 and 22. ATF delegation 
orders, such as ATF Order 1130.9, are available to any interested person 
by mailing a request to the ATF Distribution Center, PO Box 5950, 
Springfield, Virginia 22150-5950, or by accessing the ATF web site 
((http://www.atf.treas.gov/).

[T.D. ATF-435, 66 FR 5476, Jan. 19, 2001]



Sec. 22.21  Forms prescribed.

    (a) The appropriate ATF officer is authorized to prescribe all forms 
required by this part, including applications, notices, claims, reports, 
and records. All of the information called for in each form shall be 
furnished as indicated by the headings on the form and the instructions 
on or pertaining to the form. In addition, information called for in 
each form shall be furnished as required by this part. The form will be 
filed in accordance with the instructions for the form.
    (b) Forms may be requested from the ATF Distribution Center, P.O. 
Box 5950, Springfield, Virginia 22150-5950, or by accessing the ATF web 
site (http://www.atf.treas.gov/).

[T.D. ATF-199, 50 FR 9183, Mar. 6, 1985, as amended by T.D. ATF-249, 52 
FR 5961, Feb. 27, 1987; T.D. 372, 61 FR 20724, May 8, 1996; T.D. ATF-
435, 66 FR 5476, Jan. 19, 2001; T.D. ATF-443, 66 FR 13015, Mar. 2, 2001]



Sec. 22.22  Alternate methods or procedures; and emergency variations from requirements.

    (a) Alternate methods or procedures--(1) Application. A permittee, 
after receiving approval from the appropriate ATF

[[Page 500]]

officer, may use an alternate method or procedure (including alternate 
construction or equipment) in lieu of a method or procedure prescribed 
by this part. A permittee wishing to use an alternate method or 
procedure may apply to the appropriate ATF officer. The permittee shall 
describe the proposed alternate method or procedure and shall set forth 
the reasons for its use.
    (2) Approval by appropriate ATF officer. The appropriate ATF officer 
may approve the use of an alternate method or procedure if:
    (i) The applicant shows good cause for its use;
    (ii) It is consistent with the purpose and effect of the procedure 
prescribed by this part, and provides equal security to the revenue;
    (iii) It is not contrary to law; and
    (iv) It will not cause an increase in cost to the Government and 
will not hinder the effective administration of this part.
    (3) Exceptions. The appropriate ATF officer will not authorize an 
alternate method or procedure relating to the giving of a bond.
    (4) Conditions of approval. A permittee may not employ an alternate 
method or procedure until the appropriate ATF officer has approved its 
use. The permittee shall, during the terms of the authorization of an 
alternate method or procedure, comply with the terms of the approved 
application.
    (b) Emergency variations from requirements--(1) Application. When an 
emergency exists, a permittee may apply to the appropriate ATF officer 
for a variation from the requirements of this part relating to 
construction, equipment, and methods of operation. The permittee shall 
describe the proposed variation and set forth the reasons for using it.
    (2) Approval by appropriate ATF officer. The appropriate ATF officer 
may approve an emergency variation from requirements if:
    (i) An emergency exists;
    (ii) The variation from the requirements is necessary;
    (iii) It will afford the same security and protection to the revenue 
as intended by the specific regulations;
    (iv) It will not hinder the effective administration of this part; 
and
    (v) It is not contrary to law.
    (3) Conditions of approval. A permittee may not employ an emergency 
variation from the requirements until the appropriate ATF officer has 
approved its use. Approval of variations from requirements are 
conditioned upon compliance with the conditions and limitations set 
forth in the approval.
    (4) Automatic termination of approval. If the permittee fails to 
comply in good faith with the procedures, conditions or limitations set 
forth in the approval, authority for the variation from requirements is 
automatically terminated and the permittee is required to comply with 
prescribed requirements of regulations from which those variations were 
authorized.
    (c) Withdrawal of approval. The appropriate ATF officer may withdraw 
approval for an alternate method or procedure or an emergency variation 
from requirements, approved under paragraph (a) or (b) of this section, 
if the appropriate ATF officer finds that the revenue is jeopardized or 
the effective administration of this part is hindered by the approval.

(Approved by the Office of Management and Budget under control number 
1512-0335)

(Act of August 16, 1954, Chapter 736, 68A Stat. 917 (26 U.S.C. 7805); 
sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 U.S.C. 5552))

[T.D. ATF-199, 50 FR 9183, Mar. 6, 1985, as amended by T.D. ATF-435, 66 
FR 5476, Jan. 19, 2001]



Sec. 22.23  Allowance of claims.

    The appropriate ATF officer is authorized to allow claims for losses 
of tax-free alcohol.



Sec. 22.24  Permits.

    (a) The appropriate ATF officer shall issue permits on Form 5150.33 
covering the withdrawal of tax-free alcohol by the United States or a 
Governmental agency as provided in Sec. 22.172.
    (b) The appropriate ATF officer shall issue the permit to withdraw 
and use tax-free alcohol, Form 5150.9 required under this part.

[[Page 501]]



Sec. 22.25  Right of entry and examination.

    An appropriate ATF officer may enter, during business hours or at 
any time operations are being conducted, any premises on which 
operations governed by this part are conducted to inspect the records 
required by this part to be kept on those premises. An appropriate ATF 
officer may also inspect and take samples of tax-free alcohol to which 
those records relate.

[T.D. ATF-199, 50 FR 9183, Mar. 6, 1985. Redesignated by T.D. ATF-443, 
66 FR 13015, Mar. 2, 2001]



Sec. 22.26  Detention of containers.

    (a) Summary detention. An appropriate ATF officer may detain any 
container containing, or supposed to contain, alcohol when the 
appropriate ATF officer believes the alcohol was withdrawn, sold, 
transported, or used in violation of law of this part. The appropriate 
ATF officer shall hold the container at a safe place until it is 
determined if the detained property is liable by law to forfeiture.
    (b) Limitations. Summary detention may not exceed 72 hours without 
process of law or intervention of the appropriate ATF officer. The 
person possessing the container immediately before its detention may 
prepare a waiver of the 72 hours limitation to have the container kept 
on its premises during detention.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1375, as amended (26 U.S.C. 5311))

[T.D. ATF-199, 50 FR 9183, Mar. 6, 1985. Redesignated by T.D. ATF-443, 
66 FR 13015, Mar. 2, 2001]

                            Liability for Tax



Sec. 22.31  Persons liable for tax.

    All tax-free alcohol removed, sold, transported, or used in 
violation of law or regulations in this part, is subject to all 
provisions of law relating to taxable alcohol, including the requirement 
for payment of tax on the alcohol. The person removing, selling, 
transporting, or using tax-free alcohol in violation of law or 
regulations pertaining to tax-free alcohol shall be required to pay the 
distilled spirits tax on the alcohol.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended (26 U.S.C. 5001))

                     Destruction of Marks and Brands



Sec. 22.33  Time of destruction of marks and brands.

    (a) Any person who empties a package containing tax-free alcohol 
shall immediately destroy or obliterate the marks, brand, and labels 
required by this chapter to be placed on packages of tax-free alcohol.
    (b) A person may not destroy or obliterate the marks, brands or 
labels until the package or drum has been emptied.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5206))

                          Document Requirements



Sec. 22.35  Execution under penalties of perjury.

    (a) When any form or document prescribed by this part is required to 
be executed under penalties of perjury, the permittee or other 
authorized person shall:
    (1) Insert the declaration ``I declare under the penalties of 
perjury that I have examined this ----------(insert the type of document 
such as claim, application, statement, report, certificate), including 
all supporting documents, and to the best of my knowledge and belief, it 
is true, correct, and complete''; and
    (2) Sign the document.
    (b) When the required document already bears a perjury declaration, 
the permittee or other authorized person shall sign the document.

(Act of August 16, 1954, 68A Stat. 745 (26 U.S.C. 6056))



Sec. 22.36  Filing of qualifying documents.

    All documents returned to a permittee or other person as evidence of 
compliance with requirements of this part, or as authorization, shall 
except as otherwise provided, be kept readily available for inspection 
by an appropriate ATF officer during business hours.

[[Page 502]]



                Subpart Ca--Special (Occupational) Taxes

    Source: T.D. ATF-271, 53 FR 17545, May 17, 1988, unless otherwise 
noted.



Sec. 22.37  Liability for special tax.

    (a) Tax-free alcohol permittee. Except as otherwise provided in this 
section, every person who is required to hold a permit under 26 U.S.C. 
5271 to procure, use, sell, and/or recover alcohol free of tax for 
nonbeverage purposes shall pay a special (occupational) tax at the rate 
of $250 per year. A separate tax shall be paid for each tax-free alcohol 
permit which the permittee holds, and permits issued under this part 
shall not be valid unless special tax is paid. The tax shall be paid on 
or before the date of commencing the business of a tax-free alcohol 
permittee, and thereafter every year on or before July 1. On commencing 
business, the tax shall be computed from the first day of the month in 
which liability is incurred, through the following June 30. Thereafter, 
the tax shall be computed for the entire year (July 1 through June 30).
    (b) Transition rule. For purposes of paragraph (a) of this section, 
a permittee engaged in nonbeverage tax-free distilled spirits operations 
on January 1, 1988, shall be treated as having commenced business on 
that date. The special tax imposed by this transition rule shall cover 
the period January 1, 1988, through June 30, 1988, and shall be paid on 
or before April 1, 1988.
    (c) Each place of business taxable. Special (occupational) tax 
liability is incurred at each place of business for which a permit under 
subpart D of this part to procure, use, and/or recover distilled spirits 
free of tax has been issued. A place of business means the entire 
office, plant or area of the business in any one location under the same 
proprietorship. Passageways, streets, highways, rail crossings, 
waterways, or partitions dividing the premises are not sufficient 
separation to require additional special tax, if the divisions of the 
premises are otherwise contiguous.
    (d) Exception for United States. Agencies and instrumentalities of 
the United States are not required to pay special tax under this 
subpart.
    (e) Exception for certain educational institutions. (1) On and after 
July 1, 1989, a scientific university, college of learning, or 
institution of scientific research as specified in Sec. 22.104, which 
holds a permit to procure and use distilled spirits free of tax under 
this part, is not required to pay special tax under this subpart if--
    (i) The university, college, or institution procures less than 25 
gallons of tax free spirits per calendar year; and
    (ii) Such spirits are procured for use exclusively for experimental 
or research use and not for consumption (other than organoleptic tests) 
or sale.
    (2) A scientific university, college of learning, or institution of 
scientific research, which holds a permit under this part, and which 
does not operate as described in paragraphs (e)(1) (i) and (ii) of this 
section during any calendar year, shall pay special tax as provided in 
paragraph (a) of this section for the special tax year (July 1 through 
June 30) commencing during that calendar year.

(26 U.S.C. 5143, 5276)

[T.D. ATF-271, 53 FR 17545, May 17, 1988, as amended by T.D. ATF-285, 53 
FR 12610, Mar. 28, 1989; T.D. ATF-337, 58 FR 19061, Apr. 12, 1993]



Sec. 22.38  Special tax returns.

    (a) General. Special tax shall be paid by return. The prescribed 
return is ATF Form 5630.5, Special Tax Registration and Return. Special 
tax returns, with payment of tax, shall be filed with ATF in accordance 
with instructions on the form.
    (b) Preparation of ATF Form 5630.5. All of the information called 
for on Form 5630.5 shall be provided, including:
    (1) The true name of the taxpayer.
    (2) The trade name(s) (if any) of the business(es) subject to 
special tax.
    (3) The employer identification number (see Sec. 22.38a).
    (4) The exact location of the place of business, by name and number 
of building or street, of if these do not exist, by some description in 
addition to the post office address. In the case of one return for two 
or more locations, the address to be shown shall be the taxpayer's 
principal place of business (or principal office, in the case of a 
corporate taxpayer).

[[Page 503]]

    (5) The class(es) of special tax to which the taxpayer is subject.
    (6) Ownership and control information: That is, the name, position, 
and residence address of every owner of the business and of every person 
having power to control its management and policies with respect to the 
activity subject to special tax. ``Owner of the business'' shall include 
every partner, if the taxpayer is a partnership, and every person owning 
10% or more of its stock, if the taxpayer is a corporation. However, the 
ownership and control information required by this paragraph need not be 
stated if the same information has been previously provided to ATF in 
connection with a permit application, and if the information previously 
provided is still current.
    (c) Multiple locations and/or classes of tax. A taxpayer subject to 
special tax for the same period at more than one location or for more 
than one class of tax shall--
    (1) File one special tax return, ATF Form 5630.5, with payment of 
tax, to cover all such locations and classes of tax; and
    (2) Prepare, in duplicate, a list identified with the taxpayer's 
name, address (as shown on ATF Form 5630.5), employer identification 
number, and period covered by the return. The list shall show, by 
States, the name, address, and tax class of each location for which 
special tax is being paid. The original of the list shall be filed with 
ATF in accordance with instructions on the return, and the copy shall be 
retained at the taxpayer's principal place of business (or principal 
office, in the case of corporate taxpayer) for the period specified on 
Sec. 22.164.
    (d) Signing of ATF Forms 5630.5--(1) Ordinary returns. The return of 
an individual proprietor shall be signed by the individual. The return 
of a partnership shall be signed by a general partner. The return of a 
corporation shall be signed by any officer. In each case, the person 
signing the return shall designate his or her capacity as ``individual 
owner,'' ``member of firm,'' or, in the case of a corporation, the title 
of the officer.
    (2) Fiduciaries. Receivers, trustees, assignees, executors, 
administrators, and other legal representatives who continue the 
business of a bankrupt, insolvent, deceased person, etc., shall indicate 
the fiduciary capacity in which they act.
    (3) Agent or attorney in fact. If a return is signed by an agent or 
attorney in fact, the signature shall be preceded by the name of the 
principal and followed by the title of the agent or attorney in fact. A 
return signed by a person as agent will not be accepted unless there is 
filed, with the ATF office with which the return is required to be 
filed, a power of attorney authorizing the agent to perform the act.
    (4) Perjury statement. ATF Forms 5630.5 shall contain or be verified 
by a written declaration that the return has been executed under the 
penalties of perjury.

(26 U.S.C. 5142, 6061, 6065, 6151, 7100)



Sec. 22.38a  Employer identification number.

    (a) Requirement. The employer identification number (defined in 26 
CFR 301.7701-12) of the taxpayer who has been assigned such a number 
shall be shown on each special tax return, including amended returns, 
filed under this subpart. Failure of the taxpayer to include the 
employer identification number may result in the imposition of the 
penalty specified in Sec. 70.105 of this chapter.
    (b) Application for employer identification number. Each taxpayer 
who files a special tax return, who has not already been assigned an 
employer identification number, shall file IRS Form SS-4 to apply for 
one. The taxpayer shall apply for and be assigned only one employer 
identification number, regardless of the number of places of business 
for which the taxpayer is required to file a special tax return. The 
employer identification number shall be applied for no later than 7 days 
after the filing of the taxpayer's first special tax return. IRS Form 
SS-4 may be obtained from the director of an IRS service center or from 
any IRS district director.
    (c) Preparation and filing of IRS Form SS-4. The taxpayer shall 
prepare and file IRS Form SS-4, together with any

[[Page 504]]

supplementary statement, in accordance with the instructions on the form 
or issued in respect to it.

(26 U.S.C. 6109)

                           Special Tax Stamps



Sec. 22.39  Issuance, distribution, and examination of special tax stamps.

    (a) Issuance of special tax stamps. Upon filing a properly executed 
return on ATF Form 5630.5 together with the full remittance, the 
taxpayer will be issued an appropriately designated special tax stamp. 
If the return covers multiple locations, the taxpayer will be issued one 
appropriately designated stamp for each location listed on the 
attachment required by Sec. 22.38(c), but showing, as to name and 
address, only the name of the taxpayer and the address of the taxpayer's 
principal place of business (or principal office in the case of a 
corporate taxpayer).
    (b) Distribution of special tax stamps for multiple locations. On 
receipt of the special tax stamps, the taxpayer shall verify that there 
is one stamp for each location listed on the attachment to ATF Form 
5630.5. The taxpayer shall designate one stamp for each location and 
type on each stamp the address of the business conducted at the location 
for which that stamp is designated. The taxpayer shall then forward each 
stamp to the place of business designated on the stamp.
    (c) Examination of special tax stamps. All stamps denoting payment 
of special tax shall be kept available for inspection by appropriate ATF 
officers, at the location for which designated, during business hours.

(26 U.S.C. 5143, 5146, 6806)



Sec. 22.40  Changes in special tax stamps.

    (a) Change in name. If there is a change in the corporate or firm 
name, or in the trade name, as shown on ATF Form 5630.5, the permittee 
shall file an amended special tax return, as soon as practicable after 
the change, covering the new corporate or firm name, or trade names. No 
new special tax is required to be paid. The permittee shall attach the 
special tax stamp for endorsement of the change in name.
    (b) Change in proprietorship--(1) General. If there is a change in 
the proprietorship of a tax-free alcohol operation, the successor shall 
pay a new special tax and obtain the required special tax stamps.
    (2) Exemption for certain successors. Persons having the right of 
succession provided for in paragraph (c) of this section may carry on 
the business for the remainder of the period for which the special tax 
was paid, without paying a new special tax, if within 30 days after the 
date on which the successor begins to carry on the business, the 
successor files a special tax return on ATF Form 5630.5 with ATF, which 
shows the basis of succession. A person who is a successor to a business 
for which special tax has been paid and who fails to register the 
succession is liable for special tax computed from the first day of the 
calendar month in which he or she began to carry on the business.
    (c) Persons having right of succession. Under the conditions 
indicated in paragraph (b)(2) of this section, the right of succession 
will pass to certain persons in the following cases:
    (1) Death. The widowed spouse or child, or executor, administrator, 
or other legal representative of the taxpayer;
    (2) Succession of spouse. A husband or wife succeeding to the 
business of his or her spouse (living);
    (3) Insolvency. A receiver or trustee in bankruptcy, or an assignee 
for benefit of creditors;
    (4) Withdrawal from firm. The partner or partners remaining after 
death or withdrawal of a member.
    (d) Change in location. If there is a change in location of a 
taxable place of business, the permittee shall, within 30 days after the 
change, file with ATF an amended special tax return covering the new 
location. The permittee shall attach the special tax stamp or stamps, 
for endorsement of the change in location. No new special tax is 
required to be paid. However, if the permittee does not file the amended 
return within 30 days, he or she is required to pay a new special tax 
and obtain a new special tax stamp.

(26 U.S.C. 5143, 7011)

[[Page 505]]



                        Subpart D--Qualification

                  Application for Permit, Form 5150.22



Sec. 22.41  Application for industrial alcohol user permit.

    (a) Users. Each person desiring to withdraw and use tax-free alcohol 
shall, before commencing business, file an application on Form 5150.22 
for, and obtain a permit, Form 5150.9, except permittees who were 
previously qualified to withdraw and use tax-free alcohol on the 
effective date of this regulation.
    (b) Filing. All applications and necessary supporting documents, as 
required by this subpart, shall be filed with the appropriate ATF 
officer. All data, written statements, affidavits, and other documents 
submitted in support of the application are considered a part of the 
application.
    (1) Applications filed as provided in this section, shall be 
accompanied by evidence establishing the authority of the officer or 
other person to execute the application.
    (2) A State, political subdivision thereof, or the District of 
Columbia, may specify in the application that it desires a single permit 
authorizing the withdrawal and use of tax-free alcohol in a number of 
institutions under its control. In this instance, the application, Form 
5150.22, or an attachment, shall clearly show the method of distributing 
and accounting for the tax-free alcohol to be withdrawn.



Sec. 22.42  Data for application, Form 5150.22.

    (a) Unless waived under Sec. 22.43, each application on Form 5150.22 
shall include as applicable, the following information:
    (1) Serial number and purpose for which filed.
    (2) Name and principal business address.
    (3) Based on the bona fide requirements of the applicant, the 
estimated quantity of tax-free alcohol in proof gallons, which will be 
procured during a 12-month period (one calendar year).
    (4) Location, or locations where tax-free alcohol is to be used, if 
different from the business address.
    (5) Statement showing the specific manner in which, or purposes for 
which, tax-free alcohol will be withdrawn and used.
    (6) Statement that tax-free alcohol will be stored in accordance 
with the requirements of this part.
    (7) Statement as to the type of business organization and of the 
persons interested in the business, supported by the items of 
information listed in Sec. 22.45.
    (8) Listing of the principal equipment for the recovery and 
restoration of alcohol (including the serial number, kind, capacity, 
name and address of manufacturer, and name and address of owner if 
different from applicant).
    (9) List of any trade name(s) under which the applicant will conduct 
operations, and the offices where these names are registered.
    (10) Listing of the titles of offices, the incumbents of which are 
responsible for the tax-free alcohol activities of the business and are 
authorized by the articles of incorporation, the bylaws, or the board of 
directors to act and sign on behalf of the applicant.
    (11) Other information and statements as the appropriate ATF officer 
may require to establish that the applicant is entitled to the permit. 
In the case of a corporation or other legal entity the appropriate ATF 
officer may require information which establishes that the officers, 
directors and principal stockholders whose names are required to be 
furnished under Sec. 22.45 (a)(2) and (c) have not violated or conspired 
to violate any law of the United States relating to intoxicating liquor 
or have been convicted of any offense under Title 26, U.S.C., punishable 
as a felony or of any conspiracy to commit such offense.
    (b) If any of the information required by paragraphs (a)(4) through 
(a)(10) of this section is on file with any appropriate ATF officer, the 
applicant may incorporate this information by reference by stating that 
the information is made a part of the application.



Sec. 22.43  Exceptions to application requirements.

    (a) The appropriate ATF officer may waive detailed application and 
supporting data requirements, other than

[[Page 506]]

the requirements of paragraphs (a)(1) through (a)(6) of Sec. 22.42, and 
of paragraph (a)(8) of that section as it relates to recovery, in the 
case of--
    (1) All applications, Form 5150.22 filed by States or political 
subdivisions thereof or the District of Columbia, and
    (2) Applications, Form 5150.22, filed by applicants, where the 
appropriate ATF officer has determined that the waiver of such 
requirements does not pose any jeopardy to the revenue or a hindrance of 
the effective administration of this part.
    (b) The waiver provided for in this section will terminate for a 
permittee, other than States or political subdivisions thereof or the 
District of Columbia, when the permittee files an application to amend 
the permit and the appropriate ATF officer determines that the 
conditions justifying the waiver no longer exist. In this case, the 
permittee will furnish the information in respect to the previously 
waived items, as provided in Sec. 22.57(a)(2).

[T.D. ATF-199, 50 FR 9183, Mar. 6, 1985, as amended by T.D. ATF-443, 66 
FR 13015, Mar. 2, 2001]



Sec. 22.44  Disapproval of application.

    The appropriate ATF officer may, in accordance with part 71 of this 
chapter, disapprove an application for a permit to withdraw and use tax-
free alcohol, if on examination of the application (or inquiry), the 
appropriate ATF officer has reason to believe that:
    (a) The applicant is not authorized by law and regulations to 
withdraw and use alcohol free of tax;
    (b) The applicant (including, in the case of a corporation, any 
officer, director, or principal stockholder, and, in the case of a 
partnership, a partner) is, by reason of their business experience, 
financial standing, or trade connections, not likely to maintain 
operations in compliance with 26 U.S.C. Chapter 51, or regulations 
issued under this part;
    (c) The applicant has failed to disclose any material information 
required, or has made any false statement as to any material fact, in 
connection with their application; or
    (d) The premises at which the applicant proposes to conduct the 
business are not adequate to protect the revenue.



Sec. 22.45  Organizational documents.

    The supporting information required by Sec. 22.42(a)(7) includes, as 
applicable:
    (a) Corporate documents. (1) Certified true copy of the certificate 
of incorporation, or certified true copy of certificate authorizing the 
corporation to operate in the State where the premises are located (if 
other than that in which incorporated).
    (2) Certified list of names and addresses of officers and directors, 
along with a statement designating which corporate officers, if 
applicable, are directly responsible for the tax-free alcohol activities 
of the business.
    (3) Statement showing the number of shares of each class of stock or 
other evidence of ownership, authorized and outstanding, the par value 
thereof, and the voting rights of the respective owners or holders.
    (b) Articles of partnership. True copy of the articles of 
partnership or association, if any, or certificate of partnership or 
association where required to be filed by any State, county, or 
municipality.
    (c) Statement of interest. (1) Names and addresses of persons owning 
10% or more of each of the classes of stock in the corporation, or legal 
entity, and the nature and amount of the stockholding or other interest 
of each, whether such interest appears in the name of the interested 
party or in the name of another for him or her. If a corporation is 
wholly owned or controlled by another corporation, persons owning 10% or 
more of each of the classes of stock of the parent corporation are 
considered to be the persons interested in the business of the 
subsidiary, and the names and addresses of such persons must be 
submitted to the appropriate ATF officer if specifically requested.
    (2) In the case of an individual owner or partnership, name and 
address of every person interested in the business, whether such 
interest appears in the name of the interested party or in the

[[Page 507]]

name of another for the interested person.

[T.D. ATF-199, 50 FR 9183, Mar. 6, 1985, as amended by T.D. ATF-435, 66 
FR 5476, Jan. 19, 2001]

              Industrial Alcohol User Permit, ATF F 5150.9



Sec. 22.48  Conditions of permits.

    Permits to withdraw and use tax-free alcohol will designate the acts 
which are permitted, and include any limitations imposed on the 
performance of these acts. All of the provisions of this part relating 
to the use or recovery of tax-free alcohol are considered to be included 
in the provisions and conditions of the permit, the same as if set out 
in the permit.



Sec. 22.49  Duration of permits.

    Permits to withdraw and use tax-free alcohol are continuing unless 
automatically terminated by the terms thereof, suspended or revoked as 
provided in Sec. 22.51, or voluntarily surrendered. The provisions of 
Sec. 22.58 are considered part of the terms and conditions of all 
permits.



Sec. 22.50  Correction of permits.

    If an error on a permit is discovered, the permittee shall 
immediately return the permit to the appropriate ATF officer for 
correction.



Sec. 22.51  Suspension or revocation of permits.

    The appropriate ATF officer may institute proceedings under part 71 
of this chapter to suspend or revoke a permit whenever there is reason 
to believe that the permittee--
    (a) Has not in good faith complied with the provisions of 26 U.S.C. 
Chapter 51, or regulations issued under that chapter;
    (b) Has violated the conditions of that permit;
    (c) Has made any false statements as to any material fact in the 
application for the permit;
    (d) Has failed to disclose any material information required to be 
furnished;
    (e) Has violated or conspired to violate any law of the United 
States relating to intoxicating liquor or has been convicted of an 
offense under Title 26, U.S.C., punishable as a felony or of any 
conspiracy to commit such offense;
    (f) Is, by reason of its operations, no longer warranted in 
procuring and using tax-free alcohol authorized by the permit; or
    (g) Has not engaged in any of the operations authorized by the 
permit for a period exceeding two years.



Sec. 22.52  Rules of practice in permit proceedings.

    The regulations of part 71 of this chapter apply to the procedure 
and practice in connection with the disapproval of any application for a 
permit and in connection with suspension or revocation of a permit.



Sec. 22.53  Powers of attorney.

    An applicant or permittee shall execute and file a Form 1534, in 
accordance with the instructions on the form, for each person authorized 
to sign or to act in its behalf. Form 1534 is not required for persons 
whose authority is furnished in accordance with Sec. 22.42(a)(10).



Sec. 22.54  Photocopying of permits.

    A permittee may make photocopies of its permit exclusively for the 
purpose of furnishing proof of authorization to withdraw tax-free 
alcohol from a distilled spirits plant.



Sec. 22.55  Posting of permits.

    Permits issued under this part will be kept posted and available for 
inspection on the permit premises.

                  Changes After Original Qualification



Sec. 22.57  Changes affecting applications and permits.

    (a) General--(1) Changes affecting application. When there is a 
change relating to any of the information contained in, or considered a 
part of the application on Form 5150.22 for a permit, the permittee 
shall, within 30 days (except as otherwise provided in this subpart) 
file a written notice with the appropriate ATF officer to amend the 
application.
    (2) Changes affecting waivers. When any waiver under Sec. 22.43 is 
terminated

[[Page 508]]

by a change to the application, the permittee shall include the current 
information as to the item previously waived with the written notice 
required in paragraph (a)(1) of this section.
    (3) Changes affecting permit. When the terms of a permit are 
affected by a change, the written notice required by paragraph (a)(1) of 
this section (except as otherwise provided in this subpart) will serve 
as an application to amend the permit.
    (4) Form of notice. All written notices to amend an application on 
Form 5150.22 will--
    (i) Identify the permittee;
    (ii) Contain the permit identification number;
    (iii) Explain the nature of the change and contain any required 
supporting documents;
    (iv) Identify the serial number of the applicable application, Form 
5150.22; and
    (v) Be consecutively numbered and signed by the permittee or any 
person authorized to sign on behalf of the permittee.
    (b) Amended application. The appropriate ATF officer may require a 
permittee to file an amended application on Form 5150.22 when the number 
of changes to the previous application are determined to be excessive, 
or when a permittee has not timely filed the written notice prescribed 
in paragraph (a)(1) of this section. If items on the amended application 
remain unchanged, they will be marked ``No change since Form 5150.22, 
Serial No. ----------.''
    (c) Changes in officers, directors and stockholders--(1) Officers. 
In the case of a change in the officers listed under the provisions of 
Sec. 22.45(a)(2), the notice required by paragraph (a)(1) of this 
section shall only apply (unless otherwise required, in writing, by the 
appropriate ATF officer) to those offices, the incumbents of which are 
responsible for the operations covered by the permit.
    (2) Directors. In the case of a change in the directors listed under 
the provisions of Sec. 22.45(a)(2), the notice required by paragraph 
(a)(1) of this section shall reflect the changes.
    (3) Stockholders. In lieu of reporting all changes, within 30 days, 
to the list of stockholders furnished under the provisions of 
Sec. 22.45(c)(1), a permittee may, upon filing written notice to the 
appropriate ATF officer and establishing a reporting date, file an 
annual notice of changes. The notice of changes in stockholders does not 
apply if the sale or transfer of capital stock results in a change in 
ownership or control which is required to be reported under Sec. 22.58.

(Approved by the Office of Management and Budget under control number 
1512-0335)

[T.D. ATF-199, 50 FR 9183, Mar. 6, 1985; 50 FR 20099, May 14, 1985]



Sec. 22.58  Automatic termination of permits.

    (a) Permit not transferable. Permits issued under this part are not 
transferable. In the event of the lease, sale, or other transfer of such 
a permit, or of the operations authorized by the permit, the permit 
shall, except as provided for in this section, automatically terminate.
    (b) Corporations. (1) If actual or legal control of any corporation 
holding a permit issued under this part changes, directly or indirectly, 
whether by reason of a change in stock ownership or control (in the 
permittee corporation or any other corporation), by operation of law, or 
in any other manner, the permittee shall within 10 days of the change, 
give written notice to the appropriate ATF officer. The written notice 
shall be accompanied by (or within 30 days of the change) an application 
and supporting documents on Form 5150.22 for a new permit. If an 
application on Form 5150.22 for a new permit is not filed within 30 days 
of the change, the outstanding permit will automatically terminate.
    (2) If an application on Form 5150.22 for a new permit is filed 
within the 30-day period prescribed in paragraph (b)(1) of this section, 
the outstanding permit will remain in effect until final action is taken 
on the application. When final action is taken, the outstanding permit 
will automatically terminate and the permittee shall forward it to the 
appropriate ATF officer for cancellation.
    (c) Proprietorships. In the event of a change in proprietorship of a 
business

[[Page 509]]

of a permittee (as for instance, by reason of incorporation, the 
withdrawal or taking in of additional partners, or succession by any 
person who is not a fiduciary), the successor shall file written notice 
and make application on Form 5150.22 for a new permit under the same 
conditions provided for in paragraph (b) of this section.

(Approved by the Office of Management and Budget under control number 
1512-0335)



Sec. 22.59  Adoption of documents by a fiduciary.

    If the business covered by a permit issued under this part, is to be 
operated by a fiduciary, the fiduciary may, in lieu of qualifying as a 
new proprietor, file a written notice, and any necessary supporting 
documents, to amend the predecessor's permit. The effective date of the 
qualifying documents filed by a fiduciary shall coincide with the 
effective date of the court order or the date specified therein for the 
fiduciary to assume control. If the fiduciary was not appointed by the 
court, the date the fiduciary assumed control shall coincide with the 
effective date of the filing of the qualifying documents.

[T.D. ATF-199, 50 FR 9183, Mar. 6, 1985, as amended by T.D. ATF-443, 66 
FR 13015, Mar. 2, 2001]



Sec. 22.60  Continuing partnerships.

    (a) Continuing partnerships. If, under the laws of a particular 
State, a partnership is not terminated on death or insolvency of a 
partner, but continues until final settlement of the partnership affairs 
is completed, and the surviving partner has the exclusive right to the 
control and possession of the partnership assets for the purpose of 
liquidation and settlement, the surviving partner may continue to 
withdraw and use tax-free alcohol under the prior qualifications of the 
partnership.
    (b) Requalification. If a surviving partner acquires the business on 
completion of the settlement of the partnership, that partner shall 
qualify as a new proprietor, from the date of acquisition, under the 
same conditions and limitations prescribed in Sec. 22.58(b).
    (c) More than one partner. The rule set forth in this section also 
applies if there is more than one surviving partner.

[T.D. ATF-199, 50 FR 9183, Mar. 6, 1985, as amended by T.D. ATF-443, 66 
FR 13015, Mar. 2, 2001]



Sec. 22.61  Change in name of permittee.

    When the only change is a change in the individual, firm, or 
corporation name, a permittee may not conduct operations under the new 
name until a written notice, accompanied by necessary supporting 
documents, to amend the application and permit has been filed and an 
amended permit has been issued by the appropriate ATF officer.

(Approved by the Office of Management and Budget under control number 
1512-0335)

[T.D. ATF-199, 50 FR 9183, Mar. 6, 1985; 50 FR 20099, May 14, 1985]



Sec. 22.62  Change in trade name.

    Where there is to be a change in, or addition of, a trade name, the 
permittee may not conduct operations under the new trade name until a 
written notice has been filed and an amended permit has been issued by 
the appropriate ATF officer.

(Approved by the Office of Management and Budget under control number 
1512-0335)

[T.D. ATF-199, 50 FR 9183, Mar. 6, 1985, as amended by T.D. ATF-443, 66 
FR 13015, Mar. 2, 2001]



Sec. 22.63  Change in location.

    When there is to be a change in location, a permittee may not 
conduct operations at the new location until a written notice, 
accompanied by necessary supporting information, to amend the 
application and permit has been filed and an amended permit has been 
issued by the appropriate ATF officer.

(Approved by the Office of Management and Budget under control number 
1512-0335)

[T.D. ATF-199, 50 FR 9183, Mar. 6, 1985, as amended by T.D. ATF-435, 66 
FR 5476, Jan. 19, 2001; T.D. ATF-443, 66 FR 13015, Mar. 2, 2001]



Sec. 22.64  Return of permits.

    Following the termination, surrender or revocation of a permit, or 
the issuance of a new or amended permit, caused by a change, the 
permittee shall

[[Page 510]]

    (a) Obtain and destroy all photocopies of the previous permit from 
its suppliers, and
    (b) Return the original of the permit or obsolete permit to the 
appropriate ATF officer for cancellation.

                           Registry of Stills



Sec. 22.66  Registry of stills.

    The provisions of subpart C of part 29 of this chapter are 
applicable to stills on the premises of a permittee used for distilling. 
As provided in Sec. 29.55, the listing of a still in the permit 
application (Form 5150.22), and approval of the application, constitutes 
registration of the still.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1355, as amended (26 U.S.C. 5179))

[T.D. ATF-207, 50 FR 23682, June 5, 1985]

           Permanent Discontinuance of Use of Tax-Free Alcohol



Sec. 22.68  Notice of permanent discontinuance.

    A permittee who permanently discontinues the use of tax-free alcohol 
shall file a written notice with the appropriate ATF officer to cover 
the discontinuance. The notice will be accompanied by the permit, and 
contain--
    (1) A request to cancel the permit,
    (2) A statement of the disposition made, as provided in Sec. 22.154, 
of all tax-free and recovered alcohol, and
    (3) The date of discontinuance.

(Approved by the Office of Management and Budget under control number 
1512-0335)

[T.D. ATF-199, 50 FR 9183, Mar. 6, 1985, as amended by T.D. ATF-443, 66 
FR 13015, Mar. 2, 2001]

Subpart E [Reserved]



                    Subpart F--Premises and Equipment



Sec. 22.91  Premises.

    All persons qualified to withdraw and use tax-free alcohol shall 
have premises suitable for the business being conducted and adequate for 
the protection of the revenue. Storage facilities shall be provided on 
the premises for tax-free alcohol received or recovered. The storage 
facilities may consist of a combination of storerooms, compartments, or 
stationary storage tanks.



Sec. 22.92  Storage facilities.

    (a) Storerooms or compartments shall be so constructed and secured 
as to prevent unauthorized access and will be equipped for locking. 
These storage facilities shall be of sufficient capacity to hold the 
maximum quantity of tax-free alcohol which will be on hand at one time.
    (b) Each stationary storage tank used to hold tax-free alcohol shall 
be equipped for locking in such a manner as to control access to the 
spirits. All stationary storage tanks shall be equipped with an accurate 
means of measuring the spirits.
    (c) Storerooms and storage tanks shall be kept locked when 
unattended. A storage cabinet or locker kept inside a room which is 
locked when unattended is considered to be adequately secured.



Sec. 22.93  Equipment for recovery and restoration of tax-free alcohol.

    (a) Location. All equipment used to recover and restore tax-free 
alcohol for reuse shall be located on the permit premises.
    (b) Construction. (1) Distilling apparatus, pipelines and other 
equipment used for recovery and restoration of tax-free alchohol shall 
be constructed and secured in such a manner as to prevent unauthorized 
access and so arranged as to be readily inspected.
    (2) Storage tanks shall be provided for the collection of recovered 
tax-free alcohol. Each storage tank shall--
    (i) Be durably marked as to use and capacity;
    (ii) Be equipped with, or for, an accurate means of measuring the 
spirits; and
    (iii) Be equipped for locking to control unauthorized access to the 
spirits.



                   Subpart G--Use of Tax-Free Alcohol



Sec. 22.101  Authorized uses.

    Alcohol may be withdrawn free of tax from the bonded premises of a 
distilled spirits plant for the use of any State or political 
subdivision of a State, or the District of Columbia, for nonbeverage

[[Page 511]]

purposes. Alcohol may also be withdrawn by persons eligible to use tax-
free alcohol, for nonbeverage purposes and not for resale or use in the 
manufacture of any product for sale. Tax-free alcohol shall be withdrawn 
and used only as provided by law and this part, as follows:
    (a) For the use of any educational organization described in 26 
U.S.C. 170(b)(1)(A) which is exempt from income tax under 26 U.S.C. 
501(a), or for the use of any scientific university or college of 
learning;
    (b) For any laboratory for use exclusively in scientific research;
    (c) For use at any hospital, blood bank, or sanitarium (including 
use in making any analysis or test at a hospital, blood bank, or 
sanitarium), or at any pathological laboratory exclusively engage in 
making analyses, or test, for hospitals or sanitariums; or
    (d) For the use of any clinic operated for charity and not for 
profit (including use in the compounding of bona fide medicines for 
treatment of patients outside of the clinic).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, (26 U.S.C. 5214))



Sec. 22.102  Prohibited uses.

    (a) Usage. Under no circumstances may tax-free alcohol withdrawn 
under this part be used for beverage purposes, food products, or in any 
preparation used in preparing beverage or food products.
    (b) Selling. Persons qualified under this part are prohibited from 
selling tax-free alcohol, using tax-free alcohol in the manufacture of 
any product for sale, or selling any products resulting from the use of 
tax-free alcohol. A separate charge may be made by a hospital, 
sanitarium or clinic for medicines compounded with tax-free alcohol and 
dispensed to patients for use on the premises, as provided in 
Secs. 22.105 and 22.106. Hospitals may not furnish tax-free alcohol for 
use of physicians in their private practice.
    (c) Removal from premises. Persons qualified under this part may not 
remove tax-free alcohol or products resulting from the use of tax-free 
alcohol from the permit premises unless specifically authorized by the 
terms of their permit, or permission is obtained from the appropriate 
ATF officer, except that:
    (1) Products made through the use of tax-free alcohol which contain 
no alcohol may be removed to other premises for the sole purpose of 
further research; or
    (2) Under the provisions of Secs. 22.105 and 22.106, clinics 
operated for charity and not for profit may compound bona fide medicines 
with tax-free alcohol, and dispense the medicine from the premises for 
use by its patients outside of the clinic, if the furnishing of the 
medicine is not conditioned upon payment.
    (d) Liability for tax. Permittees who use tax-free alcohol in any 
manner prohibited by this section become liable for the tax on the 
alcohol. Any permittee who sells tax-free alcohol also becomes liable 
for special (occupational) tax as a liquor dealer.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended, 1343, as amended, 
1362, as amended (26 U.S.C. 5001, 5121, 5214))



Sec. 22.103  States and the District of Columbia.

    Except as otherwise provided in this section, tax-free alcohol 
withdrawn by a State or political subdivision of a State, or the 
District of Columbia shall be used solely for mechanical and scientific 
purposes, and except on approval of the appropriate ATF officer, the use 
of tax-free alcohol or the use of any resulting product will be confined 
to the premises under the control of the State or political subdivision 
of a State, or the District of Columbia. Tax-free alcohol withdrawn for 
use in hospitals, clinics, and other establishments specified in 
Secs. 22.104 through 22.108, operated by a State, political subdivision 
of a State, or the District of Columbia, shall be used in the manner 
prescribed for those establishments.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 5214))



Sec. 22.104  Educational organizations, colleges of learning, and scientific universities.

    (a) Educational organizations. Educational organizations authorized 
to withdraw and use tax-free alcohol under Sec. 22.101 are those 
organizations

[[Page 512]]

which normally maintain a regular faculty and curriculum and which 
normally have a regularly enrolled body of students in attendance at the 
place where their educational activities are regularly carried on and 
which are exempt from Federal income tax under 26 U.S.C. 501(a).
    (b) Colleges of learning. Colleges of learning, for the purposes of 
this subpart, have a recognized curriculum and confer degrees after 
specified periods of attendance at classes or research work.
    (c) Scientific universities. Scientific universities include any 
university incorporated or organized under any Federal or State law 
which provides training in the sciences.
    (d) Uses. Tax-free alcohol withdrawn by educational organizations, 
scientific universities, and colleges of learning shall be used only for 
scientific, medicinal, and mechanical purposes. Use of tax-free alcohol 
and resulting products are limited by the provisions of Sec. 22.102.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 5214))



Sec. 22.105  Hospitals, blood banks, and sanitariums.

    (a) Tax-free alcohol withdrawn for use by hospitals, blood banks, 
and sanitariums shall be used exclusively for medicinal, mechanical 
(analysis or test) and scientific purposes and in the treatment of 
patients. The use of tax-free alcohol and of products resulting from the 
use of tax-free alcohol shall be confined to the permit premises, except 
as provided in this section and Sec. 22.102. Medicines compounded with 
tax-free alcohol on the premises of a hospital or sanitarium, for use of 
patients on the premises, may not be sold, but a separate charge may be 
made for the medicine.
    (b) A hospital, operating a clinic on premises, may withdraw tax-
free alcohol for use in the clinic, if the clinic is operated for 
charity and not for profit. Medicines compounded with tax-free alcohol 
may be dispensed to patients at a clinic for use outside of the clinic, 
if the furnishing of the medicine is not conditioned upon payment.
    (c) A hospital or sanitarium, operating a pathological or other 
laboratory on premises, may withdraw tax-free alcohol for authorized use 
in the laboratory.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 5214))



Sec. 22.106  Clinics.

    Tax-free alcohol withdrawn by clinics operated for charity and not 
for profit shall be used only for medicinal, scientific, and mechanical 
purposes and in the treatment of patients. Medicine compounded with tax-
free alcohol may be dispensed to patients for use off the premises, if 
the furnishing of the medicine is not conditioned upon payment. A 
separate charge may be made for medicine coumpounded on the clinic 
premises with tax-free alcohol for use of patients on the premises. 
Except as provided in this section and in Sec. 22.102, the use of tax-
free alcohol shall be confined strictly to the premises of the clinic.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 5214))



Sec. 22.107  Pathological laboratories.

    (a) Pathological laboratories, not operated by a hospital or 
sanitarium, may withdraw and use tax-free alcohol if exclusively engaged 
in making analyses or tests for hospitals or sanitariums. If a 
pathological laboratory does not exclusively conduct analyses or tests 
for hospitals or sanitariums, it does not qualify for the permit issued 
under this part.
    (b) A pathological laboratory which uses tax-free alcohol for any 
other purpose, except as provided in this section, shall become liable 
for the tax on the alcohol.
    (c) Except as provided in Sec. 22.102, the use of tax-free alcohol 
and of products resulting from the use of tax-free alcohol shall be 
confined strictly to the permit premises.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended, 1362, as amended 
(26 U.S.C. 5001, 5214))



Sec. 22.108  Other laboratories.

    Laboratories, other than pathological laboratories specified in 
Sec. 22.107, may withdraw and use tax-free alcohol exclusively in 
scientific research. The use of tax-free alcohol or of products

[[Page 513]]

resulting from the use of tax-free alcohol shall be confined strictly to 
the laboratory premises, except as provided in Sec. 22.102.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended (26 U.S.C. 5214))



          Subpart H--Withdrawal and Receipt of Tax-Free Alcohol



Sec. 22.111  Withdrawals under permit.

    (a) General. The permit, Form 5150.9, issued under subpart D of this 
part, authorizes a person to withdraw tax-free alcohol from the bonded 
premises of a distilled spirits plant or, under the provisions of 26 
U.S.C. 5688(a)(2)(B), receive alcohol from the General Services 
Administration.
    (b) Photocopying of permit, Form 5150.9. (1) As provided in 
Sec. 22.54, a permittee may make photocopies of its permit, or amended 
permit, for the exclusive purpose of furnishing proof of authorization 
to withdraw tax-free alcohol.
    (2) A permittee need only furnish the photocopy of its permit, or 
amended permit, to a distilled spirits plant for the ``initial order'' 
from that distilled spirits plant.
    (3) When a permittee makes photocopies of its permit, Form 5150.9, 
each copy shall be signed, dated, and contain the word ``COPY'' across 
the face.
    (4) A permittee is responsible for obtaining and, as applicable, 
destroying all photocopies of its permit from distilled spirits plants 
when (i) an amended or corrected permit is issued which supersedes the 
copy on file, (ii) the permit is canceled by reason of requalification 
as a new permittee, (iii) the permit is revoked or suspended, or (iv) 
upon permanent discontinuance of use of tax-free alcohol.
    (c) Withdrawals under permit. (1) When a permittee places an initial 
order for tax-free alcohol it shall forward a signed copy of the permit, 
for retention by the distilled spirits plant, along with the purchase 
request.
    (2) When the permittee places a subsequent order for tax-free 
alcohol, the purchase request, in addition to any other information, 
shall contain the permit identification number along with a statement 
that the permittee possesses a valid permit to withdraw tax-free 
alcohol, a copy of which is on file.
    (3) Shipments shall not be made by a proprietor of a distilled 
spirits plant until it is in possession of a signed copy of a valid 
permit, Form 5150.9, unless the appropriate ATF officer authorizes the 
shipment.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 U.S.C. 5555))

[T.D. ATF-199, 50 FR 9183, Mar. 6, 1985; 50 FR 20099, May 14, 1985]



Sec. 22.112  Regulation of withdrawals.

    (a) Each permittee shall regulate its withdrawals of tax-free 
alcohol to ensure that (1) the quantity on hand and unaccounted for does 
not exceed the capacity of the storage facilities, and (2) the 
cumulative quantity withdrawn or received in any calendar year does not 
exceed the quantity authorized by the permit, Form 5150.9. Recovered 
alcohol and alcohol received from the General Services Administration 
shall be taken into account in determining the total quantity of alcohol 
on hand.
    (b) For the purpose of this section, tax-free alcohol and recovered 
alcohol shall be considered as unaccounted for if lost under 
circumstances where a claim for allowance is required by this part and 
the claim has not been allowed, or if used or disposed of in any manner 
not provided for in this part.



Sec. 22.113  Receipt of tax-free alcohol.

    (a) When tax-free alcohol is received, it shall be placed in the 
storage facilities prescribed by Sec. 22.91 and kept there under lock 
until withdrawn for use. Unless required by city or State fire code 
regulations or authorized by the appropriate ATF officer or the terms of 
the permit, the permittee may not remove tax-free alcohol from the 
original packages or containers in which received until the alcohol is 
withdrawn for use. If the tax-free alcohol is transferred to ``safety'' 
containers in accordance with fire code regulations, the containers to 
which they are transferred shall be appropriately marked to identify the 
package from which transferred, the quantity transferred, the date of 
transfer, and the name and address of the vendor.

[[Page 514]]

    (b) When tax-free alcohol is received, the permittee shall ascertain 
and account for any losses in transit in accordance with subpart I of 
this part. The permittee shall note any loss or deficiency in the 
shipment on the record of receipt.
    (c) Records of receipt shall consist of the consignors invoice or 
bill. Records of receipt may be filed in accordance with the permittee's 
own filing system as long as it does not cause inconvenience to 
appropriate ATF officers desiring to examine the records. The filing 
system shall systematically and accurately account for the receipt of 
all tax-free alcohol.



Sec. 22.114  Alcohol received from the General Services Administration.

    Any nonprofit charitable institution holding a permit on Form 
5150.9, and receiving alcohol from the General Services Administration 
under the provisions of 26 U.S.C. 5688(a)(2)(B), shall include any 
quantity of alcohol received in computing the quantity of tax-free 
alcohol that may be procured under its permit during the calendar year. 
The alcohol, on receipt, shall be placed in the storage facilities 
prescribed in Sec. 22.91 and kept there under lock until withdrawn for 
use.



                            Subpart I--Losses



Sec. 22.121  Liability and responsibility of carriers.

    (a) A person or carrier transporting tax-free alcohol to a consignee 
or returning the alcohol to the consignor is responsible for the safe 
delivery and is accountable for any tax-free alcohol not delivered.
    (b) A person or carrier transporting tax-free alcohol in violation 
of any law or regulation pertaining thereto, is subject to all 
provisions of law relating to alcohol subject to and the payment of tax 
thereon, and shall be required to pay the tax.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended (26 U.S.C 5001))



Sec. 22.122  Losses in transit.

    (a) Reporting losses. Upon discovering any loss of tax-free alcohol 
while in transit, the carrier shall immediately inform the consignee, in 
writing, of the facts and circumstances relating to the loss. In the 
case of theft, the carrier shall also immediately notify the consignee's 
appropriate ATF officer of the facts and circumstances relating to the 
loss.
    (b) Recording losses. At the time the shipment or report of loss is 
received, the consignee shall determine the quantity of tax-free alcohol 
lost. The consignee shall note the quantity lost on the receiving 
document and attach all relevant information to the record of receipt, 
prescribed in Sec. 22.113. For the purpose of maintaining the records 
prescribed in subpart M of this part, receipts of tax-free alcohol shall 
only include the quantity actually received.
    (c) Claims. A claim for allowances of losses of tax-free alcohol 
shall, as prescribed in Sec. 22.125, be filed:
    (1) If the quantity lost in transit exceeds 1 percent of the total 
quantity shipped and is more than 5 proof gallons, the consignee shall 
file a claim for allowance of the entire quantity lost; or
    (2) If the loss was due to theft or other unlawful removal, the 
consignee shall file a claim for allowances of the entire quantity lost, 
regardless of the quantity or percentage involved.

(Reporting approved by the Office of Management and Budget under control 
number 1512-0335; recordkeeping approved by the Office of Management and 
Budget under control number 1512-0334)



Sec. 22.123  Losses on premises.

    (a) Recording of losses. A permittee shall determine and record, in 
the records prescribed by subpart M of this part, the quantity of tax-
free or recovered alcohol lost on premises--
    (1) At the end of each semi-annual period when the inventory 
required by Sec. 22.162 is taken, or
    (2) Immediately upon the discovery of any loss due to casualty, 
theft or other unusual causes.
    (b) Claims. A claim for allowances of losses of tax-free alcohol 
shall be filed as prescribed in Sec. 22.125, in the following 
circumstances--
    (1) if the quantity lost during any semi-annual inventory period 
exceeds 1 percent of the quantity to be accounted for during that 
period, and is more than 10 proof gallons, or

[[Page 515]]

    (2) if the loss was due to theft or unlawful use or removal, the 
permittee shall file a claim for allowances of losses regardless of the 
quantity involved.

(Approved by the Office of Management and Budget under control number 
1512-0334)



Sec. 22.124  Incomplete shipments.

    (a) Subject to the provisions of this part and Part 19 of this 
chapter, when containers of tax-free alcohol have sustained losses in 
transit other than by theft, and the shipment will not be delivered to 
the consignee, the carrier may return the shipment to the distilled 
spirits plant.
    (b) When tax-free alcohol is returned to the distilled spirits 
plant, in accordance with this section, the carrier shall inform the 
proprietor, in writing, of the facts and circumstances relating to the 
loss. In the case of theft, the carrier shall also immediately notify 
the shipper's appropriate ATF officer of the facts and circumstances 
relating to the loss.
    (c) Subject to the limitations for loss prescribed in Sec. 22.122, 
the proprietor of the distilled spirits plant shall file a claim for 
allowance of the entire quantity lost, in the same manner provided in 
that section. The claim shall include the applicable date required by 
Sec. 22.125.



Sec. 22.125  Claims.

    (a) Claims for allowances of losses of tax-free or recovered alcohol 
shall be filed, on Form 2635 (5620.8), within 30 days from the date the 
loss is ascertained, and shall contain the following information:
    (1) Name, address, and permit number of claimant;
    (2) Identification and location of the container(s) from which the 
tax-free or recovered alcohol was lost, and the quantity lost from each 
container;
    (3) Total quantity of tax-free or recovered alcohol covered by the 
claim and the aggregate quantity involved;
    (4) Date of loss or discovery, the cause or nature of loss, and all 
relevant facts, including facts establishing whether the loss occurred 
as a result of negligence, connivance, collusion, or fraud on the part 
of any person, employee or agent participating in or responsible for the 
loss; and
    (5) Name of carrier where a loss in transit is involved.
    (b) The carriers statement regarding a loss in transit, prescribed 
by Sec. 22.122 or 22.124, shall accompany the claim.
    (c) The appropriate ATF officer may require additional evidence to 
be submitted in support of the claim.



                 Subpart J--Recovery of Tax-Free Alcohol



Sec. 22.131  General.

    Any person or permittee conducting recovery operations of tax-free 
alcohol shall be qualified by the terms of their permit to do so, under 
the provision of subpart D of this part. Restoration of recovered tax-
free alcohol may only be accomplished on the permit premises or by the 
proprietor of a distilled spirits plant.



Sec. 22.132  Deposit in storage tanks.

    (a) Recovered alcohol shall be accumulated and kept in separate 
storage tanks conforming to Sec. 22.93. Recovered alcohol shall be 
measured before being redistilled or reused.
    (b) Recovered alcohol may be removed from storage tanks for 
packaging and shipment to a distilled spirits plant for redistillation.



Sec. 22.133  Shipment for redistillation.

    (a) Unless a permittee intends to redistill recovered alcohol to its 
original state, the recovered alcohol shall be shipped in containers to 
a distilled spirits plant for restoration.
    (b) Containers shall be labeled with--
    (1) The name, address, and permit number of permittee,
    (2) The quantity of recovered alcohol in gallons,
    (3) The words ``Recovered tax-free alcohol'', and
    (4) A package identification number or serial number in accordance 
with paragraph (c)(1) or (c)(2) of this section.
    (c)(1) A package identification number shall apply to all of the 
packages filled at the same time. All of the packages in one lot shall 
be the same type, have the same rated capacity, and be uniformly filled 
with the same quantity. A package identification number shall be derived 
from the date on which the package is filled, and

[[Page 516]]

shall consist of the following elements, in the order shown--
    (i) The last two digits of the calendar year;
    (ii) An alphabetical designation from ``A'' through ``L'', 
representing January through December, in that order;
    (iii) The digits corresponding to the day of the month; and
    (iv) A letter suffix when more than one identical lot is filled into 
packages during the same day. For successive lots after the first lot, a 
letter suffix shall be added in alphabetical order, with ``A'' 
representing the second lot of the day, ``B'' representing the third lot 
of the day, etc. (e.g. the first three lots filled into packages on 
November 19, 1983, would be identified as ``83K19,'' `83K19A,'' and 
``83K19B.''
    (2) A consecutive serial number shall be marked on each package, 
beginning with the number ``1'' and continuing in regular sequence. When 
any numbering series reaches ``1,000,000,'' the user may recommence the 
series by providing an alphabetical prefix or suffix for each number in 
the new series.



Sec. 22.134  Records of shipment.

    A consignor shipping recovered alcohol or tax-free alcohol to a 
distilled spirits plant shall prepare and forward a record of shipment 
to the consignee. The record of shipment may consist of a shipping 
invoice, bill, or bill of lading, or another document intended for the 
same purpose. The record of shipment shall accurately identify and 
account for the tax-free or recovered alcohol being shipped. A permittee 
shall file one copy of the record of shipment with the records required 
by Sec. 22.161.

(Approved by the Office of Management and Budget under control number 
1512-0334)



                         Subpart K--Destruction



Sec. 22.141  General.

    A permittee may terminate liability for payment of tax, prescribed 
by law, when tax-free or recovered alcohol is destroyed in accordance 
with this subpart.



Sec. 22.142  Destruction.

    (a) A permittee may destroy tax-free or recovered alcohol upon
    (1) The filing of a notice of intention to destroy with the 
appropriate ATF officer at least 7 days prior to the proposed date of 
destruction, or
    (2) Furnishing the notice to an appropriate ATF officer at the 
premises who may supervise the destruction or transmit the notice to the 
appropriate ATF officer.
    (b) The notice of intention to destroy shall contain--
    (1) The reason for destruction,
    (2) The date, time, location and manner of destruction, and
    (3) The quantity involved and, if applicable, the package 
identification numbers of containers.
    (c) If, by the date and time specified in the notice, an appropriate 
ATF officer has not supervised the destruction, or the appropriate ATF 
officer has not advised the permittee to the contrary, the spirits may 
be destroyed in the manner stated in the notice.
    (d) Following the destruction, if unsupervised by an ATF officer, 
the permittee shall annotate a copy of the notice with the name of the 
individual who accomplished or supervised the destruction. This notice 
shall serve as a record of destruction and shall be maintained with the 
records required by Sec. 22.161.

(Approved by the Office of Management and Budget under control number 
1512-0335)



    Subpart L--Return, Reconsignment and Disposition of Tax-Free or 
                            Recovered Alcohol



Sec. 22.151  Return.

    A permittee may, following the receipt of tax-free alcohol and for 
any legitimate reason, return the spirits to any distilled spirits plant 
if the consignee consents to the shipment. The consignor shall prepare a 
record of shipment in the same manner prescribed in Sec. 22.134 for 
shipment of recovered alcohol.

(Approved by the Office of Management and Budget under control number 
1512-0334)



Sec. 22.152  Reconsignment in transit.

    (a) Reconsignment. Tax-free alcohol may be reconsigned to another 
permittee or returned to the consignor if, prior to, or on arrival at 
the premises

[[Page 517]]

of the consignee, the alcohol is determined to be unsuitable for the 
intended purpose, was shipped in error, or, for any bona fide reason, is 
not accepted by the consignee or carrier.
    (b) Records of reconsignment. In the case of reconsignment, the 
consignor shall cancel the initial record of shipment and prepare a new 
record of shipment, if the shipment is to another permittee. The new 
record of shipment shall be annotated ``Reconsignment.''

(Approved by the Office of Management and Budget under control number 
1512-0334)

[T.D. ATF-199, 50 FR 9183, Mar. 6, 1985, as amended by T.D. ATF-443, 66 
FR 13015, Mar. 2, 2001]



Sec. 22.153  Disposition after revocation of permit.

    When any permit issued on Form 5150.9 is revoked, all tax-free 
alcohol in transit and all alcohol on the former permit premises, may be 
lawfully possessed by the former permittee for the exclusive purpose of 
disposing of the alcohol, for a period of 60 days following the date of 
revocation. Any tax-free or recovered alcohol not disposed of within the 
specified 60-day period, is subject to seizure and forfeiture.



Sec. 22.154  Disposition on permanent discontinuance of use.

    (a) Tax-free alcohol. Tax-free alcohol on hand at the time of 
discontinuance of use, may be disposed of by
    (1) Returning the spirits to a distilled spirits plant, as provided 
in Sec. 22.151,
    (2) Destruction, as provided in Sec. 22.142, or
    (3) Shipping to another permittee, in accordance with Sec. 22.155.
    (b) Recovered tax-free alcohol. Upon permanent discontinuance of 
use, a permittee may dispose of recovered tax-free alcohol by
    (1) Shipment to a distilled spirits plant, as provided in 
Sec. 22.133,
    (2) Destruction, as provided in Sec. 22.142, or
    (3) Upon the filing of an application with the appropriate ATF 
officer, any other approved method.

(Approved by the Office of Management and Budget under control number 
1512-0335)



Sec. 22.155  Emergency disposition to another permittee.

    (a) In the case of an emergency, a permittee may, upon the filing of 
a notice with the area supervisor, dispose of tax-free alcohol to 
another permittee, when the quantity involved does not exceed 10 proof 
gallons. In the case of a medical emergency or disaster, the area 
supervisor is authorized to verbally approve, with the required notice 
to follow, disposals of tax-free alcohol to another permittee or 
Government agency in excess of 10 proof gallons. The tax-free alcohol 
disposed of shall be in original unopened containers. The consignor 
shall prepare a record of shipment in the same manner prescribed in 
Sec. 22.134.
    (b) The notice required by this section shall (1) explain the nature 
of the emergency, (2) identify the consignee by name, address and permit 
number, and (3) list the quantity of alcohol and package identification 
number of the container(s) involved.
    (c) The consignor permittee may not receive remuneration for tax-
free alcohol given to another permittee in case of an emergency, as 
authorized by this section.

(Notice approved by the Office of Management and Budget under control 
number 1512-0335; recordkeeping approved by the Office of Management and 
Budget under control number 1512-0334)



                   Subpart M--Records of Transactions



Sec. 22.161  Records.

    (a) General. All persons qualified under this part shall keep 
accurate records of all receipts, shipments, usage, destructions and 
claims pertaining to the withdrawal and use of tax-free alcohol. These 
records shall be in sufficient detail to enable the permittee to 
reconcile any losses or gains for the semi-annual inventory, and to 
enable appropriate ATF officers to verify all transactions and to 
ascertain whether there has been compliance with law and regulations. 
All records required by this section shall identify tax-free alcohol by 
proof, date of transaction, and quantity involved, and shall include 
alcohol received from the

[[Page 518]]

General Services Administration and the recovery of alcohol and its 
disposition. Records shall be kept current at all times.
    (b) Records of receipt and shipment. Records of receipt and shipment 
shall consist of the consignor's or consignee's (as the case may be) 
invoice, bill or bill of lading, or another document used for the 
intended purpose. Records of receipt shall record only the quantity of 
tax-free alcohol actually received. Losses in transit shall not be 
considered as received, but may be the subject of a claim for allowances 
of losses, as prescribed in Subpart I of this part.
    (c) Records of usage. For the purpose of this subpart, tax-free or 
recovered alcohol shall be considered as ``used'' when permanently 
removed from a permittee's supply storeroom, compartment, or tank for 
any authorized use. Records of usage shall identify the tax-free alcohol 
by quantity, proof, and purpose of removal (office, department or 
location to which dispensed). This record shall list separately, the 
usage of tax-free alcohol from recovered alcohol or alcohol received 
from the General Services Administration.
    (d) Records of destruction. Records of destruction shall consist of 
a copy of the notice of intention to destroy, prescribed in Sec. 22.141, 
signed by an appropriate ATF officer or employee witnessing the 
destruction.
    (e) Claims. Claims for allowance of losses of tax-free alcohol, 
required to be filed under Subpart I of this part, shall consist of 
Forms 2635 (5620.8) and supporting data.

(Approved by the Office of Management and Budget under control number 
1512-0334)



Sec. 22.162  Inventories.

    Each permittee shall take a physical inventory of the tax-free and 
recovered alcohol in its possession semi-annually for the periods ending 
June 30 and December 31 of each year; or other inventory periods which 
are approximately 6 months apart, upon filing written notice with the 
appropriate ATF officer establishing other inventory periods. These 
inventories may be recorded separately or as an entry in the record of 
usage with any necessary adjustments (losses or gains). If an inventory 
results in a loss in excess of the quantities prescribed by Subpart I of 
this part, the permittee shall file a claim for allowance of loss.

(Notice approved by the Office of Management and Budget under control 
number 1512-0335; recordkeeping approved by the Office of Management and 
Budget under control number 1512-0334)



Sec. 22.163  Time for making entries.

    Any person who conducts an operation which is required to be 
recorded under this part, shall enter that operation in the records on 
the same day the operation occurred. However, the daily posting of 
records may be deferred to conform to the permittee's normal accounting 
cycle if (a) supporting or supplemental records are prepared at the time 
of the operation, and these supporting or supplemental records are to be 
used to post the daily record, and (b) the deferral of posting does not 
pose a jeopardy to the revenue.



Sec. 22.164  Filing and retention of records.

    Each person required to maintain records of operations and 
transactions under this part shall:
    (a) Keep on file all records and copies of claims for a period of 
not less than 3 years following the date of transaction or, at the 
discretion of the appropriate ATF officer, an additional 3-year period; 
and
    (b) Maintain all records at the permit premises, except that the 
records may be kept at a central location by a State or political 
subdivision of a State, or the District of Columbia which distributes 
tax-free alcohol to multiple dependent agencies, institutions, or 
departments.



Sec. 22.165  Photographic copies of records.

    (a) General. Permittees may record, copy, or reproduce required 
records. Any process may be used which accurately reproduces the 
original record, and which forms a durable medium for reproducing and 
preserving the original record.

[[Page 519]]

    (b) Copies of records treated as original records. Whenever records 
are reproduced under this section, the reproduced records shall be 
preserved in conveniently accessible files, and provisions shall be made 
for examining, viewing, and using the reproduced records the same as if 
they were the original record, and they shall be treated and considered 
for all purposes as though they were the original record. All provisions 
of law and regulations applicable to the original are applicable to the 
reproduced record. As used in this section, ``original record'' means 
the record required by this part to be maintained or preserved by the 
permittee, even though it may be an executed duplicate or other copy of 
the document.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 U.S.C. 5555))



 Subpart N--Use of Tax-Free Spirits by the United States or Government 
                                 Agency



Sec. 22.171  General.

    (a) The United States or any of its Government agencies may withdraw 
tax-free spirits for nonbeverage purposes from a distilled spirits plant 
under this part, as authorized by 26 U.S.C. 5214(a)(2). Before any tax-
free spirits may be withdrawn, a permit to procure the spirits shall be 
obtained from the appropriate ATF officer. Payment of special 
(occupational) tax and filing of a bond are not required for any 
Governmental agency of the United States to procure tax-free spirits.
    (b) The provisions of subpart M of 27 CFR part 251 cover the 
withdrawal of imported spirits, free of tax, for use of the United 
States or any of its Government agencies.

(26 U.S.C. 5214, 5271, 5272, 5276)

[T.D. ATF-199, 50 FR 9183, Mar. 6, 1985, as amended by T.D. ATF-285, 54 
FR 12610, Mar. 28, 1989]



Sec. 22.172  Application and permit, Form 5150.33.

    (a) All permits previously issued to the United States or any of its 
Government agencies on Form 1444 shall remain valid and shall be 
regulated by the same provisions of this subpart as it refers to permits 
on Forms 5150.33.
    (b) A Government agency shall apply for a permit to obtain tax-free 
spirits on Form 5150.33. Upon approval, Form 5150.33 will be returned to 
the Government agency, and shall serve as authority to procure spirits 
free of tax.
    (c) A Government agency may specify on its application for a permit 
to procure tax-free spirits, Form 5150.33, that it desires a single 
permit authorizing all sub-agencies under its control to procure tax-
free spirits; or each Government location (agency, department, bureau, 
and etc.) desiring to procure tax-free spirits for nonbeverage purposes 
may individually submit an application for a permit on Form 5150.33.
    (d) An application for a permit shall be signed by the head of the 
agency or sub-agency, or the incumbent of an office which is authorized 
by the head of the agency or sub-agency, to sign. Evidence of 
authorization to sign for the head of the agency or sub-agency shall be 
furnished with the application.
    (e) Tax-free spirits obtained by Government agencies may not be used 
for non-Government purposes.

[T.D. ATF-199, 50 FR 9183, Mar. 6, 1985; 50 FR 20099, May 14, 1985]



Sec. 22.173  Procurement of tax-free spirits.

    Each Government agency shall retain the original of its permit, Form 
5150.33, on file. When placing an initial order with a vendor, the 
agency shall forward a photocopy of its permit with the purchase order 
for tax-free spirits. In the case of an agency holding a single permit 
for use of other sub-agencies, the photocopy of the permit shall contain 
an attachment listing all other locations authorized to procure tax-free 
spirits. Any subsequent purchases from the same vendor need only contain 
the permit number on the purchase order.



Sec. 22.174  Receipt of shipment.

    On receipt of a shipment of tax-free spirits, a representative of 
the Government agency shall inspect the shipment for any loss or 
deficiency. In the case of loss or deficiency, the agency shall annotate 
the receiving document and forward a copy to the appropriate ATF 
officer.

[[Page 520]]



Sec. 22.175  Discontinuance of use.

    When a Government agency, holding a permit issued under this 
subpart, no longer intends to procure and use tax-free spirits, the 
permit shall be returned to the appropriate ATF officer for 
cancellation. All photocopies of the permit furnished to vendors shall 
be returned to the agency for destruction.



Sec. 22.176  Disposition of excess spirits.

    At the time of discontinuance of use of tax-free spirits, a 
Government agency may dispose of any excess tax-free spirits (a) by 
transferring the spirits to another Government agency holding a permit, 
(b) by returning the spirits to a vendor, or (c) in any manner 
authorized by the appropriate ATF officer. Tax-free spirits may not be 
disposed of to the general public.



PART 24--WINE--Table of Contents




                            Subpart A--Scope

Sec.
24.1  General.
24.2  Territorial extent.
24.4  Related regulations.

                         Subpart B--Definitions

24.10  Meaning of terms.

         Subpart C--Administrative and Miscellaneous Provisions

                               Authorities

24.19  Delegations of the Director.
24.20  Forms prescribed.
24.21  Modified forms.
24.22  Alternate method or procedure.
24.25  Emergency variations from requirements.
24.26  Authority to approve.
24.27  Segregation of operations.
24.28  Installation of meters, tanks, and other apparatus.
24.29  Claims.
24.30  Supervision.
24.31  Submission of forms and reports.
24.32  Records.
24.35  Right of entry and examination.
24.36  Instruments and measuring devices.
24.37  Samples for the United States.

                        Facilities and Assistance

24.40  Gauging and measuring.
24.41  Office facilities.

                     Employer Identification Number

24.45  Use on returns.
24.46  Application.
24.47  Execution of IRS Form SS-4.

                      Special (Occupational) Taxes

24.50  Payment of special (occupational) tax.
24.51  Rates of special (occupational) tax.
24.52  Exemption from special (occupational) tax.
24.53  Special (occupational) tax returns.
24.54  Special (occupational) tax stamps.
24.55  Changes in special (occupational) tax stamps.

                               Assessments

24.60  General.
24.61  Assessment of tax.
24.62  Notice.

                                 Claims

24.65  Claims for wine or spirits lost or destroyed in bond.
24.66  Claims on wine returned to bond.
24.67  Other claims.
24.68  Insurance coverage.
24.69  Filing of claims.
24.70  Claims for credit of tax.

                             Tax Exempt Wine

24.75  Wine for personal or family use.
24.76  Tax exempt cider.
24.77  Experimental wine.

                                Formulas

24.80  General.
24.81  Filing of formulas.
24.82  Samples.

                                Essences

24.85  Essences.
24.86  Essences produced on wine premises.
24.87  Essences made elsewhere.

             Conveyance of Wine or Spirits on Wine Premises

24.90  Taxpaid products.
24.91  Conveyance of untaxpaid wine or spirits.
24.92  Products in customs custody.

                                 Samples

24.95  General.
24.96  Use off premises.
24.97  Use on premises.

                 Subpart D--Establishment and Operations

24.100  General.

                         Premises and Operations

24.101  Bonded wine premises.
24.102  Premises established for taxpaid wine operations.
24.103  Other operations.

[[Page 521]]

                               Application

24.105  General.
24.106  Basic permit requirements.
24.107  Designation as a bonded winery.
24.108  Bonded wine warehouse application.
24.109  Data for application.
24.110  Organizational documents.
24.111  Description of premises.
24.112  Name of proprietor and trade names.
24.113  Description of volatile fruit-flavor concentrate operations.
24.114  Registry of stills.
24.115  Registry number.
24.116  Powers of attorney.
24.117  Maintenance of application file.

              Changes Subsequent to Original Establishment

24.120  Amended application.
24.121  Changes affecting permits.
24.122  Change in name of proprietor or trade name.
24.123  Change in stockholders.
24.124  Change in corporate officers.
24.125  Change in proprietorship.
24.126  Change in proprietorship involving a bonded wine warehouse.
24.127  Adoption of formulas.
24.128  Continuing partnerships.
24.129  Change in location.
24.130  Change in volatile fruit-flavor concentrate operations.
24.131  Change in building construction and use of premises.

                               Alternation

24.135  Wine premises alternation.
24.136  Procedure for alternating proprietors.
24.137  Alternate use of the wine premises for customs purposes.

                 Permanent Discontinuance of Operations

24.140  Notice.
24.141  Bonded wine warehouse.

                      Bonds and Consents of Surety

24.145  General requirements.
24.146  Bonds.
24.147  Operations bond or unit bond.
24.148  Penal sums of bonds.
24.149  Corporate surety.
24.150  Powers of attorney.
24.151  Deposit of collateral security.
24.152  Consents of surety.
24.153  Strengthening bonds.
24.154  New or superseding bonds.
24.155  Disapproval and appeal from disapproval.
24.156  Termination of bonds.
24.157  Application by surety for relief from bond.
24.158  Extent of relief.
24.159  Release of collateral security.

                  Subpart E--Construction and Equipment

24.165  Premises.
24.166  Buildings or rooms.
24.167  Tanks.
24.168  Identification of tanks.
24.169  Pipelines.
24.170  Measuring devices and testing instruments.

                      Subpart F--Production of Wine

24.175  General.
24.176  Crushing and fermentation.
24.177  Chaptalization (Brix adjustment).
24.178  Amelioration.
24.179  Sweetening.
24.180  Use of concentrated and unconcentrated fruit juice.
24.181  Use of sugar.
24.182  Use of acid to correct natural deficiencies.
24.183  Use of distillates containing aldehydes.
24.184  Use of volatile fruit-flavor concentrate.

               Subpart G--Production of Effervescent Wine

24.190  General.
24.191  Segregation of operations.
24.192  Process and materials.
24.193  Conversion into still wine.

              Subpart H--Production of Special Natural Wine

24.195  General.
24.196  Formula required.
24.197  Production by fermentation.
24.198  Blending.

               Subpart I--Production of Agricultural Wine

24.200  General.
24.201  Formula required.
24.202  Dried fruit.
24.203  Honey wine.
24.204  Other agricultural products.

            Subpart J--Production of Other Than Standard Wine

24.210  Classes of wine other than standard wine.
24.211  Formula required.
24.212  High fermentation wine.
24.213  Heavy bodied blending wine.
24.214  Spanish type blending sherry.
24.215  Wine or wine products not for beverage use.
24.216  Distilling material.
24.217  Vinegar stock.
24.218  Other wine.

[[Page 522]]

                           Subpart K--Spirits

24.225  General.
24.226  Receipt or transfer of spirits.
24.227  Transfer of spirits by pipeline for immediate use.
24.228  Transfer of spirits by pipeline to a spirits storage tank.
24.229  Tank car and tank truck requirements.
24.230  Examination of tank car or tank truck.
24.231  Receipt of spirits in sealed bulk containers.
24.232  Gauge of spirits.
24.233  Addition of spirits to wine.
24.234  Other use of spirits.
24.235  Taxpayment or destruction of spirits.
24.236  Losses of spirits.
24.237  Spirits added to juice or concentrated fruit juice.

           Subpart L--Storage, Treatment and Finishing of Wine

24.240  General.
24.241  Decolorizing juice or wine.
24.242  Authority to use greater quantities of decolorizing material in 
          juice or wine.
24.243  Filtering aids.
24.244  Use of acid to stabilize standard wine.
24.245  Use of carbon dioxide in still wine.
24.246  Materials authorized for the treatment of wine and juice.
24.247  Materials authorized for the treatment of distilling material.
24.248  Processes authorized for the treatment of wine, juice, and 
          distilling material.
24.249  Experimentation with new treating material or process.
24.250  Application for use of new treating material or process.

                 Bottling, Packing, and Labeling of Wine

24.255  Bottling or packing wine.
24.256  Bottle aging wine.
24.257  Labeling wine containers.
24.258  Certificates of approval or exemption.
24.259  Marks.
24.260  Serial numbers or filling date.

                        Subpart M--Losses of Wine

24.265  Losses by theft.
24.266  Inventory losses.
24.267  Losses in transit.
24.268  Losses by fire or other casualty.

             Subpart N--Removal, Return and Receipt of Wine

                            Taxpaid Removals

24.270  Determination of tax.
24.271  Payment of tax by check, cash, or money order.
24.272  Payment of tax by electronic fund transfer.
24.273  Exception to filing semi-monthly tax returns.
24.274  Failure to timely pay tax or file a return.
24.275  Prepayment of tax.
24.276  Prepayment of tax; proprietor in default.
24.277  Date of mailing or delivering of returns.
24.278  Tax credit for certain small domestic producers.
24.279  Tax adjustments related to wine credit.

                        Transfer of Wine in Bond

24.280  General.
24.281  Consignor premises.
24.282  Multiple transfers.
24.283  Reconsignment.
24.284  Consignee premises.

                     Removals Without Payment of Tax

24.290  Removal of wine as distilling material.
24.291  Removal of wine for vinegar production.
24.292  Exported wine.
24.293  Wine for Government use.
24.294  Destruction of wine.

                  Return of Unmerchantable Wine to Bond

24.295  Return of unmerchantable wine to bond.

                         Taxpaid Wine Operations

24.296  Taxpaid wine operations.

                     Subpart O--Records and Reports

24.300  General.
24.301  Bulk still wine record.
24.302  Effervescent wine record.
24.303  Formula wine record.
24.304  Chaptalization (Brix adjustment) and amelioration record.
24.305  Sweetening record.
24.306  Distilling material or vinegar stock record.
24.307  Nonbeverage wine record.
24.308  Bottled or packed wine record.
24.309  Transfer in bond record.
24.310  Taxpaid removals from bond record.
24.311  Taxpaid wine records.
24.312  Unmerchantable wine returned to bond record.
24.313  Inventory record.
24.314  Label information record.
24.315  Materials received and used record.
24.316  Spirits record.
24.317  Sugar record.
24.318  Acid record.
24.319  Carbon dioxide record.
24.320  Chemical record.
24.321  Decolorizing material record.

[[Page 523]]

24.322  Allied products record.
24.323  Excise Tax Return form.

    Authority: 5 U.S.C. 552(a); 26 U.S.C. 5001, 5008, 5041, 5042, 5044, 
5061, 5062, 5081, 5111-5113, 5121, 5122, 5142, 5143, 5173, 5206, 5214, 
5215, 5351, 5353, 5354, 5356, 5357, 5361, 5362, 5364-5373, 5381-5388, 
5391, 5392, 5511, 5551, 5552, 5661, 5662, 5684, 6065, 6091, 6109, 6301, 
6302, 6311, 6651, 6676, 7011, 7302, 7342, 7502, 7503, 7606, 7805, 7851; 
31 U.S.C. 9301, 9303, 9304, 9306.

    Source: T.D. ATF-299, 55 FR 24989, June 19, 1990, unless otherwise 
noted.



                            Subpart A--Scope



Sec. 24.1  General.

    The regulations in this part relate to the establishment and 
operation (including incidental activities) of wine premises and to the 
treatment and classification of wine.



Sec. 24.2  Territorial extent.

    This part applies to the several States of the United States and the 
District of Columbia. (Sec. 201, Pub. L. 85-859, 72 Stat. 1337, as 
amended (26 U.S.C. 5065))



Sec. 24.4  Related regulations.

    Regulations related to this part are listed below:
26 CFR Part 301--Procedure and Administration.
27 CFR Part 1--Basic Permit Requirements Under the Federal Alcohol 
Administration Act.
27 CFR Part 2--Nonindustrial Use of Distilled Spirits and Wine.
27 CFR Part 4--Labeling and Advertising of Wine.
27 CFR Part 9--American Viticultural Areas.
27 CFR Part 16--Alcoholic Beverage Health Warning Statement
27 CFR Part 18--Production of Volatile Fruit-Flavor Concentrates.
27 CFR Part 19--Distilled Spirits Plants.
27 CFR Part 26--Liquors and Articles from Puerto Rico and the Virgin 
Islands.
27 CFR Part 29--Stills and Miscellaneous Regulations.
27 CFR Part 30--Gauging Manual.
27 CFR Part 71--Rules of Practice in Permit Proceedings.
27 CFR Part 194--Liquor Dealers.
27 CFR Part 251--Importation of Distilled Spirits, Wines and Beer.
27 CFR Part 252--Exportation of Liquors.
31 CFR Part 225--Acceptance of Bonds, Notes, or Other Obligations Issued 
or Guaranteed by the United States as Security in Lieu of Surety or 
Sureties on Penal Bonds.

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-459, 
66 FR 38550, July 25, 2001; T.D. ATF-463, 66 FR 42734, Aug. 15, 2001; 
T.D. ATF-462, 66 FR 42736, Aug. 15, 2001; T.D. ATF-470, 66 FR 58944, 
Nov. 26, 2001]



                         Subpart B--Definitions



Sec. 24.10  Meaning of terms.

    When used in this part and in the forms prescribed under this part, 
terms will have the meanings ascribed in this section. Words in the 
plural form also include the singular, and vice versa, and words 
indicating the masculine gender also include the feminine. The terms 
``includes'' and ``including'' do not exclude items not enumerated which 
are in the same general class. The definitions in this section do not 
supersede or affect the requirements of part 4 of this chapter, relative 
to the labeling of wine under the provisions of the Federal Alcohol 
Administration Act (49 Stat. 981; 27 U.S.C. 205).
    Affiliated persons or firms. When used in connection with ``own 
production'', one or more bonded wine premises proprietors associated as 
members of the same farm cooperative, or any one or more bonded wine 
premises proprietors affiliated within the meaning of section 117(a)(5) 
of the Federal Alcohol Administration Act, as amended (49 Stat. 989; 27 
U.S.C. 211).
    Agricultural wine. Wine made from suitable agricultural products 
other than the juice of grapes, berries, or other fruits.
    Allied products. Commercial fruit products and by-products 
(including volatile fruit-flavor concentrate) not taxable as wine.
    Amelioration. The addition to juice or natural wine before, during, 
or after fermentation, of either water or pure dry sugar, or a 
combination of water and sugar to adjust the acid level.
    Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this part by ATF Order 
1130.5, Delegation Order--Delegation of the Director's Authorities in 27 
CFR Part 24--Wine.

[[Page 524]]

    Artificially carbonated wine. Effervescent wine artificially charged 
with carbon dioxide and containing more than 0.392 grams of carbon 
dioxide per 100 milliliters.
    Bonded wine cellar. Premises established under the provisions of 
this part. For the purposes of this part a wine premises designated a 
bonded winery is also a bonded wine cellar.
    Bonded wine premises. Premises established under the provisions of 
this part on which operations in untaxpaid wine are authorized to be 
conducted.
    Bonded wine warehouse. Bonded warehouse facilities established under 
the provisions of this part on wine premises by a warehouse company or 
other person for the storage of wine and allied products for credit 
purposes.
    Bonded winery. Premises established under the provisions of this 
part on which wine production operations are conducted and other 
authorized operations may be conducted.
    Bottle. A container four liters or less in capacity, regardless of 
the material from which it is made, used to store wine or to remove wine 
from the wine premises.
    Bottler. A proprietor of wine premises established under the 
provisions of this part who fills wine into a bottle.
    Brix. The quantity of dissolved solids expressed as grams of sucrose 
in 100 grams of solution at 60 degrees F. (20 degrees C.) (Percent by 
weight of sugar).
    Bulk container. Any container larger than 60 liters.
    Business day. Any day, other than Saturday, Sunday, or a legal 
holiday. (The term ``legal holiday'' includes all holidays in the 
District of Columbia and statewide holidays in a particular State in 
which a claim, report, or return, as the case may be, is required to be 
filed, or the act is required to be performed.)
    Calendar year. The period which begins January 1 and ends on the 
following December 31.
    Case. Two or more bottles, or one or more containers larger than 
four liters, enclosed in a box or fastened together by some other 
method.
    Chaptalization (Brix adjustment). The addition of sugar or 
concentrated juice of the same kind of fruit to juice before or during 
fermentation to develop alcohol by fermentation.
    Cider. See definitions for hard cider and tax exempt cider. For a 
description of an additional product which may be called cider, see 
Sec. 4.21(e)(5) of this chapter.
    Concentrate plant. An establishment qualified under part 18 of this 
chapter for the production of volatile fruit-flavor concentrate.
    Container. A receptacle, regardless of the material from which it is 
made, used to store wine or to remove wine from wine premises. (Also see 
the definition of bulk container for containers larger than 60 liters).
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms 
(ATF), the Department of the Treasury, Washington, DC.
    Director of the service center. A director of an internal revenue 
service center.
    Distilled spirits plant. An establishment qualified under part 19 of 
this chapter (excluding alcohol fuel plants) for producing, warehousing, 
or processing of distilled spirits (including denatured spirits), or 
manufacturing of articles.
    Distilling material. Any fermented or other alcoholic substance 
capable of, or intended for use in, the original distillation or other 
original processing of spirits.
    District director. A district director of internal revenue.
    Effervescent wine. A wine containing more than 0.392 grams of carbon 
dioxide per 100 milliliters.
    Electronic fund transfer (EFT). Any transfer of funds effected by a 
proprietor's financial institution, either directly or through a 
correspondent banking relationship, via the Federal Reserve 
Communications System (FRCS) or Fedwire to the Treasury Account at the 
Federal Reserve Bank.
    Executed under penalties of perjury. Signed with the prescribed 
declaration under the penalties of perjury as provided on or with 
respect to the return, claim, form, or other document or, where no form 
of declaration is prescribed, with the declaration: ``I declare under 
the penalties of perjury

[[Page 525]]

that this ---------- (insert type of document such as statement, report, 
certificate, application, claim, or other document), including the 
documents submitted in support thereof, has been examined by me and, to 
the best of my knowledge and belief, is true, correct, and complete.''
    Export or exportation. A severance of goods from the mass of things 
belonging to the United States with the intention of uniting them to the 
mass of things belonging to some foreign country and will include 
shipments to any possession of the United States. For the purposes of 
this part, shipments to the Commonwealth of Puerto Rico and to the 
territories of the Virgin Islands, American Samoa, and Guam will also be 
treated as exportations.
    Fiduciary. A guardian, trustee, executor, receiver, administrator, 
conservator, or any person acting in any fiduciary capacity for any 
person.
    Financial institution. A bank or other financial institution, 
whether or not a member of the Federal Reserve System, which has access 
to the Federal Reserve Communications System (FRCS) or Fedwire. The 
``FRCS'' or ``Fedwire'' is a communications network that allows Federal 
Reserve System member financial institutions to effect a transfer of 
funds for their customers (or other financial institutions) to the 
Treasury account at the Federal Reserve Bank.
    Fold. The ratio of the volume of the fruit must or juice to the 
volume of the volatile fruit-flavor concentrate produced from the fruit 
must or juice; for example, one gallon of volatile fruit-flavor 
concentrate of 100-fold would be the product from 100 gallons of fruit 
must or juice.
    Foreign wine. Wine produced outside the United States.
    Formula wine. Special natural wine, agricultural wine, and other 
than standard wine (except for distilling material and vinegar stock) 
produced on bonded wine premises under an approved formula.
    Fruit wine. Wine made from the juice of sound, ripe fruit (other 
than grapes). Fruit wine also includes wine made from berries or wine 
made from a combination of grapes and other fruit (including berries).
    Gallon or wine gallon. A United States gallon of liquid measure 
equivalent to the volume of 231 cubic inches.
    Grams per liter. For the purposes of this part, the unit of measure 
equivalent to the ``parts per thousand'' unit of measure prescribed in 
the Internal Revenue Code of 1986, as amended.
    Grape wine. Wine made from the juice of sound, ripe grapes.
    Hard cider. Still wine derived primarily from apples or apple 
concentrate and water (apple juice, or the equivalent amount of 
concentrate reconstituted to the original brix of the juice prior to 
concentration, must represent more than 50 percent of the volume of the 
finished product) containing no other fruit product nor any artificial 
product which imparts a fruit flavor other than apple; containing at 
least one-half of 1 percent and less than 7 percent alcohol by volume; 
having the taste, aroma, and characteristics generally attributed to 
hard cider; and sold or offered for sale as hard cider.
    Heavy bodied blending wine. Wine made from fruit without added 
sugar, with or without added wine spirits, and conforming to the 
definition of natural wine in all respects except as to maximum total 
solids content.
    High-proof concentrate. A volatile fruit-flavor concentrate 
(essence) that has an alcohol content of more than 24 percent by volume 
and is unfit for beverage use (nonpotable) because of its natural 
constituents, i.e., without the addition of other substances.
    In bond. When used with respect to wine or spirits, ``in bond'' 
refers to wine or spirits possessed under bond to secure the payment of 
the taxes imposed by 26 U.S.C. Chapter 51, and on which such taxes have 
not been determined. The term includes any wine or spirits on the bonded 
wine premises or a distilled spirits plant, or in transit between bonded 
premises (including in the case of wine, bonded wine premises). 
Additionally, the term refers to wine withdrawn without payment of tax 
under 26 U.S.C. 5362 and to spirits withdrawn without payment of tax 
under 26 U.S.C. 5214 (a)(5) or (a)(13) with respect to which relief from 
liability has not yet occurred.
    Invert sugar syrup. A substantially colorless solution of invert 
sugar which

[[Page 526]]

has been prepared by recognized methods of inversion from pure dry sugar 
and contains not less than 60 percent sugar by weight (60 degrees Brix).
    Juice. The unfermented juice (concentrated or unconcentrated) of 
grapes, other fruit (including berries) and authorized agricultural 
products exclusive of pulp, skins, or seeds.
    Kind. Kind means the class and type of wine prescribed in this part 
and in 27 CFR part 4.
    Lees. The settlings of wine.
    Liquid sugar. A substantially colorless refined sugar and water 
solution containing not less than the equivalent of 60 percent pure dry 
sugar by weight (60 degrees Brix).
    Liter. A metric unit of capacity equal to 1,000 cubic centimeters at 
20 degrees C. or 33.814 United States fluid ounces at 68 degrees F. of 
alcoholic beverage.
    Lot. Wine of the same type. When used with reference to a ``lot of 
wine bottled'', lot means the same type of wine bottled or packed on the 
same date into containers.
    Must. Unfermented juice or any mixture of juice, pulp, skins, and 
seeds prepared from grapes or other fruit (including berries).
    Natural wine. The product of the juice or must of sound, ripe grapes 
or other sound, ripe fruit (including berries) made with any cellar 
treatment authorized by subparts F and L of this part and containing not 
more than 21 percent by weight (21 degrees Brix dealcoholized wine) of 
total solids.
    Nonbeverage wine. Wine, or wine products made from wine, rendered 
unfit for beverage use in accordance with Sec. 24.215.
    Own production. When used with reference to wine in a bonded winery, 
the term means wine produced by fermentation in the same bonded winery, 
whether or not produced by a predecessor in interest at the bonded 
winery. The term includes wine produced by fermentation in bonded 
wineries owned or controlled by the same or affiliated persons or firms 
when located within the same State.
    Packer. A proprietor of wine premises established under the 
provisions of this part who fills wine into a container larger than four 
liters.
    Person. An individual, trust, estate, partnership, association, 
company, or corporation. When used in connection with penalties, 
seizures, and forfeitures, the term includes an officer or employee of a 
corporation or a member or employee of a partnership, who as an officer, 
employee or member, is under a duty to perform the act in respect of 
which the violation occurs.
    Proof. The ethyl alcohol content of a liquid at 60 degrees 
Fahrenheit, stated as twice the percent of ethyl alcohol by volume.
    Proof gallon. A United States 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.
    Proprietor. The person qualified under this part to operate a wine 
premises, and includes the term ``winemaker'' when the context so 
requires.
    Pure dry sugar. Refined sugar 95 percent or more by weight dry, 
having a dextrose equivalent of not less than 95 percent on a dry basis, 
and produced from cane, beets, or fruit, or from grain or other sources 
of starch.
    Reconditioning. The conduct of operations, after original bottling 
or packing, to restore wine to a merchantable condition. The term 
includes relabeling or recasing operations.
    Same kind of fruit. In the case of grapes, all of the species and 
varieties of grapes. In the case of fruits other than grapes, this term 
includes all of the several species and varieties of any given kind; 
except that this will not preclude a more precise identification of the 
composition of the product for the purpose of its designation.
    Secretary. The Secretary of the Treasury or the Secretary's 
designated delegate.
    Sparkling wine or champagne. An effervescent wine containing more 
than 0.392 gram of carbon dioxide per 100 milliliters of wine resulting 
solely from the secondary fermentation of the wine within a closed 
container.
    Special natural wine. A product produced from a base of natural wine 
(including heavy bodied blending wine) to which natural flavorings are 
added, and

[[Page 527]]

made pursuant to an approved formula in accordance with subpart H of 
this part.
    Specially sweetened natural wine. A product made with a base of 
natural wine and having a total solids content in excess of 17 percent 
by weight (17 degrees Brix dealcoholized wine) and an alcohol content of 
not more than 14 percent by volume.
    Spirits. That substance known as ethyl alcohol, ethanol, or spirits 
of wine in any form (including all dilutions or mixtures thereof, from 
whatever source or by whatever process produced), but not denatured 
spirits unless specifically stated.
    Standard wine. Natural wine, specially sweetened natural wine, 
special natural wine, and standard agricultural wine, produced in 
accordance with subparts F, H, and I of this part.
    Still wine. Wine containing not more than 0.392 gram of carbon 
dioxide per 100 milliliters.
    Sugar. Pure dry sugar, liquid sugar, and invert sugar syrup.
    Sweetening. The addition of juice, concentrated juice or sugar to 
wine after the completion of fermentation and before taxpayment.
    Tax exempt cider. Cider produced in accordance with Sec. 24.76
    Tax year. The period from July 1 of one calendar year through June 
30 of the following year.
    Taxpaid wine. Wine on which the tax imposed by law has been 
determined, regardless of whether the tax has actually been paid or the 
payment of tax has been deferred.
    Taxpaid wine bottling house. Premises established under the 
provisions of this part primarily for bottling or packing taxpaid wine.
    Taxpaid wine premises. Premises established under the provisions of 
this part on which taxpaid wine operations other than bottling are 
authorized to be conducted.
    This chapter. Title 27, Code of Federal Regulations, chapter I (27 
CFR chapter I).
    Total solids. The degrees Brix of unfermented juice or dealcoholized 
wine.
    Treasury Account. The Department of Treasury's General Account at 
the Federal Reserve Bank of New York.
    U.S.C. The United States Code.
    United States wine. Wine produced on bonded wine premises in the 
United States.
    Unmerchantable wine. Wine which has been taxpaid, removed from 
bonded wine premises, and subsequently returned to a bonded wine 
premises under the provisions of Sec. 24.295 for the purpose of 
reconditioning, reformulation or destruction.
    Vinegar. A wine or wine product not for beverage use produced in 
accordance with the provisions of this part and having not less than 4.0 
grams (4.0 percent) of volatile acidity (calculated as acetic acid and 
exclusive of sulfur dioxide) per 100 milliliters of wine.
    Volatile fruit-flavor concentrate. Any concentrate produced by any 
process which includes evaporations from any fruit mash or juice.
    Wine. When used without qualification, the term includes every kind 
(class and type) of product produced on bonded wine premises from 
grapes, other fruit (including berries), or other suitable agricultural 
products and containing not more than 24 percent of alcohol by volume. 
The term includes all imitation, other than standard, or artificial wine 
and compounds sold as wine. A wine product containing less than one-half 
of one percent alcohol by volume is not taxable as wine when removed 
from the bonded wine premises.
    Wine premises. Premises established under the provisions of this 
part on which wine operations or other operations are authorized to be 
conducted.
    Wine spirits. Brandy or wine spirits authorized under 26 U.S.C. 5373 
for use in wine production.

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31077, July 9, 1991; T.D. ATF-398, 63 FR 44783, Aug. 21, 1998; 
T.D. ATF-409, 64 FR 13683, Mar. 22, 1999]



         Subpart C--Administrative and Miscellaneous Provisions

                               Authorities



Sec. 24.19  Delegations of the Director.

    Most of the regulatory authorities of the Director contained in this 
Part 24 are delegated to appropriate ATF officers. These ATF officers 
are specified in ATF Order 1130.5, Delegation Order--

[[Page 528]]

Delegation of the Director's Authorities in 27 CFR Part 24--Wine. ATF 
delegation orders, such as ATF Order 1130.5, are available to any 
interested person by mailing a request to the ATF Distribution Center, 
P.O. Box 5950, Springfield, Virginia 22150-5190, or by accessing the ATF 
web site

(http://www.atf.treas.gov/).

[T.D. ATF-409, 64 FR 13683, Mar. 22, 1999]



Sec. 24.20  Forms prescribed.

    (a) The appropriate ATF officer is authorized to prescribe all forms 
required by this part. All of the information called for in each form 
will be furnished as indicated by the headings on the form and the 
instructions on or pertaining to the form and as required by this part. 
The form will be filed in accordance with the instructions for the form.
    (b) Forms may be requested from the ATF Distribution Center, P.O. 
Box 5950, Springfield, Virginia 22150-5190, or by accessing the ATF web 
site (http://www.atf.treas.gov/). (Sec. 201, Pub. L. 85-859, 72 Stat. 
1381, as amended, 1395, as amended (26 U.S.C. 5367, 5555))

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. 372, 61 FR 
20724, May 8, 1996; T.D. ATF-409, 64 FR 13683, Mar. 22, 1999]



Sec. 24.21  Modified forms.

    (a) General. The appropriate ATF officer may approve the use of a 
modified form in lieu of the prescribed form required by this part, when 
in the judgment of the appropriate ATF officer:
    (1) Good cause has been shown for the use of the modified form and
    (2) The use of the modified form will not result in a net increase 
in cost to the Government or hinder the effective administration of this 
part.

Except to adapt tax returns for use with data processing equipment, no 
proposal for modification of a prescribed form relating to 
qualification, to the giving of any bond, or to the assessment, payment, 
or collection of tax will be approved under this section.
    (b) Application. The proprietor who desires to modify a prescribed 
form shall submit a written application to the appropriate ATF officer. 
The application will state the reasons a modified form is necessary and 
be accompanied by a copy of the proposed form with typical entries.
    (c) Conditions. A modified form may not be used until the 
application has been approved by the appropriate ATF officer. 
Authorization for the use of a modified form is conditioned on 
compliance with the procedures, conditions, and limitations specified in 
the approval of the application. The use of a modified form does not 
relieve the proprietor from any requirement of this part. Authority for 
use of a modified form may be withdrawn whenever in the judgment of the 
appropriate ATF officer the effective administration of this part is 
hindered by the continuation of the authority. (Sec. 201, Pub. L. 85-
859, 72 Stat. 1381, as amended, 1395, as amended (26 U.S.C. 5367, 5555))

(Approved by the Office of Management and Budget under control number 
1512-0292)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.22  Alternate method or procedure.

    (a) General. The proprietor, on specific approval of the appropriate 
ATF officer as provided in this section, may use an alternate method or 
procedure in lieu of a method or procedure specifically prescribed in 
this part. As used in this section, an alternate method or procedure 
also includes alternate construction or equipment. No alternate method 
or procedure relating to the giving of any bond or to the assessment, 
payment, or collection of tax, will be authorized under this section. 
The appropriate ATF officer may approve an alternate method or 
procedure, subject to stated conditions, when in the judgment of the 
appropriate ATF officer:
    (1) Good cause has been shown for the use of the alternate method or 
procedure;
    (2) The alternate method or procedure is within the purpose of, and 
consistent with the effect intended by, the specifically prescribed 
method or procedure, and affords equivalent security to the revenue; and
    (3) The alternate method or procedure will not be contrary to any 
provision of law, will not result in an increase in cost to the 
Government, and

[[Page 529]]

will not hinder the effective administration of this part.
    (b) Application. The proprietor who desires to employ an alternate 
method or procedure shall submit a written application to the 
appropriate ATF officer. The application will specifically describe the 
proposed alternate method or procedure, and will set forth the reasons 
therefor. Alternate methods or procedures will not be employed until the 
application is approved by the appropriate ATF officer.
    (c) Conditions. The proprietor shall, during the period of 
authorization for an alternate method or procedure, comply with the 
terms of the approved application. Authorization for any alternate 
method or procedure may be withdrawn whenever in the judgment of the 
appropriate ATF officer the revenue is jeopardized or the effective 
administration of this part is hindered by the continuation of the 
authorization. (Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 
U.S.C. 5556))

(Approved by the Office of Management and Budget under control number 
1512-0292)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, 13684, Mar. 22, 1999]



Sec. 24.25  Emergency variations from requirements.

    (a) General. The appropriate ATF officer may approve construction, 
equipment, and methods of operation other than as specified in this 
part, when in the judgment of such officer an emergency exists, the 
proposed variations from the specified requirements are necessary, and 
the proposed variations:
    (1) Will afford the security and protection to the revenue intended 
by the prescribed specifications;
    (2) Will not hinder the effective administration of this part; and
    (3) Will not be contrary to any provisions of law.
    (b) Application. The proprietor must submit a written application to 
the appropriate ATF officer within 24 hours of any temporary approval 
granted under paragraph (c) of this section, which describes the 
proposed variation, and sets forth the reasons therefor.
    (c) Temporary approval. The proprietor who desires to employ an 
emergency variation from requirements must contact the appropriate ATF 
officer and request temporary approval until the written application, 
required by paragraph (b) of this section, is acted upon. The 
appropriate ATF officer will be a subordinate of the ATF officer 
designated in paragraph (a) of this section. Where the emergency 
threatens life or property, the proprietor may take immediate action to 
correct the situation without prior notification; however, the 
proprietor must promptly contact the appropriate ATF officer and file 
with that officer a report concerning the emergency and the action taken 
to correct the situation.
    (d) Conditions. The proprietor must, during the period of variation 
from requirements granted under this section, comply with the terms of 
the approved application. A failure to comply in good faith with any 
procedures, conditions, and limitations will automatically terminate the 
authority for a variation. Upon termination of the variation, the 
proprietor must fully comply with requirements of regulations for which 
the variation was authorized. Authority for any variation may be 
withdrawn whenever in the judgment of the appropriate ATF officer the 
revenue is jeopardized or the effective administration of this part is 
hindered by the continuation of the variation.

[T.D. ATF-409, 64 FR 13684, Mar. 22, 1999]



Sec. 24.26  Authority to approve.

    The appropriate ATF officer is authorized to approve, except as 
otherwise provided in this part, all applications, bonds, consents of 
surety, qualifying documents, claims, and any other documents required 
by or filed under this part, whether for original establishment, for 
changes subsequent to establishment, for discontinuance of business, for 
remission, abatement, credit, or refund of tax, or for any other 
purpose. (Sec. 201, Pub. L. 85-859, 72 Stat. 1378, as amended (26 U.S.C. 
5351))

(Approved by the Office of Management and Budget under control number 
1512-0292)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]

[[Page 530]]



Sec. 24.27  Segregation of operations.

    The appropriate ATF officer may require the proprietor to segregate 
operations within any wine premises established under this part, by 
partitions or otherwise, to the extent deemed necessary to prevent 
jeopardy to the revenue, to prevent confusion between operations, to 
prevent substitution with respect to the several methods of producing 
effervescent wine, and to prevent the commingling of standard wine with 
other than standard wine. (Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as 
amended (26 U.S.C. 5365))

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.28  Installation of meters, tanks, and other apparatus.

    The appropriate ATF officer may require the proprietor to install 
meters, tanks, pipes, or any other apparatus for the purpose of 
protecting the revenue. Any proprietor refusing or neglecting to install 
a required apparatus will not be permitted to conduct business. (Sec. 
201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 U.S.C. 5552))

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.29  Claims.

    The appropriate ATF officer may require the proprietor or other 
person liable for the tax on wine or spirits to file a claim and to 
submit evidence of loss in any case where wine or spirits are lost or 
destroyed.(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended, 1381, as 
amended (26 U.S.C. 5008, 5043, 5370))

(Approved by the Office of Management and Budget under control number 
1512-0492)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.30  Supervision.

    The appropriate ATF officer may require that operations on wine 
premises be supervised by any number of appropriate ATF officers 
necessary for the protection of the revenue or for the enforcement of 26 
U.S.C. chapter 51 and applicable regulations. (Sec. 201, Pub. L. 85-859, 
72 Stat. 1381, as amended, 1395, as amended (26 U.S.C. 5366, 5553))

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, 13684, Mar. 22, 1999]



Sec. 24.31  Submission of forms and reports.

    The appropriate ATF officer may require the proprietor to submit to 
an appropriate ATF officer copies of prescribed transaction forms, 
records, reports, or source records used to prepare records, reports or 
tax returns. (Sec. 201, Pub. L. 85-859, 72 Stat. 1396, as amended (26 
U.S.C. 5555))

(Approved by the Office of Management and Budget under control number 
1512-0492)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, 13684, Mar. 22, 1999]



Sec. 24.32  Records.

    The appropriate ATF officer may require the proprietor to maintain 
any record required by this part in a prescribed format or arrangement 
or otherwise change the method of recordkeeping in any case where the 
required information is not clearly or accurately reflected. (Sec. 201, 
Pub. L. 85-859, 72 Stat. 1381, as amended, 1395, as amended (26 U.S.C. 
5367, 5555))

(Approved by the Office of Management and Budget under control number 
1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.35  Right of entry and examination.

    Under 26 U.S.C. 7601, 7602, and 7606, appropriate ATF officers have 
authority to inspect during normal business hours the records, stocks, 
and wine premises (including any portion designated as a bonded wine 
warehouse) of the proprietor to determine compliance with all provisions 
of the internal revenue laws and regulations. In addition, for the 
purposes prescribed in 27 CFR 70.22, appropriate ATF officers may 
examine financial records, books of account, and any other books, 
papers, records, and data relevant to an inquiry. Any denial or 
interference with any inspection by the proprietor, or by agents or 
employees of the proprietor,

[[Page 531]]

is a violation of 26 U.S.C. 7342 and may be subject to an appropriate 
penalty. (August 16, 1954, Ch. 736, 68A Stat. 872, as amended, 901, as 
amended, 903, as amended (26 U.S.C. 5560, 7342, 7601, 7602, 7606))

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13684, Mar. 22, 1999]



Sec. 24.36  Instruments and measuring devices.

    All instruments and measuring devices required by this part to be 
furnished by the proprietor for the purpose of testing and measuring 
wine, spirits, volatile fruit-flavor concentrate, and materials will be 
maintained by the proprietor in accurate and readily usable condition. 
The appropriate ATF officer may disapprove the use of any equipment or 
means of measurement found to be unsuitable for the intended purpose, 
inaccurate, or not in accordance with regulations. In this case, the 
proprietor shall promptly provide suitable and accurate equipment or 
measuring devices. (Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended, 
1381, as amended (26 U.S.C. 5357, 5366, 5368, 5552))

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13684, Mar. 22, 1999]



Sec. 24.37  Samples for the United States.

    Appropriate ATF officers are authorized to take samples of wine, 
spirits, volatile fruit-flavor concentrate, or any other material which 
may be added to wine products, for analysis, testing, etc., free of tax 
to determine compliance with the provisions of law and regulation. (Sec. 
201, Pub. L. 85-859, 72 Stat. 1380, as amended, 1382, as amended, 1392, 
as amended, 1396, as amended (26 U.S.C. 5362, 5373, 5511, 7510))

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13684, Mar. 22, 1999]

                        Facilities and Assistance



Sec. 24.40  Gauging and measuring.

    Appropriate ATF officers may require the proprietor to furnish the 
necessary facilities and assistance to gauge or measure wine or spirits 
in any container or to examine any apparatus, equipment, container, or 
material on wine premises. (Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as 
amended, 1381, as amended, 1395, as amended, 1396, as amended (26 U.S.C. 
5357, 5366, 5368, 5555))

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13684, Mar. 22, 1999]



Sec. 24.41  Office facilities.

    The appropriate ATF officer may require the proprietor to furnish 
temporarily a suitable work area, desk and equipment necessary for the 
use of appropriate ATF officers in performing Government duties whether 
or not such office space is located at the specific premises where 
regulated operations occur or at corporate business offices where no 
regulated activity occurs. Such office facilities will be subject to 
approval by the appropriate ATF officer.

[T.D. ATF-409, 64 FR 13684, Mar. 22, 1999]

                     Employer Identification Number



Sec. 24.45  Use on returns.

    The employer identification number (as defined at 26 CFR 301.7701-
12) of the taxpayer who has been assigned such a number will be shown on 
each return filed pursuant to the provisions of this part, including 
amended returns. Failure of the taxpayer to include the employer 
identification number on any return filed pursuant to the provisions of 
this part may result in the assertion and collection of the penalty 
prescribed in 27 CFR 70.113 of this chapter. (Pub. L. 87-397, 75 Stat. 
828, as amended (26 U.S.C. 6109, 6676))

(Approved by the Office of Management and Budget under control number 
1512-0492)

[T.D ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-301, 55 
FR 47605, Nov. 14, 1990]



Sec. 24.46  Application.

    (a) An employer identification number will be assigned pursuant to 
application on Internal Revenue Service (IRS) Form SS-4 filed by the 
taxpayer. IRS Form SS-4 may be obtained from the director of the service 
center or from any district director.

[[Page 532]]

    (b) An application on IRS Form SS-4 will be made by the taxpayer 
who, prior to filing the first return, has neither secured nor made 
application for an employer identification number. An application on IRS 
Form SS-4 will be filed on or before the seventh day after the date on 
which the first return is filed.
    (c) Each taxpayer shall make application for and be assigned only 
one employer identification number, regardless of the number of places 
of business for which the taxpayer is required to file a tax return 
under the provisions of this part. (Pub. L. 87-397, 75 Stat. 828, as 
amended (26 U.S.C. 6109))

(Approved by the Office of Management and Budget under control number 
1512-0492)



Sec. 24.47  Execution of IRS Form SS-4.

    (a) Preparation. The application on IRS Form SS-4, together with any 
supplementary statement, will be prepared in accordance with the form 
instructions and applicable regulations. The application will be filed 
with the director of the internal revenue service center as instructed 
on the Form SS-4.
    (b) Signature. The application will be signed by:
    (1) The individual, if the taxpayer is an individual; or,
    (2) The president, vice president, other principal officer, or other 
person authorized to sign, if the taxpayer is a corporation; or,
    (3) A responsible and duly authorized member or officer having 
knowledge of its affairs, if the taxpayer is a partnership or other 
unincorporated organization; or,
    (4) The fiduciary, if the taxpayer is a trust or estate. (Pub. L. 
87-397, 75 Stat. 828, as amended (26 U.S.C. 6109))

(Approved by the Office of Management and Budget under control number 
1512-0492)

                      Special (Occupational) Taxes



Sec. 24.50  Payment of special (occupational) tax.

    (a) General. Every proprietor of a bonded wine premises or a taxpaid 
wine bottling house shall pay a special (occupational) tax at the rate 
specified by Sec. 24.51. The tax will be paid on or before the date of 
commencing business as a bonded wine premises or taxpaid wine bottling 
house, and thereafter every year on or before July 1. On commencing 
business, the tax will be computed from the first day of the month in 
which the liability is incurred, through the following June 30. 
Thereafter, the tax will be computed for the entire year (July 1 through 
June 30).
    (b) Each place of business taxable. Proprietors of a bonded wine 
premises or a taxpaid wine bottling house incur special (occupational) 
tax at each place of business in which an occupation subject to special 
(occupational) tax is conducted. A place of business means the entire 
office, plant or area of the business in any one location under the same 
proprietorship. Passageways, streets, highways, rail crossings, 
waterways, or partitions dividing the premises are not sufficient 
separation to require additional special (occupational) tax, if the 
divisions of the premises are otherwise contiguous. A proprietor of a 
bonded wine premises or a taxpaid wine bottling house does not incur 
additional special (occupational) tax liability for sales of wine made 
at a location other than on wine premises described in the application, 
ATF F 5120.25, if the location where the sales are made is contiguous to 
the bonded wine premises or the taxpaid wine bottling house in the 
manner described in this paragraph. (26 U.S.C. 5081, 5142, 5143)

(Approved by the Office of Management and Budget under control numbers 
1512-0472 and 1512-0492)



Sec. 24.51  Rates of special (occupational) tax.

    (a) General. Title 26 U.S.C. 5081(a) (2), (3), and (4) impose a 
special (occupational) tax of $1,000 per year on every proprietor of a 
bonded wine premises or a taxpaid wine bottling house.
    (b) Reduced rate for small proprietors. Title 26 U.S.C. 5081(b) 
provides for a reduced rate of $500 per year with respect to any 
proprietor of a bonded wine premises or a taxpaid wine bottling house 
whose gross receipts (for the most recent taxable year ending before the 
first day of the taxable period to which the special (occupational) tax 
imposed by Sec. 24.50 relates) are less than $500,000. The ``taxable 
year'' to be used for determining gross receipts is the

[[Page 533]]

taxpayer's income tax year. All gross receipts of the taxpayer will be 
included, not just the gross receipts of the business subject to special 
(occupational) tax. Proprietors of new businesses that have not yet 
begun a taxable year, as well as proprietors of existing businesses that 
have not yet ended a taxable year, who commence a new activity subject 
to special (occupational) tax, qualify for the reduced special 
(occupational) tax rate, unless the business is a member of a 
``controlled group''; in that case, the rules of paragraph (c) of this 
section apply.
    (c) Controlled group. All persons treated as one taxpayer under 26 
U.S.C. 5061(e)(3) shall be treated as one taxpayer for the purpose of 
determining gross receipts under paragraph (b) of this section. 
``Controlled group'' means a controlled group of corporations, as 
defined in 26 U.S.C. 1563 and implementing regulations in 26 CFR 1.1563-
1 through 1.1563-4, except that the words ``at least 80 percent'' is 
replaced by the words ``more than 50 percent'' in each place they appear 
in subsection (a) of 26 U.S.C. 1563, as well as in the implementing 
regulations. Also, the rules for a ``controlled group of corporations'' 
apply in similar fashion to groups which include partnerships and/or 
sole proprietorships. If one entity maintains more than 50% control over 
a group consisting of corporations and one, or more, partnerships and/or 
sole proprietorships, all of the members of the controlled group are one 
taxpayer for the purpose of this section.
    (d) Short taxable year. Gross receipts for any taxable year of less 
than 12 months will be annualized by multiplying the gross receipts for 
the short period by 12 and dividing the result by the number of months 
in the short period, as required by 26 U.S.C. 448(c)(3).
    (e) Returns and allowances. Gross receipts for any taxable year will 
be reduced by returns and allowances made during such year under 26 
U.S.C. 448(c)(3). (26 U.S.C. 448, 5061, 5081)

(Approved by the Office of Management and Budget under control numbers 
1512-0472 and 1512-0492)



Sec. 24.52  Exemption from special (occupational) tax.

    (a) General. The proprietor of a bonded wine premises or a taxpaid 
wine bottling house will not be required to pay special (occupational) 
tax as a wholesale dealer or retail dealer on account of the sale, at 
the bonded wine premises or the taxpaid wine bottling house, or at the 
principal business office as designated in writing to the appropriate 
ATF officer, of wine which, at the time of sale, is stored at the bonded 
wine premises or taxpaid wine bottling house, or has been removed from 
the bonded wine premises to a taxpaid wine premises, the operations of 
which are integrated with the operations of the bonded wine premises and 
which is adjacent to or in the immediate vicinity of the bonded wine 
premises. The proprietor may not have more than one place of sale, as to 
each bonded wine premises or taxpaid wine bottling house, that will be 
exempt from special (occupational) tax under this section.
    (b) Place of exemption. Unless the proprietor has claimed the 
exemption elsewhere, it will be presumed that the exemption is claimed 
at the bonded wine premises or taxpaid wine bottling house where the 
wine or spirits are stored. If exemption from payment of special 
(occupational) tax is to be claimed for sales at the principal business 
office rather than for sales at the bonded wine premises or taxpaid wine 
bottling house, the proprietor shall state such intention in the 
approved application or file a notice in letter form of this intention 
with the appropriate ATF officer. Where the exemption is claimed for a 
place other than the bonded wine premises or taxpaid wine bottling 
house, the special (occupational) tax will be paid for any sales made at 
the bonded wine premises or taxpaid wine bottling house.
    (c) Exception. Where the proprietor of a bonded wine premises or a 
taxpaid wine bottling house has not paid special (occupational) tax as a 
wholesale dealer and consummates sales of wine to another dealer at the 
purchaser's place of business through a delivery route sales personnel 
or otherwise, the proprietor of the bonded wine premises or taxpaid wine 
bottling house shall be

[[Page 534]]

required to pay special (occupational) tax as a wholesale dealer.
    (d) Wholesaler's special (occupational) tax. A wholesale dealer in 
liquors who has paid the appropriate special (occupational) tax as 
provided in part 194 of this chapter will not again be required to pay 
special (occupational) tax as a wholesale dealer because of sales of 
wine to wholesale or retail dealers in liquors, or to limited retail 
dealers, at the purchaser's place of business. (Sec. 201, Pub. L. 85-
859, 72 Stat. 1340, as amended (26 U.S.C. 5111, 5113, 5142))

(Approved by the Office of Management and Budget under control numbers 
1512-0472 and 1512-0492)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, 13684, Mar. 22, 1999]



Sec. 24.53  Special (occupational) tax returns.

    (a) General. Special (occupational) tax is paid by filing ATF F 
5630.5, Special Tax Registration and Return, with payment of tax, in 
accordance with the instructions on the form.
    (b) Preparation of ATF F 5630.5. Unless correctly preprinted on a 
renewal form, all of the information called for on F 5630.5 shall be 
provided, including:
    (1) The true name of the taxpayer.
    (2) The trade name(s) (if any) of the business(es) subject to 
special (occupational) tax.
    (3) The employer identification number (see Sec. 24.45).
    (4) The exact location of the place of business, by name and number 
of building or street, or if these do not exist, by some description in 
addition to the post office address. In the case of one return for two 
or more locations, the address to be shown will be the taxpayer's 
principal place of business (or principal office, in case of a corporate 
taxpayer).
    (5) The class(es) of special (occupational) tax to which the 
taxpayer is subject.
    (6) Ownership and control information: that is, the name, position, 
and residence address of every owner of the business and of every person 
having power to control its management and policies with respect to the 
activity subject to special (occupational) tax. ``Owner of the 
business'' includes every partner, if the taxpayer is a partnership, and 
every person owning 10% or more of its stock, if the taxpayer is a 
corporation. However, the ownership and control information required by 
this paragraph need not be stated if the same information has been 
previously provided to ATF in connection with a permit application, and 
if the information previously provided is still current.
    (c) Multiple locations and/or classes of tax. A taxpayer subject to 
special (occupational) tax for the same period at more than one location 
or for more than one class of tax shall:
    (1) File one special (occupational) tax return, ATF F 5630.5, with 
payment of tax, to cover all such locations and classes of tax; and
    (2) Unless correctly printed on a renewal form, prepare, in 
duplicate, a list identified with the taxpayer's name, address (as shown 
on ATF F 5630.5), employer identification number, and period covered by 
the return. The list will show, by States, the name, address, and tax 
class of each location for which special (occupational) tax is being 
paid. The original of the list will be filed with ATF in accordance with 
instructions on the return, and the copy will be retained at the 
taxpayer's principal place of business (or principal office, in case of 
a corporate taxpayer) for the period specified in Sec. 24.300(d).
    (d) Signing of ATF F 5630.5--(1) Ordinary returns. The return of an 
individual proprietor shall be signed by the individual. The return of a 
partnership shall be signed by a general partner. The return of a 
corporation shall be signed by any corporate officer. In each case, the 
person signing the return shall designate his or her capacity as 
``individual owner,'' ``member of firm,'' or, in the case of a 
corporation, the title of the officer.
    (2) Fiduciaries. Receivers, trustees, assignees, executors, 
administrators, and other legal representatives who continue the 
business of a bankrupt, insolvent, deceased person, etc., shall indicate 
the fiduciary capacity in which they act.
    (3) Agent or attorney-in-fact. If a return is signed by an agent or 
attorney-in-fact, the signature shall be preceded

[[Page 535]]

by the name of the principal and followed by the title of the agent or 
attorney-in-fact. A return signed by a person as agent will not be 
accepted unless there is filed, with the ATF office where the return is 
required to be filed, a power of attorney authorizing the agent to 
perform the act.
    (4) Perjury statement. ATF F 5630.5 will contain or be verified by a 
written declaration that the return has been executed under the 
penalties of perjury. (26 U.S.C. 5142, 6061, 6065, 6151, 7011)

(Approved by the Office of Management and Budget under control numbers 
1512-0472 and 1512-0492)



Sec. 24.54  Special (occupational) tax stamps.

    (a) Issuance of special (occupational) tax stamps. Upon filing a 
properly executed return on ATF F 5630.5, together with the full 
remittance, the taxpayer will be issued an appropriately designated 
special (occupational) tax stamp. If the return covers multiple 
locations, the taxpayer will be issued one appropriately designated 
stamp for each location listed on the attachment required by 
Sec. 24.53(c), but showing, as to name and address, only the name of the 
taxpayer and the address of the taxpayer's principal place of business 
(or principal office in case of a corporate taxpayer).
    (b) Distribution of special (occupational) tax stamps for multiple 
locations. On receipt of the special (occupational) tax stamps, the 
taxpayer shall verify that there is one stamp for each location listed 
on the attachment to ATF F 5630.5. Unless correctly printed on the 
renewal stamp, the taxpayer shall designate one stamp for each location 
and shall type or print on each stamp the address of the business 
conducted at the location for which that stamp is designated. The 
taxpayer shall then forward each stamp to the place of business 
designated on the stamp.
    (c) Examination of special (occupational) tax stamps. All stamps 
denoting payment of special (occupational) tax will be kept available 
for inspection by appropriate ATF officers, at the location for which 
designated, during business hours. (26 U.S.C. 5146, 6806)

(Approved by the Office of Management and Budget under control numbers 
1512-0472 and 1512-0492)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13684, Mar. 22, 1999]



Sec. 24.55  Changes in special (occupational) tax stamps.

    (a) Change in name. If there is a change in the corporate or firm 
name, or in the trade name, as shown on ATF F 5630.5, the proprietor 
shall file an amended special (occupational) tax return as soon as 
practicable after the change covering the new corporate or firm name, or 
trade name. No new special (occupational) tax is required to be paid. 
The proprietor shall attach the special (occupational) tax stamp for 
endorsement of the change in name.
    (b) Change in proprietorship--(1) General. If there is a change in 
the proprietorship of a bonded wine premises or taxpaid wine bottling 
house, the successor shall pay a new special (occupational) tax and 
obtain the required special (occupational) tax stamps.
    (2) Exemption for certain successors. Persons having the right of 
succession provided for in paragraph (c) of this section may carry on 
the business for the remainder of the period for which the special 
(occupational) tax was paid, without paying a new special (occupational) 
tax, if within 30 days after the date on which the successor begins to 
carry on the business, the successor files a special (occupational) tax 
return on ATF F 5630.5 with ATF, which shows the basis of succession. A 
person who is a successor to a business for which special (occupational) 
tax has been paid and who fails to register the succession is liable for 
special (occupational) tax computed from the first day of the calendar 
month in which he or she began to carry on the business.
    (c) Persons having right of succession. Under the conditions 
indicated in paragraph (b)(2) of this section, the right of succession 
will pass to certain persons in the following cases:
    (1) Death. The widowed spouse or child, or executor, administrator, 
or other legal representative of the taxpayer;

[[Page 536]]

    (2) Succession of spouse. A husband or wife succeeding to the 
business of his or her spouse (living);
    (3) Insolvency. A receiver or trustee in bankruptcy, or an assignee 
for benefit of creditors; and
    (4) Withdrawal from firm. The partner or partners remaining after 
death or withdrawal of a member;
    (d) Change in location. If there is a change in location of a 
taxable place of business, the proprietor shall, within 30 days after 
the change, file with ATF an amended special (occupational) tax return 
covering the new location. The proprietor shall attach the special 
(occupational) tax stamp or stamps for endorsement of the change in 
location. No new special (occupational) tax is required to be paid. 
However, if the proprietor does not file the amended return within 30 
days, the proprietor is required to pay a new special (occupational) tax 
and obtain a new special (occupational) tax stamp. (26 U.S.C. 5143, 
7011)

(Approved by the Office of Management and Budget under control numbers 
1512-0472 and 1512-0492)

                               Assessments



Sec. 24.60  General.

    Where the appropriate ATF officer determines by examination of 
records, inventories, or otherwise that the proprietor has incurred 
liability for the tax on wine, distilled spirits, or special 
(occupational) tax, and the proprietor does not pay the tax upon 
notification of the liability, the tax will be assessed. (August 16, 
1954, Ch. 736, 68A Stat. 767, as amended (26 U.S.C. 6201))

(Approved by the Office of Management and Budget under control number 
1512-0492)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.61  Assessment of tax.

    When wine or spirits in bond are lost or destroyed (except wine or 
spirits on which the tax is not collectible by reason of the provisions 
of 26 U.S.C. 5008 or 26 U.S.C. 5370, as applicable) and the proprietor 
or other person liable for the tax on the wine or spirits fails to file 
a claim when required pursuant to Sec. 24.29 or when the claim is 
denied, the tax will be assessed. In any case where wine is produced, 
imported, or received otherwise than as authorized by law, or where wine 
or spirits are removed, possessed, or knowingly used in violation of 
applicable law, or volatile fruit-flavor concentrate is sold, 
transported, or used in violation of law, the tax will be assessed. 
(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended, 1323, as amended, 
1332, as amended, 1335, as amended, 1381, as amended, 1387, as amended, 
1392, as amended (26 U.S.C. 5001, 5008, 5043, 5061, 5370, 5391, 5512))

(Approved by the Office of Management and Budget under control number 
1512-0492)



Sec. 24.62  Notice.

    If an investigation or an examination of records discloses that 
liability for the tax on wine or distilled spirits, or special 
(occupational) tax has been incurred by the proprietor, the appropriate 
ATF officer will notify the proprietor by letter of the basis and the 
amount of the proposed assessment in order to afford the proprietor an 
opportunity to submit a protest, with supporting evidence, within 45 
days, or to request a conference with regard to the tax liability. 
However, if collection of the tax liability may be jeopardized by a 
delay, the appropriate ATF officer may take immediate jeopardy 
assessment action pursuant to 26 U.S.C. 6861. (Sec. 201, Pub. L. 85-859, 
72 Stat. 1323, as amended, 1381, as amended (26 U.S.C. 5008, 5370, 
6862))

(Approved by the Office of Management and Budget under control number 
1512-0492)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]

                                 Claims



Sec. 24.65  Claims for wine or spirits lost or destroyed in bond.

    (a) Claim for remission of tax on spirits. All claims for remission 
of tax required by this part, relating to the loss or destruction of 
spirits in bond, will be filed with the appropriate ATF officer within 
30 days of discovery of the loss. A claim filed under this paragraph 
will set forth the following information:
    (1) The name, registry number, and location of the distilled spirits 
plant which produced the spirits;

[[Page 537]]

    (2) The serial numbers of the containers from which the spirits were 
lost, the quantity lost from each, and the total quantity of spirits 
covered by the claim;
    (3) The total amount of tax for which claim is filed;
    (4) The date of the loss or destruction (or, if not known, the date 
of discovery);
    (5) The nature and cause (if known) of the loss will be stated 
specifically and in sufficient detail to disclose all material facts and 
circumstances surrounding the loss;
    (6) If lost in transit, the name of the carrier and the points 
between which shipped; and
    (7) If lost by theft, evidence establishing that the loss did not 
occur as the result of negligence, connivance, collusion, or fraud on 
the part of the proprietor, owner, consignor, consignee, bailee or 
carrier, or the agents or employees of any of them.
    (b) Claim for allowance of loss on wine. A claim for allowance of 
loss required by this part, relating to the loss or destruction of wine 
in bond, will be filed with the appropriate ATF officer. A claim for 
allowance of loss for wine lost in transit, by fire or other casualty, 
or any other extraordinary or unusual losses, including a loss by theft, 
will be filed immediately. Any other claim for allowance of loss will be 
attached to and submitted with the ATF F 5120.17, Report of Bonded Wine 
Premises Operations, for the reporting period in which the inventory 
required by Sec. 24.313 is taken or, in the case of discontinuance of 
the premises or change in proprietorship, to the final report filed. A 
claim filed under this paragraph will set forth the information required 
by paragraphs (a)(5) to (a)(7) of this section and, in addition, will 
set forth the following information:
    (1) The original volume of wine which sustained the loss, the tax 
class, the quantity of wine lost, and the percentage of wine lost;
    (2) Where the claim covers losses sustained at bonded wine premises 
during the tax year, the claimant shall state:
    (i) The quantities of wine on hand at the beginning of the tax year, 
received in bond during the tax year, and produced during the tax year;
    (ii) Where the percentage of loss is calculated separately by tax 
class, the volume of wine by tax class; and
    (iii) If effervescent wine is produced, the volume of wine produced 
by fermentation in bottles, by artificial carbonation, and by bulk 
processing; and
    (3) Claims covering losses of wine during transit in bond will show 
the volume lost from each container, the serial number, if any, and the 
volume shipped.
    (c) Claim for abatement, credit or refund. A claim for an abatement 
of an assessment under Sec. 24.61, or credit or refund of tax which has 
been paid or determined, will be filed with the appropriate ATF officer 
in accordance with the provisions of this paragraph and the provisions 
of 27 CFR part 70, subpart F. A claim filed under this paragraph with 
respect to spirits, wine, or volatile fruit-flavor concentrate, will set 
forth the applicable information required by paragraphs (a) and (b) of 
this section. In addition, any claim filed under this paragraph will set 
forth the following information:
    (1) The date of the assessment for which abatement is claimed; and
    (2) The name, registry number, and address of the premises where the 
tax was assessed (or name, address, and title of any other person who 
was assessed the tax, if the tax was not assessed against the 
proprietor).
    (d) Indemnification or recompense. A claim filed under paragraph (a) 
or (b) of this section will specify whether the claimant has been or 
will be indemnified or recompensed for the spirits or wine lost and, if 
so, the amount and nature of indemnity or recompense and the actual 
value of the spirits or wine, less the tax.
    (e) Supporting documents. A claim filed under paragraph (a), (b), or 
(c) of this section will be supported by affidavits of persons having 
personal knowledge of the loss or destruction. In addition, if filed for 
tax on wine or spirits lost in transit, the claim will be supported by a 
copy of the carrier's bill of lading. (Sec. 201, Pub. L. 85-859, 72 
Stat. 1323, as amended, 1381, as amended,

[[Page 538]]

1382, as amended (26 U.S.C. 5008, 5370, 5373))

(Approved by the Office of Management and Budget under control numbers 
1512-0216 and 1512-0492)

[T.D. ATF-299, 55 FR 24989, June 19, 1991, as amended by T.D. ATF-338, 
58 FR 19063, Apr. 12, 1993; T.D. ATF-376, 61 FR 31030, June 19, 1996; 
T.D. ATF-409, 64 FR 13683, Mar. 22, 1999]



Sec. 24.66  Claims on wine returned to bond.

    (a) General. A claim for credit or refund, or relief from liability, 
of tax on unmerchantable United States wine returned to bonded wine 
premises will be filed with the appropriate ATF officer within six 
months after the date of the return of the wine to bond. A single claim 
may not be filed under this section for a quantity on which credit or 
refund of tax would be in an amount less than $25. This limitation does 
not apply with respect to any returned wine on which the six month 
period for filing a claim will expire.
    (b) Filing. A claim filed under this section will set forth the 
following information:
    (1) The kind, volume, and tax class of the wine;
    (2) As to each tax class, the amount of tax previously paid or 
determined; and
    (3) The date the wine was returned to bond.
    (c) Indemnification or recompense. A claim filed under this section 
will specify whether the claimant has been or will be indemnified or 
recompensed for the wine returned to bond and if so, the amount and 
nature of indemnity or recompense and the actual value of the wine, less 
the tax. (Sec. 201., Pub. L. 85-859, 72 Stat. 1332, as amended, 1380, as 
amended (26 U.S.C. 5044, 5361, 5371))

(Approved by the Office of Management and Budget under control number 
1512-0492)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.67  Other claims.

    The requirements with respect to a claim for:
    (a) Remission of tax on wine withdrawn without payment of tax under 
the provisions of Sec. 24.292, and lost in transit to the port of 
export, vessel or aircraft, foreign-trade zone, customs bonded 
warehouse, or manufacturing bonded warehouse, as applicable, are 
contained in 27 CFR part 252.
    (b) Refund or credit of any tax imposed on wine or other liquors by 
26 U.S.C. chapter 51, part I, subchapter A, on the grounds that an 
amount of tax was assessed or collected erroneously, illegally, without 
authority, or in any manner wrongfully, or on the grounds that the 
amount was excessive, are contained in 27 CFR part 70 subpart F.
    (c) Payment of an amount equal to the internal revenue tax paid or 
determined and customs duties paid on wines or other liquors previously 
withdrawn, which are lost, rendered unmarketable, or condemned by a duly 
authorized official as a result of
    (1) A major disaster,
    (2) Fire, flood, casualty, or other disaster, or
    (3) Breakage, destruction, or damage (excluding theft) resulting 
from vandalism or malicious mischief, are found in 27 CFR part 70, 
subpart G.

(Approved by the Office of Management and Budget under control number 
1512-0492)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-376, 
61 FR 31030, June 19, 1996]



Sec. 24.68  Insurance coverage.

    The remission, abatement, refund, credit, or other relief, of taxes 
on wine or spirits provided for under this part will be allowed only to 
the extent that the claimant is not indemnified or recompensed for such 
tax by any valid claim of insurance or otherwise. (Sec. 201, Pub. L. 85-
859, 72 Stat. 1382, as amended (26 U.S.C. 5064, 5371))



Sec. 24.69  Filing of claims.

    (a) Claims. All claims filed under this part for abatement, refund, 
credit, or remission of tax will be filed on ATF F 5620.8 (2635). Each 
claim filed under this part will:
    (1) Show the name, address, and title of the claimant;
    (2) Be signed by the claimant or the duly authorized agent of the 
claimant; and
    (3) Be executed under the penalties of perjury.

[[Page 539]]

    (b) Supporting documents. Forms, supporting statements, and any 
other documents required by this part to be submitted with a claim will 
be attached to the claim and be considered a part of the claim. The 
appropriate ATF officer may require the submission of additional 
evidence in support of any claim filed under this part. (Sec. 201, Pub. 
L. 85-859, 72 Stat. 1381, as amended (26 U.S.C. 5064, 5370))

(Approved by the Office of Management and Budget under control number 
1512-0492)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.70  Claims for credit of tax.

    Claims for credit of tax, as provided in this part, may be filed 
after determination of the tax whether or not the tax has been paid. 
Where a claim for credit of tax is filed, the claimant shall, upon 
receipt of notification of allowance of credit from the appropriate ATF 
officer, make an adjusting entry on the next tax return (or returns) to 
the extent necessary to exhaust the credit. The claimant shall also make 
an explanatory statement on each tax return specifically identifying the 
notification of allowance of credit. The claimant may not anticipate 
allowance of a credit or make an adjusting entry in a tax return until 
ATF has acted on the claim. (Sec. 201, Pub. L. 85-859, 72 Stat. 1332, as 
amended, 1335, as amended, 1381, as amended, 1395, as amended (26 U.S.C. 
5043, 5044, 5061, 5370, 5555))

(Approved by the Office of Management and Budget under control number 
1512-0492)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]

                             Tax Exempt Wine



Sec. 24.75  Wine for personal or family use.

    (a) General. Any adult may, without payment of tax, produce wine for 
personal or family use and not for sale.
    (b) Quantity. The aggregate amount of wine that may be produced 
exempt from tax with respect to any household may not exceed:
    (1) 200 gallons per calendar year for a household in which two or 
more adults reside, or
    (2) 100 gallons per calendar year if there is only one adult 
residing in the household.
    (c) Definition of an adult. For the purposes of this section, an 
adult is any individual who is 18 years of age or older. However, if the 
locality in which the household is located has established by law a 
greater minimum age at which wine may be sold to individuals, the term 
``adult'' will mean an individual who has attained that age.
    (d) Proprietors of bonded wine premises. Any adult, defined in 
Sec. 24.75(c), who operates a bonded wine premises as an individual 
owner or in partnership with others, may produce wine and remove it from 
the bonded wine premises free of tax for personal or family use, subject 
to the limitations in Sec. 24.75(b).
    (e) Limitation. This exemption should not in any manner be construed 
as authorizing the production of wine in violation of applicable State 
or local law. Except as provided in Sec. 24.75(d), this exemption does 
not otherwise apply to partnerships, corporations, or associations.
    (f) Removal. Wine produced under this section may be removed from 
the premises where made for personal or family use including use at 
organized affairs, exhibitions or competitions, such as home winemaker's 
contests, tastings or judgings, but may not under any circumstances be 
sold or offered for sale. The proprietor of a bonded wine premises shall 
pay the tax on any wine removed for personal or family use in excess of 
the limitations provided in this section and shall also enter all 
quantities removed for personal or family use on ATF F 5120.17, Report 
of Bonded Wine Premises Operations. (Sec. 201, Pub. L. 85-859, 72 Stat. 
1331, as amended (26 U.S.C. 5042))

(Approved by the Office of Management and Budget under control number 
1512-0216)

[T.D. ATF-299, 55 FR 24989, June 19, 1991, as amended by T.D. ATF-338, 
58 FR 19064, Apr. 12, 1993; T.D. ATF-344, 58 FR 40354, July 28, 1993]



Sec. 24.76  Tax exempt cider.

    Cider, when produced solely from the noneffervescent fermentation of 
apple juice without the use of any preservative method or material, and 
when produced at a place other than a bonded

[[Page 540]]

wine premises and sold or offered for sale as cider, and not as wine or 
as a substitute for wine, is not subject to the tax on wine, or to the 
provisions of this part. (Sec. 201, Pub. L. 85-859, 72 Stat. 1331, as 
amended (26 U.S.C. 5042))



Sec. 24.77  Experimental wine.

    (a) General. Any scientific university, college of learning, or 
institution of scientific research may, without payment of tax, produce, 
receive, blend, treat, and store wine for experimental or research use, 
but not for consumption (other than organoleptic tests) or sale, and may 
receive wine spirits without payment of tax in quantities as may be 
necessary for the production of wine.
    (b) Qualification. An institution that wants to conduct experimental 
wine operations must apply in letter form to the appropriate ATF 
officer. The application will show the name and address of the 
institution, the nature, extent, and purpose of the operations to be 
conducted, describe the operations and equipment and the location at 
which operations will be conducted (including identification of the 
building or buildings, or portions thereof, to be used), and the 
security measures to be provided. If wine spirits are to be used, that 
fact will be stated together with the estimated annual requirements in 
proof gallons. A secure place of storage under lock will be provided for 
such spirits and will be described in the application.The applicant 
must, when required by the appropriate ATF officer, furnish as part of 
the application, additional information that may be necessary to 
determine whether the application should be approved. Operations may not 
begin until authorized by the appropriate ATF officer.
    (c) Procurement of spirits. Where the approved application provides 
for the use of wine spirits in experimental wine operations, such 
spirits may be procured to the extent stated in the approved qualifying 
application. However, an application will be filed with the appropriate 
ATF officer and authorization obtained for each wine spirits 
procurement.
    (d) Records. All approved qualifying documents and applications will 
be retained in the files of the institution and will be exhibited on 
request to appropriate ATF officers. No reports concerning wine or wine 
spirits need be filed unless required by appropriate ATF officer, but 
records appropriate to the experiments to be conducted and records 
documenting the disposition of the wine and wine spirits will be 
retained and will be made available for inspection by appropriate ATF 
officers. If wine spirits are used, the records will show the quantities 
of spirits received and used each day.
    (e) Discontinuance. When an institution discontinues experimental 
wine operations, all remaining wine or wine spirits will be disposed of 
either by destruction or shipment to premises authorized to receive wine 
or wine spirits. A letter application will be filed with the appropriate 
ATF officer and authorization obtained prior to the destruction or 
shipment of the wine or wine spirits. When the authorized destruction or 
shipment has been completed, a letter notification will be sent to the 
appropriate ATF officer. (Sec. 201, Pub. L. 85-859, 72 Stat. 1331, as 
amended (26 U.S.C. 5042))

(Approved by the Office of Management and Budget under control numbers 
1512-0292 and 1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, 13684, Mar. 22, 1999]

                                Formulas



Sec. 24.80  General.

    The proprietor shall, before production, obtain approval of the 
formula and process by which special natural wine, agricultural wine, 
and other than standard wine (except distilling material or vinegar 
stock) are to be made. The formula must be prepared and filed on ATF F 
5120.29, Formula and Process for Wine, in accordance with the 
instructions on the form. A nonbeverage wine formula will show the 
intended use of the finished wine or wine product. Any formula approved 
under this section will remain in effect until revoked, superseded, or 
voluntarily surrendered. Except for research, development, and testing, 
no special natural wine, agricultural wine, or, if required to be 
covered by an approved formula, wine other than standard wine may be

[[Page 541]]

produced prior to approval by the appropriate ATF officer of a formula 
covering each ingredient and process (if the process requires approval) 
used in the production of the product. (Sec. 201, Pub. L. 85-859, 72 
Stat. 1380, as amended, 1381, as amended, 1386, as amended, 1395, as 
amended (26 U.S.C. 5361, 5367, 5386, 5387, 5555))

(Approved by the Office of Management and Budget under control number 
1512-0059)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13684, Mar. 22, 1999]



Sec. 24.81  Filing of formulas.

    The proprietor shall on each formula filed designate all ingredients 
and, if required, describe each process used to produce the wine. The 
addition or elimination of ingredients, changes in quantities used, and 
changes in the process of production, or any other change in an approved 
formula, will require the filing of a new ATF F 5120.29. After a change 
in formula is approved, the original formula must be surrendered to the 
appropriate ATF officer. The proprietor shall serially number each 
formula, commencing with ``1'' and continuing thereafter in numerical 
sequence. Nonbeverage wine formulas will be prefixed with the symbol 
``NB.'' The appropriate ATF officer may at any time require the 
proprietor to file a statement of process in addition to that required 
by the ATF F 5120.29 or any other data to determine whether the formula 
should be approved or the approval continued. (Sec. 201, Pub. L. 85-859, 
72 Stat. 1381, as amended, 1395, as amended (26 U.S.C. 5367, 5555))

(Approved by the Office of Management and Budget under control number 
1512-0059)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13684, Mar. 22, 1999]



Sec. 24.82  Samples.

    Except for vinegar and salted wine as defined in Sec. 24.215, the 
proprietor shall submit under separate cover at the time of filing any 
nonbeverage wine formula a 750 mL sample of the base wine used and a 750 
mL sample of the finished wine or wine product. The latter sample will 
be considered representative of the finished product. Any material 
change in the flavor or other characteristics of the finished product 
from that of the approved sample will require the filing of a new 
formula even though the ingredients may be the same. In addition, the 
appropriate ATF officer may, at any time, require the proprietor to 
submit samples of any wine or wine product made in accordance with an 
approved formula or of any materials used in production. (Sec. 201, Pub. 
L 85-859, 72 Stat. 1380, as amended (26 U.S.C. 5362))

(Approved by the Office of Management and Budget under control number 
1512-0059)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31077, July 9, 1991; T.D. ATF-409, 64 FR 13684, Mar. 22, 1999]

                                Essences



Sec. 24.85  Essences.

    Essences or extracts (preparations of natural constituents extracted 
from fruit, herbs, berries, etc.) may be used in the production of any 
formula wine except agricultural wine. The essences may be produced on 
wine premises or elsewhere. Where an essence contains spirits, use of 
the essence may not increase the volume of the wine more than 10 percent 
nor its alcohol content more than four percent by volume. (Sec. 201, 
Pub. L. 85-859, 72 Stat. 1386, as amended (26 U.S.C. 5386))



Sec. 24.86  Essences produced on wine premises.

    Wine, taxpaid spirits, or spirits withdrawn tax-free may be used in 
the production of essences on wine premises. The description of the 
process for producing the essence may be included as part of a formula 
for the production of a formula wine or a separate formula may be filed 
on ATF F5120.29. If a separate formula is filed for the essence, the 
serial number of the formula by which it is produced will be shown in 
the ATF F 5120.29 covering the formula wine in which it is to be used. 
If an essence is to be made in quantities greater than required for 
individual lots of formula wine, and stored on the premises, a separate 
formula will be filed for the essence. Essences made on wine premises 
with wine spirits withdrawn free of tax pursuant to 26 U.S.C.

[[Page 542]]

5214(a)(5) may only be used in the production of a formula wine, and may 
not be removed from the premises where made. Essences made on wine 
premises with the use of tax-free spirits withdrawn free of tax pursuant 
to 26 U.S.C. 5214(a)(13) may only be used in the production of a 
nonbeverage wine or wine product and may not be removed from the 
premises where made. The ATF F 5120.29 for the production of an essence 
is filed in the same manner as for the production of formula wine and a 
sample of the essence produced will be at least four fluid ounces. (Sec. 
201, Pub. L. 85-859, 72 Stat. 1386, as amended (26 U.S.C. 5386))

(Approved by the Office of Management and Budget under control number 
1512-0059)



Sec. 24.87  Essences made elsewhere.

    Before an essence not made on wine premises may be used in the 
production of formula wine, the manufacturer of the essence shall obtain 
approval from the appropriate ATF officer. The request for approval will 
identify the essence by name or number and by the name of the 
manufacturer, and a sample of at least four fluid ounces of the essence 
will be submitted. However, a request for approval and submission of a 
sample is not required if the essence is made pursuant to approval of a 
formula on ATF F 5530.5, Formula and Process for Nonbeverage Product. 
Essences made under an approved formula on ATF F 5530.5 will be 
described on ATF F 5120.29 by showing the name of the manufacturer, the 
manufacturer's nonbeverage drawback formula number, and the date of 
approval by the appropriate ATF officer. (Sec. 201, Pub. L. 85-859, 72 
Stat. 1386, as amended (26 U.S.C. 5386))

(Approved by the Office of Management and Budget under control number 
1512-0059)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]

             Conveyance of Wine or Spirits on Wine Premises



Sec. 24.90  Taxpaid products.

    Taxpaid wine or other taxpaid products may be conveyed across bonded 
wine premises, but may neither be stored nor allowed to remain on bonded 
wine premises and will be kept separate from untaxpaid wine or spirits. 
However, upon payment or determination of the tax, bulk wine may remain 
on bonded wine premises until the close of the business day following 
the day the tax was paid or determined, respectively, or the bonded wine 
premises on which the tank is located may be alternated as taxpaid wine 
premises. (Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended (26 
U.S.C. 5365))



Sec. 24.91  Conveyance of untaxpaid wine or spirits.

    Untaxpaid wine or spirits may be conveyed between different portions 
of the same bonded wine premises. Untaxpaid wine or spirits may also be 
conveyed by uninterrupted transportation over any public thoroughfare, 
or over a private roadway if the owner or lessee of the roadway agrees, 
in writing, to allow appropriate ATF officers access to the roadway to 
perform their official duty. The conveyance of wine or spirits as 
authorized in this section is subject to the following conditions:
    (a) The untaxpaid wine or spirits are not stored or allowed to 
remain on any premises other than bonded wine premises;
    (b) The untaxpaid wine or spirits are kept completely separate from 
taxpaid wine or spirits; and
    (c) A description of the means and route of conveyance and of the 
portions of the bonded wine premises between which wine or spirits will 
be conveyed, as well as a copy of any agreement furnished by the owner 
or lessee of a private roadway, have been submitted to and approved by 
the appropriate ATF officer. (Sec. 201, Pub. L. 85-859, 72 Stat. 1379, 
as amended, 1381, as amended (26 U.S.C 5357, 5365))

(Approved by the Office of Management and Budget under control number 
1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, 13684, Mar. 22, 1999]



Sec. 24.92  Products in customs custody.

    Products in customs custody may be conveyed across bonded wine 
premises subject to the following conditions:

[[Page 543]]

    (a) The products are not stored or allowed to remain on bonded wine 
premises beyond the close of the business day; and
    (b) The products in customs custody are kept separate from wine and 
spirits on bonded wine premises. (Sec. 201, Pub. L. 85-859, 72 Stat. 
1379, as amended, 1380, as amended, 1381, as amended (26 U.S.C 5357, 
5361, 5365))

                                 Samples



Sec. 24.95  General.

    Wine or wine spirits may be withdrawn free of tax from a bonded wine 
premises for use by or for the account of the proprietor or the agents 
of the proprietor, for analysis or testing, organoleptically or 
otherwise. Wine or wine spirits may be used for testing purposes, and 
wine may be used for tasting or sampling on bonded wine premises free of 
tax. (Sec. 201, Pub. L. 85-859, 72 Stat. 1380, as amended, 1382, as 
amended (26 U.S.C. 5362, 5372, 5373))



Sec. 24.96  Use off premises.

    The proprietor may remove samples of wine or wine spirits free of 
tax for analysis or testing purposes.
    (a) Size. The size of each sample may not be more than one liter for 
each lot of wine or wine spirits to be analyzed or tested unless the 
appropriate ATF officer authorizes a larger quantity.
    (b) Disposition of samples. Remnants or residues of samples 
remaining after analysis or testing, and which are not retained as 
specimens, will be destroyed or returned to bonded wine premises. Free 
of tax samples or residues may not be consumed or sold.
    (c) Records. The proprietor shall maintain records of all samples 
taken for analysis or testing, showing the size of each sample, the kind 
of wine or wine spirits, date of removal, and the name and address to 
where sent.
    (d) Labeling of samples. Each sample taken for analysis or testing 
will be labeled ``Sample for Analysis Only''. The label will show the 
name, address, and registry number of the bonded wine premises, date, 
and the kind of wine or wine spirits.
    (e) Limitation. The tax will be collected on any wine or wine 
spirits withdrawn under this section which are used or disposed of for 
purposes other than as authorized. When the quantity of wine or wine 
spirits withdrawn under this section exceeds the amount necessary for 
the purpose intended the tax will be collected on such excess. (Sec. 
201, Pub. L. 85-859, 72 Stat. 1380, as amended, 1381, as amended, 1382, 
as amended (26 U.S.C. 5362, 5367, 5368, 5373))

(Approved by the Office of Management and Budget under control numbers 
1512-0298 and 1512-0503)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.97  Use on premises.

    (a) Analysis or testing. The proprietor may take samples of wine or 
wine spirits free of tax for analysis or testing on bonded wine 
premises. The proprietor shall maintain records showing the size, kind 
of wine or wine spirits, date, and disposition of each sample retained 
as a laboratory specimen. The label of each sample retained as a 
laboratory specimen will be marked ``Sample for Analysis Only'' and will 
show the kind of wine or wine spirits.
    (b) Tasting. The proprietor may take samples of wine free of tax for 
organoleptic tasting on bonded wine premises. If a room or area is set 
aside for public tasting purposes, a record will be maintained showing 
the date, quantity and kind of wine transferred to the room or area for 
tasting.
    (c) Limitation. The tax will be collected on any wine or wine 
spirits withdrawn under this section which are used or disposed of for 
purposes other than as authorized. When the quantity of wine or wine 
spirits withdrawn under this section exceeds the amount necessary for 
the purpose intended the tax will be collected on such excess. (Sec. 
201, Pub. L. 85-859, 72 Stat. 1382, as amended (26 U.S.C. 5362, 5372))

(Approved by the Office of Management and Budget under control numbers 
1512-0298 and 1512-0503)

[[Page 544]]



                 Subpart D--Establishment and Operations



Sec. 24.100  General.

    Each person desiring to conduct operations in wine production, as 
specified in Sec. 24.101(b), (other than the production of wine free of 
tax as provided in Secs. 24.75 through 24.77) shall, prior to commencing 
operations, establish wine premises, make application as provided in 
Sec. 24.105, file bond, and receive permission to operate wine premises 
as provided in this part. After approval, the wine premises will be 
designated a bonded winery, bonded wine cellar or taxpaid wine bottling 
house. As provided in Sec. 24.107, the designated bonded winery will be 
used if production operations are to be conducted. In addition, wine 
premises may be used, in accordance with the provisions of this part, 
for the conduct of certain other operations. (Sec. 201, Pub. L. 85-859, 
72 Stat. 1378, as amended (26 U.S.C. 5351, 5352))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13684, Mar. 22, 1999]

                         Premises and Operations



Sec. 24.101  Bonded wine premises.

    (a) General. A person desiring to conduct operations involving 
untaxpaid wine, including the use of spirits in wine production, shall 
file an application and bond as provided in Sec. 24.105. Further, a 
warehouse company or other person may, upon obtaining the consent of the 
proprietor and the surety on the bond and upon filing an application, as 
provided in Sec. 24.108, and receiving approval, establish at the wine 
premises a bonded wine warehouse for the storage of wine and allied 
products for credit purposes.
    (b) Authorized operations. Except as provided in this part, no 
operation may be conducted on bonded wine premises other than those 
authorized. The following operations are authorized:
    (1) The receipt, production, blending, cellar treatment, storage, 
and bottling or packing of untaxpaid wine;
    (2) The use of wine spirits in beverage wine production and the use 
of spirits in nonbeverage wine production;
    (3) The receipt, preparation, use, or removal of fruit, concentrated 
or unconcentrated fruit juice, or other materials to be used in the 
production or cellar treatment of wine; and
    (4) The preparation, storage, or removal of commercial fruit 
products and by-products (including volatile fruit-flavor concentrate) 
not taxable as wine. (Sec. 201, Pub. L. 85-859, 72 Stat. 1378, as 
amended, 1379, as amended, 1380, as amended (26 U.S.C. 5351, 5353, 
5361))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13684, Mar. 22, 1999]



Sec. 24.102  Premises established for taxpaid wine operations.

    A person desiring to bottle or pack taxpaid United States or foreign 
wine shall file an application as provided in Sec. 24.105 to establish a 
taxpaid wine bottling house premises. A person desiring to conduct 
taxpaid United States or foreign wine operations, other than bottling or 
packing taxpaid wine, at bonded wine premises shall include in their 
application, as provided in Sec. 24.109, the establishment of taxpaid 
wine premises.
    (a) Taxpaid wine premises. Premises on which taxpaid United States 
or foreign wine may be received and stored, or blended with wine of the 
same kind and tax class, or reconditioned, and removed.
    (b) Taxpaid wine bottling house premises. Premises on which taxpaid 
United States or foreign wine may be received, stored, mixed with wine 
of the same kind, tax class and country of origin to facilitate 
handling, reconditioned, bottled or packed, and removed. (Sec. 201, Pub. 
L. 85-859, 72 Stat. 1378, as amended, 1381, as amended (26 U.S.C. 5352, 
5363))

(Approved by the Office of Management and Budget under control number 
1512-0058)



Sec. 24.103  Other operations.

    Upon the specific approval of the appropriate ATF officer, other 
operations

[[Page 545]]

not provided for in this part may be conducted on wine premises. 
Authority to conduct other operations may be obtained by submitting an 
application to the appropriate ATF officer. The application must 
specifically describe the operation to be conducted and the wine 
premises and equipment to be used. An appropriate ATF officer may make 
any inquiry necessary to determine whether the conduct of other 
operations on wine premises would jeopardize the revenue, conflict with 
wine operations, or be contrary to law. Other operations authorized 
under this section will be conducted in accordance with the conditions, 
limitations, procedures, and terms stated in the approved application. 
Authority to conduct other operations may be withdrawn whenever the 
appropriate ATF officer determines the conduct of the other operations 
on wine premises jeopardizes the revenue, conflicts with wine 
operations, or is contrary to law.

[T.D. ATF-409, 64 FR 13685, Mar. 22, 1999]

                               Application



Sec. 24.105  General.

    A person desiring to establish a bonded winery, bonded wine cellar 
or taxpaid wine bottling house shall file an application on ATF F 
5120.25, Application to Establish and Operate Wine Premises. Approval of 
ATF F 5120.25 will constitute authorization for the proprietor to 
operate. The premises may not be used for the conduct of operations 
under this part unless the proprietor has a valid approved application 
for the operations. The application will be executed under the penalties 
of perjury and all written statements, affidavits, and any document 
incorporated by reference will be considered a part of the application. 
In any instance where a bond is required to be given or a permit 
obtained to engage in an operation, the currently approved application 
will not be valid with respect to that operation if the bond or permit 
is no longer in effect. In this case, the proprietor shall again file an 
application and obtain approval before engaging in operations at the 
wine premises. A new application is not required when a strengthening 
bond is filed pursuant to Sec. 24.153 or a new bond or superseding bond 
is filed pursuant to Sec. 24.154. The appropriate ATF officer may 
require the filing of a new or an amended application in any instance 
where the currently approved application is inadequate or incorrect in 
any respect. (August 16, 1954, Ch. 736, 68A Stat. 749, as amended (26 
U.S.C. 6065); sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended, 1392, 
as amended (26 U.S.C. 5356, 5511))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.106  Basic permit requirements.

    Any person intending to engage in the business of producing or 
blending wine or purchasing wine for resale at wholesale is required 
under the Federal Alcohol Administration Act, as amended (49 Stat. 978; 
27 U.S.C. 203) to obtain a basic permit. A State, a political 
subdivision of a State, or officers or employees of a State or political 
subdivision acting in their official capacity are exempted from this 
requirement. The issuance of a basic permit under the Act is governed by 
regulations in 27 CFR part 1. Where a basic permit is required to engage 
in an operation, an application for a basic permit will be filed at the 
time of filing an original or amended application on ATF F 5120.25. 
Operations requiring a basic permit may not be conducted until the basic 
permit application is approved. No Wine Producer's and Blender's Basic 
Permit or Wine Blender's Basic Permit is required for a bonded wine 
cellar established only for the purpose of storing untaxpaid wine even 
though an approved application, ATF F 5120.25, and bond are required. 
(Sec. 201, Pub. L. 85-859, 72 Stat. 1378, as amended (26 U.S.C. 5351))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13685, Mar. 22, 1999]



Sec. 24.107  Designation as a bonded winery.

    Bonded wine premises which will be used for the production of wine 
or for

[[Page 546]]

production processes involving the use of wine will be designated a 
bonded winery unless the proprietor applies for a bonded wine cellar 
designation. If the proprietor of a bonded wine premises designated as a 
bonded winery does not engage in wine production operations, the 
appropriate ATF officer may notify the proprietor that the designation 
of the premises is changed from a bonded winery to a bonded wine cellar. 
(Sec. 201, Pub. L. 85-859, 72 Stat. 1378, as amended (26 U.S.C. 5351))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.108  Bonded wine warehouse application.

    A warehouse company or other person desiring to establish a bonded 
wine warehouse on bonded wine premises for storing wine or allied 
products for credit purposes shall file an application, in letter form, 
with the appropriate ATF officer. The name and address of the applicant 
and of the bonded wine premises, and the approximate area and storage 
capacity (in gallons) of the bonded wine warehouse, will be stated in 
the application. The application will be accompanied by a signed 
statement from the proprietor of the bonded wine premises requesting the 
establishment of the warehouse, and the consent of the surety of the 
bond for the bonded wine premises. (Sec. 201, Pub. L. 85-859, 72 Stat. 
1379, as amended (26 U.S.C. 5353))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.109  Data for application.

    The ATF F 5120.25 is prepared in accordance with the instructions on 
the form and will include the following, as applicable:
    (a) Serial number;
    (b) Name and principal business address of the applicant and the 
address of the wine premises if different from the business address;
    (c) Statement of the type of business organization and of each 
person having an interest in the business, supported by the items of 
information listed in Sec. 24.110;
    (d) Indicate whether the application is for the purpose of 
establishing a bonded winery, bonded wine cellar, or taxpaid wine 
bottling house. Also, indicate whether a taxpaid wine premises is to be 
established if the application is for a bonded winery or bonded wine 
cellar;
    (e) List of the offices, the incumbents of which are authorized by 
the articles of incorporation or the board of directors to act on behalf 
of the proprietor or to sign the applicant's name;
    (f) Description of the premises (see Sec. 24.111);
    (g) Trade names (see Sec. 24.112);
    (h) Description of spirits operations;
    (i) With respect to wine premises to which the application relates, 
a list of the applicant's basic permits and bonds (including those filed 
with the application) showing the name of the surety for each bond;
    (j) Description of volatile fruit-flavor concentrate operations (see 
Sec. 24.113); and
    (k) If other operations not specifically authorized by this part are 
to be conducted on wine premises, a description of the operations, a 
list of the premises, and a statement as to the relationship, if any, of 
the operation to wine operations on wine premises. If any of the 
information required by paragraph (c) of this section is on file with 
the appropriate ATF officer in connection with any other premises 
operated by the applicant, that information, if accurate and complete, 
may be incorporated by reference and made a part of the application. In 
this case, the name, address, and if any, registry number of the 
premises where the information is filed will be stated in the 
application. The applicant shall, when required by the appropriate ATF 
officer, furnish as part of the application, additional information as 
may be necessary to determine whether the application should be 
approved. If any of the submitted information changes during the pending 
application, the applicant

[[Page 547]]

shall immediately notify the appropriate ATF officer of the revised 
information. (Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended, 1392, 
as amended (26 U.S.C. 5356, 5361, 5511))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13685, Mar. 22, 1999]



Sec. 24.110  Organizational documents.

    The supporting information required by paragraph (c) of Sec. 24.109, 
includes, as applicable, copies of:
    (a) Corporate documents. (1) Corporate charter or a certificate of 
corporate existence or incorporation.
    (2) List of the directors and officers, showing their names and 
addresses.
    (3) Certified extracts or digests of minutes of meetings of the 
board of directors, authorizing certain individuals to sign for the 
corporation.
    (4) Statement showing the number of shares of each class of stock or 
other evidence of ownership, authorized and outstanding, and the voting 
rights of the respective owners or holders of stock.
    (b) Articles of partnership. True copies of the articles of 
partnership, if any, and of the certificate of partnership or 
association.
    (c) Statement of interest. (1) Names and addresses of the 10 persons 
having the largest ownership or other interest in each of the classes of 
stock in the corporation, or other legal entity, and the nature and 
amount of the stockholding or other interest of each, whether the 
interest appears in the name of the interested party or in the name of 
another party. If a corporation is wholly-owned or controlled by another 
corporation, those persons of the parent corporation who meet the above 
standards are considered to be the persons interested in the business of 
the subsidiary, and the names thereof need to be furnished only upon the 
request of the appropriate ATF officer.
    (2) In the case of an individual owner or partnership, the name and 
address of each person interested in the wine premises, whether the 
interest appears in the name of the interested party or in the name of 
another for that person.
    (d) Availability of additional corporate documents. The originals of 
documents required to be submitted under this section and additional 
documents that may be required by the appropriate ATF officer (such as 
articles of incorporation, bylaws, and any certificate issued by a State 
authorizing operations) must be made available to any appropriate ATF 
officer upon request. (Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as 
amended (26 U.S.C. 5356))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, 13685, Mar. 22, 1999]



Sec. 24.111  Description of premises.

    The application will include a description of each tract of land 
comprising wine premises. The description will be by directions and 
distances, in feet and inches (or hundredths of feet), with sufficient 
particularity to enable ready determination of the bounds of the wine 
premises. When required by the appropriate ATF officer, a diagram of the 
wine premises, drawn to scale, will be furnished. The description will 
clearly indicate any area of the wine premises to be used as bonded wine 
premises, used as taxpaid wine premises, or alternated for use as bonded 
wine premises and taxpaid wine premises. The means employed to afford 
security and protect the revenue will be described. If required by the 
appropriate ATF officer to segregate operations within the premises, the 
manner by which the operations are segregated will be described. Each 
building on wine premises will be described as to size, construction, 
and use. Buildings on wine premises which will not be used for wine 
operations will be described only as to size and use. If the wine 
premises consist of a part of a building, the rooms or floors will be 
separately described. The activities conducted in the adjoining portions 
of the building and the means of ingress and egress from the wine 
premises will be described. (Sec. 201, Pub. L. 85-859,

[[Page 548]]

72 Stat. 1379, as amended, 1381, as amended (26 U.S.C. 5356, 5357, 
5365))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.112  Name of proprietor and trade names.

    The applicant shall list on the application, ATF F 5120.25, the 
proprietor's name or the operating trade name, if different than the 
proprietor's name, and any bottling or packing trade names. However, if 
a bottling or packing trade name is listed on a basic permit issued to 
the proprietor under the Federal Alcohol Administration Act (49 Stat 
978; 27 U.S.C. 204), that trade name is not required to be listed again 
on the application. If State or local law requires the registration of a 
trade name, the applicant shall certify that each trade name listed on 
the application is so registered. A trade name may not be used prior to 
approval of the application or issuance of a basic permit covering the 
use of the name. (Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended 
(26 U.S.C. 5356))

(Approved by the Office of Management and Budget under control number 
1512-0058)



Sec. 24.113  Description of volatile fruit-flavor concentrate operations.

    Each applicant intending to produce volatile fruit-flavor 
concentrate shall include on the ATF F 5120.25 application a step-by-
step description of the production procedure to be employed. The 
description will commence with the obtaining of juice from the fruit and 
continue through each step of the process to removal of volatile fruit-
flavor concentrate from the system. If volatile fruit-flavor concentrate 
containing more than 24 percent alcohol (high-proof concentrates 
(essences)) is to be produced, the proprietor shall indicate any step in 
the production procedure at which any spirits may be fit for beverage 
purposes. The maximum quantity in gallons of fruit most used and 
volatile fruit-flavor concentrate produced in 24 hours, the maximum and 
minimum fold, and the maximum percent of alcohol in the volatile fruit-
flavor concentrate will be stated for each kind of fruit used. (Sec. 
201, Pub. L. 85-859, 72 Stat. 1379, as amended, 1380, as amended, 1392, 
as amended (26 U.S.C. 5356, 5361, 5511))

(Approved by the Office of Management and Budget under control number 
1512-0058)



Sec. 24.114  Registry of stills.

    Any still intended for use in the production of volatile fruit-
flavor concentrate will be set up on bonded wine premises. Each still is 
subject to the provisions of subpart C of part 29 of this chapter and 
will be registered. The listing of a still in the application, and the 
approval of the application, will, as provided in 27 CFR 29.55, 
constitute registration. (Sec. 201, Pub. L. 85-859, 72 Stat. 1355, as 
amended, 1379, as amended, 1392, as amended (26 U.S.C. 5179, 5356, 
5511))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13685, Mar. 22, 1999; T.D. ATF-462, 66 FR 42737, Aug. 15, 2001]



Sec. 24.115  Registry number.

    Upon approval of the application, the appropriate ATF officer will 
assign a registry number to the bonded winery, bonded wine cellar, or 
taxpaid wine bottling house. The registry number will be used in all 
correspondence and on all documents filed subsequently in connection 
with the operation of the premises and will be shown where required on 
labels and markings of containers or cases filled at the wine premises.

(Approved by the Office of Management and Budget under control numbers 
1512-0058 and 1512-0503)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.116  Powers of attorney.

    The proprietor shall file with the appropriate ATF officer a power 
of attorney for each person authorized to sign or to act on behalf of 
the proprietor as an attorney-in-fact. A power of attorney is not 
required for any person whose authority has been furnished in

[[Page 549]]

the application. If not limited in duration, the power of attorney will 
continue in effect until written notice of revocation is received by the 
appropriate ATF officer or operations are terminated.

(Approved by the Office of Management and Budget under control number 
1512-0058)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, 13685, Mar. 22, 1999]



Sec. 24.117  Maintenance of application file.

    The proprietor shall maintain an application file with the 
information required by Sec. 24.109 in complete and current condition, 
readily available at the wine premises for inspection by appropriate ATF 
officers. (Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended (26 
U.S.C. 5356, 5367))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13684, Mar. 22, 1999]

              Changes Subsequent to Original Establishment



Sec. 24.120  Amended application.

    Where there is a change in any of the information included in the 
current approved application, the proprietor shall, within 30 days of 
the change (except as otherwise provided in this part), submit an 
amended application to the appropriate ATF officer and set forth the 
information necessary to make the application file accurate and current. 
Where the change affects only pages or parts of pages of the current 
application, as many complete pages as will enable the replacement of 
the pages affected and maintenance of the file as provided in 
Sec. 24.117 will be submitted. (Sec. 201, Pub. L. 85-859, 72 Stat. 1379, 
as amended (26 U.S.C. 5356))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.121  Changes affecting permits.

    The proprietor shall follow the provisions of 27 CFR part 1 to 
effect any change pertaining to a permit issued under the Federal 
Alcohol Administration Act. (49 Stat. 978; 27 U.S.C. 203).



Sec. 24.122  Change in name of proprietor or trade name.

    Where there is to be a change in the name of the proprietor or 
operating trade name, the proprietor shall file an amended application 
and, if a basic permit has been issued under the Federal Alcohol 
Administration Act (49 Stat. 978; 27 U.S.C. 203), an application for 
amendment of the basic permit. Where there is a change in or addition of 
a trade name, the proprietor shall file an amended application or, if a 
basic permit has been issued under the Federal Alcohol Administration 
Act (49 Stat. 978; 27 U.S.C. 203), an application for amendment of the 
basic permit. Operations under a new name may not be conducted before 
approval of the amended application or issuance of an amended permit, as 
the case may be. (Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended 
(26 U.S.C. 5356))

(Approved by the Office of Management and Budget under control number 
1512-0058)



Sec. 24.123  Change in stockholders.

    If there is a change in the list of stockholders furnished under the 
provisions of Sec. 24.110(c)(1), the proprietor may, in lieu of 
submission within 30 days of the change under the provisions of 
Sec. 24.120, submit a new list of stockholders annually on May 1, or any 
other approved date, to the appropriate ATF officer which has on file 
the list of stockholders, provided the sale or transfer of capital stock 
does not result in a change in the control or management of the 
business. (Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended (26 
U.S.C. 5356))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.124  Change in corporate officers.

    Where there is any change in the list of corporate officers 
furnished under the provisions of Sec. 24.110(a)(2), the proprietor 
shall submit, within 30 days of the change, an amended application

[[Page 550]]

supported by a new list of corporate officers and a statement of the 
changes reflected in the new list. Where the proprietor has shown that 
certain corporate officers listed on the original application have no 
responsibilities in connection with the operations covered by the 
application, the appropriate ATF officer may waive the requirement for 
submitting an amended application to cover a change in those corporate 
officers. (Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended (26 
U.S.C. 5356))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.125  Change in proprietorship.

    (a) General. If there is a change in the proprietorship of wine 
premises qualified to operate under this part, the outgoing proprietor 
shall comply with the requirements of Sec. 24.140, and the successor 
shall, before commencing operations, apply for and obtain any required 
permits, file any required bonds, and file an application for and 
receive permission to operate in the same manner as a person qualifying 
a new wine premises; however, the successor may, in the manner provided 
in Sec. 24.127, adopt the approved formulas of the outgoing proprietor. 
Wine, spirits, and winemaking materials may be transferred from an 
outgoing proprietor to a successor in the manner provided in 
Sec. 24.140.
    (b) Fiduciary. A successor to the proprietorship of wine premises 
who is an administrator, executor, receiver, trustee, assignee, or other 
fiduciary shall, except as otherwise provided in this section, comply 
with the provisions of paragraph (a) of this section. However, in lieu 
of filing a new bond, if a bond is required, the fiduciary may furnish a 
consent of surety extending the terms of any bonds of the predecessor, 
and any pertinent information contained in the predecessor's application 
may be incorporated by reference. In addition, the fiduciary shall 
furnish a certified copy of the order of the court or other pertinent 
document showing the appointment as such fiduciary. The effective date 
of the qualifying documents filed by a fiduciary will be the effective 
date of the court order, or the date specified for the fiduciary to 
assume control. If the fiduciary was not appointed by a court, the date 
of assuming control will coincide with the effective date of the 
qualifying documents filed by the fiduciary.
    (c) Exception. A fiduciary intending to liquidate the business 
conducted on wine premises, i.e., disposition of any wine and spirits on 
hand, including use of any cellar treatment necessary to put the wine in 
merchantable condition, who does not intend to produce wine, or use 
spirits, or receive wine in bond may be exempted from qualifying as the 
proprietor of the wine premises upon filing with the appropriate ATF 
officer a statement to that effect, a copy of a foreclosure action, or a 
copy of the court order directing the liquidation of the business, and, 
if the wine premises is covered by a bond, a consent of surety wherein 
the surety and the fiduciary agree to remain liable on the bond. (Sec. 
201, Pub. L. 85-859, 72 Stat. 1379, as amended (26 U.S.C. 5356))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31077, July 9, 1991; T.D. ATF-409, 64 FR 13683, Mar. 22, 1999]



Sec. 24.126  Change in proprietorship involving a bonded wine warehouse.

    Where a bonded wine warehouse has been established on wine premises 
and it is desired to continue the operation of the bonded wine warehouse 
subsequent to a change in the proprietorship of the bonded winery or 
bonded wine cellar, the proprietor of the bonded wine warehouse shall 
file a letter application, accompanied by an affirming statement from 
the new proprietor of the bonded winery or bonded wine cellar, 
requesting the continuation of the bonded wine warehouse and also file 
evidence of sufficient bond coverage. (Sec. 201, Pub. L. 85-859, 72 
Stat. 1379, as amended (26 U.S.C. 5353))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[[Page 551]]



Sec. 24.127  Adoption of formulas.

    The adoption of approved formulas by a successor proprietor will be 
in the form of an application, filed with the appropriate ATF officer. 
The application will list the formulas for adoption by formula number, 
name of product, and date of approval. The application will clearly show 
that the outgoing proprietor has authorized the successor proprietor's 
use of the approved formulas. (Sec. 201, Pub. L. 85-859, 72 Stat. 1379, 
as amended (26 U.S.C. 5356))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.128  Continuing partnerships.

    If, under the laws of the particular State, the partnership is not 
terminated upon the death or insolvency of a partner but continues until 
the dissolution of the partnership is completed, and the surviving 
partner has the exclusive right to the control and possession of the 
partnership assets for the purpose of liquidation and settlement, the 
surviving partner may continue to operate the wine premises under the 
prior qualification of the partnership, provided a consent of surety is 
filed wherein the surety and the surviving partner agree to remain 
liable on any bond covering the bonded wine premises. A surviving 
partner who acquires the business on completion of the dissolution of 
the partnership shall qualify from the date of acquisition, as provided 
in Sec. 24.125(a). The rule set forth in this section will also apply 
where there is more than one surviving partner. (Sec. 201, Pub. L. 85-
859, 72 Stat. 1379, as amended (26 U.S.C. 5356))

(Approved by the Office of Management and Budget under control number 
1512-0058)



Sec. 24.129  Change in location.

    Where there is a change in the location of wine premises, the 
proprietor shall file an amended application and an application for 
amendment of the basic permit, if any, and if a bond has been filed, 
either a new bond or a consent of surety. Operation of wine premises may 
not be commenced at the new location prior to approval of the amended 
application and issuance of any amended permit. (Sec. 201, Pub. L. 85-
859, 72 Stat. 1379, as amended (26 U.S.C. 5356))

(Approved by the Office of Management and Budget under control number 
1512-0058)



Sec. 24.130  Change in volatile fruit-flavor concentrate operations.

    If the proprietor desires to make any change in the process employed 
to produce volatile fruit-flavor concentrate and the change affects the 
accuracy of the description of process included in the application, the 
proprietor shall file an amended application to include the amended or 
new process. The new or changed process may not be used prior to 
approval of the amended application. (Sec. 201, Pub. L. 85-859, 72 Stat. 
1379, as amended, 1392, as amended (26 U.S.C. 5356, 5511))

(Approved by the Office of Management and Budget under control number 
1512-0058)



Sec. 24.131  Change in building construction and use of premises.

    Where a change is to be made to buildings located on wine premises, 
or in the use of any portion of the wine premises, which affects the 
accuracy of the application, the proprietor shall, before making such 
change in construction or use, submit a notice to the appropriate ATF 
officer. The notice will describe the proposed change in detail. The 
proprietor shall include the change covered by the notice in the next 
amended ATF F 5120.25 required to be filed, unless the appropriate ATF 
officer requires immediate amendment. (Sec. 201, Pub. L. 85-859, 72 
Stat. 1379, as amended (26 U.S.C. 5356))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31077, July 9, 1991; T.D. ATF-409, 64 FR 13685, Mar. 22, 1999]

                               Alternation



Sec. 24.135  Wine premises alternation.

    (a) General. The proprietor of a bonded winery or bonded wine cellar 
may alternate all or a portion of wine premises for use as a taxpaid 
wine bottling house or use as taxpaid wine premises.

[[Page 552]]

The proprietor may also alternate the use of adjacent or contiguous 
premises qualified under 26 U.S.C. chapter 51 (distilled spirits plant, 
brewery, etc.) for use as wine premises or vice versa. If a proprietor 
of a bonded wine cellar or winery wishes to use all or a portion of such 
premises alternately as a volatile fruit-flavor concentrate plant or 
vice-a-versa, the proprietor must comply with the requirements of 
Secs. 18.40 through 18.43 of this title.
    (b) Qualifying documents. Where the proprietor desires to alternate 
bonded wine premises as taxpaid wine bottling house premises or taxpaid 
wine premises, or other premises qualified under 26 U.S.C. chapter 51, 
the following qualifying documents will be filed:
    (1) A statement on the application ATF F 5120.25 that an alternation 
of wine premises will occur;
    (2) Evidence of existing bond, consent of surety, or a new bond 
covering the alternation;
    (3) A description of how taxpaid wine or spirits, or untaxpaid wine 
or spirits will be identified and segregated; and
    (4) Any other document or additional information the appropriate ATF 
officer may require.
    (c) Alternation. After the necessary qualifying documents have been 
approved by the appropriate ATF officer, the proprietor may alternate 
wine premises as described in the application. Any portion of wine 
premises on which taxpaid wine is located will be considered taxpaid 
wine premises or taxpaid wine bottling house premises and any portion of 
the premises on which wine not identified as taxpaid is located will be 
considered bonded wine premises. The proprietor shall, prior to the 
initial alternation of the premises, identify by portable signs or tags, 
or by any other method or manner satisfactory to the appropriate ATF 
officer, either all taxpaid wine on taxpaid wine premises or taxpaid 
wine bottling house premises or all untaxpaid wine on bonded wine 
premises.
    (d) Segregation. The proprietor shall keep untaxpaid wine or spirits 
physically separated from taxpaid wine or spirits and on the designated 
premises. This separation will be by use of tanks, rooms, buildings, 
partitions, pallet stacks, or complete physical separation, or by any 
other method or manner which will clearly and readily distinguish 
untaxpaid wine or spirits from taxpaid wine or spirits and is 
satisfactory to the appropriate ATF officer. Where necessary for the 
protection of the revenue or enforcement of 26 U.S.C. chapter 51, the 
appropriate ATF officer may require that the portions of wine premises 
alternated under this section be separated by partitions or otherwise.
    (e) Conditions. Authority for the alternation of bonded wine 
premises, taxpaid wine bottling house premises, taxpaid wine premises, 
or other premises qualified under 26 U.S.C chapter 51 is conditioned on 
compliance by the proprietor with the provisions of this section. 
Authority for the alternation of bonded wine premises, taxpaid wine 
bottling house premises, taxpaid wine premises, or other premises 
qualified under 26 U.S.C. chapter 51 may be withdrawn whenever in the 
judgment of the appropriate ATF officer the revenue is jeopardized or 
the effective administration of this part is hindered by the 
continuation of the authorization. (Sec. 201, Pub. L. 85-859, 72 Stat. 
1379, as amended, 1380, as amended, 1381, as amended (26 U.S.C. 5356, 
5357, 5361, 5363, 5365, 5367))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, 13685, Mar. 22, 1999; T.D. ATF-455, 66 FR 29483, May 31, 
2001]



Sec. 24.136  Procedure for alternating proprietors.

    (a) General. Wine premises, or parts thereof, may be operated 
alternately by proprietors who have each filed and received approval of 
the necessary applications and bonds and have qualified under the 
provisions of this part. Where operations by alternating proprietors are 
limited to parts of the wine premises, the application will describe 
areas, buildings, floors, or rooms which will be alternated and will be 
accompanied by a diagram delineating the parts of the wine premises to 
be alternated. A separate diagram will be submitted to depict each 
arrangement under which the wine premises will be

[[Page 553]]

operated. Once the qualifying documents have been approved, and 
operations initiated, the wine premises, or parts thereof, may be 
alternated. Any transfer of wine, spirits, or other accountable 
materials from one proprietor to the other proprietor will be indicated 
in the records and reports of each proprietor. Operation of a bonded 
winery engaged in the production of wine by an alternate proprietor will 
be at least one calendar day in length.
    (b) Alternation. All operations in any area, building, floor, or 
room to be alternated will be completely finished and all wine, spirits, 
and other accountable materials will be removed from the alternated wine 
premises or transferred to the incoming proprietor. However, wine, 
spirits, and other accountable materials may be retained in locked tanks 
at wine premises to be alternated and remain in the custody of the 
outgoing proprietor.
    (c) Bonds. The outgoing proprietor who has filed bond and intends to 
resume operation of the alternated areas, buildings, floors, or rooms 
following suspension of operations by an alternating proprietor shall 
execute a consent of surety to continue in effect all bonds. Where wine, 
spirits, or other accountable materials subject to tax under 26 U.S.C. 
chapter 51 are to be retained in tanks on the wine premises to be 
alternated, the outgoing proprietor shall also execute a consent of 
surety to continue the liability of all bonds for the tax on the 
materials, notwithstanding the change in proprietorship.
    (d) Records. Each proprietor shall maintain separate records and 
submit a separate ATF F 5120.17, Report of Bonded Wine Premises 
Operations. All transfers of wine, spirits, and other accountable 
materials will be reflected in the records of each proprietor. Each 
proprietor shall maintain a record showing the name and registry number 
of the incoming or outgoing proprietor, the effective date and hour of 
alternation, and the quantity in gallons and the percent alcohol by 
volume or proof of any wine, spirits, or other accountable materials 
transferred or received. (Sec. 201, Pub. L. 85-859, 72 Stat. 1378, as 
amended, 1379, as amended, 1380, as amended, 1381, as amended, 1382, as 
amended (26 U.S.C. 5351, 5352, 5354, 5356, 5361, 5362, 5363, 5367, 
5373))

(Approved by the Office of Management and Budget under control numbers 
1512-0058, 1512-0216 and 1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-338, 
58 FR 19064, Apr. 12, 1993]



Sec. 24.137  Alternate use of the wine premises for customs purposes.

    (a) General. The wine premises may be alternated as a Customs Bonded 
Warehouse under applicable customs laws and regulations, for the purpose 
of measuring, gauging, and bottling or packing wine. The use of the 
portion of the wine premises alternated as a Customs Bonded Warehouse is 
subject to the approval of the district director of customs and the 
appropriate ATF officer. When it is necessary to convey wine in customs 
custody across bonded wine premises, the proprietor shall comply with 
the provisions of Sec. 24.92.
    (b) Qualifying documents. Where the proprietor desires to alternate 
a portion of wine premises for customs use, the following qualifying 
documents will be filed:
    (1) ATF F 5120.25 to cover the alternation;
    (2) A diagram clearly depicting any area, building, floor, room or 
major equipment in use during the alternation; and
    (3) Any other documents or additional information the appropriate 
ATF officer may require.
    (c) Alternation. After approval of the qualifying documents by the 
appropriate ATF officer, the proprietor may alternate the wine premises. 
Portions of the wine premises to be excluded by curtailment or included 
by extension may not be used for purposes other than those authorized. 
Prior to the effective date and hour of the alternation, the proprietor 
shall remove all wine and spirits from the portion of the wine premises 
to be alternated for customs purposes. (Sec. 201, Pub. L. 85-859, 72 
Stat. 1379, as amended, 1380, as

[[Page 554]]

amended, 1381, as amended (26 U.S.C. 5356, 5357, 5361, 5365, 5367))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-344, 
58 FR 40354, July 28, 1993; T.D. ATF-409, 64 FR 13683, 13685, Mar. 22, 
1999]

                 Permanent Discontinuance of Operations



Sec. 24.140  Notice.

    (a) General. Where all or part of the operations at a wine premises 
are to be permanently discontinued, the proprietor shall file with the 
appropriate ATF officer a notice in letter form to cover the 
discontinuance. The proprietor shall state in the notice the date on 
which operations will be discontinued and, if the wine premises are to 
be transferred to a successor proprietor, the name of the successor 
proprietor. Any basic permit issued to the proprietor under the Federal 
Alcohol Administration Act (49 Stat. 978; 27 U.S.C. 203) for the 
operation discontinued will be submitted to the appropriate ATF officer 
with a written request for cancellation.
    (b) Bonded wine premises. The proprietor shall certify in the 
notice, as applicable, that:
    (1) All wine, spirits, or volatile fruit-flavor concentrate have 
been lawfully removed from bonded wine premises, destroyed, or 
transferred to a successor as of the effective date of discontinuance,
    (2) No wine, spirits, or volatile fruit-flavor concentrate are in 
transit to bonded wine premises, and
    (3) All approved applications covering the transfer of spirits to 
bonded wine premises have been returned to the appropriate ATF officer.

The proprietor shall submit a report marked ``Final'' on the ATF F 
5120.17, Report of Bonded Wine Premises Operations. Any wine, spirits, 
or volatile fruit-flavor concentrate transferred to a successor will be 
identified as ``Transferred to successor'' on the report and identified 
as ``Received from predecessor'' on the initial report filed by the 
successor.
    (c) Taxpaid wine bottling house premises or Taxpaid wine premises. 
The proprietor shall certify in the notice that all taxpaid United 
States or foreign wine on hand have been disposed of, or if not yet 
disposed of, the manner of disposition and the time period in which the 
disposition will occur. The proprietor shall include taxpaid United 
States wine on the ATF F 5120.17 report marked ``Final.'' Any United 
States taxpaid wine transferred to a successor will be identified as 
``Transferred to successor'' on the report and identified as ``Received 
from predecessor'' on the initial report filed by the successor. (Sec. 
201, Pub. L. 85-859, 72 Stat. 1381, as amended (26 U.S.C. 5367))

(Approved by the Office of Management and Budget under control numbers 
1512-0058 and 1512-0216)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-338, 
58 FR 19064, Apr. 12, 1993; T.D. ATF-409, 64 FR 13683, Mar. 22, 1999]



Sec. 24.141  Bonded wine warehouse.

    Where all operations at a bonded wine warehouse are to be 
permanently discontinued, the warehouse proprietor shall file with the 
appropriate ATF officer a notice in letter form to cover the 
discontinuance. The warehouse proprietor shall state in the notice the 
name, registry number, and address of the wine premises on which the 
warehouse facilities are located and the date on which operations of the 
bonded wine warehouse will be discontinued. (Sec. 201, Pub. L. 85-859, 
72 Stat. 1379, as amended (26 U.S.C. 5353))

(Approved by the Office of Management and Budget under control number 
1512-0292)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]

                      Bonds and Consents of Surety



Sec. 24.145  General requirements.

    Each person required to file a bond or consent of surety under this 
part must prepare, execute and submit the bond or consent of surety on 
the prescribed form in accordance with this part and the instructions 
printed on the form. A person may not commence or continue any business 
or operation relating to wine until all bonds and consents of surety 
required under this part with respect to the business or operation have

[[Page 555]]

been approved by the appropriate ATF officer. (Sec. 201, Pub. L. 85-859, 
72 Stat. 1394, as amended (26 U.S.C. 5551))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13685, Mar. 22, 1999]



Sec. 24.146  Bonds.

    (a) Wine bond. The proprietor shall give bond on ATF F 5120.36, Wine 
Bond, to cover the liability for excise taxes imposed by the Internal 
Revenue Code of 1986, on wines produced or received by the proprietor. 
This includes liability for special occupational taxes and penalties and 
interest. The bond will apply to wine, spirits, and volatile fruit-
flavor concentrate, or other commodities subject to tax under 26 U.S.C. 
chapter 51, in transit to or on bonded wine premises, and to the 
operations of the bonded wine premises, whether the transaction or 
operation on which the proprietor's liability is based occurred on or 
off the proprietor's premises. The bond will provide that the proprietor 
shall faithfully comply with all provisions of law and regulation 
relating to activities covered by the bond. This bond has a tax 
obligation limit of $500 for wine removed from bonded wine premises on 
which the tax has been determined, but not paid, unless the total penal 
sum of the operations bond is $2,000 or more and the proprietor and the 
surety designate $1,000 of this amount as the obligation limit for wine 
on which the tax has been determined, but not paid.
    (b) Tax deferral bond. Where the proprietor removes wine from bonded 
wine premises for consumption or sale, after determination and before 
payment of tax, and the tax unpaid at any one time amounts to more than 
$500, the proprietor shall, in addition to any other bond required by 
this part, furnish a tax deferral bond on ATF F 5120.36, Wine Bond, to 
ensure payment of the tax on the wine. Under the conditions provided in 
paragraph (a) of this section, this amount may be changed to $1,000 by 
the terms of the bond or through a consent of surety between the 
proprietor and the surety. The tax deferral bond and the wine bond may 
be submitted on the same ATF F 5120.36.
    (c) Wine vinegar plant bond. The proprietor of a wine vinegar plant 
who withdraws wine from a bonded wine premises without payment of tax 
for use in the manufacture of vinegar shall file a bond on ATF F 5510.2, 
Bond Covering Removal to and Use of Wine at Vinegar Plant, to ensure the 
payment of the tax on the wine until such wine becomes vinegar. (Sec. 
201, Pub. L. 85-859, 72 Stat. 1379, as amended, 1380, as amended (26 
U.S.C. 5354, 5362))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-338, 
58 FR 19064, Apr. 12, 1993]



Sec. 24.147  Operations bond or unit bond.

    Notwithstanding the provisions of Sec. 24.146, each person intending 
to commence or to continue business as the proprietor of a bonded wine 
premises with an adjacent or contiguous distilled spirits plant 
qualified under 27 CFR part 19 for the production of distilled spirits 
shall, in lieu of a winery bond and the bonds required under the 
provisions of 26 U.S.C. 5173, as amended, give an operations bond or 
unit bond in accordance with the applicable provisions of 27 CFR part 
19. (Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 (26 U.S.C. 5173))

(Approved by the Office of Management and Budget under control number 
1512-0058)



Sec. 24.148  Penal sums of bonds.

    The penal sums of bonds prescribed in this part are as follows:

[[Page 556]]



----------------------------------------------------------------------------------------------------------------
                                                                                                Penal sum
                Bond                                        Basis                      -------------------------
                                                                                          Minimum      Maximum
----------------------------------------------------------------------------------------------------------------
(a) Wine Bond, AFT F 5120.36........  (1) Not less than the tax on all wine or spirits       $1,000      $50,000
                                       in transit or unaccounted for at any one time,
                                       taking into account the appropriate small
                                       producer's wine tax credit.
                                      Where such liability exceeds $250,000...........  ...........      100,000
                                      (2) Where the unpaid tax amounts to more than             500      250,000
                                       $500, not less than the amount of tax which, at
                                       any one time, has been determined but not paid.
                                       Except: $1,000 of the wine operations coverage
                                       may be allocated to cover the amount of tax
                                       which, at any one time, has been determined but
                                       not paid, if the total operations coverage is
                                       $2,000 or more.
(b) Wine Vinegar Plant Bond ATF F     Not less than the tax on all wine on hand, in           1,000      100,000
 5510.2*.                              transit, or unaccounted for at any one time.
----------------------------------------------------------------------------------------------------------------
* The proprietor of a bonded wine premises who operates an adjacent or contiguous wine vinegar plant with a Wine
  Bond which does not cover the operation may file a consent of surety to extend the terms of the Wine Bond in
  lieu of filing a wine vinegar plant bond.

(26 U.S.C. 5354, 5362)

[T.D. ATF-390, 62 FR 29666, June 2, 1997]

[[Page 557]]



Sec. 24.149  Corporate surety.

    (a) Surety bonds required by this part may be obtained only from 
corporate sureties which hold certificates of authority from and are 
subject to the limitations prescribed by the Secretary as set forth in 
the current revision of Treasury Department Circular No. 570 (Companies 
Holding Certificates of Authority as Acceptable Sureties on Federal 
bonds and as Acceptable Reinsuring Companies).
    (b) Treasury Department Circular No. 570 is published in the Federal 
Register yearly on the first working day in July. As revisions of the 
circular occur, the revisions are published in the Federal Register. 
Copies may be obtained from the Audit Staff, Financial Management 
Service, Department of the Treasury, Washington, DC 20226. (July 30, 
1947, Ch. 390, Pub. L. 80-280, 61 Stat. 648, as amended (6 U.S.C. 6, 7))



Sec. 24.150  Powers of attorney.

    Each bond, and each consent to changes in the terms of a bond, will 
be accompanied by a power of attorney whereby the surety authorizes the 
agent or officer who executed the bond or consent to act on behalf of 
the surety. The appropriate ATF officer may require additional evidence 
of the authority of the agent or officer of the surety to execute the 
bond or consent. The power of attorney will be prepared on a form 
provided by the surety and executed under the corporate seal of the 
surety. If the power of attorney is other than a manually signed 
original, the appropriate ATF officer may require a certification of 
validity. (July 30, 1947, Ch. 390, Pub. L. 80-280, 61 Stat. 648, as 
amended (26 U.S.C. 6, 7))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.151  Deposit of collateral security.

    (a) Bonds or notes of the United States, or other obligations which 
are unconditionally guaranteed as to both interest and principal by the 
United States, may be pledged and deposited as collateral security in 
lieu of corporate sureties in accordance with the provisions of Treasury 
Department Circular No. 154 (31 CFR part 225, Acceptance of Bonds, Notes 
or Other Obligations Issued or Guaranteed by the United States as 
Security in Lieu of Surety or Sureties on Penal Bonds). Cash, postal 
money orders, certified checks, cashiers' checks, or treasurers' checks 
may also be furnished as collateral security in lieu of corporate 
sureties.
    (b) Treasury Department Circular No. 154 is periodically revised and 
contains the provisions of 31 CFR part 225 and the forms prescribed in 
31 CFR part 225. Copies of the circular may be obtained from the Surety 
Bond Branch, Financial Management Service, Department of the Treasury, 
Washington, DC 20226. (July 30, 1947, Ch. 390, 61 Stat. 650 (6 U.S.C. 
15); August 16, 1954, Ch. 736, 68A Stat. 847, as amended (26 U.S.C. 
7101))



Sec. 24.152  Consents of surety.

    Consents of surety to changes in the terms of bonds will be executed 
on Form 1533 by the principal and by the surety with the same formality 
and evidence of authority as is required for the execution of bonds.

(Approved by the Office of Management and Budget under control number 
1512-0058)



Sec. 24.153  Strengthening bonds.

    In any instance where the penal sum of the bond on file becomes 
insufficient, the principal shall either give a strengthening bond with 
the same surety to attain a sufficient penal sum or give a new bond 
covering the entire liability. Strengthening bonds will not be approved 
where any notation is made thereon which is intended, or which may be 
construed, as a release of any former bond, or as limiting the amount of 
either bond to less than its full penal sum. Strengthening bonds will 
show the current date of execution and the effective date. (Sec. 201, 
Pub. L. 85-859, 72 Stat. 1394, as amended (26 U.S.C. 5551))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[[Page 558]]



Sec. 24.154  New or superseding bonds.

    When, in the opinion of the appropriate ATF officer, the interests 
of the Government demand it, or in any case where the validity of the 
bond becomes impaired in whole or in part for any reason, the principal 
will be required to give a new bond. A new bond will be required 
immediately in the case of the insolvency of a corporate surety. 
Executors, administrators, assignees, receivers, trustees, or other 
persons acting in a fiduciary capacity, to continue or to liquidate the 
business of the principal, will execute and file a new bond or obtain 
the consent of the surety or sureties on the existing bond or bonds. 
When under the provisions of Sec. 24.157 the surety has filed an 
application to be relieved of liability under any bond given under this 
part and the principal desires or intends to continue business or 
operations to which the bond relates, the principal shall file a valid 
superseding bond to be effective on or before the date specified in the 
surety's notice. New or superseding bonds will show the current date of 
execution and the effective date. (Sec. 201, Pub. L. 85-859, 72 Stat. 
1379, as amended, 1380, as amended, 1394, as amended (26 U.S.C. 5354, 
5362, 5551))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.155  Disapproval and appeal from disapproval.

    (a) Disapproval. The appropriate ATF officer may disapprove any 
bonded wine premises bond or consent of surety if the individual, firm, 
partnership, corporation, or association giving the bond, or owning, 
controlling, or actively participating in the management of the bonded 
wine premises of the individual, firm, partnership, corporation, or 
association giving the bond, has been previously convicted in a court of 
competent jurisdiction of:
    (1) Any fraudulent noncompliance with any provision of any law of 
the United States, if such provision relates to internal revenue or 
customs taxation of distilled spirits, wine, or beer, or if such offense 
has been compromised with the person on payment of penalties or 
otherwise, or
    (2) Any felony under a law of any State, or of the District of 
Columbia, or of the United States, prohibiting the manufacture, sale, 
importation, or transportation of distilled spirits, wine, beer, or 
other intoxicating liquor.
    (b) Appeal from disapproval. Where a bond or consent of surety is 
disapproved by the appropriate ATF officer, the person giving the bond 
may appeal the disapproval to the Director. The decision of the Director 
will be final. (Sec. 201, Pub. L. 85-859, 72 Stat. 1394, as amended (26 
U.S.C. 5551))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.156  Termination of bonds.

    A bond prescribed in Sec. 24.146 may be terminated as to future 
liability pursuant to application by the surety as provided in 
Sec. 24.157; pursuant to approval of a superseding bond; upon receipt of 
notification from the principal that the business has been discontinued 
and all wine and spirits have been removed from the bonded wine premises 
as provided in Sec. 24.140(b); or in the case of a tax deferral bond, 
the termination will be issued upon receipt of written notification from 
the principal that removals of wine requiring a tax deferral bond have 
been discontinued. (Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended 
(26 U.S.C. 5354))

(Approved by the Office of Management and Budget under control number 
1512-0058)



Sec. 24.157  Application by surety for relief from bond.

    A surety on any bond required by this part may at any time, in 
writing, notify the principal and the appropriate ATF officer in whose 
office the bond is on file, that it desires after a specified date, to 
be relieved of liability under the bond. The date may not be less than 
10 days after the date notice is received by the appropriate ATF officer 
in the case of a tax deferral bond, and not less than 90 days after the 
date the notice is received in the

[[Page 559]]

case of a bonded wine premises bond or wine vinegar plant bond. The 
surety will also file with the appropriate ATF officer an 
acknowledgment, or other evidence of service, of a notice on the 
principal. The 10 day or 90 day period does not commence until both the 
acknowledgment or other evidence of service and the notice are filed. If 
a notice is not thereafter withdrawn in writing, the rights of the 
principal as supported by the bond will be terminated on the date 
specified in the notice, and the surety will be relieved from liability 
to the extent set forth in Sec. 24.158. (Sec. 201, Pub. L. 85-859, 72 
Stat. 1379, as amended, 1380, as amended (26 U.S.C. 5354, 5362))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.158  Extent of relief.

    (a) General. The surety on any bond required by this part who has 
filed a notice for relief from liability as provided in Sec. 24.157 will 
be relieved from liability under bond as set forth in this section.
    (b) Wine bond. Where a new or superseding bond is filed, the surety 
of the existing bond will be relieved of future liability with respect 
to wine, spirits, volatile fruit-flavor concentrate, or any other 
commodities subject to tax under 26 U.S.C. chapter 51 on hand or in 
transit to bonded wine premises on or after the effective date of the 
new or superseding bond. Notwithstanding such relief, the surety will 
remain liable for the tax on all wine or volatile fruit-flavor 
concentrate produced at, and for wine, spirits, and volatile fruit-
flavor concentrate consigned to, the bonded wine premises, and for all 
other liabilities incurred, during the term of the bond. Where a new or 
superseding bond is not filed the surety will, in addition to the 
continuing liabilities specified above, remain liable for all wine, 
spirits, volatile fruit-flavor concentrate, or other commodities subject 
to tax under 26 U.S.C. chapter 51 on hand or in transit to bonded wine 
premises on the date specified in the notice, until all the wine, 
spirits, volatile fruit-flavor concentrate, or commodities subject to 
tax under 26 U.S.C. chapter 51 have been lawfully disposed of, or a new 
bond has been filed covering the liability.
    (c) Tax deferral bond. The surety will be relieved of liability for 
the tax on any wine removed from the bonded wine premises after the date 
specified in the notice. The surety will continue to be liable for the 
tax on wine removed for consumption or sale on or before the date 
specified in the notice, until all tax is fully paid.
    (d) Wine vinegar plant bond. The surety will be relieved of 
liability for tax on wine withdrawn for the manufacture of vinegar after 
the date specified in the notice. The surety will continue to be liable 
for the tax on wine withdrawn on or before the date specified in the 
notice, until all wine is fully accounted for. (Sec. 201, Pub. L. 85-
859, 72 Stat. 1379, as amended, 1380, as amended (26 U.S.C. 5354, 5362))

(Approved by the Office of Management and Budget under control number 
1512-0058)



Sec. 24.159  Release of collateral security.

    Collateral security pledged and deposited will be released only in 
accordance with the provisions of 31 CFR part 225. The collateral 
security will not be released by the appropriate ATF officer until 
liability under the bond for which it was pledged has been terminated. 
If satisfied that the interests of the Government will not be 
jeopardized, the appropriate ATF officer will fix the date or dates on 
which a part or all of the collateral security may be released. At any 
time prior to the release of the collateral security, the appropriate 
ATF officer may, for proper cause, extend the date of release of the 
security for such additional length of time as deemed appropriate. (July 
30, 1947, Ch. 390, Pub. L. 80-280, 61 Stat. 650 (31 U.S.C. 9301, 9303))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]

[[Page 560]]



                  Subpart E--Construction and Equipment



Sec. 24.165  Premises.

    Wine premises will be located, constructed, and equipped, subject to 
approval by the appropriate ATF officer, in a manner suitable for the 
operations to be conducted and to afford adequate protection to the 
revenue. (Sec. 201, Pub. L. 85-859, 72 Stat. 1378, as amended, 1379, as 
amended, 1380, as amended, 1381, as amended (26 U.S.C. 5351, 5352, 5357, 
5361, 5363))

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.166  Buildings or rooms.

    All buildings or rooms on wine premises in which wine operations or 
other operations as are authorized in this part are conducted will be 
located, constructed, and equipped in a manner suitable for the intended 
purpose and to afford adequate protection to the revenue. Each building 
or room will be constructed of substantial materials and separated from 
adjacent or contiguous buildings, rooms, or designated areas in a manner 
satisfactory to the appropriate ATF officer. Where spirits are to be 
received and stored in packages, a storage room equipped for locking 
will be provided. The proprietor shall make provisions to assure ATF 
officers have ready ingress to and egress from any building or room on 
wine premises, and shall furnish at the request of the appropriate ATF 
officer evidence that the means of ingress and egress by ATF officers 
are assured. Where the appropriate ATF officer finds that any building 
or room on wine premises is located, constructed, or equipped as to 
afford inadequate protection to the revenue, the proprietor will be 
required to make changes in location, construction, or equipment to the 
extent necessary to afford adequate protection to the revenue. (Sec. 
201, Pub. L. 85-859, 72 Stat. 1378, as amended, 1379, as amended (26 
U.S.C. 5352, 5357))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.167  Tanks.

    (a) General. All tanks on wine premises used for wine operations or 
for other operations as are authorized in this part will be suitable for 
the intended purpose. Each tank used for wine operations will be 
located, constructed, and equipped as to permit ready examination and a 
means of accurately determining the contents. Any tank used for wine 
operations not enclosed within a building or room will be enclosed 
within a secure fence unless the premises where the tank is located are 
enclosed by a fence or wall, or all tank openings are equipped for 
locking and are locked when used for wine operations and there is no 
proprietor's representative on the wine premises, or the appropriate ATF 
officer has approved some other adequate means of revenue protection. 
All open tanks will be under a roof or other suitable covering.
    (b) Other requirements. Each tank used for the taxpayment of wine, 
storage of spirits, or spirits additions will be constructed and 
equipped as follows:
    (1) An accurate means of measuring the contents of each tank will be 
provided by the proprietor. When a means of measuring is not a permanent 
fixture of the tank, the tank will be equipped with a fixed device to 
allow the approximate contents to be determined readily;
    (2) Safe access to all parts of a tank will be provided by the 
proprietor;
    (3) Tanks may not be used until they are accurately calibrated and a 
statement of certification of accurate calibration is on file at the 
premises;
    (4) If a tank or its means of measuring is changed as to location or 
position subsequent to original calibration, the tank may not be used 
until recalibrated; and

[[Page 561]]

    (5) All openings in tanks used for the storage, weighing, or 
measuring of spirits, or for the addition of spirits to wine, will be 
equipped for locking or have a similar means of revenue protection. Any 
vents, flame arrestors, foam devices, or other safety devices affixed to 
a spirits tank will be constructed to prevent extraction of the contents 
of the tank. (Sec. 201, Pub. L. 85-859, 72 Stat. 1378, as amended, 1379, 
as amended, 1395, as amended (26 U.S.C. 5352, 5357, 5552))

(Approved by the Office of Management and Budget under control number 
1512-0058)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31078, July 9, 1991; T.D. ATF-409, 64 FR 13683, Mar. 22, 1999]



Sec. 24.168  Identification of tanks.

    (a) General. Each tank, barrel, puncheon, or similar bulk container, 
used to ferment wine or used to process or store wine, spirits, or wine 
making materials will have the contents marked and will be marked as 
required by this section.
    (b) Tank markings. (1) Each tank will have a unique serial number;
    (2) Each tank will be marked to show its current use, either by 
permanent markings or by removable signs of durable material; and
    (3) If used to store wine made in accordance with a formula, the 
formula number will be marked or otherwise indicated on the tank.
    (c) Puncheon and barrel markings. Puncheons and barrels, or similar 
bulk containers over 100 gallons capacity, will be marked in the same 
manner as tanks. A permanent serial number need not be marked on 
puncheons and barrels, or similar bulk containers of less than 100 
gallons capacity, used for storage, but the capacity will be permanently 
marked. (Sec. 201, Pub. L. 85-859, 72 Stat. 1378, as amended, 1379, as 
amended (26 U.S.C. 5352, 5357))

(Approved by the Office of Management and Budget under control number 
1512-0503)



Sec. 24.169  Pipelines.

    Pipelines, including flexible hoses, used to convey wine, spirits, 
or volatile fruit-flavor concentrate will be constructed, connected, 
arranged, and secured so as to afford adequate protection to the revenue 
and to permit ready examination. The appropriate ATF officer may approve 
pipelines which cannot be readily examined if no jeopardy to the revenue 
is created. (Sec. 201, Pub. L. 85-859, 72 Stat. 1378, as amended, 1379, 
as amended, 1395, as amended (26 U.S.C. 5352, 5357, 5552))

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.170  Measuring devices and testing instruments.

    (a) Measuring devices. The appropriate ATF officer may at any time 
require proprietors to provide at their own expense equipment for 
ascertaining the capacity and contents of tanks and other storage 
containers, and scales and measuring devices for weighing and measuring 
wine, spirits, volatile fruit-flavor concentrate, or materials received 
and used in the production or treatment of wine. Where winemaking 
materials or other materials used in the treatment of wine are used 
immediately upon receipt on wine premises, or received and stored on 
bonded wine premises in original sealed shipping containers with a 
stated capacity, the quantity shown on the commercial invoice or other 
document covering the shipment may be accepted by the proprietor and 
entered into records in lieu of measuring the materials upon receipt.
    (b) Testing instruments. The proprietor shall have ready access to 
equipment for determining the alcohol content unless the proprietor only 
receives and stores on wine premises bottled or packed wine with 
evidence showing the alcohol content has been determined. The proprietor 
who bottles or packs wine shall have ready access to equipment for 
determining the net contents of bottled or packed wine. The appropriate 
ATF officer may require other testing instruments based upon the 
proprietor's operations. (Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as 
amended, 1395, as amended (26 U.S.C. 5357, 5552))

(Approved by the Office of Management and Budget under control number 
1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]

[[Page 562]]



                      Subpart F--Production of Wine



Sec. 24.175  General.

    The kinds of wine which may be produced on bonded wine premises are 
as follows:
    (a) Natural wine produced in accordance with subparts F and G of 
this part;
    (b) Special natural wine produced in accordance with subpart H of 
this part;
    (c) Agricultural wine produced in accordance with subpart I of this 
part; and
    (d) Other than standard wine produced in accordance with subpart J 
of this part. (Sec. 201, Pub. L. 85-859, 72 Stat. 1380, as amended, 
1383, as amended, 1384, as amended, 1385, as amended, 1386, as amended 
(26 U.S.C. 5361, 5382, 5384, 5385, 5386, 5387))



Sec. 24.176  Crushing and fermentation.

    (a) Natural wine production. Water may be used to flush equipment 
during the crushing process or to facilitate fermentation but the 
density of the juice may not be reduced below 22 degrees Brix. However, 
if the juice is already less than 23 degrees Brix, the use of water to 
flush equipment or facilitate fermentation is limited to a juice density 
reduction of no more than one degree Brix. At the start of fermentation 
no material may be added except water, sugar, concentrated fruit juice 
from the same kind of fruit, malo-lactic bacteria, yeast or yeast 
cultures grown in juice of the same kind of fruit, and yeast foods, 
sterilizing agents, precipitating agents or other approved fermentation 
adjuncts. Water may be used to rehydrate yeast to a maximum to two 
gallons of water for each pound of yeast; however, except for an 
operation involving the preparation of a yeast culture starter and must 
mixture for later use in initiating fermentation, the maximum volume 
increase of the juice after the addition of rehydrated yeast is limited 
to 0.5 percent. After fermentation natural wines may be blended with 
each other only if produced from the same kind of fruit.
    (b) Determination of wine produced. Upon completion of fermentation 
or removal from the fermenter, the volume of wine will be accurately 
determined, recorded and reported on ATF F 5120.17, Report of Bonded 
Wine Premises Operations, as wine produced. Any wine or juice remaining 
in fermentation tanks at the end of the reporting period will be 
recorded and reported on ATF F 5120.17.

[T.D. ATF-312, 56 FR 31078, July 9, 1990, as amended by ATF-338, 58 FR 
19064, Apr. 12, 1993]



Sec. 24.177  Chaptalization (Brix adjustment).

    In producing natural grape wine from juice having a low sugar 
content, pure dry sugar or concentrated grape juice may be added before 
or during fermentation to develop alcohol. In producing natural fruit 
wine from juice having a low sugar content, sugar, or concentrated juice 
of the same kind of fruit may be added before or during fermentation to 
develop alcohol. The quantity of sugar or concentrated juice added may 
not raise the original density of the juice above 25 degrees Brix. If 
grape juice or grape wine is ameliorated after chaptalization, the 
quantity of pure dry sugar added to juice for chaptalization will be 
included as ameliorating material. If fruit juice or fruit wine is 
ameliorated after chaptalization, pure dry sugar added under this 
section is not considered as ameliorating material. However, if fruit 
juice or fruit wine is ameliorated after chaptalization and liquid sugar 
or invert sugar syrup is used to chaptalize the fruit juice, the volume 
of water contained in the liquid sugar or invert sugar syrup will be 
included as ameliorating material. (Sec. 201, Pub. L. 85-859, 72 Stat. 
1385, as amended (26 U.S.C. 5382, 5384))

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31078, July 9, 1991; T.D. ATF-413, 64 FR 46844, Aug. 27, 1999]



Sec. 24.178  Amelioration.

    (a) General. In producing natural wine from juice having a fixed 
acid level exceeding 5.0 grams per liter, the winemaker may adjust the 
fixed acid level by adding ameliorating material (water, sugar, or a 
combination of both) before, during and after fermentation. The fixed 
acid level of the

[[Page 563]]

juice is determined prior to fermentation and is calculated as tartaric 
acid for grapes, malic acid for apples, and citric acid for other fruit. 
Each 20 gallons of ameliorating material added to 1,000 gallons of juice 
or wine will reduce the fixed acid level of the juice or wine by 0.1 
gram per liter (the fixed acid level of the juice or wine may not be 
less than 5.0 gram per liter after the addition of ameliorating 
material).
    (b) Limitations. (1) Amelioration is permitted only at the bonded 
wine premises where the natural wine is produced.
    (2) The ameliorating material added to juice or wine may not reduce 
the fixed acid level of the ameliorated juice or wine to less than 5.0 
grams per liter.
    (3) For all wine, except for wine described in paragraph (b)(4) of 
this section, the volume of ameliorating material added to juice or wine 
may not exceed 35 percent of the total volume of ameliorated juice or 
wine (calculated exclusive of pulp). Where the starting fixed acid level 
is or exceeds 7.69 grams per liter, a maximum of 538.4 gallons of 
ameliorating material may be added to each 1,000 gallons of wine or 
juice.
    (4) For wine produced from any fruit (excluding grapes) or berry 
with a natural fixed acid of 20 parts per thousand or more (before any 
correction of such fruit or berry), the volume of ameliorating material 
added to juice or wine may not exceed 60 percent of the total volume of 
ameliorated juice or wine (calculated exclusive of pulp). If the 
starting fixed acid level is or exceeds 12.5 grams per liter, a maximum 
of 1,500 gallons of ameliorating material may be added to each 1,000 
gallons of wine or juice. (26 U.S.C. 5383, 5384).

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-403, 
64 FR 50253, Sept. 16, 1999; T.D. ATF-458, 66 FR 37578, July 19, 2001]



Sec. 24.179  Sweetening.

    (a) General. In producing natural wine, sugar, juice or concentrated 
fruit juice of the same kind of fruit may be added after fermentation to 
sweeten wine. When juice or concentrated fruit juice is added, the 
solids content of the finished wine may not exceed 21 percent by weight. 
When liquid sugar or invert sugar syrup is used, the resulting volume 
may not exceed the volume which would result from the maximum use of 
pure dry sugar only.
    (b) Grape wine. Any natural grape wine of a winemaker's own 
production may have sugar added after amelioration and fermentation 
provided the finished wine does not exceed 17 percent total solids by 
weight if the alcohol content is more than 14 percent by volume or 21 
percent total solids by weight if the alcohol content is not more than 
14 percent by volume.
    (c) Fruit wine. Any natural fruit wine of a winemaker's own 
production may have sugar added after amelioration and fermentation 
provided the finished wine does not exceed 21 percent total solids by 
weight and the alcohol content is not more than 14 percent by volume.
    (d) Specially sweetened natural wine. Specially sweetened natural 
wine is produced by adding to natural wine of the winemaker's own 
production sufficient pure dry sugar, juice or concentrated fruit juice 
of the same kind of fruit, separately or in combination, so that the 
finished product has a total solids content between 17 percent and 35 
percent by weight, and an alcohol content of not more than 14 percent by 
volume. Natural wine containing added wine spirits may be used in the 
production of specially sweetened natural wine; however, wine spirits 
may not be added to specially sweetened natural wine. Specially 
sweetened natural wines may be blended with each other, or with natural 
wine or heavy bodied blending wine (including juice or concentrated 
fruit juice to which wine spirits have been added), in the further 
production of specially sweetened natural wine only if the wines (or 
juice) so blended are made from the same kind of fruit. (Sec. 201, Pub. 
L. 85-859, 72 Stat. 1383, as amended, 1384, as amended, 1385, as 
amended, 1386, as amended (26 U.S.C. 5382, 5383, 5384, 5385))

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31078, July 9, 1991]



Sec. 24.180  Use of concentrated and unconcentrated fruit juice.

    Concentrated fruit juice reduced with water to its original density, 
or to 22 degrees Brix, or to any degree of Brix

[[Page 564]]

between its original density and 22 degrees Brix, and unconcentrated 
fruit juice reduced with water to not less than 22 degrees Brix, is 
considered juice for the purpose of standard wine production. 
Concentrated fruit juice reduced with water to any degree of Brix 
greater than 22 degrees Brix may be further reduced with water to any 
degree of Brix between its original density and 22 degrees Brix.The 
proprietor, prior to using concentrated fruit juice in wine production, 
shall obtain a statement in which the producer certifies the kind of 
fruit from which it was produced and the total solids content of the 
juice before and after concentration. Concentrated or unconcentrated 
fruit juice may be used in juice or wine made from the same kind of 
fruit for the purposes of chaptalizing or sweetening, as provided in 
this part. Concentrated fruit juice, or juice which has been 
concentrated and reconstituted, may not be used in standard wine 
production if at any time it was concentrated to more than 80 degrees 
Brix. (Sec. 201, Pub. L. 85-859, 72 Stat. 1383, as amended (26 U.S.C. 
5382))

(Approved by the Office of Management and Budget under control number 
1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-413, 
64 FR 46845, Aug. 27, 1999]



Sec. 24.181  Use of sugar.

    Only sugar, as defined in Sec. 24.10, may be used in the production 
of standard wine. The quantity of sugar used will be determined either 
by measuring the increase in volume or by considering that each 13.5 
pounds of pure dry sugar results in a volumetric increase of one gallon. 
(Sec. 201, Pub. L. 85-859, 72 Stat. 1383, as amended, 1384, as amended, 
1385, as amended, 1387, as amended (26 U.S.C. 5382, 5383, 5384, 5392))

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31078, July 9, 1991]



Sec. 24.182  Use of acid to correct natural deficiencies.

    (a) General. Acids of the kinds occurring in grapes or other fruit 
(including berries) may be added within the limitations of Sec. 24.246 
to juice or wine in order to correct natural deficiencies; however, no 
acid may be added to juice or wine which is ameliorated to correct 
natural deficiencies except that in the production of grape wine, 
tartaric acid may be used to reduce the pH of the juice or wine. If 
tartaric acid is used to correct the pH of grape juice or wine, the 
fixed acid level of the juice shall be measured prior to the addition of 
any tartaric acid to determine the maximum quantity of ameliorating 
material allowed. In addition, when using tartaric acid to reduce the pH 
of ameliorated grape juice or wine, the pH cannot be reduced below 3.0.
    (b) Grape wine. Tartaric acid or malic acid, or a combination of 
tartaric acid and malic acid, may be added prior to or during 
fermentation, to grapes or juice from grapes. In addition, after 
fermentation is completed, citric acid, fumaric acid, malic acid, lactic 
acid or tartaric acid, or a combination of two or more of these acids, 
may be added to correct natural deficiencies. However, the use of these 
acids, either prior to, during or after fermentation, may not increase 
the fixed acid level of the finished wine (calculated as tartaric acid) 
above 9.0 grams per liter. In cases where the wine contains 8.0 or more 
grams of total solids per 100 milliliters of wine, acids may be added to 
the extent that the finished wine does not contain more than 11.0 grams 
per liter of fixed acid (calculated as tartaric acid).
    (c) Fruit wine. Only citric acid may be added to citrus fruit, juice 
or wine, only malic acid may be added to apples, apple juice or wine, 
and only citric acid or malic acid may be added to other fruit 
(including berries) or to juice or wine derived from other fruit 
(including berries) to correct natural deficiencies to 9.0 grams per 
liter of finished wine; however, if the wine contains 8.0 or more grams 
of total solids per 100 milliliters of wine, acids may be added to 
correct natural deficiencies to the extent that the finished wine does 
not contain more than 11.0 grams per liter of fixed acid (calculated as 
malic acid for apples and citric acid for other fruit (including 
berries).
    (d) Other use of acid. A winemaker desiring to use an acid other 
than the acids allowed in paragraphs (a) and (b)

[[Page 565]]

of this section to correct natural deficiencies shall follow the 
procedure prescribed in Sec. 24.250. A winemaker desiring to use acid to 
stabilize standard wine shall follow the requirements prescribed by 
Sec. 24.244. (Sec. 201, Pub. L. 85-859, 72 Stat. 1383, as amended (26 
U.S.C. 5382))

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31078, July 9, 1991; T.D. ATF-350, 58 FR 52230, Oct. 7, 1993]



Sec. 24.183  Use of distillates containing aldehydes.

    Distillates containing aldehydes may be received on wine premises 
for use in the fermentation of wine and then returned to the distilled 
spirits plant from which distillates were withdrawn as distilling 
material. Distillates produced from one kind of fruit may not be used in 
the fermentation of wine made from a different kind of fruit. 
Distillates containing aldehydes which are received at bonded wine 
premises and not immediately used will be placed in a locked room or 
tank on bonded wine premises. Distillates containing aldehydes may not 
be mingled with wine spirits. If the distillates contain less than 0.1 
percent of aldehydes, the proprietor shall comply with any additional 
condition relating to the receipt, storage, and use which the 
appropriate ATF officer may require to assure that the distillates are 
properly used and accounted for. (Sec. 201, Pub. L. 85-859, 72 Stat. 
1381, as amended, 1382, as amended (26 U.S.C. 5367, 5373))

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.184  Use of volatile fruit-flavor concentrate.

    (a) General. In the cellar treatment of natural wine of the 
winemaker's own production there may be added volatile fruit-flavor 
concentrate produced from the same kind of fruit or from the same 
variety of berry or grape so long as the proportion of volatile fruit-
flavor concentrate added to the wine does not exceed the equivalent 
proportion of volatile fruit-flavor concentrate of the original juice or 
must from which the wine was produced.
    (b) Use of juice or must from which volatile fruit-flavor has been 
removed. Juice, concentrated fruit juice, or must processed at a 
concentrate plant is considered to be pure juice, concentrated fruit 
juice, or must even though volatile fruit-flavor has been removed if, at 
a concentrate plant or at bonded wine premises, there is added to the 
juice, concentrated fruit juice, or must (or in the case of bonded wine 
premises, to wine of the winemaker's own production made therefrom), 
either the identical volatile fruit-flavor removed or an equivalent 
quantity of volatile fruit-flavor concentrate derived from the same kind 
of fruit or from the same variety of berry or grape.
    (c) Certificate required. The proprietor, prior to the use of 
volatile fruit flavor concentrate in wine production, shall obtain a 
certificate from the producer stating the kind of fruit or the variety 
of berry or grape from which it was produced and the total solids 
content of the juice before and after concentration. (Sec. 201. Pub. L. 
85-859, 72 Stat. 1383, as amended (26 U.S.C. 5382))

(Approved by the Office of Management and Budget under control number 
1512-0298)



               Subpart G--Production of Effervescent Wine



Sec. 24.190  General.

    Effervescent wine may be made on bonded wine premises. Where the 
effervescence results from fermentation of the wine within a closed 
container, the wine is classed and taxed as sparkling wine. The use of 
carbon dioxide, nitrogen gas, or a combination of both, is permitted to 
maintain counterpressure during the transfer and bottling of sparkling 
wine. Wine carbonated by injection of carbon dioxide is classed and 
taxed as artificially carbonated wine. Sparkling wine, artificially 
carbonated wine, and any wine used as a base in the production of 
sparkling wine or artificially carbonated wine, may not have an alcohol 
content in excess of 14 percent by volume. However, wine containing more 
than 14 percent of alcohol by volume may be used in preparing a dosage 
for finishing sparkling wine or artificially carbonated wine. (Sec. 201,

[[Page 566]]

Pub. L. 85-859, 72 Stat. 1383, as amended (26 U.S.C. 5382)).

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31078, July 9, 1991]



Sec. 24.191  Segregation of operations.

    Where more than one process of producing sparkling wine or 
artificially carbonated wine is used, the appropriate ATF officer may 
require the portion of the premises used for the production and storage 
of wine made by each process (bottle fermented, bulk fermented or 
artificially carbonated) to be segregated as provided by Sec. 24.27. 
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended (26 U.S.C. 5365))

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.192  Process and materials.

    In preparing still wine for the production of sparkling wine or 
artificially carbonated wine, sugar and acid of the kinds and within the 
limitations prescribed in Sec. 24.182 may be added with yeast or yeast 
culture to acclimate the yeast and to facilitate the process of 
secondary fermentation or to correct the wine. Fruit syrup, sugar, wine, 
wine spirits, and acid may be used in preparing a finishing dosage for 
sparkling wine or artificially carbonated wine provided the dosage does 
not exceed 10 percent by volume of the finished product. Where the 
proprietor desires to use more than 10 percent by volume finishing 
dosage, the proprietor shall file for a formula approval under 
Sec. 24.80. The fruit syrup, wine spirits and wine used will come from 
the same kind of fruit as the wine from which the sparkling wine or 
artificially carbonated wine is made. In the production of sparkling 
wine or artificially carbonated wine, taxpaid wine spirits or wine 
spirits withdrawn tax-free may be used. Tax-free wine spirits may only 
be used in the production of sparkling wine or artificially carbonated 
wine which is a natural wine. In the refermentation and finishing of a 
sparkling wine, the acids and materials specifically authorized in 
Sec. 24.246 may be used. (Sec. 201, Pub. L. 85-859, 72 Stat. 1383, as 
amended (26 U.S.C. 5382))

(Approved by the Office of Management and Budget under control number 
1512-0059)



Sec. 24.193  Conversion into still wine.

    Sparkling wine or artificially carbonated wine may be dumped for use 
as still wine. The dumping process will allow the loss of carbon dioxide 
remaining in the wine. (Sec. 201, Pub. L. 85-859, 72 Stat. 1331, as 
amended (26 U.S.C. 5041, 5361))



              Subpart H--Production of Special Natural Wine



Sec. 24.195  General.

    Special natural wine is a flavored wine made on bonded wine premises 
from a base of natural wine. The flavoring added may include natural 
herbs, spices, fruit juices, natural aromatics, natural essences or 
other natural flavoring, in quantities or proportions such that the 
resulting product derives character and flavor distinctive from the the 
base wine and distinguishable from other natural wine. Fruit juices may 
not be used to give to one natural wine the flavor of another but may be 
used with herbs or spices to produce a wine having a distinctive flavor. 
Caramel and sugar may be used in a special natural wine. However, the 
minimum 60 degrees Brix limitations prescribed in the definition of 
``Liquid pure sugar'' and ``Invert sugar syrup'' in Sec. 24.10 do not 
apply to materials used in the manufacture of vermouth. Finished 
vermouth will contain a minimum of 80 percent by volume natural wine. 
Heavy bodied blending wine and juice or concentrated fruit juice to 
which wine spirits have been added may be used in the production of 
special natural wine pursuant to formula approval. (Sec. 201, Pub. L. 
85-859, 72 Stat. 1386, as amended (26 U.S.C. 5386))

(Approved by the Office of Management and Budget under control number 
1512-0059)



Sec. 24.196  Formula required.

    Before producing any special natural wine, the proprietor shall 
receive approval of the formula by which it is to be made as provided by 
Sec. 24.80. Any change in a formula will be approved in

[[Page 567]]

advance as provided by Sec. 24.81. (Sec. 201, Pub. L. 85-859, 72 Stat. 
1386, as amended (26 U.S.C. 5386))

(Approved by the Office of Management and Budget under control number 
1512-0059)



Sec. 24.197  Production by fermentation.

    In producing special natural wine by fermentation, flavoring 
materials may be added before or during fermentation. Special natural 
wine produced by fermentation may be ameliorated in the same manner and 
to the same extent as natural wine made from the same fruit. Spirits may 
not be added to special natural wine with the exception of spirits 
contained in the natural wine used as a base or in authorized essences 
made on bonded wine premises as provided in Sec. 24.86 or in approved 
essences made elsewhere. Upon removal of the wine from fermenters, the 
volume of liquid will be determined accurately and recorded as wine 
produced. The quantity of liquid in fermenters at the close of each 
reporting period will be reported on the ATF F 5120.17, Report of Bonded 
Wine Premises Operations. (Sec. 201, Pub. L. 85-859, 72 Stat. 1386, as 
amended (26 U.S.C. 5386))

(Approved by the Office of Management and Budget under control numbers 
1512-0216 and 1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by ATF-338, 58 FR 
19064, Apr. 12, 1993]



Sec. 24.198  Blending.

    Special natural wine may be blended with other special natural wine 
of the same class and kind, and with heavy bodied blending wine, or 
natural wine of the same kind of fruit, in the further production of 
special natural wine. The blending of special natural wines produced 
under different formulas requires the filing and approval of a formula 
authorizing a blending; however, where two or more formulas have been 
approved for the production of special natural wine of the same type, 
e.g., producing a sweet vermouth by blending sweet vermouths produced 
under two or more approved formulas, the submission and approval of an 
additional formula is not required. (Sec. 201, Pub. L. 85-859, 72 Stat. 
1386, as amended (26 U.S.C. 5386))

(Approved by the Office of Management and Budget under control number 
1512-0059)



               Subpart I--Production of Agricultural Wine



Sec. 24.200  General.

    Agricultural wine may be produced on bonded wine premises from 
suitable agricultural products other than the juice of fruit. Water or 
sugar, or both, may be used within the limitations of this subpart in 
the production of agricultural wine. Agricultural wine may not be 
flavored or colored; however, hops may be used in the production of 
honey wine. Spirits may not be used in the production of the wine and a 
wine made from one agricultural product may not be blended with a wine 
made from another agricultural product. Agricultural wine made with 
sugar in excess of the limitations of this subpart is other than 
standard wine and will be segregated and clearly identified. Since 
grain, cereal, malt, or molasses are not suitable materials for the 
production of agricultural wine, these materials may not be received on 
bonded wine premises. Beverage alcohol products made with these 
materials are not classed as wine and may not be produced or stored on 
bonded wine premises. (Sec. 201, Pub. L. 85-859, 72 Stat. 1386, as 
amended (26 U.S.C. 5387))



Sec. 24.201  Formula required.

    Before producing any agricultural wine, the proprietor shall obtain 
an approval of the formula and process by which it is to be made 
pursuant to the provisions of Sec. 24.80. Any change in a formula will 
be approved in advance as provided by Sec. 24.81. (Sec. 201, Pub. L. 85-
859, 72 Stat. 1386, as amended (26 U.S.C. 5387))

(Approved by the Office of Management and Budget under control number 
1512-0059)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13685, Mar. 22, 1999]



Sec. 24.202  Dried fruit.

    In the production of wine from dried fruit, a quantity of water 
sufficient to restore the moisture content to that of

[[Page 568]]

the fresh fruit may be added. If it is desired not to restore the 
moisture content of the dried fruit to that of the fresh fruit, or if 
the moisture content is not known, sufficient water may be added to 
reduce the density to 22 degrees Brix. If the dried fruit liquid after 
restoration is found to be deficient in sugar, sufficient pure dry sugar 
may be added to increase the total solids content to 25 degrees Brix. 
After addition of water to the dried fruit, the resulting liquid may be 
ameliorated with either water or sugar, or both, in such total volume as 
may be necessary to reduce the natural fixed acid level of the mixture 
to a minimum of 5.0 grams per liter; however, in no event may the volume 
of the ameliorating material exceed 35 percent of the total volume of 
the ameliorated juice or wine (calculated exclusive of pulp). Pure dry 
sugar may be used for sweetening. After complete fermentation or 
complete fermentation and sweetening, the finished product may not have 
an alcohol content of more than 14 percent by volume nor may the total 
solids content exceed 35 degrees Brix. (Sec. 201, Pub. L. 85-859, 72 
Stat. 1386, as amended, 1387, as amended (26 U.S.C. 5387))



Sec. 24.203  Honey wine.

    In the production of wine from honey, a quantity of water may be 
added to facilitate fermentation provided the density of the mixture of 
honey and water is not reduced below 22 degrees Brix. Hops may be added 
in quantities not to exceed one pound for each 1,000 pounds of honey. 
Pure dry sugar or honey may be added for sweetening. After complete 
fermentation or complete fermentation and sweetening, the wine may not 
have an alcohol content of more than 14 percent by volume nor may the 
total solids content exceed 35 degrees Brix. (Sec. 201, Pub. L. 85-859, 
72 Stat. 1386, as amended, 1387, as amended (26 U.S.C. 5387))



Sec. 24.204  Other agricultural products.

    In the production of wine from agricultural products, other than 
dried fruit and honey, water and sugar may be added to the extent 
necessary to facilitate fermentation; Provided, That the total weight of 
pure dry sugar used for fermentation is less than the weight of the 
primary winemaking material and the density of the mixture prior to 
fermentation is not less than 22 degrees Brix, if water, or liquid 
sugar, or invert sugar syrup is used. Additional pure dry sugar may be 
used for sweetening, provided the alcohol content of the finished wine 
after complete fermentation or after complete fermentation and 
sweetening, is not more than 14 percent by volume and the total solids 
content is not more than 35 degrees Brix. (Sec. 201, Pub. L. 85-859, 72 
Stat. 1386, as amended, 1387, as amended (26 U.S.C. 5387))



            Subpart J--Production of Other Than Standard Wine



Sec. 24.210  Classes of wine other than standard wine.

    The following classes of wine are not standard wine:
    (a) High fermentation wine, produced as provided in Sec. 24.212;
    (b) Heavy bodied blending wine, produced as provided in Sec. 24.213;
    (c) Spanish type blending sherry, produced as provided in 
Sec. 24.214;
    (d) Wine products not for beverage use, produced as provided in 
Sec. 24.215;
    (e) Distilling material, produced as provided in Sec. 24.216;
    (f) Vinegar stock, produced as provided in Sec. 24.217; and
    (g) Wines other than those in classes listed in paragraphs (a), (b), 
(c), (d), (e), and (f), of this section produced as provided in 
Sec. 24.218. (Sec. 201, Pub. L. 85-859, 72 Stat. 1387, as amended (26 
U.S.C. 5388))



Sec. 24.211  Formula required.

    The proprietor who desires to produce wine other than standard wine 
shall first obtain approval of the formula by which it is to be made, 
except that no formula is required for distilling material or vinegar 
stock. The formula is filed as provided by Sec. 24.80. Any change in the 
formula will be approved in advance as provided by

[[Page 569]]

Sec. 24.81. (Sec. 201, Pub. L. 85-859, 72 Stat. 1387, as amended (26 
U.S.C. 5388))

(Approved by the Office of Management and Budget under control number 
1512-0059)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13685, Mar. 22, 1999]



Sec. 24.212  High fermentation wine.

    High fermentation wine is wine made with the addition of sugar 
within the limitations prescribed for natural wine except that the 
alcohol content after complete fermentation or complete fermentation and 
sweetening is more than 14 percent and wine spirits have not been added. 
Although high fermentation wine is not a standard wine, it is produced, 
stored, and handled on bonded wine premises subject to the same marking 
or labeling requirements. (Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as 
amended, 1387, as amended (26 U.S.C. 5365, 5388))



Sec. 24.213  Heavy bodied blending wine.

    Heavy bodied blending wine is wine made for blending purposes from 
grapes or other fruit without added sugar, and with or without added 
wine spirits, and having a total solids content in excess of 21 percent. 
Heavy bodied blending wine may be used in blending with other wine made 
from the same kind of fruit or for removal upon payment of tax, not for 
sale or consumption as beverage wine. Upon removal, the shipping 
containers and shipping records will be marked ``Heavy Bodied Blending 
Wine--Not for Sale or Consumption as Beverage Wine.'' (Sec. 201, Pub. L. 
85-859, 72 Stat. 1380, as amended, 1387, as amended (26 U.S.C. 5361, 
5388))

(Approved by the Office of Management and Budget under control numbers 
1512-0298 and 1512- 0503)



Sec. 24.214  Spanish type blending sherry.

    Blending wine made with partially caramelized grape concentrate may 
be produced, stored, and handled on, or transferred in bond between, 
bonded wine premises, or removed upon payment of tax, not for sale or 
consumption as beverage wine. Wine of a high solids content and dark in 
color, produced under this section, is designated ``Spanish Type 
Blending Sherry.'' Upon removal, the shipping containers will be marked 
with the applicable designation and the legend ``Not for Sale or 
Consumption as Beverage Wine.'' Spanish type blending sherry is not 
standard wine and may not be blended with standard wine except pursuant 
to an approved formula or in the further production of this type of 
wine. (Sec. 201, Pub. L. 85-859, 72 Stat. 1380, as amended, 1381, as 
amended, 1387, as amended (26 U.S.C. 5361, 5388))

(Approved by the Office of Management and Budget under control numbers 
1512-0059 and 1512-0503)



Sec. 24.215  Wine or wine products not for beverage use.

    (a) General. Wine, or wine products made from wine, may be treated 
with methods or materials which render the wine or wine products unfit 
for beverage use. No wine or wine products so treated may contain more 
than 21 percent of alcohol by volume at the time of withdrawal free of 
tax from bonded wine premises; nor may any wine or wine product so 
withdrawn be used in the compounding of distilled spirits or wine for 
beverage use or in the manufacture of any product intended to be used in 
the compounding. Wine or wine products produced under this section will 
be clearly identified and segregated from beverage wine products while 
stored on bonded wine premises and may be transferred in bond between 
bonded wine premises. The shipping records for transfers in bond of 
nonbeverage wine or wine products will be marked ``Not for Sale or 
Consumption as Beverage Wine.'' Upon removal from bonded wine premises 
free of tax, containers of nonbeverage wine or wine products will be 
marked to clearly indicate such products are not for sale or consumption 
as beverage wine, e.g., salted wine, vinegar, nonbeverage cooking wine.
    (b) Salted wine. Salted wine is a wine or wine product not for 
beverage use produced in accordance with the provisions of this section 
and having not less than 1.5 grams of salt per 100 milliliter of wine. 
(12.5 pounds of salt/100 gallons of wine.)
    (c) Vinegar. Vinegar is a wine or wine product not for beverage use 
produced in accordance with the provisions of

[[Page 570]]

this section and having not less than 4.0 grams (4.0 percent) of 
volatile acidity (calculated as acetic acid and exclusive of sulfur 
dioxide) per 100 milliliters of wine. (Sec. 201, Pub. L. 85-859 and Sec. 
455, Pub. L. 98-369, 72 Stat. 1380, as amended (26 U.S.C. 5361, 5362))

(Approved by the Office of Management and Budget under control number 
1512-0503)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31079, July 9, 1991]



Sec. 24.216  Distilling material.

    Wine may be produced on bonded wine premises from grapes and other 
fruit, natural fruit products, or fruit residues, for use as distilling 
material, using any quantity of water desired to facilitate fermentation 
or distillation. No sugar may be added in the production of distilling 
material. Distillates containing aldehydes may be used in the 
fermentation of wine to be used as distilling material. Lees, filter 
wash, and other wine residues may also be accumulated on bonded wine 
premises for use as distilling material. (Sec. 201, Pub. L. 85-859, 72 
Stat. 1380, as amended, 1381, as amended, 1382, as amended (26 U.S.C. 
5361, 5373))



Sec. 24.217  Vinegar stock.

    Vinegar stock may be produced on bonded wine premises with the 
addition of any quantity of water desired to meet commercial standards 
for the production of vinegar. Vinegar stock may be made only by the 
addition of water to wine or by the direct fermentation of the juice of 
grapes or other fruit with added water. (Sec. 201, Pub. L. 85-859, 72 
Stat. 1380, as amended, 1381, as amended (26 U.S.C. 5361))



Sec. 24.218  Other wine.

    (a) General. Other than standard wine not included in other sections 
in this subpart are considered other wine. Those wines considered to be 
other wine include:
    (1) Wine made with sugar, water, or sugar and water beyond the 
limitations prescribed for standard wine.
    (2) Wine made by blending wines produced from different kinds of 
fruit.
    (3) Wine made with sugar other than pure dry sugar, liquid pure 
sugar, and invert sugar syrup.
    (4) Wine made with materials not authorized for use in standard 
wine.
    (b) Production of other wine. Other wine may be made on bonded wine 
premises but will remain segregated from standard wine. Other wine will 
have a basic character derived from the primary winemaking material. If 
sugar is used to make other wine, the aggregate weight of the sugar used 
before and during fermentation will be less than the weight of the 
primary wine producing material. Wine spirits may be added to other 
wine. Upon removal, other wine will be marked or labeled with a 
designation which will adequately disclose the nature and composition of 
the wine. (Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended, 1387, as 
amended (26 U.S.C. 5365, 5388))

(Approved by the Office of Management and Budget under control number 
1512-0503)



                           Subpart K--Spirits



Sec. 24.225  General.

    The proprietor of a bonded wine premises may withdraw and receive 
spirits without payment of tax from the bonded premises of a distilled 
spirits plant for uses as are authorized in this part. Wine spirits 
produced in the United States may be added to natural wine on bonded 
wine premises if both the wine and the spirits are produced from the 
same kind of fruit. In the case of natural still wine, wine spirits may 
be added in any State only to wine produced by fermentation on bonded 
wine premises located within the same State. If wine has been 
ameliorated, wine spirits may be added (whether or not wine spirits were 
previously added) only if the wine contains not more than 14 percent of 
alcohol by volume derived from fermentation. Spirits other than wine 
spirits may be received, stored and used on bonded wine premises only 
for the production of nonbeverage wine and nonbeverage wine products. 
Wooden storage tanks used for the addition of spirits may be used for 
the baking of wine. (Sec. 201, Pub. L. 85-859 and Sec. 455, Pub. L. 98-
369, 72 Stat. 1381 as amended, 1382, as

[[Page 571]]

amended, 1383, as amended, 1384, as amended (26 U.S.C. 5366, 5373, 5382, 
5383)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31079, July 9, 1991]



Sec. 24.226  Receipt or transfer of spirits.

    When spirits are received at the bonded wine premises, the 
proprietor shall determine that the spirits are the same as described on 
the transfer record and follow the procedures prescribed by 27 CFR 
19.510. A copy of the transfer record, annotated to show any difference 
between the description of spirits and quantity received, will be 
maintained by the proprietor as a record of receipt. If spirits are to 
be transferred to a distilled spirits plant or to bonded wine premises, 
the proprietor shall use the transfer record and procedures prescribed 
by 27 CFR 19.508. (Sec. 201, Pub. L. 85-859, 72 Stat. 1382, as amended 
(26 U.S.C. 5373))

(Approved by the Office of Management and Budget under control number 
1512-0298)



Sec. 24.227  Transfer of spirits by pipeline for immediate use.

    Spirits transferred by pipeline for immediate use are gauged either 
by weight or by volume on the bonded premises of the distilled spirits 
plant. Where the spirits are gauged on the bonded premises of the 
distilled spirits plant, the pipelines will be directly connected with 
the spirits addition tanks. The valves in the pipeline will be closed 
and locked with a lock at all times except when necessary to be opened 
for the transfer of spirits. Where the proprietor has placed wine in a 
spirits addition tank and has determined the quantity of spirits to be 
added, the spirits may be transferred. (Sec. 201, Pub. L. 85-859, 72 
Stat. 1382, as amended (26 U.S.C. 5373))

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31079, July 9, 1991]



Sec. 24.228  Transfer of spirits by pipeline to a spirits storage tank.

    Where it is desired to transfer spirits by pipeline to bonded wine 
premises and store the spirits prior to use, there will be provided a 
suitable tank for storing the spirits. The spirits to be transferred, if 
not gauged on the bonded premises of the distilled spirits plant, will 
be gauged by weight or volume on bonded wine premises. (Sec. 201, Pub. 
L. 85-859, 72 Stat. 1382, as amended (26 U.S.C. 5373))

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31079, July 9, 1991]



Sec. 24.229  Tank car and tank truck requirements.

    Railroad tank cars and tank trucks used to transport spirits for use 
in wine production will be constructed, marked, filled, labeled, and 
inspected in the manner required by regulations in 27 CFR part 19. (Sec. 
201, Pub. L. 85-859, 72 Stat. 1360, as amended, 1362, as amended (26 
U.S.C. 5206, 5214))



Sec. 24.230  Examination of tank car or tank truck.

    Upon arrival of a tank car or tank truck at the bonded wine 
premises, the proprietor shall carefully examine the car or truck to see 
whether the seals are intact and whether there is any evidence of 
tampering or loss by leaking or otherwise. Any evidence of loss will be 
reported to the appropriate ATF officer. The contents of the tank car or 
tank truck will be gauged by weight or volume at the time of receipt by 
the proprietor. If the tank car or tank truck has been accurately 
calibrated and the calibration chart is available at the bonded wine 
premises, the spirits may be gauged by volume in the tank car or tank 
truck. In any case where a volume gauge is made, the actual measurements 
of the spirits in the gauging tank, tank car, or tank truck, and the 
temperature of the spirits will be recorded on the copy of the transfer 
record accompanying the shipment. (Sec. 201, Pub. L. 85-859, 72 Stat. 
1360, as amended, 1362, as amended, 1381, as amended (26 U.S.C. 5206, 
5214, 5366))

(Approved by the Office of Management and Budget under control number 
1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13684, Mar. 22, 1999]



Sec. 24.231  Receipt of spirits in sealed bulk containers.

    The proprietor shall examine sealed bulk containers (packages) of 
spirits

[[Page 572]]

received at the bonded wine premises to verify that the containers are 
the same as those described on the transfer record accompanying the 
shipment. Any container which appears to have been tampered with or from 
which spirits appear to have been removed or lost will be gauged by the 
proprietor and the proprietor shall prepare and submit to the 
appropriate ATF officer a statement setting forth fully the 
circumstances and apparent cause of any loss. (Sec. 201, Pub. L. 85-859, 
72 Stat. 1381, as amended, 1382, as amended (26 U.S.C. 5366, 5367, 5368, 
5373))

(Approved by the Office of Management and Budget under control numbers 
1512-0292 and 1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.232  Gauge of spirits.

    (a) If the spirits to be used are in a spirits storage tank on 
bonded wine premises, or are received immediately prior to use from a 
distilled spirits plant not adjacent or contiguous to bonded wine 
premises, the proprietor shall determine the proof of the spirits and 
the quantity used by volume gauge or by weight. Upon completion of the 
transfer of spirit from the spirits storage tank to the spirits addition 
tank, the proprietor shall lock the spirits storage tank.
    (b) If the spirits are received from the adjacent or contiguous 
bonded premises of a distilled spirits plant and are transferred 
directly into a spirits addition tank, the gauge of the spirits made on 
the distilled spirits plant premises will be used. The proprietor at the 
distilled spirits plant premises shall deliver a transfer record to the 
proprietor of bonded wine premises who shall acknowledge receipt of the 
spirits on the transfer record.
    (c) If the spirits are received in packages and the quantity of 
spirits needed for the addition is not equal to the contents of full 
packages, a portion of one package may be used and the remnant package 
returned to the spirits storage room. The proprietor shall gauge the 
remnant package and attach to it a label showing the date of gauge, the 
weight of the remnant package, and the proof. The remnant package will 
be used at the first opportunity. (Sec. 201, Pub. L. 85-859, 72 Stat. 
1381, as amended, 1382, as amended (26 U.S.C. 5367, 5368, 5373))

(Approved by the Office of Management and Budget under control number 
1512-0298)



Sec. 24.233  Addition of spirits to wine.

    (a) Prior to the addition of spirits. Wine will be placed in tanks 
approved for the addition of spirits. The proprietor shall accurately 
measure the wine, determine its alcohol content, determine the proof of 
the spirits to be added, calculate the quantity of spirits required, and 
enter the details in the record of spirits added to wine.
    (b) After the addition of spirits. The proprietor shall thoroughly 
agitate the contents of the tank to assure a complete mixture of the 
wine and spirits. The proprietor shall then measure the volume of wine 
in the tank, take a representative sample of the wine, and test for 
alcohol content. The result of the measurement and test and the quantity 
of spirits added will be entered in the record of spirits added to wine. 
The volume of wine used and the volume of wine resulting from the 
addition of spirits will be entered in the bulk wine record. The alcohol 
content of wine after the addition of spirits may not exceed 24 percent 
by volume. (Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended, 1382, 
as amended, 1383, as amended (26 U.S.C. 5367, 5373, 5382))

(Approved by the Office of Management and Budget under control number 
1512-0298)



Sec. 24.234  Other use of spirits.

    The proprietor producing sparkling wine, artificially carbonated 
wine, formula wine, or essences for which spirits are required may use 
tax-free wine spirits or brandy. For nonbeverage wine, tax-free spirits 
other than wine spirits or brandy may also be used. The spirits received 
by the proprietor will be locked in a secure room or locker on bonded 
wine premises. The spirits will remain in the original container in the 
storeroom until withdrawn for use. (Sec. 201, Pub. L. 85-859, 72 Stat. 
1382, as amended, 1383, as amended (26 U.S.C. 5373, 5382))

[[Page 573]]



Sec. 24.235  Taxpayment or destruction of spirits.

    (a) Taxpayment of spirits. The proprietor who wants to taxpay 
spirits shall follow the prepayment of tax procedures of 27 CFR 
19.522(c).
    (b) Destruction of spirits. The proprietor who wants to destroy 
spirits shall file an application with the appropriate ATF officer 
stating the quantity of spirits, the proposed date and method of 
destruction, and the reason for destruction. Spirits may not be 
destroyed prior to approval by the area supervisor. (Sec. 201, Pub. L. 
85-859, 72 Stat. 1382, as amended (26 U.S.C. 5373))

(Approved by the Office of Management and Budget under control number 
1512-0292)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13684, Mar. 22, 1999]



Sec. 24.236  Losses of spirits.

    Losses by theft or any other cause of spirits while on bonded wine 
premises or in transit are to be determined and reported at the time the 
losses are discovered. A physical inventory of the spirits storage tanks 
will be taken at the close of any month during which spirits were used 
in wine production, or upon completion of spirits use for the month or 
at any other time required by the appropriate ATF officer. Any loss 
which has not previously been reported will be determined by the 
inventory. (Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended (26 
U.S.C. 5008, 5373))

(Approved by the Office of Management and Budget under control number 
1512-0292)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.237  Spirits added to juice or concentrated fruit juice.

    Juice or concentrated fruit juice to which spirits have been added 
may not have an alcohol content exceeding 24 percent by volume. Although 
not considered to be wine, juice or concentrated fruit juice to which 
spirits have been added will be included in the appropriate tax class of 
any wine inventory and will be properly identified. Juice or 
concentrated juice to which wine spirits are added will be reported on 
the ATF F 5120.17, Report of Bonded Wine Premises Operations, as wine, 
but a separate record will be maintained. (Sec. 201, Pub. L. 85-859, 72 
Stat. 1383, as amended (26 U.S.C. 5382))

(Approved by the Office of Management and Budget under control numbers 
1512-0216 and 1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-338, 
58 FR 19064, Apr. 12, 1993]



           Subpart L--Storage, Treatment and Finishing of Wine



Sec. 24.240  General.

    Wine will be stored on bonded wine premises in buildings or tanks 
constructed and secured in accordance with the provisions of 
Secs. 24.166 and 24.167. Wine will be stored in tanks, casks, barrels, 
cased or uncased bottles, or in any other suitable container, which will 
not contaminate the wine. Specifically authorized materials and 
processes for the treatment and finishing of wine are listed in 
Secs. 24.246 and 24.248 of this subpart. (Sec. 201, Pub. L. 85-859, 72 
Stat. 1378, as amended, 1379, as amended, 1383, as amended, 1395, as 
amended (26 U.S.C. 5352, 5357, 5382, 5552))

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31079, July 9, 1991]



Sec. 24.241  Decolorizing juice or wine.

    (a) Conditions and limitations. If the proprietor wishes to use 
activated carbon or other decolorizing material to remove color from 
juice or wine, the following conditions and limitations will be met:
    (1) The wine will retain a vinous character after being treated with 
activated carbon or other decolorizing material;
    (2) The quantity of activated carbon used to treat the wine, 
including the juice from which the wine was produced, may not exceed 
twenty-five pounds per 1,000 gallons (3.0 grams per liter) (see 
paragraph (b) of this section); and
    (3) The wine treated with decolorizing material will have a color of 
not less than 0.6 Lovibond in a one-half inch cell or not more than 95 
percent transmittance per AOAC Method

[[Page 574]]

11.003-11.004 (see paragraph (c) of this section). However, the 
proprietor may produce a wine having a color of less than 0.6 Lovibond 
or more than 95 percent transmittance per AOAC Method 11.003-11.004 by 
using normal methods and without the use of decolorizing material.
    (b) Transfer in bond. When a consignor proprietor transfers wine 
treated with activated carbon or other decolorizing material to a 
consignee proprietor, the consignor proprietor shall record on the 
shipping record:
    (1) The amount of wine which has been treated under the provisions 
of this section; and
    (2) The quantity of decolorizing material used in treating the wine, 
including the juice from which the wine was produced, before its 
transfer. The consignee proprietor may further treat the wine with 
decolorizing material as long as the consignee proprietor has a copy of 
the shipping record and complies with the requirements of this section.
    (c) Incorporation by reference. The ``Official Methods of Analysis 
of the Association of Official Analytical Chemists'' (AOAC Method 
11.003-11.004; 13th Edition 1980) is incorporated by reference in this 
part. This incorporation by reference was approved by the Director of 
the Federal Register, and is available for inspection at the Office of 
the Federal Register, 800 North Capitol Street, NW., suite 700, 
Washington, DC. The publication is available from the Association of 
Official Analytical Chemists, 11 North 19th Street, Suite 210, 
Arlington, Virginia 22209. (Sec. 201, Pub. L. 85-859, 72 Stat. 1383, as 
amended (26 U.S.C. 5382))

(Approved by the Office of Management and Budget under control number 
1512-0298)



Sec. 24.242  Authority to use greater quantities of decolorizing material in juice or wine.

    (a) Proprietor's notice. If the proprietor desires to remove color 
from juice prior to fermentation or if color in excess of that normally 
present in wine develops during the production or storage of a 
particular lot or lots, and if the proprietor desires to use activated 
carbon in excess of twenty-five pounds per 1,000 gallons (3.0 grams per 
liter) of juice or wine to remove this color, the proprietor, prior to 
starting the treatment, shall submit to the appropriate ATF officer a 
written notice for each lot of juice or wine to be treated for 
decolorization. The written notice will state
    (1) The reason for the treatment;
    (2) The volume, kind, and type of juice or wine to be treated;
    (3) The kind and quantity of decolorizing material to be used; and,
    (4) The length of time the decolorizing material is in contact with 
the juice or wine.
    (b) Action by the appropriate ATF officer on proprietor's notice. 
Upon receipt of the proprietor's notice, the appropriate ATF officer may 
require the proprietor to submit samples representative of the lot of 
juice or wine for examination by the ATF laboratory.
    (c) Samples and chemical analysis--(1) Samples. If the appropriate 
ATF officer requires samples under paragraph (b) of this section, the 
proprietor shall prepare samples representative of the lot of juice or 
wine for examination. The samples will consist of:
    (i) The juice or wine before treatment with decolorizing material,
    (ii) The juice or wine after treatment with decolorizing material, 
and
    (iii) The decolorizing material used.
    (2) Chemical analysis. If the ATF chemical analyses of the samples 
shows that the proposed treatment would remove only color and will not 
remove the vinous characteristics of the wine, the appropriate ATF 
officer will return an approved copy of the proprietor's written notice. 
If the ATF chemical analysis shows that the proposed treatment is not 
acceptable, the appropriate ATF officer will send the proprietor a 
letter stating the reason(s) for disallowing the proposed treatment. 
(Sec. 201, Pub. L. 85-859, 72 Stat. 1383, as amended (26 U.S.C. 5382))

(Approved by the Office of Management and Budget under control numbers 
1512-0292 and 1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.243  Filtering aids.

    Inert fibers, pulps, earths, or similar materials, may be used as 
filtering aids in the cellar treatment and finishing of

[[Page 575]]

wine. Agar-agar, carrageenan, cellulose, and diatomaceous earth are 
commonly employed inert filtering and clarifying aids. In general, there 
is no limitation on the use of inert materials and no records need be 
maintained concerning their use. However, if the inert material is 
dissolved in water prior to addition to wine, then the records required 
by Sec. 24.301 will be maintained. Filtering aids which contain active 
chemical ingredients or which may alter the character of wine, may be 
used only in accordance with the provisions of Sec. 24.246. (Sec. 201, 
Pub. L. 85-859, 72 Stat. 1383, as amended (26 U.S.C. 5382))

(Approved by the Office of Management and Budget under control number 
1512-0298)



Sec. 24.244  Use of acid to stabilize standard wine.

    Standard wine other than citrus wine, regardless of the fixed acid 
level, may be stabilized as a part of the finishing process by the 
addition of citric acid within the limitations of Sec. 24.246. Standard 
wine (including citrus wine) may be stabilized by the addition of 
fumaric acid within the limitations of Sec. 24.246. (Sec. 201, Pub. L. 
85-859, 72 Stat. 1383, as amended (26 U.S.C. 5382))



Sec. 24.245  Use of carbon dioxide in still wine.

    The addition of carbon dioxide to (and retention in) still wine is 
permitted if at the time of removal for consumption or sale the still 
wine does not contain more than 0.392 grams of carbon dioxide per 100 
milliliters of wine. However, a tolerance of not more than 0.009 grams 
per 100 milliliters to the maximum limitation of carbon dioxide in still 
wine will be allowed where the amount of carbon dioxide in excess of 
0.392 grams per 100 milliliters is due to mechanical variations which 
can not be completely controlled under good commercial practice. A 
tolerance will not be allowed where it is found that the proprietor 
continuously or intentionally exceeds 0.392 grams of carbon dioxide per 
100 milliliters of wine or where the variation results from the use of 
methods or equipment determined by the appropriate ATF officer not in 
accordance with good commercial practice. The proprietor shall determine 
the amount of carbon dioxide added to wine using authorized test 
procedures. Penalties are provided in 26 U.S.C. 5662 for any person who, 
whether by manner of packaging or advertising or by any other form of 
representation, misrepresents any still wine to be effervescent wine or 
a substitute for effervescent wine. (Sec. 201, Pub. L. 85-859, 72 Stat. 
1331, as amended, 1381, as amended, 1407, as amended (26 U.S.C. 5041, 
5367, 5662))

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



Sec. 24.246  Materials authorized for the treatment of wine and juice.

    (a) Wine. Materials used in the process of filtering, clarifying, or 
purifying wine may remove cloudiness, precipitation, and undesirable 
odors and flavors, but the addition of any substance foreign to wine 
which changes the character of the wine, or the abstraction of 
ingredients which will change its character, to the extent inconsistent 
with good commercial practice, is not permitted on bonded wine premises. 
The materials listed in this section are approved, as being consistent 
with good commercial practice in the production, cellar treatment, or 
finishing of wine, and where applicable in the treatment of juice, 
within the general limitations of this section: Provided, That:
    (1) When the specified use or limitation of any material on this 
list is determined to be unacceptable by the U.S. Food and Drug 
Administration, the appropriate ATF officer may cancel or amend the 
approval for use of the material in the production, cellar treatment, or 
finishing of wine; and
    (2) Where water is added to facilitate the solution or dispersal of 
a material, the volume of water added, whether the material is used 
singly or in combination with other water based treating materials, may 
not total more than one percent of the volume of the treated wine, 
juice, or both wine and juice, from which such wine is produced.
    (b) Formula wine. In addition to the material listed in this 
section, other material may be used in formula wine if approved for such 
use.

[[Page 576]]



          Materials Authorized for Treatment of Wine and Juice
------------------------------------------------------------------------
         Materials and use                 Reference or limitation
------------------------------------------------------------------------
Acacia (gum arabic): To clarify and  The amount used shall not exceed 2
 to stabilize wine.                   lbs/1000 gals. (0.24 g/L of wine.
                                      21 CFR 184.1330 (GRAS) *See
                                      footnote below.
Activated carbon:
    To assist precipitation during   27 CFR 24.176. GRAS per FDA
     fermentation.                    advisory opinion dated 1/26/79.
    To clarify and to purify wine..  The amount used to clarify and
                                      purify wine shall be included in
                                      the total amount of activated
                                      carbon used to remove excessive
                                      color in wine. 27 CFR 24.241 and
                                      24.242 (GRAS).
    To remove color in wine and/or   The amount used to treat the wine,
     juice from which the wine was    including the juice from which the
     produced.                        wine was produced, shall not
                                      exceed 25 lbs/1000 gal. (3.0 g/L).
                                      If the amount necessary exceeds
                                      this limit, a notice is required
                                      pursuant to 27 CFR 24.242 (GRAS).
Albumen (egg white): Fining agent    May be prepared in a light brine 1
 for wine.                            oz. (28.35 grams) potassium
                                      chloride, 2 lbs (907.2 grams) egg
                                      white, 1 gal. (3.785 L) of water.
                                      Usage not to exceed 1.5 gals. of
                                      solution per 1,000 gals. of wine.
                                      (GRAS).
Alumino-silicates (hydrated) e.g.,   21 CFR Secs.  182.2727, 182.2729,
 Bentonite (Wyoming clay) and         184.1155 (GRAS) and 186.1256. GRAS
 Kaolin: To clarify and to            per FDA advisory opinion dated
 stabilize wine or juice.             July 26, 1985.
Ammonium phosphate (mono- and di     The amount used shall not exceed 8
 basic): Yeast nutrient in wine       lbs. per 1000 gals. (0.96 g/L) of
 production and to start secondary    wine. 21 CFR 184.1141 (GRAS).
 fermentation in the production of
 sparkling wines.
Ascorbic acid iso-ascorbic acid      May be added to grapes, other fruit
 (erythorbic acid): To prevent        (including berries), and other
 oxidation of color and flavor        primary wine making materials, or
 components of juice and wine.        to the juice of such materials, or
                                      to the wine, within limitations
                                      which do not alter the class or
                                      type of the wine. 21 CFR 182.3013
                                      and 182.3041 (GRAS).
Calcium carbonate (with or without
 calcium salts of tartaric and
 malic acids):
    To reduce the excess natural     The natural or fixed acids shall
     acids in high acid wine, and     not be reduced below 5 g/L. 21 CFR
     in juice prior to or during      184.1069 and 184.1099, and
     fermentation..                   184.1191 (GRAS).
      A fining agent for cold        The amount used shall not exceed 30
     stabilization..                  lbs/1000 gals. (3.59 g/L) of wine.
Calcium sulfate (gypsum): To lower   The sulfate content of the finished
 pH in sherry wine..                  wine shall not exceed 2.0g/L,
                                      expressed as potassium sulfate. 27
                                      CFR 24.214. 21 CFR 184.1230
                                      (GRAS).
Carbon dioxide (including food       27 CFR 24.245.
 grade dry ice): To stabilize * * *  21 CFR 184.1240 (GRAS).
 and to preserve wine.
Casein, potassium salt of casein:    GRAS per FDA opinions of 02/23/60
 To clarify wine.                     and 08/25/61. 27 CFR 24.243.
Citric acid:
    To correct natural acid          27 CFR 24.182 and 24.192.
     deficiencies in wine.           21 CFR 182.1033 (GRAS).
    To stabilize wine other than     The amount of citric acid shall not
     citrus wine.                     exceed 5.8 lbs/1000 gals. (0.7 g/
                                      L). 27 CFR 24.244. 21 CFR 182.1033
                                      (GRAS).
Copper sulfate:
    To remove hydrogen sulfide and/  The quantity of copper sulfate
     or mercaptans from wine.         added (calculated as copper) shall
                                      not exceed 0.5 part copper per
                                      million parts of wine (0.5 mg/L)
                                      with the residual level of copper
                                      not to be in excess of 0.5 part
                                      per million (0.5 mg/L). 21 CFR
                                      184.1261 (GRAS).
Defoaming agents (polyoxyethylene    Defoaming agents which are 100%
 40 monostearate, silicon dioxide,    active may be used in amounts not
 dimethylpoly-siloxane, sorbitan      exceeding 0.15 lbs/1000 gals.
 monostearate, glyceryl mono-oleate   (0.018 g/L of wine. Defoaming
 and glyceryl dioleate): To control   agents which are 30% active may be
 foaming, fermentation adjunct.       used in amounts not exceeding 0.5
                                      lbs/1000 gals. (0.06 g/L) of wine.
                                      Silicon dioxide shall be
                                      completely removed by filtration.
                                      The amount of silicon remaining in
                                      the wine shall not exceed 10 parts
                                      per million. 21 CFR 173.340 and
                                      184.1505.
Dimethyl dicarbonate:
    To sterilize and to stabilize    Must meet the conditions prescribed
     wine, dealcoholized wine, and    by FDA in 21 CFR 172.133. DMDC may
     low alcohol wine.                be added to wine, dealcoholized
                                      wine, and low alcohol wine in a
                                      cumulative amount not to exceed
                                      200 parts per million (ppm).
Enzymatic activity: Various uses as  The enzyme preparation used shall
 shown below.                         be prepared from nontoxic and
                                      nonpathogenic microorganisms in
                                      accordance with good manufacturing
                                      practice and be approved for use
                                      in food by either FDA regulation
                                      or by FDA advisory opinion.
    Carbohydrase (alpha-Amylase):    The amylase enzyme activity shall
     To convert starches to           be derived from Aspergillus niger,
     fermentable carbohydrates.       Aspergillus oryzae, Bacillus
                                      subtilis, or barley malt per FDA
                                      advisory opinion of 8/18/83 or
                                      from Rhizopus oryzae per 21 CFR
                                      173.130 or from Bacillus
                                      licheniformis per 21 CFR 184.1027.

[[Page 577]]

 
    Carbohydrase (beta-Amylase): To  The amylase enzyme activity shall
     convert starches to              be derived from barley malt per
     fermentable carbohydrates.       FDA advisory opinion dated 8/18/
                                      83.
    Carbohydrase (Glucoamylase,      The amylase enzyme activity shall
     Amylogluco-sidase): To convert   be derived from Aspergillus niger
     starches to fermentable          or Aspergillus oryzae per FDA
     carbohydrates.                   advisory opinion dated 8/18/83 or
                                      from Rhizopus oryzae per 21 CFR
                                      173.130 or from Rhizopus niveus
                                      per 21 CFR 173.110.
    Catalase: To clarify and to      The enzyme activity used shall be
     stabilize wine.                  derived from Aspergillus niger or
                                      bovine liver per FDA advisory
                                      opinion dated 8/18/83 (GRAS).
    Cellulase: To clarify and to     The enzyme activity used shall be
     stabilize wine and to            derived from Aspergillus niger per
     facilitate separation of the     FDA advisory opinion dated 8/18/83
     juice from the fruit.            (GRAS).
    Glucose oxidase: To clarify and  The enzyme activity used shall be
     to stabilize wine.               derived from Aspergillus niger per
                                      FDA advisory opinion of 8/18/83
                                      (GRAS).
    Pectinase: To clarify and to     The enzyme activity used shall be
     stabilize wine and to            derived from Aspergillus niger per
     facilitate separation of juice   FDA advisory opinion dated 8/18/83
     from the fruit.                  (GRAS).
    Protease (general): To reduce    The enzyne activity used shall be
     or to remove heat labile         derived from Aspergillus niger or
     proteins.                        Bacillus subtilis per FDA advisory
                                      opinion dated 08/18/83 or from
                                      Bacillus licheniformis per 21 CFR
                                      184.1027 (GRAS).
    Protease (Bromelin): To reduce   The enzyme activity used shall be
     or to remove heat labile         derived from Ananus comosus or
     proteins.                        Ananus bracteatus (L) per FDA
                                      advisory opinion dated 08/18/83
                                      (GRAS).
    Protease (Ficin): To reduce or   The enzyme activity used shall be
     to remove heat labile proteins.  derived from Ficus spp. per FDA
                                      advisory opinion dated 08/18/83
                                      (GRAS).
    Protease (Papain): To reduce or  The enzyme activity used shall be
     to remove heat labile proteins.  deived from Carica papaya (L) per
                                      21 CFR 184.1585 (GRAS).
    Protease (Pepsin): To reduce or  The enzyme actvity used shall be
     to remove heat labile proteins.  derived from porcine or bovine
                                      stomachs per FDA advisory opinion
                                      dated 08/18/83 (GRAS).
    Protease (Trypsin): To reduce    The enzyme activity used shall be
     or to remove heat labile         derived from porcine or bovine
     proteins.                        pancreas per FDA advisory opinion
                                      dated 08/18/83 (GRAS).
    Urease: To reduce levels of      The urease enzyme activity shall be
     naturally occurring urea in      derived from Lactobacillus
     wine to help prevent the         fermentum per 21 CFR 184.1924. Use
     formation of ethyl carbamate.    is limited to not more than 200 mg/
                                      L and must be filtered prior to
                                      final packaging of the wine.
Ethyl maltol: To stabilize wine....  Use authorized at a maximum level
                                      of 100mg/L in all standard wines
                                      except natural wine produced from
                                      Vitis vinifera grapes. FDA
                                      advisory opinion dated 12/1/86.
Ferrocyanide compounds (sequestered  No insoluble or soluble residue in
 complexes): To remove trace metal    excess of 1 part per million shall
 from wine and to remove              remain in the finished wine and
 objectionable levels of sulfide      the basic character of the wine
 and mercaptans from wine.            shall not be changed by such
                                      treatment. GRAS per FDA advisory
                                      opinion of 06/22/82.
Ferrous sulfate: To clarify and to   The amount used shall not exeed 3
 stabilize wine.                      ozs./1000 gals. (0.022 g/L) of
                                      wine. 21 CFR 184.1315 (GRAS).
Fumaric acid:
    To correct natural acid          The fumaric acid content of the
     deficiencies in grape wine.      finished wine shall not exceed 25
                                      lbs/1000 gals (3.0 g/L). 27 CFR
                                      24.182 and 24.192. 21 CFR 172.350.
    To stabilize wine..............  The fumaric acid content of the
                                      finished wine shall not exceed 25
                                      lbs/1000 gals (3.0 g/L). 27 CFR
                                      24.244. 21 CFR 172.350.
Gelatin (food grade): To clarify     (GRAS).
 juice or wine.
Granular cork: To smooth wine......  The amount used shall not exceed 10
                                      lbs/1000 gals. of wine (1.2 g/L).
                                      GRAS per FDA advisory opinion
                                      dated 02/25/85.
Isinglass: To clarify wine.........  GRAS per FDA advisory opinion dated
                                      02/25/85.
Lactic acid: To correct natural      27 CFR 24.182 and 24.192.
 acid deficiencies in grape wine.    21 CFR 184.1061 (GRAS).
Malic acid: To correct natural acid  27 CFR 24.182 and 24.192. 21 CFR
 deficiencies in juice or wine.       184.1069 (GRAS).
Malo-lactic bacteria: To stabilize   Malo-lactic bacteria of the type
 grape wine.                          Leuconostoc oenos may be used in
                                      treating wine. GRAS per FDA
                                      advisory opinion dated 02/25/85.
Maltol: To stabilize wine..........  Use authorized at a maximum level
                                      of 250 mg/L in all standard wine
                                      except natural wine produced from
                                      Vitis vinifera grapes. FDA
                                      advisory opinion dated 12/1/86.
Milk (pasteurized whole or skim)
    Fining agent for white grape     The amount used shall not exceed
     wine or sherry.                  2.0 liters of pasteurized milk per
                                      1,000 liters of white grape wine
                                      or sherry (0.2 percent V/V).
Nitrogen gas: To maintain pressure   21 CFR 184.1540 (GRAS).
 during filtering and bottling or
 canning of wine and to prevent
 oxidation of wine.

[[Page 578]]

 
Oak chips or particles, uncharred    21 CFR 172.510.
 and untreated: To smooth wine.
Oxygen and compressed air:
    May be used in juice and wine..  None.
Polyvinyl-polypyr-rolidone (PVPP):
    To clarify and to stabilize      The amount used to treat the wine,
     wine and to remove color from    including the juice from which the
     red or black wine or juice.      wine was produced, shall not
                                      exceed 60 lbs/1,000 gals. (7.19 g/
                                      L) and shall be removed during
                                      filtration. PVPP may be used in a
                                      continuous or batch process. The
                                      finished wine shall retain vinous
                                      character and shall have color of
                                      not less than 0.6 Lovibond in a
                                      one-half inch cell or not more
                                      than 95 percent transmittance per
                                      **AOAC Method 11.003-11.004 (14th
                                      Ed.). 21 CFR 173.50.
Potassium bitartrate: To stabilize   The amount used shall not exceed 35
 grape wine.                          lbs/1000 gals. (4.19 g/L) of grape
                                      wine. 21 CFR 184.1077 (GRAS).
Potassium carbonate and/or
 potassium bicarbonate
    To reduce excess natural         The natural or fixed acids shall
     acidity in wine, and in juice    not be reduced below 5 parts per
     prior to or during               thousand (5 g/L). 21 CFR 184.1619
     fermentation.                    and 184.1613 (GRAS).
Potassium citrate: pH control agent  The amount of potassium citrate
 and sequestrant in treatment of      shall not exceed 25 lbs/1000 gals.
 citrus wines.                        (3.0 g/L) of finished wine. 27 CFR
                                      24.182. 21 CFR 182.1625 and
                                      182.6625 (GRAS).
Potassium meta-bisulfite: To         The sulfur dioxide content of the
 sterilize and to preserve wine.      finished wine shall not exceed the
                                      limitations prescribed in 27 CFR
                                      4.22. 21 CFR 182.3637 (GRAS).
Silica gel (colloidal silicon        Use shall not exceed the equivalent
 dioxide): To clarify wine.           of 20 lbs. colloidal silicon
                                      dioxide at a 30% concentration per
                                      1000 gals. of wine. (2.4 g/L).
                                      Silicon dioxide shall be
                                      completely removed by filtration.
                                      (GRAS).
Sorbic acid and potassium salt of    The finished wine shall contain not
 sorbic acid: To sterilize and to     more than 300 milligrams of sorbic
 preserve wine; to inhibit mold       acid per liter of wine. 21 CFR
 growth and secondary fermentation.   182.3089 and 182.3640 (GRAS).
Soy flour (defatted): Yeast          The amount used shall not exceed 2
 nutrient to facilitate               lbs/1000 gals. (0.24 g/L) of wine.
 fermentation of wine.                (GRAS).
Sulfur dioxide: To sterilize and to  The sulfur dioxide content of the
 preserve wine.                       finished wine shall not exceed the
                                      limitations prescribed in 27 CFR
                                      4.22(b)(1). 21 CFR 182.3862
                                      (GRAS).
Tannin:
    To adjust tannin content in      The residual amount of tannin shall
     apple juice or in apple wine.    not exceed 3.0 g/L, calculated as
                                      gallic acid equivalents (GAE).
                                      GRAS per FDA advisory opinions
                                      dated 4/6/59 and 3/29/60. Total
                                      tannin shall not be increased by
                                      more than 150 milligrams/liter by
                                      the addition of tannic acid
                                      (polygalloylglucose).
    To clarify or to adjust tannin   The residual amount of tannin,
     content of juice or wine         calculated in gallic acid
     (other than apple).              equivalents, shall not exceed 0.8
                                      g/L in white wine and 3.0 g/L in
                                      red wine. Only tannin which does
                                      not impart color may be used in
                                      the cellar treatment of juice or
                                      wine. GRAS per FDA advisory
                                      opinions dated 4/6/59 and 3/29/60.
                                      Total tannin shall not be
                                      increased by more than 150
                                      milligrams/liter by the addition
                                      of tannic acid (poly-
                                      galloylglucose).
Tartaric acid:
    To correct natural acid          Use as prescribed in 27 CFR 24.182
     deficiencies in grape juice/     and 24.192. 21 CFR 184.1099
     wine and to reduce the pH of     (GRAS).
     grape juice/wine where
     ameliorating material is used
     in the production of grape
     wine.
Thiamine hydrochloride: Yeast        The amount used shall not exceed
 nutrient to facilitate               0.005 lb/1000 gals. (0.6 mg/L) of
 fermentation of wine.                wine or juice. 21 CFR 184.1875
                                      (GRAS).
Yeast, autolyzed: Yeast nutrient to  21 CFR 172.896 and 184.1983. GRAS
 facilitate fermentation in the       per FDA advisory opinion of 10/06/
 production of grape or fruit wine.   59.
Yeast, cell wall/membranes of        The amount used shall not exceed 3
 autolyzed yeast: To facilitate       lbs/1000 gals. (0.36 g/L) of wine
 fermentation of juice/wine.          or juice. (GRAS).
------------------------------------------------------------------------
* GRAS--An acronym for ``generally recognized as safe.'' The term means
  that the treating material has an FDA listing in Title 21, Code of
  Federal Regulations, Part 182 or Part 184, or is considered to be
  generally recognized as safe by advisory opinion issued by the U.S.
  Food and Drug Administration.
** AOAC--Association of Official Analytical Chemists.
*** To stabilize--To prevent or to retard unwanted alteration of
  chemical and/or physical properties.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1383, as amended (26 U.S.C. 5381, 
5382, 5385, 5386, and 5387))
[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31079, July 9, 1991; T.D. ATF-350, 58 FR 52231, Oct. 7, 1993; T.D. 
ATF-350, 60 FR 38959, July 31, 1995; T.D. ATF-371, 61 FR 21079, May 9, 
1996; T.D. ATF-409, 64 FR 13683, Mar. 22, 1999]

[[Page 579]]



Sec. 24.247  Materials authorized for the treatment of distilling material.

    The materials listed in this section as well as the materials listed 
in Sec. 24.246 are approved as being acceptable in good commercial 
practice for use by proprietors in the treatment of distilling material 
within the limitations specified in this section: Provided, That when 
the specified use or limitation of any material on this list is 
determined to be unacceptable by the U.S. Food and Drug Administration, 
the appropriate ATF officer may cancel or amend the approval for use of 
the material in the treatment of distilling material.

------------------------------------------------------------------------
                                                        Reference or
           Materials                   Use               limitation
------------------------------------------------------------------------
Ammonium phosphate (mono- and   Yeast nutrient in  The amount used shall
 di basic.                       distilling         not exceed 10 lbs/
                                 material.          1000 gals. (1.2 g/
                                                    L). 21 CFR 184.1141
                                                    (GRAS).\1\ See
                                                    footnote below.
Benzoic acid, potassium and     To prevent         The amount used shall
 sodium salts of benzoic acid.   fermentation of    not exceed 0.1% (w/
                                 the sugar in       v) as benzoic acid.
                                 wine being         GRAS per FDA
                                 accumulated as     advisory opinions
                                 distilling         dated 9/22/82 and 9/
                                 material.          8/83. 21 CFR
                                                    184.1021 and
                                                    184.1733 (GRAS).
Enzyme activity...............  .................  The enzyme
                                                    preparation used
                                                    shall be prepared
                                                    from nontoxic and
                                                    nonpathogenic
                                                    microorganisms in
                                                    accordance with good
                                                    manufacturing
                                                    practice and be
                                                    approved for use in
                                                    food by either FDA
                                                    regulation or by FDA
                                                    advisory opinion.
Carbohydrase (alpha- Amylase).  To convert         The amylase enzyme
                                 starches to        activity shall be
                                 fermentable        derived from
                                 carbohydrates.     Aspergillus niger,
                                                    Aspergillus oryzae,
                                                    Bacillus subtilis,
                                                    or barley malt per
                                                    FDA advisory opinion
                                                    of 8/18/83 or from
                                                    Rhizopus oryzae per
                                                    21 CFR 173.130 or
                                                    from Bacillus
                                                    licheniformis per 21
                                                    CFR 184.1027.
Carbohydrase (beta- Amylase)..  To convent         The amylase enzyme
                                 starches to        activity shall be
                                 fermentable        derived from barley
                                 carbohydrates.     malt per FDA
                                                    advisory opinion
                                                    dated 8/18/83.
Carbohydrase (Glucoamylase,     To convent         The amylase enzyme
 Amylogluco-sidase).             starches to        actvity shall be
                                 fermentable        derived from
                                 carbohydrates.     Aspergillus niger or
                                                    Aspergillus oryzae
                                                    per FDA advisory
                                                    opinion dated 8/18/
                                                    83 or from Rhizopus
                                                    oryzae per 21 CFR
                                                    173.130 or from
                                                    Rhizopus niveus per
                                                    21 CFR 173.110.
Copper sulfate................  To eliminate       The finished brandy
                                 hydrogen sulfide   or wine spirits
                                 and mercaptans.    produced from
                                                    distilling material
                                                    to which copper
                                                    sulfate has been
                                                    added shall not
                                                    contain more than 2
                                                    parts per million (2
                                                    mg/L) residual
                                                    copper. GRAS per FDA
                                                    advisory opinion of
                                                    7/23/69.
Hydrogen peroxide.............  To reduce the      The amount used shall
                                 bisulfite          not exceed 200 parts
                                 aldehyde complex   per million. 21 CFR
                                 in distilling      184.1366 (GRAS).
                                 material.
Potassium permanganate........  Oxidizing agent..  The finished brandy
                                                    or wine spirits
                                                    produced from
                                                    distilling material
                                                    to which potassium
                                                    permanganate has
                                                    been added must be
                                                    free of chemical
                                                    residue resulting
                                                    from such treatment.
                                                    (GRAS)
Sodium hydroxide..............  Acid neutralizing  The finished brandy
                                 agent.             or wine spirits
                                                    produced from
                                                    distilling material
                                                    to which sodium
                                                    hydroxide has been
                                                    added must be free
                                                    of chemical residue
                                                    resulting from such
                                                    treatment. 21 CFR
                                                    184.1763 (GRAS).
Sulfuric acid.................  To effect          27 CFR 24.216 (GRAS),
                                 favorable yeast    21 CFR 184.1095
                                 development in     (GRAS).
                                 distilling
                                 material; to
                                 prevent
                                 fermentation of
                                 the sugar in
                                 wine being
                                 accumulated as
                                 distilling
                                 material; to
                                 lower pH to 2.5
                                 in order to
                                 prevent
                                 putrefaction and/
                                 or ethyl acetate
                                 development.
------------------------------------------------------------------------
\1\ GRAS--An acronym for ``generally recognized as safe.'' The term
  means that the treating material has an FDA listing in title 21, Code
  of Federal Regulations, part 182 or part 184, or is considered to be
  generally recognized as safe by the U.S. Food and Drug Administration.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1383, as amended (26 U.C.S. 5381, 
5382, 5385, 5386, and 5387)).
[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]

[[Page 580]]



Sec. 24.248  Processes authorized for the treatment of wine, juice, and distilling material.

    Any process which changes the character of the wine to the extent 
inconsistent with good commercial practice is not permitted on bonded 
wine premises. The processes listed in this section are approved as 
being consistent with good commercial practice for use by proprietors in 
the production, cellar treatment, or finishing of wine, juice, and 
distilling material, within the general limitations of this section: 
Provided, That when the specified use or limitation of any process on 
this list is determined to be unacceptable for use in foods and 
beverages by the U.S. Food and Drug Administration, the appropriate ATF 
officer may cancel or amend the approval for use of the process in the 
production, cellar treatment, or finishing of wine, juice, and 
distilling material.

  Processes Authorized for the Treatment of Wine, Juice, and Distilling
                                Material
------------------------------------------------------------------------
                                                        Reference or
           Processes                   Use               limitation
------------------------------------------------------------------------
Elimination of sulfur dioxide   To reduce the      Use of a physical
 by physical process.            sulfur dioxide     process to remove
                                 content of juice.  sulfur dioxide from
                                                    juice must not alter
                                                    the basic character
                                                    of the juice so
                                                    treated
Ion exchange..................  Various            Anion, cation, and
                                 applications in    non-ionic resins,
                                 the treatment of   except those anionic
                                 juice or wine:     resins in the
                                                    mineral acid state,
                                                    may be used in batch
                                                    or continuous column
                                                    processes as total
                                                    or partial treatment
                                                    of wine, provided
                                                    that with regard to
                                                    juice or finished
                                                    wine;
                                                   1. Such treatment
                                                    does not alter the
                                                    fruit character of
                                                    the juice or wine.
                                                   2. The treatment does
                                                    not reduce the color
                                                    of the juice or wine
                                                    to less than that
                                                    normally contained
                                                    in such juice or
                                                    wine.
                                                   3. Treatment does not
                                                    increase inorganic
                                                    anions in the juice
                                                    or wine by more than
                                                    10 mg/L.
                                                   4. The treatment does
                                                    not reduce the
                                                    metallic cation
                                                    concentration in the
                                                    juice or wine to
                                                    less than 300 mg/L.
                                                   5. The treatment does
                                                    not reduce natural
                                                    or fixed acid in
                                                    grape wine below 4 g/
                                                    L for red table
                                                    wines, 3 g/L for
                                                    white table wines,
                                                    2.5 g/L for all
                                                    other grape wines, 4
                                                    g/L for wine other
                                                    than grape wine.
                                                   6. Treatment does not
                                                    reduce the pH of the
                                                    juice or wine to
                                                    less than pH 2.8 nor
                                                    increase the pH to
                                                    more than pH 4.5.
                                                   7. The resins used
                                                    have not imparted to
                                                    the juice or wine
                                                    any material or
                                                    characteristic
                                                    (incidental to the
                                                    resin treatment)
                                                    which may be
                                                    prohibited under any
                                                    other section of the
                                                    regulations in this
                                                    part. The winemaker
                                                    may employ
                                                    conditioning and/or
                                                    regenerating agents
                                                    consisting of water,
                                                    fruit acids common
                                                    to the wine or juice
                                                    being treated, and
                                                    inorganic acids,
                                                    salts and/or bases
                                                    provided the
                                                    conditioned or
                                                    regenerated resin is
                                                    rinsed with water
                                                    until the resin and
                                                    container are
                                                    essentially free
                                                    from unreacted
                                                    (excess)
                                                    conditioning or
                                                    regenerating agents
                                                    prior to the
                                                    introduction of the
                                                    juice or wine. 21
                                                    CFR 173.25.
Reverse osmosis \1\...........  To reduce the      Permeable membranes
                                 ethyl alcohol      which are selective
                                 content of wine    for molecules not
                                 and to remove      greater than 500
                                 off flavors in     molecular weight
                                 wine.              with transmembrane
                                                    pressures of 200 psi
                                                    and greater. The
                                                    addition of water
                                                    other than that
                                                    originally present
                                                    prior to processing
                                                    will render standard
                                                    wine ``other than
                                                    standard.'' Use
                                                    shall not alter
                                                    vinous character.
Spinning cone column \1\......  To reduce the      Use shall not alter
                                 ethyl alcohol      vinous character.
                                 content of wine    For standard wine,
                                 and to remove      the same amount of
                                 off flavors in     essense must be
                                 wine.              added back to any
                                                    lot of wine as was
                                                    originally removed.
Thermal gradient processing...  To separate wine   The fractions derived
                                 into low alcohol   from such processing
                                 and high alcohol   shall retain vinous
                                 wine fractions.    character. Such
                                                    treatment shall not
                                                    increase the alcohol
                                                    content of the high
                                                    alcohol fraction to
                                                    more than 24 percent
                                                    by volume. The
                                                    addition of water
                                                    other than that
                                                    originally present
                                                    in the wine prior to
                                                    processing will
                                                    render standard wine
                                                    ``other than
                                                    standard.''

[[Page 581]]

 
                                To separate juice  The low Brix fraction
                                 into low Brix      derived from such
                                 and high Brix      processing may be
                                 juice fractions.   used in wine
                                                    production. The high
                                                    Brix fraction
                                                    derived from such
                                                    processing shall not
                                                    be diluted with
                                                    water for use in
                                                    wine production.
Thin-film evaporation under     To separate wine   Use shall not alter
 reduced pressure \1\.           into a low         vinous character.
                                 alcohol wine       Water separated with
                                 fraction and       alcohol during
                                 into a higher      processing may be
                                 alcohol            recovered by
                                 distillate.        refluxing in a
                                                    closed continuous
                                                    system and returned
                                                    to the wine. The
                                                    addition of water
                                                    other than that
                                                    originally present
                                                    in the wine prior to
                                                    processing, will
                                                    render standard wine
                                                    ``other than
                                                    standard.''
Ultrafiltration...............  To remove          Permeable membranes
                                 proteinaceous      which are selective
                                 material from      for molecules
                                 wine; to reduce    greater than 500 and
                                 harsh tannic       less than 25,000
                                 material from      molecular weight
                                 white wine         with transmembrane
                                 produced from      pressures less than
                                 white skinned      200 psi. Use shall
                                 grapes; to         not alter vinous
                                 remove pink        character. 21 CFR
                                 color from blanc   175.300, 177.1520,
                                 de noir wine; to   177.1550, 177.1630,
                                 separate red       177.2440, 177.2600,
                                 wine into low      and 177.2910.
                                 color and high
                                 color wine
                                 fractions for
                                 blending
                                 purposes.
------------------------------------------------------------------------
\1\ This process must be done on distilled spirits plant premises.
  However, reverse osmosis, under certain limited conditions, may be
  used on bonded winery premises if ethyl alcohol is only temporarily
  created within a closed system.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1383, as amended (26 U.S.C. 5381, 
5382, 5385, 5386, and 5387)).

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31081, July 9, 1991; T.D. ATF-350, 58 FR 52232, Oct. 7, 1993; T.D. 
ATF-371, 61 FR 21079, May 9, 1996; T.D. ATF-409, 64 FR 13683, Mar. 22, 
1999]



Sec. 24.249  Experimentation with new treating material or process.

    (a) General. The proprietor may, under the provisions of this 
section, conduct on bonded wine premises such experimentation with a 
treating material or process as the appropriate ATF officer finds may be 
conducted in a manner that will not jeopardize the revenue, conflict 
with wine operations, or be contrary to law.
    (b) Application. The proprietor who wants to conduct experimentation 
must file an application with the appropriate ATF officer setting forth 
in detail the experimentation to be conducted and the facilities and 
equipment to be used. The proposed experimentation must not be conducted 
until the appropriate ATF officer has determined that the conduct of 
such experimentation must not jeopardize the revenue, conflict with wine 
operations, or be contrary to law, and has approved the application.
    (c) Segregation of operations. Experimentation authorized under this 
section will be conducted with the degree of segregation from wine 
operations as may be required by the appropriate ATF officer under the 
provisions of Sec. 24.27.
    (d) Records. The proprietor shall, with respect to each experiment 
authorized by this section, keep records of the kind and quantity of 
materials received and used and the volume of wine treated and the 
manner by which disposed.
    (e) Disposition of the wine. The disposition of the wine subjected 
to experimental treatment will conform to the conditions stated in the 
authorization to conduct the experimentation. (Sec. 201, Pub. L. 85-859 
(72 Stat. 1383, as amended (26 U.S.C. 5361, 5382))

(Approved by the Office of Management and Budget under control numbers 
1512-0292 and 1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, 13685, Mar. 22, 1999]



Sec. 24.250  Application for use of new treating material or process.

    (a) General. If the proprietor desires to use a material or process 
which is not specifically authorized in Secs. 24.246, 24.247, 24.248, or 
elsewhere in this part, an application shall be filed with the 
appropriate ATF officer to show that the proposed material or process is 
a cellar treatment consistent with good commercial practice.

[[Page 582]]

    (b) Data required. The application will include the following:
    (1) The name and description of the material or process;
    (2) The purpose, the manner, and the extent to which the material or 
process is to be used together with any technical bulletin or other 
pertinent information relative to the material or process;
    (3) A sample, if a proposed material;
    (4) Documentary evidence of the U.S. Food and Drug Administration's 
approval of the material for its intended purpose in the amounts 
proposed for the particular treatment contemplated;
    (5) The test results of any laboratory-scale pilot study conducted 
by the winemaker in testing the material and an evaluation of the 
product and of the treatment including the results of tests of the shelf 
life of the treated wine;
    (6) A tabulation of pertinent information derived from the testing 
program conducted by the chemical manufacturer demonstrating the 
function of the material or process;
    (7) A list of all chemicals used in compounding the treating 
material and the quantity of each component;
    (8) The recommended maximum and minimum amounts, if any, of the 
material proposed to be used in the treatment and a statement as to the 
volume of water required, if any, to facilitate the addition of the 
material or operation of the process; and
    (9) Two 750-milliliter samples representative of the wine before and 
after treatment. Information of a confidential or proprietary nature to 
the manufacturer or supplier of the treating material or process may be 
forwarded by the manufacturer or supplier to the appropriate ATF officer 
with a reference to the application filed by the winemaker. Information 
contained within the winemaker's application can be disclosed to the 
public, subject to the limitations of 26 U.S.C. 6103 and 7213.
    (c) Use of cellar treatment. The proprietor may not use the proposed 
treating material or process until a determination has been made by the 
appropriate ATF officer that the intended use of the material or process 
is acceptable in good commercial practice.
    (d) Processing of application. After evaluation of the data 
submitted with the application, the appropriate ATF officer will make a 
decision regarding the acceptability of the proposed treatment in good 
commercial practice. The appropriate ATF officer will notify the 
proprietor of the approval or disapproval of the application. (Sec. 201, 
Pub. L. 85-859, 72 Stat. 1383, as amended (26 U.S.C. 5381, 5382, 5385, 
5386, and 5387))

(Approved by the Office of Management and Budget under control numbers 
1512-0292 and 1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, 13685, Mar. 22, 1999]

                 Bottling, Packing, and Labeling of Wine



Sec. 24.255  Bottling or packing wine.

    (a) General. Proprietors of a bonded wine premises and a taxpaid 
wine bottling house premises shall be held strictly responsible for the 
correct determination of the quantity and alcohol content of wine 
removed. As required by Sec. 24.170, appropriate and accurate measures 
and instruments for measuring and testing the wine will be provided at 
each wine premises.
    (b) Bottle or other container fill. Proprietors of bonded wine 
premises and taxpaid wine bottling house premises shall fill bottles or 
other containers as nearly as possible to conform to the amount shown on 
the label or blown in the bottle or marked on any container other than a 
bottle; but in no event may the amount of wine contained in any 
individual bottle, due to lack of uniformity of the bottles, vary from 
the amount stated more than 1.0 percent for 15.0 liters and above, 1.5 
percent for 1.0 liter to 14.9 liters, 2.0 percent for 750 mL, 3.0 
percent for 375 mL, 4.5 percent for 187 mL and 100 mL, and 9.0 percent 
for 50 mL; and in such case, there will be substantially as many bottles 
overfilled as there are bottles underfilled for each lot of wine 
bottled. Short-filled bottles or other containers of wine which are sold 
or otherwise disposed of by the proprietor to employees for personal 
consumption need not be labeled, but, if labeled, need not show an 
accurate statement of net contents.

[[Page 583]]

    (c) Tax tolerance. The net contents of bottles or other containers 
of untaxpaid wine in the same tax class filled during six consecutive 
tax return periods, as determined from the bonded wine premises 
proprietor's fill test records, shall not vary by more than 0.5 percent 
from the net contents as stated on the bottles or other containers. The 
bonded wine premises proprietor is liable for the tax on the entire 
amount of wine in the same tax class when that wine is removed from 
bond, without benefit of tolerance, when the fill of bottles or other 
containers exceeds a 0.5 percent average of a period which consists of 
six consecutive tax returns, or when filling is not conducted in 
compliance with good commercial practice.
    (d) Fill tests. The proprietor shall test at representative 
intervals wine bottled or packed during the bottling or packing 
operation of each bottling or packing line to determine if the wine 
contained in the bottle or other container is in agreement with that 
stated on the label, bottle, or other container.
    (e) Alcohol tests. The proprietor shall test the alcohol content by 
volume to determine the tax class of the wine and to ensure the alcohol 
content to be stated on the label is in agreement with the requirement 
of Sec. 24.257. (Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended (26 
U.S.C. 5368))

(Approved by the Office of Management and Budget under control numbers 
1512-0298 and 1512-0503)



Sec. 24.256  Bottle aging wine.

    Wine bottled or packed and stored for the purpose of aging need not 
have labels affixed until the wine is removed for consumption or sale. 
However, the bins, pallets, stacks, cases or containers of unlabeled 
wine will be marked in some manner to show the kind (class and type) and 
alcohol content of the wine. If the unlabeled wine is stored at a 
location other than the bottling or packing winery, the registry number 
of the bottling or packing winery will also be shown. (Sec. 201, Pub. L. 
85-859, 72 Stat. 1381, as amended, 1407, as amended (26 U.S.C. 5368, 
5662))

(Approved by the Office of Management and Budget under control number 
1512-0503)



Sec. 24.257  Labeling wine containers.

    (a) The proprietor must label each bottle or other container of 
beverage wine prior to removal for consumption or sale. The minimum type 
size for information required by this section is: 2 millimeters for 
containers of more than 187 milliliters and 1 millimeter for containers 
of 187 milliliters or less. The maximum type size for alcohol content 
statements is 3 millimeters unless the container is larger than 5 
liters. The label must be securely affixed and show:
    (1) The name and address of the wine premises where bottled or 
packed;
    (2) The brand name, if different from above;
    (3) The alcohol content as percent by volume or the alcohol content 
stated in accordance with 27 CFR part 4. For wine with less than 7 
percent alcohol by volume stated on the label there is allowed an 
alcohol content tolerance of plus or minus .75 percent by volume; and
    (4) The kind of wine, shown as follows:
    (i) If the wine contains 7 percent or more alcohol by volume and 
must have label approval under 27 CFR part 4, the kind of wine is the 
class, type, or other designation provided in that part.
    (ii) If the wine has an exemption from label approval, an adequate 
statement of composition may be used instead of the class and type in 27 
CFR part 4.
    (iii) If the wine contains less than 7 percent alcohol by volume, an 
adequate statement of composition may be used instead of the class and 
type in 27 CFR part 4. The rules in 27 CFR part 4 pertaining to label 
approval and standards of fill do not apply to wine under 7 percent 
alcohol by volume. The rules in 27 CFR part 16 requiring a Health 
Warning Statement do apply to all wines over 1/2 percent alcohol. Except 
for the rules noted in this section, labeling of wines under 7 percent 
alcohol is under the jurisdiction of the Food and Drug Administration.
    (iv) The statement of composition must include enough information to 
identify the tax class when viewed with the alcohol content. First, the 
wine should be identified by the word ``wine,'' ``mead,'' ``cider'' or 
``perry,'' as

[[Page 584]]

applicable. If the wine contains more than 0.392 grams of carbon dioxide 
per 100 milliliters, the word ``sparkling'' or ``carbonated,'' as 
applicable, must be included in the statement of composition. If the 
statement of composition leaves doubt as to the tax class of the wine, 
the wine must be marked ``tax class 5041(b)(1) IRC'' or an equivalent 
phrase. For example, a still wine marked ``wine'' and ``16 percent 
alcohol by volume'' is adequately marked to identify its tax class as 
5041(b)(2). A still wine marked ``hard cider'' and ``9 percent alcohol 
by volume'' is adequately marked to identify its tax class as 
5041(b)(1). A still wine marked ``raspberry hard cider'' and ``9 percent 
alcohol by volume'' is adequately marked to identify its tax class as 
5041(b)(1). A still wine eligible for the hard cider tax rate marked 
``cider'' or ``hard cider'' and ``6 percent alcohol by volume'' is 
adequately marked to identify its tax class as 5041(b)(6). However, if a 
still wine that is not eligible for the hard cider tax rate is marked 
``cider'' or ``hard cider'' and ``6 percent alcohol by volume'' it is 
not adequately marked to identify its tax class as 5041(b)(1), so the 
tax class must be shown.
    (5) The net content of the container unless the net content is 
permanently marked on the container as provided in 27 CFR part 4.
    (b) The information shown on any label applied to bottled or packed 
wine is subject to the recordkeeping requirements of Sec. 24.314. (Sec. 
201, Pub. L. 85-859, 72 Stat. 1381, as amended, 1407, as amended (26 
U.S.C. 5368, 5388, 5662))
    (c) Use of semi-generic designations--(1) In general. Semi-generic 
designations may be used to designate wines of an origin other than that 
indicated by such name only if--
    (i) There appears in direct conjunction therewith an appropriate 
appellation of origin, as defined in part 4 of this chapter, disclosing 
the true place of origin of the wine, and
    (ii) The wine so designated conforms to the standard of identity, if 
any, for such wine contained in part 4 of this chapter or, if there is 
no such standard, to the trade understanding of such class or type.
    (2) Determination of whether a name is semi-generic--(i) In general. 
Except as provided in paragraph (c)(2)(ii) of this section, a name of 
geographic significance, which is also the designation of a class or 
type of wine, shall be deemed to have become semi-generic only if so 
found by the Director.
    (ii) Certain names treated as semi-generic. The following names 
shall be treated as semi-generic: Angelica, Burgundy, Claret, Chablis, 
Champagne, Chianti, Malaga, Marsala, Madeira, Moselle, Port, Rhine Wine 
or Hock, Sauterne, Haut Sauterne, Sherry, Tokay. (See: 26 U.S.C. 5368, 
5388, 5662)

(Approved by the Office of Management and Budget under control number 
1512-0503)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31082, July 9, 1991; T.D. ATF-350, 58 FR 52232, Oct. 7, 1993; T.D. 
ATF-398, 63 FR 44783, Aug. 21, 1998; T.D. ATF-470, 66 FR 58944, Nov. 26, 
2001]



Sec. 24.258  Certificates of approval or exemption.

    The proprietor shall obtain a certificate of label approval or a 
certificate of exemption from label approval as required by 27 CFR part 
4. (August 29, 1935, ch. 814, Sec. 5, 49 Stat. 981, as amended (27 
U.S.C. 205))



Sec. 24.259  Marks.

    (a) Required marks. Each container larger than four liters or each 
case used to remove wine for consumption or sale will be durably marked 
to show the following information:
    (1) The serial number or filling date as provided in Sec. 24.260;
    (2) The name (or trade name) and the registry number of the bottlers 
wine premises;
    (3) The kind (class and type) and the alcohol content of the wine. 
The kind of wine and alcohol content will be stated in accordance with 
Sec. 24.257. The formula number will be marked on bulk containers of 
special natural wine or other wine produced under Sec. 24.218;
    (4) The net contents of each container larger than four liters or 
each case in wine gallons, or for containers larger than four liters or 
cases filled according to metric measure, the contents in liters. If 
wine is removed in cases, the cases may be marked to show the number and 
size of bottles or

[[Page 585]]

other containers in each case in lieu of the net contents of the case; 
and
    (5) Except for cases, the date of removal or shipment.
    (b) Application of marks. Required marks may be cut, printed, or 
otherwise legibly and durably marked upon the container larger than four 
liters or the case or placed on a label or tag securely affixed to the 
case or container larger than four liters.
    (c) Location of marks. Required marks will be placed on a container 
larger than four liters or on the side of a case for ready examination 
by appropriate ATF officers. (Sec. 201, Pub. L. 85-859, 72 Stat. 1381, 
as amended, 1387, as amended, 1407, as amended (26 U.S.C. 5368, 5388, 
5662))

(Approved by the Office of Management and Budget under control number 
1512-0503)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31082, July 9, 1991; T.D. ATF-409, 64 FR 13684, Mar. 22, 1999]



Sec. 24.260  Serial numbers or filling date.

    Each container larger than four liters or each case used for 
removing wine for consumption or sale will be marked with a serial 
number or filling date at the time of filling or when such containers or 
cases are prepared for removal. Serial numbers will commence with ``1'' 
and continue until the numeral ``1,000,000'' is reached, whereupon the 
series may recommence with the numeral ``1.'' However, the proprietor 
may initiate a new series after the numeral ``1,000,000'' has been 
reached provided no numeral will be used more than once during a 12-
month period. If desired, a separate series of numbers with letter 
prefixes may be used for containers larger than four liters and for 
cases, or for cases filled on different bottling lines, or for removals 
from different loading docks. The proprietor may mark containers larger 
than four liters or the cases with the filling date in lieu of using a 
serial number or use both a serial number and the filling date. However, 
if the proprietor desires to change from the use of a serial number to 
use of a filling date, or vice versa, a notice will be sent to the 
appropriate ATF officer before making the change. Where United States or 
foreign wine is recased, the cases will be marked with the date of 
recasing, preceded by the letter ``R'', in lieu of serial number or 
filling date. (72 Stat. 1381; 26 U.S.C. 5367, 5368)

(Approved by the Office of Management and Budget under control number 
1512-0503)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31082, July 9, 1991; T.D. ATF-409, 64 FR 13683, Mar. 22, 1999]



                        Subpart M--Losses of Wine



Sec. 24.265  Losses by theft.

    The proprietor shall be liable for and pay the tax on wine 
unlawfully removed while on bonded wine premises, or while in transit 
thereto or therefrom in bond, unless the proprietor or other person 
responsible for the tax, establishes to the satisfaction of the 
appropriate ATF officer that the theft did not occur as the result of 
connivance, collusion, fraud or negligence on the part of the proprietor 
or other person responsible for the tax or the owner, consignor, 
consignee, bailee, or carrier, or their agents or employees. (Sec. 201, 
Pub. L. 85-859, 72 Stat, 1381, as amended (26 U.S.C. 5370))

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999; T.D. ATF-432, 65 FR 69253, Nov. 16, 2000]



Sec. 24.266  Inventory losses.

    (a) General. The proprietor shall take a physical inventory of all 
untaxpaid wine on-hand on bonded wine premises as of the close of 
business each tax year, or where a cycle different from the tax year has 
been established as provided in Sec. 24.313, the inventory will be taken 
annually at the end of that cycle, or at any time required by an ATF 
officer. The physical inventory of bulk and bottled or packed wine will 
be recorded and reported as required by Sec. 24.313.
    (b) Bulk wine losses. The physical inventory of bulk wine will 
determine losses due to spillage, leakage, soakage, evaporation, and 
other losses normally occurring from racking and filtering since the 
previous physical inventory required by this section. A claim for 
allowance of loss, under the

[[Page 586]]

provisions of Sec. 24.65, is required for inventory losses in production 
or storage:
    (1) Where there are circumstances indicating that all or a part of 
the wine reported lost was unlawfully removed, or
    (2) Where the loss on bonded wine premises during the annual period 
exceeds three percent of the aggregate volume of wine on-hand at the 
beginning of the annual period and the volume of wine received in bond 
during the annual period; or the loss exceeds six percent of the still 
wine produced by fermentation; or the loss exceeds six percent of the 
sparkling wine produced by fermentation in bottles; or the loss exceeds 
three percent of the special natural wine produced under Sec. 24.195 or 
other wine produced under Sec. 24.218; or the loss exceeds three percent 
of the artificially carbonated wine produced; or the loss exceeds three 
percent of the bulk process sparkling wine produced.

The percentage applicable to each tax class of wine will be calculated 
separately, unless the calculation is impracticable because of the 
mixture of different tax classes by addition of wine spirits or blending 
during the annual period, in which case the percentage will be 
calculated on the aggregate volume. Wine removed immediately after 
production for use as distilling material and on which the usual 
racking, clarifying, and filtering losses are not sustained, will not be 
included in the calculations.
    (c) Bottle and other container wine losses. Wine filled into a 
bottle or other similar containers are not subject to losses due to 
spillage, leakage, soakage, evaporation, and other losses normally 
occurring from racking and filtering. In addition, wine that has been 
filled into a bottle or other similar containers can be accurately 
accounted for and any unexplained shortage is considered evidence of an 
unreported removal. Therefore, the proprietor shall pay the tax on any 
unexplained loss of untaxpaid bottled or packed wine disclosed by 
inventory or otherwise. (Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as 
amended (26 U.S.C. 5367, 5369, 5370))

(Approved by the Office of Management and Budget under control number 
1512-0492)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31082, July 9, 1991]



Sec. 24.267  Losses in transit.

    Where the loss in transit of bulk wine shipped in bond or the total 
daily bulk wine in bond shipments received in bond from the same winery 
exceeds one percent (two percent on transcontinental shipments) of the 
volume shipped, the proprietor of the receiving bonded wine premises 
shall immediately notify the appropriate ATF officer and file a claim 
under the provisions of Sec. 24.65. (Sec. 201, Pub. L. 85-859, 72 Stat. 
1381, as amended (26 U.S.C. 5370))

(Approved by the Office of Management and Budget under control number 
1512-0492)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13685, Mar. 22, 1999]



Sec. 24.268  Losses by fire or other casualty.

    The proprietor must immediately report any loss by theft, fire or 
other casualty, or any other extraordinary or unusual loss to the 
appropriate ATF officer. If required by the appropriate ATF officer, the 
proprietor must file a claim under the provisions of Sec. 24.65. The 
volume of wine loss must be reported on ATF F 5120.17 for the reporting 
period during which the loss occurred. (Sec. 201, Pub. L. 85-859, 72 
Stat. 1381, as amended (26 U.S.C. 5370))

(Approved by the Office of Management and Budget under control number 
1512-0492)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-338, 
58 FR 19064, Apr. 12, 1993; T.D. ATF-409, 64 FR 13685, Mar. 22, 1999]

[[Page 587]]



             Subpart N--Removal, Return and Receipt of Wine

                            Taxpaid Removals



Sec. 24.270  Determination of tax.

    The tax on wine is determined at the time of removal from a bonded 
wine premises for consumption or sale. Section 5041 of title 26, United 
States Code, imposes an excise tax, at the rates prescribed, on all wine 
(including imitation, substandard, or artificial wine, and compounds 
sold as wine, which contain 24 percent or less of alcohol by volume) 
produced in or imported into the United States. Wine containing more 
that 24 percent of alcohol by volume is classed as distilled spirits and 
taxed accordingly. The tax is determined and paid on the volume of wine:
    (a) In bottles or other containers filled according to United States 
measure recorded to the nearest 10th gallon; or,
    (b) In bottles or other containers filled according to metric 
measure, on the volume of wine in United States wine gallons to the 
nearest 10th gallon; or
    (c) In the case of pipeline removals, on the volume of bulk wine 
removed recorded to the nearest whole gallon, five-tenths gallon being 
converted to the next full gallon. (Sec. 201, Pub. L. 85-859, 72 Stat. 
1331, as amended (26 U.S.C. 5041))

See Secs. 24.278 and 24.279 of this part for regulations concerning 
credit against the wine tax for certain bonded wine premises 
proprietors.

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-307, 
55 FR 52737, Dec. 21, 1990]



Sec. 24.271  Payment of tax by check, cash, or money order.

    (a) General. Unless prepaid or no tax is due, the tax on wine is 
paid by a semi-monthly or annual Excise Tax Return, ATF F 5000.24, which 
is filed with remittance (check or money order) for the full amount of 
tax due. Prepayments of tax on wine during the period covered by the 
return are shown separately on the Excise Tax Return form.
    (b) Return periods. Except as provided for in paragraph (c) of this 
section and Sec. 24.273, or where there is no tax due, return periods 
are from the 1st day of each month through the 15th day of that month 
and from the 16th day of each month through the last day of that month. 
The proprietor shall file returns with remittances, for each return 
period not later than the 14th day after the last day of the return 
period. If the due date falls on a Saturday, Sunday, or legal holiday, 
the return and remittance shall be due on the immediately preceding day 
which is not a Saturday, Sunday, or legal holiday, except as provided by 
Sec. 24.271(c)(3).
    (c) Special rule for taxes due for the month of September (effective 
after December 31, 1994). (1)(i) Except as provided in paragraph 
(c)(1)(ii) of this section, the second semimonthly period for the month 
of September shall be divided into two payment periods, from the 16th 
day through the 26th day, and from the 27th day through the 30th day. 
The proprietor shall file a return on Form 5000.24, and make remittance, 
for the period September 16-26, no later than September 29. The 
proprietor shall file a return on Form 5000.24, and make remittance, for 
the period September 27-30, no later than October 14.
    (ii) Taxpayment not by electronic fund transfer. In the case of 
taxes not required to be remitted by electronic fund transfer as 
prescribed by Sec. 24.272, the second semimonthly period of September 
shall be divided into two payment periods, from the 16th day through the 
25th day, and the 26th day through the 30th day. The proprietor shall 
file a return on Form 5000.24, and make remittance, for the period 
September 16-25, no later than September 28. The proprietor shall file a 
return on Form 5000.24, and make remittance, for the period September 
26-30, no later than October 14.
    (2) Amount of payment: Safe harbor rule. (i) Taxpayers are 
considered to have met the requirements of paragraph (c)(1)(i) of this 
section, if the amount paid no later than September 29 is not less than 
11/15 (73.3 percent) of the tax liability incurred for the semimonthly 
period beginning on September 1 and ending on September 15, and if any 
underpayment of tax is paid by October 14.

[[Page 588]]

    (ii) Taxpayers are considered to have met the requirements of 
paragraph (c)(1)(ii) of this section, if the amount paid no later than 
September 28 is not less than 2/3rds (66.7 percent) of the tax liability 
incurred for the semimonthly period beginning on September 1 and ending 
on September 15, and if any underpayment of tax is paid by October 14.
    (3) Last day for payment. If the required due date for taxpayment 
for the periods September 16-25 or September 16-26 as applicable, falls 
on a Saturday or legal holiday, the return and remittance shall be due 
on the immediately preceding day. If the required due date falls on a 
Sunday, the return and remittance shall be due on the immediately 
following day.
    (4) Example. Payment of tax for the month of September. (i) Facts. 
X, a proprietor required to pay taxes by electronic fund transfer, 
incurred tax liability in the amount of $30,000 for the first 
semimonthly period of September. For the period September 16-26, X 
incurred tax liability in the amount of $45,000, and for the period 
September 27-30, X incurred tax liability in the amount of $2,000.
    (ii) Payment requirement. X's payment of tax in the amount of 
$30,000 for the first semimonthly period of September is due no later 
than September 29 (Sec. 24.271(b)). X's payment of tax for the period 
September 16-26 is also due no later than September 29 
(Sec. 24.271(c)(1)(i)). X may use the safe harbor rule to determine the 
amount of payment due for the period of September 16-26 
(Sec. 24.271(c)(2)). Under the safe harbor rule, X's payment of tax must 
equal $21,990.00, 11/15ths of the tax liability incurred during the 
first semimonthly period of September. Additionally, X's payment of tax 
in the amount of $2,000 for the period September 27-30 must be paid no 
later than October 14 (Sec. 24.271(c)(1)(i)). X must also pay the 
underpayment of tax, $23,010.00, for the period September 16-26, no 
later than October 14 (Sec. 24.271(c)(2)).

(Approved by the Office of Management and Budget under control numbers 
1512-0467 and 1512-0492)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-365, 
60 FR 33668, June 28, 1995]



Sec. 24.272  Payment of tax by electronic fund transfer.

    (a) General. (1) During a calendar year any proprietor who is liable 
for a gross amount of wine excise tax equal to or exceeding $5 million 
combining tax liabilities incurred under this part and parts 26 and 251 
of this chapter, shall during the succeeding calendar year use a 
financial institution in making payment by electronic fund transfer 
(EFT) of wine taxes for that year. A proprietor who is required by this 
section to make remittance by EFT may not effect payment of wine taxes 
by cash, check, or money order as described in Sec. 24.271.
    (2) For the purposes of this section, the dollar amount of tax 
liability is defined as the gross tax liability on all taxable 
withdrawals and importations (including wines brought into the United 
States from Puerto Rico or the Virgin Islands) during the calendar year, 
without regard to any drawback, credit, or refund, for all premises from 
which the activities are conducted by the proprietor.
    (3) For the purposes of this section, a proprietor includes a 
controlled group of corporations, as defined in 26 U.S.C. 5061 (e)(3). 
Also, the rules for a ``controlled group of corporations'' apply in a 
similar fashion to groups which include partnerships and/or sole 
proprietorships. If one entity maintains more than 50 percent control 
over a group consisting of corporations and one, or more, partnerships 
and/or sole proprietorships, all of the members of the controlled group 
are one taxpayer for the purpose of determining who is required to make 
remittances by EFT.
    (4) A proprietor who is required by this section to make remittances 
by EFT shall, for each bonded wine premises from which wine is withdrawn 
upon determination of tax, make a separate EFT remittance and file a 
separate tax return.
    (b) Requirements. (1) On or before January 10 of each calendar year, 
except for a proprietor already remitting the tax by EFT, each 
proprietor who was liable during the previous calendar year for a gross 
amount of wine excise tax equal to or exceeding $5 million, combining 
tax liabilities incurred under this part and parts 26 and 251 of

[[Page 589]]

this chapter, shall give written notice to the appropriate ATF officer 
agreeing to make remittances by EFT.
    (2) For each return filed in accordance with this subpart, the 
proprietor shall direct the proprietor's financial institution to make 
an electronic fund transfer in the amount of the taxpayment to the 
Treasury Account as provided in paragraph (e) of this section. The 
request will be made to the financial institution early enough for the 
transfer of funds to be made to the Treasury Account by no later than 
the close of business on the last day for filing the return as 
prescribed in Sec. 24.271. The request will take into account any time 
limit established by the financial institution.
    (3) If the proprietor was liable during the preceding calendar year 
for less than $5 million in wine excise taxes, combining tax liabilities 
incurred under this part and parts 26 and 251 of this chapter, the 
proprietor may choose either to continue remitting the tax as provided 
in this section or to remit the tax with return as prescribed by 
Sec. 24.271. Upon filing the first return on which the proprietor 
chooses to discontinue remittance of the tax by EFT and to begin 
remittance of the tax with the tax return, the proprietor shall notify 
the appropriate ATF officer by attaching a written notification to the 
tax form stating that no wine excise tax is due by EFT because the tax 
liability during the preceding calendar year was less than $5 million, 
and that the remittance will be filed with the tax return.
    (c) Remittance. (1) The proprietor shall show on the tax return 
information about remitting the tax for that return by EFT and shall 
file the return with ATF in accordance with the instructions on the tax 
form.
    (2) Remittances will be considered as made when the taxpayment by 
electronic fund transfer is received by the Treasury Account. For 
purposes of this section, a taxpayment by electronic fund transfer will 
be considered as received by the Treasury Account when it is paid to a 
Federal Reserve Bank.
    (3) When the proprietor directs the financial institution to effect 
an electronic fund transfer message as required by paragraph (b) (2) of 
this section, the transfer data record furnished to the proprietor 
through normal banking procedures will serve as the record of payment, 
and will be retained as part of the required records.
    (d) Failure to make a taxpayment by EFT. The proprietor is subject 
to a penalty imposed by 26 U.S.C. 5684, 6651, and 6656, as applicable, 
for failure to make a taxpayment by EFT on or before the close of 
business on the prescribed last day for filing.
    (e) Procedure. Upon the notification required under paragraph (b)(1) 
of this section, the appropriate ATF officer will issue to the 
proprietor an ATF Procedure entitled, Payment of Tax by Electronic Fund 
Transfer. This publication outlines the procedure a proprietor follows 
when preparing returns and EFT remittances in accordance with this 
subpart. The United States Customs Service will provide the proprietor 
with instructions for preparing EFT remittances for payments to be made 
to the United States Customs Service for payment of excise tax on 
imported wine. (Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 
U.S.C. 5061))

(Approved by the Office of Management and Budget under control numbers 
1512-0467 and 1512-0492)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, 13685, Mar. 22, 1999; T.D. ATF-459, 66 FR 38550, July 25, 
2001]



Sec. 24.273  Exception to filing semi-monthly tax returns.

    (a) Any proprietor who has not given a bond for deferred payment of 
wine excise tax and who:
    (1) Paid wine excise taxes in an amount less than $1000 ($500 prior 
to May 12, 1993,) during the previous calendar year, or
    (2) Is the proprietor of a newly established bonded wine premises 
and expects to pay less than $1000 ($500 prior to May 12, 1993,) in wine 
excise taxes before the end of the calendar year, may file the Excise 
Tax Return, ATF F 5000.24, and remittance, within 30 days after the end 
of the calendar year instead of semimonthly as required by Sec. 24.271. 
However, if before the close of the current calendar year the wine 
excise tax owed will exceed the amount of

[[Page 590]]

the coverage under the proprietor's operations bond for wine removed 
from bonded wine premises on which tax has been determined but not paid, 
the proprietor will file an Excise Tax Return with the total remittance 
on the date the wine excise tax owed will exceed such amount and file an 
aggregate Excise Tax Return within 30 days after the close of the 
calendar year showing the total wine tax liability for such calendar 
year. If before the close of the current calendar year the wine excise 
tax liability (including any amounts paid or owed) equals $1000 or more, 
the proprietor will commence semimonthly filing of the wine Excise Tax 
Returns and making of payments as required by Sec. 24.271.
    (b) A proprietor who files under this section is subject to the 
failure to pay or file provisions of Sec. 24.274. If there is a jeopardy 
to the revenue, the appropriate ATF officer may deny the exceptions to 
filing tax returns provided in this section at any time. (Sec. 201, Pub. 
L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5061))

(Approved by the Office of Management and Budget under control number 
1512-0467)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31082, July 9, 1991; T.D. ATF-338, 58 FR 19064, Apr. 12, 1993; 58 
FR 48424, Sept. 15, 1993; T.D. ATF-409, 64 FR 13683, Mar. 22, 1999]



Sec. 24.274  Failure to timely pay tax or file a return.

    Penalties for failure to pay tax at the time required, for willful 
refusal to pay the tax and for fraudulent nonpayment of tax are provided 
for in 26 U.S.C. 5661 and 6656. In addition to these penalties, there is 
a penalty for the delinquent filing of a tax return, imposed as an 
addition to the tax shown on the return, amounting to five percent for 
each month or fraction thereof of the delinquency, not exceeding 25 
percent in the aggregate, unless it is shown that the delinquency is due 
to reasonable cause and not to willful neglect. (Sec. 201, Pub. L. 85-
859, 72 Stat. 1407, as amended, 1410, as amended (26 U.S.C. 5661, 5684, 
6651, 6656))



Sec. 24.275  Prepayment of tax.

    (a) General. The proprietor shall, before removal of wine for 
consumption or sale, file Excise Tax Return, ATF F 5000.24, with 
remittance, where:
    (1) Required to prepay tax under Sec. 24.276; or,
    (2) The tax deferral bond is not in the maximum penal sum and the 
tax determined and unpaid at any one time exceeds the penal sum of the 
bond by more than the amount of such tax covered by the wine operations 
coverage of the wine bond; or,
    (3) There is no approved tax deferral bond and the total amount of 
tax unpaid at any one time exceeds the amount of the wine operations 
coverage of the wine bond designated for wine removed from bonded wine 
premises on which tax has been determined but not paid.

The return with remittance is forwarded pursuant to the instructions 
printed on the return. For the purpose of complying with this section, 
the term ``forwarding'' means deposit in the United States mail properly 
addressed to ATF.
    (b) Electronic fund transfer. When the proprietor is required by 
Sec. 24.272 to deliver payment of tax by electronic fund transfer, the 
proprietor shall prepay the tax before any wine can be removed for 
consumption or sale by:
    (1) Completing the Excise Tax Return and by mailing it, as 
instructed on the form, to ATF and
    (2) Directing the proprietor's financial institution to effect an 
electronic fund transfer. (August 16, 1954, ch. 736, 68A Stat. 775, as 
amended, 777, as amended, 391, as amended (26 U.S.C. 6301, 6311, 6302))

(Approved by the Office of Management and Budget under control numbers 
1512-0467 and 1512-0492)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-338, 
58 FR 19064, Apr. 12, 1993]



Sec. 24.276  Prepayment of tax; proprietor in default.

    When the proprietor fails to forward a payment for wine excise tax 
due by presentment of a check or money order, or when the proprietor is 
otherwise in default of payment of the tax, no wine may be removed for 
consumption or sale until the tax has been paid for the period of the 
default and until the appropriate ATF officer finds the

[[Page 591]]

revenue will not be jeopardized by the late payment of the tax. Any 
remittance made during the period of the default will be in cash, or 
will be in the form of a certified, cashier's, or treasurer's check 
drawn on any financial institution incorporated under the laws of the 
United States, or under the laws of any State, Territory, or possession 
of the United States, or in the form of a money order, as provided in 27 
CFR 70.61 (payment by check or money order) or in the form of an 
electronic fund transfer. (August 16, 1954, ch. 736, 68A Stat. 775, as 
amended, 777, as amended, 391 as amended (26 U.S.C. 6301, 6311, 6302))

(Approved by the Office of Management and Budget under control numbers 
1512-0467 and 1512-0492)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-301, 
55 FR 47605, Nov. 14, 1990; T.D. ATF-409, 64 FR 13683, Mar. 22, 1999]



Sec. 24.277  Date of mailing or delivering of returns.

    (a) When the proprietor sends the Excise Tax Return, ATF F 5000.24, 
with or without remittance, by United States mail, the official postmark 
of the United States Postal Service stamped on the cover of the envelope 
in which the return was mailed is considered the date of delivery of the 
tax return and, if accompanied, the date of delivery of the remittance. 
When the postmark on the cover is illegible, it is the proprietor's 
responsibility to prove when the postmark was made.
    (b) When the proprietor sends the tax return by registered mail or 
by certified mail, the date of registry or the date of the postmark on 
the sender's receipt of certified mail, as the case may be, is treated 
at the date of delivery of the tax return and, if accompanied, the date 
of delivery of the remittance. (August 16, 1954, ch. 736, 68A Stat. 775, 
as amended, 777, as amended, 391, as amended (26 U.S.C. 6301, 6311, 
6302))

(Approved by the Office of Management and Budget under control numbers 
1512-0467 and 1512-0492)



Sec. 24.278  Tax credit for certain small domestic producers.

    (a) General. In the case of a person who produces not more than 
250,000 gallons of wine during the calendar year, there shall be allowed 
as a credit against any tax imposed by Title 26, U.S.C. (other than 
Chapters 2, 21 and 22), an amount computed in accordance with paragraph 
(d) of this section, on the first 100,000 gallons of wine (other than 
champagne and other sparkling wine) removed during such year for 
consumption or sale. Such credit applies only to wine which has been 
produced at a qualified bonded wine premises in the United States. The 
small wine producer's tax credit is available only to eligible 
proprietors engaged in the business of producing wine. A proprietor who 
has a basic permit to produce wine but does not produce wine during a 
calendar year may not take the small producers' wine tax credit on wine 
removed during such calendar year. A proprietor who has obtained a new 
wine producers' basic permit may not take the small producers' wine tax 
credit on wine removed until wine is produced by such proprietor. ``Wine 
production operations'' include those activities described in paragraph 
(e) of this section.
    (b) Special rules relating to eligibility for wine credit--(1) 
Controlled groups. For purposes of this section and Sec. 24.279, the 
term ``person'' includes a controlled group of corporations, as defined 
in 26 U.S.C. 1563(a), except that the phrase ``more than 50 percent'' 
shall be substituted for the phrase ``at least 80 percent'' wherever it 
appears. Also, the rules for a ``controlled group of corporations'' 
apply in a similar fashion to groups which include partnerships and/or 
sole proprietorships. Production and removals of all members of a 
controlled group are treated as if they were the production and removals 
of a single taxpayer for the purpose of determining what credit may be 
used by a person.
    (2) Credit for transferees in bond. A person other than an eligible 
small producer (hereafter in this paragraph referred to as the 
``transferee'') shall be allowed the credit under paragraph (a) of this 
section which would be allowed to the producer if the wine removed by

[[Page 592]]

the transferee had been removed by the producer on that date, under the 
following conditions:
    (i) Wine produced by any person would be eligible for any credit 
under this section if removed by such person during the calendar year,
    (ii) Wine produced by such person is removed during such calendar 
year by the transferee to whom such wine was transferred in bond and who 
is liable for the tax imposed by this section with respect to such wine, 
and
    (iii) Such producer holds title to such wine at the time of its 
removal and provides to the transferee such information as is necessary 
to properly determine the transferee's credit under this paragraph.
    (iv) At the time of taxable removal, the following information shall 
be provided to the transferee by the producer, in writing, and the 
producer and transferee shall each retain a copy with the record of 
taxpaid removal from bond required by Sec. 24.310:
    (A) The names of the producer and transferee;
    (B) The quantity and tax class of the wines to be shipped;
    (C) The date of removal from bond for consumption or sale;
    (D) A confirmation that the producer is eligible for credit, with 
the credit rate to which the wines are entitled; and
    (E) A confirmation that the subject shipment is within the first 
100,000 gallons of eligible wine removed by (or on behalf of) the 
producer for the calendar year.
    (c) Time for determining and allowing credit. The credit allowable 
by paragraph (a) of this section shall be determined at the same time as 
the tax is determined under 26 U.S.C. 5041(a), and shall be allowable at 
the time any tax described in paragraph (a) of this section is payable. 
The credit allowable by this section is treated as if it constituted a 
reduction in the rate of such tax.
    (d) Computation of credit. The credit which may be taken on the 
first 100,000 gallons of wine (other than champagne and other sparkling 
wine) removed for consumption or sale by an eligible person during a 
calendar year shall be computed as follows:
    (1) For persons who produce 150,000 gallons or less of wine during 
the calendar year, the credit is $0.90 per gallon for wine ($0.056 for 
hard cider) eligible for such credit at the time it is removed for 
consumption or sale;
    (2) For persons who produce more than 150,000 gallons but not more 
than 250,000 gallons during the calendar year, the credit shall be 
reduced by 1 percent for every 1,000 gallons produced in excess of 
150,000 gallons. For example, the credit which would be taken by a 
person who produced 160,500 gallons of wine and hard cider during a 
calendar year would be reduced by 10 percent, for a net credit against 
the tax of $0.81 per gallon for wine or $0.0504 for hard cider, as long 
as the wine or hard cider was among the first 100,000 gallons removed 
for consumption or sale during the calendar year.
    (e) Definitions--(1) Production. For the purpose of determining if a 
person's production is within the 250,000 gallon limitation, in addition 
to wine produced by fermentation, production includes any increases in 
the volume of such wine due to the winery operations of amelioration, 
wine spirits addition, sweetening, and the production of formula wine. 
Production of champagne and other sparkling wines is not excluded for 
purposes of determining whether total production of a winery exceeds 
250,000 gallons. Production includes all wine produced at qualified 
bonded wine premises within the United States and wine produced outside 
the United States by such person.
    (2) Removals. For the purpose of determining if a person's removals 
are within the 100,000 gallon limitation, removals include wine removed 
from all qualified bonded wine premises within the United States by such 
person. Wine removed by a transferee in bond under the provisions 
Sec. 24.278(b)(2) will be counted as a removal by the small producer who 
owns such wine, and not by the transferee in bond.
    (f) Preparation of tax return. A person who is eligible for the 
credit shall show the amount of wine tax before credit on the Excise Tax 
Return, ATF F 5000.24, and enter the quantity of wine subject to credit 
and the applicable credit rate as the explanation for an adjusting entry 
in Schedule B of the return for

[[Page 593]]

each tax period. Where a person does not use the credit authorized by 
this section to directly reduce the rate of Federal excise tax on wine, 
that person shall report on ATF F 5000.24 where such credit will be, or 
has been, applied. Where a transferee in bond takes credit on behalf of 
one or more small producers, the names of such producers, their credit 
rate, and the total credit taken on behalf of each during the tax return 
period shall be shown in schedule B.
    (g) Denial of deduction. Any deduction under 26 U.S.C. chapters 1-6, 
with respect to any tax against which the credit is allowed under 
paragraph (a) of this section shall only be for the amount of such tax 
as reduced by such credit.
    (h) Exception to credit. The appropriate ATF officer shall deny any 
tax credit taken under paragraph (a) of this section where it is 
determined that the allowance of such credit would benefit a person who 
would otherwise fail to qualify for the use of such credit. (26 U.S.C. 
5041(c).)

(Approved by the Office of Management and Budget under control number 
1512-0540)

[T.D. ATF-390, 62 FR 29666, June 2, 1997, as amended by T.D. ATF-398, 63 
FR 44783, Aug. 21, 1998; T.D. ATF-409, 64 FR 13683, Mar. 22, 1999]



Sec. 24.279  Tax adjustments related to wine credit.

    (a) Increasing adjustments. Persons who produce more wine than the 
amount used in computation of the credit, or who lose eligibility by not 
producing during a calendar year, must make increasing tax adjustments. 
Where an increasing adjustment to a person's tax return is necessary as 
a result of an incorrect credit rate claimed pursuant to Sec. 24.278, 
such adjustment shall be made on Excise Tax Return, ATF F 5000.24, no 
later than the return period in which production (or the production of 
the controlled group of which the person is a member) exceeds the amount 
used in computation of the credit. If the adjustment is due to failure 
to produce, it shall be made no later than the last return period of the 
calendar year. The adjustment is the difference between the credit taken 
for prior return periods in that year and the appropriate credit for 
such return periods. The person shall make tax adjustments for all 
bonded wine premises where excessive credits were taken against tax that 
year, and shall include interest payable. In the case of a person who 
continued to deduct credit after reaching the 100,000 gallon maximum 
during the calendar year, the adjustment is the full amount of excess 
credit taken, and shall include interest payable under 26 U.S.C. 6601 
from the date on which the excess credit was taken, and may include the 
penalty payable under 26 U.S.C. 6662, at the discretion of the 
appropriate ATF officer. The appropriate ATF officer will provide 
information, when requested, regarding interest rates applicable to 
specific time periods, and any applicable penalties. In the case of a 
controlled group of bonded wine premises who took excess credits, all 
member proprietors who took incorrect credits shall make tax adjustments 
as determined in this section. In the case of a small producer who 
instructed a transferee in bond to take credit as authorized by 
Sec. 24.278(b)(2), and subsequently determines the credit was less or 
not applicable, such producer shall immediately inform the transferee in 
bond, in writing, of the correct credit information. The transferee 
shall make any increasing adjustment on its next tax return based on 
revised credit information given by the producer or by an ATF officer.
    (b) Decreasing adjustments. Where a person fails to deduct the 
credit, or deducts less than the appropriate credit provided for by 
Sec. 24.278, during the calendar year, a claim may be filed for refund 
of tax excessively paid. Such claims will be filed in accordance with 
Sec. 24.69 of this part. In the case of wine removed on behalf of a 
small producer by a transferee in bond, if the transferee in bond was 
instructed to deduct credit and failed to deduct credit or deducted less 
than the appropriate credit and was later reimbursed for the tax by such 
producer, such transferee may file the claim. The provisions of 26 
U.S.C. 6423 and 27 CFR part 70, subpart F, will apply, and the producer 
and transferee in bond must show the conditions of

[[Page 594]]

Sec. 24.278(b)(2) were met. (26 U.S.C. 5041(c).)

(Approved by the Office of Management and Budget under control number 
1512-0492)

[T.D. ATF-390, 62 FR 29667, June 2, 1997, as amended by T.D. ATF-409, 64 
FR 13683, Mar. 22, 1999]

                        Transfer of Wine in Bond



Sec. 24.280  General.

    Wine may be removed for transfer in bond, from one bonded wine 
premises to another bonded wine premises or to a distilled spirits 
plant. For bulk wine transferred in bond between adjacent or contiguous 
bonded wine premises or to an adjacent or contiguous distilled spirits 
plant, an accurately calibrated tank for measuring the wine is required 
on at least one of the premises. The volume of wine transferred will be 
recorded to the nearest whole gallon, five-tenths gallon being converted 
to the next full gallon. (Sec. 201, Pub. L. 85-859, 72 Stat. 1380, as 
amended (26 U.S.C. 5362))



Sec. 24.281  Consignor premises.

    Prior to transferring wine in bond, the proprietor shall prepare a 
transfer record prescribed by Sec. 24.309. Except for multiple transfers 
as provided in Sec. 24.282, a transfer record will be prepared for each 
shipment. On completion of lading (or completion of transfer by 
pipeline), the proprietor shall retain one copy of the transfer record 
for the files and forward the original to the consignee (by the close of 
the next business day). (Sec. 201, Pub. L. 85-859, 72 Stat. 1380, as 
amended (26 U.S.C. 5362)

(Approved by the Office of Management and Budget under control number 
1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31082, July 9, 1991]



Sec. 24.282  Multiple transfers.

    (a) Truck. The proprietor may use one transfer record for all wine 
shipped by truck on the same day to other premises. The proprietor shall 
prepare a shipment or delivery order for each shipment showing date of 
transfer, name and address of the proprietor and consignee, number of 
cases or containers, serial numbers of cases (if any) or container 
identification marks, and quantity shipped in gallons or liters. A copy 
of the shipping or delivery order will be retained by the proprietor and 
a copy sent with the shipment. On completion of lading the last truck 
for the day, the proprietor shall prepare and process a transfer record 
as provided in Sec. 24.281.
    (b) Pipeline. The proprietor may use one transfer record for all 
wine (including distilling material and vinegar stock) transferred by 
pipeline to adjacent premises during a month. At the end of the month, 
the proprietor shall prepare and process a transfer record as provided 
in Sec. 24.281. (Sec. 201, Pub. L. 85-859, 72 Stat. 1380, as amended (26 
U.S.C 5362))

(Approved by the Office of Management and Budget under control number 
1512-0298)



Sec. 24.283  Reconsignment.

    Prior to or on arrival at the premises of a consignee, wine 
transferred in bond may be reconsigned by the consignor. The bond of the 
proprietor to whom the wine is reconsigned will cover the wine while in 
transit after reconsignment. Notice of cancellation of the shipment will 
be made to the other proprietors involved by the proprietor who 
reconsigned the wine. Where reconsignment is to other than the shipping 
proprietor, a new transfer record prominently marked ``Reconsignment'' 
will be prepared and processed as provided by Sec. 24.281. (Sec. 201, 
Pub. L. 85-859, 72 Stat. 1380, as amended (26 U.S.C 5362))

(Approved by the Office of Management and Budget under control number 
1512-0298)



Sec. 24.284  Consignee premises.

    When wine is received by transfer in bond, the consignee shall check 
the shipment against the transfer record and determine by volumetric 
measure or weight the quantity received. The date received and, if 
different from the quantity shipped, the quantity received will be 
recorded on the transfer record. See Sec. 24.267 for provisions 
applicable to losses in transit. Sealed containers or cases received 
without apparent loss need not be measured or weighed. The consignee 
will retain the original of

[[Page 595]]

the transfer record and any accompanying documents. (Sec. 201, Pub. L. 
85-859, 72 Stat. 1380, as amended (26 U.S.C. 5362))

(Approved by the Office of Management and Budget under control number 
1512-0298)

                     Removals Without Payment of Tax



Sec. 24.290  Removal of wine as distilling material.

    (a) General. Still wine may be removed without payment of tax to the 
production facilities of a distilled spirits plant for use as distilling 
material. The volume of distilling material may be determined at either 
the bonded wine premises or the distilled spirits plant.
    (b) Special natural wine. Unmarketable special natural wine may be 
removed to a distilled spirits plant for use as distilling material in 
the production of wine spirits (but not brandy). Where sugar has been 
used in the production of special natural wine, the wine may not be 
removed for use as distilling material if the unfermented sugars therein 
have been fermented prior to the removal. If wine spirits produced from 
special natural wine contain any flavor characteristics of the special 
natural wine, the wine spirits may be used only in the production of a 
special natural wine. (Sec. 201, Pub. L. 85-859, 72 Stat. 1380, as 
amended, 1382, as amended, 1395, as amended (26 U.S.C. 5362, 5373, 
5552))



Sec. 24.291  Removal of wine for vinegar production.

    (a) General. Still wine may be removed from bonded wine premises, 
without payment of tax, for use in the manufacture of vinegar. Where the 
proprietor is also the proprietor of a vinegar plant located adjacent or 
contiguous to the bonded wine premises, wine may be removed without 
payment of tax upon filing a consent of surety extending the terms of 
the wine bond to cover the removal and use of wine in the manufacture of 
vinegar. Where the proprietor of a vinegar plant is not the proprietor 
of an adjacent or contiguous bonded wine premises, the proprietor of the 
vinegar plant may receive wine, without payment of tax, for use in the 
manufacture of vinegar by filing a bond under the provisions of 
Sec. 24.146(c) to cover the removal to and use of wine at the vinegar 
plant.
    (b) Vinegar plant records. Each proprietor of a vinegar plant to 
which wine is shipped, without payment of tax, for use in the 
manufacture of vinegar shall keep a record of all wine received and used 
for the manufacture of vinegar and of all vinegar produced and disposed 
of. The record will show the following information:
    (1) The volume and alcohol content of all wine received, the date of 
receipt, and the name, registry number, and address of the bonded wine 
premises from which received;
    (2) The volume and alcohol content of all wine used in the 
manufacture of vinegar, and the date of use;
    (3) The volume and grain strength of the vinegar produced, and the 
date of production. (This volume will be reported on a 100-grain 
strength basis and will be determined by multiplying the wine gallons of 
vinegar produced by the grain strength thereof and dividing the result 
by 100); and
    (4) The names and addresses of all persons to whom vinegar is 
shipped, the volume and grain strength shipped to each, and the date of 
shipment. (Grain strength is a measure of the acetic acid content of 
vinegar, expressed as 10 times the grams of acetic acid per 100 mL).
    (c) Inspection of vinegar plants. The proprietor of a vinegar plant 
receiving wine, without payment of tax, for use in the manufacture of 
vinegar shall make the premises and records available for inspection by 
appropriate ATF officers during regular business hours. (August 16, 
1954, ch. 736, 68A Stat. 903, as amended (26 U.S.C. 7606); Sec. 201, 
Pub. L. 85-859, 72 Stat. 1380, as amended (26 U.S.C. 5362))

(Approved by the Office of Management and Budget under control numbers 
1512-0058, 1512-0292 and 1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13684, Mar. 22, 1999]



Sec. 24.292  Exported wine.

    (a) General. Wine may be removed from a bonded wine premises without 
payment of tax for exportation, for use

[[Page 596]]

on vessels and aircraft, for transportation to and deposit in a ``Class 
6'' manufacturing bonded warehouse, for transfer to and deposit in a 
customs bonded warehouse, and for transfer to and deposit in a foreign-
trade zone for exportation or for storage pending exportation. Removals 
of wine for export will be in accordance with the procedures in part 252 
of this chapter.
    (b) Return of wine to bonded storage. Wines which have been lawfully 
withdrawn, without payment of tax, under the provisions of part 252 of 
this chapter may be returned to bonded wine premises from which 
withdrawn for storage pending subsequent removal for lawful purposes. On 
return of wine to bonded wine premises, the proprietor shall record the 
receipt showing the gallonage of each tax class received and returned to 
storage on bonded wine premises and shall report the return on the ATF F 
5120.17, Report of Bonded Wine Premises Operations for the reporting 
period with an explanatory notation. All provisions of this part 
applicable to wine in bond at bonded wine premises and to removals from 
bond are applicable to returned wine. (Sec. 201, Pub. L. 85-859, 72 
Stat. 1380, as amended (26 U.S.C. 5362))

(Approved by the Office of Management and Budget under control numbers 
1512-0216 and 1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-338, 
58 FR 19065, Apr. 12, 1993]



Sec. 24.293  Wine for Government use.

    (a) General. Wine may be removed from bonded wine premises, free of 
tax, for use of the Government of the United States, or any agency 
thereof, upon receipt of a proper Government order signed by the officer 
in charge of the department, institution, station, or similar 
establishment, to which the wine is to be shipped or other officer duly 
authorized to sign the order. The governmental order will show the kind, 
quantity and alcohol content of the wine desired; and the purpose for 
which the wine is to be used. Wine may also be removed for use by the 
governments of the several states and the District of Columbia, or of 
any subdivision thereof, or by any agency of the governments, free of 
tax, from bonded wine premises for analysis, testing, research or 
experimentation.
    (b) Bill of lading and report of shipment. Where wine is shipped by 
common carrier, the proprietor shall retain a copy of the bill of 
lading, covering the shipment, with the ATF F 5120.17, Report of Bonded 
Wine Premises Operations for the reporting period in which the shipment 
is made. The bill of lading will show the name and address of the agency 
to which the wine is shipped, identifying marks on containers or cases, 
and alcohol content of the wine. The governmental order, or a copy of 
the order, will be filed at the bonded wine premises available for 
inspection by appropriate ATF officers. (Sec. 201, Pub. L. 85-859, 72 
Stat. 1380, as amended, 1381, as amended (26 U.S.C. 5362, 5367, 7510))

(Approved by the Office of Management and Budget under control numbers 
1512-0216 and 1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31082, July 9, 1991; T.D. ATF-338, 58 FR 19065, Apr. 12, 1993; 
T.D. ATF-409, 64 FR 13684, Mar. 22, 1999]



Sec. 24.294  Destruction of wine.

    (a) General. Wine on bonded wine premises may be destroyed on or off 
wine premises by the proprietor without payment of tax. A proprietor who 
wants to destroy wine on or off wine premises must file with the 
appropriate ATF officer an application stating the kind, alcohol 
content, and approximate volume of wine to be destroyed, where the wine 
is to be destroyed, and the reason for destruction. Wine to be destroyed 
must be inspected, and the destruction supervised, by an appropriate ATF 
officer unless the appropriate ATF officer authorizes the proprietor to 
destroy the wine without inspection and supervision. The wine must not 
be destroyed until the proprietor has received authority from the 
appropriate ATF officer.
    (b) Record of destruction. The proprietor shall maintain a record of 
the volume destroyed and include the quantity on the ATF F 5120.17, 
Report of Bonded Wine Premises Operations. If part of the volume of the 
material destroyed is not wine, the volume destroyed will be reported on 
the basis of actual wine content of the material,

[[Page 597]]

excluding any dilution by water or other substance. (Sec. 201, Pub. L. 
85-859, 72 Stat. 1381, as amended (26 U.S.C. 5367, 5370))

(Approved by the Office of Management and Budget under control numbers 
1512-0216 and 1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-338, 
58 FR 19065, Apr. 12, 1993; T.D. ATF-409, 64 FR 13686, Mar. 22, 1999]

                  Return of Unmerchantable Wine to Bond



Sec. 24.295  Return of unmerchantable wine to bond.

    (a) General. Wine produced in the United States which has been 
taxpaid, removed from bonded wine premises, and subsequently determined 
to be unmerchantable may be returned to bonded wine premises for 
reconditioning, reformulation or destruction. The tax paid on United 
States wine may, when such wine is returned to bond, be refunded or 
credited, without interest, to the proprietor of the bonded wine 
premises to which such wine is delivered. However, no tax paid on any 
United States wine for which a claim has been or will be made under the 
provisions of 27 CFR Part 70, subpart G will be refunded or credited. If 
the tax on the United States wine has been determined but not paid, the 
person liable for the tax may, when such wine is returned to bond, be 
relieved of the liability. Claims for refund or credit, or relief from 
tax paid or determined on United States wine returned to bond are filed 
in accordance with Sec. 24.66.
    (b) Receipt. The quantity of unmerchantable taxpaid United States 
wine returned to bond is determined upon receipt on bonded wine 
premises. The quantity determined will be entered on the ATF F 5120.17, 
Report of Bonded Wine Premises Operations for the reporting period 
during which the United States wine is returned.
    (c) Records. The proprietor shall maintain records covering each lot 
of unmerchantable taxpaid wine returned to bond in accordance with 
Sec. 24.312. (Sec. 201, Pub. L. 85-859, 72 Stat. 1332, as amended, 1382, 
as amended (26 U.S.C. 5044, 5371))

(Approved by the Office of Management and Budget under control numbers 
1512-0216, 1512-0298 and 1512-0492)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31082, July 9, 1991; T.D. ATF-338, 58 FR 19065, Apr. 12, 1993; 
T.D. ATF-344, 58 FR 40354, July 28, 1993; T.D. ATF-376, 61 FR 31030, 
June 19, 1996]

                         Taxpaid Wine Operations



Sec. 24.296  Taxpaid wine operations.

    (a) General. The proprietor may conduct taxpaid wine operations 
authorized by Sec. 24.102 in an area designated as a taxpaid wine 
premises at a bonded wine premises or at a taxpaid wine bottling house. 
Taxpaid foreign wine may be received on the taxpaid wine premises for 
reconditioning and removal without retaxpayment or for destruction 
without credit of tax. Any taxpaid wine operations will be separate from 
all nontaxpaid wine operations and taxpaid wine will be clearly 
identified as provided in Sec. 24.135. The appropriate ATF officer may 
require any additional segregation and identification of taxpaid wine 
operations as deemed necessary to protect the revenue.
    (b) Treatment and blending. Taxpaid wine may be treated with sulfur 
dioxide compounds, refrigeration or pasteurization and may also be 
preserved, filtered or clarified by the use of methods or materials 
which will not change the basic character of the wine. Water may not be 
added to taxpaid wine. The proprietor who desires to treat wine in any 
manner (other than by simple filtration or the use of sulfur compounds, 
refrigeration or pasteurization) shall first file with the appropriate 
ATF officer an application giving the details of the proposed treatment. 
The proprietor may not use the treatment prior to approval. The 
proprietor may incur civil or criminal liability for using an 
unauthorized treatment of untaxpaid wine. Wine of the same kind (class 
and type), national origin and tax class may only be mixed to facilitate 
handling at a taxpaid wine bottling house; otherwise, the blending of 
taxpaid wine on such premises is prohibited. Taxpaid wine of different 
national origins, but of the same kind and tax class, may only be

[[Page 598]]

blended on taxpaid wine premises. (Sec. 201, Pub. L. 85-859, 72 Stat. 
1407 (26 U.S.C. 5352, 5661))

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-409, 
64 FR 13683, Mar. 22, 1999]



                     Subpart O--Records and Reports



Sec. 24.300  General.

    (a) Records and reports. A proprietor who conducts wine operations 
shall maintain wine transaction records and submit reports as required 
by this part. Transaction records may be recorded in wine gallons or in 
liters. However, required reports will show wine volumes in wine 
gallons. The equivalent wine gallons of wine bottled or packed and 
labeled according to metric measure will be determined using the 
following conversion factors:
    (1) Per case. Equivalent gallonage may be determined using the 
following conversion factors for cases of metric bottles:

------------------------------------------------------------------------
 Bottles                                                      Equivalent
per case                Net content each bottle                gallonage
------------------------------------------------------------------------
     120   50 mL............................................     1.58502
      60   100 mL...........................................     1.58502
      48   187 mL...........................................     2.37119
      24   375 mL...........................................     2.37753
      12   750 mL...........................................     2.37753
      12   1 liter..........................................     3.17004
       6   1.5 liter........................................     2.37753
       4   3 liter..........................................     3.17004
------------------------------------------------------------------------

    (2) Per liter. Equivalent gallonage may be determined by multiplying 
total liters by a conversion factor of 0.26417 gallons per liter.
    (b) Time of making entries. Any operation or transaction is to be 
entered in records or commercial papers at the time the operation or 
transaction occurs, except that where records are posted from source 
records or from supplemental auxiliary records prepared at the time the 
operation or transaction occurs, entries in another record may be 
deferred to not later than the close of business of the third business 
day succeeding the day on which the operation or transaction occurs. The 
proprietor shall retain all source records and all supplemental or 
auxiliary records which support entries in other records or commercial 
papers in order to facilitate verification of operations by appropriate 
ATF officers. Source records and supplemental or auxiliary records may 
be used as a record of an operation or transaction and to prepare the 
ATF F 5120.17, Report of Bonded Wine Premises Operations, provided the 
record will readily allow for verification of an operation or 
transaction by appropriate ATF officers.
    (c) Prescribed forms. All reports required by this part must be 
submitted on forms prescribed by Sec. 24.20. Entries will be made as 
indicated by the headings of the columns and lines, and as required by 
the instructions for the form. Report forms are furnished free of cost.
    (d) Period of retention. All prescribed returns, reports and records 
(including source records) will be retained by the proprietor for a 
period of not less than three years from the record date or the date of 
the last entry required to be made in the record, whichever is later. 
However, the appropriate ATF officer may require records to be kept an 
additional period not exceeding three years in any case where retention 
is determined to be necessary.
    (e) Data processing. (1) Notwithstanding any other provision of this 
section, data maintained on data processing equipment may be kept at a 
location other than the wine premises if the original operation or 
transaction source records required by this subpart are kept available 
for inspection at the wine premises.
    (2) Data which has been accumulated on cards, tapes, discs, or other 
accepted recording media will be retrievable within five business days.
    (3) The applicable data processing program will be made available 
for examination if requested by an appropriate ATF officer.
    (f) Photographic copies of records. The proprietor may record, copy, 
or reproduce records required by this part and may use any process which 
accurately reproduces the original record and which forms a durable 
medium for reproducing and preserving the original

[[Page 599]]

record. Whenever records are reproduced under this section, the 
reproduced records will be preserved in conveniently accessible files, 
and provisions will be made for examining, viewing and using the 
reproduced record the same as if it were the original record, and it 
will be treated and considered for all purposes as though it were the 
original record. All provisions of law and regulations applicable to the 
original are applicable to the reproduced record. As used in this 
paragraph, ``original record'' means the record required to be 
maintained or preserved by the proprietor, even though it may be an 
executed duplicate or other copy of the document.
    (g) ATF F 5120.17, Report of Bonded Wine Premises 0perations. A 
proprietor who conducts bonded wine premises operations will summarize 
transaction entries and submit an ATF F 5120.17 on a monthly basis, 
except that:
    (1) A proprietor who files a monthly ATF F 5120.17 and does not 
expect an inventory change or any reportable operations to be conducted 
in a subsequent month or months, may attach a statement to the ATF F 
5120.17 filed that, until a change in the inventory or a reportable 
operation occurs, an ATF F 5120.17 will not be filed.
    (2) A proprietor may file ATF F 5120.17 reports on a calendar year 
basis if (i) The proprietor expects to be exempt from filing semimonthly 
returns under Sec. 24.273 for the calendar year and (ii) The sum of the 
bulk and bottled wine to be accounted for in all tax classes is not 
expected to exceed 20,000 gallons for any one month during the calendar 
year when adding up the bulk and bottled wine on hand at the beginning 
of the month, bulk wine produced by fermentation, sweetening, blending, 
amelioration or addition of wine spirits, bulk wine bottled, bulk and 
bottled wine received in bond, taxpaid wine returned to bond, bottled 
wine dumped to bulk, inventory gains, and any activity written in the 
untitled lines of the report form which increases the amount of wine to 
be accounted for. To begin the annual filing of a report of bonded wine 
premises operations, a proprietor will state such intent in the 
``Remarks'' section when filing the prior month's ATF F 5120.17. A 
proprietor who is commencing operations during a calendar year and 
expects to meet these criteria may use a letter notice to the 
appropriate ATF officer, and file an annual ATF F 5120.17 for the 
remaining portion of the calendar year. If a proprietor determines that 
the wine excise tax liability for the current year will exceed $1,000 or 
that the 20,000 gallon activity level will be exceeded in any month, an 
ATF F 5120.17 will be filed for that month and for all subsequent months 
of the calendar year. If there is a jeopardy to the revenue, the 
appropriate ATF officer may at any time require any proprietor otherwise 
eligible for annual filing of a report of bonded wine premises 
operations to file such report monthly. The information reported on the 
ATF F 5120.17 will be maintained in accordance with the requirements of 
this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended (26 U.S.C. 5367, 
5555))

(Approved by the Office of Management and Budget under control numbers 
1512-0216 and 1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-338, 
58 FR 19065, Apr. 12, 1993; T.D. ATF-409, 64 FR 13683, 13684 and 13686, 
Mar. 22, 1999]



Sec. 24.301  Bulk still wine record.

    A proprietor who produces or receives still wine in bond, (including 
wine intended for use as distilling material or vinegar stock to which 
water has not yet been added) shall maintain records of transactions for 
bulk still wine. Records will be maintained for each tax class of still 
wine including the date the transaction occurred. The bulk still wine 
record will contain the following:
    (a) The volume produced by fermentation in wine gallons determined 
by actual measurement;
    (b) The volume received, shipped taxpaid, removed (e.g., taxpaid, in 
bond, export, family use, samples) and used in sparkling wine 
production; if a tax credit under 26 U.S.C. 5041(c) may be claimed, the 
record will be maintained in sufficient detail to insure that such a tax 
credit is properly claimed;
    (c) The specific type of production method used, e.g., natural 
fermentation, amelioration, sweetening, addition of spirits, blending;

[[Page 600]]

    (d) The volume of wine used and produced by amelioration, addition 
of spirits or sweetening, as determined by measurements of the wine 
before and after production.
    (e) The volume of wine used for and produced by blending, if wines 
of different tax classes are blended together;
    (f) The volume of wine used to produce formula wine, vinegar stock 
and distilling material;
    (g) The volume of wine removed to fermenters for refermentation or 
removed directly to the production facilities of a distilled spirits 
plant or vinegar plant;
    (h) Where a process authorized under Sec. 24.248 is employed, 
records will be maintained to allow for verification of any limitation 
specified for the process employed and to ensure that the use of the 
process is consistent with good commercial practice;
    (i) Where a treating material is dissolved or dispersed in water as 
authorized in this part, the volume of water added to the wine; and
    (j) An explanation of any unusual transaction. (Sec. 201, Pub. L. 
85-859, 72 Stat. 1381, as amended (26 U.S.C. 5367))

(Approved by the Office of Management and Budget under control number 
1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-307, 
55 FR 52738, Dec. 21, 1990; T.D. ATF-312, 56 FR 31082, July 9, 1991]



Sec. 24.302  Effervescent wine record.

    A proprietor who produces or receives sparkling wine or artificially 
carbonated wine in bond shall maintain records showing the transaction 
date and details of production, receipt, storage, removal, and any loss 
incurred. Records will be maintained for each specific process used 
(bulk or bottle fermented, artificially carbonated) and by the specific 
kind of wine, e.g., grape, pear, cherry. The record will contain the 
following:
    (a) The volume of still wine filled into bottles or pressurized 
tanks prior to secondary fermentation or prior to the addition of carbon 
dioxide;
    (b) The quantity of any first dosage used;
    (c) Any in-process bottling losses, e.g., refilling, spillage, 
breakage;
    (d) The volume of bottle fermented sparkling wine in process, 
transferred and received;
    (e) The volume returned to still wine;
    (f) The quantity of any finishing dosage used (See Sec. 24.192);
    (g) The volume of finished sparkling wine or artificially carbonated 
wine bottled or packed (amount produced);
    (h) The quantity of each item used in the production of dosages, 
e.g., wine, sugar, spirits; and
    (i) An explanation of any unusual transaction. (Sec. 201, Pub. L. 
85-859, 72 Stat. 1381, as amended (26 U.S.C. 5367))

(Approved by the Office of Management and Budget under control number 
1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31082, July 9, 1991]



Sec. 24.303  Formula wine record.

    A proprietor who produces beverage formula wine shall maintain 
records showing by transaction date the details of production. The 
formula wine record will contain the following:
    (a) A number for each lot produced;
    (b) The approved formula number for each lot;
    (c) The volume of wine used in the production;
    (d) The volume produced and the gain or loss resulting from the 
production of each lot as determined by comparing the volume finished 
with the volume used (report the total loss or gain on the ATF F 5120.17 
for the period in question);
    (e) An explanation of any unusual loss or gain;
    (f) The production of essences showing the formula number, 
quantities of spirits and herbs used, and the amount produced;
    (g) The quantity of essences purchased, and the use, transfer or 
other disposition of essences produced or purchased; and
    (h) A record of the receipt and use or other disposition of all 
herbs, aromatics, essences, extracts, or other flavoring materials used 
in the production of formula wine. (Sec. 201, Pub. L.

[[Page 601]]

85-859, 72 Stat. 1381, as amended (26 U.S.C. 5367))

(Approved by the Office of Management and Budget under control numbers 
1512-0059, 1512-0216 and 1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-338, 
58 FR 19065, Apr. 12, 1993]



Sec. 24.304  Chaptalization (Brix adjustment) and amelioration record.

    (a) General. A proprietor who chaptalizes juice or ameliorates juice 
or wine, or both, shall maintain a record of the operation and the 
transaction date. Records will be maintained for each kind of wine 
produced (grape, apple, strawberry, etc.). No form of record is 
prescribed, but the record maintained will contain the information 
necessary to enable appropriate ATF officers to readily determine 
compliance with chaptalization and amelioration limitations. All 
quantities will be recorded in wine gallons, and, where sugar is used, 
the quantity will be determined either by measuring the increase in 
volume or, for pure dry sugar by considering that each 13.5 pounds 
results in a volumetric increase of one gallon. If grape juice is 
chaptalized and subsequently this juice or wine is ameliorated, the 
quantity of pure dry sugar added to juice will be included as 
ameliorating material. If fruit juice other than grape is chaptalized 
and this juice or wine is ameliorated, the quantity of pure dry sugar 
added for chaptalization is not considered ameliorating material; 
however, if liquid sugar or invert sugar syrup is used, the quantity of 
water in such sugar is included as ameliorating material. The record 
will include the following:
    (1) The volume of juice (exclusive of pulp) deposited in fermenters;
    (2) The maximum volume of ameliorating material to which the juice 
is entitled, as provided in Sec. 24.178;
    (3) The volume of ameliorating or chaptalizing material used; and
    (4) The volume of material authorized but not yet used.
    (b) Supporting records. The amelioration record will show the basis 
for entries and calculations, including determination of the natural 
fixed acid level and total solids content of juice, as applicable. The 
records are maintained on the basis of annual accounting periods, with 
each period commencing on July 1 of a year and ending on the following 
June 30, except the record for an accounting period may be continued 
after June 30, where the juice or wine included therein is to be held 
after that date for completion. When the amelioration of wine included 
in the record for one accounting period is complete, the record is 
closed and any unused ameliorating material may not be used. The 
proprietor may mix wines before amelioration of the wine is completed; 
however, the proprietor shall additionally maintain records necessary to 
establish the quantity of unused authorized material to which the 
resultant mixture would be entitled so that ATF officers may readily 
ascertain compliance with amelioration limitations. (Sec. 201, Pub. L. 
85-859, 72 Stat. 1381, as amended 1385, as amended (26 U.S.C. 5367, 
5384))

(Approved by the Office of Management and Budget under control number 
1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31082, July 9, 1991; T.D. ATF-409, 64 FR 13684, Mar. 22, 1999]



Sec. 24.305  Sweetening record.

    A proprietor who sweetens natural wine with sugar or juice 
(unconcentrated or concentrated) under the provisions of this part shall 
maintain a record of sweetening by transaction date. The record will 
contain the following:
    (a) The gallons and degrees Brix of the wine before sweetening;
    (b) If concentrate is used, the degrees Brix of the concentrate;
    (c) If sugar or juice, or both, are used, the gallon equivalent that 
would be required to sweeten the volume of wine to its maximum 
authorized total solids content;
    (d) The quantity of sugar or juice used for sweetening; and
    (e) The gallons and degrees Brix of the wine produced by sweetening. 
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended (26 U.S.C. 5367))

(Approved by the Office of Management and Budget under control number 
1512-0298)

[[Page 602]]



Sec. 24.306  Distilling material or vinegar stock record.

    A proprietor who produces or receives wine containing excess water 
which will be used expressly as distilling material or vinegar stock 
shall maintain a record by transaction date showing the amount and kind 
produced, received, from whom received, removed, and to whom sent. The 
proprietor shall keep a record of each type of material from which the 
distilling material or vinegar stock was fermented (e.g., grape, apple, 
strawberry). The volume of distilling material or vinegar stock 
produced, including wine lees refermented for use as distilling 
material, will be recorded upon removal from fermenting tanks. However, 
the provisions of this section do not apply to standard wine or 
unwatered wine lees recorded on the proprietor's record of bulk still 
wine and removed for use as distilling material or vinegar stock. (Sec. 
201, Pub. L. 85-859, 72 Stat. 1381, as amended (26 U.S.C. 5367))

(Approved by the Office of Management and Budget under control number 
1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31083, July 9, 1991]



Sec. 24.307  Nonbeverage wine record.

    A proprietor who produces nonbeverage wine or wine products shall 
maintain a record by transaction date of such wine produced, received 
and withdrawn as follows:
    (a) The kind, volume, and percent alcohol by volume of wine or wine 
products made from wine, which was rendered unfit for beverage use;
    (b) The kind and quantity of materials received and used to render 
wine, or wine products made from wine, unfit for beverage use;
    (c) The name, volume, percent alcohol by volume, and formula number, 
if produced under a formula, of each nonbeverage wine or wine product 
produced;
    (d) The volume, percent alcohol by volume, and formula number, if 
applicable, of the nonbeverage wine or wine products received;
    (e) The volume, percent alcohol by volume, and formula number, if 
applicable, of the nonbeverage wine or wine products removed;
    (f) The name and address of the person to whom removed; however, on 
any individual sale of less than 80 liters the name and address of the 
purchaser need not be recorded; and
    (g) In the case of vinegar production, the acetic acid and ethyl 
alcohol content of the vinegar.


When the proprietor sends nonbeverage wine or wine products free of tax 
to an adjacent or contiguous premises operated by the proprietor, 
records required by paragraphs (e) and (g) of this section will be 
maintained at each location.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended (26 U.S.C. 5367))

(Approved by the Office of Management and Budget under control number 
1512-0298)



Sec. 24.308  Bottled or packed wine record.

    A proprietor who bottles, packs, or receives bottled or packed 
beverage wine in bond shall maintain a record, by tax class, as follows:
    (a) The date, kind of wine, the number and size of bottle or other 
container filled (if not available in another record), and volume of 
wine bottled or packed, received in bond, returned to bond, and removed, 
e.g., taxpaid removals, in bond removals, dumped to bulk or destroyed, 
breakage, used for tasting. The volume recorded as bottled for bottle 
fermented sparkling wine is determined after the disgorging and 
refilling process.
    (b) The label used on bottles or other containers will be shown in 
the record by using the ``Applicant's Serial No.'' which appears as item 
2 on the label approval form, ATF F 5100.31 or a similar system which 
will allow for verification of labels used on bottles or containers.
    (c) The fill tests and alcohol tests required by Sec. 24.255 for 
each lot of wine bottled or packed, or for each bottling or packing line 
operated each day, showing the date, type of test, item tested and the 
test results.
    (d) If a tax credit under 26 U.S.C. 5041(c) may be claimed, the 
record will

[[Page 603]]

be maintained in sufficient detail to insure that such a tax credit is 
properly claimed.

(Approved by the Office of Management and Budget under control number 
1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-307, 
55 FR 52738, Dec. 21, 1990; T.D. ATF-312, 56 FR 31083, July 9, 1991]



Sec. 24.309  Transfer in bond record.

    A proprietor who transfers wine in bond shall prepare a transfer 
record. The transfer record will show:
    (a) The name, address and registry number of the proprietor;
    (b) The name, address and registry number of the consignee;
    (c) The shipping date;
    (d) The kind of wine (class and type);
    (e) The alcohol content or the tax class;
    (f) The number containers larger than four liters and cases;
    (g) The serial numbers of cases (if any) or containers larger than 
four liters;
    (h) Any bulk container identification marks;
    (i) The volume shipped in gallons or liters; (if a tax credit under 
26 U.S.C. 5041(c) may be claimed, the record will be maintained in 
sufficient detail to insure that such a tax credit is properly claimed);
    (j) The serial number of any seal used;
    (k) For unlabeled bottled or packed wine, the registry number of the 
bottler or packer;
    (l) Information necessary for compliance with Sec. 24.315, e.g., the 
varietal, vintage, appellation of origin designation of the wine or any 
other information that may be stated on the label; and
    (m) Information as to any added substance or cellar treatment for 
which a label declaration is required for the finished product, or any 
other cellar treatment for which limitations are prescribed in this 
part, e.g., amount of decolorizing material used and kind and quantity 
of acid used. (Sec 201, Pub. L. 85-859, 72 Stat. 1381, as amended (26 
U.S.C. 5367))

(Approved by the Office of Management and Budget under control number 
1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-307, 
55 FR 52738, Dec. 21, 1990; T.D. ATF-312, 56 FR 31083, July 9, 1991]



Sec. 24.310  Taxpaid removals from bond record.

    A proprietor removing wine from bond for consumption or sale on 
determination of tax shall maintain a record of wine removed at the time 
of removal either to taxpaid wine premises, taxpaid wine bottling house 
premises, or for direct shipment. The record will show the date of 
removal, the name and address of the person to whom shipped, and the 
volume, kind (class and type), and alcohol content of the wine. However, 
on any individual sale of less than 80 liters, the name and address of 
the purchaser need not be recorded. The proprietor who removes taxpaid 
bulk wine to another wine premises shall prepare the shipping record and 
follow the procedures prescribed by Sec. 24.281. The volume of wine 
removed taxpaid will be summarized daily by tax class in wine gallons to 
the nearest tenth gallon. (Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as 
amended (26 U.S.C. 5367))

(Approved by the Office of Management and Budget under control number 
1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31083, July 9, 1991]



Sec. 24.311  Taxpaid wine record.

    A proprietor who has taxpaid United States or foreign wine on 
taxpaid wine premises or on taxpaid wine bottling house premises shall 
maintain records as follows:
    (a) Record of receipts. (1) The name and address of the person or 
wine premises from whom received;
    (2) The registry number (if any) of the wine premises from which 
received;
    (3) The date of receipt;
    (4) The kind of wine (class, type and, in the case of foreign wine, 
country of origin);

[[Page 604]]

    (5) Alcohol content or tax class of the wine; and,
    (6) The volume of wine received in liters and gallons.
    (b) Record of removals. (1) The name and address of the person to 
whom removed; however, on any individual sale of less than 80 liters, 
the name and address of the purchaser need not be recorded;
    (2) The date of removal;
    (3) The kind of wine (class, type and, in the case of foreign wine 
or a blend of United States and foreign wine, country of origin); and
    (4) The volume of wine shipped in liters or gallons.
    (c) Record of cases or containers filled. (1) The date the cases or 
containers were filled;
    (2) The kind (class, type, and in the case of foreign wine or a 
blend of United States and foreign wine, country of origin) of wine 
bottled or packed;
    (3) The number of the tank used to fill the bottles or other 
containers;
    (4) The size of bottles or other containers and the number of cases 
or containers filled;
    (5) The serial number or date of fill marked on the cases or 
containers filled; and
    (6) The total volume of wine bottled or packed in liters or wine 
gallons. (Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended (26 U.S.C. 
5367)).

(Approved by the Office of Management and Budget under control number 
1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31083, July 9, 1991]



Sec. 24.312  Unmerchantable wine returned to bond record.

    A proprietor shall maintain a record of any unmerchantable taxpaid 
wine returned to bond as follows:
    (a) The kind, volume, and tax class of the wine;
    (b) With regard to each tax class, the amount of tax previously paid 
or determined;
    (c) The location of the wine premises at which the wine was bottled 
or packed and, if known, the identity of the bonded wine premises from 
which removed on determination of tax;
    (d) The date the wine was returned to bond;
    (e) The serial numbers or other identifying marks on the cases or 
containers in which the wine was received; and
    (f) The final disposition of the wine. (Sec. 201, Pub. L. 85-859, 72 
Stat. 1381, as amended (26 U.S.C. 5367))

(Approved by the Office of Management and Budget under control number 
1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31083, July 9, 1991]



Sec. 24.313  Inventory record.

    A proprietor who files monthly reports shall prepare a record of the 
physical inventory of all wine and spirits in storage at the close of 
business for each tax year, or where a different cycle has been 
established, the inventory will be taken at the end of that annual 
period. Such proprietors may use an annual inventory period different 
from the period beginning July 1 and ending June 30 by submitting a 
notice to the appropriate ATF officer. Proprietors who file reports on a 
calendar year basis under the provisions of Sec. 24.300(g) of this part 
shall take the physical inventory at the close of the calendar year. The 
inventory record will be retained on file with the proprietor's ATF F 
5120.17, Report of Bonded Wine Premises Operations, for the reporting 
period when the inventory was taken. If a proprietor who files monthly 
reports takes a complete inventory at other times during the year, 
losses disclosed will be reported on the ATF F 5120.17 and the inventory 
record will be maintained on file with the report for each month when an 
inventory was taken. The proprietor's inventory record will include:
    (a) Description of wine. (1) State the generic name (e.g., port, 
claret) or designate as a white, rose or red table or dessert wine; or
    (2) Wine intended to be marketed with a vintage date, varietal name, 
or geographical designation will be appropriately identified, e.g., 1977 
Napa Valley Pinot Noir; and
    (3) If the wine is other than grape wine, state the type, e.g., 
orange, honey.
    (b) Bulk containers. Tanks containing wine will be listed by tank 
number. Bulk containers which are barrels or

[[Page 605]]

puncheons containing the same kind of wine may be summarized, e.g., 10 
barrels--red table wine 500 gals.;
    (c) Cases, bottles and other similar containers. The total volume of 
one kind of wine in cases, bottles and similar containers may be entered 
as one item and appropriately identified;
    (d) Inventory summary. The volume of bulk and bottled or packed wine 
will be totaled separately in wine gallons or in liters, by tax class, 
and reported on the ATF F 5120.17. Spirits will also be totaled and 
reported on the ATF F 5120.17; and
    (e) Inventory record. All inventory pages will be numbered 
consecutively and the last inventory page will be dated and signed after 
the statement, ``Under penalties of perjury, I declare that I have 
examined this inventory record and to the best of my knowledge and 
belief, it is a true, correct and complete record of all wine and 
spirits required to be inventoried.'' (Sec. 201, Pub. L. 85-859, 72 
Stat. 1381, as amended (26 U.S.C. 5367, 5369))

(Approved by the Office of Management and Budget under control numbers 
1512-0216 and 1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-338, 
58 FR 19065, Apr. 12, 1993; T.D. ATF-409, 64 FR 13683, Mar. 22, 1999]



Sec. 24.314  Label information record.

    A proprietor who removes bottled or packed wine with information 
stated on the label (e.g., varietal, vintage, appellation of origin, 
analytical data, date of harvest) shall have complete records so that 
the information appearing on the label may be verified by an ATF audit. 
A wine is not entitled to have information stated on the label unless 
the information can be readily verified by a complete and accurate 
record trail from the beginning source material to removal of the wine 
for consumption or sale. All records necessary to verify wine label 
information are subject to the record retention requirements of 
Sec. 24.300(d). (Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended (26 
U.S.C. 5367))

(Approved by the Office of Management and Budget under control number 
1512-0298)



Sec. 24.315  Materials received and used record.

    (a) General. A proprietor who produces wine shall maintain a record 
showing the receipt and use or other disposition of basic winemaking 
materials received on wine premises. The record will show the date of 
receipt, the quantity received, the name and address from whom received, 
and the date of use or other disposition of the materials. For any 
material stored off wine premises, invoices or other commercial papers 
covering the purchase will also be kept available for inspection. Where 
grapes (or other fruit) received on wine premises are used in producing 
juice to be stored for future use or for removal, the record will show 
the quantity used and juice produced.
    (b) Concentrated fruit juice. When concentrated fruit juice or must 
is produced or received, the record will show the degrees Brix of the 
juice before and after concentration, the volume of juice before and 
after reconstitution, the volume of reconstitution water used for each 
dilution of the concentrate, and, if volatile fruit flavor was added, 
the kind and volume. Where fruit or juice is used to produce 
concentrated juice, the record will also show the quantity of fruit or 
volume of juice used. If the concentrated fruit juice is removed for use 
by another proprietor, a copy of the certificate required by Sec. 24.180 
will be retained. The record of concentrated fruit juice will contain 
the information necessary to determine compliance with the limitations 
prescribed in Sec. 24.180. Incomplete or inaccurate records of 
concentrated fruit juice may result in the wine produced from the 
concentrated fruit juice to be designated substandard.
    (c) Volatile fruit-flavor concentrate. If volatile fruit-flavor 
concentrate is received, the record will show the volume received, the 
fold, the percent of alcohol by volume, any loss in transit, and the use 
or other disposition of the volatile fruit-flavor concentrate. (Sec. 
201, Pub. L. 85-859, 72 Stat. 1381, as amended (26 U.S.C. 5367))

(Approved by the Office of Management and Budget under control number 
1512-0298)

[[Page 606]]



Sec. 24.316  Spirits record.

    A proprietor who receives, stores, or uses spirits shall maintain a 
record of receipt and use. The record will show the date of receipt, 
from whom received, and the kind and proof gallons. The spirits record 
will also show by date and proof gallons the spirits used or removed 
from bonded wine premises and to whom. The proof gallons of spirits 
received, used, removed from bonded wine premises, and on hand will be 
summarized and the account balanced at the end of each reporting period 
and reported on the ATF F 5120.17. (Sec. 201, Pub. L. 85-859, 72 Stat. 
1381, as amended, 1382, as amended, 1383, as amended (26 U.S.C. 5367, 
5373))

(Approved by the Office of Management and Budget under control numbers 
1512-0216 and 1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31083, July 9, 1991; T.D. ATF-338, 58 FR 19065, Apr. 12, 1993]



Sec. 24.317  Sugar record.

    A proprietor who receives, stores, or uses sugar shall maintain a 
record of receipt and use. The record will show the date of receipt, 
from whom received, and the kind and quantity. Invoices covering 
purchases will be retained. When sugar is used for chaptalization (Brix 
adjustment), amelioration or sweetening, the record will show the date, 
kind, and quantity used. The sugar record will also show sugar used in 
the production of allied products and any sugar removed from the wine 
premises. At the close of each reporting period, the account will be 
balanced and the quantity of each kind of sugar remaining on hand will 
be shown. (Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended (26 
U.S.C. 5367))

(Approved by the Office of Management and Budget under control number 
1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-338, 
58 FR 19065, Apr. 12, 1993]



Sec. 24.318  Acid record.

    A proprietor who adds acid to correct a natural deficiency in juice 
or wine or to stabilize wine shall maintain a record showing date of 
use, the kind and quantity of acid used, the kinds and volume of juice 
or wine in which used, and, when used to correct natural deficiency, the 
fixed acid level of juice or of wine before and after the addition of 
acid. The record will account for all acids received and be supported by 
purchase invoices. (Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended 
(26 U.S.C. 5367))

(Approved by the Office of Management and Budget under control number 
1512-0298)



Sec. 24.319  Carbon dioxide record.

    A proprietor who uses carbon dioxide in still wine shall maintain a 
record of the laboratory tests conducted to establish compliance with 
the limitations prescribed in Sec. 24.245. (Sec. 201, Pub. L. 85-859, 72 
Stat. 1381, as amended (26 U.S.C. 5367))

(Approved by the Office of Management and Budget under control number 
1512-0298)



Sec. 24.320  Chemical record.

    A proprietor who uses chemicals, preservatives, or other such 
materials shall maintain a record of the purchase, receipt and 
disposition of these materials. The record will show the kinds and 
quantities received, the date of receipt, and the names and addresses 
from whom purchased. A record of use in juice or wine of any of these 
materials, except for filtering aids, inert fining agents, sulfur 
dioxide, carbon dioxide (except as provided in Sec. 24.319), nitrogen 
and oxygen, will be maintained, showing the kind, quantity, and date of 
use, and kind and volume of juice or wine in which used. (Sec. 201, Pub. 
L. 85-859, 72 Stat. 1381, as amended (26 U.S.C. 5367))

(Approved by the Office of Management and Budget under control number 
1512-0298)

[T.D. ATF-299, 55 FR 24989, June 19, 1990, as amended by T.D. ATF-312, 
56 FR 31083, July 9, 1991]



Sec. 24.321  Decolorizing material record.

    A proprietor who treats juice or wine to remove excess color with 
activated carbon or any other decolorizing material shall maintain a 
record to show:
    (a) The date the decolorizing material is added to the juice or 
wine;
    (b) The type (e.g. grape variety or kind of wine) and volume of 
juice or

[[Page 607]]

wine treated with decolorizing material; and
    (c) The kind and quantity of decolorizing material used to treat the 
juice or wine. (Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended (26 
U.S.C. 5367))

(Approved by the Office of Management and Budget under control number 
1512-0298)



Sec. 24.322  Allied products record.

    A proprietor who uses fruit, fruit juice or concentrated fruit juice 
in the production of allied products shall maintain a record of these 
materials in accordance with Sec. 24.315. The record will also show the 
production and disposition of other allied products. If sugar, acids, or 
chemicals are used in allied products, the receipt and use will also be 
recorded. (Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended (26 
U.S.C. 5367))

(Approved by the Office of Management and Budget under control number 
1512-0298)



Sec. 24.323  Excise Tax Return form.

    A proprietor who removes wine subject to tax shall prepare an ATF F 
5000.24, Excise Tax Return, unless exempted under the provisions of 
Sec. 24.273. Any increase or decrease in tax due to previous return 
errors or for authorized credits will be shown on the return. The ATF F 
5000.24 will be prepared and filed by the proprietor in accordance with 
the instructions printed on the form. (August 16, 1954, ch. 736, 68A 
Stat. 775, as amended, 777, as amended, 391, as amended, 917, as amended 
(26 U.S.C. 5061, 7805))

(Approved by the Office of Management and Budget under control numbers 
1512-0467 and 1512-0492)



PART 25--BEER--Table of Contents




                     Subpart A--Scope of Regulations

Sec.
25.1  Production and removal of beer.
25.2  Territorial extent.
25.3  Forms prescribed.
25.4  Related regulations.
25.5  OMB control numbers assigned under the Paperwork Reduction Act.
25.6  Delegations of the Director.

                         Subpart B--Definitions

25.11  Meaning of terms.

                 Subpart C--Location and Use of Brewery

25.21  Restrictions on location.
25.22  Continuity of brewery.
25.23  Restrictions on use.
25.24  Storage of beer.
25.25  Operation of a tavern on brewery premises.

                  Subpart D--Construction and Equipment

                              Construction

25.31  Brewery buildings.

                                Equipment

25.35  Tanks.
25.36  Empty container storage.

                     Subpart E--Measurement of Beer

25.41  Measuring system required.
25.42  Testing of measuring devices.

                   Subpart F--Miscellaneous Provisions

25.51  Right of Entry and Examination.
25.52  Variations from requirements.

                  Subpart G--Qualification of a Brewery

                         Original Qualification

25.61  General requirements for notice.
25.62  Data for notice.
25.63  Notice of registration.
25.64  Maintenance of notice file.
25.65  Power of attorney.
25.66  Organizational documents.
25.67  Statement of process.
25.68  Description of brewery.

                  Changes After Original Qualification

25.71  Amended or superseding notices.
25.72  Change in proprietorship.
25.73  Change in partnership.
25.74  Change in stockholders.
25.75  Change in officers and directors.
25.76  Change in statement of process.
25.77  Change in location.
25.78  Change in premises.

                        Alternation of Operations

25.81  Alternation of brewery and bonded or taxpaid wine premises.

                       Discontinuance of Business

25.85  Notice of permanent discontinuance.

                 Subpart H--Bonds and Consents of Surety

25.91  Requirement for bond.
25.92  Consent of surety.
25.93  Penal sum of bond.
25.94  Strengthening bonds.
25.95  New bond.
25.96  Superseding bond.
25.97  Continuation certificate.

[[Page 608]]

25.98  Surety or security.
25.99  Filing powers of attorney.

        Disapproval or Termination of Bonds or Consents of Surety

25.101  Disapproval of bonds or consents of surety.
25.102  Termination of surety's liability.
25.103  Notice by surety for relief from liability under bond.
25.104  Termination of bonds.
25.105  Release of collateral security.

                        Subpart I--Special Taxes

                        Liability for Special Tax

25.111  Brewer's special tax.
25.111a  Special tax rates.
25.111b  Reduced rate of tax for small brewers.
25.112  Wholesaler's special tax.
25.113  Each place of business taxable.
25.114  Exemptions from dealer's special taxes.

                    Execution of Special Tax Returns

25.117  Special tax returns.
25.118  Preparation of AFT Form 5630.5.
25.119  Multiple locations and/or classes of tax.
25.120  Signing of ATF Forms 5630.5.

                     Employer Identification Numbers

25.121  Employer identification number.
25.122  Application for employer identification number.
25.123   Preparation and filing of IRS Form SS-4.

                           Special Tax Stamps

25.125   Issuance of special tax stamps.
25.126  Distribution of stamps for multiple locations.
25.127  Examination of special tax stamps.

                      Changes in Special Tax Stamps

25.131  Change in name.
25.132  Change in proprietorship.
25.133  Persons having right of succession.
25.134  Change in location.

                  Subpart J--Marks, Brands, and Labels

25.141  Barrels and kegs.
25.142  Bottles.
25.143  Cases.
25.144  Rebranding barrels and kegs.
25.145  Tanks, vehicles, and vessels.

                         Subpart K--Tax on Beer

                            Liability for Tax

25.151  Rate of tax.
25.152  Reduced rate of tax for certain brewers.
25.153  Persons liable for tax.

                          Determination of Tax

25.155  Types of containers.
25.156  Determination of tax on keg beer.
25.157  Determination of tax on bottled beer.
25.158  Tax computation for bottled beer.
25.159  Time of tax determination and payment; offsets.
25.160  Tax adjustment for brewers who produce more than 2,000,000 
          barrels of beer.

                Preparation and Remittance of Tax Returns

25.163  Method of tax payment.
25.164  Semimonthly return.
25.164a  Special rule for taxes due for the month of September 
          (effective after December 31, 1994).
25.165  Payment of tax by electronic fund transfer.
25.166  Payment of reduced rate of tax.
25.167  Notice of brewer to pay reduced rate of tax.
25.168  Employer identification number.

                            Prepayment of Tax

25.173  Brewer in default.
25.174  Bond not sufficient.
25.175  Prepayment of tax.

                           Failure To Pay Tax

25.177  Evasion of or failure to pay tax; failure to file a tax return.

               Subpart L--Removals Without Payment of Tax

              Transfer to Another Brewery of Same Ownership

25.181  Eligibility.
25.182  Kinds of containers.
25.183  Determination of quantity transferred.
25.184  Losses in transit.
25.185  Mingling.
25.186  Record of beer transferred.

                 Removal of Beer Unfit for Beverage Use

25.191  General.
25.192  Removal of sour or damaged beer.

         Removals for Analysis, Research, Development or Testing

25.195  Removals for analysis.
25.196  Removals for research, development or testing.

         Removal of Beer to a Contiguous Distilled Spirits Plant

25.201  Removal by pipeline.

                               Exportation

25.203  Exportation without payment of tax.

[[Page 609]]

                     Beer for Personal or Family Use

25.205  Production.
25.206  Removal of beer.
25.207  Removal from brewery for personal or family use.

                   Subpart M--Beer Returned to Brewery

25.211  Beer returned to brewery.
25.212  Beer returned to brewery from which removed.
25.213  Beer returned to brewery other than that from which removed.

                    Subpart N--Voluntary Destruction

25.221  Voluntary destruction of beer.
25.222  Notice of brewer.
25.223  Destruction of beer off brewery premises.
25.224  Refund or adjustment of tax.
25.225  Destruction of taxpaid beer which was never removed from brewery 
          premises.

              Subpart O--Beer Purchased From Another Brewer

25.231  Finished beer.
25.232  Basic permit.

                       Subpart P--Cereal Beverage

25.241  Production.
25.242  Markings.

         Subpart Q--Removal of Brewer's Yeast and Other Articles

25.251  Authorized removals.
25.252  Records.

                       Subpart R--Beer Concentrate

25.261  General.
25.262  Restrictions and conditions on processes of concentration and 
          reconstitution.
25.263  Production of concentrate and reconstitution of beer.
25.264  Transfer between breweries.

                     Subpart S--Pilot Brewing Plants

25.271  General.
25.272  Application.
25.273  Action on application.
25.274  Bond.
25.275  Special tax.
25.276  Operations and records.
25.277  Discontinuance of operations.

     Subpart T--Refund or Adjustment of Tax or Relief From Liability

25.281  General.
25.282  Beer lost by fire, theft, casualty, or act of God.
25.283  Claims for refund of tax.
25.284  Adjustment of tax.
25.285  Refund of beer tax excessively paid.
25.286  Claims for remission of tax on beer lost in transit between 
          breweries.

                     Subpart U--Records and Reports

25.291  Records.
25.292  Daily records of operations.
25.293  Record of ballings and alcohol content.
25.294  Inventories.
25.295  Record of unsalable beer.
25.296  Record of beer concentrate.
25.297  Brewer's Report of Operations, Form 5130.9.
25.298  Excise tax return, Form 5000.24.
25.299  Execution under penalties of perjury.
25.300  Retention and preservation of records.
25.301  Photographic copies of records.

    Authority: 19 U.S.C. 81c; 26 U.S.C. 5002, 5051-5054, 5056, 5061, 
5091, 5111, 5113, 5142, 5143, 5146, 5222, 5401-5403, 5411-5417, 5551, 
5552, 5555, 5556, 5671, 5673, 5684, 6011, 6061, 6065, 6091, 6109, 6151, 
6301, 6302, 6311, 6313, 6402, 6651, 6656, 6676, 6806, 7011, 7342, 7606, 
7805; 31 U.S.C. 9301, 9303-9308.

    Source: T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, unless otherwise 
noted.

    Editorial Note: Nomenclature changes to part 25 appear by T.D. ATF-
437, 66 FR 5478, 5479, Jan. 19, 2001.



                     Subpart A--Scope of Regulations



Sec. 25.1  Production and removal of beer.

    The regulations in this part relate to beer and cereal beverages and 
cover the location, construction, equipment, operations and 
qualifications of breweries and pilot brewing plants.



Sec. 25.2  Territorial extent.

    This part applies to the several States of the United States and the 
District of Columbia.



Sec. 25.3  Forms prescribed.

    (a) The appropriate ATF officer is authorized to prescribe all forms 
required by this part, including bonds, applications, notices, reports, 
returns, and records. All of the information called for in each form 
shall be furnished as indicated by the headings on the form and the 
instructions on or pertaining to the form. In addition, information 
called for in each form shall be furnished as required by this part. The

[[Page 610]]

form will be filed in accordance with the instructions for the form.
    (b) Forms may be requested from the ATF Distribution Center, P.O. 
Box 5950, Springfield, Virginia 22150-5950, or by accessing the ATF web 
site (http://www.atf.treas.gov/).

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986; 51 FR 10540, Mar. 27, 1986, as 
amended by T.D. 372, 61 FR 20724, May 8, 1996; T.D. ATF-437, 66 FR 5478, 
Jan. 19, 2001]



Sec. 25.4  Related regulations.

    Regulations relating to this part are listed below:

27 CFR Part 7--Labeling and Advertising of Malt Beverages.
27 CFR Part 29--Stills and Miscellaneous Regulations.
27 CFR Part 252--Exportation of Liquors.
31 CFR Part 225--Acceptance of Bonds, Notes, or Other Obligations Issued 
or Guaranteed by the United States as Security in Lieu of Surety or 
Sureties on Penal Bonds.

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-462, 66 
FR 42737, Aug. 15, 2001]



Sec. 25.5  OMB control numbers assigned under the Paperwork Reduction Act.

    (a) Purpose. This section collects and displays the control numbers 
assigned to information collection requirements by the Office of 
Management and Budget contained in 27 CFR Part 25 under the Paperwork 
Reduction Act of 1980, Pub. L. 96-511.
    (b) Display, OMB control number 1512-0045. OMB control number 1512-
0045 is assigned to the following sections in 27 CFR Part 25: 
Secs. 25.23, 25.25, 25.52, 25.61, 25.62, 25.64, 25.66, 25.67, 25.68, 
25.71, 25.72, 25.73, 25.74, 25.75, 25.76, 25.77, 25.78, 25.81, 25.85, 
25.103, 25.114, 25.141, 25.142, 25.144, 25.158, 25.167, 25.184, 25.213, 
25.222, 25.225, 25.272, 25.273, 25.277, 25.282, 25.299.
    (c) Display, OMB control number 1512-0052. OMB control number 1512-
0052 is assigned to the following sections in 27 CFR Part 25: 
Secs. 25.296(b), 25.297.
    (d) Display, OMB control number 1512-0079. OMB control number 1512-
0079 is assigned to the following section in 27 CFR Part 25: Sec. 25.65.
    (e) Display, OMB control number 1512-0141. OMB control number 1512-
0141 is assigned to the following sections in 27 CFR Part 25: 
Secs. 25.281, 25.282, 25.286.
    (f) Display, OMB control number 1512-0333. OMB control number 1512-
0333 is assigned to the following sections in 27 CFR Part 25: 
Secs. 25.42, 25.142, 25.186, 25.192, 25.195, 25.196, 25.211, 25.252, 
25.264, 25.276, 25.284, 25.291, 25.292, 25.293, 25.294, 25.295, 
25.296(a), 25.300, 25.301.
    (g) Display, OMB control number 1512-0457. OMB control number 1512-
0457 is assigned to the following section in 27 CFR Part 25: 
Sec. 25.165.
    (h) Display, OMB control number 1512-0467. OMB control number 1512-
0467 is assigned to the following sections in 27 CFR Part 25: 
Secs. 25.122, 25.160, 25.163, 25.164, 25.165, 25.166, 25.167, 25.168, 
25.175, 25.224, 25.284, 25.285, 25.298.
    (i) Display, OMB control number 1512-0472. OMB control number 1512-
0472 is assigned to the following sections in 27 CFR Part 25: 
Secs. 25.111, 25.112, 25.113, 25.114, 25.117, 25.118, 25.119, 25.121, 
25.126, 25.127, 25.131, 25.132, 25.133, 25.134.
    (j) Display, OMB control number 1512-0478. OMB control number 1512-
0478 is assigned to the following sections in 27 CFR Part 25: 
Secs. 25.24, 25.35, 25.141, 25.142, 25.143, 25.145, 25.192, 25.196, 
25.231, 25.242, 25.251, 25.263.

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986; 51 FR 10540, Mar. 27, 1986; 
T.D. ATF-268, 53 FR 8628, Mar 16, 1988]



Sec. 25.6  Delegations of the Director.

    Most of the regulatory authorities of the Director contained in this 
part 25 are delegated to appropriate ATF officers. These ATF officers 
are specified in ATF Order 1130.10, Delegation Order--Delegation of the 
Director's Authorities in 27 CFR part 25, Beer. ATF delegation orders, 
such as ATF Order 1130.10, are available to any interested person by 
mailing a request to the ATF Distribution Center, P.O. Box 5950, 
Springfield, Virginia 22150-5950, or by accessing the ATF web site 
(http://www.atf.treas.gov/).

[T.D. ATF-437, 66 FR 5478, Jan. 19, 2001]



                         Subpart B--Definitions



Sec. 25.11  Meaning of terms.

    When used in this part, where not otherwise distinctly expressed or 
manifestly incompatible with the intent thereof, terms have the meanings 
given in this section.

[[Page 611]]

    Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this part by ATF Order 
1130.10, Delegation Order--Delegation of the Director's Authorities in 
27 CFR part 25, Beer.
    Balling. The percent by weight of dissolved solids at 60  deg.F. 
present in wort and beer, usually determined by a balling saccharometer.
    Bank. Any commercial bank.
    Banking day. Any day during which a bank is open to the public for 
carrying on substantially all its banking functions.
    Barrel. When used as a unit of measure, the quantity equal to 31 
U.S. gallons. When used as a container, a consumer package or keg 
containing a quantity of beer listed in Sec. 25.156, or other size 
authorized by the appropriate ATF officer.
    Beer. Beer, ale, porter, stout, and other similar fermented 
beverages (including sake or similar products) of any name or 
description containing one-half of one percent or more of alcohol by 
volume, brewed or produced from malt, wholly or in part, or from any 
substitute for malt.
    Bottle. A bottle, can or similar container.
    Bottling. The filling of bottles, cans, and similar containers.
    Brewer. Any person who brews beer (except a person who produces only 
beer exempt from tax under 26 U.S.C. 5053(e)) and any person who 
produces beer for sale.
    Brewery. The land and buildings described in the Brewer's Notice, 
Form 5130.10, where beer is to be produced and packaged.
    Brewing. The production of beer for sale.
    Business day. The 24-hour cycle of operations in effect at the 
brewery and described on the Brewer's Notice, Form 5130.10.
    Calendar quarter. A 3-month period during the year as follows: 
January 1 through March 31; April 1 through June 30; July 1 through 
September 30; and October 1 through December 31.
    Cereal beverage. A beverage, produced either wholly or in part from 
malt (or a substitute for malt), and either fermented or unfermented, 
which contains, when ready for consumption, less than one-half of 1 
percent of alcohol by volume.
    Commercial bank. A bank, whether or not a member of the Federal 
Reserve System, which has access to the Federal Reserve Communications 
System (FRCS) or Fedwire. The ``FRCS'' or ``Fedwire'' is a 
communications network that allows Federal Reserve System member banks 
to effect a transfer of funds for their customers (or other commercial 
banks) to the Treasury Account at the Federal Reserve Bank of New York.
    Concentrate. Concentrate produced from beer by the removal of water 
under the provisions of subpart R of this part. The processes of 
concentration of beer and reconstitution of beer are considered 
authorized processes in the production of beer.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC.
    Director of the service center. A Director of an Internal Revenue 
Service Center.
    District Director. A district director of internal revenue.
    Electronic fund transfer or EFT. Any transfer of funds made by a 
brewer's commercial bank, either directly or through a correspondent 
banking relationship, via the Federal Reserve Communications System 
(FRCS) or Fedwire to the Treasury Account at the Federal Reserve Bank of 
New York.
    Executed under penalties of perjury. Signed with the prescribed 
declaration under the penalties of perjury as provided on or with 
respect to the return, claim, form, or other document or, when no form 
of declaration is prescribed, with the declaration: ``I declare under 
the penalties of perjury that this------(insert type of document such as 
statement, report, certificate, application, claim, or other document), 
including the documents submitted in support thereof, has been examined 
by men and, to the best of my knowledge and belief, is true, correct and 
complete.''

[[Page 612]]

    Fiscal year. The period which begins October 1 and ends on the 
following September 30.
    Gallon. The liquid measure containing 231 cubic inches.
    Losses. Known quantities of beer lost due to breakage, casualty, or 
other unusual cause.
    Package. A bottle, can, keg, barrel, or other original consumer 
container.
    Packaging. The filling of any package.
    Person. An individual, trust, estate, partnership, association, 
company, or corporation.
    Racking. The filling of kegs or barrels.
    Removed for consumption or sale. Except when used with respect to 
beer removed without payment of tax as authorized by law, (a) the sale 
and transfer of possession of beer for consumption at the brewery, or 
(b) any removal of beer from the brewery.
    Secretary. The Secretary of the Treasury or his or her delegate.
    Service center. An Internal Revenue Service Center in any of the 
Internal Revenue regions.
    Shortage. An unaccounted for discrepancy (missing quantity) of beer 
disclosed by physical inventory.
    This chapter. Title 27, Code of Federal Regulations, Chapter I (27 
CFR Chapter I).
    Treasury account. The Department of the Treasury's General Account 
at the Federal Reserve Bank of New York.
    U.S.C. The United States Code.
    Wort. The product of brewing before fermentation which results in 
beer.

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-345, 58 
FR 40357, July 28, 1993; T.D. ATF-437, 66 FR 5478, Jan. 19, 2001]



                 Subpart C--Location and Use of Brewery



Sec. 25.21  Restrictions on location.

    A brewery may not be established or operated in any dwelling house 
or on board any vessel or boat, or in any building or on any premises 
where the revenue will be jeopardized or the effective administration of 
this part will be hindered.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5402))



Sec. 25.22  Continuity of brewery.

    Brewery premises will be unbroken except that they may be separated 
by public passageways, streets, highways, waterways, carrier rights-of-
way, or partitions. If the brewery premises are separated, the parts 
will abut on the dividing medium and be adjacent to each other. if the 
brewer has facilities for loading, or for case packing or storage which 
are located within reasonable proximity to the brewery, the appropriate 
ATF officer may approve these facilities as part of the brewery if the 
revenue will not be jeopardized.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5402))



Sec. 25.23  Restrictions on use.

    (a) Use of brewery in production of beer or cereal beverage. A 
brewery may be used only for the following purposes involving the 
production of beer or cereal beverages:
    (1) For producing, packaging and storing beer, cereal beverages, 
vitamins, ice, malt, malt syrup, and other by-products of the brewing 
process, or soft drinks and other nonalcoholic beverages;
    (2) For processing spent grain, carbon dioxide, and yeast; and
    (3) For storing packages and supplies necessary or connected to 
brewery operations.
    (b) Other authorized uses. A brewer may use a brewery for other 
purposes, not involving the production of beer or cereal beverage, upon 
approval from the appropriate ATF officer, if the purposes:
    (1) Require the use of by-products or waste from the production of 
beer;
    (2) Utilize buildings, rooms, areas, or equipment not fully employed 
in the production or packaging of beer;
    (3) Are reasonably necessary to realize the maximum benefit from the 
premises and equipment and reduce the overhead of the brewery;
    (4) Are in the public interest because of emergency conditions;

[[Page 613]]

    (5) Involve experiments or research projects related to equipment, 
materials, processes, products, by-products, or waste of the brewery; or
    (6) Involve operation of a tavern on brewery premises in accordance 
with Sec. 25.25.
    (c) Application. Except as provided in Sec. 25.25 for operation of a 
tavern on brewery premises, a brewer desiring to use a brewery for other 
purposes shall submit to the appropriate ATF officer through the 
appropriate regional director (compliance), an application listing the 
purposes. The appropriate ATF officer will approve the application if 
the use for other purposes will not jeopardize the revenue or impede the 
effective administration of this part and is not contrary to specific 
provisions of law.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5411))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-268, 53 
FR 8628, Mar 16, 1988]



Sec. 25.24  Storage of beer.

    (a) Taxpaid beer. Beer of a brewer's own production on which the tax 
has been paid or determined may not be stored in the brewery, except as 
provided in Sec. 25.25 or Sec. 25.213. Beer produced by other brewers 
may be stored at the brewery under the following conditions:
    (1) Taxpaid beer will be segregated in such a manner as to preclude 
mixing with nontaxpaid beer;
    (2) If required by Part 1 of this chapter, the brewer shall have a 
wholesalers or importers basic permit under the Federal Alcohol 
Administration Act, and keep records of the taxpaid beer as a wholesaler 
or importer under Part 194 of this chapter.
    (3) Taxpaid beer may be stored in packages;
    (4) Taxpaid beer may not be relabeled;
    (5) Taxpaid beer may not be shown on required brewery records;
    (6) The brewer shall purchase a special tax stamp as a wholesaler, 
if required by Part 194 of this chapter; and
    (7) The appropriate ATF officer may require physical segregation of 
taxpaid beer, or marking to show the status of taxpaid beer, if 
necessary to protect the revenue.
    (b) Untaxpaid beer. Packaged beer on which tax has not been paid or 
determined may be stored in any suitable location in the brewery.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5411))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-268, 53 
FR 8628, Mar 16, 1988]



Sec. 25.25  Operation of a tavern on brewery premises.

    (a) General. A brewer desiring to operate a tavern as an alternate 
use of brewery premises, shall submit a Brewer's Notice, ATF F 5130.10 
containing the information required by paragraph (b) of this section. If 
the appropriate ATF officer finds that the operation of the tavern on 
brewery premises will not jeopardize the revenue or impede the effective 
administration of this part and is not contrary to specific provisions 
of law, the approval of the Brewer's Notice, ATF F 5130.10 shall 
constitute approval of the alternate use of brewery premises, in lieu of 
the application required by Sec. 25.23. As used in this section, 
``tavern'' means a portion of brewery premises where beer is sold to 
consumers. Food, and/or taxpaid wine, and/or taxpaid distilled spirits 
may also be sold at a tavern operated on brewery premises. Taxpaid beer 
produced by other brewers may be received, stored and sold on brewery 
premises in accordance with Sec. 25.24.
    (b) Brewer's Notice. In preparing the Brewer's Notice, AFT F 
5130.10, the applicant shall show the following information, in addition 
to the information required by the form:
    (1) The applicant shall identify the portion of the brewery which 
will be operated as a tavern by providing a diagram or narrative 
description of the boundaries of the tavern. The diagram or description 
shall identify areas of the brewery which are accessible to the public 
and areas which are not. The applicant shall describe security measures 
to be used to segregate public areas from non-public areas.
    (2) The applicant shall describe in detail the method to be used for 
measuring beer for the purposes of tax determination.

[[Page 614]]

    (3) The applicant shall identify the tanks which will periodically 
contain tax-determined beer, and any other areas where tax-determined 
beer will be stored.
    (c) Procedures. The following procedures shall apply to operation of 
a tavern on brewery premises:
    (1) The brewery shall have a suitable method for measurement of the 
beer, such as a meter or gauge glass. Tax determination shall consist of 
the measurement of the beer and the preparation of the brewer's record 
of tax determination, required by Sec. 25.292(a)(8). The taxes shall be 
determined prior to the time that the beer is dispensed into a container 
for consumption.
    (2) If the brewer uses one or more tanks for tax determination, the 
following procedures shall apply:
    (i) Each such tank shall be durably marked with the words ``tax-
determination tank'';
    (ii) The taxes shall be determined each time beer is added to a tax-
determination tank; and
    (iii) The brewer may never simultaneously pump into and out of a 
tax-determination tank.
    (3) A brewer qualified under this section may store, on brewery 
premises, tax-determined beer which is intended for sale at a tavern 
operated on brewery premises, in accordance with this section. The 
prohibition of Sec. 25.24 shall not apply to such tax-determined beer.
    (4) Beer consumed by employees and visitors in the brewery's tavern 
shall be beer on which the tax has been paid or determined.

[T.D. ATF-268, 53 FR 8628, Mar 16, 1988]



                  Subpart D--Construction and Equipment

                              Construction



Sec. 25.31  Brewery buildings.

    Brewery buildings shall be arranged and constructed to afford 
adequate protection to the revenue and to facilitate inspection by 
appropriate ATF officers.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5402))

                                Equipment



Sec. 25.35  Tanks.

    Each stationary tank, vat, cask or other container used, or intended 
for use, as a receptacle for wort, beer or concentrate produced from 
beer shall:
    (a) Be durably marked with a serial number and capacity; and
    (b) Be equipped with a suitable measuring device. The brewer may 
provide meters or other suitable portable devices for measuring contents 
of tanks or containers in lieu of providing each tank or container with 
a measuring device.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 U.S.C. 5552))



Sec. 25.36  Empty container storage.

    Empty barrels, kegs, bottles, other containers, or other supplies 
stored in the brewery will be segregated from filled containers.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5411))



                     Subpart E--Measurement of Beer



Sec. 25.41  Measuring system required.

    The brewer shall accurately and reliably measure the quantity of 
beer transferred from the brewery cellars for bottling and for racking. 
The brewer may use a measuring device, such as a meter or gauge glass, 
or any other suitable method.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 U.S.C. 5552))



Sec. 25.42  Testing of measuring devices.

    (a) General requirements. If a measuring device such as a meter or 
gauge glass is used to measure beer, the brewer shall periodically test 
the measuring device and adjust or repair it, if necessary. The brewer 
shall keep records of tests available for inspection by appropriate ATF 
officers. Records of tests will include:
    (1) Date of test;
    (2) Identity of meter or measuring device;
    (3) Result of test; and
    (4) Corrective action taken, if necessary.
    (b) Requirements for beer meters. The allowable variation for beer 
meters as

[[Page 615]]

established by testing may not exceed 0.5 percent. If a 
meter test discloses an error in excess of the allowable variation, the 
brewer shall immediately adjust or repair the meter. Adjustments will 
reduce the error to as near zero as practicable.
    (c) Authority to require tests. If the appropriate ATF officer has 
reason to believe that the accuracy or reliability of a measuring device 
is not being properly maintained, he or she may require the brewer to 
test the measuring device and, if necessary, adjust or repair the 
measuring device.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 U.S.C. 5552))



                   Subpart F--Miscellaneous Provisions



Sec. 25.51  Right of Entry and Examination.

    An appropriate ATF officer may enter, during normal business hours, 
a brewery or other place where beer is stored and may, when the premises 
are open at other times, enter those premises in the performance of 
official duties. Appropriate ATF officers may make inspections as the 
appropriate ATF officer deems necessary to determine that operations are 
conducted in compliance with the law and this part. The owner of any 
building or place where beer is produced, made, or kept, or person 
having charge over such premises, who refuses to admit an appropriate 
ATF officer acting under 26 U.S.C. 7606, or who refuses to permit an 
appropriate ATF officer to examine beer must, for each refusal, forfeit 
$500.

[T.D. ATF-437, 66 FR 5478, Jan. 19, 2001]



Sec. 25.52  Variations from requirements.

    (a) Exceptions to construction, equipment and methods of operations 
(1) General. The appropriate ATF officer may approve details of 
construction, equipment or methods of operations, in lieu of those 
specified in this part. The brewer shall show that it is impracticable 
to conform to the prescribed specification, and that the proposed 
variance:
    (i) Will afford the protection to the revenue intended by the 
specifications in this part;
    (ii) Will not hinder the effective administration of this part, and
    (iii) Is not contrary to any provision of law.
    (2) Application. A brewer who proposes to employ methods of 
operations or construction or equipment other than as provided in this 
part shall submit an application to the appropriate ATF officer. The 
application will describe the proposed variation and state the need for 
it. The brewer shall submit drawings or photographs if necessary to 
describe the proposed variation.
    (3) Approval by appropriate ATF officer. The appropriate ATF officer 
may approve the use of an alternate method or procedure if:
    (i) The brewer shows good cause for its use;
    (ii) It is consistent with the purpose and effect of the procedure 
prescribed by this part and provides equal security to the revenue;
    (iii) It is not contrary to law; and
    (iv) It will not cause an increase in cost to the Government and 
will not hinder the effective administration of this part.
    (4) Exceptions. The appropriate ATF officer may not authorize an 
alternate method or procedure relating to the giving of any bond, or to 
the assessment, payment, or collection of tax.
    (5) Conditions of approval. A brewer may not employ an alternate 
method or procedure until the appropriate ATF officer has approved its 
use. The brewer shall, during the terms of the authorization of an 
alternate method or procedure, comply with the terms of the approved 
application.
    (b) Emergency variations from requirements--(1) Application. When an 
emergency exists, a brewer may apply to the appropriate ATF officer for 
a variation from the requirements of this part relating to construction, 
equipment, and methods of operation. The brewer shall describe the 
proposed variation and set forth the reasons for using it.
    (2) Approval. The appropriate ATF officer may approve an emergency 
variation from requirements if:
    (i) An emergency exists;
    (ii) The variation from the requirements is necessary;

[[Page 616]]

    (iii) It will afford the same security and protection to the revenue 
as intended by the specific regulations;
    (iv) It will not hinder the effective administration of this part; 
and
    (v) It is not contrary to law.
    (3) Conditions of approval. A brewer may not employ an emergency 
variation from the requirements until the appropriate ATF officer has 
approved its use. Approval of variations from requirements are 
conditioned upon compliance with the conditions and limitations set 
forth in the approval.
    (c) Automatic termination of approval. If the brewer fails to comply 
in good faith with the procedures, conditions or limitations set forth 
in the approval, authority for the variation from requirements is 
automatically terminated and the brewer is required to comply with 
prescribed requirements of regulations.
    (d) Withdrawal of approval. The appropriate ATF officer may withdraw 
approval of an alternate method or procedure, approved under paragraph 
(a) or (b) of this section, if the appropriate ATF officer finds that 
the revenue is jeopardized or the effective administration of this part 
is hindered by the approval.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended, 1396, as amended 
(26 U.S.C. 5552, 5556))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-437, 66 
FR 5479, Jan. 19, 2001]



                  Subpart G--Qualification of a Brewery

                         Original Qualification



Sec. 25.61  General requirements for notice.

    (a) Establishment. Operations as a brewer may be conducted only by a 
person who has given notice as a brewer under this subpart. A person may 
not commence the business of a brewer until the appropriate ATF officer 
approves the brewery and the brewer's notice, including all documents 
made part of that notice.
    (b) Brewer's Notice, Form 5130.10. Each person must, before 
commencing business as a brewer, give notice on Form 5130.10. Each 
person continuing business as a brewer as provided in Sec. 25.71 must 
give notice on Form 5130.10. Each notice will be executed under 
penalties of perjury, and all written statements, affidavits, and other 
documents submitted in support of the notice will be made part of the 
notice.
    (c) Additional information. The appropriate ATF officer may at any 
time require the brewer to furnish, as part of the notice, additional 
information which is necessary to protect and insure collection of the 
revenue.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-437, 66 
FR 5479, Jan. 19, 2001]



Sec. 25.62  Data for notice.

    (a) Required information. The brewer shall prepare the notice on 
Form 5130.10 and shall include the following information:
    (1) Serial number.
    (2) Purpose for which filed.
    (3) Name and principal business address of the brewer and the 
location of the brewery if different from the business address.
    (4) Statement of the type of business organization and of the 
persons interested in the business, supported by the information listed 
in Sec. 25.66.
    (5) Description of brewery, as specified in Sec. 25.68.
    (6) A list of trade names which the brewer intends to use in doing 
business or in packaging beer.
    (7) A statement of process for fermented beverages if required by 
Sec. 25.67.
    (8) The name and address of the owner of the land or buildings 
comprising the brewery, and of any mortgagee or other encumbrancer of 
the land or buildings comprising the brewery.
    (9) The 24-hour cycle of operations at the brewery which is to be 
the brewer's business day.
    (10) The process by which the brewer intends to render beer unfit 
for beverage use when beer is to be removed for use in manufacturing 
under Secs. 25.191-25.192.
    (11) Statement showing ownership or controlling interests in other 
breweries which will establish eligibility for the transfer of beer 
without payment of

[[Page 617]]

tax between breweries of the same ownership, as authorized in 
Sec. 25.181.
    (12) The date of the notice and the name and signature of the brewer 
or person authorized to sign on behalf of the brewer.
    (b) Incorporation by reference. If any of the information required 
by paragraph (a)(4) of this section is on file with an ATF office in 
connection with the qualification of any other premises operated by the 
brewer, that information, if accurate and complete, may be incorporated 
into the brewer's notice by reference.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))



Sec. 25.63  Notice of registration.

    The Brewer's Notice, Form 5130.10, when approved by the appropriate 
ATF officer, will constitute the notice of registration of the brewery. 
The appropriate ATF officer will not approve the notice until the notice 
and all incorporated documents are complete, accurate, and in compliance 
with the requirements of this part. A person may not operate a brewery 
until the notice required by this subpart has been approved by the 
appropriate ATF officer.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))



Sec. 25.64  Maintenance of notice file.

    The brewer shall maintain the approved Brewer's Notice, Form 
5130.10, and all incorporated documents at the brewery premises, in 
complete and current condition, readily available for inspection by an 
appropriate ATF officer.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))



Sec. 25.65  Power of attorney.

    The brewer shall execute and file a Form 1534 (5000.8) for each 
person authorized to sign or act on behalf of the brewer. The Form 1534 
(5000.8) is not required for persons whose authority is furnished in the 
Brewer's Notice, Form 5130.10.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))



Sec. 25.66  Organizational documents.

    The supporting information required by paragraph (a)(4) of 
Sec. 25.62 includes, as applicable, the following:
    (a) Corporate documents. (1) Corporate charter or a certificate of 
corporate existence or incorporation;
    (2) List of directors and officers, showing their names and 
addresses;
    (3) Extracts or digests of minutes of meetings of board of 
directors, authorizing certain individuals to sign for the corporation; 
and
    (4) Statement showing the number of shares of stock or other 
evidence of ownership, authorized and outstanding, and the voting rights 
of the respective owners or holders.
    (b) Articles of partnership. Copy of the articles of partnership or 
association, if any, or certificate of partnership or association if 
required to be filed by any State, county, or municipality.
    (c) Statement of interest. (1) Names and addresses of all persons 
having 10 percent or more stock in the corporation, or other legal 
entity, and the nature and amount of the stockholding or other interest 
of each, whether the interest appears in the name of the interested 
party or in the name of another person. If a corporation is wholly owned 
or controlled by another corporation, those persons of the parent 
corporation who meet the above standards are considered to be the 
persons interested in the business of the subsidiary, and the names 
thereof need be furnished only upon request of the appropriate ATF 
officer; or
    (2) In the case of an individual owner or partnership, the name and 
address of each person holding an interest in the brewery, whether the 
interest appears in the name of the interested party or in the name of 
another for that person.
    (d) Availability of additional corporate documents. The originals of 
documents required to be submitted under this section, and additional 
documents such as the articles of incorporation, bylaws, and State 
certificates authorizing the brewer to operate in the State where 
located (if other than the State in which the brewery is incorporated) 
shall be made available to any appropriate ATF officer upon request. In 
the case of multiplant brewers, these documents may be made available at 
the

[[Page 618]]

brewer's home brewery. Each brewer's notice filed by multiplant brewers 
will state the location where these corporate documents may be 
inspected.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))



Sec. 25.67  Statement of process.

    (a) The Brewer's Notice, Form 5130.10 will contain a statement of 
process for any fermented beverage which the brewer intends to produce 
and market under a name other than ``beer,'' ``ale,'' ``porter,'' 
``stout,'' ``lager,'' or ``malt liquor.''
    (b) The statement of process will give the name or designation of 
the product, the kinds and quantities of materials to be used, the 
method of manufacture, and the approximate alcohol content of the 
finished product.
    (c) A statement of process for any fermented beverage (other than 
sake or cereal beverage) will not be approved unless the base product 
has the characteristics of beer as defined in Sec. 25.11.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended, 1388, as amended 
(26 U.S.C. 5052, 5401))



Sec. 25.68  Description of brewery.

    (a) The Brewer's Notice, Form 5130.10, will include a description of 
(1) each tract of land comprising the brewery, and (2) a listing of each 
brewery building by its designated letter or number, giving the 
approximate ground dimensions and the purpose for which ordinarily used.
    (b) The description of the land will be in sufficient detail to 
enable appropriate ATF officers to determine the boundaries of the 
brewery.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))

                  Changes After Original Qualification



Sec. 25.71  Amended or superseding notices.

    (a) Requirement for amended notice. (1) When there is a change with 
respect to the information shown in the Brewer's Notice, Form 5130.10, 
the brewer shall within 30 days of the change (except as otherwise 
provided in this subpart) submit an amended notice setting forth the new 
information. Changed notices will be submitted in skeleton form, with 
unchanged items marked ``No change since Form 5130.10, Serial No. ----
--.''
    (2) The appropriate ATF officer may require immediate filing of an 
amended Form 5130.10 if the accuracy of existing documents has been 
affected by any change.
    (b) Requirement for superseding notice. (1) The appropriate ATF 
officer may require a brewer to file a new and complete notice, 
superseding those previously filed, in conjunction with the filing of a 
new bond. This superseding notice will become effective on the date of 
the brewer's bond or on the date of the brewer's bond continuation 
certificate.
    (2) If the information required by Sec. 25.62(a) (4), (5), (6), (7), 
(9), and (10) is on file as part of an approved Form 5130.10 and is 
current, the brewer may incorporate by reference those documents as part 
of any superseding notice.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))



Sec. 25.72  Change in proprietorship.

    (a) General. If there is a change in the proprietorship of a 
brewery, the outgoing brewer shall comply with the requirements of 
Sec. 25.85. The successor brewer shall, before beginning operations, 
qualify in the same manner as the proprietor of a new brewery. The 
successor brewer shall file a new notice and bond in his or her own 
name. Beer on hand may be transferred without payment of tax to the 
successor brewer and will be accounted for by that brewer.
    (b) Fiduciary. (1) If the successor to the brewer is an 
administrator, executor, receiver, trustee, assignee or other fiduciary, 
the fiduciary may in lieu of filing a new notice and bond, file an 
amended notice and furnish a consent of surety extending the terms of 
the predecessor's bond or continuation certificate.
    (2) The fiduciary shall furnish the appropriate ATF officer a 
certified copy of the court order or other document showing 
qualification as fiduciary. The effective date of the qualifying 
documents filed by a fiduciary will be the

[[Page 619]]

same as the date of the order, or the date therein specified for the 
fiduciary to assume control. If the fiduciary was not appointed by the 
court, the date of the appointment will be the effective date of the 
qualifying documents filed by the fiduciary.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))



Sec. 25.73  Change in partnership.

    (a) New notice required. The withdrawal of one or more members of a 
partnership or the taking in of a new partner, whether active or silent, 
constitutes a change in proprietorship. Unless exempted by paragraph (b) 
of this section, the death, bankruptcy or adjudicated insolvency of one 
or more partners results in a dissolution of the partnership and a 
change in proprietorship. The successor shall qualify the brewery in the 
same manner as the proprietor of a new brewery.
    (b) Continuing partnership. A surviving partner or partners may 
continue to operate the brewery for purposes of liquidation and 
settlement under the following conditions:
    (1) Under the laws of the State where the partnership was formed, 
the partnership is not terminated on death or insolvency of a 
partner(s); and
    (2) Under the laws of the State where the partnership was formed, 
the surviving partner(s) has the exclusive right to control and 
possession of the partnership assets for the purpose of liquidation and 
settlement; and
    (3) A consent of surety is filed in which the surety and the 
surviving partner(s) agree to remain liable on the bond.
    (c) Settlement of partnership. If the surviving partner(s) acquires 
the business on completion of the settlement of the partnership, that 
partner(s) shall qualify in his or her own name from the date of 
acquisition and give a new brewer's notice on Form 5130.10 and a new 
bond on Form 5130.22.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986; 51 FR 10540, Mar. 27, 1986]



Sec. 25.74  Change in stockholders.

    Changes in the list of stockholders furnished under the provisions 
of Sec. 25.66(c)(1) shall be submitted annually by the brewer on July 1 
or on any other date approved by the appropriate ATF officer. When the 
sale or transfer of capital stock results in a change in the control or 
management of the business, notification of the change will be made 
within 30 days in accordance with Sec. 25.71.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))



Sec. 25.75  Change in officers and directors.

    When there is any change in the list of officers or directors 
furnished under the provisions of Sec. 25.66(a)(4), the brewer shall 
submit, within 30 days of the change, an amended notice on Form 5130.10. 
If the brewer has shown to the satisfaction of the appropriate ATF 
officer that certain corporate officers listed on the original notice 
have no responsibilities in connection with the operations covered by 
the notice, the appropriate ATF officer may waive the requirements for 
submitting applications for amended notice to cover changes of those 
corporate officers. In the case of multiplant brewers, new brewers 
notices need not be filed for those breweries in which the lists of 
officers and directors are incorporated by reference in their brewer's 
notices under Sec. 25.62(b).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))



Sec. 25.76  Change in statement of process.

    When there is a change in the information in a statement of process 
required by Sec. 25.62(a)(7) for any fermented beverage produced and 
marketed under a name other than ``beer,'' ``ale,'' ``porter,'' 
``stout,'' ``lager,'' or ``malt liquor,'' the brewer shall submit an 
amended notice and obtain approval of the notice prior to using the 
changed statement of process.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))



Sec. 25.77  Change in location.

    When there is a change in the location of the brewery, the brewer 
shall

[[Page 620]]

file an amended Form 5130.10, and a new bond, Form 5130.22, or a consent 
of surety, Form 1533 (5000.18), in accordance with Sec. 25.91, extending 
the terms of the bond or continuation certificate to cover operations at 
the new location. The brewer may not begin operations at the new 
location until the appropriate ATF officer approves the required 
documents.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))



Sec. 25.78  Change in premises.

    Except as authorized in Sec. 25.81, when the brewery is to be 
extended or curtailed, the brewer shall file an amended Form 5130.10. 
The additional facilities covered by the extension may not be used for 
the proposed purposes, and the portion to be curtailed may not be used 
for other than the previously approved purposes, prior to approval of 
Form 5130.10

(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))

                        Alternation of Operations



Sec. 25.81  Alternation of brewery and bonded or taxpaid wine premises.

    (a) General. A brewer operating a contiguous bonded winery or 
taxpaid wine bottling house may, as provided in this section, alternate 
the use of each premises by extension or curtailment.
    (b) Qualifying documents. The brewer shall file and receive approval 
of the following qualifying documents:
    (1) ATF F 5120.25 and Form 5130.10 to cover the curtailment and 
extension of the premises to be alternated.
    (2) Special diagrams, in duplicate, delineating the brewery premises 
and the bonded or taxpaid wine premises as they will exist both during 
extension and curtailment. The diagrams will clearly depict all areas, 
buildings, floors, rooms, equipment and pipelines which are to be 
subject to alternation in their relative operating sequence.
    (3) Evidence of existing bond, consent of surety, continuation 
certificate, or a new bond to cover the proposed alternation of 
premises.
    (c) Brewer's responsibility. After approval of qualifying documents, 
the brewer may alternate the designated premises pursuant to a 
letterhead notice submitted to the appropriate ATF officer. The notice 
will contain the information required by paragraph (d) of this section. 
Prior to the effective date and hour of the alternation, the brewer 
shall
    (1) Remove all beer on brewery premises to be alternated to bonded 
or taxpaid wine premises, or
    (2) Remove all wine from bonded to taxpaid wine premises to be 
alternated to brewery premises.
    (d) Information for notice. The notice required by paragraph (c) of 
this section will contain the following information:
    (1) Plant name and address;
    (2) Serial number;
    (3) Effective date and hour of proposed change;
    (4) Whether premises are to be curtailed or extended;
    (5) Purpose of curtailment or extension;
    (6) Identification of the special diagram depicting the premises as 
they exist when curtailed or extended; and
    (7) Date of execution and signature of brewer.
    (e) Separation of premises. The appropriate ATF officer may require 
that the portion of brewery or bonded or taxpaid wine premises extended 
or curtailed under this section be separated, in a manner satisfactory 
to the appropriate ATF officer, from the remaining portion of the 
brewery or bonded or taxpaid premises.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended, 1389, as amended, 
1390, as amended (26 U.S.C. 5401, 5411, 5415))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986; 51 FR 9190, Mar. 18, 1986; as 
amended by T.D. ATF-299, 55 FR 24989, June 19, 1990]

                       Discontinuance of Business



Sec. 25.85  Notice of permanent discontinuance.

    When a brewer desires to discontinue business permanently, he or she 
must file a notice on Form 5130.10. The brewer must state the purpose of 
the notice as ``Discontinuance of business'' and give the date of the 
discontinuance. When all beer has been lawfully disposed of, appropriate 
ATF officer will approve the Form 5130.10 and return a copy to the 
brewer. The brewer shall

[[Page 621]]

file a report on Form 5130.9 showing no beer or cereal beverage on hand 
and marked ``Final Report.''

(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-437, 66 
FR 5479, Jan. 19, 2001]



                 Subpart H--Bonds and Consents of Surety



Sec. 25.91  Requirement for bond.

    (a) General. Every person intending to commence the business of a 
brewer shall file a bond, Form 5130.22, as prescribed in this subpart, 
covering operations at the brewery, at the time of filing the original 
Brewer's Notice, Form 5130.10. Every brewer intending to continue the 
business of a brewer shall, once every 4 years, or as provided in 
Sec. 25.95, execute and file a new bond, or continuation certificate as 
provided in Sec. 25.97.
    (b) Conditions of the bond. The Brewer's Bond, Form 5130.22, will be 
conditioned upon the brewer faithfully complying with all provisions of 
law and regulations relating to the activities covered by the bond, and 
upon paying all taxes imposed by 26 U.S.C. Chapter 51 and all interest 
and penalties incurred or fines imposed for violations of those 
provisions.
    (c) Additional information. The appropriate ATF officer shall 
require, in connection with any brewer's bond, a statement executed 
under the penalties of perjury, as to whether the principal or any 
person owning, controlling, or actively participating in the management 
of the business of the principal has been convicted of or has 
compromised any offense set forth in Sec. 25.101(a)(1), or has been 
convicted of any offense set forth in Sec. 25.101(a)(2). In the event 
the above statement contains an affirmative answer, the applicant shall 
submit a statement describing in detail the circumstances surrounding 
the conviction or compromise.
    (d) Bond required before beginning business. A person may not begin 
business or continue business as a brewer until first receiving notice 
that the appropriate ATF officer has approved the bond, continuation 
certificate, or consent of surety, as required by this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401); 
sec. 4(a), Pub. L. 91-673, 84 Stat. 2057 (26 U.S.C. 5417))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-437, 66 
FR 5479, Jan. 19, 2001]



Sec. 25.92  Consent of surety.

    A brewer may change the terms of any bond filed under this part by 
filing a consent of surety. Consents of surety will be executed on Form 
1533 (5000.18) by the brewer and the surety on the bond, with the same 
formality and proof of authorization as required for the execution of a 
bond.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))



Sec. 25.93  Penal sum of bond.

    (a) Calculation. The penal sum of the brewer's bond will be equal to 
10 percent of the maximum amount of tax, calculated at the rates 
prescribed by law, which the brewer will become liable to pay during a 
calendar year during the period of the bond on beer:
    (1) Removed for transfer to the brewery from other breweries owned 
by the same brewer;
    (2) Removed without payment of tax for export or for use as supplies 
on vessels and aircraft;
    (3) Removed without payment of tax for use in research, development, 
or testing; and
    (4) Removed for consumption or sale.
    (b) Concentrate. A brewer who concentrates beer under subpart R of 
this part shall calculate the penal sum of the bond by computing 10 
percent of the amount of tax at the rates prescribed by law, on the 
maximum quantity of beer used in the production of concentrate during a 
calendar year. The brewer shall add this amount to the penal sum 
calculated under paragraph (a) of this section to determine the total 
penal sum of the brewer's bond.
    (c) Maximum and minimum penal sums. The maximum penal sum of the 
bond (or total penal sum if original and strengthening bonds are filed) 
is not to exceed $150,000 when the tax on beer is to be prepaid, or 
$500,000 when the tax

[[Page 622]]

is to be deferred as provided in Sec. 25.164. The minimum penal sum of a 
bond is $1,000.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))



Sec. 25.94  Strengthening bonds.

    (a) Requirement. When the penal sum of the brewer's bond (calculated 
as provided in Sec. 25.93) in effect is not sufficient, the principal 
may prepay the tax on beer as provided in subpart K of this part, or 
give a strengthening bond in sufficient penal sum if the surety is the 
same as on the bond in effect. If the surety is not the same, a new bond 
covering the entire liability is required.
    (b) Restrictions. A strengthening bond may not in any way release a 
former bond or limit a bond to less than the full penal sum.
    (c) Date of execution. Strengthening bonds will show the current 
date of execution and their effective date.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))



Sec. 25.95  New bond.

    The appropriate ATF officer may at any time, at his or her 
discretion, require a new bond. A new bond is required immediately in 
the case of insolvency of a surety. Executors, administrators, 
assignees, receivers, trustees, or other persons acting in a fiduciary 
capacity shall execute a new bond or obtain a consent of surety on all 
bonds in effect. When the interests of the Government so demand, or in 
any case when the security of the bond becomes impaired for any reason, 
the principal will be required to give a new bond. When a bond is found 
to be not acceptable by the appropriate ATF officer, the principal will 
be required immediately to obtain a new and satisfactory bond or 
discontinue business.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))



Sec. 25.96  Superseding bond.

    When the principal submits a new bond to supersede a bond or bonds 
in effect, the appropriate ATF officer, after approving the superseding 
bond, will issue a notice of termination for the superseded bond under 
the provisions of this subpart. Superseding bonds will show the current 
date of execution and their effective date.



Sec. 25.97  Continuation certificate.

    If the contract of surety between the brewer and the surety on an 
expiring bond or continuation certificate is continued in force for a 
succeeding period of not less than 4 years from the expiration date of 
the bond or continuation certificate, the brewer may submit, in lieu of 
a new bond, a Brewer's Bond Continuation Certificate on Form 5130.23, 
executed under the penalties of perjury, by the brewer and the surety 
attesting to continuation of the bond. Each continuation certificate 
will constitute a bond and all provisions of law and regulations 
applicable to bonds on Form 5130.22 given under this part, including the 
disapproval of bonds, are applicable to continuation certificates.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))



Sec. 25.98  Surety or security.

    (a) Bond coverage. Bonds required by this part will be given with 
corporate surety or collateral security.
    (b) Corporate surety. Surety bonds may be given only with surety 
companies holding certificates of authority from the Secretary as 
acceptable sureties on Federal bonds, subject to the limitations set 
forth in the current revision of Treasury Department Circular No. 570, 
Companies Holding Certificates of Authority as Acceptable Reinsuring 
Companies.
    (c) Revisions of Circular No. 570. Treasury Department Circular No. 
570 is published in the Federal Register annually as of the first 
workday in July. As they occur, interim revisions of the circular are 
published in the Federal Register. Copies may be obtained from the 
Surety Bond Branch, Financial Management Service, Department of the 
Treasury, Washington, DC 20226.
    (d) More than one corporate surety. A bond may be executed by two or 
more corporate sureties. Each corporate surety may limit its liability 
in terms on the face of the bond in a specified amount. This amount may 
not exceed the limitations set forth for corporate security by the 
Secretary which are set forth in the current revision of Treasury 
Department Circular No. 570. The

[[Page 623]]

sum of the liabilities for the sureties will equal the required penal 
sum of the bond.
    (e) Deposit of collateral securities in lieu of corporate surety. 
Bonds or notes of the United States, or other obligations which are 
unconditionally guaranteed as to both interest and principal by the 
United States, may be pledged and deposited by principals as collateral 
security in lieu of corporate surety in accordance with 31 CFR Part 225.

(96 Stat. 1068, 1085 (31 U.S.C. 9304-9308); sec. 201, Pub. L. 85-859, 72 
Stat. 1388, as amended (26 U.S.C. 5401))



Sec. 25.99  Filing powers of attorney.

    Each bond, continuation certificate, and each consent of surety will 
be accompanied by a power of attorney authorizing the agent or officer 
to execute the document. The power of attorney will be prepared on a 
form provided by the surety company and executed under the corporate 
seal of the company. If the power of attorney submitted is other than a 
manually signed original, it will be accompanied by a certificate of its 
validity.

(96 Stat. 1068, 1085 (31 U.S.C. 9304-9308))

        Disapproval or Termination of Bonds or Consents of Surety



Sec. 25.101  Disapproval of bonds or consents of surety.

    (a) Reasons for disapproval. The appropriate ATF officer may 
disapprove a bond or consent of surety if the individual, firm, 
partnership, corporation, or association giving the bond or consent of 
surety, or if any of the above entities owning, controlling or actively 
participating in the management of a business giving a bond as a brewer, 
has been previously convicted in a court of competent jurisdiction of:
    (1) Any fraudulent noncompliance with any provision of law of the 
United States if it related to internal revenue or customs taxation of 
distilled spirits, wines or beer, or if the offense shall have been 
compromised with the individual, firm, partnership, corporation, or 
association on payment of penalties or otherwise; or
    (2) Any felony under a law of any State or the District of Columbia, 
or the United States, prohibiting the manufacture, sale, importation, or 
transportation of distilled spirits, wines, beer, or other intoxicating 
liquor.
    (b) Appeal of disapproval. If the bond or consent of surety is 
disapproved, the person giving the bond or consent of surety may appeal 
the disapproval to the appropriate ATF officer, who will grant a hearing 
in the matter if requested by the applicant or brewer, and whose 
decision will be final.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1394, as amended (26 U.S.C. 5551))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-437, 66 
FR 5479, Jan. 19, 2001]



Sec. 25.102  Termination of surety's liability.

    The liability of a surety on a bond required by this part will be 
terminated only as to liability arising on or after: (a) the effective 
date of a superseding bond; (b) the date of approval of the 
discontinuance of business of the brewer; or (c) following the giving of 
notice by the surety as provided in Sec. 25.103.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))



Sec. 25.103  Notice by surety for relief from liability under bond.

    A surety may, at any time, in writing, notify the principal and the 
appropriate ATF officer that the surety desires after a specified date 
(not less than 60 days after the date of service on the principal) to be 
relieved of any liability under the bond which is incurred by the 
principal after the date named in the notice. The surety shall include 
proof of service of the notice on the principal with the notice filed 
with the appropriate ATF officer. The notice will become effective on 
the date named, unless the surety withdraws the notice, in writing. The 
surety on the bond remains liable under the bond with respect to any 
liability incurred by the principal while the bond is in effect.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))

[[Page 624]]



Sec. 25.104  Termination of bonds.

    Brewer's bonds may be terminated as to liability for future removals 
or receipts (a) pursuant to application of the surety as provided in 
Sec. 25.103, (b) on approval of a superseding bond, or (c) on 
notification by the principal that the business has been discontinued. 
On termination of the surety's liability under a bond, the appropriate 
ATF officer will notify the principal and sureties.

(31 U.S.C. 9301, 9303)



Sec. 25.105  Release of collateral security.

    Bonds, notes, and other obligations of the United States, pledged 
and deposited as security in connection with bonds required by this part 
will be released in accordance with 31 CFR Part 225. When the 
appropriate ATF officer determines there is no outstanding liability 
against the bond and that it is no longer necessary to hold the 
security, he or she shall fix the date or dates on which a part or all 
of the security will be released. At any time prior to the release of 
the security, the appropriate ATF officer may, for proper cause, extend 
the date of release of the security for an additional length of time as 
may be appropriate.

(31 U.S.C. 9301, 9303)



                        Subpart I--Special Taxes

                        Liability for Special Tax



Sec. 25.111  Brewer's special tax.

    (a) General. Every brewer shall pay a special (occupational) tax at 
the rate specified by Sec. 25.111a or Sec. 25.111b, whichever is 
applicable. The tax shall be paid on or before the date of commencing 
business as a brewer, and thereafter every year on or before July 1. On 
commencing business, the tax shall be computed from the first day of the 
month in which liability is incurred, through the following June 30. 
Thereafter, the tax shall be computed for the entire year (July 1 
through June 30).
    (b) Transition rule. A brewer who was engaged in business on January 
1, 1988, and paid a special (occupational) tax for a taxable period 
which began before January 1, 1988, and included that date, shall pay an 
increased special tax for the period January 1, 1988, through June 30, 
1988. The increased special tax shall not exceed one-half the excess (if 
any) of (1) the rate of special tax in effect on January 1, 1988, over 
(2) the rate of such tax in effect on December 31, 1987. The increased 
special tax shall be paid on or before April 1, 1988.

(26 U.S.C. 5091, 5142)

[T.D. ATF-271, 53 FR 17547, May 17, 1988]



Sec. 25.111a  Special tax rates.

    (a) Prior rates. The special (occupational) tax imposed on brewers 
prior to January 1, 1988, was $110 a year, except that the special tax 
for any brewer of less than 500 barrels a year was $55 a year.
    (b) Rate effective January 1, 1988. The special tax rate imposed on 
brewers (other than small brewers as defined in Sec. 25.111b) is $1000 a 
year.

(26 U.S.C. 5091)

[T.D. ATF-271, 53 FR 17547, May 17, 1988]



Sec. 25.111b  Reduced rate of tax for small brewers.

    (a) General. Effective January 1, 1988, 26 U.S.C. 5091(b) provides 
for a reduced rate of tax with respect to any brewer whose gross 
receipts (for the most recent taxable year ending before the first day 
of the taxable period to which the tax imposed by Sec. 25.111 relates) 
are less than $500,000. The rate of tax for such a brewer is $500 a 
year. The ``taxable year'' to be used for determining gross receipts is 
the taxpayer's income tax year. All gross receipts of the taxpayer shall 
be included, not just the gross receipts of the business subject to 
special tax. Proprietors of new businesses that have not yet begun a 
taxable year, as well as proprietors of existing businesses that have 
not yet ended a taxable year, who commence a new activity subject to 
special tax, qualify for the reduced special (occupational) tax rate, 
unless the business is a member of a ``controlled group''; in that case, 
the rules of paragraph (b) of this section shall apply.
    (b) Controlled group. In determining gross receipts, all persons 
treated as one taxpayer under 26 U.S.C. 5061(e)(3) shall be treated as 
one taxpayer for

[[Page 625]]

purposes of paragraph (a) of this section. ``Controlled group'' means a 
controlled group of corporations, as defined in 26 U.S.C. 1563, and 
implementing regulations in 26 CFR 1.1563-1 through 1.1563-4, except 
that the words ``at least 80 percent'' shall be replaced by the words 
``more than 50 percent'' in each place they appear in subsection (a) of 
26 U.S.C. 1563, as well as in the implementing regulations. Also, the 
rules for a ``controlled group of corporations'' apply in a similar 
fashion to groups which include partnerships and/or sole 
proprietorships. If one entity maintains more than 50% control over a 
group consisting of corporations and one, or more, partnerships and/or 
sole proprietorships, all of the members of the controlled group are one 
taxpayer for the purpose of this section.
    (c) Short taxable year. Gross receipts for any taxable year of less 
than 12 months shall be annualized by multiplying the gross receipts for 
the short period by 12 and dividing the result by the number of months 
in the short period as required by 26 U.S.C. 448(c)(3).
    (d) Returns and allowances. Gross receipts for any taxable year 
shall be reduced by returns and allowances made during that year under 
26 U.S.C. 448(c)(3).

(26 U.S.C. 448, 5061, 5091)

[T.D. ATF-271, 53 FR 17547, May 17, 1988]



Sec. 25.112  Wholesaler's special tax.

    A brewer shall be subject to or exempt from a wholesaler's special 
(occupational) tax as provided in Part 194 of this chapter.

(26 U.S.C. 5111, 5142)

[T.D. ATF-271, 53 FR 17548, May 17, 1988]



Sec. 25.113  Each place of business taxable.

    (a) General. A brewer incurs special tax liability at each place of 
business in which an occupation subject to special tax is conducted. A 
place of business means the entire office, plant or area of the business 
in any one location under the same proprietorship. Passageways, streets, 
highways, rail crossings, waterways, or partitions dividing the premises 
are not sufficient separation to require additional special tax, if the 
divisions of the premises are otherwise contiguous.
    (b) Exception for contiguous areas. A brewer will not incur 
additional special tax liability for sales of beer made at a location 
other than on brewery premises described on the brewer's notice, Form 
5130.10, if the location where such sales are made is contiguous to the 
brewery premises in the manner described in paragraph (a) of this 
section.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1347, as amended (26 U.S.C. 5143))



Sec. 25.114  Exemptions from dealer's special taxes.

    (a) Brewer. A brewer is not required to pay special tax as a 
wholesale or retail dealer in beer because of sales, at the principal 
place of business or at the brewery, of beer which at the time of sale 
is stored at the brewery or which had been removed and stored in a 
taxpaid storeroom operated in connection with the brewery. Each brewer 
shall have only one exemption from dealer's special tax for each 
brewery. The brewer may designate, in writing to the appropriate ATF 
officer, that the principal place of business will be exempt from 
dealer's special tax; otherwise, the exemption will apply to the 
brewery.
    (b) Wholesale dealer. A wholesale dealer in beer who has paid the 
appropriate special tax will not again be required to pay special tax as 
a wholesale dealer in beer because of sales of beer to wholesale or 
retail dealers in liquors or beer or to limited retail dealers, at the 
purchaser's place of business.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1340, as amended (26 U.S.C. 5113))

                    Execution of Special Tax Returns



Sec. 25.117  Special tax returns.

    Special tax shall be paid by return. The prescribed return is ATF 
Form 5630.5, Special Tax Registration and Return. Special tax returns, 
with payment of tax, shall be filed with ATF in accordance with 
instructions on the form.

[T.D. ATF-271, 53 FR 17548, May 17, 1988]

[[Page 626]]



Sec. 25.118  Preparation of ATF Form 5630.5.

    All of the information called for on Form 5630.5 shall be provided, 
including:
    (a) The true name of the taxpayer.
    (b) The trade name(s) (if any) of the business(es) subject to 
special tax.
    (c) The employer identification number (see Sec. 25.121).
    (d) The exact location of the place of business, by name and number 
of building or street, or if these do not exist, by some description in 
addition to the post office address. In the case of one return for two 
or more locations, the address to be shown shall be the taxpayer's 
principal place of business (or principal office, in the case of a 
corporate taxpayer).
    (e) The class(es) of special tax to which the taxpayer is subject.
    (f) Ownership and control information: that is, the name, position, 
and residence address of every owner of the business and of every person 
having power to control its management and policies with respect to the 
activity subject to special tax. ``Owner of the business'' shall include 
every partner, if the taxpayer is a partnership, and every person owning 
10% or more of its stock, if the taxpayer is a corporation. However, the 
ownership and control information required by this paragraph need not be 
stated if the same information has been previously provided to ATF in 
connection with the Brewer's Notice, and if the information previously 
provided is still current.

[T.D. ATF-271, 53 FR 17548, May 17, 1988]



Sec. 25.119  Multiple locations and/or classes of tax.

    A taxpayer subject to special tax for the same period at more than 
one location or for more than one class of tax shall--
    (a) File one special tax return, ATF Form 5630.5, with payment of 
tax, to cover all such locations and classes of tax; and
    (b) Prepare, in duplicate, a list identified with the taxpayer's 
name, address (as shown on ATF Form 5630.5), employer identification 
number, and period covered by the return. The list shall show, by 
States, the name, address, and tax class of each location for which 
special tax is being paid. The original of the list shall be filed with 
ATF in accordance with instructions on the return, and the copy shall be 
retained at the taxpayer's principal place of business (or principal 
office, in the case of a corporate taxpayer) for the period specified in 
Sec. 25.300(c).

[T.D. ATF-271, 53 FR 17548, May 17, 1988]



Sec. 25.120  Signing of ATF Forms 5630.5.

    (a) Ordinary returns. The return of an individual proprietor shall 
be signed by the individual. The return of a partnership shall be signed 
by a general partner. The return of a corporation shall be signed by any 
officer. In each case, the person signing the return shall designate his 
or her capacity as ``individual owner,'' ``member of firm,'' or, in the 
case of a corporation, the title of the officer.
    (b) Fiduciaries. Receivers, trustees, assignees, executors, 
administrators, and other legal representatives who continue the 
business of a bankrupt, insolvent, deceased person, etc., shall indicate 
the fiduciary capacity in which they act.
    (c) Agent or attorney in fact. If a return is signed by an agent or 
attorney in fact, the signature shall be preceded by the name of the 
principal and followed by the title of the agent or attorney in fact. A 
return signed by a person as agent will not be accepted unless there is 
filed, with the ATF office with which the return is required to be 
filed, a power of attorney authorizing the agent to perform the act.
    (d) Perjury statement. ATF Forms 5630.5 shall contain or be verified 
by a written declaration that the return has been executed under the 
penalties of perjury.

(26 U.S.C. 5142, 6061, 6065, 6151, 7011)

[T.D. ATF-271, 53 FR 17548, May 17, 1988]

                     Employer Identification Numbers



Sec. 25.121  Employer identification number.

    The employer identification number (defined in 26 CFR 301.7701-12) 
of the taxpayer who has been assigned such a number shall be shown on 
each special tax return, including amended returns,

[[Page 627]]

filed under this subpart. Failure of the taxpayer to include the 
employer identification number may result in the imposition of the 
penalty specified in Sec. 70.113 of this chapter.

(26 U.S.C. 6109, 6676)

[T.D. ATF-271, 53 FR 17548, May 17, 1988, as amended by T.D. ATF-301, 55 
FR 47605, Nov. 14, 1990]



Sec. 25.122  Application for employer identification number.

    Each taxpayer who files a special tax return, who has not already 
been assigned an employer identification number, shall file IRS Form SS-
4 to apply for one. The taxpayer shall apply for and be assigned only 
one employer identification number, regardless of the number of places 
of business for which the taxpayer is required to file a special tax 
return. The employer identification number shall be applied for no later 
than 7 days after the filing of the taxpayer's first special tax return. 
IRS Form SS-4 may be obtained from the director of an IRS service center 
or from any IRS district director.

(26 U.S.C. 6109)

[T.D. ATF-271, 53 FR 17548, May 17, 1988]



Sec. 25.123  Preparation and filing of IRS Form SS-4.

    The taxpayer shall prepare and file IRS Form SS-4, together with any 
supplementary statement, in accordance with the instructions on the form 
or issued in respect to it.

(26 U.S.C. 6109)

[T.D. ATF-271, 53 FR 17549, May 17, 1988]

                           Special Tax Stamps



Sec. 25.125  Issuance of special tax stamps.

    Upon filing a properly executed return on ATF Form 5630.5, together 
with the full remittance, the taxpayer will be issued an appropriately 
designated special tax stamp. If the return covers multiple locations, 
the taxpayer will be issued one appropriately designated stamp for each 
location listed on the attachment required by Sec. 25.119, but showing, 
as to name and address, only the name of the taxpayer and the address of 
the taxpayer's principal place of business (or principal office in the 
case of a corporate taxpayer).

(26 U.S.C. 6806)

[T.D. ATF-271, 53 FR 17549, May 17, 1988]



Sec. 25.126  Distribution of stamps for multiple locations.

    On receipt of the special tax stamps, the taxpayer shall verify that 
there is one stamp for each location listed on the attachment to Form 
5630.5. The taxpayer shall designate one stamp for each location and 
type on each stamp the address of the business conducted for which that 
stamp is designated. The taxpayer shall then forward each stamp to the 
place of business designated on the stamp.

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-251, 52 
FR 19313, May 22, 1987]



Sec. 25.127  Examination of special tax stamps.

    All stamps denoting payment of special tax will be kept available 
for inspection by appropriate ATF officers, at the location for which 
designated, during business hours.

(Act of August 16, 1954 68A Stat. 831, as amended (26 U.S.C. 6806); sec. 
201, Pub. L. 85-859, 72 Stat. 1348, as amended (26 U.S.C. 5146))

                      Changes in Special Tax Stamps



Sec. 25.131  Change in name.

    If there is a change in the corporate or firm name, or in the trade 
name, as shown on Form 5630.5, the brewer shall file an amended special 
tax return as soon as practicable after the change covering the new 
corporate or firm name, or trade names. No new special tax is required 
to be paid. The brewer shall attach the special tax stamp for 
endorsement of the change in name.

(26 U.S.C. 7011)

[T.D. ATF-271, 53 FR 17549, May 17, 1988]



Sec. 25.132  Change in proprietorship.

    (a) General. If there is a change in the proprietorship of a 
brewery, the successor shall obtain the required special tax stamps.
    (b) Exemption for certain successors. Persons having the right of 
succession provided for in Sec. 25.133 may carry on

[[Page 628]]

the business for the remainder of the period for which the special tax 
was paid, if within 30 days after the date on which the successor begins 
to carry on the business, the successor files a return on Form 5630.5, 
which shows the basis of succession. A person who is a successor to a 
business for which special tax has been paid and who fails to register 
the succession is liable for special tax computed from the first day of 
the calendar month in which he or she began to carry on the business.

(Act of August 16, 1954, 68A Stat. 845, as amended (26 U.S.C. 7011); 
sec. 201, Pub. L. 85-859, 72 Stat. 1347, as amended (26 U.S.C. 5143))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-251, 52 
FR 19313, May 22, 1987]



Sec. 25.133  Persons having right of succession.

    Under the conditions indicated in Sec. 25.132, the right of 
succession will pass to certain persons in the following cases:
    (a) Death. The widowed spouse or child, or executor, administrator, 
or other legal representative of the taxpayer;
    (b) Succession of spouse. A husband or wife succeeding to the 
business of his or her spouse (living);
    (c) Insolvency. A receiver or trustee in bankruptcy, or an assignee 
for benefit of creditors;
    (d) Withdrawal from firm. The partner or partners remaining after 
death or withdrawal of a member.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1347, as amended (25 U.S.C. 5143))



Sec. 25.134  Change in location.

    If there is a change in location of a taxable place of business, the 
brewer shall, within 30 days after the change, file with ATF an amended 
special tax return covering the new location. The brewer shall attach 
the special tax stamp or stamps, for endorsement of the change in 
location. No new special tax is required to be paid. However, if the 
brewer does not file the amended return within 30 days, the brewer is 
required to pay a new special tax and obtain a new special tax stamp.

(26 U.S.C. 5143, 7011)

[T.D. ATF-271, 53 FR 17549, May 17, 1988]



                  Subpart J--Marks, Brands, and Labels



Sec. 25.141  Barrels and kegs.

    (a) General requirements. The brewer's name or trade name and the 
place of production (city and, if necessary for identification, State) 
shall be permanently marked on each barrel or keg. If the place of 
production is clearly shown on the bung or on the tap cover, or on a 
label securely affixed to each barrel or keg, the place of production 
need not be permanently marked on each barrel or keg. No statement as to 
payment of internal revenue taxes may be shown.
    (b) Breweries of same ownership. (1) If two or more breweries are 
owned or operated by the same person, firm, or corporation (as defined 
in Sec. 25.181), the place of production:
    (i) May be shown as the only location on the bung, or on the tap 
cover, or on a separate label attached to the keg;
    (ii) May be included in a listing of the locations of breweries 
qualified under this part if the place of production is not given less 
emphasis than any of the other locations; or
    (iii) Need not be shown if the brewer's principal place of business 
is shown in lieu of any other location. The brewer's principal place of 
business will be the location of a brewery operated by the brewer and 
qualified under this part.
    (2) If the location of two or more breweries is shown on the keg, 
bung, tap cover, or on a separate label attached to the keg (paragraph 
(b)(1)(ii)), or if the brewer's principal place of business is shown in 
lieu of the actual place of production (paragraph (b)(1)(iii)), the 
brewer shall indicate the actual place of production by printing, coding 
or other markings on the keg, bung, tap cover, or on a separate label 
attached to the keg. The coding system employed will permit an 
appropriate ATF officer to determine the place of production (including 
street address if two or more breweries are located in the same city) of 
the beer. The brewer must notify the appropriate ATF officer prior to 
employing a coding system.
    (c) Label approval required. Labels or tap covers used by brewers 
shall be

[[Page 629]]

covered by certificates of label approval, Form 5100.31, when required 
by Part 7 of this chapter.

(Approved by the Office of Management and Budget under control number 
1512-0474)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5412))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-225, 51 
FR 8492, Mar. 12, 1986; T.D. ATF-437, 66 FR 5479, Jan. 19, 2001]



Sec. 25.142  Bottles.

    (a) Label requirements. Each bottle of beer shall show by label or 
otherwise the name or trade name of the brewer, the net contents of the 
bottle, the nature of the product such as beer, ale, porter, stout, 
etc., and the place of production (city and, when necessary for 
identification, State). No statement as to payment of internal revenue 
taxes may be shown.
    (b) Breweries of same ownership. (1) If two or more breweries are 
owned or operated by the same person, firm, or corporation (as defined 
in Sec. 25.181), the place of production:
    (i) May be shown as the only location on the label;
    (ii) May be included in a listing of the locations of breweries 
qualified under this part if the place of production is not given less 
emphasis than any of the other locations; or
    (iii) Need not be shown if the brewer's principal place of business 
is shown in lieu of any other location. The brewer's principal place of 
business will be the location of a brewery operated by the brewer and 
qualified under this part.
    (2) If the location of two or more breweries is shown on the label 
(paragraph (b)(1)(ii)), or if the brewer's principal place of business 
is shown on the label in lieu of the actual place of production 
(paragraph (b)(1)(iii)), the brewer shall indicate the actual place of 
production by printing, coding or other markings on the label, bottle, 
crown or lid. The coding system employed will permit an appropriate ATF 
officer to determine the place of production (including street address 
if two or more breweries are located in the same city) of the beer. The 
brewer must notify the appropriate ATF offcer prior to employing a 
coding system.
    (c) Distinctive names. If the brewer's name, trade name or brand 
name includes the name of a city which is not the place where the beer 
was produced, the appropriate ATF officer may require the brewer to 
state the actual place of production on the label.
    (d) Tolerances. The statement of net contents shall indicate exactly 
the volume of beer within the bottle except for variations in measuring 
as may occur in filling conducted in compliance with good commercial 
practice. The barrel equivalent of bottles filled during a consecutive 
three month period, calculated on the basis of the brewer's fill test 
records, may not vary more than 0.5 percent from the barrel equivalent 
of bottles filled during the same period, calculated on the basis of the 
stated net contents of the bottles. The brewer is liable for the tax on 
the entire amount of beer removed, without benefit of tolerance, when 
the fill of bottles and cans exceeds the tolerance for the three month 
period, or when filling is not conducted in compliance with good 
commercial practice.
    (e) Label approval required. Labels used by brewers shall be covered 
by certificates of label approval, Form 5100.31, when required by Part 7 
of this chapter.
    (f) Short-fill bottles. A brewer may dispose of taxpaid short-fill 
bottles of beer to employees for their use but not for resale. These 
bottles need not be labeled, but if labeled they need not show an 
accurate statement of net contents.

(Approved by the Office of Management and Budget under control number 
1512-0474)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5412))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-225, 51 
FR 8492, Mar. 12, 1986; T.D. ATF-437, 66 FR 5479, Jan. 19, 2001]



Sec. 25.143  Cases.

    (a) Brewer's name. The brewer's name or trade name will be shown on 
each case or other shipping container of bottled beer. A brewer may use 
unmarked cases to hold:
    (1) Cartons of beer, if the visible portion of the cartons shows the 
required name; or

[[Page 630]]

    (2) Bottles or cans with plastic carriers, if the visible portion of 
the bottles or cans shows the required name.
    (b) Other information. The brewer may show on a case or shipping 
container the place of production (city and, when necessary for 
identification, State), and the addresses of other breweries owned by 
the same person, firm, or corporation (as defined in Sec. 25.181). If 
only one address is shown, it will be that of the producing brewery, or 
of the brewer's principal place of business.

(Approved by the Office of Management and Budget under control number 
1512-0474)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5412))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-225, 51 
FR 8492, Mar. 12, 1986]



Sec. 25.144  Rebranding barrels and kegs.

    (a) A brewer may not use a barrel or keg which bears the name of 
more than one brewer, and except as provided in Sec. 25.231, may not use 
a barrel or keg bearing the name of a brewer other than the producing 
brewer.
    (b) A brewer who purchases or otherwise obtains barrels or kegs from 
another brewer shall permanently remove or durably cover the original 
marks and brands after notifying the appropriate ATF officer of the 
proposed action. A brewer may use the barrels or kegs obtained without 
removing or covering the original marks and brands if the brewer:
    (1) Adopts a trade name substantially identical to the name 
appearing on the barrels or kegs; or
    (2) Succeeds to a brewer who has discontinued business, in which 
case the brewer may add marks or brands, in accordance with Sec. 25.141, 
which indicate ownership.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5412))



Sec. 25.145  Tanks, vehicles, and vessels.

    (a) Each brewer who transfers beer to another brewery of the same 
ownership (as defined in Sec. 25.181), or who exports beer without 
payment of tax, as provided in Sec. 25.203, shall plainly and durably 
mark each tank, tank car, tank truck, tank ship, barge, or deep tank of 
a vessel in accordance with paragraph (b) of this section. These marks 
may be placed on a label securely affixed to the route board of the 
container.
    (b) The brewer shall mark each container with--
    (1) The designation ``Beer'';
    (2) The brewer's name;
    (3) The address of the brewery from which removed;
    (4) The address of the brewery to which transferred or the marks 
required for exportation in Part 252 of this chapter, as applicable;
    (5) The date of shipment; and
    (6) The quantity, expressed in barrels.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended, 1389, as amended 
(26 U.S.C. 5053, 5414))



                         Subpart K--Tax on Beer

                            Liability for Tax



Sec. 25.151  Rate of tax.

    All beer, brewed or produced, and removed for consumption or sale, 
is subject to the tax prescribed by 26 U.S.C. 5051, for every barrel 
containing not more than 31 gallons, and at a like rate for any other 
quantity or for the fractional parts of a barrel as authorized in 
Sec. 25.156.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended (26 U.S.C. 5051, 
5052))



Sec. 25.152  Reduced rate of tax for certain brewers.

    (a) General. Section 5051(a)(2) of Title 26 U.S.C. provides for a 
reduced rate of tax on the first 60,000 barrels of beer removed for 
consumption or sale by a brewer during a calendar year. To be eligible 
to pay the reduced rate of tax, a brewer:
    (1) Shall brew or produce the beer at a qualified brewery in the 
United States;
    (2) May not produce more than 2,000,000 barrels of beer per calendar 
year; and
    (3) May not be a member of a ``controlled group'' of brewers whose 
members together produce more than 2,000,000 barrels of beer per 
calendar year.

The appropriate ATF officer shall deny use of the reduced rate of tax 
provided

[[Page 631]]

by 26 U.S.C. 5051(a)(2) where it is determined that the allowance of 
such a reduced rate would benefit a person who would otherwise fail to 
qualify for use of such rate.
    (b) Definitions. For the purpose of determining eligibility for 
payment of the reduced rate of tax on beer, terms have the following 
meanings:
    (1) Controlled group. A related group of brewers as defined in 26 
U.S.C. 5051(a)(2)(B). Controlled groups include, but are not limited to:
    (i) Parent-subsidiary controlled groups as defined in 26 CFR 1.1563-
1(a)(2);
    (ii) Brother-sister controlled groups as defined in 26 CFR 1.1563-
1(a)(3); and
    (iii) Combined groups as defined in 26 CFR 1.1563-1(a)(4). Stock 
ownership in a corporation need not be direct and 51% constructive 
ownership, defined in 26 CFR 1.1563-3, may be acquired through:
    (A) An option to purchase stock;
    (B) Attribution from partnerships;
    (C) Attribution from estate or trusts;
    (D) Attribution from corporations; or
    (E) Ownership by spouses, children, grandchildren, parents, and 
grandparents.
    (2) Production of beer. The production of beer as recorded in the 
brewer's daily records and reported in the Brewer's Report of 
Operations, Form 5130.9. For the purpose of determining compliance with 
the 2,000,000 barrel limitation, production of beer by a brewer or a 
controlled group of brewers includes both beer produced at qualified 
breweries within the United States and beer produced outside the United 
States.
    (c) Brewers operating more than one brewery. Brewers who operate 
more than one brewery shall include the combined production of beer at 
all their breweries when determining eligibility under the 2,000,000 
barrel limitation. The reduced rate of tax applies to the first 60,000 
barrels of beer removed for consumption or sale in a calendar year by 
the brewer; the brewer shall apportion the 60,000 barrels among the 
breweries in the manner described in the notice as provided by 
Sec. 25.167(b)(3).
    (d) Controlled groups of brewers. Members of a controlled group of 
brewers shall include the combined production of beer by all member 
brewers when determining eligibility under the 2,000,000 limitation. The 
reduced rate of tax applies to the first 60,000 barrels of beer removed 
for consumption or sale in a calendar year by the controlled group of 
brewers; the controlled group of brewers shall apportion the 60,000 
barrels among member brewers in the manner described in each brewer's 
notice as provided by Sec. 25.167(b)(3).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended (26 U.S.C. 5052))

[T.D. ATD-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-307, 55 
FR 52738, Dec. 21, 1990; T.D. ATF-345, 58 FR 40357, July 28, 1993]



Sec. 25.153  Persons liable for tax.

    The tax imposed by law on beer (including beer purchased or procured 
by one brewer from another) shall be paid by the brewer of the beer at 
the brewery where produced. The tax on beer transferred to a brewery 
from other breweries owned by the same brewer in accordance with subpart 
L of this part shall be paid by the brewer at the brewery from which the 
beer is removed for consumption or sale.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended, 1389, as amended 
(26 U.S.C. 5054, 5413, 5414))

                          Determination of Tax



Sec. 25.155  Types of containers.

    Beer may be removed from a brewery for consumption or sale only in 
barrels, kegs, bottles, and similar containers, as provided in this 
part. A container which the apapropriate ATF officer determines to be 
similar to a bottle or can will be treated as a bottle for purposes of 
this part. A container which the appropriate ATF officer determines to 
be similar to a barrel or keg and which conforms to one of the sizes 
prescribed for barrels or kegs in Sec. 25.156 will be treated as such 
for purposes of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended, 1390, as amended 
(26 U.S.C. 5412, 5416))



Sec. 25.156  Determination of tax on keg beer.

    (a) In determining the tax on beer removed in kegs, a barrel is 
regarded as

[[Page 632]]

a quantity of not more than 31 gallons. The authorized fractional parts 
of a barrel are whole barrels, halves, thirds, quarters, sixths, and 
eighths, and beer may be removed in kegs rated at those capacities. The 
following keg sizes are also authorized at the stated barrel 
equivalents:

------------------------------------------------------------------------
                                                                Barrel
                        Size of keg                           equivalent
------------------------------------------------------------------------
5 gallons..................................................      0.16129
30 liter...................................................      0.25565
50 liter...................................................      0.42608
------------------------------------------------------------------------

    (b) If any barrel or authorized size keg contains a quantity of beer 
more than 2 percent in excess of its rated capacity, tax will be 
determined and paid on the actual quantity of beer (without benefit of 
any tolerance) contained in the keg.
    (c) The quantities of keg beer removed subject to tax will be 
computed to 5 decimal places. The sum of the quantities computed for any 
one day will be rounded to 2 decimal places and the tax will be 
calculated and paid on the rounded sum.

(26 U.S.C. 5051)

[T.D. ATF-345, 58 FR 40357, July 28, 1993]



Sec. 25.157  Determination of tax on bottled beer.

    The quantities of bottled beer removed subject to tax shall be 
computed to 5 decimal places in accordance with the table and 
instructions in Sec. 25.158. The sum of the quantities computed for any 
one day will be rounded to 2 decimal places and the tax will be 
calculated and paid on the rounded sum.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended (26 U.S.C. 5051))



Sec. 25.158  Tax computation for bottled beer.

    Barrel equivalents for various case sizes are as follows:
    (a) For U.S. measure bottles.

------------------------------------------------------------------------
                                                   Number of
    Bottle size (net contents in fluid ounces)      bottles     Barrel
                                                    per case  equivalent
------------------------------------------------------------------------
6................................................         12     0.01815
6................................................         24     0.03629
7................................................         12     0.02117
7................................................         24     0.04234
7................................................         32     0.05645
7................................................         35     0.06174
7................................................         36     0.06351
7................................................         40     0.07056
7................................................         48     0.08468
8................................................         12     0.02419
8................................................         24     0.04839
8................................................         36     0.07258
8................................................         48     0.09677
10...............................................         12     0.03024
10...............................................         24     0.06048
10...............................................         48     0.12097
11...............................................         12     0.03327
11...............................................         24     0.06653
11.5.............................................         24     0.06956
12...............................................         12     0.03629
12...............................................         15     0.04536
12...............................................         20     0.06048
12...............................................         24     0.07258
12...............................................         30     0.09073
12...............................................         48     0.14516
12...............................................         50     0.15121
14...............................................         12     0.04234
14...............................................         24     0.08468
16 (1 pint)......................................         12     0.04839
16 (1 pint)......................................         24     0.09677
22...............................................         12     0.06653
22...............................................         24     0.13306
24...............................................         12     0.07258
24...............................................         24     0.14516
30...............................................         12     0.09073
32 (1 quart).....................................         12     0.09677
40...............................................         12     0.12097
64...............................................          1     0.01613
64...............................................          4     0.06452
64...............................................          6     0.09677
128 (1 gallon)...................................          1     0.03226
288..............................................          1     0.07258
------------------------------------------------------------------------

    (b) For metric measure bottles.

------------------------------------------------------------------------
                                                   Number of
        Bottle size (metric net contents)           bottles     Barrel
                                                    per case  equivalent
------------------------------------------------------------------------
500 milliliters..................................         24     0.10226
750 milliliters..................................         12     0.07670
1 liter..........................................         12     0.10226
2 liters.........................................          6     0.10226
5 liters.........................................          1     0.04261
------------------------------------------------------------------------

    (c) For other case sizes. If beer is to be removed in cases or 
bottles of sizes other than those listed in the above tables, the brewer 
shall notify the appropriate ATF officer in advance and request to be 
advised of the fractional barrel equivalent applicable to the proposed 
case size.

(26 U.S.C. 5412)

[T.D. ATF-345, 58 FR 40357, July 28, 1993]



Sec. 25.159  Time of tax determination and payment; offsets.

    (a) Time and payment. The tax on beer will be determined at the time 
of its removal for consumption or sale, and will be paid by return as 
provided in this part.

[[Page 633]]

    (b) Offsets. During any business day, the quantity of beer returned 
to the same brewery from which removed is to be taken as an offset 
against or deducted from the total quantity of beer removed for 
consumption or sale from that brewery on the day that the beer is 
returned.
    (c) Offsets not allowed. An offset or deduction for returned beer 
will not be allowed if:
    (1) The brewer was indemnified by insurance or otherwise in respect 
of the tax; or
    (2) The brewer does not issue credit to the customer for the tax on 
the returned beer within 30 days of the return of the beer. If the tax 
is not timely credited after the offset or deduction is taken, the 
brewer shall make an increasing adjustment on the next tax return.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended, 1335, as amended 
(26 U.S.C. 5054, 5056, 5061))



Sec. 25.160  Tax adjustment for brewers who produce more than 2,000,000 barrels of beer.

    Each brewer who has paid tax on beer by return, Form 5000.24, at the 
reduced rate of tax during a calendar year, but whose production (or the 
production of a controlled group of brewers of which the brewer is a 
member) exceeds 2,000.000 barrels of beer in that calendar year, is no 
longer eligible to pay tax on beer at the reduced rate of tax for any 
beer removed that calendar year for comsumption or sale. The brewer 
shall make a tax adjustment for the payment of additional tax no later 
than the return period in which production (or the production of a 
controlled group of brewers of which the brewer is a member) exceeds 
2,000,000 barrels of beer. The adjustment will be determined by 
multiplying the difference between the higher and lower rates of tax 
applicable to beer by the number of barrels removed by the brewer that 
year at the reduced rate of tax. The brewer shall make tax adjustments 
for all breweries where tax was paid at the lower rate that year, and 
shall include interest payable from the date on which tax was paid at 
the lower rate. In the case of a controlled group of brewers whose 
production exceeds 2,000,000 barrels of beer, all member brewers who 
paid tax at the lower rate shall make tax adjustments as determined in 
this section.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended (26 U.S.C. 5051))

                Preparation and Remittance of Tax Returns



Sec. 25.163  Method of tax payment.

    A brewer shall pay the tax on beer by return on Form 5000.24, as 
provided in Secs. 25.164, 25.164a, 25.173 and 25.175. The brewer shall 
pay the tax by remittance at the time the tax return is rendered, and 
the remittance will be by check or money order payable to the ``Bureau 
of Alcohol, Tobacco and Firearms'' and mailed with the return, or will 
be effected by an electronic fund transfer. In paying the tax, a 
fractional part of a cent will be disregarded unless it amounts to one-
half cent or more, in which case it will be increased to one cent.

[T.D. ATF-251, 52 FR 19314, May 22, 1987, as amended by T.D. ATF-365, 60 
FR 33669, June 28, 1995]



Sec. 25.164  Semimonthly return.

    (a) Requirement for filing. Each brewer shall pay the tax on beer 
(unless prepaid) by semimonthly return on Form 5000.24. The brewer shall 
file Form 5000.24 as a semimonthly return regardless of whether tax has 
been prepaid as provided in Sec. 25.175 during the return period. The 
brewer shall file a return on Form 5000.24 for each return period even 
though no beer was removed for consumption or sale.
    (b) Payment of tax. The brewer shall include for payment with the 
return the full amount of tax required to be determined (and which has 
not been prepaid) on all beer removed for consumption or sale during the 
period covered by the return.
    (c) Return periods. Except as provided in Sec. 25.164a, return 
periods run from the brewer's business day beginning on the first day of 
each month through the brewer's business day beginning on the 15th day 
of that month, and from the brewer's business day beginning on the 16th 
day of the month through the brewer's business day beginning on the last 
day of the month.

[[Page 634]]

    (d) Time for filing returns and paying tax. Except as provided in 
Sec. 25.164a the brewer shall file the semimonthly tax return, Form 
5000.24, for each return period, and make remittance as required by this 
section, not later than the 14th day after the last day of the return 
period. If the due date falls on a Saturday, Sunday, or legal holiday, 
the return and remittance shall be due on the immediately preceding day 
which is not a Saturday, Sunday, or legal holiday, except as provided by 
Sec. 25.164a(c).
    (e) Timely filing. (1) When the brewer sends the semimonthly tax 
return, Form 5000.24, by U.S. mail, in accordance with the instructions 
on the form, as required by this section, with remittance as provided 
for in this section, or without remittance as provided for in 
Sec. 25.165, the date of the official postmark of the United States 
Postal Service stamped on the cover in which the return and remittance 
were mailed is considered the date of delivery of the return and the 
date of delivery of the remittance, if enclosed with the return. When 
the postmark on the cover is illegible, the burden is on the brewer to 
prove when the postmark was made.
    (2) When the brewer sends the semimonthly return with or without 
remittance by registered mail or by certified mail, the date of registry 
or the date of the postmark on the sender's receipt of certified mail be 
treated as the date of delivery of the semimonthly return and of the 
remittance, if enclosed with the return.

(Approved by the Office of Management and Budget under control number 
1512-0467)

(Aug. 16, 1954, ch. 736, 68A Stat. 775, as amended (26 U.S.C. 6302); 
sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5061))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-246, 52 
FR 668, Jan. 8, 1987; T.D. ATF-251, 52 FR 19314, May 22, 1987, T.D. ATF-
365, 60 FR 33669, June 28, 1995]



Sec. 25.164a  Special rule for taxes due for the month of September (effective after December 31, 1994).

    (a)(1) Except as provided in paragraph (a)(2) of this section, the 
second semimonthly period for the month of September shall be divided 
into two payment periods, from the 16th day through the 26th day, and 
from the 27th day through the 30th day. The brewer shall file a return 
on Form 5000.24, and make remittance, for the period September 16-26, no 
later than September 29. The brewer shall file a return on Form 5000.24, 
and make remittance, for the period September 27-30, no later than 
October 14.
    (2) Taxpayment not by electronic fund transfer. In the case of taxes 
not required to be remitted by electronic fund transfer as prescribed by 
Sec. 25.165, the second semimonthly period of September shall be divided 
into two payment periods, from the 16th day through the 25th day, and 
the 26th day through the 30th day. The brewer shall file a return on 
Form 5000.24, and make remittance, for the period September 16-25, no 
later than September 28. The brewer shall file a return on Form 5000.24, 
and make remittance, for the period September 26-30, no later than 
October 14.
    (b) Amount of payment: Safe harbor rule. (1) Taxpayers are 
considered to have met the requirements of paragraph (a)(1) of this 
section, if the amount paid no later than September 29 is not less than 
\11/15\ (73.3 percent) of the tax liability incurred for the semimonthly 
period beginning on September 1 and ending on September 15, and if any 
underpayment of tax is paid by October 14.
    (2) Taxpayers are considered to have met the requirements of 
paragraph (a)(2) of this section, if the amount paid no later than 
September 28 is not less than \2/3\rds (66.7 percent) of the tax 
liability incurred for the semimonthly period beginning on September 1 
and ending on September 15, and if any underpayment of tax is paid by 
October 14.
    (c) Last day for payment. If the required due date for taxpayment 
for the periods September 16-25 or September 16-26 as applicable, falls 
on a Saturday or legal holiday, the return and remittance shall be due 
on the immediately preceding day. If the required due date falls on a 
Sunday, the return and remittance shall be due on the immediately 
following day.
    (d) Example. Payment of tax for the month of September--(1) Facts. 
X, a brewer required to pay taxes by electronic fund transfer, incurred 
tax liability in the amount of $30,000 for the

[[Page 635]]

first semimonthly period of September. For the period September 16-26, X 
incurred tax liability in the amount of $45,000, and for the period 
September 27-30, X incurred tax liability in the amount of $2,000.
    (2) Payment requirement. X's payment of tax in the amount of $30,000 
for the first semimonthly period of September is due no later than 
September 29 (Sec. 25.164(d)). X's payment of tax for the period 
September 16-26 is also due no later than September 29 
(Sec. 25.164a(a)(1)). X may use the safe harbor rule to determine the 
amount of payment due for the period of September 16-26 
(Sec. 25.164a(b)). Under the safe harbor rule, X's payment of tax must 
equal $21,990.00, \11/15\ths of the tax liability incurred during the 
first semimonthly period of September. Additionally, X's payment of tax 
in the amount of $2,000 for the period September 27-30 must be paid no 
later than October 14 (Sec. 25.164a(a)(1)). X must also pay the 
underpayment of tax, $23,010.00, for the period September 16-26, no 
later than October 14 (Sec. 25.164a(b)).

[T.D. ATF-365, 60 FR 33669, June 28, 1995]



Sec. 25.165  Payment of tax by electronic fund transfer.

    (a) Eligible brewers. (1) Each taxpayer who was liable, during a 
calendar year, for a gross amount equal to or exceeding five million 
dollars in beer taxes combining tax liabilities incurred under this part 
and parts 26 and 251 of this chapter, shall use a commerical bank in 
making payment by electronic fund transfer (EFT) of beer taxes during 
the succeeding calendar year. Payment of beer taxes by cash, check, or 
money order, as described in Sec. 25.163, is not authorized for a 
taxpayer who is required by this section to make remittances by EFT. For 
purposes of this section, the dollar amount of tax liability is defined 
as the gross tax liability on all taxable removals, determined in 
accordance with Sec. 25.159, and importations (including beer brought 
into the United States from Puerto Rico or the Virgin Islands) during 
the calendar year, without regard to any drawbacks, credits, or refunds, 
for all premises from which such activities are conducted by the 
taxpayer. Overpayments are not taken into account in summarizing the 
gross tax liability.
    (2) For the purposes of this section, a taxpayer includes a 
controlled group of corporations, as defined in 26 U.S.C. 1563, and 
implementing regulations in 26 CFR 1.1563-1 through 1.1563-4, except 
that the words ``at least 80 percent'' shall be replaced by the words 
``more than 50 percent'' in each place it appears in subsection (a) of 
26 U.S.C. 1563, as well as in the implementing regulations. Also, the 
rules for a ``controlled group of corporations'' apply in a similar 
fashion to groups which include partnerships and/or sole 
proprietorships. If one entity maintains more than 50% control over a 
group consisting of corporations and one, or more, partnerships and/or 
sole proprietorships, all of the members of the controlled group are one 
taxpayer for the purpose of determining who is required to make 
remittances by EFT.
    (3) A taxpayer who is required by this section to make remittances 
by EFT shall make a separate EFT remittance and file a separate return, 
Form 5000.24, for each brewery from which beer is removed upon 
determination of tax.
    (b) Requirements. (1) On or before January 10 of each calendar year, 
except for a taxpayer already remitting the tax by EFT, each taxpayer 
who was liable for a gross amount equal to or exceeding five million 
dollars in beer taxes combining tax liabilities incurred under this part 
and parts 26 and 251 of this chapter, during the previous calendar year, 
shall notify, in writing the appropriate ATF officer. The notice shall 
be an agreement to make remittances by EFT.
    (2) For each return filed in accordance with this part, the taxpayer 
shall direct the taxpayer's bank to make an electronic fund transfer in 
the amount of the taxpayment to the Treasury Account as provided in 
paragraph (e) of this section. The request shall be made to the bank 
early enough for the transfer to be made to the Treasury Account by no 
later than the close of business on the last day for filing the return, 
prescribed in Secs. 25.164 or 25.175. The request shall take into 
account any time limit established by the bank.

[[Page 636]]

    (3) If a taxpayer was liable for less than five million dollars in 
beer taxes during the preceding calendar year, combining tax liabilities 
incurred under this part and parts 26 and 251 of this chapter, the 
taxpayer may choose either to continue remitting the tax as provided in 
this section or to remit the tax with the return as prescribed by 
Sec. 25.164. Upon filing the first return on which the taxpayer chooses 
to discontinue remitting the tax by EFT and to begin remitting the tax 
with the tax return, the taxpayer shall notify the appropriate ATF 
officer by attaching a written notification to Form 5000.24, stating 
that no taxes are due by EFT because the tax liability during the 
preceding calendar year was less than five million dollars, and that the 
remittance will be filed with the tax return.
    (c) Remittance. (1) Each taxpayer shall show on the return, Form 
5000.24, information about remitting the tax for that return by EFT and 
shall file the return with ATF, in accordance with the instructions on 
Form 5000.24.
    (2) Remittances shall be considered as made when the taxpayment by 
electronic fund transfer is received by the Treasury Account. For 
purposes of this section, a taxpayment by electronic fund transfer shall 
be considered as received by the Treasury Account when it is paid to a 
Federal Reserve Bank.
    (3) When the taxpayer directs the bank to effect an electronic fund 
transfer message as required by paragraph (b)(2) of this section, any 
transfer data record furnished to the taxpayer, through normal banking 
procedures, will serve as the record of payment, and will be retained as 
part of required records.
    (d) Failure to make a taxpayment by EFT. The taxpayer is subject to 
a penalty imposed by 26 U.S.C. 5684, 6651, or 6656, as applicable, for 
failure to make a taxpayment by EFT on or before the close of business 
on the prescribed last day for filing.
    (e) Procedure. Upon the notification required under paragraph (b)(1) 
of this section, the appropriate ATF officer will issue to the taxpayer 
an ATF Procedure entitled ``Payment of Tax by Electronic Fund 
Transfer.'' This publication outlines the procedure a taxpayer is to 
follow when preparing returns and EFT remittances in accordance with 
this part. The U.S. Customs Service will provide the taxpayer with 
instructions for preparing EFT remittances for payments to be made to 
the U.S. Customs Service.

(Act of August 16, 1954, 68A Stat. 775, as amended (26 U.S.C. 6302); 
Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5061))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-245, 52 
FR 532, Jan. 7, 1987; T.D. ATF-251, 52 FR 19314, May 22, 1987; T.D. ATF-
262, 52 FR 47560, Dec. 15, 1987; T.D. ATF-437, 66 FR 5479, Jan. 19, 
2001; T.D. ATF-459, 66 FR 38550, July 25, 2001]



Sec. 25.166  Payment of reduced rate of tax.

    (a) By return, Form 5000.24. A brewer who is eligible to pay the 
reduced rate of tax on beer may, upon filing the notice required by 
Sec. 25.167, pay the reduced rate of tax on beer by semimonthly return 
as provided in Sec. 25.164 or by prepayment return as provided in 
Sec. 25.175. Payment of reduced rate of tax on beer by return, Form 
5000.24, may commence with any tax return filed during a calendar year 
and will continue until the brewer has taxpaid 60,000 barrels of beer at 
the lower rate of tax, or taxpaid the number of barrels of beer 
apportioned under Sec. 25.167(b)(3) for that calendar year.
    (b) By claim for refund of tax. A brewer, eligible to pay the 
reduced rate of tax on beer during a calendar year, but who has not paid 
the reduced rate of tax by return during that year, may file a claim, 
Form 2635, (5620.8) for refund of tax excessively paid on beer during 
that year. Claims for refund of tax will be filed as provided in 
Sec. 25.285.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended (26 U.S.C. 5051))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1987, as amended by T.D. ATF-251, 52 
FR 19313, May 22, 1987



Sec. 25.167  Notice of brewer to pay reduced rate of tax.

    (a) Requirement to file notice. Every brewer who desires to pay the 
reduced rate of tax on beer authorized by 26 U.S.C. 5051(a)(2) by tax 
return, Form 5000.24, shall prepare a notice containing the information 
required by

[[Page 637]]

paragraph (b) of this section. The brewer shall file this notice with 
the appropriate ATF officer for the first return period (or prepayment 
return) during which the brewer pays tax on beer at the reduced rate. 
The brewer shall file the notice each year in which payment of the 
reduced rate of tax on beer is made by return.
    (b) Information to be furnished. Each notice described in paragraph 
(a) of this section will contain the following information:
    (1) A statement that the brewer will not or is not likely to produce 
more than 2,000,000 barrels of beer in the calendar year for which the 
notice is filed.
    (2) A statement that the brewer is not a member of a controlled 
group of brewers, or if the brewer is a member of a controlled group of 
brewers, a statement that the controlled group will not or is not likely 
to produce more than 2,000,000 barrels of beer in the calendar year for 
which the notice is filed.
    (3) If the brewer operates more than one brewery, a statement of the 
locations of all the breweries and a statement of how the 60,000 barrel 
limitation for the reduced rate of tax will be apportioned among the 
breweries. If the brewer is a member of a controlled group of brewers, a 
statement of the names and locations of all other brewers in the group 
and a statement of how the 60,000 barrels limitation will be apportioned 
among the brewers in the group.
    (c) Perjury statement. Each notice described in this section will be 
executed by the brewer under penalties of perjury as defined in 
Sec. 25.11.

(Act of Aug. 16, 1954, 68A Stat. 749, as amended (26 U.S.C. 6065); sec. 
201, Pub. L. 85-859, 72 Stat. 1390, as amended, 1395, as amended (26 
U.S.C. 5415, 5555))



Sec. 25.168  Employer identification number.

    The employer identification number (defined at 26 CFR 301.7701-12) 
of the taxpayer who has been assigned the number will be shown on each 
return on Form 5000.24, filed under this part. Failure of the taxpayer 
to include the employer identification number on Form 5000.24 may result 
in imposition of the penalty specified in Sec. 70.113 of this chapter. A 
brewer shall apply for an employer identification number on IRS Form SS-
4 as provided in Secs. 25.122 and 25.123.

(Pub. L. 87-397, 75 Stat. 828, as amended (26 U.S.C. 6109, 6676))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-301, 55 
FR 47605, Nov. 14, 1990]

                            Prepayment of Tax



Sec. 25.173  Brewer in default.

    (a) When a remittance in payment of taxes on beer is not paid upon 
presentment of check or money order tendered, or when the brewer is 
otherwise in default in payment of tax under Sec. 25.164, beer may not 
be removed for consumption or sale or taken from the brewery for 
consumption or sale until the tax has been prepaid as provided in 
Sec. 25.175. The brewer shall continue to prepay while in default and 
thereafter until the appropriate ATF officer finds the revenue will not 
be jeopardized by deferred payment of tax as provided in Sec. 25.164.
    (b) Any remittance made while the brewer is required to prepay under 
this section will be in cash or in the form of a certified, cashier's or 
treasurer's check drawn on any bank or trust company incorporated under 
the laws of the United States, or under the law of any State, Territory, 
or possession of the United States, or in the form of a money order as 
provided in Sec. 70.61 of this chapter (payment by check or money 
order), or will be made in the form of an electronic fund transfer as 
provided by Secs. 25.164 and 25.165.

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1987, as amended by T.D. ATF-251, 52 
FR 19313, May 22, 1987; T.D. ATF-301, 55 FR 47605, Nov. 14, 1990]



Sec. 25.174  Bond not sufficient.

    When the penal sum of the brewer's bond is in less than the maximum 
amount, the brewer shall prepay the tax on any withdrawal which would 
cause the outstanding liability for tax to exceed the limits of coverage 
of the bond. Prepayments will be made in accordance with Sec. 25.175.

[[Page 638]]



Sec. 25.175  Prepayment of tax.

    (a) General. When a brewer is required to prepay tax under 
Sec. 25.173, or if the penal sum of the bond, Form 5130.22, is 
insufficient for deferral of payment of tax on beer to be removed for 
consumption or sale, or if a brewer is not entitled to defer the tax 
under the provisions of this subpart, the brewer shall prepay the tax 
before any beer is removed for consumption or sale, or taken out of the 
brewery for removal for consumption or sale.
    (b) Method of prepayment. (1) Prepayment will be made by forwarding 
a tax return, Form 5000.24, with remittance, covering the tax on beer.
    (2) If a brewer is required by Sec. 25.165 to make payment of tax by 
electronic fund transfer, the brewer shall prepay the tax before any 
beer can be removed for consumption or sale by completing the return and 
by forwarding it, in accordance with the instructions on the form. At 
the same time, the brewer shall direct his or her bank to make 
remittance by EFT.
    (3) For the purpose of complying with this section, the term 
forwarding means depositing in the U.S. mail, properly addressed in 
accordance with the instructions on the form.

(Act of Aug. 16, 1954, 68A Stat. 777, as amended (26 U.S.C. 6311); sec. 
201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5061))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1987, as amended by T.D. ATF-251, 52 
FR 19313, May 22, 1987]

                           Failure To Pay Tax



Sec. 25.177  Evasion of or failure to pay tax; failure to file a tax return.

    Sections 5671, 5673, 5684, 6651, and 6656 of Title 26 United States 
Code provide penalties for evasion or failure to pay tax on beer or for 
failure to file a tax return.

(Act of Aug. 16, 1954, 68A Stat. 821, as amended, 826, as amended (26 
U.S.C. 6651, 6656); sec. 201, Pub. L. 85-859, 72 Stat. 1408, 1410, as 
amended (26 U.S.C. 5671, 5673, 5684))

                                     



               Subpart L--Removals Without Payment of Tax

              Transfer to Another Brewery of Same Ownership



Sec. 25.181  Eligibility.

    A brewer may remove beer without payment of tax for transfer to any 
other brewery of the same ownership. These removals include a removal 
from a brewery owned by one corporation to a brewery owned by another 
corporation if (a) one corporation owns the controlling interest in the 
other corporation, or (b) the controlling interest in each corporation 
is owned by the same person. Beer removed under this section may, while 
in transit, be reconsigned to another brewery of the same ownership or 
be returned to the shipping brewery.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5414))



Sec. 25.182  Kinds of containers.

    A brewer may transfer beer without payment of tax from one brewery 
to another brewery belonging to the same brewer (a) in the brewer's 
packages or (b) in bulk containers, subject to limitations and 
conditions as may be imposed by the appropriate ATF officer. The brewer 
shall mark, brand or label containers as provided by subpart J of this 
part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5414))



Sec. 25.183  Determination of quantity transferred.

    The shipping brewer shall determine the quantity of beer shipped at 
the time of removal from the consignor brewery, and the receiving brewer 
shall determine the quantity of beer received at the time of receipt at 
the consignee brewery. The brewer shall equip the consignor and 
consignee breweries with suitable measuring devices to allow accurate 
determination

[[Page 639]]

of the quantities of beer to be shipped and received in bulk 
conveyances.

(Sec 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5414))



Sec. 25.184  Losses in transit.

    (a) Liability for losses. The brewer is liable under the bond of the 
brewery to which beer is transferred for the tax on beer lost in 
transit. If the brewer reconsigns beer while in transit or returns beer 
to the shipping brewery, the brewer is liable under the bond of the 
brewery to which the beer is reconsigned or returned for the tax on beer 
lost in transit.
    (b) Losses allowable without claim. If loss of beer being 
transferred does not exceed two percent of the quantity shipped, the 
brewer is not required to file a report of loss or a claim for allowance 
of the loss if there are no circumstances indicating that the beer, or 
any portion of the beer lost, was stolen or otherwise diverted to an 
unlawful purpose.
    (c) Losses requiring claim. If loss of beer during transit exceeds 
two percent of the quantity shipped, the brewer shall submit a claim 
under penalties of perjury for remission of the tax on the entire loss. 
The brewer shall prepare and submit the claim as provided in 
Sec. 25.286.
    (d) Losses requiring immediate report. The brewer shall report to 
the appropriate ATF officer a loss by fire, theft, casualty or any other 
unusual loss as soon as it becomes known.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended 1389 (26 U.S.C. 
5056, 5414))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-437, 66 
FR 5479, Jan. 19, 2001]



Sec. 25.185  Mingling.

    Beer transferred without payment of tax from one brewery to another 
brewery belonging to the same brewer may be mingled with beer of the 
receiving brewery. The brewer may handle the beer transferred in 
accordance with the requirements of this part relating to beer produced 
in the receiving brewery.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5414))



Sec. 25.186  Record of beer transferred.

    (a) Preparation of invoice. When beer is transferred between 
breweries without payment of tax, the shipping brewer shall prepare a 
serially numbered invoice or commercial record, in duplicate, covering 
the transfer. The invoice will be marked ``transfer without payment of 
tax'' and will contain the following information:
    (1) Name and address of shipping brewer;
    (2) Date of shipment;
    (3) Name and address of receiving brewer;
    (4) For cases, the number and size of cases and the total barrels;
    (5) For kegs, the number and size of kegs and the total barrels;
    (6) For shipments in bulk containers, the type of container, 
identity of the container and the total barrels.
    (b) Reconsignment of beer. When beer is reconsigned in transit to 
another brewery of the same ownership, the shipping brewer shall (1) 
prepare a new invoice showing reconsignment to another brewery and shall 
void all copies of the original invoice, or (2) shall mark all copies of 
the original invoice with the words ``Reconsigned to ------,'' followed 
by the name and address of the brewery to which the beer is reconsigned.
    (c) Disposition of invoice. On shipment of the beer, the shipping 
brewer shall send the original copy of the invoice to the receiving 
brewer, and shall retain the other copy for the brewery records. On 
receipt of the beer, the receiving brewer (including a brewer to whom 
beer was returned or reconsigned in transit) shall note on the invoice 
any discrepancies in the beer received, and retain the invoice in the 
brewery records.
    (d) Preparation of records and report. The shipping brewer shall use 
the invoice showing beer removed to another brewery without payment of 
tax in preparing daily records under Sec. 25.292 and in preparing the 
Brewer's Report of Operations, Form 5130.9. The receiving brewer 
(including a brewer to whom beer was returned or reconsigned in transit) 
shall use the invoice showing beer received from another brewery without 
payment of tax in preparing

[[Page 640]]

daily records under Sec. 25.292 and in preparing the Brewer's Report of 
Operations, Form 5130.9.

(Sec. 201. Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5414))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-345, 58 
FR 40357, July 28, 1993]

                 Removal of Beer Unfit for Beverage Use



Sec. 25.191  General.

    A brewer may remove sour or damaged beer, or beer which the brewer 
has deliberately rendered unfit for beverage use, from the brewery 
without payment of tax for use in manufacturing. Unfit beer may be 
removed under this section for use as distilling material at alcohol 
fuel plants qualified under subpart Y of part 19 of this chapter.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended (26 U.S.C. 5053))



Sec. 25.192  Removal of sour or damaged beer.

    (a) Containers. The brewer shall remove sour or damaged beer (1) in 
casks or other packages, containing not less than one barrel each and 
unlike those ordinarily used for packaging beer, or (2) in tanks, tank 
cars, tank trucks, tank ships, barges, or deep tanks of a vessel. The 
brewer shall mark the nature of the contents on each container.
    (b) Beer meter. The brewer shall remove sour or damaged beer without 
passing it through the meter (if any) or racking machine.
    (c) Records and reports. The brewer shall record the removal of sour 
or damaged beer in daily records under Sec. 25.292 and on the Brewer's 
Report of Operations, Form 5130.9.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended (26 U.S.C. 5033))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-345, 58 
FR 40357, July 28, 1993]

         Removals for Analysis, Research, Development or Testing



Sec. 25.195  Removals for analysis.

    A brewer may remove beer, without payment of tax, to a laboratory 
for analysis to determine the character or quality of the product. Beer 
may be removed for analysis in packages or in bulk containers. The 
brewer shall record beer removed for analysis in daily records under 
Sec. 25.292 and on the Brewer's Report of Operations, Form 5130.9.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended (26 U.S.C. 5053))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-345, 58 
FR 40357, July 28, 1993]



Sec. 25.196  Removals for research, development or testing.

    (a) A brewer may remove beer, without payment of tax, for use in 
research, development, or testing (other than consumer testing or other 
market analysis) of processes, systems, materials, or equipment relating 
to beer or brewery operations. Beer may be removed for research, 
development or testing in packages or in bulk containers.
    (b) The brewer shall mark each barrel, keg, case, or shipping 
container with the name and address of the brewer and of the consignee, 
the identity of the product, and the quantity of the product. If 
necessary to protect the revenue, the appropriate ATF officer may 
require a brewer to mark each container with the words ``Not for 
Consumption or Sale.'' If beer is removed in a bulk conveyance, the 
brewer shall place the marks on the route board of the conveyance.
    (c) The brewer shall record beer removed for research, development, 
or testing in daily records under Sec. 25.292 and on the Brewer's Report 
of Operations, Form 5130.9.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended (26 U.S.C. 5053))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-345, 58 
FR 40357, July 28, 1993]

         Removal of Beer to a Contiguous Distilled Spirits Plant



Sec. 25.201  Removal by pipeline.

    A brewer may remove beer from the brewery, without payment of tax, 
by pipeline to the bonded premises of a

[[Page 641]]

distilled spirits plant which is authorized to produce distilled spirits 
and which is located contiguous to the brewery.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1365, as amended, 1389, as amended 
(26 U.S.C. 5222, 5412))

                               Exportation



Sec. 25.203  Exportation without payment of tax.

    A brewer may remove beer without payment of tax (a) for exportation, 
(b) for use as supplies on vessels and aircraft, or (c) for transfer to 
and deposit in foreign-trade zones for exportation or for storage 
pending exportation, in accordance with Part 252 of this chapter. Beer 
may be removed from a brewery in bottles, kegs, or in bulk containers.

(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended (19 U.S.C. 
1309); sec. 3, Act of June 18, 1934, 48 Stat. 999, as amended (19 U.S.C. 
81c); sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended (26 U.S.C. 
5053))

                     Beer For Personal or Family Use



Sec. 25.205  Production.

    (a) Any adult may produce beer, without payment of tax, for personal 
or family use and not for sale. An adult is any individual who is 18 
years of age or older. If the locality in which the household is located 
requires a greater minimum age for the sale of beer to individuals, the 
adult shall be that age before commencing the production of beer. This 
exemption does not authorize the production of beer for use contrary to 
State or local law.
    (b) The production of beer per household, without payment of tax, 
for personal or family use may not exceed:
    (1) 200 gallons per calendar year if there are two or more adults 
residing in the household, or
    (2) 100 gallons per calendar year if there is only one adult 
residing in the household.
    (c) Partnerships except as provided in Sec. 25.207, corporations or 
associations may not produce beer, without payment of tax, for personal 
or family use.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended (26 U.S.C. 5053))



Sec. 25.206  Removal of beer.

    Beer made under Sec. 25.205 may be removed from the premises where 
made for personal or family use including use at organized affairs, 
exhibitions or competitions such as homemaker's contests, tastings or 
judging. Beer removed under this section may not be sold or offered for 
sale.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended (26 U.S.C. 5053))



Sec. 25.207  Removal from brewery for personal or family use.

    Any adult, as defined in Sec. 25.205, who operates a brewery under 
this part as an individual owner or in partnership with others, may 
remove beer from the brewery without payment of tax for personal or 
family use. The amount of beer removed for each household, without 
payment of tax, per calendar year may not exceed 100 gallons if there is 
one adult residing in the household or 200 gallons if there are two or 
more adults residing in the household. Beer removed in excess of the 
above limitations will be reported as a taxable removal.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended (26 U.S.C. 5053))



                   Subpart M--Beer Returned to Brewery



Sec. 25.211  Beer returned to brewery.

    (a) General. Beer, produced in the United States, on which the 
brewer has paid or determined the tax may be returned to any brewery of 
the brewer. Upon return of the beer to the brewery, the brewer shall 
determine the actual quantity of beer received, expressed in barrels. 
For cases or bottles, the label may be used to determine the quantity. 
When kegs or cases containing less than the original contents are 
received, the brewer shall determine the actual quantity of beer by 
weight or by other accurate means. The brewer shall determine the 
balling and alcohol content of returned keg beer unless the keg is 
equipped with tamper-proof fittings. The quantity of beer returned may 
be established by weighing individual packages and subtracting package 
weight, or by weighing accumulated beer and subtracting tare weight

[[Page 642]]

of dumpsters, pallets, packages and the like.
    (b) Disposition of returned beer. The brewer may dispose of beer 
returned under this subpart in any manner prescribed for beer which has 
never left the brewery. If returned beer is again removed for 
consumption or sale, tax will be determined and paid without respect to 
the tax which was determined or paid at the time of prior removal of the 
beer.
    (c) Records. For beer returned to the brewery under this subpart, 
the brewer's daily records under Sec. 25.292 will show:
    (1) Date;
    (2) Quantity of beer returned;
    (3) If the title to the beer has passed, the name and address of the 
person returning the beer; and
    (4) Name and address of the brewery from which the beer was removed, 
if different from the brewery to which returned.
    (d) Supporting records. The records of returned beer will be 
supported by invoices, credit memoranda or other commercial papers, and 
will differentiate beween beer returned to the brewery from which 
removed and beer returned to a brewery different from the one from which 
removed.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended, 1335, as amended, 
1390, as amended (26 U.S.C. 5054, 5056, 5415))



Sec. 25.212  Beer returned to brewery from which removed.

    If beer on which the tax has been determined or paid is returned to 
the brewery from which removed, the brewer shall take the quantity of 
beer as an offset or deduction against the quantity of beer removed for 
consumption or sale from the brewery on that business day, as provided 
in Sec. 25.159

(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended, 1390, as amended 
(26 U.S.C. 5056, 5415))



Sec. 25.213  Beer returned to brewery other than that from which removed.

    (a) Refund or adjustment of tax. If beer on which the tax has been 
determined or paid is returned to a brewery of the brewer other than the 
one from which removed, the brewer may make a claim for refund or relief 
of tax or may make an adjustment to the beer tax return, for the tax on 
the beer returned to the brewery. The brewer may not take an offset for 
beer returned to the brewery other than the one from which removed. 
Procedures for filing claims for refund or relief of tax or for making 
adjustments to the beer tax return are contained in Subpart T of this 
part.
    (b) Notice. A brewer need not file notice of intention to return 
beer to a brewery other than the one from which removed unless required 
by the appropriate ATF officer. When a notice is required, the brewer 
shall serially number each notice and execute it under penalties of 
perjury as defined in Sec. 25.11. The brewer must file it with the 
appropriate ATF officer. The notice will contain the following 
information:
    (1) The number and sizes of kegs and the actual quantity of beer, in 
barrels; or the number of cases and the number and sizes of bottles 
within the cases and the actual quantity of beer, in barrels;
    (2) The name and address of the brewery from which the beer was 
removed;
    (3) A statement that the tax on the beer has been fully paid or 
determined and the rate at which the tax on the beer was paid or 
determined; and
    (4) If the title to the beer has passed, the name and address of the 
person returning the beer.
    (c) Return of beer. If the brewer is required to file a notice of 
intention to return beer to the brewery, the brewer may bring the beer 
onto the brewery premises prior to filing the notice. The brewer shall 
segregate the returned beer from all other beer at the brewery and 
clearly identify it as returned beer. The returned beer will be retained 
intact for inspection by an appropriate ATF officer until the notice has 
been filed and disposition authorized.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5056))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-437, 66 
FR 5479, Jan. 19, 2001]

[[Page 643]]



                    Subpart N--Voluntary Destruction



Sec. 25.221  Voluntary destruction of beer.

    (a) On brewery premises. (1) A brewer may destroy, at the brewery, 
beer on which the tax has not been determined or paid.
    (2) A brewer operating a tavern on brewery premises under Sec. 25.25 
may destroy taxpaid or tax-determined been stored on brewery premises, 
in accordance with the requirements of Sec. 25.225.
    (b) Destruction without return to brewery. A brewer may destroy beer 
on which the tax has been paid or determined at a location other than 
any of the breweries operated by the brewer, upon compliance with this 
subpart.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5056))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986; 51 FR 9190, Mar. 18, 1986; T.D. 
ATF-268, 53 FR 8629, Mar 16, 1988, as amended by T.D. 372, 61 FR 20724, 
May 8, 1996]



Sec. 25.222  Notice of brewer.

    (a) Beer to be destroyed. When a brewer possesses beer which has 
been taxpaid or tax determined and which the brewer wishes to destroy at 
a location other than at any of the brewer's breweries, the brewer shall 
give written notice of intention to destroy the beer. The brewer must 
submit this notice to the appropriate ATF officer.
    (b) Execution of notice. The brewer shall serially number each 
notice and execute each notice under penalties of perjury as defined in 
Sec. 25.11. The brewer shall specify the date on which the beer is to be 
destroyed; this date may not be less than 12 days from the date the 
notice is mailed or delivered to the appropriate ATF officer.
    (c) Information to be furnished. The notice will contain the 
following information:
    (1) The number and sizes of kegs and the actual quantity of beer, in 
barrels; or the number of cases and the number and sizes of bottles 
within the cases, and the actual quantity of beer in barrels. When kegs 
containing less than the actual contents are to be destroyed, the brewer 
shall determine the actual content of beer by weight or by other 
accurate means.
    (2) The date on which the beer was received for destruction.
    (3) A statement that the tax on the beer has been fully paid or 
determined and the rate at which the tax on the beer was paid or 
determined.
    (4) If the title of the beer has passed, the name and address of the 
person returning the beer.
    (5) The location at which the brewer desires to destroy the beer and 
the reason for not returning the beer to the brewery.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5056))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-437, 66 
FR 5479, Jan. 19, 2001]



Sec. 25.223  Destruction of beer off brewery premises.

    (a) Destruction without supervision. A brewer may destroy beer 
without supervision if the appropriate ATF officer does not advise the 
brewer before the date specified in the notice that destruction of the 
beer is to be supervised.
    (b) Destruction with supervision. The appropriate ATF officer may 
require that an approriate ATF officer verify the information in the 
notice of destruction or witness the destruction of the beer. The 
appropriate ATF officer may also require a delay in the destruction of 
the beer or, if the place of destruction is not readily accessible to an 
appropriate ATF officer, may require that the beer be moved to a more 
convenient location. In this case, the brewer may not destroy the beer 
except under the conditions imposed by the appropriate ATF officer.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5056))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-437, 66 
FR 5479, Jan. 19, 2001]



Sec. 25.224  Refund or adjustment of tax.

    (a) Claim for refund or relief of tax. The tax paid by a brewer on 
beer produced in the United States and destroyed in accordance with this 
subpart may be refunded to the brewer. If the tax has not been paid, the 
brewer may be relieved of liability for the tax. Claims

[[Page 644]]

for refund or relief of tax will be filed as provided in subpart T of 
this part.
    (b) Adjustments to the excise tax return. A brewer may make an 
adjustment (without interest) to the excise tax return, Form 5000.24, 
covering the tax paid on beer produced in the United States and 
destroyed in accordance with this subpart. Procedures for making 
adjustments to tax returns are contained in subpart T of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5056))



Sec. 25.225   Destruction of taxpaid beer which was never removed from brewery premises.

    (a) General. A brewer operating a taven on brewery premises under 
Sec. 25.25 may destroy taxpaid or tax-determined beer which was never 
removed from brewery premises, in accordance with the recordkeeping 
requirements of paragraph (b) of this section, and with the benefit of 
the tax refund provisions of paragraph (c) of this section.
    (b) Recordkeeping. (1) When taxpaid or tax-determined beer which was 
never removed from brewery premises is destroyed, the brewer shall 
prepare a record of the quantity of beer destroyed, and the reason for, 
date of, and method of, destruction. The brewer may prepare this record 
on Form 2635 (5620.8) for submission as a claim under Sec. 25.283.
    (2) When required by the appropriate ATF officer, the brewer shall 
notify the appropriate ATF officer prior to the intended destruction, in 
accordance with procedures established by the appropriate ATF officer.
    (c) Refund of tax. After destruction is completed, the brewer may 
file a claim for refund or credit of tax, in accordance with 
Sec. 25.283(c).

[T.D. ATF-268, 53 FR 8629, Mar 16, 1988]



              Subpart O--Beer Purchased From Another Brewer



Sec. 25.231  Finished beer.

    (a) A brewer may obtain beer in barrels and kegs, finished and ready 
for sale from another brewer. The purchasing brewer may furnish the 
producing brewer barrels and kegs marked with the purchasing brewer's 
name and location. The producing brewer shall pay the tax as provided in 
subpart K of this part.
    (b) A brewer may not purchase taxpaid or tax determined beer from 
another brewer in bottles or cans which bear the name and address of the 
purchasing brewer.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5413))



Sec. 25.232  Basic permit.

    A brewer who engages in the business of purchasing beer for resale 
is required to possess a wholesaler's or importer's basis permit under 
the provisions of section 3(c) of the Federal Alcohol Administration Act 
and Part 1 of this chapter.



                       Subpart P--Cereal Beverage



Sec. 25.241  Production.

    Brewers may produce cereal beverage and remove it without payment of 
tax from the brewery. The method of production shall insure that the 
alcohol content of the cereal beverage will not increase while in the 
original container after removal from the brewery. The brewer shall keep 
cereal beverage separate from beer, and shall measure the quantity of 
cereal beverage transferred for packaging in accordance with Sec. 25.41.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5411))



Sec. 25.242  Markings.

    (a) Designation. When bottled or packaged, cereal beverage may be 
designated ``Cereal Beverage,'' ``Malt Beverage,'' ``Near Beer,'' or 
other distinctive name. If designated ``Near Beer,'' those words will be 
printed identically in the same size or style of type, in the same color 
of ink, and on the same background.
    (b) Barrels and kegs. A brewer may remove cereal beverage in barrels 
and kegs if the sides are durably painted at each end with a white 
stripe not less than 4 inches in width and the heads are painted in a 
solid color, with conspicuous lettering in a contrasting color reading 
``Nontaxable under section 5051 I.R.C.'' The brewer shall also legibly 
mark the brewer's name or

[[Page 645]]

trade name and the address on the container.
    (c) Bottles. Bottle labels shall show the name or trade name and 
address of the brewer, the distinctive name of the beverage, if any, and 
the legend ``Nontaxable under section 5051 I.R.C.'' Other information 
which is not inconsistent with the requirements of this section may be 
shown on bottle lablels.
    (d) Cases. The brewer shall mark cases or shipping containers to 
show the nature of the product and the name or trade name and address of 
the brewer.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5411))



         Subpart Q--Removal of Brewer's Yeast and Other Articles



Sec. 25.251  Authorized removals.

    (a) Brewer's yeast. A brewer may remove brewer's yeast, in liquid or 
solid form containing not less than 10 percent solids (as determined by 
the methods of analysis of the American Society of Brewing Chemists), 
from the brewery in barrels, tank trucks, in other suitable containers, 
or by pipeline.
    (b) Containers. Containers will bear a label giving the name and 
location of the brewery and including the words ``Brewer's Yeast.''
    (c) Pipeline. If brewer's yeast is removed by pipeline, the pipeline 
will be described in the Brewer's Notice, Form 5130.10. The premises 
where the brewer's yeast is received is subject to inspection by an 
appropriate ATF officer during ordinary business hours.
    (d) Other articles. A brewer may remove malt, malt syrup, wort, and 
other articles from the brewery.
    (e) Methods of Analysis of the American Society of Brewing Chemists, 
Seventh Edition (1976). In reference to paragraph (a) of this section, 
this incorporation by reference was approved by the Director of the 
Federal Register on March 23, 1981, and is available for inspection at 
the Office of the Federal Register, 800 North Capitol Street, NW., suite 
700, Washington, DC. This publication is available from the American 
Society of Brewing Chemists, 40 Pilot Knob Road, St. Paul, Minnesota 
55121.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended (26 U.S.C. 5411))



Sec. 25.252  Records.

    (a) Production. The brewer shall keep records of the production of 
malt syrup, wort, and other articles which are removed from the brewery. 
The record shall include the quantities and kinds of materials used, and 
in the case of wort and concentrated wort, the balling.
    (b) Removals. The brewer shall keep records of removals of brewer's 
yeast, malt and other articles from the brewery. The record shall 
include the quantity and date of removal of each lot, and the name and 
address of the consignee. These records may consist of invoices or 
shipping documents.
    (c) Inspection. All records under this section shall be available 
for inspection at the brewery by an appropriate ATF officer during 
normal business hours.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended (26 U.S.C. 5415))



                       Subpart R--Beer Concentrate



Sec. 25.261  General.

    (a) Authorized processes. A brewer may, in accordance with this 
subpart--
    (1) Produce concentrate from beer,
    (2) Reconstitute beer from concentrate,
    (3) Transfer concentrate from one brewery to another brewery of the 
same ownership, and
    (4) Remove concentrate without payment of tax for exportation, or 
for transfer to and deposit in a foreign-trade zone for exportation or 
for storage pending exportation in accordance with Part 252 of this 
chapter.
    (b) Brewery treatment of concentrate. Beer reconstituted from 
concentrate in accordance with this subpart shall (except with respect 
to the additional labeling of reconstituted beer under Sec. 25.263) be 
treated the same as beer which has not been concentrated and 
reconstituted.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended (26 U.S.C. 5401))

[[Page 646]]



Sec. 25.262  Restrictions and conditions on processes of concentration and reconstitution.

    (a) Conditions on concentration. A brewer may not employ any process 
of concentration which separates alcohol spirits from any fermented 
substance.
    (b) Conditions on reconstitution--(1) The process of reconstitution 
of beer will consist of the addition to the concentrate of carbon 
dioxide and water only.
    (2) A brewer may not employ any process of concentration or 
reconstitution unless the beer upon reconstitution will, without the 
addition of any substance other than carbon dioxide and water, possess 
the taste, aroma, color, and other characteristics of beer which has not 
been concentrated.
    (3) The process of reconstitution shall provide for the addition of 
sufficient water to restore the concentrate to a volume not less than, 
and an alcohol content not greater than, that of the beer used to 
produce the concentrate.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1315, as amended, 1388, as amended 
(26 U.S.C. 5002, 5401))



Sec. 25.263  Production of concentrate and reconstitution of beer.

    (a) Operations at brewery. A brewer may concentrate beer or 
reconstitute beer only at a brewery.
    (b) Marking of containers. Containers of concentrate transferred to 
other breweries of the same ownership, and containers of concentrate 
removed for export shall be marked, branded and labeled in the same 
manner as prescribed for containers of beer in subpart J of this part. 
All containers shall be identified as containers of beer concentrate.
    (c) Mingling with beer. A brewer may not mingle concentrate with 
unconcentrated beer. A brewer may mingle reconstituted beer with other 
beer at the brewery.
    (d) Additional labeling. Barrels, kegs, and bottles containing beer 
produced from concentrate will show by label or otherwise the statement 
``PRODUCED FROM . . . CONCENTRATE,'' the blank to be filled in with the 
appropriate class designation of the beer (beer, lager, ale, stout, 
etc.) from which the concentrate was made. The statement will be 
conspicuous and readily legible and, in the case of bottled beer, will 
appear in direct conjunction with, and as a part of, the class 
designation. All parts of the class designation will appear in lettering 
of substantially the same size and kind.
    (e) Records and reports. Brewers producing concentrate and brewers 
reconstituting beer from concentrate shall keep the records and reports 
required by subpart U of this part.



Sec. 25.264  Transfer between breweries.

    (a) Authorized transfers. A brewer may remove from the brewery, 
without payment of tax, concentrate produced from beer for transfer to 
any other brewery of the same ownership (within the limits of ownership 
described in Sec. 25.181).
    (b) Record of concentrate transferred. When transferring concentrate 
between breweries, the shipping brewer shall prepare for each conveyance 
a serially numbered invoice or commercial record covering the transfer. 
The invoice will be clearly marked to indicate that concentrate produced 
from beer is being transferred. The invoice will contain the following 
information:
    (1) Name and address of shipping brewer;
    (2) Date of shipment;
    (3) Name and address of receiving brewer;
    (4) The number of containers transferred, the balling, percentage of 
alcohol by volume, and the total barrels of concentrate; and
    (5) A description of the beer from which the concentrate was 
produced including the number of barrels, balling, and percentage of 
alcohol by volume.
    (c) Disposition of invoice. On shipment of the concentrate, the 
shipping brewer shall send the original copy of the invoice to the 
receiving brewer and shall retain a copy for the brewery records. On 
receipt of the concentrate, the receiving brewer shall note on the 
invoice any discrepancies in the concentrate received and retain the 
invoice in the brewery records.

[[Page 647]]



                     Subpart S--Pilot Brewing Plants



Sec. 25.271  General.

    (a) Establishment. A person may establish and operate a pilot 
brewing plant off the brewery premises for research, analytical, 
experimental, or developmental purposes relating to beer or brewery 
operations. Pilot brewing plants will be established as provided in this 
subpart.
    (b) Authorized removals. Beer may be removed from a pilot brewing 
plant only for analysis or organoleptic examination.
    (c) Transfers between brewery and pilot brewing plant. Subject to 
subpart L of this part, beer may be transferred to a pilot brewing plant 
from a brewery of the same ownership, and beer may be transferred 
without payment of tax from a pilot brewing plant to a brewery of the 
same ownership.
    (d) Other regulations applicable. The provisions of subparts A, B, 
F, I, K, and of Secs. 25.63, 25.64, and 25.21 are applicable to pilot 
brewing plants established under this subpart. Also, the provisions of 
Secs. 25.72-25.75, 25.77, 25.92 and 25.94-25.105 relating to bonds, and 
consents of surety, and of Secs. 25.131-25.134 are applicable to bonds 
and consents of surety given, and to changes in the proprietorship, 
location, and premises of pilot brewing plants established under this 
subpart.

(Sec. 4, Pub. L. 91-673, 84 Stat. 2057, as amended (26 U.S.C. 5417))



Sec. 25.272  Application.

    (a) Form of application. Any person desiring to establish a pilot 
brewing plant under the subpart shall file an application with the 
appropriate ATF officer. The application will be in writing and will 
include the following:
    (1) Name and address of the applicant;
    (2) Description of the premises and equipment to be used in the 
operations;
    (3) Nature, purpose, and extent of the operations; and
    (4) A statement that the applicant agrees to comply with all 
provisions of this part applicable to the operations to be conducted.
    (b) Additional information. The appropriate ATF officer may at any 
time before or after approval of an application, require the submission 
of additional information necessary for administration of this part or 
for protection of the revenue.
    (c) Authorization of operations. The appropriate ATF officer may 
authorize the operation of a pilot brewing plant if it is determined 
that the plant will be operated solely for one or more of the purposes 
specified in Sec. 25.271, and that operations will not jeopardize the 
revenue.
    (d) Withdrawal of authorization. The appropriate ATF officer may 
withdraw authorization to operate a pilot brewing plant if in his or her 
judgment, the revenue would be jeopardized by the operations of the 
plant.
    (e) Commencement of operations. A person may not begin operation of 
a pilot brewing plant until the appropriate ATF officer has approved the 
application required by this section.

(Sec. 4, Pub. L. 91-673, 84 Stat. 2057, as amended (26 U.S.C. 5417))



Sec. 25.273  Action on application.

    If the appropriate ATF officer approves the application for a pilot 
brewing plant, he or she will note approval on the application and 
forward a copy to the applicant. The applicant must file the copy of the 
approved application at the premises, available for inspection by an 
appropriate ATF officer.

[T.D. ATF-437, 66 FR 5480, Jan. 19, 2001]



Sec. 25.274  Bond.

    (a) Requirement. Any person requesting authorization to establish a 
pilot brewing plant under this subpart shall execute and file a brewer's 
bond, Form 5130.22. A person may not begin operation of a pilot brewing 
plant until receiving notice from the appropriate ATF officer of the 
approval of the bond. Operations may continue only as long as an 
approved bond is in effect.
    (b) Penal sum. The penal sum of a bond covering the premises of a 
pilot brewing plant will be an amount equal to the potential tax 
liability of the maximum quantity of beer on hand, in transit to the 
plant, and unaccounted for at any one time, computed by multiplying the 
quantity of beer in barrels by the rate of tax in 26 U.S.C. 5051. The

[[Page 648]]

penal sum of the bond (or total penal sum if original and strengthening 
bonds are filed) may not exceed $50,000 or be less than $500.
    (c) Conditions of bonds. The bond will be conditioned that the 
operator of the pilot brewing plant shall pay, or cause to be paid, to 
the United States according to the laws of the United States and the 
provisions of this part, the taxes, including penalties and interest for 
which the operator shall become liable, on all beer brewed, produced, or 
received on the premises.

(Sec. 4, Pub. L. 91-673, 84 Stat. 2057, as amended (26 U.S.C. 5417))



Sec. 25.275  Special tax.

    The special tax imposed on a brewer by 26 U.S.C. 5091 shall be paid 
in accordance with subpart I of this part.



Sec. 25.276  Operations and records.

    (a) Commencement of operations. A person may commence operation of a 
pilot brewing plant upon receipt of the approved application and bond.
    (b) Reports. The operator of a pilot brewing plant is not required 
to file the Brewer's Report of Operations, Form 5130.9.
    (c) Records. The operator of a pilot brewing plant must maintain 
records which, in the opinion of the appropriate ATF officer, are 
appropriate to the type of operation being conducted. These records will 
include information sufficient to account for the receipt, production, 
and disposition of all beer received or produced on the premises, and 
the receipt (and disposition, if removed) of all brewing materials. 
These records will be available for inspection by an appropriate ATF 
officer.

(Sec. 4, Pub. L. 91-673, 84 Stat. 2057, as amended (26 U.S.C. 5417))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-345, 58 
FR 40357, July 28, 1993; T.D. ATF-437, 66 FR 5480, Jan. 19, 2001]



Sec. 25.277  Discontinuance of operations.

    When operations of a pilot brewing plant are to be discontinued, the 
operator shall notify the appropriate ATF officer stating the purpose of 
the notice and giving the date of discontinuance. When operations have 
been completed and all beer at the premises has been disposed of and 
accounted for, the appropriate ATF officer will note approval on the 
notice and return a copy to the operator.



     Subpart T--Refund or Adjustment of Tax or Relief From Liability



Sec. 25.281  General.

    (a) Reasons for refund or adjustment of tax or relief from 
liability. The tax paid by a brewer on beer produced in the United 
States may be refunded, or adjusted on the tax return (without interest) 
or, if the tax has not been paid, the brewer may be relieved of 
liability for the tax on:
    (1) Beer returned to any brewery of the brewer subject to the 
conditions outlined in subpart M of this part;
    (2) Beer voluntarily destroyed by the brewer subject to the 
conditions outlined in subpart N of this part;
    (3) Beer lost by fire, theft, casualty, or act of God subject to the 
conditions outlined in Sec. 25.282.
    (b) Refund of beer tax excessively paid. A brewer may be refunded 
the tax excessively paid on beer subject to the conditions outlined in 
Sec. 25.285.
    (c) Rate of tax. Brewers who have filed the notice required by 
Sec. 25.167 and who have paid the tax on beer at the reduced rate of tax 
shall make claims for refund or relief of tax, or adjustments on the tax 
return, based upon the lower rate of tax. However, a brewer may make 
adjustments or claims for refund or relief of tax based on the higher 
rate of tax if the brewer can establish to the satisfaction of the 
appropriate ATF officer that the tax was paid or determined at the 
higher rate of tax.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5056))



Sec. 25.282  Beer lost by fire, theft, casualty, or act of God.

    (a) General. The tax paid by any brewer on beer produced in the 
United States may be adjusted (without interest) on the excise tax 
return, may be refunded or credited (without interest) or, if the tax 
has not been paid, the brewer may be relieved of liability for the tax 
if, before transfer of title to the beer to any other person, the beer 
is

[[Page 649]]

lost, whether by theft or otherwise, or is destroyed or otherwise 
rendered unmerchantable by fire, casualty, or act of God. The tax 
liability on excessive losses of beer from transfer between breweries of 
the same ownership may be remitted as provided in Sec. 25.286.
    (b) Unmerchantable beer. When beer is rendered unmerchantable by 
fire, casualty, or act of God, refund, credit or adjustment of tax, or 
relief from liability of tax will not be allowed unless the brewer 
proves to the satisfaction of the appropriate ATF officer that the beer 
cannot be salvaged and returned to the market for consumption or sale.
    (c) Beer lost or destroyed. When beer is lost or destroyed, whether 
by theft or otherwise, the appropriate ATF officer may require the 
brewer to file a claim for relief from the tax and to submit proof as to 
the cause of the loss.
    (d) Beer lost by theft. When it appears that beer was lost by theft, 
the tax shall be collected unless the brewer proves to the satisfaction 
of the appropriate ATF officer that the theft occurred before removal 
from the brewery and occurred without connivance, collusion, fraud, or 
negligence on the part of the brewer, consignor, consignee, bailee, or 
carrier, or the employees or agents of any of them.
    (e) Notification of appropriate ATF officer. (1) A brewer who 
sustains a loss of beer before transfer of title of the beer to another 
person and who desires to adjust the tax on the excise tax return or to 
file a claim for refund or for relief from liability of tax, must, on 
learning of the loss of beer, immediately notify in writing the 
appropriate ATF officer of the nature, cause, and extent of the loss, 
and the place where the loss occurred. Statements of witnesses or other 
supporting documents must be furnished if available.
    (2) A brewer possessing unmerchantable beer and who desires to 
adjust the tax on the excise tax return or to file a claim for refund or 
for relief from liability must notify in writing the appropriate ATF 
officer, of the circumstances by which the beer became unmerchantable, 
and must state why the beer cannot be salvaged and returned to the 
market for consumption or sale.
    (f) Additional information. The appropriate ATF officer may require 
the brewer to submit additional evidence necessary to verify the tax 
adjustment or for use in connection with a claim.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5056))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-437, 66 
FR 5480, Jan. 19, 2001]



Sec. 25.283  Claims for refund of tax.

    (a) Beer returned to brewery or voluntarily destroyed at a location 
other than a brewery. Claims for refund of tax on beer returned to a 
brewery under the provisions of Sec. 25.213 or voluntarily destroyed at 
a location other than a brewery shall include:
    (1) The name and address of the brewer filing the claim, the address 
of the brewery from which the beer was removed, and the address of the 
brewery to which the beer was returned, as applicable;
    (2) The quantity of beer covered by the claim and the rate(s) of tax 
at which the beer was tax paid or determined;
    (3) The amount of tax for which the claim is filed;
    (4) The reason for return or voluntary destruction of the beer and 
the related facts;
    (5) Whether the brewer is indemnified by insurance or otherwise in 
respect of the tax, and if so, the nature of the indemnification;
    (6) The claimant's reasons for believing the claim should be 
allowed;
    (7) The date the beer was returned to the brewery, if applicable;
    (8) The name of the person from whom the beer was received;
    (9) A statement that the tax has been fully paid or determined; and
    (10) A reference to the notice (if required) filed under 
Secs. 25.213 or 25.222.
    (b) Beer lost, destroyed, or rendered unmerchantable. Claims for 
refund of tax on beer lost, whether by theft or otherwise, or destroyed 
or otherwise rendered unmerchantable by fire, casualty, or act of God 
shall contain:
    (1) Information required by paragraphs (a)(1), (2), (3), (5), and 
(6) of this section;
    (2) A statement of the circumstances surrounding the loss;

[[Page 650]]

    (3) When applicable, the reason the beer rendered unmerchantable 
cannot be returned to the market for consumption or sale;
    (4) Date of the loss, and if lost in transit, the name of the 
carrier;
    (5) A reference incorporating the notice required by Sec. 25.282; 
and
    (6) When possible, affidavits of persons having knowledge of the 
loss, unless the affidavits are contained in the notice given under 
Sec. 25.282.
    (c) Voluntary destruction of taxpaid beer which was never removed 
from brewery premises. Claims for refund or credit of tax on beer 
voluntarily destroyed under the provisions of Sec. 25.225, shall 
include:
    (1) Information required by paragraphs (a)(1), (a)(2), (a)(3), 
(a)(5), and (a)(9) of this section; and
    (2) The information contained in the record required by 
Sec. 25.225(b).
    (d) Additional evidence. The appropriate ATF officer may require the 
submission of additional evidence in support of any claim filed under 
this section.
    (e) Filing of claim. Claim for refund of tax shall be filed on Form 
2635 (5620.8). Claims shall be filed within 6 months after the date of 
the return, loss, destruction, or rendering unmerchantable. Claims will 
not be allowed if filed after the prescribed time or if the claimant was 
indemnified by insurance or otherwise in respect of the tax.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5056))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1987, as amended by T.D. ATF-251, 52 
FR 19314, May 22, 1987; T.D. ATF-268, 53 FR 8629, Mar 16, 1988; T.D. 
ATF-437, 66 FR 5480, Jan. 19, 2001]



Sec. 25.284  Adjustment of tax.

    (a) Adjustment of tax in lieu of refund. In lieu of filing a claim 
for refund of tax as provided in Sec. 25.283, a brewer may make an 
adjustment (without interest) to the excise tax return, Form 5000.24, 
for the amount of tax paid on beer returned to the brewery, voluntarily 
destroyed, lost, destroyed, or rendered unmerchantable.
    (b) Beer returned to brewery other than from which removed. An 
adjustment may be made on the excise tax return for the amount of tax 
paid on beer returned to the brewery under Sec. 25.213. The adjustment 
will be made on the tax return filed for the brewery to which the beer 
was returned. The adjustment may not be made prior to the return of beer 
to the brewery. If the brewer is required to file a notice under 
Sec. 25.213, the adjustment may not be made until the appropriate ATF 
officer authorizes disposition of the beer.
    (c) Beer voluntarily destroyed. An adjustment may be made on the 
excise tax return for the amount of tax paid on beer voluntarily 
destroyed under subpart N of this part. The adjustment will be made on 
the tax return filed for the brewery from which the beer was removed. 
The adjustment may not be made prior to the destruction of the beer.
    (d) Beer lost, destroyed or rendered unmerchantable. An adjustment 
may be made on the excise tax return for the amount of tax paid on beer 
lost, destroyed, or rendered unmerchantable under Sec. 25.282. The 
adjustment will be made on the tax return filed for the brewery from 
which the beer was removed. A brewer may not make an adjustment prior to 
notification required under Sec. 25.282(e). When beer appears to have 
been lost due to theft, the brewer may not make an adjustment to the tax 
return until establishing to the satisfaction of the appropriate ATF 
officer that the theft occurred before removal from the brewery and 
occurred without connivance, collusion, fraud, or negligence on the part 
of the brewer, consignor, consignee, bailee, or carrier, or the 
employees or agents of any of them.
    (e) Condition of adjustments. (1) All adjustments will be made 
within 6 months of the return, destruction, loss, or rendering 
unmerchantable of the beer.
    (2) Adjustment of the tax paid will be made without interest.
    (3) An adjustment may not be taken if the brewer was indemnified by 
insurance or otherwise in respect of the tax.
    (f) Records. When brewers make adjustments on the excise tax return 
in lieu of filing a claim, they shall keep the following records;
    (1) For beer returned to the brewery or voluntarily destroyed, the 
records

[[Page 651]]

required by Secs. 25.283(a)(1), (2), (4), (5), (7), (8), and (10).
    (2) For beer lost, destroyed, or rendered unmerchantable, the 
records required by Sec. 25.283 (a)(1), (2), (5), (b) (2), (3), (4), 
(5), and (6).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5056))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-437, 66 
FR 5480, Jan. 19, 2001; T.D. ATF-437a, 66 FR 17809, Apr. 4, 2001]



Sec. 25.285  Refund of beer tax excessively paid.

    (a) Eligibility. A brewer who, under the provisions of Sec. 25.152, 
is eligible to pay the reduced rate of tax on beer prescribed by 26 
U.S.C. 5051 (a)(2), but who did not pay tax at the reduced rate by 
return, Form 5000.24, during the calendar year for which the brewer was 
eligible, may file a claim for refund of tax excessively paid on beer 
for that year. The brewer shall file the claim for refund to tax on Form 
2635 (5620.8) within the period of limitation prescribed in 26 U.S.C. 
6511(a). For rules relating to the period of limitation on filing 
claims, see Secs. 70.82 and 70.83.
    (b) Calculation of refund. The brewer shall file the claim based on 
the quantity of beer eligible to be taxpaid at the lower rate of tax, 
but which was paid at the higher rate of tax, subject to a maximum of 
60,000 barrels of beer per calendar year or the limitation as determined 
in Sec. 25.152(d). The brewer shall exclude from the claim the quantity 
of beer removed that calendar year on which a credit or refund at the 
higher rate of tax has been taken.
    (c) Information to be furnished. Each claim for refund of tax filed 
under this section shall include the following information:
    (1) Name and address of the brewer.
    (2) Quantity of beer covered by the claim as determined in paragraph 
(b) of this section.
    (3) Amount of tax paid in excess.
    (4) A statement of the exact number of barrels of beer which the 
brewer produced during the calendar year.
    (5) A statement that the brewer is not a member of a controlled 
group of brewers (as defined in Sec. 25.152(b)(1) or, if the brewer is a 
member of a controlled group of brewers, a list of the names and 
addresses of all the members of the controlled group of brewers and a 
statement of the combined number of barrels of beer produced by all 
members of the controlled group in the calendar year.
    (6) If the brewer is a member of a controlled group of brewers, a 
statement of how the 60,000 barrel limitation for the reduced rate of 
tax is to be apportioned among the members of the controlled group of 
brewers.

(Act of August 16, 1954, 68A Stat. 791, as amended (26 U.S.C. 6402); 
sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended (26 U.S.C. 5051))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1987, as amended by T.D. ATF-251, 52 
FR 19314, May 22, 1987; T.D. ATF-437, 66 FR 5480, Jan. 19, 2001]



Sec. 25.286  Claims for remission of tax on beer lost in transit between breweries.

    (a) Filing of claim. Claims for remission of tax on beer lost in 
transit between breweries of the same ownership shall be prepared on 
Form 2635 (ATF F 5620.8) by the brewer or the brewer's authorized agent 
and submitted with the Form 5130.9 of the receiving brewery for the 
reporting period in which the shipment is received. When the loss is by 
casualty, the claim will be submitted with the Form 5130.9 for the 
reporting period in which the loss is discovered. When, for valid 
reason, the required claim cannot be submitted with Form 5130.9, the 
brewer shall attach a statement to Form 5130.9 stating the reason why 
the claim cannot be filed at the time and stating when it will be filed. 
A claim will not be allowed unless filed within 6 months of the date of 
the loss.
    (b) Information to be shown. The claim will show the following 
information:
    (1) The date of the shipment;
    (2) The quantity of beer lost (number and size of packages and their 
equivalent in barrels), and the rate(s) of tax at which the beer would 
have been removed for consumption or sale;
    (3) The percent of loss;
    (4) The specific cause of the loss;
    (5) The nature of the loss (leakage, breakage, casualty, etc.);
    (6) Information as to whether the claimant has been indemnified by 
insurance or otherwise in respect to the

[[Page 652]]

tax, or has any claim for indemnification; and
    (7) For losses due to casualty or accident, statements from the 
carrier or other persons having personal knowledge of the loss, if 
available.

(27 U.S.C. 5056, 5414)

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986; 51 FR 9190, Mar. 18, 1986; T.D. 
ATF-345, 58 FR 40357, July 28, 1993]



                     Subpart U--Records and Reports



Sec. 25.291  Records.

    (a) General. (1) The records to be maintained by brewers include:
    (i) All individual transaction forms, records, and summaries 
specifically required by this part;
    (ii) All supplemental, auxiliary, and source data used in the 
compilation of required forms, records, and summaries, and for 
preparation of reports, returns, and claims; and
    (iii) Copies of notices, reports, returns, and approved applications 
and other documents relating to operations and transactions.
    (2) The records required by this part may consist of the brewer's 
commercial documents, rather than records prepared expressly to meet the 
requirements of this part, if those documents contain all the details 
required by this part, are consistent with the general requirements of 
clarity and accuracy, and do not result in difficulty in their 
examination.
    (b) Entries. (1) Each entry required by this part to be made in 
daily records will be made not later than the close of the business day 
next succeeding the day on which the transaction occurs.
    (2) When the brewer prepares transaction or business records 
concurrenty with the individual operation or transaction and these 
records contain all the required information with respect to the 
operation or transaction, entries in daily records may be made not later 
than the close of business the third business day succeeding the day on 
which the operation or transaction occurs.
    (c) Content. (1) All entries in the daily records required by this 
subpart will show the date of the operation or transaction.
    (2) Daily records will accurately and clearly reflect the details of 
each operation or transaction and, as applicable, contain all data 
necessary to enable--
    (i) Brewers to prepare summaries, reports, and returns required by 
this part, and
    (ii) Appropriate ATF officers to verify removals of beer and cereal 
beverages, to verify claims, and to ascertain if there has been 
compliance with law and regulations.
    (d) Format. (1) The brewer's copies of prescribed forms which bear 
all required details will be utilized as daily records.
    (2) When a form is not prescribed, the records required by this 
subpart will be those commercial records used by the brewer in the 
accounting system and will bear all required details.
    (3) The brewer shall maintain daily records required by this part so 
they clearly and accurately reflect all mandatory information. When the 
format or arrangement of the daily records is such that the information 
is not clearly or accurately shown, the appropriate ATF officer may 
require a format or arrangement which will clearly and accurately show 
the information.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended (26 U.S.C. 5415))



Sec. 25.292  Daily records of operations.

    (a) Daily records. A brewer shall maintain daily records of 
operations which show by quantity the following:
    (1) Each kind of material received and used in the production of 
beer and cereal beverage (including the balling and the quantity of each 
type of material used in the production of wort or concentrated wort).
    (2) Beer and cereal beverage produced (including water added after 
production is determined).
    (3) Beer and cereal beverage transferred for and returned from 
bottling.
    (4) Beer and cereal beverage transferred for and returned from 
racking.
    (5) Beer and cereal beverage bottled.
    (6) Beer and cereal beverage racked.
    (7) Cereal beverage removed from the brewery.
    (8) Beer removed for consumption or sale. For each removal, the 
record will show the date of removal, the person to whom the beer was 
shipped or delivered

[[Page 653]]

(not required for sales in quantities of one-half barrel or less for 
delivery at the brewery), and the quantities of beer removed in kegs and 
in bottels.
    (9) Beer removed without payment of tax. For each removal, the 
record will show the date of removal, the person to whom the beer was 
shipped or delivered, and the quantities of beer removed in kegs, 
bottles, tanks, tank cars, tank trucks, tank ships, barges or deep tanks 
of vessels.
    (10) Packaged beer used for laboratory samples at the brewery.
    (11) Beer consumed at the brewery.
    (12) Beer returned to the brewery from which removed.
    (13) Beer returned to the brewery after removal from another brewery 
owned by the brewer.
    (14) Beer reconditioned, used as material, or destroyed.
    (15) Beer received from other breweries or received from pilot 
brewing plants.
    (16) Beer and cereal beverage lost due to breakage, theft, casualty, 
or other unusual cause.
    (17) Brewing materials sold or transferred to pilot brewing plants 
(including the name and address of the person to whom shipped or 
delivered) and brewing materials used in the manufacture of wort, wort 
concentrate, malt syrup, and malt extract for sale or removal.
    (18) Record of tests of measuring devices.
    (19) Beer purchased from other brewers in the purchasing brewer's 
barrels and kegs and such beer sold to other brewers.
    (b) Daily summary records. A brewer shall maintain daily summaries 
of the following transactions:
    (1) Beer and cereal beverage bottled;
    (2) Beer and cereal beverage racked;
    (3) Beer removed for consumption or sale;
    (4) Beer returned to the brewery from which removed;
    (5) Beer returned to the brewery after removal from another brewery 
owned by the brewer; and
    (6) Brewing materials, beer and cereal beverage in process, and 
finished beer and cereal beverage on hand.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended, 1395, as amended 
(26 U.S.C. 5415, 5555))

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986; 51 FR 9190, Mar. 18, 1986]



Sec. 25.293  Record of ballings and alcohol content.

    The brewer shall maintain a record of the ballings of the wort 
produced, and of the ballings and the alcohol content of beer and cereal 
beverage transferred for bottling and racking, between breweries in bulk 
conveyances, and to pilot brewing plants. Records showing ballings and 
alcohol content need not be consolidated and averaged daily unless the 
brewer so desires.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended (26 U.S.C. 5415))



Sec. 25.294  Inventories.

    (a) The brewer shall take a physical inventory of beer and cereal 
beverage at least once each calender month. The brewer may take this 
inventory within 7 days of the close of the calendar month for which 
made.
    (b) The brewer shall make a record of inventories of beer or cereal 
beverage which will show the following:
    (1) Date taken;
    (2) Quantity of beer and cereal beverage on hand;
    (3) Losses, gains, and shortages; and
    (4) Signature, under penalties of perjury of the brewer or person 
taking this inventory.
    (c) The brewer shall retain inventory records and make them 
available for inspection by an appropriate ATF officer.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended (26 U.S.C. 5415))



Sec. 25.295  Record of unsalable beer.

    A brewer having unsalable beer in packages or tanks in the brewery 
may destroy, recondition, or use the beer as material. The brewer shall 
report the quantity of the beer destroyed, reconditioned, or used as 
materials, in daily records and on Form 5130.9. If the

[[Page 654]]

unsalable beer consists of rejects from the packaging operations, the 
beer may be destroyed without being included in the packaging production 
records, and, when so destroyed, will be so reported in the brewer's 
daily records and on Form 5130.9. When reject bottled beer is to be 
consumed at the brewery or sold to brewery employees, or is cased or 
otherwise accumulated pending other disposition, the quantity will be 
included in the packaging production and be so reported in the brewer's 
daily records and on Form 5130.9.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1389 as amended, 1390, as amended, 
1395 as amended (26 U.S.C. 5411, 5415, 5555))



Sec. 25.296  Record of beer concentrate.

    (a) Daily records. A brewer who produces concentrate or 
reconstitutes beer shall maintain daily records which accurately reflect 
the balling, quantity, and alcohol content of--
    (1) Beer entered into the concentration process;
    (2) Concentrate produced;
    (3) Concentrate transferred to other breweries;
    (4) Concentrate exported;
    (5) Concentrate received;
    (6) Concentrate used in reconstituting beer; and
    (7) Beer reconstituted.
    (b) Summary report of operations. A brewer who produces concentrate 
or reconstitutes beer shall report by specific entries on Form 5130.9, 
the quantity of beer entered into the concentration process, and the 
quantity of beer reconstituted from concentrate. In addition, the brewer 
shall prepare on Form 5130.9, a summary accounting of all concentrate 
operations at the brewery for the reporting period. This summary 
accounting will show, in barrels of 31 gallons with fractions rounded to 
2 decimal places:
    (1) Concentrate on hand beginning of the reporting period;
    (2) Concentrate on hand end of the reporting period;
    (3) Concentrate produced;
    (4) Concentrate received; and
    (5) Specific disposition of concentrate such as ``used in 
reconstitution,'' ``removed for export,'' ``removed to foreign-trade 
zone,'' or ``transferred to other breweries.''

(26 U.S.C. 5415)

[T.D. ATF-224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. ATF-345, 58 
FR 40358, July 28, 1993]



Sec. 25.297  Brewer's Report of Operations, Form 5130.9.

    (a) Monthly report of operations. Except as provided in paragraph 
(b) of this section, each brewer shall prepare and submit a monthly 
report of brewery operations on Form 5130.9.
    (b) Quarterly report of operations. (1) For calendar quarters 
commencing on or after October 1, 1993, a brewer who produces less than 
10,000 barrels of beer per calendar year may file the report of brewery 
operations quarterly. The report will be filed on Form 5130.9. For the 
purpose of establishing whether a quarterly report may be filed, the 
brewer will determine annual production of beer by adding up the 
quantities of beer produced, water/liquids added in cellars, and beer 
received from other breweries and from pilot brewing plants for all 
months of the previous calendar year.
    (2) To begin the quarterly filing of a Brewer's Report of 
Operations, a brewer will state such intent in the ``Remarks'' section 
when filing the last monthly Form 5130.9 before the calendar quarter 
during which the brewer will commence quarterly filings. A brewer 
beginning business may file Form 5130.9 quarterly if the brewer states 
in the ``Remarks'' section of its initial monthly Form 5130.9 that the 
annual production of beer is not likely to exceed 10,000 barrels.
    (3) If a brewer determines that the 10,000 barrel quantity for a 
calendar year will be exceeded in any month, the brewer shall file a 
Form 5130.9 for that month and for all subsequent months of the calendar 
year.
    (4) The appropriate ATF officer may at any time require a brewer who 
is filing a Brewer's Report of Operations quarterly to file such report 
monthly if there is a jeopardy to the revenue.

[[Page 655]]

    (c) Retention. The brewer shall retain a copy of the Form 5130.9 as 
part of the brewery records.

(26 U.S.C. 5415, 5555)

[T.D. ATF-345, 58 FR 40358, July 28, 1993, as amended by T.D. ATF-437, 
66 FR 5480, Jan. 19, 2001]



Sec. 25.298  Excise tax return, Form 5000.24.

    All entries on the excise tax return, Form 5000.24, will be fully 
supported by accurate and complete records. The brewer shall file a copy 
of Form 5000.24 as a part of the records at the brewery.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended, 1390, as amended, 
1395, as amended (26 U.S.C. 5061, 5415, 5555))



Sec. 25.299  Execution under penalties of perjury.

    When a return, form, or other document is required by this part or 
in the instruction on or with the return, form, or other document to be 
executed under the penalties of perjury, as defined in Sec. 25.11, it 
will be so executed and will be signed by the brewer or other duly 
authorized person.

(Act of August 16, 1954, 68A Stat. 749, as amended (26 U.S.C. 6065))



Sec. 25.300  Retention and preservation of records.

    (a) Place of maintenance. Records required by this part will be 
prepared and kept by the brewer at the brewery where the operation or 
transaction occurs and will be available for inspection by any 
appropriate ATF officer during business hours.
    (b) Reproduction of original records. Whenever any record, because 
of its condition, becomes unsuitable for its intended or continued use, 
the brewer shall reproduce the record by a process under Sec. 25.301. 
The reproduced record will be treated and considered for all purposes as 
though it were the original record, and all provisions of law applicable 
to the original are applicable to the reproduction.
    (c) Retention of records. Records required by this part will be 
preserved for a period of not less than three years from the date 
thereof or the date of the last entry required to be made thereon, 
whichever is later. The appropriate ATF officer may require records to 
be kept for an additional period not exceeding three years in any case 
where such retention is deemed necessary or advisable for the protection 
of the revenue.
    (d) Data Processing. (1) Notwithstanding any other provision of this 
section, record data maintained on data processing equipment may be kept 
at a location other than the brewery if the original transaction 
(source) records required by Secs. 25.292-25.298 are kept available for 
inspection at the brewery.
    (2) Data which has been accumulated on cards, tapes, discs, or other 
accepted record media will be retrievable within five business days.
    (3) The applicable data processing program will be made available 
for examination if requested by an appropriate ATF officer.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended (26 U.S.C. 5415))



Sec. 25.301  Photographic copies of records.

    (a) General. Brewers may record, copy, or reproduce records required 
by this part. Brewers may use any process which accurately reproduces 
the original record and which forms a durable medium for reproducing and 
preserving the original record.
    (b) Copies of records treated as original records. Whenever records 
are reproduced under this section, the reproduced records will be 
preserved in conveniently accessible files, and provisions will be made 
for examining, viewing and using the reproduced record the same as if it 
were the original record, and it will be treated and considered for all 
purposes as through it were the original record. All provisions of law 
and regulations applicable to the original are applicable to the 
reproduced record. As used in this section, ``original record'' means 
the record required by this part to be maintained or preserved by the 
brewer, even though it may be an executed duplicate or other copy of the 
document.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended, 1395, as amended 
(26 U.S.C. 5415, 5555))

[[Page 656]]



PART 26--LIQUORS AND ARTICLES FROM PUERTO RICO AND THE VIRGIN ISLANDS--Table of Contents




                     Subpart A--Scope of Regulations

Sec.
26.1  Alcoholic products coming into the United States from Puerto Rico 
          and the Virgin Islands.
26.2  Forms prescribed.
26.3  Delegations of the Director.

                         Subpart B--Definitions

26.11  Meaning of terms.

Subpart C [Reserved]

 Subpart Ca--Rum Imported Into the United States From Areas Other Than 
                   Puerto Rico and the Virgin Islands

26.30  Excise taxes.
26.31  Formula.

   Subpart Cb--Products Coming into the United States From Puerto Rico

26.35  Taxable status.
26.36  Products exempt from tax.
26.36a-26.36b  [Reserved]
26.36c  Shipments of bulk distilled spirits to the United States without 
          payment of tax.
26.37  United States Bureau of Alcohol, Tobacco and Firearms officers.
26.38  Containers of distilled spirits.
26.39  Labels.
26.40  Marking containers of distilled spirits.
26.41  Destruction of marks and brands.
26.43  Samples.

                      Special (Occupational) Taxes

26.44  Liquor dealer's special taxes.
26.45  Warehouse receipts covering distilled spirits.
26.46  Distilled spirits plant proprietor's special (occupational) tax.
26.47  Specially denatured spirits user's and dealer's special 
          (occupational) taxes.

            Subpart D--Formulas for Products From Puerto Rico

26.50  Formulas for liquors.
26.50a  Verfication of eligible flavors.
26.51  Formulas for articles, eligible articles, and products 
          manufactured with denatured spirits.
26.52  Still wines containing carbon dioxide.
26.53  Changes of formulas.
26.54  Filing and disposition of formulas.
26.55  Previously approved formulas.

      Subpart E--Taxpayment of Liquors and Articles in Puerto Rico

                                  Bonds

26.61  General.
26.62  Corporate surety.
26.62a  Filing of powers of attorney.
26.62b  Execution of powers of attorney.
26.63  Deposit of securities in lieu of corporate surety.
26.64  Consents of surety.
26.65  Authority to approve bonds and consents of surety.
26.66  Bond, ATF Form 5110.50--Distilled spirits.
26.67  Bond, Form 2897--Wine.
26.68  Bond, Form 2898--Beer.
26.68a  Bond account.
26.69  Strengthening bonds.
26.70  New or superseding bonds.
26.70a  Notice of approval of bonds.

                          Termination of Bonds

26.71  Termination of bonds.
26.72  Application of surety for relief from bond.
26.73  Relief of surety from bond.
26.74  Release of pledged securities.
26.75  Form 1490, Notice of Termination of Bond.

                            Permits Required

26.76  Insular permits.

                            Distilled Spirits

26.77  Subject to tax.
26.78  Application and permit, ATF Form 5110.51.
26.79  Inspection or gauge and computation of tax.
26.79a  Computation of effective tax rate.
26.80  Deferred payment of tax--release of spirits.
26.81  Prepayment of tax and release of spirits.
26.82  Permit to ship.

                      Packages of Distilled Spirits

26.86  Authority for shipment.
26.87  Evidence of taxpayment.

                                  Wine

26.92  Subject to tax.
26.93  Application and permit, Form 2900.
26.94  Computation of tax.
26.95  Deferred payment of tax--release of wine.
26.96  Prepayment of tax--release of wine.
26.96a  [Reserved]
26.96b  Permit to ship.
26.97  Marking containers of wine.

                                  Beer

26.101  Subject to tax.
26.102  Application and permit, Form 2900.

[[Page 657]]

26.103  Computation of tax.
26.104  Deferred payment of tax--release of beer.
26.105  Prepayment of tax--release of beer.
26.105a  Permit to ship.
26.106  Marking containers of beer.

                                Articles

26.107  Taxable status.
26.108  Application for permit, ATF Form 5110.51 and/or Form 2900.
26.109  Taxpayment.
26.110  Release of articles or liquors.

                        Payment of Tax by Return

26.111  General.
26.112  Returns for semimonthly periods.
26.112a  Payment of tax by electronic fund transfer.
26.113  Returns for prepayment of taxes.

                   Permit To Ship Liquors and Articles

26.114  Permit to ship required.
26.115  Application, Form 487B.
26.116  Issuance of permit, Form 487B, and customs inspection.

                      Procedure at Port of Arrival

26.117  Action by carrier.
26.118  Inspection by district director of customs at port of arrival.
26.119  Disposition of forms by district director of customs.

  Subpart F--Liquors and Articles Purchased by Tourists in Puerto Rico

26.125  Taxable.
26.126  Taxpayment in Puerto Rico.
26.128  Taxpayment at port of arrival.

       Subpart G--Closures for Distilled Spirits From Puerto Rico

26.135  Containers of distilled spirits to bear closures.
26.136  Affixing closures.

       Subpart H--Records and Reports of Liquors From Puerto Rico

26.163  General requirements.
26.164  Proprietors of taxpaid premises.
26.164a  Package gauge record.
26.165  Certificate of effective tax rate computation.

  Subpart I--Claims for Drawback on Eligible Articles From Puerto Rico

26.170  Drawback of tax.
26.171  Special tax.
26.172  Bonds.
26.173  Claims for drawback.
26.174  Records.

    Subpart Ia--Shipment of Denatured Spirits and Products Made With 
         Denatured Spirits to the United States From Puerto Rico

26.191  Notice of shipment.
26.192  Samples and analysis.
26.193  Notification of tax liability.
26.194  Detention of articles.

Subpart Ib--Shipment of Bulk Distilled Spirits From Puerto Rico, Without 
 Payment of Tax, for Transfer From Customs Custody to Internal Revenue 
                                  Bond

26.196  General.
26.197  Furnishing formula to consignee.
26.198  [Reserved]
26.199  Application and permit to ship, ATF Form 5110.31.
26.199a  Action by revenue agent.
26.199b  Issuance and disposition of permit.
26.199c  Action by carrier.
26.199d  Customs inspection and release.
26.199e  [Reserved]
26.199f  Consignee premises.

   Subpart J--Products Coming Into the United States From the Virgin 
                                 Islands

26.200  Taxable status.
26.201  Products exempt from tax.
26.201a  Production in the Virgin Islands for tax-free shipment to the 
          United States.
26.201b  [Reserved]
26.201c  Shipments of bulk distilled spirits to the United States 
          without payment of tax.
26.202  Requirements of the Federal Alcohol Administration Act.
26.203  Containers of 1 gallon (3.785 liters) or less.
26.203a  Containers in excess of 1 gallon (3.785 liters).
26.204  Regauge.
26.204a  Verification of eligible wines and eligible flavors.
26.205  Certificate.
26.206  Marking packages and cases.
26.207  Destruction of marks and brands.
26.209  Samples.

                      Special (Occupational) Taxes

26.210  Liquor dealer's special taxes.
26.211  Warehouse receipts covering distilled spirits.

        Subpart K--Formulas for Products From the Virgin Islands

26.220  Formulas for liquors.
26.221  Formulas for articles, eligible articles, and products 
          manufactured with denatured spirits.
26.222  Still wines containing carbon dioxide.
26.223  Changes of formulas.
26.224  Filing and disposition of formulas.
26.225  Previously approved formulas.

[[Page 658]]

    Subpart L--Closures for Distilled Spirits From the Virgin Islands

                                 General

26.230  Containers of distilled spirits to bear closures.
26.231  Affixing closures.

      Subpart M--Procedure at Port of Entry From the Virgin Islands

26.260  Certificate.
26.261  Action by district director of customs.
26.262  Determination of tax on distilled spirits.
26.262a  Computation of effective tax rate.
26.263  Determination of tax on beer.
26.264  Determination of tax on wine.
26.265  Determination of tax on articles.
26.266  Tax payment.
26.267  Payment of tax by electronic fund transfer.

    Subpart N--Records and Reports of Liquors From the Virgin Islands

       Record and Report of Liquors Brought Into the United States

26.272  General requirements.
26.273  Proprietors of taxpaid premises.
26.273a  Transfer record.
26.273b  Package gauge record.

               Filing and Retention of Records and Reports

26.275  Filing.
26.276  Retention.
26.277  [Reserved]

   Subpart O--Tax-Free Shipments to the United States From the Virgin 
                                 Islands

26.291  General.

     Shipment of Industrial Spirits and Specially Denatured Spirits

26.292  Copy of consignee's permit under part 20 or 22.
26.293  Marks on containers.
26.294  Record of shipment.

    Shipment of Completely Denatured Alcohol and Products Made With 
                            Denatured Spirits

26.295  Marks on containers.
26.296  Record of shipment.

                      Arrival in the United States

26.297  General.

Subpart Oa--Shipment of Bulk Distilled Spirits From the Virgin Islands, 
 Without Payment of Tax, for Transfer From Customs Custody to Internal 
                              Revenue Bond

26.300  General.
26.301  Preparation of transfer record.
26.302  Gauge and certification.
26.303  Customs inspection and release.
26.304  Bulk conveyances to be sealed.
26.305  Receipt by consignee.

  Subpart Ob--Claims for Drawback on Eligible Articles From the Virgin 
                                 Islands

26.306  Drawback of tax.
26.307  Special tax.
26.308  Bonds.
26.309  Claims for drawback.
26.310  Records.

               Subpart P--Requirements for Liquor Bottles

26.311  Scope of subpart.
26.312  Standards of fill.
26.314  Distinctive liquor bottles.
26.315  [Reserved]
26.316  Bottles not constituting approved containers.
26.317  Bottles to be used for display purposes.
26.318  Liquor bottles denied entry.
26.319  Used liquor bottles.

                   Subpart Q--Miscellaneous Provisions

26.331  Alternate methods or procedures.

    Authority: 19 U.S.C. 81c; 26 U.S.C. 5001, 5007, 5008, 5010, 5041, 
5051, 5061, 5081, 5111, 5112, 5114, 5121, 5122, 5124, 5131-5134, 5141, 
5146, 5207, 5232, 5271, 5276, 5301, 5314, 5555, 6001, 6301, 6302, 6804, 
7101, 7102, 7651, 7652, 7805; 27 U.S.C. 203, 205; 31 U.S.C. 9301, 9303, 
9304, 9306.

    Source: 20 FR 6077, Aug. 20, 1955, unless otherwise noted. 
Redesignated at 40 FR 16835, Apr. 15, 1975, and further redesignated by 
T.D. ATF-459, 66 FR 38550, July 25, 2001.

    Editorial Note: Nomenclature changes to part 26 appear at 66 FR 
21668, 21669, May 1, 2001.



                     Subpart A--Scope of Regulations



Sec. 26.1  Alcoholic products coming into the United States from Puerto Rico and the Virgin Islands.

    This part, ``Liquors and Articles from Puerto Rico and the Virgin 
Islands,'' relates to:
    (a) The production, bonded warehousing, and withdrawal of distilled 
spirits and denatured spirits, and the manufacture of articles in Puerto 
Rico and the Virgin Islands to be

[[Page 659]]

brought into the United States free of tax;
    (b) The collection of internal revenue taxes on taxable alcoholic 
products coming into the United States from Puerto Rico and the Virgin 
Islands;
    (c) The transfer, without payment of tax, of Puerto Rican and Virgin 
Islands spirits in bulk containers or by pipeline from customs custody 
to the bonded premises of a distilled spirits plant qualified under part 
19 of this chapter;
    (d) The deposit of the distilled spirits excise taxes, limited to 
the lesser of $10.50 or the rate in section 5001(a)(1) per proof gallon, 
into the Treasuries of Puerto Rico and the Virgin Islands on all 
articles containing distilled spirits as defined in section 7652, 
produced by those two U.S. possessions, and transported into the United 
States (less certain amounts); and
    (e) The deposit of the distilled spirits excise taxes, limited to 
the lesser of $10.50 or the rate in section 5001(a)(1) per proof gallon, 
into the Treasuries of Puerto Rico and the Virgin Islands on all rum 
imported into the United States (including rum from possessions other 
than Puerto Rico and the Virgin Islands), less certain amounts.

(Approved by the Office of Management and Budget under control number 
1512-0277)

(Sec. 221, Pub. L. 98-67, 97 Stat. 369 (26 U.S.C. 7652)

[T.D. ATF-175, 49 FR 20803, May 16, 1984, as amended by T.D. ATF-203, 50 
FR 15887, Apr. 23, 1985. Redesignated by T.D. ATF-459, 66 FR 38550, July 
25, 2001]



Sec. 26.2  Forms prescribed.

    (a) The appropriate ATF officer is authorized to prescribe all forms 
required by this part, including applications, reports, returns, and 
records. All of the information called for in each form shall be 
furnished as indicated by the headings on the form and the instructions 
on or pertaining to the form. In addition, information called for in 
each form shall be furnished as required by this part. The form will be 
filed in accordance with the instructions for the form.
    (b) Forms may be requested from the ATF Distribution Center, P.O. 
Box 5950, Springfield, Virginia 22150-5950, or by accessing the ATF web 
site (http://www.atf.treas.gov/).

(5 U.S.C. 552(a) (80 Stat. 383, as amended))

[T.D. ATF-92, 46 FR 46920, Sept. 23, 1981, as amended by T.D. ATF-249, 
52 FR 5963, Feb. 27, 1987; T.D. ATF-372, 41 FR 20725, May 8, 1996; T.D. 
ATF-451, 66 FR 21668, May 1, 2001. Redesignated by T.D. ATF-459, 66 FR 
38550, July 25, 2001]



Sec. 26.3  Delegations of the Director.

    All of the regulatory authorities of the Director contained in this 
part 26 are delegated to appropriate ATF officers. These ATF officers 
are specified in ATF Order 1130.29, Delegation Order--Delegation of the 
Director's Authorities in 27 CFR part 26, Liquors and Articles from 
Puerto Rico and the Virgin Islands. ATF delegation orders, such as ATF 
Order 1130.29, are available to any interested person by mailing a 
request to the ATF Distribution Center, P.O. Box 5950, Springfield, 
Virginia 22150-5950, or by accessing the ATF web site (http://
www.atf.treas.gov/).

[T.D. ATF-451, 66 FR 21668, May 1, 2001. Redesignated and amended by 
T.D. ATF-459, 66 FR 38550, July 25, 2001]



                         Subpart B--Definitions



Sec. 26.11  Meaning of terms.

    When used in this part and in forms prescribed under this part, 
where not otherwise distinctly expressed or manifestly incompatible with 
the intent thereof, terms shall have the meaning ascribed in this 
section. Words in the plural form shall include the singular and vice 
versa, and words importing the masculine gender shall include the 
feminine. The terms ``includes'' and ``including'' do not exclude things 
not enumerated which are in the same general class.
    Appropriate ATF Officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this part by ATF Order 
1130.29, Delegation Order--Delegation of the Director's Authorities in 
27 CFR Part 26, Liquors and Articles from Puerto Rico and the Virgin 
Islands.

[[Page 660]]

    Article. Any preparation unfit for beverage use, made with or 
containing:
    (1) Wine or beer;
    (2) Distilled spirits or industrial spirits; or
    (3) Denatured spirits when such preparation is not manufactured 
under the provisions of this chapter.
    Bank. Any commercial bank.
    Banking day. Any day during which a bank is open to the public for 
carrying on substantially all its banking functions.
    Beer. Beer, ale, porter, stout, and other similar fermented 
beverages (including sake or similar products) of any name or 
description containing one-half of 1 percent or more of alcohol by 
volume, brewed, or produced from malt, wholly or in part, or from any 
substitute therefor.
    Bottler. Any person required to hold a basic permit as a bottler 
under 27 U.S.C. 203(b)(1).
    Bulk container. Any container having a capacity of more than 1 
gallon.
    Bulk distilled spirits. The term ``bulk distilled spirits'' means 
distilled spirits in a container having a capacity in excess of 1 
gallon.
    Bureau of Alcoholic Beverage Taxes. Bureau of Alcoholic Beverage 
Taxes of the Commonwealth of Puerto Rico.
    Business day. Any day, other than a Saturday, Sunday, or a legal 
holiday. (The term legal holiday includes all holidays in the District 
of Columbia and all legal holidays in the Commonwealth of Puerto Rico.)
    Commercial bank. A bank, whether or not a member of the Federal 
Reserve System, which has access to the Federal Reserve Communications 
System (FRCS) or Fedwire. The ``FRCS'' or ``Fedwire'' is a 
communications network that allows Federal Reserve System member banks 
to effect a transfer of funds for their customers (or other commercial 
banks) to the Treasury Account at the Federal Reserve Bank of New York.
    Customs officer. Any officer of the Customs Service or any 
commissioned, warrant, or petty officer of the Coast Guard, or any agent 
or other person authorized by law or designated by the Secretary of the 
Treasury to perform any duties of an officer of the Customs Service.
    Denatured spirits. Industrial spirits denatured in accordance with 
approved formulas in distilled spirits plants established and operated 
under the provisions of this chapter relating to the establishment and 
operation of plants qualified to denature spirits in the United States 
or, in respect of a product of the Virgin Islands, shall also mean 
spirits denatured in accordance with approved formulas in plants 
established under the provisions of the Virgin Islands regulations and 
shall include, unless otherwise limited, both completely and specially 
denatured spirits.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, D.C.
    Director of the service center. A director of an internal revenue 
service center.
    Distilled spirits or spirits. That substance known as ethyl alcohol, 
ethanol, or spirits of wine, in any form (including all dilutions and 
mixtures thereof, from whatever source or by whatever process produced), 
but shall not include industrial spirits as defined in this part except 
when used in reference to such spirits which would be subject to tax if 
brought into the United States.
    District director. A district director of internal revenue.
    District director of customs. The district director of customs at a 
headquarters port of the district (except the district of New York, 
N.Y.); the area directors of customs in the district of New York, N.Y.; 
and the port director at a port not designated as a headquarters port.
    Effective tax rate. The net tax rate after reduction for any credit 
allowable under 26 U.S.C. 5010 for wine and flavor content at which the 
tax imposed on distilled spirits by 26 U.S.C. 7652 is paid or 
determined.
    Electronic fund transfer or EFT. Any transfer of funds effected by a 
proprietor's commercial bank, either directly or through a correspondent 
banking relationship, via the Federal Reserve Communications System 
(FRCS) or Fedwire to the Treasury Account at the Federal Reserve Bank of 
New York.

[[Page 661]]

    Eligible article. Any medicine, medicinal preparation, food product, 
flavor, flavoring extract or perfume which contains distilled spirits, 
is unfit for beverage purposes, and has been or will be brought into the 
United States from Puerto Rico or the Virgin Islands under the 
provisions of 26 U.S.C. 7652(g).
    Eligible flavor. A flavor which:
    (1) Is of a type that is eligible for drawback of tax under 26 
U.S.C. 5134,
    (2) Was not manufactured on the premises of a distilled spirits 
plant, and
    (3) Was not subjected to distillation on distilled spirits plant 
premises such that the flavor does not remain in the finished product.
    Eligible wine. Wine on which tax would be imposed by paragraph (1), 
(2), or (3) of 26 U.S.C. 5041(b) but for its removal to distilled 
spirits plant premises and which has not been subject to distillation at 
a distilled spirits plant after receipt in bond.
    Executed under penalties of perjury. Signed with the prescribed 
declaration under the penalties of perjury as provided on or with 
respect to the return, claim, form, or other document, or where no form 
of declaration is prescribed, with the declaration: ``I declare under 
the penalties of perjury that this -------- (insert type of document, 
such as statement, report, certificate, application, claim, or other 
document), including the documents submitted in support thereof, has 
been examined by me and, to the best of my knowledge and belief, is 
true, correct, and complete.''
    Fiscal year. The period which begins October 1 and ends on the 
following September 30.
    Gallon or wine gallon. The liquid measure equivalent to the volume 
of 231 cubic inches.
    Importer. Any person who imports distilled spirits, wines, or beer 
into the United States.
    Industrial spirits. As to products of Puerto Rico, distilled spirits 
produced and warehoused at and withdrawn from distilled spirits plants 
established and operated under the provisions of this chapter relating 
to the establishment of such plants and the production, bonded 
warehousing, and withdrawal from bond of distilled spirits in the United 
States, or as to products of the Virgin Islands, distilled spirits 
produced, warehoused, and withdrawn under Virgin Islands regulations.
    Kind. As applied to spirits, kind shall mean class and type as 
prescribed in 27 CFR part 5. As applied to wines, kind shall mean the 
classes and types of wines as prescribed in 27 CFR part 4.
    Liquor bottle. A bottle made of glass or earthenware, or of other 
suitable material approved by the Food and Drug Administration, which 
has been designed or is intended for use as a container for distilled 
spirits for sale for beverage purposes and which has been determined by 
the appropriate ATF officer to adequately protect the revenue.
    Liquors. Industrial spirits, distilled spirits, liqueurs, cordials 
and similar compounds, wines, and beer or any alcoholic preparation fit 
for beverage use.
    Permit. A formal written authorization of the Secretary of the 
Treasury of Puerto Rico.
    Person. An individual, a trust, an estate, a partnership, an 
association, a company, or a corporation.
    Proof gallon. 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.
    Rectifier. Any person required to hold a rectifier's basic permit 
under 27 U.S.C. 203(b)(1).
    Revenue Agent. Any duly authorized Commonwealth Internal Revenue 
Agent of the Department of the Treasury of Puerto Rico.
    Secretary. The Secretary of the Treasury of Puerto Rico.
    Secretary or his delegate. The Secretary or any officer or employee 
of the Department of the Treasury of Puerto Rico duly authorized by the 
Secretary to perform the function mentioned or described in this part.
    Taxpaid. As used in this part with respect to liquors or articles of 
Puerto Rican manufacture, includes liquors or articles on which the tax 
was computed but with respect to which payment was

[[Page 662]]

deferred under the provisions of subpart E of this part.
    Treasury Account. The Department of the Treasury's General Account 
at the Federal Reserve Bank of New York.
    United States. The States and the District of Columbia.
    U.S.C. The United States Code.
    Virgin Islands regulations. Regulations issued or adopted by the 
Governor of the Virgin Islands, or his duly authorized agents, with the 
concurrence of the Secretary of the Treasury of the United States, or 
his delegate, under the provisions of 26 U.S.C. 5314, as amended, and 
Sec. 26.201a.
    Wine. Still wine, vermouth, or other aperitif wine, imitation, 
substandard, or artificial wine, compounds designated as wine, flavored, 
rectified, or sweetened wine, champagne or sparkling wine, and 
artificially carbonated wine, containing not over 24 percent of alcohol 
by volume. Wines containing more than 24 percent of alcohol by volume 
are classed and taxed as distilled spirits.

(68A Stat. 917, as amended (26 U.S.C. 7805); 49 Stat. 981, as amended 
(27 U.S.C. 205) Aug. 16, 1954, ch. 736, 68A Stat. 775 (26 U.S.C. 6301); 
June 29, 1956, ch. 462, 70 Stat. 391 (26 U.S.C. 6301))

[T.D. ATF-48, 43 FR 13551, Mar. 31, 1978. Redesignated and amended by 
T.D. ATF-459, 66 FR 38550, July 25, 2001]

    Editorial Note: For Federal Register citations affecting Sec. 26.11, 
see the List of CFR Sections Affected, which appears in the Finding Aids 
section of the printed volume and on GPO Access.

Subpart C [Reserved]



 Subpart Ca--Rum Imported Into the United States From Areas Other Than 
                   Puerto Rico and the Virgin Islands



Sec. 26.30  Excise taxes.

    Distilled spirits excise taxes, less the estimated amounts necessary 
for payment of refunds and drawbacks, collected on all rum imported into 
the United States (including rum from possessions other than Puerto Rico 
and the Virgin Islands), will be deposited into the Treasuries of Puerto 
Rico and the Virgin Islands according to the formula described in 
Sec. 26.31. The amount deposited into the Treasuries of Puerto Rico and 
the Virgin Islands shall be the lesser of $10.50, or the rate imposed by 
26 U.S.C. 5001(a)(1) (including adjustments to the effective tax rate 
under 26 U.S.C. 5010), on each proof gallon of rum imported into the 
United States.

(Aug. 16, 1954, Chapter 736, 68A Stat. 907, as amended (26 U.S.C. 7652))

[T.D. ATF-203, 50 FR 15888, Apr. 23, 1985. Redesignated and amended by 
T.D. ATF-459, 66 FR 38550, July 25, 2001]



Sec. 26.31  Formula.

    (a) The amount of excise taxes collected on rum that is imported 
into the United States from areas other than Puerto Rico and the Virgin 
Islands shall be deposited into the Treasuries of Puerto Rico and the 
Virgin Islands at the rate prescribed in 26 U.S.C. 7652(f). The 
distribution of such amount between Puerto Rico and the Virgin Islands 
shall be computed by using a permanent base percentage, which represents 
the excise taxes collected on rum brought into the United States from 
Puerto Rico and the Virgin Islands during fiscal year 1983. This base 
percentage is 87.626889 percent for Puerto Rico and 12.373111 percent 
for the Virgin Islands. The formula shall be as follows:
    (1) Multiply the total excise taxes collected on rum brought into 
the United States (including rum from Puerto Rico and the Virgin 
Islands) during the previous fiscal year (October 1-September 30) by the 
base percentages to determine the relative shares of the entire U.S. rum 
market that will be allotted to Puerto Rico and the Virgin Islands;
    (2) Subtract each of these shares from the excise taxes collected on 
rum transported to the United States from Puerto Rico and the Virgin 
Islands, respectively, during the previous fiscal year to determine each 
possession's loss or gain in relation to the previous fiscal year's U.S. 
rum market. Divide these results by the excise taxes collected on rum 
imported during the previous fiscal year from areas other than Puerto 
Rico and the Virgin Islands.
    (b) Notwithstanding the formula prescribed in paragraph (a) above, 
the Virgin Islands' share of the excise taxes on

[[Page 663]]

rum imported into the United States from areas other than Puerto Rico 
and the Virgin Islands shall not exceed 49 percent nor drop below 
12.373111 percent. Puerto Rico's share of the excise taxes on rum 
imported into the United States from areas other than Puerto Rico and 
the Virgin Islands shall not exceed 87.626889 percent nor drop below 51 
percent.
    (c) The percentage for the distribution of the excise taxes 
collected on rum imported into the United States from areas other than 
Puerto Rico and the Virgin Islands, that will be paid over to the 
Treasuries of Puerto Rico and the Virgin Islands, shall be effective on 
March 1 of each year, and shall remain in effect until March 1 of the 
following year.
    (d) The method for transferring the excise tax collections on rum 
imported from areas other than Puerto Rico and the Virgin Islands, into 
the Treasuries of Puerto Rico and the Virgin Islands shall be the same 
as the method used for transferring excise taxes into the Treasury of 
Puerto Rico on distilled spirits (with an alcohol content of at least 92 
percent rum) brought into the United States from Puerto Rico.
    (e) The formula prescribed in this section shall take effect on 
March 1, 1987. Prior to that date, Puerto Rico shall continue to receive 
86.4 percent of the eligible excise taxes on rum imported from areas 
other than Puerto Rico and the Virgin Islands. The Virgin Islands shall 
continue to receive 13.6 percent of these eligible excise taxes until 
March 1, 1987.

(Aug. 16, 1954, Chapter 736, 68A Stat. 907, as amended (26 U.S.C. 7652))

[T.D. ATF-233, 51 FR 28078, Aug. 5, 1986; 52 FR 2222, Jan. 21, 1987. 
Redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001]



   Subpart Cb--Products Coming Into the United States From Puerto Rico



Sec. 26.35  Taxable status.

    (a) Liquors coming into the United States from Puerto Rico, except 
as provided in Sec. 26.36, are subject to a tax equal to the internal 
revenue tax imposed on the production in the United States of like 
liquors. Articles coming into the United States from Puerto Rico, except 
as provided in Sec. 26.36, are subject to tax on the liquors contained 
therein at the rates imposed in the United States on like liquors of 
domestic production.
    (b) The excise taxes collected on distilled spirits or articles 
containing distilled spirits shall be deposited into the Treasury of 
Puerto Rico only if at least 92 percent of the alcoholic content of such 
products is rum. The amount deposited into the Treasury of Puerto Rico 
shall not exceed the lesser of $10.50, or the rate imposed by 26 U.S.C. 
5001(a)(1) (including adjustments to the effective tax rate under 26 
U.S.C. 5010), on each proof gallon of such distilled spirits or 
articles, other than eligible articles, containing distilled spirits 
coming into the United States or consumed on the island. Such excise tax 
deposits will be reduced by the estimated amount necessary for payment 
of refunds and drawbacks.
    (c) Except for products described in 26 U.S.C. 7652(c), no excise 
taxes shall be deposited into the Treasury of Puerto Rico if an excise 
tax subsidy is provided by Puerto Rico that is of a kind different from, 
or in an amount per value or volume of production greater than, any 
subsidy offered by Puerto Rico to industries manufacturing products not 
subject to Federal excise tax.

(Sec. 2682, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 7652))

[T.D. ATF-175, 49 FR 20804, May 16, 1984, as amended by T.D. ATF-203, 50 
FR 15888, Apr. 23, 1985; T.D. ATF-263, 52 FR 46593, Dec. 9, 1987. 
Redesignated and amended by T.D. ATF-459, 66 FR 38550, July 25, 2001]



Sec. 26.36  Products exempt from tax.

    (a) General. Industrial spirits, denatured spirits, and products 
made with denatured spirits in Puerto Rico may be brought into the 
United States without incurring tax liability imposed by 26 U.S.C. 5001 
or 7652.
    (b) Industrial spirits. A distiller of industrial spirits who 
registers, files a bond, and pays special (occupational) tax as a 
distilled spirits plant in accordance with part 19 of this chapter may 
ship industrial spirits to a tax-free alcohol user in the United States 
who holds a permit and has paid special (occupational) tax under part 22 
of this

[[Page 664]]

chapter. These shipments shall be made in accordance with the 
requirements of parts 19 and 22 of this chapter.
    (c) Denatured spirits. A distiller who registers, files a bond, and 
pays special (occupational) tax as a distilled spirits plant in 
accordance with part 19 of this chapter and who denatures spirits in 
accordance with parts 19 and 21 of this chapter may ship (1) completely 
denatured alcohol to anyone in the United States, and/or (2) specially 
denatured spirits to a dealer or user of specially denatured spirits in 
the United States or Puerto Rico who holds a permit and has paid special 
(occupational) tax under part 20 of this chapter. These shipments shall 
be made in accordance with the requirements of parts 19 and 20 of this 
chapter, and subpart Ia of this part.
    (d) Products made with denatured spirits. (1) A person in Puerto 
Rico who manufactures products with completely denatured alcohol in 
accordance with the requirements of part 20 of this chapter may ship 
those products to the United States in accordance with the requirements 
of part 20 of this chapter, and subpart Ia of this part.
    (2) A person in Puerto Rico who manufactures products with specially 
denatured spirits may ship those products to the United States if that 
person (i) obtains a permit to use specially denatured spirits, and pays 
special (occupational) tax, under part 20 of this chapter, and (ii) 
complies with the requirements of part 20 of this chapter and subpart Ia 
of this part relating to the manufacture and shipment of those products.

[T.D. ATF-199, 50 FR 9198, Mar. 6, 1985; T.D. ATF-199, 50 FR 20099, May, 
14, 1985, as amended by T.D. ATF-271, 53 FR 17559, May 17, 1988. 
Redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001]



Secs. 26.36a-26.36b  [Reserved]



Sec. 26.36c  Shipments of bulk distilled spirits to the United States without payment of tax.

    Bulk distilled spirits may be brought into the United States from 
Puerto Rico without payment of tax for transfer from customs custody to 
the bonded premises of a distilled spirits plant qualified under part 19 
of this chapter. Such shipments are subject to the provisions of subpart 
Ib.

[T.D. ATF-62, 44 FR 71709, Dec. 11, 1979. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]



Sec. 26.37  United States Bureau of Alcohol, Tobacco and Firearms officers.

    Appropriate ATF officers are authorized to collect internal revenue 
taxes on liquors and articles subject to tax, which are to be shipped to 
the United States.

[T.D. ATF-451, 66 FR 21669, May 1, 2001. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]



Sec. 26.38  Containers of distilled spirits.

    Containers of distilled spirits brought into the United States from 
Puerto Rico, having a capacity of not more than 1 gallon (3.785 liters), 
shall conform to the requirements of subpart P of this part.

[T.D. ATF-34, 41 FR 46863, Oct. 26, 1976. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]



Sec. 26.39  Labels.

    All labels affixed to bottles of liquors coming into the United 
States shall conform to the requirements of the Federal Alcohol 
Administration Act and implementing regulations (parts 4, 5, and 7 of 
this chapter).

[T.D. ATF-48, 44 FR 55851, Sept. 28, 1979. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]



Sec. 26.40  Marking containers of distilled spirits.

    The distiller, rectifier, or bottler shall serially number each 
case, barrel, cask, or similar container of distilled spirits filled for 
shipment to the United States. In addition to the serial number of the 
container, the distiller, rectifier, or bottler shall plainly print, 
stamp, or stencil with durable coloring material, in letters and figures 
not less than one-half inch high, on the head of each barrel, cask or 
similar container or on one side of each case, as follows:
    (a) The name of the distiller, rectifier, or bottler.
    (b) The brand name and kind of liquor;

[[Page 665]]

    (c) The wine and proof gallon contents; or, for bottles filled 
according to the metric standards of fill prescribed by Sec. 5.47a, of 
this chapter, the contents in liters and the proof of the spirits; and
    (d) In the case of barrels or casks, the serial number of the permit 
to ship, Form 487-B, prefixed by the number of such form (e.g., ``487-B-
61-1'')
    (e) In the case of bulk containers shipped to the United States 
under subpart Ib, the serial number of the application and permit to 
ship, ATF Form 5110.31, instead of the serial number of Form 487-B.

[T.D. ATF-43, 42 FR 30836, June 17, 1977; as amended by T.D. ATF-62, 44 
FR 71709, Dec. 11, 1979. Redesignated by T.D. ATF-459, 66 FR 38550, July 
25, 2001]



Sec. 26.41  Destruction of marks and brands.

    The marks, brands, and serial numbers required by this part to be 
placed on barrels, casks, or similar containers, or cases, shall not be 
removed or obscured or obliterated before the contents thereof have been 
removed.

(Sec. 201, Pub. L. 85-859, 1358, as amended, 26 U.S.C. 5205)

[T.D. ATF-198, 50 FR 8548, Mar. 1, 1985. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]



Sec. 26.43  Samples.

    The appropriate ATF officer may require samples of liquors and 
articles to be submitted whenever desired for laboratory analysis in 
order to determine the rates of tax applicable thereto.

[20 FR 6077, Aug. 20, 1955, as amended by T.D. 7006, 34 FR 2250, Feb. 
15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975, and further 
redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001]

                      Special (Occupational) Taxes



Sec. 26.44  Liquor dealer's special taxes.

    Every person bringing liquors into the United States from Puerto 
Rico, who sells, or offers for sale, such liquors shall file Form 5630.5 
with ATF in accordance with the instructions of the form, and pay 
special (occupational) tax as a wholesale dealer in liquor or as a 
retail dealer in liquor in accordance with the law and regulations 
governing the payment of such special taxes (part 194 of this chapter).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1340 as amended, 1343 as amended, 
1344 as amended (26 U.S.C. 5111, 5112, 5121, 5122))

[T.D. ATF-70, 45 FR 33980, May 21, 1980, as amended by T.D. ATF-251, 52 
FR 19338, May 22, 1987. Redesignated by T.D. ATF-459, 66 FR 38550, July 
25, 2001]



Sec. 26.45  Warehouse receipts covering distilled spirits.

    Since the sale of warehouse receipts for distilled spirits is 
equivalent to the sale of distilled spirits, every person bringing 
distilled spirits into the United States from Puerto Rico, who sells, or 
offers for sale, warehouse receipts for distilled spirits stored in 
warehouses, or elsewhere, incurs liability to special tax as a dealer in 
liquors at the place where such warehouse receipts are sold, or offered 
for sale, and must file return and pay occupational tax as provided in 
Sec. 26.44.

(68A Stat. 618, 620, 621; 26 U.S.C. 5111, 5112, 5121, 5122)

[20 FR 6077, Aug. 20, 1955. Redesignated at 40 FR 16835, Apr. 15, 1975, 
further redesignated and amended by T.D. ATF-459, 66 FR 38550, 38551, 
July 25, 2001]



Sec. 26.46  Distilled spirits plant proprietor's special (occupational) tax.

    Every proprietor of a distilled spirits plant producing industrial 
spirits, denatured spirits, or products made with denatured spirits, for 
shipment to the United States, shall file Form 5630.5 with ATF in 
accordance with instructions on the form and pay special (occupational) 
tax as a distilled spirits plant proprietor in accordance with part 19 
of this chapter.

(26. U.S.C. 5081, 5314)

[T.D. ATF-271, 53 FR 17559, May 17, 1988. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]



Sec. 26.47  Specially denatured spirits user's and dealer's special (occupational) taxes.

    Every user of specially denatured spirits who manufactures products 
made with such spirits for shipment to the United States, and every 
dealer in specially denatured spirits who ships such spirits to the 
United States, who

[[Page 666]]

is required by Sec. 26.36 to obtain a permit under part 20 of this 
chapter, shall file Form 5630.5 with ATF in accordance with instructions 
on the form and pay special (occupational) tax as a user or dealer in 
specially denatured spirits under part 20 of this chapter.

(.S.C. 5271, 5276, 5314)

[T.D. ATF-271, 53 FR 17559, May 17, 1988. Redesignated and amended by 
T.D. ATF-459, 66 FR 38550, July 25, 2001]



            Subpart D--Formulas for Products From Puerto Rico

    Source: 44 FR 71709, Dec. 11, 1979, unless otherwise noted. 
Redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001.



Sec. 26.50  Formulas for liquors.

    (a) Distilled spirits products. Except for products which are exempt 
from tax, as specified in Sec. 26.36, formulas are required by part 5 of 
this chapter for distilled spirits products shipped to the United States 
from Puerto Rico. If a formula is submitted to cover only the production 
of spirits which are to be transferred to the bonded premises of a DSP 
under 26 U.S.C. 5232, the formula shall include a statement to that 
effect. If any product contains liquors made outside of Puerto Rico, the 
country of origin for each such liquor shall be stated on the formula. 
These formulas shall be submitted on ATF Form 5110.38, in accordance 
with Sec. 26.54.
    (b) Wine. Persons in Puerto Rico who ship wine to the United States 
shall comply with the formula requirements of 27 CFR part 240. If any 
wine contains liquors made outside of Puerto Rico, the country of origin 
for each such liquor shall be stated on the formula. All formulas 
required by this paragraph shall be submitted on ATF Form 698 
Supplemental, in accordance with Sec. 26.54.

(Approved by the Office of Management and Budget under control number 
1512-0204)

[T.D. ATF-198, 50 FR 8549, Mar. 1, 1985. Redesignated and amended by 
T.D. ATF-459, 66 FR 38550, 38551, July 25, 2001]



Sec. 26.50a  Verification of eligible flavors.

    (a) Any person who, after December 1, 1990, ships to the United 
States any distilled spirits on which the tax has been or is to be paid 
or determined at an effective tax rate based in part on the alcohol 
content derived from any eligible flavor not previously approved on ATF 
Form 5530.5 (1678) or 5150.19 shall, before the first tax determination 
at that rate, request and receive a statement of eligibility for each 
flavor to be used in the computation of the effective tax rate.
    (b) To receive a statement of eligibility, the person shipping the 
distilled spirits shall submit to the ATF National Laboratory, 1401 
Research Boulevard, Rockville, MD 20850, the following:
    (1) An 8-ounce sample; and
    (2) A statement of composition using ATF Form 5154.1 or a letterhead 
request that lists the--
    (i) Name and percentage of alcohol by volume of the flavor; and
    (ii) Name and quantity of each ingredient used in the manufacture of 
the flavor.

(Approved by Office of Management and Budget under control number 1512-
0203)

(Act of August 16, 1954, Pub. L. 591, 68A Stat. 907, as amended (26 
U.S.C. 7652); Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended (26 
U.S.C. 5001); Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended (26 
U.S.C. 5010))

[T.D. ATF-297, 55 FR 18066, Apr. 30, 1990, as amended by T.D. ATF-451, 
66 FR 21669, May 1, 2001. Redesignated by T.D. ATF-459, 66 FR 38550, 
July 25, 2001]



Sec. 26.51  Formulas for articles, eligible articles and products manufactured with denatured spirits.

    (a) Formulas for articles and eligible articles. Formulas for 
articles made with distilled spirits must show the quantity and proof of 
the distilled spirits used, and the percentage of alcohol by volume 
contained in the finished product. Formulas for articles made with beer 
or wine must show the kind and quantity thereof (liquid measure), and 
the percent of alcohol by volume of such beer or wine. Formulas and 
samples for eligible articles are required in accordance with subpart F 
of part 17 of this chapter.
    (b) Formulas for products manufactured with denatured spirits. 
Products manufactured with denatured spirits shall be manufactured in 
accordance with the formula requirements of part 20 of this

[[Page 667]]

chapter for similar products made in the United States.
    (1) Products may be made with completely denatured alcohol for sale 
under brand names under part 20 of this chapter without obtaining an 
approved formula. If ingredients are added in sufficient quantities to 
materially change the composition and character of the completely 
denatured alcohol, the product is not classified as completely denatured 
alcohol and may not be marked, branded, or sold as completely denatured 
alcohol.
    (2) Products made with specially denatured spirits shall be made in 
accordance with (i) a general-use formula approved as provided in part 
20 of this chapter, or (ii) an approved formula on Form 5150.19, or 
previously approved on ATF Form 1479-A or 27-B Supplemental.
    (c) Formulas required. Formulas required by this section shall be 
submitted on Form 5150.19, except that formulas for eligible articles 
shall be submitted on Form 5154.1 (formerly 1678). Formulas shall be 
submitted in accordance with Sec. 26.54. Any formula for an eligible 
article approved on Form 5150.19 prior to October 23, 1986 shall 
continue to be valid until revoked or voluntarily surrendered. Any 
person holding such a formula is not required to submit a new formula.

(Approved by the Office of Management and Budget under control number 
1512-0494)

[44 FR 71709, Dec. 11, 1979, as amended by T.D. ATF-199, 50 FR 9198, 
Mar. 6, 1985; T.D. ATF-263, 52 FR 46593, Dec. 9, 1987; T.D. ATF-379, 61 
FR 31427, June 20, 1996. Redesignated and amended by T.D. ATF-459, 66 FR 
38550, 38551, July 25, 2001]



Sec. 26.52  Still wines containing carbon dioxide.

    (a) General. Still wines may contain not more than 0.392 gram of 
carbon dioxide per 100 milliliters of wine; except that a tolerance to 
this maximum limitation, not to exceed 0.009 gram of carbon dioxide per 
100 milliliters of wine, will be allowed where the amount of carbon 
dioxide in excess of 0.392 gram per 100 milliliters of wine was due to 
mechanical variations which could not be completely controlled under 
good commercial practices. Such tolerance will not be allowed where it 
is found that the limitation of 0.392 gram of carbon dioxide per 100 
milliliters of wine is continuously or intentionally exceeded, or where 
the variation results from the use of methods or equipment not in accord 
with good commercial practices.
    (b) Notice required. Proprietors intending to add carbon dioxide to, 
or retain carbon dioxide in, still wines to be shipped to the United 
States shall submit a notice to the appropriate ATF officer. The notice 
shall show the name and address of the proprietor and shall identify the 
method or process, the kinds (class and type) of wine, and the type of 
equipment to be used. A corrected notice shall be filed if there is any 
change (except for minor changes) in the information contained in the 
notice.
    (c) Filing and disposition of notice. The notice required by 
paragraph (b) of this section shall be submitted in quadruplicate to the 
appropriate ATF officer, who shall retain one copy, forward one copy to 
the Secretary, and one copy to the revenue agent at the proprietor's 
premises, and return one copy to the proprietor. The proprietor shall 
keep the notice available for examination by revenue agents.

(Approved by the Office of Management and Budget under control number 
1512-0352)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1331, as amended (26 U.S.C 5041))

[20 FR 6077, Aug. 20, 1955. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-172, 49 FR 14943, Apr. 16, 1984; T.D. ATF-251, 
52 FR 19338, May 22, 1987. Redesignated by T.D. ATF-459, 66 FR 38550, 
July 25, 2001]



Sec. 26.53  Changes of formulas.

    Any change in the ingredients composing a product covered by an 
approved formula will necessitate the submission of a new formula.



Sec. 26.54  Filing and disposition of formulas.

    Formulas required by this subpart must be submitted, and disposed 
of, in accordance with the instructions on the prescribed ATF form. The 
applicant shall maintain copies of approved

[[Page 668]]

formulas available for examination by revenue agents.

[ T.D. ATF-451, 66 FR 21669, May 1, 2001. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]



Sec. 26.55  Previously approved formulas.

    Any formula approved on Form 27-B Supplemental prior to January 1, 
1980, shall continue to be valid until revoked or voluntarily 
surrendered. Any person holding such a formula is not required to submit 
a new formula. If an approved formula on Form 27-B Supplemental 
indicates that carbon dioxide will be added to, or retained in, still 
wine, the notice requirement of Sec. 26.52 shall not apply.

[44 FR 71709, Dec. 11, 1979. Redesignated and amended by T.D. ATF-459, 
66 FR 38550, 38551, July 25, 2001]



      Subpart E--Taxpayment of Liquors and Articles in Puerto Rico

    Source: T.D. 6551, 26 FR 1490, Feb. 22, 1961, unless otherwise 
noted. Redesignated at 40 FR 16835, Apr. 15, 1975.

                                  Bonds



Sec. 26.61  General.

    Every person filing a bond under this subpart, or consent of surety 
on such bond, must file it in accordance with the instructions on the 
form.

[T.D. ATF-451, 66 FR 21669, May 1, 2001. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]



Sec. 26.62  Corporate surety.

    (a) Surety bonds may be given only with corporate sureties holding 
certificates of authority from, and subject to the limitations 
prescribed by, the Secretary of the Treasury, as set forth in the 
current revision of U.S. Treasury Department Circular No. 570 (Companies 
Holding Certificates of Authority as Acceptable Sureties on Federal 
Bonds and as Acceptable Reinsuring Companies).
    (b) Treasury Department Circular No. 570 is published in the Federal 
Register annually as of the first workday in July. As they occur, 
interim revisions of the circular are published in the Federal Register. 
Copies of the circular may be obtained from the Audit Staff, Bureau of 
Government Financial Operations, Department of the Treasury, Washington, 
DC 20226.

(July 30, 1947, ch. 390, 61 Stat. 648, as amended (6 U.S.C. 6, 7))

[T.D. ATF-92, 46 FR 46921, Sept. 23, 1981. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]



Sec. 26.62a  Filing of powers of attorney.

    Each bond, and each consent to changes in the terms of a bond, shall 
be accompanied by a power of attorney authorizing the agent or officer 
who executed the bond or consent to so act on behalf of the surety. The 
appropriate ATF officer who is authorized to approve the bond may, when 
he deems it necessary, require additional evidence of the authority of 
the agent or officer to execute the bond or consent.

(61 Stat. 648; 6 U.S.C. 6, 7)

[T.D. ATF-2, 37 FR 22736, Oct. 21, 1972. Redesignated at 40 FR 16835, 
Apr. 15, 1975, as amended by T.D. ATF-251, 52 FR 19338, May 22, 1987. 
Redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001]



Sec. 26.62b  Execution of powers of attorney.

    The power of attorney shall be prepared on a form provided by the 
surety company and executed under the corporate seal of the company. If 
the power of attorney submitted is other than a manually signed 
original, it shall be accompanied by certification of its validity.

(61 Stat. 648; 6 U.S.C. 6, 7)

[T.D. ATF-2, 37 FR 22736, Oct. 21, 1972. Redesignated at 40 FR 16835, 
Apr. 15, 1975. Redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001]



Sec. 26.63  Deposit of securities in lieu of corporate surety.

    In lieu of corporate surety, the principal may pledge and deposit, 
as surety for his bond, securities which are transferable and are 
guaranteed as to both interest and principal by the United States, in 
accordance with the

[[Page 669]]

provisions of 31 CFR part 225--Acceptance of Bonds, Notes or Other 
Obligations Issued or Guaranteed by the United States as Security in 
Lieu of Surety or Sureties on Penal Bonds.

(5 U.S.C. 552(a) (80 Stat. 383, as amended); 61 Stat. 650; 6 U.S.C. 15)

[T.D. 6551, 26 FR 1490, Feb. 22, 1961. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-92, 46 FR 46921, Sept. 23, 1981. 
Redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001]



Sec. 26.64  Consents of surety.

    Consents of surety to changes in the terms of bonds shall be 
executed on Form 1533 by the principal and by the surety with the same 
formality and proof of authority as is required for the execution of 
bonds.



Sec. 26.65  Authority to approve bonds and consents of surety.

    The appropriate ATF officer is authorized to approve all bonds and 
consents of surety filed under this part.

[T.D. 6551, 26 FR 1490, Feb. 22, 1961. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-251, 52 FR 19338, May 22, 1987. 
Redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001]



Sec. 26.66  Bond, ATF Form 5110.50--Distilled spirits.

    (a) General. If any person intends to ship to the United States, 
distilled spirits products of Puerto Rican manufacture from bonded 
storage in Puerto Rico on computation, but before payment, of the tax 
imposed by 26 U.S.C. 7652(a), equal to the tax imposed in the United 
States by 26 U.S.C. 5001(a)(1), he shall, before making any such 
shipment, furnish a bond ATF Form 5110.50, for each premises from which 
shipment will be made, to secure payment of such tax, at the time and in 
the manner prescribed in this subpart, on all distilled spirits products 
shipped. The bond shall be executed in a penal sum not less than the 
amount of unpaid tax which, at any one time, is chargeable against the 
bond. The penal sum of such bond shall not exceed $1,000,000, but in no 
case shall the penal sum be less than $1,000.
    (b) Blanket bond. Any person who is the proprietor of more than one 
premises in Puerto Rico from which shipment of spirits to the United 
States will be made, may, in lieu of furnishing two or more separate 
bonds on ATF Form 5110.50 as required by paragraph (a) of this section, 
furnish a blanket bond on ATF Form 5110.50. The penal sum of such 
blanket bond shall be equal to the sum of the penal sums of all the 
bonds in lieu of which it is given. Such blanket bond on ATF Form 
5110.50 shall show each bonded warehouse and/or bonded processing room 
and/or rectifying plant to be covered by the bond, and the part of the 
total penal sum (computed in accordance with paragraph (a) of this 
section) to be allocated to each of the designated premises. If the 
penal sum of the bond allocated to a designated premises is in an amount 
less than the maximum prescribed in paragraph (a) of this section, 
transactions at such premises shall not exceed the quantity permissible, 
as reflected by the penal sum allocated in the bond to such premises. 
Such blanket bond shall contain the terms and conditions of the bonds in 
lieu of which it is given and shall be conditioned that the total amount 
of the bond shall be available for satisfaction of any liability 
incurred under the terms and conditions of such bond.

(Act of August 16, 1954, 68A Stat. 847, as amended, 907, as amended (26 
U.S.C 7101, 7102, 7652))

[T.D. ATF-62, 44 FR 71710, Dec. 11, 1979. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]



Sec. 26.67  Bond, Form 2897--Wine.

    Where a proprietor intends to withdraw, for purpose of shipment to 
the United States, wine of Puerto Rican manufacture from bonded storage 
in Puerto Rico on computation, but before payment, of the tax imposed by 
26 U.S.C. 7652(a), equal to the tax imposed in the United States by 26 
U.S.C. 5041, he shall, before making any such withdrawal, furnish a 
bond, Form 2897, to secure payment of such tax, at the time and in the 
manner prescribed in this subpart, on all wine so withdrawn. The bond 
shall be executed in a penal sum not less than the amount of unpaid tax 
which, at any one time, is chargeable against the bond: Provided, That 
the penal sum of such bond shall

[[Page 670]]

not exceed $250,000, but in no case shall the penal sum be less than 
$500.

(Aug. 16, 1954, Chapter 736, 68A Stat. 775, as amended, 847, as amended, 
906, 907, as amended (26 U.S.C. 6302, 7101, 7102, 7651(2)(B), 7652(a)))

[T.D. 6551, 26 FR 1490, Feb. 22, 1961. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55852, Sept. 28, 1979. 
Redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001]



Sec. 26.68  Bond, Form 2898--Beer.

    Where a brewer intends to withdraw, for purpose of shipment to the 
United States, beer of Puerto Rican manufacture from bonded storage in 
Puerto Rico on computation, but before payment, of the tax imposed by 26 
U.S.C. 7652(a), equal to the tax imposed in the United States by 26 
U.S.C. 5051, he shall, before making any such withdrawal, furnish a 
bond, Form 2898, to secure payment of such tax, at the time and in the 
manner prescribed in this subpart, on all beer so withdrawn. The bond 
shall be executed in a penal sum not less than the amount of unpaid tax 
which, at any one time, is chargeable against the bond: Provided, That 
the penal sum of such bond shall not exceed $500,000, but in no case 
shall the penal sum be less than $1,000.

(Aug. 16, 1954, Chapter 736, 68A Stat. 775, as amended, 847, as amended, 
906, 907, as amended (26 U.S.C. 6302, 7101, 7102, 7651(2)(B), 7652(a)))

[T.D. 6551, 26 FR 1490, Feb. 22, 1961. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55852, Sept. 28, 1979. 
Redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001]



Sec. 26.68a  Bond account.

    Every person who files a bond under this subpart shall keep an 
account of the charges against and credits to the bond if the penal sum 
of his bond is less than the maximum prescribed in Secs. 26.66(a), 
26.67, or Sec. 26.68, or if the penal sum allocated to his premises 
under Sec. 26.66(b) is less than the prescribed maximum. He shall charge 
the bond with the amount of liability he accepts at the time he executes 
ATF Form 5110.51 or 2900, and shall credit the bond with the amount of 
the tax paid at the time he files each return, ATF Form 5110.32, 2927, 
or 2929, and remittance. The account shall also show the balance 
available under the bond at any one time.

[T.D. ATF-62, 44 FR 71710, Dec. 11, 1979. Redesignated and amended by 
T.D. ATF-459, 66 FR 38550, 38551, July 25, 2001]



Sec. 26.69  Strengthening bonds.

    In all cases where the penal sum of any bond becomes insufficient, 
the principal shall either give a strengthening bond with the same 
surety to attain a sufficient penal sum, or give a new bond to cover the 
entire liability. Strengthening bonds will not be approved where any 
notation is made thereon which is intended, or which may be construed, 
as a release of any former bond, or as limiting the amount of any bond 
to less than its full penal sum. Strengthening bonds shall show the 
current date of execution and the effective date.



Sec. 26.70  New or superseding bonds.

    New bonds shall be required in case of insolvency or removal of any 
surety, and may, at the discretion of the appropriate ATF officer, be 
required in any other contingency affecting the validity or impairing 
the efficiency of an existing bond. Executors, administrators, 
assignees, receivers, trustees, or other persons acting in a fiduciary 
capacity, continuing or liquidating the business of the principal, shall 
execute and file a new bond or obtain the consent of the surety or 
sureties on the existing bond or bonds. Where, under the provisions of 
Sec. 26.72, the surety on any bond given under this subpart has filed an 
application to be relieved of liability under said bond and the 
principal desires or intends to continue the operations to which such 
bond relates, he shall file a valid superseding bond to be effective on 
or before the date specified in the surety's notice. New or superseding 
bonds shall show the current date of execution and the effective date.

[T.D. 6551, 26 FR 1590, Feb. 22, 1961. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-251, 52 FR 19338, May 22, 1987. 
Further redesignated and amended by T.D. ATF-459, 66 FR 38550, 38551, 
July 25, 2001]

[[Page 671]]



Sec. 26.70a  Notice of approval of bonds.

    Upon approval of an original, a strengthening, or a superseding 
bond, the appropriate ATF officer shall notify the Secretary, and the 
revenue agent at the premises, of the total penal sum of the bond or 
bonds, and in the case of a blanket bond, the amount of the penal sum 
allocated to the premises.

[T.D. 6695, 28 FR 12932, Dec. 5, 1963. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-251, 52 FR 19338, May 22, 1987. 
Redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001]

                          Termination of Bonds



Sec. 26.71  Termination of bonds.

    Any bond given under the provisions of this subpart may be 
terminated as to future transactions--
    (a) Pursuant to application of surety as provided in Sec. 26.72;
    (b) On approval of a superseding bond;
    (c) On notification by the principal to the appropriate ATF officer 
that he has discontinued transactions under the bond; or
    (d) On notification by the principal to the appropriate ATF officer 
that he has discontinued business.

[T.D. 6695, 28 FR 12932, Dec. 5, 1963. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-251, 52 FR 19338, May 22, 1987. 
Redesignated and amended by T.D. ATF-459, 66 FR 38550, 38551, July 25, 
2001]



Sec. 26.72  Application of surety for relief from bond.

    A surety on any bond given under the provisions of this subpart may 
at any time in writing notify the principal and the appropriate ATF 
officer that he desires, after a date named, to be relieved of liability 
under said bond. Such date shall be not less than 10 days after the date 
the notice is received by the appropriate ATF officer. The surety shall 
also file with the appropriate ATF officer an acknowledgment or other 
proof of service on the principal. If such notice is not thereafter in 
writing withdrawn, the rights of the principal as supported by said bond 
shall be terminated on the date named in the notice, and the surety 
shall be relieved from liability to the extent set forth in Sec. 26.73.

(Approved by the Office of Management and Budget under control number 
1512-0352)

[T.D. 6551, 26 FR 1490, Feb. 22, 1961. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-172, 49 FR 14943, Apr. 16, 1984; T.D. 
ATF-251, 52 FR 19338, May 22, 1987. Redesignated and amended by T.D. 
ATF-459, 66 FR 38550, 38551, July 25, 2001]



Sec. 26.73  Relief of surety from bond.

    Where the surety on a bond given under the provisions of this 
subpart has filed application for relief from liability, as provided in 
Sec. 26.72, the surety shall be relieved from liability for transactions 
occurring wholly subsequent to the date specified in the notice, or the 
effective date of a new bond, if one is given.

[T.D. 6551, 26 FR 1490, Feb. 22, 1961. Redesignated at 40 FR 16835, Apr. 
15, 1975 and further redesignated and amended by T.D. ATF-459, 66 FR 
38550, 38551, July 25, 2001]



Sec. 26.74  Release of pledged securities.

    Securities of the United States pledged and deposited as provided in 
Sec. 26.63, shall be released only in accordance with the provisions of 
31 CFR part 225. Such securities will not be released by the appropriate 
ATF officer until the liability under the bond for which they were 
pledged has been terminated. When the appropriate ATF officer is 
satisfied that they may be released, he shall fix the date or dates on 
which a part or all of such securities may be released. At any time 
prior to the release of such securities, the appropriate ATF officer may 
extend the date of release for such additional length of time as he 
deems necessary.

(61 Stat. 650; 6 U.S.C. 15)

[T.D. 6551, 26 FR 1590, Feb. 22, 1961. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-251, 52 FR 19338, May 22, 1987. 
Redesignated and amended by T.D. ATF-459, 66 FR 38550, 38551, July 25, 
2001]



Sec. 26.75  Form 1490, Notice of Termination of Bond.

    When the appropriate ATF officer is satisfied that any bond given 
under the provisions of this subpart may be terminated, he shall issue 
Form 1490, Notice of Termination of Bond, and shall

[[Page 672]]

forward copies to the principal and to the surety. The appropriate ATF 
officer shall, prior to the termination date, notify the Secretary and 
the revenue agent of the proposed termination of any bond given under 
this part and the date of such termination.

[T.D. 6695, 28 FR 12932, Dec. 5, 1963, as amended by T.D. ATF-2, 37 FR 
22736, Oct. 21, 1972. Redesignated at 40 FR 16835, Apr. 15, 1975, and 
amended bt T.D. ATF-251, 52 FR 19338, May 22, 1987. Redesignated by T.D. 
ATF-459, 66 FR 38550, July 25, 2001]

                            Permits Required



Sec. 26.76  Insular permits.

    Before liquors or articles of Puerto Rican manufacture may be 
shipped to the United States, an insular permit, ATF Form 5110.51 (for 
distilled spirits) or Form 2900 (for wine or beer), to compute the taxes 
imposed by 26 U.S.C. 7652(a), and to withdraw the products from the 
bonded establishment where they may be deposited, must be obtained from 
the Secretary, and such products may not be shipped to the United States 
until a permit to ship, on Form 487B, is applied for and obtained from 
the Secretary.

[T.D. 6551, 26 FR 1490, Feb. 22, 1961. Redesignated at 40 FR 16835, Apr. 
15, 1975]

    Editorial Note: For Federal Register citations affecting Sec. 26.76, 
see the List of CFR Sections Affected, which appears in the Finding Aids 
section of the printed volume and on GPO Access.

                            Distilled Spirits



Sec. 26.77  Subject to tax.

    (a) Distilled spirits of Puerto Rican manufacture, and any products 
containing such distilled spirits, brought into the United States and 
withdrawn for consumption or sale are subject to a tax equal to the tax 
imposed in the United States by 26 U.S.C. 5001.
    (b) A credit against the tax imposed on distilled spirits by 26 
U.S.C. 7652 is allowable under 26 U.S.C. 5010 on each proof gallon of 
alcohol derived from eligible wine or from eligible flavors which do not 
exceed 2\1/2\ percent of the finished product on a proof gallon basis. 
The credit is allowable at the time the tax is payable as if it 
constituted a reduction in the rate of tax.
    (c) Where credit against the tax is desired, the person liable for 
the tax shall establish an effective tax rate in accordance with 
Sec. 26.79a. The effective tax rate established will be applied to each 
withdrawal or other disposition of the distilled spirits for consumption 
or sale within the United States.

(Approved by Office of Management and Budget under control number 1512-
0203)

(Act of August 16, 1954, Pub. L. 591, 68A Stat. 907, as amended (26 
U.S.C. 7652); Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended (26 
U.S.C. 5001); Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended (26 
U.S.C. 5010))

[T.D. ATF-297, 55 FR 18066, Apr. 30, 1990. Redesignated and amended by 
T.D. ATF-459, 66 FR 38550, 38551, July 25, 2001]



Sec. 26.78  Application and permit, ATF Form 5110.51.

    Application for permit to compute the tax on, and to withdraw, 
distilled spirits shall be made on ATF Form 5110.51, in quintuplicate, 
by the proprietor. The proprietor shall forward all copies of the form 
to the Secretary. If the application is properly prepared and is 
otherwise in order, the Secretary or his delegate shall execute the 
permit, retain one copy, and forward the original and remaining copies 
of the form to the revenue agent at the premises where the products are 
located.

[T.D. ATF-62, 44 FR 71711, Dec. 11, 1979, as amended by T.D. ATF-251, 52 
FR 19338, May 22, 1987. Redesignated by T.D. ATF-459, 66 FR 38550, July 
25, 2001]



Sec. 26.79  Inspection or gauge and computation of tax.

    On receipt of permit to compute the tax on ATF Form 5110.51, the 
revenue agent shall:
    (a) In the case of spirits in packages, prepare a gauge record as 
provided in Sec. 26.164a in quadruplicate, compute the tax thereon, and 
attach all copies of the gauge record to ATF Form 5110.51;
    (b) In the instance of spirits in cases, verify by inspection the 
quantity of spirits described on the form; or
    (c) In the case of spirits in a bulk conveyance, verify by gauge or 
inspection the quantity of spirits described on the form.

If the revenue agent determines any variation between his gauge and the

[[Page 673]]

quantity of spirits described on Form 5110.51, he shall amend and 
initial the data in part I of the form. The revenue agent shall deliver 
all copies of Form 5110.51 and any accompanying package gauge record to 
the proprietor. The proprietor shall then compute and enter the amount 
of tax on all copies of Form 5110.51.

(Approved by the Office of Management and Budget under control number 
1512-0250)

[T.D. ATF-198, 50 FR 8549, Mar. 1, 1985. Redesignated and amended by 
T.D. ATF-459, 66 FR 38550, 38551, July 25, 2001]



Sec. 26.79a  Computation of effective tax rate.

    (a) The proprietor shall compute the effective tax rate for 
distilled spirits containing eligible wine or eligible flavors as the 
ratio of the numerator and denominator as follows:
    (1) the numerator will be the sum of:
    (i) The proof gallons of all distilled spirits used in the product 
(exclusive of distilled spirits derived from eligible flavors), 
multiplied by the tax rate prescribed by 26 U.S.C. 5001;
    (ii) The wine gallons of each eligible wine used in the product, 
multiplied by the tax rate prescribed by 26 U.S.C. 5041(b) (1), (2), or 
(3), as applicable; and
    (iii) The proof gallons of all distilled spirits derived from 
eligible flavors used in the product, multiplied by the tax rate 
prescribed by 26 U.S.C. 5001, but only to the extent that such distilled 
spirits exceed 2\1/2\% of the denominator prescribed in paragraph (a)(2) 
of this section.
    (2) The denominator will be the sum of:
    (i) The proof gallons of all distilled spirits used in the product, 
including distilled spirits derived from eligible flavors; and
    (ii) The wine gallons of each eligible wine used in the product, 
multiplied by twice the percentage of alcohol by volume of each, divided 
by 100.
    (b) In determining the effective tax rate, quantities of distilled 
spirits, eligible wine, and eligible flavors will be expressed to the 
nearest tenth of a proof gallon. The effective tax rate may be rounded 
to as many decimal places as the proprietor deems appropriate, provided 
that, such rate is expressed no less exactly than the rate rounded to 
the nearest whole cent, and the effective tax rates for all products 
will be consistently expressed to the same number of decimal places. In 
such case, if the number is less than five it will be dropped; if it is 
five or over, a unit will be added.
    (c) The following is an example of the use of the formula.
---------------------------------------------------------------------------

    \1\ Proof gallons by which distilled spirits derived from eligible 
flavors exceed 2\1/2\% of the total proof gallons in the batch (100.9 - 
(2\1/2\%) x 3.371.8 = 16.6).

                              Batch Record
Distilled spirits.........................  2249.1 proof gallons.
Eligible wine (14% alcohol by volume).....  2265.0 wine gallons
Eligible wine (19% alcohol by volume).....  1020.0 wine gallons
Eligible flavors..........................  100.9 proof gallons

                                            [GRAPHIC] [TIFF OMITTED] TC05OC91.041
                                            

[[Page 674]]


(Approved by Office of Management and Budget under control number 1512-
0203)

(Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010))

[T.D. ATF-297, 55 FR 18066, Apr. 30, 1990, as amended by T.D. ATF-307, 
55 FR 52741, Dec 21, 1990. Redesignated by T.D. ATF-459, 66 FR 38550, 
July 25, 2001]



Sec. 26.80  Deferred payment of tax--release of spirits.

    (a) Action by proprietor. Where the proprietor has furnished bond on 
ATF Form 5110.50, and payment of the tax is to be deferred, he shall 
execute an agreement on ATF Form 5110.51 to pay the amount of tax which 
has been computed and entered on the form. He shall also certify, under 
the penalties of perjury, that he is not in default of any payment of 
tax chargeable against his bond, and that his bond is in the maximum 
penal sum, or that it is sufficient to cover the amount of tax on the 
distilled spirits described on the form in addition to all other amounts 
chargeable agains this bond. The proprietor shall deliver all copies of 
ATF Form 5110.51 and any package gauge record as provided in 
Sec. 26.164a to the revenue agent.
    (b) Action by revenue agent. On receipt of ATF Form 5110.51 and any 
package gauge record, the revenue agent shall verify the computation of 
the tax entered on the ATF Form 5110.51, and if the proprietor has on 
file a good and sufficient bond, ATF Form 5110.50, so indicate on ATF 
Form 5110.51. The revenue agent shall then execute his report of release 
on the ATF Form 5110.51 and release the spirits for shipment to the 
United States. He shall distribute ATF Form 5110.51 and any package 
gauge record according to the instructions of ATF Form 5110.51. Where 
the revenue agent finds that the proprietor does not have good and 
sufficient bond coverage, or where the revenue agent has received 
information that the proprietor is in default of payment of any taxes 
previously charged to his bond, he shall return all copies of ATF Form 
5110.51 and any package gauge record to the proprietor, giving his 
reasons for such action.

(Approved by the Office of Management and Budget under control number 
1512-0250)

[T.D. ATF-198, 50 FR 8549, Mar. 1, 1985. Redesignated and amended by 
T.D. ATF-459, 66 FR 38550, 38551, July 25, 2001]



Sec. 26.81  Prepayment of tax and release of spirits.

    (a) Action by proprietor. Where the distilled spirits are to be 
released after payment of the computed tax, the proprietor shall enter 
the amount of such computed tax on all copies of ATF Form 5110.51 and 
execute the statement that such tax is being prepaid. The proprietor 
shall then prepare ATF Form 5000.25 in duplicate, and send the original 
with all copies of ATF Form 5110.51 and any package gauge record as 
provided in Sec. 26.164a and the remittance in full for the tax, to the 
appropriate ATF officer.
    (b) Action by appropriate ATF officer. On receipt of ATF Forms 
5110.51, 5000.25 and any package gauge record, with remittance covering 
prepayment of tax, the appropriate ATF officer shall execute the receipt 
on ATF Form 5000.25 and execute the report of prepaid taxes on all 
copies of ATF Form 5110.51. The appropriate ATF officer shall then 
retain the originals of ATF Forms 5110.51 and 5000.25 and forward the 
remaining copies of ATF Form 5110.51 in accordance to the instructions 
on the form.
    (c) Action by revenue agent. On receipt of ATF Form 5110.51 executed 
by the appropriate ATF officer to show receipt of ATF Form 5000.25 and 
remittance, the revenue agent shall execute the report of release on the 
ATF Form 5110.51 and release the spirits for shipment to the United 
States. The completed ATF Form 5110.51 shall be distributed according to 
the instructions on the form.

(Approved by the Office of Management and Budget under control number 
1512-0210 and 1512-0497)

[T.D. ATF-277, 53 FR 45267, Nov. 9, 1988. Redesignated and amended by 
T.D. ATF-459, 66 FR 38550, 38551, July 25, 2001]

[[Page 675]]



Sec. 26.82  Permit to ship.

    Distilled spirits may not be shipped to the United States until 
permit for such shipment has been obtained from the Secretary as 
provided in Secs. 26.114 through 26.116.

[T.D. 6695, 28 FR 12932, Dec. 5, 1963. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-62, 44 FR 71711, Dec. 11, 1979. 
Redesignated and amended by T.D. ATF-459, 66 FR 38550, 38551, July 25, 
2001]

                      Packages of Distilled Spirits



Sec. 26.86  Authority for shipment.

    Where distilled spirits of Puerto Rican manufacture are to be 
shipped to the United States in containers having a capacity of more 
than one gallon, the laws and regulations of the Commonwealth of Puerto 
Rico require that prior approval for such shipment be obtained from the 
Secretary.

[T.D. 6695, 28 FR 12933, Dec. 5, 1963. Redesignated at 40 FR 16835, Apr. 
15, 1975. Redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001]



Sec. 26.87  Evidence of taxpayment.

    Where, under the provisions of Sec. 26.86, a person has made 
application to the Secretary for authority to ship distilled spirits of 
Puerto Rican manufacture to the United States in containers having a 
capacity of more than one gallon, he shall, at the same time, submit 
sworn evidence to the Secretary that the distilled spirits tax has been 
paid as provided in Sec. 26.81 or deferred as provided in Sec. 26.80, or 
he shall submit application, ATF Form 5110.51, for permit to pay such 
taxes, as provided in Sec. 26.78. When satisfied that the shipper has 
complied with all provisions of this part relating to the payment of 
taxes on such distilled spirits, the Secretary or his delegate, shall 
note his approval on both copies of the sworn application, and return 
one copy to the shipper. On receipt of the approved application, the 
shipper shall submit application for permit to ship, Form 487B, as 
prescribed in Secs. 26.114 through 26.116.

[T.D. 6695, 28 FR 12933, Dec. 5, 1963. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-62, 44 FR 71711, Dec. 11, 1979. 
Redesignated and amended by T.D. ATF-459, 66 FR 38550, 38551, July 25, 
2001]

                                  Wine



Sec. 26.92  Subject to tax.

    (a) Wine of Puerto Rican manufacture coming into the United States 
and withdrawn for consumption or sale is subject to a tax equal to the 
internal revenue tax imposed in the United States on wine by 26 U.S.C. 
5041.
    (b) The excise taxes collected on wine of Puerto Rican manufacture 
shall be deposited in the Treasury of Puerto Rico only if the sum of the 
cost or value of the materials produced in Puerto Rico, plus the direct 
costs of processing operations performed in Puerto Rico, equals or 
exceeds 50 percent of the value of the wine when it is brought into the 
United States.

(Aug. 16, 1954, Chapter 736, 68A Stat. 907, as amended (26 U.S.C. 7652))

[T.D. ATF-206, 50 FR 15888, Apr. 23, 1985. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]



Sec. 26.93  Application and permit, Form 2900.

    When wine of Puerto Rican manufacture is to be withdrawn for 
shipment to the United States, or for use in an article made with wine 
only or with wine and beer only, for shipment to the United States, 
application for permit to compute the tax on, and to withdraw, the wine 
shall be made on Form 2900, in quintuplicate, by the proprietor of the 
bonded premises where the wine is stored. If the withdrawal is to be 
made in casks, barrels, kegs or similar containers, the proprietor shall 
enter the name of the winemaker producing the wine, the serial numbers 
of the packages, the total number of wine gallons contained therein, and 
the taxable grade of the wine, for example, ``not more than 14 percent'' 
if the wine contains not more than 14 percent of alcohol by volume, 
``14-21 percent'' if the wine contains more than 14 percent and not 
exceeding 21 percent of alcohol by volume, ``21-24 percent'' if the wine 
contains more than 21 percent but not exceeding 24 percent of alcohol by 
volume. If the application covers more than one taxable grade of wine, 
the quantity in each taxable grade shall be reported separately. If the 
withdrawal is to consist of bottled wine, the proprietor shall show the 
number of cases,

[[Page 676]]

size of the bottles, the number of bottles per case, the total quantity 
in wine gallons, and the taxable grade of the wine in the manner stated 
above. The proprietor shall forward all copies of the form to the 
Secretary. If the application is properly prepared and is otherwise in 
order, the Secretary or his delegate shall execute the permit, retain 
one copy, and return the original and three copies to the proprietor.

[T.D. ATF-62, 44 FR 71712, Dec. 11, 1979, as amended by T.D. ATF-251, 52 
FR 19338, May 22, 1987. Redesignated by T.D. ATF-459, 66 FR 38550, July 
25, 2001]



Sec. 26.94  Computation of tax.

    On receipt of permit to compute the tax on Form 2900, the proprietor 
shall compute and enter the amount of the tax on all copies of the form.

[T.D. 6695, 28 FR 12934, Dec. 5, 1963. Redesignated at 40 FR 16835, Apr. 
15, 1975. Redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001]



Sec. 26.95  Deferred payment of tax--release of wine.

    (a) Action by proprietor. Where the proprietor has furnished bond, 
on Form 2897, and payment of the tax is to be deferred, he shall execute 
the agreement on Form 2900 to pay the amount of tax which has been 
computed and entered on the form. He shall also certify under the 
penalties of perjury that he is not in default of any payment of tax 
chargeable against his bond, and that his bond is in the maximum penal 
sum, or that it is sufficient to cover the amount of tax on the wine 
described on the form in addition to all other amounts chargeable 
against his bond. The proprietor shall deliver all copies of Form 2900 
to the revenue agent.
    (b) Action by revenue agent. On receipt of Form 2900, the revenue 
agent shall verify the computation of the tax entered on the form, and 
if the proprietor has on file a good and sufficient bond, Form 2897, so 
indicate on Form 2900. The revenue agent shall then execute his report 
of release on the Form 2900 and release the wine for the purpose 
authorized on the form. The completed form shall be distributed in the 
same manner as provided for ATF Form 5110.51 in Sec. 26.80(b). Where the 
revenue agent finds that the proprietor does not have good and 
sufficient bond coverage, or that the proprietor is in default of 
payment of any taxes previously charged to his bond, he shall return all 
copies of Form 2900 to the proprietor, giving his reasons for such 
action.

[T.D. 6695, 28 FR 12934, Dec. 5, 1963. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-62, 44 FR 71712, Dec. 11, 1979. 
Redesignated and amended by T.D. ATF-459, 66 FR 38550, 38551, July 25, 
2001]



Sec. 26.96  Prepayment of tax--release of wine.

    (a) Action by proprietor. Where the wine is to be withdrawn from 
bonded storage after payment of the computed tax, the proprietor shall 
enter the amount of such computed tax on all copies of ATF Form 2900 
(5100.21) and execute the statement that such tax is being prepaid. The 
proprietor shall then prepare ATF Form 5000.25 in duplicate and send the 
original with all copies of ATF Form 2900 (5100.21) and the remittance 
in full for the tax, to the appropriate ATF officer.
    (b) Action by appropriate ATF officer. On receipt of ATF Forms 2900 
(5100.21) and 5000.25, and remittance covering prepayment of tax, the 
appropriate ATF officer shall execute the receipt on ATF Form 5000.25 
and execute the report of prepaid taxes on all copies of ATF Form 2900 
(5100.21). The appropriate ATF officer shall then retain the originals 
of ATF Forms 2900 (5100.21) and 5000.25 and forward the remaining copies 
of ATF Form 2900 (5100.21) in accordance with the instructions on the 
form.
    (c) Action by revenue agent. On receipt of ATF Form 2900 (5100.21) 
executed by the appropriate ATF officer to show receipt of ATF Form 
5000.25 and remittance, the revenue agent shall execute the report of 
release on the ATF Form 2900 (5100.21) and release the wine for the 
purpose authorized on the form. The completed ATF Form 2900 (5100.21)

[[Page 677]]

shall be distributed according to the instructions on the form.

(Approved by the Office of Management and Budget under control number 
1512-0149 and 1512-0497)

[T.D. ATF-277, 53 FR 45267, Nov. 9, 1988. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]



Sec. 26.96a  [Reserved]



Sec. 26.96b  Permit to ship.

    Wine released from bonded storage under Sec. 26.95 or Sec. 26.96 may 
not be shipped to the United States until permit for such shipment has 
been obtained from the Secretary as provided in Secs. 26.114 through 
26.116.

[T.D. 6695, 28 FR 12934, Dec. 5, 1963. Redesignated at 40 FR 16835, Apr. 
15, 1975, and further redesignated and amended by T.D. ATF-459, 66 FR 
38550, 38551, July 25, 2001]



Sec. 26.97  Marking containers of wine.

    Containers of wine of Puerto Rican manufacture which are to be 
shipped to the United States must be marked with the name of the 
winemaker, the serial number of the container, the kind and taxable 
grade of the wine, the gallon content, and the serial number of the 
withdrawal permit, Form 487B, prefixed by the number of such form, e.g., 
``487B-61-3.''

                                  Beer



Sec. 26.101  Subject to tax.

    (a) Beer of Puerto Rican manufacture coming into the United States 
and withdrawn for consumption or sale is subject to a tax equal to the 
internal revenue tax imposed on beer in the United States by 26 U.S.C. 
5051.
    (b) The excise taxes collected on beer of Puerto Rican manufacture 
shall be deposited in the Treasury of Puerto Rico only if the sum of the 
cost or value of the materials produced in Puerto Rico, plus the direct 
costs of processing operations performed in Puerto Rico, equals or 
exceeds 50 percent of the value of the beer when it is brought into the 
United States.

(Aug. 16, 1954, Chapter 736, 68A Stat. 907, as amended (26 U.S.C. 7652))

[T.D. ATF-206, 50 FR 15888, Apr. 23, 1985. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]



Sec. 26.102  Application and permit, Form 2900.

    When beer of Puerto Rican manufacture is to be withdrawn for 
shipment to the United States, or for use in making an article for 
shipment to the United States, application for permit to compute the tax 
on, and to withdraw, the beer shall be made by the brewer on Form 2900, 
in quintuplicate. If the withdrawal is to be made in hogsheads, barrels, 
or kegs, the brewer shall enter the total number of each size, according 
to capacity, of containers which it is desired to withdraw. If the 
withdrawal is to be made in bottles, the brewer shall enter the number 
of cases, size of bottles, number of bottles per case, the total 
contents thereof in gallons (liquid measure), and the equivalent thereof 
in barrels and fractions of barrels of 31 gallons each. The brewer shall 
forward all copies of the Form 2900 to the Secretary. If the application 
is properly prepared and is otherwise in order, the Secretary or his 
delegate shall execute the permit, retain one copy, and return the 
original and three copies to the brewer.

[T.D. 6695, 28 FR 12934, Dec. 5, 1963. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-251, 52 FR 19338, May 22, 1987. 
Redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001]



Sec. 26.103  Computation of tax.

    On receipt of permit to compute the tax on Form 2900 the brewer 
shall compute and enter the amount of the tax on all copies of the form.

[T.D. 6695, 28 FR 12934, Dec. 5, 1963. Redesignated at 40 FR 16835, Apr. 
15, 1975, and further redesignated by T.D. ATF-459, 66 FR 38550, July 
25, 2001]



Sec. 26.104  Deferred payment of tax--release of beer.

    (a) Action by brewer. Where the brewer has furnished bond on Form 
2898, and payment of the tax is to be deferred, he shall execute the 
agreement

[[Page 678]]

on Form 2900 to pay the amount of tax which has been computed and 
entered on the form. He shall also certify under the penalties of 
perjury that he is not in default of any payment of tax chargeable 
against his bond, and that his bond is in the maximum penal sum, or that 
it is sufficient to cover the amount of tax on the beer described on the 
form in addition to all other amounts chargeable against his bond. The 
brewer shall deliver all copies of Form 2900 to the revenue agent.
    (b) Action by revenue agent. On receipt of Form 2900, the revenue 
agent shall verify the computation of the tax entered on the form, and 
if the proprietor has on file a good and sufficient bond, Form 2898, so 
indicate on Form 2900. The revenue agent shall then execute his report 
of release on the Form 2900 and release the beer for the purpose 
authorized on the form. The completed form shall be distributed in the 
same manner as provided for ATF Form 5110.51 in Sec. 26.80(b). Where the 
revenue agent finds that the proprietor does not have good and 
sufficient bond coverage, or that the proprietor is in default of 
payment of any taxes previously charged to his bond, he shall return all 
copies of Form 2900 to the proprietor, giving his reasons for such 
action.

[T.D. 6695, 28 FR 12934, Dec. 5 1963. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-62, 44 FR 71712, Dec. 11, 1979. 
Redesignated and amended by T.D. ATF-459, 66 FR 38550, 38551, July 25, 
2001]



Sec. 26.105  Prepayment of tax--release of beer.

    (a) Action by brewer. Where the beer is to be withdrawn from bonded 
storage after payment of the computed tax the brewer shall enter the 
amount of such computed tax on all copies of ATF Form 2900 (5100.21) and 
execute the statement that such tax is being prepaid. The brewer shall 
then prepare ATF Form 5000.25 in duplicate and send the original with 
all copies of ATF Form 2900 (5100.21) and the remittance in full for the 
tax, to the appropriate ATF officer.
    (b) Action by appropriate ATF officer. On receipt of ATF Forms 2900 
(5100.21) and 5000.25, and remittance covering prepayment of tax, the 
appropriate ATF officer shall execute the receipt on ATF Form 5000.25 
and execute the report of prepaid taxes on all copies of ATF Form 2900 
(5100.21). The appropriate ATF officer shall then retain the originals 
of ATF Forms 2900 (5110.21) and 5000.25 and forward the remaining copies 
of ATF Form 2900 (5100.21) in accordance with the instructions of the 
form.
    (c) Action by revenue agent. On receipt of ATF Form 2900 (5100.21) 
executed by the appropriate ATF officer to show receipt of ATF Form 
5000.25 and remittance, the revenue agent shall execute the report of 
release on the ATF Form 2900 (5100.21) and release the beer for the 
purpose authorized on the form. The completed ATF Form 2900 (5100.21) 
shall be distributed according to the instructions on the form.

(Approved by the Office of Management and Budget under control number 
1512-0149 and 1512-0497)

[T.D. ATF-277, 53 FR 45268, Nov. 9, 1988. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]



Sec. 26.105a  Permit to ship.

    Beer released from bonded storage under Sec. 26.104 or Sec. 26.105 
may not be shipped to the United States until permit for such shipment 
has been obtained from the Secretary as provided in Secs. 26.114 through 
26.116.

[T.D. 6695, 28 FR 12935, Dec. 5, 1963. Redesignated at 40 FR 16835, Apr. 
15, 1975, and further redesignated and amended by T.D. ATF-459, 66 FR 
38550, 38551, July 25, 2001]



Sec. 26.106  Marking containers of beer.

    Containers of beer of Puerto Rican manufacture which are to be 
shipped to the United States must be marked with the name of the brewer; 
the serial number, capacity, and size of the container; the kind of 
beer; and the serial number of the withdrawal permit, Form 487B, 
prefixed by the number of such form, e.g., ``487B-61-3.''

                                Articles



Sec. 26.107  Taxable status.

    Articles of Puerto Rican manufacture which are to be shipped to the 
United States and which are not exempt fom tax under the provisions of 
Sec. 26.36 are subject, under section 7652(a)

[[Page 679]]

to a tax equal to the tax imposed by the internal revenue laws of the 
United States. If such articles contain distilled spirits, the tax will 
be collected at the rate prescribed by 26 U.S.C. 5001(a)(1) on all 
alcohol contained therein, regardless of the source. Such articles 
containing only wine and/or beer will be taxed at the rates prescribed 
by 26 U.S.C. 5041 and/or 5051, respectively. A formula covering the 
manufacture of each article shall be filed by the manufacturer in 
accordance with subpart D of this part.

[T.D. ATF-62, 44 FR 71712, Dec. 11, 1979. Redesignated and amended by 
T.D. ATF-459, 66 FR 38550, July 25, 2001]



Sec. 26.108  Application for permit, ATF Form 5110.51 and/or Form 2900.

    (a) Distilled spirits. Where distilled spirits of Puerto Rican 
manufacture are to be used in the manufacture of the articles to be 
shipped to the United States, the manufacturer shall make application on 
Form 5110.51, in accordance with the applicable provisions of 
Sec. 26.78.
    (b) Wine and/or beer. Where wine and/or beer of Puerto Pican 
manufacture is to be used in the manufacture of the articles to be 
shipped to the United States, the manufacturer shall make application on 
Form 2900, in accordance with the applicable provisions of Secs. 26.93 
and/or 26.102. Wine and beer may be included in the same application.
    (c) Approval of applications. The Secretary, or his delegate, shall 
approve and dispose of the applications in the manner prescribed in 
Secs. 26.78, 26.93, and/or Sec. 26.102, as the case may be.

[T.D. 6551, 26 FR 1490, Feb. 22, 1961. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-62, 44 FR 71712, Dec. 11, 1979. 
Redesignated and amended by T.D. ATF-459, 66 FR 38550, 38551, July 25, 
2001]



Sec. 26.109  Taxpayment.

    (a) Distilled spirits. The tax on distilled spirits contained in 
articles to be shipped to the United States, equal to the tax imposed in 
the United States by 26 U.S.C. 5001(a)(1), shall be computed in 
accordance with Sec. 26.79 and paid in accordance with the applicable 
provisions of Secs. 26.80, 26.81, and 26.111 through 26.113.
    (b) Wine. The tax on wine used in the manufacture of articles to be 
shipped to the United States, equal to the tax imposed in the United 
States by 26 U.S.C. 5041, shall be computed in accordance with 
Sec. 26.94 and paid in accordance with the applicable provisions of 
Secs. 26.95, 26.96, and 26.111 through 26.113.
    (c) Beer. The tax on beer used in the manufacture of articles to be 
shipped to the United States, equal to the tax imposed in the United 
States by 26 U.S.C. 5051, shall be computed in accordance with 
Sec. 26.103 and paid in accordance with the applicable provisions of 
Secs. 26.104, 26.105, and 26.111 through 26.113.

[T.D. ATF-62, 44 FR 71712, Dec. 11, 1979. Redesignated and amended by 
T.D. ATF-459, 66 FR 38550, 38551, July 25, 2001]



Sec. 26.110  Release of articles or liquors.

    After determining that the proprietor has good and sufficient bond 
coverage, or, in the case of prepayment, on receipt of ATF Form 5110.51 
or Form 2900 executed by the appropriate ATF officer to show receipt of 
ATF Form 5000.25, and remittance, the revenue agent shall execute his 
report of release on ATF Form 5110.51 or Form 2900 and release the 
articles containing distilled spirits, or release the wine and/or beer 
for use in the manufacture of articles. He shall forward one copy of ATF 
Form 5110.51 or Form 2900, and any package gauge record as provided in 
Sec. 26.164a, to the Bureau of Alcoholic Beverage Taxes and one copy of 
each to the District Revenue Agent (Commonwealth of Puerto Rico), 
deliver one copy of each to the applicant, and retain one copy. A permit 
shall be obtained as provided in Secs. 26.114 through 26.116 before the 
articles manufactured from such liquors may be shipped to the United 
States.

(Approved by the Office of Management and Budget under control number 
1512-0497)

[T.D. ATF-198, 50 FR 8550, Mar. 1, 1985, as amended by T.D. ATF-251, 52 
FR 19338, May 22, 1987; T.D. ATF-277, 53 FR 45268, Nov. 9, 1988. 
Redesignated and amended by T.D. ATF-459, 66 FR 38550, 38551, July 25, 
2001]

[[Page 680]]

                        Payment of Tax by Return



Sec. 26.111  General.

    All taxes imposed by 26 U.S.C. 7652(a), and which, under the 
provisions of this part, are paid in Puerto Rico, shall be paid and 
collected on the basis of a tax return as provided in this subpart. Any 
tax which has been paid in accordance with the provisions of this part 
in effect at the time of such payment, and before provision was made in 
the part for payment of such tax by return, shall be deemed to have been 
prepaid as prescribed in this part.

[T.D. 6551, 26 FR 1490, Feb. 22, 1961. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55852, Sept. 28, 1979; T.D. 
ATF-277, 53 FR 45268, Nov. 9, 1988. Redesignated by T.D. ATF-459, 66 FR 
38550, July 25, 2001]



Sec. 26.112  Returns for semimonthly periods.

    (a) Returns. The taxes imposed by 26 U.S.C. 7652(a), (equal to the 
taxes imposed in the United States by 26 U.S.C. 5001(a)(1), 5041, or 
5051), the payment of which has been deferred under the provisions of 
Secs. 26.80, 26.95 or 26.104 of this part, shall be paid pursuant to a 
return on ATF Form 5000.25 prepared in accordance with the instructions 
on the form.
    (b) Periods. Except as provided for in paragraph (d) of this 
section, the periods to be covered by returns on ATF Form 5000.24 shall 
be semimonthly; such periods to run from the 1st day through the 15th 
day of each month and from the 16th day through the last day of each 
month.
    (c) Filing. (1) The original of ATF Form 5000.25, with remittance 
covering the full amount of the tax, shall be filed with the appropriate 
ATF officer not later than the 14th day after the last day of the return 
period except as provided by paragraph (d) of this section. If the due 
date falls on a Saturday, Sunday, or legal holiday, the return and 
remittance shall be due on the immediately preceding day which is not a 
Saturday, Sunday, or legal holiday, except as provided by paragraph (d) 
of this section.
    (2) The tax shall be paid in full by remittance at the time the 
return is filed, unless the proprietor is required to make remittances 
by electronic fund transfer in accordance with Sec. 26.112a.
    (3) The remittance may be in any form that is authorized to be 
accepted under the provisions of Sec. 70.61 of this chapter.
    (4) When the return and remittance are delivered by U.S. mail to the 
office of the appropriate ATF officer, the date of the official postmark 
of the U.S. Postal Service stamped on the cover in which the return and 
remittance were mailed shall be treated as the date of delivery.
    (d) Special rule for taxes due for the month of September (effective 
after December 31, 1994). (1) The second semimonthly period for the 
month of September shall be divided into two payment periods, from the 
16th day through the 26th day, and from the 27th day through the 30th 
day. The taxpayer shall file a return on Form 5000.24, and make 
remittance, for the period September 16-26, no later than September 29. 
The taxpayer shall file a return on Form 5000.24, and make remittance, 
for the period September 27-30, no later than October 14.
    (2) Taxpayment not by electronic fund transfer. In the case of taxes 
not required to be remitted by electronic fund transfer as prescribed by 
Sec. 26.112a, the second semimonthly period of September shall be 
divided into two payment periods, from the 16th day through the 25th 
day, and the 26th day through the 30th day. The taxpayer shall file a 
return on Form 5000.24, and make remittance, for the period September 
16-25, no later than September 28. The taxpayer shall file a return on 
Form 5000.24, and make remittance, for the period September 26-30, no 
later than October 14.
    (3) Amount of payment: Safe harbor rule. (i) Taxpayers are 
considered to have met the requirements of paragraph (d)(1) of this 
section, if the amount paid no later than September 29 is not less than 
11/15 (73.3 percent) of the tax liability incurred for the semimonthly 
period beginning on September 1 and ending on September 15, and if any 
underpayment of tax is paid by October 14.
    (ii) Taxpayers are considered to have met the requirements of 
paragraph

[[Page 681]]

(d)(2) of this section, if the amount paid no later than September 28 is 
not less than 2/3rds (66.7 percent) of the tax liability incurred for 
the semimonthly period beginning on September 1 and ending on September 
15, and if any underpayment of tax is paid by October 14.
    (4) Last day for payment. If the required due date for taxpayment 
for the periods September 16-25 or September 16-26 as applicable, falls 
on a Saturday or legal holiday, the return and remittance shall be due 
on the immediately preceding day. If the required due date falls on a 
Sunday, the return and remittance shall be due on the immediately 
following day.
    (e) Default. Where a taxpayer has defaulted in any payment of tax 
under this section, during the period of such default and until the 
appropriate ATF officer finds that the revenue will not be jeopardized 
by deferred payment of tax under this section, the tax shall be prepaid 
by such taxpayer in accordance with the provisions of Sec. 26.113. 
During such period, distilled spirits, wine, or beer shall not be 
released from the proprietor's bonded premises before the proprietor has 
paid the tax thereon. In the event of default, the appropriate ATF 
officer shall immediately notify the Secretary and the revenue agent at 
the premises that tax is to be prepaid until further notice, and upon a 
finding that the revenue will not be jeopardized by resumption of 
deferred payment or tax under this section, the appropriate ATF officer 
shall notify the Secretary and the revenue agent that deferred payment 
may be resumed.

(Approved by the Office of Management and Budget under control number 
1512-0497)

(Aug. 16, 1954, Ch. 736, 68A Stat. 775, (26 U.S.C. 6301); June 29, 1956, 
Ch. 462, 70 Stat. 391 (26 U.S.C. 6301))

[T.D. ATF-277, 53 FR 45268, Nov. 9, 1988, as amended by T.D. ATF-301, 55 
FR 47658, Nov. 14, 1990; T.D. ATF-365, 60 FR 33674, June 28, 1995; T.D. 
ATF-451, 66 FR 21669, May 1, 2001. Redesignated and amended by T.D. ATF-
459, 66 FR 38550, 38551, July 25, 2001]



Sec. 26.112a  Payment of tax by electronic fund transfer.

    (a) General. (1) Each taxpayer who was liable, during a calendar 
year, for a gross amount equal to or exceeding five million dollars in 
distilled spirits taxes combining tax liabilities incurred under this 
part and parts 19 and 251 of this chapter, a gross amount equal to or 
exceeding five million dollars in wine taxes combining tax liabilities 
incurred under this part and parts 240 and 251 of this chapter, or a 
gross amount equal to or exceeding five million dollars in beer taxes 
combining tax liabilities incurred under this part and parts 25 and 251 
of this chapter, shall use a commercial bank in making payment by 
electronic fund transfer (EFT) of such taxes during the succeeding 
calendar year. Payment by cash, check, or money order, of distilled 
spirits taxes, wine taxes, or beer taxes, as described in Sec. 26.112, 
is not authorized for a taxpayer who is required, by this section, to 
make remittances by EFT. For purposes of this section, the dollar amount 
of tax liability is to be summarized separately for distilled spirits 
taxes, wine taxes, or beer taxes, and is defined as the gross tax 
liability on each type of product for which taxes are paid in accordance 
with this subpart, taxable withdrawals from premises in the United 
States, and importation during the calendar year, without regard to any 
drawbacks, credits, or refunds, for all premises at which tax 
liabilities are incurred by the taxpayer. Overpayments are not taken 
into account in summarizing the gross tax liability.
    (2) For the purposes of this section, a taxpayer includes a 
controlled group of corporations, as defined in 26 U.S.C. 1563, and 
implementing regulations in 26 CFR 1.1563-1 through 1.1563-4, except 
that the words ``at least 80 percent'' shall be replaced by the words 
``more than 50 percent'' in each place it appears in subsection (a) of 
26 U.S.C. 1563, as well as in the implementing regulations. Also, the 
rules for a ``controlled group of corporations'' apply in a similar 
fashion to groups which include partnerships and/or sole 
proprietorships. If one entity maintains more than 50% control over a 
group consisting of corporations and one, or more, partnerships and/or 
sole proprietorships, all of the members of the controlled group are one 
taxpayer for the purpose of determining who is required to make 
remittances by EFT.

[[Page 682]]

    (3) A taxpayer who is required by this section to make remittances 
by EFT, shall make a separate EFT remittance and file a separate tax 
return, for each premises from which distilled spirits, wine, or beer is 
withdrawn upon determination of tax.
    (b) Requirements. (1) On or before January 10 of each calendar year, 
except for a taxpayer already remitting the tax by EFT, each taxpayer 
who was liable for a gross amount equal to or exceeding five million 
dollars in distilled spirits taxes combining tax liabilities incurred 
under this part and parts 19 and 251 of this chapter, a gross amount 
equal to or exceeding five million dollars in wine taxes combining tax 
liabilities incurred under this part and parts 240 and 251 of this 
chapter, or a gross amount equal to or exceeding five million dollars in 
beer taxes combining tax liabilities incurred under this part and parts 
245 and 251 of this chapter during the previous calendar year, shall 
notify, in writing, the appropriate ATF officer. The notice shall be an 
agreement to make remittances by EFT.
    (2) For each return filed in accordance with this part, the taxpayer 
shall direct the taxpayer's bank to make an electronic fund transfer in 
the amount of the taxpayment to the Treasury Account as provided in 
paragraph (e) of this section. The request shall be made to the bank 
early enough for the transfer to be made to the Treasury Account by no 
later than the close of business on the last day for filing the return, 
prescribed in Sec. 26.112 or Sec. 26.113. The request shall take into 
account any time limit established by the bank.
    (3) If a taxpayer was liable for less than five million dollars in 
distilled spirits taxes combining tax liabilities incurred under this 
part and parts 19 and 251 of this chapter, less than five million 
dollars in wine taxes combining tax liabilities incurred under this part 
and parts 240 and 251 of this chapter, or less than five million dollars 
in beer taxes combining tax liabilities incurred under this part and 
parts 245 and 251 of this chapter during the preceding calendar year, 
the taxpayer may choose either to continue remitting the tax as provided 
in this section or to remit the tax with the return as prescribed by 
Sec. 26.112. Upon filing the first return on which the taxpayer chooses 
to discontinue remitting the tax by EFT and to begin remitting the tax 
with the tax return, the taxpayer shall notify the appropriate ATF 
officer by attaching a written notification to the tax return, stating 
that no taxes are due by EFT, because the tax liability during the 
preceding calendar year was less than five million dollars, and that the 
remittance shall be filed with the tax return.
    (c) Remittance. (1) Each taxpayer shall show on the tax return, 
information about remitting the tax for that return by EFT and shall 
file the return with the appropriate ATF officer.
    (2) Remittances shall be considered as made when the taxpayment by 
electronic fund transfer is received by the Treasury Account. For 
purposes of this section, a taxpayment by electronic fund transfer shall 
be considered as received by the Treasury Account when it is paid to a 
Federal Reserve Bank.
    (3) When the taxpayer directs the bank to effect an electronic fund 
transfer message as required by paragraph (b)(2) of this section, any 
transfer data record furnished to the taxpayer, through normal banking 
procedures, will serve as the record of payment, and shall be retained 
as part of required records.
    (d) Failure to make a taxpayment by EFT. The taxpayer is subject to 
a penalty imposed by 26 U.S.C. 5684, 6651, or 6656, as applicable, for 
failure to make a taxpayment by EFT on or before the close of business 
on the prescribed last day for filing.
    (e) Procedure. Upon the notification required under paragraph (b)(1) 
of this section, the regional director (compliance) will issue to the 
taxpayer an ATF Procedure entitled, Payment of Tax by Electronic Fund 
Transfer. This publication outlines the procedure a taxpayer is to 
follow when preparing returns and EFT remittances in accordance with 
this part. The U.S. Customs Service will provide the taxpayer with

[[Page 683]]

instructions for preparing EFT remittances for payments to be made to 
the U.S. Customs Service.

(Approved by the Office of Management and Budget under control number 
1512-0457)

(Act of August 16, 1954, 68A Stat. 775, as amended (26 U.S.C. 6302); 
sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5061))

[T.D. ATF-185, 49 FR 37580, Sept. 25, 1984, as amended by T.D. ATF-245, 
52 FR 532, Jan. 7, 1987; T.D. ATF-251, 52 FR 19339, May 22, 1987; T.D. 
ATF-262, 52 FR 47560, Dec. 15, 1987; T.D. ATF-277, 53 FR 45268, Nov. 9, 
1988. Redesignated and amended by T.D. ATF-459, 66 FR 38550, 38551, July 
25, 2001]



Sec. 26.113  Returns for prepayment of taxes.

    (a) General. If a proprietor does not have an approved bond covering 
the deferred payment of taxes, or if such bond is in an insufficient 
penal sum, or if there is default by him in any payment of tax under 
this subpart, liquors shall not be released from bonded storage before 
the proprietor has paid the tax thereon.
    (b) Remittances. Remittances submitted to cover prepayment of taxes 
under this subpart shall be in cash, United States postal money orders, 
certified checks, or cashier's checks.
    (c) Distilled spirits. In all cases where taxes equal to the taxes 
imposed in the United States by 26 U.S.C. 5001(a)(1) are to be paid 
before distilled spirits may be released for shipment, the proprietor 
shall pay such taxes pursuant to a return on ATF Form 5000.25, as 
prescribed in Sec. 26.81.
    (d) Wine. In all cases where taxes equal to the taxes imposed in the 
United States by 26 U.S.C. 5041, are to be paid before wine may be 
withdrawn from bonded storage, the proprietor shall pay such taxes 
pursuant to a return on ATF Form 5000.25, and as prescribed in 
Sec. 26.96.
    (e) Beer. In all cases where taxes equal to the taxes imposed in the 
United States by 26 U.S.C. 5051, are to be paid before beer may be 
withdrawn from bonded storage, the brewer shall pay such taxes pursuant 
to a return on ATF Form 5000.25, and as prescribed in Sec. 26.105.
    (f) Applicable procedures. The procedures of Sec. 26.112(c) with 
respect to returns delivered by United States mail shall apply to 
returns and remittances filed under the provisions of this section.

(Approved by the Office of Management and Budget under control number 
1512-0497)

[20 FR 6077, Aug. 20, 1955]

    Editorial Note: For Federal Register citations affecting 
Sec. 26.113, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and on GPO Access.

                   Permit to Ship Liquors and Articles



Sec. 26.114  Permit to ship required.

    Before liquors and articles of Puerto Rican manufacture, upon which 
all internal revenue taxes have been paid or deferred as prescribed in 
this subpart, may be shipped to the United States, a permit to ship, 
Form 487B, must be obtained from the Secretary as provided in 
Secs. 26.115 and 26.116.

[T.D. 6551, 26 FR 1490, Feb. 22, 1961. Redesignated at 40 FR 16835, Apr. 
15, 1975, and further redesignated and amended by T.D. ATF-459, 66 FR 
38550, 38552, July 25, 2001]



Sec. 26.115  Application, Form 487B.

    Application for permit to ship to the United States liquors and 
articles of Puerto Rican manufacture on which all taxes have been paid 
or deferred as prescribed in this subpart shall be made by the shipper 
on Form 487B, in sextuple. Each Form 487B will be given a serial number, 
by the applicant, beginning with ``1'' for the first day of January of 
each year and running consecutively thereafter to December 31, 
inclusive. This serial number will be prefixed by the last two digits of 
the calendar year, e.g. ``61-1.'' All copies of the form shall be 
delivered to the revenue agent for execution of his certification 
thereon and forwarding of all copies to the Secretary within sufficient 
time to allow for the issuance of the permit and customs inspection as 
provided in Sec. 26.116.

[T.D. 6551, 26 FR 1490, Feb. 22, 1961. Redesignated at 40 FR 16835, Apr. 
15, 1975, and further redesignated and amended by T.D. ATF-459, 66 FR 
38550, 38552, July 25, 2001]

[[Page 684]]



Sec. 26.116  Issuance of permit, Form 487B, and customs inspection.

    If the application has been properly executed and the Secretary, or 
his delegate, finds that all internal revenue taxes imposed under 26 
U.S.C. 7652(a), have been computed under the provisions of this part and 
have been paid or, pursuant to a sufficient bond, have been deferred 
under the applicable provisions of this part, he will execute his permit 
on all copies thereof, retain one copy of the form, return two copies to 
the shipper, and send three copies to the district director of customs 
in Puerto Rico. The shipper will submit the two copies of the Form 487B 
to the district director of customs at least six hours prior to the 
intended lading of the merchandise. The district director of customs 
will then inspect the merchandise covered by the Form 487B after which 
he will execute his certificate on each copy of Form 487B indicating all 
exceptions. If discrepancies appear indicating differences between the 
quantity covered by Form 487B and the quantity actually contained in the 
shipment or the improper tax payment of the merchandise, he will 
withhold release of the shipment and notify the Secretary of such 
discrepancies. Thereupon, such discrepancies must be corrected in the 
shipping documents and additional tax paid, if required, prior to 
release of the merchandise. The district director of customs, upon 
release of the merchandise for shipment, will retain one copy of the 
Form 487B, return two copies to the shipper, and send two copies to the 
district director of customs at the port of arrival in the United 
States, one of which should be mailed and the other dispatched on the 
vessel concerned for the guidance of the appropriate ATF officer who 
will handle the cargo. After the shipment has been cleared by the 
district director of customs in Puerto Rico, the shipper shall retain 
one copy of the Form 487B and send one copy thereof, with other shipping 
documents, to the district director of customs at the port of arrival.

[20 FR 6077, Aug. 20, 1955, as amended by T.D. 7006, 34 FR 2249, Feb. 
15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975]

    Editorial Note: For Federal Register citations affecting 
Sec. 26.116, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and on GPO Access.

                      Procedure at Port of Arrival



Sec. 26.117  Action by carrier.

    The carrier of the merchandise specified on the Form 487B shall, at 
the time of unlading at the port of arrival in the United States, 
segregate and arrange the cases of liquors or articles for convenient 
customs examination and will assume any expense incurred in connection 
therewith.



Sec. 26.118  Inspection by district director of customs at port of arrival.

    On receipt of properly executed Form 487B from the shipper and the 
copies of Form 487B from the district director of customs in Puerto 
Rico, the district director of customs at the port of arrival shall 
inspect the merchandise to determine whether the quantity specified on 
the Form 487B is contained in the shipment. He will then execute his 
certificate on each copy of Form 487B received and indicate thereon any 
exceptions found at the time of discharge. The statement of exceptions 
should show the serial number of each case or other shipping container 
which sustained a loss, the quantity of liquor reported shipped in such 
container and the quantity lost. Losses occurring as the result of 
missing bottles, cases, or other containers should be listed separately 
from empty containers and containers which have sustained losses due to 
breakage. Where the statement is made on the basis of bottles missing or 
lost due to other cause, the number and size of bottles lost should be 
shown. If the district director of customs finds that the full amount of 
the taxes due has not been paid, he will require the difference due to 
be paid prior to release of the merchandise in accordance with the 
applicable provisions of this part. When the proper inspection of the 
merchandise has been effected, and any additional taxes

[[Page 685]]

found to be due on the liquors or articles collected, the merchandise 
will be released.

[20 FR 6077, Aug. 20, 1955, as amended by T.D. 7006, 34 FR 2249, Feb. 
15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975. T.D. ATF-451, 66 
FR 21669, May 1, 2001, and further redesignated by T.D. ATF-459, 66 FR 
38550, July 25, 2001]



Sec. 26.119  Disposition of forms by district director of customs.

    Two copies of the Form 487B will be forwarded to the appropriate ATF 
officer, and one copy of the form will be retained by the district 
director of customs and be available for inspection by appropriate ATF 
officers.

[ T.D. ATF-451, 66 FR 21669, May 1, 2001. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]



  Subpart F--Liquors and Articles Purchased by Tourists in Puerto Rico



Sec. 26.125  Taxable.

    When liquors and articles subject to tax are brought into the United 
States by tourists, the tax thereon shall be paid as provided in this 
subpart.



Sec. 26.126  Taxpayment in Puerto Rico.

    Liquors upon which all Federal internal revenue taxes have been paid 
in Puerto Rico may be brought into the United States for personal 
consumption without payment of additional taxes. When distilled spirits, 
wines, or beer are purchased by a tourist for consumption in the United 
States, the internal revenue tax due may be paid to the appropriate ATF 
officer, and an ATF receipt obtained, or the tax may be paid to the U.S. 
Customs authorities, who will issue a customs receipt. The tax on 
articles purchased by tourists may be paid in the same manner. The 
receipt received from the appropriate ATF officer or from the customs 
officer shall be presented, as required, as evidence that the tax has 
been paid.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended, 1358, as amended 
(26 U.S.C. 5061, 5205))

[T.D. ATF-206, 50 FR 23954, June 7, 1985, as amended by T.D. ATF-251, 52 
FR 19339, May 22, 1987. Redesignated by T.D. ATF-459, 66 FR 38550, July 
25, 2001]



Sec. 26.128  Taxpayment at port of arrival.

    If the internal revenue tax on liquors and articles is not paid in 
Puerto Rico, it shall be paid by the tourist at the port of arrival 
prior to release of the liquors or articles from customs custody. The 
tax may be paid to an appropriate ATF officer, and an ATF receipt 
obtained, or the tax may be paid to the director of customs, who will 
issue a customs receipt. If payment is to be made to an appropriate ATF 
officer, the director of customs will notify the appropriate ATF officer 
of the amount of tax due. On payment of the tax to the director of 
customs, or on submission of the ATF receipt for the tax, the director 
of customs will release the liquors or articles.

[T.D. ATF-251, 52 FR 19339, May 22, 1987, as amended by T.D. ATF-451, 66 
FR 21669, May 1, 2001. Redesignated by T.D. ATF-459, 66 FR 38550, July 
25, 2001]



       Subpart G--Closures for Distilled Spirits From Puerto Rico



Sec. 26.135  Containers of distilled spirits to bear closures.

    Containers of 1 gallon (3.785 liters) or less of distilled spirits, 
upon which all Federal internal revenue taxes have been paid or deferred 
in Puerto Rico under provisions of this part, shall have closures or 
other devices affixed in accordance with the provisions of this part, 
prior to shipment to the United States.

(Sec. 454, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 5301))

[T.D. ATF-206, 50 FR 23954, June 7, 1985. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]



Sec. 26.136  Affixing closures.

    Closures or other devices shall be securely affixed to containers 
having capacity of 1 gallon (3.785 liters) or less so

[[Page 686]]

as to leave a portion remaining on the container when it is opened. In 
addition, the closures or other devices shall be constructed in such a 
manner as to require that they be broken to gain access to the contents 
of the containers.

(Sec. 454, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 5301))

[T.D. ATF-206, 50 FR 23954, June 7, 1985. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]



       Subpart H--Records and Reports of Liquors From Puerto Rico



Sec. 26.163  General requirements.

    Except as provided in Sec. 26.164, every person, other than a 
tourist, bringing liquor into the United States from Puerto Rico shall 
keep records and render reports of the physical receipt and disposition 
of such liquors in accordance with part 194 (``Liquor Dealers'') of this 
chapter: Provided, That if the person who is responsible for release of 
the liquors from customs custody does not take physical possession of 
the liquors, he shall keep commercial records reflecting such release; 
such records shall identify the kind and quantity of the liquors 
released, the name and address of the person receiving the liquors from 
customs custody, and shall be filed chronologically by release dates. 
Records and reports will not be required under this part with respect of 
liquors while in customs custody.

(Approved by the Office of Management and Budget under control number 
1512-0352)

(72 Stat. 1342, 1395; 26 U.S.C. 5114, 5555)

[T.D. ATF-2, 37 FR 22736, Oct. 21, 1972. Redesignated at 40 FR 16835, 
Apr. 15, 1975, and amended by T.D. ATF-172, 49 FR 14943, Apr. 16, 1984. 
Redesignated and amended by T.D. ATF-459, 66 FR 38550, 38552, July 25, 
2001]



Sec. 26.164  Proprietors of taxpaid premises.

    Transactions involving the bringing of liquors into the United 
States from Puerto Rico by proprietors of distilled spirits plants in 
the United States qualified under the provisions of this chapter shall 
be recorded and reported in accordance with the regulations governing 
the operations of such premises in the United States.

[T.D. 6402, 24 FR 6090, July 30, 1959. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-198, 50 FR 8551, Mar. 1, 1985. 
Redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001]



Sec. 26.164a  Package gauge record.

    When required in this part, with respect to Puerto Rican spirits, a 
package gauge record shall be prepared to show:
    (a) The date prepared;
    (b) The related transaction form and its serial number;
    (c) The producer or rectifier (processor) of the spirits, and his 
name, address, and plant registration number; and
    (d) For each package, the:
    (1) Package identification or serial number;
    (2) Kind of spirits;
    (3) Gross weight;
    (4) Tare;
    (5) Net weight;
    (6) Proof gallons; and
    (7) Proof.

(Approved by the Office of Management and Budget under control number 
1512-0250)

[T.D. ATF-198, 50 FR 8551, Mar. 1, 1985. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]



Sec. 26.165  Certificate of effective tax rate computation.

    (a) Where distilled spirits of Puerto Rican manufacture which 
contain eligible wine or eligible flavors are to be tax determined for 
shipment to the United States or are to be shipped to the United States 
without payment of tax for transfer from customs custody to ATF bond, 
the consignor shall prepare a certificate of effective tax rate 
computation showing the:
    (1) The serial number of ATF Form 5110.31 or 5110.51;
    (2) Elements necessary to compute the effective tax rate in 
accordance with Sec. 26.79a as follows--
    (i) Proof gallons of distilled spirits (exclusive of distilled 
spirits derived from eligible flavors);
    (ii) Wine gallons of each eligible wine and the percentage of 
alcohol by volume of each; and

[[Page 687]]

    (iii) Proof gallons of distilled spirits derived from each eligible 
flavor;
    (3) Date of the statement of eligibility for each eligible flavor 
(see Sec. 26.50a).
    (4) Effective tax rate applied to the product.
    (5) Signature and title of the consignor.
    (b) If the spirits are tax determined for shipment to the United 
States, the proprietor shall retain the certificate for a period of not 
less than three years after the last tax determination to which the 
certificate is applicable. If the spirits are shipped to the United 
States for transfer from Customs custody to the bonded premises of a 
distilled spirits plant, the proprietor shall forward the original to 
the consignee distilled spirits plant in the United States and retain a 
copy for his files.

(Approved by Office of Management and Budget under control number 1512-
0203)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1366, as amended (26 U.S.C. 5232); 
Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010))

[T.D. ATF-297, 55 FR 18067, Apr. 30, 1990. Redesignated and amended by 
T.D. ATF-459, 66 FR 38550, 38552, July 25, 2001]



  Subpart I--Claims for Drawback on Eligible Articles From Puerto Rico

    Source: T.D. ATF-263, 52 FR 46594, Dec. 9, 1987, unless otherwise 
noted. Redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001.



Sec. 26.170  Drawback of tax.

    Any person who brings eligible articles into the United States from 
Puerto Rico may claim drawback of the distilled spirits excise taxes 
paid on such articles as provided in this subpart.



Sec. 26.171  Special tax.

    Any person filing claim for drawback of tax on eligible articles 
brought into the United States from Puerto Rico shall pay special tax as 
required by 26 U.S.C. 5131. For purposes of special tax, subparts C and 
D of part 17 of this chapter shall apply as if the use and tax 
determination occurred in the United States at the time the article was 
brought into the United States and, each business location from which 
entry of eligible articles is caused or effected shall be treated as a 
place of manufacture. If special tax is paid for any such business 
location under part 197 of this chapter, as a place where nonbeverage 
products are manufactured for purposes of drawback, then no additional 
special tax need be paid for that location under this section.

[T.D. ATF-263, 52 FR 46594, Dec. 9, 1987, as amended by T.D. ATF-271, 53 
FR 17559, May 17, 1988; T.D. ATF-379, 61 FR 31427, June 20, 1996. 
Redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001]



Sec. 26.172  Bonds.

    (a) General. Persons bringing eligible articles into the United 
States from Puerto Rico and intending to file monthly claims for 
drawback under the provisions of this subpart shall obtain a bond on 
Form 5154.3. When the limit of liability under a bond given in less than 
the maximum amount has been reached, further drawback on monthly claims 
may be suspended until a strengthening or superseding bond in a 
sufficient amount has been furnished. For provisions relating to bonding 
requirements, subpart E of part 17 of this chapter is incorporated in 
this part.
    (b) Approval required. No person bringing eligible articles into the 
United States from Puerto Rico may file monthly claims for drawback 
under the provisions of this subpart until a bond on ATF Form 5154.3 has 
been approved.

[T.D. ATF-379, 61 FR 31427, June 20, 1996, as amended by T.D. ATF-451, 
66 FR 21669, May 1, 2001. Redesignated by T.D. ATF-459, 66 FR 38550, 
July 25, 2001]



Sec. 26.173  Claims for drawback.

    (a) General. Persons bringing eligible articles into the United 
States from Puerto Rico must file claim for drawback on ATF Form 2635 
(5620.8). Upon finding that the claimant has satisfied the requirements 
of this subpart, the appropriate ATF officer must allow the drawback of 
taxes at a rate of $1 less than the lesser of $10.50 a proof gallon or 
the rate specified in 26 U.S.C. 5001(a).
    (b) Information on claims. The claim must set forth the following:
    (1) That the special tax has been paid;

[[Page 688]]

    (2) That the eligible articles brought into the United States on 
which drawback is claimed are fully tax paid or tax-determined;
    (3) That the eligible articles on which drawback is claimed are 
nonbeverage products; and
    (4) That the eligible articles were manufactured in Puerto Rico in 
compliance with an approved formula in accordance with Sec. 26.51.
    (c) Supporting data. Each claim shall be accompanied by supporting 
data as specified in this paragraph. ATF Form 5154.2, Supporting Data 
for Nonbeverage Drawback Claims, may be used, or the claimant may use 
any suitable format that provides the following information:
    (1) The control number of the Special Tax Stamp and the tax year for 
which issued;
    (2) A description of each eligible article as follows:
    (i) Name and type of each product;
    (ii) Name and address of the manufacturer of each product;
    (iii) Formula number;
    (iv) Alcohol content of each product;
    (v) Quantity of each product;
    (vi) Proof gallons of distilled spirits contained in each product;
    (vii) Date of entry of the eligible product into the United States, 
and
    (viii) The serial number of each ATF Form 487-B (5170.7) covering 
such articles shipped to the United States.
    (d) Date of filing claim. Quarterly claims for drawback shall be 
filed within the 6 months next succeeding the quarter in which the 
eligible products covered by the claim were brought into the United 
States. Monthly claims for drawback may be filed at any time after the 
end of the month in which the eligible products covered by the claim 
were brought into the United States, but must be filed not later than 
the close of the sixth month succeeding the quarter in which the 
eligible products were brought into the United States.

(Approved by the Office of Management and Budget under control number 
1512-0494)

[T.D. ATF-263, 52 FR 46594, Dec. 9, 1987, as amended by T.D. ATF-271, 53 
FR 17559, May 17, 1988; T.D. ATF-379, 61 FR 31427, June 20, 1996; T.D. 
ATF-451, 66 FR 21669, May 1, 2001. Redesignated and amended by T.D. ATF-
459, 66 FR 38550, 38552, July 25, 2001]



Sec. 26.174  Records.

    (a) General. Every person intending to file claim for drawback on 
eligible articles brought into the United States from Puerto Rico shall 
keep permanent records of the data elements required by this section. 
Such records shall be maintained at the business premises for which the 
claim is filed and shall be available for inspection by any appropriate 
ATF officer during business hours.
    (b) Details of records. Each person intending to claim drawback on 
eligible articles brought into the United States shall maintain 
permanent records showing the following data:
    (1) The name, description, quantity, and formula number of each such 
article.
    (2) The alcohol content of each such article.
    (3) Name and address of the manufacturer and shipper, and date of 
entry into the United States.
    (4) Evidence of taxpayment of distilled spirits in accordance with 
paragraph (c) of this section.
    (c) Evidence of taxpayment of distilled spirits. All shipments of 
eligible articles from Puerto Rico to the United States shall be 
supported by the vendor's commercial invoice which must bear a 
certification as to taxpayment by the person who determined or paid the 
tax, and include the following information:
    (1) The name and address of vendor;
    (2) The number of the applicable invoice;
    (3) The serial or package identification number of the container;
    (4) Name, type, and formula number of the product;
    (5) The kind of spirits, proof, and proof gallons in the container; 
and
    (6) The serial number of each Form 487-B (5170.7) covering such 
articles shipped to the United States.
    (d) Form of record. No particular form of record is prescribed, but 
the data required to be shown shall be readily ascertainable from the 
records kept by the drawback claimant.
    (e) Retention of records. Each drawback claimant shall retain for a 
period of not less than three years all records required by this 
subpart, all commercial invoices or shipping documents,

[[Page 689]]

and all bills of lading received evidencing receipt and tax 
determination of the spirits. In addition, a copy of each approved 
formula returned to the manufacturer of eligible articles shall be 
retained for not less than three years from the date he files his last 
claim for drawback under the formula. The records, forms, and formulas 
shall be readily available during regular business hours for examination 
by appropriate ATF officers.

(Approved by the Office of Management and Budget under control number 
1512-0494)

[T.D. ATF-263, 52 FR 46594, Dec. 9, 1987, as amended by T.D. ATF-451, 66 
FR 21669, May 1, 2001. Redesignated by T.D. ATF-459, 66 FR 38550, July 
25, 2001]



    Subpart Ia--Shipment of Denatured Spirits and Products Made With 
         Denatured Spirits to the United States From Puerto Rico

    Source: T.D. ATF-199, 50 FR 9198, Mar. 1, 1985, unless otherwise 
noted. Redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001.



Sec. 26.191  Notice of shipment.

    At least 5 business days before shipment, each proprietor of a 
distilled spirits plant in Puerto Rico who intends to ship denatured 
spirits to the United States in containers larger than 5 gallons, and 
each person in Puerto Rico who intends to ship products made with 
denatured spirits to the United States in containers larger than 5 
gallons shall notify the chemist of the Treasury of Puerto Rico of the 
intent to ship.

(Approved by the Office of Management and Budget under control number 
1512-0336)

[T.D. ATF-199, 50 FR 9198, Mar. 1, 1985, T.D. ATF-199, 50 FR 20099, May 
14, 1985. Redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001]



Sec. 26.192  Samples and analysis.

    The chemist of the Treasury of Puerto Rico may take samples of the 
product to be shipped in order to determine that it is eligible for tax-
free status.



Sec. 26.193  Notification of tax liability.

    (a) If the chemist of the Treasury of Puerto Rico finds that 
denatured spirits or products made with denatured spirits are not 
eligible for tax-free shipment, before the shipment is made, the chemist 
will immediately notify the shipper that the article is subject to tax, 
payable in accordance with Secs. 26.107 through 26.110.
    (b) If the chemist of the Treasury of Puerto Rico finds that 
denatured spirits or products made with denatured spirits are not 
eligible for tax-free shipment, after the shipment is made, the chemist 
will immediately notify the shipper that the tax shall be paid 
immediately in accordance with Sec. 26.113. The chemist will also notify 
the appropriate ATF officer.

[T.D. ATF-199, 50 FR 9198, Mar. 1, 1985, as amended by T.D. ATF-451, 66 
FR 21670, May 1, 2001. Redesignated and amended by T.D. ATF-459, 66 FR 
38550, 38552, July 25, 2001]



Sec. 26.194  Detention of articles.

    (a) Upon receiving a notification in accordance with Sec. 26.193(b), 
appropriate ATF officer will detain the article in accordance with part 
20 of this chapter or seize the article in accordance with part 72 of 
this chapter.
    (b) After the shipper furnishes proof that the tax was paid in 
accordance with Sec. 26.113, the appropriate ATF officer will release 
the article to the consignee.

[T.D. ATF-199, 50 FR 9198, Mar. 1, 1985. Redesignated and amended by 
T.D. ATF-459, 66 FR 38550, 38552, July 25, 2001]



Subpart Ib--Shipment of Bulk Distilled Spirits From Puerto Rico, Without 
 Payment of Tax, for Transfer From Customs Custody to Internal Revenue 
                                  Bond

    Authority: Sec. 3, Pub. L. 90-630, 82 Stat. 1328, as amended (26 
U.S.C. 5232).

    Source: T.D. ATF-62, 44 FR 71714, Dec. 11, 1979, unless otherwise 
noted. Redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001.



Sec. 26.196  General.

    Under the provisions of this subpart and Sec. 26.86, distilled 
spirits brought into the United States from Puerto Rico in bulk 
containers may be withdrawn by the proprietor of a distilled spirits

[[Page 690]]

plant from customs custody and transferred in such bulk containers or by 
pipeline to the bonded premises of his plant, without payment of the 
internal revenue tax, if any, imposed on such spirits by 26 U.S.C. 7652. 
Such spirits so withdrawn and transferred to a distilled spirits plant 
(a) may be redistilled or denatured only if of 185 degrees or more of 
proof; and (b) may be withdrawn from internal revenue bond for any 
purpose authorized by 26 U.S.C. chapter 51, in the same manner as 
domestic distilled spirits. Spirits transferred from customs custody to 
the bonded premises of a distilled spirits plant under the provisions of 
this subpart shall be received and stored thereat, and withdrawn or 
transferred therefrom, subject to applicable provisions of part 19 of 
this chapter. The person operating the bonded premises of the distilled 
spirits plant to which spirits are transferred under the provisions of 
this subpart shall become liable for the tax on distilled spirits 
withdrawn from customs custody under 26 U.S.C. 5232, upon release of the 
spirits from customs custody and the person bringing the spirits into 
the United States shall thereupon be relieved of liability for the tax.

[ T.D. ATF-62, 44 FR 71714, Dec. 11, 1979. Redesignated and amended by 
T.D. ATF-459, 66 FR 38550, 38552, July 25, 2001]



Sec. 26.197  Furnishing formula to consignee.

    Prior to the first shipment, the person shipping the spirits to the 
United States shall furnish a reproduced copy of the approved formula 
covering such spirits to the appropriate ATF officer, and to the 
proprietor of each distilled spirits plant to receive the spirits.

(Approved by the Office of Management and Budget under control number 
1512-0204)

[T.D. ATF-198, 50 FR 8551, Mar. 1, 1985, as amended by T.D. ATF-451, 66 
FR 21670, May 1, 2001. Redesignated by T.D. ATF-459, 66 FR 38550, July 
25, 2001]



Sec. 26.198  [Reserved]



Sec. 26.199  Application and permit to ship, ATF Form 5110.31.

    Before spirits of Puerto Rican manufacture may be shipped to the 
United States without payment of tax for withdrawal from customs custody 
and transfer to internal revenue bond, an application by the consignor 
on ATF Form 5110.31 for permit to ship must be approved by the 
Secretary. All copies of the application (original and five copies) 
shall be delivered to the revenue agent.



Sec. 26.199a  Action by revenue agent.

    (a) Gauge. Puerto Rican spirits to be withdrawn for shipment to the 
United States as provided in this subpart shall be gauged by the revenue 
agent prior to withdrawal from the consignor premises. The revenue agent 
shall record the quantity and proof of the spirits gauged on ATF Form 
5110.31. If the spirits are in packages, the revenue agent shall prepare 
in sextuplicate a package gauge record according to Sec. 26.164a, attach 
the package gauge record to ATF Form 5110.31, and dispose of the form 
(and any attachments) according to the instructions thereon.
    (b) Sealing bulk conveyances. When a shipment is made in a tank, 
van, or other bulk conveyance (other than barrels, drums, or similar 
packages that are not containerized), all openings affording access to 
the spirits shall be sealed by the Puerto Rican revenue agent is such 
manner as will prevent unauthorized removal of spirits without 
detection.

(Approved by the Office of Management and Budget under control number 
1512-0250)

[T.D. ATF-198, 50 FR 8551, Mar. 1, 1985. Redesignated and amended by 
T.D. ATF-459, 66 FR 38550, 38551, July 25, 2001]



Sec. 26.199b  Issuance and disposition of permit.

    When the Secretary receives an application on ATF Form 5110.31 and 
he

[[Page 691]]

finds that the applicant is in compliance with law and regulations, he 
will execute the permit to ship on all copies of ATF Form 5110.31, 
retain one copy, and any accompanying package gauge record as provided 
in Sec. 26.164a, and return the remaining copies to the consignor who 
shall distribute them in accordance with the instructions on ATF Form 
5110.31.

(Approved by the Office of Management and Budget under control number 
1512-0250)

[T.D. ATF-198, 50 FR 8552, Mar. 1, 1985. Redesignated and amended by 
T.D. ATF-459, 66 FR 38550, 38551, July 25, 2001]



Sec. 26.199c  Action by carrier.

    The carrier of the spirits specified on the ATF Form 5110.31 shall, 
at the time of unlading at the port of arrival in the United States, 
segregate and arrange the containers of spirits of convenient customs 
examination and shall assume any expense incurred in connection 
therewith.



Sec. 26.199d  Customs inspection and release.

    On receipt of a properly executed ATF Form 5110.31 from the 
consignor, the customs officer at the port of arrival in the United 
States shall inspect the corresponding shipment of spirits:
    (a) If a shipment is in a bulk conveyance, and:
    (1) The seals are intact, he shall release the shipment; or
    (2) If the seals are broken, he shall, before release of the 
spirits, affix customs seals.
    (b) If a shipment in packages does not arrive in a sealed 
conveyance, the packages shall be inspected, and if it appears that any 
package has sustained a loss, the package shall be weighed and its new 
gross weight shall be entered in contrasting color on the package gauge 
record attached to the related ATF Form 5110.31. The serial numbers of 
any seals affixed by the customs officers shall be reported on ATF Form 
5110.31 under remarks with an explanation and description of any 
evidence of loss. After completing his inspection, the customs officer 
shall execute his certificate on each copy of ATF Form 5110.31 and show 
thereon any exceptions found at the time of his release for transfer of 
the spirits to internal revenue bond. Missing packages should be 
reported separately from packages which have sustained losses. The 
customs officer shall then release the spirits to the consignee's 
representative and distribute all forms in accordance with the 
instructions on ATF Form 5110.31.

(Approved by the Office of Management and Budget under control number 
1512-0250)

[T.D. ATF-198, 50 FR 8552, Mar. 1, 1985. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]



Sec. 26.199e  [Reserved]



Sec. 26.199f  Consignee premises.

    (a) General. When Puerto Rican spirits are received from customs 
custody under the provisions of this subpart, the consignee proprietor 
shall execute the certificate of receipt on ATF Form 5110.31 and examine 
all containers for evidence of loss. If it appears that spirits were 
lost by theft or unusual event, the proprietor shall determine the 
quantity of spirits lost and report the loss according to 27 CFR 19.562.
    (b) Packages. Packages shall be received on bonded premises by the 
proprietor on the basis of the most recent official gauge.
    (c) Distribution of forms. The proprietor shall keep and send copies 
according the instructions on the form.

(Approved by the Office of Management and Budget under control numbers 
1512-0200 and 1512-0250)

[T.D. ATF-198, 50 FR 8552, Mar. 1, 1985, as amended by T.D. ATF-451, 66 
FR 21670, May 1, 2001. Redesignated by T.D. ATF-459, 66 FR 38550, July 
25, 2001]



   Subpart J--Products Coming Into the United States From the Virgin 
                                 Islands



Sec. 26.200  Taxable status.

    (a) Liquors coming into the United States from the Virgin Islands, 
except as provided in Sec. 26.201, are subject to a tax equal to the 
internal revenue tax imposed upon the production in the United States of 
like liquors. Articles coming into the United States from the Virgin 
Islands, except as provided in

[[Page 692]]

Sec. 26.201, are subject to tax on the liquors contained therein at the 
rates imposed in the United States on like liquors of domestic 
production.
    (b) The excise taxes collected on distilled spirits and articles 
containing distilled spirits shall be deposited into the Treasury of the 
Virgin Islands only if at least 92 percent of the alcoholic content of 
such product is rum. The amount deposited into the Treasury of the 
Virgin Islands shall not exceed the lesser of $10.50, or the rate 
imposed by 26 U.S.C. 5001(a)(1) (including adjustments to the effective 
tax rate under 26 U.S.C. 5010), on each proof gallon of such distilled 
spirits or article containing distilled spirits coming into the United 
States. Such excise tax payments to the Treasury of the Virgin Islands 
will be reduced by one percent and the estimated amount of refunds or 
credits, and may be further reduced by certain amounts deposited to the 
U.S. Treasury as miscellaneous receipts. The moneys so transferred and 
paid over shall constitute a separate fund in the Treasury of the Virgin 
Islands, and may be expended as the Virgin Islands legislature may 
determine.
    (c) Except for products described in 26 U.S.C. 7652(c), no excise 
taxes shall be deposited into the Treasury of the Virgin Islands if an 
excise tax subsidy is provided by the Virgin Islands that is of a kind 
different from, or in an amount per value or volume of production 
greater than, any subsidy offered by the Virgin Islands to industries 
manufacturing products not subject to Federal excise tax.

(Sec. 2682, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 7652))

[T.D. ATF-175, 49 FR 20804, May 16, 1984, as amended by T.D. ATF-206, 50 
FR 15888, Apr. 23, 1985. Redesignated and amended by T.D. ATF-459, 66 FR 
38550, 38552, July 25, 2001]



Sec. 26.201  Products exempt from tax.

    (a) General. Industrial spirits, denatured spirits, and products 
made with denatured spirits in the Virgin Islands may be brought into 
the United States without incurring tax liability imposed by 26 U.S.C. 
5001 or 7652.
    (b) Industrial spirits. A distiller of industrial spirits who 
qualifies under regulations issued by the Governor of the Virgin Islands 
may ship industrial spirits to a tax-free alcohol user in the United 
States who holds a permit under part 22 of this chapter. Shipments shall 
be made in accordance with the requirements of subpart O of this part.
    (c) Denatured spirits. A distiller who qualifies under the 
regulations issued by the Governor of the Virgin Islands and who 
denatures spirits in accordance with part 21 of this chapter may ship 
(1) completely denatured alcohol to anyone in the United States, and/or 
(2) specially denatured spirits to a dealer or user of specially 
denatured spirits in the United States or Puerto Rico who holds a permit 
under part 20 of this chapter. Shipments shall be made in accordance 
with the requirements of subpart O of this part.
    (d) Products made with denatured spirits. A person in the Virgin 
Islands who manufactures products with completely denatured alcohol or 
specially denatured spirits in accordance with the requirements of part 
20 of this chapter and regulations issued by the Governor of the Virgin 
Islands may ship those products to the United States in accordance with 
the requirements of subpart O of this part.

[T.D. ATF-199, 50 FR 9199, Mar. 6, 1985. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]



Sec. 26.201a  Production in the Virgin Islands for tax-free shipment to the United States.

    (a) Authority of the Governor to issue regulations. The Governor of 
the Virgin Islands, or his duly authorized agents, are authorized to 
issue or adopt such regulations (and to approve such bonds, and to 
issue, suspend, or revoke such permits, as may be required by such 
regulations) as are necessary to insure that:
    (1) Industrial spirits produced or manufactured in the Virgin 
Islands and shipped to the United States free of tax for the purposes 
authorized in 26 U.S.C. 5214(a) (2) and (3);
    (2) Denatured spirits manufactured in the Virgin Islands for 
shipment to the United States free of tax, and
    (3) Products manufactured in the Virgin Islands with denatured 
spirits, for shipment to the United States free of

[[Page 693]]

tax, conform in all respects to the requirements of law and this chapter 
imposed on like products of domestic manufacture.
    (b) Law and regulations applicable. Regulations having been issued 
by the Governor of the Virgin Islands and concurred in by the Secretary 
of the Treasury of the United States to govern the production, 
warehousing, and denaturation of spirits and the use of denatured 
spirits in the manufacture of products for shipment to the United States 
free of tax, such regulations are applicable in the Virgin Islands and 
the Virgin Islands are hereby exempted from
    (1) All provisions of 26 U.S.C. chapter 51, with the exception of 26 
U.S.C. 5314(b) and 5687; and
    (2) The provisions of this chapter in respect of the production, 
bonded warehousing, denaturation, and withdrawal of distilled spirits 
and the use of denatured spirits in the United States:

Provided, That such exemption shall be effective only to the extent that 
any amendments or revisions of the regulations issued by the Governor of 
the Virgin Islands, or his duly authorized agents, are concurred in by 
the Secretary of the Treasury of the United States or his delegate. 
Otherwise, all provisions of law as provided in 26 U.S.C. 5314(b), and 
the provisions of this chapter in respect of the production, bonded 
warehousing, denaturation, and withdrawal from bond of distilled spirits 
and denatured spirits and the use of denatured spirits in the 
manufacture of products shall extend to and apply in the Virgin Islands 
(i) in respect of the production, bonded warehousing, and withdrawal of 
spirits for shipment to the United States free of tax for the purposes 
authorized in 26 U.S.C. 5214(a) (2) and (3), and (ii) in respect of the 
production, bonded warehousing, and denaturation of spirits, and to the 
withdrawal and use of denatured spirits, where the denatured spirits or 
products containing denatured spirits are to be shipped to the United 
States free of tax.

[T.D. 6402, 24 FR 6090, July 30, 1959. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55853, Sept. 28, 1979; T.D. 
ATF-198, 50 FR 8552, Mar. 1, 1985. Redesignated by T.D. ATF-459, 66 FR 
38550, July 25, 2001]



Sec. 26.201b  [Reserved]



Sec. 26.201c  Shipments of bulk distilled spirits to the United States without payment of tax.

    Bulk distilled spirits may be brought into the United States from 
the Virgin Islands without payment of tax for transfer from customs 
custody to the bonded premises of a distilled spirits plant qualified 
under part 19 of this chapter. Such shipments are subject to the 
provisions of subpart Oa.

[T.D. ATF-62, 44 FR 71715, Dec. 11, 1979. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]



Sec. 26.202  Requirements of the Federal Alcohol Administration Act.

    Every person, except an agency of a State or a political subdivision 
thereof or any officer or employee of any such agency, bringing liquors 
into the United States from the Virgin Islands for nonindustrial use 
must obtain an importer's basic permit therefor and file with the 
district director of customs at the port of entry a certified or 
photostatic copy thereof, and every person and any agency of a State or 
political subdivision thereof or any officer or employee of such agency, 
bringing liquors into the United States from the Virgin Islands for 
nonindustrial use must file with the district director of customs at the 
port of entry a certificate of label approval, in accordance with the 
requirements of the Federal Alcohol Administration Act and regulations 
issued pursuant thereto. Tourists bringing liquors into the United 
States for personal or other noncommercial use are not subject to the 
provisions of the Federal Alcohol Administration Act or regulations 
issued

[[Page 694]]

pursuant thereto. (Parts 1, 4, 5, and 7 of this chapter)

(Secs. 3, 5, 49 Stat. 978, as amended, 981, as amended; 27 U.S.C. 203, 
205)

[20 FR 6077, Aug. 20, 1955, as amended by T.D. 7006, 34 FR 2249, Feb. 
15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975]

    Editorial Note: For Federal Register citations affecting 
Sec. 26.202, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and on GPO Access.



Sec. 26.203  Containers of 1 gallon (3.785 liters) or less.

    Containers of distilled spirits brought into the United States from 
the Virgin Islands, having a capacity of not more than 1 gallon (3.785 
liters), shall conform to the requirements of subpart P of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1374 (26 U.S.C. 5301))

[T.D. ATF-34, 41 FR 46864, Oct. 26, 1976. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]



Sec. 26.203a  Containers in excess of 1 gallon (3.785 liters).

    Containers of distilled spirits brought into the United States from 
the Virgin Islands, having a capacity in excess of 1 gallon (3.785 
liters), are required to be marked in accordance with customs 
regulations (19 CFR chapter I).

[T.D. 6695, 28 FR 12936, Dec. 5, 1963. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-34, 41 FR 46864, Oct. 26, 1976; T.D. 
ATF-206, 50 FR 23955, June 7, 1985. Redesignated by T.D. ATF-459, 66 FR 
38550, July 25, 2001]



Sec. 26.204  Regauge.

    Distilled spirits withdrawn from insular bonded warehouses for 
shipment to the United States may be gauged at the time of withdrawal by 
an insular gauger. When such gauges are made, a record of gauge shall be 
prepared by the insular gauger showing the name of the distiller; and 
the serial number, the proof of the spirits, and the wine and proof 
gallon contents of each package gauged. The report of gauge shall be 
attached to the certificate prescribed in Sec. 26.205.

(Approved by the Office of Management and Budget under control number 
1512-0250)

[T.D. ATF-198, 50 FR 8552, Mar. 1 1985. Redesignated and amended by T.D. 
ATF-459, 66 FR 38550, 38552, July 25, 2001]



Sec. 26.204a  Verification of eligible wines and eligible flavors.

    (a) Any person who, after December 1, 1990, brings into the United 
States from the Virgin Islands any distilled spirits on which the tax is 
to be paid or determined at an effective tax rate based in part on the 
alcohol content derived from eligible flavors or eligible wines shall, 
before the first tax determinaton at that rate, request and receive a 
statement of eligibility for each wine or flavor to be used in the 
computation of the effective tax rate.
    (b) To receive a statement of eligibility, the person bringing in 
the distilled spirits shall submit to the ATF National Laboratory, 1401 
Research Boulevard, Rockville, MD 20850, the following:
    (1) An 8-ounce sample of each distilled spirits, wine and flavor 
used in the product;
    (2) A statement of composition of each flavor, listing--
    (i) The name and percentage of alcohol by volume of the flavor; and
    (ii) The name and quantity of each ingredient used in the 
manufacture of the flavor; and
    (3) A statement of the kind and alcoholic content of each wine.

(Approved by Office of Management and Budget under control number 1512-
0352)

(Act of August 16, 1954, Pub. L. 591, 68A Stat. 907, as amended (26 
U.S.C. 7652); Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended (26 
U.S.C. 5001); Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended (26 
U.S.C. 5010))

[T.D. ATF-297, 55 FR 18067, Apr. 30, 1990. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]



Sec. 26.205  Certificate.

    (a) Every person bringing liquors or articles under this part into 
the United States from the Virgin Islands, except tourists, shall obtain 
a certificate in

[[Page 695]]

the English language from the manufacturer for each shipment showing the 
following information:
    (1) The name and address of the consignee.
    (2) The kind and brand name.
    (3) The quantity thereof as follows--
    (i) If distilled spirits, the proof gallons or liters and degree of 
proof;
    (ii) If wine, the taxable grade and wine gallons;
    (iii) If beer, the gallons (liquid measure) and the percentage of 
alcohol by volume; and
    (iv) If articles, the kind, quantity, and proof of the liquors used 
therein.
    (4) For liquors manufactured under a formula--
    (i) The number and date of the approved formula;
    (ii) A declaration that the liquors have been manufactured in 
accordance with the approved formula; and
    (iii) The name and address of the person filing the formula.
    (5) The name and address of the producer.
    (6) For liquors and articles containing liquors produced outside of 
the Virgin Islands, the country of origin for each such liquor.
    (7) For distilled spirits, a certification by the insular gauger as 
to whether they were regauged when withdrawn from the insular bonded 
warehouse and, if regauged, whether they were at the time of withdrawal 
at the proof indicated on the attached record of gauge.
    (8) For distilled spirits which contain eligible wine or eligible 
flavors, the effective tax rate applied to the product and the elements 
necessary to compute the effective tax rate in accordance with 
Sec. 26.262a as follows--
    (i) Proof gallons of distilled spirits (exclusive of distilled 
spirits derived from eligible flavors);
    (ii) Wine gallons of each eligible wine and the percentage of 
alcohol by volume of each;
    (iii) Proof gallons of distilled spirits derived from eligible 
flavors; and
    (iv) On or after December 1, 1990, the name of the manufacturer, 
formula number from ATF F 5530.5 (1678) or 5150.19 and date of approval 
or the date of the statement of eligibility for each eligible flavor 
(See Sec. 26.204a); and
    (v) After December 1, 1990, the date of the statement of eligibility 
for each eligible wine.
    (b) The person bringing the liquors or articles into the United 
States shall file the certificate and record of gauge with the district 
director of customs at the port of entry, at the time of entry summary, 
as provided in Secs. 26.260 and 26.302.

(Approved by the Office of Management and Budget under control number 
1512-0352.)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1366, as amended (26 U.S.C. 5232); 
Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010))

[T.D. ATF-297, 55 FR 18067, Apr. 30, 1990. Redesignated and amended by 
T.D. ATF-459, 66 FR 38550, 38552, July 25, 2001]



Sec. 26.206  Marking packages and cases.

    The distiller, rectifier, or bottler shall serially number each 
case, barrel, cask, or similar container of distilled spirits filled for 
shipment to the United States. In addition to the serial number of the 
container, the distiller, rectifier, or bottler shall plainly print, 
stamp, or stencil with durable coloring material, in letters and figures 
not less than one-half inch high, on the head of each barrel, cask or 
similar container or on one side of each case, as follows:
    (a) The name of the manufacturer;
    (b) The brand name and kind of liquor; and
    (c) The wine and proof gallon contents; or, for bottles filed 
according to the metric standards of fill prescribed by Sec. 5.47a, of 
this chapter, the contents in liters and the proof of the spirits.

[T.D. ATF-43, 42 FR 30836, June 17, 1977. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]



Sec. 26.207  Destruction of marks and brands.

    The marks, brands, and serial numbers required by this part to be 
placed on barrels, casks, or similar containers, or cases, shall not be 
removed, obscured or obliterated before the contents thereof have been 
removed.

[T.D. ATF-198, 50 FR 8552, Mar. 1, 1985. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]

[[Page 696]]



Sec. 26.209  Samples.

    The appropriate ATF officer may require samples of liquors and 
articles to be submitted whenever desired for laboratory analyses in 
order to determine the rate of tax applicable thereto.

[20 FR 6077, Aug. 20, 1955, as amended by T.D. 7006, 34 FR 2250, Feb. 
15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975, and further 
redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001]

                      Special (Occupational) Taxes



Sec. 26.210  Liquor dealer's special taxes.

    Every person bringing liquors into the United States from the Virgin 
Islands, who sells, or offers for sale, such liquors shall file Form 
5630.5 with ATF in accordance with the instruction on the form, and pay 
special occupational tax as a wholesale dealer in liquor or as a retail 
dealer in liquor, in accordance with the laws and regulations governing 
the payment of such special taxes (part 194 of this chapter).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1340 as amended, 1343 as amended, 
1344 as amended (26 U.S.C. 5111, 5112, 5121, 5122))

[T.D. ATF-70, 45 FR 33981, May, 21, 1980, as amended by T.D. ATF-251, 52 
FR 19339, May 22, 1987. Redesignated by T.D. ATF-459, 66 FR 38550, July 
25, 2001]



Sec. 26.211  Warehouse receipts covering distilled spirits.

    Since the sale of warehouse receipts for distilled spirits is 
equivalent to the sale of distilled spirits, every person bringing 
distilled spirits into the United States from the Virgin Islands, who 
sells, or offers for sale, warehouse receipts for distilled spirits 
stored in warehouses, or elsewhere, incurs liability to special tax as a 
dealer in liquors at the place where such warehouse receipts are sold, 
or offered for sale, and must file return and pay occupational tax as 
provided in Sec. 26.210.

(68A Stat. 618, 620, 621; 26 U.S.C. 5111, 5112, 5121, 5122)

[20 FR 6077, Aug. 20, 1955. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and further redesignated and amended by T.D. ATF-459, 66 FR 38550, 
38552, July 25, 2001]



        Subpart K--Formulas for Products From the Virgin Islands

    Source: T.D. ATF-62, 44 FR 71715, Dec. 11, 1979, unless otherwise 
noted. Redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001.



Sec. 26.220  Formulas for liquors.

    (a) Distilled spirits products. Persons in the Virgin Islands who 
ship distilled spirits beverage products to the United States shall 
comply with the formula requirements of part 5 of this chapter. If any 
product contains liquors made outside of Virgin Islands, the country of 
origin for each such liquor shall be stated on the formula. All formulas 
required by this paragraph shall be submitted on ATF Form 5110.38, in 
accordance with Sec. 26.224.
    (b) Wine. Persons in the Virgin Islands who ship wine to the United 
States shall comply with the formula requirements of part 240 of this 
chapter. If any wines contains liquors made outside of the Virgin 
Islands, the country of origin for each such liquor shall be stated on 
the formula. All formulas required by this paragraph shall be submitted 
on ATF Form 698 Supplemental, in accordance with Sec. 26.224.

[T.D. ATF-62, 44 FR 71715, Dec. 11, 1979, as amended by T.D. ATF-198, 50 
FR 8552, Mar. 1, 1985. Redesignated and amended by T.D. ATF-459, 66 FR 
38550, 38552, July 25, 2001]



Sec. 26.221  Formulas for articles, eligible articles and products manufactured with denatured spirits.

    (a) Formulas for articles and eligible articles. Formulas for 
articles made with distilled spirits must show the quantity and proof of 
the distilled spirits used, and the percentage of alcohol by volume 
contained in the finished product. Formulas for articles made with beer 
or wine must show the kind and quantity thereof (liquid measure), and 
the percent of alcohol by volume of such beer or wine. Formulas and 
samples for eligible articles are required in accordance with subpart F 
of part 17 of this chapter.
    (b) Formulas for products manufactured with denatured spirits. 
Products manufactured with denatured spirits shall be manufactured in 
accordance with the formula requirements of part 20 of this

[[Page 697]]

chapter for similar products made in the United States.
    (1) Products may be made with completely denatured alcohol for sale 
under brand names under part 20 of this chapter without obtaining an 
approved formula. If ingredients are added in sufficient quantities to 
materially change the composition and character of the completely 
denatured alcohol, the product is not classified as completely denatured 
alcohol and may not be marked, branded, or sold as completely denatured 
alcohol.
    (2) Products made with specially denatured spirits shall be made in 
accordance with (i) a general-use formula approved as provided in part 
20 of this chapter, or (ii) an approved formula on Form 5150.19, or 
previously approved on ATF Form 1479-A or 27-B Supplemental.
    (c) Formulas required. Formulas required by this section shall be 
submitted on Form 5150.19, except that formulas for eligible articles 
shall be submitted on Form 5154.1 (formerly 1678). Formulas shall be 
submitted in accordance with Sec. 26.224. Any formula for an eligible 
article approved on Form 5150.19 prior to October 23, 1986, shall 
continue to be valid until revoked or voluntarily surrendered. Any 
person holding such a formula is not required to submit a new formula.

(Approved by the Office of Mangement and Budget under control number 
1512-0494)

[T.D. ATF-62, 44 FR 71715, Dec. 11, 1979, as amended by T.D. ATF-199, 50 
FR 9199, Mar. 6, 1985; T.D. ATF-263, 52 FR 46595, Dec. 9, 1987; T.D. 
ATF-379, 61 FR 31427, June 20, 1996. Redesignated and amended by T.D. 
ATF-459, 66 FR 38550, 38552, July 25, 2001]



Sec. 26.222  Still wines containing carbon dioxide.

    (a) General. Still wines may contain not more than 0.392 gram of 
carbon dioxide per 100 milliliters of wine; except that a tolerance to 
this maximum limitation, not to exceed 0.009 gram of carbon dioxide per 
100 milliliters of wine, will be allowed where the amount of carbon 
dioxide in excess of 0.392 gram per 100 milliliters of wine was due to 
mechanical variations which could not be completely controlled under 
good commercial practices. Such tolerance will not be allowed where it 
is found that the limitation of 0.392 gram of carbon dioxide per 100 
milliliters of wine is continuously or intentionally exceeded, or where 
the variation results from the use of methods or equipment not in accord 
with good commercial practices.
    (b) Notice required. Proprietors intending to add carbon dioxide to, 
or retain carbon dioxide in, still wines to be shipped to the United 
States shall submit a notice to the appropriate ATF officer. The notice 
shall show the name and address of the proprietor and shall identify the 
method or process, the kinds (class and type) of wine, and the type of 
equipment to be used. A corrected notice shall be filed if there is any 
change (except for minor changes) in the information contained in the 
notice.
    (c) Filing and disposition of notice. The notice required by 
paragraph (b) of this section shall be submitted in triplicate to the 
appropriate ATF officer, who shall retain one copy, forward one copy to 
the Commissioner of Finance of the Virgin Islands, and return one copy 
to the proprietor. The proprietor shall keep the notice available for 
examination by insular agents.

(Approved by the Office of Management and Budget under control number 
1512-0352)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1331, as amended (26 U.S.C 5041))

[T.D. ATF-62, 44 FR 71715, Dec. 11, 1979, as amended by T.D. ATF-172, 49 
FR 14943, Apr. 16, 1984. Redesignated by T.D. ATF-459, 66 FR 38550, July 
25, 2001]



Sec. 26.223  Changes of formulas.

    Any change in the ingredients composing a product covered by an 
approved formula will necessitate the submission of a new formula.



Sec. 26.224  Filing and disposition of formulas.

    Formulas required by this subpart must be submitted, and disposed 
of, in accordance with the instructions on the prescribed ATF form. The 
applicant shall maintain copies of approved formulas available for 
examination by insular agents.

[T.D. ATF-451, 66 FR 21670, May 1, 2001. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]

[[Page 698]]



Sec. 26.225  Previously approved formulas.

    Any formula approved on Form 27-B Supplemental prior to January 1, 
1980, shall continue to be valid until revoked or voluntarily 
surrendered. Any person holding such a formula is not required to submit 
a new formula. If an approved formula on Form 27-B Supplemental 
indicates that carbon dioxide will be added to, or retained in, still 
wine, the notice requirement of Sec. 26.222 shall not apply.

[T.D. ATF-62, 44 FR 71715, Dec. 11, 1979. Redesignated and amended by 
T.D. ATF-459, 66 FR 38550, 38552, July 25, 2001]



    Subpart L--Closures for Distilled Spirits From the Virgin Islands

                                 General



Sec. 26.230  Containers of distilled spirits to bear closures.

    Containers of 1 gallon (3.785 liters) or less of distilled spirits, 
upon which all Federal internal revenue taxes have been paid or 
determined under provisions of this part, shall have closures or other 
devices affixed in accordance with the provisions of this part.

(Sec. 454, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 5301))

[T.D. ATF-206, 50 FR 23955, June 7, 1985. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]



Sec. 26.231  Affixing closures.

    Closures or other devices shall be securely affixed to containers 
having capacity of 1 gallon (3.785 liters) or less so as to leave a 
portion remaining on the container when it is opened. In addition, the 
closures or other devices shall be constructed in such a manner as to 
require that they be broken to gain access to the contents of the 
containers.

(Sec. 454, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 5301))

[T.D. ATF-206, 50 FR 23955, June 7, 1985. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]



      Subpart M--Procedure at Port of Entry From the Virgin Islands



Sec. 26.260  Certificate.

    Persons (except tourists) bringing liquors or articles from the 
Virgin Islands into the United States shall file the certificate 
provided for in Sec. 26.205 with the district director of customs at the 
port of entry in the United States.

[T.D. ATF-62, 44 FR 71716, Dec. 11, 1979. Redesignated and amended by 
T.D. ATF-459, 66 FR 38550, 38552, July 25, 2001]



Sec. 26.261  Action by district director of customs.

    The district director of customs will direct the proper customs 
gauger to determine the taxable quantity of liquors contained in the 
consignment by regauge or inspection and report the result thereof to 
the district director of customs. Upon receipt of such report the 
district director of customs will refer to the certificate required by 
Sec. 26.205 covering the product to determine the rate of internal 
revenue tax applicable thereto. When the rate of tax applicable to the 
product has been ascertained, the tax due on the consignment will be 
determined according to Secs. 26.262 through 26.265.

[20 FR 6077, Aug. 20, 1955, as amended by T.D. 7006, 34 FR 2249, Feb. 
15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975]

    Editorial Note: For Federal Register citations affecting 
Sec. 26.261, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and on GPO Access.



26.262  Determination of tax on distilled spirits.

    (a) If the certificate required by Sec. 26.205 covers distilled 
spirits, and the distilled spirits are not being transferred under 
subparts 0 or Oa of this part, the tax imposed by 26 U.S.C. 7652 which 
provides for a tax equal to the tax imposed by 26 U.S.C. 5001 will be 
collected on each proof gallon, and fractional part thereof, contained 
in the shipment.
    (b) A credit against the tax imposed on distilled spirits by 26 
U.S.C. 7652 is allowable under 26 U.S.C. 5010 on each proof gallon of 
alcohol derived from eligible wine or from eligible flavors

[[Page 699]]

which do not exceed 2 \1/2\ percent of the finished product on a proof 
gallon basis. The credit is allowable at the time the tax is payable as 
if it constituted a reduction in the rate of tax.
    (c) Where credit against the tax is desired, the person liable for 
the tax shall establish an effective tax rate in accordance with 
Sec. 26.262a. The effective tax rate established will be applied to each 
withdrawal or other disposition of the distilled spirits within the 
United States.

(Approved by the Office of Management and Budget under control number 
1512-0352)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201); 
Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010), Act 
of August 16, 1954, Pub. L. 591, 68A Stat. 907, as amended (26 U.S.C. 
7652))

[T.D. ATF-297, 55 FR 18068, Apr. 30, 1990. Redesignated and amended by 
T.D. ATF-459, 66 FR 38552, July 25, 2001]



Sec. 26.262a  Computation of effective tax rate.

    (a) The proprietor shall compute the effective tax rate for 
distilled spirits containing eligible wine or eligible flavors as the 
ratio of the numerator and denominator as follows:
    (1) The numerator will be the sum of:
    (i) The proof gallons of all distilled spirits used in the product 
(exclusive of distilled spirits derived from eligible flavors), 
multipled by the tax rate prescribed by 26 U.S.C. 5001;
    (ii) The wine gallons of each eligible wine used in the product, 
multiplied by the tax rate prescribed by 26 U.S.C. 5041(b) (1), (2), or 
(3), as applicable; and
    (iii) The proof gallons of all distilled spirits derived from 
eligible flavors used in the product, multiplied by the tax rate 
prescribed by 26 U.S.C. 5001, but only to the extent that such distilled 
spirits exceed 2\1/2\% of the denominator prescribed in paragraph (a)(2) 
of this section.
    (2) The denominator will be the sum of:
    (i) The proof gallons of all distilled spirits used in the product, 
including distilled spirits derived from eligible flavors; and
    (ii) The wine gallons of each eligible wine used in the product, 
multiplied by twice the percentage of alcohol by volume of each, divided 
by 100.
    (b) In determining the effective tax rate, quantities of distilled 
spirits, eligible wine, and eligible flavors will be expressed to the 
nearest tenth of a proof gallon. The effective tax rate may be rounded 
to as many decimal places as the proprietor deems appropriate, provided 
that, such rate is expressed no less exactly than the rate rounded to 
the nearest whole cent, and the effective tax rates for all products 
will be consistently expressed to the same number of decimal places. In 
such case, if the number is less than five it will be dropped; if it is 
five or over, a unit will be added.
    (c) The following is an example of the use of the formula.
---------------------------------------------------------------------------

    \1\ Proof gallons by which distilled spirits derived from eligible 
flavors exceed 2\1/2\% of the total proof gallons in the batch (100.9-
(2\1/2\%)x3,371.8=16.6).

                              BATCH RECORD
Distilled spirits.........................  2249.1 proof gallons.
Eligible wine (14% alcohol by volume).....  2265.0 wine gallons.
Eligible wine (19% alcohol by volume).....  1020.0 wine gallons.
Eligible flavors..........................  100.9 proof gallons.

                                            [GRAPHIC] [TIFF OMITTED] TC05OC91.032
                                            

[[Page 700]]


(Approved by the Office of Management and Budget under control 
number1512-0352)

(Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010))

[T.D. ATF-297, 55 FR 18068, Apr. 30, 1990, as amended by T.D. ATF-307, 
55 FR 52741, Dec. 21, 1990. Redesignated by T.D. ATF-459, 66 FR 38550, 
July 25, 2001]



Sec. 26.263  Determination of tax on beer.

    If the certificate prescribed in Sec. 26.205 covers beer, the beer 
tax will be collected on the basis of the number of barrels of 31 
gallons each, or fractional parts thereof, contained in the shipment.

(68A Stat. 611, as amended; 26 U.S.C. 5051)

[20 FR 6077, Aug. 20, 1955. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and further redesignated and amended by T.D. ATF-459, 66 FR 38550, 
38552, July 25, 2001]



Sec. 26.264  Determination of tax on wine.

    If the certificate prescribed in Sec. 26.205 covers wine, the wine 
tax will be collected at the rates imposed by section 5041, Internal 
Revenue Code, as amended.

(68A Stat. 609, as amended; 26 U.S.C. 5041)

[20 FR 6077, Aug. 20, 1955. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and further redesignated and amended by T.D. ATF-459, 66 FR 38550, 
38552, July 25, 2001]



Sec. 26.265  Determination of tax on articles.

    Where articles contain distilled spirits, the tax will be collected 
at the rate prescribed by 26 U.S.C. 5001(a)(1) on all alcohol contained 
therein, regardless of the source. Articles containing only wine and/or 
beer will be taxed at the rates prescribed by 26 U.S.C. 5041 and/or 
5051, respectively. The quantities and kinds of liquors will be shown on 
the certificate prescribed in Sec. 26.205.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended (26 U.S.C. 5001, 
5007))

[T.D. ATF-62, 44 FR 71717, Dec. 11, 1979. Redesignated and amended by 
T.D. ATF-459, 66 FR 38550, 38552, July 25, 2001]



Sec. 26.266  Tax payment.

    The internal revenue tax on liquors (except spirits transferred 
under subparts O or Oa of this part) and articles coming into the United 
States from the Virgin Islands shall be paid to the district director of 
customs at the port of entry, as provided by customs regulations. (19 
CFR Ch. I)

[20 FR 6077, Aug. 20, 1955, as amended by T.D. 7006, 34 FR 2249, Feb. 
15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975, and amended by 
T.D. ATF-198, 50 FR 8554, Mar. 1, 1985. Redesignated by T.D. ATF-459, 66 
FR 38550, July 25, 2001]



Sec. 26.267  Payment of tax by electronic fund transfer.

    (a) Each person bringing liquors and articles into the United States 
from the Virgin Islands who was liable, during a calendar year, for a 
gross amount equal to or exceeding five million dollars in distilled 
spirits taxes combining tax liabilities incurred under this part and 
parts 19 and 251 of this chapter, a gross amount equal to or exceeding 
five million dollars in wine taxes combining tax liabilities incurred 
under this part and parts 240 and 251 of this chapter, or a gross amount 
equal to or exceeding five million dollars in beer taxes combining tax 
liabilities incurred under this part and parts 25 and 251 of this 
chapter, shall use a commercial bank in making payment by electronic 
fund transfer (EFT), as defined in paragraph (c) of this section, of 
such taxes during the succeeding calendar year. Payment of such taxes by 
cash, check, or money order is not authorized for a person bringing 
liquors and articles into the United States from the Virgin Islands who 
is required, by this section, to make remittances by EFT. For purposes 
of this section, the dollar amount of tax liability is to be summarized 
separately for distilled spirits taxes, wine taxes, or beer taxes, and 
is defined as the gross tax liability on all taxable withdrawals from 
premises in the United States and importations (including products of 
the same tax class brought into the United States from Puerto Rico or 
the Virgin Islands) during the calendar year, without regard to any 
drawbacks, credits, or refunds, for all premises from which such 
activities are conducted.
    (b) For the purposes of this section, a ``person'' includes a 
controlled group of corporations, as defined in 26 U.S.C. 1563, and 
implementing regulations in 26 CFR 1.1563-1 through 1.1563-4, except 
that the words ``at least 80 percent''

[[Page 701]]

shall be replaced by the words ``more than 50 percent'' in each place it 
appears in subsection (a) of 26 U.S.C. 1563, as well as in the 
implementing regulations. Also, the rules for a ``controlled group of 
corporations'' apply in a similar fashion to groups which include 
partnerships and/or sole proprietorships. If one entity maintains more 
than 50% control over a group consisting of corporations and one, or 
more, partnerships and/or sole proprietorships, all of the members of 
the controlled group are one person for the purpose of determining who 
is required to make remittances by EFT.
    (c) Electronic fund transfer or EFT means any transfer of funds, 
other than a transaction originated by check, draft, or similar paper 
instrument, which is initiated through an electronic terminal, 
telephonic instrument, or computer of magnetic tape, so as to order, 
instruct, or authorize a financial institution to either debit or credit 
an account, in accordance with procedures established by the U.S. 
Customs Service.
    (d) Each person who is required by this section to make remittances 
by EFT shall make the EFT remittance in accordance with the requirements 
of the U.S. Customs Service.

(Approved by the Office of Management and Budget under Control Number 
1512-0457)

(Act of August 16, 1954, 68A Stat. 775, as amended (26 U.S.C. 6302); 
Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended (26 U.S.C. 5061))

[T.D. ATF-245, 52 FR 532, Jan. 7, 1987. Redesignated by T.D. ATF-459, 66 
FR 38550, July 25, 2001]



    Subpart N--Records and Reports of Liquors From the Virgin Islands

       Record and Report of Liquors Brought Into the United States



Sec. 26.272  General requirements.

    Except as provided in Sec. 26.273, every person, other than a 
tourist, bringing liquors into the United States from the Virgin Islands 
shall keep such records and render reports of the physical receipt and 
disposition of such liquors as are required to be kept by a wholesale or 
retail dealer, as applicable, under the provisions of part 194 of this 
chapter. Any importer who is responsible for release of the liquors from 
customs custody and who does not take physical possession of the liquors 
shall keep commercial records reflecting such release; such records 
shall identify the kind and quantity of the liquors released, the name 
and address of the person receiving the liquors from customs custody, 
and shall be filed chronologically by release dates. Records and reports 
will not be required under this part with respect of liquors while in 
customs custody.

(Approved by the Office of Management and Budget under control number 
1512-0352)

(72 Stat. 1342, 1345; 26 U.S.C. 5114, 5124)

[T.D. ATF-2, 37 FR 22739, Oct. 21, 1972. Redesignated at 40 FR 16835, 
Apr. 15, 1975, and amended by T.D. ATF-172, 49 FR 14943, Apr. 16, 1984. 
Redesignated and amended by T.D. ATF-459, 66 FR 38552, July 25, 2001]



Sec. 26.273  Proprietors of taxpaid premises.

    Transactions involving the bringing of liquors into the United 
States from the Virgin Islands by proprietors of distilled spirits 
plants in the United States qualified under the provisions of this 
chapter shall be recorded and reported in accordance with the 
regulations governing the operations of such premises in the United 
States.

[T.D. 6478, 25 FR 6203, July 1, 1960. Redesignated at 40 FR 16835, Apr. 
15, 1975, and further redesignated by T.D. ATF-459, 66 FR 38550, July 
25, 2001]



Sec. 26.273a  Transfer record.

    The transfer record for Virgin Islands spirits prescribed in 
Sec. 26.301 shall show the:
    (a) Date prepared;
    (b) Serial number of the transfer record, beginning with ``1'' each 
January 1;
    (c) Name of the proprietor and distilled spirits plant number to 
which consigned;
    (d) Name and address of the consignor;
    (e) Kind of spirits;
    (f) Name of the producer;
    (g) Age (in years, months and days) of the spirits;
    (h) Proof of the spirits;
    (i) Type and serial number of containers; and

[[Page 702]]

    (j) Proof gallons of spirits in the shipment.

(Approved by the Office of Management and Budget under control number 
1512-0250)

(Sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

[T.D. ATF-198, 50 FR 8554, Mar. 1, 1985. Redesignated and amended by 
T.D. ATF-459, 66 FR 38552, July 25, 2001]



Sec. 26.273b  Package gauge record.

    When required in this part with respect to Virgin Islands spirits, a 
package gauge record shall be prepared to show:
    (a) The date prepared;
    (b) The related transaction record and its serial number;
    (c) The producer, his name and address; and
    (d) For each package, the:
    (1) Package identification or serial number;
    (2) Kind of spirits;
    (3) Gross weight;
    (4) Tare;
    (5) Net weight;
    (6) Proof gallons; and
    (7) Proof.

(Approved by the Office of Management and Budget under control number 
1512-0250)

[T.D. ATF-198, 50 FR 8554, Mar. 1, 1985. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]

               Filing and Retention of Records and Reports



Sec. 26.275  Filing.

    (a) All records and reports required by this part will be maintained 
separately, by transaction or reporting date, at the importer's place of 
business. The appropriate ATF officer may, pursuant to an application, 
authorize files, or an individual file, to be maintained at another 
business location under the control of the importer, if the alternative 
location does not cause undue inconvenience to appropriate ATF or 
Customs officers desiring to examine the files or delay in the timely 
submission of documents.
    (b) If an importer conducts wholesale operations, one legible copy 
of each required record of receipt and disposition shall be filed not 
later than one business day following the date of transaction.
    (c) If an importer conducts only retail operations, either loose-
leaf or book records may be maintained for the daily receipt of liquors 
which contain all the required information.
    (d) Supporting documents, such as consignors' invoices, delivery 
receipts, bills or lading, etc., or exact copies of the same, may be 
filed in accordance with the importer's regular accounting and 
recordkeeping practices.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1342, as amended, 1395, as amended 
(26 U.S.C. 5114, 5555))

[T.D. ATF-116, 47 FR 51573, Nov. 16, 1982, as amended by T.D. ATF-451, 
66 FR 21670, May 1, 2001. Redesignated by T.D. ATF-459, 66 FR 38550, 
July 25, 2001]



Sec. 26.276  Retention.

    All records required by this part, documents or copies of documents 
supporting these records, and file copies of reports required by this 
part shall be retained for not less than three years, and during this 
period shall be available, during business hours, for inspection and 
copying by appropriate ATF or customs officers. Furthermore, the 
appropriate ATF officer may require these records to be kept for an 
additional period of not more than three years in any case where he 
determines retention necessary or advisable. Any records, or copies 
thereof, containing any of the information required by this part to be 
prepared, wherever kept, shall also be made available for inspection and 
copying.

(68A Stat. 731 (26 U.S.C. 6001); Sec. 201, Pub. L. 85-859, 72 Stat. 
1342, 1345, 1348, 1361, 1395 (26 U.S.C. 5114, 5124, 5146, 5207, 5555))

[T.D. ATF-50, 43 FR 20494, May 12, 1978, as amended by T.D. ATF-451, 66 
FR 21670, May 1, 2001. Redesignated by T.D. ATF-459, 66 FR 38550, July 
25, 2001]



Sec. 26.277  [Reserved]



   Subpart O--Tax-Free Shipments to the United States From the Virgin 
                                 Islands

    Source: T.D. ATF-199, 50 FR 9199, Mar. 6, 1985, unless otherwise 
noted. Redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001.

[[Page 703]]



Sec. 26.291  General.

    (a) Industrial spirits may be shipped into the United States to the 
holder of a permit under part 22 of this chapter, in accordance with 
Sec. 26.292 through 26.294 and regulations issued by the Governor of the 
Virgin Islands.
    (b)(1) Specially denatured spirits may be shipped into the United 
States to the holder of a permit under part 20 of this chapter, in 
accordance with Secs. 26.292 through 26.294 and regulations issued by 
the Governor of the Virgin Islands.
    (2) Completely denatured alcohol may be shipped to anyone in the 
United States in accordance with Secs. 26.295 through 26.296 and 
regulations issued by the Governor of the Virgin Islands.
    (3) Denatured spirits shall be denatured in accordance with part 21 
of this chapter and regulations issued by the Governor of the Virgin 
Islands.
    (c) Products made with denatured spirits may be shipped to anyone in 
the United States in accordance with Secs. 26.295 through 26.296 and 
regulations issued by the Governor of the Virgin Islands. These products 
are also subject to the requirements of Sec. 26.221 of this part.

[20 FR 6077, Aug. 20, 1955. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and further redesignated and amended by T.D. ATF-459, 66 FR 38552, July 
25, 2001]

     Shipment of Industrial Spirits and Specially Denatured Spirits



Sec. 26.292  Copy of consignee's permit under part 20 or 22.

    The consignor or consignee shall file a copy of the consignee's 
permit issued under part 20 of this chapter (for shipments of specially 
denatured spirits) or part 22 of this chapter (for shipments of 
industrial spirits) with the district director of customs of the port of 
entry. The copy of the permit shall be adequate evidence that the 
consignee is authorized to enter industrial spirits or specially 
denatured spirits free of tax.



Sec. 26.293  Marks on containers.

    (a) Industrial spirits. The shipper shall mark or label each 
immediate container of industrial spirits with the following 
information:
    (1) The name or trade name of the distiller or shipper;
    (2) The words ``Virgin Islands Industrial Spirits'';
    (3) A package identification number as required by subpart R of part 
19 of this chapter;
    (4) The date filled;
    (5) Proof; and
    (6) Quantity in proof gallons.
    (b) Specially denatured spirits. The shipper shall mark or label 
each immediate container of specially denatured spirits with the 
following information:
    (1) Quantity, in gallons, or in liters and gallons;
    (2) A serial number or package identification number;
    (3) Name and address of shipper;
    (4) The words ``Virgin Islands Specially Denatured Alcohol'' or 
``Virgin Islands Specially Denatured Rum,'' as appropriate;
    (5) Formula number prescribed by part 21 of this chapter;
    (6) Proof, if the spirits were denatured at other than 190 proof;
    (7) Denaturants used, if spirits were denatured under an approved 
formula authorizing a choice of denaturants; and
    (8) Quantity of denaturant used, if the approved formula authorizes 
a choice of quantities of denaturants.



Sec. 26.294  Record of shipment.

    (a) Each shipment of industrial spirits or specially denatured 
spirits from the Virgin Islands to the United States shall be 
accompanied by a record of shipment. The record of shipment shall 
consist of an invoice, bill of lading or similar document which shows 
the following information:
    (1) Consignor's name and address;
    (2) Consignee's name, address, and permit number;
    (3) For each formula of specially denatured spirits--
    (i) The formula number prescribed by part 21 of this chapter,
    (ii) The serial numbers or package identification numbers of 
containers, and
    (iii) The total quantity in wine gallons;
    (4) For industrial spirits--
    (i) The package identification numbers of containers, and

[[Page 704]]

    (ii) The total quantity in proof gallons.
    (b) The record of shipment shall be made available to custom 
officers inspecting the shipment.

(Records relating to industrial spirits approved by the Office of 
Management and Budget under control number 1512-0334; records relating 
to specially denatured spirits approved by the Office of Management and 
Budget under control number 1512-0337)

    Shipment of Completely Denatured Alcohol and Products Made With 
                            Denatured Spirits



Sec. 26.295  Marks on containers.

    (a) Completely denatured alcohol. (1) For each immediate container 
of completely denatured alcohol with a capacity exceeding 1 gallon, the 
shipper shall mark or label on the head or side of the package or on the 
side of the casing, the following:
    (i) The name and address of the person filling the container;
    (ii) The contents in gallons;
    (iii) The words ``Virgin Islands Completely Denatured Alcohol''; and
    (iv) The formula number prescribed by part 21 of this chapter.
    (2) In addition, if the container has a capacity of 5 gallons or 
less, the words ``Completely Denatured Alcohol'' shall be in red letters 
on white background, and the label shall also have the words ``Caution--
contains poisonous ingredients'' in red letters on white background.
    (b) Products made with denatured spirits. The shipper shall mark or 
label each immediate container of a product made with denatured spirits 
with the name, trade name or brand name of the product and the name and 
address of the shipper.



Sec. 26.296  Record of shipment.

    (a) Each shipment of completely denatured alcohol or products made 
with denatured spirits shall be accompanied by a record of shipment. The 
record of shipment shall consist of an invoice, bill of lading or 
similar document which shows the following information:
    (1) Consignor's name and address;
    (2) Consignee's name and address;
    (3) Capacity and number of containers;
    (4) Total quantity shipped; and
    (5)(i) For completely denatured alcohol, the words ``Virgin Islands 
Completely Denatured Alcohol'' and the formula number prescribed by part 
21 of this chapter, or
    (ii) For products made with denatured spirits, the name, trade name 
or brand name of the product.
    (b) The record of shipment shall be made available to customs 
officers inspecting the shipment.

(Approved by the Office of Management and Budget under control number 
1512-0337)

                      Arrival in the United States



Sec. 26.297  General.

    The district director of customs shall inspect each shipment of 
industrial spirits, specially denatured spirits, completely denatured 
alcohol, and products made with denatured spirits coming into the United 
States from the Virgin Islands. If the shipment complies with the 
requirements of this part, the products may be released free of tax.



Subpart Oa--Shipment of Bulk Distilled Spirits From the Virgin Islands, 
 Without Payment of Tax, for Transfer From Customs Custody to Internal 
                              Revenue Bond

    Authority: Sec. 3, Pub. L. 90-630, 82 Stat. 1328, as amended (26 
U.S.C. 5232).

    Source: T.D. ATF-62, 44 FR 71717, Dec. 11, 1979, unless otherwise 
noted. Redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001.



Sec. 26.300  General.

    Distilled spirits brought into the United States from the Virgin 
Islands in bulk containers may, under the provisions of this subpart, be 
withdrawn by the proprietor of a distilled spirits plant from customs 
custody and transferred in such bulk containers or by pipeline to the 
bonded premises of his plant, without payment of the internal revenue 
tax imposed on such spirits by 26 U.S.C. 7652. Such spirits so withdrawn 
and transferred to a distilled spirits plant (a) may be redistilled or 
denatured only if 185 degrees or more of proof, and (b) may be withdrawn 
from

[[Page 705]]

internal revenue bond for any purpose authorized by 26 U.S.C. chapter 
51, in the same manner as domestic distilled spirits. Spirits 
transferred from customs custody to the bonded premises of a distilled 
spirits plant under the provisions of this subpart shall be received and 
stored thereat, and withdrawn or transferred therefrom, subject to the 
provisions of part 19 of this chapter. The person operating the bonded 
premises of the distilled spirits plant to which spirits are transferred 
under the provisions of this subpart shall become liable for the tax on 
distilled spirits withdrawn from customs custody under 26 U.S.C. 5232, 
upon release of the spirits from customs custody, and the person 
bringing the spirits into the United States shall thereupon be relieved 
of his liability for such tax.



Sec. 26.301  Preparation of transfer record.

    The person bringing spirits into the United States from the Virgin 
Islands under this subpart shall prepare a transfer record, in 
triplicate, according to Sec. 26.273a, and present the record to the 
customs officer responsible for inspection and release of the spirits. A 
separate transfer record shall be prepared for each conveyance.

(Approved by the Office of Management and Budget under control number 
1512-0250)

[T.D. ATF-198, 50 FR 8555, Mar. 1, 1985. Redesignated and amended by 
T.D. ATF-459, 66 FR 38552, July 25, 2001]



Sec. 26.302  Gauge and certification.

    (a) Gauge. If Virgin Islands spirits to be transferred from customs 
custody to internal revenue bond as provided in this subpart are not 
gauged by an insular gauger at the time of their withdrawal from an 
insular bonded warehouse, as provided in Sec. 26.204 of this chapter, 
the insular consignor shall effect a gauge of each bulk container and 
shall prepare a record of such gauge, in duplicate, and attach both 
copies to the certificate required by Sec. 26.205 of this chapter. If 
the gauge is made by the insular gauger his record of gauge shall be 
prepared in duplicate and both copies shall be attached to the 
certificate.
    (b) Certification. The certification prescribed by Sec. 26.205 of 
this chapter shall be prepared in duplicate if the Virgin Islands 
spirits are to be transferred from customs custody to internal revenue 
bond. Both copies of the certificate, with the applicable record of 
gauge attached, shall be filed with the district director of customs at 
the port of entry. The original of the certificate and related record of 
gauge shall be attached by the customs officer to the original of the 
transfer record received as provided in Sec. 26.301 from the importer.

(Approved by the Office of Management and Budget under control number 
1512-0250)

[T.D. ATF-198, 50 FR 8555, Mar. 1, 1985. Redesignated and amended by 
T.D. ATF-459, 66 FR 38552, July 25, 2001]



Sec. 26.303  Customs inspection and release.

    The customs officer shall not release distilled spirits under this 
subpart until he inspects the spirits, and, if it appears that losses in 
transit were sustained from any container, he shall gauge the spirits in 
such container. If the spirits are in a bulk conveyance, the customs 
officer shall record the elements of his gauge on the transfer record, 
or, if the spirits are in packages, on the gauge record required by 
Sec. 26.302, and attach it to the transfer record. The customs officer 
shall also record on the transfer record the port of entry, carrier 
identification, and warehouse entry number. When the consignee has 
complied with all customs requirements, the customs officer shall 
release the spirits for transfer to the distilled spirits plant, by 
dating and signing the transfer record with his title the statement: 
``To the best of my knowledge the information hereon is accurate and the 
spirits are released''. The customs officer shall retain a copy of the 
transfer record and any attachment, forward a copy of the transfer 
record and any attachments to the appropriate ATF officer, and give the 
original of the transfer record with any attachments to the consignee.

[T.D. ATF-198, 50 FR 8555, Mar. 1, 1985. Redesignated and amended by 
T.D. ATF-459, 66 FR 38552, July 25, 2001]

[[Page 706]]



Sec. 26.304  Bulk conveyances to be sealed.

    When a shipment of distilled spirits from customs custody to the 
distilled spirits plant is made in a tank, tank barge, cargo container, 
tank car, tank truck, or similar bulk conveyance, all openings affording 
access to the spirits shall be sealed by the customs officer with 
customs seals in such manner as will prevent unauthorized removal of 
spirits through such openings without detection.



Sec. 26.305  Receipt by consignee.

    Proprietors of distilled spirits plants who receive Virgin Islands 
spirits under this subpart shall follow the requirements in 27 CFR part 
19 for spirits received by transfer in bond. However, proprietors are 
not required to file application on ATF Form 5100.16 to receive Virgin 
Islands spirits from customs custody.

[T.D. ATF-198, 50 FR 8555, Mar. 1, 1985. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]



  Subpart Ob--Claims for Drawback on Eligible Articles From the Virgin 
                                 Islands

    Source: T.D. ATF-263, 52 FR 46595, Dec. 9, 1987, unless otherwise 
noted. Redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001.



Sec. 26.306  Drawback of tax.

    Any person who brings eligible articles into the United States from 
the Virgin Islands may claim drawback of the distilled spirits excise 
taxes paid on such articles as provided in this subpart.



Sec. 26.307  Special tax.

    Any person filing claim for drawback of tax on eligible articles 
brought into the United States from the Virgin Islands shall pay special 
tax as required by 26 U.S.C. 5131. For purposes of special tax, subparts 
C and D of part 17 of this chapter shall apply as if the use and tax 
determination occurred in the United States at the time the article was 
brought into the United States, and each business location from which 
entry of eligible articles is caused or effected shall be treated as a 
place of manufacture. If special tax is paid for any such business 
location under part 17 of this chapter, as a place where nonbeverage 
products are manufactured for purposes of drawback, then no additional 
special tax need be paid for that location under this section.

[T.D. ATF-263, 52 FR 46595, Dec. 9, 1987, as amended by T.D. ATF-271, 53 
FR 17559, May 17, 1988; T.D. ATF-379, 61 FR 31427, June 20, 1996. 
Redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001]



Sec. 26.308  Bonds.

    (a) General. Persons bringing eligible articles into the United 
States from the Virgin Islands and intending to file monthly claims for 
drawback under the provisions of this subpart shall obtain a bond on 
Form 5154.3. When the limit of liability under a bond given in less than 
the maximum amount has been reached, further drawback on monthly claims 
may be suspended until a strengthening or superseding bond in a 
sufficient amount has been furnished. For provisions relating to bonding 
requirements, subpart E of part 17 of this chapter is incorporated in 
this part.
    (b) Approval required. No person bringing eligible articles into the 
United States from the Virgin Islands may file monthly claims for 
drawback under the provisions of this subpart until a bond on ATF Form 
5154.3 has been approved.

[T.D. ATF-379, 61 FR 31427, June 20, 1996, as amended by T.D. ATF-451, 
66 FR 21670, May 1, 2001. Redesignated by T.D. ATF-459, 66 FR 38550, 
July 25, 2001]



Sec. 26.309  Claims for drawback.

    (a) General. Persons bringing eligible articles into the United 
States from the Virgin Islands must file claim for drawback on ATF Form 
2635 (5620.8). Upon finding that the claimant has satisfied the 
requirements of this subpart, the appropriate ATF officer must allow the 
drawback of taxes at a rate of $1 less than the lesser of $10.50 a proof 
gallon or the rate specified in 26 U.S.C. 5001(a).
    (b) Information on claims. The claim must set forth the following:
    (1) That the special tax has been paid;

[[Page 707]]

    (2) That the eligible articles brought into the United States on 
which drawback is claimed are fully taxpaid or tax-determined;
    (3) That the eligible articles on which drawback is claimed are 
nonbeverage products; and
    (4) That the eligible articles were manufactured in the Virgin 
Islands in compliance with approved formulas in accordance with 
Sec. 26.221.
    (c) Supporting data. Each claim shall be accompanied by supporting 
data as specified in this paragraph. ATF Form 5154.2, Supporting Data 
for Nonbeverage Drawback Claims, may be used, or the claimant may use 
any suitable format that provides the following information:
    (1) The control number of the Special Tax Stamp and the tax year for 
which issued;
    (2) A description of each eligible article as follows:
    (i) Name and type of each product;
    (ii) Name and address of the manufacturer of each product;
    (iii) Formula number under which each product was manufactured;
    (iv) Alcohol content of each product;
    (v) Quantity of each product;
    (vi) Proof gallons of distilled spirits contained in each product;
    (vii) Date of entry of the eligible product into the United States; 
and
    (viii) Evidence of taxpayment of distilled spirits in accordance 
with Sec. 26.266.
    (d) Date of filing claim. Quarterly claims for drawback shall be 
filed within the 6 months next succeeding the quarter in which the 
eligible products covered by the claim were brought into the United 
States. Monthly claims for drawback may be filed at any time after the 
end of the month in which the eligible products covered by the claim 
were brought into the United States, but must be filed not later than 
the close of the sixth month succeeding the quarter in which the 
eligible products were brought into the United States.

(Approved by the Office of Management and Budget under control number 
1512-0494)

[T.D. ATF-263, 52 FR 46595, Dec. 9, 1987, as amended by T.D. ATF-271, 53 
FR 17559, May 17, 1988; T.D. ATF-379, 61 FR 31427, June 20, 1996; T.D. 
ATF-451, 66 FR 21670, May 1, 2001. Redesignated and amended by T.D. ATF-
459, 66 FR 38552, July 25, 2001]



Sec. 26.310  Records.

    (a) General. Every person intending to file claim for drawback on 
eligible articles brought into the United States from the Virgin Islands 
shall keep permanent records of the data elements required by this 
section. Such records shall be maintained at the business premises for 
which the claim is filed and shall be available for inspection by any 
appropriate ATF officer during business hours.
    (b) Details of records. Each person intending to claim drawback on 
eligible articles brought into the United States shall maintain 
permanent records showing the following data:
    (1) The name, description, quantity, and formula number of each such 
article.
    (2) The alcohol content of each such article.
    (3) Name and address of the manufacturer and shipper, and date of 
entry into the United States.
    (4) Evidence of taxpayment of distilled spirits in accordance with 
paragraph (e) of this section.
    (c) Form of record. No particular form of record is prescribed, but 
the data required to be shown shall be readily ascertainable from the 
records kept by the drawback claimant.
    (d) Evidence of taxpayment of distilled spirits. Evidence of 
taxpayment of eligible articles (such as Customs Forms 7501 and 7505 
receipted to indicate payment of tax) shall be maintained as evidence of 
taxpayment to support information required to be furnished in the 
supporting data filed with a claim.

[[Page 708]]

    (e) Retention of records. Each drawback claimant shall retain for a 
period of not less than three years all records required by this 
subpart, all commercial invoices or shipping documents, and all bills of 
lading received evidencing receipt and tax determination of the spirits. 
In addition, a copy of each approved formula returned to the 
manufacturer of eligible articles shall be retained for not less than 
three years from the date he files his last claim for drawback under the 
formula. The records, forms, and formulas shall be readily available 
during regular business hours for examination by appropriate ATF 
officers.

(Approved by the Office of Management and Budget under control number 
1512-0494)

[T.D. ATF-263, 52 FR 46595, Dec. 9, 1987, as amended by T.D. ATF-451, 66 
FR 21669, May 1, 2001. Redesignated by T.D. ATF-459, 66 FR 38550, July 
25, 2001]



               Subpart P--Requirements for Liquor Bottles

    Authority: Sec. 5301, 72 Stat. 1374; 26 U.S.C. 5301.

    Source: T.D. 6954, 33 FR 6818, May 4, 1968, unless otherwise noted. 
Redesignated at 40 FR 16835, Apr. 15, 1975, and further redesignated by 
T.D. ATF-459, 66 FR 38550, July 25, 2001.



Sec. 26.311  Scope of subpart.

    The provisions of this subpart shall apply only to liquor bottles 
having a capacity of 200 ml. or more except where expressly applied to 
liquor bottles of less than 200 ml. capacity.

[T.D. 6954, 33 FR 6818, May 4, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-34, 41 FR 46864, Oct. 26, 1976. 
Redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001]



Sec. 26.312  Standards of fill.

    Distilled spirits brought into the United States from Puerto Rico or 
the Virgin Islands in containers of 1 gallon (3.785 liters) or less for 
sale shall be in liquor bottles, including liquor bottles of less than 
200 ml capacity, which conform to the applicable standards of fill 
provided in Sec. 5.47 or Sec. 5.47a of this chapter. Empty liquor 
bottles, including liquor bottles of less than 200 ml capacity, which 
conform to the provisions of subpart E of part 5 or part 19 of this 
chapter, may be brought into the United States for packaging distilled 
spirits as provided in part 19 of this chapter.

[T.D. ATF-34, 41 FR 46864, Oct. 26, 1976, as amended by T.D. ATF-62, 44 
FR 71718, Dec. 11, 1979. Redesignated by T.D. ATF-459, 66 FR 38550, July 
25, 2001]



Sec. 26.314  Distinctive liquor bottles.

    (a) Application. Liquor bottles of distinctive shape or design, 
including bottles of less than 200 ml. capacity, may be brought into the 
United States from Puerto Rico or the Virgin Islands by an importer 
(filled bottles) or a bottler (empty bottles). For filled bottles, the 
importer shall submit ATF Form 5100.31 for approval prior to bringing 
such bottles into the United States. For empty bottles, the bottler 
shall obtain approval on ATF Form 5100.31 prior to using the bottles. 
The importer or bottler, as applicable, shall certify as to the total 
capacity of a representative sample bottle before closure (expressed in 
milliliters) on each copy of the form. In addition, the applicant shall 
affix a readily legible photograph (both front and back of the bottle) 
to the front of each copy of ATF Form 5100.31, along with the label(s) 
to be used on the bottle. The applicant shall not submit an actual 
bottle or an authentic model unless specifically requested to do so.
    (b) Approval. Properly submitted ATF Forms 5100.31 to bring 
distinctive liquor bottles (filled) into the United States from Puerto 
Rico or the Virgin Islands, or, properly submitted ATF Forms 5100.31 to 
use distinctive liquor bottles (empty) which have been brought into the 
United States from Puerto Rico or the Virgin Islands, shall be approved 
provided such bottles are found by the appropriate ATF officer to--
    (1) Meet the requirements of 27 CFR part 5;
    (2) Be distinctive;
    (3) Be suitable for their intended purpose;
    (4) Not jeopardize the revenue; and
    (5) Not be deceptive to the consumer.

The applicant shall keep a copy of the approved ATF Form 5100.31, 
including

[[Page 709]]

an approved photograph (both front and back) of the distinctive liquor 
bottle, on file at his premises. If ATF Form 5100.31 is disapproved, the 
applicant shall be notified of the appropriate ATF officer's decision 
and the reasons therefor. The applicant importer is responsible for 
furnishing a copy of the approved ATF Form 5100.31, including a 
photograph of the distinctive liquor bottle, to Customs officials at 
each affected port of entry where the merchandise is examined.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))

[T.D. ATF-114, 47 FR 43950, Oct. 5, 1982, as amended by T.D. ATF-242, 51 
FR 39526, Oct. 29, 1986; T.D. ATF-451, 66 FR 21670, May 1, 2001. 
Redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001]



Sec. 26.315  [Reserved]



Sec. 26.316  Bottles not constituting approved containers.

    The appropriate ATF officer is authorized to disapprove any bottle, 
including a bottle of less than 200 ml. capacity, for use as a liquor 
bottle which he determines to be deceptive. The Customs officer at the 
port of entry shall deny entry of any such bottle containing distilled 
spirits upon advice from the appropriate ATF officer that such bottle is 
not and approved container for distilled spirits for consumption in the 
United States.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))

[T.D. ATF-114, 47 FR 43950, Oct. 5, 1982. Redesignated by T.D. ATF-459, 
66 FR 38550, July 25, 2001]



Sec. 26.317  Bottles to be used for display purposes.

    Empty liquor bottles may be brought into the United States and may 
be furnished to liquor dealers for display purposes, provided each 
bottle is marked to show that it is to be used for such purpose. Any 
paper strip used to seal the bottle shall be of solid color and without 
design or printing, except that a border or a design, formed entirely of 
the legend ``not genuine--for display purposes only'' is permissible. 
Records shall be kept of the receipt and disposition of such bottles, 
showing the names and addresses of consignees, dates of shipment, and 
size, quantity, and description of bottles.



Sec. 26.318  Liquor bottles denied entry.

    Filled liquor bottles not conforming to the provisions of this 
subpart shall be denied entry into the United States: Provided, That, 
upon letterhead application, in triplicate, the appropriate ATF officer 
may, in nonrecurring cases, authorize the release from customs custody 
of distilled spirits in bottles, except those coming under the 
provisions of Sec. 26.316, which, through unintentional error, do not 
conform to the provisions of this subpart, if such officer finds that 
such release will not afford jeopardy to the revenue.

[T.D. ATF-451, 66 FR 21670, May 1, 2001. Redesignated and amended by 
T.D. ATF-459, 66 FR 38552, July 25, 2001]



Sec. 26.319  Used liquor bottles.

    The appropriate ATF officer may pursuant to letterhead application 
filed in triplicate, authorize an importer to receive liquor bottles 
assembled for him as provided in Sec. 194.263 of this chapter. Used 
liquor bottles so received may be stored at any suitable location 
pending return to Puerto Rico or the Virgin Islands. Records shall be 
kept of the receipt and disposition of such bottles.

[T.D. 6954, 33 FR 6818, May 4, 1968, as amended by T.D. 7006, 34 FR 
2250, Feb, 15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975, and 
further redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001]



                   Subpart Q--Miscellaneous Provisions



Sec. 26.331  Alternate methods or procedures.

    (a) Application. A person bringing liquors into the United States 
from Puerto Rico or the Virgin Islands who desires to use an alternate 
method or procedure in lieu of a method or procedure prescribed by this 
part shall file application, in triplicate, with the appropriate ATF 
officer.. If such person has several places of business at which he 
desires to use such alternate method or procedure, a separate 
application shall be submitted for each. Each application shall:

[[Page 710]]

    (1) Specify the name, address, and permit number of the person to 
which it relates;
    (2) State the purpose for which filed; and
    (3) Specifically describe the alternate method or procedure and set 
forth the reasons therefor.

No alternate method or procedure relating to the assessment, payment, or 
collection of tax shall be authorized under this paragraph.
    (b) Approval. When an application for use of an alternate method or 
procedure is received, the appropriate ATF officer shall determine 
whether the approval thereof would unduly hinder the effective 
administration of this part or would result in jeopardy to the revenue. 
The appropriate ATF officer, may approve the alternate method or 
procedure if he finds that:
    (1) Good cause has been shown for the use of the alternate method or 
procedure;
    (2) The alternate method or procedure is within the purpose of, and 
consistent with the effect intended by, the specifically prescribed 
method or procedure, and affords equivalent security to the revenue; and
    (3) The alternate method or procedure will not be contrary to any 
provision of law, and will not result in any increase in cost to the 
Government or hinder the effective administration of this part.

No alternate method or procedure shall be used until approval has been 
received from the appropriate ATF officer. Authorization for the 
alternate method or procedure may be withdrawn whenever in the judgment 
of the appropriate ATF officer, the revenue is jeopardized or the 
effective administration of this part is hindered by the continuation of 
such authorization.

(Approved by the Office of Management and Budget under control number 
1512-0352)

[T.D. ATF-2, 37 FR 22739, Oct. 21, 1972. Redesignated at 40 FR 16835, 
Apr. 15, 1975, and amended by T.D. ATF-172, 49 FR 14943, Apr. 16, 1984. 
Redesignated by T.D. ATF-459, 66 FR 38550, July 25, 2001]



PART 29--STILLS AND MISCELLANEOUS REGULATIONS--Table of Contents




Subparts A-B [Reserved]

                            Subpart C--Stills

Sec.
29.41  Scope of subpart.
29.42  Delegations of the Director.
29.43  Forms prescribed.
29.45  Meaning of terms.
29.47  Notice requirement; manufacture of stills.
29.49  Notice requirement; setup of still.
29.51  Failure to give notice; penalty.
29.53  Identification of distilling apparatus.
29.55  Registry of stills and distilling apparatus.
29.57  Failure to register; penalty.
29.59  Records.

Subparts D-Y [Reserved]

    Editorial Note: Nomenclature changes to part 29 appear by T.D. ATF-
462, 66 FR 42737, Aug. 15, 2001.

Subparts A-B [Reserved]



                            Subpart C--Stills

    Authority: 26 U.S.C. 5002, 5101, 5102, 5179, 5291, 5601, 5615, 5687, 
7805.

    Source: T.D. ATF-207, 50 FR 23682, June 5, 1985, unless otherwise 
noted. Redesignated by T.D. ATF-462, 66 FR 42737, Aug. 15, 2001.



Sec. 29.41  Scope of subpart.

    The regulations in this subpart relate to the manufacture, removal, 
and use of stills and condensers, and to the notice, registration, and 
recordkeeping requirements therefor.



Sec. 29.42  Delegations of the Director.

    All of the regulatory authorities of the Director contained in this 
part are delegated to appropriate ATF officers. These ATF officers are 
specified in ATF Order 1130.25, Delegation Order--Delegation of the 
Director's Authorities in 27 CFR Part 29--Stills and Miscellaneous 
Regulations. ATF delegation orders, such as ATF Order 1130.20, are 
available to any interested person

[[Page 711]]

by mailing a request to the ATF Distribution Center, P.O. Box 5950, 
Springfield, Virginia 22150-5950, or by accessing the ATF web site 
(http://www.atf.treas.gov/).

[T.D. ATF-439, 66 FR 8769, Feb. 2, 2001]



Sec. 29.43  Forms prescribed.

    (a) The appropriate ATF officer is authorized to prescribe all 
forms, including all notices and records, required by this subpart. All 
of the information called for in each form shall be furnished as 
indicated by the headings on the form and the instructions on or 
pertaining to the form. In addition, information called for in each form 
shall be furnished as required by this subpart. The form will be filed 
in accordance with the instructions for the form.
    (b) Forms may be requested from the ATF Distribution Center, P.O. 
Box 5950, Springfield, Virginia 22150-5950, or by accessing the ATF web 
site (http://www.atf.treas.gov/).

(Pub. L. 89-554, 80 Stat. 383, as amended (5 U.S.C. 552))

[T.D. ATF-207, 50 FR 23682, June 5, 1985; 50 FR 28572, July 15, 1985; 
T.D. ATF-439, 66 FR 8769, Feb. 2, 2001]



Sec. 29.45  Meaning of terms.

    When used in this subpart and in the forms prescribed under this 
subpart, where not otherwise distinctly expressed or manifestly 
incompatible with the intent thereof, terms shall have the meaning 
ascribed in this section. Words in the plural form shall include the 
singular, and vice versa, and words in the masculine shall include the 
feminine. The terms ``includes'' and ``including'' do not exclude things 
not enumerated which are in the same general class.
    Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this part by ATF Order 
1130.25, Delegation Order--Delegation of the Director's Authorities in 
27 CFR Part 29, Stills and Miscellaneous Regulations.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC.
    Distilling spirits or spirits. That substance known as ethyl 
alcohol, ethanol, or spirits of wine in any form (including all 
dilutions and mixtures thereof, from whatever source or by whatever 
process produced).
    Distilling. The conduct by any person of operations that constitute, 
as defined by 26 U.S.C. 5002, operations as a distiller. Such operations 
include: (a) The original manufacture of distilled spirits from mash, 
wort, or wash, or any materials suitable for the production of spirits; 
(b) the redistillation of spirits in the course of original manufacture; 
(c) the redistillation of spirits, or products containing spirits; (d) 
the distillation, redistillation, or recovery of spirits, denatured 
spirits, or articles containing spirits or denatured spirits; and (e) 
the redistillation or recovery of tax-free spirits.
    Distilling apparatus. A still or condenser, as defined in this 
section, and any other apparatus to be used for the purpose of 
distilling.
    Executed under the penalties of perjury. Signed with the prescribed 
declaration under the penalties of perjury as provided on or with 
respect to any document prescribed under this subpart or, where no form 
of declaration is prescribed, with the declaration: ``I declare under 
the penalties of perjury that this ---- (insert type of document), 
including the documents submitted in support thereof, has been examined 
by me and, to best of my knowledge and belief, is true, correct and 
complete.''
    Manufacturer of stills. Any person who manufactures any still or 
condenser, as defined in this section, or any other apparatus to be used 
for the purpose of distilling. The term includes a person furnishing 
separate parts of a complete still or condenser, of any kind, to a 
person who assembles same into a still or condenser for distilling and a 
person who procures materials or apparatus and converts same into a 
still or condenser for distilling.
    Person. An individual, a trust, estate, partnership, association, 
company, or corporation.

[[Page 712]]

    Still. Any apparatus capable of being used for separating alcoholic 
or spirituous vapors, or spiritous solutions, or spirits, from 
spirituous solutions or mixtures, but shall not include stills used for 
laboratory purposes or stills used for distilling water or other 
nonalcoholic materials where the cubic distilling capacity is one gallon 
or less.
    This chapter. Title 27, Code of Federal Regulations, Chapter I (27 
CFR Chapter I).
    United States. The several states and the District of Columbia.
    U.S.C. The United States Code.

[T.D. ATF-207, 50 FR 23682, June 5, 1985; 50 FR 28572, July 15, 1985, as 
amended by T.D. ATF-439, 66 FR 8770, Feb. 2, 2001]



Sec. 29.47  Notice requirement; manufacture of stills.

    (a) General. When required by letter issued by the appropriate ATF 
officer and until notified to the contrary by the appropriate ATF 
officer, every person who manufactures any still, boiler (double or pot 
still), condenser, or other apparatus to be used for the purpose of 
distilling shall give written notice before the still or distilling 
apparatus is removed from the place of manufacture.
    (b) Preparation. The notice will be prepared in letter form, 
executed under the penalties of perjury, and show the following 
information:
    (1) The name and address of the manufacturer;
    (2) The name and complete address of the person by whom the 
apparatus is to be used, and of any other person for, by, or through 
whom the apparatus is ordered or disposed of;
    (3) The distilling purpose for which the apparatus is to be used 
(distillation of spirits, redistillation of spirits or recovery of 
spirits, including denatured spirits and articles containing spirits or 
denatured spirits);
    (4) The manufacturer's serial number of the apparatus;
    (5) The type and kind of apparatus;
    (6) The distilling capacity of the apparatus; and
    (7) The date the apparatus is to be removed from the place of 
manufacture.
    (c) Filing. The notice will be filed in accordance with the 
instructions in the letter of the appropriate ATF officer. A copy of the 
notice will be retained at the place of manufacture as provided by 
Sec. 29.59.

(Approved by the Office of Management and Budget under control number 
1512-0341)

(Sec. 843, Pub. L. 98-369, 98 Stat. 818 (26 U.S.C. 5101))

[T.D. ATF-207, 50 FR 23682, June 5, 1985; 50 FR 28572, July 15, 1985; 
T.D. ATF-439, 66 FR 8769, Feb. 2, 2001]



Sec. 29.49  Notice requirement; setup of still.

    (a) General. When required by letter issued by the appropriate ATF 
officer, no still, boiler (double or pot still), condenser, or other 
distilling apparatus may be set up without the manufacturer of the still 
or distilling apparatus first giving written notice of that purpose.
    (b) Preparation. The notice will be prepared by the manufacturer in 
letter form, executed under the penalties of perjury, and will contain 
the information specified in the letter of the appropriate ATF officer.
    (c) Filing. The notice will be filed in accordance with the 
instructions in the letter of the appropriate ATF officer. A copy of the 
notice will be retained at the manufacturer's place of business as 
provided by Sec. 29.59.

(Approved by the Office of Management and Budget under control number 
1512-0341)

(Sec. 843, Pub. L. 98-369, 98 Stat. 818 (26 U.S.C. 5101))

[T.D. ATF-207, 50 FR 23682, June 5, 1985, as amended by T.D. ATF-439, 66 
FR 8769, Feb. 2, 2001]



Sec. 29.51  Failure to give notice; penalty.

    Failure to give notice of manufacture of still or notice of setup of 
still when required to do so is punishable by a fine of not more than 
$1,000 or imprisonment for not more than one year, or both, and any 
still, boiler (double or pot still), condenser, or other distilling 
apparatus to be used for the purpose of distilling which is removed or 
set up without the required notice having been given is forfeitable to 
the Government.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1405, as amended, 1412, as amended 
(26 U.S.C. 5615, 5687))

[[Page 713]]



Sec. 29.53  Identification of distilling apparatus.

    (a) General. Each still or condenser manufactured will be identified 
by the manufacturer as follows:
    (1) Name of manufacturer.
    (2) Address of manufacturer.
    (3) Manufacturer's serial number for the apparatus.
    (b) Marking requirements. The apparatus will be identified in a 
legible and durable manner. The required identification marks will be 
placed on the apparatus in a location where they will not be obscured or 
concealed.



Sec. 29.55  Registry of stills and distilling apparatus.

    (a) General. Every person having possession, custody, or control of 
any still or distilling apparatus set up shall, immediately on its being 
set up, register the still or distilling apparatus, except that a still 
or distilling apparatus not used or intended for use in the 
distillation, redistillation, or recovery of distilled spirits is not 
required to be registered. Registration may be accomplished by 
describing the still or distilling apparatus on the registration or 
permit application prescribed in this chapter for qualification under 26 
U.S.C. chapter 51 or, if qualification is not required under 26 U.S.C. 
chapter 51, on a letter application, and filing the application with the 
appropriate ATF officer. Approval of the application by the appropriate 
ATF officer will constitute registration of the still or distilling 
apparatus.
    (b) When still is set up. A still will be regarded as set up and 
subject to registry when it is in position over a furnace, or connected 
with a boiler so that heat may be applied, irrespective of whether a 
condenser is in position. This rule is intended merely as an 
illustration and should not be construed as covering all types of stills 
or condensers requiring registration.
    (c) Change in location or ownership. Where any distilling apparatus 
registered under this section is to be removed to another location, sold 
or otherwise disposed of, the registrant shall, prior to the removal or 
disposition, file a letter notice with the appropriate ATF officer. The 
letter notice will show the intended method of disposition (sale, 
destruction, or othewise), the name and complete address of the person 
to whom disposition will be made, and the purpose for which the 
apparatus will be used. After removal, sale, or other disposal, the 
person having possession, custody, or control of any distilling 
apparatus intended for use in distilling shall immediately register the 
still or distilling apparatus on its being set up or, if already set up, 
immediately on obtaining possession, custody, or control. The registrant 
shall also comply with the procedures prescribed in this chapter for 
amendment of the registration or permit application.

(Approved by the Office of Management and Budget under control number 
1512-0341)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1355, as amended (26 U.S.C. 5179))

[T.D. ATF-207, 50 FR 23682, June 5, 1985; 50 FR 28572, July 15, 1985; 50 
FR 30821, July 30, 1985, as amended by T.D. ATF-439, 66 FR 8770, Feb. 2, 
2001]



Sec. 29.57  Failure to register; penalty.

    Any person having possession, custody, or control of any still or 
distilling apparatus set up who fails to register the still or 
distilling apparatus is subject to a fine of not more than $10,000 or 
imprisonment of not more than 5 years, or both, and the still or 
distilling apparatus is forfeitable to the Government.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1398, as amended, 1405, as amended 
(26 U.S.C. 5601, 5615))



Sec. 29.59  Records.

    A copy of each notice of manufacture, or set up, of still required 
under the provisions of Sec. 29.47, or 29.49, shall be maintained, in 
chronological order, by the manufacturer at the premises where the still 
or distilling apparatus is manufactured. In addition, each manufacturer 
or vendor of stills shall maintain at their premises a record showing 
all stills and distilling apparatus (including those to be used for 
purposes other than distilling) manufactured, received, removed, or 
otherwise disposed of. The record will also show the name and address of 
the purchaser and the purpose for which each

[[Page 714]]

apparatus is to be used. Any commercial document on which all the 
required information has been recorded may be used for the record. The 
records will be kept available for a period of three years for 
inspection by appropriate ATF officers.

(Approved by the Office of Management and Budget under control number 
1512-0341)

[T.D. ATF-207, 50 FR 23682, June 5, 1985, as amended by T.D. ATF-439, 66 
FR 8770, Feb. 2, 2001]

Subparts D-Y [Reserved]



PART 30--GAUGING MANUAL--Table of Contents




                     Subpart A--Scope of Regulations

Sec.
30.1  Gauging of distilled spirits.

                         Subpart B--Definitions

30.11  Meaning of terms.

                     Subpart C--Gauging Instruments

30.21  Requirements.
30.22  Hydrometers and thermometers.
30.23  Use of precision hydrometers and thermometers.
30.24  Specific gravity hydrometers.
30.25  Use of precision specific gravity hydrometers.

                      Subpart D--Gauging Procedures

30.31  Determination of proof.
30.32  Determination of proof obscuration.

                        Determination of Quantity

30.36  General requirements.

                   Determination of Quantity by Weight

30.41  Bulk spirits.
30.42  Denatured spirits.
30.43  Packaged spirits.
30.44  Weighing containers.
30.45  Withdrawal gauge for packages.

                   Determination of Quantity by Volume

30.51  Procedure for measurement of bulk spirits.
30.52  Procedure for measurement of cased spirits.

                      Subpart E--Prescribed Tables

30.61  Table 1, showing the true percent of proof spirit for any 
          indication of the hydrometer at temperatures between zero and 
          100 degrees Fahrenheit.
30.62  Table 2, showing wine gallons and proof gallons by weight.
30.63  Table 3, for determining the number of proof gallons from the 
          weight and proof of spirituous liquor.
30.64  Table 4, showing the fractional part of a gallon per pound at 
          each percent and each tenth percent of proof of spirituous 
          liquor.
30.65  Table 5, showing the weight per wine gallon (at 60 degrees 
          Fahrenheit) and proof gallon at each percent of proof of 
          spirituous liquor.
30.66  Table 6, showing respective volumes of alcohol and water and the 
          specific gravity in both air and vacuum of spirituous liquor.
30.67  Table 7, for correction of volume of spirituous liquors to 60 
          degrees Fahrenheit.

                 Subpart F--Optional Gauging Procedures

30.71  Optional method for determination of proof for spirits containing 
          solids of 400 milligrams or less per 100 milliliters.
30.72  Recording obscuration by proprietors using the optional method 
          for determination of proof.

    Authority: 26 U.S.C. 7805.

    Source: T.D. ATF-198, 50 FR 8535, Mar. 1, 1985, unless otherwise 
noted.

    Editorial Note: Nomenclature changes to part 30 appear by T.D. ATF-
438, 66 FR 5481, Jan. 19, 2001.



                     Subpart A--Scope of Regulations



Sec. 30.1  Gauging of distilled spirits.

    (a) General. This part relates to the gauging of distilled spirits. 
The term ``gauging'' means the determination of the proof and the 
quantity of distilled spirits. The procedures prescribed in or 
authorized under the provisions of this part, except as may be otherwise 
authorized in this chapter, shall be followed in making any 
determination of quantity or proof of distilled spirits required by or 
under the authority of regulations in this chapter. The tables referred 
to in subpart E of this part appear in the ``Gauging Manual Embracing 
Instructions and Tables for Determining Quantity of Distilled Spirits by 
Proof and Weight'' as incorporated by reference in this part (see 
paragraph (c) of this section). These tables, together with their 
instructions, shall be used, wherever applicable, in making the 
necessary computations from gauge data.

[[Page 715]]

    (b) Tables referred to in subpart E of this part. Table 1 provides a 
method of correcting hydrometer indications at temperatures between 0 
and 100 degrees Fahrenheit to true proof. If distilled spirits contain 
dissolved solids, temperature correction of the hydrometer reading by 
the use of this table would result in apparent proof rather than true 
proof. Tables 2 and 3 show the gallonage of spirituous liquor according 
to weight and proof. Table 4 shows the gallons per pound at each one-
tenth proof from 1 to 200 proof. Table 5 shows the weight per wine 
gallon and proof gallon at each proof. Table 6 shows the volumes of 
alcohol and water and the specific gravity (air and vacuum) of 
spirituous liquor at each proof. Table 7 provides a means of 
ascertaining the volume (at 60 degree Fahrenheit) of spirits at various 
temperatures ranging from 18 degrees through 100 degrees Fahrenheit.
    (c) Incorporation by reference. The ``Gauging Manual Embracing 
Instructions and Tables for Determining Quantity of Distilled Spirits by 
Proof and Weight'' (ATF Publication 5110.6; November 1978) is 
incorporated by reference in this part. This incorporation by reference 
was approved by the Director of the Federal Register on March 23, 1981. 
This publication may be inspected at the Office of the Federal Register, 
800 North Capitol Street, NW., suite 700, Washington, DC, and is 
available from the Superintendent of Documents, U.S. Government Printing 
Office, Washington, DC 20402.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204); 
80 Stat. 383, as amended (5 U.S.C. 552(a)))



                         Subpart B--Definitions



Sec. 30.11  Meaning of terms.

    When used in this part, where not otherwise distinctly expressed or 
manifestly incompatible with the intent thereof, terms shall have the 
meanings ascribed in this section. Words in the plural form shall 
include the singular, and vice versa, and words importing the masculine 
gender shall include the feminine. The terms ``includes'' and 
``including'' do not exclude things not enumerated which are in the same 
general class.
    Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this part by ATF Order 
1130.17, Delegation Order--Delegation of the Director's Authorities in 
27 CFR Part 30--Gauging Manual.
    Bulk conveyance. Any tank car, tank truck, tank ship, tank barge, or 
other similar container approved by the appropriate ATF officer, 
authorized for the conveyance of spirits (including denatured spirits) 
in bulk.
    CFR. The Code of Federal Regulations.
    Container. Any receptacle, vessel, or form of package, bottle, tank, 
or pipeline used, or capable of use, for holding, storing, transferring 
or conveying distilled spirits.
    Denatured spirits or denatured alcohol. Spirits to which denaturants 
have been added pursuant to formulas prescribed in 27 CFR Part 21.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC.
    Gallon or wine gallon. The liquid measure equivalent to the volume 
of 231 cubic inches.
    I.R.C. The Internal Revenue Code of 1954, as amended.
    Package. Any cask, barrel, drum, or similar container approved under 
the provisions of this chapter.
    Proof. The ethyl alcohol content of a liquid at 60 degrees 
Fahrenheit, stated as twice the percent of ethyl alcohol by volume.
    Proof gallon. A United States gallon of proof spirits, or the 
alcoholic equivalent thereof.
    Proof spirits. That liquid which contains one-half its volume of 
ethyl alcohol of a specific gravity of seven thousand nine hundred and 
thirty-nine ten-thousandths (0.7939) in vacuum at 60 degrees Fahrenheit 
referred to water at 60 degrees Fahrenheit as unity.
    Spirits, spirituous liquor, or distilled spirits. That substance 
known as ethyl alcohol, ethanol, or spirits of wine in any form, 
including all dilutions and mixtures thereof, from whatever source or by 
whatever process produced, but

[[Page 716]]

not denatured spirits unless specifically stated. For the sole purpose 
of gauging wine and alcoholic flavoring materials on the bonded premises 
of a distilled spirits plant, such alcoholic ingredients shall have the 
same meaning described herein to spirits, spirituous liquor, or 
distilled spirits.
    This chapter. Title 27, Code of Federal Regulations, Chapter I (27 
CFR Chapter I).
    U.S.C. The United States Code.

[T.D. ATF-198, 50 FR 8535, Mar. 1, 1985, as amended by T.D. ATF-438, 66 
FR 5481, Jan. 19, 2001]



                     Subpart C--Gauging Instruments



Sec. 30.21  Requirements.

    (a) General. The proof of distilled spirits shall be determined by 
the use of gauging instruments as prescribed in this part.
    (b) Proprietors. Proprietors shall use only accurate hydrometers and 
thermometers that show subdivisions or graduations of proof and 
temperature which are at least as delimitated as the instruments 
described in Sec. 30.22.
    (c) Appropriate ATF officers. Appropriate ATF officers shall use 
only hydrometers and thermometers furnished by the Government. However, 
where this part requires the use of a specific gravity hydrometer, ATF 
officers shall use precision grade specific gravity hydrometers 
conforming to the provisions of Sec. 30.24, furnished by the proprietor. 
However, the appropriate ATF officer may authorize the use of other 
instruments approved by the appropriate ATF officer as being equally 
satisfactory for determination of specific gravity and for gauging. From 
time to time appropriate ATF officers shall verify the accuracy of 
hydrometers and thermometers used by proprietors.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))

[T.D. ATF-198, 50 FR 8535, Mar. 1, 1985, as amended by T.D. ATF-438, 66 
FR 5481, Jan. 19, 2001]



Sec. 30.22  Hydrometers and thermometers.

    The hydrometers used are graduated to read the proof of aqueous 
alcoholic solutions at 60 degrees Fahrenheit; thus, they read, 0 for 
water, 100 for proof spirits, and 200 for absolute alcohol. Because of 
temperature-density relationships and the selection of 60 degrees 
Fahrenheit for reporting proof, the hydrometer readings will be less 
than the true percent of proof at temperatures below 60 degrees 
Fahrenheit and greater than the true percent of proof at temperatures 
above 60 degrees Fahrenheit. Hence, corrections are necessary for 
hydrometer readings at temperatures other than 60 degrees Fahrenheit. 
Precision hydrometers shall be used for gauging spirits. Hydrometers and 
thermometers shall be used and the true percent of proof shall be 
determined in accordance with Sec. 30.31. Hydrometers are designated by 
letter according to range of proof and are provided in ranges and 
subdivisions of stems as follows:

------------------------------------------------------------------------
             Precision                        Range          Subdivision
------------------------------------------------------------------------
F..................................  0 to 20...............    0.2 deg.
G..................................  20 to 40..............    0.2 deg.
H..................................  40 to 60..............    0.2 deg.
I..................................  60 to 80..............    0.2 deg.
K..................................  75 to 95..............    0.2 deg.
L..................................  90 to 110.............    0.2 deg.
M..................................  105 to 125............    0.2 deg.
N..................................  125 to 145............    0.2 deg.
P..................................  145 to 165............    0.2 deg.
Q..................................  165 to 185............    0.2 deg.
R..................................  185 to 206............    0.2 deg.
------------------------------------------------------------------------

    Thermometers are designated by type according to range of degrees 
Fahrenheit and are provided in ranges and subdivisions of degrees as 
follows:

------------------------------------------------------------------------
                Type                          Range          Subdivision
------------------------------------------------------------------------
Pencil type........................  10 deg. to 100 deg....      1 deg.
V-back.............................  10 deg. to 100 deg....      1 deg.
Glass shell (earlier model)........  40 deg. to 100 deg....  \1/2\ deg.
Glass shell (later model)..........  40 deg. to 100 deg....  \1/4\ deg.
------------------------------------------------------------------------


(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))

[T.D. ATF-198, 50 FR 8535, Mar. 1, 1985, as amended by T.D. ATF-381, 61 
FR 37003, July 16, 1996]



Sec. 30.23  Use of precision hydrometers and thermometers.

    Care should be exercised to obtain accurate hydrometer and 
thermometer readings. In order to accomplish this result, the following 
precautions should be observed. Bulk spirits should be thoroughly 
agitated so that the test

[[Page 717]]

samples will be representative of the entire quantity. The hydrometers 
should be kept clean and free of any oily substance. Immediately before 
readings are taken, the glass cylinder containing the thermometer should 
be rinsed several times with the spirits which are to be gauged so as to 
bring both the cylinder and the thermometer to the temperature of the 
spirits (if time permits, it is desirable to bring both the spirits and 
the instruments to room temperature). If the outer surface of the 
cylinder becomes wet, it should be wiped dry to avoid the cooling effect 
of rapid evaporation. During the readings the cylinder should be 
protected from drafts or other conditions which might affect its 
temperature or that of the spirits which it contains. The hands should 
not be placed on the cylinder in such a manner as to warm the liquid 
contained therein. The hydrometer should be inserted in the liquid and 
the hydrometer bulb raised and lowered from top to bottom 5 or 6 times 
to obtain an even temperature distribution over its surface, and, while 
the hydrometer bulb remains in the liquid, the stem should be dried and 
the hydrometer allowed to come to rest without wetting more than a few 
tenths degrees of the exposed stem. Special care should be taken to 
ascertain the exact point at which the level of the surface liquid 
intersects the scale of proof in the stem of the hydrometer. The 
hydrometer and thermometer should be immediately read, as nearly 
simultaneously as possible. In reading the hydrometer, a sighting should 
be made slightly below the plane of the surface of the liquid and the 
line of sight should then be raised slowly, being kept perpendicular to 
the hydrometer stem, until the appearance of the surface changes from an 
ellipse to a straight line. The point where this line intersects the 
hydrometer scale is the correct reading of the hydrometer. When the 
correct readings of the hydrometer and the thermometer have been 
determined, the true percent of proof shall be ascertained from Table 1. 
Another sample of the spirits should then be taken and be tested in the 
same manner so as to verify the proof originally ascertained. Hydrometer 
readings should be made to the nearest 0.05 degree and thermometer 
readings should be made to the nearest 0.1 degree, and instrument 
correction factors, if any, should be applied. It is necessary to 
interpolate in Table 1 for fractional hydrometer and thermometer 
readings.

    Example. A hydrometer reads 192.85 deg. at 72.10  deg.F. The 
correction factors for the hydrometer and the thermometer, respectively 
are minus 0.03 deg. and plus 0.05 deg.. The corrected reading, then, is 
192.82 deg. at 72.15  deg.F.

From Table 1:
193.0 deg. at 72.0  deg.F.                                   =  190.2 de
                                                                       g
192.0 deg. at 72.0  deg.F.                                   =  189.1 de
                                                                       g
                                                           -------------
    Difference                                               =  1.1 deg.
192.0 deg. at 72.0  deg.F.                                   =  189.1 de
                                                                       g
192.0 deg. at 73.0  deg.F.                                   =  188.9 de
                                                                       g
                                                           -------------
    Difference                                               =  0.2 deg.
 

    The hydrometer difference (1.1 deg.) multiplied by the fractional 
degree of the hydrometer reading (0.82 deg.)=0.902.
    The temperature difference (0.2 deg.) multiplied by the fractional 
degree of the temperature reading (0.15 deg.)=0.03 deg..
Proof at 60 deg. F.=189.1+0.902-0.03=189.972 deg.=190.0 deg..
    As shown, the final proof is rounded to the nearest tenth of a 
degree of proof. In such cases, if the hundredths decimal is less than 
five, it will be dropped; if it is five or over, a unit will be added.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))

[T.D. ATF-198, 50 FR 8535, Mar. 1, 1985, as amended by T.D. ATF-381, 61 
FR 37004, July 16, 1996]



Sec. 30.24  Specific gravity hydrometers.

    (a) The specific gravity hydrometers furnished by proprietors to 
appropriate ATF officers shall conform to the standard specifications of 
the American Society for Testing and Materials (ASTM) for such 
instruments. Such specific gravity hydrometers shall be of a precision 
grade, standardization temperature 60  deg./60  deg.F., and provided in 
the following ranges and subdivisions:

------------------------------------------------------------------------
                           Range                             Subdivision
------------------------------------------------------------------------
1.0000 to 1.0500...........................................      0.0005
1.0500 to 1.1000...........................................      0.0005
1.1000 to 1.1500...........................................      0.0005
1.1500 to 1.2000...........................................      0.0005
1.2000 to 1.2500...........................................      0.0005
------------------------------------------------------------------------


No instrument shall be in error by more than 0.0005 specific gravity.

[[Page 718]]

    (b) A certificate of accuracy prepared by the instrument 
manufacturer for the instrument shall be furnished to the appropriate 
ATF officer.
    (c) Incorporation by reference. The ``Standard Specification for 
ASTM Hydrometers,'' (E 100-72 (1978)), published in the ``1980 Annual 
Book of ASTM Standards'' (STP 25 1062 (1980)), is incorporated by 
reference in this part. This incorporation by reference was approved by 
the Director of the Federal Register on March 23, 1981. This publication 
may be inspected at the Office of Federal Register, 800 North Capitol 
Street, NW., suite 700, Washington, DC, and is available from the 
American Society for Testing and Materials, 1916 Race Street, 
Philadelphia, Pennsylvania 19103.

(Sec. 201. Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204); 
80 Stat. 383, as amended (5 U.S.C. 552(a)))

[T.D. ATF-198, 50 FR 8535, Mar. 1, 1985, as amended by T.D. ATF-381, 61 
FR 37004, July 16, 1996]



Sec. 30.25  Use of precision specific gravity hydrometers.

    The provisions of Sec. 30.23 respecting the care, handling, and use 
of precision instruments shall be followed with respect to the care, 
handling, and use of precision grade specific gravity hydrometers. 
Specific gravity hydrometers shall be read to the nearest subdivision. 
Because of temperature density relationships and the selection of the 
standardization temperature of 60  deg./60  deg.F., the specific gravity 
readings will be greater at temperatures below 60 degrees Fahrenheit and 
less at temperatures above 60 degress Fahrenheit. Hence, correction of 
the specific gravity readings will be made for temperature other than 60 
degrees Fahrenheit. Such correction may be ascertained by dividing the 
specific gravity hydrometer reading by the applicable correction factor 
in Table 7.

    Example: The specific gravity hydrometer reading is 1.1525, the 
thermometer reading is 68 degrees Fahrenheit, and the true proof of the 
spirits is 115 degrees. The correct specific gravity reading will be 
ascertained as follows:
    (a) From Table 7, the correction factor for 115 deg. proof at 68 
deg.F. is 0.996.
    (b) 1.1525 divided by 0.996=1.1571, the corrected specific gravity.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))



                      Subpart D--Gauging Procedures



Sec. 30.31  Determination of proof.

    (a) General. The proof of spirits shall be determined to the nearest 
tenth degree which shall be the proof used in determining the proof 
gallons.
    (b) Solids content not more than 600 milligrams. Except as otherwise 
authorized by the appropriate ATF officer, the proof of spirits 
containing not more than 600 milligrams of solids per 100 milliliters of 
spirits shall be determined by the use of a hydrometer and thermometer 
in accordance with the provisions of Sec. 30.23 except that if such 
spirits contain solids in excess of 400 milligrams but not in excess of 
600 milligrams per 100 milliliters at gauge proof, there shall be added 
to the proof so determined the obscuration determined as prescribed in 
Sec. 30.32.
    (c) Solids content over 600 milligrams. If such spirits contain 
solids in excess of 600 milligrams per 100 milliliters at gauge proof, 
the proof shall be determined on the basis of true proof determined as 
follows:
    (1) By the use of a hydrometer and a thermometer after the spirits 
have been distilled in a small laboratory still and restored to the 
original volume and temperature by the addition of pure water to the 
distillate; or
    (2) By a recognized laboratory method which is equal or superior in 
accuracy to the distillation method.
    (d) Initial proof. Except when the proof of spirits is used in 
making the guage prescribed in 27 CFR 19.383 or in making a gauge for 
determination of tax, the initial determination of proof made on the 
bonded premises of a distilled spirits plant for such spirits may be 
used whenever a subsequent gauge is required to be made at that same 
plant provided that no material has been added to change the proof of 
the spirits.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1362, as amended 
(26 U.S.C. 5204, 5211))

[T.D. ATF-198, 50 FR 8535, Mar. 1, 1985]

[[Page 719]]



Sec. 30.32  Determination of proof obscuration.

    (a) General. Proof obscuration of spirits containing more than 400 
but not more than 600 milligrams of solids per 100 milliliters shall be 
determined by one of the following methods. The evaporation method may 
be used only for spirits in the range of 80-100 degrees at gauge proof.
    (b) Evaporation method. Evaporate the water and alcohol from a 
carefully measured 25 milliliter sample of spirits, dry the residue at 
100 degrees centigrade for 30 minutes and then weigh the residue 
precisely. Multiply the weight of the residue by 4 to determine the 
weight of solids in 100 milliliters. The resulting weight per 100 
milliliters multiplied by 4 will give the obscuration. Experience has 
shown that 0.1 gram (100 milligrams) of solids per 100 milliliters of 
spirits in the range of 80-100 degrees proof will obscure the true proof 
by 0.4 of one degree of proof. For example, if the weight of solids 
remaining after evaporation of 25 milliliters 0.125 gram, the amount of 
solids present in 100 milliliters of the spirits is 0.50 gram (4 times 
0.125). The obscuration is 4 times 0.50, which is two degrees of proof. 
This value added to the temperature corrected hydrometer reading will 
give the true proof.
    (c) Distillation method. Determine the apparent proof and 
temperature of the sample of spirits and then distill a carefully 
measured sample in a small laboratory still, and collect a quantity of 
the distillate, 1 or 2 milliliters less than the original sample. The 
distillate is adjusted to the original temperature and restored to the 
original volume by addition of distilled water. The proof of the 
restored distillate is then determined by use of a precision hydrometer 
and thermometer in accordance with the provisions of Sec. 13.23 to the 
nearest 0.1 degree of proof. The difference between the proof so 
determined and the apparent proof of the undistilled sample is the 
obscuration; or
    (d) Pycnometer method. Determine the specific gravity of the 
undistilled sample, distill and restore the samples as provided in 
paragraph (c) of this section and determine the specific gravity of the 
restored distillate by means of a pycnometer. The specific gravities so 
obtained will be converted to degrees of proof by interpolation of Table 
6 to the nearest 0.1 degree of proof. The difference in proof so 
obtained is the obscuration.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))

[T.D. ATF-198, 50 FR 8535, Mar. 1, 1985, as amended by T.D. ATF-381, 61 
FR 37004, July 16, 1996]

                        Determination of Quantity



Sec. 30.36  General requirements.

    The quantity determination of distilled spirits that are withdrawn 
from bond in bulk upon tax determination or payment shall be by weight. 
The quantity of other distilled spirits or denatured spirits may be 
determined by weight or by volume. When the quantity of distilled 
spirits or denatured distilled spirits is determined by volume, such 
determination may be by meter as provided in 27 CFR Part 19, or when 
approved by the appropriate ATF officer, another method or device.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))

[T.D. ATF-198, 50 FR 8535, Mar. 1, 1985]

                   Determination of Quantity by Weight



Sec. 30.41  Bulk spirits.

    When spirits (including denatured spirits) are to be gauged by 
weight in bulk quantities, the weight shall be determined by means of 
weighing tanks, mounted on accurate scales. Before each use, the scales 
shall be balanced at zero load; thereupon the spirits shall be run into 
the weighing tank and proofed as prescribed in Sec. 30.31. However, if 
the spirits are to be reduced in proof, the spirits shall be so reduced 
before final determination of the proof. The scales shall then be 
brought to a balanced condition and the weight of the spirits determined 
by reading the beam to the nearest graduation mark. From the weight and 
the proof thus ascertained, the quantity of the spirits in proof gallons 
shall be determined by reference to Table 4. However, in the case of 
spirits which contain solids in excess of 600 milligrams per 100 
milliliters, the quantity in proof gallons

[[Page 720]]

shall be determined by first ascertaining the wine gallons per pound of 
the spirits and multiplying the wine gallons per pound by the weight, in 
pounds, of the spirits being gauged and by the true proof (determined as 
prescribed in Sec. 30.31) and dividing the result by 100. The wine 
gallons per pound of spirits containing solids in excess of 600 
milligrams per 100 milliliters shall be ascertained by:
    (a) Use of a precision hydrometer and thermometer, in accordance 
with the provisions of Sec. 30.23, to determine the apparent proof of 
the spirits (if specific gravity at the temperature of the spirits is 
not more than 1.0) and reference to Table 4 for the wine gallons per 
pound, or
    (b) Use of a specific gravity hydrometer, in accordance with the 
provisions of Sec. 30.25, to determine the specific gravity of the 
spirits (if the specific gravity at the temperature of the spirits is 
more than 1.0) and dividing that specific gravity (corrected to 60 
degrees Fahrenheit) into the factor 0.120074 (the wine gallons per pound 
for water at 60 degrees Fahrenheit). When withdrawing a portion of the 
contents of a weighing tank, the difference between the quantity 
(ascertained by proofing and weighing) in the tank immediately before 
the removal of the spirits and the quantity (ascertained by proofing and 
weighing) in the tank immediately after the removal of the spirits shall 
be the quantity considered to be withdrawn.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))



Sec. 30.42  Denatured spirits.

    The quantity, in gallons, of any lot or package of specially 
denatured spirits may be determined by weighing it and then dividing its 
weight by the weight per gallon of the formula concerned, as given in 
the appropriate tables in subpart H of 27 CFR Part 21. In the case of 
completely denatured spirits, the gallonage of any lot or package may be 
ascertained by determining its weight and apparent proof (hydrometer 
indication, corrected to 60 degrees Fahrenheit) and then multiplying the 
weight of the wine gallons per pound factor shown in Table 4 for the 
(apparent) proof.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))



Sec. 30.43  Packaged spirits.

    When the quantity of spirits (including denatured spirits when 
gauged by weight) in packages, such as barrels, drums, and similar 
portable containers, is to be determined by gauge of the individual 
packages, such quantity shall, except as provided in paragraph (b) of 
this section, be determined by weighing each package on an accurate 
weighing beam or platform scale having a beam or dial showing weight in 
pounds and half pounds, where packages having a capacity in excess of 10 
wine gallons are to be gauged, or in pounds and ounces, or pounds and 
hundredths of a pound, where packages designed to hold 10 wine gallons 
or less are to be gauged. In either case the tare must be determined and 
subtracted from the gross weight to obtain the net weight. From the 
proof and weight ascertained, the quantity of the spirits in proof 
gallons shall be determined by reference to Table 2, 3, or 4. However, 
if the spirits contain solids in excess of 600 milligrams per 100 
milliliters, the proof gallons shall be determined as prescribed for 
such spirits in Sec. 30.41. Notwithstanding the provisions of this 
section or of Sec. 30.44, (a) gross weights and tares of packages being 
filled need not be taken in any case where the gauge of the spirits is 
not derived from such weights under the gauging procedure being 
utilized, and (b) meters, other devices, or other methods may be used 
for determining the quantity of spirits in individual packages, when 
such meter is used as provided in 27 CFR Part 19, or, when such other 
device or method has been approved by the appropriate ATF officer.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1362, as amended 
(26 U.S.C. 5204, 5211))

[T.D. ATF-198, 50 FR 8535, Mar. 1, 1985, as amended by T.D. ATF-381, 61 
FR 37004, July 16, 1996]



Sec. 30.44  Weighing containers.

    (a) Weighing containers of more than 10 wine gallons. The weight of 
containers

[[Page 721]]

having a capacity in excess of 10 wine gallons shall be determined and 
recorded in pounds and half pounds.
    (b) Weighing containers of 10 wine gallons or less. The weight for 
containers of a capacity of 10 wine gallons or less shall be determined 
in pounds and ounces, or pounds and hundredths of a pound, and shall be 
recorded in pounds and hundredths of a pound. The equivalent pounds and 
hundredths of pounds and the corresponding wine gallons and proof 
gallons shall be expressed as shown in the following table for the 
respective weights in pounds and ounces and proofs shown therein or, as 
applicable, computed in accordance with rules in this section.

                                               Weight of contents
----------------------------------------------------------------------------------------------------------------
                                                                                    Weight in
                                                                                   pounds and  Contents   Proof
                  Size of container, wine gallons                   Pounds   Ozs.  hundredths   in wine  gallons
                                                                                   of a pound   gallons
----------------------------------------------------------------------------------------------------------------
190 proof spirits:
    1.............................................................       6     13       6.81         1       1.9
    2.............................................................      13     10      13.63         2       3.8
    5.............................................................      34     00      34.00         5       9.5
    10............................................................      68     00      68.00        10      19.0
192 proof spirits:
    1.............................................................       6     13       6.81         1       1.9
    2.............................................................      13      9      13.56         2       3.8
    5.............................................................      33     13      33.81         5       9.6
    10............................................................      67     10      67.63        10      19.2
200 proof spirits:
    1.............................................................       6     10       6.63         1       2.0
    2.............................................................      13      4      13.25         2       4.0
    5.............................................................      33      1      33.06         5      10.0
    10............................................................      66      2      66.12        10      20.0
----------------------------------------------------------------------------------------------------------------

    (c) Containers of other proofs or sizes. Where containers of proofs 
or sizes not shown above are to be filled, the following rule may be 
used for ascertaining the weight of the spirits to be placed in the 
container: Divide the number of gallons representing the quantity of 
spirits to be placed in the container by the fractional part of a gallon 
equivalent to 1 pound, to obtain the weight of the spirits in pounds and 
fractions of a pound to two decimal places. Reduce the decimal fraction 
of a pound to ounces by multiplying by 16, calling any fraction of an 
ounce a whole ounce. The pounds and ounces thus obtained will determine 
the point to which the spirits must be weighed to produce the results 
desired. If the weight must be marked on the container in pounds and 
decimal fractions of a pound, it will be necessary to convert the ounces 
to hundredths of a pound. The fraction of a gallon equivalent to 1 pound 
at any given proof shall be ascertained by reference to Table 4. 
However, if the spirits contain solids in excess of 600 milligrams per 
100 milliliters, the fraction of a gallon equivalent to 1 pound shall be 
determined as prescribed for such spirits in Sec. 30.41.

    Example. It is desired to fill a 1-gallon can with precisely 1 wine 
gallon of 194 proof spirits:
    1.00 divided by 0.14866=6.73 pounds.
    0.73 multiplied by 16=11.68 ounces, rounded to 12 ounces.
    Weight of spirits--6 pounds, 12 ounces.
    Weight, if required, to be marked on can-6.75 pounds.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1362, as amended 
(26 U.S.C. 5204, 5211))



Sec. 30.45  Withdrawal gauge for packages.

    When wooden packages are to be individually gauged for withdrawal, 
actual tare of the packages shall be determined. The actual tare of a 
package shall be determined by weighing it after its contents (including 
rinse water, if any) have been temporarily removed to a separate 
container or vessel. Where the contents of packages have been 
temporarily removed for determination of tare, the proof, if any rinse 
water is added to the spirits, shall be determined after a thorough 
mixing of the rinse water and the spirits and before return of the 
spirits to the rinsed packages, and the gross weight shall be determined 
after the spirits and any added rinse water have been returned to the 
packages. In the case of metal packages the tare established at the time 
of filling may be used unless it appears to be incorrect. From the 
proofs and the net weights of the packages, the wine gallons (if 
desired) and the proof gallons of spirits shall be determined by the use 
of Table 2. However, if the spirits contain solids in excess of 600 
milligrams per 100 milliliters, the wine gallon and proof gallon 
contents shall be determined as prescribed for such spirits in 
Sec. 30.41. If

[[Page 722]]

either the weight or the proof is beyond the limitations of table 2, 
either table 3 or table 4 may be used.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))

                   Determination of Quantity by Volume



Sec. 30.51  Procedures for measurement of bulk spirits.

    Where the quantity of spirits (including denatured spirits) in bulk 
is to be determined by volume as authorized by this chapter, the 
measurement shall be made in tanks, by meters as provided in 27 CFR part 
19, or by other devices or methods authorized by the appropriate ATF 
official, or as otherwise provided in this chapter, or such measurement 
may be made in tank cars or tank trucks if calibration charts for such 
conveyances are provided and such charts have been accurately prepared, 
and certified as accurate, by engineers or other persons qualified to 
calibrate such conveyances. Volumetric measurements in tanks shall be 
made only in accurately calibrated tanks equipped with suitable 
measuring devices, whereby the actual contents can be correctly 
ascertained. If the temperature of spirits (including denatured spirits) 
is other than the standard of 60 degrees Fahrenheit, gallonage 
determined by volumetric measurements shall be corrected to the standard 
temperature by means of table 7. In the case of denatured spirits, the 
temperature-correction factor for the proof of the spirits used in 
denaturation will give sufficiently accurate results, except that the 
temperature-correction factor used for specially denatured spirits, 
Formula No. 18, should be that given in table 7 for 100 proof spirits. 
When the quantity of spirits, in wine gallons, has been determined by 
volumetric measurement, the number of proof gallons shall be obtained by 
multiplying the wine gallons by the proof of the spirits as determined 
under Sec. 30.31.

                                 Example

    Gauge glass reading inches--88.
    Wine gallons per inch--48.96.
    Temperature  deg.F--72.
    Proof of spirits--86.8.
    Temperature correction factor (Table 7)--0.995.
    48.96 W.G.x88=4308.48 wine gallons.
    4308.48 W.G.x0.995=4286.94 wine gallons.
    4286.94 W.G.x0.868=3721.06392=3721.1 proof gallons.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))

[T.D. ATF-198, 50 FR 8535, Mar. 1, 1985, as amended by T.D. ATF-381, 61 
FR 37004, July 16, 1996]



Sec. 30.52  Procedure for measurement of cased spirits.

    Where the quantity of spirits in a case is to be determined by 
volume, such determination shall be made by ascertaining the contents of 
one bottle in the case and multiplying that figure by the number of 
bottles in the case. For cases containing bottles filled according to 
the metric system of measure, the quantity determined shall be converted 
to wine gallons, as provided in Sec. 19.722 of this chapter. The wine 
gallons of spirits thus determined for one case may then be multiplied 
by the number of cases containing spirits at the same proof when 
determining the quantity of spirits for more than one case. The proof 
gallons of spirits in cases shall be determined by multiplying the wine 
gallons by the proof (divided by 100).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))



                      Subpart E--Prescribed Tables

    Note. The tables referred to in this subpart appear in their 
entirety in the ``Gauging Manual Embracing Instructions and Tables for 
Determining Quantity of Distilled Spirits by Proof and Weight'' which is 
incorporated by reference in this part (see Sec. 30.1).



Sec. 30.61  Table 1, showing the true percent of proof spirit for any indication of the hydrometer at temperatures between zero and 100 degrees Fahrenheit.

    This table shows the true percent of proof of distilled spirits for 
indications of the hydrometer likely to occur in practice at 
temperatures between zero and 100 degrees Fahrenheit and shall be used 
in determining the proof of spirits. The left-hand column contains the 
reading of the hydrometer and on the same horizontal line, in the body 
of the

[[Page 723]]

table, in the ``Temperature'' column corresponding to the reading of the 
thermometer is the corrected reading or ``true percent of proof.'' The 
table is computed for tenths of a percent.
    Example.

Temperature,  deg.F............................................       75
Hydrometer reading.............................................      193
True percent of proof..........................................    189.5
 


Where fractional readings are ascertained, the proper interpolations 
will be made (see Sec. 30.23). If the distilled spirits contain 
dissolved solids, temperature-correction of the hydrometer reading by 
the use of this table would result in apparent proof rather than true 
proof.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))



Sec. 30.62  Table 2, showing wine gallons and proof gallons by weight.

    The wine and proof gallon content by weight and proof of packages of 
distilled spirits usually found in actual practice will be ascertained 
from this table. The left-hand column contains the weights. The true 
percent of proof is shown on the heading of each page in a range from 90 
degrees to 200 degrees. Under the true percent of proof and on the same 
horizontal line with the weight will be found the wine gallons (at 60 
degrees Fahrenheit) and the proof gallons respectively. Where either the 
weight or the proof of a quantity of spirits is beyond the limitations 
of this table, the number of proof gallons may be ascertained by 
reference to Table 3. This table may also be used to ascertain the wine 
gallons (at 60 degrees Fahrenheit) and proof gallons of spirituous 
liquor containing dissolved solids where the weight, apparent proof 
(hydrometer indication corrected to 60 degrees Fahrenheit), and 
obscuration factor have been determined.
    Example.

334 lbs. of distilled spirits.
Apparent proof--96.0 deg..
Obscuration--0.8 deg..
True Proof 96.0 deg.+0.8 deg.=96.8 deg..
334 lbs. at 96.0 deg. apparent proof=42.8 wine gallons.
42.8 wine gallons x 96.8 deg.=41.4 proof gallons.

    In addition this table may be used to obtain the wine gallons, at 
the prevailing temperature, of most liquids within the range of the 
table, from the weight of the liquid and the uncorrected reading of the 
hydrometer stem. An application of this would be in determining the 
capacity of a package.

    Example. It is desired to determine, or to check the rated capacity 
of a package having a net weight of 395 pounds when completely filled 
with spirits having an uncorrected hydrometer reading of 113.0 deg.. The 
full capacity of the package, 51.5 wine gallons, would be found by 
referring to the table at 395 pounds and 113 deg. proof (hydrometer 
reading).

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1362, as amended 
(26 U.S.C. 5204, 5211))



Sec. 30.63  Table 3, for determining the number of proof gallons from the weight and proof of spirituous liquor.

    When the weight or proof of a quantity of distilled spirits is not 
found in Table 2, the proof gallons may be ascertained from Table 3. The 
wine gallons (at 60 degrees Fahrenheit) may be ascertained by dividing 
the proof gallons by the proof.

    Example. A tank car of spirits of 190 degrees of proof weighed 
60,378 pounds net. We find--

------------------------------------------------------------------------
                                                                 Proof
                                                                gallons
------------------------------------------------------------------------
60,000 pounds equal to.......................................   16,778.4
300 pounds equal to..........................................       83.9
70 pounds equal to...........................................       19.6
8 pounds equal to............................................        2.2
                                                              ----------
      Total..................................................   16,884.1
------------------------------------------------------------------------


That is, the total weight of 60,378 pounds of spirits at 190 proof is 
equal to 16,884.1 proof gallons. The equivalent gallonage for 70 pounds 
is found from the column 700 pounds by moving the decimal point one 
place to the left; that for 8 pounds from the column 800 pounds by 
moving the decimal point two places to the left.
    Example. A package of spirits at 86 proof weighed 321\1/2\ pounds 
net. We find--

------------------------------------------------------------------------
                                                                 Proof
                                                                gallons
------------------------------------------------------------------------
300 pounds equal to..........................................       32.7
20 pounds equal to...........................................        2.2
1 pound equal to.............................................         .1
\1/2\ pound equal to.........................................         .1
                                                              ----------
      Total..................................................       35.1
------------------------------------------------------------------------


That is, 321\1/2\ pounds of spirits at 86 proof is equal to 35.1 proof 
gallons. The equivalent gallonage for 20 pounds is found from the column 
200 pounds by moving the decimal point

[[Page 724]]

one place to the left; that for 1 pound from the column 100 pounds by 
moving the decimal point two places to the left; that for the \1/2\ 
pound from the column 500 pounds by moving the decimal point three 
places to the left.


Fractional gallons beyond the first decimal ascertained through use of 
this table will be dropped if less than 0.05 or will be added as 0.1 if 
0.05 or more. The wine gallons (at 60 degrees Fahrenheit) may be 
determined by dividing the proof gallons by the proof. For example: 35.1 
divided by 0.86 equals 40.8 wine gallons.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C.5204))



Sec. 30.64  Table 4, showing the fractional part of a gallon per pound at each percent and each tenth percent of proof of spirituous liquor.

    This table provides a method for use in ascertaining the wine gallon 
(at 60 degrees Fahrenheit) and/or proof gallon contents of containers of 
spirits by multiplying the net weight of the spirits by the fractional 
part of a gallon per pound shown in the table for spirits of the same 
proof. Fractional gallons beyond the first decimal will be dropped if 
less than 0.05 or will be added as 0.1 if 0.05 or more.

    Example. It is desired to ascertain the wine gallons and proof 
gallons of a tank of 190 proof spirits weighing 81,000 pounds.

81,000x0.14718=11,921.58=11,921.6 wine gallons.
81,000x0.27964=22,650.84=22,650.8 proof gallons.


This table may also be used for ascertaining the quantity of water 
required to reduce to a given proof. To do this, divide the proof 
gallons of spirits to be reduced by the fractional part of a proof 
gallon per pound of spirits at the proof to which the spirits are to be 
reduced, and subtract from the quotient the net weight of the spirits 
before reduction. The remainder will be the pounds of water needed to 
reduce the spirits to the desired proof.

    Example. It is desired to ascertain the quantity of water needed to 
reduce 1,000 pounds of 200 proof spirits, 302.58 proof gallons, to 190 
proof:

302.58 divided by 0.27964 equals 1,082.03 pounds, weight of spirits 
after reduction.
1.082.03 minus 1,000 equals 82.03 pounds, weight of water required to 
reduce to desired proof.


The slight variation between this table and Tables 2, 3, and 5 on some 
calculations is due to the dropping or adding of fractions beyond the 
first decimal in those tables. This table may also be used to determine 
the wine gallons (at 60 degrees Fahrenheit) of distilled spirits 
containing dissolved solids from the total weight of the liquid and its 
apparent proof (hydrometer indication, corrected to 60 degrees 
Fahrenheit). The proof gallons may then be found by multiplying the wine 
gallons by the true proof.

    Example.
5,350 pounds of blended whisky containing added solids

                                                      Temperature  deg.F
              .................................................75.0 deg.
                                                      Hydrometer reading
              .................................................92.0 deg.
                                                          Apparent proof
          .....................................................85.5 deg.
                                                             Obscuration
        .........................................................0.5 deg.

                                                              True proof
        .........................................................86.0 deg.


5,350.0 lbs.x0.12676 (W.G. per pound factor for apparent proof of 
85.5 deg.)=678.2 wine gallons
678.2 W.G.x0.86=583.3 proof gallons

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended 1362, as amended 
(26 U.S.C. 5204, 5211))



Sec. 30.65  Table 5, showing the weight per wine gallon (at 60 degrees Fahrenheit) and proof gallon at each percent of proof of spirituous liquor.

    This table may be used to ascertain the weight of any given number 
of wine gallons (at 60 degrees Fahrenheit) or proof gallons of spirits 
by multiplying the pounds per gallon by the given number of gallons of 
the spirits. The table should be especially useful where it is desired 
to weigh a precise quantity of spirits.

    Example. It is desired to ascertain the weight of 100 wine gallons 
of 190 proof spirits:

6.79434x100 equals 679.43 pounds, net weight of 100 wine gallons of 190 
proofs spirits.

    Example. It is desired to ascertain the weight of 100 proof gallons 
of 190 proof spirits.

3.57597x100 equals 357.60 pounds, net weight of 100 proof gallons of 190 
proof spirits.


The slight variation between this table and Tables 2 and 3 on some 
calculations is due to dropping or adding of fractions beyond the first 
decimal on those tables. This table also shows the weight per wine 
gallon (at the prevailing temperature) corresponding to

[[Page 725]]

each uncorrected reading of a proof hydrometer.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))



Sec. 30.66  Table 6, showing respective volumes of alcohol and water and the specific gravity in both air and vacuum of spirituous liquor.

    This table provides an alternate method for use in ascertaining the 
quantity of water needed to reduce the strength of distilled spirits by 
a definite amount. To do this, divide the alcohol in the given strength 
by the alcohol in the required strength, multiply the quotient by the 
water in the required strength, and subtract the water in the given 
strength from the product. The remainder is the number of gallons of 
water to be added to 100 gallons of spirits of the given strength to 
produce a spirit of a required strength.

    Example. It is desired to reduce spirits of 191 proof to 188 proof. 
We find that 191 proof spirits contains 95.5 parts alcohol and 5.59 
parts water, and 188 proof spirits contains 94.0 parts alcohol and 7.36 
parts water.

95.5 (the strength of 100 wine gallons of spirits at 191 proof) divided 
by 94.0 (the strength of 100 wine gallons of spirits at 188 proof) 
equals 1.01.
7.36 (the water in 188 proof) multiplied by 1.01 equals 7.43.
7.43 less 5.59 (the water in 191 proof spirits) equal 1.84 gallons of 
water to be added to each 100 wine gallons of 191 proof spirits to be 
reduced.


This rule is applicable for reducing to any proof; but when it is 
desired to reduce to 100 proof, it is sufficient to point off two 
decimals in the given proof, multiply by 53.73, and deduct the water in 
the given strength. Thus, to reduce 112 proof spirits to 100 proof:

1.12x53.73-47.75 equals 12.42 gallons of water to be added to each 100 
wine gallons of spirits to be reduced.


This table may also be used to obtain the proof gallonage of spirituous 
liquor according to weight and percent of proof.

    Example. It is desired to determine the number of gallons in 400 
pounds of spirits of 141 percent of proof. Multiply the weight of one 
gallon of water in air by the specific gravity in air of the spirits--
8.32823 by 0.88862--the product (7.40063) divided into 400 gives 54.049 
wine gallons, which rounded to the nearest hundredth is 54.05 and 
multiplied by 1.41 gives 76.2 proof gallons. In rounding off where the 
decimal is less than five, it will be dropped; if it is five or over a 
unit will be added.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))



Sec. 30.67  Table 7, for correction of volume of spirituous liquors to 60 degrees Fahrenheit.

    This table is prescribed for use in correcting spirits to volume at 
60 degrees Fahrenheit. To do this, multiply the wine gallons of spirits 
which it is desired to correct to volume at 60 degrees Fahrenheit by the 
factor shown in the table at the percent of proof and temperature of the 
spirits. The product will be the corrected gallonage at 60 degrees 
Fahrenheit. This table is also prescribed for use in ascertaining the 
true capacity of containers where the wine gallon contents at 60 degrees 
Fahrenheit have been determined by weight in accordance with Tables 2, 
3, 4, or 5. This is accomplished by dividing the wine gallons at 60 
degrees Fahrenheit by the factor shown in the table at the percent of 
proof and temperature of the spirits. The quotient will be the true 
capacity of the container.

    Example. It is desired to ascertain the volume at 60 degrees 
Fahrenheit of 1,000 wine gallons of 190 proof spirits at 76 degrees 
Fahrenheit:

1,000x0.991 equals 991 wine gallons, the corrected gallonage at 60 
degrees Fahrenheit.
    Example. It is desired to ascertain the capacity of a container of 
190 proof spirits at 76 degrees Fahrenheit, shown by Table 2 to contain 
55.1 wine gallons at 60 degrees Fahrenheit:

55.1 divided by 0.991 equals 55.6 wine gallons, the true capacity of the 
container when filled with spirits of 60 degrees temperature.


It will be noted the table is prepared in multiples of 5 percent of 
proof and 2 degrees temperature. Where the spirits to be corrected are 
of an odd temperature, one-half of the difference, if any, between the 
factors for the next higher and lower temperature, should be added to 
the factor for the next higher temperature.

    Example. It is desired to correct spirits of 180 proof at 51 degrees 
temperature:

1.006 (50 deg.)-1.005 (52 deg.)=0.001 divided by 2=0.0005

[[Page 726]]

0.0005+1.005=1.0055 correction factor at 51  deg.F.
    Example. It is desired to correct spirits of 180 proof at 53 degrees 
temperature:

1.005 (52 deg.)-1.003 (54 deg.)=0.002 divided by 2=0.001
0.001+1.003=1.004 correction factor at 53  deg.F.


Where the percent of proof is other than a multiple of five, the 
difference, if any, between the factors for the next higher and lower 
proofs should be divided by five and multiplied by the degrees of proof 
beyond the next lower proof, and the fractional product so obtained 
should be added to the factor for the next lower proof (if the 
temperature is above 60 degrees Fahrenheit, the fractional product so 
obtained must be subtracted from the factor for next lower proof), or if 
it is also necessary to correct the factor because of odd temperature, 
to the temperature corrected factor for the next lower proof.

    Example. It is desired to ascertain the correction factor for 
spirits of 112 proof at 47 degrees temperature:

1.006 (46 deg.)-1.005 (48 deg.)=0.001 divided by 2=0.0005
0.0005+1.005=1.0055 corrected factor at 47  deg.F.
1.007 (115 proof)-1.006 (110 proof)=0.001
0.001 divided by 5=0.0002 (for each percent of proof)x2 (for 112 
proof)=0.0001
0.0004=1.0055 (corrected factor at 47  deg.F.)=1.0059 correction factor 
to be used for 112 proof at 47  deg.F
    Example. It is desired to ascertain the correction factor for 
spirits of 97 proof at 93 degrees temperature:

0.986 (92 deg.)-0.985 (94 deg.)=0.001 divided by 2=0.0005
0.0005+0.985=0.9855 corrected factor at 93  deg.F.
0.986 (95 proof)-0.985 (100 proof)=0.001
0.001 divided by 5=0.0002 (for each percent of proof)x2 (for 97 
proof)=0.0004
0.9855 (corrected factor at 93  deg.F.)=0.0005=0.9851 correction factor 
to be used for 97 proof at 93  deg.F.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended (26 U.S.C. 5204))



                 Subpart F--Optional Gauging Procedures



Sec. 30.71  Optional method for determination of proof for spirits containing solids of 400 milligrams or less per 100 milliliters.

    The proof of spirits shall be determined to the nearest tenth degree 
which shall be the proof used in determining the proof gallons and all 
fractional parts thereof to the nearest tenth proof gallon. The proof of 
spirits containing solids of 400 milligrams or less per 100 milliliters 
shall be determined by the use of a hydrometer and a thermometer in 
accordance with the provisions of Sec. 30.23. However, notwithstanding 
the provisions of Sec. 30.31, the proprietor may, at his option, add to 
the proof so determined the obscuration determined as prescribed in 
Sec. 30.32.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1362, as amended 
(26 U.S.C. 5211))



Sec. 30.72  Recording obscuration by proprietors using the optional method for determination of proof.

    Any proprietor using the optional method for determination of proof 
for spirits containing solids of 400 milligrams or less per 100 
milligrams as provided in Sec. 30.71 shall record the obscuration so 
determined on the record of gauge required by 27 CFR part 19.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1362, as amended 
(26 U.S.C. 5211))

[[Page 727]]



                          SUBCHAPTER B--TOBACCO





PART 40--MANUFACTURE OF TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES--Table of Contents




                     Subpart A--Scope of Regulations

Sec.
40.1  Manufacture of tobacco products and cigarette papers and tubes.
40.2  Territorial extent.

                         Subpart B--Definitions

40.11  Meaning of terms.

                            Subpart C--Taxes

40.21  Cigar tax rates.
40.22  Determination of sale price of large cigars.
40.23  Cigarette tax rates.
40.24  Classification of cigarettes.
40.25  Smokeless tobacco tax rates.
40.25a  Pipe tobacco and roll-your-own tobacco tax rates.
40.26  Persons liable for tax.
40.27  Assessment.

                Subpart Ca--Special (Occupational) Taxes

40.31  Liability for special tax.
40.32  Rates of special tax.
40.33  Special tax returns.
40.34  Employer identification number.
40.35  Issuance, distribution, and examination of special tax stamps.
40.36  Changes in special tax stamps.

                  Subpart D--Administrative Provisions

40.41  Forms prescribed.
40.42  Authority of ATF officers to enter premises.
40.43  Interference with administration.
40.44  Disposal of forfeited, condemned, and abandoned tobacco products.
40.45  Alternate methods or procedures.
40.46  Emergency variations from requirements.
40.47  Other businesses within factory.
40.48  Penalties and forfeitures.
40.49  Delegations of the Director.

         Subpart E--Qualification Requirements for Manufacturers

40.61  Qualification--General.
40.61a  Transitional rule.
40.62  Application for permit.
40.63  Corporate documents.
40.64  Articles of partnership or association.
40.65  Trade name certificate.
40.66  Bond.
40.67  Blanket bond.
40.68  Power of attorney.
40.69  Factory premises.
40.70  Separation of and access to factory.
40.71  Factories established prior to October 1, 1961.
40.72  Use of factory premises.
40.73  Additional information.
40.74  Investigation of applicant.
40.75  Issuance of permit.
40.76  Retention of permit and supporting documents.

    Subpart F--Changes After Original Qualification of Manufacturers

                             Changes in Name

40.91  Change in individual name.
40.92  Change in trade name.
40.93  Change in corporate name.

                    Changes in Ownership and Control

40.101  Fiduciary successor.
40.102  Transfer of ownership.
40.103  Change in officers, directors, or stockholders of a corporation.
40.104  Change in control of a corporation.

                     Changes in Location of Factory

40.111  Change in location within same region.
40.112  Change in address.
40.113  Change in location to another region.
40.114  Extension or curtailment of factory.

          Subpart G--Bonds and Extensions of Coverage of Bonds

40.131  Corporate surety.
40.132  Deposit of securities in lieu of corporate surety.
40.133  Amount of individual bond.
40.134  Amount of blanket bond.
40.135  Strengthening bond.
40.136  Superseding bond.
40.137  Extension of coverage of bond.
40.138  Approval of bond and extension of coverage of bond.
40.139  Termination of bond.
40.140  Release of pledged securities.

                 Subpart H--Operations by Manufacturers

         Determination and Payment of Taxes on Tobacco Products

40.161  Determination of tax and method of payment.
40.162  Semimonthly tax return.
40.163  Semimonthly tax return periods.
40.164  Special rule for taxes due for the month of September (effective 
          after December 31, 1994).

[[Page 728]]

40.165  Times for filing semimonthly return.
40.165a  Payment of tax by electronic fund transfer.
40.166  Default, prepayment of tax required.
40.167  Prepayment tax return.
40.168  Remittance with return.
40.169  Employer identification number.
40.170  Application for employer identification number.
40.171  Execution and filing of Form SS-4.

                                 Records

40.181  General.
40.182  Record of tobacco.
40.183  Record of tobacco products.
40.184  Record of removals subject to tax.
40.185  Retention of records.
40.186  Record in support of transfers in bond.
40.187  Record of sales prices of large cigars.

                         Inventories and Reports

40.201  Inventories.
40.202  Reports.
40.203  Statistical classification of large cigars.

                                Packages

40.211  Package.
40.212  Mark.
40.213  Tobacco products labeled for export.
40.214  Notice for cigars.
40.215  Notice for cigarettes.
40.216  Notice for smokeless tobacco.
40.216a  Notice for pipe tobacco.
40.216b  Notice for roll-your-own tobacco.
40.216c  Package use-up rule.
40.217  Repackaging.

                Exemption From Taxes on Tobacco Products

40.231  Consumption by employees.
40.232  Experimental purposes.
40.233  Transfer in bond.
40.234  Removal for use of the United States.
40.235  Removal for export purposes.
40.236  Release from customs custody.

              Other Provisions Relating to Tobacco Products

40.251  Emergency storage.
40.252  Reduction of tobacco products to materials.
40.253  Destruction.
40.254  Receipt into factory.
40.255  Shortages and overages in inventory.

                   Subpart I--Claims by Manufacturers

                                 General

40.281  Abatement of assessment.
40.282  Allowance of tax.
40.283  Credit or refund of tax.
40.284  Remission of tax liability.
40.285  [Reserved]
40.286  Refund of overpayment.
40.287  Remission of tax liability on shortage.

                   Tobacco Products Lost or Destroyed

40.301  Action by claimant.

               Tobacco Products Withdrawn From the Market

40.311  Action by claimant.
40.312  Action by regional director (compliance).
40.313  Disposition of tobacco products and schedule.

 Subpart J--Suspension and Discontinuance of Operations by Manufacturers

40.331  Discontinuance of operations.
40.332  Suspension and revocation of permit.

          Subpart K--MANUFACTURE OF CIGARETTE PAPERS AND TUBES

                                  Taxes

Sec.
40.351  Cigarette papers.
40.352  Cigarette tubes.
40.353  Persons liable for tax.
40.354  Determination of tax and method of payment.
40.355  Return of manufacturer.
40.356  Adjustments in the return of manufacturer.
40.357  Payment of tax by electronic fund transfer.
40.358  Assessment.
40.359  Employer identification number.
40.360  Application for employer identification number.
40.361  Execution and filing of Form SS-4.

                      Special (Occupational) Taxes

40.371  Liability for special tax.
40.372  Rate of special tax.
40.373  Special tax returns.
40.374  Issuance, distribution, and examination of special tax stamps.
40.375  Changes in special tax stamps.

                                 General

40.382  Authority of ATF officers to enter premises.
40.383  Interference with administration.
40.384  Disposal of forfeited, condemned, and abandoned cigarette papers 
          and tubes.
40.385  Alternate methods or procedures.
40.386  Emergency variations from requirements.
40.387  Penalties and forfeitures.

              Qualification Requirements for Manufacturers

                         Original Qualifications

40.391  Persons required to qualify.

[[Page 729]]

40.392  Bond.
40.393  Power of attorney.
40.394  Notice of approval of bond.

                  Changes After Original Qualification

40.395  Change in name.
40.396  Change in proprietorship.
40.397  Change in location.

                Bonds and Extensions of Coverage of Bonds

40.401  Corporate surety.
40.402  Two or more corporate sureties.
40.403  Deposit of securities in lieu of corporate surety.
40.404  Amount of bond.
40.405  Strengthening bond.
40.406  Superseding bond.
40.407  Extension of coverage of bond.
40.408  Approval of bond and extension of coverage of bond.
40.409  Termination of liability of surety under bond.
40.410  Release of pledged securities.

                       Operations by Manufacturers

                                 Records

40.421  General.

                                 Reports

40.422  General.
40.423  Opening.
40.424  Monthly.
40.425  Special.
40.426  Closing.

                               Inventories

40.431  General.
40.432  Opening.
40.433  Special.
40.434  Closing.

                           Document Retention

40.435  General.

                                Packages

40.441  General.

                        Miscellaneous Operations

40.451  Transfer in bond.
40.452  Release from customs custody.
40.453  Use of the United States.
40.454  Removal for export purposes.

                  Permanent Discontinuance of Business

40.461  Discontinuance of operations.

                         Claims by Manufacturers

                                 General

40.471  Abatement.
40.472  Allowance.
40.473  Credit or refund.
40.474  Remission.

                            Lost or Destroyed

40.475  Action by claimant.

                        Withdrawn From the Market

40.476  Action by claimant.
40.477  Action by regional director (compliance).
40.478  Disposition of cigarette papers and tubes and schedule.

    Authority: 26 U.S.C. 5142, 5143, 5146, 5701, 5703-5705, 5711-5713, 
5721-5723, 5731, 5741, 5751, 5753, 5761-5763, 6061, 6065, 6109, 6151, 
6301, 6302, 6311, 6313, 6402, 6404, 6423, 6676, 6806, 7011, 7212, 7325, 
7342, 7502, 7503, 7606, 7805; 31 U.S.C. 9301, 9303, 9304, 9306.

    Source: 26 FR 8174, Aug. 31, 1961, unless otherwise noted. 
Redesignated at 40 FR 16835, Apr. 15, 1975; 54 FR 48839, Nov. 27, 1989; 
T.D. ATF-460, 66 FR 39093, July 27, 2001.

    Editorial Note: Nomenclature changes to part 40 appear by T.D. ATF-
460, 66 FR 39094-39096, July 27, 2001 and by T.D. ATF-464, 66 FR 43479, 
Aug. 20, 2001.



                     Subpart A--Scope of Regulations



Sec. 40.1  Manufacture of tobacco products and cigarette papers and tubes.

    This part contains regulations relating to the manufacture of 
tobacco products and cigarette papers and tubes; the payment by 
manufacturers of tobacco products and cigarette papers and tubes of 
internal revenue taxes imposed by 26 U.S.C. chapter 52; and the 
qualification of and operations by manufacturers of tobacco products.

[T.D. ATF-384, 61 FR 54085, Oct. 17, 1996]



Sec. 40.2  Territorial extent.

    The provisions of the regulations in this part shall apply in the 
several States of the United States and the District of Columbia.



                         Subpart B--Definitions



Sec. 40.11  Meaning of terms.

    When used in this part and in forms prescribed under this part, the 
following terms shall have the meanings given in this section, unless 
the context clearly indicates otherwise. Words in the plural form shall 
include the singular, and vice versa, and words indicating the masculine 
gender shall include the feminine. The terms ``includes'' and 
``including'' do not exclude

[[Page 730]]

things not listed which are in the same general class.
    Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this part by ATF Order 
1130.30, Delegation Order--Delegation of the Director's Authorities in 
27 CFR Part 40--Manufacture of Tobacco Products and Cigarette Papers and 
Tubes.
    Associate Director (Compliance Operations). The Associate Director 
(Compliance Operations) in the Bureau of Alcohol, Tobacco and Firearms, 
who is responsible to, and functions under the direction and supervision 
of, the Director.
    ATF. The Bureau of Alcohol, Tobacco and Firearms.
    ATF officer. An officer of the Bureau of Alcohol, Tobacco and 
Firearms (ATF) authorized to perform any function relating to the 
administration or enforcement of this part.
    Bank. Any commercial bank.
    Banking day. Any day during which a bank is open to the public for 
carrying on substantially all its banking functions.
    CFR. The Code of Federal Regulations.
    Chewing tobacco. Any leaf tobacco that is not intended to be smoked.
    Cigar. Any roll of tobacco wrapped in leaf tobacco or in any 
substance containing tobacco (other than any roll of tobacco which is a 
cigarette within the meaning of paragraph (2) of the definition for 
cigarette).
    Cigarette. (1) Any roll of tobacco wrapped in paper or in any 
substance not containing tobacco, and
    (2) Any roll of tobacco wrapped in any substance containing tobacco 
which, because of its appearance, the type of tobacco used in the 
filler, or its packaging and labeling, is likely to be offered to, or 
purchased by, consumers as a cigarette described in paragraph (1) of 
this definition.
    Cigarette paper. Paper, or any other material except tobacco, 
prepared for use as a cigarette wrapper.
    Cigarette tube. Cigarette paper made into a hollow cylinder for use 
in making cigarettes.
    Commercial bank. A bank, whether or not a member of the Federal 
Reserve System, which has access to the Federal Reserve Communications 
System (FRCS) or Fedwire. The ``FRCS'' or ``Fedwire'' is a 
communications network that allows Federal Reserve System member banks 
to effect a transfer of funds for their customers (or other commercial 
banks) to the Treasury Account at the Federal Reserve Bank in New York.
    Determine. To establish enough information about taxable products at 
the time of removal to calculate the tax, specifically the quantity 
(pounds or number) and kind (for example, cigarettes, snuff, paper 
tubes). Where the tax rate depends on additional information (such as 
number of cigarette papers to a set before January 1, 2000 or sale price 
of large cigars), that information must also be established as part of 
tax determination.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, 
Department of the Treasury, Washington, DC.
    Director of the service center. The Director, Internal Revenue 
Service Center, in any of the Internal Revenue regions.
    District director. A district director of internal revenue.
    Electronic fund transfer or EFT. Any transfer of funds effected by a 
manufacturer's commercial bank, either directly or through a 
correspondent banking relationship, via the Federal Reserve 
Communications System (FRCS) or Fedwire to the Treasury Account at the 
Federal Reserve Bank of New York.
    Export warehouse. A bonded internal revenue warehouse for the 
storage of tobacco products and cigarette papers and tubes, upon which 
the internal revenue tax has not been paid for subsequent shipment to a 
foreign country, Puerto Rico, the Virgin Islands, or a possession of the 
United States, or for consumption beyond the jurisdiction of the 
internal revenue laws of the United States.
    Export warehouse proprietor. Any person who operates an export 
warehouse.
    Factory. The premises of a manufacturer of tobacco products as 
described in his permit issued under 26 U.S.C.

[[Page 731]]

chapter 52, or the premises of a manufacturer of cigarette papers and 
tubes on which such business is conducted.
    Fiscal year. The period which begins October 1 and ends on the 
following September 30.
    In bond. The status of tobacco products and cigarette papers and 
tubes, which come within the coverage of a bond securing the payment of 
internal revenue taxes imposed by 26 U.S.C. 5701 or 7652, and in respect 
to which such taxes have not been determined as provided by regulations 
in this chapter, including (a) such articles in a factory, (b) such 
articles removed, transferred, or released, pursuant to 26 U.S.C. 5704, 
and with respect to which relief from the tax liability has not 
occurred, and (c) such articles on which the tax has been determined, or 
with respect to which relief from the tax liability has occurred, which 
have been returned to the coverage of a bond.
    Large cigarettes. Cigarettes weighing more than three pounds per 
thousand.
    Large cigars. Cigars weighing more than three pounds per thousand.
    Manufacturer of cigarette papers and tubes. Any person who 
manufactures cigarette paper, or makes up cigarette paper into tubes, 
except for his own personal use or consumption.
    Manufacturer of tobacco products. Any person who manufactures 
cigars, cigarettes, smokeless tobacco, pipe tobacco, or roll-your-own 
tobacco but does not include:
    (1) A person who produces tobacco products solely for that person's 
own consumption or use; or
    (2) A proprietor of a Customs bonded manufacturing warehouse with 
respect to the operation of such warehouse.
    Package. The immediate container in which tobacco products or 
cigarette papers or tubes are put up in by the manufacturer and offered 
for sale or delivery to the consumer.
    Permit number. The combination of (1) the letters indicating the 
kind of permit, (2) the identifying number, and (3) the name or 
abbreviation of the State (or the District of Columbia) in which the 
factory is located, as assigned to the permit by the regional director 
(compliance); for example, ``TP-999-Utah''.
    Person. An individual, partnership, association, company, 
corporation, estate, or trust.
    Pipe tobacco. Any tobacco which, because of its appearance, type, 
packaging, or labeling, is suitable for use and likely to be offered to, 
or purchased by, consumers as tobacco to be smoked in a pipe.
    Region. A Bureau of Alcohol, Tobacco and Firearms Region.
    Regional Director (compliance). The principal regional official 
responsible for administering regulations in this part.
    Removal or remove. The removal of tobacco products or cigarette 
papers or tubes from the factory or release from customs custody, 
including the smuggling of other unlawful importation of such articles 
into the United States.
    Roll-your-own tobacco. Any tobacco which, because of its appearance, 
type, packaging, or labeling, is suitable for use and likely to be 
offered to, or purchased by, consumers as tobacco for making cigarettes.
    Sale price. The price for which large cigars are sold by the 
manufacturer, determined in accordance with Sec. 40.22 and used for 
computation of the tax.
    Service center. An Internal Revenue Service Center in any of the 
Internal Revenue regions.
    Service center director. A director of an internal revenue service 
center.
    Sets. Any collection, grouping, or packaging of cigarette papers 
made up by any person for delivery to the consumer as a unit.
    Small cigarettes. Cigarettes weighing not more than three pounds per 
thousand.
    Small cigars. Cigars weighing not more than three pounds per 
thousand.
    Smokeless tobacco. Any snuff or chewing tobacco.
    Snuff. Any finely cut, ground, or powdered tobacco that is not 
intended to be smoked.
    This chapter. Title 27, Code of Federal Regulations, chapter I (27 
CFR chapter I).
    Tobacco products. Cigars, cigarettes, smokeless tobacco, pipe 
tobacco, and roll-your-own tobacco.
    Treasury Account. The Department of the Treasury's General Account 
at the Federal Reserve Bank of New York.

[[Page 732]]

    U.S.C. The United States Code.

(26 U.S.C. 7805 (68A Stat. 917), 27 U.S.C. 205 (49 Stat. 981 as 
amended), (82 Stat. 959), and Sec. 38, Arms Export Control Act (90 Stat. 
744) Aug. 16, 1954, ch. 736, 68A Stat. 775, as amended (26 U.S.C. 6301); 
June 29, 1956, ch. 462, 70 Stat. 391 (26 U.S.C. 6301))

[T.D. ATF-48, 43 FR 13553, Mar. 31, 1978; 44 FR 55854, Sept. 28, 1979, 
as amended by T.D. ATF-77, 46 FR 3007, Jan. 13, 1981; T.D. ATF-232, 51 
FR 28080, Aug. 5, 1986; T.D. ATF-289, 54 FR 48839, Nov. 27, 1989; T.D. 
ATF-384, 61 FR 54085, Oct. 17, 1996; T.D. ATF-424, 64 FR 71930, Dec. 22, 
1999; T.D. ATF-420, 64 FR 71939, Dec. 22, 1999; T.D. ATF, 457, 66 FR 
32220, June 14, 2001; T.D. ATF-460, 66 FR 39094, July 27, 2001; T.D. 
ATF-467, 66 FR 49532, Sept. 28, 2001]



                            Subpart C--Taxes



Sec. 40.21  Cigar tax rates.

    (a) Cigars are taxed at the following rates under 26 U.S.C. 5701(a):

----------------------------------------------------------------------------------------------------------------
                                                         Tax rate for removals during the years:
            Type and amount            -------------------------------------------------------------------------
                                             1993 to  1999            2000 and  2001          2002 and  after
----------------------------------------------------------------------------------------------------------------
Small cigars per thousand.............  $1.125                   $1.594                   $1.828
Large cigars per thousand *
     percentage of sale price.  12.75%                   18.063%                  20.719%
     but not to exceed.
----------------------------------------------------------------------------------------------------------------
*For large cigars, the percentage tax rate applies when the sale price is $235.294 per thousand or less, and the
  flat tax rate applies when the sale price is more than $235.294 per thousand.

    (b) See Sec. 40.22 of this part for rules concerning determination 
of sale price of large cigars.
    (c) Cigars not exempt from tax under 26 U.S.C. chapter 52 and the 
provisions of this part which are removed but not intended for sale 
shall be taxed at the same rate as similar cigars removed for sale.

[ T.D. ATF-420, 64 FR 71939, Dec. 22, 1999]



Sec. 40.22  Determination of sale price of large cigars.

    (a) General rule. The tax imposed on large cigars is computed based 
on the sale price (the price for which the large cigars are sold by the 
manufacturer). In addition to money, goods or services exchanged for 
cigars may be considered as part of the sale price.
    (b) Special cases.--(1) In general. If there is any question 
concerning the applicable sale price for tax purposes, the appropriate 
ATF officer will determine such price, applying rules similar to the 
constructive sale price rules in 26 U.S.C. 4216(b) and the implementing 
regulations in 26 CFR 48.4216(b)-1 through 48.4216(b)-4. These 
constructive sale price rules apply to cigars sold by a manufacturer at 
retail, sold on consignment, or sold (otherwise than through an arm's 
length transaction) at less than the fair market price. Sales of cigars 
between affiliated corporations may be analyzed under the constructive 
sale price rules. The appropriate ATF officer may make this analysis on 
his or her own initiative or upon the written request of a manufacturer. 
If ATF decides it is necessary, we will publish constructive sale price 
determinations in the ATF Bulletin in accordance with Sec. 70.701(d) of 
this chapter.
    (2) Adjustments in sale price.--(i) Reasons for adjustment. 
Adjustments to the sale price may occur as a result of a discount or 
price increase by the manufacturer or as a result of an ATF 
determination pursuant to paragraph (b)(1) above. In either case, the 
manufacturer must make conforming changes to the tax that was computed 
on the sale price before the adjustment.
    (ii) Time of adjustment. If an adjustment is made before the end of 
the same tax return period as the original determination of the tax, the 
adjustment may be made on the same return. If the price is increased or 
decreased

[[Page 733]]

retroactively (during a later return period), either by the manufacturer 
or by ATF's determination, the manufacturer must make an adjustment on 
the tax return for the current return period in which the price change 
was determined.
    (iii) Amount of adjustment. The taxpayer must compute the adjustment 
to the tax as the difference between the tax that was paid and the tax 
that should have been paid, based on the newly determined sale price, 
together with interest thereon and any applicable penalties. The 
interest must be computed from the time of payment of the original tax 
until the time the adjustment was made. Upon request, the appropriate 
ATF officer will provide information regarding interest rates applicable 
to specific time periods and any applicable penalties.
    (3) Pricing for different packaging. If different bona fide sale 
prices are applicable to different types of packaging (e. g., boxes of 
25 and boxes of 50), then the cigars in each type of packaging are taxed 
on the basis of their respective sale prices.
    (4) Pricing of seconds. If some of an otherwise identical cigar 
brand and size:
    (i) Are distinctive from other such cigars because of physical 
imperfections, (ii) Are offered to the consumer through clear labeling 
as ``imperfects'', ``seconds'', ``throw-outs'', or a comparable commonly 
understood term, and
    (iii) The manufacturer has a separate sale price for such cigars, 
then they are taxed on the basis of this separate sale price.
    (5) Combination packages. If a manufacturer has a sale price for a 
combination package containing cigars of different sizes, the cigars are 
taxed based on that combination sale price. If there is no sale price 
for the combination, then the cigars are taxed based on their individual 
sale prices.
    (6) Removals for another person. If a manufacturer makes taxable 
removals of a brand and size of cigar only for distribution by others 
who establish the sale price, the tax is based on such sale price even 
though the manufacturer who makes the removals does not establish the 
price.

[T.D. ATF-420, 64 FR 71939, Dec. 22, 1999]



Sec. 40.23  Cigarette tax rates.

    Cigarettes are taxed at the following rates under 26 U.S.C. 5701(b):

------------------------------------------------------------------------
                                     Tax rate per thousand for removals
                                              during the years
             Product              --------------------------------------
                                     1993 to      2000 and     2002 and
                                       1999         2001        after
------------------------------------------------------------------------
Small cigarettes.................          $12          $17       $19.50
Large cigarettes up to 6\1/2\ long....................
Large cigarettes over 6\1/2\ long....................      (2)Taxed at the rate for small
                                      cigarettes, counting each 2\3/4\
                                     inches or fraction thereof of the
                                      length of each as one cigarette.
------------------------------------------------------------------------


[T.D. ATF-420, 64 FR 71940, Dec. 22, 1999]



Sec. 40.24  Classification of cigarettes.

    For tax purposes, small cigarettes are designated Class A and large 
cigarettes are designated Class B.

(72 Stat. 1414; 26 U.S.C. 5701)



Sec. 40.25  Smokeless tobacco tax rates.

    Smokeless tobacco products are taxed at the following rates under 26 
U.S.C. 5701(e):

------------------------------------------------------------------------
                                     Tax rate per pound * for removals
                                              during the years
             Product              --------------------------------------
                                     1993 to      2000 and     2002 and
                                       1999         2001        after
------------------------------------------------------------------------
Snuff............................        $0.36        $0.51       $0.585

[[Page 734]]

 
Chewing tobacco..................         0.12         0.17        0.195
------------------------------------------------------------------------
* Prorate tax for fractions of a pound.


[T.D. ATF-420, 64 FR 71940, Dec. 22, 1999]



Sec. 40.25a  Pipe tobacco and roll-your-own tobacco tax rates.

    Pipe tobacco and roll-your-own tobacco are taxed at the following 
rates under 26 U.S.C. 5701(f) and (g), respectively:

------------------------------------------------------------------------
                                     Tax rate per pound * for removals
                                              during the years
             Product              --------------------------------------
                                     1993 to      2000 and     2002 and
                                       1999         2001        after
------------------------------------------------------------------------
Pipe tobacco.....................       $0.675      $0.9567      $1.0969
Roll-your-own tobacco............     * No tax       0.9567       1.0969
------------------------------------------------------------------------
* Prorate tax for fractions of a pound.


[T.D. ATF-420, 64 FR 71940, Dec. 22, 1999]



Sec. 40.26  Persons liable for tax.

    The manufacturer of tobacco products shall be liable for the taxes 
imposed on tobacco products by 26 U.S.C. 5701: Provided, That when 
tobacco products are transferred in bond pursuant to 26 U.S.C. 5704, to 
the bonded premises of another such manufacturer or an export warehouse 
proprietor, the transferee shall become liable for the tax upon receipt 
by him of such products and the transferor shall thereupon be relieved 
of his liability for the tax. When tobacco products are released in bond 
from customs custody for transfer to the bonded premises of a 
manufacturer of tobacco products, the transferee shall become liable for 
the tax on such products upon release from customs custody. Any person 
who possesses tobacco products in violation of 26 U.S.C. 5751(a)(1) or 
(2), shall be liable for a tax equal to the tax on such products.

(Sec. 201, Pub. L. 85-859, 72 Stat 1415, as amended, 1424, as amended 
(26 U.S.C. 5703, 5751))

[T.D. 6871, 31 FR 32, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55854, Sept. 28, 1979; T.D. 
ATF-232, 51 FR 28080, Aug. 5, 1986; T.D. ATF-243, 52 FR 43194, Dec. 1, 
1986]



Sec. 40.27  Assessment.

    Whenever any person required by law to pay tax on tobacco products 
fails to pay such tax, the tax shall be ascertained and assessed against 
such person, subject to the limitations prescribed in 26 U.S.C. 6501. 
The tax so assessed shall be in addition to the penalties imposed by law 
for failure to pay such tax when required. Except in cases where delay 
may jeopardize collection of the tax, or where the amount is nominal or 
the result of an evident mathematical error, no such assessment shall be 
made until and after notice has been afforded such person to show cause 
against assessment. The person will be allowed 45 days from the date of 
such notice to show cause, in writing, against such assessment.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1415, as amended (26 U.S.C. 5703))

[T.D. 6871, 31 FR 32, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55854, Sept. 28, 1979; T.D. 
ATF-232, 51 FR 28080, Aug. 5, 1986; T.D. ATF-243, 52 FR 43194, Dec. 1, 
1986]



                Subpart Ca--Special (Occupational) Taxes

    Source: T.D. ATF-271, 53 FR 17560, May 17, 1988, unless otherwise 
noted.

[[Page 735]]



Sec. 40.31  Liability for special tax.

    (a) Manufacturer of tobacco products. Every manufacturer of tobacco 
products shall pay a special (occupational) tax at a rate specified by 
Sec. 40.32 of the part. The tax shall be paid on or before the date of 
commencing the business of manufacturing tobacco products, and 
thereafter every year on or before July 1. On commencing business, the 
tax shall be computed from the first day of the month in which liability 
is incurred, through the following June 30. Thereafter, the tax shall be 
computed for the entire year (July 1 through June 30).
    (b) Transition rule. For purposes of paragraph (a) of this section, 
a proprietor engaged in the business of manufacturing tobacco products 
on January 1, 1988, shall be treated as having commenced business on 
that date. The special tax imposed by this transition rule shall cover 
the period January 1, 1988, through June 30, 1988, and shall be paid on 
or before April 1, 1988.
    (c) Each place of business taxable. A manufacturer of tobacco 
products incurs special tax liability at each place of business in which 
an occupation subject to special tax is conducted. A place of business 
means the entire office, plant or area of the business in any one 
location under the same proprietorship. Passageways, streets, highways, 
rail crossings, waterways, or partitions dividing the premises are not 
sufficient separation to require additional special tax, if the 
divisions of the premises are otherwise contiguous.

(26 U.S.C. 5143, 5731)



Sec. 40.32  Rates of special tax.

    (a) General. Title 26 U.S.C. 5731(a)(1) imposes a special tax of 
$1,000 per year on every manufacturer of tobacco products.
    (b) Reduced rate for small proprietors. Title 26 U.S.C. 5731(b) 
provides for a reduced rate of $500 per year with respect to any 
manufacturer of tobacco products whose gross receipts (for the most 
recent taxable year ending before the first day of the taxable period to 
which the special tax imposed by Sec. 40.31 relates) are less than 
$500,000. The ``taxable year'' to be used for determining gross receipts 
is the taxpayer's income tax year. All gross receipts of the taxpayer 
shall be included, not just the gross receipts of the business subject 
to special tax. Proprietors of new businesses that have not yet begun a 
taxable year, as well as proprietors of existing businesses that have 
not yet ended a taxable year, who commence a new activity subject to 
special tax, qualify for the reduced special (occupational) tax rate, 
unless the business is a member of a ``controlled group''; in that case, 
the rules of paragraph (c) of this section shall apply.
    (c) Controlled group. All persons treated as one taxpayer under 26 
U.S.C. 5061(e)(3) shall be treated as one taxpayer for the purpose of 
determining gross receipts under paragraph (b) of this section. 
``Controlled group'' means a controlled group of corporations, as 
defined in 26 U.S.C. 1563 and implementing regulations in 26 CFR 1.1563-
1 through 1.1563-4, except that the words ``at least 80 percent'' shall 
be replaced by the words ``more than 50 percent'' in each place they 
appear in subsection (a) of 26 U.S.C. 1563, as well as in the 
implementing regulations. Also, the rules for a ``controlled group of 
corporations'' apply in a similar fashion to groups which include 
partnerships and/or sole proprietorships. If one entity maintains more 
than 50% control over a group consisting of corporations and one, or 
more, partnerships and/or sole proprietorships, all of the members of 
the controlled group are one taxpayer for the purpose of this section.
    (d) Short taxable year. Gross receipts for any taxable year of less 
than 12 months shall be annualized by multiplying the gross receipts for 
the short period by 12 and dividing the result by the number of months 
in the short period as required by 26 U.S.C. 448(c)(3).
    (e) Returns and allowances. Gross receipts for any taxable year 
shall be reduced by returns and allowances made during such year under 
26 U.S.C. 448(c)(3).

(26 U.S.C. 448, 5061, 5731)



Sec. 40.33  Special tax returns.

    (a) General. Special tax shall be paid by return. The prescribed 
return is ATF Form 5630.5, Special Tax Registration and Return. Special 
tax returns,

[[Page 736]]

with payment of tax, shall be filed with ATF in accordance with 
instructions on the form.
    (b) Preparation of ATF Form 5630.5. All of the information called 
for on Form 5630.5 shall be provided, including:
    (1) The true name of the taxpayer.
    (2) The trade name(s) (if any) of the business(es) subject to 
special tax.
    (3) The employer identification number (see Sec. 40.34).
    (4) The exact location of the place of business, by name and number 
of building or street, or if these do not exist, by some description in 
addition to the post office address. In the case of one return for two 
or more locations, the address to be shown shall be the taxpayer's 
principal place of business (or principal office, in the case of a 
corporate taxpayer).
    (5) The class(es) of special tax to which the taxpayer is subject.
    (6) Ownership and control information: that is, the name, position, 
and residence address of every owner of the business and of every person 
having power to control its management and policies with respect to the 
activity subject to special tax. ``Owner of the business'' shall include 
every partner, if the taxpayer is a partnership, and every person owning 
10% or more of its stock, if the taxpayer is a corporation. However, the 
ownership and control information required by this paragraph need not be 
stated if the same information has been previously provided to ATF in 
connection with a permit application, and if the information previously 
provided is still current.
    (c) Multiple locations and/or classes of tax. A taxpayer subject to 
special tax for the same period at more than one location or for more 
than one class of tax shall--
    (1) File one special tax return, ATF Form 5630.5, with payment of 
tax, to cover all such locations and classes of tax; and
    (2) Prepare, in duplicate, a list identified with the taxpayer's 
name, address (as shown on ATF Form 5630.5), employer identification 
number, and period covered by the return. The list shall show, by 
States, the name, address, and tax class of each location for which 
special tax is being paid. The original of the list shall be filed with 
ATF in accordance with instructions on the return, and the copy shall be 
retained at the taxpayer's principal place of business (or principal 
office, in the case of a corporate taxpayer) for the period specified in 
Sec. 40.185.
    (d) Signing of ATF Forms 5630.5--(1) Ordinary returns. The return of 
an individual proprietor shall be signed by the individual. The return 
of a partnership shall be signed by a general partner. The return of a 
corporation shall be signed by any officer. In each case, the person 
signing the return shall designate his or her capacity as ``individual 
owner,'' ``member of firm,'' or, in the case of a corporation, the title 
of the officer.
    (2) Fiduciaries. Receivers, trustees, assignees, executors, 
administrators, and other legal representatives who continue the 
business of a bankrupt, insolvent, deceased person, etc., shall indicate 
the fiduciary capacity in which they act.
    (3) Agent or attorney in fact. If a return is signed by an agent or 
attorney in fact, the signature shall be preceded by the name of the 
principal and followed by the title of the agent or attorney in fact. A 
return signed by a person as agent will not be accepted unless there is 
filed, with the ATF office with which the return is required to be 
filed, a power of attorney authorizing the agent to perform the act.
    (4) Perjury statement. ATF Forms 5630.5 shall contain or be verified 
by a written declaration that the return has been executed under the 
penalties of perjury.

(26 U.S.C. 5142, 6061, 6065, 6151, 7011)



Sec. 40.34  Employer identification number.

    (a) Requirement. The employer identification number (defined in 26 
CFR 301.7701-12) of the taxpayer who has been assigned such a number 
shall be shown on each special tax return, including amended returns, 
filed under this subpart. Failure of the taxpayer to include the 
employer identification number may result in the imposition of the 
penalty specified in Sec. 70.113 of this chapter.
    (b) Application for employer identification number. Each taxpayer 
who files a special tax return, who has not already

[[Page 737]]

been assigned an employer identification number, shall file IRS Form SS-
4 to apply for one. The taxpayer shall apply for and be assigned only 
one employer identification number, regardless of the number of places 
of business for which the taxpayer is required to file a special tax 
return. The employer identification number shall be applied for no later 
than 7 days after the filing of the taxpayer's first special tax return. 
IRS Form SS-4 may be obtained from the director of an IRS service center 
or from any IRS district director.
    (c) Preparation and filing of IRS Form SS-4. The taxpayer shall 
prepare and file IRS Form SS-4, together with any supplementary 
statement, in accordance with the instructions on the form or issued in 
respect to it.

(26 U.S.C. 6109)

[T.D. ATF-271, 53 FR 17560, May 17, 1988, as amended by T.D. ATF-301, 55 
FR 47658, Nov. 14, 1990]



Sec. 40.35  Issuance, distribution, and examination of special tax stamps.

    (a) Issuance of special tax stamps. Upon filing a properly executed 
return on ATF Form 5630.5 together with the full remittance, the 
taxpayer will be issued an appropriately designated special tax stamp. 
If the return covers multiple locations, the taxpayer will be issued one 
appropriately designated stamp for each location listed on the 
attachment required by Sec. 40.33(c)(2), but showing, as to name and 
address, only the name of the taxpayer and the address of the taxpayer's 
principal place of business (or principal office in the case of a 
corporate taxpayer).
    (b) Distribution of special tax stamps for multiple locations. On 
receipt of the special tax stamps, the taxpayer shall verify that there 
is one stamp for each location listed on the attachment to ATF Form 
5630.5. The taxpayer shall designate one stamp for each location and 
type on each stamp the address of the business conducted at the location 
for which that stamp is designated. The taxpayer shall then forward each 
stamp to the place of business designated on the stamp.
    (c) Examination of special tax stamps. All stamps denoting payment 
of special tax shall be kept available for inspection by ATF officers, 
at the location for which designated, during business hours.

(26 U.S.C. 5146, 6806)



Sec. 40.36  Changes in special tax stamps.

    (a) Change in name. If there is a change in the corporate or firm 
name, or in the trade name, as shown on ATF Form 5630.5, the 
manufacturer shall file an amended special tax return as soon as 
practicable after the change, covering the new corporate or firm name, 
or trade names. No new special tax is required to be paid. The 
manufacturer shall attach the special tax stamp for endorsement of the 
change in name.
    (b) Change in proprietorship--(1) General. If there is a change in 
the proprietorship of a tobacco factory, the successor shall pay a new 
special tax and obtain the required special tax stamps.
    (2) Exemption for certain successors. Persons having the right of 
succession provided for in paragraph (c) of this section may carry on 
the business for the remainder of the period for which the special tax 
was paid, without paying a new special tax, if within 30 days after the 
date on which the successor begins to carry on the business, the 
successor files a special tax return on Form 5630.5 with ATF, which 
shows the basis of succession. A person who is a successor to a business 
for which special tax has been paid and who fails to register the 
succession is liable for special tax computed from the first day of the 
calendar month in which he or she began to carry on the business.
    (c) Persons having right of succession. Under the conditions 
indicated in paragraph (b)(2) of this section, the right of succession 
will pass to certain persons in the following cases:
    (1) Death. The widowed spouse or child, or executor, administrator, 
or other legal representative of the taxpayer;
    (2) Succession of spouse. A husband or wife succeeding to the 
business of his or her spouse (living);
    (3) Insolvency. A receiver or trustee in bankruptcy, or an assignee 
for benefit of creditors;
    (4) Withdrawal from firm. The partner or partners remaining after 
death or withdrawal of a member.

[[Page 738]]

    (d) Change in location. If there is a change in location of a 
taxable place of business, the manufacturer shall, within 30 days after 
the change, file with ATF an amended special tax return covering the new 
location. The manufacturer shall attach the special tax stamp or stamps, 
for endorsement of the change in location. No new special tax is 
required to be paid. However, if the manufacturer does not file the 
amended return within 30 days, the manufacturer is required to pay a new 
special tax and obtain a new special tax stamp.

(26 U.S.C. 5143, 7011)



                  Subpart D--Administrative Provisions



Sec. 40.41  Forms prescribed.

    (a) The Director is authorized to prescribe all forms required by 
this part. All of the information called for in each form shall be 
furnished as indicated by the headings on the form and the instructions 
on or pertaining to the form. In addition, information called for in 
each form shall be furnished as required by this part. When a return, 
form, claim, or other document called for under this part is required by 
this part, or by the document itself, to be executed under penalties of 
perjury, it shall be executed under penalties of perjury.
    (b) Requests for forms should be mailed to the ATF Distribution 
Center, 7943 Angus Court, Springfield, Virginia 22153.

(5 U.S.C. 552(a) (80 Stat. 383, as amended))

[T.D. ATF-92, 46 FR 46921, Sept. 23, 1981, as amended by T.D. ATF-232, 
51 FR 28080, Aug. 5, 1986; T.D. ATF-243, 52 FR 43194, Dec. 1, 1986; T.D. 
ATF-372, 61 FR 20725, May 8, 1996]



Sec. 40.42  Authority of ATF officers to enter premises.

    Any ATF officer may enter in the daytime any premises where tobacco 
products are produced or kept, so far as it may be neccessary for the 
purpose of examining such products. When such premises are open at 
night, any ATF officer may enter them, while so open, in the performance 
of his official duties. The owner of such premises, or person having the 
superintendence of the same, who refuses to admit any ATF officer or 
permit him to examine such products shall be liable to the penalties 
prescribed by law for the offense.

(68A Stat. 872, 903; 26 U.S.C. 7342, 7606)

[T.D. 6871, 31 FR 33, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975; T.D. ATF-232, 51 FR 28080, Aug. 5, 1986; T.D. ATF-243, 52 FR 
43194, Dec. 1, 1986]



Sec. 40.43  Interference with administration.

    Whoever, corruptly or by force or threats of force, endeavors to 
hinder or obstruct the administration of this part, or endeavors to 
intimidate or impede any ATF officer acting in his official capacity, or 
forcibly rescues or attempts to rescue or causes to be rescued any 
property, after it has been duly seized for forfeiture to the United 
States in connection with a violation of the internal revenue laws, 
shall be liable to the penalties prescribed by law.

(68A Stat. 855; 26 U.S.C. 7212)



Sec. 40.44  Disposal of forfeited, condemned, and abandoned tobacco products.

    A Federal, State, or local officer shall not sell or cause to be 
sold for consumption in the United States any forfeited, condemned, or 
abandoned tobacco products in his custody upon which the Federal tax has 
not been paid, if in his opinion the sale thereof will not bring a price 
equal to the tax due and payable thereon and the expenses incident to 
the sale thereof. Where the products are not sold the officer may 
deliver them to a Federal or State hospital or institution (if they are 
fit for consumption) or cause their destruction by burning completely or 
by rendering them unfit for consumption. Where such products are sold 
they shall be released by the officer having custody thereof only after 
they are properly packaged and taxpaid. A receipt from the regional 
director (compliance) evidencing payment of tax on such products shall 
be presented to the officer having custody of the products, which tax 
shall be considered part of the sales price. Where tobacco products 
which have been packaged under the

[[Page 739]]

provisions of part 44 or part 45 of this chapter are to be released 
after payment of tax, the purchaser shall appropriately mark each 
package ``Federal Tax Paid (date)'' before the officer having custody of 
the products releases them:

Provided, That if the purchaser is a qualified manufacturer of tobacco 
products, or for products packaged under part 44 a qualified export 
warehouse proprietor, the products may be released without such marking 
of the packages if the manufacturer or proprietor does not intend to 
place such products on the domestic market for taxable products but will 
dispose of them otherwise, such as by destruction or return to bond 
through claim for refund, and files a written statement to that effect, 
in original only, with the officer having custody of the products. In 
the case of products forfeited under the internal revenue laws the sale 
shall be subject to the provisions of part 172 of this chapter.

(68A Stat. 870, as amended, 72 Stat. 1425, as amended; 26 U.S.C. 7325, 
5753)

[T.D. 6961, 33 FR 9488, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28080, Aug. 5, 1986; T.D. 
ATF-243, 52 FR 43194, Dec. 1, 1986; T.D. ATF-251, 52 FR 19339, May 22, 
1987; T.D. ATF-469, 66 FR 56758, Nov. 13, 2001]



Sec. 40.45  Alternate methods or procedures.

    A manufacturer of tobacco products, on specific approval by the 
Director as provided in this section, may use an alternate method or 
procedure in lieu of a method or procedure specifically prescribed in 
this part. The Director may approve an alternate method or procedure, 
subject to stated conditions, when he finds that--
    (a) Good cause has been shown for the use of the alternate method or 
procedure,
    (b) The alternate method or procedure is within the purpose of, and 
consistent with the effect intended by, the specifically prescribed 
method or procedure, and affords equivalent security to the revenue, and
    (c) The alternate method or procedure will not be contrary to any 
provision of law, and will not result in an increase in cost to the 
Government or hinder the effective administration of this part.

No alternate method or procedure relating to the giving of any bond or 
to the assessment, payment, or collection of tax, shall be authorized 
under this section. Where a manufacturer desires to employ an alternate 
method or procedure, he shall submit a written application to do so, in 
triplicate, to the regional director (compliance) for transmittal to the 
Director. The application shall specifically describe the proposed 
alternate method or procedure, and shall set forth the reasons therefor. 
Alternate methods or procedures shall not be employed until the 
application has been approved by the Director. The manufacturer shall, 
during the period of authorization of an alternate method or procedure, 
comply with the terms of the approved application. Authorization for any 
alternate method or procedure may be withdrawn whenever in the judgment 
of the Director the revenue is jeopardized or the effective 
administration of this part is hindered. The manufacturer shall retain, 
as part of his records, any authorization of the Director under this 
section.



Sec. 40.46  Emergency variations from requirements.

    The Director may approve methods of operation other than as 
specified in this part, where he finds that an emergency exists and the 
proposed variations from the specified requirements are necessary, and 
the proposed variations--
    (a) Will afford the security and protection to the revenue intended 
by the prescribed specifications.
    (b) Will not hinder the effective administration of this part, and
    (c) Will not be contrary to any provision of law.

Variations from requirements granted under this section are conditioned 
on compliance with the procedures, conditions, and limitations set forth 
in the approval of the application. Failure to comply in good faith with 
such procedures, conditions, and limitations shall automatically 
terminate the authority for such variations and the manufacturer 
thereupon shall fully comply with the prescribed requirements of 
regulations from which the variations

[[Page 740]]

were authorized. Authority for any variations may be withdrawn whenever 
in the judgment of the Director the revenue is jeopardized or the 
effective administration of this part is hindered by the continuation of 
such variation. Where a manufacturer desires to employ such variation, 
he shall submit a written application to do so, in triplicate, to the 
regional director (compliance) for transmittal to the Director. The 
application shall describe the proposed variations and set forth the 
reasons therefor. Variations shall not be employed until the application 
has been approved. The manufacturer shall retain, as part of his 
records, any authorization of the Director under this section.



Sec. 40.47  Other businesses within factory.

    The Director may authorize such other businesses within the factory 
as he finds will not jeopardize the revenue, will not hinder the 
effective administration of this part, and will not be contrary to law. 
Where a manufacturer desires to engage in another business within the 
factory he shall submit a written application to do so, in triplicate, 
to the regional director (compliance) for the region in which the 
factory is located, for his transmittal to the Director. A manufacturer 
shall not engage in such other business until the application is 
approved by the Director. The manufacturer shall retain, as part of his 
records, any authorization of the Director under this section.

[T.D. 6840, 30 FR 9310, July 27, 1965. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 40.48  Penalties and forfeitures.

    Anyone who fails to comply with the provisions of this part becomes 
liable to the civil and criminal penalties, and forfeitures, provided by 
law.

(72 Stat. 1425, 1426; 26 U.S.C. 5761, 5762, 5763)



Sec. 40.49  Delegations of the Director.

    The Director has general authority to take action on all matters 
under the regulations in this part 40. Some of the authorities in this 
part are redelegated to ``appropriate ATF officers''. The title of the 
appropriate ATF officer for each delegation is listed by section in ATF 
Order 1130.30, Delegation Order--Delegation of the Director's 
Authorities in 27 CFR Part 40--Manufacture of Tobacco Products and 
Cigarette Papers and Tubes. ATF delegation orders, such as ATF Order 
1130.15, are available from the ATF Distribution Center, PO Box 5950, 
Springfield, Virginia 22150-5190, or from the ATF web site (http://
www.atf.treas.gov).

[T.D. ATF-420, 64 FR 71940, Dec. 22, 1999, as amended by T.D. ATF-457, 
66 FR 32220, June 14, 2001; T.D. ATF-460, 66 FR 39094, July 27, 2001]



         Subpart E--Qualification Requirements for Manufacturers



Sec. 40.61  Qualification--General.

    (a) Who must qualify. Every person who produces tobacco products 
except for his or her own personal consumption or use, shall qualify as 
a manufacturer of tobacco products in accordance with the provisions of 
this part.
    (b) Minimum manufacturing and activity requirements. A permit to 
manufacture tobacco products will only be granted to those persons whose 
principal business activity under such permit will be the original 
manufacture of tobacco products. A permit will not be granted to any 
person whose principal activity under such permit will be to receive or 
transfer tobacco products in bond. As a minimum activity requirement, in 
order to qualify for a permit, the quantity of tobacco products 
manufactured under the permit must exceed the quantity to be transferred 
or received in bond under the permit. For the purposes of this section, 
repackaging or relabeling activities alone do not qualify as a 
manufacturing activity.

[T.D. ATF-421, 64 FR 71923, Dec. 22, 1999]



Sec. 40.61a  Transitional rule.

    Any person who:
    (a) On August 5, 1997, was engaged in business as a manufacturer of 
roll-your-own tobacco, and
    (b) Before January 1, 2000, submits an application, as provided in 
this part, to engage in such business, may, continue to engage in such 
business pending final action on such application. Pending such final 
action, all provisions of

[[Page 741]]

chapter 52 of the Internal Revenue Code of 1986 shall apply to such 
applicant in the same manner and to the same extent as if such applicant 
were a holder of a permit to manufacture roll-your-own tobacco under 
such chapter 52.

[T.D. ATF-424, 64 FR 71931, Dec. 22, 1999]



Sec. 40.62  Application for permit.

    Every person, before commencing business as a manufacturer of 
tobacco products as defined in Sec. 40.11, shall make application for, 
and obtain, the permit provided in Sec. 40.75, covering operations at 
each proposed factory. Such application shall be made on Form 2093, in 
duplicate, to the regional director (compliance) for the region in which 
the proposed factory will be located. All documents required under this 
part to be furnished with such application shall be made a part thereof. 
Where the applicant for a permit under this section holds a permit or 
permits authorizing the production of any tobacco products at premises 
to be covered by the permit applied for, the applicant shall surrender 
such permit or permits for cancellation, upon the issuance of the permit 
applied for.

(72 Stat. 1421; 26 U.S.C 5712)



Sec. 40.63  Corporate documents.

    Every corporation, before commencing business as a manufacturer of 
tobacco products, shall furnish with its application for permit, 
required by Sec. 40.62, a true copy of the corporate charter or a 
certificate of corporate existence or incorporation executed by the 
appropriate officer of the State in which incorporated. The corporation 
shall likewise furnish duly authenticated extracts of the stockholders' 
meetings, bylaws, or directors' meetings, listing the offices the 
incumbents of which are authorized to sign documents or otherwise act in 
behalf of the corporation in matters relating to 26 U.S.C. chapter 52, 
and regulations issued thereunder. The corporation shall also furnish 
evidence, in duplicate, of the identity of the officers and directors 
and each person who holds more than ten percent of the stock of such 
corporation. Where any of the information required by this section has 
previously been filed with the same regional director (compliance) and 
such information is currently complete and accurate, a written statement 
to that effect, in duplicate, will be sufficient for the purpose of this 
section.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1421, as amended (26 U.S.C. 5712))

[T.D. 6840, 30 FR 9310, July 27, 1965. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55854, Sept. 28, 1979]



Sec. 40.64  Articles of partnership or association.

    Every partnership or association, before commencing business as a 
manufacturer of tobacco products, shall furnish with its application for 
permit, required by Sec. 40.62, a true copy of the articles of 
partnership or association, if any, or certificate of partnership or 
association where required to be filed by any State, county, or 
municipality. Where a partnership or association has previously filed 
such documents with the same regional director (compliance) and such 
documents are currently complete and accurate, a written statement, in 
duplicate, to that effect by the partnership or association will be 
sufficient for the purpose of this section.

(72 Stat. 1421; 26 U.S.C. 5712)



Sec. 40.65  Trade name certificate.

    Every person, before commencing business under a trade name as a 
manufacturer of tobacco products, shall furnish with his application for 
permit, required by Sec. 40.62, a true copy of the certificate or other 
document, if any, issued by a State, county, or municipal authority in 
connection with the transaction of business under such trade name. If no 
such certificate or other document is so required, a written statement, 
in duplicate, to that effect by such person will be sufficient for the 
purpose of this section.

(72 Stat. 1421; 26 U.S.C. 5712)



Sec. 40.66  Bond.

    Every person, before commencing business as a manufacturer of 
tobacco products, shall file, in connection with his application for 
permit, a bond on Form 3070, in duplicate, in accordance

[[Page 742]]

with the applicable provisions of subpart G of this part, conditioned 
upon compliance with the provisions of chapter 52, I.R.C., and 
regulations thereunder, including, but not limited to, the timely 
payment of taxes imposed by such chapter and penalties and interest in 
connection therewith for which he may become liable to the United 
States: Provided, That any person who, on the effective date of this 
part, October 1, 1961, has on file a valid and adequate bond, Form 2100, 
``Bond--Manufacturer of Cigars and Cigarettes,'' may continue, under 
such bond, the operations with respect to the permit to which that bond 
relates, in accordance with the provisions of this part.

(72 Stat. 1421, as amended; 26 U.S.C. 5711)

[T.D. 6871, 31 FR 33, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 40.67  Blanket bond.

    Where a manufacturer of tobacco products operates more than one 
factory in the same region he may, in lieu of filing separate bonds, 
file a blanket bond on Form 3070, in duplicate, in accordance with the 
provisions of Sec. 40.134, for any or all of the factories in the same 
region. The total amount of any blanket bond given under this section 
shall be available for the satisfaction of any liability incurred at any 
factory covered by the bond.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 40.68  Power of attorney.

    If the application for permit or any report, return, notice, 
schedule, or other document required to be executed is to be signed by 
an individual (including one of the partners for a partnership or one of 
the members of an association) as an attorney in fact for any person, or 
if an individual is to otherwise officially represent such person, power 
of attorney on Form 1534 shall be furnished to the regional director 
(compliance). (For power of attorney in connection with conference and 
practice requirements see subpart E, part 601 of this chapter.) Such 
power of attorney is not required for persons whose authority is 
furnished with the corporate documents as required by Sec. 40.63. Form 
1534 does not have to be filed again with an regional director 
(compliance) where such form has previously been submitted to that 
regional director (compliance) and is still in effect.

[T.D. 6840, 30 FR 9310, July 27, 1965. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 40.69  Factory premises.

    The premises to be used by a manufacturer of tobacco products as his 
factory may consist of more than one building, or portions of buildings, 
which need not be contiguous but must be located in the same city, town, 
or village: Except that, where the regional director (compliance) 
determines that a building or portion of a building which is not within 
the city, town, or village, is so conveniently and closely situated to 
the general factory premises as to present no jeopardy to the revenue 
and as to offer no hindrance to the administration of this part, he may 
authorize the inclusion of such building or portion of building as part 
of the factory. The buildings or portions of buildings shall be 
described in the application for permit and the bond by number, street, 
and city, town, or village, and State. If any of the following 
conditions exist a diagram shall also be furnished, in duplicate, 
showing the information indicated:
    (a) Where the factory is in more than one building, and each 
building is not identifiable by a separate street address--identify each 
building by a letter, number, or similar designation;
    (b) Where the factory consists of a portion of a building or where 
portions of buildings are part of the factory--show the particular floor 
or floors, or room or rooms, comprising the factory;
    (c) Where there is an adjoining retail store operated by the 
manufacturer tobacco products including any doors or other openings 
between the premises.

(72 Stat. 1421; 26 U.S.C. 5712)

[T.D. 6840, 30 FR 9310, July 27, 1965, as amended by T.D. 6871, 31 FR 
33, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 15, 1975, as amended 
by T.D. ATF-232, 51 FR 28080, Aug. 5, 1986; T.D. ATF-243, 52 FR 43194, 
Dec. 1, 1986]

[[Page 743]]



Sec. 40.70  Separation of and access to factory.

    Where the factory consists of a portion of a building, or where 
portions of buildings are part of the factory, the factory shall be 
completely separated by walls from adjoining portions of the building. 
Such walls shall be securely constructed of substantial materials. The 
regional director (compliance) may, wherever he finds that the revenue 
will not be jeopardized, authorize openings and doors in such walls or 
means of separation other than walls if such means adequately delineate 
the factory. The factory shall be accessible directly from a street, 
yard, common passageway, or other common means of entrance.

(72 Stat. 1421; 26 U.S.C. 5712)



Sec. 40.71  Factories established prior to October 1, 1961.

    Factories established prior to the effective date of this part, 
October 1, 1961, shall not be subject to the provisions of Sec. 40.70 
if, in the opinion of the regional director (compliance), the existing 
premises afford adequate protection to the revenue.

(72 Stat. 1421; 26 U.S.C. 5712)

[T.D. 6871, 31 FR 33, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 40.72  Use of factory premises.

    Unless otherwise authorized by the Director as provided in 
Sec. 40.47, the factory premises shall be used exclusively for the 
purposes of manufacturing and storing tobacco products; storing 
materials, equipment, and supplies related thereto or used or useful in 
the conduct of the business; and carrying on activities in connection 
with the business of the manufacturer: Provided, That tobacco products 
manufacturers who maintain adequate records in respect to the 
manufacture and storage of smoking tobacco that is not subject to tax 
(as well as with respect to tobacco products), showing the date and 
total quantity in pounds of the tobacco received, shipped or delivered, 
lost, and destroyed, may continue such operations on the tobacco 
products factory premises, without application for authorization as 
prescribed in Sec. 40.47.

[T.D. ATF-232, 51 FR 28080, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, 
Dec. 1, 1986, as amended by T.D. ATF-289, 54 FR 48839, Nov. 27, 1989]



Sec. 40.73  Additional information.

    The regional director (compliance) may require such additional 
information as he may deem necessary to determine whether the applicant 
is entitled to a permit under the provisions of this part. The applicant 
shall, when required by the regional director (compliance), furnish as a 
part of his application for such permit such additional information as 
may be necessary for the regional director (compliance) to determine 
whether the applicant is entitled to a permit.



Sec. 40.74  Investigation of applicant.

    As the regional director (compliance) deems necessary he will cause 
inquiry or investigation to be made to verify the information furnished 
in connection with an application for permit and to ascertain whether 
the applicant is, by reason of his business experience, financial 
standing, and trade connections, likely to maintain operations in 
compliance with 26 U.S.C. chapter 52, and regulations thereunder; 
whether such person has disclosed all material information required or 
made any material false statement in the application for such permit; 
and whether the premises on which it is proposed to establish the 
factory are adequate to protect the revenue. If the regional director 
(compliance) has reason to believe that the applicant is not entitled to 
a permit, he shall promptly give the applicant notice of the 
contemplated disapproval of his application and opportunity for hearing 
thereon in accordance with part 71 of this chapter, which part 
(including the provisions relating to the recommended decision and to 
appeals) is applicable to such proceedings. If, after such notice and 
opportunity for hearing, the regional director (compliance) finds that 
the applicant is not entitled to a permit, he shall, by order stating 
the findings on

[[Page 744]]

which his decision is based, deny the permit.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1421, as amended (26 U.S.C. 5713))

[26 FR 8174, Aug. 31, 1961. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55854, Sept. 28, 1979; T.D. ATF-463, 
66 FR 42734, Aug. 15, 2001]



Sec. 40.75  Issuance of permit.

    If the application for permit, together with the bond and supporting 
documents, required under this part is approved by him, the regional 
director (compliance) shall issue a permit on Form 2096 to the applicant 
as a manufacturer of tobacco products.

(72 Stat. 1421; 26 U.S.C. 5713)

[T.D. 6871, 31 FR 33, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 40.76  Retention of permit and supporting documents.

    The manufacturer shall retain his permit, together with the copy of 
the application and supporting documents returned to him with the 
permit, at the same place where the records required by this part are 
kept and they shall be made available for inspection by any ATF officer 
upon his request.

(72 Stat. 1421, 1423; 26 U.S.C. 5712, 5713, 5741)



    Subpart F--Changes After Original Qualification of Manufacturers

                             Changes in Name



Sec. 40.91  Change in individual name.

    Where there is a change in the name of an individual operating as a 
manufacturer, of tobacco products he shall, within 30 days of such 
change, make application on Form 2098 for an amended permit.

(72 Stat. 1421; 26 U.S.C. 5712)



Sec. 40.92  Change in trade name.

    Where there is a change in, or an addition or discontinuance of, a 
trade name used by a manufacturer of tobacco products in connection with 
operations authorized by his permit the manufacturer shall, within 30 
days of such change, addition or discontinuance, make application on 
Form 2098 for an amended permit to reflect such change. The manufacturer 
shall also furnish a true copy of any new trade name certificate or 
document issued to him, or statement in lieu thereof, required by 
Sec. 40.65.

(72 Stat. 1421; 26 U.S.C. 5712)

[T.D. 6840, 30 FR 9311, July 27, 1965. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 40.93  Change in corporate name.

    Where there is a change in the name of a corporate manufacturer of 
tobacco products, the manufacturer shall, within 30 days of such change, 
make application on Form 2098 for an amended permit. The manufacturer 
shall also furnish such documents as may be necessary to establish that 
the corporate name has been changed.

(72 Stat. 1421; 26 U.S.C. 5712)

                    Changes in Ownership and Control



Sec. 40.101  Fiduciary successor.

    If an administrator, executor, receiver, trustee, assignee, or other 
fiduciary, is to take over the business of a manufacturer of tobacco 
products, as a continuing operation, such fiduciary shall, before 
commencing operations, make application for permit and file bond as 
required by subpart E, of this part, furnish certified copies, in 
duplicate, of the order of the court, or other pertinent documents, 
showing his appointment and qualification as such fiduciary, and make a 
commencing inventory, in accordance with the provisions of Sec. 40.201: 
Provided, That where a diagram has been furnished by the predecessor, in 
accordance with the provisions of Sec. 40.69, the successor may adopt 
such diagram if it is currently complete and accurate. However, where a 
fiduciary intends only to liquidate the business, qualification as a 
manufacturer of tobacco products will not be required if he promptly 
files with the regional director (compliance) a written statement to 
that effect, in duplicate, together with an extension of coverage of the 
predecessor's bond, executed by the fiduciary and the surety on such 
bond, in accordance with the provisions of Sec. 40.137.

(72 Stat. 1421, 1422; 26 U.S.C. 5711, 5712, 5721)

[[Page 745]]



Sec. 40.102  Transfer of ownership.

    If a transfer is to be made in ownership of the business of a 
manufacturer of tobacco products (including a change of any member of a 
partnership or association), such manufacturer shall give notice, in 
writing, to the regional director (compliance), naming the proposed 
successor and the desired effective date of such transfer. The proposed 
successor shall, before commencing operations, qualify as a manufacturer 
of tobacco products, in accordance with the applicable provisions of 
subpart E of this part: Provided, That where a diagram has been 
furnished by the manufacturer in accordance with the provisions of 
Sec. 40.69, the proposed successor may adopt such diagram if it is 
currently complete and accurate. The manufacturer shall give such notice 
of transfer, and the proposed successor shall make application for 
permit and file bond, as required, in ample time for examination and 
approval thereof before the desired date of such change. The predecessor 
shall make a concluding inventory and concluding report, in accordance 
with the provisions of Secs. 40.201 and 40.202, respectively, and 
surrender his permit with such inventory and report. The successor shall 
make a commencing inventory and commencing report, in accordance with 
the provisions of Secs. 40.201 and 40.202, respectively.

(72 Stat. 1421, 1422; 26 U.S.C. 5711, 5712, 5713, 5721, 5722)



Sec. 40.103  Change in officers, directors, or stockholders of a corporation.

    Upon election or appointment (excluding successive reelection or 
reappointment) of any officer or director of a corporation operating the 
business of a manufacturer of tobacco products, or upon any occurrence 
which results in a person acquiring ownership or control of more than 
ten percent in aggregate of the outstanding stock of such corporation, 
the manufacturer shall, within 30 days of such action, so notify the 
regional director (compliance) in writing, giving the identity of such 
person. When there is any change in the authority furnished under 
Sec. 40.63 for officers to act in behalf of the corporation the 
manufacturer shall immediately so notify the regional director 
(compliance) in writing.

(72 Stat. 1421; 26 U.S.C. 5712)

[T.D. 6840, 30 FR 9311, July 27, 1965. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 40.104  Change in control of a corporation.

    Where the issuance, sale, or transfer of the stock of a corporation, 
operating as a manufacturer of tobacco products, results in a change in 
the identity of the principal stockholders exercising actual or legal 
control of the operations of the corporation, the corporate manufacturer 
shall, within 30 days after the change occurs, make application on Form 
2093 for a new permit. Otherwise, the present permit shall be 
automatically terminated at the expiration of such 30-day period, and 
the manufacturer shall dispose of all tobacco products on hand, in 
accordance with this part, make a concluding inventory and concluding 
report, in accordance with the provisions of Secs. 40.201 and 40.202, 
respectively, and surrender his permit with such inventory and report. 
If the application for a new permit is timely made, the present permit 
shall continue in effect pending final action with respect to such 
application.

(72 Stat. 1421, 1422; 26 U.S.C. 5712, 5713, 5721, 5722)

[T.D. 6871, 31 FR 33, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, as amended by T.D. ATF-232, 51 FR 28081, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]

                     Changes in Location of Factory



Sec. 40.111  Change in location within same region.

    Whenever a manufacturer of tobacco products intends to relocate his 
factory within the same region, the manufacturer shall, before 
commencing operations at the new location, make application on Form 2098 
for, and obtain, an amended permit. The application shall be supported 
by an extension of coverage of bond in accordance with the provisions of 
Sec. 40.137.

(72 Stat. 1421; 26 U.S.C. 5711, 5712)

[[Page 746]]



Sec. 40.112  Change in address.

    Whenever any change occurs in the address, but not the location, of 
the factory of a manufacturer of tobacco products, as a result of action 
of local authorities, the manufacturer shall, within 30 days of such 
change, make application on Form 2098 for an amended permit.

(72 Stat. 1421; 26 U.S.C. 5712)



Sec. 40.113  Change in location to another region.

    Whenever a manufacturer of tobacco products intends to remove his 
factory to another region, the manufacturer shall, before commencing 
operations at the new location, qualify as such a manufacturer in the 
new region, in accordance with the applicable provisions of subpart E of 
this part. The manufacturer shall notify the regional director 
(compliance) for the region from which he is removing his factory of his 
qualification in the new region, giving the address of the new location 
of his factory and the number of the permit issued to him in the new 
region, make a concluding inventory and concluding report in accordance 
with the provisions of Secs. 40.201 and 40.202, respectively, and 
surrender the permit for his old location with such inventory and 
report.

(72 Stat. 1421, 1422; 26 U.S.C. 5711, 5712, 5713, 5721, 5722)



Sec. 40.114  Extension or curtailment of factory.

    Where a tobacco products factory is to be changed to an extent which 
will make inaccurate the description of the factory as set forth in the 
last application by the manufacturer for permit, on the diagram, if any, 
furnished with such application, the manufacturer shall first make an 
application on Form 2098 for, and obtain, an amended permit. Such 
application shall describe the proposed change in the factory and shall 
be accompanied by a new diagram if required under the provisions of 
Sec. 40.69.

(72 Stat. 1421; 26 U.S.C. 5711, 5712)



          Subpart G--Bonds and Extensions of Coverage of Bonds



Sec. 40.131  Corporate surety.

    (a) Surety bonds required under the provisions of this part may be 
given only with corporate sureties holding certificates of authority 
from the Secretary of the Treasury as acceptable sureties on Federal 
bonds. Each bond and each extension of coverage of bond shall at the 
time of filing be accompanied by a power of attorney authorizing the 
agent or officer who executed the bond to so act on behalf of the 
surety. The regional director (compliance) who is authorized to approve 
the bond may, whenever he deems it necessary, require additional 
evidence of the authority of the agent or officer to execute the bond or 
extension of coverage of bond. The power of attorney shall be prepared 
on a form provided by the surety company and executed under the 
corporate seal of the company. If the power of attorney submitted is 
other than a manually signed document it shall be accompanied by a 
certificate of its validity. Limitations concerning corporate sureties 
are prescribed by the Secretary in Treasury Department Circular No. 570, 
as revised. The surety shall have no interest whatever in the business 
covered by the bond.
    (b) Treasury Department Circular No. 570 (Companies Holding 
Certificates of Authority as Acceptable Sureties on Federal Bonds and as 
Acceptable Reinsuring Companies) is published in the Federal Register 
annually as of the first workday in July. As they occur, interim 
revisions of the circular are published in the Federal Register. Copies 
may be obtained from the Audit Staff, Bureau of Government Financial 
Operations, Department of the Treasury, Washington, DC 20226.

(61 Stat. 649, 72 Stat. 1421, as amended; 31 U.S.C. 9304, 9306; 26 
U.S.C. 5711; 5 U.S.C. 552(a) (80 Stat. 383, as amended))

[T.D. 6961, 33 FR 9488, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975 and amended by T.D. ATF-92, 46 FR 46921, Sept. 23, 1981]



Sec. 40.132  Deposit of securities in lieu of corporate surety.

    In lieu of corporate surety the manufacturer of tobacco products may

[[Page 747]]

pledge and deposit, as security for his bond, securities which are 
transferable and are guaranteed as to both interest and principal by the 
United States, in accordance with the provisions of 31 CFR part 225.

(61 Stat. 650, 72 Stat. 1421; 6 U.S.C.9301, 9303; 26 U.S.C. 5711)



Sec. 40.133  Amount of individual bond.

    The amount of the bond of a manufacturer of tobacco products shall 
be not less than the total amount of tax liability on all tobacco 
products manufactured in his factory, received in bond from other 
factories and from export warehouses, and released to him in bond from 
customs custody, during any calendar month. Where the amount of any bond 
is no longer sufficient and the bond is in less than the maximum amount, 
the manufacturer shall immediately file a strengthening or superseding 
bond as required by this subpart. The amount of any such bond (or the 
total amount including strengthening bonds, if any) need not exceed 
$250,000 for a manufacturer producing or receiving cigarettes in bond; 
need not exceed $150,000 for a manufacturer producing or receiving 
cigars, smokeless tobacco, pipe tobacco, or roll-your-own tobacco in 
bond; and need not exceed $250,000 for a manufacturer producing or 
receiving any combination of tobacco products in bond. The bond of a 
manufacturer of tobacco products shall in no case be less than $1,000.

[T.D. ATF-232, 51 FR 28080, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, 
Dec. 1, 1986, as amended by T.D. ATF-289, 54 FR 48839, Nov. 27, 1989; 
T.D. ATF-424, 64 FR 71931, Dec. 22, 1999]



Sec. 40.134  Amount of blanket bond.

    In the case of a blanket bond filed under the provisions of 
Sec. 40.67, where the total amount of individual bonds otherwise 
required for the factories under Sec. 40.133 does not exceed $250,000, 
such blanket bond shall be not less than the total amount of such 
individual bonds. Where the total amount of such individual bonds 
required is in excess of $250,000 but not in excess of $500,000, the 
amount of the blanket bond shall be not less than $250,000 plus 50 
percent of such total amount which is in excess of $250,000. Where the 
total amount of such individual bonds required is in excess of $500,000 
the amount of the blanket bond shall be not less than $375,000 plus 25 
percent of such total amount which is in excess of $500,000.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 40.135  Strengthening bond.

    Where the amount of any bond is no longer sufficient under the 
provisions of Sec. 40.133 or Sec. 40.134, the manufacturer shall 
immediately file a strengthening bond in an appropriate amount with the 
same surety as that on the bond already in effect, unless a superseding 
bond is filed pursuant to Sec. 40.136. Strengthening bonds will not be 
approved where any notation is made thereon which is intended, or which 
may be construed, as a release of any former bond, or as limiting the 
amount of either bond to less than its full amount.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 40.136  Superseding bond.

    A manufacturer of tobacco products shall immediately file a new bond 
to supersede his current bond when
    (a) The corporate surety on the current bond becomes insolvent,
    (b) The regional director (compliance) approves a request from the 
surety on the current bond to terminate his liability under the bond,
    (c) Payment of any liability under a bond is made by the surety 
thereon,
    (d) The amount of the bond is no longer sufficient under the 
provisions of Sec. 40.133 or Sec. 40.134 and a strengthening bond has 
not been filed, or
    (e) The regional director (compliance) considers such a superseding 
bond necessary for the protection of the revenue.

Where a bond is not filed as required under the provisions of this 
section the manufacturer shall discontinue forthwith the operations to 
which such bond relates.

(72 Stat. 1421: 26 U.S.C. 5711)



Sec. 40.137  Extension of coverage of bond.

    An extension of coverage of bond shall be manifested on Form 2105 by 
the manufacturer of tobacco products

[[Page 748]]

and by the surety on the bond with the same formality and proof of 
authority as required for the execution of the bond.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 40.138  Approval of bond and extension of coverage of bond.

    No person shall commence operations under any bond, nor extend his 
operations, until he receives from the regional director (compliance) 
notice of his approval of the bond or of an appropriate extension of 
coverage of the bond required under this part.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 40.139  Termination of bond.

    Any bond required by this part may be terminated by the regional 
director (compliance) as to liability for future operations (a) pursuant 
to application by the surety as provided in the bond, (b) on approval of 
a superseding bond, or (c) when operations by the manufacturer are 
permanently discontinued in accordance with subpart J. After a bond is 
terminated the surety shall remain bound with respect to any liability 
for unpaid taxes, penalties, and interest, not in excess of the amount 
of the bond, incurred by the manufacturer prior to the termination date.

(72 Stat. 1421; 26 U.S.C. 5711)

[T.D. 6840, 30 FR 9311, July 27, 1965. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 40.140  Release of pledged securities.

    Securities of the United States pledged and deposited as provided in 
Sec. 40.132 shall be released only in accordance with the provisions of 
31 CFR part 225. Such securities will not be released by the regional 
director (compliance) until liability under the bond for which they were 
pledged has been terminated. When the regional director (compliance) is 
satisfied that they may be released, he shall fix the date or dates on 
which a part or all of such securities may be released. At any time 
prior to the release of such securities, the regional director 
(compliance) may extend the date of release for such additional length 
of time as he deems necessary.

(61 Stat. 650, 72 Stat. 1421; 31 U.S.C. 9301, 9303, 26 U.S.C. 5711)



                 Subpart H--Operations by Manufacturers

         Determination and Payment of Taxes on Tobacco Products.



Sec. 40.161  Determination of tax and method of payment.

    Except for removals in bond and transfers in bond, as authorized by 
law, the taxes imposed on tobacco products by section 5701, I.R.C., 
shall be determined at the time of removal of such products and paid on 
the basis of a return, in accordance with the provisions of this part.

(72 Stat. 1417; 26 U.S.C. 5703)

[T.D. 6929, 32 FR 13866, Oct. 5, 1967. Redesignated at 40 FR 16835, Apr. 
15, 1975; T.D. ATF-232, 51 FR 28081, Aug. 5, 1986; T.D. ATF-243, 51 FR 
43194, Dec. 1, 1986]



Sec. 40.162  Semimonthly tax return.

    Every manufacturer of tobacco products shall file, for each of his 
factories, a semimonthly tax return on Form 5000.24 for each return 
period, including any period during which a manufacturer begins or 
discontinues business. The return shall be filed with ATF in accordance 
with the instructions on the form. The manufacturer shall file the 
return at the time specified in Sec. 40.165 regardless of whether 
tobacco products are removed or whether tax is due for that particular 
return period. However, when the manufacturer requests by letter and the 
regional director (compliance) grants specific authorization, the 
manufacturer need not during the term of such authorization file a tax 
return for which tax is not due or payable.

[T.D. ATF-232, 51 FR 35353, Oct. 3, 1986; T.D. ATF-243, 51 FR 43194, 
Dec. 1, 1986, as amended by T.D. ATF-251, 52 FR 19339, May 22, 1987]



Sec. 40.163  Semimonthly tax return periods.

    Except as provided in section 40.164, the periods to be covered by 
semimonthly tax returns shall be from the 1st day of each month through 
the 15th

[[Page 749]]

day of that month and from the 16th day of each month through the last 
day of that month.

[T.D. ATF-365, 60 FR 33675, June 28, 1995]



Sec. 40.164  Special rule for taxes due for the month of September (effective after December 31, 1994).

    (a)(1) Except as provided in paragraph (a)(2) of this section, the 
second semimonthly period for the month of September shall be divided 
into two payment periods, from the 16th day through the 26th day, and 
from the 27th day through the 30th day. The manufacturer shall file a 
return on Form 5000.24, and make remittance, for the period September 
16-26, no later than September 29. The manufacturer shall file a return 
on Form 5000.24, and make remittance, for the period September 27-30, no 
later than October 14.
    (2) Taxpayment not by electronic fund transfer. In the case of taxes 
not required to be remitted by electronic fund transfer as prescribed by 
Sec. 40.165a, the second semimonthly period of September shall be 
divided into two payment periods, from the 16th day through the 25th 
day, and the 26th day through the 30th day. The manufacturer shall file 
a return on Form 5000.24, and make remittance, for the period September 
16-25, no later than September 28. The manufacturer shall file a return 
on Form 5000.24, and make remittance, for the period September 26-30, no 
later than October 14.
    (b) Amount of payment: Safe harbor rule. (1) Taxpayers are 
considered to have met the requirements of paragraph (a)(1) of this 
section, if the amount paid no later than September 29 is not less than 
11/15 (73.3 percent) of the tax liability incurred for the semimonthly 
period beginning on September 1 and ending on September 15, and if any 
underpayment of tax is paid by October 14.
    (2) Taxpayers are considered to have met the requirements of 
paragraph (a)(2) of this section, if the amount paid no later than 
September 28 is not less than 2/3rds (66.7 percent) of the tax liability 
incurred for the semimonthly period beginning on September 1 and ending 
on September 15, and if any underpayment of tax is paid by October 14.
    (c) Last day for payment. If the required due date for taxpayment 
for the periods September 16-25 or September 16-26 as applicable, falls 
on a Saturday or legal holiday, the return and remittance shall be due 
on the immediately preceding day. If the required due date falls on a 
Sunday, the return and remittance shall be due on the immediately 
following day.
    (d) Example. Payment of tax for the month of September--(1) Facts. 
X, a manufacturer of tobacco products required to pay taxes by 
electronic fund transfer, incurred tax liability in the amount of 
$30,000 for the first semimonthly period of September. For the period 
September 16-26, X incurred tax liability in the amount of $45,000, and 
for the period September 27-30, X incurred tax liability in the amount 
of $2,000.
    (2) Payment requirement. X's payment of tax in the amount of $30,000 
for the first semimonthly period of September is due no later than 
September 29 (Sec. 40.165(a)). X's payment of tax for the period 
September 16-26 is also due no later than September 29 
(Sec. 40.164(a)(1)). X may use the safe harbor rule to determine the 
amount of payment due for the period of September 16-26 
(Sec. 40.164(b)). Under the safe harbor rule, X's payment of tax must 
equal $21,990.00, 11/15ths of the tax liability incurred during the 
first semimonthly period of September. Additionally, X's payment of tax 
in the amount of $2,000 for the period September 27-30 must be paid no 
later than October 14 (Sec. 40.164(a)(1)). X must also pay the 
underpayment of tax, $23,010.00, for the period September 16-26, no 
later than October 14 (Sec. 40.164(b)).

[T.D. ATF-365, 60 FR 33675, June 28, 1995]



Sec. 40.165  Times for filing semimonthly return.

    (a) General. Except as provided by Sec. 40.164, and paragraph (b) of 
this section, semimonthly returns on Form 5000.24 shall be filed, for 
each return period, not later than the 14th day after the last day of 
the return period. If the due date falls on a Saturday, Sunday, or legal 
holiday, the return and remittance shall be due on the immediately 
preceding day which is not a Saturday,

[[Page 750]]

Sunday, or legal holiday, except as provided by Sec. 40.164(c).
    (b) Postmark. The official postmark of the U.S. Postal Service 
stamped on the cover in which the return was mailed shall be considered 
the date of delivery of the tax return and, if the return was 
accompanied by a remittance, the date of delivery of the remittance. 
When the postmark is illegible, the manufacturer shall prove when the 
postmark was made. When the proprietor sends the tax return with or 
without remittance by registered mail or by certified mail, the date of 
registry or the date of the postmark on the sender's receipt of 
certified mail, as the case may be, shall be treated as the date of 
delivery of the tax return and, if accompanied, of the remittance.

(Approved by Office of Management and Budget under control number 1512-
0467)

[T.D. ATF-246, 52 FR 669, Jan. 8, 1987, as amended by T.D. ATF-251, 52 
FR 19339, May 22, 1987; T.D. ATF-365, 60 FR 33675, June 28, 1995; T.D. 
ATF-446, 66 FR 16602, Mar. 27, 2001; T.D. ATF-446a, 66 FR 19089, Apr. 
13, 2001]



Sec. 40.165a  Payment of tax by electronic fund transfer.

    (a) General. (1) Each taxpayer who was liable, during a calendar 
year, for a gross amount equal to or exceeding five million dollars in 
taxes on tobacco products, cigarette papers, and cigarette tubes 
combining tax liabilities incurred under this part and parts 275 and 285 
of this chapter, shall use a commercial bank in making payment by 
electronic fund transfer (EFT) of taxes on tobacco products, cigarette 
papers, and cigarette tubes during the succeeding calendar year. Payment 
of taxes on tobacco products by cash, check, or money order, as 
described in Sec. 40.168, is not authorized for a taxpayer who is 
required, by this section, to make remittances by EFT. For purposes of 
this section, the dollar amount of tax liability is defined as the gross 
tax liability on all taxable withdrawals and importations (including 
tobacco products, cigarette papers, and cigarette tubes brought into the 
United States from Puerto Rico or the Virgin Islands) during the 
calendar year, without regard to any drawbacks, credits, or refunds, for 
all premises from which such activities are conducted by the taxpayer. 
Overpayments are not taken into account in summarizing the gross tax 
liability.
    (2) For the purposes of this section, a taxpayer includes a 
controlled group of corporations, as defined in 26 U.S.C. 1563, and 
implementing regulations in 26 CFR 1.1563-1 through 1.1563-4, except 
that the words ``at least 80 percent'' shall be replaced by the words 
``more than 50 percent'' in each place it appears in subsection (a) of 
26 U.S.C. 1563, as well as in the implementing regulations. Also, the 
rules for a ``controlled group of corporations'' apply in a similar 
fashion to groups which include partnerships and/or sole 
proprietorships. If one entity maintains more than 50% control over a 
group consisting of corporations and one, or more, partnerships and/or 
sole proprietorships, all of the members of the controlled group are one 
taxpayer for the purpose of determining who is required to make 
remittances by EFT.
    (3) A taxpayer who is required by this section to make remittances 
by EFT, shall make a separate EFT remittance and file a separate return, 
Form 5000.24, for each factory from which tobacco products are withdrawn 
upon determination of tax.
    (b) Requirements. (1) On or before January 10 of each calendar year, 
except for a taxpayer already remitting the tax by EFT, each taxpayer 
who was liable for a gross amount equal to or exceeding five million 
dollars in taxes on tobacco products, cigarette papers, and cigarette 
tubes combining tax liabilities incurred under this part and parts 275 
and 285 of this chapter, during the previous calendar year, shall 
notify, in writing, the regional director (compliance), for each region 
in which taxes are paid. The notice shall be an agreement to make 
remittances by EFT.
    (2) For each return filed in accordance with this part, the taxpayer 
shall direct the taxpayer's bank to make an electronic fund transfer in 
the amount of the tax payment to the Treasury Account as provided in 
paragraph (e) of this section. The request shall be made to the bank 
early enough for the transfer to be made to the Treasury Account by no 
later than the close of business on the last day for filing the return,

[[Page 751]]

prescribed in Sec. 40.165 or Sec. 40.167. The request shall take into 
account any time limit established by the bank.
    (3) If a taxpayer was liable for less than five million dollars in 
taxes on tobacco products, cigarette papers, and cigarette tubes 
combining tax liabilities incurred under this part and parts 275 and 285 
of this chapter during the preceding calendar year, the taxpayer may 
choose either to continue remitting the tax as provided in this section 
or to remit the tax with the return on as prescribed by Sec. 40.168. 
Upon filing the first return which the taxpayer chooses to discontinue 
remitting the tax by EFT and to begin remitting the tax with the tax 
return, the taxpayer shall notify the regional director (compliance) by 
attaching a written notification to Form 5000.24, stating that no taxes 
are due by EFT, because the tax liability during the preceding calendar 
year was less than five million dollars, and that the remittance shall 
be filed with the tax return.
    (c) Remittance. (1) Each taxpayer shall show on the return, Form 
5000.24, information about remitting the tax for that return period by 
EFT and shall file the return with the ATF, in accordance with the 
instructions on Form 5000.24.
    (2) Remittances shall be considered as made when the taxpayment by 
electronic fund transfer is received by the Treasury Account. For 
purposes of this section, a taxpayment by electronic fund transfer shall 
be considered as received by the Treasury Account when it is paid to a 
Federal Reserve Bank.
    (3) When the taxpayer directs the bank to effect an electronic fund 
transfer message as required by paragraph (b)(2) of this section, any 
transfer data record furnished to the taxpayer, through normal banking 
procedures, will serve as the record of payment, and shall be retained 
as part of required records.
    (d) Failure to make a taxpayment by EFT. The taxpayer is subject to 
a penalty imposed by 26 U.S.C. 5761, 6651, or 6656, as applicable, for 
failure to make a tax payment by EFT on or before the close of business 
on the prescribed last day for filing.
    (e) Procedure. Upon the notification required under paragraph (b)(1) 
of this section, the regional director (compliance) will issue to the 
taxpayer an ATF Procedure entitled, Payment of Tax by Electronic Fund 
Transfer. This publication outlines the procedure a taxpayer is to 
follow when preparing returns and EFT remittances in accordance with 
this part. The U.S. Customs Service will provide the taxpayer with 
instructions for preparing EFT remittances for payments to be made to 
the U.S. Customs Service.

(Approved by Office of Management and Budget under control number 1512-
0457)

(Act of August 16, 1954, 68A Stat. 775, as amended (26 U.S.C. 6302); 
sec. 202, Pub. L. 85-859, 72 Stat. 1417, as amended (26 U.S.C. 5703))

[T.D. ATF-198, 49 FR 37582, Sept. 25, 1984, as amended by T.D. ATF-219, 
50 FR 51390, Dec. 17, 1985; T.D. ATF-232, 51 FR 28081, Aug. 5, 1986; 
T.D. ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-245, 52 FR 533, Jan. 
7, 1987; T.D. ATF-251, 52 FR 19339, May 22, 1987; T.D. ATF-262, 52 FR 
47560, Dec. 15, 1987; T.D. ATF-446, 66 FR 16602, Mar. 27, 2001; T.D. 
ATF-446a, 66 FR 19089, Apr. 13, 2001]



Sec. 40.166  Default, prepayment of tax required.

    Where a check or money order tendered with any return, whether semi-
monthly or prepayment, for payment of tax on tobacco products is not 
paid on presentment, where a manufacturer fails to remit with the return 
the full amount of tax due thereunder, or where a manufacturer is 
otherwise in default in payment of tax on tobacco products under the 
internal revenue laws or this chapter, during the period of such default 
and until the regional director (compliance) finds that the revenue will 
not be jeopardized by the deferred payment of tax pursuant to the 
provisions of this part, no tobacco products shall be removed subject to 
tax until the tax thereon has first been paid as provided in 
Sec. 40.167. Any remittance made during the period of a default shall be 
in cash, or in the form of a certified, cashier's, or treasurer's check 
drawn on any bank or trust company incorporated under the laws of the 
United States, or under the laws of any State, Territory, or possession 
of the United States, or in the form of a U.S. postal money order or 
other money order, and defined in Sec. 70.61 of this chapter (payment by 
check or

[[Page 752]]

money order), or shall be delivered in the form of an electronic fund 
transfer message as provided in Sec. 40.165a.

(68A Stat. 777, 72 Stat. 1417; 26 U.S.C. 6311, 5703; Aug. 16, 1954, ch. 
736, 68A Stat. 707 (26 U.S.C. 5703); Aug. 16, 1954, ch. 736, 68A Stat. 
777 (26 U.S.C. 6311))

[T.D. 6871, 31 FR 34, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55855, Sept. 28, 1979; T.D. 
ATF-77, 46 FR 3008, Jan. 13, 1981; T.D. ATF-232, 51 FR 28081, Aug. 5, 
1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-301, 55 FR 
47658, Nov. 14, 1990]



Sec. 40.167  Prepayment tax return.

    (a) To prepay the tax on tobacco products a manufacturer shall file 
a prepayment tax return on Form 5000.24 showing the tax to be paid on 
the tobacco products prior to removal. The return shall be executed and 
filed, prior to the removal of such products, with ATF, in accordance 
with the instructions on the form. A manufacturer prepaying the taxes on 
tobacco products under the provisions of this section shall continue to 
file semimonthly returns as required by Sec. 40.162.
    (b) However, if a manufacturer is required by Sec. 40.165a to pay 
the tax by electronic fund transfer, the manufacturer shall prepay the 
tax before any tobacco products can be removed for consumption or sale 
by completing the return and filing it with ATF, in accordance with the 
instructions on the form. At the same time, the manufacturer shall 
direct his bank to effect an EFT.

(Sec. 202, Pub. L. 85-859, 68A Stat. 1417 (26 U.S.C. 5703); sec. 202, 
Pub. L. 85-859, 72 Stat. 1423, as amended (26 U.S.C. 5741); (Aug. 16, 
1954, ch. 736, 68A Stat. 775, as amended (26 U.S.C. 6302)); 26 U.S.C. 
7805 (68A Stat. 917, as amended))

[T.D. 6871, 31 FR 34, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-77, 46 FR 3008, Jan. 13, 1981; T.D. 
ATF-219, 50 FR 51390, Dec. 17, 1985; T.D. ATF-232, 51 FR 28081, Aug. 5, 
1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-251, 52 FR 
19340, May 22, 1987]



Sec. 40.168  Remittance with return.

    Except when an electronic fund transfer has been made under 
Sec. 40.165a for the full amount of tax due, the tax on tobacco products 
shown to be due and payable on any return shall be paid by remittance in 
full with the tax return. The remittance may be in the form which the 
regional director (compliance) is authorized to accept under Sec. 70.61 
of this chapter (Payment by check or money order) and which is 
acceptable to him, except as otherwise specified in Sec. 40.166. Checks 
and money orders shall be made payable to the ``Bureau of Alcohol, 
Tobacco and Firearms''. In paying the tax, a fractional part of a cent 
shall be disregarded unless it amounts to one-half cent or more, in 
which case it shall be increased to one cent.

(68A Stat. 778, 72 Stat. 1417; 26 U.S.C. 6313, 5703; Aug. 16, 1954, ch. 
736, 68A Stat. 707, as amended (26 U.S.C. 5703))

[T.D. 6871, 31 FR 35, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55855, Sept. 28, 1979; T.D. 
ATF-77, 46 FR 3009, Jan. 13, 1981; T.D. ATF-232, 51 FR 28081, Aug. 5, 
1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-301, 55 FR 
47658, Nov. 14, 1990]



Sec. 40.169  Employer identification number.

    The employer identification number (defined at 26 CFR 301.7701-12) 
of a manufacturer of tobacco products who has been assigned such a 
number shall be shown on each tax return, Form 5000.24. Failure of the 
manufacturer to include his employer identification number on Form 
5000.24 may result in assertion and collection of the penalty specified 
in Sec. 70.113 of this chapter.

[T.D. ATF-219, 50 FR 51390, Dec. 17, 1985, as amended by T.D. ATF-301, 
55 FR 47658, Nov. 14, 1990]



Sec. 40.170  Application for employer identification number.

    Every manufacturer of tobacco products who has neither secured an 
employer identification number nor made application therefor shall file 
an application on Form SS-4. Form SS-4 may be obtained from any service 
center director or from any district director. Such application shall be 
filed on or before the seventh day after the date on which any tax 
return under this part is filed. Each manufacturer shall

[[Page 753]]

make application for and shall be assigned only one employer 
identification number for all internal revenue tax purposes.

(75 Stat. 828; 26 U.S.C. 6109)

[T.D. 7055, 35 FR 13515, Aug. 25, 1970. Redesignated at 40 FR 16835, 
Apr. 15, 1975]



Sec. 40.171  Execution and filing of Form SS-4.

    The application on Form SS-4, together with any supplementary 
statement, shall be prepared in accordance with the form, instructions, 
and regulations applicable thereto, and shall set forth fully and 
clearly the data therein called for. The application shall be filed with 
the service center director serving any internal revenue district where 
the applicant is required to file returns under this part, except that 
hand-carried applications may be filed with the district director of any 
such district as provided for in 26 CFR 301.6091-1. The application 
shall be signed by (a) the individual if the person is an individual; 
(b) the president, vice president, or other principal officer if the 
person is a corporation; (c) a responsible and duly authorized member or 
officer having knowledge of its affairs if the person is a partnership 
or other unincorporated organization; or (d) the fiduciary if the person 
is a trust or estate.

(75 Stat. 828; 26 U.S.C. 6109)

[T.D. 7055, 35 FR 13515, Aug. 25, 1970. Redesignated at 40 FR 16835, 
Apr. 15, 1975, and amended by T.D. ATF-48, 44 FR 55855, Sept. 28, 1979]

                                 Records



Sec. 40.181  General.

    Every manufacturer of tobacco products must keep records of his 
operations and transactions which shall reflect, for each day, the 
information specified in Secs. 40.182 and 40.183. For this purpose day 
shall mean calendar day, except that the regional director (compliance) 
may, upon application of the manufacturer by letter, in duplicate, 
authorize as such day for a factory a 24-hour cycle of operation other 
than the calendar day. A day once so established as other than the 
calendar day may be changed only by another application approved by the 
regional director (compliance). No specific form is required. The 
manufacturer may use commercial records from which the required 
information may be readily ascertained for this purpose. The 
manufacturer shall keep the auxiliary and supplemental records from 
which such records are compiled and shall keep supporting records, as 
specified in Secs. 40.184 and 40.186, of tobacco products removed 
subject to tax and transferred in bond. Except as provided in 
Secs. 40.184 and 40.186, the entries in the commercial records so 
maintained or kept shall be made not later than the close of the next 
business day following the day on which the transaction(s) occurred. As 
used in this section the term business day shall mean any day other than 
Saturday, Sunday, a legal holiday in the District of Columbia, or a 
statewide legal holiday in the State wherein the factory to which the 
records relate is located.

(72 Stat. 1423, as amended; 26 U.S.C. 5741)

[T.D. ATF-424, 64 FR 71931, Dec. 22, 1999]



Sec. 40.182  Record of tobacco.

    The record of a manufacturer of tobacco products shall show the date 
and total quantity in pounds, of all tobacco other than tobacco 
products:
    (a) Received (including tobacco resulting from reduction of cigars 
and cigarettes, and unpackaging of smokeless tobacco, pipe tobacco and 
roll-your-own tobacco), together with the name and address of the person 
from whom received;
    (b) Shipped or delivered, together with the name and address of the 
person to whom shipped or delivered;
    (c) Lost; and
    (d) Destroyed.

(Approved by the Office of Management and Budget under control number 
1512-0358)

[T.D. 6871, 31 FR 35, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-172, 49 FR 14943, Apr. 16, 1984; T.D. 
ATF-232, 51 FR 28081, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 
1986; T.D. ATF-289, 54 FR 48840, Nov. 27, 1989; T.D. ATF-424, 64 FR 
71931, Dec. 22, 1999]



Sec. 40.183  Record of tobacco products.

    The record of a manufacturer of tobacco products shall show the date 
and

[[Page 754]]

total quantities of all tobacco products, by kind (small cigars-large 
cigars; small cigarettes-large cigarettes; chewing tobacco-snuff; pipe 
tobacco; roll-your-own tobacco):
    (a) Manufactured;
    (b) Received in bond by--
    (1) Transfer from other factories,
    (2) Release from customs custody,
    (3) Transfer from export warehouses, and
    (4) Transfer from foreign trade zone;
    (c) Received by return to bond;
    (d) Disclosed as an overage by inventory;
    (e) Removed subject to tax (itemize large cigars by sale price in 
accordance with Sec. 40.22, except cigars that cost more than $235.294 
may optionally be shown as if the price were $236 per thousand);
    (f) Removed, in bond, for--
    (1) Export,
    (2) Transfer to export warehouses,
    (3) Transfer to other factories,
    (4) Transfer to a foreign trade zone
    (5) Use of the United States, and
    (6) Experimental purposes off factory premises;
    (g) Otherwise disposed of, without determination of tax, by--
    (1) Consumption by employees on factory premises,
    (2) Consumption by employees off factory premises, together with the 
number of employees to whom furnished,
    (3) Use for experimental purposes on factory premises,
    (4) Loss,
    (5) Destruction, and
    (6) Reduction to materials;
    (h) Disclosed as a shortage by inventory; and
    (i) On which the tax has been determined and which are--
    (1) Received, and
    (2) Disposed of.

(Approved by the Office of Management and Budget under control number 
1512-0358)

[T.D. ATF-421, 64 FR 71923, Dec. 22, 1999, as amended by T.D. ATF-424, 
64 FR 71931, Dec. 22, 1999; T.D. ATF-420, 64 FR 71940, Dec. 22, 1999]



Sec. 40.184  Record of removals subject to tax.

    (a) Requirement. Every manufacturer of tobacco products must keep a 
record of tobacco products removed from the factory subject to tax. The 
manufacturer must make entries in this record at the time of removal. 
The record for each removal must show:
    (1) The date of removal,
    (2) The name and address of the person to whom shipped or delivered,
    (3) The kind and quantity of tobacco products removed, and
    (4) For large cigars, show the sale price (If the sale price is more 
than $235.294 per thousand, you may place a note to that effect in the 
record instead of the actual price).
    (b) Exceptions. (1) The record of removal may consist of the 
manufacturer's commercial documents, such as copies of invoices, rather 
than records prepared expressly to meet the requirements of this 
section. If commercial documents are used, they must be kept at the 
factory, contain all the details required by this section, and be clear 
and accurate. Commercial documents that do not show specifically the tax 
classification of tobacco products (including sale price of large 
cigars) are still acceptable if they contain adequate information for an 
ATF officer to readily ascertain the applicable tax.
    (2) Where tobacco products are delivered within the factory directly 
to the consumer, the record need not show the name and address of the 
consumer.

(Sec. 2128(c), Pub. L. 94-455, 90 Stat. 1921 (26 U.S.C. 5741))

[T.D. ATF-420, 64 FR 71941, Dec. 22, 1999]



Sec. 40.185  Retention of records.

    All records required to be kept under this part, including copies of 
authorizations, claims, inventories, notices, reports, returns and 
schedules, shall be retained by the manufacturer for three years 
following the close of the calendar year in which filed or made, or in 
the case of an authorization, for three years following the close of the 
calendar year in which the operation under such authorization is 
concluded. Such records shall be kept in the factory or a place 
convenient thereto, and shall be made available for inspection by any 
ATF officer upon his request.

(72 Stat. 1423; 26 U.S.C. 5741)

[[Page 755]]



Sec. 40.186  Record in support of transfers in bond.

    Every manufacturer of tobacco products shall keep a supporting 
record of tobacco products transferred in bond to or received in bond 
from other factories, and shall make the entries therein at the time of 
each receipt or removal of such products. Such supporting records shall 
show the date of receipt or removal, the name of the manufacturer and 
address of the factory from which received or to which removed or the 
permit number of such factory, and the kind and quantity of tobacco 
products. Where the manufacturer keeps, at the factory, copies of 
invoices or other commercial records containing the information required 
as to each receipt and removal, in such orderly manner that the 
information may be readily ascertained therefrom, such copies will be 
considered the supporting record required by this section.

(Approved by the Office of Management and Budget under control number 
1512-0358)

(72 Stat. 1423, as amended; 26 U.S.C. 5741)

[T.D. 6871, 31 FR 35, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-172, 49 FR 14943, Apr. 16, 1984; T.D. 
ATF-232, 51 FR 28081, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 
1986]



Sec. 40.187  Record of sales prices of large cigars.

    Every manufacturer of tobacco products who removes large cigars from 
the factory shall keep such records as are necessary to establish and 
verify the price for which the cigars are sold, in accordance with 
Sec. 40.22. The record shall be a continuing one of each brand and size 
of cigar so that the sale price on which the tax is based may be readily 
ascertained.

[ T.D. ATF-307, 55 FR 52743, Dec. 21, 1990. Redesignated and amended by 
T.D. ATF-420, 64 FR 71941, Dec. 22, 1999; T.D. ATF-420, 65 FR 1676, Jan. 
11, 2000]

                         Inventories and Reports



Sec. 40.201  Inventories.

    Every manufacturer of tobacco products shall make true and accurate 
inventories on Form 5210.9, which inventories shall include all tobacco 
products and tobacco on hand required to be accounted for in the records 
kept under this part. The manufacturer shall make such an inventory at 
the time of commencing business, which shall be the effective date of 
the permit issued upon original qualification under this part; at the 
time of transferring ownership; at the time of changing the location of 
his factory to a different region; at the time of concluding business; 
and at such other time as any ATF officer may require. Each inventory 
shall be prepared in duplicate, and shall be subject to verification by 
an ATF officer. The original of each such inventory shall be submitted 
to the regional director (compliance), and the duplicate shall be 
retained by the manufacturer.

(Approved by the Office of Management and Budget under control number 
1512-0358)

(72 Stat. 1422, 1423, as amended; 26 U.S.C. 5721, 5741)

[T.D. 6871, 31 FR 35, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-172, 49 FR 14943, Apr. 16, 1984; T.D. 
ATF-232, 51 FR 28081, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 
1986; T.D. ATF-424, 64 FR 71931, Dec. 22, 1999]



Sec. 40.202  Reports.

    (a) Monthly report. Every manufacturer of tobacco products shall 
make a report on Form 5210.5, in duplicate, for each month and for any 
portion of a month during which he engages in such business. Such report 
shall be made regardless of whether any operations or transactions 
occurred during the month or portion of a month covered therein. The 
report for a month or portion of a month in which business is commenced 
or is concluded shall be conspicuously marked ``Commencing Report'' or 
``Concluding Report,'' respectively. The original of the report shall be 
submitted to the regional director (compliance) not later than the 20th 
day of the month succeeding the month covered therein, and the duplicate 
shall be retained by the manufacturer. Each report shall show, for the 
period covered, the total quantity of tobacco products:
    (1) Manufactured,
    (2) Received in bond,
    (3) Received by return to bond,
    (4) Disclosed by inventory as an overage,

[[Page 756]]

    (5) Removed subject to tax,
    (6) Removed in bond,
    (7) Otherwise disposed of without determination of tax,
    (8) Disclosed by inventory as a shortage, and
    (9) On hand, in bond, beginning of and end of month.
    (b) Report of wholesale prices of large cigars removed before 
January 1, 1991. Every manufacturer of tobacco products who removes 
large cigars from his factory, and who issues announcements such as 
those described in this paragraph, shall make a report of each 
establishment or change of wholesale price (suggested delivered price to 
retailers) for large cigars. The report shall consist of a copy of each 
general announcement that the manufacturer issues within his 
organization or to the trade about establishment or changes of wholesale 
prices. Only one copy of an announcement need be submitted even if it 
relates to tobacco products removed subject to tax from more than one 
factory. If this copy does not show the actual date when the 
announcement was issued, or identify the factory or factories from which 
removals of the cigars covered by the announcement are made, then the 
copy shall be annotated to show this information. The factory or 
factories shall be identified either by permit number(s) or by name, 
city and state. If an intraorganizational announcement involves a 
forthcoming price change or new product which at the time of issuance is 
to remain confidential until a later date, the manufacturer may include 
a statement to this effect on the copy submitted. The copy shall be 
submitted to the Associate Director (Compliance Operations), Attn: 
Industry Control Division, Bureau of Alcohol, Tobacco and Firearms, 
Washington, DC 20226, within five business days after the day issued.

(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 (26 U.S.C. 5722))

(Approved by the Office of Management and Budget under Control No. 1512-
0358)

[T.D. 6871, 31 FR 36, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-40, 42 FR 5001, Jan. 26, 1977; T.D. 
ATF-232, 51 FR 28081, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 
1986; T.D. ATF-307, 55 FR 52743, Dec. 21, 1990; T.D. ATF-424, 64 FR 
71931, Dec. 22, 1999]



Sec. 40.203  Statistical classification of large cigars.

    Large cigars are divided into eight classes for statistical 
purposes, according to the wholesale price or sale price, as applicable. 
The eight classes are as follows:
    (a) Class A. Large cigars with a wholesale price or sale price, as 
applicable of not more than $33.00 per thousand.
    (b) Class B. Large cigars with a wholesale price or sale price, as 
applicable of more than $33.00 per thousand but not more than $51.00 per 
thousand.
    (c) Class C. Large cigars with a wholesale price or sale price as 
applicable of more than $51.00 per thousand but not more than $66.00 per 
thousand.
    (d) Class D. Large cigars with a wholesale price or sale price as 
applicable of more than $66.00 per thousand but not more than $105.00 
per thousand.
    (e) Class E. Large cigars with a wholesale price or sale price, as 
applicable of more than $105.00 per thousand but not more than $120.00 
per thousand.
    (f) Class F. Large cigars with a wholesale price or sale price as 
applicable of more than $120.00 per thousand but not more than $154.00 
per thousand.
    (g) Class G. Large cigars with a wholesale price or sale price as 
applicable of more than $154.00 per thousand but not more than $235.294 
per thousand, and

[[Page 757]]

    (h) Class H. Large cigars with a wholesale price or sale price as 
applicable of more than $235.294 per thousand.

[T.D. ATF-40, 42 FR 5002, Jan. 26, 1977, as amended by T.D. ATF-307, 55 
FR 52743, Dec. 21, 1990]

                                Packages



Sec. 40.211  Package.

    All tobacco products shall, before removal subject to tax, be put up 
by the manufacturer in packages which shall be of such construction as 
will securely contain the products therein and maintain the mark and the 
notice thereon as required by this part. No package of tobacco products 
shall have contained therein, attached thereto, or stamped, marked, 
written, or printed thereon (a) any certificate, coupon, or other device 
purporting to be or to represent a ticket, chance, share, or an interest 
in, or dependent on, the event of a lottery, (b) any indecent or immoral 
picture, print, or representation, or (c) any statement or indication 
that United States tax has been paid.

(72 Stat. 1422; 26 U.S.C. 5723)

[T.D. 6871, 31 FR 36, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28081, Aug. 5, 1986 T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 40.212  Mark.

    Every package of tobacco products packaged in a domestic factory 
shall, before removal subject to tax, have adequately imprinted thereon, 
or on a label securely affixed thereto, a mark as specified in this 
section. The mark may consist of the name of the manufacturer removing 
the product subject to tax and the location (by city and State) of the 
factory from which the products are to be so removed, or may consist of 
the permit number of the factory from which the products are to be so 
removed. (Any trade name of the manufacturer approved as provided in 
Sec. 40.65 may be used in the mark as the name of the manufacturer.) As 
an alternative, where tobacco products are packaged and removed subject 
to tax by the same manufacturer, either at the same or different 
factories, the mark may consist of the name of such manufacturer if the 
factory where packaged is identified on or in the package by a means 
approved by the Director. Before using the alternative, the manufacturer 
shall notify the Director in writing of the name to be used as the name 
of the manufacturer and the means to be used for identifying the factory 
where packaged. If approved by him the Director shall return approved 
copies of the notice to the manufacturer. A copy of the approved notice 
shall be retained as part of the factory records at each of the 
factories operated by the manufacturer.

(72 Stat. 1422; 26 U.S.C. 5723)

[T.D. 6871, 31 FR 36, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975; T.D. ATF-232, 51 FR 28081, Aug. 5, 1986; T.D. ATF-243, 52 FR 
43194, Dec. 1, 1986]



Sec. 40.213  Tobacco products labeled for export.

    Tobacco products labeled for export are ineligible for removal from 
the factory and distribution into the domestic U.S. market. Such 
products may only be sold, transferred or delivered onto the domestic 
U.S. market by a manufacturer of tobacco products after repackaging of 
the product. For the purposes of this section, ``repackaging'' shall 
mean the removal of the tobacco product from its original package 
bearing the export marks and placement of the product in a new package. 
The new packages, marks and notices must conform to the requirements of 
this subpart.

[T.D. ATF-421, 64 FR 71924, Dec. 22, 1999]



Sec. 40.214  Notice for cigars.

    Before removal subject to tax, every package of cigars shall have 
adequately imprinted on it, or on a label securely affixed to it--
    (a) The designation ``cigars'';
    (b) The quantity of cigars contained in the package; and
    (c) For small cigars, the classification of the product for tax 
purposes (i.e., either ``small'' or ``little'').

(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 (26 U.S.C. 5723))

[T.D. ATF-80, 46 FR 18310, Mar. 24, 1981]

[[Page 758]]



Sec. 40.215  Notice for cigarettes.

    Every package of cigarettes shall, before removal subject to tax, 
have adequately imprinted thereon, or on a label securely affixed 
thereto, the designation ``cigarettes'', the quantity of such product 
contained therein, and the classification for tax purposes, i.e., for 
small cigarettes, either ``small'' or ``Class A'', and for large 
cigarettes, either ``large'' or ``Class B''.

(72 Stat. 1422; 26 U.S.C. 5723)



Sec. 40.216  Notice for smokeless tobacco.

    (a) Product designation. Every package of chewing tobacco or snuff 
shall, before removal subject to tax, have adequately imprinted thereon, 
or on a label securely affixed thereto, the designation ``chewing 
tobacco'' or ``snuff.'' As an alternative, packages of chewing tobacco 
may be designated ``Tax Class C'', and packages of snuff may be 
designated ``Tax Class M''.
    (b) Product weight. Every package of chewing tobacco or snuff shall, 
before removal subject to tax, have adequately imprinted thereon, or on 
a label securely affixed thereto, a clear statement of the actual pounds 
and ounces of the product contained therein. As an alternative, the 
shipping cases containing packages of chewing tobacco or snuff may, 
before removal, have adequately imprinted thereon, or on a label 
securely affixed thereto, a clear statement, in pounds and ounces, of 
the total weight of the product, the tax class of the product, and the 
total number of the packages of product contained therein.

(Approved by the Office of Management and Budget under control number 
1512-0502)

(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 (26 U.S.C. 5723))

[T.D. ATF-243, 51 FR 43194, Dec. 1, 1986, as amended by T.D. ATF-446, 66 
FR 16602, Mar. 27, 2001]



Sec. 40.216a  Notice for pipe tobacco.

    (a) Product designation. Every package of pipe tobacco shall, before 
removal subject to tax, have adequately imprinted thereon, or on a label 
securely affixed thereto, the designation ``pipe tobacco.'' As an 
alternative, packages of pipe tobacco may be designated ``Tax Class L.''
    (b) Product weight. Every package of pipe tobacco shall, before 
removal subject to tax, have adequately imprinted thereon, or on a label 
securely affixed thereto, a clear statement of the actual pounds and 
ounces of the product contained therein.

[T.D. ATF-289, 54 FR 48840, Nov. 27, 1989. Redesignated at T.D. ATF-424, 
64 FR 71931, Dec. 22, 1999]



Sec. 40.216b  Notice for roll-your-own tobacco.

    (a) Product designation. Before removal subject to tax, roll-your-
own tobacco must have adequately imprinted on, or on a label securely 
affixed to, the package, the designation ``roll-your-own tobacco'' or 
``cigarette tobacco'' or ``Tax Class J.''
    (b) Product weight. Before removal subject to tax, roll-your-own 
tobacco must have a clear statement of the actual weight in pounds and 
ounces of the product in the package. This statement must be adequately 
imprinted on, or on a label securely affixed to, the package.

(Approved by the Office of Management and Budget under control number 
1512-0502)

[T.D. ATF-429, 65 FR 57547, Sept. 25, 2000]



Sec. 40.216c  Package use-up rule.

    (a) A manufacturer must have used such packaging for roll-your-own 
tobacco before January 1, 2000.
    (b) A manufacturer of roll-your-own tobacco may continue to place 
roll-your-own tobacco in packages that do not meet the marking 
requirements of Secs. 40.212 and 40.216b(b) until April 1, 2000.
    (c) A manufacturer of roll-your-tobacco may continue to place roll-
your-tobacco in packages that do not meet the requirements of 
Sec. 40.216b(a) until October 1, 2000.

[T.D. ATF-427, 65 FR 40051, June 29, 2000]



Sec. 40.217  Repackaging.

    Where a manufacturer of tobacco products desires to repackage, 
outside the factory, tobacco products on which the tax has been 
determined or which were removed for a tax-exempt purpose or transferred 
in bond to an export

[[Page 759]]

warehouse, or to repackage tax determined tobacco products in the 
factory, he shall make application for authorization to do so, in 
duplicate, to the regional director (compliance) for the region in which 
the products are to be repackaged. The application shall set forth the 
location and the number of packages, a description of the contents, the 
tax status of the tobacco products the reason for wanting to repackage 
the products (e.g., packages soiled, damaged, or otherwise in a 
condition making the product unsalable), and a description of the 
package to be used for repackaging. The packages to be used must comply 
with the package, mark, and notice provisions of this chapter applicable 
to the tobacco products being repackaged. The operations authorized 
under this section are limited solely to repackaging for good cause by a 
manufacturer, pursuant to an approved application, of the specified 
tobacco products in the described packages, and do not include any 
manufacturing processes. If the regional director (compliance) approves 
the application, he may assign an ATF officer to supervise the 
repackaging or he may authorize the manufacturer to repackage the 
products without supervision by so stating on a copy of the application 
returned to the manufacturer. Where the manufacturer is authorized to 
repackage he shall record the date of repackaging on the approved 
application and retain it as part of his records.

(72 Stat. 1422; 26 U.S.C. 5723)

[T.D. 6871, 31 FR 36, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28082, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]

                Exemption From Taxes on Tobacco Products



Sec. 40.231  Consumption by employees.

    A manufacturer of tobacco products may gratuitously furnish tobacco 
products, without determination and payment of tax, for personal 
consumption by employees in the factory in such quantities as desired. 
Each employee may also be gratuitously furnished by the manufacturer, 
for off-factory personal consumption, not more than 5 large cigars or 
cigarettes, 20 small cigars or cigarettes, or one retail package of 
chewing tobacco, snuff, pipe tobacco or roll-your-own tobacco, or a 
proportionate quantity of each, without determination and payment of 
tax, on each day the employee is at work. For the purposes of this 
section, the term ``employee'' shall mean those persons whose duties 
require their presence in the factory of whose duties relate to the 
manufacture, distribution, or sale of tobacco products and who receive 
compensation from the manufacturer, or a parent, subsidiary, or 
auxiliary company or corporation of the manufacturer. Such product 
furnished for off-factory consumption shall be furnished to the employee 
within the factory and taken from the factory by the employee on the day 
for which furnished. Employees shall not sell, offer for sale, or give 
away products so furnished.

[T.D. ATF-232, 51 FR 28082, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, 
Dec. 1, 1986, as amended by T.D. ATF-289, 54 FR 48840, Nov. 27, 1989; 
T.D. ATF-424, 64 FR 71931, Dec. 22, 1999]



Sec. 40.232  Experimental purposes.

    A manufacturer of tobacco products may use tobacco products without 
determination and payment of tax, for experimental (including testing) 
purposes in his factory, in such quantities as desired. When authorized 
by the regional director (compliance) a manufacturer may also remove 
tobacco products in bond, for experimental (including testing) purposes 
outside his factory. Removal of tobacco products under this section will 
be authorized only for bona fide experimental purposes, such as for use 
by producers of machines designed to package such products for testing 
and experimenting in the operation of these machines, or for use in 
laboratories, hospitals, medical centers, institutes, colleges, and 
universities, for scientific, technical, or medical research. Tobacco 
products may not be removed, under this section, for such purposes as 
advertising, salesmen's or customers' samples, or for consumer testing. 
An application to the regional director (compliance) for authorization 
to remove tobacco products in bond for experimental purposes shall be by 
letter, in duplicate, and shall set forth the name and address of

[[Page 760]]

the consignee, the kind and quantity of tobacco products to be removed, 
and the intended use of the products. The manufacturer shall retain, as 
part of his records, each authorization of the regional director 
(compliance) for such removal of tobacco products.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 37, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28082, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 40.233  Transfer in bond.

    A manufacturer of tobacco products may transfer tobacco products in 
bond, to the factory of any manufacturer of tobacco products. The 
transfer of tobacco products in bond to the premises of an export 
warehouse proprietor shall be in accordance with the provisions of part 
44 of this chapter. Tobacco products are not eligible for transfer in 
bond to a manufacturer of tobacco products or to an export warehouse 
unless they bear all required marks, labels, or notices.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 37, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28082, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71924, Dec. 22, 
1999]



Sec. 40.234  Removal for use of the United States.

    The removal of tobacco products in bond, for use of the United 
States, shall be in accordance with the provisions of part 45 of this 
chapter.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 37, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975; T.D. ATF-232, 51 FR 28082, Aug. 5, 1986; T.D. ATF-243, 51 FR 
43194, Dec. 1, 1986; T.D. ATF-469, 66 FR 56758, Nov. 13, 2001]



Sec. 40.235  Removal for export purposes.

    The removal of tobacco products in bond, for shipment to a foreign 
country, Puerto Rico, the Virgin Islands, or a possession of the United 
States, or for consumption beyond the jurisdiction of the internal 
revenue laws of the United States, shall be in accordance with the 
provisions of part 44 of this chapter.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 37, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28082, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 40.236  Release from customs custody.

    The release of tobacco products from customs custody, in bond, for 
transfer to the premises of a tobacco products factory, shall be in 
accordance with the provisions of part 275 of this chapter.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 37, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28082, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]

              Other Provisions Relating to Tobacco Products



Sec. 40.251  Emergency storage.

    In cases of emergency, the regional director (compliance) may 
authorize, for a stated period, the temporary storage of tobacco 
products at a place outside the factory without the application for 
amended permit required under Sec. 40.114, where such action will not 
hinder the effective administration of this part, is not contrary to 
law, and will not jeopardize the revenue. Application for authorization 
to so store tobacco products shall be submitted to the regional director 
(compliance) by letter, in duplicate. All tobacco products so stored 
outside the factory shall be accounted for in the records and reports 
required under Secs. 40.183 and 40.202 the same as products within the 
factory.

(72 Stat. 1422, 1423, as amended; 26 U.S.C. 5722, 5741)

[T.D. 6871, 31 FR 37, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975; T.D. ATF-232, 51 FR 28082, Aug. 5, 1986; T.D. ATF-243, 51 FR 
43194, Dec. 1, 1986]



Sec. 40.252  Reduction of tobacco products to materials.

    A manufacturer may reduce tobacco products to materials without 
supervision. If the tobacco products have been entered in the factory 
record as

[[Page 761]]

manufactured or received, an entry shall be made in such record of the 
quantity of pipe tobacco or roll-your-own tobacco and the kind and 
quantity of cigars, cigarettes, and smokeless tobacco reduced to 
materials and of the quantity of tobacco resulting from the reduction. 
Where the manufacturer intends to file claims for credit allowance, or 
refund of tax on such tobacco products, he shall comply with the 
provisions of Secs. 40.311 and 40.313.

[T.D. ATF-232, 51 FR 28082, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, 
Dec. 1, 1986, as amended by T.D. ATF-289, 54 FR 48840, Nov. 27, 1989; 
T.D. ATF-424, 64 FR 71931, Dec. 22, 1999]



Sec. 40.253  Destruction.

    When a manufacturer of tobacco products desires to destroy tobacco 
products which have been entered in the factory record as manufactured 
or received, without salvaging the tobacco, he shall notify the regional 
director (compliance) by letter, in duplicate, of the kind and quantity 
of tobacco products to be destroyed, the intended method of destruction, 
and the date on which he desires to destroy such products. The regional 
director (compliance) may assign an ATF officer to supervise destruction 
of the tobacco products or he may authorize the manufacturer to destroy 
such products without supervision by so stating on a copy of the 
manufacturer's notice returned to the manufacturer. When so authorized 
by the regional director (compliance), the manufacturer shall destroy 
the tobacco products by burning completely or by rendering them unfit 
for consumption. Upon completion of the destruction, the manufacturer 
shall make an entry of such destruction in his factory record, and where 
destruction without supervision is authorized, shall record the date and 
method of destruction on the notice returned to him by the regional 
director (compliance), which notice the manufacturer shall retain. Where 
the manufacturer intends to file claim for credit, allowance, or refund 
of tax on such products he shall comply with the provisions of 
Secs. 40.311 and 40.313.

(72 Stat. 1423, as amended; 26 U.S.C. 5741)

[T.D. 6871, 31 FR 37, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28082, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 40.254  Receipt into factory.

    A manufacturer of tobacco products may receive in bond into his 
factory tobacco products and may also receive into his factory tobacco 
products on which the tax has been determined (including products on 
which the tax has been paid). Cigars and cigarettes on which the tax has 
been determined which are so received shall be segregated and identified 
as products on which the tax has been determined. If tax determined 
products received into the factory are so handled that they cannot be 
identified both physically and in the records as tax determined products 
they shall be accounted for as returned to bond and upon subsequent 
removal shall be tax determined. Where returned tax determined tobacco 
products are to be repackaged without being returned to bond the 
manufacturer shall make application for authorization to do so to the 
regional director (compliance) in accordance with Sec. 40.217. Where the 
manufacturer intends to file claim for credit, allowance, or refund of 
tax on tax determined products he shall comply with the provisions of 
Secs. 40.311 and 40.313.

[T.D. 6871, 31 FR 37, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28082, Aug. 5, 1986; T.D. 
ATF-243, 52 FR 43194, Dec. 1, 1986]



Sec. 40.255  Shortages and overages in inventory.

    Whenever a manufacturer of tobacco products makes a physical 
inventory of packaged tobacco products in bond, either as part of normal 
operations or when required by an ATF officer, and such inventory 
discloses a shortage or

[[Page 762]]

overage in such products by kind as recorded and reported (i.e., small 
cigars, large cigars, chewing tobacco, snuff, pipe tobacco, or roll-
your-own tobacco), the manufacturer shall enter such shortage or overage 
in the records required by Sec. 40.183. Shortages or overages in 
inventories made at different times may not be used to offset each 
other, but shall be recorded and reported separately. Unless the 
manufacturer establishes that a shortage was not caused by a removal 
subject to the tax the manufacturer shall determine the tax on any 
shortage, make an adjustment in Schedule A of his next semimonthly tax 
return and pay the tax thereon. If, after paying the tax on a shortage, 
the manufacturer satisfactorily establishes that the shortage was not 
caused by a removal subject to tax, then such payment would be an 
overpayment of tax which the manufacturer may recover as provided in 
Sec. 40.286. Where the manufacturer can establish prior to paying the 
tax on a shortage, that the shortage was not the result of a removal 
subject to tax he shall submit an explanation of such shortage with his 
report for the month in which the shortage was disclosed and, if 
appropriate, he may file claim for remission of tax liability as 
provided in Sec. 40.287. When an overage is disclosed which the 
manufacturer can explain, he shall include such explanation in his 
monthly report and refund of any overpayment may be recovered as 
provided in Sec. 40.286. Whenever a physical inventory discloses a 
shortage or overage of tobacco products which have not been packaged the 
manufacturer shall appropriately enter such shortage or overage in his 
records and shall, at the time required by the Regional Director 
(Compliance), furnish an explanation in the form of a claim for 
remission of tax liability as provided in Sec. 40.287. The manufacturer 
shall pay the tax on any shortage or portion thereof for which he is 
unable to furnish an explanation acceptable to the Regional Director 
(Compliance).

[T.D. ATF-232, 51 FR 28082, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, 
Dec. 1, 1986, as amended by T.D. ATF-289, 54 FR 48840, Nov. 27, 1989; 
T.D. ATF-424, 64 FR 71931, Dec. 22, 1999]



                   Subpart I--Claims by Manufacturers

                                 General



Sec. 40.281  Abatement of assessment.

    A claim for abatement of the unpaid portion of the assessment of any 
tax on tobacco products or any liability in respect thereof, may be 
allowed to the extent that such assessment is excessive in amount, is 
assessed after expiration of the applicable period of limitation, or is 
erroneously or illegally assessed. Any claim under this section shall be 
prepared on Form 2635 (5620.8), in duplicate, and shall set forth the 
particulars under which the claim is filed. The original of the claim, 
accompanied by such evidence as is necessary to establish to the 
satisfaction of the regional director (compliance) that the claim is 
valid, shall be filed with the regional director (compliance) for the 
region in which the tax or liability was assessed, and the duplicate of 
the claim shall be retained by the manufacturer.

(68A Stat. 792; 26 U.S.C. 6404)

[T.D. 6871, 31 FR 38, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28083, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-251, 52 FR 19340, May 22, 
1987]



Sec. 40.282  Allowance of tax.

    Relief from the payment of tax on tobacco products may be extended 
to a manufacturer by allowance of the tax where the tobacco products 
after removal from the factory upon determination of tax and prior to 
the payment of such tax, are lost (otherwise than by theft) or 
destroyed, by fire, casualty, or act of God, while in the possession or 
ownership of the manufacturer who removed such products, or are 
withdrawn by him from the market. Any claim for allowance under this 
section shall be filed on Form 2635, in duplicate, with the regional 
director (compliance) for the region in which the products were removed, 
and shall show the date the tobacco products were removed from the 
factory. A claim relating to products lost or destroyed shall be 
supported as prescribed in Sec. 40.301. In the case of a claim relating 
to tobacco products withdrawn

[[Page 763]]

from the market the schedule prescribed in Sec. 40.311 shall be filed 
with the regional director (compliance) for the region in which the 
products are assembled. The manufacturer may not anticipate allowance of 
his claim by making the adjusting entry in a tax return pending 
consideration and action on the claim. Tobacco products to which such a 
claim relates must be shown as removed on determination of tax in the 
return covering the period during which such products were so removed. 
Upon action on the claim by the regional director (compliance) he will 
return the copy of Form 2635 to the manufacturer as notice of such 
action, which copy, with the copy of any verified supporting schedules, 
shall be retained by the manufacturer. When such notification of 
allowance of the claim or any part thereof is received prior to the time 
the return covering the tax on the tobacco products to which the claim 
relates is to be filed, the manufacturer may make an adjusting entry and 
explanatory statement in that tax return. Where the notice of allowance 
is received after the filing of the return and taxpayment of the tobacco 
products to which the claim relates, the manufacturer may make an 
adjusting entry and explanatory statement in the next tax return(s) to 
the extent necessary to take credit in the amount of the allowance.

(72 Stat. 1419, as amended; 26 U.S.C. 5705)

[T.D. 6961, 33 FR 9488, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28083, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 40.283  Credit or refund of tax.

    The taxes paid on tobacco products may be credited or refunded 
(without interest) to a manufacturer on proof satisfactory to the 
regional director (compliance) that the claimant manufacturer paid the 
tax on tobacco products lost (otherwise than by theft) or destroyed, by 
fire, casualty, or act of God, while in the possession or ownership of 
such manufacturer, or withdrawn by him from the market. Any claim for 
credit or refund under this section shall be prepared on Form 2635 
(5620.8), in duplicate. Claims shall include a statement that the tax 
imposed on tobacco products by 26 U.S.C. 7652 or chapter 52, was paid in 
respect to the tobacco products covered by the claim, and that the 
products were lost, destroyed, or withdrawn from the market within 6 
months preceding the date the claim is filed. A claim for credit or 
refund relating to products lost or destroyed shall be supported as 
prescribed in Sec. 40.301, and a claim relating to products withdrawn 
from the market shall be accompanied by a schedule prepared and verified 
as prescribed in Secs. 40.311 and 40.313. The original and one copy of 
Form 2635 (5620.8), claim for credit, or the original of Form 2635 
(5620.8), claim for refund, shall be filed with the regional director 
(compliance) for the region in which the tax was paid, or where the tax 
was paid in more than one region with the regional director (compliance) 
for any one of the regions in which the tax was paid. Upon action by the 
regional director (compliance) on a claim for credit he will return the 
copy of Form 2635 to the manufacturer as notification of allowance or 
disallowance of the claim or any part thereof, which copy, with the copy 
of any verified supporting schedules, shall be retained by the 
manufacturer. When the manufacturer is notified of allowance of the 
claim for credit or any part thereof he shall make an adjusting entry 
and explanatory statement in the next tax return(s) to the extent 
necessary to take credit in the amount of the allowance. Prior to 
consideration and action on his claim the manufacturer may not 
anticipate allowance of his claim by taking credit in his tax return. 
The duplicate of a claim for refund, with the copy of any verified 
supporting schedules, shall be retained by the manufacturer.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1419)

[T.D. 6961, 33 FR 9489, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55855, Sept. 28, 1979; T.D. 
ATF-219, 50 FR 51389, Dec. 17, 1985; T.D. ATF-232, 51 FR 28083, Aug. 5, 
1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-251, 52 FR 
19340, May 22, 1987]



Sec. 40.284  Remission of tax liability.

    Remission of the tax liability on tobacco products may be extended 
to the manufacturer liable for the tax where

[[Page 764]]

tobacco products in bond are lost (otherwise than by theft) or 
destroyed, by fire, casualty, or act of God, while in the possession or 
ownership of such manufacturer. Where tobacco products are so lost or 
destroyed the manufacturer shall report promptly such fact, and the 
circumstances, to the regional director (compliance) for the region in 
which the factory is located. If the manufacturer wishes to be relieved 
of the tax liability thereon he shall also prepare a claim on Form 2635, 
in duplicate, setting forth the nature, date, place, and extent of the 
loss or destruction. Both copies of the claim, accompanied by such 
evidence as is necessary to establish to the satisfaction of the 
regional director (compliance) that the claim is valid, shall be filed 
with the regional director (compliance) for the region in which the 
factory is located. Upon action on the claim by the regional director 
(compliance) he will return the copy of Form 2635 to the manufacturer as 
notice of such action, which copy shall be retained by the manufacturer.

(72 Stat. 1419, as amended; 26 U.S.C. 5705)

[T.D. 6961, 33 FR 9489, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28083, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 40.285  [Reserved]



Sec. 40.286  Refund of overpayment.

    Where an error in computation of the quantity of tobacco products or 
in computation of the amount of tax due results in an overpayment and 
such error is specifically identified and supported by records, the 
manufacturer may file claim for refund or may make an adjustment in his 
semimonthly tax return as provided in Sec. 40.164. (Section 6511, 26 
U.S.C., provides that, in most cases, any adjustment of claim for refund 
of an overpayment of tax on tobacco products must be made or filed 
within three years after the tax is paid.) If the manufacturer elects to 
file a claim for refund of an overpayment resulting from such a 
computational error, he shall do so on Form 2635 (5620.8), in duplicate. 
The original shall be filed with the regional director (compliance) for 
the region in which the tax was paid, and the duplicate retained by the 
manufacturer. Where an overpayment of tax on tobacco products results 
from other than a computational error any claim for refund or credit 
shall be made in accordance with subpart A of part 46 of this chapter.

(68A Stat. 791, 72 Stat. 9; 26 U.S.C. 6402, 6423)

[T.D. 6871, 31 FR 39, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55855, Sept. 28, 1979; T.D. 
ATF-232, 51 FR 28083, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 
1986; T.D. ATF-251, 52 FR 19340, May 22, 1987; T.D. ATF-457, 66 FR 
32220, June 14, 2001]



Sec. 40.287  Remission of tax liability on shortage.

    Whenever a manufacturer of tobacco products desires to submit a 
claim for remission of tax liability on shortages of tobacco products in 
bond, disclosed by physical inventory as set forth in Sec. 40.255, he 
shall prepare such claim on Form 2635, in duplicate. Both copies of the 
claim shall be filed with the regional director (compliance) for the 
region in which the factory is located. The claim shall specify the 
quantities of tobacco products on which claim is made and the tax 
liability in respect thereof, and shall set forth the circumstances 
surrounding the shortage and the reason the manufacturer believes tax is 
not due or payable. The regional director (compliance) will, after such 
investigation as he deems appropriate, allow the claim to the extent he 
is satisfied the shortage was due to operating losses such as damage 
during grading, sorting, or packaging, and was not caused by theft or 
other unlawful or improper removal. Upon action on the claim by the 
regional director (compliance) he will return the copy of Form 2635 to 
the manufacturer as notice of such action, which copy shall be retained 
by the manufacturer.

(72 Stat. 1414, as amended, 1417, 1419, as amended; 26 U.S.C. 5701, 
5703, 5705)

[T.D. 6961, 33 FR 9489, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28083, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]

[[Page 765]]

                   Tobacco Products Lost or Destroyed



Sec. 40.301  Action by claimant.

    Where tobacco products are lost (otherwise than by theft) or 
destroyed, by fire, casualty, or act of God, and the manufacturer 
desires to file a claim for the tax on such products under the 
provisions of Sec. 40.282 or Sec. 40.283, he shall indicate on the claim 
the nature, date, place, and extent of such loss or destruction. The 
claim shall be accompanied by such evidence as is necessary to establish 
to the satisfaction of the regional director (compliance) that the claim 
is valid.

(72 Stat. 1419, as amended; 26 U.S.C. 5705)

[T.D. 6871, 31 FR 39, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28083, Aug. 5, 1986; T.D. 
ATF-243, 52 FR 43194, Dec. 1, 1986]

               Tobacco Products Withdrawn From the Market



Sec. 40.311  Action by claimant.

    (a) General. Where tobacco products are withdrawn from the market 
and the manufacturer desires to file claim under the provisions of 
Sec. 40.282 or Sec. 40.283, he shall assemble the products in or 
adjacent to a factory if they are to be returned to bond or at any 
suitable place if they are to be destroyed or reduced to materials. The 
manufacturer shall group the products according to the rates of tax 
applicable to the products, and shall prepare a schedule of the 
products, on ATF Form 5200.7, in triplicate. All copies of the schedule 
shall be forwarded to the regional director (compliance) for the region 
in which the products are assembled.
    (b) Large cigars. Refund or credit of tax on large cigars withdrawn 
from the market is limited to the lowest tax paid on that brand and size 
of cigar during the required record retention period (see Sec. 40.185), 
except where the manufacturer establishes that a greater amount was 
actually paid. For each claim involving large cigars withdrawn from the 
market, the manufacturer must include a certification on either Form 
5200.7 or Form 2635 (5620.8) to read as follows:

    The amounts claimed relating to large cigars are based on the lowest 
sale price applicable to the cigars during the required record retention 
period, except where specific documentation is submitted with the claim 
to establish that any greater amount of tax claimed was actually paid.


(See 26 U.S.C. 5705)

[T.D. ATF-80, 46 FR 18310, Mar. 24, 1981, as amended by T.D. ATF-232, 51 
FR 28083, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. 
ATF-251, 52 FR 19340, May 22, 1987; T.D. ATF-307, 55 FR 52743, Dec. 21, 
1990; T.D. ATF-424, 64 FR 71932, Dec. 22, 1999; T.D. ATF-420, 64 FR 
71941, Dec. 22, 1999]



Sec. 40.312  Action by regional director (compliance).

    Upon receipt of a schedule of tobacco products withdrawn from the 
market, the regional director (compliance) may assign an ATF officer to 
verify the schedule and supervise disposition of the tobacco products 
(and destruction of the stamps, if any), or he may authorize the 
manufacturer to dispose of the products (and destroy the stamps, if any) 
without supervision by so stating on the original and one copy of the 
schedule returned to the manufacturer.

[T.D. 6871, 31 FR 39, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, as amended by T.D. ATF-232, 51 FR 28083, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 40.313  Disposition of tobacco products and schedule.

    When so authorized, as evidenced by the regional director's 
(compliance) statement on the schedule, the manufacturer shall dispose 
of the tobacco products (and destroy the stamps, if any) as specified in 
the schedule. After the manufacturer has disposed of the products (and 
destroyed the stamps, if any), he shall execute a certificate on both 
copies of the schedule returned to him by the regional director 
(compliance), to show the disposition and the date of disposition of the 
products (and stamps, if any). In connection with a claim for allowance 
the manufacturer then shall return the original of the schedule to the 
regional director (compliance) who authorized such disposition, who will 
cause such schedule to be associated with the claim, Form 2635 (5620.8), 
filed under Sec. 40.282. In connection with a claim for credit or refund 
the manufacturer shall attach the original of the schedule to his claim 
for

[[Page 766]]

credit, Form 2635 (5620.8), or claim for refund, Form 2635 (5620.8), 
filed under Sec. 40.283. When an ATF officer is assigned to verify the 
schedule and supervise disposition of the tobacco products, such officer 
shall, upon completion of his assignment, execute a certificate on all 
copies of the schedule to show the disposition and the date of 
disposition of the products. In connection with a claim for allowance 
the officer shall return one copy of the schedule to be included in the 
manufacturers records, and in connection with a claim for credit or 
refund, the officer shall return the original and one copy of the 
schedule to the manufacturer, the original of which the manufacturer 
shall attach to the claim, Form 2635 (5620.8), filed under Sec. 40.283.

(72 Stat. 1419, as amended; 26 U.S.C. 5705)

[T.D. 6871, 31 FR 39, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28083, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-251, 52 FR 19340, May 22, 
1987]



 Subpart J--Suspension and Discontinuance of Operations by Manufacturers



Sec. 40.331  Discontinuance of operations.

    Every manufacturer of tobacco products who desires to discontinue 
operations under this part shall dispose of all tobacco products on 
hand, in accordance with this part, and make a concluding inventory and 
concluding report in accordance with the provisions of Sec. 40.201 and 
Sec. 40.202, respectively. The manufacturer shall surrender his permit, 
with such inventory and report, to the regional director (compliance) as 
notice of such discontinuance. The regional director (compliance) may 
then terminate the liability of the surety on the bond of the 
manufacturer.

(72 Stat. 1422; 26 U.S.C. 5721, 5722)

[T.D. 6871, 37 FR 40, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28083, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 40.332  Suspension and revocation of permit.

    Where the regional director (compliance) has reason to believe that 
a manufacturer of tobacco products has not in good faith complied with 
the provisions of 26 U.S.C. chapter 52, and regulations thereunder, or 
with any other provision of 26 U.S.C. with intent to defraud, or has 
violated any condition of his permit, or has failed to disclose any 
material information required or made any material false statement in 
the application for the permit, or has failed to maintain his premises 
in such manner as to protect the revenue, the regional director 
(compliance) shall issue an order, stating the facts charged, citing 
such person to show cause why his permit should not be suspended or 
revoked. Such citation shall be issued and opportunity for hearing 
afforded in accordance with part 71 of this chapter, which part is 
applicable to such proceedings. If the hearing examiner, or on appeal, 
the Director, decides the permit should be suspended or revoked, the 
regional director (compliance) shall by order give effect to such 
decision.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1421, as amended (26 U.S.C. 5713))

[26 FR 8174, Aug. 31, 1961. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55855, Sept. 28, 1979; T.D. ATF-463, 
66 FR 42734, Aug. 15, 2001]



          Subpart K--Manufacture of Cigarette Papers and Tubes

    Source: T.D. ATF-384, 61 FR 54085, Oct. 17, 1996, unless otherwise 
noted.

                                  Taxes



Sec. 40.351  Cigarette papers.

    Cigarette papers are taxed at the following rates under 26 U.S.C. 
5701(c):

[[Page 767]]



------------------------------------------------------------------------
                                    Tax rate for each 50 papers \1\ for
                                         removals during the years:
             Product              --------------------------------------
                                     1993 to      2000 and     2002 and
                                     1999 \2\       2001        after
------------------------------------------------------------------------
Cigarette papers up to 6\1/2\ long....................
Cigarette papers over 6\1/2\ long....................   Use rates above, but count each 2\3/
                                     4\ inches, or fraction thereof, of
                                    the length of each as one cigarette
                                                   paper.
------------------------------------------------------------------------
\1\ Tax rate for less than 50 papers is the same. The tax is not
  prorated.
\2\ Before January 1, 2000, books or sets containing 25 papers or less
  were not taxable. On and after January 1, 2000, all cigarette papers
  are taxable.


(72 Stat. 1414; 26 U.S.C. 5701)

[T.D. ATF-420, 64 FR 71941, Dec. 22, 1999]



Sec. 40.352  Cigarette tubes.

    Cigarette tubes are taxed at the following rates under 26 U.S.C. 
5701(d):

------------------------------------------------------------------------
                                      Tax rate for each 50 tubes* for
                                         removals during the years
             Product              --------------------------------------
                                     1993 to      2000 and     2002 and
                                       1999         2001        after
------------------------------------------------------------------------
Cigarette tubes up to 6\1/2\ long....................
Cigarette tubes over 6\1/2\ long....................   Use rates above, but count each 2\3/
                                     4\ inches, or fraction thereof, of
                                    the length of each as one cigarette
                                                   tube.
------------------------------------------------------------------------
*Tax rate for less than 50 tubes is the same. The tax is not prorated.


(72 Stat. 1414; 26 U.S.C. 5701)

[T.D. ATF-420, 64 FR 71941, Dec. 22, 1999]



Sec. 40.353  Persons liable for tax.

    The manufacturer of cigarette papers and tubes shall be liable for 
the taxes imposed on such articles by 26 U.S.C. 5701. When a 
manufacturer of cigarette papers and tubes transfers such papers and 
tubes without payment of tax, pursuant to 26 U.S.C. 5704 to the bonded 
premises of another such manufacturer, a manufacturer of tobacco 
products, or an export warehouse proprietor, the transferee shall become 
liable for the tax upon receipt of such papers and tubes and the 
transferor shall thereupon be relieved of liability for the tax. When 
cigarette papers and tubes are released in bond from customs custody for 
transfer to the bonded premises of a manufacturer of such papers and 
tubes or a manufacturer of tobacco products, the transferee shall become 
liable for the tax on the papers and tubes upon release from customs 
custody. Any person who possesses cigarette papers and tubes in 
violation of 26 U.S.C. 5751(a) (1) or (2), shall be liable for a tax 
equal to the rate of tax applicable to such articles.

(72 Stat. 1417, 1424; 26 U.S.C. 5703, 5751)



Sec. 40.354  Determination of tax and method of payment.

    Except for removals without payment of tax and transfers in bond, as 
authorized by law, no cigarette papers and tubes shall be removed until 
the taxes imposed by section 5701, I.R.C., have been determined. The 
payment of taxes on cigarette papers and tubes which are removed on 
determination of tax shall be made by return in accordance with the 
provisions of this subpart.

(72 Stat. 1417; 26 U.S.C. 5703)



Sec. 40.355  Return of manufacturer.

    (a) Requirement for filing. A manufacturer of cigarette papers and 
tubes shall file, for each factory, a semimonthly tax return on ATF Form 
5000.24. A return shall be filed for each semimonthly return period 
regardless of whether cigarette papers and tubes were removed subject to 
tax or whether tax is due for that particular return period.

[[Page 768]]

    (b) Waiver from filing. The manufacturer need not file a return for 
each semimonthly return period if:
    (1) Cigarette papers and tubes were not removed subject to tax 
during the period, and
    (2) The regional director (compliance) has granted a waiver from 
filing in response to a written request from the manufacturer.
    (c) Semimonthly return periods. Except as provided by paragraph (g) 
of this section, semimonthly return periods shall run from the first day 
of the month through the 15th day of the month, and from the 16th day of 
the month through the last day of the month.
    (d) Preparation and filing. The return shall be executed and filed 
with ATF in accordance with the instructions on the form.
    (e) Remittance of tax. Except as provided in Sec. 40.357, remittance 
of the tax, if any, shall accompany the return.
    (f) Time for filing. Except as provided by paragraph (g) of this 
section, for each semimonthly return period, the return shall be filed 
not later than the 14th day after the last day of the return period. If 
the due date falls on a Saturday, Sunday, or legal holiday, the return 
and remittance shall be due on the immediately preceding day which is 
not a Saturday, Sunday or legal holiday.
    (g) Special rule for taxes due for the month of September (effective 
after December 31, 1994). (1) Except as provided in paragraph (g)(2) of 
this section, the second semimonthly period for the month of September 
shall be divided into two payment periods, from the 16th day through the 
26th day, and from the 27th day through the 30th day. The manufacturer 
shall file a return on Form 5000.24, and make remittance, for the period 
September 16-26, no later than September 29. The manufacturer shall file 
a return on Form 5000.24, and make remittance, for the period September 
27-30, no later than October 14.
    (2) Taxpayment not by electronic fund transfer. In the case of taxes 
not required to be remitted by electronic fund transfer as prescribed by 
Sec. 40.357, the second semimonthly period of September shall be divided 
into two payment periods, from the 16th day through the 25th day, and 
the 26th day through the 30th day. The manufacturer shall file a return 
on Form 5000.24, and remittance, for the period September 16-25, no 
later than September 28. The manufacturer shall file a return on Form 
5000.24, and make remittance, for the period September 26-30, no later 
than October 14.
    (3) Amount of payment: Safe harbor rule. (i) Taxpayers are 
considered to have met the requirements of paragraph (g)(1) of this 
section, if the amount paid no later than September 29 is not less than 
\11/15\ (73.3 percent) of the tax liability incurred for the semimonthly 
period beginning on September 1 and ending on September 15, and if any 
underpayment of tax is paid by October 14.
    (ii) Taxpayers are considered to have met the requirements of 
paragraph (g)(2) of this section, if the amount paid no later than 
September 28 is not less than two-thirds (66.7 percent) of the tax 
liability incurred for the semimonthly period beginning on September 1 
and ending on September 15, and if any underpayment of tax is paid by 
October 14.
    (4) Last day for payment. If the required due date for taxpayment 
for the periods September 16-25 or September 16-26, as applicable, falls 
on a Saturday, the return and remittance shall be due on the immediately 
preceding day. If the required due date falls on a Sunday, the return 
and remittance shall be due on the immediately following day.

(Approved by the Office of Management and Budget under Control Number 
1512-0467)



Sec. 40.356  Adjustments in the return of manufacturer.

    Adjustments may be made in Schedules A and B of the manufacturer's 
semimonthly tax return, ATF Form 5000.24, as provided in this section. 
Schedule A of the return will be used where an unintentional error in a 
previous return resulted in an underpayment of tax. Schedule B of the 
return will be used where an unintentional error in a previous return 
resulted in an overpayment of tax, or where notice has been received 
from the regional director (compliance) that a claim for allowance of 
tax has been

[[Page 769]]

approved. In the case of an overpayment, the manufacturer shall have the 
option of filing a claim on ATF Form 2635 (5620.8) for refund or taking 
credit in Schedule B of the return, both subject to the period of 
limitations prescribed in 26 U.S.C. 6511. Any adjustment made in a 
return must be fully explained in the appropriate schedule or in a 
statement attached to and made a part of the return in which such 
adjustment is made.

(72 Stat. 1417, 68A Stat. 791; 26 U.S.C. 5703, 6402)



Sec. 40.357  Payment of tax by electronic fund transfer.

    (a) General. (1) Each taxpayer who was liable, during a calendar 
year, for a gross amount equal to or exceeding five millions dollars in 
taxes on tobacco products, cigarette papers, and cigarette tubes 
combining tax liabilities incurred under this part and part 275 of this 
chapter, shall use a commercial bank in making payment by electronic 
fund transfer (EFT) of taxes on tobacco products, cigarette papers, and 
cigarette tubes during the succeeding calendar year. Payment of taxes on 
tobacco products, cigarette papers, and cigarette tubes in any other 
form of remittance, as authorized in Sec. 40.355, is not authorized for 
a taxpayer who is required, by this section, to make remittances by EFT. 
For purposes of this section, the dollar amount of tax liability is 
defined as the gross tax liability on all taxable withdrawals and 
importations (including tobacco products, cigarette papers, and 
cigarette tubes brought into the United States from Puerto Rico or the 
Virgin Islands) during the calendar year, without regard to any 
drawbacks, credits, or refunds, for all premises from which such 
activities are conducted by the taxpayer. Overpayments are not taken 
into account in summarizing the gross tax liability.
    (2) For the purposes of this section, a taxpayer includes a 
controlled group of corporations, as defined in 26 U.S.C. 1563, and 
implementing regulations in 26 CFR Secs. 1.563-1 through 1.1563-4. Also, 
the rules for a ``controlled group of corporations'' apply in a similar 
fashion to groups which include partnerships and/or sole 
proprietorships. If one entity maintains more than 50% control over a 
group consisting of corporations and one, or more, partnerships and/or 
sole proprietorships, all of the members of the controlled group are one 
taxpayer for the purpose of determining who is required to make 
remittances by EFT.
    (3) A taxpayer who is required by this section to make remittances 
by EFT shall make a separate EFT remittance and file a separate return, 
ATF Form 5000.24, for each factory from which cigarette papers or 
cigarette tubes are withdrawn upon determination of tax.
    (b) Requirements. (1) On or before January 10 of each calendar year, 
except for a taxpayer already remitting the tax by EFT, each taxpayer 
who was liable for a gross amount equal to or exceeding five million 
dollars in taxes on tobacco products, cigarette papers, and cigarette 
tubes combining tax liabilities incurred under this part and part 275 of 
this chapter during the previous calendar year, shall notify, in 
writing, the regional director (compliance), for each region in which 
taxes are paid. The notice shall be an agreement to make remittances by 
EFT.
    (2) For each return filed in accordance with this part, the taxpayer 
shall direct the taxpayer's bank to make an electronic fund transfer in 
the amount of the taxpayment to the Department of the Treasury's General 
Account or the Federal Reserve Bank of New York as provided in paragraph 
(e) of this section. The request shall be made to the bank early enough 
for the transfer to be made to the Treasury Account by no later than the 
close of business on the last day for filing the return, prescribed in 
Sec. 40.355. The request shall take into account any time limit 
established by the bank.
    (3) If a taxpayer was liable for less than five million dollars in 
taxes on tobacco products, cigarette papers, and cigarette tubes 
combining tax liabilities incurred under this part and part 275 of this 
chapter during the preceding calendar year, the taxpayer may choose 
either to continue remitting the tax as provided in this section or to 
remit the tax with the return as prescribed by Sec. 40.355. Upon filing 
the first return on which the taxpayer chooses to discontinue remitting 
the tax by

[[Page 770]]

EFT and to begin remitting the tax with the tax return, the taxpayer 
shall notify the regional director (compliance) by attaching a written 
notification to ATF Form 5000.24, stating that no taxes are due by EFT, 
because the tax liability during the preceding calendar year was less 
than five million dollars, and that the remittance shall be filed with 
the tax return.
    (c) Remittance. (1) Each taxpayer shall show on the return, ATF Form 
5000.24, information about remitting the tax for that return period by 
EFT and shall file the return with ATF, in accordance with the 
instructions of ATF Form 5000.24.
    (2) Remittances shall be considered as made when the taxpayment by 
EFT is received by the Treasury Account. For purposes of this section, a 
taxpayment by EFT shall be considered as received by the Treasury 
Account when it is paid to a Federal Reserve Bank.
    (3) When the taxpayer directs the bank to effect an EFT message as 
required by paragraph (b)(2) of this section, any transfer data record 
furnished to the taxpayer, through normal banking procedures, will serve 
as the record of payment, and shall be retained as part of required 
records.
    (d) Failure to make a taxpayment by EFT. The taxpayer is subject to 
a penalty imposed by 26 U.S.C. 5761, 6651, or 6656, as applicable, for 
failure to make a taxpayment by EFT on or before the close of business 
on the prescribed last day for filing.
    (e) Procedure. Upon the notification required under paragraph (b)(1) 
of this section, the regional director (compliance) will issue to the 
taxpayer an AFT Procedure entitled Payment of Tax by Electronic Fund 
Transfer. This publication outlines the procedure a taxpayer is to 
follow when preparing returns and EFT remittances in accordance with 
this part. The U.S. Customs Service will provide the taxpayer with 
instructions for preparing EFT remittances for payments to be made to 
the U.S. Customs Service.

(Approved by the Office of Management and Budget under control number 
1512-0457)

(Act of August 16, 1954, 68A Stat. 775, as amended (26 U.S.C. 6302); 
sec. 202, Pub. L. 85-859, 72 Stat. 1417, as amended (26 U.S.C. 5703))



Sec. 40.358  Assessment.

    Whenever any person required by law to pay tax on cigarette papers 
and tubes fails to pay such tax, the tax shall be ascertained and 
assessed against such person, subject to the limitations prescribed in 
26 U.S.C. 6501. The tax so assessed shall be in addition to the 
penalties imposed by law for failure to pay such tax when required. 
Except in cases where delay may jeopardize collection of the tax, or 
where the amount is nominal or the result of an evident mathematical 
error, no such assessment shall be made until and after notice has been 
afforded such person to show cause against assessment. The person will 
be allowed 45 days from the date of such notice to show cause, in 
writing, against such assessment.

(72 Stat. 1417; 26 U.S.C. 5703)



Sec. 40.359  Employer identification number.

    The employer identification number (EIN) (defined at 26 CFR 
301.7701-12) of a manufacturer of cigarette papers and/or tubes who has 
been assigned such a number shall be shown on each semimonthly tax 
return, ATF Form 5000.24, and special tax return (including amended 
returns), ATF Form 5630.5, filed under this subpart. Failure of the 
taxpayer to include the EIN on ATF Form 5000.24 may result in assertion 
and collection of the penalty specified in Sec. 70.113 of this chapter. 
Failure of the taxpayer to include the EIN on ATF Form 5630.5 may result 
in the imposition of the penalty specified in 27 CFR 70.113 of this 
chapter.

(75 Stat. 828; 26 U.S.C. 6109, 6676)



Sec. 40.360  Application for employer identification number.

    Each manufacturer of cigarette papers and tubes who has neither 
secured an EIN nor made application therefor shall file an application 
on IRS Form SS-4. IRS Form SS-4 may be obtained from any service center 
director or from any district director. Such application shall be filed 
on or before the seventh day after the date on which any tax return 
under this subpart is filed. Each manufacturer shall make application 
for and shall be assigned

[[Page 771]]

only one EIN for all internal revenue purposes.

(75 Stat. 828; 26 U.S.C. 6109)



Sec. 40.361  Execution and filing of Form SS-4.

    The application on IRS form SS-4, together with any supplementary 
statement, shall be prepared in accordance with the applicable form, 
instructions, and regulations, and the data called for shall be set 
forth fully and clearly. The application shall be filed with the service 
center director serving the internal revenue district where the 
applicant is required to file returns under this subpart, except that 
hand-carried applications may be filed with the district director of any 
such district as provided for in 26 CFR Sec. 301.6091-1. The application 
shall be signed by:
    (a) The individual if the person is an individual;
    (b) The president, vice president, or other principal officer if the 
person is a corporation;
    (c) A responsible and duly authorized member or officer having 
knowledge of its affairs if the person is a partnership or other 
unincorporated organization; or
    (d) The fiduciary if the person is a trust or estate.

(75 Stat. 828; 26 U.S.C. 6109)

                      Special (Occupational) Taxes



Sec. 40.371  Liability for special tax.

    (a) Manufacturer of cigarette papers and tubes. Every manufacturer 
of cigarette papers and tubes shall pay a special (occupational) tax at 
a rate specified by Sec. 40.372 of this part. The tax shall be paid on 
or before July 1. On commencing business, the tax shall be computed from 
the first day of the month in which liability is incurred, through the 
following June 30. Thereafter, the tax shall be computed for the entire 
year (July 1 through June 30).
    (b) Each place of business taxable. A manufacturer of cigarette 
papers and tubes incurs special tax liability at each place of business 
in which an occupation subject to special tax is conducted. A place of 
business means the entire office, plant or area of the business in any 
one location under the same proprietorship. Passageways, streets, 
highways, rail crossings, waterways, or partitions dividing the premises 
are not sufficient separation to require additional special tax, if the 
divisions of the premises are otherwise contiguous.

(26 U.S.C. 5143, 5731)



Sec. 40.372  Rate of special tax.

    (a) General. Title 26 U.S.C. 5731(a)(2) imposes a special tax of 
$1,000 per year on every manufacturer of cigarette papers and tubes.
    (b) Reduced rate for small proprietors. Title 26 U.S.C. 5731(b) 
provides for a reduced rate of $500 per year with respect to any 
manufacturer of cigarette papers and tubes whose gross receipts (for the 
most recent taxable year ending before the first day of the taxable 
period to which the special tax imposed by Sec. 40.371 relates) are less 
than $500,000. The ``taxable year'' to be used for determining gross 
receipts is the taxpayer's income tax year. All gross receipts of the 
taxpayer shall be included, not just the gross receipts of the business 
subject to special tax. Proprietors of new businesses that have not yet 
begun a taxable year, as well as proprietors of existing businesses that 
have not yet ended a taxable year, who commence a new activity subject 
to special tax, qualify for the reduced special (occupational) tax rate, 
unless the business is a member of a ``controlled group''; in that case 
the rules of paragraph (c) of this section shall apply.
    (c) Controlled group. All persons treated as one taxpayer under 26 
U.S.C. 5061(e)(3) shall be treated as one taxpayer for the purpose of 
determining gross receipts under paragraph (b) of this section. 
``Controlled group'' means a controlled group of corporations, as 
defined in 26 U.S.C. 1563 and implementing regulations in 26 CFR 1.1563-
1 through 1.1563-4. Also, the rules for a ``controlled group of 
corporations'' apply in a similar fashion to groups which include 
partnerships and/or sole proprietorships. If one entity maintains more 
than 50% control over a group consisting of corporations and one, or 
more, partnerships and/or sole proprietorships, all of the members of

[[Page 772]]

the controlled group are one taxpayer for the purpose of this section.
    (d) Short taxable year. Gross receipts for any taxable year of less 
than 12 months shall be annualized by multiplying the gross receipts for 
the short period by 12 and dividing the result by the number of months 
in the short period as required by 26 U.S.C. 448(c)(3).
    (e) Returns and allowances. Gross receipts for any taxable year 
shall be reduced by returns and allowances made during such year under 
26 U.S.C. 448(c)(3).

(26 U.S.C. 448, 5061, 5731)



Sec. 40.373  Special tax returns.

    (a) General. Special tax shall be paid by return. The prescribed 
return is ATF Form 5630.5, Special Tax Registration and Return. Special 
tax returns, with payment of tax, shall be filed with ATF in accordance 
with instructions on the form.
    (b) Preparation of ATF Form 5630.5. All of the information called 
for on ATF Form 5630.5 shall be provided including:
    (1) The true name of the taxpayer.
    (2) The trade name(s) (if any) of the business(es) subject to 
special tax.
    (3) The employer identification number (see Secs. 40.359-361).
    (4) The exact location of the place of business, by name and number 
of building or street, or if these do not exist, by some description in 
addition to the post office address. In the case of one return for two 
or more locations, the address to be shown shall be the taxpayer's 
principal place of business (or principal office, in the case of a 
corporate taxpayer).
    (5) The class(es) of special tax to which the taxpayer is subject.
    (6) Ownership and control information: That is, the name, position, 
and residence address of every owner of the business and of every person 
having power to control its management and policies with respect to the 
activity subject to special tax. ``Owner of the business'' shall include 
every partner, if the taxpayer is a partnership, and every person owning 
10% or more of its stock, if the taxpayer is a corporation. However, the 
ownership and control information required by this paragraph need not be 
stated if the same information has been previously provided to ATF in 
connection with a permit application, and if the information previously 
provided is still current.
    (c) Multiple locations and/or classes of tax.
    A taxpayer subject to special tax for the same period at more than 
one location or for more than one class of tax shall--
    (1) File one special tax return, ATF Form 5630.5, with payment of 
tax, to cover all such locations and classes of tax; and
    (2) Prepare, in duplicate, a list identified with the taxpayer's 
name, address (as shown on ATF Form 5630.5), employer identification 
number, and period covered by the return. The list shall show, by State, 
the name, address, and tax class of each location for which special tax 
is being paid. The original of the list shall be filed with ATF in 
accordance with instructions on the return, and the copy shall be 
retained at the taxpayer's principal place of business (or principal 
office, in the case of a corporate taxpayer) for the period specified in 
Sec. 40.371.
    (d) Signing of ATF Forms 5630.5--(1) Ordinary returns. The return of 
an individual proprietor shall be signed by the individual. The return 
of a partnership shall be signed by a general partner. The return of a 
corporation shall be signed by any officer. In each case, the person 
signing the return shall designate his or her capacity as ``individual 
owner,'' ``member of firm,'' or, in the case of a corporation, the title 
of the officer.
    (2) Fiduciaries. Receivers, trustees, assignees, executors, 
administrators, and other legal representatives who continue the 
business of a bankrupt, insolvent, deceased person, etc., shall indicate 
the fiduciary capacity in which they act.
    (3) Agent or attorney in fact. If a return is signed by an agent or 
attorney in fact, the signature shall be preceded by the name of the 
principal and followed by the title of the agent or attorney in fact. A 
return signed by a person as agent will not be accepted unless there is 
filed, with the ATF office with which the return is required to be 
filed, a power of attorney authorizing the agent to perform the act.

[[Page 773]]

    (4) Perjury statement. ATF Forms 5630.5 shall contain or be verified 
by a written declaration that the return has been executed under the 
penalties of perjury.



Sec. 40.374  Issuance, distribution, and examination of special tax stamps.

    (a) Issuance of special tax stamps. Upon filing a properly executed 
return on ATF Form 5630.5 together with the full remittance, the 
taxpayer will be issued an appropriately designated special tax stamp. 
If the return covers multiple locations, the taxpayer will be issued one 
appropriately designated stamp for each location listed on the 
attachment required by Sec. 40.373(c)(2), but showing, as to name and 
address, only the name of the taxpayer and the address of the taxpayer's 
principal place of business (or principal office in the case of a 
corporate taxpayer).
    (b) Distribution of special tax stamps for multiple locations. On 
receipt of the special tax stamps, the taxpayer shall verify that there 
is one stamp for each location listed on the attachment to ATF Form 
5630.5. The taxpayer shall designate one stamp for each location and 
type on each stamp the address of the business conducted at the location 
for which that stamp is designated. The taxpayer shall then forward each 
stamp to the place of business designated on the stamp.
    (c) Examination of special tax stamps. All stamps denoting payment 
of special tax shall be kept available for inspection by ATF officers, 
at the location for which designated, during business hours.

(26 U.S.C. 5142, 5146, 6806)



Sec. 40.375  Changes in special tax stamps.

    (a) Change in name. If there is a change in the corporate or firm 
name, or in the trade name, as shown on ATF Form 5630.5, the 
manufacturer shall file an amended special tax return as soon as 
practicable after the change, covering the new corporate or firm name, 
or trade names. No new special tax is required to be paid. The 
manufacturer shall attach the special tax stamp for endorsement of the 
change in name.
    (b) Change in proprietorship.--(1) General. If there is a change in 
the proprietorship of a cigarette papers and tubes factory, the 
successor shall pay a new special tax and obtain the required special 
tax stamps.
    (2) Exemption for certain successors. Persons having the right of 
succession provided for in paragraph (c) of this section may carry on 
the business for the remainder of the period for which the special tax 
was paid, without paying a new special tax, if within 30 days after the 
date on which the successor begins to carry on the business, the 
successor files a special tax return on ATF Form 5630.5 with ATF, which 
shows the basis of succession. A person who is a successor to a business 
for which special tax has been paid and who fails to register the 
succession is liable for special tax computed from the first day of the 
calendar month in which the successor began to carry on the business.
    (c) Persons having right of succession. Under the conditions 
indicated in paragraph (b)(2) of this section, the right of succession 
will pass to certain persons in the following cases:
    (1) Death. The spouse or child, or executor, administrator, or other 
legal representative of the taxpayer;
    (2) Succession of spouse. A husband or wife succeeding to the 
business of his or her spouse (living);
    (3) Insolvency. A receiver or trustee in bankruptcy, or an assignee 
for benefit of creditors;
    (4) Withdrawal from firm. The partner or partners remaining after 
death or withdrawal of a member.
    (d) Change in location. If there is a change in location of a 
taxable place of business, the manufacturer shall within 30 days after 
the change, file with ATF an amended special tax return covering the new 
location. The manufacturer shall attach the special tax stamp or stamps 
for endorsement of the change in location. No new special tax is 
required to be paid. However, if the manufacturer does not file the 
amended return within 30 days, the manufacturer is required to pay a new 
special tax and obtain a new special tax stamp.

(26 U.S.C. 5143, 7011)

[[Page 774]]

                                 General



Sec. 40.382  Authority of ATF officers to enter premises.

    Any ATF officer may enter in the daytime any premises where 
cigarette papers and tubes are produced or kept, so far as it may be 
necessary for the purpose of examining such articles. When such premises 
are open at night, any ATF officer may enter them, while so open, in the 
performance of his or her official duties. The owner of such premises, 
or person having the superintendence of the same, who refuses to admit 
any ATF officer or permit any AFT officer to examine such cigarette 
papers and tubes shall be liable to the penalties prescribed by law for 
the offense.

(68A Stat. 872; 903 26 U.S.C. 7342, 7606)



Sec. 40.383  Interference with administration.

    Whoever, corruptly or by force or threats of force, endeavors to 
hinder or obstruct the administration of this subpart, or endeavors to 
intimidate or impede any ATF officer acting in an official capacity, or 
forcibly rescues or attempts to rescue or causes to be rescued any 
property, after it has been duly seized for forfeiture to the United 
States in connection with a violation or intended violation of this 
subpart, shall be liable to the penalties prescribed by law.

(68A Stat. 855; 26 U.S.C. 7212)



Sec. 40.384  Disposal of forfeited, condemned, and abandoned cigarette papers and tubes.

    Forfeited, condemned, or abandoned cigarette papers or tubes in the 
custody of a Federal, State, or local officer upon which the Federal tax 
has not been paid shall not be sold or caused to be sold for consumption 
in the United States if, in the opinion of the officer, the sale of such 
papers and tubes will not bring a price equal to the tax due and 
payable, and the expenses incident to the sale. Where the cigarette 
papers or tubes are not sold the officer may deliver them to a Federal 
or State institution (if they are fit for consumption) or cause their 
destruction by burning completely or by rendering them unfit for 
consumption. Where such papers or tubes are sold, release by the officer 
having custody shall be made only after such papers and tubes are 
properly packaged and taxpaid. A receipt from the regional director 
(compliance) evidencing payment of tax on such papers or tubes shall be 
presented to the officer having custody of the articles, which tax shall 
be considered part of the sales price. Where cigarette papers or tubes 
which have been packaged under the provisions of part 45 of this chapter 
are to be released after payment of tax, the purchaser shall 
appropriately mark each package ``Federal Tax Paid (date)'' before the 
officer having custody of the papers or tubes releases them. However, 
the articles may be released without such marking of the packages if the 
purchaser is a qualified manufacturer of cigarette papers and tubes and 
does not intend to place such papers or tubes on the domestic market for 
taxable articles but will otherwise dispose of them. A written statement 
of notification of disposal by destruction or return to bond through 
claim for refund, shall be filed, in original only, with the officer 
having custody of the articles. In the case of cigarette papers and 
tubes forfeited under the internal revenue laws, the sale shall be 
subject to the provisions of part 72 of this chapter.

(68A Stat. 870, as amended, 72 Stat. 1425, as amended; 26 U.S.C. 7325, 
5753)

[26 FR 8174, Aug. 31, 1961. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and further redesignated at 54 FR 48839, Nov. 27, 1989, and further 
redesignated by T.D. ATF-460, 66 FR 39093, July 27, 2001, as amended by 
T.D. ATF-469, 66 FR 56758, Nov. 13, 2001]



Sec. 40.385  Alternate methods or procedures.

    A manufacturer of cigarette papers and tubes, on specific approval 
by the Director as provided in this section, may use an alternate method 
or procedure in lieu of a method or procedure specifically prescribed in 
this subpart. The Director may approve an alternate method or procedure, 
subject to stated conditions, when the Director finds that--

[[Page 775]]

    (a) Good cause has been shown for the use of the alternate method or 
procedure,
    (b) The alternate method or procedure is within the purpose of, and 
consistent with the effect intended by, the specifically prescribed 
method or procedure, and affords equivalent security to the revenue, and
    (c) The alternate method or procedure will not be contrary to any 
provision of law, and will not result in an increase in cost to the 
Government or hinder the effective administration of this subpart.
    No alternate method or procedure relating to the giving of any bond 
or to the assessment, payment, or collection of tax, shall be authorized 
under this section. A manufacturer who desires to employ an alternate 
method or procedure shall submit a written application, in triplicate, 
to the regional director (compliance) for transmittal to the Director. 
The application shall specifically describe the proposed alternate 
method or procedure, and shall set forth the reasons therefor. Alternate 
methods or procedures shall not be employed until the application has 
been approved by the Director. The manufacturer shall, during the period 
of authorization of an alternate method or procedure, comply with the 
terms of the approved application. Authorization for any alternate 
method or procedure may be withdrawn whenever, in the judgment of the 
Director, the revenue is jeopardized or the effective administration of 
this part is hindered. Any authorization of the Director under this 
section shall be retained as part of the manufacturer's record in 
accordance with this subpart.



Sec. 40.386  Emergency variations from requirements.

    The Director may approve methods of operation other than as 
specified in this subpart, where it is determined that an emergency 
exists and the proposed variations from the specified requirements are 
necessary, and the proposed variations--
    (a) Will afford the security and protection to the revenue intended 
by the prescribed specifications;
    (b) Will not hinder the effective administration of this subpart; 
and
    (c) Will not be contrary to any provision of law. Variations from 
requirements granted under this section are conditioned on compliance 
with the procedures, conditions, and limitations set forth in the 
approval of the application. Failure to comply in good faith with such 
procedures, conditions and limitations shall automatically terminate the 
authority for such variations and the manufacturer thereupon shall fully 
comply with the prescribed requirements of regulations from which the 
variations were authorized. Authority for any variation may be withdrawn 
whenever in the judgment of the Director the revenue is jeopardized or 
the effective administration of this subpart is hindered by the 
continuation of such variation. Where a manufacturer desires to employ 
such variation, the manufacturer shall submit a written application to 
do so (in triplicate) to the regional director (compliance) for 
transmittal to the Director. The application shall describe the proposed 
variations and set forth the reasons therefor. Variations shall not be 
employed until the application has been approved. In accordance with 
this subpart, any authorization of the Director under this section shall 
be retained as part of the manufacturer's records.



Sec. 40.387  Penalties and forfeitures.

    Anyone who fails to comply with the provisions of this subpart 
becomes liable to the civil and criminal penalties, and forfeitures, 
provided by law.

(72 Stat. 1425, 1426; 26 U.S.C. 5761, 5762, 5763)

              Qualification Requirements for Manufacturers

                         Original Qualifications



Sec. 40.391  Persons required to qualify.

    Every person who manufactures cigarette paper, or makes up cigarette 
paper into tubes, except for his own personal use or consumption, must 
first qualify as a manufacturer of cigarette papers and tubes in 
accordance with the provisions of this subpart.

[ATF-467, 66 FR 49532, Sept. 28, 2001]

[[Page 776]]



Sec. 40.392  Bond.

    Every person, before commencing business as a manufacturer of 
cigarette papers and tubes, shall file a bond on ATF Form 2102 (5210.1). 
Such bond shall be filed in accordance with the applicable provisions of 
subpart G of this part and conditioned upon compliance with the 
provisions of 26 U.S.C. Chapter 52, and regulations thereunder, 
including, but not limited to, the timely payment of taxes imposed by 
such chapter and penalties and interest in connection therewith for 
which the manufacturer may become liable to the United States.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 40.393  Power of attorney.

    If the bond or any other document required under this part is signed 
by an attorney in fact for an individual, partnership, association, 
company, or corporation, by one of the partners for a partnership, or by 
one of the members of an association, a power of attorney on ATF Form 
1534 (5000.8) shall be furnished to the regional director (compliance). 
If such bond or other document is signed on behalf of a corporation by 
an officer thereof, it must be supported by duly authenticated extracts 
of the stockholders' meeting, by-laws, or directors' meeting authorizing 
such officer to execute such document for the corporation. ATF Form 
5000.8 or support of authority does not have to be filed again with a 
regional director (compliance) where such form or support has previously 
been submitted to that regional director (compliance) and is still in 
effect.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 40.394  Notice of approval of bond.

    If the bond required under this subpart is approved by the regional 
director (compliance), a number will be assigned to the factory of the 
manufacturer of cigarette papers and tubes for internal revenue 
purposes. The regional director (compliance) will immediately notify the 
manufacturer, in writing, of the bond approval, in order that the 
manufacturer may commence operations.

(72 Stat. 1421; 26 U.S.C. 5711)

                  Changes after Original Qualifications



Sec. 40.395  Change in name.

    Where there is a change in the individual, trade, or corporate name 
of a manufacturer of cigarette papers and tubes, the manufacturer shall, 
within 30 days of the change, furnish the regional director (compliance) 
a written notice of such change.

(72 Stat. 1422; 26 U.S.C. 5722)



Sec. 40.396  Change in proprietorship.

    Where there is to be any change in proprietorship (including a 
change in the identity of the members of a partnership or association, 
but excluding any change in stock ownership in a corporation) of the 
business of a manufacturer of cigarette papers and tubes, the proposed 
successor shall, before commencing operations, qualify as a manufacturer 
of cigarette papers and tubes, in accordance with this part. If such 
manufacturer promptly files the required documentation with the regional 
director (compliance), an administrator, executor, receiver, trustee, 
assignee, or other fiduciary successor may liquidate the business 
without qualifying as a manufacturer. The manufacturer must promptly 
file with the regional director (compliance) a statement of the intent 
to liquidate and furnish a certified copy of the order of the court, or 
other pertinent documents. These documents must show the appointment and 
qualification of any administrator, executor, receiver, trustee, 
assignee, or other fiduciary, together with an extension of coverage of 
the predecessor's bond executed by the administrator, executor, 
receiver, trustee, assignee, or other fiduciary and the surety, in 
accordance with the provisions of Sec. 40.407. The predecessor shall 
make a closing inventory and closing report in accordance with the 
provisions of Secs. 40.434 and 40.426, respectively, and the successor 
shall make an opening inventory and opening report, in accordance with 
the provision of Secs. 40.432 and 40.423, respectively.

(72 Stat. 1421, 1422; 26 U.S.C. 5711, 5721, and 5722)

[[Page 777]]



Sec. 40.397  Change in location.

    Whenever a manufacturer of cigarette papers and tubes contemplates a 
change in location of a factory within the same region, the manufacturer 
shall, before commencing operations at the new location, file an 
extension of coverage of bond in accordance with the provisions of 
Sec. 40.407. Whenever a manufacturer of cigarette papers and tubes 
contemplates changing the location of a factory to another region, the 
manufacturer shall, before commencing operations at the new location, 
qualify as a manufacturer in the new region, in accordance with the 
applicable provisions of this subpart, and make a closing inventory and 
closing report, in accordance with the provisions of Secs. 40.434 and 
40.426, respectively.

(72 Stat. 1421, 1422; 26 U.S.C. 5711, 5721, and 5722)

                Bonds and Extensions of Coverage of Bonds



Sec. 40.401  Corporate surety.

    (a) Surety bonds required by this subpart may be given only with 
corporate sureties holding certificates of authority from, and subject 
to any limitations prescribed by the Secretary of the Treasury as set 
forth in the current revision of Treasury Department Circular No. 570 
(Companies Holding Certificates of Authority as Acceptable Sureties on 
Federal Bonds and as Acceptable Reinsuring Companies). The surety shall 
have no interest whatever in the business covered by the bond.
    (b) Each bond and each extension of coverage of bond shall at the 
time of filing be accompanied by a power of attorney authorizing the 
agent or officer who executed the bond to so act on behalf of the 
surety. The regional director (compliance) who is authorized to approve 
the bond may, whenever deemed necessary, require additional evidence of 
the authority of the agent or officer to execute the bond or extension 
of coverage of bond. The power of attorney shall be prepared on a form 
provided by the surety company and executed under the corporate seal of 
the company. If the power of attorney submitted is other than a manually 
signed document, it shall be accompanied by a certificate of its 
validity.
    (c) Treasury Department Circular No. 570 is published in the Federal 
Register annually as of the first workday in July. As they occur, 
interim revisions of the circular are published in the Federal Register. 
Copies may be obtained from the Surety Bond Branch, Financial Management 
Service, Department of the Treasury, Washington, D.C. 20220.

(July 30, 1947, ch. 390, 61 Stat. 648, as amended (31 U.S.C. 9304, 
9306); sec. 202. Pub. L. 85-859, 72 Stat. 1421, as amended (26 U.S.C. 
5711))



Sec. 40.402  Two or more corporate sureties.

    A bond executed by two or more corporate sureties shall be the joint 
and several liability of the principal and the sureties. However, each 
corporate surety may limit its liability in terms upon the face of the 
bond in a definite, specific amount, which amount shall not exceed the 
limitations prescribed for such corporate surety by the Secretary, as 
set forth in the current revision of Treasury Department Circular 570 
(Companies Holding Certificates of Authority as Acceptable Sureties on 
Federal Bonds and as Acceptable Reinsuring Companies). (See 
Sec. 40.401(c)) When the sureties so limit their liability, the 
aggregate of such limited liabilities must equal the required amount of 
the bond.

(July 30, 1947, ch. 390, 61 Stat. 648, as amended (31 U.S.C. 9304, 
9306); sec. 202. Pub. L. 85-859, 72 Stat. 1421, as amended (26 U.S.C. 
5711))



Sec. 40.403  Deposit of securities in lieu of corporate surety.

    In lieu of corporate surety, the manufacturer of cigarette papers 
and tubes may pledge and deposit, as security for the bond, securities 
which are transferable and are guaranteed as to both interest and 
principal by the United States, in accordance with the provisions of 31 
CFR Part 225--Acceptance of Bonds, Notes or Other Obligations Issued or 
Guaranteed by the United States as Security in Lieu of Surety or 
Sureties on Penal Bonds.

(61 Stat. 650, 72 Stat. 1421, 31 U.S.C. 9301, 9303, 26 U.S.C. 5711, 5 
U.S.C. 552(a) (80 Stat. 383, as amended))

[[Page 778]]



Sec. 40.404  Amount of bond.

    The amount of the bond of a manufacturer of cigarette papers and 
tubes shall be not less than the maximum amount of the tax liability on 
the cigarette papers and tubes manufactured in the factory, received 
without payment of tax from other factories, and released without 
payment of tax from customs custody as provided in Sec. 40.452, during 
any month. In the case of a manufacturer commencing business, the 
production, receipts from other factories, and releases from customs 
custody, without payment of tax, shall be estimated for the purpose of 
this section. The amount of any such bond (or the total amount where 
strengthening bonds are filed) shall not exceed $20,000, nor be less 
than $1,000.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 40.405  Strengthening bond.

    Where the regional director (compliance) determines that the amount 
of the bond, under which a manufacturer of cigarette papers and tubes is 
currently carrying on such business, no longer adequately protects the 
revenue, the regional director (compliance) may require the manufacturer 
to file a strengthening bond in an appropriate amount with the same 
surety as that on the bond already in effect, in lieu of a superseding 
bond to cover the full liability on the basis of Sec. 40.404. The 
regional director (compliance) shall refuse to approve any strengthening 
bond where any notation is made thereon which is intended or which may 
be construed as a release of any former bond, or as limiting the amount 
of either bond to less than its full amount.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 40.406  Superseding bond.

    A manufacturer of cigarette papers and tubes shall file a new bond 
to supersede the current bond immediately when:
    (a) The corporate surety on the current bond becomes insolvent,
    (b) The regional director (compliance) approves a request from the 
surety of the current bond to terminate liability under the bond,
    (c) Payment of any liability under a bond is made by the surety 
thereon, or
    (d) The regional director (compliance) considers such a superseding 
bond necessary for the protection of the revenue.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 40.407  Extension of coverage of bond.

    An extension of the coverage of bond filed under this subpart shall 
be manifested on ATF Form 2105 (5000.7), Extension of Coverage of Bond, 
by the manufacturer of cigarette papers and tubes and by the surety on 
the bond with the same formality and proof of authority as required for 
the execution of the bond.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 40.408  Approval of bond and extension of coverage of bond.

    No person shall commence operations under any bond, nor extend 
operations, until such person receives from the regional director 
(compliance) notice of approval of the bond or an appropriate extension 
of coverage of the bond required under this subpart. Upon receipt of an 
approved bond or extension of coverage of bond from the regional 
director (compliance), such bond or extension of coverage of bond shall 
be retained by the manufacturer of cigarette papers and tubes in factory 
and shall be made available for inspection by any ATF officer upon 
request.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 40.409  Termination of liability of surety under bond.

    The liability of a surety on any bond required by this subpart shall 
be terminated only as to operations on and after the effective date of a 
superseding bond, or the date of approval of the discontinuance of 
operations by the manufacturer of cigarette papers and tubes, or 
otherwise in accordance with the termination provisions of the bond. The 
surety shall remain bound in respect of any liability for unpaid taxes, 
penalties and interest, not in excess of the amount of the bond, 
incurred by the manufacturer while the bond is in force.

(72 Stat. 1421; 26 U.S.C. 5711)

[[Page 779]]



Sec. 40.410  Release of pledged securities.

    Securities of the United States pledged and deposited as provided in 
Sec. 40.403 shall be released only in accordance with the provisions of 
31 CFR part 225. Such securities will not be released by the regional 
director (compliance) until liability under the bond for which they were 
pledged has been terminated. When the regional director (compliance) is 
satisfied that they may be released, the regional director (compliance) 
shall fix the date or dates on which a part or all of such securities 
may be released. At any time prior to the release of such securities, 
the regional director (compliance) may extend the date of release for 
such additional length of time as is deemed necessary.

(61 Stat. 650, 72 Stat. 1421; 31 U.S.C. 9301, 9303; 26 U.S.C. 5711)

                       Operations By Manufacturers

                                 Records



Sec. 40.421  General.

    (a) Every manufacturer of cigarette papers and tubes must keep 
records of daily operations and transactions. Records maintained must 
reflect the date and number of cigarette papers and the date and number 
of cigarette tubes:
    (1) Manufactured;
    (2) Received, without payment of tax from another factory, an export 
warehouse, customs custody, or by withdrawal from the market;
    (3) Removed, subject to tax;
    (4) Removed, without payment of tax, for export purposes, use of the 
United States or transfer in bond pursuant to Sec. 40.451; or
    (5) Lost or destroyed.
    (b) The entries for each day in the records maintained or kept under 
this subpart must be made by the close of the business day following 
that on which the operations or transactions occur. No particular form 
of records is prescribed, but the information required must be readily 
ascertainable from the records kept.
    (c) Records maintained under this section prior to January 1, 2000, 
must reflect the date and number of books or sets of cigarette papers of 
each different numerical content and the date and number of cigarette 
tubes.


(26 U.S.C. 5741.)

[T.D. ATF-240, 64 FR 71941, Dec. 22, 1999]

                                 Reports



Sec. 40.422  General.

    Every manufacturer of cigarette papers and tubes must prepare a 
report on ATF Form 5230.3 in accordance with instructions for the form. 
The report must be prepared at the times specified in this subpart and 
must be prepared whether or not any operations or transactions occurred 
during the period covered by the report. The manufacturer must retain a 
copy of each report in accordance with the provisions of this subpart.
    (a) Reports for periods on or after January 1, 2000. Reports 
submitted must reflect the total number of cigarette papers and 
cigarette tubes manufactured, received and lost or destroyed.
    (b) Reports for periods prior to January 1, 2000. Reports submitted 
must reflect the number of books or sets of cigarette papers of each 
different numerical content and the number of cigarette tubes 
manufactured, received, removed and lost or destroyed.

(26 U.S.C. 5722)

[T.D. ATF-240, 64 FR 71942, Dec. 22, 1999]



Sec. 40.423  Opening.

    An opening report, covering the period from the date of the opening 
inventory to the end of the month, shall be made on or before the 10th 
day following the end of the month in which the business was commenced.

(72 Stat. 1422; 26 U.S.C. 5722)



Sec. 40.424  Monthly.

    A report for each calendar month shall be made on or before the 20th 
day of the next succeeding month.

(72 Stat. 1422; 26 U.S.C. 5722)



Sec. 40.425  Special.

    A special report, covering the unreported period to the day 
preceding the date of any special inventory required by an ATF officer, 
shall be made with

[[Page 780]]

such inventory. Another report, covering the period from the date of the 
special inventory to the end of the month, shall be made on or before 
the 14th day following the end of the month in which the inventory was 
made.

(72 Stat. 1422; 26 U.S.C. 5722)



Sec. 40.426  Closing.

    A closing report, covering the period from the first of the month to 
the date of the closing inventory, shall be made with such inventory.

(72 Stat. 1422; 26 U.S.C. 5722)

                               Inventories



Sec. 40.431  General.

    Every manufacturer of cigarette papers and tubes must provide a true 
and accurate inventory on ATF Form 5230.2 in accordance with 
instructions for the form. Such inventory is subject to verification by 
an ATF officer. The manufacturer must retain a copy of each inventory 
completed on ATF Form 5230.2 in accordance with this subpart.
    (a) Reports of inventory for periods on or after January 1, 2000. 
Reports of inventory submitted must reflect the total number of 
cigarette papers and cigarette tubes held at the times specified in the 
subpart.
    (b) Reports of inventory for periods prior to January 1, 2000. 
Reports of inventory submitted must reflect the number of books or sets 
of cigarette papers of each different numerical content and the number 
of cigarette tubes held at the times specified in this subpart.

(26 U.S.C. 5721)

[T.D. ATF-240, 64 FR 71942, Dec. 22, 1999]



Sec. 40.432  Opening.

    An opening inventory shall be made by the manufacturer of cigarette 
papers and tubes at the time of first commencing business.

(72 Stat. 1422; 26 U.S.C. 5721)



Sec. 40.433  Special.

    A special inventory shall be made by the manufacturer of cigarette 
papers and tubes when required by any ATF officer.

(72 Stat. 1422; 26 U.S.C. 5721)



Sec. 40.434  Closing.

    A closing inventory shall be made by the manufacturer of cigarette 
papers and tubes when a change in proprietorship occurs, or when the 
manufacturer changes location of the factory to another region, or 
concludes business. Where a change in proprietorship occurs, the closing 
inventory shall be made as of the day preceding the date of the opening 
inventory of the successor.

(72 Stat. 1422; 26 U.S.C. 5721)

                           Document Retention



Sec. 40.435  General.

    All records and reports required to be kept or maintained under this 
subpart, including copies of authorizations, inventories, reports, 
returns, and claims filed with verified supporting schedules, shall be 
retained by the manufacturer for three years following the close of the 
calendar year in which filed or made, or in the case of an 
authorization, for three years following the close of the calendar year 
in which the operation under such authorization is concluded. Such 
records shall be made available for inspection by any ATF officer upon 
request.

(72 Stat. 1423; 26 U.S.C. 5741)

                                Packages



Sec. 40.441  General.

    All cigarette papers and tubes shall, before removal subject to tax, 
be put up by the manufacturer in packages which shall be of such 
construction as will securely contain the papers or tubes therein. No 
package of cigarette papers or tubes shall have contained therein, 
attached thereto, or stamped, marked, written, or printed thereon:
    (a) Any certificate, coupon, or other device purporting to be or to 
represent a ticket, chance, share, or an interest in, or dependent on, 
the event of a lottery,
    (b) Any indecent or immoral picture, print, or representation, or

[[Page 781]]

    (c) Any statement or indication that United States tax has been 
paid.

(72 Stat. 1422; 26 U.S.C. 5723)

                        Miscellaneous Operations



Sec. 40.451  Transfer in bond.

    A manufacturer of cigarette papers and tubes may transfer such 
papers and tubes, under bond, without payment of tax, to the bonded 
premises of any manufacturer of cigarette papers and tubes, or to the 
bonded premises of a manufacturer of tobacco products solely for use in 
the manufacture of cigarettes. The transfer of cigarette papers and 
tubes, without payment of tax, to the bonded premises of an export 
warehouse proprietor shall be in accordance with the provisions of part 
44 of this chapter.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)



Sec. 40.452  Release from customs custody.

    Cigarette papers and tubes which were made in the United States, 
exported, and subsequently returned to the United States, may be removed 
from customs custody for transfer to the premises of a manufacturer 
without payment of the internal revenue tax, upon compliance with part 
275 of this chapter.

(72 Stat. 1418; 26 U.S.C. 5704)



Sec. 40.453  Use of the United States.

    A manufacturer of cigarette papers and tubes may remove cigarette 
papers and tubes covered under bond, without payment of tax, for use of 
the United States. Such removal shall be in accordance with the 
provisions of part 45 of this chapter.

(72 Stat. 1418; 26 U.S.C. 5704)

[26 FR 8174, Aug. 31, 1961. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and further redesignated at 54 FR 48839, Nov. 27, 1989, and further 
redesignated by T.D. ATF-460, 66 FR 39093, July 27, 2001, as amended by 
T.D. ATF-469, 66 FR 56758, Nov. 13, 2001]



Sec. 40.454  Removal for export purposes.

    The removal of cigarette papers and tubes, without payment of tax, 
for shipment to a foreign country, Puerto Rico, the Virgin Islands, or a 
possession of the United States, or for consumption beyond the 
jurisdiction of the internal revenue laws of the United States, shall be 
in accordance with the provisions of part 44 of this chapter.

(72 Stat. 1418; 26 U.S.C. 5704)

                  Permanent Discontinuance of Business



Sec. 40.461  Discontinuance of operations.

    Every manufacturer of cigarette papers and tubes who desires to 
discontinue operations and close out a factory shall dispose of all 
cigarette papers and tubes on hand, in accordance with this subpart, and 
make a closing inventory and closing report, in accordance with the 
provisions of Secs. 40.434 and 40.426, respectively.

(72 Stat. 1422; 26 U.S.C. 5721, 5722)

                         Claims By Manufacturers

                                 General



Sec. 40.471  Abatement.

    A claim for abatement of the unpaid portion of the assessment of any 
tax on cigarette papers and tubes, or any liability in respect thereof, 
may be allowed to the extent that such assessment is excessive in 
amount, is assessed after the expiration of the applicable period of 
limitation, or is erroneously or illegally assessed. Any claim under 
this section shall be prepared on ATF Form 2635 (5620.8), in duplicate, 
and shall set forth the particulars under which the claim is filed. The 
original of the claim, accompanied by such evidence as is necessary to 
establish to the satisfaction of the regional director (compliance) that 
the claim is valid, shall be filed with the regional director 
(compliance) for the region in which the tax or liability was assessed.

(68A Stat. 792, 6404)



Sec. 40.472  Allowance.

    Relief from the payment of tax on cigarette papers and tubes may be 
extended to a manufacturer by allowance of the tax where the cigarette 
papers and tubes, after removal from the factory upon determination of 
tax and prior to the payment of such tax, are lost (otherwise than by 
theft) or destroyed by fire, casualty, or act of God, while in the 
possession or ownership of

[[Page 782]]

the manufacturer who removed such articles, or are withdrawn by the 
manufacturer from the market. Any claim for allowance under this section 
shall be filed on ATF Form 2635 (5620.8) with the regional director 
(compliance) for the region in which the articles were removed, shall be 
executed under penalties and perjury and shall show the date the 
cigarette papers and tubes were removed from the factory. A claim 
relating to articles lost or destroyed shall be supported as prescribed 
in Sec. 40.475. In the case of a claim relating to cigarette papers or 
tubes withdrawn from the market the schedule prescribed in Sec. 40.476 
shall be filed with the regional director (compliance) for the region in 
which the articles are assembled. The manufacturer may not anticipate 
allowance of a claim by making the adjusting entry in a tax return 
pending consideration and action on the claim. Cigarette papers and 
tubes to which such a claim relates must be shown as removed on 
determination of tax in the return covering the period during which such 
articles were so removed. Upon action on the claim by the regional 
director (compliance) a copy of ATF Form 2635 (5620.8) will be returned 
to the manufacturer as notice of such action. This copy of ATF Form 2635 
(5620.8), with the copy of any verified supporting schedules, shall be 
retained by the manufacturer. When such notification of allowance of the 
claim or any part thereof is received prior to the time the return 
covering the tax on the cigarette papers or tubes to which the claim 
relates is to be filed, the manufacturer may make an adjusting entry and 
explanatory statement in that tax return. Where the notice of allowance 
is received after the filing of the return and taxpayment of the 
cigarette papers or tubes to which the claim relates, the manufacturer 
may make an adjusting entry and explanatory statement in the next tax 
return(s) to the extent necessary to take credit in the amount of the 
allowance.

(72 Stat. 1419, as amended, 26 U.S.C. 5705)



Sec. 40.473  Credit or refund.

    The taxes paid on cigarette papers and tubes may be credited or 
refunded (without interest) to a manufacturer on proof satisfactory to 
the regional director (compliance) that the claimant manufacturer paid 
the tax on cigarette papers and tubes lost (otherwise than by theft) or 
destroyed, by fire, casualty, or act of God, while in the possession or 
ownership of such manufacturer, or withdrawn by the manufacturer from 
the market. Any claim for credit or refund under this section shall be 
prepared on ATF Form 2635 (5620.8), in duplicate. Claims shall include a 
statement that the tax imposed on cigarette papers and tubes by 26 
U.S.C. 7652 or Chapter 52, was paid in respect to the cigarette papers 
or tubes covered by the claim, and that the articles were lost, 
destroyed, or withdrawn from the market within 6 months preceding the 
date the claim is filed. A claim for credit or refund relating to 
articles lost or destroyed shall be supported as prescribed in 
Sec. 40.475, and a claim relating to articles withdrawn from the market 
shall be accompanied by a schedule prepared and verified as prescribed 
in Secs. 40.476, and 40.477. The original and one copy of ATF Form 2635 
(5620.8), shall be filed with the regional director (compliance) for the 
region in which the tax was paid, or where the tax was paid in more than 
one region with the regional director (compliance) for any one of the 
regions in which the tax was paid. Upon action by the regional director 
(compliance) on a claim for credit, a copy of ATF Form 2635 (5620.8) 
will be returned to the manufacturer as notification of allowance or 
disallowance of the claim or any part thereof. This copy, with the copy 
of any verified supporting schedules, shall be retained by the 
manufacturer. When the manufacturer is notified of allowance of the 
claim for credit or any part thereof, the manufacturer shall make an 
adjusting entry and explanatory statement in the next tax return(s) to 
the extent necessary to take credit in the amount of the allowance. The 
manufacturer may not anticipate allowance of a claim by taking credit on 
a tax return prior to consideration and action on such claim. The 
duplicate of a claim for refund or credit, with a copy of any verified 
supporting schedules, shall be retained by the manufacturer.

(72 Stat. 1419, as amended, 26 U.S.C. 5705)

[[Page 783]]



Sec. 40.474  Remission.

    Remission of the tax liability on cigarette papers and tubes may be 
extended to the manufacturer liable for the tax where cigarette papers 
and tubes in bond are lost (other than by theft) or destroyed, by fire, 
casualty, or act of God, while in the possession or ownership of such 
manufacturer. Where cigarette papers and tubes are so lost or destroyed 
the manufacturer shall report promptly such fact, and the circumstances, 
to the regional director (compliance) for the region in which the 
factory is located. If the manufacturer wishes to be relieved of the tax 
liability, a claim on ATF Form 2635 (5620.8), in duplicate, shall also 
be prepared, setting forth the nature, date, place, and extent of the 
loss or destruction. The original and one copy of the claim, accompanied 
by such evidence as is necessary to establish to the satisfaction of the 
regional director (compliance) that the claim is valid, shall be filed 
with the regional director (compliance) for the region in which the 
factory is located. Upon action on the claim by the regional director 
(compliance), the copy of ATF Form 2635 (5620.8) will be returned to the 
manufacturer as notice of such action, which copy shall be retained by 
the manufacturer.

(72 Stat. 1419, as amended, 26 U.S.C. 5707)

                            Lost or Destroyed



Sec. 40.475  Action by claimant.

    Where cigarette papers and tubes are lost (other than by theft) or 
destroyed, by fire, casualty, or act of God, and the manufacturer 
desires to file claim under the provisions of Sec. 40.472 or 
Sec. 40.473, the manufacturer shall indicate on the claim the nature, 
date, and extent of such loss or destruction. The claim shall be 
accompanied by such evidence as necessary to establish to the 
satisfaction of the regional director (compliance) that the claim is 
valid.

(72 Stat. 1419; 26 U.S.C. 5705)

                       Withdrawn From the Market.



Sec. 40.476  Action by claimant.

    Where cigarette papers and tubes are withdrawn from the market and 
the manufacturer desires to file claim under the provisions of 
Sec. 40.472 or Sec. 40.473, the manufacturer shall assemble the articles 
in or adjacent to a factory if they are to be retained in or received 
into such factory, or at any suitable place if they are to be destroyed. 
The manufacturer shall group the articles according to the rate of tax 
applicable thereto, and shall prepare and submit a schedule of the 
articles, on ATF Form 5200.7 in accordance with the instructions, on the 
form. All copies of the schedule shall be forwarded to the regional 
director (compliance) for the region in which the articles are 
assembled.

(72 Stat. 1419; 26 U.S.C. 5705)

[T.D. ATF-384, 61 FR 54085, Oct. 17, 1996, as amended by T.D. ATF-424, 
64 FR 71932, Dec. 22, 1999]



Sec. 40.477  Action by regional director (compliance).

    Upon receipt of a schedule of cigarette papers and tubes withdrawn 
from the market, the regional director (compliance) may assign an ATF 
officer to verify the schedule and supervise disposition of the 
cigarette papers and tubes, or may authorize the manufacturer to dispose 
of the articles without supervision by so stating on the original and 
one copy of the schedule returned to the manufacturer.

(72 Stat. 1419; 26 U.S.C. 5705)



Sec. 40.478  Disposition of cigarette papers and tubes and schedule.

    When so authorized, as evidenced by the regional director's 
(compliance) statement on the schedule, the manufacturer shall dispose 
of the cigarette papers and tubes as specified in the schedule. After 
the articles are disposed of, the manufacturer shall execute a 
certificate on both copies of the schedule received from the regional 
director (compliance), to show the disposition and the date of 
disposition of the articles. In connection with a claim for credit or 
refund, the manufacturer shall attach the original of the schedule to 
the claim for credit or refund, ATF Form 2635 (5620.8), filed under 
Sec. 40.473. When an ATF officer is assigned to verify the schedule and 
supervise disposition of the cigarette papers

[[Page 784]]

and tubes, such officer shall, upon completion of the assignment, 
execute a certificate on all copies of the schedule to show the 
disposition and the date of disposition of the articles. In connection 
with a claim for allowance, the officer shall return one copy of the 
schedule to the manufacturer for the record, and in connection with a 
claim for credit or refund, the officer shall return the original and 
one copy of the schedule to the manufacturer, the original of which the 
manufacturer shall attach to the claim filed under Sec. 40.473.

(72 Stat. 1419, as amended; 26 U.S.C. 26 U.S.C. 5705)



PART 44--EXPORTATION OF TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES, WITHOUT PAYMENT OF TAX, OR WITH DRAWBACK OF TAX--Table of Contents




                     Subpart A--Scope of Regulations

Sec.
44.1  Exportation of tobacco products, and cigarette papers and tubes, 
          without payment of tax, or with drawback of tax.
44.2  Forms prescribed.

                         Subpart B--Definitions

44.11  Meaning of terms.

                Subpart Ba--Special (Occupational) Taxes

44.31  Liability for special tax.
44.32  Rate of special tax.
44.33  Special tax returns.
44.34  Employer identification number.
44.35  Issuance, distribution, and examination of special tax stamps.
44.36  Changes in special tax stamps.

                           Subpart C--General

44.61  Removals, withdrawals, and shipments authorized.
44.61a  Deliveries to foreign-trade zones--export status.
44.62  Restrictions on deliveries of tobacco products, and cigarette 
          papers and tubes to vessels and aircraft, as supplies.
44.63  Restrictions on disposal of tobacco products, and cigarette 
          papers and tubes on vessels and aircraft.
44.64  Responsibility for delivery or exportation of tobacco products, 
          and cigarette papers and tubes.
44.65  Liability for tax on tobacco products, and cigarette papers and 
          tubes.
44.66  Relief from liability for tax.
44.67  Payment of tax.
44.68  [Reserved]
44.69  Assessment.
44.70  Authority of ATF officers to enter premises.
44.71  Interference with administration.

                      Variations From Requirements

44.72  Alternate methods or procedures.
44.73  Emergency variations from requirements.

 Subpart D--Qualification Requirements for Export Warehouse Proprietors

44.81  Persons required to qualify.
44.82  Application for permit.
44.83  Corporate documents.
44.84  Articles of partnership or association.
44.85  Trade name certificate.
44.86  Bond.
44.87  Power of attorney.
44.88  Description and diagram of premises.
44.89  Separation of premises.
44.90  Restrictions relating to export warehouse premises.
44.91  Additional information.
44.92  Investigation of applicant.
44.93  Issuance of permit.

   Subpart E--Changes Subsequent to Original Qualification of Export 
                          Warehouse Proprietors

                             Changes in Name

44.101  Change in individual name.
44.102  Change in trade name.
44.103  Change in corporate name.

                    Changes in Ownership and Control

44.104  Fiduciary successor.
44.105  Transfer of ownership.
44.106  Change in officers or directors of a corporation.
44.107  Change in stockholders of a corporation.

                    Changes in Location and Premises

44.108  Change in location within same region.
44.109  Change in address.
44.110  Change in location to another region.
44.111  Change in export warehouse premises.
44.112  Emergency premises.

          Subpart F--Bonds and Extensions of Coverage of Bonds

44.121  Corporate surety.
44.122  Deposits of bonds, notes, or obligations in lieu of corporate 
          surety.
44.123  Amount of bond.
44.124  Strengthening bond.
44.125  Superseding bond.
44.126  Extension of coverage of bond.

[[Page 785]]

44.127  Approval of bond and extension of coverage of bond.
44.128  Termination of liability of surety under bond.
44.129  Release of bonds, notes, and obligations.

          Subpart G--Operations by Export Warehouse Proprietors

44.141  Sign.
44.142  Records.

                               Inventories

44.143  General.
44.144  Opening.
44.145  Special.
44.146  Closing.

                                 Reports

44.147  General.
44.148  Opening.
44.149  Monthly.
44.150  Special.
44.151  Closing.

                                 Claims

44.152  Claim for remission of tax liability.
44.153  Claim for abatement of assessment.
44.154  Claim for refund of tax.

         Subpart H--Suspension and Discontinuance of Operations

44.161  Discontinuance of operations.
44.162  Suspension and revocation of permit.

Subpart I [Reserved]

Subpart J--Removal of Shipments of Tobacco Products and Cigarette Papers 
       and Tubes by Manufacturers and Export Warehouse Proprietors

                         Packaging Requirements

44.181  Packages.
44.182  Lottery features.
44.183  Indecent or immoral material.
44.184  Mark.
44.185  Label or notice.
44.186  Tax classification for cigars.
44.187  Shipping containers.

                         Consignment of Shipment

44.188  General.
44.189  Transfers between factories and export warehouses.
44.190  Return of shipment to a manufacturer or customs warehouse 
          proprietor.
44.191  To officers of the armed forces for subsequent exportation.
44.192  To vessels and aircraft for shipment to noncontiguous foreign 
          countries and possessions of the United States.
44.193  To a Federal department or agency.
44.194  To district director of customs for shipment to contiguous 
          foreign countries.
44.195  To Government vessels and aircraft for consumption as supplies.
44.196  To district director of customs for consumption as supplies on 
          commercial vessels and aircraft.
44.196a  To a foreign-trade zone.
44.197  For export by parcel post.

                      Notice of Removal of Shipment

44.198  Preparation.
44.199  Disposition.
44.200  Transfers between factories and export warehouses.
44.201  Return to manufacturer or customs warehouse proprietor.
44.202  To officers of the armed forces for subsequent exportation.
44.203  To noncontiguous foreign countries and possessions of the United 
          States.
44.204  To a Federal department or agency.
44.205  To contiguous foreign countries.
44.206  To Government vessels and aircraft for consumption as supplies.
44.207  To commercial vessels and aircraft for consumption as supplies.
44.207a  To a foreign-trade zone.
44.208  For export by parcel post.

                        Miscellaneous Provisions

44.209  Diversion of shipment to another consignee.
44.210  Return of shipment to factory or export warehouse.
44.211  [Reserved]
44.212  Delay in lading at port of exportation.
44.213  Destruction of tobacco products, and cigarette papers and tubes.

                       Subpart K--Drawback of Tax

44.221  Application of drawback of tax.
44.222  Claim.
44.223  Drawback bond.
44.224  Inspection by an ATF officer.
44.225  Delivery of tobacco products, or cigarette papers or tubes for 
          export other than by parcel post.
44.226  Delivery of tobacco products, and cigarette papers and tubes for 
          export by parcel post.
44.227  Customs procedure.
44.228  Landing certificate.
44.229  Collateral evidence as to landing.
44.230  Proof of loss.
44.231  Extension of time.
44.232  Allowance of claim.

         Subpart L--Withdrawal of Cigars From Customs Warehouses

44.241  Shipment restricted.
44.242  Responsibility for tax on cigars.

[[Page 786]]

                                  Bonds

44.243  Bond required.
44.244  Amount of bond.
44.245  Strengthening bond.
44.246  Superseding bond.
44.247  Termination of liability of surety under bond.

                         Packaging Requirements

44.248  Packages.
44.249  Lottery features.
44.250  Indecent or immoral material.
44.251  Mark.
44.252  Label or notice.
44.253  Tax classification for cigars.
44.254  Shipping containers.

                         Consignment of Shipment

44.255  Consignment of cigars.

                      Notice of Removal of Shipment

44.256  Preparation.
44.257  Disposition.
44.258  To officers of the armed forces for subsequent exportation.
44.259  To noncontiguous foreign countries and possessions of the United 
          States.
44.260  To a Federal department or agency.
44.261  To contiguous foreign countries.
44.262  To Government vessels and aircraft for consumption as supplies.
44.263  To commercial vessels and aircraft for consumption as supplies.
44.264  To export warehouses.
44.264a  To a foreign-trade zone.
44.265  For export by parcel post.

                           Return of Shipment

44.266  Return of cigars from export warehouses.
44.267  Return of cigars from other sources.

    Source: Redesignated by T.D. ATF-464, 66 FR 43480, Aug. 20, 2001.

    Authority: 26 U.S.C. 5142, 5143, 5146, 5701, 5703-5705, 5711-5713, 
5721-5723, 5731, 5741, 5751, 5754, 6061, 6065, 6151, 6402, 6404, 6806, 
7011, 7212, 7342, 7606, 7805; 31 U.S.C. 9301, 9303, 9304, 9306.

    Editorial Note: Nomenclature changes to part 44 appear by T.D. ATF-
464, 66 FR 43480, Aug. 20, 2001.



                     Subpart A--Scope of Regulations



Sec. 44.1  Exportation of tobacco products, and cigarette papers and tubes, without payment of tax, or with drawback of tax.

    This part contains the regulations relating to the exportation 
(including supplies for vessels and aircraft) of tobacco products and 
cigarette papers and tubes, without payment of tax; the qualification 
of, and operations by, export warehouse proprietors; and the allowance 
of drawback of tax paid on tobacco products, and cigarette papers and 
tubes exported.

[T.D. 6871, 31 FR 48, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28087, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 44.2  Forms prescribed.

    (a) The Director is authorized to prescribe all forms required by 
this part. All of the information called for in each form shall be 
furnished as indicated by the headings on the form and the instructions 
on or pertaining to the form. In addition, information called for in 
each form shall be furnished as required by this part.
    (b) Requests for forms should be mailed to the ATF Distribution 
Center, 7943 Angus Court, Springfield, Virginia 22153.

(5 U.S.C. 552(a) (80 Stat. 383, as amended))

[T.D. ATF-92, 46 FR 46922, Sept. 23, 1981, as amended by T.D. ATF-232, 
51 FR 28087, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. 
ATF-372, 61 FR 20725, May 8, 1996]



                         Subpart B--Definitions



Sec. 44.11  Meaning of terms.

    When used in this part and in forms prescribed under this part, the 
following terms shall have the meanings given in this section, unless 
the context clearly indicates otherwise. Words in the plural form shall 
include the singular, and vice versa, and words indicating the masculine 
gender shall include the feminine. The terms ``includes'' and 
``including'' do not exclude things not listed which are in the same 
general class.
    Associate Director (Compliance Operations). The Associate Director 
(Compliance Operations) in the Bureau of Alcohol, Tobacco and Firearms, 
who is responsible to, and functions under the direction and supervision 
of, the Director.
    ATF officer. An officer of the Bureau of Alcohol, Tobacco and 
Firearms (ATF), authorized to perform any function relating to the 
administration or enforcement of this part.

[[Page 787]]

    Chewing tobacco. Any leaf tobacco that is not intended to be smoked.
    Cigar. Any roll of tobacco wrapped in leaf tobacco or in any 
substance containing tobacco (other than any roll of tobacco which is a 
cigarette within the definition of ``cigarette'' given in this section).
    Cigarette. (a) Any roll of tobacco wrapped in paper or in any 
substance not containing tobacco, and
    (b) Any roll of tobacco wrapped in any substance containing tobacco 
which, because of its appearance, the type of tobacco used in the 
filler, or its packaging and labeling, is likely to be offered to, or 
purchased by, consumers as a cigarette described in paragraph (a) of 
this definition.
    Cigarette paper. Paper, or other material except tobacco, prepared 
for use as a cigarette wrapper.
    Cigarette tube. Cigarette paper made into a hollow cylinder for use 
in making cigarettes.
    Customs warehouse. A customs bonded manufacturing warehouse, class 
6, where cigars are manufactured of imported tobacco.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC.
    District director of customs. The district director of customs at a 
headquarters port of the district (except the district of New York, 
N.Y.); the area directors of customs in the district of New York, N.Y.; 
and the port director at a port not designated as a headquarters port.
    Exportation or export. A severance of tobacco products or cigarette 
papers or tubes from the mass of things belonging to the United States 
with the intention of uniting them to the mass of things belonging to 
some foreign country. For the purposes of this part, shipment from the 
United States to Puerto Rico, the Virgin Islands, or a possession of the 
United States, shall be deemed exportation, as will the clearance from 
the United States of tobacco products and cigarette papers and tubes for 
consumption beyond the jurisdiction of the internal revenue laws of the 
United States, i.e., beyond the 3-mile limit or international boundary, 
as the case may be.
    Export warehouse. A bonded internal revenue warehouse for the 
storage of tobacco products and cigarette papers and tubes, upon which 
the internal revenue tax has not been paid, for subsequent shipment to a 
foreign country, Puerto Rico, the Virgin Islands, or a possession of the 
United States, or for consumption beyond the jurisdiction of the 
internal revenue laws of the United States.
    Export warehouse proprietor. Any person who operates an export 
warehouse.
    Factory. The premises of a manufacturer of tobacco products or 
cigarette papers and tubes in which he carries on such business.
    Foreign-trade zone. A foreign-trade zone established and operated 
pursuant to the Act of June 18, 1934, as amended.
    In bond. The status of tobacco products and cigarette papers and 
tubes, which come within the coverage of a bond securing the payment of 
internal revenue taxes imposed by 26 U.S.C. 5701 or 7652, and in respect 
to which such taxes have not been determined as provided by regulations 
in this chapter, including (a) such articles in a factory or an export 
warehouse, (b) such articles removed, transferred, or released, pursuant 
to 26 U.S.C. 5704, and with respect to which relief from the tax 
liability has not occurred, and (c) such articles on which the tax has 
been determined, or with respect to which relief from the tax liability 
has occurred, which have been returned to the coverage of a bond.
    Manufacturer of cigarette papers and tubes. Any person who 
manufactures cigarette paper, or makes up cigarette paper into tubes, 
except for his own personal use or consumption.
    Manufacturer of tobacco products. Any person who manufactures 
cigars, cigarettes, smokeless tobacco, pipe tobacco, or roll-your-own 
tobacco but does not include:
    (1) A person who produces tobacco products solely for that person's 
own consumption or use; or
    (2) A proprietor of a Customs bonded manufacturing warehouse with 
respect to the operation of such warehouse.
    Package. The container in which tobacco products or cigarette papers 
or tubes are put up by the manufacturer and delivered to the consumer.

[[Page 788]]

    Person. An individual, partnership, association, company, 
corporation, estate, or trust.
    Pipe tobacco. Any tobacco which, because of its appearance, type, 
packaging, or labeling, is suitable for use and likely to be offered to, 
or purchased by, consumers as tobacco to be smoked in a pipe.
    Region. A Bureau of Alcohol, Tobacco and Firearms Region.
    Regional Director (compliance). The principal regional official 
responsible for administering regulations in this part.
    Removal or remove. The removal of tobacco products or cigarette 
papers or tubes from either the factory or the export warehouse covered 
by the bond of the manufacturer or proprietor.
    Roll-your-own tobacco. Any tobacco which, because of its appearance, 
type, packaging, or labeling, is suitable for use and likely to be 
offered to, or purchased by, consumers as tobacco for making cigarettes.
    Sale price. The price for which large cigars are sold by the 
manufacturer, determined in accordance with Secs. 40.22 or 275.39.
    State. ``State'' shall, for the purposes of this part, be construed 
to include the District of Columbia.
    Smokeless tobacco. Any snuff or chewing tobacco.
    Snuff. Any finely cut, ground, or powdered tobacco that is not 
intended to be smoked.
    Tobacco products. Cigars, cigarettes, smokeless tobacco, pipe 
tobacco, and roll-your-own tobacco.
    United States. ``United States'' when used in a geographical sense 
shall include only the States and the District of Columbia.
    U.S.C. The United States Code.
    Zone operator. The person to whom the privilege of establishing, 
operating, and maintaining a foreign-trade zone has been granted by the 
Foreign-Trade Zones Board created by the Act of June 18, 1934, as 
amended.
    Zone restricted status. Tobacco products, cigarette papers and 
cigarette tubes which have been taken into a foreign trade zone from the 
United States Customs territory for the sole purpose of exportation or 
storage until exported.

[T.D. ATF-48, 43 FR 13556, Mar. 31, 1978; 44 FR 55856, Sept. 28, 1979, 
as amended by T.D. ATF-232, 51 FR 28087, Aug. 5, 1986; T.D. ATF-243, 51 
FR 43194, Dec. 1, 1986; T.D. ATF-289, 54 FR 48841, Nov. 27, 1989; T.D. 
ATF-421, 64 FR 71925, Dec. 22, 1999; T.D. ATF-424, 64 FR 71933, Dec. 22, 
1999; T.D. ATF-420, 64 FR 71945, Dec. 22, 1999; T.D. ATF-460, 66 FR 
39093, July 27, 2001; T.D. ATF-467, 66 FR 49532, Sept. 28, 2001]



                Subpart Ba--Special (Occupational) Taxes

    Source: T.D. ATF-271, 53 FR 17563, May 17, 1988, unless otherwise 
noted.



Sec. 44.31  Liability for special tax.

    (a) Export warehouse proprietor. Every export warehouse proprietor 
shall pay a special (occupational) tax at a rate specified by 
Sec. 44.32. The tax shall be paid on or before the date of commencing 
the business of an export warehouseman, and thereafter every year on or 
before July 1. On commencing business, the tax shall be computed from 
the first day of the month in which liability is incurred, through the 
following June 30. Thereafter, the tax shall be computed for the entire 
year (July 1 through June 30).
    (b) Transition rule. For purposes of paragraph (a) of this section, 
a proprietor engaged in the business of an export warehouseman on 
January 1, 1988, shall be treated as having commenced business on that 
date. The special tax imposed by this transition rule shall cover the 
period January 1, 1988, through June 30, 1988, and shall be paid on or 
before April 1, 1988.
    (c) Each place of business taxable. An export warehouse proprietor 
under this part incurs special tax liability at each place of business 
in which an occupation subject to special tax is conducted. A place of 
business means the entire office, plant or area of the business in any 
one location under the same proprietorship. Passageways, streets, 
highways, rail crossings, waterways, or partitions dividing the premises 
are not sufficient separation to require additional special tax, if the 
divisions of the premises are otherwise contiguous.

(26 U.S.C. 5143, 5731)

[[Page 789]]



Sec. 44.32  Rate of special tax.

    (a) General. Title 26 U.S.C. 5731(a)(3) imposes a special tax of 
$1,000 per year on every export warehouse proprietor.
    (b) Reduced rate for small proprietors. Title 26 U.S.C. 5731(b) 
provides for a reduced rate of $500 per year with respect to any export 
warehouse proprietor whose gross receipts (for the most recent taxable 
year ending before the first day of the taxable period to which the 
special tax imposed by Sec. 44.31 relates) are less than $500,000. The 
``taxable year'' to be used for determining gross receipts is the 
taxpayer's income tax year. All gross receipts of the taxpayer shall be 
included, not just the gross receipts of the business subject to special 
tax. Proprietors of new businesses that have not yet begun a taxable 
year, as well as proprietors of existing businesses that have not yet 
ended a taxable year, who commence a new activity subject to special 
tax, qualify for the reduced special (occupational) tax rate, unless the 
business is a member of a ``controlled group''; in that case, the rules 
of paragraph (c) of this section shall apply.
    (c) Controlled group. All persons treated as one taxpayer under 26 
U.S.C. 5061(e)(3) shall be treated as one taxpayer for the purpose of 
determining gross receipts under paragraph (b) of this section. 
``Controlled group'' means a controlled group of corporations, as 
defined in 26 U.S.C. 1563 and implementing regulations in 26 CFR 1.1563-
1 through 1.1563-4, except that the words ``at least 80 percent'' shall 
be replaced by the words ``more than 50 percent'' in each place they 
appear in subsection (a) of 26 U.S.C. 1563, as well as in the 
implementing regulations. Also, the rules for a ``controlled group of 
corporations'' apply in a similar fashion to groups which include 
partnerships and/or sole proprietorships. If one entity maintains more 
than 50% control over a group consisting of corporations and one, or 
more, partnerships and/or sole proprietorships, all of the members of 
the controlled group are one taxpayer for the purpose of this section.
    (d) Short taxable year. Gross receipts for any taxable year of less 
than 12 months shall be annualized by multiplying the gross receipts for 
the short period by 12 and dividing the result by the number of months 
in the short period as required by 26 U.S.C. 448(c)(3).
    (e) Returns and allowances. Gross receipts for any taxable year 
shall be reduced by returns and allowances made during such year under 
26 U.S.C. 448(c)(3).

(26 U.S.C. 448, 5061, 5731)



Sec. 44.33  Special tax returns.

    (a) General. Special tax shall be paid by return. The prescribed 
return is ATF Form 5630.5, Special Tax Registration and Return. Special 
tax returns, with payment of tax, shall be filed with ATF in accordance 
with instructions on the form.
    (b) Preparation of ATF Form 5630.5. All of the information called 
for on Form 5630.5 shall be provided, including:
    (1) The true name of the taxpayer.
    (2) The trade name(s) (if any) of the business(es) subject to 
special tax.
    (3) The employer identification number (see Sec. 44.34).
    (4) The exact location of the place of business, by name and number 
of building or street, or if these do not exist, by some description in 
addition to the post office address. In the case of one return for two 
or more locations, the address to be shown shall be the taxpayer's 
principal place of business (or principal office, in the case of a 
corporate taxpayer).
    (5) The class(es) of special tax to which the taxpayer is subject.
    (6) Ownership and control information: that is, the name, position, 
and residence address of every owner of the business and of every person 
having power to control its management and policies with respect to the 
activity subject to special tax. ``Owner of the business'' shall include 
every partner, if the taxpayer is a partnership, and every person owning 
10% or more of its stock, if the taxpayer is a corporation. However, the 
ownership and control information required by this paragraph need not be 
stated if the same information has been previously provided to ATF in 
connection with a permit application, and if the information previously 
provided is still current.
    (c) Multiple locations and/or classes of tax. A taxpayer subject to 
special tax for the same period at more than one

[[Page 790]]

location or for more than one class of tax shall--
    (1) File one special tax return, ATF Form 5630.5, with payment of 
tax, to cover all such locations and classes of tax; and
    (2) Prepare, in duplicate, a list identified with the taxpayer's 
name, address (as shown on ATF Form 5630.5), employer identification 
number, and period covered by the return. The list shall show, by 
States, the name, address, and tax class of each location for which 
special tax is being paid. The original of the list shall be filed with 
ATF in accordance with instructions on the return, and the copy shall be 
retained at the taxpayer's principal place of business (or principal 
office, in the case of a corporate taxpayer) for the period specified in 
Sec. 44.142.
    (d) Signing of ATF Forms 5630.5--(1) Ordinary returns. The return of 
an individual proprietor shall be signed by the individual. The return 
of a partnership shall be signed by a general partner. The return of a 
corporation shall be signed by an officer. In each case, the person 
signing the return shall designate his or her capacity as ``individual 
owner,'' ``member of firm,'' or, in the case of a corporation, the title 
of the officer.
    (2) Fiduciaries. Receivers, trustees, assignees, executors, 
administrators, and other legal representatives who continue the 
business of a bankrupt, insolvent, deceased person, etc., shall indicate 
the fiduciary capacity in which they act.
    (3) Agent or attorney in fact. If a return is signed by an agent or 
attorney in fact, the signature shall be preceded by the name of the 
principal and followed by the title of the agent or attorney in fact. A 
return signed by a person as agent will not be accepted unless there is 
filed, with the ATF office with which the return is required to be 
filed, a power of attorney authorizing the agent to perform the act.
    (4) Perjury statement. ATF Forms 5630.5 shall contain or be verified 
by a written declaration that the return has been executed under the 
penalties of perjury.

(26 U.S.C. 6061, 6065, 6151, 7011)



Sec. 44.34  Employer identification number.

    (a) Requirement. The employer identification number (defined in 26 
CFR 301.7701-12) of the taxpayer who has been assigned such a number 
shall be shown on each special tax return, including amended returns, 
filed under this subpart. Failure of the taxpayer to include the 
employer identification number may result in the imposition of the 
penalty specified in Sec. 70.113 of this chapter.
    (b) Application for employer identification number. Each taxpayer 
who files a special tax return, who has not already been assigned an 
employer identification number, shall file IRS Form SS-4 to apply for 
one. The taxpayer shall apply for and be assigned only one employer 
identification number, regardless of the number of places of business 
for which the taxpayer is required to file a special tax return. The 
employer identification number shall be applied for no later than 7 days 
after the filing of the taxpayer's first special tax return. IRS Form 
SS-4 may be obtained from the director of an IRS service center or from 
any IRS district director.
    (c) Preparation and filing of IRS Form SS-4. The taxpayer shall 
prepare and file IRS Form SS-4, together with any supplementary 
statement, in accordance with the instructions on the form or issued in 
respect to it.

(26 U.S.C. 6109)

[T.D. ATF-271, 53 FR 17563, May 17, 1988, as amended by T.D. ATF-301, 55 
FR 47658, Nov. 14, 1990]



Sec. 44.35  Issuance, distribution, and examination of special tax stamps.

    (a) Issuance of special tax stamps. Upon filing a properly executed 
return on ATF Form 5630.5 together with the full remittance, the 
taxpayer will be issued an appropriately designated special tax stamp. 
If the return covers multiple locations, the taxpayer will be issued one 
appropriately designated stamp for each location listed on the 
attachment to ATF Form 5630.5 required by Sec. 44.33(c)(2), but showing, 
as to name and address, only the name of the taxpayer and the address of 
the taxpayer's principal place of business (or principal

[[Page 791]]

office in the case of a corporate taxpayer).
    (b) Distribution of special tax stamps for multiple locations. On 
receipt of the special tax stamps, the taxpayer shall verify that there 
is one stamp for each location listed on the attachment to ATF Form 
5630.5. The taxpayer shall designate one stamp for each location and 
type on each stamp the address of the business conducted at the location 
for which that stamp is designated. The taxpayer shall then forward each 
stamp to the place of business designated on the stamp.
    (c) Examination of special tax stamps. All stamps denoting payment 
of special tax shall be kept available for inspection by ATF officers, 
at the location for which designated, during business hours.

(26 U.S.C. 5146, 6806)



Sec. 44.36  Changes in special tax stamps.

    (a) Change in name. If there is a change in the corporate or firm 
name, or in the trade name, as shown on ATF Form 5630.5, the export 
warehouse proprietor shall file an amended special tax return as soon as 
practicable after the change, covering the new corporate or firm name, 
or trade names. No new special tax is required to be paid. The export 
warehouse proprietor shall attach the special tax stamp for endorsement 
of the change in name.
    (b) Change in proprietorship--(1) General. If there is a change in 
the proprietorship of an export warehouse, the successor shall pay a new 
special tax and obtain the required special tax stamps.
    (2) Exemption for certain successors. Persons having the right of 
succession provided for in paragraph (c) of this section may carry on 
the business for the remainder of the period for which the special tax 
was paid, without paying a new special tax, if within 30 days after the 
date on which the successor begins to carry on the business, the 
successor files a special tax return on ATF Form 5630.5 with ATF, which 
shows the basis of succession. A person who is a successor to a business 
for which special tax has been paid and who fails to register the 
succession is liable for special tax computed from the first day of the 
calendar month in which he or she began to carry on the business.
    (c) Persons having right of succession. Under the conditions 
indicated in paragraph (b)(2) of this section, the right of succession 
will pass to certain persons in the following cases:
    (1) Death. The widowed spouse or child, or executor, administrator 
or other legal representative of the taxpayer;
    (2) Succession of spouse. A husband or wife succeeding to the 
business of his or her spouse (living);
    (3) Insolvency. A receiver or trustee in bankruptcy, or an assignee 
for benefit of creditors;
    (4) Withdrawal from firm. The partner or partners remaining after 
death or withdrawal of a member.
    (d) Change in location. If there is a change in location of a 
taxable place of business, the export warehouse proprietor shall, within 
30 days after the change, file with ATF an amended special tax return 
covering the new location. The export warehouse proprietor shall attach 
the special tax stamp or stamps, for endorsement of the change in 
location. No new special tax is required to be paid. However, if the 
export warehouse proprietor does not file the amended return within 30 
days, he or she is required to pay a new special tax and obtain a new 
special tax stamp.

(26 U.S.C. 5143, 7011)



                           Subpart C--General



Sec. 44.61  Removals, withdrawals, and shipments authorized.

    (a) Tobacco products, and cigarette papers and tubes may be removed 
from a factory or an export warehouse, and cigars may be withdrawn from 
a customs warehouse, without payment of tax, for direct exportation or 
for delivery for subsequent exportation, in accordance with the 
provisions of this part.
    (b) Tobacco products and cigarette papers and tubes are not eligible 
for removal or transfer in bond under this part unless they bear the 
marks, labels or notices required by this part.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. ATF-421, 64 FR 71925, Dec. 22, 1999]

[[Page 792]]



Sec. 44.61a  Deliveries to foreign-trade zones--export status.

    Tobacco products, and cigarette papers and tubes may be removed from 
a factory or an export warehouse and cigars may be withdrawn from a 
customs warehouse, without payment of tax, for delivery to a foreign-
trade zone for exportation or storage pending exportation in accordance 
with the provisions of this part. Such articles delivered to a foreign-
trade zone under this part shall be considered exported for the purpose 
of the statutes and bonds under which removed and for the purposes of 
the internal revenue laws generally and the regulations thereunder. 
However, export status is not acquired until an application for 
admission of the articles into the zone with zone restricted status has 
been approved by the district director of customs pursuant to the 
appropriate provisions of 19 CFR chapter I and the required certificate 
of receipt of the articles in the zone has been made on Form 5200.14 as 
prescribed in this part.

(48 Stat. 999, as amended, 72 Stat. 1418, as amended; 19 U.S.C. 81c; 26 
U.S.C. 5704)

[T.D. 6961, 33 FR 9491, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28087, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71925, Dec. 22, 
1999]



Sec. 44.62  Restrictions on deliveries of tobacco products, and cigarette papers and tubes to vessels and aircraft, as supplies.

    Tobacco products, and cigarette papers and tubes may be removed from 
a factory or an export warehouse and cigars may be withdrawn from a 
customs warehouse, without payment of tax, for delivery to vessels and 
aircraft, as supplies, for consumption beyond the jurisdiction of the 
internal revenue laws of the United States, subject to the applicable 
provisions of this part. Deliveries may be made to vessels actually 
engaged in foreign, intercoastal, or noncontiguous territory trade 
(i.e., vessels operating on a regular schedule in trade or actually 
transporting passengers and/or cargo (a) between a port in the United 
States and a foreign port; (b) between the Atlantic and Pacific ports of 
the United States; or (c) between a port on the mainland of the United 
States and a port in Alaska, Hawaii, Puerto Rico, the Virgin Islands, or 
a possession of the United States; between a port in Alaska and a port 
in Hawaii; or between a port in Alaska or Hawaii and a port in Puerto 
Rico, the Virgin Islands, or a possession of the United States); to 
vessels clearing through customs for a port beyond the jurisdiction of 
the internal revenue laws of the United States; to vessels of war or 
other governmental activity; or to vessels of the United States 
documented to engage in the fishing business (including the whaling 
business), and foreign fishing (including whaling) vessels of 5 net tons 
or over. Such deliveries to vessels shall be subject to lading under 
customs supervision as provided in Secs. 44.207 and 44.263. As a 
condition to the lading of the tobacco products, and cigarette papers 
and tubes, the customs authorities at the port of lading may, if they 
deem it necessary in order to protect the revenue, require assurances, 
satisfactory to them, from the master of the receiving vessel that the 
quantities to be laden are reasonable, considering the number of persons 
to be carried, the vessel's itinerary, the duration of its intended 
voyage, etc., and that such articles are to be used exclusively as 
supplies on the voyage. For this purpose, the customs authorities may 
require the master of the receiving vessel to submit for customs 
approval, prior to lading, customs documentation for permission to lade 
the articles. Where the customs authorities allow only a portion of a 
shipment to be laden, the remainder of the shipment shall be returned to 
the bonded premises of the manufacturer, export warehouse proprietor, or 
customs warehouse proprietor making the shipment, or otherwise disposed 
of as approved by the regional director (compliance) for the region from 
which the articles were shipped. Deliveries may be made to aircraft 
clearing through customs en route to a place or places beyond the 
jurisdiction of the internal revenue laws of the United States, and to 
aircraft operating on a regular schedule between U.S. customs areas as 
defined in the Air Commerce Regulations (19 CFR part 122). Deliveries 
may not be made to a vessel or aircraft stationed in the United States

[[Page 793]]

for an indefinite period and where its schedule does not include 
operations outside such jurisdiction.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 48, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71925, Dec. 22, 
1999]



Sec. 44.63  Restrictions on disposal of tobacco products, and cigarette papers and tubes on vessels and aircraft.

    Tobacco products, and cigarette papers and tubes delivered to a 
vessel or aircraft, without payment of tax, pursuant to Sec. 44.62, 
shall not be sold, offered for sale, or otherwise disposed of until the 
vessel or aircraft is outside the jurisdiction of the internal revenue 
laws of the United States, i.e., outside the 3-mile limit or 
international boundary, as the case may be, of the United States. Where 
the vessel or aircraft returns within the jurisdiction of the internal 
revenue laws with such articles on board, the articles shall be subject 
to treatment under the tariff laws of the United States.

(72 Stat. 1418, as amended; 26 U.S.C. 5704; 19 U.S.C. 1317)

[T.D. 6871, 31 FR 49, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 44.64  Responsibility for delivery or exportation of tobacco products, and cigarette papers and tubes.

    Responsibility for compliance with the provisions of this part with 
respect to the removal under bond of tobacco products, and cigarette 
papers and tubes, without payment of tax, for export, and for the proper 
delivery or exportation of such articles, and with respect to the 
exportation of tobacco products, and cigarette papers and tubes with 
benefit of drawback of tax, shall rest upon the manufacturer of such 
articles or the proprietor of an export warehouse or customs warehouse 
from whose premises such articles are removed for export, and upon the 
exporter who exports tobacco products, and cigarette papers and tubes 
with benefit of drawback of tax.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 49, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 44.65  Liability for tax on tobacco products, and cigarette papers and tubes.

    The manufacturer of tobacco products and cigarette papers and tubes 
shall be liable for the taxes imposed thereon by 26 U.S.C. 5701: 
Provided, That when tobacco products, and cigarette papers and tubes are 
transferred, without payment of tax, pursuant to 26 U.S.C. 5704, between 
the bonded premises of manufacturers and/or export warehouse 
proprietors, the transferee shall become liable for the tax upon receipt 
by him of such articles. Any person who possesses tobacco products, or 
cigarette papers or tubes in violation of 26 U.S.C. 5751(a)(1) or (2), 
shall be liable for a tax equal to the tax on such articles.

(72 Stat. 1417, 1424; 26 U.S.C. 5703, 5751)

[T.D. 6871, 31 FR 49, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55856, Sept. 28, 1979; T.D. 
ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 
1986]



Sec. 44.66  Relief from liability for tax.

    A manufacturer of tobacco products or cigarette papers and tubes or 
an export warehouse proprietor shall be relieved of the liability for 
tax on tobacco products, or cigarette papers or tubes when he furnishes 
the regional director (compliance), for the region in which the factory 
or warehouse is located, evidence satisfactory to the regional director 
(compliance) of exportation or proper delivery, as required by this 
part, or satisfactory evidence of such other disposition as may be used 
as the lawful basis for such relief. Such evidence shall be furnished 
within 90 days of the date of removal of the tobacco products, or 
cigarette papers or

[[Page 794]]

tubes: Provided, That this period may be extended for good cause shown.

(72 Stat. 1417; 26 U.S.C. 5703)

[T.D. 6871, 31 FR 49, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975; T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. ATF-243, 51 FR 
43194, Dec. 1, 1986]



Sec. 44.67  Payment of tax.

    (a) General. The taxes on tobacco products, and cigarette papers and 
tubes with respect to which the evidence described in Sec. 44.66 is not 
timely furnished shall become immediately due and payable. The taxes 
shall be paid to ATF, with sufficient information to identify the 
taxpayer, the nature and purpose of the payment, and the articles 
covered by the payment. (ATF Form 5000.24 may be used for this purpose.)
    (b) Large cigars. The amount of tax liability on large cigars shall 
be based on the maximum tax rate prescribed in Sec. 40.21 of this part, 
unless the person liable for the tax establishes that a lower tax rate 
is applicable.

(All recordkeeping requirements have been approved under OMB Control No. 
1512-0180)

[T.D. ATF-80, 46 FR 18311, Mar. 24, 1981, as amended by T.D. ATF-232, 51 
FR 28088, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. 
ATF-251, 52 FR 19341, May 22, 1987; T.D. ATF-307, 55 FR 52745, Dec. 21, 
1990; T.D. ATF-460, 66 FR 39093, July 27, 2001]



Sec. 44.68  [Reserved]



Sec. 44.69  Assessment.

    Whenever any person required by law to pay tax on tobacco products, 
and cigarette papers and tubes fails to pay such tax, the tax shall be 
ascertained and assessed against such person, subject to the limitations 
prescribed in 26 U.S.C. 6501. The tax so assessed shall be in addition 
to the penalties imposed by law for failure to pay such tax when 
required. Except in cases where delay may jeopardize collection of the 
tax, or where the amount is nominal or the result of an evident 
mathematical error, no such assessment shall be made until and after 
notice has been afforded such person to show cause against assessment. 
The person will be allowed 45 days from the date of such notice to show 
cause, in writing, against such assessment.

(72 Stat. 1417; 26 U.S.C. 5703)

[T.D. 6871, 31 FR 49, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55856, Sept. 28, 1979; T.D. 
ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 
1986]



Sec. 44.70  Authority of ATF officers to enter premises.

    Any ATF officer may enter in the daytime any premises where tobacco 
products, or cigarette papers or tubes are produced or kept, so far as 
it may be necessary for the purpose of examining such articles. When 
such premises are open at night, any ATF officer may enter them, while 
so open, in the performance of his official duties. The owner of such 
premises, or person having the superintendence of the same, who refuses 
to admit any ATF officer or permit him to examine such articles shall be 
liable to the penalties prescribed by law for the offense.

(68A Stat. 872, 903; 26 U.S.C. 7342, 7606)

[T.D. 6871, 31 FR 49, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 44.71  Interference with administration.

    Whoever, corruptly or by force or threats of force, endeavors to 
hinder or obstruct the administration of this part, or endeavors to 
intimidate or impede any ATF officer acting in his official capacity, or 
forcibly rescues or attempts to rescue or causes to be rescued any 
property, after it has been duly seized for forfeiture to the United 
States in connection with a violation of the internal revenue laws, 
shall be liable to the penalties prescribed by law.

(68A Stat. 855; 26 U.S.C. 7212)

[25 FR 4716, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975]

                      Variations From Requirements



Sec. 44.72  Alternate methods or procedures.

    A manufacturer of tobacco products, an export warehouse proprietor, 
or a

[[Page 795]]

customs warehouse proprietor, on specific approval by the Director as 
provided in this section, may use an alternate method or procedure in 
lieu of a method or procedure specifically prescribed in this part. The 
Director may approve an alternate method or procedure, subject to stated 
conditions, when he finds that--
    (a) Good cause has been shown for the use of the alternate method or 
procedure.
    (b) The alternate method or procedure is within the purpose of, and 
consistent with the effect intended by, the specifically prescribed 
method or procedure, and affords equivalent security to the revenue, and
    (c) The alternate method or procedure will not be contrary to any 
provision of law, and will not result in an increase in cost to the 
Government or hinder the effective administration of this part. No 
alternate method or procedure relating to the giving of any bond or to 
the assessment, payment, or collection of tax, shall be authorized under 
this section. Where a manufacturer or proprietor desires to employ an 
alternate method or procedure, he shall submit a written application to 
do so, in triplicate, to the regional director (compliance) for 
transmittal to the Director. The application shall specifically describe 
the proposed alternate method or procedure, and shall set forth the 
reasons therefor. Alternate methods or procedures shall not be employed 
until the application has been approved by the Director. The 
manufacturer or proprietor shall, during the period of authorization of 
an alternate method or procedure, comply with the terms of the approved 
application. Authorization for any alternate method or procedure may be 
withdrawn whenever in the judgment of the Director the revenue is 
jeopardized or the effective administration of this part is hindered. 
The manufacturer or proprietor shall retain, as part of his records, any 
authorization of the Director under this section.

[T.D. 6871, 31 FR 49, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 44.73  Emergency variations from requirements.

    The Director may approve methods of operation other than as 
specified in this part, where he finds that an emergency exists and the 
proposed variations from the specified requirements are necessary, and 
the proposed variations--
    (a) Will afford the security and protection to the revenue intended 
by the prescribed specifications,
    (b) Will not hinder the effective administration of this part, and
    (c) Will not be contrary to any provision of law. Variations from 
requirements granted under this section are conditioned on compliance 
with the procedures, conditions, and limitations set forth in the 
approval of the application. Failure to comply in good faith with such 
procedures, conditions, and limitations shall automatically terminate 
the authority for such variations and the manufacturer, export warehouse 
proprietor, or customs warehouse proprietor, thereupon shall fully 
comply with the prescribed requirements of regulations from which the 
variations were authorized. Authority for any variations may be 
withdrawn whenever in the judgment of the Director the revenue is 
jeopardized or the effective administration of this part is hindered by 
the continuation of such variation. Where a manufacturer or proprietor 
desires to employ such variation, he shall submit a written application 
to do so, in triplicate, to the regional director (compliance) for 
transmittal to the Director. The application shall describe the proposed 
variations and set forth the reasons therefor. Variations shall not be 
employed until the application has been approved. The manufacturer or 
proprietor shall retain, as part of his records, any authorization of 
the Director under this section.

[T.D. 6871, 31 FR 50, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975]

[[Page 796]]



 Subpart D--Qualification Requirements for Export Warehouse Proprietors

    Source: 25 FR 4716, May 28, 1960, unless otherwise noted. 
Redesignated at 40 FR 16835, Apr. 15, 1975.



Sec. 44.81  Persons required to qualify.

    Every person who intends to engage in business as an export 
warehouse proprietor, as defined in this part, shall qualify as such in 
accordance with the provisions of this part.

(72 Stat. 1421; 26 U.S.C. 5711, 5712, 5713)



Sec. 44.82  Application for permit.

    Every person, before commencing business as an export warehouse 
proprietor, shall make application, on Form 2093, to the regional 
director (compliance) for, and obtain, the permit provided for in 
Sec. 44.93. All documents required under this part to be furnished with 
such application shall be made a part thereof.

(72 Stat. 1421; 26 U.S.C. 5712)



Sec. 44.83  Corporate documents.

    Every corporation, before commencing business as an export warehouse 
proprietor, shall furnish with its application for permit required by 
Sec. 44.82, a true copy of the corporate charter or a certificate of 
corporate existence or incorporation, executed by the appropriate 
officer of the State in which incorporated. The corporation shall also 
furnish, in duplicate, evidence which will establish the authority of 
the officer or other person who executes the application for permit to 
execute the same; the authority of persons to sign other documents, 
required by this part, for the corporation; and the identity of the 
officers and directors, and each person who holds more than ten percent 
of the stock of such corporation. Where a corporation has previously 
filed such documents or evidence with the same regional director 
(compliance), a written statement by the corporation, in duplicate, to 
that effect will be sufficient for the purpose of this section.

(72 Stat. 1421; 26 U.S.C. 5712)



Sec. 44.84  Articles of partnership or association.

    Every partnership or association, before commencing business as an 
export warehouse proprietor, shall furnish with its application for 
permit, required by Sec. 44.82 a true copy of the articles of 
partnership or association, if any, or certificate of partnership or 
association where required to be filed by any State, county, or 
municipality. Where a partnership or association has previously filed 
such documents with the same regional director (compliance), a written 
statement by the partnership or association, in duplicate, to that 
effect will be sufficient for the purpose of this section.

(72 Stat. 1421; 26 U.S.C. 5712)



Sec. 44.85  Trade name certificate.

    Every person, before commencing business under a trade name as an 
export warehouse proprietor, shall furnish with his application for 
permit, required by Sec. 44.82, a true copy of the certificate or other 
document, if any, issued by a State, county, or municipal authority in 
connection with the transaction of business under such trade name. If no 
such certificate or other document is so required a written statement, 
in duplicate, to that effect by such person will be sufficient for the 
purpose of this section.

(72 Stat. 1421; 26 U.S.C. 5712)

[T.D. 6961, 33 FR 9491, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 44.86  Bond.

    Every person, before commencing business as an export warehouse 
proprietor, shall file, in connection with his application for permit, a 
bond, Form 2103, in accordance with the applicable provisions of 
Sec. 44.88 and subpart F, conditioned upon compliance with the 
provisions of chapter 52, I.R.C., and regulations thereunder, including, 
but not limited to, the timely payment of taxes imposed by such chapter 
and penalties and interest in connection therewith for which he may 
become liable to the United States.

(72 Stat. 1421; 26 U.S.C. 5711)

[[Page 797]]



Sec. 44.87  Power of attorney.

    If the application for permit or other qualifying documents are 
signed by an attorney in fact for an individual, partnership, 
association, company, or corporation, or by one of the partners for a 
partnership, or by an officer of an association or company, or, in the 
case of a corporation, by an officer or other person not authorized to 
sign by the corporate documents described in Sec. 44.83, power of 
attorney conferring authority upon the person signing the documents 
shall be manifested on Form 1534 and furnished to the regional director 
(compliance).



Sec. 44.88  Description and diagram of premises.

    The premises to be used by an export warehouse proprietor as his 
warehouse shall be described, in the application for permit required by 
Sec. 44.82, and bond required by Sec. 44.86, by number, street, and 
city, town, or village, and State. Such premises may consist of more 
than one building, which need not be contiguous: Provided, That such 
premises are located in the same city, town, or village and each located 
is described in the application for permit and the bond by number and 
street. Where such premises consist of less than an entire building, a 
diagram, in duplicate, shall also be furnished showing the particular 
floor or floors, or room or rooms, comprising the warehouse.

(72 Stat. 1421; 26 U.S.C. 5712)



Sec. 44.89  Separation of premises.

    Where the export warehouse premises consist of less than an entire 
building, the premises shall be completely separated from adjoining 
portions of the building, which separation shall be constructed of 
materials generally used in the construction of buildings and may 
include any necessary doors or other openings.

(72 Stat. 1421; 26 U.S.C. 5712)



Sec. 44.90  Restrictions relating to export warehouse premises.

    Export warehouse premises shall be used exclusively for the storage 
of tobacco products and cigarette papers and tubes, upon which the 
internal revenue tax has not been paid, for subsequent removal under 
this part: Provided, That smoking tobacco may also be stored in an 
export warehouse.

[T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, 
Dec. 1, 1986]



Sec. 44.91  Additional information.

    The regional director (compliance) may require such additional 
information as may be deemed necessary to determine whether the 
applicant is entitled to a permit. The applicant shall, when required by 
the regional director (compliance), furnish as a part of his application 
for permit such additional information as may be necessary for the 
regional director (compliance) to determine whether the applicant is 
entitled to a permit.



Sec. 44.92  Investigation of applicant.

    The regional director (compliance) shall promptly cause such inquiry 
or investigation to be made, as he deems necessary, to verify the 
information furnished in connection with an application for permit and 
to ascertain whether the applicant is, by reason of his business 
experience, financial standing, and trade connections, likely to 
maintain operations in compliance with 26 U.S.C. chapter 52, and 
regulations thereunder; whether such person has disclosed all material 
information required or made any material false statement in the 
application for such permit; and whether the premises on which it is 
proposed to establish the export warehouse are adequate to protect the 
revenue. If the regional director (compliance) has reason to believe 
that the applicant is not entitled to a permit, he shall promptly give 
the applicant notice of the contemplated disapproval of his application 
and opportunity for hearing thereon in accordance with part 71 of this 
chapter, which part (including the provisions relating to the 
recommended decision and to appeals) is made applicable to such 
proceedings. If, after such notice and opportunity for hearing, the 
regional director (compliance) finds that the applicant is not entitled 
to a permit, he shall, by order stating the findings on

[[Page 798]]

which his decision is based, deny the permit.

(72 Stat. 1421; 26 U.S.C. 5712)

[25 FR 4716, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55856, Sept. 28, 1979; T.D. ATF-463, 
66 FR 42734, Aug. 15, 2001]



Sec. 44.93  Issuance of permit.

    If the application for permit, bond, and supporting documents, 
required under this part, are approved by him, the regional director 
(compliance) shall issue a permit, Form 2096, to the export warehouse 
proprietor. The permit shall bear a number and shall fully set forth 
where the business of the export warehouse proprietor is to be 
conducted. The proprietor shall retain such permit at all times within 
his export warehouse and it shall be readily available for inspection by 
any ATF officer upon his request. Where the warehouse consists of more 
than one building, the permit shall be retained in the building in which 
the records, required by Sec. 44.142, are kept.

(72 Stat. 1421; 26 U.S.C. 5713)



   Subpart E--Changes Subsequent to Original Qualification of Export 
                          Warehouse Proprietors

    Source: 25 FR 4717, May 28, 1960, unless otherwise noted. 
Redesignated at 40 FR 16835, Apr. 15, 1975.

                             Changes in Name



Sec. 44.101  Change in individual name.

    Where there is a change in the name of an individual operating as an 
export warehouse proprietor he shall, within 30 days of such change, 
make application on Form 2098 for an amended permit.

(72 Stat. 1421; 26 U.S.C. 5712)

[T.D. 6961, 33 FR 9491, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 44.102  Change in trade name.

    Where there is a change in, or an addition or discontinuance of, a 
trade name used by an export warehouse proprietor in connection with 
operations authorized by his permit, the proprietor shall, within 30 
days of such change, addition, or discontinuance, make application on 
Form 2098 for an amended permit to reflect such change. The proprietor 
shall also furnish a true copy of any new trade name certificate or 
document issued to him, or statement in lieu thereof, required by 
Sec. 44.85.

(72 Stat. 1421; 26 U.S.C. 5712)

[T.D. 6961, 33 FR 9491, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 44.103  Change in corporate name.

    Where there is a change in the name of a corporate export warehouse 
proprietor the proprietor shall, within 30 days of such change, make 
application on Form 2098 for an amended permit. The proprietor shall 
also furnish such documents as may be necessary to establish that the 
corporate name has been changed.

(72 Stat. 1421; 26 U.S.C. 5712)

[T.D. 6961, 33 FR 9491, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975]

                    Changes in Ownership and Control



Sec. 44.104  Fiduciary successor.

    If an administrator, executor, receiver, trustee, assignee, or other 
fiduciary, is to take over the business of an export warehouse 
proprietor, as a continuing operation, such fiduciary shall, before 
commencing operations, make application for permit and file bond as 
required by subpart D of this part, furnish certified copies, in 
duplicate, of the order of the court, or other pertinent documents, 
showing his appointment and qualification as such fiduciary, and make an 
opening inventory, in accordance with the provisions of Sec. 44.144; 
Provided, That where a diagram has been furnished by the predecessor, in 
accordance with the provisions of Sec. 44.88, the successor may adopt 
such diagram. However, where a fiduciary intends merely to liquidate the 
business, qualification as an export warehouse proprietor will not be 
required if he promptly files with the regional director (compliance) a 
statement to that effect, together with an extension of coverage of the 
predecessor's bond, executed by the fiduciary, also by the

[[Page 799]]

surety on such bond, in accordance with the provisions of Sec. 44.126.

(72 Stat. 1421, 1422; 26 U.S.C. 5711, 5712, 5721)



Sec. 44.105  Transfer of ownership.

    If a transfer is to be made in ownership of the business of an 
export warehouse proprietor (including a change in the identity of the 
members of a partnership or association), such proprietor shall give 
notice, in writing, to the regional director (compliance), naming the 
proposed successor and the desired effective date of such transfer. The 
proposed successor shall, before commencing operations, qualify as a 
proprietor, in accordance with the applicable provisions of subpart D of 
this part: Provided, That where a diagram has been furnished by the 
proprietor in accordance with the provisions of Sec. 44.88, the proposed 
successor may adopt such diagram. The proprietor shall give such notice 
of transfer, and the proposed successor shall make application for 
permit and file bond, as required, in ample time for examination and 
approval thereof before the desired date of such change. The predecessor 
shall make a closing inventory and closing report, in accordance with 
the provisions of Secs. 44.146 and 44.151, respectively, and surrender, 
with such inventory and report, his permit, and the successor shall make 
an opening inventory, in accordance with the provisions of Sec. 44.144.

(72 Stat. 1421, 1422; 26 U.S.C. 5712, 5713, 5721, 5722)



Sec. 44.106  Change in officers or directors of a corporation.

    Where there is any change in the officers or directors of a 
corporation operating the business of an export warehouse proprietor, 
the proprietor shall furnish to the regional director (compliance) 
notice, in writing, of the election of the new officers or directors 
within 30 days after such election.

(72 Stat. 1421; 26 U.S.C. 5712)



Sec. 44.107  Change in stockholders of a corporation.

    Where the issuance, sale, or transfer of the stock of a corporation, 
operating as an export warehouse proprietor, results in a change in the 
identity of the principal stockholders exercising actual or legal 
control of the operations of the corporation, the corporate proprietor 
shall, within 30 days after the change occurs, make application for a 
new permit; otherwise, the present permit shall be automatically 
terminated at the expiration of such 30-day period, and the proprietor 
shall dispose of all cigars, cigarettes, and cigarette papers and tubes 
on hand, in accordance with this part, make a closing inventory and 
closing report, in accordance with the provisions of Secs. 44.146 and 
44.151, respectively, and surrender his permit with such inventory and 
report. If the application for a new permit is timely made, the present 
permit shall continue in effect pending final action with respect to 
such application.

(72 Stat. 1421, 1422; 26 U.S.C. 5712, 5713, 5721, 5722)

[T.D. 6871, 31 FR 50, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975]

                    Changes in Location and Premises



Sec. 44.108  Change in location within same region.

    Whenever an export warehouse proprietor contemplates changing the 
location of his warehouse within the same region, the proprietor shall, 
before commencing operations at the new location, make an application, 
to the regional director (compliance), on Form 2098 for an amended 
permit. The application shall be supported by an extension of coverage 
of the bond filed under this part, in accordance with the provisions of 
Sec. 44.126.

(72 Stat. 1421; 26 U.S.C. 5711, 5712)



Sec. 44.109  Change in address.

    Whenever any change occurs in the address, but not the location, of 
the warehouse of an export warehouse proprietor, as a result of action 
of local authorities, the proprietor shall, within 30 days of such 
change, make application on Form 2098 for an amended permit.

(72 Stat. 1421; 26 U.S.C. 5712)

[T.D. 6961, 33 FR 9492, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975]

[[Page 800]]



Sec. 44.110  Change in location to another region.

    Whenever an export warehouse proprietor contemplates changing the 
location of his warehouse to another region, he shall, before commencing 
operations at the new location, qualify as such a proprietor in the new 
region, in accordance with the applicable provisions of subpart D. The 
proprietor shall notify the regional director (compliance) of the region 
from which he is removing of his qualification in the new region, giving 
the address of the new location of his warehouse and the number of the 
permit issued to him in the new region, make a closing inventory and 
closing report, in accordance with the provisions of Secs. 44.146 and 
44.151, respectively, and surrender, with such inventory and report, the 
permit for his old location.

(72 Stat. 1421, 1422; 26 U.S.C. 5711, 5712, 5713, 5721, 5722)



Sec. 44.111  Change in export warehouse premises.

    Where an export warehouse is to be changed to an extent which will 
make inaccurate the description of the warehouse as set forth in the 
last application by the proprietor for permit, or the diagram, if any, 
furnished with such application, the proprietor shall first make 
application on Form 2098 for, and obtain, an amended permit. Such 
application shall describe the proposed change in the warehouse and 
shall be accompanied by a new diagram if required under Sec. 44.88.

(72 Stat. 1421; 26 U.S.C. 5712)

[T.D. 6961 33 FR 9492, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 44.112  Emergency premises.

    In cases of emergency, the regional director (compliance) may 
authorize, for a stated period, the temporary use of a place for the 
temporary storage of tobacco products, and cigarette papers and tubes, 
without making the application or furnishing the extension of coverage 
of bond required under Secs. 44.111 and 44.126, or the temporary 
separation of warehouse premises by means other than those specified in 
Sec. 44.89, where such action will not hinder the effective 
administration of this part, is not contrary to law, and will not 
jeopardize the revenue.

[T.D. 6871, 31 FR 50, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



          Subpart F--Bonds and Extensions of Coverage of Bonds

    Source: 25 FR 4718, May 28, 1960, unless otherwise noted. 
Redesignated at 40 FR 16835, Apr. 15, 1975.



Sec. 44.121  Corporate surety.

    (a) Surety bonds required under the provisions of this part may be 
given only with corporate sureties holding certificates of authority 
from the Secretary of the Treasury as acceptable sureties on Federal 
bonds. Limitations concerning corporate sureties are prescribed by the 
Secretary in Treasury Department Circular No. 570, as revised (see 
paragraph (c) of this section). The surety shall have no interest 
whatever in the business covered by the bond.
    (b) Each bond and each extension of coverage of bond shall at the 
time of filing be accompanied by a power of attorney authorizing the 
agent or officer who executed the bond to so act on behalf of the 
surety. The regional director (compliance) who is authorized to approve 
the bond may, whenever he deems it necessary, require additional 
evidence of the authority of the agent or officer to execute the bond or 
extension of coverage of bond. The power of attorney shall be prepared 
on a form provided by the surety company and executed under the 
corporate seal of the company. If the power of attorney submitted is 
other than a manually signed document, it shall be accompanied by a 
certificate of its validity.
    (c) Treasury Department Circular No. 570 (Companies Holding 
Certificates of Authority as Acceptable Sureties on Federal Bonds and as 
Acceptable Reinsuring Companies) is published in the Federal Register 
annually as of the first workday in July. As they occur, interim 
revisions of the circular are published in the Federal Register. Copies 
may be obtained from the Audit Staff, Bureau of Government Financial

[[Page 801]]

Operations, Department of the Treasury, Washington, DC 20226.

(July 30, 1947, ch. 390, 61 Stat. 648, as amended (6 U.S.C. 6, 7); sec. 
202, Pub. L. 85-859, 72 Stat. 1421, as amended (26 U.S.C. 5711))

[T.D. ATF-92, 46 FR 46923, Sept. 23, 1981]



Sec. 44.122  Deposits of bonds, notes, or obligations in lieu of corporate surety.

    Bonds or notes of the United States, or other obligations which are 
unconditionally guaranteed as to both interest and principal by the 
United States, may be pledged and deposited by the export warehouse 
proprietor as security in connection with bond to cover his operations, 
in lieu of the corporate surety, in accordance with the provisions of 
Treasury Department Circular No. 154, revised (31 CFR part 225). Such 
bonds or notes which are nontransferable, or the pledging of which will 
not be recognized by the Treasury Department, are not acceptable as 
security in lieu of corporate surety.

(72 Stat. 1421, 61 Stat. 650; 26 U.S.C. 5711, 6 U.S.C. 15)



Sec. 44.123  Amount of bond.

    The amount of the bond filed by the export warehouse proprietor, as 
required by Sec. 44.86, shall be not less than the estimated amount of 
tax which may at any time constitute a charge against the bond: 
Provided, That the amount of any such bond (or the total amount where 
original and strengthening bonds are filed) shall not exceed $200,000 
nor be less than $1,000. The charge against such bond shall be subject 
to increase upon receipt of tobacco products, and cigarette papers and 
tubes into the export warehouse and to decrease as satisfactory evidence 
of exportation, or satisfactory evidence of such other disposition as 
may be used as the lawful basis for crediting such bond, is received by 
the regional director (compliance) with respect to such articles 
transferred or removed. When the limit of liability under a bond given 
in less than the maximum amount has been reached, no additional 
shipments shall be received into the warehouse until a strengthening or 
superseding bond is filed, as required by Sec. 44.124 or Sec. 44.125.

(72 Stat. 1421, as amended; 26 U.S.C. 5711)

[T.D. 6871, 31 FR 50, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 44.124  Strengthening bond.

    Where the regional director (compliance) determines that the amount 
of the bond, under which an export warehouse proprietor is currently 
carrying on business, no longer adequately protects the revenue, and 
such bond is in an amount of less than $200,000, the regional director 
(compliance) administrator may require the proprietor to file a 
strengthening bond in an appropriate amount with the same surety as that 
on the bond already in effect, in lieu of a superseding bond to cover 
the full liability on the basis of Sec. 44.123. The regional director 
(compliance) shall refuse to approve any strengthening bond where any 
notation is made thereon which is intended or which may be construed as 
a release of any former bond, or as limiting the amount of either bond 
to less than its full amount.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 44.125  Superseding bond.

    An export warehouse proprietor shall file a new bond to supersede 
his current bond, immediately when (a) the corporate surety on the 
current bond becomes insolvent, (b) the regional director (compliance) 
approves a request from the surety on the current bond to terminate his 
liability under the bond, (c) payment of any liability under a bond is 
made by the surety thereon, or (d) the regional director (compliance) 
considers such a superseding bond necessary for the protection of the 
revenue.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 44.126  Extension of coverage of bond.

    An extension of the coverage of any bond filed under this part shall 
be manifested on Form 2105 by the export warehouse proprietor and by the 
surety on the bond with the same formality

[[Page 802]]

and proof of authority as required for the execution of the bond.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 44.127  Approval of bond and extension of coverage of bond.

    No person shall commence operations under any bond, nor extend his 
operations, until he receives from the regional director (compliance) 
notice of his approval of the bond or of an appropriate extension of 
coverage of the bond required under this part.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 44.128  Termination of liability of surety under bond.

    The liability of a surety on any bond required by this part shall be 
terminated only as to operations on and after the effective date of a 
superseding bond, or the date of approval of the discontinuance of 
operations by the export warehouse proprietor, or otherwise in 
accordance with the termination provisions of the bond. The surety shall 
remain bound in respect of any liability for unpaid taxes, penalties, 
and interest, not in excess of the amount of the bond, incurred by the 
proprietor while the bond is in force.

(72 Stat. 1421; 26 U.S.C. 5711)



Sec. 44.129  Release of bonds, notes, and obligations.

    (a) Bonds, notes, and other obligations of the United States, 
pledged and deposited as security in connection with bonds required by 
this part, shall be released only in accordance with the provisions of 
Treasury Department Circular No. 154 (31 CFR Part 225--Acceptance of 
Bonds, Notes or Other Obligations Issued or Guaranteed by the United 
States as Security in Lieu of Surety or Sureties on Penal Bonds). When 
the regional director (compliance) is satisfied that it is no longer 
necessary to hold such security, he shall fix the date or dates on which 
a part or all of such security may be released. At any time prior to the 
release of such security, the regional director (compliance) may, for 
proper cause, extend the date of release of such security for such 
additional length of time as in his judgment may be appropriate.
    (b) Treasury Department Circular No. 154 is periodically revised and 
contains the provisions of 31 CFR part 225 and the forms prescribed in 
31 CFR part 225. Copies of the circular may be obtained from the Audit 
Staff, Bureau of Government Financial Operations, Department of the 
Treasury, Washington, DC 20226.

(Sec. 202, Pub. L. 85-859, 72 Stat. 1421 (26 U.S.C. 5711); July 30, 
1947, ch. 390, 61 Stat. 650 (6 U.S.C. 15))

[T.D. ATF-92, 46 FR 46923, Sept. 23, 1981; 46 FR 48644, Oct. 2, 1981]



          Subpart G--Operations by Export Warehouse Proprietors

    Source: 25 FR 4719, May 28, 1960, unless otherwise noted. 
Redesignated at 40 FR 16835, Apr. 15, 1975.



Sec. 44.141  Sign.

    Every export warehouse proprietor shall place and keep, on the 
outside of the building in which his warehouse is located, or at the 
entrance of his warehouse, where it can be plainly seen, a sign, in 
plain and legible letters, exhibiting the name under which he operates 
and (a) the type of business (``Export Warehouse Proprietor'') or (b) 
the number of the permit issued to the export warehouse proprietor under 
this part.



Sec. 44.142  Records.

    Every export warehouse proprietor must keep in such warehouse 
complete and concise records, containing the:
    (a) Number of containers;
    (b) Unit type (e. g., cartons, cases);
    (c) Kind of articles (e. g., small cigarettes);
    (d) Name of manufacturer and brand; and,
    (e) Quantity of tobacco products, cigarette papers and tubes 
received, removed, transferred, destroyed, lost or returned to 
manufacturers or to customs warehouse proprietors. In addition to such 
records, the export warehouse proprietor shall retain a copy of each 
Form 5200.14 received from a manufacturer, another export warehouse 
proprietor, or customs warehouse proprietor, from whom tobacco products 
and cigarette papers and tubes are received and a copy of each Form 
5200.14

[[Page 803]]

covering the tobacco products, and cigarette papers and tubes removed 
from the warehouse. The entries for each day in the records maintained 
or kept under this section shall be made by the close of the business 
day following that on which the transactions occur. No particular form 
of records is prescribed, but the information required shall be readily 
ascertainable. The records and copies of Form 5200.14 shall be retained 
for 3 years following the close of the calendar year in which the 
shipments were received or removed and shall be made available for 
inspection by any ATF officer upon request.


(Approved by the Office of Management and Budget under control number 
1512-0367)

(72 Stat. 1423, as amended; 26 U.S.C. 5741)

[T.D. ATF-421, 64 FR 71925, Dec. 22, 1999]

                               Inventories



Sec. 44.143  General.

    (a) Every export warehouse proprietor shall at the times specified 
in this subpart make a true and accurate inventory of products held on 
ATF Form 5220.3 (3373). This inventory must be submitted to the Regional 
Director (Compliance), and must specify the following:
    (1) The number of small cigars, large cigars, small cigarettes, 
large cigarettes, cigarette papers, and cigarette tubes held by such 
proprietor at the times specified in this subpart.
    (2) The pounds and ounces of chewing tobacco, snuff, pipe tobacco 
and roll-your-own tobacco held by such proprietor at the times specified 
in this subpart.
    (b) This inventory shall be subject to verification by an ATF 
officer. A copy of each inventory shall be retained by the export 
warehouse proprietor for 3 years following the close of the calendar 
year in which the inventory is made and shall be made available for 
inspection by any ATF officer upon request.

[T.D. ATF-289, 54 FR 48841, Nov. 27, 1989, as amended by T.D. ATF-421, 
64 FR 71925, Dec. 22, 1999; T.D. ATF-424, 64 FR 71933, Dec. 22, 1999]



Sec. 44.144  Opening.

    An opening inventory shall be made by the export warehouse 
proprietor at the time of commencing business. The date of commencing 
business under this part shall be the effective date indicated on the 
permit issued under Sec. 44.93. A similar inventory shall be made by the 
export warehouse proprietor when he files a superseding bond. The date 
of such inventory shall be the effective date of such superseding bond 
as indicated thereon by the regional director (compliance).

(72 Stat. 1422; 26 U.S.C. 5721)



Sec. 44.145  Special.

    A special inventory shall be made by the export warehouse proprietor 
whenever required by any ATF officer.

(72 Stat. 1422; 26 U.S.C. 5721)



Sec. 44.146  Closing.

    A closing inventory shall be made by the export warehouse proprietor 
when he transfers ownership, changes his location to another region, or 
concludes business. Where the proprietor transfers ownership the closing 
inventory shall be made as of the day preceding the date of the opening 
inventory of the successor.

(72 Stat. 1422; 26 U.S.C. 5721)

                                 Reports



Sec. 44.147  General.

    Every export warehouse proprietor shall make a report on Form 
5220.4, to the regional director (compliance), of all tobacco products, 
and cigarette papers and tubes on hand, received, removed, transferred, 
and lost or destroyed. Such report shall be made at the times specified 
in this subpart and shall be made whether or not any operations or 
transactions occurred during the period covered by the report. A copy of 
each report shall be retained by the export warehouse proprietor at his 
warehouse for 3 years following the close of the calendar year covered 
in

[[Page 804]]

such reports, and made available for inspection by any ATF officer upon 
his request.

(72 Stat. 1422; 26 U.S.C. 5722)

[T.D. 6871, 31 FR 51, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975; T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. ATF-243, 51 FR 
43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71925, Dec. 22, 1999; T.D. ATF-
424, 64 FR 71933, Dec. 22, 1999]



Sec. 44.148  Opening.

    An opening report, covering the period from the date of the opening 
inventory, or inventory made in connection with a superseding bond, to 
the end of the month, shall be made on or before the 20th day following 
the end of the month in which the business was commenced.

(72 Stat. 1422; 26 U.S.C. 5722)



Sec. 44.149  Monthly.

    A report for each full month shall be made on or before the 20th day 
following the end of the month covered in the report.

(72 Stat. 1422; 26 U.S.C. 5722)



Sec. 44.150  Special.

    A special report, covering the unreported period to the day 
preceding the date of any special inventory required by an ATF officer, 
shall be made with such inventory. Another report, covering the period 
from the date of such inventory to the end of the month, shall be made 
on or before the 20th day following the end of the month in which the 
inventory was made.

(72 Stat. 1422; 26 U.S.C. 5722)



Sec. 44.151  Closing.

    A closing report, covering the period from the first of the month to 
the date of the closing inventory, or the day preceding the date of an 
inventory made in connection with a superseding bond, shall be made with 
such inventory.

(72 Stat. 1422; 26 U.S.C. 5722)

                                 Claims



Sec. 44.152  Claim for remission of tax liability.

    Remission of the tax liability on tobacco products, and cigarette 
papers and tubes may be extended to the export warehouse proprietor 
liable for the tax where such articles in bond are lost (otherwise than 
by theft) or destroyed, by fire, casualty, or act of God, while in the 
possession or ownership of such proprietor. Where articles are so lost 
or destroyed the proprietor shall report promptly such fact, and the 
circumstances, to the regional director (compliance) for the region in 
which the warehouse is located. If the proprietor wishes to be relieved 
of the tax liability thereon he shall also prepare a claim on Form 
5620.8, in duplicate, setting forth the nature, date, place, and extent 
of the loss or destruction. Both copies of the claim, accompanied by 
such evidence as is necessary to establish to the satisfaction of the 
regional director (compliance) that the claim is valid, shall be filed 
with the regional director (compliance) for the region in which the 
warehouse is located. Upon action on the claim by the regional director 
(compliance) he will return the copy of Form 5620.8 to the proprietor as 
notice of such action, which copy shall be retained by the proprietor 
for 3 years following the close of the calendar year in which the claim 
is filed.

(72 Stat. 1419, as amended; 26 U.S.C. 5705)

[T.D. 6961, 33 FR 9492, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71925, Dec. 22, 
1999]



Sec. 44.153  Claim for abatement of assessment.

    A claim for abatement of the unpaid portion of the assessment of any 
tax on tobacco products, and cigarette papers and tubes, or any 
liability in respect of such tax, alleged to be excessive in amount, 
assessed after the expiration of the period of limitation applicable 
thereto, or erroneously or illegally assessed, shall be filed on Form 
5620.8 with the regional director (compliance). Such claim shall set 
forth the reasons relied upon for the allowance

[[Page 805]]

of the claim and shall be supported by such evidence as is necessary to 
establish to the satisfaction of the regional director (compliance) that 
the claim is valid.

(68A Stat. 792; 26 U.S.C. 6404)

[T.D. 6871, 31 FR 51, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-251, 52 FR 19341, May 22, 
1987; T.D. ATF-421, 64 FR 71925, Dec. 22, 1999]



Sec. 44.154  Claim for refund of tax.

    The taxes paid on tobacco products, and cigarette papers and tubes 
may be refunded (without interest) to an export warehouse proprietor on 
proof satisfactory to the regional director (compliance) that the 
claimant proprietor paid the tax on such articles which were after 
taxpayment lost (otherwise than by theft) or destroyed, by fire, 
casualty, or act of God, while in the possession or ownership of such 
export warehouse proprietor, or withdrawn by him from the market. Any 
claim for refund under this section shall be prepared on Form 5620.8, in 
duplicate, and shall include a statement that the tax imposed by 26 
U.S.C. 7652 or chapter 52, was paid in respect to the articles covered 
by the claim, and that the articles were lost, destroyed, or withdrawn 
from the market within 6 months preceding the date the claim is filed. 
The claim shall be filed with the regional director (compliance) for the 
region in which the tax was paid and shall be supported by such evidence 
as is necessary to establish to the satisfaction of the regional 
director (compliance) that the claim is valid. The duplicate of the 
claim shall be retained by the export warehouse proprietor for 3 years 
following the close of the calendar year in which the claim is filed. 
Where an export warehouse proprietor has paid the tax on tobacco 
products, or cigarette papers or tubes, he may file claim for refund of 
an overpayment of tax under subpart A of part 46 of this chapter if, at 
the time the tax was paid, these articles had been exported, destroyed, 
or otherwise disposed of in such a manner that tax was not due and 
payable.

(68A Stat. 791, 72 Stat. 9, 1419, as amended; 26 U.S.C. 6402, 6423, 
5705)

[T.D. 6961, 33 FR 9492, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55856, Sept. 28, 1979; T.D. 
ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 
1986; T.D. ATF-251, 52 FR 19341, May 22, 1987; T.D. ATF-421, 64 FR 
71925, Dec. 22, 1999; T.D. ATF-457, 66 FR 32220, June 14, 2001]



         Subpart H--Suspension and Discontinuance of Operations



Sec. 44.161  Discontinuance of operations.

    Every export warehouse proprietor who desires to discontinue 
operations and close out his warehouse shall dispose of all cigars, 
cigarettes, and cigarette papers and tubes on hand, in accordance with 
this part, making a closing inventory and closing report, in accordance 
with the provisions of Secs. 44.146 and 44.151, respectively, and 
surrender, with such inventory and report, his permit to the regional 
director (compliance) as notice of such discontinuance, in order that 
the regional director (compliance) may terminate the liability of the 
surety on the bond of the export warehouse proprietor.

(72 Stat. 1422; 26 U.S.C. 5721, 5722)

[T.D. 6871, 31 FR 51, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 44.162  Suspension and revocation of permit.

    Where the regional director (compliance) has reason to believe that 
an export warehouse proprietor has not in good faith complied with the 
provisions of 26 U.S.C. chapter 52, and regulations thereunder, or with 
any other provision of 26 U.S.C. with intent to defraud, or has violated 
any condition of his permit, or has failed to disclose any material 
information required or made any material false statement in the 
application for permit, or has failed to maintain his premises, in such 
manner as to protect the revenue, the regional director (compliance) 
shall issue an order, stating the facts charged, citing such export 
warehouse proprietor to show cause why his permit should not

[[Page 806]]

be suspended or revoked after hearing thereon in accordance with part 71 
of this chapter, which part (including the provisions relating to 
appeals) is made applicable to such proceedings. If the hearing 
examiner, or the Director, on appeal, decides the permit should be 
suspended, for such time as to him seems proper, or be revoked, the 
regional director (compliance) shall by order give effect to such 
decision.

(72 Stat. 1421; 26 U.S.C. 5713)

[25 FR 4720, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55856, Sept. 28, 1979; T.D. ATF-463, 
66 FR 42734, Aug. 15, 2001]

Subpart I [Reserved]



Subpart J--Removal of Shipments of Tobacco Products and Cigarette Papers 
       and Tubes by Manufacturers and Export Warehouse Proprietors

                         Packaging Requirements



Sec. 44.181  Packages.

    All tobacco products, and cigarette papers and tubes will, before 
removal or transfer under this subpart, be put up by the manufacturer in 
packages which shall bear the label or notice, tax classification, and 
mark, as required by this subpart. For purposes of this subpart, the 
package does not include the cellophane wrapping material.

(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 (26 U.S.C. 5723))

[T.D. ATF-421, 64 FR 71925, Dec. 22, 1999]



Sec. 44.182  Lottery features.

    No certificate, coupon, or other device purporting to be or to 
represent a ticket, chance, share, or an interest in, or dependent on, 
the event of a lottery shall be contained in, attached to, or stamped, 
marked, written, or printed on any package of tobacco products, or 
cigarette papers or tubes.

(72 Stat. 1422; 26 U.S.C. 5723, 18 U.S.C. 1301)

[T.D. 6871, 31 FR 51, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 44.183  Indecent or immoral material.

    No indecent or immoral picture, print, or representation shall be 
contained in, attached to, or stamped, marked, written, or printed on 
any package of tobacco products, or cigarette papers or tubes.

(72 Stat. 1422; 26 U.S.C. 5723)

[T.D. 6871, 31 FR 51, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 44.184  Mark.

    Every package of tobacco products shall, before removal from the 
factory under this subpart, have adequately imprinted thereon, or on a 
label securely affixed thereto, a mark as specified in this section. The 
mark may consist of the name of the manufacturer removing the product 
and the location (by city and State) of the factory from which the 
products are to be so removed, or may consist of the permit number of 
the factory from which the products are to be so removed. Any trade name 
of the manufacturer approved as provided in Sec. 40.65 of this chapter 
may be used in the mark as the name of the manufacturer.) As an 
alternative, where tobacco products are both packaged and removed by the 
same manufacturer, either at the same or different factories, the mark 
may consist of the name of such manufacturer if the factory where 
package is identified on or in the package by a means approved by the 
Director. Before using the alternative, the manufacturer shall notify 
the Director in writing of the name to be used as the name of the 
manufacturer and the means to be used for identifying the factory where 
packaged. If approved by him the Director shall return approved copies 
of the notice to the manufacturer. A copy of the approved notice shall 
be retained as part of the factory records at each of the factories 
operated by the manufacturer.

(72 Stat. 1422; 26 U.S.C. 5723)

[T.D. 6871, 31 FR 51, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-460, 66 FR 39093, July 27, 
2001]

[[Page 807]]



Sec. 44.185  Label or notice.

    Every package of tobacco products shall, before removal from the 
factory under this subpart, have adequately imprinted thereon, or on a 
label securely affixed thereto, the words ``Tax-exempt. For use outside 
U.S.'' or the words ``U.S. Tax-exempt. For use outside U.S.'' except 
where a stamp, sticker, or notice, required by a foreign country or a 
possession of the United States, which identifies such country or 
possession, is so imprinted or affixed.

(26 U.S.C. 5704, 5723)

[T.D. 6871, 31 FR 52, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-465, 66 FR 45618, Aug. 29, 
2001]



Sec. 44.186  Tax classification for cigars.

    Before removal from a factory under this subpart, every package of 
cigars shall have adequately imprinted on it, or on a label securely 
affixed to it--
    (a) The designation ``cigars'';
    (b) The quantity of cigars contained in the package; and
    (c) For small cigars, the classification of the product for tax 
purposes; (i.e., either ``small'' or ``little'').

(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 (26 U.S.C. 5723))

[T.D. ATF-80, 46 FR 18312, Mar. 24, 1981]



Sec. 44.187  Shipping containers.

    Each shipping case, crate, or other container in which tobacco 
products, or cigarette papers or tubes are to be shipped or removed, 
under this part, shall bear a distinguishing number, such number to be 
assigned by the manufacturer or export warehouse proprietor. Removals of 
tobacco products, and cigarette papers and tubes from an export 
warehouse shall be made, insofar as practicable, in the same containers 
in which they were received from the factory.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 52, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]

                         Consignment of Shipment



Sec. 44.188  General.

    Tobacco products, and cigarette papers and tubes transferred or 
removed from a factory or an export warehouse, under this part, without 
payment of tax, shall be consigned as required by this subpart.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 52, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 44.189  Transfers between factories and export warehouses.

    Where tobacco products, and cigarette papers and tubes are 
transferred, without payment of tax, from a factory to an export 
warehouse or between export warehouses, such articles shall be consigned 
to the export warehouse proprietor to whom such articles are to be 
delivered.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 52, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 44.190  Return of shipment to a manufacturer or customs warehouse proprietor.

    Where tobacco products, and cigarette papers and tubes are returned 
by an export warehouse proprietor to a manufacturer or where cigars are 
so returned to a customs warehouse proprietor, such articles shall be 
consigned to the manufacturer or customs warehouse proprietor to whom 
the shipment is to be returned.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 52, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 44.191  To officers of the armed forces for subsequent exportation.

    Where tobacco products, and cigarette papers and tubes are removed 
from a factory or an export warehouse for delivery to officers of the 
armed

[[Page 808]]

forces of the United States in this country for subsequent shipment to, 
and use by, the armed forces outside the United States, the manufacturer 
or export warehouse proprietor shall consign such articles to the 
receiving officer at the armed forces base or installation, in this 
country, to which they are to be delivered.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 52, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 44.192  To vessels and aircraft for shipment to noncontiguous foreign countries and possessions of the United States.

    Where tobacco products, and cigarette papers and tubes are removed 
from a factory or an export warehouse, for direct delivery to a vessel 
or aircraft for transportation to a noncontiguous foreign country, 
Puerto Rico, the Virgin Islands, or a possession of the United States, 
the manufacturer or export warehouse proprietor shall consign the 
shipment directly to the vessel or aircraft, or to his agent at the port 
for delivery to the vessel or aircraft.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 52, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 44.193  To a Federal department or agency.

    Where tobacco products, and cigarette papers and tubes are removed 
from a factory or an export warehouse and are destined for ultimate 
delivery in a noncontiguous foreign country, Puerto Rico, the Virgin 
Islands, or a possession of the United States, but the shipment is to be 
delivered in the United States to a Federal department or agency, or to 
an authorized dispatch agent, transportation officer, or port director 
of such a department or agency for forwarding on to the place of 
destination of the shipment, the manufacturer or export warehouse 
proprietor shall consign the shipment to the Federal department or 
agency, or to the proper dispatch agent, transportation officer, or port 
director of such department or agency.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 52, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28088, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 44.194  To district director of customs for shipment to contiguous foreign countries.

    Where tobacco products, or cigarette papers or tubes are removed 
from a factory or an export warehouse for export to a contiguous foreign 
country, the manufacturer or export warehouse proprietor shall consign 
the shipment to the district director of customs at the border or other 
port of exit.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6961, 33 FR 9492, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 44.195  To Government vessels and aircraft for consumption as supplies.

    Where tobacco products, and cigarette papers and tubes are removed 
from a factory or an export warehouse for delivery to a vessel or 
aircraft engaged in an activity for the Government of the United States 
or a foreign government, for consumption as supplies beyond the 
jurisdiction of the internal revenue laws of the United States, the 
manufacturer or export warehouse proprietor shall consign the shipment 
to the proper officer on board the vessel or aircraft to which the 
shipment is to be delivered.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 52, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 44.196  To district director of customs for consumption as supplies on commercial vessels and aircraft.

    Where tobacco products, or cigarette papers or tubes are removed 
from a factory or an export warehouse for consumption as supplies beyond 
the jurisdiction of the internal revenue laws of

[[Page 809]]

the United States, the manufacturer or export warehouse proprietor shall 
consign the shipment to the district director of customs at the port at 
which the shipment is to be laden.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6961, 33 FR 9493, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 44.196a  To a foreign-trade zone.

    Where tobacco products, and cigarette papers and tubes are removed 
from a factory or an export warehouse for delivery to a foreign-trade 
zone, under zone restricted status for the purpose of exportation or 
storage, the manufacturer or export warehouse proprietor shall consign 
the shipment to the Zone Operator in care of the customs officer in 
charge of the zone.

(48 Stat. 999, as amended, 72 Stat. 1418, as amended; 19 U.S.C. 81c, 26 
U.S.C. 5704)

[T.D. 6871, 31 FR 53, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 44.197  For export by parcel post.

    Tobacco products, and cigarette papers and tubes removed from a 
factory or an export warehouse, for export by parcel post to a person in 
a foreign country, Puerto Rico, the Virgin Islands, or a possession of 
the United States, shall be addressed and consigned to such person when 
the articles are deposited in the mails. Waiver of his right to withdraw 
such articles from the mails shall be stamped or written on each 
shipping container and be signed by the manufacturer or export warehouse 
proprietor making the shipment.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 53, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]

                      Notice of Removal of Shipment



Sec. 44.198  Preparation.

    For each shipment of tobacco products, and cigarette papers and 
tubes transferred or removed from his factory, under bond and this part, 
the manufacturer shall prepare a notice of removal, Form 5200.14, and 
for each shipment of tobacco products, and cigarette papers and tubes 
transferred or removed from his export warehouse, under bond and this 
part, the export warehouse proprietor shall prepare a notice of removal, 
Form 5200.14. Each such notice shall be given a serial number by the 
manufacturer or export warehouse proprietor in a series beginning with 
number 1, with respect to the first shipment removed from the factory or 
export warehouse under this part and commencing again with number 1 on 
January 1 of each year thereafter.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 53, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71925, Dec. 22, 
1999]



Sec. 44.199  Disposition.

    After actual removal from his factory or export warehouse of the 
shipment described on the notice of removal, Form 5200.14, the 
manufacturer or export warehouse proprietor shall, except where the 
shipment is to be exported by parcel post, promptly forward one copy of 
the notice of removal to the regional director (compliance) for the 
region in which is located the factory or warehouse from which the 
shipment is removed. A copy of each such notice shall be retained by the 
manufacturer or export warehouse proprietor as a part of his records, 
for 3 years following the close of the calendar year in which the 
shipment was removed and shall be made available for inspection by any 
ATF officer upon his request. The manufacturer or export warehouse 
proprietor shall dispose

[[Page 810]]

of the other copies of each notice of removal as required by this 
subpart.

(72 Stat. 1418; 26 U.S.C. 5704)

[25 FR 4722, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975; 
T.D. ATF-421, 64 FR 71926, Dec. 22, 1999]



Sec. 44.200  Transfers between factories and export warehouses.

    Where tobacco products, and cigarette papers and tubes are 
transferred from a factory to an export warehouse or between export 
warehouses, the manufacturer or export warehouse proprietor making the 
shipment shall forward three copies of the notice of removal, Form 
5200.14 to the export warehouse proprietor to whom the shipment is 
consigned. Immediately upon receipt of the shipment at his warehouse, 
the export warehouse proprietor shall properly execute the certificate 
of receipt on each copy of the notice of removal, noting thereon any 
discrepancy; return one copy to the manufacturer or export warehouse 
proprietor making the shipment for filing with his regional director 
(compliance); retain one copy at his warehouse as a part of his records; 
and file the remaining copy with his report, required by Sec. 44.147.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 53, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71926, Dec. 22, 
1999]



Sec. 44.201  Return to manufacturer or customs warehouse proprietor.

    Where tobacco products, and cigarette papers and tubes are removed 
from an export warehouse for return to the factory, or cigars are 
removed from such a warehouse for return to a customs warehouse, the 
export warehouse proprietor making the shipment shall forward two copies 
of the notice of removal, Form 5200.14, to the manufacturer or customs 
warehouse proprietor to whom the shipment is consigned. Immediately upon 
receipt of the shipment at his factory or warehouse, the manufacturer or 
customs warehouse proprietor shall properly execute the certificate of 
receipt on both copies of the notice of removal, noting thereon any 
discrepancy, and return one copy to the export warehouse proprietor 
making the shipment for filing with his regional director (compliance). 
The other copy of the notice of removal shall be retained by the 
manufacturer or customs warehouse proprietor, as a part of his records, 
for 3 years following the close of the calendar year in which the 
shipment was received and shall be made available for inspection by any 
ATF officer upon his request.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 53, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71926, Dec. 22, 
1999]



Sec. 44.202  To officers of the armed forces for subsequent exportation.

    Where tobacco products, and cigarette papers and tubes are removed 
from a factory or an export warehouse for delivery to officers of the 
armed forces of the United States in this country for subsequent 
shipment to, and use by, the armed forces outside the United States, the 
manufacturer or export warehouse proprietor making the removal shall 
forward a copy of the notice of removal, Form 5200.14, to the officer at 
the base or installation authorized to receive the articles described on 
the notice of removal. Upon execution by the armed forces receiving 
officer of the certificate of receipt on the copy of the notice of 
removal, he shall return such copy to the manufacturer or export 
warehouse proprietor making the shipment for filing with his regional 
director (compliance).

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 53, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71926, Dec. 22, 
1999]



Sec. 44.203  To noncontiguous foreign countries and possessions of the United States.

    Where tobacco products, or cigarette papers or tubes are removed 
from a factory or an export warehouse for direct delivery to a vessel or 
aircraft for transportation to a noncontiguous foreign country, Puerto 
Rico, the Virgin Islands, or a possession of the United

[[Page 811]]

States, the manufacturer or export warehouse proprietor making the 
shipment shall file two copies of the notice of removal, Form 5200.14, 
with the office of the district director of customs at the port where 
the shipment is to be laden. Such copies of the notice of removal should 
be filed with the related shipper's export declaration, Commerce Form 
7525-V. In the event the copies of the notice of removal are not filed 
with the shipper's export declaration, when the copies of the notice are 
filed with the district director of customs they shall show all 
particulars necessary to enable that officer to associate the notice 
with the related shipper's export declaration and any other documents 
filed with his office in connection with the shipment. After the vessel 
or aircraft on which the shipment has been laden clears or departs from 
the port of lading the customs authority shall execute the certificate 
of exportation on both copies of the notice of removal, retain one copy 
for his records, and deliver or transmit the other copy to the 
manufacturer or export warehouse proprietor making the shipment for 
filing with his regional director (compliance).

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6961, 33 FR 9493, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71926, Dec. 22, 
1999]



Sec. 44.204  To a Federal department or agency.

    Where tobacco products, and cigarette papers and tubes are removed 
from a factory or an export warehouse and are destined for ultimate 
delivery in a noncontiguous foreign country, Puerto Rico, the Virgin 
Islands, or a possession of the United States, but the shipment is to be 
delivered to a Federal department or agency, or to an authorized 
dispatch agent, transportation officer, or port director of such a 
department or agency for forwarding on to the place of destination of 
the shipment, the manufacturer or export warehouse proprietor making the 
shipment shall furnish a copy of the notice of removal, Form 5200.14, to 
the Federal department or agency, or an officer thereof at the port, 
receiving the shipment for ultimate transmittal to the place of 
destination, in order that such department, agency, or officer can 
properly execute the certificate of receipt on such notice to evidence 
receipt of the shipment for transmittal to a place beyond the 
jurisdiction of the internal revenue laws of the United States. After 
completing such certificate, the Federal department, agency, or officer 
shall return the copy of the notice of removal, so executed, to the 
manufacturer or export warehouse proprietor making the shipment for 
filing with his regional director (compliance).

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 53, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71926, Dec. 22, 
1999]



Sec. 44.205  To contiguous foreign countries.

    (a) Where tobacco products, or cigarette papers or tubes are removed 
from a factory or an export warehouse for export to a contiguous foreign 
country, the manufacturer or export warehouse proprietor making the 
shipment shall--
    (1) Furnish to the district director of Customs at the port of exit 
two copies of the notice of removal, Form 5200.14, together with the 
related shipper's export declaration, Commerce Form 7525-V (if 
required); and,
    (2) If copies of the notice of removal are not filed with the 
shippers export declaration, or if a shipment is for the armed forces of 
the United States in the contiguous foreign country and a shipper's 
export declaration is not required, show all the information on the 
notice of removal when it is filed so that the Customs officer is able 
to associate the notice with the related shipper's export declaration 
(if any) or other documents filed with Customs for the shipment.
    (b) When a shipment has been cleared by Customs from the United 
States, and when the Customs officer at the port of exit is satisfied 
that the products have departed from the United States, he shall--

[[Page 812]]

    (1) Complete the certificate of exportation on both copies of the 
notice of removal;
    (2) Retain one copy of the notice of removal for his records; and,
    (3) Return the other copy to the manufacturer or export warehouse 
proprietor making the shipment for filing with his regional director 
(compliance).
    (c) The Customs officer may, when he considers it necessary to 
establish that the merchandise was actually exported, require a landing 
certificate before he completes the certificate of exportation specified 
in paragraph (b)(1) of this section. If practical, the Customs officer 
will give advance notice to the manufacturer or export warehouse 
proprietor of the type of transactions for which a landing certificate 
will be required. However, failure to notify the manufacturer or 
proprietor in advance will not prevent the Customs officer from 
requiring a landing certificate for specific exportations when he 
considers it necessary to protect the revenue. In any case, the Customs 
officer will advise the manufacturer or proprietor before departure of 
the shipment from the United States as to those exports for which a 
landing certificate will be required.
    (d) The provisions of this section relating to landing certificates 
also apply when a Form 5200.14 is not required for each transaction (for 
example: When multiple exportations, individually documented by 
commercial records, are consolidated on a single Form 5200.14 pursuant 
to an approved alternate procedure under Sec. 44.72). The provisions 
apply to each transaction, regardless of the manner in which it is 
documented, unless specifically provided otherwise in the alternate 
procedure.

(Sec. 202, Pub. L. 85-859, 72 Stat. 1418; (26 U.S.C. 5704); Sec. 622, 
Act of June 17, 1930, 49 Stat. 759 (19 U.S.C. 1622))

[T.D. ATF-52, 43 FR 59287, Dec. 19, 1978, as amended by T.D. ATF-232, 51 
FR 28089, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. 
ATF-421, 64 FR 71926, Dec. 22, 1999]



Sec. 44.206  To Government vessels and aircraft for consumption as supplies.

    Where tobacco products, and cigarette papers and tubes are removed 
from a factory or an export warehouse for direct delivery to a vessel or 
aircraft, engaged in an activity for the Government of the United States 
or a foreign government, for consumption as supplies beyond the 
jurisdiction of the internal revenue laws of the United States, the 
manufacturer or export warehouse proprietor making the shipment shall 
forward a copy of the notice of removal, Form 5200.14, to the officer of 
the vessel or aircraft authorized to receive the shipment. Upon 
execution by the receiving officer of the vessel or aircraft of the 
certificate of receipt on the copy of the notice of removal, he shall 
return such copy to the manufacturer or export warehouse proprietor 
making the shipment for filing with his regional director (compliance).

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 54, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71926, Dec. 22, 
1999]



Sec. 44.207  To commercial vessels and aircraft for consumption as supplies.

    Where tobacco products, or cigarette papers or tubes are removed 
from a factory or an export warehouse for delivery to a vessel or 
aircraft entitled to receive such articles for consumption as supplies 
beyond the jurisdiction of the internal revenue laws of the United 
States, the manufacturer or export warehouse proprietor making the 
shipment shall file two copies of the notice of removal, Form 5200.14, 
with the district director of customs at the port where the shipment is 
to be laden in sufficient time to permit delivery of the two copies of 
the notice of removal to the customs officer who will inspect the 
shipment and supervise its lading. After inspection and lading of the 
shipment the customs officer shall note on the copies of the notice of 
removal any discrepancy between the shipment inspected and laden under 
his supervision

[[Page 813]]

and that described on the notice of removal or any limitation on the 
quantity to be laden; complete and sign the certificate of inspection 
and lading; and return both copies of the notice of removal to the 
district director of customs. The district director of customs shall 
execute the certificate of clearance on both copies of the notice of 
removal, retain one copy for his records, and forward the other copy to 
the manufacturer or export warehouse proprietor making the shipment for 
filing with his regional director (compliance). Where the vessel or 
aircraft does not clear from the port at which the shipment is laden, 
the customs officer supervising the lading of the shipment shall require 
the person on board the vessel or aircraft authorized to receive the 
shipment to execute the certificate of receipt on both copies of the 
notice of removal to indicate the trade or activity in which the vessel 
or aircraft is engaged.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6961, 33 FR 9493, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71926, Dec. 22, 
1999]



Sec. 44.207a  To a foreign-trade zone.

    Where tobacco products, and cigarette papers and tubes are removed 
from a factory or an export warehouse for delivery to a foreign-trade 
zone, under zone restricted status for the purpose of exportation or 
storage, the manufacturer or export warehouse proprietor making the 
shipment shall forward two copies of the notice of removal, Form 
5200.14, to the customs officer in charge of the zone. Upon receipt of 
the shipment, the customs officer shall execute the certificate of 
receipt on each copy of the form, noting thereon any discrepancy, retain 
one copy for his records, and forward the other copy to the manufacturer 
or export warehouse proprietor making the shipment for filing with his 
regional director (compliance).

(48 Stat. 999, as amended, 72 Stat. 1418, as amended; 19 U.S.C. 81c, 26 
U.S.C. 5704)

[T.D. 6871, 31 FR 54, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71926, Dec. 22, 
1999]



Sec. 44.208  For export by parcel post.

    Where tobacco products, and cigarette papers and tubes are removed 
from a factory or an export warehouse, for export by parcel post, the 
manufacturer or export warehouse proprietor shall present one copy of 
the notice of removal, Form 5200.14, together with the shipping 
containers, to the postal authorities with the request that the 
postmaster or his agent execute the certificate of mailing on the form. 
Where the manufacturer or export warehouse proprietor so desires, he may 
cover under one notice of removal all the merchandise removed under this 
part for export by parcel post which is delivered at one time to the 
postal service for that purpose. The manufacturer or export warehouse 
proprietor shall immediately file the receipted copy of the notice of 
removal with his regional director (compliance).

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 54, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71926, Dec. 22, 
1999]

                        Miscellaneous Provisions



Sec. 44.209  Diversion of shipment to another consignee.

    If, after removal of a shipment from a factory or an export 
warehouse, the manufacturer or export warehouse proprietor desires to 
divert the shipment to another consignee, he shall so notify his 
regional director (compliance). The manufacturer or export warehouse 
proprietor shall describe the shipment, set forth the serial number and 
date of the notice of removal under which the

[[Page 814]]

shipment was removed from his factory or export warehouse, and furnish 
the name and address of the new consignee, who shall comply with all 
applicable provisions of this part.

(72 Stat. 1418; 26 U.S.C. 5704)

[25 FR 4723, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975]



Sec. 44.210  Return of shipment to factory or export warehouse.

    A manufacturer or export warehouse proprietor may return to his 
factory or export warehouse, without internal revenue supervision when 
so authorized by the regional director (compliance), tobacco products, 
and cigarette papers and tubes previously removed therefrom, under this 
part, but not yet exported. The manufacturer or export warehouse 
proprietor shall, prior to returning the articles to his factory or 
export warehouse, make application to the regional director (compliance) 
for permission so to do, which application shall be accompanied by two 
copies of the notice of removal, Form 5200.14, under which the articles 
were originally removed. If less than the entire shipment is intended to 
be returned to the factory or export warehouse, the application shall 
set forth accurately the articles to be returned and shall show what 
disposition was made of the remainder of the original shipment and any 
other facts pertinent to such shipment. Where the regional director 
(compliance) approves the application, he shall so indicate by 
endorsement to that effect on each of the copies of the notice of 
removal, set forth the articles for which return is approved, and return 
both copies of the notice of removal to the manufacturer or export 
warehouse proprietor concerned. Upon receipt of the copies of the notice 
of removal bearing the endorsement of the regional director 
(compliance), the manufacturer or export warehouse proprietor shall 
return the articles to his factory or export warehouse, properly modify 
and execute the certificate of receipt on each copy of the notice of 
removal, return one such copy to the regional director (compliance), and 
retain the other copy as a part of his records.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 54, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71926, Dec. 22, 
1999]



Sec. 44.211  [Reserved]



Sec. 44.212  Delay in lading at port of exportation.

    If, on arrival of tobacco products, and cigarette papers and tubes 
at the port of exportation, the vessel or aircraft for which they are 
intended is not prepared to receive the articles, they may be properly 
stored at the port for not more than 30 days. In the event of any 
further delay, the facts shall be reported by the manufacturer or export 
warehouse proprietor to his regional director (compliance) and unless he 
approves an extension of time in which to effect lading and clearance of 
the shipment it must be returned to the factory or export warehouse.

[T.D. 6871, 31 FR 55, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1987; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 44.213  Destruction of tobacco products, and cigarette papers and tubes.

    Where an export warehouse proprietor desires to destroy any of the 
tobacco products, or cigarette papers or tubes stored in his warehouse, 
he shall notify the regional director (compliance) of the kind and 
quantity of such articles to be destroyed and the date on which he 
desires the destruction to take place in order that the regional 
director (compliance) may assign an ATF officer to inspect the articles 
and supervise their destruction. The export warehouse proprietor shall 
prepare a notice of removal, Form 5200.14, describing the articles to be 
destroyed. After witnessing the destruction of the articles, the ATF 
officer shall certify to their destruction on two copies of the notice 
of removal and return them to the export warehouse proprietor, who shall 
retain one copy for his

[[Page 815]]

records and file the other copy with his regional director (compliance).

[T.D. 6871, 31 FR 55, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-421, 64 FR 71926, Dec. 22, 
1999]



                       Subpart K--Drawback of Tax



Sec. 44.221  Application of drawback of tax.

    Allowance of drawback of tax shall apply only to tobacco products, 
and cigarette papers and tubes, on which tax has been paid, when such 
articles are shipped to a foreign country, Puerto Rico, the Virgin 
Islands, or a possession of the United States. Such drawback shall be 
allowed only to the person who paid the tax on such articles and who 
files claim and otherwise complies with the provisions of this subpart.

(72 Stat. 1419, 68A Stat. 908; 26 U.S.C. 5706, 7653)

[T.D. 6871, 31 FR 55, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 44.222  Claim.

    Claim for allowance of drawback of tax, under this subpart, shall be 
filed on Form 5620.7 with the regional director (compliance) for the 
region in which the tobacco products, and cigarette papers and tubes 
covered by the claim are held by the claimant. Such claim shall be so 
filed in sufficient time to permit the regional director (compliance) to 
detail an ATF officer to inspect the articles and supervise destruction 
of the stamps thereon denoting payment of tax or, where the tax has been 
paid by return, to supervise the affixture of a label or notice bearing 
the legend ``For Export With Drawback of Tax.'' Upon receipt of a claim 
supported by satisfactory bond, as required by this subpart, the 
regional director (compliance) shall assign an ATF officer to proceed to 
the place where the articles involved are held and there perform the 
functions required in Sec. 44.224.

(72 Stat. 1419; 26 U.S.C. 5706)

[T.D. 6871, 31 FR 55, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-424, 64 FR 71933, Dec. 22, 
1999]



Sec. 44.223  Drawback bond.

    Each claim for allowance of drawback of tax, under this subpart, 
shall be accompanied by a bond, Form 2148, satisfactory to the regional 
director (compliance) with whom the claim is filed. Such bond shall be 
in an amount not less than the amount of tax for which drawback is 
claimed, conditioned that the claimant shall furnish, within a 
reasonable time, evidence satisfactory to the regional director 
(compliance) that the tobacco products, and cigarette papers and tubes 
have been landed at some port beyond the jurisdiction of the internal 
revenue laws of the United States, or that after clearance from the 
United States, the articles were lost (otherwise than by theft) or 
destroyed, by fire, casualty, or act of God, and have not been relanded 
within the limits of the United States. The provisions of Secs. 44.121 
and 44.122 are applicable with respect to any drawback bond required 
under this section.

(72 Stat. 1419; 26 U.S.C. 5706)

[T.D. 6871, 31 FR 55, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 44.224  Inspection by an ATF officer.

    The ATF officer assigned in connection with a claim for drawback of 
tax, under this subpart, shall, at the place where the tobacco products, 
and cigarette papers and tubes covered by the claim are held by the 
claimant, examine such articles and satisfy himself as to the accuracy 
of the schedule of such articles appearing in the claim, Form 5620.7. 
Where the tax has been paid by stamp, the ATF officer will supervise 
destruction of the stamps on the packages. No particular mode of 
destruction of such stamps is prescribed, but the use of any indelible 
preparation which will render them illegible is approved.

[[Page 816]]

Where the tax on such articles has been paid by return, the ATF officer 
will satisfy himself that the articles have in fact been taxpaid and 
each package bears the label or notice required by Sec. 44.222. When the 
stamps have been properly destroyed, or the packages bear the required 
label or notice, the ATF officer will supervise the packing of such 
articles in shipping containers, the numbering of each such container, 
and the affixture thereto of the following:

    Drawback of tax claimed on contents.
    Sale, consumption, or use in U.S. prohibited.


Thereafter, the ATF officer will execute his report on each copy of the 
claim, return two copies to the claimant, deliver one copy to the 
regional director (compliance), and release the shipment to the claimant 
for delivery to the port of exportation.

(72 Stat. 1419; 26 U.S.C. 5706)

[T.D. 6871, 31 FR 55, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-424, 64 FR 71933, Dec. 22, 
1999]



Sec. 44.225  Delivery of tobacco products, or cigarette papers or tubes for export other than by parcel post.

    The claimant, upon release of the tobacco products, or cigarette 
papers or tubes by the ATF officer for exportation with benefit of 
drawback of tax under this subpart, shall be responsible for delivery of 
such articles to the port of exportation for customs inspection, 
supervision of lading, and clearance of the articles. The claimant shall 
file with the district director of customs at the port of exportation 
the two copies of Form 5620.7 returned to the claimant by the ATF 
officer in accordance with Sec. 44.224. Such copies shall be filed in 
sufficient time prior to lading to permit customs inspection and 
supervision of lading of the tobacco products, or cigarette papers or 
tubes.

(72 Stat. 1419; 26 U.S.C. 5706)

[T.D. 6961, 33 FR 9493, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-424, 64 FR 71933, Dec. 22, 
1999]



Sec. 44.226  Delivery of tobacco products, and cigarette papers and tubes for export by parcel post.

    Where the tobacco products, and cigarette papers and tubes are to be 
shipped by parcel post to a destination in a foreign country, Puerto 
Rico, the Virgin Islands, or a possession of the United States, a waiver 
of his right to withdraw such articles from the mails shall be stamped 
or written on each shipping container and be signed by the claimant, 
after which the claimant shall present the shipment to the post office. 
The claimant shall request the postmaster or his agent to execute the 
certificate of mailing on the copy of the claim, Form 5620.7, returned 
to the claimant by the ATF officer in accordance with Sec. 44.224. When 
so executed by the postal authorities, the Form 5620.7 shall be 
transmitted at once to the regional director (compliance) with whom the 
form was previously filed.

(72 Stat. 1419; 26 U.S.C. 5706)

[T.D. 6871, 31 FR 55, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-424, 64 FR 71933, Dec. 22, 
1999]



Sec. 44.227  Customs procedure.

    The customs officer shall satisfy himself that the tobacco products, 
and cigarette papers and tubes described on the Form 5620.7 and those 
inspected by him are the same and shall note on the form any 
discrepancy. After having inspected the articles and supervised the 
lading thereof on the export carrier, the customs officer shall complete 
and sign the certificate of inspection and lading on both copies of Form 
5620.7

[[Page 817]]

and deliver or transmit such copies to the office of his district 
director of customs for further processing. After clearance from the 
port of the export carrier on which the articles are laden, the district 
director of customs shall execute the certificate of exportation on both 
copies of Form 5620.7. The district director of customs shall retain one 
copy of the form for his records and transmit the other copy to the 
regional director (compliance) for the region from which the articles 
were shipped.

(72 Stat. 1419; 26 U.S.C. 5706)

[T.D. 6961, 33 FR 9493, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-424, 64 FR 71933, Dec. 22, 
1999]



Sec. 44.228  Landing certificate.

    Each claimant for drawback under this subpart agrees in the bond 
filed by him that he will furnish, within a reasonable time, evidence 
satisfactory to the regional director (compliance) that the tobacco 
products, and cigarette papers and tubes covered by his claim have been 
landed at some port beyond the jurisdiction of the internal revenue laws 
of the United States, or that after shipment from the United States the 
articles were lost, and have not been relanded within the limits of the 
United States. The landing certificate shall accurately describe the 
articles involved, so as to readily identify the drawback claim to which 
it relates. The landing certificate shall be signed by a revenue officer 
at the place of destination, unless it is shown that no such officer can 
furnish such landing certificate, in which case the certificate of 
landing shall be signed by the consignee, or by the vessel's agent at 
the place of landing, and shall be sworn to before a notary public or 
other officer authorized to administer oaths and having an official 
seal. The landing certificate shall be filed with the regional director 
(compliance), with whom the drawback claim was filed, within 6 months 
from the date of clearance of the tobacco products, and cigarette papers 
and tubes from the United States. A landing certificate prepared in a 
foreign language shall be accompanied by an accurate translation thereof 
in English.

(72 Stat. 1419; 26 U.S.C. 5706)

[T.D. 6871, 31 FR 56, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 44.229  Collateral evidence as to landing.

    In case of inability to furnish the prescribed evidence of landing, 
application for relief shall be promptly made by the claimant to the 
regional director (compliance) with whom the drawback claim and bond 
were filed. Such application shall set forth the facts connected with 
the alleged exportation, and indicate the date of shipment, the kind, 
quantity, and value of tobacco products and cigarette papers and tubes 
shipped, the name of the consignee, the name of the vessel, the port or 
place of destination to which the shipment was made, and the date and 
amount of the bond covering such shipment. The application shall also 
state in what particular the provisions of this subpart, respecting the 
proofs of landing, have not been complied with, and the cause of failure 
to furnish such proofs; that such failure was not occasioned by any lack 
of diligence on the part of the claimant, or that of his agents; and 
that he is unable to furnish any other or better evidence than that 
furnished with his application. Each such application shall be supported 
by the best collateral evidence the claimant may be able to submit. The 
evidence may consist of the original or verified copies of letters from 
the consignee advising the claimant of the arrival or sale of the 
tobacco products, and cigarette papers and tubes, with such other 
statements respecting the failure to furnish the prescribed evidence of 
landing as may be obtained from the consignee or other persons having 
knowledge thereof. Such letters and other documents in a foreign 
language shall be accompanied by accurate translations thereof in 
English, and, when the letters fail to identify sufficiently the tobacco 
products, and

[[Page 818]]

cigarette papers and tubes, the original sales account must be produced.

(72 Stat. 1419; 26 U.S.C. 5706)

[T.D. 6871, 31 FR 56, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 44.230  Proof of loss.

    When the claimant is unable to procure a certificate of landing, in 
accordance with the provisions of Sec. 44.228, in consequence of loss of 
the tobacco products, and cigarette papers and tubes, his application 
for relief shall set forth the extent of the loss and, if possible, the 
location and manner of shipwreck or other casualty and the time of its 
occurrence. When obtainable, affidavits of the vessel's owners should be 
furnished detailing the manner and extent of the loss and the time and 
location of the disaster. If the tobacco products, and cigarette papers 
and tubes were insured, the claimant shall furnish certificates by 
officers of the insurance companies that the insurance has been paid, 
and that, to the best of their knowledge and belief, the tobacco 
products, and cigarette papers and tubes were actually destroyed. The 
aforesaid proof shall be furnished to the regional director (compliance) 
within 6 months from the date of clearance of the tobacco products, and 
cigarette papers and tubes from the United States.

(72 Stat. 1419; 26 U.S.C. 5706)

[T.D. 6871, 31 FR 56, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 44.231  Extension of time.

    In case the claimant, from causes beyond his control, is unable to 
furnish the landing certificate or proof of loss, within the time 
prescribed therefor, he may make an application to the regional director 
(compliance) for an extension of time in which to do so. Such 
application must state specifically the cause of failure to furnish the 
evidence. Two extensions of three months each may be granted by the 
regional director (compliance), provided the surety on the drawback bond 
of the claimant assents in writing thereto.

(72 Stat. 1419; 26 U.S.C. 5706)

[25 FR 4725, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975]



Sec. 44.232  Allowance of claim.

    On receipt of the executed Form 5620.7 from the district director of 
customs, the regional director (compliance) will allow or disallow the 
claim in accordance with existing law and regulations. If the claim is 
not allowed in full the regional director (compliance) will notify the 
claimant, in writing, of the reasons for any disallowance.

(72 Stat. 1419; 26 U.S.C. 5706)

[25 FR 4725, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
as amended by T.D. ATF-424, 64 FR 71933, Dec. 22, 1999]



         Subpart L--Withdrawal of Cigars From Customs Warehouses

    Source: 25 FR 4725, May 28, 1960, unless otherwise noted. 
Redesignated at 40 FR 16835, Apr. 15, 1975.



Sec. 44.241  Shipment restricted.

    Cigars produced in a customs warehouse in accordance with customs 
laws and regulations may be withdrawn under this subpart, without 
payment of tax, for export or for delivery for subsequent exportation. 
Duties paid on the tobacco used in the manufacture of such cigars may 
not be recovered on the exportation of the cigars under this subpart.



Sec. 44.242  Responsibility for tax on cigars.

    A customs warehouse proprietor who withdraws cigars for export under 
his bond, without payment of tax, in accordance with the provisions of 
this part, shall be responsible for payment of such tax until he is 
relieved of such responsibility by furnishing the regional director 
(compliance), for the region in which is located the customs warehouse 
from which the cigars were withdrawn, evidence satisfactory to the 
regional director (compliance) of exportation or proper delivery, as 
required by this subpart, or satisfactory

[[Page 819]]

evidence of such other disposition as may be used as the lawful basis 
for such relief. Such evidence shall be furnished within 90 days of the 
date of withdrawal of the cigars: Provided, That this period may be 
extended for good cause shown.

                                  Bonds



Sec. 44.243  Bond required.

    Where the customs warehouse proprietor desires to withdraw cigars 
from his warehouse, without payment of tax, under this subpart, he 
shall, prior to making the first withdrawal, file with the regional 
director (compliance) a bond, Form 2104, conditioned upon compliance 
with the provisions of 26 U.S.C. chapter 52, and regulations thereunder, 
including, but not limited to, the timely payment of taxes imposed by 
such chapter, for which he may be responsible to the United States, and 
penalties and interest in connection therewith. The provisions of 
Secs. 44.121 and 44.122 are applicable to the bond required under this 
section. However, such bond shall not be required where the customs 
warehouse proprietor has in effect a bond, Form 2100, pursuant to 
Sec. 40.199 of this subchapter, conditioned upon compliance with 26 
U.S.C. chapter 52, and regulations thereunder.

[25 FR 4725, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55856, Sept. 28, 1979; T.D. ATF-460, 
66 FR 39093, July 27, 2001]



Sec. 44.244  Amount of bond.

    The amount of the bond filed by the customs warehouse proprietor, as 
required by Sec. 44.243, shall be not less than the estimated amount of 
tax which may at any time constitute a charge against the bond: 
Provided, That the amount of any such bond (or the total amount where 
original and strengthening bonds are filed) shall not exceed $25,000 nor 
be less than $1,000. The charges against such bond shall be subject to 
increase as withdrawals are made and decrease as required evidence of 
exportation is received by the regional director (compliance) with 
respect to cigars withdrawn. When the limit of liability under a bond 
given in less than the maximum amount has been reached, further 
withdrawals shall not be made thereunder until a strengthening or 
superseding bond is filed as required by Sec. 44.245 or Sec. 44.246.



Sec. 44.245  Strengthening bond.

    Where the regional director (compliance) determines that the amount 
of the bond, under which the customs warehouse proprietor is withdrawing 
cigars for shipment under this subpart, no longer adequately protects 
the revenue, and such bond is in an amount of less than $25,000, the 
regional director (compliance) may require the proprietor to file a 
strengthening bond in an appropriate amount with the same surety as that 
on the bond already in effect, in lieu of a superseding bond to cover 
the full liability on the basis of Sec. 44.244. The regional director 
(compliance) shall refuse to approve any strengthening bond where any 
notation is made thereon which is intended or which may be construed as 
a release of any former bond, or as limiting the amount of either bond 
to less than its full amount.



Sec. 44.246  Superseding bond.

    The customs warehouse proprietor shall file a new bond to supersede 
his current bond, immediately when (a) the corporate surety on the 
current bond becomes insolvent, (b) the regional director (compliance) 
approves a request from the surety on the current bond to terminate his 
liability under the bond, (c) payment of any liability under a bond is 
made by the surety thereon, or (d) the regional director (compliance) 
considers such a superseding bond necessary for the protection of the 
revenue.



Sec. 44.247  Termination of liability of surety under bond.

    The liability of a surety on any bond required by this subpart shall 
be terminated only as to operations on and after the effective date of a 
superseding bond, or the date of approval of the customs warehouse 
proprietor's request for termination, or otherwise, in accordance with 
the termination provisions of the bond. The surety shall remain bound in 
respect of any liability for unpaid taxes, penalties, and interest, not 
in excess of the amount of the

[[Page 820]]

bond, incurred by the proprietor while the bond is in force.

                         Packaging Requirements



Sec. 44.248  Packages.

    Cigars shall, before withdrawal under this part, be put up by the 
customs warehouse proprietor in packages which shall bear the label or 
notice, tax classification, and mark, as required by this subpart.

(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 (26 U.S.C. 5723))

[T.D. ATF-40, 42 FR 5009, Jan. 26, 1977]



Sec. 44.249  Lottery features.

    No certificate, coupon, or other device purporting to be or to 
represent a ticket, chance, share, or an interest in, or dependent on, 
the event of a lottery shall be contained in, attached to, or stamped, 
marked, written, or printed on any package of cigars withdrawn under 
this subpart.

(72 Stat. 1422; 26 U.S.C. 5723; 18 U.S.C. 1301)



Sec. 44.250  Indecent or immoral material.

    No indecent or immoral picture, print, or representation shall be 
contained in, attached to, or stamped, marked, written, or printed on 
any package of cigars withdrawn under this subpart.

(72 Stat. 1422; 26 U.S.C. 5723)



Sec. 44.251  Mark.

    Every package of cigars shall, before withdrawal from the customs 
warehouse under this subpart, have adequately imprinted thereon, or on a 
label securely affixed thereto, the name and location of the 
manufacturer. There shall also be adequately stated on each such package 
the number of cigars contained in the package.

(72 Stat. 1422; 26 U.S.C. 5723)



Sec. 44.252  Label or notice.

    Every package of cigars shall, before withdrawal from the customs 
warehouse under this subpart, have adequately imprinted thereon, or on a 
label securely affixed the words ``Tax-exempt. For use outside U.S.'' or 
the words ``U.S. Tax-exempt. For use outside U.S.'', except where a 
stamp, sticker, or notice, required by a foreign country or a possession 
of the United States, which identifies such country or possession, is so 
imprinted or affixed.

(72 Stat. 1422; 26 U.S.C. 5723)



Sec. 44.253  Tax classification for cigars.

    Before withdrawal of cigars from a customs warehouse under this 
subpart, every package of cigars shall have adequately imprinted on it, 
or on a label securely affixed to it--
    (a) The designation ``cigars'';
    (b) The quantity of cigars contained in the package; and
    (c) For small cigars, the classification of the product for tax 
purposes (i.e., either ``small'' or ``little'').

(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 (26 U.S.C. 5723))

[T.D. ATF-80, 46 FR 18312, Mar. 24, 1981]



Sec. 44.254  Shipping containers.

    Each shipping case, crate, or other container, in which cigars are 
to be withdrawn, under this subpart, shall bear a distinguishing number, 
such number to be assigned by the customs warehouse proprietor.

                         Consignment of Shipment



Sec. 44.255  Consignment of cigars.

    Cigars withdrawn from a customs warehouse, without payment of tax, 
under internal revenue bond and this part, shall be consigned in the 
same manner as provided by subpart J of this part with respect to the 
removal of tobacco products, and cigarette papers and tubes from a 
factory or an export warehouse.

[T.D. 6871, 31 FR 56, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28089, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]

                      Notice of Removal of Shipment



Sec. 44.256  Preparation.

    For each shipment to be withdrawn under this subpart, the customs 
warehouse proprietor shall prepare a notice of removal, Form 5200.14. 
Each such notice shall be given a serial number by the proprietor in a 
series beginning

[[Page 821]]

with number 1, with respect to the first shipment withdrawn under this 
subpart and commencing again with number 1 on January 1 of each year 
thereafter.

[25 FR 4725, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
as amended by T.D. ATF-421, 64 FR 71926, Dec. 22, 1999]



Sec. 44.257  Disposition.

    After actual withdrawal from his warehouse of the shipment described 
on the notice of removal, Form 5200.14, the customs warehouse proprietor 
shall, except where the shipment is to be exported by parcel post, 
promptly forward one copy of the notice of removal to the regional 
director (compliance) for the region in which is located the customs 
warehouse from which the shipment is withdrawn. A copy of each such 
notice shall be retained by the customs warehouse proprietor as a part 
of his records, for 3 years following the close of the calendar year in 
which the shipment was withdrawn, and shall be made available for 
inspection by any ATF officer upon his request. The proprietor shall 
dispose of the other copies of each notice of removal as required by 
this subpart.

[25 FR 4725, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
as amended by T.D. ATF-421, 64 FR 71926, Dec. 22, 1999]



Sec. 44.258  To officers of the armed forces for subsequent exportation.

    Where cigars are withdrawn from a customs warehouse for delivery to 
officers of the armed forces of the United States in this country for 
subsequent shipment to, and use by, the armed forces outside the United 
States, the customs warehouse proprietor making the shipment shall 
forward a copy of the notice of removal, Form 5200.14, to the officer at 
the base or installation authorized to receive the cigars described on 
the notice of removal. Upon execution by the armed forces receiving 
officer of the certificate of receipt on the copy of the notice of 
removal, he shall return such copy to the customs warehouse proprietor 
making the shipment for filing with the appropriate regional director 
(compliance).

[25 FR 4725, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
as amended by T.D. ATF-421, 64 FR 71926, Dec. 22, 1999]



Sec. 44.259  To noncontiguous foreign countries and possessions of the United States.

    Where cigars are withdrawn from a customs warehouse for direct 
delivery to a vessel or aircraft for transportation to a noncontiguous 
foreign country, Puerto Rico, the Virgin Islands, or a possession of the 
United States, the customs warehouse proprietor making the withdrawal 
shall file two copies of the notice of removal, Form 5200.14, with the 
office of the district director of customs at the port where the 
shipment is to be laden. Such copies of the notice of removal should be 
filed with the related shipper's export declaration, Commerce Form 7525-
V. In the event the copies of the notice of removal are not filed with 
the shipper's export declaration, when the copies of the notice are 
filed with the district director of customs they shall show all 
particulars necessary to enable that officer to associate the notice 
with the related shipper's export declaration and any other documents 
filed with his office in connection with the shipment. After the vessel 
or aircraft on which the shipment has been laden clears or departs from 
the port of lading the customs authority shall execute the certificate 
of exportation on both copies of the notice of removal, retain one copy 
for his records, and deliver or transmit the other copy to the customs 
warehouse proprietor making the shipment for filing with the appropriate 
regional director (compliance).

[T.D. 6961, 33 FR 9494, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, as amended by T.D. ATF-421, 64 FR 71926, Dec. 22, 1999]



Sec. 44.260  To a Federal department or agency.

    Where cigars are withdrawn from a customs warehouse and are destined 
for ultimate delivery in a noncontiguous foreign country, Puerto Rico, 
the Virgin Islands, or a possession of the United States, but the 
shipment is to be delivered to a Federal department or agency, or to an 
authorized dispatch agent, transportation officer, or port director of 
such a department or agency for forwarding on to the place of 
destination of the shipment, the customs warehouse proprietor making the 
shipment shall furnish a copy of the

[[Page 822]]

notice of removal, Form 5200.14, to the Federal department or agency, or 
an officer thereof at the port, receiving the shipment for ultimate 
transmittal to the place of destination, in order that such department, 
agency, or officer, can properly execute the certificate of receipt on 
such notice to evidence receipt of the shipment for transmittal to a 
place beyond the jurisdiction of the internal revenue laws of the United 
States. After completing such certificate, the Federal department, 
agency, or officer, shall return the copy of the notice of removal, so 
executed, to the customs warehouse proprietor making the shipment for 
filing with the appropriate regional director (compliance).

[25 FR 4725, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
as amended by T.D. ATF-421, 64 FR 71926, Dec. 22, 1999]



Sec. 44.261  To contiguous foreign countries.

    Where cigars are withdrawn from a customs warehouse for export to a 
contiguous foreign country, the customs warehouse proprietor making the 
shipment shall furnish to the district director of customs at the border 
or other port of exit two copies of the notice of removal, Form 5200.14, 
together with the related shipper's export declaration, Commerce Form 
7525-V. In the event the copies of the notice of removal are not filed 
with the shipper's export declaration or, in the case of a shipment for 
the armed forces of the United States in the contiguous foreign country 
where no shipper's export declaration is required, the copies of the 
notice when filed with the district director of customs shall show all 
particulars necessary to enable that officer to associate the notice 
with the related shipper's export declaration, if any, and any other 
documents filed with his office in connection with the shipment. After 
the shipment has been cleared by customs from the United States, the 
customs authority at the port of exit shall complete the certificate of 
exportation on both copies of the notice of removal, retain one copy for 
his records, and transmit the other copy to the customs warehouse 
proprietor making the shipment for filing with the appropriate regional 
director (compliance).

[T.D. 6961, 33 FR 9494, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, as amended by T.D. ATF-421, 64 FR 71926, Dec. 22, 1999]



Sec. 44.262  To Government vessels and aircraft for consumption as supplies.

    Where cigars are withdrawn from a customs warehouse for direct 
delivery to a vessel or aircraft, engaged in an activity for the 
Government of the United States or a foreign government, for consumption 
as supplies beyond the jurisdiction of the internal revenue laws of the 
United States, the customs warehouse proprietor making the shipment 
shall forward a copy of the notice of removal, Form 5200.14, to the 
officer of the vessel or aircraft authorized to receive the shipment. 
Upon execution by the receiving officer of the vessel or aircraft of the 
certificate of receipt on the copy of the notice of removal, he shall 
return such copy to the customs warehouse proprietor making the shipment 
for filing with the appropriate regional director (compliance).

[25 FR 4725, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
as amended by T.D. ATF-421, 64 FR 71926, Dec. 22, 1999]



Sec. 44.263  To commercial vessels and aircraft for consumption as supplies.

    Where cigars are withdrawn from a customs warehouse for delivery to 
a vessel or aircraft entitled to receive such articles for consumption 
as supplies beyond the jurisdiction of the internal revenue laws of the 
United States, the customs warehouse proprietor making shipment shall 
file two copies of the notice of removal, Form 5200.14, with the 
district director of customs at the port where the shipment is to be 
laden in sufficient time to permit delivery of the two copies of the 
notice of removal to the customs officer who will inspect the shipment 
and supervise its lading. After inspection and lading of the shipment 
the customs officer shall note on the copies of the notice of removal 
any discrepancy between the shipment inspected and laden under his 
supervision and that described on the notice of removal or any 
limitation on the quantity to be

[[Page 823]]

laden; complete and sign the certificate of inspection and lading; and 
return both copies of the notice of removal to the district director of 
customs. The district director of customs shall execute the certificate 
of clearance on both copies of the notice of removal, retain one copy 
for his records, and forward the other copy to the customs warehouse 
proprietor making the shipment for filing with the appropriate regional 
director (compliance). Where the vessel or aircraft does not clear from 
the port at which the shipment is laden, the customs officer supervising 
the lading of the shipment shall require the person on board the vessel 
or aircraft authorized to receive the shipment to execute the 
certificate of receipt on both copies of the notice of removal to 
indicate the trade or activity in which the vessel or aircraft is 
engaged.

[T.D. 6961, 33 FR 9494, June 28, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, as amended by T.D. ATF-421, 64 FR 71926, Dec. 22, 1999]



Sec. 44.264  To export warehouses.

    Where cigars are withdrawn from a customs warehouse for delivery to 
an export warehouse, the proprietor of the customs warehouse shall 
forward to the proprietor of the export warehouse three copies of the 
notice of removal, Form 5200.14, covering the shipment, for execution 
and disposition in accordance with procedure similar to that set forth 
in Sec. 44.200 in connection with a shipment of tobacco products, and 
cigarette papers and tubes from a factory to an export warehouse. The 
executed copy of the notice of removal, Form 2149, returned to the 
customs warehouse proprietor by the export warehouse proprietor shall be 
filed with the appropriate regional director (compliance).

[T.D. ATF-48, 44 FR 55856, Sept. 28, 1979, as amended by T.D. ATF-232, 
51 FR 28089, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. 
ATF-421, 64 FR 71926, Dec. 22, 1999]



Sec. 44.264a  To a foreign-trade zone.

    Where cigars are withdrawn from a customs warehouse for delivery to 
a foreign-trade zone, under zone restricted status for the purpose of 
exportation or storage, the customs warehouse proprietor making the 
shipment shall forward two copies of the notice of removal, Form 
5200.14, to the customs officer in charge of the zone. Upon receipt of 
the shipment, the customs officer shall execute the certificate of 
receipt on each copy of the form, noting thereon any discrepancy, retain 
one copy for his records, and forward the other copy to the customs 
warehouse proprietor making the shipment for filing with the appropriate 
regional director (compliance).

[T.D. 6564, 26 FR 4362, May 19, 1961. Redesignated at 40 FR 16835, Apr. 
15, 1975, as amended by T.D. ATF-421, 64 FR 71926, Dec. 22, 1999]



Sec. 44.265  For export by parcel post.

    Where cigars are withdrawn from a customs warehouse for export by 
parcel post, the customs warehouse proprietor shall present one copy of 
the notice of removal, Form 5200.14, together with the shipping 
containers, to the postal authorities with the request that the 
postmaster or his agent execute the certificate of mailing on the form. 
Where a customs warehouse proprietor so desires, he may cover under one 
notice of removal all the cigars removed under this part for export by 
parcel post which are delivered at one time to the postal service for 
that purpose. The customs warehouse proprietor shall immediately file 
the receipted copy of the notice of removal with the appropriate 
regional director (compliance).

[25 FR 4725, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
as amended by T.D. ATF-421, 64 FR 71926, Dec. 22, 1999]

                           Return of Shipment



Sec. 44.266  Return of cigars from export warehouses.

    Where cigars are returned to a customs warehouse from an export 
warehouse, the officer in charge of the customs warehouse shall execute 
the certificate of receipt on each of the copies of the related Form 
5200.14 received from the export warehouse proprietor, after checking 
the containers to determine whether all the cigars described on the 
notice have been received. Thereafter, both copies of the Form 5200.14 
shall be turned over to the proprietor of the customs warehouse who 
shall return one copy to the export warehouse proprietor for disposition 
as

[[Page 824]]

provided in Sec. 44.201. The customs warehouse proprietor shall retain 
the other copy of the notice of removal, as a part of his records, for 3 
years following the close of the calendar year in which the shipment was 
received. Such copy shall be made available for inspection by any ATF 
officer upon his request.

[T.D. ATF-48, 44 FR 55856, Sept. 28, 1979, as amended by T.D. ATF-421, 
64 FR 71926, Dec. 22, 1999]



Sec. 44.267  Return of cigars from other sources.

    A customs warehouse proprietor may return to his warehouse cigars 
previously withdrawn therefrom, under this subpart, provided he promptly 
files with the appropriate regional director (compliance) a copy of the 
Form 5200.14 under which the cigars were originally withdrawn, with the 
certificate of receipt properly modified and executed by the customs 
officer in charge of the warehouse to show return of the shipment. If 
less than the entire shipment is returned to the warehouse, the form 
shall state what disposition was made of the remainder of the original 
shipment and any other facts pertinent to such shipment. The customs 
warehouse proprietor shall retain a copy of such form as a part of his 
records for 3 years after the close of the calendar year in which the 
shipment was returned. Such copy shall be made available for inspection 
by any ATF officer upon request.

[25 FR 4725, May 28, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
as amended by T.D. ATF-421, 64 FR 71926, Dec. 22, 1999]



PART 45--REMOVAL OF TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES, WITHOUT PAYMENT OF TAX, FOR USE OF THE UNITED STATES--Table of Contents




                     Subpart A--Scope of Regulations

Sec.
45.1  Removal of tobacco products, and cigarette papers and tubes, 
          without payment of tax, for use of the United States.

                         Subpart B--Definitions

45.11  Meaning of terms.

                  Subpart C--Administrative Provisions

45.21  Alternate methods or procedures.
45.22  Emergency variations from requirements.
45.23  Authority of appropriate ATF officers to enter premises.
45.24  Interference with administration.
45.25  Unlawful purchase, receipt, possession, or sale of tobacco 
          products, or cigarette papers or tubes, after removal.
45.26  Delegations of the Director.
45.27  Forms prescribed.

                           Subpart D--Removals

45.31  Restrictions.
45.32  Under manufacturer's bond.
45.33  Return of shipment to factory.
45.34  Loss or shortage in shipment.
45.35  Liability for tax.
45.36  Payment of tax.
45.37  Assessment.

                    Subpart E--Packaging Requirements

45.41  Packages.
45.42  Mark.
45.43  Notice for smokeless tobacco.
45.44  Notice for cigars.
45.45  Notice for cigarettes.
45.45a  Notice for pipe tobacco.
45.45b  Notice for roll-your-own tobacco.
45.45c  Package use-up rule.
45.46  Tax-exempt label.

                           Subpart F--Records

45.51  Supporting records.

    Authority: 26 U.S.C. 5703, 5704, 5705, 5723, 5741, 5751, 5762, 5763, 
6313, 7212, 7342, 7606, 7805, 44 U.S.C. 3504(h).

    Source: Redesignated by T.D. ATF-469, 66 FR 56758, Nov. 13, 2001.

    Editorial Note: Nomenclature changes to part 45 appear at T.D. ATF-
460, 66 FR 39093, July 27, 2001.



                     Subpart A--Scope of Regulations



Sec. 45.1  Removal of tobacco products, and cigarette papers and tubes, without payment of tax, for use of the United States.

    This part contains the regulations relating to the removal of 
tobacco products, and cigarette papers and tubes, without payment of 
tax, for use of the United States.

[T.D. 6871, 31 FR 57, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28090, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]

[[Page 825]]



                         Subpart B--Definitions



Sec. 45.11  Meaning of terms.

    When used in this part and in forms prescribed under this part, the 
following terms shall have the meanings given in this section, unless 
the context clearly indicates otherwise. Words in the plural form shall 
include the singular, and vice versa, and words indicating the masculine 
gender shall include the feminine. The terms ``includes'' and 
``including'' do not exclude things not listed which are in the same 
general class.
    Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this part by ATF Order 
1130.28, Delegation of the Director's Authorities in 27 CFR Parts 45 and 
46.
    Armed forces. The Army, Navy (including the Marine Corps), Air 
Force, and Coast Guard.
    Charge of the United States. A patient in a hospital or similar 
institution, or a Federal prisoner, if the hospital, institution, or 
prison is operated by a Federal agency and the support or care of such 
person results in a charge on, or an expense to, the United States 
Government.
    Chewing tobacco. Any leaf tobacco that is not intended to be smoked.
    Cigar. Any roll of tobacco wrapped in leaf tobacco or in any 
substance containing tobacco (other than any roll of tobacco which is a 
cigarette within the meaning of paragraph (2) of the definition for 
cigarette).
    Cigarette. (1) Any roll of tobacco wrapped in paper or in any 
substance not containing tobacco, and
    (2) Any roll of tobacco wrapped in any substance containing tobacco 
which, because of its appearance, the type of tobacco used in the 
filler, or its packaging and labeling, is likely to be offered to, or 
purchased by, consumers as a cigarette described in paragraph (1) of 
this definition.
    Cigarette paper. Paper, or any other material except tobacco, 
prepared for use as a cigarette wrapper.
    Cigarette tube. Cigarette paper made into a hollow cylinder for use 
in making cigarettes.
    District director. A district director of internal revenue.
    Factory. The premises of a manufacturer of tobacco products or 
cigarette papers and tubes in which he carries on such business.
    Federal agency. A department or agency of the United States 
Government, including the American National Red Cross, and the U.S. 
Soldiers Home, Washington, D.C.
    Large cigarettes. Cigarettes weighing more than three pounds per 
thousand.
    Large cigars. Cigars weighing more than three pounds per thousand.
    Manufacturer of cigarette papers and tubes. Any person who 
manufactures cigarette paper, or makes up cigarette paper into tubes, 
except for his own personal use or consumption.
    Manufacturer of tobacco products. Any person who manufactures 
cigars, cigarettes, smokeless tobacco, pipe tobacco, or roll-your-own 
tobacco but does not include:
    (1) A person who produces tobacco products solely for that person's 
own consumption or use; or
    (2) A proprietor of a Customs bonded manufacturing warehouse with 
respect to the operation of such warehouse.
    Package. The container in which tobacco products or cigarette papers 
or tubes are put up by the manufacturer and offered for sale or delivery 
to the consumer.
    Person. An individual, partnership, association, company, 
corporation, estate, or trust.
    Pipe tobacco. Any tobacco which, because of its appearance, type, 
packaging, or labeling, is suitable for use and likely to be offered to, 
or purchased by, consumers as tobacco to be smoked in a pipe.
    Removal or remove. The removal of tobacco products or cigarette 
papers or tubes from the factory.
    Roll-your-own tobacco. Any tobacco which, because of its appearance, 
type, packaging, or labeling, is suitable for use and likely to be 
offered to, or purchased by, consumers as tobacco for making cigarettes.
    Sale price. The price for which large cigars are sold by the 
manufacturer or importer, determined in accordance with Secs. 40.22 or 
275.39 and used in computation of the tax.

[[Page 826]]

    Small cigarettes. Cigarettes weighing not more than three pounds per 
thousand.
    Small cigars. Cigars weighing not more than three pounds per 
thousand.
    Smokeless tobacco. Any chewing tobacco or snuff.
    Snuff. Any finely cut, ground, or powdered tobacco that is not 
intended to be smoked.
    This chapter. Chapter I, title 26, Code of Federal Regulations.
    Tobacco products. Cigars, cigarettes, smokeless tobacco, pipe 
tobacco, and roll-your-own tobacco.
    United States. When used in a geographical sense shall include only 
the States and the District of Columbia.
    U.S.C. The United States Code.

[T.D. ATF-48, 43 FR 13557, Mar. 31, 1978; 44 FR 55856, Sept. 28, 1979, 
as amended by T.D. ATF-232, 51 FR 28090, Aug. 5, 1986; T.D. ATF-243, 51 
FR 43194, Dec. 1, 1986; T.D. ATF-289, 54 FR 48842, Nov. 27, 1989; T.D. 
ATF-424, 64 FR 71933, Dec. 22, 1999; T.D. ATF-420, 64 FR 71945, Dec. 22, 
1999; T.D. ATF-467, 66 FR 49532, Sept. 28, 2001; T.D. ATF-472, 67 FR 
8880, Feb. 27, 2002]



                  Subpart C--Administrative Provisions



Sec. 45.21  Alternate methods or procedures.

    A manufacturer, on specific approval by the appropriate ATF officer 
as provided in this section, may use an alternate method or procedure in 
lieu of a method or procedure specifically prescribed in this part. The 
Director may approve an alternate method or procedure, subject to stated 
conditions, when he finds that:
    (a) Good cause has been shown for the use of the alternate method or 
procedure.
    (b) The alternate method or procedure is within the purpose of, and 
consistent with the effect intended by, the specifically prescribed 
method or procedure, and affords equivalent security to the revenue, and
    (c) The alternate method or procedure will not be contrary to any 
provision of law, and will not result in an increase in cost to the 
Government or hinder the effective administration of this part.

No alternate method or procedure relating to the giving of any bond or 
to the assessment, payment, or collection of tax, shall be authorized 
under this section. Where a manufacturer desires to employ an alternate 
method or procedure, the manufacturer must submit a written application 
to the appropriate ATF officer. The application shall specifically 
describe the proposed alternate method or procedure, and shall set forth 
the reasons therefor. Alternate methods or procedures shall not be 
employed until the application has been approved by the appropriate ATF 
officer. The manufacturer shall, during the period of authorization of 
an alternate method or procedure, comply with the terms of the approved 
application. Authorization for any alternate method or procedure may be 
withdrawn whenever in the judgment of the appropriate ATF officer the 
revenue is jeopardized or the effective administration of this part is 
hindered. The manufacturer shall retain, as part of his records, any 
authorization of the appropriate ATF officer under this section for 
three years following the close of the calendar year in which the 
operation under such authorization is concluded.

[Redesignated by T.D. ATF-469, 66 FR 56758, Nov. 13, 2001, as amended by 
T.D. ATF-472, 67 FR 8880, Feb. 27, 2002]



Sec. 45.22  Emergency variations from requirements.

    The appropriate ATF officer may approve methods of operation other 
than as specified in this part, where he finds that an emergency exists 
and the proposed variations from the specified requirements are 
necessary, and the proposed variations:
    (a) Will afford the security and protection to the revenue intended 
by the prescribed specifications.
    (b) Will not hinder the effective administration of this part, and
    (c) Will not be contrary to any provision of law.

Variations from requirements granted under this section are conditioned 
on compliance with the procedures, conditions, and limitations set forth 
in the approval of the application. Failure to comply in good faith with 
such procedures, conditions, and limitations shall

[[Page 827]]

automatically terminate the authority for such variations and the 
manufacturer thereupon shall fully comply with the prescribed 
requirements of regulations from which the variations were authorized. 
Authority for any variations may be withdrawn whenever in the judgment 
of the appropriate ATF officer the revenue is jeopardized or the 
effective administration of this part is hindered by the continuation of 
such variation. Where a manufacturer desires to employ such variation, 
the manufacturer must submit a written application to the appropriate 
ATF officer. The application shall describe the proposed variations and 
set forth the reasons therefor. Variations shall not be employed until 
the application has been approved. The manufacturer shall retain, as 
part of his records, any authorization of the appropriate ATF officer 
under this section for three years following the close of the calendar 
year in which the operation under such authorization is concluded.

[27 FR 4476, May 10, 1962. Redesignated at 40 FR 16835, Apr. 15, 1975, 
as amended by T.D. ATF-472, 67 FR 8880, Feb. 27, 2002]



Sec. 45.23  Authority of appropriate ATF officers to enter premises.

    Any appropriate ATF officer may enter in the daytime any premises 
where tobacco products, or cigarette papers or tubes removed under this 
part are kept, so far as it may be necessary for the purpose of 
examining such articles. When such premises are open at night, any 
appropriate ATF officer may enter them, while so open, in the 
performance of his official duties. The owner of such premises, or 
person having the superintendence of the same, who refuses to admit any 
appropriate ATF officer or permit him to examine the articles removed 
under this part shall be liable to the penalties prescribed by law for 
the offense.

(68A Stat. 872, 903; 26 U.S.C. 7342, 7606)

[T.D. 6871, 31 FR 57, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28090, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-472, 67 FR 8880, Feb. 27, 
2002]



Sec. 45.24  Interference with administration.

    Whoever, corruptly or by force or threats of force, endeavors to 
hinder or obstruct the administration of this part, or endeavors to 
intimidate or impede any appropriate ATF officer acting in his official 
capacity, or forcibly rescues or attempts to rescue or causes to be 
rescued any property, after it has been duly seized for forfeiture to 
the United States in connection with a violation of the internal revenue 
laws, shall be liable to the penalties prescribed by law.

(68A Stat. 855; 26 U.S.C. 7212)

[27 FR 4476, May 10, 1962. Redesignated at 40 FR 16835, Apr. 15, 1975, 
as amended by T.D. ATF-472, 67 FR 8880, Feb. 27, 2002]



Sec. 45.25  Unlawful purchase, receipt, possession, or sale of tobacco products, or cigarette papers or tubes, after removal.

    Any person who, with intent to defraud the United States, purchases, 
receives, possesses, offers for sale, or sells or otherwise disposes of 
tobacco products, or cigarette papers or tubes which, after removal 
under this part, without payment of tax, have been diverted from the 
purpose or use specified in this part, shall be subject to the criminal 
penalties and provisions for forfeiture prescribed by law.

(72 Stat. 1424, 1425, as amended, 1426; 26 U.S.C. 5751, 5762, 5763)

[T.D. 6871, 31 FR 57, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-232, 51 FR 28090, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 45.26  Delegations of the Director.

    The regulatory authorities of the Director contained in this part 
are delegated to appropriate ATF officers. These ATF officers are 
specified in ATF O 1130.28, Delegation of the Director's Authorities in 
27 CFR Parts 45 and 46. ATF delegation orders, such as ATF O 1130.28, 
are available to any interested party by mailing a request to the ATF 
Distribution Center, PO Box 5950, Springfield, VA 22150-5950, or by 
accessing the ATF web site (http://www.atf.treas.gov/).

[T.D. ATF-472, 67 FR 8880, Feb. 27, 2002]

[[Page 828]]



Sec. 45.27  Forms prescribed.

    (a) The appropriate ATF officer is authorized to prescribe all forms 
required by this part. You must furnish all of the information required 
by each form as indicated by the headings on the form and the 
instructions for the form, and as required by this part. You must file 
each form in accordance with its instructions.
    (b) You may request forms from the ATF Distribution Center, P.O. Box 
5950, Springfield, Virginia 22153-5950, or by accessing the ATF web site 
(http://www.atf.treas.gov/).

[T.D. ATF-472, 67 FR 8880, Feb. 27, 2002]



                           Subpart D--Removals

    Source: T.D. 6871, 31 FR 57, Jan. 14, 1966. Redesignated at 40 FR 
16835, Apr. 15, 1975.



Sec. 45.31  Restrictions.

    Tobacco products, and cigarette papers and tubes purchased by a 
Federal agency with funds appropriated by the Congress of the United 
States may be removed, without payment of tax, in accordance with this 
part, for delivery to such Federal agency for gratuitous distribution 
under the supervision of such agency. Such articles purchased by a donor 
from a manufacturer, or donated directly by a manufacturer, may also be 
removed, without payment of tax, in accordance with this part, for 
delivery to a Federal agency for gratuitous distribution under the 
supervision of such agency to (a) charges of the United States or (b) 
patients in a hospital or institution operated by the Government of a 
State or the District of Columbia where the Federal agency maintains a 
program for such distribution to members or veterans of the armed forces 
of the United States in such hospital or institution. Tobacco products, 
and cigarette papers and tubes removed under the provisions of this part 
may not be sold subsequent to removal.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 57, as amended by T.D. ATF-243, 51 FR 28090, Aug. 5, 
1986; 51 FR 43194, Dec. 1, 1986]



Sec. 45.32  Under manufacturer's bond.

    Removals of tobacco products, and cigarette papers and tubes under 
this part shall be made under the bond filed by the manufacturer of such 
articles to cover the operations of his factory as required by section 
5711, I.R.C., and regulations issued thereunder.

(72 Stat. 1418, as amended, 1421, as amended; 26 U.S.C. 5704, 5711)

[T.D. 6871, 31 FR 57, as amended by T.D. ATF-243, 51 FR 28090, Aug. 5, 
1986; 51 FR 43194, Dec. 1, 1986]



Sec. 45.33  Return of shipment to factory.

    Tobacco products, and cigarette papers and tubes which have been 
removed, under this part, may be returned to the factory without 
internal revenue supervision.

(72 Stat. 1418, as amended; 26 U.S.C. 5704)

[T.D. 6871, 31 FR 57, as amended by T.D. ATF-243, 51 FR 28090, Aug. 5, 
1986; 51 FR 43194, Dec. 1, 1986]



Sec. 45.34  Loss or shortage in shipment.

    Immediately upon receipt of information of a loss of all or part of 
a shipment, or of a shortage therein, of tobacco products, or cigarette 
papers or tubes removed under this part, the manufacturer shall notify 
the appropriate ATF officer, furnish all pertinent details with respect 
to the loss or shortage, and either pay the tax due thereon in 
accordance with the provisions of Sec. 45.36, or file claim for 
remission of the tax liability under the provisions of part 40 of this 
chapter, as the case may be.

(72 Stat. 1417, 1419, as amended; 26 U.S.C. 5703, 5705)

[T.D. 6871, 31 FR 57, as amended by T.D. ATF-243, 51 FR 28090, Aug. 5, 
1986; 51 FR 43194, Dec. 1, 1986; T.D. ATF-384, 61 FR 54096, Oct. 17, 
1996; T.D. ATF-469, 66 FR 56758, Nov. 13, 2001; T.D. ATF-472, 67 FR 
8880, Feb. 27, 2002]



Sec. 45.35  Liability for tax.

    The manufacturer who removes tobacco products, or cigarette papers 
or tubes under this part shall be liable for the taxes imposed thereon 
by 26 U.S.C. 5701, until such tobacco products, or cigarette papers or 
tubes are received by the Federal agency. Any person who

[[Page 829]]

possesses tobacco products, or cigarette papers or tubes in violation of 
26 U.S.C. 5751(a)(1) or (2), shall be liable for a tax equal to the tax 
on such articles.

(72 Stat. 1417, 1424; 26 U.S.C. 5703, 5751)

[T.D. 6871, 31 FR 57, Jan. 14, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55856, Sept. 28, 1979; T.D. 
ATF-232, 51 FR 28090, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 
1986]



Sec. 45.36  Payment of tax.

    Any tax which becomes due and payable on tobacco products, and 
cigarette papers and tubes removed under this part shall be paid to 
appropriate ATF officer, with sufficient information to identify the 
taxpayer, the nature and purpose of the payment, and the articles 
covered by the payment: Provided, That a manufacturer of tobacco 
products or cigarette papers or tubes may pay any tax for which he 
becomes liable under this part by an appropriate adjustment in his 
current tax return Form 5000.24. In paying the tax, a fractional part of 
a cent shall be disregarded unless it amounts to one-half cent or more, 
in which case it shall be increased to one cent.

[T.D. ATF-232, 51 FR 28090, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, 
Dec. 1, 1986, as amended by T.D. ATF-251, 52 FR 19341, May 22, 1987; 
T.D. ATF-472, 67 FR 8880, Feb. 27, 2002]



Sec. 45.37  Assessment.

    Whenever any person required by law to pay tax on tobacco products, 
and cigarette papers and tubes fails to pay such tax, the tax shall be 
ascertained and assessed against such person, subject to the limitations 
prescribed in 26 U.S.C. 6501. The tax so assessed shall be in addition 
to the penalties imposed by law for failure to pay such tax when 
required. Except in cases where delay may jeopardize collection of the 
tax, or where the amount is nominal or the result of an evident 
mathematical error, no such assessment shall be made until and after 
notice has been afforded such person to show cause against assessment. 
The person will be allowed 45 days from the date of such notice to show 
cause, in writing, against such assessment.

(72 Stat. 1417; 26 U.S.C. 5703)

[T.D. 6871, 31 FR 57, Jan. 14, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55856, Sept. 28, 1979; T.D. 
ATF-232, 51 FR 28090, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 
1986]



                    Subpart E--Packaging Requirements



Sec. 45.41  Packages.

    All tobacco products, and cigarette papers and tubes shall, before 
removal under this part, be put up by the manufacturer in packages which 
shall be of such construction as will securely contain the articles 
therein and maintain the mark, notice, and label thereon, as required by 
this subpart. No package of tobacco products, or cigarette papers or 
tubes shall have contained therein, attached thereto, or stamped, 
marked, written, or printed thereon (a) any certificate, coupon, or 
other device purporting to be or to represent a ticket, chance, share, 
or an interest in, or dependent on, the event of a lottery, or (b) any 
indecent or immoral picture, print, or representation.

(72 Stat. 1422; 26 U.S.C. 5723)

[T.D. 6871, 31 FR 58, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975 and amended by T.D. ATF-232, 51 FR 28090, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 45.42  Mark.

    Every package of tobacco products shall before removal from the 
factory under this part, have adequately imprinted thereon, or on a 
label securely affixed thereto, a mark as specified in this section. The 
mark may consist of the name of the manufacturer removing the product 
and the location (by city and State) of the factory from which the 
products are to be so removed, or may consist of the permit number of 
the factory from which the products are to be so removed. (Any trade 
name of the manufacturer approved as provided in Sec. 40.65 of this 
chapter may be used in the mark as the name of the manufacturer.) As an 
alternative, where tobacco products are both packaged and removed by the 
same manufacturer, either at the same

[[Page 830]]

or different factories, the mark may consist of the name of such 
manufacturer if the factory where packaged is identified on or in the 
package by a means approved by the appropriate ATF officer. Before using 
the alternative, the manufacturer shall notify the appropriate ATF 
officer in writing of the name to be used as the name of the 
manufacturer and the means to be used for identifying the factory where 
packaged. If approved by him the appropriate ATF officer shall return 
approved copies of the notice to the manufacturer. A copy of the 
approved notice shall be retained as part of the factory records at each 
of the factories operated by the manufacturer.

(72 Stat. 1422; 26 U.S.C. 5723)

[T.D. 6871, 31 FR 58, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975 and amended by T.D. ATF-232, 51 FR 28090, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-472, 67 FR 8880, Feb. 27, 
2002]



Sec. 45.43  Notice for smokeless tobacco.

    (a) Product designation. Every package of chewing tobacco or snuff 
shall, before removal under this part, have adequately imprinted 
thereon, or on a label securely affixed thereto, the designation 
``chewing tobacco'' or ``snuff.'' As an alternative, packages of chewing 
tobacco may be designated ``Tax Class C,'' and packages of snuff may be 
designated ``Tax Class M.''
    (b) Product weight. Every package of chewing tobacco or snuff shall, 
before removal under this part, have adequately imprinted thereon, or on 
a label securely affixed thereto, a clear statement of the actual pounds 
and ounces of the product contained therein. As an alternative, the 
shipping cases containing packages of chewing tobacco or snuff may, 
before removal, have adequately imprinted thereon, or on a label 
securely affixed thereto, a clear statement, in pounds and ounces, of 
the total weight of the product, the tax class of the product, and the 
total number of the packages of product contained therein.

(Approved by the Office of Management and Budget under control number 
1512-0502)

(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 (26 U.S.C. 5723))

[T.D. ATF-232, 51 FR 28090, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, 
Dec. 1, 1986; T.D. ATF-469, 66 FR 56758, Nov. 13, 2001]



Sec. 45.44  Notice for cigars.

    Before removal under this part, every package of cigars shall have 
adequately imprinted on it, or on a label securely affixed to it--
    (a) The designation ``cigars'';
    (b) The quantity of cigars contained in the package; and
    (c) For small cigars, the classification of the product for tax 
purposes (i.e., either ``small'' or ``little'').

(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 (26 U.S.C. 5723))

[T.D. ATF-80, 46 FR 18312, Mar. 24, 1981]



Sec. 45.45  Notice for cigarettes.

    Every package of cigarettes shall, before removal under this part, 
have adequately imprinted thereon, or on a label securely affixed 
thereto, the designation ``cigarettes'', the quantity of such product 
contained therein, and the classification for tax purposes, i.e., for 
small cigarettes, either ``small'' or ``Class A'', and for large 
cigarettes, either ``large'' or ``Class B''.

(72 Stat. 1422; 26 U.S.C. 5723)

[27 FR 4478, May 10, 1962. Redesignated at 40 FR 16835, Apr. 15, 1975]



Sec. 45.45a  Notice for pipe tobacco.

    (a) Product designation. Every package of pipe tobacco shall, before 
removal subject to tax, have adequately imprinted thereon, or on a label 
securely affixed thereto, the designation ``pipe tobacco.'' As an 
alternative, packages of pipe tobacco may be designated ``Tax Class L.''
    (b) Product weight. Every package of pipe tobacco shall, before 
removal subject to tax, have adequately imprinted

[[Page 831]]

thereon, or on a label securely affixed thereto, a clear statement of 
the actual pounds and ounces of the product contained therein.

[T.D. ATF-289, 54 FR 48842, Nov. 27, 1989]



Sec. 45.45b  Notice for roll-your-own tobacco.

    (a) Product designation. Before removal subject to tax, roll-your-
own tobacco must have adequately imprinted on, or on a label securely 
affixed to, the package, the designation roll-your-own tobacco'' or 
``cigarette tobacco'' or ``Tax Class J.''
    (b) Product weight. Before removal subject to tax, roll-your-own 
tobacco must have a clear statement of the actual weight in pounds and 
ounces of the product in the package. This statement must be adequately 
imprinted on, or on a label securely affixed to, the package.

(Approved by the Office of Management and Budget under control number 
1512-0502)

[T.D. ATF-429, 65 FR 57547, Sept. 25, 2000]



Sec. 45.45c  Package use-up rule.

    (a) A manufacturer must have used such packaging for roll-your-own 
tobacco before January 1, 2000.
    (b) A manufacturer of roll-your-own tobacco, may continue to place 
roll-your-own tobacco in packages that do not meet the marking 
requirements of Secs. 40.212 and 40.216b(b) until April 1, 2000.
    (c) A manufacturer of roll-your-own tobacco may continue to place 
roll-your-own tobacco in packages that do not meet the marking 
requirements of Sec. 40.216b(a) until October 1, 2000.

[T.D. ATF-427, 65 FR 40051, June 29, 2000]



Sec. 45.46  Tax-exempt label.

    Every package of tobacco products, and cigarette papers and tubes 
removed under this part shall have the words ``Tax-Exempt. For Use of 
U.S. Not To Be Sold.'' adequately imprinted on the package or on a label 
securely affixed thereto.

(72 Stat. 1422; 26 U.S.C. 5723)

[T.D. 6871, 31 FR 58, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975; and amended by T.D. ATF-232, 51 FR 28090, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



                           Subpart F--Records



Sec. 45.51  Supporting records.

    (a) Records of removals. Every manufacturer who removes tobacco 
products, and cigarette papers and tubes under this part must, in 
addition to the records kept under part 40 of this chapter, keep a 
supporting record of such removals and must make appropriate entries 
therein at the time of removal. The supporting record for each removal 
must show:
    (1) The date of removal;
    (2) The name and address of the Federal agency to which shipped or 
delivered;
    (3) The kind and quantity and,
    (4) for large cigars, the sale price.
    (b) Records of returns. If any tobacco products, or cigarette papers 
or tubes removed under this part are returned to the factory, such 
returns must be noted in the supporting record.
    (c) Commercial records. Where the manufacturer keeps, at the 
factory, copies of invoices or other commercial records containing the 
information required as to each removal, in such manner that the 
information may be readily ascertained therefrom, such copies will be 
considered the supporting record required by this section.
    (d) Retention period. The manufacturer must retain the supporting 
record for 3 years following the close of the year covered therein. The 
record must be made available for inspection

[[Page 832]]

by any appropriate ATF officer upon request.

(Approved by the Office of Management and Budget under control number 
1512-0363)

(See 26 U.S.C. 5741)

[T.D. ATF-420, 64 FR 71945, Dec. 22, 1999, as amended by T.D. ATF-472, 
Feb. 27, 2002]



PART 46--MISCELLANEOUS REGULATIONS RELATING TO TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES--Table of Contents




   Subpart A--Application of 26 U.S.C. 6423, as Amended, to Refund or 
    Credit of Tax on Tobacco Products, and Cigarette Papers and Tubes

                                 General

Sec.
46.1  Scope of regulations in this subpart.
46.2  Meaning of terms.
46.3  Applicability to certain credits or refunds.
46.4  Ultimate burden.
46.5  Conditions to allowance of credit or refund.
46.6  Requirements for persons intending to file claim.

                             Claim Procedure

46.7  Execution and filing of claim.
46.8  Data to be shown in claim.
46.9  Time for filing claim.

                                  Bond

46.10  Bond, Form 2490.
46.11  Corporate surety.
46.12  Deposit of securities in lieu of corporate surety.
46.13  Authority to approve bonds.
46.14  Termination of liability.
46.15  Release of pledged securities.

                                Penalties

46.16  Penalties.

                  Subpart B--Administrative Provisions

46.21  Delegations of the Director.
46.22  Forms prescribed.

                     Subpart C--Disaster Loss Claims

46.71  Scope of subpart.

                               Definitions

46.72  Meaning of terms.

                                Payments

46.73  Circumstances under which payment may be made.

                            Claims Procedure

46.74  Execution of claims.
46.75  Required information for claim.
46.76  Supporting evidence.
46.77  Time and place of filing.
46.78  Action by appropriate ATF officer.

     Destruction of Tobacco Products, and Cigarette Papers and Tubes

46.79  Supervision.

                                Penalties

46.80  Penalties.

                        Administrative Provisions

46.81  [Reserved]

Subparts D-E [Reserved]

                  Subpart F--Distribution of Cigarettes

                                 General

46.141  Scope of subpart.
46.142  Territorial extent.
46.143  Meaning of terms.

                                 Records

46.146  General requirements.
46.147  Required information.
46.150  Retention of records.

       Other Provisions Relating to the Distribution of Cigarettes

46.153  Authority of appropriate ATF officers to enter business 
          premises.

                       Penalities and Forfeitures

46.154  Penalties.
46.155  Forfeitures.

                 Subpart G--Dealers in Tobacco Products

46.161  Scope of subpart.
46.162  Territorial extent.
46.163  Meaning of terms.
46.164  Authority of ATF officers to enter premises.
46.165  Interference with administration.
46.166  Dealing in tobacco products.
46.167  Liability to tax.
46.168  Liability to penalties and forfeitures.

Subpart H [Reserved]

 Subpart I--Floor Stocks Tax on Cigarettes Held for Sale on January 1, 
                       2000 and on January 1, 2002

                                 General

46.191  Purpose of this subpart.
46.192  Terms used in this subpart.
46.193  Floor stocks tax defined.
46.194  Persons liable for this tax.
46.195  Persons not liable for this tax.

[[Page 833]]

46.196  Floor stocks requirements.

                               Inventories

46.201  Establish quantities of cigarettes.
46.202  Inventory for cigarettes with export markings.
46.203  How to identify cigarettes with export markings.
46.204  When to take inventory.
46.205  Physical inventory requirements.
46.206  Book or record inventory requirements.
46.207  Cigarettes in transit.
46.208  Guidelines to determine title of cigarettes in transit.
46.209  Cigarettes in a foreign trade zone.
46.210  Cigarettes held in bond.
46.211  Unmerchantable cigarettes.
46.212  Cigarettes in vending machines.
46.213  Cigarettes marked ``not for sale'' or ``complimentary''.

                          Compute Tax Liability

46.221  Determine amount of tax due.
46.222  Floor stocks tax rates.
46.223  Apply tax credit.

                           Filing Requirements

46.231  How to obtain a tax return.
46.232  Prepare tax return.
46.233  How to pay.
46.234  Tax return due dates.
46.235  Filing requirements for multiple locations.
46.236  Cigarettes in a warehouse.
46.237  Controlled group members.

                                 Records

46.241  Required records.
46.242  Period for maintaining records.
46.243  Cigarettes at multiple locations.
46.244  Where records must be maintained.
46.245  Errors in records.

                                 Claims

46.251  Before filing a claim.
46.252  When to file a claim for errors on return.
46.253  How to file a claim for errors on return.
46.254  Destruction of cigarettes by a Presidentially-declared major 
          disaster.
46.255  Additional reasons for filing a claim.

                     Alternate Methods or Procedures

46.261  Purpose of an alternate method or procedure.
46.262  How to apply for approval.
46.263  Conditions for approval.
46.264  Withdrawal of an alternate method or procedure.

                             ATF Authorities

46.270  [Reserved].
46.271  Entry, examination and testimony.
46.272  Issuance of summons.
46.273  Refusing entry or examination.
46.274  Penalties for failure to comply.

    Authority: 18 U.S.C. 2341-2346, 26 U.S.C. 5704, 5708, 5751, 5754, 
5761-5763, 6001, 6601, 6621, 6622, 7212, 7342, 7602, 7606, 7805; 44 
U.S.C. 3504(h), 49 U.S.C. 782, unless otherwise noted.

    Source: Redesignated by T.D. ATF-457, 66 FR 32220, June 14, 2001.

    Editorial Note: Nomenclature changes to part 46 appear by T.D. ATF-
457, 66 FR 32220, June 14, 2001.

    Cross Reference: For exportation of tobacco materials, tobacco 
products, and cigarette papers and tubes, without payment of tax, or 
with drawback of tax, see part 44.



   Subpart A--Application of 26 U.S.C. 6423, as Amended, to Refund or 
    Credit of Tax on Tobacco Products, and Cigarette Papers and Tubes

    Source: T.D. 6395, 24 FR 599, Jan. 28, 1959, unless otherwise noted. 
Redesignated at 40 FR 16835, Apr. 15, 1975.

                                 General



Sec. 46.1  Scope of regulations in this subpart.

    The regulations in this subpart relate to the limitations imposed by 
26 U.S.C. 6423, on the refund or credit of tax paid or collected in 
respect to any article of a kind subject to a tax imposed by 26 U.S.C. 
chapter 52.

[T.D. ATF-48, 44 FR 55857, Sept. 28, 1979]



Sec. 46.2  Meaning of terms.

    When used in this subpart, where not otherwise distinctly expressed 
or manifestly incompatible with the intent thereof, terms shall have the 
meaning ascribed in this section.
    Article. The commodity in respect to which the amount claimed was 
paid or collected as a tax.
    Claimant. Any person who files a claim for a refund or credit of tax 
under this subpart.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC.
    Owner. A person who, by reason of a proprietary interest in the 
article, furnished the amount claimed to the

[[Page 834]]

claimant for the purpose of paying the tax.
    Person. An individual, a trust, estate, partnership, association, 
company, or corporation.
    Tax. Any tax imposed by 26 U.S.C. chapter 52, or by any 
corresponding provision of prior internal revenue laws, and in the case 
of any commodity of a kind subject to a tax under such chapter, any tax 
equal to any such tax, any additional tax, or any floor stocks tax. The 
term includes an exaction denominated a ``tax'', and any penalty, 
addition to tax, additional amount, or interest applicable to any such 
tax.

[T.D. 6395, 24 FR 599, Jan. 28, 1959. Redesignated at 40 FR 16835, Apr. 
15, 1975]

    Editorial Note: For Federal Register citations affecting Sec. 46.2, 
see the List of CFR Sections Affected, which appears in the Finding Aids 
section of the printed volume and on GPO Access.



Sec. 46.3  Applicability to certain credits or refunds.

    The provisions of this subpart apply only where the credit or refund 
is claimed on the grounds that an amount of tax was assessed or 
collected erroneously, illegally, without authority, or in any manner 
wrongfully, or on the grounds that such amount was excessive. This 
subpart does not apply to:
    (a) Any claim for drawback,
    (b) Any claim made in accordance with any law expressly providing 
for credit or refund where an article is withdrawn from the market, 
returned to bond, lost, or destroyed, and
    (c) Any claim based solely on errors in computation of the quantity 
of an article subject to tax or on mathematical errors in computation of 
the amount of the tax due, or to any claim in respect of tax collected 
or paid on an article seized and forfeited, or destroyed, as contraband.

[T.D. 6395, 24 FR 599, Jan. 28, 1959. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-42, 42 FR 8372, Feb. 10, 1977]



Sec. 46.4  Ultimate burden.

    For the purposes of this subpart, the claimant, or owner, shall be 
treated as having borne the ultimate burden of an amount of tax only if:
    (a) He has not, directly or indirectly, been relieved of such burden 
or shifted such burden to any other person,
    (b) No understanding or agreement exists for any such relief or 
shifting, and
    (c) If he has neither sold nor contracted to sell the articles 
involved in such claim, he agrees that there will be no such relief or 
shifting, and furnishes bond as provided in Sec. 46.10.



Sec. 46.5  Conditions to allowance of credit or refund.

    No credit or refund to which this subpart is applicable shall be 
allowed or made, pursuant to a court decision or otherwise, of any 
amount paid or collected as a tax unless a claim therefor has been 
filed, as provided in this subpart, by the person who paid the tax and 
the claimant, in addition to establishing that he is otherwise legally 
entitled to credit or refund of the amount claimed, establishes:
    (a) That he bore the ultimate burden of the amount claimed, or
    (b) That he has unconditionally repaid the amount claimed to the 
person who bore the ultimate burden of such amount, or
    (c) That (1) the owner of the article furnished him the amount 
claimed for payment of the tax, (2) he has filed with the appropriate 
ATF officer the written consent of such owner to the allowance to the 
claimant of the credit or refund, and (3) such owner satisfies the 
requirements of paragraph (a) or (b) of this section.

[T.D. 6395, 24 FR 599, Jan. 28, 1959. Redesignated at 40 FR 16835, Apr. 
15, 1975, as amended by T.D. ATF-472, 67 FR 8880, Feb. 27, 2002]



Sec. 46.6  Requirements for persons intending to file claim.

    Any person who, having paid the tax with respect to an article, 
desires to claim refund or credit of any amount of such tax to which the 
provisions of this subpart are applicable must:
    (a) File a claim, as provided in Sec. 46.7,
    (b) Comply with any other provisions of law or regulations which may 
apply to the claim, and
    (c) If, at the time of filing the claim, neither he nor the owner 
has sold or contracted to sell the articles involved

[[Page 835]]

in the claim, file a bond on ATF Form 5620.10, as provided by 
Sec. 46.10.

[T.D. 6395, 24 FR 599, Jan. 28, 1959. Redesignated at 40 FR 16835, Apr. 
15, 1975, as amended by T.D. ATF-472, 67 FR 8880, Feb. 27, 2002]

                             Claim Procedure



Sec. 46.7  Execution and filing of claim.

    Claims to which this subpart is applicable must be executed on Form 
2635 (5620.8) in accordance with instructions for the form. (For 
provisions relating to hand-carried documents, see Sec. 70.304 of this 
chapter.) The claim shall set forth each ground upon which the claim is 
made in sufficient detail to apprise the appropriate ATF officer of the 
exact basis therefor. Allegations pertaining to the bearing of the 
ultimate burden relate to additional conditions which must be 
established for a claim to be allowed and are not in themselves legal 
grounds for allowance of a claim. There shall also be attached to the 
form and made a part of the claim the supporting data required by 
Sec. 46.8. All evidence relied upon in support of such claim shall be 
clearly set forth and submitted with the claim.

[T.D. 7008, 34 FR 3672, Mar. 1, 1969. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55857, Sept. 28, 1979; T.D. 
ATF-251, 52 FR 19342, May 22, 1987; T.D. ATF-301, 55 FR 47658, Nov. 14, 
1990; T.D. ATF-472, 67 FR 8880, Feb. 27, 2002]



Sec. 46.8  Data to be shown in claim.

    Claims to which this subpart is applicable, in addition to the 
requirements of Sec. 46.7, must set forth or contain the following:
    (a) A statement that the claimant paid the amount claimed as a 
``tax'' as defined in this subpart.
    (b) Full identification (by specific reference to the form number, 
the date of filing, the place of filing, and the amount paid on the 
basis of the particular form or return) of the tax forms or returns 
covering the payments for which refund or credit is claimed.
    (c) The written consent of the owner to allow the refund or credit 
to the claimant (where the owner of the article on which the tax was 
paid has furnished the claimant the amount claimed for the purpose of 
paying the tax).
    (d) If the claimant or the owner, as the case may be, has neither 
sold nor contracted to sell the articles involved in the claim, a 
statement that the claimant or the owner, as the case may be, agrees not 
to shift, directly or indirectly in any manner whatsoever, the burden of 
the tax to any other person.
    (e) If the claim is for refund of a floor stocks tax, or of an 
amount resulting from an increase in rate of tax applicable to an 
article, a statement as to whether the price of the article was 
increased on or following the effective date of such floor stocks tax or 
rate increase, and, if so, the date of the increase, together with full 
information as to the amount of such price increase.
    (f) Specific evidence (such as relevant records, invoices, or other 
documents, or affidavits of individuals having personal knowledge of 
pertinent facts) which will satisfactorily establish the conditions of 
allowance set forth in Sec. 46.5.

The regional director (compliance) may require the claimant to furnish 
as a part of the claim such additional information as he may deem 
necessary.

[T.D. ATF-42, 42 FR 8372, Feb. 10, 1977]



Sec. 46.9  Time for filing claim.

    No credit or refund of any amount of tax to which the provisions of 
this subpart apply shall be made unless the claimant files a claim 
therefor within the time prescribed by law and in accordance with the 
provisions of this subpart.

[T.D. ATF-42, 42 FR 8373, Feb. 10, 1977]

                                  Bond



Sec. 46.10  Bond, Form 2490.

    Each claim for a refund or credit of tax on articles which the 
claimant or the owner, as the case may be, has neither sold nor 
contracted to sell at the time of filing of the claim must be 
accompanied by a bond on ATF Form 5620.10. The bond shall be executed by 
the claimant or the owner of the articles, as the case may be, in 
accordance with the provisions of this subpart and the instructions 
printed on the form. Such bond shall be conditioned that there will be 
no relief or shifting of the

[[Page 836]]

ultimate burden of the tax to any other person. The penal sum shall not 
be less than the amount of tax claimed on all articles which have not 
been sold or contracted for sale at the time of filing of the claim. 
Bonds required by this subpart shall be given with corporate surety or 
with collateral security. A separate bond must be filed for each claim.

[T.D. 6395, 24 FR 599, Jan. 28, 1959. Redesignated at 40 FR 16835, Apr. 
15, 1975, as amended by T.D. ATF-472, 67 FR 8880, Feb. 27, 2002]



Sec. 46.11  Corporate surety.

    (a) Surety bonds required under the provisions of this subpart may 
be given only with corporate sureties holding certificates of authority 
from the Secretary of the Treasury as acceptable sureties on Federal 
bonds. Limitations concerning corporate sureties are prescribed by the 
Secretary in the current revision of the Treasury Department Circular 
No. 570 (refer to paragraph (c) of this section). The surety shall have 
no interest whatever in the business covered by the bond.
    (b) Each bond and each extension of coverage of bond shall at the 
time of filing be accompanied by a power of attorney authorizing the 
agent or officer who executed the bond to so act on behalf of the 
surety. The appropriate ATF officer who is authorized to approve the 
bond may, whenever he deems it necessary, require additional evidence of 
the authority of the agent or officer to execute the bond or extension 
of coverage of bond. The power of attorney shall be prepared on a form 
provided by the surety company and executed under the corporate seal of 
the company. If the power of attorney submitted is other than a manually 
signed document, it shall be accompanied by a certificate of its 
validity.
    (c) Treasury Department Circular No. 570 (Companies Holding 
Certificates of Authority as Acceptable Sureties on Federal Bonds and as 
Acceptable Reinsuring Companies) is published in the Federal Register 
annually as of the first workday in July. As they occur, interim 
revisions of the circular are published in the Federal Register. Copies 
may be obtained from the Audit Staff, Bureau of Government Financial 
Operations, Department of the Treasury, Washington, DC 20226.

(July 30, 1947, ch. 390, 61 Stat. 648, as amended (6 U.S.C. 6, 7); sec. 
202, Pub. L. 85-859, 72 Stat. 1421, as amended (26 U.S.C. 5711))

[T.D. ATF-92, 46 FR 46923, Sept. 23, 1981, as amended by T.D. ATF-472, 
67 FR 8880, Feb. 27, 2002]



Sec. 46.12  Deposit of securities in lieu of corporate surety.

    In lieu of corporate surety, the principal may pledge and deposit 
securities which are transferable and are guaranteed as to both interest 
and principal by the United States, in accordance with the provisions of 
31 CFR part 225.



Sec. 46.13  Authority to approve bonds.

    An appropriate ATF officer may approve all bonds required by this 
subpart.

[T.D. ATF-472, 67 FR 8880, Feb. 27, 2002]
    Assistant regional commissioners are authorized to approve all bonds 
required by this subpart.



Sec. 46.14  Termination of liability.

    Bonds on ATF Form 5620.10 will be terminated by the appropriate ATF 
officer on receipt of satisfactory evidence that the person giving the 
bond has disposed of the articles covered by the bond and that he bore 
the ultimate burden of the amount claimed and that no understanding or 
agreement exists whereby he will be relieved of such burden or shift 
such burden to another person.

[T.D. 6395, 24 FR 599, Jan. 28, 1959. Redesignated at 40 FR 16835, Apr. 
15, 1975, as amended by T.D. ATF-472, 67 FR 8880, Feb. 27, 2002]



Sec. 46.15  Release of pledged securities.

    Securities of the United States, pledged and deposited as provided 
by Sec. 46.12, shall be released only in accordance with the provisions 
of 31 CFR part 225. When the appropriate ATF officer is satisfied that 
they may be released, he shall fix the date or dates on which a part or 
all of such securities may be released. At any time prior to the release 
of such securities, the appropriate ATF officer may, for proper cause, 
extend the date of release for

[[Page 837]]

such additional length of time as he deems necessary.

[T.D. 6395, 24 FR 599, Jan. 28, 1959. Redesignated at 40 FR 16835, Apr. 
15, 1975, as amended by T.D. ATF-472, 67 FR 8880, Feb. 27, 2002]

                                Penalties



Sec. 46.16  Penalties.

    It is an offense punishable by fine and imprisonment for anyone to 
make or cause to be made any false or fraudulent claim upon the United 
States, or to make any false or fraudulent statements, or 
representations, in support of any claim, or to falsely or fraudulently 
execute any documents required by the provisions of the internal revenue 
laws, or any regulations made in pursuance thereof.



                  Subpart B--Administrative Provisions

    Source: T.D. ATF-472, 67 FR 8880, Feb. 27, 2002, unless otherwise 
noted.



Sec. 46.21  Delegations of the Director.

    The regulatory authorities of the Director contained in this part 
are delegated to appropriate ATF officers. These ATF officers are 
specified in ATF O 1130.28, Delegation of the Director's Authorities in 
27 CFR Parts 45 and 46. ATF delegation orders, such as ATF O 1130.28, 
are available to any interested party by mailing a request to the ATF 
Distribution Center, PO Box 5950, Springfield, VA 22150-5950, or by 
accessing the ATF web site (http://www.atf.treas.gov/).



Sec. 46.22  Forms prescribed.

    (a) The appropriate ATF officer is authorized to prescribe all forms 
required by this part. You must furnish all of the information required 
by each form as indicated by the headings on the form and the 
instructions for the form, and as required by this part. You must file 
each form in accordance with its instructions.
    (b) You may request forms from the ATF Distribution Center, P.O. Box 
5950, Springfield, Virginia 22153-5950, or by accessing the ATF web site 
(http://www.atf.treas.gov/).



                     Subpart C--Disaster Loss Claims



Sec. 46.71  Scope of subpart.

    This subpart prescribes the requirements necessary to implement 26 
U.S.C. 5708, concerning payments which may be made by the United States 
in respect to the internal revenue taxes paid or determined and customs 
duties paid on tobacco products, and cigarette papers and tubes removed, 
which were lost, rendered unmarketable, or condemned by a duly 
authorized official by reason of a disaster occurring in the United 
States on or after September 3, 1958.

[T.D. 6871, 31 FR 59, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55857, Sept. 28, 1979; T.D. 
ATF-232, 51 FR 28090, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 
1986]

                               Definitions



Sec. 46.72  Meaning of terms.

    When used in this subpart, the following terms shall have the 
meanings given in this section, unless the context clearly indicates 
otherwise. Words in the plural form shall include the singular, and vice 
versa, and words indicating the masculine gender shall include the 
feminine. The terms ``includes'' and ``including'' do not exclude things 
not listed which are in the same general class.
    Act. The Excise Tax Technical Changes Act of 1958 (Pub. L. 85-859, 
72 Stat. 1275), enacted September 2, 1958.
    Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this part by ATF Order 
1130.28, Delegation of the Director's Authorities in 27 CFR parts 45 and 
46.
    Claimant. The person who held the tobacco products or cigarette 
papers and tubes for sale at the time of the disaster and who files 
claim under this subpart.
    Commissioner of Customs. The Commissioner of Customs, U.S. Customs 
Service, The Department of the Treasury, Washington, DC.
    Disaster. A flood, fire, hurricane, earthquake, storm, or other 
catastrophe which has occurred in any part

[[Page 838]]

of the United States on and after the day following the date of 
enactment of the act and which the President of the United States has 
determined, under the Act of September 30, 1950 (64 Stat. 1109; 42 
U.S.C. 1855), was a ``major disaster'' as defined in such Act.
    Duly authorized official. Any Federal, State, or local government 
official in whom has been vested authority to condemn tobacco products 
and cigarette papers and tubes made the subject of a claim under this 
subpart.
    Duty or duties. Any duty or duties paid under the customs laws of 
the United States.
    Removal or remove. The removal of tobacco products or cigarette 
papers or tubes from the factory, or release of such articles from 
Customs custody.
    Sale price. The price for which large cigars are sold by the 
manufacturer or importer, determined in accordance with Secs. 40.22 or 
275.39 and used in computation of the tax.
    Tax paid or determined. The internal revenue tax on tobacco products 
and cigarette papers and tubes which has acutally been paid, or which 
has been determined pursuant to 26 U.S.C. 5703(b), and regulations 
thereunder, at the time of their removal subject to tax payable on the 
basis of a return.
    Tobacco Products. Cigars, cigarettes, smokeless tobacco, pipe 
tobacco, and roll-your-own tobacco.
    United States. When used in a geographical sense, includes only the 
States, and the District of Columbia.

[T.D. 6392, 24 FR 5300, June 30, 1959]

    Editorial Note: For Federal Register citations affecting Sec. 46.72, 
see the List of CFR Sections Affected, which appears in the Finding Aids 
section of the printed volume and on GPO Access.

                                Payments



Sec. 46.73  Circumstances under which payment may be made.

    An appropriate ATF officer shall allow payment (without interest) of 
an amount equal to the amount of tax paid or determined, and the 
Commissioner of Customs shall allow payment (without interest) of an 
amount equal to the amount of customs duty paid, on tobacco products, 
and cigarette papers and tubes removed, which are lost, rendered 
unmarketable, or condemned by a duly authorized official by reason of a 
disaster occurring in the United States on and after September 3, 1958. 
Such payments may be made only if, at the time of the disaster, such 
tobacco products, or cigarette papers or tubes were being held for sale 
by the claimant. No payment shall be made under this subpart with 
respect to any amount of tax or duty claimed or to be claimed under any 
other provision of law or regulations.

[T.D. 6871, 31 FR 59, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975 and amended by T.D. ATF-232, 51 FR 28090, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-472, 67 FR 8881, Feb. 27, 
2002]

                            Claims Procedure



Sec. 46.74  Execution of claims.

    Disaster loss claims for tobacco products or cigarette papers or 
tubes must be executed on ATF Form 2635 (5620.8), Claim--Alcohol, 
Tobacco and Firearms Taxes, in accordance with the instructions on the 
form. If a claim involves taxes on both domestic and imported products, 
the quantities of each must be shown separately in the claim. Prepare a 
separate claim in respect of customs duties.

[T.D. ATF-420, 64 FR 71945, Dec. 22, 1999]



Sec. 46.75  Required information for claim.

    The claim should contain the following information:
    (a) That the tax on such tobacco products, or cigarette papers or 
tubes has been paid or determined and customs duty has been paid;
    (b) That such tobacco products, or cigarette papers or tubes were 
lost, rendered unmarketable, or condemned by a duly authorized official, 
by reason of a disaster;
    (c) The type and date of occurrence of the disaster and the location 
of the tobacco products, or cigarette papers or tubes at that time;
    (d) That the claimant was not indemnified by any valid claim of 
insurance or otherwise in respect of the tax, or tax and duty, on the 
tobacco products, or cigarette papers or tubes covered by the claim;
    (e) That no amount of internal revenue tax or customs duty claimed 
has

[[Page 839]]

been or will be otherwise claimed under any other provision of law or 
regulations,
    (f) That the claimant is entitled to payment under this subpart, and
    (g) The claim must set forth the quantity and kind of tobacco 
products and cigarette papers and tubes in sufficient detail to 
calculate the amount of tax and duty paid on these products, 
substantially as shown in the examples below:

                                         [Example using 1993-1999 Rates]
----------------------------------------------------------------------------------------------------------------
               Quantity                             Article                       Rate of tax            Amount
----------------------------------------------------------------------------------------------------------------
20,000................................  Small cigars..................  $1.125 per thousand...........    $22.50
1,000.................................  Large cigars--sale price $100/  12.75% of sale price..........     12.75
                                         thousand.
500...................................  Large cigars--sale price $236/  $30 per thousand..............     15.00
                                         thousand.
10,000................................  Small cigarettes..............  $12 per thousand..............    120.00
5,000.................................  Large cigarettes..............  $25.20 per thousand...........    126.00
2,000 sets............................  Cigarette papers--50 per set..  $0.0075 per set...............     15.00
1,000 sets............................  Cigarette papers--100 per set.  $0.015 per set................     15.00
1,000.................................  Cigarette tubes...............  $0.015 per 50 tubes...........      0.30
100 lbs...............................  Chewing tobacco...............  $0.12 per pound...............     12.00
200 lbs...............................  Snuff.........................  $0.36 per pound...............     72.00
100 lbs...............................  Pipe tobacco..................  $0.675 per pound..............     67.50
300 lbs...............................  Roll-your-own tobacco.........  $0 per pound..................  ........
    Total claimed.....................    ............................    ............................    478.05
----------------------------------------------------------------------------------------------------------------


                                         [Example using 2000-2001 Rates]
----------------------------------------------------------------------------------------------------------------
               Quantity                             Article                       Rate of tax            Amount
----------------------------------------------------------------------------------------------------------------
20,000................................  Small cigars..................  $1.594 per thousand...........    $31.88
1,000.................................  Large cigars--sale price $100/  18.063% of sale price.........     18.06
                                         thousand.
500...................................  Large cigars--sale price $236/  $42.50 per thousand...........     21.25
                                         thousand.
10,000................................  Small cigarettes..............  $17.00 per thousand...........    170.00
5,000.................................  Large cigarettes..............  $35.70 per thousand...........    178.50
199,975...............................  Cigarette papers..............  $0.0106 per 50 papers.........     42.40
1,000.................................  Cigarette tubes...............  $0.0213 per 50 tubes..........      0.43
100 lbs...............................  Chewing tobacco...............  $0.17 per pound...............     17.00
200 lbs...............................  Snuff.........................  $0.51 per pound...............    102.00
100 lbs...............................  Pipe tobacco..................  $0.9567 per pound.............     95.67
300 lbs...............................  Roll-your-own tobacco.........  $0.9567 per pound.............    287.01
    Total claimed.....................    ............................    ............................    964.20
----------------------------------------------------------------------------------------------------------------


                                    [Example using rates for 2002 and After]
----------------------------------------------------------------------------------------------------------------
               Quantity                             Article                       Rate of tax            Amount
----------------------------------------------------------------------------------------------------------------
20,000................................  Small cigars..................  $1.828 per thousand...........     36.56
1,000.................................  Large cigars--sale price $100/  20.719% of sale price.........     20.72
                                         thousand.
500...................................  Large cigars--sale price $236/  $48.75 per thousand...........     24.38
                                         thousand.
10,000................................  Small cigarettes..............  $19.50 per thousand...........    195.00
5,000.................................  Large cigarettes..............  $40.95 per thousand...........    204.75
199,975...............................  Cigarette papers..............  $0.0122 per 50 papers.........     48.80
1,000.................................  Cigarette tubes...............  $0.0244 per 50 tubes..........      0.49
100 lbs...............................  Chewing tobacco...............  $0.195 per pound..............     19.50
200 lbs...............................  Snuff.........................  $0.585 per pound..............    117.00
100 lbs...............................  Pipe tobacco..................  $1.0969 per pound.............    109.69
300 lbs...............................  Roll-your-own tobacco.........  $1.0969 per pound.............    329.07
    Total claimed.....................    ............................    ............................  1,105.96
----------------------------------------------------------------------------------------------------------------


[T.D. ATF-420, 64 FR 71945, Dec. 22, 1999]



Sec. 46.76  Supporting evidence.

    The claimant must support the claim with any available evidence 
(such as inventories, statements, invoices, bills, records, stamps, and 
labels), relating to the tobacco products or cigarette papers or tubes 
on hand at the time of the disaster and claimed to have been

[[Page 840]]

lost, rendered unmarketable, or condemned as a result thereof. If the 
claim is for refund of duty, the claimant must furnish, if practicable, 
the customs entry number, date of entry, and the name of the port of 
entry.

[T.D. ATF-420, 64 FR 71946, Dec. 22, 1999]



46.77   Time and place of filing.

    Disaster loss claims must be filed within 6 months after the date on 
which the President makes the determination that the disaster has 
occurred. All forms, including claims for duty on imported products, 
must be filed with the appropriate ATF officer.

[T.D. ATF-420, 64 FR 71946, Dec. 22, 1999]



Sec. 46.78  Action by appropriate ATF officer.

    The appropriate ATF officer must act upon each claim for payment 
(without interest) of an amount equal to the tax paid or determined 
filed under this subpart and must notify the claimant. Claims and 
supporting data involving customs duties will be forwarded to the 
Commissioner of Customs with a summary statement of such officer's 
findings.

[T.D. ATF-472, 67 FR 8881, Feb. 27, 2002]

     Destruction of Tobacco Products, and Cigarette Papers and Tubes



Sec. 46.79  Supervision.

    Before payment is made under this subpart in respect of the tax, or 
tax and duty, on tobacco products, or cigarette papers or tubes rendered 
unmarketable or condemned by a duly authorized official, such tobacco 
products, or cigarette papers or tubes must be destroyed by suitable 
means under the supervision of an appropriate ATF officer who will be 
assigned for that purpose by another appropriate ATF officer. However, 
if the destruction of such tobacco products, or cigarette papers or 
tubes has already occurred, and if the appropriate ATF officer who acts 
on the claim is satisfied with the supervision of such destruction, ATF 
supervision will not be required.

[T.D. ATF-472, 67 FR 8881, Feb. 27, 2002]

                                Penalties



Sec. 46.80  Penalties.

    Penalties are provided in 26 U.S.C. 7206 and 7207 for the execution 
under the penalties of perjury of any false or fraudulent statement in 
support of any claim and for the filing of any false or fraudulent 
document under this subpart. All provisions of law, including penalties, 
applicable in respect of internal revenue taxes on tobacco products, and 
cigarette papers and tubes shall, insofar as applicable and not 
inconsistent with this subpart, be applied in respect of the payments 
provided for in this subpart to the same extent as if such payments 
constituted refunds of such taxes.

[T.D. 6871, 31 FR 60, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55857, Sept. 28, 1979; T.D. 
ATF-232, 51 FR 28092, Aug. 5, 1986; T.D. ATF-243, 51 FR 43194, Dec. 1, 
1986]

                        Admimistrative Provisions



Sec. 46.81  [Reserved]

Subparts D-E [Reserved]



                  Subpart F--Distribution of Cigarettes

    Source: 45 FR 48612, July 21, 1980, unless otherwise noted.

                                 General



Sec. 46.141  Scope of subpart.

    The regulations in this subpart relate to the distribution of 
cigarettes in excess of 60,000 in a single transaction.



Sec. 46.142  Territorial extent.

    The provisions of the regulations in this subpart apply in the 
several States of the United States, the District of Columbia, the 
Commonwealth of Puerto Rico, and the Virgin Islands.



Sec. 46.143  Meaning of terms.

    When used in this subpart, terms are defined as follows in this 
section. Words in the plural shall include the singular, and vice versa. 
Words indicating the masculine gender shall include the feminine. The 
terms ``includes'' and ``including'' do not exclude

[[Page 841]]

other things not named which are in the same general class or are 
otherwise within the scope of the term defined.
    Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this part by ATF Order 
1130.28, Delegation of the Director's Authorities in 27 CFR Parts 45 and 
46.
    Business premises. When used with respect to a distributor, the 
property on which the cigarettes are kept or stored. The business 
premises includes the property where the records of a distributor are 
kept.
    Common or contract carrier. A carrier holding a certificate of 
convenience and necessity, a permit for contract carrier by motor 
vehicle, or other valid operating authority under the Interstate 
Commerce Act, or under equivalent operating authority from a regulatory 
agency of the United States or of any State.
    Contraband cigarettes. Any quantity of cigarettes in excess of 
60,000, if--
    (a) The cigarettes bear no evidence of the payment of applicable 
State cigarette taxes in the State where the cigarettes are found;
    (b) The State in which the cigarettes are found requires a stamp, 
impression, or other indication to be placed on packages or other 
containers of cigarettes to evidence payment of cigarette taxes; and
    (c) The cigarettes are in the possession of any person other than an 
exempted person.
    Disposition. The movement of cigarettes from a person's business 
premises, wherever situated, by shipment or other means of distribution.
    Distribute. To sell, ship, issue, give, transfer, or otherwise 
dispose of.
    Distributor. Any person who distributes more than 60,000 cigarettes 
in a single transaction.
    Exempted person. Any person who is--
    (a) Holding a permit issued pursuant to Chapter 52 of the Internal 
Revenue Code of 1954 as a manufacturer of tobacco products or as an 
export warehouse proprietor;
    (b) Operating a customs bonded warehouse pursuant to section 311 or 
555 of the Tariff Act of 1930 (19 U.S.C. 1311 or 1555);
    (c) An agent of a tobacco products manufacturer, an export warehouse 
proprietor, or an operator of a customs bonded warehouse;
    (d) A common or contract carrier transporting the cigarettes 
involved under a proper bill of lading or freight bill which states the 
quantity, source, and destination of the cigarettes;
    (e) Licensed or otherwise authorized by the State, in which he 
possesses cigarettes, to account for and pay cigarette taxes imposed by 
that State; and who has complied with the accounting and payment 
requirements relating to his license or authorization with respect to 
the cigarettes involved; or
    (f) An agent of the United States, of an individual State, or of a 
political subdivision of a State and having possession of cigarettes in 
connection with the performance of official duties.
    (g) Operating within a foreign-trade zone established under 19 
U.S.C., section 81b, when the cigarettes involved have been entered into 
the zone under zone-restricted status or, in respect to foreign 
cigarettes, have been admitted into the zone but have not been entered 
in the United States.
    Person. Any individual, corporation, company, association, firm, 
partnership, society, or joint stock company.
    State. A State of the United States, the District of Columbia, the 
Commonwealth of Puerto Rico, or the Virgin Islands.

[45 FR 48612, July 21, 1980, as amended by T.D. ATF-472, 67 FR 8881, 
Feb. 27, 2002]

                                 Records



Sec. 46.146  General requirements.

    Each distributor of cigarettes shall keep copies of invoices, bills 
of lading, or other suitable commercial records relating to each 
disposition of more than 60,000 cigarettes. Dividing a single agreement 
for the disposition of more than 60,000 cigarettes into the delivery of 
smaller components of 60,000 cigarettes or less does not exempt the 
distributor from the recordkeeping requirements of this subpart. The 
distributor shall include the information prescribed in Sec. 46.147 in 
his commercial records of disposition.

[[Page 842]]



Sec. 46.147  Required information.

    (a) Distributors who are exempted persons. Each distributor who is 
an exempted person as defined in Sec. 46.143 shall show the following 
information in his commercial records.
    (1) For each disposition of more than 60,000 cigarettes to an 
exempted person; or for each disposition of more than 60,000 cigarettes 
to a person who is not an exempted person and which is delivered by the 
distributor to the recipient's place of business, the distributor shall 
show on dated records--
    (i) The full name of the purchaser (or the recipient if there is no 
purchaser);
    (ii) The street address (including city and state) to which the 
cigarettes are destined; and
    (iii) The quantity of cigarettes disposed of.
    (2) For each disposition of more than 60,000 cigarettes, other than 
the dispositions specified in paragraph (a)(1) of this section, the 
distributor shall show on dated records--
    (i) The full name of the purchaser (if any);
    (ii) The name, address (including city and state), and signature of 
the person receiving the cigarettes;
    (iii) The street address (including city and state) to which the 
cigarettes are destined;
    (iv) The quantity of cigarettes disposed of;
    (v) The driver's license number of the individual receiving the 
cigarettes;
    (vi) The license number of the vehicle in which the cigarettes are 
removed from the distributor's business premises;
    (vii) A declaration by the individual receiving the cigarettes of 
the specific purpose of receipt (such as personal use, resale, delivery 
to another person, etc.); and
    (viii) A declaration by the person receiving the cigarettes of the 
name and address of his principal when he is acting as an agent.
    (b) Distributors who are not exempted persons. Each distributor who 
is not an exempted person as defined in Sec. 46.143 shall show on dated 
commercial records the information specified in paragraphs (a)(2) (i) 
through (viii) of this section for each disposition of more than 60,000 
cigarettes.

(Approved by the Office of Management and Budget under control number 
1512-0391)

[45 FR 48612, July 21, 1980, as amended by T.D. ATF-172, 49 FR 14943, 
Apr. 16, 1984]



Sec. 46.150  Retention of records.

    (a) General. Each distributor of cigarettes shall retain the records 
required by Secs. 46.146 and 46.147 for three years following the close 
of the year in which the records are made. The distributor shall keep 
the required records on his business premises.
    (b) Shorter retention periods. The appropriate ATF officer may, 
pursuant to an application submitted by a distributor, approve a shorter 
retention period where--
    (1) The distributor requesting the shorter retention period is an 
agent of a tobacco products manufacturer;
    (2) The tobacco products manufacturer will keep the required record 
for each disposition of more than 60,000 cigarettes from the agent's 
premises for the full retention period specified in paragraph (a) of 
this section; and
    (3) The approval of a shorter retention period will not unduly 
hinder the administration of enforcement of this subpart.
    (c) Application requirements. Each distributor proposing to employ a 
shorter retention period shall submit a written application, in 
duplicate, to the appropriate ATF officer. A distributor may not employ 
a shorter retention period until approval is received from the 
appropriate ATF officer. Each application should indicate the duration 
of the proposed retention period and should include the information 
required by paragraph (b) of this section.

[45 FR 48612, July 21, 1980, as amended by T.D. ATF-472, 67 FR 8880, 
8881, Feb. 27, 2002]

       Other Provisions Relating to the Distribution of Cigarettes



Sec. 46.153  Authority of appropriate ATF officers to enter business premises.

    Any appropriate ATF officer may enter the business premises of any 
distributor of cigarettes to inspect the records required by 
Secs. 46.146 through

[[Page 843]]

46.147 or to inspect any cigarettes stored on the premises--
    (a) Pursuant to duly issued search warrant or an administrative 
inspection warrant; or
    (b) Upon the consent of the distributor to enter his premises.

[45 FR 48612, July 21, 1980, as amended by T.D. ATF-472, 67 FR 8881, 
Feb. 27, 2002]

                        Penalties and Forfeitures



Sec. 46.154  Penalties.

    (a) Any person who knowingly ships, transports, receives, possesses, 
sells, distributes, or purchases contraband cigarettes shall be fined 
not more than $100,000 or imprisoned not more than five years, or both.
    (b) Any person who knowingly violates any regulation contained in 
this subpart or makes any false statement or misrepresentation with 
respect to the information required to be recorded by this subpart shall 
be fined not more than $5,000 or imprisoned not more than three years, 
or both.



Sec. 46.155  Forfeitures.

    (a) Any contraband cigarettes involved in any violation of the 
provisions of 18 U.S.C. chapter 114 shall be subject to seizure and 
forfeiture. All provisions of the Internal Revenue Code of 1954 (title 
26 U.S.C.) relating to the seizure, forfeiture, and disposition of 
firearms, as defined in section 5845(a) of that Code, shall, so far as 
applicable, extend to seizures and forfeitures of contraband cigarettes 
under the provisions of 18 U.S.C. chapter 114.
    (b) Any vessel, vehicle or aircraft used to transport, carry, 
convey, or conceal or possess any contraband cigarettes with respect to 
which there has been committed any violation of any provision of 18 
U.S.C. chapter 114 or the regulations in this subpart shall be subject 
to seizure and forfeiture under the Customs laws, as provided by the Act 
of August 9, 1939 (49 U.S.C. 781-788).

(18 U.S.C. 2344; 53 Stat. 1291 (49 U.S.C. 782))



                 Subpart G--Dealers in Tobacco Products

    Source: T.D. 6573, 26 FR 8202, Aug. 31, 1961, unless otherwise 
noted. Redesignated at 40 FR 16835, Apr. 15, 1975.



Sec. 46.161  Scope of subpart.

    The regulations in this subpart relate to the purchase, receipt, 
possession, offering for sale, or sale or other disposition of tobacco 
products by dealers in such products.

[T.D. 6871, 81 FR 60, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975 and amended by T.D. ATF-232, 51 FR 28092, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986]



Sec. 46.162  Territorial extent.

    The provisions of the regulations in this subpart shall apply in the 
several States of the United States and the District of Columbia.



Sec. 46.163  Meaning of terms.

    When used in this subpart, where not otherwise distinctly expressed 
or manifestly incompatible with the intent thereof, each of the 
following terms shall have the meaning ascribed in this section. Words 
in the plural form shall include the singular, words in the singular 
form shall include the plural, and words importing the masculine gender 
shall include the feminine. The terms ``includes'' and ``including'' do 
not exclude things not enumerated which are in the same general class.
    Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this part by ATF Order 
1130.28, Delegation of the Director's Authorities in 27 CFR Parts 45 and 
46.
    Dealer. Any person who sells, or offers for sale, at wholesale or 
retail levels, any cigars or cigarettes after removal.
    Manufacturer of tobacco products. Any person who manufactures 
cigars, cigarettes, smokeless tobacco, pipe tobacco, or roll-your-own 
tobacco but does not include:

[[Page 844]]

    (1) A person who produces tobacco products solely for that person's 
own consumption or use; or
    (2) A proprietor of a Customs bonded manufacturing warehouse with 
respect to the operation of such warehouse.
    Package. The container in which tobacco products are put up by the 
manufacturer or the importer and offered for delivery to the consumer.
    Person. An individual, partnership, association, company, 
corporation, estate, or trust.
    Removal or remove. The removal of tobacco products from the factory 
or release from Customs custody, including the smuggling or other 
unlawful importation of such articles into the United States.
    Tobacco Products. Cigars, cigarettes, smokeless tobacco, pipe 
tobacco, and roll-your-own tobacco.
    U.S.C. The United States Code.

[T.D. 6573, 26 FR 8202, Aug. 31, 1961, as amended by T.D. 6871, 31 FR 
60, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 15, 1975]

    Editorial Note: For Federal Register citations affecting 
Sec. 46.163, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and on GPO Access.



Sec. 46.164  Authority of ATF officers to enter premises.

    Any appropriate ATF officer may enter in the daytime any premises 
where tobacco products are kept or stored, so far as it may be necessary 
for the purpose of examining such products. When such premises are open 
at night, any appropriate ATF officer may enter them, while so open, in 
the performance of his official duties. The owner of such premises, or 
person having the superintendence of the same, who refuses to admit any 
appropriate ATF officer or permit him to examine such products shall be 
liable to the penalties prescribed by law for the offense. Operators of 
vending machines shall make the tobacco products in their machines 
available for inspection upon the request of any appropriate ATF 
officer.

(68A Stat. 872, 903; 26 U.S.C. 7342, 7606)

[T.D. 6871, 31 FR 60, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975 and amended by T.D. ATF-232, 51 FR 28092, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-472, 67 FR 8881, Feb. 27, 
2002]



Sec. 46.165  Interference with administration.

    Whoever, corruptly or by force or threats of force, endeavors to 
hinder or obstruct the administration of this subpart, or endeavors to 
intimidate or impede any appropriate ATF officer acting in his official 
capacity, or forcibly rescues or attempts to rescue or causes to be 
rescued any property, after it has been duly seized for forfeiture to 
the United States in connection with a violation of the internal revenue 
laws, shall be liable to the penalties prescribed by law.

(68A Stat. 855; 26 U.S.C. 7212)

[T.D. 6573, 26 FR 8202, Aug. 31, 1961. Redesignated at 40 FR 16835, Apr. 
15, 1975, as amended by T.D. ATF-472, Feb. 27, 2002]



Sec. 46.166  Dealing in tobacco products.

    (a) All tobacco products purchased, received, possessed, offered for 
sale, sold or otherwise disposed of, by any dealer must be in proper 
packages which bear the mark or notice as prescribed in parts 270 and 
275 of this chapter. Tobacco products may be sold, or offered for sale, 
at retail from such packages, provided the products remain in the 
packages until removed by the customer or in the presence of the 
customer. Where a vending machine is used, tobacco products must 
similarly be vended in proper packages or directly from such packages.
    (b) Tobacco products manufactured in the United States and labeled 
for exportation under chapter 52 of title 26, U.S.C. may not be sold or 
held for sale for domestic consumption in the United States unless such 
articles are removed from their export packaging and repackaged by the 
original manufacturer into new packaging that does

[[Page 845]]

not contain an export label. This applies to articles labeled for export 
even if the packaging or the appearance of such packaging to the 
consumer of such articles has been modified or altered by a person other 
than the original manufacturer so as to remove or conceal or attempt to 
remove or conceal (including by placement of a sticker over) the export 
label.
    (c) For penalty and forfeiture provisions applicable to the selling, 
relanding or receipt of articles which have been labeled or shipped for 
exportation, see Sec. 275.83 of this chapter.

[T.D. ATF-465, 66 FR 45618, Aug. 29, 2001]



Sec. 46.167  Liability to tax.

    Any dealer who, with intent to defraud the United States, possesses 
tobacco products (a) upon which the tax has not been paid or determined 
in the manner and at the time prescribed in parts 40 and 275 of this 
chapter or (b) which, after removal without payment of tax pursuant to 
section 5704, I.R.C., and regulations issued thereunder, have been 
diverted from the applicable purpose or use specified in that section or 
(c) which are not put up in packages prescribed in parts 40 and 275 of 
this chapter or are put up in packages not bearing the marks and notices 
prescribed in such regulations shall be liable for a tax equal to the 
tax on such products.

(72 Stat. 1424; 26 U.S.C. 5751)

[T.D. 6871, 31 FR 60, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 
15, 1975 and amended by T.D. ATF-232, 51 FR 28092, Aug. 5, 1986; T.D. 
ATF-243, 51 FR 43194, Dec. 1, 1986; T.D. ATF-460, 66 FR 390 93, July 27, 
2001]



Sec. 46.168  Liability to penalties and forfeitures.

    Any dealer who fails to comply with the provisions of this subpart 
becomes liable to the civil and criminal penalties, and forfeitures, 
provided by law.

(72 Stat. 1425, 1426; 26 U.S.C. 5761, 5762, and 5763)

Subpart H [Reserved]



 Subpart I--Floor Stocks Tax on Cigarettes Held for Sale on January 1, 
                       2000 and on January 1, 2002

    Authority: Section 9302, Pub.L. 105-33, 111 Stat. 251, unless 
otherwise noted.

    Source: T.D. ATF-423, 64 FR 71958, Dec. 22, 1999, unless otherwise 
noted.

                                 General



Sec. 46.191  Purpose of this subpart.

    The regulations in this subpart implement the floor stocks tax on 
cigarettes held for sale the first moment on January 1, 2000 and on 
January 1, 2002.



Sec. 46.192  Terms used in this subpart.

    (a) Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this subpart by ATF 
Order 1130.28, Delegation of the Director's Authorities in parts 45 and 
46.
    (b) Controlled group. Pursuant to 26 U.S.C. 5061(e)(3), the term 
``controlled group'' means a controlled group of corporations, as 
defined in 26 U.S.C. 1563, and implementing regulations in 26 CFR 
1.1563-1 through 1.1563-4, except that the words ``at least 80 percent'' 
shall be replaced by the words ``more than 50 percent'' in each place 
they appear in subsection (a) of 26 U.S.C. 1563, as well as in the 
implementing regulations. Controlled groups of corporations include, but 
are not limited to:
    (1) Parent-subsidiary controlled groups as defined in 26 CFR 1.1563-
1 (a)(2).
    (2) Brother-sister controlled groups as defined in 26 CFR 1.1563-
1(a)(3).
    (3) Combined groups as defined in 26 CFR 1.1563-1(a)(4). Also, the 
rules for a controlled group of corporations apply in a similar fashion 
to groups which include partnerships and/or sole proprietorships. If one 
entity maintains more than 50% control over a group consisting of 
corporations and one, or more, partnerships and/or sole proprietorships, 
all are members of a controlled group.

[[Page 846]]

    (c) Foreign trade zone. A foreign trade zone established and 
operated pursuant to the Act of June 18, 1934, as amended, 19 U.S.C. 
81a.
    (d) Large cigarettes. Cigarettes weighing more than three pounds per 
thousand.
    (e) Person. When the term ``person'' is used in this subpart, it 
refers to an individual, partnership, association, company, corporation, 
a trust, or an estate. It also includes any State or political 
subdivision.
    (f) Small cigarettes. Cigarettes weighing not more than three pounds 
per thousand.
    (g) Tax increase dates. For the purposes of this floor stocks tax, 
the tax increase dates are January 1, 2000 and January 1, 2002.

[T.D. ATF-423, 64 FR 71958, Dec. 22, 1999, as amended by ATF-457, 66 FR 
32220, June 14, 2001; T.D. ATF-472, 67 FR 8881, Feb. 27, 2002]



Sec. 46.193  Floor stocks tax defined.

    Floor stocks tax is a tax imposed on all Federally taxpaid or tax 
determined cigarettes held for sale on the first moment a tax increase 
becomes effective. The tax is the difference between the previous excise 
tax rate and the new tax rate.



Sec. 46.194  Persons liable for this tax.

    You are liable for this tax if you hold for sale any taxpaid or 
taxdetermined cigarettes at the moment a tax increase is effective. You 
are liable for floor stocks tax on cigarettes that you own that may be 
in transit (refer to Secs. 46.207 and 46.208). You may also be liable if 
you hold cigarettes in a foreign trade zone (refer to Sec. 46.209).



Sec. 46.195  Persons not liable for this tax.

    If you do not hold any taxpaid or taxdetermined cigarettes for sale 
at the moment a tax increase is effective, you are not liable for this 
tax.



Sec. 46.196  Floor stocks requirements.

    (a) Take an inventory. Establish the quantity of cigarettes subject 
to the floor stocks tax held for sale at the beginning of the tax 
increase dates (January 1, 2000 and January 1, 2002). You may take a 
physical inventory or you may use a book or record inventory, as 
specified in Secs. 46.205 and 46.206.
    (b) Compute tax amount. Compute the amount of tax for the cigarettes 
held for sale at the start of each of the tax increase dates. Refer to 
the table shown in Sec. 46.222. Apply the tax credit as provided by 
Sec. 46.223.
    (c) File tax return. After you have computed the floor stocks tax, 
you must file a return for each tax increase date if tax is due.
    (d) Maintain records. Maintain all records used to determine the 
quantity of cigarettes on hand at the start of each tax increase date. 
You must also maintain all computations used to determine the amount of 
tax owed. Refer to Sec. 46.241.


(Approved by the Office of Management and Budget under control number 
1512-0554)

                               Inventories



Sec. 46.201  Establish quantities of cigarettes.

    You must take an inventory to establish the quantity of cigarettes 
subject to the floor stocks tax. You may take a physical inventory or a 
book or record inventory.



Sec. 46.202  Inventory for cigarettes with export markings.

    Your inventory of cigarettes must count separately cigarettes that 
have been labeled for export from the United States.



Sec. 46.203  How to identify cigarettes with export markings.

    Each package (the container in which cigarettes are put up by the 
manufacturer and delivered to the consumer) of cigarettes will have:
    (a) A mark or a label with the words ``Tax-exempt. For use outside 
U.S.'' or ``U.S. Tax Exempt. For use outside U.S.''; or
    (b) A stamp, sticker, or notice, required by a foreign country or 
possession of the United States, which identifies such country or 
possession.



Sec. 46.204  When to take inventory.

    You must take your physical inventory or book or record inventory 
during the periods noted in the table to this section.

[[Page 847]]



------------------------------------------------------------------------
  Date of floor stocks tax      Not earlier than        No later than
------------------------------------------------------------------------
January 1, 2000.............  December 26, 1999...  January 10, 2000.
January 1, 2002.............  December 26, 2001...  January 10, 2002.
------------------------------------------------------------------------



Sec. 46.205  Physical inventory requirements.

    Your physical inventory must include a written record of:
    (a) Quantity and Type. You must record the quantity and type of 
cigarettes in sufficient detail to determine the tax rate as stated in 
Sec. 46.222 and whether the cigarettes have export markings as stated in 
Sec. 46.203. The following chart provides the type of cigarette and 
method to use to determine quantities:

------------------------------------------------------------------------
         Type or kind                       Inventory method
------------------------------------------------------------------------
Small cigarettes (Class A)...  Count the:
                                 Number of cigarettes without
                                export markings.
                                 Number of cigarettes with
                                export markings.
Large cigarettes (Class B)...  Count the:
                                 Number of large cigarettes
                                6.5 or less in length without
                                export markings.
                                 Number of large cigarettes
                                6.5 or less in length with
                                export markings.
                                 Number of each size of large
                                cigarettes more than 6.5 in
                                length without export markings.
                                 Number of each size of large
                                cigarettes more than 6.5 in
                                length with export markings.
------------------------------------------------------------------------

    (b) Date. Date(s) the inventory was taken.
    (c) Name. Name of individual(s) conducting the inventory and the 
name of the person for whom the inventory was taken.
    (d) Location. Record where the inventory was taken (street address, 
city and State).
    (e) Time. The physical inventory must be taken between the dates 
shown in Sec. 46.204. If you do not take the physical inventory as of 
the close of business on the last respective business days of 1999 and 
2001, the records must be reconciled. The inventory records must be 
reconciled to reflect the actual quantity of cigarettes held as of the 
first moment of January 1, 2000 and January 1, 2002, respectively. These 
records must include all supporting records of receipt and disposition.



Sec. 46.206  Book or record inventory requirements.

    You may use a book or record inventory if you have source records 
that show:
    (a) The quantity of receipts and dispositions of all cigarettes.
    (b) The actual type and quantities of cigarettes on hand as if a 
physical inventory had taken place the moment the tax increase became 
effective. Refer to Sec. 46.205(a).
    (c) The name and address of the consignor and consignee.
    (d) The date of receipt or disposition of the cigarettes.
    (e) The brand name of each product.
    (f) If you do not take the inventory as of the close of business on 
the last respective business days of 1999 and 2001, the records must be 
reconciled as described in Sec. 46.205(e).



Sec. 46.207  Cigarettes in transit.

    Cigarettes in transit must be included in your inventory if you hold 
title to the cigarettes. If you have transferred the title, you must 
document the title transfer in writing. For example, you may mark the 
bill of lading with a written statement that indicates the time and 
place of the title transfer.



Sec. 46.208  Guidelines to determine title of cigarettes in transit.

    You may use the following guidelines to establish who holds title to 
cigarettes in transit.
    (a) If State law mandates the change in title, then no agreement or 
contract between seller and buyer can alter it.

[[Page 848]]

    (b) In the absence of State law governing the change of title 
between seller and buyer, the Uniform Commercial Code allows the seller 
and buyer to agree when title passes.
    (c) If there is no State law or agreement between the seller and 
buyer, the Uniform Commercial Code states that title transfer depends on 
how the seller ships the cigarettes.
    (1) Freight on board (F.O.B.) destination. The title transfer occurs 
when the seller completes the performance of the physical delivery of 
the cigarettes.
    (2) Freight on board (F.O.B.) shipping point. The title transfer 
occurs when the seller transfers the title at the time and place of 
shipment, which is generally by common carrier.



Sec. 46.209  Cigarettes in a foreign trade zone.

    You are liable for the tax and must take an inventory when either of 
the following conditions apply:
    (a) Internal revenue taxes have been determined or Customs duties 
liquidated, with respect to cigarettes pursuant to the first proviso of 
section 3(a) of the Act of June 18, 1934 (48 Stat. 998, 19 U.S.C. 81a), 
or
    (b) Cigarettes are held by a Customs officer pursuant to the second 
proviso of section 3(a) of the Act of June 18, 1934 (48 Stat. 998, 19 
U.S.C. 81a).



Sec. 46.210  Cigarettes held in bond.

    If you are a manufacturer or an export warehouse proprietor and hold 
cigarettes in ATF bond on the tax increase dates, the floor stocks tax 
does not apply to those cigarettes. Likewise, if you have cigarettes 
held in a Customs bonded warehouse, the floor stocks tax does not apply 
on those cigarettes.



Sec. 46.211  Unmerchantable cigarettes.

    Any cigarettes that you hold for return to a supplier because of 
some defect are not subject to the floor stocks tax. You must prepare a 
separate list of these items. You cannot include as unmerchantable any 
items that may be held because of poor market demand or to reduce your 
inventory.



Sec. 46.212  Cigarettes in vending machines.

    You do not have to inventory cigarettes held in a vending machine 
for retail sale, provided:
    (a) The vending machine holding the cigarettes is placed at a 
location where retail sales occur, and
    (b) The cigarettes are ready to be dispensed by a consumer.



Sec. 46.213  Cigarettes marked ``not for sale'' or ``complimentary''.

    Cigarettes marked ``not for sale'' or ``complimentary'' that are 
part of a sale (for example, buy two packs and get one pack free) are 
subject to the floor stocks tax and must be included in the book or 
record inventory as required by Secs. 46.205 and 46.206. Cigarettes that 
are marked ``not for sale'' or ``complimentary'' and are intended to be 
given away and not in conjunction with any sale are not subject to the 
floor stocks tax.

                          Compute Tax Liability



Sec. 46.221  Determine amount of tax due.

    After you have taken your inventory, apply the applicable tax rate 
for each type of cigarette using the table in Sec. 46.222. Multiply the 
amount of each type of cigarette by the applicable tax rate.



Sec. 46.222  Floor stocks tax rates.

------------------------------------------------------------------------
          Type or kind              January 1, 2000     January 1, 2002
------------------------------------------------------------------------
Small Cigarettes (3 pounds or     $5 per 1,000 or 10  $2.50 per 1,000 or
 less per 1,000).                  cents per 20.       5 cents per 20
Large Cigarettes (more than 3     $10.50 per 1,000    $5.25 per 1,000 or
 pounds per 1,000).                or 21 cents per     10.5 cents per 20
                                   20.
------------------------------------------------------------------------
  Special rule: For large
   cigarettes over 6\1/2\ inches
   long determine the rate for
   each length. Multiply the
   rate prescribed for small
   cigarettes by the whole
   number that represents the
   addition of each 2\3/4\
   inches and any fraction of
   the length, as one (1)
------------------------------------------------------------------------


[[Page 849]]



Sec. 46.223  Apply tax credit.

    You are allowed a credit against your floor stocks tax of up to 
$500. However, controlled groups are eligible for only one credit for 
the entire group. The credit may be divided equally among the members or 
apportioned in any other manner agreeable to the members.

                           Filing Requirements



Sec. 46.231  How to obtain a tax return.

    You may obtain ATF Form 5000.28T, Floor Stocks Tax Return for 
Cigarettes, from any of the following sources:
    (a) ATF web site (www.atf.treas.gov);
    (b) ATF Distribution Center, PO Box 5950, Springfield, Virginia 
22150-5950, telephone (703) 455-7801; or
    (c) National Revenue Center, 550 Main Street, Cincinnati, Ohio 
45202-3263, telephone (800) 398-2282 or (513) 684-7151.



Sec. 46.232  Prepare tax return.

    If your tax liability is zero, you do not have to complete or file a 
tax return. Otherwise, complete and file the floor stocks tax return in 
accordance with the instructions for the form.



Sec. 46.233  How to pay.

    Your payment must be in the form of a check or money order and sent 
with ATF Form 5000.28T unless you are required to file by electronic 
fund transfer as described in paragraph (a) of this section.
    (a) Electronic fund transfer. If you pay any other excise taxes 
collected by ATF by electronic fund transfer, then you must also send 
your payment for this floor stocks tax by an electronic fund transfer. 
ATF P 5000.10, Payment by Electronic Funds Transfer, specifies how to 
make an electronic fund transfer. You can get ATF P 5000.10 from any of 
the following sources:
    (1) ATF web site (www.atf.treas.gov);
    (2) ATF Distribution Center, P.O. Box 5950, Springfield, Virginia 
22150-5950, telephone (703) 455-7801; or
    (3) National Revenue Center, 550 Main Street, Cincinnati, Ohio 
45202-3263, telephone (800) 398-2282 or (513) 684-7151.
    (b) [Reserved]



Sec. 46.234  Tax return due dates.

------------------------------------------------------------------------
           Tax increase date              File tax return no later than:
------------------------------------------------------------------------
January 1, 2000........................  March 31, 2000 \1\
January 1, 2002........................  April 1, 2002
------------------------------------------------------------------------
\1\ Section 9302(j) of P.L. 105-33 states that the due date is April 1,
  2000. However, section 5703(b)(2)(E) of the Internal Revenue Code
  requires that when a due date falls on a Saturday, Sunday or a legal
  holiday, the preceding day that is not a Saturday, Sunday or legal
  holiday will be the due date. Therefore, the floor stocks tax for this
  period is due on March 31, 2000 since April 1, 2000, falls on a
  Saturday.



Sec. 46.235  Filing requirements for multiple locations.

    You may file a consolidated return if all locations or places of 
business have the same employer identification number. You also have the 
option of filing a separate return for each place of business or 
location.



Sec. 46.236  Cigarettes in a warehouse.

    (a) Cigarettes warehoused at one or more locations must be reported 
on the tax return representing the location where the cigarettes will be 
offered for sale.
    (b) Cigarettes offered for sale at several locations must be 
reported on a tax return filed by one or more of the locations. The 
cigarettes can be reported by a single location or apportioned among 
several locations.



Sec. 46.237  Controlled group members.

    If you are a member of a controlled group, you must file if the 
combined liability with other members is more than $500. If you have 
your own employer identification number, you must file a separate tax 
return. You may take the tax credit discussed in Sec. 46.223 if it is 
apportioned to you as a member of the controlled group.

                                 Records



Sec. 46.241  Required records.

    You must maintain:
    (a) Inventory records.
    (b) Tax computations.
    (c) Names, addresses and employer identification number of all 
controlled group members, if applicable.
    (d) Copy of tax return, if you filed one.
    (e) List of locations and warehouses covered by the tax return.
    (f) Any approved alternate method or procedure under 46.263.

[[Page 850]]



Sec. 46.242  Period for maintaining records.

    An appropriate ATF officer may require, in writing, that you keep 
records and any tax returns for an additional period of not more than 3 
years. Keep your records in accordance with time frames shown in the 
table to this section.

------------------------------------------------------------------------
                                           Maintain your records for at
              If you have:                            least:
------------------------------------------------------------------------
Taken an inventory but are not required  3 years from the tax increase
 to file a tax return.                    date.
Filed a tax return on or before the due  3 years from the due date of
 date of the return.                      the tax return, as specified
                                          in Sec.  46.234.
Filed a tax return after the due date    3 years from the date of filing
 of the tax return.                       the tax return.
------------------------------------------------------------------------



Sec. 46.243  Cigarettes at multiple locations.

    You must maintain a list of each place where you hold cigarettes 
subject to the floor stocks tax. This list must include:
    (a) Address.
    (b) Name of the proprietor (if different).
    (c) The employer identification number (if different).
    (d) Quantity and classification of all cigarettes held at each 
location.



Sec. 46.244  Where records must be maintained.

    Keep your inventory records at your principal place of business. All 
records must be made available to an appropriate ATF officer upon 
demand.



Sec. 46.245  Errors in records.

    If your inventory records or tax computation records contain an 
error that resulted in an overpayment of tax, you can file a claim for 
refund. If your inventory or tax computation records contain an error 
that resulted in an underpayment of tax, you must file an additional tax 
return on which you show and pay the additional tax, interest and any 
applicable penalties.

                                 Claims



Sec. 46.251  Before filing a claim.

    Before you can file a claim for refund, you must have paid your 
floor stocks tax on ATF F 5200.28T and subsequently determined that you 
overpaid the tax.



Sec. 46.252  When to file a claim for errors on return.

    You must file the claim within 3 years from the due date of filing 
the tax return or 2 years from the time the tax was paid, whichever is 
later.



Sec. 46.253  How to file a claim for errors on return.

    Your claim must be filed on ATF Form 2635 (5620.8). The claim must 
include detailed and sufficient evidence to support why you believe the 
tax was overpaid. The claim and supporting documentation must be mailed 
or delivered to the address shown on the form.


(Approved by the Office of Management and Budget under control number 
1512-0554)



Sec. 46.254  Destruction of cigarettes by a Presidentially-declared major disaster.

    After you have paid the floor stocks tax, you may file a claim for 
refund of tax on cigarettes lost, rendered unmarketable, or condemned 
because of a Presidentially-declared major disaster. Refer to subpart C 
of this part for the time, evidence and procedures for filing a claim.



Sec. 46.255  Additional reasons for filing a claim.

    (a) Manufacturer. 27 CFR part 40, subparts I and K state the times, 
reasons and procedures for filing a claim for refund.
    (b) Export warehouse proprietor. 27 CFR part 44, subpart G, states 
the time, evidence and procedures for filing a claim for refund.
    (c) Exported taxpaid. If cigarettes are shipped from the United 
States, you

[[Page 851]]

may file a claim for drawback of taxes under subpart K of 27 CFR part 
44.
    (d) Importer. An importer may follow the procedures for filing a 
claim as described in 27 CFR part 275, subpart I.

[T.D. ATF-423, 64 FR 71958, Dec. 22, 1999, as amended by T.D. ATF-460, 
66 FR 39093, July 27, 2001; T.D. ATF-464, 66 FR 43479, Aug. 20, 2001]

                     Alternate Methods or Procedures



Sec. 46.261  Purpose of an alternate method or procedure.

    An alternate method or procedure is a different way of performing a 
requirement than is provided in this subpart of regulations. You would 
only make a request if you wanted to perform a requirement in a 
different way than is provided in this subpart.



Sec. 46.262  How to apply for approval.

    You must apply in writing to the National Revenue Center, 550 Main 
Street, Cincinnati, Ohio 45202-3263. You must describe the alternate 
method or procedure and reasons you wish to use it. You cannot use the 
alternate method until you receive written approval from ATF.


(Approved by the Office of Management and Budget under control number 
1512-0554)



Sec. 46.263  Conditions for approval.

    The alternate method or procedure may be approved if it meets all of 
the following conditions:
    (a) There is good cause for its use.
    (b) It is consistent with the purpose and effect intended by the 
prescribed method or procedure.
    (c) It affords equivalent security to the revenue.
    (d) It is not contrary to any provision of law.
    (e) It will not result in an increase in cost to the Government.
    (f) It will not hinder the effective administration of this subpart 
such as delaying timely payment of taxes.
    (g) It is not a method or procedure that relates to the payment or 
collection of tax.



Sec. 46.264  Withdrawal of an alternate method or procedure.

    The approval will be withdrawn if revenue is jeopardized or 
administration of this subpart is hindered. ATF will give you a written 
notice of the withdrawal.

                             ATF Authorities



Sec. 46.270  [Reserved]



Sec. 46.271  Entry, examination and testimony.

    Appropriate ATF officers, in performing official duties, may enter 
any premises to examine cigarettes subject to floor stocks tax. They may 
enter the premises during the day or may also enter at night if the 
premises are open. Appropriate ATF officers may audit and examine all 
cigarettes, inventory records, books, papers, or other resource data for 
the purpose of ascertaining, determining or collecting floor stocks tax. 
They may take testimony (under oath) of any person when inquiring as to 
proper payment of floor stocks taxes.



Sec. 46.272  Issuance of summons.

    Appropriate ATF officers can issue summonses when there is no 
Justice Department referral under the authority stated in 27 CFR 70.22. 
The summons will state a place and time for such items or person to 
appear. ATF will issue a summons to require:
    (a) Any books of account or other data pertaining to liability of 
floor stocks tax.
    (b) Any person liable for the floor stocks tax or having possession 
of books of account or other data.
    (c) Any other appropriate person in connection with the books or tax 
liability.



Sec. 46.273  Refusing entry or examination.

    If you or another person in charge of the premises refuses to admit 
any appropriate ATF officer or prevents any appropriate ATF officer from 
examining the records or cigarettes, you may be liable for the penalties 
described in 26 U.S.C. 7342 and 7212, respectively.

[[Page 852]]



Sec. 46.274  Penalties for failure to comply.

    If you fail to follow these regulations, ATF may apply applicable 
civil and criminal penalties under the Internal Revenue Code of 1986. 
For example, failure to file and failure to pay penalties may be 
assessed against you if you do not timely file your tax return or timely 
pay the taxes due. In addition, interest under 26 U.S.C. 6621 accrues 
for any underpayment of tax and on all assessed penalties until paid.



                         SUBCHAPTER C--FIREARMS





PART 47--IMPORTATION OF ARMS, AMMUNITION AND IMPLEMENTS OF WAR--Table of Contents




                            Subpart A--Scope

Sec.
47.1  General.
47.2  Relation to other laws and regulations.

                         Subpart B--Definitions

47.11  Meaning of terms.

                Subpart C--The U.S. Munitions Import List

47.21  The U.S. Munitions Import List.
47.22  Forgings, castings, and machined bodies.

                         Subpart D--Registration

47.31  Registration requirement.
47.32  Application for registration and refund of fee.
47.33  Notification of changes in information furnished by registrants.
47.34  Maintenance of records by persons required to register as 
          importers of Import List articles.
47.35  Forms prescribed.

                           Subpart E--Permits

47.41  Permit requirement.
47.42  Application for permit.
47.43  Terms of permit.
47.44  Permit denial, revocation or suspension.
47.45  Importation.
47.46  Articles in transit.

                   Subpart F--Miscellaneous Provisions

47.51  Import certification and delivery verification.
47.52  Import restrictions applicable to certain countries.
47.53  Exemptions.
47.54  Administrative procedures inapplicable.
47.55  Departments of State and Defense consulted.
47.56  Authority of Customs officers.
47.57  U.S. military defense articles.

             Subpart G--Penalties, Seizures and Forfeitures

47.61  Unlawful importation.
47.62  False statements or concealment of facts.
47.63  Seizure and forfeiture.

    Authority: 22 U.S.C. 2778.

    Source: T.D. ATF-8, 39 FR 3251, Jan. 25, 1974, unless otherwise 
noted.



                            Subpart A--Scope



Sec. 47.1  General.

    The regulations in this part relate to that portion of Section 38, 
Arms Export Control Act of 1976, as amended, which is concerned with the 
importation of arms, ammunition and implements of war. This part 
contains the U.S. Munitions Import List and includes procedural and 
administrative requirements and provisions relating to registration of 
importers, permits, articles in transit, import certification, delivery 
verification, import restrictions applicable to certain countries, 
exemptions, U.S. military firearms or ammunition, penalties, seizures, 
and forfeitures. All designations and changes in designation of articles 
subject to import control under Section 414 of the Mutual Security Act 
of 1954, as amended, have the concurrence of the Secretary of State and 
the Secretary of Defense.

[T.D. ATF-8, 39 FR 3251, Jan. 25, 1974, as amended by T.D. ATF-215, 50 
FR 42158, Oct. 18, 1985]



Sec. 47.2  Relation to other laws and regulations.

    (a) All of those items on the U.S. Munitions Import List (see 
Sec. 47.21) which

[[Page 853]]

are ``firearms'' or ``ammunition'' as defined in 18 U.S.C. 921(a) are 
subject to the interstate and foreign commerce controls contained in 
Chapter 44 of Title 18 U.S.C. and 27 CFR Part 178 and if they are 
``firearms'' within the definition set out in 26 U.S.C. 5845(a) are also 
subject to the provisions of 27 CFR Part 179. Any person engaged in the 
business of importing firearms or ammunition as defined in 18 U.S.C. 
921(a) must obtain a license under the provisions of 27 CFR Part 178, 
and if he imports firearms which fall within the definition of 26 U.S.C. 
5845(a) must also register and pay special tax pursuant to the 
provisions of 27 CFR Part 179. Such licensing, registration and special 
tax requirements are in addition to registration under subpart D of this 
part.
    (b) The permit procedures of subpart E of this part are applicable 
to all importations of articles on the U.S. Munitions Import List not 
subject to controls under 27 CFR Part 178 or 179. U.S. Munitions Import 
List articles subject to controls under 27 CFR Part 178 or 27 CFR Part 
179 are subject to the import permit procedures of those regulations if 
imported into the United States (within the meaning of 27 CFR Parts 178 
and 179).
    (c) Articles on the U.S. Munitions Import List imported for the 
United States or any State or political subdivision thereof are exempt 
from the import controls of 27 CFR Part 178 but are not exempt from 
control under Section 38, Arms Export Control Act of 1976, unless 
imported by the United States or any agency thereof. All such 
importations not imported by the United States or any agency thereof 
shall be subject to the import permit procedures of subpart E of this 
part.
    (d) For provisions requiring the registration of persons engaged in 
the business of brokering activities with respect to the importation of 
any defense article or defense service, see Department of State 
regulations in 22 CFR part 129.

[T.D. ATF-215, 50 FR 42158, Oct. 18, 1985, as amended by T.D. ATF-426, 
65 FR 38197, June 20, 2000]



                         Subpart B--Definitions



Sec. 47.11  Meaning of terms.

    When used in this part and in forms prescribed under this part, 
where not otherwise distinctly expressed or manifestly incompatible with 
the intent thereof, terms shall have the meanings ascribed in this 
section. Words in the plural form shall include the singular, and vice 
versa, and words imparting the masculine gender shall include the 
feminine. The terms ``includes'' and ``including'' do not exclude other 
things not enumerated which are in the same general class or are 
otherwise within the scope thereof.
    ATF officer. An officer or employee of the Bureau of Alcohol, 
Tobacco and Firearms (ATF) authorized to perform any functions relating 
to the administration or enforcement of this part.
    Article. Any of the arms, ammunition, and implements of war 
enumerated in the U.S. Munitions Import List.
    Bureau. Bureau of Alcohol, Tobacco and Firearms, the Department of 
the Treasury.
    Carbine. A short-barrelled rifle whose barrel is generally not 
longer than 22 inches and is characterized by light weight.
    CFR. The Code of Federal Regulations.
    Chemical agent. A substance useful in war which, by its ordinary and 
direct chemical action, produces a powerful physiological effect.
    Defense articles. Any item designated in Sec. 47.21 or Sec. 47.22. 
This term includes models, mockups, and other such items which reveal 
technical data directly relating to Sec. 47.21 or Sec. 47.22. For 
purposes of Category XXII, any item enumerated on the U.S. Munitions 
List (22 CFR Part 121).
    Defense services. (a) The furnishing of assistance, including 
training, to foreign persons in the design, engineering, development, 
production, processing, manufacture, use, operation, overhaul, repair, 
maintenance, modification, or reconstruction of defense articles, 
whether in the United States or abroad; or
    (b) The furnishing to foreign persons of any technical data, whether 
in the United States or abroad.

[[Page 854]]

    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC 20226.
    Executed under the penalties of perjury. Signed with the prescribed 
declaration under the penalties of perjury as provided on or with 
respect to the application, form, or other document or, where no form of 
declaration is prescribed, with the declaration: ``I declare under the 
penalties of perjury that this ---- (insert type of document such as 
statement, certificate, application, or other document), including the 
documents submitted in support thereof, has been examined by me and, to 
best of my knowledge and belief, is true, correct, and complete.''
    Firearms. A weapon, and all components and parts therefor, not over 
.50 caliber which will or is designed to or may be readily converted to 
expel a projectile by the action of an explosive, but shall not include 
BB and pellet guns, and muzzle loading (black powder) firearms 
(including any firearm with a matchlock, flintlock, percussion cap, or 
similar type of ignition system) or firearms covered by Category I(a) 
established to have been manufactured in or before 1898.
    Import or importation. Bringing into the United States from a 
foreign country any of the articles on the Import List, but shall not 
include intransit, temporary import or temporary export transactions 
subject to Department of State controls under Title 22, Code of Federal 
Regulations.
    Import List. The list of articles contained in Sec. 47.21 and 
identified therein as ``The U.S. Munitions Import List''.
    Machinegun. A ``machinegun'', ``machine pistol'', ``submachinegun'', 
or ``automatic rifle'' is a firearm originally designed to fire, or 
capable of being fired fully automatically by a single pull of the 
trigger.
    Permit. The same as ``license'' for purposes of 22 U.S.C. 1934(c).
    Person. A partnership, company, association, or corporation, as well 
as a natural person.
    Pistol. A hand-operated firearm having a chamber integral with, or 
permanently aligned with, the bore.
    Regional director (compliance). The principal ATF regional official 
responsible for administering regulations in this part.
    Revolver. A hand-operated firearm with a revolving cylinder 
containing chambers for individual cartridges.
    Rifle. A shoulder firearm discharging bullets through a rifled 
barrel at least 16 inches in length, including combination and drilling 
guns.
    Sporting type sight including optical. A telescopic sight suitable 
for daylight use on a rifle, shotgun, pistol, or revolver for hunting or 
target shooting.
    This chapter. Title 27, Code of Federal Regulations, Chapter I (27 
CFR Chapter I).
    United States. When used in the geographical sense, includes the 
several States, the Commonwealth of Puerto Rico, the insular possessions 
of the United States, the District of Columbia, and any territory over 
which the United States exercises any powers of administration, 
legislation, and jurisdiction.

(26 U.S.C. 7805 (68A Stat. 917), 27 U.S.C. 205 (49 Stat. 981 as 
amended), 18 U.S.C. 926 (82 Stat. 959), and sec. 38, Arms Export Control 
Act (22 U.S.C. 2778, 90 Stat. 744))

[T.D. ATF-48, 43 FR 13535, Mar. 31, 1978; 44 FR 55840, Sept. 28, 1979, 
as amended by T.D. ATF-202, 50 FR 14382, Apr. 12, 1985; T.D. ATF-215, 50 
FR 42158, Oct. 18, 1985]



                Subpart C--The U.S. Munitions Import List



Sec. 47.21  The U.S. Munitions Import List.

    The U.S. Munitions List compiled by the Department of State, Office 
of Defense Trade Controls, and published at 22 CFR 121.1, with the 
deletions indicated, has been adopted as an enumeration of the defense 
articles subject to controls under this part. The expurgated list, set 
out below, shall, for the purposes of this part, be known as the U.S. 
Munitions Import List:

                     The U.S. Munitions Import List

                          category i--firearms

    (a) Nonautomatic and semiautomatic firearms, to caliber .50 
inclusive, combat shotguns, and shotguns with barrels less than 18 
inches in length, and all components and parts for such firearms.

[[Page 855]]

    (b) Automatic firearms and all components and parts for such 
firearms to caliber .50 inclusive.
    (c) Insurgency-counterinsurgency type firearms of other weapons 
having a special military application (e.g. close assault weapons 
systems) regardless of caliber and all components and parts for such 
firearms.
    (d) Firearms silencers and suppressors, including flash suppressors.
    (e) Riflescopes manufactured to military specifications and 
specifically designed or modified components therefor.
    Note: Rifles, carbines, revolvers, and pistols, to caliber .50 
inclusive, combat shotguns, and shotguns with barrels less than 18 
inches in length are included under Category I(a). Machineguns, 
submachineguns, machine pistols and fully automatic rifles to caliber 
.50 inclusive are included under Category I(b).

                    category ii--artillery projectors

    (a) Guns over caliber .50, howitzers, mortars, and recoiless rifles.
    (b) Military flamethrowers and projectors.
    (c) Components, parts, accessories, and attachments for the articles 
in paragraphs (a) and (b) of this category, including but not limited to 
mounts and carriages for these articles.

                        category iii--ammunition

    (a) Ammunition for the arms in Categories I and II of this section.
    (b) Components, parts, accessories, and attachments for articles in 
paragraph (a) of this category, including but not limited to cartridge 
cases, powder bags, bullets, jackets, cores, shells (excluding shotgun 
shells), projectiles, boosters, fuzes and components therefor, primers, 
and other detonating devices for such ammunition.
    (c) Ammunition belting and linking machines.
    (d) Ammunition manufacturing machines and ammunition loading 
machines (except handloading ones).
    Note: Cartridge and shell casings are included under Category III 
unless, prior to their importation, they have been rendered useless 
beyond the possibility of restoration for use as a cartridge or shell 
casing by means of heating, flame treatment, mangling, crushing, 
cutting, or popping.

   category iv--launch vehicles, guided missiles, ballistic missiles, 
                   rockets, torpedoes, bombs and mines

    (a) Rockets (including but not limited to meteorological and other 
sounding rockets), bombs, grenades, torpedoes, depth charges, land and 
naval mines, as well as launchers for such defense articles, and 
demolition blocks and blasting caps.
    (b) Launch vehicles and missile and anti-missile systems including 
but not limited to guided, tactical and strategic missiles, launchers, 
and systems.
    (c) Apparatus, devices, and materials for the handling, control, 
activation, monitoring, detection, protection, discharge, or detonation 
of the articles in paragraphs (a) and (b) of this category. Articles in 
this category include, but are not limited to, the following: Fuses and 
components for the items in this category, bomb racks and shackles, bomb 
shackle release units, bomb ejectors, torpedo tubes, torpedo and guided 
missile boosters, guidance system equipment and parts, launching racks 
and projectors, pistols (exploders), igniters, fuze arming devices, 
intervalometers, guided missile launchers and specialized handling 
equipment, and hardened missile launching facilities.
    (d) Missile and space vehicle powerplants.
    (e) Military explosive excavating devices.
    (f) Ablative materials fabricated or semifabricated from advanced 
composites (e.g., silica, graphite, carbon, carbon/carbon, and boron 
filaments) for the articles in this category that are derived directly 
from or specifically developed or modified for defense articles.
    (g) Non/nuclear warheads for rockets and guided missiles.
    (h) All specifically designed components or modified components, 
parts, accessories, attachments, and associated equipment for the 
articles in this category.
    Note: Military demolition blocks and blasting caps referred to in 
Category IV(a) do not include the following articles:
    (a) Electric squibs.
    (b) No. 6 and No. 8 blasting caps, including electric ones.
    (c) Delay electric blasting caps (including No. 6 and No. 8 
millisecond ones).
    (d) Seismograph electric blasting caps (including SSS, Static-
Master, Vibrocap SR, and SEISMO SR).
    (e) Oil well perforating devices.
    Note: Category V of ``Munitions List'' deleted as inapplicable to 
imports.

         category vi--vessels of war and special naval equipment

    (a) Warships, amphibious warfare vessels, landing craft, mine 
warfare vessels, patrol vessels, auxiliary vessels and service craft, 
experimental types of naval ships and any vessels specifically designed 
or modified for military purposes.
    (b) Turrets and gun mounts, arresting gear, special weapons systems, 
protective systems, submarine storage batteries, catapults and other 
components, parts, attachments, and accessories specifically designed or 
modified for combatant vessels.
    (c) Mine sweeping equipment, components, parts, attachments and 
accessories specifically designed or modified therefor.

[[Page 856]]

    (d) Harbor entrance detection devices (magnetic, pressure, and 
acoustic ones) and controls and components therefor.
    (e) Naval nuclear propulsion plants, their land prototypes and 
special facilities for their construction, support and maintenance. This 
includes any machinery, device, component, or equipment specifically 
developed or designed or modified for use in such plants or facilities.
    Note: The term ``vessels of war'' includes, but is not limited to 
the following:
    (a) Combatant vessels:
    (1) Warships (including nuclear-powered versions):
    (i) Aircraft carriers (CV, CVN)
    (ii) Battleships (BB)
    (iii) Cruisers (CA, CG, CGN)
    (iv) Destroyers (DD, DDG)
    (v) Frigates (FF, FFG)
    (vi) Submarines (SS, SSN, SSBN, SSG, SSAG).
    (2) Other Combatant Classifications:
    (i) Patrol Combatants (PC, PHM)
    (ii) Amphibious Helicopter/Landing Craft Carriers (LHA, LPD, LPH)
    (iii) Amphibious Landing Craft Carriers (LKA, LPA, LSD, LST)
    (iv) Amphibious Command Ships (LCC)
    (v) Mine Warfare Ships (MSO).
    (b) Auxiliaries:
    (1) Mobile Logistics Support:
    (i) Under way Replenishment (AD, AF, AFS, AO, AOE, AOR)
    (ii) Material Support (AD, AR, AS).
    (2) Support Ships:
    (i) Fleet Support Ships (ARS, ASR, ATA, ATF, ATS)
    (ii) Other Auxiliaries (AG, AGDS, AGF, AGM, AGOR, AGOS, AGS, AH, AK, 
AKR, AOG, AOT, AP, APB, ARC, ARL, AVM, AVT).
    (c) Combatant Craft:
    (1) Patrol Craft:
    (i) Coastal Patrol Combatants (PB, PCF, PCH, PTF)
    (ii) River, Roadstead Craft (ATC, PBR).
    (2) Amphibious Warfare Craft:
    (i) Landing Craft (AALC, LCAC, LCM, LCPL, LCPR, LCU, LWT, SLWT)
    (ii) Special Warfare Craft (LSSC, MSSC, SDV, SWCL, SWCM).
    (3) Mine Warfare Craft:
    (i) Mine Countermeasures Craft (MSB, MSD, MSI, MSM, MSR).
    (d) Support and Service Craft:
    (1) Tugs (YTB, YTL, YTM)
    (2) Tankers (YO, YOG, YW)
    (3) Lighters (YC, YCF, YCV, YF, YFN, YFNB, YFNX, YFR, YFRN, YFU, YG, 
YGN, YOGN, YON, YOS, YSR, YWN)
    (4) Floating Dry Docks (AFDB, AFDL, AFDM, ARD, ARDM, YFD)
    (5) Miscellaneous (APL, DSRV, DSV, IX, NR, YAG, YD, YDT, YFB, YFND, 
YEP, YFRT, YHLC, YM, YNG, YP, YPD, YR, YRB, YRBN, YRDH, YRDM, YRR, YRST, 
YSD).
    (e) Coast Guard Patrol and Service Vessels and Craft:
    (1) Coast Guard Cutters (CGC, WHEC, WMEC)
    (2) Patrol Craft (WPB)
    (3) Icebreakers (WAGB)
    (4) Oceanography Vessels (WAGO)
    (5) Special Vessels (WIX)
    (6) Buoy Tenders (WLB, WLM, WLI, WLR, WLIC)
    (7) Tugs (WYTM, WYTL)
    (8) Light Ships (WLV).

                category vii--tanks and military vehicles

    (a) Military type armed or armored vehicles, military railway 
trains, and vehicles specifically designed or modified to accommodate 
mountings for arms or other specialized military equipment or fitted 
with such items.
    (b) Military tanks, combat engineer vehicles, bridge launching 
vehicles, halftracks and gun carriers.
    (c) Self-propelled guns and howitzers.
    Note: Category VII (d) and (e) of ``Munitions List'' deleted as 
inapplicable to imports.
    (f) Amphibious vehicles.
    (g) Engines specifically designed or modified for the vehicles in 
paragraphs (a), (b), (c), and (f) of this category.
    (h) All specifically designed or modified components and parts, 
accessories, attachments, and associated equipment for the articles in 
this category, including but not limited to military bridging and deep 
water fording kits.
    Note: An ``amphibious vehicle'' in Category VII(f) is an automotive 
vehicle or chassis which embodies all-wheel drive, which is equipped to 
meet special military requirements, and which has sealed electrical 
systems and adaptation features for deep water fording.

      category viii--aircraft, spacecraft, and associated equipment

    (a) Aircraft, including but not limited to helicopters, non-
expansive balloons, drones and lighter-than-air aircraft, which are 
specifically designed, modified, or equipped for military purposes. This 
includes but is not limited to the following military purposes: gunnery, 
bombing, rocket or missile launching, electronic and other surveillance, 
reconnaissance, refueling, aerial mapping, military liaison, cargo 
carrying or dropping, personnel dropping, airborne warning and control, 
and military training.
    Note: Category VIII (b) through (j) and Categories IX, X, XI, XII 
and XIII of ``Munitions List'' deleted as inapplicable to imports.
    Note: In Category VIII, ``aircraft'' means aircraft designed, 
modified, or equipped for a

[[Page 857]]

military purpose, including aircraft described as ``demilitarized.'' All 
aircraft bearing an original military designation are included in 
Category VIII. However, the following aircraft are not so included so 
long as they have not been specifically equipped, reequipped, or 
modified for military operations:
    (a) Cargo aircraft bearing ``C'' designations and numbered C-45 
through C-118 inclusive, and C-121 through C-125 inclusive, and C-131, 
using reciprocating engines only.
    (b) Trainer aircraft bearing ``T'' designations and using 
reciprocating engines or turboprop engines with less than 600 horsepower 
(s.h.p.).
    (c) Utility aircraft bearing ``U'' designations and using 
reciprocating engines only.
    (d) All liaison aircraft bearing an ``L'' designation.
    (e) All observation aircraft bearing ``O'' designations and using 
reciprocating engines.

   category xiv--toxicological agents and equipment and radiological 
                                equipment

    (a) Chemical agents, including but not limited to lung irritants, 
vesicants, lachrymators, and tear gases (except tear gas formulations 
containing 1% or less CN or CS), sternutators and irritant smoke, and 
nerve gases and incapacitating agents.
    (b) Biological agents.
    (c) Equipment for dissemination, detection, and identification of, 
and defense against, the articles in paragraphs (a) and (b) of this 
category.
    (d) Nuclear radiation detection and measuring devices manufactured 
to military specification.
    (e) Components, parts, accessories, attachments, and associated 
equipment specifically designed or modified for the articles in 
paragraphs (c) and (d) of this category.
    Note: A chemical agent in Category XIV(a) is a substance having 
military application which by its ordinary and direct chemical action 
produces a powerful physiological effect. The term ``chemical agent'' 
includes, but is not limited to, the following chemical compounds:
    (a) Lung irritants:
    (1) Diphenylcyanoarsine (DC).
    (2) Fluorine (but not fluorene).
    (3) Trichloronitro methane (chloropicrin PS).
    (b) Vesicants:
    (1) B-Chlorovinyldichloroarsine (Lewisite, L).
    (2) Bis(dichlorethyl) sulphide (Mustard Gas, HD or H).
    (3) Ethyldichloroarsine (ED).
    (4) Methyldichloroarsine (MD).
    (c) Lachrymators and tear gases:
    (1) A-Brombenzyl cyanide (BBC).
    (2) Chloroacetophenone (CN).
    (3) Dibromodimethyl ether.
    (4) Dichlorodimethyl ether (ClCi).
    (5) Ethyldibromoarsine.
    (6) Phenylcarbylamine chloride.
    (7) Tear gas solutions (CNB and CNS).
    (8) Tear gas orthochlorobenzalmalononitrile (CS).
    (d) Sternutators and irritant smokes:
    (1) Diphenylamine chloroarsine (Adamsite, DM).
    (2) Diphenylchloroarsine (BA).
    (3) Liquid pepper.
    (e) Nerve agents, gases, and aerosols. These are toxic compounds 
which affect the nervous system, such as:
    (1) Dimethylaminoethoxycyanophosphine oxide (GA).
    (2) Methylisopropoxyfluorophosphine oxide (GB).
    (3) Methylpinacolyloxyfluoriphosphine oxide (GD).
    (f) Antiplant chemicals, such as: Butyl 2-chloro-4-
fluorophenoxyacetate (LNF).

                         category xv [Reserved]

         category xvi--nuclear weapons design and test equipment

    (a) Any article, material, equipment, or device, which is 
specifically designed or modified for use in the design, development, or 
fabrication of nuclear weapons or nuclear explosive devices.
    (b) Any article, material, equipment, or device, which is 
specifically designed or modified for use in the devising, carrying out, 
or evaluating of nuclear weapons tests or any other nuclear explosions, 
except such items as are in normal commercial use for other purposes.
    Note: Categories XVII, XVIII, and XIX of ``Munitions List'' deleted 
as inapplicable to imports.

category xx--submersible vessels, oceanographic and associated equipment

    (a) Submersible vessels, manned and unmanned, designed or modified 
for military purposes or having independent capability to maneuver 
vertically or horizontally at depths below 1,000 feet, or powered by 
nuclear propulsion plants.
    (b) Submersible vessels, manned or unmanned, designed or modified in 
whole or in part from technology developed by or for the U.S. Armed 
Forces.
    (c) Any of the articles in Category VI and elsewhere in this part 
specifically designed or modified for use with submersible vessels, and 
oceanographic or associated equipment assigned a military designation.
    (d) Equipment, components, parts, accessories, and attachments 
specifically designed for any of the articles in paragraphs (a) and (b) 
of this category.

[[Page 858]]

                  category xxi--miscellaneous articles

    Any article not specifically enumerated in the other categories of 
the U.S. Munitions List which has substantial military applicability and 
which has been specifically designed or modified for military purposes. 
The decision on whether any article may be included in this category 
shall be made by the Director, Office of Defense Trade Controls, 
Department of State, with the concurrence of the Department of Defense.

                       category xxii--south africa

    (a) Defense articles enumerated on the U.S. Munitions List (22 CFR 
Part 121).
    (b) Technical data relating to defense articles enumerated on the 
U.S. Munitions List.
    Note: This category is applicable only to South Africa.
    Note: ``Technical data'' means, for purposes of this category:
    (1) Classified information relating to defense articles and defense 
services;
    (2) Information covered by an invention secrecy order;
    (3) Information which is directly related to the design, 
engineering, development, production, processing, manufacture, use, 
operation, overhaul, repair, maintenance, modification, or 
reconstruction of defense articles. This includes, for example, 
information in the form of blueprints, drawings, photographs, plans, 
instructions, computer software and documentation. This also includes 
information which advances the state of the art of articles on the U.S. 
Munitions List. This does not include information concerning general 
scientific, mathematical or engineering principles.

[T.D. ATF-215, 50 FR 42158, Oct. 18, 1985; 50 FR 46647, Nov. 12, 1985, 
as amended by T.D. ATF-426, 65 FR 38197, June 20, 2000]



Sec. 47.22  Forgings, castings, and machined bodies.

    Articles on the U.S. Munitions Import List include articles in a 
partially completed state (such as forgings, castings, extrusions, and 
machined bodies) which have reached a stage in manufacture where they 
are clearly identifiable as defense articles. If the end-item is an 
article on the U.S. Munitions Import List, (including components, 
accessories, attachments and parts) then the particular forging, 
casting, extrusion, machined body, etc., is considered a defense article 
subject to the controls of this part, except for such items as are in 
normal commercial use.

[T.D. ATF-215, 50 FR 42160, Oct. 18, 1985]



                         Subpart D--Registration



Sec. 47.31  Registration requirement.

    Persons engaged in the business, in the United States, of importing 
articles enumerated on the U.S. Munitions Import List must register with 
the Director.

[T.D. ATF-8, 39 FR 3251, Jan. 25, 1974, as amended by T.D. ATF-215, 50 
FR 42161, Oct. 18, 1985]



Sec. 47.32  Application for registration and refund of fee.

    (a) Application for registration shall be filed on Form 4587, in 
duplicate, with the Director, and shall be accompanied by the 
registration fee at the rate prescribed in this section. On approval of 
the application by the Director, he will return the original to the 
applicant.
    (b) Registration may be effected for periods of from 1 to 5 years at 
the option of the registrant by identifying on Form 4587 the period of 
registration desired. The registration fees are as follows:

1 year..........................................................    $250
2 years.........................................................     500
3 years.........................................................     700
4 years.........................................................     850
5 years.........................................................   1,000
 

    (c) Fees paid in advance for whole future years of a multiple year 
registration will be refunded upon request if the registrant ceases to 
engage in importing articles on the U.S. Munitions Import List. A 
request for a refund must be submitted to the Director, Bureau of 
Alcohol, Tobacco and Firearms, Washington, DC 20226, Attention: Firearms 
and Explosives Imports Branch, prior to the beginning of any year for 
which a refund is claimed.

(Approved by the Office of Management and Budget under control number 
1512-0021)

[T.D. ATF-8, 39 FR 3251, Jan. 25, 1974, as amended by T.D. ATF-215, 50 
FR 42161, Oct. 18, 1985]

[[Page 859]]



Sec. 47.33  Notification of changes in information furnished by registrants.

    Registered persons shall notify the Director in writing, in 
duplicate, of significant changes in the information set forth in their 
registration

(Approved by the Office of Management and Budget under control number 
1512-0021)

[T.D. ATF-8, 39 FR 3251, Jan. 25, 1974, as amended by T.D. ATF-215, 50 
FR 42161, Oct. 18, 1985]



Sec. 47.34  Maintenance of records by persons required to register as importers of Import List articles.

    (a) Registrants under this part engaged in the business of importing 
articles subject to controls under 27 CFR Parts 178 and 179 shall 
maintain records in accordance with the applicable provisions of those 
parts.
    (b) Registrants under this part engaged in importing articles on the 
U.S. Munitions Import List subject to the permit procedures of subpart E 
of this part shall maintain for a period of 6 years, subject to 
inspection by any ATF officer, records bearing on such articles 
imported, including records concerning their acquisition and 
disposition, including Forms 6 and 6A. The Director may prescribe a 
longer or shorter period in individual cases as he deems necessary. See 
Sec. 178.129 of this chapter for articles subject to import control 
under part 178 of this chapter.

(Approved by the Office of Management and Budget under control number 
1512-0387)

[T.D. ATF-8, 39 FR 3251, Jan. 25, 1974, as amended by T.D. ATF-172, 49 
FR 14941, Apr. 16, 1984; T.D. ATF-215, 50 FR 42161, Oct. 18, 1985; T.D. 
ATF-426, 65 FR 38197, June 20, 2000]



Sec. 47.35  Forms prescribed.

    (a) The Director is authorized to prescribe all forms required by 
this part. All of the information called for in each form shall be 
furnished as indicated by the headings on the form and the instructions 
on or pertaining to the form. In addition, information called for in 
each form shall be furnished as required by this part.
    (b) Requests for forms should be mailed to the ATF Distribution 
Center, 7943 Angus Court, Springfield, Virginia 22153.

[T.D. ATF-92, 46 FR 46914, Sept. 23, 1981, as amended by T.D. ATF-249, 
52 FR 5961, Feb. 27, 1987; T.D. ATF-426, 65 FR 38197, June 20, 2000]



                           Subpart E--Permits



Sec. 47.41  Permit requirement.

    (a) Articles on the U.S. Munitions Import List will not be imported 
into the United States except pursuant to a permit under this subpart 
issued by the Director. For articles subject to control under parts 178 
or 179 of this chapter, a separate permit is not necessary.
    (b) Articles on the U.S. Munitions Import List intended for the 
United States or any State or political subdivision thereof, or the 
District of Columbia, which are exempt from import controls of 27 CFR 
178.115 shall not be imported into the United States, except by the 
United States or agency thereof, without first obtaining a permit issued 
by the Director under this subpart.
    (c) A permit is not required for the importation of--
    (1)(i) The U.S. Munitions Import List articles from Canada, except 
articles enumerated in Categories I, II, III, IV, VI(e), VIII(a), XVI, 
and XX; and
    (ii) Nuclear weapons strategic delivery systems and all specifically 
designed components, parts, accessories, attachments, and associated 
equipment thereof (see Category XXI); or
    (2) Minor components and parts for Category I(a) and I(b) firearms, 
except barrels, cylinders, receivers (frames) or complete breech 
mechanisms, when the total value does not exceed $100 wholesale in any 
single transaction.

[T.D. ATF-215, 50 FR 42161, Oct. 18, 1985, as amended by T.D. ATF-426, 
65 FR 38197, June 20, 2000]



Sec. 47.42  Application for permit.

    (a)(1) Persons required to obtain a permit as provided in Sec. 47.41 
must file a Form 6--Part I, in triplicate, with the Director. The 
application must be signed and dated and must contain the information 
requested on the form, including:

[[Page 860]]

    (i) The name, address, telephone number, license and registration 
number, if any (including expiration date) of the importer;
    (ii) The country from which the defense article is to be imported;
    (iii) The name and address of the foreign seller and foreign 
shipper;
    (iv) A description of the defense article to be imported, including-
-
    (A) The name and address of the manufacturer;
    (B) The type (e.g., rifle, shotgun, pistol, revolver, aircraft, 
vessel, and in the case of ammunition only, ball, wadcutter, shot, 
etc.);
    (C) The caliber, gauge, or size;
    (D) The model;
    (E) The length of barrel, if any (in inches);
    (F) The overall length, if a firearm (in inches);
    (G) The serial number, if known;
    (H) Whether the defense article is new or used;
    (I) The quantity;
    (J) The unit cost of the firearm, firearm barrel, ammunition, or 
other defense article to be imported;
    (K) The category of U.S. Munitions Import List under which the 
article is regulated;
    (v) The specific purpose of importation, including final recipient 
information if different from the importer; and
    (vi) Certification of origin.
    (2)(i) If the Director approves the application, such approved 
application will serve as the permit to import the defense article 
described therein, and importation of such defense article may continue 
to be made by the licensed/registered importer (if applicable) under the 
approved application (permit) during the period specified thereon. The 
Director will furnish the approved application (permit) to the applicant 
and retain two copies thereof for administrative use.
    (ii) If the Director disapproves the application, the licensed/
registered importer (if applicable) will be notified of the basis for 
the disapproval.
    (b) For additional requirements relating to the importation of 
plastic explosives into the United States on or after April 24, 1997, 
see Sec. 55.183 of this title.

(Approved by the Office of Management and Budget under control number 
1512-0017)

[T.D. ATF-215, 50 FR 42161, Oct. 18, 1985, as amended by T.D. ATF-387, 
62 FR 8376, Feb. 25, 1997; T.D. ATF-426, 65 FR 38197, June 20, 2000]



Sec. 47.43  Terms of permit.

    (a) Import permits issued under this subpart are valid for one year 
from their issuance date unless a different period of validity is stated 
thereon. They are not transferable.
    (b) If shipment cannot be completed during the period of validity of 
the permit, another application must be submitted for permit to cover 
the unshipped balance. Such an application shall make reference to the 
previous permit and may include materials in addition to the unshipped 
balance.
    (c) No amendments or alteration of a permit may be made, except by 
the Director.

[T.D. ATF-8, 39 FR 3251, Jan. 25, 1974, as amended by T.D. ATF-325, 57 
FR 29787, July 7, 1992; T.D. ATF-426, 65 FR 38197, June 20, 2000]



Sec. 47.44  Permit denial, revocation or suspension.

    (a) Import permits under this subpart may be denied, revoked, 
suspended or revised without prior notice whenever the Director finds 
the proposed importation to be inconsistent with the purpose or in 
violation of section 38, Arms Export Control Act of 1976 or the 
regulations in this part.
    (b) Whenever, after appropriate consideration, a permit application 
is denied or an outstanding permit is revoked, suspended, or revised, 
the applicant or permittee shall be promptly advised in writing of the 
Director's decision and the reasons therefor.
    (c) Upon written request made within 30 days after receipt of an 
adverse decision, the applicant or permittee shall be accorded an 
opportunity to present additional information and to have a full review 
of his case by the Director.

[[Page 861]]

    (d) Unused, expired, suspended, or revoked permits must be returned 
immediately to the Director.

[T.D. ATF-8, 39 FR 3251, Jan. 25, 1974, as amended by T.D. ATF-215, 50 
FR 42161, Oct. 18, 1985]



Sec. 47.45  Importation.

    (a) Articles subject to the import permit procedures of this subpart 
imported into the United States may be released from Customs custody to 
the person authorized to import same upon his showing that he has a 
permit from the Director for the importation of the article or articles 
to be released. For articles in Categories I and III imported by a 
registered importer, the importer will also submit to Customs a copy of 
the export license authorizing the export of the article or articles 
from the exporting country. If the exporting country does not require 
issuance of an export license, the importer must submit a certification, 
under penalty of perjury, to that effect.
    (1) In obtaining the release from Customs custody of an article 
imported pursuant to a permit, the permit holder will prepare Form 6A, 
in duplicate, and furnish the original to the Customs officer releasing 
the article. The Customs officer will, after certification, forward the 
original ATF Form 6A to the address specified on the form.
    (2) The ATF Form 6A must contain the information requested on the 
form, including:
    (i) The name, address, and license number (if any) of the importer;
    (ii) The name of the manufacturer of the defense article;
    (iii) The country of manufacture;
    (iv) The type;
    (v) The model;
    (vi) The caliber, gauge, or size;
    (vii) The serial number in the case of firearms, if known; and
    (viii) The number of defense articles released.
    (b) Within 15 days of the date of their release from Customs 
custody, the importer of the articles released will forward to the 
address specified on the form a copy of Form 6A on which will be 
reported any error or discrepancy appearing on the Form 6A certified by 
Customs and serial numbers if not previously provided on ATF Form 6A.

(Approved by the Office of Management and Budget under control number 
1512-0019)

[T.D. ATF-215, 50 FR 42161, Oct. 18, 1985, as amended by T.D. ATF-426, 
65 FR 38197, June 20, 2000]



Sec. 47.46  Articles in transit.

    Articles subject to the import permit procedures of this subpart 
which enter the United States for temporary deposit pending removal 
therefrom and such articles which are temporarily taken out of the 
United States for return thereto shall be regarded as in transit and 
will be considered neither imported nor exported under this part. Such 
transactions are subject to the Intransit or Temporary Export License 
procedures of the Department of State (see 22 CFR Part 123).

[T.D. ATF-8, 39 FR 3251, Jan. 25, 1974, as amended by T.D. ATF-215, 50 
FR 42161, Oct. 18, 1985]



                   Subpart F--Miscellaneous Provisions



Sec. 47.51  Import certification and delivery verification.

    Pursuant to agreement with the United States, certain foreign 
countries are entitled to request certification of legality of 
importation of articles on the U.S. Munitions Import List. Upon request 
of a foreign government, the Director will certify the importation, on 
Form ITA-645P/ATF-4522/DSP53, for the U.S. importer. Normally, the U.S. 
importer will submit this form to the Director at the time he applies 
for an import permit. This document will serve as evidence to the 
government of the exporting company that the U.S. importer has complied 
with import regulations of the U.S. Government and is prohibited from 
diverting, transshipping, or reexporting the material described therein 
without the approval of the U.S. Government. Foreign governments may 
also require documentation attesting to the delivery of the material 
into the United States. When such delivery certification is requested by 
a foreign government, the U.S. importer may obtain directly from the 
U.S. District Director

[[Page 862]]

of Customs the authenticated Delivery Verification Certificate (U.S. 
Department of Commerce Form ITA-647P) for this purpose.

(Approved by the Office of Management and Budget under control number 
0625-0064)

[T.D. ATF-215, 50 FR 42162, Oct. 18, 1985]



Sec. 47.52  Import restrictions applicable to certain countries.

    (a) It is the policy of the United States to deny licenses and other 
approvals with respect to defense articles and defense services 
originating in certain countries or areas. This policy applies to Cuba, 
Iran, Iraq, Libya, Mongolia, North Korea, Sudan, Syria, Vietnam, and 
some of the states that comprised the former Soviet Union (Armenia, 
Azerbaijan, Belarus, and Tajikistan). This policy applies to countries 
or areas with respect to which the United States maintains an arms 
embargo (e.g., Burma, China, the Federal Republic of Yugoslavia (Serbia 
and Montenegro), Haiti, Liberia, Rwanda, Somalia, Sudan, UNITA (Angola), 
and Zaire). It also applies when an import would not be in furtherance 
of world peace and the security and foreign policy of the United States.

    Note: Changes in foreign policy may result in additions to and 
deletions from the above list of countries. The ATF will publish changes 
to this list in the Federal Register. Contact the Firearms and 
Explosives Imports Branch at (202) 927-8320 for current information.

    (b) Notwithstanding paragraph (a) of this section, the Director 
shall deny applications to import into the United States the following 
firearms and ammunition:
    (1) Any firearm located or manufactured in Georgia, Kazakstan, 
Kyrgyzstan, Moldova, Russian Federation, Turkmenistan, Ukraine, or 
Uzbekistan, and any firearm previously manufactured in the Soviet Union, 
that is not one of the models listed below:
    (i) Pistols/Revolvers:
    (A) German Model P08 Pistol.
    (B) IZH 34M, .22 caliber Target Pistol.
    (C) IZH 35M, .22 caliber Target Pistol.
    (D) Mauser Model 1896 Pistol.
    (E) MC-57-1 Pistol.
    (F) MC-1-5 Pistol.
    (G) Polish Vis Model 35 Pistol.
    (H) Soviet Nagant Revolver.
    (I) TOZ 35, .22 caliber Target Pistol.
    (ii) Rifles:
    (A) BARS-4 Bolt Action Carbine.
    (B) Biathlon Target Rifle, .22LR caliber.
    (C) British Enfield Rifle.
    (D) CM2, .22 caliber Target Rifle (also known as SM2, 22 caliber).
    (E) German Model 98K Rifle.
    (F) German Model G41 Rifle.
    (G) German Model G43 Rifle.
    (H) IZH-94.
    (I) LOS-7 Bolt Action Rifle.
    (J) MC-7-07.
    (K) MC-18-3.
    (L) MC-19-07.
    (M) MC-105-01.
    (N) MC-112-02.
    (O) MC-113-02.
    (P) MC-115-1.
    (Q) MC-125/127.
    (R) MC-126.
    (S) MC-128.
    (T) Saiga Rifle.
    (U) Soviet Model 38 Carbine.
    (V) Soviet Model 44 Carbine.
    (W) Soviet Model 91/30 Rifle.
    (X) TOZ 18, .22 caliber Bolt Action Rifle.
    (Y) TOZ 55.
    (Z) TOZ 78.
    (AA) Ural Target Rifle, .22LR caliber.
    (BB) VEPR Rifle.
    (CC) Winchester Model 1895, Russian Model Rifle;
    (2) Ammunition located or manufactured in Georgia, Kazakstan, 
Kyrgyzstan, Moldova, Russian Federation, Turkmenistan, Ukraine, or 
Uzbekistan, and ammunition previously manufactured in the Soviet Union, 
that is 7.62X25mm caliber (also known as 7.63X25mm caliber or .30 
Mauser); or
    (3) A type of firearm the manufacture of which began after February 
9, 1996.
    (c) The provisions of paragraph (b) of this section shall not affect 
the fulfillment of contracts with respect to firearms or ammunition 
entered or withdrawn from warehouse for consumption in the United States 
on or before February 9, 1996.
    (d) A defense article authorized for importation under this part may 
not be shipped on a vessel, aircraft or other means or conveyance which 
is owned or

[[Page 863]]

operated by, or leased to or from, any of the countries or areas covered 
by paragraph (a) of this section.
    (e) Applications for permits to import articles that were 
manufactured in, or have been in, a country or area proscribed under 
this section may be approved where the articles are covered by Category 
I(a) of the Import List (other than those subject to the provisions of 
27 CFR Part 179), are importable as curios or relics under the 
provisions of 27 CFR 178.118, and meet the following criteria:
    (1) The articles were manufactured in a proscribed country or area 
prior to the date, as established by the Department of State, the 
country or area became proscribed, or, were manufactured in a non-
proscribed country or area; and
    (2) The articles have been stored for the five year period 
immediately prior to importation in a non-proscribed country or area.
    (f) Applicants desiring to import articles claimed to meet the 
criteria specified in paragraph (e) of this section shall explain, and 
certify to, how the firearms meet the criteria. The certification 
statement will be prepared in letter form, executed under the penalties 
of perjury, and submitted to the Director at the time application is 
made for an import permit. The certification statement must be 
accompanied by documentary information on the country or area of 
original manufacture and on the country or area of storage for the five 
year period immediately prior to importation. Such information may, for 
example, include a verifiable statement in the English language of a 
government official or any other person having knowledge of the date and 
place of manufacture and/or the place of storage; a warehouse receipt or 
other document which provides the required history of storage; and any 
other document that the applicant believes substantiates the place and 
date of manufacture and the place of storage. The Director, however, 
reserves the right to determine whether documentation is acceptable. 
Applicants shall, when required by the Director, furnish additional 
documentation as may be necessary to determine whether an import permit 
application should be approved.

[T.D. ATF-202, 50 FR 14382, Apr. 12, 1985, as amended by T.D. ATF-215, 
50 FR 42162, Oct. 18, 1985; T.D. ATF-287, 54 FR 13681, Apr. 5, 1989; 
T.D. ATF-323, 57 FR 24189, June 8, 1992; T.D. ATF-349, 58 FR 47831, 
Sept. 13, 1993; T.D. ATF-367, 60 FR 47866, Sept. 15, 1995; T.D. ATF-396, 
62 FR 61234, Nov. 17, 1997]



Sec. 47.53  Exemptions.

    (a) The provisions of this part are not applicable to:
    (1) Importations by the United States or any agency thereof;
    (2) Importation of components for items being manufactured under 
contract for the Department of Defense; or
    (3) Importation of articles (other than those which would be 
``firearms'' as defined in 18 U.S.C. 921(a)(3) manufactured in foreign 
countries for persons in the United States pursuant to Department of 
State approval.
    (b) Any person seeking to import articles on the U.S. Munitions 
Import List as exempt under paragraph (a)(2) or (3) of this section may 
obtain release of such articles from Customs custody by submitting, to 
the Customs officer with authority to release, a statement claiming the 
exemption accompanied by satisfactory proof of eligibility. Such proof 
may be in the form of a letter from the Department of Defense or State, 
as the case may be, confirming that the conditions of the exemption are 
met.

[T.D. ATF-8, 39 FR 3251, Jan. 25, 1974, as amended by T.D. ATF-215, 50 
FR 42162, Oct. 18, 1985]



Sec. 47.54  Administrative procedures inapplicable.

    The functions conferred under section 38, Arms Export Control Act of 
1976, as amended, are excluded from the operation of Chapter 5, Title 5, 
United States Code, with respect to Rule Making and Adjudication, 5 
U.S.C. 553 and 554.

[T.D. ATF-8, 39 FR 3251, Jan. 25, 1974, as amended by T.D. ATF-215, 50 
FR 42162, Oct. 18, 1985]

[[Page 864]]



Sec. 47.55  Departments of State and Defense consulted.

    The administration of the provisions of this part will be subject to 
the guidance of the Secretaries of State and Defense on matters 
affecting world peace and the external security and foreign policy of 
the United States.



Sec. 47.56  Authority of Customs officers.

    (a) Officers of the U.S. Customs Service are authorized to take 
appropriate action to assure compliance with this part and with 27 CFR 
Parts 178 and 179 as to the importation or attempted importation of 
articles on the U.S. Munitions Import List, whether or not authorized by 
permit.
    (b) Upon the presentation to him of a permit or written approval 
authorizing importation of articles on the U.S. Munitions Import List, 
the Customs officer who has authority to release same may require, in 
addition to such documents as may be required by Customs regulations, 
the production of other relevant documents relating to the proposed 
importation, including, but not limited to, invoices, orders, packing 
lists, shipping documents, correspondence, and instructions.

[T.D. ATF-8, 39 FR 3251, Jan. 25, 1974, as amended by T.D. ATF-215, 50 
FR 42162, Oct. 18, 1985]



Sec. 47.57  U.S. military defense articles.

    (a)(1) Notwithstanding any other provision of this part or of parts 
178 or 179 of this chapter, no military defense article of United States 
manufacture may be imported into the United States if such article was 
furnished to a foreign government under a foreign assistance or foreign 
military sales program of the United States.
    (2) The restrictions in paragraph (a)(1) of this section cover 
defense articles which are advanced in value or improved in condition in 
a foreign country, but do not include those which have been 
substantially transformed as to become, in effect, articles of foreign 
manufacture.
    (b) Paragraph (a) of this section will not apply if:
    (1) The applicant submits with the ATF Form 6--Part I application 
written authorization from the Department of State to import the defense 
article; and
    (2) In the case of firearms, such firearms are curios or relics 
under 18 U.S.C. 925(e) and the person seeking to import such firearms 
provides a certification of a foreign government that the firearms were 
furnished to such government under a foreign assistance or foreign 
military sales program of the United States and that the firearms are 
owned by such foreign government. (See Sec. 178.118 of this chapter 
providing for the importation of certain curio or relic handguns, rifles 
and shotguns.)
    (c) For the purpose of this section, the term ``military defense 
article'' includes all defense articles furnished to foreign governments 
under a foreign assistance or foreign military sales program of the 
United States as set forth in paragraph (a) of this section.

(Approved by the Office of Management and Budget under OMB Control No. 
1512-0017)

[T.D. ATF-287, 54 FR 13681, Apr. 5, 1989, as amended by T.D. ATF-393, 62 
FR 61235, Nov. 17, 1997; T.D. ATF-426, 65 FR 38198, June 20, 2000]



             Subpart G--Penalties, Seizures and Forfeitures



Sec. 47.61  Unlawful importation.

    Any person who willfully:
    (a) Imports articles on the U.S. Munitions Import List without a 
permit;
    (b) Engages in the business of importing articles on the U.S. 
Munitions Import List without registering under this part; or
    (c) Otherwise violates any provisions of this part;

Shall upon conviction be fined not more than $1,000,000 or imprisoned 
not more than 10 years, or both.

[T.D. ATF-8, 39 FR 3251, Jan. 25, 1974, as amended at 39 FR 4760, Feb. 
7, 1974; T.D. ATF-215, 50 FR 42162, Oct. 18, 1985; T.D. ATF-287, 54 FR 
13681, Apr. 5, 1989]



Sec. 47.62  False statements or concealment of facts.

    Any person who willfully, in a registration or permit application, 
makes any untrue statement of a material

[[Page 865]]

fact or fails to state a material fact required to be stated therein or 
necessary to make the statements therein not misleading, shall upon 
conviction be fined not more than $1,000,000, or imprisoned not more 
than 10 years, or both.

[T.D. ATF-8, 39 FR 3251, Jan. 25, 1974, as amended by T.D. ATF-215, 50 
FR 42162, Oct. 18, 1985; T.D. ATF-287, 54 FR 13681, Apr. 5, 1989]



Sec. 47.63  Seizure and forfeiture.

    Whoever knowingly imports into the United States contrary to law any 
article on the U.S. Munitions Import List; or receives, conceals, buys, 
sells, or in any manner facilitates its transportation, concealment, or 
sale after importation, knowing the same to have been imported contrary 
to law, shall be fined not more than $10,000 or imprisoned not more than 
5 years, or both; and the merchandise so imported, or the value thereof 
shall be forfeited to the United States.

(18 U.S.C. 545)

[T.D. ATF-8, 39 FR 3251, Jan. 25, 1974, as amended by T.D. ATF-215, 50 
FR 42162, Oct. 18, 1985]



PART 53--MANUFACTURERS EXCISE TAXES--FIREARMS AND AMMUNITION--Table of Contents




                         Subpart A--Introduction

Sec.
53.1  Introduction.
53.2  Attachment of tax.
53.3  Exemption certificates.

                         Subpart B--Definitions

53.11  Meaning of terms.

         Subpart C--Administrative and Miscellaneous Provisions

53.20  Delegations of the Director.
53.21  Forms prescribed.
53.22  Employer identification number.
53.23  Alternate methods or procedures.
53.24  Records.

Subparts D-F [Reserved]

                          Subpart G--Tax Rates

53.61  Imposition and rates of tax.
53.62  Exemptions.
53.63  Other tax-free sales.

Subparts H-I [Reserved]

     Subpart J--Special Provisions Applicable to Manufacturers Taxes

53.91  Charges to be included in sale price.
53.92  Exclusions from sale price.
53.93  Other items relating to tax on sale price.
53.94  Constructive sale price; scope and application.
53.95  Constructive sale price; basic rules.
53.96  Constructive sale price; special rule for arm's length sales.
53.97  Constructive sale price; affiliated corporations.
53.98  Computation of tax on leases and installment sales.
53.99  Sales of installment accounts.
53.100  Exclusion of local advertising charges from sale price.
53.101  Limitation on aggregate of exclusions and price readjustments.
53.102  No exclusion or readjustment for other advertising charges or 
          reimbursements.
53.103  Lease considered as sale.
53.104  Limitation on amount of tax applicable to certain leases.

             Use by Manufacturer or Importer Considered Sale

53.111  Tax on use by manufacturer, producer, or importer.
53.112  Business or personal use of articles.
53.113  Events subsequent to taxable use of article.
53.114  Use in further manufacture.
53.115  Computation of tax.

   Application of Tax in Case of Sales by Other Than Manufacturer or 
                                Importer

53.121  Sales of taxable articles by a person other than the 
          manufacturer, producer, or importer.

                Subpart K--Exemptions, Registration, Etc.

53.131  Tax-free sales; general rule.
53.132  Tax-free sale of articles to be used for, or resold for, further 
          manufacture.
53.133  Tax-free sale of articles for export, or for resale by the 
          purchaser to a second purchaser for export.
53.134  Tax-free sale of articles for use by the purchaser as supplies 
          for vessels or aircraft.
53.135  Tax-free sale of articles to State and local governments for 
          their exclusive use.
53.136  Tax-free sales of articles to nonprofit educational 
          organizations.
53.137-53.139  [Reserved]
53.140  Registration.
53.141  Exceptions to the requirement for registration.

[[Page 866]]

53.142  Denial, revocation or suspension of registration.
53.143  Special rules relating to further manufacture.

   Subpart L--Refunds and Other Administrative Provisions of Special 
                   Application to Manufacturers Taxes

53.151  Returns.
53.152  Final returns.
53.153  Time for filing returns.
53.154  Manner of filing returns.
53.155  Extension of time for filing returns.
53.156  Extension of time for paying tax shown on return.
53.157  Deposit requirement for deposits made for calendar quarters 
          prior to July 1, 1995.
53.158  Payment of tax by electronic fund transfer.
53.159  Deposit requirement for deposits made for calendar quarters 
          beginning on or after July 1, 1995.
53.161  Authority to make credits or refunds.
53.162  Abatements.
53.163-53.170  [Reserved]
53.171  Claims for credit or refund of overpayments of manufacturers 
          taxes.
53.172  Credit or refund of manufacturers tax under chapter 32.
53.173  Price readjustments causing overpayments of manufacturers tax.
53.174  Determination of price readjustments.
53.175  Readjustment for local advertising charges.
53.176  Supporting evidence required in case of price readjustments.
53.177  Certain exportations, uses, sales, or resales causing 
          overpayments of tax.
53.178  Exportations, uses, sales, and resales included.
53.179  Supporting evidence required in case of manufacturers tax 
          involving exportations, uses, sales, or resales.
53.180  Tax-paid articles used for further manufacture and causing 
          overpayments of tax.
53.181  Further manufacture included.
53.182  Supporting evidence required in case of tax-paid articles used 
          for further manufacture.
53.183  Return of installment accounts causing overpayments of tax.
53.184  Refund to exporter or shipper.
53.185  Credit on returns.
53.186  Accounting procedures for like articles.
53.187  OMB control numbers.

    Authority: 26 U.S.C. 4181, 4182, 4216-4219, 4221-4223, 4225, 6001, 
6011, 6020, 6021, 6061, 6071, 6081, 6091, 6101-6104, 6109, 6151, 6155, 
6161, 6301-6303, 6311, 6402, 6404, 6416, 7502.

    Source: T.D. ATF-308, 56 FR 303, Jan. 3, 1991, unless otherwise 
noted.

    Editorial Note: Nomenclature changes to part 53 appear by T.D. ATF-
447, 66 FR 19088, Apr. 13, 2001.



                         Subpart A--Introduction



Sec. 53.1  Introduction.

    The regulations in this part (part 53, subchapter C, chapter I, 
title 27, Code of Federal Regulations) are designated ``Manufacturers 
Excise Taxes--Firearms and Ammunition.'' The regulations relate to the 
tax on the sale of firearms and ammunition imposed by section 4181 of 
the Internal Revenue Code of 1986, and to certain related administrative 
provisions of chapter 32, subchapter F, of the Code. Chapter 32, 
subchapter D of the Code imposes taxes on the sale or use by the 
manufacturer, producer, or importer of certain recreational equipment 
specified in that chapter. References in the regulations in this part to 
the ``Internal Revenue Code'' or the ``Code'' are references to the 
Internal Revenue Code of 1986 (United States Code of 1986), as amended, 
unless otherwise indicated. References to a section or other provision 
of law are references to a section or other provision of the Internal 
Revenue Code of 1986, as amended, unless otherwise indicated.



Sec. 53.2  Attachment of tax.

    (a) For purposes of this part, the manufacturers excise tax 
generally attaches when the title to the article sold passes from the 
manufacturer to a purchaser.
    (b) When title passes is dependent upon the intention of the parties 
as gathered from the contract of sale and the attendant circumstances. 
In the absence of expressed intention, the legal rules of presumption 
followed in the jurisdiction where the sale is made govern in 
determining when title passes.
    (c) In the case of a sale on credit, the tax attaches whether or not 
the purchase price is actually collected.
    (d) Where a consignor (such as a manufacturer) consigns articles to 
a consignee (such as a dealer), retaining ownership in them until they 
are disposed of by the consignee, title does not pass, and the tax does 
not attach until sale by the consignee. Where the

[[Page 867]]

relationship between a manufacturer and a dealer is that of principal 
and agent, title does not pass, and the tax does not attach, until sale 
by the dealer.
    (e) In the case of a lease, an installment sale, a conditional sale, 
or a chattel mortgage arrangement or similar arrangement creating a 
security interest, a proportionate part of the tax attaches to each 
payment. See section 4217 and Secs. 53.103 and 53.104 for a limitation 
on the amount of tax payable on lease payments.
    (f) In the case of use by the manufacturer, the tax attaches at the 
time the use begins.



Sec. 53.3  Exemption certificates.

    Several sections of the regulations in this part, relating to sales 
exempt from manufacturers excise tax, require the manufacturer to obtain 
an exemption certificate from the purchaser to substantiate the exempt 
character of the sale. Any form of exemption certificate will be 
acceptable if it includes all the information required to be contained 
in such a certificate by the pertinent sections of the regulations in 
this part. These certificates are available as preprinted documents 
which may be ordered from the Bureau's Distribution Center (see 
Sec. 53.21 for the address of the Distribution Center). The preprinted 
certificates may be reproduced as needed.

[T.D. ATF-380, 61 FR 37005, July 16, 1996]



                         Subpart B--Definitions



Sec. 53.11  Meaning of terms.

    When used in this part and in forms prescribed under this part, 
where not otherwise distinctly expressed or manifestly incompatible with 
the intent thereof, terms shall have the meanings ascribed in this 
section. Words in the plural form shall include the singular, and vice 
versa, and words importing the masculine gender shall include the 
feminine. The terms ``includes'' and ``including'' do not exclude other 
things not enumerated which are in the same general class or are 
otherwise within the scope thereof.
    Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this part by ATF Order 
1130.18, Delegation Order--Delegation of the Director's Authorities in 
27 CFR part 53--Manufacturers Excise Taxes--Firearms and Ammunition.
    Calendar quarter. A period of 3 calendar months ending on March 31, 
June 30, September 30, or December 31.
    Calendar year. The period which begins January 1 and ends on the 
following December 31.
    Chapter 32. For purposes of this part chapter 32 means section 4181, 
chapter 32, of the Internal Revenue Code of 1986, as amended.
    Code. Internal Revenue Code of 1986, as amended.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC 20226.
    Electronic fund transfer (EFT). Any transfer of funds effected by a 
taxpayer's financial institution, either directly or through a 
correspondent banking relationship, via the Federal Reserve 
Communications System (FRCS) or Fedwire to the Treasury Account at the 
Federal Reserve Bank.
    Exportation. The severance of an article from the mass of things 
belonging within the United States with the intention of uniting it with 
the mass of things belonging within some foreign country or within a 
possession of the United States.
    Exporter. The person named as shipper or consignor in the export 
bill of lading.
    Financial institution. A bank or other financial institution, 
whether or not a member of the Federal Reserve System, which has access 
to the Federal Reserve Communications Systems (FRCS) or Fedwire. The 
``FRCS'' or ``Fedwire'' is a communications network that allows Federal 
Reserve System member financial institutions to effect a transfer of 
funds for their customers (or other financial institutions) to the 
Treasury Account at the Federal Reserve Bank.
    Firearms. Any portable weapons, such as rifles, carbines, machine 
guns, shotguns, or fowling pieces, from which a

[[Page 868]]

shot, bullet, or other projectile may be discharged by an explosive.
    Importer. Any person who brings a taxable article into the United 
States from a source outside the United States, or who withdraws such an 
article from a customs bonded warehouse for sale or use in the United 
States. If the nominal importer of a taxable article is not its 
beneficial owner (for example, the nominal importer is a customs broker 
engaged by the beneficial owner), the beneficial owner is the 
``importer'' of the article for purposes of chapter 32 of the Code and 
is liable for tax on his sale or use of the article in the United 
States. See section 4219 of the Code and 27 CFR 53.121 for the 
circumstances under which sales by persons other than the manufacturer 
or importer are subject to the manufacturers excise tax.
    Knockdown condition. A taxable article that is unassembled but 
complete as to all component parts.
    Manufacturer. Includes any person who produces a taxable article 
from scrap, salvage, or junk material, or from new or raw material, by 
processing, manipulating, or changing the form of an article or by 
combining or assembling two or more articles. The term also includes a 
``producer'' and an ``importer.'' Under certain circumstances, as where 
a person manufactures or produces a taxable article for another person 
who furnishes materials under an agreement whereby the person who 
furnished the materials retains title thereto and to the finished 
article, the person for whom the taxable article is manufactured or 
produced, and not the person who actually manufactures or produces it, 
will be considered the manufacturer.
    A manufacturer who sells a taxable article in a knockdown condition 
is liable for the tax as a manufacturer. Whether the person who buys 
such component parts or accessories and assembles a taxable article from 
them will be liable for tax as a manufacturer of a taxable article will 
depend on the relative amount of labor, material, and overhead required 
to assemble the completed article and on whether the article is 
assembled for business or personal use.
    Person. An individual, trust, estate, partnership, association, 
company, or corporation. When used in connection with penalties, 
seizures, and forfeitures, the term includes an officer or employee of a 
partnership, who as an officer, employee or member, is under a duty to 
perform the act in respect of which the violation occurs.
    Pistols. Small projectile firearms which have a short one-hand stock 
or butt at an angle to the line of bore and a short barrel or barrels, 
and which are designed, made, and intended to be aimed and fired from 
one hand. The term does not include gadget devices, guns altered or 
converted to resemble pistols, or small portable guns erroneously 
referred to as pistols, as, for example, Nazi belt buckle pistols, glove 
pistols, or one-hand stock guns firing fixed shotgun or fixed rifle 
ammunition.
    Possession of the United States. Includes Guam, the Midway Islands, 
Palmyra, the Panama Canal Zone, the Commonwealth of Puerto Rico, 
American Samoa, the Virgin Islands, and Wake Island.
    Purchaser. Includes a lessee where the lessor is also the 
manufacturer of the article.
    Revolvers. Small projectile firearms of the pistol type, having a 
breech-loading chambered cylinder so arranged that the cocking of the 
hammer or movement of the trigger rotates it and brings the next 
cartridge in line with the barrel for firing.
    Sale. An agreement whereby the seller transfers the property (that 
is, the title or the substantial incidents of ownership in goods) to the 
buyer for a consideration called the price, which may consist of money, 
services, or other things.
    Secretary. The Secretary of the Treasury or his delegate.
    Shells and cartridges. Include any article consisting of a 
projectile, explosive, and container that is designed, assembled, and 
ready for use without further manufacture in firearms, pistols or 
revolvers. A person who reloads used shell or cartridge casings is a 
manufacturer of shells or cartridges within the meaning of section 4181 
if such reloaded shells or cartridges are sold by the reloader. However, 
the reloader is not a

[[Page 869]]

manufacturer of shells or cartridges if, in return for a fee and 
expenses, he reloads casings of shells or cartridges submitted by a 
customer and returns the reloaded shells or cartridges with the 
identical casings provided by the customer to that customer. Under such 
circumstances, the customer would be the manufacturer of the shells or 
cartridges and may be liable for tax on the sale of articles. See 
section 4218 of the Code and Sec. 53.112.
    Taxable article. Any article taxable under section 4181 of the Code.
    Treasury Account. The Department of Treasury's General Account at 
the Federal Reserve Bank of New York.
    Vendor. Includes a lessor where the lessor is also the manufacturer 
of the article.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-312, 56 
FR 31083, July 9, 1991; T.D. ATF-330, 57 FR 40325, Sept. 3, 1992; T.D. 
ATF-365, 60 FR 33670, June 28, 1995; T.D. ATF-404, 63 FR 52603, Oct. 1, 
1998; T.D. ATF-447, 66 FR 19088, Apr. 13, 2001]



         Subpart C--Administrative and Miscellaneous Provisions



Sec. 53.20  Delegations of the Director.

    All of the regulatory authorities of the Director contained in part 
53 of the regulations are delegated to appropriate ATF officers. These 
ATF officers are specified in ATF Order 1130.18, Delegation Order--
Delegation of the Director's Authorities in 27 CFR part 53--
Manufacturers Excise Taxes--Firearms and Ammunition. ATF delegation 
orders, such as ATF Order 1130.18, are available to any interested 
person by mailing a request to the ATF Distribution Center, P.O. Box 
5950, Springfield, Virginia 22150-5950, or by accessing the ATF web site 
(http://www.atf.treas.gov).

[T.D. ATF-447, 66 FR 19088, Apr. 13, 2001]



Sec. 53.21  Forms prescribed.

    (a) The appropriate ATF officer is authorized to prescribe all forms 
required by this part. All of the information called for in each form 
shall be furnished as indicated by the headings on the form and the 
instructions on or pertaining to the form. In addition, information 
called for in each form shall be furnished as required by this part. The 
form will be filed in accordance with the instructions on the form.
    (b) Forms may be requested from the ATF Distribution Center, P.O. 
Box 5950, Springfield, Virginia 22150-5950, or by accessing the ATF web 
site (http://www.atf.treas.gov).
    (c) Signature authorization. An individual's signature on a return, 
statement, or other document made by or for a corporation or a 
partnership shall be prima facie evidence that the individual is 
authorized to sign the return, statement, or other document.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991. Redesignated in part by T.D. 
ATF-365, 60 FR 33670, June 28, 1995, as amended by T.D. 372, 61 FR 
20724, May 8, 1996; T.D. ATF-447, 66 FR 19088, Apr. 13, 2001]



Sec. 53.22  Employer identification number.

    (a) Requirement of application. (1) Except for one-time or 
occasional filers, every person who makes a sale or use of an article 
with respect to which a tax is imposed by section 4181 of the Code, and 
who has not earlier been assigned an employer identification number or 
has not applied for one, shall make an application on Form SS-4 for an 
employer identification number. The application and any supplementary 
statement accompanying it shall be prepared in accordance with the 
applicable form, instructions, and regulations and shall set forth fully 
and clearly the data therein called for. Form SS-4 may be obtained from 
any internal revenue district office or internal revenue service center. 
The application shall be filed with the internal revenue officer 
designated in the instructions applicable to Form SS-4. The application 
shall be signed by:
    (i) The individual if the person is an individual;
    (ii) The president, vice-president, or other principal officer, if 
the person is a corporation;
    (iii) A responsible and duly authorized member or officer having 
knowledge of its affairs, if the person is a partnership or other 
unincorporated organization; or
    (iv) The fiduciary, if the person is a trust or estate.

[[Page 870]]

    An employer identification number will be assigned to the person in 
due course upon the basis of information reported on the application 
required under this section.
    (2) Time for filing Form SS-4. The application for an employer 
identification number shall be filed no later than the seventh day after 
the date of the first sale or use of an article with respect to which a 
tax is imposed by chapter 32 of the Code. However, the application 
should be filed far enough in advance of the first required use of such 
number to permit issuance of the number in time for compliance with such 
requirement.
    (3) One-time or occasional filers. A person who files a return under 
the provisions of section 53.151(a)(5) is not required to make 
application for an employer identification number. Such persons may use 
their social security number on any return, statement or other document 
submitted to ATF by that person in lieu of an employer identification 
number.
    (b) Use of employer identification number. The employer 
identification number assigned to a person liable for a tax imposed by 
chapter 32 of the Code shall be shown on any return, statement, or other 
document submitted to ATF by the person.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-365, 60 
FR 33670, June 28, 1995; T.D. ATF-447, 66 FR 19088, Apr. 13, 2001]



Sec. 53.23  Alternate methods or procedures.

    (a) A taxpayer, on specific approval by the appropriate ATF officer 
as provided in this section, may use an alternate method or procedure in 
lieu of a method or procedure specifically prescribed in this part. The 
Director may approve an alternate method or procedure, subject to stated 
conditions, when--
    (1) Good cause has been shown for the use of the alternate method or 
procedure;
    (2) The alternate method or procedure is within the purpose of, and 
consistent with the effect intended by, the specifically prescribed 
method or procedure, and affords equivalent security to the revenue; and
    (3) The alternate method or procedure will not be contrary to any 
provision of law and will not result in an increase in cost to the 
Government or hinder the effective administration of this part. No 
alternate method or procedure relating to the assessment, payment, or 
collection of tax shall be authorized under this paragraph.
    (b) Where the taxpayer desires to employ an alternate method or 
procedure, a written application to do so must be submitted. The 
application must specifically describe the proposed alternate method or 
procedure and must set forth the reasons therefor. Alternate methods or 
procedures must not be employed until the appropriate ATF officer has 
approved the application. The taxpayer must, during the period of 
authorization of an alternate method or procedure, comply with the terms 
of the approved application. Authorization for any alternate method or 
procedure may be withdrawn whenever, in the judgment of the appropriate 
ATF officer, the revenue is jeopardized or the effective administration 
of this part is hindered by the continuation of such authorization.

[T.D. ATF-365, 60 FR 33670, June 28, 1995, as amended by T.D. ATF-447, 
66 FR 19088, Apr. 13, 2001]



Sec. 53.24  Records.

    (a) In general--(1) Form of records. The records required by the 
regulations in this part shall be kept accurately, but no particular 
form is required for keeping the records. Such forms and systems of 
accounting shall be used as will enable appropriate ATF officers to 
ascertain whether liability for tax is incurred and, if so, the amount 
thereof.
    (2) [Reserved]
    (b) Copies of returns, schedules, and statements. Every person who 
is required, by the regulations in this part or by instructions 
applicable to any form prescribed thereunder, to keep any copy of any 
return, schedule, statement, or other document, shall keep such copy as 
a part of the records.
    (c) Records of claimants. Any person who, pursuant to the 
regulations in this part, claims a refund, credit, or abatement, shall 
keep a complete and detailed record with respect to the tax, interest, 
addition to the tax, additional

[[Page 871]]

amount, or assessable penalty to which the claim relates. Such record 
shall include any records required of the claimant by paragraph (b) of 
this section and subpart L of this part.
    (d) Place and period for keeping records. (1) All records required 
by this part shall be prepared and kept by the person required to keep 
them, at one or more convenient and safe locations accessible to 
appropriate ATF officers, and shall at all times be immediately 
available for inspection by such officers.
    (2) Except as otherwise provided in this subparagraph, every person 
required by the regulations in this part to keep records in respect of a 
tax shall maintain such records for at least three years after the due 
date of such tax for the return period to which the records relate, or 
the date such tax is paid, whichever is later. The records of claimants 
required by paragraph (c) of this section shall be maintained for a 
period of at least three years after the date the claim is filed.
    (e) Reproduction of original records. (1) General books of account, 
such as cash books, journals, voucher registers, ledgers, etc., shall be 
maintained and preserved in their original form. However, reproductions 
of supporting records of details, such as invoices, vouchers, production 
reports, sales records, certificates, proofs of exportation, etc., may 
be kept in lieu of the original records. Any process may be used which 
accurately and timely reproduces the original record, and which forms a 
durable medium for reproducing and preserving the original record.
    (2) Copies of records treated as original records. Whenever records 
are reproduced under this section, the reproduced records shall be 
preserved in conveniently accessible files, and provisions shall be made 
for examining, viewing, and using the reproduced records the same as if 
they were the original record. Such reproduced records shall be treated 
and considered for all purposes as though they were the original record. 
All provisions of law and regulations applicable to the original record 
are applicable to the reproduced record.

[T.D. ATF-365, 60 FR 33670, June 28, 1995, as amended by T.D. ATF-447, 
66 FR 19088, Apr. 13, 2001]

Subparts D-F [Reserved]



                          Subpart G--Tax Rates



Sec. 53.61  Imposition and rates of tax.

    (a) Imposition of tax. Section 4181 of the Code imposes a tax on the 
sale of the following articles by the manufacturer, producer, or 
importer thereof:
    (1) Pistols;
    (2) Revolvers;
    (3) Firearms (other than pistols and revolvers); and
    (4) Shells and cartridges.
    (b) Parts or accessories--(1) In general. No tax is imposed by 
section 4181 of the Code on the sale of parts or accessories of 
firearms, pistols, revolvers, shells, and cartridges when sold 
separately or when sold with a complete firearm for use as spare parts 
or accessories. The tax does attach, however, to sales of completed 
firearms, pistols, revolvers, shells, and cartridges, and to sale of 
such articles that, although in knockdown condition, are complete as to 
all component parts.
    (2) Component parts. Component parts are items that would ordinarily 
be attached to a firearm during use and, in the ordinary course of 
trade, are packaged with the firearm at the time of sale by the 
manufacturer or importer. All component parts for firearms are 
includible in the price for which the article is sold.
    (3) Nontaxable parts. Parts sold with firearms that duplicate 
component parts that are not includible in the price for which the 
article is sold.
    (4) Nontaxable accessories. Items that are not designed to be 
attached to a firearm during use or that are not, in the ordinary course 
of trade, provided with the firearm at the time of the sale by the 
manufacturer or importer are not includible in the price for which the 
article is sold.

[[Page 872]]

    (5) Examples--(i) In general. The following examples are provided as 
guidelines and are not meant to be all inclusive.
    (ii) Component parts. Component parts include items such as a frame 
or receiver, breech mechanism, trigger mechanism, barrel, buttstock, 
forestock, handguard, grips, buttplate, fore end cap, trigger guard, 
sight or set of sights (iron or optical), sight mount or set of sight 
mounts, a choke, a flash hider, a muzzle brake, a magazine, a set of 
sling swivels, and/or an attachable ramrod for muzzle loading firearms 
when provided by the manufacturer or importer for use with the firearm 
in the ordinary course of commercial trade. Component parts also include 
any part provided with the firearm that would affect the tax status of 
the firearm, such as an attachable shoulder stock.
    (iii) Nontaxable parts. Nontaxable parts include items such as extra 
barrels, extra sights, optical sights and mounts (in addition to iron 
sights), spare magazines, spare cylinders, extra choke tubes, and spare 
pins.
    (iv) Nontaxable accessories. Nontaxable accessories include items 
such as cleaning equipment, slings, slip on recoil pads (in addition to 
standard buttplate), tools, gun cases for storage or transportation, 
separate items such as knives, belt buckles, or medallions. Nontaxable 
accessories also include optional items purchased by the customer at the 
time of retail sale that do not change the tax classification of the 
firearm, such as telescopic sights and mounts, recoil pads, slings, 
sling swivels, chokes, and flash hiders/muzzle brakes of a type not 
provided by the manufacturer or importer of the firearm in the ordinary 
course of commercial trade.
    (c) Rates of tax. Tax is imposed on the sale of the articles 
specified in section 4181 of the Code at the rates indicated below.

------------------------------------------------------------------------
                                                                Percent
------------------------------------------------------------------------
(1) Pistols..................................................         10
(2) Revolvers................................................         10
(3) Firearms (other than pistols and revolvers)..............         11
(4) Shells and cartridges....................................         11
------------------------------------------------------------------------

    (d) Computation of tax. The tax is computed by applying to the price 
for which the article is sold the applicable rate. For definition of the 
term ``price'' see section 4216 of the Code and the regulations 
contained in subpart J of this part.
    (e) Liability for tax. The tax imposed by section 4181 of the Code 
is payable by the manufacturer, producer, or importer making the sale.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-404, 63 
FR 52603, Oct. 1, 1998]



Sec. 53.62  Exemptions.

    (a) Firearms subject to the National Firearms Act. Section 4182(a) 
provides that the tax imposed by section 4181 of the Code shall not 
attach to the sale of any firearms on which the tax imposed by section 
5811 of the Code (relating to tax on the transfer of machine guns, 
short-barreled firearms, and other weapons) has been paid. Any 
manufacturer, producer, or importer claiming such an exemption from the 
tax imposed by section 4181 of the Code must maintain such records and 
be prepared to produce such evidence as will establish the right to the 
exemption.
    (b) Sales to Defense Department or to U.S. Coast Guard--(1) Military 
department. Section 4182(b) of the Code provides that the tax imposed by 
section 4181 of the Code shall not attach to the sale of firearms, 
pistols, revolvers, shells, or cartridges that are purchased with funds 
appropriated for a military department of the United States. For this 
purpose, the term ``military department'' means the Department of the 
Army, the Department of the Navy, and Department of the Air Force. 
Included in the Department of the Navy are naval aviation and the Marine 
Corps.
    (2) Coast Guard. Section 655, title 14, U.S.C., provides that no tax 
on the sale or transfer of firearms, pistols, revolvers, shells, or 
cartridges may be imposed on such articles when bought with funds 
appropriated for the United States Coast Guard.
    (3) Supporting evidence. Any manufacturer, producer, or importer 
claiming an exemption from the tax imposed by section 4181 of the Code 
by reason of section 4182(b) and section 655, title 14 of the Code must 
maintain such records and be prepared to produce

[[Page 873]]

such evidence as will establish the right to the exemption. Generally, 
clearly identified orders or contracts of a military department signed 
by an authorized officer of the military department will be sufficient 
to establish the right to the exemption. In the absence of such orders 
or contracts, a statement, signed by an authorized officer of a military 
department or the Coast Guard, that the prescribed articles were 
purchased with funds appropriated for that military department or the 
Coast Guard will constitute satisfactory evidence of the right to an 
exemption.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-344, 58 
FR 40354, July 28, 1993]



Sec. 53.63  Other tax-free sales.

    For provisions relating to tax-free sales of firearms and ammunition 
see:
    (a) Section 4221 and 27 CFR 53.131, ``Tax-free sales; general 
rule''.
    (b) Section 4223 and 27 CFR 53.132, ``Tax-free sale of articles to 
be used for, or resold for, further manufacture''.
    (c) Section 4222 and 27 CFR 53.140, ``Registration''.

Subparts H-I [Reserved]



     Subpart J--Special Provisions Applicable to Manufacturers Taxes



Sec. 53.91  Charges to be included in sale price.

    (a) In general. The ``price'' for which an article is sold includes 
the total consideration paid for the article, whether that consideration 
is in the form of money, services, or other things. However, for 
purposes of the taxes imposed under chapter 32 of the Code, certain 
collateral charges made in connection with the sale of a taxable article 
must be included in the taxable sale price, whereas others may be 
excluded. Any charge which is required by a manufacturer, producer, or 
importer to be paid as a condition of its sale of a taxable article and 
which is not attributable to an expense falling within one of the 
exclusions provided in section 4216 of the Code or the regulations 
thereunder is includable in the taxable sale price. It is immaterial for 
this purpose that the charge may be paid to a person other than the 
manufacturer, producer, or importer, or that it may be separately billed 
to the purchaser as a charge earmarked for expenses incurred or to be 
incurred in his behalf, such as charges for demonstration or display of 
the article, for sales promotion programs, or otherwise. With respect to 
the rules relating to exclusion of charges for local advertising of a 
manufacturer's products, see section 4216(e) of the Code and 
Sec. 53.100. In the case of sales on credit, a carrying, finance, or 
service charge is excludable from the sale price if it is reasonably 
related to the costs of carrying the deferred portion of the sale price 
(such as interest on the deferred portion of the sale price, expenses of 
bookkeeping necessary to keep the records of such sales, and expenses of 
correspondence and other communication in connection with collection).
    (b) Tools and dies. Separate charges for tools and dies used in the 
manufacture or production of a taxable article are to be included, in 
whole or in part, in the sale price on which the tax is based. It is 
immaterial whether the charges for such items are billed in a lump sum 
or are amortized or allocated to each of the taxable articles. If, at 
the termination of a contract to manufacture taxable articles, the tools 
and dies used in production pass to the purchaser, only the amount of 
depreciation of the tools and dies incurred in production, computed on a 
``production output'' basis, should be included in the sale price. If 
the purchaser furnishes the tools and dies, the amount of the cost 
thereof, to the extent that such cost has been depreciated in the 
production of the taxable articles (computed on a ``production output'' 
basis), shall be included in determining the sale price of the articles 
for purposes of computing the tax.
    (c) Charges for warranty. A charge for a warranty of an article 
which the manufacturer, producer, or importer requires the purchaser to 
pay in order to obtain the article shall be included in the sale price 
of the article on which the tax is computed. On the other

[[Page 874]]

hand, a charge for a warranty of a taxable article paid at the 
purchaser's option shall not be included in the sale price for purposes 
of computing tax thereon.
    (d) Charges for coverings, containers, and packing. Any charge by 
the manufacturer, producer, or importer for coverings and containers of 
whatever nature used to pack an article for shipment shall be included 
as part of the sale price for the purpose of computing the tax, whether 
or not the charges are identified as such on the invoice or are billed 
separately. Even though there is an agreement that the manufacturer, 
producer, or importer will repay all or a portion of the charge for the 
coverings or containers upon the return thereof, the full charge 
nevertheless shall be included in the sale price. It is immaterial 
whether the charge made at the time of sale is more or less than the 
actual value of the covering or container. See Sec. 53.173(b)(4) for 
provisions relating to the claiming of a credit or refund in the case of 
a price readjustment due to the return or repossession of a covering or 
container. Packing charges are to be included in the sale price whether 
the charges cover normal packing or special packing services, such as 
for extra protection of the article or for odd-lot quantities. This rule 
shall apply whether the packing services are initiated by the 
manufacturer, producer, or importer or are furnished at the request of 
the purchaser and whether the packing is performed by the manufacturer, 
producer, or importer or by another person at his request. If the 
purchaser supplies packing materials, the fair market value of such 
materials must be included in the tax base when computing tax liability 
on the sale of the article.
    (e) Taxable and nontaxable articles sold as a unit. Where a taxable 
article and a nontaxable article are sold by the manufacturer as a unit, 
the tax attaches to that portion of the manufacturer's sale price of the 
unit which is properly allocable to the taxable article. Normally, the 
taxable portion of such a unit may be determined by applying to the 
manufacturer's sale price of the unit the ratio which the manufacturer's 
separate sale price of the taxable article bears to the sum of the sale 
prices of both the taxable and nontaxable articles, if such articles are 
sold separately by the manufacturer. Where the articles (or either one 
of them) are not sold separately by the manufacturer and do not have 
established sale prices, the taxable portion is to be determined from a 
comparison of the actual costs of the articles to the manufacturer. 
Thus, if the cost of the taxable article represents four-fifths of the 
total cost of the complete unit, the tax applies to four-fifths of the 
price charged by the manufacturer for the unit.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-312, 56 
FR 31083, July 9, 1991]



Sec. 53.92  Exclusions from sale price.

    (a) Tax--(1) Tax not part of taxable sale price. The tax imposed by 
chapter 32 of the Code on the sale of an article is not part of the 
taxable sale price of the article. Thus, if a manufacturer computes the 
tax on a sale price which is determined without regard to the tax, and 
it charges the proper tax as a separate item, the amount of tax so 
charged does not become a part of the taxable sale price and no tax is 
due on the tax so charged. Where no separate charge is made as tax, it 
will be presumed that the price charged to the purchaser for the article 
includes the proper tax, and the proper percentage of such price will be 
allocated to the tax.
    (2) Computation of tax. If an article subject to tax at the rate of 
10 percent is sold for $100 and an additional item of $10 is billed as 
tax, $100 is the taxable selling price and $10 is the amount of tax due 
thereon. However, if the article is sold for $100 with no separate 
billing or indication of the amount of the tax, it will be presumed that 
the tax is included in the $100, and a computation will be necessary to 
determine what portion of the total amount represents the sale price of 
the article and what portion represents the tax. The computation is as 
follows:

 
                                                               sale price including
                                           Taxable sale                tax
                                               price       = -----------------------
                                                                100 + rate of tax
----------------------------------------------------------------------------------------------------------------
 


[[Page 875]]


Thus, if the tax rate is 10 percent and the sale price including tax is 
$100, the taxable sale price is $90.91 (that is, $100 divided by 
(100+10)), and the tax is 10 percent of $90.91, or $9.09.

    (b) Transportation, delivery, insurance, or installation charges--
(1) Charges incurred pursuant to sale. Charges for transportation, 
delivery, insurance, installation, and other expenses actually incurred 
in connection with the delivery of an article to a purchaser pursuant to 
a bona fide sale shall be excluded from the sale price in computing the 
tax. Such charges include all items of transportation, delivery, 
insurance, installation, and similar expense incurred after shipment to 
a customer begins, in response to the customer's order, pursuant to a 
bona fide sale. However, costs of such nature incurred by a 
manufacturer, producer, or importer in transporting, in the normal 
course of business and for its benefit and convenience, articles from a 
factory or port of entry to a warehouse or other facility (regardless of 
the location of such warehouse or facility) are not considered as being 
incurred in connection with the delivery of an article to a purchaser 
pursuant to a bona fide sale, and charges therefor cannot be excluded 
from the sale price in computing tax liability. Similarly, an allowance 
granted by a manufacturer as reimbursement for expenses incurred by the 
purchaser in shipping used articles to the manufacturer for credit 
against the purchase price of taxable articles shall not be excluded 
from the sale price when computing tax due on the sale of the taxable 
articles. In any event, no charge may be excluded from the sale price 
unless the conditions set forth in paragraph (b)(2) of this section are 
complied with. Said conditions are prescribed under the authority 
granted the Secretary in section 4216(a) of the Code.
    (2) Only actual expenses to be excluded. Where a separate charge is 
made for transportation or other expenses incurred in connection with 
the delivery of an article to the purchaser pursuant to a bona fide 
sale, there shall be excluded in arriving at the sale price subject to 
tax only that portion of the charge which represents the actual expenses 
incurred for the transportation or other excludable expenses. Where a 
separate charge is less than the actual expense, the difference is 
presumed to be included in the billed price. Such difference, together 
with the separate charge, shall be excluded in arriving at the sale 
price on which the tax is computed. Similarly, where no separate charge 
is made but the manufacturer, producer, or importer incurs an expense of 
the type to which this paragraph has application, the amount of such 
expense actually incurred shall be excluded from the sale price on which 
the tax is computed. Where transportation expense is incurred in 
conjunction with a shipment composed of both taxable and nontaxable 
articles, only the portion of the expense allocable to the taxable 
articles shall be excludable. In general, unless the taxpayer 
establishes to the satisfaction of the appropriate ATF officer that 
another method reasonably apportions such freight expense between 
taxable and nontaxable articles, such expense should be apportioned on 
the basis of the relative weights (or, if available, the relative 
published tariff rates) applicable to the taxable and nontaxable 
articles. Where it is not feasible to apportion such expense on the 
basis of relative weights or tariff rates, the expense shall be 
apportioned on another reasonable basis; for example, in the case of a 
shipment including both taxable and nontaxable articles which are 
subject to the same tariff rate, it may be appropriate to apportion the 
transportation expense on the basis of the relative sale prices. A 
charge for insurance in connection with the delivery of an article to a 
purchaser is considered to represent an expense actually incurred only 
to the extent that an amount equivalent to such charge is paid or 
payable by the manufacturer to a person authorized to assume such 
insurance risk.
    (3) Transportation, delivery, or installation services performed by 
manufacturer. For purposes of computing the taxable sale price of 
articles, it is immaterial whether the transportation, delivery, or 
other services of the type to which this paragraph has application are 
performed by a common carrier or independent agency for or on behalf of 
the manufacturer, producer, or importer,

[[Page 876]]

or are performed by the manufacturer, producer, or importer with the use 
of its own vehicles or other facilities. Thus, where a manufacturer, 
producer, or importer performs the transportation, delivery, or other 
services with its equipment, tools, employees, etc., the cost of such 
services allocable to the sale of the taxable article shall be excluded. 
In determining whether an expense is an excludable transportation or 
delivery expense, only those expenses incurred by reason of the fact 
that the purchaser accepts delivery at some point other than the 
manufacturer's place of business shall be considered excludable 
transportation or delivery expenses. All expenses incurred in placing an 
article packed, ready for shipment on the loading dock at the 
manufacturer's factory are not excludable transportation or delivery 
expenses. An allowance granted by the manufacturer, producer, or 
importer to the purchaser for transportation, delivery, or other 
expenses incurred or to be incurred by the purchaser in connection with 
the sale shall be excluded in computing the taxable sale price, if 
charges for similar expenses would be excludable if incurred by the 
manufacturer.
    (4) Records in support of exclusion. Every manufacturer, producer, 
or importer making sales of taxable articles shall keep records which 
will disclose the amount of transportation, delivery, insurance, 
installation or other expense actually incurred by it in connection with 
the delivery of a taxable article to a purchaser pursuant to a bona fide 
sale.
    (c) Other charges. A charge or expense not within the scope of 
paragraph (a) or (b) of this section, whether or not separately stated, 
may not be excluded in computing the taxable sale price unless it can be 
shown by adequate records that the charge or expense is not properly 
included as a manufacturing or selling expense or is in no way 
incidental to placing the article in condition packed ready for 
shipment. Commissions to manufacturers' agents, or allowances, payments, 
or adjustments made to, and for the benefit of, persons other than the 
purchaser may not be excluded or deducted, under any condition, in 
computing the sale price upon which the tax is computed.



Sec. 53.93  Other items relating to tax on sale price.

    (a) Exchanges. If, in connection with the sale of an article subject 
to a tax imposed under chapter 32 of the Code on the price for which 
sold, a manufacturer receives from its vendee another article in 
exchange, the tax on the manufacturer's sale shall be computed on the 
basis of the amount allowed for the article received from the vendee, 
plus any additional amount charged the vendee.
    (b) Replacements under warranty. If an article, subject to a tax 
imposed under chapter 32 of the Code on the price for which sold, is 
returned to the manufacturer by reason of the failure of the article 
under a warranty as to its quality or service, and a new article is 
given by the manufacturer, free, or at a reduced price, the tax on the 
new article shall be computed on the actual amount, if any, to be paid 
to the manufacturer for the new article. See Sec. 53.174(b) for the 
circumstances under which the allowance made by the manufacturer, 
producer, or importer upon the return of the first article constitutes a 
price readjustment of the sale price of the first article and the 
extent, if any, to which a credit may be allowed, or refund made, of the 
tax paid by the manufacturer, producer, or importer on the sale of the 
first article.
    (c) Readjustments in sale price. Readjustment in sale price (such as 
allowable discounts, rebates, bonuses, etc.) cannot be anticipated. The 
tax must be based upon the original price unless the readjustments have 
actually been made prior to the close of the period for which the tax 
upon the sale is returned. However, if the price upon which the tax was 
computed is subsequently readjusted, credit may be taken against the tax 
due on a subsequent return or a claim for refund filed as provided by 
section 6416(b)(1) of the Code and Secs. 53.174-53.176.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-344, 58 
FR 40354, July 28, 1993]

[[Page 877]]



Sec. 53.94  Constructive sale price; scope and application.

    (a) In general. Section 4216(b) of the Code pertains to those taxes 
imposed under chapter 32 of the Code that are based on the price for 
which an article is sold, and contains the provisions for constructing a 
tax base other than the actual sale price of the article, under certain 
defined conditions.
    (b) Specific applications. (1) Section 4216(b)(1) of the Code 
applies to:
    (i) Arm's-length sales at retail or on consignment, other than those 
sales at retail and to retailers to which section 4216(b)(2) of the Code 
and Sec. 53.96 apply; and
    (ii) Sales otherwise than at arm's length, and at less than fair 
market price.
    (2) Section 4216(b)(2) of the Code applies generally to arm's-length 
sales of an article at retail or to retailers, or both, where the 
manufacturer also sells the same article to wholesale distributors.
    (3) Section 4216(b)(3) of the Code provides a formula for 
determining a constructive sale price for sales of taxable articles 
between members of an affiliated group of corporations (as ``affiliated 
group'' is defined in section 1504(a) of the Code) in those instances 
where the purchasing corporation regularly resells to retailers but does 
not regularly resell to wholesale distributors, and except for 
situations where section 4216(b)(4) of the Code applies.
    (4) Section 4216(b)(4) of the Code provides a special method for 
computing a constructive sale price for sales of taxable articles 
between affiliated corporations where the purchasing corporation sells 
only to retailers, and the normal method of selling within the industry 
is for manufacturers to sell to wholesale distributors.
    (c) Definitions. For purposes of section 4216(b) of the Code and 
Secs. 53.94-53.97 and unless otherwise indicated:
    (1) Sale at retail. A ``sale at retail,'' or a ``retail sale'', is a 
sale of an article to a purchaser who intends to use or lease the 
article rather than resell it. The fact that articles are sold in 
wholesale lots, or at wholesale prices, will not change the character of 
such sales as ``sales at retail'' if the purchaser is not engaged in the 
business of reselling such articles, and acquires them for the purpose 
of using them rather than reselling them.
    (2) Retail dealers. A ``retail dealer'', or ``retailer'', is a 
person engaged in the business of selling articles at retail.
    (3) Wholesale distributor. The term ``wholesale distributor'' means 
a person engaged in the business of selling articles to persons engaged 
in the business of reselling such articles.



Sec. 53.95  Constructive sale price; basic rules.

    (a) In general. Section 4216(b)(1) of the Code sets forth the 
conditions that require the Secretary to construct a sale price on which 
to compute a tax imposed under chapter 32 of the Code on the price for 
which an article is sold. The section requires a constructive sale price 
to be established where a taxable article is:
    (1) Sold at retail;
    (2) Sold while on consignment; or,
    (3) Sold otherwise than through an arm's-length transaction at less 
than fair market price.
    (b) Sales at retail. Section 4216(b)(1)(A) of the Code relates to 
the determination of a constructive sale price for sales of taxable 
articles sold at arm's-length and at retail. In the case of such sales, 
the constructive sale price is the highest price for which such articles 
are sold to wholesale distributors, in the ordinary course of trade, by 
manufacturers or producers thereof, as determined by the Secretary. If 
the constructive sale price is less than the actual sale price, the 
constructive sale price shall be used as the tax base. If the 
constructive sale price is not less than the actual sale price, the 
actual sale price shall be considered as not less than fair market, and 
shall be used as the tax base. In determining the highest price for 
which articles are sold by manufacturers to wholesale distributors, 
there must be taken into consideration the normal industry practices 
with respect to inclusions and exclusions under section 4216(a) of the 
Code. However, once a constructive sale price has been determined by the 
Secretary, no further adjustment of such price shall be made. The 
provisions of section 4216(b)(1)(A) of the Code and this paragraph shall 
not

[[Page 878]]

apply in those instances where the provisions of section 4216(b)(2) of 
the Code and Sec. 53.96 apply.
    (c) Sales on consignment. As in the case of sales at retail, the 
constructive sale price for sales on consignment shall be the price for 
which such articles are sold, in the ordinary course for trade, by 
manufacturers or producers thereof, as determined by the Secretary. For 
purposes of section 4216(b)(1)(B) of the Code and this paragraph, an 
article is considered to be sold on consignment if it is sold while it 
is on consignment to a person which has the right to sell, and does 
sell, such article in its own name, but never receives title to the 
article from the manufacturer. Ordinarily, the constructive sale price 
of an article sold on consignment is the net price received by the 
manufacturer from the consignee. The provisions of section 4216(b)(1)(B) 
of the Code and this paragraph shall not apply if the provisions of 
section 4216(b)(2) of the Code and Sec. 53.96 apply.
    (d) Sales not at arm's-length. For purposes of section 4216(b)(1)(C) 
of the Code and this paragraph, a sale is considered to be made under 
circumstances otherwise than at ``arm's-length'' if:
    (1) One of the parties is controlled (in law or in fact) by the 
other, or there is common control, whether or not such control is 
actually exercised to influence the sale price, or
    (2) The sale is made pursuant to special arrangements between a 
manufacturer and a purchaser.

In case of an article sold otherwise than at arm's-length, and at less 
than fair market price, the constructive sale price shall be the price 
for which such articles are sold, in the ordinary course of trade, by 
manufacturers or producers thereof, as determined by the Secretary. Once 
such a constructive sale price has been determined, no further 
adjustment of such price shall be made. See sections 4216(b) (3) and (4) 
of the Code, and Sec. 53.97, for specific methods for determining 
constructive sale prices for intercompany sales under certain defined 
conditions.



Sec. 53.96  Constructive sale price; special rule for arm's-length sales.

    (a) In general. Section 4216(b)(2) of the Code provides a special 
rule under which a manufacturer shall determine a constructive sale 
price for this sale of taxable articles at retail, and to retail 
dealers, under certain conditions. The rule is applicable where:
    (1) The manufacturer regularly sells such articles at retail, or to 
retailers, or both, as the case may be,
    (2) The manufacturer also regularly sells such articles to one or 
more wholesale distributors in arm's-length transactions, and the 
manufacturer establishes that its prices in such cases are determined 
without regard to any benefit to be derived under section 4216(b)(2) of 
the Code, and
    (3) The transactions are arm's-length transactions.
    (4) A manufacturer meeting the foregoing requirements shall base its 
tax liability for sales at retail and sales to retailers on the lower of 
its actual sale price or the highest price for which it sells the same 
articles under the same conditions to wholesale distributors.
    (b) Definitions. For purposes of section 4216(b)(2) of the Code and 
this section:
    (1) Actual sale price. ``Actual sale price'' means the actual 
selling price for an article determined in the same manner as sale price 
is determined for a taxable sale. Accordingly, such price must reflect 
the inclusions and exclusions set forth in section 4216(a) of the Code, 
and any price adjustments described in section 6416(b)(1) of the Code.
    (2) Highest price to wholesale distributors. The ``highest price'' 
charged wholesale distributors for an article by a manufacturer, 
producer, or importer thereof, is the highest price at which the 
manufacturer, producer, or importer sells the article to wholesale 
distributors, determined without regard to quantity. Such price shall be 
determined in the same manner as sale price is determined for a taxable 
sale with respect to the inclusions and exclusions under section 4216(a) 
of the Code; however, since the price is to be a ``highest'' price, no 
further adjustment may be made for price readjustments under section 
6416(b)(1) of the Code.

[[Page 879]]

    (3) Regular sales. An article is considered to be sold ``regularly'' 
at retail or to retailers if sales are made at retail or to retailers 
periodically and recurringly as a regular part of the seller's business. 
If a seller makes only isolated or casual sales of an article at retail 
or to retailers, it is not considered to be selling ``regularly'' at 
retail or to retailers. Similarly, a manufacturer is considered to be 
making regular sales of an article to one or more distributors if it 
sells the article to at least one distributor periodically and 
recurringly as a regular part of its business.
    (4) Normal method of sales in industry. In the absence of a showing 
to the appropriate ATF officer of a more appropriate manner of 
determining the normal method of sales within an industry which is 
practical in application, the normal method of sales within an industry 
shall be regarded as not being at retail or to retailers, or both, if 
the industry dollar volume of sales which are at retail or to retailers, 
or both, is less than half the total industry dollar volume of sales at 
all levels of distribution by manufacturers, producers, or importers, 
including sales to other manufacturers, producers, or importers.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-312, 56 
FR 31083, July 9, 1991]



Sec. 53.97  Constructive sale price; affiliated corporations.

    (a) In general. Sections 4216(b) (3) and (4) of the Code establish 
procedures for determining a constructive sale price under section 
4216(b)(1)(C) of the Code for sales between corporations that are 
members of the same ``affiliated group'', as that term is defined in 
section 1504(a) of the Code.
    (b) Sales to which section 4216(b)(3) of the Code applies. Section 
4216(b)(3) of the Code provides a procedure for determining a 
constructive sale price under section 4216(b)(1)(C) of the Code in those 
instances where:
    (1) A manufacturer, producer or importer regularly sells a taxable 
article to a wholesale distributor which is a member of the same 
affiliated group as the manufacturer, producers or importer, and
    (2) The wholesale distributor regularly sells such article to one or 
more independent retailers, but does not regularly sell to wholesale 
distributors. Under such circumstances the constructive sale price for 
the article shall be an amount equal to 90 percent of the lowest price 
for which the distributor regularly sells the article in arm's-length 
transactions to such independent retailers. Once the constructive sale 
price has been determined, no adjustment shall be made for inclusions or 
exclusions under section 4216(a) of the Code or price readjustments 
under section 6416(b)(1) of the Code. If both sections 4216(b)(3) and 
4216(b)(4) of the Code apply with respect to the sale of an article, the 
constructive sale price for such article shall be the lower of the 
prices computed under sections 4216(b)(3) and 4216(b)(4).
    (c) Sales to which section 4216(b)(4) of the Code applies. Section 
4216(b)(4) of the Code provides a procedure for determining a 
constructive sale price under section 4216(b)(1)(C) of the Code in those 
instance where:
    (1) A manufacturer, producer, or importer regularly sells (except 
for tax-free sales) a taxable article only to a wholesale distributor 
which is a member of the same affiliated group as the manufacturer, 
producer, or importer,
    (2) The distributor regularly sells (except for tax-free sales) such 
article only to retail dealers, and
    (3) The normal method of sales for such articles within the industry 
is to sell such articles in arm's-length transactions to wholesale 
distributors.
    (4) Under section 4216(b)(4) of the Code, the constructive sale 
price of such article shall be the median price at which the 
distributor, at the time of the sale by the manufacturer, resells the 
article to retail dealers, reduced by a percentage of such price equal 
to the percentage which:
    (i) The difference between the median price for which comparable 
articles are sold to wholesale distributors, in the ordinary course of 
trade, by manufacturers of producers thereof, and the median price at 
which such wholesale distributors in arm's-length transactions sell such 
comparable articles to retailers, is of

[[Page 880]]

    (ii) The median price at which such wholesale distributors in arm's-
length transactions sell such comparable articles to retailers.
    (iii) For purposes of this paragraph, the ``median price'' for which 
an article is sold at a particular level of distribution is the price 
midway between the highest and lowest prices charged vendees at the 
particular level of distribution. Where only one price is charged at a 
level of distribution, ``median price'' is equivalent to ``actual 
price''. All sale prices referred to in paragraphs (c) and (d) of this 
section are prices that must reflect the inclusions and exclusions set 
forth in section 4216(a) of the Code. However, once a constructive sale 
price has been determined under these paragraphs, no further adjustment 
of such price is allowed.
    (d) Application of section 4216(b)(4) of the Code. The application 
of section 4216(b)(4) of the Code and paragraph (c) of this section may 
be illustrated by the following example:

    Example. M, a corporation engaged in the manufacture of article X, 
sold 100 of such articles at $10.00 per article to a wholesale 
distributor N, a corporation engaged in the business of selling X 
articles to independent retail dealers. N is a member of the same 
affiliated group of corporations as M. M sells X articles only to N. The 
normal method of manufacturers' sales of X articles in the industry is 
to sell to independent wholesale distributors. N corporation sells X 
articles to retailers for $15.00 each. The price for which comparable X 
articles are sold to wholesale distributors in the ordinary course of 
trade by manufacturers thereof is $12.00 per article. Wholesale 
distributors sell X articles to retailers in the ordinary course of 
trade for $16.00 per article. Under the foregoing facts the constructive 
sale price determined under section 4216(b)(4) of the Code and this 
paragraph is $11.25, computed as follows:
[GRAPHIC] [TIFF OMITTED] TC05OC91.020

    (e) Determination of ``lowest price''. In addition to other 
considerations, in determining a ``lowest price'' for purposes of 
sections 4216(b) (1) and (3) of the Code and Sec. 53.97, such price 
shall be determined:
    (1) Without requiring that a given percentage of sales be made at 
that price (provided that the volume of sales made at that price is 
great enough to indicate that those sales have not been engaged in 
primarily to establish a lower tax base), and
    (2) Without including any charge for a fixed amount that the 
purchaser has an unconditional right to recover on the basis of a 
contractual arrangement existing at the time of sale.
    (f) Definitions. For purposes of this section and paragraphs (3) and 
(4) of section 4216(b) of the Code, the term ``regularly sells'' has the 
same meaning as that accorded the term ``regular sales'' in 
Sec. 53.96(b)(3), and the term ``normal method of sales in the 
industry'' has the same meaning as accorded that term in 
Sec. 53.96(b)(4).

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-312, 56 
FR 31083, July 9, 1991]



Sec. 53.98  Computation of tax on leases and installment sales.

    (a) Leases. When a taxable article is leased by a manufacturer, 
producer, or importer, liability for tax is incurred, except as provided 
by section 4217(b) of the Code and Sec. 53.104, on each payment made 
with respect to such lease. Tax is payable on each lease payment as long 
as the article is leased by the manufacturer, producer, or importer. The 
tax payable with respect to each lease payment is a percentage of each 
payment based on the rate of tax, if any, in effect on the date the 
lease payment is due. If the article is subsequently sold by the 
manufacturer, producer, or importer, the tax applies also to such sale, 
without regard to the tax paid when the article was leased. For 
definition of the term ``lease'', see Sec. 53.103.
    (b) Installment sales. When a taxable article is sold under an 
installment payment contract with title reserved in the seller, or under 
a conditional sale contract, chattel mortgage arrangement or other 
arrangement creating a security interest with payments to be made in 
installments, tax shall be computed and paid on each payment made by the 
purchaser. The tax payable with each payment is a percentage of each 
payment based on the rate of tax, if any, in effect on the date the 
payment is due. The part of each payment that is subject to tax is that 
portion of the payment equal to

[[Page 881]]

the percentage of the total portion of the payment equal to the 
percentage of the total charge for the article that is subject to tax. 
For example, if the total charge for the article is $1,000, and of the 
total amount charged only 90 percent thereof, or $900, is subject to tax 
by reason of exclusions, then only 90 percent of the installment payment 
is subject to tax. If the tax base is a constructive sale price computed 
under section 4216(b) of the Code that is less than the actual sale 
price of the article, the portion of each payment subject to tax is the 
percentage of such payment equal to the percentage that the constructive 
sale price bears to the actual sale price. For example, if an article is 
sold at retail for $100, and the constructive sale price for such an 
article computed under the provisions of section 4216(b)(1)(A) of the 
Code is $75, the percentage which the constructive sale price bears to 
the actual sale price is 75 percent. Accordingly, only 75 percent of 
each installment payment is subject to tax.
    (c) Sales on credit. Where articles are sold on credit under 
conditions other than those specified in paragraph (b) of this section, 
the entire tax shall be reported and paid with the return covering the 
period in which the sale is made, even though the price may not be paid 
to the manufacturer, producer, or importer until a later date, or not 
paid at all.



Sec. 53.99  Sales of installment accounts.

    (a) In general. Except as provided in paragraph (d) of this section, 
in case of a sale or other disposition by a manufacturer, producer, or 
importer of an installment account of the type specified in section 
4216(c) of the Code, the tax shall not apply to subsequent installment 
payments on such account. Instead, there shall be paid an amount equal 
to the difference between the tax previously paid on such installment 
account and the total tax computed by applying:
    (1) To each installment due before the sale of the installment 
account, the rate of tax applicable at the time payment thereof was due, 
and
    (2) To each installment, the time for payment of which has not 
arrived, the rate of tax which, under the provisions of chapter 32 of 
the Code as in effect on the date of the sale of the installment 
account, is (or is to be) in effect on the date such installment is due. 
However, see paragraph (b) of this section if the sale is made in a 
bankruptcy or insolvency proceeding. The tax due under this paragraph 
shall be included in the return for the period in which the account is 
sold.
    (b) Sale in bankruptcy or insolvency proceeding. In the case of a 
sale of an installment account of a manufacturer, producer, or importer 
pursuant to the order of, or subject to the approval of, a court of 
competent jurisdiction in a bankruptcy or insolvency proceeding, the 
amount of tax due shall be computed and paid as provided in paragraph 
(a) of this section but shall not exceed the amount of tax computed by 
multiplying:
    (1) The proportionate share of the amount for which such accounts 
are sold which is allocable to each unpaid installment payment, by
    (2) The rate of tax which, under the provisions of chapter 32 of the 
Code as in effect on the date of the sale of the installment account, is 
(or is to be) in effect on the date such payment is due.
    (c) Collection of installment accounts on behalf of the 
manufacturer. Where a manufacturer, producer, or importer retains title 
to an installment account but turns it over to another person for 
collection on a fee basis, no sale of such account (or other disposition 
as contemplated in section 4216(d) of the Code) has been made. The tax 
shall continue to be paid as provided by section 4216(c) of the Code.
    (d) Returned installment accounts. Where an installment account 
which has been sold or otherwise disposed of is returned to the 
manufacturer, producer, or importer who sold it under an agreement under 
which the account was sold, and credit or refund has been allowed under 
section 6416(b)(5) of the Code and Sec. 53.183, the manufacturer, 
producer, or importer shall pay tax as provided by section 4216(c) of 
the Code and Sec. 53.98 on any subsequent payments made on such returned 
installment account until such time as there shall have been paid the 
total tax liability

[[Page 882]]

with respect to the account as computed under paragraph (a) of this 
section.
    (e) Limitation. The sum of the amounts payable under this section 
and Sec. 53.98 or an installment account shall not exceed the total 
amount of tax which would be payable if such installment account had not 
been sold or otherwise disposed of (computed as provided in subsection 
(c)).



Sec. 53.100  Exclusion of local advertising charges from sale price.

    (a) In general. Section 4216(e) of the Code deals with the treatment 
to be accorded charges made by a manufacturer for, and reimbursements by 
a manufacturer or expenditures in connection with the advertising of 
certain articles subject to excise tax under chapter 32 of the Code. 
Section 4216(e) of the Code provides an exclusion (which is in addition 
to the exclusions provided by section 4216(a) of the Code and 
Sec. 53.92) in respect of charges for local advertising, as defined in 
paragraph (b) of this section, for purposes of determining the price for 
which an article is sold. See paragraph (c) of this section. The 
exclusion provided by section 4216(e) of the Code and paragraph (c) of 
this section has application only if the advertising is broadcast over a 
radio or television station, appears in a newspaper or magazine, or is 
displayed by means of an outdoor advertising sign or poster. Section 
4216(e) of the Code also provides an overall limitation in respect of 
the sum of the amount of the exclusions from price as charges for local 
advertising and the amount of the readjustments authorized under section 
6416(b)(1) of the Code (relating to credits or refunds for price 
readjustments) in respect of reimbursements by a manufacturer of 
expenditures for local advertising. See Sec. 53.101. For provisions 
prohibiting exclusion from price or readjustment of price in respect of 
charges for, and reimbursements of expenditures for, advertising other 
than local advertising, see Sec. 53.102.
    (b) Definition of local advertising--(1) In general. For purposes of 
the regulations under sections 4216(e) and 6416(b)(1) of the Code 
(Secs. 53.100-53.102 and 53.173-53.176), the term ``local advertising'' 
means advertising which relates to an article with respect to which tax 
is imposed under chapter 32 of the Code on the price for which sold and 
which:
    (i) Is initiated or obtained by the purchaser or any subsequent 
vendee,
    (ii) Names the article for which the price is determinable under 
section 4216 and states the location at which such article may be 
purchased at retail, and
    (iii) Is broadcast over a radio station or television station, 
appears in a newspaper or magazine, or is displayed by means of an 
outdoor advertising sign or poster.
    (2) Initiating or obtaining advertising. For purposes of paragraph 
(b)(1) of this section, the advertising must be initiated or obtained by 
one or more of the persons in the chain of distribution of the article 
(wholesale distributor, jobber, dealer, etc.) who purchased the article 
for resale. For purposes of this subparagraph, the manufacturer is not 
considered to be one of the persons in the chain of distribution of the 
article. In general, advertising of an article is considered to be 
initiated or obtained by one or more persons in the chain of 
distribution of the article if any such person:
    (i) Takes an active part in the actual planning and development, or 
in the arrangements or negotiations leading to the development, of the 
form and content of the advertising, or
    (ii) Contracts for the placement of the advertising.

The participation by the manufacturer of the article in the planning, 
development, or placement of the advertising is immaterial provided the 
advertising is in fact initiated or obtained by one or more persons in 
the chain of distribution of the article. Furthermore, it is immaterial 
whether or not the advertising is subject to the approval of the 
manufacturer of the article. However, if no person in the chain of 
distribution of the article takes an active part in the actual planning 
and development, or in the arrangements or negotiations leading to the 
development, of the form and content of the advertising, but, rather, 
all such planning,

[[Page 883]]

development, arrangements, and negotiations are accomplished by the 
manufacturer of the article, then such manufacturer is considered to 
have initiated the advertising, and if he also contracts for the 
placement of the advertising, such advertising does not qualify as 
``local advertising''.
    (3) Identification of article and sales location. To meet the 
requirements of paragraph (b)(1) of this section, the advertising must 
identify the article for which the price is determinable under section 
4216 of the Code and give the location or locations at which the article 
may be purchased at retail. All products taxable at the same rate under 
the same section of chapter 32 of the Code shall be considered to be an 
``article'' for purposes of the preceding sentence. No specific method 
or means of identification is prescribed. The identification of the 
article may be made through the use of the name of the manufacturer or 
the use of an established trade-mark, such as a seal, picture, letter or 
letters, etc., or a combination thereof. The advertising must identify 
the particular retail establishment or establishments at which the 
article may be purchased at retail but need not specify the location of 
any such establishment in terms of the number by which the premises are 
designated or the name of the street on which the retail premises are 
situated. However, the location of the retail premises must be described 
sufficiently, as, for example, by reference to a particular named 
shopping area or shopping center, to enable customers to find the retail 
establishment.
    (4) Determination of costs of local advertising. Where an 
advertisement identifies more than one article, and all such articles 
are not taxable, or are not taxable at the same rate under the same 
section of chapter 32 of the Code, a reasonable allocation of the cost 
of the advertisement must be made among:
    (i) Articles taxable at the same rate under the same section of the 
Code, and
    (ii) Articles which are not taxable under chapter 32 of the Code.

For example, in the case of a single page newspaper or magazine 
advertisement, an allocation of costs reflecting the lineage or space 
devoted to the specified categories will be considered to reflect a 
reasonable allocation of the cost of advertising the different articles. 
As a general rule, only the cost of the ``spot'' portion identifying the 
retail establishment is considered ``local advertising'' in the case of 
national television or radio programs.
    (5) Meaning of ``newspaper''. The term newspaper, as used in 
paragraph (b)(1) of this section, is limited to those publications which 
are commonly understood to be newspapers and which are printed and 
distributed periodically at daily, weekly, or other short intervals for 
the dissemination of news of a general character and of a general 
interest. The term does not include handbills, circulars, flyers, or the 
like, unless printed and distributed as a part of a publication which 
constitutes a newspaper within the meaning of this subparagraph. Neither 
does the term include any publication which is issued to supply 
information on certain subjects of interest to particular groups unless 
such publication otherwise qualifies as a newspaper within the meaning 
of this subparagraph. For purposes of this subparagraph, advertising is 
not considered to be news of a general character and of a general 
interest.
    (6) Meaning of ``magazine''. The term magazine, as used in paragraph 
(b)(1) of this section, is limited to those publications which are:
    (i) Commonly understood to be magazines,
    (ii) Printed and distributed periodically at least twice a year, and
    (iii) Published for the dissemination of information of a general 
nature or of special interest to particular groups.
    (iv) The term does not include handbills, circulars, flyers or the 
like, unless printed and distributed as a part of a publication which 
constitutes a magazine within the meaning of this subparagraph. For 
purposes of this subparagraph, advertising is not considered to be 
information of a general nature or information of special interest to 
particular groups within the contemplation of paragraph (b)(6)(iii) of 
this section.

[[Page 884]]

    (7) Meaning of ``outdoor advertising sign or poster''. The term 
``outdoor advertising sign or poster'', as used in paragraph (b)(1) of 
this section, means a sign or poster displaying advertising matter, 
which is located outside of a roofed enclosure. This term includes both 
signs or posters on billboards, whether placed on or affixed to land, 
buildings, or other structures, and those which are displayed on or 
attached to moving objects, provided the signs or posters are located 
outside of a roofed enclosure. The term ``roofed enclosure'' means a 
roof structure which is enclosed on more than one-half of its sides by 
walls, fences, or other barriers.
    (c) Exclusion--(1) Conditions and limitations. A charge for local 
advertising which is required by a manufacturer to be paid as a 
condition to his sale of an article is not a part of the taxable price 
of the article, to the extent that such charge meets each of the 
following conditions and limitations:
    (i) Such charge does not exceed 5 percent of the difference between:
    (A) An amount which would constitute the taxable price of the 
article (computed at the time of the sale of the article) if no part of 
any charge for local advertising were excludable in computing taxable 
price, and
    (B) The amount of any separate charge for local advertising, 
whatever the amount of such charge may be,
    (ii) Such charge is specifically shown as a separate charge for 
local advertising on the invoice or statement covering the sale of the 
article.
    (iii) Such charge is billed by the manufacturer with the intention 
on his part of repaying the amount of the charge to the person 
purchasing the article from him, or to any person who subsequently 
purchases the article for resale, in reimbursement of costs incurred for 
local advertising of such article or some other article or articles 
taxable at the same rate under the same section of the Code. In the 
absence of evidence to the contrary, the fact of such intention will be 
assumed in all cases where the manufacturer and his vendees are parties 
to an advertising plan which calls for such repayments, or the 
manufacturer can otherwise establish that the vendees to whom he bills 
such charges understand and expect that such repayments will be made.
    (2) When exclusion ceases to apply. To the extent that charges for 
local advertising meet the conditions and limitations stated in 
paragraph (c)(1) of this section, such charge is excludable in computing 
the taxable price of the article in respect of which the charge was 
made. However, the exclusion will cease to apply in respect of any part 
of such charge which the manufacturer fails to repay before May 1 of the 
calendar year following the calendar year in which the article was sold, 
to the person who purchased the article from him, or to some other 
person who subsequently purchases the article for resale, in 
reimbursement of costs incurred for local advertising of such article or 
some other article or articles taxable at the same rate under the same 
section of the Code. If, before such May 1, any part of the charge so 
excluded has not been so repaid, the manufacturer becomes liable for tax 
on such May 1 in the same manner as if an article taxable under such 
section of the Code had been sold by him on such May 1 at a taxable 
price equivalent to that part of the charge not so repaid. However, see 
paragraph (b)(2) of Sec. 53.175, relating to price readjustments in 
cases where local advertising charges are not repaid before such May 1 
but are subsequently paid over by the manufacturer to his vendees in 
reimbursement of costs for local advertising. For provisions relating to 
the method of determining whether a payment by a manufacturer is or is 
not attributable to an excluded local advertising charge, see paragraph 
(b)(3) of Sec. 53.101. In any case where the payment is determined to be 
attributable to such a charge, the date of the sale in connection with 
which the charge was made shall be determined on a first-in-first-out 
basis in respect of the vendee to whom the charge was billed by the 
manufacturer.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-312, 56 
FR 31083, July 9, 1991]



Sec. 53.101  Limitation on aggregate of exclusions and price readjustments.

    (a) In general. The sum of the amount excluded from taxable price in 
respect

[[Page 885]]

of charges for local advertising, as provided in section 4216(e)(1) of 
the Code and Sec. 53.100, plus the amount of the readjustments for which 
credits or refunds may be claimed in respect of local advertising, as 
provided in section 6416(b)(1) of the Code and Sec. 53.175, is subject 
to an overall 5 percent limitation. This limitation applies to each 
manufacturer, as of the close of each calendar quarter, in respect of 
all articles taxable under the same section of chapter 32 of the Code 
which were sold by such manufacturer in such quarter (and the preceding 
quarter or quarters, if any, in the calendar year).
    (b) Computation of overall 5 percent limitation--(1) In general. The 
limitation prescribed by section 4216(e)(2) of the Code (the ``overall 5 
percent limitation'' referred to in paragraph (a) of this section) as to 
the total of the exclusions from price and readjustments of price which 
may be claimed for local advertising in respect of all articles taxable 
under the same section of Chapter 32 of the Code shall be computed as of 
the close of each calendar quarter of the calendar year. The overall 5 
percent limitation is 5 percent of the difference between:
    (i) The amount which would constitute the total taxable price 
(computed at the time of sale) of all articles taxable under the same 
section of chapter 32 of the Code sold by the manufacturer during the 
elapsed calendar quarters of the calendar year, if no part of any charge 
for local advertising were excludable in computing taxable price, and
    (ii) The total of all amounts billed as separate charges for local 
advertising of such articles (whatever the amount of any single charge 
of the total of all charges).
    (iii) In making the computations under paragraphs (b)(1) (i) and 
(ii) of this section, credits or refunds under section 6416(b) of the 
Code of tax paid on the sale of any such articles are to be disregarded 
and articles sold tax-free by the manufacturer are to be excluded. The 
amount by which the overall 5 percent limitation computed as of the 
close of a particular calendar quarter in respect of articles taxable 
under the same section of chapter 32 of the Code exceeds the sum of the 
charges for local advertising excluded in computing the taxable price 
and the amount of reimbursements for local advertising of such articles 
made during the elapsed calendar quarters of the calendar year, in 
respect of which credit or refund has been claimed, represents the 
unused portion of the overall 5 percent limitation. Such unused portion 
is the maximum amount of reimbursements for local advertising in respect 
of which credit or refund may be claimed at the close of the particular 
calendar quarter, subject to the applicable conditions and limitations 
governing the right to claim a credit or refund in respect of local 
advertising (see Sec. 53.175). The unused portion of the overall 5 
percent limitation as of the close of the fourth calendar quarter of a 
calendar year in respect of which credit or refund may not be claimed as 
of the close of such quarter must be disregarded in computing the 
overall 5 percent limitation for any subsequent calendar quarter. 
Moreover, the amount of any reimbursements for local advertising made by 
a manufacturer in a calendar year which is in excess of the amount of 
such reimbursements in respect of which credit or refund may be claimed, 
within the overall limitation, as of the close of the calendar year, may 
not subsequently serve as the basis for a credit or refund.
    (2) Alternative method of computation in certain cases. If during 
the portion of the calendar year ending with the date as of which the 
overall 5 percent limitation is being computed the amount of the local 
advertising charge separately billed by the manufacturer has not, in 
respect of any sale of any articles taxable under the same section of 
chapter 32 of the Code, exceeded the amount excludable pursuant to 
Sec. 53.100 in computing taxable price, the overall 5 percent limitation 
as of the close of a particular calendar quarter in respect of articles 
taxable under such section is 5 percent of the total taxable price 
(computed at the time of the sale) of all such articles sold taxpaid 
during the calendar year.
    (3) Allocation of amounts paid in reimbursement of expenditures for 
local advertising. If a manufacturer makes contributions to a local 
advertising program in connection with which he

[[Page 886]]

makes excludable local advertising charges, it is necessary that 
reimbursements by the manufacturer for local advertising be attributed 
to the charges for local advertising, to the manufacturer's 
contributions, or allocated between them. Whether an amount paid by a 
manufacturer in reimbursement of expenses for local advertising is or is 
not a repayment of a local advertising charge which was excluded from 
taxable price under section 4216(e)(1) of the Code and Sec. 53.100, 
shall be determined on the basis of an allocation made under the 
agreement between the manufacturer and his vendee (or any subsequent 
vendee).
    (c) Examples. The application of paragraphs (a) and (b) of this 
section may be illustrated by the following examples:

    Example (1). During the first and second calendar quarters of the 
year, a manufacturer makes sales of articles taxable under section 4181 
to his distributors. The total charges for such sales, exclusive of the 
tax, transportation charges, delivery charges, or other charges which 
are excludable, pursuant to section 4216(a) of the Code, in computing 
taxable price, are as follows:

First Quarter:
  Articles taxable under Section 4181......................     $100,000
  Local advertising charges................................        3,000
                                                            ------------
      Total Charges........................................      103,000
 
Second Quarter:
  Articles taxable under Section 4181......................     $150,000
  Local advertising charges................................        4,000
                                                            ------------
      Total Charges........................................      154,000
 

    Assume further that the manufacturer contributes to the advertising 
plan and that the manufacturer pays $5,500 and $1,000 during the first 
and second calendar quarters of the year, respectively, to his 
distributors in reimbursement of expenses incurred by them for local 
advertising of the articles purchased from the manufacturer.

Computation as of close of first calendar quarter:
  1. Amount which would constitute total taxable price          $103,000
   (computed at time of sale) if no part of any charge for
   local advertising were excludable in computing taxable
   price...................................................
  2. Amounts billed as separate charges for local                 -3,000
   advertising.............................................
                                                            ------------
  3. Difference............................................      100,000
  4. Overall 5 percent limitation (5 percent of item 3)....       $5,000
  5. Amount excluded in computing taxable price............       -3,000
                                                            ------------
  6. Unused portion of limitation..........................        2,000
  7. Allocation, pursuant to agreement, of $5,500 paid to
   distributors:
    Charges for local advertising..........................       $3,000
    Contributions by manufacturer..........................       $2,500
 

    Readjustment may be claimed in respect of that portion of the total 
amount repaid to the distributors which is allocated to the 
manufacturer's contribution ($2,500) to the extent that such portion 
does not exceed the unused portion of the overall 5 percent limitation 
($2,000). Accordingly, as of the close of the first calendar quarter the 
manufacturer may claim credit or refund in respect of a readjustment of 
price in the amount of $2,000.

Computation as of close of second calendar quarter:
  1. Amount which would constitute total taxable price          $257,000
   (computed at time of sale) if no part of any charge for
   local advertising were excludable in computing taxable
   price ($103,000+$154,000)...............................
  2. Amounts billed as separate charges for local                 -7,000
   advertising ($3,000+$4,000).............................
                                                            ------------
  3. Difference............................................      250,000
  4. Overall 5 percent limitation (5 percent of item 3)....      $12,500
  5. Amount excluded in computing taxable price                   -9,000
   ($3,000+$4,000) plus readjustment claimed at end of
   first calendar quarter ($2,000).........................
                                                            ------------
  6. Unused portion of limitation..........................        3,500
  7. Allocation, pursuant to agreement, of $6,500
   ($5,500+$1,000) paid to distributors:
    Charges for local advertising..........................       $3,500
    Contributions by manufacturer..........................       $3,000
 

    Although the total reimbursements for local advertising expenses 
attributable to contributions by the manufacturer ($3,000) does not 
exceed the unused portion of the overall 5 percent limitation ($3,500), 
the manufacturer, having taken, at the close of the first calendar 
quarter, a price readjustment in the amount of $2,000 in respect to his 
contributions, is entitled at the close of the second calendar quarter 
to claim credit or refund in respect of a price readjustment in the 
amount of $1,000 ($3,000-$2,000).

[[Page 887]]

    Example (2). During the first calendar quarter of the year, a 
manufacturer sold articles taxable under section 4181 to his 
distributors at a total charge of $106,000, exclusive of the tax, 
transportation charges, delivery charges, or other charges which are 
excludable, pursuant to section 4216(a) of the Code, in computing 
taxable price. This total charge of $106,000 was billed as follows:

Total Charge:
  Articles taxable under Section 4181......................     $100,000
  Local advertising charges................................        6,000
                                                            ------------
      Total charges........................................      106,000
 

    Assume further that the manufacturer contributes to the advertising 
plan and that the manufacturer pays $3,000 during the first calendar 
quarter of the year to his distributors in reimbursement of expenses 
incurred by them for local advertising of the articles purchased from 
the manufacturer.

     Computation as of close of first calendar quarter:
  1. Amount which would constitute total taxable price          $106,000
   (computed at time of sale) if no part of any charge for
   local advertising were excludable in computing taxable
   price...................................................
  2. Amounts billed as separate charges for local                 -6,000
   advertising.............................................
                                                            ------------
  d. Difference............................................      100,000
  4. Overall 5 percent limitation (5 percent of item 3)....        5,000
  5. Amount excluded in computing taxable price (see              -5,000
   paragraph (c) of Sec.  53.100...........................
                                                            ------------
  6. Unused portion of limitation..........................            0
  7. Allocation, pursuant to agreement, of $3,000 paid to    ...........
   distributors:
    Charges for local advertising..........................        2,000
    Contributions by manufacturer..........................        1,000
 

    Credit or refund may not be claimed in respect of that portion of 
the total amount repaid to the distributors ($3,000) which is allocated 
to the manufacturer's contribution ($1,000) since the amount excluded in 
computing taxable price is equal to the overall 5 percent limitation.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-312, 56 
FR 31084, July 9, 1991]



Sec. 53.102  No exclusion or readjustment for other advertising charges or reimbursements.

    (a) Exclusions from price. No exclusion in computing the taxable 
price of any article sold by the manufacturer may be allowed in respect 
of any charge for advertising if, and to the extent that, such charge:
    (1) Is for advertising which does not qualify as local advertising 
within the meaning of section 4216(e)(4) of the Code and paragraphs (a) 
and (b) of Sec. 53.100, or
    (2) Does not satisfy all of the conditions and limitations stated in 
section 4216(e)(1) of the Code and paragraph (c) of Sec. 53.100.
    (b) Readjustments of price. No credit or refund under section 
6416(b)(1) of the Code may be allowed in respect of any amount which was 
included in the taxable price of an article sold by the manufacturer and 
which was later paid by him to his vendee in reimbursement of costs 
incurred for advertising, if, and to the extent that, the amount so 
paid:
    (1) Is for advertising which does not qualify as local advertising 
within the meaning of section 4216(e)(4) of the Code and paragraph (b) 
of Sec. 53.100, or
    (2) Is not within the limitation provided in section 4216(e)(2) of 
the Code, as computed in accordance with Sec. 53.101, as of the close of 
the calendar quarter in which the amount is so paid over or as of the 
close of any subsequent calendar quarter in the same calendar year. See, 
however, Sec. 53.175, relating to redetermination of price readjustments 
in cases where local advertising charges excluded from taxable price in 
one calendar year become taxable as of May 1 of the following calendar 
year.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-312, 56 
FR 31084, July 9, 1991]



Sec. 53.103  Lease considered as sale.

    For purposes of chapter 32 of the Code, the lease of an article by a 
manufacturer, producer, or importer shall be considered a sale of the 
article. The term lease means a contract or agreement, written or 
verbal, which gives the lessee an exclusive, continuous right to the 
possession or use of a particular article for a period of time. The term 
includes any renewal or extension

[[Page 888]]

of a lease or any subsequent lease of the article.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-312, 56 
FR 31084, July 9, 1991; T.D. 372, 61 FR 20724, May 8, 1996]



Sec. 53.104  Limitation on amount of tax applicable to certain leases.

    (a) Conditions for eligibility. Section 4217(b) of the Code provides 
for a limitation on the amount of tax that shall apply to the lease, any 
renewal, or further lease, of an article which, if sold, would be 
subject to tax on the basis of sale price. Such limitation on the amount 
of the tax applies with respect to the lease of an article only if, at 
the time of making the lease, the lessor is engaged in the business of 
selling in arm's length transactions the same type and model of article. 
In case of a lease to which section 4217(b) of the Code does not apply, 
tax shall be computed and paid as provided in section 4216(c) of the 
Code and paragraph (a) of Sec. 53.98.
    (b) Lessor engaged in business of selling. The lessor will be 
regarded as being engaged in the business of selling in arm's length 
transactions the same type and model of an article as the one being 
leased if it periodically and recurringly makes bona fide offers for 
sale of such articles in the regular course of operation of its 
business, which offers if accepted would constitute sales at arm's 
length. Whether the offers are bona fide shall be determined on the 
basis of the facts in each case, such as sales actually made, the nature 
of the advertising, sales literature, and other means used to effectuate 
sales. It is not necessary that the offers for sale be made to the same 
class of purchasers as those to whom the article is being leased.
    (c) Same type and model of article. To qualify as the ``same type 
and model of article'', the article offered for sale must be an unused 
article essentially the same in size, design, and function as the 
article being leased. Slight differences in appearance or accessories 
will not render articles dissimilar which are identical in all other 
respects.
    (d) Basis for tax--(1) Tax payable until total tax in paid. In case 
of a lease of an article to which section 4217(b) of the Code applies, 
tax shall be paid on each lease payment in an amount computed by 
applying to such lease payment a percentage equal to the rate of tax in 
effect on the date of the lease payment. Such tax payments shall 
continue to be made under such lease, or any subsequent lease of the 
article, until the cumulative total of the tax payments equals the total 
tax. Lease payments made thereafter with respect to that article shall 
not be subject to tax. For definition of the term ``total tax,'' see 
paragraph (e) of this section.
    (2) Changes in tax rates. If the rate of tax is increased or 
decreased during a lease period, the new rate shall apply to the lease 
payments made on and after the date of the change, but the amount of the 
total tax shall remain the same.
    (e) Total tax. For purposes of this section, the term ``total tax'' 
means the amount of tax, computed at the rate in effect on the date of 
the first lease of the article to which section 4217(b) of the Code 
applies, which would be due on the constructive sale price of the 
article as determined under section 4216(b) of the Code and Sec. 53.95, 
as if the article had been sold by a manufacturer at retail on such 
date.
    (f) Sale of article before total tax becomes payable. If the lessor 
sells the article before the total tax has become payable, the tax 
payable on the sale shall be the lesser of the following amounts:
    (1) The difference between:
    (i) The total tax, and
    (ii) The aggregate tax applicable to lease payments already 
received; or
    (2) A tax computed, at the rate in effect on the date of the sale, 
on the price for which the article is sold. For purposes of (f)(2) of 
this section, the provisions of section 4216(b) of the Code for 
determining a constructive sale price shall not apply if the sale is at 
arm's length. If the sale is not at arm's length, the tax referred to in 
(f)(2) of this section shall be computed on a constructive sale price as 
provided in Sec. 53.95.
    (g) Sale of article after total tax has become payable. If the 
lessor sells an article after the total tax has become payable, the tax 
imposed under chapter 32

[[Page 889]]

of the Code shall not apply to such sale.

             Use by Manufacturer or Importer Considered Sale



Sec. 53.111  Tax on use by manufacturer, producer, or importer.

    (a) In general. Section 4218 of the Code imposes tax in respect of 
certain uses of articles by the actual manufacturer, producer, or 
importer thereof. This section also applies in respect of the use of 
articles by any other person who, pursuant to a provision of chapter 32 
of the Code, is considered to be, or is treated as, the manufacturer or 
producer of the articles. See, for example, section 4223 of the Code 
relating to articles purchased tax free for use in further manufacture.
    (b) Taxable articles in general--(1) Application of tax. If the 
manufacturer, producer, or importer of an article taxable under chapter 
32 of the Code uses the article for any purpose other than that 
indicated in paragraph (b) (3) of this section, he shall be liable for 
tax with respect to the use of such article in the same manner as if the 
article were sold by him.
    (2) Taxable use in manufacturer of nontaxable articles--(i) In 
general. In the case of an article to which paragraph (b)(1) of this 
section applies, tax attaches when the manufacturer, producer, or 
importer of the articles uses it as material in the manufacture or 
production of, or as a component part of, another article which is not 
taxable under chapter 32 of the Code, regardless of the disposition made 
of such other article. (See paragraph (c) of Sec. 53.115 for computation 
of tax on such use.)
    (ii) Types of use in manufacture of nontaxable articles. Taxable use 
may consist of the incorporation of a taxable article into a nontaxable 
article. Taxable use may also result from the combining of a taxable 
article (or the components thereof) with a nontaxable article (or the 
components of a nontaxable article) resulting in a combination end 
article which itself is not taxable. Although the taxable article may 
not be a completely separable unit, within the contemplation of the law 
a taxable article has been produced and incorporated in the combination 
end article.
    (3) Nontaxable use in manufacturer of taxable articles. The tax on 
the use of an article to which paragraph (b)(1) of this section has 
application shall not apply if the article is used by the manufacturer, 
producer, or importer thereof as material in the manufacturer or 
production of, or as a component part of, another article taxable under 
chapter 32 of the Code to be manfactured or produced by him. It is 
immaterial what disposition is made of such other article.
    (c) Use after lease. If the manufacturer, producer, or importer of a 
taxable article leases such article and thereafter uses the article, he 
incurs liability for tax on such use as provided in these regulations to 
the same extent as if the article were sold after being leased. See 
section 4217 of the Code and the regulations thereunder in this subpart 
for application and computation of tax in case of leased articles.
    (d) Time of application of tax. In the case of a taxable use of an 
article by the manufacturer, producer, or importer thereof, the tax 
attaches at the time such use begins. If tax applies by reason of the 
sale of an article by the manufacturer, producer, or importer thereof on 
or in connection with his sale of another article, the tax attaches at 
the time of the sale of such other article.
    (e) Exemptions because of other statutory provisions. Tax does not 
apply on the use of an article by the manufacturer, producer, or 
importer thereof if under the applicable provisions of the Code the sale 
of the article for a similar use would not be subject to tax. Also, tax 
need not be paid with respect to the use of an article by the 
manufacturer, producer, or importer thereof if such use would qualify, 
under the provisions of section 6416(b) of the Code, for credit or 
refund of the tax paid.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991]

    Editorial Note: At 56 FR 31084, July 9, 1991, Sec. 53.111 was 
amended by removing the word ``manufacturer'' and adding the word 
``manufacture'' in the heading of paragraph (a)(2), and removing the 
word ``manufacturer'' and adding the word ``manufacture''

[[Page 890]]

in the first sentence of paragraph (a)(3), effective July 9, 1991; 
however, these sub-paragraph designations are not included in 
Sec. 53.111(a). The issuing agency will publish a correction in the 
Federal Register at a later date.



Sec. 53.112  Business or personal use of articles.

    (a) Business use. Section 4218 of the Code applies to the use by a 
person, in the operation of any business in which he is engaged, of a 
taxable article which has been manufactured, produced, or imported by 
him or his agent.
    (b) Personal use. The tax on use of a taxable article does not 
attach in cases where an individual incidentially manufacturers, 
produces, or imports a taxable article for his personal use or causes a 
taxable article to be manufactured, produced, or imported for his 
personal use.



Sec. 53.113  Events subsequent to taxable use of article.

    Liability for tax incurred on the use of an article is not 
extinguished or reduced because of any subsequent sale or lease of the 
article even if such sale or lease would have been exempt if the article 
had been so sold or leased prior to use. If a manufacturer, producer, or 
importer of an article incurs liability for tax on his use thereof, and 
thereafter sells or leases the article in a transaction which otherwise 
would be subject to tax, liability for tax is not incurred on such sale 
or lease.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-312, 56 
FR 31084, July 9, 1991]



Sec. 53.114  Use in further manufacture.

    For purposes of section 4218 and Sec. 53.111, an article is used as 
material in the manufacture or production of, or as a component part of, 
another article, if it is incorporated in, or is a part or accessory of, 
the other article. In addition, an article is considered to be used as 
material in the manufacturer of another article if it is partly or 
entirely consumed in testing such other article; for example, shells or 
cartridges used in testing new firearms. Similarly, if an article is 
partly or wholly consumed in quality testing a production run of like 
articles, such article is also considered to have been used as material 
in the manufacture of another article. However, if a taxable article 
that has been used tax free and only partly consumed in testing is later 
sold, or put to a taxable use by the manufacturer, tax attaches to such 
sale or use. An article that is consumed in the manufacturing process 
other than in testing, so that it is not a physical part of the 
manufactured article, is not used as material in the manufacture or 
production of or as a component part of, such other article.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-312, 56 
FR 31084, July 9, 1991]



Sec. 53.115  Computation of tax.

    (a) Tax based on price. Tax liability incurred on the use of an 
article shall be computed on the price at which such or similar articles 
are sold in the ordinary course of trade by manufacturers, producers, or 
importers thereof and in the absence of special arrangements. For 
additional provisions applicable in computing the tax in the case of the 
use of an article by a manufacturer and producer who purchased the 
article free of tax under section 4221(a)(1) of the Code for use by him 
in further manufacture, see section 4223(b) of the Code and the 
regulations thereunder (Sec. 53.143).
    (b) Articles regularly sold by manufacturer. If the manufacturer, 
producer, or importer of an article regularly sells such articles at 
wholesale in arm's length transactions, tax liability on his use of any 
such article shall be computed on his lowest established wholesale price 
for such articles in effect at the time of the taxable use. In 
establishing such price, there shall be included and excluded, as 
applicable, the charges and readjustments specified in sections 4216(a) 
and 6416(b)(1) of the Code, as in effect at the time tax liability on 
the use of the article is incurred, and the regulations thereunder 
contained in this subpart and subpart L (Secs. 53.91-53.94 and 53.173-
53.176). If the manufacturer, producer, or importer of an article does 
not regularly sell such articles at wholesale in arm's length 
transactions, a constructive price on which the use tax shall be 
computed will be determined by the appropriate

[[Page 891]]

ATF officer. This price will be established after considering the 
selling practices and price structures of manfacturers, producers, and 
importers of similar articles.
    (c) Articles governed by section 4218(a) used in manufacture of 
nontaxable combination articles. If the manufacturer, producer, or 
importer of an article to which section 4218(a) of the Code applies does 
not regularly sell such article separately but uses it as material in 
the manufacture or production of, or as a component part of, a 
nontaxable combination article consisting of a taxable and nontaxable 
article, liability for tax on his use shall be computed on the 
constructive price of the taxable article at the time of use. To 
determine the constructive price of the taxable article in such case, 
the combination article is considered to be composed of:
    (1) Parts used exclusively in the functioning of the taxable article 
in the combination;
    (2) Parts used exclusively in the functioning of the nontaxable 
article in the combination, and
    (3) Parts, called common parts, which serve a dual function in 
connection with the parts in both paragraphs (c) (1) and (2) of this 
section.

The ratio which the cost of the parts in paragraph (c)(1) of this 
section bears to the sum of the cost of such parts and the parts in 
paragraph (c)(2) of this section is applied to the lowest established 
wholesale price for which like combination articles are at the time of 
the taxable use being sold by the manufacturer or producer in the 
ordinary course of trade. The resulting amount is the constructive sale 
price for the taxable article on which tax is to be computed. The cost 
of the common parts is allocable to the parts in paragraphs (c) (1) and 
(2) of this section in the same ratio, and, therefore, need not be taken 
into account in the computation since the inclusion and allocation of 
the cost of such parts in the determination would not result in a 
different ratio. In determining the lowest establishment wholesale price 
for the combination article, there shall be included and excluded, as 
applicable, the charges and readjustments specified in sections 4216(a) 
and 6416(b)(1) of the Code, as in effect at the time tax liability on 
the use of the taxable article is incurred, and the regulations 
thereunder contained in this subpart and subpart L of this part 
(Secs. 53.91-53.94 and Secs. 53.173-53.176). The tax applicable to the 
use of the article for which a constructive sale price has been computed 
is not affected by any charges or readjustments of the price for which 
the nontaxable combination article is sold, whether by reason of the 
return or repossession of the nontaxable article or its covering or 
container, or by a bona fide discount, rebate, allowance, or other 
factor.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-312, 56 
FR 31084, July 9, 1991]

   Application of Tax in Case of Sales by Other Than Manufacturer or 
                                Importer



Sec. 53.121  Sales of taxable articles by a person other than the manufacturer, producer, or importer.

    (a) General rule. If the title to, or ownership of, an article 
taxable under chapter 32 of the Code is transferred from the 
manufacturer, producer, or importer thereof, and, under the law, no tax 
attaches to such transfer, the subsequent sale, lease, or use of such 
article by the transferee is subject to tax to the same extent and 
manner as if such transferee were the manufacturer, producer, or 
importer of the article. The following examples illustrate this rule:
    (1) The surviving spouse, child or children, executors or 
administrators, or other legal representatives, as the case may be, of a 
deceased manufacturer, producer, or importer of taxable articles, incur 
liability for tax on all such articles sold by them.
    (2) A receiver or trustee in bankruptcy who under a court order 
conducts or liquidates the business of a manufacturer, producer, or 
importer of taxable articles, incurs liability for tax on all taxable 
articles sold by him, regardless of whether the articles were 
manufactured, produced, or imported before or after he took charge of 
the business.
    (3) An assignee for the benefit of creditors of a manufacturer, 
producer, or importer incurs liability for tax

[[Page 892]]

with respect to all taxable articles sold by him as such assignee.
    (4) If one or more member of a partnership withdraw, or if new 
partners are admitted, the new partnership so constituted incurs 
liability for tax on all taxable articles sold by it regardless of when 
such articles were manufactured, produced, or imported.
    (5) A person who acquires title to taxable articles as a result of 
default of the manufacturer, producer, or importer pursuant to an 
agreement under the terms of which the articles were pledged as 
collateral incurs liability for tax with respect to his sale of the 
articles so acquired.
    (6) A person who succeeds to the business of a manufacturer, 
producer, or importer of taxable articles, such as:
    (i) A corporation which results from a consolidation, merger, or 
reorganization;
    (ii) A corporation which acquires the business of an individual or 
partnership; or
    (iii) A stockholder in a corporation who, after its dissolution, 
continues the business;

incurs liability for the tax on all taxable articles sold by such 
person. However, where a manufacturer, producer, or importer sells only 
his assets, rather than ownership of his business, he incurs liability 
for tax on the sale of any taxable articles included in such assets.
    (b) Transfer of title to damaged articles. If title to a damaged 
taxable article is transferred by the manufacturer, producer, or 
importer thereof to a carrier or insurance company in adjustment of a 
damage claim, such transfer is not considered a taxable sale of the 
article. If the article is usable, even though damaged, the carrier or 
insurance company incurs liability for tax on its sale, lease, or use of 
the article. Where the article has been damaged to the extent that its 
only value is as scrap, and it is not restored to usable condition, sale 
thereof by the carrier or insurance company is not subject to tax.



                Subpart K--Exemptions, Registration, Etc.



Sec. 53.131  Tax-free sales; general rule.

    (a) In general. Section 4221(a) of the Code sets forth the following 
exempt purposes for which an article subject to tax under chapter 32 of 
the Code may be sold tax-free by the manufacturer, producer, or 
importer:
    (1) For use by the purchaser for further manufacture, or for resale 
by the purchaser to a second purchaser for use by such second purchaser 
in further manufacture,
    (2) For export, or for resale by the purchaser to a second purchaser 
for export,
    (3) For use by the purchaser as supplies for vessels or aircraft,
    (4) To a State or local government for the exclusive use of a State 
or local government, and
    (5) To a nonprofit educational organization for its exclusive use.

Section 4221(a) of the Code applies only in those cases where the 
exportation or use referred to is to occur before any other use, and 
where the seller, first purchaser, and second purchaser, as may be 
appropriate, have registered as required under section 4222 of the Code 
and paragraph (a) of Sec. 53.140. See paragraph (c) of this section for 
provisions relating to evidence required in support of tax-free sales. 
See Sec. 53.141 for exceptions to the requirement for registration.Where 
tax is paid on the sale of an article, but the article is used or resold 
for use for an exempt purpose, a claim for credit or refund may be filed 
in accordance with and to the extent provided in sections 6402(a) and 
6416 of the Code, and the regulations thereunder (Secs. 53.161 and 
53.171-53.186).
    (b) Manufacturer relieved of liability in certain cases--(1) General 
rule. Under the provisions of section 4221(c) of the Code, if an article 
subject to tax under Chapter 32 of the Code is sold free of tax by the 
manufacturer of the article for an exempt purpose referred to in

[[Page 893]]

section 4221(c) of the Code and paragraph (b)(2) of this section, the 
manufacturer shall be relieved of any tax liability under chapter 32 of 
the Code with respect to such sale if the manufacturer in good faith 
accepts a proper certification by the purchaser that the article or 
articles will be used by the purchaser in the stated exempt manner. See 
paragraph (b)(2) of this section for a list of the exempt purposes 
referred to in section 4221(c) of the Code.
    (2) Situations wherein section 4221(c) of the Code is applicable. 
The following are situations wherein section 4221(c) of the Code is 
applicable with respect to sales made tax free on the assumption that 
one of the following sections of the Code provides exemption for such 
sales:
    (i) Section 4221(a)(1) of the Code, to the extent that it relates to 
sales for further manufacture by a first purchaser (see Sec. 53.132),
    (ii) Section 4221(a)(3) of the Code, relating to supplies for 
vessels and aircraft (see Sec. 53.134),
    (iii) Section 4221(a)(4) of the Code, relating to sales to State or 
local governments (see Sec. 53.135),
    (iv) Section 4221(a)(5) of the Code, relating to sales to nonprofit 
educational organizations (see Sec. 53.136).
    (3) Situations wherein section 4221(c) of the Code is not 
applicable. The relief from liability for the payment of tax provided by 
section 4221(c) of the Code is not applicable with respect to sales made 
tax free on the assumption that one of the following sections of the 
Code provides exemption for such sales:
    (i) Section 4221(a)(1) of the Code, to the extent that it relates to 
sales for resale to a second purchaser for use by the second purchaser 
in further manufacture (see Sec. 53.132),
    (ii) Section 4221(a)(2) of the Code, relating to sales for export 
(see Sec. 53.133).
    (4) Duty of seller to ascertain validity of tax-free sale. If the 
manufacturer at the time of its sale has reason to believe that the 
article sold by it is not intended for the exempt purpose indicated by 
the purchaser, or that the purchaser has failed to register as required, 
the manufacturer is not considered to have accepted certification from 
the purchaser in good faith, and is not relieved from liability under 
the provisions of section 4221(c) of the Code.
    (5) Information to be furnished to purchaser. A manufacturer selling 
articles free of tax under this section shall indicate to the purchaser 
that:
    (i) Certain articles normally subject to tax are being sold tax 
free, and
    (ii) The purchaser is obtaining those articles tax free for an 
exempt purpose under an exemption certificate or its equivalent.
    (6) The manufacturer may transmit this information by any convenient 
means, such as coding of sales invoices, provided that the information 
is presented with sufficient particularity so that the purchaser is 
informed that he has obtained the articles tax free and:
    (i) The purchaser can compute and remit the tax due if an article 
sold tax free for further manufacture is diverted to a taxable use,
    (ii) The manufacturer can remit the tax due with respect to an 
article purchased tax free for resale for use in further manufacture or 
for export if, within the 6-month period described in Sec. 53.132(c) or 
Sec. 53.133(c), the manufacturer does not receive proof that the article 
has been exported or resold for use in further manufacturer, or
    (iii) The purchaser can notify the manufacturer if an article 
otherwise purchased tax free is diverted to a taxable use.
    (c) Evidence required in support of tax-free sales--(1) Purchasers 
required to be registered. Every purchaser who is required to be 
registered (see Sec. 53.140) shall furnish to the seller, as evidence in 
support of each tax-free sale made by the seller to such purchaser, the 
exempt purpose for which the article or articles are being purchased and 
the registration number of the purchaser. Such information must be in 
writing and may be noted on the purchase order or other document 
furnished by the purchaser to the seller in connection with each sale.
    (2) Purchasers not required to be registered. For the evidence which 
purchasers not required to register must furnish to the seller in 
support of each tax-free sale made by the seller to such purchasers, see 
paragraph (b) of Sec. 53.133 for sales or resales to a foreign purchaser 
for export, paragraph (d) of

[[Page 894]]

Sec. 53.134 for sales of supplies to vessels or aircraft, paragraph (c) 
of Sec. 53.135 for sales to State and local governments, and paragraph 
(c) of Sec. 53.141 for sales and purchases by the United States.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-380, 61 
FR 37005, July 16, 1996]



Sec. 53.132  Tax-free sale of articles to be used for, or resold for, further manufacture.

    (a) Further manufacture--(1) In general. Under prescribed 
conditions, an article subject to tax under Chapter 32 of the Code may 
be sold tax free by the manufacturer, pursuant to section 4221(a)(1) of 
the Code, for use by the purchaser in further manufacture, or for resale 
by the purchaser to a second purchaser for use by the second purchaser 
in further manufacture. See section 4221(d) (6) of the Code and 
paragraph (b) of this section for the circumstances under which an 
article is considered to have been sold for use in further manufacture. 
See section 6416(b)(3) of the Code and Sec. 53.180 for the circumstances 
under which credit or refund is available when tax-paid articles are 
used in further manufacture.
    (2) Proof of resale for use in further manufacture. See section 
4221(b)(1) of the Code and paragraph (c) of this section for provisions 
under which the exemption provided in section 4221(a)(1) of the Code 
shall cease to apply in the case of an article sold by the manufacturer 
to a purchaser for resale to a second purchaser for use in further 
manufacture unless the manufacturer receives timely proof of resale for 
further manufacture.
    (b) Circumstances under which an article is considered to have been 
sold for use in further manufacture. (1) For purposes of the exemption 
from the manufacturers excise tax provided by section 4221(a)(1) of the 
Code, an article shall be treated as sold for use in further manufacture 
if the article is sold for use by the purchaser as material in the 
manufacture or production of, or as a component part of, another article 
taxable under chapter 32 of the Code;
    (2) An article is used as material in the manufacture or production 
of, or as a component of, another article if it is incorporated in, or 
is a part or accessory of, the other article when the other article is 
sold by the manufacturer. In addition, an article is considered to be 
used as material in the manufacture of another article if it is consumed 
in whole or in part in testing such other article; for example, shells 
or cartridges that are used by the manufacturer of firearms to test new 
firearms. However, an article that is consumed in the manufacturing 
process other than in testing, so that it is not a physical part of the 
manufactured article, is not considered to have been used as material in 
the manufacture of, or as a component part of, another article.
    (c) Proof of resale for further manufacture--(1) Cessation of 
exemption. The exemption provided in section 4221(a)(1) of the Code and 
described in paragraph (a) of this section in respect of an article sold 
by the manufacturer to a purchaser for resale to a second purchaser for 
use by the second purchaser in further manufacture shall cease to apply 
on the first day following the close of the 6-month period which begins 
on the date of the sale of such article by the manufacturer, or the date 
of shipment of the article by the manufacturer, whichever is earlier, 
unless, within such 6-month period, the manufacturer receives proof, in 
the form prescribed by paragraph (c)(2) of this section, that the 
article was actually resold by the purchaser to a second purchaser for 
such use. If, on the first day following the close of the 6-month 
period, such proof has not been received, the manufacturer shall become 
liable for tax at that time at the rate in effect when the sale was made 
but otherwise in the same manner as if the article had been sold by it 
on such first day at a taxable price equivalent to that at which the 
article was actually sold. If the manufacturer later obtains such proof, 
it may file a claim for refund or credit of this tax. The payment of 
this tax by the manufacturer is not considered an overpayment by the 
subsequent manufacturer or producer for which the subsequent 
manufacturer or producer is entitled to a credit or refund under section 
6416(b)(3) of the Code. See section 4221(d)(6) of the Code and paragraph 
(b) of this section for the circumstances under which an article is 
considered to

[[Page 895]]

have been sold for use in further manufacture.
    (2) Proof of resale--(i) Certificate of purchaser. The proof of 
resale to be received by the manufacturer, as required under section 
4221(b)(1) of the Code, may consist of either a copy of the invoice of 
the manufacturer's vendee directed to his purchaser which discloses the 
certificate of registry number held by each party or a statement 
described in this paragraph. In the case of an invoice of manufacturer's 
vendee, it must appear from such invoice (or by statement attached 
thereto) that the article was in fact resold for use in further 
manufacture. In lieu of such an invoice, proof of resale may consist of 
a statement, executed and signed by the manufacturer's vendee which 
includes the following:
    (A) Date statement was executed.
    (B) Name and address of manufacturer's vendee (if other than the 
person executing statement).
    (C) Certificate of registry number held by vendee.
    (D) Specify article(s) purchased tax-free, by whom purchased, 
certificate of registry number of second purchaser, date of purchase(s), 
whether articles were purchased as material in the manufacture or 
production of, or as a component part or parts of, an article or 
articles taxable under Chapter 32 of the Code.
    (E) Statement that person executing statement or manufacturer's 
vendee possesses proof of tax-free resale of the article(s) in the form 
of purchase orders and sales invoices and identifying the person who 
will maintain custody of such proof for 3 years from the date of the 
statement and will make such proof available for inspection by ATF 
during such 3 year period.
    (F) Statement that a previous statement has not been executed in 
respect of such certificate of resale and that the person signing the 
statement is aware that fraudulent use of the statement may subject the 
person signing the statement and all parties making fraudulent use of 
the statement to all applicable criminal penalties under the Code.
    (G) Name, signature, and title of individual executing statement.
    (ii) Period covered. Any statement executed and signed by the 
manufacturer's vendee, as provided in paragraph (c)(2)(i) of this 
section, may be executed with respect to any one or more articles 
purchased tax free from a manufacturer and resold for use in further 
manufacture within the 6-month period prescribed in section 4221(a)(1) 
of the Code and paragraph (c)(1) of this section. Such statement (or 
other prescribed proof of resale) must be retained for inspection by the 
appropriate ATF officer as provided in section 6001 of the Code.
    (iii) ATF I 5600.37. A preprinted statement, ATF I 5600.37, 
Statement of Manufacturer's Vendee, is available from the Bureau's 
Distribution Center which, when completed, contains all necessary 
information for a properly executed statement. Extra copies of ATF I 
5600.37 may be reproduced as needed.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-380, 61 
FR 37005, July 16, 1996]



Sec. 53.133  Tax-free sale of articles for export, or for resale by the purchaser to a second purchaser for export.

    (a) In general. (1) An article subject to tax under chapter 32 of 
the Code may be sold tax free by the manufacturer, pursuant to section 
4221(a)(2) of the Code and this section, for export, or for resale by 
the purchaser to a second purchaser for export. See Sec. 53.11 for the 
meaning of the term ``exportation''. An article may be sold tax free by 
the manufacturer under the provisions of this section only if the person 
to whom the manufacturer sells the article intends either to export the 
article or to resell it to a person who intends to export it. An article 
may not be sold tax free under the provisions of this section by a 
manufacturer to a purchaser for resale to a second purchaser which does 
not intend to export the article itself but plans to resell it to a 
third purchaser for export. See section 6416(b)(2)(A) of the Code and 
Sec. 53.177 for the circumstances under which credit or refund of tax is 
available where tax-paid articles are exported from the United States.
    (2) If an article, otherwise taxable under chapter 32 of the Code:

[[Page 896]]

    (i) Is sold tax free by the manufacturer pursuant to section 
4221(a)(2) of the Code and this section, and
    (ii) Is returned subsequently to the United States in an unused and 
undamaged condition,

then the importer is liable for the tax imposed by chapter 32 of the 
Code on the subsequent sale or use of the article in the United States. 
The provisions of this paragraph (a)(2) of this section may be 
illustrated by the following examples:

    Example (1). Q, a U.S. manufacturer of shells and cartridges, 
previously sold shells and cartridges to R, a company in Canada. The 
sale was tax free under section 4221(a)(2). Prior to use, R sold the 
shells and cartridges to S, who imports the articles into the United 
States and sells them. The sale of the shells and cartridges subjects S 
to an excise tax liability under section 4181.
    Example (2). X, a U.S. firearms manufacturer, sold a rifle to Y 
company in France. The sale was tax free under section 4221(a)(2). The 
rifle was sold by Y to W, an individual in the City of Nice, France. 
After initial use, W resold the rifle to X. X returned the rifle to the 
United States where it was resold. The resale of the rifle by X does not 
subject X to an excise tax liability under section 4181.

    (b) Sales or resales to a foreign purchaser for export. In the case 
of sales or resales to a foreign purchaser for export, if the first or 
the second purchaser is located in a foreign country or possession of 
the United States, such purchaser is not required to register as 
provided in section 4222(a) of the Code and Sec. 53.140. To establish 
the right to sell articles tax free for export to a purchaser who is not 
registered and who is located in a foreign country or a possession of 
the United States, the manufacturer must obtain from such purchaser at 
the time title to the article passes or at the time of shipment, 
whichever is earlier, either:
    (1) A written order or contract of sale showing that the 
manufacturer is to ship the article to a foreign destination; or
    (2) Where delivery by the manufacturer is to be made within the 
United States, a statement from the purchaser showing:
    (i) That the article is purchased either to fill existing or future 
orders for delivery to a foreign destination or for resale to another 
person engaged in the business of exporting who will export the article, 
and
    (ii) That such article will be transported to its foreign 
destination in due course prior to use or further manufacture and prior 
to any resale except for export. See section 4221(b) of the Code and 
paragraphs (c) and (d) of this section for requirements as to timely 
proof of exportation and cessation of the exemption for export unless 
the evidence to show actual exportation has been received by the 
manufacturer.
    (c) Cessation of exemption. The exemption provided in section 
4221(a)(2) of the Code and paragraph (a) of this section for an article 
sold by the manufacturer for export or for resale by the purchaser to a 
second purchaser for export shall cease to apply on the first day 
following the close of the 6-month period which begins on the date of 
the sale of the article by the manufacturer, or the date of shipment of 
the article by the manufacturer, whichever is earlier, unless within the 
6-month period the manufacturer receives proof, in the form prescribed 
by paragraph (d) of this section, that the article was actually 
exported. If, on the first day following the close of the 6-month 
period, the proof has not been received, the manufacturer shall become 
liable for tax at that time at the rate in effect when the sale was made 
but otherwise in the same manner as if the article had been sold by it 
on such first day at a taxable price equivalent to that at which the 
article was actually sold.
    (d) Proof of exportation. (1) Exportation may be evidenced by:
    (i) A copy of the export bill of lading issued by the delivering 
carrier,
    (ii) A certificate by the agent or representative of the export 
carrier showing actual exportation of the article,
    (iii) A certificate of landing signed by a customs officer of the 
foreign country to which the article is exported,
    (iv) Where the foreign country has no customs administration, a 
statement of the foreign consignee showing receipt of the article, or
    (v) Where a department or agency of the United States Government is 
unable to furnish any one of the foregoing four types of proof of 
exportation, a

[[Page 897]]

statement or certification on the department or agency stationery, 
executed by an authorized officer, that the listed or identified 
articles have, in fact, been exported.
    (2) In any case where the manufacturer is not the exporter, the 
manufacturer must have in its possession a statement from the vendee to 
whom the manufacturer sold the article stating the following:
    (i) Date statement was executed.
    (ii) Name and address of manufacturer's vendee (if other than the 
person executing statement).
    (iii) Certificate of registry number held by vendee.
    (iv) Specify article(s) purchased tax-free, by whom purchased, and 
date of purchase.
    (v) Statement that article(s) was either exported in due course by 
the vendee or was sold to another person who in due course exported the 
article(s).
    (vi) Name and address of vendee who will maintain possession of the 
proof of exportation documents, description of the documents, and 
statement that vendee will maintain documents for 3 years and make them 
available to ATF for inspection.
    (vii) Statement that a previous statement has not been executed in 
respect of the articles covered by this statement and that fraudulent 
use of this statement may subject person executing statement and all 
parties making fraudulent use of statement to all applicable criminal 
penalties under the Code.
    (viii) Name, signature, title, and address of individual executing 
certificate.
    (3) The statement executed and signed by the manufacturer's vendee, 
as provided in paragraph (d)(2) of this section, may be executed with 
respect to any one or more articles purchased tax free from a 
manufacturer and exported within the 6-month period prescribed in 
section 4221(b)(2) of the Code and paragraph (c) of this section. Such 
statement shall be kept for inspection by the appropriate ATF officer as 
provided in section 6001 of the Code.
    (4) ATF I 5600.36. A preprinted statement, ATF I 5600.36, Statement 
of Manufacturer's Vendee, is available from the Bureau's Distribution 
Center which, when completed, contains all necessary information for a 
properly executed statement. Extra copies of ATF I 5600.36 may be 
reproduced as needed.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-344, 58 
FR 40354, July 28, 1993; T.D. 372, 61 FR 20724, May 8, 1996; T.D. ATF-
380, 61 FR 37006, July 16, 1996]



Sec. 53.134  Tax-free sale of articles for use by the purchaser as supplies for vessels or aircraft.

    (a) Supplies for vessels or aircraft--(1) In general. An article 
subject to tax under chapter 32 of the Code may be sold tax free by the 
manufacturer, pursuant to section 4221(a)(3) of the Code and this 
section, for use by the purchaser as supplies for vessels or aircraft. 
See paragraph (b) of this section for the meaning of the term ``supplies 
for vessels or aircraft.'' An article may be sold tax free under the 
provisions of this section only in those cases where the sale of an 
article by the manufacturer is made directly to the owner, officer, 
charterer, or authorized agent of a vessel or aircraft for use as 
supplies for the vessel or aircraft. No sale may be made tax free to a 
dealer for resale for use as supplies for vessels or aircraft, even 
though it is known at the time of sale by the manufacturer that the 
article will be so resold. See section 6416(b)(2)(B) of the Code and 
paragraph (c) of Sec. 53.178 for circumstances under which credit or 
refund of tax is available where tax-paid articles are used, or sold for 
use, as supplies for vessels or aircraft. An article may not be sold tax 
free under the provisions of this section by the manufacturer to 
passengers or members of the crew of a vessel or aircraft.
    (2) Civil aircraft of foreign registry. In the case of any article 
sold by the manufacturer for use by the purchaser as supplies for civil 
aircraft of foreign registry employed in foreign trade or in trade 
between the United States and any of its possessions, the provisions of 
this paragraph apply only if the reciprocity requirements of section 
4221(e)(1) of the Code are met. See paragraph (c) of this section.
    (b) Meaning of terms--(1) Supplies for vessels or aircraft. The term 
``supplies

[[Page 898]]

for vessels or aircraft'' means fuel supplies, ships' stores, sea 
stores, or legitimate equipment on vessels of war of the United States 
or of any foreign nation, vessels employed in the fisheries or in the 
whaling business, or vessels actually engaged in foreign trade or trade 
between the Atlantic and Pacific ports of the United States or between 
the United States and any of its possessions.
    (2) Fuel supplies, ships' stores, and legitimate equipment. The 
terms ``fuel supplies'', ``ships' stores'', and ``legitimate equipment'' 
include all articles, materials, supplies, and equipment necessary for 
the navigation, propulsion, and upkeep of vessels of war of the United 
States or of any foreign nation, vessels employed in the fisheries or in 
the whaling business, or vessels actually engaged in foreign trade or in 
trade between the Atlantic and Pacific ports of the United States or 
between the United States and any of its possessions, even though such 
vessels may make intermediate stops in the United States. The term does 
not include supplies for vessels engaged in trade:
    (i) Between domestic ports in the Atlantic Ocean and the Gulf of 
Mexico,
    (ii) Between domestic ports on the Pacific Ocean,
    (iii) Between domestic ports on the Great Lakes, or
    (iv) On the inland waterways of the United States.
    (3) Sea stores. The term sea stores includes any article purchased 
for use or consumption by the passengers or crew, or both, of a vessel 
during its voyage.
    (4) Vessel. The term vessel includes:
    (i) Every description of watercraft or other contrivance used, or 
capable of being used, as a means of transportation on water,
    (ii) Civil aircraft registered in the United States and employed in 
foreign trade or in trade between the United States and any of its 
possessions, and
    (iii) Civil aircraft registered in a foreign country and employed in 
foreign trade or trade between the U.S. and its possessions.
    (5) Vessels of war of the United States or of any foreign nation. 
The term vessels of war of the United States or of any foreign nation 
includes:
    (i) Every description of watercraft or other contrivance used, or 
capable of being used, as a means of transportation on water and 
constituting equipment of the armed forces (including the U.S. Coast 
Guard and U.S. National Guard) of the United States or of a foreign 
nation, and
    (ii) Aircraft owned by the United States or by any foreign nation 
and constituting equipment of the armed forces thereof.
    (iii) For purposes of this section, vessels or aircraft owned by 
armed forces are not considered to be equipment of such armed forces 
while on lease or loan to an organization that is not part of the armed 
forces.
    (6) Vessels used in fisheries or whaling business. The exemption 
provided by section 4221(a)(3) of the Code and paragraph (a) of this 
section in the case of articles sold for the prescribed use on vessels 
employed in the fisheries or whaling business is limited to articles 
sold by the manufacturer for such use on vessels while employed, and to 
the extent employed, exclusively in the fisheries or in the whaling 
business. For purposes of this section, vessels engaged in sport fishing 
are not considered to be employed in the fisheries business.
    (7) Civil aircraft. The exemption provided by section 4221(a)(3) of 
the Code and paragraph (a) of this section relating to supplies for 
vessels or aircraft, with respect to civil aircraft, extends only to 
civil aircraft when employed in foreign trade, or in trade between the 
United States and any of its possessions. Sales of supplies to civil 
aircraft when engaged in trade between the Atlantic and the Pacific 
ports of the United States are not exempt from the tax imposed under 
chapter 32 of the Code. See section 4221(e)(1) of the Code and paragraph 
(c) of this section for requirement of reciprocal exemption in the case 
of a civil aircraft registered in a foreign country.
    (8) Trade. The term ``trade'' includes the transportation of persons 
or property for hire and the making of the necessary preparations for 
such transportation. The term ``trade'' also includes the transportation 
of property on a vessel or aircraft owned or chartered by the owner of 
the property in

[[Page 899]]

connection with the purchase, sale, or exchange of the property in a 
commercial business operation. However, a vessel owned or chartered by a 
company and used in the transportation of personnel or property of such 
company to or from its business properties located in a foreign country, 
or in a possession of the United States, is not engaged in ``trade''.
    (c) Reciprocity required in the case of civil aircraft. The 
exemption provided by section 4221(a)(3) of the Code and paragraph (a) 
of this section with respect to the sales of supplies for civil aircraft 
registered in a foreign country is further limited in that the privilege 
of exemption may be granted only if the Secretary of Commerce advises 
the Secretary of the Treasury that the foreign country allows, or will 
allow, substantially the same reciprocal privileges. If a foreign 
country discontinues the allowance of such substantially reciprocal 
exemption, the exemption allowed by the United States will not apply 
after the Secretary of the Treasury is notified by the Secretary of 
Commerce of the discontinuance of the exemption allowed by the foreign 
country.
    (d) Evidence required to establish--(1) In general. The exemption 
provided in section 4221(a)(3) of the Code and paragraph (a) of this 
section for articles sold for use by the purchaser as supplies for 
vessels or aircraft applies only:
    (i) If both the manufacturer and purchaser are registered under the 
provisions of section 4222 of the Code, or
    (ii) The purchaser or both the manufacturer and the purchaser are 
not registered but have satisfied the provisions of paragraph (d)(2) of 
this section.

See paragraph (c) of Sec. 53.131 for the evidence required to establish 
exemption where the purchaser is registered pursuant to section 4222 of 
the Code and Sec. 53.140.
    (2) Exemption certificates for use in support of tax-free sales of 
supplies for vessels and aircraft. (i) In order to establish exemption 
from tax under section 4221(a)(3) of the Code in those instances where 
the purchaser or both the manufacturer and purchaser are not registered 
under section 4222 of the Code, the manufacturer must obtain (prior to 
or at the time of the sale) from the owner, charterer, or authorized 
agent of the vessel or aircraft and retain in the manufacturer's 
possession a properly executed exemption certificate in the form 
prescribed by paragraph (d)(2)(iii) of this section. If articles are 
sold tax-free for use as supplies for civil aircraft employed in foreign 
trade or in trade between the United States and any of its possessions, 
the exemption certificate must show the name of the country in which the 
aircraft is registered.
    (ii) Where only occasional sales of articles are made to a purchaser 
for use as supplies for vessels or aircraft, a separate exemption 
certificate shall be furnished for each order. However, where sales are 
regularly or frequently made to a purchaser for such exempt use, a 
certificate covering all orders for a specified period not to exceed 12 
calendar quarters will be acceptable. Such certificates and proper 
records of invoices, orders, etc., relative to tax-free sales must be 
kept for inspection by the appropriate ATF officer as provided in 
section 6001 of the Code.
    (iii) Acceptable form of exemption certificate. A certificate of 
exemption to support tax-free sales under this section must include the 
following:
    (A) Name of owner, charterer, or authorized agent.
    (B) Name of company and vessel.
    (C) List article(s) covered by the certificate or beginning and 
ending dates during which orders will be placed (not to exceed 12 
calendar quarters).
    (D) Statement that articles will be used only for fuel supplies, 
ships' stores, sea stores, or legitimate equipment on a vessel belonging 
to one of the class of vessels to which section 4221 of the Code 
applies. Identify class of vessel certificate covers (see paragraphs (a) 
and (b) of this section).
    (E) If articles are purchased for use on civil aircraft engaged in 
foreign trade or trade between the United States and any of its 
possessions, state the country in which the aircraft is registered.
    (F) Statement that it is understood that if any articles are used 
for any

[[Page 900]]

purpose other than as stated in the certificate, or are resold or 
otherwise disposed of, the person executing the certificate must notify 
the manufacturer.
    (G) Statement that the certificate shall not be used to purchase 
tax-free articles for use as supplies, etc. on pleasure vessels or any 
type of aircraft except:
    (1) Civil aircraft employed in foreign trade or trade between the 
United States and any of its possessions;
    (2) Aircraft owned by the United States or any foreign country and 
constituting a part of the armed forces thereof.
    (H) Statement that it is understood that any fraudulent use of the 
certificate may subject person executing certificate and all parties 
making fraudulent use of the certificate to all applicable criminal 
penalties under the Code.
    (I) Statement that person executing certificate is prepared to 
establish by satisfactory evidence the purpose for which the article(s) 
was used.
    (J) Date, name, signature, and address of person executing the 
certificate.
    (iv) ATF I 5600.34. A preprinted certificate, ATF I 5600.34, 
Exemption Certificate, is available from the Bureau's Distribution 
Center which, when completed, contains all necessary information for a 
properly executed certificate. Extra copies of ATF I 5600.34 may be 
reproduced as needed.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-380, 61 
FR 37006, July 16, 1996]



Sec. 53.135  Tax-free sale of articles to State and local governments for their exclusive use.

    (a) In general. An article subject to tax under Chapter 32 of the 
Code may be sold tax free by the manufacturer, pursuant to section 
4221(a)(4) of the code and this section, to a State or local government 
for the exclusive use of such State or local government. See paragraph 
(b) of this section for the meaning of the term ``State or local 
government''. An article may be sold tax free by the manufacturer under 
this paragraph only in those cases where the sale is made directly to a 
State or local government for its exclusive use. Accordingly, no sale 
may be made tax free to a dealer for resale to a State or local 
government for its exclusive use, even though it is known at the time of 
sale by the manufacturer that the article will be so resold. A sale of 
an article to a State or local government for resale is not considered 
to be a sale for the ``exclusive use'' of the State or local government, 
within the meaning of section 4221(a)(4) of the Code, and, therefore, 
such sales may not be made tax free. Such sales are not exempt 
regardless of whether the resales are made to government employees, or 
the fact that the article is an item of equipment the employee is 
required to possess in carrying out his duties. For example, pistols or 
revolvers may not be sold tax free to a State or local government for 
resale to its police officers. See section 6416(b)(2)(C) of the Code, 
and paragraph (d) of Sec. 53.178, for the circumstances under which 
credit or refund of tax is available where tax-paid articles are sold 
for the exclusive use of a State or local government.
    (b) State or local government. The term State or local government 
includes any State, the District of Columbia, and any political 
subdivision of any of the foregoing. See, section 7871(a)(2)(B) of the 
Code and 26 CFR 305.7701-1 et seq., which provide that an Indian tribal 
government shall be treated as a State for purposes of exemption from an 
excise tax imposed by chapter 32. Section 7871(b) of the Code provides 
that the exemption from tax applies only if the transaction involves the 
exercise of an essential governmental function of the Indian tribal 
government.
    (c) Evidence required in support of tax-free sales to State or local 
governments. (1) In the case of a State or local government which is 
registered (see Sec. 53.141 for provisions under which a State or local 
government may register if it so desires), the provisions of paragraph 
(c) of Sec. 53.131 have application as to the evidence required in 
support of tax-free sales. If a State or local government is not 
registered, the evidence required in support of a tax-free sale to the 
State or local government shall, except as provided in paragraph (c)(2) 
of this section, consist of a certificate, executed and signed by an 
officer or employee

[[Page 901]]

authorized by the State or local government to execute and sign the 
certificate. If it is impracticable to furnish a separate certificate 
for each order or contract because of frequency of purchases, a 
certificate covering all orders between given dates (such period not to 
exceed 12 calendar quarters) will be acceptable. The certificates and 
proper records of invoices, orders, etc., relative to tax-free sales 
must be retained by the manufacturer as provided in Sec. 53.24(d). A 
certificate of exemption to support tax-free sales under this section 
must contain the following:
    (i) Title of official executing certificate, branch of government, 
date executed, and statement that official is authorized to execute 
certificate.
    (ii) List articles covered by the certificate or beginning and 
ending dates during which orders will be placed by the purchaser (period 
not to exceed 12 calendar quarters).
    (iii) Name of manufacturer from which articles purchased.
    (iv) Governmental unit purchasing articles.
    (v) Statement that is understood that articles purchased under this 
certificate of exemption are limited to use exclusively by the 
purchasing governmental entity.
    (vi) Statement that is understood that any fraudulent use of this 
certificate may subject the person executing the certificate and all 
parties making fraudulent use of the certificate to all applicable 
criminal penalties under the Code.
    (vii) Name, address, and signature of person executing the 
certificate.
    (2) A purchase order, provided that all of the information required 
by paragraph (c)(1) of this section is included therein, is acceptable 
in lieu of a separate exemption certificate.
    (3) ATF I 5600.35. A preprinted certificate, ATF I 5600.35, 
Exemption Certificate, is available from the Bureau's Distribution 
Center which, when completed, contains all necessary information for a 
properly executed certificate. Extra copies of ATF I 5600.35 may be 
reproduced as needed.
    (d) Resale of articles purchased tax free by a State or local 
government. If articles purchased tax free for the exclusive use of a 
State or local government (whether on the basis of a registration number 
or an exemption certificate) are, prior to use by the State or local 
government, resold under circumstances that do not amount to an 
exclusive use by the State or local government (such as pistols or 
revolvers that are resold by a police department to its police 
officers), the parties responsible in the State or local government are 
required to inform the manufacturer, producer, or importer from whom the 
articles were purchased that they were disposed of in a manner that did 
not amount to an exclusive use by the State or local government. A 
willful failure to supply the manufacturer, producer, or importer with 
the information required by this subparagraph will subject responsible 
parties to the penalties provided by section 7203 of the Code.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-380, 61 
FR 37006, July 16, 1996]



Sec. 53.136  Tax-free sales of articles to nonprofit educational organizations.

    (a) In general. An article subject to tax under chapter 32 of the 
Code may be sold tax free by the manufacturer, pursuant to section 
4221(a)(5) of the Code and this section, to a nonprofit educational 
organization for its exclusive use. See paragraph (b) of this section 
for the meaning of the term ``nonprofit educational organization''. An 
article may be sold tax free by the manufacturer under this paragraph 
only in those cases where the sale of an article by the manufacturer is 
made directly to a nonprofit educational organization for its exclusive 
use. Accordingly, no sale may be made tax free to a dealer for resale to 
a nonprofit educational organization for its exclusive use even though 
it is known at the time of sale by the manufacturer that the article 
will be so resold. See section 6416(b)(2)(D) of the Code, and paragraph 
(e) of Sec. 53.178, for the circumstances under which credit or refund 
of tax is available where tax-paid articles are sold for the exclusive 
use of a nonprofit educational organization.

[[Page 902]]

    (b) Nonprofit educational organization. The term ``nonprofit 
educational organization'' means an organization described in section 
170(b)(1)(A)(ii) of the Code that is exempt from income tax under 
section 501(a) of the Code. Section 170(b)(1)(A)(ii) describes an 
``educational organization'' as one that normally maintains a regular 
faculty and curriculum and normally has a regularly enrolled body of 
pupils or students in attendance at the place where its educational 
activities are regularly carried on. The term also includes a school 
operated as an activity of an organization described in section 
501(c)(3) of the Code which is exempt from income tax under section 
501(a) of the Code, provided the primary function of such school is the 
presentation of formal instruction and provided such school normally 
maintains a regular faculty and curriculum and normally has a regularly 
enrolled body of pupils or students in attendance at the place where its 
educational activities are regularly carried on.
    (c) Evidence required in support of tax-free sales to nonprofit 
educational organizations. Every nonprofit educational organization 
purchasing tax free under section 4221(a)(5) of the Code must furnish 
the following information to the seller:
    (1) The tax exempt purpose for which the article or articles are 
being purchased, and
    (2) Its registration number. Such information must be in writing and 
may be noted on the purchase order or other document furnished by the 
purchaser to the seller in connection with each sale ``except that a 
single notification containing the information described in this 
paragraph may cover all sales by the seller to the purchaser made during 
a designated period not to exceed 12 successive calendar quarters.''. 
See paragraph (c) of Sec. 53.131 for the evidence required to establish 
exemption.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-447, 66 
FR 19088, Apr. 13, 2001]



Secs. 53.137-53.139  [Reserved]



Sec. 53.140  Registration.

    (a) General rule. Except as provided in Sec. 53.141, tax-free sales 
under section 4221 of the Code may be made only if the manufacturer, 
first purchaser, and second purchaser, as the case may be, have 
registered as required by this section. To secure a Certificate of 
Registry, the applicant must furnish the information required in 
paragraph (b) of this section.
    (b) Information to be submitted. Except as provided in Sec. 53.141, 
any person who is eligible to sell or purchase articles free of a tax 
imposed by section 4181 of the Code and who has not registered with the 
Commissioner of the Internal Revenue Service prior to January 1, 1991 or 
with ATF in accordance with the provisions of this section shall, prior 
to making a tax-free sale or purchase, file ATF Form 5300.28, in 
duplicate, executed in accordance with the instructions contained on the 
reverse of ATF Form 5300.28. The person who receives an approved 
Certificate of Registry shall be considered to be registered for 
purposes of selling or purchasing articles tax free as provided in this 
section. In the case of a nonprofit educational organization, 
information shall be furnished showing that the organization is an 
educational organization described in section 170(b)(1)(A)(ii) of the 
Code that is exempt from income tax under section 501(a) of the Code, or 
is a school operated as an activity of an organization described in 
section 501(c)(3) that is exempt from income tax under section 501(a).
    (c) Evidence required in support of tax-free sales. See 
Sec. 53.131(c)(1) for evidence required in support of tax-free sales to 
purchasers who are required to be registered.
    (d) Failure to register. If either the seller or purchaser is not 
registered as required by this section of the regulations, tax-free 
sales may not be made, except as indicated in Sec. 53.141.
    (e) Cross references. (1) For exceptions to the requirement for 
registration, see section 4222(b) of the Code and Sec. 53.141.
    (2) For revocation or suspension of registration, see Sec. 53.142.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by ATF-447, 66 FR 
19088, Apr. 13, 2001]

[[Page 903]]



Sec. 53.141  Exceptions to the requirement for registration.

    (a) State and local governments. (1) A State or local government 
purchasing articles direct from the manufacturer for its exclusive use 
may, but is not required to, register as provided in Sec. 53.140. To 
establish the right to sell articles tax free to a State or local 
government that is not registered, the manufacturer must obtain from an 
authorized official of the State or local government and retain in the 
manufacturer's possession either a properly executed exemption 
certificate, or a purchase order that contains the same information 
required to be furnished in an exemption certificate. See Sec. 53.135(c) 
for the information necessary to substantiate a tax-free sale under such 
circumstances.
    (2) Each State requesting registration will be assigned one 
Certificate of Registry. The registration number shown on this 
certificate may be used by all agencies, boards, and commissions of the 
State that are authorized by the State to make purchases for the 
exclusive use of the State. However, the registration number assigned to 
a State may not be used by any political subdivision of that State, such 
as a county or municipality. Each political subdivision of a State 
desiring to obtain a Certificate of Registry must obtain a separate 
registration number.
    (b) Sales or resales to foreign purchasers for export. Persons whose 
principal place of business is not within the United States may, but are 
not required to, register in order to purchase articles tax free for 
export. To establish the right to sell articles tax free for export to a 
purchaser who is not registered and who is located in a foreign country 
or a possession of the United States, the manufacturer must obtain the 
evidence required by Sec. 53.133(b).
    (c) United States. The registration requirements of the regulations 
in this part do not apply to purchases and sales by the United States or 
any of its agencies or instrumentalities. The evidence required in 
support of such tax-free purchases and sales is a notation on the 
purchase order or other document furnished to the seller clearly 
indicating that the article or articles are being purchased tax free as 
authorized by chapter 32 of the Code.
    (d) Supplies for vessels and aircraft. An article subject to an 
excise tax imposed by chapter 32 of the Code may be sold tax free by the 
manufacturer under the provisions of Sec. 53.134 for use by the 
purchaser as supplies for a vessel or aircraft if both the manufacturer 
and the purchaser are registered under the provisions of Sec. 53.140. 
The article also may be sold tax free for such use even though neither 
the manufacturer nor the purchaser is so registered if the provisions of 
paragraph (d) of Sec. 53.134 are satisfied.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-312, 56 
FR 31084, July 9, 1991]



Sec. 53.142  Denial, revocation or suspension of registration.

    (a) The appropriate ATF officer is authorized to deny, revoke or 
temporarily suspend, upon written notice, the registration of any person 
and the right of such person to sell or purchase articles tax free under 
section 4221 of the Code in any case in which he finds that:
    (1) The registrant is not a bona fide manufacturer, or a purchaser 
reselling direct to manufacturers or exporters;
    (2) The registrant is for some other reason not eligible under these 
regulations to retain a Certificate of Registry; or
    (3) The registrant has used his registration to avoid payment of the 
tax imposed by section 4181 of the Code, or to postpone or interfere in 
any manner with the collection of such tax;
    (4) Such denial, revocation, or suspension is necessary to protect 
the revenue; or
    (5) The registrant failed to comply with the requirements of 
paragraph (c) of Sec. 53.140, relating to the evidence required to 
support a tax-free sale.
    (b) The denial, revocation, or suspension of registration is in 
addition to any other penalty that may apply under the law for any act 
or failure to act.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-365, 60 
FR 33671, June 28, 1995]

[[Page 904]]



Sec. 53.143  Special rules relating to further manufacture.

    (a) Purchasing manufacturer to be treated as the manufacturer. For 
purposes of Chapter 32 of the Code, a manufacturer or producer to whom 
an article is sold or resold tax free under section 4221(a)(1) of the 
Code for use by it in further manufacture shall be treated as the 
manufacturer or producer of such article. If a manufacturer who 
purchases an article tax free for further manufacture does not use the 
article for further manufacture, the sale of the article by it, or its 
use of the article other than in further manufacture, shall, for 
purposes of the taxes imposed by chapter 32 of the Code, be treated as a 
sale or use of the article by the manufacturer thereof. See paragraphs 
(b) and (c) of this section for determination of taxable sale price 
where an article purchased tax free for further manufacture is resold, 
or used other than in further manufacture.
    (b) Computation of tax. Except as provided in paragraph (c) of this 
section, the tax liability referred to in paragraph (a) of this section 
shall be based on the price for which the article was sold by the 
purchasing manufacturer, or, where the manufacturer uses the article for 
a purpose other than that for which it was purchased, the tax shall be 
based on the price at which such or similar articles are sold, in the 
ordinary course of trade, by manufacturers, producers, or importers 
thereof. See section 4218(e) of the Code and Sec. 53.115.
    (c) Election. (1) Instead of computing the tax as described under 
paragraph (b) of this section, the purchasing manufacturer who has 
incurred liability for tax on its sale or use of an article as provided 
by paragraph (a) of this section may compute the tax incurred under 
chapter 32 of the Code by using as the tax base either the price for 
which the article was sold to it by the first purchaser, if any, or the 
price for which such article was sold by the actual manufacturer, 
producer, or importer of such article. The purchasing manufacturer must 
have in its possession information upon which to substantiate such basis 
for tax. For purposes of this paragraph, the price for which the article 
was sold by the actual manufacturer or by the first purchaser shall be 
determined as provided in section 4216 of the Code and Secs. 53.91-
53.102. However, such price shall not be adjusted for any discount, 
rebate, allowance, return, or repossession of a container or covering, 
or otherwise.
    (2) The election under this paragraph shall be in the form of a 
statement attached to the return reporting the tax applicable to the 
sale or use of the article which gave rise to such tax liability. Such 
election, once made, may not be revoked.



   Subpart L--Refunds and Other Administrative Provisions of Special 
                   Application to Manufacturers Taxes



Sec. 53.151  Returns.

    (a) In general. (1) Liability for tax imposed under chapter 32 of 
the Code shall be reported on ATF Form 5300.26, Federal Firearms and 
Ammunition Excise Tax Return. Except as provided in paragraphs (a)(2) 
and (b) of this section, a return on Form 5300.26 shall be filed for a 
period of one calendar quarter.
    (2) Return periods after September 30, 1992. For return periods 
after September 30, 1992, every person required to make a return on ATF 
Form 5300.26 who does not incur any firearms and ammunition excise tax 
liability in a given calandar quarter shall not be required to file a 
return on ATF Form 5300.26 for that calandar quarter. Except as provided 
in paragraph (a)(5) of this section, every person required to make a 
return on ATF Form 5300.26 who does not incur any firearms and 
ammunition excise tax liability for the entire calendar year and who has 
not filed a final return in accordance with Sec. 53.152 shall file an 
annual return on ATF Form 5300.26.
    (3) Return periods prior to October 1, 1992. For return periods 
prior to October 1, 1992, every person required to make a return on ATF 
Form 5300.26 shall make a return for each calendar quarter (whether or 
not liability was incurred for any tax reportable on the return for the 
return period) until the person has filed a final return in accordance 
with Sec. 53.152.

[[Page 905]]

    (4) Forms, etc. Each return required under the regulations in this 
part, together with any prescribed copies, records, or supporting data, 
shall be completed in accordance with the applicable forms, 
instructions, and regulations.
    (5) Special rule for one-time or occasional filings for return 
periods on or after July 1, 1995. One-time or occasional filers are not 
required to file quarterly or annual returns pursuant to paragraph 
(a)(2) of this section if the person reporting tax does not engage in 
any activity with respect to which tax is reportable on the return in 
the course of a trade or business. Such persons shall file and pay tax 
for periods only when liability is incurred. See Sec. 53.159(b)(2), 
providing that a deposit of taxes is not required for a one-time or 
occasional filing.
    (b) Monthly and semimonthly returns--(1) Requirement. If the 
appropriate ATF officer determines that any taxpayer who is required to 
deposit taxes under the provision of Secs. 53.157 or 53.159 has failed 
to make deposits of those taxes, the taxpayer shall be required, if so 
notified in writing by the appropriate ATF officer, to file a monthly or 
semimonthly return on ATF Form 5300.26. Every person so notified by the 
appropriate ATF officer shall file a return for the calendar month or 
semimonthly period in which the notice is received and for each calendar 
month or semimonthly period thereafter until the person has filed a 
final return in accordance with Sec. 53.152 or is required to file 
returns on the basis of a different return period pursuant to 
notification as provided in paragraph (b)(2) of this section.
    (2) Change of requirement. The appropriate ATF officer may require 
the taxpayer, by notice in writing, to file a quarterly or monthly 
return, if the taxpayer has been filing returns for a semimonthly 
period, or may require the taxpayer to file a quarterly or semimonthly 
return, if the taxpayer has been filing monthly returns.
    (3) Return for period change takes effect. (i) If a taxpayer who has 
been filing quarterly returns receives notice to file a monthly or 
semimonthly return, or a taxpayer who has been filing monthly returns 
receives notice to file a semimonthly return, the first return required 
pursuant to the notice shall be filed for the month or semimonthly 
period in which the notice is received and all months or semimonthly 
periods which are not includable in an earlier period for which the 
taxpayer is required to file a return.
    (ii) If a taxpayer who has been filing monthly or semimonthly 
returns receives notice to file a quarterly return, the last month or 
semimonthly period for which a return shall be filed is the last month 
or semimonthly period of the calendar quarter in which the notice is 
received.
    (iii) If a taxpayer who has been filing semimonthly returns receives 
notice to file a monthly return, the last semimonthly period for which a 
return shall be made is the last semimonthly period of the month in 
which the notice is received.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-330, 57 
FR 40325, Sept. 3, 1992; T.D. ATF-365, 60 FR 33671, June 28, 1995]



Sec. 53.152  Final returns.

    (a) In general. Any person who is required to make a return on ATF 
Form 5300.26 pursuant to Sec. 53.151 and who in any return period ceases 
operations in respect of which the person is required to make a return 
on the form, shall make the return for that return period as a final 
return. A return made as a final return shall be marked ``Final Return'' 
by the person filing the return. A taxpayer who has only temporarily 
ceased to incur liability for tax required to be reported on ATF Form 
5300.26 because of temporary or seasonal suspension of business or for 
other reasons, shall not make a final return until such operations are 
permanently ceased.
    (b) Statement to accompany final return. Each final return shall 
have attached a statement showing the address at which the records 
required by the regulations in this part will be kept, the name of the 
person keeping the records, and, if the business of the taxpayer has 
been sold or otherwise transferred to another person, the name and 
address of that person and the date on which the sale or transfer

[[Page 906]]

took place. If no sale or transfer occurred or if the taxpayer does not 
know the name of the person to whom the business was sold or 
transferred, that fact should be included in the statement.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-330, 57 
FR 40325, Sept. 3, 1992. Redesignated in part by T.D. ATF-365, 60 FR 
33670, June 28, 1995]



Sec. 53.153  Time for filing returns.

    (a) Quarterly returns. Each return required to be made under 
Sec. 53.151(a) for a return period of one calendar quarter shall be 
filed on or before the last day of the first calendar month following 
the close of the period for which it is made. However, a return may be 
filed on or before the 10th day of the second calendar month following 
the close of the period if timely deposits under section 6302(c) of the 
Code and Sec. 53.157 have been made in full payment of the taxes due for 
the period. For purposes of the preceding sentence, a deposit which is 
not required by regulations in respect of the return period may be made 
on or before the last day of the first calendar month following the 
close of the period.
    (b) Monthly, semimonthly and annual returns--(1) Monthly returns. 
Each return required to be made under Sec. 53.151(b) for a monthly 
period shall be filed not later than the 15th day of the month following 
the close of the period for which it is made.
    (2) Semimonthly returns. Each return required to be made under 
Sec. 53.151(b) for a semimonthly period shall be filed not later than 
the 10th day of the semimonthly period following the close of the period 
for which it is made.
    (3) Annual returns. Each return filed under the provisions of 
Sec. 53.151(a) for a return period of one calendar year shall be filed 
not later than the 31st day following the close of the calendar year.
    (c) Last day for filing. If the due date falls on a Saturday, 
Sunday, or legal holiday, the return and remittance shall be due on the 
next succeeding day which is not a Saturday, Sunday, or legal holiday. 
For purposes of this section, ``legal holiday'' is defined by section 
7503 of the Code and 26 CFR 301.7503(b).
    (d) Late filing. The taxpayer is subject to a penalty for failure to 
file a return or to pay tax within the prescribed time as imposed by 
section 6651 of the Code, if the return and remittance are not filed 
before the close of business on the prescribed last day of filing. For 
additions to the tax in the case of failure to file a return within the 
prescribed time, see 27 CFR 70.96.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-330, 57 
FR 40325, Sept. 3, 1992]



Sec. 53.154  Manner of filing returns.

    (a) Each return on ATF Form 5300.26 shall be filed with ATF, in 
accordance with the instructions on the form.
    (b) When the taxpayer sends the return on ATF Form 5300.26 by U.S. 
Mail, the official postmark of the U.S. Postal Service stamped on the 
cover in which the return was mailed shall be considered the date of 
delivery of the return. When the postmark on the cover is illegible, the 
burden of proving when the postmark was made will be on the taxpayer. 
When the taxpayer sends the return with or without remittance by 
registered mail or by certified mail, the date of registry or the date 
of the postmark on the sender's receipt of certified mail, as the case 
may be, shall be treated as the date of delivery of the return and, if 
accompanied, of the remittance.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-330, 57 
FR 40325, Sept. 3, 1992]



Sec. 53.155  Extension of time for filing returns.

    (a) In general. Ordinarily, no extension of time will be granted for 
filing any return statement or other document required with respect to 
the taxes impose by chapter 32, because the information required for the 
filing of those documents is under normal circumstances readily 
available. However, if because of temporary conditions beyond the 
taxpayer's control, a taxpayer believes an extension of time for filing 
is justified, the taxpayer may apply to the appropriate ATF officer for 
an extension. An extension of time for filing a return does not operate 
to extend the time for payment of the tax or any part of the tax unless 
so specified in

[[Page 907]]

the extension. For extensions of time for payment of the tax, see 
Sec. 53.156.
    (b) Application for extension of time. The application for an 
extension of time for filing the return shall be addressed to the 
appropriate ATF officer with whom the return is to be filed and must 
contain a full recital of the causes for the delay. It should be made on 
or before the due date of the return, and failure to do so many indicate 
negligence and constitute sufficient cause for denial. It should, where 
possible, be made sufficiently early to permit consideration of the 
matter and reply before what otherwise would be the due date of the 
return.
    (c) Filing the return. If an extension of time for filing the return 
is granted, a return shall be filed before the expiration of the period 
of extension.



Sec. 53.156  Extension of time for paying tax shown on return.

    (a) In general. (1) Ordinarily, no extensions of time will be 
granted for payment of any tax imposed by Chapter 32 of the Code, and 
shown or required to be shown on any return. However, if because of 
temporary conditions beyond the taxpayer's control a taxpayer believes 
an extension of time for payment is justified, the taxpayer may apply 
for an extension filing ATF Form 5600.38. The period of an extension 
shall not be in excess of 6 months from the date fixed for payment of 
the tax, except that if the taxpayer is abroad the period of the 
extension may be in excess of 6 months.
    (2) The granting of an extension of time for filing a return does 
not operate to extend the time for the payment of the tax or any part of 
the tax unless so specified in the extension. See Sec. 53.155.
    (b) Undue hardship required for extension. An extension of the time 
for payment shall be granted only upon a satisfactory showing that 
payment on the due date of the amount with respect to which the 
extension is desired will result in an undue hardship. The extension 
will not be granted upon a general statement of hardship. The term 
``undue hardship'' means more than an inconvenience to the taxpayer. It 
must appear that substantial financial loss, for example, loss due to 
the sale of property at a sacrifice price, will result to the taxpayer 
from making payment on the due date of the amount with respect to which 
the extension is desired. If a market exists, the sale of property at 
the current market price is not ordinarily considered as resulting in an 
undue hardship.
    (c) Application for extension. An application for an extension of 
time for payment of the tax shown or required to be shown on any return 
shall be made on ATF Form 5600.38, Application for Extension of Time for 
Payment of Tax, and shall be accompanied by evidence showing the undue 
hardship that would result to the taxpayer if the extension were 
refused. The application shall also be accompanied by a statement of the 
assets and liabilities of the taxpayer and an itemized statement showing 
all receipts and disbursements for each of the 3 months immediately 
preceding the due date of the amount to which the application relates. 
The application, with supporting documents, must be filed on or before 
the date prescribed for payment of the amount with respect to which the 
extension is desired. The application will be examined, and within 30 
days, if possible, will be denied, granted, or tentatively granted 
subject to certain conditions of which the taxpayer will be notified. If 
an additional extension is desired, the request for it must be made on 
or before the expiration of the period for which the prior extension is 
granted.
    (d) Payment pursuant to extension. If an extension of time for 
payment is granted, the payment shall be made on or before the 
expiration of the period of the extension without the necessity of 
notice and demand. The granting of an extension of time for payment of 
the tax does not relieve the taxpayer from liability for the payment of 
interest on the tax during the period of the extension. See section 6601 
of the Code and 26 CFR 301.6601-1.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-312, 56 
FR 31084, July 9, 1991; T.D. ATF-447, 66 FR 19088, Apr. 13, 2001]

[[Page 908]]



Sec. 53.157  Deposit requirement for deposits made for calendar quarters prior to July 1, 1995.

    Note: For deposit requirement for deposits made for calendar 
quarters beginning on or after July 1, 1995, see Sec. 53.159.
    (a) Monthly deposits. Except as provided in paragraph (b) of this 
section, if for any calendar month (other than the last month of a 
calendar quarter) any person required to file a quarterly excise tax 
return on ATF Form 5300.26 has a total liability under this part of more 
than $100 for all excise taxes reportable on that form, the amount of 
liability for taxes shall be deposited by the person in accordance with 
the instructions on ATF Form 5300.27 on or before the last day of the 
month following the calendar month.
    (b) Semimonthly deposits. (1) If any person required to file an 
excise tax return on ATF Form 5300.26 for any calendar quarter has a 
total liability under this part of more than $2,000 for all excise taxes 
reportable on that form for any calendar month in the preceding calendar 
quarter, the amount of that liability for taxes under this part for any 
semimonthly period (as defined in paragraph (d)(1) of this section) in 
the succeeding calendar quarter shall be deposited by the person in 
accordance with the instructions on ATF Form 5300.27 on or before the 
depositary date (as defined in paragraph (d)(2) of this section) 
applicable to the semimonthly period.
    (2) A person will be considered to have complied with the 
requirements of paragraph (b)(1) of this section for a semimonthly 
period if--
    (i)(A) The person's deposit for the semimonthly period is not less 
than 90 percent of the total amount of the excise taxes reportable by 
the person on ATF Form 5300.26 for the period, and
    (B) If the semimonthly period occurs in a calendar month other than 
the last month in a calendar quarter, the person deposits any 
underpayment for the month by the 9th day of the second month following 
the calendar month; or
    (ii)(A) The person's deposit for each semimonthly period in the 
calendar month is not less than 45 percent of the total amount of the 
excise taxes reportable by the person on ATF Form 5300.26 for the month, 
and
    (B) If such month is other than the last month in a calendar 
quarter, the person deposits any underpayment for such month by the 9th 
day of the second month following the calendar month; or
    (iii)(A) The person's deposit for each semimonthly period in the 
calendar month is not less than 50 percent of the total amount of the 
excise taxes reportable by the person on ATF Form 5300.26 for the second 
preceding calendar month, and
    (B) If such month is other than the last month in a calendar 
quarter, the person deposits any underpayment for such month by the 9th 
day of the second month following the calendar month; or
    (iv)(A) The requirements of paragraph (b)(2) (i)(A), (ii)(A), or 
(iii)(A) of this section are satisfied for the first semimonthly period 
of a calendar month after December 1990,
    (B) If the person's deposit for the second semimonthly period of the 
calendar month is, when added to the deposit for the first semimonthly 
period, not less than 90 percent of the total amount of the excise taxes 
reportable by the person on ATF Form 5300.26 for the calendar month, and
    (C) If the semimonthly periods occur in a calendar month other than 
the last month in a calendar quarter, the person deposits any 
underpayment for the month by the 9th day of the second month following 
the calendar month.
    (3)(i) Paragraph (b)(2) (ii) and (iii) of this section shall not 
apply to any person who normally incurs in the first semimonthly period 
in each calendar month more than 75 percent of the person's total excise 
tax liability under this part for the month.
    (ii) Persons who make their deposits in accordance with paragraph 
(b)(2) (ii), (iii), or (iv) of this section will find it unnecessary to 
keep their books and records on a semimonthly basis.
    (c) Deposit of certain excess undeposited amounts. Notwithstanding 
paragraphs (a) and (b) of this section, if any person required to file 
an excise tax return on ATF Form 5300.26 for any calendar quarter 
beginning after December 31, 1990, has a total liability under this

[[Page 909]]

part for all excise taxes reportable on the form for the calendar 
quarter which exceeds by more than $100 the total amount of taxes 
deposited by the person pursuant to paragraph (a) or (b) of this section 
for the calendar quarter, the person shall, on or before the last day of 
the calendar month following the calendar quarter for which the return 
is required to be filed, deposit in accordance with the instructions on 
ATF Form 5300.27 the full amount by which the person's liability for all 
excise taxes reportable on the return for that calendar quarter exceeds 
the amount of excise taxes previously deposited by the person for that 
calendar quarter.
    (d) Definitions--(1) Semimonthly period. The term semimonthly period 
means the first 15 days of a calendar month or the portion of a calendar 
month following the 15th day of that month.
    (2) Depositary date. The term depositary date means, in the case of 
deposits for semimonthly periods beginning after December 31, 1990, the 
9th day of the semimonthly period following the semimonthly period for 
which the taxes are reportable.
    (3) Lockbox financial institution. The term lockbox financial 
institution means the financial institution designated as a depository 
for the payment of excise taxes on ATF Form 5300.27, Federal Firearms 
and Ammunition Excise Tax Deposit form.
    (e) Depositary forms and procedures--(1) In general. Each remittance 
of amounts required to be deposited for periods beginning after December 
31, 1990 shall be accompanied by an ATF Form 5300.27, Federal Firearms 
and Ammunition Excise Tax Deposit form, or ATF Form 5300.26, Federal 
Firearms and Ammunition Excise Tax Return, which shall be prepared in 
accordance with the applicable instructions. Taxpayers electing to remit 
deposits by EFT pursuant to Sec. 53.158 shall prepare and submit ATF 
Form 5300.26 or ATF Form 5300.27 in accordance with the instructions on 
the form. The timeliness of the deposit will be determined by the date 
it is received (or is deemed received under section 7502(e) and 26 CFR 
301.7502-1) by the lockbox financial institution, or the ATF officer 
designated on ATF Form 5300.27 or ATF Form 5300.26 accompanying the 
deposit, or when made by electronic fund transfer, the Treasury Account. 
Amounts deposited pursuant to this paragraph shall be considered to be 
paid on the last day prescribed for filing the return in respect of the 
tax (determined without regard to any extension of time for filing the 
returns), or at the time deposited, whichever is later.
    (2) Number of remittances. A person required by this section to make 
deposits may make one or more remittances with respect to the amount 
required to be deposited. An amount of tax which is not otherwise 
required by this section to be deposited may, nevertheless, be deposited 
if the person liable for the tax so desires.
    (3) Information required. Each person making deposits pursuant to 
this section shall report on the return for the period with respect to 
which the deposits are made information regarding the deposits in 
accordance with the instructions applicable to the return and pay (or 
deposits by the due date of the return) the balance, if any, of the 
taxes due for the period.
    (4) Procurement of prescribed forms. Copies of the Federal Firearms 
and Ammunition Excise Tax Deposit form will be furnished, so far as 
possible, to persons required to make deposits under this section. Such 
a person will not be excused from making a deposit, however, by the fact 
that no form has been furnished. A person not supplied with the form is 
required to apply for it in ample time to make the required deposits 
within the time prescribed, supplying with the application the person's 
name, employer identification number, address, and the taxable period to 
which the deposits will relate. Copies of the Federal Firearms and 
Ammunition Excise Tax Deposit form may be obtained by applying for them 
with the ATF Distribution Center, 7943 Angus Court, Springfield, 
Virginia 22153.
    (f) Nonapplication to certain taxes. This section does not apply to 
taxes for:
    (1) Any month or semimonthly period in which the taxpayer receives 
notice pursuant to Sec. 53.151(b) to file ATF Form 5300.26 or

[[Page 910]]

    (2) Any subsequent month or semimonthly period for which a return on 
ATF Form 5300.26 is required.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-312, 56 
FR 31084, July 9, 1991; T.D. ATF-330, 57 FR 40325, Sept. 3, 1992; T.D. 
ATF-365, 60 FR 33671, June 28, 1995; T.D. ATF-447, 66 FR 19088, Apr. 13, 
2001]



Sec. 53.158  Payment of tax by electronic fund transfer.

    (a) In general. For return periods after September 30, 1992, any 
taxpayer liable for firearms and ammunition excise taxes incurred under 
this part may elect to remit payments and deposits of the taxes 
(taxpayments) by electronic fund transfer (EFT). A taxpayer who elects 
to make remittance by EFT must use that method of remitting excise taxes 
on firearms and ammunition for a minimum of four consecutive calendar 
quarters. A taxpayer who makes remittance by EFT for a calendar quarter 
may not use any other method of remitting and ammunition excise taxes 
for that quarter.
    (b) Requirements. (1) On or before the 10th day of the calendar 
quarter preceding the calendar quarter in which the taxpayer will begin 
remitting taxes by EFT, each taxpayer who elects to make remittances by 
EFT of firearms and ammunition excise taxes incurred under this part 
shall give written notice to the appropriate ATF officer, indicating 
that remittances will be paid by EFT. Taxpayers who gave written 
notification in a previous calendar quarter electing to make remittances 
of tax by EFT are not required to give additional written notifications 
to continue remitting tax by EFT for succeeding calendar quarters.
    (2) For each deposit made or return filed in accordance with this 
subpart, the taxpayer shall direct the taxpayer's financial institution 
to make an EFT in the amount of the taxpayment to the Treasury Account 
as provided in paragraph (e) of this section. The request will be made 
to the financial institution early enough for the transfer of funds to 
be made to the Treasury Account no later than the close of business on 
the last day for making the deposit or filing the return as prescribed 
in Secs. 53.157 or 53.159, and 53.153. The request will take into 
account any time limit established by the financial institution.
    (3) Taxpayers who elect to discontinue making remittances by EFT of 
firearms and ammunition excise taxes may make such election at any time 
following four consecutive calendar quarters in which tax is remitted by 
EFT. Taxpayers electing to discontinue making remittances by EFT shall 
remit the tax with the next deposit or return as prescribed in 
Secs. 53.157 or 53.159, and 53.151 for remittances not made by EFT and 
notify the appropriate ATF officer by attaching a written notification 
to the tax deposit form or return stating that remittance of firearms 
and ammunition excise taxes will no longer be made by EFT.
    (c) Remittance. (1) Taxpayers who elect to make firearms and 
ammunition excise taxpayments by EFT shall file the deposit form and/or 
return with ATF in accordance with the applicable instructions on the 
forms.
    (2) Remittances will be considered as made when the taxpayment by 
EFT is received by the Treasury Account when it is paid to a Federal 
Reserve Bank.
    (3) When the taxpayer directs the financial institution to effect an 
electronic fund transfer message as required by paragraph (b)(2) of this 
section, the transfer data record furnished to the taxpayer through 
normal banking procedures will serve as the record of payment and will 
be retained as part of the required records.
    (d) Failure to make a taxpayment by EFT. The taxpayer is subject to 
penalties imposed by 26 U.S.C. 6651 and 6656, as applicable, for failure 
to make a payment or deposit of tax by EFT on or before the close of 
business on the prescribed last day for making such payment or deposit.
    (e) Procedure. Upon the notification required under paragraph (b)(1) 
of this section, the appropriate ATF officer will issue to the taxpayer 
an ATF Procedure entitled Payment of Tax by Electronic Fund Transfer. 
This publication outlines the procedure a taxpayer follows when 
preparing deposits,

[[Page 911]]

returns and EFT remittances in accordance with this subpart.

[T.D. ATF-330, 57 FR 40326, Sept. 3, 1992, as amended by T.D. ATF-365, 
60 FR 33671, June 28, 1995; T.D. ATF-447, 66 FR 19088, Apr. 13, 2001]



Sec. 53.159  Deposit requirement for deposits made for calendar quarters beginning on or after July 1, 1995.

    (a) Definitions--(1) Definition of tax liability. For purposes of 
this section, the term ``tax liability'' means the total tax liability 
for the specified period plus or minus any allowable adjustments made in 
accordance with the instructions applicable to the form on which the 
return is made.
    (2) Semimonthly period. Except as provided in paragraph (c)(4)(ii) 
of this section, the term ``semimonthly period'' means the first 15 days 
of a calendar month or the remaining portion of a calendar month 
following the 15th day of that month.
    (b) In general--(1) Semimonthly deposits. Except as provided in 
paragraphs (b)(2), (c)(2), and (j) of this section, any person required 
to file a quarterly excise tax return on ATF Form 5300.26 must make a 
deposit of tax for each semimonthly period as prescribed in paragraph 
(c) of this section.
    (2) One-time or occasional filings. No deposit is required in the 
case of any taxes reportable on a one-time or occasional filing (as 
defined in Sec. 53.151(a)(5)).
    (c) Amount of deposit--(1) In general. Except as provided in 
paragraphs (c)(2), (c)(3) and (c)(6) of this section, the deposit of tax 
for each semimonthly period must be equal to the amount of tax liability 
incurred during that semimonthly period. Except as provided in paragraph 
(c)(3) of this section, no deposit is required for any semimonthly 
period in which no tax liability is incurred.
    (2) De minimis exception. Except as provided in paragraph (c)(3) of 
this section, any person who has a tax liability for the current 
calendar quarter of $2,000 or less is not required to make deposits for 
that quarter. However, semimonthly deposits of tax are required 
beginning with the semimonthly period in which unpaid tax liability 
exceeds $2,000 and for every semimonthly period thereafter in which tax 
liability is incurred. The first deposit for the current quarter shall 
be equal to the unpaid tax liability; thereafter, deposits shall be 
equal to the amount of tax liability incurred during that semimonthly 
period.
    (3) Amount of deposit; safe harbor rule based on look-back quarter 
liability; In general. Except as provided in paragraph (c)(6) of this 
section, any person who made a return of tax on ATF Form 5300.26 
reporting taxes for the second preceding calendar quarter (the ``look-
back quarter''), or who did not file a return for the look-back quarter 
because of the provisions of Sec. 53.151(a)(2), is considered to have 
complied with the requirement for deposit of taxes for the current 
calendar quarter if--
    (i) The deposit of taxes for each semimonthly period in the current 
calendar quarter is an amount equal to not less than 1/6 (16.67 percent) 
of the total tax liability incurred for the look-back quarter;
    (ii) Each deposit is made on time; and
    (iii) The amount of any underpayment of taxes for the current 
calendar quarter is paid by the due date of the return.
    (4) Modification for third calendar quarter. The safe harbor rule in 
paragraph (c)(3) of this section does not apply for the third calendar 
quarter unless--
    (i) The deposit of taxes for the semimonthly period July 1-September 
15 meets the requirements of paragraph (c)(3) of this section; and
    (ii) Each deposit of taxes for the periods September 16-25 and 
September 26-30 is not less than 1/12th (8.34 percent) of the total tax 
liability incurred for the look-back quarter.
    (5) Modification for tax rate increase--(i) Application. The safe 
harbor rule as prescribed in paragraph (c)(3) is modified for the first 
and second calendar quarters beginning on or after the effective date of 
an increase in the rate of any tax prescribed by 26 U.S.C. 4181 to which 
this part 53 applies.
    (ii) Modification. The amount of deposit for calendar quarters 
referred to in paragraph (c)(3) of this section must be adjusted so that 
the deposit of taxes for each semimonthly period in the calendar quarter 
is not less than 1/6 (16.67 percent) of the tax liability the person

[[Page 912]]

would have had with respect to the tax for the look-back quarter if the 
increased rate of tax had been in effect for that look-back quarter.
    (6) First time filers. Any person who did not file a return of tax 
on ATF Form 5300.26 for the first and second preceding calendar quarters 
because they were not engaged in any activity with respect to which tax 
is reportable on the return in the course of a trade or business, is 
considered to have complied with the requirement for deposit of taxes 
for the current calendar quarter if--
    (i) The deposit of taxes for each semimonthly period in the calendar 
quarter is not less than 95 percent of the tax liability incurred with 
respect to those taxes during the semimonthly period;
    (ii) Each deposit is made on time; and
    (iii) The amount of any underpayment of taxes for the current 
calendar quarter is paid by the due date of the return.
    (d) Failure to comply with deposit requirements. (1) If a person 
fails to make deposits as required under this part, the appropriate ATF 
officer may withdraw the person's right to use the safe harbor rule 
provided by paragraph (c)(3) of this section.
    (2) Cross reference. The appropriate ATF officer may also require a 
taxpayer who fails to make deposits of tax to file a monthly or 
semimonthly return, see Sec. 53.151(b)(1).
    (e) Time for making deposit. Except for deposits for the period 
September 16-25, each deposit required to be made by this section shall 
be made not later than the 9th day of the semimonthly period following 
the close of the period for which it is made. The deposit for the period 
September 16-25 shall be made not later than September 28. The deposit 
for the period September 26-30, is due not later than October 9.
    (f) Last day for filing. (1) Except as provided by paragraph (f)(2) 
of this section, if the due date of the deposit falls on a Saturday, 
Sunday, or legal holiday, the deposit and remittance shall be due on the 
next succeeding day which is not a Saturday, Sunday, or legal holiday. 
For purposes of this section, ``legal holiday'' is defined by section 
7503 of the Code and 27 CFR 70.306(b) of this chapter.
    (2) If the required due date of the deposit for the period September 
16-25 falls on a Saturday, the deposit and remittance shall be due on 
the preceding day. If such required due date falls on a Sunday, the 
return and remittance shall be due on the following day.
    (g) Forms and procedures. Each remittance of amounts required to be 
deposited shall be accompanied by ATF Form 5300.27, Federal Firearms and 
Ammunition Excise Tax Deposit form, or ATF Form 5300.26, Federal 
Firearms and Ammunition Excise Tax Return, which shall be prepared in 
accordance with the applicable instructions. Taxpayers electing to remit 
deposits by EFT pursuant to Sec. 53.158 shall prepare and submit ATF 
Form 5300.26 or ATF Form 5300.27 in accordance with the instructions 
contained in ATF Procedure 92-1, Publication 5000.11. The timeliness of 
the deposit will be determined by the date it is received by the lockbox 
financial institution, or the ATF officer designated on the form 
accompanying the deposit, or the Treasury Account, when made by EFT. In 
order for deposits of less than $20,000 made by U.S. Mail to be 
considered received timely, the date of mailing must be on or before the 
second day preceding the due date of the deposit as evidenced by the 
official postmark of the U.S. Postal Service stamped on the cover in 
which the deposit was mailed. When the postmark on the cover is 
illegible, the burden of proving when the postmark was made will be on 
the taxpayer. When the taxpayer sends the deposit by registered mail or 
by certified mail, the date of registry or the date of the postmark on 
the sender's receipt of certified mail, as the case may be, shall be 
treated as the date of delivery of the deposit. Any deposit of $20,000 
or more must be received by the last day prescribed for making such 
deposit, regardless of when mailed. Amounts deposited pursuant to this 
paragraph shall be considered to be paid on the last day prescribed for 
filing the return in respect of the tax (determined without regard to 
any extension of time for filing the returns), or at the time deposited, 
whichever is later.
    (h) Number of remittances. A person required by this section to make 
deposits

[[Page 913]]

shall make one deposit for a semimonthly period.
    (i) Procurement of prescribed forms. Copies of the Federal Firearms 
and Ammunition Excise Tax Deposit form will be furnished, so far as 
possible, to persons required to make deposits under this section. Such 
a person will not be excused from making a deposit however, by the fact 
that no form has been furnished. A person not supplied with the form is 
required to obtain the form in ample time to make the required deposits 
within the time prescribed. Copies of the Federal Firearms and 
Ammunition Excise Tax Deposit form may be obtained by request from the 
ATF Distribution Center, P.O. Box 5950, Springfield, Virginia 22153-
5950.
    (j) Taxpayers required to file monthly or semimonthly returns. This 
section does not apply to taxes for:
    (1) Any month or semimonthly period in which the taxpayer receives 
notice pursuant to section 53.151(b) to file ATF Form 5300.26; or
    (2) Any subsequent month or semimonthly period for which a return on 
ATF Form 5300.26 is required.
    (3) Taxpayers required to file monthly returns shall make 
semimonthly deposits of 100 percent of the liability incurred during 
each semimonthly period by the 9th day of the month following the last 
day of the semimonthly period. Taxpayers required to file semimonthly 
returns shall pay any tax due for the semimonthly period with each 
return.
    (k) Examples.

    Example 1. One-time filing or occasional filing--(1) Facts. On 
October 18, 1995, A, an individual who lives in the United States 
purchases a custom made rifle outside the United States and imports it 
into the United States. A uses the rifle on October 20, 1995. A is 
liable for the firearms excise tax imposed by sections 4181 and 4218(a). 
Since A does not regularly sell rifles in arm's length transactions, a 
constructive sale price of $20,000 is determined (Sec. 53.115(b)). The 
amount of A's tax liability is $2200, 11 percent of the constructive 
sale price of the rifle. The liability is incurred during the fourth 
calendar quarter of 1995, the quarter during which the rifle is used 
(Sec. 53.111(d)). A did not import the rifle in the course of its trade 
or business and does not engage in any activities with respect to which 
tax is reportable on ATF Form 5300.26 in the course of a trade or 
business.
    (2) Filing requirement. A must file a return on Form 5300.26 
(Sec. 53.151(a)) for the fourth calendar quarter of 1995 reporting A's 
$2200 firearms excise tax liability. The Form 5300.26 is due by January 
31, 1996, the last day of the first month following the calendar quarter 
(Sec. 53.153(a)). Because A did not import the firearm in the course of 
its trade or business and does not engage in any activities with respect 
to which tax is reportable in the course of a trade or business, the 
return is a one-time filing or occasional filing.
    (3) Payment requirement. Because A's Form 5300.26 is a one-time 
filing, A is not required to make deposits of tax (Sec. 53.159(b)(2)). 
Instead, A pays the $2200 of tax with the return.
    Example 2. Deposit requirement; based on look-back quarter 
liability--(1) Facts. B is a manufacturer of firearms. B sells 75 
pistols which have a taxable sale price of $500 each during the second 
calendar quarter of 1996. B sold 50 of the pistols in the first 
semimonthly period of May, 1996, and the other 25 pistols in the second 
semimonthly period of April, 1996. B did not incur tax liability in any 
other semimonthly period in the second quarter. The amount of B's tax 
liability for the second calendar quarter is $3,750, 10 percent of the 
taxable sale price of the pistols. B filed Form 5300.26 for the second 
preceding calendar quarter, the look-back quarter, on January 31, 1996 
reporting tax liability in the amount of $2,700.
    (2) Deposit requirement. B is required to make deposits of tax for 
each semimonthly period in the calendar quarter because B has incurred 
more than $2,000 in liability for the current quarter. B may use the 
safe harbor rule based on look-back quarter liability to determine the 
amount of the required deposits (Sec. 53.159(c)(3)). Under this safe 
harbor rule, B's deposit for each semimonthly period must equal at least 
$450.00, 1/6 (16.67 percent) of the tax liability incurred for the look-
back quarter. B's deposit must be timely and B must pay the amount of 
any underpayment by the due date of the return. Accordingly, B meets the 
deposit requirement if B makes the following deposits:

------------------------------------------------------------------------
                                                               Amount of
         Semimonthly period                Deposit due by       deposit
------------------------------------------------------------------------
April 1-15..........................  April 24, 1996.........    $450.00
April 16-31.........................  May 9, 1996............     450.00
May 1-15............................  May 24, 1996...........     450.00
May 16-30...........................  June 10, 1996..........     450.00
June 1-15...........................  June 24, 1996..........     450.00
June 16-30..........................  July 9, 1996...........     450.00
------------------------------------------------------------------------

    The deposit due on June 10, 1996, would ordinarily be due on June 9, 
1996. However, because June 9, 1996 is a Sunday, under section 7503, B 
has an additional day to make the required deposit.

[[Page 914]]

    (3) Filing requirement. B must file a return on Form 5300.26 for the 
second calendar quarter of 1996 reporting B's $3750 tax liability 
(Sec. 53.151(a)). The form 5300.26 is due by July 31, 1996, the last day 
of the first month following the calendar quarter (Sec. 53.153(a)). B 
must also pay $1050.00, the underpayment amount by which the total tax 
liability for the second calendar quarter exceeds the total tax 
liability for the look-back quarter, by the due date of the return.
    Example 3. Deposit amount; no liability in look-back quarter--(1) 
Facts. C, a manufacturer of ammunition, filed returns for the first, 
second and third quarters of 1995 reporting C's tax liability. During 
the fourth quarter of 1995, C did not make any taxable sales of shells 
or cartridges, thereby incurring no tax liability for that return 
period. C did not file Form 5300.26 for the fourth calendar quarter 
since no tax liability was incurred (Sec. 53.151(a)(2)). C made taxable 
sales in the second quarter of 1996 amounting to $25,500.00, incurring a 
tax liability of $2805.
    (2) Deposit requirement. Ordinarily, C would be required to make 
deposits of tax for each semimonthly period in the calendar quarter 
because C's total liability for the current calendar quarter exceeds 
$2,000. However, since C incurred a tax liability of $0 in the second 
preceding calendar quarter (the look-back quarter) (Sec. 53.159(c)(3)), 
under the safe harbor rule, C is not required to make deposits of tax.
    (3) Filing requirement. C is required to file a return on Form 
5300.26 reporting C's $2805 ammunition excise tax liability. The form 
5300.26 is due by July 31, 1996.
    (4) Payment requirement. C must pay the $2805 tax with the return.
    Example 4. Deposit requirement; First time Filer--(1) Facts. D, a 
manufacturer of firearms, began business on 2/16/96. D sold 300 shotguns 
which had a taxable sales price of $210 each during the first quarter of 
1996. D sold 70 shotguns in the second semimonthly period of February, 
1996, 130 shotguns in the first semimonthly period of March, 1996 and 
100 shotguns in the second semimonthly period of March, 1996. The amount 
of D's tax liability for the first quarter of 1996 is $6,930, 11 percent 
of the taxable sale price of the shotguns.
    (2) Deposit requirement. D is required to make a deposit of tax when 
D's tax liability exceeds $2,000 (Sec. 53.159(c)(2)). Therefore, D must 
make a deposit of tax beginning with the first semimonthly period in 
March, the semimonthly period in which D's unpaid tax liability exceeded 
$2,000. Because D, a first time filer, does not have an established 
look-back quarter, D's deposit of tax must be at least 95 percent of the 
incurred tax liability. D is required to make deposits of at least 95 
percent of incurred tax liability for every semimonthly period in the 
quarter thereafter. D's deposits must be timely and any underpayment of 
tax must be paid by the due date of the return. Accordingly, D meets the 
deposit requirement if D makes the following deposits:

------------------------------------------------------------------------
                                                               Amount of
         Semimonthly period                Deposit due by       deposit
------------------------------------------------------------------------
Feb. 16-29..........................  March 11, 1996.........         $0
March 1-15..........................  March 25, 1996.........      4,389
March 16-31.........................  April 9, 1996..........   2,194.50
------------------------------------------------------------------------

    The deposits due on March 11, 1996, and March 25, 1996, would 
ordinarily be due on March 9, 1996, and March 24, 1996, respectively. 
However, because March 9, 1996, is a Saturday, and March 24, 1996, is a 
Sunday, under section 7503, D has until March 11, 1996, to make the 
deposit due on March 9, 1996, and until March 25, 1996, to make the 
deposit due on March 24, 1996.
    (3) Filing requirement. D must file a return on Form 5300.26 for the 
first calendar quarter of 1996 reporting D's $6,930 tax liability 
(Sec. 53.151(a)). The form 5300.26 is due by April 30, 1996, the last 
day of the first month following the calendar quarter (Sec. 53.153(a)). 
D must also pay $346.50, the amount by which the tax liability for the 
quarter was underpaid, by the due date of the return.
    Example 5. Deposit amount; third calendar quarter--(1) Facts. E, a 
manufacturer of firearms, is a semimonthly depositor who makes deposits 
of tax using the safe harbor rule based on the look-back quarter to 
determine the amount of tax required to be deposited for the third 
calendar quarter of 1995. E incurred a tax liability amounting to 
$38,000 for the third quarter. E filed Form 5300.26 for the second 
preceding calendar quarter, the look-back quarter on May 1, 1995, 
reporting tax liability in the amount of $30,000.
    (2) Deposit requirement. Because E has incurred more than $2,000 in 
liability and has chosen to make deposits of tax based on the look-back 
quarter, E is required to make deposits of tax equal to $5,000, 1/6 
(16.67 percent) of the tax liability incurred in the look-back quarter, 
for each semimonthly period in the calendar quarter. However, because of 
the special rule which modifies the safe harbor rule for deposits of tax 
for the month of September (Sec. 53.159(c)(4)), E must make deposits 
equal to $2500.00 each, 1/12th (8.34 percent) of the tax liability 
incurred in the look-back quarter for the periods September 16-25 and 
September 26-30. E's deposits must be timely and E must pay the amount 
of any underpayment by the due date of the return. Accordingly, E meets 
the deposit requirement if E makes the following deposits:

------------------------------------------------------------------------
                                                               Amount of
         Semimonthly period                Deposit due by       deposit
------------------------------------------------------------------------
July 1-15...........................  July 24, 1995..........   $5000.00
July 16-31..........................  August 9, 1995.........    5000.00
Aug. 1-15...........................  August 24, 1995........    5000.00
Aug. 16-31..........................  Sept. 11, 1995.........    5000.00

[[Page 915]]

 
Sept. 1-15..........................  Sept. 25, 1995.........    5000.00
Sept. 16-25.........................  Sept. 28, 1995.........    2500.00
Sept. 26-30.........................  October 9, 1995........    2500.00
------------------------------------------------------------------------

    The deposits due on September 11, 1995, and September 25, 1995, 
would ordinarily be due on September 9, 1995, and September 24, 1995, 
respectively. However, because September 9, 1995, is a Saturday, and 
September 24, 1995, is a Sunday, under section 7503, D has until 
September 11, 1995, to make the deposit due on September 9, 1995, and 
until September 25, 1995, to make the deposit due on September 24, 1995.
    (3) Filing requirement. E must file a return on Form 5300.26 for the 
third calendar quarter of 1995 reporting E's $38,000 tax liability 
(Sec. 53.153(a)). E must also pay $8,000, the underpayment amount by 
which the total tax liability for the third calendar quarter exceeds the 
total tax liability for the look-back quarter, by the due date of the 
return.

[T.D. ATF-365, 60 FR 33671, June 28, 1995, as amended by T.D. ATF-447, 
66 FR 19089, Apr. 13, 2001]



Sec. 53.161  Authority to make credits or refunds.

    For provisions relating to credits and refunds of certain taxes on 
sales and services see section 6416 of the Code and Secs. 53.171-53.186. 
For regulations under section 6402 of the Code of general application in 
respect of credits or refunds, see 27 CFR 70.122, 70.123, and 70.124 
(Procedure and Administration).



Sec. 53.162  Abatements.

    For regulations under section 6404 of the Code of general 
application in respect of abatements of assessments to tax, see 27 CFR 
70.125 (Procedure and Administration).



Secs. 53.163-53.170  [Reserved]



Sec. 53.171  Claims for credit or refund of overpayments of manufacturers taxes.

    Any claims for credit or refund of an overpayment of a tax imposed 
by chapter 32 of the Code shall be made in accordance with the 
applicable provisions of this subpart and the applicable provisions of 
27 CFR 70.123 (Procedure and Administration). A claim on ATF Form 2635 
(5620.8) is not required in the case of a claim for credit, but the 
amount of the credit shall be claimed by entering that amount as a 
credit on a return of tax under this subpart filed by the person making 
the claim. In this regard, see Sec. 53.185.



Sec. 53.172  Credit or refund of manufacturers tax under chapter 32.

    (a) Overpayment not described in section 6416(b)(2) of the Code--(1) 
Claims included. This paragraph applies only to claims for credit or 
refund of an overpayment of manufacturers tax imposed by Chapter 32. It 
does not apply, however, to a claim for credit or refund on any 
overpayment described in paragraph (b) of this section which arises by 
reason of the application of section 6416(b)(2) of the Code.
    (2) Supporting evidence required. No credit or refund of any 
overpayment to which this paragraph (a) applies shall be allowed unless 
the person who paid the tax submits with the claim a written consent of 
the ultimate purchaser to the allowance of the credit or refund, or 
submits with the claim a statement, supported by sufficient available 
evidence, asserting that:
    (i) The person has neither included the tax in the price of the 
article with respect to which it was imposed nor collected the amount of 
the tax from a vendee, and identifying the nature of the evidence 
available to establish these facts, or
    (ii) The person has repaid the amount of the tax to the ultimate 
purchaser of the article.
    (3) Ultimate purchaser--(i) General rule. The term ``ultimate 
purchaser'', as used in paragraph (a)(2) of this section, means the 
person who purchased the article for consumption, or for use in the 
manufacture of other articles and not for resale in the form in which 
purchased.
    (ii) Special rule under section 6416(a)(3)--(A) Conditions to be 
met. If tax under chapter 32 of the Code is paid in respect of an 
article and the appropriate ATF officer determines that the article is 
not subject to tax under chapter 32, the term ``ultimate purchaser'', as 
used in paragraph (a)(2) of this section, includes any wholesaler, 
jobber, distributor, or retailer who, on the 15th day after the date of 
the determination holds for sale any such article with respect to which 
tax has been paid, if the claim for credit or refund of

[[Page 916]]

the overpayment in respect of the articles held for sale by wholesaler, 
jobber, distributor, or retailer is filed on or before the date on which 
the person who paid the tax is required to file a return for the period 
ending with the first calendar quarter which begins more than 60 days 
after the date of the determination by the appropriate ATF officer.
    (B) Supporting statement. A claim for credit or refund of an 
overpayment of tax in respect of an article as to which a wholesaler, 
jobber, distributor, or retailer is the ultimate purchaser, as provided 
in this paragraph (a)(3)(ii), must be supported by a statement that the 
person filing the claim has a statement, by each wholesaler, jobber, 
distributor, or retailer whose articles are covered by the claim, 
showing total inventory, by model number and quantity, of all such 
articles purchased tax-paid and held for sale as of 12:01 a.m. of the 
15th day after the date of the determination by the appropriate ATF 
officer that the article is not subject to tax under chapter 32 of the 
Code.
    (C) Inventory requirement. The inventory shall not include any such 
article, title to which, or possession of which, has previously been 
transferred to any person for purposes of consumption unless the entire 
purchase price was repaid to the person or credited to the person's 
account and the sale was rescinded or any such article purchased by the 
wholesaler, jobber, distributor, or retailer as a component part of, or 
on or in connection with, another article. An article in transit at the 
first moment of the 15th day after the date of the determination is 
regarded as being held by the person to whom it was shipped, except that 
if title to the article does not pass until delivered to the person the 
article is deemed to be held by the shipper.
    (b) Overpayments described in section 6416(b)(2) of the Code--(1) 
Claims included. This paragraph applies only to claims for credit or 
refund of amounts paid as tax under chapter 32 of the Code that are 
determined to be overpayments by reason of section 6416(b)(2) of the 
Code (relating to tax payments in respect of certain uses, sales, or 
resales of a taxable article).
    (2) Supporting evidence required. No credit or refund of an 
overpayment to which this paragraph (b) applies shall be allowed unless 
the person who paid the tax submits with the claim a statement, 
supported by sufficient available evidence, asserting that:
    (i) The person neither included the tax in the price of the article 
with respect to which it was imposed nor collected the amount of the tax 
from a vendee, and identifying the nature of the evidence available to 
establish these facts, or
    (ii) The person repaid, or agreed to repay, the amount of the tax to 
the ultimate vendor of the article, or
    (iii) The person has secured, and will submit upon request of the 
appropriate ATF officer, the written consent of the ultimate vendor to 
the allowance of the credit or refund.
    (3) Ultimate vendor--General rule. The term ultimate vendor, as used 
in paragraph (b)(2) of this section, means the seller making the sale 
which gives rise to the overpayment or which last precedes the 
exportation or use which has given rise to the overpayment.
    (c) Overpayments not included. This section does not apply to any 
overpayment determined under section 6416(b)(1) of the Code (relating to 
price readjustments), section 6416(b)(3)(A) of the Code (relating to 
certain cases in which refund or credit is allowable to the manufacturer 
who uses, in the further manufacture of a second article, a taxable 
article purchased by the manufacturer taxpaid), or section 6416(b)(5) of 
the Code (relating to the return to the seller of certain installment 
accounts which the seller had previously sold). In this regard, see 
Secs. 53.173, 53.180, and 53.183.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-312, 56 
FR 31084, July 9, 1991]



Sec. 53.173  Price readjustments causing overpayments of manufacturers tax.

    In the case of any payment of tax under chapter 32 of the Code that 
is determined to be an overpayment by reason of a price readjustment 
within the meaning of section 6416(b)(1) of the Code and Sec. 53.174 or 
Sec. 53.175, the person who paid the tax may file a claim for refund of 
the overpayment or may claim credit for the overpayment on any return of 
tax under this subpart

[[Page 917]]

which the person subsequently files. Price readjustments may not be 
anticipated. However, if the readjustment has actually been made before 
the return is filed for the period in which the sale was made, the tax 
to be reported in respect of the sale may, at the election of the 
taxpayer, be based either:
    (a) On the price as so readjusted, or
    (b) On the original sale price and a credit or refund claimed in 
respect of the price readjustment.

A price readjustment will be deemed to have been made at the time when 
the amount of the readjustment has been refunded to the vendor or the 
vendor has been informed that the vendor's account has been credited 
with the amount. No interest shall be paid on any credit or refund 
allowed under this section. For provisions relating to the evidence 
required in support of a claim for credit or refund, see 27 CFR 70.123 
(Procedure and Administration), Sec. 53.172(a)(2) and Sec. 53.176. For 
provisions authorizing the taking of a credit in lieu of filing a claim 
for refund, see section 6416(d) of the Code and Sec. 53.185.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-312, 56 
FR 31084, July 9, 1991]



Sec. 53.174  Determination of price readjustments.

    (a) In general--(1) Rules of usual application--(i) Amount treated 
as overpayment. If the tax imposed by chapter 32 of the Code has been 
paid and thereafter the price of the article on which the tax was based 
is readjusted, that part of the tax which is proportionate to the part 
of the price which is repaid or credited to the purchaser is considered 
to be an overpayment. A readjustment of price to the purchaser may occur 
by reason of:
    (A) The return of the article,
    (B) The repossession of the article,
    (C) The return or repossession of the covering or container of the 
article, or
    (D) A bona fide discount, rebate, or allowance against the price at 
which the article was sold.
    (ii) Requirements of price readjustment. A price readjustment will 
not be deemed to have been made unless the person who paid the tax 
either:
    (A) Repays part or all of the purchase price in cash to the vendee,
    (B) Credits the vendee's account for part or all of the purchase 
price, or
    (C) Directly or indirectly reimburses a third party for part or all 
of the purchase price for the direct benefit of the vendee.

In addition, to be deemed a price readjustment, the payment or credit 
must be contractually or economically related to the taxable sale that 
the payment or credit purports to adjust. Thus, commissions or bonuses 
paid to a manufacturer's own agents or salesperson for selling the 
manufacturer's taxable products are not price readjustments for purposes 
of this section, since those commissions or bonuses are not paid or 
credited either to the manufacturer's vendee or to a third party for the 
vendee's benefit. On the other hand, a bonus paid by the manufacturer to 
a dealer's salesperson for negotiating the sale of a taxable article 
previously sold to the dealer by the manufacturer is considered to be a 
readjustment of the price on the original sale of the taxable article, 
regardless of whether the payment to the salesperson is made directly by 
the manufacturer or to the salesperson through the dealer. In such a 
case, the payment is related to the sale of a taxable article and is 
made for the benefit of the dealer because it is made to the dealer's 
salesperson to encourage the sale of a product owned by the dealer. 
Similarly, payments or credits made by a manufacturer to a vendee as 
reimbursement of interest expense incurred by the vendee in connection 
with a so-called ``free flooring'' arrangement for the purchase of 
taxable articles is a price readjustment, regardless of whether the 
payment or credit is made directly to the vendee or to the vendee's 
creditor on behalf of the vendee.
    (iii) Limitation on credit or refund. The credit or refund allowable 
by reason of a price readjustment in respect of the sale of a taxable 
article may not exceed an amount which bears the same ratio to the total 
tax originally due and payable on the article as the amount of the tax-
included readjustment bears to the original tax-included sale price of 
the article.
    (2) Rules of special application--(i) Constructive sale price. If, 
in the case of a taxable sale, the tax imposed by

[[Page 918]]

chapter 32 of the Code is based on a constructive sale price determined 
under any paragraph of section 4216(b) of the Code and Secs. 53.94-
53.97, as determined without reference to section 4218 of the Code, then 
any price readjustment made with respect to the sale may be taken into 
account under this section only to the extent that the price 
readjustment reduces the actual sale price of the article below the 
constructive sale price.

    Examples:

    (A) A manufacturer sells a taxable article at retail for $110 tax 
included. Under section 4216(b)(1) of the Code the constructive sale 
price (tax included) of the article is determined to be $93. Thereafter, 
the manufacturer grants an allowance of $10 to the purchaser, which 
reduces the actual selling price (tax included) to $100. Since the 
readjustment price exceeds the amount of the constructive sale price, 
this readjustment is not recognized as a price readjustment under this 
section.
    (B) Subsequently, the manufacturer extends to the purchaser an 
additional price allowance of $10, thereby reducing the actual sale 
price to $90. Since the actual sale price is now $3 less than the 
constructive sale price of $93, the manufacturer has overpaid by the 
amount of tax attributable to the $3. Assuming the tax rate involved is 
10 percent, and the prices involved are tax-included, the overpayment of 
tax would be $0.27, determined as follows:
[GRAPHIC] [TIFF OMITTED] TC05OC91.021

    (ii) Price determined under section 4223(b)(2) of the Code. If a 
manufacturer (within the meaning of section 4223(a) of the Code) to whom 
an article is sold or resold free of tax in accordance with the 
provisions of section 4221(a)(1) of the Code for use in further 
manufacture diverts the article to a taxable use or sells it in a 
taxable sale, and pursuant to the provisions of section 4223(b)(2) of 
the Code computes the tax liability in respect of the use or sale on the 
price for which the article was sold to the manufacturer or on the price 
at which the article was sold by the actual manufacturer, a reduction of 
the price on which the tax was based does not result in an overpayment 
within the meaning of section 6416(b)(1) of the Code of this section. 
Moreover, if a manufacturer purchases an article tax free and computes 
the tax in respect of a subsequent sale of the article pursuant to the 
provisions of section 4223(b)(2) of the Code, an overpayment does not 
arise by reason of readjustment of the price for which the article was 
sold by the manufacturer except where the readjustment results from the 
return or repossession of the article by the manufacturer, and all of 
the purchase price is refunded by the manufacturer. See, however, 
paragraph (b)(4) of this section as to repurchased articles.
    (b) Return of an article--(1) Price readjustment. If a taxable 
article is returned to the manufacturer who paid the tax imposed by 
Chapter 32 of the Code on the sale of the article, a price readjustment 
giving rise to an overpayment results:
    (i) If the article is returned before use, and all of the purchase 
price is repaid to the vendee or credited to the vendee's account, or
    (ii) If the article is returned under an express or implied warranty 
as to quality or service, and all or a part of the purchase price is 
repaid to the vendee or credited to the vendee's account, or
    (iii) If title is still in the seller, as, for example, in the case 
of certain installment sales contracts, and all or a part of the 
purchase price is repaid to the vendee or credited to the vendee's 
account.
    (2) Return of purchase price. For purposes of paragraph (b)(1) of 
this section, if all of the purchase price of an article has been 
returned to the vendee, except for an amount retained by the 
manufacturer pursuant to contract as reimbursement of expense incurred 
in connection with the sale (such as a handling or restocking charge), 
all of the purchase price is considered to have been returned to the 
vendee.

[[Page 919]]

    (3) Taxability of subsequent sale or use. If, under any of the 
conditions described in paragraph (b)(1) of this section, an article is 
returned to the manufacturer who paid the tax and all of the purchase 
price is returned to the vendee, the sale is considered to have been 
rescinded. Any subsequent sale or use of the article by the manufacturer 
will be considered to be an original sale or use of the article by the 
manufacturer which is subject to tax under Chapter 32 of the Code unless 
otherwise exempt. If under any such condition an article is returned to 
the manufacturer who paid the tax and only part of the purchase price is 
returned to the vendee, a subsequent sale of the article by the 
manufacturer will be subject to tax to the extent that the sale price 
exceeds the adjusted sale price of the first taxable sale.
    (4) Treatment of other transactions as repurchases. Except as 
provided in paragraph (b)(1) of this section, a price readjustment will 
not result when a taxable article is returned to the manufacturer who 
paid the tax on the sale of the article, even though all or a part of 
the purchase price is repaid to the vendee or credited to the vendee's 
account, since such a transaction will be considered to be a repurchase 
of the article by the manufacturer.
    (c) Repossession of an article. If a taxable article is repossessed 
by the manufacturer who paid the tax imposed by chapter 32 of the Code 
on the sale of the article, and all or a part of the purchase price is 
repaid to the vendee or credited to the vendee's account, a price 
readjustment giving rise to an overpayment will result. However, if the 
manufacturer later resells the repossessed article for a price in excess 
of the original adjusted sale price, the manufacturer will be liable for 
tax under chapter 32 of the Code to the extent that the resale price 
exceeds the original adjusted sale price.
    (d) Return or repossession of covering or container. If the covering 
or container of a taxable article is returned to, or repossessed by the 
manufacturer who paid the tax imposed by chapter 32 of the Code on the 
sale of the article, and all or a portion of the purchase price is 
repaid to the vendee or credited to the vendee's account by reason of 
the return or repossession of the covering or container, a price 
adjustment giving rise to an overpayment will result. If a taxable 
article is considered to have been repurchased, as provided in paragraph 
(b)(4) of this section, and the covering or container accompanies the 
taxable article as part of the transaction, the covering or container 
will also be considered to have been repurchased.
    (e) Bona fide discounts, rebates, or allowances--(1) In general. 
Except as provided in Sec. 53.175 (relating to readjustments in respect 
of local advertising), the basic consideration in determining, for 
purposes of this section, whether a bona fide discount, rebate, or 
allowance has been made is whether the price actually by, or charged 
against, the purchaser has in fact been reduced by subsequent 
transactions between the parties. Generally, the price will be 
considered to have been readjusted by reason of a bona fide discount, 
rebate, or allowance, only if the manufacturer who made the taxable sale 
repays a part of the purchase price in cash to the vendee, or credits 
the vendee's account, or directly or indirectly reimburses a third party 
for part or all of the purchase price for the direct benefit of the 
vendee, in consideration of factors which, if taken into account at the 
time of the original transaction, would have resulted at that time in a 
lower sale price. For example, a price readjustment will be considered 
to have been made when a bona fide discount, rebate, or allowance is 
given in consideration of such factors as prompt payment, quantity 
buying over a specified period, the vendee's inventory of an article 
when new models are introduced, or a general price reduction affecting 
articles held in stock by the vendee as of a certain date. On the other 
hand, repayments made to the vendee do not effectuate price 
readjustments if given in consideration of circumstances under which the 
vendee has incurred, or is required to incur, an expense which, if 
treated as a separate item in the original transaction, would have been 
incudable in the price of the article for purposes of computing the tax.

[[Page 920]]

    Examples. The provisions of paragraph (e)(1) of this section may be 
illustrated by the following examples:

    Example (1). B, a manufacturer of shotguns, bills its distributors 
in a specified amount per shotgun purchased by them. Thereafter, B 
issues to each distributor a credit memorandum in the amount of X 
dollars for each demonstration by the distributor of the shotguns at a 
sporting goods exhibition. The credit which B allows the distributor for 
demonstration of B's product does not effect a readjustment of price.
    Example (2). C, a manufacturer of firearms, bills its dealers in a 
specified amount per firearm purchased by them. Thereafter, C remits to 
the dealer X dollars of the original sale price for each firearm sold by 
the dealer. An additional amount of Y dollars is paid to the dealer upon 
a showing by the dealer that the dealer has paid Y dollars to the 
salesperson who made the sale. In this case, the X dollars paid to the 
dealer by C constitutes a bona fide discount, rebate, or allowance since 
payment of such amount is in the nature of a price reduction. In 
addition, the Y dollars paid to the dealer in reimbursement for the 
amount paid by the dealer to the salesperson who made the sale, also 
constitutes a bona fide discount, rebate, or allowance.

    (2) Inability to collect price. A charge-off of an amount 
outstanding in an open account, due to inability to collect, is not a 
bona fide discount, rebate, or allowance and does not, in and of itself, 
give rise to a price readjustment within the meaning of this section.
    (3) Loss or damage in transit. If title to an article has passed to 
the vendee, the subsequent loss, damage, or destruction of the article 
while in the possession of a carrier for delivery to the vendee does 
not, in and of itself, affect the price at which the article was sold. 
However, if the article was sold under a contract providing that, if the 
article was lost, damaged, or destroyed in transit, title would revert 
to the vendor and the vendor would reimburse the vendee in full for the 
sale price, then the original sale is considered to have been rescinded. 
The vendor is entitled to credit or refund of the tax paid upon 
reimbursement of the full tax-included sale price to the vendee.



Sec. 53.175  Readjustment for local advertising charges.

    (a) In general. If a manufacturer has paid the tax imposed by 
chapter 32 of the Code on the price of any article sold by the 
manufacturer and thereafter has repaid a portion of the price to the 
purchaser or any subsequent vendee in reimbursement of expenses for 
local advertising of the article or any other article sold by the 
manufacturer which is taxable at the same rate under the same section of 
chapter 32 of the Code, the reimbursement will be considered a price 
readjustment constituting an overpayment which the manufacturer may 
claim as a credit or refund. The amount of the reimbursement may not, 
however, exceed the limitation provided by section 4216(e)(2) of the 
Code and Sec. 53.101, determined as of the close of the calendar quarter 
in which the reimbursement is made or as of the close of any subsequent 
calendar quarter of the same calendar year in which it is made. The term 
``local advertising,'' as used in this section, has the same meaning as 
prescribed by section 4216(e)(4) of the Code and includes generally, 
advertising which is broadcast over a radio station or television 
station, or appears in a newspaper or magazine, or is displayed by means 
of an outdoor advertising sign or poster.
    (b) Local advertising charges excluded from taxable price in one 
year but repaid in following year--(1) Determination of price 
readjustments for year in which charge is repaid. If the tax imposed by 
chapter 32 of the Code was paid with respect to local advertising 
charges that were excluded in computing the taxable price of an article 
sold in any calendar year but are not repaid to the manufacturer's 
purchaser or any subsequent vendee before May 1 of the following 
calendar year, the subsequent repayment of those charges by the 
manufacturer in reimbursement of expenses for local advertising will be 
considered a price readjustment constituting an overpayment which the 
manufacturer may claim as a credit or refund. The amount of the 
reimbursement may not, however, exceed the limitation provided by 
section 4216(e)(2) of the Code and Sec. 53.101, determined as of the 
close of the calendar quarter in which the reimbursement is made or as 
of the close of any subsequent calendar quarter of the same calendar 
year in which it is made.

[[Page 921]]

    (2) Redetermination of price readjustments for year in which charge 
was made. If the tax imposed by chapter 32 of the Code was paid with 
respect to local advertising charges that were excluded in computing the 
taxable price of an article sold in any calendar year but are not repaid 
to the manufacturer's purchaser or any subsequent vendor before May 1 of 
the following calendar year, the manufacturer may make a 
redetermination, in respect of the calendar year in which the charge was 
made, of the price readjustments constituting an overpayment which the 
manufacturer may claim as a credit or refund. This redetermination may 
be made by excluding the local advertising charges made in the calendar 
year that became taxable as of May 1 of the following calendar year.



Sec. 53.176  Supporting evidence required in case of price readjustments.

    No credit or refund of an overpayment arising by reason of a price 
readjustment described in Sec. 53.174 or Sec. 53.175 shall be allowed 
unless the manufacturer who paid the tax submits a statement, supported 
by sufficient available evidence:
    (a) Describing the circumstances which gave rise to the price 
readjustment,
    (b) Identifying the article in respect of which the price 
readjustment was allowed,
    (c) Showing the price at which the article was sold, the amount of 
tax paid in respect of the article, and the date on which the tax was 
paid,
    (d) Giving the name and address of the purchaser to whom the article 
was sold, and
    (e) Showing the amount repaid to the purchaser or credited to the 
purchaser's account.



Sec. 53.177  Certain exportations, uses, sales, or resales causing overpayments of tax.

    In the case of any payment of tax under chapter 32 of the Code that 
is determined to be an overpayment by reason of certain exportations, 
uses, sales, or resales described in section 6416(b)(2) of the Code and 
Sec. 53.178, the person who paid the tax may file a claim for refund of 
the overpayment or, in the case of overpayments under chapter 32 of the 
Code, may claim credit for the overpayment on any return of tax under 
this subpart which the person subsequently files. However, under the 
circumstances described in section 6416(c) of the Code and Sec. 53.184, 
the overpayments under chapter 32 may be refunded to an exporter or 
shipper. No interest shall be paid on any credit or refund allowed under 
this section. For provisions relating to the evidence required in 
support of a claim for credit or refund under this section, see 27 CFR 
70.123 (Procedure and Administration) and 53.179. For provisions 
authorizing the taking of a credit in lieu of filing a claim for refund, 
see section 6416(d) of the Code and Sec. 53.185.



Sec. 53.178  Exportations, uses, sales, and resales included.

    (a) In general. The payment of tax imposed by chapter 32 of the Code 
on the sale of any article, will be considered to be an overpayment by 
reason of any exportation, use, sale, or resale described in any one of 
paragraphs (b) to (e), inclusive, of this section. This section applies 
only in those cases where the exportation, use, sale, or resale (or any 
combination thereof) referred to in any one or more of these paragraphs 
occurs before any other use. If any article is sold or resold for a use 
described in any one of these paragraphs and is not in fact so used, the 
paragraph is treated in all respects as inapplicable.
    (b) Exportation of tax-paid articles. A payment of tax under chapter 
32 of the Code on the sale of any article will be considered to be an 
overpayment under section 6416(b)(2)(A) of the Code if the article is by 
any person exported to a foreign country or shipped to a possession of 
the United States. It is immaterial for purposes of this paragraph, 
whether the person who made the taxable sale had knowledge at the time 
of the sale that the article was being purchased for export to a foreign 
country or shipment to a possession of the United States. See 
Sec. 53.184 for the circumstances under which a claim for refund by 
reason of the exportation of an article may be claimed by the exporter 
or shipper, rather than by the person who paid the tax. For definition 
of the

[[Page 922]]

term ``possession of the United States'', see Sec. 53.11.
    (c) Supplies for vessels or aircraft. A payment of tax under chapter 
32 of the Code on the sale of any article, will be considered to be an 
overpayment under section 6416(b)(2)(B) of the Code if the article is 
used by any person, or is sold by any person for use by the purchaser, 
as supplies for vessels or aircraft. The term ``supplies for vessels or 
aircraft'', as used in this paragraph, has the same meaning as when used 
in sections 4221(a)(3), 4221(d)(3), and 4221(e)(1) of the Code, and the 
regulations thereunder (Sec. 53.134(b)(1)).
    (d) Use by State or local government. A payment of tax under chapter 
32 of the Code on the sale of any article will be considered to be an 
overpayment under section 6416(b)(2)(C) of the Code if the article is 
sold by any person to a State, any political subdivision thereof, or the 
District of Columbia for the exclusive use of a State, any political 
subdivision thereof, or the District of Columbia. For provisions 
relating to tax-free sales to a State, any political subdivision 
thereof, or the District of Columbia, see section 4221(a)(4) of the Code 
and Sec. 53.131.
    (e) Use by nonprofit educational organization. A payment of tax 
under chapter 32 of the Code on the sale of any article will be 
considered to be an overpayment under section 6416(b)(2)(D) of the Code 
if the article is sold by any person to a nonprofit educational 
organization for its exclusive use. The term ``nonprofit educational 
organization'', as used in this paragraph (e), has the same meaning as 
when used in section 4221 (a)(5) or (d)(5) of the Code, whichever 
applies, and the regulations under Sec. 53.136.



Sec. 53.179  Supporting evidence required in case of manufacturers tax involving exportations, uses, sales, or resales.

    (a) Evidence to be submitted by claimant. No claim for credit or 
refund of an overpayment, within the meaning of section 6416(b)(2) of 
the Code and Sec. 53.178, of tax under chapter 32 of the Code shall be 
allowed unless the person who paid the tax submits with the claim the 
evidence required by Sec. 53.172(b)(2) and a statement, supported by 
sufficient available evidence:
    (1) Showing the amount claimed in respect of each category of 
exportations, uses, sales, or resales on which the claim is based and 
which give rise to a right of credit or refund under section 6416(b)(2) 
of the Code and Sec. 53.177,
    (2) Identifying the article, both as to nature and quantity, in 
respect of which credit or refund is claimed,
    (3) Showing the amount of tax paid in respect of the article or 
articles and the dates of payment, and
    (4) Indicating that the person claiming a credit or refund possesses 
evidence (as set forth in paragraph (b)(1) of this section) that the 
article has been exported, or has been used, sold, or resold in a manner 
or for a purpose which gives rise to an overpayment within the meaning 
of section 6416(b)(2) of the Code and Sec. 53.178.
    (b) Evidence required to be in possession of claimant--(1) Evidence 
required under paragraph (a)(4)--(i) In general. The evidence required 
to be retained by the person who paid the tax, as provided in paragraph 
(a)(4) of this section, must, in the case of an article exported, 
consist of proof of exportation in the form prescribed in Sec. 53.133 or 
must, in the case of other articles sold tax-paid by that person, 
consist of a certificate, executed and signed by the ultimate purchaser 
of the article, in the form prescribed in paragraph (b)(1)(ii) of this 
section. However, if the article to which the claim relates has passed 
through a chain of sales from the person who paid the tax to the 
ultimate purchaser, the evidence required to be retained by the person 
who paid the tax may consist of a certificate, executed and signed by 
the ultimate vendor of the article, in the form provided in paragraph 
(b)(1)(iii) of this section, rather than the proof of exportation itself 
or the certificate of the ultimate purchaser.
    (ii) Certificate of ultimate purchaser. (A) The certificate executed 
and signed by the ultimate purchaser of the article to which the claim 
relates must identify the article, both as to nature and quantity; show 
the address of the ultimate purchaser of the article, and the name and 
address of the ultimate vendor of the article; and describe the

[[Page 923]]

use actually made of the article in sufficient detail to establish that 
credit or refund is due, except that the use to be made of the article 
must be described in lieu of actual use if the claim is made by reason 
of the sale or resale of an article for a specified use which gives rise 
to the overpayment.
    (B) If the certificate sets forth the use to be made of any article, 
rather than its actual use, it must show that the ultimate purchaser has 
agreed to notify the claimant if the article is not in fact used as 
specified in the certificate.
    (C) The certificate must also contain a statement that the ultimate 
purchaser understands that the ultimate purchaser and any other party 
may, for fraudulent use of the certificate, be subject to all applicable 
criminal penalties under the Internal Revenue Code.
    (D) A purchase order will be acceptable in lieu of a separate 
certificate of the ultimate purchaser if it contains all the information 
required by this paragraph.
    (iii) Certificate of ultimate vendor. Any certificate executed and 
signed by an ultimate vendor as evidence to be retained by the person 
who paid the tax as provided in paragraph (a)(4) of this section may be 
executed with respect to any one or more overpayments by the person 
which arose under section 6416(b)(2) and Sec. 53.178 by reason of 
exportations, uses, sales or resales, occurring within any period of not 
more than 12 consecutive calendar quarters, the beginning and ending 
dates of which are specified in the certificate. A certificate 
supporting a claim for credit or refund under this section shall contain 
the following:
    (A) Name of ultimate vendor if other than person executing the 
certificate.
    (B) Statement that article(s) was purchased by the ultimate vendor 
tax-paid and was thereafter exported, used, sold, or resold.
    (C) Description of proof which supports exportation or certificate 
as to use executed by ultimate purchaser.
    (D) Statement that ultimate vendor retains such proof for 3 years 
from the date of the statement and will, upon request, supply such proof 
at any time within such 3 year period to the taxpayer to establish that 
credit or refund is due in respect of the article.
    (E) Statement that to the best knowledge and belief of the person 
executing the certificate, no statement in respect of the proof of 
exportation or certificate has previously been executed and that the 
person executing the certificate understands that any fraudulent use of 
the certificate may subject the person executing the certificate or any 
other party to all applicable criminal penalties under the Code.
    (F) Name, title, address and signature of person executing 
certificate and date signed.
    (G) Description of all articles covered by the certificate, with the 
corresponding vendor's invoice number, date of resale of article, 
quantity, whether articles were exported or used and the use made of 
article or to be made of article.
    (iv) ATF I 5600.33. ATF I 5600.33, Statement of Ultimate Vendor, is 
available from the Bureau's Distribution Center which, when completed, 
contains all necessary information for a properly executed certificate. 
Additional copies may be reproduced as needed.
    (2) Repayment or consent of ultimate vendor. If the person claiming 
credit or refund or an overpayment to which this section applies has 
repaid, or agreed to repay, the amount of the overpayment to the 
ultimate vendor or if the ultimate vendor consents to the allowance of 
the credit or refund, a statement to that effect, signed by the ultimate 
vendor, must be shown on, or made a part of, the supporting evidence 
required under this section to be retained by the person claiming the 
credit or refund. In this regard, see Sec. 53.172(b)(2).

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-380, 61 
FR 37007, July 16, 1996]



Sec. 53.180  Tax-paid articles used for further manufacture and causing overpayments of tax.

    In the case of any payment of tax under chapter 32 of the Code that 
is determined to be an overpayment under section 6416(b)(3) of the Code 
and

[[Page 924]]

Sec. 53.181 by reason of the sale of an article, directly or indirectly, 
by the manufacturer of the article to a subsequent manufacturer who uses 
the article in further manufacture of a second article or who sells the 
article with, or as a part of, the second article manufactured or 
produced by the subsequent manufacturer, the subsequent manufacturer may 
file claim for refund of the overpayment or may claim credit for the 
overpayment on any return of tax under this subpart subsequently filed. 
No interest shall be paid on any credit or refund allowed under this 
section. For provisions relating to the evidence required in support of 
a claim for credit or refund, see 27 CFR Sec. 70.123 (Procedure and 
Administration), 53.172 and 53.182. For provisions authorizing the 
taking of a credit in lieu of filing a claim for refund, see section 
6416(d) of the Code and Sec. 53.185.



Sec. 53.181  Further manufacture included.

    (a) In general. The payment of tax imposed by chapter 32 of the Code 
on the sale of any article by a manufacturer of the article will be 
considered to be an overpayment by reason of any use in further 
manufacture, or sale as part of a second manufactured article, described 
in paragraph (b) of this section. This section applies in those cases 
where the exportation, use, or sale (or any combination of those 
activities) referred to in this paragraph occurs before any other use.
    (b) Use of tax-paid articles in further manufacture described in 
section 6416(b)(3)(A) of the Code. A payment of tax under chapter 32 of 
the Code on the sale of any article, directly or indirectly, by the 
manufacturer of the article to a subsequent manufacturer will be 
considered to be an overpayment under section 6416(b)(3)(A) of the Code 
if the article is used by the subsequent manufacturer as material in the 
manufacture or production of, or as a component part of, a second 
article manufactured or produced by the subsequent manufacturer which is 
taxable under chapter 32 of the Code. For this purpose it is immaterial 
whether the second article is sold or otherwise disposed of, or if sold, 
whether the sale is a taxable sale. Any article to which this paragraph 
applies which would have been used in the manufacture or production of a 
second article, except for the fact that it was broken or rendered 
useless in the process of manufacturing or producing the second article, 
will be considered to have been used as a component part of the second 
article.

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-312, 56 
FR 31084, July 9, 1991]



Sec. 53.182  Supporting evidence required in case of tax-paid articles used for further manufacture.

    (a) Evidence to be submitted by claimant. No claim for credit or 
refund of an overpayment, within the meaning of section 6416(b)(3) of 
the Code and Sec. 53.181 shall be allowed unless the subsequent 
manufacturer submits with the claim the evidence required by Sec. 53.132 
and a statement, supported by sufficient available evidence:
    (1) Showing the amount claimed in respect of each category of 
exportations, uses, or sales on which the claim is based and which give 
rise to a right of credit or refund under section 6416(b)(3) of the Code 
and Sec. 53.180,
    (2) Showing the name and address of the manufacturer, producer, or 
importer of the article in respect of which credit or refund is claimed,
    (3) Identifying the article, both as to nature and quantity, in 
respect of which credit or refund is claimed,
    (4) Showing the amount of tax paid in respect of the article by the 
manufacturer or producer of the article and the date of payment.
    (5) Indicating that the article was used by the claimant as material 
in the manufacture or production of, or as a component part of, a second 
article manufactured or produced by the manufacturer or was sold on or 
in connection with, or with the sale of, a second article manufactured 
or produced by the manufacturer, and
    (6) Identifying the second article, both as to nature and quantity.
    (b) Evidence required to be in possession of claimant--(1) 
Certificate of ultimate purchaser of second article. The certificate 
executed and signed by the ultimate purchaser of the second article must 
contain the same information as that required in Sec. 53.179(b)(1)(ii), 
except

[[Page 925]]

that the information must be furnished in respect of the second article, 
rather than the article to which the claim relates.
    (2) Certificate of ultimate vendor of second article. Any 
certificate executed and signed by an ultimate vendor as evidence to be 
retained by the person claiming credit or refund must be executed in the 
same form and manner as that provided in Sec. 53.179(b)(2)(iii).
    (3) Repayment or consent of ultimate vendor. If the person claiming 
credit or refund of an overpayment to which this section applies has 
repaid, or agreed to repay, the amount of the overpayment to the 
ultimate vendor or if the ultimate vendor consents to the allowance of 
the credit or refund, a statement to that effect, signed by the ultimate 
vendor, must be shown on, or made a part of, the evidence required to be 
retained by the person claiming the credit or refund. In this regard, 
see Sec. 53.172(b)(2).

[T.D. ATF-308, 56 FR 303, Jan. 3, 1991, as amended by T.D. ATF-312, 56 
FR 31085, July 9, 1991]



Sec. 53.183  Return of installment accounts causing overpayments of tax.

    (a) In general. In the case of any payment of tax under section 
4216(d)(1) of the Code in respect of the sale of any installment account 
that is determined to be an overpayment under section 6416(b)(5) of the 
Code and paragraph (b) of this section upon return of the installment 
account, the person who paid the tax may file a claim for refund of the 
overpayment or may claim credit for the overpayment on any return of tax 
under this subpart which that person subsequently files. No interest 
shall be paid on any credit or refund allowed under this section. For 
provisions relating to the evidence required in support of a claim for 
credit or refund under this section, see 27 CFR 70.123 (Procedure and 
Administration) and paragraph (c) of this section. For provisions 
authorizing the taking of a credit in lieu of filing a claim for refund, 
see section 6416(d) of the Code and Sec. 53.185.
    (b) Overpayment of tax allocable to repaid consideration. The 
payment of tax imposed by section 4216(d)(1) of the Code on the sale of 
an installment account by the manufacturer will be considered to be an 
overpayment under section 6416(b)(5) of the Code to the extent of the 
tax allocable to any consideration repaid or credited to the purchaser 
of the installment account upon the return of the account to the 
manufacturer pursuant to the agreement under which the account 
originally was sold, if the readjustment of the consideration occurs 
pursuant to the provisions of the agreement. The tax allocable to the 
repaid or credited consideration is the amount which bears the same 
ratio to the total tax paid under section 4216(d)(1) of the Code with 
respect to the installment account as the amount of consideration repaid 
or credited to the purchaser bears to the total consideration for which 
the account was sold. This paragraph (b) does not apply where an 
installment account is originally sold pursuant to the order of, or 
subject to the approval of, a court of competent jurisdiction in a 
bankruptcy or insolvency proceeding.
    (c) Evidence to be submitted by claimant. No claim for credit or 
refund of an overpayment, within the meaning of section 6416(b)(5) of 
the Code and paragraph (b) of this section, of tax under section 
4216(d)(1) of the Code shall be allowed unless the person who paid the 
tax submits with the claim a statement, supported by sufficient 
available evidence, indicating:
    (1) The name and address of the person to whom the installment 
account was sold,
    (2) The amount of tax due under section 4216(d)(1) of the Code by 
reason of the sale of the installment account, the amount of the tax 
paid under section 4216(d)(1) with respect to the sale, and the date of 
payment,
    (3) The amount for which the installment account was sold,
    (4) The amount which was repaid or credited to the purchaser of the 
account by reason of the return of the account to the person claiming 
the credit or refund, and
    (5)(i) The fact that the amount repaid or credited to the purchaser 
of the account was so repaid or credited pursuant to the agreement under 
which the account was sold, and

[[Page 926]]

    (ii) The fact that the account was returned to the manufacturer 
pursuant to that agreement.



Sec. 53.184  Refund to exporter or shipper.

    (a) In general. Any payment of tax imposed by chapter 32 of the Code 
that is determined to be an overpayment within the meaning of section 
6416(b)(2)(A) of the Code and Secs. 53.178 and 53.179, by reason of the 
exportation of any article may be refunded to the exporter or shipper of 
the article pursuant to section 6416(c) of the Code, if:
    (1) The exporter or shipper files a claim for refund of the 
overpayment, and
    (2) The person who paid the tax waives the right to claim credit or 
refund of the tax.

No interest shall be paid on any refund allowed under this section. For 
provisions relating to the evidence required in support of a claim under 
this paragraph, see 27 CFR 70.123 (Procedure and Administration) and 
paragraph (b) of this section.
    (b) Supporting evidence required. No claim for refund of any 
overpayment of tax to which this section applies shall be allowed unless 
the exporter or shipper submits with that claim proof of exportation in 
the form prescribed by Sec. 53.133, and a statement, signed by the 
person who paid the tax, showing:
    (1) That the person who paid the tax waives the right to claim 
credit or refund of the tax, and
    (2) The amount of tax paid on the sale of the article and the date 
of payment.



Sec. 53.185  Credit on returns.

    Any person entitled to claim refund of any overpayment of tax 
imposed by chapter 32 of the Code may, in lieu of claiming refund of the 
overpayment, claim credit for the overpayment on any return of tax under 
this subpart subsequently filed. Any such credit claimed on a return 
must be supported by the evidence prescribed in the applicable 
regulations in this subpart and 27 CFR 70.123 (Procedure and 
Administration).



Sec. 53.186  Accounting procedures for like articles.

    (a) Identification of manufacturer. In applying section 6416 of the 
Code and the regulations thereunder, a person who has purchased like 
articles from various manufacturers may determine the particular 
manufacturer from whom that person purchased any one of those articles 
by a first-in, first-out (FIFO) method, by a last-in, first-out (LIFO) 
method, or by any other consistent method approved by the appropriate 
ATF officer. For the first year for which a person makes a determination 
under this section, the person may adopt any one of the following 
methods without securing prior approval by the appropriate ATF officer.
    (1) FIFO method.
    (2) LIFO method.
    (3) Any method by which the actual manufacturer of the article is in 
fact identified.
    (4) Any other method of determining the manufacturer of a particular 
article must be approved by the appropriate ATF officer before its 
adoption. After any method for identifying the manufacturer has been 
properly adopted, it may not be changed without first securing the 
consent of the appropriate ATF officer.
    (b) Determining amount of tax paid. In applying section 6416 and 
Secs. 53.171-53.186, if the identity of the manufacturer of any article 
has been determined by a person pursuant to a method prescribed in 
paragraph (a) of this section, that manufacturer of the article must 
determine the tax paid under Chapter 32 of the Code with respect to that 
article consistently with the method used in identifying the 
manufacturer.



Sec. 53.187  OMB control numbers.

    (a) Purpose. This section collects and displays the control numbers 
assigned to collections of information in this part by the Office of 
Management and Budget (OMB) under the Paperwork Reduction Act of 1980. 
ATF intends that this section comply with the requirements of 
Secs. 1320.12, 1320.13, and 1320.14 of 5 CFR part 1320 (OMB regulations 
implementing the Paperwork Reduction Act), for the display of control

[[Page 927]]

numbers assigned by OMB to collections of information in the regulations 
in this part.
    (b) Display.

------------------------------------------------------------------------
    27 CFR part 53 section number            OMB control number(s)
------------------------------------------------------------------------
Sec.  53.1..........................  1545-0723
Sec.  53.3..........................  1545-0685
Sec.  53.11.........................  1545-0723
Sec.  53.92.........................  1545-0023
Sec.  53.93.........................  1545-0023
Sec.  53.99.........................  1545-0023
Sec.  53.131........................  1545-0023
Sec.  53.132........................  1545-0023
Sec.  53.133........................  1545-0023
Sec.  53.134........................  1545-0023
Sec.  53.136........................  1545-0023
Sec.  53.140........................  1545-0023
Sec.  53.141........................  1545-0023
Sec.  53.142........................  1545-0023
Sec.  53.143........................  1545-0023
Sec.  53.151........................  1545-0023, 1545-0723
Sec.  53.152........................  1545-0723
Sec.  53.153........................  1545-0257, 1545-0723
Sec.  53.155........................  1545-0723
Sec.  53.157........................  1545-0257
Sec.  53.171........................  1545-0023, 1545-0723
Sec.  53.172........................  1545-0723
Sec.  53.173........................  1545-0723
Sec.  53.174........................  1545-0723
Sec.  53.175........................  1545-0723
Sec.  53.176........................  1545-0723
Sec.  53.177........................  1545-0723
Sec.  53.178........................  1545-0723
Sec.  53.179........................  1545-0723
Sec.  53.180........................  1545-0723
Sec.  53.181........................  1545-0723
Sec.  53.182........................  1545-0723
Sec.  53.183........................  1545-0723
Sec.  53.184........................  1545-0023, 1545-0723
Sec.  53.185........................  1545-0023, 1545-0723
Sec.  53.186........................  1545-0723
------------------------------------------------------------------------



PART 55--COMMERCE IN EXPLOSIVES--Table of Contents




                         Subpart A--Introduction

Sec.
55.1  Scope of regulations.
55.2  Relation to other provisions of law.

                         Subpart B--Definitions

55.11  Meaning of terms.

         Subpart C--Administrative and Miscellaneous Provisions

55.21  Forms prescribed.
55.22  Alternate methods or procedures; emergency variations from 
          requirements.
55.23  List of explosive materials.
55.24  Right of entry and examination.
55.25  Disclosure of information.
55.26  Prohibited shipment, transportation, receipt, possession, or 
          distribution of explosive materials.
55.27  Out-of-State disposition of explosive materials.
55.28  Stolen explosive materials.
55.29  Unlawful storage.
55.30  Reporting theft or loss of explosive materials.
55.31  Inspection of site of accidents or fires; right of entry.
55.32  Special explosive devices.

                     Subpart D--Licenses and Permits

55.41  General.
55.42  License fees.
55.43  Permit fees.
55.44  License or permit fee not refundable.
55.45  Original license or permit.
55.46  Renewal of license or permit.
55.47  Insufficient fee.
55.48  Abandoned application.
55.49  Issuance of license or permit.
55.50  Correction of error on license or permit.
55.51  Duration of license or permit.
55.52  Limitations on license or permit.
55.53  License and permit not transferable.
55.54  Change of address.
55.55  Change in class of explosive materials.
55.56  Change in trade name.
55.57  Change of control.
55.58  Continuing partnerships.
55.59  Right of succession by certain persons.
55.60  Certain continuances of business or operations.
55.61  Discontinuance of business or operations.
55.62  State or other law.
55.63  Explosives magazine changes.

                Subpart E--License and Permit Proceedings

55.71  Opportunity for compliance.
55.72  Denial of initial application.
55.73  Hearing after initial application is denied.
55.74  Denial of renewal application or revocation of license or permit.
55.75  Hearing after denial of renewal application or revocation of 
          license or permit.
55.76  Action by regional director (compliance).
55.77  Designated place of hearing.
55.78  Representation at a hearing.
55.79  Appeal on petition to the Director.
55.80  Court review.
55.81  Service on applicant, licensee, or permittee.
55.82  Provisions of part 200 made applicable.
55.83  Operations by licensees or permittees after notice of denial or 
          revocation.

              Subpart F--Conduct of Business or Operations

55.101  Posting of license or permit.
55.102  Authorized operations by permittees.

[[Page 928]]

55.103  Transactions among licensees/permittees.
55.104  Certified copy of license or permit.
55.105  Distributions to nonlicensees and nonpermittees.
55.106  Certain prohibited distributions.
55.107  Record of transactions.
55.108  Importation.
55.109  Identification of explosive materials.

                     Subpart G--Records and Reports

55.121  General.
55.122  Records maintained by licensed importers.
55.123  Records maintained by licensed manufacturers.
55.124  Records maintained by licensed dealers.
55.125  Records maintained by permittees.
55.126  Explosives transaction record.
55.127  Daily summary of magazine transactions.
55.128  Discontinuance of business.
55.129  Exportation.
55.130  [Reserved]

                          Subpart H--Exemptions

55.141  Exemptions.
55.142  Relief from disabilities incurred by indictment, information or 
          conviction.

     Subpart I--Unlawful Acts, Penalties, Seizures, and Forfeitures

55.161  Engaging in business without a license.
55.162  False statement or representation.
55.163  False entry in record.
55.164  Unlawful storage.
55.165  Failure to report theft or loss.
55.166  Seizure or forfeiture.

                Subpart J--Marking of Plastic Explosives

55.180  Prohibitions relating to unmarked plastic explosives.
55.181  Reporting of plastic explosives.
55.182  Exceptions.
55.183  Importations of plastic explosives on or after April 24, 1997.
55.184  Statements of process and samples.
55.185  Criminal sanctions.
55.186  Seizure or forfeiture.

                           Subpart K--Storage

55.201  General.
55.202  Classes of explosive materials.
55.203  Types of magazines.
55.204  Inspection of magazines.
55.205  Movement of explosive materials.
55.206  Location of magazines.
55.207  Construction of type 1 magazines.
55.208  Construction of type 2 magazines.
55.209  Construction of type 3 magazines.
55.210  Construction of type 4 magazines.
55.211  Construction of type 5 magazines.
55.212  Smoking and open flames.
55.213  Quantity and storage restrictions.
55.214  Storage within types 1, 2, 3, and 4 magazines.
55.215  Housekeeping.
55.216  Repair of magazines.
55.217  Lighting.
55.218  Table of distances for storage of explosive materials.
55.219  Table of distances for storage of low explosives.
55.220  Table of separation distances of ammonium nitrate and blasting 
          agents from explosives or blasting agents.
55.221  Requirements for display fireworks, pyrotechnic compositions, 
          and explosive materials used in assembling fireworks or 
          articles pyrotechnic.
55.222  Table of distances between fireworks process buildings and 
          between fireworks process and fireworks nonprocess buildings.
55.223  Table of distances between fireworks process buildings and other 
          specified areas.
55.224  Table of distances for the storage of display fireworks (except 
          bulk salutes).

    Authority: 18 U.S.C. 847.

    Source: T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, unless otherwise 
noted.

    Editorial Note: Nomenclature changes to part 55 appear by T.D. ATF-
463, 66 FR 42734, Aug. 15, 2001.



                         Subpart A--Introduction



Sec. 55.1  Scope of regulations.

    (a) In general. The regulations contained in this part relate to 
commerce in explosives and implement Title XI, Regulation of Explosives 
(18 U.S.C. Chapter 40; 84 Stat. 952), of the Organized Crime Control Act 
of 1970 (84 Stat. 922), Public Law 103-322 (108 Stat. 1796), and Public 
Law 104-132 (110 Stat. 1214).
    (b) Procedural and substantive requirements. This part contains the 
procedural and substantive requirements relative to:
    (1) The interstate or foreign commerce in explosive materials;
    (2) The licensing of manufacturers and importers of, and dealers in, 
explosive materials;
    (3) The issuance of user permits;
    (4) The conduct of business by licensees and operations by 
permittees;
    (5) The storage of explosive materials;

[[Page 929]]

    (6) The records and reports required of licensees and permittees;
    (7) Relief from disabilities under this part;
    (8) Exemptions, unlawful acts, penalties, seizures, and forfeitures; 
and
    (9) The marking of plastic explosives.

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-363, 60 
FR 17449, Apr. 6, 1995; T.D. ATF-387, 62 FR 8376, Feb. 25, 1997]



Sec. 55.2  Relation to other provisions of law.

    The provisions in this part are in addition to, and are not in lieu 
of, any other provision of law, or regulations, respecting commerce in 
explosive materials. For regulations applicable to commerce in firearms 
and ammunition, see Part 178 of this chapter. For regulations applicable 
to traffic in machine guns, destructive devices, and certain other 
firearms, see Part 179 of this chapter. For statutes applicable to the 
registration and licensing of persons engaged in the business of 
manufacturing, importing or exporting arms, ammunition, or implements of 
war, see section 38 of the Arms Export Control Act (22 U.S.C. 2778), and 
regulations of Part 47 of this chapter and in Parts 121 through 128 of 
Title 22, Code of Federal Regulations. For statutes applicable to 
nonmailable materials, see 18 U.S.C. 1716 and implementing regulations. 
For statutes applicable to water quality standards, see 33 U.S.C. 1341.



                         Subpart B--Definitions



Sec. 55.11  Meaning of terms.

    When used in this part, terms are defined as follows in this 
section. Words in the plural form include the singular, and vice versa, 
and words indicating the masculine gender include the feminine. The 
terms ``includes'' and ``including'' do not exclude other things not 
named which are in the same general class or are otherwise within the 
scope of the term defined.
    Act. 18 U.S.C. Chapter 40.
    Ammunition. Small arms ammunition or cartridge cases, primers, 
bullets, or smokeless propellants designed for use in small arms, 
including percussion caps, and 3/32 inch and other external burning 
pyrotechnic hobby fuses. The term does not include black powder.
    Approved storage facility. A place where explosive materials are 
stored, consisting of one or more approved magazines, conforming to the 
requirements of this part and covered by a license or permit issued 
under this part.
    Articles pyrotechnic. Pyrotechnic devices for professional use 
similar to consumer fireworks in chemical composition and construction 
but not intended for consumer use. Such articles meeting the weight 
limits for consumer fireworks but not labeled as such and classified by 
U.S. Department of Transportation regulations in 49 CFR 172.101 as 
UN0431 or UN0432.
    Artificial barricade. An artificial mound or revetted wall of earth 
of a minimum thickness of three feet, or any other approved barricade 
that offers equivalent protection.
    ATF officer. An officer or employee of the Bureau of Alcohol, 
Tobacco and Firearms (ATF) authorized to perform any function relating 
to the administration or enforcement of this part.
    Authority having jurisdiction for fire safety. The fire department 
having jurisdiction over sites where explosives are manufactured or 
stored.
    Barricaded. The effective screening of a magazine containing 
explosive materials from another magazine, a building, a railway, or a 
highway, either by a natural barricade or by a artificial barricade. To 
be properly barricaded, a straight line from the top of any sidewall of 
the magazine containing explosive materials to the eave line of any 
other magazine or building, or to a point 12 feet above the center of a 
railway or highway, will pass through the natural or artificial 
barricade.
    Blasting agent. Any material or mixture, consisting of fuel and 
oxidizer, that is intended for blasting and not otherwise defined as an 
explosive; if the finished product, as mixed for use or shipment, cannot 
be detonated by means of a number 8 test blasting cap when unconfined. A 
number 8 test blasting cap is one containing 2 grams of a mixture of 80 
percent mercury fulminate and 20 percent potassium chlorate, or a 
blasting cap of equivalent strength. An equivalent strength cap 
comprises 0.40-0.45 grams of PETN base

[[Page 930]]

charge pressed in an aluminum shell with bottom thickness not to exceed 
to 0.03 of an inch, to a specific gravity of not less than 1.4 g/cc., 
and primed with standard weights of primer depending on the 
manufacturer.
    Bulk salutes. Salute components prior to final assembly into aerial 
shells, and finished salute shells held separately prior to being packed 
with other types of display fireworks.
    Bullet-sensitive explosive materials. Explosive materials that can 
be exploded by 150-grain M2 ball ammunition having a nominal muzzle 
velocity of 2700 fps (824 mps) when fired from a .30 caliber rifle at a 
distance of 100 ft (30.5 m), measured perpendicular. The test material 
is at a temperature of 70 to 75 degrees F (21 to 24 degrees C) and is 
placed against a \1/2\ inch (12.4 mm) steel backing plate.
    Bureau. The Bureau of Alcohol, Tobacco and Firearms, Department of 
the Treasury, Washington, DC.
    Business premises. When used with respect to a manufacturer, 
importer, or dealer, the property on which explosive materials are 
manufactured, imported, stored or distributed. The premises include the 
property where the records of a manufacturer, importer, or dealer are 
kept if different than the premises where explosive materials are 
manufactured, imported, stored or distributed. When used with respect to 
a user of explosive materials, the property on which the explosive 
materials are received or stored. The premises includes the property 
where the records of the users are kept if different than the premises 
where explosive materials are received or stored.
    Chief, Firearms and Explosives Licensing Center. The ATF official 
responsible for the issuance and renewal of licenses and permits under 
this part.
    Consumer fireworks. Any small firework device designed to produce 
visible effects by combustion and which must comply with the 
construction, chemical composition, and labeling regulations of the U.S. 
Consumer Product Safety Commission, as set forth in title 16, Code of 
Federal Regulations, parts 1500 and 1507. Some small devices designed to 
produce audible effects are included, such as whistling devices, ground 
devices containing 50 mg or less of explosive materials, and aerial 
devices containing 130 mg or less of explosive materials. Consumer 
fireworks are classified as fireworks UN0336, and UN0337 by the U.S. 
Department of Transportation at 49 CFR 172.101. This term does not 
include fused setpieces containing components which together exceed 50 
mg of salute powder.
    Crime punishable by imprisonment for a term exceeding one year. Any 
offense for which the maximum penalty, whether or not imposed, is 
capital punishment or imprisonment in excess of one year. The term does 
not include (a) any Federal or State offenses pertaining to antitrust 
violations, unfair trade practices, restraints of trade, or (b) any 
State offense (other than one involving a firearm or explosive) 
classified by the laws of the State as a misdemeanor and punishable by a 
term of imprisonment of two years or less.
    Customs officer. Any officer of the Customs Service or any 
commissioned, warrant, or petty officer of the Coast Guard, or any agent 
or other person authorized to perform the duties of an officer of the 
Customs Service.
    Dealer. Any person engaged in the business of distributing explosive 
materials at wholesale or retail.
    Detonator. Any device containing a detonating charge that is used 
for initiating detonation in an explosive. The term includes, but is not 
limited to, electric blasting caps of instantaneous and delay types, 
blasting caps for use with safety fuses, detonating-cord delay 
connectors, and nonelectric instantaneous and delay blasting caps.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, 
Department of the Treasury, Washington, DC.
    Display fireworks. Large fireworks designed primarily to produce 
visible or audible effects by combustion, deflagration, or detonation. 
This term includes, but is not limited to, salutes containing more than 
2 grains (130 mg) of explosive materials, aerial shells containing more 
than 40 grams of pyrotechnic compositions, and other display pieces 
which exceed the limits of explosive materials for classification as 
``consumer fireworks.'' Display fireworks are classified as fireworks 
UN0333, UN0334 or UN0335 by the U.S. Department of Transportation at 49

[[Page 931]]

CFR 172.101. This term also includes fused setpieces containing 
components which together exceed 50 mg of salute powder.
    Distribute. To sell, issue, give, transfer, or otherwise dispose of. 
The term does not include a mere change of possession from a person to 
his agent or employee in connection with the agency or employment.
    Executed under penalties of perjury. Signed with the required 
declaration under the penalties of perjury as provided on or with 
respect to the return, form, or other document or, where no form of 
declaration is required, with the declaration:

    ``I declare under the penalties of perjury that this--(insert type 
of document, such as, statement, application, request, certificate), 
including the documents submitted in support thereof, has been examined 
by me and, to the best of my knowledge and belief, is true, correct, and 
complete''.

    Explosive actuated device. Any tool or special mechanized device 
which is actuated by explosives, but not a propellent actuated device.
    Explosive materials. Explosives, blasting agents, water gels and 
detonators. Explosive materials include, but are not limited to, all 
items in the ``List of Explosive Materials'' provided for in Sec. 55.23.
    Explosives. Any chemical compound, mixture, or device, the primary 
or common purpose of which is to function by explosion. The term 
includes, but is not limited to, dynamite and other high explosives, 
black powder, pellet powder, initiating explosives, detonators, safety 
fuses, squibs, detonating cord, igniter cord, and igniters.
    Fireworks. Any composition or device designed to produce a visible 
or an audible effect by combustion, deflagration, or detonation, and 
which meets the definition of ``consumer fireworks'' or ``display 
fireworks'' as defined by this section.
    Fireworks mixing building. Any building or area used for mixing and 
blending pyrotechnic compositions except wet sparkler mix.
    Fireworks nonprocess building. Any office building or other building 
or area in a fireworks plant where no fireworks, pyrotechnic 
compositions or explosive materials are processed or stored.
    Fireworks plant. All land and buildings thereon used for or in 
connection with the assembly or processing of fireworks, including 
warehouses used with or in connection with fireworks plant operations.
    Fireworks plant warehouse. Any building or structure used 
exclusively for the storage of materials which are neither explosive 
materials nor pyrotechnic compositions used to manufacture or assemble 
fireworks.
    Fireworks process building. Any mixing building; any building in 
which pyrotechnic compositions or explosive materials is pressed or 
otherwise prepared for finished and assembly; or any finishing or 
assembly building.
    Fireworks shipping building. A building used for the packing of 
assorted display fireworks into shipping cartons for individual public 
displays and for the loading of packaged displays for shipment to 
purchasers.
    Flash powder. An explosive material intended to produce an audible 
report and a flash of light when ignited which includes but is not 
limited to oxidizers such as potassium chlorate or potassium 
perchlorate, and fuels such as sulfur or aluminum powder.
    Fugitive from justice. Any person who has fled from the jurisdiction 
of any court of record to avoid prosecution for any crime or to avoid 
giving testimony in any criminal proceeding. The term also includes any 
person who has been convicted of any crime and has fled to avoid 
imprisonment.
    Hardwood. Oak, maple, ash, hickory, or other hard wood, free from 
loose knots, spaces, or similar defects.
    Highway. Any public street, public alley, or public road, including 
a privately financed, constructed, or maintained road that is regularly 
and openly traveled by the general public.
    Importer. Any person engaged in the business of importing or 
bringing explosive materials into the United States for purposes of sale 
or distribution.
    Indictment. Includes an indictment or information in any court under 
which a crime punishable by imprisonment for a term exceeding one year 
may be prosecuted.

[[Page 932]]

    Inhabited building. Any building regularly occupied in whole or in 
part as a habitation for human beings, or any church, schoolhouse, 
railroad station, store, or other structure where people are accustomed 
to assemble, except any building occupied in connection with the 
manufacture, transportation, storage, or use of explosive materials.
    Interstate or foreign commerce. Commerce between any place in a 
State and any place outside of that State, or within any possession of 
the United States or the District of Columbia, and commerce between 
places within the same State but through any place outside of that 
State.
    Licensed dealer. A dealer licensed under this part.
    Licensed importer. An importer licensed under this part.
    Licensed manufacturer. A manufacturer licensed under this part to 
engage in the business of manufacturing explosive materials for purposes 
of sale or distribution or for his own use.
    Licensee. Any importer, manufacturer, or dealer licensed under this 
part.
    Magazine. Any building or structure, other than an explosives 
manufacturing building, used for storage of explosive materials.
    Manufacturer. Any person engaged in the business of manufacturing 
explosive materials for purposes of sale or distribution or for his own 
use.
    Mass detonation (mass explosion). Explosive materials mass detonate 
(mass explode) when a unit or any part of a larger quantity of explosive 
material explodes and causes all or a substantial part of the remaining 
material to detonate or explode.
    Natural barricade. Natural features of the ground, such as hills, or 
timber of sufficient density that the surrounding exposures which 
require protection cannot be seen from the magazine when the trees are 
bare of leaves.
    Number 8 test blasting cap. (See definition of ``blasting agent.'')
    Permittee. Any user of explosives for lawful purpose, who has 
obtained a user permit under this part.
    Person. Any individual, corporation, company, association, firm, 
partnership, society, or joint stock company.
    Plywood. Exterior, construction grade (laminated wood) plywood.
    Propellant actuated device. Any tool or special mechanized device or 
gas generator system which is actuated by a propellant or which releases 
and directs work through a propellant charge.
    Pyrotechnic compositions. A chemical mixture which, upon burning and 
without explosion, produces visible, brilliant displays, bright lights, 
or sounds.
    Railway. Any steam, electric, or other railroad or railway which 
carries passengers for hire.
    Region. A geographical region of the Bureau of Alcohol, Tobacco and 
Firearms.
    Regional director (compliance). The principal regional official 
responsible for administering regulations in this part.
    Salute. An aerial shell, classified as a display firework, that 
contains a charge of flash powder and is designed to produce a flash of 
light and a loud report as the pyrotechnic effect.
    Screen barricade. Any barrier that will contain the embers and 
debris from a fire or deflagration in a process building, thus 
preventing propagation of fire to other buildings or areas. Such 
barriers shall be constructed of metal roofing, \1/4\ to \1/2\ inch (6 
to 13 mm) mesh screen, or equivalent material. The barrier extends from 
floor level to a height such that a straight line from the top of any 
side wall of the donor building to the eave line of any exposed building 
intercepts the screen at a point not less than 5 feet (1.5 m) from the 
top of the screen. The top 5 feet (1.5 m) of the screen is inclined 
towards the donor building at an angle of 30 to 45 degrees.
    Softwood. Fir, pine, or other soft wood, free from loose knots, 
spaces, or similar defects.
    State. A State of the United States. The term includes the District 
of Columbia, the Commonwealth of Puerto Rico, and the possessions of the 
United States.
    State of residence. The State in which an individual regularly 
resides or maintains his home. Temporary stay in a State does not make 
the State of temporary stay the State of residence.
    Theatrical flash powder. Flash powder commercially manufactured in

[[Page 933]]

premeasured kits not exceeding 1 ounce and mixed immediately prior to 
use and intended for use in theatrical shows, stage plays, band 
concerts, magic acts, thrill shows, and clown acts in circuses.
    U.S.C. The United States Code.
    User-limited permit. A user permit valid only for a single purchase 
transaction, a new permit being required for a subsequent purchase 
transaction.
    User permit. A permit issued to a person authorizing him (a) to 
acquire for his own use explosive materials from a licensee in a State 
other than the State in which he resides or from a foreign country, and 
(b) to transport explosive materials in interstate or foreign commerce.
    Water gels. Explosives or blasting agents that contain a substantial 
proportion of water.

(18 U.S.C. 847 (84 Stat. 959); 18 U.S.C. 926 (82 Stat. 1226)

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-92, 46 
FR 46916, Sept. 23, 1981; T.D. ATF-200, 50 FR 10497, Mar. 15, 1985; T.D. 
ATF-290, 54 FR 53053, Dec. 27, 1989; T.D. ATF-293, 55 FR 3720, Feb. 5, 
1990; T.D. ATF-314, 56 FR 49140, Sept. 27, 1991; T.D. ATF-382, 61 FR 
38084, July 23, 1996; T.D. ATF-400, 63 FR 45001, Aug. 24, 1998; T.D. 
ATF-446, 66 FR 16602, Mar. 27, 2001]



         Subpart C--Administrative and Miscellaneous Provisions



Sec. 55.21  Forms prescribed.

    (a) The Director is authorized to prescribe all forms required by 
this part. All of the information called for in each form shall be 
furnished as indicated by the headings on the form and the instructions 
on or pertaining to the form. In addition, information called for in 
each form shall be furnished as required by this part.
    (b) Requests for forms should be mailed to the ATF Distribution 
Center, 7943 Angus Court, Springfield, Virginia 22153.

[T.D. ATF-92, 46 FR 46916, Sept. 23, 1981, as amended by T.D. ATF-249, 
52 FR 5961, Feb. 27, 1987; T.D. 372, 61 FR 20724, May 8, 1996]



Sec. 55.22  Alternate methods or procedures; emergency variations from requirements.

    (a) Alternate methods or procedures. The permittee or licensee, on 
specific approval by the Director as provided by this paragraph, may use 
an alternate method or procedure in lieu of a method or procedure 
specifically prescribed in this part. The Director may approve an 
alternate method or procedure, subject to stated conditions, when he 
finds that:
    (1) Good cause is shown for the use of the alternate method or 
procedure;
    (2) The alternate method or procedure is within the purpose of, and 
consistent with the effect intended by, the specifically prescribed 
method or procedure and that the alternate method or procedure is 
substantially equivalent to that specifically prescribed method or 
procedure; and
    (3) The alternate method or procedure will not be contrary to any 
provision of law and will not result in an increase in cost to the 
Government or hinder the effective administration of this part.

Where the permittee or licensee desires to employ an alternate method or 
procedure, he shall submit a written application to the regional 
director (compliance), for transmittal to the Director. The application 
shall specifically describe the proposed alternate method or procedure 
and shall set forth the reasons for it. Alternate methods or procedures 
may not be employed until the application is approved by the Director. 
The permittee or licensee shall, during the period of authorization of 
an alternate method or procedure, comply with the terms of the approved 
application. Authorization of any alternate method or procedure may be 
withdrawn whenever, in the judgment of the Director, the effective 
administration of this part is hindered by the continuation of the 
authorization. As used in this paragraph, alternate methods or 
procedures include alternate construction or equipment.
    (b) Emergency variations from requirements. The Director may approve 
construction, equipment, and methods of operation other than as 
specified in

[[Page 934]]

this part, where he finds that an emergency exists and the proposed 
variations from the specified requirements are necessary and the 
proposed variations:
    (1) Will afford security and protection that are substantially 
equivalent to those prescribed in this part;
    (2) Will not hinder the effective administration of this part; and
    (3) Will not be contrary to any provisions of law.

Variations from requirements granted under this paragraph are 
conditioned on compliance with the procedures, conditions, and 
limitations set forth in the approval of the application. Failure to 
comply in good faith with the procedures, conditions, and limitations 
shall automatically terminate the authority for the variations and the 
licensee or permittee shall fully comply with the prescribed 
requirements of regulations from which the variations were authorized. 
Authority for any variation may be withdrawn whenever, in the judgment 
of the Director, the effective administration of this part is hindered 
by the continuation of the variation. Where the licensee or permittee 
desires to employ an emergency variation, he shall submit a written 
application to the regional director (compliance) for transmittal to the 
Director. The application shall describe the proposed variation and set 
forth the reasons for it. Variations may not be employed until the 
application is approved, except when the emergency requires immediate 
action to correct a situation that is threatening to life or property. 
Corrective action may then be taken concurrent with the filing of the 
application and notification of the Director via telephone.
    (c) Retention of approved variations. The licensee or permittee 
shall retain, as part of his records available for examination by ATF 
officers, any application approved by the Director under this section.



Sec. 55.23  List of explosive materials.

    The Director shall compile a list of explosive materials, which 
shall be published and revised at least annually in the Federal 
Register. The ``List of Explosive Materials'' (ATF Publication 5400.8) 
is available at no cost upon request from the ATF Distribution Center, 
7943 Angus Court, Springfield, Virginia 22153.

[T.D. ATF-290, 54 FR 53054, Dec. 27, 1989, as amended by T.D. ATF-446, 
66 FR 16602, Mar. 27, 2001]



Sec. 55.24  Right of entry and examination.

    Any ATF officer may enter during business hours the premises, 
including places of storage, of any licensee or permittee for the 
purpose of inspecting or examining any records or documents required to 
be kept under this part, and any explosive materials kept or stored at 
the premises.



Sec. 55.25  Disclosure of information.

    Upon receipt of written request from any State or any political 
subdivision of a State, the regional director (compliance) may make 
available to the State or politicial subdivision any information which 
the regional director (compliance) may obtain under the Act with respect 
to the identification of persons within the State or political 
subdivision, who have purchased or received explosive materials, 
together with a description of the explosive materials.



Sec. 55.26  Prohibited shipment, transportation, receipt, possession, or distribution of explosive materials.

    (a) No person, other than a licensee or permittee, shall transport, 
ship, cause to be transported, or receive in interstate or foreign 
commerce any explosive materials. This paragraph does not apply to:
    (1) The transportation, shipment, or receipt of explosive materials 
by a nonlicensed person or nonpermittee who lawfully purchases explosive 
materials from a licensee in a State contiguous to the purchaser's State 
of residence if, (i) the purchaser's State of residence has enacted 
legislation, currently in force, specifically authorizing a resident of 
that State to purchase explosive materials in a contiguous State, (ii) 
the provisions of Sec. 55.105(c) are fully complied with, and (iii) the 
purchaser is not otherwise prohibited under paragraph (b) of this 
section from shipping or transporting explosive materials in

[[Page 935]]

interstate or foreign commerce or receiving explosive materials which 
have been shipped or transported in interstate or foreign commerce; or
    (2) The lawful purchase by a nonlicensee or nonpermittee of 
commercially manufactured black powder in quantities not to exceed 50 
pounds, if the black powder is intended to be used solely for sporting, 
recreational, or cultural purposes in antique firearms as defined in 18 
U.S.C. 921(a)(16), or in antique devices as exempted from the term 
``destructive device'' in 18 U.S.C. 921(a)(4).
    (b) No person may ship or transport any explosive material in 
interstate or foreign commerce or receive or possess any explosive 
materials which have been shipped or transported in interstate or 
foreign commerce who:
    (1) Is under indictment or information for, or who has been 
convicted in any court of, a crime punishable by imprisonment for a term 
exceeding one year,
    (2) Is a fugitive from justice,
    (3) Is an unlawful user of or addicted to marijuana, or any 
depressant or stimulant drug, or narcotic drug (as these terms are 
defined in the Controlled Substances Act; 21 U.S.C. 802), or
    (4) Has been adjudicated as a mental defective or has been committed 
to a mental institution.
    (c) No person shall knowingly distribute explosive materials to any 
individual who:
    (1) Is under twenty-one years of age,
    (2) Is under indictment or information for, or who has been 
convicted in any court of, a crime punishable by imprisonment for a term 
exceeding one year,
    (3) Is a fugitive from justice,
    (4) Is an unlawful user of or addicted to marijuana, or any 
depressant or stimulant drug, or narcotic drug (as these terms are 
defined in the Controlled Substances Act; 21 U.S.C. 802), or
    (5) Has been adjudicated as a mental defective or has been committed 
to a mental institution.
    (d) See Sec. 55.180 for regulations concerning the prohibited 
manufacture, importation, exportation, shipment, transportation, 
receipt, transfer, or possession of plastic explosives that do not 
contain a detection agent.

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-293, 55 
FR 3721, Feb. 5, 1990; T.D. ATF-363, 60 FR 17449, Apr. 6, 1995; T.D. 
ATF-387, 62 FR 8376, Feb. 25, 1997]



Sec. 55.27  Out-of-State disposition of explosive materials.

    No nonlicensee or nonpermittee shall distribute any explosive 
materials to any other nonlicensee or nonpermittee who the distributor 
knows or has reasonable cause to believe does not reside in the State in 
which the distributor resides.



Sec. 55.28  Stolen explosive materials.

    No person shall receive, conceal, transport, ship, store, barter, 
sell, or dispose of any stolen explosive materials knowing or having 
reasonable cause to believe that the explosive materials were stolen.



Sec. 55.29  Unlawful storage.

    No person shall store any explosive materials in a manner not in 
conformity with this part.



Sec. 55.30  Reporting theft or loss of explosive materials.

    (a) Any licensee or permittee who has knowledge of the theft or loss 
of any explosive materials from his stock shall, within 24 hours of 
discovery, report the theft or loss by telephoning 1-800-800-3855 
(nationwide toll free number) and on ATF F 5400.5 (formerly Form 4712) 
in accordance with the instructions on the form. Theft or loss of any 
explosive materials shall also be reported to appropriate local 
authorities.
    (b) Any other person, except a carrier of explosive materials, who 
has knowledge of the theft or loss of any explosive materials from his 
stock shall, within 24 hours of discovery, report the theft or loss by 
telephoning 1-800-800-3855 (nationwide toll free number) and in writing 
to the nearest ATF office. Theft or loss shall be reported to 
appropriate local authorities.
    (c) Reports of theft or loss of explosive materials under paragraphs 
(a) and (b) of this section must include the following information, if 
known:
    (1) The manufacturer or brand name.

[[Page 936]]

    (2) The manufacturer's marks of identification (date and shift 
code).
    (3) Quantity (applicable quantity units, such as pounds of 
explosives, number of detonators, etc.).
    (4) Description (dynamite, blasting agents, detonators, etc.) and 
United Nations (UN) identification number, hazard division number, and 
classification letter, e.g., 1.1D, as classified by the U.S. Department 
of Transportation at 49 CFR 172.101 and 173.52.
    (5) Size (length and diameter).
    (d) A carrier of explosive materials who has knowledge of the theft 
or loss of any explosive materials shall, within 24 hours of discovery, 
report the theft or loss by telephoning 1-800-800-3855 (nationwide toll 
free number). Theft or loss shall also be reported to appropriate local 
authorities. Reports of theft or loss of explosive materials by carriers 
shall include the following information, if known:
    (1) The manufacturer or brand name.
    (2) Quantity (applicable quantity units, such as pounds of 
explosives, number of detonators, etc.).
    (3) Description (United Nations (UN) identification number, hazard 
division number, and classification letter, e.g., 1.1D) as classified by 
the U.S. Department of Transportation at 49 CFR 172.101 and 173.52.

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-400, 63 
FR 45002, Aug. 24, 1998]



Sec. 55.31  Inspection of site accidents or fires; right of entry.

    Any ATF officer may inspect the site of any accident or fire in 
which there is reason to believe that explosive materials were involved. 
Any ATF officer may enter into or upon any property where explosive 
materials have been used, are suspected of having been used, or have 
been found in an otherwise unauthorized location.



Sec. 55.32  Special explosive devices.

    The Director may exempt certain explosive actuated devices, 
explosive actuated tools, or similar devices from the requirements of 
this part. A person who desires to obtain an exemption under this 
section for any special explosive device, which as designed does not 
constitute a public safety or security hazard, shall submit a written 
request to the Director. Each request shall be executed under the 
penalties of perjury and contain a complete and accurate description of 
the device, the name and address of the manufacturer or importer, the 
purpose of and use for which it is intended, and any photographs, 
diagrams, or drawings as may be necessary to enable the Director to make 
a determination. The Director may require that a sample of the device be 
submitted for examination and evaluation. If it is not possible to 
submit the device, the person requesting the exemption shall advise the 
Director and designate the place where the device will be available for 
examination and evaluation.



                     Subpart D--Licenses and Permits



Sec. 55.41  General.

    (a) Each person intending to engage in business as an importer or 
manufacturer of, or a dealer in, explosive materials, including black 
powder, shall, before commencing business, obtain the license required 
by this subpart for the business to be operated. Each person who intends 
to acquire for use explosive materials from a licensee in a State other 
than the State in which he resides, or from a foreign country, or who 
intends to transport explosive materials in interstate or foreign 
commerce, shall obtain a permit under this subpart; except that it is 
not necessary to obtain a permit if the user intends to lawfully 
purchase:
    (1) Explosive materials from a licensee in a State contiguous to the 
user's State of residence and the user's State of residence has enacted 
legislation, currently in force, specifically authorizing a resident of 
that State to purchase explosive materials in a contiguous State, or
    (2) Commercially manufactured black powder in quantities not to 
exceed 50 pounds, intended to be used solely for sporting, recreational, 
or cultural purposes in antique firearms or in antique devices.
    (b) Each person intending to engage in business as an explosive 
materials importer, manufacturer, or dealer shall file an application, 
with the required fee (see Sec. 55.42), with ATF in accordance

[[Page 937]]

with the instructions on the form (see Sec. 55.45). A license shall, 
subject to law, entitle the licensee to transport, ship, and receive 
explosive materials in interstate or foreign commerce, and to engage in 
the business specified by the license, at the location described on the 
license. A separate license must be obtained for each business premises 
at which the applicant is to manufacture, import, or distribute 
explosive materials except under the following circumstances:
    (1) A separate license shall not be required for storage facilities 
operated by the licensee as an integral part of one business premises or 
to cover a location used by the licensee solely for maintaining the 
records required by this part.
    (2) A separate license shall not be required of a licensed 
manufacturer with respect to his on-site manufacturing.
    (3) It shall not be necessary for a licensed importer or a licensed 
manufacturer (for purposes of sale or distribution) to also obtain a 
dealer's license in order to engage in business on his licensed premises 
as a dealer in explosive materials.
    (4) A separate license shall not be required of licensed 
manufacturers with respect to their on-site manufacture of theatrical 
flash powder.
    (c) Except as provided in paragraph (a) of this section, each person 
intending to acquire explosive materials from a licensee in a State 
other than a State in which he resides, or from a foreign country, or 
who intends to transport explosive materials in interstate or foreign 
commerce, shall file an application, with the required fee (see 
Sec. 55.43), with ATF in accordance with the instructions on the form 
(see Sec. 55.45). A permit shall, subject to law, entitle the permittee 
to acquire, transport, ship, and receive in interstate or foreign 
commerce explosive materials of the class authorized by this permit. 
Only one permit is required under this part.

(18 U.S.C. 847 (84 Stat. 959); 18 U.S.C. 926 (82 Stat. 1226))

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-200, 50 
FR 10497, Mar. 15, 1985; T.D. ATF-314, 56 FR 49140, Sept. 27, 1991; T.D. 
ATF-400, 63 FR 45002, Aug. 24, 1998]



Sec. 55.42  License fees.

    (a) Each applicant shall pay a fee for obtaining a three year 
license, a separate fee being required for each business premises, as 
follows:
    (1) Manufacturer--$200.
    (2) Importer--$200.
    (3) Dealer--$200.
    (b) Each applicant for a renewal of a license shall pay a fee for a 
three year license as follows:
    (1) Manufacturer--$100.
    (2) Importer--$100.
    (3) Dealer--$100.

[T.D. ATF-400, 63 FR 45002, Aug. 24, 1998]



Sec. 55.43  Permit fees.

    (a) Each applicant shall pay a fee for obtaining a permit as 
follows:
    (1) User--$100 for a three year permit.
    (2) User-limited (nonrenewable)--$75.
    (b) Each applicant for renewal of a user permit shall pay a fee of 
$50 for a three year permit.

[T.D. ATF-400, 63 FR 45002, Aug. 24, 1998]



Sec. 55.44  License or permit fee not refundable.

    No refund of any part of the amount paid as a license or permit fee 
will be made where the operations of the licensee or permittee are, for 
any reason, discontinued during the period of an issued license or 
permit. However, the license or permit fee submitted with an application 
for a license or permit will be refunded if that application is denied, 
withdrawn, or abandoned, or if a license is cancelled subsequent to 
having been issued through administrative error.



Sec. 55.45  Original license or permit.

    (a) Any person who intends to engage in business as an explosive 
materials importer, manufacturer, or dealer, or who has not timely 
submitted application for renewal of a previous license issued under 
this part, shall file with ATF an application for License, Explosives, 
ATF F 5400.13 with ATF in accordance with the instructions on the form. 
The application must be executed under the penalties of perjury and the 
penalties imposed by 18 U.S.C. 844(a). The application is to be 
accompanied by the appropriate fee in the form of a money order or check 
made

[[Page 938]]

payable to the Bureau of Alcohol, Tobacco and Firearms. ATF F 5400.13 
may be obtained from any ATF office.
    (b) Any person, except as provided in Sec. 55.41(a), who intends to 
acquire explosive materials from a licensee in a state other than the 
State in which that person resides, or from a foreign country, or who 
intends to transport explosive materials in interstate or foreign 
commerce, or who has not timely submitted application for renewal of a 
previous permit issued under this part, shall file an application for 
Permit, Explosives, ATF F 5400.16 or Permit, User Limited Special 
Fireworks, ATF F 5400.21 with ATF in accordance with the instructions on 
the form. The application must be executed under the penalties of 
perjury and the penalties imposed by 18 U.S.C. 844(a). The application 
is to be accompanied by the appropriate fee in the form of a money order 
or check made payable to the Bureau of Alcohol, Tobacco and Firearms. 
ATF F 5400.16 and ATF F 5400.21 may be obtained from any ATF office.

(18 U.S.C. 847 (84 Stat. 959); 18 U.S.C. 926 (82 Stat. 1226))

[T.D. T.D. ATF-200, 50 FR 10497, Mar. 15, 1985, as amended by T.D. ATF-
400, 63 FR 45002, Aug. 24, 1998]



Sec. 55.46  Renewal of license or permit.

    (a) If a licensee or permittee intends to continue the business or 
operation described on a license or permit issued under this part after 
the expiration date of the license or permit, he shall, unless otherwise 
notified in writing by the Chief, Firearms and Explosives Licensing 
Center, execute and file prior to the expiration of his license or 
permit an application for license renewal, ATF F 5400.14 (Part III), or 
an application for permit renewal, ATF F 5400.15 (Part III), accompanied 
by the required fee, with ATF in accordance with the instructions on the 
form. In the event the licensee or permittee does not timely file a 
renewal application, he shall file an original application as required 
by Sec. 55.45, and obtain the required license or permit in order to 
continue business or operations.
    (b) A user-limited permit is not renewable and is valid for a single 
purchase transaction. Applications for all user-limited permits must be 
filed on ATF F 5400.16 or ATF F 5400.21, as required by Sec. 55.45.

(18 U.S.C. 847 (84 Stat. 959); 18 U.S.C. 926 (82 Stat. 1226))

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-200, 50 
FR 10497, Mar. 15, 1985; T.D. ATF-290, 54 FR 53054, Dec. 27, 1989; T.D. 
ATF-400, 63 FR 45002, Aug. 24, 1998]



Sec. 55.47  Insufficient fee.

    If an application is filed with an insufficient fee, the application 
and fee submitted will be returned to the applicant.

(18 U.S.C. 847 (84 Stat. 959); 18 U.S.C. 926 (82 Stat. 1226))

[T.D. ATF-200, 50 FR 10498, Mar. 15, 1985]



Sec. 55.48  Abandoned application.

    Upon receipt of an incomplete or improperly executed application, 
the applicant will be notified of the deficiency in the application. If 
the application is not corrected and returned within 30 days following 
the date of notification, the application will be considered as having 
been abandoned and the license or permit fee returned.



Sec. 55.49  Issuance of license or permit.

    (a) The Chief, Firearms and Explosives Licensing Center, shall issue 
a license or permit if (1) a properly executed application for the 
license or permit is received, and (2) through further inquiry or 
investigation, or otherwise, it is found that the applicant is entitled 
to the license or permit. The license or permit and one copy will be 
forwarded to the applicant, except that in the case of a user-limited 
permit, the original only shall be issued. Each license or permit will 
bear a serial number and this number may be assigned to the licensee or 
permittee to whom issued for as long as he maintains continuity of 
renewal in the same region.
    (b) The Chief, Firearms and Explosives Licensing Center, shall 
approve a properly executed application for a license or permit, if:
    (1) The applicant is 21 years of age or over;
    (2) The applicant (including, in the case of a corporation, 
partnership, or association, any individual possessing,

[[Page 939]]

directly or indirectly, the power to direct or cause the direction of 
the management and policies of the corporation, partnership, or 
association) is not a person to whom distribution of explosive materials 
is prohibited under the Act;
    (3) The applicant has not willfully violated any provisions of the 
Act or this part;
    (4) The applicant has not knowingly withheld information or has not 
made any false or fictitious statement intended or likely to deceive, in 
connection with his application;
    (5) The applicant has in a State, premises from which he conducts 
business or operations subject to license or permit under the Act or 
from which he intends to conduct business or operations;
    (6) The applicant has storage for the class (as described in 
Sec. 55.202) of explosive materials described on the application, unless 
he establishes to the satisfaction of the Chief, Firearms and Explosives 
Licensing Center that the business or operations to be conducted will 
not require the storage of explosive materials.
    (7) The applicant has certified in writing that he is familiar with 
and understands all published State laws and local ordinances relating 
to explosive materials for the location in which he intends to do 
business; and
    (8) The applicant for a license has submitted the certificate 
required by section 21 of the Federal Water Pollution Control Act, as 
amended (33 U.S.C. 1341).
    (c) The Chief, Firearms and Explosives Licensing Center, shall 
approve or the regional director (compliance) shall deny any application 
for a license or permit within the 45-day period beginning on the date a 
properly executed application was received. However, when an applicant 
for license or permit renewal is a person who is, under the provisions 
of Sec. 55.83 or Sec. 55.142, conducting business or operations under a 
previously issued license or permit, action regarding the application 
will be held in abeyance pending the completion of the proceedings 
against the applicant's existing license or permit, or renewal 
application, or final action by the Director on an application for 
relief submitted under Sec. 55.142, as the case may be.

(18 U.S.C. 847 (84 Stat. 959); 18 U.S.C. 926 (82 Stat. 1226))

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-200, 50 
FR 10498, Mar. 15, 1985; T.D. ATF-290, 54 FR 53054, Dec. 27, 1989; T.D. 
ATF-387, 62 FR 8376, Feb. 25, 1997]



Sec. 55.50  Correction of error on license or permit.

    (a) Upon receipt of a license or permit issued under this part, each 
licensee or permittee shall examine the license or permit to insure that 
the information on it is accurate. If the license or permit is 
incorrect, the licensee or permittee shall return the license or permit 
to the Chief, Firearms and Explosives Licensing Center, with a statement 
showing the nature of the error. The Chief, Firearms and Explosives 
Licensing Center, shall correct the error, if the error was made in his 
office, and return the license or permit. However, if the error resulted 
from information contained in the licensee's or permittee's application 
for the license or permit, the Chief, Firearms and Explosives Licensing 
Center, shall require the licensee or permittee to file an amended 
application setting forth the correct information and a statement 
explaining the error contained in the application. Upon receipt of the 
amended application and a satisfactory explanation of the error, the 
Chief, Firearms and Explosives Licensing Center, shall make the 
correction on the license or permit and return it to the licensee or 
permittee.
    (b) When the Chief, Firearms and Explosives Licensing Center, finds 
through any means other than notice from the licensee or permittee that 
an incorrect license or permit has been issued, (1) the Chief, Firearms 
and Explosives Licensing Center, may require the holder of the incorrect 
license or permit to return the license or permit for correction, and 
(2) if the error resulted from information contained in the licensee's 
or permittee's application for the license or permit, the Chief, 
Firearms and Explosives Licensing Center, shall require the licensee or

[[Page 940]]

permittee to file an amended application setting forth the correct 
information, and a statement satisfactorily explaining the error 
contained in the application. The Chief, Firearms and Explosives 
Licensing Center, then shall make the correction on the license or 
permit and return it to the licensee or permittee.

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-290, 54 
FR 53054, Dec. 27, 1989]



Sec. 55.51  Duration of license or permit.

    An original license or permit is issued for a period of three years. 
A renewal license or permit is issued for a period of three years. 
However, a user-limited permit is valid only for a single purchase 
transaction.

[T.D. ATF-400, 63 FR 45002, Aug. 24, 1998]



Sec. 55.52  Limitations on license or permit.

    (a) The license covers the business and class (as described in 
Sec. 55.202) of explosive materials specified in the license at the 
licensee's business premises (see Sec. 55.41(b)).
    (b) The permit is valid with respect to the type of operations and 
class (as described in Sec. 55.202) of explosive materials specified in 
the permit.

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-387, 62 
FR 8376, Feb. 25, 1997]



Sec. 55.53  License and permit not transferable.

    Licenses and permits issued under this part are not transferable to 
another person. In the event of the lease, sale, or other transfer of 
the business or operations covered by the license or permit, the 
successor must obtain the license or permit required by this part before 
commencing business or operations. However, for rules on right of 
succession, see Sec. 55.59.



Sec. 55.54  Change of address.

    During the term of a license or permit, a licensee or permittee may 
move his business or operations to a new address at which he intends to 
regularly carry on his business or operations, without procuring a new 
license or permit. However, in every case, the licensee or permittee 
shall--
    (a) Give notification of the new location of the business or 
operations to the Chief, Firearms and Explosives Licensing Center at 
least 10 days before the move; and
    (b) Submit the license or permit to the Chief, Firearms and 
Explosives Licensing Center. The Chief, Firearms and Explosives 
Licensing Center will issue an amended license or permit, which will 
contain the new address (and new license or permit number, if any).

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-290, 54 
FR 53054, Dec. 27, 1989]



Sec. 55.55  Change in class of explosive materials.

    A licensee or permittee who intends to change the class of explosive 
materials described in his license or permit from a lower to a higher 
classification (see Sec. 55.202) shall file an application on ATF F 
5400.13 or on ATF F 5400.16 with the Chief, Firearms and Explosives 
Licensing Center, for an amended license or permit. If the change in 
class of explosive materials would require a change in magazines, the 
amended application must include a description of the type of 
construction as prescribed in this part. Business or operations with 
respect to the new class of explosive materials may not be commenced 
before issuance of the amended license or amended permit. Upon receipt 
of the amended license or amended permit, the licensee or permittee 
shall submit his superseded license or superseded permit and any copies 
furnished with the license or permit to the Chief, Firearms and 
Explosives Licensing Center.

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-290, 54 
FR 53054, Dec. 27, 1989; T.D. ATF-387, 62 FR 8376, Feb. 25, 1997]



Sec. 55.56  Change in trade name.

    A licensee or permittee continuing to conduct business or operations 
at the location shown on his license or permit is not required to obtain 
a new license or permit by reason of a mere change in trade name under 
which he conducts his business or operations. However, the licensee or 
permittee shall furnish

[[Page 941]]

his license or permit and any copies furnished with the license or 
permit for endorsement of the change to the Chief, Firearms and 
Explosives Licensing Center, within 30 days from the date the licensee 
or permittee begins his business or operations under the new trade name.

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-290, 54 
FR 53054, Dec. 27, 1989]



Sec. 55.57  Change of control.

    In the case of a corporation or association holding a license or 
permit under this part, if actual or legal control of the corporation or 
association changes, directly or indirectly, whether by reason of change 
in stock ownership or control (in the corporation holding a license or 
permit or in any other corporation), by operation of law, or in any 
other manner, the licensee or permittee shall, within 30 days of the 
change, give written notification executed under the penalties of 
perjury, to the Chief, Firearms and Explosives Licensing Center. Upon 
expiration of the license or permit, the corporation or association 
shall file an ATF F 5400.13 or an ATF F 5400.16 as required by 
Sec. 55.45, and pay the fee prescribed in Sec. 55.42(b) or 
Sec. 55.43(b).

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-290, 54 
FR 53054, Dec. 27, 1989]



Sec. 55.58  Continuing partnerships.

    Where, under the laws of the particular State, the partnership is 
not terminated on death or insolvency of a partner, but continues until 
the winding up of the partnership affairs is completed, and the 
surviving partner has the exclusive right to the control and possession 
of the partnership assets for the purpose of liquidation and settlement, 
the surviving partner may continue to conduct the business or operations 
under the license or permit of the partnership. If the surviving partner 
acquires the business or operations on completion of settlement of the 
partnership, he shall obtain a license or permit in his own name from 
the date of acquisition, as provided in Sec. 55.45. The rule set forth 
in this section will also apply where there is more than one surviving 
partner.



Sec. 55.59  Right of succession by certain persons.

    (a) Certain persons other than the licensee or permittee may secure 
the right to carry on the same explosive materials business or 
operations at the same business premises for the remainder of the term 
of license or permit. These persons are:
    (1) The surviving spouse or child, or executor, administrator, or 
other legal representative of a deceased licensee or permittee; and
    (2) A receiver or trustee in bankruptcy, or an assignee for benefit 
of creditors.
    (b) In order to secure the right of succession, the person or 
persons continuing the business or operations shall submit the license 
or permit and all copies furnished with the license or permit for 
endorsement of the succession to the Chief, Firearms and Explosives 
Licensing Center, within 30 days from the date on which the successor 
begins to carry on the business or operations.

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-290, 54 
FR 53054, Dec. 27, 1989]



Sec. 55.60  Certain continuances of business or operations.

    A licensee or permittee who furnishes his license or permit to the 
Chief, Firearms and Explosives Licensing Center, for correction, 
amendment, or endorsement, as provided in this subpart, may continue his 
business or operations while awaiting its return.

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-290, 54 
FR 53054, Dec. 27, 1989]



Sec. 55.61  Discontinuance of business or operations.

    Where an explosive materials business or operations is either 
discontinued or succeeded by a new owner, the owner of the business or 
operations discontinued or succeeded shall, within 30 days, furnish 
notification of the discontinuance or succession and submit his license 
or permit and any copies furnished with the license or permit to

[[Page 942]]

the Chief, Firearms and Explosives Licensing Center. (See also 
Sec. 55.128.)

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-290, 54 
FR 53054, Dec. 27, 1989]



Sec. 55.62  State or other law.

    A license or permit issued under this part confers no right or 
privilege to conduct business or operations, including storage, contrary 
to State or other law. The holder of a license or permit issued under 
this part is not, by reason of the rights and privileges granted by that 
license or permit, immune from punishment for conducting an explosive 
materials business or operations in violation of the provisions of any 
State or other law. Similarly, compliance with the provisions of any 
State or other law affords no immunity under Federal law or regulations.



Sec. 55.63  Explosives magazine changes.

    (a) General. (1) The requirements of this section are applicable to 
magazines used for other than temporary (under 24 hours) storage of 
explosives.
    (2) A magazine is considered suitable for the storage of explosives 
if the construction requirements of this part are met during the time 
explosives are stored in the magazine.
    (3) A magazine is considered suitable for the storage of explosives 
if positioned in accordance with the applicable table of distances as 
specified in this part during the time explosives are stored in the 
magazine.
    (4) For the purposes of this section, notification of the regional 
director (compliance) may be by telephone or in writing. However, if 
notification of the regional director (compliance) is in writing it must 
be at least three business days in advance of making changes in 
construction to an existing magazine or constructing a new magazine, and 
at least five business days in advance of using any reconstructed 
magazine or added magazine for the storage of explosives.
    (b) Exception. Mobile or portable type 5 magazines are exempt from 
the requirements of paragraphs (c) and (d) of this section, but must 
otherwise be in compliance with paragraphs (a) (2) and (3) of this 
section during the time explosives are stored in such magazines.
    (c) Changes in magazine construction. A licensee or permittee who 
intends to make changes in construction of an existing magazine shall 
notify the regional director (compliance) describing the proposed 
changes prior to making any changes. Unless otherwise advised by the 
regional director (compliance), changes in construction may commence 
after explosives are removed from the magazine. Explosives may not be 
stored in a reconstructed magazine before the regional director 
(compliance) has been notified in accordance with paragraph (a)(4) of 
this section that the changes have been completed.
    (d) Magazines acquired or constructed after permit or license is 
issued. A licensee or permittee who intends to construct or acquire 
additional magazines shall notify the regional director (compliance) in 
accordance with paragraph (a)(4) of this section describing the 
additional magazines and the class and quantity of explosives to be 
stored in the magazine. Unless otherwise advised by the regional 
director (compliance), additional magazines may be constructed, or 
acquired magazines may be used for the storage of explosives. Explosives 
must not be stored in a magazine under construction. The regional 
director (compliance) must be notified that construction has been 
completed.

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-400, 63 
FR 45002, Aug. 24, 1998]



                Subpart E--License and Permit Proceedings



Sec. 55.71  Opportunity for compliance.

    Except in cases of willfulness or those in which the public interest 
requires otherwise, and the regional director (compliance) so alleges in 
the notice of denial of an application or revocation of a license or 
permit, no license or permit will be revoked or renewal application 
denied without first calling to the attention of the licensee or 
permittee the reasons for the contemplated action and affording him an 
opportunity to demonstrate or achieve compliance with all lawful 
requirements and to submit facts, arguments, or proposals of adjustment. 
The notice of contemplated action, ATF F 5400.12,

[[Page 943]]

will afford the licensee or permittee 15 days from the date of receipt 
of the notice to respond. If no response is received within the 15 days, 
or if after consideration of relevant matters presented by the licensee 
or permittee, the regional director (compliance) finds that the licensee 
or permittee is not likely to abide by the law and regulations, he will 
proceed as provided in Sec. 55.74.

[T.D. ATF-87, 46 FR 40384, Aug. 7 1981, as amended by T.D. ATF-446, 66 
FR 16602, Mar. 27, 2001]



Sec. 55.72  Denial of initial application.

    Whenever the regional director (compliance) has reason to believe 
that an applicant for an original license or permit is not eligible to 
receive a license or permit under the provisions of Sec. 55.49, he shall 
issue a notice of denial on ATF F 5400.11. The notice will set forth the 
matters of fact and law relied upon in determining that the application 
should be denied, and will afford the applicant 15 days from the date of 
receipt of the notice in which to request a hearing to review the 
denial. If no request for a hearing is filed within that time, a copy of 
the application, marked ``Disapproved'', will be returned to the 
applicant.



Sec. 55.73  Hearing after initial application is denied.

    If the applicant for an original license or permit desires a 
hearing, he shall file a request with the regional director (compliance) 
within 15 days after receipt of the notice of denial. The request should 
include a statement of the reasons for a hearing. On receipt of the 
request, the regional director (compliance) shall refer the matter to an 
administrative law judge who shall set a time and place (see Sec. 55.77) 
for a hearing and shall serve notice of the hearing upon the applicant 
and the regional director (compliance) at least 10 days in advance of 
the hearing date. The hearing will be conducted in accordance with the 
hearing procedures prescribed in part 71 of this chapter (see 
Sec. 55.82). Within a reasonable time after the conclusion of the 
hearing, and as expeditiously as possible, the administrative law judge 
shall render his recommended decision. He shall certify to the complete 
record of the proceedings before him and shall immediately forward the 
complete certified record, together with four copies of his recommended 
decision, to the regional director (compliance) for decision.



Sec. 55.74  Denial of renewal application or revocation of license or permit.

    If following the opportunity for compliance under Sec. 55.71, or 
without opportunity for compliance under Sec. 55.71, as circumstances 
warrant, the regional director (compliance) finds that the licensee or 
permittee is not likely to comply with the law or regulations or is 
otherwise not eligible to continue operations authorized under his 
license or permit, the regional director (compliance) shall issue a 
notice of denial of the renewal application or revocation of the license 
or permit, ATF F 5400.11 or ATF F 5400.10, as appropriate. In either 
case, the notice will set forth the matters of fact constituting the 
violations specified, dates, places, and the sections of law and 
regulations violated. The notice will, in the case of revocation of a 
license or permit, specify the date on which the action is effective, 
which date will be on or after the date the notice is served on the 
licensee or permittee. The notice will also advise the licensee or 
permittee that he may, within 15 days after receipt of the notice, 
request a hearing and, if applicable, a stay of the effective date of 
the revocation of his license or permit.



Sec. 55.75  Hearing after denial of renewal application or revocation of license or permit.

    If a licensee or permittee whose renewal application has been denied 
or whose license or permit has been revoked desires a hearing, he shall 
file a request for a hearing with the regional director (compliance). In 
the case of the revocation of a license or permit, he may include a 
request for a stay of the effective date of the revocation. On receipt 
of the request the regional director (compliance) shall advise the 
licensee or permittee whether the stay of the effective date of the 
revocation is granted. If the stay of the effective date of the 
revocation is granted, the regional director (compliance) shall

[[Page 944]]

refer the matter to an administrative law judge who shall set a time and 
place (see Sec. 55.77) for a hearing and shall serve notice of the 
hearing upon the licensee or permittee and the regional director 
(compliance) at least 10 days in advance of the hearing date. If the 
stay of the effective date of the revocation is denied, the licensee or 
permittee may request an immediate hearing. In this event, the regional 
director (compliance) shall immediately refer the matter to an 
administrative law judge who shall set a date and place for a hearing, 
which date shall be no later than 10 days from the date the licensee or 
permittee requested an immediate hearing. The hearing will be held in 
accordance with the applicable provisions of part 71 of this chapter. 
Within a reasonable time after the conclusion of the hearing, and as 
expeditiously as possible, the administrative law judge shall render his 
decision. He shall certify to the complete record of the proceeding 
before him and shall immediately forward the complete certified record, 
together with two copies of his decision, to the regional director 
(compliance), serve one copy of his decision on the licensee or 
permittee or his counsel, and transmit a copy to the attorney for the 
Government.



Sec. 55.76  Action by regional director (compliance).

    (a) Initial application proceedings. If, upon receipt of the record 
and the recommended decision of the administrative law judge, the 
regional director (compliance) decides that the license or permit should 
be issued, the regional director (compliance) shall cause the 
application to be approved, briefly stating, for the record, his 
reasons. If he contemplates that the denial should stand, he shall serve 
a copy of the administrative law judge's recommended decision on the 
applicant, informing the applicant of his contemplated action and 
affording the applicant not more than 10 days in which to submit 
proposed findings and conclusions or exceptions to the recommended 
decision with supporting reasons. If the regional director (compliance), 
after consideration of the record of the hearing and of any proposed 
findings, conclusions, or exceptions filed with him by the applicant, 
approves the findings, conclusions and recommended decision of the 
administrative law judge, the regional director (compliance) shall cause 
the license or permit to be issued or disapproved the application 
accordingly. If he disapproves the findings, conclusions, and 
recommendation of the administrative law judge, in whole or in part, he 
shall by order make such findings and conclusions as in his opinion are 
warranted by the law and the facts in the record. Any decision of the 
regional director (compliance) ordering the disapproval of an initial 
application for a license or permit shall state the findings and 
conclusions upon which it is based, including his ruling upon each 
proposed finding, conclusion, and exception to the administrative law 
judge's recommended decision, together with a statement of his findings 
and conclusions, and reasons or basis for his findings and conclusions, 
upon all material issues of fact, law or discretion presented on the 
record. A signed duplicate original of the decision will be served upon 
the applicant and the original copy containing certificate of service 
will be placed in the official record of the proceedings. If the 
decision of the regional director (compliance) is in favor of the 
applicant, he shall issue the license or permit, to be effective on 
issuance.
    (b) Renewal application and revocation proceedings. Upon receipt of 
the complete certified records of the hearing, the regional director 
(compliance) shall enter an order confirming the revocation of the 
license or permit, or disapproving the application, in accordance with 
the administrative law judge's findings and decision, unless he 
disagrees with the findings and decision. A signed duplicate original of 
the order, ATF F 5400.9, will be served upon the licensee or permittee 
and the original copy containing certificate of service will be placed 
in the official record of the proceedings. If the regional director 
(compliance) disagrees with the findings and decision of the 
administrative law judge, he shall file a petition with the Director for 
review of the findings and decision, as provided in Sec. 55.79. In 
either case, if the renewal application denial is sustained, a copy of 
the application marked ``Disapproved''

[[Page 945]]

will be returned to the applicant. If the renewal application denial is 
reversed, a license or permit will be issued to become effective on 
expiration of the license or permit being renewed, or on the date of 
issuance, whichever is later. If the proceedings involve the revocation 
of a license or permit which expired before a decision is in favor of 
the licensee or permittee, the regional director (compliance) shall:
    (1) If renewal application was timely filed and a stay of the 
effective date of the revocation was granted, cause to be issued a 
license or permit effective on the date of issuance;
    (2) If renewal application was not timely filed but a stay of the 
effective date of the revocation had been granted, request that a 
renewal application be filed and, following that, cause to be issued a 
license or permit to be effective on issuance; or
    (3) If a stay of the effective date of the revocation had not been 
granted, request that an application be filed as provided in Sec. 55.45, 
and process it in the same manner as for an application for an original 
license or permit.
    (c) Curtailment of stay of revocation effective date. If, after 
approval of a request for a stay of the effective date of an order 
revoking a license or permit but before actions are completed under this 
subpart, the regional director (compliance) finds that it is contrary to 
the public interest for the licensee or permittee to continue the 
operations or activities covered by his license or permit, the regional 
director (compliance) may issue a notice of withdrawal of the approval, 
effective on the date of issuance. Notice of withdrawal will be served 
upon the licensee or permittee in the manner provided in Sec. 55.81.

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-290, 54 
FR 53054, Dec. 27, 1989]



Sec. 55.77  Designated place of hearing.

    The designated place of hearing set as provided in Sec. 55.73 or 
Sec. 55.75, will be at the location convenient to the aggrieved party.



Sec. 55.78  Representation at a hearing.

    An applicant, licensee, or permittee may be represented by an 
attorney, certified public accountant, or other person recognized to 
practice before the Bureau of Alcohol, Tobacco and Firearms as provided 
in 31 CFR Part 8, if he has otherwise complied with the applicable 
requirements of of 26 CFR 601.521 through 601.527. The regional director 
(compliance) shall be represented in proceedings under Secs. 55.73 and 
55.75 by an attorney in the office of the chief counsel or regional 
counsel who is authorized to execute and file motions, briefs, and other 
papers in the proceedings, on behalf of the regional director 
(compliance), in his own name as ``Attorney for the Government''.

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-92, 46 
FR 46916, Sept. 23, 1981]



Sec. 55.79  Appeal on petition to the Director.

    An appeal to the Director is not required prior to filing an appeal 
with the U.S. Court of Appeals for judicial review. An appeal may be 
taken by the applicant, licensee, or permittee to the Director from a 
decision resulting from a hearing under Sec. 55.73 or Sec. 55.75. An 
appeal may also be taken by a regional director (compliance) from a 
decision resulting from a hearing under Sec. 55.75 as provided in 
Sec. 55.76(b). The appeal shall be taken by filing a petition for review 
on appeal with the Director within 15 days of the service of an 
administrative law judge's decision or an order. The petition will set 
forth facts tending to show (a) action of an arbitrary nature, (b) 
action without reasonable warrant in fact, or (c) action contrary to law 
and regulations. A copy of the petition will be filed with the regional 
director (compliance) or served on the applicant, licensee, or 
permittee, as the case may be. In the event of appeal, the regional 
director (compliance) shall immediately forward the complete original 
record, by certified mail, to the Director for his consideration, 
review, and disposition as provided in subpart I of part 71 of this 
chapter. When, on appeal, the Director affirms the initial decision of 
the regional director (compliance) or the administrative law judge, as 
the case may be, the initial decision will be final.

[[Page 946]]



Sec. 55.80  Court review.

    An applicant, licensee, or permittee may, within 60 days after 
receipt of the decision of the administrative law judge or the final 
order of the regional director (compliance) or the Director, file a 
petition for a judicial review of the decision, with the U.S. Court of 
Appeals for the district in which he resides or has his principal place 
of business. The Director, upon notification that a petition has been 
filed, shall have prepared a complete transcript of the record of the 
proceedings. The regional director (compliance) or the Director, as the 
case may be, shall certify to the correctness of the transcript of the 
record, forward one copy to the attorney for the Government in the 
review of the case, and file the original record of the proceedings with 
the original certificate in the U.S. Court of Appeals.



Sec. 55.81  Service on applicant, licensee, or permittee.

    All notices and other formal documents required to be served on an 
applicant, licensee, or permittee under this subpart will be served by 
certified mail or by personal delivery. Where service is by personal 
delivery, the signed duplicate original copy of the formal document will 
be delivered to the applicant, licensee, or permittee, or, in the case 
of a corporation, partnership, or association, by delivering it to an 
officer, manager, or general agent, or to its attorney of record.



Sec. 55.82  Provisions of part 200 made applicable.

    The provisions of subpart G of part 200 of this chapter, as well as 
those provisions of part 71 relative to failure to appear, withdrawal of 
an application or surrender of a permit, the conduct of hearings before 
an administrative law judge, and record of testimony, are hereby made 
applicable to application, license, and permit proceedings under this 
subpart to the extent that they are not contrary to or incompatible with 
this subpart.



Sec. 55.83  Operations by licensees or permittees after notice of denial or revocation.

    In any case where a notice of revocation has been issued and a 
request for a stay of the effective date of the revocation has not been 
granted, the licensee or permittee shall not engage in the activities 
covered by the license or permit pending the outcome of proceedings 
under this subpart. In any case where notice of revocation has been 
issued but a stay of the effective date of the revocation has been 
granted, the licensee or permittee may continue to engage in the 
activities covered by his license or permit unless, or until, formally 
notified to the contrary: Provided, That in the event the license or 
permit would have expired before proceedings under this subpart are 
completed, timely renewal application must have been filed to continue 
the license or permit beyond its expiration date. In any case where a 
notice of denial of a renewal application has been issued, the licensee 
or permittee may continue to engage in the activities covered by the 
existing license or permit after the date of expiration of the license 
or permit until proceedings under this subpart are completed.



              Subpart F--Conduct of Business or Operations



Sec. 55.101  Posting of license or permit.

    A license or permit issued under this part, or a copy of a license 
or permit, will be posted and available for inspection on the business 
premises at each place where explosive materials are manufactured, 
imported, or distributed.



Sec. 55.102  Authorized operations by permittees.

    (a) In general. A permit issued under this part does not authorize 
the permittee to engage in the business of manufacturing, importing, or 
dealing in explosive materials. Accordingly, if a permittee's operations 
bring him within the definition of manufacturer, importer, or dealer 
under this part, he

[[Page 947]]

shall qualify for the appropriate license.
    (b) Distributions of surplus stocks. Permittees are not authorized 
to engage in the business of sale or distribution of explosive 
materials. However, permittees may dispose of surplus stocks of 
explosive materials to other licensees or permittees in accordance with 
Sec. 55.103, and to nonlicensees or to nonpermittees in accordance with 
Sec. 55.105(d).

[T.D. ATF-400, 63 FR 45002, Aug. 24, 1998]



Sec. 55.103  Transactions among licensees/permittees.

    (a) General. (1) A licensed importer, licensed manufacturer or 
licensed dealer selling or otherwise distributing explosive materials 
(or a permittee disposing of surplus stock to a licensee or another 
permittee) who has the certified information required by this section 
may sell or distribute explosive materials to a licensee or permittee 
for not more than 45 days following the expiration date of the 
distributee's license or permit, unless the distributor knows or has 
reason to believe that the distributee's authority to continue business 
or operations under this part has been terminated.
    (2) A licensed importer, licensed manufacturer or licensed dealer 
selling or otherwise distributing explosive materials (or a permittee 
disposing of surplus stock to another licensee or permittee) shall 
verify the license or permit status of the distributee prior to the 
release of explosive materials ordered, as required by this section.
    (3) Licensees or permittees desiring to return explosive materials 
to a licensed manufacturer may do so without obtaining a certified copy 
of the manufacturer's license.
    (4) Where possession of explosive materials is transferred at the 
distributor's premises, the distributor shall in all instances verify 
the identity of the person accepting possession on behalf of the 
distributee before relinquishing possession. Before the delivery at the 
distributor's premises of explosive materials to an employee of a 
licensee or permittee, or to an employee of a carrier transporting 
explosive materials to a licensee or permittee, the distributor 
delivering explosive materials shall obtain an executed ATF F 5400.8 
from the employee before releasing the explosive materials. The ATF F 
5400.8 must contain all of the information required on the form and 
required by this part.

    Example 1. An ATF F 5400.8 is required when:
    a. An employee of the purchaser takes possession at the 
distributor's premises.
    b. An employee of a carrier hired by the purchaser takes possession 
at the distributor's premises.
    Example 2. An ATF F 5400.8 is not required when:
    a. An employee of the distributor takes possession of the explosives 
for the purpose of transport to the purchaser.
    b. An employee of a carrier hired by the distributor takes 
possession of the explosives for the purpose of transport to the 
purchaser.

    (b) License/permit verification of individuals. (1) The distributee 
shall furnish a certified copy (or, in the case of a user-limited, the 
original) of the license or permit. The certified copy need be furnished 
only once during the current term of the license or permit. Also, a 
licensee need not furnish certified copies of licenses to other licensed 
locations operated by such licensee.
    (2) The distributor may obtain any additional verification as the 
distributor deems necessary.
    (c) License/permit verification of business organizations. (1) A 
business organization may (in lieu of furnishing a certified copy of a 
license) furnish the distributor a certified list which contains the 
name, address, license number and date of license expiration of each 
licensed location. The certified list need be furnished only once during 
the current term of the license or permit. Also, a business organization 
need not furnish a certified list to other licensed locations operated 
by such business organization.
    (2) A business organization shall, prior to ordering explosive 
materials, furnish the licensee or permittee a current certified list of 
the representatives or agents authorized to order explosive materials on 
behalf of the business organization showing the name, address, and date 
and place of birth of each representative or agent. A licensee or 
permittee shall not distribute

[[Page 948]]

explosive materials to a business organization on the order of a person 
who does not appear on the certified list of representatives or agents 
and, if the person does appear on the certified list, the licensee or 
permittee shall verify the identity of such person.
    (d) Licensee/permittee certified statement. (1) A licensee or 
permittee ordering explosive materials from another licensee or 
permittee shall furnish a current, certified statement of the intended 
use of the explosive materials; e.g., resale, mining, quarrying, 
agriculture, construction, road building, oil well drilling, 
seismographic research, to the distributor.
    (2) For individuals, the certified statement of intended use must 
specify the name, address, date and place of birth, and social security 
number of the distributee.
    (3) For business organizations, the certified statement of intended 
use must specify the taxpayer identification number, the identity and 
the principal and local places of business.
    (4) The licensee or permittee purchasing explosive materials need 
revise the furnished copy of the certified statement only when the 
information is no longer current.
    (e) User-limited permit transactions. A user-limited permit issued 
under the provisions of this part is valid for only a single purchase 
transaction and is not renewable (see Sec. 55.51). Accordingly, at the 
time a user-limited permittee orders explosive materials, the licensed 
distributor shall write on the front of the user-limited permit the 
transaction date, his signature, and the distributor's license number 
prior to returning the permit to the user-limited permittee.

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-400, 63 
FR 45003, Aug. 24, 1998]



Sec. 55.104  Certified copy of license or permit.

    Except as provided in Sec. 55.49(a), each person issued a license or 
permit under this part shall be furnished together with his license or 
permit a copy for his certification. If a person desires an additional 
copy of his license or permit for certification and for use under 
Sec. 55.103, he shall:
    (a) Make a reproduction of the copy of his license or permit and 
execute the certification on it;
    (b) Make a reproduction of his license or permit, enter on the 
reproduction the statement: ``I certify that this is a true copy of a 
(insert the word license or permit) issued to me to engage in the 
specified business or operations'', and sign his name next to the 
statement; or
    (c) Submit a request, in writing, for certified copies of his 
license or permit to the Chief, Firearms and Explosives Licensing 
Center. The request will show the name, trade name (if any), and address 
of the licensee or permittee and the number of copies of the license or 
permit desired. There is a fee of $1 for each copy of a license or 
permit issued by the Chief, Firearms and Explosives Licensing Center 
under this paragraph. Fee payment must accompany each request for 
additional copies of a license or permit. The fee must be paid by (1) 
cash, or (2) money order or check made payable to the Bureau of Alcohol, 
Tobacco and Firearms.

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-290, 54 
FR 53054, Dec. 27, 1989]



Sec. 55.105  Distributions to nonlicensees and nonpermittees.

    (a) This section will apply in any case where distribution of 
explosive materials to the distributee is not otherwise prohibited by 
the Act or this part.
    (b) Except as provided in paragraph (c) of this section, a licensed 
importer, licensed manufacturer, or licensed dealer may distribute 
explosive materials to a nonlicensee or nonpermittee if the nonlicensee 
or nonpermittee is a resident of the same State in which the licensee's 
business premises are located, and the nonlicensee or nonpermittee 
furnishes to the licensee the explosives transaction record, ATF F 
5400.4, required by Sec. 55.126. Disposition of ATF F 5400.4 will be 
made in accordance with Sec. 55.126.
    (c) A licensed importer, licensed manufacturer, or licensed dealer 
may sell or distribute explosive materials to a resident of a State 
contiguous to the State in which the licensee's place of business is 
located if the purchaser's

[[Page 949]]

State or residence has enacted legislation, currently in force, 
specifically authorizing a resident of that State to purchase explosive 
materials in a contiguous State and the purchaser and the licensee have, 
prior to the distribution of the explosive materials, complied with all 
the requirements of paragraphs (b), (e), and (f) of this section 
applicable to intrastate transactions occuring on the licensee's 
business premises.
    (d) A permittee may dispose of surplus stocks of explosive materials 
to a nonlicensee or nonpermittee if the nonlicensee or nonpermittee is a 
resident of the same State in which the permittee's business premises or 
operations are located, or is a resident of a State contiguous to the 
State in which the permittee's place of business or operations are 
located, and if the requirements of paragraphs (b), (c), (e) and (f) of 
this section are fully met.
    (e) A licensed importer, licensed manufacturer, or licensed dealer 
selling or otherwise distributing explosive materials to a business 
entity shall verify the identity of the representative or agent of the 
business entity who is authorized to order explosive materials on behalf 
of the business entity. Each business entity ordering explosive 
materials shall furnish the distributing licensee prior to or with the 
first order of explosive materials a current certified list of the names 
of representatives or agents authorized to order explosive materials on 
behalf of the business entity. The business entity ordering explosive 
materials is responsible for keeping the certified list current. A 
licensee shall not distribute explosive materials to a business entity 
on the order of a person whose name does not appear on the certified 
list.
    (f) Where the possession of explosive materials is transferred at 
the distributor's premises, the distributor shall in all instances 
verify the identity of the person accepting possession on behalf of the 
distributee before relinquishing possession. Before the delivery at the 
distributor's premises of explosive materials to an employee of a 
nonlicensee or nonpermittee, or to an employee of a carrier transporting 
explosive materials to a nonlicensee or nonpermittee, the distributor 
delivering explosive materials shall obtain an executed ATF F 5400.8 
from the employee before releasing the explosive materials. The ATF F 
5400.8 must contain all of the information required on the form and by 
this part. (See examples in Sec. 55.103(a).)
    (g) A licensee or permittee disposing of surplus stock may sell or 
distribute commercially manufactured black powder in quantities of 50 
pounds or less to a nonlicensee or nonpermittee if the black powder is 
intended to be used solely for sporting, recreational, or cultural 
purposes in antique firearms as defined in 18 U.S.C. 921(a)(16), or in 
antique devices as exempted from the term ``destructive device'' in 18 
U.S.C. 921(a)(4).

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-293, 55 
FR 3721, Feb. 5, 1990; T.D. ATF-400, 63 FR 45003, Aug. 24, 1998; T.D. 
ATF-446, 66 FR 16602, Mar. 27, 2001]



Sec. 55.106  Certain prohibited distributions.

    (a) A licensee shall not distribute explosive materials to any 
person not licensed or holding a permit under this part, who the 
licensee knows or has reason to believe does not reside in the State in 
which the licensee's place of business is located. This paragraph does 
not apply to the distribution of explosive materials to a resident of a 
State contiguous to the State in which the licensee's place of business 
is located, if the requirements of Sec. 55.105(c) are fully met.
    (b) A licensee shall not distribute any explosive materials to any 
person:
    (1) Who the licensee knows is less than 21 years of age;
    (2) In any State where the purchase, possession, or use by a person 
of explosive materials would be in violation of any State law or any 
published ordinance applicable at the place of distribution;
    (3) Who the licensee has reason to believe intends to transport the 
explosive materials into a State where the purchase, possession, or use 
of explosive materials is prohibited or which does not permit its 
residents to transport or ship explosive materials into the State or to 
receive explosive materials in the State; or

[[Page 950]]

    (4) Who the licensee has reasonable cause to believe intends to use 
the explosive materials for other than a lawful purpose.
    (c) A licensee shall not distribute any explosive materials to any 
person knowing or having reason to believe that the person:
    (1) Is, except as provided under Sec. 55.142 (d) and (e), under 
indictment or information for, or was convicted in any court of, a crime 
punishable by imprisonment for a term exceeding 1 year;
    (2) Is a fugitive from justice;
    (3) Is an unlawful user of marijuana, or any depressant or stimulant 
drug, or narcotic drug (as these terms are defined in the Controlled 
Substances Act, 21 U.S.C. 802); or
    (4) Was adjudicated as a mental defective or was committed to a 
mental institution.
    (d) The provisions of this section do not apply to the purchase of 
commercially manufactured black powder in quantities not to exceed 50 
pounds, intended to be used solely for sporting, recreational, or 
cultural purposes in antique firearms or in antique devices, if the 
requirements of Sec. 55.105(g) are fully met.



Sec. 55.107  Record of transactions.

    Each licensee and permittee shall keep records of explosive 
materials as required by subpart G of this part.



Sec. 55.108  Importation.

    (a) Explosive materials imported or brought into the United States 
by a licensed importer or permittee may be released from customs custody 
to the licensed importer or permittee upon proof of his status as a 
licensed importer or permittee. Proof of status must be made by the 
licensed importer or permittee furnishing to the customs officer a 
certified copy of his license or permit (see Sec. 55.103).
    (b) A nonlicensee or nonpermittee may import or bring into the 
United States commercially manufactured black powder in quantities not 
to exceed 50 pounds. Upon submitting to the customs officer completed 
ATF F 5400.3, certifying that the black powder is intended to be used 
solely for sporting, recreational, or cultural purposes in antique 
firearms or in antique devices, black powder may be released from 
customs custody. The disposition of the executed ATF F 5400.3 will be in 
accordance with the instructions on the form.
    (c) The provisions of this section are in addition to, and are not 
in lieu of, any applicable requirement under 27 CFR Part 47.
    (d) For additional requirements relating to the importation of 
plastic explosives into the United States on or after April 24, 1997, 
see Sec. 55.183.

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-387, 62 
FR 8376, Feb. 25, 1997]



Sec. 55.109  Identification of explosive materials.

    (a) Each licensed manufacturer of explosive materials shall legibly 
identify by marking all explosive materials he manufactures for sale or 
distribution. The marks required by this section must identify the 
manufacturer and the location, date, and shift of manufacture. The 
licensed manufacturer shall place on each cartridge, bag, or other 
immediate container of explosive materials manufactured for sale or 
distribution the required mark which shall also be placed on the outside 
container, if any, used for their packaging.
    (b) Exceptions. (1) Licensed manufacturers of blasting caps are only 
required to place the identification marks prescribed in paragraph (a) 
on the containers used for the packaging of blasting caps.
    (2) The Director may authorize other means of identifying explosive 
materials upon receipt of a letter application from the licensed 
manufacturer showing that other identification is reasonable and will 
not hinder the effective administration of this part.
    (3) The Director may authorize the use of other means of 
identification on fireworks instead of marks prescribed in paragraph (a) 
of this section.



                     Subpart G--Records and Reports



Sec. 55.121  General.

    (a)(1) Licensees and permittees shall keep records pertaining to 
explosive

[[Page 951]]

materials in permanent form (i.e., commercial invoices, record books) 
and in the manner required in this subpart.
    (2) Licensees and permittees shall keep records required by this 
subpart on the business premises for five years from the date a 
transaction occurs or until discontinuance of business or operations by 
the licensee or permittee. (See also Sec. 55.128 for discontinuance of 
business or operations.)
    (b) ATF officers may enter the premises of any licensee or permittee 
for the purpose of examining or inspecting any record or document 
required by or obtained under this part (see Sec. 55.24). Section 843(f) 
of the Act requires licensees and permittees to make all required 
records available for examination or inspection at all reasonable times. 
Section 834(f) of the Act also requires licensees and permittees to 
submit all reports and information relating to all required records and 
their contents, as the regulations in this part prescribe.
    (c) Each licensee and permittee shall maintain all records of 
importation, production, shipment, receipt, sale, or other disposition, 
whether temporary or permanent, of explosive materials as the 
regulations in this part prescribe. Sections 842(f) and 842(g) of the 
Act make it unlawful for any licensee or permittee knowingly to make any 
false entry in, or fail to make entry in, any record required to be kept 
under the Act and the regulations in this part.

(Approved by the Office of Management and Budget under control number 
1512-0373)

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-172, 49 
FR 14941, Apr. 16, 1984]



Sec. 55.122  Records maintained by licensed importers.

    (a) Each licensed importer shall take true and accurate physical 
inventories which will include all explosive materials on hand required 
to be accounted for in the records kept under this part. The licensed 
importer shall take a special inventory
    (1) At the time of commencing business, which is the effective date 
of the license issued upon original qualification under this part;
    (2) At the time of changing the location of his business to another 
region;
    (3) At the time of discontinuing business; and
    (4) At any time the regional director (compliance) may in writing 
require. Each special inventory is to be prepared in duplicate, the 
original of which is submitted to the regional director (compliance), 
and the duplicate retained by the licensed importer. If a special 
inventory specified by paragraphs (a) (1) through (4) of this section 
has not been taken during the calendar year, at least one physical 
inventory will be taken. However, the record of the yearly inventory, 
other than a special inventory required by paragraphs (a) (1) through 
(4) of this section, will remain on file for inspection instead of being 
sent to the regional director (compliance). (See also Sec. 55.127.)
    (b) Each licensed importer shall, not later than the close of the 
next business day following the date of importation or other acquisition 
of explosive materials, enter the following information in a separate 
record:
    (1) Date of importation or other acquisition.
    (2) Name or brand name of manufacturer and country of manufacture.
    (3) Manufacturer's marks of identification.
    (4) Quantity (applicable quantity units, such as pounds of 
explosives, number of detonators, number of display fireworks, etc.).
    (5) Description (dynamite (dyn), blasting agents (ba), detonators 
(det), display fireworks (df), etc.) and size (length and diameter or 
diameter only of display fireworks).
    (c) Each licensed importer shall, not later than the close of the 
next business day following the date of distribution of any explosive 
materials to another licensee or a permittee, enter in a separate record 
the following information:
    (1) Date of disposition.
    (2) Name or brand name of manufacturer and country of manufacture.
    (3) Manufacturer's marks of identification.
    (4) Quantity (applicable quantity units, such as pounds of 
explosives, number of detonators, number of display fireworks, etc.).
    (5) Description (dynamite (dyn), blasting agents (ba), detonators 
(det),

[[Page 952]]

display fireworks (df), etc.) and size (length and diameter or diameter 
only of display fireworks).
    (6) License or permit number of licensee or permittee to whom the 
explosive materials are distributed.
    (d) The regional director (compliance) may authorize alternate 
records to be maintained by a licensed importer to record his 
distribution of explosive materials when it is shown by the licensed 
importer that alternate records will accurately and readily disclose the 
information required by paragraph (c) of this section. A licensed 
importer who proposes to use alternate records shall submit a letter 
application to the regional director (compliance) and shall describe the 
proposed alternate records and the need for them. Alternate records are 
not to be employed by the licensed importer until approval is received 
from the regional director (compliance).
    (e) Each licensed importer shall maintain separate records of the 
sales or other distribution made of explosive materials to nonlicensees 
or nonpermittees. These records are maintained as prescribed by 
Sec. 55.126.

(Approved by the Office of Management and Budget under control number 
1512-0373)

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-172, 49 
FR 14941, Apr. 16, 1984; T.D. ATF-293, 55 FR 3721, Feb. 5, 1990; T.D. 
ATF-400, 63 FR 45003, Aug. 24, 1998]



Sec. 55.123  Records maintained by licensed manufacturers.

    (a) Each licensed manufacturer shall take true and accurate physical 
inventories which will include all explosive materials on hand required 
to be accounted for in the records kept under this part. The licensed 
manufacturer shall take a special inventory
    (1) At the time of commencing business, which is the effective date 
of the license issued upon original qualification under this part;
    (2) At the time of changing the location of his premises to another 
region;
    (3) At the time of discontinuing business; and
    (4) At any other time the regional director (compliance) may in 
writing require. Each special inventory is to be prepared in duplicate, 
the original of which is submitted to the regional director 
(compliance), and the duplicate retained by the licensed manufacturer. 
If a special inventory required by paragraphs (a) (1) through (4) of 
this section has not been taken during the calendar year, at least one 
physical inventory will be taken. However, the record of the yearly 
inventory, other than a special inventory required by paragraphs (a) (1) 
through (4) of this section, will remain on file for inspection instead 
of being sent to the regional director (compliance). (See also 
Sec. 55.127.)
    (b) Each licensed manufacturer shall not later than the close of the 
next business day following the date of manufacture or other acquisition 
of explosive materials, enter the following information in a separate 
record:
    (1) Date of manufacture or other acquisition.
    (2) Manufacturer's marks of identification.
    (3) Quantity (applicable quantity units, such as pounds of 
explosives, number of detonators, number of display fireworks, etc.).
    (4) Name, brand name or description (dynamite (dyn), blasting agents 
(ba), detonators (det), display fireworks (df), etc.) and size (length 
and diameter or diameter only of display fireworks).
    (c) Each licensed manufacturer shall, not later than the close of 
the next business day following the date of distribution of any 
explosive materials to another licensee or a permittee, enter in a 
separate record the following information:
    (1) Date of disposition.
    (2) Name or brand name of manufacturer or name of importer, as 
applicable, if acquired other than by his own manufacture.
    (3) Manufacturer's marks of identification.
    (4) Quantity (applicable quantity units, such as pounds of 
explosives, number of detonators, number of display fireworks, etc.).
    (5) Description (dynamite (dyn), blasting agents (ba), detonators 
(det), display fireworks (df), etc.) and size (length and diameter or 
diameter only of display fireworks).
    (6) License or permit number of licensee or permittee to whom the 
explosive materials are distributed.

[[Page 953]]

    (d) Each licensed manufacturer who manufactures explosive materials 
for his own use shall, not later than the close of the next business day 
following the date of use, enter in a separate record the following 
information:
    (1) Date of use.
    (2) Quantity (applicable quantity units, such as pounds of 
explosives, number of detonators, number of special fireworks, etc.).
    (3) Description (dynamite (dyn), blasting agents (ba), detonators 
(det), display fireworks (df), etc.) and size (length and diameter or 
diameter only of display fireworks).

Exception: A licensed manufacturer is exempt from the recordkeeping 
requirements of this subsection if the explosive materials are 
manufactured for his own use and used within a 24 hour period at the 
same site.

    (e) The regional director (compliance) may authorize alternate 
records to be maintained by a licensed manufacturer to record his 
distribution or use of explosive materials when it is shown by the 
licensed manufacturer that alternate records will accurately and readily 
disclose the information required by paragraph (c) of this section. A 
licensed manufacturer who proposes to use alternate records shall submit 
a letter application to the regional director (compliance) and shall 
describe the proposed alternate records and the need for them. Alternate 
records are not to be employed by the licensed manufacturer until 
approval is received from the regional director (compliance).
    (f) Each licensed manufacturer shall maintain separate records of 
the sales or other distribution made of explosive materials to 
nonlicensees or nonpermittees. These records are maintained as 
prescribed by Sec. 55.126.

(Approved by the Office of Management and Budget under control number 
1512-0373)

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-172, 49 
FR 14941, Apr. 16, 1984; T.D. ATF-293, 55 FR 3721, Feb. 5, 1990; T.D. 
ATF-400, 63 FR 45003, Aug. 24, 1998]



Sec. 55.124  Records maintained by licensed dealers.

    (a) Each licensed dealer shall take true and accurate physical 
inventories which will include all explosive materials on hand required 
to be accounted for in the records kept under this part. The licensed 
dealer shall take a special inventory
    (1) At the time of commencing business, which is the effective date 
of the license issued upon original qualification under this part;
    (2) At the time of changing the location of his premises to another 
region;
    (3) At the time of discontinuing business; and
    (4) At any other time the regional director (compliance) may in 
writing require. Each special inventory is to be prepared in duplicate, 
the original of which is submitted to the regional director 
(compliance), and the duplicate retained by the licensed dealer. If a 
special inventory required by paragraphs (a) (1) through (4) of this 
section has not been taken during the calendar year, at least one 
physical inventory will be taken. However, the record of the yearly 
inventory, other than a special inventory required by paragraphs (a) (1) 
through (4) of this section, will remain on file for inspection instead 
of being sent to the regional director (compliance). (See also 
Sec. 55.127.)
    (b) Each licensed dealer shall, not later than the close of the next 
business day following the date of purchase or other acquisition of 
explosive materials (except as provided in paragraph (d) of this 
section), enter the following information in a separate record:
    (1) Date of acquisition.
    (2) Name or brand name of manufacturer and name of importer (if 
any).
    (3) Manufacturer's marks of identification.
    (4) Quantity (applicable quantity units, such as pounds of 
explosives, number of detonators, number of display fireworks, etc.).
    (5) Description (dynamite (dyn), blasting agents (ba), detonators 
(det), display fireworks (df), etc.) and size (length and diameter or 
diameter only of display fireworks).
    (6) Name, address, and license or permit number of the person from 
whom the explosive materials are received.
    (c) Each licensed dealer shall, not later than the close of the next 
business day following the date of use (if the explosives are used by 
the dealer)

[[Page 954]]

or the date of distribution of any explosive materials to another 
licensee or a permittee (except as provided in paragraph (d) of this 
section), enter in a separate record the following information:
    (1) Date of disposition.
    (2) Name or brand name of manufacturer and name of importer (if 
any).
    (3) Manufacturer's marks of identification.
    (4) Quantity (applicable quantity units, such as pounds of 
explosives, number of detonators, number of display fireworks, etc.).
    (5) Description (dynamite (dyn), blasting agents (ba), detonators 
(det), display fireworks (df), etc.) and size (length and diameter or 
diameter only of display fireworks).
    (6) License or permit number of licensee or permittee to whom the 
explosive materials are distributed.
    (d) When a commercial record is kept by a licensed dealer showing 
the purchase or other acquisition information required for the permanent 
record prescribed by paragraph (b) of this section, or showing the 
distribution information required for the permanent record prescribed by 
paragraph (c) of this section, the licensed dealer acquiring or 
distributing the explosive materials may, for a period not exceeding 
seven days following the date of acquisition of distribution of the 
explosive materials, delay making the required entry into the permanent 
record of acquisition or distribution. However, until the required entry 
of acquisition or disposition is made in the permanent record, the 
commercial record must be (1) kept by the licensed dealer separate from 
other commercial documents kept by the licensee, and (2) readily 
available for inspection on the licensed premises.
    (e) The regional director (compliance) may authorize alternate 
records to be maintained by a licensed dealer to record his acquisition 
or disposition of explosive materials, when it is shown by the licensed 
dealer that alternate records will accurately and readily disclose the 
required information. A licensed dealer who proposes to use alternate 
records shall submit a letter application to the regional director 
(compliance) and shall describe the proposed alternate records and the 
need for them. Alternate records are not to be employed by the licensed 
dealer until approval is received from the regional director 
(compliance).
    (f) Each licensed dealer shall maintain separate records of the 
sales or other distribution made of explosive materials to nonlicensees 
or nonpermittees. These records are maintained as prescribed by 
Sec. 55.126.

(Approved by the Office of Management and Budget under control number 
1512-0373)

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-172, 49 
FR 14941, Apr. 16, 1984; T.D. ATF-293, 55 FR 3721, Feb. 5, 1990; T.D. 
ATF-400, 63 FR 45003, Aug. 24, 1998]



Sec. 55.125  Records maintained by permittees.

    (a) Each permittee shall take true and accurate physical inventories 
which shall include all explosive materials on hand required to be 
accounted for in the records kept under this part. The permittee shall 
take a special inventory
    (1) At the time of commencing business, which is the effective date 
of the permit issued upon original qualification under this part;
    (2) At the time of changing the location of his premises to another 
region;
    (3) At the time of discontinuing business; and
    (4) At any other time the regional director (compliance) may in 
writing require. Each special inventory is to be prepared in duplicate, 
the original of which is submitted to the regional director (compliance) 
and the duplicate retained by the permittee. If a special inventory 
required by paragraphs (a) (1) through (4) of this section has not been 
taken during the calendar year, a permittee is required to take at least 
one physical inventory. However, the record of the yearly inventory, 
other than a special inventory required by paragraphs (a) (1) through 
(4) of this section, will remain on file for inspection instead of being 
sent to the regional director (compliance). (See also Sec. 55.127).
    (b) Each permittee shall, not later than the close of the next 
business day following the date of acquisition of explosive materials, 
enter the following information in a separate record:

[[Page 955]]

    (1) Date of acquisition.
    (2) Name or brand name of manufacturer.
    (3) Manufacturer's marks of identification.
    (4) Quantity (applicable quantity units, such as pounds of 
explosives, number of detonators, number of display fireworks, etc.).
    (5) Description (dynamite (dyn), blasting agents (ba), detonators 
(det), display fireworks (df), (etc.) and size (length and diameter or 
diameter only of display fireworks)).
    (6) Name, address, and license number of the persons from whom the 
explosive materials are received.
    (c) Each permittee shall, not later than the close of the next 
business day following the date of disposition of surplus explosive 
materials to another permittee or a licensee, enter in a separate record 
the information prescribed in Sec. 55.124(c).
    (d) Each permittee shall maintain separate records of disposition of 
surplus stocks of explosive materials to nonlicensees or nonpermittees 
as prescribed in Sec. 55.126.
    (e) The regional director (compliance) may authorize alternate 
records to be maintained by a permittee to record his acquisition of 
explosive materials, when it is shown by the permittee that alternate 
records will accurately and readily disclose the required information. A 
permittee who proposes to use alternate records shall submit a letter 
application to the regional director (compliance) and shall describe the 
proposed alternate records and the need for them. Alternate records are 
not to be employed by the permittee until approval is received from the 
regional director (compliance).

(Approved by the Office of Management and Budget under control number 
1512-0373)

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-172, 49 
FR 14941, Apr. 16, 1984; T.D. ATF-293, 55 FR 3722, Feb. 5, 1990; T.D. 
ATF-400, 63 FR 45003, Aug. 24, 1998]



Sec. 55.126  Explosives transaction record.

    (a) A licensee or permittee shall not temporarily or permanently 
distribute explosive materials to any person, other than another 
licensee or permittee, unless he records the transaction on an 
explosives transaction record, ATF F 5400.4.
    (b) Before the distribution of explosive materials to a nonlicensee 
or nonpermittee who is a resident of the State in which the licensee or 
permittee maintains his business premises, or to a nonlicensee or 
nonpermittee who is not a resident of the State in which the licensee or 
permittee maintains his business premises and is acquiring explosive 
materials under Sec. 55.105(c), the licensee or permittee distributing 
the explosive materials shall obtain an executed ATF F 5400.4 from the 
distributee which contains all of the information required on the form 
and by the regulations in this part.
    (c) Completed ATF F 5400.4 is to be retained by the licensee or 
permittee as part of his permanent records in accordance with paragraph 
(d) of this section.
    (d) Each ATF F 5400.4 is retained in numerical (by transaction 
serial number) order commencing with ``1'' and continuing in regular 
sequence. When the numbering of any series reaches ``1,000,000,'' the 
licensee or permittee may recommence the series. The recommenced series 
is to be given an alphabetical prefix or suffix. Where there is a change 
in proprietorship, or in the individual, firm, corporate name or trade 
name, the series in use at the time of the change may be continued.
    (e) The requirements of this section are in addition to any other 
recordkeeping requirement contained in this part.
    (f) A licensee or permittee may obtain, upon request, a supply of 
ATF F 5400.4 from the Director.

(Approved by the Office of Management and Budget under control number 
1512-0184)

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-93, 46 
FR 50787, Oct. 15, 1981; T.D. ATF-172, 49 FR 14941, Apr. 16, 1984; T.D. 
ATF-446, 66 FR 16602, Mar. 27, 2001]



Sec. 55.127  Daily summary of magazine transactions.

    In taking the inventory required by Sec. Sec. 55.122, 55.123, 
55.124, and 55.125, a licensee or permittee shall enter the inventory in 
a record of daily summary transactions to be kept at each magazine of an 
approved storage facility;

[[Page 956]]

however, these records may be kept at one central location on the 
business premises if separate records of daily transactions are kept for 
each magazine. Not later than the close of the next business day, each 
licensee and permittee shall record by manufacturer's name or brand 
name, the total quantity received in and removed from each magazine 
during the day, and the total remaining on hand at the end of the day. 
Quantity entries for display fireworks may be expressed as the number 
and size of individual display fireworks in a finished state or as the 
number of packaged display segments or packaged displays. Information as 
to the number and size of display fireworks contained in any one 
packaged display segment or packaged display shall be provided to any 
ATF officer on request. Any discrepancy which might indicate a theft or 
loss of explosive materials is to be reported in acordance with 
Sec. 55.30.

[T.D. ATF-293, 55 FR 3722, Feb. 5, 1990, as amended by T.D. ATF-400, 63 
FR 45003, Aug. 24, 1998]



Sec. 55.128  Discontinuance of business.

    Where an explosive materials business or operations is discontinued 
and succeeded by a new licensee, the records prescribed by this subpart 
shall appropriately reflect such facts and shall be delivered to the 
successor. Where discontinuance of the business or operations is 
absolute, the records required by this subpart must be delivered within 
30 days following the business or operations discontinuance to any ATF 
office located in the region in which the business was located, or to 
the ATF Out-of-Business Records Center, Spring Mills Office Park, 882 
T.J. Jackson Drive, Falling Waters, West Virginia 25419. Where State law 
or local ordinance requires the delivery of records to other responsible 
authority, the Chief, Firearms and Explosives Licensing Center may 
arrange for the delivery of the records required by this subpart to such 
authority. (See also, Sec. 55.61.)

[T.D. ATF-290, 54 FR 53054, Dec. 27, 1989, as amended by T.D. ATF-446a, 
66 FR 19089, Apr. 13, 2001]



Sec. 55.129  Exportation.

    Exportation of explosive materials is to be in accordance with the 
applicable provisions of section 38 of the Arms Export Control Act (22 
U.S.C. 2778) and implementing regulations. However, a licensed importer, 
licensed manufacturer, or licensed dealer exporting explosive materials 
shall maintain records showing the manufacture or acquisition of 
explosive materials as required by this part and records showing the 
quantity, the manufacturer's name or brand name of explosive materials, 
the name and address of the foreign consignee of the explosive 
materials, and the date the explosive materials were exported. See 
Sec. 55.180 for regulations concerning the exportation of plastic 
explosives.

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-387, 62 
FR 8377, Feb. 25, 1997]



Sec. 55.130  [Reserved]



                          Subpart H--Exemptions



Sec. 55.141  Exemptions.

    (a) General. Except for the provisions of Secs. 55.180 and 55.181, 
this part does not apply to:
    (1) Any aspect of the transportation of explosive materials via 
railroad, water, highway, or air which is regulated by the U.S. 
Department of Transportation and its agencies, and which pertains to 
safety.
    (2) The use of explosive materials in medicines and medicinal agents 
in the forms prescribed by the official United States Pharmacopeia or 
the National Formulary. ``The United States Pharmacopeia and The 
National Formulary,'' USP and NF Compendia, are available from the 
United States Pharmacopeial Convention, Inc., 12601 Twinbrook Parkway, 
Rockville, Maryland 20852.
    (3) The transportation, shipment, receipt, or importation of 
explosive materials for delivery to any agency of the United States or 
to any State or its political subdivision.
    (4) Small arms ammunition and components of small arms ammunition.
    (5) The manufacture under the regulation of the military department 
of

[[Page 957]]

the United States of explosive materials for, or their distribution to 
or storage or possession by, the military or naval services or other 
agencies of the United States.
    (6) Arsenals, navy yards, depots, or other establishments owned by, 
or operated by or on behalf of, the United States.
    (7) The importation, distribution, and storage of fireworks 
classified as UN0336, UN0337, UN0431, or UN0432 explosives by the U.S. 
Department of Transportation at 49 CFR 172.101 and generally known as 
``consumer fireworks'' or ``articles pyrotechnic.''
    (8) Gasoline, fertilizers, propellant actuated devices, or 
propellant actuated industrial tools manufactured, imported, or 
distributed for their intended purposes.
    (9) Industrial and laboratory chemicals which are intended for use 
as reagents and which are packaged and shipped pursuant to U.S. 
Department of Transportation regulations, 49 CFR Parts 100 to 177, which 
do not require explosives hazard warning labels.
    (b) Black powder. Except for the provisions applicable to persons 
required to be licensed under subpart D, this part does not apply with 
respect to commercially manufactured black powder in quantities not to 
exceed 50 pounds, percussion caps, safety and pyrotechnic fuses, quills, 
quick and slow matches, and friction primers, if the black powder is 
intended to be used solely for sporting, recreational, or cultural 
purposes in antique firearms, as defined in 18 U.S.C. 921(a)(16) or 
antique devices, as exempted from the term ``destructive devices'' in 18 
U.S.C. 921(a)(4).

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981 as amended by T.D. ATF-87, 46 FR 
46916, Sept. 23, 1981; T.D. ATF-293, 55 FR 3722, Feb. 5, 1990; T.D. ATF-
387, 62 FR 8377, Feb. 25, 1997; T.D. ATF-400, 63 FR 45003, Aug. 24, 
1998]



Sec. 55.142  Relief from disabilities incurred by indictment, information or conviction.

    (a) Any person may make application for relief from the disabilities 
under the Act incurred by reason of an indictment or information for, or 
conviction of, a crime punishable by imprisonment for a term exceeding 
one year.
    (b) An application for relief from disabilities is filed with the 
Director and supported by data that the applicant considers appropriate. 
In the case of a corporation, or of any person having the power to 
direct or control the management of the corporation, the supporting data 
is to include information as to the absence of culpability in the 
offense for which the corporation, or any such person, was indicted, 
formally accused or convicted.
    (c) The Director may grant relief to an applicant if it is 
established to the satisfaction of the Director that the circumstances 
regarding the indictment, information or conviction and the applicant's 
record and reputation are such that the applicant will not be likely to 
act in a manner dangerous to public safety, and that the granting of the 
relief would not be contrary to the public interest.
    (d) A person who has been granted relief under this section is 
relieved of any disabilities imposed by the Act with respect to engaging 
in the business of importing, manufacturing, or dealing in explosive 
materials, or the purchase of explosive materials, that were incurred by 
reason of such indictment, information or conviction.
    (e)(1) A licensee or permittee who is under indictment or 
information for, or convicted of, a crime punishable by imprisonment for 
a term exceeding one year during the term of a current license or 
permit, or while he has pending a license or permit renewal application, 
shall not be barred from licensed or permit operations for 30 days after 
the date of indictment or information or 30 days after the date upon 
which his conviction becomes final. Also, if he files his application 
for relief under this section within such 30 day period, he may further 
continue licensed or permit operations while his application is pending. 
A licensee or permittee who does not file an application within 30 days 
from the date of his indictment or information, or within 30 days from 
the date his conviction becomes final, shall not continue licensed or 
permit operations beyond 30 days from the date of his indictment or 
information or beyond 30 days from the date his conviction becomes 
final.

[[Page 958]]

    (2) In the event the term of a license or permit of a person expires 
during the 30 day period following the date of indictment of information 
of during the 30 day period after the date upon which his conviction 
becomes final or while his application for relief is pending, he shall 
file a timely application for renewal of his license or permit in order 
to continue licensed or permit operations. The license or permit 
application is to show that the applicant has been indicted or under 
information for, or convicted of, a crime punishable by imprisonment for 
a term exceeding one year.
    (3) A licensee or permittee shall not continue licensed or permit 
operations beyond 30 days following the date the Director issues 
notification that the licensee's or permittee's application for removal 
of the disabilities resulting from an indictment, information or 
conviction has been denied.
    (4) When a licensee or permittee may no longer continue licensed or 
permit operations under this section, any application for renewal of 
license of permit filed by the licensee or permittee while his 
application for removal of disabilities resulting from an indictment, 
information or conviction is pending, will be denied by the regional 
director (compliance).



      Subpart I--Unlawful Acts, Penalties, Seizures and Forfeitures



Sec. 55.161  Engaging in business without a license.

    Any person engaging in the business of importing, manufacturing, or 
dealing in explosive materials without a license issued under the Act, 
shall be fined not more than $10,000 or imprisoned not more than 10 
years, or both.



Sec. 55.162  False statement or representation.

    Any person who knowingly withholds information or makes any false or 
fictitious oral or written statement or furnishes or exhibits any false, 
fictitious, or misrepresented identification, intended or likely to 
deceive for the purpose of obtaining explosive materials, or a license, 
permit, exemption, or relief from disability under the Act, shall be 
fined not more than $10,000 or imprisoned not more than 10 years, or 
both.



Sec. 55.163  False entry in record.

    Any licensed importer, licensed manufacturer, licensed dealer, or 
permittee who knowingly makes any false entry in any record required to 
be kept under subpart G of this part, shall be fined not more than 
$10,000 or imprisoned not more than 10 years, or both.

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-400, 63 
FR 45003, Aug. 24, 1998]



Sec. 55.164  Unlawful storage.

    Any person who stores any explosive material in a manner not in 
conformity with this part, shall be fined not more than $1,000 or 
imprisoned not more than one year, or both.



Sec. 55.165  Failure to report theft or loss.

    Any person who has knowledge of the theft or loss of any explosive 
materials from his stock and fails to report the theft or loss within 24 
hours of discovery in accordance with Sec. 55.30, shall be fined not 
more than $1,000 or imprisoned not more than one year, or both.



Sec. 55.166  Seizure or forfeiture.

    Any explosive materials involved or used or intended to be used in 
any violation of the Act or of this part or in any violation of any 
criminal law of the United States are subject to seizure and forfeiture, 
and all provisions of title 26, U.S.C. relating to the seizure, 
forfeiture, and disposition of firearms, as defined in 26 U.S.C. 
5845(a), will, so far as applicable, extend to seizures and forfeitures 
under the Act. (See Sec. 72.27 of this title for regulations on summary 
destruction of explosive materials which are impracticable or unsafe to 
remove to a place of storage.)

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-363, 60 
FR 17449, Apr. 6, 1995]

[[Page 959]]



                Subpart J--Marking of Plastic Explosives



Sec. 55.180  Prohibitions relating to unmarked plastic explosives.

    (a) No person shall manufacture any plastic explosive that does not 
contain a detection agent.
    (b) No person shall import or bring into the United States, or 
export from the United States, any plastic explosive that does not 
contain a detection agent. This paragraph does not apply to the 
importation or bringing into the United States, or the exportation from 
the United States, of any plastic explosive that was imported or brought 
into, or manufactured in the United States prior to April 24, 1996, by 
or on behalf of any agency of the United States performing military or 
police functions (including any military reserve component) or by or on 
behalf of the National Guard of any State, not later than 15 years after 
the date of entry into force of the Convention on the Marking of Plastic 
Explosives with respect to the United States, i.e., not later than June 
21, 2013.
    (c) No person shall ship, transport, transfer, receive, or possess 
any plastic explosive that does not contain a detection agent. This 
paragraph does not apply to:
    (1) The shipment, transportation, transfer, receipt, or possession 
of any plastic explosive that was imported or brought into, or 
manufactured in the United States prior to April 24, 1996, by any person 
during the period beginning on that date and ending on April 24, 1999; 
or
    (2) The shipment, transportation, transfer, receipt, or possession 
of any plastic explosive that was imported or brought into, or 
manufactured in the United States prior to April 24, 1996, by or on 
behalf of any agency of the United States performing a military or 
police function (including any military reserve component) or by or on 
behalf of the National Guard of any State, not later than 15 years after 
the date of entry into force of the Convention on the Marking of Plastic 
Explosives with respect to the United States, i.e., not later than June 
21, 2013.
    (d) When used in this subpart, terms are defined as follows:
    (1) Convention on the Marking of Plastic Explosives means the 
Convention on the Marking of Plastic Explosives for the Purposes of 
Detection, Done at Montreal on 1 March 1991.
    (2) ``Date of entry into force'' of the Convention on the Marking of 
Plastic Explosives means that date on which the Convention enters into 
force with respect to the U.S. in accordance with the provisions of 
Article XIII of the Convention on the Marking of Plastic Explosives. The 
Convention entered into force on June 21, 1998.
    (3) Detection agent means any one of the substances specified in 
this paragraph when introduced into a plastic explosive or formulated in 
such explosive as a part of the manufacturing process in such a manner 
as to achieve homogeneous distribution in the finished explosive, 
including--
    (i) Ethylene glycol dinitrate (EGDN), 
C2H4(NO3)2, molecular weight 
152, when the minimum concentration in the finished explosive is 0.2 
percent by mass;
    (ii) 2,3-Dimethyl-2,3-dinitrobutane (DMNB), 
C6H12(NO2)2, molecular 
weight 176, when the minimum concentration in the finished explosive is 
0.1 percent by mass;
    (iii) Para-Mononitrotoluene (p-MNT), 
C7H7NO2, molecular weight 137, when the 
minimum concentration in the finished explosive is 0.5 percent by mass;
    (iv) Ortho-Mononitrotoluene (o-MNT), 
C7H7NO2, molecular weight 137, when the 
minimum concentration in the finished explosive is 0.5 percent by mass; 
and
    (v) Any other substance in the concentration specified by the 
Director, after consultation with the Secretary of State and Secretary 
of Defense, that has been added to the table in Part 2 of the Technical 
Annex to the Convention on the Marking of Plastic Explosives.
    (4) Plastic explosive means an explosive material in flexible or 
elastic sheet form formulated with one or more high explosives which in 
their pure form has a vapor pressure less than 10-\4\ Pa at a 
temperature of 25  deg.C, is formulated with a binder material, and is 
as a mixture malleable or flexible at normal room temperature. High 
explosives, as defined in Sec. 55.202(a), are explosive materials which 
can be

[[Page 960]]

caused to detonate by means of a blasting cap when unconfined.

[T.D. ATF-387, 62 FR 8376, Feb. 25, 1997, as amended by T.D. ATF-419, 64 
FR 55628, Oct. 14, 1999]



Sec. 55.181  Reporting of plastic explosives.

    All persons, other than an agency of the United States (including 
any military reserve component) or the National Guard of any State, 
possessing any plastic explosive on April 24, 1996, shall submit a 
report to the Director no later than August 22, 1996. The report shall 
be in writing and mailed by certified mail (return receipt requested) to 
the Director at P.O. Box 50204, Washington, DC 20091-0204. The report 
shall include the quantity of plastic explosives possessed on April 24, 
1996; any marks of identification on such explosives; the name and 
address of the manufacturer or importer; the storage location of such 
explosives, including the city and State; and the name and address of 
the person possessing the plastic explosives.

(Approved by the Office of Management and Budget under control number 
1512-0535)

[T.D. ATF-382, 61 FR 38085, July 23, 1996, as amended by T.D. ATF-387, 
62 FR 8377, Feb. 25, 1997]



Sec. 55.182  Exceptions.

    It is an affirmative defense against any proceeding involving 
Secs. 55.180 and 55.181 if the proponent proves by a preponderance of 
the evidence that the plastic explosive--
    (a) Consisted of a small amount of plastic explosive intended for 
and utilized solely in lawful--
    (1) Research, development, or testing of new or modified explosive 
materials;
    (2) Training in explosives detection or development or testing of 
explosives detection equipment; or
    (3) Forensic science purposes; or
    (b) Was plastic explosive that, by April 24, 1999, will be or is 
incorporated in a military device within the territory of the United 
States and remains an integral part of such military device, or is 
intended to be, or is incorporated in, and remains an integral part of a 
military device that is intended to become, or has become, the property 
of any agency of the United States performing military or police 
functions (including any military reserve component) or the National 
Guard of any State, wherever such device is located. For purposes of 
this paragraph, the term ``military device'' includes, but is not 
restricted to, shells, bombs, projectiles, mines, missiles, rockets, 
shaped charges, grenades, perforators, and similar devices lawfully 
manufactured exclusively for military or police purposes.

[T.D. ATF-387, 62 FR 8377, Feb. 25, 1997]



Sec. 55.183  Importation of plastic explosives on or after April 24, 1997.

    Persons filing Form 6 applications for the importation of plastic 
explosives on or after April 24, 1997, shall attach to the application 
the following written statement, prepared in triplicate, executed under 
the penalties of perjury:
    (a) ``I declare under the penalties of perjury that the plastic 
explosive to be imported contains a detection agent as required by 27 
CFR 55.180(b)''; or
    (b) ``I declare under the penalties of perjury that the plastic 
explosive to be imported is a ``small amount'' to be used for research, 
training, or testing purposes and is exempt from the detection agent 
requirement pursuant to 27 CFR 55.182.''

[T.D. ATF-387, 62 FR 8377, Feb. 25, 1997]



Sec. 55.184  Statements of process and samples.

    (a) A complete and accurate statement of process with regard to any 
plastic explosive or to any detection agent that is to be introduced 
into a plastic explosive or formulated in such plastic explosive shall 
be submitted by a licensed manufacturer or licensed importer, upon 
request, to the Director.
    (b) Samples of any plastic explosive or detection agent shall be 
submitted by a licensed manufacturer or licensed importer, upon request, 
to the Director.

(Paragraph (a) approved by the Office of Management and Budget under 
control number 1512-0539)

[T.D. ATF-387, 62 FR 8378, Feb. 25, 1997]

[[Page 961]]



Sec. 55.185  Criminal sanctions.

    Any person who violates the provisions of 18 U.S.C. 842(l)-(o) shall 
be fined under title 18, U.S.C., imprisoned for not more than 10 years, 
or both.

[T.D. ATF-387, 62 FR 8378, Feb. 25, 1997]



Sec. 55.186  Seizure or forfeiture.

    Any plastic explosive that does not contain a detection agent in 
violation of 18 U.S.C. 842(l)-(n) is subject to seizure and forfeiture, 
and all provisions of 19 U.S.C. 1595a, relating to seizure, forfeiture, 
and disposition of merchandise introduced or attempted to be introduced 
into the U.S. contrary to law, shall extend to seizures and forfeitures 
under this subpart. See Sec. 72.27 of this chapter for regulations on 
summary destruction of plastic explosives that do not contain a 
detection agent.

[T.D. ATF-387, 62 FR 8378, Feb. 25, 1997]



                           Subpart K--Storage



Sec. 55.201  General.

    (a) Section 842(j) of the Act and Sec. 55.29 of this part require 
that the storage of explosive materials by any person must be in 
accordance with the regulations in this part. Further, section 846 of 
this Act authorizes regulations to prevent the recurrence of accidental 
explosions in which explosive materials were involved. The storage 
standards prescribed by this subpart confer no right or privileges to 
store explosive materials in a manner contrary to State or local law.
    (b) The Director may authorize alternate construction for explosives 
storage magazines when it is shown that the alternate magazine 
construction is substantially equivalent to the standards of safety and 
security contained in this subpart. Any alternate explosive magazine 
construction approved by the Director prior to August 9, 1982, will 
continue as approved unless notified in writing by the Director. Any 
person intending to use alternate magazine construction shall submit a 
letter application to the regional director (compliance) for transmittal 
to the Director, specifically describing the proposed magazine. 
Explosive materials may not be stored in alternate magazines before the 
applicant has been notified that the application has been approved.
    (c) A licensee or permittee who intends to make changes in his 
magazines, or who intends to construct or acquire additional magazines, 
shall comply with Sec. 55.63.
    (d) The regulations set forth in Sec. Sec. 55.221 through 55.224 
pertain to the storage of display fireworks, pyrotechnic compositions, 
and explosive materials used in assembling fireworks and articles 
pyrotechnic.
    (e) The provisions of Sec. 55.202(a) classifying flash powder and 
bulk salutes as high explosives are mandatory after March 7, 1990: 
Provided, that those persons who hold licenses or permits under this 
part on that date shall, with respect to the premises covered by such 
licenses or permits, comply with the high explosives storage 
requirements for flash powder and bulk salutes by March 7, 1991.
    (f) Any person who stores explosive materials shall notify the 
authority having jurisdiction for fire safety in the locality in which 
the explosive materials are being stored of the type, magazine capacity, 
and location of each site where such explosive materials are stored. 
Such notification shall be made orally before the end of the day on 
which storage of the explosive materials commenced and in writing within 
48 hours from the time such storage commenced.

(Paragraph (f) approved by the Office of Management and Budget under 
control number 1512-0536)

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-293, 55 
FR 3722, Feb. 5, 1990; T.D. ATF-400, 63 FR 45003, Aug. 24, 1998]



Sec. 55.202  Classes of explosive materials.

    For purposes of this part, there are three classes of explosive 
materials. These classes, together with the description of explosive 
materials comprising each class, are as follows:
    (a) High explosives. Explosive materials which can be caused to 
detonate by means of a blasting cap when unconfined, (for example, 
dynamite, flash powders, and bulk salutes). See also Sec. 55.201(e).
    (b) Low explosives. Explosive materials which can be caused to 
deflagrate

[[Page 962]]

when confined (for example, black powder, safety fuses, igniters, 
igniter cords, fuse lighters, and ``display fireworks'' classified as 
UN0333, UN0334, or UN0335 by the U.S. Department of Transportation 
regulations at 49 CFR 172.101, except for bulk salutes).
    (c) Blasting agents. (For example, ammonium nitrate-fuel oil and 
certain water-gels (see also Sec. 55.11).

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-293, 55 
FR 3722, Feb. 5, 1990; T.D. ATF-400, 63 FR 45003, Aug. 24, 1998]



Sec. 55.203  Types of magazines.

    For purposes of this part, there are five types of magazines. These 
types, together with the classes of explosive materials, as defined in 
Sec. 55.202, which will be stored in them, are as follows:
    (a) Type 1 magazines. Permanent magazines for the storage of high 
explosives, subject to the limitations prescribed by Secs. 55.206 and 
55.213. Other classes of explosive materials may also be stored in type 
1 magazines.
    (b) Type 2 magazines. Mobile and portable indoor and outdoor 
magazines for the storage of high explosives, subject to the limitations 
prescribed by Secs. 55.206, 55.208(b), and 55.213. Other classes of 
explosive materials may also be stored in type 2 magazines.
    (c) Type 3 magazines. Portable outdoor magazines for the temporary 
storage of high explosives while attended (for example, a ``day-box''), 
subject to the limitations prescribed by Secs. 55.206 and 55.213. Other 
classes of explosives materials may also be stored in type 3 magazines.
    (d) Type 4 magazines. Magazines for the storage of low explosives, 
subject to the limitations prescribed by Secs. 55.206(b), 55.210(b), and 
55.213. Blasting agents may be stored in type 4 magazines, subject to 
the limitations prescribed by Secs. 55.206(c), 55.211(b), and 55.213. 
Detonators that will not mass detonate may also be stored in type 4 
magazines, subject to the limitations prescribed by Secs. 55.206(a), 
55.210(b), and 55.213.
    (e) Type 5 magazines. Magazines for the storage of blasting agents, 
subject to the limitations prescribed by Secs. 55.206(c), 55.211(b), and 
55.213.



Sec. 55.204  Inspection of magazines.

    Any person storing explosive materials shall inspect his magazines 
at least every seven days. This inspection need not be an inventory, but 
must be sufficient to determine whether there has been unauthorized 
entry or attempted entry into the magazines, or unauthorized removal of 
the contents of the magazines.



Sec. 55.205  Movement of explosive materials.

    All explosive materials must be kept in locked magazines meeting the 
standards in this subpart unless they are:
    (a) In the process of manufacture;
    (b) Being physically handled in the operating process of a licensee 
or user;
    (c) Being used; or
    (d) Being transported to a place of storage or use by a licensee or 
permittee or by a person who has lawfully acquired explosive materials 
under Sec. 55.106.



Sec. 55.206  Location of magazines.

    (a) Outdoor magazines in which high explosives are stored must be 
located no closer to inhabited buildings, passenger railways, public 
highways, or other magazines in which high explosives are stored, than 
the minimum distances specified in the table of distances for storage of 
explosive materials in Sec. 55.218.
    (b) Outdoor magazines in which low explosives are stored must be 
located no closer to inhibited buildings, passenger railways, public 
highways, or other magazines in which explosive materials are stored, 
than the minimum distances specified in the table of distances for 
storage of low explosives in Sec. 55.219, except that the table of 
distances in Sec. 55.224 shall apply to the storage of display 
fireworks. The distances shown in Sec. 55.219 may not be reduced by the 
presence of barricades.
    (c)(1) Outdoor magazines in which blasting agents in quantities of 
more than 50 pounds are stored must be located no closer to inhabited 
buildings, passenger railways, or public highways than the minimum 
distances specified in the table of distances for storage of explosive 
materials in Sec. 55.218.

[[Page 963]]

    (2) Ammonium nitrate and magazines in which blasting agents are 
stored must be located no closer to magazines in which high explosives 
or other blasting agents are stored than the minimum distances specified 
in the table of distances for the separation of ammonium nitrate and 
blasting agents in Sec. 55.220. However, the minimum distances for 
magazines in which explosives and blasting agents are stored from 
inhabited buildings, etc., may not be less than the distances specified 
in the table of distances for storage of explosives materials in 
Sec. 55.218.

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-293, 55 
FR 3722, Feb. 5, 1990; T.D. ATF-400, 63 FR 45003, Aug. 24, 1998]



Sec. 55.207  Construction of type 1 magazines.

    A type 1 magazine is a permanent structure: a building, an igloo or 
``Army-type structure'', a tunnel, or a dugout. It is to be bullet-
resistant, fire-resistant, weather-resistant, theft-resistant, and 
ventilated.
    (a) Buildings. All building type magazines are to be constructed of 
masonry, wood, metal, or a combination of these materials, and have no 
openings except for entrances and ventilation. The ground around 
building magazines must slope away for drainage or other adequate 
drainage provided.
    (1) Masonry wall construction. Masonry wall construction is to 
consist of brick, concrete, tile, cement block, or cinder block and be 
not less than 6 inches in thickness. Hollow masonry units used in 
construction must have all hollow spaces filled with well-tamped, 
coarse, dry sand or weak concrete (at least a mixture of one part cement 
and eight parts of sand with enough water to dampen the mixture while 
tamping in place). Interior walls are to be constructed of, or covered 
with, a nonsparking material.
    (2) Fabricated metal wall construction. Metal wall construction is 
to consist of sectional sheets of steel or aluminum not less than number 
14-gauge, securely fastened to a metal framework. Metal wall 
construction is either lined inside with brick, solid cement blocks, 
hardwood not less than four inches thick, or will have at least a six 
inch sand fill between interior and exterior walls. Interior walls are 
to be constructed of, or covered with, a nonsparking material.
    (3) Wood frame wall construction. The exterior of outer wood walls 
is to be covered with iron or aluminum not less than number 26-gauge. An 
inner wall of, or covered with nonsparking material will be constructed 
so as to provide a space of not less than six inches between the outer 
and inner walls. The space is to be filled with coarse, dry sand or weak 
concrete.
    (4) Floors. Floors are to be constructed of, or covered with, a 
nonsparking material and shall be strong enough to bear the weight of 
the maximum quantity to be stored. Use of pallets covered with a 
nonsparking material is considered equivalent to a floor constructed of 
or covered with a nonsparking material.
    (5) Foundations. Foundations are to be constructed of brick, 
concrete, cement block, stone, or wood posts. If piers or posts are 
used, in lieu of a continuous foundation, the space under the buildings 
is to be enclosed with metal.
    (6) Roof. Except for buildings with fabricated metal roofs, the 
outer roof is to be covered with no less than number 26-guage iron or 
aluminum, fastened to at least \7/8\ inch sheathing.
    (7) Bullet-resistant ceilings or roofs. Where it is possible for a 
bullet to be fired directly through the roof and into the magazine at 
such an angle that the bullet would strike the explosives within, the 
magazine is to be protected by one of the following methods:
    (i) A sand tray lined with a layer of building paper, plastic, or 
other nonporous material, and filled with not less than four inches of 
coarse, dry sand, and located at the tops of inner walls covering the 
entire ceiling area, except that portion necessary for ventilation.
    (ii) A fabricated metal roof constructed of \3/16\-inch plate steel 
lined with four inches of hardwood. (For each additional \1/16\ inch of 
plate steel, the hardwood lining may be decreased one inch.)
    (8) Doors. All doors are to be constructed of not less than \1/4\ 
inch plate steel and lined with at least two inches of hardwood. Hinges 
and hasps are to

[[Page 964]]

be attached to the doors by welding, riveting or bolting (nuts on inside 
of door). They are to be installed in such a manner that the hinges and 
hasps cannot be removed when the doors are closed and locked.
    (9) Locks. Each door is to be equipped with (i) two mortise locks; 
(ii) two padlock fastened in separate hasps and staples; (iii) a 
combination of a mortise lock and a padlock; (iv) a mortise lock that 
requires two keys to open; or (v) a three-point lock. Padlocks must have 
at least five tumblers and a casehardened shackle of at least \3/8\ inch 
diameter. Padlocks must be protected with not less than \1/4\ inch steel 
hoods constructed so as to prevent sawing or lever action on the locks, 
hasps, and staples. These requirements do not apply to magazine doors 
that are adequately secured on the inside by means of a bolt, lock, or 
bar that cannot be actuated from the outside.
    (10) Ventilation. Ventilation is to be provided to prevent dampness 
and heating of stored explosive materials. Ventilation openings must be 
screened to prevent the entrance of sparks. Ventilation openings in side 
walls and foundations must be offset or shielded for bullet-resistant 
purposes. Magazines having foundation and roof ventilators with the air 
circulating between the side walls and the floors and between the side 
walls and the ceiling must have a wooden lattice lining or equivalent to 
prevent the packages of explosive materials from being stacked against 
the side walls and blocking the air circulation.
    (11) Exposed metal. No sparking material is to be exposed to contact 
with the stored explosive materials. All ferrous metal nails in the 
floor and side walls, which might be exposed to contact with explosive 
materials, must be blind nailed, countersunk, or covered with a 
nonsparking lattice work or other nonsparking material.
    (b) Igloos, ``Army-type structures'', tunnels, and dugouts. Igloo, 
``Army-type structure'', tunnel, and dugout magazines are to be 
constructed of reinforced concrete, masonry, metal, or a combination of 
these materials. They must have an earthmound covering of not less than 
24 inches on the top, sides and rear unless the magazine meets the 
requirements of paragraph (a)(7) of this section. Interior walls and 
floors must be constructed of, or covered with, a nonsparking material. 
Magazines of this type are also to be constructed in conformity with the 
requirements of paragraph (a)(4) and paragraphs (a)(8) through (11) of 
this section.



Sec. 55.208  Construction of type 2 magazines.

    A type 2 magazine is a box, trailer, semitrailer, or other mobile 
facility.
    (a) Outdoor magazines--(1) General. Outdoor magazines are to be 
bullet-resistant, fire-resistant, weather-resistant, theft-resistant, 
and ventilated. They are to be supported to prevent direct contact with 
the ground and, if less than one cubic yard in size, must be securely 
fastened to a fixed object. The ground around outdoor magazines must 
slope away for drainage or other adequate drainage provided. When 
unattended, vehicular magazines must have wheels removed or otherwise 
effectively immobiliized by kingpin locking devices or other methods 
approved by the Director.
    (2) Exterior construction. The exterior and doors are to be 
constructed of not less than \1/4\-inch steel and lined with at least 
two inches of hardwood. Magazines with top openings will have lids with 
water-resistant seals or which overlap the sides by at least one inch 
when in a closed position.
    (3) Hinges and hasps. Hinges and hasps are to be attached to doors 
by welding, riveting, or bolting (nuts on inside of door). Hinges and 
hasps must be installed so that they cannot be removed when the doors 
are closed and locked.
    (4) Locks. Each door is to be equipped with (i) two mortise locks; 
(ii) two padlocks fastened in separate hasps and staples; (iii) a 
combination of a mortise lock and a padlock; (iv) a mortise lock that 
requires two keys to open; or (v) a three-point lock. Padlocks must have 
at least five tumblers and a case-hardened shackle of at least \3/8\-
inch diameter. Padlocks must be protected with not less than \1/4\-inch 
steel hoods constructed so as to prevent sawing or lever action on the 
locks, hasps, and staples. These requirements do not apply to magazine 
doors that are adequately secured on the inside by means

[[Page 965]]

of a bolt, lock, or bar that cannot be actuated from the outside.
    (b) Indoor magazines--(1) General. Indoor magazines are to be fire-
resistant and theft-resistant. They need not be bullet-resistant and 
weather-resistant if the buildings in which they are stored provide 
protection from the weather and from bullet penetration. No indoor 
magazine is to be located in a residence or dwelling. The indoor storage 
of high explosives must not exceed a quantity of 50 pounds. More than 
one indoor magazine may be located in the same building if the total 
quantity of explosive materials stored does not exceed 50 pounds. 
Detonators must be stored in a separate magazine (except as provided in 
Sec. 55.213) and the total quantity of detonators must not exceed 5,000.
    (2) Exterior construction. Indoor magazines are to be constructed of 
wood or metal according to one of the following specifications:
    (i) Wood indoor magazines are to have sides, bottoms and doors 
constructed of at least two inches of hardwood and are to be well braced 
at the corners. They are to be covered with sheet metal of not less than 
number 26-gauge (.0179 inches). Nails exposed to the interior of 
magazines must be countersunk.
    (ii) Metal indoor magazines are to have sides, bottoms and doors 
constructed of not less than number 12-gauge (.1046 inches) metal and be 
lined inside with a nonsparking material. Edges of metal covers must 
overlap sides at least one inch.
    (3) Hinges and hasps. Hinges and hasps are to be attached to doors 
by welding, riveting, or bolting (nuts on inside of door). Hinges and 
hasps must be installed so that they cannot be removed when the doors 
are closed and locked.
    (4) Locks. Each door is to be equipped with (i) two mortise locks; 
(ii) two padlocks fastened in separate hasps and staples; (iii) a 
combination of a mortise lock and a padlock; (iv) a mortise lock that 
requires two keys to open; or (v) a three-point lock. Padlocks must have 
at least five tumblers and a case-hardened shackle of at least \3/8\-
inch diameter. Padlocks must be protected with not less than \1/4\-inch 
steel hoods constructed so as to prevent sawing or lever action on the 
locks, hasps, and staples. Indoor magazines located in secure rooms that 
are locked as provided in this subparagraph may have each door locked 
with one steel padlock (which need not be protected by a steel hood) 
having at least five tumblers and a case-hardened shackle of at least 
\3/8\-inch diameter, if the door hinges and lock hasp are securely 
fastened to the magazine. These requirements do not apply to magazine 
doors that are adequately secured on the inside by means of a bolt, 
lock, or bar that cannot be actuated from the outside.
    (c) Detonator boxes. Magazines for detonators in quantities of 100 
or less are to have sides, bottoms and doors constructed of not less 
than number 12-gauge (.1046 inches) metal and lined with a nonsparking 
material. Hinges and hasps must be attached so they cannot be removed 
from the outside. One steel padlock (which need not be protected by a 
steel hood) having at least five tumblers and a case-hardened shackle of 
at least \3/8\-inch diameter is sufficient for locking purposes.



Sec. 55.209  Construction of type 3 magazines.

    A type 3 magazine is a ``day-box'' or other portable magazine. It 
must be fire-resistant, weather-resistant, and theft-resistant. A type 3 
magazine is to be constructed of not less than number 12-gauge (.1046 
inches) steel, lined with at least either \1/2\-inch plywood or \1/2\-
inch Masonite-type hardboard. Doors must overlap sides by at least one 
inch. Hinges and hasps are to be attached by welding, riveting or 
bolting (nuts on inside). One steel padlock (which need not be protected 
by a steel hood) having at least five tumblers and a case-hardened 
shackle of at least \3/8\-inch diameter is sufficient for locking 
purposes. Explosive materials are not to be left unattended in type 3 
magazines and must be removed to type 1 or 2 magazines for unattended 
storage.



Sec. 55.210  Construction of type 4 magazines.

    A type 4 magazine is a building, igloo or ``Army-type structure'', 
tunnel, dugout, box, trailer, or a semitrailer or other mobile magazine.

[[Page 966]]

    (a) Outdoor magazines--(1) General. Outdoor magazines are to be 
fire-resistant, weather-resistant, and theft-resistant. The ground 
around outdoor magazines must slope away for drainage or other adequate 
drainage be provided. When unattended, vehicular magazines must have 
wheels removed or otherwise be effectively immobilized by kingpin 
locking devices or other methods approved by the Director.
    (2) Construction. Outdoor magazines are to be constructed of 
masonry, metal-covered wood, fabricated metal, or a combination of these 
materials. Foundations are to be constructed of brick, concrete, cement 
block, stone, or metal or wood posts. If piers or posts are used, in 
lieu of a continuous foundation, the space under the building is to be 
enclosed with fire-resistant material. The walls and floors are to be 
constructed of, or covered with, a nonsparking material or lattice work. 
The doors must be metal or solid wood covered with metal.
    (3) Hinges and hasps. Hinges and hasps are to be attached to doors 
by welding, riveting, or bolting (nuts on inside of door). Hinges and 
hasps must be installed so that they cannot be removed when the doors 
are closed and locked.
    (4) Locks. Each door is to be equipped with (i) two mortise locks; 
(ii) two padlocks fastened in separate hasps and staples; (iii) a 
combination of a mortise lock and a padlock; (iv) a mortise lock that 
requires two keys to open; or (v) a three-point lock. Padlocks must have 
at least five tumblers and case-hardened shackle of at least \3/8\ inch 
diameter. Padlocks must be protected with not less than \1/4\ inch steel 
hoods constructed so as to prevent sawing or lever action on the locks, 
hasps, and staples. These requirements do not apply to magazine doors 
that are adequately secured on the inside by means of a bolt, lock, or 
bar that cannot be actuated from the outside.
    (b) Indoor magazine--(1) General. Indoor magazines are to be fire-
resistant and theft-resistant. They need not be weather-resistant if the 
buildings in which they are stored provide protection from the weather. 
No indoor magazine is to be located in a residence or dwelling. The 
indoor storage of low explosives must not exceed a quantity of 50 
pounds. More than one indoor magazine may be located in the same 
building if the total quantity of explosive materials stored does not 
exceed 50 pounds. Detonators that will not mass detonate must be stored 
in a separate magazine and the total number of electric detonators must 
not exceed 5,000.
    (2) Construction. Indoor magazines are to be constructed of masonry, 
metal-covered wood, fabricated metal, or a combination of these 
materials. The walls and floors are to be constructed of, or covered 
with, a nonsparking material. The doors must be metal or solid wood 
covered with metal.
    (3) Hinges and hasps. Hinges and hasps are to be attached to doors 
by welding, riveting, or bolting (nuts on inside of door). Hinges and 
hasps must be installed so that they cannot be removed when the doors 
are closed and locked.
    (4) Locks. Each door is to be equipped with (i) two mortise locks; 
(ii) two padlocks fastened in separate hasps and staples; (iii) a 
combination of a mortise lock and padlock; (iv) a mortise lock that 
requires two keys to open; or (v) a three-point lock. Padlocks must have 
at least five tumblers and a case-hardened shackle of at least \3/8\ 
inch diameter. Padlocks must be protected with not less than \1/4\ inch 
steel hoods constructed so as to prevent sawing or lever action on the 
locks, hasps, and staples. Indoor magazines located in secure rooms that 
are locked as provided in this subparagraph may have each door locked 
with one steel padlock (which need not be protected by a steel hood) 
having at least five tumblers and a case-hardened shackle of at least 
\3/8\ inch diameter, if the door hinges and lock hasp are securely 
fastened to the magazine. These requirements do not apply to magazine 
doors that are adequately secured on the inside by means of a bolt, 
lock, or bar that cannot be actuated from the outside.



Sec. 55.211  Construction of type 5 magazines.

    A type 5 magazine is a building, igloo or ``Army-type structure'', 
tunnel, dugout, bin, box, trailer, or a semitrailer or other mobile 
facility.
    (a) Outdoor magazines--(1) General. Outdoor magazines are to be 
weather-resistant and theft-resistant. The

[[Page 967]]

ground around magazines must slope away for drainage or other adequate 
drainage be provided. When unattended, vehicular magazines must have 
wheels removed or otherwise be effectively immobilized by kingpin 
locking devices or other methods approved by the Director.
    (2) Construction. The doors are to be constructed of solid wood or 
metal.
    (3) Hinges and hasps. Hinges and hasps are to be attached to doors 
by welding, riveting, or bolting (nuts on inside of door). Hinges and 
hasps must be installed so that they cannot be removed when the doors 
are closed and locked.
    (4) Locks. Each door is to be equipped with (i) two mortise locks; 
(ii) two padlocks fastened in separate hasps and staples; (iii) a 
combination of a mortise lock and a padlock; (iv) a mortise lock that 
requires two keys to open; or (v) a three-point lock. Padlocks must have 
at least five tumblers and a case-hardened shackle of at least \3/8\ 
inch diameter. Padlocks must be protected with not less than \1/4\ inch 
steel hoods constructed so as to prevent sawing or lever action on the 
locks, hasps, and staples. Trailers, semitrailers, and similar vehicular 
magazines may, for each door, be locked with one steel padlock (which 
need not be protected by a steel hood) having at least five tumblers and 
a case-hardened shackle of at least \3/8\ inch diameter, if the door 
hinges and lock hasp are securely fastened to the magazine and to the 
door frame. These requirements do not apply to magazine doors that are 
adequately secured on the inside by means of a bolt, lock, or bar that 
cannot be actuated from the outside.
    (5) Placards. The placards required by Department of Transportation 
regulations at 49 CFR part 172, subpart F, for the transportation of 
blasting agents shall be displayed on all magazines.
    (b) Indoor magazines--(1) General. Indoor magazines are to be theft-
resistant. They need not be weather-resistant if the buildings in which 
they are stored provide protection from the weather. No indoor magazine 
is to be located in a residence or dwelling. Indoor magazines containing 
quantities of blasting agents in excess of 50 pounds are subject to the 
requirements of Sec. 55.206 of this subpart.
    (2) Construction. The doors are to be constructed of wood or metal.
    (3) Hinges and hasps. Hinges and hasps are to be attached to doors 
by welding, riveting, or bolting (nuts on inside). Hinges and hasps must 
be installed so that they cannot be removed when the doors are closed 
and locked.
    (4) Locks. Each door is to be equipped with (i) two mortise locks; 
(ii) two padlocks fastened in separate hasps and staples; (iii) a 
combination of a mortise lock and a padlock; (iv) a mortise lock that 
requires two keys to open; or (v) a three-point lock. Padlocks must have 
at least five tumblers and a case-hardened shackle of at least \3/8\ 
inch diameter. Padlocks must be protected with not less than \1/4\ inch 
steel hoods constructed so as to prevent sawing or lever action on the 
locks, hasps, and staples. Indoor magazines located in secure rooms that 
are locked as provided in this subparagraph may have each door locked 
with one steel padlock (which need not be protected by a steel hood) 
having at least five tumblers and a case-hardened shackle of at least 
\3/8\ inch diameter, if the door hinges and lock hasps are securely 
fastened to the magazine and to the door frame. These requirements do 
not apply to magazine doors that are adequately secured on the inside by 
means of a bolt, lock, or bar that cannot be actuated from the outside.

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-298, 55 
FR 21863, May 30, 1990]



Sec. 55.212  Smoking and open flames.

    Smoking, matches, open flames, and spark producing devices are not 
permitted:
    (a) In any magazine;
    (b) Within 50 feet of any outdoor magazine; or
    (c) Within any room containing an indoor magazine.



Sec. 55.213  Quantity and storage restrictions.

    (a) Explosive materials in excess of 300,000 pounds or detonators in 
excess of 20 million are not to be stored in one magazine unless 
approved by the Director.

[[Page 968]]

    (b) Detonators are not to be stored in the same magazine with other 
explosive materials, except under the following circumstances:
    (1) In a type 4 magazine, detonators that will not mass detonate may 
be stored with electric squibs, safety fuse, igniters, and igniter cord.
    (2) In a type 1 or type 2 magazine, detonators may be stored with 
delay devices and any of the items listed in paragraph (b)(1) of this 
section.



Sec. 55.214  Storage within types 1, 2, 3, and 4 magazines.

    (a) Explosive materials within a magazine are not to be placed 
directly against interior walls and must be stored so as not to 
interfere with ventilation. To prevent contact of stored explosive 
materials with walls, a nonsparking lattice work or other nonsparking 
material may be used.
    (b) Containers of explosive materials are to be stored so that marks 
are visible. Stocks of explosive materials are to be stored so they can 
be easily counted and checked upon inspection.
    (c) Except with respect to fiberboard or other nonmetal containers, 
containers of explosive materials are not to be unpacked or repacked 
inside a magazine or within 50 feet of a magazine, and must not be 
unpacked or repacked close to other explosive materials. Containers of 
explosive materials must be closed while being stored.
    (d) Tools used for opening or closing containers of explosive 
materials are to be of nonsparking materials, except that metal slitters 
may be used for opening fiberboard containers. A wood wedge and a fiber, 
rubber, or wooden mallet are to be used for opening or closing wood 
containers of explosive materials. Metal tools other than nonsparking 
transfer conveyors are not to be stored in any magazine containing high 
explosives.



Sec. 55.215  Housekeeping.

    Magazines are to be kept clean, dry, and free of grit, paper, empty 
packages and containers, and rubbish. Floors are to be regularly swept. 
Brooms and other utensils used in the cleaning and maintenance of 
magazines must have no spark-producing metal parts, and may be kept in 
magazines. Floors stained by leakage from explosive materials are to be 
cleaned according to instructions of the explosives manufacturer. When 
any explosive material has deteriorated it is to be destroyed in 
accordance with the advice or instructions of the manufacturer. The area 
surrounding magazines is to be kept clear of rubbish, brush, dry grass, 
or trees (except live trees more than 10 feet tall), for not less than 
25 feet in all directions. Volatile materials are to be kept a distance 
of not less than 50 feet from outdoor magazines. Living foliage which is 
used to stabilize the earthen covering of a magazine need not be 
removed.



Sec. 55.216  Repair of magazines.

    Before repairing the interior of magazines, all explosive materials 
are to be removed and the interior cleaned. Before repairing the 
exterior of magazines, all explosive materials must be removed if there 
exists any possibility that repairs may produce sparks or flame. 
Explosive materials removed from magazines under repair must be (a) 
placed in other magazines appropriate for the storage of those explosive 
materials under this subpart, or (b) placed a safe distance from the 
magazines under repair where they are to be properly guarded and 
protected until the repairs have been completed.



Sec. 55.217  Lighting.

    (a) Battery-activated safety lights or battery-activated safety 
lanterns may be used in explosives storage magazines.
    (b) Electric lighting used in any explosives storage magazine must 
meet the standards prescribed by the ``National Electrical Code,'' 
(National Fire Protection Association, NFPA 70-81), for the conditions 
present in the magazine at any time. All electrical switches are to be 
located outside of the magazine and also meet the standards prescribed 
by the National Electrical Code.
    (c) Copies of invoices, work orders or similar documents which 
indicate the lighting complies with the National Electrical Code must be 
available for inspection by ATF officers.



Sec. 55.218  Table of distances for storage of explosive materials.

[[Page 969]]



--------------------------------------------------------------------------------------------------------------------------------------------------------
 Quantity of explosives                                                          Distances in feet
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                Inhabited buildings        Public highways with traffic     Passenger railways--public        Separation of magazines
                         --------------------------------     volume of 3000 or fewer      highways with traffic volume  -------------------------------
              Pounds not                                           vehicles/day            of more than 3,000 vehicles/
Pounds over      over                                    --------------------------------               day
                            Barricaded     Unbarricaded                                  --------------------------------   Barricaded     Unbarricaded
                                                            Barricaded     Unbarricaded     Barricaded     Unbarricaded
--------------------------------------------------------------------------------------------------------------------------------------------------------
         0            5           70             140              30              60              51             102               6              12
         5           10           90             180              35              70              64             128               8              16
        10           20          110             220              45              90              81             162              10              20
        20           30          125             250              50             100              93             186              11              22
        30           40          140             280              55             110             103             206              12              24
        40           50          150             300              60             120             110             220              14              28
        50           75          170             340              70             140             127             254              15              30
        75          100          190             380              75             150             139             278              16              32
       100          125          200             400              80             160             150             300              18              36
       125          150          215             430              85             170             159             318              19              38
       150          200          235             470              95             190             175             350              21              42
       200          250          255             510             105             210             189             378              23              46
       250          300          270             540             110             220             201             402              24              48
       300          400          295             590             120             240             221             442              27              54
       400          500          320             640             130             260             238             476              29              58
       500          600          340             680             135             270             253             506              31              62
       600          700          355             710             145             290             266             532              32              64
       700          800          375             750             150             300             278             556              33              66
       800          900          390             780             155             310             289             578              35              70
       900        1,000          400             800             160             320             300             600              36              72
     1,000        1,200          425             850             165             330             318             636              39              78
     1,200        1,400          450             900             170             340             336             672              41              82
     1,400        1,600          470             940             175             350             351             702              43              86
     1,600        1,800          490             980             180             360             366             732              44              88
     1,800        2,000          505           1,010             185             370             378             756              45              90
     2,000        2,500          545           1,090             190             380             408             816              49              98
     2,500        3,000          580           1,160             195             390             432             864              52             104
     3,000        4,000          635           1,270             210             420             474             948              58             116
     4,000        5,000          685           1,370             225             450             513           1,026              61             122
     5,000        6,000          730           1,460             235             470             546           1,092              65             130
     6,000        7,000          770           1,540             245             490             573           1,146              68             136
     7,000        8,000          800           1,600             250             500             600           1,200              72             144
     8,000        9,000          835           1,670             255             510             624           1,248              75             150
     9,000       10,000          865           1,730             260             520             645           1,290              78             156
    10,000       12,000          875           1,750             270             540             687           1,374              82             164
    12,000       14,000          885           1,770             275             550             723           1,446              87             174
    14,000       16,000          900           1,800             280             560             756           1,512              90             180
    16,000       18,000          940           1,880             285             570             786           1,572              94             188
    18,000       20,000          975           1,950             290             580             813           1,626              98             196
    20,000       25,000        1,055           2,000             315             630             876           1,752             105             210
    25,000       30,000        1,130           2,000             340             680             933           1,866             112             224
    30,000       35,000        1,205           2,000             360             720             981           1,962             119             238
    35,000       40,000        1,275           2,000             380             760           1,026           2,000             124             248
    40,000       45,000        1,340           2,000             400             800           1,068           2,000             129             258
    45,000       50,000        1,400           2,000             420             840           1,104           2,000             135             270
    50,000       55,000        1,460           2,000             440             880           1,140           2,000             140             280
    55,000       60,000        1,515           2,000             455             910           1,173           2,000             145             290
    60,000       65,000        1,565           2,000             470             940           1,206           2,000             150             300
    65,000       70,000        1,610           2,000             485             970           1,236           2,000             155             310
    70,000       75,000        1,655           2,000             500           1,000           1,263           2,000             160             320
    75,000       80,000        1,695           2,000             510           1,020           1,293           2,000             165             330
    80,000       85,000        1,730           2,000             520           1,040           1,317           2,000             170             340
    85,000       90,000        1,760           2,000             530           1,060           1,344           2,000             175             350
    90,000       95,000        1,790           2,000             540           1,080           1,368           2,000             180             360
    95,000      100,000        1,815           2,000             545           1,090           1,392           2,000             185             370
   100,000      110,000        1,835           2,000             550           1,100           1,437           2,000             195             390
   110,000      120,000        1,855           2,000             555           1,110           1,479           2,000             205             410
   120,000      130,000        1,875           2,000             560           1,120           1,521           2,000             215             430
   130,000      140,000        1,890           2,000             565           1,130           1,557           2,000             225             450
   140,000      150,000        1,900           2,000             570           1,140           1,593           2,000             235             470
   150,000      160,000        1,935           2,000             580           1,160           1,629           2,000             245             490
   160,000      170,000        1,965           2,000             590           1,180           1,662           2,000             255             510
   170,000      180,000        1,990           2,000             600           1,200           1,695           2,000             265             530
   180,000      190,000        2,010           2,010             605           1,210           1,725           2,000             275             550
   190,000      200,000        2,030           2,030             610           1,220           1,755           2,000             285             570
   200,000      210,000        2,055           2,055             620           1,240           1,782           2,000             295             590
   210,000      230,000        2,100           2,100             635           1,270           1,836           2,000             315             630

[[Page 970]]

 
   230,000      250,000        2,155           2,155             650           1,300           1,890           2,000             335             670
   250,000      275,000        2,215           2,215             670           1,340           1,950           2,000             360             720
   275,000      300,000        2,275           2,275             690           1,380           2,000           2,000             385             770
--------------------------------------------------------------------------------------------------------------------------------------------------------

 Table: American Table of Distances for Storage of Explosives (December 
1910), as Revised and Approved by the Institute of Makers of Explosives-
                              -July, 1991.

        Notes to the Table of Distances for Storage of Explosives

    (1) Terms found in the table of distances for storage of explosive 
materials are defined in Sec. 55.11.
    (2) When two or more storage magazines are located on the same 
property, each magazine must comply with the minimum distances specified 
from inhabited buildings, railways, and highways, and, in addition, they 
should be separated from each other by not less than the distances shown 
for ``Separation of Magazines,'' except that the quantity of explosives 
contained in cap magazines shall govern in regard to the spacing of said 
cap magazines from magazines containing other explosives. If any two or 
more magazines are separated from each other by less than the specified 
``Separation of Magazines'' distances, then such two or more magazines, 
as a group, must be considered as one magazine, and the total quantity 
of explosives stored in such group must be treated as if stored in a 
single magazine located on the site of any magazine of the group, and 
must comply with the minimum of distances specified from other 
magazines, inhabited buildings, railways, and highways.
    (3) All types of blasting caps in strengths through No. 8 cap should 
be rated at 1\1/2\ lbs. (1.5 lbs.) of explosives per 1,000 caps. For 
strengths higher than No. 8 cap, consult the manufacturer.
    (4) For quantity and distance purposes, detonating cord of 50 or 60 
grains per foot should be calculated as equivalent to 9 lbs. of high 
explosives per 1,000 feet. Heavier or lighter core loads should be rated 
proportionately.

[T.D. ATF-87, 46 FR 40384, Aug. 7, 1981, as amended by T.D. ATF-400, 63 
FR 45003, Aug. 24, 1998; T.D. ATF-446, 66 FR 16602, Mar. 27, 2001; T.D. 
ATF-446a, 66 FR 19089, Apr. 13, 2001]



Sec. 55.219  Table of distances for storage of low explosives.

------------------------------------------------------------------------
           Pounds                  From       From public
-----------------------------   inhabited     railroad and   From above
                                 building       highway        ground
     Over         Not over       distance       distance      magazine
                                  (feet)         (feet)        (feet)
------------------------------------------------------------------------
        0          1,000            75             75             50
    1,000          5,000           115            115             75
    5,000         10,000           150            150            100
   10,000         20,000           190            190            125
   20,000         30,000           215            215            145
   30,000         40,000           235            235            155
   40,000         50,000           250            250            165
   50,000         60,000           260            260            175
   60,000         70,000           270            270            185
   70,000         80,000           280            280            190
   80,000         90,000           295            295            195
   90,000        100,000           300            300            200
  100,000        200,000           375            375            250
  200,000        300,000           450            450            300
------------------------------------------------------------------------



Sec. 55.220  Table of separation distances of ammonium nitrate and blasting agents from explosives or blasting agents.

Table: Department of Defense Ammunition and Explosives Standards, Table 
                  5-4.1 Extract; 4145.27 M, March 1969

------------------------------------------------------------------------
    Donor weight (pounds)     Minimum separation distance
----------------------------- of acceptor from donor when     Minimum
                                    barricaded (ft.)        thickness of
                             -----------------------------   artificial
     Over         Not over       Ammonium      Blasting      barricades
                                 nitrate         agent         (in.)
------------------------------------------------------------------------
        0            100             3             11            12
      100            300             4             14            12
      300            600             5             18            12
      600          1,000             6             22            12
    1,000          1,600             7             25            12
    1,600          2,000             8             29            12
    2,000          3,000             9             32            15
    3,000          4,000            10             36            15
    4,000          6,000            11             40            15
    6,000          8,000            12             43            20
    8,000         10,000            13             47            20
   10,000         12,000            14             50            20
   12,000         16,000            15             54            25
   16,000         20,000            16             58            25
   20,000         25,000            18             65            25
   25,000         30,000            19             68            30
   30,000         35,000            20             72            30
   35,000         40,000            21             76            30

[[Page 971]]

 
   40,000         45,000            22             79            35
   45,000         50,000            23             83            35
   50,000         55,000            24             86            35
   55,000         60,000            25             90            35
   60,000         70,000            26             94            40
   70,000         80,000            28            101            40
   80,000         90,000            30            108            40
   90,000        100,000            32            115            40
  100,000        120,000            34            122            50
  120,000        140,000            37            133            50
  140,000        160,000            40            144            50
  160,000        180,000            44            158            50
  180,000        200,000            48            173            50
  200,000        220,000            52            187            60
  220,000        250,000            56            202            60
  250,000        275,000            60            216            60
  275,000        300,000            64            230            60
------------------------------------------------------------------------

Table: National Fire Protection Association (NFPA) Official Standard No. 
                                492, 1968

Notes of Table of Separation Distances of Ammonium Nitrate and Blasting 
                Agents From Explosives or Blasting Agents

    (1) This table specifies separation distances to prevent explosion 
of ammonium nitrate and ammonium nitrate-based blasting agents by 
propagation from nearby stores of high explosives or blasting agents 
referred to in the table as the ``donor.'' Ammonium nitrate, by itself, 
is not considered to be a donor when applying this table. Ammonium 
nitrate, ammonium nitrate-fuel oil or combinations thereof are 
acceptors. If stores of ammonium nitrate are located within the 
sympathetic detonation distance of explosives or blasting agents, one-
half the mass of the ammonium nitrate is to be included in the mass of 
the donor.
    (2) When the ammonium nitrate and/or blasting agent is not 
barricaded, the distances shown in the table must be multiplied by six. 
These distances allow for the possibility of high velocity metal 
fragments from mixers, hoppers, truck bodies, sheet metal structures, 
metal containers, and the like which may enclose the ``donor.'' Where 
explosives storage is in bullet-resistant magazines or where the storage 
is protected by a bullet-resistant wall, distances and barricade 
thicknesses in excess of those prescribed in the table in Sec. 55.218 
are not required.
    (3) These distances apply to ammonium nitrate that passes the 
insensitivity test prescribed in the definition of ammonium nitrate 
fertilizer issued by the Fertilizer Institute.\1\ Ammonium nitrate 
failing to pass the test must be stored at separation distances in 
accordance with the table in Sec. 55.218.
---------------------------------------------------------------------------

    \1\ Definition and Test Procedures for Ammonium Nitrate Fertilizer, 
Fertilizer Institute 1015-18th St. N.W. Washington, DC 20036.
---------------------------------------------------------------------------

    (4) These distances apply to blasting agents which pass the 
insensitivity test prescribed in regulations of the U.S. Department of 
Transportation (49 CFR part 173).
    (5) Earth or sand dikes, or enclosures filled with the prescribed 
minimum thickness of earth or sand are acceptable artificial barricades. 
Natural barricades, such as hills or timber of sufficient density that 
the surrounding exposures which require protection cannot be seen from 
the ``donor'' when the trees are bare of leaves, are also acceptable.
    (6) For determining the distances to be maintained from inhabited 
buildings, passenger railways, and public highways, use the table in 
Sec. 55.218.



Sec. 55.221  Requirements for display fireworks, pyrotechnic compositions, and explosive materials used in assembling fireworks or articles pyrotechnic.

    (a) Display fireworks, pyrotechnic compositions, and explosive 
materials used to assemble fireworks and articles pyrotechnic shall be 
stored at all times as required by this Subpart unless they are in the 
process of manufacture, assembly, packaging, or are being transported.
    (b) No more than 500 pounds (227 kg) of pyrotechnic compositions or 
explosive materials are permitted at one time in any fireworks mixing 
building, any building or area in which the pyrotechnic compositions or 
explosive materials are pressed or otherwise prepared for finishing or 
assembly, or any finishing or assembly building. All pyrotechnic 
compositions or explosive materials not in immediate use will be stored 
in covered, non-ferrous containers.
    (c) The maximum quantity of flash powder permitted in any fireworks 
process building is 10 pounds (4.5 kg).
    (d) All dry explosive powders and mixtures, partially assembled 
display fireworks, and finished display fireworks shall be removed from 
fireworks process buildings at the conclusion of a

[[Page 972]]

day's operations and placed in approved magazines.

[T.D. ATF-293, 55 FR 3722, Feb. 5, 1990, as amended by T.D. ATF-400, 63 
FR 45004, Aug. 24, 1998]



Sec. 55.222  Table of distances between fireworks process buildings and between fireworks process and fireworks nonprocess buildings.

------------------------------------------------------------------------
                                   Display fireworks  Consumer fireworks
   Net weight of fireworks \1\        \2\ (feet)          \3\ (feet)
            (pounds)
------------------------------------------------------------------------
  0-100.........................  57................  37
101-200.........................  69................  37
201-300.........................  77................  37
301-400.........................  85................  37
401-500.........................  91................  37
Above 500.......................  Not permitted \4\   Not permitted \4\
                                   \5\.                \5\
------------------------------------------------------------------------
\1\ Net weight is the weight of all pyrotechnic compositions, and
  explosive materials and fuse only.
\2\ The distances in this column apply only with natural or artificial
  barricades. If such barricades are not used, the distances must be
  doubled.
\3\ While consumer fireworks or articles pyrotechnic in a finished state
  are not subject to regulation, explosive materials used to manufacture
  or assemble such fireworks or articles are subject to regulation.
  Thus, fireworks process buildings where consumer fireworks or articles
  pyrotechnic are being processed shall meet these requirements.
\4\ A maximum of 500 pounds of in-process pyrotechnic compositions,
  either loose or in partially-assembled fireworks, is permitted in any
  fireworks process building. Finished display fireworks may not be
  stored in a fireworks process building.
\5\ A maximum of 10 pounds of flash powder, either in loose form or in
  assembled units, is permitted in any fireworks process building.
  Quantities in excess of 10 pounds must be kept in an approved
  magazine.


[T.D. ATF-293, 55 FR 3723, Feb. 5, 1990, as amended by T.D. ATF-400, 63 
FR 45004, Aug. 24, 1998]



Sec. 55.223  Table of distances between fireworks process buildings and other specified areas.

   Distance from Passenger Railways, Public Highways, Fireworks Plant
  Buildings used to Store Consumer Fireworks and Articles Pyrotechnic,
Magazines and Fireworks Shipping Buildings, and Inhabited Buildings. \3\
                                 \4\ \5\
------------------------------------------------------------------------
                                   Display fireworks  Consumer fireworks
   Net weight of fireworks \1\        \1\ (feet)          \2\ (feet)
            (pounds)
------------------------------------------------------------------------
  0-100.........................  200...............  25
101-200.........................  200...............  50
201-300.........................  200...............  50
301-400.........................  200...............  50
401-500.........................  200...............  50
Above 500.......................  Not permitted.....  Not permitted.
------------------------------------------------------------------------
\1\ Net weight is the weight of all pyrotechnic compositions, and
  exposive materials and fuse only.
\2\ While consumer fireworks or articles pyrotechnic in a finished state
  are not subject to regulation, explosive materials used to manufacture
  or assemble such fireworks or articles are subject to regulation.
  Thus, fireworks process buildings where consumer fireworks or articles
  pyrotechnic are being processed shall meet these requirements.
\3\ This table does not apply to the separation distances between
  fireworks process buildings (see Sec.  55.222) and between magazines
  (see Secs.  55.218 and 55.224).
\4\ The distances in this table apply with or without artificial or
  natural barricades or screen barricades. However, the use of
  barricades is highly recommended.
\5\ No work of any kind, except to place or move items other than
  explosive materials from storage, shall be conducted in any building
  designated as a warehouse. A fireworks plant warehouse is not subject
  to Sec.  55.222 or this section, tables of distances.


[T.D. ATF-293, 55 FR 3723, Feb. 5, 1990, as amended by T.D. ATF-400, 63 
FR 45004, Aug. 24, 1998]



Sec. 55.224  Table of distances for the storage of display fireworks (except bulk salutes).

------------------------------------------------------------------------
                                    Distance between
                                      magazine and
                                  inhabited building,   Distance between
   Net weight of firework \1\      passenger railway,  magazines \2\ \3\
            (pounds)               or public highway         (feet)
                                     \3\ \4\ (feet)
 
------------------------------------------------------------------------
0-1000..........................  150................             100
1001-5000.......................  230................             150
5001-10000......................  300................             200
Above 10000.....................  Use table Sec.       .................
                                   55.218
------------------------------------------------------------------------
\1\ Net weight is the weight of all pyrotechnic compositions, and
  exposive materials and fuse only.
\2\ For the purposes of applying this table, the term ``magazine'' also
  includes fireworks shipping buildings for display fireworks.
\3\ For fireworks storage magazines in use prior to (30 days from the
  date of publication of the final rule in the Federal Register), the
  distances in this table may be halved if properly barricaded between
  the magazine and potential receptor sites.
\4\ This table does not apply to the storage of bulk salutes. Use table
  at Sec.  55.218.


[T.D. ATF-293, 55 FR 3723, Feb. 5, 1990, as amended by T.D. ATF-400, 63 
FR 45004, Aug. 24, 1998]



                       SUBCHAPTERS D-E [RESERVED]



[[Page 973]]



                 SUBCHAPTER F--PROCEDURES AND PRACTICES





PART 70--PROCEDURE AND ADMINISTRATION--Table of Contents




                            Subpart A--Scope

Sec.
70.1  General.
70.2  Forms prescribed.
70.3  Delegations of the Director.

                         Subpart B--Definitions

70.11  Meaning of terms.

        Subpart C--Discovery of Liability and Enforcement of Laws

                       Examination and Inspection

70.21  Canvass of regions for taxable persons and objects.
70.22  Examination of books and witnesses.
70.23  Service of summonses.
70.24  Enforcement of summonses.
70.25  Special procedures for third-party summonses.
70.26  Third-party recordkeepers.
70.27  Right to intervene; right to institute a proceeding to quash.
70.28  Summonses excepted from 26 U.S.C. 7609 procedures.
70.29  Suspension of statutes of limitation.
70.30  Time and place of examination.
70.31  Entry of premises for examination of taxable objects.
70.32  Examination of records and objects.
70.33  Authority of enforcement officers of the Bureau.
70.34  Listing by appropriate ATF officers of taxable objects owned by 
          nonresidents.

                        General Powers and Duties

70.40  Authority to administer oaths and certify.
70.41  Rewards for information relating to violations of tax laws 
          administered by the Bureau.
70.42  Returns prepared or executed by appropriate ATF officers.

     Subpart D--Collection of Excise and Special (Occupational) Tax

                     Collection--General Provisions

70.51  Collection authority.
70.52  Signature presumed authentic.

                           Receipt of Payment

70.61  Payment by check or money order.
70.62  Fractional parts of a cent.
70.63  Computations on returns or other documents.
70.64  Receipt for taxes.
70.65  Use of commercial banks.

                               Assessment

70.71  Assessment authority.
70.72  Method of assessment.
70.73  Supplemental assessments.
70.74  Request for prompt assessment.
70.75  Jeopardy assessment of alcohol, tobacco, and firearms taxes.
70.76  Stay of collection of jeopardy assessment; bond to stay 
          collection.
70.77  Collection of jeopardy assessment; stay of sale of seized 
          property pending court decision.

                            Notice and Demand

70.81  Notice and demand for tax.
70.82  Payment on notice and demand.

                                Interest

70.90  Interest on underpayments.
70.91  Interest on erroneous refund recoverable by suit.
70.92  Interest on overpayments.
70.93  Interest rate.
70.94  Interest compounded daily.

   Additions to the Tax, Additional Amounts, and Assessable Penalties

               Additions to the Tax and Additional Amounts

70.95  Scope.
70.96  Failure to file tax return or to pay tax.
70.97  Failure to pay tax.
70.98  Penalty for underpayment of deposits.
70.100  Penalty for fraudulently claiming drawback.
70.101  Bad checks.
70.102  Coordination with title 11.
70.103  Failure to pay tax.

                          Assessable Penalties

70.111  Rules for application of assessable penalties.
70.112  Failure to collect and pay over tax, or attempt to evade or 
          defeat tax.
70.113  Penalty for failure to supply taxpayer identification number.
70.114  Penalties for aiding and abetting understatement of tax 
          liability.

                     Abatements, Credits and Refunds

                          Procedure in General

70.121  Amounts treated as overpayments.
70.122  Authority to make credits or refunds.
70.123  Claims for credit or refund.
70.124  Payments in excess of amounts shown on return.
70.125  Abatements.

[[Page 974]]

70.126  Date of allowance of refund or credit.
70.127  Overpayment of installment.

                       Rule of Special Application

70.131  Conditions to allowance.

                             Lien for Taxes

70.141  Lien for taxes.
70.142  Scope of definitions.
70.143  Definitions.
70.144  Special rules.
70.145  Purchasers, holders of security interests, mechanic's lienors, 
          and judgment lien creditors.
70.146  45-day period for making disbursements.
70.147  Priority of interest and expenses.
70.148  Place for filing notice; form.
70.149  Refiling of notice of tax lien.
70.150  Release of lien or discharge of property.
70.151  Administrative appeal of the erroneous filing of notice of 
          Federal tax lien.

               Seizure of Property for Collection of Taxes

70.161  Levy and distraint.
70.162  Levy and distraint on salary and wages.
70.163  Surrender of property subject to levy.
70.164  Surrender of property subject to levy in the case of life 
          insurance and endowment contracts.
70.165  Production of books.
70.167  Authority to release levy and return property.
70.168  Redemption of property.
70.169  Expense of levy and sale.
70.170  Application of proceeds of levy.

                         Disposition of Property

70.181  Disposition of seized property.
70.182  Disposition of personal property acquired by the United States.
70.183  Administration and disposition of real estate acquired by the 
          United States.
70.184  Disposition of perishable goods.
70.185  Certificate of sale; deed of real property.
70.186  Legal effect of certificate of sale of personal property and 
          deed of real property.
70.187  Records of sale.
70.188  Expense of levy and sale.

                          Judicial Proceedings

                    Civil Action by the United States

70.191  Authorization.
70.192  Action to enforce lien or to subject property to payment of tax.
70.193  Disposition of judgments and moneys recovered.

               Proceedings by Taxpayers and Third Parties

70.202  Intervention.
70.203  Discharge of liens; scope and application; judicial proceedings.
70.204  Discharge of liens; nonjudicial sales.
70.205  Discharge of liens; special rules.
70.206  Discharge of liens; redemption by United States.
70.207  Civil actions by persons other than taxpayers.
70.208  Review of jeopardy assessment or jeopardy levy procedures; 
          information to taxpayer.
70.209  Review of jeopardy assessment or levy procedures; administrative 
          review.
70.210  Review of jeopardy assessment or levy procedures; judicial 
          action.
70.213  Repayments to officers or employees.

                               Limitations

                Limitations on Assessment and Collection

70.221  Period of limitations upon assessment.
70.222  Time return deemed filed for purposes of determining 
          limitations.
70.223  Exceptions to general period of limitations on assessment and 
          collection.
70.224  Collection after assessment.
70.225  Suspension of running of period of limitation; assets of 
          taxpayer in control or custody of court.
70.226  Suspension of running of period of limitation; taxpayer outside 
          of United States.
70.227  Suspension of running of period of limitation; wrongful seizure 
          of property of third party.

                          Limitations on Liens

70.231  Protection for certain interests even though notice filed.
70.232  Protection for commercial transactions financing agreements.
70.233  Protection for real property construction or improvement 
          financing agreements.
70.234  Protection for obligatory disbursement agreements.

                          Limitations on Levies

70.241  Property exempt from levy.
70.242  Wages, salary and other income.
70.243  Exempt amount.
70.244  Payroll period.
70.245  Computation of exempt amount and payment of amounts not exempt 
          from levy to the Chief, Tax Processing Center.

              Periods of Limitation in Judicial Proceedings

70.251  Periods of limitation on suits by taxpayers.
70.252  Periods of limitation on suits by the United States.
70.253  Periods of limitation on suits by persons other than taxpayers.

[[Page 975]]

                     Limitations on Credit or Refund

70.261  Period of limitation on filing claim.
70.262  Limitations on allowance of credits and refunds.
70.263  Special rules applicable in case of extension of time by 
          agreement.
70.264  Time return deemed filed and tax considered paid.
70.265  Credits or refunds after period of limitation.
70.266  Credit against barred liability.

                               Transferees

70.271  Procedure in the case of transferred assets.

                                  Bonds

70.281  Form of bond and security required.
70.282  Single bond in lieu of multiple bonds.

                        Miscellaneous Provisions

70.301  Reproduction of returns and other documents.
70.302  Fees and costs for witnesses.
70.303  Rules and regulations.
70.304  Place for filing documents other than returns.
70.305  Timely mailing treated as timely filing.
70.306  Time for performance of acts other than payment of tax or filing 
          of any return where last day falls on Saturday, Sunday, or 
          legal holiday.

         General Provisions Relating to Stamps, Marks or Labels

70.311  Authority for establishment, alteration and distribution of 
          stamps, marks, or labels.

                              Registration

70.321  Registration of persons paying a special tax.

                 Crimes, Other Offenses, and Forfeitures

70.331  Fraudulent returns, statements, or other documents.
70.332  Unauthorized use or sale of stamps.
70.333  Offenses by officers and employees of the United States.

Subpart E--Procedural Rules Relating to Alcohol, Tobacco, Firearms, and 
                               Explosives

        Provisions Relating to Distilled Spirits, Wines, and Beer

70.411  Imposition of taxes, qualification requirements, and 
          regulations.
70.412  Excise taxes.
70.413  Claims.
70.414  Preparation and filing of claims.
70.415  Offers in compromise.
70.416  Application for approval of interlocking directors and officers 
          under section 8 of the Federal Alcohol Administration Act.
70.417  Rulings.
70.418  Conferences.
70.419  Representatives.
70.420  Forms.

 Provisions Relating to Tobacco Products, and Cigarette Papers and Tubes

70.431  Imposition of taxes; regulations.
70.432  Qualification and bonding requirements.
70.433  Collection of taxes.
70.434  Assessments.
70.435  Claims.
70.436  Offers in compromise.
70.437  Rulings.
70.438  Forms.

 Provisions Relating to Firearms, Shells and Cartridges, and Explosives

70.441  Applicable laws.
70.442  Taxes relating to machine guns, destructive devices, and certain 
          other firearms.
70.443  Firearms and ammunition.
70.444  Importation of arms, ammunition, and implements of war.
70.445  Commerce in explosives.
70.446  Rulings.
70.447  Assessments.
70.448  Claims.
70.449  Offers in compromise.

                             Seized Property

70.450  Seizure and forfeiture of personal property.

                               Possessions

70.461  Shipments to the United States.
70.462  Shipments from the United States.

                                 Rulings

70.471  Rulings.

                         Administrative Remedies

70.481  Agreements for payment of liability in installments.
70.482  Offers in compromise of liabilities (other than forfeiture) 
          under 26 U.S.C.
70.483  Offers in compromise of violations of Federal Alcohol 
          Administration Act.
70.484  Offers in compromise of forfeiture liabilities.
70.485  Closing agreements.
70.486  Managerial review.

[[Page 976]]

 Subpart F--Application of Section 6423, Internal Revenue Code of 1954, 
as Amended, to Refund or Credit of Tax on Distilled Spirits, Wines, and 
                                  Beer

                                 General

70.501  Meaning of terms.
70.502  Applicability to certain credits or refunds.
70.503  Ultimate burden.
70.504  Conditions to allowance of credit or refund.
70.505  Requirements on persons intending to file claim.

                             Claim Procedure

70.506  Execution and filing of claim.
70.507  Data to be shown in claim.
70.508  Time for filing claim.

                                Penalties

70.509  Penalties.

   Subpart G--Losses Resulting From Disaster, Vandalism, or Malicious 
                                Mischief

                               Definitions

70.601  Meaning of terms.

                                Payments

70.602  Circumstances under which payment may be made.

                            Claims Procedures

70.603  Execution and filing of claims.
70.604  Record of inventory to support claims.
70.605  Claims relating to imported, domestic, and Virgin Islands 
          liquors.
70.606  Claimant to furnish proof.
70.607  Supporting evidence.
70.608  Action on claims.

                         Destruction of Liquors

70.609  Supervision.

                                Penalties

70.610  Penalties.

                 Subpart H--Rules, Regulations and Forms

70.701  Rules and regulations.
70.702  Forms and instructions.

                          Subpart I--Disclosure

70.801  Publicity of information.
70.802  Rules for disclosure of certain specified matters.
70.803  Requests or demands for disclosure in testimony and in related 
          matters.

    Authority: 5 U.S.C. 301 and 552; 26 U.S.C. 4181, 4182, 5146, 5203, 
5207, 5275, 5367, 5415, 5504, 5555, 5684(a), 5741, 5761(b), 5802, 6020, 
6021, 6064, 6102, 6155, 6159, 6201, 6203, 6204, 6301, 6303, 6311, 6313, 
6314, 6321, 6323, 6325, 6326, 6331-6343, 6401-6404, 6407, 6416, 6423, 
6501-6503, 6511, 6513, 6514, 6532, 6601, 6602, 6611, 6621, 6622, 6651, 
6653, 6656-6658, 6665, 6671, 6672, 6701, 6723, 6801, 6862, 6863, 6901, 
7011, 7101, 7102, 7121, 7122, 7207, 7209, 7214, 7304, 7401, 7403, 7406, 
7423, 7424, 7425, 7426, 7429, 7430, 7432, 7502, 7503, 7505, 7506, 7513, 
7601-7606, 7608-7610, 7622, 7623, 7653, 7805.

    Source: T.D. ATF-6, 38 FR 32445, Nov. 26, 1973, unless otherwise 
noted.

    Editorial Note: Nomenclature changes to part 70 appear by T.D. ATF-
450, 66 FR 29022-29030, May 29, 2001.



                            Subpart A--Scope



Sec. 70.1  General.

    (a) The regulations in Subparts C, D, and E of this part set forth 
the procedural and administrative rules of the Bureau of Alcohol, 
Tobacco and Firearms for:
    (1) The issuance and enforcement of summonses, examination of books 
of account and witnesses, administration of oaths, entry of premises for 
examination of taxable objects, granting of rewards for information, 
canvass of regions for taxable objects and persons, and authority of ATF 
officers.
    (2) The use of commercial banks for payment of excise taxes imposed 
by 26 U.S.C. Subtitles E and F.
    (3) The preparing or executing of returns; deposits; payment on 
notice and demand; assessment; abatements, credits and refunds; 
limitations on assessment; limitations on credit or refund; periods of 
limitation in judicial proceedings; interest; additions to tax, 
additional amounts, and assessable penalties; enforced collection 
activities; authority for establishment, alteration, and distribution of 
stamps, marks, or labels; jeopardy assessment of alcohol, tobacco, and 
firearms taxes, and registration of persons paying a special tax.
    (4) Distilled spirits, wines, beer, tobacco products, cigarette 
papers and tubes, firearms, ammunition, and explosives.
    (b) The regulations in Subpart F of this part relate to the 
limitations imposed by 26 U.S.C. 6423, on the refund or credit of tax 
paid or collected in respect to any article of a kind subject to a tax 
imposed by Part I, Subchapter A

[[Page 977]]

of Chapter 51, I.R.C., or by any corresponding provision of prior 
internal revenue laws.
    (c) The regulations in Subpart G of this part implement 26 U.S.C. 
5064, which permits payments to be made by the United States for amounts 
equal to the internal revenue taxes paid or determined and customs 
duties paid on distilled spirits, wines, and beer, previously withdrawn, 
that were lost, made unmarketable, or condemned by a duly authorized 
official as a result of disaster, vandalism, or malicious mischief. This 
subpart applies to disasters or other specified causes of loss, 
occurring on or after February 1, 1979. This subpart does not apply to 
distilled spirits, wines, and beer manufactured in Puerto Rico and 
brought into the United States.

[T.D. ATF-376, 61 FR 31031, June 19, 1996]



Sec. 70.2  Forms prescribed.

    (a) The appropriate ATF officer is authorized to prescribe all forms 
required by this part. All of the information called for in each form 
shall be furnished as indicated by the headings on the form and the 
instructions on or pertaining to the form. In addition, information 
called for in each form shall be furnished as required by this part. The 
form will be filed in accordance with the instructions for the form.
    (b) Forms may be requested from the ATF Distribution Center, P.O. 
Box 5950, Springfield, Virginia 22150-5950, or by accessing the ATF web 
site (http://www.atf.treas.gov/).

[T.D. ATF-376, 61 FR 31031, June 19, 1996, as amended by T.D. ATF-450, 
66 FR 29022, May 29, 2001]



Sec. 70.3  Delegations of the Director.

    Most of the regulatory authorities of the Director contained in this 
part 70 are delegated to appropriate ATF officers. These ATF officers 
are specified in ATF Order 1130.19, Delegation Order--Delegation of the 
Director's Authorities in 27 CFR Part 70, Procedure and administration. 
ATF delegation orders, such as ATF Order 1130.19, are available to any 
interested person by mailing a request to the ATF Distribution Center, 
P.O. Box 5950, Springfield, Virginia 22150-5950, or by accessing the ATF 
web site (http://www.atf.treas.gov/).

[T.D. ATF-450, 66 FR 29022, May 29, 2001]



                         Subpart B--Definitions



Sec. 70.11  Meaning of terms.

    When used in this part and in forms prescribed under this part, 
where not otherwise distinctly expressed or manifestly incompatible with 
the intent thereof, terms shall have the meaning ascribed in this 
section. Words in the plural form shall include the singular, and vice 
versa, and words imparting the masculine gender shall include the 
feminine. The terms ``includes'' and ``including'' do not exclude things 
not enumerated which are in the same general class.
    Appropriate ATF officer. An officer or employee of the Bureau of 
Alcohol, Tobacco and Firearms (ATF) authorized to perform any functions 
relating to the administration or enforcement of this part by ATF Order 
1130.19, Delegation Order--Delegation of the Director's Authorities in 
27 CFR Part 70, Procedure and Administration.
    Bureau. The Bureau of Alcohol, Tobacco and Firearms, Department of 
the Treasury, Washington, DC 20226.
    CFR. The Code of Federal Regulations.
    Commercial bank. A bank, whether or not a member of the Federal 
Reserve System, which has access to the Federal Reserve Communications 
System (FRCS) or Fedwire. The ``FRCS'' or ``Fedwire'' is a 
communications network that allows Federal Reserve System member banks 
to effect a transfer of funds for their customers (or other commercial 
banks) to the Treasury Account at the Federal Reserve Bank of New York.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC.
    Electronic fund transfer or EFT. Any transfer of funds effected by a 
taxpayer's commercial bank, either directly or through a correspondent 
banking relationship, via the Federal Reserve Communications System

[[Page 978]]

(FRCS) or Fedwire to the Treasury Account at the Federal Reserve Bank of 
New York.
    Enforced collection. Collection of taxes when a taxpayer neglects or 
refuses to pay voluntarily. Includes such administrative measures as 
liens and levies.
    Levy. The taking of property by seizure and sale or by collection of 
money due to the debtor, such as wages.
    Lien. A charge upon real or personal property for the satisfaction 
of some debt or performance of an obligation.
    Person. An individual, a trust, estate, partnership, association or 
other unincorporated organization, fiduciary, company, or corporation, 
or the District of Columbia, a State, or a political subdivision thereof 
(including a city, county, or other municipality).
    Provisions of 26 U.S.C. enforced and administered by the Bureau. 
Sections 4181 and 4182 of the Internal Revenue Code of 1986 (the Code), 
as amended; subchapters F and G of chapter 32 of the Code, insofar as 
they relate to activities administered and enforced with respect to 
sections 4181 and 4182 of the Code; subtitle E of the Code; and subtitle 
F of the Code as it relates to any of the foregoing.
    Secretary. The Secretary of the Treasury or designated delegate.
    Seizure. The act of taking possession of property to satisfy a tax 
liability or by virtue of an execution.
    Treasury Account. The Department of the Treasury's General Account 
at the Federal Reserve Bank of New York.
    U.S.C. The United States Code.

(Aug. 16, 1954, Ch. 736, 68A Stat. 775 (26 U.S.C. 6301); June 29, 1956, 
Ch. 462, 70 Stat. 391 (26 U.S.C. 6301))

[T.D. ATF-48, 43 FR 13535, Mar. 31, 1978; 44 FR 55841, Sept. 28,979, as 
amended by T.D. ATF-77, 46 FR 3002, Jan. 13, 1981; T.D. ATF-301, 55 FR 
47608, Nov. 14, 1990; T.D. ATF-331, 57 FR 40327, Sept. 3, 1992; T.D. 
ATF-378, 61 FR 29955, June 13, 1996; T.D. ATF-450, 66 FR 29022, May 29, 
2001]



        Subpart C--Discovery of Liability and Enforcement of Laws

                       Examination and Inspection



Sec. 70.21  Canvass of regions for taxable persons and objects.

    Each appropriate ATF officer shall, to the extent deemed 
practicable, cause officers or employees under the appropriate ATF 
officer's supervision and control to proceed, from time to time, and 
inquire after and concerning all persons therein who may be liable to 
pay any tax, imposed under provisions of 26 U.S.C. enforced and 
administered by the Bureau, and all persons owning or having the care 
and management of any objects with respect to which such tax is imposed.

[T.D. ATF-331, 57 FR 40327, Sept. 3, 1992, as amended by T.D. ATF-450, 
66 FR 29023, May 29, 2001]



Sec. 70.22  Examination of books and witnesses.

    (a) In general. For the purpose of ascertaining the correctness of 
any return, making a return where none has been made, determining the 
liability of any person for any tax imposed under provisions of 26 
U.S.C. enforced and administered by the Bureau (including any interest, 
additional amount, addition to the tax, or civil penalty) or the 
liability at law or in equity of any transferee or fiduciary of any 
person in respect of any such tax, or collecting any such liability, any 
appropriate ATF officer may examine any books, papers, records or other 
data which may be relevant or material to such inquiry; and take such 
testimony of the person concerned, under oath, as may be relevant to 
such inquiry.
    (b) Summonses. For the purposes described in paragraph (a) of this 
section the appropriate ATF officersare authorized to summon the person 
liable for tax or required to perform the act, or any officer or 
employee of such person, or any person having possession, custody, or 
care of books of accounts containing entries relating to the business of 
the person liable for tax or required to perform the act, or any person 
deemed proper, to appear before a designated officer or employee of the 
Bureau at a time and place named in

[[Page 979]]

the summons and to produce such books, papers, records, or other data, 
and to give such testimony, under oath, as may be relevant or material 
to such inquiry; and take such testimony of the person concerned, under 
oath, as may be relevant or material to such inquiry. Such ATF officer 
may designate an appropriate ATF officer as the individual before whom a 
person summoned pursuant to 26 U.S.C. 7602 shall appear. Any such 
officer, when so designated in a summons, is authorized to take 
testimony under oath of the person summoned and to receive and examine 
books, papers, records, or other data produced in compliance with the 
summons. The authority to issue a summons may not be redelegated. See 
Sec. 70.302 of this part for rules concerning payments to certain 
persons who are summoned to give information to the Bureau under 26 
U.S.C. 7602 and this section.

(Aug. 16, 1954, Chapter 736, 68A Stat. 901; (26 U.S.C. 7602))

[T.D. ATF-6, 38 FR 32445, Nov. 26, 1973, as amended by T.D. ATF-42, 42 
FR 8367, Feb. 10, 1977; T.D. ATF-301, 55 FR 47608, Nov. 14, 1990; T.D. 
ATF-331, 57 FR 40328, Sept. 3, 1992; T.D. ATF-450, 66 FR 29023, May 29, 
2001]



Sec. 70.23  Service of summonses.

    (a) In general. A summons issued under 26 U.S.C. 7602 shall be 
served by an attested copy delivered in hand to the person to whom it is 
directed, or left at his last and usual place of abode. The certificate 
of service signed by the person serving the summons shall be evidence of 
the facts it states on the hearing of an application for the enforcement 
of the summons. When the summons requires the production of books, 
papers, records, or other data, it shall be sufficient if such books, 
papers, records, or other data are described with reasonable certainty.
    (b) Persons who may serve summonses. Any appropriate ATF officer may 
serve a summons issued under 26 U.S.C. 7602.

(68A Stat. 902, as amended (26 U.S.C. 7603); 26 U.S.C. 7805 (68A Stat. 
917), 27 U.S.C. 205 (49 Stat. 981 as amended), 18 U.S.C. 926 (82 Stat. 
959), and sec. 38, Arms Export Control Act (22 U.S.C. 2778, 90 Stat. 
744), 27 U.S.C. 205, 22 U.S.C. 2778, 26 U.S.C. 7602, and 5 U.S.C. 301)

[T.D. ATF-6, 38 FR 32445, Nov. 26, 1973, as amended by T.D. ATF-48, 43 
FR 13531, Mar. 31, 1978; T.D. ATF-201, 50 FR 12533, Mar. 29, 1985; T.D. 
ATF-249, 52 FR 5961, Feb. 27, 1987; T.D. ATF-301, 55 FR 47608, Nov. 14, 
1990; T.D. ATF-450, 66 FR 29023, May 29, 2001]



Sec. 70.24  Enforcement of summonses.

    (a) In general. Whenever any person summoned under 26 U.S.C. 7602 
neglects or refuses to obey such summons, or to produce books, papers, 
records, or other data, or to give testimony, as required, application 
may be made to the judge of the district court or to a U.S. magistrate 
for the district within which the person so summoned resides or is found 
for an attachment against him as for a contempt.
    (b) Persons who may apply for an attachment. Appropriate ATF 
officers are authorized to apply for an attachment as provided in 
paragraph (a) of this section. The authority to apply for an attachment 
for the enforcement of a summons may not be redelegated.

(68A Stat. 902, as amended (26 U.S.C. 7604))

[T.D. ATF-6, 38 FR 32445, Nov. 26, 1973; 38 FR 33767, Dec. 7, 1973, as 
amended by T.D. ATF-450, 66 FR 29023, May 29, 3001]



Sec. 70.25  Special procedures for third-party summonses.

    (a) When the Bureau summons the records of persons defined by 26 
U.S.C. 7609(a)(3) as ``third-party recordkeepers'', the person about 
whom information is being gathered must be notified in advance, except 
when:
    (1) The summons is served on the person about whom information is 
being gathered, or any officer or employee of such person, or

[[Page 980]]

    (2) The summons is served to determine whether or not records of the 
business transactions or affairs of an identified person have been made 
or kept, or
    (3) The summons does not identify the person with respect to whose 
liability the summons is issued (a ``John Doe'' summons issued under the 
provisions of 26 U.S.C. 7609(f)), or
    (4) The appropriate ATF officer petitions, and the court determines, 
on the basis of the facts and circumstances alleged, that there is 
reasonable cause to believe the giving of notice may lead to attempts to 
conceal, destroy, or alter records relevant to the examination, to 
prevent the communication of information from other persons through 
intimidation, bribery, or collusion, or to flee to avoid prosecution, 
testifying or production of records.
    (b) Within 3 days of the day on which the summons was served, the 
notice required by paragraph (a) of this section shall be served upon 
the person entitled to notice, or mailed by certified or registered mail 
to the last known address of such person, or, in the absence of a last 
known address, left with the person summoned. No examination of any 
records required to be produced under a summons as to which notice is 
required under paragraph (a) of this section may be made:
    (1) Before the close of the 23rd day after the day notice with 
respect to the summons is given in the manner provided in this 
paragraph, or
    (2) Where a proceeding under paragraph (c) of this section was begun 
within the 20-day period referred to in that paragraph and the 
requirements of paragraph (c) of this section have been met, expect in 
accordance with an order of the court having jurisdiction of such 
proceeding or with the consent of the person beginning the proceeding to 
quash.
    (c) If the person about whom information is being gathered has been 
given notice, that person has the right to institute, until and 
including the 20th day following the day such notice was served on or 
mailed, by certified or registered mail, to such notified person, a 
proceeding to quash the summons. During the time the validity of the 
summons is being litigated, the statutes of limitation are suspended 
under 26 U.S.C. 7609(e). Title 26 U.S.C. 7609 does not restrict the 
authority under 26 U.S.C. 7602 (or under any other provision of law) to 
examine records and witnesses without serving a summons and without 
giving notice of an examination.

(26 U.S.C. 7609)

[T.D. ATF-301, 55 FR 47608, Nov. 14, 1990]



Sec. 70.26  Third-party recordkeepers.

    (a) Definitions--(1) Accountant. A person is an ``accountant'' under 
26 U.S.C. 7609(a)(3)(F) for purposes of determining whether that person 
is a third-party recordkeeper if the person is registered, licensed, or 
certified under State law as an accountant.
    (2) Attorney. A person is an ``attorney'' under 26 U.S.C. 
7609(a)(3)(E) for purposes of determining whether that person is a 
third-party recordkeeper if the person is admitted to the bar of a State 
or the District of Columbia.
    (3) Credit cards--(i) Person extending credit through credit cards. 
The term ``person extending credit through credit cards or similar 
devices'' under 26 U.S.C. 7609(a)(3)(C) generally includes any person 
who issues a credit card. It does not include a seller of goods or 
services that honors credit cards issued by other parties but does not 
extend credit on the basis of credit cards or similar devices issued by 
itself.
    (ii) [Reserved]
    (iii) Similar devices to credit cards. An object is a ``similar 
device'' to a credit card under 26 U.S.C. 7609(a)(3)(C) only if it is 
physical in nature, such as a coupon book, a charge plate, or a letter 
of credit. Thus, a person who extends credit by requiring credit 
customers to sign sales slips without requiring use of physical objects 
issued by that person is not a third-party recordkeeper under 26 U.S.C. 
7609(a)(3)(C).
    (b) When third-party recordkeeper status arises. A person is a 
``third-party recordkeeper'' with respect to a given set of records only 
if the person made or kept the records in the person's capacity as a 
third-party recordkeeper. Thus, for instance, an accountant is not a 
third-party recordkeeper (by reason of being an accountant) with respect 
to the accountant's records of a

[[Page 981]]

sale of property by the accountant to another person. Similarly, a 
credit card issuer is not a third-party recordkeeper (by reason of being 
a person extending credit through the use of credit cards or similar 
devices) with respect to:
    (1) Records relating to noncredit card transactions, such as a cash 
sale by the issuer to a holder of the issuer's credit card; or
    (2) Records relating to transactions involving the use of another 
issuer's credit card.
    (c) Duty of third-party recordkeeper--(1) In General. Upon receipt 
of a summons, the third-party recordkeeper (``recordkeeper'') must begin 
to assemble the summoned records. The recordkeeper must be prepared to 
produce the summoned records on the date which the summons states the 
records are to be examined regardless of the institution or anticipated 
institution of a proceeding to quash or the recordkeeper's intervention 
(as allowed under 26 U.S.C. 7609(a)(3)(C)) into a proceeding to quash.
    (2) Disclosing recordkeepers not liable-- (i) In general. A 
recordkeeper, or an agent or employee thereof, who makes a disclosure of 
records as required by this section, in good faith reliance on the 
``Certificate of the Secretary'' (as defined in paragraph (c)(2)(ii) of 
this section) or an order of a court requiring production of records, 
will not be liable for such disclosure to any customer, or to any party 
with respect to whose tax liability the summons was issued, or to any 
other person.
    (ii) Certificate of the Secretary. The Director may issue to the 
recordkeeper a ``Certificate of the Secretary'' stating both:
    (A) That the 20-day period, within which a notified person may 
institute a proceeding to quash the summons has expired; and
    (B) That no proceeding has been properly instituted within that 
period.

The appropriate ATF officer may also issue a ``Certificate of the 
Secretary'' to the recordkeeper if the taxpayer, with respect to whose 
tax liability the summons was issued, expressly consents to the 
examination of the records summoned.
    (3) Reimbursement of costs. Recordkeepers may be entitled to 
reimbursement of their costs of assembling and preparing to produce 
summoned records, to the extent allowed by 26 U.S.C. 7610, even if the 
summons ultimately is not enforced.

(26 U.S.C. 7609)

[T.D. ATF-301, 55 FR 47608, Nov. 14, 1990]



Sec. 70.27  Right to intervene; right to institute a proceeding to quash.

    (a) Notified person. Under 26 U.S.C. 7609(a), the Bureau must give a 
notice of summons to any person, other than the person summoned, who is 
identified in the description of the books and records contained in the 
summons in order that such person may contest the right of the Bureau to 
examine the summoned records by instituting a proceeding to quash the 
summons. Thus, if the Bureau issues a summons to a bank requesting 
checking account records of more than one person all of whom are 
identified in the description of the records contained in the summons, 
then all such persons are notified persons entitled to notice under 26 
U.S.C. 7609(a). Therefore, if the Bureau requests the records of a joint 
bank account of A and B, both of whom are named in the summons, then 
both A and B are notified persons entitled to notice under 26 U.S.C. 
7609(a).
    (b) Right to institute a proceeding to quash--(1) In general. Title 
26 U.S.C. 7609(b) grants a notified person the right to institute a 
proceeding to quash the summons in the United States district court for 
the district within which the person summoned resides or is found. 
Jurisdiction of the court is based on 26 U.S.C. 7609(b). The act of 
filing a petition in district court does not in and of itself institute 
a proceeding to quash under 26 U.S.C. 7609(b)(2). Rather, the filing of 
the petition must be coupled with notice as required by 26 U.S.C. 
7609(b)(2)(B).
    (2) Elements of institution of a proceeding to quash. In order to 
institute a proceeding to quash a summons, the notified person (or the 
notified person's agent, nominee, or other person acting under the 
direction or control of the notified person) must, not later than

[[Page 982]]

the 20th day following the day the notice of the summons was served on 
or mailed to such notified person:
    (i) File a petition to quash in the name of the notified person in a 
district court having jurisdiction.
    (ii) Notify the Bureau by sending a copy of that petition by 
registered or certified mail to the Bureau employee and office 
designated to receive the copy in the notice of summons that was given 
to the notified person, and
    (iii) Notify the recordkeeper by sending to that recordkeeper by 
registered or certified mail a copy of the petition.

Failure to give timely notice to either the summoned party or the Bureau 
in the manner described in this paragraph means that the notified person 
has failed to institute a proceeding to quash and the district court has 
no jurisdiction to hear the proceeding. Thus, for example, if the 
notified person mails a copy of the petition to the summoned person but 
not to the designated Bureau employee and office, the notified person 
has failed to institute a proceeding to quash. Similarly, if the 
notified person mails a copy of such petition to the summoned person, 
but instead of sending a copy of the petition by registered or certified 
mail to the designated employee and office, the notified person gives 
the designated employee and office the petition by some other means, the 
notified person has failed to institute a proceeding to quash.
    (3) Failure to institute a proceeding to quash. If the notified 
person fails to institute a proceeding to quash within 20 days following 
the day the notice was served on or mailed to such notified person, the 
Bureau may examine the summoned records following the 23rd day after 
notice of the summons was served on or mailed to the notified person 
(see 26 U.S.C. 7609(d)(1)).
    (c) Presumption no notice has been mailed. Title 26 U.S.C. 
7609(b)(2)(B) permits a notified person to institute a proceeding to 
quash by filing a petition in district court and notifying both the 
Bureau and the summoned person. Unless the notified person has notified 
both the Bureau and the summoned person in the appropriate manner, the 
notified person has failed to institute a proceeding to quash. If the 
copy of the petition has not been delivered to the summoned person or 
the person and office designated to receive the notice on behalf of the 
Bureau within 3 days from the close of the 20-day period allowed to 
institute a proceeding to quash, it is presumed that the notification 
has not been timely mailed.

(26 U.S.C. 7609)

[T.D. ATF-301, 55 FR 47609, Nov. 14, 1990]



Sec. 70.28  Summonses excepted from 26 U.S.C. 7609 procedures.

    (a) In aid of the collection of certain liabilities--(1) In general. 
Title 26 U.S.C. 7609(c)(2)(B) contains an exception to the general 
notice requirement when a summons is issued to a third-party 
recordkeeper. That section excepts summonses issued in aid of the 
collection of the liability of any person against whom an assessment has 
been made or judgment rendered or the liability at law or in equity of 
any transferee of such a person.
    (2) Examples. Examples of summonses referred to in paragraph (a)(1) 
of this section are:
    (i) Summonses issued to determine the amount held in a bank in the 
name of a person against whom an assessment has been made or judgment 
rendered;
    (ii) Summonses issued to enforce transferee liability for a tax 
which has been assessed.
    (b) Numbered account (or similar arrangement). Under 26 U.S.C. 
7609(c)(2), a summons issued solely to determine the identity of a 
person having a numbered account (or similar arrangement) with a bank or 
other institution is excepted from the requirements of 26 U.S.C. 7609. A 
``numbered account (or similar arrangement)'' under 26 U.S.C. 7609(c)(2) 
is an account through which a person may authorize transactions solely 
through the use of a number, symbol, code name, or other device not 
involving the disclosure of the person's identity. A ``person having a 
numbered account (or similar arrangement)'' includes the person who 
opened the account and any person authorized to use the account or to 
receive records or statements concerning it.

(26 U.S.C. 7609)

[T.D. ATF-301, 55 FR 47610, Nov. 14, 1990]

[[Page 983]]



Sec. 70.29  Suspension of statutes of limitations.

    (a) Suspension while a proceeding under 26 U.S.C. 7609(b) is 
pending. Under 26 U.S.C. 7609(e)(1), the statutes of limitations of 26 
U.S.C. 6501 and 6531 are suspended if a notified person with respect to 
whose liability a summons is issued, or the notified person's agent, 
nominee, or other person acting under the direction or control of the 
notified person, takes any action as provided in 26 U.S.C. 7609(b).
    (1) Agent, nominee, etc. A person is a notified person's agent, 
nominee, or other person acting under the direction or control of a 
notified person for purposes of 26 U.S.C. 7609(e) if the person with 
respect to whose liability the summons is issued has the ability in fact 
or at law to cause the agent, etc., to take the actions permitted under 
26 U.S.C. 7609(b). Thus, in the case of a corporation, direction or 
control by the notified person may exist even though less than 50 
percent of the voting power of the corporation is held by the notified 
person.
    (2) Period during which a proceeding, etc., is pending. Under 26 
U.S.C. 7609(e), the statute of limitations shall be suspended for the 
period during which a proceeding and any appeals regarding the 
enforcement of such summons is pending. This period begins on the date 
the petition to quash the summons is filed in district court. The period 
continues until all appeals are disposed of, or until the expiration of 
the period in which an appeal may be taken or a request for a rehearing 
may be made. Full compliance, partial compliance, and noncompliance have 
no effect on the suspension provisions. The periods of limitations which 
are suspended under 26 U.S.C. 7609(e) are those which apply to the 
taxable periods to which the summons relates.
    (3) Taking of action as provided in 26 U.S.C. 7609(b). Title 26 
U.S.C. 7609(b) allows intervention by a notified person as a matter of 
right upon compliance with the Federal Rules of Civil Procedure. The 
phrase ``takes any action as provided in subsection (b)'', found in 26 
U.S.C. 7609(e), includes any intervention whether or not 26 U.S.C. 
7609(b) is specifically mentioned in the order of the court allowing 
intervention. The phrase also includes the fulfilling of only part of 
the requirements of 26 U.S.C. 7609(b)(2), relating to the right of a 
person to institute a proceeding to quash. Thus, for instance, if a 
notified person notifies a person who has been summoned by sending a 
copy of the petition by registered or certified mail but does not mail a 
copy of that notice to the appropriate person and office under 26 U.S.C. 
7609(b)(2)(B), the notified person has taken an action under 26 U.S.C. 
7609(e).
    (b) Suspension after 6 months of service of summons. In the absence 
of the resolution of the third-party recordkeeper's response to the 
summons described in 26 U.S.C. 7609(c) or the summoned party's response 
to a summons described in 26 U.S.C. 7609(f) the running of any period of 
limitations under 26 U.S.C. 6501 or under 26 U.S.C. 6531 with respect to 
any person with respect to whose liability the summons is issued (other 
than a person taking action as provided in 26 U.S.C. 7609(b)) shall be 
suspended for the period:
    (1) Beginning on the date which is 6 months after the service of 
such summons, and
    (2) Ending with the final resolution of such response.

(26 U.S.C. 7609)

[T.D. ATF-301, 55 FR 47610, Nov. 14, 1990]



Sec. 70.30  Time and place of examination.

    (a) Time and place. The time and place of examination pursuant to 
the provisions of 26 U.S.C. 7602 must be such time and place as may be 
fixed by an appropriate ATF officer and as are reasonable under the 
circumstances. The date fixed for appearance shall not be less than 10 
days from the date of the summons.
    (b) Restrictions on examination of taxpayer. No taxpayer is to be 
subjected to unnecessary examination or investigations, and only one 
inspection of a taxpayer's books of account shall be made for each 
taxable year unless the taxpayer requests otherwise or unless an 
authorized internal revenue or an appropriate ATF officer, after 
investigation, notifies the taxpayer in writing

[[Page 984]]

that an additional inspection is necessary.

(68A Stat. 902, as amended (26 U.S.C. 7605))

[T.D. ATF-450, 66 FR 29023, May 29, 2001]



Sec. 70.31  Entry of premises for examination of taxable objects.

    (a) General. An appropriate ATF officer may, in the performance of 
his or her duty, enter in the daytime any building or place where any 
articles or objects subject to tax are made, produced, or kept, so far 
as it may be necessary for the purpose of examining said articles or 
objects and also enter at night any such building or place, while open, 
for a similar purpose.
    (b) Distilled spirits plants. Any appropriate ATF officer may, at 
all times, as well by night as by day, enter any plant or any other 
premises where distilled spirits are produced or rectified, or structure 
or place used in connection therewith for storage or other purposes; to 
make examination of the materials, equipment and facilities thereon; and 
make such gauges and inventories as such officer deems necessary. 
Whenever any appropriate ATF officer, having demanded admittance, and 
having declared his or her name and office, is not admitted to such 
premises by the proprietor or other person having charge thereof, such 
officer may at all times, use such force as is necessary for such 
officer to gain entry to such premises.
    (c) Authority to break up grounds. An appropriate ATF officer, and 
any person acting in his or her aid, may break up the ground on any part 
of a distilled spirits plant, or any other premises where spirits are 
produced or rectified, or any ground adjoining or near to such plant or 
premises, or any wall or partition thereof, or belonging thereto, or 
other place, to search for any pipe, cock, private conveyance, or 
utensil; and, upon finding any such pipe or conveyance leading therefrom 
or thereto, to break up any ground, house, wall, or other place through 
or into which such pipe or other conveyance leads, and to break or cut 
away such pipe or other conveyance, and turn any cock, or to determine 
whether such pipe or other conveyance conveys or conceals any spirits, 
mash, wort, or beer, or other liquor, from the sight or view of the 
appropriate ATF officer, so as to prevent or hinder such officer from 
taking a true account thereof.

(68A Stat. 903, 72 Stat. 1357 (26 U.S.C. 7606, 5203))

[T.D. ATF-450, 66 FR 29023, May 29, 2001]



Sec. 70.32  Examination of records and objects.

    Any appropriate ATF officer may enter, during business hours, the 
premises of any regulated establishment for the purpose of inspecting 
and examining any records, articles, or other objects required to be 
kept by such establishment under 18 U.S.C. chapter 40 or 44, or 
provisions of 26 U.S.C. enforced and administered by the Bureau, or 
regulations issued pursuant thereto.

(68A Stat. 715, as amended, 903, 72 Stat. 1348, 1361, 1373, 1381, 1390, 
1391, 1395, 82 Stat. 231, as amended, 84 Stat. 955; (26 U.S.C. 5741, 
7606, 5146, 5207, 5275, 5367, 5415, 5504, 5555, 18 U.S.C. 923, 843))

[T.D. ATF-331, 57 FR 40328, Sept. 3, 1992, as amended by T.D. ATF-450, 
66 FR 29023, May 29, 2001]



Sec. 70.33  Authority of enforcement officers of the Bureau.

    Appropriate ATF officers may perform the following functions:
    (a) Carry firearms;
    (b) Execute and serve search warrants and arrest warrants, and serve 
subpoenas and summonses issued under authority of the United States;
    (c) In respect to the performance of such duty, make arrests without 
warrant for any offense against the United States committed in his 
presence, or for any felony cognizable under the laws of the United 
States if he has reasonable grounds to believe that the person to be 
arrested has committed, or is committing, such felony; and
    (d) In respect to the performance of such duty, make seizures of 
property

[[Page 985]]

subject to forfeiture to the United States.

(53 Stat. 1291, 62 Stat. 840, 68 Stat. 848, as amended, 72 Stat. 1429, 
as amended, 82 Stat. 233, as amended, 84 Stat. 956 (49 U.S.C. 782, 18 
U.S.C. 3615, 22 U.S.C. 1934, 26 U.S.C. 7608, 18 U.S.C. 924, 844); 26 
U.S.C. 7805 (68A Stat. 917), 27 U.S.C. 205 (49 Stat. 981 as amended), 18 
U.S.C. 926 (82 Stat. 959), and sec. 38, Arms Export Control Act (22 
U.S.C. 2778, 90 Stat. 744))

[T.D. ATF-6, 38 FR 32445, Nov. 26, 1973, as amended by T.D. ATF-48, 43 
FR 13531, Mar. 31, 1978. Redesignated by T.D. ATF-301, 55 FR 47606, Nov. 
14, 1990; T.D. ATF-450, 66 FR 29023, May 29, 2001]



Sec. 70.34  Listing by appropriate ATF officers of taxable objects owned by nonresidents.

    Whenever there are any articles in any internal revenue district 
subject to tax, which are not owned or possessed by, or under the care 
or control of, any person within such district, and of which no list has 
been transmitted to the appropriate ATF officer, as required by law or 
by regulations prescribed pursuant to law, an appropriate ATF officer 
shall enter the premises where such articles are situated, make such 
inspection of the articles as may be necessary, and make lists of the 
same according to the forms prescribed. Such lists, being subscribed by 
the appropriate ATF officer, are sufficient lists of such articles for 
all purposes.

[T.D. ATF-450, 66 FR 29023, May 29, 2001]

                        General Powers and Duties



Sec. 70.40  Authority to administer oaths and certify.

    Appropriate ATF officers are authorized to administer such oaths or 
affirmations and to certify to such papers as may be necessary under the 
tax laws administered by the Bureau, the Federal Alcohol Administration 
Act, or regulations issued thereunder, except that the authority to 
certify must not be construed as applying to those papers or documents 
the certification of which is authorized by separate order or directive.

(68A Stat. 904 (26 U.S.C. 7622))

[T.D. ATF-450, 66 FR 29023, May 29, 2001]



Sec. 70.41  Rewards for information relating to violations of tax laws administered by the Bureau.

    (a) In general. An appropriate ATF officer may approve such reward 
as he or she deems suitable for information that leads to the detection 
and punishment of any person guilty of violating any tax law 
administered by the Bureau or conniving at the same. The rewards 
provided for by 26 U.S.C. 7623 are limited in their aggregate to the sum 
appropriated therefor and shall be paid only in cases not otherwise 
provided for by law.
    (b) Eligibility to file claim for reward--(1) In general. Any 
person, other than certain present or former federal employees (see 
paragraph (b)(2) of this section), who submits, in the manner set forth 
in paragraph (d) of this section, information relating to the violation 
of tax laws administered and enforced by the Bureau, is eligible to file 
a claim for reward under 26 U.S.C. 7623.
    (2) Federal employees. No person who was an officer or employee of 
the Department of the Treasury at the time he came into possession of 
information relating to violations of tax laws administered by the 
Bureau, or at the time he divulged such information, shall be eligible 
for reward under 26 U.S.C. 7623 and this section. Any other federal 
employee, or former federal employee, is eligible to file a claim for 
reward if the information submitted came to his knowledge other than in 
the course of his official duties.
    (3) Deceased informants. A claim for reward may be filed by an 
executor, administrator, or other legal representative on behalf of a 
deceased informant if, prior to his death, the informant was eligible to 
file a claim for such reward under 26 U.S.C. 7623 and this section. 
Certified copies of the letters testamentary, letters of administration, 
or other similar evidence must be annexed to such a claim for reward on 
behalf of a deceased informant in order to show the authority of the 
legal representative to file the claim for reward.
    (c) Amount and payment of reward. All relevant factors, including 
the value of the information furnished in relation to the facts 
developed by the investigation of the violation, must be taken

[[Page 986]]

into account in determining whether a reward must be paid, and, if so, 
the amount thereof. The amount of a reward shall represent what the 
appropriate ATF officer deems to be adequate compensation in the 
particular case, normally not to exceed 10 percent of the additional 
taxes, penalties, and fines which are recovered as a result of the 
information. No reward, however, shall be paid with respect to any 
additional interest that may be collected. Payment of a reward will be 
made as promptly as the circumstances of the case permit, but generally 
not until the taxes, penalties, or fines involved have been collected. 
However, the informant may waive any claim for reward with respect to an 
uncollected portion of the taxes, penalties, or fines involved, in which 
case the claim may be immediately processed. No person is authorized 
under these regulations to make any offer, or promise, or otherwise to 
bind the appropriate ATF officer with respect to the payment of any 
reward or the amount thereof.
    (d) Submission of information. Persons desiring to claim rewards 
under the provisions of 26 U.S.C. 7623 and this section may submit 
information relating to violations of tax laws administered by the 
Bureau to an appropriate ATF officer. If the information is submitted in 
person, either orally or in writing, the name and official title of the 
person to whom it is submitted and the date on which it is submitted 
must be included in the formal claim for reward.
    (e) Anonymity. No unauthorized person shall be advised of the 
identity of an informant.
    (f) Filing claim for reward. An informant who intends to claim a 
reward under 26 U.S.C. 7623 should notify the person to whom he submits 
his information of such intention, and must file a formal claim, signed 
with his true name, as soon after submission of the information as 
practicable. If other than the informant's true name was used in 
furnishing the information, the claimant must include with his claim 
satisfactory proof of his identity as that of the informant. Claim for 
reward under the provisions of 26 U.S.C. 7623 must be made on ATF Form 
3200.13. ATF Form 3200.13 should be obtained from the office where the 
information is filed.

(68A Stat. 904 (26 U.S.C. 7623); 26 U.S.C. 7805 (68A Stat. 917), 27 
U.S.C. 205 (49 Stat. 981 as amended), 18 U.S.C. 926 (82 Stat. 959), and 
sec. 38, Arms Export Control Act (22 U.S.C. 2778, 90 Stat. 744))

[T.D. ATF-6, 38 FR 32445, Nov. 26, 1973, as amended by T.D. ATF-48, 43 
FR 13531, Mar. 31, 1978; 44 FR 55841, Sept. 28, 1979. Redesignated by 
T.D. ATF-301, 55 FR 47606, Nov. 14, 1990; T.D. ATF-312, 56 FR 31085, 
July 9, 1991; T.D. ATF-450, 66 FR 29024, May 29, 2001]



Sec. 70.42  Returns prepared or executed by appropriate ATF officers.

    (a) Preparation of returns--(1) General. If any person, required by 
provisions of 26 U.S.C. enforced and administered by the Bureau or by 
the regulations prescribed thereunder to make a return, fails to make 
such return, it may be prepared by an appropriate ATF officer provided 
the person required to make the return consents to disclose all 
information necessary for the preparation of such return. The return 
upon being signed by the person required to make it must be received by 
the appropriate ATF officer, as the return of such person.
    (2) Responsibility of person for whom return is prepared. A person 
for whom a return is prepared in accordance with paragraph (a)(1) of 
this section shall for all legal purposes remain responsible for the 
correctness of the return to the same extent as if the return had been 
prepared by such person.
    (b) Execution of returns--(1) General. If any person, required by 
provisions of 26 U.S.C. enforced and administered by the Bureau or by 
the regulations prescribed thereunder to make a return, fails to make a 
return at the time prescribed therefor, or makes, willfully or 
otherwise, a false or fraudulent return, the appropriate ATF officer 
must make such return from such officer's own knowledge and from such 
information as the officer can obtain through testimony or otherwise.
    (2) Status of returns. Any return made in accordance with paragraph 
(b)(1) of this section and subscribed by the appropriate ATF officer is 
prima facie good and sufficient for all legal purposes.

[[Page 987]]

    (c) Cross references. (1) For provisions that the return executed by 
an appropriate ATF officer will not start the running of the period of 
limitations on assessment and collection, see 26 U.S.C. 6501(b)(3) and 
Sec. 70.222(b) of this part.
    (2) For additions to the tax and additional amounts for failure to 
file returns, see section 6651 of the Internal Revenue Code.
    (3) For additions to the tax for failure to pay tax, see sections 
5684, 5761, and 6653 of the Internal Revenue Code.
    (4) For failure to make deposit of taxes or overstatement of deposit 
claims, see section 6656 of the Internal Revenue Code.
    (5) For an additional penalty for tendering a bad check or money 
order, see section 6657 of the Internal Revenue Code.
    (6) For certain failures to pay tax with respect to cases pending 
under Title 11 of the United States Code, see section 6658 of the 
Internal Revenue Code.
    (7) For failure to supply identifying numbers, see section 6676 of 
the Internal Revenue Code.
    (8) For penalties for aiding and abetting understatement of tax 
liability, see section 6701 of the Internal Revenue Code.
    (9) For criminal penalties for willful failure to make returns, see 
sections 7201, 7202, and 7203 of the Internal Revenue Code.
    (10) For criminal penalties for willfully making false or fraudulent 
returns, see sections 7206 and 7207 of the Internal Revenue Code.
    (11) For authority to examine books and witnesses, see section 7602 
of the Internal Revenue Code and Sec. 70.22.

(26 U.S.C. 6020)

[T.D. ATF-251, 52 FR 19314, May 22, 1987. Redesignated and amended by 
T.D. ATF-301, 55 FR 47606 and 47610, Nov. 14, 1990; T.D. ATF-450, 66 FR 
29024, May 29, 2001]



     Subpart D--Collection of Excise and Special (Occupational) Tax

                     Collection--General Provisions



Sec. 70.51  Collection authority.

    The taxes imposed by provisions of 26 U.S.C. enforced and 
administered by the Bureau must be collected by appropriate ATF 
officers.

(26 U.S.C. 6301)

[T.D. ATF-450, 66 FR 29024, May 29, 2001]



Sec. 70.52  Signature presumed authentic.

    An individual's name signed to a return, statement, or other 
document shall be prima facie evidence for all purposes that the return, 
statement or other document was actually signed by that individual.

(26 U.S.C. 6064)

[T.D. ATF-301, 55 FR 47611, Nov. 14, 1990]

                           Receipt of Payment



Sec. 70.61  Payment by check or money order.

    (a) Authority to Receive--(1) General. (i) The appropriate ATF 
officer may accept checks drawn on any bank or trust company 
incorporated under the laws of the United States or under the laws of 
any State, Territory, or possession of the United States, or money 
orders in payment for internal revenue taxes, provided such checks or 
money orders are collectible in U.S. currency at par, and subject to the 
further provisions contained in this section. The appropriate ATF 
officer may accept such checks or money orders in payment for internal 
revenue stamps (authorized under Subtitle E of the Internal Revenue Code 
or any provision of Subtitle F which relates to Subtitle E) to the 
extent and under the conditions prescribed in paragraph (a)(2) of this 
section. A check or money order in payment for internal revenue taxes or 
internal revenue stamps should be made payable to the Bureau of Alcohol, 
Tobacco and Firearms. A check or money order is payable at par only if 
the full amount thereof is payable without any deduction for exchange or 
other charges. As used in this section, the term ``money order'' means:
    (A) U.S. postal, bank, express, or telegraph money order; and
    (B) Money order issued by a domestic building and loan association 
(as defined in section 7701(a)(19) of the Internal Revenue Code) or by a 
similar association incorporated under the laws of a possession of the 
United States;

[[Page 988]]

    (C) A money order issued by such other organization as the 
appropriate ATF officer may designate; and
    (D) A money order described in paragraph (a)(1)(ii) of this section 
in cases therein described. However, the appropriate ATF officers may 
refuse to accept any personal check whenever there is good reason to 
believe that such check will not be honored upon presentment.
    (ii) An American citizen residing in a country with which the United 
States maintains direct exchange of money orders on a domestic basis may 
pay his/her tax by postal money order of such country. For a list of 
such countries, see section 171.27 of the Postal Manual of the United 
States.
    (iii) If one check or money order is remitted to cover two or more 
persons' taxes, the remittance should be accompanied by a letter of 
transmittal clearly identifying--
    (A) Each person whose tax is to be paid by the remittance;
    (B) The amount of the payment on account of each such person; and
    (C) The kind of tax paid.
    (2) Payment for internal revenue stamps--In general. The appropriate 
ATF officer may accept checks and money orders described in paragraph 
(a)(1) of this section, in payment for internal revenue stamps 
authorized under Subtitle E of the Internal Revenue Code or under any 
provision of Subtitle F which relates to Subtitle E. However, the 
appropriate ATF officer may refuse to accept any personal check whenever 
there is good reason to believe that the check will not be honored upon 
presentment.
    (3) Payment of tax on distilled spirits, wine, beer, tobacco 
products, pistols, revolvers, firearms (other than pistols and 
revolvers), shells and cartridges; proprietor in default. Where a check 
or money order tendered in payment for taxes on distilled spirits, wine 
or beer products (imposed under Chapter 51 of the Internal Revenue 
Code), or tobacco products (imposed under chapter 52 of the Internal 
Revenue Code), or pistols, revolvers, firearms (other than pistols and 
revolvers), shells and cartridges (imposed under chapter 32 of the 
Internal Revenue Code) is not paid on presentment, or where a taxpayer 
is otherwise in default in payment of such taxes, any remittance for 
such taxes made during the period of such default, and until the 
appropriate ATF officers finds that the revenue will not be jeopardized 
by the acceptance of personal checks, shall be in cash, or shall be in 
the form of a certified, cashier's, or treasurer's check, drawn on any 
bank or trust company incorporated under the laws of the United States, 
or under the laws of any State or possession of the United States, or a 
money order as described in paragraph (a)(1) of this section.
    (b) Checks or money orders not paid--(1) Ultimate liability. The 
person who tenders any check (whether certified or uncertified, 
cashier's, treasurer's, or other form of check) or money order in 
payment for taxes is not released from liability until the check or 
money order is paid; and, if the check or money order is not duly paid, 
the person shall also be liable for all legal penalties and additions, 
to the same extent as if such check or money order had not been 
tendered. For the penalty in case a check or money order is not duly 
paid, see section 6657 of the Internal Revenue Code. For assessment of 
the amount of a check or money order not duly paid see section 
6201(a)(2)(B) of the Internal Revenue Code.
    (2) Liability of banks and others. If any certified, treasurer's, or 
cashier's check (or other guaranteed draft) or money order is not duly 
paid, the United States shall have a lien for the amount of such check 
upon all assets of the bank or trust company on which drawn or for the 
amount of such money order upon the assets of the issuer thereof. The 
unpaid amount shall be paid out of such assets in preference to any 
other claims against such bank or issuer except the necessary costs and 
expenses of administration and the reimbursement of the United States 
for the amount expended in the redemption of the circulating notes of 
such bank. In addition, the Government has

[[Page 989]]

the right to exact payment from the person required to make the payment.

(26 U.S.C. 6311)

[T.D. ATF-251, 52 FR 19314, May 22, 1987. Redesignated by T.D. ATF-301, 
55 FR 47606, Nov. 14, 1990; T.D. ATF-331, 57 FR 40328, Sept. 3, 1992; 
T.D. ATF-353, 59 FR 2522, Jan. 18, 1994]



Sec. 70.62  Fractional parts of a cent.

    In the payment of any tax, a fractional part of a cent shall be 
disregarded unless it amounts to one-half cent or more, in which case it 
shall be increased to one cent. Fractional parts of a cent shall not be 
disregarded in the computation of taxes.

(26 U.S.C. 6313)

[T.D. ATF-251, 52 FR 19314, May 22, 1987. Redesignated by T.D. ATF-301, 
55 FR 47606, Nov. 14, 1990]



Sec. 70.63  Computations on returns or other documents.

    (a) Amounts shown on forms. To the extent permitted by any ATF form 
or instructions prescribed for use with respect to any ATF return, 
declaration, statement, or other document, or supporting schedules, any 
amount required to be reported in such form may be entered at the 
nearest whole dollar amount. The extent to which, and the conditions 
under which, such whole dollar amounts may be entered on any form will 
be set forth in the instructions issued with respect to such form. For 
the purpose of the computation to the nearest dollar, a fractional part 
of a dollar shall be disregarded unless it amounts to one-half dollar or 
more, in which case the amount (determined without regard to the 
fractional part of a dollar) shall be increased by $1. The following 
illustrates the application of this paragraph:

------------------------------------------------------------------------
                                                                To be
                        Exact amount                         reported as
------------------------------------------------------------------------
$18.49.....................................................          $18
$18.50.....................................................           19
$18.51.....................................................           19
------------------------------------------------------------------------

    (b) Election not to use whole dollar amounts--(1) Method of 
election. Where any ATF form, or the instructions issued with respect to 
such form, provide that whole dollar amounts shall be reported, any 
person making a return, declaration, statement, or other document on 
such form may elect not to use whole dollar amounts by reporting thereon 
all amounts in full, including cents.
    (2) Time of election. The election not to use whole dollar amounts 
must be made at the time of filing the return, declaration, statement, 
or other document. Such election may not be revoked after the time 
prescribed for filing such return, declaration, statement, or other 
document, including extensions of time granted for such filing. Such 
election may be made on any return, declaration, statement, or other 
document which is filed after the time prescribed for filing (including 
extensions of time), and such an election is irrevocable.
    (3) Effect of election. The taxpayer's election shall be binding 
only on the return, declaration, statement, or other document filed for 
a taxable year or period, and a new election may be made on the return, 
declaration, statement, or other document filed for a subsequent taxable 
year or period.
    (4) Fractional part of a cent. For treatment of the fractional part 
of a cent in the payment of taxes, see 26 U.S.C. 6313 and Sec. 70.62 of 
this part.
    (c) Inapplicability to computation of amount. The provisions of 
paragraph (a) of this section apply only to amounts required to be 
reported on a return, declaration, statement, or other document. They do 
not apply to items which must be taken into account in making the 
computations necessary to determine such amounts. For example, each item 
of liability must be taken into account at its exact amount, including 
cents, in computing the amount of total liability required to be 
reported on a tax return or supporting schedule. It is the amount of 
total liability, so computed, which is to be reported at the nearest 
whole dollar on the return or supporting schedule.

(26 U.S.C. 6102)

[T.D. ATF-301, 55 FR 47611, Nov. 14, 1990]



Sec. 70.64  Receipt for taxes.

    The appropriate ATF officer must, upon request, issue a receipt for 
each tax payment made (other than a payment for stamps sold or 
delivered). In

[[Page 990]]

addition, an appropriate ATF officer or employee must issue a receipt 
for each payment of 1 dollar or more made in cash, whether or not 
requested. In the case of payments made by check, the canceled check is 
usually a sufficient receipt. No receipt shall be issued in lieu of a 
stamp representing a tax, whether the payment is in cash or otherwise.

(26 U.S.C. 6314)

[T.D. ATF-301, 55 FR 47611, Nov. 14, 1990, as amended by T.D. ATF-450, 
66 FR 29024, May 29, 2001]



Sec. 70.65  Use of commercial banks.

    For provisions relating to the use of commercial banks and 
electronic fund transfer of taxpayment to the Treasury Account, see the 
regulations relating to the particular tax.

(Aug. 16, 1954, ch. 736, 68A Stat. 775 (26 U.S.C. 6301); June 29, 1956, 
ch. 462, 70 Stat. 391 (26 U.S.C. 6301))

[T.D. ATF-77, 46 FR 3002, Jan. 13, 1981. Redesignated by T.D. ATF-301, 
55 FR 47606, Nov. 14, 1990]

                               Assessment



Sec. 70.71  Assessment authority.

    The appropriate ATF officers are authorized and required to make all 
inquiries necessary to the determination and assessment of all taxes 
imposed under the provisions of 26 U.S.C. enforced and administered by 
the Bureau. The appropriate ATF officers are further authorized and 
required to make the determinations and the assessments of such taxes. 
The term ``taxes'' includes interest, additional amounts, additions to 
the taxes, and assessable penalties. The authority of the appropriate 
ATF officers to make assessment includes the following:
    (a) Taxes shown on return. The appropriate ATF officer shall assess 
all taxes determined by the taxpayer or by the appropriate ATF officer 
and disclosed on a return or list.
    (b) Unpaid taxes payable by stamp. (1) If without use of the proper 
stamp:
    (i) Any article upon which a tax is required to be paid by means of 
a stamp is sold or removed for sale or use by the manufacturer thereof, 
or
    (ii) Any transaction or act upon which a tax is required to be paid 
by means of a stamp occurs, the appropriate ATF officer, upon such 
information as can be obtained, must estimate the amount of the tax 
which has not been paid and the appropriate ATF officer must make 
assessment therefor upon the person the appropriate ATF officer 
determines to be liable for the tax. However, the appropriate ATF 
officer may not assess any tax which is payable by stamp unless the 
taxpayer fails to pay such tax at the time and in the manner provided by 
law or regulations.
    (2) If a taxpayer gives a check or money order as a payment for 
stamps but the check or money order is not paid upon presentment, then 
the appropriate ATF officer shall assess the amount of the check or 
money order against the taxpayer as if it were a tax due at the time the 
check or money order was received by appropriate ATF officer.

(26 U.S.C. 6201)

[T.D. ATF-301, 55 FR 47611, Nov. 14, 1990]



Sec. 70.72  Method of assessment.

    The assessment shall be made by an appropriate ATF officer signing 
the summary record of assessment. The summary record, through supporting 
records, shall provide identification of the taxpayer, the character of 
the liability assessed, the taxable period, if applicable, and the 
amount of the assessment. The amount of the assessment shall, in the 
case of tax shown on a return by the taxpayer, be the amount so shown, 
and in all other cases the amount of the assessment shall be the amount 
shown on the supporting list or record. The date of the assessment is 
the date the summary record is signed by an appropriate ATF officer. If 
the taxpayer requests a copy of the record of assessment, the taxpayer 
shall be furnished a copy of the pertinent parts of the assessment which 
set forth the name of the taxpayer, the date of assessment, the 
character of the liability assessed, the

[[Page 991]]

taxable period, if applicable, and the amounts assessed.

(26 U.S.C. 6203)

[T.D. ATF-251, 52 FR 19314, May 22, 1987. Redesignated and amended by 
T.D. ATF-301, 55 FR 47606 and 47612, Nov. 14, 1990; T.D. ATF-450, 66 FR 
29025, May 29, 2001]



Sec. 70.73  Supplemental assessments.

    If any assessment is incomplete or incorrect in any material 
respect, the appropriate ATF officer, subject to the applicable period 
of limitation, may make a supplemental assessment for the purpose of 
correcting or completing the original assessment.

(26 U.S.C. 6204)

[T.D. ATF-301, 55 FR 47612, Nov. 14, 1990]



Sec. 70.74  Request for prompt assessment.

    (a) Except as otherwise provided in Sec. 70.223 of this part, any 
tax for which a return is required and for which:
    (1) A decedent or an estate of a decedent may be liable, or
    (2) A corporation which is contemplating dissolution, is in the 
process of dissolution, or has been dissolved, may be liable, shall be 
assessed, or a proceeding in court without assessment for the collection 
of such tax shall be begun, within 18 months after the receipt of a 
written request for prompt assessment thereof.
    (b) The executor, administrator, or other fiduciary representing the 
estate of the decedent, or the corporation, or the fiduciary 
representing the dissolved corporation, as the case may be, shall, after 
the return in question has been filed, file the request for prompt 
assessment in writing with the appropriate ATF officer. The request, in 
order to be effective, must be transmitted separately from any other 
document, must set forth the classes of tax and the taxable periods for 
which the prompt assessment is requested, and must clearly indicate that 
it is a request for prompt assessment under the provisions of 26 U.S.C. 
6501(d). The effect of such a request is to limit the time in which an 
assessment of tax may be made, or a proceeding in court without 
assessment for collection of tax may be begun, to a period of 18 months 
from the date the request is filed with the proper regional director 
(compliance) or with the Chief, Tax Processing Center. The request does 
not extend the time within which an assessment may be made, or a 
proceeding in court without assessment shall be begun, after the 
expiration of 3 years from the date the return was filed. This special 
period of limitations will not apply to any return filed after a request 
for prompt assessment has been made unless an additional request is 
filed in the manner provided herein.
    (c) In the case of a corporation the 18-month period shall not apply 
unless:
    (1) The written request notifies the appropriate ATF officer that 
the corporation contemplates dissolution at or before the expirationof 
such 18-month period; the dissolution is in good faith begun before the 
expiration of such 18-month period; and the dissolution so begun is 
completed either before or after the expiration of such 18-month period; 
or
    (2) The written request notifies the appropriate ATF officer that a 
dissolution has in good faith begun, and the dissolution is completed 
either before or after the expiration of such 18-month period; or
    (3) A dissolution has been completed at the time the written request 
is made.

(26 U.S.C. 6501(d))

[T.D. ATF-301, 55 FR 47612, Nov. 14, 1990, as amended by T.D. ATF-353, 
59 FR 2522, Jan. 18, 1994]



Sec. 70.75  Jeopardy assessment of alcohol, tobacco, and firearms taxes.

    (a) If the appropriate ATF officer believes that the collection of 
any tax imposed under provisions of 26 U.S.C. enforced and administered 
by the Bureau will be jeopardized by delay, the appropriate ATF officer 
must, whether or not the time otherwise prescribed by law for filing the 
return or paying such tax has expired, immediately assess such tax, 
together with all interest, additional amounts and additions to the tax 
provided by law. An appropriate ATF officer will make an assessment 
under this section if collection is determined to be in jeopardy because 
at least one of the following conditions exists.
    (1) The taxpayer is or appears to be designing quickly to depart 
from the

[[Page 992]]

United States or to conceal himself or herself.
    (2) The taxpayer is or appears to be designing quickly to place the 
taxpayer's property beyond the reach of the Government either by 
removing it from the United States, by concealing it, or by dissipating 
it, or by transferring it to other persons.
    (3) The taxpayer's financial solvency is or appears to be 
threatened.
    (b) The tax, interest, additional amounts, and additions to the tax 
will, upon assessment, become immediately due and payable, and the 
appropriate ATF officer shall, without delay, issue a notice and demand 
for payment thereof in full.
    (c) See 26 U.S.C. 7429 with respect to requesting the appropriate 
ATF officer to review the making of the jeopardy assessment.
    (d) For provisions relating to stay of collection of jeopardy 
assessments, see Sec. 70.76 of this part.

(26 U.S.C. 6862 and 6863)

[T.D. ATF-301, 55 FR 47612, Nov. 14, 1990, as amended by T.D. ATF-450, 
66 FR 29025, May 29, 2001]



Sec. 70.76  Stay of collection of jeopardy assessment; bond to stay collection.

    (a) The collection of taxes assessed under 26 U.S.C. 6862 (referred 
to as a ``jeopardy assessment'' for purposes of this section) of any tax 
may be stayed by filing with the appropriate ATF officer a bond on the 
form to be furnished by ATF upon request.
    (b) The bond may be filed:
    (1) At any time before the time collection by levy is authorized 
under 26 U.S.C. 6331(a), or
    (2) After collection by levy is authorized and before levy is made 
on any property or rights to property, or
    (3) In the discretion of the appropriate ATF officer, after any such 
levy has been made and before the expiration of the period of 
limitations on collection.
    (c) The bond must be in an amount equal to the portion (including 
interest thereon to the date of payment as calculated by the appropriate 
ATF officer) of the jeopardy assessment collection of which is sought to 
be stayed. See 26 U.S.C. 7101 and Sec. 70.281, relating to the form of 
bond and the sureties thereon. The bond shall be conditioned upon the 
payment of the amount (together with interest thereon), for which the 
collection is stayed, at the time at which, but for the making of the 
jeopardy assessment, such amount would be due.
    (d) Upon the filing of a bond in accordance with this section, the 
collection of so much of the assessment as is covered by the bond will 
be stayed. The taxpayer may at any time waive the stay of collection of 
the whole or of any part of the amount covered by the bond. If as a 
result of such waiver any part of the amount covered by the bond is 
paid, or if any portion of the jeopardy assessment is abated by the 
appropriate ATF officer, then the bond shall (at the request of the 
taxpayer) be proportionately reduced.

(26 U.S.C. 6863)

[T.D. ATF-301, 55 FR 47613, Nov. 14, 1990]



Sec. 70.77  Collection of jeopardy assessment; stay of sale of seized property pending court decision.

    (a) General rule. In the case of an assessment under 26 U.S.C. 6862, 
and property seized for the collection of such assessment shall not 
(except as provided in paragraph (b) of this section) be sold until the 
latest of the following occurs:
    (1) The period provided in 26 U.S.C. 7429(a)(2) to request the 
appropriate ATF officer to review the action taken expires.
    (2) The period provided in 26 U.S.C. 7429(b)(1) to file an action in 
U.S. District Court expires if a request for redetermination is made to 
the appropriate ATF officer.
    (3) The U.S. District Court judgment in such action becomes final, 
if a civil action is begun in accordance with 26 U.S.C. 7429(b).
    (b) Exceptions. Notwithstanding the provisions of paragraph (a) of 
this section, any property seized may be sold:
    (1) If the taxpayer files with the appropriate ATF officer a written 
consent to the sale, or
    (2) If the appropriate ATF officer determines that the expenses of 
conservation and maintenance of the property will greatly reduce the net 
proceeds from the sale of such property, or

[[Page 993]]

    (3) If the property is of a type to which 26 U.S.C. 6336 (relating 
to sale of perishable goods) is applicable.

(26 U.S.C. 6863)

[T.D. ATF-301, 55 FR 47613, Nov. 14, 1990, as amended by T.D. ATF-353, 
59 FR 2522, Jan. 18, 1994]

                            Notice and Demand



Sec. 70.81  Notice and demand for tax.

    (a) General rule. Where it is not otherwise provided by provisions 
of 26 U.S.C. enforced and administered by the Bureau, the appropriate 
ATF officer shall, after the making of an assessment of a tax pursuant 
to Sec. 70.71 of this part, give notice to each person liable for the 
unpaid tax, stating the basis for the tax due, the amount of tax, 
interest, additional amounts, additions to the tax and assessable 
penalties, and demanding payment thereof. Such notice shall be given as 
soon as possible and within 60 days. However, the failure to give notice 
within 60 days does not invalidate the notice. Such notice shall be left 
at the dwelling or usual place of business of such person, or shall be 
sent by mail to such person's last known address.
    (b) Assessment prior to last date for payment. If any tax is 
assessed prior to the last date prescribed for payment of such tax, 
demand that such tax be paid will not be made before such last date, 
except where it is believed collection would be jeopardized by delay.

(26 U.S.C. 6303 and 7521)

[T.D. ATF-301, 55 FR 47613, Nov. 14, 1990]



Sec. 70.82  Payment on notice and demand.

    Upon receipt of notice and demand from the appropriate ATF officer, 
there shall be paid at the place and time stated in such notice the 
amount of any tax (including any interest, additional amounts, additions 
to the tax, and assessable penalties) stated in such notice and demand.

(26 U.S.C. 6155)

[T.D. ATF-301, 55 FR 47613, Nov. 14, 1990]

                                Interest



Sec. 70.90  Interest on underpayments.

    (a) General rule. Interest at the underpayment rate referred to in 
Sec. 70.93 of this part shall be paid on any unpaid amount of tax from 
the last date prescribed for payment of the tax (determined without 
regard to any extension of time for payment) to the date on which 
payment is received.
    (b) Interest on penalties, additional amounts, or additions to the 
tax-- (1) General. Interest shall be imposed on any assessable penalty, 
additional amount, or addition to the tax (other than an addition to tax 
imposed under section 6651(a)(1) of the Internal Revenue Code) only if 
such assessable penalty, additional amount, or addition to the tax is 
not paid within 10 days from the date of notice and demand therefor, and 
in such case interest shall be imposed only for the period from the date 
of the notice and demand to the date of payment.
    (2) Interest on certain additions to tax. Interest shall be imposed 
under this section on any addition to tax imposed by section 6651(a)(1) 
of the Internal Revenue Code for the period which (i) begins on the date 
on which the return of the tax with respect to which such addition to 
tax is imposed is required to be filed (including any extensions), and 
(ii) ends on the date of payment of such addition to tax.
    (c) Payments made within 10 days after notice and demand. If notice 
and demand is made for payment of any amount, and if such amount is paid 
within 10 days after the date of such notice and demand, interest under 
this section on the amount so paid shall not be imposed for the period 
after the date of such notice and demand.
    (d) Satisfaction by credits. If any portion of a tax is satisfied by 
credit of an overpayment, then no interest shall be imposed under 
section 6601 of the Internal Revenue Code on the portion of the tax so 
satisfied for any period during which, if the credit had not been made, 
interest would have been allowable with respect to such overpayment.
    (e) Last date prescribed for payment. (1) In determining the last 
date prescribed for payment, any extension of time

[[Page 994]]

granted for payment of tax shall be disregarded. The granting of an 
extension of time for the payment of tax does not relieve the taxpayer 
from liability for the payment of interest thereon during the period of 
the extension. Thus, except as provided in paragraph (d) of this 
section, interest at the underpayment rate referred to in Sec. 70.93 of 
this part is payable on any unpaid portion of the tax for the period 
during which such portion remains unpaid by reason of an extension of 
time for the payment thereof.
    (2) In the case of taxes payable by stamp and in all other cases 
where the last date for payment of the tax is not otherwise prescribed, 
such last date for the purpose of the interest computation shall be 
deemed to be the date on which the liability for the tax arose. However, 
such last date shall in no event be later than the date of issuance of a 
notice and demand for the tax.

(26 U.S.C. 6601)

[T.D. ATF-251, 52 FR 19314, May 22, 1987, as amended by T.D. ATF-301, 55 
FR 47613, Nov. 14, 1990]



Sec. 70.91  Interest on erroneous refund recoverable by suit.

    Any portion of an internal revenue tax (or any interest, assessable 
penalty, additional amount, or addition to tax) which has been 
erroneously refunded, and which is recoverable by a civil action 
pursuant to 26 U.S.C. 7405, shall bear interest at the underpayment rate 
referred to in Sec. 70.93 of this part.

(26 U.S.C. 6602)

[T.D. ATF-301, 55 FR 47614, Nov. 14, 1990]



Sec. 70.92  Interest on overpayments.

    (a) General rule. Except as otherwise provided, interest shall be 
allowed on any overpayment of any tax at the overpayment rate referred 
to in Sec. 70.93 of this part from the date of overpayment of the tax.
    (b) Date of overpayment. Except as provided in section 6401(a) of 
the Internal Revenue Code, relating to assessment and collection after 
the expiration of the applicable period of limitation, there can be no 
overpayment of tax until the entire tax liability has been satisfied. 
Therefore, the dates of overpayment of any tax are the date of payment 
of the first amount which (when added to previous payments) is in excess 
of the tax liability (including any interest, addition to the tax, or 
additional amount) and the dates of payment of all amounts subsequently 
paid with respect to such tax liability.
    (c) Period for which interest is allowable in case of refunds. If an 
overpayment of tax is refunded, interest shall be allowed from the date 
of the overpayment to a date determined by the appropriate ATF officer 
which shall not be more than 30 days prior to the date of the refund 
check. The acceptance of a refund check shall not deprive the taxpayer 
of the right to make a claim for any additional overpayment and interest 
thereon, provided the claim is made within the applicable period of 
limitation. However, if a taxpayer does not accept a refund check, no 
additional interest on the amount of the overpayment included in such 
check shall be allowed.
    (d) Period for which interest allowable in case of credits--(1) 
General rule. If an overpayment of tax is credited, interest shall be 
allowed from the date of overpayment to the due date (as determined 
under paragraph (d)(2) of this section of the amount against which such 
overpayment is credited.
    (2) Determination of due date--(i) General. The term due date, as 
used in this section, means the last day fixed by law or regulations for 
the payment of the tax (determined without regard to any extension of 
time), and not the date on which the appropriate ATF officer makes 
demand for the payment of the tax. Therefore, the due date of the tax is 
the date fixed for the payment of the tax;
    (ii) Tax not due yet. If a taxpayer agrees to the crediting of an 
overpayment against tax and the schedule of allowance is signed prior to 
the date on which such tax would otherwise become due, then the due date 
of such tax shall be the date on which such schedule is signed;
    (iii) Interest. In the case of a credit against interest that 
accrues for any period ending prior to January 1, 1983, the due date is 
the earlier of the date of assessment of such interest or December 31, 
1982. In the case of a credit

[[Page 995]]

against interest that accrues from any period beginning on or after 
December 31, 1982, such interest is due as it economically accrues on a 
daily basis, rather than when it is assessed.
    (iv) Additional amount, addition to the tax, or assessable penalty. 
In the case of a credit against an additional amount, addition to the 
tax, or assessable penalty, the due date is the earlier of the date of 
assessment or the date from which such amount would bear interest if not 
satisfied by payment or credit.

(26 U.S.C. 6611)

[T.D. ATF-251, 52 FR 19314, May 22, 1987, as amended by T.D. ATF-301, 55 
FR 47614, Nov. 14, 1990; T.D. ATF-358, 59 FR 29367, June 7, 1994]



Sec. 70.93  Interest rate.

    (a) In general. The interest rate established under 26 U.S.C. 
6621(a)(2) shall be:
    (1) On amounts outstanding before July 1, 1975, 6 percent per annum.
    (2) On amounts outstanding:

------------------------------------------------------------------------
                                                                Rate per
                After                        And before          annum
                                                               (percent)
------------------------------------------------------------------------
June 30, 1975.......................  Feb. 1, 1976...........          9
Jan. 31, 1976.......................  Feb. 1, 1978...........          7
Jan. 31, 1978.......................  Feb. 1, 1980...........          6
Jan. 31, 1980.......................  Feb. 1, 1982...........         12
Jan. 31, 1982.......................  Jan. 1, 1983...........         20
------------------------------------------------------------------------

    (3) On amounts outstanding after December 31, 1982, the adjusted 
rates for overpayment and underpayment established by the Commissioner 
of Internal Revenue under 26 U.S.C. 6621. These adjusted rates shall be 
published by the Commissioner in a Revenue Ruling. See Sec. 70.94 of 
this part for application of daily compounding in determining interest 
accruing after December 31, 1982. Because interest accruing after 
December 31, 1982, accrues at the prescribed rate per annum compounded 
daily, the effective annual percentage rate of interest will exceed the 
prescribed rate of interest.
    (b) Applicability of interest rates. (1) Computation. Interest and 
additions to tax on any amount outstanding on a specific day shall be 
computed at the annual rate applicable on such day.
    (2) Additions to tax. Additions to tax under any section of the 
Internal Revenue Code that refers to the annual rate established under 
26 U.S.C. 6621, shall be computed at the same rate per annum as the 
interest rate set forth under paragraph (a) of this section.
    (3) Interest. Interest provided for under any section of the 
Internal Revenue Code that refers to the annual rate established under 
this section, including 26 U.S.C. 6332(d)(1), 6343(c), 6601(a), 6602, 
6611(a), 7426(g), and 28 U.S.C. 1961(c)(1) or 2411, shall be computed at 
the rate per annum set forth under paragraph (a) of this section.

[T.D. ATF-301, 55 FR 47614, Nov. 14, 1990]



Sec. 70.94  Interest compounded daily.

    (a) General rule. Effective for interest accruing after December 31, 
1982, in computing the amount of any interest required to be paid under 
any provision of 26 U.S.C. or under 28 U.S.C. 1961(c)(1) or 2411, by the 
appropriate ATF officer or by the taxpayer, or in computing any other 
amount determined by reference to such amount of interest, or by 
reference to the interest rate established under 26 U.S.C. 6621, such 
interest or such other amount shall be compounded daily by dividing such 
rate of interest by 365 (366 in a leap year) and compounding such daily 
interest rate each day.
    (b) Applicability to unpaid amounts on December 31, 1982. The unpaid 
interest (or other amount) that shall be compounded daily includes the 
interest (or other amount) accrued but unpaid on December 31, 1982.

(26 U.S.C. 6622)

[T.D. ATF-301, 55 FR 47614, Nov. 14, 1990]

   Additions to the Tax, Additional Amounts, and Assessable Penalties

               Additions to the Tax and Additional Amounts



Sec. 70.95  Scope.

    For purposes of the administration of excise taxes by the Bureau of 
Alcohol, Tobacco and Firearms in accordance with Title 26 of the United 
States Code, the penalties prescribed in Secs. 70.96 through 70.107 
shall apply.

[T.D. ATF-251, 52 FR 19314, May 22, 1987, as amended by T.D. ATF-301, 55 
FR 47614, Nov. 14, 1990]

[[Page 996]]



Sec. 70.96  Failure to file tax return or to pay tax.

    (a) Addition to the tax--(1) Failure to file tax return. In the case 
of failure to file a return required under authority of:
    (i) Title 26 U.S.C. 61, relating to returns and records;
    (ii) Title 26 U.S.C. 51, relating to distilled spirits, wines and 
beer;
    (iii) Title 26 U.S.C. 52, relating to tobacco products, and 
cigarette papers and tubes; or
    (iv) Title 26 U.S.C. 53, relating to machine guns, destructive 
devices, and certain other firearms; and the regulations thereunder, on 
or before the date prescribed for filing (determined with regard to any 
extension of time for such filing), there shall be added to the tax 
required to be shown on the return the amount specified below unless the 
failure to file the return within the prescribed time is shown to the 
satisfaction of the appropriate ATF officer to be due to reasonable 
cause and not to willful neglect. The amount to be added to the tax is 5 
percent therof if the failure is not for more than one month, with an 
additional 5 percent for each additional month or fraction thereof 
during which the failure continues, but not to exceed 25 percent in the 
aggregate. The amount of any addition under paragraph (a)(1) of this 
section shall be reduced by the amount of the addition under paragraph 
(a)(2) of this section for any month to which an addition to tax applies 
under both paragraphs (a)(1) and (a)(2) of this section.
    (2) Failure to pay tax shown on return. In case of failure to pay 
the amount shown as tax on any return required to be filed after 
December 31, 1969 (without regard to any extension of time for filing 
thereof), specified in paragraph (a)(1) of this section, on or before 
the date prescribed for payment of such tax (determined with regard to 
any extension of time for payment), there shall be added to the tax 
shown on the return the amount specified below unless the failure to pay 
the tax within the prescribed time is shown to the satisfaction of the 
appropriate ATF officer to be due to reasonable cause and not to willful 
neglect. The amount to be added to the tax is 0.5 percent of the amount 
of tax shown on the return if the failure is for not more than 1 month, 
with an additional 0.5 percent for each additional month or fraction 
thereof during which the failure continues, but not to exceed 25 percent 
in the aggregate.
    (3) Failure to pay tax not shown on return. In case of failure to 
pay any amount in respect of any tax required to be shown on a return 
specified in paragraph (a)(1) of this section, which is not so shown 
(including an assessment made pursuant to 26 U.S.C. 6213(b)) within 10 
days from the date of the notice and demand therefor, there shall be 
added to the amount shown in the notice and demand the amount specified 
below unless the failure to pay the tax within the prescribed time is 
shown to the satisfaction of the appropriate ATF officer to be due to 
reasonable cause and not to willful neglect. The amount to be added to 
the tax is 0.5 percent of the amount stated in the notice and demand if 
the failure is for not more than one month, with an additional 0.5 
percent for each additional month or fraction thereof during which the 
failure continues, but not to exceed 25 percent in the aggregate. The 
maximum amount of the addition permitted under this subparagraph shall 
be reduced by the amount of the addition under paragraph (a)(1) of this 
section, which is attributable to the tax for which the notice and 
demand is made and which is not paid within 10 days from the date of 
notice and demand. The preceding sentence applies to amounts assessed on 
or before December 31, 1986.
    (4) Increases in penalties in certain cases. For increases in 
penalties for failure to file a return or pay tax in certain cases, see 
26 U.S.C. 6651(d) or (f).
    (b) Month defined. (1) If the date prescribed for filing the return 
or paying tax is the last day of a calendar month, each succeeding 
calendar month or fraction thereof during which the failure to file or 
pay tax continues shall constitute a month for purposes of section 6651.
    (2) If the date prescribed for filing the return or paying tax is a 
date other than the last day of a calendar month, the period which 
terminates with the

[[Page 997]]

date numerically corresponding thereto in the succeeding calendar month 
and each such successive period shall constitute a month for purposes of 
section 6651. If, in the month of February, there is no date 
corresponding to the date prescribed for filing the return or paying 
tax, the period from such date in January through the last day of 
February shall constitute a month for purposes of section 6651. Thus, if 
a return is due on January 30, the first month shall end on February 28 
(or 29 if a leap year), and the succeeding months shall end on March 30, 
April 30, etc.
    (3) If a return is not timely filed or tax is not timely paid, the 
fact that the date prescribed for filing the return or paying tax, or 
the corresponding date in any succeeding calendar month, falls on a 
Saturday, Sunday, or legal holiday is immaterial in determining the 
number of months for which the addition to the tax under section 6651 
applies.
    (c) Showing of reasonable cause. A taxpayer who wishes to avoid the 
addition to the tax for failure to file a tax return or pay tax must 
make an affirmative showing of all facts alleged as a reasonable cause 
for the taxpayers failure to file such return or pay such tax on time in 
the form of a written statement containing a declaration that it is made 
under penalties of perjury. Such statement should be filed with the 
appropriate ATF officer. In addition, where special tax returns of 
liquor dealers are delivered to an appropriate ATF officer, such 
statement may be delivered with the return. If the appropriate ATF 
officer determines that the delinquency was due to a reasonable cause 
and not to willful neglect, the addition to the tax will not be 
assessed. If the taxpayer exercised ordinary business care and prudence 
and was nevertheless unable to file the return within the prescribed 
time, then the delay is due to a reasonable cause. A failure to pay will 
be considered to be due to reasonable cause to the extent that the 
taxpayer has made a satisfactory showing that the taxpayer exercised 
ordinary business care and prudence in providing for payment of the tax 
liability and was nevertheless either unable to pay the tax or would 
suffer an undue hardship (as described in 26 CFR 1.6161-1(b)) if paid on 
the due date. In determining whether the taxpayer was unable to pay the 
tax in spite of the exercise of ordinary business care and prudence in 
providing for payment of a tax liability, consideration will be given to 
all the facts and circumstances of the taxpayer's financial situation, 
including the amount and nature of the taxpayer's expenditures in light 
of the income (or other amounts) the taxpayer could, at the time of such 
expenditures, reasonably expect to receive prior to the date prescribed 
for the payment of the tax. Thus, for example, a taxpayer who incurs 
lavish or extravagant living expenses in an amount such that the 
remainder of assets and anticipated income will be insufficient to pay 
the tax, has not exercised ordinary business care and prudence in 
providing for the payment of a tax liability. Further, a taxpayer who 
invests funds in speculative or illiquid assets has not exercised 
ordinary business care and prudence in providing for the payment of a 
tax liability unless, at the time of the investment, the remainder of 
the taxpayer's assets and estimated income will be sufficient to pay the 
tax or it can be reasonably foreseen that the speculative or illiquid 
investment made by the taxpayer can be utilized (by sale or as security 
for a loan) to realize sufficient funds to satisfy the tax liability. A 
taxpayer will be considered to have exercised ordinary business care and 
prudence if such taxpayer made reasonable efforts to conserve sufficient 
assets in marketable form to satisfy a tax liability and nevertheless 
was unable to pay all or a portion of the tax when it became due.
    (d) Penalty imposed on net amount due--(1) Credits against the tax. 
The amount of tax required to be shown on the return for purposes of 
section 6651(a)(1) and the amount shown as tax on the return for 
purposes of section 6651(a)(2) shall be reduced by the amount of any 
part of the tax which is paid on or before the date prescribed for 
payment of the tax and by the amount of any credit against the tax which 
may be claimed on the return.
    (2) Partial payments. (i) The amount of tax required to be shown on 
the return for purposes of section 6651(a)(2) of

[[Page 998]]

the Internal Revenue Code shall, for the purpose of computing the 
addition for any month, be reduced by the amount of any part of the tax 
which is paid after the date prescribed for payment and on or before the 
first day of such month, and
    (ii) The amount of tax stated in the notice and demand for purposes 
of section 6651(a)(3) of the Internal Revenue Code shall, for the 
purpose of computing the addition for any month, be reduced by the 
amount of any part of the tax which is paid before the first day of such 
month.
    (e) No addition to tax if fraud penalty assessed. No addition to the 
tax under section 6651 of the Internal Revenue Code shall be assessed 
with respect to an underpayment of tax if an addition to the tax for 
fraud is assessed with respect to the same underpayment under section 
6653(b). See section 6653(d) of the Internal Revenue Code.

(26 U.S.C. 6651)

[T.D. ATF-251, 52 FR 19314, May 22, 1987, as amended by T.D ATF-301, 55 
FR 47614, Nov. 14, 1990; T.D. ATF-353, 59 FR 2522, Jan. 18, 1994; T.D. 
ATF-450, 66 FR 29025, May 29, 2001]



Sec. 70.97  Failure to pay tax.

    (a) Negligence--(1) General. If any part of any underpayment (as 
defined in paragraph (d) of this section) is due to negligence or 
disregard of rules or regulations, there shall be added to the tax an 
amount equal to the sum of 5 percent of the underpayment, and an amount 
equal to 50 percent of the interest payable under section 6601 of the 
Internal Revenue Code with respect to the portion of such underpayment 
which is attributable to negligence for the period beginning on the last 
date prescribed by law for payment of such underpayment (determined 
without regard to any extension) and ending on the date of the 
assessment of the tax (or if earlier, the date or the payment of the 
tax).
    (2) Underpayment taken into account reduced by a portion 
attributable to fraud. There shall not be taken into account under 
paragraph (a) of this section any portion of an underpayment 
attributable to fraud with respect to which a penalty is imposed under 
paragraph (b) of this section.
    (3) Negligence. For purposes of paragraph (a) of this section, the 
term ``negligence'' includes any failure to make a reasonable attempt to 
comply with the provisions of the Internal Revenue Code, and the term 
``disregard'' includes any careless, reckless, or intentional disregard.
    (4) The provisions of paragraph (a) apply to returns the due date 
for which (determined without regard to extensions) is after December 
31, 1986.
    (b) Fraud--(1) General. If any part of any underpayment (as defined 
in paragraph (d) of this section) of tax required to be shown on a 
return is due to fraud, there shall be added to the tax an amount equal 
to 50 percent of the portion of the underpayment which is attributable 
to fraud and an amount equal to 50 percent of the interest payable under 
section 6601 of the Internal Revenue Code with respect to such portion 
for the period beginning on the last day prescribed by law for payment 
of such underpayment (determined without regard to any extension) and 
ending on the date of the assessment of the tax or, if earlier, the date 
of the payment of the tax.
    (2) The provisions of paragraph (b) of this section, apply to 
returns the due date for which (determined without regard to extensions) 
is on or before December 31, 1986.
    (c) Fraud--(1) General. If any part of any underpayment (as defined 
in paragraph (d) of this section) of tax required to be shown on a 
return is due to fraud, there shall be added to the tax an amount equal 
to the sum of 75 percent of the portion of the underpayment which is 
attributable to fraud and an amount equal to 50 percent of the interest 
payable under section 6601 of the Internal Revenue Code with respect to 
such portion for the period beginning on the last day prescribed by law 
for payment of such underpayment (determined without regard to any 
extension) and ending on the date of the assessment of the tax or, if 
earlier, the date of the payment of the tax.
    (2) Determination of portion attributable to fraud. If the regional 
director(s) (compliance) or the Chief, Tax Processing Center establishes 
that any

[[Page 999]]

portion of an underpayment is attributable to fraud, the entire 
underpayment shall be treated as attributable to fraud, except with 
respect to any portion of the underpayment which the taxpayer 
establishes is not attributable to fraud.
    (3) The provisions of this paragraph (c) apply to returns the due 
date for which (determined without regard to extensions) is after 
December 31, 1986.
    (d) Definition of underpayment. For purposes of this section, the 
term underpayment means the amount by which such tax imposed by the 
Internal Revenue Code exceeds the excess of--
    (1) The sum of,
    (i) The amount shown as the tax by the taxpayer upon the taxpayers 
return (determined without regard to any credit for an overpayment for 
any prior period, and without regard to any adjustment under authority 
of sections 6205(a) and 6413(a) of the Internal Revenue Code), if a 
return was made by the taxpayer within the time prescribed for filing 
such return (determined with regard to any extension of time for such 
filing) and an amount was shown as the tax by the taxpayer thereon, 
plus;
    (ii) Any amount, not shown on the return, paid in respect of such 
tax, over--
    (2) The amount of rebates made. For purposes of paragraph (d) of 
this section, the term rebate means so much of an abatement, credit, 
refund, or other repayment, as was made on the ground that the tax 
imposed was less than the excess of the amount specified in paragraph 
(d)(1) of this section over the rebates previously made.
    (e) No delinquency penalty if fraud assessed. If any penalty is 
assessed under paragraph (b) or (c) of this section (relating to fraud) 
for an underpayment of tax which is required to be shown on a return, no 
penalty under section 6651 of the Internal Revenue Code (relating to 
failure to file such return or pay tax) shall be assessed with respect 
to the portion of the underpayment which is attributable to fraud.
    (f) Failure to pay stamp tax. Any person who willfully fails to pay 
any tax which is payable by stamp or willfully attempts in any manner to 
evade or defeat any such tax or payment thereof, shall, in addition to 
other penalties provided by law, be liable to a penalty of 50 percent of 
the total amount of the underpayment of the tax.
    (g) Additional penalty. For additional penalty for failure to pay 
certain liquor and tobacco taxes, see 27 CFR 70.102.

(26 U.S.C. 6653)

[T.D. ATF-6, 38 FR 32445, Nov. 26, 1973, as amended by T.D. ATF-353, 59 
FR 2522, Jan. 18, 1994]



Sec. 70.98  Penalty for underpayment of deposits.

    (a) General rule. If any person is required by the provisions of 26 
U.S.C. enforced and administered by the Bureau or regulations prescribed 
thereunder to deposit any tax in a government depository that is 
authorized under 26 U.S.C. 6302(c) to receive the deposit, and fails to 
deposit the tax within the time prescribed therefor, a penalty shall be 
imposed on such person unless the failure is shown to be due to 
reasonable cause and not due to willful neglect. The penalty shall be:
    (1) For penalties assessed before October 22, 1986, 5 percent of the 
amount of the underpayment without regard to the period during which the 
underpayment continues.
    (2) For penalties assessed after October 21, 1986, on deposits of 
taxes required to be made before January 1, 1990, 10 percent of the 
amount of the underpayment without regard to the period during which the 
underpayment continues.
    (3) For deposits of taxes required to be made after December 31, 
1989.
    (i) 2 percent of the amount of the underpayment if the failure is 
for not more than 5 days,
    (ii) 5 percent of the amount of the underpayment if the failure is 
for more than 5 days but not more than 15 days,
    (iii) 10 percent of the amount of the underpayment if the failure is 
for more than 15 days,
    (iv) 15 percent of the amount of the underpayment if the tax is not 
deposited before the earlier of:
    (A) The day 10 days after the date of the first delinquency notice 
to the taxpayer under section 6303, or
    (B) The day on which notice and demand for immediate payment is 
given under 26 U.S.C. 6862 or the last sentence of 26 U.S.C. 6331(a).

[[Page 1000]]


For purposes of this section, the term ``underpayment'' means the amount 
of tax required to be deposited less the amount, if any, that was 
deposited on or before the date prescribed therefor. Section 7502(e) of 
the Internal Revenue Code applies in determining the date a deposit is 
made.
    (b) Assertion of reasonable cause. To show that the underpayment was 
due to reasonable cause and not due to willful neglect, a taxpayer must 
make an affirmative showing of all facts alleged as a reasonable cause 
in a written statement containing a declaration that it is made under 
the penalties of perjury. The statement must be filed with the 
appropriate ATF officer. If the appropriate ATF officer determines that 
the underpayment was due to reasonable cause and not due to willful 
neglect, the penalty will not be imposed.

(26 U.S.C. 6656)

[T.D. ATF-251, 52 FR 19314, May 22, 1987, as amended by T.D. ATF-301, 55 
FR 47615, Nov. 14, 1990; T.D. ATF-353, 59 FR 2523, Jan. 18, 1994]



Sec. 70.100  Penalty for fraudulently claiming drawback.

    Whenever any person fraudulently claims or seeks to obtain an 
allowance of drawback on goods, wares, or merchandise on which no 
internal revenue tax shall have been paid, or fraudulently claims any 
greater allowance of drawback than the tax actually paid, that person 
shall forfeit triple the amount wrongfully or fraudulently claimed or 
sought to be obtained, or the sum of $500, at the election of the 
appropriate ATF officer.

(26 U.S.C. 7304)

[T.D. ATF-301, 55 FR 47615, Nov. 14, 1990]



Sec. 70.101  Bad checks.

    If any check or money order in payment of any amount receivable 
under Title 26 of the United States Code is not duly paid, in addition 
to any other penalties provided by law, there shall be paid as a penalty 
by the person who tendered such check, upon notice and demand, in the 
same manner as tax, an amount equal to 1 percent of the amount of such 
check, except that if the amount of such check is less than $500, the 
penalty under this section shall be $5 or the amount of such check, 
whichever is the lesser. This section shall not apply if the person 
establishes to the satisfaction of the appropriate ATF officer that such 
check was tendered in good faith and that such person had reasonable 
cause to believe that such check would be duly paid.

(26 U.S.C. 6657)

[T.D. ATF-251, 52 FR 19314, May 22, 1987. Redesignated and amended by 
T.D. ATF-301, 55 FR 47606, 47615, Nov. 14, 1990]



Sec. 70.102  Coordination with title 11.

    (a) Certain failures to pay tax. No addition to the tax shall be 
made under section 6651 of the Internal Revenue Code for failure to make 
timely payment of tax with respect to a period during which a case is 
pending under Title 11 of the United States Code--
    (1) If such tax was incurred by the estate and the failure occurred 
pursuant to an order of the court finding probable insufficiency of 
funds of the estate to pay administrative expenses, or
    (2) If such tax was incurred by the debtor before the earlier of the 
order for relief or (in the involuntary case) the appointment of a 
trustee and
    (i) The petition was filed before the due date prescribed by law 
(including extensions) for filing a return of such tax, or
    (ii) The date for making the addition to the tax occurs on or after 
the day on which the petition was filed.
    (b) Exception for collected taxes. Paragraph (a) of this section 
shall not apply to any liability for an addition to the tax which arises 
from the failure to pay or deposit a tax withheld or collected from 
others and required to be paid to the United States.

(26 U.S.C. 6658)

[T.D. ATF-251, 52 FR 19314, May 22, 1987. Redesignated by T.D. ATF-301, 
55 FR 47606, Nov. 14, 1990]



Sec. 70.103  Failure to pay tax.

    Whoever fails to pay any tax imposed by Part I of Subchapter A of 
Chapter 51 of the Internal Revenue Code (liquor taxes) or by Chapter 52 
(tobacco taxes) at the time prescribed shall, in addition to any other 
penalty provided in the Internal Revenue Code, be liable to

[[Page 1001]]

a penalty of 5 percent of the tax due but unpaid. For additional 
penalties for failure to pay tax, see 27 CFR 70.97.

(26 U.S.C. 5684(a) and 5761(b))

[T.D. ATF-251, 52 FR 19314, May 22, 1987. Redesignated by T.D. ATF-301, 
55 FR 47606, Nov. 14, 1990]

                          Assessable Penalties



Sec. 70.111  Rules for application of assessable penalties.

    (a) Penalty assessed as tax. The penalties and liabilities provided 
by Subchapter B, Chapter 68, of the Internal Revenue Code shall be 
assessed and collected in the same manner as taxes. Except as otherwise 
provided, any reference in the Internal Revenue Code to ``tax'' imposed 
thereunder shall also be deemed to refer to the penalties and 
liabilities provided by Subchapter B of Chapter 68.
    (b) Person defined. For purposes of Subchapter B of Chapter 68 of 
the Internal Revenue Code, the term ``person'' includes an officer or 
employee of a corporation, or a member or employee of a partnership, who 
as such officer, employee, or member is under a duty to perform the act 
in respect of which the violation occurs.

(26 U.S.C. 6671)

[T.D. ATF-251, 52 FR 19314, May 22, 1987. Redesignated by T.D. ATF-301, 
55 FR 47606, Nov. 14, 1990]



Sec. 70.112  Failure to collect and pay over tax, or attempt to evade or defeat tax.

    Any person required to collect, truthfully account for, and pay over 
any tax imposed by the Internal Revenue Code who willfully fails to 
collect such tax, or truthfully account for and pay over such tax, or 
willfully attempts in any manner to evade or defeat any such tax or the 
payment thereof, shall, in addition to other penalties, be liable to a 
penalty equal to the total amount of the tax evaded, or not collected, 
or not accounted for and paid over. The penalty imposed by section 6672 
of the Internal Revenue Code applies only to the collection, accounting 
for, or payment over of taxes imposed on a person other than the person 
who is required to collect, account for, and pay over such taxes. No 
penalty under section 6653 of the Internal Revenue Code, relating to 
failure to pay tax, shall be imposed for any offense to which this 
section is applicable.

(26 U.S.C. 6672)

[T.D. ATF-251, 52 FR 19314, May 22, 1987. Redesignated by T.D. ATF-301, 
55 FR 47606, Nov. 14, 1990]



Sec. 70.113  Penalty for failure to supply taxpayer identification number.

    (a) In general. Except as provided in paragraph (b) of this section, 
any person who is required by the regulations under section 6109 of the 
Internal Revenue Code to include the taxpayer identification number in 
any return, statement, or other document, fails to comply with such 
requirement at the time prescribed by such regulations, such person 
shall pay a penalty of $50 for each such failure, except that the total 
amount imposed on such person for all such failures during any calendar 
year shall not exceed $100,000. For returns having a due date 
(determined without regard to extensions) after December 31, 1986, the 
total amount imposed on such person for all such failures during any 
calendar year shall not exceed $100,000. Such penalty shall be paid in 
the same manner as tax upon the issuance of a notice and demand 
therefor.
    (b) Reasonable cause. If any person who is required by the 
regulations under section 6109 of the Internal Revenue Code to supply a 
taxpayer identification number fails to comply with such requirement at 
the time prescribed by such regulations, but establishes to the 
satisfaction of the appropriate ATF officer that such failure was due to 
reasonable cause, the penalty set forth in paragraph (a) of this section 
shall not apply.
    (c) Persons required to supply taxpayer identification numbers. For 
regulations under section 6109 of the Internal Revenue Code relating to 
persons required to supply an identifying number, see the regulations 
relating to the particular tax.

(26 U.S.C. 6723)

[T.D. ATF-251, 52 FR 19314, May 22, 1987. Redesignated and amended by 
T.D. ATF-301, 55 FR 47606, 47615, Nov. 14, 1990]

[[Page 1002]]



Sec. 70.114  Penalties for aiding and abetting understatement of tax liability.

    (a) Imposition of penalty. Any person--(1) Who aids or assists in, 
procures, or advises with respect to, the preparation or presentation of 
any portion of a return, affidavit, claim, or other document in 
connection with any matter arising under the internal revenue laws,
    (2) Who knows that such portion will be used in connection with any 
material matter arising under the internal revenue laws, and
    (3) Who knows that such portion (if so used) will result in an 
understatement of the liability for tax of another person, shall pay a 
penalty with respect to each such document in the amount determined 
under paragraph (b).
    (b) Amount of penalty--(1) General. Except as provided in paragraph 
(b)(2) of this section, the amount of the penalty imposed by paragraph 
(a) of this section shall be $1,000.
    (2) Corporations. If the return, affidavit, claim, or other document 
relates to the tax liability of a corporation, the amount of the penalty 
imposed by paragraph (a) of this section shall be $10,000.
    (3) Only one penalty per person per period. If any person is subject 
to a penalty under paragraph (a) of this section with respect to any 
document relating to any taxpayer for any taxable period (or where there 
is no taxable period, any taxable event), such person shall not be 
subject to a penalty under paragraph (a) of this section with respect to 
any other document relating to such taxpayer for such taxable period (or 
event).
    (c) Activities of subordinates--(1) General. For purpose of 
paragraph (a) of this section, the term ``procures'' includes,
    (i) Ordering (or otherwise causing) a subordinate to do an act, and
    (ii) Knowing of, and not attempting to prevent, participation by a 
subordinate in an act.
    (2) For purposes of paragraph (c)(1) of this section, the term 
``subordinate'' means any other person (whether or not a director, 
officer, employee, or agent of the taxpayer involved) over whose 
activities the person has direction, supervision, or control.
    (d) Taxpayer not required to have knowledge. Paragraph (a) shall 
apply whether or not the understatement is with the knowledge or consent 
of the persons authorized or required to present the return, affidavit, 
claim, or other document.
    (e) Certain actions not treated as aid or assistance. For purposes 
of paragraph (a)(1) of this section, a person furnishing typing, 
reproducing, or other mechanical assistance with respect to a document 
shall not be treated as having aided or assisted in the preparation of 
such document by reason of such assistance.
    (f) Penalty in addition to other penalties. The penalty imposed by 
this section shall be in addition to any other penalty provided by law.

(26 U.S.C. 6701)

[T.D. ATF-251, 52 FR 19314, May 22, 1987. Redesignated by T.D. ATF-301, 
55 FR 47606, Nov. 14, 1990]

                     Abatements, Credits and Refunds

                          Procedure in General



Sec. 70.121  Amounts treated as overpayments.

    (a) The term overpayment includes any payment of any internal 
revenue tax which is assessed or collected after the expiration of the 
period of limitation applicable thereto.
    (b) An amount paid as tax shall not be considered not to constitute 
an overpayment solely by reason of the fact that there was no tax 
liability in respect of which such amount was paid.

(26 U.S.C. 6401)

[T.D. ATF-251, 52 FR 19314, May 22, 1987. Redesignated by T.D. ATF-301, 
55 FR 47606, Nov. 14, 1990]



Sec. 70.122  Authority to make credits or refunds.

    The appropriate ATF officer, within the applicable period of 
limitations, may credit any overpayment of tax, including interest 
thereon, against any outstanding liability for any tax (or for any 
interest, additional amount, addition to the tax, or assessable penalty) 
owed by the person making the overpayment and the balance, if any, shall

[[Page 1003]]

be refunded, subject to 26 U.S.C. 6402 (c) and (d) and the regulations 
thereunder, to such person by the appropriate ATF officer.

(26 U.S.C. 6402)

[T.D. ATF-301, 55 FR 47615, Nov. 14, 1990]



Sec. 70.123  Claims for credit or refund.

    (a) Requirement that claim be filed. (1) Credits or refunds of 
overpayments may not be allowed or made after the expiration of the 
statutory period of limitation properly applicable unless, before the 
expiration of such period, a claim therefor has been filed by the 
taxpayer. Furthermore, under section 7422 of the Internal Revenue Code, 
a civil action for refund may not be instituted unless a claim has been 
filed within the properly applicable period of limitation.
    (2) All claims relating to provisions of 26 U.S.C. enforced and 
administered by the Bureau, together with appropriate supporting 
evidence, shall be filed with the appropriate ATF officer. As to 
interest in the case of credits or refunds, see section 6611 of the 
Internal Revenue Code. See section 7502 for provisions treating timely 
mailing as timely filing and section 7503 for time for filing claim when 
the last day falls on a Saturday, Sunday, or legal holiday.
    (b) Grounds set forth in claim. (1) No refund or credit will be 
allowed after the expiration of the statutory period of limitation 
applicable to the filing of a claim therefor except upon one or more of 
the grounds set forth in a claim filed before the expiration of such 
period. The claim must set forth in detail each ground upon which credit 
or refund is claimed and facts sufficient to apprise the appropriate ATF 
officer of the exact basis thereof. The statement of the grounds and 
facts must be verified by a written declaration that it is made under 
the penalties of perjury. A claim which does not comply with this 
paragraph will not be considered for any purpose as a claim for the 
refund or credit.
    (2) The appropriate ATF officers do not have authority to refund on 
equitable grounds penalties or other amounts legally collected.
    (c) Form for filing claim. All claims by taxpayers for the refunding 
of taxes, interest, penalties, and additions to tax shall be made on 
Form 2635 (5620.8).
    (d) Proof of representative capacity. If a return is filed by an 
individual and, after the individuals death, a refund claim is filed by 
a legal representative, certified copies of the letters testamentary, 
letters of administration, or other similar evidence must be annexed to 
the claim, to show the authority of the legal representative to file the 
claim. If an executor, administrator, guardian, trustee, receiver, or 
other fiduciary files a return and thereafter a refund claim is filed by 
the same fiduciary, documentary evidence to establish the legal 
authority of the fiduciary need not accompany the claim, provided a 
statement is made in the claim showing that the return was filed by the 
fiduciary and that the latter is still acting. In such cases, if a 
refund is to be paid, letters testamentary, letters of administration, 
or other evidence may be required, but should be submitted only upon the 
receipt of a specific request therefor. If a claim is filed by a 
fiduciary other than the one by whom the return was filed, the necessary 
documentary evidence should accompany the claim. A claim may be executed 
by an agent of the person assessed, but in such case a power of attorney 
must accompany the claim.
    (e) Mailing of refund check. (1) Checks in payment of claims allowed 
will be drawn in the names of the persons entitled to the money and, 
except as provided in paragraph (e)(2) of this section, the checks may 
be sent direct to the claimant or to such person in care of an attorney 
or agent who has filed a power of attorney specifically authorizing the 
attorney or agent to receive such checks.
    (2) Checks in payment of claims which have either been reduced to 
judgment or settled in the course or as a result of litigation will be 
drawn in the name of the person or persons entitled to the money and 
will be sent to the Assistant Attorney General, Tax Division, Department 
of Justice, for delivery to the taxpayer or the counsel of record in the 
court proceeding.

[[Page 1004]]

    (3) For restrictions on the assignment of claims, see 31 U.S.C. 
3727.

(26 U.S.C. 6402)

(Approved by the Office of Management and Budget under control number 
1512-0141)

[T.D. ATF-251, 52 FR 19314, May 22, 1987. Redesignated and amended by 
T.D. ATF-301, 55 FR 47606, 47615, Nov. 14, 1990; T.D. ATF-450, 66 FR 
29025, May 29, 2001]



Sec. 70.124  Payments in excess of amounts shown on return.

    In certain cases, the taxpayer's payments in respect of a tax 
liability, made before the filing of the taxpayer's return, may exceed 
the amount of tax shown on the return. In any case in which the 
appropriate ATF officer determines that the payments by the taxpayer 
(made within the period prescribed for payment and before the filing of 
the return) are in excess of the amount of tax shown on the return, the 
appropriate ATF officer may make credit or refund of such overpayment 
without awaiting examination of the completed return and without 
awaiting filing of a claim for refund. However, the provisions of 
Sec. 70.123 of this part are applicable to such overpayment, and 
taxpayers should submit claims for refund to protect themselves in the 
event the appropriate ATF officer fails to make such determination and 
credit or refund.

(26 U.S.C. 6402)

(Approved by the Office of Management and Budget under control number 
1512-0141)

[T.D. ATF-301, 55 FR 47616, Nov. 14, 1990]



Sec. 70.125  Abatements.

    (a) The appropriate ATF officer may abate the unpaid portion of any 
assessment or liability, if the assessment is in excess of the correct 
tax liability, if the assessment is made subsequent to the expiration of 
the period of limitation applicable thereto, or if the assessment has 
been erroneously or illegally made.
    (b) If more than the correct amount of tax, interest, additional 
amount, addition to the tax, or assessable penalty is assessed but not 
paid to ATF, the person against whom the assessment is made may file a 
claim for abatement of such overassessment. Each claim for abatement 
under this section shall be made on Form 2635 (5020.8), Claim--Alcohol, 
Tobacco and Firearms Taxes, in accordance with the instructions on the 
form. All such claims must be filed with the appropriate ATF officer who 
made demand for the amount assessed.
    (c) The appropriate ATF officer may issue uniform instructions to 
abate amounts the collection of which is not warranted because of the 
administration and collection costs.

(26 U.S.C. 6404)

(Approved by the Office of Management and Budget under control number 
1512-0141)

[T.D. ATF-301, 55 FR 47616, Nov. 14, 1990, as amended by T.D. ATF-450, 
66 FR 29025, May 29, 2001]



Sec. 70.126  Date of allowance of refund or credit.

    The date on which the appropriate ATF officer, first certifies the 
allowance of an overassessment in respect of any internal revenue tax 
imposed by the provisions of 26 U.S.C. enforced and administered by the 
Bureau shall be considered as the date of allowance of refund or credit 
in respect of such tax.

(26 U.S.C. 6407)

[T.D. ATF-301, 55 FR 47616, Nov. 14, 1990, as amended by T.D. ATF-450, 
66 FR 29025, May 29, 2001]



Sec. 70.127  Overpayment of installment.

    If any installment of tax is overpaid, the overpayment shall first 
be applied against any outstanding installments of such tax. If the 
overpayment exceeds the correct amount of tax due, the overpayment shall 
be credited or refunded as provided in Secs. 70.122 to 70.124 of this 
part, inclusive.

(26 U.S.C. 6403)

[T.D. ATF-301, 55 FR 47616, Nov. 14, 1990]

                       Rule of Special Application



Sec. 70.131  Conditions to allowance.

    (a) For regulations under section 6416 of the Internal Revenue Code, 
see part 53 of this chapter, relating to manufacturers excise taxes on 
firearms and ammunition.
    (b) For regulations under section 6423 of the Internal Revenue Code, 
see part 29 of this chapter, relating to distilled

[[Page 1005]]

spirits, wine, and beer; and part 46 of this chapter, relating to 
tobacco products, and cigarette papers and tubes.

(26 U.S.C. 6416 and 6423)

[T.D. ATF-331, 57 FR 40328, Sept. 3, 1992, as amended by T.D. ATF-457, 
66 FR 32219, June 14, 2001; T.D. ATF-462, 66 FR 42737, Aug. 15, 2001]

                             Lien for Taxes

    Source: Sections 70.141 through 70.151 added by T.D. ATF-301, 55 FR 
47616, Nov. 14, 1990, unless otherwise noted.



Sec. 70.141  Lien for taxes.

    If any person liable to pay any tax under provisions of 26 U.S.C. 
enforced and administered by the Bureau neglects or refuses to pay the 
same after demand, the amount (including any interest, additional 
amount, addition to tax, or assessable penalty, together with any costs 
that may accrue in addition thereto) shall be a lien in favor of the 
United States upon all property and rights to property, whether real or 
personal, tangible or intangible, belonging to such person. The lien 
attaches to all property and rights to property belonging to such person 
at any time during the period of the lien, including any property or 
rights to property acquired by such person after the lien arises. Solely 
for purposes of this section and Secs. 70.161 and 70.162 of this part, 
any interest in restricted land held in trust by the United States for 
an individual noncompetent Indian (and not for a tribe) shall not be 
deemed to be property, or a right to property, belonging to such Indian.

(26 U.S.C. 6321)



Sec. 70.142  Scope of definitions.

    Except as otherwise provided by Sec. 70.143 of this part, the 
definitions provided by Secs. 70.143 apply for purposes of Sec. 70.142 
through 70.149 and Secs. 70.231 through 70.234 of this part.



Sec. 70.143  Definitions.

    (a) Security interest--(1) In general. The term security interest 
means any interest in property acquired by contract for the purpose of 
securing payment or performance of an obligation or indemnifying against 
loss or liability. A security interest exists ay any time:
    (i) If, at such time, the property is in existence and the interest 
has become protected under local law against a subsequent judgment lien 
(as provided in paragraph (a)(2) of this section) arising out of an 
unsecured obligation; and
    (ii) To the extent that, at such time, the holder has parted with 
money or money's worth (as defined in paragraph (a)(3) of this section). 
For purposes of paragraph (a)(1) of this section, a contract right (as 
defined in Sec. 70.232(c)(2)(i) of this part) is in existence when the 
contract is made. An account receivable (as defined in 
Sec. 70.232(c)(2)(ii) of this part) is in existence when, and to the 
extent, a right to payment is earned by performance. A security interest 
must be in existence, within the meaning of paragraph (a) of this 
section, at the time as of which its priority against a tax lien is 
determined. For example, to be afforded priority under the provisions of 
Sec. 70.145(a) of this part, a security interest must be in existence 
within the meaning of paragraph (a) of this section before a notice of 
lien is filed.
    (2) Protection against a subsequent judgment lien. For purposes of 
paragraph (a) of this section, a security interest is deemed to be 
protected against a subsequent judgment lien on:
    (i) The date on which all actions required under local law to 
establish the priority of a security interest against a judgment lien 
have been taken, or
    (ii) If later, the date on which all required actions are deemed 
effective, under local law, to establish the priority of the security 
interest against a judgment lien.

For purposes of paragraph (a)(2) of this section, the dates described in 
paragraphs (a)(2) (i) and (ii) of this section shall be determined 
without regard to any rule or principle of local law which permits the 
relation back or the making of any requisite action retroactive to a 
date earlier than the date on which the action is actually performed. 
For purposes of paragraph (a) of this section, a judgment lien is a lien 
held by a judgment lien creditor as defined in paragraph (g) of this 
section.
    (3) Money or money's worth. For purposes of paragraph (a) of this 
section,

[[Page 1006]]

the term ``money or money's worth'' includes money, a security (as 
defined in paragraph (d) of this section), tangible or intangible 
property, services, and other consideration reducible to a money value. 
Money or money's worth also includes any consideration which otherwise 
would constitute money or money's worth under the preceding sentence 
which was parted with before the security interest would otherwise exist 
if, under local law, past consideration is sufficient to support an 
agreement giving rise to a security interest. A relinquishing or 
promised relinquishment of dower, curtesy, or of a statutory estate 
created in lieu of dower or curtesy, or of other marital rights is not a 
consideration in money or money's worth. Nor is love and affection, 
promise of marriage, or any other consideration not reducible to a money 
value a consideration in money or money's worth.
    (4) Holder of a security interest. For purposes of paragraph (a) of 
this section, the holder of a security interest is the person in whose 
favor there is a security interest. For provisions relating to the 
treatment of a purchaser of commercial financing security as a holder of 
a security interest, see Sec. 70.232(e) of this part.
    (b) Mechanic's lienor. The term mechanic's lienor means any person 
who under local law has a lien on real property (or on the proceeds of a 
contract relating to real property) for services, labor, or materials 
furnished in connection with the construction or improvement (including 
demolition) of the property. A mechanic's lienor is treated as having a 
lien on the later of:
    (1) The date on which the mechanic's lien first becomes valid under 
local law against subsequent purchasers of the real property without 
actual notice, or
    (2) The date on which the mechanic's lienor begins to furnish the 
services, labor, or materials.
    (c) Motor vehicle. (1) The term motor vehicle means a self-propelled 
vehicle which is registered for highway use under the laws of any State, 
the District of Columbia, or a foreign country.
    (2) A motor vehicle is ``registered for highway use'' at the time of 
a sale if immediately prior to the sale it is so registered under the 
laws of any State, the District of Columbia, or a foreign country. Where 
immediately prior to the sale of a motor vehicle by a dealer, the dealer 
is permitted under local law to operate it under a dealer's tag, 
license, or permit issued to the dealer, the motor vehicle is considered 
to be registered for highway use in the name of the dealer at the time 
of the sale.
    (d) Security. The term security means any bond, debenture, note, or 
certificate or other evidence of indebtedness, issued by a corporation 
or a government or political subdivision thereof, with interest coupons 
or in registered form, share of stock, voting trust certificate, or any 
certificate of interest or participation in, certificate of deposit or 
receipt for, temporary or interim certificate for, or warrant or right 
to subscribe to or purchase, any of the foregoing; negotiable 
instrument; or money.
    (e) Tax lien filing. The term tax lien filing means the filing of 
notice of the lien imposed by 26 U.S.C. 6321 in accordance with 
Sec. 70.148 of this part.
    (f) Purchaser--(1) In general. The term purchaser means a person 
who, for adequate and full consideration in money or money's worth (as 
defined in paragraph (f)(3) of this section), acquires an interest 
(other than a lien or security interest) in property which is valid 
under local law against subsequent purchasers without actual notice.
    (2) Interest in property. For purposes of paragraph (f) of this 
section, each of the following interests is treated as an interest in 
property, if it is not a lien or security interest:
    (i) A lease of property,
    (ii) A written executory contract to purchase or lease property,
    (iii) An option to purchase or lease property and any interest 
therein, or
    (iv) An option to renew or extend a lease of property.
    (3) Adequate and full consideration in money or money's worth. For 
purposes of paragraph (f) of this section, the term ``adequate and full 
consideration in money or money's worth'' means a consideration in money 
or money's worth having a reasonable relationship to the true value of 
the interest in property acquired. See paragraph (a)(3) of this section 
for definition of the term ``money or money's worth.'' Adequate

[[Page 1007]]

and full consideration in money or money's worth may include the 
consideration in a bona fide bargain purchase. The term also includes 
the consideration in a transaction in which the purchaser has not 
completed performance of an obligation, such as the consideration in an 
installment purchase contract where the purchaser has not completed the 
installment payments.
    (g) Judgment lien creditor. The term judgment lien creditor means a 
person who has obtained a valid judgment, in a court of record and of 
competent jurisdiction, for the recovery of specifically designated 
property or for a certain sum of money. In the case of a judgment for 
the recovery of a certain sum of money, a judgment lien creditor is a 
person who has perfected a lien under the judgment on the property 
involved. A judgment lien is not perfected until the identity of the 
lienor, the property subject to the lien, and the amount of the lien are 
established. Accordingly, a judgment lien does not include an attachment 
or garnishment lien until the lien has ripened into judgment, even 
though under local law the lien of the judgment relates back to an 
earlier date. If recording or docketing is necessary under local law 
before a judgment becomes effective against third parties acquiring 
liens on real property, a judgment lien under such local law is not 
perfected with respect to real property until the time of such 
recordation or docketing. If, under local law, levy or seizure is 
necessary before a judgment lien becomes effective against third parties 
acquiring liens on personal property, then a judgment lien under such 
local law is not perfected until levy or seizure of the personal 
property involved. The term ``judgment'' does not include the 
determination of a quasi-judicial body or of an individual acting in a 
quasi-judicial capacity such as the action of State taxing authorities.

(26 U.S.C. 6323)



Sec. 70.144  Special rules.

    (a) Actual notice or knowledge. For purposes of 26 U.S.C. 6321 
through 6327, an organization is deemed, in any transaction, to have 
actual notice or knowledge of any fact from the time the fact is brought 
to the attention of the individual conducting the transaction, and in 
any event from the time the fact would have been brought to the 
individual's attention if the organization had exercised due diligence. 
An organization exercises due diligence if it maintains reasonable 
routines for communicating significant information to the person 
conducting the transaction and there is reasonable compliance with the 
routines. Due diligence does not require an individual acting for the 
organization to communicate information unless such communication is 
part of the individual's regular duties or unless the individual has 
reason to know of the transaction and that the transaction would be 
materially affected by the information.
    (b) Subrogation: Where, under local law, one person is subrogated to 
the rights of another with respect to a lien or interest, such person 
shall be subrogated to such rights for purposes of any lien imposed by 
26 U.S.C. 6321 or 6324. Thus, if a tax lien imposed by 26 U.S.C. 6321 or 
6324 is not valid with respect to a particular interest as against the 
holder of that interest, then the tax lien also is not valid with 
respect to that interest as against any person who, under local law, is 
a successor in interest to the holder of that interest.
    (c) Disclosure of amount of outstanding lien. If a notice of lien 
has been filed (see Sec. 70.148 of this part), the amount of the 
outstanding obligation secured by the lien is authorized to be disclosed 
as a matter of public record on ATF Form 5651.2 ``Notice of Federal Tax 
Lien Under Internal Revenue Laws.'' The amount of the outstanding 
obligation secured by the lien remaining unpaid at the time of an 
inquiry is authorized to be disclosed to any person who has a proper 
interest in determining this amount. Any person who has a right in the 
property or intends to obtain a right in the property by purchase or 
otherwise will, upon presentation of satisfactory evidence, be 
considered to have a proper interest. Any person desiring this 
information may make a request to the office of the Bureau named on the 
notice of lien with respect to which the request is made. The request 
should clearly describe the property

[[Page 1008]]

subject to the lien, identify the applicable lien, and give the reasons 
for requesting the information.

(26 U.S.C. 6323)



Sec. 70.145  Purchasers, holders of security interests, mechanic's lienors, and judgment lien creditors.

    (a) Invalidity of lien without notice. The lien imposed by 26 U.S.C. 
6321 is not valid against any purchaser (as defined in Sec. 70.143(f) of 
this part), holder of a security interest (as defined in Sec. 70.143(a) 
of this part), mechanic's lienor (as defined in Sec. 70.143(b) of this 
part), or judgment lien creditor (as defined in Sec. 70.143(g) of this 
part) until a notice of lien is filed in accordance with Sec. 70.148 of 
this part. Except as provided by 26 U.S.C. 6323, if a person becomes a 
purchaser, holder of a security interest, mechanic's lienor, or judgment 
lien creditor after a notice of lien is filed in accordance with 
Sec. 70.148 of this part, the interest acquired by such person is 
subject to the lien imposed by 26 U.S.C. 6321.
    (b) Cross references. For provisions relating to the protection 
afforded a security interest arising after tax lien filing, which 
interest is covered by a commercial transactions financing agreement, 
real property construction or improvement financing agreement, or an 
obligatory disbursement agreement, see Secs. 70.232, 70.233, and 70.234 
of this part, respectively. For provisions relating to the protection 
afforded to a security interest coming into existence by virtue of 
disbursements, made before the 46th day after the date of tax lien 
filing, see Sec. 70.146 of this part. For provisions relating to 
priority afforded to interest and certain other expenses with respect to 
a lien or security interest having priority over the lien imposed by 26 
U.S.C. 6321, see Sec. 70.147 of this part. For provisions relating to 
certain other interests arising after tax lien filing, see Sec. 70.231 
of this part.

(26 U.S.C. 6323)



Sec. 70.146  45-day period for making disbursements.

    Even though a notice of a lien imposed by 26 U.S.C. 6321 is filed in 
accordance with Sec. 70.149 of this part, the lien is not valid with 
respect to a security interest which comes into existence, after tax 
lien filing, by reason of disbursements made before the 46th day after 
the date of tax lien filing, or if earlier, before the person making the 
disbursements has actual notice or knowledge of the tax lien filing, but 
only if the security interest is:
    (a) In property which is subject, at the time of tax lien filing, to 
the lien imposed by 26 U.S.C. 6321 and which is covered by the terms of 
a written agreement entered into before tax lien filing, and
    (b) Protected under local law against a judgment lien arising, as of 
the time of tax lien filing, out of an unsecured obligation.

For purposes of paragraph (a) of this section, a contract right (as 
defined in Sec. 70.232(c)(2)(i) of this part) is subject, at the time of 
tax lien filing, to the lien imposed by 26 U.S.C. 6321 if the contract 
has been made by such time. An account receivable (as defined in 
Sec. 70.232(c)(2)(ii) of this part) is subject, at the time of tax lien 
filing, to the lien imposed by 26 U.S.C. 6321 if, and to the extent, a 
right to payment has been earned by performance at such time. For 
purposes of paragraph (b) of this section, a judgment lien is a lien 
held by a judgment lien creditor as defined in Sec. 70.143(g) of this 
part. For purposes of this section, it is immaterial that the written 
agreement provides that the disbursements are to be made at the option 
of the person making the disbursements. See Sec. 70.143 (a) and (e) of 
this part for definitions of the terms ``security interest'' and ``tax 
lien filing,'' respectively. See Sec. 70.144(a) of this part for certain 
circumstances under which a person is deemed to have actual notice or 
knowledge of a fact.

(26 U.S.C. 6323)



Sec. 70.147  Priority of interest and expenses.

    (a) In general. If the lien imposed by 26 U.S.C. 6321 is not valid 
as against another lien or security interest, the priority of the other 
lien or security interest also extends to each of the following items to 
the extent that under local law the item has the same priority as the 
lien or security interest to which it relates:

[[Page 1009]]

    (1) Any interest or carrying charges (including finance, service, 
and similar charges) upon the obligation secured,
    (2) The reasonable charges and expenses of an indenture trustee 
(including, for example, the trustee under a deed of trust) or agent 
holding the security interest for the benefit of the holder of the 
security interest,
    (3) The reasonable expenses, including reasonable compensation for 
attorneys, actually incurred in collecting or enforcing the obligation 
secured,
    (4) The reasonable costs of insuring, preserving, or repairing the 
property to which the lien or security interest relates,
    (5) The reasonable costs of insuring payment of the obligation 
secured (including amounts paid by the holder of the security interest 
for mortgage insurance, such as that issued by the Federal Housing 
Administration), and
    (6) Amounts paid to satisfy any lien on the property to which the 
lien or security interest relates, but only if the lien so satisfied is 
entitled to priority over the lien imposed by 26 U.S.C. 6321.
    (b) Collection expenses. The reasonable expenses described in 
paragraph (a)(3) of this section include expenditures incurred by the 
protected holder of the lien or security interest to establish the 
priority of the holder's interest or to collect, by foreclosure or 
otherwise, the amount due the holder from the property subject to the 
protected holder's lien. Accordingly, the amount of the encumbrance 
which is protected is increased by the amounts so expended by the holder 
of the security interest.
    (c) Costs of insuring, preserving, etc. The reasonable costs of 
insuring, preserving, or repairing described in paragraph (a)(4) of this 
section include expenditures by the holder of a security interest for 
fire and casualty insurance on the property subject to the security 
interest and amounts paid by the holder of the lien or security interest 
to repair the property. Such reasonable costs also include the amounts 
paid by the holder of the lien or security interest in a leasehold to 
the lessor of the leasehold to preserve the leasehold subject to the 
lien or security interest. Accordingly, the amount of the lien or 
security interest which is protected is increased by the amounts so 
expended by the holder of the lien or security interest.
    (d) Satisfaction of liens. The amounts described in paragraph (a)(6) 
of this section include expenditures incurred by the protected holder of 
a lien or security interest to discharge a statutory lien for State 
sales taxes on the property subject to the lien or security interest if 
both the lien or security interest and the sales tax lien have priority 
over a Federal tax lien. Accordingly, the amount of the lien or security 
interest is increased by the amounts so expended by the holder of the 
lien or security interest even though under local law the holder of the 
lien or security interest is not subrogated to the rights of the holder 
of the State sales tax lien. However, if the holder of the lien or 
security interest is subrogated, within the meaning of Sec. 70.144(b) of 
this part, to the rights of the holder of the sales tax lien, the holder 
of the lien or security interest will also be entitled to any additional 
protection afforded by 26 U.S.C. 6323(i)(2)

(26 U.S.C. 6323).



Sec. 70.148  Place for filing notice; form.

    (a) Place for filing. The notice of lien referred to in Sec. 70.145 
of this part shall be filed as follows:
    (1) Under State laws--(i) Real property. In the case of real 
property, notice shall be filed in one office within the State (or the 
county or other governmental subdivision), as designated by the laws of 
the State, in which the property subject to the lien is deemed situated 
under the provisions of paragraph (b)(1) of this section.
    (ii) Personal property. In the case of personal property, whether 
tangible or intangible, the notice shall be filed in one office within 
the State (or the county or other governmental subdivision), as 
designated by the laws of the State, in which the property subject to 
the lien is deemed situated under the provision of paragraph (b)(2) of 
this section, except that State law merely conforming to or reenacting 
Federal law establishing a national filing system does not constitute a 
second office for filing as designated by the laws of such State.
    (2) With the clerk of the United States district court. Whenever a 
State has not

[[Page 1010]]

by law designated one office which meets the requirements of paragraph 
(a)(1) (i) or (ii) of this section, the notice shall be filed in the 
office of the clerk of the U.S. district court for the judicial district 
in which the property subject to the lien is deemed situated under the 
provisions of paragraph (b) of this section. For example, a State has 
not by law designated one office meeting the requirements of paragraph 
(a)(1)(i) of this section, if more than one office is designated within 
the State, county, or other governmental subdivision for filing notices 
with respect to all property located in such State, county or other 
governmental subdivision. A State has not by law designated one office 
meeting the requirements of paragraph (a)(1)(ii) of this section, if 
more than one office is designated in the State, county, or other 
governmental subdivision for filing notices with respect to all of the 
personal property of a particular taxpayer.
    (3) With the Recorder of Deeds of the District of Columbia. If the 
property subject to the lien imposed by 26 U.S.C. 6321 is deemed 
situated, under the provision of paragraph (b) of this section, in the 
District of Columbia, the notice shall be filed in the office of the 
Recorder of Deeds of the District of Columbia.
    (b) Situs of property subject to lien. For purposes of paragraph (a) 
of this section, property is deemed situated as follows:
    (1) Real property. Real property is deemed situated at its physical 
location.
    (2) Personal property. Personal property, whether tangible or 
intangible, is deemed situated at the residence of the taxpayer at the 
time the notice of lien is filed.

For purposes of paragraph (b)(2) of this section, the residence of a 
corporation or partnership is deemed to be the place at which the 
principal executive office of the business is located, and the residence 
of a taxpayer whose residence is not within the United States is deemed 
to be in the District of Columbia.
    (c) Form--(1) In general. The notice referred to in Sec. 70.145 of 
this part shall be filed on ATF Form 5651.2, ``Notice of Federal Tax 
Lien under Internal Revenue Laws''. Such notice is valid notwithstanding 
any other provision of law regarding the form or content of a notice of 
lien. For example, omission from the notice of lien of a description of 
the property subject to the lien does not affect the validity thereof 
even though State law may require that the notices contain a description 
of the property subject to the lien.
    (2) ATF Form 5651.2 defined. The term ``ATF Form 5651.2'' generally 
means a paper form. However, if a State in which a notice referred to in 
Sec. 70.145 of this part is filed permits a notice of Federal tax lien 
to be filed by the use of an electronic or magnetic medium the term 
``ATF Form 5651.2'' includes an ATF Form 5651.2 filed by the use of any 
electronic or magnetic medium permitted by that State. An ATF Form 
5651.2 must identify the taxpayer, the tax liability giving rise to the 
lien, and the date the assessment arose regardless of the method used to 
file the notice of Federal tax lien.

(26 U.S.C. 6323)



Sec. 70.149  Refiling of notice of tax lien.

    (a) In general--(1) Requirement to refile. In order to continue the 
effect of a notice of lien, the notice must be refiled in the place 
described in paragraph (b) of this section during the required refiling 
period (described in paragraph (c) of this section). In the event that 
two or more notices of lien are filed with respect to a particular tax 
assessment, the failure to comply with the provision of paragraphs 
(b)(1) (i) and (c) of this section in respect of one of the notices of 
lien does not affect the effectiveness of the refiling of any other 
notice of lien. Except for the filing of a notice of lien required by 
paragraph (b)(1)(ii) of this section (relating to a change of 
residence), the validity of any refiling of a notice of lien is not 
affected by the refiling or nonrefiling of any other notice of lien.
    (2) Effect of refiling. A timely refiled notice of lien is effective 
as of the date on which the notice of lien to which it relates was 
effective.
    (3) Effect of failure to refile. Except as provided below, if the 
appropriate ATF officer fails to refile a notice of lien in the manner 
described in paragraphs (b)

[[Page 1011]]

and (c) of this section, the notice of lien is not effective, after the 
expiration of the required refiling period, as against any person 
without regard to when the interest of the person in the property 
subject to the lien was acquired. However, the failure of the 
appropriate ATF officer to refile a notice of lien during the required 
refiling period will not, following the expiration of the refiling 
period, affect the effectiveness of the notice with respect to:
    (i) Property which is the subject matter of a suit, to which the 
United States is a party, commenced prior to the expiration of the 
required refiling period, or
    (ii) Property which has been levied upon by the United States prior 
to the expiration of the refiling period. However, if a suit or levy 
referred to in the preceding sentence is dismissed or released, 
respectively, and property is subject to the lien at such time, a notice 
of lien with respect to the property is not effective after the suit or 
levy is dismissed or released unless refiled during the required 
refiling period. Failure to refile a notice of lien does not affect the 
existence of the lien.
    (4) Filing of new notice. If a notice of lien is not refiled, and if 
the lien remains in existence, the Bureau may nevertheless file a new 
lien either on the prescribed form for the filing of a notice of lien or 
on the form prescribed for refiling a notice of lien. This new filing 
must meet the requirements of 26 U.S.C. 6323(f) and Sec. 70.148 of this 
part and is effective from the date on which such filing is made.
    (b) Place for refiling notice of lien--(1) In general. A notice of 
lien refiled during the required refiling period (described in paragraph 
(c) of this section) shall be effective only:
    (i) If the notice of lien is refiled in the office in which the 
prior notice of lien (including a refiled notice) was filed under the 
provisions of 26 U.S.C. 6323; and
    (ii) In any case in which 90 days or more prior to the date the 
refiling of the notice of lien under paragraph (a)(1)(i) of this section 
is completed, the Bureau receives written information (in the manner 
described in paragraph (b)(2) of this section) concerning a change in 
the taxpayer's residence, if a notice of such lien is also filed in 
accordance with 26 U.S.C. 6323(f)(1)(A)(ii) in the State in which such 
new residence is located (or, if such new residence is located in the 
District of Columbia or outside the United States, in the District of 
Columbia).

A notice of lien is considered as refiled in the office in which the 
prior notice or refiled notice was filed under the provisions of 26 
U.S.C. 6323 if it is refiled in the office which, pursuant to a change 
in the applicable local law, assumed the functions of the office in 
which the prior notice or refiled notice was filed. If on or before the 
90th day referred to in paragraph (b)(1)(ii) of this section, more than 
one written notice is received concerning a change in the taxpayer's 
residence, a notice of lien is required by this subdivision to be filed 
only with respect to the residence shown on the written notice received 
on the most recent date. Paragraph (b)(1)(ii) of this section is 
applicable regardless of whether the taxpayer resides at the new 
residence on the date the refiling of notice of lien under paragraph 
(b)(l)(i) of this section is completed.
    (2) Notice of change of taxpayer's residence--(i) In general. For 
purposes of this section, a notice of change of a taxpayer's residence 
will be effective only if it:
    (A) Is received, in writing, from the taxpayer or the taxpayer's 
representative by the appropriate ATF officer who filed the original 
notice of lien.
    (B) Relates to an unpaid tax liability of the taxpayer, and
    (C) States the taxpayer's name and the address of the taxpayer's new 
residence.

Although it is not necessary that a written notice contain the 
taxpayer's identifying number authorized by section 6109, it is 
preferable that it include such number. A return or amended return filed 
by the taxpayer with the Bureau which on its face indicates that there 
is a change in the taxpayer's address and correctly states the 
taxpayer's name, the address of the taxpayer's new residence, and the 
taxpayer's identifying number required by 26 U.S.C. 6109 is sufficient 
notice under this paragraph.

[[Page 1012]]

    (ii) Other rules applicable. Except as provided in paragraph 
(b)(2)(i) of this section, no communication (either written or oral) to 
the Bureau will be considered effective as notice of a change of a 
taxpayer's residence under this section, whether or not the Bureau has 
actual notice or knowledge of the taxpayer's new residence. For the 
purpose of determining the date on which a notice of change of a 
taxpayer's residence is received under this section, the notice shall be 
treated as received on the date it is actually received by the Bureau 
without reference to the provisions of 26 U.S.C. 7502.
    (c) Required refiling period. For the purpose of this section, the 
term ``required refiling period'' means:
    (1) The 1-year period ending 30 days after the expiration of 6 years 
after the date of the assessment of the tax, and
    (2) The 1-year period ending with the expiration of 6 years after 
the close of the preceding required refiling period for such notice of 
lien.

(26 U.S.C. 6323)



Sec. 70.150  Release of lien or discharge of property.

    (a) Release of lien. An appropriate ATF officer is charged with 
releasing liens or discharging property from liens. The appropriate ATF 
officer must issue a certificate of release of a lien imposed with 
respect to any tax imposed by a provision of 26 U.S.C. enforced and 
administered by the Bureau, not later than 30 days after the day on 
which either:
    (1) The appropriate ATF officer finds that the entire liability for 
the tax has been satisfied or has become unenforceable as a matter of 
law (and not merely uncollectible or unenforceable as a matter of fact). 
Tax liabilities frequently are unenforceable in fact for the time being, 
due to the temporary nonpossession by the taxpayer of discoverable 
property or property rights. In all cases the liability for the payment 
of the tax continues until satisfaction of the tax in full or until the 
expiration of the statutory period for collection, including such 
extension of the period for collection as may be agreed upon in writing 
by the taxpayer and the appropriate ATF officer.
    (2) The appropriate ATF officer is furnished and accepts a bond that 
is conditioned upon the payment of the amount assessed (together with 
all interest in respect thereof and any expenses to which the Government 
has been put in the matter), within the time agreed upon in the bond, 
but not later than 6 months before the expiration of the statutory 
period for collection, including any period for collection agreed upon 
in writing by the appropriate ATF officer and the taxpayer. For 
provisions relating to bonds, see 26 U.S.C. 7101 and 7102 and 
Secs. 70.281 and 70.282 of this part.
    (b) Discharge of specific property from the lien--(1) Property 
double the amount of the liability. The appropriate ATF officer may, in 
that officer's discretion, issue a certificate of discharge of any part 
of the property subject to a lien imposed under 26 U.S.C. 64 if the 
Bureau determines that the fair market value of that part of the 
property remaining subject to the lien is at least double the sum of the 
amount of the unsatisfied liability secured by the lien and of the 
amount of all other liens upon the property which have priority over the 
lien. In general, fair market value is that amount which one ready and 
willing but not compelled to buy would pay to another ready and willing 
but not compelled to sell the property.
    (2) Part payment; interest of United States valueless--(i) Part 
payment. The appropriate ATF officer may, in that officer's discretion, 
issue a certificate of discharge of any part of the property subject to 
a lien imposed under 26 U.S.C. 64 if there is paid over to the Bureau in 
partial satisfaction of the liability secured by the lien an amount 
determined by the Bureau to be not less than the value of the interest 
of the United States in the property to be so discharged. In determining 
the amount to be paid, the appropriate ATF officer will take into 
consideration all the facts and circumstances of the case, including the 
expenses to which the Government has been put in the matter. In no case 
shall the amount to be paid be less than the value of the interest of 
the United States in the property with respect to which the certificate 
of discharge is to be issued.

[[Page 1013]]

    (ii) Interest of the United States valueless. The appropriate ATF 
officer may, in that official's discretion, issue a certificate of 
discharge of any part of the property subject to the lien if the Bureau 
determines that the interest of the United States in the property to be 
so discharged has no value.
    (iii) Valuation of interest of United States. For purposes of this 
paragraph (b)(2), in determining the value of the interest of the United 
States in the property, or any part thereof, with respect to which the 
certificate of discharge is to be issued, the appropriate ATF officer 
shall give consideration to the value of the property and the amount of 
all liens and encumbrances thereon having priority over the Federal tax 
lien. In determining the value of the property, the appropriate ATF 
officer may, in that official's discretion, give consideration to the 
forced sale value of the property in appropriate cases.
    (3) Discharge of property by substitution of proceeds of sale. The 
appropriate ATF officer may, in that officer's discretion, issue a 
certificate of discharge of any part of the property subject to a lien 
imposed under 26 U.S.C. 64 if such part of the property is sold and, 
pursuant to a written agreement with the appropriate ATF officer, the 
proceeds of the sale are held, as a fund subject to the liens and claims 
of the United States, in the same manner and with the same priority as 
the lien or claim had with respect to the discharged property. This 
subparagraph does not apply unless the sale divests the taxpayer of all 
right, title, and interest in the property sought to be discharged. Any 
reasonable and necessary expenses incurred in connection with the sale 
of the property and the administration of the sale proceeds shall be 
paid by the applicant or from the proceeds of the sale before 
satisfaction of any lien or claim of the United States.
    (4) Application for certificate of discharge. Any person desiring a 
certificate of discharge under this paragraph shall submit an 
application in writing to the appropriate ATF officer. The application 
shall contain such information as the appropriate ATF officer may 
require.
    (c) Subordination of lien--(1) By payment of the amount 
subordinated. The appropriate ATF officer may, in that officer's 
discretion, issue a certificate of subordination of a lien imposed under 
26 U.S.C. 64 upon any part of the property subject to the lien if there 
is paid over to the appropriate ATF officer an amount equal to the 
amount of the lien or interest to which the certificate subordinates the 
lien of the United States. For this purpose, the tax lien may be 
subordinated to another lien or interest on a dollar-for-dollar basis. 
For example, if a notice of a Federal tax lien is filed and a delinquent 
taxpayer secures a mortgage loan on a part of the property subject to 
the tax lien and pays over the proceeds of the loan to the appropriate 
ATF officer after an application for a certificate of subordination is 
approved, the appropriate ATF officer will issue a certificate of 
subordination. This certificate will have the effect of subordinating 
the tax lien to the mortgage.
    (2) To facilitate tax collection. The appropriate ATF officer may, 
in that officer's discretion, issue a certificate of subordination of a 
lien imposed under 26 U.S.C. 64 upon any part of the property subject to 
the lien if the appropriate ATF officer believes that the subordination 
of the lien will ultimately result in an increase in the amount realized 
by the United States from the property subject to lien and will 
facilitate the ultimate collection of the tax liability.
    (3) Application for certificate of subordination. Any person 
desiring a certificate of subordination under this paragraph shall 
submit an application therefor in writing to the appropriate ATF 
officer. The application shall contain such information as the 
appropriate ATF officer may require.
    (d) Nonattachment of lien. If the appropriate ATF officer determines 
that, because of confusion of names or otherwise, any person (other than 
the person against whom the tax was assessed) is or may be injured by 
the appearance that a notice of lien filed in accordance with 
Sec. 70.148 of this part refers to such person, the appropriate ATF 
officer may issue a certificate of nonattachment. Such certificate shall 
state that

[[Page 1014]]

the lien, notice of which has been filed, does not attach to the 
property of such person. Any person desiring a certificate of 
nonattachment under this paragraph shall submit an application therefor 
in writing to the appropriate ATF officer. The application shall contain 
such information as the appropriate ATF officer may require.
    (e) Effect of certificate--(1) Conclusiveness. Except as provided in 
paragraphs (e) (2) and (3) of this section, if a certificate is issued 
under 26 U.S.C. 6325 by the appropriate ATF officer and the certificate 
is filed in the same office as the notice of lien to which it relates 
(if the notice of lien has been filed), the certificate shall have the 
following effect:
    (i) In the case of a certificate of release issued under paragraph 
(a) of this section, the certificate shall be conclusive that the tax 
lien referred to in the certificate is extinguished;
    (ii) In the case of a certificate of discharge issued under 
paragraph (b) of this section, the certificate shall be conclusive that 
the property covered by the certificate is discharged from the tax lien;
    (iii) In the case of a certificate of subordination issued under 
paragraph (c) of this section, the certificate shall be conclusive that 
the lien or interest to which the Federal tax lien is subordinated is 
superior to the tax lien; and
    (iv) In the case of a certificate of nonattachment issued under 
paragraph (d) of this section, the certificate shall be conclusive that 
the lien of the United States does not attach to the property of the 
person referred to in the certificate.
    (2) Revocation of certificate of release or nonattachment--(i) In 
general. If the appropriate ATF officer determines that either:
    (A) A certificate of release or a certificate of nonattachment of 
the general tax lien imposed by 26 U.S.C. 6321 was issued erroneously or 
improvidently, or
    (B) A certificate of release of such lien was issued in connection 
with a compromise agreement under 26 U.S.C. 7122 which has been 
breached,and if the period of limitation on collection after assessment 
of the tax liability has not expired, the appropriate ATF officer may 
revoke the certificate and reinstate the tax lien.
    (ii) Method of revocation and reinstatement. The revocation and 
reinstatement described in paragraph (e)(2)(i) of this section is 
accomplished by:
    (A) Mailing notice of the revocation to the taxpayer at the 
taxpayer's last known address, and
    (B) Filing notice of the revocation of the certificate in the same 
office in which the notice of lien to which it relates was filed (if the 
notice of lien has been filed).
    (iii) Effect of reinstatement--(A) Effective date. A tax lien 
reinstated in accordance with the provisions of this paragraph (e)(2) is 
effective on and after the date the notice of revocation is mailed to 
the taxpayer in accordance with the provisions of paragraph 
(e)(2)(ii)(A) of this section, but the reinstated lien is not effective 
before the filing of notice of revocation, in accordance with the 
provisions of paragraph (e)(2)(ii)(B) of this section, if the filing is 
required by reason of the fact that a notice of the lien had been filed.
    (B) Treatment of reinstated lien. As of the effective date of 
reinstatement, a reinstated lien has the same force and effect as a 
general tax lien imposed by 26 U.S.C. 6321 which arises upon assessment 
of a tax liability. The reinstated lien continues in existence until the 
liability is satisfied or until the expiration of the period of 
limitation on collection after assessment of the tax liability to which 
it relates. The reinstatement of the lien does not retroactively 
reinstate a previously filed notice of lien. The reinstated lien is not 
valid against any holder of a lien or interest described in Sec. 70.145 
of this part until notice of the reinstated lien has been filed in 
accordance with the provisions of Sec. 70.148 of this part subsequent to 
or concurrent with the time the reinstated lien became effective.
    (3) Certificates void under certain conditions. Notwithstanding any 
other provisions of 26 U.S.C. subtitle F, any lien for Federal taxes 
attaches to any property with respect to which a certificate of 
discharge has been issued if the person liable for the tax reacquires 
the property after the certificate has been issued. Thus, if property 
subject to a

[[Page 1015]]

Federal tax lien is discharged therefrom and is later reacquired by the 
delinquent taxpayer at a time when the lien is still in existence, the 
tax lien attaches to the reacquired property and is enforceable against 
it as in the case of after-acquired property generally.
    (f) Filing of certificates and notices. If a certificate or notice 
described in this section may not be filed in the office designated by 
State law in which the notice of lien imposed by 26 U.S.C. 6321 (to 
which the certificate or notice relates) is filed, the certificate or 
notice is effective if filed in the office of the clerk of the United 
States district court for the judicial district in which the State 
office where the notice of lien is filed is situated.

(26 U.S.C. 6325)

[T.D. ATF-301, 55 FR 47616, Nov. 14, 1990, as amended by T.D. ATF-450, 
66 FR 29025, May 29, 2001]



Sec. 70.151  Administrative appeal of the erroneous filing of notice of Federal tax lien.

    (a) In general. Any person may appeal to the officer who filed the 
Federal tax lien on the property or rights to property of such person 
for a release of lien alleging an error in the filing of notice of lien. 
Such appeal may be used only for the purpose of correcting the erroneous 
filing of a notice of lien, not to challenge the underlying tax 
liability that led to the imposition of a lien.
    (b) Certificate of Release. If the officer who filed the lien 
determines that the filing of the notice of any lien was erroneous that 
officer shall expeditiously, and to the extent practicable, within 14 
days after such determination, issue a certificate of release of lien. 
The certificate of release of such lien shall include a statement that 
the filing of notice of lien was erroneous.
    (c) Appeal alleging an error in the filing of notice of lien. For 
purposes of paragraph (a) of this section, an appeal of the filing of 
notice of Federal tax lien must be based on any one of the following 
allegations:
    (1) The tax liability that gave rise to the lien, plus any interest 
and additions to tax associated with said liability, was satisfied prior 
to the filing of notice of lien;
    (2) The tax liability that gave rise to the lien was assessed in 
violation of title 11 of the United States Code (the Bankruptcy Code); 
or
    (3) The statutory period for collection of the tax liability that 
gave rise to the lien expired prior to the filing of notice of Federal 
tax lien.
    (d) Notice of Federal tax lien that lists multiple liabilities. When 
a notice of Federal tax lien lists multiple liabilities, a person may 
appeal the filing of notice of lien with respect to one or more of the 
liabilities listed in the notice, if the notice was erroneously filed 
with respect to such liabilities. If a notice of Federal tax lien was 
erroneously filed with respect to one or more liabilities listed in the 
notice, the officer who filed the Federal tax lien shall issue a 
certificate of release with respect to such liabilities.
    (e) Procedures for appeal--(1) Manner. An appeal of the filing of 
notice of Federal tax lien shall be made in writing to the officer who 
filed the lien.
    (2) Form. The appeal shall include the following information and 
documents:
    (i) Name, current address, and taxpayer identification number of the 
person appealing the filing of notice of Federal tax lien;
    (ii) A copy of the notice of Federal tax lien affecting the 
property, if available; and
    (iii) The grounds upon which the filing of notice of Federal tax 
lien is being appealed.
    (A) If the ground upon which the filing of notice is being appealed 
is that the tax liability in question was satisfied prior to the filing, 
proof of full payment as defined in paragraph (f) of this section must 
be provided.
    (B) If the ground upon which the filing of notice is being appealed 
is that the tax liability that gave rise to the lien was assessed in 
violation of title 11 of the United States Code (the Bankruptcy Code), 
the appealing party must provide the identity of the court, the district 
in which the bankruptcy petition was filed, a docket number and the date 
of filing of the bankruptcy petition.
    (3) Time. An administrative appeal of the erroneous filing of notice 
of Federal tax lien shall be made within 1

[[Page 1016]]

year after the taxpayer becomes aware of the erroneously filed tax lien.
    (f) Proof of full payment. As used in paragraph (e)(2)(iii)(A) of 
this section, the term ``proof of full payment'' means:
    (1) A Bureau of Alcohol, Tobacco and Firearms receipt reflecting 
full payment of the tax liability in question prior to the date the 
Federal tax lien was filed;
    (2) A cancelled check payable to the Bureau of Alcohol, Tobacco and 
Firearms in an amount which was sufficient to satisfy the tax liability 
for which release is being sought; or
    (3) Any other manner of proof acceptable to the officer who filed 
the lien.
    (g) Exception. Whenever necessary to protect the interests of the 
government, an appropriate ATF officer other than the officer who filed 
the lien, may receive and act on an administrative appeal of a lien in 
accordance with this section.
    (h) Exclusive remedy. The appeal established by section 6326 of the 
Internal Revenue Code and by this section shall be the exclusive 
administrative remedy with respect to the erroneous filing of a notice 
of Federal tax lien.

[T.D. ATF-316, 56 FR 55079, Oct. 24, 1991]

               Seizure of Property for Collection of Taxes



Sec. 70.161  Levy and distraint.

    (a) Authority to levy--(1) In general. If any person liable to pay 
any tax neglects or refuses to pay the tax within 10 days after notice 
and demand, the appropriate ATF officer who initiated the assessment may 
proceed to collect the tax by levy, provided the taxpayer has been 
furnished the notice described in Sec. 70.162(a) of this part. The 
appropriate ATF officer may levy upon any property, or rights to 
property, whether real or personal, tangible or intangible, belonging to 
the taxpayer. The appropriate ATF officer may also levy upon property 
with respect to which there is a lien provided by 26 U.S.C. 6321 for the 
payment of the tax. For exemption of certain property from levy, see 26 
U.S.C. 6334 and Secs. 70.241 through 70.245 of this part. For exemption 
of certain property from levy, see 26 U.S.C. 6334 and Secs. 70.241 
through 70.245 of this part. As used in 26 U.S.C. 6331 and this section, 
the term ``tax'' includes any interest, additional amount, addition to 
tax, or assessable penalty, together with costs and expenses. Property 
subject to a Federal tax lien which has been sold or otherwise 
transferred by the taxpayer may be seized while in the hands of the 
transferee or any subsequent transferee. However, see 26 U.S.C. 
6323(i)(2) and Sec. 70.144 of this part concerning the subrogation 
rights of certain transferees. Levy may be made by serving a Notice of 
Levy on any person in possession of, or obligated with respect to, 
property or rights to property subject to levy, including receivables, 
bank accounts, evidences of debt, securities, and salaries, wages, 
commissions, or other compensation. Except as provided in Sec. 70.162(c) 
of this part with regard to a levy on salary or wages, a levy extends 
only to property possessed and obligations which exist at the time of 
the levy. Obligations exist when the liability of the obligor is fixed 
and determinable although the right to receive payment thereof may be 
deferred until a later date. For example, if on the first day of the 
month a delinquent taxpayer sold personal property subject to an 
agreement that the buyer remit the purchase price on the last day of the 
month, a levy made on the buyer on the 10th day of the month would reach 
the amount due on the sale, although the buyer need not satisfy the levy 
by paying over the amount to the appropriate ATF officer until the last 
day of the month. Similarly, a levy only reaches property in the 
possession of the person levied upon at the time the levy is made. For 
example, a levy made on a bank with respect to the account of a 
delinquent taxpayer is satisfied if the bank surrenders the amount of 
the taxpayer's balance at the time the levy is made, including interest 
thereon to the date of surrender. The levy has no effect upon any 
subsequent deposit made in the bank by the taxpayer. Subsequent deposits 
may be reached only by a subsequent levy on the bank.
    (2) Jeopardy cases. If the appropriate ATF officer finds that the 
collection of any tax is in jeopardy, that officer may make notice and 
demand for immediate payment of such tax and, upon

[[Page 1017]]

failure or refusal to pay such tax, collection thereof by levy shall be 
lawful without regard to the 10-day period provided in 26 U.S.C. 6331(a) 
or the 30-day period provided in 26 U.S.C. 6331(d).
    (3) Bankruptcy or receivership cases. During a bankruptcy proceeding 
or a receivership proceeding in either a Federal or a State court, the 
assets of the taxpayer are in general under the control of the court in 
which such proceeding is pending. Taxes cannot be collected by levy upon 
assets in the custody of a court, whether or not such custody is 
incident to a bankruptcy or receivership proceeding, except where the 
proceeding has progressed to such a point that the levy would not 
interfere with the work of the court or where the court grants 
permission to levy. Any assets which under applicable provisions of law 
are not under the control of the court may be levied upon, for example, 
property exempt from court custody under State law or the bankrupt's 
earnings and property acquired after the date of bankruptcy. However, 
levy upon such property is not mandatory and the Government may rely 
upon payment of taxes in the proceeding.
    (4) Certain types of compensation--(i) Federal employees. Levy may 
be made upon the salary or wages of any officer or employee (including 
members of the Armed Forces), or elected or appointed official, of the 
United States, the District of Columbia, or any agency or 
instrumentality of either, by serving a notice of levy on the employer 
of the delinquent taxpayer. As used in this paragraph, the term 
``employer'' means:
    (A) The officer or employee of the United States, the District of 
Columbia, or of the agency or instrumentality of the United States or 
the District of Columbia, who has control of the payment of the wages, 
or
    (B) Any other officer or employee designated by the head of the 
branch, department, or agency, or instrumentality of the United States 
or of the District of Columbia as the party upon whom service of the 
notice of levy may be made.

If the head of such branch, department, agency or instrumentality 
designates an officer or employee other than one who has control of the 
payment of the wages, as the party upon whom service of the notice of 
levy may be made, such head shall promptly notify the appropriate ATF 
officer of the name and address of each officer or employee so 
designated and the scope or extent of the authority of such designee.
    (ii) State and municipal employees. Salaries, wages, or other 
compensation of any officer, employee, or elected or appointed official 
of a State or Territory, or of any agency, instrumentality, or political 
subdivision thereof, are also subject to levy to enforce collection of 
any Federal tax.
    (iii) Seamen. Notwithstanding the provisions of section 12 of the 
Seamen's Act of 1915 (46 U.S.C. 601), wages of seamen, apprentice 
seamen, or fishermen employed on fishing vessels are subject to levy. 
See 26 U.S.C. 6334(c).
    (5) Noncompetent Indians. Solely for purposes of 26 U.S.C. 6321 and 
6331, any interest in restricted land held in trust by the United States 
for an individual noncompetent Indian (and not for a tribe) shall not be 
deemed to be property, or a right to property, belonging to such Indian.
    (b) Successive seizures. Whenever any property or rights to property 
upon which a levy has been made are not sufficient to satisfy the claim 
of the United States for which the levy is made, the appropriate ATF 
officer may thereafter, and as often as may be necessary, proceed to 
levy in like manner upon any other property or rights to property 
subject to levy of the person against whom such claim exists or on which 
there is a lien imposed by 26 U.S.C. 6321 (or the corresponding 
provision of prior law) for the payment of such claim until the amount 
due from such person, together with all costs and expenses, is fully 
paid.
    (c) Service of notice of levy by mail. A notice of levy may be 
served by mailing the notice to the person upon whom the service of a 
notice of levy is authorized under paragraph (a)(1) of this section. In 
such a case the date and time the notice is delivered to the person to 
be served is the date and time the levy is made. If the notice is sent 
by certified or registered mail, return receipt requested, the date of 
delivery on the receipt is treated as the

[[Page 1018]]

date the levy is made. If, after receipt of a notice of levy, an officer 
or other person authorized to act on behalf of the person served signs 
and notes the date and time of receipt on the notice of levy, the date 
and time so noted will be presumed to be, in the absence of proof to the 
contrary, the date and time of delivery. Any person may upon written 
notice to the appropriate ATF officer, have all notices of levy by mail 
sent to one designated ofice. After such a notice is received by the 
appropriate ATF officer, notices of levy by mail will sent to the 
designated office until a written notice withdrawing the request or a 
written notice designating a difference office is received by the 
appropriate ATF officer.

(26 U.S.C. 6331 and 6332)

[T.D. ATF-6, 38 FR 32445, Nov. 26, 1973,as amended by T.D. ATF-450, 66 
FR 29026, May 29, 2001]



Sec. 70.162  Levy and distraint on salary and wages.

    (a) Notice of intent to levy. Levy may be made for any unpaid tax 
only after the appropriate ATF officer has notified the taxpayer in 
writing of the intent to levy. The notice must be given in person, left 
at the dwelling or usual place of business of the taxpayer, or be sent 
by certified or registered mail to the taxpayer's last known address, no 
less than 30 days before the day of levy. The notice of intent to levy 
is in addition to, and may be given at the same time as, the notice and 
demand described in Sec. 70.161 of this part.
    (b) Jeopardy. Paragraph (a) of this section does not apply to a levy 
if the appropriate ATF officer has made a finding under 
Sec. 70.161(a)(2) of this part that the collection of tax is in 
jeopardy.
    (c) Continuing effect of levy on salary or wages. A levy on salary 
or wages is continuous from the time of the levy until the liability out 
of which the levy arose is released under 26 U.S.C. 6343 and Sec. 70.167 
of this part. For this purpose, the term ``salary or wages''includes 
compensation for services paid in the form of fees, commissions, 
bonuses, and similar items. The levy attaches to both salary or wages 
earned but not yet paid at the time of the levy, and salary or wages 
earned and becoming payable (or paid in the form of an advance) 
subsequent to the date of the levy, until the levy is released pursuant 
to paragraph (d) of this section. In general, salaries or wages that are 
the subject of a continuing levy, if not exempt from levy under 26 
U.S.C. 6334(a) (8) or (9), become payable to the officer who made the 
levy as the payor would otherwise be obligated to pay over the money to 
the taxpayer. For example, if the wage earner is paid on the Wednesday 
following the close of each workweek, a levy made upon the taxpayer's 
employer on any Monday would reach both the wages due for the prior 
workweek and the wages for succeeding workweeks as such wages become 
payable. In such a case the levy would be satisfied if the employer, on 
the first Wednesday after the levy and on each Wednesday thereafter, 
pays over to the officer who made the levy wages which would otherwise 
be paid to the employee on such Wednesday, until the employer receives a 
notice of release from levy described in paragraph (d) of this section. 
See, however, Sec. 70.245(d) of this part for rules which permit a 
delayed payment to the officer who made the levy in certain cases where 
amounts payable to the taxpayer are exempt from levy under 26 U.S.C. 
6334 (a)(9) and (d).
    (d) Release and notice of release from levy. The officer who made 
the levy will promptly release a continuing levy on salary or wages when 
the conditions of 26 U.S.C. 6343 are met. The officer who made the levy 
will also promptly notify the person upon whom the levy was made that it 
has been released.

(26 U.S.C. 6331)



Sec. 70.163  Surrender of property subject to levy.

    (a) Requirement--(1) In general. Except as otherwise provided in 26 
U.S.C. 6332, relating to levy in the case of banks or life insurance and 
endowment contracts, any person in possession of (or obligated with 
respect to) property or rights to property subject to levy and upon 
which a levy has been made shall, upon demand of the officer who made 
the levy, surrender the property or rights (or discharge the obligation) 
to the officer who made the levy, except that part of the property or 
rights (or

[[Page 1019]]

obligation) which, at the time of the demand, is actually or 
constructively under the jurisdiction of a court because of an 
attachment or execution under any judicial process.
    (2) Property held by banks. (i) Any bank shall surrender any 
deposits (including interest thereon) in such bank only after 21 days 
after service of levy.
    (ii) Notwithstanding paragraph (a)(1) of this section, if a levy has 
been made upon property or rights to property subject to levy which a 
bank engaged in the banking business in the United States or a 
possession of the United States is in possession of (or obligated with 
respect to), an appropriate ATF officer shall not enforce the levy with 
respect to any deposits held in an office of the bank outside the United 
States or a possession of the United States, unless the notice of levy 
specifies that such officer intends to reach such deposits. The notice 
of levy must not specify that such officer intends to reach such 
deposits unless that officer making such levy believes:
    (A) That the taxpayer is within the jurisdiction of a U.S. court at 
the time the levy is made and that the bank is in possession of (or 
obligated with respect to) deposits of the taxpayer in an office of the 
bank outside the United States or a possession of the United States; or
    (B) That the taxpayer is not within the jurisdiction of a U.S. court 
a the time the levy is made, that the bank is in possession of (or 
obligated with respect to) deposits of the taxpayer in an office outside 
the United States or a possession of the United States, and that such 
deposits consist, in whole or in part, of funds transferred from the 
United States or a possession of the United States in order to hinder or 
delay the collection of a tax imposed by provisions of 26 U.S.C. 
enforced and administered by the Bureau.
    (b) Enforcement of levy--(1) Extent of personal liability. Any 
person who, upon demand of the appropriate ATF officer, fails or refuses 
to surrender any property or right to property subject to levy is liable 
in his/her own person and estate in a sum equal to the value of the 
property or rights not so surrendered, together with costs and 
interests. The liability, however, may not exceed the amount of the 
taxes for the collection of which the levy was made. Interest is to be 
computed at the annual rate referred to in regulations under 26 U.S.C. 
6221 from the date of the levy, or, in the case of a continuing levy on 
salary or wages (see 26 U.S.C. 6331(e)), from the date the person would 
otherwise have been obligated to pay over the wages or salary to the 
taxpayer. Any amount recovered, other than cost, will be credited 
against the tax liability for the collection of which the levy was made.
    (2) Penalty for violation. In addition to the personal liability 
described in paragraph (b)(1) of this section, any person who is 
required to surrender property or rights to property and who fails or 
refuses to surrender them without reasonable cause is liable for a 
penalty equal to 50 percent of the amount recoverable under 26 U.S.C. 
6332(d)(2). No part of the penalty described in this subparagraph shall 
be credited against the tax liability for the collection of which the 
levy was made. The penalty described in this subparagraph is not 
applicable in cases where a bona fide dispute exists concerning the 
amount of the property to be surrendered pursuant to a levy or 
concerning the legal effectiveness of the levy. However, if a court in a 
later enforcement suit sustains the levy, then reasonable cause would 
usually not exist to refuse to honor a later levy made under similar 
circumstances.
    (c) Effect of honoring levy. Any person in possession of, or 
obligated with respect to, property or rights to property subject to 
levy and upon which a levy has been made who, upon demand by the 
appropriate ATF officer, surrenders the property or rights to property, 
or discharges the obligation, to that officer, or who pays a liability 
described in paragraph (b)(1) of this section, is discharged from any 
obligation or liability to the delinquent taxpayer with respect to the 
property or rights to property arising from the surrender or payment. If 
an insuring organization satisfies a levy with respect to a life 
insurance or endowment contract in accordance with Sec. 70.164 of this 
part, the insuring organization is discharged from any obligation or 
liability to any beneficiaries of the contract arising from

[[Page 1020]]

the surrender or payment. Also, it is discharged from any obligation or 
liability to the insured or other owner. Any person who mistakenly 
surrenders to the United States property or rights to property not 
properly subject to levy is not relieved from liability to a third party 
who owns the property. The owners of mistakenly surrendered property 
may, however, secure from the United States the administrative relief 
provided for in 26 U.S.C. 6343(b) or may bring suit to recover the 
property under 26 U.S.C. 7426.
    (d) Person defined. In addition to the definition given in 
Sec. 70.11 of this part, the term ``person,'' as used in 26 U.S.C.A 
6332(a) and this section, includes an officer or employee of a 
corporation or a member or employee of a partnership, who is under a 
duty to surrender the property or rights to property or to discharge the 
obligation. In the case of a levy upon the salary or wages of an 
officer, employee, or elected or appointed official of the United 
States, the District of Columbia, or any agency or instrumentality of 
either, the term ``person'' includes the officer or employee of the 
United States, of the District of Columbia, or of such agency or 
instrumentality who is under a duty to discharge the obligation. As to 
the officer or employee who is under such duty, see Sec. 70.161(a)(4)(i) 
of this part.

(26 U.S.C. 6332)

[T.D. ATF-6, 38 FR 32445, Nov. 26, 1973, as amended by T.D. ATF-450, 66 
FR 29026, May 29, 2001]



Sec. 70.164  Surrender of property subject to levy in the case of life insurance and endowment contracts.

    (a) In general. This section provides special rules relating to the 
surrender of property subject to levy in the case of life insurance and 
endowment contracts. The provisions of Sec. 70.163 of this part which 
relate generally to the surrender of property subject to levy apply, to 
the extent not inconsistent with the special rules set forth in this 
section, to a levy in the case of life insurance and endowment 
contracts.
    (b) Effect of service of notice of levy--(1) In general. A notice of 
levy served by a appropriate ATF officer on an insuring organization 
with respect to a life insurance or endowment contract issued by the 
organization shall constitute:
    (i) A demand by the officer who made the levy for the payment of the 
cash loan value of the contract adjusted in accordance with paragraph 
(c) of this section, and
    (ii) The exercise of the right of the person against whom the tax is 
assessed to the advance of such cash loan value.

It is unnecessary for the official who made the levy to surrender the 
contract document to the insuring organization upon which the levy is 
made. However, the notice of levy will include a certification by the 
official who made the levy that a copy of the notice of levy has been 
mailed to the person against whom the tax is assessed at that person's 
last known address. At the time of service of the notice of levy, the 
levy is effective with respect to the cash loan value of the insurance 
contract, subject to the condition that if the levy is not satisfied or 
released before the 90th day after the date of service, the levy can be 
satisfied only by payment of the amount described in paragraph (c) of 
this section. Other than satisfaction or release of the levy, no event 
during the 90-day period subsequent to the date of service of the notice 
of levy shall release the cash loan value from the effect of the levy. 
For example, the termination of the policy by the taxpayer or by the 
death of the insured during such 90-day period shall not release the 
levy. For the rules relating to the time when the insuring organization 
is to pay over the required amount, see paragraph (c) of this section.
    (2) Notification of amount subject to levy--(i) Full payment before 
the 90th day. In the event that the unpaid liability to which the levy 
relates is satisfied at any time during the 90-day period subsequent to 
the date of service of the notice of levy, the officer who filed the 
notice of levy will promptly give the insuring organization written 
notification that the levy is released.
    (ii) Notification after the 90th day. In the event that notification 
is not given under paragraph (b)(2)(i) of this section, the officer who 
filed the notice of levy will, promptly following the 90th

[[Page 1021]]

day after service of the notice of levy, give the insuring organization 
written notification of the current status of all accounts listed on the 
notice of levy, and of the total payments received since service of the 
notice of levy. This notification will be given to the insuring 
organization whether or not there has been any change in the status of 
the accounts.
    (c) Satisfaction of levy. The levy described in paragraph (b) of 
this section with respect to a life insurance or endowment contract 
shall be deemed to be satisfied if the insuring organization pays over 
to the officer who made the levy the amount which the person against 
whom the tax is assessed could have had advanced by the organization on 
the 90th day after service of the notice of levy on the organization. 
However, this amount is increased by the amount of any advance 
(including contractual interest thereon), generally called a policy 
loan, made to the person on or after the date the orginzation has actual 
notice or knowledge, within the meaning of 26 U.S.C. 6323(i)(1), of the 
existence of the tax lien with respect to which the levy is made. The 
insuring organization may, nevertheless, make an advance (including 
contractual interest thereon), generally called an automatic premium 
loan, made automatically to maintain the contract in force under an 
agreement entered into before the organization has such actual notice or 
knowledge. In any event, the amount paid to the appropriate ATF officer 
by the insuring organization is not to exceed the amount of the unpaid 
liability shown on the notification described in paragraph (b)(2) of 
this section. The amount determined in accordance with the provisions of 
this section, subject to the levy, shall be paid to the appropriate ATF 
officer by the insuring organization promptly after receipt of the 
notification described in paragraph (b)(2) of this section. The 
satisfaction of a levy with respect to a life insurance or endowment 
contract will not discharge the contract from the tax lien. However, see 
26 U.S.C. 6323(b)(9)(C) and Sec. 70.231(i) of this part concerning the 
liability of an insurance company after satisfaction of a levy with 
respect to a life insurance or endowment contract. If the person against 
whom the tax is assessed so directs, the insuring organization, on a 
date before the 90th day after service of the notice of levy, may 
satisfy the levy by paying over an amount computed in accordance with 
the provisions of this subparagraph substituting such date for the 90th 
day. In the event of termination of the policy by the taxpayer or by the 
death of the insured on a date before the 90th day after service of the 
notice of levy, the amount to be paid over to the appropriate ATF 
officer by the insuring organization in satisfaction of the levy shall 
be an amount computed in accordance with the provisions of this 
subparagraph substituting the date of termination of the policy or the 
date of death for the 90th day.
    (d) Other enforcement proceedings. The satisfaction of the levy 
described in paragraph (b) of this section by an insuring organization 
shall be without prejudice to any civil action for the enforcement of 
any Federal tax lien with respect to a life insurance or endowment 
contract. Thus, this levy procedure is not the exclusive means of 
subjecting the life insurance and endowment contracts of the person 
against whom a tax is assessed to the collection of the person's unpaid 
assessment. The United States may choose to foreclose the tax lien in 
any case where it is appropriate, as, for example, to reach the cash 
surrender value (as distinguished from cash loan value) of a life 
insurance or endowment contract.
    (e) Cross references. (1) For provisions relating to priority of 
certain advances with respect to a life insurance or endowment contract 
after satisfaction of a levy pursuant to 26 U.S.C. 6332(b), see 26 
U.S.C. 6323(b)(9) and Sec. 70.231(i) of this part.
    (2) For provisions relating to the issuance of a certificate of 
discharge of a life insurance or endowment contract subject to a tax 
lien, see 26 U.S.C. 6325(b) and Sec. 70.150(b) of this part.

(26 U.S.C. 6332)



Sec. 70.165  Production of books.

    If a levy has been made or is about to be made on any property or 
rights to property, any person, having custody

[[Page 1022]]

or control of any books or records containing evidence or statements 
relating to the property or rights to property subject to levy, shall, 
upon demand of the appropriate ATF officer who has made or is about to 
make the levy, exhibit such books or records to such officer.

(26 U.S.C. 6333)



Sec. 70.167  Authority to release levy and return property.

    (a) Release of levy--(1) Authority. An appropriate ATF officer may 
release the levy upon all or part of the property or rights to property 
levied upon as provided in paragraphs (a)(2), (3) and (4) of this 
section. A levy may be released under paragraph (a)(3) of this section 
only if the delinquent taxpayer complies with such of the conditions 
thereunder as an appropriate ATF officer may require and if the 
appropriate ATF officer determines that such action will facilitate the 
collection of the liability.
    (2) Conditions for mandatory release. (i) An appropriate ATF officer 
shall release the levy as authorized under paragraph (a)(1) of this 
section, if any of the following conditions exist:
    (A) The liability for which such levy was made is satisfied or 
becomes unenforceable by reason of lapse of time,
    (B) Release of such levy will facilitate the collection of such 
liability,
    (C) The taxpayer has entered into an agreement under 26 U.S.C. 6159 
to satisfy such liability by means of installment payments, unless such 
agreement provides otherwise (an appropriate ATF officer is not required 
to release the levy in this case if release of such levy would 
jeopardize the secured creditor status of the United States).
    (D) An appropriate ATF officer has determined that such levy is 
creating an economic hardship due to the financial condition of the 
taxpayer, or
    (E) The fair market value of the property exceeds such liability and 
release of the levy on a part of such property could be made without 
hindering the collection of such liability.
    (ii) In the case of any tangible personal property essential in 
carrying on the trade or business of the taxpayer, the appropriate ATF 
officer shall provide for an expedited determination under paragraph 
(a)(2)(i) if levy on such tangible personal property would prevent the 
taxpayer from carrying on such trade or business.
    (3) Conditions for discretionary release. An appropriate ATF officer 
may release the levy as authorized under paragraph (a)(1) of this 
section, if:
    (i) Escrow arrangement. The delinquent taxpayer offers a 
satisfactory arrangement, which is accepted by an appropriate ATF 
officer, for placing property in escrow to secure the payment of the 
liability (including the expenses of levy) which is the basis of the 
levy.
    (ii) Bond. The delinquent taxpayer delivers an acceptable bond to an 
appropriate ATF officer conditioned upon the payment of the liability 
(including the expenses of levy) which is the basis of the levy. Such 
bond shall be in the form provided in 26 U.S.C. 7101 and Sec. 70.281 of 
this part.
    (iii) Payment of amount of U.S. interest in the property. There is 
paid to an appropriate ATF officer an amount determined by ATF to be 
equal to the interest of the United States in the seized property or the 
part of the seized property to be released.
    (iv) Assignment of salaries and wages. The delinquent taxpayer 
executes an agreement directing the taxpayer's employer to pay to an 
appropriate ATF officer amounts deducted from the employee's wages on a 
regular, continuing, or periodic basis, in such manner and in such 
amount as is agreed upon with an appropriate ATF officer, until the full 
amount of the liability is satisfied, and such agreement is accepted by 
the employer.
    (v) Extension of statute of limitations. The delinquent taxpayer 
executes an agreement to extend the statute of limitations in accordance 
with 26 U.S.C. 6502(a)(2) and Sec. 70.224 of this part.
    (4) Release where value of interest of United States is insufficient 
to meet expenses of sale. An appropriate ATF officer may release the 
levy as authorized under paragraph (a)(1) of this section if that 
officer determines that the value of the interest of the United States 
in the seized property, or in the part of the seized property to be 
released is insufficient to cover the expenses of the sale of such 
property.

[[Page 1023]]

    (b) Return of property--(1) General rule. If an appropriate ATF 
officer determines that property has been wrongfully levied upon, the 
appropriate ATF officer may return:
    (i) The specific property levied upon,
    (ii) An amount of money equal to the amount of money levied upon 
(together with interest thereon at the overpayment rate from the date 
ATF receives the money to a date not more than 30 days before the date 
of return), or
    (iii) An amount of money equal to the amount of money received by 
the United States from a sale of the property (together with interest 
thereon at the overpayment rate from the date of the sale of the 
property to a date not more than 30 days before the date of return).

If the United States is in possession of specific property, the property 
may be returned at any time. An amount equal to the amount of money 
levied upon or received from a sale of the property may be returned at 
any time before the expiration of 9 months from the date of the levy. 
When a request described in paragraph (b)(2) of this section is filed 
for the return of property before the expiration of 9 months from the 
date of levy, an amount of money may be returned after a reasonable 
period of time subsequent to the expiration of the 9-month period if 
necessary for the investigation and processing of such request. In cases 
where money is specifically identifiable, as in the case of a coin 
collection which may be worth substantially more than its face value, 
the money will be treated as specific property and, whenever possible, 
this specific property will be returned. For purposes of paragraph 
(b)(1)(iii) of this section, if property is declared purchased by the 
United States at a sale pursuant to 26 U.S.C. 6335(e), the United States 
is treated as having received an amount of money equal to the minimum 
price determined by the appropriate ATF officer before the sale or, if 
larger, the amount received by the United States from the resale of the 
property.
    (2) Request for return of property. A written request for the return 
of property wrongfully levied upon shall be addressed to the officer who 
authorized the levy. The written request shall contain the following 
information:
    (i) The name and address of the person submitting the request,
    (ii) A detailed description of the property levied upon,
    (iii) A description of the claimant's basis for claiming an interest 
in the property levied upon, and
    (iv) The name and address of the taxpayer, the originating ATF 
office, and the date of lien or levy as shown on the Notice of Tax Lien, 
Notice of Levy, or, in lieu thereof, a statement of the reasons why such 
information cannot be furnished.
    (3) Inadequate request. A request shall not be considered adequate 
unless it is a written request containing the information required by 
paragraph (b)(2) of this section. However, unless a notification is 
mailed by the officer who received the request to the claimant within 30 
days of receipt of the request to inform the claimant of the 
inadequacies, any written request shall be considered adequate. If the 
officer who received the request timely notifies the claimant of the 
inadequacies of the request, the claimant shall have 30 days from the 
receipt of the notification of inadequacy to supply in writing any 
omitted information. Where the omitted information is so supplied within 
the 30-day period, the request shall be considered to be adequate from 
the time the original request was made for purposes of determining the 
applicable period of limitation upon suit under 26 U.S.C. 6532(c).

(26 U.S.C. 6343)

[T.D. ATF-6, 38 FR 32445, Nov. 26, 1973, as amended by T.D. ATF-450, 66 
FR 29026, May 29, 2001]



Sec. 70.168  Redemption of property.

    (a) Before sale. Any person whose property has been levied upon 
shall have the right to pay the amount due, together with costs and 
expenses of the proceeding, if any, to the appropriate ATF officer at 
any time prior to the sale of the property. Upon such payment the 
appropriate ATF officer shall restore such property to the owner and all 
further proceedings in connection with the levy on such property shall 
cease from the time of such payment.

[[Page 1024]]

    (b) Redemption of real estate after sale--(1) Period. The owner of 
any real estate sold as provided in 26 U.S.C. 6335, the owner's heirs, 
executors, or administrators, or any person having any interest therein, 
or a lien thereon, or any person in their behalf, shall be permitted to 
redeem the property sold, or any particular tract of such property, at 
any time within 180 days after the sale thereof.
    (2) Price. Such property or tract of property may be redeemed upon 
payment to the purchaser, or in case the purchaser cannot be found in 
the county in which the property to be redeemed is situated, then to the 
appropriate ATF officer, for the use of the purchaser, the purchaser's 
heirs, or assigns, the amount paid by such purchaser and interest 
thereon at the rate of 20 percent per annum. In case real and personal 
property (or several tracts of real property) are purchased in the 
aggregate, the redemption price of the real property (or of each of the 
several tracts) shall be determined on the basis of the ratio, as of the 
time of sale, of the value of the real property (or tract) to the value 
of the total property purchased. For this purpose the minimum price or 
the highest bid price, whichever is higher, offered for the property 
separately or in groups shall be treated as the value.
    (c) Record. When any real property is redeemed, the appropriate ATF 
officer must cause entry of the fact to be made upon the record of sale 
kept in accordance with 26 U.S.C. 6340 and Sec. 70.187 of this part, and 
such entry is evidence of such redemption. The party who redeems the 
property must notify the appropriate ATF officer of the date of such 
redemption and of the transfer of the certificate of sale, the amount of 
the redemption price, and the name of the party to whom such redemption 
price was paid.

(26 U.S.C. 6337)

[T.D. ATF-6, 38 FR 32445, Nov. 26, 1973, as amended by T.D. ATF-450, 66 
FR 29026, May 29, 2001]



Sec. 70.169  Expense of levy and sale.

    The appropriate ATF officer shall determine the expenses to be 
allowed in all cases of levy and sale. Such expenses shall include the 
expenses of protection and preservation of the property during the 
period subsequent to the levy, as well as the actual expenses incurred 
in connection with the sale thereof. In case real and personal property 
(or several tracts of real property) are sold in the aggregate, the 
appropriate ATF officer shall properly apportion the expenses to the 
real property (or to each tract).

(26 U.S.C. 6341)



Sec. 70.170  Application of proceeds of levy.

    (a) Collection of liability. Any money realized by proceedings under 
26 U.S.C. 6331 through 6344, or by sale of property redeemed by the 
United States (if the interest of the United States in the property was 
a lien arising under the provisions of 26 U.S.C. enforced and 
administered by the Bureau), is applied in the manner specified in 
paragraphs (a)(1), (2), and (3) of this section. Money realized by 
proceedings under 26 U.S.C. 6331 through 6344, includes money realized 
by seizure, by sale of seized property, or by surrender under 26 U.S.C. 
6332 except money realized by the imposition of a 50 percent penalty 
pursuant to 26 U.S.C. 6332(d)(2)).
    (1) Expense of levy and sale. First, against the expenses of the 
proceedings or sale, including expenses allowable under 26 U.S.C. 6341 
and amounts paid by the United States to redeem property.
    (2) Specific tax liability on seized property. If the property 
seized and sold is subject to a tax imposed by any provision of 26 
U.S.C. which has not been paid, the amount remaining after applying 
paragraph (a)(1) of this section, shall then be applied against such tax 
liability (and, if such tax was not previously assessed, it shall then 
be assessed):
    (3) Liability of delinquent taxpayer. The amount, if any, remaining 
after applying paragraphs (a)(1) and (2) of this section, shall then be 
applied against the liability in respect of which the levy was made or 
the sale of redeemed property was conducted.
    (b) Surplus proceeds. Any surplus proceeds remaining after the 
application of paragraph (a) of this section shall, upon application and 
satisfactory proof

[[Page 1025]]

in support thereof, be credited or refunded by the appropriate ATF 
officer to the person or persons legally entitled thereto. The 
delinquent taxpayer is the person entitled to the surplus proceeds 
unless another person establishes a superior claim thereto.

(26 U.S.C. 6342)

                         Disposition of Property

    Source: Sections 70.181 through 70.188 added by T.D. ATF-301, 55 FR 
47627, Nov. 14, 1990, unless otherwise noted.



Sec. 70.181  Disposition of seized property.

    (a) Notice of seizure. As soon as practicable after seizure of 
property, the appropriate ATF officer seizing the property shall give 
notice in writing to the owner of the property (or, in the case of 
personal property, to the possessor thereof). The written notice shall 
be delivered to the owner (or to the possessor, in the case of personal 
property) or left at the owner's usual place of abode or business, if 
located within the ATF region where the seizure is made. If the owner 
cannot be readily located, or has no dwelling or place of business 
within such region, the notice may be mailed to the owner's last known 
address. Such notice shall specify the sum demanded and shall contain, 
in the case of personal property, a list sufficient to identify the 
property seized and, in the case of real property, a description with 
reasonable certainty of the property seized.
    (b) Notice of sale. (1) As soon as practicable after seizure of the 
property, the appropriate ATF officer shall give notice of sale in 
writing to the owner. Such notice shall be delivered to the owner or 
left at the owner's usual place of abode or business if located. If the 
owner cannot be readily located, or has no dwelling or place of 
business, the notice may be mailed to the owner's last known address. 
The notice shall specify the property to be sold, and the time, place, 
manner, and conditions of the sale thereof, and shall expressly state 
that only the right, title, and interest of the delinquent taxpayer in 
and to such property is to be offered for sale. The notice shall also be 
published in some newspaper published in the county wherein the seizure 
is made or in a newspaper generally circulated in that county. For 
example, if a newspaper of general circulation in a county but not 
published in that county will reach more potential bidders for the 
property to be sold than a newspaper published within the county, or if 
there is a newspaper of general circulation within the county but no 
newspaper published within the county, the appropriate ATF officer may 
cause public notice of the sale to be given in the newspaper of general 
circulation within the county. If there is no newspaper published or 
generally circulated in the county, the notice shall be posted at the 
post office nearest the place where the seizure is made, and in not less 
than two other public places.
    (2) The appropriate ATF officer may use other methods of giving 
notice of sale and of advertising seized property in addition to those 
referred to in paragraph (b)(1) of this section, when the appropriate 
ATF officer believes that the nature of the property to be sold is such 
that a wider or more specialized advertising coverage will enhance the 
possibility of obtaining a higher price for the property.
    (3) Whenever levy is made without regard to the 10-day period 
provided in 26 U.S.C. 6331(a) (relating to cases in which collection is 
in jeopardy), a public notice of sale of the property seized shall not 
be made within such 10-day period unless 26 U.S.C. 6336 (relating to 
perishable goods) is applicable.
    (c) Time, place, manner, and conditions of sale. The time, place, 
manner, and conditions of sale of property seized by levy shall be as 
follows:
    (1) Time and place of sale--(i) In general. The time of sale shall 
not be less than 10 days nor more than 40 days from the time of giving 
public notice under 26 U.S.C. 6335(b) (see paragraph (b) of this 
section). The place of sale shall be within the county in which the 
property is seized, except that if it appears to the appropriate ATF 
officer under whose supervision the seizure was made that substantially 
higher bids may be obtained for the property if the sale is held at a 
place outside such county, the appropriate ATF officer may order that 
the sale be held in

[[Page 1026]]

such other place. The sale shall be held at the time and place stated in 
the notice of sale.
    (ii) Right to request sale of seized property within 60 days. The 
owner of any property seized by levy may request that the appropriate 
ATF officer sell such property within 60 days after such request (or 
within such longer period as may be specified by the owner). The 
appropriate ATF officer shall comply with such request unless it is 
determined (and the owner is notified within such period) that such 
compliance would not be in the best interests of the United States.
    (2) Adjournment of sale. When it appears to the appropriate ATF 
officer that an adjournment of the sale will best serve the interest of 
the United States or that of the taxpayer, the appropriate ATF officer 
may adjourn the sale from time to time, but the date of the sale shall 
not be later than one month after the date fixed in the original notice 
of sale.
    (3) Minimum price. (i) Before the sale of property seized by levy, 
the appropriate ATF officer shall determine:
    (A) A minimum price, taking into account the expenses of levy and 
sale, for which the property shall be sold, and
    (B) Whether the purchase of such property by the United States at 
such minimum price would be in the best interest of the United States.

If, at the sale, one or more persons offer to purchase such property for 
not less than the amount of the minimum price, the property shall be 
declared to be sold to the highest bidder. If no person offers for such 
property at the sale the amount of the minimum price and the appropriate 
ATF officer has determined that the purchase of such property by the 
United States would be in the best interest of the United States, the 
property shall be declared to be sold to the United States at such 
minimum price. If, at the sale, the property is not declared sold to the 
highest bidder or the United States, the property shall be released to 
the owner thereof and the expense of the levy and sale shall be added to 
the amount of tax for the collection of which the levy was made. Any 
property released to the owner under these circumstances shall remain 
subject to any lien imposed by 26 U.S.C. chapter 64, subchapter C.
    (ii) The appropriate ATF officer conducting the sale shall either 
announce the minimum price before the sale begins or defer announcement 
of the minimum price until after the receipt of the highest bid, and, if 
the highest bid is greater than the minimum price, no announcement of 
the minimum price shall be made.
    (4) Offering of property--(i) Sale of indivisible property. If any 
property levied upon is not divisible, so as to enable the appropriate 
ATF officer by sale of a part thereof to raise the whole amount of the 
tax and expenses of levy and sale, the whole of such property shall be 
sold. For application of surplus proceeds of sale, see 26 U.S.C. 
6342(b).
    (ii) Separately, in groups, or in the aggregate. The seized property 
may be offered for sale:
    (A) As separate items, or
    (B) As groups of items, or
    (C) In the aggregate, or
    (D) Both as separate items (or in groups) and in the aggregate. In 
such cases, the property shall be sold under the method which produces 
the highest aggregate amount.

The appropriate ATF officer shall select whichever of the foregoing 
methods of offering the property for sale as is most feasible under all 
the facts and circumstances of the case, except that if the property to 
be sold includes both real and personal property, only the personal 
property may be grouped for the purpose of offering such property for 
sale. However, real and personal property may be offered for sale in the 
aggregate, provided the real property, as separate items, and the 
personal as a group, or as groups, or as separate items, are first 
offered separately.
    (iii) Condition of title and of property. Only the right, title, and 
interest of the delinquent taxpayer in and to the property seized shall 
be offered for sale, and such interest shall be offered subject to any 
prior outstanding mortgages, encumbrances, or other liens in favor of 
third parties which are valid as against the delinquent taxpayer and are 
superior to the lien of the United States. All seized property shall be 
offered for sale ``as is'' and ``where is'' and without recourse against 
the

[[Page 1027]]

United States. No guaranty or warranty, express or implied, shall be 
made by the appropriate ATF officer offering the property for sale, as 
to the validity of the title, quality, quantity, weight, size, or 
condition of any of the property, or its fitness for any use or purpose. 
No claim shall be considered for allowance or adjustment or for 
rescission of the sale based upon failure of the property to conform 
with any representation, express or implied.
    (iv) Terms of payment. The property shall be offered for sale upon 
whichever of the following terms is fixed by the appropriate ATF officer 
in the public notice of sale:
    (A) Payment in full upon acceptance of the highest bid, without 
regard to the amount of such bid, or
    (B) If the aggregate price of all property purchased by a successful 
bidder at the sale is more than $200, an initial payment of $200 or 20 
percent of the purchase price, whichever is the greater, and payment of 
the balance (including all costs incurred for the protection or 
preservation of the property subsequent to the sale and prior to final 
payment) within a specified period, not to exceed 1 month from the date 
of the sale.
    (5) Method of sale. The appropriate ATF officer shall sell the 
property either:
    (i) At public auction, at which open competitive bids shall be 
received, or
    (ii) At public sale under sealed bids. The following rules, in 
addition to the other rules provided in this paragraph, shall be 
applicable to public sale under sealed bids:
    (A) Invitation to bidders. Bids shall be solicited through a public 
notice of sale.
    (B) Form for use by bidders. A bid shall be submitted on a form 
which will be furnished by the appropriate ATF officer upon request. The 
form shall be completed in accordance with the instructions thereon.
    (C) Remittance with bid. If the total bid is $200 or less, the full 
amount of the bid shall be submitted therewith. If the total bid is more 
than $200, 20 percent of such bid or $200, whichever is greater, shall 
be submitted therewith. (In the case of alternative bids submitted by 
the same bidder for items of property offered separately, or groups, or 
in the aggregate, the bidder shall remit the full amount of the highest 
alternative bid submitted, if the bid is $200 or less. If the highest 
alternative bid submitted is more than $200, the bidder shall remit 20 
percent of the highest alternative bid or $200, whichever is greater.) 
Such remittance shall be by a certified, cashier's, or treasurer's check 
drawn on any bank or trust company incorporated under the laws of the 
United States or under the laws of any State, Territory, or possession 
of the United States, or by a U.S. postal, bank, express, or telegraph 
money order.
    (D) Time for receiving and opening bids. Each bid shall be submitted 
in a securely sealed envelope. The bidder shall indicate in the upper 
left hand corner of the envelope the bidder's name and address and the 
time and place of sale as announced in the public notice of sale. A bid 
will not be considered unless it is received by the officer conducting 
the sale prior to the opening of the bids. The bids will be opened at 
the time and place stated in the notice or sale, or at the time fixed in 
the announcement of the adjournment of the sale.
    (E) Consideration of bids. The public notice of sale shall specify 
whether the property is to be sold separately, by groups, or in the 
aggregate or by a combination of these methods, as provided in paragraph 
(c)(4)(ii) of this section. If the notice specifies an alternative 
method, bidders may submit bids under one or more of the alternatives. 
In case of error in the extension of prices in any bid, the unit price 
will govern. The officer conducting the sale shall have the right to 
waive any technical defects in a bid. In the event two or more highest 
bids are equal in amount, the officer conducting the sale shall 
determine the successful bidder by drawing lots. After the opening, 
examination, and consideration of all bids, the officer conducting the 
sale shall announce the amount of the highest bid or bids and the name 
of the successful bidder or bidders. Any remittance submitted in 
connection with an unsuccessful bid shall be returned at the conclusion 
of the sale.

[[Page 1028]]

    (F) Withdrawal of bids. A bid may be withdrawn on written or 
telegraphic request received from the bidder prior to the time fixed for 
opening the bids. A technical defect in a bid confers no right on the 
bidder for the withdrawal of his bid after it has been opened.
    (6) Payment of bid price. All payments for property sold under this 
section shall be made by cash or by a certified, cashier's, or 
treasurer's check drawn on any bank or trust company incorporated under 
the laws of the United States, or under the laws of any State, 
Territory, or possession of the United States, or by a U.S. postal, 
bank, express, or telegraph money order. If payment in full is required 
upon acceptance of the highest bid, the payment shall be made at such 
time. If deferred payment is permitted, the initial payment shall be 
made upon acceptance of the bid, and the balance shall be paid on or 
before the date fixed for payment thereof. Any remittance submitted with 
a successful sealed bid shall be applied toward the purchase price.
    (7) Delivery and removal of personal property. Responsibility of the 
United States for the protection or preservation of seized personal 
property shall cease immediately upon acceptance of the highest bid. The 
risk of loss is on the purchaser of personal property upon acceptance of 
his bid. Possession of any personal property shall not be delivered to 
the purchaser until the purchase price has been paid in full. If payment 
of part of the purchase price for personal property is deferred, the 
United States will retain possession of such property as security for 
the payment of the balance of the purchase price and, as agent for the 
purchaser, will cause the property to be cared for until the purchase 
price has been paid in full or the sale is declared null and void for 
failure to make full payment of the purchase price. In such case, all 
charges and expenses incurred in caring for the property after the 
acceptance of the bid shall be borne by the purchaser.
    (8) Default in payment. If payment in full is required upon 
acceptance of the bid and is not then and there paid, the officer 
conducting the sale shall forthwith proceed again to sell the property 
in the manner provided in 26 U.S.C. 6335(e) and this section. If the 
conditions of the sale permit part of the payment to be deferred, and if 
such part is not paid within the prescribed period, suit may be 
instituted against the purchaser for the purchase price or such part 
thereof as has not been paid, together with interest at the rate of 6 
percent per annum from the date of the sale; or, in the discretion of 
the appropriate ATF officer, the sale may be declared by the appropriate 
ATF officer to be null and void for failure to make full payment of the 
purchase price and the property may again be advertised and sold as 
provided in 26 U.S.C. 6335(b), (c), and (e) and this section. In the 
event of such readvertisement and sale, any new purchaser shall receive 
such property or rights to property free and clear of any claim or right 
of the former defaulting purchaser, of any nature whatsover, and the 
amount paid upon the bid price by such defaulting purchaser shall be 
forfeited to the United States.

(26 U.S.C. 6335)

[T.D. ATF-301, 55 FR 47627, Nov. 14, 1990, as amended by T.D. ATF-450, 
66 FR 29025, May 29, 2001]



Sec. 70.182  Disposition of personal property acquired by the United States.

    (a) Sale--(1) In general. Any personal property (except bonds, 
notes, checks, and other securities) acquired by the United States in 
payment of or as security for debts arising under the internal revenue 
laws may be sold by the appropriate ATF officer who acquired such 
property for the United States. United States saving bonds shall not be 
sold by the appropriate ATF officer, but shall be transferred to the 
appropriate office of the Treasury Department for redemption. Other 
bonds, notes, checks, and other securities shall be disposed of in 
accordance with instructions issued by the appropriate ATF officer.
    (2) Time, place, manner and terms of sale. The time, place, manner 
and terms of sale of personal property acquired for the United States 
shall be as follows:
    (i) Time, notice, and place of sale. The property may be sold at any 
time after it has been acquired by the United States. A public notice of 
sale shall be

[[Page 1029]]

posted at the post office nearest the place of sale and in at least two 
other public places. The notice shall specify the property to be sold 
and the time, place, manner, and conditions of sale. In addition, the 
appropriate ATF officer may use such other methods of advertising as 
such officer believes will result in obtaining the highest price for the 
property. Generally, the place of sale will be within the area where the 
property was originally acquired by the United States. However, if the 
appropriate ATF officer believes that a substantially higher price may 
be obtained, the sale may be held outside such area.
    (ii) Rejection of bids and adjournment of sale. The officer 
conducting the sale reserves the right to reject any and all bids and 
withdraw the property from the sale. When it appears to the officer 
conducting the sale that an adjournment of the sale will best serve the 
interest of the United States, that officer may order the sale adjourned 
from time to time. If the sale is adjourned for more than 30 days in the 
aggregate, public notice of the sale must again be given in accordance 
with paragraph (a)(2)(i) of this section.
    (iii) Liquidated damages. The notice shall state whether, in the 
case of default in payment of the bid price, any amount deposited with 
the United States will be retained as liquidated damages. In case 
liquidated damages are provided, the amount thereof shall not exceed 
$200.
    (3) Agreement to bid. The appropriate ATF officer may, before giving 
notice of sale, solicit offers from prospective bidders and enter into 
agreements with such persons that they will bid at least a specified 
amount in case the property is offered for sale. In such cases, the 
appropriate ATF officer may also require such persons to make deposits 
to secure the performance of their agreements. Any such deposit, but not 
more than $200, shall be retained as liquidated damages in case such 
person fails to bid the specified amount and the property is not sold 
for as much as the amount specified in such agreement.
    (4) Terms of payment. The property shall be offered for sale upon 
whichever of the following terms is fixed by the appropriate ATF officer 
in the public notice of sale:
    (i) Payment in full upon acceptance of the highest bid, without 
regard to the amount of such bid, or
    (ii) If the aggregate price of all property purchased by a 
successful bidder at the sale is more than $200, an initial payment of 
$200 or 20 percent of the purchase price, whichever is the greater, and 
payment of the balance (including all costs incurred for the protection 
or preservation of the property subsequent to the sale and prior to 
final payment) within a specified period, not to exceed one month from 
the date of the sale.
    (5) Method of sale. The property may be sold either:
    (i) At public auction, at which open competitive bids shall be 
received, or
    (ii) At public sale under sealed bids.
    (6) Sales under sealed bids. The following rules, in addition to the 
other rules provided in this paragraph, shall be applicable to public 
sales under sealed bids.
    (i) Invitation to bidders. Bids shall be solicited through a public 
notice of sale.
    (ii) Form for use by bidders. A bid shall be submitted on a form 
which will be furnished by the appropriate ATF officer upon request. The 
form shall be completed in accordance with the instructions thereon.
    (iii) Remittance with bid. If the total bid is $200 or less, the 
full amount of the bid shall be submitted therewith. If the total bid is 
more than $200, 20 percent of such bid or $200, whichever is greater, 
shall be submitted therewith. Such remittance shall be by a certified, 
cashier's, or treasurer's check drawn on any bank or trust company 
incorporated under the laws of the United States or under the laws of 
any State, Territory, or possession of the United States, or by a U.S. 
postal, bank, express, or telegraph money order.
    (iv) Time for receiving and opening bids. Each bid shall be 
submitted in a securely sealed envelope. The bidder shall indicate in 
the upper left hand corner of the envelope the bidder's name and address 
and the time and place of sale as announced in the public notice of 
sale. A bid will not be considered unless it is received by the officer

[[Page 1030]]

conducting the sale prior to the opening of the bids. The bids will be 
opened at the time and place stated in the notice of sale, or at the 
time fixed in the announcement of the adjournment of the sale.
    (v) Consideration of bids. The officer conducting the sale shall 
have the right to waive any technical defects in a bid. After the 
opening, examination, and consideration of all bids, the officer 
conducting the sale shall announce the amount of the highest bid or bids 
and the name of the successful bidder or bidders, unless in the opinion 
of the officer a higher price can be obtained for the property than has 
been bid. In the event the highest bids are equal in amount (and unless 
in the opinion of the officer conducting the sale a higher price can be 
obtained for the property than has been bid), the officer shall 
determine the successful bidder by drawing lots. Any remittance 
submitted in connection with an unsuccessful bid shall be returned to 
the bidder at the conclusion of the sale.
    (vi) Withdrawal of bids. A bid may be withdrawn on written or 
telegraphic request received from the bidder prior to the time fixed for 
opening the bids. A technical defect in a bid confers no right on the 
bidder for the withdrawal of the bid after it has been opened.
    (7) Payment of bid price. All payments for property sold pursuant to 
this section shall be made by cash or by a certified, cashier's or 
treasurer's check drawn on any bank or trust company incorporated under 
the laws of the United States or under the laws of any State, Territory, 
or possession of the United States, or by a U.S. postal, bank, express, 
or telegraph money order. If payment in full is required upon acceptance 
of the highest bid, the payment shall be made at such time. If payment 
in full is not made at such time, the officer conducting the sale may 
forthwith proceed again to sell the property in the manner provided in 
paragraph (a)(5) of this section. If deferred payment is permitted, the 
initial payment shall be made upon acceptance of the bid, and the 
balance shall be paid on or before the date fixed for payment thereof. 
Any remittance submitted with a successful sealed bid shall be applied 
toward the purchase price.
    (8) Delivery and removal of personal property. The risk of loss is 
on the purchaser of the property upon acceptance of the purchaser's bid. 
Possession of any property shall not be delivered to the purchaser until 
the purchase price has been paid in full. If payment of part of the 
purchase price for the property is deferred, the United States will 
retain possession of such property as security for the payment of the 
balance of the purchase price and, as agent for the purchaser, will 
cause the property to be cared for until the purchase price has been 
paid is full or the sale in declared null and void for failure to make 
full payment of the purchase price. In such case, all charges and 
expenses incurred in caring for the property after acceptance of the bid 
shall be borne by the purchaser.
    (9) Certificate of sale. The officer conducting the sale shall issue 
a certificate of sale to the purchaser upon payment in full of the 
purchase price.
    (b) Accounting. In case of the resale of such property, the proceeds 
of the sale shall be paid into the Treasury as internal revenue 
collections and there shall be rendered by the appropriate ATF officer a 
distinct account of all charges incurred in such sale. For additional 
accounting rules, see 26 U.S.C. 7809.

(26 U.S.C. 7505)

[T.D. ATF-301, 55 FR 47627, Nov. 14, 1990, as amended by T.D. ATF-450, 
66 FR 29027, May 29, 2001]



Sec. 70.183  Administration and disposition of real estate acquired by the United States.

    (a) Persons charged with. The appropriate ATF officer shall have 
charge of all real estate which has been or shall be assigned, set off, 
or otherwise conveyed by purchase or otherwise to the United States in 
payment of debts or penalties arising under provisions of 26 U.S.C. 
enforced and administered by the Bureau or which has been or shall be 
vested in the United States by mortgage, or other security for payment 
of such debts, or which has been redeemed by the United States, or which 
has been or shall be acquired by the United States for payment of or as 
security for

[[Page 1031]]

debts arising under provisions of 26 U.S.C. enforced and administered by 
the Bureau, and of all trusts created for the use of the United States 
in payment of such debts due the United States.
    (b) Sale. The appropriate ATF officer may sell any real estate owned 
or held by the United States as aforesaid, subject to the following 
rules:
    (1) Property purchased at sale under levy. If the property was 
acquired as a result of being declared purchased for the United States 
at a sale under 26 U.S.C. 6335, relating to sale of seized property, the 
property shall not be sold until after the expiration of 180 days after 
such sale under levy.
    (2) Notice of sale. A notice of sale shall be published in some 
newspaper published or generally circulated within the county where the 
property is situated, or a notice shall be posted at the post office 
nearest the place where the property is situated and in at least two 
other public places. The notice shall specify the property to be sold 
and the time, place, manner and conditions of sale. In addition, the 
appropriate ATF officer may use other methods of advertising and of 
giving notice of the sale if the appropriate ATF officer believes such 
methods will enhance the possibility of obtaining a higher price for the 
property.
    (3) Time and place of sale. The time of the sale shall be not less 
than 20 days from the date of giving public notice of sale under 
paragraph (b)(2) of this section. The place of sale shall be within the 
county where the property is situated. However, if the appropriate ATF 
officer believes a substantially better price may be obtained, the sale 
may be held outside such county.
    (4) Rejection of bids and adjournment of sale. The officer 
conducting the sale reserves the right to reject any and all bids and 
withdraw the property from the sale. When it appears to the officer 
conducting the sale that an adjournment of the sale will best serve the 
interest of the United States, that officer may order the sale adjourned 
from time to time. If the sale is adjourned for more than 30 days in the 
aggregate, public notice of the sale must be given again in accordance 
with paragraph (b)(2) of this section.
    (5) Liquidated damages. The notice shall state whether, in the cae 
of default in payment of the bid price, any amount deposited with the 
United States will be retained as liquidated damages. In case liquidated 
damages are provided, the amount thereof shall not exceed $200.
    (6) Agreement to bid. The appropriate ATF officer may, before giving 
notice of sale, solicit offers from prospective bidders and enter into 
agreements with such persons that they will bid at least a specified 
amount in case the property is offered for sale. In such cases, the 
appropriate ATF officer may also require such persons to make deposits 
to secure the performance of their agreements. Any such deposit, but not 
more than $200, shall be retained as liquidated damages in case such 
person fails to bid the specified amount and the property is not sold 
for as much as the amount specified in such agreement.
    (7) Terms. The property shall be offered for sale upon whichever of 
the following terms is fixed by the appropriate ATF officer in the 
public notice of sale:
    (i) Payments in full upon acceptance of the highest bid, or
    (ii) If the price of the property purchased by a successful bidder 
at the sale is more than $200, an initial payment of $200 or 20 percent 
of the purchase price, whichever is the greater, and payment of the 
balance within a specified period, not to exceed one month from the date 
of the sale.
    (8) Method of sale. The property may be sold either:
    (i) At public auction, at which open competitive bids shall be 
received, or
    (ii) At public sale under sealed bids.
    (9) Sales under sealed bids. The following rules, in addition to the 
other rules provided in this paragraph (b), shall be applicable to 
public sales under sealed bids.
    (i) Invitation to bidders. Bids shall be solicited through a public 
notice of sale.
    (ii) Form for use by bidders. A bid shall be submitted on a form 
which will be furnished by the appropriate ATF officer upon request. The 
form shall be completed in accordance with the instructions thereon.

[[Page 1032]]

    (iii) Remittance with bid. If the total bid is $200 or less, the 
full amount of the bid shall be submitted therewith. If the total bid is 
more than $200, 20 percent of such bid or $200, whichever is greater, 
shall be submitted therewith. Such remittance shall be by a certified, 
cashier's, or treasurer's check drawn on any bank or trust company 
incorporated under the laws of the United States or under the laws of 
any State, Territory, or possession of the United States, or by a U.S. 
postal, bank, express, or telegraph money order.
    (iv) Time for receiving and opening bids. Each bid shall be 
submitted in a securely sealed envelope. The bidder shall indicate in 
the upper left hand corner of the envelope the bidder's name and address 
and the time and place of sale as announced in the public notice of 
sale. A bid shall not be considered unless it is received by the officer 
conducting the sale prior to the opening of the bids. The bids will be 
opened at the time and place stated in the notice of sale, or at the 
time fixed in the announcement of the adjournment of the sale.
    (v) Consideration of bids. The officer conducting the sale shall 
have the right to waive any technical defects in a bid. After the 
opening, examination, and consideration of all bids, the officer 
conducting the sale shall announce the amount of the highest bid or bids 
and the name of the successful bidder or bidders, unless in the opinion 
of the officer a higher price can be obtained for the property than has 
been bid. In the event the highest bids are equal in amount (and unless 
in the opinion of the officer conducting the sale a higher price can be 
obtained for the property than has been bid), the officer shall 
determine the successful bidder by drawing lots. Any remittance 
submitted in connection with an unsuccessful bid shall be returned to 
the bidder at the conclusion of the sale.
    (vi) Withdrawal of bid. A bid may be withdrawn on written or 
telegraphic request received from the bidder prior to the time fixed for 
opening the bids. A technical defect in a bid confers no right on the 
bidder for the withdrawal of the bid after it has been opened.
    (10) Payment of bid price. All payments for property sold pursuant 
to this section shall be made by cash or by a certified cashier's or 
treasurer's check drawn on any bank or trust company incorporated under 
the laws of the United States or under the laws of any State, Territory, 
or possession of the United States, or by a U.S. postal, bank, express, 
or telegraph money order. If payment in full is required upon acceptance 
of the highest bid, the payment shall be made at such time. If payment 
in full is not made at such time, the officer conducting the sale may 
forthwith proceed again to sell the property in the manner provided in 
paragraph (b)(8) of this section. If deferred payment is permitted, the 
initial payment shall be made upon acceptance of the bid, and the 
balance shall be paid on or before the date fixed for payment thereof. 
Any remittance submitted with a successful sealed bid shall be applied 
toward the purchase price.
    (11) Deed. Upon payment in full of the purchase price, the 
appropriate ATF officer shall execute a quitclaim deed to the purchaser.
    (c) Lease. Until real estate is sold, the appropriate ATF officer 
may lease such property.
    (d) Release to debtor. In cases where real estate has or may become 
the property of the United States by conveyance or otherwise, in payment 
of or as security for a debt arising under the laws relating to internal 
revenue, and such debt shall have been paid, together with the interest 
thereon (at the rate of 1 percent per month), to the United States 
within 2 years from the date of the acquisition of such real estate, the 
appropriate ATF officer may release by deed or otherwise convey such 
real estate to the debtor from whom it was taken, or to the debtor's 
heirs or other legal representatives. If property is declared purchased 
by the United States under 26 U.S.C. 6335, then, for the purpose of this 
paragraph, the date of such declaration shall be deemed to be the date 
of acquisition of such real estate.
    (e) Accounting. The appropriate ATF officer shall, in accordance 
with 26 U.S.C. 7809, account for the proceeds of all sales or leases of 
the property and all expenses connected with the maintenance, sale, or 
lease of the property.

[[Page 1033]]

    (f) Authority of appropriate ATF officer. Notwithstanding the other 
paragraphs of this section, the appropriate ATF officer may, when such 
officer deems it advisable, take charge of, and assume responsibility 
for, any real estate to which this section is applicable. In such case, 
such officer will notify in writing the appropriate ATF officer from 
whom he or she is taking charge and assuming responsibility. Also, in 
any case where a single parcel of real estate is situated in an area in 
which more than one officer has jurisdiction, the appropriate ATF 
officer may designate in writing one officer who is to be in charge of, 
and responsible for, the entire property.

(26 U.S.C. 7506)

[T.D. ATF-301, 55 FR 47627, Nov. 14, 1990, as amended by T.D. ATF-450, 
66 FR 29027, May 29, 2001]



Sec. 70.184  Disposition of perishable goods.

    (a) Appraisal of certain seized property. If the appropriate ATF 
officer determines that any property seized by levy is liable to perish 
or become greatly reduced in price or value by keeping, or that such 
property cannot be kept without great expense, the appropriate ATF 
officer shall appraise the value of such property and return it to the 
owner if the owner complies with the conditions prescribed in paragraph 
(b) of this section or, if the owner does not comply with such 
conditions, dispose of the property in accordance with paragraph (c) of 
this section.
    (b) Return to owner. If the owner of the property can be readily 
found, the appropriate ATF officer shall give the owner written notice 
of the appropriate ATF officer's determination of the appraised value of 
the property. However, if the appropriate ATF officer determines that 
the circumstances require immediate action, the appropriate ATF officer 
may give the owner an oral notice of the determination of the appraised 
value of the property, which notice shall be confirmed in writing prior 
to sale. The property shall be returned to the owner if, within the time 
specified in the notice, the owner:
    (1) Pays to the appropriate ATF officer an amount equal to the 
appraised value, or
    (2) Gives an acceptable bond as prescribed by 26 U.S.C. 7101 and 
Sec. 70.281 of this part. Such bond shall be in an amount not less than 
the appraised value of the property and shall be conditioned upon the 
payment of such amount at such time as the appropriate ATF officer 
determines to be appropriate in the circumstances.
    (c) Immediate sale. If the owner does not pay the amount of the 
appraised value of the seized property within the time specified in the 
notice, or furnish bond as provided in paragraph (b) of this section 
within such time, the appropriate ATF officer shall as soon as 
practicable make public sale of the property in accordance with the 
following terms and conditions:
    (1) Notice of sale. If the owner can readily be found, a notice 
shall be given to the owner. A notice of sale also shall be posted in 
two public places in the county which the property is to be sold. The 
notice shall specify the time and place of sale, the property to be 
sold, and the manner and conditions of sale. The appropriate ATF officer 
may give such other notice and in such other manner as the appropriate 
ATF officer deems advisable under the circumstances.
    (2) Sale. The property shall be sold at public auction to the higher 
bidder.
    (3) Terms. The purchase price shall be paid in full upon acceptance 
of the highest bid. The payment shall be made by cash, or by a 
certified, cashier's or treasurer's check drawn on any bank or trust 
company incorporated under the laws of the United States or under the 
laws of any State, Territory, or possession of the United States, or by 
a U.S. postal, bank, express, or telegraph money order.

(26 U.S.C. 6336)



Sec. 70.185  Certificate of sale; deed of real property.

    (a) Certificate of sale. In the case of property sold as provided in 
26 U.S.C. 6335 (relating to sale of seized property), the appropriate 
ATF officer shall give to the puchaser's a certificate of sale upon 
payment in full of the purchase price. A certificate of sale of real 
property shall set forth the real property purchased, for whose taxes 
the

[[Page 1034]]

same was sold, the name of the purchaser, and the price paid therefor.
    (b) Deed to real property. In case of any real property sold as 
provided in 26 U.S.C. 6335 and not redeemed in the manner and within the 
time prescribed in 26 U.S.C. 6337, the appropriate ATF officer shall 
execute (in accordance with the laws of the State in which the real 
property is situated pertaining to sales of real property under 
execution) to the purchaser of such real property at the sale or his 
assigns, upon surrender of the certificate of sale, a deed of the real 
property so purchased, reciting the facts set forth in the certificate.
    (c) Deed to real property purchased by the United States. If real 
property is declared purchased by the United States at a sale pursuant 
to 26 U.S.C. 6335, the appropriate ATF officer shall at the proper time 
execute a deed therefor and shall, without delay, cause the deed to be 
duly recorded in the proper registry of deeds.

(26 U.S.C. 6338)



Sec. 70.186  Legal effect of certificate of sale of personal property and deed of real property.

    (a) Certificate of sale of property other than real property. In all 
cases of sale pursuant to 26 U.S.C. 6335 of property (other than real 
property), the certificate of such sale.
    (1) As evidence. Shall be prima facie evidence of the right of the 
officer to make such sale, and conclusive evidence of the regularity of 
the officer's proceedings in making the sale; and
    (2) As conveyance. Shall transfer to the purchaser all right, title, 
and interest of the party delinquent in and to the property sold; and
    (3) As authority for transfer of corporate stock. If such property 
consists of corporate stocks, shall be notice, when received, to any 
corporation, company, or association of such transfer, and shall be 
authority to such corporation, company, or association to record the 
transfer on its books and records in the same manner as if the stocks 
were transferred or assigned by the party holding the stock certificate, 
in lieu of any original or prior certificate, which shall be void, 
whether canceled or not; and
    (4) As receipts. If the subject of sale is securities or other 
evidence of debt, shall be a good and valid receipt to the person 
holding the certificate of sale as against any person holding or 
claiming to hold possession of such securities or other evidences of 
debt; and
    (5) As authority for transfer of title to motor vehicle. If such 
property consists of a motor vehicle, shall be notice, when received, to 
any public officer charged with the registration of title to motor 
vehicles, of such tranfer and shall be authority to such officer to 
record the transfer on his books and records in the same manner as if 
the certificate of title to such motor vehicle were transferred or 
assigned by the party holding the certificate of title, in lieu of any 
original or prior certificate, which shall be null and void, whether 
canceled or not.
    (b) Deed to real property. In the case of the sale of real property 
pursuant to 26 U.S.C. 6335:
    (1) Deed as evidence. The deed of sale given pursuant to 26 U.S.C. 
6338 shall be prima facie evidence of the facts therein stated; and
    (2) Deed as conveyance of title. If the proceedings of the 
appropriate ATF officer as set forth have been substantially in 
accordance with the provisions of law, such deed shall be considered and 
operate as a conveyance of all the right, title, and interest the party 
delinquent had in and to the real property thus sold at the time the 
lien of the United States attached thereto.
    (c) Effect of junior encumbrances. A certificate of sale of personal 
property given or a deed to real property executed pursuant to 26 U.S.C. 
6338 discharges the property from all liens, encumbrances, and titles 
over which the lien of the United States, with respect to which the levy 
was made, has priority. For example, a mortgage on real property 
executed after a notice of a Federal tax lien has been filed is 
extinguished when the appropriate ATF officer executes a deed to the 
real property to a purhcaser thereof at a sale pursuant to 26 U.S.C. 
6335 following the seizure of the property by the United States. The 
proceeds of such a sale are distributed in accordance with priority of 
the liens, encumbrances, or titles. See 26 U.S.C. 6342(b) and 7426(a)(2) 
and

[[Page 1035]]

Sec. Sec. 70.170 and 70.207(a)(2) of this part with respect to surplus 
proceeds.

(26 U.S.C. 6339)



Sec. 70.187  Records of sale.

    (a) Requirement. Each appropriate ATF officer shall make a record of 
all sales under 26 U.S.C. 6335 of real property situated within his or 
her jurisdiction and of redemptions of such property. The records shall 
set forth the tax for which any such sale was made, the dates of 
seizures and sale, the name of the party assessed and all proceedings in 
making such sale, the amount of expenses, the names of the purchasers, 
and the date of the deed. In the case of redemption of the property, the 
records shall additionally set forth the date of such redemption and of 
the transfer of the certificate of sale, the amount of the redemption 
price, and the name of the party to whom such redemption price was paid. 
The orginal record shall be retained by the appropriate ATF officer.
    (b) Copy as evidence. A copy of such record, or any part thereof, 
certified by the appropriate ATF officer shall be evidence in any court 
of the truth of the facts therein stated.

(26 U.S.C. 6340)

[T.D. ATF-301, 55 FR 47627, Nov. 14, 1990, as amended by T.D. ATF-450, 
66 FR 29027, May 29, 2001]



Sec. 70.188  Expense of levy and sale.

    The appropriate ATF officer shall determine the expenses to be 
allowed in all cases of levy and sale. Such expenses shall include the 
expenses of protection and preservation of the property during the 
period subsequent to the levy, as well as the actual expenses incurred 
in connection with the sale thereof. In case real and personal property 
(or several tracts of real property) are sold in the aggregate, the 
appropriate ATF officer shall properly apportion the expenses to the 
real property (or to each tract).

(26 U.S.C. 6341)

                          Judicial Proceedings

                    Civil Action by the United States

    Source: Sections 70.191 through 70.193 added by T.D. ATF-301, 55 FR 
47633, Nov. 14, 1990.



Sec. 70.191  Authorization.

    (a) In general. A civil action for the collection or recovery of 
taxes, or of any fine, penalty, or forfeiture (with respect to the 
provisions of 26 U.S.C. enforced and administered by the Bureau) will be 
commenced when the appropriate ATF officer, directs that the action be 
commenced.
    (b) Property held by banks. The appropriate ATF officer shall not 
authorize or sanction any civil action for the collection or recovery of 
taxes, or of any fine, penalty, or forfeiture, from any deposits held in 
a foreign office of a bank engaged in the banking business in the United 
States or a possession of the United States unless the appropriate ATF 
officer believes:
    (1) That the taxpayer is within the jurisdiction of a U.S. court at 
the time the civil action is authorized or sanctioned and that the bank 
is in possession of (or obligated with respect to) deposits of the 
taxpayer in an office of the bank outside the United States or a 
possession of the United States; or
    (2) That the taxpayer is not within the jurisdiction of a U.S. court 
at the time the civil action is authorized or sanctioned, that the bank 
is in possession of (or obligated with respect to) deposits of the 
taxpayer in an office of the bank outside the United States or a 
possession of the United States, and that such deposits consist, in 
whole or in part, of funds transferred from the United States or a 
possession of the United States in order to hinder or delay the 
collection of a tax imposed by the provisions of 26 U.S.C. enforced and 
administered by the Bureau.

(26 U.S.C. 7401)

[T.D. ATF-301, 55 FR 47633, Nov. 14, 1990, as amended by 66 FR 29027, 
May 29, 2001]

[[Page 1036]]



Sec. 70.192  Action to enforce lien or to subject property to payment of tax.

    (a) Civil actions. In any case where there has been a refusal or 
neglect to pay any tax (with respect to the provisions of 26 U.S.C. 
enforced and administered by the Bureau) or to discharge any liability 
in respect thereof, whether or not levy has been made, the Attorney 
General or designated delegate at the request of the appropriate ATF 
officer, may direct a civil action to be filed in any court of the 
United States to enforce the lien of the United States under the 
Internal Revenue Code with respect to such tax or liability or to 
subject any property, of whatever nature, of the delinquent, or in which 
the delinquent has any right, title or interest, to the payment of such 
tax or liability. In any such proceeding, at the instance of the United 
States, the court may appoint a receiver to enforce the lien, or, upon 
certification by the appropriate ATF officer during the pendency of such 
proceedings that it is in the public interest, may appoint a receiver 
with all the powers of a receiver in equity.
    (b) Bid by the United States. If property is sold to satisfy a first 
lien held by the United States, the United States may bid at the sale a 
sum which does not exceed the amount of its lien and the expenses of the 
sale. See also 31 U.S.C. 3715.

(26 U.S.C. 7403)

[T.D. ATF-301, 55 FR 47633, Nov. 14, 1990, as amended by 66 FR 29027, 
May 29, 2001]



Sec. 70.193  Disposition of judgments and moneys recovered.

    All judgments and moneys recovered or received for taxes, costs, 
forfeitures, and penalties (with respect to the provisions of 26 U.S.C. 
enforced and administered by the Bureau) shall be paid to the Bureau as 
collections of taxes imposed under the provisions of 26 U.S.C. enforced 
and administered by the Bureau.

(26 U.S.C. 7406)

               Proceedings by Taxpayers and Third Parties

    Source: Sections 70.202 through 70.213 added by T.D. ATF-301, 55 FR 
47634, Nov. 14, 1990.



Sec. 70.202  Intervention.

    If the United States is not a party to a civil action or suit, the 
United States may intervene in such action or suit to assert any lien 
arising under provisions of 26 U.S.C. enforced and administered by the 
Bureau on the property which is the subject of such action or suit. The 
provisions of 28 U.S.C. 2410 (except subsection (b)) and of 28 U.S.C. 
1444 shall apply in any case in which the United States intervenes as if 
the United States had originally been named a defendant in such action 
or suit. If the application of the United States to intervene is denied, 
the adjudication in such civil action or suit shall have no effect upon 
such lien.

(26 U.S.C. 7424)



Sec. 70.203  Discharge of liens; scope and application; judicial proceedings.

    (a) In general. A tax lien of the United States, or a title derived 
from the enforcement of a tax lien of the United States, may be 
discharged or divested under local law only in the manner prescribed in 
28 U.S.C. 2410 or in the manner prescribed in 26 U.S.C. 7425. Title 26 
U.S.C. 7425(a) contains provisions relating to the discharge of a lien 
when the United States is not joined as a party in the judicial 
proceedings described in subsection (a) of 28 U.S.C. 2410. These 
judicial proceedings are plenary in nature and proceed on formal 
pleadings. Title 26 U.S.C. 7425(b) contains provisions relating to the 
discharge of a lien or a title derived from the enforcement of a lien in 
the event of a nonjudicial sale with respect to the property involved. 
Title 26 U.S.C. 7425(c) contains special rules relating to the notice of 
sale requirements contained in 26 U.S.C. 7425(b).
    (b) Judicial proceedings--(1) In general. Title 26 U.S.C. 7425(a) 
provides rules, where the United States is not joined as a party, to 
determine the effect of a

[[Page 1037]]

judgment in any civil action or suit described in subsection (a) of 28 
U.S.C. 2410 (relating to joinder of the United States in certain 
proceedings), or a judicial sale pursuant to such a judgment, with 
respect to property on which the United States has or claims a lien 
under the provisions of 26 U.S.C. If the United States is improperly 
named as a party to a judicial proceeding, the effect is the same as if 
the United States were not joined.
    (2) Notice of lien filed when the proceeding is commenced. Where the 
United States is not properly joined as a party in the court proceeding 
and a notice of lien has been filed in accordance with 26 U.S.C. 6323(f) 
or (g) in the place provided by law for such filing at the time the 
action or suit is commenced, a judgment or judicial sale pursuant to 
such a judgment shall be made subject to and without disturbing the lien 
of the United States.
    (3) Notice of lien not filed when the proceeding is commenced. Where 
the United States is not joined as a party in the court proceeding and 
either a notice of lien has not been filed in accordance with 26 U.S.C. 
6323(f) or (g) in the palce provided by law for such filing at the time 
the action or suit is commenced, or the law makes no provision for that 
filing, a judgment or judicial sale pursuant to such a judgment shall 
have the same effect with respect to the discharge or divestment of the 
lien of the United States as may be provided with respect to these 
matters by the local law of the place where the property is situated.
    (4) Proceeds of a judicial sale. If a judicial sale of property 
pursuant to a judgment in any civil action or suit to which the United 
States is not a party discharges a lien of the United States arising 
under the provisions of 26 U.S.C., the United States may claim the 
proceeds of the sale (exclusive of costs) prior to the time that 
distribution of the proceeds is ordered. The claim of the United States 
in such a case is treated as having the same priority with respect to 
the proceeds as the lien had with respect to the property which was 
discharged from the lien by the judicial sale.

(26 U.S.C. 7425(a))



Sec. 70.204  Discharge of liens; nonjudicial sales.

    (a) In general. Title 26 U.S.C. 7425(b) contains provisions with 
respect to the effect on the interest of the United States in property 
in which the United States has or claims a lien, or a title derived from 
the enforcement of a lien, of a sale made pursuant to:
    (1) An instrument creating a lien on the property sold.
    (2) A confession of judgment on the obligation secured by an 
instrument creating a lien on the property sold, or
    (3) A statutory lien on the property sold.
    For purposes of this section, such a sale is referred to as a 
``nonjudicial sale.'' The term ``nonjudicial sale'' includes, but is not 
limited to, the divestment of the taxpayer's interest in property which 
occurs by operation of law, by public or private sale, by forfeiture, or 
by termination under provisions contained in a contract for a deed or a 
conditional sales contract. Under 26 U.S.C. 7425(b)(1), if a notice of 
lien is filed in accordance with 26 U.S.C. 6323(f) or (g), or the title 
derived from the enforcement of a lien is recorded as provided by local 
law, more than 30 days before the date of sale and the appropriate ATF 
officer is not given notice of the sale (in the manner prescribed in 
Sec. 70.205 of this part), the sale shall be made subject to and without 
disturbing the lien or title of the United States. Under 26 U.S.C. 
7425(b)(2)(C), in any case in which notice of the sale is given to the 
appropriate ATF officer not less than 25 days prior to the date of sale 
(in the manner prescribed in 26 U.S.C. 7425(c)(1)), the sale shall have 
the same effect with respect to the discharge or divestment of the lien 
or title as may be provided by local law with respect to other junior 
liens or other titles derived from the enforcement of junior liens. A 
nonjudicial sale pursuant to a lien which is junior to a tax lien does 
not divest the tax lien, even though notice of the nonjudicial sale is 
given to the appropriate ATF officer. However, under the provisions of 
26 U.S.C. 6325(b) and Sec. 70.150 of this part, designated officers may 
discharge the property from a tax lien, including a tax lien which is 
senior to another lien upon the property.

[[Page 1038]]

    (b) Date of sale. In the case of a nonjudicial sale subject to the 
provisions of 26 U.S.C. 7425(b), in order to compute any period of time 
determined with reference to the date of sale, the date of sale shall be 
determined in accordance with the following rules:
    (1) In the case of divestment of junior liens on property resulting 
directly from a public sale, the date of sale is deemed to be the date 
the public sale is held, regardless of the date under local law on which 
junior liens on the property are divested or the title to the property 
is transferred.
    (2) In the case of divestment of junior liens on property resulting 
directly from a private sale, the date of sale is deemed to be the date 
title to the property is transferred, regardless of the date junior 
liens on the property are divested under local law, and
    (3) In the case of divestment of junior liens on property not 
resulting directly from a public or private sale, the date of sale is 
deemed to be the date on which junior liens on the property are divested 
under local law. For provisions relating to the right of redemption of 
the United States, see 26 U.S.C. 7425(d) and Sec. 70.206 of this part.

(26 U.S.C. 7425(b))



Sec. 70.205  Discharge of liens; special rules.

    (a) Notice of sale requirements--(1) In general. Except in the case 
of the sale of perishable goods described in paragraph (c) of this 
section, a notice (as described in paragraph (d) of this section) of a 
nonjudicial sale shall be given, in writing by registered or certified 
mail or by personal service, not less than 25 days prior to the date of 
sale (determined under the provisions of Sec. 70.204(b) of this part), 
to the appropriate ATF officer. The provisions of 26 U.S.C. 7502 
(relating to timely mailing treated as timely filing) and 7503 (relating 
to time for performance of acts where the last day falls on Saturday, 
Sunday, or legal holiday) apply in the case of notices required to be 
made under this paragraph.
    (2) Postponement of scheduled sale--(i) Where notice of sale is 
given. In the event that notice of a sale is given in accordance with 
paragraph (a)(1) of this section, with respect to a scheduled sale which 
is postponed to a later time or date, the seller of the property is 
required to give notice of the postponement to the appropriate ATF 
officer, in the same manner as is required under local law with respect 
to other secured creditors. For example, assume that in State M local 
law requires that in the event of a postponement of a scheduled 
forclosure sale of real property, an oral announcement of the 
postponement at the place and time of the scheduled sale constitutes 
sufficient notice to secured creditors of the postponement. Accordingly, 
if at the place and time of a scheduled sale in State M an oral 
announcement of the postponement is made, the Bureau is considered to 
have notice of the postponement for the purpose of this paragraph 
(a)(2).
    (ii) Where noitce of sale is not given. In the event that:
    (A) Notice of a nonjudicial sale would not be required under 
paragraph (a)(1) of this section, if the sale were held on the 
originally scheduled date,
    (B) Because of a postponement of the scheduled sale, more than 30 
days elapse between the originally scheduled date of the sale and the 
date of the sale, and
    (C) A notice of lien with respect to the property to be sold is 
filed more than 30 days before the date of the sale, notice of the sale 
is required to be given to the appropriate ATF officer in accordance 
with the provisions of paragraph (a)(1) of this section. In any case in 
which notice of sale is required to be given with respect to a scheduled 
sale, and notice of the sale is not given, any postponement of the 
scheduled sale does not affect the rights of the United States under 26 
U.S.C. 7425(b).
    (b) Consent to sale--(1) In general. Notwithstanding the notice of 
sale provisions of paragraph (a) of this section a nonjudicial sale of 
property shall discharge or divest the property of the lien or title of 
the United States if the appropriate ATF officer consents to the sale of 
the property free of the lien or title. Pursuant to 26 U.S.C. 
7425(c)(2), where adequate protection is afforded the lien or title of 
the United States, the appropriate ATF officer

[[Page 1039]]

may, in that officer's discretion, consent with respect to the sale of 
property in appropriate cases. Such consent shall be effective only if 
given in writing and shall be subject to such limitations and conditions 
as the appropriate ATF officer may require. However, the appropriate ATF 
officer may not consent to a sale of property under this section after 
the date of sale, as determined under Sec. 70.204(b) of this part. For 
provisions relating to releasing a lien or discharging property subject 
to a tax lien, see 26 U.S.C. 6325 and Sec. 70.150 of this part.
    (2) Application for consent. Any person desiring the appropriate ATF 
officer's consent to sell property free of a tax lien or a title derived 
from the enforcement of a tax lien of the United States in the property 
shall submit to the appropriate ATF officer a written application, in 
triplicate, declaring that it is made under penalties of perjury, and 
requesting that such consent be given. The application shall contain the 
information required in the case of a noitice of sale, as set forth in 
paragraph (d)(1) of this section, and, in addition, shall contain a 
statement of the reasons why the consent is desired.
    (c) Sale of perishable goods--(1) In general. A notice (as described 
in paragraph (d) of this section) of a nonjudicial sale of perishable 
goods (as defined in paragraph (c)(2) of this section) shall be given in 
writing, by registered or certified mail or delivered by personal 
service, at any time before the sale, to the appropriate ATF officer. If 
a notice of a nonjudicial sale is timely given in the manner described 
in this paragraph the nonjudicial sale shall discharge or divest the tax 
lien, or a title derived from the enforcement of a tax lien, of the 
United States in the property. The provisions of 26 U.S.C. 7502 
(relating to timely mailing treated as timely filing) and 7503 (relating 
to time for performance of acts where the last days falls on Saturday, 
Sunday, or a legal holiday) apply in the case of notices required to be 
made under this paragraph. The seller of the perishable goods shall hold 
the proceeds (exclusive of costs) of the sale as a fund, for not less 
than 30 days after the date of the sale, subject to the liens and claims 
of the United States, in the same manner and with the same priority as 
the liens and claims of the United States had with respect to the 
property sold. If the seller fails to hold the proceeds of the sale in 
accordance with the provisions of this paragraph and if the appropriate 
ATF officer asserts a claim to the proceeds within 30 days after the 
date of sale, the seller shall be personally liable to the United States 
for an amount equal to the value of the interest of the United States in 
the fund. However, even if the proceeds of the sale are not so held by 
the seller, but all the other provisions of this paragraph are 
satisfied, the buyer of the property at the sale takes the property free 
of the liens and claims of the United States. In the event of a 
postponement of the scheduled sale of perishable goods, the seller is 
not required to notify the appropriate ATF officer of the postponement. 
For provisions relating to releasing a lien or discharging property 
subject to a tax lien, see 26 U.S.C. 6325 and Sec. 70.150 of this part.
    (2) Definition of perishable goods. For the purpose of this 
paragraph, the term ``perishable goods'' means any tangible personal 
property which, in the reasonable view of the person selling the 
property, is liable to perish or become greatly reduced in price or 
value by keeping, or cannot be kept without great expense.
    (d) Forfeiture of land sales contract. For purposes of paragraph (a) 
of this section, a nonjudicial sale of property includes any forfeiture 
of a land sales contract.
    (e) Content of notice of sale--(1) In general. With respect to a 
noitice of sale described in paragraph (a) or (c) of this section, the 
notice will be considered adequate if it contains the information 
described in paragraph (d)(1) (i), (ii), (iii), and (iv) of this 
section.
    (i) The name and address of the person submitting the notice of 
sale;
    (ii) A copy of each Notice of Federal Tax Lien (ATF Form 5651.2) 
affecting the property to be sold, or the following information as shown 
on each such Notice of Federal Tax Lien:
    (A) The initiating office named thereon,
    (B) The name and address of the taxpayer, and

[[Page 1040]]

    (C) The date and place of filing of the notice;
    (iii) With respect to the property to be sold the following 
information:
    (A) A detailed description, including location of the property 
affected by the notice (in the case of real property, the street 
address, city, and State and the legal description contained in the 
title or deed to the property and, if available, a copy of the abstract 
of title),
    (B) The date, time, place, and terms of proposed sale of the 
property, and
    (C) In case of a sale of perishable property described in paragraph 
(c) of this section, a statement of the reasons why the property is 
believed to be perishable; and
    (iv) The approximate amount of the principal obligation, including 
interest, secured by the lien sought to be enforced and a description of 
the other expenses (such as legal expenses, selling costs, etc.) which 
may be charged against the sale proceeds.
    (2) Inadequate notice. Except as otherwise provided in this 
subparagraph, a notice of sale described in paragraph (a) of this 
section which does not contain the information described in paragraph 
(d)(1) of this section shall be considered inadequate by the appropriate 
ATF officer. If the appropriate ATF officer determines that the notice 
is inadequate, that officer will give written notification of the items 
of information which are inadequate to the person who submitted the 
notice. A notice of sale which does not contain the name and address of 
the person submitting such notice shall be considered to be inadequate 
for all purposes without notification of any specific inadequacy. In any 
case where a notice of sale, does not contain the information required 
under paragraph (d)(1)(ii) of this section with respect to a Notice of 
Federal Tax Lien, the appropriate ATF officer may give written 
notification of such omission without specification of any other 
inadequacy and such notice of sale shall be considered inadequate for 
all purposes. In the event the appropriate ATF officer gives 
notification that the notice of sale is inadequate, a notice complying 
with the provisions of this section (including the requirement that the 
notice be given not less than 25 days prior to the sale in the case of a 
notice described in paragraph (a) of this section) must be given. 
However, in accordance with the provisions of paragraph (b)(1) of this 
section, in such a case the appropriate ATF officer may, in that 
officer's discretion, consent to the sale of the property free of the 
lien or title of the United States even though notice of the sale is 
given less than 25 days prior to the sale. In any case where the person 
who submitted a timely notice which indicates the person's name and 
address does not receive, more than 5 days prior to the date of the 
sale, written notification from the appropriate ATF officer that the 
notice is inadequate, the notice shall be considered adequate for 
purposes of this section.
    (3) Acknowledgment of notice. If a notice of sale described in 
paragraph (a) or (c) of this section is submitted in duplicate to the 
appropriate ATF officer with a written request that receipt of the 
notice be acknowledged and returned to the person giving the notice, 
this request will be honored by the appropriate ATF officer. The 
acknowledgment by the appropriate ATF officer will indicate the date and 
time of the receipt of the notice.
    (4) Disclosure of adequacy of notice. The appropriate ATF officer is 
authorized to disclose, to any person who has a proper interest, whether 
an adequate notice of sale was given under paragraph (d)(1) of tis 
section insofar as disclosure is authorized under 26 U.S.C. 6103. Any 
person desiring this information should submit to the appropriate ATF 
officer a written request which clearly describes the property sold or 
to be sold, identifies the applicable notice of lien, gives the reasons 
for requesting the information, and states the name and address of the 
person making the request.

(26 U.S.C. 7425(c))

[T.D. ATF-301, 55 FR 47634, Nov. 14, 1990, as amended by T.D. ATF-450, 
66 FR 29027, May 29, 2001]



Sec. 70.206  Discharge of liens; redemption by United States.

    (a) Right to redeem--(1) In general. In the case of a nonjudicial 
sale of real property to satisfy a lien prior to the tax lien or a title 
derived from the enforcement of a tax lien, the appropriate

[[Page 1041]]

ATF officer may redeem the property within the redemption period (as 
described in paragraph (a)(2) of this section). The right of redemption 
of the United States exists under 26 U.S.C. 7425(d) even though a 
consent to the sale has been made under 26 U.S.C. 7425(c)(2) and 
Sec. 70.205(b) of this part. For purposes of this section, the term 
``nonjudicial sale'' shall have the same meaning as used in 
Sec. 70.204(a) of this part.
    (2) Redemption period. For purposes of this section, the redemption 
period shall be:
    (i) The period beginning with the date of the sale (as determined 
under Sec. 70.204(b)) and ending with the 120th day after such date, or
    (ii) The period for redemption of real property allowable with 
respect to other secured creditors, under the local law of the place 
where the real property is located, whichever expires later.

Which ever period is applicable, 26 U.S.C. 7425 and this section shall 
govern the amount to be paid and the procedure to be followed.
    (3) Limitations. In the event a sale does not ultimately discharge 
the property from tax lien (whether by reason of local law or the 
provisions of 26 U.S.C. 7425(b)), the provisions of this section do not 
apply because the tax lien will continue to attach to the property after 
the sale. In a case in which the Bureau is not entitled to a notice of 
sale under 26 U.S.C. 7425(b) and Sec. 70.205 of this part, the United 
States does not have a right of redemption under 26 U.S.C. 7425(d). 
However, in such a case, if a tax lien has attached to the property at 
the time of sale, the United States has the same right of redemption, if 
any, which is afforded similar creditors under the local law of the 
place in which the property is situated.
    (b) Amount to be paid--(1) In general. In any case in which an 
appropriate ATF officer exercises the right to redeem real property 
under 26 U.S.C. 7425(d), the amount to be paid is the sum of the 
following amounts:
    (i) The actual amount paid for the property (as determined under 
paragraph (b)(2) of this section) being redeemed (which, in the case of 
a purchaser who is the holder of the lien being foreclosed, shall 
include the amount of the obligation secured by such lien to the extent 
legally satisfied by reason of the sale);
    (ii) Interest on the amount paid (described in paragraph (b)(1)(i) 
of this section) at the sale by the purchaser of the real property 
computed at the rate of 6 percent per annum for the period from the date 
of the sale (as determined under Sec. 70.204(b) of this part) to the 
date of redemption;
    (iii) The amount, if any, equal to the excess of the expenses 
necessarily incurred to maintain such property (as determined under 
paragraph (b)(3) of this section) by the purchaser (and the purchaser's 
successor in interest, if any) over the income from such property 
realized by the purchaser (and the purchaser's successor in interest, if 
any) plus a reasonable rental value of such property (to the extent the 
property is used by or with the consent of the purchaser or the 
purchaser's successor in interest or is rented at less than its 
reasonable rental value); and
    (iv) The amounts, if any, of a payment made by the purchaser or the 
purchaser's successor in interest after the foreclosure sale to a holder 
of a senior lien (to the extent provided under paragraph (b)(4) of this 
section).
    (2) Actual amount paid. (i) The actual amount paid for property by a 
purchaser, other than holder of the lien being foreclosed, is the amount 
paid by the purchaser at the sale. For purposes of this paragraph, the 
amount paid by the purchaser at the sale includes deferred payments upon 
the bid price. The actual amount paid does not include costs and 
expenses incurred prior to the foreclosure sale by the purchaser except 
to the extent such expenses are included in the amount bid and paid for 
the property. For example, the actual amount paid does not normally 
include the expenses of the purchaser such as title searches, 
professional fees, or interest on debt incurred to obtain funds to 
purchase the property.
    (ii) In the case of a purchaser who is the holder of the lien being 
foreclosed, the actual amount paid is the sum of:
    (A) The amount of the obligation secured by such lien to the extent 
legally satisfied by reason of the sale and

[[Page 1042]]

    (B) Any additional amount bid and paid at the sale.

For purposes of this section, a purchaser who acquires title as a result 
of a nonjudicial foreclosure sale is treated as the holder of the lien 
being foreclosed if a lien (or any interest reserved, created, or 
conveyed as security for the payment of a debt or fulfillment of other 
obligation) held by the purchaser is partially or fully satisfied by 
reason of the foreclosure sale. For example, a person whose title is 
derived from a tax deed issued under local law shall be treated as a 
purchaser who is the holder of the lien foreclosed in a case where a tax 
certificate, evidencing a lien on the property arising from the payment 
of property taxes, ripens into title. The amount paid by a purchaser at 
the sale includes deferred payments upon any portion of the bid price 
which is in excess of the amount of the lien being foreclosed. The 
actual amount paid does not include costs and expenses incurred prior to 
the foreclosure sale by the purchaser except to the extent such expenses 
are included in the amount of the lien being foreclosed which is legally 
satisfied by reason of the sale or in the amount bid and paid at the 
sale. Where the lien being foreclosed attaches to other property not 
subject to the foreclosure sale, the amount legally satisfied by reason 
of the sale does not include the amount of such lien that attaches to 
the other property. However, for purposes of the preceding sentences, 
the amount of the lien that attaches to the other property shall be 
considered to be equal to the amount by which the value of the other 
property exceeds the amount of any other senior lien on that property. 
Where, after the sale, the holder of the lien being foreclosed has the 
right to the unpaid balance of the amount due the holder, the amount 
legally satisfied by reason of the sale does not include the amount of 
such lien to the extent a deficiency judgment may be obtained therefor. 
However, for purposes of the preceding sentence, an amount, with respect 
to which the holder of the lien being foreclosed would otherwise have a 
right to a deficiency judgment, shall be considered to be legally 
satisfied by reason of the foreclosure sale to the extent that the 
holder has waived the holder's right to a deficiency judgment prior to 
the foreclosure sale. For this purpose, the waiver must be in writing 
and legally binding upon the foreclosing lienholder as of the time the 
sale is concluded. If, prior to the foreclosure, payments have been made 
by the foreclosing lienholder to a holder of a superior lien, the 
payments are included in the actual amount paid to the extent they give 
rise to an interest which is legally satisfied by reason of the 
foreclosure sale.
    (3) Excess expenses incurred by purchaser. (i) Expenses necessarily 
incurred in connection with the property after the foreclosure sale and 
before redemption by the United States are taken into account in 
determining if there are excess expenses payable under paragraph 
(b)(1)(iii) of this section. Expenses incurred by the purchaser prior to 
the foreclosure sale are not considered under paragraph (b)(3) of this 
section. (See paragraph (b)(2)(ii) of this section for circumstances 
under which such expenses may be included in the amount to be paid.) 
Expenses necessarily incurred in connection with the property include, 
for example, rental agent commissions, repair and maintenance expenses, 
utilities expenses, legal fees incurred after the foreclosure sale and 
prior to redemption in defending the title acquired through the 
foreclosure sale, and a proportionate amount of casualty insurance 
premiums and ad valorem taxes. Improvements made to the property are not 
considered as an expense unless the amounts incurred for such 
improvements are necessarily incurred to maintain the property.
    (ii) At any time prior to the expiration of the redemption period 
applicable under paragraph (a)(2) of this section, the appropriate ATF 
officer may, by certified or registered mail or hand delivery, request a 
written itemized statement of the amount claimed by the purchaser or the 
purchaser's successor in interest to be payable under paragraph 
(b)(1)(iii) of this section. Unless the purchaser or the purchaser's 
successor in interest furnishes the written itemized statement within 15 
days after the request is made by the

[[Page 1043]]

appropriate ATF officer, it shall be presumed that no amount is payable 
for expenses in excess of income and the Bureau shall tender only the 
amount otherwise payable under paragraph (b)(1) of this section. If a 
purchaser or the purchaser's successor in interest has failed to furnish 
the written itemized statement within 15 days after the request therefor 
is made by the appropriate ATF officer, or there is a disagreement as to 
the amount properly payable under paragraph (b)(1)(iii) of this section, 
a payment for excess expenses shall be made after the redemption within 
a reasonable time following the verification by the appropriate ATF 
officer of a written itemized statement submitted by the purchaser or 
the purchaser's successor in interest or the resolution of the 
disagreement as to the amount properly payable for excess expenses.
    (4) Payments made by purchaser or the purchaser's successor in 
interest to a senior lienor. (i) The amount to be paid upon a redemption 
by the United States shall include the amount of a payment made by the 
purchaser or the purchaser's successor in interest to a holder of a 
senior lien to the extent a request for the reimbursement thereof (made 
in accordance with paragraph (b)(4)(ii) of this section) is approved as 
provided under paragraph (b)(4)(iii) of this section. This paragraph 
applies only to a payment made after the foreclosure sale and before the 
redemption to a holder of a lien that was, immediately prior to the 
foreclosure sale, superior to the lien foreclosed. A payment of 
principal or interest to a senior lienor shall be taken into account. 
Generally, the portion, if any, of a payment which is to be held in 
escrow for the payment of an expense, such as hazard insurance or real 
property taxes, is not considered under this paragraph. However, a 
payment by the escrow agent of a real property tax or special assessment 
lien, which was senior to the lien foreclosed, shall be considered to be 
a payment made by the purchaser or the purchaser's successor in interest 
for purposes of this paragraph. With respect to real property taxes 
assessed after the foreclosure sale, see paragraph (b)(3)(i) of this 
section, relating to excess expenses incurred by the purchaser.
    (ii) Before the expiration of the redemption period applicable under 
paragraph (a)(2) of this section, the appropriate ATF officer shall, in 
any case where a redemption is contemplated, send notice to the 
purchaser (or the purchaser's successor in interest of record) by 
certified or registered mail or hand delivery of the right under 
paragraph (b)(4) of this section to request reimbursement (payable in 
the event the right to redeem under 26 U.S.C. 7425(d) is exercised) for 
a payment made to a senior lienor. No later than 15 days after the 
notice from the appropriate ATF officer is sent, the request for 
reimbursement shall be mailed or delivered to the office specified in 
such notice and shall consist of:
    (A) A written itemized statement, signed by the claimant, of the 
amount claimed with respect to a payment made to a senior lienor, 
together with the supporting evidence requested in the notice from the 
appropriate ATF officer, and
    (B) A waiver or other document that will be effective upon 
redemption by the United States to discharge the property from, or 
transfer to the United States, any interest in or lien on the property 
that may arise under local law with respect to the payment made to a 
senior lienor.

Upon a showing of reasonable cause, an appropriate ATF officer may, in 
that official's discretion and at any time before the expiration of the 
applicable period for redemption, grant an extension for a reasonable 
period of time to submit, amend, or supplement a request for 
reimbursement. Unless a request for reimbursement is timely submitted 
(determined with regard to any extension of time granted), no amount 
shall be payable to the purchaser or the purchaser's successor in 
interest on account of a payment made to a senior lienor if the right to 
redeem under 26 U.S.C. 7425(d) is exercised. A waiver or other document 
submitted pursuant to paragraph (b)(4)(ii) of this section shall be 
treated as effective only to the extent of the amount included in the 
redemption price under this paragraph. If the right to redeem is not 
exercised or

[[Page 1044]]

a request for reimbursement is withdrawn, the appropriate ATF officer 
shall, by certified or registered mail or hand delivery, return to the 
purchaser or the purchaser's successor any waiver or other document 
submitted pursuant to paragraph (b)(4)(ii) of this section as soon as is 
practicable.
    (iii) A request for reimbursement submitted in accordance with 
paragraph (b)(4)(ii) of this section shall be considered to be approved 
for the total amount claimed by the purchaser, and payable in the event 
the right to redeem is exercised, unless the appropriate ATF officer 
sends notice to the claimant, by certified or registered mail or hand 
delivery, of the denial of the amount claimed within 30 days after 
receipt of the request of 15 days before expiration of the applicable 
period for redemption, whichever is later. The notification of denial 
shall state the grounds for denial. If such notice of denial is given, 
the request for reimbursement for a payment made to a senior lienor 
shall be treated as having been withdrawn by the purchaser or the 
purchaser's successor and the Bureau shall tender only the amount 
otherwise payable under paragraph (b)(1) of this section. If a request 
for reimbursement is treated as having been withdrawn under the 
preceding sentence, payment for amounts described in paragraph (b)(4) of 
this section may, in the discretion of the appropriate ATF officer, be 
made after the redemption upon the resolution of the disagreement as to 
the amount properly payable under paragraph (b)(1)(iv) of this section.
    (c) Certificate of redemption--(1) In general. If an appropriate ATF 
officer exercises the right of redemption of the United States described 
in paragraph (a) of this section, the appropriate ATF officer shall 
apply to the officer designated by local law, if any, for the documents 
necessary to evidence the fact of redemption and to record title to the 
redeemed property in the name of the United States. If no such officer 
has been designated by local law, or if the officer designated by local 
law fails to issue the necessary documents, the appropriate ATF officer 
is authorized to issue a certificate of redemption for the property 
redeemed by the United States.
    (2) Filing. The appropriate ATF officer shall, without delay, cause 
either the documents issued by the local officer or the certificate of 
redemption executed by the appropriate ATF officer to be filed with the 
local office where certificates of redemption are generally filed. If a 
certificate of redemption is issued by the appropriate ATF officer and 
if the State in which the real property redeemed by the United States is 
situated has no office with which certificates of redemption may be 
filed, the appropriate ATF officer shall file the certificate of 
redemption in the office of the clerk of the United States district 
court for the judicial district in which the redeemed property is 
situated.
    (3) Effect of certificate of redemption. A certificate of redemption 
executed pursuant to paragraph (c)(1) of this section, shall constitute 
prima facie evidence of the regularity of the redemption. When a 
certificate of redemption is recorded, it shall transfer to the United 
States all the rights, title, and interest in and to the redeemed 
property acquired by the person, from whom the appropriate ATF officer 
redeemed the property, by virtue of the sale of the property. Therefore, 
if under local law the purchaser takes title free of liens junior to the 
lien of the foreclosing lienholder, the United States takes the title 
free of such junior liens upon redemption of the property. If a 
certificate of redemption has been erroneously prepared and filed 
because the redemption was not effective, the appropriate ATF officer 
shall issue a document revoking such certificate of redemption and such 
document shall be conclusively binding upon the United States against a 
purchaser of the property or a holder of a lien upon the property.
    (4) Application for release of right of redemption. Upon application 
of a party with a proper interest in the real property sold in a 
nonjudicial sale described in 26 U.S.C. 7425(b) and Sec. 70.204 of this 
part, which real property is subject to the right of redemption of the 
United States described in this section, the appropriate ATF officer 
may, in that officer's discretion, release the

[[Page 1045]]

right of redemption with respect to the property. The application for 
the release must be submitted in writing to an appropriate ATF officer 
and must contain such information as the appropriate ATF officer may 
require. If the appropriate ATF officer determines that the right of 
redemption of the United States is without value, no amount shall be 
required to be paid with respect to the release of the right of 
redemption.

(26 U.S.C. 7425(d))

[T.D. ATF-301, 55 FR 47634, Nov. 14, 1990, as amended by T.D. ATF-450, 
66 FR 29027, May 29, 2001]



Sec. 70.207  Civil actions by persons other than taxpayers.

    (a) Actions permitted--(1) Wrongful levy. If a levy has been made on 
property, or property has been sold pursuant to a levy, any person 
(other than the person against whom is assessed the tax out of which 
such levy arose) may bring a civil action against the United States in a 
district court of the United States based upon such person's claim:
    (i) That the person has an interest in, or a lien on, such property 
which is senior to the interest of the United States; and
    (ii) That such property was wrongfully levied upon.

No action is permitted under 26 U.S.C. 7426(a)(1) unless there has been 
a levy upon the property claimed.
    (2) Surplus proceeds. If property has been sold pursuant to levy, 
any person (other than the person against whom is assessed the tax out 
of which such levy arose) may bring a civil action against the United 
States in a district court of the United States based upon the claim 
that the person:
    (i) Has an interest in or lien on such property junior to that of 
the United States; and
    (ii) Is entitled to the surplus proceeds of such sale.
    (3) Substituted sale proceeds. Any person who claims to be legally 
entitled to all or any part of the amount which is held as a fund from 
the sale of property pursuant to an agreement described in 26 U.S.C. 
6325(b)(3) may bring a civil action against the United States in a 
district court of the United States to obtain the relief provided by 26 
U.S.C. 7426(b)(4). It is not necessary that the claimant be a party to 
the agreement which provides for the substitution of the sale proceeds 
for the property subject to the lien.
    (b) Adjudication--(1) Wrongful levy. If the court determines that 
property has been wrongfully levied upon, the court may:
    (i) Grant an injunction to prohibit the enforcement of such levy or 
to prohibit a sale of such property if such sale would irreparably 
injure rights in the property which are superior to the rights of the 
United States in such property; or
    (ii) Order the return of specific property if the United States is 
in possession of such property; or
    (iii) Grant a judgment for the amount of money levied upon, with 
interest thereon at the overpayment rate established under 26 U.S.C. 
6621 from the date that the officer who made the levy receives the money 
wrongfully levied upon to the date of payment of such judgment, or
    (iv) Grant a judgment for an amount not exceeding the amount 
received by the United States from the sale of such property (which, in 
the case of property declared purchased by the United States at a sale, 
shall be the greater of the minimum amount determined pursuant to 26 
U.S.C. 6335(e) or the amount received by the United States from the 
resale of such property), or the fair market value of such property 
immediately before the levy, with interest thereon at the overpayment 
rate established under 26 U.S.C. 6621 from the date of the sale of the 
property to the date of payment of such judgment.

For purposes of paragraph (b)(1) of this section, a levy is wrongful 
against a person (other than the taxpayer against whom the assessment 
giving rise to the levy is made), if the levy is upon property exempt 
from levy under 26 U.S.C. 6334, or the levy is upon property in which 
the taxpayer had no interest at the time the lien arose or thereafter, 
or the levy is upon property with respect to which such person is a 
purchaser against whom the lien is invalid under 26 U.S.C. 6323 or 
6324(a)(2) or (b), or the levy or sale pursuant to

[[Page 1046]]

levy will or does effectively destroy or otherwise irreparably injure 
such person's interest in the property which is senior to the Federal 
tax lien. A levy may be wrongful against a holder of a senior lien upon 
the taxpayer's property under certain circumstances although legal 
rights to enforce the holder's interest survive the levy procedure. For 
example, the levy may be wrongful against such a person if the property 
is an obligation which is collected pursuant to the levy rather than 
sold and nothing thereafter remains for the senior lienholder, or the 
property levied upon is of such a nature that when it is sold at a 
public sale the property subject to the senior lien is not available for 
the senior lienholder as a realistic source for the enforcement of the 
holder's interest. Some of the factors which should be taken into 
account in determining whether property remains or will remain a 
realistic source from which the senior lienholder may realize collection 
are: The nature of the property, the number of purchasers, the value of 
each unit sold or to be sold, whether, as a direct result of the 
distraint sale, the costs of realizing collection from the security have 
or will be so substantially increased as to render the security 
substantially valueless as a source of collection, and whether the 
property subject to the distraint sale constitutes substantially all of 
the property available as security for the payment of the indebtedness 
to the senior lienholder.
    (2) Surplus proceeds. If the court determines that the interest or 
lien of any party to an action under 26 U.S.C. 7426 was transferred to 
the proceeds of a sale of the property, the court may grant a judgment 
in an amount equal to all or any part of the amount of the surplus 
proceeds of such sale. The term ``surplus proceeds'' means property 
remaining after application of the provisions of 26 U.S.C. 6342(a).
    (3) Substituted sale proceeds. If the court determines that a party 
has an interest in or lien on the amount held as a fund pursuant to an 
agreement described in 26 U.S.C. 6325(b)(3), the court may grant a 
judgment in an amount equal to all or any part of the amount of such 
fund.

(26 U.S.C. 7426)



Sec. 70.208  Review of jeopardy assessment or jeopardy levy procedures; information to taxpayer.

    Not later than 5 days after the day on which an assessment is made 
under 26 U.S.C. 6862 or when a levy is made less than 30 days after the 
notice and demand described in 26 U.S.C 6331(a), the officer who 
authorized the assessment or levy shall provide the taxpayer a written 
statement setting forth the information upon which that official relies 
in authorizing such assessment or levy.

(26 U.S.C. 7429(a)(1))



Sec. 70.209  Review of jeopardy assessment or levy procedures; administrative review.

    (a) Request for administrative review. Any request for the review of 
a jeopardy assessment or levy provided for by 26 U.S.C. 7429(a)(2) shall 
be filed with the officer who authorized the assessment or levy, within 
30 days after the statement described in Sec. 70.208 of this part is 
given to the taxpayer. However, if no statement is given within the 5-
day period described in Sec. 70.208, any request for review of the 
jeopardy assessment shall be filed within 35 days after the date the 
assessment is made. Such request shall be in writing, shall state fully 
the reasons for the request, and shall be supported by such evidence as 
will enable the reviewing officer to make the redetermination described 
in 26 U.S.C. 7429(a)(3).
    (b) Administrative review. In determining whether the assessment or 
levy is reasonable and the amount assessed appropriate, the reviewing 
officer shall take into account not only information available at the 
time the assessment is made but also information which subsequenbtly 
becomes available.

(26 U.S.C. 7429(a)(2))



Sec. 70.210  Review of jeopardy assessment or levy procedures; judicial action.

    (a) Time for bringing judicial action. An action for judicial review 
described in 26 U.S.C. 7429(b) may be instituted by the taxpayer during 
the period beginning on the earlier of:

[[Page 1047]]

    (1) The date of the reviewing officer notifies the taxpayer of the 
determination described in 26 U.S.C. 7429(a)(3); or
    (2) The 16th day after the request described in 26 U.S.C. 7429(a)(2) 
was made by the taxpayer; and ending on the 90th day thereafter.
    (b) Extension of the period for judicial review. The U.S. Government 
may not seek an extension of the 20-day period described in 26 U.S.C. 
7429(b)(2), but it may join with the taxpayer in seeking such an 
extension.

(26 U.S.C. 7429)



Sec. 70.213  Repayments to officers or employees.

    The appropriate ATF officer is authorized to repay to any officer or 
employee of the Bureau the full amount of such sums of money as may be 
recovered against such officer or employee in any court for any taxes 
imposed under provisions of 26 U.S.C. enforced and administered by the 
Bureau collected by such officer or employee with the cost and expense 
of suit, and all damages and costs recovered against any officer or 
employee of the Bureau in any suit brought against such officer or 
employee by reason of anything done in the official performance of 
duties under the provisions of 26 U.S.C. enforced and administered by 
the Bureau.

(26 U.S.C. 7423)

                               Limitations

                Limitations on Assessment and Collection



Sec. 70.221  Period of limitations upon assessment.

    (a) The amount of any tax imposed by the Internal Revenue Code 
(other than a tax collected by means of stamps) shall be assessed within 
3 years after the return was filed. For rules applicable in cases where 
the return is filed prior to the due date thereof, see section 6501(b) 
of the Internal Revenue Code. In the case of taxes payable by stamps, 
assessment shall be made at any time after the tax becomes due and 
before the expiration of 3 years after the date on which any part of the 
tax was paid. For exceptions and additional rules, see subsections (b) 
and (c) of section 6501 of the Internal Revenue Code.
    (b) No proceeding in court without assessment for the collection of 
any tax shall be begun after the expiration of the applicable period for 
the assessment of such tax.

(26 U.S.C. 6501)

[T.D. ATF-251, 52 FR 19314, May 22, 1987. Redesignated by T.D. ATF-301, 
55 FR 47606, Nov. 14, 1990]



Sec. 70.222  Time return deemed filed for purposes of determining limitations.

    (a) Early Return. Any return filed prior to the last day prescribed 
by law or regulations for the filing thereof (determined without regard 
to any extension of time for filing) shall be considered as filed on 
such last day.
    (b) Returns executed by appropriate ATF officers. The execution of a 
return by an appropriate ATF officer under the authority of section 
6020(b) of the Internal Revenue Code does not start the running of the 
statutory period of limitations on assessment and collection.

(26 U.S.C. 6501)

[T.D. ATF-251, 52 FR 19314, May 22, 1987. Redesignated by T.D. ATF-301, 
55 FR 47606, Nov. 14, 1990; T.D. ATF-450, 66 FR 29028, May 29, 2001]



Sec. 70.223  Exceptions to general period of limitations on assessment and collection.

    (a) False return. In the case of a false or fraudulent return with 
intent to evade any tax, the tax may be assessed, or a proceeding in 
court for the collection of such tax may be begun without assessment, at 
any time after such false or fraudulent return is filed.
    (b) Willful attempt to evade tax. In the case of a willful attempt 
in any manner to defeat or evade any tax imposed by provisions of 26 
U.S.C. enforced and administered by the Bureau, the tax may be assessed, 
or a proceeding in court for the collection of such tax may be begun 
without assessment, at any time.
    (c) No return. In the case of a failure to file a return, the tax 
may be assessed, or a proceeding in court for the collection of such tax 
may be begun

[[Page 1048]]

without assessment, at any time after the date prescribed for filing the 
return.
    (d) Extension by agreement. The time prescribed by 26 U.S.C. 6501 
for the assessment of any tax imposed by provisions of 26 U.S.C. 
enforced and administered by the Bureau may, prior to the expiration of 
such time, be extended for any period of time agreed upon in writing by 
the taxpayer and the appropriate ATF officer. The extension shall become 
effective when the agreement has been executed by both parties. The 
period agreed upon may be extended by subsequent agreements in writing 
made before the expiration of the period previously agreed upon.

(26 U.S.C. 6501)

[T.D. ATF-251, 52 FR 19314, May 22, 1987. Redesignated and amended by 
T.D. ATF-301, 55 FR 47606, 47641, Nov. 14, 1990; T.D. ATF-331, 57 FR 
40328, Sept. 3, 1992]



Sec. 70.224  Collection after assessment.

    (a) Length of period--(1) General rule. In any case in which a tax 
has been assessed within the statutory period of limitation properly 
applicable thereto, a proceeding in court to collect such tax may be 
begun, or levy for the collection of such tax may be made, within 10 
years after the assessment thereof.
    (2) Extension by agreement. (i) The 10-year period of limitation on 
collection after assessment of any tax may, prior to the expiration 
thereof, be extended for any period of time agreed upon in writing by 
the taxpayer and the appropriate ATF officer. Whenever necessary to 
protect the revenue, such officer may also execute a written agreement 
with the taxpayer to extend the period of limitation. The extension 
becomes effective upon execution of the agreement by both the taxpayer 
and such officer.
    (ii) The period of limitation on collection after assessment of any 
tax (including any extension of such period) may be extended after the 
expiration thereof if there has been a levy on any part of the 
taxpayer's property prior to such expiration and if the extension is 
agreed upon in writing prior to a release of the levy under the 
provisions of 26 U.S.C. 6343. An extension under this paragraph has the 
same effect as an agreement made prior to the expiration of the period 
of limitation on collection after assessment, and during the period of 
the extension collection may be enforced as to all property or rights to 
property owned by the taxpayer whether or not seized under the levy 
which was released.
    (iii) Any period agreed upon under the provisions of paragraph 
(a)(1) of this section may be extended by subsequent agreements in 
writing made before the expiration of the period previously agreed upon.
    (3) If a timely proceeding in court for the collection of a tax is 
commenced, the period during which such tax may be collected by levy 
shall be extended and shall not expire until the liability for the tax 
(or a judgment against the taxpayer arising from such liability) is 
satisfied or becomes unenforceable.
    (b) Date when levy is considered made. The date on which a levy on 
property or rights to property is made is the date on which the notice 
of seizure provided in 26 U.S.C. 6335(a) is given.

(26 U.S.C. 6502)

[T.D. ATF-301, 55 FR 47641, Nov. 14, 1990, as amended by T.D. ATF-450, 
66 FR 29028, May 29, 2001]



Sec. 70.225  Suspension of running of period of limitation; assets of taxpayer in control or custody of court.

    Where all or substantially all of the assets of a taxpayer are in 
the control or custody of the court in any proceeding before any court 
of the United States, or any State of the United States, or the District 
of Columbia, the period of limitations on collection after assessment 
prescribed in 26 U.S.C. 6502 is suspended with respect to the 
outstanding amount due on the assessment for the period such assets are 
in the control or custody of the court, and for 6 months thereafter.

(26 U.S.C. 6503)

[T.D. ATF-301, 55 FR 47642, Nov. 14, 1990]



Sec. 70.226  Suspension of running of period of limitation; taxpayer outside of United States.

    The running of the period of limitations on collection after 
assessment prescribed in 26 U.S.C. 6502 (relating to

[[Page 1049]]

collection after assessment) is suspended for the period during which 
the taxpayer is absent from the United States if such period is a 
continuous period of absence from the United States extending for 6 
months or more. In a case where the running of the period of limitations 
has been suspended under the first sentence of this paragraph and at the 
time of the taxpayer's return to the United States the period of 
limitations would expire before the expiration of 6 months from the date 
of the taxpayer's return, the period of limitations shall not expire 
until after 6 months from the date of the taxpayer's return. The 
taxpayer will be deemed to be absent from the United States for purposes 
of this section if the taxpayer is generally and substantially absent 
from the United States, even though the taxpayer makes casual temporary 
visits during the period.

(26 U.S.C. 6503)

[T.D. ATF-301, 55 FR 47642, Nov. 14, 1990]



Sec. 70.227  Suspension of running of period of limitation; wrongful seizure of property of third party.

    The running of the period of limitations on collection after 
assessment prescribed in 26 U.S.C. 6502 (relating to collection after 
assessment) shall be suspended for a period equal to a period beginning 
on the date property (including money) is wrongfully seized or received 
by an appropriate ATF officer and ending on the date 30 days after the 
date on which the appropriate ATF officer returns the property pursuant 
to 26 U.S.C. 6343(b) (relating to authority to return property) or the 
date 30 days after the date on which a judgment secured pursuant to 26 
U.S.C. 7426 (relating to civil actions by persons other than taxpayers) 
with respect to such property becomes final. The running of the period 
of limitations on collection after assessment shall be suspended under 
this section only with respect to the amount of such assessment which is 
equal to the amount of money or the value of specific property returned.

(26 U.S.C. 6503)

[T.D. ATF-301, 55 FR 47642, Nov. 14, 1990, as amended by T.D. ATF-450, 
66 FR 29028, May 29, 2001]

                          Limitations on Liens

    Source: Sections 70.231 through 70.234 added by T.D. ATF-301, 55 FR 
47642, Nov. 14, 1990, unless otherwise noted.



Sec. 70.231  Protection for certain interests even though notice filed.

    (a) Securities. Even though a notice of a lien imposed by 26 U.S.C. 
6321 is filed in accordance with Sec. 70.148 of this part, the lien is 
not valid with respect to a security (as defined in Sec. 70.143(d) of 
this part) against:
    (1) A purchaser (as defined in Sec. 70.143(f) of this part) of the 
security who at the time of purchase did not have actual notice or 
knowledge (as defined in Sec. 70.144(a) of this part) of the existence 
of the lien;
    (2) A holder of a security interest (as defined in Sec. 70.143(a) of 
this part) in the security who did not have actual notice or knowledge 
(as defined in Sec. 70.144(a) of this part) of the existence of the lien 
at the time the security interest came into existence or at the time 
such security interest was acquired from a previous holder for a 
consideration in money or money's worth (as defined in Sec. 70.143(a) of 
this part); or
    (3) A transferee of an interest protected under paragraph (a) (1) or 
(2) of this section to the same extent the lien is invalid against the 
transferor to the transferee. For purposes of this paragraph, no person 
can improve that person's position with respect to the lien by 
reacquiring the interest from an intervening purchaser or holder of a 
security interest against whom the lien is invalid.
    (b) Motor vehicles--(1) In general. Even though a notice of a lien 
imposed by 26 U.S.C. 6321 is filed in accordance with Sec. 70.148 of 
this part, the lien is not valid against a purchaser (as defined in 
Sec. 70.143(f) of this part) of a motor vehicle (as defined in 
Sec. 70.143(c) of this part) if:
    (i) At the time of purchase, the purchaser did not have actual 
notice or knowledge (as defined in Sec. 70.144(a) of this part) of the 
existence of the lien, and
    (ii) Before the purchaser obtains such notice or knowledge, the 
purchaser has acquired actual possession of the motor

[[Page 1050]]

vehicle and has not thereafter relinquished actual possession to the 
seller or seller's agent.
    (2) Cross reference. For provisions relating to additional 
circumstances in which the lien imposed by 26 U.S.C. 6321 may not be 
valid against the purchaser of tangible personal property (including a 
motor vehicle) purchased at retail, see paragraph (c) of this section.
    (c) Personal property purchased at retail--(1) In general. Even 
though a notice of a lien imposed by 26 U.S.C. 6321 is filed (with 
respect to any tax imposed under the provisions of 26 U.S.C. enforced 
and administered by the Bureau) in accordance with Sec. 70.148 of this 
part, the lien is not valid against a purchaser (as defined in 
Sec. 70.143(f) of this part) of tangible personal property purchased at 
a retail sale (as defined in paragraph (c)(2) of this section) unless at 
the time of purchase the purchaser intends the purchase to (or knows 
that the purchase will) hinder, evade, or defeat the collection of any 
tax imposed by the provisions of 26 U.S.C. enforced and administered by 
the Bureau.
    (2) Definition of retail sale. For purposes of paragraph (c) of this 
section, the term ``retail sale'' means a sale, made in the ordinary 
course of the seller's trade or business, of tangible personal property 
of which the seller is the owner. Such term includes a sale in customary 
retail quantities by a seller who is going out of business, but does not 
include a bulk sale or an auction sale in which goods are offered in 
quantities substantially greater than are customary in the ordinary 
course of the seller's trade or business or an auction sale of goods the 
owner of which is not in the business of selling such goods.
    (d) Personal property purchased in casual sale--(1) In general. Even 
though a notice of a lien imposed by 26 U.S.C. 6321 is filed in 
accordance with Sec. 70.148 of this part, the lien is not valid against 
a purchaser (as defined in Sec. 70.143(f) of this part) of household 
goods, personal effects, or other tangible personal property of a type 
described in Sec. 70.241 of this part (which includes wearing apparel, 
school books, fuel, provisions, furniture, arms for personal use, 
livestock, and poultry (whether or not the seller is the head of a 
family); and books and tools of a trade, business, or profession 
(whether or not the trade, business, or profession of the seller)), 
purchased, other than for resale, in a casual sale for less than $250 
(excluding interest and expenses described in Sec. 70.147 of this part). 
For purposes of this paragraph, a casual sale is a sale not made in the 
ordinary course of the seller's trade or business.
    (2) Limitation. This paragraph applies only if the purchaser does 
not have actual notice or knowledge (as defined in Sec. 70.144(a) of 
this part):
    (i) Of the existence of the tax lien, or
    (ii) That the sale is one of a series of sales.

For purposes of paragraph (d)(2)(ii) of this section, a sale is one of a 
series of sales if the seller plans to dispose of, in separate 
transactions, substantially all of the seller's household goods, 
personal effects, and other tangible personal property described in 
Sec. 70.241 of this part.
    (e) Personal property subject to possessory liens. Even though a 
notice of a lien imposed by 26 U.S.C. 6321 is filed in accordance with 
Sec. 70.148 of this part, the lien is not valid against a holder of a 
lien on tangible personal property which under local law secures the 
reasonable price of the repair or improvement of the property if the 
property is, and has been, continuously in the possession of the holder 
of the lien from the time the possessory lien arose. For example, if 
local law gives an automobile mechanic the right to retain possession of 
an automobile the mechanic has repaired as security for payment of the 
repair bill and the mechanic retains continuous possession of the 
automobile until such lien is satisfied, a tax lien filed in accordance 
with 26 U.S.C 6323(f)(1) which has attached to the automobile will not 
be valid to the extent of the reasonable price of the repairs. It is 
immaterial that the notice of tax lien was filed before the mechanic 
undertook the work or that the mechanic knew of the lien before 
undertaking the work.
    (f) Real property tax and special assessment liens. Even though a 
notice of a lien imposed by 26 U.S.C. 6321 is filed in accordance with 
Sec. 70.148 of this part, the lien is not valid against the holder

[[Page 1051]]

of another lien upon the real property (regardless of when such other 
lien arises), if such other lien is entitled under local law to priority 
over security interests in real property which are prior in time and if 
such other lien on real property secures payment of:
    (1) A tax of general application levied by any taxing authority 
based upon the value of the property, or
    (2) A special assessment imposed directly upon the property by any 
taxing authority, if the assessment is imposed for the purpose of 
defraying the cost of any public improvement; or
    (3) Charges for utilities or public services furnished to the 
property by the United States, a State or political subdivision thereof, 
or an instrumentality of any one or more of the foregoing.
    (g) Residential property subject to a mechanic's lien for certain 
repairs and improvements. Even though a notice of lien imposed by 26 
U.S.C. 6321 is filed in accordance with Sec. 70.148 of this part, the 
lien is not valid against a mechanic's lienor (as defined in 
Sec. 70.143(b) of this part) who holds a lien for the repair or 
improvement of a personal residence if:
    (1) The residence is occupied by the owner and contains no more than 
four dwelling units, and
    (2) The contract price on the prime contract with the owner for the 
repair or improvement (excluding interest and expenses described in 
Sec. 70.147 of this part) is not more than $1,000. For purposes of this 
paragraph, the amounts of subcontracts under the prime contract with the 
owner are not to be taken into consideration for purposes of computing 
the $1,000 prime contract price. It is immaterial that the notice of tax 
lien was filed before the contractor undertakes the work or that the 
contractor knew of the lien before undertaking the work.
    (h) Attorney's liens--(1) In general. Even though notice of a lien 
imposed by 26 U.S.C. 6321 is filed in accordance with Sec. 70.148 of 
this part, the lien is not valid against an attorney who, under local 
law, holds a lien upon, or a contract enforceable against, a judgment or 
other amount in settlement of a claim or of a cause of action. The 
priority afforded an attorney's lien under this paragraph shall not 
exceed the amount of the attorney's reasonable compensation for 
obtaining the judgment or procuring the settlement. For purposes of this 
paragraph, reasonable compensation means the amount customarily allowed 
under local law for an attorney's service for litigating or settling a 
similar case or administrative claim. However, reasonable compensation 
shall be determined on the basis of the facts and circumstances of each 
individual case. It is immaterial that the notice of tax lien is filed 
before the attorney undertakes the work or that the attorney knows of 
the tax lien before undertaking the work. This paragraph does not apply 
to an attorney's lien which may arise from the defense of a claim or 
cause of action against a taxpayer except to the extent such lien is 
held upon a judgment or other amount arising from the adjudication or 
settlement of a counterclaim in favor of the taxpayer. In case of suits 
against the taxpayer, see Sec. 70.150(d)(2) of this part for rules 
relating to the subordination of the tax lien to facilitate tax 
collection.
    (2) Claim or cause of action against the United States. Paragraph 
(h)(1) of this section does not apply to an attorney's lien with respect 
to:
    (i) Any judgment or other fund resulting from the successful 
litigation or settlement of an administrative claim or cause of action 
against the United States to the extent that the United States, under 
any legal or equitable right, offsets its liability under the judgment 
or settlement against any liability of the taxpayer to the United 
States, or
    (ii) Any amount credited against any liability of the taxpayer in 
accordance with 26 U.S.C. 6402.
    (i) Certain insurance contracts. Even though a notice of a lien 
imposed by 26 U.S.C. 6321 (with respect to any tax imposed under the 
provisions of 26 U.S.C. enforced and administered by the Bureau) is 
filed in accordance with Sec. 70.148 of this part, the lien is not valid 
with respect to a life insurance, endowment, or annuity contract, 
against an organization which is the insurer under the contract, at any 
time:

[[Page 1052]]

    (1) Before the insuring organization has actual notice or knowledge 
(as defined in Sec. 70.144(a) of this part) of the existence of the tax 
lien.
    (2) After the insuring organization has actual notice or knowledge 
of the lien (as defined in Sec. 70.144(a) of this part) with respect to 
advances (including contractual interest thereon as provided in 
Sec. 70.147(a) of this part) required to be made automatically to 
maintain the contract in force under an agreement entered into before 
the insuring organization had such actual notice or knowledge, or
    (3) After the satisfaction of a levy pursuant to 26 U.S.C. 6332(b), 
unless and until the appropriate ATF officer delivers to the insuring 
organization a notice (for example, another notice of levy, a letter, 
etc.), executed after the date of such satisfaction, that the lien 
exists.

Delivery of the notice described in paragraph (i)(3) of this section may 
be made by any means, including regular mail, and delivery of the notice 
shall be effective only from the time of actual receipt of the 
notification by the insuring organization. The provisions of this 
paragraph are applicable to matured as well as unmatured insurance 
contracts.
    (j) Passbook loans--(1) In general. Even though a notice of a lien 
imposed by 26 U.S.C. 6321 is filed in accordance with Sec. 70.148 of 
this part, the lien is not valid against an institution described in 26 
U.S.C. 581 or 591 to the extent of any loan made by the institution 
which is secured by a savings deposit, share, or other account evidenced 
by a passbook (as defined in paragraph (j)(2) of this section) if the 
institution has been continuously in possession of the passbook from the 
time the loan is made. This paragraph applies only to a loan made 
without actual notice or knowledge (as defined in Sec. 70.144(a) of this 
part) of the existence of the lien. Even though an original passbook 
loan is made without actual notice or knowledge of the existence of the 
lien, this paragraph does not apply to any additional loan made after 
knowledge of the lien is acquired by the institution even if it 
continues to retain the passbook from the time the original passbook 
loan is made.
    (2) Definition of passbook. For purposes of paragraph (j) of this 
section, the term ``passbook'' includes:
    (i) Any tangible evidence of a savings deposit, share, or other 
account which, when in the possession of the bank or other savings 
institution, will prevent a withdrawal from the account to the extent of 
the loan balance, and
    (ii) Any procedure or system, such as an automatic data processing 
system, the use of which by the bank or other savings institution will 
prevent a withdrawal from the account to the extent of the loan balance.

(26 U.S.C. 6323)



Sec. 70.232  Protection for commercial transactions financing agreements.

    (a) In general. Even though a notice of a lien imposed by 26 U.S.C. 
6321 is filed in accordance with Sec. 70.148 of this part, the lien is 
not valid with respect to a security interest which:
    (1) Comes into existence after the tax lien filing.
    (2) Is in qualified property covered by the terms of a commercial 
transactions financing agreement entered into before the tax lien 
filing, and
    (3) Is protected under local law against a judgment lien arising, as 
of the time of the tax lien filing, out of an unsecured obligation.

See Sec. 70.143 (a) and (e) of this part for definitions of the terms 
``security interest'' and ``tax lien filing,'' respectively. For 
purposes of this section, a judgment lien is a lien held by a judgment 
lien creditor as defined in Sec. 70.143(g) of this part.
    (b) Commercial transactions financing agreement. For purposes of 
this section, the term ``commercial transactions financing agreement'' 
means a written agreement entered into by a person in the course of such 
person's trade or business:
    (1) To make loans to the taxpayer (whether or not at the option of 
the person agreeing to make such loans) to be secured by commercial 
financing security acquired by the taxpayer in the ordinary course of 
the taxpayer's trade or business, or
    (2) To purchase commercial financing security, other than inventory, 
acquired by the taxpayer in the ordinary

[[Page 1053]]

course of the taxpayer's trade or business.

Such an agreement qualifies as a commercial transactions financing 
agreement only with respect to loans or purchases made under the 
agreement before the 46th day after the date of tax lien filing or the 
time when the lender or purchaser has actual notice or knowledge (as 
defined in Sec. 70.144(a) of this part) of the tax lien filing, if 
earlier. For purposes of this paragraph, a loan or purchase is 
considered to have been made in the course of the lender's or 
purchaser's trade or business if such person is in the business of 
financing commercial transactions (such as a bank or commercial factor) 
or if the agreement is incidental to the conduct of such person's trade 
or business. For example, if a manufacturer finances the accounts 
receivable of one of its customers, the manufacturer is considered to 
engage in such financing in the course of its trade or business. The 
extent of the priority of the lender or purchaser over the tax lien is 
the amount of the disbursement made before the 46th day after the date 
the notice of tax lien is filed, or made before the day (before such 
46th day) on which the lender or purchaser has actual notice or 
knowledge of the filing of the notice of the tax lien.
    (c) Commercial financing security--(1) In general. The term 
``commercial financing security'' means:
    (i) Paper of a kind ordinarily arising in commercial transactions,
    (ii) Accounts receivable (as defined in paragraph (c)(2) of this 
section),
    (iii) Mortgages on real property, and
    (iv) Inventory.
    For purposes of this subparagraph, the term ``paper of a kind 
ordinarily arising in commercial transactions'' in general includes any 
written document customarily used in commercial transactions. For 
example, such written documents include paper giving contract rights (as 
defined in paragraph (c)(2) of this section), chattel paper, documents 
of title to personal property, and negotiable instruments or securities. 
The term ``commercial financing security'' does not include general 
intangibles such as patents or copyrights. A mortgage on real estate 
(including a deed of trust, contract for sale, and similar instrument) 
may be commercial financing security if the taxpayer has an interest in 
the mortgage as a mortgagee or assignee. The term ``commercial financing 
security'' does not include a mortgage when the taxpayer is the 
mortgagor of realty owned by the taxpayer. For purposes of this 
subparagraph, the term ``inventory'' includes raw materials and goods in 
process as well as property held by the taxpayer primarily for sale to 
customers in the ordinary course of the taxpayer's trade or business.
    (2) Definitions. For purposes of Secs. 70.143 and 70.146 of this 
part, and this section:
    (i) A contract right is any right to payment under a contract not 
yet earned by performance and not evidenced by an instrument or chattel 
paper, and
    (ii) An account receivable is any right to payment for goods sold or 
leased or for services rendered which is not evidenced by an instrument 
or chattel paper.
    (d) Qualified property. For purposes of paragraph (a) of this 
section, qualified property consists solely of commercial financing 
security acquired by the taxpayer-debtor before the 46th day after the 
date of tax lien filing. Commercial financing security acquired before 
such day may be qualified property even though it is acquired by the 
taxpayer after the lender received actual notice or knowledge of the 
filing of the tax lien. For example, although the receipt of actual 
notice or knowledge of the filing of the notice of the tax lien has the 
effect of ending the period within which protected disbursements may be 
made to the taxpayer, property which is acquired by the taxpayer after 
the lender receives actual notice or knowledge of such filing and before 
such 46th day, which otherwise qualifies as commercial financing 
security, becomes commercial financing security to which the priority of 
the lender extends for loans made before the lender received the actual 
notice or knowledge. An account receivable (as defined in paragraph 
(c)(2)(ii) of this section) is acquired by a taxpayer at the time, and 
to the extent, a right to payment is earned by performance. Chattel 
paper,

[[Page 1054]]

documents of title, negotiable instruments, securities, and mortgages on 
real estate are acquired by a taxpayer when the taxpayer obtains rights 
in the paper or mortgage. Inventory is acquired by the taxpayer when 
title passes to the taxpayer. A contract right (as defined in paragraph 
(c)(2)(i) of this section) is acquired by a taxpayer when the contract 
is made. Indentifiable proceeds, which arise from the collection or 
disposition of qualified property by the taxpayer, are considered to be 
acquired at the time such qualified property is acquired if the secured 
party has a continuously perfected security interest in the proceeds 
under local law. The term ``proceeds'' includes whatever is received 
when collateral is sold, exchanged, or collected. For purposes of this 
paragraph, the term ``identifiable proceeds'' does not include money, 
checks and the like which have been commingled with other cash proceeds. 
Property acquired by the taxpayer after the 45th day following tax lien 
filing, by the expenditure of proceeds, is not qualified property.
    (e) Purchaser treated as acquiring security interest. A person who 
purchases commercial financing security, other than inventory, pursuant 
to a commercial transactions financing agreement is treated, for 
purposes of this section, as having acquired a security interest in the 
commercial financing security. In the case of a bona fide purchase at a 
discount, a purchaser of commercial financing security who satisfies the 
requirements of this section has priority over the tax lien to the full 
extent of the security.

(26 U.S.C. 6323)



Sec. 70.233  Protection for real property construction or improvement financing agreements.

    (a) In general. Even though a notice of a lien imposed by 26 U.S.C. 
6321 is filed in accordance with Sec. 70.148 of this part, the lien is 
not valid with respect to a security interest which:
    (1) Comes into existence after the tax lien filing,
    (2) Is on qualified property covered by the terms of a real property 
construction or improvement financing agreement entered into before the 
tax lien filing, and
    (3) Is protected under local law against a judgment lien arising, as 
of the time of tax lien filing, out of an unsecured obligation.

For purposes of this section, it is immaterial that the holder of the 
security interest had actual notice or knowledge of the lien at the time 
disbursements are made pursuant to such an agreement. See Sec. 70.143 
(a) and (e) of this part for general definitions of the terms ``security 
interest'' and ``tax lien filing.'' For purposes of this section, a 
judgment lien is a lien held by a judgment lien creditor as defined in 
Sec. 70.143(g) of this part.
    (b) Real property construction or improvement financing agreement. 
For purposes of this section, the term ``real property construction or 
improvement financing agreement'' means any written agreement to make 
cash disbursements (whether or not at the option of the party agreeing 
to make such disbursements):
    (1) To finance the construction, improvement, or demolition of real 
property if the agreement provides for a security interest in the real 
property with respect to which the construction, improvement, or 
demolition has been or is to be made;
    (2) To finance a contract to construct or improve, or demolish real 
property if the agreement provides for a security interest in the 
proceeds of the contract; or
    (3) To finance the raising or harvesting of a farm crop or the 
raising of livestock or other animals if the agreement provides for a 
security interest in any property subject to the lien imposed by 26 
U.S.C. 6321 at the time of tax lien filing, in the crop raised or 
harvested, or in the livestock or other animals raised.

For purposes of paragraphs (b) (1) and (2) of this section, construction 
or improvement may include demolition. For purposes of any agreement 
described in paragraph (b)(3) of this section, the furnishing of goods 
and services is treated as the disbursement of cash.
    (c) Qualified property. For purposes of this section, the term 
``qualified property'' includes only:

[[Page 1055]]

    (1) In the case of an agreement described in paragraph (b)(1) of 
this section, the real property with respect to which the construction 
or improvement has been or is to be made;
    (2) In the case of an agreement described in paragraph (b)(2) of 
this section, the proceeds of the contract to construct or improve real 
property; or
    (3) In the case of an agreement described in paragraph (b)(3) of 
this section, property subject to the lien imposed by 26 U.S.C. 6321 at 
the time of tax lien filing, the farm crop raised or harvested, or the 
livestock or other animals raised.

(26 U.S.C. 6323)



Sec. 70.234  Protection for obligatory disbursement agreements.

    (a) In general. Even though a notice of a lien imposed by 26 U.S.C. 
6321 is filed in accordance with Sec. 70.148 of this part, the lien is 
not valid with respect to security interest which:
    (1) Comes into existence after the tax lien filing,
    (2) Is in qualified property covered by the terms of an obligatory 
disbursement agreement entered into before the tax lien filing, and
    (3) Is protected under local law against a judgment lien arising, as 
of the time of tax lien filing, out of an unsecured obligation.

See Sec. 70.143 (a) and (e) of this part for definitions of the terms 
``security interest'' and ``tax lien filing.'' For purposes of this 
section, a judgment lien creditor as defined in Sec. 70.143(g) of this 
part.
    (b) Obligatory disbursement agreement. For purposes of this section, 
the term ``obligatory disbursement agreement'' means a written 
agreement, entered into by a person in the course of the person's trade 
or business, to make disbursements. An agreement is treated as an 
obligatory disbursement agreement only with respect to disbursements 
which are required to be made by reason of the intervention of the 
rights of a person other than the taxpayer. The obligation to pay must 
be conditioned upon an event beyond the control of the obligor. For 
example, the provisions of this section are applicable where an issuing 
bank obligates itself to honor drafts or other demands for payment on a 
letter of credit and a bank, in good faith, relies upon that letter of 
credit in making advances. The provisions of this section are also 
applicable, for example, where a bonding company obligates itself to 
make payments to indemnify against loss or liability and, under the 
terms of the bond, makes a payment with respect to a loss. The priority 
described in this section is not applicable, for example, in the case of 
an accommodation endorsement by an endorser who assumes the obligation 
other than in the course of the endorser's trade or business.
    (c) Qualified property. Except as provided under paragraph (d) of 
this section, the term ``qualified property,'' for purposes of this 
section, means property subject to the lien imposed by 26 U.S.C. 6321 at 
the time of tax lien filing and, to the extent that the acquisition is 
directly traceable to the obligatory disbursement, property acquired by 
the taxpayer after tax lien filing.
    (d) Special rule for surety agreements. Where the obligatory 
disbursement agreement is an agreement insuring the performance of a 
contract of the taxpayer and another person, the term ``qualified 
property'' shall be treated as also including:
    (1) The proceeds of the contract the performance of which was 
insured, and
    (2) If the contract the performance of which was insured is a 
contract to construct or improve real property, to produce goods, or to 
furnish services, any tangible personal property used by the taxpayer in 
the performance of the insured contract.

For example, a surety company which holds a security interest, arising 
from cash disbursements made after tax lien filing under a payment or 
performance bond on a real estate construction project, has priority 
over the tax lien with respect to the proceeds of the construction 
contract and, in addition, with respect to any tangible personal 
property used by the taxpayer in the construction project if its 
security interest in the tangible personal property is protected under 
local law against a judgment lien arising, as of the time the tax lien 
was filed, out of an unsecured obligation.

(26 U.S.C. 6323)

[[Page 1056]]

                          Limitations on Levies

    Source: Sections 70.241 through 70.245 added by T.D. ATF-301, 55 FR 
47646, Nov. 14, 1990, unless otherwise noted.



Sec. 70.241  Property exempt from levy.

    (a) Enumeration. There shall be exempt from levy:
    (1) Wearing apparel and school books. Such items of wearing apparel 
and such school books as are necessary for the taxpayer or for members 
of the taxpayer's family. Expensive items of wearing apparel, such as 
furs, which are luxuries and are not necessary for the taxpayer or for 
members of the taxpayer's family, are not exempt from levy.
    (2) Fuel, provisions, furniture, and personal effects. If the 
taxpayer is the head of a family, so much of the fuel, provisions, 
furniture, and personal effects in the taxpayer's household, and of the 
arms for personal use, livestock, and poultry of the taxpayer, as does 
not exceed $1,650 in value. For purposes of this provision, an 
individual who is the only remaining member of a family and who lives 
alone is not the head of a family.
    (3) Books and tools of a trade, business or profession. So many of 
the books and tools necessary for the trade, business, or profession of 
an individual taxpayer as do not exceed in the aggregate $1,100 in 
value.
    (4) Unemployment benefits. Any amount payable to an individual with 
respect to that individual's unemployment (including any portion thereof 
payable with respect to dependents) under an unemployment compensation 
law of the United States, of any State, or of the District of Columbia 
or of the Commonwealth of Puerto Rico.
    (5) Undelivered mail. Mail, addressed to any person, which has not 
been delivered to the addressee.
    (6) Certain annuity and pension payments. Annuity or pension 
payments under the Railroad Retirement Act (45 U.S.C. chapter 9), 
benefits under the Railroad Unemployment Insurance Act (45 U.S.C. 
chapter 11), special pension payments received by a person whose name 
has been entered on the Army, Navy, Air Force, and Coast Guard Medal of 
Honor roll (38 U.S.C. 562), and annuities based on retired or retainer 
pay under 10 U.S.C. chapter 73.
    (7) Workmen's compensation. Any amount payable to an individual as 
workmen's compensation (including any portion thereof payable with 
respect to dependents) under a workmen's compensation law of the United 
States, any State, the District of Columbia, or the Commonwealth of 
Puerto Rico.
    (8) Judgments for support of minor children. If the taxpayer is 
required under any type of order or decree (including an interlocutory 
decree or a decree of support pendente lite) of a court of competent 
jurisdiction, entered prior to the day of levy, to contribute to the 
support of such taxpayer's minor children, so much of the taxpayer's 
salary, wages, or other income as is necessary to comply with such order 
or decree. The taxpayer must establish the amount necessary to comply 
with the order or decree. The appropriate ATF officer is not required to 
release a levy until such time as that officer is satisfied that the 
amount to be released from levy will actually be applied in satisfaction 
of the support obligation. The appropriate ATF officer may make 
arrangements with a delinquent taxpayer to establish a specific amount 
of such taxpayer's salary, wage, or other income for each pay period 
which shall be exempt from levy. Any request for such an arrangement 
shall be directed to the appropriate ATF officer. Where the taxpayer has 
more than one source of income sufficient to satisfy the support 
obligation imposed by the order or decree, the amount exempt from levy 
may at the discretion of the appropriate ATF officer be allocated 
entirely to one salary, wage, or source of other income or be 
apportioned between the several salaries, wages, or other sources of 
income.
    (9) Minimum exemption for wages, salary, and other income. Amounts 
payable to or received by the taxpayer as wages or salary for personal 
services, or as other income, to the extent provided in Secs. 70.242 
through 70.245 of this part.
    (10) Certain service-connected disability payments. Any amount 
payable to an individual as a service-connected (within the meaning of 
38 U.S.C. 101(16)) disability benefit under:

[[Page 1057]]

    (i) 38 U.S.C. chapter 11, subchapter II, III, IV, V, or VI, or
    (ii) 38 U.S.C. chapter 13, 21, 23, 31, 32, 34, 35, 37, or 39 shall 
be exempt from levy.
    (11) Certain public assistance payments. Any amount payable to an 
individual as a recipient of public assistance under:
    (i) Title 42 U.S.C. subchapter IV (relating to aid to families with 
dependent children) or 42 U.S.C. subchapter XVI (relating to 
supplemental security income for the aged, blind, and disabled), or
    (ii) State or local government public assistance or public welfare 
programs for which eligibility is determined by a needs or income test 
shall be exempt from levy.
    (12) Assistance under job training partnership act. Any amount 
payable to a participant under the Job Training Partnership Act (29 
U.S.C. 1501 et seq.) from funds appropriated pursuant to such Act shall 
be exempt from levy.
    (13) Principal residence exempt in absence of certain approval or 
jeopardy. Except to the extent provided in Sec. 70.166 of this part, the 
principal residence of the taxpayer (within the meaning of 26 U.S.C. 
1034) is exempt from levy.
    (b) Appraisal. The ATF officer seizing property of the type 
described in 26 U.S.C. 6334(a) shall appraise and set aside to the owner 
the amount of such property declared to be exempt. If the taxpayer 
objects at the time of the seizure to the valuation fixed by the officer 
making the seizure, such officer shall summon three disinterested 
individuals who shall make the valuation.
    (c) Other property. No other property or rights to property are 
exempt from levy except the property specifically exempted by 26 U.S.C. 
6334(a). No provisions of a State law may exempt property or rights to 
property from levy for the collection of any Federal tax. Thus, property 
exempt from execution under State personal or homestead exemption laws 
is, nevertheless, subject to levy by the United States for collection of 
its taxes.

(26 U.S.C. 6334)



Sec. 70.242  Wages, salary and other income.

    (a) In general. Under 26 U.S.C. 6334(a)(9) and (d) certain amounts 
payable to or received by a taxpayer as wages, salary or other income 
are exempt from levy. This section described the income of a taxpayer 
that is eligible for the exemption from levy (paragraph (b) of this 
section) and how exempt amounts are to be paid to the taxpayer 
(paragraph (c) of this section). Section 70.243 of this part describes 
the sum which will be exempt from levy for each of the taxpayer's 
payroll periods. Payroll periods are described in Sec. 70.244 of this 
part. Amounts exempt from levy are determined in part by the number of 
persons claimed by the taxpayer as dependents. Section 70.245 of this 
part describes the manner in which the taxpayer is to claim any 
dependent exemptions and the manner in which the employer is to compute 
the exempt amount and pay the balance to the appropriate ATF officer.
    (b) Eligible taxpayer income. Only wages, salary or other income 
payable to the taxpayer after the levy is made on the payor may be 
exempt from levy under 26 U.S.C. 6334 (a)(9). No amount of wages, salary 
or other income which is paid to the taxpayer before levy is made on the 
payor will be so exempt from levy.
    (c) Payment of exempt amounts to taxpayer--(1) From wages, salary or 
other income not subject to levy. In the case of a taxpayer who has more 
than one source of wages, salary or other income, the appropriate ATF 
officer may elect to levy on only one or more such source while leaving 
other sources of salary or other income free from levy. If those wages, 
salary or other income which the appropriate ATF officer leaves free 
from levy equal or exceed the amount to which the taxpayer is entitled 
as an exemption from levy under 26 U.S.C. 6334(a)(9) and (d) and 
Sec. 70.243 of this part (and ar not otherwise exempt), then no amount 
of the taxpayer's wages, salary or other income on which the appropriate 
ATF officer elects to levy is exempt from levy. The appropriate ATF 
officer shall notify the employer or other person subject to levy that 
no amount of the

[[Page 1058]]

taxpayer's wages, salary or other income is exempt from levy.
    (2) From wages, salary or other income subject to levy. If the 
taxpayer's income upon which the appropriate ATF officer does not levy 
is less than that amount to which the taxpayer is entitled as an 
exemption, then an amount determined pursuant to Sec. 70.243 of this 
part is to be paid to the taxpayer from those wages, salary or other 
income which are subject to levy. The appropriate ATF officer will 
designate those wages, salary or other income subject to levy from which 
such amount will be paid to the taxpayer. The appropriate ATF officer 
will generally make this designation by delivering to the employer, or 
other person levied upon, the form upon which the taxpayer is to claim 
any dependent exemption. The form will acompany the notice of levy. The 
person receiving the form from the appropriate ATF officer must promptly 
deliver it to the taxpayer. In the case of some employers having a large 
number of employees, however, the appropriate ATF officer will send the 
form upon which an employee is to claim any dependent exemption diretly 
to the employee. In such a case, the notice of levy will indicate that 
the form for claiming dependent exemptions has been sent to the 
taxpayer. If a notice of levy is not accompanied by the form for 
claiming dependent exemptions and does not indicate that the form was 
sent directly to the taxpayer, then the person levied upon must make 
payment to the appropriate ATF officer without regard to amounts 
prescribed by Sec. 70.243 of this part as exempt from levy. If a notice 
of levy is accompanied by the form for claiming dependent exemptions or 
indicates that the form was sent directly to the taxpayer, then the 
person levied upon is to pay over to the taxpayer, amounts determined to 
be exempt from levy pursuant to Sec. 70.243 and Sec. 70.245 (b) and (c) 
of this part (relating to the requirement that the taxpayer submit a 
claim for any dependent exemption). Amounts not exempt from levy are to 
be paid to the appropriate ATF officer in accordance with the terms of 
the levy.

(26 U.S.C. 6334)



Sec. 70.243  Exempt amount.

    Amount payable to the taxpayer as wages, salary, or other income for 
each payroll period described in Sec. 70.244 of this part are exempt 
from levy as follows:
    (a) If the payroll period is weekly, an amount equal to:
    (1) The sum of:
    (i) The standard deduction, and
    (ii) The aggregate amount of the deductions for personal exemption 
allowed the taxpayer under 26 U.S.C. 151 in the taxable year in which 
such levy occurs, divided by
    (2) 52.
    (b) If the payroll period is not weekly, the amount exempt from levy 
shall be an amount which as nearly as possible will result in the same 
total exemption from levy for such individual over a period of time as 
such individual would have under paragraph (a) of this section if 
(during such period of time) the individual were paid or received such 
wages, salary or other income on a regular weekly basis.

(26 U.S.C. 6334)



Sec. 70.244  Payroll period.

    For purpose of determining the amount of wages, salary or other 
income exempt from levy under 26 U.S.C. 6334(a)(9):
    (a) Regularly used calendar periods. In the case of wages, salary or 
other income paid to the taxpayer on the basis of an established 
calendar period regularly used by the employer or other person levied 
upon for payroll or payment purpose (e.g., daily, weekly, biweekly, 
semimonthly, or monthly), that period is the taxpayer's payroll period.
    (b) Amounts paid on recurrent but irregular basis. In the case of 
wages, salary, or other income paid to the taxpayer on a recurrent but 
irregular basis, the first day of the taxpayer's payroll period is that 
day following the day upon which the wages, salary, or other income were 
last paid to the taxpayer. The last day of the payroll period is that 
day upon which the current payment becomes payable to him or her. 
However, in any case in which:
    (1) Amounts are paid to the taxpayer on a recurrent but irregular 
basis, and

[[Page 1059]]

    (2) the last payment was paid to the taxpayer more than 60 days 
before the current payment becomes payable, the current payment will be 
deemed a one-time payment (see paragraph (c) of this section).
    (c) Nonrecurrent payments. In the case of wages, salary or other 
income paid to the taxpayer on a one-time basis, the taxpayer's payroll 
period is deemed to be weekly (i.e., the 1-week period ending on the day 
of payment).

(26 U.S.C. 6334)



Sec. 70.245  Computation of exempt amount and payment of amounts not exempt from levy to the appropriate ATF officer.

    (a) General. Unless advised by the appropriate ATF officer that no 
part of the money due to the taxpayer is exempt from levy, the employer 
or other person levied upon will compute the exempt amount, using the 
formula in Sec. 70.243 of this part and the taxpayer's statement of 
exemptions and filing status described in paragraph (b) of this section.
    (b) Statement of exemptions and filing status. Unless the taxpayer 
submits a statement of exemptions and filing status to the employer or 
other person levied upon, the exempt amount will be applied as if the 
taxpayer were a married individual filing a separate return with only 1 
personal exemption. A statement of exemptions and filing status shall be 
made by either:
    (1) Completion of the form provided for this purpose by the Bureau, 
or
    (2) A written statement that:
    (i) Gives the taxpayer's filing status for income tax purposes,
    (ii) Shows any additional standard deduction if the taxpayer or the 
taxpayer's spouse is at least 65 and/or blind,
    (iii) Identified by name and by relationship to the taxpayer each 
person for whom a dependent exemption is claimed,
    (iv) Is signed by the taxpayer, and
    (v) Contains a declaration that it is made under the penalties of 
perjury.
    (c) Time for submission of statement. The taxpayer must submit the 
statement of exemptions and filing status to the employer or other 
person levied upon no later than the later of:
    (1) The third day before the last day of the payroll period for 
which the exemption is claimed (that is, the third day before payday), 
or
    (2) If the appropriate ATF officer delivers the forms for the 
statement of exemption and filing status to the employer or other person 
levied upon (see Sec. 70.242(c)(2) of this part), the second day after 
the date the taxpayer receives the form.

For purposes of paragraphs (c) (1) and (2) of this section, the term 
``day'' does not include Saturdays, Sunday or a legal holiday within the 
meaning of 26 U.S.C. 7503. Failure on the part of the taxpayer to submit 
a timely statement of exemptions and filing status will result in the 
computation of the exempt amount as if the taxpayer were a married 
individual filing a separate return with only 1 personal exemption for 
the applicable pay period, except that the employer or other person 
levied upon may accept a statement of exemptions and filing status not 
timely submitted in accordance with this paragraph, and may prepare a 
disbursement to the taxpayer based upon the information properly 
verified therein, if payment to the Chief, Tax Processing Center in 
accordance with the levy is not thereby delayed.
    (d) Payment of amounts not exempt form levy to the appropriate ATF 
officer--(1) In General. Wages, Salary, or other income the subject of a 
levy are payable to the appropriate ATF officer on the date the payor is 
otherwise obligated to pay the taxpayer (see Sec. 70.242(c) of this 
part).
    (2) Delayed payment in certain cases. If, however, as described in 
paragraph (c)(2) of this section, the taxpayer may submit a statement of 
exemptions and filing status after the third day before payday, amounts 
payable to the taxpayer on that payday, to the extent not exempt from 
levy , are payable to the appropriate ATF officer on the third day 
following the date on which the taxpayer may timely submit the statement 
of exemptions and filing status under paragraph (c)(2) of this section. 
For purposes of this rule, the term ``day'' does not include Saturday, 
Sunday or a legal holiday within the meaning of 26 U.S.C. 7503.

(26 U.S.C. 6334)

[[Page 1060]]

              Periods of Limitation in Judicial Proceedings



Sec. 70.251  Periods of limitation on suits by taxpayers.

    (a) No suit or proceeding under section 7422(a) of the Internal 
Revenue Code for the recovery of any internal revenue tax, penalty, or 
other sum shall be begun until whichever of the following first occurs:
    (1) The expiration of 6 months from the date of the filing of the 
claim for credit or refund, or
    (2) A decision is rendered on such claim prior to the expiration of 
6 months after the filing thereof. Except as provided in paragraph (b) 
of this section, no suit or proceeding for the recovery of any tax, 
penalty, or other sum imposed under the provision of 26 U.S.C. enforced 
and administered by the Bureau may be brought after the expiration of 2 
years from the date of mailing, by either registered or certified mail, 
by an appropriate ATF officer, to a taxpayer of a statutory notice of 
disallowance of the part of the claim to which the suit or proceeding 
relates.
    (b) The 2-year period described in paragraph (a) of this section may 
be extended if an agreement to extend the running of the period of 
limitations is executed. The agreement must be signed by the taxpayer or 
by an attorney, agent, trustee, or other fiduciary on behalf of the 
taxpayer. If the agreement is signed by a person other than the 
taxpayer, it shall be accompanied by an authenticated copy of the power 
of attorney or other legal evidence of the authority of such person to 
act on behalf of the taxpayer. If the taxpayer is a corporation, the 
agreement should be signed with the corporate name followed by the 
signature of a duly authorized officer of the corporation. The agreement 
will not be effective until signed by an appropriate officer.
    (c) The taxpayer may sign a waiver of the requirement that the 
taxpayer be mailed a notice of disallowance. Such waiver is irrevocable 
and will commence the running of the 2-year period described in 
paragraph (a) of this section on the date the waiver is filed. The 
waiver shall set forth:
    (1) The type of tax and the taxable period covered by the taxpayer's 
claim for refund;
    (2) The amount of the claim;
    (3) The amount of the claim disallowed;
    (4) A statement that the taxpayer agrees the filing of the waiver 
will commence the running of the 2-year period provided for in section 
6532(a)(1) as if a notice of disallowance had been sent the taxpayer by 
either registered or certified mail.

The filing of such a waiver prior to the expiration of 6 monthes from 
the date the claim was filed does not permit the filing of a suit for 
refund prior to the time specified in section 6532(a)(1) and paragraph 
(a) of this section.
    (d) Any consideration, reconsideration, or other action with respect 
to a claim after the mailing, by either registered or certified mail, of 
a notice of disallowance or after the execution of a waiver referred to 
in paragraph (c) of this section, shall not extend the period for 
bringing suit or other proceeding under section 7422(a) of the Internal 
Revenue Code.

(26 U.S.C. 6532)

[T.D. ATF-251, 52 FR 19314, May 22, 1987. Redesignated and amended by 
T.D. ATF-301, 55 FR 47606, 47648, Nov. 14, 1990]



Sec. 70.252  Periods of limitaion on suits by the United States.

    The United States may not recover any erroneous refund by civil 
action under section 7405 of the Internal Revenue Code unless such 
action is begun within 2 years after the making of such refund. However, 
if any part of the refund was induced by fraud or misrepresentation of a 
material fact, the action to recover the erroneous refund may be brought 
at any time within 5 years from the date the refund was made.

(26 U.S.C. 6532)

[T.D. ATF-251, 52 FR 19314, May 22, 1987. Redesignated by T.D. ATF-301, 
55 FR 47606, Nov. 14, 1990]



Sec. 70.253  Periods of limitation on suits by persons other than taxpayers.

    (a) General rule. No suit or proceeding, except as otherwise 
provided in 26 U.S.C. 6532(c)(2) and paragraph (b) of this section, 
under 26 U.S.C. 7426 and

[[Page 1061]]

Sec. 70.207 of this part relating to civil actions by persons other than 
taxpayers, shall be begun after the expiration of 9 months from the date 
of levy or agreement under 26 U.S.C. 6325(b)(3) giving rise to such 
action.
    (b) Period when claim is filed. The 9-month period described in 26 
U.S.C. 6532(c)(1) and paragraph (a) of this section shall be extended to 
the shorter of
    (1) 12 months from the date of filing by a third party of a written 
request under Sec. 70.167(b)(2) of this part for the return of property 
wrongfully levied upon, or
    (2) 6 months from the date of mailing by registered or certified 
mail by the appropriate ATF officer to the party claimant of a notice of 
disallowance of the part of the request to which the action relates. A 
request which, under Sec. 70.167(b)(3) of this part, is not considered 
adequate does not extend the 9-month period described in paragraph (a) 
of this section.

(26 U.S.C. 6532)

[T.D. ATF-301, 55 FR 47648, Nov. 14, 1990, as amended by T.D. ATF-450, 
66 FR 29028, May 29, 2001]

                     Limitations on Credit or Refund



Sec. 70.261  Period of limitation on filing claim.

    (a) In the case of any tax (other than a tax payable by stamp):
    (1) If a return is filed, a claim for credit or refund of an 
overpayment must be filed by the taxpayer within 3 years from the time 
the return was filed or within 2 years from the time the tax was paid, 
whichever of such periods expires the later.
    (2) If no return is filed, the claim for credit or refund of an 
overpayment must be filed by the taxpayer within 2 years from the time 
the tax was paid.
    (b) In the case of any tax payable by means of a stamp, a claim for 
credit or refund of an overpayment of such tax must be filed by the 
taxpayer within 3 years from the time the tax was paid. For provisions 
relating to redemption of unused stamps, see section 6805 of the 
Internal Revenue Code.
    (c) For limitations on allowance of credit or refund, special rules, 
and exceptions, see subsections (b) and (c) of section 6511 of the 
Internal Revenue Code. For rules as to time return is deemed filed and 
tax considered paid, see section 6513 of the Internal Revenue Code.

(26 U.S.C. 6511)

[T.D. ATF-251, 52 FR 19314, May 22, 1987. Redesignated by T.D. ATF-301, 
55 FR 47606, Nov. 14, 1990]



Sec. 70.262  Limitations on allowance of credits and refunds.

    (a) Effect of filing claim. Unless a claim for credit or refund of 
an overpayment is filed within the period of limitation prescribed in 
section 6511(a), no credit or refund shall be allowed or made after the 
expiration of such period.
    (b) Limit on amount to be credited or refunded. In the case of any 
tax (other than a tax payable by stamp):
    (1) If a return was filed, and a claim is filed within 3 years from 
the time the return was filed, the amount of the credit or refund shall 
not exceed the portion of the tax paid within the period, immediately 
preceding the filing of the claim, equal to 3 years plus the period of 
any extension of time for filing the return.
    (2) If a return was filed, and a claim is filed after the 3 year 
period described in paragraph (b)(1) of this section, but within 2 years 
from the time the tax was paid, the amount of the credit or refund shall 
not exceed the portion of the tax paid within the 2 years immediately 
preceding the filing of the claim.
    (3) If no return was filed, but a claim is filed, the amount of the 
credit or refund shall not exceed the portion of the tax paid within the 
2 years immediately preceding the filing of the claim.
    (4) If no claim is filed, the amount of the credit or refund allowed 
or made shall not exceed the amount that would have been allowable under 
the preceding subparagraphs if a claim had been filed on the date the 
credit or refund is allowed.
    (c) In the case of a tax payable by stamp. (1) If a claim is filed, 
the amount of the credit or refund shall not exceed the portion of the 
tax paid within the 3 years immediately preceding the filing of the 
claim.

[[Page 1062]]

    (2) If no claim is filed, the amount of the credit or refund allowed 
or made shall not exceed the portion of the tax paid within the 3 years 
immediately preceding the allowance of the credit or refund. For 
provisions relating to redemption of unused stamps, see section 6805 of 
the Internal Revenue Code.

(26 U.S.C. 6511)

[T.D. ATF-251, 52 FR 19314, May 22, 1987. Redesignated and amended by 
T.D. ATF-301, 55 FR 47606, 47648, Nov. 14, 1990; T.D. ATF-450, 66 FR 
29028, May 29, 2001]



Sec. 70.263  Special rules applicable in case of extension of time by agreement.

    (a) Scope. If, within the period prescribed in section 6511(a) of 
the Internal Revenue Code for the filing of a claim for credit or 
refund, an agreement extending the period for assessment of a tax has 
been made in accordance with the provisions of section 6501(c)(4) of the 
Internal Revenue Code, the special rules provided in this section become 
applicable. This section shall not apply to any claim filed, or credit 
or refund allowed if no claim is filed, either (1) prior to the 
execution of an agreement extending the period in which assessment may 
be made, or (2) more than 6 months after the expiration of the period 
within which an assessment may be made pursuant to the agreement or any 
extension thereof.
    (b) Period in which claim may be filed. Claim for credit or refund 
of an overpayment may be filed, or credit or refund may be allowed if no 
claim is filed, at any time within which an assessment may be made 
pursuant to an agreement, or any extension thereof, under section 
6501(c)(4), and for 6 months thereafter.
    (c) Limit on amount to be credited or refunded. (1) If a claim is 
filed within the time prescribed in paragraph (b) of this section, the 
amount of the credit or refund allowed or made shall not exceed the 
portion of the tax paid after the execution of the agreement and before 
the filing of the claim, plus the amount that could have been properly 
credited or refunded under the provisions of section 6511(b)(2) if a 
claim had been filed on the date of the execution of the agreement.
    (2) If no claim is filed, the amount of credit or refund allowed or 
made within the time prescribed in paragraph (b) of this section shall 
not exceed the portion of the tax paid after the execution of the 
agreement and before the making of the credit or refund, plus the amount 
that could have been properly credited or refunded under the provisions 
of section 6511(b)(2) if a claim had been filed on the date of the 
execution of the agreement.
    (d) Effective date of agreement. The agreement referred to in this 
section shall become effective when signed by the taxpayer and the 
appropriate ATF officer.

(26 U.S.C. 6511)

[T.D. ATF-251, 52 FR 19314, May 22, 1987. Redesignated by T.D. ATF-301, 
55 FR 47606, Nov. 14, 1990]



Sec. 70.264  Time return deemed filed and tax considered paid.

    For purposes of section 6511 of the Internal Revenue Code, a return 
filed before the last day prescribed by law or regulations for the 
filing thereof shall be considered as filed on such last day. For 
purposes of section 6511(b) (2) and (c), payment of any portion of the 
tax made before the last day prescribed for payment shall be considered 
made on such last day. An extension of time for filing a return or for 
paying any tax shall not be given any effect in determining under this 
section the last day prescribed for filing a return or paying any tax.

(26 U.S.C. 6513)

[T.D. ATF-251, 52 FR 19314, May 22, 1987. Redesignated by T.D. ATF-301, 
55 FR 47606, Nov. 14, 1990]



Sec. 70.265  Credits or refunds after period of limitation.

    (a) A refund of any portion of any internal revenue tax (or any 
interest, additional amount, addition to the tax, or assessable penalty) 
shall be considered erroneous and a credit of any such portion shall be 
considered void:
    (1) If made after the expiration of the period of limitation 
prescribed by section 6511 of the Internal Revenue Code for filing claim 
therefor, unless prior to the expiration of such period claim was filed, 
or

[[Page 1063]]

    (2) In the case of a timely claim, if the credit or refund was made 
after the expiration of the period of limitation prescribed by section 
6532(a) for the filing of suit, unless prior to the expiration of such 
period, suit was begun.
    (b) For procedure by the United States to recover erroneous refunds, 
see sections 6532(b) and 7405 of the Internal Revenue Code.

(26 U.S.C. 6514)

[T.D. ATF-251, 52 FR 19314, May 22, 1987. Redesignated by T.D. ATF-301, 
55 FR 47606, Nov. 14, 1990]



Sec. 70.266  Credit against barred liability.

    Any credit against a liability in respect of any taxable year shall 
be void if the collection of such liability would be barred by the 
applicable statute of limitations at the time such credit is made.

(26 U.S.C. 6514)

[T.D. ATF-251, 52 FR 19314, May 22, 1987. Redesignated by T.D. ATF-301, 
55 FR 47606, Nov. 14, 1990]

                               Transferees



Sec. 70.271  Procedure in the case of transferred assets.

    (a) Method of collection. (1) The liability, at law or in equity, of 
a transferee of property of any person liable in respect of any tax 
imposed under provisions of 26 U.S.C. enforced and administered by the 
Bureau, in any case where the liability of the transferee arises on the 
liquidation of a corporation or partnership, or a corporate 
reorganization within the meaning of 26 U.S.C. 368(a), shall be assessed 
against such transferee and paid and collected in the same manner and 
subject to the same provisions and limitations as in the case of the tax 
with respect to which such liability is incurred, except as hereinafter 
provided.
    (2) Applicable provisions. The provisions of 26 U.S.C. made 
applicable by 26 U.S.C. 6901(a) to the liability of a transferee 
referred to in paragraph (a)(1) of this section, include the provisions 
relating to:
    (i) Delinquency in payment after notice and demand and the amount of 
interest attaching because of such delinquency;
    (ii) The authorization of distraint and proceedings in court for 
collection; and
    (iii) The prohibition of claims and suits for refund.

For detailed provisions relating to assessments, collections, and 
refunds, see 26 U.S.C. chapters 63, 64, and 65, respectively.
    (b) Definition of transferee. As used in this section, the term 
``transferee'' includes the shareholder of a dissolved corporation, the 
assignee or donee of an insolvent person, the successor of a 
corporation, a party to a reorganization as defined in 26 U.S.C. 368, 
and all other classes of distributees.
    (c) Period of limitations on assessment. The period of limitations 
for assessment of the liability of a transferee is as follows:
    (1) Initial transferee. In the case of the liability of an initial 
transferee, 1 year after the expiration of the period of limitations for 
assessment against the transferor.
    (2) Transferee of transferee. In the case of the liability of a 
transferee of a transferee, 1 year after the expiration of the period of 
limitations for assessment against the preceding transferee, or 3 years 
after the expiration of the period of limitations for assessment against 
the taxpayer, whichever of such periods first expires.
    (3) Court proceeding against taxpayer or last preceding transferee. 
If, before the expiration of the period specified in paragraph (c)(1) or 
(2) of this section, (whichever is applicable), a court proceeding 
against the taxpayer or last preceding transferee for the collection of 
the tax or liability in respect thereof, respectively, has been begun 
within the period of limitation for the commencement of such proceeding, 
then within 1 year after the return of execution in such proceeding.
    (d) Extension by agreement--(1) Extension of time for assessment. 
The time prescribed by 26 U.S.C. 6901 for the assessment of the 
liability of a transferee may, prior to the expiration of such time, be 
extended for any period of time agreed upon in writing by the transferee 
and the appropriate ATF officer. The extension shall become effective 
when the agreement has been executed by both parties. The period

[[Page 1064]]

agreed upon may be extended by subsequent agreements in writing made 
before the expiration of the period previously agreed upon.
    (2) Extension of times for credit or refund. (i) For the purposes of 
determining the period of limitations on credit or refund to the 
transferee of overpayments made by such transferee or overpayments made 
by the taxpayer to which such transferee may be legally entitled to 
credit or refund, an agreement and any extension thereof referred to in 
paragraph (d)(1) of this section, shall be deemed an agreement and 
extension thereof for purposes of 26 U.S.C. 6511(c) (relating to 
limitations on credit or refund in case of extension of time by 
agreement).
    (ii) For the purpose of determining the limit specified in 26 U.S.C. 
6511(c)(2) on the amount of the credit or refund, if the agreement is 
executed after the expiration of the period of limitations for 
assessment against the taxpayer with reference to whom the liability of 
such transferee arises, the periods specified in 26 U.S.C. 6511(b)(2) 
shall be increased by the period from the date of such expiration to the 
date the agreement is executed.
    (e) Period of assessment against taxpayer. For the purpose of 
determining the period of limitations for assessment against a 
transferee, if the taxpayer is deceased, or, in the case of a 
corporation, has terminated its existence, the period of limitations for 
assessment against the taxpayer shall be the period that would be in 
effect had the termination of existence not occurred.

(26 U.S.C. 6901)

[T.D. ATF-301, 55 FR 47648, Nov. 14, 1990]

                                  Bonds



Sec. 70.281  Form of bond and security required.

    (a) In general. Any person required to furnish a bond under the 
provisions of this part shall execute such bond:
    (1) On the appropriate form prescribed by the Bureau and
    (2) With satisfactory surety.
    For provisions as to what will be considered ``satisfactory 
surety'', see paragraph (b) of this section. The bonds referred to in 
this paragraph shall be drawn in favor of the United States.
    (b) Satisfactory surety--(1) Approved surety company or bonds or 
notes of the United States. For purposes of paragraph (a) of this 
section, a bond shall be considered executed with satisfactory surety 
if:
    (i) It is executed by a surety company holding a certificate of 
authority from the Secretary as an acceptable surety on Federal bonds; 
or
    (ii) It is secured by bonds or notes of the United States as 
provided in by 31 U.S.C. 9303.
    (2) Other surety. Unless otherwise expressly provided in 26 U.S.C. 
or this part, a bond may, in the discretion of the appropriate ATF 
officer, be considered executed with satisfactory surety if, in lieu of 
being executed or secured as provided in paragraph (b)(1) of this 
section, it is:
    (i) Executed by a corporate surety (other than a surety company) 
provided such corporate surety establishes that it is within its 
corporate powers to act as surety for another corporation or an 
individual;
    (ii) Executed by two or more individual sureties, provided such 
individual sureties meet the conditions contained in paragraph (b)(3) of 
this section;
    (iii) Secured by a mortgage on real or personal property;
    (iv) Secured by a certified, cashier's, or treasurer's check drawn 
on any bank or trust company incorporated under the laws of the United 
States or any State, Territory, or possession of the United States, or 
by a U.S. postal, bank, express or telegraph money order;
    (v) Secured by corporate bonds or stocks, or by bonds issued by a 
State or political subdivision thereof, of recognized stability; or
    (vi) Secured by any other acceptable collateral. Collateral shall be 
deposited with the appropriate ATF officer or, in that officer's 
discretion, with a responsible financial institution acting as escrow 
agent.
    (3) Conditions to be met by individual sureties. If a bond is 
executed by two or more individual sureties, the following conditions 
must be met by each such individual surety:

[[Page 1065]]

    (i) The surety must reside within the State in which the principal 
place of business or legal residence of the primary obligor is located;
    (ii) The surety must have property subject to execution of a current 
market value, above all encumbrances, equal to at least the penalty of 
the bond;
    (iii) All real property which the surety offers as security must be 
located in the State in which the principal place of business or legal 
residence of the primary obligor is located;
    (iv) The surety must agree not to mortgage, or otherwise encumber, 
any property offered as security while the bond continues in effect 
without first securing the permission of the officer with whom the bond 
is filed; and
    (v) The surety must file with the bond, and annually thereafter so 
long as the bond continues in effect, an affidavit as to the adequacy of 
the security, executed on the appropriate form furnished by the 
appropriate ATF officer.

Partners may not act as sureties upon bonds of their partnership. 
Stockholders of a corporate principal may be accepted as sureties 
provided their qualifications as such are independent of their holdings 
of the stock of the corporation.
    (4) Adequacy of surety. No surety or security shall be accepted if 
it does not adequately protect the interest of the United States.

(26 U.S.C. 7101)

[T.D. ATF-301, 55 FR 47649, Nov. 14, 1990, as amended by T.D. ATF-450, 
66 FR 29028, May 29, 2001]



Sec. 70.282  Single bond in lieu of multiple bonds.

    In the case of bonds required under this part, a single bond will 
not be accepted in lieu of two or more bonds.

(26 U.S.C. 7102)

[T.D. ATF-301, 55 FR 47650, Nov. 14, 1990]

                        Miscellaneous Provisions

    Source: Sections 70.301 through 70.306 added by T.D. ATF-301, 55 FR 
47650, Nov. 14, 1990, unless otherwise noted.



Sec. 70.301  Reproduction of returns and other documents.

    (a) In general. The appropriate ATF officer may contract with any 
Federal agency or any person to have such agency or person process films 
and other photoimpressions of any return, statement, document, or of any 
card, record, or other matter required under the provisions of 26 U.S.C. 
enforced and administered by the Bureau, and make reproductions from 
such films and photoimpressions.
    (b) Safeguards--(1) By private contractor. Any person entering into 
a contract with the Bureau for the performance of any of the services 
described in paragraph (a) of this section shall agree to comply, and to 
assume responsibility for compliance by that person's employees, with 
the following requirements:
    (i) The films or photoimpressions, and reproductions made therefrom, 
shall be used only for the purpose of carrying out the provisions of the 
contract, and information contained in such material shall be treated as 
confidential and shall not be divulged or made known in any manner to 
any person except as may be necessary in the performance of the 
contract;
    (ii) All the services shall be performed under the supervision of 
the person with whom the contract is made or that person's responsible 
employees;
    (iii) All material received for processing and all processed and 
reproduced material shall be kept in a locked and fireproof compartment 
in a secure place when not being worked upon;
    (iv) All spoilage of reproductions made from the film or 
photoimpressions supplied to the contractor shall be destroyed, and a 
statement under the penalties of perjury shall be submitted to the 
Bureau that such destruction has been accomplished; and
    (v) All film, photoimpressions, and reproductions made therefrom, 
shall be transmitted to the Bureau by personal delivery, first-class 
mail, parcel post, or express.
    (2) By Federal agency. Any Federal agency entering into a contract 
with the Bureau for the performance of any services described in 
paragraph (a) of this section, shall treat as confidential

[[Page 1066]]

all material processed or reproduced pursuant to such contract.
    (3) Inspection. The Bureau shall have the right to send its officers 
and employees into the office and plants of Federal agencies and other 
contractors for inspection of the facilities and operations provided for 
the performance of any work contracted or to be contracted for under 
this section.
    (4) Criminal sanctions. For penalty provisions relating to the 
unauthorized use and disclosure of information in violation of the 
provisions of this section, see 26 U.S.C. 7213(c).

(26 U.S.C. 7513)



Sec. 70.302  Fees and costs for witnesses.

    (a) Introduction. Title 26 U.S.C. 7610 provides that the Bureau may 
make payments to certain persons who are summoned to give information to 
the Bureau under 26 U.S.C. 7602 and Sec. 70.22 of this part. Under 26 
U.S.C. 7610 witnesses generally will not be reimbursed for actual 
expenses incurred but instead will be paid in accordance with the 
payment rates established by regulations. Paragraph (b) of this section 
contains elaborations of certain terms found in 26 U.S.C. 7610 and 
definitions of other terms used in the regulations under 26 U.S.C. 7610 
(a) and (b); and paragraphs (c) and (d) of this section contain rules 
and rates applicable to payments under 26 U.S.C. 7610.
    (b) Definitions--(1) Directly incurred costs. Directly incurred 
costs are costs incurred solely, immediately, and necessarily as a 
consequence of searching for, reproducing, or transporting records in 
order to comply with a summons. They do not include a proportionate 
allocation of fixed costs, such as overhead, equipment depreciation, 
etc. However, where a third party's records are stored at an independent 
storage facility that charges the third party a search fee to search 
for, reproduce, or transport particular records requested, these fees 
are considered to be directly incurred by the summoned third party.
    (2) Reproduction cost. Reproduction costs are costs incurred in 
making copies or duplicates of summoned documents, transcripts, and 
other similar material.
    (3) Search costs. Search costs include only the total cost of 
personnel time directly incurred in searching for records or information 
and the cost of retrieving information stored by computer. Salaries of 
persons locating and retrieving summoned material are not included in 
search costs. Also, search costs do not include salaries, fees, or 
similar expenditures for analysis of material or for managerial or legal 
advice, expertise, or research, or time spent for these activities.
    (4) Third party. A third party is any person served with a summons, 
other than a person with respect to whose liability a summons is issued, 
or an officer, employee, agent, accountant, or attorney of that person.
    (5) Third party records. Third party records are books, papers, 
records, or other data in which the person with respect to whose 
liability a summons is issued does not have a proprietary interest at 
the time the summons is served.
    (6) Transportation costs. Transportation costs include only costs 
incurred to transport personnel to search for records or information 
requested and costs incurred solely by the need to transport the 
summoned material to the place of examination. These costs do not 
include the cost of transporting the summoned witness for appearance at 
the place of examination. See paragraph (c)(2) of this section for 
payment of travel expenses.
    (c) Conditions and rates of payments--(1) Basis for payment. Payment 
for search, reproduction, and transportation costs will be made only to 
third parties served with a summons to produce third party records or 
information and only for material requested by the summons. Payment will 
be made only for those costs both directly incurred and reasonably 
necessary. No payment will be made until the third party has 
satisfactorily complied with the summons and has submitted an itemized 
bill or invoice showing specific details concerning the costs to the 
Bureau employee before whom the third party was summoned. If a third 
party charges any other person for any cost for which the third party is 
seeking payment from the Bureau, the amount charged to the other person

[[Page 1067]]

must be subtracted from the amount the Bureau must pay.
    (2) Payment rates. The following rates are established.
    (i) Search costs. (A) For the total amount of personnel time 
required to locate records or information, $8.50 per person hour.
    (B) For retrieval of information stored by computer in the format in 
which it is normally produced, actual costs, based on computer time and 
necessary supplies, except that personnel time for computer search is 
payable only under paragraph (c)(2)(i)(A) of this section.
    (ii) Reproduction costs. (A) For copies of documents $.20 per page.
    (B) For photographers, films and other materials, actual cost, 
except that personnel time is payable only under paragraph (a)(2)(i)(A) 
of this section.
    (iii) Transportation costs. For transportation costs, actual cost, 
except that personnel time is payable only under paragraph (c)(2)(i)(A) 
of this section.
    (d) Appearance fees and allowances--(1) In general. Under 26 U.S.C. 
7610(a)(1) and this paragraph, the Bureau shall pay a summoned person 
certain fees and allowances. No payments will be made until after the 
party summoned appears and has submitted any necessary receipts or other 
evidence of costs to the Bureau employee before whom the person was 
summoned.
    (2) Attendance fees. A summoned person shall be paid an attendance 
fee for each day's attendance. A summoned person shall also be paid the 
attendance fee for the time necessarily occupied in going to and 
returning from the place of attendance at the beginning and end of the 
attendance or at any time during the attendance. The attendance fee is 
the higher of $30 per day or the amount paid under 28 U.S.C. 1821(b) to 
witnesses in attendance at courts of the United States at the time of 
the summoned person's appearance.
    (3) Travel allowances. A summoned person who travels by common 
carrier shall be paid for the actual expenses of travel on the basis of 
the means of transportation reasonably utilized and the distance 
necessarily traveled to and from the summoned person's residence by the 
shortest practical route in going to and returning from the place of 
attendance. Such a summoned person shall utilize a common carrier at the 
most economical rate reasonably available. A receipt or other evidence 
of actual cost shall be furnished. A travel allowance equal to the 
mileage allowance which the Administrator of General Services has 
prescribed, under 5 U.S.C. 5704, for official travel of employees of the 
Federal Government shall be paid to each summoned person who travels by 
privately owned vehicle. Computation of mileage under this paragraph 
shall be made on the basis of a uniform table of distances adopted by 
the Administrator of General Services. Toll charges for toll roads, 
bridges, tunnels and ferries, taxicab fares between places of lodging 
and carrier terminals, and parking fees (upon presentation of a valid 
parking receipt) shall be paid in full to a summoned person incurring 
those expenses.
    (4) Subsistence allowances. A subsistence allowance shall be paid to 
a summoned person (other than a summoned person who is incarcerated) 
when an overnight stay is required at the place of attendance because 
the place is so far removed from the residence of the summoned person as 
to prohibit return thereto from day to day. A subsistence allowance for 
a summoned person shall be paid in an amount not to exceed the maximum 
allowance prescribed by the Administrator of General Services, under 5 
U.S.C. 5702(a), for official travel in the area of attendance by 
employees of the Federal Government. An alien who has been paroled into 
the United States by the Attorney General, under 8 U.S.C. 1182(d)(5)(A), 
or an alien who either has admitted belonging to a class of aliens who 
are deportable or has been determined under 8 U.S.C. 1252(b) to be 
deportable, shall be ineligible to receive the fees or allowances 
provided for under 26 U.S.C. 7610(a)(1).

(26 U.S.C. 7610)



Sec. 70.303  Rules and regulations.

    (a) Issuance. The Director, with the approval of the Secretary, 
shall prescribe all needful rules and regulations for the enforcement of 
provisions of 26 U.S.C. enforced and administered by

[[Page 1068]]

the Bureau (except where this authority is expressly given by 26 U.S.C. 
to any other person other than an officer or employee of the Treasury 
Department), including all rules and regulations as may be necessary by 
reason of any alteration of law in relation to taxes within the 
Director's jurisdiction.
    (b) Retroactivity. The Director, with the approval of the Secretary, 
may prescribe the extent, if any, to which any regulation or Treasury 
decision relating to the laws within the Director's jurisdiction shall 
be applied without retroactive effect. The Director may prescribe the 
extent, if any, to which any ruling relating to the laws within the 
Director's jurisdiction, issued by or pursuant to authorization from the 
Director, shall be applied without retroactive effect.
    (c) Preparation and distribution of regulations, forms, stamps, and 
other matters. The Director, under the direction of the Secretary, shall 
prepare and distribute all the instructions, regulations, directions, 
forms, blanks, stamps, and other matters pertaining to the assessment 
and collection of taxes within the Director's jurisdiction.

(26 U.S.C. 7805)



Sec. 70.304  Place for filing documents other than returns.

    (a) If a document, other than a return, is required to be filed with 
an ATF office, such document may be hand delivered to such office.
    (b) For purposes of this section, a return or document will be 
considered to be hand carried if it is brought to an ATF supervisor of 
the ATF office by the person required to file the return or other 
document, or by the person's agent. Examples of persons who will be 
considered to be agents, for purposes of the preceding sentence, are: 
Members of the taxpayer's family, an employee of the taxpayer, the 
taxpayer's attorney, accountant, or tax advisor, and messengers employed 
by the taxpayer. A return or document will not be considered to be hand 
carried if it is sent to the Bureau through the U.S. Mail.

(26 U.S.C. 6091)

[T.D. ATF-305, 55 FR 47650, Nov. 14, 1990, as amended by T.D. ATF-450, 
66 FR 29028, May 29, 2001]



Sec. 70.305  Timely mailing treated as timely filing.

    (a) General rule. Title 26 U.S.C. 7502 provides that, if the 
requirements of such section are met, a document shall be deemed to be 
filed on the date of the postmark stamped on the cover in which such 
document was mailed. Thus, if the cover containing such document bears a 
timely postmark, the document will be considered filed timely although 
it is received after the last date, or the last day of the period, 
prescribed for filing such document. Title 26 U.S.C. 7502 is applicable 
only to those documents which come within the definition of such term 
provided by paragraph (b) of this section and only if the document is 
mailed in accordance with paragraph (c) of this section and is delivered 
in accordance with paragraph (d) of this section.
    (b) Document defined. The term document, as used in this section, 
means any return, claim, statement, or other document required to be 
filed within a prescribed period or on or before a prescribed date under 
authority of any provisions of 26 U.S.C. enforced and administered by 
the Bureau.
    (c) Mailing requirements. (1) Title 26 U.S.C. 7502 is not applicable 
unless the document is mailed in accordance with the following 
requirements:
    (i) The document must be contained in an envelope or other 
appropriate wrapper, properly addressed to the agency, officer, or 
office with which the document is required to be filed.
    (ii) The document must be deposited within the prescribed time in 
the mail in the United States with sufficient postage prepaid. For this 
purpose, a document is deposited in the mail in the United States when 
it is deposited with the domestic mail service of the U.S. Postal 
Service, as defined by the postal regulations (39 CFR Part 2). Title 26 
U.S.C. 7502 does not apply to

[[Page 1069]]

any document which is deposited with the mail service of any other 
country.
    (iii)(A) If the postmark on the envelope or wrapper is made by the 
U.S. Postal Service, such postmark must bear a date on or before the 
last date, or the last day of the period, prescribed for filing the 
document. If the postmark does not bear a date on or before the last 
date, or the last day of the period, prescribed for filing the document, 
the document will be considered not to be filed timely, regardless of 
when the document is deposited in the mail. Accordingly, the sender who 
relies upon the applicability of 26 U.S.C. 7502 assumes the risk that 
the postmark will bear a date on or before the last date, or the last 
day of the period, prescribed for filing the document, but see paragraph 
(c)(2) of this section, with respect to the use of registered mail or 
certified mail to avoid this risk. If the postmark on the envelope or 
wrapper is not legible, the person who is required to file the document 
has the burden of proving the time when the postmark was made. 
Furthermore, in case the cover containing a document bearing a timely 
postmark made by the U.S. Postal Service is received after the time when 
a document postmarked and mailed at such time would ordinarily be 
received, the sender may be required to prove that it was timely mailed.
    (B) If the postmark on the envelope or wrapper is made other than by 
the U.S. Postal Service, the postmark so made must bear a date on or 
before the last date, or the last day of the period, prescribed for 
filing the document, and the document must be received by the agency, 
officer, or office with which it is required to be filed not later than 
the time when a document contained in an envelope or other appropriate 
wrapper which is properly addressed and mailed and sent by the same 
class of mail would ordinarily be received if it were postmarked at the 
same point of origin by the U.S. Postal Service on the last date, or the 
last day of the period, prescribed for filing the document. However, in 
case the document is received after the time when a document so mailed 
and so postmarked by the U.S. Postal Service would ordinarily be 
received, such document will be treated as having been received at the 
time when a document so mailed and so postmarked would ordinarily be 
received, if the person who is required to file the document establishes 
that it was actually deposited in the mail before the last collection of 
the mail from the place of deposit which was postmarked (except for the 
metered mail) by the U.S. Postal Service on or before the last date, or 
the last day of the period, prescribed for filing the document, that the 
delay in receiving the document was due to a delay in the transmission 
of the mail, and the cause of such delay. If the envelope has a postmark 
made by the U.S. Postal Service in addition to the postmark not so made, 
the postmark which was not made by the U.S. Postal Service shall be 
disregarded, and whether the envelope was mailed in accordance with this 
section shall be determined solely by applying the rules of paragraph 
(c)(1)(iii)(A) of this section.
    (2) If the document is sent by U.S. registered mail, the date of 
registration of the document shall be treated as the postmark date. If 
the document is sent by U.S. certified mail and the sender's receipt is 
postmarked by the postal employee to whom such document is presented, 
the date of the U.S. postmark on such receipt shall be treated as the 
postmark date of the document. Accordingly, the risk that the document 
will not be postmarked on the day that it is deposited in the mail may 
be overcome by the use of registered mail or certified mail.
    (3) As used in this section, the term ``the last date, or the last 
day of the period, prescribed for filing the document'' includes any 
extension of time granted for such filing. Except as provided in 26 
U.S.C. 5061 for the filing of returns and payment of a tax under 26 
U.S.C. subtitle E, when the last date, or the last day of the period, 
prescribed for filing the document falls on a Saturday, Sunday, or legal 
holiday, 26 U.S.C. 7503 is also applicable, so that, in applying the 
rules of this paragraph, the next succeeding day which is not a 
Saturday, Sunday, or legal holiday, shall be treated as the last date, 
or the last day of the period, prescribed for filing the document.

[[Page 1070]]

    (d) Delivery. (1) Title 26 U.S.C. 7502 is not applicable unless the 
document is delivered by U.S. mail to the agency, officer, or office 
with which it is required to be filed. However, if the document is sent 
by registered mail or certified mail, proof that the document was 
properly registered or that a postmarked certified mail sender's receipt 
was properly issued therefor, and that the envelope or wrapper was 
properly addressed to such agency, officer or office shall constitute 
prima facie evidence that the document was delivered to such agency, 
officer or office.
    (2) Title 26 U.S.C. 7502 is applicable only when the document is 
delivered after the last date, or the last day of the period, prescribed 
for filing the document.
    (e) Exceptions. This section shall not apply with respect to:
    (1) The filing of a document in, or the making of a payment to, any 
court,
    (2) Currency or other medium of payment unless actually received and 
accounted for, or
    (3) Returns, claims, statements, or other documents, or payments, 
which are required under any provision of 26 U.S.C. enforced and 
administered by the Bureau or the regulations thereunder to be delivered 
by any method other than by mailing.

(26 U.S.C. 5061 and 7503)



Sec. 70.306  Time for performance of acts other than payment of tax or filing of any return where last day falls on Saturday, Sunday, or legal holiday.

    (a) In general. Title 26 U.S.C. 7503 provides that when the last day 
prescribed under provisions of 26 U.S.C. enforced and administered by 
the Bureau, for the performance of any act falls on a Saturday, Sunday, 
or legal holiday, such act shall be considered performed timely if 
performed on the next succeeding day which is not a Saturday, Sunday, or 
legal holiday. For this purpose, any authorized extension of time shall 
be included in the determining of the last day for performance of any 
act. Title 26 U.S.C. 7503 is not applicable to the filing of returns and 
payment of tax under 26 U.S.C. subtitle E. Title 26 U.S.C. 7503 is 
applicable only in case an act is required under authority of any 
provisions of 26 U.S.C. enforced and administered by the Bureau to be 
performed on or before a prescribed date or within a prescribed period. 
Title 26 U.S.C. 7503 applies to acts to be performed by the taxpayer 
(such as the filing of a claim for credit or refund of tax) and acts to 
be performed by the appropriate ATF officer, (such as, the giving of any 
notice with respect to, or making any demand for the payment of, any 
tax; the assessment or collection of any tax). For rules concerning the 
payment of any tax or filing of any return required under the authority 
of 26 U.S.C. subtitle E relating to alcohol, tobacco, and certain other 
excise taxes, see 26 U.S.C. Secs. 5061 and 6302 and the regulations 
covering the specific commodity.
    (b) Legal holidays. (1) For the purpose of 26 U.S.C. 7503, the term 
``legal holiday'' includes the legal holidays in the District of 
Columbia. Such legal holidays found in 5 U.S.C. 6103(a), as enacted and 
made effective by the Act of November 2, 1983 (97 Stat. 917), are:
    (i) January 1, New Year's Day,
    (ii) Third Monday in January, Birthday of Martin Luther King, Jr.,
    (iii) January 20, when such day is Inauguration Day,
    (iv) Third Monday in February, Washington's Birthday,
    (v) Last Monday in May, Memorial Day,
    (vi) July 4, Independence Day,
    (vii) First Monday in September, Labor Day,
    (viii) Second Monday in October, Columbus Day,
    (ix) November 11, Veterans' Day,
    (x) Fourth Thursday in November, Thanksgiving Day, and
    (xi) December 25, Christmas Day.

When a legal holiday in the District of Columbia falls on a Sunday, the 
next day is a legal holiday in the District of Columbia. For the purpose 
of 26 U.S.C. 7503, when a legal holiday in the District of Columbia 
(other than Inauguration Day) falls on a Saturday it shall be treated as 
falling on the preceding Friday.
    (2) In the case of any statement or other document required to be 
filed, or any other act required under the authority of provisions of 26 
U.S.C. enforced and administered by the Bureau

[[Page 1071]]

to be performed at any office of the Bureau or any other office or 
agency of the United States, located outside the District of Columbia, 
but within an ATF region, the term ``legal holiday'' includes, in 
addition to the legal holidays enumerated in paragraph (b)(1) of this 
section, any statewide legal holiday of the State where the act is 
required to be performed. If the act is performed in accordance with law 
at an office of the Bureau or any other office or agency of the United 
States located in a Territory or possession of the United States, the 
term ``legal holiday'' includes, in addition to the legal holidays 
described in paragraph (b)(1) of this section, any legal holiday which 
is recognized throughout the Territory or possession in which the office 
is located.

(26 U.S.C. 5061 and 7503)

[T.D. ATF-6, 38 FR 32445, Nov. 26, 1973, as amended by T.D. ATF-365, 60 
FR 33674, June 28, 1995; T.D. ATF-450, 66 FR 29028, May 29, 2001]

         General Provisions Relating to Stamps, Marks or Labels



Sec. 70.311  Authority for establishment, alteration, and distribution of stamps, marks, or labels.

    The appropriate ATF officer may establish, and from time to time 
alter, renew, replace, or change the form, style, character, material, 
and device of any stamp, mark, or label under any provision of the law 
relating to Subtitle E of the Internal Revenue Code (or to any provision 
of Subtitle F which relates to Subtitle E).

(26 U.S.C. 6801)

[T.D. ATF-251, 52 FR 19314, May 22, 1987. Redesignated by T.D. ATF-301, 
55 FR 47606, Nov. 14, 1990]

                              Registration



Sec. 70.321  Registration of persons paying a special tax.

    (a) Persons required to register. Every person engaged in a trade or 
business in respect of which a special tax is imposed by one of the 
following sections of the Internal Revenue Code is required to register 
with the Bureau of Alcohol, Tobacco and Firearms.
    (1) Section 5081 (relating to special tax on proprietors of 
distilled spirits plants, bonded wine cellars, bonded wine warehouses, 
and taxpaid wine bottling houses);
    (2) Section 5091 (relating to special tax on brewers);
    (3) Section 5111 (relating to special tax on wholesale dealers in 
liquors and wholesale dealers in beer);
    (4) Section 5121 (relating to special tax on retail dealers in 
liquors and retail dealers in beer);
    (5) Section 5276 (relating to special tax on persons holding permits 
to procure or use tax-free spirits, to procure, deal in, or use 
specially denatured spirits, or to recover specially or completely 
denatured spirits);
    (6) Section 5731 (relating to special tax on manufacturers of 
tobacco products, manufacturers of cigarette papers and tubes, and 
export warehouse proprietors); or
    (7) Section 5802 (relating to importers, manufacturers and dealers 
of National Firearms Act weapons).

For provisions with respect to the registration of persons subject to 
the special tax imposed by section 5131, relating to the tax on persons 
claiming drawback on distilled spirits used in the manufacture of 
certain nonbeverage products, see section 5132 of the Internal Revenue 
Code and 27 CFR part 17 Drawback on Taxpaid Distilled Spirits Used in 
Manufacturing Nonbeverage Products).
    (b) Procedure for registration. The registration required of a 
person by reason of the person being engaged in a trade or business, in 
respect of which one of the special taxes listed in paragraph (a) of 
this section is imposed, shall be accomplished by timely executing and 
filing, in accordance with the instructions relating thereto, ATF Form 
5630.5, Special Tax Registration and Return.

(Approved by the Office of Management and Budget under control number 
1512-0472)

(26 U.S.C. 5802, 7011)

[T.D. ATF-6, 38 FR 32445, Nov. 26, 1973, as amended by T.D. ATF-271, 53 
FR 17549, May 17, 1988. Redesignated and amended by T.D. ATF-301, 55 FR 
47606, 47653, Nov. 14, 1990; T.D. ATF-379, 61 FR 31426, June 20, 1996]]

[[Page 1072]]

                 Crimes, Other Offenses and Forfeitures

    Source: Sections 70.331 through 70.333 added by T.D. ATF-301, 55 FR 
47653, Nov. 14, 1990, unless otherwise noted.



Sec. 70.331  Fraudulent returns, statements, or other documents.

    Any person who willfully delivers or discloses to any officer or 
employee of the Bureau any list, return, account, statement, or other 
document, known by him to be fraudulent or to be false as to any 
material matter, shall be fined not more than $10,000 ($50,000 in the 
case of a corporation) or imprisoned not more than 1 year, or both.

(26 U.S.C. 7207)



Sec. 70.332  Unauthorized use or sale of stamps.

    Any person who buys, sells, offers for sale, uses, transfers, takes 
or gives in exchange, or pledges or gives in pledge, except as 
authorized in the Internal Revenue Code or in regulations made pursuant 
thereto, any stamp, coupon, ticket, book, or other device prescribed by 
the Director under provisions of 26 U.S.C. enforced and administered by 
the Bureau for the collection or payment of any tax imposed thereunder, 
shall, upon conviction thereof, be fined not more than $1,000, or 
imprisoned not more than 6 months, or both.

(26 U.S.C. 7209)



Sec. 70.333  Offenses by officers and employees of the United States.

    Any officer or employee of the United States acting in connection 
with any provisions of 26 U.S.C. enforced and administered by the Bureau 
required to make a written report under the provisions of 26 U.S.C. 
7214(a)(8) shall submit such report to the appropriate ATF officer.

(26 U.S.C. 7214)

[T.D. ATF-301, 55 FR 47653, Nov. 14, 1990, as amended by T.D. ATF-450, 
66 FR 29028, May 29, 2001]



Subpart E--Procedural Rules Relating to Alcohol, Tobacco, Firearms, and 
                               Explosives

    Source: T.D. ATF-251, 52 FR 19325, May 22, 1987. Redesignated by 
T.D. ATF-301, 55 FR 47653, Nov. 14, 1990.

        Provisions Relating to Distilled Spirits, Wines, and Beer



Sec. 70.411  Imposition of taxes, qualification requirements, and regulations.

    (a) Imposition of taxes. Subchapter A of Chapter 51 of the Internal 
Revenue Code of 1954 imposes taxes on distilled spirits (including 
alcohol), wine and beer. Occupational taxes are imposed upon brewers, 
dealers in liquors, and proprietors of distilled spirits plants, bonded 
wine cellars, bonded wine warehouses, and taxpaid wine bottling houses; 
on industrial users of tax-free distilled spirits; on dealers, users, 
and recoverers of specially denatured spirits; and as a prerequisite for 
drawback under section 5134 of the Internal Revenue Code, upon 
manufacturers of nonbeverage products.
    (b) Qualification requirements. Distillers, winemakers, brewers, 
warehousemen, rectifiers, bottlers, dealers in specially denatured 
alcohol, users of tax-free and specially denatured alcohol, and 
wholesalers and importers of liquors, are required to qualify with ATF 
usually by filing notice or application and bond with, and procuring 
permit from, the appropriate ATF officer. Detailed information 
respecting such qualification, including the forms to be used and the 
procedure to be followed, is contained in the respective regulations 
described in paragraph (c) of this section.
    (c) Regulations. The procedural requirements with respect to matters 
relating to distilled spirits, wines, and beer which are within the 
jurisdiction of the ATF are published in the regulations described in 
this paragraph. These regulations contain full information as to the 
general course and method by which the functions concerning liquors are 
channeled and determined, including the nature and requirements

[[Page 1073]]

of formal and informal procedures, the forms, records, reports, and 
other documents required, and the contents of applications, notices, 
registrations, permits, bonds, and other documents. Supplies of 
prescribed forms may be obtained from the ATF Distribution Center, 7943 
Angus Court, Springfield, Virginia 22153. The following is a brief 
description of the several regulations arranged according to the 
principal subjects and operations concerned:
    (1) Establishment and operation of distilled spirits plants. Part 19 
of title 27 CFR contains the regulations relating to the location, 
qualification, construction, arrangement, equipment, and operations 
(including activities incident thereto) of distilled spirits plants for 
the production and/or warehousing (including denaturation), and bottling 
(including bottling in bond) of distilled spirits. Part 19 also contains 
the regulations relating to distilled spirits for fuel use and the 
production of vinegar by the vaporizing process.
    (2) Miscellaneous liquor transactions. Part 29 of 27 CFR contains 
miscellaneous regulations relative to the manufacture, removal, and use 
of stills and condensers, and to the notice, registration, and 
recordkeeping requirements therefor.
    (3) [Reserved]
    (4) Gauging of distilled spirits. Part 30 of title 27 CFR contains 
the regulations that. prescribe the gauging instruments, and methods or 
techniques to be used in measuring distilled spirits (including 
denatured spirits). Tables are provided for use in making the necessary 
computation from gauge data.
    (5) Rules of practice in permit proceedings. Part 71 of title 27 CFR 
contains the rules governing the procedure and practice in connection 
with the disapproval of applications for basic permits, and for the 
issuance of citations for the suspension, revocation, and annulment of 
such permits under sections 3 and 4 of the Federal Alcohol 
Acministration Act (27 U.S.C. 201 et seq.), and disapproval, suspension, 
and revocation of industrial use, operating, withdrawal, and tobacco 
permits under the Internal Revenue Code. Such rules also govern, insofar 
as applicable, any adversary proceeding involving adjudication required 
by statute to oe determined on the record, after opportunity for 
hearing, under laws administered by the Bureau of Alcohol, Tobacco and 
Firearms.
    (6) Basic permit requirements under the Federal Alcohol 
Administration Act. 27 CFR part 1, issued pursuant to the Federal 
Alcohol Administration Act, as amended, contains the requirements 
relative to the issuance under the Act of basic permits to producers, 
rectifiers, blenders, bottlers, warehousemen, importers, and wholesalers 
of distilled spirits, wine, or beer, and the amendment, duration, 
revocation, suspension, or annulment of such permits.
    (7) Bulk sales and bottling of distilled spirits. 27 CFR part 3, 
issued under the Federal Alcohol Administration Act, as amended, 
contains the requirements relative to bulk sales and bottling of 
distilled spirits under the Federal Alcohol Administration Act, 
including the terms of warehouse receipts for distilled spirits in bulk.
    (8) Labeling and advertising of distilled spirits. 27 CFR part 5, 
issued under the Federal Alcohol Administration Act, as amended, 
contains the requirements relative to the labeling and advertising of 
distilled spirits under the Federal Alcohol Administration Act, 
including standards of identity for distilled spirits, standards of fill 
for bottles of distilled spirits, withdrawal of bottled imported 
distilled spirits from customs custody, and the issuance of certificates 
of label approval and certificates of exemption from label approval.
    (9) American viticultural areas. Part 9 of title 27 CFR contains the 
regulations that relate to American viticultural areas. The viticultural 
areas described in these regulations are approved for use as 
appellations of origin in accordance with 27 CFR part 4.
    (10) Production and removal of wine. Part 24 of title 27 CFR 
contains the regulations relative to the establishment and operation of 
bonded wine cellars, including bonded wineries, for the production, 
cellar treatment, and storage of wines, including amelioration, 
sweetening, addition of volatile fruit flavor concentrates, addition of 
wine spirits (including distillates containing aldehydes), blending, and 
other cellar

[[Page 1074]]

treatment; removals; taxpayment; return of unmerchantable taxpaid wine; 
use of wine for distilling material and manufacture of vinegar; and 
record and report requirements.
    (11) Bottling or Packaging of taxpaid wine. Part 24 of title 27 CFR 
contains the regulations relative to the establishment, qualification, 
and operations of taxpaid wine bottling houses on premises other than 
those of a plant operated under part 19 of title 27 CFR, and to the 
bottling and packaging of taxpaid United States and foreign wines at 
such premises.
    (12) Nonindustrial use of distilled spirits and wine. 27 CFR part 2, 
issued under the Federal Alcohol Administration Act, as amended, 
specifies what uses of distilled spirits and wine are considered 
``nonindustrial,'' as that term is used in section 17 of the Federal 
Alcohol Administration Act.
    (13) Labeling and advertising of wine. 27 CFR part 4, issued under 
the Federal Alcohol Administration Act, as amended, contains the 
requirements relative to the labeling and advertising of wine under the 
Federal Alcohol Administration Act, including standards of identity for 
wine, standards of fill for containers of wine, the withdrawal of 
imported wine from customs custody, and the issuance of certificates of 
label approval and certificates of exemption from label approval.
    (14) Establishment and operations of breweries and experimental 
breweries. Part 25 of title 27 CFR contains the regulations relating to 
the production (including concentration and reconstitution incident 
thereto) and removal of beer and cereal beverages. The regulations cover 
the location, construction, equipment, and operations of breweries; and 
the qualification of such establishments, including the ownership, 
control, and management thereof, and the establishment and operations of 
experimental breweries.
    (15) Labeling and advertising of malt beverages. 27 CFR part 7, 
issued under the Federal Alcohol Administration Act, as amended, 
contains the requirements relative to the labeling and advertising of 
malt beverages (beer) under the Federal Alcohol Administration Act, 
including withdrawal of imported malt beverages from customs custody, 
and the issuance of certificates of label approval.
    (16) Liquor dealers. Part 194 of title 27 CFR contains the 
regulations relative to the special (occupational) taxes imposed on 
wholesale and retail dealers in liquors, wholesale and retail dealers in 
beer, and limited retail dealers; restrictions on purchases of distilled 
spirits; reuse or refilling of liquor bottles; sale or possession of 
refilled or used liquor bottles; repackaging of alcohol for industrial 
use; recordkeeping and reporting requirements; and provisions relating 
to entry of premises and inspection of records.
    (17) Drawback of tax on spirits used in nonbeverage products. Part 
17 of title 27 CFR contains the regulations which relate to obtaining 
drawback of internal revenue tax on distilled spirits used in the 
manufacture or production of medicines, medicinal preparations, food 
products, flavors, or flavoring extracts, which are unfit for beverage 
purposes.
    (18) Production of volatile fruit-flavor concentrates. Part 18 of 
title 27 CFR contains the regulations relating to the manufacture, 
removal, sale, storage, transfer in bond, transportation, recordkeeping 
and reporting requirements, and use of volatile fruit flavor 
concentrates. It includes provisions regarding the location, 
qualification, use, and operations of concentrate plants.
    (19) Tied-House. 27 CFR part 6, issued under the Federal Alcohol 
Administration Act, as amended, specifies practices which are prohibited 
by subsection (b) of section 5 of the Act and provides the exception to 
these prohibitions. This part applies only to transactions between 
industry members and retailers.
    (20) Exclusive outlets. 27 CFR part 8, issued under the Federal 
Alcohol Administration Act, as amended, specifies practices which are 
prohibited by subsection (a) of section 5 of the Act. This part applies 
only to transactions between industry members and retailers.
    (21) Commercial bribery. 27 CFR part 10, issued under the Federal 
Alcohol Administration Act, as amended, specifies practices which are 
prohibited by subsection (c) of section 5 of the Act.

[[Page 1075]]

This part applies to transactions between industry members and 
employees, officers, or representatives of trade buyers.
    (22) Consignment sales. 27 CFR part 11, issued under the Federal 
Alcohol Administration Act, as amended, specifies sales arrangements 
prohibited by subsection (d) of section 5 of the Act and contains 
guidelines concerning the return of distilled spirits, wines, and malt 
beverages from a trade buyer. The regulations in this part apply to 
transactions between industry members and trade buyers.
    (23) Distribution and use of denatured alcohol and rum. Part 20 of 
title 27 CFR contains the regulations relating to the procurement, use, 
disposition, and recovery of denatured alcohol, specially denatured rum, 
and articles containing denatured spirits; and includes requirements in 
respect to industrial use and withdrawal permits; and the packaging, 
labeling, sales, rebottling, and reprocessing of articles containing 
specially denatured spirits.
    (24) Formulas for denatured alcohol and rum. Part 21 of title 27 CFR 
contains the regulations relating to the formulation of completely 
denatured alcohol, specially denatured alcohol, and specially denatured 
rum; to the use of specially denatured spirits; and to the 
specifications for denaturants. The procedural requirements relative to 
the production of denatured alcohol and specially denatured rum are 
prescribed in part 19 of title 27 CFR, and those relative to the 
distribution and use of denatured alcohol and specially denatured rum 
are prescribed in part 20 of title 27 CFR.
    (25) Distribution and use of tax-free alcohol. Part 22 of title 27 
CFR contains the regulations relating to tax-free alcohol and covers the 
procurement, storage, use, and recovery of such alcohol; and included 
requirements in respect to industrial use and withdrawal permits.
    (26) Liquors and articles from Puerto Rico and the Virgin Islands. 
Part 26 of title 27 CFR contains the regulations relating to the 
production, bonded warehousing, and withdrawal of distilled spirits, and 
denatured spirits, and the manufacture of articles in Puerto Rico and 
the Virgin Islands to be brought into the United States free of tax and 
the collection of internal revenue taxes on taxable alcoholic products 
coming into the United States from Puerto Rico and the Virgin Islands. 
Regulations respecting spirits produced in Puerto Rico or the Virgin 
Islands and brought into the United States and transferred from customs 
custody to internal revenue bond are also contained in this part.
    (27) Importation of liquors. Part 251 of title 27 CFR contains the 
substantive and procedural requirements relative to the importation of 
distilled spirits, wines, and beer into the United States from foreign 
countries including special (occupational) and commodity taxes, permits, 
marking, branding, and labeling of containers and packages.
    (28) Exportation of liquors. Part 252 of title 27 CFR contains the 
regulations relating to exportation including, where applicable, lading 
for use on vessels and aircraft, transfer to a foreign-trade zone, or 
transfer to a manufacturing bonded warehouse, Class 6, of distilled 
spirits (including specially denatured spirits), beer (including beer 
concentrate), and wine, and transfer of distilled spirits and wine for 
deposit in a customs bonded warehouse, whether without payment of tax, 
free of tax, or with benefit of drawback. It includes requirements with 
respect to removal, shipment, lading, deposit, evidence of exportation, 
losses, claims, and bonds.

(Approved by the Office of Management and Budget under control number 
1512-0472)

[T.D. ATF-251, 52 FR 19325, May 22, 1987, as amended by T.D. ATF-271, 53 
FR 17549, May 17, 1988; T.D. ATF-299, 55 FR 24989, June 19, 1990. 
Redesignated and amended by T.D. ATF-301, 55 FR 47606, 47653, Nov. 14, 
1990; T.D. ATF-376, 61 FR 31031, June 19, 1996; T.D. ATF-379, 61 FR 
31426, June 20, 1996; T.D. ATF-432, 65 FR 69253, Nov. 16, 2000; T.D. 
ATF-450, 66 FR 29028, May 29, 2001; T.D. ATF-459, 66 FR 38550, July 25, 
2001; T.D. ATF-463, 66 FR 42734, Aug. 15, 2001; T.D. ATF-462, 66 FR 
42737, Aug. 15, 2001]



Sec. 70.412  Excise taxes.

    (a) Collection. Taxes on distilled spirits, wines, and beer are paid 
by returns. If the person responsible for paying the taxes has filed a 
proper bond, such person may file semimonthly returns, with proper 
remittances, to cover the taxes incurred on distilled spirits,

[[Page 1076]]

wines, and beer during such semimonthly period. Payment must accompany 
the return unless required to be made by electronic fund transfer (EFT). 
If the taxpayer is not qualified to defer taxpayment, or has been placed 
on a prepayment basis, the taxpayer must prepay the tax on the distilled 
spirits, wines, or beer. Distilled spirits, wines, and beer tax returns 
are filed in accordance with the instruction on the return forms, which 
are furnished to industry members by ATF. Special tax stamps are issued 
to denote the payment of special (occupational) taxes by liquor dealers, 
brewers, manufacturers of nonbeverage products, and industrial users of 
tax-free distilled spirits; by dealers, users, and recoverers of 
specially denatured spirits; and by proprietors of distilled spirits 
plants, bonded wine cellars, bonded wine warehouses, and taxpaid wine 
bottling houses. Detailed information respecting the payment of tax on 
liquors and the payment of occupational taxes, including the forms to be 
used and procedures to be followed, is contained in the respective 
regulations described in Sec. 70.411(c).
    (b) Assessment. If additional or delinquent tax liability is 
disclosed by an investigation, or by an examination of records, of a 
qualified plant or permittee, a notice (except where delay may 
jeopardize collection of the tax, or where the amount involved is 
nominal or the result of an evident mathematical error) is sent to the 
taxpayer advising of the basis and amount of the liability and affording 
the taxpayer an opportunity to submit a protest, with supporting facts, 
or to request a conference.

(Approved by the Office of Management and Budget under control number 
1512-0472)

[T.D. ATF-251, 52 FR 19325, May 22, 1987, as amended by T.D. ATF-271, 53 
FR 17549, May 17, 1988. Redesignated and amended by T.D. ATF-301, 55 FR 
47606, 47653, Nov. 14, 1990; T.D. ATF-450, 66 FR 29028, May 29, 2001]



Sec. 70.413  Claims.

    (a) Claims for remission. When distilled spirits (including 
distilling material and denatured spirits), wine, or beer on which the 
tax has not been paid or determined is lost, and the person liable for 
payment of the tax thereon desires to be relieved from such liability, 
such person may file claim on Form 5620.8 for remission of tax on the 
quantity that was lost. The appropriate ATF officer may, in any event, 
require such a claim to be filed, and will require it if circumstances 
indicate that the loss was caused by theft or, in the case of distilled 
spirits (including distilling material), unauthorized voluntary 
destruction. On receipt of a claim the appropriate ATF officer makes a 
factual determination, and notifies the claimant of allowance or 
rejection of the claim. If the claim is rejected, and circumstances so 
warrant, the appropriate ATF officer will take appropriate steps to 
collect the tax.
    (b) Claims for abatement. When the tax on distilled spirits, wines, 
or beer is assessed and the taxpayer thinks that the tax is not due 
under the law, such taxpayer may file a claim for abatement of the tax 
on ATF Form 5620.8 with the officer who made demand for the tax. Such 
officer may call upon the taxpayer to file a bond in double the amount 
of the tax in order to insure collection of the tax if the claim is 
rejected. When the claim is acted upon, the taxpayer is notified of the 
allowance or rejection of the claim. If the claim is rejected, such 
officer, will initiate action to collect the tax.
    (c) Claims for refund--(1) Taxes illegally, erroneously, or 
excessively collected. A claim for refund of taxes illegally, 
erroneously, or excessively collected may be filed by the taxpayer with 
the officer who collected the tax. Such claim must be filed within three 
years (two years under certain circumstances) after the date of payment 
of the tax. If the claim is rejected, the taxpayer is notified of the 
rejection by registered or certified mail, and the taxpayer may then 
bring suit in the U.S. District Court or the Court of Claims for 
recovery of the tax. Such suits must be filed generally within two years 
from the date of mailing of the rejection notice. If the claim is 
allowed, a check for the amount of the refund and allowable interest is 
forwarded to the taxpayer; however, if there are other unpaid taxes 
outstanding against the taxpayer, the overpayment may be applied to the

[[Page 1077]]

outstanding taxes and the balance, if any, refunded.
    (2) Taxes on liquors lost, destroyed, returned to bond, or taken as 
samples by the United States. A taxpayer may, subject to the conditions 
in the appropriate regulations, file claim on Form 5620.8 for refund of 
tax paid on:
    (i) Spirits returned to bonded premises, lost by accident or 
disaster, or taken as samples by the United States, or
    (ii) Wine returned to bond as unmerchantable, or lost by disaster, 
or
    (iii) Beer returned to a brewery or voluntarily destroyed, or lost, 
whether by theft or otherwise, or destroyed or otherwise rendered 
unmerchantable by fire, casualty, or act of God. If the claim is 
allowed, a check for the amount of the refund is forwarded to the 
claimant; except, that where there are any unpaid taxes outstanding 
against the claimant, the refund may be applied to the outstanding taxes 
and a check for the balance, if any, forwarded to the claimant. If the 
claim is rejected, a copy of the claim giving the reasons for rejection 
is forwarded to the claimant.
    (d) Claims for allowance, credit, or relief. A qualified permittee, 
manufacturer, or proprietor may, subject to the conditions in the 
appropriate regulations, file claim on Form 5620.8 for allowance of 
loss, credit of tax, or relief from tax liability, as applicable, on
    (1) Spirits returned to bonded premises, lost or destroyed on bonded 
premises, or in transit thereto, or lost by accident or disaster;
    (2) Wine lost or destroyed on bonded premises or in transit thereto 
and unmerchantable domestic wine returned to bond;
    (3) Beer returned to a brewery or voluntarily destroyed, or lost, 
whether by theft or otherwise, or destroyed or otherwise rendered 
unmerchantable by fire, casualty, or act of God;
    (4) Denatured spirits lost or destroyed in bond, or lost on the 
premises of a qualified dealer or user or in transit to such premises; 
and
    (5) Tax-free spirits lost on the premises of a qualified user or in 
transit to such premises.
    (e) Claims for payment-disaster losses. When distilled spirits, 
wines, rectified products, or beer held or intended for sale is lost, 
rendered unmarketable, or condemned by a duly authorized official by 
reason of a ``major disaster'' as determined by the President of the 
United States, the person holding such product for sale at that time 
may, subject to the conditions in the appropriate regulations, file 
claim on Form 5620.8 of the region in which the product was lost, 
rendered unmarketable, or condemned, for payment of an amount equal to 
the internal revenue taxes paid or determined and any customs duties 
paid thereon. Claims must be filed within 6 months from the date on 
which the President makes the determination that the disaster has 
occurred. The determination date is construed to mean the date the 
Director, Office of Emergency Preparedness, identifies the specific 
disaster area.

(Approved by the Office of Management and Budget under control number 
1512-0141)

[T.D. ATF-251, 52 FR 19325, May 22, 1987. Redesignated and amended by 
T.D. ATF-301, 55 FR 47606, 47653, Nov. 14, 1990; T.D. ATF-450, 66 FR 
29028, May 29, 2001]



Sec. 70.414  Preparation and filing of claims.

    (a) Distilled spirits at distilled spirits plants. Procedural 
instructions in respect of claims for remission, abatement, credit, or 
refund of tax on spirits (including denatured spirits) lost or destroyed 
on or lost in transit to, or on spirits returned to, the premises of a 
distilled spirits plant are contained in Part 19 of Title 27 CFR. It is 
not necessary to file a claim for credit of tax on taxpaid samples taken 
by appropriate ATF officers from distilled spirits plants, as the 
appropriate ATF officer will allow credit, without claim, for tax on 
such samples.
    (b) Specially denatured spirits. Procedural instructions in respect 
of claims for allowance of loss on specially denatured spirits lost on 
the premises of a bonded dealer or user, or while in transit to such 
premises, are contained in part 20 of title 27 CFR.
    (c) Tax-free alcohol. Procedural instructions in respect of claims 
for allowance of loss on tax-free alcohol lost on the premises of a 
qualified user, or while in transit to such premises, are contained in 
part 22 of title 27 CFR.

[[Page 1078]]

    (d) Wine spirits and wine at bonded wine cellar. Procedural 
instructions in respect of claims for:
    (1) Remission of tax on wine spirits lost on the premises of a 
bonded wine cellar or in transit thereto,
    (2) Allowance of losses of wine in bond, and
    (3) Credit or refund of tax paid on unmerchantable domestic wine 
returned to bond are contained in part 24 of title 27 CFR.
    (e) Beer. Procedural instructions in respect of claims for refund or 
credit of tax which has been paid (or allowance, credit, or relief of 
tax liability if the tax has not been paid) on domestic beer returned to 
a brewery or voluntarily destroyed; or lost, whether by theft or 
otherwise, or destroyed or otherwise rendered unmerchantable by fire, 
casualty, or act of God are contained in part 25 of title 27 CFR.
    (f) Distilled spirits, wines, or beer for export. Procedural 
instructions in respect of claims for:
    (1) Drawback of internal revenue tax on distilled spirits, wines, or 
beer for export, use as supplies on certain vessels or aircraft, or 
deposit in a foreign-trade zone, or deposit of distilled spirits or wine 
in a customs bonded warehouse, and
    (2) Remission of tax on distilled spirits, specially denatured 
spirits, wines, or beer, withdrawn without payment or free of tax and 
lost during transportation to the port of export, customs bonded 
warehouse (distilled spirits and wine only), manufacturing bonded 
warehouse, vessel or aircraft, or foreign-trade zone, as applicable, are 
contained in part 252 of title 27 CFR. Procedural instructions as to 
claims respecting export with benefit of drawback of tax on domestic 
distilled spirits products containing spirits from Puerto Rico or the 
Virgin Islands are contained in parts 19 and 252 of title 27 CFR.
    (g) Miscellaneous. Procedural instructions are contained in 27 CFR 
Part 70, subparts F and G in respect of claims for--
    (1) Refund or credit of tax on distilled spirits, wines or beer 
where such refund or credit is claimed on the grounds that tax was 
assessed or collected erroneously, illegally, without authority, or in 
any manner wrongfully, or on the grounds that such amount was excessive, 
and where such refund or credit is subject to the limitations imposed by 
section 6423 of the Internal Revenue Code.
    (2) Payment of an amount equal to the internal revenue tax paid or 
determined and customs duties paid on distilled spirits, wines, 
rectified products, and beer previously withdrawn, which were lost, 
rendered unmarketable, or condemned by a duly authorized official by 
reason of a major disaster occurring in the United States after June 30, 
1959.
    (h) Special taxes. Procedural instructions in respect of claims for 
abatement of assessments or refund of overpayments of liquor dealers 
occupational taxes and penalties are contained in part 194 of title 27 
CFR. When claim is filed for refund of an occupational tax for which a 
stamp was issued, the stamp (or a Certificate in Lieu of Lost or 
Destroyed Special Tax Stamp, accompanied by affidavits attesting to loss 
or destruction of the stamp) must be surrendered with the claim. Such 
claims must be submitted within 3 years from the date of payment of the 
tax.
    (i) Low wines at vinegar plants. Procedural instructions in respect 
of claims for remission of tax on low wines (distilled spirits) lost at 
vinegar plants producing vinegar by the vaporizing process are contained 
in part 19 of title 27 CFR.
    (j) Distilled spirits used in nonbeverage products. Procedural 
instructions in respect of claims for drawback of excise tax and claims 
for refund of special (occupational) tax, submitted by persons using 
distilled spirits in the manufacture of medicines, medicinal 
preparations, food products, flavors, flavoring extracts, or perfume, 
which are unfit for beverage purposes, are contained in part 17 of title 
27 CFR.
    (k) Reopening claims. A claimant who wishes to have a rejected claim 
reopened must, within the applicable statutory period of limitations, 
submit a written application to the officer who

[[Page 1079]]

originally rejected the claim for reconsideration of the claim. Such 
application must show that the additional evidence to be presented is 
new and material, and that such evidence was unknown to the claimant, or 
unobtainable by the claimant, when the claim was previously under 
consideration.
    (l) Claimant's rights under law and regulations. Before final action 
has been taken on a claim, a claimant who, by reason of an oversight, 
misunderstanding of law and regulations, miscalculation, or other cause, 
did not claim the full amount of abatement, refund, credit, or drawback, 
as the case may be, of tax to which the claimant is legitimately 
entitled, may amend a valid claim, and statements filed in support 
thereof, in instances where such a claim is deficient in establishing 
the claimants eligibility to the rights extended to such claimant under 
law and regulations.

(Approved by the Office of Management and Budget under control number 
1512-0141)

[T.D. ATF-251, 52 FR 19325, May 22, 1987, as amended by T.D. ATF-299, 55 
FR 24989, June 19, 1990. Redesignated and amended by T.D. ATF-301, 55 FR 
47606, 47654, Nov. 14, 1990; T.D. ATF-376, 61 FR 31031, June 19, 1996; 
T.D. ATF-379, 61 FR 31426, June 20, 1996; T.D. ATF-450, 66 FR 29028, May 
29, 2001]



Sec. 70.415  Offers in compromise.

    Procedure in the case of offers in compromise of liabilities under 
26 U.S.C. chapter 51 and of penalties for violation of the Federal 
Alcohol Administration Act, is set forth in Secs. 70.482 through 70.484.

[T.D. ATF-301, 55 FR 47654, Nov. 14, 1990]



Sec. 70.416  Application for approval of interlocking directors and officers under section 8 of the Federal Alcohol Administration Act.

    Any person who is an officer or director of a corporation now 
engaged in business as a distiller, rectifier, or blender of distilled 
spirits, or of an affiliate thereof, who desires to take office in other 
companies similarly engaged, must obtain permission to do so from the 
appropriate ATF officer. Applications for such permission to take office 
must be prepared and filed in accordance with instructions available 
from the appropriate ATF officer.

[T.D. ATF-450, 66 FR 29029, May 29, 2001]



Sec. 70.417  Rulings.

    The procedure for rulings in alcohol tax matters is set forth in 
Sec. 70.471.

[T.D. ATF-301, 55 FR 47654, Nov. 14, 1990]



Sec. 70.418  Conferences.

    Any person desiring a conference with ATF, relative to any matter 
arising in connection with such person's operations, will be accorded 
such a conference upon request. No formal requirements are prescribed 
for such conference.

[T.D. ATF-450, 66 FR 29029, May 29, 2001]



Sec. 70.419  Representatives.

    Title 31 CFR part 8 is applicable to all representatives of the 
taxpayer, for any conference with ATF.

[T.D. ATF-450, 66 FR 29029, May 29, 2001]



Sec. 70.420  Forms.

    For forms to be used, see Sec. 70.411(c).

[T.D. ATF-301, 55 FR 47654, Nov. 14, 1990]

 Provisions Relating to Tobacco Products, and Cigarette Papers and Tubes



Sec. 70.431  Imposition of taxes; regulations.

    (a) Taxes. Subchapter A of chapter 52 of the Internal Revenue Code 
of 1954, as amended, imposes taxes on tobacco products, and cigarette 
papers and tubes manufactured in or imported into the United States. 
Occupational taxes are imposed by manufacturers of tobacco products, 
manufacturers of cigarette papers and tubes, and export warehouse 
proprietors. Subchapter D of chapter 78 of the Internal Revenue Code 
imposes a tax (equal to the internal revenue tax imposed in the United 
States upon the like articles of merchandise of domestic manufacture) on 
tobacco products, and cigarette papers and tubes of Puerto Rican and 
Virgin Islands manufacture brought into the United States and withdrawn 
for consumption or sale.

[[Page 1080]]

    (b) Regulations. The procedural requirements with respect to matters 
relating to tobacco products, and cigarette papers and tubes are 
contained in the regulations listed below:
    (1) Part 71 of title 27 CFR relates to the procedure and practice in 
connection with the disapproval of applications for permits, and the 
suspension and revocation of permits, under chapter 52 of the Internal 
Revenue Code.
    (2) Part 40 of title 27 CFR relates to the manufacture of tobacco 
products, the payment by manufacturers of tobacco products of internal 
revenue taxes imposed by chapter 52 of the Internal Revenue Code, and 
the qualification of and operations by manufacturers of tobacco 
products.
    (3) Part 275 of title 27 CFR relates to tobacco products, and 
cigarette papers and tubes imported into the United States from a 
foreign country or brought into the United States from Puerto Rico, the 
Virgin Islands, or a possession of the United States; the removal of 
cigars from a customs bonded manufacturing warehouse, Class 6; and the 
release of such articles from customs custody, without payment of 
internal revenue tax or customs duty attributable to the internal 
revenue tax.
    (4) Part 285 of title 27 CFR relates to the manufacture of cigarette 
papers and tubes, the payment by manufacturers of cigarette papers and 
tubes of internal revenue taxes imposed by chapter 52 of the Internal 
Revenue Code, and the qualification of and operations by manufacturers 
of such articles.
    (5) Part 44 of title 27 CFR relates to the exportation (including 
supplies for vessels and aircraft and transfers to a foreign-trade zone) 
of tobacco products, and cigarette papers and tubes, without payment of 
tax, or with benefit of drawback of tax, and the qualification of and 
operations by export warehouse proprietors.
    (6) Part 45 of title 27 CFR relates to the removal of tobacco 
products, and cigarette papers and tubes, without payment of tax, for 
use of the United States.
    (7) Part 46 of title 27 CFR relates to the provisions of a 
miscellaneous nature or not of continuing application. Included are 
regulations relating to:
    (i) Limitations imposed by section 6423 of the Internal Revenue Code 
on the refund or credit of tax paid or collected on tobacco products, 
and cigarette papers and tubes;
    (ii) Losses of tobacco products, and cigarette papers and tubes 
caused by disasters occurring in the United States on or after September 
3, 1958; and
    (iii) Purchase, receipt, possession, offering for sale, or sale or 
other disposition of tobacco products by dealers in such products.

(Approved by the Office of Management and Budget under control number 
1512-0472)

[T.D. ATF-251, 52 FR 19325, May 22, 1987, as amended by T.D. ATF-271, 53 
FR 17549, May 17, 1988. Redesignated and amended by T.D. ATF-301, 55 FR 
47606, 47654, Nov. 14, 1990; T.D. ATF-457, 66 FR 32219, June 14, 2001; 
T.D. ATF-460, 66 FR 39093, July 27, 2001; T.D. ATF-463, 66 FR 42734, 
Aug. 15, 2001; T.D. ATF-464, 66 FR 43480, Aug. 20, 2001; T.D. ATF-469, 
66 FR 56758, Nov. 13, 2001]



Sec. 70.432  Qualification and bonding requirements.

    (a) Manufacturers of tobacco products and proprietors of export 
warehouses. Every person, before commencing business as a manufacturer 
of tobacco products or as a proprietor of an export warehouse, is 
required to qualify with the Bureau of Alcohol, Tobacco and Firearms by 
making application for a permit and filing bond and other required 
documents and obtaining a permit.
    (b) Manufacturers of cigarette papers and tubes. Every person, 
before commencing business as a manufacturer of cigarette papers and 
tubes, is required to qualify with the Bureau of Alcohol, Tobacco and 
Firearms by filing bond and other required documents
    (c) Puerto Rican manufacturers of tobacco products. Every 
manufacturer of tobacco products in Puerto Rico who desires to defer 
payment in Puerto Rico of the internal revenue tax imposed by section 
7652(a) of the Internal Revenue Code on tobacco products of Puerto Rican 
manufacture coming into the United States must file a bond with the 
regional director (compliance). Such bond is conditioned on the 
principal's paying, at the time and in the manner prescribed in the 
regulations,

[[Page 1081]]

the full amount of tax computed on the tobacco products which are 
released for shipment to the United States. No bond is required if the 
tax is prepaid.
    (d) Proprietors of customs warehouses. Every proprietor of a customs 
bonded manufacturing warehouse, Class 6, who desires to remove under 
part 44 tax-exempt cigars for exportation (including supplies for 
vessels and aircraft), or for delivery for subsequent exportation, is 
required to file a bond. However, removal of cigars for sale or 
consumption in the United States is subject to customs regulations.
    (e) Drawback of tax. Taxpaid tobacco products, and cigarette papers 
and tubes may be exported with benefit of drawback of tax. Drawback may 
be allowed only to the person who paid the tax on such articles and who 
files a claim and otherwise complies with the provisions contained in 
the applicable regulations referred to in Sec. 70.431. As a condition 
precedent to the allowance of any drawback claim, the claimant is 
required to file a bond in an amount not less than the amount of tax 
covered in the claim.
    (f) General. Detailed information relating to the qualification and 
bonding requirements, including the forms to be used and the procedure 
to be followed, is fully set forth in the regulations referred to in 
Sec. 70.431.

[T.D. ATF-251, 52 FR 19325, May 22, 1987. Redesignated and amended by 
T.D. ATF-301, 55 FR 47606, 47654, Nov. 14, 1990; T.D. ATF-450, 66 FR 
29029, May 29, 2001; T.D. ATF-464, 66 FR 43480, Aug. 20, 2001]



Sec. 70.433  Collection of taxes.

    (a) Tobacco products. Taxes on tobacco products are paid by the 
manufacturer on the basis of a return. If the manufacturer has filed a 
proper bond, such manufacturer may defer payment at the time of removal 
and file semimonthly returns to cover the taxes. If the manufacturer has 
not filed such a bond or if the manufacturer has defaulted in any way in 
paying the taxes, the manufacturer is required to file a prepayment 
return prior to removal of such products, and to continue so doing until 
the appropriate ATF officer finds that the revenue will not be 
jeopardized by deferred payment. Tax returns, with remittances, are 
filed by the domestic manufacturer in accordance with instructions on 
the appropriate ATF form. Taxes on cigars produced in a customs bonded 
manufacturing warehouse, Class 6, are paid on the basis of a return to 
the director of customs in accordance with customs procedures and 
regulations. Taxes on tobacco products imported or brought into the 
United States from a foreign country, Puerto Rico, the Virgin Islands, 
or a possession of the United States are paid by the importer to the 
director of customs on the basis of a return made on the customs form by 
which release from customs custody is to be effected. However, taxes on 
tobacco products manufactured in Puerto Rico and brought into the United 
States may be prepaid in Puerto Rico on the basis of a return. If a 
Puerto Rican manufacturer has filed a proper bond, such manufacturer may 
defer payment at the time of release for shipment to the United States 
and file a semimonthly return to cover the taxes. If the manufacturer 
has not filed such a bond or if such manufacturer has defaulted in any 
way in payment of taxes, the manufacturer must file a prepayment return 
prior to removal of such products for shipment to the United States, and 
continue to do so until the regional director (compliance) finds that 
the revenue will not be jeopardized by deferred payment. Tax returns, 
with remittances, are filed by the domestic manufacturer in accordance 
with instructions on the appropriate ATF form.
    (b) Cigarette papers and tubes. Taxes on cigarette papers and tubes 
are paid by the manufacturer on the basis of a semimonthly return. Such 
returns, with remittances, are filed in accordance with the instructions 
on the appropriate ATF form. Taxes on cigarette papers and tubes 
imported or brought into the United States from a foreign country, 
Puerto Rico, the Virgin Islands, or a possession of the United States 
are paid to the director of customs before removal on the basis of a 
return made on the customs form by which release from customs custody is 
effected. However, taxes on cigarette papers and tubes of Puerto Rican 
manufacture which are to be shipped to the

[[Page 1082]]

United States may be prepaid in Puerto Rico on the basis of a return.
    (c) Special tax. Special (occupational) taxes are paid by 
manufacturers of tobacco products, manufacturers of cigarette papers and 
tubes, and export warehouse proprietors on the basis of a return. 
Special tax stamps are issued to denote the payment of special 
(occupational) taxes.
    (d) General. Detailed information about the payment of taxes on 
tobacco products, and cigarette papers and tubes, including the forms to 
be used, records to be kept, and reports and inventories to be filed, is 
contained in the respective regulations referred to in Sec. 70.431.

(Approved by the Office of Management and Budget under control number 
1512-0472)

[T.D. ATF-251, 52 FR 19325, May 22, 1987, as amended by T.D. ATF-271, 53 
FR 17549, May 17, 1988. Redesignated and amended by T.D. ATF-301, 55 FR 
47606, 47654, Nov. 14, 1990; T.D. ATF-450, 66 FR 29029, May 29, 2001]



Sec. 70.434  Assessments.

    When additional or delinquent tax liability on tobacco products, and 
cigarette papers and tubes is disclosed by an investigation or by an 
examination of the taxpayer's records, a notice (except where delay may 
jeopardize collection of the tax, or where the amount is nominal or the 
result of an evident mathematical error) is forwarded to the taxpayer 
indicating the basis for, and amount of, the liability and affording the 
taxpayer an opportunity to show cause, in writing, against assessment.

[T.D. ATF-251, 52 FR 19325, May 22, 1987. Redesignated by T.D. ATF-301, 
55 FR 47606, Nov. 14, 1990]



Sec. 70.435  Claims.

    (a) General. Detailed requirements, including the procedure to be 
followed in the filing of a claim, the form to be used, the supporting 
documents which must be submitted, the time within which a claim must be 
filed, and any other limitations or instructions are contained in the 
applicable regulations referred to in Sec. 70.431.
    (b) Abatement of assessment. Abatement of the unpaid portion of an 
assessment of any tax on tobacco products, and cigarette papers and 
tubes, or any liability in respect thereof, may be allowed to the extent 
that such assessment is excessive in amount, is assessed after 
expiration of the applicable period of limitation, or is erroneously or 
illegally assessed.
    (c) Allowance of tax. Relief from the payment of tax on tobacco 
products, and cigarette papers and tubes may be extended to a 
manufacturer by approval of a claim for allowance where such articles, 
after removal from the factory upon determination of tax and prior to 
the time for payment of such tax, are lost (otherwise than by theft) or 
destroyed by fire, casualty, or act of God, while in the possession or 
ownership of the manufacturer who removed such articles, or are 
withdrawn by the manufacturer from the market.
    (d) Remission of tax liability. Remission of the tax liability on 
tobacco products, and cigarette papers and tubes may be extended to a 
manufacturer or export warehouse proprietor liable for the tax, where 
such articles in bond are lost (otherwise than by theft) or destroyed by 
fire, casualty, or act of God, while in the possession or ownership of 
the manufacturer or export warehouse proprietor.
    (e) Refund of tax. Taxes paid on tobacco products, cigarette papers 
and tubes lost (otherwise than by theft) or destroyed by fire, casualty, 
or act of God, while in the possession or ownership of the manufacturer, 
importer, or export warehouse proprietor, or withdrawn from the market, 
may be refunded. Refunds may also be made within certain limitations for 
overpayments of tax on tobacco products, and cigarette papers and tubes.
    (f) Losses caused by disaster. Payment of an amount equal to the 
amount of internal revenue taxes paid or determined and customs duties 
paid on tobacco products, and cigarette papers and tubes removed from 
the factory or released from customs custody, which are lost, rendered 
unmarketable, or condemned by a duly authorized official by reason of a 
``major disaster'' as determined by the President of the United States 
may be made only if, at the time of the disaster, such articles were 
being held for sale by the claimant. Claims must be filed within 6 
months from the date on which the

[[Page 1083]]

President makes the determination that the disaster has occurred. The 
determination date is construed to mean the date the Director, Office of 
Emergency Preparedness, identifies the specific disaster area.
    (g) Drawback of tax. Drawback may be allowed to the person who paid 
the tax on tobacco products, and cigarette papers and tubes which are 
shipped to a foreign country, Puerto Rico, the Virgin Islands, or a 
possession of the United States.
    (h) Credit of tax. Taxes paid on tobacco products, and cigarette 
papers and tubes lost (otherwise than by theft) or destroyed by fire, 
casualty, or act of God, while in the possession or ownership of the 
manufacturer, or withdrawn from the market, may be credited upon 
approval of a claim.
    (i) Reopening claims. A claimant who wishes to have a rejected claim 
reopened must, within the applicable statutory period of limitations, 
submit a written application to the appropriate ATF officer for 
reconsideration of the claim. Such application must show that the 
additional evidence to be presented is new and material, and that such 
evidence was unknown to the claimant, or unobtainable by the claimant, 
when the claim was previously under consideration.
    (j) Claimant's rights under law and regulations. Before final action 
has been taken on a claim, a claimant who, by reason of an oversight, 
misunderstanding of law and regulations, miscalculation, or other cause, 
did not claim the full amount of abatement, refund, credit, or drawback, 
as the case may be, of tax to which the claimant is legitimately 
entitled, may amend a valid claim, and statements filed in support 
thereof, in instances where such a claim is deficient in establishing 
the claimants eligibility to rights extended under law and regulations.

[T.D. ATF-251, 52 FR 19325, May 22, 1987. Redesignated and amended by 
T.D. ATF-301, 55 FR 47606, 47654, Nov. 14, 1990]



Sec. 70.436  Offers in compromise.

    Procedure in the case of offers in compromise of liabilities under 
26 U.S.C. chapter 52 is set forth in Secs. 70.482 through 70.484.

[T.D. ATF-301, 55 FR 47654, Nov. 14, 1990]



Sec. 70.437  Rulings.

    The procedure for rulings in tobacco tax matters is set forth in 
Sec. 70.471.

[T.D. ATF-301, 55 FR 47654, Nov. 14, 1990]



Sec. 70.438  Forms.

    Detailed information as to all forms prescribed for use in 
connection with tobacco taxes is contained in the regulations referred 
to in Sec. 70.431(b).

[T.D. ATF-251, 52 FR 19325, May 22, 1987. Redesignated by T.D. ATF-301, 
55 FR 47653, Nov. 14, 1990, as amended by T.D. ATF-450, 66 FR 29029, May 
29, 2001]

 Provisions Relating to Firearms, Shells and Cartridges, and Explosives



Sec. 70.441  Applicable laws.

    (a) Chapter 53 of the Internal Revenue Code (26 U.S.C. 5801-5872), 
the provisions of which are derived from the National Firearms Act 
Amendments of 1968 (82 Stat. 1227), imposes a tax on the making and 
transfer in the United States of machine guns, destructive devices, and 
certain other types of firearms, and an occupational tax upon every 
importer and manufacturer of, and dealer in, such firearms. Section 1(b) 
(2) of the act of August 9, 1939 (52 Stat. 1291; 49 U.S.C. 781-788), 
makes provision for the seizure and forfeiture of vessels, vehicles, and 
aircraft which are used to transport, carry, or possess, or to 
facilitate the same, any firearms with respect to which there has been 
committed any violation of the National Firearms Act or any regulations 
issued pursuant thereto.
    (b) Title I, State Firearms Control Assistance (18 U.S.C., Chapter 
44), of the Gun Control Act of 1968 (82 Stat. 1213), as amended by Pub. 
L. 99-308 (100 Stat. 449), Pub. L. 99-360 (100 Stat. 766) and Pub. L. 
99-408 (100 Stat. 920), provides for the licensing of manufacturers and 
importers of firearms and ammunition, collectors of firearms, and 
dealers in firearms, and establishes controls for firearms and 
ammunition acquisitions and dispositions.

[[Page 1084]]

    (c) Title I, State Firearms Control Assistance (18 U.S.C. Chapter 
44), of the Gun Control Act of 1968 (82 Stat. 1213) as amended by Pub. 
L. 99-308 (100 Stat. 449) and Pub. L. 99-360 (100 Stat. 766), provides 
that no person may ship or transport any firearms or ammunition in 
interstate or foreign commerce, or receive any firearms or ammunition 
which has been shipped or transported in interstate or foreign commerce, 
or possess any firearms or ammunition in or affecting commerce, who (1) 
has been convicted of a crime punishable by imprisonment for a term 
exceeding 1 year, (2) is a fugitive from justice, (3) is an unlawful 
user of or addicted to any controlled substance (as defined in section 
102 of the Controlled Substances Act, 21 U.S.C. 802), (4) has been 
adjudicated as a mental defective or has been committed to a mental 
institution, (5) is an alien illegally or unlawfully in the United 
States, (6) has been discharged from the Armed Forces under dishonorable 
conditions, or (7) having been a citizen of the United States, has 
renounced citizenship.
    (d) Section 38 of the Arms Export Control Act (22 U.S.C. 2778) and 
regulations thereunder and part 47 of this chapter are applicable to the 
registration and licensing of persons engaged in the business of 
manufacturing, importing or exporting arms, ammunition, or implements of 
war. The Secretary of the Treasury is authorized to control, in 
furtherance of world peace and the security and foreign policy of the 
United States, the import of articles enumerated on the U.S. Munitions 
Import List.
    (e) Title XI, Regulation of Explosives (18 U.S.C. chapter 40) of the 
Organized Crime Control Act of 1970 (84 Stat. 922) provides for the 
licensing of manufacturers, importers, and limited manufacturers of, and 
dealers in, explosives in interstate or foreign commerce, and for 
issuance of permits for users who buy or transport explosives in 
interstate or foreign commerce.
    (f) Chapter 32 of the Internal Revenue Code (26 U.S.C. 4181), 
imposes a tax upon the sale by the manufacturer, producer, or importer 
of pistols, revolvers, firearms (other than pistols and revolvers), and 
shells and cartridges.

[T.D. ATF-251, 52 FR 19325, May 22, 1987. Redesignated by T.D. ATF-301, 
55 FR 47653, Nov. 14, 1990, as amended by T.D. ATF-331, 57 FR 40328, 
Sept. 3, 1992]



Sec. 70.442  Taxes relating to machine guns, destructive devices, and certain other firearms.

    Part 179 of title 27 CFR contains the regulations relative to the:
    (a) Payment of special (occupational) taxes by manufacturers and 
importers of and dealers in, machine guns, destructive devices, and 
certain other types of firearms,
    (b) Payment of the tax on the making or transfer of such firearms,
    (c) Registration, identification, importation, and exportation of 
such firearms,
    (d) Keeping of books and records and rendering of returns, and
    (e) The forfeiture and disposition of seized firearms under the 
provisions of the National Firearms Act.



Sec. 70.443  Firearms and ammunition.

    (a) Commerce in firearms and ammunition. (1) 27 CFR part 178 
contains the regulations relative to:
    (i) The licensing of importers and manufacturers of firearms and 
ammunition, collectors of firearms, and dealers in firearms,
    (ii) The identification of firearms,
    (iii) The acquisition and disposition of firearms and ammunition,
    (iv) The records required to be kept by licensees, and
    (v) The forfeiture and disposition of seized firearms and 
ammunition, under the provisions of title I of the Gun Control Act of 
1968, as amended, and also
    (vi) The restrictions regarding the receipt, possession, or 
transportation of firearms by certain persons.
    (b) Firearms and ammunition excise taxes. (1) 27 CFR part 53 
contains the regulations relative to:
    (i) Payment of excise tax on the sale of pistols, revolvers, 
firearms (other than pistols and revolvers), shells and cartridges,
    (ii) Establishing constructive sales price,
    (iii) Registration for tax free sales,

[[Page 1085]]

    (iv) Keeping of records and rendering of returns, and
    (v) The exportation or use in further manufacture of tax-paid 
articles.

[T.D. ATF-331, 57 FR 40328, Sept. 3, 1992]



Sec. 70.444  Importation of arms, ammunition, and implements of war.

    Part 47 of title 27 CFR implements Executive Order 11958 and 
supplements the import provisions contained in parts 178 and 179 of 
title 27 CFR. Part 47 establishes the U.S. Munitions Import List and 
contains the regulations relative to:
    (a) The registration of importers in arms, ammunition, and 
implements of war,
    (b) Import permit requirements,
    (c) Import certification and verification,
    (d) Import restrictions applicable to certain countries, and
    (e) The forfeiture of seized arms, ammunition, and implements of war 
under the Arms Export Control Act.



Sec. 70.445  Commerce in explosives.

    Part 55 of title 27 CFR contains the regulations relative to:
    (a) Licensing of manufacturers, importers, and limited manufacturers 
of, and dealers in, explosives,
    (b) Permits for users who buy or transport explosives in interstate 
or foreign commerce,
    (c) Construction of different types of storage facilities for three 
classes of explosive material,
    (d) The identification of explosives,
    (e) The acquisition and disposition of explosives,
    (f) The records required to be kept by licensees and permittees,
    (g) The forfeiture and disposition of seized explosive material, 
under the provision of Title XI of the Organized Crime Control Act of 
1970,
    (h) Operations by licensees or permittees and hearings procedure 
after denial or revocation of license or permit, and also
    (i) Restrictions regarding the receipt, possession, or 
transportation of explosives by certain persons under the provisions of 
Title XI of the Organized Crime Control Act of 1970.



Sec. 70.446  Rulings.

    The procedure for rulings in the firearms and explosives area is set 
forth in Sec. 70.471.

[T.D. ATF-301, 55 FR 47654, Nov. 14, 1990]



Sec. 70.447  Assessments.

    Where the evidence disclosed by investigation establishes that 
additional or delinquent tax liability has been incurred and not paid, 
the appropriate ATF officer will list the tax as an assessment. 
Notification and demand for payment of assessed taxes will be issued to 
the taxpayer by the appropriate ATF officer.

[T.D. ATF-301, 55 FR 47654, Nov. 14, 1990]



Sec. 70.448  Claims.

    (a) The procedures applicable to the filing of claims under chapter 
53 of the Internal Revenue Code are set forth below:
    (1) Claims for refund of the making and transfer taxes, and of 
occupational taxes, whether paid pursuant to assessment or voluntarily 
paid, and claims for redemption of ``National Firearms Act'' stamps, are 
prepared and filed in accordance with the procedures set forth in 27 CFR 
part 179.
    (2) Claims for abatement of making and transfer taxes, and claims 
for abatement of occupational taxes and penalties erroneously assessed, 
are prepared and filed in accordance with the procedures set forth in 
Sec. 70.413(b).
    (3) Claims may be reopened or amended in accordance with the 
provisions of Sec. 70.414 (k) and (l).
    (b) The procedures applicable to the filing of claims relating to 
the tax imposed by section 4181 of the Internal Revenue Code are set 
forth below:
    (1) Claims for credit or refund of manufacturers taxes, whether paid 
pursuant to assessment of voluntarily paid, are prepared and filed in 
accordance with the procedures set forth in Sec. 70.123 and 27 CFR 
53.171 through 53.186. For regulations under section 6416 of the 
Internal Revenue Code, relating to conditions to allowance and other 
procedural requirements, see 27 CFR 53.172 through 53.186.
    (2) Claims for abatement of manufacturers taxes are to be prepared 
and filed in accordance with Sec. 70.125.

[[Page 1086]]

    (3) Claims may be reopened or amended in accordance with the 
provisions of Sec. 70.414 (k) and (l).

[T.D. ATF-331, 57 FR 40328, Sept. 3, 1992]



Sec. 70.449  Offers in compromise.

    The procedures in the case of offers in compromise of liabilities 
under 26 U.S.C. 4181 and chapter 53 are set forth in Secs. 70.482 and 
70.484.

[T.D. ATF-331, 57 FR 40329, Sept. 3, 1992]

                             Seized Property



Sec. 70.450  Seizure and forfeiture of personal property.

    Part 72 of title 27 CFR contains the regulations relative to the 
personal property seized by officers of the Bureau of Alcohol, Tobacco 
and Firearms as subject to forfeiture as being used, or intended to be 
used, to violate certain Federal laws; the remission or mitigation of 
such forfeiture; and the administrative sale or other disposition, 
pursuant to forfeiture, of such seized property other than firearms 
seized under the National Firearms Act and firearms and ammunition 
seized under Title I of the Gun Control Act of 1968, as amended. For 
disposal of firearms under the National Firearms Act, see 26 U.S.C. 
5872(b). For disposal of firearms and ammunition under Title I of the 
Gun Control Act of 1968, see 18 U.S.C. 924(d). For disposal of 
explosives under Title XI of Organized Crime Control Act of 1970, see 18 
U.S.C. 844(c).

                               Possessions



Sec. 70.461  Shipments to the United States.

    For regulations under 26 U.S.C. 7652, see 27 CFR part 26 relating to 
liquors and articles from Puerto Rico and the Virgin Islands; and 27 CFR 
part 275 relating to cigars, cigarettes, and cigarette papers and tubes.

(68A Stat. 907, as amended (26 U.S.C. 7652))

[T.D. ATF-6, 38 FR 32445, Nov. 26, 1973, as amended by T.D. ATF-249, 52 
FR 5961, Feb. 27, 1987. Redesignated by T.D. ATF-301, 55 FR 47606, Nov. 
14, 1990, as amended by T.D. ATF-459, 66 FR 38550, July 25, 2001]



Sec. 70.462  Shipments from the United States.

    For regulations under 26 U.S.C. 7653, see 27 CFR part 196 relating 
to stills; 27 CFR part 252 relating to exportation of liquors; and 27 
CFR part 44, relating to exportation of cigars, cigarettes, and 
cigarette papers and tubes.

(68A Stat. 908, as amended; (26 U.S.C. 7653))

[T.D. ATF-6, 38 FR 32445, Nov. 26, 1973, as amended by T.D. ATF-249, 52 
FR 5961, Feb. 27, 1987. Redesignated by T.D. ATF-301, 55 FR 47606, Nov. 
14, 1990; T.D. ATF-464, 66 FR 43480, Aug. 20, 2001]

                                 Rulings



Sec. 70.471  Rulings.

    (a) Requests for rulings. Any person who is in doubt as to any 
matter arising in connection with:
    (1) Operations or transactions in the alcohol tax area or under the 
Federal Alcohol Administration Act;
    (2) Operations or transactions in the tobacco tax area; or
    (3) The taxes relating to machine guns, destructive devices, and 
certain other firearms imposed by chapter 53 of the Internal Revenue 
Code; the registration by importers and manufacturers of, and dealers 
in, such firearms; the registration of such firearms; the licensing of 
importers and manufacturers of, and dealers in, firearms and ammunition, 
and collectors of firearms and ammunition curios and relics under 
chapter 44 of title 18 of the United States Code; the licensing of 
manufacturers, importers, limited manufacturer of, and dealers in, 
explosives and issuance of permits for users of explosives under chapter 
40 of title 18 of the United States Code; and registration of importers 
of, and permits to import, arms, ammunition, and implements of war, 
under section 38 of the Arms Export Control Act of 1976; and the taxes 
relating to pistols, revolvers, firearms (other than pistols and 
revolvers), shells and cartridges imposed by chapter 32 of the Internal 
Revenue Code, may request a ruling thereon by addressing a letter to the 
appropriate ATF official. A ruling can be issued only from Bureau 
Headquarters unless the issues involved are clearly covered by currently 
effective rulings or come

[[Page 1087]]

within the plain intent of the statutes or regulations.
    (b) Routine requests for information. Routine requests for 
information should be addressed to the appropriate ATF officer.

[T.D. ATF-450, 66 FR 29029, May 29, 2001]

                         Administrative Remedies



Sec. 70.481  Agreements for payment of liability in installments.

    (a) Authorization of agreements. The appropriate ATF officer, is 
authorized to enter into written agreements with any taxpayer under 
which such taxpayer is allowed to satisfy liability for payment of any 
tax in installment payments if the appropriate ATF officer determines 
that such agreement will facilitate collection of such liability.
    (b) Extent to which agreements remain in effect--(1) In general. 
Except as otherwise provided in this paragraph (b), any agreement under 
paragraph (a) of this section shall remain in effect for the term of the 
agreement.
    (2) Inadequate information or jeopardy. The officer who entered into 
an installment agreement under paragraph (a) of this section may 
terminate such agreement if:
    (i) Information which the taxpayer provided prior to the date such 
agreement was entered into was inaccurate or incomplete, or
    (ii) The appropriate ATF officer believes that collection of any tax 
to which an agreement under this section relates is in jeopardy.
    (3) Subsequent change in financial conditions--(i) In general. If 
the officer who entered into an installment agreement under paragraph 
(a) of this section makes a determination that the financial condition 
of the taxpayer has significantly changed, the officer may alter, 
modify, or terminate such agreement.
    (ii) Notice. Action may be taken by the appropriate ATF officer 
under paragraph (b)(3)(i) of this section only if:
    (A) Notice of such determination is provided to the taxpayer no 
later than 30 days prior to the date of such action, and
    (B) Such notice includes the reasons why the officer believes a 
significant change in the financial condition of the taxpayer has 
occurred.
    (4) Failure to pay an installment or any other tax liability when 
due or to provide requested financial information. The officer who 
entered into an installment agreement under paragraph (a) of this 
section may alter, modify, or terminate such agreement in the case of 
the failure of the taxpayer:
    (i) To pay an installment at the time such installment payment is 
due under such agreement,
    (ii) To pay any other tax liability at the time such liability is 
due, or
    (iii) To provide a financial condition update as requested by the 
appropriate ATF officer.

(26 U.S.C. 6159)

[T.D. ATF-301, 55 FR 47655, Nov. 14, 1990, as amended by T.D. ATF-450, 
66 FR 29029, May 29, 2001]



Sec. 70.482  Offers in compromise of liabilities (other than forfeiture) under 26 U.S.C.

    (a) In general. The appropriate ATF officer may compromise any civil 
or criminal liability arising under the provisions of 26 U.S.C. enforced 
and administered by ATF prior to reference of a case involving such 
liability to the Department of Justice for prosecution or defense. (For 
compromise of forfeiture liability, see Sec. 70.484 of this part.) Any 
such liability may be compromised only upon one or both of the following 
two grounds:
    (1) Doubt as to liability; or
    (2) Doubt as to collectibility.

No such liability will be compromised if the liability has been 
established by a valid judgment or is certain, and there is no doubt as 
to the ability of the Government to collect the amounts owing with 
respect to such liability.
    (b) Scope of compromise agreement. A compromise agreement may relate 
to civil or criminal liability for taxes, interest, ad valorem 
penalties, or specific penalties. However, a criminal liability may be 
compromised only if it involves a violation of a regulatory provision of 
26 U.S.C., or a related statute, and then only if such violation was not 
deliberately committed with an intent to defraud.
    (c) Effect of compromise agreement. A compromise agreement relates 
to the

[[Page 1088]]

entire liability of the taxpayer (including taxes, ad valorem penalties, 
and interest) with respect to which the offer in compromise is submitted 
and all questions of such liability are conclusively settled thereby. 
Specific penalties, however, shall be compromised separately and not in 
connection with taxes, interest, or ad valorem penalties. Neither the 
taxpayer nor the Government shall, upon acceptance of an offer in 
compromise, be permitted to reopen the case except by reason of 
falsification or concealment of assets by the taxpayer, or mutual 
mistake of a material fact sufficient to cause a contract to be reformed 
or set aside. However, acceptance of an offer in compromise of a civil 
liability does not remit a criminal liability, nor does acceptance of an 
offer in compromise of a criminal liability remit a civil liability.
    (d) Procedure with respect to offers in compromise--(1) Submission 
of offers. (i) Offers in compromise under this section shall be 
submitted on ATF Form 5640.1, along with any additional information 
required by the officer authorized to accept or reject the offer. If the 
offer in compromise is based on inability to pay, the proponent must 
submit any financial statement required by such officer.
    (ii) The offer should generally be accompanied by a remittance 
representing the amount of the compromise offer or a deposit if the 
offer provides for future installment payments. When final action has 
been taken, the proponent is notified of the acceptance or rejection of 
the offer.
    (2) Stay of collection. The submission of an offer in compromise 
shall not automatically operate to stay the collection of any tax 
liability. However, enforcement of collection may be deferred if the 
interests of the United States will not be jeopardized thereby.
    (3) Acceptance. An offer in compromise shall be considered accepted 
only when the proponent thereof is so notified in writing. As a 
condition to accepting an offer in compromise, the taxpayer may be 
required to enter into any collateral agreement or to post any security 
which is deemed necessary for the protection of the interests of the 
United States. If the final payment on an accepted offer is contingent 
upon the immediate or simultaneous release of a tax lien in whole or in 
part, such payment must be in cash, or in the form of a certified, 
cashier's, or treasurer's check drawn on any bank or trust company 
incorporated under the laws of the United States or any State, 
Territory, or possession of the United States, or by a U.S. postal, 
bank, express, or telegraph money order.
    (4) Withdrawal or rejection. An offer in compromise may be withdrawn 
by the proponent at any time prior to its acceptance. In the event an 
offer is rejected, the proponent shall be promptly notified in writing. 
Frivolous offers or offers submitted for the purpose of delaying the 
collection of tax liabilities shall be immediately rejected. If an offer 
in compromise is withdrawn or rejected, the amount tendered with the 
offer, including all installments paid, shall be refunded without 
interest, unless the taxpayer has stated or agreed that the amount 
tendered may be applied to the liability with respect to which the offer 
was submitted.
    (e) Record. Except as otherwise provided in this paragraph, if an 
offer in compromise is accepted, there shall be placed on file the 
opinion of counsel for the Bureau with respect to such compromise, with 
the reason therefor, and including a statement of:
    (1) The amount of tax assessed,
    (2) The amount of interest, additional amount, addition to the tax, 
or assessable penalty, imposed by law on the person against whom the tax 
is assessed, and
    (3) The amount actually paid in accordance with the terms of the 
compromise.

However, no such opinion shall be required with respect to the offer in 
compromise of any civil case in which the unpaid amount of tax assessed 
(including any interest, additional amount, addition to the tax, or 
assessable penalty is less than $50,000. However, such compromise shall 
be subject to continuing quality review by the Secretary.
    (f) Requirement with respect to statute of limitations. No offer in 
compromise shall be accepted unless the taxpayer

[[Page 1089]]

waives the running of the statutory period of limitations on both or 
either assessment or collection of the tax liability involved for the 
period during which the offer is pending, or the period during which any 
installment remains unpaid, and for one year thereafter.
    (g) Inspection with respect to accepted offers in compromise. For 
provisions relating to the inspection of returns and accepted offers in 
compromise, see 26 U.S.C. 6103(k)(l).

(26 U.S.C. 7122)

(Approved by the Office of Management and Budget under control number 
1512-0472)

[T.D. ATF-301, 55 FR 47655, Nov. 14, 1990, as amended by T.D. ATF-331, 
57 FR 40329, Sept. 3, 1992; T.D. ATF-450, 66 FR 29029, May 29, 2001]



Sec. 70.483  Offers in compromise of violations of Federal Alcohol Administration Act.

    The Federal Alcohol Administration Act provides penalties for 
violations of its provisions. The appropriate ATF officer is authorized 
to compromise such liabilities. Persons desiring to submit offers in 
compromise may submit such offers on Form 5640.2. When the offer is 
acted upon, the proponent is notified of the acceptance or rejection of 
the offer. If the offer is rejected, the sum submitted with the offer in 
compromise is returned to the proponent. If the offer is accepted, the 
proponent is notified and the case is closed.

[T.D. ATF-450, 66 FR 29029, May 29, 2001]



Sec. 70.484  Offers in compromise of forfeiture liabilities.

    The appropriate ATF officer is authorized to compromise liabilities 
to administrative forfeiture of personal property seized under the laws 
administered and enforced by the Bureau. Persons desiring to submit 
offers in compromise of such liabilities may submit such offers on Form 
656-E to the appropriate ATF officer. When the offer is acted upon, the 
proponent is notified of the acceptance or rejection of the offer. If 
the offer is rejected, the sum submitted with the offer in compromise is 
returned to the proponent. If the offer is accepted, the proponent is 
notified and the case is closed. Acceptance of an offer in compromise of 
civil liabilities does not remit criminal liabilities, nor does 
acceptance of an offer in compromise of criminal liabilities remit civil 
liabilities.

[T.D. ATF-301, 55 FR 47655, Nov. 14, 1990, as amended by T.D. ATF-450, 
66 FR 29030, May 29, 2001]



Sec. 70.485  Closing agreements.

    (a) In general. The appropriate ATF officer may enter into a written 
agreement with any person relating to the liability of such person (or 
of the person or estate for whom the person acts) in respect of any tax 
imposed under the provisions of 26 U.S.C. enforced and administered by 
the Bureau for any taxable period ending prior or subsequent to the date 
of such agreement. A closing agreement may be entered into in any case 
in which there appears to be an advantage in having the case permanently 
and conclusively closed, or if good and sufficient reasons are shown by 
the taxpayer for desiring a closing agreement and it is determined by 
the appropriate ATF officer that the United States will sustain no 
disadvantage through consummation of such an agreement.
    (b) Scope of closing agreement--(1) In general. A closing agreement 
may be executed even though under the agreement the taxpayer is not 
liable for any tax for the period to which the agreement relates. There 
may be a series of closing agreements relating to the tax liability for 
a single period.
    (2) Taxable periods ended prior to date of closing agreement. 
Closing agreements with respect to taxable periods which ended prior to 
the date of the agreement may relate to the total tax liability of the 
taxpayer or to one or more separate items affecting the tax liability of 
the taxpayer.
    (3) Taxable periods ending subsequent to date of closing agreement. 
Closing agreements with respect to taxable periods ending subsequent to 
the date of the agreement may relate to one or more separate items 
affecting the tax liability of the taxpayer.
    (c) Finality. A closing agreement which is approved within such time 
as may be stated in such agreement, or later agreed to, shall be final 
and conclusive, and, except upon a showing of

[[Page 1090]]

fraud or malfeasance, or misrepresentation of a material fact:
    (1) The case shall not be reopened as to the matters agreed upon or 
the agreement modified by any officer, employee, or agent of the United 
States, and
    (2) In any suit, action, or proceeding, such agreement, or any 
determination, assessment, collection, payment, abatement, refund, or 
credit made in accordance therewith, shall not be annulled, modified, 
set aside, or disregarded.

However, a closing agreement with respect to a taxable period ending 
subsequent to the date of the agreement is subject to any change in, or 
modification of, the law enacted subsequent to the date of the agreement 
and made applicable to such taxable period, and each closing agreement 
shall so recite.
    (d) Procedure with respect to closing agreements--(1) Submission of 
request. A request for a closing agreement which relates to a prior 
taxable period may be submitted at any time before a case with respect 
to the tax liability involved is filed with a court of the United 
States. The procedure with respect to requests for closing agreements 
shall be under such rules as may be prescribed from time to time by the 
Director in accordance with the regulations under this section.
    (2) Collection, credit, or refund. Any tax or deficiency in tax 
determined pursuant to a closing agreement shall be assessed and 
collected, and any overpayment determined pursuant thereto shall be 
credited or refunded, in accordance with the applicable provisions of 
law.

(26 U.S.C. 7121)

[T.D. ATF-301, 55 FR 47655, Nov. 14, 1990]



Sec. 70.486  Managerial review.

    If at any step in the collection process a taxpayer does not agree 
with an ATF employee under the authority of the appropriate ATF officer, 
the taxpayer has the right to discuss the matter with the employee's 
immediate supervisor. The ATF employee will give the taxpayer the name 
and telephone number of the person to be contacted.

[T.D. ATF-301, 55 FR 47655, Nov. 14, 1990]



 Subpart F--Application of Section 6423, Internal Revenue Code of 1954, 
as Amended, to Refund or Credit of Tax on Distilled Spirits, Wines, and 
                                  Beer

    Source: T.D. ATF-376, 61 FR 31031, June 19, 1996, unless otherwise 
noted.

                                 General



Sec. 70.501  Meaning of terms.

    When used in this subpart, where not otherwise distinctly expressed 
or manifestly incompatible with the intent thereof, terms shall have the 
meaning ascribed in this section.
    Article. The commodity in respect to which the amount claimed was 
paid or collected as a tax.
    Claimant. Any person who files a claim for a refund or credit of tax 
under this subpart.
    District director of customs. The district director of customs at a 
headquarters port of the district (except the district of New York, 
N.Y.); the area directors of customs in the district of New York, N.Y.; 
and the port director at a port not designated as a headquarters port.
    I.R.C. Internal Revenue Code of 1986, as amended.
    Owner. A person who, by reason of a proprietary interest in the 
article, furnished the amount claimed to the claimant for the purpose of 
paying the tax.
    Person. An individual, a trust, estate, partnership, association, 
company, or corporation.
    Tax. Any tax imposed by 26 U.S.C. 5001-5066, or by any corresponding 
provision of prior internal revenue laws, and in the case of any 
commodity of a kind subject to a tax under any such sections, any tax 
equal to any such tax, any additional tax, or any floor stocks tax. The 
term includes an extraction denominated a ``tax'', and any penalty, 
addition to tax, additional amount, or interest applicable to any such 
tax.



Sec. 70.502  Applicability to certain credits or refunds.

    The provisions of this subpart apply only where the credit or refund 
is claimed on the grounds that an amount

[[Page 1091]]

of tax was assessed or collected erroneously, illegally, without 
authority, or in any manner wrongfully, or on the grounds that such 
amount was excessive. This subpart does not apply to:
    (a) Any claim for drawback,
    (b) Any claim made in accordance with any law expressly providing 
for credit or refund where an article is withdrawn from the market, 
returned to bond, or lost or destroyed, and
    (c) Any claim based solely on errors in computation of the quantity 
of an article subject to tax or on mathematical errors in computation of 
the amount of the tax due, or to any claim in respect of tax collected 
or paid on an article seized and forfeited, or destroyed, as contraband.



Sec. 70.503  Ultimate burden.

    For the purposes of this subpart, the claimant, or owner, shall be 
treated as having borne the ultimate burden of an amount of tax only if:
    (a) The claimant or owner has not, directly or indirectly, been 
relieved of such burden or shifted such burden to any other person,
    (b) No understanding or agreement exists for any such relief or 
shifting, and
    (c) If the claimant or owner has neither sold nor contracted to sell 
the articles involved in such claim, such claimant or owner agrees that 
there will be no such relief or shifting.



Sec. 70.504  Conditions to allowance of credit or refund.

    No credit or refund to which this subpart is applicable shall be 
allowed or made, pursuant to a court decision or otherwise, of any 
amount paid or collected as a tax unless a claim therefor has been 
filed, as provided in this subpart, by the person who paid the tax and 
the claimant, in addition to establishing that such claimant is 
otherwise legally entitled to credit or refund of the amount claimed, 
establishes:
    (a) That the claimant bore the ultimate burden of the amount 
claimed, or
    (b) That the claimant has unconditionally repaid the amount claimed 
to the person who bore the ultimate burden of such amount, or
    (c) That:
    (1) The owner of the article furnished the claimant the amount 
claimed for payment of the tax;
    (2) The claimant has filed with the appropriate ATF officer the 
written consent of such owner to the allowance to the claimant of the 
credit or refund; and
    (3) Such owner satisfies the requirements of paragraph (a) or (b) of 
this section.



Sec. 70.505  Requirements on persons intending to file claim.

    Any person who, having paid the tax with respect to an article, 
desires to claim refund or credit of any amount of such tax to which the 
provisions of this subpart are applicable must:
    (a) File a claim, as provided in Sec. 70.506, and
    (b) Comply with any other provisions of law or regulations which may 
apply to the claim.

                             Claim Procedure



Sec. 70.506  Execution and filing of claim.

    Claims to which this subpart is applicable must be executed on Form 
2635 (5620.8) in accordance with the instructions on the form. (For 
provisions relating to handcarried documents, see 27 CFR 70.304). Claims 
for credit or refund of taxes collected by district directors of 
customs, to which the provisions of section 6423, I.R.C., are applicable 
and which Customs regulations (19 CFR Part 24--Customs Financial and 
Accounting Procedure) require to be filed with the appropriate ATF 
officer, must be executed and filed in accordance with applicable 
Customs regulations and this subpart. The claim must set forth each 
ground upon which the claim is made in sufficient detail to apprise the 
appropriate ATF officer of the exact basis therefor.Allegations 
pertaining to the bearing of the ultimate burden relate to additional 
conditions which must be established for a claim to be allowed and are 
not in themselves legal grounds for allowance of a claim. There shall 
also be attached to the form and made part of the claim the supporting 
data required by Sec. 70.507. All evidence relied upon in support of 
such

[[Page 1092]]

claim shall be clearly set forth and submitted with the claim.

[T.D.ATF-376, 61 FR 31031, June 19, 1996, as amended by T.D. ATF-450, 66 
FR 29030, May 29, 2001]



Sec. 70.507  Data to be shown in claim.

    Claims to which this subpart is applicable, in addition to the 
requirements of Sec. 70.506 must set forth or contain the following:
    (a) A statement that the claimant paid the amount claimed as a 
``tax'' as defined in this subpart.
    (b) Full identification (by specific reference to the form number, 
the date of filing, the place of filing, and the amount paid on the 
basis of the particular form or return) of the tax forms or returns 
covering the payments for which refund or credit is claimed.
    (c) The written consent of the owner to the allowance of the refund 
or credit to the claimant (where the owner of the article in respect of 
which the tax was paid furnished the claimant the amount claimed for the 
purpose of paying the tax).
    (d) If the claimant (or owner, as the case may be) has neither sold 
nor contracted to sell the articles involved in the claim, a statement 
that the claimant (or owner, as the case may be) agrees not to shift, 
directly or indirectly in any manner whatsoever, the burden of the tax 
to any other person.
    (e) If the claim is for refund of a floor stocks tax, or of an 
amount resulting from an increase in rate of tax applicable to an 
article, a statement as to whether the price of the article was 
increased on or following the effective date of such floor stocks tax or 
rate increase, and if so, the date of the increase, together with full 
information as to the amount of such price increase.
    (f) Specific evidence (such as relevant records, invoices, or other 
documents, or affidavits of individuals having personal knowledge of 
pertinent facts) which will satisfactorily establish the conditions to 
allowance set forth in Sec. 70.504.
    (g) The appropriate ATF officer may require the claimant to furnish 
as a part of the claim such additional information as may be deemed 
necessary.



Sec. 70.508  Time for filing claim.

    No credit or refund of any amount of tax to which the provisions of 
this subpart apply shall be made unless the claimant files a claim 
therefor within the time prescribed by law and in accordance with the 
provisions of this subpart.

                                Penalties



Sec. 70.509  Penalties.

    It is an offense punishable by fine and imprisonment for anyone to 
make or cause to be made any false or fraudulent claim upon the United 
States, or to make any false or fraudulent statements, or 
representations, in support of any claim, or to falsely or fraudulently 
execute any documents required by the provisions of the internal revenue 
laws, or any regulations made in pursuance thereof.



   Subpart G--Losses Resulting From Disaster, Vandalism, or Malicious 
                                Mischief

                               Definitions

    Source: T.D. ATF-376, 61 FR 31033, June 19, 1996, unless otherwise 
noted.



Sec. 70.601  Meaning of terms.

    When used in this subpart, terms are defined as follows in this 
section. Words in the plural shall include the singular, and vice versa, 
and words indicating the masculine gender shall include the feminine. 
The terms ``includes'' and ``including'' do not exclude other things not 
named which are in the same general class or are otherwise within the 
scope of the term defined.
    Alcoholic liquors or liquors. Distilled spirits, wines, and beer 
lost, made unmarketable, or condemned, as provided in this subpart.
    Beer. Beer, ale, porter, stout, and other similar fermented 
beverages (including sake, or other similar products) of any name or 
description containing one-half of 1 percent or more of alcohol by 
volume on which the internal revenue tax has been paid or determined, 
and if imported, on which duties have been paid.

[[Page 1093]]

    Claimant. The person who held the liquors for sale at the time of 
the disaster or other specified cause of loss and who files a claim 
under this subpart.
    Commissioner of Customs. The Commissioner of Customs, U.S. Customs 
Service, the Department of the Treasury, Washington, DC.
    Distilled spirits, or spirits. Ethyl alcohol and other distillates 
such as whisky, brandy, rum, gin, vodka, in any form (including all 
dilutions and mixtures thereof, from whatever source or by whatever 
process produced), on which the internal revenue tax has been paid or 
determined and, if imported, on which duties have been paid.
    Duly authorized official. Any Federal, State or local government 
official who is authorized to condemn liquors on which a claim is filed 
under this subpart.
    Duty or duties. Any duty or duties paid under the customs laws of 
the United States.
    Major Disaster. A flood, fire, hurricane, earthquake, storm, or 
other catastrophe defined as a ``major disaster'' under the Disaster 
Relief Act (42 U.S.C. 5122(2)), which occurs in any part of the United 
States and which the President has determined causes sufficient damage 
to warrant ``major disaster'' assistance under that Act.
    Tax. (1) With respect to distilled spirits, ``tax'' means the 
internal revenue tax that is paid or determined on spirits.
    (2) With respect to wines, ``tax'' means the internal revenue tax 
that is paid or determined on the wine.
    (3) With respect to beer, ``tax'' means the internal revenue tax 
that is paid or determined on the beer.
    United States. When used in a geographical sense includes only the 
States and the District of Columbia.
    Wines. All still wines, effervescent wines, and flavored wines, on 
which internal revenue wine tax has been paid or determined, and if 
imported, on which duty has been paid.

[T.D. ATF-376, 61 FR 31033, June 19, 1996, as amended by T.D. ATF-450, 
66 FR 29030, May 29, 2001]

                                Payments



Sec. 70.602  Circumstances under which payment may be made.

    (a) Major disasters. The appropriate ATF officer shall allow payment 
(without interest) of an amount equal to the tax paid or determined, and 
the Commissioner of Customs shall allow payment (without interest) of an 
amount equal to the duty paid, on distilled spirits, wines, and beer 
previously withdrawn, if the liquors are lost, made unmarketable, or 
condemned by a duly authorized official as the result of a major 
disaster (as defined in Sec. 70.601).
    (b) Other causes of loss--(1) Payment. The appropriate ATF officer 
shall allow payment (without interest) of an amount equal to the tax 
paid or determined, and the Commissioner of Customs shall allow payment 
(without interest) of an amount equal to the duty paid, on distilled 
spirits, wines, and beer previously withdrawn, if the liquors are lost, 
made unmarketable, or condemned by a duly authorized official as a 
result of:
    (i) Fire, flood, casualty, or other disaster; or
    (ii) Breakage, destruction, or other damage (excluding theft) 
resulting from vandalism or malicious mischief.
    (2) Minimum claim. No claim of less than $250 will be allowed for 
losses resulting from any disaster or damage described in paragraph 
(b)(1) of this section.
    (c) General. Payment under this section may be made only if:
    (1) The disaster or other specified cause of loss occurred in the 
United States;
    (2) At the time of the disaster or other specified cause of loss, 
the liquors were being held for sale by the claimant;
    (3) Refund or credit of the amount claimed, or any part of the 
amount claimed, has not or will not be claimed for the same liquors 
under any other law or regulations; and
    (4) The claimant was not indemnified by any valid claim of insurance 
or otherwise for the tax and/or duty on the liquors covered by the 
claim.

[[Page 1094]]

                            Claims Procedures



Sec. 70.603  Execution and filing of claim.

    (a) General. (1) Claims under this subpart must be filed on Form 
2635 (5620.8).
    (2) The claim shall include all the facts on which the claim is 
based, and be accompanied by a record of inventory of the liquors lost, 
made unmarketable, or condemned. (See Sec. 70.604.)
    (3) The claim shall contain a statement that no other claim for 
refund or credit of the amount claimed, or for any part of the amount 
claimed, has been or will be filed under any other law or regulations.
    (b) Major disasters. Claims for refund of tax and/or duty on liquors 
which were lost, became unmarketable, or were condemned as a result of a 
major disaster must be filed not later than 6 months from the day on 
which the President determines that a major disaster has occurred.
    (c) Other causes of loss. (1) Claims for amounts of $250 or more for 
refund of tax and/or duty on liquors which were lost, became 
unmarketable, or were condemned as the result of:
    (i) Fire, flood, casualty, or other disaster; or
    (ii) Damage (excluding theft) resulting from vandalism or malicious 
mischief, must be filed within 6 months after the date on which the 
disaster or damage occurred.
    (2) Claims for amounts less than $250 will not be allowed.

[T.D. ATF-376, 61 FR 31033, June 19, 1996, as amended by T.D. ATF-450, 
66 FR 29030, May 29, 2001]



Sec. 70.604  Record of inventory to support claims.

    (a) Claims relating to distilled spirits. The record of inventory of 
distilled spirits lost, made unmarketable, or condemned, which is 
required to support claims filed under Sec. 70.603, shall show the 
following information:
    (1) Name and business address of claimant (as shown on claim, Form 
2635 (5620.8)).
    (2) Address where the spirits were lost, became unmarketable, or 
were condemned, if different from the business address.
    (3) Kind of spirits.
    (4) Brand name.
    (5) For full cases, show:
    (i) Number of cases;
    (ii) Serial numbers;
    (iii) Bottles per case;
    (iv) Size of bottles;
    (v) Wine gallons per case;
    (vi) Proof; and
    (vii) Proof gallons.
    (6) For bottles not in cases, show:
    (i) Total number;
    (ii) Size of bottles;
    (iii) Wine gallons;
    (iv) Proof; and
    (v) Total proof gallons.
    (7) Total proof gallons for all items.
    (b) Claims relating to wines. The record of inventory of wines lost, 
made unmarketable, or condemned, which is required to support claims 
filed under Sec. 70.603, shall show the following information:
    (1) Name and business address of claimant (as shown on claim, Form 
2635 (5620.8)).
    (2) Address where the wines were lost, became unmarketable, or were 
condemned, if different from the business address.
    (3) Kind of wine.
    (4) Percent of alcohol by volume.
    (5) Number of barrels or kegs.
    (6) Kind and number of other bulk containers.
    (7) Number of full cases and bottles per case.
    (8) Size of bottles.
    (9) Number of bottles not in cases and wine gallons.
    (10) Total wine gallons.
    (c) Claims relating to beer. The record of inventory of beer lost, 
made unmarketable, or condemned, which is required to support claims 
filed under Sec. 70.603, shall show the following information:
    (1) Name and business address of claimant (as shown on claim, Form 
2635 (5620.8)).
    (2) Address where the beer was lost, became unmarketable, or was 
condemned, if different from the business address.
    (3) Number and size of barrels.
    (4) For full cases, show:
    (i) Number of cases;
    (ii) Bottles or cans per case; and
    (iii) Size (in ounces) of bottles or cans.
    (5) Number and size of bottles and cans not in cases.

[[Page 1095]]

    (6) Quantity in terms of 31-gallon barrels.
    (7) Total quantity.
    (d) Special instructions. (1) Inventories of domestic liquors, 
imported liquors, and liquors manufactured in the Virgin Islands shall 
be reported separately.
    (2) Liquors manufactured in Puerto Rico may not be included in 
claims filed under this subpart. Claims for losses of Puerto Rican 
liquors shall be filed with the Secretary of the Treasury of Puerto Rico 
under the laws of Puerto Rico.



Sec. 70.605  Claims relating to imported, domestic, and Virgin Islands liquors.

    (a) Claims involving taxes on domestic liquors, imported liquors, 
and liquors manufactured in the Virgin Islands must show the quantities 
of each separately in the claim.
    (b) A separate claim on Form 2635 (5620.8) must be filed for customs 
duties.



Sec. 70.606  Claimant to furnish proof.

    The claimant shall furnish proof to the satisfaction of the 
appropriate ATF officer regarding the following:
    (a) That the tax on the liquors, or the tax and duty if imported, 
was fully paid; or the tax, if not paid, was fully determined.
    (b) That the liquors were lost, made unmarketable, or condemned by a 
duly authorized official, by reason of damage sustained as a result of a 
disaster or other cause of loss specified in this subpart.
    (c) The type and date of occurrence of the disaster or other 
specified cause of loss, and the location of the liquors at the time.
    (d) That the claimant was not indemnified by a valid claim of 
insurance or otherwise for the tax, or tax and duty, on the liquors 
covered by the claim.
    (e) That the claimant is entitled to payment under this subpart.



Sec. 70.607  Supporting evidence.

    (a) The claimant shall support the claim with any evidence (such as 
inventories, statements, invoices, bills, records, labels, formulas, 
stamps) that is available to submit, relating to the quantities and 
identities of the liquors, on which duty has been paid or tax has been 
paid or determined, that were on hand at the time of the disaster or 
other specified cause of loss and alleged to have been lost, made 
unmarketable, or condemned as a result of it.
    (b) If the claim is for refund of duty, the claimant shall furnish, 
if possible:
    (1) The customs number;
    (2) The date of entry; and
    (3) The name of the port of entry.



Sec. 70.608  Action on claims.

    The appropriate ATF officer shall date stamp and examine each claim 
filed under this subpart and will determine the validity of the claim. 
Claims and supporting data involving customs duties will be forwarded to 
the Commissioner of Customs with a summary statement by the appropriate 
ATF officer regarding his or her findings.

                         Destruction of Liquors



Sec. 70.609  Supervision.

    When allowance has been made under this subpart for the tax and/or 
duty on liquors condemned by a duly authorized official or made 
unmarketable, the liquors shall be destroyed by suitable means under 
supervision satisfactory to the appropriate ATF officer, unless the 
liquors were previously destroyed under supervision satisfactory to the 
appropriate ATF officer. The Commissioner of Customs will notify the 
appropriate ATF officer as to allowance under this subpart of claims for 
duty on unmarketable or condemned liquors.

                                Penalties



Sec. 70.610  Penalties.

    (a) Penalties are provided in 26 U.S.C. 7206 for making any false or 
fraudulent statement under the penalties of perjury in support of any 
claim.
    (b) Penalties are provided in 26 U.S.C. 7207 for filing any false or 
fraudulent document under this subpart.
    (c) All laws and regulations, including penalties, which apply to 
internal revenue taxes on liquors shall, when appropriate, apply to 
payments made under this subpart the same as if the payments were actual 
refunds of internal taxes on liquors.

[[Page 1096]]



                 Subpart H--Rules, Regulations and Forms



Sec. 70.701  Rules and regulations.

    (a) Formulation. (1) Alcohol, tobacco, firearms, and explosives 
rules take various forms. The most important rules are issued as 
Treasury decisions, prescribed by the Director, and approved by the 
Secretary. Other rules may be issued over the signature of the Director 
or the signature of any appropriate ATF officer. The channeling of rules 
varies with the circumstances. Treasury decisions are prepared within 
the appropriate ATF offices. After approval by the Director, Treasury 
decisions are forwarded to the Secretary for further consideration and 
final approval.
    (2) Where required by 5 U.S.C. 553, the Director publishes in the 
Federal Register general notice of proposed rules unless all persons 
subject thereto are named and either personally served or otherwise have 
actual notice thereof in accordance with law. Notice may also be 
published in the Federal Register in such other instances as may be 
desirable. This notice includes (i) a statement of the time, place, and 
nature of public rulemaking proceedings; (ii) reference to the authority 
under which the rule is proposed; and (iii) either the terms or 
substance of the proposed rule or a description of the subjects and 
issues involved. Interested persons may participate in the rulemaking by 
submitting written data, views, or arguments. Persons may also submit 
requests for a public hearing. However, the Bureau reserves the right to 
determine, in the light of all circumstances, whether a public hearing 
should be held.
    (3) If the Bureau determines that the public good will be served 
thereby, it may hold a public hearing for discussion of the issues 
raised by the proposed regulations. Such a hearing is announced by a 
notice in the Federal Register, stating the time and place where the 
hearing is to be held. The following rules govern the conduct of the 
public hearing only if incorporated by reference in the notice 
announcing the hearing:
    (i) A person wishing to make oral comments at a public hearing shall 
submit, within the time prescribed in the notice of hearing, an outline 
of the topics he wishes to discuss, and the time he wishes to devote to 
each topic. Ordinarily, a period of 10 minutes is the time allotted to 
each person for making his oral comments.
    (ii) A person making oral comments should be prepared to answer 
questions not only on the topics listed in his outline but also on 
matters relating to any written comments which he has submitted.
    (iii) At the conclusion of the presentation of comments of persons 
listed in the agenda, to the extent time permits, other comments will be 
received.
    (iv) Written comments submitted prior to the hearing shall be 
available at the hearing for inspection. Any request for copies of such 
written comments is treated as a request for records under 27 CFR 
70.802(g).
    (v) To the extent resources permit, the public hearings to which 
this paragraph applies may be transcribed.
    (vi) In unusual circumstances or for good cause shown, the 
application of rules contained in this paragraph may be waived.
    (b) Comments on proposed rules. Interested persons may submit data, 
views, or arguments with respect to a notice of proposed rulemaking 
published pursuant to 5 U.S.C. 553. Procedures are provided in 
Sec. 70.802(g) for members of the public to inspect and obtain copies of 
written comments submitted in response to proposed rules. All such 
comments are open in their entirety to public inspection. Therefore, the 
Bureau does not recognize any designation of material in comments as 
confidential or not to be disclosed, and any material that the commenter 
considers to be confidential or inappropriate for disclosure to the 
public should not be included in his comments. The name of any person 
submitting comments or requesting a public hearing, the issues which may 
be discussed at the hearing, and outlines relating to the hearing are 
open to public disclosure. (See paragraph (a)(3) of this section for 
rules relating to hearing outlines.)
    (c) Petition to change rules. Interested persons may petition for 
the issuance, amendment, or repeal of a rule. A petition for the 
issuance of a rule shall identify the section or sections of law

[[Page 1097]]

involved; and a petition for the amendment or repeal of a rule shall set 
forth the section or sections of the regulations involved. The petition 
shall set forth the reasons for the requested action. Such petitions 
shall be given careful consideration, and the petitioner shall be 
advised of the action taken thereon. Petitions must be addressed to the 
Bureau of Alcohol, Tobacco and Firearms, Washington, DC 20226.
    (d) Publication of rules and regulations--(1) General. All Bureau of 
Alcohol, Tobacco and Firearms regulations and amendments thereto are 
published as Treasury Decisions which appear in the Federal Register, 
the Code of Federal Regulations, and the quarterly Alcohol, Tobacco and 
Firearms (ATF) Bulletin. The ATF Bulletin is the authoritative 
instrument of the Bureau for announcing Treasury decisions, legislation, 
administrative matters, and other items of general interest. The 
Bulletin incorporates, into one publication, all matters of the Bureau 
which are of public record. It is the policy of the Bureau to publish in 
the Bulletin all substantive rulings necessary to promote a uniform 
application of all laws administered by the Bureau as well as rulings 
that supersede, revoke, modify, or amend any of those previously 
published in the Bulletin (including those published prior to July 1, 
1972, in the Internal Revenue Bulletin). Procedures relating solely to 
matters of internal management are not published; however, regulations 
appearing in internal management documents and statements of internal 
practices and procedures that affect the rights and duties of the public 
are published. Rulings and procedures reported in the Bulletin do not 
have the force and effect of Department of the Treasury Regulations, but 
they may be used as precedents. In applying published rulings and 
procedures, the effect of subsequent legislation, regulations, court 
decisions, rulings, and procedures must be considered. Concerned parties 
are cautioned against reaching the same conclusion in other cases unless 
the facts and circumstances are substantially the same. The Bulletin is 
published quarterly and may be obtained, on a subscription basis, from 
the Superintendent of Documents, U.S. Government Printing Office, 
Washington, DC 20402.
    (2) Objectives and standards for publication of ATF Rulings and ATF 
Procedures in the Alcohol, Tobacco and Firearms Bulletin. (i)(A) An 
``ATF Ruling'' is an official interpretation by the Bureau that has been 
published in the Bulletin for the information and guidance of taxpayers, 
Bureau officers, and others concerned. ATF Rulings represent the 
conclusions of the Bureau on the application of the law to the entire 
state of facts involved. In those that are based on positions taken in 
rulings to industry members or technical advice to Bureau field offices, 
identifying details and confidential information are deleted to prevent 
unwarranted invasions of privacy and to comply with statutory 
requirements concerning disclosure of information obtained from the 
public.
    (B) An ``ATF Procedure'' is a statement of procedure that affects 
the rights or duties of taxpayers or other members of the public under 
law and regulations administered by the Bureau or information that, 
although not necessarily affecting the rights and duties of the public, 
should be a matter of public knowledge. ATF Procedures establish methods 
for performing operations in compliance with the requirements of law and 
regulations. It is Bureau practice to publish as much of the internal 
management document or communication as is necessary for an 
understanding of the procedure. ATF Procedures may also be based on 
internal management documents which should be a matter of public 
knowledge even though not necessarily affecting the rights or duties of 
the public.
    (ii) It is the policy of the Bureau to publish in the Bulletin all 
rulings and other communications to members of the public or to Bureau 
field offices involving substantive law, procedures affecting taxpayer's 
rights or duties, or industry regulations, except those involving:
    (A) Issues specifically and clearly covered by statute or 
regulations;
    (B) Issues specifically covered by rulings, procedures, opinions, or 
court decisions previously published in the Bulletin;

[[Page 1098]]

    (C) Issues not likely to arise again because of unique or specific 
facts;
    (D) Determinations of fact rather than interpretations of law;
    (E) Acceptability under the law and regulations of containers, 
labels, and advertising involving alcoholic beverages;
    (F) Tobacco operations, such as the disposition of abandoned, 
seized, or condemned tobacco products;
    (G) Informers and informers' rewards; or
    (H) Disclosure of secret formulas, processes, business practices, 
and other similar information.
    (iii)(A) It is the practice of the Bureau to publish as much of the 
ruling or communication as is necessary for an understanding of the 
position stated. However, in order to prevent unwarranted invasions of 
personal privacy and to comply with statutory provisions, such as 18 
U.S.C. 1905 and 26 U.S.C 6103 and 7213, dealing with disclosure of 
information obtained from members of the public, identifying details, 
including the names and addresses of persons involved, and information 
of a confidential nature are deleted from the ruling.
    (B) ATF Rulings published in the Bulletin do not have the force and 
effect of Department of the Treasury Regulations (including amendatory 
Treasury decisions) but are published to provide precedents to be used 
in the disposition of other cases, and may be cited and relied upon for 
that purpose. No unpublished ruling or decision may be relied on, used, 
or cited by any officer or employee of the Bureau as a precedent in the 
disposition of other cases.
    (C) Concerned persons generally may rely upon ATF Rulings published 
in the Bulletin in determining the Bureau treatment of their own 
transactions and need not request specific rulings applying the 
principles of a published ATF Ruling to the facts of their particular 
cases. However, since each ATF Ruling represents the conclusion of the 
Bureau as to the application of the law to the entire state of facts 
involved, taxpayers, Bureau personnel, and others concerned are 
cautioned against reaching the same conclusion in other cases unless the 
facts and circumstances are substantially the same. They should consider 
the effect of subsequent legislation, regulations, court decisions and 
ATF Rulings.
    (D) Comments and suggestions from taxpayers or other concerned 
persons on ATF Rulings being prepared for publication in the Bulletin 
may be solicited, if justified by special circumstances. Conferences on 
ATF Rulings being prepared for publication will not be granted except 
where the Bureau determines that such action is justified by special 
circumstances.
    (iv)(A) The appropriate ATF officer is responsible for administering 
the program for the publication of ATF Rulings and ATF Procedures in the 
Bulletin including the standards for style and format.
    (B) In accordance with the standards set forth in paragraph 
(d)(2)(ii) of this section, each appropriate ATF officer is responsible 
for the preparation and appropriate referral for publication of ATF 
Rulings reflecting interpretations of substantive law made by his office 
and communicated in writing to members of the public or field offices. 
In this connection, the Chief Counsel is responsible for the referral to 
the appropriate appropriate ATF officer, for consideration for 
publication as ATF rulings, of interpretations of substantive law made 
by his office.
    (C) In accordance with the standards set forth in paragraph 
(d)(2)(ii) of this section, the appropriate ATF officers and the Chief 
Counsel are responsible for determining whether procedures established 
by an office under their jurisdiction should be published as ATF 
Procedures and for the initiation, content, and appropriate referral for 
publication of such ATF Procedures.

[T.D. ATF-47, 43 FR 10687, Mar. 15, 1978, as amended by T.D. ATF-201, 50 
FR 12533, Mar. 29, 1985; T.D. ATF-249, 52 FR 5962, Feb. 27, 1987; 
Redesignated and amended by T.D. ATF-378, 61 FR 29955, June 13, 1996; 
T.D. ATF-432, 65 FR 69253, Nov. 16, 2000; T.D. ATF-450, 66 FR 29030, May 
29, 2001]



Sec. 70.702  Forms and instructions.

    (a) Tax return forms and instructions. Tax forms and instructions 
are developed by the Bureau to explain the requirements of Chapters 32, 
51, 52, and 53 of Title 26 of the United States Code or

[[Page 1099]]

regulations issued thereunder, and are issued for the assistance of 
taxpayers in exercising their rights and discharging their duties under 
such laws and regulations. The tax return forms are the instruments 
through which taxes are collected.
    (b) Other forms and instructions. The Bureau provides other 
necessary or appropriate forms for assisting the public in complying 
with the technical requirements of the laws and regulations administered 
by the Bureau. The material contained in the forms and instructions, and 
the arrangement thereof, is carefully considered and is designed to lead 
the preparer step-by-step through an orderly accumulation of data to an 
accurate report of the information required.
    (c) Procurement of forms and instructions. Requests for forms should 
be mailed to the ATF Distribution Center, 7943 Angus Court, Springfield, 
Virginia 22153.

[T.D. ATF-47, 43 FR 10687, Mar. 15, 1978, as amended by T.D. ATF-92, 46 
FR 46914, Sept. 23, 1981; T.D. ATF-249, 52 FR 5962, Feb. 27, 1987; T.D. 
372, 61 FR 20724, May 8, 1996. Redesignated and amended by T.D. ATF-378, 
61 FR 29955, June 13, 1996]



                          Subpart I--Disclosure



Sec. 70.801  Publicity of information.

    For information relating to the disclosure of records that is not 
contained in this Subpart I, see 31 CFR Part 1 and the Appendix of that 
Part relating to the Bureau of Alcohol, Tobacco and Firearms. Direct 
further questions to the Bureau of Alcohol, Tobacco and Firearms, 
Washington, DC 20226, (202) 927-8480.

[T.D. ATF-378, 61 FR 29955, June 13, 1996, as amended by T.D. ATF-450, 
66 FR 29030, May 29, 2001]



Sec. 70.802  Rules for disclosure of certain specified matters.

    (a) Accepted offers in compromise. For each offer in compromise 
submitted and accepted pursuant to 26 U.S.C. 7122 in any case arising 
under Chapter 32 (relating to firearms and ammunition excise taxes) and 
Subtitle E (relating to alcohol, tobacco, and certain other excise 
taxes) of Title 26 of the United States Code, under section 107 of the 
Federal Alcohol Administration Act (27 U.S.C. 207) in any case arising 
under that Act, or in connection with property seized under Title I of 
the Gun Control Act of 1968 (18 U.S.C., Chapter 44) or title XI of the 
Organized Crime Control Act of 1970 (18 U.S.C., Chapter 40), a copy of 
the abstract and statement relating to the offer shall be kept available 
for public inspection, for a period of 1 year from the date of 
acceptance, with the appropriate ATF officer, Bureau of Alcohol, Tobacco 
and Firearms, Washington, DC 20226. Information may not be disclosed, 
however, concerning any trade secrets, processes, operations, style of 
work, apparatus, confidential data, or any other matter within the 
prohibition of 18 U.S.C. 1905. ``Return information'' (defined at 26 
U.S.C. 6103 (b)) may not be disclosed except as provided by 26 U.S.C. 
6103 (k) (1).
    (b) Information regarding liquor permits--(1) Applications for 
permits. Information with respect to the handling of applications for 
basic permits under the Federal Alcohol Administration Act (27 U.S.C. 
204) is maintained for public inspection until the expiration of 1 year 
following final action on these applications. See Sec. 1.59 of this 
chapter for more details.
    (c) List of plants and permittees. Upon request, the appropriate ATF 
official shall furnish a list of any type of qualified proprietor or 
permittee if the disclosure is not prohibited by law.
    (d) Information relating to certificates of label approval for 
distilled spirits, wine, and malt beverages. Upon written request, the 
appropriate ATF officer, Bureau of Alcohol, Tobacco and Firearms, 
Washington, DC 20226, shall furnish information as to the issuance, 
pursuant to section 105(e) of the Federal Alcohol Administration Act (27 
U.S.C. 205(e)) and Part 4, 5, or 7 of this chapter, of certificates of 
label approval, or of exemption from label approval, for distilled 
spirits, wine, or malt beverages. The request must identify the class 
and type and brand name of the product and the name and address of the 
bottler or importer thereof or of the person to whom the certificate was 
issued. The person making the request may obtain reproductions or 
certified

[[Page 1100]]

copies of such certificates upon payment of the established fees 
prescribed by 31 CFR 1.7. Information will not be disclosed, however, 
concerning any trade secrets, processes, operations, style of work, 
apparatus, confidential data, or any other matter prohibited by statutes 
such as but not limited to 18 U.S.C. 1905 or 26 U.S.C. 6103.
    (e) True identity of companies authorized to use trade names. 
Information regarding the true identity (name and address) of companies 
authorized to use trade names is available from the appropriate ATF 
officer, for disclosure upon request to any member of the public.
    (f) Information relating to the tax classification of a roll of 
tobacco wrapped in reconstituted tobacco. Upon written request, the 
appropriate ATF officer Programs), Bureau of Alcohol, Tobacco and 
Firearms, Washington, DC 20226, shall furnish information as to a Bureau 
determination of the tax classification of a roll of tobacco wrapped in 
reconstituted tobacco. The request must identify the brand name of the 
product and the name and address of the manufacturer or importer. 
Information may not be disclosed, however, concerning any trade secrets, 
processes, operations, apparatus, confidential data, or any other matter 
prohibited by statutes such as but not limited to 26 U.S.C. 6103 or 18 
U.S.C. 1905.
    (g) Comments received in response to a notice of proposed 
rulemaking. Written comments received in response to a notice of 
proposed rulemaking may be inspected by any person upon compliance with 
the provisions of this paragraph. Comments may be inspected in the 
Bureau of Alcohol, Tobacco and Firearms, Washington, DC 20226. The 
request to inspect comments must be in writing and signed by the person 
making the request and should be addressed to the Director, Bureau of 
Alcohol, Tobacco and Firearms, Washington, DC 20226. Upon delivery of 
such a written request to the place where the comments are located 
during the regular business hours of that office, the person making the 
request may inspect those comments. Copies of comments (or portions 
thereof) may be obtained by a written request addressed to the Director, 
Bureau of Alcohol, Tobacco and Firearms, Washington, DC 20226. The 
person making the request for copies should allow a reasonable time for 
processing the request. The provisions of 31 CFR 1.7, relating to fees, 
apply with respect to requests made in accordance with this paragraph.

(27 U.S.C. 205; 22 U.S.C. 2778; 26 U.S.C. 7602; 5 U.S.C. 301)

[T.D. ATF-47, 43 FR 10687, Mar. 15, 1978, as amended by T.D. ATF-57, 44 
FR 20794, May 9, 1979; T.D. ATF-201, 50 FR 12533, Mar. 29, 1985; T.D. 
ATF-249, 52 FR 5961, Feb. 27, 1987. Redesignated and amended by T.D. 
ATF-378, 61 FR 29955, 29956, June 13, 1996; T.D. ATF-450, 66 FR 29030, 
May 29, 2001]



Sec. 70.803  Requests or demands for disclosure in testimony and in related matters.

    (a) Authority. The provisions of this section are prescribed under 
the authority of 5 U.S.C. 301; section 2 of Reorganization Plan No. 26 
of 1950 (64 Stat. 1280); 12 U.S.C. 3412; 18 U.S.C. 1905; section 2(g) of 
the Federal Alcohol Administration Act (27 U.S.C. 202(c)); and sections 
5274, 6103, 7213, 7803 and 7805 of the Internal Revenue Code of 1954 (26 
U.S.C. 5274, 6103, 7213, 7803 and 7805).
    (b) Definitions. The following definitions apply whenever the 
defined terms appear in this section.
    (1) ATF officer or employee. The terms ATF officer and ATF employee 
mean all officers and employees of the United States, engaged in the 
administration and enforcement of laws administered by the Bureau of 
Alcohol, Tobacco and Firearms, and appointed or employed by, or subject 
to the directions, instructions or orders of, the Secretary of the 
Treasury or his delegate.
    (2) ATF records or information. The terms ATF records and ATF 
information mean any records (including copies thereof) or information, 
made or obtained by, furnished to, or coming to the knowledge of, any 
ATF officer or employee while acting in his official capacity, or 
because of his official status, with respect to the administration of 
laws administered by or concerning the Bureau of Alcohol, Tobacco and 
Firearms.
    (3) Demand. The term demand means any subpoena, notice of deposition 
either upon oral examination or written interrogatory, or other order, 
of any

[[Page 1101]]

court, administrative agency, or other authority.
    (c) Disclosure of ATF records or information prohibited without 
prior approval of the appropriate ATF officer. The disclosure, including 
the production, of ATF records or information to any person outside the 
Department of the Treasury or to any court, administrative agency, or 
other authority, in response to any request or demand for the disclosure 
of such records or information shall be made only with the prior 
approval of the appropriate ATF officer. However, nothing in this 
section restricts the disclosure of ATF records or information for which 
the appropriate ATF officer has determined that the disclosure is 
authorized under any provision of statute, Executive order, or 
regulations, or for which a procedure has been established by the 
Director. For example, this section does not restrict the disclosure of 
ATF records or information under Sec. 71.22, nor does it restrict the 
disclosure of ATF records or information which is requested by U.S. 
attorneys or attorneys of the Department of Justice for use in cases 
which arise under the laws administered by or concerning the Bureau of 
Alcohol, Tobacco and Firearms and which are referred by the Department 
of the Treasury to the Department of Justice for prosecution or defense.
    (d) Delegation of authority to determine disclosure and establish 
procedures. The appropriate ATF officer is hereby authorized to 
determine whether or not ATF officers and employees will be permitted to 
disclose ATF records or information in response to:
    (1) A request by any court, administrative agency, or other 
authority, or by any person, for the disclosure of such records or 
information; or
    (2) A demand for the disclosure of such records or information.
    (3) The Director is also authorized to establish such other 
procedures as he or she may deem necessary with respect to the 
disclosure of ATF records or information by ATF officers and employees. 
Any determination by the appropriate ATF officer as to whether ATF 
records or information will be disclosed, or any procedure established 
by the Director in connection therewith, must be made in accordance with 
applicable statutes, Executive orders, regulations, and any instructions 
that may be issued by the Secretary. Notwithstanding the preceding 
provisions of this paragraph, the appropriate ATF officer shall, where 
either the Secretary or such officer deems it appropriate, refer the 
opposing of a request or demand for disclosure of ATF records or 
information to the Secretary.
    (e) Procedure in the event of a request or demand for ATF records or 
information--(1) Request procedure. Any ATF officer or employee who 
receives a request for ATF records or information, the disposition of 
which is not covered by a procedure established by the Director, must 
promptly communicate the contents of the request to the appropriate ATF 
officer. The officer or employee must await instructions from the 
appropriate ATF officer concerning the response to the request.
    (2) Demand procedure. Any ATF officer or employee who is served with 
a demand for ATF records or information, the disposition of which is not 
covered by a procedure established by the Director, must promptly, and 
without awaiting appearance before the court, administrative agency, or 
other authority, communicate the contents of the demand to the 
appropriate ATF officer. The ATF officer or employee must await 
instructions from the appropriate ATF officer concerning the response to 
the demand. If it is determined by the appropriate ATF officer that the 
demand should be opposed, the U.S. attorney, his or her assistant, or 
other appropriate legal representative shall be requested to 
respectfully inform the court, administrative agency, or other authority 
that the appropriate ATF officer has instructed the ATF officer or 
employee to refuse to disclose the ATF records or information sought. If 
instructions have not been received from the appropriate ATF officer at 
the time when the ATF officer or employee is required to appear before 
the court, administrative agency, or other authority in response to the 
demand, the U.S. attorney, his or her assistant, or other appropriate 
legal representative must be requested to appear with the ATF officer or 
employee

[[Page 1102]]

upon whom the demand has been served and request additional time in 
which to receive such instructions. In the event the court, 
administrative agency, or other authority rules adversely with respect 
to the refusal to disclose the records or information pursuant to the 
instructions of the appropriate ATF officer, or declines to defer a 
ruling until instructions from the appropriate ATF officer have been 
received, the ATF officer or employee upon whom the demand has been 
served must, pursuant to this section, respectfully decline to disclose 
the ATF records or information sought.
    (3) Affidavit required for testimony. If testimony of an ATF officer 
or employee is sought by a request or demand on behalf of a party other 
than a State in any case or matter in which the United States is not a 
party, an affidavit, or if that is not feasible, a statement shall be 
submitted. The affidavit or statement shall be prepared by the party (or 
party's attorney) seeking the testimony, and shall set forth a summary 
of the testimony sought and its relevance to the proceedings. The 
affidavit or statement must be submitted before permission to testify 
may be granted. The appropriate ATF officer may, upon request and for 
good cause shown, waive the requirement of this paragraph.
    (4) Time limit for serving request or demand. The request or demand, 
together with the affidavit or statement (if required by paragraph 
(e)(3) of this section), must be served at least 5 working days prior to 
the scheduled date of testimony or disclosure of records, in order to 
ensure that the appropriate ATF officer has adequate time to consider 
whether to grant the request or demand. The appropriate ATF officer may, 
upon request and for good cause shown, waive the requirement of this 
paragraph.
    (5) Factors to be considered in determining whether a request or 
demand will be granted. The appropriate ATF officer must consider 
whether granting the request or demand would be appropriate under the 
relevant rules of procedure and substantive law concerning privilege. 
Among the requests or demands that will not be granted are those that 
would, if granted, result in--
    (i) The violation of a statute, such as 26 U.S.C. 6103 or 7213, or a 
rule of procedure, such as the grand jury secrecy rule (F.R.Cr.P. Rule 
6(e)), or a specific regulation;
    (ii) The disclosure of classified information;
    (iii) The disclosure of a confidential source or informant, unless 
the ATF officer or employee and the source or informant, have no 
objection;
    (iv) The disclosure of investigative records compiled for law 
enforcement purposes if enforcement proceedings would thereby be 
impeded, or of investigative techniques and procedures whose 
effectiveness would thereby be impaired, unless the appropriate ATF 
officer determines that the administration of justice requires 
disclosure;
    (v) The disclosure of trade secrets without the owner's consent; or
    (vi) Testimony in a case in which ATF has no interest, records or 
other official information.
    (f) State cases. The appropriate ATF officer, may, in the interest 
of Federal and State law enforcement, upon receipt of demands or 
requests of State authorities, and at the expense of the State, 
authorize employees under their supervision to attend trials and 
administrative hearings in liquor, tobacco, firearms, or explosives 
cases in which the State is a party or on behalf of the State in any 
criminal case, to produce records, and to testify as to facts coming to 
their knowledge in their official capacities. However, in cases where a 
defendant in a criminal case requests or demands testimony or the 
production of ATF records or information, authorization from the 
appropriate ATF officer is required. Production or testimony may not 
divulge information contrary to 26 U.S.C. 6103 and 7213, or 12 U.S.C. 
3412. See also 18 U.S.C. 1905.
    (g) Penalties. Any ATF officer or employee who disobeys the 
provisions of this section will be subject to dismissal and may incur 
criminal liability.

[T.D ATF-57, 44 FR 27094, May 9, 1979, as amended by T.D. ATF-302, 55 FR 
47325, Nov. 13, 1990. Redesignated by T.D. ATF-378, 61 FR 29955, June 
13, 1996, as amended by T.D. ATF-446a, 66 FR 19089, Apr. 13, 2001; T.D. 
ATF-450, 66 FR 29030, May 29, 2001]

[[Page 1103]]



PART 71--RULES OF PRACTICE IN PERMIT PROCEEDINGS--Table of Contents




            Subpart A--Scope and Construction of Regulations

Sec.
71.1  Scope of part.
71.2  Liberal construction.
71.3  Forms prescribed.

                         Subpart B--Definitions

71.5  Meaning of terms.

                           Subpart C--General

71.25  Communications and pleadings.
71.26  Service on applicant or respondent.
71.27  Service on the director of industry operations or Director.

                                  Time

71.28  Computation.
71.29  Continuances and extensions.

                       Representation at Hearings

71.30  Personal representation.
71.31  Attorneys and other representatives.

                  Subpart D--Compliance and Settlement

71.35  Opportunity for compliance.

                           Informal Settlement

71.36  General.
71.37  Notice of contemplated action.
71.38  Limitation on informal settlement.

                     Subpart E--Grounds for Citation

71.45  Basic permits.
71.46  Tobacco permits.
71.48  Operating permits and industrial use permits.
71.49  Applications for basic permits.
71.49a  Applications for operating permits and industrial use permits.
71.49b  Applications for tobacco permits.

                      Subpart F--Hearing Procedure

                                Citations

71.55  Content.
71.56  Form.
71.57  Execution and disposition.
71.58  Designated place of hearing.

                           Request for Hearing

71.59  Application cases.
71.60  Suspension, revocation, or annulment proceedings.
71.61  Notice of hearing.

                         Non-Request for Hearing

71.62  Application.
71.63  Suspension, revocation, or annulment proceedings.

                                 Answers

71.64  When required.
71.65  Answer admitting facts.
71.66  Prehearing conferences.

                            Failure to Appear

71.67  Applications.
71.68  [Reserved]
71.69  Suspension, revocation, or annulment.

                            Waiver of Hearing

71.70  Application proceedings.
71.71  Adjudication based upon written submissions.

                           Surrender of Permit

71.72  Before citation.
71.73  After citation.

                                 Motions

71.74  General.
71.75  Prior to hearing.
71.76  At hearing.

                                 Hearing

71.77  General.
71.78  Applications.
71.79  Suspension, revocation, or annulment.

                             Burden of Proof

71.80  Applications.
71.81  Suspension, revocation, or annulment.

                                 General

71.82  Stipulations at hearing.
71.83  Evidence.
71.84  Closing of hearings; arguments, briefs and proposed findings.
71.85  Reopening of the hearing.

                           Record of Testimony

71.86  Stenographic record.
71.87  Oath of reporter.

                  Subpart G--Administrative Law Judges

71.95  Responsibilities of administrative law judges.
71.96  Disqualification.
71.97  Powers.
71.98  Separation of functions.
71.99  Conduct of hearing.
71.100  Unavailability of administrative law judge.

                          Subpart H--Decisions

71.105  Administrative law judge's finding and decision or recommended 
          decision.
71.106  Certification and transmittal of record and decision.

[[Page 1104]]

                Action by Director of Industry Operations

71.107  Application proceedings.
71.107a  Director of Industry Operations' decision.
71.108  Suspension, revocation, or annulment proceedings.
71.109  Notice to Director.
71.110  Proceedings involving violations not within region of issuance 
          of permit.

                            Subpart I--Review

71.115  Appeal on petition to the Director.
71.116  Review by Director.
71.117  Permit privileges, exceptions.
71.118  Court review.
71.119  [Reserved]

                        Subpart J--Miscellaneous

71.125  Depositions.
71.126  Subpoenas.
71.127  Witnesses and fees.

                                 Record

71.128  What constitutes record.
71.129  Availability.

    Authority: 26 U.S.C. 5271, 5181, 5713, 7805, 27 U.S.C. 204.

    Source: 21 FR 1441, Mar. 6, 1956, unless otherwise noted. 
Redesignated at 40 FR 16835, Apr. 15, 1975 and further redesignated by 
T.D. ATF-463, 66 FR 42734, Aug. 15, 2001.

    Editorial Note: Nomenclature changes to part 71 appear by T.D. ATF-
414, 64 FR 49084, Sept. 10, 1999 and by T.D. ATF-463, 66 FR 42734, 
42735, Aug. 15, 2001.



            Subpart A--Scope and Construction of Regulations



Sec. 71.1  Scope of part.

    The regulations in this part govern the procedure and practice in 
connection with the disapproval of applications for basic permits, and 
for the suspension, revocation and annulment of such permits under 
sections 3 and 4 of the Federal Alcohol Administration Act (27 U.S.C. 
201 et seq.) and disapproval, suspension, and revocation of permits 
under title 26 of the U.S. Code. The regulations in this part shall also 
govern, insofar as applicable, any adversary proceeding involving 
adjudication required by statute to be determined on the record after 
opportunity for hearing, under laws administered by the Bureau of 
Alcohol, Tobacco and Firearms.

[21 FR 1441, Mar. 6, 1956, as amended by T.D. 6389, 24 FR 4790, June 12, 
1959. Redesignated at 40 FR 16835, Apr. 15, 1975]

    Editorial Note: For Federal Register citations affecting Sec. 71.1, 
see the List of CFR Sections Affected, which appears in the Finding Aids 
section of the printed volume and on GPO Access.



Sec. 71.2  Liberal construction.

    The regulations in this part shall be liberally contrued to secure 
just, expeditious, and efficient determination of the issues presented. 
The Rules of Civil Procedure for the U.S. District Courts (28 U.S.C. 
appendix), where applicable, shall be a guide in any situation not 
provided for or controlled by this part but shall be liberally construed 
or relaxed when necessary.

(5 U.S.C. 552(a) (80 Stat. 383, as amended))

[T.D. ATF-92, 46 FR 46917, Sept. 23, 1981]



Sec. 71.3  Forms prescribed.

    (a) The Director is authorized to prescribe all forms required by 
this part. All of the information called for in each form shall be 
furnished as indicated by the headings on the form and the instructions 
on or pertaining to the form. In addition, information called for in 
each form shall be furnished as required by this part.
    (b) Requests for forms should be mailed to the ATF Distribution 
Center, 7943 Angus Court, Springfield, Virginia 22153.

(5 U.S.C. 552(a) (80 Stat. 383, as amended))

[T.D. ATF-92, 46 FR 46918, Sept. 23, 1981, as amended by T.D. ATF-372, 
61 FR 20725, May 8, 1996]



                         Subpart B--Definitions



Sec. 71.5  Meaning of terms.

    When used in this part and in forms prescribed under this part, 
where not otherwise distinctly expressed or manifestly incompatible with 
the intent thereof, terms shall have the meaning ascribed in this 
subpart. Words in the plural form shall include the singular, and vice 
versa, and words importing the masculine gender shall include the 
feminine. The terms ``include'' and

[[Page 1105]]

``including'' do not exclude things not enumerated which are in the same 
general class.
    Administrative law judge. The person appointed pursuant to 5 U.S.C. 
3105, designated to preside over any administrative proceedings under 
this part.
    Applicant. Any person who has filed an initial application for a 
permit under the Federal Alcohol Administration Act or the Internal 
Revenue Code (26 U.S.C.).
    Application. Any application for a permit under the Federal Alcohol 
Administration Act or the Internal Revenue Code (26 U.S.C.) for 
operations not covered by an existing permit.
    Attorney for the Government. The attorney in the appropriate office 
of Chief Counsel authorized to represent the Director of Industry 
Operations in the proceeding.
    CFR. The Code of Federal Regulations.
    Citation. Includes any notice contemplating the disapproval of an 
application or any order to show cause why a permit should not be 
suspended, revoked or annulled.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, D.C.
    Director of Industry Operations. The principal ATF official in a 
field operations division responsible for administering the regulations 
in this part.
    Initial decision. The decision of the Director of Industry 
Operations or administrative law judge in a proceeding on the 
suspension, revocation or annulment of a permit.
    Other term. Any other term defined in the Federal Alcohol 
Administration Act (27 U.S.C. 201), the Internal Revenue Code (26 
U.S.C.) or the Administrative Procedure Act (5 U.S.C. 1001), where used 
in this part, shall have the meaning assigned to it therein.
    Permit--(a) Alcohol fuel permit. The document issued under 26 U.S.C. 
5181, authorizing the person named therein to engage in the business 
described therein.
    (b) Basic permit. The document authorizing the person named therein 
to engage in a designated business or activity under the Federal Alcohol 
Administration Act.
    (c) Industrial use permit. The document issued under 26 U.S.C. 
5271(a), authorizing the person named therein to withdraw and use 
distilled spirits free of tax in accordance with part 22 of this 
chapter, or withdraw and deal in or use specially denatured spirits in 
accordance with part 20 of this chapter, as described therein.
    (d) Operating permit. The document issued under 26 U.S.C. 5171, 
authorizing the person named therein to engage in the business described 
therein.
    (e) Tobacco permit. The document issued under 26 U.S.C. 5713(a), 
authorizing the person named therein to engage in the business described 
therein.
    Permittee. Any person holding a basic permit under the Federal 
Alcohol Administration Act or the Internal Revenue Code (26 U.S.C.).
    Person. An individual, trust, estate, partnership, association, 
company, or corporation.
    Recommended decision. The advisory decision of the administrative 
law judge in any proceeding on an initial application for a permit.
    Respondent. Any person holding a permit against which an order has 
been issued to show cause why such permit should not be suspended, 
revoked or annulled.

[T.D. ATF-48, 43 FR 13543, Mar. 31, 1978; 44 FR 55845, Sept. 28, 1978, 
and amended by T.D. ATF-62, 44 FR 71696, Dec. 11, 1979; T.D. ATF-199, 50 
FR 9196, Mar. 6, 1985; T.D ATF-244, 51 FR 45762, Dec. 22, 1986; T.D. 
ATF-374, 61 FR 29956, June 13, 1996; T.D. ATF-414, 64 FR 49084, Sept. 
10, 1999]



                           Subpart C--General



Sec. 71.25  Communications and pleadings.

    All communications to the Government regarding the procedures set 
forth in this part and all pleadings, such as answers, motions, 
requests, or other papers or documents required or permitted to be filed 
under this part, relating to a proceeding pending before an 
administrative law judge, shall be addressed to the administrative law 
judge, at his post of duty or to the administrative law judge, in care 
of the director of industry operations of the region in which the 
business of the applicant or respondent is operated or

[[Page 1106]]

proposed to be operated to be forwarded to the examiner. Communications 
concerning proceedings not pending before an administrative law judge, 
should be addressed to the Director of Industry Operations (DIO) or 
Director, as the case may be. All pleadings should be filed in 
quadruplicate.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
as amended by T.D. ATF-374, 61 FR 29957, June 13, 1996]



Sec. 71.26  Service on applicant or respondent.

    All orders, notices, citations, motions and other formal documents, 
except subpoenas, required to be served under the regulations in this 
part may be served by mailing a signed duplicate original copy thereof 
to the permittee or applicant by registered mail, with request for 
return receipt card, at the address stated in his permit or application 
or at his last known address, or by delivery of such original copy to 
the permittee or applicant personally, or in the case of a corporation, 
partnership, or other unincorporated association, by delivering the same 
to an officer, or manager, or general agent thereof, or to its attorney 
of record. Such personal service may be made by any employee of the 
Bureau of Alcohol Tobacco and Firearms or by any employee of the 
Treasury Department designated by the Secretary. A certificate of 
mailing and the return receipt card, or certificate of service signed by 
the person making such service, shall be filed as a part of the record.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55846, Sept. 28, 1979]



Sec. 71.27  Service on the director of industry operations or Director.

    Pleadings, motions, notices, and other formal documents, except 
subpoenas, may be served, by registered mail or personally, on the 
director of industry operations (or upon the attorney for the Government 
on behalf of the director of industry operations, or on the Director, if 
the proceeding is before him for review on appeal.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
as amended by T.D. ATF-374, 61 FR 29957, June 13, 1996]

                                  Time



Sec. 71.28  Computation.

    In computing any period of time prescribed or allowed by this part, 
the day of the act, event or default after which the designated period 
of time is to run, is not to be included. The last day of the period to 
be computed is to be included, unless it be a Saturday, Sunday or legal 
holiday, in which event the period runs until the next day which is 
neither a Saturday, Sunday or legal holiday. Pleading, requests, or 
other papers or documents required or permitted to be filed under this 
part must be received for filing at the appropriate office within the 
time limits, if any, for such filing.



Sec. 71.29  Continuances and extensions.

    For good cause shown, the administrative law judge, Director, 
director of industry operations, or the administrative law judge, as the 
case may be, may grant continuances and as to all matters pending before 
him extend any time limit prescribed by the regulations in this part 
(except where the time limit is statutory).

(26 U.S.C. 7805 (68A Stat. 917), 27 U.S.C. 205 (49 Stat. 981 as 
amended), 18 U.S.C. 926 (82 Stat. 959), and Sec. 38, Arms Export Control 
Act (22 U.S.C. 2778, 90 Stat. 744))

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 43 FR 13531, Mar. 31, 1978; T.D. ATF-374, 61 
FR 29957, June 13, 1996]

                       Representation at Hearings



Sec. 71.30  Personal representation.

    Any individual or member of a partnership may after adequate 
identification, appear for himself, or such partnership, and a 
corporation or association may be represented by a bona fide officer of 
such corporation or association, upon showing of adequate authorization.



Sec. 71.31  Attorneys and other representatives.

    A respondent or applicant may be represented by an attorney, 
certified public accountant, or other person enrolled to practice before 
the Bureau of Alcohol, Tobacco and Firearms under

[[Page 1107]]

31 CFR part 8--Practice Before the Bureau of Alcohol, Tobacco and 
Firearms. The representative shall file in the proceeding a duly 
executed power of attorney to represent the applicant or respondent. See 
26 CFR 601.501 through 601.527 (conference and practice requirements). 
The director of industry operations shall be represented in proceedings 
under this part by the attorney for the Government who is authorize to 
execute and file motions, briefs, and other papers in the proceeding, on 
behalf of the director of industry operations, in his own name as 
``Attorney for the Government''.

(5 U.S.C. 552(a) (80 Stat. 383, as amended))

[T.D. ATF-48, 44 FR 55846, Sept. 28, 1979, as amended by T.D. ATF-92, 46 
FR 46918, Sept. 23, 1981; T.D. ATF-374, 61 FR 29957, June 13, 1996]



                  Subpart D--Compliance and Settlement



Sec. 71.35  Opportunity for compliance.

    Except in proceedings involving willfulness or those in which the 
public interest requires otherwise, and the director of industry 
operations so alleges in his citation, stating his reasons therefor, no 
permit shall be suspended, revoked or annulled, unless, prior to the 
institution of proceedings, facts or conduct warranting such action 
shall have been called to the attention of the permittee by the director 
of industry operations, in writing, and the permittee shall have been 
accorded an opportunity to demonstrate or achieve compliance with all 
lawful requirements, as set forth in section 9(b) of the Administrative 
Procedure Act. If the permittee fails to meet the requirements of the 
law and regulations within such reasonable time as may be specified by 
the director of industry operations, proceedings for suspension, 
revocation or annulment of the permit shall be initiated.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-199, 50 FR 9196, Mar. 6, 1985; T.D. ATF-374, 61 
FR 29957, June 13, 1996]

                           Informal Settlement



Sec. 71.36  General.

    In all proceedings in which a permittee is cited to show cause why 
the permit should not be suspended, revoked or annulled, the permittee 
shall be afforded opportunity for the submission and consideration of 
facts, arguments, offers of settlement, or proposals of adjustment, 
where time, the nature of the proceeding, and the public interest 
permit. Such submittals should be made to the director of industry 
operations, but may be made through the attorney for the Government. 
Where necessary, the date of the hearing may be postponed, pending 
consideration of such proposals, when they are made in good faith and 
not for the purpose of delay. If proposals of settlement are submitted, 
and they are considered unsatisfactory, the director of industry 
operations may reject the proposals and may, either directly or through 
the attorney for the Government, inform the permittee of any conditions 
on which the alleged violations may be settled. If the proposals of 
settlement are considered satisfactory to the director of industry 
operations, the permittee shall be notified thereof and the proceeding 
shall be dismissed, unless such proposals of settlement include a 
monetary offer in compromise considered satisfactory to the director of 
industry operations, in which event the proceeding shall be held in 
abeyance pending final action on such monetary offer in compromise.

[T.D. ATF-244, 51 FR 45762, Dec. 22, 1986, as amended by T.D. ATF-374, 
61 FR 29957, June 13, 1996]



Sec. 71.37  Notice of contemplated action.

    Where the director of industry operations believes that the matter 
may be settled informally, i.e., without formal administrative 
proceedings, he shall, in accordance with section 5 (b) of the 
Administrative Procedure Act, prior to the issuance of a citation, 
inform the permittee of the contemplated issuance of an order to show 
cause why his permit should not be suspended, revoked or annulled, and 
that he is being given an opportunity for the submission and

[[Page 1108]]

consideration of facts, arguments, offers of settlement, or proposals of 
adjustment. The notice should inform the permittee of the charges on 
which the citation would be based, if issued, and afford him a period of 
10 days from the date of the notice, or such longer period as the 
director of industry operations deems necessary, in which to submit 
proposals of settlement to the director of industry operations. Where 
informal settlement is not reached promptly because of inaction of the 
permittee or proposals are made for the purpose of delay, a citation 
shall be issued in accordance with Secs. 71.55 and 71.56.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-199, 50 FR 9196, Mar. 6, 1985; T.D. ATF-244, 51 
FR 45763, Dec. 22, 1986; T.D. ATF-374, 61 FR 29957, June 13, 1996]



Sec. 71.38  Limitation on informal settlement.

    Where the evidence is conclusive and the nature of the violation is 
such as to preclude any settlement short of suspension, revocation or 
annulment, or the violation is of a continuing character that 
necessitates immediate action to protect the public interest, or where 
the director of industry operations believes that any informal 
settlement of the alleged violation will not insure future compliance 
with the laws and regulations, or in any similar case where the 
circumstances are such as to clearly preclude informal settlement, and 
the director of industry operations so finds and states his reasons 
therefor as provided in Sec. 71.35, he may restrict settlement to that 
provided in Sec. 71.71.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-199, 50 FR 9197, Mar. 6, 1985; T.D. ATF-374, 61 
FR 29957, June 13, 1996]



                     Subpart E--Grounds for Citation



Sec. 71.45  Basic permits.

    Whenever the director of industry operations has reason to believe 
that any person has willfully violated any of the conditions of his 
basic permit, or has not in fact or in good faith engaged in the 
operations authorized by such permit for a period of more than two 
years, or that such permit was procured through fraud, misrepresentation 
or concealment of material facts, he shall issue a citation for the 
suspension, revocation or annulment of such permit, as the case may be.

[21 FR 1441, Mar. 6, 1956, as amended by T.D. 6389, 24 FR 4790, June 12, 
1959. Redesignated at 40 FR 16835, Apr. 15, 1975, as amended by T.D. 
ATF-374, 61 FR 29957, June 13, 1996]



Sec. 71.46  Tobacco permits.

    Whenever the director of industry operations has reason to believe 
that any person has not in good faith complied with any of the 
provisions of 26 U.S.C. chapter 52 or regulations issued thereunder, or 
has not complied with any provision of 26 U.S.C. which involves intent 
to defraud, or has violated any of the conditions of his permit, or has 
failed to disclose any material information required, or has made any 
materially false statement, in the application for his permit, or has 
failed to maintain his premises in such manner as to protect the 
revenue, the director of industry operations shall issue a citation for 
the revocation or suspension of such permit.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55846, Sept. 28, 1979; T.D. ATF-374, 
61 FR 29957, June 13, 1996]



Sec. 71.48  Operating permits and industrial use permits.

    Whenever the director of industry operations has reason to believe 
that any person who has an operating permit or an industrial use permit:
    (a) Has not in good faith complied with the provisions of 26 U.S.C. 
chapter 51 or enabling regulations; or
    (b) Has violated the conditions of such permit; or
    (c) Has made any false statement as to any material fact in his 
application therefor; or
    (d) Has failed to disclose any material information required to be 
furnished; or
    (e) Has violated or conspired to violate any law of the United 
States relating to intoxicating liquor or has been convicted of any 
offense under 26 U.S.C. punishable as a felony or of any conspiracy to 
commit such an offense; or

[[Page 1109]]

    (f) Is (in the case of any person who has a permit to procure or use 
distilled spirits free of tax for nonbeverage purposes and not for 
resale or use in the manufacture of any product for sale, or to procure, 
deal in, or use specially denatured distilled spirits) by reason of his 
operations, no longer warranted in procuring or using the distilled 
spirits or specially denatured distilled spirits authorized by his 
permit; or
    (g) Has, in the case of any person who has a permit to procure, deal 
in, or use specially denatured distilled spirits, manufactured articles 
which do not correspond to the descriptions and limitation prescribed by 
law and regulations; or
    (h) Has not engaged in any of the operations authorized by the 
permit for a period of more than 2 years;


He may issue a citation for the revocation or suspension of such permit.

(72 Stat. 1349, 1370; 26 U.S.C. 5171, 5271)

[T.D. 6389, 24 FR 4790, June 12, 1959. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55846, Sept. 28, 1979; T.D. 
ATF-199, 50 FR 9196 and 9197, Mar. 6, 1985; T.D. ATF-374, 61 FR 29957, 
June 13, 1996]



Sec. 71.49  Applications for basic permits.

    If, upon examination of any application (including a renewal 
application) for a basic permit, the director of industry operations has 
reason to believe that the applicant is not entitled to such permit he 
shall issue a citation for the contemplated disapproval of the 
application.

[T.D. 6954, 33 FR 6814, May 4, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975; as amended by T.D. ATF-374, 61 FR 29957, June 13, 1996]



Sec. 71.49a  Applications for operating permits and industrial use permits.

    If, on examination of an application for an operating permit or an 
industrial use permit, the director of industry operations has reason to 
believe:
    (a) In case of an application to withdraw and use distilled spirits 
free of tax, the applicant is not authorized by law or regulations 
issued pursuant thereto to withdraw or use such distilled spirits; or
    (b) The applicant (including in the case of a corporation, any 
officer, director, or principal stockholder and, in the case of a 
partnership, a partner) is, by reason of the applicant's business 
experience, financial standing, or trade connections, not likely to 
maintain operations in compliance with 26 U.S.C. chapter 51 or 
implementing regulations; or
    (c) The applicant has failed to disclose any material information 
required, or has made any false statement as to any material fact, in 
connection with his application; or
    (d) The premises on which the applicant proposes to conduct the 
business are not adequate to protect the revenue;


He may issue a citation for the contemplated disapproval of the 
application.

(72 Stat. 1349, 1370; 26 U.S.C. 5171, 5271)

[T.D. 6389, 24 FR 4791, June 12, 1959. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55846, Sept. 28, 1979; T.D. 
ATF-199, 50 FR 9196 and 9197, Mar. 6, 1985; T.D. ATF-374, 61 FR 29957, 
June 13, 1996]



Sec. 71.49b  Applications for tobacco permits.

    If, on examination of an application for a tobacco permit provided 
for in 26 U.S.C. 5713, the director of industry operations has reason to 
believe--
    (a) The premises on which it is proposed to conduct the business are 
not adequate to protect the revenue; or
    (b) The applicant for a permit does not meet the minimum 
manufacturing and activity requirements in 27 CFR 40.61; or
    (c) The applicant (including, in the case of a corporation, any 
officer, director, or principal stockholder and, in the case of a 
partnership, a partner) is, by reason of his business experience, 
financial standing, or trade connections, not likely to maintain 
operations in compliance with 26 U.S.C. chapter 52, or has failed to 
disclose any material

[[Page 1110]]

information required or made any material false statement in the 
application; the director of industry operations may issue a citation 
for the contemplated disapproval of the application.

(72 Stat. 1421; 26 U.S.C. 5712)

[T.D. 6389, 24 FR 4791, June 12, 1959. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55846, Sept. 28, 1979; T.D. 
ATF-374, 61 FR 29957, June 13, 1996; T.D. ATF-421, 64 FR 71923, Dec. 22, 
1999; T.D. ATF-460, 66 FR 39093, July 27, 2001]



                      Subpart F--Hearing Procedure

                                Citations



Sec. 71.55  Content.

    (a) Citation for the suspension, revocation or annulment of a permit 
shall be issued by the director of industry operations and shall set 
forth (1) the sections of law and regulations relied upon for authority 
and jurisdiction, (2) in separate paragraphs, the matters of fact 
constituting the violations specified, dates, places, section of law and 
regulations violated, and (3) the permittee has 15 days within which to 
request a hearing before an administrative law judge.
    (b) Citations for the disapproval of an application for a permit 
shall set forth (1) the sections of law and regulations relied upon for 
authority and jurisdiction, (2) in separate paragraphs, the matters of 
fact and law relied upon for the contemplated disapproval of the 
application, and (3) that the application will be disapproved unless a 
hearing is requested within 15 days.

[T.D. ATF-244, 51 FR 45763, Dec. 22, 1986, as amended by T.D. ATF-374, 
61 FR 29957, June 13, 1996]



Sec. 71.56  Form.

    Citations shall be issued on the following forms:
    (a) Form 5000.6. ``Order To Show Cause'', shall be used for all 
citations for the suspension, revocation, or annulment, as the case may 
be, of permits under the Internal Revenue Code or the Federal Alcohol 
Administration Act.
    (b) Forms 5000.17. ``Notice of Contemplated Disapproval of 
Application For Basic Permit,'' shall be used to issue notice of 
contemplated disapproval of applications for permit.

[21 FR 1441, Mar. 6, 1956, as amended by T.D. 6389, 24 FR 4791, June 12, 
1959. Redesignated at 40 FR 16835, Apr. 15, 1975, and amended by T.D. 
ATF-199, 50 FR 9197, Mar. 6, 1985]

    Editorial Note: For Federal Register citations affecting Sec. 71.56, 
see the List of CFR Sections Affected, which appears in the Finding Aids 
section of the printed volume and on GPO Access.



Sec. 71.57  Execution and disposition.

    Forms 5000.6 and 5000.17 shall be executed in quintuplicate. A 
signed duplicated original shall be served on the permittee. If a 
hearing is requested, one copy shall be sent to the administrative law 
judge designated to conduct the hearing. The original copy containing 
the certificate of service shall be placed in the official record of the 
proceeding; and the remaining copies shall be retained for the office of 
the director of industry operations.

[T.D. ATF-244, 51 FR 45763, Dec. 22, 1986, as amended by T.D. ATF-374, 
61 FR 29957, June 13, 1996]



Sec. 71.58  Designated place of hearing.

    The designated place of hearing shall be such as meets the 
convenience and necessity of the parties.

[T.D. 6389, 24 FR 4791, June 12, 1959. Redesignated at 40 FR 16835, Apr. 
15, 1975]

                           Request for Hearing



Sec. 71.59  Application cases.

    If the applicant for a permit desires a hearing, he shall file a 
request therefor, in writing, with the director of industry operations 
within fifteen days after receipt of notice of the contemplated 
disapproval, in whole or in part, of his application.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-199, 50 FR 9197, Mar. 6, 1985; T.D. ATF-374, 61 
FR 29957, June 13, 1996]



Sec. 71.60  Suspension, revocation, or annulment proceedings.

    (a) If a hearing is desired, the respondent shall file a request, in 
writing, with the director of industry operations within 15 days after 
receipt of the citation or within such time as the

[[Page 1111]]

director of industry operations may allow.
    (b) Where a respondent requests a hearing, the director of industry 
operations shall forward a copy of the request together with a copy of 
the citation to the Director for the assignment of an administrative law 
judge.
    (c) After the Director notifies the director of industry operations 
of the assignment of the administrative law judge, the director of 
industry operations shall serve a notice of designation of the 
administrative law judge on the respondent.
    (d) The administrative law judge shall set a time and place for a 
hearing and shall serve notice thereof on the parties at least 10 days 
in advance of the hearing date.

[T.D. ATF-244, 51 FR 45763, Dec. 22, 1986, as amended by T.D. ATF-374, 
61 FR 29957, June 13, 1996]



Sec. 71.61  Notice of hearing.

    In case a request for a hearing is filed by the applicant within the 
required time, the director of industry operations shall refer the 
matter to the administrative law judge and the administrative law judge 
shall set a time and place for a hearing and shall serve notice thereof 
upon the parties at least ten days in advance of the hearing date.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
as amended by T.D. ATF-374, 61 FR 29957, June 13, 1996]

                         Non-Request for Hearing



Sec. 71.62  Application.

    In the case of an application, if the applicant does not request a 
hearing within the time specified in Sec. 71.59, or within such further 
time as the director of industry operations may in his discretion allow, 
the director of industry operations will by order, stating the findings 
upon which it is based, disapprove the application, and will serve 
signed duplicate original of such order on the applicant.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-199, 50 FR 9197, Mar. 6, 1985; T.D. ATF-374, 61 
FR 29957, June 13, 1996]



Sec. 71.63  Suspension, revocation, or annulment proceedings.

    If the respondent does not request a hearing within the time 
specified in Sec. 71.60, and does not file an answer as required in 
Sec. 71.64, the district director shall make the initial decision in the 
case in accordance with Sec. 71.79.

[T.D. ATF-244, 51 FR 45763, Dec. 22, 1986, as amended by T.D. ATF-374, 
61 FR 29957, June 13, 1996]

                                 Answers



Sec. 71.64  When required.

    (a) Where the respondent requests a hearing in accordance with 
Sec. 71.60, a written answer shall be filed with the administrative law 
judge and served on the director of industry operations within 15 days 
after service of the designation of the administrative law judge.
    (b) Where no hearing is requested, the respondent shall file a 
written answer with the director of industry operations within 15 days 
after service of a citation.
    (c) An answer shall contain a concise statement of the facts that 
constitute his grounds for defense. The hearing may be limited to the 
issues contained in the citation and the answer. The administrative law 
judge, or director of industry operations as the case may be, may, as a 
matter of discretion, waive any requirement of this section.
    (d) Answers need not be filed in application proceedings.

[T.D. ATF-244, 51 FR 45763, Dec. 22, 1986, as amended by T.D. ATF-374, 
61 FR 29957, June 13, 1996]



Sec. 71.65  Answer admitting facts.

    If the respondent desires to waive the hearing on the allegations of 
fact set forth in the order to show cause, and does not contest the 
facts, the answer may consist of a statement that the respondent admits 
all material allegations of fact charged in the citation to be true. The 
director of industry operations shall thereupon base the decision on the 
citation and such answer although such an answer shall not affect the 
respondent's right to submit

[[Page 1112]]

proposed findings of fact and conclusions of law, or the right to 
appeal.

[T.D. ATF-244, 51 FR 45763, Dec. 22, 1986, as amended by T.D. ATF-374, 
61 FR 29957, June 13, 1996]



Sec. 71.66  Prehearing conferences.

    In any proceeding the administrative law judge may, upon his own 
motion or upon the motion of one of the parties or their qualified 
representatives, in his discretion direct the parties or their qualified 
representatives to appear at a specified time and place for a conference 
to consider:
    (a) The simplifications of the issues;
    (b) The necessity of amendments to the pleadings;
    (c) The possibility of obtaining stipulations, admissions of facts 
and of documents;
    (d) The limitation of the number of expert witnesses; and
    (e) Such other matters as may aid in the disposition of the 
proceeding. As soon as practicable after such conference, the 
administrative law judge shall issue an order which recites the action 
taken thereat, the amendments allowed to the pleadings and the 
agreements made by the parties or their qualified representatives as to 
any of the matters considered, and which limits the issues for hearing 
to those not disposed of by admission or agreement; and such order shall 
control the subsequent course of the proceedings, unless modified for 
good cause by a subsequent order.

                            Failure To Appear



Sec. 71.67  Applications.

    Where the applicant on an application for a permit has requested a 
hearing and does not appear at the appointed time and place, and 
evidence has not been offered to refute or explain the grounds upon 
which disapproval of the application is contemplated, this shall be 
construed as a waiver of the hearing, a default will be entered and the 
administrative law judge shall recommend disapproval of said 
application.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-199, 50 FR 9197, Mar. 6, 1985]



Sec. 71.68  [Reserved]



Sec. 71.69  Suspension, revocation, or annulment.

    If on the date set for the hearing respondent does not appear and no 
evidence has been offered, the attorney for the Government will proceed 
ex parte and offer for the record sufficient evidence to make a prima 
facie case. At such hearing, documents, statements and affidavits may be 
submitted in lieu of testimony of witnesses.

                            Waiver of Hearing



Sec. 71.70  Application proceedings.

    At any time prior to final action thereon the applicant may, by 
filing written notice with the director of industry operations, withdraw 
his application. If such a notice is filed after referral to the 
administrative law judge of a proceeding on an application for a permit 
and prior to issuance of his recommended decision or decision thereon, 
the director of industry operations shall move the administrative law 
judge to dismiss the proceedings as moot. If such a notice is filed 
while the proceeding is before the director of industry operations and 
prior to final action thereon, that is, either (a) after issuance of a 
notice of contemplated disapproval and before referral of the proceeding 
to the administrative law judge or (b) after issuance by the 
administrative law judge of his recommended decision and prior to the 
director of industry operations' order disapproving the application, the 
director of industry operations shall, by order, dismiss the proceeding.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-199, 50 FR 9197, Mar. 6, 1985; T.D. ATF-374, 61 
FR 29957, June 13, 1996]



Sec. 71.71  Adjudication based upon written submissions.

    The respondent may waive the hearing before the administrative law 
judge, and stipulate that the matter will be adjudicated by the director 
of industry operations based upon written submissions. Written 
submissions may include stipulations of law or facts,

[[Page 1113]]

proposed findings of fact and conclusions of law, briefs, or any other 
documentary material. The pleadings together with the written 
submissions of both the attorneys for the Government and the respondent 
shall constitute the record on which the initial decision shall be 
based. The election to contest the citation without a hearing under this 
section does not affect the respondent's right to appeal.

[T.D. ATF-244, 51 FR 45763, Dec. 22, 1986, as amended by T.D. ATF-374, 
61 FR 29957, June 13, 1996]

                           Surrender of Permit



Sec. 71.72  Before citation.

    If a respondent surrenders the permit before citation, the director 
of industry operations may accept the surrender. But if the evidence, in 
the opinion of the director of industry operations, warrants citation 
for suspension, revocation or annulment, the surrender shall be refused 
and the director of industry operations shall issue the citation.

[T.D. ATF-244, 51 FR 45764, Dec. 22, 1986, as amended by T.D. ATF-374, 
61 FR 29957, June 13, 1996]



Sec. 71.73  After citation.

    If a respondent surrenders the permit after citation and prior to an 
initial decision, the director of industry operations may accept the 
surrender of the permit and dismiss the proceeding as moot. If, however, 
in the opinion of the director of industry operations, the evidence is 
such as to warrant suspension, revocation or annulment, as the case may 
be, the surrender of the permit shall be refused, and the proceeding 
shall continue.

[T.D. ATF-244, 51 FR 45764, Dec. 22, 1986, as amended by T.D. ATF-374, 
61 FR 29957, June 13, 1996]

                                 Motions



Sec. 71.74  General.

    All motions shall be made and addressed to the officer before whom 
the proceeding is pending, and copies of all motion papers shall be 
served upon the other party or parties. Such officer may dispose of any 
motion without oral argument, but he may, if he so desires, set it down 
for hearing and request argument. He may dispose of such motion prior to 
the hearing on the merits or he may postpone the disposition until the 
hearing on the merits. No appeal may be taken from any ruling on a 
motion until the whole record is certified for review. Examples of 
typical motions may be found in the Rules of Civil Procedure referred to 
in Sec. 71.2.



Sec. 71.75  Prior to hearing.

    All motions which should be made prior to the hearing, such as 
motion directed to the sufficiency of the pleadings or of preliminary 
orders, shall be filed in writing with the director of industry 
operations issuing the citation or the administrative law judge if the 
matter has been referred to him, and shall briefly state the order or 
relief applied for and the grounds for such motion, and shall be filed 
within 15 days after service of the citation.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
as amended by T.D. ATF-374, 61 FR 29957, June 13, 1996]



Sec. 71.76  At hearing.

    Motions at the hearing may be made in writing to the administrative 
law judge or stated orally on the record.

                                 Hearing



Sec. 71.77  General.

    If a hearing is requested, it shall be held at the time and place 
stated in the notice of hearing unless otherwise ordered by the 
administrative law judge.

[T.D. ATF-244, 51 FR 45764, Dec. 22, 1986]



Sec. 71.78  Applications.

    The administrative law judge who presides at the hearing on 
applications shall recommend a decision to the director of industry 
operations who shall make the initial decision as provided in 
Sec. 71.107. The applicant may be directed by the director of industry 
operations to produce such records as may be deemed necessary for 
examination. All hearings on applications shall be

[[Page 1114]]

open to the public subject to such restrictions and limitations as may 
be consistent with orderly procedure.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-199, 50 FR 9197, Mar. 6, 1985; T.D. ATF-374, 61 
FR 29957, June 13, 1996]



Sec. 71.79  Suspension, revocation, or annulment.

    (a) The administrative law judge who presides at the hearing in 
proceedings for the suspension, revocation and annulment of permits 
shall make the initial decision.
    (b) If no hearing is requested, the director of industry operations 
shall make the initial decision.

[T.D. ATF-244, 51 FR 45764, Dec. 22, 1986, as amended by T.D. ATF-374, 
61 FR 29957, June 13, 1996]

                             Burden of Proof



Sec. 71.80  Applications.

    In hearings on the contemplated disapproval of applications there 
may be incorporated in the record sufficient testimony, reports, 
affidavits and other documents to be considered only for the limited 
purpose of establishing probable cause for the issuance of the notice of 
contemplated disapproval by showing that the director of industry 
operations had reason to believe that the applicant is not entitled to a 
permit. The burden of proof shall be upon the applicant to produce 
evidence to show he is entitled to a permit. The director of industry 
operations may, instead of following the aforementioned procedure, 
assume the burden of going forward.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-199, 50 FR 9197, Mar. 6, 1985; T.D. ATF-374, 61 
FR 29957, June 13, 1996]



Sec. 71.81  Suspension, revocation, or annulment.

    In hearings on the suspension, revocation, or annulment of a permit, 
the burden of proof is on the Government.

[T.D. ATF-199, 50 FR 9197, Mar. 6, 1985]

                                 General



Sec. 71.82  Stipulations at hearing.

    If there has been no prehearing conference under Sec. 71.66, the 
administrative law judge shall at the beginning of the hearing, require 
that the parties attempt to arrive at such stipulations as will 
eliminate the necessity of taking evidence with respect to allegations 
of fact concerning which there is no substantial dispute. The 
administrative law judge should take similar action, where it appears 
appropriate, throughout the hearing and should call and conduct any 
conferences which he deems advisable with a view to the simplification, 
clarification, and disposition of any of the issues involved.



Sec. 71.83  Evidence.

    Any evidence which would be admissible under the rules of evidence 
governing proceedings in matters not involving trial by jury in the 
Courts of the United States, shall be admissible and controlling as far 
as possible: Provided, That the administrative law judge may relax such 
rules in any hearing when in his judgment such relaxation would not 
impair the rights of either party and would more speedily conclude the 
hearing, or would better serve the ends of justice. Except as provided 
in Sec. 71.81, the proponent of an order shall have the burden of proof. 
Every party shall have the right to present his case or defense by oral 
or documentary evidence, depositions, duly authenticated copies of 
records and documents, to submit rebuttal evidence, and to conduct such 
reasonable cross-examination as may be required for a full and true 
disclosure of the facts. The administrative law judge shall have the 
right in his discretion to limit the number of witnesses whose testimony 
may be merely cumulative and shall, as a matter of policy, not only 
exclude irrelevant, immaterial, or unduly repetitious evidence but shall 
also limit the cross-examination of witnesses to reasonable bounds so as 
not to unnecessarily prolong the hearing and unduly burden the record. 
Material and relevant evidence shall not be excluded, because it is not 
the best evidence, unless its authenticity is challenged, in which case 
reasonable

[[Page 1115]]

time shall be given to establish its authenticity. When portions only of 
a document are to be relied upon, the offering party shall prepare the 
pertinent excerpts, adequately identified, and shall supply copies of 
such excerpts, together with a statement indicating the purpose for 
which such materials will be offered, to the administrative law judge 
and to the other parties. Only the excerpts, so prepared and submitted, 
shall be received in the record. However, the whole of the original 
document should be made available for examination and for use by 
opposing counsel for purposes of cross-examination. Compilations, 
charts, summaries of data and photostatic copies of documents may be 
admitted in evidence if the proceedings will thereby be expedited, and 
if the material upon which they are based is available for examination 
by the parties. Objections to the evidence shall be in short form, 
stating the grounds relied upon. The transcript shall not include 
argument or debate on objections, except as ordered by the 
administrative law judge, but shall include the rulings thereon.



Sec. 71.84  Closing of hearings; arguments, briefs and proposed findings.

    Before closing a hearing, the administrative law judge shall inquire 
of each party whether he has any further evidence to offer, which 
inquiry and the response thereto shall be shown in the record. The 
administrative law judge may hear arguments of counsel and may limit the 
time of such arguments at his discretion, and may, in his discretion, 
allow briefs to be filed on behalf of either party but shall closely 
limit the time within which the briefs for both parties shall be filed, 
so as to avoid unreasonable delay. The administrative law judge shall 
also ascertain whether the parties desire to submit proposed findings 
and conclusions, together with supporting reasons, and if so a period of 
not more than 15 days (unless extended by the administrative law judge)-
-after the close of the hearing or receipt of a copy of the record, if 
one is requested--will be allowed for such purpose.



Sec. 71.85  Reopening of the hearing.

    The Director, the director of industry operations or the 
administrative law judge, as the case may be, may, as to all matters 
pending before him, in his discretion reopen the hearing (a) in case of 
default where applicant failed to request a hearing or to appear after 
one was set, upon petition setting forth reasonable grounds for such 
failure, and (b) in case any party desires leave to adduce additional 
evidence upon petition summarizing such evidence, establishing its 
materiality and stating reasonable grounds why such party with due 
diligence was unable to produce such evidence at the hearing.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 43 FR 13531, Mar. 31, 1978; 44 FR 55846, 
Sept. 28, 1979; T.D. ATF-374, 61 FR 29957, June 13, 1996]

                           Record of Testimony



Sec. 71.86  Stenographic record.

    A stenographic record shall be made of the testimony and 
proceedings, including stipulations and admissions of fact (but not 
arguments of counsel unless otherwise ordered by the administrative law 
judge) in all proceedings. A transcript of the evidence and proceedings 
at the hearing shall be made in all cases.



Sec. 71.87  Oath of reporter.

    The reporter making the stenographic record shall subscribe an oath 
before the administrative law judge, to be filed in the record of the 
case, that he will truly and correctly report the oral testimony and 
proceedings at such hearing and accurately transcribe the same to the 
best of his ability.



                  Subpart G--Administrative Law Judges



Sec. 71.95  Responsibilities of administrative law judges.

    Administrative law judges shall be under the administrative control 
of the Director. They shall be responsible for the conduct of hearings 
and shall render their decisions as soon as is reasonably possible after 
the hearing is closed. Administrative law judges shall

[[Page 1116]]

also be responsible for the preparation, certification and forwarding of 
reports of hearings, and the administrative work relating thereto, and, 
by arrangement with directors of industry operations and representatives 
of the Chief Counsel, shall have access to facilities and temporary use 
of personnel at such times and places as are needed in the prompt 
dispatch of official business.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 43 FR 13531, Mar. 31, 1978; 44 FR 55846, 
Sept. 28, 1979; T.D. ATF-374, 61 FR 29957, June 13, 1996]



Sec. 71.96  Disqualification.

    An administrative law judge shall, at any time, withdraw from any 
proceeding if he deems himself disqualified; and upon the filing in good 
faith by the applicant or respondent, or by the attorney for the 
Government, of a timely and sufficient affidavit of facts showing 
personal bias or otherwise warranting the disqualification of any 
administrative law judge, the Director shall upon appeal as provided in 
Sec. 71.115, if the administrative law judge fails to disqualify 
himself, determine the matter as a part of the record and decision in 
the proceeding. If he decides the administrative law judge should have 
declared himself disqualified, he will remand the record for hearing de 
novo before another administrative law judge. If the Director should 
decide against the disqualification of the administrative law judge, the 
proceeding will be reviewed on its merits.



Sec. 71.97  Powers.

    Administrative law judges shall have authority to (a) administer 
oaths and affirmations; (b) issue subpoenas authorized by law; (c) rule 
upon offers of proof and receive relevant evidence; (d) take or cause 
depositions to be taken whenever the ends of justice would be served 
thereby; (e) regulate the course of the hearing; (f) hold conferences 
for the settlement or simplification of the issues by consent of the 
parties; (g) dispose of procedural requests or similar matters; (h) 
render recommended decisions in proceedings on applications for permits, 
and in suspension, revocation, or annulment proceedings against permits; 
(i) call, examine and cross-examine witnesses, including hostile or 
adverse witnesses when he deems such action to be necessary to a just 
disposition of the cause, and introduce into the record documentary or 
other evidence; and (j) take any other action authorized by rule of the 
Bureau of Alcohol, Tobacco and Firearms consistent with the 
Administrative Procedure Act.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55846, Sept. 28, 1979; T.D. ATF-119, 
50 FR 9197, Mar. 6, 1985]



Sec. 71.98  Separation of functions.

    Administrative law judges shall perform no duties inconsistent with 
their duties and responsibilities as such. Administrative law judges may 
be assigned duties not inconsistent with the performance of their 
functions as administrative law judges. Save to the extent required for 
the disposition of ex parte matters as required by law, no 
administrative law judge shall consult any person or party as to any 
fact in issue unless upon notice and opportunity for all parties to 
participate. The functions of the administrative law judge shall be 
entirely separated from the general investigative functions of the 
agency. No officer, employee, or agent engaged in the performance of 
investigative or prosecuting functions in any proceeding shall, in that 
or a factually related proceeding, participate or advise in the 
administrative law judge's or Director's decision, or in the agency 
review on appeal, except as a witness or counsel in the proceedings. The 
administrative law judge may not informally obtain advice or opinions 
from the parties or their counsel, or from any officer or employee of 
the Bureau of Alcohol, Tobacco and Firearms, as to the facts or the 
weight or interpretation to be given to the evidence. He may, however, 
informally obtain advice on matters of law from officers or employees 
who were not engaged in the performance of investigative or prosecuting 
functions in that or a factually related proceeding. This limitation 
does not apply to the Director, and the administrative law judge may, at 
any time, consult with and obtain instructions

[[Page 1117]]

from him on questions of law and policy.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 43 FR 13531, Mar. 31, 1978; 44 FR 55846, 
Sept. 28, 1979]



Sec. 71.99  Conduct of hearing.

    The administrative law judge is charged with the duty of conducting 
a fair and impartial hearing and of maintaining order in form and manner 
consistent with dignity. In the event that counsel or any person or 
witness in any proceeding shall refuse to obey the orders of the 
administrative law judge, or be guilty of disorderly or contemptuous 
language or conduct in connection with any hearing, the administrative 
law judge may, for good cause stated in the record, suspend the hearing, 
and, in the case of an attorney, recommend that the Director report the 
matter to the Director of Practice for disciplinary action. The refusal 
of a witness to answer any question which has been ruled to be proper 
shall be considered by the administrative law judge in determining the 
weight to be given all the testimony of that witness.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 43 FR 13531, Mar. 31, 1978; 44 FR 55846, 
Sept. 28, 1979]



Sec. 71.100  Unavailability of administrative law judge.

    In the event that the administrative law judge designated to conduct 
a hearing becomes unavailable before the filing of his findings and 
decision or recommended decision, the Director may assign the case to 
another administrative law judge for the continuance of the proceeding, 
in accordance with the regulations in this part in the same manner as if 
he had been designated administrative law judge at the commencement of 
the proceeding.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 43 FR 13531, Mar. 31, 1978; 44 FR 55846, 
Sept. 28, 1979]



                          Subpart H--Decisions



Sec. 71.105  Administrative law judge's finding and decision or recommended decision.

    Within a reasonable time after the conclusion of the hearing, and as 
expeditiously as possible, the administrative law judge shall render his 
decision or recommended decision, as the case may be. All decisions 
shall become a part of the record and, if proposed findings and 
conclusions have been filed, shall show the administrative law judge's 
ruling upon each of such proposed findings and conclusions. Decisions 
shall consist of (a) a brief statement of the issues of fact involved in 
the proceeding; (b) the administrative law judge's findings and 
conclusions, as well as the reasons or basis therefor with record 
references, upon all the material issues of fact, law or discretion 
presented on the record (including, when appropriate, comment as to the 
credibility and demeanor of the witnesses); and (c) the administrative 
law judge's determination or recommended determination on the record. 
Where the administrative law judge determines that the imposition of a 
period of suspension of the permit is appropriate, his decision shall 
state the length of such period of suspension, to commence at such time 
as the director of industry operations shall specify.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975. 
as amended by T.D. ATF-374, 61 FR 29957, June 13, 1996]



Sec. 71.106  Certification and transmittal of record and decision.

    After reaching his decision, the administrative law judge shall 
certify to the complete record of the proceeding before him and (a) in 
proceedings on an application, shall immediately forward the complete 
certified record together with four copies of his recommended decision 
to the director of industry operations for initial decision, or (b) in 
revocation, suspension or annulment proceedings, shall immediately 
forward the complete certified record, together with two copies of his 
decision, to the regional director (compliance), serve

[[Page 1118]]

one copy of his decision on the respondent or his counsel and transmit a 
copy of his decision to the attorney for the Government.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-199, 50 FR 9197, Mar. 6, 1985; T.D. ATF-374, 61 
FR 29957, June 13, 1996]

                Action by Director of Industry Operations



Sec. 71.107  Application proceedings.

    If, upon receipt of the record and the recommended decision of the 
administrative law judge, the director of industry operations decides 
that the permit should be issued, he shall thereupon approve the 
application briefly stating, for the record, his reasons therefor, but 
if he contemplates the disapproval of the application he shall serve a 
copy of the administrative law judge's recommended decision on the 
applicant, informing the applicant of his contemplated action and 
affording the applicant not more than 10 days in which to submit 
proposed findings and conclusions or exceptions to the recommended 
decision with reasons in support thereof. If the director of industry 
operations, after consideration of the record of the hearing and of any 
proposed findings, conclusions or exceptions filed with him by the 
applicant, approves the findings, conclusions and recommended decision 
of the administrative law judge, he shall by order approve or disapprove 
of the application in accordance therewith. If, after such 
consideration, he disapproves of the findings, conclusions and 
recommended decision of the administrative law judge, in whole or in 
part, he shall by order make such findings and conclusions as in his 
opinion are warranted by the law and facts in the record. Any decision 
of the director of industry operations ordering the disapproval of an 
application for a permit shall state the findings and conclusions upon 
which it is based, including his ruling upon each proposed finding, 
conclusion and exception to the administrative law judge's recommended 
decision, together with a statement of his findings and conclusions, and 
reasons or basis therefor, upon all material issues of fact, law or 
discretion presented on the record. A signed duplicate original of the 
decision shall be served upon the applicant and the original copy 
containing certificate of service shall be placed in the official record 
of the proceeding.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-199, 50 FR 9197, Mar. 6, 1985; T.D. ATF-374, 61 
FR 29957, June 13, 1996]



Sec. 71.107a  Director of Industry Operations' decision.

    (a) When the director of industry operations issues an initial 
decision in accordance with Sec. 71.79, the decision shall become a part 
of the record. The decision shall consist of
    (1) A brief statement of the issues involved in the proceedings;
    (2) The director of industry operations' findings and conclusions, 
as well as the reasons therefor; and
    (3) The director of industry operations' determination on the 
record.

[T.D. ATF-244, 51 FR 45764, Dec. 22, 1986, as amended by T.D. ATF-374, 
61 FR 29957, June 13, 1996]



Sec. 71.108  Suspension, revocation, or annulment proceedings.

    (a) Upon receipt of the complete certified record of the hearing the 
director of industry operations shall enter an order suspending, 
revoking, or annulling the permit (Form 1430-B) or dismissing the 
proceedings in accordance with the administrative law judge's findings 
and decision, unless he disagrees with such findings and decision and 
files a petition with the Director, for review thereof, as provided in 
Sec. 71.115. If the director of industry operations files such petition, 
he shall withhold issuance of the order, pending the decision of the 
Director, upon receipt of which he shall issue the order in accordance 
therewith. A signed duplicate original of the order of the director of 
industry operations shall be served upon the respondent and the original 
copy containing certificate of service shall be placed in the official 
record of the proceeding. In all proceedings in which a suspension is 
imposed, the director of industry operations' order shall state the time 
when the suspension period set forth in the

[[Page 1119]]

administrative law judge's decision shall commence and terminate.
    (b) In a case where the initial decision is made by the director of 
industry operations in accordance with Sec. 71.79, the director of 
industry operations will also issue an order suspending, revoking or 
annulling the permit (on Form 5000.5), or dismissing the proceedings in 
accordance with his initial decision. A signed duplicated original of 
the decision and order of the director of industry operations shall be 
served upon the respondent and the original copy placed in the official 
record of the proceeding. In all proceedings in which a suspension is 
imposed, the director of industry operations' order shall state the time 
when the suspension period set forth in the initial decision shall 
commence and terminate.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-199, 50 FR 9196 and 9197, Mar. 6, 1985; T.D. 
ATF-244, 51 FR 45764, Dec. 22, 1986; T.D. ATF-374, 61 FR 29957, June 13, 
1996]



Sec. 71.109  Notice to Director.

    When the director of industry operations makes an order suspending, 
revoking or annulling a permit, he will furnish a copy of the order and 
of the decision on which it is based to the Director. Should such order 
be subsequently set aside on review by the courts, the director of 
industry operations will so advise the Director.

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-199, 50 FR 9197, Mar. 6, 1985; T.D. ATF-374, 61 
FR 29957, June 13, 1996]



Sec. 71.110  Proceedings involving violations not within region of issuance of permit.

    In the event violations occurred at a place not within the region of 
issuance of a permit, the director of industry operations of the region 
of issuance will take jurisdiction over any proceeding including issuing 
the citation, and taking appropriate action in accordance with 
Sec. 71.108.

[T.D. ATF-244, 51 FR 45764, Dec. 22, 1986, as amended by T.D. ATF-374, 
61 FR 29957, June 13, 1996]



                            Subpart I--Review



Sec. 71.115  Appeal on petition to the Director.

    An appeal to the Director is required prior to application to the 
Federal courts for review. An appeal may be taken by the applicant or 
respondent or by the director of industry operations. Such appeal shall 
be taken by filing a petition for review on appeal with the Director 
within 15 days of the service of the order disapproving an application 
for a permit or the initial decision suspending, revoking or annulling a 
permit. The petition must set forth facts tending to show action of an 
arbitrary nature, or action without reasonable warrant in fact, or 
action contrary to law and regulations. A copy of the petition shall be 
filed with the director of industry operations or served on the 
respondent or applicant as the case may be. In the event of such appeal, 
the director of industry operations shall immediately certify and 
forward the complete original record, by certified mail, to the 
Director, for his consideration and review.

[T.D. ATF-244, 51 FR 45764, Dec. 22, 1986, as amended by T.D. ATF-374, 
61 FR 29957, June 13, 1996]



Sec. 71.116  Review by Director.

    The Director, on appeal on petition for review, shall afford a 
reasonable opportunity for the submission of proposed findings, 
conclusions or exceptions with reasons in support thereof and an 
opportunity for oral argument. He may alter or modify any finding of the 
administrative law judge (or of the director of industry operations in 
application proceedings) and may affirm, reverse, or modify the decision 
of the administrative law judge (or of the director of industry 
operations in initial application proceedings), or he may remand the 
case for further hearing, but he shall not consider evidence which is 
not a part of the record. Appeals and petitions for review shall not be 
decided by the Director in any proceeding in which he has engaged in 
investigation or prosecution, and in such event he shall so state his 
disqualification in writing and refer the record to the

[[Page 1120]]

Under Secretary for appropriate action. The Under Secretary may 
designate an Assistant Secretary or one of his principal aides to 
consider any proceeding instead of the Director. The original copy of 
the decision on review shall be placed in the official record of the 
proceeding, a signed duplicate original shall be served upon the 
applicant or respondent and a copy shall be transmitted to the director 
of industry operations. When, on appeal, the Director affirms the 
decision of the director of industry operations or the administrative 
law judge, as the case may be, disapproving an application or 
suspending, revoking or annulling a permit, such action shall not 
supersede the decision of the director of industry operations or the 
administrative law judge and such decision shall be final.

(26 U.S.C. 7805 (68A Stat. 917), 27 U.S.C. 205 (49 Stat. 981 as 
amended), 18 U.S.C. 926 (82 Stat. 959), and Sec. 38, Arms Export Control 
Act (22 U.S.C. 2778, 90 Stat. 744))

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 43 FR 13531, Mar. 31, 1978; T.D. ATF-199, 50 
FR 9197, Mar. 6, 1985; T.D. ATF-374, 61 FR 29957, June 13, 1996]



Sec. 71.117  Permit privileges, exceptions.

    Pending final determination of any timely appeal in revocation, 
suspension, or annulment proceeding to the Director, the permit involved 
shall continue in force and effect except that, in the case of 
industrial use permits, any time after a citation has been issued 
withdrawals of tax-free spirits or specially denatured spirits by such 
permittee may, in the discretion of the director of industry operations 
or Director, be restricted to the quantity which, together with the 
quantity then on hand, is necessary to carry on legitimate operations 
under such permit. The director of industry operations may, in 
restricting the permittee to his legitimate needs, refuse to issue any 
withdrawal permit.

[T.D. 6389, 24 FR 4791, June 12, 1959. Redesignated at 40 FR 16835, Apr. 
15, 1975; T.D. ATF-199, 50 FR 9197, Mar. 6, 1985; T.D. ATF-374, 61 FR 
29957, June 13, 1996]



Sec. 71.118  Court review.

    If an applicant or respondent files an appeal in Federal court of 
the Director's decision, the Director, upon notification that an appeal 
has been taken, shall prepare the record for submission to the court in 
accordance with the applicable court rules.

[T.D. ATF-244, 51 FR 45764, Dec. 22, 1986]



Sec. 71.119  [Reserved]



                        Subpart J--Miscellaneous



Sec. 71.125  Depositions.

    The administrative law judge may take or order the taking of 
depositions by either party to the proceeding at such time and place as 
he may designate before a person having the power to administer oaths, 
upon application therefor and notice to the parties to the action. The 
testimony shall be reduced to writing by the person taking the 
deposition, or under his direction, and the deposition shall be 
subscribed by the deponent unless subscribing thereof is waived in 
writing by the parties. Any person may be subpoenaed to appear and 
depose and to produce documentary evidence in the same manner as 
witnesses at hearings.



Sec. 71.126  Subpoenas.

    On written application by a party to a proceeding, the attendance 
and testimony of any person, or the production of documentary evidence 
in proceedings instituted under this part may be required by personal 
subpoena (Form 5600.10) or by subpoena duces tecum (Form 5600.11). 
Application should be addressed to, and subpoenas should be issued by, 
the administrative law judge before whom the proceedings are pending, 
but may be issued by the director of industry operations or by the 
Director, if the administrative law judge is unavailable. Both the 
application and the subpoena shall set forth the title of the 
proceedings, the name and address of the person whose attendance is 
required, the date and place of his attendance and, if documents are to 
be produced, a description thereof; and the application must have 
reasonable scope and specify as exactly as possible the documents 
required, if any, and show their general relevance. Subpoenas shall be 
served in person. When issued on behalf of the United

[[Page 1121]]

States, service shall be made by an officer, employee, or agent of the 
Treasury Department; when issued on behalf of a permittee or applicant, 
service shall be made by any person who is not a party to the proceeding 
and is not less than 18 years of age.

(49 Stat. 977, 72 Stat. 1372; 27 U.S.C. 202, 26 U.S.C. 5274)

[21 FR 1441, Mar. 6, 1956, as amended by T.D. 6389, 24 FR 4791, June 12, 
1959. Redesignated at 40 FR 16835, Apr. 15, 1975, and amended by T.D. 
ATF-244, 51 FR 45764, Dec. 22, 1986; T.D. ATF-374, 61 FR 29957, June 13, 
1996]



Sec. 71.127  Witnesses and fees.

    Witnesses summoned before the administrative law judge may be paid 
the same fees and mileage that are paid witnesses in the courts of the 
United States, and witnesses whose depositions are taken and the persons 
taking the same shall severally be entitled to the same fees as are paid 
for like services in the courts of the United States. Witness fees and 
mileage shall be paid by the party at whose instance the witnesses 
appear and the person taking the deposition shall be paid by the party 
at whose instance the deposition is taken.

                                 Record



Sec. 71.128  What constitutes record.

    The transcript of testimony, pleadings and exhibits, all papers and 
requests filed in the proceeding, together with all findings, decisions 
and orders, shall constitute the exclusive record. Where the decision 
rests on official notice of material fact not appearing in the record, 
the administrative law judge shall so state in his findings and any 
party shall, on timely request, be afforded an opportunity to show facts 
to the contrary.



Sec. 71.129  Availability.

    A copy of the record shall be available for inspection by the 
parties to the proceedings during business hours at the office of the 
administrative law judge or the director of industry operations or, 
pending administrative review, at the office of the Director. Copies of 
the record desired by the respondent or applicant may be purchased from 
the contract reporter or may be obtained in accordance with part 71 of 
this chapter.

(5 U.S.C. 552(a) (80 Stat. 383, as amended))

[21 FR 1441, Mar. 6, 1956. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-92, 46 FR 46918, Sept. 23, 1981; T.D. ATF-374, 
61 FR 29957, June 13, 1996]



PART 72--DISPOSITION OF SEIZED PERSONAL PROPERTY--Table of Contents




                     Subpart A--Scope of Regulations

Sec.
72.1  Procedures relating to personal property and carriers.
72.2  Forms prescribed.

                         Subpart B--Definitions

72.11  Meaning of terms.

                   Subpart C--Seizures and Forfeitures

72.21  Personal property and carriers subject to seizure.
72.22  Forfeiture of seized personal property and carriers.
72.23  Type and conditions of cost bond.
72.24  Corporate surety bonds.
72.25  Deposit of collateral.
72.26  Bond for return of seized perishable goods.
72.27  Summary destruction of explosives subject to forfeiture.

            Subpart D--Remission or Mitigation of Forfeitures

72.31  Laws applicable.
72.32  Interest claimed.
72.33  Form of the petition.
72.34  Contents of the petition.
72.35  Time of filing petition.
72.36  Place of filing.
72.37  Discontinuance of administrative proceedings.
72.38  Return of defective petition.
72.39  Final action.
72.40  Acquisition for official use and sale for account of petitioner 
          in allowed petitions.
72.41  Re-appraisal of property involved in an allowed petition.

                       Subpart E--Appraiser's Fees

72.51  Rate of compensation.

   Subpart F--Administrative Sale or Disposition of Personal Property

72.61  Alternative methods of sale.
72.62  All bids on unit basis.
72.63  Conditions of sale.
72.64  Terms of sale.

[[Page 1122]]

72.65  Sale of forfeited tobacco products and cigarette papers and 
          tubes.
72.66  Purchaser entitled to bill of sale.
72.67  Sale on open, competitive bids.
72.68  Sale on sealed, competitive bids.
72.69  Alternate disposition of seized carriers.

    Subpart G--Disposal of Forfeited Firearms, Ammunition, Explosive 
                   Materials, or Contraband Cigarettes

72.81  Authority for disposal.

    Authority: 18 U.S.C. 921, 1261; 19 U.S.C. 1607, 1610, 1612, 1613, 
1618; 26 U.S.C. 7101, 7322-7325, 7326, 7805; 31 U.S.C. 9301, 9303, 9304, 
9306; 40 U.S.C. 304(k); 49 U.S.C. 784, 788.

    Source: T.D. ATF-9, 39 FR 9954, Mar. 15, 1974, unless otherwise 
noted.



                     Subpart A--Scope of Regulations



Sec. 72.1  Procedures relating to personal property and carriers.

    Regulations in this part shall relate to personal property and 
carriers seized by alcohol, tobacco and firearms officers as subject to 
forfeiture as being involved, used, or intended to be used, as the case 
may be, in any violation of Federal laws.



Sec. 72.2  Forms prescribed.

    (a) The Director is authorized to prescribe all forms required by 
this part, or necessary for its administration. All of the information 
called for in each form shall be furnished as indicated by the headings 
on the form and the instructions on or pertaining to the form. In 
addition, information called for in each form shall be furnished as 
required by this part.
    (b) ``Public Use Forms'' (ATF Publication 1322.1) is a numerical 
listing of forms issued or used by the Bureau of Alcohol, Tobacco and 
Firearms. This publication is available from the Superintendent of 
Documents, U.S. Government Printing Office, Washington, DC 20402.
    (c) Requests for forms should be mailed to the ATF Distribution 
Center, 7943 Angus Court, Springfield, Virginia 22153.

[T.D. ATF-92, 46 FR 46914, Sept. 23, 1981, as amended by T.D. ATF-249, 
52 FR 5962, Feb. 27, 1987]



                         Subpart B--Definitions



Sec. 72.11  Meaning of terms.

    As used in this part, unless the context otherwise requires, terms 
shall have the meanings ascribed in this section. Words in the plural 
form shall include the singular, and vice versa, and words importing the 
masculine gender shall include the feminine. The terms ``includes'' and 
``including'' do not exclude things not enumerated which are in the same 
general class.
    ATF Officer. An officer or employee of the Bureau of Alcohol, 
Tobacco, and Firearms (ATF) duly authorized to perform any function 
relating to the administration or enforcement of this part.
    Appraised value. The value placed upon seized property or carriers 
by the appraiser or appraisers designated for the purpose of determining 
whether the property or carriers may be forfeited administratively.
    Carrier. A vessel, vehicle, or aircraft seized under 49 U.S.C. 
Chapter 11 for having been used to transport, carry, or conceal a 
contraband firearm or contraband cigarettes. Vessels, vehicles, or 
aircraft seized under other provisions of applicable laws shall be 
considered personal property.
    Commercial crimes. Any of the following types of crimes (Federal or 
State): Offenses against the revenue laws; burglary; counterfeiting; 
forgery; kidnapping; larceny; robbery; illegal sale or possession of 
deadly weapons; prostitution (including soliciting, procuring, 
pandering, white slaving, keeping house of ill fame, and like offenses); 
extortion; swindling and confidence games; and attempting to commit, 
conspiring to commit, or compounding any of the foregoing crimes. 
Addiction to narcotic drugs and use of marihuana will be treated as if 
such were commercial crime.
    Contraband cigarettes. Any quantity of cigarettes in excess of 
60,000, if:
    (a) The cigarettes bear no evidence of the payment of applicable 
State cigarette taxes in the State where the cigarettes are found;
    (b) The State in which the cigarettes are found requires a stamp, 
impression, or other indication to be placed on

[[Page 1123]]

packages or other containers of cigarettes to evidence payment of 
cigarette taxes; and
    (c) The cigarettes are in the possession of any person other than 
any person who is:
    (1) Holding a permit issued under 26 U.S.C. Chapter 52 as a 
manufacturer of tobacco products or as an export warehouse proprietor;
    (2) Operating a customs bonded warehouse under 19 U.S.C. 1311 or 
1555;
    (3) An agent of a tobacco products manufacturer, an export warehouse 
proprietor, or an operator of a customs bonded warehouse;
    (4) A common or contract carrier transporting the cigarettes 
involved under a proper bill of lading or freight bill which states the 
quantity, source, and destination of the cigarettes;
    (5) Licensed or otherwise authorized by the State where the 
cigarettes are found to account for and pay cigarette taxes imposed by 
that State; and who has complied with the accounting and payment 
requirements relating to the license or authorization with respect to 
the cigarettes involved; or
    (6) An agent of the United States, of an individual State, or of a 
political subdivision of a State and having possession of cigarettes in 
connection with the performance of official duties.
    (7) Operating within a foreign-trade zone, established under 19 
U.S.C. 81b, when the cigarettes involved have been entered into the 
foreign-trade zone under zone-restricted status or when foreign 
cigarettes have been admitted into the foreign-trade zone but have not 
been entered into the United States.
    Contraband firearm. A firearm with respect to which there has been 
committed a violation of the National Firearms Act (26 U.S.C., Chapter 
53) or any regulation issued thereunder.
    Director. The Director, Bureau of Alcohol, Tobacco, and Firearms, 
the Department of the Treasury, Washington, DC.
    Equity. As used in administrative action on petitions for remission 
or mitigation of forfeitures, shall mean that interest which a 
petitioner has in the personal property or carrier petitioned for at the 
time of final administrative action on the petition, but such interest 
shall not be considered to include any unearned finance charges from the 
date of seizure or the date of default, if later; any amount rebatable 
on account of paid insurance premiums; attorney's fees for collection; 
any amount identified as dealer's reserve; or any amount in the nature 
of liquidated damages that may have been agreed upon by the buyer and 
the petitioner.
    Person. An individual, trust, estate, partnership, association, 
company or a corporation.
    Re-appraisal. An up-to-date statutory appraisal to determine the 
present value of the property or carrier involved in a petition for 
remission or mitigation of forfeiture made in the same manner as the 
original appraisal, and performed at the written request of the 
petitioner whose petition in regard to the property or carrier has been 
allowed and who, for reasonable cause, is not satisfied that the 
original appraisal represents the present value of the property or 
carrier.
    Region. A Bureau of Alcohol, Tobacco, and Firearms Region.
    U.S.C. The United States Code.

[T.D. ATF-48, 43 FR 13535, Mar. 31, 1978; 44 FR 55841, Sept. 28, 1979, 
as amended by T.D. ATF-65, 45 FR 8593, Feb. 8, 1980; T.D. ATF-183, 49 FR 
37061, Sept. 21, 1984]



                   Subpart C--Seizures and Forfeitures



Sec. 72.21  Personal property and carriers subject to seizure.

    (a) Personal property may be seized by duly authorized ATF officers 
for forfeiture to the United States when involved, used, or intended to 
be used, in violation of the laws of the United States which ATF 
officers are empowered to enforce, including Title 18 U.S.C. Chapters 40 
(explosives), 44 (firearms), 59 (liquor traffic), 114 (contraband 
cigarettes), 229 (liquor); Title 26 U.S.C. Chapters 51 (distilled 
spirits), 52 (tobacco), 53 (firearms); and Title 27 U.S.C. 206 (liquor). 
Carriers, as defined in Sec. 72.11, similarly may be seized when used in 
violation of Title 49 U.S.C. App., Chapter 11 (transportation, et 
cetera) of contraband firearms or contraband cigarettes.

[[Page 1124]]

    (b) Any action or proceeding for the forfeiture of firearms or 
ammunition seized under 18 U.S.C. Chapter 44 shall be commenced within 
120 days of such seizure.
    (c) Upon acquittal of the owner or possessor, or the dismissal of 
the criminal charges against such person other than upon motion of the 
Government prior to trial, or lapse of or court termination of the 
restraining order to which such person is subject, firearms or 
ammunition seized or relinquished under 18 U.S.C. Chapter 44 shall be 
returned forthwith to the owner or possessor or to a person delegated by 
the owner or possessor unless the return of the firearms or ammunition 
would place the owner or possessor or his delegate in violation of law.

[T.D. ATF-270, 53 FR 10489, Mar. 31, 1988, as amended by T.D. ATF-363, 
60 FR 17449, Apr. 6, 1995]



Sec. 72.22  Forfeiture of seized personal property and carriers.

    (a) Administrative forfeiture. (1) Personal property seized as 
subject to forfeiture under Title 26 U.S.C. which has an appraised value 
of $100,000.00 or less, and any carrier appraised by the seizing officer 
at $100,000.00 or less under the customs laws, shall be forfeited to the 
United States in administrative or summary forfeiture proceedings.
    (2) In respect of personal property seized as subject to forfeiture 
under title 26 U.S.C. which, in the opinion of the seizing officer, has 
an appraised value of $100,000.00 or less, such officer shall cause a 
list containing a particular description of the seized property to be 
prepared and an appraisement thereof to be made by three sworn 
appraisers, selected by the seizing officer, who shall be respectable 
and disinterested citizens of the United States residing within the 
internal revenue district wherein the seizure was made. Such list and 
appraisement shall be properly attested to by the seizing officer and 
such appraisers.
    (3) In respect of personal property seized as subject to forfeiture 
under title 26 U.S.C. and found by the appraisers to have a value of 
$100,000.00 or less, the Director or his delegate shall publish a notice 
once a week for three consecutive weeks, in some newspaper of the 
judicial district where the seizure was made, describing the articles 
and stating the time, place, and cause of their seizure, and requiring 
any person claiming them to make such claim within 30 days from the date 
of the first publication of such notice.
    (4) In respect of carriers seized as subject to forfeiture under the 
customs laws which, in the opinion of the seizing officer, have an 
appraised value of $100,000.00 or less, such officer shall cause a list 
containing a particular description of the seized carriers to be 
prepared and the seizing officer shall make the appraisement thereof. 
Such list and appraisement shall be properly attested to by the seizing 
officer.
    (5) In respect of carriers seized as subject to forfeiture under the 
customs laws and appraised by the seizing officer as having a value of 
$100,000.00 or less, the Director or his delegate shall publish a notice 
of seizure in the same manner as required by paragraph (a)(3) of this 
section; provided that the time for making claim shall be within 20 days 
from the date of first publication. (19 U.S.C. 1608).
    (6) Any person claiming the personal property or carrier so seized, 
within the time specified in the notice, may file with the Director a 
claim stating the interest in the articles or carrier seized, and may 
execute a bond to the United States, conditioned that, in case of 
condemnation of the articles or carrier so seized, the obligators shall 
pay all the costs and expenses of the proceedings to obtain such 
condemnation. The amount of the cost bond is $2,500.00, unless the 
seized property is a vehicle, vessel, or aircraft seized for a violation 
of 49 U.S.C. App., Chapter 11, in which case the cost bond shall be in 
the amount of $2,500 or ten percent of the value of the claimed 
property, whichever is lower, but not less than $250.00. Both the claim 
and the cost bond shall be executed in quadruplicate.
    (b) Judicial condemnation. The Chief Counsel of the Bureau of 
Alcohol, Tobacco and Firearms, shall authorize institution of forfeiture 
proceedings in those instances where the appraised value of the seized 
personal property or

[[Page 1125]]

carrier exceeds $100,000.00 or where a claim and cost bond are filed.

(Sec. 111, Pub. L. 95-410, 92 Stat. 897, as amended (19 U.S.C. 1607, 
1610, 1612))

[T.D. ATF-9, 39 FR 9954, Mar. 15, 1974, as amended by T.D. ATF-65, 45 FR 
8593, Feb. 8, 1980; T.D. ATF-183, 49 FR 37061, Sept. 21, 1984; T.D. ATF-
241, 51 FR 39613, Oct. 29, 1986; T.D. ATF-270, 53 FR 10489, Mar. 31, 
1988]



Sec. 72.23  Type and conditions of cost bond.

    The cost bond delivered by a claimant to effect removal of the 
forfeiture status of the property or carrier claimed to the jurisdiction 
of the Federal court for adjudication shall be a corporate surety bond: 
Provided, however, That upon a showing to the satisfaction of the 
Director or his delegate that the claimant is unable to furnish a 
corporate surety bond such claimant may deliver a cost bond with 
individual sureties acceptable to the Director or his delegate: Provided 
further, That in lieu of a cost bond with corporate or individual 
sureties the claimant may deposit collateral as provided in Sec. 72.25. 
The cost bond shall be conditioned that in the case of the condemnation 
of the property the obligators shall pay all costs and expenses of the 
proceedings to obtain such condemnation.

[T.D. ATF-9, 39 FR 9954, Mar. 15, 1974, as amended by T.D. ATF-183, 49 
FR 37061, Sept. 21, 1984]



Sec. 72.24  Corporate surety bonds.

    (a) Corporate surety bonds may be given only with surety companies 
holding certificates of authority from the Secretary of the Treasury as 
acceptable sureties on Federal bonds, subject to the limitations 
prescribed by Treasury Department Circular No. 570 (Companies Holding 
Certificates of Authority as Acceptable Sureties on Federal Bonds and as 
Acceptable Reinsuring Companies), and subject to such amendments as may 
be issued from time to time.
    (b) Treasury Department Circular No. 570 is published in the Federal 
Register yearly as of the first workday of July. As they occur, interim 
revisions of the circular are published in the Federal Register. Copies 
may be obtained from the Audit Staff, Bureau of Government Financial 
Operations, Department of the Treasury, Washington, DC 20226.

(July 30, 1947, Ch. 390, 61 Stat. 648, as amended (6 U.S.C. 6, 7); Aug. 
16, 1954, Ch. 736, 68A Stat. 847, as amended (26 U.S.C. 7101))

[T.D. ATF-92, 46 FR 46914, Sept. 23, 1981]



Sec. 72.25  Deposit of collateral.

    (a) Bonds or notes of the United States, or other obligations which 
are unconditionally guaranteed as to both interest and principal by the 
United States, may be pledged and deposited by claimants as collateral 
security in lieu of corporate sureties in accordance with the provisions 
of Treasury Department Circular No. 154 (31 CFR Part 225--Acceptance of 
Bonds, Notes or Other Obligations Issued or Guaranteed by the United 
States as Security in Lieu of Surety or Sureties on Penal Bonds). 
Alternatively, cash, postal money orders, and certified or cashiers' or 
treasurers' checks may be furnished by claimants as collateral security 
in lieu of corporate sureties.
    (b) Treasury Department Circular No. 154 is periodically revised and 
contains the provisions of 31 CFR Part 225 and the forms prescribed in 
31 CFR Part 225. Copies of the circular may be obtained from the Audit 
Staff, Bureau of Government Financial Operations, Department of the 
Treasury, Washington, DC 20226.

(July 30, 1947, Ch. 390, 61 Stat. 650 (6 U.S.C. 15); Aug. 16, 1954, Ch. 
736, 68A Stat. 847, as amended (26 U.S.C. 7101))

[T.D. ATF-92, 46 FR 46914, Sept. 23, 1981]



Sec. 72.26  Bond for return of seized perishable goods.

    The proceedings to enforce forfeiture of perishable goods shall be 
in the nature of a proceeding in rem in the district court of the United 
States for the district wherein such seizure is made. Whenever such 
property is liable to perish or become greatly reduced in price or value 
by keeping, or when it cannot be kept without great expense, the 
Director or his delegate shall advise the owner, when known, of the 
seizure thereof. The owner may apply to the Director or his delegate to 
have the property examined any time prior to referral of the property to 
the U.S. Marshal for disposition, and if in the

[[Page 1126]]

opinion of the Director or his delegate it shall be necessary to sell 
such property to prevent waste or expense, the Director or his delegate 
shall cause the property to be appraised. Thereupon the owner shall have 
the property returned to him upon giving a corporate surety bond (see 
Sec. 72.24) in an amount equal to the appraised value of the property, 
which bond shall be conditioned to abide the final order, decree, or 
judgment of the court having cognizance of the case, and to pay the 
amount of the appraised value to the Director or his delegate, the U.S. 
Marshal, or otherwise, as may be ordered and directed by the court, 
which bond shall be filed by the Director or his delegate officer with 
the U.S. Attorney for the district in which the proceedings may be 
commenced. If the owner of such property neglects or refuses to give 
such bond within a reasonable time considering the condition of the 
property the Director or his delegate shall request the U.S. Marshal to 
proceed to sell the property at public sale as soon as practicable and 
to pay the proceeds of sale, less reasonable costs of the seizure and 
sale, to the court to abide its final order, decree, or judgment.

(68A Stat. 869, 870, as amended; 26 U.S.C. 7322, 7323, 7324)

[T.D. ATF-9, 39 FR 9954, Mar. 15, 1974, as amended by T.D. ATF-183, 49 
FR 37061, Sept. 21, 1984]



Sec. 72.27  Summary destruction of explosives subject to forfeiture.

    (a) Notwithstanding the provisions of Sec. 55.166 of this Title, in 
the case of the seizure of any explosive materials for any offense for 
which the materials would be subject to forfeiture in which it would be 
impracticable or unsafe to remove the materials to a place of storage or 
would be unsafe to store them, the seizing officer may destroy the 
explosive materials forthwith. Any destruction under this paragraph 
shall be in the presence of at least 1 credible witness.
    (b) Within 60 days after any destruction made pursuant to paragraph 
(a) of this section, the owner of the property and any other persons 
having an interest in the property so destroyed may make application to 
the Director for reimbursement of the value of the property in 
accordance with the instructions contained in ATF Publication 1850.1 (9-
93), Information to Claimants. ATF P 1850.1 is available at no cost upon 
request from the ATF Distribution Center, P.O. Box 5950, Springfield, 
Virginia 22150-5950. The Director shall make an allowance to the 
claimant not exceeding the value of the property destroyed, if the 
claimant establishes to the satisfaction of the Director that--
    (1) The property has not been used or involved in a violation of 
law; or
    (2) Any unlawful involvement or use of the property was without the 
claimant's knowledge, consent, or willful blindness.

[T.D. ATF-363, 60 FR 17449, Apr. 6, 1995]



            Subpart D--Remission or Mitigation of Forfeitures



Sec. 72.31  Laws applicable.

    Remission or mitigation of forfeitures shall be governed by the 
applicable customs laws.

(Sec. 613, 618, 46 Stat. 756, as amended, 757, as amended, sec. 4, 53 
Stat. 1292, sec. 7327, 68A Stat. 871; 19 U.S.C. 1613, 1618, 49 U.S.C. 
784, 26 U.S.C. 7327)



Sec. 72.32  Interest claimed.

    Any person claiming an interest in property, including carriers, 
seized by alcohol, tobacco and firearms officers as subject to 
administrative forfeiture may file a petition addressed to the Director, 
for remission or mitigation of the forfeiture of such property.



Sec. 72.33  Form of the petition.

    There is no set or standardized form provided or required by the 
Department for use in filing a petition for remission or mitigation of 
forfeiture. However, it is preferable that the petition be typewritten 
on legal size paper; and it is necessary that the petition be executed 
under oath, prepared in triplicate and addressed to the Director, and 
that all copies of original documents submitted as exhibits in support 
of allegations of the petition be certified as true and accurate copies 
of originals. Each copy of the petition

[[Page 1127]]

must contain a complete set of exhibits.



Sec. 72.34  Contents of the petition.

    (a) Description of the property. The petition should contain such a 
description of the property or carrier and such facts of the seizure as 
will enable the alcohol, tobacco and firearms officers concerned to 
identify the property or carrier.
    (b) Statement regarding knowledge of seizure. In the event the 
petition is filed for the restoration of the proceeds derived from sale 
of the property or carrier pursuant to summary forfeiture, it should 
also contain, or be supported by, satisfactory proof that the petitioner 
did not know of the seizure prior to the declaration or condemnation of 
forfeiture, and that he was in such circumstances as prevented him from 
knowing of the same. (See also Sec. 72.35.)
    (c) Interest of petitioner. The petitioner should state in clear and 
concise terms the nature and amount of the present interest of the 
petitioner in the property or carrier, and the facts relied upon to show 
that the forfeiture was incurred without willful negligence or without 
any intention upon the part of the petitioner to defraud the revenue or 
to violate the law, or such other mitigating circumstances as, in the 
opinion of the petitioner, would justify the remission or mitigation of 
the forfeiture.
    (d) Petitioner innocent party. If the petitioner is not the one who 
in person committed the act which caused the seizure the petition should 
state how the property or carrier came into the possession of such other 
person, and that the petitioner had no knowledge or reason to believe, 
if such be the fact, that the property or carrier would be used in 
violation of law. If known to the petitioner, at the time the petition 
is filed, that such other person had either a record or a reputation, or 
both, as a violator in the field of commercial crime, the petition 
should state whether the petitioner had actual knowledge of such record 
or reputation, or both, before the petitioner acquired his interest in 
the property or carrier, before such other person acquired his right in 
the property or carrier, whichever occurred later. When personal 
property is seized for violation of the liquor laws, the determining 
factor will be whether the person dealt with by the petitioner had 
either a record or a reputation, or both, as a violator of the liquor 
laws.
    (e) Documents supporting claim. The petition should also be 
accompanied by copies, certified by the petitioner under oath as 
correct, of contracts, bills of sale, chattel mortgages, reports of 
investigators or credit reporting agencies, affidavits, and any other 
papers or documents that would tend to support the claims made in the 
petition.
    (f) Costs. The petition should also contain an undertaking to pay 
the costs, if costs are assessed as a condition of allowance of the 
petition. Costs shall include all the expenses incurred in seizing and 
storing the property or carrier; the costs borne or to be borne by the 
United States; the taxes, if any, payable by the petitioner or imposed 
in respect of the property or carrier to which the petition relates; the 
penalty, if any, asserted by the Director; and, if the property or 
carrier has been sold, or is in the course of being sold, the expenses 
so incurred.



Sec. 72.35  Time of filing petition.

    A petition may be filed at any time prior to the sale or other 
disposition of the property or carrier involved pursuant to 
administrative forfeiture, but a petition in regard to property or a 
carrier which has already been sold or otherwise disposed of pursuant to 
administrative forfeiture must be filed within three months from the 
date of sale, and must contain the proof defined in Sec. 72.34(b). 
Acquisition for official use is equivalent to sale so far as remission 
or mitigation of any forfeiture is concerned.

(Sec. 306, 49 Stat. 880; 40 U.S.C. 304k)



Sec. 72.36  Place of filing.

    The petition should be filed in triplicate with the Director or his 
delegate for the region in which the seizure was made.

[T.D. ATF-9, 39 FR 9954, Mar. 15, 1974, as amended by T.D. ATF-183, 49 
FR 37061, Sept. 21, 1984]

[[Page 1128]]



Sec. 72.37  Discontinuance of administrative proceedings.

    If the petition is filed prior to administrative sale or retention 
for official use, proceedings to effect such sale or retention will be 
discontinued.



Sec. 72.38  Return of defective petition.

    If the petition is defective in some correctable respect, the 
original of the petition will be returned by letter to the petitioner 
for his submission of a corrected petition, in triplicate, within a 
reasonable time.



Sec. 72.39  Final action.

    (a) Petitions for remission or mitigation of forfeiture. (1) The 
Director shall take final action on any petition filed pursuant to these 
regulations. Such final action shall consist either of the allowance or 
denial of the petition. In the case of allowance, the Director shall 
state the conditions of the allowance.
    (2) In the case of an allowed petition, the Director may order the 
property or carrier returned to the petitioner, sold for the account of 
the petitioner, or, pursuant to agreement, acquired for official use.
    (3) The Director or his delegate shall notify the petitioner of the 
allowance or denial of the petition and, in the case of allowance, the 
terms and conditions under which the Director allowed the petition.
    (b) Offers in compromise of liability to forfeiture. The Director or 
his delegate shall take final action on any offer in compromise of the 
liability to forfeiture of personal property, including carriers, seized 
as provided in Sec. 72.21. Such action shall consist either of the 
acceptance or rejection of the offer.

[T.D. ATF-9, 39 FR 9954, Mar. 15, 1974, as amended by T.D. ATF-183, 49 
FR 37061, Sept. 21, 1984]



Sec. 72.40  Acquisition for official use and sale for account of petitioner in allowed petitions.

    (a) Acquisition for official use. The property or carrier may be 
purchased by the United States pursuant to agreement and retained for 
official use. Where the petitioner is the owner, the purchase price is 
the appraised value of the property or carrier less all costs. Where the 
petitioner is a creditor, the purchase price is whichever one of these 
amounts is the smaller: (1) The petitioner's equity, or (2) the 
appraised value of the property or carrier less the amount of all costs 
incident to the seizure and forfeiture.
    (b) Sale for account of petitioner. The petitioner may elect not to 
comply with the condition on which the property or carrier may be 
returned. In this event, the Director or his delegate is authorized to 
sell it. Where the petitioner is the owner of the property or carrier, 
there is deducted from the proceeds of the sale all costs incident to 
the seizure, forfeiture, and sale, and the Director or his delegate pays 
to the petitioner, out of the proper appropriation, an amount equal to 
the balance, if any. Where the petitioner is a creditor, there is 
deducted from the proceeds of the sale all costs incident to the 
seizure, forfeiture, and sale, and the Director or his delegate pays to 
the petitioner, out of the proper appropriation, an amount equal to the 
balance, if any, of the selling price after deduction of all costs 
incident to the seizure, forfeiture, or sale: Provided, That if the 
amount of such balance exceeds the amount of the equity of the 
petitioner, only the latter amount is paid to the petitioner.

[T.D. ATF-9, 39 FR 9954, Mar. 15, 1974, as amended by T.D. ATF-183, 49 
FR 37061, Sept. 21, 1984]



Sec. 72.41  Re-appraisal of property involved in an allowed petition.

    In determining the nature and extent of the relief to be afforded a 
petitioner pursuant to allowance of his petition, the value of the 
property or carrier involved in the allowed petition shall be considered 
to mean the value placed on said property or carrier pursuant to 
official appraisal thereof immediately following seizure: Provided, 
however, That if the petitioner desires an up-to-date re-appraisal made 
of the property or carrier, after notification as to the terms of 
allowance of the petition, and makes written request therefor, 
undertaking in said request to pay, or to be liable for, the total costs 
of such re-appraisal, the property or carrier shall be re-appraised 
officially in the same manner in which the original appraisal

[[Page 1129]]

was made, and the terms and conditions of allowance shall stand modified 
to the extent required by such re-appraisal.



                       Subpart E--Appraiser's Fees



Sec. 72.51  Rate of compensation.

    Each appraiser selected under Sec. 72.22(a)(2) shall receive 
compensation at a reasonable fee not to exceed $15.00 per hour or 
portion thereof for the performance of his or her duties in appraising 
property seized as subject to forfeiture under Title 26 U.S.C.

(Act of Aug. 16, 1954, Ch. 736, 68A Stat. 870, as amended; 26 U.S.C. 
7325)

[T.D. ATF-8, 46 FR 18536, Mar. 25, 1981]



   Subpart F--Administrative Sale or Disposition of Personal Property



Sec. 72.61  Alternative methods of sale.

    (a) Sale by auction or competitive bid. When personal property or a 
carrier. When personal property or a carrier forfeited administratively 
may be sold, the Director or his delegate shall cause a notice of sale 
to be placed in a newspaper of general circulation published in the 
judicial district wherein the seizure was made. The sale shall not occur 
in less than 10 days from the date of the publication of the notice. At 
the discretion of the Director or his delegate based upon which method 
in his sound judgment is most advantageous to the best interests of the 
United States, the forfeited personal property or carrier may be 
advertised for sale, and sold, at public auction to the highest bidder 
on open, competitive bids, or to the highest bidder on sealed, 
competitive bids.
    (b) Sale by General Services Administration. When a vessel, vehicle, 
or aircraft seized under 49 U.S.C. App., Chapter 11 is forfeited 
administratively, the Director may authorize the General Services 
Administration to conduct the sale pursuant to such conditions as the 
Director deems proper.

(68A Stat. 870, as amended; 26 U.S.C. 7325)

[T.D. ATF-9, 39 FR 9954, Mar. 15, 1974, as amended by T.D. ATF-183, 49 
FR 37061, Sept. 21, 1984; T.D. ATF-241, 51 FR 39613, Oct. 29, 1986; T.D. 
ATF-270, 53 FR 10489, Mar. 31, 1988]



Sec. 72.62  All bids on unit basis.

    All competitive bids, whether sealed or otherwise, shall be on a 
unit basis, i.e. if a number of forfeited automobiles are advertised for 
sale at the same date, hour and place, whether or not in the same notice 
of sale, there shall be a separate, individual bid required as to each 
automobile, and it shall not be permissible to accept one blanket bid to 
cover the entire group of cars offered for sale.



Sec. 72.63  Conditions of sale.

    (a) No recourse. All personal property and carriers to be sold shall 
be offered for sale ``as is'' and without recourse against the United 
States.
    (b) No guarantee. No guarantee or warranty, expressed or implied, 
shall be given or understood in respect of any forfeited property or 
carrier offered for sale.
    (c) No sale. (1) The United States reserves the right to reject any 
and all bids received at public auction and in sealed, competitive bid 
sales.
    (2) When ``no sale'' is declared for property other than cigars, 
cigarettes, and cigarette papers and tubes, the Director or his delegate 
shall re-advertise the property for sale.
    (3) When ``no sale'' is declared for cigars, cigarettes, or 
cigarette papers or tubes, such property shall be destroyed or, if fit 
for human consumption, be given to a Federal or State hospital or 
institution.
    (d) One bid. When only one bid is received for a single unit of 
property or a carrier offered at public auction or in a sealed, 
competitive bid sale, such bid shall be considered to be and treated as 
the highest bid received for that property or carrier.

[T.D. ATF-9, 39 FR 9954, Mar. 15, 1974, as amended by T.D. ATF-183, 49 
FR 37061, Sept. 21, 1984]



Sec. 72.64  Terms of sale.

    The terms of sale shall be cash, cashier's check, certified check, 
or postal money order, in the amount of the accepted bid.

[[Page 1130]]



Sec. 72.65  Sale of forfeited tobacco products and cigarette papers and tubes.

    All tobacco products and cigarette papers and tubes forfeited under 
the internal revenue laws shall be sold at a price which will include 
the tax due and payable on those forfeited articles. Written, timely 
notice shall be given by the Director or his delegate to the 
manufacturer of any such forfeited articles offered for sale.

[T.D. ATF-9, 39 FR 9954, Mar. 15, 1974, as amended by T.D. ATF-65, 45 FR 
8593, Feb. 8, 1980; T.D. ATF-183, 49 FR 37061, Sept. 21, 1984]



Sec. 72.66  Purchaser entitled to bill of sale.

    Each purchaser of administratively forfeited property, including 
carriers, shall be entitled to receive a suitable and authentic bill of 
sale on a form to be provided for the purpose.



Sec. 72.67  Sale on open, competitive bids.

    If the personal property or carrier is to be sold at public auction 
to the highest bidder on open, competitive bids, the notice of sale 
shall so specify, and state the date, hour, and place of sale.



Sec. 72.68  Sale on sealed, competitive bids.

    If the property or carrier is to be sold to the highest bidder on 
sealed, competitive bids, the notice of sale shall so specify, and shall 
state the date, hour, and place of sale, and the date, hour, and place 
before the sale when and where the property, including carriers, may be 
viewed by prospective sealed bidders, and necessary information 
obtained. All sealed bids must be filed with the Director or his 
delegate before the sale. No bids will be accepted after the sale 
starts. At the appointed date, hour, and place of sale, all sealed bids 
timely filed shall be opened in the presence of all bidders attending 
the sale, who shall have the privilege of inspecting the bids if they so 
desire.

[T.D. ATF-9, 39 FR 9954, Mar. 15, 1974, as amended by T.D. ATF-183, 49 
FR 37061, Sept. 21, 1984]



Sec. 72.69  Alternative disposition of seized carriers.

    (a) State or local proceedings. The Director may discontinue 
forfeiture proceedings instituted under the Customs laws for seizures of 
carriers under 49 U.S.C. App., Chapter 11 in favor of the institution of 
forfeiture proceedings by State or local authorities under an 
appropriate State or local statute. If such forfeiture proceedings are 
discontinued or dismissed, the Director may transfer the seized property 
to the appropriate State or local official, and notice of discontinuance 
or dismissal shall be provided to all known interested parties.
    (b) Transfer to State or local law enforcement agency. Any carrier 
forfeited under the Customs laws for seizures under 49 U.S.C. App., 
Chapter 11 may be transferred by the Director to any State or local law 
enforcement agency which participated directly in the seizure or 
forfeiture of the property.

(19 U.S.C. 1616)

[T.D. ATF-270, 53 FR 10489, Mar. 31, 1988]



    Subpart G--Disposal of Forfeited Firearms, Ammunition, Explosive 
                   Materials, or Contraband Cigarettes



Sec. 72.81  Authority for disposal.

    Forfeited firearms, aummunition, explosive materials, or contraband 
cigarettes, not the subject of an allowed petition, may only be disposed 
of in accordance with the provisions of 26 U.S.C. 5872(b).

[T.D. ATF-65, 45 FR 8593, Feb. 8, 1980]



                       SUBCHAPTERS G-L [RESERVED]



[[Page 1131]]



          SUBCHAPTER M--ALCOHOL, TOBACCO AND OTHER EXCISE TAXES





PART 178--COMMERCE IN FIREARMS AND AMMUNITION--Table of Contents




                         Subpart A--Introduction

Sec.
178.1  Scope of regulations.
178.2  Relation to other provisions of law.

                         Subpart B--Definitions

178.11  Meaning of terms.

         Subpart C--Administrative and Miscellaneous Provisions

178.21  Forms prescribed.
178.22  Alternate methods or procedures; emergency variations from 
          requirements.
178.23  Right of entry and examination.
178.24  Compilation of State laws and published ordinances.
178.25  Disclosure of information.
178.25a  Responses to requests for information.
178.26  Curio and relic determination.
178.27  Destructive device determination.
178.28  Transportation of destructive devices and certain firearms.
178.29  Out-of-State acquisition of firearms by nonlicenses.
178.29a  Acquisition of firearms by nonresidents.
178.30  Out-of-State disposition of firearms by nonlicensees.
178.31  Delivery by common or contract carrier.
178.32  Prohibited shipment, transportation, possession, or receipt of 
          firearms and ammunition by certain persons.
178.33  Stolen firearms and ammunition.
178.33a  Theft of firearms.
178.34  Removed, obliterated, or altered serial number.
178.35  Skeet, trap, target, and similar shooting activities.
178.36  Transfer or possession of machine guns.
178.37  Manufacture, importation and sale of armor piercing ammunition.
178.38  Transportation of firearms.
178.39  Assembly of semiautomatic rifles or shotguns.
178.39a  Reporting theft or loss of firearms.
178.40  Manufacture, transfer, and possession of semiautomatic assault 
          weapons.
178.40a  Transfer and possession of large capacity ammunition feeding 
          devices.

                           Subpart D--Licenses

178.41  General.
178.42  License fees.
178.43  License fee not refundable.
178.44  Original license.
178.45  Renewal of license.
178.46  Insufficient fee.
178.47  Issuance of license.
178.48  Correction of error on license.
178.49  Duration of license.
178.50  Locations covered by license.
178.51  License not transferable.
178.52  Change of address.
178.53  Change in trade name.
178.54  Change of control.
178.55  Continuing partnerships.
178.56  Right of succession by certain persons.
178.57  Discontinuance of business.
178.58  State or other law.
178.59  Abandoned application.
178.60  Certain continuances of business.

                     Subpart E--License Proceedings

178.71  Denial of an application for license.
178.72  Hearing after application denial.
178.73  Notice of revocation, suspension, or imposition of civil fine.
178.74  Request for hearing after notice of suspension, revocation, or 
          imposition of civil fine.
178.75  Service on applicant or licensee.
178.76  Representation at a hearing.
178.77  Designated place of hearing.
178.78  Operations by licensee after notice.

                     Subpart F--Conduct of Business

178.91  Posting of license.
178.92  How must licensed manufacturers and licensed importers identify 
          firearms, armor piercing ammunition, and large capacity 
          ammunition feeding devices?
178.93  Authorized operations by a licensed collector.
178.94  Sales or deliveries between licensees.
178.95  Certified copy of license.
178.96  Out-of-State and mail order sales.
178.97  Loan or rental of firearms.
178.98  Sales or deliveries of destructive devices and certain firearms.
178.99  Certain prohibited sales or deliveries.
178.100  Conduct of business away from licensed premises.
178.101  Record of transactions.
178.102  Sales or deliveries of firearms on and after November 30, 1998.
178.103  Posting of signs and written notification to purchasers of 
          handguns.

[[Page 1132]]

                         Subpart G--Importation

178.111  General.
178.112  Importation by a licensed importer.
178.113  Importation by other licensees.
178.113a  Importation of firearm barrels by nonlicensees.
178.114  Importation by members of the U.S. Armed Forces.
178.115  Exempt importation.
178.116  Conditional importation.
178.117  Function outside a customs territory.
178.118  Importation of certain firearms classified as curios and 
          relics.
178.119  Importation of ammunition feeding devices.
178.120  Firearms or ammunition imported by or for a nonimmigrant alien.

                           Subpart H--Records

178.121  General.
178.122  Records maintained by importers.
178.123  Records maintained by manufacturers.
178.124  Firearms transaction record.
178.124a  Firearms transaction record in lieu of record of receipt and 
          disposition.
178.125  Record of receipt and disposition.
178.125a  Personal firearms collection.
178.126  Furnishing transaction information.
178.126a  Reporting multiple sales or other disposition of pistols and 
          revolvers.
178.127  Discontinuance of business.
178.128  False statement or representation.
178.129  Record retention.
178.131  Firearms transactions not subject to a NICS check.
178.132  Dispositions of semiautomatic assault weapons and large 
          capacity ammunition feeding devices to law enforcement 
          officers for official use and to employees or contractors of 
          nuclear facilities.
178.133  Records of transactions in semiautomatic assault weapons.
178.134  Sale of firearms to law enforcement officers.

            Subpart I--Exemptions, Seizures, and Forfeitures

178.141  General.
178.142  Effect of pardons and expunctions of convictions.
178.143  Relief from disabilities incurred by indictment.
178.144  Relief from disabilities under the Act.
178.145  Research organizations.
178.146  Deliveries by mail to certain persons.
178.147  Return of firearm.
178.148  Armor piercing ammunition intended for sporting or industrial 
          purposes.
178.149  Armor piercing ammunition manufactured or imported for the 
          purpose of testing or experimentation.
178.150  Alternative to NICS in certain geographical locations.
178.151  Semiautomatic rifles or shotguns for testing or 
          experimentation.
178.152  Seizure and forfeiture.
178.153  Semiautomatic assault weapons and large capacity ammunition 
          feeding devices manufactured or imported for the purposes of 
          testing or experimentation.

Subpart J [Reserved]

                         Subpart K--Exportation

178.171  Exportation.

    Authority: 5 U.S.C. 552(a); 18 U.S.C. 847, 921-930; 44 U.S.C. 
3504(h).

    Source: 33 FR 18555, Dec. 14, 1968, unless otherwise noted. 
Redesignated at 40 FR 16835, Apr. 15, 1975.

    Editorial Note: Nomenclature changes to part 178 appear by T.D. ATF-
411, 64 FR 17291, Apr. 9, 1999.



                         Subpart A--Introduction



Sec. 178.1  Scope of regulations.

    (a) General. The regulations contained in this part relate to 
commerce in firearms and ammunition and are promulgated to implement 
Title I, State Firearms Control Assistance (18 U.S.C. Chapter 44), of 
the Gun Control Act of 1968 (82 Stat. 1213) as amended by Pub. L. 99-308 
(100 Stat. 449), Pub. L. 99-360 (100 Stat. 766), Pub. L. 99-408 (100 
Stat. 920), Pub. L. 103-159 (107 Stat. 1536), Pub. L. 103-322 (108 Stat. 
1796), Pub. L. 104-208 (110 Stat. 3009), and Pub. L. 105-277 (112 Stat. 
2681).
    (b) Procedural and substantive requirements. This part contains the 
procedural and substantive requirements relative to:
    (1) The interstate or foreign commerce in firearms and ammunition;
    (2) The licensing of manufacturers and importers of firearms and 
ammunition, collectors of firearms, and dealers in firearms;
    (3) The conduct of business or activity by licensees;
    (4) The importation of firearms and ammunition;
    (5) The records and reports required of licensees;
    (6) Relief from disabilities under this part;

[[Page 1133]]

    (7) Exempt interstate and foreign commerce in firearms and 
ammunition; and
    (8) Restrictions on armor piercing ammunition.

[T.D. ATF-270, 53 FR 10490, Mar. 31, 1988, as amended by T.D. ATF-354, 
59 FR 7112, Feb. 14, 1994; T.D. ATF-363, 60 FR 17450, Apr. 6, 1995; T.D. 
ATF-401, 63 FR 35522, June 30, 1998; T.D. ATF-471, 67 FR 5425, Feb. 5, 
2002]



Sec. 178.2  Relation to other provisions of law.

    The provisions in this part are in addition to, and are not in lieu 
of, any other provision of law, or regulations, respecting commerce in 
firearms or ammunition. For regulations applicable to traffic in machine 
guns, destructive devices, and certain other firearms, see Part 179 of 
this chapter. For statutes applicable to the registration and licensing 
of persons engaged in the business of manufacturing, importing or 
exporting arms, ammunition, or implements of war, see section 38 of the 
Arms Export Control Act (22 U.S.C. 2778) and regulations thereunder and 
Part 47 of this chapter. For statutes applicable to nonmailable 
firearms, see 18 U.S.C. 1715 and regulations thereunder.

[T.D. ATF-270, 53 FR 10490, Mar. 31, 1988]



                         Subpart B--Definitions



Sec. 178.11  Meaning of terms.

    When used in this part and in forms prescribed under this part, 
where not otherwise distinctly expressed or manifestly incompatible with 
the intent thereof, terms shall have the meanings ascribed in this 
section. Words in the plural form shall include the singular, and vice 
versa, and words importing the masculine gender shall include the 
feminine. The terms ``includes'' and ``including'' do not exclude other 
things not enumerated which are in the same general class or are 
otherwise within the scope thereof.
    Act. 18 U.S.C. Chapter 44.
    Adjudicated as a mental defective. (a) A determination by a court, 
board, commission, or other lawful authority that a person, as a result 
of marked subnormal intelligence, or mental illness, incompetency, 
condition, or disease:
    (1) Is a danger to himself or to others; or
    (2) Lacks the mental capacity to contract or manage his own affairs.
    (b) The term shall include--
    (1) A finding of insanity by a court in a criminal case; and
    (2) Those persons found incompetent to stand trial or found not 
guilty by reason of lack of mental responsibility pursuant to articles 
50a and 72b of the Uniform Code of Military Justice, 10 U.S.C. 850a, 
876b.
    Admitted to the United States for lawful hunting or sporting 
purposes. (a) Is entering the United States to participate in a 
competitive target shooting event sponsored by a national, State, or 
local organization, devoted to the competitive use or other sporting use 
of firearms; or
    (b) Is entering the United States to display firearms at a sports or 
hunting trade show sponsored by a national, State, or local firearms 
trade organization, devoted to the competitive use or other sporting use 
of firearms.
    Alien. Any person not a citizen or national of the United States.
    Alien illegally or unlawfully in the United States. Aliens who are 
unlawfully in the United States are not in valid immigrant, nonimmigrant 
or parole status. The term includes any alien--
    (a) Who unlawfully entered the United States without inspection and 
authorization by an immigration officer and who has not been paroled 
into the United States under section 212(d)(5) of the Immigration and 
Nationality Act (INA);
    (b) Who is a nonimmigrant and whose authorized period of stay has 
expired or who has violated the terms of the nonimmigrant category in 
which he or she was admitted;
    (c) Paroled under INA section 212(d)(5) whose authorized period of 
parole has expired or whose parole status has been terminated; or
    (d) Under an order of deportation, exclusion, or removal, or under 
an order to depart the United States voluntarily, whether or not he or 
she has left the United States.
    Ammunition. Ammunition or cartridge cases, primers, bullets, or 
propellent powder designed for use in any

[[Page 1134]]

firearm other than an antique firearm. The term shall not include (a) 
any shotgun shot or pellet not designed for use as the single, complete 
projectile load for one shotgun hull or casing, nor (b) any unloaded, 
non-metallic shotgun hull or casing not having a primer.
    Antique firearm. (a) Any firearm (including any firearm with a 
matchlock, flintlock, percussion cap, or similar type of ignition 
system) manufactured in or before 1898; and (b) any replica of any 
firearm described in paragraph (a) of this definition if such replica 
(1) is not designed or redesigned for using rimfire or conventional 
centerfire fixed ammunition, or (2) uses rimfire or conventional 
centerfire fixed ammunition which is no longer manufactured in the 
United States and which is not readily available in the ordinary 
channels of commercial trade.
    Armor piercing ammunition. Projectiles or projectile cores which may 
be used in a handgun and which are constructed entirely (excluding the 
presence of traces of other substances) from one or a combination of 
tungsten alloys, steel, iron, brass, bronze, beryllium copper, or 
depleted uranium; or full jacketed projectiles larger than .22 caliber 
designed and intended for use in a handgun and whose jacket has a weight 
of more than 25 percent of the total weight of the projectile. The term 
does not include shotgun shot required by Federal or State environmental 
or game regulations for hunting purposes, frangible projectiles designed 
for target shooting, projectiles which the Director finds are primarily 
intended to be used for sporting purposes, or any other projectiles or 
projectile cores which the Director finds are intended to be used for 
industrial purposes, including charges used in oil and gas well 
perforating devices.
    ATF officer. An officer or employee of the Bureau of Alcohol, 
Tobacco and Firearms (ATF) authorized to perform any function relating 
to the administration or enforcement of this part.
    Business premises. The property on which the manufacturing or 
importing of firearms or ammunition or the dealing in firearms is or 
will be conducted. A private dwelling, no part of which is open to the 
public, shall not be recognized as coming within the meaning of the 
term.
    Chief, National Licensing Center. The ATF official responsible for 
the issuance and renewal of licenses under this part.
    Collector. Any person who acquires, holds, or disposes of firearms 
as curios or relics.
    Collection premises. The premises described on the license of a 
collector as the location at which he maintains his collection of curios 
and relics.
    Commerce. Travel, trade, traffic, commerce, transportation, or 
communication among the several States, or between the District of 
Columbia and any State, or between any foreign country or any territory 
or possession and any State or the District of Columbia, or between 
points in the same State but through any other State or the District of 
Columbia or a foreign country.
    Committed to a mental institution. A formal commitment of a person 
to a mental institution by a court, board, commission, or other lawful 
authority. The term includes a commitment to a mental institution 
involuntarily. The term includes commitment for mental defectiveness or 
mental illness. It also includes commitments for other reasons, such as 
for drug use. The term does not include a person in a mental institution 
for observation or a voluntary admission to a mental institution.
    Controlled substance. A drug or other substance, or immediate 
precursor, as defined in section 102 of the Controlled Substances Act, 
21 U.S.C. 802. The term includes, but is not limited to, marijuana, 
depressants, stimulants, and narcotic drugs. The term does not include 
distilled spirits, wine, malt beverages, or tobacco, as those terms are 
defined or used in Subtitle E of the Internal Revenue Code of 1986, as 
amended.
    Crime punishable by imprisonment for a term exceeding 1 year. Any 
Federal, State or foreign offense for which the maximum penalty, whether 
or not imposed, is capital punishment or imprisonment in excess of 1 
year. The term shall not include (a) any Federal or State offenses 
pertaining to antitrust

[[Page 1135]]

violations, unfair trade practices, restraints of trade, or other 
similar offenses relating to the regulation of business practices or (b) 
any State offense classified by the laws of the State as a misdemeanor 
and punishable by a term of imprisonment of 2 years or less. What 
constitutes a conviction of such a crime shall be determined in 
accordance with the law of the jurisdiction in which the proceedings 
were held. Any conviction which has been expunged or set aside or for 
which a person has been pardoned or has had civil rights restored shall 
not be considered a conviction for the purposes of the Act or this part, 
unless such pardon, expunction, or restoration of civil rights expressly 
provides that the person may not ship, transport, possess, or receive 
firearms, or unless the person is prohibited by the law of the 
jurisdiction in which the proceedings were held from receiving or 
possessing any firearms.
    Curios or relics. Firearms which are of special interest to 
collectors by reason of some quality other than is associated with 
firearms intended for sporting use or as offensive or defensive weapons. 
To be recognized as curios or relics, firearms must fall within one of 
the following categories:
    (a) Firearms which were manufactured at least 50 years prior to the 
current date, but not including replicas thereof;
    (b) Firearms which are certified by the curator of a municipal, 
State, or Federal museum which exhibits firearms to be curios or relics 
of museum interest; and
    (c) Any other firearms which derive a substantial part of their 
monetary value from the fact that they are novel, rare, bizarre, or 
because of their association with some historical figure, period, or 
event. Proof of qualification of a particular firearm under this 
category may be established by evidence of present value and evidence 
that like firearms are not available except as collector's items, or 
that the value of like firearms available in ordinary commercial 
channels is substantially less.
    Customs officer. Any officer of the Customs Service or any 
commissioned, warrant, or petty officer of the Coast Guard, or any agent 
or other person authorized by law or designated by the Secretary of the 
Treasury to perform any duties of an officer of the Customs Service.
    Dealer. Any person engaged in the business of selling firearms at 
wholesale or retail; any person engaged in the business of repairing 
firearms or of making or fitting special barrels, stocks, or trigger 
mechanisms to firearms; or any person who is a pawnbroker. The term 
shall include any person who engages in such business or occupation on a 
part-time basis.
    Destructive device. (a) Any explosive, incendiary, or poison gas (1) 
bomb, (2) grenade, (3) rocket having a propellant charge of more than 4 
ounces, (4) missile having an explosive or incendiary charge of more 
than one-quarter ounce, (5) mine, or (6) device similar to any of the 
devices described in the preceding paragraphs of this definition; (b) 
any type of weapon (other than a shotgun or a shotgun shell which the 
Director finds is generally recognized as particularly suitable for 
sporting purposes) by whatever name known which will, or which may be 
readily converted to, expel a projectile by the action of an explosive 
or other propellant, and which has any barrel with a bore of more than 
one-half inch in diameter; and (c) any combination of parts either 
designed or intended for use in converting any device into any 
destructive device described in paragraph (a) or (b) of this section and 
from which a destructive device may be readily assembled. The term shall 
not include any device which is neither designed nor redesigned for use 
as a weapon; any device, although originally designed for use as a 
weapon, which is redesigned for use as a signalling, pyrotechnic, line 
throwing, safety, or similar device; surplus ordnance sold, loaned, or 
given by the Secretary of the Army pursuant to the provisions of section 
4684(2), 4685, or 4686 of title 10, United States Code; or any other 
device which the Director finds is not likely to be used as a weapon, is 
an antique, or is a rifle which the owner intends to use solely for 
sporting, recreational, or cultural purposes.

[[Page 1136]]

    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC.
    Director of Industry Operations. The principal ATF official in a 
Field Operations division responsible for administering regulations in 
this part.
    Discharged under dishonorable conditions. Separation from the U.S. 
Armed Forces resulting from a dishonorable discharge or dismissal 
adjudged by a general court-martial. The term does not include any 
separation from the Armed Forces resulting from any other discharge, 
e.g., a bad conduct discharge.
    Division. A Bureau of Alcohol, Tobacco and Firearms Division.
    Engaged in the business--(a) Manufacturer of firearms. A person who 
devotes time, attention, and labor to manufacturing firearms as a 
regular course of trade or business with the principal objective of 
livelihood and profit through the sale or distribution of the firearms 
manufactured;
    (b) Manufacturer of ammunition. A person who devotes time, 
attention, and labor to manufacturing ammunition as a regular course of 
trade or business with the principal objective of livelihood and profit 
through the sale or distribution of the ammunition manufactured;
    (c) Dealer in firearms other than a gunsmith or a pawnbroker. A 
person who devotes time, attention, and labor to dealing in firearms as 
a regular course of trade or business with the principal objective of 
livelihood and profit through the repetitive purchase and resale of 
firearms, but such a term shall not include a person who makes 
occasional sales, exchanges, or purchases of firearms for the 
enhancement of a personal collection or for a hobby, or who sells all or 
part of his personal collection of firearms;
    (d) Gunsmith. A person who devotes time, attention, and labor to 
engaging in such activity as a regular course of trade or business with 
the principal objective of livelihood and profit, but such a term shall 
not include a person who makes occasional repairs of firearms or who 
occasionally fits special barrels, stocks, or trigger mechanisms to 
firearms;
    (e) Importer of firearms. A person who devotes time, attention, and 
labor to importing firearms as a regular course of trade or business 
with the principal objective of livelihood and profit through the sale 
or distribution of the firearms imported; and,
    (f) Importer of ammunition. A person who devotes time, attention, 
and labor to importing ammunition as a regular course of trade or 
business with the principal objective of livelihood and profit through 
the sale or distribution of the ammunition imported.
    Executed under penalties of perjury. Signed with the prescribed 
declaration under the penalties of perjury as provided on or with 
respect to the return form, or other document or, where no form of 
declaration is prescribed, with the declaration:

    ``I declare under the penalties of perjury that this--(insert type 
of document, such as, statement, application, request, certificate), 
including the documents submitted in support thereof, has been examined 
by me and, to the best of my knowledge and belief, is true, correct, and 
complete.''

    Federal Firearms Act. 15 U.S.C. Chapter 18.
    Firearm. Any weapon, including a starter gun, which will or is 
designed to or may readily be converted to expel a projectile by the 
action of an explosive; the frame or receiver of any such weapon; any 
firearm muffler or firearm silencer; or any destructive device; but the 
term shall not include an antique firearm. In the case of a licensed 
collector, the term shall mean only curios and relics.
    Firearm frame or receiver. That part of a firearm which provides 
housing for the hammer, bolt or breechblock, and firing mechanism, and 
which is usually threaded at its forward portion to receive the barrel.
    Firearm muffler or firearm silencer. Any device for silencing, 
muffling, or diminishing the report of a portable firearm, including any 
combination of parts, designed or redesigned, and intended for use in 
assembling or fabricating a firearm silencer or firearm muffler, and any 
part intended only for use in such assembly or fabrication.
    Friendly foreign government. Any government with whom the United 
States has diplomatic relations and whom the

[[Page 1137]]

United States has not identified as a State sponsor of terrorism.
    Fugitive from justice. Any person who has fled from any State to 
avoid prosecution for a felony or a misdemeanor; or any person who 
leaves the State to avoid giving testimony in any criminal proceeding. 
The term also includes any person who knows that misdemeanor or felony 
charges are pending against such person and who leaves the State of 
prosecution.
    Handgun. (a) Any firearm which has a short stock and is designed to 
be held and fired by the use of a single hand; and
    (b) Any combination of parts from which a firearm described in 
paragraph (a) can be assembled.
    Hunting license or permit lawfully issued in the United States. A 
license or permit issued by a State for hunting which is valid and 
unexpired.
    Identification document. A document containing the name, residence 
address, date of birth, and photograph of the holder and which was made 
or issued by or under the authority of the United States Government, a 
State, political subdivision of a State, a foreign government, political 
subdivision of a foreign government, an international governmental or an 
international quasi- governmental organization which, when completed 
with information concerning a particular individual, is of a type 
intended or commonly accepted for the purpose of identification of 
individuals.
    Importation. The bringing of a firearm or ammunition into the United 
States; except that the bringing of a firearm or ammunition from outside 
the United States into a foreign-trade zone for storage pending shipment 
to a foreign country or subsequent importation into this country, 
pursuant to this part, shall not be deemed importation.
    Importer. Any person engaged in the business of importing or 
bringing firearms or ammunition into the United States. The term shall 
include any person who engages in such business on a part-time basis.
    Indictment. Includes an indictment or information in any court, 
under which a crime punishable by imprisonment for a term exceeding 1 
year (as defined in this section) may be prosecuted, or in military 
cases to any offense punishable by imprisonment for a term exceeding 1 
year which has been referred to a general court-martial. An information 
is a formal accusation of a crime, differing from an indictment in that 
it is made by a prosecuting attorney and not a grand jury.
    Interstate or foreign commerce. Includes commerce between any place 
in a State and any place outside of that State, or within any possession 
of the United States (not including the Canal Zone) or the District of 
Columbia. The term shall not include commerce between places within the 
same State but through any place outside of that State.
    Intimate partner. With respect to a person, the spouse of the 
person, a former spouse of the person, an individual who is a parent of 
a child of the person, and an individual who cohabitates or has 
cohabitated with the person.
    Large capacity ammunition feeding device. A magazine, belt, drum, 
feed strip, or similar device for a firearm manufactured after September 
13, 1994, that has a capacity of, or that can be readily restored or 
converted to accept, more than 10 rounds of ammunition. The term does 
not include an attached tubular device designed to accept, and capable 
of operating only with, .22 caliber rimfire ammunition, or a fixed 
device for a manually operated firearm, or a fixed device for a firearm 
listed in 18 U.S.C. 922, Appendix A.
    Licensed collector. A collector of curios and relics only and 
licensed under the provisions of this part.
    Licensed dealer. A dealer licensed under the provisions of this 
part.
    Licensed importer. An importer licensed under the provisions of this 
part.
    Licensed manufacturer. A manufacturer licensed under the provisions 
of this part.
    Machine gun. Any weapon which shoots, is designed to shoot, or can 
be readily restored to shoot, automatically more than one shot, without 
manual reloading, by a single function of the trigger. The term shall 
also include the frame or receiver of any such

[[Page 1138]]

weapon, any part designed and intended solely and exclusively, or 
combination of parts designed and intended, for use in converting a 
weapon into a machine gun, and any combination of parts from which a 
machine gun can be assembled if such parts are in the possession or 
under the control of a person.
    Manufacturer. Any person engaged in the business of manufacturing 
firearms or ammunition. The term shall include any person who engages in 
such business on a part-time basis.
    Mental institution. Includes mental health facilities, mental 
hospitals, sanitariums, psychiatric facilities, and other facilities 
that provide diagnoses by licensed professionals of mental retardation 
or mental illness, including a psychiatric ward in a general hospital.
    Misdemeanor crime of domestic violence. (a) Is a Federal, State or 
local offense that:
    (1) Is a misdemeanor under Federal or State law or, in States which 
do not classify offenses as misdemeanors, is an offense punishable by 
imprisonment for a term of one year or less, and includes offenses that 
are punishable only by a fine. (This is true whether or not the State 
statute specifically defines the offense as a ``misdemeanor'' or as a 
``misdemeanor crime of domestic violence.'' The term includes all such 
misdemeanor convictions in Indian Courts established pursuant to 25 CFR 
part 11.);
    (2) Has, as an element, the use or attempted use of physical force 
(e.g., assault and battery), or the threatened use of a deadly weapon; 
and
    (3) Was committed by a current or former spouse, parent, or guardian 
of the victim, by a person with whom the victim shares a child in 
common, by a person who is cohabiting with or has cohabited with the 
victim as a spouse, parent, or guardian, (e.g., the equivalent of a 
``common law'' marriage even if such relationship is not recognized 
under the law), or a person similarly situated to a spouse, parent, or 
guardian of the victim (e.g., two persons who are residing at the same 
location in an intimate relationship with the intent to make that place 
their home would be similarly situated to a spouse).
    (b) A person shall not be considered to have been convicted of such 
an offense for purposes of this part unless:
    (1) The person is considered to have been convicted by the 
jurisdiction in which the proceedings were held.
    (2) The person was represented by counsel in the case, or knowingly 
and intelligently waived the right to counsel in the case; and
    (3) In the case of a prosecution for which a person was entitled to 
a jury trial in the jurisdiction in which the case was tried, either
    (i) The case was tried by a jury, or
    (ii) The person knowingly and intelligently waived the right to have 
the case tried by a jury, by guilty plea or otherwise.
    (c) A person shall not be considered to have been convicted of such 
an offense for purposes of this part if the conviction has been expunged 
or set aside, or is an offense for which the person has been pardoned or 
has had civil rights restored (if the law of the jurisdiction in which 
the proceedings were held provides for the loss of civil rights upon 
conviction for such an offense) unless the pardon, expunction, or 
restoration of civil rights expressly provides that the person may not 
ship, transport, possess, or receive firearms, and the person is not 
otherwise prohibited by the law of the jurisdiction in which the 
proceedings were held from receiving or possessing any firearms.
    National Firearms Act. 26 U.S.C. Chapter 53.
    NICS. The National Instant Criminal Background Check System 
established by the Attorney General pursuant to 18 U.S.C. 922(t).
    Nonimmigrant alien. An alien in the United States in a nonimmigrant 
classification as defined by section 101(a)(15) of the Immigration and 
Nationality Act (8 U.S.C. 1101(a)(15)).
    Pawnbroker. Any person whose business or occupation includes the 
taking or receiving, by way of pledge or pawn, of any firearm as 
security for the payment or repayment of money. The term shall include 
any person who engages in such business on a part-time basis.
    Permanently inoperable. A firearm which is incapable of discharging 
a shot by means of an explosive and incapable of being readily restored 
to a

[[Page 1139]]

firing condition. An acceptable method of rendering most firearms 
permanently inoperable is to fusion weld the chamber closed and fusion 
weld the barrel solidly to the frame. Certain unusual firearms require 
other methods to render the firearm permanently inoperable. Contact ATF 
for instructions.
    Person. Any individual, corporation, company, association, firm, 
partnership, society, or joint stock company.
    Pistol. A weapon originally designed, made, and intended to fire a 
projectile (bullet) from one or more barrels when held in one hand, and 
having (a) a chamber(s) as an integral part(s) of, or permanently 
aligned with, the bore(s); and (b) a short stock designed to be gripped 
by one hand and at an angle to and extending below the line of the 
bore(s).
    Principal objective of livelihood and profit. The intent underlying 
the sale or disposition of firearms is predominantly one of obtaining 
livelihood and pecuniary gain, as opposed to other intents such as 
improving or liquidating a personal firearms collection: Provided, That 
proof of profit shall not be required as to a person who engages in the 
regular and repetitive purchase and disposition of firearms for criminal 
purposes or terrorism. For purposes of this part, the term ``terrorism'' 
means activity, directed against United States persons, which--
    (a) Is committed by an individual who is not a national or permanent 
resident alien of the United States;
    (b) Involves violent acts or acts dangerous to human life which 
would be a criminal violation if committed within the jurisdiction of 
the United States; and
    (c) Is intended--
    (1) To intimidate or coerce a civilian population;
    (2) To influence the policy of a government by intimidation or 
coercion; or
    (3) To affect the conduct of a government by assassination or 
kidnapping.
    Published ordinance. A published law of any political subdivision of 
a State which the Director determines to be relevant to the enforcement 
of this part and which is contained on a list compiled by the Director, 
which list is incorporated by reference in the Federal Register, revised 
annually, and furnished to licensees under this part.
    Renounced U.S. citizenship. (a) A person has renounced his U.S. 
citizenship if the person, having been a citizen of the United States, 
has renounced citizenship either--
    (1) Before a diplomatic or consular officer of the United States in 
a foreign state pursuant to 8 U.S.C. 1481(a)(5); or
    (2) Before an officer designated by the Attorney General when the 
United States is in a state of war pursuant to 8 U.S.C. 1481(a)(6).
    (b) The term shall not include any renunciation of citizenship that 
has been reversed as a result of administrative or judicial appeal.
    Revolver. A projectile weapon, of the pistol type, having a 
breechloading chambered cylinder so arranged that the cocking of the 
hammer or movement of the trigger rotates it and brings the next 
cartridge in line with the barrel for firing.
    Rifle. A weapon designed or redesigned, made or remade, and intended 
to be fired from the shoulder, and designed or redesigned and made or 
remade to use the energy of the explosive in a fixed metallic cartridge 
to fire only a single projectile through a rifled bore for each single 
pull of the trigger.
    Semiautomatic assault weapon. (a) Any of the firearms, or copies or 
duplicates of the firearms in any caliber, known as:
    (1) Norinco, Mitchell, and Poly Technologies Avtomat Kalashnikovs 
(all models),
    (2) Action Arms Israeli Military Industries UZI and Galil,
    (3) Beretta Ar70 (SC-70),
    (4) Colt AR-15,
    (5) Fabrique National FN/FAL, FN/LAR, and FNC,
    (6) SWD M-10, M-11, M-11/9, and M-12,
    (7) Steyr AUG,
    (8) INTRATEC TEC-9, TEC-DC9 and TEC-22, and
    (9) Revolving cylinder shotguns, such as (or similar to) the Street 
Sweeper and Striker 12;
    (b) A semiautomatic rifle that has an ability to accept a detachable 
magazine and has at least 2 of--
    (1) A folding or telescoping stock,

[[Page 1140]]

    (2) A pistol grip that protrudes conspicuously beneath the action of 
the weapon,
    (3) A bayonet mount,
    (4) A flash suppressor or threaded barrel designed to accommodate a 
flash suppressor, and
    (5) A grenade launcher;
    (c) A semiautomatic pistol that has an ability to accept a 
detachable magazine and has at least 2 of--
    (1) An ammunition magazine that attaches to the pistol outside of 
the pistol grip,
    (2) A threaded barrel capable of accepting a barrel extender, flash 
suppressor, forward handgrip, or silencer,
    (3) A shroud that is attached to, or partially or completely 
encircles, the barrel and that permits the shooter to hold the firearm 
with the nontrigger hand without being burned,
    (4) A manufactured weight of 50 ounces or more when the pistol is 
unloaded, and
    (5) A semiautomatic version of an automatic firearm; and
    (d) A semiautomatic shotgun that has at least 2 of--
    (1) A folding or telescoping stock,
    (2) A pistol grip that protrudes conspicuously beneath the action of 
the weapon,
    (3) A fixed magazine capacity in excess of 5 rounds, and
    (4) An ability to accept a detachable magazine.
    Semiautomatic pistol. Any repeating pistol which utilizes a portion 
of the energy of a firing cartridge to extract the fired cartridge case 
and chamber the next round, and which requires a separate pull of the 
trigger to fire each cartridge.
    Semiautomatic rifle. Any repeating rifle which utilizes a portion of 
the energy of a firing cartridge to extract the fired cartridge case and 
chamber the next round, and which requires a separate pull of the 
trigger to fire each cartridge.
    Semiautomatic shotgun. Any repeating shotgun which utilizes a 
portion of the energy of a firing cartridge to extract the fired 
cartridge case and chamber the next round, and which requires a separate 
pull of the trigger to fire each cartridge.
    Short-barreled rifle. A rifle having one or more barrels less than 
16 inches in length, and any weapon made from a rifle, whether by 
alteration, modification, or otherwise, if such weapon, as modified, has 
an overall length of less than 26 inches.
    Short-barreled shotgun. A shotgun having one or more barrels less 
than 18 inches in length, and any weapon made from a shotgun, whether by 
alteration, modification, or otherwise, if such weapon as modified has 
an overall length of less than 26 inches.
    Shotgun. A weapon designed or redesigned, made or remade, and 
intended to be fired from the shoulder, and designed or redesigned and 
made or remade to use the energy of the explosive in a fixed shotgun 
shell to fire through a smooth bore either a number of ball shot or a 
single projectile for each single pull of the trigger.
    State. A State of the United States. The term shall include the 
District of Columbia, the Commonwealth of Puerto Rico, and the 
possessions of the United States (not including the Canal Zone).
    State of residence. The State in which an individual resides. An 
individual resides in a State if he or she is present in a State with 
the intention of making a home in that State. If an individual is on 
active duty as a member of the Armed Forces, the individual's State of 
residence is the State in which his or her permanent duty station is 
located. An alien who is legally in the United States shall be 
considered to be a resident of a State only if the alien is residing in 
the State and has resided in the State for a period of at least 90 days 
prior to the date of sale or delivery of a firearm. The following are 
examples that illustrate this definition:

    Example 1. A maintains a home in State X. A travels to State Y on a 
hunting, fishing, business, or other type of trip. A does not become a 
resident of State Y by reason of such trip.
    Example 2. A is a U.S. citizen and maintains a home in State X and a 
home in State Y. A resides in State X except for weekends or the summer 
months of the year and in State Y for the weekends or the summer months 
of the year. During the time that A actually resides in State X, A is a 
resident of State X, and during the time that A actually resides in 
State Y, A is a resident of State Y.

[[Page 1141]]

    Example 3. A, an alien, travels on vacation or on a business trip to 
State X. Regardless of the length of time A spends in State X, A does 
not have a State of residence in State X. This is because A does not 
have a home in State X at which he has resided for at least 90 days.
    Unlawful user of or addicted to any controlled substance. A person 
who uses a controlled substance and has lost the power of self-control 
with reference to the use of controlled substance; and any person who is 
a current user of a controlled substance in a manner other than as 
prescribed by a licensed physician. Such use is not limited to the use 
of drugs on a particular day, or within a matter of days or weeks 
before, but rather that the unlawful use has occurred recently enough to 
indicate that the individual is actively engaged in such conduct. A 
person may be an unlawful current user of a controlled substance even 
though the substance is not being used at the precise time the person 
seeks to acquire a firearm or receives or possesses a firearm. An 
inference of current use may be drawn from evidence of a recent use or 
possession of a controlled substance or a pattern of use or possession 
that reasonably covers the present time, e.g., a conviction for use or 
possession of a controlled substance within the past year; multiple 
arrests for such offenses within the past 5 years if the most recent 
arrest occurred within the past year; or persons found through a drug 
test to use a controlled substance unlawfully, provided that the test 
was administered within the past year. For a current or former member of 
the Armed Forces, an inference of current use may be drawn from recent 
disciplinary or other administrative action based on confirmed drug use, 
e.g., court-martial conviction, nonjudicial punishment, or an 
administrative discharge based on drug use or drug rehabilitation 
failure.
    Unserviceable firearm. A firearm which is incapable of discharging a 
shot by means of an explosive and is incapable of being readily restored 
to a firing condition.
    U.S.C. The United States Code.

(5 U.S.C. 552(a), 80 Stat. 383, as amended; 18 U.S.C. 847 (84 Stat. 
959); 18 U.S.C. 926 (82 Stat. 1226))

[T.D. ATF-48, 43 FR 13536, Mar. 31 1978; 44 FR 55842, Sept. 28, 1979]

    Editorial Note: For Federal Register citations affecting 
Sec. 178.11, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and on GPO Access.



         Subpart C--Administrative and Miscellaneous Provisions



Sec. 178.21  Forms prescribed.

    (a) The Director is authorized to prescribe all forms required by 
this part. All of the information called for in each form shall be 
furnished as indicated by the headings on the form and the instructions 
on or pertaining to the form. In addition, information called for in 
each form shall be furnished as required by this part.
    (b) Requests for forms should be mailed to the ATF Distribution 
Center, 7943 Angus Court, Springfield, Virginia 22153.

(5 U.S.C. 552(a); 80 Stat. 383, as amended)

[T.D. ATF-92, 46 FR 46915, Sept. 23, 1981, as amended by T.D. ATF-249, 
52 FR 5962, Feb. 27, 1987; T.D. ATF-270, 53 FR 10492, Mar. 31, 1988; 
T.D. 372, 61 FR 20724, May 8, 1996]



Sec. 178.22  Alternate methods or procedures; emergency variations from requirements.

    (a) Alternate methods or procedures. The licensee, on specific 
approval by the Director as provided in this paragraph, may use an 
alternate method or procedure in lieu of a method or procedure 
specifically prescribed in this part. The Director may approve an 
alternate method or procedure, subject to stated conditions, when it is 
found that:
    (1) Good cause is shown for the use of the alternate method or 
procedure;
    (2) The alternate method or procedure is within the purpose of, and 
consistent with the effect intended by, the specifically prescribed 
method or procedure and that the alternate method or procedure is 
substantially equivalent to that specifically prescribed method or 
procedure; and
    (3) The alternate method or procedure will not be contrary to any 
provision of law and will not result in an increase in cost to the 
Government or hinder the effective administration of this part. Where 
the licensee desires to

[[Page 1142]]

employ an alternate method or procedure, a written application shall be 
submitted to the appropriate Director of Industry Operations, for 
transmittal to the Director. The application shall specifically describe 
the proposed alternate method or procedure and shall set forth the 
reasons for it. Alternate methods or procedures may not be employed 
until the application is approved by the Director. The licensee shall, 
during the period of authorization of an alternate method or procedure, 
comply with the terms of the approved application. Authorization of any 
alternate method or procedure may be withdrawn whenever, in the judgment 
of the Director, the effective administration of this part is hindered 
by the continuation of the authorization.
    (b) Emergency variations from requirements. The Director may approve 
a method of operation other than as specified in this part, where it is 
found that an emergency exists and the proposed variation from the 
specified requirements are necessary and the proposed variations (1) 
will not hinder the effective administration of this part, and (2) will 
not be contrary to any provisions of law. Variations from requirements 
granted under this paragraph are conditioned on compliance with the 
procedures, conditions, and limitations set forth in the approval of the 
application. Failure to comply in good faith with the procedures, 
conditions, and limitations shall automatically terminate the authority 
for the variations, and the licensee shall fully comply with the 
prescribed requirements of regulations from which the variations were 
authorized. Authority for any variation may be withdrawn whenever, in 
the judgment of the Director, the effective administration of this part 
is hindered by the continuation of the variation. Where the licensee 
desires to employ an emergency variation, a written application shall be 
submitted to the appropriate Director of Industry Operations for 
transmittal to the Director. The application shall describe the proposed 
variation and set forth the reasons for it. Variations may not be 
employed until the application is approved.
    (c) Retention of approved variations. The licensee shall retain, as 
part of the licensee's records, available for examination by ATF 
officers, any application approved by the Director under this section.

[T.D. ATF-270, 53 FR 10492, Mar. 31, 1988]



Sec. 178.23  Right of entry and examination.

    (a) Except as provided in paragraph (b), any ATF officer, when there 
is reasonable cause to believe a violation of the Act has occurred and 
that evidence of the violation may be found on the premises of any 
licensed manufacturer, licensed importer, licensed dealer, or licensed 
collector, may, upon demonstrating such cause before a Federal 
magistrate and obtaining from the magistrate a warrant authorizing 
entry, enter during business hours (or, in the case of a licensed 
collector, the hours of operation) the premises, including places of 
storage, of any such licensee for the purpose of inspecting or 
examining:
    (1) Any records or documents required to be kept by such licensee 
under this part and
    (2) Any inventory of firearms or ammunition kept or stored by any 
licensed manufacturer, licensed importer, or licensed dealer at such 
premises or any firearms curios or relics or ammunition kept or stored 
by any licensed collector at such premises.
    (b) Any ATF officer, without having reasonable cause to believe a 
violation of the Act has occurred or that evidence of the violation may 
be found and without demonstrating such cause before a Federal 
magistrate or obtaining from the magistrate a warrant authorizing entry, 
may enter during business hours the premises, including places of 
storage, of any licensed manufacturer, licensed importer, or licensed 
dealer for the purpose of inspecting or examining the records, 
documents, ammunition and firearms referred to in paragraph (a) of this 
section:
    (1) In the course of a reasonable inquiry during the course of a 
criminal investigation of a person or persons other than the licensee,

[[Page 1143]]

    (2) For insuring compliance with the recordkeeping requirements of 
this part:
    (i) Not more than once during any 12-month period, or
    (ii) At any time with respect to records relating to a firearm 
involved in a criminal investigation that is traced to the licensee, or
    (3) When such inspection or examination may be required for 
determining the disposition of one or more particular firearms in the 
course of a bona fide criminal investigation.
    (c) Any ATF officer, without having reasonable cause to believe a 
violation of the Act has occurred or that evidence of the violation may 
be found and without demonstrating such cause before a Federal 
magistrate or obtaining from the magistrate a warrant authorizing entry, 
may enter during hours of operation the premises, including places of 
storage, of any licensed collector for the purpose of inspecting or 
examining the records, documents, firearms, and ammunition referred to 
in paragraph (a) of this section (1) for ensuring compliance with the 
recordkeeping requirements of this part not more than once during any 
12-month period or (2) when such inspection or examination may be 
required for determining the disposition of one or more particular 
firearms in the course of a bona fide criminal investigation. At the 
election of the licensed collector, the annual inspection permitted by 
this paragraph shall be performed at the ATF office responsible for 
conducting such inspection in closest proximity to the collectors 
premises.
    (d) The inspections and examinations provided by this section do not 
authorize an ATF officer to seize any records or documents other than 
those records or documents constituting material evidence of a violation 
of law. If an ATF officer seizes such records or documents, copies shall 
be provided the licensee within a reasonable time.

[T.D. ATF-270, 53 FR 10492, Mar. 31, 1988; as amended by T.D. ATF-363, 
60 FR 17450, Apr. 6, 1995]



Sec. 178.24  Compilation of State laws and published ordinances.

    (a) The Director shall annually revise and furnish Federal firearms 
licensees with a compilation of State laws and published ordinances 
which are relevant to the enforcement of this part. The Director 
annually revises the compilation and publishes it as ``State Laws and 
Published Ordinances--Firearms'' which is furnished free of charge to 
licensees under this part. Where the compilation has previously been 
furnished to licensees, the Director need only furnish amendments of the 
relevant laws and ordinances to such licensees.
    (b) ``State Laws and Published Ordinances--Firearms'' is 
incorporated by reference in this part. It is ATF Publication 5300.5, 
revised yearly. The current edition is available from the Superintendent 
of Documents, U.S. Government Printing Office, Washington, DC 20402. It 
is also available for inspection at the Office of the Federal Register, 
800 North Capitol Street, NW., suite 700, Washington, DC. This 
incorporation by reference was approved by the Director of the Federal 
Register.

[T.D. ATF-270, 53 FR 10493, Mar. 31, 1988]



Sec. 178.25  Disclosure of information.

    The Director of Industry Operations may make available to any 
Federal, State or local law enforcement agency any information which is 
obtained by reason of the provisions of the Act with respect to the 
identification of persons prohibited from purchasing or receiving 
firearms or ammunition who have purchased or received firearms or 
ammunition, together with a description of such firearms or ammunition. 
Upon the request of any Federal, State or local law enforcement agency, 
the Director of Industry Operations may provide such agency any 
information contained in the records required to be maintained by the 
Act or this part.

[T.D. ATF-270, 53 FR 10493, Mar. 31, 1988]



Sec. 178.25a  Responses to requests for information.

    Each licensee shall respond immediately to, and in no event later 
than 24 hours after the receipt of, a request by an ATF officer at the 
National

[[Page 1144]]

Tracing Center for information contained in the records required to be 
kept by this part for determining the disposition of one or more 
firearms in the course of a bona fide criminal investigation. The 
requested information shall be provided orally to the ATF officer within 
the 24-hour period. Verification of the identity and employment of 
National Tracing Center personnel requesting information may be 
established at the time the requested information is provided by 
telephoning the toll-free number 1-800-788-7132 or using the toll-free 
facsimile (FAX) number 1-800-578-7223.

(Approved by the Office of Management and Budget under control number 
1512-0387)

[T.D. ATF-363, 60 FR 17451, Apr. 6, 1996, as amended by T.D. ATF-396, 63 
FR 12646, Mar. 16, 1998]



Sec. 178.26  Curio and relic determination.

    Any person who desires to obtain a determination whether a 
particular firearm is a curio or relic shall submit a written request, 
in duplicate, for a ruling thereon to the Director. Each such request 
shall be executed under the penalties of perjury and shall contain a 
complete and accurate description of the firearm, and such photographs, 
diagrams, or drawings as may be necessary to enable the Director to make 
a determination. The Director may require the submission of the firearm 
for examination and evaluation. If the submission of the firearm is 
impractical, the person requesting the determination shall so advise the 
Director and designate the place where the firearm will be available for 
examination and evaluation.

[T.D. ATF-270, 53 FR 10493, Mar. 31, 1988]



Sec. 178.27  Destructive device determination.

    The Director shall determine in accordance with 18 U.S.C. 921(a)(4) 
whether a device is excluded from the definition of a destructive 
device. A person who desires to obtain a determination under that 
provision of law for any device which he believes is not likely to be 
used as a weapon shall submit a written request, in triplicate, for a 
ruling thereon to the Director. Each such request shall be executed 
under the penalties of perjury and contain a complete and accurate 
description of the device, the name and address of the manufacturer or 
importer thereof, the purpose of and use for which it is intended, and 
such photographs, diagrams, or drawings as may be necessary to enable 
the Director to make his determination. The Director may require the 
submission to him, of a sample of such device for examination and 
evaluation. If the submission of such device is impracticable, the 
person requesting the ruling shall so advise the Director and designate 
the place where the device will be available for examination and 
evaluation.



Sec. 178.28  Transportation of destructive devices and certain firearms.

    (a) The Director may authorize a person to transport in interstate 
or foreign commerce any destructive device, machine gun, short-barreled 
shotgun, or short-barreled rifle, if he finds that such transportation 
is reasonably necessary and is consistent with public safety and 
applicable State and local law. A person who desires to transport in 
interstate or foreign commerce any such device or weapon shall submit a 
written request so to do, in duplicate, to the Director. The request 
shall contain:
    (1) A complete description and identification of the device or 
weapon to be transported;
    (2) A statement whether such transportation involves a transfer of 
title;
    (3) The need for such transportation;
    (4) The approximate date such transportation is to take place;
    (5) The present location of such device or weapon and the place to 
which it is to be transported;
    (6) The mode of transportation to be used (including, if by common 
or contract carrier, the name and address of such carrier); and
    (7) Evidence that the transportation or possession of such device or 
weapon is not inconsistent with the laws at the place of destination.
    (b) No person shall transport any destructive device, machine gun, 
short-barreled shotgun, or short-barreled rifle in interstate or foreign 
commerce under the provisions of this section

[[Page 1145]]

until he has received specific authorization so to do from the Director. 
Authorization granted under this section does not carry or import relief 
from any other statutory or regulatory provision relating to firearms.
    (c) This section shall not be construed as requiring licensees to 
obtain authorization to transport destructive devices, machine guns, 
short-barreled shotguns, and short-barreled rifles in interstate or 
foreign commerce: Provided, That in the case of a licensed importer, 
licensed manufacturer, or licensed dealer, such a licensee is qualified 
under the National Firearms Act (see also Part 179 of this chapter) and 
this part to engage in the business with respect to the device or weapon 
to be transported, and that in the case of a licensed collector, the 
device or weapon to be transported is a curio or relic.

[33 FR 18555, Dec. 14, 1968. Redesignated at 40 FR 16385, Apr. 15, 1975, 
and amended by T.D. ATF-138, 48 FR 35399, Aug. 4, 1983]



Sec. 178.29  Out-of-State acquisition of firearms by nonlicensees.

    No person, other than a licensed importer, licensed manufacturer, 
licensed dealer, or licensed collector, shall transport into or receive 
in the State where the person resides (or if a corporation or other 
business entity, where it maintains a place of business) any firearm 
purchased or otherwise obtained by such person outside that State: 
Provided, That the provisions of this section:
    (a) Shall not preclude any person who lawfully acquires a firearm by 
bequest or intestate succession in a State other than his State of 
residence from transporting the firearm into or receiving it in that 
State, if it is lawful for such person to purchase or possess such 
firearm in that State,
    (b) Shall not apply to the transportation or receipt of a rifle or 
shotgun obtained from a licensed manufacturer, licensed importer, 
licensed dealer, or licensed collector in a State other than the 
transferee's State of residence in an over-the-counter transaction at 
the licensee's premises obtained in conformity with the provisions of 
Sec. 178.96(c) and
    (c) Shall not apply to the transportation or receipt of a firearm 
obtained in conformity with the provisions of Secs. 178.30 and 178.97.

[T.D. ATF-270, 53 FR 10493, Mar. 31, 1988]



Sec. 178.29a  Acquisition of firearms by nonresidents.

    No person, other than a licensed importer, licensed manufacturer, 
licensed dealer, or licensed collector, who does not reside in any State 
shall receive any firearms unless such receipt is for lawful sporting 
purposes.

[T.D. ATF-363, 60 FR 17451, Apr. 6, 1995]



Sec. 178.30  Out-of-State disposition of firearms by nonlicensees.

    No nonlicensee shall transfer, sell, trade, give, transport, or 
deliver any firearm to any other nonlicensee, who the transferor knows 
or has reasonable cause to believe does not reside in (or if the person 
is a corporation or other business entity, does not maintain a place of 
business in) the State in which the transferor resides: Provided, That 
the provisions of this section:
    (a) shall not apply to the transfer, transportation, or delivery of 
a firearm made to carry out a bequest of a firearm to, or any 
acquisition by intestate succession of a firearm by, a person who is 
permitted to acquire or possess a firearm under the laws of the State of 
his residence; and
    (b) shall not apply to the loan or rental of a firearm to any person 
for temporary use for lawful sporting purposes.

[T.D. ATF-313, 56 FR 32508, July 17, 1991; 57 FR 1205, Jan. 10, 1992]



Sec. 178.31  Delivery by common or contract carrier.

    (a) No person shall knowingly deliver or cause to be delivered to 
any common or contract carrier for transportation or shipment in 
interstate or foreign commerce to any person other than a licensed 
importer, licensed manufacturer, licensed dealer, or licensed collector, 
any package or other container in which there is any firearm or 
ammunition without written notice to the carrier that such firearm or 
ammunition is being transported or shipped: Provided, That any passenger 
who owns or legally possesses a firearm or ammunition being transported 
aboard any

[[Page 1146]]

common or contract carrier for movement with the passenger in interstate 
or foreign commerce may deliver said firearm or ammunition into the 
custody of the pilot, captain, conductor or operator of such common or 
contract carrier for the duration of that trip without violating any 
provision of this part.
    (b) No common or contract carrier shall require or cause any label, 
tag, or other written notice to be placed on the outside of any package, 
luggage, or other container indicating that such package, luggage, or 
other container contains a firearm.
    (c) No common or contract carrier shall transport or deliver in 
interstate or foreign commerce any firearm or ammunition with knowledge 
or reasonable cause to believe that the shipment, transportation, or 
receipt thereof would be in violation of any provision of this part: 
Provided, however, That the provisions of this paragraph shall not apply 
in respect to the transportation of firearms or ammunition in in-bond 
shipment under Customs laws and regulations.
    (d) No common or contract carrier shall knowingly deliver in 
interstate or foreign commerce any firearm without obtaining written 
acknowledgement of receipt from the recipient of the package or other 
container in which there is a firearm: Provided, That this paragraph 
shall not apply with respect to the return of a firearm to a passenger 
who places firearms in the carrier's custody for the duration of the 
trip.

[33 FR 18555, Dec. 14, 1968. Redesignated at 40 FR 16385, Apr. 15, 1975, 
and amended by T.D. ATF-354, 59 FR 7112, Feb. 14, 1994; T.D. ATF-361, 60 
FR 10786, Feb. 27, 1995]



Sec. 178.32  Prohibited shipment, transportation, possession, or receipt of firearms and ammunition by certain persons.

    (a) No person may ship or transport any firearm or ammunition in 
interstate or foreign commerce, or receive any firearm or ammunition 
which has been shipped or transported in interstate or foreign commerce, 
or possess any firearm or ammunition in or affecting commerce, who:
    (1) Has been convicted in any court of a crime punishable by 
imprisonment for a term exceeding 1 year,
    (2) Is a fugitive from justice,
    (3) Is an unlawful user of or addicted to any controlled substance 
(as defined in section 102 of the Controlled Substances Act, 21 U.S.C. 
802),
    (4) Has been adjudicated as a mental defective or has been committed 
to a mental institution,
    (5) Being an alien--
    (i) Is illegally or unlawfully in the United States; or
    (ii) Except as provided in paragraph (f) of this section, is a 
nonimmigrant alien: Provided, That the provisions of this paragraph 
(a)(5)(ii) do not apply to any nonimmigrant alien if that alien is-
    (A) Admitted to the United States for lawful hunting or sporting 
purposes or is in possession of a hunting license or permit lawfully 
issued in the United States;
    (B) An official representative of a foreign government who is either 
accredited to the United States Government or the Government's mission 
to an international organization having its headquarters in the United 
States or is en route to or from another country to which that alien is 
accredited. This exception only applies if the firearm or ammunition is 
shipped, transported, possessed, or received in the representative's 
official capacity;
    (C) An official of a foreign government or a distinguished foreign 
visitor who has been so designated by the Department of State. This 
exception only applies if the firearm or ammunition is shipped, 
transported, possessed, or received in the official's or visitor's 
official capacity, except if the visitor is a private individual who 
does not have an official capacity; or
    (D) A foreign law enforcement officer of a friendly foreign 
government entering the United States on official law enforcement 
business,
    (6) Has been discharged from the Armed Forces under dishonorable 
conditions,
    (7) Having been a citizen of the United States, has renounced 
citizenship,
    (8) Is subject to a court order that--

[[Page 1147]]

    (i) Was issued after a hearing of which such person received actual 
notice, and at which such person had an opportunity to participate;
    (ii) Restrains such person from harassing, stalking, or threatening 
an intimate partner of such person or child of such intimate partner or 
person, or engaging in other conduct that would place an intimate 
partner in reasonable fear of bodily injury to the partner or child; and
    (iii)(A) Includes a finding that such person represents a credible 
threat to the physical safety of such intimate partner or child; or
    (B) By its terms explicitly prohibits the use, attempted use, or 
threatened use of physical force against such intimate partner or child 
that would reasonably be expected to cause bodily injury, or
    (9) Has been convicted of a misdemeanor crime of domestic violence.
    (b) No person who is under indictment for a crime punishable by 
imprisonment for a term exceeding one year may ship or transport any 
firearm or ammunition in interstate or foreign commerce or receive any 
firearm or ammunition which has been shipped or transported in 
interstate or foreign commerce.
    (c) Any individual, who to that individual's knowledge and while 
being employed by any person described in paragraph (a) of this section, 
may not in the course of such employment receive, possess, or transport 
any firearm or ammunition in commerce or affecting commerce or receive 
any firearm or ammunition which has been shipped or transported in 
interstate or foreign commerce.
    (d) No person may sell or otherwise dispose of any firearm or 
ammunition to any person knowing or having reasonable cause to believe 
that such person:
    (1) Is under indictment for, or has been convicted in any court of, 
a crime punishable by imprisonment for a term exceeding 1 year,
    (2) Is a fugitive from justice,
    (3) Is an unlawful user of or addicted to any controlled substance 
(as defined in section 102 of the Controlled Substances Act, 21 U.S.C. 
802),
    (4) Has been adjudicated as a mental defective or has been committed 
to a mental institution,
    (5) Being an alien--
    (i) Is illegally or unlawfully in the United States; or
    (ii) Except as provided in paragraph (f) of this section, is a 
nonimmigrant alien: Provided, That the provisions of this paragraph 
(d)(5)(ii) do not apply to any nonimmigrant alien if that alien is-
    (A) Admitted to the United States for lawful hunting or sporting 
purposes or is in possession of a hunting license or permit lawfully 
issued in the United States;
    (B) An official representative of a foreign government who is either 
accredited to the United States Government or the Government's mission 
to an international organization having its headquarters in the United 
States or en route to or from another country to which that alien is 
accredited. This exception only applies if the firearm or ammunition is 
shipped, transported, possessed, or received in the representative's 
official capacity;
    (C) An official of a foreign government or a distinguished foreign 
visitor who has been so designated by the Department of State. This 
exception only applies if the firearm or ammunition is shipped, 
transported, possessed, or received in the official's or visitor's 
official capacity, except if the visitor is a private individual who 
does not have an official capacity; or
    (D) A foreign law enforcement officer of a friendly foreign 
government entering the United States on official law enforcement 
business,
    (6) Has been discharged from the Armed Forces under dishonorable 
conditions,
    (7) Having been a citizen of the United States, has renounced 
citizenship,
    (8) Is subject to a court order that restrains such person from 
harassing, stalking, or threatening an intimate partner of such person 
or child of such intimate partner or person, or engaging in other 
conduct that would place an intimate partner in reasonable fear of 
bodily injury to the partner or child: Provided, That the provisions of 
this

[[Page 1148]]

paragraph shall only apply to a court order that--
    (i) Was issued after a hearing of which such person received actual 
notice, and at which such person had the opportunity to participate; and
    (ii)(A) Includes a finding that such person represents a credible 
threat to the physical safety of such intimate partner or child; or
    (B) By its terms explicitly prohibits the use, attempted use, or 
threatened use of physical force against such intimate partner or child 
that would reasonably be expected to cause bodily injury, or
    (9) Has been convicted of a misdemeanor crime of domestic violence.
    (e) The actual notice required by paragraphs (a)(8)(i) and (d)(8)(i) 
of this section is notice expressly and actually given, and brought home 
to the party directly, including service of process personally served on 
the party and service by mail. Actual notice also includes proof of 
facts and circumstances that raise the inference that the party received 
notice including, but not limited to, proof that notice was left at the 
party's dwelling house or usual place of abode with some person of 
suitable age and discretion residing therein; or proof that the party 
signed a return receipt for a hearing notice which had been mailed to 
the party. It does not include notice published in a newspaper.
    (f) Pursuant to 18 U.S.C. 922(y)(3), any nonimmigrant alien may 
receive a waiver from the prohibition contained in paragraph (a)(5)(ii) 
of this section, if the Attorney General approves a petition for the 
waiver.

[T.D. ATF-270, 53 FR 10493, Mar. 31, 1988, as amended by T.D. ATF-363, 
60 FR 17451, Apr. 6, 1995; T.D. ATF-391, 62 FR 34639, June 27, 1997; 
T.D. ATF-401, 63 FR 35522, June 30, 1998; T.D. ATF-471, 67 FR 5425, Feb. 
5, 2002]



Sec. 178.33  Stolen firearms and ammunition.

    No person shall transport or ship in interstate or foreign commerce 
any stolen firearm or stolen ammunition knowing or having reasonable 
cause to believe that the firearm or ammunition was stolen, and no 
person shall receive, possess, conceal, store, barter, sell, or dispose 
of any stolen firearm or stolen ammunition, or pledge or accept as 
security for a loan any stolen firearm or stolen ammunition, which is 
moving as, which is a part of, which constitutes, or which has been 
shipped or transported in, interstate or foreign commerce, either before 
or after it was stolen, knowing or having reasonable cause to believe 
that the firearm or ammunition was stolen.

[T.D. ATF-363, 60 FR 17451, Apr. 6, 1995]



Sec. 178.33a  Theft of firearms.

    No person shall steal or unlawfully take or carry away from the 
person or the premises of a person who is licensed to engage in the 
business of importing, manufacturing, or dealing in firearms, any 
firearm in the licensee's business inventory that has been shipped or 
transported in interstate or foreign commerce.

[T.D. ATF-354, 59 FR 7112, Feb. 14, 1994]



Sec. 178.34  Removed, obliterated, or altered serial number.

    No person shall knowingly transport, ship, or receive in interstate 
or foreign commerce any firearm which has had the importer's or 
manufacturer's serial number removed, obliterated, or altered, or 
possess or receive any firearm which has had the importer's or 
manufacturer's serial number removed, obliterated, or altered and has, 
at any time, been shipped or transported in interstate or foreign 
commerce.

[T.D. ATF-313, 56 FR 32508, July 17, 1991]



Sec. 178.35  Skeet, trap, target, and similar shooting activities.

    Licensing and recordkeeping requirements, including permissible 
alternate records, for skeet, trap, target, and similar organized 
activities shall be determined by the Director of Industry Operations on 
a case by case basis.



Sec. 178.36  Transfer or possession of machine guns.

    No person shall transfer or possess a machine gun except:
    (a) A transfer to or by, or possession by or under the authority of, 
the United States, or any department or agency thereof, or a State, or a 
department, agency, or political subdivision

[[Page 1149]]

thereof. (See Part 179 of this chapter); or
    (b) Any lawful transfer or lawful possession of a machine gun that 
was lawfully possessed before May 19, 1986 (See Part 179 of this 
chapter).

[T.D. ATF-270, 53 FR 10494, Mar. 31, 1988]



Sec. 178.37  Manufacture, importation and sale of armor piercing ammunition.

    No person shall manufacture or import, and no manufacturer or 
importer shall sell or deliver, armor piercing ammunition, except:
    (a) The manufacture or importation, or the sale or delivery by any 
manufacturer or importer, of armor piercing ammunition for the use of 
the United States or any department or agency thereof or any State or 
any department, agency or political subdivision thereof;
    (b) The manufacture, or the sale or delivery by a manufacturer or 
importer, of armor piercing ammunition for the purpose of exportation; 
or
    (c) The sale or delivery by a manufacturer or importer of armor 
piercing ammunition for the purposes of testing or experimentation as 
authorized by the Director under the provisions of Sec. 178.149.

[T.D. ATF-270, 53 FR 10494, Mar. 31, 1988]



Sec. 178.38  Transportation of firearms.

    Notwithstanding any other provision of any law or any rule or 
regulation of a State or any political subdivision thereof, any person 
who is not otherwise prohibited by this chapter from transporting, 
shipping, or receiving a firearm shall be entitled to transport a 
firearm for any lawful purpose from any place where such person may 
lawfully possess and carry such firearm to any other place where such 
person may lawfully possess and carry such firearm if, during such 
transportation the firearm is unloaded, and neither the firearm nor any 
ammunition being transported is readily accessible or is directly 
accessible from the passenger compartment of such transporting vehicle: 
Provided, That in the case of a vehicle without a compartment separate 
from the driver's compartment the firearm or ammunition shall be 
contained in a locked container other than the glove compartment or 
console.

[T.D. ATF-270, 53 FR 10494, Mar. 31, 1988]



Sec. 178.39  Assembly of semiautomatic rifles or shotguns.

    (a) No person shall assemble a semiautomatic rifle or any shotgun 
using more than 10 of the imported parts listed in paragraph (c) of this 
section if the assembled firearm is prohibited from importation under 
section 925(d)(3) as not being particularly suitable for or readily 
adaptable to sporting purposes.
    (b) The provisions of this section shall not apply to:
    (1) The assembly of such rifle or shotgun for sale or distribution 
by a licensed manufacturer to the United States or any department or 
agency thereof or to any State or any department, agency, or political 
subdivision thereof; or
    (2) The assembly of such rifle or shotgun for the purposes of 
testing or experimentation authorized by the Director under the 
provisions of Sec. 178.151; or
    (3) The repair of any rifle or shotgun which had been imported into 
or assembled in the United States prior to November 30, 1990, or the 
replacement of any part of such firearm.
    (c) For purposes of this section, the term imported parts are:
(1) Frames, receivers, receiver castings, forgings or stampings
(2) Barrels
(3) Barrel extensions
(4) Mounting blocks (trunions)
(5) Muzzle attachments
(6) Bolts
(7) Bolt carriers
(8) Operating rods
(9) Gas pistons
(10) Trigger housings
(11) Triggers
(12) Hammers
(13) Sears
(14) Disconnectors
(15) Buttstocks
(16) Pistol grips
(17) Forearms, handguards
(18) Magazine bodies
(19) Followers
(20) Floorplates

[T.D. ATF-346, 58 FR 40589, July 29, 1993]

[[Page 1150]]



Sec. 178.39a  Reporting theft or loss of firearms.

    Each licensee shall report the theft or loss of a firearm from the 
licensee's inventory (including any firearm which has been transferred 
from the licensee's inventory to a personal collection and held as a 
personal firearm for at least 1 year), or from the collection of a 
licensed collector, within 48 hours after the theft or loss is 
discovered. Licensees shall report thefts or losses by telephoning 1-
800-800-3855 (nationwide toll free number) and by preparing ATF Form 
3310.11, Federal Firearms Licensee Theft/Loss Report, in accordance with 
the instructions on the form. The original of the report shall be 
forwarded to the office specified thereon, and Copy 1 shall be retained 
by the licensee as part of the licensee's permanent records. Theft or 
loss of any firearm shall also be reported to the appropriate local 
authorities.

(Approved by the Office of Management and Budget under control number 
1512-0524)

[T.D. ATF-363, 60 FR 17451, Apr. 6, 1995]



Sec. 178.40  Manufacture, transfer, and possession of semiautomatic assault weapons.

    (a) Prohibition. No person shall manufacture, transfer, or possess a 
semiautomatic assault weapon.
    (b) Exceptions. The provisions of paragraph (a) of this section 
shall not apply to:
    (1) The possession or transfer of any semiautomatic assault weapon 
otherwise lawfully possessed in the United States under Federal law on 
September 13, 1994;
    (2) Any of the firearms, or replicas or duplicates of the firearms, 
specified in 18 U.S.C. 922, Appendix A, as such firearms existed on 
October 1, 1993;
    (3) Any firearm that--
    (i) Is manually operated by bolt, pump, lever, or slide action;
    (ii) Has been rendered permanently inoperable; or
    (iii) Is an antique firearm;
    (4) Any semiautomatic rifle that cannot accept a detachable magazine 
that holds more than 5 rounds of ammunition;
    (5) Any semiautomatic shotgun that cannot hold more than 5 rounds of 
ammunition in a fixed or detachable magazine;
    (6) The manufacture for, transfer to, or possession by the United 
States or a department or agency of the United States or a State or a 
department, agency, or political subdivision of a State, or a transfer 
to or possession by a law enforcement officer employed by such an entity 
for purposes of law enforcement;
    (7) The transfer to a licensee under title I of the Atomic Energy 
Act of 1954 (42 U.S.C. 2011 et seq.) for purposes of establishing and 
maintaining an on-site physical protection system and security 
organization required by Federal law, or possession by an employee or 
contractor of such licensee on-site for such purposes or off-site for 
purposes of licensee-authorized training or transportation of nuclear 
materials;
    (8) The possession, by an individual who is retired from service 
with a law enforcement agency and is not otherwise prohibited from 
receiving a firearm, of a semiautomatic assault weapon transferred to 
the individual by the agency upon such retirement;
    (9) The manufacture, transfer, or possession of a semiautomatic 
assault weapon by a licensed manufacturer or licensed importer for the 
purposes of testing or experimentation as authorized by the Director 
under the provisions of Sec. 178.153; or
    (10) The manufacture, transfer, or possession of a semiautomatic 
assault weapon by a licensed manufacturer, licensed importer, or 
licensed dealer for the purpose of exportation in compliance with the 
Arms Export Control Act (22 U.S.C. 2778).
    (c) Manufacture and dealing in semiautomatic assault weapons. 
Subject to compliance with the provisions of this part, licensed 
manufacturers and licensed dealers in semiautomatic assault weapons may 
manufacture and deal in such weapons manufactured after September 13, 
1994: Provided, The licensee obtains evidence that the weapons will be 
disposed of in accordance with paragraph (b) of this section. Examples 
of acceptable evidence include the following:
    (1) Contracts between the manufacturer and dealers stating that the

[[Page 1151]]

weapons may only be sold to law enforcement agencies, law enforcement 
officers, or other purchasers specified in paragraph (b) of this 
section;
    (2) Copies of purchase orders submitted to the manufacturer or 
dealer by law enforcement agencies or other purchasers specified in 
paragraph (b) of this section;
    (3) Copies of letters submitted to the manufacturer or dealer by 
government agencies, law enforcement officers, or other purchasers 
specified in paragraph (b) of this section expressing an interest in 
purchasing the semiautomatic assault weapons;
    (4) Letters from dealers to the manufacturer stating that sales will 
only be made to law enforcement agencies, law enforcement officers, or 
other purchasers specified in paragraph (b) of this section; and
    (5) Letters from law enforcement officers purchasing in accordance 
with paragraph (b)(6) of this section and Sec. 178.132.

(Paragraph (c) approved by the Office of Management and Budget under 
control number 1512-0526)

[T.D. ATF-363, 60 FR 17451, Apr. 6, 1995]



Sec. 178.40a  Transfer and possession of large capacity ammunition feeding devices.

    (a) Prohibition. No person shall transfer or possess a large 
capacity ammunition feeding device.
    (b) Exceptions. The provisions of paragraph (a) of this section 
shall not apply to:
    (1) The possession or transfer of any large capacity ammunition 
feeding device otherwise lawfully possessed on September 13, 1994;
    (2) The manufacture for, transfer to, or possession by the United 
States or a department or agency of the United States or a State or a 
department, agency, or political subdivision of a State, or a transfer 
to or possession by a law enforcement officer employed by such an entity 
for purposes of law enforcement;
    (3) The transfer to a licensee under title I of the Atomic Energy 
Act of 1954 for purposes of establishing and maintaining an on-site 
physical protection system and security organization required by Federal 
law, or possession by an employee or contractor of such licensee on-site 
for such purposes or off-site for purposes of licensee-authorized 
training or transportation of nuclear materials;
    (4) The possession, by an individual who is retired from service 
with a law enforcement agency and is not otherwise prohibited from 
receiving ammunition, of a large capacity ammunition feeding device 
transferred to the individual by the agency upon such retirement;
    (5) The manufacture, transfer, or possession of any large capacity 
ammunition feeding device by a manufacturer or importer for the purposes 
of testing or experimentation in accordance with Sec. 178.153; or
    (6) The manufacture, transfer, or possession of any large capacity 
ammunition feeding device by a manufacturer or importer for the purpose 
of exportation in accordance with the Arms Export Control Act (22 U.S.C. 
2778).
    (c) Importation, manufacture, and dealing in large capacity 
ammunition feeding devices. Possession and transfer of large capacity 
ammunition feeding devices by persons who manufacture, import, or deal 
in such devices will be presumed to be lawful if such persons maintain 
evidence establishing that the devices are possessed and transferred for 
sale to purchasers specified in paragraph (b) of this section. Examples 
of acceptable evidence include the following:
    (1) Contracts between persons who import or manufacture such devices 
and persons who deal in such devices stating that the devices may only 
be sold to law enforcement agencies or other purchasers specified in 
paragraph (b) of this section;
    (2) Copies of purchase orders submitted to persons who manufacture, 
import, or deal in such devices by law enforcement agencies or other 
purchasers specified in paragraph (b) of this section;
    (3) Copies of letters submitted to persons who manufacture, import, 
or deal in such devices by government agencies or other purchasers 
specified in paragraph (b) of this section expressing an interest in 
purchasing the devices;
    (4) Letters from persons who deal in such devices to persons who 
import or

[[Page 1152]]

manufacture such devices stating that sales will only be made to law 
enforcement agencies or other purchasers specified in paragraph (b) of 
this section; and
    (5) Letters from law enforcement officers purchasing in accordance 
with paragraph (b)(2) of this section and Sec. 178.132.

(Paragraph (c) approved by the Office of Management and Budget under 
control number 1512-0526)

[T.D. ATF-363, 60 FR 17452, Apr. 6, 1995, as amended by T.D. ATF-383, 61 
FR 39321, July 29, 1996]



                           Subpart D--Licenses



Sec. 178.41  General.

    (a) Each person intending to engage in business as an importer or 
manufacturer of firearms or ammunition, or a dealer in firearms shall, 
before commencing such business, obtain the license required by this 
subpart for the business to be operated. Each person who desires to 
obtain a license as a collector of curios or relics may obtain such a 
license under the provisions of this subpart.
    (b) Each person intending to engage in business as a firearms or 
ammunition importer or manufacturer, or dealer in firearms shall file an 
application, with the required fee (see Sec. 178.42), with ATF in 
accordance with the instructions on the form (see Sec. 178.44), and, 
pursuant to Sec. 178.47, receive the license required for such business 
from the Chief, National Licensing Center. Except as provided in 
Sec. 178.50, a license must be obtained for each business and each place 
at which the applicant is to do business. A license as an importer or 
manufacturer of firearms or ammunition, or a dealer in firearms shall, 
subject to the provisions of the Act and other applicable provisions of 
law, entitle the licensee to transport, ship, and receive firearms and 
ammunition covered by such license in interstate or foreign commerce and 
to engage in the business specified by the license, at the location 
described on the license, and for the period stated on the license. 
However, it shall not be necessary for a licensed importer or a licensed 
manufacturer to also obtain a dealer's license in order to engage in 
business on the licensed premises as a dealer in the same type of 
firearms authorized by the license to be imported or manufactured. 
Payment of the license fee as an importer or manufacturer of destructive 
devices, ammunition for destructive devices or armor piercing ammunition 
or as a dealer in destructive devices includes the privilege of 
importing or manufacturing firearms other than destructive devices and 
ammunition for other than destructive devices or ammunition other than 
armor piercing ammunition, or dealing in firearms other than destructive 
devices, as the case may be, by such a licensee at the licensed 
premises.
    (c) Each person seeking the privileges of a collector licensed under 
this part shall file an application, with the required fee (see 
Sec. 178.42), with ATF in accordance with the instructions on the form 
(see Sec. 178.44), and pursuant to Sec. 178.47, receive from the Chief, 
National Licensing Center, the license covering the collection of curios 
and relics. A separate license may be obtained for each collection 
premises, and such license shall, subject to the provisions of the Act 
and other applicable provisions of law, entitle the licensee to 
transport, ship, receive, and acquire curios and relics in interstate or 
foreign commerce, and to make disposition of curios and relics in 
interstate or foreign commerce, to any other person licensed under the 
provisions of this part, for the period stated on the license.
    (d) The collector license provided by this part shall apply only to 
transactions related to a collector's activity in acquiring, holding or 
disposing of curios and relics. A collector's license does not authorize 
the collector to engage in a business required to be licensed under the 
Act or this part. Therefore, if the acquisitions and dispositions of 
curios and relics by a collector bring the collector within the 
definition of a manufacturer, importer,

[[Page 1153]]

or dealer under this part, he shall qualify as such. (See also 
Sec. 178.93 of this part.)

(18 U.S.C. 847 (84 Stat. 959); 18 U.S.C. 926 (82 Stat. 1226))

[33 FR 18555, Dec. 14, 1968. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-270, 53 FR 10494, Mar. 31, 1988; T.D. ATF-290, 
54 FR 53054, Dec. 27, 1989]



Sec. 178.42  License fees.

    Each applicant shall pay a fee for obtaining a firearms license or 
ammunition license, a separate fee being required for each business or 
collecting activity at each place of such business or activity, as 
follows:
    (a) For a manufacturer:
    (1) Of destructive devices, ammunition for destructive devices or 
armor piercing ammunition--$1,000 per year.
    (2) Of firearms other than destructive devices--$50 per year.
    (3) Of ammunition for firearms other than ammunition for destructive 
devices or armor piercing ammunition--$10 per year.
    (b) For an importer:
    (1) Of destructive devices, ammunition for destructive devices or 
armor piercing ammunition--$1,000 per year.
    (2) Of firearms other than destructive devices or ammunition for 
firearms other than destructive devices or ammunition other than armor 
piercing ammunition--$50 per year.
    (c) For a dealer:
    (1) In destructive devices--$1,000 per year.
    (2) Who is not a dealer in destructive devices--$200 for 3 years, 
except that the fee for renewal of a valid license shall be $90 for 3 
years.
    (d) For a collector of curios and relics--$10 per year.

[T.D. ATF-270, 53 FR 10494, Mar. 31, 1988, as amended by T.D. ATF-354, 
59 FR 7112, Feb. 14, 1994]



Sec. 178.43  License fee not refundable.

    No refund of any part of the amount paid as a license fee shall be 
made where the operations of the licensee are, for any reason, 
discontinued during the period of an issued license. However, the 
license fee submitted with an application for a license shall be 
refunded if that application is denied or withdrawn by the applicant 
prior to being acted upon.

[T.D. ATF-270, 53 FR 10494, Mar. 31, 1988]



Sec. 178.44  Original license.

    (a)(1) Any person who intends to engage in business as a firearms or 
ammunition importer or manufacturer, or firearms dealer, or who has not 
previously been licensed under the provisions of this part to so engage 
in business, or who has not timely submitted an application for renewal 
of the previous license issued under this part, must file an application 
for license, ATF Form 7 (Firearms), in duplicate, with ATF in accordance 
with the instructions on the form. The application must:
    (i) Be executed under the penalties of perjury and the penalties 
imposed by 18 U.S.C. 924;
    (ii) Include a photograph and fingerprints as required in the 
instructions on the form;
    (iii) If the applicant (including, in the case of a corporation, 
partnership, or association, any individual possessing, directly or 
indirectly, the power to direct or cause the direction of the management 
and policies of the corporation, partnership, or association) is a 
nonimmigrant alien, applicable documentation demonstrating that the 
nonimmigrant alien falls within an exception to or has obtained a waiver 
from the nonimmigrant alien provision (e.g., a hunting license or permit 
lawfully issued in the United States; waiver);
    (iv) Be accompanied by a completed ATF Form 5300.37 (Certification 
of Compliance with State and Local Law) and ATF Form 5300.36 
(Notification of Intent to Apply for a Federal Firearms License); and
    (v) Include the appropriate fee in the form of money order or check 
made payable to the Bureau of Alcohol, Tobacco and Firearms.
    (2) ATF Forms 7 (Firearms), ATF Forms 5300.37, and ATF Forms 5300.36 
may be obtained by contacting any ATF office.
    (b) Any person who desires to obtain a license as a collector under 
the Act and this part, or who has not timely submitted an application 
for renewal of the previous license issued under this

[[Page 1154]]

part, shall file an application, ATF Form 7CR (Curios and Relics), with 
ATF in accordance with the instructions on the form. If the applicant 
(including, in the case of a corporation, partnership, or association, 
any individual possessing, directly or indirectly, the power to direct 
or cause the direction of the management and policies of the 
corporation, partnership, or association) is a nonimmigrant alien, the 
application must include applicable documentation demonstrating that the 
nonimmigrant alien falls within an exception to or has obtained a waiver 
from the nonimmigrant alien provision (e.g., a hunting license or permit 
lawfully issued in the United States; waiver). The application must be 
executed under the penalties of perjury and the penalties imposed by 18 
U.S.C. 924. The application shall be accompanied by a completed ATF Form 
5300.37 and ATF Form 5300.36 and shall include the appropriate fee in 
the form of a money order or check made payable to the Bureau of 
Alcohol, Tobacco and Firearms. ATF Forms 7CR (Curios and Relics), ATF 
Forms 5300.37, and ATF Forms 5300.36 may be obtained by contacting any 
ATF office.

(Paragraphs (a) and (b) approved by the Office of Management and Budget 
under control number 1512-0570)

[T.D. ATF-363, 60 FR 17453, Apr. 6, 1995, as amended by T.D. ATF-471, 67 
FR 5425, Feb. 5, 2002]



Sec. 178.45  Renewal of license.

    If a licensee intends to continue the business or activity described 
on a license issued under this part during any portion of the ensuing 
year, the licensee shall, unless otherwise notified in writing by the 
Chief, National Licensing Center, execute and file with ATF prior to the 
expiration of the license an application for a license renewal, ATF Form 
8 Part II, accompanied by a completed ATF Form 5300.37 and ATF Form 
5300.36, in accordance with the instructions on the forms, and the 
required fee. If the applicant is a nonimmigrant alien, the application 
must include applicable documentation demonstrating that the 
nonimmigrant alien falls within an exception to or has obtained a waiver 
from the nonimmigrant alien provision (e.g., a hunting license or permit 
lawfully issued in the United States; waiver). The Chief, National 
Licensing Center, may, in writing, require the applicant for license 
renewal to also file completed ATF Form 7 or ATF Form 7CR in the manner 
required by Sec. 178.44. In the event the licensee does not timely file 
an ATF Form 8 Part II, the licensee must file an ATF Form 7 or ATF Form 
7CR as required by Sec. 178.44, and obtain the required license before 
continuing business or collecting activity. If an ATF Form 8 Part II is 
not timely received through the mails, the licensee should so notify the 
Chief, National Licensing Center.

(Approved by the Office of Management and Budget under control number 
1512-0570)

[T.D. ATF-363, 60 FR 17453, Apr. 6, 1995, as amended by T.D. ATF-471, 67 
FR 5426, Feb. 5, 2002]



Sec. 178.46  Insufficient fee.

    If an application is filed with an insufficient fee, the application 
and any fee submitted will be returned to the applicant.

(18 U.S.C. 847 (84 Stat. 959); 18 U.S.C. 926 (82 Stat. 1226))

[T.D. ATF-200, 50 FR 10498, Mar. 15, 1985]



Sec. 178.47  Issuance of license.

    (a) Upon receipt of a properly executed application for a license on 
ATF Form 7, ATF Form 7CR, or ATF Form 8 Part II, the Chief, National 
Licensing Center, shall, upon finding through further inquiry or 
investigation, or otherwise, that the applicant is qualified, issue the 
appropriate license. Each license shall bear a serial number and such 
number may be assigned to the licensee to whom issued for so long as the 
licensee maintains continuity of renewal in the same location (State).
    (b) The Chief, National Licensing Center, shall approve a properly 
executed application for license on ATF Form 7, ATF Form 7CR, or ATF 
Form 8 Part II, if:
    (1) The applicant is 21 years of age or over;
    (2) The applicant (including, in the case of a corporation, 
partnership, or association, any individual possessing,

[[Page 1155]]

directly or indirectly, the power to direct or cause the direction of 
the management and policies of the corporation, partnership, or 
association) is not prohibited under the provisions of the Act from 
shipping or transporting in interstate or foreign commerce, or 
possessing in or affecting commerce, any firearm or ammunition, or from 
receiving any firearm or ammunition which has been shipped or 
transported in interstate or foreign commerce;
    (3) The applicant has not willfully violated any of the provisions 
of the Act or this part;
    (4) The applicant has not willfully failed to disclose any material 
information required, or has not made any false statement as to any 
material fact, in connection with his application;
    (5) The applicant has in a State (i) premises from which he conducts 
business subject to license under the Act or from which he intends to 
conduct such business within a reasonable period of time, or (ii) in the 
case of a collector, premises from which he conducts his collecting 
subject to license under the Act or from which he intends to conduct 
such collecting within a reasonable period of time; and
    (6) The applicant has filed an ATF Form 5300.37 (Certification of 
Compliance with State and Local Law) with ATF in accordance with the 
instructions on the form certifying under the penalties of perjury that-
-
    (i) The business to be conducted under the license is not prohibited 
by State or local law in the place where the licensed premises are 
located;
    (ii) Within 30 days after the application is approved the business 
will comply with the requirements of State and local law applicable to 
the conduct of business;
    (iii) The business will not be conducted under the license until the 
requirements of State and local law applicable to the business have been 
met; and
    (iv) The applicant has completed and sent or delivered ATF F 5300.36 
(Notification of Intent to Apply for a Federal Firearms License) to the 
chief law enforcement officer of the locality in which the premises are 
located, which indicates that the applicant intends to apply for a 
Federal firearms license. For purposes of this paragraph, the ``chief 
law enforcement officer'' is the chief of police, the sheriff, or an 
equivalent officer.
    (c) The Chief, National Licensing Center, shall approve or the 
Director of Industry Operations shall deny an application for a license 
within the 60-day period beginning on the date the properly executed 
application was received: Provided, That when an applicant for license 
renewal is a person who is, pursuant to the provisions of Sec. 178.78, 
Sec. 178.143, or Sec. 178.144, conducting business or collecting 
activity under a previously issued license, action regarding the 
application will be held in abeyance pending the completion of the 
proceedings against the applicant's existing license or license 
application, final determination of the applicant's criminal case, or 
final action by the Director on an application for relief submitted 
pursuant to Sec. 178.144, as the case may be.
    (d) When the Director of Industry Operations or the Chief, National 
Licensing Center fails to act on an application for a license within the 
60-day period prescribed by paragraph (c) of this section, the applicant 
may file an action under section 1361 of title 28, United States Code, 
to compel ATF to act upon the application.

(Paragraph (b)(6) approved by the Office of Management and Budget under 
control numbers 1512-0522 and 1512-0523)

(18 U.S.C. 847 (84 Stat. 959); 18 U.S.C. 926 (82 Stat. 1226))

[33 FR 18555, Dec. 14, 1968. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-135, 48 FR 24068, May 31, 1983; T.D. ATF-241, 51 
FR 39619, Oct. 29, 1986; T.D. ATF-270, 53 FR 10495, Mar. 31, 1988; T.D. 
ATF-290, 54 FR 53054, Dec. 27, 1989; T.D. ATF-363, 60 FR 17453, Apr. 6, 
1995]



Sec. 178.48  Correction of error on license.

    (a) Upon receipt of a license issued under the provisions of this 
part, each licensee shall examine same to ensure that the information 
contained thereon is accurate. If the license is incorrect, the licensee 
shall return the license to the Chief, National Licensing Center, with a 
statement showing the nature of the error. The Chief, National Licensing 
Center, shall correct the error, if

[[Page 1156]]

the error was made in his office, and return the license. However, if 
the error resulted from information contained in the licensee's 
application for the license, the Chief, National Licensing Center, shall 
require the licensee to file an amended application setting forth the 
correct information and a statement explaining the error contained in 
the application. Upon receipt of the amended application and a 
satisfactory explanation of the error, the Chief, National Licensing 
Center, shall make the correction on the license and return same to the 
licensee.
    (b) When the Chief, National Licensing Center, finds through any 
means other than notice from the licensee that an incorrect license has 
been issued, the Chief, National Licensing Center, may require the 
holder of the incorrect license to (1) return the license for 
correction, and (2) if the error resulted from information contained in 
the licensee's application for the license, the Chief, National 
Licensing Center, shall require the licensee to file an amended 
application setting forth the correct information, and a statement 
explaining the error contained in the application. The Chief, National 
Licensing Center, then shall make the correction on the license and 
return same to the licensee.

[33 FR 18555, Dec. 14, 1968, unless otherwise noted. Redesignated at 40 
FR 16835, Apr. 15, 1975, and amended by T.D. ATF-290, 54 FR 53054, Dec. 
27, 1989]



Sec. 178.49  Duration of license.

    The license entitles the person to whom issued to engage in the 
business or activity specified on the license, within the limitations of 
the Act and the regulations contained in this part, for a three year 
period, unless terminated sooner.

[T.D. ATF-270, 53 FR 10495, Mar. 31, 1988]



Sec. 178.50  Locations covered by license.

    The license covers the class of business or the activity specified 
in the license at the address specified therein. A separate license must 
be obtained for each location at which a firearms or ammunition business 
or activity requiring a license under this part is conducted except:
    (a) No license is required to cover a separate warehouse used by the 
licensee solely for storage of firearms or ammunition if the records 
required by this part are maintained at the licensed premises served by 
such warehouse;
    (b) A licensed collector may acquire curios and relics at any 
location, and dispose of curios or relics to any licensee or to other 
persons who are residents of the State where the collector's license is 
held and the disposition is made;
    (c) A licensee may conduct business at a gun show pursuant to the 
provision of Sec. 178.100; or
    (d) A licensed importer, manufacturer, or dealer may engage in the 
business of dealing in curio or relic firearms with another licensee at 
any location pursuant to the provisions of Sec. 178.100.

[T.D. ATF-191, 49 FR 46890, Nov. 29, 1984, as amended by T.D. ATF-401, 
63 FR 35523, June 30, 1998]



Sec. 178.51  License not transferable.

    Licenses issued under this part are not transferable. In the event 
of the lease, sale, or other transfer of the operations authorized by 
the license, the successor must obtain the license required by this part 
prior to commencing such operations. However, for rules on right of 
succession, see Sec. 178.56.



Sec. 178.52  Change of address.

    (a) Licensees may during the term of their current license remove 
their business or activity to a new location at which they intend 
regularly to carry on such business or activity by filing an Application 
for an Amended Federal Firearms License, ATF Form 5300.38, in duplicate, 
not less than 30 days prior to such removal with the Chief, National 
Licensing Center. The ATF Form 5300.38 shall be completed in accordance 
with the instructions on the form. The application must be executed 
under the penalties of perjury and penalties imposed by 18 U.S.C. 924. 
The application shall be accompanied by the licensee's original license. 
The Chief, National Licensing Center, may, in writing, require the 
applicant for an amended license to also file completed

[[Page 1157]]

ATF Form 7 or ATF Form 7CR, or portions thereof, in the manner required 
by Sec. 178.44.
    (b) Upon receipt of a properly executed application for an amended 
license, the Chief, National Licensing Center, shall, upon finding 
through further inquiry or investigation, or otherwise, that the 
applicant is qualified at the new location, issue the amended license, 
and return it to the applicant. The license shall be valid for the 
remainder of the term of the original license. The Chief, National 
Licensing Center, shall, if the applicant is not qualified, refer the 
application for amended license to the Director of Industry Operations 
for denial in accordance with Sec. 178.71.

(Approved by the Office of Management and Budget under control number 
1512-0525)

[T.D. ATF-363, 60 FR 17453, Apr. 6, 1995]



Sec. 178.53  Change in trade name.

    A licensee continuing to conduct business at the location shown on 
his license is not required to obtain a new license by reason of a mere 
change in trade name under which he conducts his business: Provided, 
That such licensee furnishes his license for endorsement of such change 
to the Chief, National Licensing Center within 30 days from the date the 
licensee begins his business under the new trade name.

[33 FR 18555, Dec. 14, 1968. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55842, Sept. 28, 1979; T.D. ATF-290, 
54 FR 53055, Dec. 27, 1989]



Sec. 178.54  Change of control.

    In the case of a corporation or association holding a license under 
this part, if actual or legal control of the corporation or association 
changes, directly or indirectly, whether by reason of change in stock 
ownership or control (in the licensed corporation or in any other 
corporation), by operations of law, or in any other manner, the licensee 
shall, within 30 days of such change, give written notification thereof, 
executed under the penalties of perjury, to the Chief, National 
Licensing Center. Upon expiration of the license, the corporation or 
association must file a Form 7 (Firearms) as required by Sec. 178.44.

[33 FR 18555, Dec. 14, 1968, unless otherwise noted. Redesignated at 40 
FR 16835, Apr. 15, 1975, and amended by T.D. ATF-290, 54 FR 53054, Dec. 
27, 1989]



Sec. 178.55  Continuing partnerships.

    Where, under the laws of the particular State, the partnership is 
not terminated on death or insolvency of a partner, but continues until 
the winding up of the partnership affairs is completed, and the 
surviving partner has the exclusive right to the control and possession 
of the partnership assets for the purpose of liquidation and settlement, 
such surviving partner may continue to operate the business under the 
license of the partnership. If such surviving partner acquires the 
business on completion of the settlement of the partnership, he shall 
obtain a license in his own name from the date of acquisition, as 
provided in Sec. 178.44. The rule set forth in this section shall also 
apply where there is more than one surviving partner.



Sec. 178.56  Right of succession by certain persons.

    (a) Certain persons other than the licensee may secure the right to 
carry on the same firearms or ammunition business at the same address 
shown on, and for the remainder of the term of, a current license. Such 
persons are:
    (1) The surviving spouse or child, or executor, administrator, or 
other legal representative of a deceased licensee; and
    (2) A receiver or trustee in bankruptcy, or an assignee for benefit 
of creditors.
    (b) In order to secure the right provided by this section, the 
person or persons continuing the business shall furnish the license for 
that business for endorsement of such succession to the Chief, National 
Licensing Center, within 30 days from the date on which the successor 
begins to carry on the business.

[33 FR 18555, Dec. 14, 1968. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55842, Sept. 28, 1979; T.D. ATF-290, 
54 FR 53055, Dec. 27, 1989]

[[Page 1158]]



Sec. 178.57  Discontinuance of business.

    (a) Where a firearm or ammunition business is either discontinued or 
succeeded by a new owner, the owner of the business discontinued or 
succeeded shall within 30 days thereof furnish to the Chief, National 
Licensing Center notification of the discontinuance or succession. (See 
also Sec. 178.127.)
    (b) Since section 922(v), Title 18, U.S.C., makes it unlawful to 
transfer or possess a semiautomatic assault weapon, except as provided 
in the law, any licensed manufacturer, licensed importer, or licensed 
dealer intending to discontinue business shall, prior to going out of 
business, transfer in compliance with the provisions of this part any 
semiautomatic assault weapon manufactured or imported after September 
13, 1994, to a person specified in Sec. 178.40(b), or, subject to the 
provisions of Secs. 178.40(c) and 178.132, a licensed manufacturer, a 
licensed importer, or a licensed dealer.
    (c) Since section 922(w), Title 18, U.S.C., makes it unlawful to 
transfer or possess a large capacity ammunition feeding device, except 
as provided in the law, any person who manufactures, imports, or deals 
in such devices and who intends to discontinue business shall, prior to 
going out of business, transfer in compliance with the provisions of 
this part any large capacity ammunition feeding device manufactured 
after September 13, 1994, to a person specified in Sec. 178.40a(b), or, 
subject to the provisions of Secs. 178.40a(c) and 178.132, a person who 
manufactures, imports, or deals in such devices.

[33 FR 18555, Dec. 14, 1968. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55842, Sept. 28, 1979; T.D. ATF-290, 
54 FR 53055, Dec. 27, 1989; T.D. ATF-363, 60 FR 17453, Apr. 6, 1995; 
T.D. ATF-383, 61 FR 39321, July 29, 1996]



Sec. 178.58  State or other law.

    A license issued under this part confers no right or privilege to 
conduct business or activity contrary to State or other law. The holder 
of such a license is not by reason of the rights and privileges granted 
by that license immune from punishment for operating a firearm or 
ammunition business or activity in violation of the provisions of any 
State or other law. Similarly, compliance with the provisions of any 
State or other law affords no immunity under Federal law or regulations.



Sec. 178.59  Abandoned application.

    Upon receipt of an incomplete or improperly executed application on 
ATF form 7 (5310.12), or ATF Form 8 (5310.11) Part II, the applicant 
shall be notified of the deficiency in the application. If the 
application is not corrected and returned within 30 days following the 
date of notification, the application shall be considered as having been 
abandoned and the license fee returned.

[T.D. ATF-135, 48 FR 24068, May 31, 1983]



Sec. 178.60  Certain continuances of business.

    A licensee who furnishes his license to the Chief, National 
Licensing Center for correction or endorsement in compliance with the 
provisions contained in this subpart may continue his operations while 
awaiting its return.

[33 FR 18555, Dec. 14, 1968, unless otherwise noted. Redesignated at 40 
FR 16835, Apr. 15, 1975, and amended by T.D. ATF-290, 54 FR 53054, Dec. 
27, 1989]



                     Subpart E--License Proceedings



Sec. 178.71  Denial of an application for license.

    Whenever the Director of Industry Operations has reason to believe 
that an applicant is not qualified to receive a license under the 
provisions of Sec. 178.47, he may issue a notice of denial, on Form 
4498, to the applicant. The notice shall set forth the matters of fact 
and law relied upon in determining that the application should be 
denied, and shall afford the applicant 15 days from the date of receipt 
of the notice in which to request a hearing to review the denial. If no 
request for a hearing is filed within such time, the application shall 
be disapproved and a copy, so marked, shall be returned to the 
applicant.

[33 FR 18555, Dec. 14, 1968. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-270, 53 FR 10495, Mar. 31, 1988]

[[Page 1159]]



Sec. 178.72  Hearing after application denial.

    If the applicant for an original or renewal license desires a 
hearing to review the denial of his application, he shall file a request 
therefor, in duplicate, with the Director of Industry Operations within 
15 days after receipt of the notice of denial. The request should 
include a statement of the reasons therefor. On receipt of the request, 
the Director of Industry Operations shall, as expeditiously as possible, 
make the necessary arrangements for the hearing and advise the applicant 
of the date, time, location, and the name of the officer before whom the 
hearing will be held. Such notification shall be made not less than 10 
days in advance of the date set for the hearing. On conclusion of the 
hearing and consideration of all relevant facts and circumstances 
presented by the applicant or his representative, the Director of 
Industry Operations shall render his decision confirming or reversing 
the denial of the application. If the decision is that the denial should 
stand, a certified copy of the Director of Industry Operations findings 
and conclusions shall be furnished to the applicant with a final notice 
of denial, Form 4501. A copy of the application, marked ``Disapproved,'' 
will be returned to the applicant. If the decision is that the license 
applied for should be issued, the applicant shall be so notified, in 
writing, and the license shall be issued as provided by Sec. 178.47.



Sec. 178.73  Notice of revocation, suspension, or imposition of civil fine.

    (a) Basis for action. Whenever the Director of Industry Operations 
has reason to believe that a licensee has willfully violated any 
provision of the Act or this part, a notice of revocation of the 
license, ATF Form 4500, may be issued. In addition, a notice of 
revocation, suspension, or imposition of a civil fine may be issued on 
ATF Form 4500 whenever the Director of Industry Operations has reason to 
believe that a licensee has knowingly transferred a firearm to an 
unlicensed person and knowingly failed to comply with the requirements 
of 18 U.S.C. 922(t)(1) with respect to the transfer and, at the time 
that the transferee most recently proposed the transfer, the national 
instant criminal background check system was operating and information 
was available to the system demonstrating that the transferee's receipt 
of a firearm would violate 18 U.S.C. 922(g) or 922(n) or State law.
    (b) Issuance of notice. The notice shall set forth the matters of 
fact constituting the violations specified, dates, places, and the 
sections of law and regulations violated. The Director of Industry 
Operations shall afford the licensee 15 days from the date of receipt of 
the notice in which to request a hearing prior to suspension or 
revocation of the license, or imposition of a civil fine. If the 
licensee does not file a timely request for a hearing, the Director of 
Industry Operations shall issue a final notice of suspension or 
revocation and/or imposition of a civil fine on ATF Form 4501, as 
provided in Sec. 178.74.

[T.D. ATF-415, 63 FR 58278, Oct. 29, 1998]



Sec. 178.74  Request for hearing after notice of suspension, revocation, or imposition of civil fine.

    If a licensee desires a hearing after receipt of a notice of 
suspension or revocation of a license, or imposition of a civil fine, 
the licensee shall file a request, in duplicate, with the Director of 
Industry Operations within 15 days after receipt of the notice of 
suspension or revocation of a license, or imposition of a civil fine. On 
receipt of such request, the Director of Industry Operations shall, as 
expeditiously as possible, make necessary arrangements for the hearing 
and advise the licensee of the date, time, location and the name of the 
officer before whom the hearing will be held. Such notification shall be 
made no less than 10 days in advance of the date set for the hearing. On 
conclusion of the hearing and consideration of all the relevant 
presentations made by the licensee or the licensee's representative, the 
Director of Industry Operations shall render a decision and shall 
prepare a brief summary of the findings and conclusions on which the 
decision is based. If the decision is that the license should be 
revoked, or, in actions under 18 U.S.C. 922(t)(5), that the license 
should be revoked or suspended, and/or that a civil fine should be 
imposed, a certified copy of the summary

[[Page 1160]]

shall be furnished to the licensee with the final notice of revocation, 
suspension, or imposition of a civil fine on ATF Form 4501. If the 
decision is that the license should not be revoked, or in actions under 
18 U.S.C. 922(t)(5), that the license should not be revoked or 
suspended, and a civil fine should not be imposed, the licensee shall be 
notified in writing.

[T.D. ATF-415, 63 FR 58278, Oct. 29, 1998]



Sec. 178.75  Service on applicant or licensee.

    All notices and other documents required to be served on an 
applicant or licensee under this subpart shall be served by certified 
mail or by personal delivery. Where service is by certified mail, a 
signed duplicate original copy of the formal document shall be mailed, 
with return receipt requested, to the applicant or licensee at the 
address stated in his application or license, or at his last known 
address. Where service is by personal delivery, a signed duplicate 
original copy of the formal document shall be delivered to the applicant 
or licensee, or, in the case of a corporation, partnership, or 
association, by delivering it to an officer, manager, or general agent 
thereof, or to its attorney of record.

[33 FR 18555, Dec. 14, 1968. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and further redesignated by T.D. ATF-241, 51 FR 39619, Oct. 29, 1986; 
T.D. ATF-270, 53 FR 10496, Mar. 31, 1988]]



Sec. 178.76  Representation at a hearing.

    An applicant or licensee may be represented by an attorney, 
certified public accountant, or other person recognized to practice 
before the Bureau of Alcohol, Tobacco and Firearms as provided in 31 CFR 
Part 8 (Practice Before the Bureau of Alcohol, Tobacco and Firearms), if 
he has otherwise complied with the applicable requirements of 26 CFR 
601.521 through 601.527 (conference and practice requirements for 
alcohol, tobacco, and firearms activities) of this chapter. The Director 
of Industry Operations may be represented in proceedings by an attorney 
in the office of the Assistant Chief Counsel or Division Counsel who is 
authorized to execute and file motions, briefs and other papers in the 
proceeding, on behalf of the Director of Industry Operations, in his own 
name as ``Attorney for the Government.''

[33 FR 18555, Dec. 14, 1968. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55842, Sept. 28, 1979; T.D. ATF-92, 46 
FR 46916, Sept. 23, 1981. Further redesignated by T.D. ATF-241, 51 FR 
39619, Oct. 29, 1986; T.D. ATF-270, 53 FR 10496, Mar. 31, 1988]



Sec. 178.77  Designated place of hearing.

    The designated place of the hearing shall be a location convenient 
to the aggrieved party.

[T.D. ATF-270, 53 FR 10496, Mar. 31, 1988]



Sec. 178.78  Operations by licensee after notice.

    In any case where denial, suspension, or revocation proceedings are 
pending before the Bureau of Alcohol, Tobacco and Firearms, or notice of 
denial, suspension, or revocation has been served on the licensee and he 
has filed timely request for a hearing, the license in the possession of 
the licensee shall remain in effect even though such license has 
expired, or the suspension or revocation date specified in the notice of 
revocation on Form 4500 served on the licensee has passed: Provided, 
That with respect to a license that has expired, the licensee has timely 
filed an application for the renewal of his license. If a licensee is 
dissatisfied with a posthearing decision revoking or suspending the 
license or denying the application or imposing a civil fine, as the case 
may be, he may, pursuant to 18 U.S.C. 923(f)(3), within 60 days after 
receipt of the final notice denying the application or revoking or 
suspending the license or imposing a civil fine, file a petition for 
judicial review of such action. Such petition should be filed with the 
U.S. district court for the district in which the applicant or licensee 
resides or has his principal place of business. In such case, when the 
Director of Industry Operations finds that justice so requires, he may 
postpone the effective date of suspension or revocation of a license or 
authorize continued operations under the expired license, as applicable, 
pending judicial review.

[T.D. ATF-415, 63 FR 58278, Oct. 29, 1998]

[[Page 1161]]



                     Subpart F--Conduct of Business



Sec. 178.91  Posting of license.

    Any license issued under this part shall be kept posted and kept 
available for inspection on the premises covered by the license.



Sec. 178.92  How must licensed manufacturers and licensed importers identify firearms, armor piercing ammunition, and large capacity ammunition feeding devices?

    (a)(1) Firearms. You, as a licensed manufacturer or licensed 
importer of firearms, must legibly identify each firearm manufactured or 
imported as follows:
    (i) By engraving, casting, stamping (impressing), or otherwise 
conspicuously placing or causing to be engraved, cast, stamped 
(impressed) or placed on the frame or receiver thereof an individual 
serial number. The serial number must be placed in a manner not 
susceptible of being readily obliterated, altered, or removed, and must 
not duplicate any serial number placed by you on any other firearm. For 
firearms manufactured or imported on and after January 30, 2002, the 
engraving, casting, or stamping (impressing) of the serial number must 
be to a minimum depth of .003 inch and in a print size no smaller than 
\1/16\ inch; and
    (ii) By engraving, casting, stamping (impressing), or otherwise 
conspicuously placing or causing to be engraved, cast, stamped 
(impressed) or placed on the frame, receiver, or barrel thereof certain 
additional information. This information must be placed in a manner not 
susceptible of being readily obliterated, altered, or removed. For 
firearms manufactured or imported on and after January 30, 2002, the 
engraving, casting, or stamping (impressing) of this information must be 
to a minimum depth of .003 inch. The additional information includes:
    (A) The model, if such designation has been made;
    (B) The caliber or gauge;
    (C) Your name (or recognized abbreviation) and also, when 
applicable, the name of the foreign manufacturer;
    (D) In the case of a domestically made firearm, the city and State 
(or recognized abbreviation thereof) where you as the manufacturer 
maintain your place of business; and
    (E) In the case of an imported firearm, the name of the country in 
which it was manufactured and the city and State (or recognized 
abbreviation thereof) where you as the importer maintain your place of 
business. For additional requirements relating to imported firearms, see 
Customs regulations at 19 CFR part 134.
    (2) Firearm frames or receivers. A firearm frame or receiver that is 
not a component part of a complete weapon at the time it is sold, 
shipped, or otherwise disposed of by you must be identified as required 
by this section.
    (3) Special markings for semiautomatic assault weapons, effective 
July 5, 1995. In the case of any semiautomatic assault weapon 
manufactured after September 13, 1994, you must mark the frame or 
receiver ``RESTRICTED LAW ENFORCEMENT/GOVERNMENT USE ONLY'' or, in the 
case of weapons manufactured for export, ``FOR EXPORT ONLY,'' in a 
manner not susceptible of being readily obliterated, altered, or 
removed. For weapons manufactured or imported on and after January 30, 
2002, the engraving, casting, or stamping (impressing) of the special 
markings prescribed in this paragraph (a)(3) must be to a minimum depth 
of .003 inch.
    (4) Exceptions. (i) Alternate means of identification. The Director 
may authorize other means of identification upon receipt of a letter 
application from you, submitted in duplicate, showing that such other 
identification is reasonable and will not hinder the effective 
administration of this part.
    (ii) Destructive devices. In the case of a destructive device, the 
Director may authorize other means of identifying that weapon upon 
receipt of a letter application from you, submitted in duplicate, 
showing that engraving, casting, or stamping (impressing) such a weapon 
would be dangerous or impracticable.
    (iii) Machine guns, silencers, and parts. Any part defined as a 
machine gun, firearm muffler, or firearm silencer in Sec. 178.11, that 
is not a component part of a complete weapon at the time it is sold, 
shipped, or otherwise disposed of by you, must be identified as required

[[Page 1162]]

by this section. The Director may authorize other means of 
identification of parts defined as machine guns other than frames or 
receivers and parts defined as mufflers or silencers upon receipt of a 
letter application from you, submitted in duplicate, showing that such 
other identification is reasonable and will not hinder the effective 
administration of this part.
    (5) Measurement of height and depth of markings. The depth of all 
markings required by this section will be measured from the flat surface 
of the metal and not the peaks or ridges. The height of serial numbers 
required by paragraph (a)(1)(i) of this section will be measured as the 
distance between the latitudinal ends of the character impression 
bottoms (bases).
    (b) Armor piercing ammunition--(1) Marking of ammunition. Each 
licensed manufacturer or licensed importer of armor piercing ammunition 
shall identify such ammunition by means of painting, staining or dying 
the exterior of the projectile with an opaque black coloring. This 
coloring must completely cover the point of the projectile and at least 
50 percent of that portion of the projectile which is visible when the 
projectile is loaded into a cartridge case.
    (2) Labeling of packages. Each licensed manufacturer or licensed 
importer of armor piercing ammunition shall clearly and conspicuously 
label each package in which armor piercing ammunition is contained, 
e.g., each box, carton, case, or other container. The label shall 
include the words ``ARMOR PIERCING'' in block letters at least \1/4\ 
inch in height. The lettering shall be located on the exterior surface 
of the package which contains information concerning the caliber or 
gauge of the ammunition. There shall also be placed on the same surface 
of the package in block lettering at least \1/8\ inch in height the 
words ``FOR GOVERNMENTAL ENTITIES OR EXPORTATION ONLY.'' The statements 
required by this subparagraph shall be on a contrasting background.
    (c) Large capacity ammunition feeding devices manufactured after 
September 13, 1994. (1) Each person who manufactures or imports any 
large capacity ammunition feeding device manufactured after September 
13, 1994, shall legibly identify each such device with a serial number. 
Such person may use the same serial number for all large capacity 
ammunition feeding devices produced.
    (i) Additionally, in the case of a domestically made large capacity 
ammunition feeding device, such device shall be marked with the name, 
city and State (or recognized abbreviation thereof) of the manufacturer;
    (ii) And in the case of an imported large capacity ammunition 
feeding device, such device shall be marked:
    (A) With the name of the manufacturer, country of origin, and,
    (B) Effective July 5, 1995, the name, city and State (or recognized 
abbreviation thereof) of the importer.
    (iii) Further, large capacity ammunition feeding devices 
manufactured after September 13, 1994, shall be marked ``RESTRICTED LAW 
ENFORCEMENT/GOVERNMENT USE ONLY'' or, in the case of devices 
manufactured or imported for export, effective July 5, 1995, ``FOR 
EXPORT ONLY.''
    (2) All markings required by this paragraph (c) shall be cast, 
stamped, or engraved on the exterior of the device. In the case of a 
magazine, the markings shall be placed on the magazine body.
    (3) Exceptions--(i) Metallic links. Persons who manufacture or 
import metallic links for use in the assembly of belted ammunition are 
only required to place the identification marks prescribed in paragraph 
(c)(1) of this section on the containers used for the packaging of the 
links.
    (ii) Alternate means of identification. The Director may authorize 
other means of identifying large capacity ammunition feeding devices 
upon receipt of a letter application, in duplicate, from the 
manufacturer or importer showing that such other identification is 
reasonable and will not hinder the effective administration of this 
part.

(Approved by the Office of Management and Budget under control number 
1512-0550)

[T.D. ATF-270, 53 FR 10496, Mar. 31, 1988, as amended by T.D. ATF-363, 
60 FR 17454, Apr. 6, 1995; T.D. ATF-383, 61 FR 39321, July 29, 1996; 
T.D. ATF-396, 63 FR 12646, Mar. 16, 1998; T.D. ATF-461, 66 FR 40600, 
Aug. 3, 2001]

[[Page 1163]]



Sec. 178.93  Authorized operations by a licensed collector.

    The license issued to a collector of curios or relics under the 
provisions of this part shall cover only transactions by the licensed 
collector in curios and relics. The collector's license is of no force 
or effect and a licensed collector is of the same status under the Act 
and this part as a nonlicensee with respect to (a) any acquisition or 
disposition of firearms other than curios or relics, or any 
transportation, shipment, or receipt of firearms other than curios or 
relics in interstate or foreign commerce, and (b) any transaction with a 
nonlicensee involving any firearm other than a curio or relic. (See also 
Sec. 178.50.) A collectors license is not necessary to receive or 
dispose of ammunition, and a licensed collector is not precluded by law 
from receiving or disposing of armor piercing ammunition. However, a 
licensed collector may not dispose of any ammunition to a person 
prohibited from receiving or possessing ammunition (see Sec. 178.99(c)). 
Any licensed collector who disposes of armor piercing ammunition must 
record the disposition as required by Sec. 178.125 (a) and (b).

[T.D. ATF-270, 53 FR 10496, Mar. 31, 1988]



Sec. 178.94  Sales or deliveries between licensees.

    A licensed importer, licensed manufacturer, or licensed dealer 
selling or otherwise disposing of firearms, and a licensed collector 
selling or otherwise disposing of curios or relics, to another licensee 
shall verify the identity and licensed status of the transferee prior to 
making the transaction. Verification shall be established by the 
transferee furnishing to the transferor a certified copy of the 
transferee's license and by such other means as the transferor deems 
necessary: Provided, That it shall not be required (a) for a transferee 
who has furnished a certified copy of its license to a transferor to 
again furnish such certified copy to that transferor during the term of 
the transferee's current license, (b) for a licensee to furnish a 
certified copy of its license to another licensee if a firearm is being 
returned either directly or through another licensee to such licensee 
and (c) for licensees of multilicensed business organizations to furnish 
certified copies of their licenses to other licensed locations operated 
by such organization: Provided further, That a multilicensed business 
organization may furnish to a transferor, in lieu of a certified copy of 
each license, a list, certified to be true, correct and complete, 
containing the name, address, license number, and the date of license 
expiration of each licensed location operated by such organization, and 
the transferor may sell or otherwise dispose of firearms as provided by 
this section to any licensee appearing on such list without requiring a 
certified copy of a license therefrom. A transferor licensee who has the 
certified information required by this section may sell or dispose of 
firearms to a licensee for not more than 45 days following the 
expiration date of the transferee's license.

(Approved by the Office of Management and Budget under control number 
1512-0387)

[T.D. ATF-270, 53 FR 10496, Mar. 31, 1988]



Sec. 178.95  Certified copy of license.

    The license furnished to each person licensed under the provisions 
of this part contains a purchasing certification statement. This 
original license may be reproduced and the reproduction then certified 
by the licensee for use pursuant to Sec. 178.94. If the licensee desires 
an additional copy of the license for certification (instead of making a 
reproduction of the original license), the licensee may submit a 
request, in writing, for a certified copy or copies of the license to 
the Chief, National Licensing Center. The request must set forth the 
name, trade name (if any) and address of the licensee, and the number of 
license copies desired. There is a charge of $1 for each copy. The fee 
paid for copies of the license must accompany the request for copies. 
The fee may be paid by (a) cash, or (b) money order or check made 
payable to the Bureau of Alcohol, Tobacco and Firearms.

(Approved by the Office of Management and Budget under control number 
1512-0387)

[T.D. ATF-270, 53 FR 10497, Mar. 31, 1988, as amended by T.D. ATF-290, 
54 FR 53055, Dec. 27, 1989]

[[Page 1164]]



Sec. 178.96  Out-of-State and mail order sales.

    (a) The provisions of this section shall apply when a firearm is 
purchased by or delivered to a person not otherwise prohibited by the 
Act from purchasing or receiving it.
    (b) A licensed importer, licensed manufacturer, or licensed dealer 
may sell a firearm that is not subject to the provisions of 
Sec. 178.102(a) to a nonlicensee who does not appear in person at the 
licensee's business premises if the nonlicensee is a resident of the 
same State in which the licensee's business premises are located, and 
the nonlicensee furnishes to the licensee the firearms transaction 
record, Form 4473, required by Sec. 178.124. The nonlicensee shall 
attach to such record a true copy of any permit or other information 
required pursuant to any statute of the State and published ordinance 
applicable to the locality in which he resides. The licensee shall prior 
to shipment or delivery of the firearm, forward by registered or 
certified mail (return receipt requested) a copy of the record, Form 
4473, to the chief law enforcement officer named on such record, and 
delay shipment or delivery of the firearm for a period of at least 7 
days following receipt by the licensee of the return receipt evidencing 
delivery of the copy of the record to such chief law enforcement 
officer, or the return of the copy of the record to him due to the 
refusal of such chief law enforcement officer to accept same in 
accordance with U.S. Postal Service regulations. The original Form 4473, 
and evidence of receipt or rejection of delivery of the copy of the Form 
4473 sent to the chief law enforcement officer shall be retained by the 
licensee as a part of the records required of him to be kept under the 
provisions of subpart H of this part.
    (c)(1) A licensed importer, licensed manufacturer, or licensed 
dealer may sell or deliver a rifle or shotgun, and a licensed collector 
may sell or deliver a rifle or shotgun that is a curio or relic to a 
nonlicensed resident of a State other than the State in which the 
licensee's place of business is located if--
    (i) The purchaser meets with the licensee in person at the 
licensee's premises to accomplish the transfer, sale, and delivery of 
the rifle or shotgun;
    (ii) The licensed importer, licensed manufacturer, or licensed 
dealer complies with the provisions of Sec. 178.102;
    (iii) The purchaser furnishes to the licensed importer, licensed 
manufacturer, or licensed dealer the firearms transaction record, Form 
4473, required by Sec. 178.124; and
    (iv) The sale, delivery, and receipt of the rifle or shotgun fully 
comply with the legal conditions of sale in both such States.
    (2) For purposes of paragraph (c) of this section, any licensed 
manufacturer, licensed importer, or licensed dealer is presumed, in the 
absence of evidence to the contrary, to have had actual knowledge of the 
State laws and published ordinances of both such States.

(Approved by the Office of Management and Budget under control number 
1512-0130)

[33 FR 18555, Dec. 14, 1968. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55842, Sept. 28, 1979; T.D. ATF-241, 
51 FR 39620, Oct. 29, 1986; T.D. ATF-270, 53 FR 10497, Mar. 31, 1988; 
T.D. ATF-354, 59 FR 7112, Feb. 14, 1994; T.D. ATF-415, 63 FR 58278, Oct. 
29, 1998]



Sec. 178.97  Loan or rental of firearms.

    (a) A licensee may lend or rent a firearm to any person for 
temporary use off the premises of the licensee for lawful sporting 
purposes: Provided, That the delivery of the firearm to such person is 
not prohibited by Sec. 178.99(b) or Sec. 178.99(c), the licensee 
complies with the requirements of Sec. 178.102, and the licensee records 
such loan or rental in the records required to be kept by him under 
Subpart H of this part.
    (b) A club, association, or similar organization temporarily 
furnishing firearms (whether by loan, rental, or otherwise) to 
participants in a skeet, trap, target, or similar shooting activity for 
use at the time and place such activity is held does not, unattended by 
other circumstances, cause such club, association, or similar 
organization to be engaged in the business of a dealer in firearms or as 
engaging in firearms transactions. Therefore, licensing and 
recordkeeping requirements contained in this part pertaining to firearms 
transactions would not apply to this

[[Page 1165]]

temporary furnishing of firearms for use on premises on which such an 
activity is conducted.

[T.D. ATF-415, 63 FR 58278, Oct. 29, 1998]



Sec. 178.98  Sales or deliveries of destructive devices and certain firearms.

    The sale or delivery by a licensee of any destructive device, 
machine gun, short-barreled shotgun, or short-barreled rifle, to any 
person other than another licensee who is licensed under this part to 
deal in such device or firearm, is prohibited unless the person to 
receive such device or firearm furnishes to the licensee a sworn 
statement setting forth
    (a) The reasons why there is a reasonable necessity for such person 
to purchase or otherwise acquire the device or weapon; and
    (b) That such person's receipt or possession of the device or weapon 
would be consistent with public safety. Such sworn statement shall be 
made on the application to transfer and register the firearm required by 
Part 179 of this chapter. The sale or delivery of the device or weapon 
shall not be made until the application for transfer is approved by the 
Director and returned to the licensee (transferor) as provided in Part 
179 of this chapter.

[T.D. ATF-270, 53 FR 10497, Mar. 31, 1988]



Sec. 178.99  Certain prohibited sales or deliveries.

    (a) Interstate sales or deliveries. A licensed importer, licensed 
manufacturer, licensed dealer, or licensed collector shall not sell or 
deliver any firearm to any person not licensed under this part and who 
the licensee knows or has reasonable cause to believe does not reside in 
(or if a corporation or other business entity, does not maintain a place 
of business in) the State in which the licensee's place of business or 
activity is located: Provided, That the foregoing provisions of this 
paragraph (1) shall not apply to the sale or delivery of a rifle or 
shotgun (curio or relic, in the case of a licensed collector) to a 
resident of a State other than the State in which the licensee's place 
of business or collection premises is located if the requirements of 
Sec. 178.96(c) are fully met, and (2) shall not apply to the loan or 
rental of a firearm to any person for temporary use for lawful sporting 
purposes (see Sec. 178.97).
    (b) Sales or deliveries to underaged persons. A licensed importer, 
licensed manufacturer, licensed dealer, or licensed collector shall not 
sell or deliver (1) any firearm or ammunition to any individual who the 
importer, manufacturer, dealer, or collector knows or has reasonable 
cause to believe is less than 18 years of age, and, if the firearm, or 
ammunition, is other than a shotgun or rifle, or ammunition for a 
shotgun or rifle, to any individual who the importer, manufacturer, 
dealer, or collector knows or has reasonable cause to believe is less 
than 21 years of age, or (2) any firearm to any person in any State 
where the purchase or possession by such person of such firearm would be 
in violation of any State law or any published ordinance applicable at 
the place of sale, delivery, or other disposition, unless the importer, 
manufacturer, dealer, or collector knows or has reasonable cause to 
believe that the purchase or possession would not be in violation of 
such State law or such published ordinance.
    (c) Sales or deliveries to prohibited categories of persons. A 
licensed manufacturer, licensed importer, licensed dealer, or licensed 
collector shall not sell or otherwise dispose of any firearm or 
ammunition to any person knowing or having reasonable cause to believe 
that such person:
    (1) Is, except as provided by Sec. 178.143, under indictment for, 
or, except as provided by Sec. 178.144, has been convicted in any court 
of a crime punishable by imprisonment for a term exceeding 1 year;
    (2) Is a fugitive from justice;
    (3) Is an unlawful user of or addicted to any controlled substance 
(as defined in section 102 of the Controlled Substance Act, 21 U.S.C. 
802);
    (4) Has been adjudicated as a mental defective or has been committed 
to any mental institution;
    (5) Is an alien illegally or unlawfully in the United States or, 
except as provided in Sec. 178.32(f), is a nonimmigrant alien: Provided, 
That the provisions of this paragraph (c)(5) do not apply to

[[Page 1166]]

any nonimmigrant alien if that alien is--
    (i) Admitted to the United States for lawful hunting or sporting 
purposes or is in possession of a hunting license or permit lawfully 
issued in the United States;
    (ii) An official representative of a foreign government who is 
either accredited to the United States Government or the Government's 
mission to an international organization having its headquarters in the 
United States or en route to or from another country to which that alien 
is accredited. This exception only applies if the firearm or ammunition 
is shipped, transported, possessed, or received in the representative's 
official capacity;
    (iii) An official of a foreign government or a distinguished foreign 
visitor who has been so designated by the Department of State. This 
exception only applies if the firearm or ammunition is shipped, 
transported, possessed, or received in the official's or visitor's 
official capacity, except if the visitor is a private individual who 
does not have an official capacity; or
    (iv) A foreign law enforcement officer of a friendly foreign 
government entering the United States on official law enforcement 
business;
    (6) Has been discharged from the Armed Forces under dishonorable 
conditions;
    (7) Who, having been a citizen of the United States, has renounced 
citizenship;
    (8) Is subject to a court order that restrains such person from 
harassing, stalking, or threatening an intimate partner of such person 
or child of such intimate partner or person, or engaging in other 
conduct that would place an intimate partner in reasonable fear of 
bodily injury to the partner or child, except that this paragraph shall 
only apply to a court order that--
    (i) Was issued after a hearing of which such person received actual 
notice, and at which such person had the opportunity to participate; and
    (ii)(A) Includes a finding that such person represents a credible 
threat to the physical safety of such intimate partner or child; or
    (B) By its terms explicitly prohibits the use, attempted use, or 
threatened use of physical force against such intimate partner or child 
that would reasonably be expected to cause bodily injury, or
    (9) Has been convicted of a misdemeanor crime of domestic violence.
    (d) Manufacture, importation, and sale of armor piercing ammunition 
by licensed importers and licensed manufacturers. A licensed importer or 
licensed manufacturer shall not import or manufacture armor piercing 
ammunition or sell or deliver such ammunition, except:
    (1) For use of the United States or any department or agency thereof 
or any State or any department, agency, or political subdivision 
thereof;
    (2) For the purpose of exportation; or
    (3) For the purpose of testing or experimentation authorized by the 
Director under the provisions of Sec. 178.149.
    (e) Transfer of armor piercing ammunition by licensed dealers. A 
licensed dealer shall not willfully transfer armor piercing ammunition: 
Provided, That armor piercing ammunition received and maintained by the 
licensed dealer as business inventory prior to August 28, 1986, may be 
transferred to any department or agency of the United States or any 
State or political subdivision thereof if a record of such ammunition is 
maintained in the form and manner prescribed by Sec. 178.125(c). Any 
licensed dealer who violates this paragraph is subject to license 
revocation. See subpart E of this part. For purposes of this paragraph, 
the Director shall furnish each licensed dealer information defining 
which projectiles are considered armor piercing. Such information may 
not be all-inclusive for purposes of the prohibition on manufacture, 
importation, or sale or delivery by a manufacturer or importer of such 
ammunition or 18 U.S.C. 929 relating to criminal misuse of such 
ammunition.

[T.D. ATF-270, 53 FR 10497, Mar. 31, 1988, as amended by T.D. ATF-363, 
60 FR 17454, Apr. 6, 1995; T.D. ATF-401, 63 FR 35523, June 30, 1998; 
T.D. ATF-471, 67 FR 5426, Feb. 5, 2002]



Sec. 178.100  Conduct of business away from licensed premises.

    (a)(1) A licensee may conduct business temporarily at a gun show or 
event as defined in paragraph (b) if the gun show or event is located in 
the

[[Page 1167]]

same State specified on the license: Provided, That such business shall 
not be conducted from any motorized or towed vehicle. The premises of 
the gun show or event at which the licensee conducts business shall be 
considered part of the licensed premises. Accordingly, no separate fee 
or license is required for the gun show or event locations. However, 
licensees shall comply with the provisions of Sec. 178.91 relating to 
posting of licenses (or a copy thereof) while conducting business at the 
gun show or event.
    (2) A licensed importer, manufacturer, or dealer may engage in the 
business of dealing in curio or relic firearms with another licensee at 
any location.
    (b) A gun show or an event is a function sponsored by any national, 
State, or local organization, devoted to the collection, competitive 
use, or other sporting use of firearms, or an organization or 
association that sponsors functions devoted to the collection, 
competitive use, or other sporting use of firearms in the community.
    (c) Licensees conducting business at locations other than the 
premises specified on their license under the provisions of paragraph 
(a) of this section shall maintain firearms records in the form and 
manner prescribed by subpart H of this part. In addition, records of 
firearms transactions conducted at such locations shall include the 
location of the sale or other disposition, be entered in the acquisition 
and disposition records of the licensee, and retained on the premises 
specified on the license.

[T.D. ATF-270, 53 FR 10498, Mar. 31, 1988, as amended by T.D. ATF-401, 
63 FR 35523, June 30, 1998]



Sec. 178.101  Record of transactions.

    Every licensee shall maintain firearms and armor piercing ammunition 
records in such form and manner as is prescribed by subpart H of this 
part.

[T.D. ATF-270, 53 FR 10498, Mar. 31, 1988]



Sec. 178.102  Sales or deliveries of firearms on and after November 30, 1998.

    (a) Background check. Except as provided in paragraph (d) of this 
section, a licensed importer, licensed manufacturer, or licensed dealer 
(the licensee) shall not sell, deliver, or transfer a firearm to any 
other person who is not licensed under this part unless the licensee 
meets the following requirements:
    (1) Before the completion of the transfer, the licensee has 
contacted NICS;
    (2)(i) NICS informs the licensee that it has no information that 
receipt of the firearm by the transferee would be in violation of 
Federal or State law and provides the licensee with a unique 
identification number; or
    (ii) Three business days (meaning days on which State offices are 
open) have elapsed from the date the licensee contacted NICS and NICS 
has not notified the licensee that receipt of the firearm by the 
transferee would be in violation of law; and
    (3) The licensee verifies the identity of the transferee by 
examining the identification document presented in accordance with the 
provisions of Sec. 178.124(c).

    Example for paragraph (a). A licensee contacts NICS on Thursday, and 
gets a ``delayed'' response. The licensee does not get a further 
response from NICS. If State offices are not open on Saturday and 
Sunday, 3 business days would have elapsed on the following Tuesday. The 
licensee may transfer the firearm on the next day, Wednesday.

    (b) Transaction number. In any transaction for which a licensee 
receives a transaction number from NICS (which shall include either a 
NICS transaction number or, in States where the State is recognized as a 
point of contact for NICS checks, a State transaction number), such 
number shall be recorded on a firearms transaction record, Form 4473, 
which shall be retained in the records of the licensee in accordance 
with the provisions of Sec. 178.129. This applies regardless of whether 
the transaction is approved or denied by NICS, and regardless of whether 
the firearm is actually transferred.
    (c) Time limitation on NICS checks. A NICS check conducted in 
accordance with paragraph (a) of this section may be relied upon by the 
licensee only for use in a single transaction, and for a period not to 
exceed 30 calendar days from the date that NICS was initially contacted. 
If the transaction is not

[[Page 1168]]

completed within the 30-day period, the licensee shall initiate a new 
NICS check prior to completion of the transfer.

    Example 1 for paragraph (c). A purchaser completes the Form 4473 on 
December 15, 1998, and a NICS check is initiated by the licensee on that 
date. The licensee is informed by NICS that the information available to 
the system does not indicate that receipt of the firearm by the 
transferee would be in violation of law, and a unique identification 
number is provided. However, the State imposes a 7-day waiting period on 
all firearms transactions, and the purchaser does not return to pick up 
the firearm until January 22, 1999. The licensee must conduct another 
NICS check before transferring the firearm to the purchaser.
    Example 2 for paragraph (c). A purchaser completes the Form 4473 on 
January 25, 1999, and arranges for the purchase of a single firearm. A 
NICS check is initiated by the licensee on that date. The licensee is 
informed by NICS that the information available to the system does not 
indicate that receipt of the firearm by the transferee would be in 
violation of law, and a unique identification number is provided. The 
State imposes a 7-day waiting period on all firearms transactions, and 
the purchaser returns to pick up the firearm on February 15, 1999. 
Before the licensee executes the Form 4473, and the firearm is 
transferred, the purchaser decides to purchase an additional firearm. 
The transfer of these two firearms is considered a single transaction; 
accordingly, the licensee may add the second firearm to the Form 4473, 
and transfer that firearm without conducting another NICS check.
    Example 3 for paragraph (c). A purchaser completes a Form 4473 on 
February 15, 1999. The licensee receives a unique identification number 
from NICS on that date, the Form 4473 is executed by the licensee, and 
the firearm is transferred. On February 20, 1999, the purchaser returns 
to the licensee's premises and wishes to purchase a second firearm. The 
purchase of the second firearm is a separate transaction; thus, a new 
NICS check must be initiated by the licensee.

    (d) Exceptions to NICS check. The provisions of paragraph (a) of 
this section shall not apply if--
    (1) The transferee has presented to the licensee a valid permit or 
license that--
    (i) Allows the transferee to possess, acquire, or carry a firearm;
    (ii) Was issued not more than 5 years earlier by the State in which 
the transfer is to take place; and
    (iii) The law of the State provides that such a permit or license is 
to be issued only after an authorized government official has verified 
that the information available to such official does not indicate that 
possession of a firearm by the transferee would be in violation of 
Federal, State, or local law: Provided, That on and after November 30, 
1998, the information available to such official includes the NICS;
    (2) The firearm is subject to the provisions of the National 
Firearms Act and has been approved for transfer under 27 CFR part 179; 
or
    (3) On application of the licensee, in accordance with the 
provisions of Sec. 178.150, the Director has certified that compliance 
with paragraph (a)(1) of this section is impracticable.
    (e) The document referred to in paragraph (d)(1) of this section (or 
a copy thereof) shall be retained or the required information from the 
document shall be recorded on the firearms transaction record in 
accordance with the provisions of Sec. 178.131.

(Approved by the Office of Management and Budget under control number 
1512-0544)

[T.D. ATF-415, 63 FR 58279, Oct. 29, 1998]



Sec. 178.103  Posting of signs and written notification to purchasers of handguns.

    (a) Each licensed importer, manufacturer, dealer, or collector who 
delivers a handgun to a nonlicensee shall provide such nonlicensee with 
written notification as described in paragraph (b) of this section.
    (b) The written notification (ATF I 5300.2) required by paragraph 
(a) of this section shall state as follows:

    (1) The misuse of handguns is a leading contributor to juvenile 
violence and fatalities.
    (2) Safely storing and securing firearms away from children will 
help prevent the unlawful possession of handguns by juveniles, stop 
accidents, and save lives.
    (3) Federal law prohibits, except in certain limited circumstances, 
anyone under 18 years of age from knowingly possessing a handgun, or any 
person from transferring a handgun to a person under 18.
    (4) A knowing violation of the prohibition against selling, 
delivering, or otherwise transferring a handgun to a person under the 
age of 18 is, under certain circumstances, punishable by up to 10 years 
in prison.


[[Page 1169]]



                               FEDERAL LAW

    The Gun Control Act of 1968, 18 U.S.C. Chapter 44, provides in 
pertinent part as follows:

                            18 U.S.C. 922(x)

    (x)(1) It shall be unlawful for a person to sell, deliver, or 
otherwise transfer to a person who the transferor knows or has 
reasonable cause to believe is a juvenile--
    (A) a handgun; or
    (B) ammunition that is suitable for use only in a handgun.
    (2) It shall be unlawful for any person who is a juvenile to 
knowingly possess--
    (A) a handgun; or
    (B) ammunition that is suitable for use only in a handgun.
    (3) This subsection does not apply to--
    (A) a temporary transfer of a handgun or ammunition to a juvenile or 
to the possession or use of a handgun or ammunition by a juvenile if the 
handgun and ammunition are possessed and used by the juvenile--
    (i) in the course of employment, in the course of ranching or 
farming related to activities at the residence of the juvenile (or on 
property used for ranching or farming at which the juvenile, with the 
permission of the property owner or lessee, is performing activities 
related to the operation of the farm or ranch), target practice, 
hunting, or a course of instruction in the safe and lawful use of a 
handgun;
    (ii) with the prior written consent of the juvenile's parent or 
guardian who is not prohibited by Federal, State, or local law from 
possessing a firearm, except--
    (I) during transportation by the juvenile of an unloaded handgun in 
a locked container directly from the place of transfer to a place at 
which an activity described in clause (i) is to take place and 
transportation by the juvenile of that handgun, unloaded and in a locked 
container, directly from the place at which such an activity took place 
to the transferor; or
    (II) with respect to ranching or farming activities as described in 
clause (i) a juvenile may possess and use a handgun or ammunition with 
the prior written approval of the juvenile's parent or legal guardian 
and at the direction of an adult who is not prohibited by Federal, 
State, or local law from possessing a firearm;
    (iii) the juvenile has the prior written consent in the juvenile's 
possession at all times when a handgun is in the possession of the 
juvenile; and
    (iv) in accordance with State and local law;
    (B) a juvenile who is a member of the Armed Forces of the United 
States or the National Guard who possesses or is armed with a handgun in 
the line of duty;
    (C) a transfer by inheritance of title (but not possession) of a 
handgun or ammunition to a juvenile; or
    (D) the possession of a handgun or ammunition by a juvenile taken in 
defense of the juvenile or other persons against an intruder into the 
residence of the juvenile or a residence in which the juvenile is an 
invited guest.
    (4) A handgun or ammunition, the possession of which is transferred 
to a juvenile in circumstances in which the transferor is not in 
violation of this subsection shall not be subject to permanent 
confiscation by the Government if its possession by the juvenile 
subsequently becomes unlawful because of the conduct of the juvenile, 
but shall be returned to the lawful owner when such handgun or 
ammunition is no longer required by the Government for the purposes of 
investigation or prosecution.
    (5) For purposes of this subsection, the term ``juvenile'' means a 
person who is less than 18 years of age.
    (6)(A) In a prosecution of a violation of this subsection, the court 
shall require the presence of a juvenile defendant's parent or legal 
guardian at all proceedings.
    (B) The court may use the contempt power to enforce subparagraph 
(A).
    (C) The court may excuse attendance of a parent or legal guardian of 
a juvenile defendant at a proceeding in a prosecution of a violation of 
this subsection for good cause shown.

                           18 U.S.C. 924(a)(6)

    (6)(A)(i) A juvenile who violates section 922(x) shall be fined 
under this title, imprisoned not more than 1 year, or both, except that 
a juvenile described in clause (ii) shall be sentenced to probation on 
appropriate conditions and shall not be incarcerated unless the juvenile 
fails to comply with a condition of probation.

    (ii) A juvenile is described in this clause if--
    (I) the offense of which the juvenile is charged is possession of a 
handgun or ammunition in violation of section 922(x)(2); and
    (II) the juvenile has not been convicted in any court of an offense 
(including an offense under section 922(x) or a similar State law, but 
not including any other offense consisting of conduct that if engaged in 
by an adult would not constitute an offense) or adjudicated as a 
juvenile delinquent for conduct that if engaged in by an adult would 
constitute an offense.
    (B) A person other than a juvenile who knowingly violates section 
922(x)--
    (i) shall be fined under this title, imprisoned not more than 1 
year, or both; and
    (ii) if the person sold, delivered, or otherwise transferred a 
handgun or ammunition to a juvenile knowing or having reasonable

[[Page 1170]]

cause to know that the juvenile intended to carry or otherwise possess 
or discharge or otherwise use the handgun or ammunition in the 
commission of a crime of violence, shall be fined under this title, 
imprisoned not more than 10 years, or both.

    (c) This written notification shall be delivered to the nonlicensee 
on ATF I 5300.2, or in the alternative, the same written notification 
may be delivered to the nonlicensee on another type of written 
notification, such as a manufacturer's or importer's brochure 
accompanying the handgun; a manufacturer's or importer's operational 
manual accompanying the handgun; or a sales receipt or invoice applied 
to the handgun package or container delivered to a nonlicensee. Any 
written notification delivered to a nonlicensee other than on ATF I 
5300.2 shall include the language set forth in paragraph (b) of this 
section in its entirety. Any written notification other than ATF I 
5300.2 shall be legible, clear, and conspicuous, and the required 
language shall appear in type size no smaller than 10-point type.
    (d) Except as provided in paragraph (f) of this section, each 
licensed importer, manufacturer, or dealer who delivers a handgun to a 
nonlicensee shall display at its licensed premises (including temporary 
business locations at gun shows) a sign as described in paragraph (e) of 
this section. The sign shall be displayed where customers can readily 
see it. Licensed importers, manufacturers, and dealers will be provided 
with such signs by ATF. Replacement signs may be requested from the ATF 
Distribution Center.
    (e) The sign (ATF I 5300.1) required by paragraph (d) of this 
section shall state as follows:

    (1) The misuse of handguns is a leading contributor to juvenile 
violence and fatalities.
    (2) Safely storing and securing firearms away from children will 
help prevent the unlawful possession of handguns by juveniles, stop 
accidents, and save lives.
    (3) Federal law prohibits, except in certain limited circumstances, 
anyone under 18 years of age from knowingly possessing a handgun, or any 
person from transferring a handgun to a person under 18.
    (4) A knowing violation of the prohibition against selling, 
delivering, or otherwise transferring a handgun to a person under the 
age of 18 is, under certain circumstances, punishable by up to 10 years 
in prison.

    Note: ATF I 5300.2 provides the complete language of the statutory 
prohibitions and exceptions provided in 18 U.S.C. 922(x) and the penalty 
provisions of 18 U.S.C. 924(a)(6). The Federal firearms licensee posting 
this sign will provide you with a copy of this publication upon request. 
Requests for additional copies of ATF I 5300.2 should be mailed to the 
ATF Distribution Center, P.O. Box 5950, Springfield, Virginia 22150-
5950.

    (f) The sign required by paragraph (d) of this section need not be 
posted on the premises of any licensed importer, manufacturer, or dealer 
whose only dispositions of handguns to nonlicensees are to nonlicensees 
who do not appear at the licensed premises and the dispositions 
otherwise comply with the provisions of this part.

[T.D. ATF-402, 63 FR 37742, July 13, 1998]



                         Subpart G--Importation



Sec. 178.111  General.

    (a) Section 922(a)(3) of the Act makes it unlawful, with certain 
exceptions not pertinent here, for any person other than a licensee to 
transport into or receive in the State where the person resides any 
firearm purchased or otherwise obtained by the person outside of that 
State. However, section 925(a)(4) provides a limited exception for the 
transportation, shipment, receipt or importation of certain firearms and 
ammunition by certain members of the United States Armed Forces. Section 
922(1) of the Act makes it unlawful for any person knowingly to import 
or bring into the United States or any possession thereof any firearm or 
ammunition except as provided by section 925(d) of the Act, which 
section provides standards for importing or bringing firearms or 
ammunition into the United States. Section 925(d) also provides 
standards for importing or bringing firearm barrels into the United 
States. Accordingly, no firearm, firearm barrel, or ammunition may be 
imported or brought into the United States except as provided by this 
part.
    (b) Where a firearm, firearm barrel, or ammunition is imported and 
the authorization for importation required by this subpart has not been 
obtained by

[[Page 1171]]

the person importing same, such person shall:
    (1) Store, at the person's expense, such firearm, firearm barrel, or 
ammunition at a facility designated by U.S Customs or the Director of 
Industry Operations to await the issuance of the required authorization 
or other disposition; or
    (2) Abandon such firearm, firearm barrel, or ammunition to the U.S. 
Government; or
    (3) Export such firearm, firearm barrel, or ammunition.
    (c) Any inquiry relative to the provisions or procedures under this 
subpart, other than that pertaining to the payment of customs duties or 
the release from Customs custody of firearms, firearm barrels, or 
ammunition authorized by the Director to be imported, shall be directed 
to the Director of Industry Operations for reply.

[T.D. ATF-270, 53 FR 10498, Mar. 31, 1988]



Sec. 178.112  Importation by a licensed importer.

    (a) No firearm, firearm barrel, or ammunition shall be imported or 
brought into the United States by a licensed importer (as defined in 
Sec. 178.11) unless the Director has authorized the importation of the 
firearm, firearm barrel, or ammunition.
    (b)(1) An application for a permit, ATF Form 6--Part I, to import or 
bring a firearm, firearm barrel, or ammunition into the United States or 
a possession thereof under this section must be filed, in triplicate, 
with the Director. The application must be signed and dated and must 
contain the information requested on the form, including:
    (i) The name, address, telephone number, and license number 
(including expiration date) of the importer;
    (ii) The country from which the firearm, firearm barrel, or 
ammunition is to be imported;
    (iii) The name and address of the foreign seller and foreign 
shipper;
    (iv) A description of the firearm, firearm barrel, or ammunition to 
be imported, including:
    (A) The name and address of the manufacturer;
    (B) The type (e.g., rifle, shotgun, pistol, revolver and, in the 
case of ammunition only, ball, wadcutter, shot, etc.);
    (C) The caliber, gauge, or size;
    (D) The model;
    (E) The barrel length, if a firearm or firearm barrel (in inches);
    (F) The overall length, if a firearm (in inches);
    (G) The serial number, if known;
    (H) Whether the firearm is new or used;
    (I) The quantity;
    (J) The unit cost of the firearm, firearm barrel, or ammunition to 
be imported;
    (v) The specific purpose of importation, including final recipient 
information if different from the importer;
    (vi) Verification that if a firearm, it will be identified as 
required by this part; and
    (vii)(A) If a firearm or ammunition imported or brought in for 
scientific or research purposes, a statement describing such purpose; or
    (B) If a firearm or ammunition for use in connection with 
competition or training pursuant to Chapter 401 of Title 10, U.S.C., a 
statement describing such intended use; or
    (C) If an unserviceable firearm (other than a machine gun) being 
imported as a curio or museum piece, a description of how it was 
rendered unserviceable and an explanation of why it is a curio or museum 
piece; or
    (D) If a firearm other than a surplus military firearm, of a type 
that does not fall within the definition of a firearm under section 
5845(a) of the Internal Revenue Code of 1986, and is for sporting 
purposes, an explanation of why the firearm is generally recognized as 
particularly suitable for or readily adaptable to sporting purposes; or
    (E) If ammunition being imported for sporting purposes, a statement 
why the ammunition is particularly suitable for or readily adaptable to 
sporting purposes; or
    (F) If a firearm barrel for a handgun, an explanation why the 
handgun is generally recognized as particularly suitable for or readily 
adaptable to sporting purposes.(2)(i) If the Director approves the 
application, such approved application will serve as the permit to 
import the firearm, firearm barrel, or ammunition described therein, and 
importation of such firearms, firearm barrels, or ammunition may

[[Page 1172]]

continue to be made by the licensed importer under the approved 
application (permit) during the period specified thereon. The Director 
will furnish the approved application (permit) to the applicant and 
retain two copies thereof for administrative use.
    (ii) If the Director disapproves the application, the licensed 
importer will be notified of the basis for the disapproval.
    (c) A firearm, firearm barrel, or ammunition imported or brought 
into the United States or a possession thereof under the provisions of 
this section by a licensed importer may be released from Customs custody 
to the licensed importer upon showing that the importer has obtained a 
permit from the Director for the importation of the firearm, firearm 
barrel, or ammunition to be released. The importer will also submit to 
Customs a copy of the export license authorizing the export of the 
firearm, firearm barrel, or ammunition from the exporting country. If 
the exporting country does not require issuance of an export license, 
the importer must submit a certification, under penalty of perjury, to 
that effect.
    (1) In obtaining the release from Customs custody of a firearm, 
firearm barrel, or ammunition authorized by this section to be imported 
through the use of a permit, the licensed importer will prepare ATF Form 
6A, in duplicate, and furnish the original ATF Form 6A to the Customs 
officer releasing the firearm, firearm barrel, or ammunition. The 
Customs officer will, after certification, forward the ATF Form 6A to 
the address specified on the form.
    (2) The ATF Form 6A must contain the information requested on the 
form, including:
    (i) The name, address, and license number of the importer;
    (ii) The name of the manufacturer of the firearm, firearm barrel, or 
ammunition;
    (iii) The country of manufacture;
    (iv) The type;
    (v) The model;
    (vi) The caliber, gauge, or size;
    (vii) The serial number in the case of firearms, if known; and
    (viii) The number of firearms, firearm barrels, or rounds of 
ammunition released.
    (d) Within 15 days of the date of release from Customs custody, the 
licensed importer must:
    (1) Forward to the address specified on the form a copy of ATF Form 
6A on which must be reported any error or discrepancy appearing on the 
ATF Form 6A certified by Customs and serial numbers if not previously 
provided on ATF Form 6A;
    (2) Pursuant to Sec. 178.92, place all required identification data 
on each imported firearm if same did not bear such identification data 
at the time of its release from Customs custody; and
    (3) Post in the records required to be maintained by the importer 
under subpart H of this part all required information regarding the 
importation.

(Paragraph (b) approved by the Office of Management and Budget under 
control number 1512-0017; paragraphs (c) and (d) approved by the Office 
of Management and Budget under control number 1512-0019)

[T.D. ATF-270, 53 FR 10498, Mar. 31, 1988, as amended by T.D. ATF-426, 
65 FR 38198, June 20, 2000]



Sec. 178.113  Importation by other licensees.

    (a) No person other than a licensed importer (as defined in 
Sec. 178.11) shall engage in the business of importing firearms or 
ammunition. Therefore, no firearm or ammunition shall be imported or 
brought into the United States or a possession thereof by any licensee 
other than a licensed importer unless the Director issues a permit 
authorizing the importation of the firearm or ammunition. No barrel for 
a handgun not generally recognized as particularly suitable for or 
readily adaptable to sporting purposes shall be imported or brought into 
the United States or a possession thereof by any person. Therefore, no 
firearm barrel shall be imported or brought into the United States or 
possession thereof by any licensee other than a licensed importer unless 
the Director issues a permit authorizing the importation of the firearm 
barrel.
    (b)(1) An application for a permit, ATF Form 6--Part I, to import or 
bring a firearm, firearm barrel, or ammunition into the United States or 
a possession thereof by a licensee, other than a licensed importer, must 
be filed, in

[[Page 1173]]

triplicate, with the Director. The application must be signed and dated 
and must contain the information requested on the form, including:
    (i) The name, address, telephone number, and license number 
(including expiration date) of the applicant;
    (ii) The country from which the firearm, firearm barrel, or 
ammunition is to be imported;
    (iii) The name and address of the foreign seller and foreign 
shipper;
    (iv) A description of the firearm, firearm barrel, or ammunition to 
be imported, including:
    (A) The name and address of the manufacturer;
    (B) The type (e.g., rifle, shotgun, pistol, revolver and, in the 
case of ammunition only, ball, wadcutter, shot, etc.);
    (C) The caliber, gauge, or size;
    (D) The model;
    (E) The barrel length, if a firearm or firearm barrel (in inches);
    (F) The overall length, if a firearm (in inches);
    (G) The serial number, if known;
    (H) Whether the firearm is new or used;
    (I) The quantity;
    (J) The unit cost of the firearm, firearm barrel, or ammunition to 
be imported;
    (v) The specific purpose of importation, including final recipient 
information if different from the applicant; and
    (vi)(A) If a firearm or ammunition imported or brought in for 
scientific or research purposes, a statement describing such purpose; or
    (B) If a firearm or ammunition for use in connection with 
competition or training pursuant to Chapter 401 of Title 10, U.S.C., a 
statement describing such intended use; or
    (C) If an unserviceable firearm (other than a machine gun) being 
imported as a curio or museum piece, a description of how it was 
rendered unserviceable and an explanation of why it is a curio or museum 
piece; or
    (D) If a firearm other than a surplus military firearm, of a type 
that does not fall within the definition of a firearm under section 
5845(a) of the Internal Revenue Code of 1986, and is for sporting 
purposes, an explanation of why the firearm is generally recognized as 
particularly suitable for or readily adaptable to sporting purposes; or
    (E) If ammunition being imported for sporting purposes, a statement 
why the ammunition is particularly suitable for or readily adaptable to 
sporting purposes; or
    (F) If a firearm barrel for a handgun, an explanation why the 
handgun is generally recognized as particularly suitable for or readily 
adaptable to sporting purposes.
    (2)(i) If the Director approves the application, such approved 
application will serve as the permit to import the firearm, firearm 
barrel, or ammunition described therein, and importation of such 
firearms, firearm barrels, or ammunition may continue to be made by the 
applicant under the approved application (permit) during the period 
specified thereon. The Director will furnish the approved application 
(permit) to the applicant and retain two copies thereof for 
administrative use.
    (ii) If the Director disapproves the application, the applicant will 
be notified of the basis for the disapproval.
    (c) A firearm, firearm barrel, or ammunition imported or brought 
into the United States or a possession thereof under the provisions of 
this section may be released from Customs custody to the licensee upon 
showing that the licensee has obtained a permit from the Director for 
the importation of the firearm, firearm barrel, or ammunition to be 
released.
    (1) In obtaining the release from Customs custody of a firearm, 
firearm barrel, or ammunition authorized by this section to be imported 
through the use of a permit, the licensee will prepare ATF Form 6A, in 
duplicate, and furnish the original ATF Form 6A to the Customs officer 
releasing the firearm, firearm barrel, or ammunition. The Customs 
officer will, after certification, forward the ATF Form 6A to the 
address specified on the form.
    (2) The ATF Form 6A must contain the information requested on the 
form, including:
    (i) The name, address, and license number of the licensee;
    (ii) The name of the manufacturer of the firearm, firearm barrel, or 
ammunition;
    (iii) The country of manufacture;

[[Page 1174]]

    (iv) The type;
    (v) The model;
    (vi) The caliber, gauge, or size;
    (vii) The serial number in the case of firearms; and
    (viii) The number of firearms, firearm barrels, or rounds of 
ammunition released.

(Paragraph (b) approved by the Office of Management and Budget under 
control number 1512-0017; paragraph (c) approved by the Office of 
Management and Budget under control number 1512-0019)

[T.D. ATF-270, 53 FR 10499, Mar. 31, 1988, as amended by T.D. ATF-426, 
65 FR 38199, June 20, 2000]



Sec. 178.113a  Importation of firearm barrels by nonlicensees.

    (a) A permit will not be issued for a firearm barrel for a handgun 
not generally recognized as particularly suitable for or readily 
adaptable to sporting purposes. No firearm barrel shall be imported or 
brought into the United States or possession thereof by any nonlicensee 
unless the Director issues a permit authorizing the importation of the 
firearm barrel.
    (b)(1) An application for a permit, ATF Form 6--Part I, to import or 
bring a firearm barrel into the United States or a possession thereof 
under this section must be filed, in triplicate, with the Director. The 
application must be signed and dated and must contain the information 
requested on the form, including:
    (i) The name, address, and telephone number of the applicant;
    (ii) The country from which the firearm barrel is to be imported;
    (iii) The name and address of the foreign seller and foreign 
shipper;
    (iv) A description of the firearm barrel to be imported, including:
    (A) The name and address of the manufacturer;
    (B) The type (e.g., rifle, shotgun, pistol, revolver);
    (C) The caliber, gauge, or size;
    (D) The model;
    (E) The barrel length (in inches);
    (F) The quantity;
    (G) The unit cost of the firearm barrel;
    (v) The specific purpose of importation, including final recipient 
information if different from the importer; and
    (vi) If a handgun barrel, an explanation of why the barrel is for a 
handgun that is generally recognized as particularly suitable for or 
readily adaptable to sporting purposes.
    (2)(i) If the Director approves the application, such approved 
application will serve as the permit to import the firearm barrel, and 
importation of such firearm barrels may continue to be made by the 
applicant under the approved application (permit) during the period 
specified thereon. The Director will furnish the approved application 
(permit) to the applicant and retain two copies thereof for 
administrative use.
    (ii) If the Director disapproves the application, the applicant will 
be notified of the basis for the disapproval.
    (c) A firearm barrel imported or brought into the United States or a 
possession thereof under the provisions of this section may be released 
from Customs custody to the person importing the firearm barrel upon 
showing that the person has obtained a permit from the Director for the 
importation of the firearm barrel to be released.
    (1) In obtaining the release from Customs custody of a firearm 
barrel authorized by this section to be imported through the use of a 
permit, the person importing the firearm barrel will prepare ATF Form 
6A, in duplicate, and furnish the original ATF Form 6A to the Customs 
officer releasing the firearm barrel. The Customs officer will, after 
certification, forward the ATF Form 6A to the address specified on the 
form.
    (2) The ATF Form 6A must contain the information requested on the 
form, including:
    (i) The name and address of the person importing the firearm barrel;
    (ii) The name of the manufacturer of the firearm barrel;
    (iii) The country of manufacture;
    (iv) The type;
    (v) The model;
    (vi) The caliber or gauge of the firearm barrel so released; and

[[Page 1175]]

    (vii) The number of firearm barrels released.

(Paragraph (b) approved by the Office of Management and Budget under 
control number 1512-0017; paragraph (c) approved by the Office of 
Management and Budget under control number 1512-0019)

[T.D. ATF-270, 53 FR 10499, Mar. 31, 1988, as amended by T.D. ATF-426, 
65 FR 38200, June 20, 2000]



Sec. 178.114  Importation by members of the U.S. Armed Forces.

    (a) The Director may issue a permit authorizing the importation of a 
firearm or ammunition into the United States to the place of residence 
of any military member of the U.S. Armed Forces who is on active duty 
outside the United States, or who has been on active duty outside the 
United States within the 60-day period immediately preceding the 
intended importation: Provided, That such firearm or ammunition is 
generally recognized as particularly suitable for or readily adaptable 
to sporting purposes and is intended for the personal use of such 
member.
    (1) An application for a permit, ATF Form 6--Part II, to import a 
firearm or ammunition into the United States under this section must be 
filed, in triplicate, with the Director. The application must be signed 
and dated and must contain the information requested on the form, 
including:
    (i) The name, current address, and telephone number of the 
applicant;
    (ii) Certification that the transportation, receipt, or possession 
of the firearm or ammunition to be imported would not constitute a 
violation of any provision of the Act or of any State law or local 
ordinance at the place of the applicant's residence;
    (iii) The country from which the firearm or ammunition is to be 
imported;
    (iv) The name and address of the foreign seller and foreign shipper;
    (v) A description of the firearm or ammunition to be imported, 
including:
    (A) The name and address of the manufacturer;
    (B) The type (e.g., rifle, shotgun, pistol, revolver and, in the 
case of ammunition only, ball, wadcutter, shot, etc.);
    (C) The caliber, gauge, or size;
    (D) The model;
    (E) The barrel length, if a firearm (in inches);
    (F) The overall length, if a firearm (in inches);
    (G) The serial number;
    (H) Whether the firearm is new or used;
    (I) The quantity;
    (J) The unit cost of the firearm or ammunition to imported;
    (vi) The specific purpose of importation, that is --
    (A) That the firearm or ammunition being imported is for the 
personal use of the applicant; and
    (B) If a firearm, a statement that it is not a surplus military 
firearm, that it does not fall within the definition of a firearm under 
section 5845(a) of the Internal Revenue Code of 1986, and an explanation 
of why the firearm is generally recognized as particularly suitable for 
or readily adaptable to sporting purposes; or
    (C) If ammunition, a statement why it is generally recognized as 
particularly suitable for or readily adaptable to sporting purposes; and
    (vii) The applicant's date of birth;
    (viii) The applicant's rank or grade;
    (ix) The applicant's place of residence;
    (x) The applicant's present foreign duty station or last foreign 
duty station, as the case may be;
    (xi) The date of the applicant's reassignment to a duty station 
within the United States, if applicable; and
    (xii) The military branch of which the applicant is a member.
    (2)(i) If the Director approves the application, such approved 
application will serve as the permit to import the firearm or ammunition 
described therein. The Director will furnish the approved application 
(permit) to the applicant and retain two copies thereof for 
administrative use.
    (ii) If the Director disapproves the application, the applicant will 
be notified of the basis for the disapproval.
    (b) Except as provided in paragraph (b)(3) of this section, a 
firearm or ammunition imported into the United States under the 
provisions of this section by the applicant may be released from Customs 
custody to the applicant upon showing that the applicant has obtained a 
permit from the Director for

[[Page 1176]]

the importation of the firearm or ammunition to be released.
    (1) In obtaining the release from Customs custody of a firearm or 
ammunition authorized by this section to be imported through the use of 
a permit, the military member of the U.S. Armed Forces will prepare ATF 
Form 6A and furnish the completed form to the Customs officer releasing 
the firearm or ammunition. The Customs officer will, after 
certification, forward the ATF Form 6A to the address specified on the 
form.
    (2) The ATF Form 6A must contain the information requested on the 
form, including:
    (i) The name and address of the military member;
    (ii) The name of the manufacturer of the firearm or ammunition;
    (iii) The country of manufacture;
    (iv) The type;
    (v) The model;
    (vi) The caliber, gauge, or size;
    (vii) The serial number in the case of firearms; and
    (viii) If applicable, the number of firearms or rounds of ammunition 
released.
    (3) When such military member is on active duty outside the United 
States, the military member may appoint, in writing, an agent to obtain 
the release of the firearm or ammunition from Customs custody for such 
member. Such agent will present sufficient identification of the agent 
and the written authorization to act on behalf of such military member 
to the Customs officer who is to release the firearm or ammunition.
    (c) Firearms determined by the Department of Defense to be war 
souvenirs may be imported into the United States by the military members 
of the U.S. Armed Forces under such provisions and procedures as the 
Department of Defense may issue.

(Paragraph (a) approved by the Office of Management and Budget under 
control number 1512-0018; paragraph (b) approved by the Office of 
Management and Budget under control number 1512-0019)

[T.D. ATF-270, 53 FR 10500, Mar. 31, 1988, as amended by T.D. ATF-426, 
65 FR 38200, June 20, 2000]



Sec. 178.115  Exempt importation.

    (a) Firearms and ammunition may be brought into the United States or 
any possession thereof by any person who can establish to the 
satisfaction of Customs that such firearm or ammunition was previously 
taken out of the United States or any possession thereof by such person. 
Registration on Customs Form 4457 or on any other registration document 
available for this purpose may be completed before departure from the 
United States at any U.S. customhouse or any office of an Director of 
Industry Operations. A bill of sale or other commercial document showing 
transfer of the firearm or ammunition in the United States to such 
person also may be used to establish proof that the firearm or 
ammunition was taken out of the United States by such person. Firearms 
and ammunition furnished under the provisions of section 925(a)(3) of 
the Act to military members of the U.S. Armed Forces on active duty 
outside of the United States also may be imported into the United States 
or any possession thereof by such military members upon establishing to 
the satisfaction of Customs that such firearms and ammunition were so 
obtained.
    (b) Firearms, firearm barrels, and ammunition may be imported or 
brought into the United States by or for the United States or any 
department or agency thereof, or any State or any department, agency, or 
political subdivision thereof. A firearm, firearm barrel or ammunition 
imported or brought into the United States under this paragraph may be 
released from Customs custody upon a showing that the firearm, firearm 
barrel or ammunition is being imported or brought into the United States 
by or for such a governmental entity.
    (c) The provisions of this subpart shall not apply with respect to 
the importation into the United States of any antique firearm.
    (d) Firearms and ammunition are not imported into the United States, 
and the provisions of this subpart shall not apply, when such firearms 
and ammunition are brought into the United States by:
    (1) A nonresident of the United States for legitimate hunting or 
lawful

[[Page 1177]]

sporting purposes, and such firearms and such ammunition as remains 
following such shooting activity are to be taken back out of the 
territorial limits of the United States by such person upon conclusion 
of the shooting activity;
    (2) Foreign military personnel on official assignment to the United 
States who bring such firearms or ammunition into the United States for 
their exclusive use while on official duty in the United States, and 
such firearms and unexpended ammunition are taken back out of the 
territorial limits of the United States by such foreign military 
personnel when they leave the United States;
    (3) Official representatives of foreign governments who are 
accredited to the U.S. Government or are en route to or from other 
countries to which accredited, and such firearms and unexpended 
ammunition are taken back out of the territorial limits of the United 
States by such official representatives of foreign governments when they 
leave the United States;
    (4) Officials of foreign governments and distinguished foreign 
visitors who have been so designated by the Department of State, and 
such firearms and unexpended ammunition are taken back out of the 
territorial limits of the United States by such officials of foreign 
governments and distinguished foreign visitors when they leave the 
United States; and
    (5) Foreign law enforcement officers of friendly foreign governments 
entering the United States on official law enforcement business, and 
such firearms and unexpended ammunition are taken back out of the 
territorial limits of the United States by such foreign law enforcement 
officers when they leave the United States.
    (e) Notwithstanding the provisions of paragraphs (d) (1), (2), (3), 
(4) and (5) of this section, the Secretary of the Treasury or his 
delegate may in the interest of public safety and necessity require a 
permit for the importation or bringing into the United States of any 
firearms or ammunition.

[33 FR 18555, Dec. 14, 1968. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-58, 44 FR 32367, June 6, 1979; T.D. ATF-270, 53 
FR 10500, Mar. 31, 1988; T.D. ATF-471, 67 FR 5426, Feb. 5, 2002]



Sec. 178.116  Conditional importation.

    The Director shall permit the conditional importation or bringing 
into the United States or any possession thereof of any firearm, firearm 
barrel, ammunition, or ammunition feeding device as defined in 
Sec. 178.119(b) for the purpose of examining and testing the firearm, 
firearm barrel, ammunition, or ammunition feeding device in connection 
with making a determination as to whether the importation or bringing in 
of such firearm, firearm barrel, ammunition, or ammunition feeding 
device will be authorized under this part. An application on ATF Form 6 
for such conditional importation shall be filed, in duplicate, with the 
Director. The Director may impose conditions upon any importation under 
this section including a requirement that the firearm, firearm barrel, 
ammunition, or ammunition feeding device be shipped directly from 
Customs custody to the Director and that the person importing or 
bringing in the firearm, firearm barrel, ammunition, or ammunition 
feeding device must agree to either export the firearm, firearm barrel, 
ammunition, or ammunition feeding device or destroy same if a 
determination is made that the firearm, firearm barrel, ammunition, or 
ammunition feeding device may not be imported or brought in under this 
part. A firearm, firearm barrel, ammunition, or ammunition feeding 
device imported or brought into the United States or any possession 
thereof under the provisions of this section shall be released from 
Customs custody upon the payment of customs duties, if applicable, and 
in the manner prescribed in the conditional authorization issued by the 
Director.

[T.D. ATF-383, 61 FR 39321, July 29, 1996]

[[Page 1178]]



Sec. 178.117  Function outside a customs territory.

    In the insular possessions of the United States outside customs 
territory, the functions performed by U.S. Customs officers under this 
subpart within a customs territory may be performed by the appropriate 
authorities of a territorial government or other officers of the United 
States who have been designated to perform such functions. For the 
purpose of this subpart, the term customs territory means the United 
States, the District of Columbia, and the Commonwealth of Puerto Rico.



Sec. 178.118  Importation of certain firearms classified as curios or relics.

    Notwithstanding any other provision of this part, a licensed 
importer may import all rifles and shotguns classified by the Director 
as curios or relics, and all handguns classified by the Director as 
curios or relics that are determined to be generally recognized as 
particularly suitable for or readily adaptable to sporting purposes. The 
importation of such curio or relic firearms must be in accordance with 
the applicable importation provisions of this part and the importation 
provisions of 27 CFR part 47. Curios or relics which fall within the 
definition of ``firearm'' under 26 U.S.C. 5845(a) must also meet the 
importation provisions of 27 CFR part 179 before they may be imported.

[T.D. ATF-202, 50 FR 14383, Apr. 12, 1985]



Sec. 178.119  Importation of ammunition feeding devices.

    (a) No ammunition feeding device shall be imported or brought into 
the United States unless the Director has authorized the importation of 
such device.
    (b) For purposes of this section, an ``ammunition feeding device'' 
is a magazine, belt, drum, feed strip, or similar device for a firearm 
that has a capacity of, or that can be readily restored or converted to 
accept, more than 10 rounds of ammunition. The term does not include an 
attached tubular device designed to accept, and capable of operating 
only with, .22 caliber rimfire ammunition, or a fixed device for a 
manually operated firearm, or a fixed device for a firearm listed in 18 
U.S.C. 922, Appendix A.
    (c) An application for a permit, ATF Form 6, to import or bring an 
ammunition feeding device into the United States or a possession thereof 
under this section shall be filed, in triplicate, with the Director. The 
application shall contain:
    (1) The name and address of the person importing the device,
    (2) A description of the device to be imported, including type and 
cartridge capacity, model and caliber of firearm for which the device 
was made, country of manufacture, and name of the manufacturer if known,
    (3) The unit cost of the device to be imported,
    (4) The country from which to be imported,
    (5) The name and address of the foreign seller and the foreign 
shipper,
    (6) Verification that such device will be marked as required by this 
part, and
    (7) A statement by the importer that the device is being imported 
for sale to purchasers specified in Sec. 178.40a(b) or physical or 
reasonable documentary evidence establishing that the magazine was 
manufactured on or before September 13, 1994. Any one of the following 
examples, which are not meant to be exhaustive, may be sufficient to 
establish the time of manufacture:
    (i) Permanent markings or physical characteristics which establish 
that the magazine was manufactured on or before September 13, 1994;
    (ii) A certification from the importer, under penalty of perjury, 
that the importer maintained continuous custody beginning on a date 
prior to September 14, 1994, and continuing until the date of the 
certification. Such certification shall also be supported by reasonable 
documentary evidence, such as commercial records;
    (iii) A certification from the importer, under penalty of perjury, 
that the magazines sought to be imported were in the custody and control 
of a foreign Government on or before September 13, 1994, along with 
reasonable documentary evidence to support the certification; or
    (iv) A certification from the importer, under penalty of perjury, 
that

[[Page 1179]]

the magazine was in the possession of a foreign arms supplier on or 
before September 13, 1994, along with reasonable documentary evidence to 
support the certification.
    (d) The Director shall act upon applications to import ammunition 
feeding devices as expeditiously as possible. If the Director approves 
the application, such approved application shall serve as the permit to 
import the device described therein, and importation of such devices may 
continue to be made by the person importing such devices under the 
approved application (permit) during the period specified thereon. The 
Director shall furnish the approved application (permit) to the 
applicant and retain two copies thereof for administrative use. If the 
Director disapproves the application, the person importing such devices 
shall be notified of the basis for the disapproval.
    (e) An ammunition feeding device imported or brought into the United 
States by a person importing such a device may be released from Customs 
custody to the person importing such a device upon showing that such 
person has obtained a permit from the Director for the importation of 
the device to be released. In obtaining the release from Customs custody 
of such a device authorized by this section to be imported through use 
of a permit, the person importing such a device shall prepare ATF Form 
6A, in duplicate, and furnish the original ATF Form 6A to the Customs 
officer releasing the device. The Customs officer shall, after 
certification, forward the ATF Form 6A to the address specified on the 
form. The ATF Form 6A shall show the name and address of the person 
importing the device, the name of the manufacturer of the device, the 
country of manufacture, the type, model, caliber, size, and the number 
of devices released.
    (f) Within 15 days of the date of release from Customs custody, the 
person importing such a device shall:
    (1) Forward to the address specified on the form a copy of ATF Form 
6A on which shall be reported any error or discrepancy appearing on the 
ATF Form 6A certified by Customs, and
    (2) Pursuant to Sec. 178.92, place all required identification data 
on each imported device manufactured after September 13, 1994, if same 
did not bear such identification data at the time of its release from 
Customs custody.
    (g) The Director may authorize the conditional importation of an 
ammunition feeding device as provided in Sec. 178.116.

(Paragraphs (a), (c), and (d) approved by the Office of Management and 
Budget under control numbers 1512-0017 and 1512-0018; paragraphs (e) and 
(f) approved by the Office of Management and Budget under control number 
1512-0019)

[T.D. ATF-383, 61 FR 39322, July 29, 1996]



Sec. 178.120  Firearms or ammunition imported by or for a nonimmigrant alien.

    (a) Any nonimmigrant alien who completes an ATF Form 6 to import 
firearms or ammunition into the United States, or any licensee who 
completes an ATF Form 6 to import firearms or ammunition for a 
nonimmigrant alien, must attach applicable documentation to the Form 6 
(e.g., a hunting license or permit lawfully issued in the United States; 
waiver) establishing the nonimmigrant alien falls within an exception to 
or has obtained a waiver from the nonimmigrant alien prohibition.
    (b) Nonimmigrant aliens importing or bringing firearms or ammunition 
into the United States must provide the United States Customs Service 
with applicable documentation (e.g., a hunting license or permit 
lawfully issued in the United States; waiver) establishing the 
nonimmigrant alien falls within an exception to or has obtained a waiver 
from the nonimmigrant alien prohibition before the firearm or ammunition 
may be imported. This provision applies in all cases, whether or not a 
Form 6 is needed to bring the firearms or ammunition into the United 
States.

(Approved by the Office of Management and Budget under control number 
1512-0570)

[T.D. ATF-471, 67 FR 5426, Feb. 5, 2002]



                           Subpart H--Records



Sec. 178.121  General.

    (a) The records pertaining to firearms transactions prescribed by 
this

[[Page 1180]]

part shall be retained on the licensed premises in the manner prescribed 
by this subpart and for the length of time prescribed by Sec. 178.129. 
The records pertaining to ammunition prescribed by this part shall be 
retained on the licensed premises in the manner prescribed by 
Sec. 178.125.
    (b) ATF officers may, for the purposes and under the conditions 
prescribed in Sec. 178.23, enter the premises of any licensed importer, 
licensed manufacturer, licensed dealer, or licensed collector for the 
purpose of examining or inspecting any record or document required by or 
obtained under this part. Section 923(g) of the Act requires licensed 
importers, licensed manufacturers, licensed dealers, and licensed 
collectors to make such records available for such examination or 
inspection during business hours or, in the case of licensed collectors, 
hours of operation, as provided in Sec. 178.23.
    (c) Each licensed importer, licensed manufacturer, licensed dealer, 
and licensed collector shall maintain such records of importation, 
production, shipment, receipt, sale, or other disposition, whether 
temporary or permanent, of firearms and such records of the disposition 
of ammunition as the regulations contained in this part prescribe. 
Section 922(m) of the Act makes it unlawful for any licensed importer, 
licensed manufacturer, licensed dealer, or licensed collector knowingly 
to make any false entry in, to fail to make appropriate entry in, or to 
fail to properly maintain any such record.
    (d) For recordkeeping requirements for sales by licensees at gun 
shows see Sec. 178.100(c).

(Information collection requirements in paragraph (a) approved by the 
Office of Management and Budget under control number 1512-0129; 
information collection requirements in paragraphs (b) and (c) approved 
by the Office of Management and Budget under control number 1512-0387)

[33 FR 18555, Dec. 14, 1968. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-191, 49 FR 46891, Nov. 29, 1984; T.D. ATF-208, 
50 FR 26703, June 28, 1985; T.D. ATF-270, 53 FR 10501, Mar. 31, 1988]



Sec. 178.122  Records maintained by importers.

    (a) Each licensed importer shall, within 15 days of the date of 
importation or other acquisition, record the type, model, caliber or 
gauge, manufacturer, country of manufacture, and the serial number of 
each firearm imported or otherwise acquired, and the date such 
importation or other acquisition was made.
    (b) A record of firearms disposed of by a licensed importer to 
another licensee and a separate record of armor piercing ammunition 
dispositions to governmental entities, for exportation, or for testing 
or experimentation authorized under the provisions of Sec. 178.149 shall 
be maintained by the licensed importer on the licensed premises. For 
firearms, the record shall show the quantity, type, manufacturer, 
country of manufacture, caliber or gauge, model, serial number of the 
firearms so transferred, the name and license number of the licensee to 
whom the firearms were transferred, and the date of the transaction. For 
armor piercing ammunition, the record shall show the date of the 
transaction, manufacturer, caliber or gauge, quantity of projectiles, 
and the name and address of the purchaser. The information required by 
this paragraph shall be entered in the proper record book not later than 
the seventh day following the date of the transaction, and such 
information shall be recorded under the following formats:

[[Page 1181]]



                                     Importer's Firearms Disposition Record
----------------------------------------------------------------------------------------------------------------
                                                                                       Name and
                                                                                    license No. of
 Quantity    Type     Manufacturer    Country of   Caliber or    Model    Serial     licensee to     Date of the
                                      manufacture     gauge                 No.          whom        transaction
                                                                                     transferred
----------------------------------------------------------------------------------------------------------------
 


         Importer's Armor Piercing Ammunition Disposition Record
------------------------------------------------------------------------
                          Calibur or   Quantity of   Purchaser--Name and
  Date    Manufacturer      gauge      projectiles         address
------------------------------------------------------------------------
 

    (c) Notwithstanding the provisions of paragraph (b) of this section, 
the Director of Industry Operations may authorize alternate records to 
be maintained by a licensed importer to record the disposal of firearms 
and armor piercing ammunition when it is shown by the licensed importer 
that such alternate records will accurately and readily disclose the 
information required by paragraph (b) of this section. A licensed 
importer who proposes to use alternate records shall submit a letter 
application, in duplicate, to the Director of Industry Operations and 
shall describe the proposed alternate records and the need therefor. 
Such alternate records shall not be employed by the licensed importer 
until approval in such regard is received from the Director of Industry 
Operations.
    (d) Each licensed importer shall maintain separate records of the 
sales or other dispositions made of firearms to nonlicensees. Such 
records shall be maintained in the form and manner as prescribed by 
Secs. 178.124 and 178.125 in regard to firearms transaction records and 
records of acquisition and disposition of firearms.

(Approved by the Office of Management and Budget under control number 
1512-0387)

[T.D. ATF-270, 53 FR 10501, Mar. 31, 1988]



Sec. 178.123  Records maintained by manufacturers.

    (a) Each licensed manufacturer shall record the type, model, caliber 
or gauge, and serial number of each complete firearm manufactured or 
otherwise acquired, and the date such manufacture or other acquisition 
was made. The information required by this paragraph shall be recorded 
not later than the seventh day following the date such manufacture or 
other acquisition was made.
    (b) A record of firearms disposed of by a manufacturer to another 
licensee and a separate record of armor piercing ammunition dispositions 
to governmental entities, for exportation, or for testing or 
experimentation authorized under the provision of Sec. 178.149 shall be 
maintained by the licensed manufacturer on the licensed premises. For 
firearms, the record shall show the quantity, type, model, manufacturer, 
caliber, size or gauge, serial number of the firearms so transferred, 
the name and license number of the licensee to whom the firearms were 
transferred, and the date of the transaction. For armor piercing 
ammunition, the record shall show the manufacturer, caliber or gauge, 
quantity, the name and address of the transferee to whom the armor 
piercing ammunition was transferred, and the date of the transaction. 
The information required by this paragraph shall be entered in the 
proper record book not later than the seventh day following the date of 
the transaction, and such information shall be recorded under the format 
prescribed by Sec. 178.122, except that the name of the manufacturer of 
a firearm or armor piercing ammunition need not be recorded if the 
firearm or armor piercing ammunition is of the manufacturer's own 
manufacture.
    (c) Notwithstanding the provisions of paragraph (b) of this section, 
the Director of Industry Operations may authorize alternate records to 
be maintained by a licensed manufacturer to record the disposal of 
firearms and armor piercing ammunition when it is shown by the licensed 
manufacturer that such alternate records will accurately and readily 
disclose the information required by paragraph (b) of this section. A 
licensed manufacturer who proposes to use alternate records shall submit 
a letter application, in duplicate, to the Director of Industry 
Operations and

[[Page 1182]]

shall describe the proposed alternate record and the need therefor. Such 
alternate records shall not be employed by the licensed manufacturer 
until approval in such regard is received from the Director of Industry 
Operations.
    (d) Each licensed manufacturer shall maintain separate records of 
the sales or other dispositions made of firearms to nonlicensees. Such 
records shall be maintained in the form and manner as prescribed by 
Secs. 178.124 and 178.125 in regard to firearms transaction records and 
records of acquisition and disposition of firearms.

(Approved by the Office of Management and Budget under control number 
1512-0369)

[T.D. ATF-270, 53 FR 10501, Mar. 31, 1988]



Sec. 178.124  Firearms transaction record.

    (a) A licensed importer, licensed manufacturer, or licensed dealer 
shall not sell or otherwise dispose, temporarily or permanently, of any 
firearm to any person, other than another licensee, unless the licensee 
records the transaction on a firearms transaction record, Form 4473: 
Provided, That a firearms transaction record, Form 4473, shall not be 
required to record the disposition made of a firearm delivered to a 
licensee for the sole purpose of repair or customizing when such firearm 
or a replacement firearm is returned to the person from whom received.
    (b) A licensed manufacturer, licensed importer, or licensed dealer 
shall retain in alphabetical (by name of purchaser), chronological (by 
date of disposition), or numerical (by transaction serial number) order, 
and as a part of the required records, each Form 4473 obtained in the 
course of transferring custody of the firearms.
    (c)(1) Prior to making an over-the-counter transfer of a firearm to 
a nonlicensee who is a resident of the State in which the licensee's 
business premises is located, the licensed importer, licensed 
manufacturer, or licensed dealer so transferring the firearm shall 
obtain a Form 4473 from the transferee showing the transferee's name, 
sex, residence address (including county or similar political 
subdivision), date and place of birth; height, weight and race of the 
transferee; the transferee's country of citizenship; the transferee's 
INS-issued alien number or admission number; the transferee's State of 
residence; and certification by the transferee that the transferee is 
not prohibited by the Act from transporting or shipping a firearm in 
interstate or foreign commerce or receiving a firearm which has been 
shipped or transported in interstate or foreign commerce or possessing a 
firearm in or affecting commerce.
    (2) In order to facilitate the transfer of a firearm and enable NICS 
to verify the identity of the person acquiring the firearm, ATF Form 
4473 also requests certain optional information. This information 
includes the transferee's social security number. Such information may 
help avoid the possibility of the transferee being misidentified as a 
felon or other prohibited person.
    (3) After the transferee has executed the Form 4473, the licensee:
    (i) Shall verify the identity of the transferee by examining the 
identification document (as defined in Sec. 178.11) presented, and shall 
note on the Form 4473 the type of identification used;
    (ii) Shall, in the case of a transferee who is an alien legally in 
the United States, cause the transferee to present documentation 
establishing that the transferee is a resident of the State (as defined 
in Sec. 178.11) in which the licensee's business premises is located, 
and shall note on the form the documentation used. Examples of 
acceptable documentation include utility bills or a lease agreement 
which show that the transferee has resided in the State continuously for 
at least 90 days prior to the transfer of the firearm; and
    (iii) Must, in the case of a transferee who is a nonimmigrant alien 
who states that he or she falls within an exception to, or has a waiver 
from, the nonimmigrant alien prohibition, have the transferee present 
applicable documentation establishing the exception or waiver, note on 
the Form 4473 the type of documentation provided, and attach a copy of 
the documentation to the Form 4473.
    (iv) Shall comply with the requirements of Sec. 178.102 and record 
on the form the date on which the licensee

[[Page 1183]]

contacted the NICS, as well as any response provided by the system, 
including any identification number provided by the system.
    (4) The licensee shall identify the firearm to be transferred by 
listing on the Form 4473 the name of the manufacturer, the name of the 
importer (if any), the type, model, caliber or gauge, and the serial 
number of the firearm.
    (5) The licensee shall sign and date the form if the licensee does 
not know or have reasonable cause to believe that the transferee is 
disqualified by law from receiving the firearm and transfer the firearm 
described on the Form 4473.
    (d) Prior to making an over-the-counter transfer of a shotgun or 
rifle under the provisions contained in Sec. 178.96(c) to a nonlicensee 
who is not a resident of the State in which the licensee's business 
premises is located, the licensee so transferring the shotgun or rifle, 
and such transferee, shall comply with the requirements of paragraph (c) 
of this section: Provided, That in the case of a transferee who is an 
alien legally in the United States, the documentation required by 
paragraph (c)(3)(ii) of this section need only establish that the 
transferee is a resident of any State and has resided in such State 
continuously for at least 90 days prior to the transfer of the firearm. 
Examples of acceptable documentation include utility bills or a lease 
agreement. The licensee shall note on the form the documentation used.
    (e) Prior to making a transfer of a firearm to any nonlicensee who 
is not a resident of the State in which the licensee's business premises 
is located, and such nonlicensee is acquiring the firearm by loan or 
rental from the licensee for temporary use for lawful sporting purposes, 
the licensed importer, licensed manufacturer, or licensed dealer so 
furnishing the firearm, and such transferee, shall comply with the 
provisions of paragraph (c) of this section, except for the provisions 
of paragraph (c)(3)(ii).
    (f) Form 4473 shall be submitted, in duplicate, to a licensed 
importer, licensed manufacturer, or licensed dealer by a transferee who 
is purchasing or otherwise acquiring a firearm by other than an over-
the-counter transaction, who is not subject to the provisions of 
Sec. 178.102(a), and who is a resident of the State in which the 
licensee's business premises are located. The Form 4473 shall show the 
name, address, date and place of birth, height, weight, and race of the 
transferee; and the title, name, and address of the principal law 
enforcement officer of the locality to which the firearm will be 
delivered. The transferee also must date and execute the sworn statement 
contained on the form showing, in case the firearm to be transferred is 
a firearm other than a shotgun or rifle, the transferee is 21 years or 
more of age; in case the firearm to be transferred is a shotgun or 
rifle, the transferee is 18 years or more of age; whether the transferee 
is a citizen of the United States; the transferee's State of residence, 
and in the case of a transferee who is an alien legally in the United 
States, the transferee has resided in that State continuously for at 
least 90 days prior to the transfer of the firearm; the transferee is 
not prohibited by the provisions of the Act from shipping or 
transporting a firearm in interstate or foreign commerce or receiving a 
firearm which has been shipped or transported in interstate or foreign 
commerce or possessing a firearm in or affecting commerce; and the 
transferee's receipt of the firearm would not be in violation of any 
statute of the State or published ordinance applicable to the locality 
in which the transferee resides. Upon receipt of such Forms 4473, the 
licensee shall identify the firearm to be transferred by listing in the 
Forms 4473 the name of the manufacturer, the name of the importer (if 
any), the type, model, caliber or gauge, and the serial number of the 
firearm to be transferred. The licensee shall prior to shipment or 
delivery of the firearm to such transferee, forward by registered or 
certified mail (return receipt requested) a copy of the Form 4473 to the 
principal law enforcement officer named in the Form 4473 by the 
transferee, and shall delay shipment or delivery of the firearm to the 
transferee for a period of at least 7 days following receipt by the 
licensee of the return receipt evidencing delivery of the copy of the 
Form 4473 to such principal law enforcement officer, or the return of 
the copy of the Form

[[Page 1184]]

4473 to the licensee due to the refusal of such principal law 
enforcement officer to accept same in accordance with U.S. Postal 
Service regulations. The original Form 4473, and evidence of receipt or 
rejection of delivery of the copy of the Form 4473 sent to the principal 
law enforcement officer, shall be retained by the licensee as a part of 
the records required to be kept under this subpart.
    (g) A licensee who sells or otherwise disposes of a firearm to a 
nonlicensee who is other than an individual, shall obtain from the 
transferee the information required by this section from an individual 
authorized to act on behalf of the transferee. In addition, the licensee 
shall obtain from the individual acting on behalf of the transferee a 
written statement, executed under the penalties of perjury, that the 
firearm is being acquired for the use of and will be the property of the 
transferee, and showing the name and address of that transferee.
    (h) The requirements of this section shall be in addition to any 
other recordkeeping requirement contained in this part.
    (i) A licensee may obtain, upon request, an emergency supply of 
Forms 4473 from any Director of Industry Operations. For normal usage, a 
licensee should request a year's supply from the ATF Distribution 
Center, 7943 Angus Court, Springfield, Virginia 22153.

(Paragraph (c) approved by the Office of Management and Budget under 
control numbers 1512-0544, 1512-0129, and 1512-0570; paragraph (f) 
approved by the Office of Management and Budget under control number 
1512-0130; all other recordkeeping approved by the Office of Management 
and Budget under control number 1512-0129)

[33 FR 18555, Dec. 14, 1968, as amended by T.D. ATF-172, 49 FR 14942, 
Apr. 16, 1984; T.D. ATF-241, 51 FR 39625, Oct. 29, 1986; T.D. ATF-270, 
53 FR 10502, Mar. 31, 1988; T.D. ATF-389, 62 FR 19444, Apr. 21, 1997; 
T.D. ATF-415, 63 FR 58279, Oct. 29, 1998; T.D. ATF-471, 67 FR 5426, Feb. 
5, 2002]



Sec. 178.124a  Firearms transaction record in lieu of record of receipt and disposition.

    (a) A licensed dealer acquiring firearms after August 1, 1988 and 
contemplating the disposition of not more than 50 firearms within a 
succeeding 12-month period to licensees or nonlicensees may maintain a 
record of the acquisition and disposition of such firearms on a firearms 
transaction record, Form 4473(LV), Part I or II, in lieu of the records 
prescribed by Sec. 178.125. Such 12-month period shall commence from the 
date the licensed dealer first records the purchase or other acuisition 
of a firearm on Form 4473(LV) pursuant to this section. A licensed 
dealer who maintains records pursuant to this section, but whose 
firearms dispositions exceed 50 firearms within such 12-month period, 
shall make and maintain the acquisition and disposition records required 
by Sec. 178.125 with respect to each firearm exceeding 50.
    (b) Each licensed dealer maintaining firearms acquisition and 
disposition records pursuant to this section shall record the purchase 
or other acquisition of a firearm on Form 4473(LV), Part I or II, in 
accordance with the instructions on the form not later than the close of 
the next business day following the date of such purchase or 
acquisition. However, when disposition is made of a firearm before the 
close of the next business day after the receipt of that firearm, the 
licensed dealer making such disposition shall enter all required 
acquisition information regarding the firearm on the Form 4473(LV) at 
the time such transfer or disposition is made. The record on Form 
4473(LV) shall show the date of receipt, the name and address or the 
name and license number of the person from whom received, the name of 
the manufacturer and importer (if any), the model, serial number, type, 
and caliber or gauge of the firearm.
    (c) Each licensed dealer maintaining firearms acquisition and 
disposition records pursuant to this section shall retain Form 4473(LV), 
Part I or II, reflecting firearms possessed by such business in 
chronological (by date of receipt) or numerical (by transaction serial 
number) order. Forms 4473(LV) reflecting the licensee's sale or 
disposition of firearms shall be retained in alphabetical (by name of 
purchaser), chronological (by date of disposition) or numerical (by 
transaction serial number) order.

[[Page 1185]]

    (d) A licensed dealer maintaining records pursuant to this section 
shall record the sale or other disposition of a firearm to another 
licensee by entering on the Form 4473(LV), Part I, associated with such 
firearm, the name and license number of the person to whom transferred 
and by signing and dating the form.
    (e) A licensed dealer shall obtain the Form 4473(LV), Part I, 
associated with the firearm in lieu of a Form 4473 and comply with the 
requirements specified in Sec. 178.124(c) prior to making an over-the-
counter transfer of a firearm to a nonlicensee:
    (1) Who is a resident of the State in which the licensee's business 
premises is located,
    (2) Who is not a resident of the State in which the licensee's 
business premises is located and the firearm is a shotgun or rifle and 
the transfer is under the provisions of Sec. 178.96(c), or
    (3) Who is not a resident of the State in which the licensee's 
business premises is located and who is acquiring the firearm by loan or 
rental for temporary use for lawful sporting purposes.
    (f) A licensed dealer shall obtain the Form 4473(LV), Part II, 
associated with the firearm in lieu of a Form 4473 and comply with the 
requirements specified in Sec. 178.124(f) prior to making a disposition 
of a firearm to a nonlicensee who is purchasing or otherwise acquiring a 
firearm by other than an over-the-counter transaction and who is a 
resident of the State in which the licensee's business premises is 
located. If the licensee's record of the acquisition of the firearm is, 
at the time of the disposition, being maintained on a Form 4473(LV), 
Part I, for over-the-counter transactions, the licensee shall transfer 
the information relative to the receipt of the firearm, as required by 
paragraph (b) of this section, to Form 4473(LV), Part II. The 
corresponding form 4473(LV), Part I, may then be destroyed.

[T.D. ATF-273, 53 FR 24687, June 30, 1988, as amended by T.D. ATF-415, 
63 FR 58280, Oct. 29, 1998]



Sec. 178.125  Record of receipt and disposition.

    (a) Armor piercing ammunition sales by licensed collectors to 
nonlicensees. The sale or other disposition of armor piercing ammunition 
by licensed collectors shall be recorded in a bound record at the time a 
transaction is made. The bound record shall be maintained in 
chronological order by date of sale or disposition of the armor piercing 
ammunition, and shall be retained on the licensed premises of the 
licensee for a period not less than two years following the date of the 
recorded sale or disposition of the armor piercing ammunition. The bound 
record entry shall show:
    (1) The date of the transaction;
    (2) The name of the manufacturer;
    (3) The caliber or gauge;
    (4) The quantity of projectiles;
    (5) The name, address, and date of birth of the nonlicensee; and
    (6) The method used to establish the identity of the armor piercing 
ammunition purchaser.
    The format required for the bound record is as follows:

                                 Disposition Record of Armor Piercing Ammunition
----------------------------------------------------------------------------------------------------------------
                                                              Purchaser          Enter a (x) in the ``known''
                                                       ----------------------  column if purchaser is personally
                                                                              known to you. Otherwise, establish
  Date      Manufacturer    Caliber or    Quantity of                           the purchaser's identification
                               gauge      projectiles    Name and   Date of  -----------------------------------
                                                         address     birth                Driver's    Other type
                                                                                Known      license    (specify)
----------------------------------------------------------------------------------------------------------------
 


However, when a commercial record is made at the time a transaction is 
made, a licensee may delay making an entry into the bound record if the 
provisions of paragraph (d) of this section are complied with.
    (b) Armor piercing ammunition sales by licensed collectors to 
licensees. Sales or other dispositions of armor piercing ammunition from 
a licensed collector to another licensee shall be recorded

[[Page 1186]]

and maintained in the manner prescribed in Sec. 178.122(b) for 
importers: Provided, That the license number of the transferee may be 
recorded in lieu of the transferee's address.
    (c) Armor piercing ammunition sales by licensed dealers to 
governmental entities. A record of armor piercing ammunition disposed of 
by a licensed dealer to a governmental entity pursuant to Sec. 178.99(e) 
shall be maintained by the licensed dealer on the licensed premises and 
shall show the name of the manufacturer, the caliber or gauge, the 
quantity, the name and address of the entity to which the armor piercing 
ammunition was transferred, and the date of the transaction. Such 
information shall be recorded under the format prescribed by 
Sec. 178.122(b). Each licensed dealer disposing of armor piercing 
ammunition pursuant to Sec. 178.99(e) shall also maintain a record 
showing the date of acquisition of such ammunition which shall be filed 
in an orderly manner separate from other commercial records maintained 
and be readily available for inspection. The records required by this 
paragraph shall be retained on the licensed premises of the licensee for 
a period not less than two years following the date of the recorded sale 
or disposition of the armor piercing ammunition.
    (d) Commercial records of armor piercing ammunition transactions. 
When a commercial record is made at the time of sale or other 
disposition of armor piercing ammunition, and such record contains all 
information required by the bound record prescribed by paragraph (a) of 
this section, the licensed collector transferring the armor piercing 
ammunition may, for a period not exceeding 7 days following the date of 
such transfer, delay making the required entry into such bound record: 
Provided, That the commercial record pertaining to the transfer is:
    (1) Maintained by the licensed collector separate from other 
commercial documents maintained by such licensee, and
    (2) Is readily available for inspection on the licensed premises 
until such time as the required entry into the bound record is made.
    (e) Firearms receipt and disposition by dealers. Except as provided 
in Sec. 178.124a with respect to alternate records for the receipt and 
disposition of firearms by dealers, each licensed dealer shall enter 
into a record each receipt and disposition of firearms. In addition, 
before commencing or continuing a firearms business, each licensed 
dealer shall inventory the firearms possessed for such business and 
shall record same in the record required by this paragraph. The record 
required by this paragraph shall be maintained in bound form under the 
format prescribed below. The purchase or other acquisition of a firearm 
shall, except as provided in paragraph (g) of this section, be recorded 
not later than the close of the next business day following the date of 
such purchase or acquisition. The record shall show the date of receipt, 
the name and address or the name and license number of the person from 
whom received, the name of the manufacturer and importer (if any), the 
model, serial number, type, and the caliber or gauge of the firearm. The 
sale or other disposition of a firearm shall be recorded by the licensed 
dealer not later than 7 days following the date of such transaction. 
When such disposition is made to a nonlicensee, the firearms transaction 
record, Form 4473, obtained by the licensed dealer shall be retained, 
until the transaction is recorded, separate from the licensee's Form 
4473 file and be readily available for inspection. When such disposition 
is made to a licensee, the commercial record of the transaction shall be 
retained, until the transaction is recorded, separate from other 
commercial documents maintained by the licensed dealer, and be readily 
available for inspection. The record shall show the date of the sale or 
other disposition of each firearm, the name and address of the person to 
whom the firearm is transferred, or the name and license number of the 
person to whom transferred if such person is a licensee, or the firearms 
transaction record, Form 4473, serial number if the licensed dealer 
transferring the firearm serially numbers the Forms 4473 and files them 
numerically. The format required for the record of receipt and 
disposition of firearms is as follows:

[[Page 1187]]



                                                       FIREARMS ACQUISITION AND DISPOSITION RECORD
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                    Description of firearm                                            Receipt                    Disposition
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                           Address or
                                                                                                          Name and                       license No. if
                                                                 Serial               Caliber            address or                    licensee, or Form
           Manufacturer and/or Importer               Model       No.        Type     or gauge    Date    name and     Date     Name    4473 Serial No.
                                                                                                           license                       if Forms 4473
                                                                                                             No.                       filed numerically
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (f) Firearms receipt and disposition by licensed collectors. Each 
licensed collector shall enter into a record each receipt and 
disposition of firearms curios or relics. The record required by this 
paragraph shall be maintained in bound form under the format prescribed 
below. The purchase or other acquisition of a curio or relic shall, 
except as provided in paragraph (g) of this section, be recorded not 
later than the close of the next business day following the date of such 
purchase or other acquisition. The record shall show the date of 
receipt, the name and address or the name and license number of the 
person from whom received, the name of the manufacturer and importer (if 
any), the model, serial number, type, and the caliber or gauge of the 
firearm curio or relic. The sale or other disposition of a curio or 
relic shall be recorded by the licensed collector not later than 7 days 
following the date of such transaction. When such disposition is made to 
a licensee, the commercial record of the transaction shall be retained, 
until the transaction is recorded, separate from other commercial 
documents maintained by the licensee, and be readily available for 
inspection. The record shall show the date of the sale or other 
disposition of each firearm curio or relic, the name and address of the 
person to whom the firearm curio or relic is transferred, or the name 
and license number of the person to whom transferred if such person is a 
licensee, and the date of birth of the transferee if other than a 
licensee. In addition, the licensee shall cause the transferee, if other 
than a licensee, to be identified in any manner customarily used in 
commercial transactions (e.g., a driver's license), and shall note on 
the record the method used. In addition, the licensee shall--
    (1) Cause the transferee, if other than a licensee, to be identified 
in any manner customarily used in commercial transactions (e.g., a 
driver's license), and note on the record the method used, and
    (2) In the case of a transferee who is an alien legally in the 
United States and who is other than a licensee--
    (i) Verify the identity of the transferee by examining an 
identification document (as defined in Sec. 178.11), and
    (ii) Cause the transferee to present documentation establishing that 
the transferee is a resident of the State (as defined in Sec. 178.11) in 
which the licensee's business premises is located if the firearm curio 
or relic is other than a shotgun or rifle, and note on the record the 
documentation used or is a resident of any State and has resided in such 
State continuously for at least 90 days prior to the transfer of the 
firearm if the firearm curio or relic is a shotgun or rifle and shall 
note on the record the documentation used. Examples of acceptable 
documentation include utility bills or a lease agreement which show that 
the transferee has resided in the State continuously for at least 90 
days prior to the transfer of the firearm curio or relic.
    (3) The format required for the record of receipt and disposition of 
firearms by collectors is as follows:

[[Page 1188]]



                                                 Firearms Collectors Acquisition and Disposition Record
--------------------------------------------------------------------------------------------------------------------------------------------------------
                           Description of firearm                                Receipt                             Disposition
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                   Name and         Name and                               For transfers
                                                                                    address         address                   Driver's       to aliens,
                                                      Serial        Caliber         or name         or name     Date of    license No. or  documentation
         Manufacturer and/or importer          Model    No.   Type     or    Date     and    Date     and       birth if        other         used to
                                                                     gauge          license         license   nonlicensee  identification    establish
                                                                                      No.             No.                  if nonlicensee    residency
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
 
 
 
 
 
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (g) Commercial records of firearms received. When a commercial 
record is held by a licensed dealer or licensed collector showing the 
acquisition of a firearm or firearm curio or relic, and such record 
contains all acquisition information required by the bound record 
prescribed by paragraphs (e) and (f) of this section, the licensed 
dealer or licensed collector acquiring such firearm or curio or relic, 
may, for a period not exceeding 7 days following the date of such 
acquisition, delay making the required entry into such bound record: 
Provided, That the commercial record is, until such time as the required 
entry into the bound record is made, (1) maintained by the licensed 
dealer or licensed collector separate from other commercial documents 
maintained by such licensee, and (2) readily available for inspection on 
the licensed premises: Provided further, That when disposition is made 
of a firearm or firearm curio or relic not entered in the bound record 
under the provisions of this paragraph, the licensed dealer or licensed 
collector making such disposition shall enter all required acquisition 
information regarding the firearm or firearm curio or relic in the bound 
record at the time such transfer or disposition is made.
    (h) Alternate records. Notwithstanding the provisions of paragraphs 
(a), (e), and (f) of this section, the Director of Industry Operations 
may authorize alternate records to be maintained by a licensed dealer or 
licensed collector to record the acquisition and disposition of firearms 
or curios or relics and the disposition of armor piercing ammunition 
when it is shown by the licensed dealer or the licensed collector that 
such alternate records will accurately and readily disclose the required 
information. A licensed dealer or licensed collector who proposes to use 
alternate records shall submit a letter application, in duplicate, to 
the Director of Industry Operations and shall describe the proposed 
alternate records and the need therefor. Such alternate records shall 
not be employed by the licensed dealer or licensed collector until 
approval in such regard is received from the Director of Industry 
Operations.
    (i) Requirements for importers and manufacturers. Each licensed 
importer and licensed manufacturer selling or otherwise disposing of 
firearms or armor piercing ammunition to nonlicensees shall maintain 
such records of such transactions as are required of licensed dealers by 
this section.

(Approved by the Office of Management and Budget under control number 
1512-0387)

[T.D. ATF-270, 53 FR 10503, Mar. 31, 1988, as amended by T.D. ATF-273, 
53 FR 24687, June 30, 1988; T.D. ATF-313, 56 FR 32508, July 17, 1991; 
T.D. ATF-389, 62 FR 19445, Apr. 21, 1997]



Sec. 178.125a  Personal firearms collection.

    (a) Notwithstanding any other provision of this subpart, a licensed 
manufacturer, licensed importer, or licensed dealer is not required to 
comply with the provisions of Sec. 178.102 or record on a firearms 
transaction record, Form 4473, the sale or other disposition of a 
firearm maintained as part of the licensee's personal firearms 
collection: Provided, That
    (1) The licensee has maintained the firearm as part of such 
collection for 1 year from the date the firearm was

[[Page 1189]]

transferred from the business inventory into the personal collection or 
otherwise acquired as a personal firearm,
    (2) The licensee recorded in the bound record prescribed by 
Sec. 178.125(e) the receipt of the firearm into the business inventory 
or other acquisition,
    (3) The licensee recorded the firearm as a disposition in the bound 
record prescribed by Sec. 178.125(e) when the firearm was transferred 
from the business inventory into the personal firearms collection or 
otherwise acquired as a personal firearm, and
    (4) The licensee enters the sale or other disposition of the firearm 
from the personal firearms collection into a bound record, under the 
format prescribed below, identifying the firearm transferred by 
recording the name of the manufacturer and importer (if any), the model, 
serial number, type, and the caliber or gauge, and showing the date of 
the sale or other disposition, the name and address of the transferee, 
or the name and business address of the transferee if such person is a 
licensee, and the date of birth of the transferee if other than a 
licensee. In addition, the licensee shall cause the transferee, if other 
than a licensee, to be identified in any manner customarily used in 
commercial transactions (e.g., a drivers license). The format required 
for the disposition record of personal firearms is as follows:

                                     Disposition Record of Personal Firearms
----------------------------------------------------------------------------------------------------------------
                       Description of firearm                                         Disposition
----------------------------------------------------------------------------------------------------------------
                                                                                  Name and
                                                                                  address
Manufacturer and/    Model      Serial No.      Type     Caliber or     Date     (business     Date of birth if
   or importer                                             gauge                 address if       nonlicensee
                                                                                 licensee)
----------------------------------------------------------------------------------------------------------------
 

    (b) Any licensed manufacturer, licensed importer, or licensed dealer 
selling or otherwise disposing of a firearm from the licensee's personal 
firearms collection under this section shall be subject to the 
restrictions imposed by the Act and this part on the dispositions of 
firearms by persons other than licensed manufacturers, licensed 
importers, and licensed dealers.

(Approved by the Office of Management and Budget under control number 
1512-0387)

[T.D. ATF-270, 53 FR 10504, Mar. 31, 1988, as amended by T.D. ATF-313, 
56 FR 32509, July 17, 1991; T.D. ATF-415, 63 FR 58280, Oct. 29, 1998]



Sec. 178.126  Furnishing transaction information.

    (a) Each licensee shall, when required by letter issued by the 
Director of Industry Operations, and until notified to the contrary in 
writing by such officer, submit on Form 4483, Report of Firearms 
Transactions, for the periods and at the times specified in the letter 
issued by the Director of Industry Operations, all record information 
required by this subpart, or such lesser record information as the 
Director of Industry Operations in his letter may specify.
    (b) The Director of Industry Operations may authorize the 
information to be submitted in a manner other than that prescribed in 
paragraph (a) of this section when it is shown by a licensee that an 
alternate method of reporting is reasonably necessary and will not 
unduly hinder the effective administration of this part. A licensee who 
proposes to use an alternate method of reporting shall submit a letter 
application, in duplicate, to the Director of Industry Operations and 
shall describe the proposed alternate method of reporting and the need 
therefor. An alternate method of reporting shall not be employed by the 
licensee until approval in such regard is received from the Director of 
Industry Operations.

(Approved by the Office of Management and Budget under control number 
1512-0387)

[33 FR 18555, Dec. 14, 1968. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-172, 49 FR 14942, Apr. 16, 1984]

[[Page 1190]]



Sec. 178.126a  Reporting multiple sales or other disposition of pistols and revolvers.

    Each licensee shall prepare a report of multiple sales or other 
disposition whenever the licensee sells or otherwise disposes of, at one 
time or during any five consecutive business days, two or more pistols, 
or revolvers, or any combination of pistols and revolvers totaling two 
or more, to an unlicensed person: Provided, That a report need not be 
made where pistols or revolvers, or any combination thereof, are 
returned to the same person from whom they were received. The report 
shall be prepared on Form 3310.4, Report of Multiple Sale or Other 
Disposition of Pistols and Revolvers. Not later than the close of 
business on the day that the multiple sale or other disposition occurs, 
the licensee shall forward two copies of Form 3310.4 to the ATF office 
specified thereon and one copy to the State police or to the local law 
enforcement agency in which the sale or other disposition took place. 
Where the State or local law enforcement officials have notified the 
licensee that a particular official has been designated to receive Forms 
3310.4, the licensee shall forward such forms to that designated 
official. The licensee shall retain one copy of Form 3310.4 and attach 
it to the firearms transaction record, Form 4473, executed upon delivery 
of the pistols or revolvers.

    Example. 1. A licensee sells a pistol and revolver in a single 
transaction to an unlicensed person. This is a multiple sale and must be 
reported not later than the close of business on the date of the 
transaction.
    Example. 2. A licensee sells a pistol on Monday and sells a revolver 
on the following Friday to the same unlicensed person. This is a 
multiple sale and must be reported not later than the close of business 
on Friday. If the licensee sells the same unlicensed person another 
pistol or revolver on the following Monday, this would constitute an 
additional multiple sale and must also be reported.
    Example 3. A licensee maintaining business hours on Monday through 
Saturday sells a revolver to an unlicensed person on Monday and sells 
another revolver to the same person on the following Saturday. This does 
not constitute a multiple sale and need not be reported since the sales 
did not occur during five consecutive business days.

(Approved by the Office of Management and Budget under control number 
1512-0006)

[T.D. ATF-16, 40 FR 19202, May 2, 1975, as amended by T.D. ATF-172, 49 
FR 14942, Apr. 16, 1984; T.D. ATF-270, 53 FR 10505, Mar. 31, 1988; T.D. 
ATF-354, 59 FR 7113, Feb. 14, 1994; T.D. ATF-361, 60 FR 10787, Feb. 27, 
1995]



Sec. 178.127  Discontinuance of business.

    Where a licensed business is discontinued and succeeded by a new 
licensee, the records prescribed by this subpart shall appropriately 
reflect such facts and shall be delivered to the successor. Where 
discontinuance of the business is absolute, the records shall be 
delivered within 30 days following the business discontinuance to the 
ATF Out-of-Business Records Center, Spring Mills Office Park, 2029 
Stonewall Jackson Drive, Falling Waters, West Virginia 25419, or to any 
ATF office in the division in which the business was located: Provided, 
however, Where State law or local ordinance requires the delivery of 
records to other responsible authority, the Chief, National Licensing 
Center may arrange for the delivery of the records required by this 
subpart to such authority: Provided further, That where a licensed 
business is discontinued and succeeded by a new licensee, the records 
may be delivered within 30 days following the business discontinuance to 
the ATF Out-of-Business Records Center or to any ATF office in the 
division in which the business was located.

[T.D. ATF-290, 54 FR 53055, Dec. 27, 1989, as amended by T.D. ATF-363, 
60 FR 17455, Apr. 6, 1995]



Sec. 178.128  False statement or representation.

    (a) Any person who knowingly makes any false statement or 
representation in applying for any license or exemption or relief from 
disability, under the provisions of the Act, shall be fined not more 
than $5,000 or imprisoned not more than 5 years, or both.
    (b) Any person other than a licensed manufacturer, licensed 
importer, licensed dealer, or licensed collector who knowingly makes any 
false statement or representation with respect to any information 
required by the provisions

[[Page 1191]]

of the Act or this part to be kept in the records of a person licensed 
under the Act or this part shall be fined not more than $5,000 or 
imprisoned not more than 5 years, or both.
    (c) Any licensed manufacturer, licensed importer, licensed dealer, 
or licensed collector who knowingly makes any false statement or 
representation with respect to any information required by the 
provisions of the Act or this part to be kept in the records of a person 
licensed under the Act or this part shall be fined not more than $1,000 
or imprisoned not more than 1 year, or both.

[T.D. ATF-270, 53 FR 10505, Mar. 31, 1988]



Sec. 178.129  Record retention.

    (a) Records prior to Act. Licensed importers and licensed 
manufacturers may dispose of records of sale or other disposition of 
firearms prior to December 16, 1968. Licensed dealers and licensed 
collectors may dispose of all records of firearms transactions that 
occurred prior to December 16, 1968.
    (b) Firearms transaction record. Licensees shall retain each Form 
4473 and Form 4473(LV) for a period of not less than 20 years after the 
date of sale or disposition. Where a licensee has initiated a NICS check 
for a proposed firearms transaction, but the sale, delivery, or transfer 
of the firearm is not made, the licensee shall record any transaction 
number on the Form 4473, and retain the Form 4473 for a period of not 
less than 5 years after the date of the NICS inquiry. Forms 4473 shall 
be retained in the licensee's records as provided in Sec. 178.124(b): 
Provided, That Forms 4473 with respect to which a sale, delivery or 
transfer did not take place shall be separately retained in alphabetical 
(by name of transferee) or chronological (by date of transferee's 
certification) order.
    (c) Statement of intent to obtain a handgun, reports of multiple 
sales or other disposition of pistols and revolvers, and reports of 
theft or loss of firearms. Licensees shall retain each Form 5300.35 
(Statement of Intent to Obtain a Handgun(s)) for a period of not less 
than 5 years after notice of the intent to obtain the handgun was 
forwarded to the chief law enforcement officer, as defined in 
Sec. 178.150(c). Licensees shall retain each copy of Form 3310.4 (Report 
of Multiple Sale or Other Disposition of Pistols and Revolvers) for a 
period of not less than 5 years after the date of sale or other 
disposition. Licensees shall retain each copy of Form 3310.11 (Federal 
Firearms Licensee Theft/Loss Report) for a period of not less than 5 
years after the date the theft or loss was reported to ATF.
    (d) Records of importation and manufacture. Licensees will maintain 
permanent records of the importation, manufacture, or other acquisition 
of firearms, including ATF Forms 6 and 6A as required by subpart G of 
this part. Licensed importers' records and licensed manufacturers' 
records of the sale or other disposition of firearms after December 15, 
1968, shall be retained through December 15, 1988, after which records 
of transactions over 20 years of age may be discarded.
    (e) Records of dealers and collectors under the Act. The records 
prepared by licensed dealers and licensed collectors under the Act of 
the sale or other disposition of firearms and the corresponding record 
of receipt of such firearms shall be retained through December 15, 1988, 
after which records of transactions over 20 years of age may be 
discarded.
    (f) Retention of records of transactions in semiautomatic assault 
weapons. The documentation required by Secs. 178.40(c) and 178.132 shall 
be retained in the licensee's permanent records for a period of not less 
than 5 years after the date of sale or other disposition.

(Paragraph (b) approved by the Office of Management and Budget under 
control number 1512-0544; Paragraph (c) approved by the Office of 
Management and Budget under control numbers 1512-0520, 1512-0006, and 
1512-0524; Paragraph (f) approved by the Office of Management and Budget 
under control number 1512-0526; all other recordkeeping approved by the 
Office of Management and Budget under control number 1512-0129)

[T.D. ATF-208, 50 FR 26704, June 28, 1985 and correctly designated at 50 
FR 35081, Aug. 29, 1985, as amended by T.D. ATF-273, 53 FR 24687, June 
30, 1988; T.D. ATF-361, 60 FR 10787, Feb. 27, 1995; T.D. ATF-363, 60 FR 
17455, Apr. 6, 1995; T.D. ATF-415, 63 FR 58280, Oct. 29, 1998; T.D. ATF-
426, 65 FR 38201, June 20, 2000]

[[Page 1192]]



Sec. 178.131  Firearms transactions not subject to a NICS check.

    (a)(1) A licensed importer, licensed manufacturer, or licensed 
dealer whose sale, delivery, or transfer of a firearm is made pursuant 
to the alternative provisions of Sec. 178.102(d) and is not subject to 
the NICS check prescribed by Sec. 178.102(a) shall maintain the records 
required by paragraph (a) of this section.
    (2) If the transfer is pursuant to a permit or license in accordance 
with Sec. 178.102(d)(1), the licensee shall either retain a copy of the 
purchaser's permit or license and attach it to the firearms transaction 
record, Form 4473, or record on the firearms transaction record, Form 
4473, any identifying number, the date of issuance, and the expiration 
date (if provided) from the permit or license.
    (3) If the transfer is pursuant to a certification by ATF in 
accordance with Secs. 178.102(d)(3) and 178.150, the licensee shall 
maintain the certification as part of the records required to be kept 
under this subpart and for the period prescribed for the retention of 
Form 5300.35 in Sec. 178.129(c).
    (b) The requirements of this section shall be in addition to any 
other recordkeeping requirements contained in this part.

(Approved by the Office of Management and Budget under control number 
1512-0544)

[T.D. ATF-415, 63 FR 58280, Oct. 29, 1998]



Sec. 178.132  Dispositions of semiautomatic assault weapons and large capacity ammunition feeding devices to law enforcement officers for official use and to 
          employees or contractors of nuclear facilities.

    Licensed manufacturers, licensed importers, and licensed dealers in 
semiautomatic assault weapons, as well as persons who manufacture, 
import, or deal in large capacity ammunition feeding devices, may 
transfer such weapons and devices manufactured after September 13, 1994, 
to law enforcement officers and to employees or contractors of nuclear 
facilities with the following documentation:
    (a) Law enforcement officers. (1) A written statement from the 
purchasing officer, under penalty of perjury, stating that the weapon or 
device is being purchased for use in performing official duties and that 
the weapon or device is not being acquired for personal use or for 
purposes of transfer or resale; and
    (2) A written statement from a supervisor of the purchasing officer, 
on agency letterhead, under penalty of perjury, stating that the 
purchasing officer is acquiring the weapon or device for use in official 
duties, that the firearm is suitable for use in performing official 
duties, and that the weapon or device is not being acquired for personal 
use or for purposes of transfer or resale.
    (b) Employees or contractors of nuclear facilities. (1) Evidence 
that the employee is employed by a nuclear facility licensed pursuant to 
42 U.S.C. 2133 or evidence that the contractor has a valid contract with 
such a facility.
    (2) A written statement from the purchasing employee or contractor 
under penalty of perjury, stating that the weapon or device is being 
purchased for one of the purposes authorized in Sec. 178.40(b)(7) and 
178.40(b)(3), i.e., on-site physical protection, on-site or off-site 
training, or off-site transportation of nuclear materials.
    (3) A written statement from a supervisor of the purchasing employee 
or contractor, on agency or company letterhead, under penalty of 
perjury, stating that the purchasing employee or contractor is acquiring 
the weapon or device for use in official duties, and that the weapon or 
device is not being acquired for personal use or for purposes of 
transfer or resale.

(Approved by the Office of Management and Budget under control number 
1512-0526)

[T.D. ATF-396, 63 FR 12646, Mar. 16, 1998]



Sec. 178.133  Records of transactions in semiautomatic assault weapons.

    The evidence specified in Sec. 178.40(c), relating to transactions 
in semiautomatic assault weapons, shall be retained in the permanent 
records of the manufacturer or dealer and in the records of the licensee 
to whom the weapons are transferred.

(Approved by the Office of Management and Budget under control number 
1512-0526)

[T.D. ATF-363, 60 FR 17455, Apr. 6, 1995]

[[Page 1193]]



Sec. 178.134  Sale of firearms to law enforcement officers.

    (a) Law enforcement officers purchasing firearms for official use 
who provide the licensee with a certification on agency letterhead, 
signed by a person in authority within the agency (other than the 
officer purchasing the firearm), stating that the officer will use the 
firearm in official duties and that a records check reveals that the 
purchasing officer has no convictions for misdemeanor crimes of domestic 
violence are not required to complete Form 4473 or Form 5300.35. The law 
enforcement officer purchasing the firearm may purchase a firearm from a 
licensee in another State, regardless of where the officer resides or 
where the agency is located.
    (b)(1) The following individuals are considered to have sufficient 
authority to certify that law enforcement officers purchasing firearms 
will use the firearms in the performance of official duties:
    (i) In a city or county police department, the director of public 
safety or the chief or commissioner of police.
    (ii) In a sheriff's office, the sheriff.
    (iii) In a State police or highway patrol department, the 
superintendent or the supervisor in charge of the office to which the 
State officer or employee is assigned.
    (iv) In Federal law enforcement offices, the supervisor in charge of 
the office to which the Federal officer or employee is assigned.
    (2) An individual signing on behalf of the person in authority is 
acceptable, provided there is a proper delegation of authority.
    (c) Licensees are not required to prepare a Form 4473 or Form 
5300.35 covering sales of firearm made in accordance with paragraph (a) 
of this section to law enforcement officers for official use. However, 
disposition to the officer must be entered into the licensee's permanent 
records, and the certification letter must be retained in the licensee's 
files.

[T.D. ATF-401, 63 FR 35523, June 30, 1998]



            Subpart I--Exemptions, Seizures, and Forfeitures



Sec. 178.141  General.

    With the exception of Secs. 178.32(a)(9) and (d)(9) and 
178.99(c)(9), the provisions of this part shall not apply with respect 
to:
    (a) The transportation, shipment, receipt, possession, or 
importation of any firearm or ammunition imported for, sold or shipped 
to, or issued for the use of, the United States or any department or 
agency thereof or any State or any department, agency, or political 
subdivision thereof.
    (b) The shipment or receipt of firearms or ammunition when sold or 
issued by the Secretary of the Army pursuant to section 4308 of Title 
10, U.S.C., and the transportation of any such firearm or ammunition 
carried out to enable a person, who lawfully received such firearm or 
ammunition from the Secretary of the Army, to engage in military 
training or in competitions.
    (c) The shipment, unless otherwise prohibited by the Act or any 
other Federal law, by a licensed importer, licensed manufacturer, or 
licensed dealer to a member of the U.S. Armed Forces on active duty 
outside the United States or to clubs, recognized by the Department of 
Defense, whose entire membership is composed of such members of the U.S. 
Armed Forces, and such members or clubs may receive a firearm or 
ammunition determined by the Director to be generally recognized as 
particularly suitable for sporting purposes and intended for the 
personal use of such member or club. Before making a shipment of 
firearms or ammunition under the provisions of this paragraph, a 
licensed importer, licensed manufacturer, or licensed dealer may submit 
a written request, in duplicate, to the Director for a determination by 
the Director whether such shipment would constitute a violation of the 
Act or any other Federal law, or whether the firearm or ammunition is 
considered by the Director to be generally recognized as particularly 
suitable for sporting purposes.

[[Page 1194]]

    (d) The transportation, shipment, receipt, possession, or 
importation of any antique firearm.

[33 FR 18555, Dec. 14, 1968. Redesignated at 40 FR 10835, Apr. 15, 1975, 
and amended by T.D. ATF-241, 51 FR 39628, Oct. 29, 1986; T.D. ATF-270, 
53 FR 10505, Mar. 31, 1988; T.D. ATF-313, 56 FR 32509, July 17, 1991; 
T.D. ATF-401, 63 FR 35523, June 30, 1998]



Sec. 178.142  Effect of pardons and expunctions of convictions.

    (a) A pardon granted by the President of the United States regarding 
a Federal conviction for a crime punishable by imprisonment for a term 
exceeding 1 year shall remove any disability which otherwise would be 
imposed by the provisions of this part with respect to that conviction.
    (b) A pardon granted by the Governor of a State or other State 
pardoning authority or by the pardoning authority of a foreign 
jurisdiction with respect to a conviction, or any expunction, reversal, 
setting aside of a conviction, or other proceeding rendering a 
conviction nugatory, or a restoration of civil rights shall remove any 
disability which otherwise would be imposed by the provisions of this 
part with respect to the conviction, unless:
    (1) The pardon, expunction, setting aside, or other proceeding 
rendering a conviction nugatory, or restoration of civil rights 
expressly provides that the person may not ship, transport, possess or 
receive firearms; or
    (2) The pardon, expunction, setting aside, or other proceeding 
rendering a conviction nugatory, or restoration of civil rights did not 
fully restore the rights of the person to possess or receive firearms 
under the law of the jurisdiction where the conviction occurred.

[T.D. ATF-270, 53 FR 10505, Mar. 31, 1988]



Sec. 178.143  Relief from disabilities incurred by indictment.

    A licensed importer, licensed manufacturer, licensed dealer, or 
licensed collector who is indicted for a crime punishable by 
imprisonment for a term exceeding 1 year may, notwithstanding any other 
provision of the Act, continue operations pursuant to his existing 
license during the term of such indictment and until any conviction 
pursuant to the indictment becomes final: Provided, That if the term of 
the license expires during the period between the date of the indictment 
and the date the conviction thereunder becomes final, such importer, 
manufacturer, dealer, or collector must file a timely application for 
the renewal of his license in order to continue operations. Such 
application shall show that the applicant is under indictment for a 
crime punishable by imprisonment for a term exceeding 1 year.



Sec. 178.144  Relief from disabilities under the Act.

    (a) Any person may make application for relief from the disabilities 
under section 922 (g) and (n) of the Act (see Sec. 178.32).
    (b) An application for such relief shall be filed, in triplicate, 
with the Director. It shall include the information required by this 
section and such other supporting data as the Director and the applicant 
deem appropriate.
    (c) Any record or document of a court or other government entity or 
official required by this paragraph to be furnished by an applicant in 
support of an application for relief shall be certified by the court or 
other government entity or official as a true copy. An application shall 
include:
    (1) In the case of an applicant who is an individual, a written 
statement from each of 3 references, who are not related to the 
applicant by blood or marriage and have known the applicant for at least 
3 years, recommending the granting of relief;
    (2) Written consent to examine and obtain copies of records and to 
receive statements and information regarding the applicant's background, 
including records, statements and other information concerning 
employment, medical history, military service, and criminal record;
    (3) In the case of an applicant under indictment, a copy of the 
indictment or information;
    (4) In the case of an applicant having been convicted of a crime 
punishable by imprisonment for a term exceeding 1 year, a copy of the 
indictment or information on which the applicant was convicted, the 
judgment of conviction or record of any plea of nolo

[[Page 1195]]

contendere or plea of guilty or finding of guilt by the court, and any 
pardon, expunction, setting aside or other record purporting to show 
that the conviction was rendered nugatory or that civil rights were 
restored;
    (5) In the case of an applicant who has been adjudicated a mental 
defective or committed to a mental institution, a copy of the order of a 
court, board, commission, or other lawful authority that made the 
adjudication or ordered the commitment, any petition that sought to have 
the applicant so adjudicated or committed, any medical records 
reflecting the reasons for commitment and diagnoses of the applicant, 
and any court order or finding of a court, board, commission, or other 
lawful authority showing the applicant's discharge from commitment, 
restoration of mental competency and the restoration of rights;
    (6) In the case of an applicant who has been discharged from the 
Armed Forces under dishonorable conditions, a copy of the applicant's 
summary of service record (Department of Defense Form 214), charge sheet 
(Department of Defense Form 458), and final court martial order;
    (7) In the case of an applicant who, having been a citizen of the 
United States, has renounced his or her citizenship, a copy of the 
formal renunciation of nationality before a diplomatic or consular 
officer of the United States in a foreign state or before an officer 
designated by the Attorney General when the United States was in a state 
of war (see 8 U.S.C. 1481(a) (5) and (6)); and
    (8) In the case of an applicant who has been convicted of a 
misdemeanor crime of domestic violence, a copy of the indictment or 
information on which the applicant was convicted, the judgment of 
conviction or record of any plea of nolo contendere or plea of guilty or 
finding of guilt by the court, and any pardon, expunction, setting aside 
or other record purporting to show that the conviction was rendered 
nugatory or that civil rights were restored.
    (d) The Director may grant relief to an applicant if it is 
established to the satisfaction of the Director that the circumstances 
regarding the disability, and the applicant's record and reputation, are 
such that the applicant will not be likely to act in a manner dangerous 
to public safety, and that the granting of the relief would not be 
contrary to the public interest. The Director will not ordinarily grant 
relief if the applicant has not been discharged from parole or probation 
for a period of at least 2 years. Relief will not be granted to an 
applicant who is prohibited from possessing all types of firearms by the 
law of the State where such applicant resides.
    (e) In addition to meeting the requirements of paragraph (d) of this 
section, an applicant who has been adjudicated a mental defective or 
committed to a mental institution will not be granted relief unless the 
applicant was subsequently determined by a court, board, commission, or 
other lawful authority to have been restored to mental competency, to be 
no longer suffering from a mental disorder, and to have had all rights 
restored.
    (f) Upon receipt of an incomplete or improperly executed application 
for relief, the applicant shall be notified of the deficiency in the 
application. If the application is not corrected and returned within 30 
days following the date of notification, the application shall be 
considered as having been abandoned.
    (g) Whenever the Director grants relief to any person pursuant to 
this section, a notice of such action shall be promptly published in the 
Federal Register, together with the reasons therefor.
    (h) A person who has been granted relief under this section shall be 
relieved of any disabilities imposed by the Act with respect to the 
acquisition, receipt, transfer, shipment, transportation, or possession 
of firearms or ammunition and incurred by reason of such disability.
    (i)(1) A licensee who incurs disabilities under the Act (see 
Sec. 178.32(a)) during the term of a current license or while the 
licensee has pending a license renewal application, and who files an 
application for removal of such disabilities, shall not be barred from 
licensed operations for 30 days following the date on which the 
applicant was first subject to such disabilities (or 30 days

[[Page 1196]]

after the date upon which the conviction for a crime punishable by 
imprisonment for a term exceeding 1 year becomes final), and if the 
licensee files the application for relief as provided by this section 
within such 30-day period, the licensee may further continue licensed 
operations during the pendency of the application. A licensee who does 
not file such application within such 30-day period shall not continue 
licensed operations beyond 30 days following the date on which the 
licensee was first subject to such disabilities (or 30 days from the 
date the conviction for a crime punishable by imprisonment for a term 
exceeding 1 year becomes final).
    (2) In the event the term of a license of a person expires during 
the 30-day period specified in paragraph (i)(1) of this section, or 
during the pendency of the application for relief, a timely application 
for renewal of the license must be filed in order to continue licensed 
operations. Such license application shall show that the applicant is 
subject to Federal firearms disabilities, shall describe the event 
giving rise to such disabilities, and shall state when the disabilities 
were incurred.
    (3) A licensee shall not continue licensed operations beyond 30 days 
following the date the Director issues notification that the licensee's 
applications for removal of disabilities has been denied.
    (4) When as provided in this paragraph a licensee may no longer 
continue licensed operations, any application for renewal of license 
filed by the licensee during the pendency of the application for removal 
of disabilities shall be denied by the Director of Industry Operations.

[T.D. ATF-270, 53 FR 10506, Mar. 31, 1988, as amended by T.D. ATF-313, 
56 FR 32509, July 17, 1991; 56 FR 43649, Sept. 3, 1991; T.D. ATF-401, 63 
FR 35523, June 30, 1998]



Sec. 178.145  Research organizations.

    The provisions of Sec. 178.98 with respect to the sale or delivery 
of destructive devices, machine guns, short-barreled shotguns, and 
short-barreled rifles shall not apply to the sale or delivery of such 
devices and weapons to any research organization designated by the 
Director to receive same. A research organization desiring such 
designation shall submit a letter application, in duplicate, to the 
Director. Such application shall contain the name and address of the 
research organization, the names and addresses of the persons directing 
or controlling, directly or indirectly, the policies and management of 
such organization, the nature and purpose of the research being 
conducted, a description of the devices and weapons to be received, and 
the identity of the person or persons from whom such devices and weapons 
are to be received.

[T.D. ATF-270, 53 FR 10507, Mar. 31, 1988]



Sec. 178.146  Deliveries by mail to certain persons.

    The provisions of this part shall not be construed as prohibiting a 
licensed importer, licensed manufacturer, or licensed dealer from 
depositing a firearm for conveyance in the mails to any officer, 
employee, agent, or watchman who, pursuant to the provisions of section 
1715 of title 18, U.S.C., is eligible to receive through the mails 
pistols, revolvers, and other firearms capable of being concealed on the 
person, for use in connection with his official duties.



Sec. 178.147  Return of firearm.

    A person not otherwise prohibited by Federal, State or local law may 
ship a firearm to a licensed importer, licensed manufacturer, or 
licensed dealer for any lawful purpose, and, notwithstanding any other 
provision of this part, the licensed manufacturer, licensed importer, or 
licensed dealer may return in interstate or foreign commerce to that 
person the firearm or a replacement firearm of the same kind and type. 
See Sec. 178.124(a) for requirements of a Form 4473 prior to return. A 
person not otherwise prohibited by Federal, State or local law may ship 
a firearm curio or relic to a licensed collector for any lawful purpose, 
and, notwithstanding any other provision of this part, the licensed 
collector may return in interstate or foreign commerce to that person 
the firearm curio or relic.

[T.D. ATF-270, 53 FR 10507, Mar. 31, 1988]

[[Page 1197]]



Sec. 178.148  Armor piercing ammunition intended for sporting or industrial purposes.

    The Director may exempt certain armor piercing ammunition from the 
requirements of this part. A person who desires to obtain an exemption 
under this section for any such ammunition which is primarily intended 
for sporting purposes or intended for industrial purposes, including 
charges used in oil and gas well perforating devices, shall submit a 
written request to the Director. Each request shall be executed under 
the penalties of perjury and contain a complete and accurate description 
of the ammunition, the name and address of the manufacturer or importer, 
the purpose of and use for which it is designed and intended, and any 
photographs, diagrams, or drawings as may be necessary to enable the 
Director to make a determination. The Director may require that a sample 
of the ammunition be submitted for examination and evaluation.

[T.D. ATF-270, 53 FR 10507, Mar. 31, 1988]



Sec. 178.149  Armor piercing ammunition manufactured or imported for the purpose of testing or experimentation.

    The provisions of Secs. 178.37 and 178.99(d) with respect to the 
manufacture or importation of armor piercing ammunition and the sale or 
delivery of armor piercing ammunition by manufacturers and importers 
shall not apply to the manufacture, importation, sale or delivery of 
armor piercing ammunition for the purpose of testing or experimentation 
as authorized by the Director. A person desiring such authorization to 
receive armor piercing ammunition shall submit a letter application, in 
duplicate, to the Director. Such application shall contain the name and 
addresses of the persons directing or controlling, directly or 
indirectly, the policies and management of the applicant, the nature or 
purpose of the testing or experimentation, a description of the armor 
piercing ammunition to be received, and the identity of the manufacturer 
or importer from whom such ammunition is to be received. The approved 
application shall be submitted to the manufacturer or importer who shall 
retain a copy as part of the records required by subpart H of this part.

[T.D. ATF-270, 53 FR 10507, Mar. 31, 1988]



Sec. 178.150  Alternative to NICS in certain geographical locations.

    (a) The provisions of Sec. 178.102(d)(3) shall be applicable when 
the Director has certified that compliance with the provisions of 
Sec. 178.102(a)(1) is impracticable because:
    (1) The ratio of the number of law enforcement officers of the State 
in which the transfer is to occur to the number of square miles of land 
area of the State does not exceed 0.0025;
    (2) The business premises of the licensee at which the transfer is 
to occur are extremely remote in relation to the chief law enforcement 
officer; and
    (3) There is an absence of telecommunications facilities in the 
geographical area in which the business premises are located.
    (b) A licensee who desires to obtain a certification under this 
section shall submit a written request to the Director. Each request 
shall be executed under the penalties of perjury and contain information 
sufficient for the Director to make such certification. Such information 
shall include statistical data, official reports, or other statements of 
government agencies pertaining to the ratio of law enforcement officers 
to the number of square miles of land area of a State and statements of 
government agencies and private utility companies regarding the absence 
of telecommunications facilities in the geographical area in which the 
licensee's business premises are located.
    (c) For purposes of this section and Sec. 178.129(c), the ``chief 
law enforcement officer'' means the chief of police, the sheriff, or an 
equivalent officer or the designee of any such individual.

(Approved by the Office of Management and Budget under control number 
1512-0544)

[T.D. ATF-415, 63 FR 58280, Oct. 29, 1998]



Sec. 178.151  Semiautomatic rifles or shotguns for testing or experimentation.

    (a) The provisions of Sec. 178.39 shall not apply to the assembly of 
semiautomatic rifles or shotguns for the purpose

[[Page 1198]]

of testing or experimentation as authorized by the Director.
    (b) A person desiring authorization to assemble nonsporting 
semiautomatic rifles or shotguns shall submit a written request, in 
duplicate, to the Director. Each such request shall be executed under 
the penalties of perjury and shall contain a complete and accurate 
description of the firearm to be assembled, and such diagrams or 
drawings as may be necessary to enable the Director to make a 
determination. The Director may require the submission of the firearm 
parts for examination and evaluation. If the submission of the firearm 
parts is impractical, the person requesting the authorization shall so 
advise the Director and designate the place where the firearm parts will 
be available for examination and evaluation.

[T.D. ATF-346, 58 FR 40590, July 29, 1993]



Sec. 178.152  Seizure and forfeiture.

    (a) Any firearm or ammunition involved in or used in any knowing 
violation of subsections (a)(4), (a)(6), (f), (g), (h), (i), (j), or (k) 
of section 922 of the Act, or knowing importation or bringing into the 
United States or any possession thereof any firearm or ammunition in 
violation of section 922(l) of the Act, or knowing violation of section 
924 of the Act, or willful violation of any other provision of the Act 
or of this part, or any violation of any other criminal law of the 
United States, or any firearm or ammunition intended to be used in any 
offense referred to in paragraph (c) of this section, where such intent 
is demonstrated by clear and convincing evidence, shall be subject to 
seizure and forfeiture, and all provisions of the Internal Revenue Code 
of 1986 relating to the seizure, forfeiture, and disposition of 
firearms, as defined in section 5845(a) of that Code, shall, so far as 
applicable, extend to seizures and forfeitures under the provisions of 
the Act: Provided, That upon acquittal of the owner or possessor, or 
dismissal of the charges against such person other than upon motion of 
the Government prior to trial, or lapse of or court termination of the 
restraining order to which he is subject, the seized or relinquished 
firearms or ammunition shall be returned forthwith to the owner or 
possessor or to a person delegated by the owner or possessor unless the 
return of the firearms or ammunition would place the owner or possessor 
or the delegate of the owner or possessor in violation of law. Any 
action or proceeding for the forfeiture of firearms or ammunition shall 
be commenced within 120 days of such seizure.
    (b) Only those firearms or quantities of ammunition particularly 
named and individually identified as involved in or used in any 
violation of the provisions of the Act or this part, or any other 
criminal law of the United States or as intended to be used in any 
offense referred to in paragraph (c) of this section, where such intent 
is demonstrated by clear and convincing evidence, shall be subject to 
seizure, forfeiture and disposition.
    (c) The offenses referred to in paragraphs (a) and (b) of this 
section for which firearms and ammunition intended to be used in such 
offenses are subject to seizure and forfeiture are:
    (1) Any crime of violence, as that term is defined in section 
924(c)(3) of the Act;
    (2) Any offense punishable under the Controlled Substances Act (21 
U.S.C. 801 et seq.) or the Controlled Substances Import and Export Act 
(21 U.S.C. 951 et seq.);
    (3) Any offense described in section 922(a)(1), 922(a)(3), 
922(a)(5), or 922(b)(3) of the Act, where the firearm or ammunition 
intended to be used in such offense is involved in a pattern of 
activities which includes a violation of any offense described in 
section 922(a)(1), 922(a)(3), 922(a)(5), or 922(b)(3) of the Act;
    (4) Any offense described in section 922(d) of the Act where the 
firearm or ammunition is intended to be used in such offense by the 
transferor of such firearm or ammunition;
    (5) Any offense described in section 922(i), 922(j), 922(l), 922(n), 
or 924(b) of the Act; and
    (6) Any offense which may be prosecuted in a court of the United 
States

[[Page 1199]]

which involves the exportation of firearms or ammunition.

[T.D. ATF-270, 53 FR 10507, Mar. 31, 1988; Redesignated by T.D. ATF-354, 
59 FR 7114, Feb. 14, 1994, and further redesignated by T.D. ATF-361, 60 
FR 10788, Feb. 27, 1995; T.D. ATF-363, 60 FR 17455, Apr. 6, 1995]



Sec. 178.153  Semiautomatic assault weapons and large capacity ammunition feeding devices manufactured or imported for the purposes of testing or 
          experimentation.

    The provisions of Sec. 178.40 with respect to the manufacture, 
transfer, or possession of a semiautomatic assault weapon, and 
Sec. 178.40a with respect to large capacity ammunition feeding devices, 
shall not apply to the manufacture, transfer, or possession of such 
weapons or devices by a manufacturer or importer for the purposes of 
testing or experimentation as authorized by the Director. A person 
desiring such authorization shall submit a letter application, in 
duplicate, to the Director. Such application shall contain the name and 
addresses of the persons directing or controlling, directly or 
indirectly, the policies and management of the applicant, the nature or 
purpose of the testing or experimentation, a description of the weapons 
or devices to be manufactured or imported, and the source of the weapons 
or devices. The approved application shall be retained as part of the 
records required by subpart H of this part.

[T.D. ATF-363, 60 FR 17456, Apr. 6, 1995]

Subpart J [Reserved]



                         Subpart K--Exportation



Sec. 178.171  Exportation.

    Firearms and ammunition shall be exported in accordance with the 
applicable provisions of section 38 of the Arms Export Control Act (22 
U.S.C. 2778) and regulations thereunder. However, licensed 
manufacturers, licensed importers, and licensed dealers exporting 
firearms shall maintain records showing the manufacture or acquisition 
of the firearms as required by this part and records showing the name 
and address of the foreign consignee of the firearms and the date the 
firearms were exported. Licensed manufacturers and licensed importers 
exporting armor piercing ammunition and semiautomatic assault weapons 
manufactured after September 13, 1994, shall maintain records showing 
the name and address of the foreign consignee and the date the armor 
piercing ammunition or semiautomatic assault weapons were exported.

[T.D. ATF-270, 53 FR 10507, Mar. 31, 1988; T.D. ATF-363, 60 FR 17456, 
Apr. 6, 1995]



PART 179--MACHINE GUNS, DESTRUCTIVE DEVICES, AND CERTAIN OTHER FIREARMS--Table of Contents




                     Subpart A--Scope of Regulations

Sec.
179.1  General.

                         Subpart B--Definitions

179.11  Meaning of terms.

         Subpart C--Administrative and Miscellaneous Provisions

179.21  Forms prescribed.
179.22  Right of entry and examination.
179.23  Restrictive use of required information.
179.24  Destructive device determination.
179.25  Collector's items.
179.26  Alternate methods or procedures; emergency variations from 
          requirements.

                 Subpart D--Special (Occupational) Taxes

179.31  Liability for tax.
179.32  Special (occupational) tax rates.
179.32a  Reduced rate of tax for small importers and manufacturers.
179.33  Special exemption.
179.34  Special tax registration and return.
179.35  Employer identification number.
179.36  The special tax stamp, receipt for special (occupational) taxes.
179.37  Certificates in lieu of stamps lost or destroyed.
179.38  Engaging in business at more than one location.
179.39  Engaging in more than one business at the same location.
179.40  Partnership liability.
179.41  Single sale.

                           Change of Ownership

179.42  Changes through death of owner.
179.43  Changes through bankruptcy of owner.
179.44  Change in partnership or unincorporated association.

[[Page 1200]]

179.45  Changes in corporation.

                       Change of Business Location

179.46  Notice by taxpayer.

                          Change of Trade Name

179.47  Notice by taxpayer.

                         Penalties and Interest

179.48  Failure to pay special (occupational) tax.
179.49  Failure to register change or removal.
179.50  Delinquency.
179.51  Fraudulent return.

                        Application of State Laws

179.52  State regulations.

                    Subpart E--Tax on Making Firearms

179.61  Rate of tax.

                      Application To Make a Firearm

179.62  Application to make.
179.63  Identification of applicant.
179.64  Procedure for approval of application.
179.65  Denial of application.
179.66  Subsequent transfer of firearms.
179.67  Cancellation of stamp.

                  Exceptions to Tax on Making Firearms

179.68  Qualified manufacturer.
179.69  Making a firearm for the United States.
179.70  Certain government entities.

                              Registration

179.71  Proof of registration.

                         Subpart F--Transfer Tax

179.81  Scope of tax.
179.82  Rate of tax.
179.83  Transfer tax in addition to import duty.

              Application and Order for Transfer of Firearm

179.84  Application to transfer.
179.85  Identification of transferee.
179.86  Action on application.
179.87  Cancellation of stamp.

              Exemptions Relating to Transfers of Firearms

179.88  Special (occupational) taxpayers.
179.89  Transfers to the United States.
179.90  Certain government entities.
179.91  Unserviceable firearms.
179.92  Transportation of firearms to effect transfer.

                            Other Provisions

179.93  Transfers of firearms to certain persons.

         Subpart G--Registration and Identification of Firearms

179.101  Registration of firearms.
179.102  How must firearms be identified?
179.103  Registration of firearms manufactured.
179.104  Registration of firearms by certain governmental entities.

                              Machine Guns

179.105  Transfer and possession of machine guns.

                 Subpart H--Importation and Exportation

                               Importation

179.111  Procedure.
179.112  Registration of imported firearms.
179.113  Conditional importation.

                               Exportation

179.114  Application and permit for exportation of firearms.
179.115  Action by Director.
179.116  Procedure by exporter.
179.117  Action by Customs.
179.118  Proof of exportation.
179.119  Transportation of firearms to effect exportation.
179.120  Refunds.
179.121  Insular possessions.

                         Arms Export Control Act

179.122  Requirements.

                     Subpart I--Records and Returns

179.131  Records.

             Subpart J--Stolen or Lost Firearms or Documents

179.141  Stolen or lost firearms.
179.142  Stolen or lost documents.

               Subpart K--Examination of Books and Records

179.151  Failure to make returns: Substitute returns.
179.152  Penalties (records and returns).

               Subpart L--Distribution and Sale of Stamps

179.161  National Firearms Act stamps.
179.162  Stamps authorized.
179.163  Reuse of stamps prohibited.

[[Page 1201]]

       Subpart M--Redemption of or Allowance for Stamps or Refunds

179.171  Redemption of or allowance for stamps.
179.172  Refunds.

                  Subpart N--Penalties and Forfeitures

179.181  Penalties.
179.182  Forfeitures.

                    Subpart O--Other Laws Applicable

179.191  Applicability of other provisions of internal revenue laws.
179.192  Commerce in firearms and ammunition.
179.193  Arms Export Control Act.

    Authority: 26 U.S.C. 7805.

    Source: 36 FR 14256, Aug. 3, 1971, unless otherwise noted. 
Redesignated at 40 FR 16835, Apr. 15, 1975.



                     Subpart A--Scope of Regulations



Sec. 179.1  General.

    This part contains the procedural and substantive requirements 
relative to the importation, manufacture, making, exportation, 
identification and registration of, and the dealing in, machine guns, 
destructive devices and certain other firearms under the provisions of 
the National Firearms Act (26 U.S.C. Chapter 53).

[36 FR 14256, Aug. 3, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55842, Sept. 28, 1979]



                         Subpart B--Definitions



Sec. 179.11  Meaning of terms.

    When used in this part and in forms prescribed under this part, 
where not otherwise distinctly expressed or manifestly incompatible with 
the intent thereof, terms shall have the meanings ascribed in this 
section. Words in the plural form shall include the singular, and vice 
versa, and words importing the masculine gender shall include the 
feminine. The terms ``includes'' and ``including'' do not exclude other 
things not enumerated which are in the same general class or are 
otherwise within the scope thereof.
    Antique firearm. Any firearm not designed or redesigned for using 
rim fire or conventional center fire ignition with fixed ammunition and 
manufactured in or before 1898 (including any matchlock, flintlock, 
percussion cap, or similar type of ignition system or replica thereof, 
whether actually manufactured before or after the year 1898) and also 
any firearm using fixed ammunition manufactured in or before 1898, for 
which ammunition is no longer manufactured in the United States and is 
not readily available in the ordinary channels of commercial trade.
    Any other weapon. Any weapon or device capable of being concealed on 
the person from which a shot can be discharged through the energy of an 
explosive, a pistol or revolver having a barrel with a smooth bore 
designed or redesigned to fire a fixed shotgun shell, weapons with 
combination shotgun and rifle barrels 12 inches or more, less than 18 
inches in length, from which only a single discharge can be made from 
either barrel without manual reloading, and shall include any such 
weapon which may be readily restored to fire. Such term shall not 
include a pistol or a revolver having a rifled bore, or rifled bores, or 
weapons designed, made, or intended to be fired from the shoulder and 
not capable of firing fixed ammunition.
    ATF officer. An officer or employee of the Bureau of Alcohol, 
Tobacco and Firearms (ATF) authorized to perform any function relating 
to the administration or enforcement of this part.
    Customs officer. Any officer of the Customs Service or any 
commissioned, warrant, or petty officer of the Coast Guard, or any agent 
or other person authorized by law or designated by the Secretary of the 
Treasury to perform any duties of an officer of the Customs Service.
    Dealer. Any person, not a manufacturer or importer, engaged in the 
business of selling, renting, leasing, or loaning firearms and shall 
include pawnbrokers who accept firearms as collateral for loans.
    Destructive device. (a) Any explosive, incendiary, or poison gas (1) 
bomb, (2) grenade, (3) rocket having a propellent charge of more than 4 
ounces, (4) missile having an explosive or incendiary charge of more 
than one-quarter ounce, (5) mine, or (6) similar device; (b) any

[[Page 1202]]

type of weapon by whatever name known which will, or which may be 
readily converted to, expel a projectile by the action of an explosive 
or other propellant, the barrel or barrels of which have a bore of more 
than one-half inch in diameter, except a shotgun or shotgun shell which 
the Director finds is generally recognized as particularly suitable for 
sporting purposes; and (c) any combination of parts either designed or 
intended for use in converting any device into a destructive device as 
described in paragraphs (a) and (b) of this definition and from which a 
destructive device may be readily assembled. The term shall not include 
any device which is neither designed or redesigned for use as a weapon; 
any device, although originally designed for use as a weapon, which is 
redesigned for use as a signaling, pyrotechnic, line throwing, safety, 
or similar device; surplus ordnance sold, loaned, or given by the 
Secretary of the Army under 10 U.S.C. 4684(2), 4685, or 4686, or any 
device which the Director finds is not likely to be used as a weapon, or 
is an antique or is a rifle which the owner intends to use solely for 
sporting purposes.
    Director. The Director, Bureau of Alcohol, Tobacco, and Firearms, 
the Department of the Treasury, Washington, DC.
    Director of the Service Center. A director of an Internal Revenue 
Service Center in an internal revenue region.
    District director. A district director of the Internal Revenue 
Service in an internal revenue district.
    Executed under penalties of perjury. Signed with the prescribed 
declaration under the penalties of perjury as provided on or with 
respect to the return, form, or other document or, where no form of 
declaration is prescribed, with the declaration:

    ``I declare under the penalties of perjury that this--(insert type 
of document, such as, statement, application, request, certificate), 
including the documents submitted in support thereof, has been examined 
by me and, to the best of my knowledge and belief, is true, correct, and 
complete.''

    Exportation. The severance of goods from the mass of things 
belonging to this country with the intention of uniting them to the mass 
of things belonging to some foreign country.
    Exporter. Any person who exports firearms from the United States.
    Firearm. (a) A shotgun having a barrel or barrels of less than 18 
inches in length; (b) a weapon made from a shotgun if such weapon as 
modified has an overall length of less than 26 inches or a barrel or 
barrels of less than 18 inches in length; (c) a rifle having a barrel or 
barrels of less than 16 inches in length; (d) a weapon made from a rifle 
if such weapon as modified has an overall length of less than 26 inches 
or a barrel or barrels of less than 16 inches in length; (e) any other 
weapon, as defined in this subpart; (f) a machine gun; (g) a muffler or 
a silencer for any firearm whether or not such firearm is included 
within this definition; and (h) a destructive device. The term shall not 
include an antique firearm or any device (other than a machine gun or 
destructive device) which, although designed as a weapon, the Director 
finds by reason of the date of its manufacture, value, design, and other 
characteristics is primarily a collector's item and is not likely to be 
used as a weapon. For purposes of this definition, the length of the 
barrel having an integral chamber(s) on a shotgun or rifle shall be 
determined by measuring the distance between the muzzle and the face of 
the bolt, breech, or breech block when closed and when the shotgun or 
rifle is cocked. The overall length of a weapon made from a shotgun or 
rifle is the distance between the extreme ends of the weapon measured 
along a line parallel to the center line of the bore.
    Fixed ammunition. That self-contained unit consisting of the case, 
primer, propellant charge, and projectile or projectiles.
    Frame or receiver. That part of a firearm which provides housing for 
the hammer, bolt or breechblock and firing mechanism, and which is 
usually threaded at its forward portion to receive the barrel.
    Importation. The bringing of a firearm within the limits of the 
United States or any territory under its control or jurisdiction, from a 
place outside thereof (whether such place be a foreign country or 
territory subject to the jurisdiction of the United States), with intent

[[Page 1203]]

to unlade. Except that, bringing a firearm from a foreign country or a 
territory subject to the jurisdiction of the United States into a 
foreign trade zone for storage pending shipment to a foreign country or 
subsequent importation into this country, under Title 26 of the United 
States Code, and this part, shall not be deemed importation.
    Importer. Any person who is engaged in the business of importing or 
bringing firearms into the United States.
    Machine gun. Any weapon which shoots, is designed to shoot, or can 
be readily restored to shoot, automatically more than one shot, without 
manual reloading, by a single function of the trigger. The term shall 
also include the frame or receiver of any such weapon, any part designed 
and intended solely and exclusively, or combination of parts designed 
and intended, for use in converting a weapon into a machine gun, and any 
combination of parts from which a machine gun can be assembled if such 
parts are in the possession or under the control of a person.
    Make. This term and the various derivatives thereof shall include 
manufacturing (other than by one qualified to engage in such business 
under this part), putting together, altering, any combination of these, 
or otherwise producing a firearm.
    Manual reloading. The inserting of a cartridge or shell into the 
chamber of a firearm either with the hands or by means of a mechanical 
device controlled and energized by the hands.
    Manufacturer. Any person who is engaged in the business of 
manufacturing firearms.
    Muffler or silencer. Any device for silencing, muffling, or 
diminishing the report of a portable firearm, including any combination 
of parts, designed or redesigned, and intended for the use in assembling 
or fabricating a firearm silencer or firearm muffler, and any part 
intended only for use in such assembly or fabrication.
    Person. A partnership, company, association, trust, estate, or 
corporation, as well as a natural person.
    Pistol. A weapon originally designed, made, and intended to fire a 
projectile (bullet) from one or more barrels when held in one hand, and 
having (a) a chamber(s) as an integral part(s) of, or permanently 
aligned with, the bore(s); and (b) a short stock designed to be gripped 
by one hand and at an angle to and extending below the line of the 
bore(s).
    Regional director (compliance). The principal ATF regional official 
responsible for administering regulations in this part.
    Revolver. A projectile weapon, of the pistol type, having a 
breechloading chambered cylinder so arranged that the cocking of the 
hammer or movement of the trigger rotates it and brings the next 
cartridge in line with the barrel for firing.
    Rifle. A weapon designed or redesigned, made or remade, and intended 
to be fired from the shoulder and designed or redesigned and made or 
remade to use the energy of the explosive in a fixed cartridge to fire 
only a single projectile through a rifled bore for each single pull of 
the trigger, and shall include any such weapon which may be readily 
restored to fire a fixed cartridge.
    Shotgun. A weapon designed or redesigned, made or remade, and 
intended to be fired from the shoulder and designed or redesigned and 
made or remade to use the energy of the explosive in a fixed shotgun 
shell to fire through a smooth bore either a number of projectiles (ball 
shot) or a single projectile for each pull of the trigger, and shall 
include any such weapon which may be readily restored to fire a fixed 
shotgun shell.
    Transfer. This term and the various derivatives thereof shall 
include selling, assigning, pledging, leasing, loaning, giving away, or 
otherwise disposing of.
    United States. The States and the District of Columbia.
    U.S.C. The United States Code.
    Unserviceable firearm. A firearm which is incapable of discharging a 
shot by means of an explosive and incapable of

[[Page 1204]]

being readily restored to a firing condition.

(26 U.S.C. 7805 (68A Stat. 917), 27 U.S.C. 205 (49 Stat. 981 as 
amended), 18 U.S.C. 926 (82 Stat. 959), and sec. 38, Arms Export Control 
Act (22 U.S.C. 2778, 90 Stat. 744))

[T.D. ATF-48, 43 FR 13538, Mar. 31, 1978; 44 FR 55842, Sept. 28, 1979; 
T.D. ATF-241, 51 FR 39630, Oct. 29, 1986; T.D. ATF-270, 53 FR 10492, 
Mar. 31, 1988; T.D. ATF-396, 63 FR 12647, Mar. 16, 1998]



         Subpart C--Administrative and Miscellaneous Provisions



Sec. 179.21  Forms prescribed.

    (a) The Director is authorized to prescribe all forms required by 
this part. All of the information called for in each form shall be 
furnished as indicated by the headings on the form and the instructions 
on or pertaining to the form. In addition, information called for in 
each form shall be furnished as required by this part. Each form 
requiring that it be executed under penalties of perjury shall be 
executed under penalties of perjury.
    (b) Requests for forms should be mailed to the ATF Distribution 
Center, 7943 Angus Court, Springfield, Virginia 22153.

(5 U.S.C. 552(a); 80 Stat. 383, as amended)

[T.D. ATF-92, 46 FR 46916, Sept. 23, 1981, as amended by T.D. ATF-241, 
51 FR 39630, Oct. 29, 1986; T.D. ATF-270, 53 FR 10508, Mar. 31, 1988; 
T.D. 372, 61 FR 20725, May 8, 1996]



Sec. 179.22  Right of entry and examination.

    Any ATF officer or employee of the Bureau of Alcohol, Tobacco and 
Firearms duly authorized to perform any function relating to the 
administration or enforcement of this part may enter during business 
hours the premises (including places of storage) of any importer or 
manufacturer of or dealer in firearms, to examine any books, papers, or 
records required to be kept pursuant to this part, and any firearms kept 
by such importer, manufacturer or dealer on such premises, and may 
require the production of any books, papers, or records necessary to 
determine any liability for tax under 26 U.S.C. Chapter 53, or the 
observance of 26 U.S.C. Chapter 53, and this part.

[36 FR 14256, Aug. 3, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55842, Sept. 28, 1979]



Sec. 179.23  Restrictive use of required information.

    No information or evidence obtained from an application, 
registration, or record required to be submitted or retained by a 
natural person in order to comply with any provision of 26 U.S.C. 
Chapter 53, or this part or section 207 of the Gun Control Act of 1968 
shall be used, directly or indirectly, as evidence against that person 
in a criminal proceeding with respect to a violation of law occurring 
prior to or concurrently with the filing of the application or 
registration, or the compiling of the record containing the information 
or evidence: Provided, however, That the provisions of this section 
shall not preclude the use of any such information or evidence in a 
prosecution or other action under any applicable provision of law with 
respect to the furnishing of false information.

[36 FR 14256, Aug. 3, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55842, Sept. 28, 1979]



Sec. 179.24  Destructive device determination.

    The Director shall determine in accordance with 26 U.S.C. 5845(f), 
whether a device is excluded from the definition of a destructive 
device. A person who desires to obtain a determination under that 
provision of law for any device which he believes is not likely to be 
used as a weapon shall submit a written request, in triplicate, for a 
ruling thereon to the Director. Each such request shall be executed 
under the penalties of perjury and contain a complete and accurate 
description of the device, the name and address of the manufacturer or 
importer thereof, the purpose of and use for which it is intended, and 
such photographs, diagrams, or drawings as may be necessary to enable 
the Director to make his determination. The Director may require the 
submission to him, of a sample of such device for examination and 
evaluation. If the submission of

[[Page 1205]]

such device is impracticable, the person requesting the ruling shall so 
advise the Director and designate the place where the device will be 
available for examination and evaluation.

[36 FR 14256, Aug. 3, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55842, Sept. 28, 1979]



Sec. 179.25  Collector's items.

    The Director shall determine in accordance with 26 U.S.C. 5845(a), 
whether a firearm or device, which although originally designed as a 
weapon, is by reason of the date of its manufacture, value, design, and 
other characteristics primarily a collector's item and is not likely to 
be used as a weapon. A person who desires to obtain a determination 
under that provision of law shall follow the procedures prescribed in 
Sec. 179.24 relating to destructive device determinations, and shall 
include information as to date of manufacture, value, design and other 
characteristics which would sustain a finding that the firearm or device 
is primarily a collector's item and is not likely to be used as a 
weapon.

[36 FR 14256, Aug. 3, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55842, Sept. 28, 1979]



Sec. 179.26  Alternate methods or procedures; emergency variations from requirements.

    (a) Alternate methods or procedures. Any person subject to the 
provisions of this part, on specific approval by the Director as 
provided in this paragraph, may use an alternate method or procedure in 
lieu of a method or procedure specifically prescribed in this part. The 
Director may approve an alternate method or procedure, subject to stated 
conditions, when it is found that:
    (1) Good cause is shown for the use of the alternate method or 
procedure;
    (2) The alternate method or procedure is within the purpose of, and 
consistent with the effect intended by, the specifically prescribed 
method or procedure and that the alternate method or procedure is 
substantially equivalent to that specifically prescribed method or 
procedure; and
    (3) The alternate method or procedure will not be contrary to any 
provision of law and will not result in an increase in cost to the 
Government or hinder the effective administration of this part. Where 
such person desires to employ an alternate method or procedure, a 
written application shall be submitted to the appropriate regional 
director (compliance), for transmittal to the Director. The application 
shall specifically describe the proposed alternate method or procedure 
and shall set forth the reasons for it. Alternate methods or procedures 
may not be employed until the application is approved by the Director. 
Such person shall, during the period of authorization of an alternate 
method or procedure, comply with the terms of the approved application. 
Authorization of any alternate method or procedure may be withdrawn 
whenever, in the judgment of the Director, the effective administration 
of this part is hindered by the continuation of the authorization.
    (b) Emergency variations from requirements. The Director may approve 
a method of operation other than as specified in this part, where it is 
found that an emergency exists and the proposed variation from the 
specified requirements are necessary and the proposed variations (1) 
will not hinder the effective administration of this part, and (2) will 
not be contrary to any provisions of law. Variations from requirements 
granted under this paragraph are conditioned on compliance with the 
procedures, conditions, and limitations set forth in the approval of the 
application. Failure to comply in good faith with the procedures, 
conditions, and limitations shall automatically terminate the authority 
for the variations, and the person granted the variance shall fully 
comply with the prescribed requirements of regulations from which the 
variations were authorized. Authority for any variation may be withdrawn 
whenever, in the judgment of the Director, the effective administration 
of this part is hindered by the continuation of the variation. Where a 
person desires to employ an emergency variation, a written application 
shall be submitted to the appropriate regional director (compliance) for 
transmittal to the Director. The application shall describe the proposed 
variation

[[Page 1206]]

and set forth the reasons for it. Variations may not be employed until 
the application is approved.
    (c) Retention of approved variations. The person granted the 
variance shall retain and make available for examination by ATF officers 
any application approved by the Director under this section.

[T.D. ATF-270, 53 FR 10508 Mar. 31, 1988]



                 Subpart D--Special (Occupational) Taxes



Sec. 179.31  Liability for tax.

    (a) General. Every person who engages in the business of importing, 
manufacturing, or dealing in (including pawnbrokers) firearms in the 
United States shall pay a special (occupational) tax at a rate specified 
by Sec. 179.32. The tax shall be paid on or before the date of 
commencing the taxable business, and thereafter every year on or before 
July 1. Special (occupational) tax shall not be prorated. The tax shall 
be computed for the entire tax year (July 1 through June 30), regardless 
of the portion of the year during which the taxpayer engages in 
business. Persons commencing business at any time after July 1 in any 
year are liable for the special (occupational) tax for the entire tax 
year.
    (b) Each place of business taxable. An importer, manufacturer, or 
dealer in firearms incurs special tax liability at each place of 
business where an occupation subject to special tax is conducted. A 
place of business means the entire office, plant or area of the business 
in any one location under the same proprietorship. Passageways, streets, 
highways, rail crossings, waterways, or partitions dividing the premises 
are not sufficient separation to require additional special tax, if the 
divisions of the premises are otherwise contiguous. See also 
Secs. 179.38-179.39.

(26 U.S.C. 5143, 5801, 5846)

[T.D. ATF-271, 53 FR 17550, May 17, 1988]



Sec. 179.32  Special (occupational) tax rates.

    (a) Prior to January 1, 1988, the special (occupational) tax rates 
were as follows:

------------------------------------------------------------------------
                                                             Per year or
                                                               fraction
                                                               thereof
------------------------------------------------------------------------
Class 1--Importer of firearms..............................         $500
Class 2--Manufacturer of firearms..........................          500
Class 3--Dealer in firearms................................          200
Class 4--Importer only of weapons classified as ``any other           25
 weapon''..................................................
Class 5--Manufacturer only of weapons classified as ``any             25
 other weapon''............................................
Class 6--Dealer only in weapons classified as ``any other             10
 weapon''..................................................
------------------------------------------------------------------------

    (b) Except as provided in Sec. 179.32a, the special (occupational) 
tax rates effective January 1, 1988, are as follows:

------------------------------------------------------------------------
                                                             Per year or
                                                               fraction
                                                               thereof
------------------------------------------------------------------------
Class 1--Importer of firearms (including an importer only         $1,000
 of weapons classified as ``any other weapon'')............
Class 2--Manufacturer of firearms (including a manufacturer        1,000
 only of weapons classified as ``any other weapon'').......
Class 3--Dealer in firearms (including a dealer only of              500
 weapons classified as ``any other weapon'')...............
------------------------------------------------------------------------

    (c) A taxpayer who was engaged in a business on January 1, 1988, for 
which a special (occupational) tax was paid for a taxable period which 
began before January 1, 1988, and included that date, shall pay an 
increased special tax for the period January 1, 1988, through June 30, 
1988. The increased tax shall not exceed one-half the excess (if any) of 
(1) the rate of special tax in effect on January 1, 1988, over (2) the 
rate of such tax in effect on December 31, 1987. The increased special 
tax shall be paid on or before April 1, 1988.

[T.D. ATF-271, 53 FR 17550, May 17, 1988]



Sec. 179.32a  Reduced rate of tax for small importers and manufacturers.

    (a) General. Effective January 1, 1988, 26 U.S.C. 5801(b) provides 
for a reduced rate of special tax with respect to any importer or 
manufacturer whose gross receipts (for the most recent taxable year 
ending before the first day of the taxable period to which the special 
tax imposed by Sec. 179.32 relates) are less than $500,000. The rate of 
tax for such an importer or manufacturer is $500 per year or fraction 
thereof. The ``taxable year'' to be used for determining gross receipts 
is the taxpayer's income tax year. All gross receipts of the taxpayer

[[Page 1207]]

shall be included, not just the gross receipts of the business subject 
to special tax. Proprietors of new businesses that have not yet begun a 
taxable year, as well as proprietors of existing businesses that have 
not yet ended a taxable year, who commence a new activity subject to 
special tax, quality for the reduced special (occupational) tax rate, 
unless the business is a member of a ``controlled group''; in that case, 
the rules of paragraph (b) of this section shall apply.
    (b) Controlled group. All persons treated as one taxpayer under 26 
U.S.C. 5061(e)(3) shall be treated as one taxpayer for the purpose of 
determining gross receipts under paragraph (a) of this section. 
``Controlled group'' means a controlled group of corporations, as 
defined in 26 U.S.C. 1563 and implementing regulations in 26 CFR 1.1563-
1 through 1.1563-4, except that the words ``at least 80 percent'' shall 
be replaced by the words ``more than 50 percent'' in each place they 
appear in subsection (a) of 26 U.S.C. 1563, as well as in the 
implementing regulations. Also, the rules for a ``controlled group of 
corporations'' apply in a similar fashion to groups which include 
partnerships and/or sole proprietorships. If one entity maintains more 
than 50% control over a group consisting of corporations and one, or 
more, partnerships and/or sole proprietorships, all of the members of 
the controlled group are one taxpayer for the purpose of this section.
    (c) Short taxable year. Gross receipts for any taxable year of less 
than 12 months shall be annualized by multiplying the gross receipts for 
the short period by 12 and dividing the result by the number of months 
in the short period, as required by 26 U.S.C. 448(c)(3).
    (d) Returns and allowances. Gross receipts for any taxable year 
shall be reduced by returns and allowances made during that year under 
26 U.S.C. 448(c)(3).

(26 U.S.C. 448, 5061, 5801)

[T.D. ATF-271, 53 FR 17550, May 17, 1988]



Sec. 179.33  Special exemption.

    (a) Any person required to pay special (occupational) tax under this 
part shall be relieved from payment of that tax if he establishes to the 
satisfaction of the Director that his business is conducted exclusively 
with, or on behalf of, the United States or any department, independent 
establishment, or agency thereof. The Director may relieve any person 
manufacturing firearms for or on behalf of the United States from 
compliance with any provision of this part in the conduct of the 
business with respect to such firearms.
    (b) The exemption in this section may be obtained by filing with the 
Director an application, in letter form, setting out the manner in which 
the applicant conducts his business, the type of firearm to be 
manufactured, and proof satisfactory to the Director of the existence of 
the contract with the United States, department, independent 
establishment, or agency thereof, under which the applicant intends to 
operate.



Sec. 179.34  Special tax registration and return.

    (a) General. Special tax shall be paid by return. The prescribed 
return is ATF Form 5630.7, Special Tax Registration and Return. Special 
tax returns, with payment of tax, shall be filed with ATF in accordance 
with instructions on the form. Properly completing, signing, and timely 
filing of a return (Form 5630.7) constitutes compliance with 26 U.S.C. 
5802.
    (b) Preparation of ATF Form 5630.7. All of the information called 
for on Form 5630.7 shall be provided, including:
    (1) The true name of the taxpayer.
    (2) The trade name(s) (if any) of the business(es) subject to 
special tax.
    (3) The employer identification number (see Sec. 179.35).
    (4) The exact location of the place of business, by name and number 
of building or street, or if these do not exist, by some description in 
addition to the post office address. In the case of one return for two 
or more locations, the address to be shown shall be the taxpayer's 
principal place of business (or principal office, in the case of a 
corporate taxpayer).
    (5) The class(es) of special tax to which the taxpayer is subject.
    (6) Ownership and control information: That is, the name, position, 
and residence address of every owner of the

[[Page 1208]]

business and of every person having power to control its management and 
policies with respect to the activity subject to special tax. ``Owner of 
the business'' shall include every partner, if the taxpayer is a 
partnership, and every person owning 10% or more of its stock, if the 
taxpayer is a corporation. However, the ownership and control 
information required by this paragraph need not be stated if the same 
information has been previously provided to ATF in connection with a 
license application under Part 178 of this chapter, and if the 
information previously provided is still current.
    (c) Multiple locations and/or classes of tax. A taxpayer subject to 
special tax for the same period at more than one location or for more 
than one class of tax shall--
    (1) File one special tax return, ATF Form 5630.7, with payment of 
tax, to cover all such locations and classes of tax; and
    (2) Prepare, in duplicate, a list identified with the taxpayer's 
name, address (as shown on ATF Form 5630.7), employer identification 
number, and period covered by the return. The list shall show, by 
States, the name, address, and tax class of each location for which 
special tax is being paid. The original of the list shall be filed with 
ATF in accordance with instructions on the return, and the copy shall be 
retained at the taxpayer's principal place of business (or principal 
office, in the case of a corporate taxpayer) for not less than 3 years.
    (d) Signing of ATF Forms 5630.7--(1) Ordinary returns. The return of 
an individual proprietor shall be signed by the individual. The return 
of a partnership shall be signed by a general partner. The return of a 
corporation shall be signed by any officer. In each case, the person 
signing the return shall designate his or her capacity as ``individual 
owner,'' ``member of firm,'' or, in the case of a corporation, the title 
of the officer.
    (2) Fiduciaries. Receivers, trustees, assignees, executors, 
administrators, and other legal representatives who continue the 
business of a bankrupt, insolvent, deceased person, etc., shall indicate 
the fiduciary capacity in which they act.
    (3) Agent or attorney in fact. If a return is signed by an agent or 
attorney in fact, the signature shall be preceded by the name of the 
principal and followed by the title of the agent or attorney in fact. A 
return signed by a person as agent will not be accepted unless there is 
filed, with the ATF office with which the return is required to be 
filed, a power of attorney authorizing the agent to perform the act.
    (4) Perjury statement. ATF Forms 5630.7 shall contain or be verified 
by a written declaration that the return has been executed under the 
penalties of perjury.
    (e) Identification of taxpayer. If the taxpayer is an individual, 
with the initial return such person shall securely attach to Form 5630.7 
a photograph of the individual 2 x 2 inches in size, clearly showing a 
full front view of the features of the individual with head bare, with 
the distance from the top of the head to the point of the chin 
approximately 1\1/4\ inches, and which shall have been taken within 6 
months prior to the date of completion of the return. The individual 
shall also attach to the return a properly completed FBI Form FD-258 
(Fingerprint Card). The fingerprints must be clear for accurate 
classification and should be taken by someone properly equipped to take 
them: Provided, That the provisions of this paragraph shall not apply to 
individuals who have filed with ATF a properly executed Application for 
License under 18 U.S.C. Chapter 44, Firearms, ATF Form 7 (5310.12) (12-
93 edition), as specified in Sec. 178.44(a).

(26 U.S.C. 5142, 5802, 5846, 6061, 6065, 6151)

[T.D. ATF-271, 53 FR 17551, May 17, 1988, as amended by T.D. ATF-363, 60 
FR 17456, Apr. 6, 1995]



Sec. 179.35  Employer identification number.

    (a) Requirement. The employer identification number (defined in 26 
CFR 301.7701-12) of the taxpayer who has been assigned such a number 
shall be shown on each special tax return, including amended returns, 
filed under this subpart. Failure of the taxpayer to include the 
employer identification number may result in the imposition of the 
penalty specified in Sec. 70.113 of this chapter.

[[Page 1209]]

    (b) Application for employer identification number. Each taxpayer 
who files a special tax return, who has not already been assigned an 
employer identification number, shall file IRS Form SS-4 to apply for 
one. The taxpayer shall apply for and be assigned only one employer 
identification number, regardless of the number of places of business 
for which the taxpayer is required to file a special tax return. The 
employer identification number shall be applied for no later than 7 days 
after the filing of the taxpayer's first special tax return. IRS Form 
SS-4 may be obtained from the director of an IRS service center or from 
any IRS district director.
    (c) Preparation and filing of IRS Form SS-4. The taxpayer shall 
prepare and file IRS Form SS-4, together with any supplementary 
statement, in accordance with the instructions on the form or issued in 
respect to it.

(26 U.S.C. 6109)

[T.D. ATF-271, 53 FR 17551, May 17, 1988; as amended by T.D. ATF-301, 55 
FR 47657, Nov. 14, 1990]



Sec. 179.36  The special tax stamp, receipt for special (occupational) taxes.

    Upon filing a properly completed and executed return (Form 5630.7) 
accompanied by remittance of the full amount due, the taxpayer will be 
issued a special tax stamp as evidence of payment of the special 
(occupational) tax.

[36 FR 14256, Aug. 3, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-251, 52 FR 19334, May 22, 1987; T.D. ATF-363, 60 
FR 17456, Apr. 6, 1995]



Sec. 179.37  Certificates in lieu of stamps lost or destroyed.

    When a special tax stamp has been lost or destroyed, such fact 
should be reported immediately to the regional director (compliance) 
Center who issued the stamp. A certificate in lieu of the lost or 
destroyed stamp will be issued to the taxpayer upon the submission of an 
affidavit showing to the satisfaction of the regional director 
(compliance) that the stamp was lost or destroyed.

[36 FR 14256, Aug. 3, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-251, 52 FR 19334, May 22, 1987]



Sec. 179.38  Engaging in business at more than one location.

    A person shall pay the special (occupational) tax for each location 
where he engages in any business taxable under 26 U.S.C. 5801. However, 
a person paying a special (occupational) tax covering his principal 
place of business may utilize other locations solely for storage of 
firearms without incurring special (occupational) tax liability at such 
locations. A manufacturer, upon the single payment of the appropriate 
special (occupational) tax, may sell firearms, if such firearms are of 
his own manufacture, at the place of manufacture and at his principal 
office or place of business if no such firearms, except samples, are 
kept at such office or place of business. When a person changes the 
location of a business for which he has paid the special (occupational) 
tax, he will be liable for another such tax unless the change is 
properly registered with the regional director (compliance) for the 
region in which the special tax stamp was issued, as provided in 
Sec. 179.46.

[36 FR 14256, Aug. 3, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55842, Sept. 28, 1979; T.D. ATF-251, 
52 FR 19334, May 22, 1987; T.D. ATF-271, 53 FR 17551, May 17, 1988]



Sec. 179.39  Engaging in more than one business at the same location.

    If more than one business taxable under 26 U.S.C. 5801, is carried 
on at the same location during a taxable year, the special 
(occupational) tax imposed on each such business must be paid. This 
section does not require a qualified manufacturer or importer to qualify 
as a dealer if such manufacturer or importer also engages in business on 
his qualified premises as a dealer. However, a qualified manufacturer 
who engages in business as an importer must also qualify as an importer. 
Further, a qualified dealer is not entitled to engage in business as a 
manufacturer or importer.

[36 FR 14256, Aug. 3, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55842, Sept. 28, 1979; T.D. ATF-271, 
53 FR 17551, May 17, 1988]

[[Page 1210]]



Sec. 179.40  Partnership liability.

    Any number of persons doing business in partnership at any one 
location shall be required to pay but one special (occupational) tax.



Sec. 179.41  Single sale.

    A single sale, unattended by circumstances showing the one making 
the sale to be engaged in business, does not create special 
(occupational) tax liability.

                           Change of Ownership



Sec. 179.42  Changes through death of owner.

    Whenever any person who has paid special (occupational) tax dies, 
the surviving spouse or child, or executors or administrators, or other 
legal representatives, may carry on this business for the remainder of 
the term for which tax has been paid and at the place (or places) for 
which the tax was paid, without any additional payment, subject to the 
following conditions. If the surviving spouse or child, or executor or 
administrator, or other legal representative of the deceased taxpayer 
continues the business, such person shall, within 30 days after the date 
on which the successor begins to carry on the business, file a new 
return, Form 5630.7, with ATF in accordance with the instructions on the 
form. The return thus executed shall show the name of the original 
taxpayer, together with the basis of the succession. (As to liability in 
case of failure to register, see Sec. 179.49.)

[T.D. ATF-70, 45 FR 33979, May 21, 1980, as amended by T.D. ATF-251, 52 
FR 19334, May 22, 1987; T.D. ATF-363, 60 FR 17456, Apr. 6, 1995]



Sec. 179.43  Changes through bankruptcy of owner.

    A receiver or referee in bankruptcy may continue the business under 
the stamp issued to the taxpayer at the place and for the period for 
which the tax was paid. An assignee for the benefit of creditors may 
continue business under his assignor's special tax stamp without 
incurring additional special (occupational) tax liability. In such 
cases, the change shall be registered with ATF in a manner similar to 
that required by Sec. 179.42.

[36 FR 14256, Aug. 3, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-251, 52 FR 19334, May 22, 1987]



Sec. 179.44  Change in partnership or unincorporated association.

    When one or more members withdraw from a partnership or an 
unincorporated association, the remaining member, or members, may, 
without incurring additional special (occupational) tax liability, carry 
on the same business at the same location for the balance of the taxable 
period for which special (occupational) tax was paid, provided any such 
change shall be registered in the same manner as required by 
Sec. 179.42. Where new member(s) are taken into a partnership or an 
unincorporated association, the new firm so constituted may not carry on 
business under the special tax stamp of the old firm. The new firm must 
file a return, pay the special (occupational) tax and register in the 
same manner as a person who first engages in business is required to do 
under Sec. 179.34 even though the name of the new firm may be the same 
as that of the old. Where the members of a partnership or an 
unincorporated association, which has paid special (occupational) tax, 
form a corporation to continue the business, a new special tax stamp 
must be taken out in the name of the corporation.



Sec. 179.45  Changes in corporation.

    Additional special (occupational) tax is not required by reason of a 
mere change of name or increase in the capital stock of a corporation if 
the laws of the State of incorporation provide for such change or 
increase without the formation of a new corporation. A stockholder in a 
corporation who after its dissolution continues the business, incurs new 
special (occupational) tax liability.

                       Change of Business Location



Sec. 179.46  Notice by taxpayer.

    Whenever during the taxable year a taxpayer intends to remove his 
business to a location other than specified in his last special 
(occupational) tax return (see Sec. 179.34), he shall file with

[[Page 1211]]

ATF (a) a return, Form 5630.7, bearing the notation ``Removal 
Registry,'' and showing the new address intended to be used, (b) his 
current special tax stamp, and (c) a letter application requesting the 
amendment of his registration. The regional director (compliance), upon 
approval of the application, shall return the special tax stamp, amended 
to show the new business location. Firearms operations shall not be 
commenced at the new business location by the taxpayer prior to the 
required approval of his application to so change his business location.

[36 FR 14256, Aug. 3, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-251, 52 FR 19334, May 22, 1987; T.D. ATF-363, 60 
FR 17456, Apr. 6, 1995]

                          Change of Trade Name



Sec. 179.47  Notice by taxpayer.

    Whenever during the taxable year a taxpayer intends to change the 
name of his business, he shall file with ATF (a) a return, Form 5630.7, 
bearing the notation ``Amended,'' and showing the trade name intended to 
be used, (b) his current special tax stamp, and (c) a letter application 
requesting the amendment of his registration. The regional director 
(compliance), upon approval of the application, shall return the special 
tax stamp, amended to show the new trade name. Firearms operations shall 
not be commenced under the new trade name by the taxpayer prior to the 
required approval of his application to so change the trade name.

[36 FR 14256, Aug. 3, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-251, 52 FR 19334, May 22, 1987; T.D. ATF-363, 60 
FR 17456, Apr. 6, 1995]

                         Penalties and Interest



Sec. 179.48  Failure to pay special (occupational) tax.

    Any person who engages in a business taxable under 26 U.S.C. 5801, 
without timely payment of the tax imposed with respect to such business 
(see Sec. 179.34) shall be liable for such tax, plus the interest and 
penalties thereon (see 26 U.S.C. 6601 and 6651). In addition, such 
person may be liable for criminal penalties under 26 U.S.C. 5871.

[36 FR 14256, Aug. 3, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55842, Sept. 28, 1979]



Sec. 179.49  Failure to register change or removal.

    Any person succeeding to and carrying on a business for which 
special (occupational) tax has been paid without registering such change 
within 30 days thereafter, and any taxpayer removing his business with 
respect to which special (occupational) tax has been paid to a place 
other than that for which tax was paid without obtaining approval 
therefor (see Sec. 179.46), will incur liability to an additional 
payment of the tax, addition to tax and interest, as provided in 
sections 5801, 6651, and 6601, respectively, I.R.C., for failure to make 
return (see Sec. 179.50) or pay tax, as well as criminal penalties for 
carrying on business without payment of special (occupational) tax (see 
section 5871 I.R.C.).



Sec. 179.50  Delinquency.

    Any person liable for special (occupational) tax under section 5801, 
I.R.C., who fails to file a return (Form 5630.7), as prescribed, will be 
liable for a delinquency penalty computed on the amount of tax due 
unless a return (Form 5630.7) is later filed and failure to file the 
return timely is shown to the satisfaction of the regional director 
(compliance), to be due to reasonable cause. The delinquency penalty to 
be added to the tax is 5 percent if the failure is for not more than 1 
month, with an additional 5 percent for each additional month or 
fraction thereof during which failure continues, not to exceed 25 
percent in the aggregate (section 6651, I.R.C.). However, no delinquency 
penalty is assessed where the 50 percent addition to tax is assessed for 
fraud (see Sec. 179.51).

[36 FR 14256, Aug. 3, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-251, 52 FR 19334, May 22, 1987; T.D. ATF-363, 60 
FR 17453, Apr. 6, 1996]



Sec. 179.51  Fraudulent return.

    If any part of any underpayment of tax required to be shown on a 
return is due to fraud, there shall be added to

[[Page 1212]]

the tax an amount equal to 50 percent of the underpayment, but no 
delinquency penalty shall be assessed with respect to the same 
underpayment (section 6653, I.R.C.).

                        Application of State Laws



Sec. 179.52  State regulations.

    Special tax stamps are merely receipts for the tax. Payment of tax 
under Federal law confers no privilege to act contrary to State law. One 
to whom a special tax stamp has been issued may still be punishable 
under a State law prohibiting or controlling the manufacture, possession 
or transfer of firearms. On the other hand, compliance with State law 
confers no immunity under Federal law. Persons who engage in the 
business of importing, manufacturing or dealing in firearms, in 
violation of the law of a State, are nevertheless required to pay 
special (occupational) tax as imposed under the internal revenue laws of 
the United States. For provisions relating to restrictive use of 
information furnished to comply with the provisions of this part see 
Sec. 179.23.



                    Subpart E--Tax on Making Firearms



Sec. 179.61  Rate of tax.

    Except as provided in this subpart, there shall be levied, 
collected, and paid upon the making of a firearm a tax at the rate of 
$200 for each firearm made. This tax shall be paid by the person making 
the firearm. Payment of the tax on the making of a firearm shall be 
represented by a $200 adhesive stamp bearing the words ``National 
Firearms Act.'' The stamps are maintained by the Director.

[T.D. ATF-270, 53 FR 10508, Mar. 31, 1988]

                      Application to Make a Firearm



Sec. 179.62  Application to make.

    No person shall make a firearm unless the person has filed with the 
Director a written application on Form 1 (Firearms), Application to Make 
and Register a Firearm, in duplicate, executed under the penalties of 
perjury, to make and register the firearm and has received the approval 
of the Director to make the firearm which approval shall effectuate 
registration of the weapon to the applicant. The application shall 
identify the firearm to be made by serial number, type, model, caliber 
or gauge, length of barrel, other marks of identification, and the name 
and address of original manufacturer (if the applicant is not the 
original manufacturer). The applicant must be identified on the Form 1 
(Firearms) by name and address and, if other than a natural person, the 
name and address of the principal officer or authorized representative 
and the employer identification number and, if an individual, the 
identification must include the date and place of birth and the 
information prescribed in Sec. 179.63. Each applicant shall identify the 
Federal firearms license and special (occupational) tax stamp issued to 
the applicant, if any. The applicant shall also show required 
information evidencing that making or possession of the firearm would 
not be in violation of law. If the making is taxable, a remittance in 
the amount of $200 shall be submitted with the application in accordance 
with the instructions on the form. If the making is taxable and the 
application is approved, the Director will affix a National Firearms Act 
stamp to the original application in the space provided therefor and 
properly cancel the stamp (see Sec. 179.67). The approved application 
will be returned to the applicant. If the making of the firearm is tax 
exempt under this part, an explanation of the basis of the exemption 
shall be attached to the Form 1 (Firearms).

[T.D. ATF-270, 53 FR 10508, Mar. 31, 1988]



Sec. 179.63  Identification of applicant.

    If the applicant is an individual, the applicant shall securely 
attach to each copy of the Form 1 (Firearms), in the space provided on 
the form, a photograph of the applicant 2 x 2 inches in size, clearly 
showing a full front view of the features of the applicant with head 
bare, with the distance from the top of the head to the point of the 
chin approximately 1\1/4\ inches, and which shall have been taken within 
1 year prior to the date of the application. The applicant shall attach 
two properly completed FBI Forms FD-258 (Fingerprint Card) to the 
application. The

[[Page 1213]]

fingerprints must be clear for accurate classification and should be 
taken by someone properly equipped to take them. A certificate of the 
local chief of police, sheriff of the county, head of the State police, 
State or local district attorney or prosecutor, or such other person 
whose certificate may in a particular case be acceptable to the 
Director, shall be completed on each copy of the Form 1 (Firearms). The 
certificate shall state that the certifying official is satisfied that 
the fingerprints and photograph accompanying the application are those 
of the applicant and that the certifying official has no information 
indicating that possession of the firearm by the maker would be in 
violation of State or local law or that the maker will use the firearm 
for other than lawful purposes.

[T.D. ATF-270, 53 FR 10509, Mar. 31, 1988]



Sec. 179.64  Procedure for approval of application.

    The application to make a firearm, Form 1 (Firearms), must be 
forwarded directly, in duplicate, by the maker of the firearm to the 
Director in accordance with the instructions on the form. The Director 
will consider the application for approval or disapproval. If the 
application is approved, the Director will return the original thereof 
to the maker of the firearm and retain the duplicate. Upon receipt of 
the approved application, the maker is authorized to make the firearm 
described therein. The maker of the firearm shall not, under any 
circumstances, make the firearm until the application, satisfactorily 
executed, has been forwarded to the Director and has been approved and 
returned by the Director with the National Firearms Act stamp affixed. 
If the application is disapproved, the original Form 1 (Firearms) and 
the remittance submitted by the applicant for the purchase of the stamp 
will be returned to the applicant with the reason for disapproval stated 
on the form.

[T.D. ATF-270, 53 FR 10509, Mar. 31, 1988]



Sec. 179.65  Denial of application.

    An application to make a firearm shall not be approved by the 
Director if the making or possession of the firearm would place the 
person making the firearm in violation of law.



Sec. 179.66  Subsequent transfer of firearms.

    Where a firearm which has been made in compliance with 26 U.S.C. 
5821, and the regulations contained in this part, is to be transferred 
subsequently, the transfer provisions of the firearms laws and 
regulations must be complied with. (See subpart F of this part).

[36 FR 14256, Aug. 3, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55842, Sept. 28, 1979]



Sec. 179.67  Cancellation of stamp.

    The person affixing to a Form 1 (Firearms) a ``National Firearms 
Act'' stamp shall cancel it by writing or stamping thereon, in ink, his 
initials, and the day, month and year, in such manner as to render it 
unfit for reuse. The cancellation shall not so deface the stamp as to 
prevent its denomination and genuineness from being readily determined.

                  Exceptions to Tax on Making Firearms



Sec. 179.68  Qualified manufacturer.

    A manufacturer qualified under this part to engage in such business 
may make firearms without payment of the making tax. However, such 
manufacturer shall report and register each firearm made in the manner 
prescribed by this part.

[36 FR 14256, Aug. 3, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-271, 53 FR 17551, May 17, 1988]



Sec. 179.69  Making a firearm for the United States.

    A firearm may be made by, or on behalf of, the United States or any 
department, independent establishment, or agency thereof without payment 
of the making tax. However, if a firearm is to be made on behalf of the 
United States, the maker must file an application, in duplicate, on Form 
1 (Firearms) and obtain the approval of the Director in the manner 
prescribed in Sec. 179.62.

[[Page 1214]]



Sec. 179.70  Certain government entities.

    A firearm may be made without payment of the making tax by, or on 
behalf of, any State, or possession of the United States, any political 
subdivision thereof, or any official police organization of such a 
government entity engaged in criminal investigations. Any person making 
a firearm under this exemption shall first file an application, in 
duplicate, on Form 1 (Firearms) and obtain the approval of the Director 
as prescribed in Sec. 179.62.

                              Registration



Sec. 179.71  Proof of registration.

    The approval by the Director of an application, Form 1 (Firearms), 
to make a firearm under this subpart shall effectuate registration of 
the firearm described in the Form 1 (Firearms) to the person making the 
firearm. The original Form 1 (Firearms) showing approval by the Director 
shall be retained by the maker to establish proof of his registration of 
the firearm described therein, and shall be made available to any ATF 
officer on request.



                         Subpart F--Transfer Tax



Sec. 179.81  Scope of tax.

    Except as otherwise provided in this part, each transfer of a 
firearm in the United States is subject to a tax to be represented by an 
adhesive stamp of the proper denomination bearing the words ``National 
Firearms Act'' to be affixed to the Form 4 (Firearms), Application for 
Transfer and Registration of Firearm, as provided in this subpart.



Sec. 179.82  Rate of tax.

    The transfer tax imposed with respect to firearms transferred within 
the United States is at the rate of $200 for each firearm transferred, 
except that the transfer tax on any firearm classified as ``any other 
weapon'' shall be at the rate of $5 for each such firearm transferred. 
The tax imposed on the transfer of the firearm shall be paid by the 
transferor.



Sec. 179.83  Transfer tax in addition to import duty.

    The transfer tax imposed by section 5811, I.R.C., is in addition to 
any import duty.

              Application and Order for Transfer of Firearm



Sec. 179.84  Application to transfer.

    Except as otherwise provided in this subpart, no firearm may be 
transferred in the United States unless an application, Form 4 
(Firearms), Application for Transfer and Registration of Firearm, in 
duplicate, executed under the penalties of perjury to transfer the 
firearm and register it to the transferee has been filed with and 
approved by the Director. The application, Form 4 (Firearms), shall be 
filed by the transferor and shall identify the firearm to be transferred 
by type; serial number; name and address of the manufacturer and 
importer, if known; model; caliber, gauge or size; in the case of a 
short-barreled shotgun or a short-barreled rifle, the length of the 
barrel; in the case of a weapon made from a rifle or shotgun, the 
overall length of the weapon and the length of the barrel; and any other 
identifying marks on the firearm. In the event the firearm does not bear 
a serial number, the applicant shall obtain a serial number from the 
Regional director (compliance) and shall stamp (impress) or otherwise 
conspicuously place such serial number on the firearm in a manner not 
susceptible of being readily obliterated, altered or removed. The 
application, Form 4 (Firearms), shall identify the transferor by name 
and address; shall identify the transferor's Federal firearms license 
and special (occupational) Chapter tax stamp, if any; and if the 
transferor is other than a natural person, shall show the title or 
status of the person executing the application. The application also 
shall identify the transferee by name and address, and, if the 
transferee is a natural person not qualified as a manufacturer, importer 
or dealer under this part, he shall be further identified in the manner 
prescribed in Sec. 179.85. The application also

[[Page 1215]]

shall identify the special (occupational) tax stamp and Federal firearms 
license of the transferee, if any. Any tax payable on the transfer must 
be represented by an adhesive stamp of proper denomination being affixed 
to the application, Form 4 (Firearms), properly cancelled.

[36 FR 14256, Aug. 3, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-241, 51 FR 39632, Oct. 29, 1986 T.D. ATF-270, 53 
FR 10509, Mar. 31, 1988]



Sec. 179.85  Identification of transferee.

    If the transferee is an individual, such person shall securely 
attach to each copy of the application, Form 4 (Firearms), in the space 
provided on the form, a photograph of the applicant 2 x 2 inches in 
size, clearly showing a full front view of the features of the applicant 
with head bare, with the distance from the top of the head to the point 
of the chin approximately 1\1/4\ inches, and which shall have been taken 
within 1 year prior to the date of the application. The transferee shall 
attach two properly completed FBI Forms FD-258 (Fingerprint Card) to the 
application. The fingerprints must be clear for accurate classification 
and should be taken by someone properly equipped to take them. A 
certificate of the local chief of police, sheriff of the county, head of 
the State police, State or local district attorney or prosecutor, or 
such other person whose certificate may in a particular case be 
acceptable to the Director, shall be completed on each copy of the Form 
4 (Firearms). The certificate shall state that the certifying official 
is satisfied that the fingerprints and photograph accompanying the 
application are those of the applicant and that the certifying official 
has no information indicating that the receipt or possession of the 
firearm would place the transferee in violation of State or local law or 
that the transferee will use the firearm for other than lawful purposes.

[T.D. ATF-270, 53 FR 10509, Mar. 31, 1988]



Sec. 179.86  Action on application.

    The Director will consider a completed and properly executed 
application, Form 4 (Firearms), to transfer a firearm. If the 
application is approved, the Director will affix the appropriate 
National Firearms Act stamp, cancel it, and return the original 
application showing approval to the transferor who may then transfer the 
firearm to the transferee along with the approved application. The 
approval of an application, Form 4 (Firearms), by the Director will 
effectuate registration of the firearm to the transferee. The transferee 
shall not take possession of a firearm until the application, Form 4 
(Firearms), for the transfer filed by the transferor has been approved 
by the Director and registration of the firearm is effectuated to the 
transferee. The transferee shall retain the approved application as 
proof that the firearm described therein is registered to the 
transferee, and shall make the approved Form 4 (Firearms) available to 
any ATF officer on request. If the application, Form 4 (Firearms), to 
transfer a firearm is disapproved by the Director, the original 
application and the remittance for purchase of the stamp will be 
returned to the transferor with reasons for the disapproval stated on 
the application. An application, Form 4 (Firearms), to transfer a 
firearm shall be denied if the transfer, receipt, or possession of a 
firearm would place the transferee in violation of law. In addition to 
any other records checks that may be conducted to determine whether the 
transfer, receipt, or possession of a firearm would place the transferee 
in violation of law, the Director shall contact the National Instant 
Criminal Background Check System.

[T.D. ATF-270, 53 FR 10509, Mar. 31, 1988, as amended by T.D. ATF-415, 
63 FR 58281, Oct. 29, 1998]



Sec. 179.87  Cancellation of stamp.

    The method of cancellation of the stamp required by this subpart as 
prescribed in Sec. 179.67 shall be used.

              Exemptions Relating to Transfers of Firearms



Sec. 179.88  Special (occupational) taxpayers.

    (a) A firearm registered to a person qualified under this part to 
engage in business as an importer, manufacturer, or dealer may be 
transferred by that person without payment of the transfer

[[Page 1216]]

tax to any other person qualified under this part to manufacture, 
import, or deal in firearms.
    (b) The exemption provided in paragraph (a) of this section shall be 
obtained by the transferor of the firearm filing with the Director an 
application, Form 3 (Firearms), Application for Tax-exempt Transfer of 
Firearm and Registration to Special (Occupational) Taxpayer, in 
duplicate, executed under the penalties of perjury. The application, 
Form 3 (Firearms), shall (1) show the name and address of the transferor 
and of the transferee, (2) identify the Federal firearms license and 
special (occupational) tax stamp of the transferor and of the 
transferee, (3) show the name and address of the manufacturer and the 
importer of the firearm, if known, (4) show the type, model, overall 
length (if applicable), length of barrel, caliber, gauge or size, serial 
number, and other marks of identification of the firearm, and (5) 
contain a statement by the transferor that he is entitled to the 
exemption because the transferee is a person qualified under this part 
to manufacture, import, or deal in firearms. If the Director approves an 
application, Form 3 (Firearms), he shall return the original Form 3 
(Firearms) to the transferor with the approval noted thereon. Approval 
of an application, Form 3 (Firearms), by the Director shall remove 
registration of the firearm reported thereon from the transferor and 
shall effectuate the registration of that firearm to the transferee. 
Upon receipt of the approved Form 3 (Firearms), the transferor shall 
deliver same with the firearm to the transferee. The transferor shall 
not transfer the firearm to the transferee until his application, Form 3 
(Firearms), has been approved by the Director and the original thereof 
has been returned to the transferor. If the Director disapproves the 
application, Form 3 (Firearms), he shall return the original Form 3 
(Firearms) to the transferor with the reasons for the disapproval stated 
thereon.
    (c) The transferor shall be responsible for establishing the exempt 
status of the transferee before making a transfer under the provisions 
of this section. Therefore, before engaging in transfer negotiations 
with the transferee, the transferor should satisfy himself as to the 
claimed exempt status of the transferee and the bona fides of the 
transaction. If not fully satisfied, the transferor should communicate 
with the Director, report all circumstances regarding the proposed 
transfer, and await the Director's advice before making application for 
the transfer. An unapproved transfer or a transfer to an unauthorized 
person may subject the transferor to civil and criminal liabilities. 
(See 26 U.S.C. 5852, 5861, and 5871.)

[36 FR 14256, Aug. 3, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55842, Sept. 28, 1979; T.D. ATF-271, 
53 FR 17551, May 17, 1988]



Sec. 179.89  Transfers to the United States.

    A firearm may be transferred to the United States or any department, 
independent establishment or agency thereof without payment of the 
transfer tax. However, the procedures for the transfer of a firearm as 
provided in Sec. 179.90 shall be followed in a tax-exempt transfer of a 
firearm under this section, unless the transferor is relieved of such 
requirement under other provisions of this part.



Sec. 179.90  Certain government entities.

    (a) A firearm may be transferred without payment of the transfer tax 
to or from any State, possession of the United States, any political 
subdivision thereof, or any official police organization of such a 
governmental entity engaged in criminal investigations.
    (b) The exemption provided in paragraph (a) of this section shall be 
obtained by the transferor of the firearm filing with the Director an 
application, Form 5 (Firearms), Application for Tax-exempt Transfer and 
Registration of Firearm, in duplicate, executed under the penalties of 
perjury. The application shall (1) show the name and address of the 
transferor and of the transferee, (2) identify the Federal firearms 
license and special (occupational) tax stamp, if any, of the transferor 
and of the transferee, (3) show the name and address of the manufacturer 
and the importer of the firearm, if known, (4) show the type, model, 
overall length (if applicable), length of barrel, caliber,

[[Page 1217]]

gauge or size, serial number, and other marks of identification of the 
firearm, and (5) contain a statement by the transferor that the 
transferor is entitled to the exemption because either the transferor or 
the transferee is a governmental entity coming within the purview of 
paragraph (a) of this section. In the case of a transfer of a firearm by 
a governmental entity to a transferee who is a natural person not 
qualified as a manufacturer, importer, or dealer under this part, the 
transferee shall be further identified in the manner prescribed in 
Sec. 179.85. If the Director approves an application, Form 5 (Firearms), 
the original Form 5 (Firearms) shall be returned to the transferor with 
the approval noted thereon. Approval of an application, Form 5 
(Firearms), by the Director shall effectuate the registration of that 
firearm to the transferee. Upon receipt of the approved Form 5 
(Firearms), the transferor shall deliver same with the firearm to the 
transferee. The transferor shall not transfer the firearm to the 
transferee until the application, Form 5 (Firearms), has been approved 
by the Director and the original thereof has been returned to the 
transferor. If the Director disapproves the application, Form 5 
(Firearms), the original Form 5 (Firearms) shall be returned to the 
transferor with the reasons for the disapproval stated thereon. An 
application by a governmental entity to transfer a firearm shall be 
denied if the tranfer, receipt, or possession of a firearm would place 
the transferee in violation of law.
    (c) The transferor shall be responsible for establishing the exempt 
status of the transferee before making a transfer under the provisions 
of this section. Therefore, before engaging in transfer negotiations 
with the transferee, the transferor should satisfy himself of the 
claimed exempt status of the transferee and the bona fides of the 
transaction. If not fully satisfied, the transferor should communicate 
with the Director, report all circumstances regarding the proposed 
transfer, and await the Director's advice before making application for 
transfer. An unapproved transfer or a transfer to an unauthorized person 
may subject the transferor to civil and criminal liabilities. (See 26 
U.S.C. 5852, 5861, and 5871.)

[36 FR 14256, Aug. 3, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55842, Sept. 28, 1979; T.D. ATF-241, 
51 FR 39632, Oct. 29, 1986; T.D. ATF-270, 53 FR 10510, Mar. 31, 1988]



Sec. 179.91  Unserviceable firearms.

    An unserviceable firearm may be transferred as a curio or ornament 
without payment of the transfer tax. However, the procedures for the 
transfer of a firearm as provided in Sec. 179.90 shall be followed in a 
tax-exempt transfer of a firearm under this section, except a statement 
shall be entered on the transfer application, Form 5 (Firearms), by the 
transferor that he is entitled to the exemption because the firearm to 
be transferred is unservicable and is being transferred as a curio or 
ornament. An unapproved transfer, the transfer of a firearm under the 
provisions of this section which is in fact not an unserviceable 
firearm, or the transfer of an unserviceable firearm as something other 
than a curio or ornament, may subject the transferor to civil and 
criminal liabilities. (See 26 U.S.C. 5811, 5852, 5861, and 5871.)

[36 FR 14256, Aug. 3, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55843, Sept. 28, 1979]



Sec. 179.92  Transportation of firearms to effect transfer.

    Notwithstanding any provision of Sec. 178.28 of this chapter, it 
shall not be required that authorization be obtained from the Director 
for the transportation in interstate or foreign commerce of a firearm in 
order to effect the transfer of a firearm authorized under the 
provisions of this subpart.

[T.D. ATF-270, 53 FR 10510, Mar. 31, 1988]

                            Other Provisions



Sec. 179.93  Transfers of firearms to certain persons.

    Where the transfer of a destructive device, machine gun, short-
barreled shotgun, or short-barreled rifle is to be made by a person 
licensed under the provisions of Title I of the Gun Control Act of 1968 
(82 Stat. 1213) to a person not so licensed, the sworn statement

[[Page 1218]]

required by Sec. 178.98 of this chapter shall be attached to and 
accompany the transfer application required by this subpart.



         Subpart G--Registration and Identification of Firearms



Sec. 179.101  Registration of firearms.

    (a) The Director shall maintain a central registry of all firearms 
in the United States which are not in the possession of or under the 
control of the United States. This registry shall be known as the 
National Firearms Registration and Transfer Record and shall include:
    (1) Identification of the firearm as required by this part;
    (2) Date of registration; and
    (3) Identification and address of person entitled to possession of 
the firearm as required by this part.
    (b) Each manufacturer, importer, and maker shall register each 
firearm he manufactures, imports, or makes in the manner prescribed by 
this part. Each firearm transferred shall be registered to the 
transferee by the transferor in the manner prescribed by this part. No 
firearm may be registered by a person unlawfully in possession of the 
firearm except during an amnesty period established under section 207 of 
the Gun Control Act of 1968 (82 Stat. 1235).
    (c) A person shown as possessing firearms by the records maintained 
by the Director pursuant to the National Firearms Act (26 U.S.C. Chapter 
53) in force on October 31, 1968, shall be considered to have registered 
the firearms in his possession which are disclosed by that record as 
being in his possession on October 31, 1968.
    (d) The National Firearms Registration and Transfer Record shall 
include firearms registered to the possessors thereof under the 
provisions of section 207 of the Gun Control Act of 1968.
    (e) A person possessing a firearm registered to him shall retain 
proof of registration which shall be made available to any ATF officer 
upon request.
    (f) A firearm not identified as required by this part shall not be 
registered.

[36 FR 14256, Aug. 3, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55843, Sept. 28, 1979]



Sec. 179.102  How must firearms be identified?

    (a) You, as a manufacturer, importer, or maker of a firearm, must 
legibly identify the firearm as follows:
    (1) By engraving, casting, stamping (impressing), or otherwise 
conspicuously placing or causing to be engraved, cast, stamped 
(impressed) or placed on the frame or receiver thereof an individual 
serial number. The serial number must be placed in a manner not 
susceptible of being readily obliterated, altered, or removed, and must 
not duplicate any serial number placed by you on any other firearm. For 
firearms manufactured, imported, or made on and after January 30, 2002, 
the engraving, casting, or stamping (impressing) of the serial number 
must be to a minimum depth of .003 inch and in a print size no smaller 
than 1/16 inch; and
    (2) By engraving, casting, stamping (impressing), or otherwise 
conspicuously placing or causing to be engraved, cast, stamped 
(impressed), or placed on the frame, receiver, or barrel thereof certain 
additional information. This information must be placed in a manner not 
susceptible of being readily obliterated, altered or removed. For 
firearms manufactured, imported, or made on and after January 30, 2002, 
the engraving, casting, or stamping (impressing) of this information 
must be to a minimum depth of .003 inch. The additional information 
includes:
    (i) The model, if such designation has been made;
    (ii) The caliber or gauge;
    (iii) Your name (or recognized abbreviation) and also, when 
applicable, the name of the foreign manufacturer or maker;
    (iv) In the case of a domestically made firearm, the city and State 
(or recognized abbreviation thereof) where you as the manufacturer 
maintain your place of business, or where you, as the maker, made the 
firearm; and

[[Page 1219]]

    (v) In the case of an imported firearm, the name of the country in 
which it was manufactured and the city and State (or recognized 
abbreviation thereof) where you as the importer maintain your place of 
business. For additional requirements relating to imported firearms, see 
Customs regulations at 19 CFR part 134.
    (b) The depth of all markings required by this section will be 
measured from the flat surface of the metal and not the peaks or ridges. 
The height of serial numbers required by paragraph (a)(1) of this 
section will be measured as the distance between the latitudinal ends of 
the character impression bottoms (bases).
    (c) The Director may authorize other means of identification upon 
receipt of a letter application from you, submitted in duplicate, 
showing that such other identification is reasonable and will not hinder 
the effective administration of this part.
    (d) In the case of a destructive device, the Director may authorize 
other means of identifying that weapon upon receipt of a letter 
application from you, submitted in duplicate, showing that engraving, 
casting, or stamping (impressing) such a weapon would be dangerous or 
impracticable.
    (e) A firearm frame or receiver that is not a component part of a 
complete weapon at the time it is sold, shipped, or otherwise disposed 
of by you must be identified as required by this section.
    (f)(1) Any part defined as a machine gun, muffler, or silencer for 
the purposes of this part that is not a component part of a complete 
firearm at the time it is sold, shipped, or otherwise disposed of by you 
must be identified as required by this section.
    (2) The Director may authorize other means of identification of 
parts defined as machine guns other than frames or receivers and parts 
defined as mufflers or silencers upon receipt of a letter application 
from you, submitted in duplicate, showing that such other identification 
is reasonable and will not hinder the effective administration of this 
part.

(Approved by the Office of Management and Budget under control number 
1512-0550)

[T.D. ATF-461, 66 FR 40601, Aug. 3, 2001]



Sec. 179.103  Registration of firearms manufactured.

    Each manufacturer qualified under this part shall file with the 
Director an accurate notice on Form 2 (Firearms), Notice of Firearms 
Manufactured or Imported, executed under the penalties of perjury, to 
show his manufacture of firearms. The notice shall set forth the name 
and address of the manufacturer, identify his special (occupational) tax 
stamp and Federal firearms license, and show the date of manufacture, 
the type, model, length of barrel, overall length, caliber, gauge or 
size, serial numbers, and other marks of identification of the firearms 
he manufactures, and the place where the manufactured firearms will be 
kept. All firearms manufactured by him during a single day shall be 
included on one notice, Form 2 (Firearms), filed by the manufacturer no 
later than the close of the next business day. The manufacturer shall 
prepare the notice, Form 2 (Firearms), in duplicate, file the original 
notice as prescribed herein and keep the copy with the records required 
by subpart I of this part at the premises covered by his special 
(occupational) tax stamp. Receipt of the notice, Form 2 (Firearms), by 
the Director shall effectuate the registration of the firearms listed on 
that notice. The requirements of this part relating to the transfer of a 
firearm are applicable to transfers by qualified manufacturers.



Sec. 179.104  Registration of firearms by certain governmental entities.

    Any State, any political subdivision thereof, or any official police 
organization of such a government entity engaged in criminal 
investigations, which acquires for official use a firearm not registered 
to it, such as by abandonment or by forfeiture, will register such 
firearm with the Director by filing Form 10 (Firearms), Registration of 
Firearms Acquired by Certain Governmental Entities, and such 
registration shall become a part of the National Firearms Registration 
and Transfer Record. The application shall identify the applicant, 
describe each firearm covered by the application, show the location 
where each firearm usually

[[Page 1220]]

will be kept, and, if the firearm is unserviceable, the application 
shall show how the firearm was made unserviceable. This section shall 
not apply to a firearm merely being held for use as evidence in a 
criminal proceeding. The Form 10 (Firearms) shall be executed in 
duplicate in accordance with the instructions thereon. Upon registering 
the firearm, the Director shall return the original Form 10 (Firearms) 
to the registrant with notification thereon that registration of the 
firearm has been made. The registration of any firearm under this 
section is for official use only and a subsequent transfer will be 
approved only to other governmental entities for official use.

[36 FR 14256, Aug. 3, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-241, 51 FR 39633, Oct. 29, 1986; T.D. ATF-270, 
53 FR 10510, Mar. 31, 1988]

                              Machine Guns



Sec. 179.105  Transfer and possession of machine guns.

    (a) General. As provided by 26 U.S.C. 5812 and 26 U.S.C. 5822, an 
application to make or transfer a firearm shall be denied if the making, 
transfer, receipt, or possession of the firearm would place the maker or 
transferee in violation of law. Section 922(o), Title 18, U.S.C., makes 
it unlawful for any person to transfer or possess a machine gun, except 
a transfer to or by, or possession by or under the authority of, the 
United States or any department or agency thereof or a State, or a 
department, agency, or political subdivision thereof; or any lawful 
transfer or lawful possession of a machine gun that was lawfully 
possessed before May 19, 1986. Therefore, notwithstanding any other 
provision of this part, no application to make, transfer, or import a 
machine gun will be approved except as provided by this section.
    (b) Machine guns lawfully possessed prior to May 19, 1986. A machine 
gun possessed in compliance with the provisions of this part prior to 
May 19, 1986, may continue to be lawfully possessed by the person to 
whom the machine gun is registered and may, upon compliance with the 
provisions of this part, be lawfully transferred to and possessed by the 
transferee.
    (c) Importation and manufacture. Subject to compliance with the 
provisions of this part, importers and manufacturers qualified under 
this part may import and manufacture machine guns on or after May 19, 
1986, for sale or distribution to any department or agency of the United 
States or any State or political subdivision thereof, or for use by 
dealers qualified under this part as sales samples as provided in 
paragraph (d) of this section. The registration of such machine guns 
under this part and their subsequent transfer shall be conditioned upon 
and restricted to the sale or distribution of such weapons for the 
official use of Federal, State or local governmental entities. Subject 
to compliance with the provisions of this part, manufacturers qualified 
under this part may manufacture machine guns on or after May 19, 1986, 
for exportation in compliance with the Arms Export Control Act (22 
U.S.C. 2778) and regulations prescribed thereunder by the Department of 
State.
    (d) Dealer sales samples. Subject to compliance with the provisions 
of this part, applications to transfer and register a machine gun 
manufactured or imported on or after May 19, 1986, to dealers qualified 
under this part will be approved if it is established by specific 
information the expected governmental customers who would require a 
demonstration of the weapon, information as to the availability of the 
machine gun to fill subsequent orders, and letters from governmental 
entities expressing a need for a particular model or interest in seeing 
a demonstration of a particular weapon. Applications to transfer more 
than one machine gun of a particular model to a dealer must also 
establish the dealer's need for the quantity of samples sought to be 
transferred.
    (e) The making of machine guns on or after May 19, 1986. Subject to 
compliance with the provisions of this part, applications to make and 
register machine guns on or after May 19, 1986, for the benefit of a 
Federal, State or local governmental entity (e.g., an invention for 
possible future use of a governmental entity or the making of a weapon 
in connection with research and development on behalf of such an entity) 
will be approved if it is established by

[[Page 1221]]

specific information that the machine gun is particularly suitable for 
use by Federal, State or local governmental entities and that the making 
of the weapon is at the request and on behalf of such an entity.
    (f) Discontinuance of business. Since section 922(o), Title 18, 
U.S.C., makes it unlawful to transfer or possess a machine gun except as 
provided in the law, any qualified manufacturer, importer, or dealer 
intending to discontinue business shall, prior to going out of business, 
transfer in compliance with the provisions of this part any machine gun 
manufactured or imported after May 19, 1986, to a Federal, State or 
local governmental entity, qualified manufacturer, qualified importer, 
or, subject to the provisions of paragraph (d) of this section, dealer 
qualified to possess such, machine gun.

[T.D. ATF-270, 53 FR 10510, Mar. 31, 1988]



                 Subpart H--Importation and Exportation

                               Importation



Sec. 179.111  Procedure.

    (a) No firearm shall be imported or brought into the United States 
or any territory under its control or jurisdiction unless the person 
importing or bringing in the firearm establishes to the satisfaction of 
the Director that the firearm to be imported or brought in is being 
imported or brought in for:
    (1) The use of the United States or any department, independent 
establishment, or agency thereof or any State or possession or any 
political subdivision thereof; or
    (2) Scientific or research purposes; or
    (3) Testing or use as a model by a registered manufacturer or solely 
for use as a sample by a registered importer or registered dealer.

The burden of proof is affirmatively on any person importing or bringing 
the firearm into the United States or any territory under its control or 
jurisdiction to show that the firearm is being imported or brought in 
under one of the above paragraphs. Any person desiring to import or 
bring a firearm into the United States under this paragraph shall file 
with the Director an application on Form 6 (Firearms), Application and 
Permit for Importation of Firearms, Ammunition and Implements of War, in 
triplicate, executed under the penalties of perjury. The application 
shall show the information required by subpart G of Part 178 of this 
chapter. A detailed explanation of why the importation of the firearm 
falls within the standards set out in this paragraph shall be attached 
to the application. The person seeking to import or bring in the firearm 
will be notified of the approval or disapproval of his application. If 
the application is approved, the original Form 6 (Firearms) will be 
returned to the applicant showing such approval and he will present the 
approved application, Form 6 (Firearms), to the Customs officer at the 
port of importation. The approval of an application to import a firearm 
shall be automatically terminated at the expiration of one year from the 
date of approval unless, upon request, it is further extended by the 
Director. If the firearm described in the approved application is not 
imported prior to the expiration of the approval, the Director shall be 
so notified. Customs officers will not permit release of a firearm from 
Customs custody, except for exportation, unless covered by an 
application which has been approved by the Director and which is 
currently effective. The importation or bringing in of a firearm not 
covered by an approved application may subject the person responsible to 
civil and criminal liabilities. (26 U.S.C. 5861, 5871, and 5872.)
    (b) Part 178 of this chapter also contains requirements and 
procedures for the importation of firearms into the United States. A 
firearm may not be imported into the United States under this part 
unless those requirements and procedures are also complied with by the 
person importing the firearm.
    (c) The provisions of this subpart shall not be construed as 
prohibiting the return to the United States or any territory under its 
control or jurisdiction of a firearm by a person who can establish to 
the satisfaction of Customs that (1) the firearm was taken out of the 
United States or any territory under its control or jurisdiction

[[Page 1222]]

by such person, (2) the firearm is registered to that person, and (3) if 
appropriate, the authorization required by Part 178 of this chapter for 
the transportation of such a firearm in interstate or foreign commerce 
has been obtained by such person.

[36 FR 14256, Aug. 3, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55843, Sept. 28, 1979; ATF-325, 57 FR 
29787, July 7, 1992]



Sec. 179.112  Registration of imported firearms.

    (a) Each importer shall file with the Director an accurate notice on 
Form 2 (Firearms), Notice of Firearms Manufactured or Imported, executed 
under the penalties of perjury, showing the importation of a firearm. 
The notice shall set forth the name and address of the importer, 
identify the importer's special (occupational) tax stamp and Federal 
firearms license, and show the import permit number, the date of release 
from Customs custody, the type, model, length of barrel, overall length, 
caliber, gauge or size, serial number, and other marks of identification 
of the firearm imported, and the place where the imported firearm will 
be kept. The Form 2 (Firearms) covering an imported firearm shall be 
filed by the importer no later than fifteen (15) days from the date the 
firearm was released from Customs custody. The importer shall prepare 
the notice, Form 2 (Firearms), in duplicate, file the original return as 
prescribed herein, and keep the copy with the records required by 
subpart I of this part at the premises covered by the special 
(occupational) tax stamp. The timely receipt by the Director of the 
notice, Form 2 (Firearms), and the timely receipt by the Director of the 
copy of Form 6A (Firearms), Release and Receipt of Imported Firearms, 
Ammunition and Implements of War, required by Sec. 178.112 of this 
chapter, covering the weapon reported on the Form 2 (Firearms) by the 
qualified importer, shall effectuate the registration of the firearm to 
the importer.
    (b) The requirements of this part relating to the transfer of a 
firearm are applicable to the transfer of imported firearms by a 
qualified importer or any other person.
    (c) Subject to compliance with the provisions of this part, an 
application, Form 6 (Firearms), to import a firearm by an importer or 
dealer qualified under this part, for use as a sample in connection with 
sales of such firearms to Federal, State or local governmental entities, 
will be approved if it is established by specific information attached 
to the application that the firearm is suitable or potentially suitable 
for use by such entities. Such information must show why a sales sample 
of a particular firearm is suitable for such use and the expected 
governmental customers who would require a demonstration of the firearm. 
Information as to the availability of the firearm to fill subsequent 
orders and letters from governmental entities expressing a need for a 
particular model or interest in seeing a demonstration of a particular 
firearm would establish suitability for governmental use. Applications 
to import more than one firearm of a particular model for use as a 
sample by an importer or dealer must also establish the importer's or 
dealer's need for the quantity of samples sought to be imported.
    (d) Subject to compliance with the provisions of this part, an 
application, Form 6 (Firearms), to import a firearm by an importer or 
dealer qualified under this part, for use as a sample in connection with 
sales of such firearms to Federal, State or local governmental entities, 
will be approved if it is established by specific information attached 
to the application that the firearm is particularly suitable for use by 
such entities. Such information must show why a sales sample of a 
particular firearm is suitable for such use and the expected 
governmental customers who would require a demonstration of the firearm. 
Information as to the availability of the firearm to fill subsequent 
orders and letters from governmental entities expressing a need for a 
particular model or interest in seeing a demonstration of a particular 
firearm would establish suitability for governmental use. Applications 
to import more than one firearm of a particular model for use as a 
sample by an importer or dealer must also establish the importer's or 
dealer's need for the

[[Page 1223]]

quantity of samples sought to be imported.

[36 FR 14256, Aug. 3, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-241, 51 FR 39633, Oct. 29, 1986; T.D. ATF-270, 
53 FR 10511, Mar. 31, 1988]



Sec. 179.113  Conditional importation.

    The Director shall permit the conditional importation or bringing 
into the United States of any firearm for the purpose of examining and 
testing the firearm in connection with making a determination as to 
whether the importation or bringing in of such firearm will be 
authorized under this subpart. An application under this section shall 
be filed on Form 6 (Firearms), in triplicate, with the Director. The 
Director may impose conditions upon any importation under this section 
including a requirement that the firearm be shipped directly from 
Customs custody to the Director and that the person importing or 
bringing in the firearm must agree to either export the weapon or 
destroy it if a final determination is made that it may not be imported 
or brought in under this subpart. A firearm so imported or brought into 
the United States may be released from Customs custody in the manner 
prescribed by the conditional authorization of the Director.

[T.D. ATF-270, 53 FR 10511, Mar. 31, 1988]

                               Exportation



Sec. 179.114  Application and permit for exportation of firearms.

    Any person desiring to export a firearm without payment of the 
transfer tax must file with the Director an application on Form 9 
(Firearms), Application and Permit for Exportation of Firearms, in 
quadruplicate, for a permit providing for deferment of tax liability. 
Part 1 of the application shall show the name and address of the foreign 
consignee, number of firearms covered by the application, the intended 
port of exportation, a complete description of each firearm to be 
exported, the name, address, State Department license number (or date of 
application if not issued), and identification of the special 
(occupational) tax stamp of the transferor. Part 1 of the application 
shall be executed under the penalties of perjury by the transferor and 
shall be supported by a certified copy of a written order or contract of 
sale or other evidence showing that the firearm is to be shipped to a 
foreign designation. Where it is desired to make a transfer free of tax 
to another person who in turn will export the firearm, the transferor 
shall likewise file an application supported by evidence that the 
transfer will start the firearm in course of exportation, except, 
however, that where such transferor and exporter are registered special-
taxpayers the transferor will not be required to file an application on 
Form 9 (Firearms).



Sec. 179.115  Action by Director.

    If the application is acceptable, the Director will execute the 
permit, Part 2 of Form 9 (Firearms), to export the firearm described on 
the form and return three copies thereof to the applicant. Issuance of 
the permit by the Director will suspend assertion of tax liability for a 
period of six (6) months from the date of issuance. If the application 
is disapproved, the Director will indicate thereon the reason for such 
action and return the forms to the applicant.



Sec. 179.116  Procedure by exporter.

    Shipment may not be made until the permit, Form 9 (Firearms), is 
received from the Director. If exportation is to be made by means other 
than by parcel post, two copies of the form must be addressed to the 
District Director of Customs at the port of exportation, and must 
precede or accompany the shipment in order to permit appropriate 
inspection prior to lading. If exportation is to be made by parcel post, 
one copy of the form must be presented to the postmaster at the office 
receiving the parcel who will execute Part 4 of such form and return the 
form to the exporter for transmittal to the Director. In the event 
exportation is not effected, all copies of the form must be immediately 
returned to the Director for cancellation.



Sec. 179.117  Action by Customs.

    Upon receipt of a permit, Form 9 (Firearms), in duplicate, 
authorizing

[[Page 1224]]

the exportation of firearms, the District Director of Customs may order 
such inspection as deemed necessary prior to lading of the merchandise. 
If satisfied that the shipment is proper and the information contained 
in the permit to export is in agreement with information shown in the 
shipper's export declaration, the District Director of Customs will, 
after the merchandise has been duly exported, execute the certificate of 
exportation (Part 3 of Form 9 (Firearms)). One copy of the form will be 
retained with the shipper's export declaration and the remaining copy 
thereof will be transmitted to the Director.



Sec. 179.118  Proof of exportation.

    Within a six-month's period from date of issuance of the permit to 
export firearms, the exporter shall furnish or cause to be furnished to 
the Director (a) the certificate of exportation (Part 3 of Form 9 
(Firearms)) executed by the District Director of Customs as provided in 
Sec. 179.117, or (b) the certificate of mailing by parcel post (Part 4 
of Form 9 (Firearms)) executed by the postmaster of the post office 
receiving the parcel containing the firearm, or (c) a certificate of 
landing executed by a Customs officer of the foreign country to which 
the firearm is exported, or (d) a sworn statement of the foreign 
consignee covering the receipt of the firearm, or (e) the return 
receipt, or a reproduced copy thereof, signed by the addressee or his 
agent, where the shipment of a firearm was made by insured or registered 
parcel post. Issuance of a permit to export a firearm and furnishing of 
evidence establishing such exportation under this section will relieve 
the actual exporter and the person selling to the exporter for 
exportation from transfer tax liability. Where satisfactory evidence of 
exportation of a firearm is not furnished within the stated period, the 
transfer tax will be assessed.



Sec. 179.119  Transportation of firearms to effect exportation.

    Notwithstanding any provision of Sec. 178.28 of this chapter, it 
shall not be required that authorization be obtained from the Director 
for the transportation in interstate or foreign commerce of a firearm in 
order to effect the exportation of a firearm authorized under the 
provisions of this subpart.

[T.D. ATF-270, 53 FR 10511, Mar. 31, 1988]



Sec. 179.120  Refunds.

    Where, after payment of tax by the manufacturer, a firearm is 
exported, and satisfactory proof of exportation (see Sec. 179.118) is 
furnished, a claim for refund may be submitted on Form 843 (see 
Sec. 179.172). If the manufacturer waives all claim for the amount to be 
refunded, the refund shall be made to the exporter. A claim for refund 
by an exporter of tax paid by a manufacturer should be accompanied by 
waiver of the manufacturer and proof of tax payment by the latter.



Sec. 179.121  Insular possessions.

    Transfers of firearms to persons in the insular possessions of the 
United States are exempt from transfer tax, provided title in cases 
involving change of title (and custody or control, in cases not 
involving change of title), does not pass to the transferee or his agent 
in the United States. However, such exempt transactions must be covered 
by approved permits and supporting documents corresponding to those 
required in the case of firearms exported to foreign countries (see 
Secs. 179.114 and 179.115), except that the Director may vary the 
requirements herein set forth in accordance with the requirements of the 
governing authority of the insular possession. Shipments to the insular 
possessions will not be authorized without compliance with the 
requirements of the governing authorities thereof. In the case of a 
nontaxable transfer to a person in such insular possession, the 
exemption extends only to such transfer and not to prior transfers.

                         Arms Export Control Act



Sec. 179.122  Requirements.

    (a) Persons engaged in the business of importing firearms are 
required by the Arms Export Control Act (22 U.S.C. 2778) to register 
with the Director. (See Part 47 of this chapter.)
    (b) Persons engaged in the business of exporting firearms caliber 
.22 or larger

[[Page 1225]]

are subject to the requirements of a license issued by the Secretary of 
State. Application for such license should be made to the Office of 
Munitions Control, Department of State, Washington, DC 20502, prior to 
exporting firearms.

[36 FR 14256, Aug. 3, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-241, 51 FR 39634, Oct. 29, 1986; T.D. ATF-270, 
53 FR 10511, Mar. 31, 1988]



                     Subpart I--Records and Returns



Sec. 179.131  Records.

    For the purposes of this part, each manufacturer, importer, and 
dealer in firearms shall keep and maintain such records regarding the 
manufacture, importation, acquisition (whether by making, transfer, or 
otherwise), receipt, and disposition of firearms as are prescribed, and 
in the manner and place required, by part 178 of this chapter. In 
addition, each manufacturer, importer, and dealer shall maintain, in 
chronological order, at his place of business a separate record 
consisting of the documents required by this part showing the 
registration of any firearm to him. If firearms owned or possessed by a 
manufacturer, importer, or dealer are stored or kept on premises other 
than the place of business shown on his special (occupational) tax 
stamp, the record establishing registration shall show where such 
firearms are stored or kept. The records required by this part shall be 
readily accessible for inspection at all reasonable times by ATF 
officers.

(Approved by the Office of Management and Budget under control number 
1512-0387)

[36 FR 14256, Aug. 3, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-172, 49 FR 14942, Apr. 16, 1984]



             Subpart J--Stolen or Lost Firearms or Documents



Sec. 179.141  Stolen or lost firearms.

    Whenever any registered firearm is stolen or lost, the person losing 
possession thereof will, immediately upon discovery of such theft or 
loss, make a report to the Director showing the following:
    (a) Name and address of the person in whose name the firearm is 
registered, (b) kind of firearm, (c) serial number, (d) model, (e) 
caliber, (f) manufacturer of the firearm, (g) date and place of theft or 
loss, and (h) complete statement of facts and circumstances surrounding 
such theft or loss.



Sec. 179.142  Stolen or lost documents.

    When any Forms 1, 2, 3, 4, 5, 6A, or 10 (Firearms) evidencing 
possession of a firearm is stolen, lost, or destroyed, the person losing 
possession will immediately upon discovery of the theft, loss, or 
destruction report the matter to the Director. The report will show in 
detail the circumstances of the theft, loss, or destruction and will 
include all known facts which may serve to identify the document. Upon 
receipt of the report, the Director will make such investigation as 
appears appropriate and may issue a duplicate document upon such 
conditions as the circumstances warrant.



               Subpart K--Examination of Books and Records



Sec. 179.151  Failure to make returns: Substitute returns.

    If any person required by this part to make returns shall fail or 
refuse to make any such return within the time prescribed by this part 
or designated by the Director, then the return shall be made by an ATF 
officer upon inspection of the books, but the making of such return by 
an ATF officer shall not relieve the person from any default or penalty 
incurred by reason of failure to make such return.

(53 Stat. 437; 26 U.S.C. 6020)



Sec. 179.152  Penalties (records and returns).

    Any person failing to keep records or make returns, or making, or 
causing the making of, a false entry on any application, return or 
record, knowing such entry to be false, is liable to fine and 
imprisonment as provided in section 5871, I.R.C.

[[Page 1226]]



               Subpart L--Distribution and Sale of Stamps



Sec. 179.161  National Firearms Act stamps.

    ``National Firearms Act'' stamps evidencing payment of the transfer 
tax or tax on the making of a firearm are maintained by the Director. 
The remittance for purchase of the appropriate tax stamp shall be 
submitted with the application. Upon approval of the application, the 
Director will cause the appropriate tax to be paid by affixing the 
appropriate stamp to the application.

[T.D. ATF-270, 53 FR 10511, Mar. 31, 1988]



Sec. 179.162  Stamps authorized.

    Adhesive stamps of the $5 and $200 denomination, bearing the words 
``National Firearms Act,'' have been prepared and only such stamps shall 
be used for the payment of the transfer tax and for the tax on the 
making of a firearm.

[T.D. ATF-270, 53 FR 10511, Mar. 31, 1988]



Sec. 179.163  Reuse of stamps prohibited.

    A stamp once affixed to one document cannot lawfully be removed and 
affixed to another. Any person willfully reusing such a stamp shall be 
subject to the penalty prescribed by 26 U.S.C. 7208.

[36 FR 14256, Aug. 3, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55843, Sept. 28, 1979]



       Subpart M--Redemption of or Allowance for Stamps or Refunds



Sec. 179.171  Redemption of or allowance for stamps.

    Where a National Firearms Act stamp is destroyed, mutilated or 
rendered useless after purchase, and before liability has been incurred, 
such stamp may be redeemed by giving another stamp in lieu thereof. 
Claim for redemption of the stamp should be filed on ATF Form 2635 
(5620.8) with the Director. Such claim shall be accompanied by the stamp 
or by a satisfactory explanation of the reasons why the stamp cannot be 
returned, and shall be filed within 3 years after the purchase of the 
stamp.

(68A Stat. 830; 26 U.S.C. 6805)

[T.D. ATF-270, 53 FR 10511, Mar. 31, 1988]



Sec. 179.172  Refunds.

    As indicated in this part, the transfer tax or tax on the making of 
a firearm is ordinarily paid by the purchase and affixing of stamps, 
while special tax stamps are issued in payment of special (occupational) 
taxes. However, in exceptional cases, transfer tax, tax on the making of 
firearms, and/or special (occupational) tax may be paid pursuant to 
assessment. Claims for refunds of such taxes, paid pursuant to 
assessment, shall be filed on ATF Form 2635 (5620.8) within 3 years next 
after payment of the taxes. Such claims shall be filed with the regional 
director (compliance) serving the region in which the tax was paid. (For 
provisions relating to hand-carried documents and manner of filing, see 
26 CFR 301.6091-1(b) and 301.6402-2(a).) When an applicant to make or 
transfer a firearm wishes a refund of the tax paid on an approved 
application where the firearm was not made pursuant to an approved Form 
1 (Firearms) or transfer of the firearm did not take place pursuant to 
an approved Form 4 (Firearms), the applicant shall file a claim for 
refund of the tax on ATF Form 2635 (5620.8) with the Director. The claim 
shall be accompanied by the approved application bearing the stamp and 
an explanation why the tax liability was not incurred. Such claim shall 
be filed within 3 years next after payment of the tax.

(68A Stat. 808, 830; 26 U.S.C. 6511, 6805)

[T.D. ATF-270, 53 FR 10512, Mar. 31, 1988]



                  Subpart N--Penalties and Forfeitures



Sec. 179.181  Penalties.

    Any person who violates or fails to comply with the requirements of 
26 U.S.C. Chapter 53 shall, upon conviction, be subject to the penalties 
imposed under 26 U.S.C. 5871.

[T.D. ATF-48, 44 FR 55843, Sept. 28, 1979]

[[Page 1227]]



Sec. 179.182  Forfeitures.

    Any firearm involved in any violation of the provisions of 26 U.S.C. 
Chapter 53, shall be subject to seizure, and forfeiture under the 
internal revenue laws: Provided, however, That the disposition of 
forfeited firearms shall be in conformance with the requirements of 26 
U.S.C. 5872. In addition, any vessel, vehicle or aircraft used to 
transport, carry, convey or conceal or possess any firearm with respect 
to which there has been committed any violation of any provision of 26 
U.S.C. Chapter 53, or the regulations in this part issued pursuant 
thereto, shall be subject to seizure and forfeiture under the Customs 
laws, as provided by the act of August 9, 1939 (49 U.S.C. App., Chapter 
11).

[T.D. ATF-270, 53 FR 10512, Mar. 31, 1988]



                    Subpart O--Other Laws Applicable



Sec. 179.191  Applicability of other provisions of internal revenue laws.

    All of the provisions of the internal revenue laws not inconsistent 
with the provisions of 26 U.S.C. Chapter 53 shall be applicable with 
respect to the taxes imposed by 26 U.S.C. 5801, 5811, and 5821 (see 26 
U.S.C. 5846).

[T.D. ATF-48, 44 FR 55843, Sept. 28, 1979]



Sec. 179.192  Commerce in firearms and ammunition.

    For provisions relating to commerce in firearms and ammunition, 
including the movement of destructive devices, machine guns, short-
barreled shotguns, or short-barreled rifles, see 18 U.S.C. Chapter 44, 
and Part 178 of this chapter issued pursuant thereto.

[36 FR 14256, Aug. 3, 1971. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55843, Sept. 28, 1979]



Sec. 179.193  Arms Export Control Act.

    For provisions relating to the registration and licensing of persons 
engaged in the business of manufacturing, importing or exporting arms, 
ammunition, or implements of war, see the Arms Export Control Act (22 
U.S.C. 2778), and the regulations issued pursuant thereto. (See also 
Part 47 of this chapter.)

[T.D. ATF-270, 53 FR 10512, Mar. 31, 1988]



PART 194--LIQUOR DEALERS--Table of Contents




                     Subpart A--Scope of Regulations

Sec.
194.1  Applicability.
194.2  Territorial extent.
194.3  Basic permit requirements.
194.4  Relation to State and municipal law.

                         Subpart B--Definitions

194.11  Meaning of terms.

                 Subpart C--Special (Occupational) Taxes

194.21  Basis of tax.
194.22  Selling or offering for sale.

                           Dealers Classified

194.23  Retail dealer in liquors.
194.24  Wholesale dealer in liquors.
194.25  Retail dealer in beer.
194.26  Wholesale dealer in beer.
194.27  Limited retail dealer; persons eligible.
194.28  Sales of 20 wine gallons (75.7 liters) or more.

  Special Tax Liability of Certain Organizations, Agencies and Persons

194.29  Clubs or similar organizations.
194.30  Restaurants serving liquors with meals.
194.31  States, political subdivisions thereof, or the District of 
          Columbia.
194.32  Sales of denatured spirits or articles.
194.33  Sales of alcoholic compounds, preparations, or mixtures 
          containing distilled spirits, wines, or beer.
194.34  Sales by agencies and instrumentalities of the United States.
194.35  Warehouse receipts covering spirits.

                  Subpart D--Administrative Provisions

194.41  Forms prescribed.
194.42  Right of entry and examination.

                Subpart E--Places Subject to Special Tax

194.51  Special tax liability incurred at each place of business.
194.52  Place of sale.
194.53  Place of offering for sale.
194.54  Places of storage; deliveries therefrom.
194.55  Caterers.
194.56  Peddling.

[[Page 1228]]

             Sales in Two or More Areas on the Same Premises

194.57  General.
194.58  Hotels.
194.59  Ball park, race track, etc.; sales throughout the premises.

                    Subpart F--Each Business Taxable

194.71  Different businesses of same ownership and location.
194.72  Dealer in beer and dealer in liquors at the same location.

                         Subpart G--Partnerships

194.91  Liability of partners.
194.92  Addition of partners or incorporation of partnership.
194.93  Formation of a partnership by two dealers.
194.94  Withdrawal of one or more partners.

                    Subpart H--Payment of Special Tax

194.101  Special tax rates.
194.102  Date special tax is due.
194.103  Computation of special tax.

                Filing Return and Payment of Special Tax

194.104  Time for filing return.
194.104a  Place for filing return.
194.105  Method of payment.

                     Special Tax Return, Form 5630.5

194.106  Special tax returns.
194.106a  Employer identification number.
194.107  Execution of Form 5630.5.
194.109  Penalty for failure to file return or to pay tax.
194.110  Interest on unpaid tax.

                           Delinquent Returns

194.111  Waiver of penalties.

                      Subpart I--Special Tax Stamps

194.121  Issuance of stamps.
194.121a  Distribution of stamps for multiple locations.
194.122  Receipt in lieu of stamp prohibited.
194.123  Stamps covering business in violation of State law.
194.124  Stamps for passenger trains, aircraft, and vessels.
194.125  Carriers not engaged in passenger service.
194.126  Stamps for supply boats or vessels.
194.127  Stamps for retail dealers ``At Large''.

                  Stamp To Be Available for Examination

194.131  General.
194.132  Lost or destroyed.
194.133  Seizure by State authorities.

               Correction of Errors on Special Tax Stamps

194.134  Errors disclosed by taxpayers.
194.135  Errors discovered on inspection.

           Stamps for Incorrect Period or Incorrect Liability

194.136  General.
194.137  Credit by an ATF officer.
194.138  Receipt for taxes.
194.139  Credit for incorrect stamp.

                      Subpart J--Change of Location

194.151  Amended return, Form 5630.5; endorsement on stamp.
194.152  Failure to register change of address within 30 days.
194.153  Certificate in lieu of lost or destroyed special tax stamp.

             Subpart K--Change in Proprietorship or Control

194.161  Sale of business.
194.162  Incorporation of business.
194.163  New corporation.
194.164  Stockholder continuing business of corporation.
194.165  Change in trade name or style of business.
194.166  Change of name or increase in capital stock of a corporation.
194.167  Change in ownership of capital stock.
194.168  Change in membership of unincorporated club.
194.169  Change of control, persons having right of succession.
194.170  Failure to perfect right of succession within 30 days.

                  Subpart L--Exemptions and Exceptions

        Persons Exempt From Liquor and Beer Dealer Special Taxes

194.181  Single sale of liquors or warehouse receipts.
194.182  Proprietors of distilled spirits plants selling certain 
          distilled spirits or wines.
194.183  Proprietors of bonded wine cellars selling certain wines or 
          wine spirits.
194.183a  Proprietors of taxpaid wine bottling houses selling certain 
          wines.
194.184  Proprietors of breweries selling beer stored at their 
          breweries.
194.185  Wholesale dealers in liquors consummating sales of wines or 
          beer at premises of other dealers.
194.186  Wholesale dealers in beer consummating sales at premises of 
          other dealers.
194.187  Hospitals.
194.187a  Limited retail dealers.
194.187b  Coordination of taxes under 26 U.S.C. 5111 and 5121.

[[Page 1229]]

             Persons Who Are Not Dealers in Liquors or Beer

194.188  Persons making casual sales.
194.189  Agents, auctioneers, brokers, etc., acting on behalf of others.
194.190  Apothecaries or druggists selling medicines and tinctures.
194.191  Persons selling products unfit for beverage use.
194.192  Retail dealer selling in liquidation his entire stock.
194.193  Persons returning liquors for credit, refund, or exchange.

                   Subpart M--Refund of Special Taxes

194.201  Claims.
194.202  Time limit on filing of claim.
194.203  Discontinuance of business.

   Subpart N--Restrictions Relating to Purchases of Distilled Spirits

194.211  Unlawful purchases of distilled spirits.

     Subpart O--Prescribed Records and Reports, and Posting of Signs

                 Wholesale Dealers' Records and Reports

194.221  General requirements as to distilled spirits.
194.222  Requirements as to wines and beer.
194.223  Records to be kept by States, political subdivisions thereof, 
          or the District of Columbia.
194.224  Records to be kept by proprietors of distilled spirits plants.
194.225  Records of receipt.
194.226  Records of disposition.
194.227  Cancelled or corrected records.
194.228  Previously prescribed or approved records of receipt and 
          disposition.
194.229  Variations in format, or preparation, of records.
194.230  Monthly summary report.
194.231  Conversion between metric and U.S. units.
194.232  Discontinuance of business.
194.233  Requirements when a wholesale dealer in liquors maintains a 
          retail department.

                         Retail Dealer's Records

194.234  Requirements for retail dealers.

                      Files of Records and Reports

194.235  Filing.
194.236  Place of filing.

                           Period of Retention

194.237  Retention of records and files.
194.238  Photographic copies of records.
194.239-194.241  [Reserved]

Subpart P [Reserved]

         Subpart Q--Reuse and Possession of Used Liquor Bottles

194.261  Refilling of liquor bottles.
194.262  Possession of refilled liquor bottles.
194.263  Possession of used liquor bottles.
194.264  Mixed cocktails.

           Subpart R--Packaging of Alcohol for Industrial Uses

194.271  Requirements and procedure.
194.272  Labeling.

    Subpart S--Distilled Spirits for Export With Benefit of Drawback

194.281  General.
194.283  Records.

                        Subpart T--Miscellaneous

194.291  Destruction of marks and brands on wine containers.
194.292  Wine bottling.
194.293  Mixing cocktails in advance of sale.

    Authority: 26 U.S.C. 5001, 5002, 5111-5114, 5116, 5117, 5121-5124, 
5142, 5143, 5145, 5146, 5206, 5207, 5301, 5352, 5555, 5613, 5681, 5691, 
6001, 6011, 6061, 6065, 6071, 6091, 6109, 6151, 6311, 6314, 6402, 6511, 
6601, 6621, 6651, 6657, 7011, 7805.

    Source: 25 FR 6270, July 2, 1960, unless otherwise noted. 
Redesignated at 40 FR 16835, Apr. 15, 1975.



                     Subpart A--Scope of Regulations



Sec. 194.1  Applicability.

    This part contains the substantive and procedural requirements 
relating to the special taxes imposed on wholesale and retail dealers in 
liquors and in beer, requirements and procedures pertaining to 
operations of such dealers prescribed under Title 26 of the United 
States Code, as amended, and provisions relating to entry of premises 
and inspection of records by ATF officers.

[T.D. ATF-271, 53 FR 17552, May 17, 1988]



Sec. 194.2  Territorial extent.

    The provisions of this part shall be applicable in the several 
States of the United States and the District of Columbia.



Sec. 194.3  Basic permit requirements.

    Every person, except an agency of a State or political subdivision 
thereof, who intends to engage in the business of selling distilled 
spirits, wines, or

[[Page 1230]]

beer to other dealers is required by regulations in in Part 1 of this 
chapter to obtain a basic permit authorizing him to engage in such 
business.

[25 FR 6270, July 2, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55843, Sept. 28, 1979]



Sec. 194.4  Relation to State and municipal law.

    The payment of any tax imposed by 26 U.S.C. Chapter 51, for carrying 
on any trade or business specified in Sec. 194.1 shall not be held to 
exempt any person from any penalty or punishment provided by the laws of 
any State for carrying on such trade or business within such State, or 
in any manner to authorize the commencement or continuance of such trade 
or business contrary to the laws of such State or in places prohibited 
by municipal law; nor shall the payment of any such tax be held to 
prohibit any State from placing a duty or tax on the same trade or 
business, for State or other purposes.

(72 Stat. 1348; 26 U.S.C. 5145)

[T.D. 7130, 36 FR 12852, July 8, 1971. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55843, Sept. 28, 1979]



                         Subpart B--Definitions



Sec. 194.11  Meaning of terms.

    When used in this part and in forms prescribed under this part, 
where not otherwise distinctly expressed or manifestly incompatible with 
the intent thereof, terms shall have the meaning ascribed in this 
section. Words in the plural form shall include the singular, and vice 
versa, and words importing the masculine gender shall include the 
feminine. The terms ``includes'' and ``including'' do not exclude things 
not enumerated which are in the same general class.
    ATF Officer. An officer or employee of the Bureau of Alcohol, 
Tobacco and Firearms (ATF) authorized to perform any function relating 
to the administration or enforcement of this part.
    Beer. Beer, ale, porter, stout, and other similar fermented 
beverages (including sake or similar products) of any name or 
description containing one-half of 1 percent or more of alcohol by 
volume, brewed or produced from malt, wholly or in part, or from any 
substitute therefor.
    Bonded wine cellar. An establishment qualified under this chapter 
for the production, blending, cellar treatment, storage, bottling, and 
packaging or repackaging of untaxpaid wine.
    Brewery. An establishment qualified under this chapter for the 
production of beer.
    CFR. The Code of Federal Regulations.
    Dealer. Any person who sells, or offers for sale, any distilled 
spirits, wines, or beer.
    Denatured spirits or denatured alcohol. Spirits to which denaturants 
have been added as prescribed under this chapter.
    Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the 
Department of the Treasury, Washington, DC.
    Director of the service center. A director of an internal revenue 
service center.
    Distilled spirits or spirits. That substance known as ethyl alcohol, 
ethanol, or spirits of wine in any form, including all dilutions and 
mixtures thereof, from whatever source or by whatever process produced.
    Distilled spirits plant. An establishment qualified under Part 19 of 
this chapter for the production, storage or processing of distilled 
spirits.
    District director. A district director of internal revenue.
    Fiscal year. The period from October 1 of one calendar year through 
September 30 of the following year.
    Gallon or wine gallon. A United States gallon of liquid measure 
equivalent to the volume of 231 cubic inches.
    Liquor bottle. A bottle made of glass or earthenware, or of other 
suitable material approved by the Food and Drug Administration, which 
has been designed or is intended for use as a container for distilled 
spirits for sale for beverage purposes and which has been determined by 
the Director to adequately protect the revenue.
    Liquors. Distilled spirits, wines, or beer.
    Liter. A metric unit of capacity equal to 1,000 cubic centimeters of 
alcoholic beverage, and equivalent to 33.814 fluid

[[Page 1231]]

ounces. A liter is divided into 1,000 milliliters. Milliliter or 
milliliters may be abbreviated as ``ml''.
    Person. An individual, a trust, estate, partnership, association or 
other unincorporated organization, fiduciary, company, or corporation, 
or the District of Columbia, a State, or a political subdivision thereof 
(including a city, county, or other municipality).
    Place, or place of business. The entire office, plant, or area of 
the business in any one location under the same proprietorship; and 
passageways, streets, highways, rail crossings, waterways, or partitions 
dividing the premises shall not be deemed a separation for special tax 
purposes, if the various divisions are otherwise contiguous.
    Reclaim. To grind up a liquor bottle or container and use the ground 
up material to make products other than liquor bottles or containers.
    Recycle. To grind up a liquor bottle or container and use the ground 
up material to make new liquor bottles or containers.
    Regional director (compliance). The principal ATF regional official 
responsible for administering regulations in this part.
    Sale at retail or retail sale. Sale of liquors to a person other 
than a dealer.
    Sale at wholesale or wholesale sale. Sale of liquors to a dealer.
    Special tax. The occupational tax imposed on a dealer in liquors or 
a dealer in beer.
    Tax year. The period from July 1 of one calendar year through June 
30 of the following year.
    U.S.C. The United States Code.
    Wine. When used without qualification, the term includes every kind 
(class and type) of product produced on bonded wine premises from 
grapes, other fruit (including berries), or other suitable agricultural 
products and containing not more than 24 percent of alcohol by volume. 
The term includes all imitation, other than standard, or artificial wine 
and compounds sold as wine. A wine product containing less than one-half 
of one percent alcohol by volume is not taxable as wine when removed 
from the bonded wine premises.

(26 U.S.C. 7805 (68A Stat. 917, as amended) 27 U.S.C. 205 (49 Stat. 981, 
as amended))

[T.D. ATF-48, 43 FR 13541, Mar. 31, 1978, as amended by T.D. ATF-50, 43 
FR 37180, Aug. 22, 1978; 44 FR 55843, Sept. 28, 1979; T.D. ATF-62, 44 FR 
71693, Dec. 11, 1979; T.D. ATF-114, 47 FR 43949, Oct. 5, 1982; T.D. ATF-
344, 58 FR 40355, July 28, 1993]



                 Subpart C--Special (Occupational) Taxes



Sec. 194.21  Basis of tax.

    Special taxes are imposed on persons engaging in or carrying on the 
business or occupation of selling or offering for sale alcoholic liquors 
fit for use as a beverage or any alcoholic liquors sold for use as a 
beverage. The classes of liquor dealer business on which special 
occupational tax is imposed and the conditions under which such tax is 
incurred are specified in Secs. 194.23 through 194.26. No person shall 
engage in any business on which the special tax is imposed until he has 
filed a special tax return as provided in Sec. 194.26 of this part and 
paid the special tax for such business.

(72 Stat. 1346; 26 U.S.C. 5142)

[25 FR 6270, July 2, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-271, 53 FR 17552, May 17, 1988]



Sec. 194.22  Selling or offering for sale.

    Whether the activities of any person constitute engaging in the 
business of selling or offering for sale is to be determined by the 
facts in each case, but any course of selling or offering for sale, 
though to a restricted class of persons or without a view to profit, is 
within the meaning of the statute.

                           Dealers Classified



Sec. 194.23  Retail dealer in liquors.

    (a) General. Every person who sells or offers for sale distilled 
spirits, wines, or beer to any person other than a dealer is, except as 
provided in paragraph (b) of this section, a retail dealer in liquors. 
Every retail dealer in liquors shall pay special tax at the rate

[[Page 1232]]

specified in Sec. 194.101 for such dealer, unless such dealer is exempt 
from such special tax as provided in paragraph (c) of this section.
    (b) Persons not deemed to be retail dealers in liquors. The 
following persons are not deemed to be retail dealers in liquors within 
the meaning of 26 U.S.C. Chapter 51, and are not required to pay special 
tax as such dealer:
    (1) A retail dealer in beer as defined in Sec. 194.25,
    (2) A limited retail dealer as specified in Sec. 194.27, or
    (3) A person who only sells or offers for sale distilled spirits, 
wines, or beer as provided in Sec. 194.188 through Sec. 194.190 or 
Sec. 194.191(a).
    (c) Persons exempt from special tax. The following persons are 
exempt from special tax as retail dealers in liquors:
    (1) A wholesale dealer in liquors selling or offering for sale 
distilled spirits, wines, or beer, whether to dealers or persons other 
than dealers, at any place where such wholesale dealer in liquors is 
required to pay special tax as such dealer.
    (2) A wholesale dealer in beer selling or offering for sale beer 
only, whether to dealers or persons other than dealers, at any place 
where such wholesale dealer in beer is required to pay special tax as 
such dealer, or
    (3) A person who is exempt from special tax under the provisions of 
Secs. 194.181-194.184, 194.187, or 194.187a.

(72 Stat. 1340, 1343, 1344; 26 U.S.C. 5113, 5121, 5122)

[25 FR 6270, July 2, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55843, Sept. 28, 1979; T.D. ATF-271, 
53 FR 17552, May 17, 1988]



Sec. 194.24  Wholesale dealer in liquors.

    (a) General. Every person who sells or offers for sale distilled 
spirits, wines, or beer to another dealer is, except as provided in 
paragraph (b) of this section, a wholesale dealer in liquors. Every 
wholesale dealer in liquors is required to pay special tax at the rate 
specified in Sec. 194.101 for such dealer, unless such dealer is exempt 
from such special tax as provided in paragraph (c) of this section.
    (b) Persons not deemed to be wholesale dealers in liquors. The 
following persons are not deemed to be wholesale dealers in liquors 
within the meaning of 26 U.S.C., Chapter 51, and are not required to pay 
special tax as such dealer:
    (1) A wholesale dealer in beer as defined in Sec. 194.26,
    (2) A person who only sells or offers for sale distilled spirits, 
wines, or beer as provided in Secs. 194.188 through 194.190 or 
Sec. 194.192, or
    (3) A person returning liquors for credit, refund, or exchange as 
provided in Sec. 194.193.
    (c) Persons exempt from special tax. (1) The following persons are 
exempt from special tax as wholesale dealers in liquors:
    (i) A retail dealer in liquors who consummates sales of distilled 
spirits, beer or wine, or any combination thereof, to a limited retail 
dealer at the place where such retail dealer in liquors has paid the 
special tax as such dealer for the current tax year,
    (ii) A retail dealer in beer who, having paid the special tax as 
such dealer for the current tax year, consummates sales at his place of 
business of beer to a limited retail dealer, or
    (iii) A person who is exempt from such tax under the provision of 
Secs. 194.181 through 194.184.
    (2) A wholesale dealer in liquors who has paid the special tax as 
such dealer at the place or places, from which he conducts his selling 
operations is exempt from additional special tax on account of his sales 
of beer or wines to other dealers at the places of business of such 
dealers.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1340, as amended, 1344, as amended; 
sec. 1905, Pub. L. 94-455, 90 Stat. 1819 (26 U.S.C. 5111, 5112, 5113, 
5123))

[25 FR 6270, July 2, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
as amended by T.D. ATF-21, 40 FR 56887, Dec. 5, 1975; T.D. ATF-42, 42 FR 
8369, Feb. 10, 1977]



Sec. 194.25  Retail dealer in beer.

    (a) General. Every person who sells or offers for sale beer, but not 
distilled spirits or wines, to any person other than a dealer is, except 
as provided in paragraph (b) of this section, a retail dealer in beer. 
Every retail dealer in beer shall pay special tax at the rate specified 
in Sec. 194.101 for such dealer, unless such dealer is exempt from such

[[Page 1233]]

special tax as provided in paragraph (c) of this section.
    (b) Persons not deemed to be retail dealers in beer. The following 
persons are not deemed to be retail dealers in beer within the meaning 
of Chapter 51, I.R.C., and are not required to pay a special tax as such 
dealer:
    (1) A limited retail dealer as specified in Sec. 194.27, or
    (2) A person who only sells or offers for sale beer, but not 
distilled spirits or wines, as provided in Sec. 194.188 through 
Sec. 194.189 or Sec. 194.191(a).
    (c) Persons exempt from special tax. The following persons are 
exempt from special tax as retail dealers in beer:
    (1) A wholesale dealer in beer selling or offering for sale beer, 
but not distilled spirits or wines, whether to dealers or persons other 
than dealers, at any place where such wholesale dealer in beer is 
required to pay special tax as such dealer.
    (2) A person who is exempt from special tax under the provisions of 
Secs. 194.181, 194.184, 194,187, or 194.187a.

(72 Stat. 1340, 1343, 1344; 26 U.S.C. 5113, 5121, 5122)

[25 FR 6270, July 2, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55843, Sept. 28, 1979; T.D. ATF-271, 
53 FR 17552, May 17, 1988]



Sec. 194.26  Wholesale dealer in beer.

    (a) General. Every person who sells or offers for sale beer, but not 
distilled spirits or wines, to another dealer is, except as provided in 
paragraph (b) of this section, a wholesale dealer in beer. Every 
wholesale dealer in beer is required to pay special tax at the rate 
specified in Sec. 194.101 for such dealer, unless such dealer is exempt 
from such special tax as provided in paragraph (c) of this section.
    (b) Persons not deemed to be wholesale dealers in beer. The 
following persons are not deemed to be wholesale dealers in beer within 
the meaning of 26 U.S.C., Chapter 51, and are not required to pay 
special tax as such dealer:
    (1) A person who only sells or offers for sale beer, but not 
distilled spirits or wines, as provided in Sec. 194.188 through 
Sec. 194.189 or Sec. 194.192, or
    (2) A person returning beer for credit, refund or exchange as 
provided in Sec. 194.193.
    (c) Persons exempt from special tax. (1) The following persons are 
exempt from special tax as wholesale dealers in beer:
    (i) A retail dealer in liquors who consummates sales of distilled 
spirits, beer or wine, or any combination thereof, to a limited retail 
dealer at the place where such retail dealer in liquors has paid the 
special tax as such dealer for the current tax year,
    (ii) A retail dealer in beer who consummates sales of beer to a 
limited dealer at the place where such retail dealer in beer has paid 
the special tax as such dealer for the current tax year, or
    (iii) A person who is exempt from such tax under the provisions of 
Secs. 194.181 and 194.184.
    (2) A wholesale dealer in beer who has paid the special tax as such 
dealer at the place, or places, from which he conducts his selling 
operations is exempt from additional special tax on account of his sales 
of beer to other dealers at the places of business of such dealers.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1340, as amended, 1344, as amended; 
sec. 1905, Pub. L. 94-455, 90 Stat. 1819 (26 U.S.C. 5111, 5112, 5113, 
5123))

[25 FR 6270, July 2, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-42, 42 FR 8369, Feb. 10, 1977]



Sec. 194.27  Limited retail dealer; persons eligible.

    Any person selling distilled spirits, beer or wine, or any 
combination thereof, to members, guests, or patrons of bona fide fairs, 
reunions, picnics, carnivals, or similar outings, and any fraternal, 
civic, church, labor, charitable, benevolent, or ex-servicemen's 
organization selling distilled spirits, beer or wine, or any combination 
thereof, on the occasion of any kind of entertainment, dance, picnic, 
bazaar, or festival held by it, is a ``limited retail dealer,'' if the 
person or organization is not otherwise engaged in business as a dealer.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1344; sec. 1905, Pub. L. 94-455, 90 
Stat. 1819, as amended (26 U.S.C. 5122))

[T.D. ATF-271, 53 FR 17552, May 17, 1988]

[[Page 1234]]



Sec. 194.28  Sales of 20 wine gallons (75.7 liters) or more.

    Any person who sells or offers for sale distilled spirits, wines, or 
beer, in quantities of 20 wine gallons (75.7 liters) or more, to the 
same person at the same time, shall be presumed and held to be a 
wholesale dealer in liquors or a wholesale dealer in beer, as the case 
may be, unless such person shows by satisfactory evidence that such 
sale, or offer for sale, was made to a person other than a dealer.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1413 (26 U.S.C. 5691))

[T.D. ATF-34, 41 FR 46860, Oct. 26, 1976]

  Special Tax Liability of Certain Organizations, Agencies and Persons



Sec. 194.29  Clubs or similar organizations.

    A club or similar organization shall pay special tax if such club or 
organization:
    (a) Furnishes liquors to members under conditions constituting sale 
(including the acceptance of orders therefor, furnishing the liquors 
ordered and collecting the price thereof); or
    (b) Conducts a bar for the sale of liquors on the occasion of an 
outing, picnic, or other entertainment, unless the club is a ``limited 
retail dealer'' under Sec. 194.27 (the special tax stamp of the 
proprietor of the premises where the bar is located will not relieve the 
club or organization of special tax liability); or
    (c) Purchases liquors for members without prior agreement concerning 
payment therefor and such organization subsequently recoups.

However, special tax liability is not incurred if money is collected in 
advance from members for the purchase of liquors, or money is advanced 
for purchase of liquors on agreement with the members for reimbursement.

(72 Stat. 1340, 1343, 1344; 26 U.S.C. 5111, 5121, 5122)

[25 FR 6270, July 2, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55843, Sept. 28, 1979; T.D. ATF-271, 
53 FR 17552, May 17, 1988]



Sec. 194.30  Restaurants serving liquors with meals.

    Proprietors of restaurants and other persons who serve liquors with 
meals to customers, though no separate or specific charge for the 
liquors is made, shall pay special tax.

(72 Stat. 1344; 26 U.S.C. 5122)



Sec. 194.31  States, political subdivisions thereof, or the District of Columbia.

    A State, a political subdivision thereof, or the District of 
Columbia which engages in the business of selling, or offering for sale, 
distilled spirits, wines, or beer is not exempt from special tax. 
However, no such governmental entity shall be required to pay more than 
one special tax as a retail dealer in liquors regardless of the number 
of locations at which such entity carries on business as a retail dealer 
in liquors. Any such governmental entity which has paid the applicable 
wholesale dealer special tax at its principal office, and has paid the 
applicable special tax as a retail dealer, shall not be required to pay 
additional wholesale dealer special tax at its retail stores by reason 
of the sale thereat of distilled spirits, wines, or beer, to dealers 
qualified to do business as such within the jurisdiction of such entity.

(72 Stat. 1340, 1343, 1344, as amended; 26 U.S.C. 5111, 5113, 5121, 
5123)

[T.D. 7130, 36 FR 12852, July 8, 1971. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 194.32  Sales of denatured spirits or articles.

    Any person who sells denatured spirits or any substance or 
preparation made with or containing denatured spirits for use, or for 
sale for use, for beverage purposes, or who sells any of such products 
under circumstances from which it might reasonably appear that it is the 
intention of the purchaser to procure the same for sale or use for 
beverage purposes, shall pay special tax.

(72 Stat. 1314; 26 U.S.C. 5001)

[[Page 1235]]



Sec. 194.33  Sales of alcoholic compounds, preparations, or mixtures containing distilled spirits, wines, or beer.

    (a) Special tax liability. Special tax liability will be incurred 
with respect to the sale, or offering for sale, of alcoholic compounds, 
preparations, or mixtures containing distilled spirits, wines, or beer, 
unless such compounds, preparations, or mixtures are unfit for use for 
beverage purposes and are sold solely for use for nonbeverage purposes.
    (b) Products unfit for beverage use. Products meeting the 
requirements for exemption from qualification under the provisions of 
Sec. 19.58 of this chapter shall be deemed to be unfit for beverage 
purposes for the purposes of this part.

[25 FR 6270, July 2, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-379, 61 FR 31426, June 20, 1996]



Sec. 194.34  Sales by agencies and instrumentalities of the United States.

    Unless specifically exempt by statute, any agency or instrumentality 
of the United States, including post exchanges, ship's stores, ship's 
service stores, and commissaries, or any canteen, club, mess, or similar 
organization operated under regulations of any such agency or 
instrumentality, which sells, or offers for sale, distilled spirits, 
wines, or beer shall pay special tax as a dealer in liquors or as a 
dealer in beer, as the case may be, for carrying on such business.

(72 Stat. 1340, 1343, 1347; 26 U.S.C. 5111, 5121, 5143)



Sec. 194.35  Warehouse receipts covering spirits.

    Since the sale of warehouse receipts for distilled spirits is 
equivalent to the sale of distilled spirits, every person who sells or 
offers for sale warehouse receipts for spirits held or stored in a 
distilled spirits plant, customs bonded warehouse, or elsewhere, is 
required to file a special tax return and pay special tax as a wholesale 
dealer in liquors, or as a retail dealer in liquors, as the case may be, 
at the place where such warehouse receipts are sold, or offered for 
sale, unless exempt by the provisions of subpart L, of this part.

(72 Stat. 1340, 1343; 26 U.S.C. 5111, 5121)



                  Subpart D--Administrative Provisions



Sec. 194.41  Forms prescribed.

    (a) The Director is authorized to prescribe all forms required by 
this part. All of the information called for in each form shall be 
furnished as indicated by the headings on the form and the instructions 
on or pertaining to the form. In addition, information called for in 
each form shall be furnished as required by this part.
    (b) Requests for forms should be mailed to the ATF Distribution 
Center, 7943 Angus Court, Springfield, Virginia 22153.

(5 U.S.C. 552(a); 80 Stat. 383, as amended)

[T.D. ATF-92, 46 FR 46916, Sept. 23, 1981, as amended by T.D. ATF-249, 
52 FR 5962, Feb. 27, 1987; T.D. 372, 61 FR 20725, May 8, 1996]



Sec. 194.42  Right of entry and examination.

    Any ATF officer may enter during business hours the premises 
(including places of storage) of any dealer for the purpose of 
inspecting or examining any records or other documents required to be 
kept by such dealer under this part and any distilled spirits, wines, or 
beer kept or stored by such dealer on such premises.

(72 Stat. 1348; 26 U.S.C. 5146)



                Subpart E--Places Subject to Special Tax



Sec. 194.51  Special tax liability incurred at each place of business.

    Except as provided in Secs. 194.31 and 194.181 through 194.193, 
liability to special tax is incurred at each and every place where 
distilled spirits, wines, or beer are sold or offered for sale: 
Provided, That the term ``place'' as used in this section means the 
entire office, plant or area of the business in any one location under 
the same proprietorship; and passageways, streets, highways, rail 
crossings, waterways, or partitions dividing the premises shall not

[[Page 1236]]

be deemed sufficient separation to require the payment of addition 
special tax, if the various divisions are otherwise contiguous.

(72 Stat. 1347; 26 U.S.C. 5143)

[T.D. 7130, 36 FR 12852, July 8, 1971. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 194.52  Place of sale.

    The place at which ownership of liquors is transferred, actually or 
constructively, is the place of sale.

(72 Stat. 1347; 26 U.S.C. 5143)



Sec. 194.53  Place of offering for sale.

    Liquors are offered for sale (a) at the place where they are kept 
for sale and where a sale may be effected, or (b) at any place where 
sales are consummated. Liquors are not offered for sale by sending 
abroad an agent to take orders, or by establishing an office for the 
mere purpose of taking orders, provided in each case the orders received 
are transmitted to the principal for acceptance at the place where he 
holds a special tax stamp or is exempt from special tax as provided in 
subpart L of this part.

(72 Stat. 1347; 26 U.S.C. 5143)



Sec. 194.54  Places of storage; deliveries therefrom.

    Special tax is not required to be paid for warehouses and similar 
places which are used by dealers merely for the storage of liquors and 
are not places where orders for liquors are accepted. Where orders for 
liquors are received and duly accepted at a place where the dealer holds 
the required special tax stamp, the subsequent actual delivery of the 
liquors from a place of storage does not require the payment of special 
tax at such place of storage. Except as provided in Secs. 194.185 and 
194.186, a dealer holding a special tax stamp at a given place, who 
makes actual delivery of liquors from a warehouse at another place, 
without prior constructive delivery by the acceptance of an order 
therefor at the place covered by the special tax stamp, shall pay 
special tax at the place where ownership of the liquors is transferred.

(72 Stat. 1340, 1347; 26 U.S.C. 5113, 5143)



Sec. 194.55  Caterers.

    (a) General. Where a contract to furnish liquors is made by a 
caterer at his place of business where he holds a special tax stamp, no 
liability to special tax is incurred by the serving of the liquors at a 
different location.
    (b) Additional liability. Where the contract of a caterer provides 
for the sale of liquors by the drink at a place, or simultaneously at 
different places, other than his place of business where he holds a 
special tax stamp, a separate liability to special tax is incurred at 
each such place.
    (c) Records. Caterers must maintain sufficient commercial records to 
verify that their special (occupational) tax liabilities have been 
satisfied for all locations at which activities subject to special 
(occupational) tax occur. These commercial records should indicate the 
names and addresses of locations at which alcoholic beverages have been 
sold or offered for sale and the dates and times that such activities 
occurred. These commercial records must be available to ATF officers 
upon request.

(26 U.S.C. 5121, 5122, 5143, 5555, 6806, 7011)

[T.D. 7008, 34 FR 3664, Mar. 1, 1969. Redesignated at 40 FR 16835, Apr. 
15, 1975; T.D. ATF-329, 57 FR 39598, Sept. 1, 1992]



Sec. 194.56  Peddling.

    No person shall peddle distilled spirits, wines, or beer, except as 
provided in Secs. 194.126, 194.185, and 194.186. Persons peddling 
liquors and not meeting the exemptions specified in Secs. 194.126, 
194.185, and 194.186 are required to pay special tax at each place where 
sales are consummated.

(72 Stat. 1344, 1347; 26 U.S.C. 5123, 5143)

             Sales in Two or More Areas on the Same Premises



Sec. 194.57  General.

    Where liquors are sold by a proprietor in two or more areas within 
his place of business, only one special tax stamp is required. Where the 
proprietor lets to another person or persons the privilege of selling 
liquors in two or more areas within his place of business, whether such 
privilege is exercised separately or simultaneously with the

[[Page 1237]]

proprietor or another concessionaire, each such person shall pay but one 
special tax.



Sec. 194.58  Hotels.

    The proprietor of a hotel who conducts the sale of liquors 
throughout the hotel premises shall pay but one special tax. For 
example, different areas in a hotel such as banquet rooms, meeting 
rooms, guest rooms, or other such areas, operated by the proprietor, 
collectively constitute a single place of business. Where any 
concessionaire conducts the sale of liquors at two or more areas in a 
hotel, such areas shall be regarded as a single place of business, and 
he shall pay but one special tax.



Sec. 194.59  Ball park, race track, etc.; sales throughout the premises.

    The proprietor of a ball park, race track, stadium, pavilion, or 
other similar enclosure constituting one premises, who engages in the 
business of selling liquors throughout such enclosure, including sales 
from baskets or containers by his employees in his behalf, shall pay but 
one special tax for such enclosure. Each concessionaire having the same 
privilege throughout the enclosure, whether such privilege is exercised 
separately or simultaneously with the proprietor or another 
concessionaire, or concessionaires, shall pay but one special tax for 
such enclosure.

(72 Stat. 1347; 26 U.S.C. 5143)



                    Subpart F--Each Business Taxable



Sec. 194.71  Different businesses of same ownership and location.

    Where more than one taxable business is conducted by the same person 
at the same place, special tax for each business shall be paid at the 
rates severally prescribed, except as provided in Secs. 194.24 and 
194.26.

(72 Stat. 1347; 26 U.S.C. 5143)



Sec. 194.72  Dealer in beer and dealer in liquors at the same location.

    (a) Rule in effect prior to January 1, 1988. Any person who was 
required to pay special tax as a wholesale or retail dealer in beer, who 
entered business as such, and who thereafter, in the same or a 
subsequent month prior to January 1, 1988, began to sell distilled 
spirits or wine shall, in addition, pay the special tax as a wholesale 
or retail dealer in liquors before commencing the sale, or offering for 
sale, of distilled spirits or wine.
    (b) Rule in effect on January 1, 1988, and thereafter. Any person 
who pays special tax as a retail dealer in beer for a period beginning 
on or after January 1, 1988, (including one who pays such tax under the 
transition rule of Sec. 194.103(b)) is exempt from additional special 
tax as a retail dealer in liquors with respect to sales of distilled 
spirits or wine at the place and during the period for which the tax as 
a retail dealer in beer was paid. Similarly, any person who pays special 
tax as a wholesale dealer in beer for a period beginning on or after 
January 1, 1988, (including one who pays such tax under the transition 
rule of Sec. 194.103(b)) is exempt from additional special tax as a 
wholesale dealer in liquors with respect to sales of distilled spirits 
or wine at the place and during the period for which the tax as a 
wholesale dealer in beer was paid.

(26 U.S.C. 5113, 5143)

[T.D. ATF-285, 54 FR 12610, Mar. 28, 1989]



                         Subpart G--Partnerships



Sec. 194.91  Liability of partners.

    Any number of persons carrying on one business in partnership at any 
one place during any fiscal year shall be required to pay but one 
special tax for such business.

(72 Stat. 1347; 26 U.S.C. 5143)



Sec. 194.92  Addition of partners or incorporation of partnership.

    Where a number of persons who have paid special tax as partners 
admit one or more new members to the firm or form a corporation (a 
separate legal entity) to take over the business, the new firm or 
corporation shall pay special tax before commencing business.

(72 Stat. 1340, 1343; 26 U.S.C. 5111, 5121)



Sec. 194.93  Formation of a partnership by two dealers.

    Where two persons, each holding a special tax stamp for a business 
carried

[[Page 1238]]

on by himself, form a partnership, the firm shall pay special tax to 
cover the business conducted by the partnership.

(72 Stat. 1340, 1343; 26 U.S.C. 5111, 5121)



Sec. 194.94  Withdrawal of one or more partners.

    When one or more partners withdraw from a partnership which has paid 
special tax, the remaining partner, or partners, may file with ATF a 
notice of succession to the partnership business within 30 days after 
the change in control, as provided in Sec. 194.169, and carry on the 
same business at the same address for the remainder of the taxable 
period for which special tax was paid without paying additional special 
tax. However, where the remaining partner, or partners, do not file such 
timely notice of succession, they are required to pay special tax, as 
provided in Sec. 194.170.

(68A Stat. 846, 72 Stat. 1347; 26 U.S.C. 7011, 5143)

[25 FR 6270, July 2, 1960, as amended by T.D. 7008, 34 FR 3664, Mar. 1, 
1969. Redesignated at 40 FR 16835, Apr. 15, 1975, and amended by T.D. 
ATF-251, 52 FR 19335, May 22, 1987]



                    Subpart H--Payment of Special Tax



Sec. 194.101  Special tax rates.

    (a) Previous rates. Prior to January 1, 1988, the special 
(occupational) taxes imposed on dealers in liquors and beer were as 
follows:
    (1) Annual (tax year) rates:

Wholesale dealer in liquors (spirits, wines, beer)...............$255.00
Wholesale dealer in beer (beer only)..............................123.00
Retail dealer in liquors (spirits, wines, beer)....................54.00
Retail dealer in beer (beer only)..................................24.00

    (2) Monthly (calendar month) rates:

Limited retail dealer (spirits, wines, beer).......................$4.50
Limited retail dealer (wines, beer).................................2.20

    (b) Current rates. Effective January 1, 1988, special (occupational) 
taxes are imposed on dealers in liquors and beer at the following rates:

Wholesale dealer in liquors (spirits, wines, beer)..................$500
Wholesale dealer in beer (beer only).................................500
Retail dealer in liquors (spirits, wines, beer)......................250
Retail dealer in beer (beer only)....................................250

(Sec. 201, Pub. L. 85-859, 72 Stat. 1340, 1343; sec. 1905, Pub. L. 94-
455, 90 Stat. 1819 (26 U.S.C. 5111, 5121))

[T.D. ATF-271, 53 FR 17552, May 17, 1988; 54 FR 11866, Mar. 22, 1989]



Sec. 194.102  Date special tax is due.

    Special taxes shall be paid on or before July 1 of each year, or 
before engaging in businesss.

(72 Stat. 1346; 26 U.S.C. 5142)



Sec. 194.103  Computation of special tax.

    (a) General. In the case of a person engaged in a business subject 
to special tax during the month of July, the special tax liability shall 
be reckoned for the entire tax year beginning July 1 and ending June 30 
following. Where business is commenced subsequent to July, the liability 
shall be reckoned proportionately from the first day of the month in 
which the liability to a special tax commenced to June 30 following. For 
example, a person commencing business in August is liable to special tax 
for 11 months, or eleven-twelfths of the annual tax.
    (b) Transition rule. A taxpayer who was engaged in a business on 
January 1, 1988, for which a special (occupational) tax was paid for a 
taxable period which began before January 1, 1988, and included that 
date, shall pay an increased special tax for the period January 1, 1988, 
through June 30, 1988. The increased tax shall not exceed one-half the 
excess (if any) of (1) the rate of special tax in effect on January 1, 
1988, over (2) the rate of such tax in effect on December 31, 1987. The 
increased special tax shall be paid on or before April 1, 1988.

(72 Stat. 1346; 26 U.S.C. 5142)

[25 FR 6270, July 2, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55843, Sept. 28, 1979; T.D. ATF-271, 
53 FR 17554, May 17, 1988]

                Filing Return and Payment of Special Tax



Sec. 194.104  Time for filing return.

    Every person who intends to engage in a business subject to special 
tax

[[Page 1239]]

under the provisions of this part shall, on or before the date such 
business is commenced, file a special tax return, Form 5630.5, with 
payment of tax; and every taxpayer who continues into a new tax year a 
business subject to special tax under the provisions of this part shall 
file a Form 5630.5 with tax on or before July 1 of the new tax year. A 
taxpayer subject to special tax for the same period at two or more 
locations shall file one special tax return, Form 5630.5, prepared as 
provided in Sec. 194.106, with payment of tax to cover all such 
locations. If the return and tax are received in the mail and the U.S. 
postmark on the cover shows that it was deposited in the mail in the 
United States within the time prescribed for filing in an envelope or 
other appropriate wrapper which was properly addressed with postage 
prepaid, the return shall be considered as timely filed. If the postmark 
is not legible, the sender has the burden of proving the date when the 
postmark was made. When registered mail is used the date of registration 
shall be accepted as the postmark date.

(68A Stat. 732 as amended, 749 as amended (26 U.S.C. 6011, 6071); sec. 
201, Pub. L. 85-859, 72 Stat. 1346 as amended (26 U.S.C. 5142))

[T.D. ATF-70, 45 FR 33979, May 21, 1980, as amended by T.D. ATF-251, 52 
FR 19335, May 22, 1987]



Sec. 194.104a  Place for filing return.

    Form 5630.5 with remittance of tax shall be filed with ATF in 
accordance with the instructions on the form.

[T.D. ATF-251, 52 FR 19335, May 22, 1987]



Sec. 194.105  Method of payment.

    Payment of special tax shall be made in cash, or by check or money 
order payable to ``Bureau of Alcohol, Tobacco and Firearms''. If a check 
or money order so tendered is not honored when presented for payment, 
the person who tendered such check or money order shall remain liable 
for the payment of the special tax, and for all penalties and additions, 
to the same extent as if the check or money order had not been tendered. 
In addition, unless the person who tendered the check or money order can 
show that such check or money order was issued in good faith, and with 
reasonable cause to believe that it would be duly paid, there shall be 
paid as penalty an amount equal to 1 percent of the amount of the check 
or money order, except that if the amount of the check or money order is 
less than $500, the penalty shall be $5, or the amount of the check or 
money order, whichever is lesser.

(68A Stat. 777, 826; 26 U.S.C. 6311, 6657)

[25 FR 6270, July 2, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-251, 52 FR 19335, May 22, 1987]

                     Special Tax Return, Form 5630.5



Sec. 194.106  Special tax returns.

    (a) General. Special tax shall be paid by return. The prescribed 
return is ATF Form 5630.5, Special Tax Registration and Return. Special 
tax returns, with payment of tax, shall be filed with AFT in accordance 
with instructions on the form.
    (b) Preparation of ATF Form 5630.5. All of the information called 
for on ATF Form 5630.5 shall be provided, including:
    (1) The true name of the taxpayer.
    (2) The trade name(s) (if any) of the business(es) subject to 
special tax.
    (3) The employer identification number (see Sec. 194.106a).
    (4) The exact location of the place of business, by name and number 
of building or street, or if these do not exist, by some description in 
addition to the post office address. In the case of one return for two 
or more locations, the address to be shown shall be the taxpayer's 
principal place of business (or principal office, in the case of a 
corporate taxpayer).
    (5) The class(es) of special tax to which the taxpayer is subject.
    (6) Ownership and control information: That is, the name, position, 
and residence address of every owner of the business and of every person 
having power to control its management and policies with respect to the 
activity subject to special tax. ``Owner of the business'' shall include 
every partner, if the taxpayer is a partnership, and every person owning 
10% or more of its stock, if the taxpayer is a corporation. However, the 
ownership and control information required by this paragraph

[[Page 1240]]

need not be stated if the same information has been previously provided 
to ATF, and if the information previously provided is still current.
    (c) Multiple locations and/or classes of tax. A taxpayer subject to 
special tax for the same period at more than one location or for more 
than one class of tax shall--
    (1) File one special tax return, ATF Form 5630.5, with payment of 
tax, to cover all such locations and classes of tax; and
    (2) Prepare, in duplicate, a list identified with the taxpayer's 
name, address (as shown on ATF Form 5630.5), employer identification 
number, and period covered by the return. The list shall show, by 
States, the name, address, and tax class of each location for which 
special tax is being paid. The original of the list shall be filed with 
ATF in accordance with instructions on the return, and the copy shall be 
retained at the taxpayer's principal place of business (or principal 
office, in the case of a corporate taxpayer) for the period specified in 
Sec. 194.237.

(26 U.S.C. 6011, 6151, 7011)

[T.D. ATF-271, 53 FR 17552, May 17, 1988]



Sec. 194.106a  Employer identification number.

    (a) Requirement. The employer identification number (defined in 26 
CFR 301.7701-12) of the taxpayer who has been assigned such a number 
shall be shown on each special tax return, including amended returns, 
filed under this subpart. Failure of the taxpayer to include the 
employer identification number may result in the imposition of the 
penalty specified in Sec. 70.113 of this chapter.
    (b) Application for employer identification number. Each taxpayer 
who files a special tax return, who has not already been assigned an 
employer identification number, shall file IRS Form SS-4 to apply for 
one. The taxpayer shall apply for and be assigned only one employer 
identification number, regardless of the number of places of business 
for which the taxpayer is required to file a special tax return. The 
employer identification number shall be applied for no later than 7 days 
after the filing of the taxpayer's first special tax return. IRS Form 
SS-4 may be obtained from the director of an IRS service center or from 
any IRS district director.
    (c) Preparation and filing of IRS Form SS-4. The taxpayer shall 
prepare and file IRS Form SS-4, together with any supplementary 
statement, in accordance with the instructions on the form or issued in 
respect to it.

(26 U.S.C. 6109)

[T.D. ATF-271, 53 FR 17553, May 17, 1988; as amended by T.D. ATF-301, 55 
FR 47657, Nov. 14, 1990]



Sec. 194.107  Execution of Form 5630.5.

    The return of an individual proprietor shall be signed by the 
proprietor; the return of a partnership shall be signed by a member of 
the firm; and the return of a corporation shall be signed by a duly 
authorized officer thereof: Provided, That any individual, partnership, 
or corporation may appoint an agent to sign in his behalf. In each case, 
the person signing the return shall designate his capacity as 
``individual owner,'' ``member of firm,'' ``agent,'' ``attorney-in-
fact'' or, in the case of a corporation, the title of the officer. 
Receivers, trustees, assignees, executors, administrators, and other 
legal representatives who continue the business of a dealer by reason of 
death, insolvency, or other circumstances, shall indicate the fiduciary 
capacity in which they act. Returns signed by persons, as agents or 
attorneys-in-fact, will not be accepted unless, in each instance, the 
principal named on the return has executed a power of attorney 
authorizing such person to sign the return, and such power of attorney 
is filed with the ATF officer with whom the Form 5630.5 is required to 
be filed. Form 11 shall be verified by a written declaration that the 
return has been executed under the penalties of perjury.

(68A Stat. 748, 749; 26 U.S.C. 6061, 6065)

[T.D. 7008, 34 FR 3665, Mar. 1, 1969. Redesignated at 40 FR 16835, Apr. 
15, 1975, as amended by T.D. ATF-251, 52 FR 19335, May 22, 1987]



Sec. 194.109  Penalty for failure to file return or to pay tax.

    (a) Failure to file return. Any person required by this part to file 
a return on Form 5630.5 who fails to file the return

[[Page 1241]]

on or before the last date prescribed in Sec. 194.104 shall pay, as an 
addition to the tax, a delinquency penalty, unless it is shown that such 
failure is due to reasonable cause and not due to willful neglect. The 
delinquency penalty for failure to file the return on or before the last 
date prescribed shall be 5 percent of the amount required to be shown as 
tax on the return if the failure is for not more than one month; with an 
additional 5 percent for each additional month or fraction thereof 
during which such delinquency continues, but not more than 25 percent in 
the aggregate.
    (b) Failure to pay tax. Any person who files a return on Form 5630.5 
under the provisions of this part and who fails to pay the amount shown 
as tax on the return on or before the date prescribed in Sec. 194.104 
for payment of such tax, shall pay, as an addition to the tax, a 
penalty, unless it is shown that such failure is due to reasonable cause 
and not due to willful neglect. The penalty for failure to pay the tax 
on or before the date prescribed for payment shall be 0.5 percent of the 
amount shown as tax on the return if the failure is not more than one 
month; with an additional 0.5 percent for each additional month or 
fraction thereof during which the failure continues, but not exceeding 
25 percent in the aggregate.
    (c) Limitations. With respect to any return on Form 5630.5, the 
amount of the addition under paragraph (a) of this section shall be 
reduced by the amount of the addition under paragraph (b) of this 
section for any month to which an addition to tax applies under both 
paragraphs (a) and (b) of this section. If the amount of tax required to 
be shown as tax on the return is less than the amount shown as tax on 
such return, the penalties prescribed in paragraphs (a) and (b) of this 
section shall be applied by substituting such lower amount.

(68A Stat. 821, as amended; 26 U.S.C. 6651)

[T.D. 7110, 36 FR 8034, Apr. 29, 1971. Redesignated at 40 FR 16835, Apr. 
15, 1975, as amended by T.D. ATF-251, 52 FR 19335, May 22, 1987]



Sec. 194.110  Interest on unpaid tax.

    (a) General. Interest is due on unpaid special tax from the date the 
tax was required to be paid to the date paid. Interest shall be charged 
for each day at the rate prescribed by law in effect on that day.
    (b) Adjusted interest rates. Adjusted interest rates are announced 
by the Commissioner of Internal Revenue not later than October 15 of any 
year, in accordance with variations in the prime interest rate during 
September of that year, as prescribed by 26 U.S.C. 6621(b). The regional 
director (compliance) will provide information, when requested, 
regarding interest rates applicable to specific time periods.

(Sec. 7, Pub. L. 96-625, 88 Stat. 2114 as amended (26 U.S.C. 6621); 68A 
Stat. 817 (26 U.S.C. 6601))

[T.D. ATF-116, 47 FR 51571, Nov. 16, 1982]

                           Delinquent Returns



Sec. 194.111  Waiver of penalties.

    In every case where a special tax return is not filed, or the tax is 
not paid, at the time prescribed in Sec. 194.104, the delinquency 
penalties specified in Sec. 194.109 for failure to file a return or for 
failure to pay the amount shown as tax on the return will be asserted 
and collected unless a reasonable cause for delay in filing the return 
or payment of the tax is clearly established. A dealer who believes the 
circumstances which delayed his filing of the return or payment of the 
tax are reasonable, and who desires to have the penalties waived, shall 
submit with his return a written statement under the penalties of 
perjury, affirmatively showing all of the circumstances alleged as 
reasonable causes for delay. If the regional director (compliance) 
determines that the delinquency was due to a reasonable cause and not to 
willful neglect or gross negligence, the addition to the tax will not be 
assessed. If the taxpayer exercised ordinary business care and prudence 
and was nevertheless unable to file the return within the prescribed 
time, or if he made a satisfactory showing that he exercised ordinary 
business care and prudence in providing for payment of his tax liability 
and was nevertheless either unable to pay the tax or would have suffered 
an undue hardship if he had paid on the due date, then the delay is due 
to reasonable cause. Mere ignorance of the

[[Page 1242]]

law will not be considered a reasonable cause.

(68A Stat. 821, as amended; 26 U.S.C. 6651)

[T.D. 7110, 36 FR 8034, Apr. 29, 1971. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-251, 52 FR 19335, May 22, 1987]



                      Subpart I--Special Tax Stamps



Sec. 194.121  Issuance of stamps.

    (a) Issuance. Upon filing a return properly executed on Form 5630.5, 
together with a remittance in the full amount due, the taxpayer will be 
issued an appropriately designated stamp. Special tax stamps will not be 
issued in the case of a return covering liability for a past period.
    (b) Multiple locations. If Form 5630.5 with remittance covers 
multiple locations, the taxpayer will be issued one stamp for each 
location listed in the attachment to Form 5630.5 required by 
Sec. 194.106(c) but showing, as to name and address, only the name of 
the taxpayer and the address of the taxpayer's principal place of 
business (or principal office in the case of a corporate taxpayer).

(Sec. 1905, Pub. L. 94-455, 90 Stat. 1820 (26 U.S.C. 5142))

[T.D. ATF-42, 42 FR 8369, Feb. 10, 1977, as amended by T.D. ATF-251, 52 
FR 19335, May 22, 1987]



Sec. 194.121a  Distribution of stamps for multiple locations.

    On receipt of the special tax stamps, the taxpayer will verify that 
he has one stamp for each location listed in his copy of the attachment 
to Form 5630.5 and examine them to insure that his name and address are 
correctly stated thereon. Incorrect stamps shall be returned to the 
regional director (compliance) as provided in Sec. 194.134. The taxpayer 
shall designate one stamp for each location listed in his copy of the 
attachment to Form 5630.5 required by Sec. 194.106 and shall type 
thereon the trade name, if different from the name in which the stamp 
was issued, and the address of the business conducted at the location 
for which that stamp is designated. He shall then forward each stamp to 
the place of business designated on the stamp. On receipt of the stamp 
at the designated place of business, it shall be examined to verify that 
the name and address of the business are correctly stated. If they are 
not, the stamp shall be returned, with a statement showing the nature of 
the error and the correct data, to the principal office of the taxpayer 
who will compare the data on the stamp with his retained copy of the 
attachment to Form 5630.5. If the error in name and address was made by 
the taxpayer, he will correct the stamp and return it to the designated 
place of business. If the error was made in the attachment to Form 
5630.5, the taxpayer will file with ATF an amended Form 5630.5 and an 
amended attachment with a statement explaining the error.

[T.D. 7110, 36 FR 8035, Apr. 29, 1971. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-251, 52 FR 19335, May 22, 1987]



Sec. 194.122  Receipt in lieu of stamp prohibited.

    No receipt shall be issued in lieu of a special tax stamp. A receipt 
may be given only pending the issuance of a stamp, or where the tax 
liability relates to a prior fiscal year.

(68A Stat. 778; 26 U.S.C. 6314)



Sec. 194.123  Stamps covering business in violation of State law.

    Regional directors (compliance) are without authority to refuse to 
issue a special tax stamp to a liquor dealer engaged in business in 
violation of State law. The stamp is not a Federal permit or license, 
but is merely a receipt for the tax. The stamp affords the holder no 
protection against prosecution for violation of State law.

(72 Stat. 1348; 26 U.S.C. 5145)

[25 FR 6270, July 2, 1960, as amended by T.D. 7008, 34 FR 3665, Mar. 1, 
1969. Redesignated at 40 FR 16835, Apr. 15, 1975, and amended by T.D. 
ATF-251, 52 FR 19335, May 22, 1987]



Sec. 194.124  Stamps for passenger trains, aircraft, and vessels.

    Special tax stamps may be issued in general terms ``in the United 
States'' to persons who will carry on the business of retail dealers in 
liquors or retail dealers in beer, on trains, aircraft, boats or other 
vessels, engaged in the

[[Page 1243]]

business of carrying passengers. If sales of liquors are made at the 
same time on two or more passenger carriers, a special tax stamp shall 
be obtained for each such carrier. However, a dealer may transfer any 
such stamp from one passenger carrier to another on which he conducts 
his business, without registering the transfer with ATF, and he may 
conduct such business throughout the passenger carrying train, aircraft, 
boat or other vessel, to which the stamp is transferred. A person 
subject to special tax on two or more passenger carriers shall file one 
Form 5630.5, prepared in the manner prescribed in Sec. 194.106(b), with 
payment of tax, to cover all such carriers and shall specify on the Form 
5630.5 the number of passenger carriers for which special tax is being 
paid.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1344 as amended, 1347 as amended (26 
U.S.C. 5123, 5143))

[T.D. ATF-70, 45 FR 33980, May 21, 1980, as amended by T.D. ATF-251, 52 
FR 19335, May 22, 1987]



Sec. 194.125  Carriers not engaged in passenger service.

    Except as provided in Sec. 194.126, a special tax stamp may not be 
issued for the retailing of liquor on any railroad train, aircraft, or 
boat that is not engaged in the business of carrying passengers.

(72 Stat. 1344, 1347; 26 U.S.C. 5123, 5143)



Sec. 194.126  Stamps for supply boats or vessels.

    Special tax stamps may be issued to persons carrying on the business 
of a retail dealer in liquor or a retail dealer in beer on supply boats 
or vessels operated by them, when such persons operate from a fixed 
address in a port or harbor and supply exclusively boats or other 
vessels, or persons thereon, at such port or harbor. Any person desiring 
to obtain a special tax stamp for such business shall file Form 5630.5, 
prepared in the manner prescribed in Sec. 194.106(b), with remittance, 
and shall specify on the Form 5630.5, or on an attachment thereto, (a) 
that the business will consist of supplying exclusively boats, vessels, 
or persons thereon, (b) the name of the port or harbor at which the 
business is to be carried on, and (c) the fixed address from which 
operations are to be conducted: Provided, That where such sales are to 
be made from two or more supply boats or vessels, the dealer shall 
obtain a special tax stamp for each such boat or vessel, and shall, in 
addition to the information required by paragraphs (a), (b), and (c) of 
this section, specify on the Form 5630.5 the number of supply boats or 
vessels for which special tax is being paid. A dealer may transfer any 
such stamp from any boat or vessel on which he discontinues such sales 
to any other boat or vessel on which he proposes to conduct such 
business, without registering the transfer with ATF. If the taxpayer 
operates from two or more fixed addresses, he shall prepare, as required 
by Sec. 194.106(c), one tax return, Form 5630.5, to cover all such 
addresses and shall, in addition, show on the attachment to the Form 
5630.5 the number of stamps to be procured for supply boats or vessels 
operating from each address. On receipt of the special tax stamps, the 
taxpayer shall designate an appropriate number of stamps for each 
location and shall type thereon the trade name, if different from the 
name in which the stamp was issued, and the fixed address of the 
business conducted at the location for which the stamps are designated. 
He shall then forward the stamps to the place of business designated on 
the stamps. The taxpayer shall enter on each stamp received for 
retailing liquors on supply boats or vessels, immediately after the 
occupational tax classification, the phrase ``on supply boats'' and in 
the lower margin the notation, ``Covers supplying exclusively of boats 
or vessels, or persons thereon, at the Port (or Harbor) of'' followed by 
the name of such port or harbor.

(72 Stat. 1344, 1347; 26 U.S.C. 5123, 5143)

[T.D. 7110, 36 FR 8035, Apr. 29, 1971. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-251, 52 FR 19335, May 22, 1987]



Sec. 194.127  Stamps for retail dealers ``At Large.''

    A retail dealer in liquors or a retail dealer in beer whose business 
requires him to travel from place to place in different States of the 
United States,

[[Page 1244]]

such as those who sell at carnivals or circuses, may obtain a special 
tax stamp ``At Large'' covering his activities throughout the United 
States with the payment of but one special tax as a retail dealer in 
liquors or a retail dealer in beer, as required by his business. A 
dealer desiring such stamp shall state on his special tax return, Form 
11, or on an attached statement, the nature of his business and the 
reason he requires a special tax stamp ``At Large.'' Unless satisfied 
that the business of the dealer requires him to travel in more than one 
State, the regional director (compliance) will not issue a stamp ``At 
Large'' to the applicant.

(72 Stat. 1344; 26 U.S.C. 5123)

[25 FR 6270, July 2, 1960, as amended by T.D. 7008, 34 FR 3665, Mar. 1, 
1969. Redesignated at 40 FR 16835, Apr. 15, 1975, and amended by T.D. 
ATF-251. 52 FR 19335, May 22, 1987]

                  Stamp To Be Available For Examination



Sec. 194.131  General.

    A dealer shall keep his special tax stamp available in his place of 
business for inspection by any ATF officer during business hours. A 
dealer holding a special tax stamp as a retail dealer in liquors or a 
retail dealer in beer ``At Large'' or ``In the United States'' shall 
keep the stamp available for inspection where he is conducting such 
business.

(72 Stat. 1348; 26 U.S.C. 5146)

[T.D. 7130, 36 FR 12852, July 8, 1971. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 194.132  Lost or destroyed.

    If a special tax stamp has been lost or destroyed, the dealer shall 
immediately notify the regional director (compliance) who issued the 
stamp. A ``Certificate in Lieu of Lost or Destroyed Special Tax Stamp'' 
will be issued to the dealer who submits an affidavit showing to the 
satisfaction of the regional director (compliance) that the stamp was 
lost or destroyed. The certificate shall be kept available for 
inspection in the same manner as prescribed for a special tax stamp in 
Sec. 194.131.

[T.D. 7130, 36 FR 12852, July 8, 1971. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-251, 52 FR 19335, May 22, 1987]



Sec. 194.133  Seizure by State authorities.

    Where a stamp designated ``Retail Dealer in Liquors'' is seized by 
State authorities because it does not conform to the dealer's local 
license or permit (wine, or wine and beer), the regional director 
(compliance) will, on request, issue a ``Certificate in Lieu of Lost or 
Destroyed Special Tax Stamp'' to show that the dealer has paid special 
tax as a ``Retail Dealer in Wine'' or ``Retail Dealer in Wines and 
Beer,'' as the case may require.

[25 FR 6270, July 2, 1960, as amended by T.D. 7008, 34 FR 3665, Mar. 1, 
1969. Redesignated at 40 FR 16835, Apr. 15, 1975, and amended by T.D. 
ATF-251, 52 FR 19335, May 22, 1987]

               Correction of Errors on Special Tax Stamps



Sec. 194.134  Errors disclosed by taxpayers.

    On receipt of a special tax stamp, the dealer will examine it to 
insure that the name and address are correctly stated; if not, the 
taxpayer will return the stamp to the regional director (compliance) who 
issued the stamp with a statement showing the nature of the error and 
the correct name or address. The regional director (compliance), on 
receipt of such stamp and statement, will compare the data on the stamp 
with that of the Form 5630.5 in his files, correct the error if made in 
his office, and return the stamp to the taxpayer. However, if the error 
was in the taxpayer's preparation of the Form 5630.5, the regional 
director (compliance) will require such taxpayer to file a new Form 
5630.5, designated ``Amended Return,'' setting forth the taxpayer's 
correct name and address, and a statement explaining the error on the 
original Form 5630.5. On receipt of the amended Form 5630.5 and a 
satisfactory explanation of the error, the regional director 
(compliance) will

[[Page 1245]]

make the proper correction on the stamp and return it to the taxpayer.

[T.D. 7008, 34 FR 3665, Mar. 1, 1969. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-251, 52 FR 19335, May 22, 1987; T.D. 
ATF-344, 58 FR 40355, July 28, 1993]



Sec. 194.135  Errors discovered on inspection.

    When an ATF officer discovers a material error on a special tax 
stamp in the name, ownership, or address of the dealer, he will secure 
from the dealer a new Form 5630.5, designated ``Amended Return,'' 
showing correctly all of the information required in Sec. 194.106 and, 
in the body of the form or in an attachment thereto, a statement of the 
reason for requesting correction of the stamp. On receipt of the amended 
return and an acceptable explanation for the error, the officer will 
make the proper correction on the stamp and return it to the taxpayer. 
However, if the error found by the ATF officer is on a special tax stamp 
obtained pursuant to a return on Form 5630.5 filed under the provisions 
of Sec. 194.106(c), he shall instruct the taxpayer to return the stamp, 
with a statement showing the nature of the error and the correct data, 
to the dealer's principal office as provided in Sec. 194.121a.

[T.D. 7110, 36 FR 8035, Apr. 29, 1971. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-251, 52 FR 19335, May 22, 1987]

           Stamps for Incorrect Period or Incorrect Liability



Sec. 194.136  General.

    Where a dealer through error has filed a return and paid special tax 
for an incorrect period of liability or incorrect class of business, he 
shall prepare a correct Form 5630.5 for each taxable year involved, 
designating it as an ``Amended Return,'' and submit the amended return, 
or returns, with remittance for the total tax and additions to the tax 
(delinquency penalties and interest) incurred, to ATF in accordance with 
the instructions on the Form 5630.5 or, if the error is discovered by an 
ATF officer, to such officer: Provided, That, subject to the limitations 
imposed by 26 U.S.C. 6511, the tax (including additions thereto) paid 
for the incorrect period of liability or incorrect class of business may 
be allowed as a credit against the correct tax (including any additions 
thereto) as provided in Sec. 194.137 or Sec. 194.139 on surrender of the 
incorrect stamp or stamps with the amended return or returns noted to 
show that credit is requested. Tax (including additions thereto) paid 
for a stamp for an incorrect period of liability or incorrect class of 
business which is not credited as provided in Sec. 194.137 or 
Sec. 194.139, including any creditable tax and additions thereto in 
excess of the correct tax (including additions thereto), may be refunded 
pursuant to the provisions of subpart M of this part where the dealer 
has filed a correct return on Form 5630.5 with remittance for the 
correct amount of tax (including any additions thereto). A new stamp 
will be issued only in respect of a current period of liability.

(68A Stat. 732; 26 U.S.C. 6011)

[T.D. 7008, 34 FR 3666, Mar. 1, 1969. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55844, Sept. 28, 1979; T.D. 
ATF-251, 52 FR 19335, May 22, 1987]



Sec. 194.137  Credit by an ATF officer.

    Where the ATF officer discovers that tax was paid for an incorrect 
class of business for a correct period of liability and examination of 
the incorrect stamp discloses that no additions to the tax were 
collected, he may, where the correct tax (including any additions 
thereto) exceeds the incorrect tax paid, credit the tax paid against 
such correct tax on receipt by him of an amended Form 5630.5, as 
provided in Sec. 194.136, remittance of the difference between the tax 
paid and the correct tax plus any additions thereto, and the incorrect 
stamp. The regional director (compliance) will issue a correct stamp if 
the additional tax collected is for a current year.

(68A Stat. 791, 808; 26 U.S.C. 6402, 6511)

[25 FR 6270, July 2, 1960, as amended by T.D. 7008, 34 FR 3665, Mar. 1, 
1969. Redesignated at 40 FR 16835, Apr. 15, 1975, and amended by T.D. 
ATF-251, 52 FR 19335, May 22, 1987]

[[Page 1246]]



Sec. 194.138  Receipt for taxes.

    An ATF officer will issue a receipt to a dealer if cash is received 
as a remittance in payment of special tax (including penalties and 
interest, if any), or for any type of remittance received if the dealer 
requests a receipt.

[T.D. ATF-21, 40 FR 56887, Dec. 5, 1975]



Sec. 194.139  Credit for incorrect stamp.

    The regional director (compliance) may credit the tax (including 
additions thereto) paid for an incorrect stamp if the taxpayer has filed 
an amended return on Form 5630.5, as provided in Sec. 194.136, and has, 
with his amended return, surrendered the incorrect stamp for credit and 
submitted a remittance for the difference between the incorrect tax and 
the correct tax. Where the tax (and additions thereto) paid for the 
incorrect stamp surrendered exceeds the amount due, the regional 
director (compliance) shall advise the dealer to file claim for refund 
of such excess on ATF Form 2635 (5620.8). The applicable provisions of 
subpart M of this part shall govern claims for refund.

(68A Stat. 791, 808; 26 U.S.C. 6402, 6511)

[T.D. 7008, 34 FR 3666, Mar. 1, 1969. Redesignated at 40 FR 16835, Apr. 
15 1975, and amended by T.D. ATF-251, 52 FR 19335, May 22, 1987]



                      Subpart J--Change of Location



Sec. 194.151  Amended return, Form 5630.5; endorsement on stamp.

    (a) General. A dealer who, during the taxable period for which 
special tax was paid, removes the business to a place other than that 
specified on the original special tax return on Form 5630.5, and stated 
on the special tax stamp, shall, within 30 days from the date the dealer 
begins to carry on such business at the new location, register the 
change with ATF by filing a new return on Form 5630.5, designated 
``Amended Return'', setting forth the time when and the place to which 
such removal was made, and shall surrender the special tax stamp with 
the Form 5630.5 for endorsement of the change in location: Provided, 
That a dealer, whose original return on ATF Form 5630.5 covered only one 
location, may deliver the amended return and the stamp at any ATF 
office, or to any ATF officer inspecting the business, in lieu of 
mailing them to ATF: Provided further, That a dealer who filed an 
original return under the provisions of Sec. 194.106(c) shall forward 
with the amended return an attachment showing both the old and new 
address of any place of business which has been relocated, and the 
special tax stamp covering the location from which the business was 
removed. The regional director (compliance) or the ATF officer receiving 
such return or stamp shall, if the return is submitted within the 30-day 
period, enter the proper endorsement on the stamp and return it to the 
taxpayer.
    (b) Caterers. A caterer who sells liquor by the drink at locations 
other than his or her principal place of business shall not be required 
to provide the change of location registration prescribed in paragraph 
(a) of this section for such catering activities provided the records 
prescribed by Sec. 194.55(c) are maintained as required. For a permanent 
change in location of the principal place of business, an amended return 
must be filed in accordance with paragraph (a) of this section.

[T.D. 7008, 34 FR 3666, Mar. 1, 1969. Redesignated at 40 FR 16835, Apr. 
15, 1975, as amended by T.D. ATF-21, 40 FR 56887, Dec. 5, 1975; T.D. 
ATF-251, 52 FR 19336, May 22, 1987; T.D. ATF-271, 53 FR 17553, May 17, 
1988; T.D. ATF-329, 57 FR 39598, Sept. 1, 1992]



Sec. 194.152  Failure to register change of address within 30 days.

    A dealer who removes his business to a place other than that stated 
on his special tax stamp and fails to register such removal with ATF 
within 30 days from the date he begins to carry on such business at the 
new location is required to pay special tax, and interest on the amount 
required to be shown on the return as tax, just as if he were engaging 
in business for the first time (as to liability for delinquency penalty 
see Sec. 194.109). The amount of tax, delinquency penalty, and interest 
to be paid shall be computed as provided in

[[Page 1247]]

Sec. Sec. 194.103, 194.109, and 194.110, respectively.

(68A Stat. 846, 72 Stat. 1347; 26 U.S.C. 7011, 5143)

[25 FR 6270, July 2, 1960, as amended by T.D. 7008, 34 FR 3664, Mar. 1, 
1969. Redesignated at 40 FR 16835, Apr. 15, 1975,as amended by T.D. ATF-
251, 52 FR 19336, May 22, 1987]



Sec. 194.153  Certificate in lieu of lost or destroyed special tax stamp.

    The provisions of this part shall apply to certificates in lieu of 
lost or destroyed special tax stamps issued to taxpayers under the 
provisions of Secs. 194.132 and 194.133.



             Subpart K--Change in Proprietorship or Control



Sec. 194.161  Sale of business.

    A special tax stamp is a receipt for tax, personal to the one to 
whom issued, and is not transferable from one dealer to another. Where 
there occurs a change in the proprietorship of a business for which 
special tax has been paid, the successor shall pay special tax and 
procure a special tax stamp for such business, except as provided in 
Sec. 194.169.

(72 Stat. 1340, 1343; 26 U.S.C. 5111, 5121)



Sec. 194.162  Incorporation of business.

    Where an individual or a firm engaged in business requiring payment 
of special tax forms a corporation to take over and conduct the 
business, the corporation (a separate legal entity) shall pay special 
tax and procure a stamp in its own name.

(72 Stat. 1340, 1343; 26 U.S.C. 5111, 5121)



Sec. 194.163  New corporation.

    Where a new corporation is formed to take over and conduct the 
business of one or more corporations which have paid special tax, the 
new corporation shall pay special tax and procure a stamp in its own 
name.

(72 Stat. 1340, 1343; 26 U.S.C. 5111, 5121)



Sec. 194.164  Stockholder continuing business of corporation.

    A special tax stamp held by a corporation as a dealer in liquors, or 
as a dealer in beer, cannot cover the same business carried on by one or 
more of its stockholders after dissolution of the corporation.

(72 Stat. 1340, 1343; 26 U.S.C. 5111, 5121)



Sec. 194.165  Change in trade name or style of business.

    A dealer who has paid the special tax for his business at a given 
location is not required to pay additional special tax by reason of a 
mere change in the trade name or style under which he conducts such 
business, or by reason of a change in management which involves no 
change in proprietorship of the business.

(72 Stat. 1340, 1343, 26 U.S.C. 5111, 5121)



Sec. 194.166  Change of name or increase in capital stock of a corporation.

    Additional special tax is not required by reason of a change of name 
or increase in the capital stock of a corporation if a new corporation 
is not created under the laws of the State of incorporation.

(72 Stat. 1340, 1343; 26 U.S.C. 5111, 5121)



Sec. 194.167  Change in ownership of capital stock.

    Additional special tax is not required by reason of the sale or 
transfer of all or a controlling interest in the capital stock of a 
corporation.



Sec. 194.168  Change in membership of unincorporated club.

    Additional special tax is not required of an unincorporated club by 
reason of changes in membership, where such changes do not result in the 
dissolution thereof and the formation of a new club.



Sec. 194.169  Change of control, persons having right of succession.

    Certain persons other than the special taxpayer may, without paying 
additional special tax, secure the right to carry on the same business 
at the same address for the remainder of the taxable period for which 
the special tax was paid. Such persons are:
    (a) The surviving spouse or child, or executor, administrator, or 
other legal representative of a deceased dealer;
    (b) A husband or wife succeeding to the business of his or her 
living spouse;

[[Page 1248]]

    (c) A receiver or trustee in bankruptcy, or an assignee for benefit 
of creditors; and
    (d) The partner or partners remaining after death or withdrawal of a 
member of a partnership.

In order to secure such right, the person or persons continuing the 
business shall file with ATF, within 30 days from the date on which the 
successor begins to carry on the business, an amended special tax return 
on Form 5630.5, showing the basis of the succession, and shall surrender 
the unexpired special tax stamp or stamps for endorsement of the change 
in control: Provided, That, if the original return, Form 5630.5, was 
filed under the provisions of Sec. 194.106(b), the person succeeding to 
the business may deliver the amended return and stamp to any ATF office, 
or to any ATF officer inspecting the business, in lieu of mailing them 
to ATF. If the applicant has the right of succession and the return and 
stamp are submitted on time, the regional director (compliance) or other 
ATF officer receiving them will enter the proper endorsement on the 
stamp and return it to the successor.

(68A Stat. 846, 72 Stat. 1347; 26 U.S.C. 7011, 5143)

[T.D. 7110, 36 FR 8036, Apr. 29, 1971. Redesignated at 40 FR 16835, Apr. 
15, 1975; as amended at 52 FR 19336, May 22, 1987]



Sec. 194.170  Failure to perfect right of succession within 30 days.

    A person who would have had the privilege of succeeding, as provided 
in Sec. 194.169, to a business for which the special tax had been paid 
for the remainder of the taxable period but failed to register such 
succession within 30 days from the date he began to carry on such 
business is required to pay special tax, and interest on the amount 
required to be shown on the return as tax, just as if he were engaging 
in a new business (as to liability for delinquency penalty see 
Sec. 194.109). The amount of tax, delinquency penalty, and interest to 
be paid shall be computed as provided in Secs. 194.103, 194.109, and 
194.110.

(68A Stat. 846, 72 Stat. 1347; 26 U.S.C. 7011, 5143)



                  Subpart L--Exemptions and Exceptions

        Persons Exempt From Liquor and Beer Dealer Special Taxes



Sec. 194.181  Single sale of liquors or warehouse receipts.

    A single sale of distilled spirits, wines, or beer, or a single sale 
of one or more warehouse receipts for distilled spirits, unattended by 
circumstances showing the person making the sale to be engaged in the 
business, does not subject the vendor to special tax.

(72 Stat. 1340, 1343, 1346; 26 U.S.C. 5111, 5121, 5142)



Sec. 194.182  Proprietors of distilled spirits plants selling certain distilled spirits or wines.

    (a) Exemption of proprietor. No proprietor of a distilled spirits 
plant shall be required to pay special tax as a wholesale or retail 
dealer in liquors on account of the sale at his principal business 
office as designated in writing to the regional director (compliance), 
or at his distilled spirits plant, of distilled spirits or wines which, 
at the time of sale, are stored at his distilled spirits plant, or had 
been removed from such plant to a taxpaid storeroom the operations of 
which are integrated with the operations of such plant and which is 
contiguous or adjacent to, or in the immediate vicinity of, such plant. 
However, no such proprietor shall have more than one place of sale, as 
to each plant, that shall be exempt from special tax under this section.
    (b) Place of exemption. Unless the exemption is claimed elsewhere, 
it will be presumed that the exemption is claimed at the plant where the 
spirits or wines are stored. If the proprietor wishes to be exempt from 
payment of special tax with respect to sales at his principal business 
office rather than for sales at his plant, he shall notify the regional 
director (compliance) of the region in which the plant is located of his 
intention. Such notice shall be in writing, on letter size paper and 
shall be submitted in triplicate. On approval, two copies will be 
returned to the proprietor, one to be filed at the principal office, and 
the original will be retained by the regional director (compliance).

[[Page 1249]]

Where the exemption is claimed for a place other than the plant, special 
tax shall be paid at the plant if sales are made thereat.

(72 Stat. 1340; 26 U.S.C. 5113)



Sec. 194.183  Proprietors of bonded wine cellars selling certain wines or wine spirits.

    (a) Exemption of proprietor. No proprietor of a bonded wine cellar 
shall be required to pay special tax as a wholesale or retail dealer in 
liquors on account of the sale at his principal business office as 
designated in writing to the regional director (compliance), or at his 
bonded wine cellar, of wines or wine spirits which, at the time of sale, 
are stored at his bonded wine cellar, or had been removed from such 
bonded wine cellar to a taxpaid storeroom the operations of which are 
integrated with the operations of such bonded wine cellar and which is 
contiguous or adjacent to, or in the immediate vicinity of, such bonded 
wine cellar. However, no such proprietor shall have more than one place 
of sale, as to each bonded wine cellar, that shall be exempt from 
special tax under this section.
    (b) Place of exemption. Unless the exemption is claimed elsewhere, 
it will be presumed that the exemption is claimed at the bonded wine 
cellar where the wines or wine spirits are stored. If the proprietor 
wishes to be exempt from special tax with respect to sales at his 
principal office rather than for sales at his bonded wine cellar, he 
shall notify the regional director (compliance) of the region in which 
the bonded wine cellar is located of his intention. Such notice shall be 
in writing, on letter size paper and shall be submitted in triplicate. 
On approval two copies will be returned to the proprietor, one to be 
filed at the principal office, and the original will be retained by the 
regional director (compliance). Where the exemption is claimed for a 
place other than the bonded wine cellar, special tax shall be paid at 
the bonded wine cellar if sales are made thereat.
    (c) Exception. Where the proprietor of a bonded wine cellar 
consummates sales of wines to other dealers at the purchasers' places of 
business, through a delivery route salesman or otherwise, the proprietor 
of the bonded wine cellar is required to pay special tax as a wholesale 
dealer in liquors (or wines) at each place from which he conducts such 
selling operations.

(72 Stat. 1340; 26 U.S.C. 5113)



Sec. 194.183a  Proprietors of taxpaid wine bottling houses selling certain wines.

    (a) Exemption of proprietor. No proprietor of a taxpaid wine 
bottling house shall be required to pay special tax as a wholesale or 
retail dealer in liquors for a period beginning on or after January 1, 
1988, (including such tax under the transition rule of Sec. 194.103(b)) 
on account of sales of wine transacted at the proprietor's principal 
business office, as designated in writing to the regional director 
(compliance), or at the proprietor's taxpaid wine bottling house. 
However, this exemption applies only to wines which, at the time of 
sale, are either stored at the taxpaid wine bottling house or had been 
removed therefrom to a taxpaid storeroom whose operations are integrated 
with those of the taxpaid wine bottling house and which is contiguous or 
adjacent to, or in the immediate vicinity of, the taxpaid wine bottling 
house. Moreover, no such proprietor shall have more than one place of 
sale, as to each taxpaid wine bottling house, that shall be exempt from 
special tax under this section.
    (b) Place of exemption. Unless the exemption is claimed elsewhere, 
it will be presumed that the exemption is claimed at the taxpaid wine 
bottling house where the wines are stored. If the proprietor wishes to 
be exempt from special tax with respect to sales at the proprietor's 
principal office rather than at the proprietor's taxpaid wine bottling 
house, the proprietor shall so notify the regional director (compliance) 
of the region in which the taxpaid wine bottling house is located. The 
notice shall be in writing, on letter size paper, and shall be submitted 
in triplicate. On approval, two copies will be returned to the 
proprietor, one to be filed at the proprietor's principal office, and 
the original will be retained by the regional director (compliance). 
Where the exemption is claimed for a

[[Page 1250]]

place other than the taxpaid wine bottling house, special tax shall be 
paid at the taxpaid wine bottling house if sales are made there.
    (c) Exception. Where the proprietor of a taxpaid wine bottling house 
consummates sales of wines to other dealers at the purchasers' places of 
business, through a delivery route salesman or otherwise, the proprietor 
of the taxpaid wine bottling house is required to pay special tax as a 
wholesale dealer in liquors at each place from which the proprietor 
conducts such selling operations.

(26 U.S.C. 5113)

[T.D. ATF-285, 53 FR 12610, Mar. 28, 1989]



Sec. 194.184  Proprietors of breweries selling beer stored at their breweries.

    (a) Exemption of proprietor. No proprietor of a brewery shall be 
required to pay special tax as a wholesale or retail dealer in beer on 
account of the sale at his principal business office as designated in 
writing to the regional director (compliance), or at his brewery, of 
beer which, at the time of sale, is stored at his brewery, or had been 
removed from such brewery to a taxpaid storeroom the operations of which 
are integrated with the operations of such brewery and which is 
contiguous or adjacent to, or in the immediate vicinity of, such 
brewery. However, no such proprietor shall have more than one place of 
sale, as to each brewery, that shall be exempt from special tax under 
this section.
    (b) Place of exemption. Unless the exemption is claimed elsewhere, 
it will be presumed that the exemption is claimed at the brewery where 
the beer is stored. If the proprietor wishes to be exempt from special 
tax with respect to sales at his principal office rather than for sales 
at his brewery, he shall notify the regional director (compliance) of 
the region in which the brewery is located of his intention. Such notice 
shall be in writing, on letter size paper and shall be submitted in 
triplicate. On approval, two copies will be returned to the proprietor, 
one to be filed at the principal office, and the original will be 
retained by the regional director (compliance). Where the exemption is 
claimed for a place other than the brewery, special tax shall be paid at 
the brewery if sales are made thereat.
    (c) Exception. Where the proprietor of a brewery consummates sales 
of beer to dealers at the purchasers' places of business (through 
delivery route salesmen or otherwise), such proprietor is required to 
pay special tax as a wholesale dealer in beer at each place from which 
he conducts such selling operations.

(72 Stat. 1340; 26 U.S.C. 5113)



Sec. 194.185  Wholesale dealers in liquors consummating sales of wines or beer at premises of other dealers.

    (a) Sales of wines. Any wholesale dealer in liquors (including the 
proprietor of a bonded wine cellar) who has paid special tax as a 
wholesale dealer in liquors for the place from which he conducts his 
selling operations may consummate sales of wines to other wholesale or 
retail dealers in liquors, or to limited retail dealers, at the 
purchasers' places of business without being required to pay additional 
special tax on account of such sales.
    (b) Sales of beer. Any wholesale dealer in liquors who has paid the 
tax as provided in paragraph (a) of this section may also consummate 
sales of beer to wholesale or retail dealers in beer, to wholesale or 
retail dealers in liquors, or to limited retail dealers, at the 
purchasers' place of business without being required to pay additional 
special tax on account of such sales.

(72 Stat. 1340; 26 U.S.C. 5113)



Sec. 194.186  Wholesale dealers in beer consummating sales at premises of other dealers.

    Any dealer (including the proprietor of a brewery) who has paid 
special tax as a wholesale dealer in beer for the place from which he 
conducts his selling operations may consummate sales of beer (but not 
wines or distilled spirits) to other dealers at the purchasers' places 
of business without being required to pay additional special tax on 
account of such sales.

(72 Stat. 1340; 26 U.S.C. 5113)

[[Page 1251]]



Sec. 194.187  Hospitals.

    Hospitals and similar institutions furnishing liquors to patients 
are not required to pay special tax, provided no specific or additional 
charge is made for the liquors so furnished.



Sec. 194.187a  Limited retail dealers.

    Limited retail dealers, as specified in Sec. 194.27, are not 
required to pay special tax.

[T.D. ATF-271, 53 FR 17553, May 17, 1988]



Sec. 194.187b  Coordination of taxes under 26 U.S.C. 5111 and 5121.

    Effective January 1, 1988, special tax is not imposed concurrently 
under both 26 U.S.C. 5111(a) (relating to wholesale liquor sales) and 26 
U.S.C. 5111(b) (relating to wholesale beer sales), nor under both 26 
U.S.C. 5121(a) (relating to retail liquor sales) and 26 U.S.C. 5121(b) 
(relating to retail beer sales), with respect to a taxpayer's activities 
at a single place during a single tax year. (See Sec. 194.72.)

(26 U.S.C. 5113(g), 5123(c))

[T.D. ATF-285, 54 FR 12611, Mar. 28, 1989]

             Persons Who Are Not Dealers in Liquors or Beer



Sec. 194.188  Persons making casual sales.

    Certain persons making casual sales of liquors are not liquor or 
beer dealers within the meaning of the statute; they are as follows:
    (a) Administrators, executors, receivers, and other fiduciaries who 
receive distilled spirits, wines, or beer in their fiduciary capacities 
and sell such liquors in one parcel, or at public auction in parcels of 
not less than 20 wine gallons (75.7 liters);
    (b) Creditors who receive distilled spirits, wines, or beer as 
security for, or in payment of, debts and sell such liquors in one 
parcel, or at a public auction in parcels of not less than 20 wine 
gallons (75.7 liters);
    (c) Public officers or court officials who levy on distilled 
spirits, wines, or beer under order or process of any court or 
magistrate and sell such liquors in one parcel, or at public auction in 
parcels of not less than 20 wine gallons (75.7 liters); or,
    (d) A retiring partner, or representative of a deceased partner, who 
sells distilled spirits, wines, or beer to the incoming or remaining 
partner, or partners, of a partnership.

Persons making such sales are not required to pay special tax, or keep 
the records or reports required of dealers in subpart O of this part.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1340 (26 U.S.C. 5113))

[25 FR 6270, July 2, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-34, 41 FR 46860, Oct. 26, 1976]



Sec. 194.189  Agents, auctioneers, brokers, etc., acting on behalf of others.

    Certain persons may sell liquors as agents or employees of others, 
or receive and transmit orders therefor to a dealer, without being 
considered liquor or beer dealers on account of such activities; they 
are as follows:
    (a) Auctioneers who merely sell liquors at auction on behalf of 
others,
    (b) Agents or brokers who merely solicit orders for liquors in the 
name of a principal, but neither stock nor deliver the liquors for which 
orders are taken,
    (c) Employees who merely sell liquors on behalf of their employers, 
and
    (d) Retail dealers in liquors or retail dealers in beer who merely 
receive and transmit to a wholesale dealer orders for liquors or beer to 
be billed, charged, and shipped to customers by such wholesale dealers.

Such persons, who have no property rights in the liquors or beer sold, 
may make collections for their principals and receive commissions for 
their services, or guarantee the payment of accounts, without being 
required to pay special tax. In all such cases, however, the principal 
is required to pay special tax at each place where sales are 
consummated, unless he is exempt therefrom under the provisions of this 
subpart.



Sec. 194.190  Apothecaries or druggists selling medicines and tinctures.

    Apothecaries and druggists who use wines or spirituous liquors for 
compounding medicines and in making tinctures which are unfit for use 
for beverage purposes are not required to pay special tax as dealers in 
liquors by

[[Page 1252]]

reason of the sale of such compounds or tinctures for nonbeverage 
purposes.

(72 Stat. 1328; 26 U.S.C. 5025)



Sec. 194.191  Persons selling products unfit for beverage use.

    (a) Vendors not deemed dealers in liquors or beer. No person selling 
or offering for sale for nonbeverage purposes products classed as unfit 
for beverage use under the provisions of Sec. 19.58 of this chapter 
shall be deemed, solely by reason of such sales, to be a dealer in 
liquors.
    (b) Restrictions. Any person who sells or offers for sale any 
nonbeverage products for use, or for sale for use, for beverage 
purposes, or who sells any of such products under circumstances from 
which it might reasonably appear that it is the intention of the 
purchaser to procure the same for sale or use for beverage purposes, 
shall pay special tax as a wholesale or retail dealer in liquors or as a 
wholesale or retail dealer in beer, as the case may be.

[25 FR 6270, July 2, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
as amended by T.D. ATF-379, 61 FR 31426, June 20, 1996]



Sec. 194.192  Retail dealer selling in liquidation his entire stock.

    No retail dealer in liquors or retail dealer in beer, selling in 
liquidation his entire stock of liquors in one parcel, or in parcels 
embracing not less than his entire stock of distilled spirits, of wines, 
or of beer, which parcels may contain a combination of any or all such 
liquors, to any other dealer shall be deemed to be a wholesale dealer in 
liquors or a wholesale dealer in beer, as the case may be, by reason of 
such sale or sales. A retail dealer making such sale or sales is not 
required to keep records or submit reports thereof.

(72 Stat. 1340; 26 U.S.C. 5113)



Sec. 194.193  Persons returning liquors for credit, refund, or exchange.

    No retail dealer in liquors or beer, or other person, shall be 
deemed to be a wholesale dealer in liquors or a wholesale dealer in 
beer, as defined in this part, by reason of his bona fide return of 
distilled spirits, wines, or beer, as the case may be, to the dealer 
from whom purchased (or to the successor of such vendor's business or 
line of merchandise) for credit, refund, or exchange, and the giving of 
such credit, refund or exchange shall not be deemed to be a purchase 
within the meaning of 26 U.S.C. 5117 of Sec. 194.211 of this part. 
Except in the case of wholesale dealers in liquors required to keep 
records of their transactions under Secs. 194.225 and 194.226, or retail 
dealers required to keep records under Sec. 194.234, persons returning 
liquors as provided herein are not required to keep records or submit 
reports of such transactions.

(72 Stat. 1340, 1343; 26 U.S.C. 5113, 5117)

[25 FR 6270, July 2, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-48, 44 FR 55844, Sept. 28, 1979; T.D. ATF-116. 
47 FR 51571, Nov. 16, 1982]



                   Subpart M--Refund of Special Taxes



Sec. 194.201  Claims.

    Claims for abatement of assessment of special tax (including 
penalties and interest), or for refund of an overpayment of special tax 
(including interest and penalties), shall be filed on Form 2635 
(5620.8). Claims shall be filed with the regional director (compliance) 
serving the region in which the special tax was paid or assessed. Each 
claim shall set forth in detail each ground on which it is made and 
shall contain facts sufficient to apprise the Bureau of Alcohol, Tobacco 
and Firearms of the exact basis thereof. If the claim is for refund of 
special tax for which a stamp was issued, such stamp shall be attached 
to and made a part of the claim, or the claimant shall include in the 
claim evidence satisfactory to the Bureau of Alcohol, Tobacco and 
Firearms that the stamp cannot be submitted.

[T.D. ATF-251, 52 FR 19336, May 22, 1987]



Sec. 194.202  Time limit on filing of claim.

    No claim for the refund of a special tax or penalty shall be allowed 
unless presented within 3 years next after the payment of such tax or 
penalty.

(68A Stat. 808; 26 U.S.C. 6511)

[[Page 1253]]



Sec. 194.203  Discontinuance of business.

    A dealer who for any reason discontinues business is not entitled to 
refund for the unexpired portion of the fiscal year for which the 
special tax stamp was issued.

(72 Stat. 1346; 26 U.S.C. 5142)



   Subpart N--Restrictions Relating to Purchases of Distilled Spirits



Sec. 194.211  Unlawful purchases of distilled spirits.

    (a) General. It is unlawful for any dealer to purchase distilled 
spirits for resale from any person other than:
    (1) A dealer who has paid special tax as a wholesale dealer in 
liquors at the place where the distilled spirits are purchased;
    (2) A wholesale dealer whose place of business comes within the 
exemptions provided by Sec. 194.151 for changes in location and 
Sec. 194.169 for changes in control;
    (3) The proprietor of a distilled spirits plant who is exempt from 
special tax as a dealer at the place where the distilled spirits are 
purchased;
    (4) A retail liquor store operated by a State, a political 
subdivision thereof, or the District of Columbia, which is not required 
to pay special tax as a wholesale dealer in liquors as provided in 
Sec. 194.31;
    (5) A person not required to pay special tax as a wholesale liquor 
dealer, as provided in Secs. 194.188 through 194.190 and 194.192 through 
194.193.
    (b) Special provisions for limited retail dealers. A limited retail 
dealer may purchase distilled spirits for resale from a retail dealer in 
liquors.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1343; sec. 1905, Pub. L. 94-455, 90 
Stat. 1819 (26 U.S.C. 5117))

[T.D. ATF-42, 42 FR 8370, Feb. 10, 1977]



     Subpart O--Prescribed Records and Reports, and Posting of Signs

                 Wholesale Dealers' Records and Reports



Sec. 194.221  General requirements as to distilled spirits.

    Except as provided in Secs. 194.223 and 194.224, every wholesale 
dealer in liquors shall keep daily records of the physical receipt and 
disposition of distilled spirits, as prescribed in Secs. 194.225 and 
194.226. When required in writing by the regional director (compliance), 
dealers shall also prepare and file a monthly summary report totaling 
the daily receipts and disposition of distilled spirits as prescribed in 
Sec. 194.230.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1342, as amended, 1395, as amended 
(26 U.S.C. 5114, 5555))

[T.D. ATF-116, 47 FR 51571, Nov. 16, 1982]



Sec. 194.222  Requirements as to wines and beer.

    Each wholesale dealer in liquors who receives wines, or wines and 
beer, and each wholesale dealer in beer shall keep at his place of 
business a complete record of all wines and beer received, showing (a) 
the quantities thereof, (b) from whom received, and (c) the receiving 
dates. This record, which must be kept for a period of not less than 
three years as prescribed in Sec. 194.237, shall consist of all purchase 
invoices or bills covering wines and beer received or, at the option of 
the dealer, a book record containing all of the required information. 
Wholesale dealers are not required to prepare or submit reports to 
regional director (compliance) of transactions relating to wines and 
beer.

(Approved by the Office of Management and Budget under control number 
1512-0353)

(68A Stat. 731 (26 U.S.C. 6001); sec. 201, Pub. L. 85-859, 72 Stat. 
1342, 1345, 1348, 1395 (26 U.S.C. 5114, 5124, 5146, 5555))

[T.D. ATF-50, 43 FR 20494, May 12, 1978, as amended by T.D. ATF-116, 47 
FR 51571, Nov. 16, 1982; T.D. ATF-172, 49 FR 14942, Apr. 16, 1984]

[[Page 1254]]



Sec. 194.223  Records to be kept by States, political subdivisions thereof, or the District of Columbia.

    The provisions of this subpart relative to the maintenance of 
records and the submission of reports shall not apply to States, 
political subdivisions thereof, or the District of Columbia, or any 
liquor stores operated by such entities that maintain and make available 
for inspection by ATF officers records which will enable such officers 
to verify receipts of wines and beer and trace readily all distilled 
spirits received and disposed of by them: Provided, That such States, 
political subdivisions thereof, or the District of Columbia, and liquor 
stores operated by them, shall, on request of the regional director 
(compliance), furnish such transcripts, summaries, and copies of their 
records as he shall require.

(72 Stat. 1342, 1348, 1395; 26 U.S.C. 5114, 5146, 5555)



Sec. 194.224  Records to be kept by proprietors of distilled spirits plants.

    Wholesale liquor dealer operations conducted by proprietors of 
distilled spirits plants shall be recorded and reported in accordance 
with the applicable provisions of Part 19 of this chapter.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1342, as amended (26 U.S.C. 5114); 
sec. 807, Pub. L. 96-39, 93 Stat. 284 (26 U.S.C. 5207))

[T.D. ATF-62, 44 FR 71693, Dec. 11, 1979]



Sec. 194.225  Records of receipt.

    (a) Information required. Every wholesale dealer in liquors shall 
maintain a daily record of the physical receipt of each individual lot 
or shipment of distilled spirits, which record shall show (1) name and 
address of consignor, (2) date of receipt (to include date of inventory 
for recorded gains), (3) brand name, (4) name of producer or bottler, 
except that this may be omitted if the dealer keeps available for 
inspection a separate list or record identifying the producer or bottler 
with the brand name, (5) kind of spirits, except that this may be 
omitted if the dealer keeps available for inspection a separate list or 
record identifying ``kind'' with the brand name, (6) quantity actually 
received (showing number of packages, if any, and number of cases by 
size of bottle, and explaining any difference from the quantity shown on 
the commercial papers covering the shipment), and (7) package 
identification numbers of containers of alcohol received for repackaging 
for industrial use pursuant to subpart R of this part. Additional 
information may also be shown.
    (b) Form of record. The record prescribed by paragraph (a) of this 
section will be a part of the accounting system and shall consist of 
consignors' invoices (or, where such invoices are not available on the 
day the shipment is received, memorandum receiving records prepared on 
the day of receipt of distilled spirits, to include records of inventory 
for recorded gains), and credit memorandums covering distilled spirits 
returned to the dealer, which contain all required information.

(Approved by the Office of Management and Budget under control number 
1512-0353)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1342, as amended, 1395, as amended 
(26 U.S.C. 5114, 5555))

[T.D. ATF-46, 42 FR 44758, Sept. 6, 1977, as amended by T.D. ATF-116, 47 
FR 51571, Nov. 16, 1982; T.D. ATF-172, 49 FR 14942, Apr. 16, 1984]



Sec. 194.226  Records of disposition.

    (a) Information required. Every wholesale dealer in liquors shall 
prepare a daily record of the physical disposition of each individual 
lot of distilled spirits, which record shall show (1) name and address 
of consignee, (2) date of disposition (to include date of discovery in 
the case of casualty, theft or recorded inventory losses), (3) brand 
name, (4) kind of spirits, except that this may be omitted if the dealer 
keeps available for inspection a separate list or record identifying 
``kind'' with the brand name, (5) number of packages, if any, and number 
of cases by size of bottle, and (6) package identification numbers of 
containers of alcohol repackaged for industrial use pursuant to subpart 
R of this part. Additional information may also be shown.
    (b) Form of record. The record prescribed by paragraph (a) of this 
section will be part of the accounting system and shall consist of 
wholesale dealer's invoices (or, where such invoices are not available 
at the time the spirits

[[Page 1255]]

are removed, memorandum shipping records prepared at the time of removal 
of the distilled spirits, to include date of discovery in the case of 
casualty, theft or recorded inventory losses) which contain all required 
information.

(Approved by the Office of Management and Budget under control number 
1512-0353)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1342, as amended, 1395, as amended 
(26 U.S.C. 5114, 5555))

[T.D. ATF-46, 42 FR 44759, Sept. 6, 1977, as amended by T.D. ATF-116, 47 
FR 51571, Nov. 16, 1982; T.D. ATF-172, 49 FR 14942, Apr. 16, 1984]



Sec. 194.227  Canceled or corrected records.

    Entries on the records of receipt and disposition prescribed by 
Secs. 194.225 and 194.226 shall not be erased or obliterated. Correction 
or deletion of any entry shall be accomplished by drawing a line through 
such entry, and making appropriate correction or explanation. If a 
wholesale dealer in liquors voids an invoice for any reason, the file 
copy prescribed in Sec. 194.235 will be marked ``Cancelled'' and be 
filed as provided in that section; any remaining copy of the voided 
invoice will be destroyed or similarly cancelled and filed. If a new 
invoice is prepared, its serial number will be cross referenced on any 
retained copies of the cancelled invoice.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1342, as amended (26 U.S.C. 5114))

[T.D. 7014, 34 FR 8912, June 4, 1969. Redesignated at 40 FR 16835, Apr. 
15, 1975, as amended by T.D. ATF-116, 47 FR 51572, Nov. 16, 1982]



Sec. 194.228  Previously prescribed or approved records of receipt and disposition.

    A wholesale dealer in liquors may continue to use records of receipt 
and disposition in a format previously prescribed, or approved for him, 
provided he gives written notice of such intent to the regional director 
(compliance). Such records shall show the information required by 
paragraph (a) of Sec. 194.225 or paragraph (a) of Sec. 194.226, as 
applicable. Such records shall be preprinted with the name and address 
of the wholesale dealer. Each sheet or page shall bear a preprinted 
serial number, or page serial numbers may be affixed in unbroken 
sequence during the preparation or processing of the records. A serial 
number shall not be duplicated within a period of 6 months.

(72 Stat. 1342; 26 U.S.C. 5114)

[T.D. 7014, 34 FR 8912, June 4, 1969. Redesignated at 40 FR 16835, Apr. 
15, 1975]



Sec. 194.229  Variations in format, or preparation, of records.

    (a) Authorization. The Director may approve variations in the type 
and format of records of receipt and disposition, or in the methods of 
preparing such records, where it is shown that variations from the 
requirements are necessary in order to use data processing equipment, 
other business machines, or existing accounting systems, and will not 
(1) unduly hinder the effective administration of this part, (2) 
jeopardize the revenue, or (3) be contrary to any provision of law. A 
dealer who proposes to employ such a variation shall submit written 
application so to do, in triplicate, to the regional director 
(compliance). Such application shall describe the proposed variations 
and set forth the need therefor. The regional director (compliance) will 
determine the need for the variations, and whether approval thereof 
would unduly hinder the effective administration of this part or result 
in jeopardy to the revenue. The regional director (compliance) will 
forward two copies of the application to the Director together with a 
report of his findings and his recommendation. Variations in type and 
format of records or methods of preparation shall not be employed until 
approval is received from the Director.
    (b) Requirements. Any information required by this part to be kept 
or filed is subject to the provisions of law and this part relating to 
required records and reports, regardless of the form or manner in which 
kept or filed.

(Approved by the Office of Management and Budget under control number 
1512-0357)

[T.D. 7014, 34 FR 8912, June 4, 1969. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-172, 49 FR 14942, Apr. 16, 1984]

[[Page 1256]]



Sec. 194.230  Monthly summary report.

    (a) Requirement. Every wholesale dealer in liquors shall, when 
required, submit to the regional director (compliance), a monthly 
summary report of the total quantities of all distilled spirits received 
and disposed of daily during the month (including the date of discovery 
for theft, casualty and inventory losses and inventory gains). This 
report will be posted by the wholesaler on a daily basis. If there were 
no receipts or disposals of distilled spirits during the month, the 
report will be marked ``No Transactions During Month.'' This report will 
be filed not later than the 15th day of the month following the report 
period, and a copy retained by the dealer. Upon receipt of an 
application the regional director (compliance) may authorize a dealer to 
post the report less frequently until otherwise notified. The regional 
director's (compliance) authorization will specify the intervals at 
which the posting will be accomplished, but not less frequently than 
monthly.
    (b) Form of report. When required, the monthly summary report may be 
prepared in a format which most conveniently adapts itself to the 
dealer's accounting and recordkeeping systems. In addition to any other 
information shown therein, the report will include the daily totals of 
all distilled spirits received and disposed of, including dispositions 
caused by inventory, casualty or theft losses and receipts caused by 
recorded gains in inventory; and
    (1) Daily totals of all bottled spirits received and disposed of, 
recorded separately by wine gallons, or liters,
    (2) Daily totals of all bulk spirits in packages received and 
disposed of, recorded separately by proof gallons.
    (c) Declaration. When required to be filed, the monthly summary 
report will bear the following declaration signed by the dealer or an 
authorized agent:

    I declare under the penalties of perjury that I have examined this 
report and to the best of my knowledge and belief, it is true, correct, 
and complete, and is supported by true, correct, and complete records 
which are available for inspection.

    (d) When the monthly summary report is not required by the regional 
director (compliance) to be filed, every wholesale dealer in distilled 
spirits is still required to maintain and make available for review by 
ATF officers:
    (1) Records of receipt, required by Sec. 194.225;
    (2) Records of disposition, required by Sec. 194.226; and
    (3) Any other supporting information or documents regarding the 
receipt and disposition of distilled spirits which have a direct bearing 
in determining the completeness and accuracy of the accounting and 
recordkeeping systems.

(Approved by the Office of Management and Budget under control number 
1512-0353)

(Act of August 16, 1954, 68A Stat. 749 (26 U.S.C. 6065); sec. 201, Pub. 
L. 85-859, 72 Stat. 1342, as amended, 1348, as amended, 1395, as amended 
(26 U.S.C. 5114, 5146, 5555))

[T.D. ATF-116, 47 FR 51572, Nov. 16, 1982, and amended by T.D. ATF-172, 
49 FR 14942, Apr. 16, 1984]



Sec. 194.231  Conversion between metric and U.S. units.

    When liters are converted to wine gallons, the quantity in liters 
shall be multiplied by 0.264172 to determine the equivalent quantity in 
wine gallons. Cases containing the same quantity of spirits of the same 
proof in metric bottles may be converted to U.S. units by multiplying 
the liters in one case by the number of cases to be converted, as 
follows:
    (a) If the conversion from liters to U.S. units is made before 
multiplying by the number of cases, the quantity in U.S. units shall be 
rounded to the sixth decimal.
    (b) If the conversion is made after multiplying by the number of 
cases, the quantity in U.S. units shall be rounded to the nearest 
hundredth.

Once converted to wine gallons, the proof gallons of spirits in cases 
shall be determined as provided in 27 CFR 30.52.

(26 U.S.C. 7805 (68A Stat. 917, as amended); 27 U.S.C. 205 (49 Stat. 
981, as amended))

[T.D. ATF-198, 50 FR 8542, Mar. 1, 1985]



Sec. 194.232  Discontinuance of business.

    When a wholesale dealer in liquors, who is required under 
Sec. 194.230 to file a monthly summary report, discontinues business, a 
monthly summary report marked ``Final'' shall be filed covering

[[Page 1257]]

transactions through the date of discontinuance.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1342, as amended, 1395, as amended 
(26 U.S.C. 5114, 5555))

[T.D. ATF-115, 47 FR 51572, Nov. 16, 1982]



Sec. 194.233  Requirements when a wholesale dealer in liquors maintains a retail department.

    (a) When a wholesale dealer in liquors maintains a separate 
department on the premises for the retailing of distilled spirits, and 
the retail sales of distilled spirits normally represent 90 percent or 
more of the volume of distilled spirits sold, the dealer may 
``constructively'' receive all distilled spirits in the retail 
department. Sales involving a wholesale transaction may be 
``constructively'' sold through the wholesale department.
    (1) Receipts. In lieu of maintaining and preparing the records 
required by Secs. 194.225 and 194.226, a wholesale dealer may 
constructively receive all distilled spirits in its retail department. 
In this case, the receiving document will serve as a receipt for 
(through) the wholesale department and a disposition (transfer) to the 
retail department. The receiving document will be maintained by the 
retail department, as required by Sec. 194.234.
    (2) Dispositions. In lieu of the records required by Sec. 194.226, a 
wholesale dealer may constructively sell distilled spirits from its 
retail department to other dealers. The sales invoice or bill will be 
filed in the wholesaler's disposition records and will serve as a record 
of receipt from the retail department and a record of disposition to 
another dealer.
    (b) Except as provided in paragraph (a) of this section, a wholesale 
dealer shall prepare and maintain the required records of receipt and 
disposition as prescribed in Secs. 194.225 and 194.226. Transfers 
between the wholesale and retail departments will be treated in the same 
manner as any other transaction involving the wholesale department.
    (c) When required by Sec. 194.230, a wholesale dealer shall prepare 
and file the monthly summary report of actual or constructive receipts 
and dispositions of all distilled spirits.
    (d) Wholesale and retail departments need not be physically 
separated.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1342, as amended, 1345, as amended, 
1395, as amended (26 U.S.C. 5114, 5124, 5555))

[T.D. ATF-116, 47 FR 51572, Nov. 16, 1982]

                         Retail Dealer's Records



Sec. 194.234  Requirements for retail dealers.

    (a) Records of receipt. All retail dealers shall keep at their place 
of business complete records of all distilled spirits, wines, or beer 
received showing (1) the quantities thereof, (2) from whom received, and 
(3) the receiving dates. The regional director (compliance) may, 
pursuant to an application authorize the records to be maintained at 
another business premises under the control of the same dealer when it 
is determined that such maintenance will not cause undue inconvenience 
to ATF officers desiring to examine such records. Records of receipts 
shall consist of all purchase invoices or bills covering distilled 
spirits, wines, and beer received, or, at the option of the dealer, a 
book record containing all of the required information.
    (b) Records of sales of 20 wine gallons (75.7 liters) or more. Every 
retail dealer who makes sales of distilled spirits, of wines, or of beer 
in quantities of 20 wine gallons (75.7 liters) or more to the same 
person at the same time shall prepare and keep a record of each such 
sale, which shall show (1) the date of sale, (2) the name and address of 
the purchaser, (3) the kind and quantity of each kind of liquors sold, 
and (4) the serial numbers of all full cases of distilled spirits 
included in the sale. Each entry on such record shall be supported by a 
corresponding delivery receipt (which may be executed on a copy of the 
sales slip) signed by the purchaser or his agent.

(Approved by the Office of Management and Budget under control number 
1512-0354)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1345, 1348, 1395, 1413 (26 U.S.C. 
5124, 5146, 5555, 5691))

[T.D. 7130, 36 FR 12853, July 8, 1971. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-34, 41 FR 46861, Oct. 26, 1976. 
Redesignated and amended by T.D. ATF-116, 47 FR 51572, Nov. 16, 1982; 
T.D. ATF-172, 49 FR 14942, Apr. 16, 1984]

[[Page 1258]]

                      Files of Records and Reports



Sec. 194.235  Filing.

    The required records of receipt and disposition of all distilled 
spirits, as prescribed in Secs. 194.225 and 194.226, may be filed in 
accordance with the wholesaler's regular accounting and recordkeeping 
systems. The required records shall consist of the dealer's own file 
copies of the receiving or shipping invoices.
    (a) Dealers may file records of receipt and disposition in 
accordance with their own filing system as long as the filing system 
systematically and accurately accounts for all receipts and dispositions 
of distilled spirits.
    (b) The required records of receipt and disposition will be filed 
not later than one business day following the date the transaction 
occurred.
    (c) Supporting documents for receipts and dispositions, such as 
delivery receipts and bills of lading, may be filed in accordance with 
the wholesaler's regular accounting and recordkeeping practices.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1342, as amended, 1395, as amended 
(26 U.S.C. 5114, 5555))

[T.D. ATF-116, 47 FR 51573, Nov. 16, 1982]



Sec. 194.236  Place of filing.

    Prescribed records of receipt and disposition and monthly summary 
reports required by Sec. 194.230 will be maintained by transaction or 
reporting date, at the dealer's place of business. The regional director 
(compliance) may, pursuant to an application, authorize files, or an 
individual file, to be maintained at another business location under the 
control of the dealer, if the alternative location does not cause undue 
inconvenience to ATF officers desiring to examine the files.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1342, as amended (26 U.S.C. 5114))

[T.D. ATF-116, 47 FR 51573, Nov. 16, 1982]

                           Period of Retention



Sec. 194.237  Retention of records and files.

    All records prescribed by this part, documents or copies of 
documents supporting these records, and file copies of reports 
submitted, shall be retained by the person required to keep the 
documents for a period of not less than three years, and during this 
period shall be available, during business hours, for inspection and 
copying by ATF officers. Furthermore, the regional director (compliance) 
may require these records to be kept for an additional period of not 
more than three years in any case where he determines retention 
necessary or advisable. Any records, or copies thereof, containing any 
of the information required by this part to be prepared, wherever kept, 
shall also be made available for inspection and copying.

(68A Stat. 731 (26 U.S.C. 6001); sec. 201, Pub. L. 85-859, 72 Stat. 
1342, 1345, 1348, 1395 (26 U.S.C. 5114, 5124, 5146, 5555))

[T.D. ATF-50, 43 FR 20494, May 12, 1978. Redesignated by T.D. ATF-116, 
47 FR 51573, Nov. 16, 1982]



Sec. 194.238  Photographic copies of records.

    (a) General. Dealers may record, copy, or reproduce records required 
by this part. Dealers may use any process which accurately reproduces 
the original record, and which forms a durable medium for reproducing 
and preserving the origninal record.
    (b) Copies of records treated as original records. Whenever records 
are reproduced under this section, the produced records will be 
preserved in conveniently accessible files, and provisions will be made 
for examining, viewing, and using the reproduced record the same as if 
it were the original record, and it will be treated and considered for 
all purposes as though it were the original record. All provisions of 
law and regulations applicable to the original record are applicable to 
the reproduced record. As used in this section, ``original record'' 
means the record required by this part to be maintained or preserved by 
the dealer, even though it may be an executed duplicate or other copy of 
the document.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended (26 U.S.C. 5555))

[T.D. ATF-116, 47 FR 51573, Nov. 16, 1982]

[[Page 1259]]



Secs. 194.239-194.241  [Reserved]

Subpart P [Reserved]



         Subpart Q--Reuse and Possession of Used Liquor Bottles



Sec. 194.261  Refilling of liquor bottles.

    No person who sells, or offers for sale, distilled spirits, or agent 
or employee of such person, shall (a) place in any liquor bottle any 
distilled spirits whatsoever other than those contained in such bottle 
at the time of closing under the provisions of 26 U.S.C. Chapter 51, or 
(b) by the addition of any substance whatsoever to any liquor bottle, in 
any manner alter or increase any portion of the original contents 
contained in such bottle at the time of closing under the provisions of 
26 U.S.C. Chapter 51.

(72 Stat. 1374; 26 U.S.C. 5301)

[T.D. 6954, 33 FR 6814, May 4, 1968. Redesignated at 40 FR 16835, Apr. 
15, 1975, and amended by T.D. ATF-48, 44 FR 55844, Sept. 28, 1979; T.D. 
ATF-206, 50 FR 23953, June 7, 1985]



Sec. 194.262  Possession of refilled liquor bottles.

    No person who sells, or offers for sale, distilled spirits, or agent 
or employee of such person, shall:
    (a) Possess any liquor bottle in which any distilled spirits have 
been placed in violation of the provisions of Sec. 194.261, or
    (b) Possess any liquor bottle, any portion of the contents of which 
has been altered or increased in violation of the provisions of 
Sec. 194.261.

(72 Stat. 1374; 26 U.S.C. 5301)



Sec. 194.263  Possession of used liquor bottles.

    The possession of used liquor bottles by any person other than the 
person who empties the contents thereof is prohibited except for the 
following:
    (a) The owner or occupant of any premises on which such bottles have 
been lawfully emptied may assemble the same on such premises--
    (1) For delivery to a bottler or importer on specific request of 
such bottler or importer;
    (2) For destruction, either on the premises on which the bottles are 
emptied or elsewhere, including disposition for purposes which will 
result in the bottles being rendered unusable as bottles; or
    (3) In the case of unusual or distinctive bottles, for disposition 
or sale as collectors' items or for other purposes not involving the 
packaging of any product for sale.
    (b) Any person may possess, offer for sale, or sell unusual or 
distinctive bottles for purposes not involving the packaging of any 
product for sale.
    (c) Any person may assemble used liquor bottles for the purpose of 
recycling or reclaiming the glass or other approved liquor bottle 
material.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))

[T.D. ATF-114, 47 FR 43950, Oct. 5, 1982]



Sec. 194.264  Mixed cocktails.

    A retail liquor dealer who mixes cocktails or compounds any 
alcoholic liquors in advance of sale, as provided in Sec. 194.293, may 
not use liquor bottles in which distilled spirits have been previously 
packaged for the storage of the mixture pending sale.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended (26 U.S.C. 5301))

[T.D. ATF-62, 44 FR 71694, Dec. 11, 1979]



           Subpart R--Packaging of Alcohol for Industrial Uses



Sec. 194.271  Requirements and procedure.

    On compliance with the provisions of Part 19 of this chapter 
applicable to persons repackaging distilled spirits, a dealer in liquor 
engaged in the business of supplying alcohol for industrial use may 
obtain bulk alcohol on which the tax has been paid or determined and 
repackage the alcohol for sale for industrial use in containers of a 
capacity in excess of 1 wine gallon and not more than 5 wine gallons.
    (a) Qualification procedure. Application for registration, Form 
5110.41, and application for an operating permit, Form 5110.25, modified 
in accordance with instructions of the regional director (compliance), 
shall be executed and

[[Page 1260]]

filed with the regional director (compliance). No alcohol shall be 
repackaged until the approved application for registration and the 
operating permit are received.
    (b) Operations. Repackaging operations shall be conducted in 
accordance with the bottling and packaging requirements of Part 19 of 
this chapter. Packaging and labeling operations may be carried on 
without supervision of an ATF officer unless the regional director 
(compliance) requires supervision.
    (c) Records. The dealer shall keep records, daily, showing the bulk 
alcohol received, dumped for packaging, packaged, and disposed of, 
including the name and address of each consignor and consignee. The 
dealer shall prepare a monthly report on Form 5110.28 of bulk alcohol 
received, packaged, and disposed of. Reports on Form 5110.28 shall be 
submitted to the regional director (compliance) not later than the 15th 
day of the month succeeding the period for which rendered. Records, 
documents, or copies of documents supporting the records, and copies of 
reports submitted to the regional director (compliance) shall be filed 
and retained as prescribed in Secs. 194.236 and 194.237.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1343, as amended, 1358, as amended, 
1360, as amended (26 U.S.C. 5116, 5205, 5206))

[T.D. ATF-62, 44 FR 71694, Dec. 11, 1979, as amended by T.D. ATF-206, 50 
FR 23953, June 7, 1985]



Sec. 194.272  Labeling.

    Every dealer packaging alcohol for industrial use shall affix to 
each package filled a label bearing in conspicuous print the words 
``Alcohol'' and ``For Industrial Use,'' the proof of the alcohol, the 
capacity of the container, and the packaging dealer's name and address. 
The dealer may incorporate in the label other appropriate statements; 
however, such statements shall not obscure or contradict the data 
required hereby to be shown on such labels.

(72 Stat. 1343, 1360; 26 U.S.C. 5116, 5206)



    Subpart S--Distilled Spirits for Export With Benefit of Drawback



Sec. 194.281  General.

    A state, or political subdivision thereof, or a person holding a 
wholesale liquor dealer's basic permit issued under Part 1 of this 
chapter, may export bottled taxpaid distilled spirits with benefit of 
drawback to the extent provided in Sec. 252.171 of this chapter. The 
marking of cases, preparation of notice of shipment on Form 5110.30, the 
removal and exportation of the distilled spirits, and the filing of 
claims by the processor of the spirits shall be in accordance with the 
applicable provisions of Parts 19 and 252 of this chapter.

[T.D. ATF-206, 50 FR 23953, June 7, 1985]



Sec. 194.283  Records.

    The provisions of subpart O of this part regarding records and 
reports relating to liquors for domestic use are hereby extended to 
export transactions permitted under the provisions of this subpart.

[T.D. 7002, 34 FR 1592, Feb. 1, 1969. Redesignated at 40 FR 16835, Apr. 
15, 1975]



                        Subpart T--Miscellaneous



Sec. 194.291  Destruction of marks and brands on wine containers.

    The dealer who empties any cask, barrel, keg, or other bulk 
container of wine shall scrape or obliterate from the empty container 
all marks, brands, tags, or labels placed thereon under the provisions 
of part 24 of this chapter as evidence of the payment or determination 
of the tax on the wine removed therein from the bonded wine cellar.

[25 FR 6270, July 2, 1960. Redesignated at 40 FR 16835, Apr. 15, 1975, 
and amended by T.D. ATF-344, 58 FR 40355, July 28, 1993]



Sec. 194.292  Wine bottling.

    Each person desiring to bottle, package, or repackage taxpaid wines 
shall, before carrying on such operations, apply and receive permission 
from the regional director (compliance), as required under part 24 of 
this chapter. The decanting of wine by caterers or

[[Page 1261]]

other retail dealers for table or room service, banquets, and similar 
purposes shall not be considered as ``bottling,'' if the decanters are 
not furnished for the purpose of carrying wine away from the area where 
served.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1378, as amended (26 U.S.C. 5352))

[T.D. ATF-62, 44 FR 71694, Dec. 11, 1979, as amended by T.D. ATF-344, 58 
FR 40355, July 28, 1993]



Sec. 194.293  Mixing cocktails in advance of sale.

    A retail liquor dealer shall not mix cocktails, or compound any 
alcoholic liquors in advance of sale, except for the purpose of filling, 
for immediate consumption on the premises, orders received at the bar or 
in the expectation of the immediate receipt of orders. (For further 
provisions, see Sec. 194.264.)

(Sec. 805, Pub. L. 96-39, 93 Stat. 277 (26 U.S.C. 5002))

[T.D. ATF-62, 44 FR 71694, Dec. 11, 1979]



PARTS 198-199 [RESERVED]--Table of Contents





[[Page 1263]]



                              FINDING AIDS




  --------------------------------------------------------------------

  A list of CFR titles, subtitles, chapters, subchapters and parts and 
an alphabetical list of agencies publishing in the CFR are included in 
the CFR Index and Finding Aids volume to the Code of Federal Regulations 
which is published separately and revised annually.

  Material Approved for Incorporation by Reference
  Table of CFR Titles and Chapters
  Alphabetical List of Agencies Appearing in the CFR
  Redesignation Table
  List of CFR Sections Affected

[[Page 1265]]

            Material Approved for Incorporation by Reference

                      (Revised as of April 1, 2002)

  The Director of the Federal Register has approved under 5 U.S.C. 
552(a) and 1 CFR Part 51 the incorporation by reference of the following 
publications. This list contains only those incorporations by reference 
effective as of the revision date of this volume. Incorporations by 
reference found within a regulation are effective upon the effective 
date of that regulation. For more information on incorporation by 
reference, see the preliminary pages of this volume.


27 CFR (PARTS 1 TO 199)

BUREAU OF ALCOHOL, TOBACCO AND FIREARMS, DEPARTMENT OF THE TREASURY
                                                                  27 CFR


American Institute of Homeopathy

  7297-8H Lee Highway, Falls Church, VA 22042
The Homeopathic Pharmacopoeia of the United            197.3(b); 197.5; 
  States, Volume I, 8th Ed., 1979.                       197.96; 197.109


American Society for Testing and Materials

  100 Barr Harbor Drive, West Conshohocken, PA 
  19428-2959, Telephone (610) 832-9585, FAX (610) 
  832-9555
ASTM D 362-75 Standard Specification for                          21.131
  Industrial Grade Toluene.
ASTM D 439-79 Standard Specifications for                         21.109
  Automotive Gasoline.
ASTM E 100-72 (1978) Standard Specification for                    30.24
  ASTM Hydrometers.


AOAC International (Association of Official Analytical Chemists)

  481 N. Frederick Ave., Suite 500, Gaithersburg, 
  MD 20877-2407 Telephone: (301) 924-7077
AOAC Method 11.003-11.004, Color in White Wine,                   24.241
  AOAC Official Methods of Analysis, 13th Ed., 
  1980.


Bureau of Alcohol, Tobacco, and Firearms, Department of the Treasury

  Available From: Superintendent of Documents, 
  U.S. Government Printing Office, Washington, DC 
  20402, Telephone 202-512-1800
Gauging Manual Embracing Instructions and Tables                 30.1(c)
  for Determining Quantity of Distilled Spirits by 
  Proof and Weight, ATF Publication 5110.6 
  (November 1978).
State Laws and Published Ordinances--Firearms, ATF                178.24
  Publication 5300.5 (1984 Ed.).


United States Pharmacopeial Convention, Inc.

  12601 Twinbrook Parkway, Rockville, MD 20852
The United States Pharmacopeia (USP XX), 20th        170.614; 197.3(a); 
  Revision, 1980, and the National Formulary             197.5; 197.96; 
  (NFXV), 15th Ed., 1980; Compendia.                             197.109



[[Page 1267]]



                    Table of CFR Titles and Chapters




                      (Revised as of April 1, 2002)

                      Title 1--General Provisions

         I  Administrative Committee of the Federal Register 
                (Parts 1--49)
        II  Office of the Federal Register (Parts 50--299)
        IV  Miscellaneous Agencies (Parts 400--500)

                          Title 2 [Reserved]

                        Title 3--The President

         I  Executive Office of the President (Parts 100--199)

                           Title 4--Accounts

         I  General Accounting Office (Parts 1--99)

                   Title 5--Administrative Personnel

         I  Office of Personnel Management (Parts 1--1199)
        II  Merit Systems Protection Board (Parts 1200--1299)
       III  Office of Management and Budget (Parts 1300--1399)
         V  The International Organizations Employees Loyalty 
                Board (Parts 1500--1599)
        VI  Federal Retirement Thrift Investment Board (Parts 
                1600--1699)
       VII  Advisory Commission on Intergovernmental Relations 
                (Parts 1700--1799)
      VIII  Office of Special Counsel (Parts 1800--1899)
        IX  Appalachian Regional Commission (Parts 1900--1999)
        XI  Armed Forces Retirement Home (Part 2100)
       XIV  Federal Labor Relations Authority, General Counsel of 
                the Federal Labor Relations Authority and Federal 
                Service Impasses Panel (Parts 2400--2499)
        XV  Office of Administration, Executive Office of the 
                President (Parts 2500--2599)
       XVI  Office of Government Ethics (Parts 2600--2699)
       XXI  Department of the Treasury (Parts 3100--3199)
      XXII  Federal Deposit Insurance Corporation (Part 3201)
     XXIII  Department of Energy (Part 3301)
      XXIV  Federal Energy Regulatory Commission (Part 3401)

[[Page 1268]]

       XXV  Department of the Interior (Part 3501)
      XXVI  Department of Defense (Part 3601)
    XXVIII  Department of Justice (Part 3801)
      XXIX  Federal Communications Commission (Parts 3900--3999)
       XXX  Farm Credit System Insurance Corporation (Parts 4000--
                4099)
      XXXI  Farm Credit Administration (Parts 4100--4199)
    XXXIII  Overseas Private Investment Corporation (Part 4301)
      XXXV  Office of Personnel Management (Part 4501)
        XL  Interstate Commerce Commission (Part 5001)
       XLI  Commodity Futures Trading Commission (Part 5101)
      XLII  Department of Labor (Part 5201)
     XLIII  National Science Foundation (Part 5301)
       XLV  Department of Health and Human Services (Part 5501)
      XLVI  Postal Rate Commission (Part 5601)
     XLVII  Federal Trade Commission (Part 5701)
    XLVIII  Nuclear Regulatory Commission (Part 5801)
         L  Department of Transportation (Part 6001)
       LII  Export-Import Bank of the United States (Part 6201)
      LIII  Department of Education (Parts 6300--6399)
       LIV  Environmental Protection Agency (Part 6401)
      LVII  General Services Administration (Part 6701)
     LVIII  Board of Governors of the Federal Reserve System (Part 
                6801)
       LIX  National Aeronautics and Space Administration (Part 
                6901)
        LX  United States Postal Service (Part 7001)
       LXI  National Labor Relations Board (Part 7101)
      LXII  Equal Employment Opportunity Commission (Part 7201)
     LXIII  Inter-American Foundation (Part 7301)
       LXV  Department of Housing and Urban Development (Part 
                7501)
      LXVI  National Archives and Records Administration (Part 
                7601)
      LXIX  Tennessee Valley Authority (Part 7901)
      LXXI  Consumer Product Safety Commission (Part 8101)
    LXXIII  Department of Agriculture (Part 8301)
     LXXIV  Federal Mine Safety and Health Review Commission (Part 
                8401)
     LXXVI  Federal Retirement Thrift Investment Board (Part 8601)
    LXXVII  Office of Management and Budget (Part 8701)

                          Title 6 [Reserved]

              

                         Title 7--Agriculture

            Subtitle A--Office of the Secretary of Agriculture 
                (Parts 0--26)
            Subtitle B--Regulations of the Department of 
                Agriculture

[[Page 1269]]

         I  Agricultural Marketing Service (Standards, 
                Inspections, Marketing Practices), Department of 
                Agriculture (Parts 27--209)
        II  Food and Nutrition Service, Department of Agriculture 
                (Parts 210--299)
       III  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 300--399)
        IV  Federal Crop Insurance Corporation, Department of 
                Agriculture (Parts 400--499)
         V  Agricultural Research Service, Department of 
                Agriculture (Parts 500--599)
        VI  Natural Resources Conservation Service, Department of 
                Agriculture (Parts 600--699)
       VII  Farm Service Agency, Department of Agriculture (Parts 
                700--799)
      VIII  Grain Inspection, Packers and Stockyards 
                Administration (Federal Grain Inspection Service), 
                Department of Agriculture (Parts 800--899)
        IX  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Fruits, Vegetables, Nuts), Department 
                of Agriculture (Parts 900--999)
         X  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Milk), Department of Agriculture 
                (Parts 1000--1199)
        XI  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Miscellaneous Commodities), Department 
                of Agriculture (Parts 1200--1299)
      XIII  Northeast Dairy Compact Commission (Parts 1300--1399)
       XIV  Commodity Credit Corporation, Department of 
                Agriculture (Parts 1400--1499)
        XV  Foreign Agricultural Service, Department of 
                Agriculture (Parts 1500--1599)
       XVI  Rural Telephone Bank, Department of Agriculture (Parts 
                1600--1699)
      XVII  Rural Utilities Service, Department of Agriculture 
                (Parts 1700--1799)
     XVIII  Rural Housing Service, Rural Business-Cooperative 
                Service, Rural Utilities Service, and Farm Service 
                Agency, Department of Agriculture (Parts 1800--
                2099)
      XXVI  Office of Inspector General, Department of Agriculture 
                (Parts 2600--2699)
     XXVII  Office of Information Resources Management, Department 
                of Agriculture (Parts 2700--2799)
    XXVIII  Office of Operations, Department of Agriculture (Parts 
                2800--2899)
      XXIX  Office of Energy, Department of Agriculture (Parts 
                2900--2999)
       XXX  Office of the Chief Financial Officer, Department of 
                Agriculture (Parts 3000--3099)
      XXXI  Office of Environmental Quality, Department of 
                Agriculture (Parts 3100--3199)
     XXXII  Office of Procurement and Property Management, 
                Department of Agriculture (Parts 3200--3299)

[[Page 1270]]

    XXXIII  Office of Transportation, Department of Agriculture 
                (Parts 3300--3399)
     XXXIV  Cooperative State Research, Education, and Extension 
                Service, Department of Agriculture (Parts 3400--
                3499)
      XXXV  Rural Housing Service, Department of Agriculture 
                (Parts 3500--3599)
     XXXVI  National Agricultural Statistics Service, Department 
                of Agriculture (Parts 3600--3699)
    XXXVII  Economic Research Service, Department of Agriculture 
                (Parts 3700--3799)
   XXXVIII  World Agricultural Outlook Board, Department of 
                Agriculture (Parts 3800--3899)
       XLI  [Reserved]
      XLII  Rural Business-Cooperative Service and Rural Utilities 
                Service, Department of Agriculture (Parts 4200--
                4299)

                    Title 8--Aliens and Nationality

         I  Immigration and Naturalization Service, Department of 
                Justice (Parts 1--599)

                 Title 9--Animals and Animal Products

         I  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 1--199)
        II  Grain Inspection, Packers and Stockyards 
                Administration (Packers and Stockyards Programs), 
                Department of Agriculture (Parts 200--299)
       III  Food Safety and Inspection Service, Department of 
                Agriculture (Parts 300--599)

                           Title 10--Energy

         I  Nuclear Regulatory Commission (Parts 0--199)
        II  Department of Energy (Parts 200--699)
       III  Department of Energy (Parts 700--999)
         X  Department of Energy (General Provisions) (Parts 1000-
                -1099)
      XVII  Defense Nuclear Facilities Safety Board (Parts 1700--
                1799)
     XVIII  Northeast Interstate Low-Level Radioactive Waste 
                Commission (Part 1800)

                      Title 11--Federal Elections

         I  Federal Election Commission (Parts 1--9099)

                      Title 12--Banks and Banking

         I  Comptroller of the Currency, Department of the 
                Treasury (Parts 1--199)

[[Page 1271]]

        II  Federal Reserve System (Parts 200--299)
       III  Federal Deposit Insurance Corporation (Parts 300--399)
        IV  Export-Import Bank of the United States (Parts 400--
                499)
         V  Office of Thrift Supervision, Department of the 
                Treasury (Parts 500--599)
        VI  Farm Credit Administration (Parts 600--699)
       VII  National Credit Union Administration (Parts 700--799)
      VIII  Federal Financing Bank (Parts 800--899)
        IX  Federal Housing Finance Board (Parts 900--999)
        XI  Federal Financial Institutions Examination Council 
                (Parts 1100--1199)
       XIV  Farm Credit System Insurance Corporation (Parts 1400--
                1499)
        XV  Department of the Treasury (Parts 1500--1599)
      XVII  Office of Federal Housing Enterprise Oversight, 
                Department of Housing and Urban Development (Parts 
                1700--1799)
     XVIII  Community Development Financial Institutions Fund, 
                Department of the Treasury (Parts 1800--1899)

               Title 13--Business Credit and Assistance

         I  Small Business Administration (Parts 1--199)
       III  Economic Development Administration, Department of 
                Commerce (Parts 300--399)
        IV  Emergency Steel Guarantee Loan Board (Parts 400--499)
         V  Emergency Oil and Gas Guaranteed Loan Board (Parts 
                500--599)

                    Title 14--Aeronautics and Space

         I  Federal Aviation Administration, Department of 
                Transportation (Parts 1--199)
        II  Office of the Secretary, Department of Transportation 
                (Aviation Proceedings) (Parts 200--399)
       III  Commercial Space Transportation, Federal Aviation 
                Administration, Department of Transportation 
                (Parts 400--499)
         V  National Aeronautics and Space Administration (Parts 
                1200--1299)
        VI  Office of Management and Budget (Parts 1300--1399)

                 Title 15--Commerce and Foreign Trade

            Subtitle A--Office of the Secretary of Commerce (Parts 
                0--29)
            Subtitle B--Regulations Relating to Commerce and 
                Foreign Trade
         I  Bureau of the Census, Department of Commerce (Parts 
                30--199)
        II  National Institute of Standards and Technology, 
                Department of Commerce (Parts 200--299)

[[Page 1272]]

       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  Foreign-Trade Zones Board, Department of Commerce 
                (Parts 400--499)
       VII  Bureau of Export Administration, Department of 
                Commerce (Parts 700--799)
      VIII  Bureau of Economic Analysis, Department of Commerce 
                (Parts 800--899)
        IX  National Oceanic and Atmospheric Administration, 
                Department of Commerce (Parts 900--999)
        XI  Technology Administration, Department of Commerce 
                (Parts 1100--1199)
      XIII  East-West Foreign Trade Board (Parts 1300--1399)
       XIV  Minority Business Development Agency (Parts 1400--
                1499)
            Subtitle C--Regulations Relating to Foreign Trade 
                Agreements
        XX  Office of the United States Trade Representative 
                (Parts 2000--2099)
            Subtitle D--Regulations Relating to Telecommunications 
                and Information
     XXIII  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                2300--2399)

                    Title 16--Commercial Practices

         I  Federal Trade Commission (Parts 0--999)
        II  Consumer Product Safety Commission (Parts 1000--1799)

             Title 17--Commodity and Securities Exchanges

         I  Commodity Futures Trading Commission (Parts 1--199)
        II  Securities and Exchange Commission (Parts 200--399)
        IV  Department of the Treasury (Parts 400--499)

          Title 18--Conservation of Power and Water Resources

         I  Federal Energy Regulatory Commission, Department of 
                Energy (Parts 1--399)
       III  Delaware River Basin Commission (Parts 400--499)
        VI  Water Resources Council (Parts 700--799)
      VIII  Susquehanna River Basin Commission (Parts 800--899)
      XIII  Tennessee Valley Authority (Parts 1300--1399)

                       Title 19--Customs Duties

         I  United States Customs Service, Department of the 
                Treasury (Parts 1--199)
        II  United States International Trade Commission (Parts 
                200--299)

[[Page 1273]]

       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)

                     Title 20--Employees' Benefits

         I  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 1--199)
        II  Railroad Retirement Board (Parts 200--399)
       III  Social Security Administration (Parts 400--499)
        IV  Employees' Compensation Appeals Board, Department of 
                Labor (Parts 500--599)
         V  Employment and Training Administration, Department of 
                Labor (Parts 600--699)
        VI  Employment Standards Administration, Department of 
                Labor (Parts 700--799)
       VII  Benefits Review Board, Department of Labor (Parts 800-
                -899)
      VIII  Joint Board for the Enrollment of Actuaries (Parts 
                900--999)
        IX  Office of the Assistant Secretary for Veterans' 
                Employment and Training, Department of Labor 
                (Parts 1000--1099)

                       Title 21--Food and Drugs

         I  Food and Drug Administration, Department of Health and 
                Human Services (Parts 1--1299)
        II  Drug Enforcement Administration, Department of Justice 
                (Parts 1300--1399)
       III  Office of National Drug Control Policy (Parts 1400--
                1499)

                      Title 22--Foreign Relations

         I  Department of State (Parts 1--199)
        II  Agency for International Development (Parts 200--299)
       III  Peace Corps (Parts 300--399)
        IV  International Joint Commission, United States and 
                Canada (Parts 400--499)
         V  Broadcasting Board of Governors (Parts 500--599)
       VII  Overseas Private Investment Corporation (Parts 700--
                799)
        IX  Foreign Service Grievance Board Regulations (Parts 
                900--999)
         X  Inter-American Foundation (Parts 1000--1099)
        XI  International Boundary and Water Commission, United 
                States and Mexico, United States Section (Parts 
                1100--1199)
       XII  United States International Development Cooperation 
                Agency (Parts 1200--1299)
       XIV  Foreign Service Labor Relations Board; Federal Labor 
                Relations Authority; General Counsel of the 
                Federal Labor Relations Authority; and the Foreign 
                Service Impasse Disputes Panel (Parts 1400--1499)
        XV  African Development Foundation (Parts 1500--1599)

[[Page 1274]]

       XVI  Japan-United States Friendship Commission (Parts 1600-
                -1699)
      XVII  United States Institute of Peace (Parts 1700--1799)

                          Title 23--Highways

         I  Federal Highway Administration, Department of 
                Transportation (Parts 1--999)
        II  National Highway Traffic Safety Administration and 
                Federal Highway Administration, Department of 
                Transportation (Parts 1200--1299)
       III  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 1300--1399)

                Title 24--Housing and Urban Development

            Subtitle A--Office of the Secretary, Department of 
                Housing and Urban Development (Parts 0--99)
            Subtitle B--Regulations Relating to Housing and Urban 
                Development
         I  Office of Assistant Secretary for Equal Opportunity, 
                Department of Housing and Urban Development (Parts 
                100--199)
        II  Office of Assistant Secretary for Housing-Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 200--299)
       III  Government National Mortgage Association, Department 
                of Housing and Urban Development (Parts 300--399)
        IV  Office of Housing and Office of Multifamily Housing 
                Assistance Restructuring, Department of Housing 
                and Urban Development (Parts 400--499)
         V  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 500--599)
        VI  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 600--699) [Reserved]
       VII  Office of the Secretary, Department of Housing and 
                Urban Development (Housing Assistance Programs and 
                Public and Indian Housing Programs) (Parts 700--
                799)
      VIII  Office of the Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Section 8 Housing Assistance 
                Programs, Section 202 Direct Loan Program, Section 
                202 Supportive Housing for the Elderly Program and 
                Section 811 Supportive Housing for Persons With 
                Disabilities Program) (Parts 800--899)
        IX  Office of Assistant Secretary for Public and Indian 
                Housing, Department of Housing and Urban 
                Development (Parts 900--999)
         X  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Interstate Land Sales 
                Registration Program) (Parts 1700--1799)

[[Page 1275]]

       XII  Office of Inspector General, Department of Housing and 
                Urban Development (Parts 2000--2099)
        XX  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 3200--3899)
       XXV  Neighborhood Reinvestment Corporation (Parts 4100--
                4199)

                           Title 25--Indians

         I  Bureau of Indian Affairs, Department of the Interior 
                (Parts 1--299)
        II  Indian Arts and Crafts Board, Department of the 
                Interior (Parts 300--399)
       III  National Indian Gaming Commission, Department of the 
                Interior (Parts 500--599)
        IV  Office of Navajo and Hopi Indian Relocation (Parts 
                700--799)
         V  Bureau of Indian Affairs, Department of the Interior, 
                and Indian Health Service, Department of Health 
                and Human Services (Part 900)
        VI  Office of the Assistant Secretary-Indian Affairs, 
                Department of the Interior (Parts 1000--1199)
       VII  Office of the Special Trustee for American Indians, 
                Department of the Interior (Part 1200)

                      Title 26--Internal Revenue

         I  Internal Revenue Service, Department of the Treasury 
                (Parts 1--899)

           Title 27--Alcohol, Tobacco Products and Firearms

         I  Bureau of Alcohol, Tobacco and Firearms, Department of 
                the Treasury (Parts 1--299)

                   Title 28--Judicial Administration

         I  Department of Justice (Parts 0--199)
       III  Federal Prison Industries, Inc., Department of Justice 
                (Parts 300--399)
         V  Bureau of Prisons, Department of Justice (Parts 500--
                599)
        VI  Offices of Independent Counsel, Department of Justice 
                (Parts 600--699)
       VII  Office of Independent Counsel (Parts 700--799)
      VIII  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 800--899)
        IX  National Crime Prevention and Privacy Compact Council 
                (Parts 900--999)
        XI  Department of Justice and Department of State (Parts 
                1100--1199)

[[Page 1276]]

                            Title 29--Labor

            Subtitle A--Office of the Secretary of Labor (Parts 0-
                -99)
            Subtitle B--Regulations Relating to Labor
         I  National Labor Relations Board (Parts 100--199)
        II  Office of Labor-Management Standards, Department of 
                Labor (Parts 200--299)
       III  National Railroad Adjustment Board (Parts 300--399)
        IV  Office of Labor-Management Standards, Department of 
                Labor (Parts 400--499)
         V  Wage and Hour Division, Department of Labor (Parts 
                500--899)
        IX  Construction Industry Collective Bargaining Commission 
                (Parts 900--999)
         X  National Mediation Board (Parts 1200--1299)
       XII  Federal Mediation and Conciliation Service (Parts 
                1400--1499)
       XIV  Equal Employment Opportunity Commission (Parts 1600--
                1699)
      XVII  Occupational Safety and Health Administration, 
                Department of Labor (Parts 1900--1999)
        XX  Occupational Safety and Health Review Commission 
                (Parts 2200--2499)
       XXV  Pension and Welfare Benefits Administration, 
                Department of Labor (Parts 2500--2599)
     XXVII  Federal Mine Safety and Health Review Commission 
                (Parts 2700--2799)
        XL  Pension Benefit Guaranty Corporation (Parts 4000--
                4999)

                      Title 30--Mineral Resources

         I  Mine Safety and Health Administration, Department of 
                Labor (Parts 1--199)
        II  Minerals Management Service, Department of the 
                Interior (Parts 200--299)
       III  Board of Surface Mining and Reclamation Appeals, 
                Department of the Interior (Parts 300--399)
        IV  Geological Survey, Department of the Interior (Parts 
                400--499)
        VI  Bureau of Mines, Department of the Interior (Parts 
                600--699)
       VII  Office of Surface Mining Reclamation and Enforcement, 
                Department of the Interior (Parts 700--999)

                 Title 31--Money and Finance: Treasury

            Subtitle A--Office of the Secretary of the Treasury 
                (Parts 0--50)
            Subtitle B--Regulations Relating to Money and Finance
         I  Monetary Offices, Department of the Treasury (Parts 
                51--199)
        II  Fiscal Service, Department of the Treasury (Parts 200-
                -399)
        IV  Secret Service, Department of the Treasury (Parts 400-
                -499)
         V  Office of Foreign Assets Control, Department of the 
                Treasury (Parts 500--599)

[[Page 1277]]

        VI  Bureau of Engraving and Printing, Department of the 
                Treasury (Parts 600--699)
       VII  Federal Law Enforcement Training Center, Department of 
                the Treasury (Parts 700--799)
      VIII  Office of International Investment, Department of the 
                Treasury (Parts 800--899)
        IX  Federal Claims Collection Standards (Department of the 
                Treasury--Department of Justice) (Parts 900--999)

                      Title 32--National Defense

            Subtitle A--Department of Defense
         I  Office of the Secretary of Defense (Parts 1--399)
         V  Department of the Army (Parts 400--699)
        VI  Department of the Navy (Parts 700--799)
       VII  Department of the Air Force (Parts 800--1099)
            Subtitle B--Other Regulations Relating to National 
                Defense
       XII  Defense Logistics Agency (Parts 1200--1299)
       XVI  Selective Service System (Parts 1600--1699)
     XVIII  National Counterintelligence Center (Parts 1800--1899)
       XIX  Central Intelligence Agency (Parts 1900--1999)
        XX  Information Security Oversight Office, National 
                Archives and Records Administration (Parts 2000--
                2099)
       XXI  National Security Council (Parts 2100--2199)
      XXIV  Office of Science and Technology Policy (Parts 2400--
                2499)
     XXVII  Office for Micronesian Status Negotiations (Parts 
                2700--2799)
    XXVIII  Office of the Vice President of the United States 
                (Parts 2800--2899)

               Title 33--Navigation and Navigable Waters

         I  Coast Guard, Department of Transportation (Parts 1--
                199)
        II  Corps of Engineers, Department of the Army (Parts 200-
                -399)
        IV  Saint Lawrence Seaway Development Corporation, 
                Department of Transportation (Parts 400--499)

                          Title 34--Education

            Subtitle A--Office of the Secretary, Department of 
                Education (Parts 1--99)
            Subtitle B--Regulations of the Offices of the 
                Department of Education
         I  Office for Civil Rights, Department of Education 
                (Parts 100--199)
        II  Office of Elementary and Secondary Education, 
                Department of Education (Parts 200--299)
       III  Office of Special Education and Rehabilitative 
                Services, Department of Education (Parts 300--399)

[[Page 1278]]

        IV  Office of Vocational and Adult Education, Department 
                of Education (Parts 400--499)
         V  Office of Bilingual Education and Minority Languages 
                Affairs, Department of Education (Parts 500--599)
        VI  Office of Postsecondary Education, Department of 
                Education (Parts 600--699)
       VII  Office of Educational Research and Improvement, 
                Department of Education (Parts 700--799)
        XI  National Institute for Literacy (Parts 1100--1199)
            Subtitle C--Regulations Relating to Education
       XII  National Council on Disability (Parts 1200--1299)

                        Title 35--Panama Canal

         I  Panama Canal Regulations (Parts 1--299)

             Title 36--Parks, Forests, and Public Property

         I  National Park Service, Department of the Interior 
                (Parts 1--199)
        II  Forest Service, Department of Agriculture (Parts 200--
                299)
       III  Corps of Engineers, Department of the Army (Parts 300-
                -399)
        IV  American Battle Monuments Commission (Parts 400--499)
         V  Smithsonian Institution (Parts 500--599)
       VII  Library of Congress (Parts 700--799)
      VIII  Advisory Council on Historic Preservation (Parts 800--
                899)
        IX  Pennsylvania Avenue Development Corporation (Parts 
                900--999)
         X  Presidio Trust (Parts 1000--1099)
        XI  Architectural and Transportation Barriers Compliance 
                Board (Parts 1100--1199)
       XII  National Archives and Records Administration (Parts 
                1200--1299)
        XV  Oklahoma City National Memorial Trust (Part 1501)
       XVI  Morris K. Udall Scholarship and Excellence in National 
                Environmental Policy Foundation (Parts 1600--1699)

             Title 37--Patents, Trademarks, and Copyrights

         I  United States Patent and Trademark Office, Department 
                of Commerce (Parts 1--199)
        II  Copyright Office, Library of Congress (Parts 200--299)
        IV  Assistant Secretary for Technology Policy, Department 
                of Commerce (Parts 400--499)
         V  Under Secretary for Technology, Department of Commerce 
                (Parts 500--599)

           Title 38--Pensions, Bonuses, and Veterans' Relief

         I  Department of Veterans Affairs (Parts 0--99)

[[Page 1279]]

                       Title 39--Postal Service

         I  United States Postal Service (Parts 1--999)
       III  Postal Rate Commission (Parts 3000--3099)

                  Title 40--Protection of Environment

         I  Environmental Protection Agency (Parts 1--799)
        IV  Environmental Protection Agency and Department of 
                Justice (Parts 1400--1499)
         V  Council on Environmental Quality (Parts 1500--1599)
        VI  Chemical Safety and Hazard Investigation Board (Parts 
                1600--1699)
       VII  Environmental Protection Agency and Department of 
                Defense; Uniform National Discharge Standards for 
                Vessels of the Armed Forces (Parts 1700--1799)

          Title 41--Public Contracts and Property Management

            Subtitle B--Other Provisions Relating to Public 
                Contracts
        50  Public Contracts, Department of Labor (Parts 50-1--50-
                999)
        51  Committee for Purchase From People Who Are Blind or 
                Severely Disabled (Parts 51-1--51-99)
        60  Office of Federal Contract Compliance Programs, Equal 
                Employment Opportunity, Department of Labor (Parts 
                60-1--60-999)
        61  Office of the Assistant Secretary for Veterans' 
                Employment and Training Service, Department of 
                Labor (Parts 61-1--61-999)
            Subtitle C--Federal Property Management Regulations 
                System
       101  Federal Property Management Regulations (Parts 101-1--
                101-99)
       102  Federal Management Regulation (Parts 102-1--102-299)
       105  General Services Administration (Parts 105-1--105-999)
       109  Department of Energy Property Management Regulations 
                (Parts 109-1--109-99)
       114  Department of the Interior (Parts 114-1--114-99)
       115  Environmental Protection Agency (Parts 115-1--115-99)
       128  Department of Justice (Parts 128-1--128-99)
            Subtitle D--Other Provisions Relating to Property 
                Management [Reserved]
            Subtitle E--Federal Information Resources Management 
                Regulations System
       201  Federal Information Resources Management Regulation 
                (Parts 201-1--201-99) [Reserved]
            Subtitle F--Federal Travel Regulation System
       300  General (Parts 300-1--300-99)
       301  Temporary Duty (TDY) Travel Allowances (Parts 301-1--
                301-99)
       302  Relocation Allowances (Parts 302-1--302-99)
       303  Payment of Expenses Connected with the Death of 
                Certain Employees (Part 303-70)

[[Page 1280]]

       304  Payment from a Non-Federal Source for Travel Expenses 
                (Parts 304-1--304-99)

                        Title 42--Public Health

         I  Public Health Service, Department of Health and Human 
                Services (Parts 1--199)
        IV  Centers for Medicare & Medicaid Services, Department 
                of Health and Human Services (Parts 400--499)
         V  Office of Inspector General-Health Care, Department of 
                Health and Human Services (Parts 1000--1999)

                   Title 43--Public Lands: Interior

            Subtitle A--Office of the Secretary of the Interior 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Lands
         I  Bureau of Reclamation, Department of the Interior 
                (Parts 200--499)
        II  Bureau of Land Management, Department of the Interior 
                (Parts 1000--9999)
       III  Utah Reclamation Mitigation and Conservation 
                Commission (Parts 10000--10005)

             Title 44--Emergency Management and Assistance

         I  Federal Emergency Management Agency (Parts 0--399)
        IV  Department of Commerce and Department of 
                Transportation (Parts 400--499)

                       Title 45--Public Welfare

            Subtitle A--Department of Health and Human Services 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Welfare
        II  Office of Family Assistance (Assistance Programs), 
                Administration for Children and Families, 
                Department of Health and Human Services (Parts 
                200--299)
       III  Office of Child Support Enforcement (Child Support 
                Enforcement Program), Administration for Children 
                and Families, Department of Health and Human 
                Services (Parts 300--399)
        IV  Office of Refugee Resettlement, Administration for 
                Children and Families Department of Health and 
                Human Services (Parts 400--499)
         V  Foreign Claims Settlement Commission of the United 
                States, Department of Justice (Parts 500--599)
        VI  National Science Foundation (Parts 600--699)
       VII  Commission on Civil Rights (Parts 700--799)
      VIII  Office of Personnel Management (Parts 800--899)

[[Page 1281]]

         X  Office of Community Services, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 1000--1099)
        XI  National Foundation on the Arts and the Humanities 
                (Parts 1100--1199)
       XII  Corporation for National and Community Service (Parts 
                1200--1299)
      XIII  Office of Human Development Services, Department of 
                Health and Human Services (Parts 1300--1399)
       XVI  Legal Services Corporation (Parts 1600--1699)
      XVII  National Commission on Libraries and Information 
                Science (Parts 1700--1799)
     XVIII  Harry S. Truman Scholarship Foundation (Parts 1800--
                1899)
       XXI  Commission on Fine Arts (Parts 2100--2199)
     XXIII  Arctic Research Commission (Part 2301)
      XXIV  James Madison Memorial Fellowship Foundation (Parts 
                2400--2499)
       XXV  Corporation for National and Community Service (Parts 
                2500--2599)

                          Title 46--Shipping

         I  Coast Guard, Department of Transportation (Parts 1--
                199)
        II  Maritime Administration, Department of Transportation 
                (Parts 200--399)
       III  Coast Guard (Great Lakes Pilotage), Department of 
                Transportation (Parts 400--499)
        IV  Federal Maritime Commission (Parts 500--599)

                      Title 47--Telecommunication

         I  Federal Communications Commission (Parts 0--199)
        II  Office of Science and Technology Policy and National 
                Security Council (Parts 200--299)
       III  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 300-
                -399)

           Title 48--Federal Acquisition Regulations System

         1  Federal Acquisition Regulation (Parts 1--99)
         2  Department of Defense (Parts 200--299)
         3  Department of Health and Human Services (Parts 300--
                399)
         4  Department of Agriculture (Parts 400--499)
         5  General Services Administration (Parts 500--599)
         6  Department of State (Parts 600--699)
         7  United States Agency for International Development 
                (Parts 700--799)
         8  Department of Veterans Affairs (Parts 800--899)

[[Page 1282]]

         9  Department of Energy (Parts 900--999)
        10  Department of the Treasury (Parts 1000--1099)
        12  Department of Transportation (Parts 1200--1299)
        13  Department of Commerce (Parts 1300--1399)
        14  Department of the Interior (Parts 1400--1499)
        15  Environmental Protection Agency (Parts 1500--1599)
        16  Office of Personnel Management Federal Employees 
                Health Benefits Acquisition Regulation (Parts 
                1600--1699)
        17  Office of Personnel Management (Parts 1700--1799)
        18  National Aeronautics and Space Administration (Parts 
                1800--1899)
        19  Broadcasting Board of Governors (Parts 1900--1999)
        20  Nuclear Regulatory Commission (Parts 2000--2099)
        21  Office of Personnel Management, Federal Employees 
                Group Life Insurance Federal Acquisition 
                Regulation (Parts 2100--2199)
        23  Social Security Administration (Parts 2300--2399)
        24  Department of Housing and Urban Development (Parts 
                2400--2499)
        25  National Science Foundation (Parts 2500--2599)
        28  Department of Justice (Parts 2800--2899)
        29  Department of Labor (Parts 2900--2999)
        34  Department of Education Acquisition Regulation (Parts 
                3400--3499)
        35  Panama Canal Commission (Parts 3500--3599)
        44  Federal Emergency Management Agency (Parts 4400--4499)
        51  Department of the Army Acquisition Regulations (Parts 
                5100--5199)
        52  Department of the Navy Acquisition Regulations (Parts 
                5200--5299)
        53  Department of the Air Force Federal Acquisition 
                Regulation Supplement (Parts 5300--5399)
        54  Defense Logistics Agency, Department of Defense (Part 
                5452)
        57  African Development Foundation (Parts 5700--5799)
        61  General Services Administration Board of Contract 
                Appeals (Parts 6100--6199)
        63  Department of Transportation Board of Contract Appeals 
                (Parts 6300--6399)
        99  Cost Accounting Standards Board, Office of Federal 
                Procurement Policy, Office of Management and 
                Budget (Parts 9900--9999)

                       Title 49--Transportation

            Subtitle A--Office of the Secretary of Transportation 
                (Parts 1--99)
            Subtitle B--Other Regulations Relating to 
                Transportation
         I  Research and Special Programs Administration, 
                Department of Transportation (Parts 100--199)

[[Page 1283]]

        II  Federal Railroad Administration, Department of 
                Transportation (Parts 200--299)
       III  Federal Motor Carrier Safety Administration, 
                Department of Transportation (Parts 300--399)
        IV  Coast Guard, Department of Transportation (Parts 400--
                499)
         V  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 500--599)
        VI  Federal Transit Administration, Department of 
                Transportation (Parts 600--699)
       VII  National Railroad Passenger Corporation (AMTRAK) 
                (Parts 700--799)
      VIII  National Transportation Safety Board (Parts 800--999)
         X  Surface Transportation Board, Department of 
                Transportation (Parts 1000--1399)
        XI  Bureau of Transportation Statistics, Department of 
                Transportation (Parts 1400--1499)
       XII  Transportation Security Administration, Department of 
                Transportation (Parts 1500--1599)

                   Title 50--Wildlife and Fisheries

         I  United States Fish and Wildlife Service, Department of 
                the Interior (Parts 1--199)
        II  National Marine Fisheries Service, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 200--299)
       III  International Fishing and Related Activities (Parts 
                300--399)
        IV  Joint Regulations (United States Fish and Wildlife 
                Service, Department of the Interior and National 
                Marine Fisheries Service, National Oceanic and 
                Atmospheric Administration, Department of 
                Commerce); Endangered Species Committee 
                Regulations (Parts 400--499)
         V  Marine Mammal Commission (Parts 500--599)
        VI  Fishery Conservation and Management, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 600--699)

                      CFR Index and Finding Aids

            Subject/Agency Index
            List of Agency Prepared Indexes
            Parallel Tables of Statutory Authorities and Rules
            List of CFR Titles, Chapters, Subchapters, and Parts
            Alphabetical List of Agencies Appearing in the CFR



[[Page 1285]]





           Alphabetical List of Agencies Appearing in the CFR




                      (Revised as of April 1, 2002)

                                                  CFR Title, Subtitle or 
                     Agency                               Chapter

Administrative Committee of the Federal Register  1, I
Advanced Research Projects Agency                 32, I
Advisory Commission on Intergovernmental          5, VII
     Relations
Advisory Council on Historic Preservation         36, VIII
African Development Foundation                    22, XV
  Federal Acquisition Regulation                  48, 57
Agency for International Development, United      22, II
     States
  Federal Acquisition Regulation                  48, 7
Agricultural Marketing Service                    7, I, IX, X, XI
Agricultural Research Service                     7, V
Agriculture Department                            5, LXXIII
  Agricultural Marketing Service                  7, I, IX, X, XI
  Agricultural Research Service                   7, V
  Animal and Plant Health Inspection Service      7, III; 9, I
  Chief Financial Officer, Office of              7, XXX
  Commodity Credit Corporation                    7, XIV
  Cooperative State Research, Education, and      7, XXXIV
       Extension Service
  Economic Research Service                       7, XXXVII
  Energy, Office of                               7, XXIX
  Environmental Quality, Office of                7, XXXI
  Farm Service Agency                             7, VII, XVIII
  Federal Acquisition Regulation                  48, 4
  Federal Crop Insurance Corporation              7, IV
  Food and Nutrition Service                      7, II
  Food Safety and Inspection Service              9, III
  Foreign Agricultural Service                    7, XV
  Forest Service                                  36, II
  Grain Inspection, Packers and Stockyards        7, VIII; 9, II
       Administration
  Information Resources Management, Office of     7, XXVII
  Inspector General, Office of                    7, XXVI
  National Agricultural Library                   7, XLI
  National Agricultural Statistics Service        7, XXXVI
  Natural Resources Conservation Service          7, VI
  Operations, Office of                           7, XXVIII
  Procurement and Property Management, Office of  7, XXXII
  Rural Business-Cooperative Service              7, XVIII, XLII
  Rural Development Administration                7, XLII
  Rural Housing Service                           7, XVIII, XXXV
  Rural Telephone Bank                            7, XVI
  Rural Utilities Service                         7, XVII, XVIII, XLII
  Secretary of Agriculture, Office of             7, Subtitle A
  Transportation, Office of                       7, XXXIII
  World Agricultural Outlook Board                7, XXXVIII
Air Force Department                              32, VII
  Federal Acquisition Regulation Supplement       48, 53
Alcohol, Tobacco and Firearms, Bureau of          27, I
AMTRAK                                            49, VII
American Battle Monuments Commission              36, IV
American Indians, Office of the Special Trustee   25, VII
Animal and Plant Health Inspection Service        7, III; 9, I
Appalachian Regional Commission                   5, IX
Architectural and Transportation Barriers         36, XI
   Compliance Board
[[Page 1286]]

Arctic Research Commission                        45, XXIII
Armed Forces Retirement Home                      5, XI
Army Department                                   32, V
  Engineers, Corps of                             33, II; 36, III
  Federal Acquisition Regulation                  48, 51
Benefits Review Board                             20, VII
Bilingual Education and Minority Languages        34, V
     Affairs, Office of
Blind or Severely Disabled, Committee for         41, 51
     Purchase From People Who Are
Broadcasting Board of Governors                   22, V
  Federal Acquisition Regulation                  48, 19
Census Bureau                                     15, I
Centers for Medicare & Medicaid Services          42, IV
Central Intelligence Agency                       32, XIX
Chief Financial Officer, Office of                7, XXX
Child Support Enforcement, Office of              45, III
Children and Families, Administration for         45, II, III, IV, X
Civil Rights, Commission on                       45, VII
Civil Rights, Office for                          34, I
Coast Guard                                       33, I; 46, I; 49, IV
Coast Guard (Great Lakes Pilotage)                46, III
Commerce Department                               44, IV
  Census Bureau                                   15, I
  Economic Affairs, Under Secretary               37, V
  Economic Analysis, Bureau of                    15, VIII
  Economic Development Administration             13, III
  Emergency Management and Assistance             44, IV
  Export Administration, Bureau of                15, VII
  Federal Acquisition Regulation                  48, 13
  Fishery Conservation and Management             50, VI
  Foreign-Trade Zones Board                       15, IV
  International Trade Administration              15, III; 19, III
  National Institute of Standards and Technology  15, II
  National Marine Fisheries Service               50, II, IV, VI
  National Oceanic and Atmospheric                15, IX; 50, II, III, IV, 
       Administration                             VI
  National Telecommunications and Information     15, XXIII; 47, III
       Administration
  National Weather Service                        15, IX
  Patent and Trademark Office, United States      37, I
  Productivity, Technology and Innovation,        37, IV
       Assistant Secretary for
  Secretary of Commerce, Office of                15, Subtitle A
  Technology, Under Secretary for                 37, V
  Technology Administration                       15, XI
  Technology Policy, Assistant Secretary for      37, IV
Commercial Space Transportation                   14, III
Commodity Credit Corporation                      7, XIV
Commodity Futures Trading Commission              5, XLI; 17, I
Community Planning and Development, Office of     24, V, VI
     Assistant Secretary for
Community Services, Office of                     45, X
Comptroller of the Currency                       12, I
Construction Industry Collective Bargaining       29, IX
     Commission
Consumer Product Safety Commission                5, LXXI; 16, II
Cooperative State Research, Education, and        7, XXXIV
     Extension Service
Copyright Office                                  37, II
Corporation for National and Community Service    45, XII, XXV
Cost Accounting Standards Board                   48, 99
Council on Environmental Quality                  40, V
Court Services and Offender Supervision Agency    28, VIII
     for the District of Columbia
Customs Service, United States                    19, I
Defense Contract Audit Agency                     32, I
Defense Department                                5, XXVI; 32, Subtitle A; 
                                                  40, VII
  Advanced Research Projects Agency               32, I

[[Page 1287]]

  Air Force Department                            32, VII
  Army Department                                 32, V; 33, II; 36, III, 
                                                  48, 51
  Defense Intelligence Agency                     32, I
  Defense Logistics Agency                        32, I, XII; 48, 54
  Engineers, Corps of                             33, II; 36, III
  Federal Acquisition Regulation                  48, 2
  National Imagery and Mapping Agency             32, I
  Navy Department                                 32, VI; 48, 52
  Secretary of Defense, Office of                 32, I
Defense Contract Audit Agency                     32, I
Defense Intelligence Agency                       32, I
Defense Logistics Agency                          32, XII; 48, 54
Defense Nuclear Facilities Safety Board           10, XVII
Delaware River Basin Commission                   18, III
District of Columbia, Court Services and          28, VIII
     Offender Supervision Agency for the
Drug Enforcement Administration                   21, II
East-West Foreign Trade Board                     15, XIII
Economic Affairs, Under Secretary                 37, V
Economic Analysis, Bureau of                      15, VIII
Economic Development Administration               13, III
Economic Research Service                         7, XXXVII
Education, Department of                          5, LIII
  Bilingual Education and Minority Languages      34, V
       Affairs, Office of
  Civil Rights, Office for                        34, I
  Educational Research and Improvement, Office    34, VII
       of
  Elementary and Secondary Education, Office of   34, II
  Federal Acquisition Regulation                  48, 34
  Postsecondary Education, Office of              34, VI
  Secretary of Education, Office of               34, Subtitle A
  Special Education and Rehabilitative Services,  34, III
       Office of
  Vocational and Adult Education, Office of       34, IV
Educational Research and Improvement, Office of   34, VII
Elementary and Secondary Education, Office of     34, II
Emergency Oil and Gas Guaranteed Loan Board       13, V
Emergency Steel Guarantee Loan Board              13, IV
Employees' Compensation Appeals Board             20, IV
Employees Loyalty Board                           5, V
Employment and Training Administration            20, V
Employment Standards Administration               20, VI
Endangered Species Committee                      50, IV
Energy, Department of                             5, XXIII; 10, II, III, X
  Federal Acquisition Regulation                  48, 9
  Federal Energy Regulatory Commission            5, XXIV; 18, I
  Property Management Regulations                 41, 109
Energy, Office of                                 7, XXIX
Engineers, Corps of                               33, II; 36, III
Engraving and Printing, Bureau of                 31, VI
Environmental Protection Agency                   5, LIV; 40, I, IV, VII
  Federal Acquisition Regulation                  48, 15
  Property Management Regulations                 41, 115
Environmental Quality, Office of                  7, XXXI
Equal Employment Opportunity Commission           5, LXII; 29, XIV
Equal Opportunity, Office of Assistant Secretary  24, I
     for
Executive Office of the President                 3, I
  Administration, Office of                       5, XV
  Environmental Quality, Council on               40, V
  Management and Budget, Office of                5, III, LXXVII; 14, VI; 
                                                  48, 99
  National Drug Control Policy, Office of         21, III
  National Security Council                       32, XXI; 47, 2
  Presidential Documents                          3
  Science and Technology Policy, Office of        32, XXIV; 47, II
  Trade Representative, Office of the United      15, XX
       States
Export Administration, Bureau of                  15, VII

[[Page 1288]]

Export-Import Bank of the United States           5, LII; 12, IV
Family Assistance, Office of                      45, II
Farm Credit Administration                        5, XXXI; 12, VI
Farm Credit System Insurance Corporation          5, XXX; 12, XIV
Farm Service Agency                               7, VII, XVIII
Federal Acquisition Regulation                    48, 1
Federal Aviation Administration                   14, I
  Commercial Space Transportation                 14, III
Federal Claims Collection Standards               31, IX
Federal Communications Commission                 5, XXIX; 47, I
Federal Contract Compliance Programs, Office of   41, 60
Federal Crop Insurance Corporation                7, IV
Federal Deposit Insurance Corporation             5, XXII; 12, III
Federal Election Commission                       11, I
Federal Emergency Management Agency               44, I
  Federal Acquisition Regulation                  48, 44
Federal Employees Group Life Insurance Federal    48, 21
     Acquisition Regulation
Federal Employees Health Benefits Acquisition     48, 16
     Regulation
Federal Energy Regulatory Commission              5, XXIV; 18, I
Federal Financial Institutions Examination        12, XI
     Council
Federal Financing Bank                            12, VIII
Federal Highway Administration                    23, I, II
Federal Home Loan Mortgage Corporation            1, IV
Federal Housing Enterprise Oversight Office       12, XVII
Federal Housing Finance Board                     12, IX
Federal Labor Relations Authority, and General    5, XIV; 22, XIV
     Counsel of the Federal Labor Relations 
     Authority
Federal Law Enforcement Training Center           31, VII
Federal Management Regulation                     41, 102
Federal Maritime Commission                       46, IV
Federal Mediation and Conciliation Service        29, XII
Federal Mine Safety and Health Review Commission  5, LXXIV; 29, XXVII
Federal Motor Carrier Safety Administration       49, III
Federal Prison Industries, Inc.                   28, III
Federal Procurement Policy Office                 48, 99
Federal Property Management Regulations           41, 101
Federal Railroad Administration                   49, II
Federal Register, Administrative Committee of     1, I
Federal Register, Office of                       1, II
Federal Reserve System                            12, II
  Board of Governors                              5, LVIII
Federal Retirement Thrift Investment Board        5, VI, LXXVI
Federal Service Impasses Panel                    5, XIV
Federal Trade Commission                          5, XLVII; 16, I
Federal Transit Administration                    49, VI
Federal Travel Regulation System                  41, Subtitle F
Fine Arts, Commission on                          45, XXI
Fiscal Service                                    31, II
Fish and Wildlife Service, United States          50, I, IV
Fishery Conservation and Management               50, VI
Food and Drug Administration                      21, I
Food and Nutrition Service                        7, II
Food Safety and Inspection Service                9, III
Foreign Agricultural Service                      7, XV
Foreign Assets Control, Office of                 31, V
Foreign Claims Settlement Commission of the       45, V
     United States
Foreign Service Grievance Board                   22, IX
Foreign Service Impasse Disputes Panel            22, XIV
Foreign Service Labor Relations Board             22, XIV
Foreign-Trade Zones Board                         15, IV
Forest Service                                    36, II
General Accounting Office                         4, I
General Services Administration                   5, LVII; 41, 105
  Contract Appeals, Board of                      48, 61
  Federal Acquisition Regulation                  48, 5
  Federal Management Regulation                   41, 102

[[Page 1289]]

  Federal Property Management Regulation          41, 101
  Federal Travel Regulation System                41, Subtitle F
  General                                         41, 300
  Payment From a Non-Federal Source for Travel    41, 304
       Expenses
  Payment of Expenses Connected With the Death    41, 303
       of Certain Employees
  Relocation Allowances                           41, 302
  Temporary Duty (TDY) Travel Allowances          41, 301
Geological Survey                                 30, IV
Government Ethics, Office of                      5, XVI
Government National Mortgage Association          24, III
Grain Inspection, Packers and Stockyards          7, VIII; 9, II
     Administration
Harry S. Truman Scholarship Foundation            45, XVIII
Health and Human Services, Department of          5, XLV; 45, Subtitle A
  Centers for Medicare & Medicaid Services        42, IV
  Child Support Enforcement, Office of            45, III
  Children and Families, Administration for       45, II, III, IV, X
  Community Services, Office of                   45, X
  Family Assistance, Office of                    45, II
  Federal Acquisition Regulation                  48, 3
  Food and Drug Administration                    21, I
  Human Development Services, Office of           45, XIII
  Indian Health Service                           25, V
  Inspector General (Health Care), Office of      42, V
  Public Health Service                           42, I
  Refugee Resettlement, Office of                 45, IV
Housing and Urban Development, Department of      5, LXV; 24, Subtitle B
  Community Planning and Development, Office of   24, V, VI
       Assistant Secretary for
  Equal Opportunity, Office of Assistant          24, I
       Secretary for
  Federal Acquisition Regulation                  48, 24
  Federal Housing Enterprise Oversight, Office    12, XVII
       of
  Government National Mortgage Association        24, III
  Housing--Federal Housing Commissioner, Office   24, II, VIII, X, XX
       of Assistant Secretary for
  Housing, Office of, and Multifamily Housing     24, IV
       Assistance Restructuring, Office of
  Inspector General, Office of                    24, XII
  Public and Indian Housing, Office of Assistant  24, IX
       Secretary for
  Secretary, Office of                            24, Subtitle A, VII
Housing--Federal Housing Commissioner, Office of  24, II, VIII, X, XX
     Assistant Secretary for
Housing, Office of, and Multifamily Housing       24, IV
     Assistance Restructuring, Office of
Human Development Services, Office of             45, XIII
Immigration and Naturalization Service            8, I
Independent Counsel, Office of                    28, VII
Indian Affairs, Bureau of                         25, I, V
Indian Affairs, Office of the Assistant           25, VI
     Secretary
Indian Arts and Crafts Board                      25, II
Indian Health Service                             25, V
Information Resources Management, Office of       7, XXVII
Information Security Oversight Office, National   32, XX
     Archives and Records Administration
Inspector General
  Agriculture Department                          7, XXVI
  Health and Human Services Department            42, V
  Housing and Urban Development Department        24, XII
Institute of Peace, United States                 22, XVII
Inter-American Foundation                         5, LXIII; 22, X
Intergovernmental Relations, Advisory Commission  5, VII
     on
Interior Department
  American Indians, Office of the Special         25, VII
       Trustee
  Endangered Species Committee                    50, IV
  Federal Acquisition Regulation                  48, 14
  Federal Property Management Regulations System  41, 114
  Fish and Wildlife Service, United States        50, I, IV

[[Page 1290]]

  Geological Survey                               30, IV
  Indian Affairs, Bureau of                       25, I, V
  Indian Affairs, Office of the Assistant         25, VI
       Secretary
  Indian Arts and Crafts Board                    25, II
  Land Management, Bureau of                      43, II
  Minerals Management Service                     30, II
  Mines, Bureau of                                30, VI
  National Indian Gaming Commission               25, III
  National Park Service                           36, I
  Reclamation, Bureau of                          43, I
  Secretary of the Interior, Office of            43, Subtitle A
  Surface Mining and Reclamation Appeals, Board   30, III
       of
  Surface Mining Reclamation and Enforcement,     30, VII
       Office of
Internal Revenue Service                          26, I
International Boundary and Water Commission,      22, XI
     United States and Mexico, United States 
     Section
International Development, United States Agency   22, II
     for
  Federal Acquisition Regulation                  48, 7
International Development Cooperation Agency,     22, XII
     United States
International Fishing and Related Activities      50, III
International Investment, Office of               31, VIII
International Joint Commission, United States     22, IV
     and Canada
International Organizations Employees Loyalty     5, V
     Board
International Trade Administration                15, III; 19, III
International Trade Commission, United States     19, II
Interstate Commerce Commission                    5, XL
James Madison Memorial Fellowship Foundation      45, XXIV
Japan-United States Friendship Commission         22, XVI
Joint Board for the Enrollment of Actuaries       20, VIII
Justice Department                                5, XXVIII; 28, I, XI; 40, 
                                                  IV
  Drug Enforcement Administration                 21, II
  Federal Acquisition Regulation                  48, 28
  Federal Claims Collection Standards             31, IX
  Federal Prison Industries, Inc.                 28, III
  Foreign Claims Settlement Commission of the     45, V
       United States
  Immigration and Naturalization Service          8, I
  Offices of Independent Counsel                  28, VI
  Prisons, Bureau of                              28, V
  Property Management Regulations                 41, 128
Labor Department                                  5, XLII
  Benefits Review Board                           20, VII
  Employees' Compensation Appeals Board           20, IV
  Employment and Training Administration          20, V
  Employment Standards Administration             20, VI
  Federal Acquisition Regulation                  48, 29
  Federal Contract Compliance Programs, Office    41, 60
       of
  Federal Procurement Regulations System          41, 50
  Labor-Management Standards, Office of           29, II, IV
  Mine Safety and Health Administration           30, I
  Occupational Safety and Health Administration   29, XVII
  Pension and Welfare Benefits Administration     29, XXV
  Public Contracts                                41, 50
  Secretary of Labor, Office of                   29, Subtitle A
  Veterans' Employment and Training Service,      41, 61; 20, IX
       Office of the Assistant Secretary for
  Wage and Hour Division                          29, V
  Workers' Compensation Programs, Office of       20, I
Labor-Management Standards, Office of             29, II, IV
Land Management, Bureau of                        43, II
Legal Services Corporation                        45, XVI
Library of Congress                               36, VII
  Copyright Office                                37, II
Management and Budget, Office of                  5, III, LXXVII; 14, VI; 
                                                  48, 99

[[Page 1291]]

Marine Mammal Commission                          50, V
Maritime Administration                           46, II
Merit Systems Protection Board                    5, II
Micronesian Status Negotiations, Office for       32, XXVII
Mine Safety and Health Administration             30, I
Minerals Management Service                       30, II
Mines, Bureau of                                  30, VI
Minority Business Development Agency              15, XIV
Miscellaneous Agencies                            1, IV
Monetary Offices                                  31, I
Morris K. Udall Scholarship and Excellence in     36, XVI
     National Environmental Policy Foundation
National Aeronautics and Space Administration     5, LIX; 14, V
  Federal Acquisition Regulation                  48, 18
National Agricultural Library                     7, XLI
National Agricultural Statistics Service          7, XXXVI
National and Community Service, Corporation for   45, XII, XXV
National Archives and Records Administration      5, LXVI; 36, XII
  Information Security Oversight Office           32, XX
National Bureau of Standards                      15, II
National Capital Planning Commission              1, IV
National Commission for Employment Policy         1, IV
National Commission on Libraries and Information  45, XVII
     Science
National Council on Disability                    34, XII
National Counterintelligence Center               32, XVIII
National Credit Union Administration              12, VII
National Crime Prevention and Privacy Compact     28, IX
     Council
National Drug Control Policy, Office of           21, III
National Foundation on the Arts and the           45, XI
     Humanities
National Highway Traffic Safety Administration    23, II, III; 49, V
National Imagery and Mapping Agency               32, I
National Indian Gaming Commission                 25, III
National Institute for Literacy                   34, XI
National Institute of Standards and Technology    15, II
National Labor Relations Board                    5, LXI; 29, I
National Marine Fisheries Service                 50, II, IV, VI
National Mediation Board                          29, X
National Oceanic and Atmospheric Administration   15, IX; 50, II, III, IV, 
                                                  VI
National Park Service                             36, I
National Railroad Adjustment Board                29, III
National Railroad Passenger Corporation (AMTRAK)  49, VII
National Science Foundation                       5, XLIII; 45, VI
  Federal Acquisition Regulation                  48, 25
National Security Council                         32, XXI
National Security Council and Office of Science   47, II
     and Technology Policy
National Telecommunications and Information       15, XXIII; 47, III
     Administration
National Transportation Safety Board              49, VIII
National Weather Service                          15, IX
Natural Resources Conservation Service            7, VI
Navajo and Hopi Indian Relocation, Office of      25, IV
Navy Department                                   32, VI
  Federal Acquisition Regulation                  48, 52
Neighborhood Reinvestment Corporation             24, XXV
Northeast Dairy Compact Commission                7, XIII
Northeast Interstate Low-Level Radioactive Waste  10, XVIII
     Commission
Nuclear Regulatory Commission                     5, XLVIII; 10, I
  Federal Acquisition Regulation                  48, 20
Occupational Safety and Health Administration     29, XVII
Occupational Safety and Health Review Commission  29, XX
Offices of Independent Counsel                    28, VI
Oklahoma City National Memorial Trust             36, XV
Operations Office                                 7, XXVIII
Overseas Private Investment Corporation           5, XXXIII; 22, VII
Panama Canal Commission                           48, 35

[[Page 1292]]

Panama Canal Regulations                          35, I
Patent and Trademark Office, United States        37, I
Payment From a Non-Federal Source for Travel      41, 304
     Expenses
Payment of Expenses Connected With the Death of   41, 303
     Certain Employees
Peace Corps                                       22, III
Pennsylvania Avenue Development Corporation       36, IX
Pension and Welfare Benefits Administration       29, XXV
Pension Benefit Guaranty Corporation              29, XL
Personnel Management, Office of                   5, I, XXXV; 45, VIII
  Federal Acquisition Regulation                  48, 17
  Federal Employees Group Life Insurance Federal  48, 21
       Acquisition Regulation
  Federal Employees Health Benefits Acquisition   48, 16
       Regulation
Postal Rate Commission                            5, XLVI; 39, III
Postal Service, United States                     5, LX; 39, I
Postsecondary Education, Office of                34, VI
President's Commission on White House             1, IV
     Fellowships
Presidential Documents                            3
Presidio Trust                                    36, X
Prisons, Bureau of                                28, V
Procurement and Property Management, Office of    7, XXXII
Productivity, Technology and Innovation,          37, IV
     Assistant Secretary
Public Contracts, Department of Labor             41, 50
Public and Indian Housing, Office of Assistant    24, IX
     Secretary for
Public Health Service                             42, I
Railroad Retirement Board                         20, II
Reclamation, Bureau of                            43, I
Refugee Resettlement, Office of                   45, IV
Regional Action Planning Commissions              13, V
Relocation Allowances                             41, 302
Research and Special Programs Administration      49, I
Rural Business-Cooperative Service                7, XVIII, XLII
Rural Development Administration                  7, XLII
Rural Housing Service                             7, XVIII, XXXV
Rural Telephone Bank                              7, XVI
Rural Utilities Service                           7, XVII, XVIII, XLII
Saint Lawrence Seaway Development Corporation     33, IV
Science and Technology Policy, Office of          32, XXIV
Science and Technology Policy, Office of, and     47, II
     National Security Council
Secret Service                                    31, IV
Securities and Exchange Commission                17, II
Selective Service System                          32, XVI
Small Business Administration                     13, I
Smithsonian Institution                           36, V
Social Security Administration                    20, III; 48, 23
Soldiers' and Airmen's Home, United States        5, XI
Special Counsel, Office of                        5, VIII
Special Education and Rehabilitative Services,    34, III
     Office of
State Department                                  22, I; 28, XI
  Federal Acquisition Regulation                  48, 6
Surface Mining and Reclamation Appeals, Board of  30, III
Surface Mining Reclamation and Enforcement,       30, VII
     Office of
Surface Transportation Board                      49, X
Susquehanna River Basin Commission                18, VIII
Technology Administration                         15, XI
Technology Policy, Assistant Secretary for        37, IV
Technology, Under Secretary for                   37, V
Tennessee Valley Authority                        5, LXIX; 18, XIII
Thrift Supervision Office, Department of the      12, V
     Treasury
Trade Representative, United States, Office of    15, XX
Transportation, Department of                     5, L
  Coast Guard                                     33, I; 46, I; 49, IV
  Coast Guard (Great Lakes Pilotage)              46, III
  Commercial Space Transportation                 14, III

[[Page 1293]]

  Contract Appeals, Board of                      48, 63
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 12
  Federal Aviation Administration                 14, I
  Federal Highway Administration                  23, I, II
  Federal Motor Carrier Safety Administration     49, III
  Federal Railroad Administration                 49, II
  Federal Transit Administration                  49, VI
  Maritime Administration                         46, II
  National Highway Traffic Safety Administration  23, II, III; 49, V
  Research and Special Programs Administration    49, I
  Saint Lawrence Seaway Development Corporation   33, IV
  Secretary of Transportation, Office of          14, II; 49, Subtitle A
  Surface Transportation Board                    49, X
  Transportation Security Administration          49, XII
  Transportation Statistics Bureau                49, XI
Transportation, Office of                         7, XXXIII
Transportation Security Administration            49, XII
Transportation Statistics Bureau                  49, XI
Travel Allowances, Temporary Duty (TDY)           41, 301
Treasury Department                               5, XXI; 12, XV; 17, IV; 
                                                  31, IX
  Alcohol, Tobacco and Firearms, Bureau of        27, I
  Community Development Financial Institutions    12, XVIII
       Fund
  Comptroller of the Currency                     12, I
  Customs Service, United States                  19, I
  Engraving and Printing, Bureau of               31, VI
  Federal Acquisition Regulation                  48, 10
  Federal Law Enforcement Training Center         31, VII
  Fiscal Service                                  31, II
  Foreign Assets Control, Office of               31, V
  Internal Revenue Service                        26, I
  International Investment, Office of             31, VIII
  Monetary Offices                                31, I
  Secret Service                                  31, IV
  Secretary of the Treasury, Office of            31, Subtitle A
  Thrift Supervision, Office of                   12, V
Truman, Harry S. Scholarship Foundation           45, XVIII
United States and Canada, International Joint     22, IV
     Commission
United States and Mexico, International Boundary  22, XI
     and Water Commission, United States Section
Utah Reclamation Mitigation and Conservation      43, III
     Commission
Veterans Affairs Department                       38, I
  Federal Acquisition Regulation                  48, 8
Veterans' Employment and Training Service,        41, 61; 20, IX
     Office of the Assistant Secretary for
Vice President of the United States, Office of    32, XXVIII
Vocational and Adult Education, Office of         34, IV
Wage and Hour Division                            29, V
Water Resources Council                           18, VI
Workers' Compensation Programs, Office of         20, I
World Agricultural Outlook Board                  7, XXXVIII

[[Page 1295]]

                                     

                                     



                           Redesignation Table



The Bureau of Alcohol, Tobaccco and Firearms redesignated the 
regulations in 27 CFR part 70 at 55 FR 47606, Nov. 14, 1990.
For the convenience of the user, the following table shows the 
relationship of the old CFR section numbers to the new section numbers 
in part 70.

------------------------------------------------------------------------
                   Old section No.                      New section No.
------------------------------------------------------------------------
70.25................................................              70.30
70.26................................................              70.31
70.27................................................              70.32
70.28................................................              70.33
70.35................................................              70.40
70.36................................................              70.41
70.41................................................             70.461
70.42................................................             70.462
70.51................................................              70.65
70.61................................................              70.42
70.62................................................              70.82
70.63................................................              70.71
70.64................................................              70.72
70.65................................................              70.73
70.66................................................              70.61
70.67................................................              70.62
70.68................................................              70.64
70.70................................................             70.121
70.71................................................             70.122
70.72................................................             70.123
70.73................................................             70.124
70.74................................................             70.125
70.75................................................             70.126
70.78................................................             70.131
70.79................................................             70.221
70.80................................................             70.222
70.81................................................             70.223
70.82................................................             70.261
70.83................................................             70.262
70.84................................................             70.263
70.85................................................             70.264
70.86................................................             70.265
70.87................................................             70.266
70.88................................................             70.251
70.89................................................             70.252
70.100...............................................             70.101
70.101...............................................             70.102
70.102...............................................             70.103
70.103...............................................             70.111
70.104...............................................             70.112
70.105...............................................             70.113
70.106...............................................             70.114
70.107...............................................             70.311
70.108...............................................              70.75
70.109...............................................             70.321
70.111...............................................             70.411
70.112...............................................             70.412
70.113...............................................             70.413
70.114...............................................             70.414
70.115...............................................             70.415
70.116...............................................             70.416
70.117...............................................             70.417
70.118...............................................             70.418
70.119...............................................             70.419
70.120...............................................             70.420
70.131...............................................             70.431
70.132...............................................             70.432
70.133...............................................             70.433
70.134...............................................             70.434
70.135...............................................             70.435
70.136...............................................             70.436
70.137...............................................             70.437
70.138...............................................             70.438
70.141...............................................             70.441
70.142...............................................             70.442
70.143...............................................             70.443
70.144...............................................             70.444
70.145...............................................             70.445
70.146...............................................             70.446
70.147...............................................             70.447
70.148...............................................             70.448
70.149...............................................             70.449
70.150...............................................             70.450
70.151(a)............................................             70.482
70.151(b)............................................             70.483
70.151(c)............................................             70.484
70.152...............................................             70.471
------------------------------------------------------------------------


[[Page 1297]]



List of CFR Sections Affected



All changes in this volume of the Code of Federal Regulations which were 
made by documents published in the Federal Register since January 1, 
1986, are enumerated in the following list. Entries indicate the nature 
of the changes effected. Page numbers refer to Federal Register pages. 
The user should consult the entries for chapters and parts as well as 
sections for revisions.
For the period before January 1, 1973, see the ``List of CFR Sections 
Affected, 1949-1963, 1964-1972 and 1973-1985'' published in seven 
separate volumes.

                                  1986

27 CFR
                                                                   51 FR
                                                                    Page
Chapter I
4.25a  (e)(3)(iii) and (iv) amended; (e)(3)(v) removed..............3774
4.32  Technical correction..........................................4338
    (e) added......................................................34710
4.34  (b)(3) amended...............................................20482
4.39  (i) revised..................................................20482
    (i)(2) introductory text corrected.............................21547
4.40  Nomenclature change..........................................39525
4.50  (a) and (b) amended..........................................39525
5  Authority citation revised...............................16170, 21748
5.11  Amended......................................................21748
5.32  Technical correction..........................................4338
    (b)(7), (8), and (9) redesignated as (b)(8), (9), and (10); 
new (b)(7) added...................................................34710
5.33  (b)(2) revised; (b)(3), (4), and (5) redesignated as (b)(4), 
        (5), and (6); new (b)(3) added.............................34710
5.37  (a) revised..................................................36394
    Revised; eff. 10-10-88.........................................36394
5.47a  (a) revised.................................................16170
5.51  (a), (b), and (d) amended....................................39525
5.53  (b) added....................................................16170
5.55  (a) and (b) amended..........................................39525
5.63  (c) revised..................................................36394
    (c) revised; eff. 10-10-88.....................................36394
7  Cross References removed; eff. 5-1-86............................7673
    Authority citation revised......................................8492
7.4  Added; eff. 5-1-86.............................................7673
7.22  Technical correction..........................................4338
    (b)(6) added...................................................34710
7.25  (a) revised; OMB number; eff. 5-1-86..........................8492
7.31  Nomenclature change..........................................39525
7.41  Nomenclature change..........................................39525
9.50  (c)(23) and (24) revised; (c)(25), (26), and (27) added........750
9.53  (c) (3) through (5) and (21) through (24) revised; (c) (25), 
        (26), and (40) removed; (c) (27) through (39) redesignated 
        as (c) (25) through (37); new (c)(25) revised; new (c) 
        (38) through (40) added....................................30354
9.55  Added........................................................36400
9.70  (b), (c) introductory text, (1), and (11) through (14) 
        revised; (c) (15) and (18) through (23) redesignated as 
        (c) (19) and (23) through (28); new (c) (15) through (18) 
        added......................................................30354
9.107  Added........................................................5324
9.108  Added.......................................................24144
    (c)(2) (xxx), (xxxi), and (xxxii) correctly redesignated as 
(c)(2) (xx), (xxi), and (xxii).....................................25366
9.111  Added.......................................................11913
9.112  Added.......................................................34205
9.113  Added.......................................................36398
19  Authority citation revised..............................13216, 21748
19.11  Amended.....................................................21748
19.36  (a) amended.................................................21748
19.42  (b) and (c) revised.........................................28077
19.46  Correctly designated..........................................598
19.381  (e) amended................................................21748
19.386  Revised; eff. 10-10-88.....................................36395
19.395  (b) revised................................................36395

[[Page 1298]]

    (b) revised; eff. 10-10-88.....................................36395
19.531  Introductory text republished; (g) and (h) amended; (i) 
        added......................................................13216
19.534  Added......................................................13216
19.633  Nomenclature change; (b) amended...........................39525
19.643  Amended....................................................36395
    Revised; eff. 10-10-88.........................................36395
19.750  Revised; eff. 10-10-88.....................................36395
    Effective date corrected to 10-10-88...........................37271
19.778  Revised.............................................28077, 40026
25  Added; eff. 5-1-86..............................................7673
25.3  (c) and (f) corrected; eff. 5-1-86...........................10540
25.5  (f) corrected; eff. 5-1-86...................................10540
25.73  (b)(3) corrected; eff. 5-1-86...............................10540
25.81  (b)(2) corrected.............................................9190
25.122  Corrected...................................................9190
25.125  Corrected...................................................9190
25.141  (b) revised; OMB number; eff. 5-1-86........................8492
25.142  (b) revised; OMB number; eff. 5-1-86........................8492
25.143  (b) revised; OMB number; eff. 5-1-86........................8492
25.221  (b) corrected...............................................9190
25.286  (a) corrected...............................................9190
25.292  (b)(5) corrected............................................9190
72.21  Revised (temporary).........................................39613
72.22  (a) (1), (4), and (5) and (b) amended; (a)(6) revised 
        (temporary)................................................39613
72.61--72.69 (Subpart F)  Heading revised (temporary)..............39613
72.61  Existing text designated as (a) and heading added; (b) 
        added......................................................39613
72.69  Added.......................................................39613
178  Authority citation revised....................................39614
178.1  Revised.....................................................39614
178.2  Revised.....................................................39614
178.11  Amended....................................................39615
178.21  (c) revised................................................39616
178.22  Revised....................................................39616
178.23  Revised....................................................39616
178.24  Revised....................................................39617
178.25  Revised....................................................39617
178.26  Revised....................................................39617
178.29  Revised....................................................39617
178.32  Revised....................................................39617
178.36  Added......................................................39618
178.41  (a) and (b) revised........................................39618
178.42  Revised....................................................39618
178.44  Revised....................................................39618
178.45  Revised....................................................39619
178.47  (a) and (b) introductory text, (1), and (2) revised; 
        (b)(6) removed.............................................39619
178.49  Revised....................................................39619
178.73  Revised....................................................39619
178.74  Revised....................................................39619
178.75  Removed; new 178.75 redesignated from 178.79...............39619
178.76  Removed; new 178.76 redesignated from 178.80...............39619
178.77  Removed; new 178.77 redesignated from 178.81 and revised 
                                                                   39619
178.78  Removed; new 178.78 redesignated from 178.82...............39619
178.79  Redesignated as 178.75.....................................39619
178.80  Redesignated as 178.76.....................................39619
178.81  Redesignated as 178.77 and revised.........................39619
178.82  Redesignated as 178.78.....................................39619
178.92  Revised....................................................39619
178.93  Revised....................................................39620
178.94  Revised....................................................39620
178.95  Revised....................................................39620
178.96  (c) revised; (d) removed...................................39620
178.98  Revised....................................................39620
178.99  Revised....................................................39621
178.100  Revised...................................................39621
178.111  Revised...................................................39621
178.112  Revised...................................................39622
178.113  Revised...................................................39622
178.114  Revised...................................................39623
178.115  (b) revised...............................................39623
178.116  Revised...................................................39623
178.121  (a), (b), and (c) revised.................................39624
178.122  Revised...................................................39624
178.123  Revised...................................................39624
178.124  (a) through (f) and (i) revised...........................39625
178.125  Revised...................................................39626
178.125a  Added....................................................39627
178.127  Revised...................................................39628
178.128  Revised...................................................39628
178.141  (d) revised...............................................39628
178.142  Revised...................................................39628
178.144  Revised...................................................39628
178.145  Revised...................................................39629
178.147  Revised...................................................39629
178.148  Revised...................................................39629
178.149  Revised...................................................39629
178.171  Revised...................................................39630
179.11  Amended....................................................39630
179.21  (c) revised................................................39630
179.26  Added......................................................39630

[[Page 1299]]

179.61  Revised....................................................39631
179.62  Revised....................................................39631
179.63  Revised....................................................39631
179.64  Revised....................................................39631
179.84  Amended....................................................39632
179.85  Revised....................................................39632
179.86  Revised....................................................39632
179.90  (a) and (b) revised........................................39632
179.92  Revised....................................................39632
179.102  Amended...................................................39632
179.104  Amended...................................................39633
179.105  Undesignated center heading and section added.............39633
179.112  (a) revised; (d) added....................................39633
179.113  Revised...................................................39634
179.119  Revised...................................................39634
179.122  Undesignated center heading and (a) revised...............39634
179.161  Revised...................................................39634
179.162  Revised...................................................39634
179.171  Revised...................................................39634
179.172  Revised...................................................39634
179.182  Revised...................................................39634
179.193  Revised...................................................39634

                                  1987

27 CFR
                                                                   52 FR
                                                                    Page
Chapter I
1  Authority citation revised.......................................5955
1.25  Nomenclature change...........................................5955
1.59  (c) amended...................................................5955
4.3  (c) revised....................................................5955
4.38  (f) amended...................................................5955
5.3  (c) revised....................................................5956
5.22  (b)(1)(iii) amended; (b) (4) and (5) revised.................41422
5.27  (d) revised..................................................41423
5.36  (a) (3) and (4) redesignated as (a) (4) and (5); new (a)(3) 
        added......................................................41423
    (a)(6) added...................................................42101
5.38  (d) amended...................................................5956
7.3  (c) revised....................................................5956
7.24  (f)(2) amended................................................5956
9.27  (b) revised...................................................5956
9.29  (b) revised...................................................5956
9.32  (c) (5) and (6) revised.......................................5956
9.34  (b) and (c) revised...........................................5956
9.35  (b)(3) revised................................................5956
9.36  (c) revised...................................................5956
9.37  (c) revised...................................................5957
9.43  (c) revised...................................................5957
9.48  (b) and (c) revised...........................................5957
    (c) revised....................................................23652
9.49  (c)(2)(xv) revised............................................5958
9.50  (c)(15) revised...............................................5958
9.56  Added.........................................................2945
9.60  (c) revised...................................................5958
9.61  (c)(12) revised; (c) (13) through (15) redesignated as (c) 
        (17) through (19); new (c) (13) through (16) added.........23651
9.65  (b) and (c) revised...........................................5958
9.66  (c) (1), (7), (8), (9), and (13) revised......................5959
9.67  (b)(13) added.................................................5959
9.68  (c) revised...................................................5959
9.71  (c) revised...................................................5959
9.74  (c)(43) revised...............................................5959
    Correctly designated...........................................10224
9.78  (c)(2) revised................................................5959
9.79  (c) revised...................................................5959
9.80  (b) and (c)(4) revised........................................5959
9.81  (b) revised...................................................5959
9.91  (c) revised...................................................5960
9.92  (c)(2) revised................................................5960
9.94  (c) revised...................................................5960
9.98  (b)(17) removed; (b) (18) through (36) redesignated as (b) 
        (17) through (35); (b) (36) through (38) added; (c) (37) 
        and (72) revised............................................5960
9.102  (c)(1) revised...............................................5960
9.105  (b)(14) removed; (b) (15) through (32) redesignated as (b) 
        (14) through (31); (b) (32) through (40) added..............5960
9.109  Added.......................................................13082
9.110  Added.......................................................37137
9.114  Added.......................................................21515
9.115  Added.......................................................32785
9.116  Added.......................................................22304
9.118  Added.......................................................46591
9.120  Added.......................................................44105
19.44  Amended.....................................................19313
19.346  (b) (1) and (2) revised; (b)(3) added......................41423
19.519  Amended....................................................19313
19.524  (c)(1) amended.............................................19313
    (c)(2) and (d) heading revised.................................47559
19.525  (a) amended................................................19313
19.645  (b) and (c) redesignated as (c) and (d); new (b) added.....41423
    (c) and (d) amended; (e) added.................................42101
18  Authority citation revised......................................5960
18.16  (c) revised..................................................5960
19.523  (a) revised; OMB number......................................668
19.524  (a)(2) revised...............................................532
19.1005  (b) amended................................................5961
20  Authority citation revised......................................5961

[[Page 1300]]

20.21  (c) revised..................................................5961
20.191  Amended.....................................................5961
21  Authority citation revised......................................5961
21.2  (c) revised...................................................5961
22  Authority citation revised......................................5961
22.21  (c) revised..................................................5961
25.117  (a) and (b)(1) amended; (c) removed; nomenclature change 
                                                                   19313
25.118  Nomenclature change........................................19313
25.119  Heading and (c) amended; nomenclature change...............19313
25.121  Amended; nomenclature change...............................19313
25.122  Nomenclature change........................................19313
25.125  Nomenclature change........................................19313
25.126  Nomenclature change........................................19313
25.131  Revised....................................................19313
25.132  (b) amended................................................19313
25.134  Amended....................................................19313
25.163  Revised....................................................19314
25.164  (d) revised; OMB number......................................668
    (e)(1) revised.................................................19314
25.165  (a)(2) revised...............................................532
    (c)(1) amended.................................................19314
    (c)(2) and (d) heading revised.................................47560
25.166  (b) amended................................................19314
25.173  (b) amended................................................19314
25.175  (b) (1), (2), and (3) amended..............................19314
25.283  (d) amended................................................19314
25.285  (a) amended................................................19314
47  Authority citation revised......................................5961
47.35  (c) revised..................................................5961
47.57  Revised.....................................................34381
    (d) added; OMB number..........................................48096
55  Authority citation revised......................................5961
55.21  (c) revised..................................................5961
70  Authority citation revised.....................................5961,
19314
70.1  Revised......................................................19314
70.23  (b)(2) amended...............................................5961
70.41  Nomenclature change..........................................5961
70.42  Nomenclature change..........................................5961
70.61--70.109 (Subpart E)  Added...................................19314
70.111--70.152 (Subpart F)  Added..................................19325
71  Authority citation revised......................................5961
71.23  (e) amended..................................................5961
71.24  (c)(3), (g)(1), and (i)(1)(iii) amended......................5961
71.25  (g)(1)(iv), (2), and (4) removed; (g)(1)(i) revised; (g)(3) 
        redesignated as (g)(2) and revised..........................5961
    (g)(3) correctly designated.....................................7370
71.26  (a), (d), and (g) amended....................................5961
71.21--71.27 (Subpart C)  Appendix A amended........................5962
71.41  (a)(1) and (c) amended.......................................5962
71.42  (c)(2) revised...............................................5962
72  Authority citation revised......................................5962
72.2  (c) revised...................................................5962
170  Authority citation revised.....................................5962
170.22  (c) revised.................................................5962
170.77  (a) amended................................................19334
170.91  Amended....................................................19334
170.302  (c) revised................................................5962
170.305  (a) amended...............................................19334
170.305a  (a), (b), and (c) amended................................19334
170.306  (b) amended...............................................19334
178  Authority citation revised.....................................5962
178.11  Amended (temporary).........................................2049
178.21  (c) revised.................................................5962
178.37  Added (temporary)...........................................2049
178.41  (b) revised (temporary).....................................2049
178.42  Revised (temporary).........................................2049
178.92  Existing text designated as (a); (a) heading and new (b) 
        added (temporary)...........................................2050
178.99  (a), (b) and (c) headings added; (d) and (e) added 
        (temporary).................................................2050
    Corrected.......................................................7132
178.100  (c) revised (temporary)....................................2050
178.101  Revised (temporary)........................................2050
178.122  (b) and (d) revised (temporary)............................2050
178.123  (b) and (d) revised (temporary)............................2051
178.125  (a) and (b) revised; (c) through (h) redesignated as (d) 
        through (i); new (c) added (temporary)......................2051
    New (e), (f), (g), and (h) amended (temporary)..................2052
178.125a  (a) amended (temporary)...................................2052
178.142  (b) revised (temporary)....................................2052
178.148  Heading and text amended (temporary).......................2052
178.149  Redesignated as 178.150; new 178.149 added (temporary).....2052
178.150  Redesignated from 178.149 (temporary)......................2052
179.34  (a) designation and heading and (b) removed; amended; 
        nomenclature change........................................19334
179.35  Nomenclature change........................................19334

[[Page 1301]]

179.36  Nomenclature change........................................19334
179.37  Amended....................................................19334
179.38  Amended....................................................19334
179.42  Amended; nomenclature change...............................19334
179.43  Amended....................................................19334
179.46  Amended; nomenclature change...............................19334
179.47  Amended; nomenclature change...............................19334
179.50  Amended; nomenclature change...............................19334
179.171  Amended...................................................19334
179.172  Amended...................................................19334
194  Authority citation revised.....................................5962
194.27  Amended; nomenclature change...............................19335
194.41  (c) revised.................................................5962
194.94  Amended....................................................19335
194.104  Amended...................................................19335
194.104a  Revised..................................................19335
194.105  Amended...................................................19335
194.106--194.110  Undesignated center heading amended..............19335
194.106  Amended; nomenclature change..............................19335
194.106a  Amended..................................................19335
194.106b  Amended..................................................19335
194.106d  Removed..................................................19335
194.107  Heading and text nomenclature change......................19335
194.109  Amended...................................................19335
194.111  Amended...................................................19335
194.121  Amended...................................................19335
194.121a  Amended..................................................19335
194.123  Amended...................................................19335
194.124  Amended; nomenclature change..............................19335
194.126  Amended; nomenclature change..............................19335
194.127  Amended...................................................19335
194.132  Amended...................................................19335
194.133  Amended...................................................19335
194.134  Amended; nomenclature change..............................19335
194.135  Amended...................................................19335
194.136  Amended; nomenclature change..............................19335
194.137  Amended; nomenclature change..............................19335
194.139  Amended; nomenclature change..............................19335
194.151  Heading and (a) revised; (b) amended; nomenclature change
                                                                   19336
194.152  Amended...................................................19336
194.169  Undesignated text following (d) revised...................19336
194.201  Revised...................................................19336
197.28  (a) and (b) amended; nomenclature change...................19336
197.29--197.31  Undesignated center heading amended................19336
197.29  Amended; nomenclature change...............................19336
197.29a  Amended; nomenclature change..............................19336
197.29b  Nomenclature change.......................................19336
197.29d  Removed...................................................19336
197.30  Nomenclature change........................................19336
197.31  Nomenclature change........................................19337
197.40  Nomenclature change........................................19336
197.40a  Nomenclature change.......................................19336
197.41  Amended....................................................19336
197.42  Amended; nomenclature change...............................19336
197.43  Amended; nomenclature change...............................19336
197.46  Amended....................................................19337
197.48  Amended....................................................19337
197.50  Amended....................................................19337
197.55  Revised....................................................19337
197.56  Amended....................................................19337
197.58  Revised....................................................19337
197.106  Amended...................................................19337
197.111  Revised...................................................19337

                                  1988

27 CFR
                                                                   53 FR
                                                                    Page
Chapter I
4.36  (b) (1) and (2) amended......................................27046
4.38  (b)(3) revised...............................................27046
9.52  (c) (13) and (14) removed; (c) (15) through (24) 
        redesignated as (c) (21) through (30); new (c) (13) 
        through (20) added.........................................17025
9.53  (c) (27) and (28) removed; (c) (29) through (40) 
        redesignated as (c) (35) through (46); new (c) (27) 
        through (34) added.........................................17025
9.119  Added........................................................2836
9.121  Added.......................................................29676
9.122  Added........................................................3747
9.127  Added; eff. 4-25-88..........................................9769
9.124  Added.......................................................48247
9.125  Added.......................................................51541
19  Authority citation revised.....................................17541
19.26--19.27  Undesignated center heading removed..................17541
19.26  Removed.....................................................17541
19.27  Removed.....................................................17541

[[Page 1302]]

19.49--19.54 (Subpart Ca)  Added...................................17541
19.63  Amended.....................................................17543
19.65  Amended.....................................................17543
19.67  (a) (1) and (2) introductory text revised...................17543
19.71  (a) amended.................................................17543
19.540  (a) and authority note revised.............................25156
19.906  Added......................................................17543
20  Authority citation revised..............................17543, 25156
20.2  Revised......................................................25156
20.38--20.40a (Subpart Ca)  Added..................................17544
20.161  (a) and authority note revised.............................25156
20.241a  Added.....................................................17545
22  Authority citation revised.....................................17545
22.37--22.40 (Subpart Ca)  Added...................................17545
22.171a  Added.....................................................17547
25  Authority citation revised.....................................17547
25.5  (b) amended (OMB numbers); eff 4-15-88........................8628
25.23  (b) (4) and (5) and (c) revised; (b)(6) added; eff. 4-15-88
                                                                    8628
25.24  (a) amended; eff. 4-15-88....................................8628
25.25  Added; eff. 4-15-88..........................................8628
25.111  Revised....................................................17547
25.111a  Added.....................................................17547
25.111b  Added.....................................................17547
25.112  Revised....................................................17548
25.117  Revised....................................................17548
25.118  Revised....................................................17548
25.119  Revised....................................................17548
25.120  Added......................................................17548
25.121--25.123  Undesignated center heading revised................17548
25.121  Revised....................................................17548
25.122  Revised....................................................17548
25.123  Revised....................................................17549
25.125--25.127  Undesignated center heading revised................17549
25.125  Revised....................................................17548
25.131  Revised....................................................17549
25.134  Revised....................................................17549
25.221  (a) revised; eff. 4-15-88...................................8629
25.225  Added; eff. 4-15-88.........................................8629
25.283  (a) heading revised; (c) and (d) redesignated as (d) and 
        (e); new (c) added; eff. 4-15-88............................8629
70.109  (a) (1) through (4) and (b) revised; (a) (5) through (7) 
        and flush text added.......................................17549
70.111  (a) amended................................................17549
70.112  (a) amended................................................17549
70.131  (a) amended................................................17549
70.133  (c) redesignated as (d); new (c) added.....................17549
70.151  (a)(1)(ii) revised.........................................17550
72.21  Revised; eff. 5-2-88........................................10489
72.22  (a) (1), (2), and (3) amended; (a)(6) and (b) revised; eff. 
        5-2-88.....................................................10489
72.61--72.69 (Subpart F)  Heading revised; eff. 5-2-88.............10489
72.61  (a) heading and (b) revised; eff. 5-2-88....................10489
72.69  Revised; eff. 5-2-88........................................10489
178.1  Revised; eff. 5-2-88........................................10490
178.2  Revised; eff. 5-2-88........................................10490
178.11  Amended; eff. 5-2-88.......................................10490
178.21  (c) revised; eff. 5-2-88...................................10492
178.22  Revised; eff. 5-2-88.......................................10492
178.23  Revised; eff. 5-2-88.......................................10492
178.24  Revised; eff. 5-2-88.......................................10493
178.25  Revised; eff. 5-2-88.......................................10493
178.26  Revised; eff. 5-2-88.......................................10493
178.29  Revised; eff. 5-2-88.......................................10493
178.32  Revised; eff. 5-2-88.......................................10493
178.33  Revised; eff. 5-2-88.......................................10494
178.36  Revised; eff. 5-2-88.......................................10494
178.37  Revised; eff. 5-2-88.......................................10494
178.38  Added; eff. 5-2-88.........................................10494
178.41  (a) and (b) revised; eff. 5-2-88...........................10494
178.42  Revised; eff. 5-2-88.......................................10494
178.43  Revised; eff. 5-2-88.......................................10494
178.44  Revised; eff. 5-2-88.......................................10495
178.45  Revised; eff. 5-2-88.......................................10495
178.47  (a), (b) (1) and (2), and (c) revised; eff. 5-2-88.........10495
178.49  Revised; eff. 5-2-88.......................................10495
178.71  Amended; eff. 5-2-88.......................................10495
178.73  Revised; eff. 5-2-88.......................................10495
178.74  Revised; eff. 5-2-88.......................................10495
178.75  Amended; eff. 5-2-88.......................................10496
178.76  Amended; eff. 5-2-88.......................................10496
178.77  Revised; eff. 5-2-88.......................................10496
178.92  Revised; eff. 5-2-88.......................................10496
178.93  Revised; eff. 5-2-88.......................................10496
178.94  Revised; eff. 5-2-88.......................................10496
178.95  Revised; eff. 5-2-88.......................................10497
178.96  (a) and (c) revised; eff. 5-2-88...........................10497
178.98  Revised; eff. 5-2-88.......................................10497
178.99  Revised; eff. 5-2-88.......................................10497
178.100  Revised; eff. 5-2-88......................................10498
178.101  Revised; eff. 5-2-88......................................10498
178.111  Revised; eff. 5-2-88......................................10498
178.112  Revised; eff. 5-2-88......................................10498

[[Page 1303]]

178.113  Revised; eff. 5-2-88......................................10499
178.113a  Added; eff. 5-2-88.......................................10499
178.114  Revised; eff. 5-2-88......................................10500
178.115  (b) revised; eff. 5-2-88..................................10500
178.116  Revised; eff. 5-2-88......................................10500
178.121  (a), (b), and (c) revised; eff. 5-2-88....................10501
178.122  Revised; eff. 5-2-88......................................10501
178.123  Revised; eff. 5-2-88......................................10501
178.124  (a) through (f) and (i) revised; eff. 5-2-88..............10502
178.124a  Added....................................................24687
178.125  Revised; eff. 5-2-88......................................10503
    (e) amended....................................................24687
178.125a  Added; eff. 5-2-88.......................................10504
178.126a  Amended; eff. 5-2-88.....................................10505
178.127  Revised; eff. 5-2-88......................................10505
178.128  Revised; eff. 5-2-88......................................10505
178.129  (b) revised...............................................24687
178.141  (d) revised; eff. 5-2-88..................................10506
178.142  Revised; eff. 5-2-88......................................10505
178.144  Revised; eff. 5-2-88......................................10506
178.145  Revised; eff. 5-2-88......................................10506
178.147  Revised; eff. 5-2-88......................................10507
178.148  Revised; eff. 5-2-88......................................10507
178.149  Revised; eff. 5-2-88......................................10507
178.150  Revised; eff. 5-2-88......................................10507
178.171  Revised; eff. 5-2-88......................................10507
179  Authority citation revised....................................17550
179.11  Revised; eff. 5-2-88.......................................10508
179.21  (c) revised; eff. 5-2-88...................................10508
179.26  Revised; eff. 5-2-88.......................................10508
179.31  Revised....................................................17550
179.32  Revised....................................................17550
179.32a  Added.....................................................17550
179.34  Revised....................................................17551
179.35  Revised....................................................17551
179.38  Amended....................................................17551
179.39  Amended....................................................17551
179.61  Revised; eff. 5-2-88.......................................10508
179.62  Revised; eff. 5-2-88.......................................10508
179.63  Revised; eff. 5-2-88.......................................10509
179.64  Revised; eff. 5-2-88.......................................10509
179.68  Amended....................................................17551
179.84  Amended; eff. 5-2-88.......................................10509
179.85  Revised; eff. 5-2-88.......................................10509
179.86  Revised; eff. 5-2-88.......................................10509
179.88  (a) revised; (b) amended...................................17551
179.90  (a) and (b) revised; eff. 5-2-88...........................10510
179.92  Revised; eff. 5-2-88.......................................10510
179.102  Amended; eff. 5-2-88......................................10510
179.104  Amended; eff. 5-2-88......................................10510
179.105  Undesignated center heading and section revised; eff. 5-
        2-88.......................................................10510
179.112  (a) and (c) revised; eff. 5-2-88..........................10511
179.113  Revised; eff. 5-2-88......................................10511
179.119  Revised; eff. 5-2-88......................................10511
179.122  Undesignated center heading and (a) revised; eff. 5-2-88 
                                                                   10511
179.161  Revised; eff. 5-2-88......................................10511
179.162  Revised; eff. 5-2-88......................................10511
179.171  Revised; eff. 5-2-88......................................10511
179.172  Revised; eff. 5-2-88......................................10512
179.182  Revised; eff. 5-2-88......................................10512
179.193  Revised; eff. 5-2-88......................................10512
194  Authority citation revised....................................17552
194.1  Revised.....................................................17552
194.21  Amended....................................................17552
194.23  (c)(3) revised.............................................17552
194.25  (c)(2) revised.............................................17552
194.27  Revised....................................................17552
194.29  (b) revised................................................17552
194.101  Revised...................................................17552
194.103  Existing text designated as (a); (a) heading and (b) 
        added......................................................17552
194.106  Revised...................................................17552
194.106a  Revised..................................................17553
194.106b  Removed..................................................17553
194.106c  Removed..................................................17553
194.151  (a) amended...............................................17553
194.187a  Added....................................................17553
194.204  Removed...................................................17553
194.205  Removed...................................................17553
197  Authority citation revised....................................17553
197.25  Revised....................................................17553
197.25a  Added.....................................................17553
197.27  Revised....................................................17553
197.28  Revised....................................................17554
197.29  Revised....................................................17554
197.29a  Revised...................................................17554
197.29b  Removed...................................................17554
197.29c  Removed...................................................17554
197.40a  Amended...................................................17554
197.55  Removed....................................................17554
197.56  Removed....................................................17554
197.57--197.59  Undesignated center heading removed................17554
197.111  Revised...................................................17554

                                  1989

27 CFR
                                                                   54 FR
                                                                    Page
Chapter I
4.32  (f) added.....................................................7162
5.2  Amended........................................................7162
5.32  (d) added.....................................................7162
5.37  (b) revised..................................................47769

[[Page 1304]]

5.39  ATF Ruling 87-5 use-up period extended.......................29702
7.4  Amended........................................................7162
7.22  (c) added.....................................................7162
7.24  (d) amended...................................................3594
7.26  Existing text designated as (a); (b), (c), and (d) added......3594
7.29  (f) amended...................................................3594
7.54  (c) amended...................................................3594
9.117  Added........................................................4018
9.126  Added; eff. 4-27-89.........................................12606
16  Added (temporary)...............................................7162
19.49  (a)(1) amended; eff. 7-1-89.................................12609
19.386  (a) and (b) revised........................................47770
19.395  Concluding text amended; eff. 4-21-89......................11704
19.906  Existing text designated as (a); new (b) added; eff. 7-1-
        89.........................................................12609
20.38  (a) amended; (d) and (e) added; eff. in part 7-1-89.........12610
20.241  Amended....................................................12610
20.241a  Removed...................................................12610
22.37  (a) amended.................................................12610
22.171  (a) amended; parenthetical statement revised...............12610
22.171a  Removed...................................................12610
47.52  (c) amended.................................................13681
47.57  Revised.....................................................13681
47.61  Amended.....................................................13681
47.62  Amended.....................................................13681
55.11  Amended.....................................................53053
55.23  Revised.....................................................53054
55.46  (a) nomenclature change.....................................53054
55.49  (a) and (b) nomenclature change; (c) amended................53054
55.50  (a) and (b) nomenclature change.............................53054
55.54  (a) and (b) revised.........................................53054
55.55  Nomenclature change.........................................53054
55.56  Amended.....................................................53054
55.57  Nomenclature change.........................................53054
55.59  (b) amended.................................................53054
55.60  Nomenclature change.........................................53054
55.61  Amended.....................................................53054
55.76  (a) and (b) amended.........................................53054
55.104  (c) amended................................................53054
55.128  Revised....................................................53054
178.11  Amended....................................................53054
178.41  (b) and (c) nomenclature change............................53054
178.45  Nomenclature change........................................53054
178.47  (a) and (b) nomenclature change; (c) amended; (d) revised 
                                                                   53054
178.48  (a) and (b) nomenclature change............................53054
178.52  Revised....................................................53055
178.53  Amended....................................................53055
178.54  Nomenclature change........................................53054
178.56  (b) amended................................................53055
178.57  Amended....................................................53055
178.60  Nomenclature change........................................53054
178.95  Amended....................................................53055
178.127  Revised...................................................53055
194.72  Revised....................................................12610
194.101  (a)(1) corrected..........................................11866
194.111  Corrected; CFR correction.................................12443
194.183a  Added....................................................12610
194.187b  Added....................................................12611

                                  1990

27 CFR
                                                                   55 FR
                                                                    Page
Chapter I
4  Cross-references amended; eff. 11-14-90..........................5420
      Cross-references amended.....................................17967
4.10  Amended......................................................24988
4.21  (a)(1)(iii) concluding text designated as (a)(1)(iv); new 
        (a)(1)(iv), (d)(1)(ii), (e)(1)(ii), (f)(1)(ii), and 
        (h)(2)(ii) revised.........................................24988
4.24  (c)(2) and (3) revised; (c)(4) removed.......................17967
4.37  (b)(1) revised...............................................42713
4.73  (a) revised..................................................42713
5  Technical correction.............................................1912
5.2  Amended; eff. 11-14-90.........................................5421
5.23  (a)(2)(ii) revised; eff. 7-10-90..............................1064
    (a)(3)(iii) revised; eff. 7-10-90...............................1065
    Technical correction............................................1768
    (a)(3)(ii) revised.............................................49996
5.39  (c) revised; eff. 7-10-90.....................................1065
    Technical correction............................................1768
7.4  Amended; eff. 11-14-90.........................................5421
9.53  (c)(37) through (42) revised; (c)(43) and (44) removed; 
        (c)(45) and (46) redesignated as (c)(43) and (44)..........32402
9.70  (b) and (c)(10) through (26) revised; (c)(27) and (28) 
        removed....................................................32402
9.123  Added........................................................5844
9.129  Added.........................................................287
9.130  Added.......................................................47749
9.131  Added.......................................................47747
12  Added..........................................................17967
16  Added (final); eff. 11-14-90....................................5421
18.11  Amended.....................................................24989

[[Page 1305]]

19  Authority citation revised.....................................18061
19.3  Amended......................................................24989
19.11  Amended.....................................................18061
19.21  Undesignated center heading and section revised.............18061
19.26  Redesignated from 19.36 and revised.........................18062
    (a) and (b) corrected..........................................23634
19.34  Undesignted center heading and section added................18062
    (c) amended....................................................52736
19.35  Added.......................................................18062
19.36  Undesignated center heading removed; redesignated as 19.26 
        and revised; new 19.36 added...............................18062
19.37  Added.......................................................18063
19.38  Added.......................................................18063
19.42  (c) redesignated as (d); new (c) added......................18063
19.52  (a) amended.................................................47605
19.92  (a) revised.................................................18063
19.206  Added......................................................18063
19.241  (a) introductory text amended..............................24989
19.374  Revised....................................................18063
19.505  (c) added..................................................18064
19.519  Amended....................................................47605
19.520  Amended....................................................47605
19.682  (c) revised................................................18064
19.748  (a)(16) and (17) revised; (a)(18) added....................18064
19.761  Revised....................................................18064
19.762  Revised....................................................18064
19.763  Revised....................................................18064
19.764  Revised....................................................18064
19.765  Revised....................................................18065
19.770  (a)(6)(iv), (vi), and (vii) revised; (a)(6)(viii) added....18065
    (a)(6)(iv) corrected...........................................23635
19.780  Added......................................................18065
19.1010  (b) table amended (OMB numbers)...........................18065
24  Redesignated from part 240 and revised.........................24989
24.45  Amended.....................................................47605
24.276  Amended....................................................47605
24.270  Concluding text added......................................52737
24.278  Added......................................................52737
24.279  Added......................................................52737
24.301  (b) amended................................................52738
24.308  (d) added..................................................52738
24.309  (i) revised................................................52738
25.81  (b)(1) revised..............................................24989
25.121  Amended....................................................47605
25.152  (a) concluding text added..................................52738
25.168  Amended....................................................47605
25.173  (b) amended................................................47605
55.11  Amended......................................................3720
55.26  (a)(2) revised...............................................3721
55.105  (g) revised.................................................3721
55.122  (b)(4) and (5) and (c)(4) and (5) revised; (f) removed......3721
55.123  (b)(3) and (4), (c)(4) and (5), and (d)(2) and (3) 
        revised; (g) removed........................................3721
55.124  (b)(4) and (5) and (c)(4) and (5) revised; (g) removed......3721
55.125  (b)(3) and (f) removed; (c)(4) and (5) revised; (g) 
        redesignated as (f).........................................3722
55.127  Revised.....................................................3722
55.130  Removed.....................................................3722
55.141  (b) revised.................................................3722
55.201  (a) revised; (d) and (e) added..............................3722
55.202  (a) and (b) revised.........................................3722
55.206  (b) revised.................................................3722
55.211  (a)(5) added...............................................21863
55.221  Added.......................................................3722
55.222  Added.......................................................3723
55.223  Added.......................................................3723
55.224  Added.......................................................3723
70  Authority citation revised.....................................47605
70.1  (c) revised..................................................47608
70.11  Amended.....................................................47608
70.22  (b) amended.................................................47608
70.23  (b)(2) amended..............................................47608
70.25  Redesignated as 70.30.......................................47606
    Added..........................................................47608
70.26  Redesignated as 70.31.......................................47606
    Added..........................................................47608
70.27  Redesignated as 70.32.......................................47606
    Added..........................................................47609
70.28  Redesignated as 70.33.......................................47606
    Added..........................................................47610
70.29  Added.......................................................47610
70.30  Redesignated from 70.25.....................................47606
70.31  Redesignated from 70.26.....................................47606
70.32  Redesignated from 70.27.....................................47606
70.33  Redesignated from 70.28.....................................47606
70.34  Added.......................................................47610
70.35  Redesignated as 70.40.......................................47606
70.36  Redesignated as 70.41.......................................47606
70.40  Redesignated from 70.35.....................................47606
70.41--70.42  Undesignated center heading removed..................47611
70.41  Redesignated as 70.461; new 70.41 redesignated from 70.36 
                                                                   47606
70.42  Redesignated as 70.462; new 70.42 redesignated from 70.61 
                                                                   47606

[[Page 1306]]

    (a)(1), (b) and (c)(1) revised.................................47610
70.51  Redesignated as 70.65.......................................47606
    (Subpart D)  Heading removed...................................47611
70.51-70.333  (Subpart D) Heading redesignated from 70.61-70.109 
        (Subpart E) and revised....................................47611
70.51--70.52  Undesignated center heading and sections added.......47611
70.61--70.109 (Subpart E)  Heading redesignated as 70.51-70.333; 
        and Subpart D and revised..................................47611
70.61--70.62  Undesignated center heading revised..................47611
70.61  Redesignated as 70.42; new 70.61 redesignated from 70.66....47606
70.62  Redesignated as 70.82; new 70.62 redesignated from 70.67....47606
70.63  Redesignated as 70.71.......................................47606
    Added..........................................................47611
70.64  Redesignated as 70.72; new 70.64 redesignated from 70.68....47606
    Revised........................................................47611
70.65  Redesignated as 70.73; new 70.65 redesignated from 70.51....47606
70.66  Redesignated as 70.61.......................................47606
70.67  Redesignated as 70.62.......................................47606
70.68  Redesignated as 70.64.......................................47606
70.70--70.78  Undesignated center headings removed.................47613
70.70  Redesignated as 70.121......................................47606
70.71  Redesignated as 70.122; new 70.71 redesignated from 70.63 
                                                                   47606
    Revised........................................................47611
70.72  Redesignated as 70.123; new 70.72 redesignated from 70.64 
                                                                   47606
    Amended........................................................47612
70.73  Redesignated as 70.124; new 70.73 redesignated from 70.65 
                                                                   47606
    Revised........................................................47612
70.74  Redesignated as 70.125......................................47606
    Added..........................................................47612
70.75  Redesignated as 70.126; new 70.75 redesignated from 70.108 
                                                                   47606
    Revised........................................................47612
70.76  Added.......................................................47613
70.77  Added.......................................................47613
70.78  Undesignated center heading removed.........................47613
    Redesignated as 70.131.........................................47606
70.79--70.81  Undesignated center heading removed..................47613
70.79  Redesignated as 70.221......................................47606
70.80  Redesignated as 70.222......................................47606
70.81  Redesignated as 70.223......................................47606
    Undesignated center heading and section added..................47613
70.82--70.87  Undesignated center heading removed..................47613
70.82  Redesignated as 70.261; new 70.82 redesignated from 70.62 
                                                                   47606
    Revised........................................................47613
70.83  Redesignated as 70.262......................................47606
70.84  Redesignated as 70.263......................................47606
70.85  Redesignated as 70.264......................................47606
70.86  Redesignated as 70.265......................................47606
70.87  Redesignated as 70.266......................................47606
70.88--70.89  Undesignated center heading removed..................47613
70.88  Redesignated as 70.251......................................47606
70.89  Redesignated as 70.252......................................47606
70.90  (a) revised; (e)(1) amended.................................47613
70.91  Revised.....................................................47614
70.92  (a), (c) and (d)(2)(i) amended..............................47614
70.93  Revised.....................................................47614
70.94  Revised.....................................................47614
70.95  Amended.....................................................47614
70.96  (a)(1) revised; (a)(2), (3), (4) and (c) amended............47614
70.98  (a) amended.................................................47615
70.100  Redesignated as 70.101.....................................47606
    Added..........................................................47615
70.101  Redesignated as 70.102; new 70.101 redesignated from 
        70.100.....................................................47606
    Amended........................................................47615
70.102  Redesignated as 70.103; new 70.102 redesignated from 
        70.101.....................................................47606
70.103  Redesignated as 70.111; new 70.111 redesignated from 
        70.102.....................................................47606
70.104  Redesignated as 70.112.....................................47606
70.105  Redesignated as 70.113.....................................47606
70.106  Redesignated as 70.114.....................................47606
70.107  Undesignated center heading removed........................47615
    Redesignated as 70.311.........................................47606
70.108  Undesignated center heading removed........................47615

[[Page 1307]]

    Redesignated as 70.75..........................................47606
70.109  Undesignated center heading removed........................47615
    Redesignated as 70.321.........................................47606
70.111--70.152 (Subpart F)  Heading redesignated as 70.411-70.487 
        (Subpart E)................................................47653
70.111  (c)(10) and (11) amended...................................24989
    Redesignated as 70.411; new 70.111 redesignated from 70.103....47606
70.112  Redesignated as 70.412; new 70.112 redesignated from 
        70.104.....................................................47606
70.113  Redesignated as 70.413; new 70.113 redesignated from 
        70.105.....................................................47606
    (a) and (b) amended............................................47615
70.114  (d)(3) amended.............................................24989
    Redesignated as 70.414; new 70.114 redesignated from 70.106....47606
70.115  Redesignated as 70.415.....................................47606
70.116  Redesignated as 70.416.....................................47606
70.117  Redesignated as 70.417.....................................47606
70.118  Redesignated as 70.418.....................................47606
70.119  Redesignated as 70.419.....................................47606
70.120  Redesignated as 70.420.....................................47606
70.121  Redesignated from 70.70....................................47606
    Undesignated center heading added..............................47615
70.122  Redesignated from 70.71....................................47606
    Revised........................................................47615
70.123  Redesignated from 70.72....................................47606
    (a)(2) and (b)(1) amended; (b)(2) revised (OMB number).........47615
70.124  Redesignated from 70.73....................................47606
    Revised........................................................47616
70.125  Redesignated from 70.74....................................47606
    Revised........................................................47616
70.126  Redesignated from 70.75....................................47606
    Revised........................................................47616
70.127  Added......................................................47616
70.131  Redesignated as 70.431; new 70.131 redesignated from 70.78
                                                                   47606
    Undesignated center heading added..............................47616
70.132  Redesignated as 70.432.....................................47606
70.133  Redesignated as 70.433.....................................47606
70.134  Redesignated as 70.434.....................................47606
70.135  Redesignated as 70.435.....................................47606
70.136  Redesignated as 70.436.....................................47606
70.137  Redesignated as 70.437.....................................47606
70.138  Redesignated as 70.438.....................................47606
70.141--70.151  Undesignated center heading added..................47616
70.141  Redesignated as 70.441.....................................47606
    Added..........................................................47616
70.142  Redesignated as 70.442.....................................47606
    Added..........................................................47616
70.143  Redesignated as 70.443.....................................47606
    Added..........................................................47616
70.144  Redesignated as 70.444.....................................47606
    Added..........................................................47617
70.145  Redesignated as 70.445.....................................47606
    Added..........................................................47618
70.146  Redesignated as 70.446.....................................47606
    Added..........................................................47618
70.147  Redesignated as 70.447.....................................47606
    Added..........................................................47618
70.148  Redesignated as 70.448.....................................47606
    Added..........................................................47619
70.149  Redesignated as 70.449.....................................47606
    Added..........................................................47619
70.150  Redesignated as 70.450.....................................47606
    Added..........................................................47620
70.151  (a) through (c) redesignated as 70.482 through 70.484......47606
    Added..........................................................47622
70.152  Redesignated as 70.471.....................................47606
70.161--70.171  Undesignated center heading added..................47622
70.161  Added......................................................47622
70.162  Added......................................................47623
70.163  Added......................................................47624
70.164  Added......................................................47624
70.165  Added......................................................47625
70.166  Added......................................................47625
70.167  Added......................................................47625
70.168  Added......................................................47627
70.169  Added......................................................47627
70.170  Added......................................................47627
70.181--70.188  Undesignated center heading added..................47627
70.181  Added......................................................47627
70.182  Added......................................................47629
70.183  Added......................................................47631
70.184  Added......................................................47632
70.185  Added......................................................47632
70.186  Added......................................................47633
70.187  Added......................................................47633
70.188  Added......................................................47633
70.191--70.193  Undesignated center heading added..................47633
70.191  Added......................................................47633
70.192  Added......................................................47634
70.193  Added......................................................47634
70.201--70.213  Undesignated center heading added..................47634
70.201  Added......................................................47634
70.202  Added......................................................47634
70.203  Added......................................................47634

[[Page 1308]]

70.204  Added......................................................47635
70.205  Added......................................................47635
70.206  Added......................................................47637
70.207  Added......................................................47639
70.208  Added......................................................47640
70.209  Added......................................................47640
70.210  Added......................................................47640
70.211  Added......................................................47640
70.212  Added......................................................47641
70.213  Added......................................................47641
70.221-70.227  Undesignated center headings added..................47641
70.221  Redesignated from 70.79....................................47606
70.222  Redesignated from 70.80....................................47606
70.223  Redesignated from 70.81....................................47606
    (d) amended....................................................47641
70.224  Added......................................................47641
70.225  Added......................................................47642
70.226  Added......................................................47642
70.227  Added......................................................47642
70.231--70.234  Undesignated center heading added..................47642
70.231  Added......................................................47642
70.232  Added......................................................47644
70.233  Added......................................................47645
70.234  Added......................................................47645
70.241--70.245  Undesignated center heading added..................47646
70.241  Added......................................................47646
70.242  Added......................................................47647
70.243  Added......................................................47647
70.244  Added......................................................47647
70.245  Added......................................................47647
70.251  Redesignated from 70.88....................................47606
    Undesignated center heading added; (a)(2) and (b) amended......47648
70.252  Redesignated from 70.89....................................47606
70.253  Undesignated center heading and section added..............47648
70.261  Redesignated from 70.82....................................47606
70.262  Redesignated from 70.83....................................47606
    (c)(2) amended.................................................47648
70.263  Redesignated from 70.84....................................47606
70.264  Redesignated from 70.85....................................47606
70.265  Redesignated from 70.86....................................47606
70.266  Redesignated from 70.87....................................47606
70.271  Undesignated center heading and section added..............47648
70.281--70.282  Undesignated center heading added..................47649
70.281  Added......................................................47649
70.282  Added......................................................47650
70.301--70.306  Undesignated center heading added..................47650
70.301  Added......................................................47650
70.302  Added......................................................47650
70.303  Added......................................................47651
70.304  Added......................................................47651
70.305  Added......................................................47651
70.306  Added......................................................47652
70.311  Redesignated from 70.107...................................47606
    Undesignated center heading added..............................47653
70.321  Redesignated from 70.109...................................47606
    Undesignated center heading added (OMB number).................47653
70.331--70.333  Undesignated center heading added..................47653
70.331  Added......................................................47653
70.332  Added......................................................47653
70.333  Added......................................................47653
70.411-70.487 (Subpart E)  Heading redesignated from 70.111-70.152 
        (Subpart F)................................................47653
70.411  Redesignated from 70.111...................................47606
    OMB number.....................................................47653
70.412  Redesignated from 70.112...................................47606
    (a) amended (OMB number).......................................47653
70.413  Redesignated from 70.113...................................47606
    (b) revised; (c)(1) amended (OMB number).......................47653
70.414  Redesignated from 70.114...................................47606
    (k) amended (OMB number).......................................47654
70.415  Redesignated from 70.115...................................47606
    Revised........................................................47654
70.416  Redesignated from 70.116...................................47606
70.417  Redesignated from 70.117...................................47606
    Revised........................................................47654
70.418  Redesignated from 70.118...................................47606
    Revised........................................................47654
70.419  Redesignated from 70.119...................................47606
    Revised........................................................47654
70.420  Redesignated from 70.120...................................47606
    Revised........................................................47654
70.431  Redesignated from 70.131...................................47606
    OMB number.....................................................47654
70.432  Redesignated from 70.132...................................47606

[[Page 1309]]

    (e) amended; (f) revised.......................................47654
70.433  Redesignated from 70.133...................................47606
    (d) revised (OMB number).......................................47654
70.434  Redesignated from 70.134...................................47606
70.435  Redesignated from 70.135...................................47606
    (a) revised....................................................47654
70.436  Redesignated from 70.136...................................47606
    Revised........................................................47654
70.437  Redesignated from 70.137...................................47606
    Revised........................................................47654
70.438  Redesignated from 70.138...................................47606
70.441  Redesignated from 70.141...................................47606
70.442  Redesignated from 70.142...................................47606
70.443  Redesignated from 70.143...................................47606
70.444  Redesignated from 70.144...................................47606
70.445  Redesignated from 70.145...................................47606
70.446  Redesignated from 70.146...................................47606
    Revised........................................................47654
70.447  Redesignated from 70.147...................................47606
    Revised........................................................47654
70.448  Redesignated from 70.148...................................47606
    (b) and (c) revised............................................47654
70.449  Redesignated from 70.149...................................47606
    Revised........................................................47654
70.450  Redesignated from 70.150...................................47606
    Undesignated center heading added..............................47655
70.461  Redesignated from 70.41....................................47606
    Undesignated center heading added..............................47655
70.462  Redesignated from 70.42....................................47606
70.471  Redesignated from 70.152...................................47606
    (a)(3) revised.................................................47655
70.481--70.487  Undesignated center heading added..................47655
70.481  Added......................................................47655
70.482  Redesignated from 70.151(a)................................47606
    Revised........................................................47655
70.483  Redesignated from 70.151(b)................................47606
    Revised........................................................47656
70.484  Redesignated from 70.151(c)................................47606
    Revised........................................................47656
70.485  Added......................................................47656
70.486  Added......................................................47657
70.487  Added......................................................47657
70.487  Added......................................................47657
71.11  Amended.....................................................47325
71.27  (e)(3) through (5) added....................................47325
170.91  Amended....................................................47657
170.101--170.119 (Subpart F)  Added................................52738
170.681--170.691 (Subpart Z)  Removed..............................24989
179.35  (a) amended................................................47657
194.106a  (a) amended..............................................47657
197  Authority citation revised....................................18065
197.5  Amended.....................................................18065
    Corrected......................................................23635
    Amended........................................................47657
197.29a  (a) amended...............................................47658
197.105  Revised...................................................18065
197.109  (b) revised (OMB number)..................................18065
197.115  Amended (OMB number)......................................18066
197.130  (e) revised...............................................18066
197.130b  (a)(5) and (6) and (b) revised; (a)(7) added.............18066

                                  1991

27 CFR
                                                                   56 FR
                                                                    Page
Chapter I
4.21  (f)(1)(i) amended............................................31076
4.25a  (a)(1)(v) amended...........................................31076
4.32  (a) introductory text amended................................31076
    (f) removed....................................................31077
4.34  (a) amended..................................................31077
4.38  (b)(1) and (2) amended.......................................31077
5  Technical correction............................................64839
5.23  Compliance date deferred in part.......................8922, 63398
5.32  (d) removed..................................................31077
6.31--6.35  Undesignated center heading revised....................31077
7.22  (c) removed..................................................31077
9.132  Added........................................................2435
9.135  Added..........................................................24
9.136  Added.......................................................60923
9.137  Added.......................................................59216
9.138  Added.......................................................52191

[[Page 1310]]

19.906  (a) authority citation removed.............................31077
24.10  Amended.....................................................31077
24.25  (a)(3) redesignated in part as (a)(4).......................31077
24.82  Amended.....................................................31077
24.125  (a) amended................................................31077
24.131  Amended....................................................31077
24.148  Revised....................................................31078
24.167  (b)(1) amended; (b)(4) revised.............................31078
24.176  Revised....................................................31078
24.177  Amended....................................................31078
24.179  (d) amended................................................31078
24.181  Amended....................................................31078
24.182  (a) and (c) revised........................................31078
24.190  Amended....................................................31078
24.215  (b) revised................................................31079
24.225  Amended....................................................31079
    Corrected......................................................38486
24.227  Amended....................................................31079
24.228  Heading amended............................................31079
24.240  Amended....................................................31079
24.246  (b) table amended..........................................31079
24.248  Table amended..............................................31081
24.257  (b) amended................................................31082
24.259  (a) introductory text revised; (a)(4) and (b) amended......31082
24.260  Amended....................................................31082
24.266  (a) amended................................................31082
24.273  (a) amended................................................31082
24.281  Amended....................................................31082
24.293  (b) authority citation amended.............................31082
24.295  Undesignated center heading revised; heading, (b) and (c) 
        amended....................................................31082
24.301  (c) amended................................................31082
24.302  (f) revised................................................31082
24.304  (a) amended................................................31082
24.306  Amended....................................................31083
24.308  (c) revised................................................31083
24.309  (f) revised................................................31083
24.310  Amended....................................................31083
24.311  (a)(6) and (b)(4) revised..................................31083
24.312  Heading amended............................................31083
24.316  Amended....................................................31083
24.320  Amended....................................................31083
53  Added............................................................303
53.11  Amended.....................................................31083
53.91  (e) amended.................................................31083
53.96  (a) introductory text amended; (a)(3) redesignated in part 
        as (a)(4)..................................................31083
53.97  (a) and (d) amended; (c)(3) redesignated in part as (c)(4); 
        new (c)(4)(ii) redesignated in part as (c)(4)(iii).........31083
53.100  (b)(2) concluding text amended.............................31083
53.101  (c) Example 1 amended......................................31084
53.102  (b) heading and (2) amended................................31084
53.103  Amended....................................................31084
53.111  Heading, (a)(2) and (3) amended............................31084
53.113  Amended....................................................31084
53.114  Amended....................................................31084
53.115  (a) and (c)(3) amended.....................................31084
53.141  (d) amended................................................31084
53.156  (d) amended................................................31084
53.157  (b)(2) introductory text revised...........................31084
53.172  (a)(3)(ii)(A) and (B) revised; (a)(3)(ii)(C) amended.......31084
53.173  Concluding text amended....................................31084
53.181  (b) amended................................................31084
53.182  (b)(1) heading revised.....................................31085
55  Authority citation revised.....................................49140
55.11  Amended.....................................................49140
55.41  (b) introductory text revised; (b)(4) added.................49140
70.41  (c) and (f) amended.........................................31085
70.151  Revised....................................................55079
178.11  Amended....................................................32508
178.30  Revised....................................................32508
178.33  Revised....................................................32508
178.34  Revised....................................................32508
178.125  (f) revised...............................................32508
178.125a  (a)(4) revised...........................................32509
178.141  (a) revised...............................................32509
178.144  (i) revised...............................................32509
    (i)(1) correctly designated....................................43649

                                  1992

27 CFR
                                                                   57 FR
                                                                    Page
Chapter I
4.35  (e) added; eff. 7-27-94......................................33114
4.35a  Added; eff. 7-27-94.........................................33114
    (e) corrected..................................................37591
5.22  (i) revised..................................................29020
5.23  (a)(3)(ii) compliance date deferred to 9-3-93................40323
5.47a  (a) revised.................................................31128
9.139  Added.......................................................20764
9.140  Added........................................................2681
9.141  Added.......................................................20761
19.988  Revised....................................................32178

[[Page 1311]]

20  Authority citation revised.....................................40849
20.11  Amended; OMB number.........................................40849
20.25  Revised.....................................................40849
20.36  Authority citation revised..................................40849
    Authority citation corrected...................................42623
20.63  (a) revised.................................................40849
20.134  (b)(1)(ii) revised; (f) added..............................40849
20.235  (b) revised................................................40849
47  Authority citation revised.....................................29787
47.43  (a) revised.................................................29787
47.52  (a) and (c) revised.........................................24189
53.11  Amended.....................................................40325
53.151  (a) revised................................................40325
53.152  (a) revised................................................40325
53.153  (a), (b) heading revised; (b)(3) added.....................40325
53.154  (b) revised................................................40325
53.157  Heading, (a), (b)(1), (c), (e)(1) and (4) revised..........40325
53.158  Added......................................................40326
70  Authority citation revised.....................................40327
70.1  (d) revised..................................................40327
70.11  Amended.....................................................40327
70.21  Revised.....................................................40327
70.22  (a) revised.................................................40328
70.32  Revised.....................................................40328
70.61  (a)(3) revised..............................................40328
70.131  Revised....................................................40328
70.223  (b) revised................................................40328
70.441--70.449  Undesignated center heading revised................40328
70.441  (f) added..................................................40328
70.443  Revised....................................................40328
70.448  Revised....................................................40328
70.449  Revised....................................................40329
70.471  (a)(3) revised.............................................40329
70.482  (d)(1) revised.............................................40329
178.30  (a) corrected...............................................1205
179  Authority citation revised....................................29787
179.111  (a) amended...............................................29787
194.55  (c) added; authority citation revised......................39598
194.151  (b) revised...............................................39598

                                  1993

27 CFR
                                                                   58 FR
                                                                    Page
Chapter I
4.21  (b)(3) revised; eff. 7-22-93..................................5615
    Heading corrected..............................................11886
4.40  (b) heading added............................................40354
4.50  (a) amended..................................................40354
5.23  (a)(3)(ii) compliance date delayed to 8-28-95................45252
5.32  (c) amended..................................................40354
7.10  Amended......................................................40354
7.22  (b)(3) revised; interim......................................21231
    (b)(7) added...................................................44132
7.26  Suspended; heading revised; interim..........................21231
7.28  (b) revised; interim.........................................21231
7.29  (f) and (g) revised; interim.................................21232
7.54  (c) revised; interim.........................................21232
7.71 (Subpart H)  Added; interim...................................21232
9.74  (c) introductory text amended................................40354
9.101  (c) introductory text amended...............................40354
9.123  (c)(1), (9), (10) and (11) revised; (c)(12) added...........65126
9.133  Added.......................................................35876
9.134  Added.......................................................35884
9.136  (c) introductory text amended...............................40354
9.143  Added.......................................................28350
9.144  Added.......................................................11967
9.145  Added.......................................................28352
19  Authority citation revised.....................................40354
19.203  (b)(1) amended.............................................40354
19.204  (b)(1) amended.............................................40354
22.37  (a) amended; (d) and (e) added..............................19061
24.65  (b) introductory text amended...............................19063
24.75  (f) amended..........................................19064, 40354
24.136  (d) amended................................................19064
24.137  (a) amended................................................40354
24.140  (b)(3) amended.............................................19064
24.146  (a) and (b) amended........................................19064
24.148  Table revised..............................................19064
24.176  (b) revised................................................19064
24.182  (a) and (b) revised........................................52230
24.197  Amended....................................................19064
24.237  Amended....................................................19064
24.246  Table amended..............................................52231
24.248  Table amended..............................................52232
24.257  (a)(4) revised.............................................52232
24.268  Amended....................................................19064
24.273  (a) revised................................................19064
    (a)(1) and (2) corrected.......................................48424
24.275  (a)(2) revised; (3) amended................................19064
24.292  (b) amended................................................19065
24.293  (b) amended................................................19065
24.294  (b) amended................................................19065
24.295  (b) amended................................................19065
    (a) amended....................................................40354
24.300  (b) amended; (g) revised...................................19065
24.303  (d) revised................................................19065

[[Page 1312]]

24.313  Introductory text amended..................................19065
24.316  Amended....................................................19065
24.317  Amended....................................................19065
25.11  Amended.....................................................40357
25.152  (b)(2) amended.............................................40357
25.156  Revised....................................................40357
25.158  Revised....................................................40357
25.186  (d) amended................................................40357
25.192  (c) amended................................................40357
25.195  Amended....................................................40357
25.196  (c) amended................................................40357
25.276  (b) amended................................................40357
25.286  (a) and authority citation amended.........................40357
25.296  (b) introductory text, (1), (2) and authority citation 
        revised....................................................40358
25.297  Revised....................................................40358
47.52  (a) revised.................................................47831
53.62  (b)(3) amended..............................................40354
53.93  (b) amended.................................................40354
53.133  (a)(2)(ii) amended.........................................40354
178  Authority citation revised....................................40355
178.11  Amended....................................................40589
178.39  Added......................................................40589
178.151  Added.....................................................40590
194.11  Amended....................................................40355
194.134  Amended...................................................40355
194.291  Amended...................................................40355
194.292  Amended...................................................40355

                                  1994

27 CFR
                                                                   59 FR
                                                                    Page
Chapter I
4.21  (h) heading revised; (h)(2) amended; eff. 4-28-94............14553
4.23a  (d) heading and introductory text amended; eff. 4-28-94.....14553
4.25a  (c), (d)(1) and (e)(2)(v) revised; eff. 4-28-94.............14553
4.39  (m) added; eff. 4-28-94......................................14553
4.40  (b) revised..................................................42160
5  Interpretation..................................................35623
5.23  (a)(3)(ii) and (iii) revised.................................67222
    (c) revised....................................................67223
5.51  (b) revised..................................................42160
7.31  (b) revised..................................................42160
9.3  (b)(5) revised; eff. 4-28-94..................................14553
9.146  Added.........................................................539
9.147  Added; eff. 4-25-94.........................................14100
9.148  Added.......................................................26114
70.61  (a)(1)(i) introductory text, (D) and (3) amended.............2522
70.74  (b) amended..................................................2522
70.77  (b)(1) and (2) amended.......................................2522
70.92  (d)(2)(iii) and (iv) revised................................29367
70.96  (a)(1), (2), (3) and (c) amended.............................2522
70.97  (c)(2) amended...............................................2522
70.98  (b) amended..................................................2523
70.99  Removed......................................................2523
70.166  Removed.....................................................2523
70.201  Removed.....................................................2523
70.211  Removed.....................................................2523
70.212  Removed.....................................................2523
70.487  Removed.....................................................2523
178.1  (a) revised..................................................7112
178.11  Amended.....................................................7112
178.31  (b)  redesignated as (c); new (b) and (d) added.............7112
178.33a  Added......................................................7112
178.42  Introductory text and (c) revised...........................7112
178.96  (b) amended.................................................7112
178.102  Added......................................................7112
178.126a  Amended...................................................7113
178.129  (b) revised; OMB number....................................7113
178.130  Added (OMB number).........................................7113
178.131  Added (OMB number).........................................7114
178.150  Redesignated as 178.151; new 178.150 added.................7114
178.151  Redesignated  from 178.150.................................7114

                                  1995

27 CFR
                                                                   60 FR
                                                                    Page
Chapter I
5.23  (a)(3)(iii) revised; (c)(2) removed..........................67327
6  Authority citation revised......................................20421
6.1  Revised.......................................................20421
6.4  (b) amended...................................................20421
6.5  Added (OMB number)............................................20421
6.11  Amended......................................................20421
6.25  Revised......................................................20421
6.27  (a) revised..................................................20421
6.31  Revised......................................................20421
6.33  (a) revised..................................................20421
6.41  Revised......................................................20421
6.42  Revised......................................................20421
6.43  Amended......................................................20422
6.46  Removed......................................................20422
6.47  Removed......................................................20422
6.51  Revised......................................................20422
6.61  Revised......................................................20422
6.65  Revised......................................................20422
6.67  Added........................................................20422

[[Page 1313]]

6.71  Revised......................................................20422
6.72  Revised......................................................20422
6.81  Revised (OMB number).........................................20422
6.82  Removed......................................................20422
6.83  Revised......................................................20422
6.84  Revised......................................................20423
6.85  Revised......................................................20423
6.86  Removed......................................................20423
6.87  Removed......................................................20423
6.88  Revised......................................................20423
6.89  Removed......................................................20423
6.90  Removed......................................................20423
6.91  Revised......................................................20423
6.92  Revised......................................................20423
6.93  Revised......................................................20423
6.94  Amended......................................................20423
6.96  (a) revised..................................................20423
6.97  Removed......................................................20423
6.98  Revised......................................................20423
6.99  Revised......................................................20424
6.100  Revised.....................................................20424
6.101  Revised.....................................................20424
6.102  Added.......................................................20424
6.151--6.153 (Subpart E)  Added....................................20424
8  Authority citation revised......................................20425
8.1  Revised.......................................................20425
8.5  Added (OMB number)............................................20425
8.11  Amended......................................................20425
8.23  Revised......................................................20425
8.51--8.54  (Subpart D)  Added.....................................20425
9.149  Added.......................................................47061
9.150  Added; eff. 5-1-95..........................................16578
9.151  Added.......................................................51899
10  Authority citation revised.....................................20426
10.1  Revised......................................................20426
10.4  (a)(1) revised...............................................20426
10.5  Added (OMB number)...........................................20426
10.11  Amended.....................................................20426
10.51--10.54 (Subpart D)  Added....................................20427
11  Authority citation revised.....................................20427
11.1  Revised......................................................20427
11.5  Added........................................................20427
11.11  Amended.....................................................20427
11.24  Added.......................................................20427
11.32  Revised.....................................................20427
11.34  Revised.....................................................20428
11.35  Revised.....................................................20428
19  Authority citation revised.....................................33668
19.522  (a) amended................................................33668
19.523  (a) revised; (c) added.....................................33668
24.246  Table corrected; CFR correction............................38959
24.271  (b) revised; (c) added.....................................33669
25.163  Amended....................................................33669
25.164  (c) and (d) revised........................................33669
25.164a  Added.....................................................33669
47.52  (c) removed; (d) and (e) redesignated as (c) and (d); (a) 
        revised; new (d) amended...................................47866
53  Authority citation revised.....................................33670
53.11  Amended.....................................................33670
53.21  (d) redesignated from 53.152(c).............................33670
53.22  (a)(1) amended; (a)(3) added................................33670
53.23  Added.......................................................33670
53.24  Added.......................................................33670
53.142  Heading, (a) introductory text, (4) and (b) revised........33671
53.151  (a)(2) amended; (a)(5) added; (b)(1) revised...............33671
53.152  (c) redesignated as 53.21(d)...............................33670
53.157  Heading revised; note added................................33671
53.158  (b)(2) and (3) amended.....................................33671
53.159  Added......................................................33671
55.1  (a) revised..................................................17449
55.26  Heading and (b) revised; (c) added..........................17449
55.166  Amended....................................................17449
70.306  (a) amended................................................33674
72.21  (c) revised.................................................17449
72.27  Added.......................................................17449
178  Technical correction..........................................19117
178.1  (a) revised.................................................17450
178.11  Amended....................................................10786
    Amended........................................................17450
178.23  (b)(2) revised.............................................17450
178.25a  Added.....................................................17451
178.29a  Added.....................................................17451
178.31  (d) revised................................................10786
178.32  (a)(6), (7), (d)(6) and (7) revised; (a)(8) and (d)(8) 
        added......................................................17451
178.33  Revised....................................................17451
178.39a  Added (OMB number)........................................17451
178.40  Added (OMB number).........................................17451
178.40a  Added (OMB number)........................................17452
178.44  Revised....................................................17452
178.45  Revised....................................................17453
178.47  (a), (b) introductory text, (c) and (d) amended; (b)(6) 
        added; OMB number..........................................17453
178.52  Revised (OMB number).......................................17453
178.57  Existing text designated as (a); (b) and (c) added.........17453
178.92  Heading and (a) revised; (c) added.........................17454
178.99  (c)(6) and (7) amended; (c)(8) added.......................17454
178.102  Revised (OMB number)......................................10786
178.119  Added (OMB number)........................................17454

[[Page 1314]]

178.126a  Amended..................................................10787
178.127  Amended...................................................17455
178.129  (b) revised; OMB number...................................10787
    (b) revised; (e) added; OMB number.............................17455
178.130  (a) and (e) revised.......................................10787
178.131  Revised (OMB number)......................................10788
178.132  Added (OMB number)........................................17455
178.133  Added (OMB number)........................................17455
178.150  (a) introductory text revised.............................10788
178.151  Second 178.151 redesignated as 178.152....................10788
178.152  Redesignated from second 178.151..........................10788
    (a) revised....................................................17455
178.153  Added.....................................................17456
178.171  Amended...................................................17456
179.34  Amended; (e) added.........................................17456
179.36  Amended....................................................17456
179.42  Amended....................................................17456
179.46  Amended....................................................17456
179.47  Amended....................................................17456
179.50  Amended....................................................17456

                                  1996

27 CFR
                                                                   61 FR
                                                                    Page
Chapter I
1  Revised.........................................................26097
1.3  (b) removed; (c) redesignated as (b) and revised..............20723
2  Removed.........................................................26097
3  Removed.........................................................26097
4.3  (b) removed; (c) redesignated as (b)..........................20723
4.21  (g)(1) amended...............................................20723
4.23  Revised........................................................538
4.23a  Removed.......................................................539
4.28  Added..........................................................539
4.34  (a) amended; (b)(1) revised; (b)(2), (3) and (4) 
        redesignated as (b)(3), (4) and (5); new (b)(2) added........539
4.91--4.93  (Subpart J)  Added.......................................539
5.3  (b) removed; (c) redesignated as (b)..........................20723
7.3  (b) removed; (c) redesignated as (b)..........................20723
9.84  (c) revised..................................................29953
9.152  Added.......................................................29952
9.153  Added.......................................................67466
16  Authority citation revised.....................................54936
16.22  (d) removed.................................................20723
16.33  Added.......................................................54936
17  Added..........................................................31412
18.13  OMB number..................................................37003
18.14  OMB number..................................................37003
18.16  (b) removed; (c) redesignated as (b)........................20723
18.17  OMB number..................................................37003
18.21  OMB number..................................................37003
18.22  OMB number..................................................37003
18.24  OMB number..................................................37003
18.26  OMB number..................................................37003
18.27  OMB number..................................................37003
18.31  OMB number..................................................37003
18.32  OMB number..................................................37003
18.33  OMB number..................................................37003
18.34  OMB number..................................................37003
18.35  OMB number..................................................37003
18.36  OMB number..................................................37003
18.37  OMB number..................................................37003
18.38  OMB number..................................................37003
18.51  OMB number..................................................37003
18.52  OMB number..................................................37003
18.54  OMB number..................................................37003
18.55  OMB number..................................................37003
18.56  OMB number..................................................37003
18.61  OMB number..................................................37003
18.62  OMB number..................................................37003
18.63  OMB number..................................................37003
18.65  OMB number..................................................37003
19.57  Undesignated center heading and section added...............31425
19.58  Added.......................................................31425
19.61  (b) removed; (c) redesignated as (b) and revised............20724
19.69  Removed.....................................................31426
19.534  Revised....................................................20724
19.581  (a) amended................................................20724
19.592  Amended....................................................20724
19.780  (c)(4) and (5) revised.....................................31426
20.21  (b) removed; (c) redesignated as (b)........................20724
21.2  (b) removed; (c) redesignated as (b).........................20724
22.21  (b) removed; (c) redesignated as (b)........................20724
24.20  (b) removed; (c) redesignated as (b)........................20724
24.65  (c) revised.................................................31030
24.67  (b) and (c) revised.........................................31030
24.246  (b) table amended..........................................21079
24.248  Table amended..............................................21079
24.295  (a) revised................................................31030
25.3  (b) removed; (c) redesignated as (b).........................20724
25.221  (a) amended................................................20724
30  Authority citation revised.....................................37003
30.22  Amended.....................................................37003

[[Page 1315]]

30.23  Amended.....................................................37004
30.24  (a) amended.................................................37004
30.32  (c) amended.................................................37004
30.43  Introductory text amended...................................37004
30.51  Amended.....................................................37004
47  Policy statement...............................................18678
53.3  Revised......................................................37005
53.21  (b) removed; (c) and (d) redesignated as (b) and (c)........20724
53.103  Heading amended............................................20724
53.131  (a)(5) amended.............................................37005
53.132  (c)(2)(i) revised; (c)(2)(iii) added.......................37005
53.133  (b) introductory text amended..............................20724
    (d)(2) revised; (d)(4) added...................................37006
53.134  (d)(2)(iii) revised; (d)(2)(iv) added......................37006
53.135  (c)(1) revised; (c)(3) added...............................37006
53.179  (b)(1)(iii) revised; (b)(1)(iv) added......................37006
55  Authority citation revised.....................................38085
55.11  Amended.....................................................38085
55.21  (b) removed; (c) redesignated as (b)........................20724
55.181 (Subpart J)  Added..........................................38085
70  Authority citation revised..............................31030, 31426
70.1  (e) and (f) added............................................29955
    Revised........................................................31031
70.2  Added........................................................31031
70.11  Amended.....................................................29955
70.321  (a) amended................................................31426
70.411  (c)(2) revised.............................................31031
    (c)(2)(v) and (vii) removed; (c)(2)(vi) redesignated as 
(c)(2)(v); new (c)(2)(vi) added; (c)(17) amended...................31426
70.414  (a) and (g) revised........................................31031
    (j) revised....................................................31426
70.501--70.509 (Subpart F)  Added..................................31031
70.601--70.610 (Subpart G)  Added..................................31033
70.701--70.702 (Subpart H)  Heading added..........................29955
70.701  Redesignated from 71.41; (a)(1), (d)(1) and (2)(i)(B) 
        amended....................................................29955
70.702  Redesignated from 71.42; (a) amended.......................29955
70.801--70.803 (Subpart I)  Heading added..........................29955
70.801  Added......................................................29955
70.802  Redesignated from 71.26....................................29955
    (a), (d), (f) and (g) amended..................................29956
70.803  Redesignated from 71.27....................................29955
71  Removed........................................................29956
71.26  Redesignated as 70.802......................................29955
71.27  Redesignated as 70.803......................................29955
71.41  Redesignated as 70.701......................................29955
71.42  (c)(1) removed; (c)(2) redesignated as (c)..................20724
    Redesignated as 70.702.........................................29955
170  Authority citation revised.............................31035, 31426
170.21--170.28 (Subpart B)  Removed................................20724
170.60--170.79 (Subpart D)  Removed................................20724
170.85--170.100 (Subpart E)  Removed...............................31035
170.101--170.119 (Subpart F)  Removed..............................20724
170.301--170.311 (Subpart O)  Removed..............................31035
170.611--170.618 (Subpart U)  Removed..............................31426
178.21  (b) removed; (c) redesignated as (b).......................20724
178.40a  (b)(1) amended............................................39321
178.57  (c) amended................................................39321
178.92  (c)(1) introductory text and (iii) amended.................39321
178.116  Revised...................................................39321
178.119  Revised...................................................39322
179.21  (b) removed; (c) redesignated as (b).......................20725
194  Authority citation revised....................................31426
194.33  (b) revised................................................31426
194.41  (b) removed; (c) redesignated as (b).......................20725
194.191  (a) amended...............................................31426
197  Removed.......................................................31426
197.2  (b) removed; (c) redesignated as (b) and revised............20725

                                  1997

27 CFR
                                                                   62 FR
                                                                    Page
Chapter I
4.28  (e) added....................................................16490
    (e)(2) corrected...............................................33747
9.158  Added.......................................................55516
24.148  Revised....................................................29666
24.278  Revised; OMB number........................................29666
24.279  Revised; OMB number........................................29667
47.42  Existing text designated as (a); (b) added; eff. 4-24-97.....8376

[[Page 1316]]

47.52  (a) revised; (b), (c) and (d) redesignated as (d), (e) and 
        (f); new (b) and new (c) added; new (f) amended............61234
47.57  (c) amended.................................................61235
55  Notice of regulatory review.....................................1386
    Authority citation revised......................................8376
55.1  (a) revised; (b)(1), (7) and (8) amended; (b)(9) added; eff. 
        4-24-97.....................................................8376
55.11  Amended; eff. 4-24-97........................................8376
55.26  (d) added; eff. 4-24-97......................................8376
55.49  (b)(6) amended; eff. 4-24-97.................................8376
55.52  (a) and (b) amended; eff. 4-24-97............................8376
55.55  Amended; eff. 4-24-97........................................8376
55.108  (d) added; eff. 4-24-97.....................................8376
55.129  Amended; eff. 4-24-97.......................................8377
55.141  (a) introductory text and (1) revised; eff. 4-24-97.........8377
55.180  Added; eff. 4-24-97.........................................8377
55.181 (Subpart J)  OMB number; eff. 4-24-97........................8377
55.182  Added; eff. 4-24-97.........................................8377
55.183  Added; eff. 4-24-97.........................................8377
55.184  Added; eff. 4-24-97.........................................8378
55.185  Added; eff. 4-24-97.........................................8378
55.186  Added; eff. 4-24-97.........................................8378
178.11  Amended.............................................19444, 34638
178.32  (e) added..................................................34639
178.124  (c) introductory text and (f) amended; (c)(1), (d) and 
        (e) revised................................................19444
178.125  (f) introductory text amended; (f)(1), (2) and (3) added 
                                                                   19445
178.130  (a)(2) revised............................................19445

                                  1998

27 CFR
                                                                   63 FR
                                                                    Page
Chapter I
4.21  (e)(5) amended...............................................44782
4.24  (b)(1) amended...............................................44783
9.93  (c)(11), (17) and (18) revised; (c)(19) added................16904
9.155  Added; eff. 5-11-98.........................................11828
9.156  Added.......................................................33853
9.159  Added.......................................................16904
19.11  Amended.....................................................44783
24.10  Amended.....................................................44783
24.76  Heading revised.............................................44783
24.257  (a)(3)(iii) revised; (a)(3)(iv) and (c) added..............44783
24.278  (d) revised................................................44783
53.3  Regulation at 61 FR 37005 confirmed...........................5728
53.11  Amended.....................................................52603
53.61  (b) revised.................................................52603
53.131  Regulation at 61 FR 37005 confirmed.........................5728
53.132  Regulation at 61 FR 37005 confirmed.........................5728
53.133  Regulation at 61 FR 37006 confirmed.........................5728
53.134  Regulation at 61 FR 37006 confirmed.........................5728
53.135  Regulation at 61 FR 37006 confirmed.........................5728
53.179  Regulation at 61 FR 37007 confirmed.........................5728
55.11  Amended.....................................................45001
55.30  (a), (b) and (d) introductory text amended; (c)(4) and 
        (d)(3) revised.............................................45002
55.41  (b)(2) revised..............................................45002
55.42  Revised.....................................................45002
55.43  Revised.....................................................45002
55.45  (b) amended.................................................45002
55.46  (b) revised.................................................45002
55.51  Revised.....................................................45002
55.63  (d) heading revised.........................................45002
55.102  Revised....................................................45002
55.103  (a)(1) and (2) revised.....................................45003
55.105  (d) revised................................................45003
55.122  (b)(4), (5), (c)(4) and (5) amended........................45003
55.123  (b)(3), (4), (c)(4), (5) and (d)(3) amended................45003
55.124  (b)(4), (5), (c)(4) and (5) amended........................45003
55.125  (a)(1) and (4) amended; (b) removed; (c) through (f) 
        redesignated as (b) through (e); heading, (a) introductory 
        text, new (b)(4) and (5) revised...........................45003
55.127  Amended....................................................45003
55.141  (a)(7) revised.............................................45003
55.163  Amended....................................................45003
55.201  (d) revised; (f) added; OMB number.........................45003
55.202  (b) revised................................................45003
55.206  (b) amended................................................45003
55.218  Table amended..............................................45003
55.221  Heading, (a) and (d) revised...............................45004
55.222  Table amended..............................................45004
55.223  Table amended..............................................45004
55.224  Table amended..............................................45004
178.1  (a) revised.................................................35522
178.11  Amended.............................................35522, 58278

[[Page 1317]]

178.25a  Amended; eff. 5-15-98.....................................12646
178.32  (a)(7), (8)(iii)(B), (d)(7), (8)(ii)(B) amended; (a)(9) 
        and (d)(9) added...........................................35522
178.50  (b) and (c) amended; (d) added.............................35523
178.73  Revised....................................................58278
178.74  Revised....................................................58278
178.78  Revised....................................................58278
178.92  (c)(1)(iii) amended; eff. 5-15-98..........................12646
178.96  (b) amended; (c) revised...................................58278
178.97  Revised....................................................58278
178.99  (c)(7) and (8)(ii)(B) amended; (c)(9) added................35523
178.100  (a) existing text designated as (a)(1); (a)(2) added; (c) 
        revised....................................................35523
178.102  Revised...................................................58279
178.103  Added.....................................................37742
178.124  (c) revised; (d), (e) and (f) amended; OMB number.........58279
178.124a  (e) introductory text amended............................58280
178.125a  (a) introductory text amended............................58280
178.129  (b) revised; (c), (d) and (e) redesignated as (d), (e) 
        and (f); new (c) added; OMB number.........................58280
178.130  (a)(1) amended............................................35523
    Removed........................................................58280
178.131  Revised...................................................58280
178.132  Revised; eff. 5-15-98.....................................12646
178.134  Added.....................................................35523
178.141  Introductory text revised.................................35523
178.144  (c)(6) and (7) amended; (c)(8) added......................35523
178.150  Revised...................................................58280
179.11  Amended; eff. 5-15-98......................................12647
179.86  Amended....................................................58281
194  Authority citation revised....................................44783
194.239--194.241  Undesignated center heading and sections removed
                                                                   44784

                                  1999

27 CFR
                                                                   63 FR
                                                                    Page
Chapter I
1.3  (a) amended; (b) revised......................................49985
1.4  Redesignated as 1.10; new 1.4 added...........................49985
1.10  Redesignated from 1.4 and amended............................49985
1.24  Introductory text amended....................................49985
1.25  Revised......................................................49985
    Corrected......................................................54776
1.27  Amended......................................................49985
1.29  Revised......................................................49985
1.30  Amended......................................................49985
1.31  Amended......................................................49985
1.35  Revised......................................................49985
1.40  Amended......................................................49985
1.41  Amended......................................................49985
1.42  Amended......................................................49985
1.50  Amended......................................................49985
1.51  Amended......................................................49985
1.52  Amended......................................................49985
1.55  Amended......................................................49985
1.56  Revised......................................................49985
1.58  Amended......................................................49985
1.59  Introductory text and (c) amended............................49985
4  Compliance date postponment.......................................753
    Compliance date notification...................................51896
4.21  (e)(1)(i) amended............................................50252
4.22  (b)(5) amended...............................................50253
4.40  (d) added.....................................................2128
4.50  (c) added.....................................................2128
4.91  Amended......................................................49388
4.92  (b) amended; (c) added.......................................49388
5.46  (d) revised...................................................2129
5.51  (e) added.....................................................2129
5.55  (d) added.....................................................2129
7.31  (d) added.....................................................2129
7.41  Revised.......................................................2129
9.75  (b)(17) amended; (c) introductory text and (2) through (13) 
        revised; (c)(14) through (40) redesignated as (c)(17) 
        through (43); (b)(19) through (41) and new (c)(14), (15) 
        and (16) added..............................................3023
9.154  Added; eff. 4-19-99..........................................7787
9.157  Added........................................................3024
9.160  Added; eff. 5-18-99.........................................13513
13  Added...........................................................2129
13.27  (a) corrected...............................................10949
19.633  (c) added...................................................2134
19.641  Revised.....................................................2134
24  Compliance date notification...................................51896
24.3  Removed......................................................13683
24.10  Amended.....................................................13683
24.19--24.22  Undesignated center heading amended..................13683
24.19  Added.......................................................13683
24.20  (a) amended; (b) revised....................................13683

[[Page 1318]]

24.21  (a) introductory text, (b) and (c) amended..................13683
24.22  (a) introductory text and (b) amended.......................13683
    (b) and (c) amended............................................13684
24.25--24.32  Undesignated center heading removed..................13683
24.25  Revised.....................................................13684
24.26  Amended.....................................................13683
24.27  Amended.....................................................13683
24.28  Amended.....................................................13683
24.29  Amended.....................................................13683
24.30  Amended..............................................13683, 13684
24.31  Amended..............................................13683, 13684
24.32  Amended.....................................................13683
24.35--24.37  Undesignated center heading removed..................13683
24.35  Amended.....................................................13684
24.36  Amended.....................................................13684
24.37  Amended.....................................................13684
24.40  Amended.....................................................13684
24.41  Revised.....................................................13684
24.52  (a) amended.................................................13683
    (b) amended....................................................13684
24.54  (c) amended.................................................13684
24.60  Amended.....................................................13683
24.62  Amended.....................................................13683
24.65  (a) introductory text, (b) introductory text and (c) 
        introductory text amended..................................13683
24.66  (a) amended.................................................13683
24.69  (b) amended.................................................13683
24.70  Amended.....................................................13683
24.77  (c), (d) and (e) amended....................................13683
    (b) and (d) amended............................................13684
24.80  Amended.....................................................13684
24.81  Amended.....................................................13684
24.82  Amended.....................................................13684
24.87  Amended.....................................................13683
24.91  (c) amended.................................................13683
    Introductory text amended......................................13684
24.96  (a) amended.................................................13683
24.100  Amended....................................................13684
24.101  (a) amended................................................13684
24.103  Revised....................................................13685
24.105  Amended....................................................13683
24.106  Amended....................................................13685
24.107  Amended....................................................13683
24.108  Amended....................................................13683
24.109  (k) amended................................................13685
24.110  (c)(1) amended.............................................13683
    (d) revised....................................................13685
24.111  Amended....................................................13683
24.114  Amended....................................................13685
24.115  Amended....................................................13683
24.116  Amended.............................................13683, 13685
24.117  Amended....................................................13684
24.120  Amended....................................................13683
24.123  Amended....................................................13683
24.124  Amended....................................................13683
24.125  (c) amended................................................13683
24.127  Amended....................................................13683
24.131  Amended....................................................13685
24.135  (b)(4), (c), (d) and (e) amended...........................13683
    (b) introductory text amended..................................13685
24.137  (a), (b)(3) and (c) amended................................13683
    (b) introductory text amended..................................13685
24.140  (a) and (b)(3) amended.....................................13683
24.141  Amended....................................................13683
24.145  Amended....................................................13685
24.150  Amended....................................................13683
24.154  Amended....................................................13683
24.155  (a) introductory text and (b) amended......................13683
24.157  Amended....................................................13683
24.159  Amended....................................................13683
24.165  Amended....................................................13683
24.166  Amended....................................................13683
24.167  (a) amended................................................13683
24.169  Amended....................................................13683
24.170  (a) and (b) amended........................................13683
24.177  Amended....................................................46844
24.178  (b)(3) and (4) revised.....................................50253
24.180  Amended....................................................46845
24.183  Amended....................................................13683
24.191  Amended....................................................13683
24.201  Amended....................................................13685
24.211  Amended....................................................13685
24.230  Amended....................................................13684
24.231  Amended....................................................13683
24.235  (b) amended................................................13684
24.236  Amended....................................................13683
24.242  (a) introductory text, (b), (c)(1) introductory text and 
        (2) amended................................................13683
24.245  Amended....................................................13683
24.246  (a)(1) amended.............................................13683
24.247  Amended....................................................13683
24.248  Amended....................................................13683
24.249  (a) and (c) amended........................................13683
    (b) revised....................................................13685
24.250  (b)(9) amended.............................................13683
    (a) and (c) amended; (d) revised...............................13685
24.259  (c) amended................................................13684
24.260  Amended....................................................13683
24.265  Amended....................................................13683
24.267  Amended....................................................13685

[[Page 1319]]

24.268  Amended....................................................13685
24.272  (b)(3) and (e) amended.....................................13683
    (b)(1) amended.................................................13685
24.273  (b) amended................................................13683
24.276  Amended....................................................13683
24.278  (h) amended................................................13683
24.279  (a) amended................................................13683
24.291  (c) amended................................................13684
24.293  (b) amended................................................13684
24.294  (a) revised................................................13686
24.296  (a) and (b) amended........................................13683
24.300  (d) amended................................................13683
    (b), (e)(3) and (g) introductory text amended..................13684
    (a) introductory text and (g)(2) amended; (c) revised..........13686
24.304  (a) amended................................................13684
24.313  Introductory text amended..................................13683
54  Comment request................................................57520
55.180  (b), (c)(2) and (d)(2) revised.............................55628
178.11  Amended....................................................17291
178.22  (a)(3) and (b) amended.....................................17291
178.25  Amended....................................................17291
178.35  Amended....................................................17291
178.41  (b) and (c) amended........................................17291
178.45  Amended....................................................17291
178.47  Amended....................................................17291
178.48  Amended....................................................17291
178.52  Amended....................................................17291
178.53  Amended....................................................17291
178.54  Amended....................................................17291
178.56  (b) amended................................................17291
178.57  (a) amended................................................17291
178.60  Amended....................................................17291
178.71  Amended....................................................17291
178.72  Amended....................................................17291
178.73  Amended....................................................17291
178.74  Amended....................................................17291
178.76  Amended....................................................17291
178.78  Amended....................................................17291
178.95  Amended....................................................17291
178.111  (b)(1) and (c) amended....................................17291
178.115  (a) amended...............................................17291
178.122  (c) amended...............................................17291
178.123  (c) amended...............................................17291
178.124  (i) amended...............................................17291
178.125  (h) amended...............................................17291
178.126  Amended...................................................17291
178.127  Amended...................................................17291
178.144  (i)(4) amended............................................17291

                                  2000

27 CFR
                                                                   65 FR
                                                                    Page
Chapter I
4  Temporary rule..................................................57734
4.3  (a) amended; (b) revised......................................11890
4.4  Added.........................................................11890
4.10  Amended......................................................11891
4.21  (b)(3)(iii) amended..........................................11890
    Amended........................................................69253
4.23  (c)(2) amended...............................................11890
4.24  (a)(1) and (c)(1) amended....................................11890
    (b)(1) amended.................................................11891
4.25a  (e)(2) revised..............................................69253
4.30  (b)(1) amended...............................................11891
4.33  (b) amended..................................................11890
4.34  (a) amended..................................................59724
4.37  (c) amended..................................................11890
4.38  (h) amended..................................................11890
4.39  (a)(4), (5), (d), (g), (i)(2)(iii), (3) and (j) amended......11890
    (n) added......................................................59724
4.40  (c) amended..................................................11890
4.50  (b) amended..................................................11890
    (a) amended....................................................11891
4.52  Amended......................................................11890
4.64  (a)(4) and (5) amended.......................................11890
4.91  Amended......................................................78096
5.3  (a) amended; (b) revised......................................11891
5.4  Added.........................................................11891
5.11  Amended......................................................11891
5.22  (k)(1), (2) and (l)(2) amended...............................11891
5.26  (a) and (b) amended..........................................11891
5.28  Introductory text amended....................................11891
5.32  (c) amended..................................................11891
5.33  (g) amended..................................................11891
5.34  (a) amended..................................................11891
5.35  (a) amended..................................................11891
5.36  (d) amended; (f) revised.....................................11891
5.38  (c) amended..................................................11891
5.42  (a)(4), (5) and (b)(7) amended...............................11891
5.46  (d)(1) amended...............................................11891
5.51  (c) amended..................................................11891
5.55  (a), (b) and (c) amended.....................................11891
5.65  (a)(4), (5) and (g) amended..................................11891
6.5  Redesignated as 6.6; new 6.5 added............................52019
6.6  Redesignated from 6.5; (b) revised; (c) amended...............52019
6.11  Amended......................................................52020
7.3  (a) amended; (b) revised......................................11891
7.5  Added.........................................................11891
7.10  Amended......................................................11891
7.20  (c)(1) amended...............................................11892
7.23  (b) amended..................................................11891

[[Page 1320]]

7.24  (g) amended..................................................11891
    (f) amended....................................................11892
7.25  (a) amended..................................................11891
7.29  (a)(4),( 5) and (d) amended..................................11891
7.31  (c) amended..................................................11891
7.41  (a) revised..................................................11892
7.54  (a)(4) and (5) amended.......................................11891
8.5  Redesignated as 8.6; new 8.5 added............................52020
8.6  Redesignated from 8.5; (b) revised; (c) amended...............52020
8.11  Amended......................................................52020
9.3  Heading, (a) and (b)(3) revised...............................69253
9.165  Added.......................................................78099
10.5  Redesignated as 10.6; new 10.5 added.........................52020
10.6  Redesignated from 10.5; (b) revised; (c) amended.............52020
10.11  Amended.....................................................52020
11.5  Redesignated as 11.6; new 11.5 added.........................52021
11.6  Redesignated from 11.5; (b) revised..........................52021
11.11  Amended.....................................................52021
16.10  Amended.....................................................11892
16.30  Amended.....................................................11892
24  Temporary rule.................................................57734
24.265  Amended....................................................69253
47.2  (d) added....................................................38197
47.21  Amended.....................................................38197
47.34  (b) amended.................................................38197
47.35  (b) removed; (c) redesignated as (b)........................38197
47.41  (a) and (c) revised.........................................38197
47.42  (a) revised.................................................38197
47.43  (c) amended.................................................38197
47.45  (a) and (b) revised.........................................38197
47.57  (a), (b) and (c) revised....................................38198
70.411  (c)(2) revised.............................................69253
70.701  (a)(3)(iv) and (b) amended.................................69253
178.112  (b), (c) and (d) revised; OMB number......................38198
178.113  (b) and (c) revised; OMB number...........................38199
178.113a  (b) and (c) revised; OMB number..........................38200
178.114  (a) and (b) revised; OMB number...........................38200
178.129  (d) amended...............................................38201

                                  2001

27 CFR
                                                                   66 FR
                                                                    Page
Chapter I
1.1  (a) amended...................................................42733
1.31  Amended......................................................42733
1.35  Amended......................................................42733
1.50  Amended......................................................42733
1.51  Amended......................................................42733
1.52  Amended......................................................42733
1.57  Amended......................................................42733
4  Cross references amended.................................38549, 42733
4.21  (d)(1)(i) and (e)(1)(i) amended..............................37578
    (e)(5) amended.................................................58944
4.22  (b)(5) amended...............................................37578
4.91  Amended......................................................49280
5.2  Amended................................................38549, 42733
7.4  Amended................................................38549, 42733
9.53  (c)(6) revised; (c)(7) removed...............................50565
9.64  (c) introductory text and (1) revised........................50565
9.74  (c)(43) and (44); eff. 4-27-01...............................11542
9.91  Revised; eff. 4-27-01........................................11542
9.162  Added.......................................................29479
9.164  Added.......................................................23592
9.166  Added.......................................................29698
9.167  Added.......................................................18545
9.168  Added; eff. 4-27-01.........................................11539
9.170  Added.......................................................26791
9.172  Added; eff. 5-7-01..........................................13430
12.3  (a)  amended.................................................42733
13.2  Added........................................................19085
13.11  Amended.....................................................19085
13.20  Added.......................................................19085
13.21  (a) amended; (b) revised....................................19085
13.23  Amended.....................................................19085
13.25  (a) and (b) amended.........................................19085
13.26  (a) and (b) amended.........................................19085
13.27  (c) amended.................................................19085
    (a) and (b) revised............................................19086
13.41  Amended.....................................................19085
13.42  Amended.....................................................19085
13.43  (a) and (b) amended.........................................19085
13.44  Revised.....................................................19086
13.45  (a) and (b) amended.........................................19086
13.52  Amended.....................................................19085
13.53  Amended.....................................................19085
13.54  (a) and (b) amended..................................19085, 19086
13.61  (b) amended.................................................19085
13.62  Revised.....................................................19086
13.71  Revised.....................................................19086
13.72  (b) amended.................................................19086
13.74  Amended.....................................................19086

[[Page 1321]]

13.92  Amended.....................................................19086
17.2  (a) amended; (b) revised......................................5470
17.3  (a) introductory text, (b) and (c) amended....................5470
17.5  Amended......................................................38549
17.6  Amended.......................................................5470
17.7  Added.........................................................5470
17.11  Amended......................................................5470
17.54  Amended......................................................5471
17.55  Amended......................................................5470
17.92  Amended......................................................5471
17.101  Amended.....................................................5471
17.105  (b) amended.................................................5471
17.107  Amended.....................................................5471
17.108  (c) amended.................................................5471
17.111  (a) introductory text and (b) amended.......................5471
17.112  Amended.....................................................5471
17.113  Amended.....................................................5471
17.114  Amended.....................................................5471
17.121  (d) amended.................................................5470
    (b) amended.....................................................5471
17.122  Amended...............................................5470, 5471
17.125  (a) and (b) amended.........................................5471
17.126  (a) amended.................................................5471
17.131  Amended.....................................................5471
17.134  Amended.....................................................5470
17.136  Amended.....................................................5471
17.141  Amended.....................................................5471
17.142  (a) amended.................................................5471
17.143  Amended.....................................................5471
17.144  Amended.....................................................5471
17.145  Amended.....................................................5471
17.147  (a) amended.................................................5471
17.161  Amended.....................................................5470
17.166  (c) amended.................................................5471
17.167  (b) amended.................................................5471
17.168  (a) amended..........................................5471, 42736
17.170  Amended.....................................................5471
17.171  Amended.....................................................5470
17.182  Amended.....................................................5470
17.183  (a) amended.................................................5470
    (b) and (c) amended.............................................5471
18  Authority citation revised.....................................29481
18.11  Amended...............................................5471, 29482
18.12  Added........................................................5471
18.13  (a) introductory text amended; (b) revised...................5471
18.14  (a) introductory text and (b) amended........................5472
18.15  Amended......................................................5472
18.16  (a) amended..................................................5471
    (a) amended; (b) revised........................................5472
18.17  Amended......................................................5472
18.19  Amended......................................................5472
18.21  Amended......................................................5472
18.22  (b) amended..................................................5472
18.23  Amended.....................................................42736
18.24  Amended......................................................5472
18.26  Amended......................................................5472
18.27  (a) introductory text amended................................5472
18.39  Added.......................................................29482
18.40  Added.......................................................29482
18.41  Added.......................................................29482
18.42  Added.......................................................29482
18.43  Added.......................................................29482
18.52  (b) amended..................................................5471
18.56  Revised.....................................................29482
18.61  (a) and (b) amended..........................................5472
18.65  Revised......................................................5472
19.3  Amended........................................38549, 42733, 42736
19.161  (c) amended................................................42733
19.163  (f) amended................................................42733
19.164  Amended....................................................42733
19.169  Amended....................................................42736
19.207  Added......................................................29482
19.460  (a) amended................................................12854
19.485  (a)(1) and (2) amended.....................................38549
19.524  (a)(1), (b)(1) and (3) amended.............................38549
19.911  (c) amended................................................42733
19.950  (f) amended................................................42733
19.1005  (c)(2) amended............................................12854
20.3  Amended........................................38549, 42733, 42736
20.11  Amended......................................................5473
20.20  Added........................................................5473
20.21  (a) amended..................................................5473
    (a) amended; (b) revised........................................5474
20.22  (a)(1) revised; (a)(2), (3), (4), (b)(1), (2), (3) and (c) 
        amended.....................................................5474
20.23  Amended......................................................5474
20.24  Amended......................................................5474
20.25  Revised......................................................5474
20.26  Amended......................................................5474
20.27  Amended......................................................5474
20.28  (a) and (b) amended..........................................5474
20.37  Amended......................................................5474
20.41  (c) introductory text amended................................5474
20.42  (a)(11) and (b) amended......................................5474
20.43  (a) introductory text amended................................5474
20.44  Introductory text amended.............................5474, 42733
20.45  (c)(1) revised...............................................5474
20.48  (b) and (c) amended..........................................5474
20.50  Amended......................................................5474
20.51  Introductory text amended.............................5474, 42733
20.52  Amended.....................................................42733

[[Page 1322]]

20.53  Amended......................................................5474
20.56  (a)(1), (b), (c)(1) and (3) amended..........................5474
20.57  (b)(1) and (2) amended.......................................5474
20.60  Amended......................................................5474
20.61  Amended......................................................5474
20.62  (a) amended..................................................5474
20.63  (a) amended..................................................5474
20.64  Amended......................................................5474
20.66  Amended.....................................................42736
20.68  (a) introductory text amended................................5474
20.72  (b) amended..................................................5474
20.74  Amended......................................................5474
20.79  Amended......................................................5474
20.80  Amended......................................................5474
20.82  Amended......................................................5474
20.91  (a) and (c) amended..........................................5474
20.92  (a) and (b) amended; (c) revised.............................5474
20.95  (a) amended..................................................5474
20.100  (a) introductory text amended; (b) revised..................5474
20.103  Amended.....................................................5474
20.111  Amended.....................................................5474
20.117  (d)(2)(iv) and (v) amended..................................5474
20.132  (c) amended.................................................5474
20.133  (a) introductory text and (b) amended.......................5474
20.134  (c) amended.................................................5474
    (b)(1)(ii) amended..............................................5475
20.144  Amended.....................................................5474
20.147  (b) amended.................................................5475
20.161  (c)(3) amended..............................................5474
20.163  (c)(2) amended..............................................5474
20.164  (e) amended.................................................5474
20.166  Amended.....................................................5474
20.170  Amended.....................................................5474
20.178  (c)(1) amended..............................................5474
20.181  (a) amended.................................................5474
20.189  (e) amended.................................................5475
20.190  Revised.....................................................5475
20.202  (a) amended.................................................5474
20.204  (b) amended.................................................5474
20.205  Introductory text and (f) amended...........................5474
20.211  (b) amended.................................................5474
20.213  (a) and (b) amended.........................................5474
20.234  (b)(3) amended..............................................5474
20.235  (c) amended.................................................5474
20.241  Amended.....................................................5475
20.242  (b) amended.................................................5475
20.244  Amended.....................................................5475
20.245  Amended.....................................................5474
20.246  Amended.....................................................5474
20.251  (a) amended.................................................5475
20.252  (a) and (b) amended.........................................5474
20.261  Amended.....................................................5474
20.262  (c) and (d) amended.........................................5474
20.263  (c) and (d) amended.........................................5474
20.265  (a) introductory text and (b) amended.......................5474
20.267  (a) amended.................................................5475
21.2  (a) amended; (b) revised......................................5475
21.3  (b) and (d) amended; (c) revised..............................5475
21.5  Introductory text amended.....................................5475
21.7  Added.........................................................5475
21.11  Amended......................................................5475
21.21  (b) and (c) amended..........................................5475
21.31  (b) and (c) amended..........................................5475
21.32  (a) amended.................................................12854
21.33  (c) amended..................................................5475
    (a) revised....................................................12854
21.34  (c) amended..................................................5475
21.56  (a) amended..................................................5475
21.65  (a) amended...........................................5475, 12854
21.76  (a) amended.................................................12854
21.91  Amended...............................................5475, 12854
21.95  Redesignated as 21.96; new 21.95 added......................12854
21.96  Redesignated as 21.97; new 21.96 redesignated from 21.95....12854
21.97  Redesignated as 21.98; new 21.97 redesignated from 21.96....12854
21.98  Redesignated as 21.99; new 21.98 redesignated from 21.97....12854
21.99  Redesignated as 21.100; new 21.99 redesignated from 21.98 
                                                                   12854
21.100  Redesignated as 21.101; new 21.100 redesignated from 21.99
                                                                   12854
21.101  Redesignated as 21.102; new 21.101 redesignated from 
        21.100.....................................................12854
21.102  Redesignated as 21.103; new 21.102 redesignated from 
        21.101.....................................................12854
21.103  Redesignated as 21.104; new 21.103 redesignated from 
        21.102.....................................................12854
21.104  Redesignated as 21.105; new 21.104 redesignated from 
        21.103.....................................................12854

[[Page 1323]]

21.105  Redesignated as 21.106; new 21.105 redesignated from 
        21.104.....................................................12854
21.106  Redesignated as 21.107; new 21.106 redesignated from 
        21.105.....................................................12854
21.107  Redesignated as 21.108; new 21.107 redesignated from 
        21.106.....................................................12854
21.108  Redesignated as 21.109; new 21.108 redesignated from 
        21.107.....................................................12854
21.109  Redesignated as 21.210; new 21.109 redesignated from 
        21.108.....................................................12854
21.110  Redesignated as 21.111; new 21.110 redesignated from 
        21.109.....................................................12854
21.111  Redesignated as 21.112; new 21.111 redesignated from 
        21.110.....................................................12854
21.112  Redesignated as 21.113; new 21.112 redesignated from 
        21.111.....................................................12854
21.113  Redesignated as 21.114; new 21.113 redesignated from 
        21.212.....................................................12854
21.114  Redesignated as 21.115; new 21.114 redesignated from 
        21.213.....................................................12854
21.115  Redesignated as 21.116; new 21.115 redesignated from 
        21.214.....................................................12854
21.116  Redesignated as 21.117; new 21.116 redesignated from 
        21.215.....................................................12854
21.117  Redesignated as 21.118; new 21.117 redesignated from 
        21.216.....................................................12854
21.118  Redesignated as 21.119; new 21.118 redesignated from 
        21.117.....................................................12854
21.119  Redesignated as 21.120; new 21.119 redesignated from 
        21.118.....................................................12854
21.120  Redesignated as 21.121; new 21.120 redesignated from 
        21.119.....................................................12854
21.121  Redesignated as 21.122; new 21.121 redesignated from 
        21.120.....................................................12854
21.122  Redesignated as 21.123; new 21.122 redesignated from 
        21.121.....................................................12854
21.123  Redesignated as 21.124; new 21.123 redesignated from 
        21.122.....................................................12854
21.124  Redesignated as 21.125; new 21.124 redesignated from 
        21.123.....................................................12854
21.125  Redesignated as 21.126; new 21.125 redesignated from 
        21.124.....................................................12854
21.126  Redesignated as 21.127; new 21.126 redesignated from 
        21.125.....................................................12854
21.127  Redesignated as 21.128; new 21.127 redesignated from 
        21.126.....................................................12854
21.128  Redesignated as 21.129; new 21.128 redesignated from 
        21.127.....................................................12854
21.129  Redesignated as 21.130; new 21.129 redesignated from 
        21.128.....................................................12854
21.130  Redesignated as 21.131; new 21.130 redesignated from 
        21.129.....................................................12854
21.131  Redesignated as 21.132; new 21.131 redesignated from 
        21.130.....................................................12854
21.132  Redesignated as 21.133; new 21.132 redesignated from 
        21.131.....................................................12854
21.133  Redesignated from 21.132...................................12854
21.141  Footnote 1 amended..........................................5475
     Table amended.................................................12854
21.151  Amended....................................................12854
22.3  Amended........................................38550, 42733, 42736
22.11  Amended......................................................5475
22.20  Added........................................................5476
22.21  (a) amended; (b) revised.....................................5476
    (a) amended; eff. 5-1-01.......................................13015
22.22  (a)(1) through (4), (b)(1), (2) and (3) amended; (c) 
        revised.....................................................5476
22.23  Amended......................................................5476
22.24  (a) and (b) amended..........................................5476
22.25  Amended......................................................5476
    Removed; new 22.25 redesignated from 22.26; eff. 5-1-01........13015
22.26  Amended......................................................5476
    Redesignated as 22.25; new 22.26 redesignated from 22.27; eff. 
5-1-01.............................................................13015
22.27  (a) and (b) amended..........................................5476
    Redesignated as 22.26; eff. 5-1-01.............................13015
22.36  Amended......................................................5476
22.39  (c) amended..................................................5476

[[Page 1324]]

22.41  (b) amended..................................................5476
22.42  (a)(11) and (b) amended......................................5476
22.43  (a) introductory text amended................................5476
    (a)(2) and (b) revised; eff. 5-1-01............................13015
22.44  Introductory text amended.............................5476, 42733
22.45  (c)(1) amended...............................................5476
22.50  Amended......................................................5476
22.51  Introductory text amended.............................5476, 42733
22.52  Amended.....................................................42733
22.53  Amended......................................................5476
22.57  (a)(1), (b), (c)(1) and (3) amended..........................5476
22.58  (b)(1) and (2) amended.......................................5476
22.59  Amended; eff. 5-1-01........................................13015
22.60  (b) removed; (c) and (d) redesignated as new (b) and (c); 
        eff. 5-1-01................................................13015
22.61  Amended......................................................5476
22.62  Amended......................................................5476
    Amended; eff. 5-1-01...........................................13015
22.63  (a) amended..................................................5476
    (a) designation, heading and (b) removed; eff. 5-1-01..........13015
22.64  Amended......................................................5476
22.66  Amended.....................................................42736
22.68  (a) amended..................................................5476
    (a) designation, heading and (b) removed; eff. 5-1-01..........13015
22.71--22.82 (Subpart E)  Removed; eff. 5-1-01.....................13015
22.72  (b) amended..................................................5476
22.74  Amended......................................................5476
22.79  Amended......................................................5476
22.80  Amended......................................................5476
22.82  Amended......................................................5476
22.102  (c) introductory text amended...............................5476
22.103  Amended.....................................................5476
22.111  (c)(3) amended..............................................5476
22.113  (a) and (c) amended.........................................5476
22.122  (a) amended.................................................5476
22.124  (b) amended.................................................5476
22.125  (a) introductory text and (c) amended.......................5476
22.142  (a), (c) and (d) amended....................................5476
22.152  (b) removed; (c) redesignated as new (b); eff. 5-1-01......13015
22.154  (b)(3) amended..............................................5476
22.161  (a) and (d) amended.........................................5476
22.162  Amended.....................................................5476
22.164  (a) amended.................................................5476
22.171  (a) amended.................................................5476
22.172  (b) amended.................................................5476
22.174  Amended.....................................................5476
22.175  Amended.....................................................5476
22.176  (c) amended.................................................5476
24.4  Amended.................................38550, 42734, 42736, 58944
24.114  Amended....................................................42737
24.135  (a) amended................................................29483
24.178  (b)(3) and (4) revised.....................................37578
24.257  (a) revised................................................58944
24.272  (a)(1), (b)(1) and (3) amended.............................38550
25.3  (a) amended; (b) revised......................................5478
25.4  Amended......................................................42737
25.6  Added.........................................................5478
25.11  Amended......................................................5478
25.22  Amended......................................................5478
25.23  (b) introductory text and (c) amended........................5478
25.24  (a)(7) amended...............................................5478
25.25  (a) amended..................................................5478
25.31  (a) amended..................................................5478
25.42  Introductory text and (c) amended............................5478
25.51  Revised......................................................5478
25.52  (a)(1) through (5), (b)(1), (2) and (3) amended..............5478
    (d) revised.....................................................5479
25.61  (a) and (c) amended..........................................5478
    (b) amended.....................................................5479
25.62  (b) amended..................................................5479
25.63  Amended......................................................5478
25.64  Amended......................................................5478
25.65  Amended......................................................5479
25.66  (c)(1) and (d) amended.......................................5478
25.68  (b) amended..................................................5478
25.71  (a)(2) and (b)(1) amended....................................5478
    (a)(1) amended..................................................5479
25.72  (b)(2) amended...............................................5478
25.74  Amended......................................................5478
25.75  Amended......................................................5478
25.77  Amended......................................................5478
25.78  Amended......................................................5479
25.81  (e) amended..................................................5478
    (b) introductory text and (c) introductory text amended.........5479
25.85  Amended......................................................5479
25.91  (c) and (d) amended..........................................5478
    (a) amended.....................................................5479
25.95  Amended......................................................5478
25.96  Amended......................................................5478
25.101  (a) introductory text and (b) amended.......................5478
    (b) revised.....................................................5479
25.103  Amended.....................................................5478

[[Page 1325]]

25.104  Amended.....................................................5478
25.105  Amended.....................................................5478
25.114  (a) amended.................................................5478
25.127  Amended.....................................................5478
25.141  (b)(2) amended..............................................5479
25.142  (c) amended.................................................5478
    (b)(2) amended..................................................5479
25.144  (b) amended.................................................5478
25.152  (a) amended.................................................5478
25.155  Amended.....................................................5478
25.158  (c) amended.................................................5478
25.165  (b)(3) and (e) amended......................................5478
    (b)(1) amended..................................................5479
    (a)(1), (b)(1) and (3) amended.................................38550
25.167  (a) amended.................................................5478
25.173  (a) amended.................................................5478
25.182  Amended.....................................................5478
25.184  (d) amended.................................................5478
    (c) amended.....................................................5479
25.196  (b) amended.................................................5478
25.213  (c) amended.................................................5478
    (b) amended.....................................................5479
25.222  (a) and (b) amended.........................................5479
25.223  (a) amended.................................................5478
    (b) revised.....................................................5479
25.225  (b)(2) amended........................................5478, 5479
25.251  (c) amended.................................................5478
25.252  (c) amended.................................................5478
25.272  (a) introductory text and (b) through (e) amended...........5478
25.273  Revised.....................................................5480
25.274  (a) amended.................................................5478
25.276  (b) amended.................................................5479
    (c) amended.....................................................5480
25.277  Amended.....................................................5478
25.281  (c) amended.................................................5478
25.282  (b), (c), (d) and (f) amended...............................5478
    (e) revised.....................................................5480
25.283  (d) amended.................................................5478
    (e) amended.....................................................5480
25.284  (b) amended.................................................5478
    (d) amended.....................................................5480
    (d) corrected..................................................17809
25.285  (a) amended.................................................5480
25.286  (a) amended.................................................5479
25.291  (c)(2)(ii) and (d)(3) amended...............................5478
25.294  (c) amended.................................................5478
25.297  (b)(4) amended..............................................5478
    (a) and (b) amended.............................................5480
25.300  (a), (c) and (d)(3) amended.................................5478
26  Redesignated from Part 250.....................................38550
26.3  Amended......................................................38550
26.11  Amended.....................................................38550
26.30  Amended.....................................................38550
26.35  (a) amended.................................................38550
26.45  Amended.....................................................38551
26.47  Amended.....................................................38550
26.50  (a) and (b) amended.........................................38551
26.51  (c) amended.................................................38551
26.55  Amended.....................................................38551
26.68a  Amended....................................................38551
26.70  Amended.....................................................38551
26.71  (a) amended.................................................38551
26.72  Amended.....................................................38551
26.73  Amended.....................................................38551
26.74  Amended.....................................................38551
26.77  (c) amended.................................................38551
26.79  (a) amended.................................................38551
26.80  (a) amended.................................................38551
26.81  (a) amended.................................................38551
26.82  Amended.....................................................38551
26.87  Amended.....................................................38551
26.95  (b) amended.................................................38551
26.96b  Amended....................................................38551
26.104  (b) amended................................................38551
26.105a  Amended...................................................38551
26.107  Amended....................................................38550
26.108  (a), (b) and (c) amended...................................38551
26.109  (a), (b) and (c) amended...................................38551
26.110  Amended....................................................38551
26.112  (a), (c)(2), (d)(2) and (e) amended........................38551
26.112a  (a)(1), (b)(2) and (3) amended............................38551
26.113  (c) through (f) amended....................................38551
26.114  Amended....................................................38552
26.115  Amended....................................................38552
26.163  Amended....................................................38552
26.165  (a)(2) and (3) amended.....................................38552
26.173  (b)(4) amended.............................................38552
26.193  (a) and (b) amended........................................38552
26.194  (a) and (b) amended........................................38552
26.196  Amended....................................................38552
26.199a  (a) amended...............................................38551
26.199b  Amended...................................................38551
26.200  (a) amended................................................38552
26.204  Amended....................................................38552
26.205  (a)(8) introductory text, (iv) and (b) amended.............38552
26.211  Amended....................................................38552
26.220  (a) and (b) amended........................................38552
26.221  (c) amended................................................38552
26.225  Amended....................................................38552
26.260  Amended....................................................38552
26.261  Amended....................................................38552
26.262  (a) and (c) amended........................................38552
26.263  Amended....................................................38552
26.264  Amended....................................................38552
26.265  Amended....................................................38552

[[Page 1326]]

26.272  Amended....................................................38552
26.273a  Introductory text amended.................................38552
26.291  (a), (b)(1), (2) and (c) amended...........................38552
26.301  Amended....................................................38552
26.302  (a) and (b) amended........................................38552
26.303  Amended....................................................38552
26.309  (b)(4) and (c)(2)(viii) amended............................38552
26.318  Amended....................................................38552
29  Redesignated from Part 170; heading revised; authority 
        citation revised...........................................42737
29.42  Amended.....................................................42737
29.45  Amended.....................................................42737
29.47  (c) amended.................................................42737
29.49  (c) amended.................................................42737
29.59  Amended.....................................................42737
30.11  Amended......................................................5481
30.21  (c) revised..................................................5481
30.24  (a) and (b) amended..........................................5481
30.31  (b) amended..................................................5481
30.36  Amended......................................................5481
30.43  Amended......................................................5481
30.51  Amended......................................................5481
40-46 (Subchapter B) Heading added.................................38550
40  Redesignated from Part 270; authority citation revised.........39093
40.11  Amended..............................................39094, 49532
40.21  (b) amended.................................................39094
40.31  (a) amended.................................................39094
40.32  (b) amended.................................................39094
40.33  (b)(3) and (c)(2) amended...................................39094
40.35  (a) amended.................................................39094
40.44  Amended..............................................43479, 56758
40.49  Amended.....................................................39094
40.62  Amended.....................................................39094
40.63  Amended.....................................................39094
40.64  Amended.....................................................39094
40.65  Amended.....................................................39094
40.67  Amended.....................................................39094
40.68  Amended.....................................................39094
40.71  Amended.....................................................39094
40.72  Amended.....................................................39094
40.74  Amended.....................................................42734
40.92  Amended.....................................................39094
40.101  Amended....................................................39094
40.102  Amended....................................................39094
40.103  Amended....................................................39094
40.104  Amended....................................................39094
40.111  Amended....................................................39094
40.113  Amended....................................................39094
40.114  Amended....................................................39094
40.134  Amended....................................................39094
40.135  Amended....................................................39094
40.136  (d) amended................................................39094
40.140  Amended....................................................39094
40.162  Amended....................................................39094
40.163  Amended....................................................39095
40.164  (a)(2) and (d)(2) amended..................................39095
40.165  (a) amended................................................39095
40.165a  (a)(1), (b)(2) and (3) amended............................39095
40.166  Amended....................................................39095
40.167  (a) and (b) amended........................................39095
40.168  Amended....................................................39095
40.181  Amended....................................................39095
40.183  (e) amended................................................39094
40.187  Amended....................................................39094
40.212  Amended....................................................39094
40.216c  (b) and (c) amended.......................................39095
40.233  Amended....................................................43479
40.234  Amended....................................................56758
40.235  Amended....................................................43479
40.251  Amended....................................................39095
40.252  Amended....................................................39095
40.253  Amended....................................................39095
40.254  Amended....................................................39095
40.255  Amended....................................................39095
40.282  Amended....................................................39095
40.283  Amended....................................................39095
40.286  Amended....................................................39095
40.287  Amended....................................................39095
40.301  Amended....................................................39095
40.311  (a) and (b) amended........................................39095
40.313  Amended....................................................39095
40.331  Amended....................................................39095
40.332  Amended....................................................42734
40.355  (e) and (g)(2) amended.....................................39095
40.357  (a)(1), (b)(2) and (3) amended.............................39095
40.371  (a) amended................................................39096
40.372  (b) amended................................................39096
40.373  (b)(3) and (c)(2) amended..................................39096
40.374  (a) amended................................................39096
40.384  Amended....................................................56758
40.391  Revised....................................................49532
40.396  Amended....................................................39096
40.397  Amended....................................................39096
40.402  Amended....................................................39096
40.404  Amended....................................................39096
40.405  Amended....................................................39096
40.410  Amended....................................................39096
40.421  (a)(4) amended.............................................39096
40.451  Amended....................................................43479
40.453  Amended....................................................56758
40.454  Amended....................................................43479
40.461  Amended....................................................39096
40.472  Amended....................................................39096
40.473  Amended....................................................39096
40.475  Amended....................................................39096
40.476  Amended....................................................39096

[[Page 1327]]

40.478  Amended....................................................39096
44  Redesignated from Part 290.....................................43480
44.11  Amended.....................................................49532
44.31  (a) amended.................................................43480
44.32  (b) amended.................................................43480
44.33  (b)(3) and (c)(2) amended...................................43480
44.35  (a) amended.................................................43480
44.62  Amended.....................................................43480
44.63  Amended.....................................................43480
44.67  (a) amended.................................................43480
44.82  Amended.....................................................43480
44.83  Amended.....................................................43480
44.84  Amended.....................................................43480
44.85  Amended.....................................................43480
44.86  Amended.....................................................43480
44.87  Amended.....................................................43480
44.88  Amended.....................................................43480
44.93  Amended.....................................................43480
44.102  Amended....................................................43480
44.104  Amended....................................................43480
44.105  Amended....................................................43480
44.107  Amended....................................................43480
44.108  Amended....................................................43480
44.110  Amended....................................................43480
44.111  Amended....................................................43480
44.112  Amended....................................................43480
44.123  Amended....................................................43480
44.124  Amended....................................................43480
44.144  Amended....................................................43480
44.161  Amended....................................................43480
44.185  Authority citation revised.................................45618
44.200  Amended....................................................43480
44.205  (d) amended................................................43480
44.222  Amended....................................................43480
44.223  Amended....................................................43480
44.224  Amended....................................................43480
44.225  Amended....................................................43480
44.226  Amended....................................................43480
44.230  Amended....................................................43480
44.243  Amended....................................................43480
44.244  Amended....................................................43480
44.245  Amended....................................................43480
44.264  Amended....................................................43480
44.266  Amended....................................................43480
45  Redesignated from Part 295.....................................56758
45.34  Amended.....................................................56758
45.43  OMB  number.................................................56758
46  Redesignated from Part 296.....................................32220
    Cross reference amended........................................43479
    Authority citation revised.....................................45618
46.4  (c)  amended.................................................32220
46.6  (a) and (c) amended..........................................32220
46.7  Amended......................................................32220
46.8  Introductory text and (f) amended............................32220
46.15  Amended.....................................................32220
    46.72  Amended..............................................32220,  
                                                                   39093
46.81  Amended.....................................................32220
46.146  Amended....................................................32220
46.147  (a) introductory text and (b) introductory text amended....32220
46.150  (a) amended................................................32220
46.153  Introductory text amended..................................32220
46.166  Amended....................................................39093
    Revised........................................................45618
46.167  (a) and (c) amended........................................39093
46.192  (a) amended................................................32220
46.194  Amended....................................................32220
46.196  (a), (b) and (d) amended...................................32221
46.205  (a) and (e) amended........................................32221
46.206  (b) and (f) amended........................................32221
46.213  Amended....................................................32221
46.221  Amended....................................................32221
46.237  Amended....................................................32221
46.241  (f) amended................................................32221
46.242  Amended....................................................32221
46.255  (a) amended................................................39093
    (b) and (c) amended............................................43479
46.270  Revised....................................................32220
53.11  Amended.....................................................19088
53.20  Added.......................................................19088
53.21  (a) amended; (b) revised....................................19088
53.22  (a)(1) amended..............................................19088
53.23  (a) amended; (b) revised....................................19088
53.24  (a)(1) and (d)(1) amended...................................19088
53.92  (b)(2) amended..............................................19088
53.96  (b)(4) amended..............................................19088
53.115  (b) amended................................................19088
53.132  (c)(2)(ii) amended.........................................19088
53.133  (d)(3) amended.............................................19088
53.134  (d)(2)(ii) amended.........................................19088
53.136  (c)(2) amended.............................................19088
53.140  (b) amended................................................19088
53.142  (a) introductory text amended..............................19088
53.151  (b)(1) and (2) amended.....................................19088
53.155  (a) and (b) amended........................................19088
53.156  (a)(1) and (c) amended.....................................19088
53.157  (f)(1) amended.............................................19088
53.158  (b)(1), (3) and (e) amended................................19088
53.159  (d)(1) and (2) amended.....................................19088
    (j)(1) amended.................................................19089
53.172  (a)(3)(ii)(A), (B) and (b)(2)(iii) amended.................19088
53.186  (a) introductory text and (4) amended......................19088
55.11  Amended.....................................................16602
55.23  Amended.....................................................16602
55.71  Amended.....................................................16602

[[Page 1328]]

55.73  Amended.....................................................42734
55.75  Amended.....................................................42734
55.79  Amended.....................................................42734
55.82  Amended.....................................................42734
55.105  (b) amended................................................16602
55.126  (d) amended................................................16602
55.128  Amended....................................................16602
    Corrected......................................................19089
55.218  Table amended.......................................16602, 19089
70.2  (a) amended; (b) revised.....................................29022
70.3  Added........................................................29022
70.11  Amended.....................................................29022
70.21  Amended..............................................29022, 29023
70.22  (a) and (b) amended; (c) removed............................29023
70.23  (b) revised.................................................29023
70.24  (b) amended.................................................29023
70.25  (a)(4) amended..............................................29022
70.26  (c)(2)(ii) amended..........................................29022
70.30  Revised.....................................................29023
70.31  Revised.....................................................29023
70.32  Amended.....................................................29023
70.33  Introductory text revised...................................29023
70.34  Revised.....................................................29023
70.40  Revised.....................................................29023
70.41  (a), (c), (d) and (f) amended...............................29024
70.42  Heading, (a)(1), (b) and (c)(1) revised.....................29024
70.51  Revised.....................................................29024
70.61  (a)(1)(i) introductory text, (C) and (2) amended............29022
    (a)(1)(i) introductory text, (D) and (3) amended...............29024
70.64  Amended.....................................................29024
70.71  Introductory text, (a), (b)(1)(ii) and (2) amended..........29024
70.72  Amended.....................................................29025
70.73  Amended.....................................................29024
70.74  (c)(1) and (2) amended......................................29024
    (b) amended....................................................29025
70.75  (b) and (c) amended.........................................29024
    (a) introductory text revised..................................29025
70.76  (a), (b)(3), (c) and (d) amended............................29024
70.77  (a)(1), (2), (b)(1) and (2) amended.........................29024
70.81  (a) amended.................................................29024
70.82  Amended.....................................................29024
70.92  (c) and (d)(2)(i) amended...................................29024
70.94  (a) amended.................................................29022
70.96  (a)(1)(iv), (2), (3) and (c) amended........................29024
    (c) amended.............................................29024, 29025
70.98  (b) amended..........................................29024, 29025
70.100  Amended....................................................29022
70.101  Amended....................................................29024
70.113  (b) amended................................................29024
70.122  Amended....................................................29024
70.123  (b)(1) and (2) amended.....................................29024
    (a)(2) amended.................................................29025
70.124  Amended....................................................29025
70.125  (a) and (c) revised; (b) amended...........................29025
70.126  Amended....................................................29025
70.131  (b) amended.........................................32219, 42737
70.149  (a)(3) introductory text and (b)(2)(i)(A) amended..........29025
70.150  (a) introductory text revised; (a)(1), (2), (b), (c)(1), 
        (2), (3), (d), (e)(1) introductory text, (2)(i) 
        introductory text and (B) amended..........................29025
70.151  (a), (b), (d), (e)(1), (f)(3) and (g) amended..............29025
    (g) amended....................................................29026
70.161  (a)(4)(i)(B) amended.......................................29022
    (a)(1), (2), (b) and (c) amended...............................29025
    (a)(1) and (c) amended.........................................29026
70.162  (a) through (d) amended....................................29025
70.163  (a)(1), (b)(1) and (c) amended.............................29025
    (a)(2)(ii) introductory text revised...........................29026
70.164  (b)(1) introductory text, (i), (ii), (2)(i), (ii) and (c) 
        amended....................................................29025
70.165  Amended....................................................29026
70.167  (b)(1) concluding text amended.............................29022
    (a)(2)(ii) amended.............................................29024
    (a)(4), (b)(2) introductory text and (b)(3) amended............29025
    (a)(1), (2)(i)(C), (D), (a)(4) and (b)(1) introductory text 
revised; (a)(2)(i) introductory text and (a)(3) amended............29026
70.168  (a) amended................................................29022
    (b)(2) amended; (c) revised....................................29026
70.169  Amended....................................................29022
70.170  (b) amended................................................29025
70.181  (b)(1), (2), (c)(1)(i), (ii), (2), (3)(i), (4)(i), (ii)(D) 
        concluding text, (4)(iv) introductory text, (5) 
        introductory text, (ii)(B) and (8) amended.................29022
    (a), (b)(1), (c)(2), (3)(ii), (4)(iii) and (5)(ii)(D) amended 
                                                                   29026
    (c)(5)(ii)(E) and (c)(8) amended...............................29027
70.182  (a) and (b) amended........................................29022

[[Page 1329]]

    (a)(2)(i), (ii), (6)(iv), (v), (7) and (9) amended.............29027
70.183  (b)(2), (3), (6), (7) introductory text, (9)(ii) and (11) 
        amended....................................................29022
    (a), (b) introductory text, (4), (9)(iv), (v), (10), (c), (d) 
and (e) amended; (f) revised.......................................29027
70.184  (a), (b), (c) introductory text and (1) amended............29022
70.185  (a), (b) and (c) amended...................................29023
70.186  (b)(2) and (c) amended.....................................29023
    (a)(5) amended.................................................29025
70.187  (a) amended.........................................29023, 29027
    (a) and (b) amended............................................29025
70.188  Amended....................................................29023
70.191  (b) introductory text amended..............................29022
    (a) revised....................................................29027
70.192  (a) revised................................................29027
70.204  (a) concluding text amended.........................29025, 29027
70.205  (a)(1), (2)(i), (ii)(C), (b)(1), (2), (c)(1), (e)(2), (3) 
        and (4) amended............................................29025
    (b)(1) and (c)(1) amended......................................29027
70.206  (a)(1), (b)(3)(ii), (4)(ii) introductory text, (A), 
        concluding text, (iii), (c)(2) and (3) amended.............29023
    (b)(4)(ii)(B) amended..........................................29025
    (a)(1), (b)(1) introductory text and (4)(ii)(B) concluding 
text amended; (c)(1) and (4) revised...............................29027
70.207  (b)(1)(iii) amended........................................29025
70.208  Amended....................................................29025
70.209  (a) and (b) amended........................................29025
70.210  (a)(1) amended.............................................29025
70.213  Amended....................................................29022
70.222  (b) revised................................................29028
70.223  (d) amended................................................29025
70.224  (a)(1) and (2)(i) revised..................................29028
70.227  Amended....................................................29028
70.231  (i)(3) amended.............................................29025
70.241  (a)(8) amended.............................................29025
70.242  (a) and (c) amended........................................29025
70.245  Heading, (a), (c)(2) and (d) amended.......................29025
70.251  (a)(2) and (b) amended.....................................29026
    (b) amended....................................................29027
70.253  (b)(2) amended.............................................29023
    (b)(1) and (2) amended.........................................29028
70.262  (b)(4) and (c)(2) amended..................................29028
70.263  (d) amended................................................29023
70.271  (d)(1) amended.............................................29025
70.281  (b)(2) introductory text, (vi) (3)(iv) and (v) amended.....29025
    (a)(1) and (b)(2) amended......................................29028
70.301  (a) amended................................................29022
70.304  (a) revised; (b) amended...................................29028
70.306  (a) amended................................................29028
70.311  Amended....................................................29022
70.333  Amended....................................................29028
70.411  (b), (c) introductory text and (16) amended................29028
    (c)(26) amended................................................38550
    (c)(5) amended.................................................42734
    (c)(2) amended.................................................42737
70.412  (a) amended................................................29028
70.413  (a) amended................................................29023
    (c)(1) amended.................................................29025
    (b) revised; (c)(2) introductory text and (d) introductory 
text amended.......................................................29028
70.414  (k) amended................................................29026
    (a) amended....................................................29028
70.416  Revised....................................................29029
70.418  Revised....................................................29029
70.419  Revised....................................................29029
70.431   (b)(7) amended............................................32219
    (b)(2) amended.................................................39093
    (b)(1) amended.................................................42734
    (b)(5) amended.................................................43480
    (b)(6) amended.................................................56758
70.432  (a), (b) and (d) amended...................................29029
    (d) amended....................................................43480
70.433  (a) amended................................................29023
    (a) and (b) amended............................................29029
70.435  (i) amended................................................29023
70.438  Amended....................................................29029
70.447  Amended....................................................29025
70.461  Amended....................................................38550
70.462  Amended....................................................43480
70.471  Revised....................................................29029
70.481  (a), (b)(2)(ii), (3)(ii) and (4)(iii) amended..............29025
    (b)(2) introductory text, (3)(i), (ii)(B) and (4) introductory 
text amended.......................................................29026
    (b)(1) amended.................................................29029
70.482  (a) introductory text amended..............................29022
    (d)(1)(i) amended..............................................29026
    (d)(1)(ii) through (v) removed; (d)(1)(vi) redesignated as 
(d)(1)(ii); new (d)(1)(ii) amended; (e) introductory text and 
concluding text revised............................................29029
70.483  Revised....................................................29029
70.484  Amended....................................................29030
70.485  (a) amended................................................29022
70.486  Amended....................................................29025

[[Page 1330]]

70.504  (c)(2) amended.............................................29023
70.506  Amended....................................................29030
70.507  (g) amended................................................29023
70.601  Amended....................................................29030
70.602  (a) and (b)(1) introductory text amended...................29023
70.603  (a)(1) revised.............................................29030
70.606  Introductory text amended..................................29023
70.608  Amended....................................................29023
70.609  Amended....................................................29023
70.701  (a)(1) revised; (c), (d)(2)(i)(A), (iv)(A), (B) and (C) 
        amended....................................................29030
70.801  Amended....................................................29030
70.802  (a), (b)(1) and (d) through (g) amended; (b)(2) removed; 
        (c) revised................................................29030
70.803  (c) amended................................................16602
    (c) corrected..................................................19089
    (c), (e)(3) and (f) amended; (d), (e)(1), (e)(2), (4) and (5) 
revised............................................................29030
71  Redesignated from Part 200; authority citation revised.........42734
71.37  Amended.....................................................42734
71.38  Amended.....................................................42734
71.62  Amended.....................................................42734
71.63  Amended.....................................................42734
71.64  (a) amended.................................................42734
71.74  Amended.....................................................42734
71.78  Amended.....................................................42734
71.82  Amended.....................................................42735
71.83  Amended.....................................................42735
71.96  Amended.....................................................42735
71.107a  (a) amended...............................................42735
71.108  (a) and (b) amended........................................42735
71.110  Amended....................................................42735
170  Authority citation removed.....................................8769
    Redesignated as Part 29........................................42737
170.41--170.59 (Subpart C)  Authority citation revised..............8769
170.42  Added.......................................................8769
170.43  (a) amended; (b) removed; (c) redesignated as new (b); new 
        (b) revised.................................................8769
170.45  Amended.....................................................8770
170.47  (a) and (c) amended.........................................8769
170.49  (a), (b) and (c) amended....................................8769
170.55  (a) revised; (c) amended....................................8770
170.59  Amended.....................................................8770
178  Technical correction..........................................42586
178.92  Heading and (a) revised; OMB number........................40600
179  Technical correction..........................................42586
179.102  Revised; OMB number.......................................40601

                                  2002

   (Regulations published from January 1, 2002 through April 1, 2002)

27 CFR
                                                                   67 FR
                                                                    Page
Chapter I
4.91  Amended; eff. 5-17-02........................................11918
9.173  Added........................................................9193
45  Heading revised.................................................8880
45.11  Amended......................................................8880
45.21  Amended......................................................8880
45.22  Amended......................................................8880
45.23  Amended......................................................8880
45.24  Amended......................................................8880
45.26  Added........................................................8880
45.27  Added........................................................8880
45.34  Amended......................................................8880
45.36  Amended......................................................8880
45.42  Amended......................................................8880
45.51  (d)  amended.................................................8880
46.2  Amended.......................................................8880
46.5  (c)  amended..................................................8880
46.6  (c) amended...................................................8880
46.7  Amended.......................................................8880
46.10  Amended......................................................8880
46.11  (b)  amended.................................................8880
46.13  Revised......................................................8880
46.14  Amended......................................................8880
46.15  Amended......................................................8880
46.21--46.22 (Subpart B)  Added.....................................8880
46.72  Amended......................................................8881
46.73  Amended......................................................8881
46.78  Revised......................................................8881
46.79  Revised......................................................8881
46.81  Removed......................................................8881
46.143  Amended.....................................................8881
46.150  (b) amended.................................................8880
    (c) amended...............................................8880, 8881
46.153  Amended.....................................................8881
46.163  Amended.....................................................8881
46.164  Amended.....................................................8881
46.165  Amended.....................................................8881
46.192  (a) amended.................................................8881
46.270  Removed.....................................................8881

[[Page 1331]]

178.1  (a)  revised.................................................5425
178.11  Amended.....................................................5425
178.32  (a)(5)  and (d)(5) revised; (f) added.......................5425
178.44  (a)  revised; (b) amended; OMB number.......................5425
178.45  Amended;  OMB number........................................5426
178.99  (c)(5)  revised.............................................5426
178.115  (d)(2)  through (5) revised; (e) amended...................5426
178.120  Added;  OMB number.........................................5426
178.124  (c)(1)  and (2) amended; (c)(3)(iii) redesignated as 
        (c)(3)(iv); new (c)(3)(iii) added; OMB number...............5426


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