![]() ![]() Generally, the proprietor of an existing brewery, the “host brewer,” agrees to rent space and equipment to a new “tenant brewer.” The tenant qualifies as a brewer under part 25 by filing the appropriate documents with TTB. What is an “alternating brewery proprietorship”?Īn “alternating proprietorship” is a term we use to describe an arrangement in which two or more people take turns using the physical premises of a brewery. TTB considers contract brewing arrangements to be ordinary commercial arrangements. The contract brewer retains title to the beer at least until the beer is taxpaid or removed from the brewery. The contract brewer is entirely responsible for producing the beer, keeping appropriate brewery records, labeling the beer with its name and address, obtaining necessary certificates of label approval (COLAs), and paying tax at the appropriate rate upon removal of the beer from the brewery. What is a “contract brewing” arrangement?Ī contract brewing arrangement is a business relationship in which one person, such as a wholesale or retail dealer or a brewer, pays a brewing company, the “contract brewer,” to produce beer for him or her. In those regulations, TTB sets out requirements for qualifying for the reduced tax rate for small brewers for which certain alternating brewery proprietors may be eligible.Ĭontract brewing arrangement and alternating brewery proprietorship arrangement differences Regulations in 27 CFR part 25 implement the IRC beer provisions and include requirements on brewers that cover the production, removal, and taxpayment of beer. ![]() The Secretary has delegated such functions to TTB. Sections 78, among others, of the Internal Revenue Code of 1986 (the IRC) authorize the Secretary of the Treasury to administer requirements for qualifying a brewery, operating a brewery, and for paying tax and labeling beer removed from a brewery. In this Circular, the pronoun “we” refers to TTB. The Homeland Security Act of 2002 brought TTB into being and resulted in the transfer of the revenue collection function and certain other duties of the Bureau of Alcohol, Tobacco and Firearms (ATF) to TTB. In this Circular, we provide guidance regarding the standards TTB applies for the establishment and continuing operation of alternating brewery proprietorships. We believe some of these problems result from Bureau failure to state clearly Bureau guidelines for the operation of alternating brewery proprietorships. Examples of such problems include the splitting of beer production, contractual relationships, and the blending of beer. These problems relate to certain aspects of alternating brewery operations. Second, we want to resolve problems that we discovered through examination of applications at the National Revenue Center (NRC) and through field audits of operations. Regulations in 27 CFR part 25 do not expressly authorize these arrangements and provide no guidance for the establishment or operation of alternating brewery proprietorships. First, we want to provide guidance to brewers and others who wish to obtain under 27 CFR 25.52 TTB approval for a variation from existing regulatory requirements (alternate method or procedure) that would allow them to establish alternating brewery proprietorships. Advises brewery proprietors who alternate premises to resubmit applications for alternate methods of operation if they intend to continue operating as an alternating brewery proprietor after August 31, 2006.Announces that all previous approvals under 27 CFR 25.52(a) that allow operation as an alternating proprietor at a brewery no longer apply as of Septemand.Defines the policy TTB applies regarding the continuing operation of existing alternating brewery arrangements, including instances when those arrangements are inconsistent with TTB guidelines.States TTB policy regarding alternating brewery proprietors that may be eligible to pay the reduced rate of tax.Outlines the procedures for brewers to follow when they apply for alternating proprietor arrangements.Describes the differences between alternating proprietors at breweries and contract brewing arrangements.Summarizes the existing policy of the Alcohol and Tobacco Tax and Trade Bureau (TTB) regarding the qualification and operation of alternating proprietors at breweries.To download a free copy of Adobe Reader, click here.Īlternating Proprietors at Brewery Premises To download a PDF file, you must have Adobe Acrobat Reader software installed on your system.
0 Comments
Leave a Reply. |