CBC | APRIL 2019
Brewery Records,
Reports, and Returns
1
CHARYL SJOWALL
Investigator
MISSY KELLER
Tax Specialist
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Records, Reports & Returns
Records
Operations
Report
Excise Tax
Return
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Required Records | Purpose
• Captures each day’s brewery operations
• Source documents for all entries on the Brewers Reports and
Excise Tax Returns
• What a TTB auditor reviews to support your tax liability and
compliance
• See 27 CFR part 25 – Beer
– Subpart U
• Sections 25.291 - 25.301
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Records | Basic Info
27 CFR 25.291
• Brewers are required to:
– maintain daily records that capture brewery operations
– make required daily transactions by the close of the next business
day
– maintain records at the brewery and make them available for
inspection by TTB
– Retain required records for 3 years
• If certain requirements are met, electronic records may be
retained on equipment located off the brewery premises
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Daily Records | General
27 CFR 25.291
• There is generally no required format for required records
• Records may be self-created spreadsheets/documents,
invoices, computer-generated summaries, commercial or
business documents, bills of lading, credit memos, or TTB
required forms
• Records must accurately and clearly reflect the details of
each operation and/or transaction, and must contain all the
necessary data
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Daily Records of Operations & Daily Summaries
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25.292 has two parts:
(a): Daily Records
(b): Daily Summaries
25.292(a) basically
has five subject areas:
1. materials & production
2. packaging
3. removals
4. returns
5. other
Beer * = beer & cereal beverage
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Daily Records of Operations
27 CFR 25.292(a)(1) – (19)
Most Commonly Used Records:
• Raw materials received (used for beer production)
• Beer produced by fermentation
• Beer transferred to/from packaging (bottling and/or racking)
• Beer packaged (bottled and/or racked)
• Beer removed for consumption or sale – beer transferred to serving/tax-
determined tanks, or packaged and transferred to a cooler/taxpaid
storage
• Beer returned to brewery
• Beer lost due to breakage, theft, or destroyed
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NOTE: when used here, “Beer” means “beer or cereal beverage”
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Daily Summary Records
27 CFR 25.292(b)(1)–(6)
• Each day, brewers must also summarize a few of the daily
records:
– Beer packaged (bottled and/or racked)
– Beer removed for consumption or sale
– Beer returned to the brewery from which removed
– Beer returned after removed from another brewery owned by the
brewer
– Brewing materials, beer in process, and finished beer on hand
• You may maintain daily summary records on the associated daily
records
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Example Production Record – Batch Record /
Brewing Log
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Example Materials Received/Used Record
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27 CFR 25.292(a)(1)(2) & (b)(6)
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Example Packaging Record
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Example Removal Record (Brewpub)
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Finished beer
transferred (removed)
from a fermenter to a
serving tank/tax-
determined tank
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Example Removal Record
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Packaged beer removed
from bonded storage area,
and sold or delivered to
retailers/the public
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Example Returns to Brewery Record
• Lost due to
breakage, theft,
etc.
• Destroyed
• Returned to
brewery
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Beer Removed Without Payment of Tax
27 CFR 25.292(a)(9)–(11)
• Beer may be removed without tax payment ONLY when:
– Transferred in bond to another brewery
– Unfit for beverage use
– Used for analysis or testing
– Transferred to a distilled spirits plant
– Exported/used as supplies for vessels and aircraft
– For personal use: only sole proprietorships and partnerships. The annual
limit is 100 gallons per household with one adult or 200 gallons for
households with two or more adults (27 CFR 25.207)
• See 27 CFR Subpart L 25.181 – 207 for details on these kinds of removals
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Beer Removed Without Payment of Tax
Consumed on Premises - 27 CFR 25.292(a)(9)–(11)
Quarterly Report:
Lines 11 – 14:
removed without
payment of tax
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Beer Removed Without Payment of Tax
Exports - 27 CFR 25.292(a)(9)
• Beer Exported – for details see 27 CFR part 28
– Direct export without payment of tax
• Industry Circular 2004-3 Alcohol and Tobacco Export Documentation
Procedures
• TTB Form 5130.12 - Beer for Exportation
– Export tax paid with benefit of drawback
• TTB F 5130.6 - Drawback on Beer Exported
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Inventory Records
27 CFR 25.294
Monthly Physical Inventory
• Required every month
• May be taken within 7 days of the end of the month
• Must include the following information
– Date taken
– Quantity of beer on hand
– Losses, gains, shortages
– Signature under penalty of perjury
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Example Inventory Record
Larger Breweries Reporting on TTB Form 5130.9
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Example Inventory Record
Smaller Breweries Reporting on TTB Form 5130.26
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NOTE to Small breweries/brewpubs:
A similar format could also be used for
your Daily Summary of Daily
Production Records/ Brew Logs
27 CFR 25.292(a)(2) or (b)(5)
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Common Issues: Loss vs. Shortage
27 CFR 25.292(a)(16)
• Loss: beer lost due to a known event like breakage, spillage
or theft
– Losses are NOT taxed
• Shortage: missing quantity of beer disclosed by physical
inventory count/unexpected
– Shortages MAY be taxed
– Brewer must submit a claim and provide a plausible explanation for
the shortage, identify/address defects, or tax may be assessed
• For details on filing claims see 27 CFR 25.283
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Common Issues: Recording Beer Destructions
27 CFR 25.292(a)(14)
• Destructions ON Brewery Premises
– BEER NOT TAX PAID / TAX DETERMINED
• Note the batch record or prepare a destruction record as detailed in §25.225
• Prior notice and reporting is not required as per §25.221
– BEER TAX PAID / TAX DETERMINED
• Prepare a destruction record as detailed in §25.225
• May file a claim for credit of taxes paid
• For details on destructions see 27 CFR Subpart N 25.221–25.225
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Common Issues: Recording Beer Destructions
27 CFR 25.292(a)(14)
• Destructions OFF Brewery Premises:
– Submit Notice of Intent of Destruction on brewery letterhead and fax it
to the NRC: (202) 453-2979
– For credit on taxes paid, within 6 months show as adjustment on the tax
return and/or file a claim
• For details on destructions, see 27 CFR subpart N: 25.221–25.225
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Common Issues: Recording Returns
27 CFR 25.292(a)(12)(13)
• Removed from/returned to same brewery:
– May take an offset against that day’s removals
• Removed from/returned to a different brewery, same
ownership:
– May file a claim for refund of tax or make a decreasing adjustment
on the tax return – but may not take an offset
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27 CFR 25.212 & 25.213
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Records | Best Practices
• Familiarize yourself with 27 CFR 25.292 and 25.294
• Build recordkeeping duties into the daily work schedule
• Keep detailed records: who, what, when, where, why, and how
much
• Be vigilant about recording production, removals, returns,
destructions, losses and shortages
• IN SUMMARY: record all operations and transactions at the
brewery as soon as possible
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Records, Reports & Returns
Records
Operations
Report
Excise Tax
Return
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Beer Barrel Equivalency
• 1 barrel = 31 gallons
• Barrels are the standard unit for tax and reporting
• Taxable removals in kegs must be computed as barrels by
using the tables found in 27 CFR 25.156
• Taxable removals in bottles and cans must be computed as
barrels by using the tables found in 27 CFR 25.158
• If beer is to be removed in OTHER sizes, the brewer shall
notify the NRC in advance and request to be advised of the
fractional barrel equivalent
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Beer Barrel Equivalency
• Example: Barrel equivalent factor for 24/12 = 0.07258
– 24 oz. bottles
– 12 bottles per case
– 75 cases removed x 0.07258 = 5.4435 beer barrels
– Use 5.44 beer barrels to compute tax
• You must compute to 5 decimal places on removal records
– 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
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Operations Report
• Reports are due the 15
th
day following the close of the
reporting period
• You must file a report even if there was no activity during
period
• File quarterly if your tax liability does not exceed $50,000 in
the current or prior calendar year
• File monthly if your tax liability is more than $50,000 in the
current or prior a calendar year
• There is no annual filing option for reports
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Operations Reports
• TTB Form 5130.26 – Quarterly Brewer’s Report of Operations
(if eligible)
- OR -
• TTB Form 5130.9 - Brewer’s Report of Operations
• Note: Instructions are available for each form:
– TTB Form 5130.26i and TTB Form 5130.9i
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Records, Reports & Returns
Records
Operations
Report
Excise Tax
Return
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Tax Rates for Domestic Beer
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* Additional rules regarding controlled groups and single taxpayers apply
Tax Rates for Domestic Beer Removed During Calendar Years 2018 and 2019*
Beer Produced by the Brewer
Beer Not Produced
by the Brewer
Domestic Brewer who
brews 2,000,000 barrels
or less per calendar
year
First 60,000 BBLs
Over 60,000 up to
2,000,000
All BBLs
$3.50 $16.00
$18.00
Domestic Brewer who
brews more than
2,000,000 barrels per
calendar year
First 6,000,000 BBLs Over 6,000,000 BBLs
$16.00 $18.00
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When is There Beer Tax Liability?
“Tax is hereby imposed on all beer brewed or produced and
removed for consumption or sale within the U.S. or imported
into the U.S.”
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26 U.S.C. 5051(a)
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Excise Tax Return Filing Frequency
• Annually: You may file 1 tax return per year if you are liable
for $1,000 or less of tax on beer in the current and prior
calendar year
• Quarterly: You may file quarterly if you are liable for $50,000
or less of tax on beer in the current and prior calendar year
– Quarters end March, June, September, December
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NOTE: Additional rules apply to controlled groups and multiple breweries with the same EIN
27 CFR 25.164
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• Semi-Monthly: You must file a tax return two times per
month if you are liable for more than $50,000 in beer tax in
the current and prior calendar year
– The return periods are:
• 1
st
through the 15
th
• 16
th
through the end of month
– Special rule for September — there is a third return period
• 1
st
through the 15th
• 16
th
through the 25th*
• 26
th
through the 30th*
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Excise Tax Return Filing Frequency
27 CFR 25.164
* See 27 CFR 25.164a(a)(1) for return periods if required to pay by EFT
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Excise Tax Return - TTB Form 5000.24
• Tax returns (and payment, if any) are due the 14
th
day after
the close of the tax period
– If the due date falls on a weekend or legal holiday, the due date is
the immediately preceding business day
• Due date schedule for each year is available on our website
– https://ttb.gov/tax_audit/fed_ex_tax_due.shtml
• You must file a return even if you have $0 taxes due
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27 CFR 25.164
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Email Reminders for Filing Tax Returns and
Reports
• Stay current with due dates by subscribing to receive
automated email reminders about when to file tax returns
and reports of operations
• Visit https://www.ttb.gov/news/automated-reminders-
filing.shtml
to sign up for email reminders
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Tax Calculation
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Excise Tax
Return
?
Operations
Report
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Example Reconciliation of Tax Returns to
Report of Operations
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Removed for Consumption or Sale (bbls) Tax Rate
Total Tax
Kegs
500
Cases 700
Tavern 900
2100 3.50 7350.00
Less Returns as Offsets
Cases 200 3.50 700.00
6,650.00
S/N 2019-1 6,650.00
Not e:
Adjustments to tax liability are a separate matter
Report of Operations
Tax Returns
Rec onc iliation Report of Operat ions to T ax Returns
1/1/2019-3/31/2019
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Tax Return – TTB Form 5000.24
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2019-1
03/31/2019
01/01/2019
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Tax Return – TTB Form 5000.24
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04/08/2019
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Tax Return – TTB Form 5000.24
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Pay.gov
• You may electronically file tax returns, file operations reports,
and pay taxes through
Pay.gov
– Secure
– Convenient and fast
– Free
– Checks entries and totals for accuracy
• For more information on how to register, go to
• https://www.ttb.gov/epayment/epayment.shtml
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Mailing Address for Returns & Payments
• If filing by mail, please be sure to use the correct address
• Late returns or payment are subject to penalties and interest
• DO NOT mail returns or payments to the National Revenue
Center in Cincinnati, Ohio
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TTB
Excise Tax
P.O. Box 790353
St. Louis, MO 63179-0353
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• If filing operations reports by mail, please be sure to use the
correct address
Mailing Address for Operations Reports
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Director, National Revenue Center
TTB
550 Main St, Suite 8002
Cincinnati, OH 45202-5215
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ALCOHOL AND TOBACCO TAX AND TRADE BUREAU | TTB
Summary & Questions
