Under federal law, a distilled spirits plant (or "DSP") must pay federal excise taxes on finished products removed from the bonded premises, subject to limited exceptions. Technically speaking, the federal excise tax attaches once the spirits are produced; however, the excise tax is not payable to the Alcohol & Tobacco Tax & Trade Bureau ("TTB") while the product is still on the bonded premises. The bonded DSP premises is the area where the distillation, non-taxpaid storage, and processing operations occur.
Currently, the federal excise tax rate for distilled spirits is as follows:
$2.70 per proof gallon for the first 100,000 proof gallons removed during the calendar year.
$13.34 per proof gallon for next 22,130,000 proof gallons removed during the calendar year.
$13.50 per proof gallon for everything else removed during the calendar year.
A proof gallon is one liquid gallon of spirits that is 50% alcohol by volume at 60 degrees Fahrenheit.
Taxpayers must file the Excise Tax Return, TTB Form 5000.24 along with payment, in accordance with their payment schedule (e.g., quarterly or semi-monthly, depending on their annual federal excise tax liability). Taxpayers may pay their federal excise tax electronically on Pay.gov, or by check or money order made payable to the TTB.
If you have questions about filing and paying your federal excise taxes, we recommend consulting with an experienced attorney familiar with these requirements.