A manufacturer of nonbeverage alcohol products, or an "MNBP", may file a claim for drawback on distilled spirits used in a TTB approved nonbeverage product. There are 6 categories of non-beverage products: i) medicines, ii) medicinal preparations, iii) food products, iv) flavors, v) flavoring extracts, and vi) perfumes. Regardless of the type of nonbeverage product, it must be unfit for beverage use in order to be eligible for claiming drawback.
Before claiming TTB drawback on a nonbeverage product, the applicant must obtain TTB formula approval for the non-beverage product. Formulas 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.) are considered approved formulas.
Is a TTB Bond Required for Claiming Drawback?
A TTB bond is only required for MNBP's filing drawback claims on a monthly basis. If an MNBP files drawback claims on a quarterly basis, then no TTB bond is required.
What is the Federal Excise Tax Rate for Distilled Spirits?
The default federal excise tax rate is $13.50 per proof gallon of distilled spirits, but the federal excise tax rate can vary depending on the distilled spirits plant supplier, as well as what part of the calendar year the spirits were produced and removed for sale. The TTB drawback rate is based on the applicable federal excise tax rate, less $1.00 per 27 CFR 17.141.
If you have questions regarding MNBP drawback claim eligibility, and are interested in a consultation on potential claim filing, please contact our firm for a claim evaluation.