Category Archives: Wine Compliance

US Wineries: More savings may be coming for your TTB excise taxes
Posted on 2016-04-11 by Ann Reynolds

In January of this year came the announcement from the TTB that starting in January of 2017 many US winery TTB permit holders will no longer be required to maintain their TTB wine bond. See my blog post on this

Now just late last week comes another news update that offers even more significant excise tax consequences for all US wineries. WineAmerica posted about these updates on April 7th. They involve two major updates related to TTB excise taxes which are currently part of a bill recently revived and back under review by congress.

Here’s what these TTB excise tax changes would mean to your winery if the bill is passed:

The first major update of this bill would increase the small producers tax credit rate from 0.90 cents per gallon up to $1.00 per gallon. This credit amount of $1.00 per gallon would be available to wineries that qualify for the small producers tax credit on the first 30,000 gallons of wine they produce per year. A caveat here for all wineries to be aware of is the term “produce” in that statement. If its use is based on the TTB’s definition of “produced” then that would mean the $1.00 per gallon credit could be taken on only up to 30,000 gallons of wine that a qualifying winery “produced by fermentation”. (see my earlier blog post with the details on where those numbers actually come from) For an example of what the math looks like on this if a winery was submitting TTB excise tax payments on 30,000 gallons of table wine that it produced under the current 0.90/gallon credit amount it would owe $5,100 in excise taxes on that amount. Under the proposed $1.00/gallon credit amount it would instead owe $2,100 on that same 30,000 gallons. 

The second, and definitely in my mind the more major development included in this bill is that the alcohol content for the table wine tax class would be changed from it’s current range of between 7% & 14% alcohol (for still wines) to between 7% & 16% alcohol.  With that one change a MUCH larger percentage of wines that are bottled and/or sold on an annual basis by US wineries would then be taxed at the current table wine tax rate of $1.07 gallon. (*Note: wineries that qualify for the small producers tax credit as referenced above would then qualify to pay their TTB excise taxes on their table wines at .07 cents/gallon!)

The savings that will come for the majority of US wineries as a result of this bill being passed are significant

In my view it has been long overdue for the alcohol ranges of the two still wine tax classes to be updated to match the current winemaking world. Around the time that congress approved the current tax rates for still wines if a wine had an alcohol content of over 14% chances are it was a port or sherry, hence a “dessert wine”, which is the TTB’s name for that tax class of still wine between 14% & 21% alcohol. Up until roughly the late 1980’s into the early 1990’s most still wines produced at US wineries were below 14% alcohol. But by just a few years later that had progressively changed to a significant amount of still wines being well over 14% alcohol, due to changes in winemaking style, much of which was based on allowing the grapes to ripen much longer, therefore resulting in much higher sugar content at the beginning of fermentation and thus a higher alcohol after fermentation. Making wineries track, report, label and pay their excise taxes based on outdated regulations that no longer fit the current winemaking world has been long overdue.

One other area worth mentioning related to these potential TTB alcohol tax class changes is that wineries will need to make adjustments to their wine tracking and reporting processes. Whereas before all bulk or bottled wines produced, stored, bottled and reported on their winery site have been required to be logged by the current tax class ranges of 7 to 14% and 14 to 21% they will need to make edits to whatever their recordkeeping system is. Of course if they are a tech savvy winery which uses a wine production database software for their recordkeeping then the responsibility for these tax class tracking changes will fall to their software provider.


Wineries: Like to save $10,000 in taxes per year? (or more!)
Posted on 2016-04-04 by Ann Reynolds

Taxes. Always everyone’s favorite topic. Although when the topic is about things to do that result in dramatic savings on our taxes suddenly it becomes much more interesting. I recently gave a presentation at the Napa Valley Vintners Wine law forum where one of the topics that I covered was all about clarifying the specifics around how most wineries are NOT taking advantage of paying a MUCH reduced rate on their TTB excise taxes.

The short answer on this is if your winery is selling 5,000 cases of wine per year then you can qualify for $10,000 off of your TTB excise taxes due for those wines. (*As long as your winery ownership meet the qualifications- see my earlier blog post on those details) 

So for those 5,000 cases you sold in a year, instead of paying $18,664 in TTB excise taxes your winery could instead only pay $7,965. That’s a 57% savings! This savings comes from your winery and your wines qualifying for and taking advantage of the Small Producers Tax Credit.

There are two types of winemaking activities that you as a winery need to pay attention to related to how you will want to file your excise tax reports in order to correctly take advantage of these hefty tax savings since filing them incorrectly can lead to serious audit issues with much heftier late and underpaid fees due to the TTB!

Both of those two types of winemaking activities are related to whether or not your winery receives (& then bottles and sells) any wines from outside winery facilities. (Not under your own ownership)

What might that look like? Both of these are very common scenarios in the winemaking world. The first is if your winery has some wine made for you at another winery site that is then sent to your winery as finished wine. The second is if your winery purchases wine from the bulk market. If your winery regularly (or ever) practices either of these types of activities with wines made at another site then here is how to take advantage of that $10K per year tax savings.

You will want to make sure that you file and pay the TTB excise taxes on those wines (or the blends they go into) from your TTB permit number at your winery address. This will then also mean that if all your bottled wines go to an off site wine warehouse that you will need to send them “Taxpaid”

That is it. At least in the most simple terms. However since I realize that this is a topic that is still commonly misunderstood definitely reach out to my office for clarification on your winery’s TTB excise tax dynamics and we can discuss what sorts of annual tax savings you can take advantage of.

707-266-1946  or

US Wineries: Do your WINES qualify for the small producers tax credit: Part 2
Posted on 2016-03-30 by Ann Reynolds

In last week’s post I wrote about how to determine if your winery qualifies to file and pay your TTB excise taxes under the small producers tax credit (SPC). There are two main areas that need to be understood related to qualifying for the SPC, the first is whether your winery qualifies (the focus of last week’s post) and second (if the answer to the first part is yes) whether your wines themselves qualify. That is the focus of this week’s post.

Even though your winery may meet the requirements for the SPC that doesn’t mean that all of the wines you bottle will. Here is where you need to be keeping a close tab on the individual winemaking details behind each final blend of wine you bottle for sale. Before clarifying what I mean by this I also need to point out that from a winemaking perspective one of the other main requirements of the SPC is showing wine production every year. Not sure what is meant by “wine production”? See my earlier post here

In taking a look at any of your individual wines that TTB excise taxes are due to be paid on here is the question flow to walk through:

  1. Did we produce all of this wine at our winery? Translation: Were all of the gallons in this wine blend once listed on line 2, Produced by fermentation of our TTB 5120.17 reports? If the answer is definitely yes then the wine will qualify for the SPC.
  2. If your answer is part yes and part no then you’ll need to dig into the details of the “no” gallons. For those gallons that were not “produced by fermentation” at your winery site where were they produced?
  3. Were they produced for your winery by another winery site under a custom crush type of arrangement? If the answer is yes then they can qualify for the SPC but ONLY if you remove their gallons from your winery site as taxpaid, which then means that your winery site files and pays the TTB excise taxes due. This is especially important to point out for all wineries that follow the very common route of sending their cased wines “in bond” to a wine storage warehouse and have them file and pay their TTB excise taxes.  I refer you to a good article on a case from 2015 where this very scenario was the issue that caused a winery a 6 figure late tax bill.
  4. REVISED from Feb 15 posting. Were the “no” gallons a purchase from the bulk wine market? If this is the scenario then those gallons may or may not be eligible for the SPC depending on who files the TTB excise taxes on the bottled wine blend they go into. In order to keep in compliance with filing your TTB excise taxes correctly (under the SPC) for a wine blend that contains those bulk purchased gallons your winery again would need to file and pay the TTB excise taxes for them from your winery bonded site and thus send them to your wine storage warehouse “taxpaid”.  Same scenario as the above example in # 3.
  5. The main significant difference to be aware of here in either of the two scenarios above where your winery owes TTB excise taxes on wines you did NOT produce is that if those cased wines are sent to your warehouse “In Bond” then ONLY the gallons that were produced at your site will qualify for the SPC. Your warehouse would need to be informed  of the percent of your wine blend that does qualify for the SPC. Here’s an example with some math to show what I mean by this. Your winery bottles 5,500 gallons of a blend that 3,465 gallons is wine you produced and 2,035 gallons is wine that was purchased from the bulk market. That would mean when you send this cased wine in bond to your wine storage warehouse you’d need to include on the documentation (the bill of lading)  prominent wording which states that only 63% of it qualifies for the SPC. So when the warehouse then files and pays the TTB excise taxes on it they’ll pay them at the SPC rate on only 63% of the amount of wine shipped.
  6. Your excise tax savings in the long run are significant if you send these “combo” wines to your warehouse Taxpaid. For the above scenario of the 5,500 gallon blend the tax savings would be $4,950 vs  $3,119, which would mean your total tax bill due to the TTB on the 5,500 gallons would either be $3,685 or $5,517 almost a $2K savings.  Certainly for a wine blend like this one I’d recommend it.

As you can see following all the ins and outs of the SPC is no simple task. US Wineries need to be familiar with it however, as it can either save them or cost them a significant amount.

Questions about your winery’s TTB excise taxes? Full contact info for my office is here.



Interacting with the TTB part 2: Permit application filings
Posted on 2016-03-20 by Ann Reynolds

This post is number 2 following up on my blog from 3 weeks ago in which I shared my tips for successfully interacting with the TTB’s main office in Cincinnati if you have questions related to your winery’s  TTB permit or reports. That area however is just one leg of the overall successful management of any winery’s TTB compliance. The other leg is what I’ll share my tips for today. Specifically the topic I refer to is either an original application for a new winery or wine wholesaler business or an amendment type of filing if you’re already an existing TTB permit holder.

During the process of submitting an application to the TTB, either when you are starting a new wine business or if you already hold a TTB winery basic permit and need to update the ownership details, or your bonded premise area or are moving from one premise address to a new one (all examples that require a permit amendment filing)  there are specific steps in the preparation and follow up process that knowing ahead of time will make it go much smoother and more than likely faster.

Here are my tips sectioned out by the two areas of applications submitted to the TTB.  As in my earlier post the TTB office you are interacting with is their National Revenue Center (NRC) office in Cincinnati, Ohio.

Applications for a new TTB permit using the Permits Online system:

  1. If you are responsible for filing a TTB application first make sure that you have power of attorney for your winery’s permit so that you will be able to interact with the TTB staff for this necessary follow up. (A TTB power of attorney form can be submitted as part of submitting a new permit application)
  2. Pay attention to the current approval time frames for your application type and make a mark out on your calendar for around 2 to 3 weeks before the end of that current approval cycle and call their offices (855-882-7665) and press 2. When you actually get through to a live person tell them you are calling in reference to your Permits Online application tracking # and the name of the business on the permit application. 
  3. They will then be able to give you the name and contact # for the TTB specialist who is handling your application. TTB email format by the way is:
  4. Reach out to them by phone and if you are successful in reaching them directly reference who you are, the Permits Online tracking number for your application and the business name. Let them know that you are checking in to confirm the approval status of your application and whether or not anything else is still required on your end to complete their review and approve it.
  5. If you have to leave a voicemail then also follow up by sending them an email w/the same request.
  6. If you don’t receive a response back in a week then reach out again.
  7. Once you have established contact with the specialist handling your application make sure on your end that you are responsive to any additional requests they have regarding your application. If an email is sent to you try to respond back the same day. 

Existing TTB permit holder amendment applications:

  1. The first step is specific to how your original TTB permit application was filed. Was it submitted via mail in hard copy form to the TTB offices or was it submitted (after early 2011) via their Permits Online system? Depending on which of these it was will then determine how you continue to submit all amendment application filings moving forward. So you’re either “old school” (hard copy, snail mail) or “new school” (permits online- everything sent electronically) .
  2. Once you’ve determined your answer to #1 the next step is to prepare the information or forms you’ll need to submit with the application. Here’s a handy reference list of required permit amendment filings “after original qualification” as the TTB calls it. This list is useful to both snail mail and online filers, however in the case of a winery that is filing using the Permits Online system some of the required forms on this list won’t apply, but rather you fill in the required information via the TTB’s online forms.
  3. If you are submitting via hard copy, snail mail make sure to create a duplicate set of the completed application forms to send in. I also recommend that when your applications are ready to send in that they are sent with some form of delivery confirmation so you know when they arrived safely at the TTB offices. 
  4. Follow up. Give it at least 4 weeks after the date you know your application was received before beginning making any contact w/the TTB offices. Here again you’d call their main contact # of 855-882-7665 and press # 2. Tell the person the details of your winery’s TTB BW #, business name, the date your application was received into their offices, and that you are calling to confirm it’s review status. If they can they will give you the name of the TTB specialist handling your file.
  5. Once you know the TTB specialist with your application you can follow you can follow steps 4 through 7 from above to make contact and follow up through your application’s approval.

My final tip across the board for TTB applications:

  1. Be persistent- but not a pest! And in the process of being persistent be professional. (consider yourself a diplomat for your winery)
  2. Be aware that there are many new staff members at the TTB offices, many of whom are brand new to the winery regulation world. So the more familiar you are with what forms, information and documentation are true requirements vs. what is not is valuable knowledge to have. 

Winery Compliance Class in Napa: April 12th
Posted on 2016-03-14 by Ann Reynolds

The requirement for Napa County winery use permit holders to submit annual reports is getting closer to going into effect. A training which will cover this topic and others specific to TTB winery compliance is coming up on Tuesday, April 12th.

This class is a way to  take a look at your winery’s compliance “health”. Is it in good standing? Are you keeping your wine making records correctly to pass either a TTB or a Napa County planning audit?

If you have ever lost sleep over the above topics- I’m teaching a class next month which is designed to help you find out.

The class isHow to keep your winery Audit safe” and is being offered on Tuesday, April 12th from 9 til noon through the Napa-Sonoma Small Business Development Center (SBDC).

Go HERE for full details & to sign up. 

It will be offered at the SBDC office on the Napa Valley College campus.

The class will focus specifically on key issues related to TTB (Alcohol & Tobacco Tax & Trade Bureau) and Napa County Planning use permit required reporting potentially scheduled to come into effect in 2018. These are items that come up most frequently in the course of on site audits by both of these regulating agencies. Topics such as required records and reporting, excise tax payments, and how to determine production levels will be explained and reviewed so attendees can then determine whether their winery has any potential issues that need to be addressed.

Winery staff attending the class are highly encouraged to bring the following items:

  • Full previous years TTB 5120.17 (“702”) reports
  • Most recent TTB excise tax report
  • Examples of required records: a completed bill of lading for cased wine & one for bulk wine
  • Current Napa county Use Permit with details of your production gallons and if your permit has a grape sourcing condition.

This class will go a long way to help wineries fully connect the dots as to how the records and reports they are required to be maintaining and filing either have potential audit holes in them, leaving them vulnerable as well as specific steps they can take now to address them.

Here is a link to get signed up:    Winery Compliance Class


Napa County wineries: Ready for required use permit reporting?
Posted on 2016-03-06 by Ann Reynolds

The annual reporting requirement for all Napa County winery use permit holders just took another step closer to being in effect. This reporting requirement is part of the APAC recommendations still being reviewed and finalized by the Napa County Board of supervisors and planning office.

One of the results of the supervisors meeting last week was further honing of the details behind the APAC recommendation for an annual “self certification” program for all Napa County winery use permit holders. Currently Napa County wineries are not submitting any annual reports to the county office related to their wine production numbers. (though some are already required to submit their 75% grape sourcing numbers)

The first phase of this required reporting could start being implemented in 2017. This initial reporting requirement would be on the winery’s “production” and grape sourcing numbers. The county will be reviewing their current formula for determining a winery’s “production” gallons, which are tied directly to the numbers they report on their TTB 5120.17 reports. See my earlier blog post on the specifics of this calculation.

For those reading this who are wondering about their own winery site’s compliance with their Napa County use permit a training opportunity is coming up next month on April 12th from 9 til noon at the Napa Sonoma Small Business Development offices on the Napa Valley College campus.

The course, “How to keep your winery audit safe” will address the Napa County winery use permit topics mentioned above on wine production and grape sourcing and will also address common TTB winery audit issues such as the 5120.17 report and excise tax issues related to qualifying for the small producers tax credit.  Full course info and sign up link is available here.

This required wine production and grape sourcing reporting requirement will be just the first phase of the self certification program suggested by the APAC. The second phase would address some of the other areas of a winery use permit such as tasting and marketing events.

Winery owners and staff need to also be aware that until these compliance reporting programs are in effect that the random 20 audits per year will continue to be part of the county planning office’s schedule. The results of their 2015 random audits did show that 3 wineries were out of compliance related to either their production or 75% grape sourcing numbers.

Tips for wineries on interacting with the TTB
Posted on 2016-03-01 by Ann Reynolds

I am regularly emailing or calling or hearing from staff at the TTB offices. Most of this contact is with their national revenue center office in Cincinnati. This is the office that handles all of the TTB permit applications and all of their related follow up. (with the exception of label approvals)

Back in my early days of these interactions when I was on staff at a winery hearing from the TTB offices more often than not brought on a wave of queasiness in my stomach. They would often ask me questions that I was not sure how to answer and didn’t want to sound like I didn’t know what I was talking about. Plus I was talking to a government agency that could potentially come out and audit my winery and I certainly didn’t want to be responsible for bringing that on! The chances of that occurring as a result of my emails or phone call was essentially none- but I didn’t know that.

I think that winery staff still have a sense of hesitancy about contacting the TTB because there is still that concept out there in the winemaking world that doing so will bring the TTB wrath down on them. Generally not so, however there are still “best practices” when contacting their offices that will set you up for success rather than frustration or communication breakdown and greatly improve your chances of getting a helpful answer to your question(s).

To make sure any of these interactions that you may have w/the TTB offices are as successful as possible I’ve put together a list of tips from my experiences of almost 20 years of TTB Q & A.

  1. Before you call or email the TTB do you have either signing authority or power of attorney for your winery or wine cellar?  They won’t speak to you if you don’t.
  2. Know all the necessary details about your winery to reference in your email or beginning part of your phone call.  These include your TTB BWN or BWC #, and business name as it appears on your TTB permit.
  3. Be clear about the specifics behind the reason you are contacting them, and then put those specifics as much into “TTB terms” as possible. For example, if your question is related to one of their reports such as the 5120.17 reference it in terms of the report line that it relates to.
  4. Here are a couple of examples of what I’m talking about in #3 here.  Say you’re wondering about bulk wine coming into or leaving your winery? Then you’ll use the terms wine “received in bond” (coming in) or wine “transferred in bond” (going out). Or say you’ve got a question about your loss amounts for regular day to day bulk wine activities. The term you’re looking for there is “inventory losses”.
  5. If you are contacting them by phone early in the day is the best time, considering that they are 3 hours ahead of you for example if you’re calling from a CA, WA or OR winery. If I need  to contact them by phone I put that task on my list before 9 am and will usually call as early at 7 am- which is 10 am their time.
  6. Document the answers you get from your contact w/them. This is easy if it happened via email. Simply print out the email chain and file in a “TTB Q & A” binder or some sort of compliance reference file which is something I highly recommend having. If your interactions happened over the phone take notes to include the TTB staff persons full name, the topics covered and their response.

When is a red blend not a red wine? In the TTB label approval process!
Posted on 2016-02-22 by Ann Reynolds

This week’s blog post comes to you courtesy of a recent contact I had with a  winery compliance colleague. Their request was for a post on a topic related to wine label requirements, and specifically what the TTB calls a wine’s “class and type”. This is a required item on all wine labels but many wineries were getting it wrong on the label files that they sent to my colleagues office.

One of the common services that offices like mine and others provide to winery clients is to submit their labels for TTB approval. (COLAs)  As a part of that process we regularly need to request the wineries to make edits to their label files before they meet the requirements for submitting them to the TTB.

The issue my colleague was having:  wineries that list “red blend” (as their class & type) on their wine’s front label. The winery’s intent is to use “red blend” instead of listing a single varietal name (pinot noir, cabernet sauvignon, etc) which is the other most commonly used class & type on wine labels. The problem with this is “red blend” is not on the TTB’s approved class & type list. A wine label that is submitted to the TTB for label approval that only lists “red blend” on it would come back marked “correction requested”, specific to the “red blend” class & type being insufficient.

What term is on the TTB’s approved class & type list?

Red wine. (along with white wine and rose wine by the way!)

Wineries - you can't leave out the wine in your red, white or rose blends! Click To Tweet

As winery compliance consultants when we receive label files that list “red blend” or “white blend” or “Rose” we have to get back to the winery and request them to edit their wine label to instead list “red wine” or “red wine blend” or “white wine blend” or “white wine” or “rose wine” before he can go ahead and submit for TTB label approval. By the way if your wine is below 14% alcohol you can also list “red table wine” or “white table wine” or “rose table wine” on the label as the class and type & you would NOT need to list an alcohol percent.

While we’re on the topic of wine blends and their labels- there are two options that wineries have if they desire to elaborate a bit further about the varietals that make up their “red wine blend”. (or white wine or rose wine)

Option 1. They may list the varietals in the blend on the wine’s front (brand) label. They list the varietals along with their percentage in descending order and the percentages must total to 100%. 

Option 2. A winery can list “red wine blend” (or white wine or rose wine) on their front (brand) label and then elaborate on that further by listing the varietals in the wine’s blend in the back label text. If a winery chooses this option they must list in descending order any varietals in the blend that account for 5% or more. There is no requirement to list their percentages with this option. This option fits if your wine blend has several varietals in it and they won’t all fit on your front label along with their percentages but  you’d like to be able to share all those details with your wine drinking public.

US wineries: Does your winery qualify for the Small Producers Tax Credit? (part 1)
Posted on 2016-02-08 by Ann Reynolds

My most recent blog posts have been about the currently hot topic of TTB wine bonds. In today’s post I’m covering some in depth specifics on what the purpose of a TTB wine bond is all about: excise taxes. Within the topic of TTB excise taxes I’ll review the first part behind qualifying to pay those required TTB taxes under the Small Producer’s Tax Credit, or SPC. The majority of US wineries qualify for the SPC, however this credit is also very misunderstood and commonly misused on TTB excise tax returns. So this part 1 post is focused on “how to walk your winery permit” through determining the first step in qualifying for the SPC, which is whether or not your winery ownership qualifies.

This is a multi part question and answer process to determine if your answer is yes.

To start you first need to take a look at your TTB permit application file for your winery. If the ownership of your winery also owns other winery sites (this includes as an alternating proprietor at another site) you’ll need to reference those TTB permit application files as well. You will also need to make sure you reference the most current TTB permit application file (for all sites if applicable) that matches your current ownership details. (i.e. If you’ve changed from one entity type to another or if you’ve changed the ownership on your LLC for example) What you are looking at specifically in your TTB application file is all the individuals listed as the owners/officers. This is because the first qualification for filing under the SPC is that if any owner or officer above 50% ownership on your TTB permit is also listed as an owner/officer above 50% ownership on another TTB winery permit then the annual wine production gallons and the amount of tax paid wine removals per year must be summed together for both sites. This is what the IRS refers to as a control group The total amount of annual production for all sites cannot be more than 150,000 gallons in order to qualify for the tax credit at the full 0.90 per gallon amount, and the credit can only be taken on up to 100,000 gallons for a year’s worth of wine removals from all sites on your TTB excise tax reports.

In layman’s terms what could this look like you ask? For example, if Sue Z. is listed as the CEO with 60% ownership of  ABC Cellars LLC at a winery site in Napa, CA and ABC Cellars LLC also has a second TTB permit as an alternating proprietor (AP) at a site in Sonoma CA then they would need to be summing their wine production gallons and their wine removal amounts together each year to determine whether or not they qualify to file and pay their TTB excise taxes under the SPC.

Be aware this is just one example of a multi site ownership that is an example of a control group. There are other types as well so if you are wondering about your site please feel free to contact my office to discuss further.

If you are reading this and you know that your winery is owned by an individual, partnership, LLC or corporation and that none of the owners or officers are listed on any other TTB winery or wine cellar permits then you pass this first small producer’s tax credit qualification test. (Congratulations!)  

Stay tuned next week for part 2: Does your wine qualify for the small producer’s tax credit?


Does your winery qualify to cancel your TTB wine bond?
Posted on 2016-02-02 by Ann Reynolds

This is post number three following up on the TTB’s announcement related to updates in their wine bond requirements. This post is designed to help answer the question, will my winery qualify to no longer need a TTB wine bond? As is the case with winery compliance each TTB winery permit holder has their own details that determine how their TTB compliance works, in this instance specific to their TTB wine bond.

Here is a path to follow to determine whether your winery will qualify. 

  1. TTB excise tax payments are made on cased wines. (In almost all situations) Does your winery use an off site wine storage warehouse for your cased wines? If yes then your first step is to refer to one or two years of invoices from them, specifically looking for all the TTB excise tax payments they billed you back for. Sum those up (ideally 2 years worth is best for comparison) and if the total for either year is not more than $50,000 your winery likely qualifies to cancel your wine bond come the end of 2016.
  2. If you ship your cased wines directly from your winery this means you are responsible for filing and paying your TTB excise taxes under your own bonded winery permit. Here again reference your TTB excise tax reports for at least 2 years worth and compare each year’s total amounts to determine whether or not you’re over the $50,000  per year amount.

To give you an idea on what these excise tax calculations look like here are some examples of amounts of wine shipments per year that would be less than $50,000 due in TTB excise taxes.

  1. Up to 13,390 cases of over 14% wine @ $1.57/gallon (the full tax rate)
  2. Up to 6,700 cases of over 14% wines @ $1.57/gallon and 9,300 cases of below 14% wine @ $1.07/gallon
  3. Up to 21,030 cases of over 14% wine & 21,030 cases of below 14% wine both @ 0.90/gallon (under the small producers tax credit)
  4. Up to 42,060 cases of below 14% wines @ 0.90/gallon 

As you see the excise taxes that your winery owes per year are based for one on the alcohol content (tax class) of the wines you ship out to customers each year. This ratio may or may not be a steady one year to year for your winery. However the majority (79%) of US wineries make less than 5,000 cases per year and the next group up from that (18%) makes less than 50,000 cases per year. See chart here.  As long as your winery and your wines qualify for the small producers tax credit, your winery can ship out up to 42,060 cases of wine per year and owe less than $50,000 in excise taxes. (more details to come on this in a future blog)  Based on the above, more than likely the majority of US wineries will qualify to cancel their TTB wine bond come the end of 2016.