This week’s blog post is the 2nd in a series I’m posting for winery staff to help them understand and be aware of how they need to be reporting some specific numbers annually (at least) on their required TTB Report of wine premise operations, or 5120.17 (702) filing(s). In assisting wineries with this report I regularly see that they are either completed incorrectly or are missing numbers on specific lines that any US bonded winery must list per TTB regulations. If these numbers are not listed on these required reports it can lead to issues such as TTB audits, wine label issues, and potentially loss of your permit.
The specific report numbers I’m referring to are lines 2 & 5 in part 4, Summary of material received and used, and line 2 in part 1, section A, Bulk wines. (See TTB report template here)
Part 4, summary of materials received and used is the “harvest” section of a winery’s report. This is where your wine making numbers will start on this report for all grapes or juice you receive and process at your site. Line 2 is for the pounds of all grapes or gallons of juice (if they came onto your site as juice not grapes) received at your site and line 5 is for when those pounds or gallons have finished fermentation (either alcoholic and/or malo-lactic) and your winery thus “declares” them finished wine which is when they “graduate” to line 2 of part 1 section A, “produced by fermentation”.
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The problems I commonly see with this report specific to the above report lines are:
- Numbers are listed on line 2 “produced by fermentation” but no numbers listed in part 4
- No numbers listed in either part 4 or on line 2, “produced by fermentation”
- Numbers listed in part 4 are listed incorrectly or are incomplete
What are the potential end results that can come from sending your TTB reports with the above issues:
- If like #2 above your reports never list numbers in part 4 or on line 2 in part 1 of section A then your winery would not qualify to file your TTB excise taxes under the small producers tax credit AND in the event of a TTB audit your basic permit could be in jeopardy because in the TTB’s eyes you are not acting like a winery. What does that mean? As part of holding a TTB basic permit as a winery (you know, that BWN # we’re always referring to?) you are actually required to conduct some amount of fermentation activity. At a minimum that would show up on your TTB report as some juice gallons received (line 2, column C in part 4), then the resulting finished wine gallons from fermenting that juice on line 4, column C in part 4 and lastly those finished wine gallons on line 2, produced by fermentation in either column a or b depending on the wine’s alcohol content.
- Wine labeling issues. If your wine label lists “produced and bottled by” on it, then per TTB requirements at least 75% of the wine blend must have at least finished fermentation at your winery site. Meeting this requirement backs directly into gallons that appear on line 2, produced by fermentation of the TTB report.
Still feeling lost or concerned about this TTB report for your winery?