27 CFR -250 - 1997

23

Bureau of Alcohol, Tobacco and Firearms, Treasury Pt. 250

shall constitute the exclusive record.Where the decision rests on official no-tice of material fact not appearing inthe record, the administrative lawjudge shall so state in his findings andany party shall, on timely request, beafforded an opportunity to show factsto the contrary.

§ 200.129 Availability.A copy of the record shall be avail-

able for inspection by the parties tothe proceedings during business hoursat the office of the administrative lawjudge or the district director or, pend-ing administrative review, at the officeof the Director. Copies of the record de-sired by the respondent or applicantmay be purchased from the contract re-porter or may be obtained in accord-ance with part 71 of this chapter.

(5 U.S.C. 552(a) (80 Stat. 383, as amended))

[21 FR 1441, Mar. 6, 1956. Redesignated at 40FR 16835, Apr. 15, 1975, and amended by T.D.ATF–92, 46 FR 46918, Sept. 23, 1981; T.D. ATF–374, 61 FR 29957, June 13, 1996]

PART 250—LIQUORS AND ARTICLESFROM PUERTO RICO AND THEVIRGIN ISLANDS

Subpart A—Scope of Regulations

Sec.250.1 Alcoholic products coming into the

United States from Puerto Rico and theVirgin Islands.

250.2 Forms prescribed.

Subpart B—Definitions

250.11 Meaning of terms.

Subpart C—[Reserved]

Subpart Ca—Rum Imported Into the UnitedStates From Areas Other Than PuertoRico and the Virgin Islands

250.30 Excise taxes.250.31 Formula.

Subpart Cb—Products Coming into theUnited States From Puerto Rico

250.35 Taxable status.250.36 Products exempt from tax.250.36a—250.36b [Reserved]250.36c Shipments of bulk distilled spirits to

the United States without payment oftax.

250.37 United States Bureau of Alcohol, To-bacco and Firearms office.

250.38 Containers of distilled spirits.250.39 Labels.250.40 Marking containers of distilled spir-

its.250.41 Destruction of marks and brands.250.43 Samples.

SPECIAL (OCCUPATIONAL) TAXES

250.44 Liquor dealer’s special taxes.250.45 Warehouse receipts covering distilled

spirits.250.46 Distilled spirits plant proprietor’s

special (occupational) tax.250.47 Specially denatured spirits user’s and

dealer’s special (occupational) taxes.

Subpart D—Formulas for Products FromPuerto Rico

250.50 Formulas for liquors.250.50a Verfication of eligible flavors.250.51 Formulas for articles, eligible arti-

cles, and products manufactured with de-natured spirits.

250.52 Still wines containing carbon dioxide.250.53 Changes of formulas.250.54 Filing and disposition of formulas.250.55 Previously approved formulas.

Subpart E—Taxpayment of Liquors andArticles in Puerto Rico

BONDS

250.61 General.250.62 Corporate surety.250.62a Filing of powers of attorney.250.62b Execution of powers of attorney.250.63 Deposit of securities in lieu of cor-

porate surety.250.64 Consents of surety.250.65 Authority to approve bonds and con-

sents of surety.250.66 Bond, ATF Form 5110.50—Distilled

spirits.250.67 Bond, Form 2897—Wine.250.68 Bond, Form 2898—Beer.250.68a Bond account.250.69 Strengthening bonds.250.70 New or superseding bonds.250.70a Notice of approval of bonds.

TERMINATION OF BONDS

250.71 Termination of bonds.250.72 Application of surety for relief from

bond.250.73 Relief of surety from bond.250.74 Release of pledged securities.250.75 Form 1490, Notice of Termination of

Bond.

PERMITS REQUIRED

250.76 Insular permits.

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27 CFR Ch. I (4-1-97 Edition)Pt. 250

DISTILLED SPIRITS

250.77 Subject to tax.250.78 Application and permit, ATF Form

5110.51.250.79 Inspection or gauge and computation

of tax.250.79a Computation of effective tax rate.250.80 Deferred payment of tax—release of

spirits.250.81 Prepayment of tax and release of

spirits.250.82 Permit to ship.

PACKAGES OF DISTILLED SPIRITS

250.86 Authority for shipment.250.87 Evidence of taxpayment.

WINE

250.92 Subject to tax.250.93 Application and permit, Form 2900.250.94 Computation of tax.250.95 Deferred payment of tax—release of

wine.250.96 Prepayment of tax—release of wine.250.96a [Reserved]250.96b Permit to ship.250.97 Marking containers of wine.

BEER

250.101 Subject to tax.250.102 Application and permit, Form 2900.250.103 Computation of tax.250.104 Deferred payment of tax—release of

beer.250.105 Prepayment of tax—release of beer.250.105a Permit to ship.250.106 Marking containers of beer.

ARTICLES

250.107 Taxable status.250.108 Application for permit, ATF Form

5110.51 and/or Form 2900.250.109 Taxpayment.250.110 Release of articles or liquors.

PAYMENT OF TAX BY RETURN

250.111 General.250.112 Returns for semimonthly periods.250.112a Payment of tax by electronic fund

transfer.250.113 Returns for prepayment of taxes.

PERMIT TO SHIP LIQUORS AND ARTICLES

250.114 Permit to ship required.250.115 Application, Form 487B.250.116 Issuance of permit, Form 487B, and

customs inspection.

PROCEDURE AT PORT OF ARRIVAL

250.117 Action by carrier.250.118 Inspection by district director of

customs at port of arrival.250.119 Disposition of forms by district di-

rector of customs.

Subpart F—Liquors and Articles Purchasedby Tourists in Puerto Rico

250.125 Taxable.250.126 Taxpayment in Puerto Rico.250.128 Taxpayment at port of arrival.

Subpart G—Closures for Distilled SpiritsFrom Puerto Rico

250.135 Containers of distilled spirits to bearclosures.

250.136 Affixing closures.

Subpart H—Records and Reports of LiquorsFrom Puerto Rico

250.163 General requirements.250.164 Proprietors of taxpaid premises.250.164a Package gauge record.250.165 Certificate of effective tax rate com-

putation.

Subpart I—Claims for Drawback on EligibleArticles From Puerto Rico

250.170 Drawback of tax.250.171 Special tax.250.172 Bonds.250.173 Claims for drawback.250.174 Records.

Subpart Ia—Shipment of Denatured Spiritsand Products Made With DenaturedSpirits to the United States From PuertoRico

250.191 Notice of shipment.250.192 Samples and analysis.250.193 Notification of tax liability.250.194 Detention of articles.

Subpart Ib—Shipment of Bulk Distilled Spir-its From Puerto Rico, Without Paymentof Tax, for Transfer From Customs Cus-tody to Internal Revenue Bond

250.196 General.250.197 Furnishing formula to consignee.250.198 [Reserved]250.199 Application and permit to ship, ATF

Form 5110.31.250.199a Action by revenue agent.250.199b Issuance and disposition of permit.250.199c Action by carrier.250.199d Customs inspection and release.250.199e [Reserved]250.199f Consignee premises.

Subpart J—Products Coming Into theUnited States From the Virgin Islands

250.200 Taxable status.250.201 Products exempt from tax.250.201a Production in the Virgin Islands for

tax-free shipment to the United States.250.201b [Reserved]


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Bureau of Alcohol, Tobacco and Firearms, Treasury Pt. 250

250.201c Shipments of bulk distilled spiritsto the United States without payment oftax.

250.202 Requirements of the Federal AlcoholAdministration Act.

250.203 Containers of 1 gallon (3.785 liters) orless.

250.203a Containers in excess of 1 gallon(3.785 liters).

250.204 Regauge.250.204a Verification of eligible wines and

eligible flavors.250.205 Certificate.250.206 Marking packages and cases.250.207 Destruction of marks and brands.250.209 Samples.


250.210 Liquor dealer’s special taxes.250.211 Warehouse receipts covering dis-

tilled spirits.

Subpart K—Formulas for Products From theVirgin Islands

250.220 Formulas for liquors.250.221 Formulas for articles, eligible arti-

cles, and products manufactured with de-natured spirits.

250.222 Still wines containing carbon diox-ide.

250.223 Changes of formulas.250.224 Filing and disposition of formulas.250.225 Previously approved formulas.

Subpart L—Closures for Distilled Spirits Fromthe Virgin Islands

GENERAL



Subpart M—Procedure at Port of EntryFrom the Virgin Islands

250.260 Certificate.250.261 Action by district director of cus-

toms.250.262 Determination of tax on distilled

spirits.250.262a Computation of effective tax rate.250.263 Determination of tax on beer.250.264 Determination of tax on wine.250.265 Determination of tax on articles.250.266 Tax payment.250.267 Payment of tax by electronic fund

transfer.

Subpart N—Records and Reports of LiquorsFrom the Virgin Islands

RECORD AND REPORT OF LIQUORS BROUGHTINTO THE UNITED STATES

250.272 General requirements.250.273 Proprietors of taxpaid premises.

250.273a Transfer record.250.273b Package gauge record.

FILING AND RETENTION OF RECORDS ANDREPORTS

250.275 Filing.250.276 Retention.

REPORT OF DISPOSITION OF RED STRIP STAMPSON DISCONTINUANCE OF BUSINESS

250.277 Procedure.

Subpart O—Tax-Free Shipments to theUnited States From the Virgin Islands

250.291 General.

SHIPMENT OF INDUSTRIAL SPIRITS ANDSPECIALLY DENATURED SPIRITS

250.292 Copy of consignee’s permit underpart 20 or 22.

250.293 Marks on containers.250.294 Record of shipment.

SHIPMENT OF COMPLETELY DENATURED ALCO-HOL AND PRODUCTS MADE WITH DENATUREDSPIRITS

250.295 Marks on containers.250.296 Record of shipment.

ARRIVAL IN THE UNITED STATES

250.297 General.

Subpart Oa—Shipment of Bulk DistilledSpirits From the Virgin Islands, WithoutPayment of Tax, for Transfer From Cus-toms Custody to Internal RevenueBond

250.300 General.250.301 Preparation of transfer record.250.302 Gauge and certification.250.303 Customs inspection and release.250.304 Bulk conveyances to be sealed.250.305 Receipt by consignee.

Subpart Ob—Claims for Drawback onEligible Articles From the Virgin Islands

250.306 Drawback of tax.250.307 Special tax.250.308 Bonds.250.309 Claims for drawback.250.310 Records.

Subpart P—Requirements for Liquor Bottles

250.311 Scope of subpart.250.312 Standards of fill.250.314 Distinctive liquor bottles.250.315 [Reserved]250.316 Bottles not constituting approved

containers.250.317 Bottles to be used for display pur-

poses.250.318 Liquor bottles denied entry.


26

27 CFR Ch. I (4-1-97 Edition)§ 250.1

250.319 Used liquor bottles.

Subpart Q—Miscellaneous Provisions

250.331 Alternate methods or procedures.

AUTHORITY: 19 U.S.C. 81c; 26 U.S.C. 5001,5007, 5008, 5010, 5041, 5051, 5061, 5081, 5111, 5112,5114, 5121, 5122, 5124, 5131–5134, 5141, 5146, 5207,5232, 5271, 5276, 5301, 5314, 5555, 6001, 6301, 6302,6804, 7101, 7102, 7651, 7652, 7805; 27 U.S.C. 203,205; 31 U.S.C. 9301, 9303, 9304, 9306.

SOURCE: 20 FR 6077, Aug. 20, 1955, unlessotherwise noted. Redesignated at 40 FR 16835,Apr. 15, 1975.


§ 250.1 Alcoholic products coming intothe United States from Puerto Ricoand the Virgin Islands.

This part, ‘‘Liquors and Articles fromPuerto Rico and the Virgin Islands,’’relates to:

(a) The production, bondedwarehousing, and withdrawal of dis-tilled spirits and denatured spirits, andthe manufacture of articles in PuertoRico and the Virgin Islands to bebrought into the United States free oftax;

(b) The collection of internal revenuetaxes on taxable alcoholic productscoming into the United States fromPuerto Rico and the Virgin Islands;

(c) The transfer, without payment oftax, of Puerto Rican and Virgin Islandsspirits in bulk containers or by pipe-line from customs custody to the bond-ed premises of a distilled spirits plantqualified under part 19 of this chapter;

(d) The deposit of the distilled spiritsexcise taxes, limited to the lesser of$10.50 or the rate in section 5001(a)(1)per proof gallon, into the Treasuries ofPuerto Rico and the Virgin Islands onall articles containing distilled spiritsas defined in section 7652, produced bythose two U.S. possessions, and trans-ported into the United States (less cer-tain amounts); and

(e) The deposit of the distilled spiritsexcise taxes, limited to the lesser of$10.50 or the rate in section 5001(a)(1)per proof gallon, into the Treasuries ofPuerto Rico and the Virgin Islands onall rum imported into the UnitedStates (including rum from possessions

other than Puerto Rico and the VirginIslands), less certain amounts.

(Approved by the Office of Management andBudget under control number 1512–0277)

(Sec. 221, Pub. L. 98–67, 97 Stat. 369 (26 U.S.C.7652)

[T.D. ATF–175, 49 FR 20803, May 16, 1984, asamended by T.D. ATF–203, 50 FR 15887, Apr.23, 1985]

§ 250.2 Forms prescribed.(a) The Director is authorized to pre-

scribe all forms required by this part,including applications, reports, re-turns, and records. All of the informa-tion called for in each form shall befurnished as indicated by the headingson the form and the instructions on orpertaining to the form. In addition, in-formation called for in each form shallbe furnished as required by this part.

(b) Requests for forms should bemailed to the ATF Distribution Center,7943 Angus Court, Springfield, Virginia22153.

(5 U.S.C. 552(a) (80 Stat. 383, as amended))

[T.D. ATF–92, 46 FR 46920, Sept. 23, 1981, asamended by T.D. ATF–249, 52 FR 5963, Feb.27, 1987; T.D. ATF–372, 41 FR 20725, May 8,1996]


§ 250.11 Meaning of terms.When used in this part and in forms

prescribed under this part, where nototherwise distinctly expressed or mani-festly incompatible with the intentthereof, terms shall have the meaningascribed in this section. Words in theplural form shall include the singularand vice versa, and words importingthe masculine gender shall include thefeminine. The terms ‘‘includes’’ and‘‘including’’ do not exclude things notenumerated which are in the same gen-eral class.

Article. Any preparation unfit for bev-erage use, made with or containing:

(1) Wine or beer;(2) Distilled spirits or industrial spir-

its; or(3) Denatured spirits when such prep-

aration is not manufactured under theprovisions of this chapter.

ATF officer. An officer or employee ofthe Bureau of Alcohol, Tobacco andFirearms (ATF) authorized to perform


27

Bureau of Alcohol, Tobacco and Firearms, Treasury § 250.11

any function relating to the adminis-tration or enforcement of this part.

Bank. Any commercial bank.Banking day. Any day during which a

bank is open to the public for carryingon substantially all its banking func-tions.

Beer. Beer, ale, porter, stout, andother similar fermented beverages (in-cluding sake or similar products) ofany name or description containingone-half of 1 percent or more of alcoholby volume, brewed, or produced frommalt, wholly or in part, or from anysubstitute therefor.

Bottler. Any person required to hold abasic permit as a bottler under 27U.S.C. 203(b)(1).

Bulk container. Any container havinga capacity of more than 1 gallon.

Bulk distilled spirits. The term ‘‘bulkdistilled spirits’’ means distilled spiritsin a container having a capacity in ex-cess of 1 gallon.

Bureau of Alcoholic Beverage Taxes.Bureau of Alcoholic Beverage Taxes ofthe Commonwealth of Puerto Rico.

Business day. Any day, other than aSaturday, Sunday, or a legal holiday.(The term legal holiday includes allholidays in the District of Columbiaand all legal holidays in the Common-wealth of Puerto Rico.)

Chief, Puerto Rico Operations. The pri-mary representative in Puerto Rico ofthe Bureau of Alcohol, Tobacco andFirearms. His complete address is:Chief, Puerto Rico Operations, Bureauof Alcohol, Tobacco and Firearms, U.S.Courthouse and Federal Building,Room 659, Avenida Carlos Chardon,Hato Rey, Puerto Rico 00919.

Commercial bank. A bank, whether ornot a member of the Federal ReserveSystem, which has access to the Fed-eral Reserve Communications System(FRCS) or Fedwire. The ‘‘FRCS’’ or‘‘Fedwire’’ is a communications net-work that allows Federal Reserve Sys-tem member banks to effect a transferof funds for their customers (or othercommercial banks) to the Treasury Ac-count at the Federal Reserve Bank ofNew York.

Customs officer. Any officer of theCustoms Service or any commissioned,warrant, or petty officer of the CoastGuard, or any agent or other person au-thorized by law or designated by the

Secretary of the Treasury to performany duties of an officer of the CustomsService.

Denatured spirits. Industrial spiritsdenatured in accordance with approvedformulas in distilled spirits plants es-tablished and operated under the provi-sions of this chapter relating to the es-tablishment and operation of plantsqualified to denature spirits in theUnited States or, in respect of a prod-uct of the Virgin Islands, shall alsomean spirits denatured in accordancewith approved formulas in plants es-tablished under the provisions of theVirgin Islands regulations and shall in-clude, unless otherwise limited, bothcompletely and specially denaturedspirits.

Director. The Director, Bureau of Al-cohol, Tobacco and Firearms, the De-partment of the Treasury, Washington,D.C.

Director of the service center. A direc-tor of an internal revenue service cen-ter.

Distilled spirits or spirits. That sub-stance known as ethyl alcohol, etha-nol, or spirits of wine, in any form (in-cluding all dilutions and mixturesthereof, from whatever source or bywhatever process produced), but shallnot include industrial spirits as definedin this part except when used in ref-erence to such spirits which would besubject to tax if brought into the Unit-ed States.

District director. A district director ofinternal revenue.

District director of customs. The dis-trict director of customs at a head-quarters port of the district (except thedistrict of New York, N.Y.); the areadirectors of customs in the district ofNew York, N.Y.; and the port directorat a port not designated as a head-quarters port.

Effective tax rate. The net tax rateafter reduction for any credit allowableunder 26 U.S.C. 5010 for wine and flavorcontent at which the tax imposed ondistilled spirits by 26 U.S.C. 7652 is paidor determined.

Electronic fund transfer or EFT. Anytransfer of funds effected by a propri-etor’s commercial bank, either directlyor through a correspondent banking re-lationship, via the Federal ReserveCommunications System (FRCS) or


28

27 CFR Ch. I (4-1-97 Edition)§ 250.11

Fedwire to the Treasury Account atthe Federal Reserve Bank of New York.

Eligible article. Any medicine, medici-nal preparation, food product, flavor,flavoring extract or perfume whichcontains distilled spirits, is unfit forbeverage purposes, and has been or willbe brought into the United States fromPuerto Rico or the Virgin Islandsunder the provisions of 26 U.S.C.7652(g).

Eligible flavor. A flavor which:(1) Is of a type that is eligible for

drawback of tax under 26 U.S.C. 5134,(2) Was not manufactured on the

premises of a distilled spirits plant,and

(3) Was not subjected to distillationon distilled spirits plant premises suchthat the flavor does not remain in thefinished product.

Eligible wine. A wine containing notmore than 0.392 gram of carbon dioxideper 100 milliliters of wine which hasnot been subject to distillation at adistilled spirits plant after receipt inbond.

Executed under penalties of perjury.Signed with the prescribed declarationunder the penalties of perjury as pro-vided on or with respect to the return,claim, form, or other document, orwhere no form of declaration is pre-scribed, with the declaration: ‘‘I de-clare under the penalties of perjurythat this ———— (insert type of docu-ment, such as statement, report, cer-tificate, application, claim, or otherdocument), including the documentssubmitted in support thereof, has beenexamined by me and, to the best of myknowledge and belief, is true, correct,and complete.’’

Fiscal year. The period which beginsOctober 1 and ends on the followingSeptember 30.

Gallon or wine gallon. The liquidmeasure equivalent to the volume of231 cubic inches.

Importer. Any person who importsdistilled spirits, wines, or beer into theUnited States.

Industrial spirits. As to products ofPuerto Rico, distilled spirits producedand warehoused at and withdrawn fromdistilled spirits plants established andoperated under the provisions of thischapter relating to the establishmentof such plants and the production,

bonded warehousing, and withdrawalfrom bond of distilled spirits in theUnited States, or as to products of theVirgin Islands, distilled spirits pro-duced, warehoused, and withdrawnunder Virgin Islands regulations.

Kind. As applied to spirits, kind shallmean class and type as prescribed in 27CFR part 5. As applied to wines, kindshall mean the classes and types ofwines as prescribed in 27 CFR part 4.

Liquor bottle. A bottle made of glassor earthenware, or of other suitablematerial approved by the Food andDrug Administration, which has beendesigned or is intended for use as a con-tainer for distilled spirits for sale forbeverage purposes and which has beendetermined by the Director to ade-quately protect the revenue.

Liquors. Industrial spirits, distilledspirits, liqueurs, cordials and similarcompounds, wines, and beer or any al-coholic preparation fit for beverageuse.

Permit. A formal written authoriza-tion of the Secretary of the Treasury ofPuerto Rico.

Person. An individual, a trust, an es-tate, a partnership, an association, acompany, or a corporation.

Proof gallon. A gallon of liquid at 60degrees Fahrenheit which contains 50percent by volume of ethyl alcoholhaving a specific gravity of 0.7939 at 60degrees Fahrenheit referred to water at60 degrees Fahrenheit as unity or thealcoholic equivalent thereof.

Rectifier. Any person required to holda rectifier’s basic permit under 27U.S.C. 203(b)(1).

Region. A Bureau of Alcohol, Tobaccoand Firearms Region.

Regional director (compliance). Theprincipal ATF regioal official respon-sible for administering regulations inthis part.

Revenue Agent. Any duly authorizedCommonwealth Internal RevenueAgent of the Department of the Treas-ury of Puerto Rico.

Secretary. The Secretary of the Treas-ury of Puerto Rico.

Secretary or his delegate. The Sec-retary or any officer or employee of theDepartment of the Treasury of PuertoRico duly authorized by the Secretaryto perform the function mentioned ordescribed in this part.


29


Taxpaid. As used in this part with re-spect to liquors or articles of PuertoRican manufacture, includes liquors orarticles on which the tax was computedbut with respect to which payment wasdeferred under the provisions of sub-part E of this part.

Treasury Account. The Department ofthe Treasury’s General Account at theFederal Reserve Bank of New York.

United States. The States and the Dis-trict of Columbia.

U.S.C. The United States Code.United States Bureau of Alcohol, To-

bacco and Firearms office. The Bureau ofAlcohol, Tobacco and Firearms officein Puerto Rico operating under the di-rection of the Regional Director (Com-pliance), North Atlantic Region, NewYork, NY 10048.

Virgin Islands regulations. Regulationsissued or adopted by the Governor ofthe Virgin Islands, or his duly author-ized agents, with the concurrence ofthe Secretary of the Treasury of theUnited States, or his delegate, underthe provisions of 26 U.S.C. 5314, asamended, and § 250.201a.

Wine. Still wine, vermouth, or otheraperitif wine, imitation, substandard,or artificial wine, compounds des-ignated as wine, flavored, rectified, orsweetened wine, champagne or spar-kling wine, and artificially carbonatedwine, containing not over 24 percent ofalcohol by volume. Wines containingmore than 24 percent of alcohol by vol-ume are classed and taxed as distilledspirits.

(68A Stat. 917, as amended (26 U.S.C. 7805); 49Stat. 981, as amended (27 U.S.C. 205) Aug. 16,1954, ch. 736, 68A Stat. 775 (26 U.S.C. 6301);June 29, 1956, ch. 462, 70 Stat. 391 (26 U.S.C.6301))[T.D. ATF–48, 43 FR 13551, Mar. 31, 1978]

EDITORIAL NOTE: For FEDERAL REGISTER ci-tations affecting § 250.11, see the List of CFRSections Affected in the Finding Aids sec-tion of this volume.

Subpart Ca—Rum Imported Intothe United States From AreasOther Than Puerto Rico andthe Virgin Islands

§ 250.30 Excise taxes.Distilled spirits excise taxes, less the

estimated amounts necessary for pay-ment of refunds and drawbacks, col-

lected on all rum imported into theUnited States (including rum from pos-sessions other than Puerto Rico andthe Virgin Islands), will be depositedinto the Treasuries of Puerto Rico andthe Virgin Islands according to the for-mula described in § 250.31. The amountdeposited into the Treasuries of PuertoRico and the Virgin Islands shall be thelesser of $10.50, or the rate imposed by26 U.S.C. 5001(a)(1) (including adjust-ments to the effective tax rate under 26U.S.C. 5010), on each proof gallon ofrum imported into the United States.

(Aug. 16, 1954, Chapter 736, 68A Stat. 907, asamended (26 U.S.C. 7652))

[T.D. ATF–203, 50 FR 15888, Apr. 23, 1985]

§ 250.31 Formula.

(a) The amount of excise taxes col-lected on rum that is imported into theUnited States from areas other thanPuerto Rico and the Virgin Islandsshall be deposited into the Treasuriesof Puerto Rico and the Virgin Islandsat the rate prescribed in 26 U.S.C.7652(f). The distribution of suchamount between Puerto Rico and theVirgin Islands shall be computed byusing a permanent base percentage,which represents the excise taxes col-lected on rum brought into the UnitedStates from Puerto Rico and the VirginIslands during fiscal year 1983. Thisbase percentage is 87.626889 percent forPuerto Rico and 12.373111 percent forthe Virgin Islands. The formula shallbe as follows:

(1) Multiply the total excise taxescollected on rum brought into theUnited States (including rum fromPuerto Rico and the Virgin Islands)during the previous fiscal year (Octo-ber 1–September 30) by the base per-centages to determine the relativeshares of the entire U.S. rum marketthat will be allotted to Puerto Ricoand the Virgin Islands;

(2) Subtract each of these sharesfrom the excise taxes collected on rumtransported to the United States fromPuerto Rico and the Virgin Islands, re-spectively, during the previous fiscalyear to determine each possession’sloss or gain in relation to the previousfiscal year’s U.S. rum market. Divide


30

27 CFR Ch. I (4-1-97 Edition)§ 250.35

these results by the excise taxes col-lected on rum imported during the pre-vious fiscal year from areas other thanPuerto Rico and the Virgin Islands.

(b) Notwithstanding the formula pre-scribed in paragraph (a) above, the Vir-gin Islands’ share of the excise taxes onrum imported into the United Statesfrom areas other than Puerto Rico andthe Virgin Islands shall not exceed 49percent nor drop below 12.373111 per-cent. Puerto Rico’s share of the excisetaxes on rum imported into the UnitedStates from areas other than PuertoRico and the Virgin Islands shall notexceed 87.626889 percent nor drop below51 percent.

(c) The percentage for the distribu-tion of the excise taxes collected onrum imported into the United Statesfrom areas other than Puerto Rico andthe Virgin Islands, that will be paidover to the Treasuries of Puerto Ricoand the Virgin Islands, shall be effec-tive on March 1 of each year, and shallremain in effect until March 1 of thefollowing year.

(d) The method for transferring theexcise tax collections on rum importedfrom areas other than Puerto Rico andthe Virgin Islands, into the Treasuriesof Puerto Rico and the Virgin Islandsshall be the same as the method usedfor transferring excise taxes into theTreasury of Puerto Rico on distilledspirits (with an alcohol content of atleast 92 percent rum) brought into theUnited States from Puerto Rico.

(e) The formula prescribed in thissection shall take effect on March 1,1987. Prior to that date, Puerto Ricoshall continue to receive 86.4 percent ofthe eligible excise taxes on rum im-ported from areas other than PuertoRico and the Virgin Islands. The VirginIslands shall continue to receive 13.6percent of these eligible excise taxesuntil March 1, 1987.


[T.D. ATF–233, 51 FR 28078, Aug. 5, 1986; 52FR 2222, Jan. 21, 1987]

Subpart Cb—Products ComingInto the United States FromPuerto Rico

§ 250.35 Taxable status.

(a) Liquors coming into the UnitedStates from Puerto Rico, except as pro-vided in § 250.36, are subject to a taxequal to the internal revenue tax im-posed on the production in the UnitedStates of like liquors. Articles cominginto the United States from PuertoRico, except as provided in § 250.36, aresubject to tax on the liquors containedtherein at the rates imposed in theUnited States on like liquors of domes-tic production.

(b) The excise taxes collected on dis-tilled spirits or articles containing dis-tilled spirits shall be deposited into theTreasury of Puerto Rico only if at least92 percent of the alcoholic content ofsuch products is rum. The amount de-posited into the Treasury of PuertoRico shall not exceed the lesser of$10.50, or the rate imposed by 26 U.S.C.5001(a)(1) (including adjustments to theeffective tax rate under 26 U.S.C. 5010),on each proof gallon of such distilledspirits or articles, other than eligiblearticles, containing distilled spiritscoming into the United States orconsumed on the island. Such excisetax deposits will be reduced by the esti-mated amount necessary for paymentof refunds and drawbacks.

(c) Except for products described in26 U.S.C. 7652(c), no excise taxes shallbe deposited into the Treasury of Puer-to Rico if an excise tax subsidy is pro-vided by Puerto Rico that is of a kinddifferent from, or in an amount pervalue or volume of production greaterthan, any subsidy offered by PuertoRico to industries manufacturing prod-ucts not subject to Federal excise tax.

(Sec. 2682, Pub. L. 98–369, 98 Stat. 494 (26U.S.C. 7652))

[T.D. ATF–175, 49 FR 20804, May 16, 1984, asamended by T.D. ATF–203, 50 FR 15888, Apr.23, 1985; T.D. ATF–263, 52 FR 46593, Dec. 9,1987]


31


§ 250.36 Products exempt from tax.

(a) General. Industrial spirits, dena-tured spirits, and products made withdenatured spirits in Puerto Rico maybe brought into the United Stateswithout incurring tax liability imposedby 26 U.S.C. 5001 or 7652.

(b) Industrial spirits. A distiller of in-dustrial spirits who registers, files abond, and pays special (occupational)tax as a distilled spirits plant in ac-cordance with part 19 of this chaptermay ship industrial spirits to a tax-freealcohol user in the United States whoholds a permit and has paid special (oc-cupational) tax under part 22 of thischapter. These shipments shall bemade in accordance with the require-ments of parts 19 and 22 of this chapter.

(c) Denatured spirits. A distiller whoregisters, files a bond, and pays special(occupational) tax as a distilled spiritsplant in accordance with part 19 of thischapter and who denatures spirits inaccordance with parts 19 and 21 of thischapter may ship (1) completely dena-tured alcohol to anyone in the UnitedStates, and/or (2) specially denaturedspirits to a dealer or user of speciallydenatured spirits in the United Statesor Puerto Rico who holds a permit andhas paid special (occupational) taxunder part 20 of this chapter. Theseshipments shall be made in accordancewith the requirements of parts 19 and20 of this chapter, and subpart Ia ofthis part.

(d) Products made with denatured spir-its. (1) A person in Puerto Rico whomanufactures products with com-pletely denatured alcohol in accord-ance with the requirements of part 20of this chapter may ship those productsto the United States in accordancewith the requirements of part 20 of thischapter, and Subpart Ia of this part.

(2) A person in Puerto Rico who man-ufactures products with specially dena-tured spirits may ship those productsto the United States if that person (i)obtainsa permit to use specially dena-tured spirits, and pays special (occupa-tional) tax, under part 20 of this chap-ter, and (ii) complies with the require-ments of part 20 of this chapter andSubpart Ia of this part relating to the

manufacture and shipment of thoseproducts.

[T.D. ATF–199, 50 FR 9198, Mar. 6, 1985; T.D.ATF–199, 50 FR 20099, May, 14, 1985, asamended by T.D. ATF–271, 53 FR 17559, May17, 1988]

§§ 250.36a—250.36b [Reserved]

§ 250.36c Shipments of bulk distilledspirits to the United States withoutpayment of tax.

Bulk distilled spirits may be broughtinto the United States from PuertoRico without payment of tax for trans-fer from customs custody to the bondedpremises of a distilled spirits plantqualified under part 19 of this chapter.Such shipments are subject to the pro-visions of subpart Ib.

[T.D. ATF–62, 44 FR 71709, Dec. 11, 1979]

§ 250.37 United States Bureau of Alco-hol, Tobacco and Firearms office.

The United States Bureau of Alcohol,Tobacco and Firearms office is author-ized to collect internal revenue taxeson liquors and articles subject to tax,which are to be shipped to the UnitedStates. Whenever the internal revenuetax is paid in Puerto Rico, other thanby tourists in accordance with subpartF of this part, the tax shall be paid tothe United States Bureau of Alcohol,Tobacco and Firearms office as definedin this part and as provided in subpartE of this part.

[T.D. ATF–251, 52 FR 19338, May 22, 1987]

§ 250.38 Containers of distilled spirits.

Containers of distilled spiritsbrought into the United States fromPuerto Rico, having a capacity of notmore than 1 gallon (3.785 liters), shallconform to the requirements of subpartP of this part.

[T.D. ATF–34, 41 FR 46863, Oct. 26, 1976]

§ 250.39 Labels.

All labels affixed to bottles of liquorscoming into the United States shallconform to the requirements of theFederal Alcohol Administration Actand implementing regulations (parts 4,5, and 7 of this chapter).

[T.D. ATF–48, 44 FR 55851, Sept. 28, 1979]


32

27 CFR Ch. I (4-1-97 Edition)§ 250.40

§ 250.40 Marking containers of dis-tilled spirits.

The distiller, rectifier, or bottlershall serially number each case, barrel,cask, or similar container of distilledspirits filled for shipment to the UnitedStates. In addition to the serial num-ber of the container, the distiller, rec-tifier, or bottler shall plainly print,stamp, or stencil with durable coloringmaterial, in letters and figures not lessthan one-half inch high, on the head ofeach barrel, cask or similar containeror on one side of each case, as follows:

(a) The name of the distiller, rec-tifier, or bottler.

(b) The brand name and kind of liq-uor;

(c) The wine and proof gallon con-tents; or, for bottles filled according tothe metric standards of fill prescribedby § 5.47a, of this chapter, the contentsin liters and the proof of the spirits;and

(d) In the case of barrels or casks, theserial number of the permit to ship,Form 487–B, prefixed by the number ofsuch form (e.g., ‘‘487–B–61–1’’)

(e) In the case of bulk containersshipped to the United States under sub-part Ib, the serial number of the appli-cation and permit to ship, ATF Form5110.31, instead of the serial number ofForm 487–B.

[T.D. ATF–43, 42 FR 30836, June 17, 1977; asamended by T.D. ATF–62, 44 FR 71709, Dec.11, 1979]

§ 250.41 Destruction of marks andbrands.

The marks, brands, and serial num-bers required by this part to be placedon barrels, casks, or similar contain-ers, or cases, shall not be removed orobscured or obliterated before the con-tents thereof have been removed.

(Sec. 201, Pub. L. 85–859, 1358, as amended, 26U.S.C. 5205)

[T.D. ATF–198, 50 FR 8548, Mar. 1, 1985]

§ 250.43 Samples.

The Director may require samples ofliquors and articles to be submittedwhenever desired for laboratory analy-

sis in order to determine the rates oftax applicable thereto.

[20 FR 6077, Aug. 20, 1955, as amended by T.D.7006, 34 FR 2250, Feb. 15, 1969. Redesignatedat 40 FR 16835, Apr. 15, 1975]


§ 250.44 Liquor dealer’s special taxes.

Every person bringing liquors intothe United States from Puerto Rico,who sells, or offers for sale, such liq-uors shall file Form 5630.5 with ATF inaccordance with the instructions of theform, and pay special (occupational)tax as a wholesale dealer in liquor or asa retail dealer in liquor in accordancewith the law and regulations governingthe payment of such special taxes (part194 of this chapter).

(Sec. 201, Pub. L. 85–859, 72 Stat. 1340 asamended, 1343 as amended, 1344 as amended(26 U.S.C. 5111, 5112, 5121, 5122))

[T.D. ATF–70, 45 FR 33980, May 21, 1980, asamended by T.D. ATF–251, 52 FR 19338, May22, 1987]

§ 250.45 Warehouse receipts coveringdistilled spirits.

Since the sale of warehouse receiptsfor distilled spirits is equivalent to thesale of distilled spirits, every personbringing distilled spirits into the Unit-ed States from Puerto Rico, who sells,or offers for sale, warehouse receiptsfor distilled spirits stored in ware-houses, or elsewhere, incurs liability tospecial tax as a dealer in liquors at theplace where such warehouse receiptsare sold, or offered for sale, and mustfile return and pay occupational tax asprovided in § 250.44.

(68A Stat. 618, 620, 621; 26 U.S.C. 5111, 5112,5121, 5122)

§ 250.46 Distilled spirits plant propri-etor’s special (occupational) tax.

Every proprietor of a distilled spiritsplant producing industrial spirits, de-natured spirits, or products made withdenatured spirits, for shipment to theUnited States, shall file Form 5630.5with ATF in accordance with instruc-tions on the form and pay special (oc-cupational) tax as a distilled spirits


33


plant proprietor in accordance withpart 19 of this chapter.

(26. U.S.C. 5081, 5314)

[T.D. ATF–271, 53 FR 17559, May 17, 1988]

§ 250.47 Specially denatured spiritsuser’s and dealer’s special (occupa-tional) taxes.

Every user of specially denaturedspirits who manufactures productsmade with such spirits for shipment tothe United States, and every dealer inspecially denatured spirits who shipssuch spirits to the United States, whois required by § 250.36 to obtain a per-mit under part 20 of this chapter, shallfile Form 5630.5 with ATF in accord-ance with instructions on the form andpay special (occupational) tax as a useror dealer in specially denatured spiritsunder part 20 of this chapter.

(26 U.S.C. 5271, 5276, 5314)

[T.D. ATF–271, 53 FR 17559, May 17, 1988]

Subpart D—Formulas for ProductsFrom Puerto Rico

SOURCE: 44 FR 71709, Dec. 11, 1979, unlessotherwise noted.

§ 250.50 Formulas for liquors.(a) Distilled spirits products. Except for

products which are exempt from tax, asspecified in § 250.36, formulas are re-quired by part 5 of this chapter for dis-tilled spirits products shipped to theUnited States from Puerto Rico. If aformula is submitted to cover only theproduction of spirits which are to betransferred to the bonded premises of aDSP under 26 U.S.C. 5232, the formulashall include a statement to that ef-fect. If any product contains liquorsmade outside of Puerto Rico, the coun-try of origin for each such liquor shallbe stated on the formula. These for-mulas shall be submitted on ATF Form5110.38, in accordance with § 250.54.

(b) Wine. Persons in Puerto Rico whoship wine to the United States shallcomply with the formula requirementsof 27 CFR part 240. If any wine containsliquors made outside of Puerto Rico,the country of origin for each such liq-uor shall be stated on the formula. Allformulas required by this paragraphshall be submitted on ATF Form 698

Supplemental, in accordance with§ 250.54.


[T.D. ATF–198, 50 FR 8549, Mar. 1, 1985]

§ 250.50a Verification of eligible fla-vors.

(a) Any person who, after December1, 1990, ships to the United States anydistilled spirits on which the tax hasbeen or is to be paid or determined atan effective tax rate based in part onthe alcohol content derived from anyeligible flavor not previously approvedon ATF Form 5530.5 (1678) or 5150.19shall, before the first tax determina-tion at that rate, request and receive astatement of eligibility for each flavorto be used in the computation of the ef-fective tax rate.

(b) To receive a statement of eligi-bility, the person shipping the distilledspirits shall submit to the ATF Na-tional Laboratory, 1401 Research Bou-levard, Rockville, MD 20850, the follow-ing:

(1) An 8-ounce sample; and(2) A statement of composition list-

ing the—(i) Name and percentage of alcohol by

volume of the flavor; and(ii) Name and quantity of each ingre-

dient used in the manufacture of theflavor.

(Approved by Office of Management andBudget under control number 1512–0203)

(Act of August 16, 1954, Pub. L. 591, 68A Stat.907, as amended (26 U.S.C. 7652); Sec. 201,Pub. L. 85–859, 72 Stat. 1314, as amended (26U.S.C. 5001); Sec. 6, Pub. L. 96–598, 94 Stat.3488, as amended (26 U.S.C. 5010))

[T.D. ATF–297, 55 FR 18066, Apr. 30, 1990]

§ 250.51 Formulas for articles, eligiblearticles and products manufacturedwith denatured spirits.

(a) Formulas for articles and eligible ar-ticles. Formulas for articles made withdistilled spirits must show the quan-tity and proof of the distilled spiritsused, and the percentage of alcohol byvolume contained in the finished prod-uct. Formulas for articles made withbeer or wine must show the kind andquantity thereof (liquid measure), andthe percent of alcohol by volume of


34

27 CFR Ch. I (4-1-97 Edition)§ 250.52

such beer or wine. Formulas and sam-ples for eligible articles are required inaccordance with subpart F of part 17 ofthis chapter.

(b) Formulas for products manufacturedwith denatured spirits. Products manu-factured with denatured spirits shall bemanufactured in accordance with theformula requirements of part 20 of thischapter for similar products made inthe United States.

(1) Products may be made with com-pletely denatured alcohol for saleunder brand names under part 20 of thischapter without obtaining an approvedformula. If ingredients are added insufficient quantities to materiallychange the composition and characterof the completely denatured alcohol,the product is not classified as com-pletely denatured alcohol and may notbe marked, branded, or sold as com-pletely denatured alcohol.

(2) Products made with specially de-natured spirits shall be made in accord-ance with (i) a general-use formula ap-proved as provided in part 20 of thischapter, or (ii) an approved formula onForm 5150.19, or previously approved onATF Form 1479–A or 27–B Supple-mental.

(c) Formulas required. Formulas re-quired by this section shall be submit-ted on Form 5150.19, except that for-mulas for eligible articles shall be sub-mitted on Form 5154.1 (formerly 1678).Formulas shall be submitted in accord-ance with § 250.54. Any formula for aneligible article approved on Form5150.19 prior to October 23, 1986 shallcontinue to be valid until revoked orvoluntarily surrendered. Any personholding such a formula is not requiredto submit a new formula.(Approved by the Office of Management andBudget under control number 1512–0494)

[44 FR 71709, Dec. 11, 1979, as amended byT.D. ATF–199, 50 FR 9198, Mar. 6, 1985; T.D.ATF–263, 52 FR 46593, Dec. 9, 1987; T.D. ATF–379, 61 FR 31427, June 20, 1996]

§ 250.52 Still wines containing carbondioxide.

(a) General. Still wines may containnot more than 0.392 gram of carbon di-oxide per 100 milliliters of wine; exceptthat a tolerance to this maximum limi-tation, not to exceed 0.009 gram of car-bon dioxide per 100 milliliters of wine,

will be allowed where the amount ofcarbon dioxide in excess of 0.392 gramper 100 milliliters of wine was due tomechanical variations which could notbe completely controlled under goodcommercial practices. Such tolerancewill not be allowed where it is foundthat the limitation of 0.392 gram of car-bon dioxide per 100 milliliters of wineis continuously or intentionally ex-ceeded, or where the variation resultsfrom the use of methods or equipmentnot in accord with good commercialpractices.

(b) Notice required. Proprietors in-tending to add carbon dioxide to, or re-tain carbon dioxide in, still wines to beshipped to the United States shall sub-mit a notice to the Chief, Puerto RicanOperations. The notice shall show thename and address of the proprietor andshall identify the method or process,the kinds (class and type) of wine, andthe type of equipment to be used. Acorrected notice shall be filed if thereis any change (except for minorchanges) in the information containedin the notice.

(c) Filing and disposition of notice. Thenotice required by paragraph (b) of thissection shall be submitted in quadru-plicate to the Chief, Puerto Rican Op-erations, who shall retain one copy,forward one copy to the Secretary, andone copy to the revenue agent at theproprietor’s premises, and return onecopy to the proprietor. The proprietorshall keep the notice available for ex-amination by revenue agents.

(Approved by the Office of Management andBudget under control number 1512–0352)(Sec. 201, Pub. L. 85–859, 72 Stat. 1331, asamended (26 U.S.C 5041))[20 FR 6077, Aug. 20, 1955. Redesignated at 40FR 16835, Apr. 15, 1975, and amended by T.D.ATF–172, 49 FR 14943, Apr. 16, 1984; T.D. ATF–251, 52 FR 19338, May 22, 1987]

§ 250.53 Changes of formulas.Any change in the ingredients com-

posing a product covered by an ap-proved formula will necessitate thesubmission of a new formula.

§ 250.54 Filing and disposition of for-mulas.

Prior to shipment, formulas requiredby this subpart shall be submitted inquadruplicate to and approved by the


35


Director. The Director shall retain onecopy, forward one copy to the Sec-retary, and one copy to the revenueagent at the premises of the applicant,and return one copy to the applicant.The applicant shall maintain copies ofapproved formulas available for exam-ination by revenue agents.

[44 FR 71709, Dec. 11, 1979, as amended byT.D. ATF–251, 52 FR 19338, May 22, 1987]

§ 250.55 Previously approved formulas.

Any formula approved on Form 27–BSupplemental prior to January 1, 1980,shall continue to be valid until revokedor voluntarily surrendered. Any personholding such a formula is not requiredto submit a new formula. If an ap-proved formula on Form 27–B Supple-mental indicates that carbon dioxidewill be added to, or retained in, stillwine, the notice requirement of § 250.52shall not apply.

Subpart E—Taxpayment of Liquorsand Articles in Puerto Rico

SOURCE: T.D. 6551, 26 FR 1490, Feb. 22, 1961,unless otherwise noted. Redesignated at 40FR 16835, Apr. 15, 1975.

BONDS

§ 250.61 General.

Every person filing a bond under thissubpart, or consent of surety on suchbond, shall file it with the regional di-rector (compliance). Any bond or con-sent of surety approved prior to July 1,1987, by the Officer-in-Charge, UnitedStates Internal Revenue Service shallcontinue to be valid until terminatedas provided in this subpart.

[T.D. ATF–251, 52 FR 19338, May 22, 1987]

§ 250.62 Corporate surety.

(a) Surety bonds may be given onlywith corporate sureties holding certifi-cates of authority from, and subject tothe limitations prescribed by, the Sec-retary of the Treasury, as set forth inthe current revision of U.S. TreasuryDepartment Circular No. 570 (Compa-nies Holding Certificates of Authorityas Acceptable Sureties on FederalBonds and as Acceptable ReinsuringCompanies).

(b) Treasury Department CircularNo. 570 is published in the FEDERALREGISTER annually as of the first work-day in July. As they occur, interim re-visions of the circular are published inthe FEDERAL REGISTER. Copies of thecircular may be obtained from theAudit Staff, Bureau of Government Fi-nancial Operations, Department of theTreasury, Washington, DC 20226.

(July 30, 1947, ch. 390, 61 Stat. 648, as amend-ed (6 U.S.C. 6, 7))[T.D. ATF–92, 46 FR 46921, Sept. 23, 1981]

§ 250.62a Filing of powers of attorney.Each bond, and each consent to

changes in the terms of a bond, shall beaccompanied by a power of attorneyauthorizing the agent or officer whoexecuted the bond or consent to so acton behalf of the surety. The regionaldirector (compliance) who is author-ized to approve the bond may, when hedeems it necessary, require additionalevidence of the authority of the agentor officer to execute the bond or con-sent.

(61 Stat. 648; 6 U.S.C. 6, 7)[T.D. ATF–2, 37 FR 22736, Oct. 21, 1972. Redes-ignated at 40 FR 16835, Apr. 15, 1975, asamended by T.D. ATF–251, 52 FR 19338, May22, 1987]

§ 250.62b Execution of powers of attor-ney.

The power of attorney shall be pre-pared on a form provided by the suretycompany and executed under the cor-porate seal of the company. If thepower of attorney submitted is otherthan a manually signed original, itshall be accompanied by certificationof its validity.

(61 Stat. 648; 6 U.S.C. 6, 7)[T.D. ATF–2, 37 FR 22736, Oct. 21, 1972. Redes-ignated at 40 FR 16835, Apr. 15, 1975]

§ 250.63 Deposit of securities in lieu ofcorporate surety.

In lieu of corporate surety, the prin-cipal may pledge and deposit, as suretyfor his bond, securities which aretransferable and are guaranteed as toboth interest and principal by theUnited States, in accordance with theprovisions of 31 CFR part 225—Accept-ance of Bonds, Notes or Other Obliga-tions Issued or Guaranteed by the


36

27 CFR Ch. I (4-1-97 Edition)§ 250.64

United States as Security in Lieu ofSurety or Sureties on Penal Bonds.

(5 U.S.C. 552(a) (80 Stat. 383, as amended); 61Stat. 650; 6 U.S.C. 15)

[T.D. 6551, 26 FR 1490, Feb. 22, 1961. Redesig-nated at 40 FR 16835, Apr. 15, 1975, andamended by T.D. ATF–92, 46 FR 46921, Sept.23, 1981]

§ 250.64 Consents of surety.

Consents of surety to changes in theterms of bonds shall be executed onForm 1533 by the principal and by thesurety with the same formality andproof of authority as is required for theexecution of bonds.

§ 250.65 Authority to approve bondsand consents of surety.

The regional director (compliance) isauthorized to approve all bonds andconsents of surety filed under this part.

[T.D. 6551, 26 FR 1490, Feb. 22, 1961. Redesig-nated at 40 FR 16835, Apr. 15, 1975, andamended by T.D. ATF–251, 52 FR 19338, May22, 1987]

§ 250.66 Bond, ATF Form 5110.50—Dis-tilled spirits.

(a) General. If any person intends toship to the United States, distilledspirits products of Puerto Rican manu-facture from bonded storage in PuertoRico on computation, but before pay-ment, of the tax imposed by 26 U.S.C.7652(a), equal to the tax imposed in theUnited States by 26 U.S.C. 5001(a)(1), heshall, before making any such ship-ment, furnish a bond ATF Form 5110.50,for each premises from which shipmentwill be made, to secure payment ofsuch tax, at the time and in the man-ner prescribed in this subpart, on alldistilled spirits products shipped. Thebond shall be executed in a penal sumnot less than the amount of unpaid taxwhich, at any one time, is chargeableagainst the bond. The penal sum ofsuch bond shall not exceed $1,000,000,but in no case shall the penal sum beless than $1,000.

(b) Blanket bond. Any person who isthe proprietor of more than one prem-ises in Puerto Rico from which ship-ment of spirits to the United Stateswill be made, may, in lieu of furnishingtwo or more separate bonds on ATF

Form 5110.50 as required by paragraph(a) of this section, furnish a blanketbond on ATF Form 5110.50. The penalsum of such blanket bond shall beequal to the sum of the penal sums ofall the bonds in lieu of which it isgiven. Such blanket bond on ATF Form5110.50 shall show each bonded ware-house and/or bonded processing roomand/or rectifying plant to be covered bythe bond, and the part of the totalpenal sum (computed in accordancewith paragraph (a) of this section) tobe allocated to each of the designatedpremises. If the penal sum of the bondallocated to a designated premises is inan amount less than the maximum pre-scribed in paragraph (a) of this section,transactions at such premises shall notexceed the quantity permissible, as re-flected by the penal sum allocated inthe bond to such premises. Such blan-ket bond shall contain the terms andconditions of the bonds in lieu of whichit is given and shall be conditionedthat the total amount of the bond shallbe available for satisfaction of any li-ability incurred under the terms andconditions of such bond.

(Act of August 16, 1954, 68A Stat. 847, asamended, 907, as amended (26 U.S.C 7101, 7102,7652))

[T.D. ATF–62, 44 FR 71710, Dec. 11, 1979]

§ 250.67 Bond, Form 2897—Wine.

Where a proprietor intends to with-draw, for purpose of shipment to theUnited States, wine of Puerto Ricanmanufacture from bonded storage inPuerto Rico on computation, but be-fore payment, of the tax imposed by 26U.S.C. 7652(a), equal to the tax imposedin the United States by 26 U.S.C. 5041,he shall, before making any such with-drawal, furnish a bond, Form 2897, tosecure payment of such tax, at thetime and in the manner prescribed inthis subpart, on all wine so withdrawn.The bond shall be executed in a penalsum not less than the amount of un-paid tax which, at any one time, ischargeable against the bond: Provided,That the penal sum of such bond shall


37

Bureau of Alcohol, Tobacco and Firearms, Treasury § 250.70a

not exceed $250,000, but in no case shallthe penal sum be less than $500.

(Aug. 16, 1954, Chapter 736, 68A Stat. 775, asamended, 847, as amended, 906, 907, as amend-ed (26 U.S.C. 6302, 7101, 7102, 7651(2)(B),7652(a)))


§ 250.68 Bond, Form 2898—Beer.

Where a brewer intends to withdraw,for purpose of shipment to the UnitedStates, beer of Puerto Rican manufac-ture from bonded storage in PuertoRico on computation, but before pay-ment, of the tax imposed by 26 U.S.C.7652(a), equal to the tax imposed in theUnited States by 26 U.S.C. 5051, heshall, before making any such with-drawal, furnish a bond, Form 2898, tosecure payment of such tax, at thetime and in the manner prescribed inthis subpart, on all beer so withdrawn.The bond shall be executed in a penalsum not less than the amount of un-paid tax which, at any one time, ischargeable against the bond: Provided,That the penal sum of such bond shallnot exceed $500,000, but in no case shallthe penal sum be less than $1,000.

(Aug. 16, 1954, Chapter 736, 68A Stat. 775, asamended, 847, as amended, 906, 907, as amend-ed (26 U.S.C. 6302, 7101, 7102, 7651(2)(B),7652(a)))


§ 250.68a Bond account.

Every person who files a bond underthis subpart shall keep an account ofthe charges against and credits to thebond if the penal sum of his bond is lessthan the maximum prescribed in§§ 250.66(a), 250.67, or § 250.68, or if thepenal sum allocated to his premisesunder § 250.66(b) is less than the pre-scribed maximum. He shall charge thebond with the amount of liability heaccepts at the time he executes ATFForm 5110.51 or 2900, and shall creditthe bond with the amount of the taxpaid at the time he files each return,ATF Form 5110.32, 2927, or 2929, and re-mittance. The account shall also show

the balance available under the bond atany one time.

[T.D. ATF–62, 44 FR 71710, Dec. 11, 1979]

§ 250.69 Strengthening bonds.

In all cases where the penal sum ofany bond becomes insufficient, theprincipal shall either give a strength-ening bond with the same surety to at-tain a sufficient penal sum, or give anew bond to cover the entire liability.Strengthening bonds will not be ap-proved where any notation is madethereon which is intended, or whichmay be construed, as a release of anyformer bond, or as limiting the amountof any bond to less than its full penalsum. Strengthening bonds shall showthe current date of execution and theeffective date.

§ 250.70 New or superseding bonds.

New bonds shall be required in caseof insolvency or removal of any surety,and may, at the discretion of the re-gional director (compliance), be re-quired in any other contingency affect-ing the validity or impairing the effi-ciency of an existing bond. Executors,administrators, assignees, receivers,trustees, or other persons acting in afiduciary capacity, continuing or liq-uidating the business of the principal,shall execute and file a new bond or ob-tain the consent of the surety or sure-ties on the existing bond or bonds.Where, under the provisions of § 250.72,the surety on any bond given underthis subpart has filed an application tobe relieved of liability under said bondand the principal desires or intends tocontinue the operations to which suchbond relates, he shall file a valid super-seding bond to be effective on or beforethe date specified in the surety’s no-tice. New or superseding bonds shallshow the current date of execution andthe effective date.

[T.D. 6551, 26 FR 1590, Feb. 22, 1961. Redesig-nated at 40 FR 16835, Apr. 15, 1975, andamended by T.D. ATF–251, 52 FR 19338, May22, 1987]

§ 250.70a Notice of approval of bonds.

Upon approval of an original, astrengthening, or a superseding bond,the regional director (compliance)


38

27 CFR Ch. I (4-1-97 Edition)§ 250.71

shall notify the Secretary, and the rev-enue agent at the premises, of the totalpenal sum of the bond or bonds, and inthe case of a blanket bond, the amountof the penal sum allocated to the prem-ises.

[T.D. 6695, 28 FR 12932, Dec. 5, 1963. Redesig-nated at 40 FR 16835, Apr. 15, 1975, andamended by T.D. ATF–251, 52 FR 19338, May22, 1987]

TERMINATION OF BONDS

§ 250.71 Termination of bonds.

Any bond given under the provisionsof this subpart may be terminated asto future transactions—

(a) Pursuant to application of suretyas provided in § 250.72;

(b) On approval of a supersedingbond;

(c) On notification by the principal tothe regional director (compliance) thathe has discontinued transactions underthe bond; or

(d) On notification by the principalto the regional director (compliance)that he has discontinued business.[T.D. 6695, 28 FR 12932, Dec. 5, 1963. Redesig-nated at 40 FR 16835, Apr. 15, 1975, andamended by T.D. ATF–251, 52 FR 19338, May22, 1987]

§ 250.72 Application of surety for relieffrom bond.

A surety on any bond given under theprovisions of this subpart may at anytime in writing notify the principaland the regional director (compliance)that he desires, after a date named, tobe relieved of liability under said bond.Such date shall be not less than 10 daysafter the date the notice is received bythe regional director (compliance). Thesurety shall also file with the regionaldirector (compliance) an acknowledg-ment or other proof of service on theprincipal. If such notice is not there-after in writing withdrawn, the rightsof the principal as supported by saidbond shall be terminated on the datenamed in the notice, and the surety

shall be relieved from liability to theextent set forth in § 250.73.

(Approved by the Office of Management andBudget under control number 1512–0352)[T.D. 6551, 26 FR 1490, Feb. 22, 1961. Redesig-nated at 40 FR 16835, Apr. 15, 1975, andamended by T.D. ATF–172, 49 FR 14943, Apr.16, 1984; T.D. ATF–251, 52 FR 19338, May 22,1987]

§ 250.73 Relief of surety from bond.Where the surety on a bond given

under the provisions of this subpart hasfiled application for relief from liabil-ity, as provided in § 250.72, the suretyshall be relieved from liability fortransactions occurring wholly subse-quent to the date specified in the no-tice, or the effective date of a newbond, if one is given.

§ 250.74 Release of pledged securities.Securities of the United States

pledged and deposited as provided in§ 250.63, shall be released only in ac-cordance with the provisions of 31 CFRPart 225. Such securities will not be re-leased by the regional director (compli-ance) until the liability under the bondfor which they were pledged has beenterminated. When the regional director(compliance) is satisfied that they maybe released, he shall fix the date ordates on which a part or all of such se-curities may be released. At any timeprior to the release of such securities,the regional director (compliance) mayextend the date of release for such ad-ditional length of time as he deemsnecessary.

(61 Stat. 650; 6 U.S.C. 15)[T.D. 6551, 26 FR 1590, Feb. 22, 1961. Redesig-nated at 40 FR 16835, Apr. 15, 1975, andamended by T.D. ATF–251, 52 FR 19338, May22, 1987]

§ 250.75 Form 1490, Notice of Termi-nation of Bond.

When the regional director (compli-ance) is satisfied that any bond givenunder the provisions of this subpartmay be terminated, he shall issueForm 1490, Notice of Termination ofBond, and shall forward copies to the


39


principal and to the surety. The re-gional director (compliance) shall,prior to the termination date, notifythe Secretary and the revenue agent ofthe proposed termination of any bondgiven under this part and the date ofsuch termination.

[T.D. 6695, 28 FR 12932, Dec. 5, 1963, as amend-ed by T.D. ATF–2, 37 FR 22736, Oct. 21, 1972.Redesignated at 40 FR 16835, Apr. 15, 1975,and amended bt T.D. ATF–251, 52 FR 19338,May 22, 1987]

PERMITS REQUIRED

§ 250.76 Insular permits.Before liquors or articles of Puerto

Rican manufacture may be shipped tothe United States, an insular permit,ATF Form 5110.51 (for distilled spirits)or Form 2900 (for wine or beer), to com-pute the taxes imposed by 26 U.S.C.7652(a), and to withdraw the productsfrom the bonded establishment wherethey may be deposited, must be ob-tained from the Secretary, and suchproducts may not be shipped to theUnited States until a permit to ship,on Form 487B, is applied for and ob-tained from the Secretary.

[T.D. 6551, 26 FR 1490, Feb. 22, 1961. Redesig-nated at 40 FR 16835, Apr. 15, 1975]


DISTILLED SPIRITS

§ 250.77 Subject to tax.(a) Distilled spirits of Puerto Rican

manufacture, and any products con-taining such distilled spirits, broughtinto the United States and withdrawnfor consumption or sale are subject toa tax equal to the tax imposed in theUnited States by 26 U.S.C. 5001.

(b) A credit against the tax imposedon distilled spirits by 26 U.S.C. 7652 isallowable under 26 U.S.C. 5010 on eachproof gallon of alcohol derived from el-igible wine or from eligible flavorswhich do not exceed 21⁄2 percent of thefinished product on a proof gallonbasis. The credit is allowable at thetime the tax is payable as if it con-stituted a reduction in the rate of tax.

(c) Where credit against the tax is de-sired, the person liable for the tax shall

establish an effective tax rate in ac-cordance with § 250.79a. The effectivetax rate established will be applied toeach withdrawal or other disposition ofthe distilled spirits for consumption orsale within the United States.



[T.D. ATF–297, 55 FR 18066, Apr. 30, 1990]

§ 250.78 Application and permit, ATFForm 5110.51.

Application for permit to computethe tax on, and to withdraw, distilledspirits shall be made on ATF Form5110.51, in quintuplicate, by the propri-etor. The proprietor shall forward allcopies of the form to the Secretary. Ifthe application is properly preparedand is otherwise in order, the Sec-retary or his delegate shall execute thepermit, retain one copy, and forwardthe original and remaining copies ofthe form to the revenue agent at thepremises where the products are lo-cated.

[T.D. ATF–62, 44 FR 71711, Dec. 11, 1979, asamended by T.D. ATF–251, 52 FR 19338, May22, 1987]

§ 250.79 Inspection or gauge and com-putation of tax.

On receipt of permit to compute thetax on ATF Form 5110.51, the revenueagent shall:

(a) In the case of spirits in packages,prepare a gauge record as provided in§ 250.164a in quadruplicate, compute thetax thereon, and attach all copies ofthe gauge record to ATF Form 5110.51;

(b) In the instance of spirits in cases,verify by inspection the quantity ofspirits described on the form; or

(c) In the case of spirits in a bulkconveyance, verify by gauge or inspec-tion the quantity of spirits describedon the form.If the revenue agent determines anyvariation between his gauge and thequantity of spirits described on Form5110.51, he shall amend and initial thedata in Part I of the form. The revenueagent shall deliver all copies of Form


40

27 CFR Ch. I (4-1-97 Edition)§ 250.79a

1 Proof gallons by which distilled spirits de-rived from eligible flavors exceed 21⁄2% of thetotal proof gallons in the batch(100.9¥(21⁄2%)×3.371.8=16.6).

5110.51 and any accompanying packagegauge record to the proprietor. Theproprietor shall then compute andenter the amount of tax on all copies ofForm 5110.51.


[T.D. ATF–198, 50 FR 8549, Mar. 1, 1985]

§ 250.79a Computation of effective taxrate.

(a) The proprietor shall compute theeffective tax rate for distilled spiritscontaining eligible wine or eligible fla-vors as the ratio of the numerator anddenominator as follows:

(1) the numerator will be the sum of:(i) The proof gallons of all distilled

spirits used in the product (exclusive ofdistilled spirits derived from eligibleflavors), multiplied by the tax rate pre-scribed by 26 U.S.C. 5001;

(ii) The wine gallons of each eligiblewine used in the product, multiplied bythe tax rate prescribed by 26 U.S.C.5041(b) (1), (2), or (3), as applicable; and

(iii) The proof gallons of all distilledspirits derived from eligible flavorsused in the product, multiplied by thetax rate prescribed by 26 U.S.C. 5001,but only to the extent that such dis-tilled spirits exceed 21⁄2% of the denom-inator prescribed in paragraph (a)(2) ofthis section.

(2) The denominator will be the sumof:

(i) The proof gallons of all distilledspirits used in the product, including

distilled spirits derived from eligibleflavors; and

(ii) The wine gallons of each eligiblewine used in the product, multiplied bytwice the percentage of alcohol by vol-ume of each, divided by 100.

(b) In determining the effective taxrate, quantities of distilled spirits, eli-gible wine, and eligible flavors will beexpressed to the nearest tenth of aproof gallon. The effective tax ratemay be rounded to as many decimalplaces as the proprietor deems appro-priate, provided that, such rate is ex-pressed no less exactly than the raterounded to the nearest whole cent, andthe effective tax rates for all productswill be consistently expressed to thesame number of decimal places. In suchcase, if the number is less than five itwill be dropped; if it is five or over, aunit will be added.

(c) The following is an example of theuse of the formula.

BATCH RECORD

Distilled spirits ......................... 2249.1proofgallons.

Eligible wine (14% alcohol byvolume).

2265.0 winegallons.


1020.0 winegallons.

Eligible flavors .......................... 100.9 proofgallons.


41


22491 50 2265 0 17) 1020 67)] 16 6 50

22491 100 9 2265 0 28 1020 0 38

22491 50 2265 0 07) 1020 57)] 16 6 50

22491 100 9 2265 0 28 1020 38

362 85 423

1

1

. ($12. ) [ . ($. ($. . ($12. )

. . [ . (. ) . (. )]

. ($13. ) [ . ($1. ($1. . ($13. )

. . ( . . ) ( . )

$30, . $2,

+ + ++ + +

=

+ + ++ + × + ×

=

+ .. $1, . $224.

, . . .

$34, .

, .$10. ,

55 601 40 10

2 350 0 634 2 387 6

611 90

3 371827

+ ++ +

=

= the effective tax rate.

(Approved by Office of Management andBudget under control number 1512–0203)(Sec. 6, Pub. L. 96–598, 94 Stat. 3488, asamended (26 U.S.C. 5010))[T.D. ATF–297, 55 FR 18066, Apr. 30, 1990, asamended by T.D. ATF–307, 55 FR 52741, Dec21, 1990]

§ 250.80 Deferred payment of tax—re-lease of spirits.

(a) Action by proprietor. Where theproprietor has furnished bond on ATFForm 5110.50, and payment of the tax isto be deferred, he shall execute anagreement on ATF Form 5110.51 to paythe amount of tax which has been com-puted and entered on the form. He shallalso certify, under the penalties of per-jury, that he is not in default of anypayment of tax chargeable against hisbond, and that his bond is in the maxi-mum penal sum, or that it is sufficientto cover the amount of tax on the dis-tilled spirits described on the form inaddition to all other amounts charge-able agains this bond. The proprietorshall deliver all copies of ATF Form5110.51 and any package gauge recordas provided in §250.164a to the revenueagent.

(b) Action by revenue agent. On receiptof ATF Form 5110.51 and any packagegauge record, the revenue agent shallverify the computation of the tax en-tered on the ATF Form 5110.51, and ifthe proprietor has on file a good andsufficient bond, ATF Form 5110.50, soindicate on ATF Form 5110.51. The rev-enue agent shall then execute his re-port of release on the ATF Form 5110.51and release the spirits for shipment tothe United States. He shall distributeATF Form 5110.51 and any packagegauge record according to the instruc-tions of ATF Form 5110.51. Where the

revenue agent finds that the proprietordoes not have good and sufficient bondcoverage, or where the revenue agenthas received information that the pro-prietor is in default of payment of anytaxes previously charged to his bond,he shall return all copies of ATF Form5110.51 and any package gauge recordto the proprietor, giving his reasons forsuch action.


[T.D. ATF–198, 50 FR 8549, Mar. 1, 1985]

§ 250.81 Prepayment of tax and releaseof spirits.

(a) Action by proprietor. Where the dis-tilled spirits are to be released afterpayment of the computed tax, the pro-prietor shall enter the amount of suchcomputed tax on all copies of ATFForm 5110.51 and execute the statementthat such tax is being prepaid. The pro-prietor shall then prepare ATF Form5000.25 in duplicate, and send the origi-nal with all copies of ATF Form 5110.51and any package gauge record as pro-vided in § 250.164a and the remittance infull for the tax, to the Chief, PuertoRico Operations.

(b) Action by Chief, Puerto Rico Oper-ations. On receipt of ATF Forms 5110.51,5000.25 and any package gauge record,with remittance covering prepaymentof tax, the Chief, Puerto Rico Oper-ations shall execute the receipt on ATFForm 5000.25 and execute the report ofprepaid taxes on all copies of ATFForm 5110.51. The Chief, Puerto RicoOperations shall then retain the origi-nals of ATF Forms 5110.51 and 5000.25and forward the remaining copies ofATF Form 5110.51 in accordance to theinstructions on the form.


42

27 CFR Ch. I (4-1-97 Edition)§ 250.82

(c) Action by revenue agent. On receiptof ATF Form 5110.51 executed by theChief, Puerto Rico Operations to showreceipt of ATF Form 5000.25 and remit-tance, the revenue agent shall executethe report of release on the ATF Form5110.51 and release the spirits for ship-ment to the United States. The com-pleted ATF Form 5110.51 shall be dis-tributed according to the instructionson the form.

(Approved by the Office of Management andBudget under control number 1512–0210 and1512–0497)

[T.D. ATF–277, 53 FR 45267, Nov. 9, 1988]

§ 250.82 Permit to ship.Distilled spirits may not be shipped

to the United States until permit forsuch shipment has been obtained fromthe Secretary as provided in §§ 250.114through 250.116.

[T.D. 6695, 28 FR 12932, Dec. 5, 1963. Redesig-nated at 40 FR 16835, Apr. 15, 1975, andamended by T.D. ATF–62, 44 FR 71711, Dec.11, 1979]

PACKAGES OF DISTILLED SPIRITS

§ 250.86 Authority for shipment.Where distilled spirits of Puerto

Rican manufacture are to be shipped tothe United States in containers havinga capacity of more than one gallon, thelaws and regulations of the Common-wealth of Puerto Rico require thatprior approval for such shipment be ob-tained from the Secretary.

[T.D. 6695, 28 FR 12933, Dec. 5, 1963. Redesig-nated at 40 FR 16835, Apr. 15, 1975]

§ 250.87 Evidence of taxpayment.Where, under the provisions of

§ 250.86, a person has made applicationto the Secretary for authority to shipdistilled spirits of Puerto Rican manu-facture to the United States in con-tainers having a capacity of more thanone gallon, he shall, at the same time,submit sworn evidence to the Sec-retary that the distilled spirits tax hasbeen paid as provided in § 250.81 or de-ferred as provided in § 250.80, or he shallsubmit application, ATF Form 5110.51,for permit to pay such taxes, as pro-vided in § 250.78. When satisfied thatthe shipper has complied with all pro-visions of this part relating to the pay-

ment of taxes on such distilled spirits,the Secretary or his delegate, shallnote his approval on both copies of thesworn application, and return one copyto the shipper. On receipt of the ap-proved application, the shipper shallsubmit application for permit to ship,Form 487B, as prescribed in §§ 250.114through 250.116.


WINE

§ 250.92 Subject to tax.

(a) Wine of Puerto Rican manufac-ture coming into the United States andwithdrawn for consumption or sale issubject to a tax equal to the internalrevenue tax imposed in the UnitedStates on wine by 26 U.S.C. 5041.

(b) The excise taxes collected on wineof Puerto Rican manufacture shall bedeposited in the Treasury of PuertoRico only if the sum of the cost orvalue of the materials produced inPuerto Rico, plus the direct costs ofprocessing operations performed inPuerto Rico, equals or exceeds 50 per-cent of the value of the wine when it isbrought into the United States.


[T.D. ATF–206, 50 FR 15888, Apr. 23, 1985]

§ 250.93 Application and permit, Form2900.

When wine of Puerto Rican manufac-ture is to be withdrawn for shipment tothe United States, or for use in an arti-cle made with wine only or with wineand beer only, for shipment to theUnited States, application for permitto compute the tax on, and to with-draw, the wine shall be made on Form2900, in quintuplicate, by the proprietorof the bonded premises where the wineis stored. If the withdrawal is to bemade in casks, barrels, kegs or similarcontainers, the proprietor shall enterthe name of the winemaker producingthe wine, the serial numbers of thepackages, the total number of wine gal-lons contained therein, and the taxablegrade of the wine, for example, ‘‘not


43


more than 14 percent’’ if the wine con-tains not more than 14 percent of alco-hol by volume, ‘‘14–21 percent’’ if thewine contains more than 14 percent andnot exceeding 21 percent of alcohol byvolume, ‘‘21–24 percent’’ if the winecontains more than 21 percent but notexceeding 24 percent of alcohol by vol-ume. If the application covers morethan one taxable grade of wine, thequantity in each taxable grade shall bereported separately. If the withdrawalis to consist of bottled wine, the pro-prietor shall show the number of cases,size of the bottles, the number of bot-tles per case, the total quantity inwine gallons, and the taxable grade ofthe wine in the manner stated above.The proprietor shall forward all copiesof the form to the Secretary. If the ap-plication is properly prepared and isotherwise in order, the Secretary or hisdelegate shall execute the permit, re-tain one copy, and return the originaland three copies to the proprietor.

[T.D. ATF–62, 44 FR 71712, Dec. 11, 1979, asamended by T.D. ATF–251, 52 FR 19338, May22, 1987]

§ 250.94 Computation of tax.On receipt of permit to compute the

tax on Form 2900, the proprietor shallcompute and enter the amount of thetax on all copies of the form.


§ 250.95 Deferred payment of tax—re-lease of wine.

(a) Action by proprietor. Where theproprietor has furnished bond, on Form2897, and payment of the tax is to bedeferred, he shall execute the agree-ment on Form 2900 to pay the amountof tax which has been computed andentered on the form. He shall also cer-tify under the penalties of perjury thathe is not in default of any payment oftax chargeable against his bond, andthat his bond is in the maximum penalsum, or that it is sufficient to coverthe amount of tax on the wine de-scribed on the form in addition to allother amounts chargeable against hisbond. The proprietor shall deliver allcopies of Form 2900 to the revenueagent.

(b) Action by revenue agent. On receiptof Form 2900, the revenue agent shall

verify the computation of the tax en-tered on the form, and if the proprietorhas on file a good and sufficient bond,Form 2897, so indicate on Form 2900.The revenue agent shall then executehis report of release on the Form 2900and release the wine for the purposeauthorized on the form. The completedform shall be distributed in the samemanner as provided for ATF Form5110.51 in § 250.80(b). Where the revenueagent finds that the proprietor doesnot have good and sufficient bond cov-erage, or that the proprietor is in de-fault of payment of any taxes pre-viously charged to his bond, he shallreturn all copies of Form 2900 to theproprietor, giving his reasons for suchaction.


§ 250.96 Prepayment of tax—release ofwine.

(a) Action by proprietor. Where thewine is to be withdrawn from bondedstorage after payment of the computedtax, the proprietor shall enter theamount of such computed tax on allcopies of ATF Form 2900 (5100.21) andexecute the statement that such tax isbeing prepaid. The proprietor shallthen prepare ATF Form 5000.25 in du-plicate and send the original with allcopies of ATF Form 2900 (5100.21) andthe remittance in full for the tax, tothe Chief, Puerto Rico Operations.

(b) Action by Chief, Puerto Rico Oper-ations. On receipt of ATF Forms 2900(5100.21) and 5000.25, and remittancecovering prepayment of tax, the Chief,Puerto Rico Operations shall executethe receipt on ATF Form 5000.25 andexecute the report of prepaid taxes onall copies of ATF Form 2900 (5100.21).The Chief, Puerto Rico Operationsshall then retain the originals of ATFForms 2900 (5100.21) and 5000.25 and for-ward the remaining copies of ATFForm 2900 (5100.21) in accordance withthe instructions on the form.

(c) Action by revenue agent. On receiptof ATF Form 2900 (5100.21) executed bythe Chief, Puerto Rico Operations toshow receipt of ATF Form 5000.25 andremittance, the revenue agent shallexecute the report of release on the


44

27 CFR Ch. I (4-1-97 Edition)§ 250.96b

ATF Form 2900 (5100.21) and release thewine for the purpose authorized on theform. The completed ATF Form 2900(5100.21) shall be distributed accordingto the instructions on the form.


[T.D. ATF–277, 53 FR 45267, Nov. 9, 1988]

§ 250.96a [Reserved]

§ 250.96b Permit to ship.

Wine released from bonded storageunder § 250.95 or § 250.96 may not beshipped to the United States until per-mit for such shipment has been ob-tained from the Secretary as providedin §§ 250.114 through 250.116.


§ 250.97 Marking containers of wine.

Containers of wine of Puerto Ricanmanufacture which are to be shipped tothe United States must be marked withthe name of the winemaker, the serialnumber of the container, the kind andtaxable grade of the wine, the galloncontent, and the serial number of thewithdrawal permit, Form 487B, prefixedby the number of such form, e.g.,‘‘487B–61–3.’’

BEER

§ 250.101 Subject to tax.

(a) Beer of Puerto Rican manufacturecoming into the United States andwithdrawn for consumption or sale issubject to a tax equal to the internalrevenue tax imposed on beer in theUnited States by 26 U.S.C. 5051.

(b) The excise taxes collected on beerof Puerto Rican manufacture shall bedeposited in the Treasury of PuertoRico only if the sum of the cost orvalue of the materials produced inPuerto Rico, plus the direct costs ofprocessing operations performed inPuerto Rico, equals or exceeds 50 per-cent of the value of the beer when it isbrought into the United States.


[T.D. ATF–206, 50 FR 15888, Apr. 23, 1985]

§ 250.102 Application and permit,Form 2900.

When beer of Puerto Rican manufac-ture is to be withdrawn for shipment tothe United States, or for use in makingan article for shipment to the UnitedStates, application for permit to com-pute the tax on, and to withdraw, thebeer shall be made by the brewer onForm 2900, in quintuplicate. If thewithdrawal is to be made in hogsheads,barrels, or kegs, the brewer shall enterthe total number of each size, accord-ing to capacity, of containers which itis desired to withdraw. If the with-drawal is to be made in bottles, thebrewer shall enter the number of cases,size of bottles, number of bottles percase, the total contents thereof in gal-lons (liquid measure), and the equiva-lent thereof in barrels and fractions ofbarrels of 31 gallons each. The brewershall forward all copies of the Form2900 to the Secretary. If the applicationis properly prepared and is otherwise inorder, the Secretary or his delegateshall execute the permit, retain onecopy, and return the original and threecopies to the brewer.

[T.D. 6695, 28 FR 12934, Dec. 5, 1963. Redesig-nated at 40 FR 16835, Apr. 15, 1975, andamended by T.D. ATF–251, 52 FR 19338, May22, 1987]

§ 250.103 Computation of tax.On receipt of permit to compute the

tax on Form 2900 the brewer shall com-pute and enter the amount of the taxon all copies of the form.


§ 250.104 Deferred payment of tax—re-lease of beer.

(a) Action by brewer. Where the brew-er has furnished bond on Form 2898,and payment of the tax is to be de-ferred, he shall execute the agreementon Form 2900 to pay the amount of taxwhich has been computed and enteredon the form. He shall also certify underthe penalties of perjury that he is notin default of any payment of taxchargeable against his bond, and thathis bond is in the maximum penal sum,or that it is sufficient to cover theamount of tax on the beer described onthe form in addition to all other


45


amounts chargeable against his bond.The brewer shall deliver all copies ofForm 2900 to the revenue agent.

(b) Action by revenue agent. On receiptof Form 2900, the revenue agent shallverify the computation of the tax en-tered on the form, and if the proprietorhas on file a good and sufficient bond,Form 2898, so indicate on Form 2900.The revenue agent shall then executehis report of release on the Form 2900and release the beer for the purpose au-thorized on the form. The completedform shall be distributed in the samemanner as provided for ATF Form5110.51 in § 250.80(b). Where the revenueagent finds that the proprietor doesnot have good and sufficient bond cov-erage, or that the proprietor is in de-fault of payment of any taxes pre-viously charged to his bond, he shallreturn all copies of Form 2900 to theproprietor, giving his reasons for suchaction.

[T.D. 6695, 28 FR 12934, Dec. 5 1963. Redesig-nated at 40 FR 16835, Apr. 15, 1975, andamended by T.D. ATF–62, 44 FR 71712, Dec.11, 1979]

§ 250.105 Prepayment of tax—releaseof beer.

(a) Action by brewer. Where the beer isto be withdrawn from bonded storageafter payment of the computed tax thebrewer shall enter the amount of suchcomputed tax on all copies of ATFForm 2900 (5100.21) and execute thestatement that such tax is being pre-paid. The brewer shall then prepareATF Form 5000.25 in duplicate and sendthe original with all copies of ATFForm 2900 (5100.21) and the remittancein full for the tax, to the Chief, PuertoRico Operations.

(b) Action by Chief, Puerto Rico Oper-ations. On receipt of ATF Forms 2900(5100.21) and 5000.25, and remittancecovering prepayment of tax, the Chief,Puerto Rico Operations shall executethe receipt on ATF Form 5000.25 andexecute the report of prepaid taxes onall copies of ATF Form 2900 (5100.21).The Chief, Puerto Rico Operationsshall then retain the originals of ATFForms 2900 (5110.21) and 5000.25 and for-ward the remaining copies of ATFForm 2900 (5100.21) in accordance withthe instructions of the form.

(c) Action by revenue agent. On receiptof ATF Form 2900 (5100.21) executed bythe Chief, Puerto Rico Operations toshow receipt of ATF Form 5000.25 andremittance, the revenue agent shallexecute the report of release on theATF Form 2900 (5100.21) and release thebeer for the purpose authorized on theform. The completed ATF Form 2900(5100.21) shall be distributed accordingto the instructions on the form.


[T.D. ATF–277, 53 FR 45268, Nov. 9, 1988]

§ 250.105a Permit to ship.

Beer released from bonded storageunder § 250.104 or § 250.105 may not beshipped to the United States until per-mit for such shipment has been ob-tained from the Secretary as providedin §§ 250.114 through 250.116.


§ 250.106 Marking containers of beer.

Containers of beer of Puerto Ricanmanufacture which are to be shipped tothe United States must be marked withthe name of the brewer; the serial num-ber, capacity, and size of the container;the kind of beer; and the serial numberof the withdrawal permit, Form 487B,prefixed by the number of such form,e.g., ‘‘487B–61–3.’’

ARTICLES

§ 250.107 Taxable status.

Articles of Puerto Rican manufac-ture which are to be shipped to theUnited States and which are not ex-empt fom tax under the provisions of§ 250.36 are subject, under section7652(a) to a tax equal to the tax im-posed by the internal revenue laws ofthe United States. If such articles con-tain distilled spirits, the tax will becollected at the rate prescribed by 26U.S.C. 5001(a)(1) on all alcohol con-tained therein, regardless of thesource. Such articles containing onlywine and/or beer will be taxed at therates prescribed by 26 U.S.C. 5041 and/or5051, respectively. A formula coveringthe manufacture of each article shall


46

27 CFR Ch. I (4-1-97 Edition)§ 250.108

be filed by the manufacturer in accord-ance with subpart D of this part.

[T.D. ATF–62, 44 FR 71712, Dec. 11, 1979]

§ 250.108 Application for permit, ATFForm 5110.51 and/or Form 2900.

(a) Distilled spirits. Where distilledspirits of Puerto Rican manufactureare to be used in the manufacture ofthe articles to be shipped to the UnitedStates, the manufacturer shall makeapplication on Form 5110.51, in accord-ance with the applicable provisions of§ 250.78.

(b) Wine and/or beer. Where wine and/or beer of Puerto Pican manufacture isto be used in the manufacture of thearticles to be shipped to the UnitedStates, the manufacturer shall makeapplication on Form 2900, in accord-ance with the applicable provisions of§§ 250.93 and/or 250.102. Wine and beermay be included in the same applica-tion.

(c) Approval of applications. The Sec-retary, or his delegate, shall approveand dispose of the applications in themanner prescribed in §§ 250.78, 250.93,and/or § 250.102, as the case may be.

[T.D. 6551, 26 FR 1490, Feb. 22, 1961. Redesig-nated at 40 FR 16835, Apr. 15, 1975, andamended by T.D. ATF–62, 44 FR 71712, Dec.11, 1979]

§ 250.109 Taxpayment.(a) Distilled spirits. The tax on dis-

tilled spirits contained in articles to beshipped to the United States, equal tothe tax imposed in the United Statesby 26 U.S.C. 5001(a)(1), shall be com-puted in accordance with § 250.79 andpaid in accordance with the applicableprovisions of §§ 250.80, 250.81, and 250.111through 250.113.

(b) Wine. The tax on wine used in themanufacture of articles to be shippedto the United States, equal to the taximposed in the United States by 26U.S.C. 5041, shall be computed in ac-cordance with § 250.94 and paid in ac-cordance with the applicable provisionsof §§ 250.95, 250.96, and 250.111 through250.113.

(c) Beer. The tax on beer used in themanufacture of articles to be shippedto the United States, equal to the taximposed in the United States by 26U.S.C. 5051, shall be computed in ac-cordance with § 250.103 and paid in ac-

cordance with the applicable provisionsof §§ 250.104, 250.105, and 250.111 through250.113.

[T.D. ATF–62, 44 FR 71712, Dec. 11, 1979]

§ 250.110 Release of articles or liquors.

After determining that the propri-etor has good and sufficient bond cov-erage, or, in the case of prepayment, onreceipt of ATF Form 5110.51 or Form2900 executed by the Chief, Puerto RicoOperations to show receipt of ATFForm 5000.25, and remittance, the reve-nue agent shall execute his report ofrelease on ATF Form 5110.51 or Form2900 and release the articles containingdistilled spirits, or release the wineand/or beer for use in the manufactureof articles. He shall forward one copyof ATF Form 5110.51 or Form 2900, andany package gauge record as providedin § 250.164a, to the Bureau of AlcoholicBeverage Taxes and one copy of each tothe District Revenue Agent (Common-wealth of Puerto Rico), deliver onecopy of each to the applicant, and re-tain one copy. A permit shall be ob-tained as provided in §§ 250.114 through250.116 before the articles manufac-tured from such liquors may be shippedto the United States.


[T.D. ATF–198, 50 FR 8550, Mar. 1, 1985, asamended by T.D. ATF–251, 52 FR 19338, May22, 1987; T.D. ATF–277, 53 FR 45268, Nov. 9,1988]

PAYMENT OF TAX BY RETURN

§ 250.111 General.

All taxes imposed by 26 U.S.C.7652(a), and which, under the provisionsof this part, are paid in Puerto Rico,shall be paid and collected on the basisof a tax return as provided in this sub-part. Any tax which has been paid inaccordance with the provisions of thispart in effect at the time of such pay-ment, and before provision was made inthe part for payment of such tax by re-turn, shall be deemed to have been pre-paid as prescribed in this part.

[T.D. 6551, 26 FR 1490, Feb. 22, 1961. Redesig-nated at 40 FR 16835, Apr. 15, 1975, andamended by T.D. ATF–48, 44 FR 55852, Sept.28, 1979; T.D. ATF–277, 53 FR 45268, Nov. 9,1988]


47


§ 250.112 Returns for semimonthly pe-riods.

(a) Returns. The taxes imposed by 26U.S.C. 7652(a), (equal to the taxes im-posed in the United States by 26 U.S.C.5001(a)(1), 5041, or 5051), the payment ofwhich has been deferred under the pro-visions of §§ 250.80, 250.95 or 250.104 ofthis part, shall be paid pursuant to areturn on ATF Form 5000.25 prepared inaccordance with the instructions onthe form.

(b) Periods. Except as provided for inparagraph (d) of this section, the peri-ods to be covered by returns on ATFForm 5000.24 shall be semimonthly;such periods to run from the 1st daythrough the 15th day of each monthand from the 16th day through the lastday of each month.

(c) Filing. (1) The original of ATFForm 5000.25, with remittance coveringthe full amount of the tax, shall befiled with the Chief, Puerto Rico Oper-ations not later than the 14th day afterthe last day of the return period exceptas provided by paragraph (d) of thissection. If the due date falls on a Sat-urday, Sunday, or legal holiday, the re-turn and remittance shall be due onthe immediately preceding day whichis not a Saturday, Sunday, or legal hol-iday, except as provided by paragraph(d) of this section.

(2) The tax shall be paid in full by re-mittance at the time the return isfiled, unless the proprietor is requiredto make remittances by electronicfund transfer in accordance with§ 250.112a.

(3) The remittance may be in anyform the Chief, Puerto Rico Oper-ations, is authorized to accept underthe provisions of § 70.61 of this chapter(Payment by check or money order)and which is acceptable to the Chief,Puerto Rico Operations. A remittanceby check or money order, shall be madepayable to the ‘‘Bureau of Alcohol, To-bacco and Firearms.’’

(4) When the return and remittanceare delivered by U.S. mail to the officeof the Chief, Puerto Rico Operations,the date of the official postmark of theU.S. Postal Service stamped on thecover in which the return and remit-tance were mailed shall be treated asthe date of delivery.

(d) Special rule for taxes due for themonth of September (effective after De-cember 31, 1994). (1) The second semi-monthly period for the month of Sep-tember shall be divided into two pay-ment periods, from the 16th daythrough the 26th day, and from the 27thday through the 30th day. The taxpayershall file a return on Form 5000.24, andmake remittance, for the period Sep-tember 16–26, no later than September29. The taxpayer shall file a return onForm 5000.24, and make remittance, forthe period September 27–30, no laterthan October 14.

(2) Taxpayment not by electronic fundtransfer. In the case of taxes not re-quired to be remitted by electronicfund transfer as prescribed by § 250.112a,the second semimonthly period of Sep-tember shall be divided into two pay-ment periods, from the 16th daythrough the 25th day, and the 26th daythrough the 30th day. The taxpayershall file a return on Form 5000.24, andmake remittance, for the period Sep-tember 16–25, no later than September28. The taxpayer shall file a return onForm 5000.24, and make remittance, forthe period September 26–30, no laterthan October 14.

(3) Amount of payment: Safe harborrule. (i) Taxpayers are considered tohave met the requirements of para-graph (d)(1) of this section, if theamount paid no later than September29 is not less than 11/15 (73.3 percent) ofthe tax liability incurred for the semi-monthly period beginning on Septem-ber 1 and ending on September 15, andif any underpayment of tax is paid byOctober 14.

(ii) Taxpayers are considered to havemet the requirements of paragraph(d)(2) of this section, if the amountpaid no later than September 28 is notless than 2/3rds (66.7 percent) of the taxliability incurred for the semimonthlyperiod beginning on September 1 andending on September 15, and if anyunderpayment of tax is paid by October14.

(4) Last day for payment. If the re-quired due date for taxpayment for theperiods September 16–25 or September16–26 as applicable, falls on a Saturdayor legal holiday, the return and remit-tance shall be due on the immediatelypreceding day. If the required due date


48

27 CFR Ch. I (4-1-97 Edition)§ 250.112a

falls on a Sunday, the return and re-mittance shall be due on the imme-diately following day.

(e) Default. Where a taxpayer has de-faulted in any payment of tax underthis section, during the period of suchdefault and until the regional director(compliance) finds that the revenuewill not be jeopardized by deferred pay-ment of tax under this section, the taxshall be prepaid by such taxpayer in ac-cordance with the provisions of§ 250.113. During such period, distilledspirits, wine, or beer shall not be re-leased from the proprietor’s bondedpremises before the proprietor has paidthe tax thereon. In the event of de-fault, the Chief, Puerto Rico Oper-ations shall immediately notify theSecretary and the revenue agent at thepremises that tax is to be prepaid untilfurther notice, and upon a finding thatthe revenue will not be jeopardized byresumption of deferred payment or taxunder this section, the Chief, PuertoRico Operations shall notify the Sec-retary and the revenue agent that de-ferred payment may be resumed.


(Aug. 16, 1954, Ch. 736, 68A Stat. 775, (26U.S.C. 6301); June 29, 1956, Ch. 462, 70 Stat. 391(26 U.S.C. 6301))

[T.D. ATF–277, 53 FR 45268, Nov. 9, 1988, asamended by T.D. ATF–301, 55 FR 47658, Nov.14, 1990; T.D. ATF–365, 60 FR 33674, June 28,1995]

§ 250.112a Payment of tax by elec-tronic fund transfer.

(a) General. (1) Each taxpayer whowas liable, during a calendar year, fora gross amount equal to or exceedingfive million dollars in distilled spiritstaxes combining tax liabilities in-curred under this part and parts 19 and251 of this chapter, a gross amountequal to or exceeding five million dol-lars in wine taxes combining tax liabil-ities incurred under this part and parts240 and 251 of this chapter, or a grossamount equal to or exceeding five mil-lion dollars in beer taxes combiningtax liabilities incurred under this partand parts 25 and 251 of this chapter,shall use a commercial bank in makingpayment by electronic fund transfer(EFT) of such taxes during the succeed-ing calendar year. Payment by cash,

check, or money order, of distilled spir-its taxes, wine taxes, or beer taxes, asdescribed in § 250.112, is not authorizedfor a taxpayer who is required, by thissection, to make remittances by EFT.For purposes of this section, the dollaramount of tax liability is to be summa-rized separately for distilled spiritstaxes, wine taxes, or beer taxes, and isdefined as the gross tax liability oneach type of product for which taxesare paid in accordance with this sub-part, taxable withdrawals from prem-ises in the United States, and importa-tion during the calendar year, withoutregard to any drawbacks, credits, or re-funds, for all premises at which tax li-abilities are incurred by the taxpayer.Overpayments are not taken into ac-count in summarizing the gross tax li-ability.

(2) For the purposes of this section, ataxpayer includes a controlled group ofcorporations, as defined in 26 U.S.C.1563, and implementing regulations in26 CFR 1.1563–1 through 1.1563–4, exceptthat the words ‘‘at least 80 percent’’shall be replaced by the words ‘‘morethan 50 percent’’ in each place it ap-pears in subsection (a) of 26 U.S.C. 1563,as well as in the implementing regula-tions. Also, the rules for a ‘‘controlledgroup of corporations’’ apply in a simi-lar fashion to groups which includepartnerships and/or sole proprietor-ships. If one entity maintains morethan 50% control over a group consist-ing of corporations and one, or more,partnerships and/or sole proprietor-ships, all of the members of the con-trolled group are one taxpayer for thepurpose of determining who is requiredto make remittances by EFT.

(3) A taxpayer who is required by thissection to make remittances by EFT,shall make a separate EFT remittanceand file a separate tax return, for eachpremises from which distilled spirits,wine, or beer is withdrawn upon deter-mination of tax.

(b) Requirements. (1) On or before Jan-uary 10 of each calendar year, exceptfor a taxpayer already remitting thetax by EFT, each taxpayer who was lia-ble for a gross amount equal to or ex-ceeding five million dollars in distilledspirits taxes combining tax liabilitiesincurred under this part and parts 19and 251 of this chapter, a gross amount


49


equal to or exceeding five million dol-lars in wine taxes combining tax liabil-ities incurred under this part and parts240 and 251 of this chapter, or a grossamount equal to or exceeding five mil-lion dollars in beer taxes combiningtax liabilities incurred under this partand parts 245 and 251 of this chapterduring the previous calendar year,shall notify, in writing, the regional di-rector (compliance), for each region inwhich taxes are paid. The notice shallbe an agreement to make remittancesby EFT.

(2) For each return filed in accord-ance with this part, the taxpayer shalldirect the taxpayer’s bank to make anelectronic fund transfer in the amountof the taxpayment to the Treasury Ac-count as provided in paragraph (e) ofthis section. The request shall be madeto the bank early enough for the trans-fer to be made to the Treasury Accountby no later than the close of businesson the last day for filing the return,prescribed in § 250.112 or § 250.113. Therequest shall take into account anytime limit established by the bank.

(3) If a taxpayer was liable for lessthan five million dollars in distilledspirits taxes combining tax liabilitiesincurred under this part and parts 19and 251 of this chapter, less than fivemillion dollars in wine taxes combin-ing tax liabilities incurred under thispart and parts 240 and 251 of this chap-ter, or less than five million dollars inbeer taxes combining tax liabilities in-curred under this part and parts 245and 251 of this chapter during the pre-ceding calendar year, the taxpayer maychoose either to continue remitting thetax as provided in this section or toremit the tax with the return as pre-scribed by § 250.112. Upon filing the firstreturn on which the taxpayer choosesto discontinue remitting the tax byEFT and to begin remitting the taxwith the tax return, the taxpayer shallnotify the regional director (compli-ance) by attaching a written notifica-tion to the tax return, stating that notaxes are due by EFT, because the taxliability during the preceding calendaryear was less than five million dollars,and that the remittance shall be filedwith the tax return.

(c) Remittance. (1) Each taxpayershall show on the tax return, informa-

tion about remitting the tax for thatreturn by EFT and shall file the returnwith the Chief, Puerto Rico Operations.

(2) Remittances shall be consideredas made when the taxpayment by elec-tronic fund transfer is received by theTreasury Account. For purposes of thissection, a taxpayment by electronicfund transfer shall be considered as re-ceived by the Treasury Account whenit is paid to a Federal Reserve Bank.

(3) When the taxpayer directs thebank to effect an electronic fund trans-fer message as required by paragraph(b)(2) of this section, any transfer datarecord furnished to the taxpayer,through normal banking procedures,will serve as the record of payment,and shall be retained as part of re-quired records.

(d) Failure to make a taxpayment byEFT. The taxpayer is subject to a pen-alty imposed by 26 U.S.C. 5684, 6651, or6656, as applicable, for failure to makea taxpayment by EFT on or before theclose of business on the prescribed lastday for filing.

(e) Procedure. Upon the notificationrequired under paragraph (b)(1) of thissection, the regional director (compli-ance) will issue to the taxpayer an ATFProcedure entitled, Payment of Tax byElectronic Fund Transfer. This publi-cation outlines the procedure a tax-payer is to follow when preparing re-turns and EFT remittances in accord-ance with this part. The U.S. CustomsService will provide the taxpayer withinstructions for preparing EFT remit-tances for payments to be made to theU.S. Customs Service.


(Act of August 16, 1954, 68A Stat. 775, asamended (26 U.S.C. 6302); sec. 201, Pub. L. 85–859, 72 Stat. 1335, as amended (26 U.S.C. 5061))

[T.D. ATF–185, 49 FR 37580, Sept. 25, 1984, asamended by T.D. ATF–245, 52 FR 532, Jan. 7,1987; T.D. ATF–251, 52 FR 19339, May 22, 1987;T.D. ATF–262, 52 FR 47560, Dec. 15, 1987; T.D.ATF–277, 53 FR 45268, Nov. 9, 1988]

§ 250.113 Returns for prepayment oftaxes.

(a) General. If a proprietor does nothave on file with the Chief, PuertoRico Operations an approved bond cov-ering the deferred payment of taxes, orif such bond is in an insufficient penal


50

27 CFR Ch. I (4-1-97 Edition)§ 250.114

sum, or if there is default by him inany payment of tax under this subpart,liquors shall not be released from bond-ed storage before the proprietor haspaid the tax thereon.

(b) Remittances. Remittances submit-ted to cover prepayment of taxes underthis subpart shall be in cash, UnitedStates postal money orders, certifiedchecks, or cashier’s checks.

(c) Distilled spirits. In all cases wheretaxes equal to the taxes imposed in theUnited States by 26 U.S.C. 5001(a)(1) areto be paid before distilled spirits maybe released for shipment, the propri-etor shall pay such taxes pursuant to areturn on ATF Form 5000.25, as pre-scribed in § 250.81.

(d) Wine. In all cases where taxesequal to the taxes imposed in the Unit-ed States by 26 U.S.C. 5041, are to bepaid before wine may be withdrawnfrom bonded storage, the proprietorshall pay such taxes pursuant to a re-turn on ATF Form 5000.25, and as pre-scribed in § 250.96.

(e) Beer. In all cases where taxesequal to the taxes imposed in the Unit-ed States by 26 U.S.C. 5051, are to bepaid before beer may be withdrawnfrom bonded storage, the brewer shallpay such taxes pursuant to a return onATF Form 5000.25, and as prescribed in§ 250.105.

(f) Applicable procedures. The proce-dures of § 250.112(c) with respect to re-turns delivered by United States mailshall apply to returns and remittancesfiled under the provisions of this sec-tion.

(Approved by the Office of Management andBudget under control number 1512–0497)[20 FR 6077, Aug. 20, 1955 as amended by T.D.6821, 30 FR 6217, May 4, 1965. Redesignated at40 FR 16835, Apr. 15, 1975]


PERMIT TO SHIP LIQUORS AND ARTICLES

§ 250.114 Permit to ship required.Before liquors and articles of Puerto

Rican manufacture, upon which all in-ternal revenue taxes have been paid ordeferred as prescribed in this subpart,may be shipped to the United States, apermit to ship, Form 487B, must be ob-

tained from the Secretary as providedin §§ 250.115 and 250.116.

§ 250.115 Application, Form 487B.

Application for permit to ship to theUnited States liquors and articles ofPuerto Rican manufacture on which alltaxes have been paid or deferred as pre-scribed in this subpart shall be madeby the shipper on Form 487B, in sex-tuple. Each Form 487B will be given aserial number, by the applicant, begin-ning with ‘‘1’’ for the first day of Janu-ary of each year and running consecu-tively thereafter to December 31, inclu-sive. This serial number will beprefixed by the last two digits of thecalendar year, e.g. ‘‘61—1.’’ All copiesof the form shall be delivered to therevenue agent for execution of his cer-tification thereon and forwarding of allcopies to the Secretary within suffi-cient time to allow for the issuance ofthe permit and customs inspection asprovided in § 250.116.

§ 250.116 Issuance of permit, Form487B, and customs inspection.

If the application has been properlyexecuted and the Secretary, or his dele-gate, finds that all internal revenuetaxes imposed under 26 U.S.C. 7652(a),have been computed under the provi-sions of this part and have been paidor, pursuant to a sufficient bond, havebeen deferred under the applicable pro-visions of this part, he will execute hispermit on all copies thereof, retain onecopy of the form, return two copies tothe shipper, and send three copies tothe district director of customs inPuerto Rico. The shipper will submitthe two copies of the Form 487B to thedistrict director of customs at least sixhours prior to the intended lading ofthe merchandise. The district directorof customs will then inspect the mer-chandise covered by the Form 487Bafter which he will execute his certifi-cate on each copy of Form 487B indi-cating all exceptions. If discrepanciesappear indicating differences betweenthe quantity covered by Form 487B andthe quantity actually contained in theshipment or the improper tax paymentof the merchandise, he will withholdrelease of the shipment and notify the


51


Secretary of such discrepancies. There-upon, such discrepancies must be cor-rected in the shipping documents andadditional tax paid, if required, prior torelease of the merchandise. The dis-trict director of customs, upon releaseof the merchandise for shipment, willretain one copy of the Form 487B, re-turn two copies to the shipper, andsend two copies to the district directorof customs at the port of arrival in theUnited States, one of which should bemailed and the other dispatched on thevessel concerned for the guidance ofthe ATF officer who will handle thecargo. After the shipment has beencleared by the district director of cus-toms in Puerto Rico, the shipper shallretain one copy of the Form 487B andsend one copy thereof, with other ship-ping documents, to the district direc-tor of customs at the port of arrival.



PROCEDURE AT PORT OF ARRIVAL

§ 250.117 Action by carrier.The carrier of the merchandise speci-

fied on the Form 487B shall, at thetime of unlading at the port of arrivalin the United States, segregate and ar-range the cases of liquors or articlesfor convenient customs examinationand will assume any expense incurredin connection therewith.

§ 250.118 Inspection by district direc-tor of customs at port of arrival.

On receipt of properly executed Form487B from the shipper and the copies ofForm 487B from the district director ofcustoms in Puerto Rico, the district di-rector of customs at the port of arrivalshall inspect the merchandise to deter-mine whether the quantity specified onthe Form 487B is contained in the ship-ment. He will then execute his certifi-cate on each copy of Form 487B re-ceived and indicate thereon any excep-tions found at the time of discharge.The statement of exceptions shouldshow the serial number of each case orother shipping container which sus-

tained a loss, the quantity of liquor re-ported shipped in such container andthe quantity lost. Losses occurring asthe result of missing bottles, cases, orother containers should be listed sepa-rately from empty containers and con-tainers which have sustained losses dueto breakage. Where the statement ismade on the basis of bottles missing orlost due to other cause, the numberand size of bottles lost should beshown. If the director finds that thefull amount of the taxes due has notbeen paid, he will require the differencedue to be paid prior to release of themerchandise in accordance with the ap-plicable provisions of this part. Whenthe proper inspection of the merchan-dise has been effected, and any addi-tional taxes found to be due on the liq-uors or articles collected, the merchan-dise will be released.


§ 250.119 Disposition of forms by dis-trict director of customs.

Two copies of the Form 487B will beforwarded to the Chief, Puerto Rico Op-erations, and one copy of the form willbe retained by the district director ofcustoms and be available for inspectionby ATF officers. If the taxpayer files aclaim for refund of tax on losses, theChief, Puerto Rico Operations will for-ward to the regional director (compli-ance) of the region in which the port ofarrival is located a copy of the com-pleted Form 487B with the claim for re-fund.

[20 FR 6077, Aug. 20, 1955, as amended by T.D.7006, 34 FR 2249, Feb. 15, 1969. Redesignatedat 40 FR 16835, Apr. 15, 1975, and amended byT.D. ATF–251, 52 FR 19339, May 22, 1987]

Subpart F—Liquors and ArticlesPurchased by Tourists in Puer-to Rico

§ 250.125 Taxable.

When liquors and articles subject totax are brought into the United Statesby tourists, the tax thereon shall bepaid as provided in this subpart.


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27 CFR Ch. I (4-1-97 Edition)§ 250.126

§ 250.126 Taxpayment in Puerto Rico.Liquors upon which all Federal inter-

nal revenue taxes have been paid inPuerto Rico may be brought into theUnited States for personal consump-tion without payment of additionaltaxes. When distilled spirits, wines, orbeer are purchased by a tourist for con-sumption in the United States, the in-ternal revenue tax due may be paid tothe Chief, Puerto Rico Operations, andan ATF receipt obtained, or the taxmay be paid to the U.S. Customs au-thorities, who will issue a customs re-ceipt. The tax on articles purchased bytourists may be paid in the same man-ner. The receipt received from theChief, Puerto Rico Operations or fromthe customs officer shall be presented,as required, as evidence that the taxhas been paid.

(Sec. 201, Pub. L. 85–859, 72 Stat. 1335, asamended, 1358, as amended (26 U.S.C. 5061,5205))[T.D. ATF–206, 50 FR 23954, June 7, 1985, asamended by T.D. ATF–251, 52 FR 19339, May22, 1987]

§ 250.128 Taxpayment at port of arriv-al.

If the internal revenue tax on liquorsand articles is not paid in Puerto Rico,it shall be paid by the tourist at theport of arrival prior to release of theliquors or articles from customs cus-tody. The tax may be paid to the re-gional director (compliance), and anATF receipt obtained, or the tax maybe paid to the director of customs, whowill issue a customs receipt. If pay-ment is to be made to the regional di-rector (compliance), the director ofcustoms will notify the region of theamount of tax due. On payment of thetax to the director of customs, or onsubmission of the ATF receipt for thetax, the director of customs will re-lease the liquors or articles.

[T.D. ATF–251, 52 FR 19339, May 22, 1987]

Subpart G—Closures for DistilledSpirits From Puerto Rico

§ 250.135 Containers of distilled spiritsto bear closures.

Containers of 1 gallon (3.785 liters) orless of distilled spirits, upon which allFederal internal revenue taxes have

been paid or deferred in Puerto Ricounder provisions of this part, shallhave closures or other devices affixedin accordance with the provisions ofthis part, prior to shipment to theUnited States.

(Sec. 454, Pub. L. 98–369, 98 Stat. 494 (26U.S.C. 5301))

[T.D. ATF–206, 50 FR 23954, June 7, 1985]

§ 250.136 Affixing closures.Closures or other devices shall be se-

curely affixed to containers having ca-pacity of 1 gallon (3.785 liters) or less soas to leave a portion remaining on thecontainer when it is opened. In addi-tion, the closures or other devices shallbe constructed in such a manner as torequire that they be broken to gain ac-cess to the contents of the containers.

(Sec. 454, Pub. L. 98–369, 98 Stat. 494 (26U.S.C. 5301))

[T.D. ATF–206, 50 FR 23954, June 7, 1985]

Subpart H—Records and Reportsof Liquors From Puerto Rico

§ 250.163 General requirements.Except as provided in § 250.164, every

person, other than a tourist, bringingliquor into the United States fromPuerto Rico shall keep records andrender reports of the physical receiptand disposition of such liquors in ac-cordance with part 194 (‘‘Liquor Deal-ers’’) of this chapter: Provided, That ifthe person who is responsible for re-lease of the liquors from customs cus-tody does not take physical possessionof the liquors, he shall keep commer-cial records reflecting such release;such records shall identify the kindand quantity of the liquors released,the name and address of the person re-ceiving the liquors from customs cus-tody, and shall be filed chronologicallyby release dates. Records and reportswill not be required under this partwith respect of liquors while in cus-toms custody.


(72 Stat. 1342, 1395; 26 U.S.C. 5114, 5555)

[T.D. ATF–2, 37 FR 22736, Oct. 21, 1972. Redes-ignated at 40 FR 16835, Apr. 15, 1975, andamended by T.D. ATF–172, 49 FR 14943, Apr.16, 1984]


53


§ 250.164 Proprietors of taxpaid prem-ises.

Transactions involving the bringingof liquors into the United States fromPuerto Rico by proprietors of distilledspirits plants in the United Statesqualified under the provisions of thischapter shall be recorded and reportedin accordance with the regulations gov-erning the operations of such premisesin the United States.

[T.D. 6402, 24 FR 6090, July 30, 1959. Redesig-nated at 40 FR 16835, Apr. 15, 1975, andamended by T.D. ATF–198, 50 FR 8551, Mar. 1,1985]

§ 250.164a Package gauge record.When required in this part, with re-

spect to Puerto Rican spirits, a pack-age gauge record shall be prepared toshow:

(a) The date prepared;(b) The related transaction form and

its serial number;(c) The producer or rectifier (proc-

essor) of the spirits, and his name, ad-dress, and plant registration number;and

(d) For each package, the:(1) Package identification or serial

number;(2) Kind of spirits;(3) Gross weight;(4) Tare;(5) Net weight;(6) Proof gallons; and(7) Proof.

(Approved by the Office of Management andBudget under control number 1512–0250)[T.D. ATF–198, 50 FR 8551, Mar. 1, 1985]

§ 250.165 Certificate of effective taxrate computation.

(a) Where distilled spirits of PuertoRican manufacture which contain eli-gible wine or eligible flavors are to betax determined for shipment to theUnited States or are to be shipped tothe United States without payment oftax for transfer from customs custodyto ATF bond, the consignor shall pre-pare a certificate of effective tax ratecomputation showing the:

(1) The serial number of ATF Form5110.31 or 5110.51;

(2) Elements necessary to computethe effective tax rate in accordancewith § 250.79a as follows—

(i) Proof gallons of distilled spirits(exclusive of distilled spirits derivedfrom eligible flavors);

(ii) Wine gallons of each eligible wineand the percentage of alcohol by vol-ume of each; and

(iii) Proof gallons of distilled spiritsderived from each eligible flavor;

(3) Date of the statement of eligi-bility for each eligible flavor (see§ 250.50a).

(4) Effective tax rate applied to theproduct.

(5) Signature and title of the con-signor.

(b) If the spirits are tax determinedfor shipment to the United States, theproprietor shall retain the certificatefor a period of not less than three yearsafter the last tax determination towhich the certificate is applicable. Ifthe spirits are shipped to the UnitedStates for transfer from Customs cus-tody to the bonded premises of a dis-tilled spirits plant, the proprietor shallforward the original to the consigneedistilled spirits plant in the UnitedStates and retain a copy for his files.

(Approved by Office of Management andBudget under control number 1512—0203)

(Sec. 201, Pub. L. 85–859, 72 Stat. 1366, asamended (26 U.S.C. 5232); Sec. 6, Pub. L. 96–598, 94 Stat. 3488, as amended (26 U.S.C. 5010))

[T.D. ATF–297, 55 FR 18067, Apr. 30, 1990]

Subpart I—Claims for Drawbackon Eligible Articles From Puer-to Rico

SOURCE: T.D. ATF–263, 52 FR 46594, Dec. 9,1987, unless otherwise noted.

§ 250.170 Drawback of tax.Any person who brings eligible arti-

cles into the United States from Puer-to Rico may claim drawback of the dis-tilled spirits excise taxes paid on sucharticles as provided in this subpart.

§ 250.171 Special tax.Any person filing claim for drawback

of tax on eligible articles brought intothe United States from Puerto Ricoshall pay special tax as required by 26U.S.C. 5131. For purposes of special tax,subparts C and D of part 17 of thischapter shall apply as if the use andtax determination occurred in the


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27 CFR Ch. I (4-1-97 Edition)§ 250.172

United States at the time the articlewas brought into the United Statesand, each business location from whichentry of eligible articles is caused oreffected shall be treated as a place ofmanufacture. If special tax is paid forany such business location under part197 of this chapter, as a place wherenonbeverage products are manufac-tured for purposes of drawback, thenno additional special tax need be paidfor that location under this section.

[T.D. ATF-263, 52 FR 46594, Dec. 9, 1987, asamended by T.D. ATF-271, 53 FR 17559, May17, 1988; T.D. ATF–379, 61 FR 31427, June 20,1996]

§ 250.172 Bonds.(a) General. Persons bringing eligible

articles into the United States fromPuerto Rico and intending to filemonthly claims for drawback under theprovisions of this subpart shall obtaina bond on Form 5154.3. When the limitof liability under a bond given in lessthan the maximum amount has beenreached, further drawback on monthlyclaims may be suspended until astrengthening or superseding bond in asufficient amount has been furnished.For provisions relating to bonding re-quirements, subpart E of part 17 of thischapter is incorporated in this part,but references therein to a regional di-rector (compliance) shall apply, forpurposes of this part, to the Chief,Puerto Rico Operations.

(b) Approval required. No personbringing eligible articles into the Unit-ed States from Puerto Rico may filemonthly claims for drawback under theprovisions of this subpart until bond onForm 5154.3 has been approved by theChief, Puerto Rico Operations. Bondsapproved by a regional director (com-pliance) prior to the effective date ofthis provision shall remain in effect.

T.D. ATF–379, 61 FR 31427, June 20, 1996]

§ 250.173 Claims for drawback.(a) General. Persons bringing eligible

articles into the United States fromPuerto Rico shall file claim for draw-back on Form 2635 (5620.8) with theChief, Puerto Rico Operations. Uponfinding that the claimant has satisfiedthe requirements of this subpart, theregional director (compliance) shall

allow the drawback of taxes at a rateof $1 less than the lesser of $10.50 aproof gallon or the rate specified in 26U.S.C. 5001(a).

(b) Information on claims. The claimmust set forth the following:

(1) That the special tax has beenpaid;

(2) That the eligible articles broughtinto the United States on which draw-back is claimed are fully tax paid ortax-determined;

(3) That the eligible articles on whichdrawback is claimed are nonbeverageproducts; and

(4) That the eligible articles weremanufactured in Puerto Rico in com-pliance with an approved formula inaccordance with § 250.51.

(c) Supporting data. Each claim shallbe accompanied by supporting data asspecified in this paragraph. ATF Form5154.2, Supporting Data for Nonbev-erage Drawback Claims, may be used,or the claimant may use any suitableformat that provides the following in-formation:

(1) The control number of the SpecialTax Stamp and the tax year for whichissued;

(2) A description of each eligible arti-cle as follows:

(i) Name and type of each product;(ii) Name and address of the manu-

facturer of each product;(iii) Formula number;(iv) Alcohol content of each product;(v) Quantity of each product;(vi) Proof gallons of distilled spirits

contained in each product;(vii) Date of entry of the eligible

product into the United States, and(viii) The serial number of each ATF

Form 487–B (5170.7) covering such arti-cles shipped to the United States.

(d) Date of filing claim. Quarterlyclaims for drawback shall be filed withthe Chief, Puerto Rico Operations,within the 6 months next succeedingthe quarter in which the eligible prod-ucts covered by the claim were broughtinto the United States. Monthly claimsfor drawback may be filed at any timeafter the end of the month in which theeligible products covered by the claimwere brought into the United States,but must be filed not later than theclose of the sixth month succeeding the


55


quarter in which the eligible productswere brought into the United States.


[T.D. ATF-263, 52 FR 46594, Dec. 9, 1987, asamended by T.D. ATF–271, 53 FR 17559, May17, 1988; T.D. ATF–379, 61 FR 31427, June 20,1996]

§ 250.174 Records.(a) General. Every person intending

to file claim for drawback on eligiblearticles brought into the United Statesfrom Puerto Rico shall keep permanentrecords of the data elements requiredby this section. Such records shall bemaintained at the business premisesfor which the claim is filed and shall beavailable for inspection by any ATF of-ficer during business hours.

(b) Details of records. Each person in-tending to claim drawback on eligiblearticles brought into the United Statesshall maintain permanent recordsshowing the following data:

(1) The name, description, quantity,and formula number of each such arti-cle.

(2) The alcohol content of each sucharticle.

(3) Name and address of the manufac-turer and shipper, and date of entryinto the United States.

(4) Evidence of taxpayment of dis-tilled spirits in accordance with para-graph (c) of this section.

(c) Evidence of taxpayment of distilledspirits. All shipments of eligible arti-cles from Puerto Rico to the UnitedStates shall be supported by the ven-dor’s commercial invoice which mustbear a certification as to taxpaymentby the person who determined or paidthe tax, and include the following in-formation:

(1) The name and address of vendor;(2) The number of the applicable in-

voice;(3) The serial or package identifica-

tion number of the container;(4) Name, type, and formula number

of the product;(5) The kind of spirits, proof, and

proof gallons in the container; and(6) The serial number of each Form

487–B (5170.7) covering such articlesshipped to the United States.

(d) Form of record. No particular formof record is prescribed, but the data re-

quired to be shown shall be readily as-certainable from the records kept bythe drawback claimant.

(e) Retention of records. Each draw-back claimant shall retain for a periodof not less than three years all recordsrequired by this subpart, all commer-cial invoices or shipping documents,and all bills of lading received evidenc-ing receipt and tax determination ofthe spirits. In addition, a copy of eachapproved formula returned to the man-ufacturer of eligible articles shall beretained for not less than three yearsfrom the date he files his last claim fordrawback under the formula. Therecords, forms, and formulas shall bereadily available during regular busi-ness hours for examination by ATF of-ficers.


Subpart Ia—Shipment of Dena-tured Spirits and ProductsMade With Denatured Spiritsto the United States FromPuerto Rico

SOURCE: T.D. ATF–199, 50 FR 9198, Mar. 1,1985, unless otherwise noted.

§ 250.191 Notice of shipment.

At least 5 business days before ship-ment, each proprietor of a distilledspirits plant in Puerto Rico who in-tends to ship denatured spirits to theUnited States in containers larger than5 gallons, and each person in PuertoRico who intends to ship productsmade with denatured spirits to theUnited States in containers larger than5 gallons shall notify the chemist ofthe Treasury of Puerto Rico of the in-tent to ship.


[T.D. ATF–199, 50 FR 9198, Mar. 1, 1985, T.D.ATF–199, 50 FR 20099, May 14, 1985]

§ 250.192 Samples and analysis.

The chemist of the Treasury of Puer-to Rico may take samples of the prod-uct to be shipped in order to determinethat it is eligible for tax-free status.


56

27 CFR Ch. I (4-1-97 Edition)§ 250.193

§ 250.193 Notification of tax liability.(a) If the chemist of the Treasury of

Puerto Rico finds that denatured spir-its or products made with denaturedspirits are not eligible for tax-freeshipment, before the shipment is made,the chemist will immediately notifythe shipper that the article is subjectto tax, payable in accordance with§§ 250.107 through 250.110.

(b) If the chemist of the Treasury ofPuerto Rico finds that denatured spir-its or products made with denaturedspirits are not eligible for fax-free ship-ment, after the shipment is made, thechemist will immediately notify theshipper that the tax shall be paid im-mediately in accordance with § 250.113.The chemist will also notify the re-gional director (compliance) of the con-signee’s region.

§ 250.194 Detention of articles.(a) Upon receiving a notification in

accordance with § 250.193(b), the re-gional director (compliance) will de-tain the article in accordance with part20 of this chapter or seize the article inaccordance with part 72 of this chapter.

(b) After the shipper furnishes proofthat the tax was paid in accordancewith § 250.113, the regional director(compliance) will release the article tothe consignee.

Subpart Ib—Shipment of Bulk Dis-tilled Spirits From Puerto Rico,Without Payment of Tax, forTransfer From Customs Cus-tody to Internal RevenueBond

AUTHORITY: Sec. 3, Pub. L. 90–630, 82 Stat.1328, as amended (26 U.S.C. 5232).


§ 250.196 General.Under the provisions of this subpart

and § 250.86, distilled spirits broughtinto the United States from PuertoRico in bulk containers may be with-drawn by the proprietor of a distilledspirits plant from customs custody andtransferred in such bulk containers orby pipeline to the bonded premises ofhis plant, without payment of the in-

ternal revenue tax, if any, imposed onsuch spirits by 26 U.S.C. 7652. Suchspirits so withdrawn and transferred toa distilled spirits plant (a) may be re-distilled or denatured only if of 185 de-grees or more of proof; and (b) may bewithdrawn from internal revenue bondfor any purpose authorized by 26 U.S.C.chapter 51, in the same manner as do-mestic distilled spirits. Spirits trans-ferred from customs custody to thebonded premises of a distilled spiritsplant under the provisions of this sub-part shall be received and storedthereat, and withdrawn or transferredtherefrom, subject to applicable provi-sions of part 19 of this chapter. Theperson operating the bonded premisesof the distilled spirits plant to whichspirits are transferred under the provi-sions of this subpart shall become lia-ble for the tax on distilled spirits with-drawn from customs custody under 26U.S.C. 5232, upon release of the spiritsfrom customs custody and the personbringing the spirits into the UnitedStates shall thereupon be relieved of li-ability for the tax.

§ 250.197 Furnishing formula to con-signee.

Prior to the first shipment, the per-son shipping the spirits to the UnitedStates shall furnish a reproduced copyof the approved formula covering suchspirits to the regional director (compli-ance) of each region in which a con-signee’s distilled spirits plant is lo-cated, and to the proprietor of each dis-tilled spirits plant to receive the spir-its.


[T.D. ATF–198, 50 FR 8551, Mar. 1, 1985]

§ 250.198 [Reserved]

§ 250.199 Application and permit toship, ATF Form 5110.31.

Before spirits of Puerto Rican manu-facture may be shipped to the UnitedStates without payment of tax forwithdrawal from customs custody andtransfer to internal revenue bond, anapplication by the consignor on ATFForm 5110.31 for permit to ship must beapproved by the Secretary. All copiesof the application (original and five


57

Bureau of Alcohol, Tobacco and Firearms, Treasury § 250.199f

copies) shall be delivered to the reve-nue agent.

§ 250.199a Action by revenue agent.(a) Gauge. Puerto Rican spirits to be

withdrawn for shipment to the UnitedStates as provided in this subpart shallbe gauged by the revenue agent priorto withdrawal from the consignorpremises. The revenue agent shallrecord the quantity and proof of thespirits gauged on ATF Form 5110.31. Ifthe spirits are in packages, the revenueagent shall prepare in sextuplicate apackage gauge record according to§ 250.164a, attach the package gaugerecord to ATF Form 5110.31, and dis-pose of the form (and any attachments)according to the instructions thereon.

(b) Sealing bulk conveyances. When ashipment is made in a tank, van, orother bulk conveyance (other than bar-rels, drums, or similar packages thatare not containerized), all openings af-fording access to the spirits shall besealed by the Puerto Rican revenueagent is such manner as will preventunauthorized removal of spirits with-out detection.


§ 250.199b Issuance and disposition ofpermit.

When the Secretary receives an ap-plication on ATF Form 5110.31 and hefinds that the applicant is in compli-ance with law and regulations, he willexecute the permit to ship on all copiesof ATF Form 5110.31, retain one copy,and any accompanying package gaugerecord as provided in § 250.164a, and re-turn the remaining copies to the con-signor who shall distribute them in ac-cordance with the instructions on ATFForm 5110.31.


§ 250.199c Action by carrier.The carrier of the spirits specified on

the ATF Form 5110.31 shall, at the timeof unlading at the port of arrival in theUnited States, segregate and arrangethe containers of spirits of convenientcustoms examination and shall assume

any expense incurred in connectiontherewith.

§ 250.199d Customs inspection and re-lease.

On receipt of a properly executedATF Form 5110.31 from the consignor,the customs officer at the port of arriv-al in the United States shall inspectthe corresponding shipment of spirits:

(a) If a shipment is in a bulk convey-ance, and:

(1) The seals are intact, he shall re-lease the shipment; or

(2) If the seals are broken, he shall,before release of the spirits, affix cus-toms seals.

(b) If a shipment in packages doesnot arrive in a sealed conveyance, thepackages shall be inspected, and if itappears that any package has sus-tained a loss, the package shall beweighed and its new gross weight shallbe entered in contrasting color on thepackage gauge record attached to therelated ATF Form 5110.31. The serialnumbers of any seals affixed by thecustoms officers shall be reported onATF Form 5110.31 under remarks withan explanation and description of anyevidence of loss. After completing hisinspection, the customs officer shallexecute his certificate on each copy ofATF Form 5110.31 and show thereonany exceptions found at the time of hisrelease for transfer of the spirits to in-ternal revenue bond. Missing packagesshould be reported separately frompackages which have sustained losses.The customs officer shall then releasethe spirits to the consignee’s represent-ative and distribute all forms in ac-cordance with the instructions on ATFForm 5110.31.


§ 250.199e [Reserved]

§ 250.199f Consignee premises.(a) General. When Puerto Rican spir-

its are received from customs custodyunder the provisions of this subpart,the consignee proprietor shall executethe certificate of receipt on ATF Form5110.31 and examine all containers forevidence of loss. If it appears that spir-its were lost by theft or unusual event,


58

27 CFR Ch. I (4-1-97 Edition)§ 250.200

the proprietor shall determine thequantity of spirits lost and report theloss according to 27 CFR 19.562.

(b) Packages. Packages shall be re-ceived on bonded premises by the pro-prietor on the basis of the most recentofficial gauge.

(c) Distribution of forms. The propri-etor shall retain the original of ATFForm 5110.31 (and any attachments)and submit the copy of each to the re-gional director (compliance).

(Approved by the Office of Management andBudget under control numbers 1512–0200 and1512–0250)

[T.D. ATF–198, 50 FR 8552, Mar. 1, 1985]

Subpart J—Products Coming Intothe United States From the Vir-gin Islands

§ 250.200 Taxable status.(a) Liquors coming into the United

States from the Virgin Islands, exceptas provided in § 250.201, are subject to atax equal to the internal revenue taximposed upon the production in theUnited States of like liquors. Articlescoming into the United States from theVirgin Islands, except as provided in§ 250.201, are subject to tax on the liq-uors contained therein at the rates im-posed in the United States on like liq-uors of domestic production.

(b) The excise taxes collected on dis-tilled spirits and articles containingdistilled spirits shall be deposited intothe Treasury of the Virgin Islands onlyif at least 92 percent of the alcoholiccontent of such product is rum. Theamount deposited into the Treasury ofthe Virgin Islands shall not exceed thelesser of $10.50, or the rate imposed by26 U.S.C. 5001(a)(1) (including adjust-ments to the effective tax rate under 26U.S.C. 5010), on each proof gallon ofsuch distilled spirits or article contain-ing distilled spirits coming into theUnited States. Such excise tax pay-ments to the Treasury of the Virgin Is-lands will be reduced by one percentand the estimated amount of refunds orcredits, and may be further reduced bycertain amounts deposited to the U.S.Treasury as miscellaneous receipts.The moneys so transferred and paidover shall constitute a separate fund inthe Treasury of the Virgin Islands, and

may be expended as the Virgin Islandslegislature may determine.

(c) Except for products described in26 U.S.C. 7652(c), no excise taxes shallbe deposited into the Treasury of theVirgin Islands if an excise tax subsidyis provided by the Virgin Islands thatis of a kind different from, or in anamount per value or volume of produc-tion greater than, any subsidy offeredby the Virgin Islands to industriesmanufacturing products not subject toFederal excise tax.

(Sec. 2682, Pub. L. 98–369, 98 Stat. 494 (26U.S.C. 7652))[T.D. ATF–175, 49 FR 20804, May 16, 1984, asamended by T.D. ATF–206, 50 FR 15888, Apr.23, 1985]

§ 250.201 Products exempt from tax.(a) General. Industrial spirits, dena-

tured spirits, and products made withdenatured spirits in the Virgin Islandsmay be brought into the United Stateswithout incurring tax liability imposedby 26 U.S.C. 5001 or 7652.

(b) Industrial spirits. A distiller of in-dustrial spirits who qualifies under reg-ulations issued by the Governor of theVirgin Islands may ship industrial spir-its to a tax-free alcohol user in theUnited States who holds a permitunder part 22 of this chapter. Ship-ments shall be made in accordancewith the requirements of subpart O ofthis part.

(c) Denatured spirits. A distiller whoqualifies under the regulations issuedby the Governor of the Virgin Islandsand who denatures spirits in accord-ance with part 21 of this chapter mayship (1) completely denatured alcoholto anyone in the United States, and/or(2) specially denatured spirits to adealer or user of specially denaturedspirits in the United States or PuertoRico who holds a permit under part 20of this chapter. Shipments shall bemade in accordance with the require-ments of subpart O of this part.

(d) Products made with denatured spir-its. A person in the Virgin Islands whomanufactures products with com-pletely denatured alcohol or speciallydenatured spirits in accordance withthe requirements of part 20 of thischapter and regulations issued by theGovernor of the Virgin Islands mayship those products to the United


59


States in accordance with the require-ments of subpart O of this part.

[T.D. ATF–199, 50 FR 9199, Mar. 6, 1985]

§ 250.201a Production in the Virgin Is-lands for tax-free shipment to theUnited States.

(a) Authority of the Governor to issueregulations. The Governor of the VirginIslands, or his duly authorized agents,are authorized to issue or adopt suchregulations (and to approve such bonds,and to issue, suspend, or revoke suchpermits, as may be required by suchregulations) as are necessary to insurethat:

(1) Industrial spirits produced ormanufactured in the Virgin Islands andshipped to the United States free of taxfor the purposes authorized in 26 U.S.C.5214(a)(2) and (3);

(2) Denatured spirits manufactured inthe Virgin Islands for shipment to theUnited States free of tax, and

(3) Products manufactured in the Vir-gin Islands with denatured spirits, forshipment to the United States free oftax,

conform in all respects to the require-ments of law and this chapter imposedon like products of domestic manufac-ture.

(b) Law and regulations applicable.Regulations having been issued by theGovernor of the Virgin Islands and con-curred in by the Secretary of theTreasury of the United States to gov-ern the production, warehousing, anddenaturation of spirits and the use ofdenatured spirits in the manufacture ofproducts for shipment to the UnitedStates free of tax, such regulations areapplicable in the Virgin Islands and theVirgin Islands are hereby exemptedfrom

(1) All provisions of 26 U.S.C. chapter51, with the exception of 26 U.S.C.5314(b) and 5687; and

(2) The provisions of this chapter inrespect of the production, bondedwarehousing, denaturation, and with-drawal of distilled spirits and the useof denatured spirits in the UnitedStates:Provided, That such exemption shall beeffective only to the extent that anyamendments or revisions of the regula-tions issued by the Governor of the

Virgin Islands, or his duly authorizedagents, are concurred in by the Sec-retary of the Treasury of the UnitedStates or his delegate. Otherwise, allprovisions of law as provided in 26U.S.C. 5314(b), and the provisions ofthis chapter in respect of the produc-tion, bonded warehousing, denatura-tion, and withdrawal from bond of dis-tilled spirits and denatured spirits andthe use of denatured spirits in the man-ufacture of products shall extend toand apply in the Virgin Islands (i) inrespect of the production, bondedwarehousing, and withdrawal of spiritsfor shipment to the United States freeof tax for the purposes authorized in 26U.S.C. 5214(a)(2) and (3), and (ii) in re-spect of the production, bondedwarehousing, and denaturation of spir-its, and to the withdrawal and use ofdenatured spirits, where the denaturedspirits or products containing dena-tured spirits are to be shipped to theUnited States free of tax.

[T.D. 6402, 24 FR 6090, July 30, 1959. Redesig-nated at 40 FR 16835, Apr. 15, 1975, andamended by T.D. ATF–48, 44 FR 55853, Sept.28, 1979; T.D. ATF–198, 50 FR 8552, Mar. 1,1985]

§ 250.201b [Reserved]

§ 250.201c Shipments of bulk distilledspirits to the United States withoutpayment of tax.

Bulk distilled spirits may be broughtinto the United States from the VirginIslands without payment of tax fortransfer from customs custody to thebonded premises of a distilled spiritsplant qualified under Part 19 of thischapter. Such shipments are subject tothe provisions of Subpart Oa.

[T.D. ATF–62, 44 FR 71715, Dec. 11, 1979]

§ 250.202 Requirements of the FederalAlcohol Administration Act.

Every person, except an agency of aState or a political subdivision thereofor any officer or employee of any suchagency, bringing liquors into the Unit-ed States from the Virgin Islands fornonindustrial use must obtain an im-porter’s basic permit therefor and filewith the district director of customs atthe port of entry a certified or photo-static copy thereof, and every personand any agency of a State or political


60

27 CFR Ch. I (4-1-97 Edition)§ 250.203

subdivision thereof or any officer oremployee of such agency, bringing liq-uors into the United States from theVirgin Islands for nonindustrial usemust file with the district director ofcustoms at the port of entry a certifi-cate of label approval, in accordancewith the requirements of the FederalAlcohol Administration Act and regu-lations issued pursuant thereto. Tour-ists bringing liquors into the UnitedStates for personal or other non-commercial use are not subject to theprovisions of the Federal Alcohol Ad-ministration Act or regulations issuedpursuant thereto. (Parts 1, 4, 5, and 7 ofthis chapter)

(Secs. 3, 5, 49 Stat. 978, as amended, 981, asamended; 27 U.S.C. 203, 205)


EDITORIAL NOTE: For Federal Register cita-tions affecting § 250.202, see the List of CFRSections Affected in the Finding Aids sec-tion of this volume.

§ 250.203 Containers of 1 gallon (3.785liters) or less.

Containers of distilled spiritsbrought into the United States fromthe Virgin Islands, having a capacity ofnot more than 1 gallon (3.785 liters),shall conform to the requirements ofsubpart P of this part.

(Sec. 201, Pub. L. 85–859, 72 Stat. 1374 (26U.S.C. 5301))

[T.D. ATF–34, 41 FR 46864, Oct. 26, 1976]

§ 250.203a Containers in excess of 1gallon (3.785 liters).

Containers of distilled spiritsbrought into the United States fromthe Virgin Islands, having a capacity inexcess of 1 gallon (3.785 liters), are re-quired to be marked in accordance withcustoms regulations (19 CFR chapter I).

[T.D. 6695, 28 FR 12936, Dec. 5, 1963. Redesig-nated at 40 FR 16835, Apr. 15, 1975, andamended by T.D. ATF–34, 41 FR 46864, Oct.26, 1976; T.D. ATF–206, 50 FR 23955, June 7,1985]

§ 250.204 Regauge.Distilled spirits withdrawn from in-

sular bonded warehouses for shipmentto the United States may be gauged atthe time of withdrawal by an insular

gauger. When such gauges are made, arecord of gauge shall be prepared bythe insular gauger showing the name ofthe distiller; and the serial number, theproof of the spirits, and the wine andproof gallon contents of each packagegauged. The report of gauge shall be at-tached to the certificate prescribed in§ 250.205.


[T.D. ATF–198, 50 FR 8552, Mar. 1 1985]

§ 250.204a Verification of eligiblewines and eligible flavors.

(a) Any person who, after December1, 1990, brings into the United Statesfrom the Virgin Islands any distilledspirits on which the tax is to be paid ordetermined at an effective tax ratebased in part on the alcohol contentderived from eligible flavors or eligiblewines shall, before the first taxdeterminaton at that rate, request andreceive a statement of eligibility foreach wine or flavor to be used in thecomputation of the effective tax rate.

(b) To receive a statement of eligi-bility, the person bringing in the dis-tilled spirits shall submit to the ATFNational Laboratory, 1401 ResearchBoulevard, Rockville, MD 20850, the fol-lowing:

(1) An 8-ounce sample of each dis-tilled spirits, wine and flavor used inthe product;

(2) A statement of composition ofeach flavor, listing—

(i) The name and percentage of alco-hol by volume of the flavor; and

(ii) The name and quantity of eachingredient used in the manufacture ofthe flavor; and

(3) A statement of the kind and alco-holic content of each wine.



[T.D. ATF–297, 55 FR 18067, Apr. 30, 1990]

§ 250.205 Certificate.(a) Every person bringing liquors or

articles under this part into the UnitedStates from the Virgin Islands, except


61


tourists, shall obtain a certificate inthe English language from the manu-facturer for each shipment showing thefollowing information:

(1) The name and address of the con-signee.

(2) The kind and brand name.(3) The quantity thereof as follows—(i) If distilled spirits, the proof gal-

lons or liters and degree of proof;(ii) If wine, the taxable grade and

wine gallons;(iii) If beer, the gallons (liquid meas-

ure) and the percentage of alcohol byvolume; and

(iv) If articles, the kind, quantity,and proof of the liquors used therein.

(4) For liquors manufactured under aformula—

(i) The number and date of the ap-proved formula;

(ii) A declaration that the liquorshave been manufactured in accordancewith the approved formula; and

(iii) The name and address of the per-son filing the formula.

(5) The name and address of the pro-ducer.

(6) For liquors and articles contain-ing liquors produced outside of the Vir-gin Islands, the country of origin foreach such liquor.

(7) For distilled spirits, a certifi-cation by the insular gauger as towhether they were regauged whenwithdrawn from the insular bondedwarehouse and, if regauged, whetherthey were at the time of withdrawal atthe proof indicated on the attachedrecord of gauge.

(8) For distilled spirits which containeligible wine or eligible flavors, the ef-fective tax rate applied to the productand the elements necessary to computethe effective tax rate in accordancewith § 250.262a as follows—

(i) Proof gallons of distilled spirits(exclusive of distilled spirits derivedfrom eligible flavors);

(ii) Wine gallons of each eligible wineand the percentage of alcohol by vol-ume of each;

(iii) Proof gallons of distilled spiritsderived from eligible flavors; and

(iv) On or after December 1, 1990, thename of the manufacturer, formulanumber from ATF F 5530.5 (1678) or5150.19 and date of approval or the date

of the statement of eligibility for eacheligible flavor (See § 250.204a); and

(v) After December 1, 1990, the date ofthe statement of eligibility for each el-igible wine.

(b) The person bringing the liquors orarticles into the United States shallfile the certificate and record of gaugewith the district director of customs atthe port of entry, at the time of entrysummary, as provided in §§ 250.260 and250.302.

(Approved by the Office of Management andBudget under control number 1512–0352.)

(Sec. 201, Pub. L. 85–859, 72 Stat. 1366, asamended (26 U.S.C. 5232); Sec. 6, Pub. L. 96–598, 94 Stat. 3488, as amended (26 U.S.C. 5010))

[T.D. ATF–297, 55 FR 18067, Apr. 30, 1990]

§ 250.206 Marking packages and cases.

The distiller, rectifier, or bottlershall serially number each case, barrel,cask, or similar container of distilledspirits filled for shipment to the UnitedStates. In addition to the serial num-ber of the container, the distiller, rec-tifier, or bottler shall plainly print,stamp, or stencil with durable coloringmaterial, in letters and figures not lessthan one-half inch high, on the head ofeach barrel, cask or similar containeror on one side of each case, as follows:

(a) The name of the manufacturer;(b) The brand name and kind of liq-

uor; and(c) The wine and proof gallon con-

tents; or, for bottles filed according tothe metric standards of fill prescribedby § 5.47a, of this chapter, the contentsin liters and the proof of the spirits.

[T.D. ATF–43, 42 FR 30836, June 17, 1977]

§ 250.207 Destruction of marks andbrands.

The marks, brands, and serial num-bers required by this part to be placedon barrels, casks, or similar contain-ers, or cases, shall not be removed, ob-scured or obliterated before the con-tents thereof have been removed.

[T.D. ATF–198, 50 FR 8552, Mar. 1, 1985]

§ 250.209 Samples.

The Director may require samples ofliquors and articles to be submitted


62

27 CFR Ch. I (4-1-97 Edition)§ 250.210

whenever desired for laboratory analy-ses in order to determine the rate oftax applicable thereto.



§ 250.210 Liquor dealer’s special taxes.Every person bringing liquors into

the United States from the Virgin Is-lands, who sells, or offers for sale, suchliquors shall file Form 5630.5 with ATFin accordance with the instruction onthe form, and pay special occupationaltax as a wholesale dealer in liquor or asa retail dealer in liquor, in accordancewith the laws and regulations govern-ing the payment of such special taxes(part 194 of this chapter).

(Sec. 201, Pub. L. 85–859, 72 Stat. 1340 asamended, 1343 as amended, 1344 as amended(26 U.S.C. 5111, 5112, 5121, 5122))

[T.D. ATF–70, 45 FR 33981, May, 21, 1980, asamended by T.D. ATF–251, 52 FR 19339, May22, 1987]

§ 250.211 Warehouse receipts coveringdistilled spirits.

Since the sale of warehouse receiptsfor distilled spirits is equivalent to thesale of distilled spirits, every personbringing distilled spirits into the Unit-ed States from the Virgin Islands, whosells, or offers for sale, warehouse re-ceipts for distilled spirits stored inwarehouses, or elsewhere, incurs liabil-ity to special tax as a dealer in liquorsat the place where such warehouse re-ceipts are sold, or offered for sale, andmust file return and pay occupationaltax as provided in § 250.210.

(68A Stat. 618, 620, 621; 26 U.S.C. 5111, 5112,5121, 5122)

Subpart K—Formulas for ProductsFrom the Virgin Islands


§ 250.220 Formulas for liquors.(a) Distilled spirits products. Persons in

the Virgin Islands who ship distilledspirits beverage products to the UnitedStates shall comply with the formularequirements of part 5 of this chapter.

If any product contains liquors madeoutside of Virgin Islands, the countryof origin for each such liquor shall bestated on the formula. All formulas re-quired by this paragraph shall be sub-mitted on ATF Form 5110.38, in accord-ance with § 250.224.

(b) Wine. Persons in the Virgin Is-lands who ship wine to the UnitedStates shall comply with the formularequirements of part 240 of this chap-ter. If any wines contains liquors madeoutside of the Virgin Islands, the coun-try of origin for each such liquor shallbe stated on the formula. All formulasrequired by this paragraph shall besubmitted on ATF Form 698 Supple-mental, in accordance with § 250.224.

[T.D. ATF–62, 44 FR 71715, Dec. 11, 1979, asamended by T.D. ATF–198, 50 FR 8552, Mar. 1,1985]

§ 250.221 Formulas for articles, eligiblearticles and products manufacturedwith denatured spirits.

(a) Formulas for articles and eligible ar-ticles. Formulas for articles made withdistilled spirits must show the quan-tity and proof of the distilled spiritsused, and the percentage of alcohol byvolume contained in the finished prod-uct. Formulas for articles made withbeer or wine must show the kind andquantity thereof (liquid measure), andthe percent of alcohol by volume ofsuch beer or wine. Formulas and sam-ples for eligible articles are required inaccordance with subpart F of part 17 ofthis chapter.

(b) Formulas for products manufacturedwith denatured spirits. Products manu-factured with denatured spirits shall bemanufactured in accordance with theformula requirements of part 20 of thischapter for similar products made inthe United States.

(1) Products may be made with com-pletely denatured alcohol for saleunder brand names under part 20 of thischapter without obtaining an approvedformula. If ingredients are added insufficient quantities to materiallychange the composition and characterof the completely denatured alcohol,the product is not classified as com-pletely denatured alcohol and may notbe marked, branded, or sold as com-pletely denatured alcohol.


63


(2) Products made with specially de-natured spirits shall be made in accord-ance with (i) a general-use formula ap-proved as provided in part 20 of thischapter, or (ii) an approved formula onForm 5150.19, or previously approved onATF Form 1479–A or 27–B Supple-mental.

(c) Formulas required. Formulas re-quired by this section shall be submit-ted on Form 5150.19, except that for-mulas for eligible articles shall be sub-mitted on Form 5154.1 (formerly 1678).Formulas shall be submitted in accord-ance with § 250.224. Any formula for aneligible article approved on Form5150.19 prior to October 23, 1986, shallcontinue to be valid until revoked orvoluntarily surrendered. Any personholding such a formula is not requiredto submit a new formula.

(Approved by the Office of Mangement andBudget under control number 1512–0494)[T.D. ATF–62, 44 FR 71715, Dec. 11, 1979, asamended by T.D. ATF–199, 50 FR 9199, Mar. 6,1985; T.D. ATF–263, 52 FR 46595, Dec. 9, 1987;T.D. ATF–379, 61 FR 31427, June 20, 1996]

§ 250.222 Still wines containing carbondioxide.

(a) General. Still wines may containnot more than 0.392 gram of carbon di-oxide per 100 milliliters of wine; exceptthat a tolerance to this maximum limi-tation, not to exceed 0.009 gram of car-bon dioxide per 100 milliliters of wine,will be allowed where the amount ofcarbon dioxide in excess of 0.392 gramper 100 milliliters of wine was due tomechanical variations which could notbe completely controlled under goodcommercial practices. Such tolerancewill not be allowed where it is foundthat the limitation of 0.392 gram of car-bon dioxide per 100 milliliters of wineis continuously or intentionally ex-ceeded, or where the variation resultsfrom the use of methods or equipmentnot in accord with good commercialpractices.

(b) Notice required. Proprietors in-tending to add carbon dioxide to, or re-tain carbon dioxide in, still wines to beshipped to the United States shall sub-mit a notice to the Chief, Puerto RicanOperations. The notice shall show thename and address of the proprietor andshall identify the method or process,the kinds (class and type) of wine, and

the type of equipment to be used. Acorrected notice shall be filed if thereis any change (except for minorchanges) in the information containedin the notice.

(c) Filing and disposition of notice. Thenotice required by paragraph (b) of thissection shall be submitted in triplicateto the Chief, Puerto Rican Operations,who shall retain one copy, forward onecopy to the Commissioner of Financeof the Virgin Islands, and return onecopy to the proprietor. The proprietorshall keep the notice available for ex-amination by insular agents.


(Sec. 201, Pub. L. 85–859, 72 Stat. 1331, asamended (26 U.S.C 5041))

[T.D. ATF–62, 44 FR 71715, Dec. 11, 1979, asamended by T.D. ATF–172, 49 FR 14943, Apr.16, 1984]

§ 250.223 Changes of formulas.

Any change in the ingredients com-posing a product covered by an ap-proved formula will necessitate thesubmission of a new formula.

§ 250.224 Filing and disposition of for-mulas.

Prior to shipment formulas requiredby this subpart shall be submitted intriplicate to and approved by the Di-rector. The Director shall retain onecopy, forward one copy to the Commis-sioner of Finance of the Virgin Islands,and return one copy to the applicant.The applicant shall maintain copies ofapproved formulas available for exam-ination by insular agents.

§ 250.225 Previously approved for-mulas.

Any formula approved on Form 27–BSupplemental prior to January 1, 1980,shall continue to be valid until revokedor voluntarily surrendered. Any personholding such a formula is not requiredto submit a new formula. If an ap-proved formula on Form 27–B Supple-mental indicates that carbon dioxidewill be added to, or retained in, stillwine, the notice requirement of § 250.222shall not apply.


64

27 CFR Ch. I (4-1-97 Edition)§ 250.230

Subpart L—Closures for DistilledSpirits From the Virgin Islands

GENERAL

§ 250.230 Containers of distilled spiritsto bear closures.

Containers of 1 gallon (3.785 liters) orless of distilled spirits, upon which allFederal internal revenue taxes havebeen paid or determined under provi-sions of this part, shall have closuresor other devices affixed in accordancewith the provisions of this part.

(Sec. 454, Pub. L. 98–369, 98 Stat. 494 (26U.S.C. 5301))

[T.D. ATF–206, 50 FR 23955, June 7, 1985]

§ 250.231 Affixing closures.Closures or other devices shall be se-

curely affixed to containers having ca-pacity of 1 gallon (3.785 liters) or less soas to leave a portion remaining on thecontainer when it is opened. In addi-tion, the closures or other devices shallbe constructed in such a manner as torequire that they be broken to gain ac-cess to the contents of the containers.

(Sec. 454, Pub. L. 98–369, 98 Stat. 494 (26U.S.C. 5301))

[T.D. ATF–206, 50 FR 23955, June 7, 1985]

Subpart M—Procedure at Port ofEntry From the Virgin Islands

§ 250.260 Certificate.Persons (except tourists) bringing

liquors or articles from the Virgin Is-lands into the United States shall filethe certificate provided for in § 250.205with the district director of customs atthe port of entry in the United States.

[T.D. ATF–62, 44 FR 71716, Dec. 11, 1979]

§ 250.261 Action by district director ofcustoms.

The district director of customs willdirect the proper customs gauger to de-termine the taxable quantity of liquorscontained in the consignment byregauge or inspection and report theresult thereof to the district director ofcustoms. Upon receipt of such reportthe district director of customs willrefer to the certificate required by§ 250.205 covering the product to deter-mine the rate of internal revenue tax

applicable thereto. When the rate oftax applicable to the product has beenascertained, the tax due on the con-signment will be determined accordingto §§ 250.262 through 250.265.



250.262 Determination of tax on dis-tilled spirits.

(a) If the certificate required by§ 250.205 covers distilled spirits, and thedistilled spirits are not being trans-ferred under subparts 0 or Oa of thispart, the tax imposed by 26 U.S.C. 7652which provides for a tax equal to thetax imposed by 26 U.S.C. 5001 will becollected on each proof gallon, andfractional part thereof, contained inthe shipment.

(b) A credit against the tax imposedon distilled spirits by 26 U.S.C. 7652 isallowable under 26 U.S.C. 5010 on eachproof gallon of alcohol derived from el-igible wine or from eligible flavorswhich do not exceed 2 1⁄2 percent of thefinished product on a proof gallonbasis. The credit is allowable at thetime the tax is payable as if it con-stituted a reduction in the rate of tax.

(c) Where credit against the tax is de-sired, the person liable for the tax shallestablish an effective tax rate in ac-cordance with § 250.262a. The effectivetax rate established will be applied toeach withdrawal or other disposition ofthe distilled spirits within the UnitedStates.

(Approved by the Office of Management andBudget under control number 1512–0352)(Sec. 201, Pub. L. 85–859, 72 Stat. 1356, asamended (26 U.S.C. 5201); Sec. 6, Pub. L. 96–598, 94 Stat. 3488, as amended (26 U.S.C. 5010),Act of August 16, 1954, Pub. L. 591, 68A Stat.907, as amended (26 U.S.C. 7652))[T.D. ATF–297, 55 FR 18068, Apr. 30, 1990]

§ 250.262a Computation of effective taxrate.

(a) The proprietor shall compute theeffective tax rate for distilled spiritscontaining eligible wine or eligible fla-vors as the ratio of the numerator anddenominator as follows:


65


1 Proof gallons by which distilled spirits de-rived from eligible flavors exceed 21⁄2% of thetotal proof gallons in the batch(100.9¥(21⁄2%)×3,371.8=16.6).

(1) The numerator will be the sum of:(i) The proof gallons of all distilled

spirits used in the product (exclusive ofdistilled spirits derived from eligibleflavors), multipled by the tax rate pre-scribed by 26 U.S.C. 5001;

(ii) The wine gallons of each eligiblewine used in the product, multiplied bythe tax rate prescribed by 26 U.S.C.5041(b) (1), (2), or (3), as applicable; and

(iii) The proof gallons of all distilledspirits derived from eligible flavorsused in the product, multiplied by thetax rate prescribed by 26 U.S.C. 5001,but only to the extent that such dis-tilled spirits exceed 21⁄2% of the denom-inator prescribed in paragraph (a)(2) ofthis section.

(2) The denominator will be the sumof:

(i) The proof gallons of all distilledspirits used in the product, includingdistilled spirits derived from eligibleflavors; and

(ii) The wine gallons of each eligiblewine used in the product, multiplied bytwice the percentage of alcohol by vol-ume of each, divided by 100.

(b) In determining the effective taxrate, quantities of distilled spirits, eli-gible wine, and eligible flavors will beexpressed to the nearest tenth of aproof gallon. The effective tax ratemay be rounded to as many decimalplaces as the proprietor deems appro-priate, provided that, such rate is ex-pressed no less exactly than the raterounded to the nearest whole cent, andthe effective tax rates for all productswill be consistently expressed to thesame number of decimal places. In suchcase, if the number is less than five itwill be dropped; if it is five or over, aunit will be added.

(c) The following is an example of theuse of the formula.

BATCH RECORD

Distilled spirits ......................... 2249.1proofgallons.


2265.0 winegallons.


1020.0 winegallons.

Eligible flavors .......................... 100.9 proofgallons.

2249 1 50 2265 0 07 1020 57 16.6 50

2249 1 100 9 2265 0 28 1020 38

362 85 423 55 601 40 10

2 350 0 634 2 387

611 90

3 371 827

1. ($13. ) . ($1. ) ($1. ) ($13. )

. . ( . . ) ( . )

$30, . $2, . $1, . $224.

, . . .6

$34, .

, .$10. ,

+ + +

+ + × + ×=

+ + +

+ += = the effective tax rate.

(Approved by the Office of Management andBudget under control number 1512–0352)(Sec. 6, Pub. L. 96–598, 94 Stat. 3488, asamended (26 U.S.C. 5010))

[T.D. ATF–297, 55 FR 18068, Apr. 30, 1990, asamended by T.D. ATF–307, 55 FR 52741, Dec.21, 1990]

§ 250.263 Determination of tax on beer.If the certificate prescribed in

§ 250.205 covers beer, the beer tax willbe collected on the basis of the numberof barrels of 31 gallons each, or frac-

tional parts thereof, contained in theshipment.

(68A Stat. 611, as amended; 26 U.S.C. 5051)

§ 250.264 Determination of tax onwine.

If the certificate prescribed in§ 250.205 covers wine, the wine tax willbe collected at the rates imposed bysection 5041, Internal Revenue Code, asamended.

(68A Stat. 609, as amended; 26 U.S.C. 5041)

§ 250.265 Determination of tax on arti-cles.

Where articles contain distilled spir-its, the tax will be colleted at the rate


66

27 CFR Ch. I (4-1-97 Edition)§ 250.266

prescribed by 26 U.S.C. 5001(a)(1) on allalcohol contained therein, regardless ofthe source. Articles containing onlywine and/or beer will be taxed at therates prescribed by 26 U.S.C. 5041 and/or5051, respectively. The quantities andkinds of liquors will be shown on thecertificate prescribed in § 250.205.

(Sec. 201, Pub. L. 85–859, 72 Stat. 1314, asamended (26 U.S.C. 5001, 5007))[T.D. ATF–62, 44 FR 71717, Dec. 11, 1979]

§ 250.266 Tax payment.The internal revenue tax on liquors

(except spirits transferred under sub-parts O or Oa of this part) and articlescoming into the United States from theVirgin Islands shall be paid to the dis-trict director of customs at the port ofentry, as provided by customs regula-tions. (19 CFR Ch. I)

[20 FR 6077, Aug. 20, 1955, as amended by T.D.7006, 34 FR 2249, Feb. 15, 1969. Redesignatedat 40 FR 16835, Apr. 15, 1975, and amended byT.D. ATF–198, 50 FR 8554, Mar. 1, 1985]

§ 250.267 Payment of tax by electronicfund transfer.

(a) Each person bringing liquors andarticles into the United States fromthe Virgin Islands who was liable, dur-ing a calendar year, for a gross amountequal to or exceeding five million dol-lars in distilled spirits taxes combiningtax liabilities incurred under this partand parts 19 and 251 of this chapter, agross amount equal to or exceeding fivemillion dollars in wine taxes combin-ing tax liabilities incurred under thispart and parts 240 and 251 of this chap-ter, or a gross amount equal to or ex-ceeding five million dollars in beertaxes combining tax liabilities in-curred under this part and parts 25 and251 of this chapter, shall use a commer-cial bank in making payment by elec-tronic fund transfer (EFT), as definedin paragraph (c) of this section, of suchtaxes during the succeeding calendaryear. Payment of such taxes by cash,check, or money order is not author-ized for a person bringing liquors andarticles into the United States fromthe Virgin Islands who is required, bythis section, to make remittances byEFT. For purposes of this section, thedollar amount of tax liability is to besummarized separately for distilledspirits taxes, wine taxes, or beer taxes,

and is defined as the gross tax liabilityon all taxable withdrawals from prem-ises in the United States and importa-tions (including products of the sametax class brought into the UnitedStates from Puerto Rico or the VirginIslands) during the calendar year, with-out regard to any drawbacks, credits,or refunds, for all premises from whichsuch activities are conducted.

(b) For the purposes of this section, a‘‘person’’ includes a controlled group ofcorporations, as defined in 26 U.S.C.1563, and implementing regulations in26 CFR 1.1563–1 through 1.1563–4, exceptthat the words ‘‘at least 80 percent’’shall be replaced by the words ‘‘morethan 50 percent’’ in each place it ap-pears in subsection (a) of 26 U.S.C. 1563,as well as in the implementing regula-tions. Also, the rules for a ‘‘controlledgroup of corporations’’ apply in a simi-lar fashion to groups which includepartnerships and/or sole proprietor-ships. If one entity maintains morethan 50% control over a group consist-ing of corporations and one, or more,partnerships and/or sole proprietor-ships, all of the members of the con-trolled group are one person for thepurpose of determining who is requiredto make remittances by EFT.

(c) Electronic fund transfer or EFTmeans any transfer of funds, otherthan a transaction originated bycheck, draft, or similar paper instru-ment, which is initiated through anelectronic terminal, telephonic instru-ment, or computer of magnetic tape, soas to order, instruct, or authorize a fi-nancial institution to either debit orcredit an account, in accordance withprocedures established by the U.S. Cus-toms Service.

(d) Each person who is required bythis section to make remittances byEFT shall make the EFT remittance inaccordance with the requirements ofthe U.S. Customs Service.

(Approved by the Office of Management andBudget under Control Number 1512–0457)

(Act of August 16, 1954, 68A Stat. 775, asamended (26 U.S.C. 6302); Sec. 201, Pub. L. 85–859, 72 Stat. 1335, as amended (26 U.S.C. 5061))

[T.D. ATF–245, 52 FR 532, Jan. 7, 1987]


67


Subpart N—Records and Reportsof Liquors From the Virgin Islands

RECORD AND REPORT OF LIQUORSBROUGHT INTO THE UNITED STATES

§ 250.272 General requirements.

Except as provided in § 250.273, everyperson, other than a tourist, bringingliquors into the United States from theVirgin Islands shall keep such recordsand render reports of the physical re-ceipt and disposition of such liquors asare required to be kept by a wholesaleor retail dealer, as applicable, underthe provisions of part 194 of this chap-ter. Any importer who is responsiblefor release of the liquors from customscustody and who does not take phys-ical possession of the liquors shall keepcommercial records reflecting such re-lease; such records shall identify thekind and quantity of the liquors re-leased, the name and address of theperson receiving the liquors from cus-toms custody, and shall be filed chron-ologically by release dates. Recordsand reports will not be required underthis part with respect of liquors whilein customs custody.


(72 Stat. 1342, 1345; 26 U.S.C. 5114, 5124)


§ 250.273 Proprietors of taxpaid prem-ises.

Transactions involving the bringingof liquors into the United States fromthe Virgin Islands by proprietors of dis-tilled spirits plants in the UnitedStates qualified under the provisions ofthis chapter shall be recorded and re-ported in accordance with the regula-tions governing the operations of suchpremises in the United States.

[T.D. 6478, 25 FR 6203, July 1, 1960. Redesig-nated at 40 FR 16835, Apr. 15, 1975]

§ 250.273a Transfer record.

The transfer record for Virgin Islandsspirits prescribed in § 250.301 shall showthe:

(a) Date prepared;

(b) Serial number of the transferrecord, beginning with ‘‘1’’ each Janu-ary 1;

(c) Name of the proprietor and dis-tilled spirits plant number to whichconsigned;

(d) Name and address of the con-signor;

(e) Kind of spirits;(f) Name of the producer;(g) Age (in years, months and days)

of the spirits;(h) Proof of the spirits;(i) Type and serial number of con-

tainers; and(j) Proof gallons of spirits in the ship-

ment.


(Sec. 807, Pub. L. 96–39, 93 Stat. 284 (26 U.S.C.5207))

[T.D. ATF–198, 50 FR 8554, Mar. 1, 1985]

§ 250.273b Package gauge record.

When required in this part with re-spect to Virgin Islands spirits, a pack-age gauge record shall be prepared toshow:

(a) The date prepared;(b) The related transaction record

and its serial number;(c) The producer, his name and ad-

dress; and(d) For each package, the:(1) Package identification or serial

number;(2) Kind of spirits;(3) Gross weight;(4) Tare;(5) Net weight;(6) Proof gallons; and(7) Proof.


[T.D. ATF–198, 50 FR 8554, Mar. 1, 1985]

FILING AND RETENTION OF RECORDS ANDREPORTS

§ 250.275 Filing.(a) All records and reports required

by this part will be maintained sepa-rately, by transaction or reportingdate, at the importer’s place of busi-ness. The regional director (compli-ance) may, pursuant to an application,authorize files, or an individual file, to


68

27 CFR Ch. I (4-1-97 Edition)§ 250.276

be maintained at another business lo-cation under the control of the im-porter, it the alternative location doesnot cause undue inconvenience to ATFor Customs officers desiring to exam-ine the files or delay in the timely sub-mission of documents.

(b) If an importer conducts wholesaleoperations, one legible copy of each re-quired record of receipt and dispositionshall be filed not later than one busi-ness day following the date of trans-action.

(c) If an importer conducts only re-tail operations, either loose-leaf orbook records may be maintained forthe daily receipt of liquors which con-tain all the required information.

(d) Supporting documents, such asconsignors’ invoices, delivery receipts,bills or lading, etc., or exact copies ofthe same, may be filed in accordancewith the importer’s regular accountingand recordkeeping practices.

(Sec. 201, Pub. L. 85–859, 72 Stat. 1342, asamended, 1395, as amended (26 U.S.C. 5114,5555))

[T.D. ATF–116, 47 FR 51573, Nov. 16, 1982]

§ 250.276 Retention.

All records required by this part, doc-uments or copies of documents sup-porting these records, and file copies ofreports required by this part to be sub-mitted to the regional director (com-pliance) or to the district district di-rector of customs shall be retained fornot less than three years, and duringthis period shall be available, duringbusiness hours, for inspection andcopying by ATF or customs officers.Furthermore, the regional director(compliance) may require these recordsto be kept for an additional period ofnot more than three years in any casewhere he determines retention nec-essary or advisable. Any records, orcopies thereof, containing any of theinformation required by this part to beprepared, wherever kept, shall also bemade available for inspection andcopying.

(68A Stat. 731 (26 U.S.C. 6001); Sec. 201, Pub.L. 85–859, 72 Stat. 1342, 1345, 1348, 1361, 1395 (26U.S.C. 5114, 5124, 5146, 5207, 5555))

[T.D. ATF–50, 43 FR 20494, May 12, 1978]

REPORT OF DISPOSITION OF RED STRIP

STAMPS ON DISCONTINUANCE OF BUSI-NESS

§ 250.277 Procedure.

The importer who discontinues orsells his business shall recall from hisagents, and his bottlers or exporters inthe Virgin Islands, all unused stampsin their custody. He shall submit hisentire stock of unused stamps, accom-panied by a report, in duplicate, of in-ventory, by size and quantity, to theregional director (compliance). Thesame procedure may be followed by animporter who has unused stamps forwhich he has no further use for anyreason. The regional director (compli-ance) shall then destroy the stampsand, after such destruction, note theaction taken on both copies of the in-ventory. He shall retain the originaland return the copy of the inventory tothe importer. In the case of discontinu-ance or sale of the business, the im-porter shall, within 5 days of the re-ceipt of the returned copy of the inven-tory, note the disposition of the stampson Form 96, mark the report ‘‘Final’’,and submit it to the regional director(compliance).

(72 Stat. 1358; 26 U.S.C. 5205)

[T.D. ATF–2, 37 FR 22739, Oct. 21, 1972. Redes-ignated at 40 FR 16835, Apr. 15, 1975]

Subpart O—Tax-Free Shipments tothe United States From the Vir-gin Islands

SOURCE: T.D. ATF–199, 50 FR 9199, Mar. 6,1985, unless otherwise noted.

§ 250.291 General.

(a) Industrial spirits may be shippedinto the United States to the holder ofa permit under part 22 of this chapter,in accordance with § 250.292 through250.294 and regulations issued by theGovernor of the Virgin Islands.

(b)(1) Specially denatured spirits maybe shipped into the United States tothe holder of a permit under part 20 ofthis chapter, in accordance with§§ 250.292 through 250.294 and regula-tions issued by the Governor of theVirgin Islands.


69


(2) Completely denatured alcoholmay be shipped to anyone in the Unit-ed States in accordance with §§ 250.295through 250.296 and regulations issuedby the Governor of the Virgin Islands.

(3) Denatured spirits shall be dena-tured in accordance with part 21 of thischapter and regulations issued by theGovernor of the Virgin Islands.

(c) Products made with denaturedspirits may be shipped to anyone in theUnited States in accordance with§§ 250.295 through 250.296 and regula-tions issued by the Governor of theVirgin Islands. These products are alsosubject to the requirements of § 250.221of this part.

SHIPMENT OF INDUSTRIAL SPIRITS ANDSPECIALLY DENATURED SPIRITS

§ 250.292 Copy of consignee’s permitunder part 20 or 22.

The consignor or consignee shall filea copy of the consignee’s permit issuedunder part 20 of this chapter (for ship-ments of specially denatured spirits) orpart 22 of this chapter (for shipments ofindustrial spirits) with the district di-rector of customs of the port of entry.The copy of the permit shall be ade-quate evidence that the consignee isauthorized to enter industrial spirits orspecially denatured spirits free of tax.

§ 250.293 Marks on containers.(a) Industrial spirits. The shipper shall

mark or label each immediate con-tainer of industrial spirits with the fol-lowing information:

(1) The name or trade name of thedistiller or shipper;

(2) The words ‘‘Virgin Islands Indus-trial Spirits’’;

(3) A package identification numberas required by subpart R of part 19 ofthis chapter;

(4) The date filled;(5) Proof; and(6) Quantity in proof gallons.(b) Specially denatured spirits. The

shipper shall mark or label each imme-diate container of specially denaturedspirits with the following information:

(1) Quantity, in gallons, or in litersand gallons;

(2) A serial number or package iden-tification number;

(3) Name and address of shipper;(4) The words ‘‘Virgin Islands Spe-

cially Denatured Alcohol’’ or ‘‘VirginIslands Specially Denatured Rum,’’ asappropriate;

(5) Formula number prescribed bypart 21 of this chapter;

(6) Proof, if the spirits were dena-tured at other than 190 proof;

(7) Denaturants used, if spirits weredenatured under an approved formulaauthorizing a choice of denaturants;and

(8) Quantity of denaturant used, ifthe approved formula authorizes achoice of quantities of denaturants.

§ 250.294 Record of shipment.

(a) Each shipment of industrial spir-its or specially denatured spirits fromthe Virgin Islands to the United Statesshall be accompanied by a record ofshipment. The record of shipment shallconsist of an invoice, bill of lading orsimilar document which shows the fol-lowing information:

(1) Consignor’s name and address;(2) Consignee’s name, address, and

permit number;(3) For each formula of specially de-

natured spirits—(i) The formula number prescribed by

part 21 of this chapter,(ii) The serial numbers or package

identification numbers of containers,and

(iii) The total quantity in wine gal-lons;

(4) For industrial spirits—(i) The package identification num-

bers of containers, and(ii) The total quantity in proof gal-

lons.(b) The record of shipment shall be

made available to custom officers in-specting the shipment.

(Records relating to industrial spirits ap-proved by the Office of Management andBudget under control number 1512–0334;records relating to specially denatured spir-its approved by the Office of Managementand Budget under control number 1512–0337)


70

27 CFR Ch. I (4-1-97 Edition)§ 250.295

SHIPMENT OF COMPLETELY DENATURED

ALCOHOL AND PRODUCTS MADE WITH

DENATURED SPIRITS

§ 250.295 Marks on containers.

(a) Completely denatured alcohol. (1)For each immediate container of com-pletely denatured alcohol with a capac-ity exceeding 1 gallon, the shipper shallmark or label on the head or side of thepackage or on the side of the casing,the following:

(i) The name and address of the per-son filling the container;

(ii) The contents in gallons;(iii) The words ‘‘Virgin Islands Com-

pletely Denatured Alcohol’’; and(iv) The formula number prescribed

by part 21 of this chapter.(2) In addition, if the container has a

capacity of 5 gallons or less, the words‘‘Completely Denatured Alcohol’’ shallbe in red letters on white background,and the label shall also have the words‘‘Caution—contains poisonous ingredi-ents’’ in red letters on white back-ground.

(b) Products made with denatured spir-its. The shipper shall mark or labeleach immediate container of a productmade with denatured spirits with thename, trade name or brand name of theproduct and the name and address ofthe shipper.

§ 250.296 Record of shipment.

(a) Each shipment of completely de-natured alcohol or products made withdenatured spirits shall be accompaniedby a record of shipment. The record ofshipment shall consist of an invoice,bill of lading or similar documentwhich shows the following information:

(1) Consignor’s name and address;(2) Consignee’s name and address;(3) Capacity and number of contain-

ers;(4) Total quantity shipped; and(5)(i) For completely denatured alco-

hol, the words ‘‘Virgin Islands Com-pletely Denatured Alcohol’’ and theformula number prescribed by part 21of this chapter, or

(ii) For products made with dena-tured spirits, the name, trade name orbrand name of the product.

(b) The record of shipment shall bemade available to customs officers in-specting the shipment.


ARRIVAL IN THE UNITED STATES

§ 250.297 General.The district director of customs shall

inspect each shipment of industrialspirits, specially denatured spirits,completely denatured alcohol, andproducts made with denatured spiritscoming into the United States from theVirgin Islands. If the shipment com-plies with the requirements of thispart, the products may be released freeof tax.

Subpart Oa—Shipment of Bulk Dis-tilled Spirits From the Virgin Is-lands, Without Payment ofTax, for Transfer From CustomsCustody to Internal RevenueBond

AUTHORITY: Sec. 3, Pub. L. 90–630, 82 Stat.1328, as amended (26 U.S.C. 5232).


§ 250.300 General.Distilled spirits brought into the

United States from the Virgin Islandsin bulk containers may, under the pro-visions of this subpart, be withdrawnby the proprietor of a distilled spiritsplant from customs custody and trans-ferred in such bulk containers or bypipeline to the bonded premises of hisplant, without payment of the internalrevenue tax imposed on such spirits by26 U.S.C. 7652. Such spirits so with-drawn and transferred to a distilledspirits plant (a) may be redistilled ordenatured only if 185 degrees or more ofproof, and (b) may be withdrawn frominternal revenue bond for any purposeauthorized by 26 U.S.C. chapter 51, inthe same manner as domestic distilledspirits. Spirits transferred from cus-toms custody to the bonded premises ofa distilled spirits plant under the pro-visions of this subpart shall be receivedand stored thereat, and withdrawn ortransferred therefrom, subject to theprovisions of part 19 of this chapter.


71


The person operating the bonded prem-ises of the distilled spirits plant towhich spirits are transferred under theprovisions of this subpart shall becomeliable for the tax on distilled spiritswithdrawn from customs custody under26 U.S.C. 5232, upon release of the spir-its from customs custody, and the per-son bringing the spirits into the UnitedStates shall thereupon be relieved ofhis liability for such tax.

§ 250.301 Preparation of transferrecord.

The person bringing spirits into theUnited States from the Virgin Islandsunder this subpart shall prepare atransfer record, in triplicate, accordingto § 250.273a, and present the record tothe customs officer responsible for in-spection and release of the spirits. Aseparate transfer record shall be pre-pared for each conveyance.


[T.D. ATF–198, 50 FR 8555, Mar. 1, 1985]

§ 250.302 Gauge and certification.

(a) Gauge. If Virgin Islands spirits tobe transferred from customs custody tointernal revenue bond as provided inthis subpart are not gauged by an insu-lar gauger at the time of their with-drawal from an insular bonded ware-house, as provided in § 250.204 of thischapter, the insular consignor shall ef-fect a gauge of each bulk container andshall prepare a record of such gauge, induplicate, and attach both copies tothe certificate required by § 250.205 ofthis chapter. If the gauge is made bythe insular gauger his record of gaugeshall be prepared in duplicate and bothcopies shall be attached to the certifi-cate.

(b) Certification. The certificationprescribed by § 250.205 of this chaptershall be prepared in duplicate if theVirgin Islands spirits are to be trans-ferred from customs custody to inter-nal revenue bond. Both copies of thecertificate, with the applicable recordof gauge attached, shall be filed withthe district director of customs at theport of entry. The original of the cer-tificate and related record of gaugeshall be attached by the customs offi-cer to the original of the transfer

record received as provided in § 250.301from the importer.


[T.D. ATF–198, 50 FR 8555, Mar. 1, 1985]

§250.303 Customs inspection and re-lease.

The customs officer shall not releasedistilled spirits under this subpartuntil he inspects the spirits, and, if itappears that losses in transit were sus-tained from any container, he shallgauge the spirits in such container. Ifthe spirits are in a bulk conveyance,the customs officer shall record theelements of his gauge on the transferrecord, or, if the spirits are in pack-ages, on the gauge record required by§ 250.302, and attach it to the transferrecord. The customs officer shall alsorecord on the transfer record the portof entry, carrier identification, andwarehouse entry number. When theconsignee has complied with all cus-toms requirements, the customs officershall release the spirits for transfer tothe distilled spirits plant, by datingand signing the transfer record withhis title the statement: ‘‘To the best ofmy knowledge the information hereonis accurate and the spirits are re-leased’’. The customs officer shall re-tain a copy of the transfer record andany attachment, forward a copy of thetransfer record and any attachments tothe regional director (compliance), andgive the original of the transfer recordwith any attachments to the con-signee.

[T.D. ATF–198, 50 FR 8555, Mar. 1, 1985]

§ 250.304 Bulk conveyances to besealed.

When a shipment of distilled spiritsfrom customs custody to the distilledspirits plant is made in a tank, tankbarge, cargo container, tank car, tanktruck, or similar bulk conveyance, allopenings affording access to the spiritsshall be sealed by the customs officerwith customs seals in such manner aswill prevent unauthorized removal ofspirits through such openings withoutdetection.


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27 CFR Ch. I (4-1-97 Edition)§ 250.305

§ 250.305 Receipt by consignee.Proprietors of distilled spirits plants

who receive Virgin Islands spiritsunder this subpart shall follow the re-quirements in 27 CFR part 19 for spiritsreceived by transfer in bond. However,proprietors are not required to file ap-plication on ATF Form 5100.16 to re-ceive Virgin Islands spirits from cus-toms custody.

[T.D. ATF–198, 50 FR 8555, Mar. 1, 1985]

Subpart Ob—Claims for Drawbackon Eligible Articles From theVirgin Islands


§ 250.306 Drawback of tax.Any person who brings eligible arti-

cles into the United States from theVirgin Islands may claim drawback ofthe distilled spirits excise taxes paidon such articles as provided in this sub-part.

§ 250.307 Special tax.Any person filing claim for drawback

of tax on eligible articles brought intothe United States from the Virgin Is-lands shall pay special tax as requiredby 26 U.S.C. 5131. For purposes of spe-cial tax, subparts C and D of part 17 ofthis chapter shall apply as if the useand tax determination occurred in theUnited States at the time the articlewas brought into the United States,and each business location from whichentry of eligible articles is caused oreffected shall be treated as a place ofmanufacture. If special tax is paid forany such business location under part17 of this chapter, as a place wherenonbeverage products are manufac-tured for purposes of drawback, thenno additional special tax need be paidfor that location under this section.


§ 250.308 Bonds.(a) General. Persons bringing eligible

articles into the United States fromthe Virgin Islands and intending to filemonthly claims for drawback under the

provisions of this subpart shall obtaina bond on Form 5154.3. When the limitof liability under a bond given in lessthan the maximum amount has beenreached, further drawback on monthlyclaims may be suspended until astrengthening or superseding bond in asufficient amount has been furnished.For provisions relating to bonding re-quirements, subpart E of part 17 of thischapter is incorporated in this part,but references therein to a regional di-rector (compliance) shall apply, forpurposes of this part, to the Chief,Puerto Rico Operations.

(b) Approval required. No personbringing eligible articles into the Unit-ed States from the Virgin Islands mayfile monthly claims for drawbackunder the provisions of this subpartuntil bond on Form 5154.3 has been ap-proved by the Chief, Puerto Rico Oper-ations. Bonds approved by a regionaldirector (compliance) prior to the ef-fective date of this provision shall re-main in effect.

[T.D. ATF–379, 61 FR 31427, June 20, 1996]

§ 250.309 Claims for drawback.(a) General. Persons bringing eligible

articles into the United States fromthe Virgin Islands shall file claim fordrawback on Form 2635 (5620.8) with theChief, Puerto Rico Operations. Uponfinding that the claimant has satisfiedthe requirements of this subpart, theregional director (compliance) shallallow the drawback of taxes at a rateof $1 less than the lesser of $10.50 aproof gallon or the rate specified in 26U.S.C. 5001(a).

(b) Information on claims. The claimmust set forth the following:

(1) That the special tax has beenpaid;

(2) That the eligible articles broughtinto the United States on which draw-back is claimed are fully taxpaid ortax-determined;

(3) That the eligible articles on whichdrawback is claimed are nonbeverageproducts; and

(4) That the eligible articles weremanufactured in the Virgin Islands incompliance with approved formulas inaccordance with § 250.221.

(c) Supporting data. Each claim shallbe accompanied by supporting data asspecified in this paragraph. ATF Form


73


5154.2, Supporting Data for Nonbev-erage Drawback Claims, may be used,or the claimant may use any suitableformat that provides the following in-formation:

(1) The control number of the SpecialTax Stamp and the tax year for whichissued;

(2) A description of each eligible arti-cle as follows:

(i) Name and type of each product;(ii) Name and address of the manu-

facturer of each product;(iii) Formula number under which

each product was manufactured;(iv) Alcohol content of each product;(v) Quantity of each product;(vi) Proof gallons of distilled spirits

contained in each product;(vii) Date of entry of the eligible

product into the United States; and(viii) Evidence of taxpayment of dis-

tilled spirits in accordance with§ 250.266.

(d) Date of filing claim. Quarterlyclaims for drawback shall be filed withthe Chief, Puerto Rico Operations,within the 6 months next succeedingthe quarter in which the eligible prod-ucts covered by the claim were broughtinto the United States. Monthly claimsfor drawback may be filed at any timeafter the end of the month in which theeligible products covered by the claimwere brought into the United States,but must be filed not later than theclose of the sixth month succeeding thequarter in which the eligible productswere brought into the United States.



§ 250.310 Records.(a) General. Every person intending

to file claim for drawback on eligiblearticles brought into the United Statesfrom the Virgin Islands shall keep per-manent records of the data elementsrequired by this section. Such recordsshall be maintained at the businesspremises for which the claim is filedand shall be available for inspection byany ATF officer during business hours.

(b) Details of records. Each person in-tending to claim drawback on eligible

articles brought into the United Statesshall maintain permanent recordsshowing the following data:

(1) The name, description, quantity,and formula number of each such arti-cle.

(2) The alcohol content of each sucharticle.

(3) Name and address of the manufac-turer and shipper, and date of entryinto the United States.

(4) Evidence of taxpayment of dis-tilled spirits in accordance with para-graph (e) of this section.

(c) Form of record. No particular formof record is prescribed, but the data re-quired to be shown shall be readily as-certainable from the records kept bythe drawback claimant.

(d) Evidence of taxpayment of distilledspirits. Evidence of taxpayment of eligi-ble articles (such as Customs Forms7501 and 7505 receipted to indicate pay-ment of tax) shall be maintained asevidence of taxpayment to support in-formation required to be furnished inthe supporting data filed with a claim.

(e) Retention of records. Each draw-back claimant shall retain for a periodof not less than three years all recordsrequired by this subpart, all commer-cial invoices or shipping documents,and all bills of lading received evidenc-ing receipt and tax determination ofthe spirits. In addition, a copy of eachapproved formula returned to the man-ufacturer of eligible articles shall beretained for not less than three yearsfrom the date he files his last claim fordrawback under the formula. Therecords, forms, and formulas shall bereadily available during regular busi-ness hours for examination by ATF of-ficers.


Subpart P—Requirements forLiquor Bottles

AUTHORITY: Sec. 5301, 72 Stat. 1374; 26U.S.C. 5301.

SOURCE: T.D. 6954, 33 FR 6818, May 4, 1968,unless otherwise noted. Redesignated at 40FR 16835, Apr. 15, 1975.

§ 250.311 Scope of subpart.The provisions of this subpart shall

apply only to liquor bottles having a


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27 CFR Ch. I (4-1-97 Edition)§ 250.312

capacity of 200 ml. or more exceptwhere expressly applied to liquor bot-tles of less than 200 ml. capacity.

[T.D. 6954, 33 FR 6818, May 4, 1968. Redesig-nated at 40 FR 16835, Apr. 15, 1975, andamended by T.D. ATF–34, 41 FR 46864, Oct.26, 1976]

§ 250.312 Standards of fill.Distilled spirits brought into the

United States from Puerto Rico or theVirgin Islands in containers of 1 gallon(3.785 liters) or less for sale shall be inliquor bottles, including liquor bottlesof less than 200 ml capacity, which con-form to the applicable standards of fillprovided in § 5.47 or § 5.47a of this chap-ter. Empty liquor bottles, includingliquor bottles of less than 200 ml capac-ity, which conform to the provisions ofsubpart E of part 5 or part 19 of thischapter, may be brought into the Unit-ed States for packaging distilled spiritsas provided in part 19 of this chapter.

[T.D. ATF–34, 41 FR 46864, Oct. 26, 1976, asamended by T.D. ATF–62, 44 FR 71718, Dec.11, 1979]

§ 250.314 Distinctive liquor bottles.(a) Application. Liquor bottles of dis-

tinctive shape or design, including bot-tles of less than 200 ml. capacity, maybe brought into the United States fromPuerto Rico or the Virgin Islands by animporter (filled bottles) or a bottler(empty bottles). For filled bottles, theimporter shall submit ATF Form5100.31 to the Director for approvalprior to bringing such bottles into theUnited States. For empty bottles, thebottler shall obtain approval from theDirector on ATF Form 5100.31 prior tousing the bottles. The importer orbottler, as applicable, shall certify asto the total capacity of a representa-tive sample bottle before closure (ex-pressed in milliliters) on each copy ofthe form. In addition, the applicantshall affix a readily legible photograph(both front and back of the bottle) tothe front of each copy of ATF Form5100.31, along with the label(s) to beused on the bottle. The applicant shallnot submit an actual bottle or an au-thentic model unless specifically re-quested to do so.

(b) Approval. Properly submitted ATFForms 5100.31 to bring distinctive liq-uor bottles (filled) into the United

States from Puerto Rico or the VirginIslands, or, properly submitted ATFForms 5100.31 to use distinctive liquorbottles (empty) which have beenbrought into the United States fromPuerto Rico or the Virgin Islands, shallbe approved provided such bottles arefound by the Director to—

(1) Meet the requirements of 27 CFRPart 5;

(2) Be distinctive;(3) Be suitable for their intended pur-

pose;(4) Not jeopardize the revenue; and(5) Not be deceptive to the consumer.

The applicant shall keep a copy of theapproved ATF Form 5100.31, includingan approved photograph (both frontand back) of the distinctive liquor bot-tle, on file at his premises. If ATFForm 5100.31 is disapproved, the appli-cant shall be notified of the Director’sdecision and the reasons therefor. Theapplicant importer is responsible forfurnishing a copy of the approved ATFForm 5100.31, including a photograph ofthe distinctive liquor bottle, to Cus-toms officials at each affected port ofentry where the merchandise is exam-ined.

(Sec. 201, Pub. L. 85–859, 72 Stat. 1374, asamended (26 U.S.C. 5301))

[T.D. ATF–114, 47 FR 43950, Oct. 5, 1982, asamended by T.D. ATF–242, 51 FR 39526, Oct.29, 1986]

§ 250.315 [Reserved]

§ 250.316 Bottles not constituting ap-proved containers.

The Director is authorized to dis-approve any bottle, including a bottleof less than 200 ml. capacity, for use asa liquor bottle which he determines tobe deceptive. The Customs officer atthe port of entry shall deny entry ofany such bottle containing distilledspirits upon advice from the Directorthat such bottle is not and approvedcontainer for distilled spirits for con-sumption in the United States.

(Sec. 201, Pub. L. 85–859, 72 Stat. 1374, asamended (26 U.S.C. 5301))

[T.D. ATF–114, 47 FR 43950, Oct. 5, 1982]


75


§ 250.317 Bottles to be used for displaypurposes.

Empty liquor bottles may be broughtinto the United States and may be fur-nished to liquor dealers for display pur-poses, provided each bottle is markedto show that it is to be used for suchpurpose. Any paper strip used to sealthe bottle shall be of solid color andwithout design or printing, except thata border or a design, formed entirely ofthe legend ‘‘not genuine—for displaypurposes only’’ is permissible. Recordsshall be kept of the receipt and disposi-tion of such bottles, showing the namesand addresses of consignees, dates ofshipment, and size, quantity, and de-scription of bottles.

§ 250.318 Liquor bottles denied entry.

Filled liquor bottles not conformingto the provisions of this subpart shallbe denied entry into the United States:Provided, That, upon letterhead appli-cation, in triplicate, the regional direc-tor (compliance) of the region in whichthe port of entry is situated may, innonrecurring cases, authorize the re-lease from customs custody of distilledspirits in bottles, except those comingunder the provisions of § 250.316, which,through unintentional error, do notconform to the provisions of this sub-part, if he finds that such release willnot afford jeopardy to the revenue.

§ 250.319 Used liquor bottles.

The Director may pursuant to letter-head application filed in triplicate, au-thorize an importer to receive liquorbottles assembled for him as providedin § 194.263 of this chapter. Used liquorbottles so received may be stored atany suitable location pending return toPuerto Rico or the Virgin Islands.Records shall be kept of the receipt anddisposition of such bottles.

[T.D. 6954, 33 FR 6818, May 4, 1968, as amend-ed by T.D. 7006, 34 FR 2250, Feb, 15, 1969. Re-designated at 40 FR 16835, Apr. 15, 1975]

Subpart Q—MiscellaneousProvisions

§ 250.331 Alternate methods or proce-dures.

(a) Application. A person bringing liq-uors into the United States from Puer-to Rico or the Virgin Islands who de-sires to use an alternate method orprocedure in lieu of a method or proce-dure prescribed by this part shall fileapplication, in triplicate, with the re-gional director (compliance) of the re-gion in which his place of business islocated. If such person has severalplaces of business at which he desiresto use such alternate method or proce-dure, a separate application shall besubmitted for each. Each applicationshall:

(1) Specify the name, address, andpermit number of the person to whichit relates;

(2) State the purpose for which filed;and

(3) Specifically describe the alternatemethod or procedure and set forth thereasons therefor.

No alternate method or procedure re-lating to the assessment, payment, orcollection of tax shall be authorizedunder this paragraph.

(b) Approval. When an application foruse of an alternate method or proce-dure is received, the regional director(compliance) shall determine whetherthe approval thereof would undulyhinder the effective administration ofthis part or would result in jeopardy tothe revenue. The regional director(compliance) shall forward two copiesof the application to the Director, to-gether with a report of his findings andhis recommendation. The Director,may approve the alternate method orprocedure if he finds that:

(1) Good cause has been shown for theuse of the alternate method or proce-dure;

(2) The alternate method or proce-dure is within the purpose of, and con-sistent with the effect intended by, the


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27 CFR Ch. I (4-1-97 Edition)Pt. 251

specifically prescribed method or pro-cedure, and affords equivalent securityto the revenue; and

(3) The alternate method or proce-dure will not be contrary to any provi-sion of law, and will not result in anyincrease in cost to the Government orhinder the effective administration ofthis part.

No alternate method or procedure shallbe used until approval has been re-ceived from the Director. Authoriza-tion for the alternate method or proce-dure may be withdrawn whenever inthe judgment of the Director, the reve-nue is jeopardized or the effective ad-ministration of this part is hindered bythe continuation of such authorization.



PART 251—IMPORTATION OFDISTILLED SPIRITS, WINES, AND BEER


Sec.251.1 Imported distilled spirits, wines, and

beer.251.2 Forms prescribed.


251.11 Meaning of terms.

Subpart C—Special (Occupational) Taxes

251.30 Special (occupational) tax.251.31 Warehouse receipts covering distilled

spirits.

Subpart D—Tax on Imported Distilled Spir-its, Wines, Beer, and Imported Per-fumes Containing Distilled Spirits

DISTILLED SPIRITS AND PERFUMES

251.40 Distilled spirits.251.40a Computation of effective tax rate.251.41 Perfumes containing distilled spirits.

WINES

251.42 Wines.251.42a Still wines containing carbon diox-

ide.

LIQUEURS, CORDIALS, AND OTHER COMPOUNDS

AND PREPARATIONS

251.43 Liqueurs, cordials, and similar com-pounds.

251.44 Other compounds and preparations.

BEER

251.45 Rate of tax.251.46 Computation of tax.

COLLECTION OF INTERNAL REVENUE TAXES

251.48 Imported distilled spirits, wines, andbeer.

251.48a Payment of tax by electronic fundtransfer.

EXEMPTION OF CERTAIN SAMPLES FROM

INTERNAL REVENUE TAXES

251.49 Commercial samples of alcoholic bev-erages.

Subpart E—General Requirements

PERMIT FOR IMPORTATION OF DISTILLED

SPIRITS, WINES AND BEER

251.55 Federal Alcohol Administration Actpermit.

PACKAGING AND MARKING OF DISTILLED

SPIRITS

251.56 Distilled spirits containers of a ca-pacity of not more than 1 gallon.

251.57 Containers in excess of 1 gallon.

LABELING OF DISTILLED SPIRITS

251.58 Containers of 1 gallon (3.785 liters) orless.

MARKING AND LABELING OF WINES AND BEER

251.59 Wines.251.60 Beer.

CLOSURES FOR CONTAINERS OF DISTILLED

SPIRITS



EXEMPTIONS

251.74 Exemption from requirements per-taining to marks, bottles, and labels.

251.75 Samples of distilled spirits, wine, andbeer for quality control purposes.

WINE AND FLAVORS CONTENT OF DISTILLED

SPIRITS

251.76 Approval and certification of wineand flavors content.

251.77 Standard effective tax rate.


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27 CFR -250 - 1997

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