Changes to Certain Alcohol-Related Regulations Governing Bond Requirements and Tax Return Filing Periods, 780-787 [2016-31415]

Agencies

• Alcohol and Tobacco Tax and Trade Bureau
• DEPARTMENT OF THE TREASURY

[Federal Register Volume 82, Number 2 (Wednesday, January 4, 2017)]
[Proposed Rules]
[Pages 780-787]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-31415]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Parts 18, 19, 24, 25, 26, 27, 28, and 30

[Docket No. TTB-2016-0013; Notice No. 167; Re: T.D. TTB-146]
RIN 1513-AC30


Changes to Certain Alcohol-Related Regulations Governing Bond 
Requirements and Tax Return Filing Periods

AGENCY: Alcohol and Tobacco Tax and Trade Bureau, Treasury.

ACTION: Notice of proposed rulemaking; cross-reference to temporary 
rule.

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[[Page 781]]

SUMMARY: In a temporary rule published elsewhere in this issue of the 
Federal Register, the Alcohol and Tobacco Tax and Trade Bureau (TTB) is 
amending its regulations relating to excise taxes imposed on distilled 
spirits, wines, and beer to implement certain changes made to the 
Internal Revenue Code of 1986 (IRC) by the Protecting Americans from 
Tax Hikes Act of 2015 (PATH Act). The temporary rule implements section 
332 of the PATH Act, which amends the IRC to remove bond requirements 
and change tax return due dates for certain eligible excise taxpayers. 
In this document, TTB proposes to adopt the regulations in the 
temporary rule as a permanent regulatory change. The text of the 
regulations in the temporary rule serves as the text of the proposed 
regulations. This document also proposes to amend the regulations 
governing the submission of reports by certain eligible excise 
taxpayers. In this document, TTB is soliciting comments on the 
amendments adopted in the temporary rule and the amendments proposed in 
this notice of proposed rulemaking.

DATES: Comments must be received on or before March 6, 2017.

ADDRESSES: Please send your comments on this proposal to one of the 
following addresses. Comments submitted by other methods, including 
email, will not be accepted.
     Internet: https://www.regulations.gov (via the online 
comment form for this document as posted within Docket No. TTB-2016-
0013 at ``Regulations.gov,'' the Federal e-rulemaking portal);
     U.S. Mail: Director, Regulations and Rulings Division, 
Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW., Box 12, 
Washington, DC 20005; or
     Hand delivery/courier in lieu of mail: Alcohol and Tobacco 
Tax and Trade Bureau, 1310 G Street NW., Suite 400, Washington, DC 
20005. See the Public Participation section of this document for 
specific instructions and requirements for submitting comments, and for 
information on how to request a public hearing.
    You may view copies of this document, the temporary rule, selected 
supporting materials, and any comments TTB receives about this proposal 
at https://www.regulations.gov within Docket No. TTB-2016-0013. A 
direct link to this docket is posted on the TTB Web site at https://www.ttb.gov/regulations_laws/all_rulemaking.shtml under Notice No. 167. 
You also may view copies of this document, the temporary rule, all 
related supporting materials, and any comments TTB receives about this 
proposal by appointment at the TTB Information Resource Center, 1310 G 
Street NW., Washington, DC 20005. Please call 202-453-2270 to make an 
appointment.

FOR FURTHER INFORMATION CONTACT: For questions concerning this 
document, contact Ben Birkhill, Regulations and Rulings Division, 
Alcohol and Tobacco Tax and Trade Bureau (202-453-2265).

SUPPLEMENTARY INFORMATION: 

Background

TTB Authority

    The Alcohol and Tobacco Tax and Trade Bureau (TTB) administers 
provisions in chapter 51 of the Internal Revenue Code of 1986, as 
amended (IRC), pertaining to the taxation of distilled spirits, wines, 
and beer (see title 26 of the United States Code (U.S.C.), chapter 51 
(26 U.S.C. chapter 51)). TTB also regulates distilled spirits, wines, 
and malt beverages pursuant to the Federal Alcohol Administration Act 
(FAA Act). TTB administers the provisions of the IRC and FAA Act, and 
their implementing regulations, pursuant to section 1111(d) of the 
Homeland Security Act of 2002, codified at 6 U.S.C. 531(d). The 
Secretary has delegated various authorities through Treasury Department 
Order 120-01, dated December 10, 2013 (superseding Treasury Department 
Order 120-01, dated January 24, 2003), to the TTB Administrator to 
perform the functions and duties in administration and enforcement of 
these laws.
    Sections 5001, 5041, and 5051 of the IRC (26 U.S.C. 5001, 5041, and 
5051) impose tax on distilled spirits, wines, and beer produced in or 
imported into the United States. Generally, taxes are determined (i.e., 
become due for payment) when they are removed from qualified facilities 
in the United States or imported as provided in sections 5006, 5043, 
and 5054 of the IRC (26 U.S.C. 5006, 5043, and 5054). Section 5061 of 
the IRC (26 U.S.C. 5061) governs the collection of tax due on distilled 
spirits, wines, and beer, including the time periods and due dates for 
paying such taxes by return. Under some circumstances, the IRC 
authorizes the removal of distilled spirits, wines, and beer from 
facilities in the United States without paying the excise taxes imposed 
on such products. For example, the IRC does not require payment of tax 
for certain transfers between qualified facilities in the United States 
as provided in sections 5212, 5362(b), and 5414 of the IRC (26 U.S.C. 
5212, 5362(b), and 5414).

The PATH Act and the Temporary Rule

    On December 18, 2015, the President signed into law the 
Consolidated Appropriations Act, 2016 (Public Law 114-113). Division Q 
of this Act is titled the Protecting Americans from Tax Hikes Act of 
2015 (PATH Act). Section 332 of the PATH Act amends the IRC to change 
tax return due dates and remove bond requirements for certain eligible 
taxpayers who pay excise taxes on distilled spirits, wines, and beer.
    With respect to tax return due dates, section 332 amends section 
5061(d) of the IRC to authorize a new annual return period for deferred 
payment of excise tax, in addition to the preexisting quarterly and 
semimonthly deferred payment periods authorized under that section. 
Deferred payment of tax refers to payment using one of these three 
return periods prescribed under the IRC rather than payment immediately 
each time the tax becomes due. As described above, taxes on distilled 
spirits, wines, and beer generally become due when the products are 
removed from qualified facilities in the United States or imported into 
the United States. To be eligible to use the annual or quarterly return 
periods, the taxpayer must reasonably expect to be liable for not more 
than $1,000 in excise taxes, in the case of annual returns, or $50,000 
in excise taxes, in the case of quarterly returns, for the calendar 
year and must have been liable for not more than these respective 
quantities in the preceding calendar year. Since these $1,000 and 
$50,000 ceilings are based on liability for payment of taxes by return 
under section 5061 of the IRC, they do not include liability for taxes 
imposed but not necessarily due, such as liability associated with 
taxes imposed on distilled spirits, wines, and beer produced in or 
imported into the United States that have not been removed from 
qualified facilities on payment or determination of tax.
    Section 332 of the PATH Act also amends several provisions of the 
IRC to remove bond requirements for certain taxpayers who are eligible 
to pay taxes on distilled spirits, wines, and beer using quarterly or 
annual return periods and who pay taxes on a deferred basis. Under 
section 332, these taxpayers are exempt from bond requirements with 
respect to distilled spirits and wine only to the extent those products 
are for nonindustrial use. The amended provisions relating to this bond 
exemption are sections 5173, 5351, 5401, and 5551 of the IRC.
    In a temporary rule published elsewhere in this issue of the 
Federal Register, TTB is amending the

[[Page 782]]

regulations in chapter I of title 27 of the Code of Federal Regulations 
(27 CFR) to implement section 332 of the PATH Act and to make several 
technical amendments to update certain bond-related provisions. The 
temporary rule amends regulations in 27 CFR parts 18, 19, 24, 25, 26, 
27, 28, and 30. These amendments include incorporating the new annual 
return period into the regulations, clarifying the circumstances under 
which taxpayers are eligible for the bond exemption, and adding new 
provisions governing qualification and loss of eligibility for the bond 
exemption. The preamble of the temporary rule explains the proposed 
regulations in more detail, and this notice solicits comments on the 
amendments adopted in the temporary rule. The text of the regulations 
in the temporary rule serves as the text of the proposed regulations 
for purposes of this document.

Proposed Amendments to Reporting Requirements

    In this document, TTB is also proposing to amend the regulations 
governing reporting requirements for distilled spirits plants (DSPs) 
and brewers in order to reduce unnecessary regulatory burden on some 
industry members who pay taxes using annual or quarterly return 
periods. TTB is also soliciting comments on whether to amend current 
reporting requirements for bonded wine cellars (including bonded 
wineries). These reporting provisions help protect the revenue by 
requiring regulated parties to submit information to TTB relating to 
their operations that are subject to regulation under the IRC. This 
section discusses current reporting requirements for these industry 
members and the proposed regulatory amendments.

Current Reporting Requirements

    The regulations in 27 CFR parts 19, 24, and 25 govern the 
operations of DSPs, bonded wine cellars, and breweries in the United 
States. Under 27 CFR 19.632, DSP proprietors must submit to TTB certain 
monthly reports of operations. These reports are TTB Form 5110.40 
(Monthly Report of Production Operations), TTB Form 5110.11 (Monthly 
Report of Storage Operations), TTB Form 5110.28 (Monthly Report of 
Processing Operations), and TTB Form 5110.43 (Monthly Report of 
Processing (Denaturing) Operations). Under the current regulations, 
DSPs may not file required reports less frequently than monthly.
    Under 27 CFR 24.300(g), bonded wine cellars must generally file 
reports on a monthly basis using TTB Form 5120.17 (Report of Wine 
Premises Operations), but they may file reports quarterly or annually 
if they meet the criteria to do so. To be eligible to file reports on a 
quarterly basis, the proprietor must be filing quarterly tax returns, 
and the proprietor must not expect the sum of the bulk and bottled wine 
to be accounted for in all tax classes to exceed 60,000 gallons for any 
one quarter during the calendar year when adding up certain wine on the 
proprietor's premises. The wine that must be taken into account for 
this purpose is wine on hand at the beginning of the month, bulk wine 
produced by fermentation, sweetening, blending, amelioration or 
addition of wine spirits, bulk wine bottled, bulk and bottled wine 
received in bond, taxpaid wine returned to bond, bottled wine dumped to 
bulk, inventory gains, and any activity written in the untitled lines 
of the report which increases the amount of wine to be accounted for. 
The wines that must be taken into account for this purpose are wines on 
which taxes are imposed but not necessarily due, since the wines are 
not reported as withdrawn on payment or determination of tax. To be 
eligible to file reports on an annual basis, the proprietor must be 
filing annual tax returns, and the proprietor must not expect the sum 
of the bulk and bottled wine to be accounted for in all tax classes to 
exceed 20,000 gallons for any one month during the calendar year when 
adding up certain wine on the proprietor's premises. The wine that must 
be taken into account for this purpose is the same as the wine that 
must be taken into account for purposes of determining eligibility for 
quarterly reporting.
    Under 27 CFR 25.297, each brewer must file a monthly report using 
TTB Form 5130.9 (Brewer's Report of Operations), unless the brewer is 
required to file reports on a quarterly basis. A brewer must file 
quarterly reports using TTB Form 5130.26 (Quarterly Brewer's Report of 
Operations) or TTB Form 5130.9 if the brewer was liable for not more 
than $50,000 in taxes with respect to beer in the preceding calendar 
year and reasonably expects to be liable for not more than $50,000 in 
such taxes during the current calendar year. As referenced above, a 
brewer who meets these $50,000 ceilings is eligible to pay taxes 
quarterly under section 5061 of the IRC. Since these $50,000 ceilings 
are based on liability for payment of taxes by return under section 
5061 of the IRC, they do not include liability for taxes imposed but 
not necessarily due.

Proposed Amendments and Solicitation of Comments

    TTB is proposing to amend the reporting regulations applicable to 
DSPs and brewers, and TTB is soliciting comments on whether to amend 
the reporting regulations for bonded wine cellars. TTB proposes to 
amend the regulations to authorize new quarterly and annual reporting 
periods for certain DSPs, to authorize a new annual reporting period 
for certain brewers, and to change the existing quarterly reporting 
requirements for brewers. As discussed further below, the proposed 
criteria for quarterly and annual reporting by DSPs and brewers are 
modeled in part on the current criteria for quarterly and annual 
reporting by bonded wine cellars, with some modifications. TTB is 
soliciting comment on whether these modified criteria should be adopted 
for DSPs and brewers. TTB is also requesting comment on whether it 
should instead adopt criteria for quarterly and annual reporting by 
DSPs and brewers that resemble the requirements used for such reporting 
by bonded wine cellars (i.e., by taking into account the sum of certain 
products listed on specific lines of proprietors' reports). In 
addition, TTB is soliciting comment on whether it should amend the 
current requirements for quarterly and annual reporting by bonded wine 
cellars so that the requirements are consistent with the proposed 
modified criteria for quarterly and annual reporting by DSPs and 
brewers.
    Under the proposed amendments to Sec. Sec.  19.632 and 25.297, DSPs 
and brewers must report monthly unless they are required to report 
quarterly or annually. Under the proposed amendments, DSPs and brewers 
must report quarterly for a calendar year if they file quarterly tax 
returns for that calendar year and if their liability for taxes on 
alcohol for which taxes have not been paid does not exceed $50,000 at 
any time during that calendar year. For purposes of the latter 
criterion, liability for taxes that have not been paid includes 
liability for taxes determined but not yet paid and liability for taxes 
imposed but not necessarily due for payment. Under the proposed 
amendments, DSPs and brewers must report annually if they file annual 
tax returns and if their liability for taxes on alcohol for which taxes 
have not been paid does not exceed $50,000 at any time during the 
calendar year. The purpose of these eligibility criteria is to reduce 
reporting burdens on taxpayers whose tax payments do not exceed the 
ceilings described above for paying taxes quarterly or annually and

[[Page 783]]

whose liability for taxes that have not been paid does not exceed 
$50,000. As discussed below, both types of liability are relevant for 
determining required reporting frequency for revenue protection 
purposes.
    The proposed criteria for quarterly and annual reporting in amended 
Sec. Sec.  19.632 and 25.297 are modeled in part on the current 
criteria for quarterly and annual reporting by bonded wine cellars, 
which are based on both the frequency with which the proprietor pays 
taxes by return and the proprietor's liability for alcohol on which 
taxes have not been paid. Both factors are relevant for determining 
required reporting frequency because they relate to the proprietor's 
overall tax liability under the IRC. Generally, more frequent reporting 
is necessary for a proprietor who has greater tax liability because TTB 
needs more detailed information regarding the proprietor's operations 
for revenue protection purposes. More frequent reporting is necessary 
for proprietors who use more frequent return periods for paying tax 
because such proprietors generally have greater liability for taxes due 
for payment. In addition, since a proprietor's liability for taxes 
imposed but not necessarily due also raises revenue risks, this type of 
tax liability must also be taken into account for determining 
appropriate reporting frequency.
    With respect to return periods, TTB believes it is appropriate to 
require that DSPs and brewers pay taxes on an annual or quarterly basis 
to be eligible to report on an annual or quarterly basis, respectively. 
This requirement under proposed Sec. Sec.  19.632 and 25.297 is 
consistent with current reporting requirements for bonded wine cellars 
under Sec.  24.300(g). With respect to liability for taxes imposed but 
not necessarily due, TTB has determined that the proposed $50,000 
maximum discussed above for DSPs and brewers reporting quarterly and 
annually is necessary for revenue protection purposes. The $50,000 
limit ensures that DSPs and brewers reporting quarterly or annually who 
pay excise taxes using quarterly or annual return periods do not engage 
in operations that involve significant tax liability for which the IRC 
does not require payment of tax, such as certain transfers of alcohol 
between qualified facilities in the United States (see sections 5212, 
5362(b), and 5414 of the IRC). Since DSPs and brewers who report 
quarterly or annually meet the tax payment ceilings for the use of 
quarterly or annual return periods, TTB has determined that this 
$50,000 limit on taxes imposed but not necessarily due is appropriate 
for both quarterly and annual reporters. Quarterly and annual reporters 
will be subject to different tax payment ceilings based on the tax 
return period they use, and the $50,000 limit is simply intended to 
ensure that neither category of reporters engages in operations that 
involve significant tax liability for which the IRC does not require 
payment of tax.
    The $50,000 maximum for DSPs and brewers under proposed Sec. Sec.  
19.632 and 25.297 is different from current quarterly and annual 
reporting requirements for bonded wine cellars. Under Sec.  24.300(g), 
bonded wine cellars must not expect the sum of the bulk and bottled 
wine to be accounted for in all tax classes to exceed 60,000 gallons 
for any one quarter (in the case of quarterly reporting) or 20,000 
gallons for any one month (in the case of annual reporting) when adding 
up certain wine on the proprietor's premises as described above. 
Because section 5041 of the IRC imposes several different tax rates on 
wine, the tax liability associated with these quantities may or may not 
exceed $50,000, depending on the circumstances. TTB is soliciting 
comment on whether there are wine-specific reasons for retaining the 
60,000-gallon and 20,000-gallon limits in the regulations and whether 
it would instead be appropriate for consistency purposes to amend Sec.  
24.300(g) to incorporate the same $50,000 maximum that TTB is proposing 
for DSPs and brewers under Sec. Sec.  19.632 and 25.297.
    Finally, TTB is also requesting comment on whether it should amend 
Sec.  24.300(g) to require (rather than simply allow) the use of 
quarterly and annual reporting periods for bonded wine cellars who meet 
the criteria to use them. Under the current regulations, such 
proprietors may choose to submit reports monthly even though they are 
eligible to report less frequently. TTB believes that requiring less 
frequent reporting for eligible proprietors would reduce reporting 
burdens on proprietors and would reduce report processing burdens on 
TTB. TTB is therefore soliciting comment on whether there are wine-
specific reasons for continuing to allow the voluntary use of quarterly 
or annual reporting periods for bonded wine cellars that are eligible 
to use them.

Public Participation

Comments Sought

    TTB requests comments from interested members of the public on the 
regulations adopted in the temporary rule and the additional regulatory 
amendments proposed in this document. In addition, TTB is requesting 
comments whether it should amend the current requirements for quarterly 
and annual reporting by bonded wine cellars so that the requirements 
are consistent with the criteria proposed in this document for 
quarterly and annual reporting by DSPs and brewers.

Submitting Comments

    You may submit comments on this proposal by one of the following 
three methods:
     Federal e-Rulemaking Portal: You may electronically submit 
comments via the online comment form posted with this proposed rule 
within Docket No. TTB-2016-0013 on ``Regulations.gov,'' the Federal e-
rulemaking portal. A direct link to that docket is available on the TTB 
Web site at https://www.ttb.gov/spirits/spirits-rulemaking.shtml. 
Supplemental files may be attached to comments submitted via 
Regulations.gov. For information on how to use Regulations.gov, visit 
the site and click on the ``Help'' tab.
     Mail: You may send comments via postal mail to the 
Director, Regulations and Rulings Division, Alcohol and Tobacco Tax and 
Trade Bureau, 1310 G Street NW., Box 12, Washington, DC 20005.
     Hand Delivery/Courier: You may hand-carry your comments or 
have them hand-carried to the Alcohol and Tobacco Tax and Trade Bureau, 
1310 G Street NW., Suite 400, Washington, DC 20005.
    Please submit your comments by the closing date shown above in this 
proposed rule. Your comments must reference Notice No. 167 and include 
your name and mailing address. Your comments also must be made in 
English, be legible, and be written in language acceptable for public 
disclosure. TTB does not acknowledge receipt of comments and considers 
all comments as originals.
    In your comment, please clearly state if you are commenting for 
yourself or on behalf of an association, business, or other entity. If 
you are commenting on behalf of an entity, your comment must include 
the entity's name as well as your name and position title. In your 
comment via Regulations.gov, please enter the entity's name in the 
``Organization'' blank of the online comment form. If you comment via 
postal mail or hand delivery/courier, please submit your entity's 
comment on letterhead.
    You may also write to the Administrator before the comment closing 
date to ask for a public hearing. The Administrator reserves the right 
to

[[Page 784]]

determine whether to hold a public hearing.

Confidentiality

    All submitted comments and attachments are part of the public 
record and subject to disclosure. Do not enclose any material in your 
comments that you consider to be confidential or inappropriate for 
public disclosure.

Public Disclosure

    TTB will post, and you may view, copies of this proposed rule, the 
temporary rule, and any online or mailed comments received about this 
proposal within Docket No. TTB-2016-0013 on the Federal e-rulemaking 
portal. A direct link to that docket is available on the TTB Web site 
at https://www.ttb.gov/regulations_laws/all_rulemaking.shtml under 
Notice No. 167. You may also reach the relevant docket through the 
Regulations.gov search page at https://www.regulations.gov. For 
information on how to use Regulations.gov, click on the site's ``Help'' 
tab.
    All posted comments will display the commenter's name, organization 
(if any), city, and State, and, in the case of mailed comments, all 
address information, including email addresses. TTB may omit voluminous 
attachments or material that it considers unsuitable for posting.
    You may view copies of this proposed rule, the temporary rule, and 
any electronic or mailed comments TTB receives about this proposal by 
appointment at the TTB Information Resource Center, 1310 G Street NW., 
Washington, DC 20005. You may also obtain copies for 20 cents per 8.5- 
x 11-inch page. Contact TTB's information specialist at the above 
address or by telephone at 202-453-2270 to schedule an appointment or 
to request copies of comments or other materials.

Regulatory Flexibility Act

    TTB certifies that this proposed regulation, if adopted, will not 
have a significant economic impact on a substantial number of small 
entities. The proposed amendments would reduce reporting requirements 
for certain proprietors described in this document. The proposed rule, 
if adopted, will not impose, or otherwise cause, a significant increase 
in reporting, recordkeeping, or other compliance burdens on a 
substantial number of small entities. Accordingly, a regulatory 
flexibility analysis is not required. Pursuant to 26 U.S.C. 7805(f), 
TTB will submit the proposed regulations to the Chief Counsel for 
Advocacy of the Small Business Administration for comment on the impact 
of the proposed regulations on small businesses.

Executive Order 12866

    Certain TTB regulations issued under the IRC, including this one, 
are exempt from the requirements of Executive Order 12866, as 
supplemented and reaffirmed by Executive Order 13563. Therefore, a 
regulatory impact assessment is not required.

Paperwork Reduction Act

    The six collections of information associated with the proposed 
regulatory requirements discussed in this notice of proposed rulemaking 
(including the regulatory requirements relating to wine reporting on 
which TTB is seeking comment) have been previously reviewed and 
approved by the Office of Management and Budget (OMB) in accordance 
with the Paperwork Reduction Act of 1995 (44 U.S.C. 3507(d)) and 
assigned control numbers 1513-0007, 1513-0039, 1513-0041, 1513-0047, 
1513-0049, and 1513-0053. An agency may not conduct or sponsor, and a 
person is not required to respond to, a collection of information 
unless it displays a valid control number assigned by OMB.
    The proposed regulatory text in 27 CFR 19.632 contains alterations 
to the information collections currently approved under OMB control 
numbers 1513-0039, 1513-0041, 1513-0047, and 1513-0049. These control 
numbers cover, respectively, TTB Forms 5110.11, 5110.28, 5110.40, and 
5110.43. If adopted, these revisions would provide for less frequent 
reporting by certain DSPs. Under the current regulations, DSPs must 
submit required reports on a monthly basis. Under the proposed 
regulatory amendments, a DSP would report quarterly if they file 
quarterly tax returns and would report annually if they file annual tax 
returns as long as, in either case, the DSP's liability for taxes on 
distilled spirits for which taxes have not been paid does not exceed 
$50,000 at any time during the calendar year. Taking into account the 
proposed regulatory amendments, TTB estimates the burden associated 
with these information collections as follows:

1513-0039

     Estimated number of respondents: 684 reporting monthly; 
651 reporting quarterly; 424 reporting annually.
     Estimated annual frequency of responses: 12 for monthly 
reporting; 4 for quarterly reporting; 1 for annual reporting.
     Estimated average annual total burden hours: 11,236.

1513-0041

     Estimated number of respondents: 634 reporting monthly; 
603 reporting quarterly; 392 reporting annually.
     Estimated annual frequency of responses: 12 for monthly 
reporting; 4 for quarterly reporting; 1 for annual reporting.
     Estimated average annual total burden hours: 20,824.

1513-0047

     Estimated number of respondents: 571 reporting monthly; 
544 reporting quarterly; 354 reporting annually.
     Estimated annual frequency of responses: 12 for monthly 
reporting; 4 for quarterly reporting; 1 for annual reporting.
     Estimated average annual total burden hours: 18,764.

1513-0049

     Estimated number of respondents: 184 reporting monthly; 
175 reporting quarterly; 114 reporting annually.
     Estimated annual frequency of responses: 12 for monthly 
reporting; 4 for quarterly reporting; 1 for annual reporting.
     Estimated average annual total burden hours: 3,022.
    The proposed regulatory text in 27 CFR 25.297 contains alterations 
to the information collection currently approved under OMB control 
number 1513-0007. This control number covers TTB Forms 5130.9 and 
5130.26. If adopted, these revisions would provide for less frequent 
reporting by certain brewers who file annual tax returns and would 
continue to authorize quarterly reporting by certain brewers who file 
quarterly tax returns. In the case of a brewer who reports quarterly or 
annually, the brewer's liability for taxes on beer for which taxes have 
not been paid must not exceed $50,000 at any time during the calendar 
year. Taking into account the proposed regulatory amendments, TTB 
estimates the burden associated with this information collection as 
follows:
     Estimated number of respondents: 1,344 reporting monthly; 
2,998 reporting quarterly; 1,956 reporting annually.
     Estimated annual frequency of responses: 12 for monthly 
reporting; 4 for quarterly reporting; 1 for annual reporting.
     Estimated average annual total burden hours: 22,557.
    Finally, TTB is requesting comments on whether to amend Sec.  
24.300(g) so that the reporting requirements for bonded wine cellars on 
TTB Form 5120.17 are consistent with the proposed reporting

[[Page 785]]

requirements for DSPs and brewers. The reporting requirements in Sec.  
24.300(g) are covered under OMB control number 1513-0053. Similar to 
the proposed amendments for DSPs and brewers, the current reporting 
provisions for bonded wine cellars require that the proprietor file tax 
returns quarterly or annually to be eligible for quarterly or annual 
reporting, respectively. In addition, the proprietor must not expect 
the sum of the bulk and bottled wine to be accounted for in all tax 
classes to exceed 60,000 gallons for any one quarter (in the case of 
quarterly reporting) or 20,000 gallons for any one month (in the case 
of annual reporting) when adding up certain wine on the proprietor's 
premises. TTB is soliciting comment on whether to adopt the proposed 
$50,000 limit described above for DSPs and brewers in lieu of the 
20,000-gallon and 60,000-gallon limits in the current regulations. TTB 
does not estimate that this change, if adopted, would result in changes 
in reporting burden for proprietors. We are, however, reporting an 
increase in the number of respondents to this collection to reflect the 
current number of proprietors who file the form. TTB estimates the 
burden associated with this information collection as follows:
     Estimated number of respondents: 2,316 reporting monthly; 
4,733 reporting quarterly; 4,467 reporting annually.
     Estimated annual frequency of responses: 12 for monthly 
reporting; 4 for quarterly reporting; 1 for annual reporting.
     Estimated average annual total burden hours: 56,310.
    Revisions of these six currently approved collections have been 
submitted to OMB for review. Comments on the revisions should be sent 
to OMB at Office of Management and Budget, Attention: Desk Officer for 
the Department of the Treasury, Office of Information and Regulatory 
Affairs, Washington, DC 20503 or by email to 
OIRA_submissions@omb.eop.gov. A copy should also be sent to TTB by any 
of the methods previously described. Comments on the information 
collections should be submitted no later than March 6, 2017. Comments 
are specifically requested concerning:
     Whether the proposed revisions of the collections of 
information are necessary for the proper performance of the functions 
of the Alcohol and Tobacco Tax and Trade Bureau, including whether the 
information will have practical utility;
     The accuracy of the estimated burdens associated with the 
proposed revisions of the collections of information;
     How to enhance the quality, utility, and clarity of the 
information to be collected;
     How to minimize the burden of complying with the proposed 
revision of the collection of information, including the application of 
automated collection techniques or other forms of information 
technology; and
     Estimates of capital or start-up costs and costs of 
operation, maintenance, and purchase of services to provide 
information.

Drafting Information

    Ben Birkhill of the Regulations and Rulings Division drafted this 
document with the assistance of other Alcohol and Tobacco Tax and Trade 
Bureau personnel.

List of Subjects

27 CFR Part 18

    Alcohol and alcoholic beverages, Fruits, Reporting and 
recordkeeping requirements, Spices and flavorings.

27 CFR Part 19

    Administrative practice and procedure, Alcohol and alcoholic 
beverages, Authority delegations (Government agencies), Caribbean Basin 
initiative, Chemicals, Claims, Customs duties and inspection, 
Electronic funds transfers, Excise taxes, Exports, Gasohol, Imports, 
Labeling, Liquors, Packaging and containers, Puerto Rico, Reporting and 
recordkeeping requirements, Research, Security measures, Spices and 
flavorings, Stills, Surety bonds, Transportation, Vinegar, Virgin 
Islands, Warehouses, Wine.

27 CFR Part 24

    Administrative practice and procedure, Claims, Electronic funds 
transfers, Excise taxes, Exports, Food additives, Fruit juices, 
Labeling, Liquors, Packaging and containers, Reporting and 
recordkeeping requirements, Research, Scientific equipment, Spices and 
flavorings, Surety bonds, Vinegar, Warehouses, Wine.

27 CFR Part 25

    Beer, Claims, Electronic funds transfers, Excise taxes, Exports, 
Labeling, Packaging and containers, Reporting and recordkeeping 
requirements, Research, Surety bonds.

27 CFR Part 26

    Alcohol and alcoholic beverages, Caribbean Basin initiative, 
Claims, Customs duties and inspection, Electronic funds transfers, 
Excise taxes, Packaging and containers, Puerto Rico, Reporting and 
recordkeeping requirements, Surety bonds, Virgin Islands, Warehouses.

27 CFR Part 27

    Alcohol and alcoholic beverages, Beer, Cosmetics, Customs duties 
and inspection, Electronic funds transfers, Excise taxes, Imports, 
Labeling, Liquors, Packaging and containers, Reporting and 
recordkeeping requirements, Wine.

27 CFR Part 28

    Aircraft, Alcohol and alcoholic beverages, Armed forces, Beer, 
Claims, Excise taxes, Exports, Foreign trade zones, Labeling, Liquors, 
Packaging and containers, Reporting and recordkeeping requirements, 
Surety bonds, Vessels, Warehouses, Wine.

27 CFR Part 30

    Liquors, Scientific equipment.

Proposed Regulatory Amendments

    For the reasons discussed in the preamble, TTB proposes to amend 27 
CFR, chapter I, parts 18, 19, 24, 25, 26, 27, 28, and 30 as set forth 
below:

PART 18--PRODUCTION OF VOLATILE FRUIT-FLAVOR CONCENTRATE

0
1. The authority citation for part 18 is revised to read as follows:

    Authority:  26 U.S.C. 5001, 5171-5173, 5178, 5179, 5203, 5351, 
5354, 5356, 5511, 5552, 6065, 6109, 7805.

0
2. [The proposed amendatory instructions and the proposed regulatory 
text for part 18 are the same as the amendatory instructions and the 
amendatory regulatory text set forth in the temporary rule on this 
subject published in the Rules and Regulations section of this issue of 
the Federal Register].

PART 19--DISTILLED SPIRITS PLANTS

0
3. The authority citation for part 19 continues to read as follows:

    Authority:  19 U.S.C. 81c, 1311; 26 U.S.C. 5001, 5002, 5004-
5006, 5008, 5010, 5041, 5061, 5062, 5066, 5081, 5101, 5111-5114, 
5121-5124, 5142, 5143, 5146, 5148, 5171-5173, 5175, 5176, 5178-5181, 
5201-5204, 5206, 5207, 5211-5215, 5221-5223, 5231, 5232, 5235, 5236, 
5241-5243, 5271, 5273, 5301, 5311-5313, 5362, 5370, 5373, 5501-5505, 
5551-5555, 5559, 5561, 5562, 5601, 5612, 5682, 6001, 6065, 6109, 
6302, 6311, 6676, 6806, 7011, 7510, 7805; 31 U.S.C. 9301, 9303, 
9304, 9306.

0
4. [With the addition of the amendatory instructions and proposed 
regulatory text set forth below, the

[[Page 786]]

proposed amendatory instructions and the proposed regulatory text for 
part 19 are the same as the amendatory instructions and the amendatory 
regulatory text set forth in the temporary rule on this subject 
published in the Rules and Regulations section of this issue of the 
Federal Register].


Sec.  19.147   [Amended]

0
5. In Sec.  19.147, paragraph (d) is amended by removing the word 
``monthly''.
0
6. Section 19.632 is revised to read as follows:


Sec.  19.632  Submission of reports.

    (a) General. Each proprietor must submit reports of its distilled 
spirits plant operations to TTB in accordance with paragraph (b) of 
this section. The proprietor must submit the original reports to TTB 
and must retain a copy for its records. The required report forms are 
as follows:
    (1) Report of Production Operations, form TTB F 5110.40, except 
that no report is required when production operations are suspended as 
provided in Sec.  19.292;
    (2) Report of Storage Operations, form TTB F 5110.11;
    (3) Report of Processing Operations, form TTB F 5110.28; and
    (4) Monthly Report of Processing (Denaturing) Operations, form TTB 
F 5110.43.
    (b) Reporting periods. Each proprietor must submit the reports 
specified in paragraph (a) of this section to the Director, National 
Revenue Center, not later than the 15th day following the last day of 
the reporting periods specified in this paragraph. A proprietor may 
submit reports in either paper format or electronically via TTB 
Pay.gov. The required reporting periods are as follows:
    (1) Monthly reporting periods. Except in cases where the proprietor 
must submit reports covering each calendar quarter or calendar year of 
operations under paragraphs (b)(2) or (b)(3) of this section, a 
proprietor must submit reports covering for each month of operations.
    (2) Quarterly reporting periods. A proprietor must submit reports 
covering each calendar quarter of operations if both of the following 
are true:
    (i) The proprietor files quarterly tax returns pursuant to Sec.  
19.235; and
    (ii) The proprietor's liability for tax on spirits for which taxes 
have not been paid does not exceed $50,000 at any time during the 
calendar year.
    (3) Annual reporting periods. A proprietor must submit reports 
covering for each calendar year of operations if both of the following 
are true:
    (i) The proprietor files annual tax returns pursuant to Sec.  
19.235; and
    (ii) The proprietor's liability for tax on spirits for which taxes 
have not been paid does not exceed $50,000 at any time during the 
calendar year.
    (c) Loss of eligibility for quarterly or annual reporting--(1) 
General. If a proprietor is using a reporting period under paragraph 
(b)(2) or (b)(3) of this section but becomes required to use a more 
frequent reporting period due to changes in the proprietor's return 
filing frequency or tax liability, the proprietor must:
    (i) File the appropriate report form or forms beginning with the 
first quarterly or monthly reporting period during which the proprietor 
became required to report in that period; and
    (ii) Concurrently file the appropriate report form or forms 
covering any previous quarters of the calendar year (in the case of a 
proprietor who was previously authorized to submit reports annually) or 
any previous months of the calendar quarter (in the case of a 
proprietor who was previously authorized to submit reports quarterly).
    (2) Required statement. When filing the first quarterly or monthly 
report form or forms described in paragraph (c)(1)(i) of this section, 
a proprietor must state on the form or forms that the proprietor is 
increasing the frequency of its reporting and henceforth will submit 
quarterly or monthly reports, as applicable. The proprietor must then 
continue to file the appropriate form or forms for each subsequent 
quarter or month of that calendar year.
    (d) More frequent reporting required by TTB. The appropriate TTB 
officer may at any time require a proprietor who is reporting quarterly 
or annually to report more frequently if there is a jeopardy to the 
revenue.

PART 24--WINE

0
7. The authority citation for part 24 continues to read as follows:

    Authority:  5 U.S.C. 552(a); 26 U.S.C. 5001, 5008, 5041, 5042, 
5044, 5061, 5062, 5121, 5122-5124, 5173, 5206, 5214, 5215, 5351, 
5353, 5354, 5356, 5357, 5361, 5362, 5364-5373, 5381-5388, 5391, 
5392, 5511, 5551, 5552, 5661, 5662, 5684, 6065, 6091, 6109, 6301, 
6302, 6311, 6651, 6676, 7302, 7342, 7502, 7503, 7606, 7805, 7851; 31 
U.S.C. 9301, 9303, 9304, 9306.

0
8. [The proposed amendatory instructions and the proposed regulatory 
text for part 24 are the same as the amendatory instructions and the 
amendatory regulatory text set forth in the temporary rule on this 
subject published in the Rules and Regulations section of this issue of 
the Federal Register].

PART 25--BEER

0
9. The authority citation for part 25 continues to read as follows:

    Authority:  19 U.S.C. 81c; 26 U.S.C. 5002, 5051-5054, 5056, 
5061, 5121, 5122-5124, 5222, 5401-5403, 5411-5417, 5551, 5552, 5555, 
5556, 5671, 5673, 5684, 6011, 6061, 6065, 6091, 6109, 6151, 6301, 
6302, 6311, 6313, 6402, 6651, 6656, 6676, 6806, 7342, 7606, 7805; 31 
U.S.C. 9301, 9303-9308.

0
10. [With the addition of the amendatory instructions and proposed 
regulatory text set forth below, the proposed amendatory instructions 
and the proposed regulatory text for part 25 are the same as the 
amendatory instructions and the amendatory regulatory text set forth in 
the temporary rule on this subject published in the Rules and 
Regulations section of this issue of the Federal Register].
0
11. Section 25.297 is revised to read as follows:


Sec.  25.297  Report of Operations, Form 5130.9 or Form 5130.26.

    (a) Monthly report of operations. Except as provided in paragraph 
(b) or (c) of this section, each brewer must prepare and submit a 
monthly report of brewery operations on Form 5130.9.
    (b) Quarterly report of operations. A brewer must file quarterly 
Form 5130.9 or Form 5130.26 (or any successor forms) if both of the 
following are true:
    (1) The brewer files quarterly tax returns pursuant to Sec.  
25.164; and
    (2) The brewer's liability for tax on beer for which taxes have not 
been paid does not exceed $50,000 at any time during the calendar year.
    (c) Annual report of operations. A brewer must file annual Form 
5130.9 or Form 5130.26 (or any successor forms) if both of the 
following are true:
    (1) The brewer files annual tax returns pursuant to Sec.  25.164; 
and
    (2) The brewer's liability for tax on beer for which taxes have not 
been paid does not exceed $50,000 at any time during the calendar year.
    (d) Loss of eligibility for quarterly or annual reporting--(1) 
General. If a brewer using a reporting period under paragraph (b) or 
(c) of this section becomes required to use a more frequent reporting 
period, the brewer must:
    (i) File the appropriate report form beginning with the first 
quarterly or monthly period during which the brewer became required to 
use that period; and
    (ii) Concurrently file the appropriate report form or forms 
covering any previous quarters of the calendar year (in the case of a 
brewer who was previously authorized to submit reports annually) or any 
previous months of the

[[Page 787]]

calendar quarter (in the case of a brewer who was previously authorized 
to submit reports quarterly).
    (2) Required statement. When filing the first quarterly or monthly 
report described in paragraph (d)(1)(i) of this section, a brewer must 
state on the form that it is increasing the frequency of its reporting 
and henceforth will submit quarterly or monthly reports, as applicable. 
The brewer must then continue to file the appropriate form for each 
subsequent quarter or month of that calendar year.
    (e) More frequent reporting required by TTB. The appropriate TTB 
officer may at any time require a brewer who is filing Form 5130.9 or 
Form 5130.26 quarterly or annually to file such reports more frequently 
if there is a jeopardy to the revenue.
    (f) Submission and retention. The brewer may submit reports in 
either paper format or electronically via TTB Pay.gov. The brewer must 
retain a copy of Form 5130.9 or Form 5130.26 (or any successor form) in 
either paper or electronic format as part of the brewery records.

PART 26--LIQUORS AND ARTICLES FROM PUERTO RICO AND THE VIRGIN 
ISLANDS

0
12. The authority citation for part 26 is revised to read as follows:

    Authority:  19 U.S.C. 81c; 26 U.S.C. 5001, 5007, 5008, 5010, 
5041, 5051, 5061, 5111-5114, 5121, 5122-5124, 5131-5132, 5207, 5232, 
5271, 5275, 5301, 5314, 5555, 6001, 6109, 6301, 6302, 6804, 7101, 
7102, 7651, 7652, 7805; 27 U.S.C. 203, 205; 31 U.S.C. 9301, 9303, 
9304, 9306.

0
13. [The proposed amendatory instructions and the proposed regulatory 
text for part 26 are the same as the amendatory instructions and the 
amendatory regulatory text set forth in the temporary rule on this 
subject published in the Rules and Regulations section of this issue of 
the Federal Register].

PART 27--IMPORTATION OF DISTILLED SPIRITS, WINES, AND BEER

0
14. The authority citation for part 27 is revised to read as follows:

    Authority:  5 U.S.C. 552(a), 19 U.S.C. 81c, 1202; 26 U.S.C. 
5001, 5007, 5008, 5010, 5041, 5051, 5054, 5061, 5121, 5122-5124, 
5201, 5205, 5207, 5232, 5273, 5301, 5313, 5555, 6109, 6302, 7805.

0
15. [The proposed amendatory instructions and the proposed regulatory 
text for part 27 are the same as the amendatory instructions and the 
amendatory regulatory text set forth in the temporary rule on this 
subject published in the Rules and Regulations section of this issue of 
the Federal Register].

PART 28--EXPORTATION OF ALCOHOL

0
16. The authority citation for part 28 is revised to read as follows:

    Authority:  5 U.S.C. 552(a); 19 U.S.C. 81c, 1202; 26 U.S.C. 
5001, 5007, 5008, 5041, 5051, 5054, 5061, 5121, 5122, 5201, 5205, 
5207, 5232, 5273, 5301, 5313, 5555, 6109, 6302, 7805; 27 U.S.C. 203, 
205; 44 U.S.C. 3504(h).


0
17. [The proposed amendatory instructions and the proposed regulatory 
text for part 28 are the same as the amendatory instructions and the 
amendatory regulatory text set forth in the temporary rule on this 
subject published in the Rules and Regulations section of this issue of 
the Federal Register].

PART 30--GAUGING MANUAL

0
18. The authority citation for part 30 continues to read as follows:

    Authority:  26 U.S.C. 7805.

0
19. [The proposed amendatory instructions and the proposed regulatory 
text for part 30 are the same as the amendatory instructions and the 
amendatory regulatory text set forth in the temporary rule on this 
subject published in the Rules and Regulations section of this issue of 
the Federal Register].

    Signed: December 21, 2016.
Mary G. Ryan,
Acting Administrator.
    Approved: December 22, 2016.
Timothy E. Skud,
Deputy Assistant Secretary. (Tax, Trade, and Tariff Policy).
[FR Doc. 2016-31415 Filed 1-3-17; 8:45 am]
 BILLING CODE 4810-31-P