Where can I store my beer? When brewers first get their Brewer’s Notice from the Alcohol and Tobacco Tax and Trade Bureau (TTB), they have to designate what areas of their facility are part of the actual “brewery” - the place where beer is to be produced and packaged. Frequently, the brewery is in only a portion of the building. Taprooms and taproom coolers, for example, are often excluded from the defined brewery space. Once a brewer removes its beer from the brewery to the taproom cooler or otherwise removes it for sale or consumption, it becomes tax determined (i.e. the brewer now owes tax on it), absent an exception. Once removed (and now taxed), it cannot be stored or put back in the brewery. So what?
Brewers occasionally run out of room to store that removed, taxed beer and want to use their available brewery space to fix the problem. The TTB has issued new guidelines to allow just that. See TTB industry circular (www.ttb.gov/industry_circulars/archives/18-3.shtml
). This is a welcome tool to brewers who need to alternate storage space intermittently. Previously they had to amend their Brewer’s Notice to re-designate the brewery space each time they wanted to change its use. That is a tedious process fraught with delays.
Per the TTB’s circular, brewers can petition to vary their method of operation which effectively allows them to alternate their brewery storage space for the already taxed beer and the not yet taxed beer. The two categories of beer, however, cannot be commingled; the storage space can only be used for one category of beer at a time.
The circular outlines key information to be provided when applying for a storage variance: Good cause, compliance history, proper identification of space and products, designation of equipment, marking removed beer, separation of product, record keeping, and amendment upon approval. Alternation of a large number of small storage spaces on a “when it’s convenient for me basis” will not likely be approved. Precise identification, tracking, segregation, and record keeping of product in real time for easy and accurate determination of tax status are critical.
To ensure it gets its money, the TTB can impose tax consequences for sloppy, inaccurate, or untimely record keeping during alternation of the premises. Naturally, the TTB also reserves the right to revoke its approval if it finds the new procedure ultimately jeopardizes its tax revenue, hinders its administration of the rules, or proves inconsistent with other regulations.
Brewers with storage issues should consider seeking a variance to alternate as a viable solution. Addressing the TTB’s main concerns and key factors is crucial, so prepare diligently and consult counsel with questions.