Time, TTB and Tavern on premise

[rsizemore]

Hey all,

I need to know if anyone can help me with the TTB requirements for a brewery that will sell on premise and to distribution. We are brewing (to kegs only) and planning to sell 70% of our keg volume wholesale to distribution and 30% of our keg volume from our tavern on premise.

I don't understand. Tax determined beer can't be stored in a brewery, but can in a pub.?.?.?.? huh? I'm just lost and TTB is not helping. They're nice, but not helpful.... not at all.

What is the appropriate way to accomplish this legally?

Also,
I am done with month 5 and half way through month 6 of waiting for my Brewer's Notice (5130.10). REALLY? 5.5 months? All I can say is if you're in the Southwest and interested in opening a brewery then you should submit your forms to TTB NOW. DON'T WAIT. They are taking their time.

But, hey, it's my personal anecdote and perhaps it's operator error. I don't think so but ya' never know.

[GlacierBrewing]

In our brewery, the packaged beer (kegs and bottles) remained stored in the cold room, tax not yet paid. When the kegs get put on tap (for pouring in our tasting room), or bottles sold in the tasting room or kegs and bottles sold to wholesalers, they pass over an "imaginary" line and into the realm of "Tax Determined". Strict records must be kept about how much beer passed over this line in a given time period (ie. two weeks for Federal excise tax, one month or every three months for Federal Brewer's Report of Operations form). It is this "tax determined" beer that you pay excise tax on. Basically, you pay tax on the beer when it is sold and the TTB considers a keg to be sold when that keg is put on tap for the tasting room or tavern. When we first opened, I was paying tax on all the beer we had in the cold room, before it was sold. A TTB agent informed me that was not the way to do it.
One of the biggest tips I wish someone told me regarding this is as follows:
keep a lot of records.

Record how much went into the brite tanks,
how much was packaged,
how much was wasted during packaging,
how much went into the cold room and when,
how much left the cold and when and where did it go to.

Remember, whomever has the most paperwork, wins!
Perform regular inventories.
I'm unsure about you brewing without your brewer's notice, though. Have all those brews been test brews?
Luck to ya'

Prost!
dave

[rsizemore]

Thanks Dave!

I gather you don't serve from a product line from the cold room. You mentioned that you changed your practices after talking with an agent. When you submitted your Brewer's Notice did you file as a micro or as a pub? And when you made changes did you file amendments to your original application with TTB?

To be clear... I have not so much as put one grain of malt into my kettle. I am not brewing and I will not until I'm legal.

BTW. We did finally get the Bohemian installed... correctly, polished, and ready to go and it's beautiful!

Thanks again Dave!

[lhall]

Your walkin is your bonded area. When you either remove the beer to sell to a wholesaler or tap the keg for retail sales, it's now tax-declared and you pay taxes on it every two weeks.

[Gordie]

Basically, your production beer is considered "in bond" when its being stored by you prior to being placed in a position (on tap, in the hands of a distributor, in the hands of a customer) to be sold. Then it is considered to be removed from bond and you have to pay excise tax on it in order to leave the bond whole. Having something in bond is the Fed's way of feeling comfortable that the beer produced will inevitably have tax paid on it.

Make it easy on yourself and define when you consider something is taken out of bond rather than have it defined for you. Write out a memo to yourself defining when you consider beer removed from bond and then keep lots of paperwork that establishes that you are accounting for removals in a way that is consistent with that memo. So long as the process results in accurate tax payments the feds will likely not care where the imaginary line is between what's in bond and what's been removed. So long as you're being consistent. If they think a brewery is getting fuzzy on where they're drawing the line on removals, that's when they get nervous and have the potential to give you a hard time.

[GlacierBrewing]

Thanks Dave!

I gather you don't serve from a product line from the cold room. You mentioned that you changed your practices after talking with an agent. When you submitted your Brewer's Notice did you file as a micro or as a pub? And when you made changes did you file amendments to your original application with TTB?

To be clear... I have not so much as put one grain of malt into my kettle. I am not brewing and I will not until I'm legal.

BTW. We did finally get the Bohemian installed... correctly, polished, and ready to go and it's beautiful!

Thanks again Dave!

The keg side of our tasting room taps are located in the cold room. I have an orange box painted on the floor where these kegs sit while their being pour via taps. One the inside of this box it says "Tax Determined Area". We filed as a micro. I refiled reports and returns after speaking with the agent. DO IT CORRECTLY THE FIRST TIME!:D
Prost!
Dave

[rsizemore]

We filed as a micro. I refiled reports and returns after speaking with the agent. DO IT CORRECTLY THE FIRST TIME!:D
Prost!
Dave

Our rep at TTB and her supervisor said we would need to file as a pub because we intended to serve (some beer) on premise. But does that not mean that we need to sell ALL of our product on premise? If so, how do we sell to our distributor? I think I need to get them back on board with us being a micro... yes?

You rock Dave! Really, thanks to all who chimed in! We came to the same basic conclusion while we waited for your responses.

We decided to erect a "dog pen" within our walk-in to separate tax paid from non tax paid beer. Additionally, our 'tax determination tanks' (directed by the TTB folks for our "pub") will now be conditioning tanks.

Any more help will help.
Thanks,

[MJMurphy]

After talking with the TTB inspector that visited us recently I would stress that no matter how you separate your inventory physically, keep detailed and clear records.

I would wrangle someone who has some talent with spreadsheets or-even better, databases-to help build a system to track the data you want to track.

The list of items Dave mentioned above is a great start, we have gotten more detailed as the years have progressed.

Having all of our data going back for some time on an Access database provided us with an easy and consistent way to manage our data, but in addition it provided the inspector with an easy to navigate record of our activities. It also makes it easy for them to burn a CD with their own copy of the data.

In addition, it provides them with the assurance that you are interested in "good practices". Starting out with your ducks in a row when it comes to managing data will not only help you determine where every gallon is going and where your efficiency could improve, but if you ever have to go back and dig up data you can have confidence in its accuracy.

Perhaps more important, of course, is that it also gives you the data you need in an easy to analyze format. We track much of our data-recipes, brew notes, raw material data, filter/racking volumes and notes, packaging data batch analysis and more-on an Access database that one of our computer-savvy brewers built and has been refining for years.

Data entry isn't always first on a brewer's mind, but in the long run it can be quite beneficial.

[Tighthead]

MJMurphy,

This is a great idea and as someone with basic access programming skills (from my past life) I want to do this for the brewery. can you send me a sample of what you are tracking to give me some guideance??? you can send via PM or post here if you think others may have an interest.... Even if it is just a list of column headers!

Bruce

[barleyfreak]

I'll second Bruce's request. I have a good access programming background but in the interest of not reinventing the wheel, anything you'd be willing to share would be very much appreciated.

-Dave