W4: What are the Federal guidelines for home winemakers' centers?
The Alcohol and Tobacco Tax and Trade Bureau (TTB) has been asked if there are any Federal requirements covering operation of a Home Winemakers' Center. Home Winemakers' Centers are places where an individual pays a fee to use space and equipment to make wine for personal or family use.
Although we refer to the individual making wine for personal or family use as a "home winemaker," the wine may be made somewhere other than the individual's residence, including a Home Winemakers' Center. We find that a Home Winemakers' Center may operate without qualifying under federal rules as a bonded wine cellar or paying federal excise tax on wine produced at the Center by individuals under the following conditions:
Compliance with State and local law
The ability to produce wine for personal or family use and without payment of tax under Federal law does not authorize production of wine by individuals or operation of a Home Winemakers' Center in violation of State or local law. The operator of a Home Winemakers' Center must learn and comply with any permit, license or tax requirements of State and local law and conduct operations in compliance with State and local law.
Use by qualified individuals
The customers who make wine at the center must be qualified to produce wine for personal or family use under federal, State and local rules. If State and local rules impose different requirements or limitations than the federal rules noted here, the stricter rules and limits should be applied. Under Federal law, any adult may, without payment of tax, produce wine for personal or family use under regulations in 27 CFR 24.75, which provide the following:
- The individual must follow applicable State and local laws. The individual must be 18 years of age or the legal age to purchase wine in the locality whichever is older. The individual may produce, without payment of tax, per household, up to 100 gallons of wine per calendar year if there is one adult residing in the household, or 200 gallons if there are two or more adults residing in the household. The individual may remove wine from the place where it is made for personal or family use, including use in contests or tasting. The individual may not produce wine for sale or offer wine for sale.
The operations must never "cross the line" to commercial production or sale of wine. Proprietors and employees of Home Winemakers' Centers:
- May furnish space, equipment, ingredients, bottling supplies and advice to customers.
- May provide certain assistance to customers including:
- Moving containers of wine between storage areas. Cleaning, maintenance, and repair of equipment. Climate and temperature control. Disposal of wastes. Quality control (including laboratory analysis and tasting of wine for quality control purposes).
wine; for example, employees may not ferment juice, filter or bottle wine, add ingredients to wine, or provide other physical assistance in producing or bottling wine. May not provide non-tax paid wine to customers or prospective customers for sampling or other reasons.
Operation of a Home Winemakers' Center in a manner contrary to the conditions outlined may cause the facility to be considered a commercial winery, subject to all statutory and regulatory provisions relating to winery operation, including registry requirements and possible liability for back taxes.
Under some circumstances, a TTB qualified bonded wine cellar may operate a Home Winemakers' Center. All wine produced at a Home Winemakers' Center on wine premises is taxable under Federal law and is subject to other requirements. For further information regarding qualification of a bonded wine premises or operation of a Home Winemakers' Center at bonded wine premises, contact:
The Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center 550 Main Street, Cincinnati, OH 45202 Telephone 1- (800) 398-2282.
Last reviewed/updated: 07/27/2010
W5: What are the rules covering on premises sales and tasting of wine?
Regulations covering operations at a bonded wine cellar are in 27 CFR part 24.
See section 24.97(b) and (c) for the requirements related to tax-free use of wine for tasting. You must record the quantity of wine transferred to the tasting area and tax pay any wine so transferred and not used for tasting on premises.
If you also plan to sell wine for your visitors to take home, that wine must be tax paid. You must arrange for recording the taxable removal of such wine at the time of sale or designate a suitable tax paid storage area and count the stocks of wine held there as removed when they are transferred to the tax paid storage area.
If you charge for a winery tour (in order to taste the wine) or for the wine that you serve in the tasting room, or if you sell wine to visitors to take home, you are considered a retailer. The special occupational tax you pay as a bonded wine cellar also covers retail and wholesale operations related to your wine operations AT THE SAME PREMISES. If you have additional locations, or if you sell beer or spirits as part of your retail operations, you must pay the applicable dealer's special occupational tax. See the dealers' regulations at 27 CFR 194. Section 194.183 covers the bonded wine cellar exemption.
If the development of your tasting area (and any related tax paid area to supply retail sales) affects information on your bonded wine cellar application, you should submit a notice of the change under 27 CFR Section 24.131 to the Chief of the TTB National Revenue Center. If you have questions about the notice, contact the National Revenue Center by e-mail at TTBInternetQuestions@ttb.gov or by telephone at (800) 398-2282.
Last reviewed/updated: 07/27/2010
W6: What are the rules for computing and paying the tax on wine?