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 FAQsWine FAQs - AnswerRevised: 07/18/03 Conversion tables for computation of taxable quantity of spirits, wine & beer
W2: How do I apply to get a grape growing area designated as a viticultural area? VITICULTURAL AREASA viticultural area is a delimited grape-growing region distinguishable by geographical features, the boundaries of which have been recognized by the Alcohol and Tobacco Tax and Trade Bureau (TTB) and defined in 27 CFR Part 9. A listing of approved viticultural areas is in the Code of Federal Regulations, Title 27, Part 9, American viticultural areas, which is available from this web site, U.S. Government bookstores or on the Government Printing Office web site at http://www.access.gpo.gov. Any interested person may petition TTB for the establishment of a viticultural area. No TTB forms are necessary. The petition should be in letter form, and should include:
A viticultural area should be based on features that affect the growing conditions of the area (climate, soil, elevation, physical features). A viticultural area may extend across political boundaries, and there is no maximum or minimum size for a viticultural area. However, the entire area should possess a unifying feature that distinguishes it from surrounding areas, and the evidence submitted with the petition should show this contrast. The narrative description of the boundaries should be detailed enough so someone with the same U.S.G.S. maps could draw the viticultural area's boundaries by following the description. Political boundaries, survey lines, constructed features (such as roads), contour lines, and any other such features may be used as boundaries where they reasonably coincide with the actual geographical or viticultural limits of an area. On receipt of a petition for establishment of a new viticultural area, the Regulations Division in TTB Headquarters reviews the petition and may contact the petitioner for more information. Once the petition is complete, TTB publishes a notice of proposed rulemaking and provides an opportunity for interested persons to comment on the proposal. If the petition, evidence and comments support establishment of the area, TTB publishes a final rule that amends the regulations to define the new viticultural area. For more information on the viticultural area approval process, contact the Updated: 03/29/04 Download Listing of the Approved Viticultural Areas
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:
Non-commercial use The operations must never "cross the line" to commercial production or sale of wine. Proprietors and employees of Home Winemakers' Centers:
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. 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 ttbquestions@ttb.gov or by telephone at (800) 398-2282. W6: What are the rules for computing and paying the tax on wine? See the “Quick Reference Guide to Wine Excise Tax” at http://www.ttb.gov/tax_audit/taxguide.shtml
Many small wine producers with limited space at their own wineries elect to transfer wine to other bonded wine premises (often commercial bonded wine cellars, or “BWCs”) for storage and distribution. Small wineries often pay the excise tax on their wine before shipping it to a BWC, in order to make use of the Small Domestic Producer’s Tax Credit. Under certain conditions, small wine producers have the option of transferring the use of their credit to other bonded wine premises, to be used when their wine is removed for consumption or sale (tax paid). Who is eligible for the Small Domestic Producer’s Credit? Producers of not more than 250,000 gallons of wine are eligible for a credit which lowers the tax due on the first 100,000 gallons of wine taxably removed each calendar year. Non-producing wine premises and companies which produce more than 250,000 gallons per year are generally not eligible to use the Small Domestic Producer’s Credit when making taxable removals from their bonded premises. The exception is when the credit is transferred by an eligible small producer to another taxpayer (a “transferee”), to be used on its behalf. A transferee is often a Bonded Wine Cellar (BWC), but it may be any bonded wine premises. What wine is eligible for transfer of the Small Domestic Producer’s Credit? Credit may be transferred on wine which was produced by a winery that is eligible for the credit. The wine regulations define “produced” as wine produced by fermentation and any volume increases to wine due to amelioration, wine spirits addition, sweetening, and the production of formula wine (see 27 CFR 24.278(e)(1)). When may a winery transfer its credit to another taxpayer? There are four conditions which must be met before a transferee may use credit on behalf of an eligible small wine producer. All four conditions must be met.
What must be in the written statement that is sent to the transferee? The written statement must contain the following:
How is the Excise Tax Return Prepared? The transferee lists the following in Schedule B of the Excise Tax Return Form 5000.24, and pays the tax:
Example of Schedule B
What does the producing winery show on its Reports and Returns? The producing winery shows the transfer in bond to the transferee on its Report of Wine Premises Operations Form 5120.17. It does not show the taxable removal on its tax returns or on its Report of Wine Premises Operations Form 5120.17. What does the transferee premises show on its Reports and Returns? The transferee shows the receipt of wine transferred in bond from the producing winery on its Report of Wine Premises Operations Form 5120.17. When the producer asks the transferee to make the taxable removal with its credit, the transferee shows the taxable removal of the wine from its Report of Wine Premises Operations Form 5120.17 and files a tax return, listing the removal as shown above. What is the limit for making taxable removals using the Small Domestic Producer’s Credit? The limit from all locations combined each calendar year is 100,000 wine gallons. The producer must keep track of all taxable removals being made on its behalf. After 100,000 gallons have been removed with credit from all locations, the producer’s taxable removals must be made at the full rates (without credit) for the rest of the calendar year. This is why the transferee must receive written notice prior to each removal. If the producer blends wine into its wine that it did not produce, can credit still be taken? Yes and no. The credit is not transferable on wine which was not produced by the small producer. If wine was blended into the small producer’s wine, the taxpayment should be made at small producer’s premises for full benefit of the credit. The alternative is to notify the transferee in the written notice about the percentage of the wine which is ineligible for credit. The ineligible portion can then be taxpaid by the transferee at the full tax rate. Can the producer transfer credit on wine it produced for a custom crush customer? Yes, but only if the producer holds title to the wine at the time of removal from bond (see 27 CFR 24.278(b)(2)(iii)). If the custom crush customer holds title to the wine, the credit may not be transferred to another taxpayer, and the taxpayment should be made from the producer’s winery. How are increasing and decreasing adjustments shown on the Excise Tax Return? If, at the end of the calendar year, it is determined that the winery produced more wine than expected, making the credit rate which was used incorrect, all parties that have used the winery’s small producer credit must make increasing tax adjustments. Also, if the producer fails to produce any wine during the year, the taxpayers must make an increasing adjustment during the last period of the calendar year. If too much tax was paid on behalf of the producer, such as if the incorrect rate of credit was used, the transferees and any other taxpayers who used the winery’s credit may file a claim on behalf of the producer. When the claim is approved by TTB, the taxpayers may make a decreasing tax adjustment in the form of a credit, or request a refund. Summary of “Who Does What…”
TTB has received inquires about the transfer, labeling, recordkeeping and taxpayment of unlabeled bottled wine (sometimes called “shiners”). When unlabeled bottled wine is transferred among two or more bonded wine premises for aging or labeling, the bottler must provide a copy of the approved Application For And Certification/Exemption of Label/Bottle Approval (COLA) TTB Form 5100.31 under which the wine was bottled. The transfer in bond record which accompanies the wine must be accurate and specific, and the label information record for the wine must fully support any claims made on the label to be affixed to the wine. The responsibility for transferring accurate label information is not that of the producer alone; it is the responsibility of all holders of the wine from the time it is produced until it is removed from bond for consumption or sale. Here are guidelines for the various parties that may be involved when unlabeled bottled wine is transferred among bonded premises: What are the responsibilities of the Producer? The producer of the wine must ensure that the transfer in bond record required by 27 CFR 24.309 contains accurate and specific label information for all bulk wine shipped in bond (or taxpaid) to another premises for bottling. This allows the bottler to apply for a COLA and ensures that the product label is correct. What are the responsibilities of the Bottler? The bottler obtains a COLA which can be substantiated by the transfer record which accompanied the wine from the producer. Unless the wine will be bottled at a taxpaid wine bottling house, the bottler will make sure that the wine to be bottled is received and maintained on bonded (not taxpaid) premises. The bottler maintains records in accordance with 27 CFR 24.308. If the bottler transfers unlabeled bottled wine to another bonded premises for labeling, the bottler must send the wine in bond (untaxpaid) with the COLA under which the wine was bottled. If a different product label will be affixed, the bottler must obtain a correct COLA, and forward it to the premises where the label will be affixed. The transfer in bond record that accompanies the bottled wine must contain accurate and specific information which substantiates the product label, as specified by 27 CFR 24.309. However, if unlabeled bottled wine is transferred to another bonded premises for aging only, and will be subsequently returned to the bottler for the affixing of the product label, the COLA does not have to accompany the shipments. To reiterate, an approved label which accompanies the wine must carry the minimum label requirements, but it might not be the label eventually affixed to the product. The label used to bottle the wine is sometimes referred to as the “generic” label. The bottler may apply for another COLA for a product label with specific label claims, as long as the claims are substantiated by the label information record requirements of 27 CFR 24.314. What does the Labeler receive from the Bottler? The person who will affix the product label receives the unlabeled, untaxpaid bottled wine, the COLA for the product label to be affixed, and the transfer in bond record (27 CFR 24.309) which contains accurate and specific information which substantiates the label claims. Only the bottler of the wine may apply for a COLA. If the owner of unlabeled bottled wine wants to label the wine with a label other than that which accompanied the wine, the bottler must be contacted, and the bottler must work with the owner to obtain an approved product label which is fully substantiated by the label information record for that wine. What if the bottler is unable to provide a COLA? If the bottler of the wine is unable to obtain label approval for the wine to be labeled, the wine may only be labeled if it is dumped to bulk and re-bottled. It may be re-bottled when an appropriate COLA is obtained by the bottler. The label may not contain any information which is not fully supported by the label information record for the wine. What is the responsibility of the person who removes the wine from bond? If the labeled wine is transferred in bond to another bonded wine premises for taxable removal, it must be accompanied by the transfer in bond record (27 CFR 24.309) which contains accurate and specific information which substantiates the label claims. The person who pays the tax on the wine is the qualified proprietor of a bonded winery or bonded wine cellar, and not a wholesaler, wine broker, agent, negotiant, retailer, consumer or, necessarily, the actual owner of the wine. Bottled wine may not be removed from bond (i.e., tax paid) without a COLA and an approved product label being affixed. How long must the records be kept? All records must be retained for a period of not less than three years from the record date or the date of last entry required to be made in the record, whichever is later. However, TTB may require records to be kept for a period of not more than three additional years, if deemed necessary. W9: Approved Grapes Names for American Wines When more than one name may be used to identify a single variety of grape, the synonym is shown in parentheses following the prime grape names. Name approved under 27 CFR 4.92 for use on wines bottled prior to January 1, 2006. Names approved pending formal rulemaking. Auxerrois Back to top I operate a bonded winery and someone has asked me if he can use my premises and equipment to produce wine from his own grapes. Is this ok? It has come TTB’s attention that people who have not filed the required application and bond forms and received permission to become a bonded winery proprietor are using the bonded wine premises of another company to produce wine. This situation can lead to the violation of federal laws and regulations by both the winery owner as well as the non permittee using the equipment.
People who are interested in producing wine, but who may not have the necessary equipment and facilities, should consider establishing an alternating proprietorship on bonded wine premises or setting up a custom crush arrangement. For information about alternating proprietorships, please see 27 CFR 24.136. See the next FAQ for information on custom crush arrangements. Winery proprietors, please remember it is your responsibility to maintain appropriate control over all wine production activities and follow the regulatory requirements for recordkeeping, reporting, labeling and tax payment (as applicable), regardless of wine ownership. You must comply with all applicable regulations if you want to remain in business. W11: What are the Federal requirements for “Custom Crush” clients and winemakers? In a typical custom crush arrangement, a grape grower or any person with winemaking materials (the “client”) enters into a contract with a bonded winery proprietor to have the grapes processed into wine. The client retains title to the grapes, and the wine is made to the client’s specifications. The finished wine is returned to the client for sale to other dealers, or the winery sometimes sells the wine on behalf of the client. TTB has received questions about the regulatory responsibilities of the custom crush client and the wine producer. The custom crush client may be required to obtain a Federal Wholesaler’s Basic Permit from TTB. This permit allows the client to engage in the business of purchasing wine for resale at wholesale, in accordance with the Federal Alcohol Administration Act at 27 U.S.C. 203(c)(1) and 27 CFR 1.22. Although the client is specifically paying for the producer’s services, the client has purchased wine (within the broad meaning of the term) at the price set in the agreement. If the client engages in activities normally associated with wholesaling, such as setting the price for the wine, determining which dealers will be sold the wine, and controlling and paying for advertising of the product, the client must have a wholesaler’s basic permit. If, however, the client merely receives the proceeds from the sale by the winery of the resulting wine, a permit would not be required. In addition to the basic permit requirement, the custom crush client who engages in the business of selling wine is liable for Special Occupational Tax as a wholesaler ($500/year) if the wine is offered for sale to other dealers, or as a retailer ($250/year) if the wine is only offered for sale to consumers. Bonded winery proprietors must ensure that the receipt of winemaking materials and the ensuing activities associated with the production of custom crush wine is properly recorded. TTB reminds the industry that wine produced for custom crush clients carries the same regulatory requirements for recordkeeping, reporting, labeling and taxation as wine made for the winery itself. The bottling winery is responsible for obtaining an appropriate Certificate of Label Approval, and the wine premises which releases the wine to the client is responsible for payment of federal excise tax at the rate appropriate for the producing winery. For the purposes of determining eligibility for the Small Domestic Producer’s Credit, all wine produced for clients must be included in the production and removal calculations (see 27 CFR 24.278-9). W12: May I sell home-produced wine? Proprietors of many new wine premises have extensive experience as home winemakers before deciding to make application to become a bonded winery. TTB has been asked if wine produced by a home winemaker, prior to the issuance of a federal permit and approval of an application and bond, may be brought to a bonded wine premises and offered for sale. As given in the law at 26 U.S.C. 5042 and in the Federal wine regulations at 27 CFR 24.75 (a) and (f), wine produced for personal or family use may not be sold or offered for sale: (a) General. Any adult may, without payment of tax, produce wine for personal or family use and not for sale. (f) Removal. Wine produced under this section may be removed from the premises where made for personal or family use including use at organized affairs, exhibitions or competitions, such as home winemaker's contests, tastings or judgings, but may not under any circumstances be sold or offered for sale. We suggest that a home winemaker that is planning to become the proprietor of a newly established bonded winery (“a”) should consider having wine produced by an existing, fully qualified bonded winery (“b”) under a custom crush arrangement. At such time that the applications and bond for the new winery (“a”) are approved, the wine produced by the bonded winery (“b”) for the new company can be transferred in bond to the newly established premises. That wine may be sold or offered for sale. In summary, only wine produced at a fully qualified bonded wine premises may be sold or offered for sale. Wine produced off the bonded premises by amateur winemakers under home-winemaker conditions should be stored away from bonded wine premises. W13: How do I become a bonded wine premises? Federal law requires that anyone wishing to conduct wine operations (other than as a home winemaker) must first establish premises, obtain a bond and receive permission from the Alcohol and Tobacco Tax and Trade Bureau (TTB). In addition, law requires that anyone wishing to produce or blend wine in the United States must first obtain a Federal Basic Permit from TTB. W14: May I use a winemaking kit for commercial wine production? Does TTB regulate the production of home winemaking kits? No, we do not. Winemaking kits typically contain concentrate, yeast, juice, acids, sulfites and wood chips, and provide sufficient materials to produce about 30 bottles of wine. Since the kits contain unfermented raw materials, they do not come under our jurisdiction. When the kits are used to produce tax-exempt wine for personal or family use, we do not regulate the labeling of wine made from the kits. Does TTB endorse or certify the contents of winemaking kits? No, TTB does not endorse or certify the contents of any winemaking kits. The users of winemaking kits are fully responsible for obtaining the necessary information about the content of the kits to support any statements made on the label. What rules apply if I use a winemaking kit to produce wine for sale? TTB regulates the commercial production of wine under the Internal Revenue Code of 1986 (IRC) and the Federal Alcohol Administration (FAA) Act laws and regulations. These laws and regulations require that wine producers qualify their premises as a bonded wine cellar, obtain an FAA Act basic permit as a producer of wine, pay the applicable excise tax on wine between one-half of 1 percent to 24 percent of alcohol by volume, and receive a Certificate of Label Approval (COLA) for all wine that is bottled. The IRC and FAA Act requirements apply to those who are engaged in the business of winemaking who intend to sell the wine or distribute it for commercial purposes, and apply equally to companies using kits and traditional winemaking materials. Information provided on the labels of all wine made for commercial purposes must be truthful and must adequately inform the consumer about the identity and quality of the product. How should I label wine made with a kit? If you are selling the wine, you must comply with TTB’s wine labeling regulations in 27 CFR Part 4 and the Health Warning Statement regulations found in 27 CFR Part 16, as well as any applicable State regulations. In addition to the mandatory label statements required by Part 4, TTB must be able to verify any optional statements used on wine labels. Examples of optional label claims include the varietal content (type of grape or grapes used), the appellation of origin (the geographic origin of the winemaking materials), and the vintage date (year of harvest). Winemakers using kits who wish to show any optional claims on the label must obtain appropriate records from the kit’s producer to verify the contents, the origin of the winemaking materials, the vintage date, etc. When winemakers make optional claims on wine, additional regulatory requirements in 27 CFR Part 4 are triggered, beyond the requirement to document the claims. For example, if 75 percent of the grapes used in a wine are from a particular State, the wine must be fully finished in that State or an adjacent State in order to be entitled to use the name of the State as an appellation of origin (27 CFR 4.25). If you buy a kit with 75 percent Washington State concentrate, but produce wine from the kit in Indiana, the wine is not entitled to a Washington State appellation of origin. With proper documentation, you could use "American" as the appellation of origin. Wine with an "American" appellation is not entitled to show a vintage date. Under 27 CFR 4.27, vintage dated wine must have an appellation of origin smaller than a country, and the records must show that 85 percent of the wine is derived from grapes harvested within the given year (95 percent for viticultural areas). How should I label the wine if I cannot obtain information about the origin of the concentrate or if the wine does not meet the requirements for optional claims? If information about the origin of the concentrate cannot be verified, the product may be labeled as “grape wine” or with a color descriptor, such as “red wine” or “white wine.” If the wine has an alcohol content that is not over 14 percent alcohol by volume, it may also be designated as “table wine.” Vintage dates, varietal names and appellations may not be shown on the label, unless they can be verified and the wine meets the other requirements in 27 CFR part 4 for use of the claim. If I am selling the wine, may I use the wine treating materials that are often provided in winemaking kits? You may, if the wine treating materials included in kits are listed as authorized for use and used as shown in the TTB regulations at 27 CFR § 24.246. For the most current information visit www.ttb.gov W15: What is required when applying for a certificate of exemption from label approval for my wine label instead of a Certificate of Label Approval on Form 5100.31? You may apply for a certificate of exemption from label approval for your wine only if it is produced or bottled in the United States and only if it will be sold, offered for sale, shipped, or delivered for shipment within the state in which it was bottled or packed (in other words, it will not be introduced into interstate commerce). This can be accomplished by selecting and completing item 18b on your label application, TTB Form 5100.31. Imported bottled wines are not eligible for a certificate of exemption from label approval and therefore must be covered by a Certificate of Label Approval. Wines labeled under a certificate of exemption from label approval must show the statement, “For sale in _________(name of State) only.” This statement may be added to a label covered by a certificate of exemption, or may be on an additional label that is affixed to the container. The statement does not have to appear on the label that is submitted to TTB, but must be on the container before it is removed from bond for consumption or sale. Although the labeling requirements in 27 CFR Part 4, Labeling and Advertising of Wine, do not apply when a certificate of exemption is used, all of the rules in the wine regulations under the Internal Revenue Code of 1986 (IRC), 27 CFR Part 24, continue to apply to all wine bottled and packed in the United States. For example, 27 CFR 24.257(a) outlines what information must appear on your label, as well as the minimum type size requirements, for each bottle or other container of beverage wine prior to removal for consumption or sale. In brief, each label must contain:
Please see the complete text of 27 CFR 24.257 for additional information and guidance. (Note that Part 24 does not apply in Puerto Rico. See 27 CFR 24.2.) The recordkeeping requirements in the IRC wine regulations continue to apply when a certificate of exemption is used. The wine regulations state in 27 CFR 24.257(b): “The information shown on any label applied to bottled or packed wine is subject to the recordkeeping requirements of [27 CFR 24.314, Label information record]," which states: A proprietor who removes bottled or packed wine with information stated on the label (e.g., varietal, vintage, appellation of origin, analytical data, date of harvest) shall have complete records so that the information appearing on the label may be verified by an [sic] TTB audit. A wine is not entitled to have information stated on the label unless the information can be readily verified by a complete and accurate record trail from the beginning source material to removal of the wine for consumption or sale. All records necessary to verify wine label information are subject to the record retention requirements of § 24.300(d). In addition, Congress recently amended section 5388(c) of the IRC (26 U.S.C. 5388(c)) to restrict the use of certain wine terms on wine labels sold in the United States. These wine names are: Burgundy, Claret, Chablis, Champagne, Chianti, Malaga, Marsala, Madeira, Moselle, Port, Rhine wine, Hock, Sauterne, Haut Sauterne, Sherry, Tokay and Retsina. These names may be used on labels for wine from the European Community (and made in accordance with the requirements of the Community) and on certain previously approved non-Community wine labels if their uses are grandfathered as of March 10, 2006. Because the IRC applies to wine regardless of whether it is in intrastate or interstate commerce, the restriction on the use of these names applies in both contexts. Accordingly, TTB will not issue a certificate of exemption for wine using one of these wine names in a manner not authorized by the statute. The change in the law was effective on December 20, 2006. The Alcoholic Beverage Labeling Act of 1988, 27 U.S.C. 213 et seq., and implementing regulations in 27 CFR Part 16, which require a specified health warning statement on alcoholic beverages bottled or imported for sale or distribution in the United States, also apply equally to wine sold or shipped in intrastate or interstate commerce. Under Part 16, the required warning statement is a prerequisite for approval of a certificate of exemption from label approval, just as it is for a Certificate of Label Approval. Finally, other laws may apply to fraudulent conduct used to sell mislabeled wine or to mislead consumers, including certain federal criminal statutes relating to fraud carried out through the use of: the mail; private or commercial interstate carriers; or wire, radio, or television communication in interstate or foreign commerce. W16: What does it mean when you see a wine labeled as “Table Wine With Natural Flavors" or "Grape Wine With Natural Flavors?” “Table Wine With Natural Flavors" and "Grape Wine With Natural Flavors” are statements of composition. A statement like this is required on a wine label when a wine does not fall within any of the current standards of identity set forth in TTB wine labeling regulations at 27 CFR, Part 4, Subpart C (Grape Wine, Fruit Wine, Aperitif Wine, etc.). If a wine product does not fit a standard of identity, TTB requires under 27 CFR 4.34 that the product be designated with a "truthful and adequate statement of composition" on the brand label, and we have accepted statements such as "Table Wine With Natural Flavors" for that purpose. The statement of composition is not required to be a complete listing of ingredients. TTB's predecessor agency, the Bureau of Alcohol, Tobacco, and Firearms (ATF), proposed adding a category for "flavored wine products" to the standards of identity in Subpart C to distinguish these products from standard wines. While there was not adequate support for such a labeling change, ATF did find there was support for a prohibition on use of varietal designations (grape type, like "Chardonnay"), semigeneric geographic type designations (like "Chablis" or "Burgundy"), or geographic distinctive designations (like Bordeaux or Medoc) for wines not made in accordance with classes 1, 2, and 3, of that standards of identity (27 CFR 4.21(a‑c)). This means that these flavored wine products labeled with a statement of composition pursuant to 27 CFR 4.34 cannot use varietal, semigeneric geographic type, or geographic distinctive designations. That prohibition was placed in 27 CFR 4.34(a) and 4.39(n). (See Treasury Decision ATF-431 published October 6, 2000, 65 FR 59718 http://www.ttb.gov/rpd/td431.pdf for more information regarding the ATF and TTB position on the labeling of Flavored Wine Products.) Therefore, you should not see a product with 7% or more alcohol by volume labeled "Chardonnay With Natural Flavors." However, you may see wines with less than 7% alcohol by volume using one of these designations (e.g. "Tutti-Frutti Chardonnay"). That is because TTB's consumer protection authority under the Federal Alcohol Administration Act extends only to wines with 7% or more alcohol by volume. The Food and Drug Administration (FDA) rules apply to the labeling of wines with less than 7% alcohol by volume. For more information about FDA labeling requirements go to http://www.cfsan.fda.gov/~dms/lab-ind.html. W17: Does ATF Ruling 80-19 prohibit wine premises proprietors from selling wine for consumption on the taxpaid areas of their wine premises? ATF Ruling 80-19 concerned wine that was provided free of tax to guests attending special events held in bonded areas of wine premises. An application was required and certain restrictions were imposed. Under 27 CFR 24.101 and 24.102, wine premises are designated as either bonded premises, where operations involving untaxpaid wine may be conducted, or taxpaid premises, where operations involving taxpaid wine may be conducted. ATF Ruling 80-19 did not address sales of taxpaid wine in taxpaid areas of wine premises, because such sales are considered to be part of normal wine premises operations. A proprietor selling wine for consumption on taxpaid premises does not need to obtain special permission. Existing recordkeeping and reporting requirements in part 24 apply. If the proprietor reconfigures premises to create a new serving area, the existing requirement to report changes in premises will apply. TTB regulations do not restrict the location where wine sold on taxpaid wine premises may be consumed. States may have additional rules about where purchased wine may be consumed, but for TTB purposes, the wine may be consumed anywhere except the bonded area. The wine premises proprietor is responsible for learning about and complying with applicable State and local rules.
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