27 C.F.R. Subpart Ca—Special (Occupational) Taxes
Title 27 - Alcohol, Tobacco Products and Firearms
Source: T.D. ATF–271, 53 FR 17541, May 17, 1988, unless otherwise noted.
(a) Proprietor of distilled spirits plant—(1) General. Except as provided in §19.906, every proprietor of a distilled spirits plant shall pay a special (occupational) tax at a rate specified by §19.50. The tax shall be paid on or before the date of commencing business as a distilled spirits plant proprietor, and thereafter every year on or before July 1. On commencing business, the tax shall be computed from the first day of the month in which liability is incurred, through the following June 30. Thereafter, the tax shall be computed for the entire year (July 1 through June 30). (2) Transition rule. For purposes of paragraph (a)(1) of this section, a proprietor engaged in distilled spirits plant operations on January 1, 1988, shall be treated as having commenced business on that date. The special tax imposed by this transition rule shall cover the period January 1, 1988, through June 30, 1988, and shall be paid on or before April 1, 1988. (3) Suspension of tax. During the period from July 1, 2005, through June 30, 2008, the rate of the tax described in paragraph (a)(1) of this section is zero. However, each proprietor still must register by filing the special tax return on Form 5630.5 during this suspension period even though the amount of tax due is zero. During the suspension period, as at other times, the special tax return is due on or before commencement of business and on or before July 1 of each year thereafter. (b) Liquor Dealer—(1) General. A proprietor of a distilled spirits plant shall be subject to or exempt from a liquor dealer's special (occupational) tax as provided in part 31 of this chapter. (2) Exemption for sales by a proprietor of a distilled spirits plant. A proprietor of a distilled spirits plant is not required to pay special tax, or to register during the suspension period described in paragraph (a)(3) of this section, as a wholesale or retail dealer in liquor because of sales, at the principal place of business or at the distilled spirits plant, of liquor which at the time of sale is stored at the distilled spirits plant or which had been removed and stored in a taxpaid storeroom operated in connection with the distilled spirits plant. Each proprietor of a distilled spirits plant shall have only one exemption from dealer's special tax, or from dealer's registration, for each distilled spirits plant. The distiller may designate, in writing to the appropriate TTB officer, that the principal place of business will be exempt from dealer's special tax or registration; otherwise, the exemption will apply to the distilled spirits plant. (c) Each place of business taxable—(1) General. A proprietor of a distilled spirits plant incurs special tax liability, or an obligation to register during the suspension period described in paragraph (a)(3) of this section, at each place of business in which an occupation subject to special tax is conducted. A place of business means the entire office, plant or area of the business in any one location under the same proprietorship. Passageways, streets, highways, rail crossings, waterways, or partitions dividing the premises are not sufficient separation to require additional special tax, if the divisions of the premises are otherwise contiguous. (2) Exception for contiguous areas. A proprietor of a distilled spirits plant does not incur additional special tax liability, or an obligation to register during the suspension period described in paragraph (a)(3) of this section, for sales of liquor made at a location other than on distilled spirits plant premises described on the notice of registration, Form 5110.41, if the location where such sales are made is contiguous to the distilled spirits plant premises in the manner described in paragraph (c)(1) of this section. (26 U.S.C. 5081, 5111, 5113, 5142, 5143) [T.D. ATF–271, 53 FR 17541, May 17, 1988, as amended by T.D. ATF–285, 54 FR 12609, Mar. 28, 1989; T.D. TTB–25, 70 FR 19882, Apr. 15, 2005; T.D. TTB–36, 70 FR 62242, Oct. 31, 2005]] (a) General. Title 26 U.S.C. 5081(a)(1) imposes a special tax of $1,000 per year on every proprietor of a distilled spirits plant. However, under 26 U.S.C. 5148(a) the tax rate is zero during the suspension period described in §19.49(a)(3). (b) Reduced rate for small proprietors. Except during the suspension period described in §19.49(a)(3) when the tax rate is zero, title 26 U.S.C. 5081(b) provides for a reduced rate of $500 per year with respect to any distilled spirits plant proprietor whose gross receipts (for the most recent taxable year ending before the first day of the taxable period to which the special tax imposed by §19.49 relates) are less than $500,000. The “taxable year” to be used for determining gross receipts is the taxpayer's income tax year. All gross receipts of the taxpayer shall be included, not just the gross receipts of the business subject to special tax. Proprietors of new businesses that have not yet begun a taxable year, as well as proprietors of existing businesses that have not yet ended a taxable year, who commence a new activity subject to special tax, qualify for the reduced special (occupational) tax rate, unless the business is a member of a “controlled group”; in that case, the rules of paragraph (c) of this section shall apply. (c) Controlled group. All persons treated as one taxpayer under 26 U.S.C. 5061(e)(3) shall be treated as one taxpayer for the purpose of determining gross receipts under paragraph (b) of this section. “Controlled group” means a controlled group of corporations, as defined in 26 U.S.C. 1563 and implementing regulations in 26 CFR 1.1563–1 through 1.1563–4, except that the words “at least 80 percent” shall be replaced by the words “more than 50 percent” in each place they appear in subsection (a) of 26 U.S.C. 1563, as well as in the implementing regulations. Also, the rules for a “controlled group of corporations” apply in a similar fashion to groups which include partnerships and/or sole proprietorships. If one entity maintains more than 50% control over a group consisting of corporations and one, or more, partnerships and/or sole proprietorships, all of the members of the controlled group are one taxpayer for the purpose of this section. (d) Short taxable year. Gross receipts for any taxable year of less than 12 months shall be annualized by multiplying the gross receipts for the short period by 12 and dividing the result by the number of months in the short period, as required by 26 U.S.C. 448(c)(3). (e) Returns and allowances. Gross receipts for any taxable year shall be reduced by returns and allowances made during that year under 26 U.S.C. 448(c)(3). (26 U.S.C. 448, 5061, 5081) [T.D. ATF–271, 53 FR 17541, May 17, 1988, as amended by T.D. TTB–36, 70 FR 62243, Oct. 31, 2005] (a) General. Special tax shall be paid by return, and the filing of a return is required for registration purposes even though no tax is due during the suspension period described in §19.49(a)(3). The prescribed return is Form 5630.5, Special Tax Registration and Return. Special tax returns, with payment of applicable tax, shall be filed in accordance with instructions on the form. (b) Preparation of TTB Form 5630.5. All of the information called for on Form 5630.5 shall be provided, including: (1) The true name of the taxpayer. (2) The trade name(s) (if any) of the business(es) subject to special tax. (3) The employer identification number (see §19.52). (4) The exact location of the place of business, by name and number of building or street, or if these do not exist, by some description in addition to the post office address. In the case of one return for two or more locations, the address to be shown shall be the taxpayer's principal place of business (or principal office, in the case of a corporate taxpayer). (5) The class(es) of special tax to which the taxpayer is subject or to which the return relates during the suspension period described in §19.49(a)(3). (6) Ownership and control information: that is, the name, position, and residence address of every owner of the business and of every person having power to control its management and policies with respect to the activity subject to special tax. “Owner of the business” shall include every partner, if the taxpayer is a partnership, and every person owning 10% or more of its stock, if the taxpayer is a corporation. However, the ownership and control information required by this paragraph need not be stated if the same information has been previously provided to TTB in connection with a permit application, and if the information previously provided is still current. (c) Multiple locations and/or classes of tax. A taxpayer subject to special tax, or required to register during the suspension period described in §19.49(a)(3), for the same period at more than one location or for more than one class of tax shall— (1) File one special tax return, Form 5630.5, with payment of applicable tax, to cover all such locations and classes of tax; and (2) Prepare, in duplicate, a list identified with the taxpayer's name, address (as shown on Form 5630.5), employer identification number, and period covered by the return. The list shall show, by States, the name, address, and tax class of each location for which special tax is being paid, or for which registration is being made during the suspension period described in §19.49(a)(3). The original of the list shall be filed in accordance with instructions on the return, and the copy shall be retained at the taxpayer's principal place of business (or principal office, in the case of a corporate taxpayer) for the period specified in §19.723(c). (d) Signing of TTB Forms 5630.5—(1) Ordinary returns. The return of an individual proprietor shall be signed by the individual. The return of a partnership shall be signed by a general partner. The return of a corporation shall be signed by any officer. In each case, the person signing the return shall designate his or her capacity as “individual owner,” “member of firm,” or, in the case of a corporation, the title of the officer. (2) Fiduciaries. Receivers, trustees, assignees, executors, administrators, and other legal representatives who continue the business of a bankrupt, insolvent, deceased person, etc., shall indicate the fiduciary capacity in which they act. (3) Agent or attorney in fact. If a return is signed by an agent or attorney in fact, the signature shall be preceded by the name of the principal and followed by the title of the agent or attorney in fact. A return signed by a person as agent will not be accepted unless there is filed, with the TTB office with which the return is required to be filed, a power of attorney authorizing the agent to perform the act. (4) Perjury statement. TTB Forms 5630.5 shall contain or be verified by a written declaration that the return has been executed under the penalties of perjury. (26 U.S.C. 6061, 6065, 6151, 7011) [T.D. ATF–271, 53 FR 17541, May 17, 1988, as amended by T.D. TTB–36, 70 FR 62243, Oct. 31, 2005] (a) Requirement. The employer identification number (defined in 26 CFR 301.7701–12) of the taxpayer who has been assigned such a number shall be shown on each special tax return, including amended returns, filed under this subpart. Failure of the taxpayer to include the employer identification number may result in the imposition of the penalty specified in §70.113 of this chapter. (b) Application for employer identification number. Each taxpayer who files a special tax return, who has not already been assigned an employer identification number, shall file IRS Form SS–4 to apply for one. The taxpayer shall apply for and be assigned only one employer identification number, regardless of the number of places of business for which the taxpayer is required to file a special tax return. The employer identification number shall be applied for no later than 7 days after the filing of the taxpayer's first special tax return. IRS Form SS–4 may be obtained from the director of an IRS service center or from any IRS district director. (c) Preparation and filing of IRS Form SS–4. The taxpayer shall prepare and file IRS Form SS–4, together with any supplementary statement, in accordance with the instructions on the form or issued in respect to it. (26 U.S.C. 6109) [T.D. ATF–271, 53 FR 17541, May 17, 1988, as amended by T.D. ATF–301, 55 FR 47605, Nov. 14, 1990] (a) Issuance of special tax stamps—(1) General. Except as otherwise provided in paragraph (a)(2) of this section, upon filing a properly executed return on Form 5630.5, together with the applicable full remittance, the taxpayer will be issued an appropriately designated special tax stamp. If the return covers multiple locations, the taxpayer will be issued one appropriately designated stamp for each location listed on the attachment required by §19.51(c), but showing, as to name and address, only the name of the taxpayer and the address of the taxpayer's principal place of business (or principal office in the case of a corporate taxpayer). (2) Exception for suspension period. During the suspension period described in §19.49(a)(3) when registration is required but no tax is due, a special tax stamp will not be issued. (b) Distribution of special tax stamps for multiple locations. On receipt of the special tax stamps, the taxpayer shall verify that there is one stamp for each location listed on the attachment to TTB Form 5630.5. The taxpayer shall designate one stamp for each location and shall type on each stamp the address of the business conducted at the location for which that stamp is designated. The taxpayer shall then forward each stamp to the place of business designated on the stamp. (c) Examination of special tax stamps. All stamps denoting payment of special tax shall be kept available for inspection by appropriate TTB officers, at the location for which designated, during business hours. (26 U.S.C. 5146, 6806) [T.D. ATF–271, 53 FR 17541, May 17, 1988, as amended by T.D. TTB–36, 70 FR 62243, Oct. 31, 2005] (a) Change in name. If there is a change in the corporate or firm name, or in the trade name, as shown on Form 5630.5, the proprietor shall file an amended special tax return as soon as practicable after the change, covering the new corporate or firm name, or trade name. No new special tax is required to be paid. The proprietor shall attach the special tax stamp for endorsement of the change in name except if the change occurs during the suspension period described in §19.49(a)(3). (b) Change in proprietorship—(1) General. If there is a change in the proprietorship of a distilled spirits plant, the successor shall file a new special tax return, pay a new special tax, and obtain the required special tax stamps. However, if the change in proprietorship occurs during the suspension period described in §19.49(a)(3) when no tax is due and no stamp is issued, only the filing of a new special tax return is required. (2) Exemption for certain successors. Persons having the right of succession provided for in paragraph (c) of this section may carry on the business for the remainder of the period for which the special tax was paid (or for which registration was made during the suspension period described in §19.49(a)(3)), without paying a new special tax, if within 30 days after the date on which the successor begins to carry on the business, the successor files a special tax return on Form 5630.5, which shows the basis of succession. Except during the suspension period described in §19.49(a)(3), a person who is a successor to a business for which special tax has been paid and who fails to register the succession is liable for special tax computed from the first day of the calendar month in which he or she began to carry on the business. During the suspension period, a failure to register the succession may result in a penalty under 26 U.S.C. 5603(b). (c) Persons having right of succession. Under the conditions indicated in paragraph (b)(2) of this section, the right of succession will pass to certain persons in the following cases: (1) Death. The widowed spouse or child, or executor, administrator, or other legal representative of the taxpayer; (2) Succession of spouse. A husband or wife succeeding to the business of his or her spouse (living); (3) Insolvency. A receiver or trustee in bankruptcy, or an assignee for benefit of creditors; (4) Withdrawal from firm. The partner or partners remaining after death or withdrawal of a member. (d) Change in location. (1) Subject to paragraph (d)(2) of this section, if there is a change in location of a taxable place of business, the proprietor shall, within 30 days after the change, file an amended special tax return covering the new location. The proprietor shall attach the special tax stamp or stamps, for endorsement of the change in location. No new special tax is required to be paid. However, if the proprietor does not file the amended return within 30 days, the proprietor is required to file a new special tax return, pay a new special tax, and obtain a new special tax stamp. (2) If the change in location occurs during the suspension period described in §19.49(a)(3) when no tax is due and no special tax stamp is issued, the requirements of paragraph (d)(1) of this section still apply, except with regard to attachment of a special tax stamp and payment of a new special tax. During the suspension period, a failure to comply with paragraph (d)(1) of this section may result in a penalty under 26 U.S.C. 5603(b). (26 U.S.C. 5143, 7011) [T.D. ATF–271, 53 FR 17541, May 17, 1988, as amended by T.D. TTB–36, 70 FR 62243, Oct. 31, 2005]
Title 27: Alcohol, Tobacco and Firearms
PART 19—DISTILLED SPIRITS PLANTS
Subpart Ca—Special (Occupational) Taxes
§ 19.49 Liability for special tax.
§ 19.50 Rates of special tax.
§ 19.51 Special tax returns.
§ 19.52 Employer identification number.
Special Tax Stamps
§ 19.53 Issuance, distribution, and examination of special tax stamps.
§ 19.54 Changes in special tax stamps.
