Forward
1. General
2. Tax on Retail Dealers
3. Tax on limited retail dealers
4. Stamp not a license
5. Time for payment of special tax
6. Retail dealers conducting business at more than one location
7. Employer identification number
8. Computation of tax
9. Special tax stamp to be kept available for examination
10. Change in location of business
11. Change in ownership or control of business
12. Requirements on retail dealers who sell to other dealers
13. Sales in quantities of 20 wine gallons
14. Liability for additional taxes for "peddling"
15. Tax not refundable
16. Closures on bottles of distilled spirits
17. Refilling, reusing, and disposing of liquor bottles
18. Prohibited purchases of distilled spirits
19. Required records
20. Inspection by Alcohol, Tobacco and Firearms officers
21. Obtaining ATF Form 5630.5, Annual
To All Retail Dealers of Distilled Spirits, Wine, or Beer:
This booklet will explain briefly and in non-technical language the principal Federal liquor laws and regulations which affect you. Its purpose is to help you conduct your business in compliance with the law and regulations.
You should read the entire booklet immediately upon receipt and retain it for further reference. Later, when you have a particular question, you will find the answer by using the table of contents.
If you need more specific or detailed information, you may obtain copies of the complete regulations, Title 27 CFR (which includes Part 194, Liquor Dealers) by purchasing them from the Superintendent of Documents, Government Printing Office, Washington, DC, 20402. These publications are also available for purchase at GPO bookstores in most major cities.
You should also feel free to contact the office of the District Director (Regulatory Enforcement), Bureau of Alcohol, Tobacco and Firearms for your region concerning any of the requirements that may not be clear to you. For your convenience, the mailing addresses and telephone numbers of the District Directors are listed on the final page of this booklet.
Director,
Bureau of Alcohol, Tobacco and Firearms
Retail dealers of distilled spirits, wine or beer must comply with certain requirements of Federal laws and regulations. Failure to comply with these requirements carries severe penalties and renders the dealer liable to criminal prosecution. This information sheet summarizes the more important provisions of Federal laws and regulations applicable to retail dealers.
The law defines a retail dealer as a person who sells to any person other than a dealer. This includes sales for on-premises consumption (e.g., liquor stores, grocery stores, etc.). Every retail dealer (except in the case of "limited" dealers) is required to pay special occupational tax and obtain a special tax stamp before commencing business and on or before each July 1 thereafter, if he continues in business. A retail dealer who handles distilled spirits, wine or beer, or any combination of distilled spirits, wine, beer and malt beverages must pay special tax at the rate of $250 a year. When the tax is paid in full, the dealer will be issued a special tax stamp for the class of business for which tax is paid. The special tax stamp is issued to cover only one place of business; if a retail dealer conducts business at more than one location he must pay special tax and obtain a special tax stamp for each location. Persons engaged in the sale of distilled spirits, wine, or beer who willfully fail to pay the tax render themselves liable to a fine of not more than $5000, imprisonment for not more than 2 years, or both.
3. TAX ON LIMITED RETAIL DEALERS
On January 1, 1988, the tax on limited retail dealers was eliminated. The term "limited retail dealer" means any fraternal, civic, church, labor, charitable, benevolent, or ex-servicemen's organization making sales of distilled spirits, wine or beer on the occasion of any kind of entertainment, dance, picnic, bazaar, or festival held by it. It also refers to any person making sales of distilled spirits, wine or beer, to the members, guests, or patrons of bona fide fairs, reunions, picnics, carnivals, or other similar outings, if such organization or person is not otherwise engaged in business as a dealer. For confirmation that a specific type of organization qualified as a limited retailer dealer, contact the local ATF officer listed in this pamphlet.
The special tax stamp is a receipt for payment of the special occupational tax as a dealer. It is not a "Federal License" and does not confer any privileges on the dealer.
5. TIME FOR PAYMENT OF SPECIAL TAX
Every retail dealer who is subject to special (occupational) tax must file a special tax return (ATF Form 5630.5) with, and pay the proper special tax to, the Bureau of Alcohol, Tobacco and Firearms in accordance with the instructions on the return form. The ATF Form 5630.5 must be filed, with remittance, before the dealer commences business, and on or before each July 1 thereafter, if he continues in business. The dealer must file his tax return and pay the special tax to avoid liability for interest and delinquency penalties for late filing and/or late payment.
6. RETAIL DEALERS CONDUCTING BUSINESS AT MORE THAN ONE LOCATION
Every retail dealer conducting business at more than one location subject to special tax (retail dealer in liquor or retail dealer in beer) for the same period is required to (1) file only one special tax return (ATF Form 5630.5), with remittance, to cover all such locations, and (2) prepare, in duplicate, a list, showing, by States, the name, address and other key data described in the instructions for each location for which special tax is being paid. The original of the list must be attached to the ATF Form 5630.5 and the copy retained by the dealer.
7. EMPLOYER IDENTIFICATION NUMBER
Every retail dealer is required to show his employer identification number on the special tax return (ATF Form 5630.5). If a dealer does not have an employer identification number, he should file an application on IRS Form SS-4 for this number. Form SS-4 may be obtained from the director of the Internal Revenue Service center or any district director of the Internal Revenue Service, and should be filed with the official designated on the form, on or before the seventh day after the date on which the dealer files his first special tax return.
Special tax is computed on the basis of a tax year which begins on July 1 and ends on the following June 30. A retail dealer who commences business at any time in July is required to pay special tax for the entire tax year. A dealer in business on June 30 who continues operations into the month of July is required to pay special tax on the new tax year which begins July 1. A dealer who begins business in any month other than July is required to pay special tax from the first of the month in which he begins business to the following June 30. For example, a dealer who commences business on August 20 is required to pay for 11 full months (August 1 - June 30 following), or eleven-twelfths of the annual rate.
9. SPECIAL TAX STAMP TO BE KEPT AVAILABLE FOR EXAMINATION
Every retail dealer is required to keep his special tax stamp (receipt for payment of Federal tax) available in his place of business for inspection by any ATF officer.
10. CHANGES IN LOCATION OF BUSINESS
(a) General - Every retail dealer who moves his place of business to a location other than that indicated on his tax stamp must register such changes of address within 30 days from the date he begins to sell (or offer for sale) liquors at the new location. The change in location must be registered by completing a new ATF Form 5630.5 (marked "Amended Return") and surrendering the special tax stamp for endorsement. Failure to register the change of location within 30 days will subject the dealer to a new tax at the new location.
(b) Retail dealers conducting business at one location - Every retail dealer who conducts business at only one location and moves such place of business must indicate on his amended return the new address of his business and the date he commenced business at the new location. The amended return, together with the special tax stamp, must either be mailed to the Bureau of Alcohol, Tobacco and Firearms or given to an ATF officer inspecting the business. The stamp will be amended and returned to the dealer at his new address.
(c) Retail dealers conducting business at more than one location - Every retail dealer who conducts business at more than one location subject to special tax and who moves one of his businesses to a new location must indicate on his amended return the name and address of his principal place of business (or principal office, if the dealer is a corporation) and the date he commenced business at the new location. In addition, he must indicate on an attachment to the amended return the name and the old and new addresses of the business which moved to the new location. The amended return and attachment, together with the special tax stamp, must be submitted to the Bureau of Alcohol, Tobacco and Firearms. The stamp will be amended and returned to the taxpayer.
11. CHANGE IN OWNERSHIP OR CONTROL OF BUSINESS
(a) Change in control - Certain persons other than the dealer who paid the special tax may, without paying additional special tax secure the right to carry on the same business at the same address for the remainder of the taxable period for which the special tax was paid. These persons are -
(i) The widow/widower or child, or executor, administrator, or other legal representative of a deceased dealer;
(ii) A person succeeding to the business of his or her living spouse;
(iii) A receiver or trustee in bankruptcy, or an assignee for benefit or creditors; and
(iv) The partner or partners remaining after death or withdrawal of a member of a partnership.
In order to secure this right, the person or persons continuing the business must register the change in control with the Bureau of Alcohol, Tobacco and Firearms within 30 days from the date on which he or they begin to carry on the business. The registration must be made by completing a new ATF Form 5630.5 (marked "Amended Return") showing the basis of the succession, and submitting the amended return and the stamp to the Bureau of Alcohol, Tobacco and Firearms as set forth in paragraph 10. The stamp will be amended and returned. Failure to register the succession within 30 days will subject the successor to a new tax and interest and possible penalty for the taxable period in which he began to carry on the business.
(b) Change in ownership - A special tax stamp cannot be sold by the original purchaser and except as shown in the paragraph (a) above, cannot be transferred. A new stamp must be secured by the new owner when the business is sold, or by the partnership when a new partner is taken into the business.
12. REQUIREMENTS ON RETAIL DEALERS WHO SELL TO OTHER DEALERS
(a) Tax liability as wholesale dealer - A retail dealer becomes a wholesale dealer when he sells distilled spirits, wine or beer to another dealer. The tax on a wholesale dealer in beer (a dealer who sells only beer to dealers) is $500 for the tax year; the tax on a wholesale dealer in liquors (a dealer, other than a wholesale dealer in beer, who sells distilled spirits, wine or beer to another dealer) is also $500 for the tax year. A retail dealer does not incur liability as a wholesale dealer for sales of wine or beer to a limited retail dealer, provided all such sales are made at the retail dealer's place of business covered by his special tax stamp. Persons who incur liability as wholesale dealers in beer or wholesale dealers in liquors and who willfully fail to pay the tax as such, render themselves liable to a fine of not more than $5,000, imprisonment for not more than 2 years, or both.
(b) Tax liability as an importer - An importer is liable for tax as a wholesaler if he sells alcoholic beverages to other dealers (wholesalers or retailers).
(c) Permit requirements - a retail dealer may not sell any distilled spirits, wine or beer to another dealer for purposes of resale until he has obtained a wholesaler's basic permit under the Federal Alcohol Administration Act. Persons who violate any of the permit requirements of the Act become liable to penalties. Forms on which to apply for permit may be obtained from the District Director (Regulatory Enforcement), Bureau of Alcohol, Tobacco and Firearms for the region in which the dealer intends to conduct business.
13. SALES IN QUANTITIES OF 20 WINE GALLONS
Under law, a retail dealer who sells or offers for sale distilled spirits, wine or beer in quantities of 20 wine gallons (75.7 liters) or more to the same person at the same time is presumed to be engaged in business as a wholesale dealer. The seller may overcome this presumption only by furnishing satisfactory evidence that the sale was made to a person who is not a dealer.
14. LIABILITY FOR ADDITIONAL TAXES FOR "PEDDLING"
A retail dealer may sell liquors only at the place of business covered by his special tax stamp. If he sells at any other place, or if he delivers liquors for which he has not received a prior order at the place of business covered by his special tax stamp, he is required to pay special tax as a dealer at each place where he makes a sale or delivery.
A retail dealer who discontinues business during the tax year is not entitled to refund of tax for the unexpired portion of the tax year for which the special tax stamp was issued. However, the full amount of tax may be refunded if the dealer did not sell (or offer for sale) any liquors during the period covered by the stamp.
16. CLOSURES ON BOTTLES OF DISTILLED SPIRITS
Distilled spirits plants and importers are required to securely affix an anti-tampering closure or similar device to all bottles or other containers of distilled spirits. This would apply to bottles of whiskey, gin, rum, brandy, vodka, alcohol cordials containing distilled spirits, and all other similar liquors. The closure must be of a type that is broken when the container is opened, leaving a portion of the closure on the container. Products bottled before July 1, 1985 may bear an Internal Revenue strip seal; other products may be closed with a proprietary paper seal, metal roll-on, plastic pilfer-proof cap, lead foil capsule with zip tab, cello-seal with zip tab or other similar device. Retailers should report containers that are not so closed to any ATF regional or area office.
17. REFILLING, REUSING AND DISPOSING OF LIQUOR BOTTLES
(a) Refilling or reusing liquor bottles - Any retail dealer, or agent or employee of such dealer, who refills any liquor bottle with distilled spirits, or who reuses any liquor bottle by adding distilled spirits or any substance (including water) to the original contents is subject to a fine or not more than $1,000 or imprisonment for not more than 1 year, or both.
(b) Disposition of liquor bottles - The possession of used liquor bottles by any person other than the one who emptied the contents thereof is prohibited, except that this prohibition shall not (1) prevent the owner or occupant of any premises on which such bottles have been lawfully emptied from assembling the same on such premises (i) for delivery to a bottler or importer on specific request for such bottler or importer; (ii) the destruction, either on the premises on which the bottles are emptied or elsewhere, including disposition for purposes which will result in the bottles being rendered unusable as bottles; or (iii) in the case of unusual or distinctive bottles, for disposition as collector's items or for other purposes not involving the packaging of any products for sale; (2) prevent any person from possessing, offering for sale, or selling such unusual or distinctive bottles for purposes not involving the packaging of any product for sale; or (3) prevent any person from assembling used liquor bottles for the purpose of recycling or reclaiming the glass or other approved liquor bottle material. Any person possessing liquor bottles in violation of law or regulations is subject to fine of not more than $1,000, imprisonment for not more than 1 year, or both.
18. PROHIBITED PURCHASES OF DISTILLED SPIRITS
Retail dealers may purchase distilled spirits only from wholesale dealers who have paid the special tax as such or who are not required to pay special tax as wholesale dealers. Examples of those not required to pay this tax are: (a) proprietors of distilled spirits plants; (b) administrators, executors, or receivers in bankruptcy who are disposing of assets; and (c) dealers who are disposing of assets; and (d) dealers who are going out of business and selling their entire stock. A dealer who makes prohibited purchases of distilled spirits, subjects himself to a fine of not more than $1,000, imprisonment for not more than 1 year, or both.
Every retail dealer must either keep a record in book form showing the date and quantity of all distilled spirits, wine and beer received on his premises, and from whom received, or keep all invoices of, and bills for, all distilled spirits, wine, and beer received. Also, every retail dealer is required to keep a record of sales of distilled spirits, wine and beer in quantities of 20 wine gallons or more to the same person at the same time, which shows (a) the date of sale, (b) name and address of the purchases, (c) kind and quantity of liquors sold and (d) the serial numbers of any full cases of distilled spirits in the sale. A dealer who, with fraudulent intent, fails or refuses to keep the required records, is subject to a fine of not more than $10,000 and imprisonment for not more than 5 years, and a dealer who, without fraudulent intent, fails or refuses to keep the required records is subject to a fine of not more than $1,000, imprisonment for not more than 1 year, or both.
20. INSPECTION BY ALCOHOL, TOBACCO AND FIREARMS OFFICERS
A retail dealer's place of business and his stock of liquors are subject to inspection by Alcohol, Tobacco and Firearms officers having proper credentials. The ATF officers are authorized to examine records, collect special tax and penalties, and to accept tender of offers in compromise of liability arising from a violation of Federal liquor laws. The ATF officer will issue a receipt to a dealer if cash is received as a remittance in payment of special tax (including penalties and interest, if any), or for any type of remittance received if the dealer requests a receipt. If any retail dealer forcibly rescues any liquor or other property seized by an ATF officer, or attempt to do so, he is subject to a fine of either not more than $500 or double the value of the property rescued, whichever is greater, or imprisonment for not more than 2 years. Any retail dealer who forcibly obstructs or attempts to obstruct an ATF officer in the performance of his duties is subject to a fine of not more than $5,000 or imprisonment for not more than 3 years, or both, except that if the offense is committed only by threat of force, the person convicted thereof shall be fined not more than $3,000 or imprisoned not more than 1 year, or both.
21. OBTAINING ATF FORM 5630.5, ANNUAL SPECIAL TAX REGISTRATION AND RETURN
An ATF Form 5630.5 may be obtained from:
801-A West Eighth St.
Cincinnati, OH 45203-1690
Telephone - 513-684-2979
FAX - 513-684-3313
If you have any questions, you can call 1-800-937-8864.
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