Artisan Spirit: Summer 2015

Page 60

DSP Federal Reporting

This is the second in a series of articles providing a focused look at the Federal regulatory requirements for filing reports of operations and excise tax returns and payments.

I

n the last article, the TTB Production monthly report was presented. The current topic is the Storage report,

which reflects a monthly summary of bulk quantities of distilled spirits products entering, leaving and remaining in

MONTHLY REPORT of STORAGE OPERATIONS TTB FORM 5110.11

the Storage account. After spirits are declared as “produced,” or, when spirits are received from another plant, or, received from Customs custody, they are generally accounted for on the storage report. The first item to note in respect to this report is that a DSP

WRITTEN BY JIM MCCOY

may be required to file up to four storage reports per month. Four reports? Take a look at the report form in the top center. In the box titled “Report Covers” – you will see four check boxes, labeled “Domestic Spirits and All Wines,” “Imported Spirits,” “Puerto Rican Spirits,” and “Virgin Island Spirits.” Most artisan distillers, fortunately, will be filing a single Storage report, as they produce and handle only

“domestic” spirits (distilled in the USA). However, should a DSP decide to purchase whisky, neutral spirits, rum, tequila or other product distilled outside the USA, a Storage report would be used to account for imported spirits. Due to tax issues attendant to rum, Puerto Rico and Virgin Islands spirits are each also reported separately.

MONTHLY REPORT OF STORAGE OPERATIONS, TTB FORM 5110.11 The Monthly Report of Storage Operations, TTB F 5110.11,

mingling or processing are normal, and the difference between

reflects the quantities of SPIRITS RECEIVED INTO THE STORAGE

the filled quantity and the quantity dumped is recorded and

ACCOUNT on LINE 2, under each of the class and type headings

reported as a loss in the DSP records.

in columns (b) through (l). The entry on LINE 1 in each column,

ON HAND FIRST OF MONTH, would reflect the inventory of spirits that was reported on LINE 23,

ON HAND END OF MONTH, from

the previous monthly Storage report.

While Line 2 captures the total of spirits received into the

IMPORTS (and PR or VI spirits) BULK SPIRITS are returned to the

account for the month, note for that LINE 3 is used, and if

DSP they are shown on LINE 4. A simple basic rule found in 27

The Storage report is a basic account style report, where the

CFR 19.351(c) is that bulk spirits cannot be transferred back

starting inventory, plus additions, is compared to reductions

into Storage from the Processing account. Further, spirits from

TOTAL figures on LINE 6 for the

the Processing account at another plant cannot be transferred

upper portion of the report must match the Total figures on LINE

in bond and deposited into the Storage account. This basic rule

24 for the lower portion of the report. Losses on LINE 22 and

is meant to ensure that the products entering storage are kept

gains which would be reported on LINE 5 would balance the

within their already determined class and type while in Storage.

report. Typically, a bulk accounting for liquids, especially when

Products of different class or type may not be mingled in the

volume is temperature sensitive, will result in a net gain or loss

Storage account, also for this reason.

plus the ending inventory. The

during a given period when products are being entered into and removed from tanks or smaller bulk containers.

BULK WITHDRAWAL OF TAXPAID ALCOHOL FROM STORAGE would be reported on LINE 7; this is generally a rare occurrence

Whisky, rum and brandy each can be aged in oak barrels,

for a small distiller. Such a withdrawal would likely be for

sometimes for years. Loss due to evaporation or leaks, and losses

shipment to a flavoring company for non-beverage use. LINES

during the emptying of the barrels when they are dumped for

8, 9 AND 13 are unlikely to be used. LINE 10 might be for a

60 WWW.ARTISANSPIRITMAG.COM


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