Compliance Tips
Mandatory Label Information
Alcohol Content
A statement of alcohol content in percent by volume appears on most labels. As an alternative some bottlers prefer to label wine with an alcohol content between 7 and 14 percent as "Table Wine" or "Light Wine."
Appellation of Origin
Appellation of origin is simply another name for the place in which the dominant grapes used in the wine are grown. It can be the name of a country, state, county or geographic region called a viticultural area. A country, state or county appellation on the label means that at least 75 percent of the wine is produced from grapes grown in the place named.
Brand
The brand name is a name used by the bottler to identify the product. Any brand name is acceptable if it does not mislead the consumer.
Country of Origin
A country of origin statement is required on all imported wines. For example, "Product of (insert name of country)".
Declaration of Sulfites
Required on any wine intended for interstate commerce that contains 10 or more parts per million (ppm) sulfur dioxide. Not required for wines only sold in intrastate commerce.
Estate Bottled
"Estate Bottled" means that 100 percent of the wine came from grapes grown on land owned or controlled by the winery, which must be located in a viticultural area. The winery must crush and ferment the grapes, finish, age, process and bottle the wine on their premises.
Health Warning Statement
Required on all alcoholic beverages containing .5% or more alcohol by volume. "GOVERNMENT WARNING" must appear in capital letters and bold type. The remainder of the statement may not appear in bold type. The statement reads as follows:
GOVERNMENT WARNING:
(1) According to the Surgeon General, women should not drink alcoholic beverages during pregnancy because of the risk of birth defects. (2) Consumption of alcoholic beverages impairs your ability to drive a car or operate machinery, and may cause health problems.
Name and Address
The name or trade name and address(es) of the bottler or importer must appear on the label. Domestic wines will state "Bottled By:" followed by the name and address of the bottler. Imported wines will state "Imported By:" followed by the name and address of the importer.
Net Contents
The net contents of wine are stated in the metric system of measure and is the amount of product in the container.
Other Designations
Wine labels are not required to bear a varietal designation. Other designations may be used to identify the wine. Examples are Red Wine, White Wine, Table Wine. Designations such as Chablis, Chianti, or Burgundy include wines similar to those originally made in the geographic regions indicated by those names but now produced elsewhere. Such wines must include an appellation of origin to indicate the true place of origin. For example, "California Burgundy." Some wines are designated with distinctive names, which is permissible only on specific wines from a particular place or region within the country of origin, for example, Asti Spumanti from Italy and Bordeaux from France.
Varietal Designations
Varietal designations are the names of the dominant grapes used in the wine. Cabernet Sauvignon, Chardonnay, Zinfandel, and Merlot are examples of grape varieties. A varietal designation on the label requires an appellation of origin and means that at least 75 percent of the grapes used to make the wine are that variety. (Except "Vitis labrusca" grapes such as Concord which require 51%.)
Vintage Date
A vintage date on the label indicates that 85 percent or more of the wine is produced from grapes grown in that year. If a vintage date is shown on the label, an appellation of origin, smaller than a country, must also be shown.
Viticultural Area
A U.S. viticultural area is a defined grape-growing region with soil, climate, history and geographic features, which set it apart from the surrounding areas. A viticultural area appellation on the label indicates that 85 percent or more of the wine is produced from grapes grown in the particular area.
Definitions
Certificate of Authority
A corporation or limited liability company is domestic to the state where it was formed. However, if you decide to open up an office in another state, with the express intent to transact business there, you might be required to obtain a Certificate of Authority. Without it, your business may be subject to fines and legal action by the state in which you would be illegally transacting business. In addition, you may forfeit many of your legal rights if you are not qualified to do business in that other state. If a Certificate of Authority is filed, the corporation or LLC is subject to taxes and annual report fees in both the state of formation and any states where the corporation or LLC is qualified. In some states, Certificates of Authority are also known as Foreign Qualifications.
Unimeric Codes
Unique codes (“universal numeric”) assigned by the Distilled Spirits Council of the United States to both wine and distilled spirits. A number of states require that these codes be supplied at the same time a product is registered for sale in the state. Required by Connecticut and Kansas UPC Codes A ten-digit code which consists of a five-digit manufacture’s code—which must be obtained from the Uniform Product Code Council—and a unique five-digit code assigned by the supplier to each brand, type and size in his product line. This is shown as a scan able bar code and is instrumental to retailers for pricing and inventory control purposes Control State A state in which the state liquor regulatory agency is in the business of wholesaling And or reselling alcoholic beverages at retail. The degree to which the regulatory agency is involved will vary by state.
Distributor/ Wholesaler
Entity licensed in a state to purchase product from suppliers and or importers for resale to retail licenses. In many cases, principles must be residents of the state issuing the license in order to obtain the license.
Surety Bond
A surety bond is a contract among at least three parties:
- The principal - the primary party who will be performing a contractual obligation
- The obligee - the party who is the recipient of the obligation, and
- The surety - who ensures that the principal's obligations will be performed. A surety is a person who agrees to be responsible for the debt or obligation of another.
Through this agreement, the surety agrees to uphold—for the benefit of the obligee—the contractual promises (obligations) made by the principal if the principal fails to uphold its promises to the obligee. The contract is formed so as to induce the obligee to contract with the principal, i.e., to demonstrate the credibility of the principal and guarantee performance and completion per the terms of the agreement. Contract bonds guarantee a specific contract. Examples include performance, bid, supply, maintenance and subdivision bonds. Commercial bonds guarantee per the terms of the bond form. Examples include license & permit, union bonds, etc.
Alternation of Premises
Multiple operations alternating the equipment and premises operated by the same person (i.e., Bonded Wine Premises/DSP/Brewery/Taxpaid Wine Bottling House).
Alternation of Proprietors
Multiple persons alternating the use of/sharing bonded premises and equipment.
Consent of Surety
A document that extends the terms of a bond.
Distilling Material
Any fermented or other alcoholic substance capable of, or intended for use in, the original distillation or other original processing of spirits.
Distilled Spirits Plant (DSP)
An establishment qualified under part 19 of 27 CFR for producing, warehousing, or processing of distilled spirits (including denatured spirits), or manufacturing of articles. An establishment qualified under part 19 for distilling, warehousing, processing or any combination of these. Also required for alcohol reduction in wine.
Extension of Premises
Realignment of the bonded premises, to place more of the property on bond.
In Bond
- For Wine
When used with respect to wine or spirits, “in bond'' refers to wine or spirits possessed under bond to secure the payment of the taxes imposed by 26 U.S.C. Chapter 51, and on which such taxes have not been determined. The term includes any wine or spirits on the bonded wine premises or a distilled spirits plant, or in transit between bonded premises (including in the case of wine, bonded wine premises). Additionally, the term refers to wine withdrawn without payment of tax under 26 U.S.C. 5362 and to spirits withdrawn without payment of tax under 26 U.S.C. 5214 (a)(5) or (a)(13) with respect to which relief from liability has not yet occurred. - For Distilled Spirits
When used with respect to spirits, denatured spirits, articles, or wine refers to spirits, denatured spirits, articles, or wine possessed under bond to secure the payment of the taxes imposed by 26 U.S.C. Chapter 51, and on which such taxes have not been determined. The term includes such spirits, denatured spirits, articles, or wine on the bonded premises of a distilled spirits plant, such spirits, denatured spirits, or wines in transit between bonded premises (including, in the case of wine, bonded wine cellar premises). Additionally, the term refers to spirits in transit from Customs custody to bonded premises, and spirits withdrawn without payment of tax under 26 U.S.C. 5214, and with respect to which relief from liability has not occurred under the provisions of 26 U.S.C. 5005(e)(2). - For Tobacco
The status of tobacco products and cigarette papers and tubes, which come within the coverage of a bond securing the payment of internal revenue taxes imposed by 26 U.S.C. 5701 or 7652, and in respect to which such taxes have not been determined as provided by regulations in this chapter, including (a) such articles in a factory, (b) such articles removed, transferred, or released, pursuant to 26 U.S.C. 5704, and with respect to which relief from the tax liability has not occurred, and (c) such articles on which the tax has been determined, or with respect to which relief from the tax liability has occurred, which have been returned to the coverage of a bond.
Processor
Except as otherwise provided under 26 U.S.C. 5002(a)(6), any person qualified under this part who manufactures, mixes, bottles, or otherwise processes distilled spirits or denatured spirits, or manufactures any article.
Proof
The ethyl alcohol content of a liquid at 60° Fahrenheit (F), stated as twice the percent of ethyl alcohol by volume.
Proof Gallon
A gallon of liquid at 60°F, which contains 50 percent by volume of ethyl alcohol having a specific gravity of 0.7939 at 60°F, referred to water at 60°F, as unity, or the alcoholic equivalent.
Transfer in Bond
The removal of spirits, denatured spirits, and wines from one bonded premises to another bonded premises.
Unmerchantable
Wine which has been taxpaid, removed from bonded wine premises, and subsequently returned to a bonded wine premises under the provisions of 27 CFR 24.295 for the purpose of reconditioning, reformulation, or destruction.
Tax Tips
The federal government applies wine tax rates depending on the alcohol percentage, type of wine, and size of the winery. Check here for credit eligibility rates and winery tax amounts.
Federal Excise Tax Rates
$1.07 per gallon for wine 14% Alcohol by Volume or less
$1.57 per gallon for wine 14.1% to 21% Alcohol By Volume
$3.40 per gallon for Sparkling Wine
Small Producer Tax Credit (Federal)
Wineries producing (fermenting) less than 150,999 gallons per year are eligible for a tax credit of $ 0.90 per gallon for the first 100,000 gallons of wine removed from bond during the year. Wineries producing 151,000 to 250,000 gallons per year are eligible for $0.89 to $0.01 credit per gallon of the first 100,000 gallons removed.
California Winegrower Taxes- Filed monthly or quarterly
$0.20 per gallon for still wine and $0.30 for sparkling wine.
Subject to a $50.00 or 10% penalty (whichever is greater) if filed late