“From Bond”, “In Bond”, “Bonded” … it can seem like the regulations are fixated on the concept. But what does it all mean? First off, some background. In the US, the Federal Government’s Excise Tax attaches to spirits the instant they come into existence (when vapor condenses to liquid). However, to allow proprietors flexibility in…
How to Set Up AlcoDens (LQ) Spirit Blending Calculator
What is AlcoDens LQ? AlcoDens LQ is a blending & gauging calculator made by Katmar Software. It has all the functionality of the calculators built into DISTILL x 5 and Whiskey Systems, plus additional functionality and support for spirits blends containing sugar. There is no business relationship between FIVE x 5 and Katmar Software; we just think…
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What is a Bond?
A bond is a special kind of insurance policy which has three parties, instead of two. If you think about home or car insurance, you (the policyholder) pay the insurance company a premium, and in the event of a financial loss, the insurance company makes you whole. A bond (or surety bond) is also an…
Bottled Spirits Usually Can’t Be Transferred “In-Bond”
Many distilleries are involved in sending/receiving Bottled Spirit via Transfer in Bond. What they may not realize is that they’re running afoul of TTB regulations which have changed multiple times in recent years. This post will summarize the past and current regulations. The Past Prior to 2018, bottled spirits could not be transferred in bond,…
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Controlled Groups and 100,000 PGs/yr
Most distillers are aware of the Craft Producer tax break on the first 100,000 PGs/yr of product removed in a calendar year. When the tax break was first announced in 2018, there were some loopholes that allowed producers to sometimes take advantage of multiple 100,000 PGs/yr allotments. Those loopholes have largely been closed through subsequent…
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COGS Part II – Overhead Allocation under GAAP
For some important background, make sure you’ve read the first blog post in this series, COGS – Why You Should Care and How to Track It. This post’s intended audience is distillery management and accountants/CFOs/controllers. First and foremost, we should define the goal of this exercise. What we’re aiming for is GAAP-compliant books that can…
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