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Does Your Excise Reporting Pass the Quality Test?

Does Your Excise Reporting Pass the Quality Test?  

Excise Tax Returns are deceptively simple if your operations are.  While most of a DSP’s reporting requirements are denominated in proof gallons or wine gallons, TTB Form 5000.24sm only asks you for dollars and cents.  The form is so simple that other industries such as Tobacco, Cigars, Beer and Wine can use it, too.  Like your other reporting requirements, you can file Excise Tax Returns via US Mail or electronically via Pay.gov. 

In a very simple scenario, where a DSP withdraws ten cases of 80pf 750ml/6 product, you would just have to compute the excise tax due on the proof gallons therein: 

6 * 750ml = 4.5 Liters 
4.5 Liters / 3.785 = 1.1889 Wine Gallons @ 80pf 
1.1889 * (80/100) = 0.951 Proof Gallons per Case 
0.951 * 10 = 9.51 Proof Gallons contained in your ten cases that you withdrew 
9.51 * $2.70 = $25.68 

Having done that math, you can confidently enter $25.68 on line 9 of your Excise Tax Return and pay that amount for the quarter. 

However, things get much more complicated when you have multiple finished products at different proofs, and it’s not so obvious that you must also report and pay excise tax on several other types of withdrawals such as: 

  • Samples, whether bottled or pulled from tanks or container  
  • Tax-paid bulk spirit sold to businesses or institutions 
  • Losses, in excess of 1.5%, in your storage account 
  • Destroyed spirits, unless accompanied by a destruction record 

Luckily, DISTILL x 5 and Whiskey Systems fully automate the process of completing your Excise Tax Return with all the proper calculations and tax amounts, so you never have to worry about the outcome. 

If you’d like help with record-keeping or reporting requirements, we’re here to help. Reach out to us here to schedule time with our consultant and take your operations to the next level. 

Tyler Derheim is Fx5’s in-house consultant, using his expertise to help distilleries of all sizes make it easier to make great things. Tyler first entered the regulated beverage industry in 2010, when he started working harvest and crush at a midsize winery in Slovenia. After returning to California in 2017 he joined a startup DSP, with responsibilities for formulation, production, compliance, lab services, and more. In 18 months, he led the DSP from mason jars and buckets to tankers and trailers, then moved into a freelance consulting role, helping distilleries of all sizes with every aspect of production, operations, and compliance. A long-time Fx5 user, Tyler brings a wealth of experience unmatched in the industry.