The U.S. Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau (TTB) today released guidance concerning the tax-free withdrawal of distilled spirits and products containing distilled spirits for hand sanitizer purposes, in response to the coronavirus (COVID-19) pandemic.
Prior TTB guidance relieved distilled spirits permittees of certain federal excise tax law requirements through June 30, 2020, in an effort to facilitate hand sanitizer production. Congress then provided additional flexibilities for hand sanitizer production for all of calendar year 2020 under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (Pub. L. No. 116-136). The CARES Act allows distilled spirits plants to withdraw distilled spirits tax-free for use in or contained in hand sanitizer that is produced and distributed in a manner consistent with FDA guidance, and not limited to hospitals and certain other designated producers as required by prior law and TTB guidance.
Today’s TTB release clarifies that because the exemptions authorized under TTB’s prior guidance are separate from the CARES Act, distilled spirits permittees can continue to operate under those TTB exemptions even if they also conduct separate operations under the CARES Act. Today’s release states that TTB is extending its approval of these exemptions through December 31, 2020.
The TTB guidance also includes a set of “questions and answers” about tax-free withdrawals of distilled spirits and hand sanitizer under the CARES Act and TTB’s exemptions.
For more information, contact a tax professional with KPMG’s Excise Tax Practice group:
Taylor Cortright | +1 (202) 533 6188 | firstname.lastname@example.org
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