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 | email@example.com
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.