Alcohol Fuel Producer Bond - Distilled Spirits in All States
Table of Contents
Brief Summary
Most people shopping for this bond either do not need one at all or are about to buy the wrong amount. A small alcohol fuel plant that actually distills does not post a bond. Medium and large plants do, and the amount is set by how many proof gallons you will produce and receive in a year. Get the gallon figure right and the bond goes in with your TTB permit application.
The Alcohol and Tobacco Tax and Trade Bureau requires an operations bond on TTB F 5110.56 from medium and large alcohol fuel plants, and from small plants that receive spirits without bona fide production. The amount is tiered by annual production and receipts under 27 CFR 19.700. It is $1,000 for a small plant without production, $2,000 up to $50,000 for a medium plant, and $52,000 up to $200,000 for a large plant. A small plant that does its own production needs no bond.
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How to Apply for an Alcohol Fuel Producer Bond:
- Estimate the proof gallons of spirits you will produce and receive in a calendar year.
- Confirm your plant size. A small plant with bona fide production needs no bond.
- Work out the penal sum from the 27 CFR 19.700 schedule.
- Have the surety issue the bond on TTB F 5110.56, Distilled Spirits Bond.
- File the bond in duplicate with your TTB F 5110.74 permit application.
- Obtain a strengthening bond if your annual volume grows beyond what the bond covers.
Detailed Information About the All States Alcohol Fuel Producer Bond:
Do you need a bond at all
Alcohol fuel plants are permitted by TTB under 26 U.S.C. 5181 and 27 CFR part 19, subpart X. TTB sorts them by the proof gallons of spirits they produce and receive each calendar year. A small plant handles not more than 10,000 proof gallons. A medium plant handles more than 10,000 but not more than 500,000. A large plant handles more than 500,000.
TTB states plainly that a small plant applicant is not required to provide a bond unless it will not conduct bona fide production operations. Every medium and large plant must post one.
How much
27 CFR 19.700 sets the minimum penal sum.
- Small plant without production, receiving not more than 10,000 proof gallons: $1,000.
- Medium plant: $2,000 for more than 10,000 and up to 20,000 proof gallons, plus $1,000 for each additional 10,000 gallons or fraction over 20,000. The medium plant maximum is $50,000, which covers 500,000 proof gallons.
- Large plant: $52,000 for more than 500,000 and up to 510,000 proof gallons, plus $2,000 for each additional 10,000 gallons or fraction over 510,000. The large plant maximum is $200,000.
Some examples from the regulation: 20,000 to 30,000 gallons is $3,000, 90,000 to 100,000 is $10,000, and 740,000 to 750,000 is $100,000.
Spirits you produced and later recover by redistillation do not count toward the total. Spirits produced elsewhere and redistilled at your plant do count.
Filing
The bond goes on TTB F 5110.56, Distilled Spirits Bond, in duplicate, with the original permit application on TTB F 5110.74. TTB must approve the bond before it issues the permit. Applications can be filed through TTB's Permits Online system.
When volume grows
If production and receipts rise past what your bond covers, 27 CFR 19.700(d) requires a new bond or a strengthening bond under 19.167.
What the bond covers and who can write it
If the proprietor fails to pay a liability covered by the bond, TTB can collect from the proprietor, the surety or both. The surety must be on Treasury Circular 570. A proprietor may instead pledge acceptable negotiable securities with a face value at least equal to the penal sum.
Cost
You pay a premium based on the bond amount and the owners' credit and financial condition.
Eligibility and Requirements for an All States Alcohol Fuel Producer Bond:
- Surety listed on Treasury Circular 570, or pledged securities in lieu of a surety.
- Penal sum at least the minimum for your plant size and annual volume.
- TTB approval of the bond before the permit is issued.
- Proprietor name matching the permit application.
- Owner credit and financial review for underwriting.
All States Alcohol Fuel Producer Bond FAQs:
Only if it will receive spirits without conducting bona fide production. That bond is $1,000. A small plant that produces its own spirits needs no bond.
$2,000 for more than 10,000 and up to 20,000 proof gallons a year, plus $1,000 for each additional 10,000 gallons or fraction. The maximum is $50,000 at 500,000 proof gallons.
$52,000 for more than 500,000 and up to 510,000 proof gallons, plus $2,000 for each additional 10,000 gallons or fraction, up to a maximum of $200,000.
TTB F 5110.56, Distilled Spirits Bond, filed in duplicate with the TTB F 5110.74 permit application.
Not if you produced it originally. Spirits produced elsewhere and redistilled at your plant do count.
