Surety Bond Encyclopedia

Distilled Spirits Bond - Federal Export Bond in All States

Brief Summary

If you are an exporter pulling distilled spirits out of someone else's bonded plant without paying tax, this bond is what lets the spirits leave untaxed. TTB sizes it to the tax on the spirits still unaccounted for, never below $1,000 and never above $200,000, and a continuing bond covers withdrawal after withdrawal instead of one bond per shipment.

Under 26 U.S.C. 5175 and 27 CFR Part 28, an exporter other than the plant proprietor who withdraws distilled spirits from bonded premises without payment of tax for exportation must furnish a bond to TTB. It is either a specific bond on TTB Form 5100.25 for one lot or a continuing bond on TTB Form 5100.30. The penal sum follows the tax on the spirits involved, with a $1,000 minimum and a $200,000 maximum.

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How to Apply for a Distilled Spirits Bond:

Confirm you are an exporter other than the proprietor of the bonded premises. A proprietor's own operations bond covers its exports.
Check the 27 CFR 28.51(b) exemption if your tax liability is $50,000 or less and you file on a deferred basis.
Choose TTB Form 5100.25 for a single lot or TTB Form 5100.30 for continuing withdrawals.
Calculate the penal sum from the tax on the spirits involved, between $1,000 and $200,000.
Have the bond executed by a Circular 570 surety and file it in duplicate with TTB's Office of Permitting and Taxation in Cincinnati.
File evidence of exportation with TTB promptly so the bond is credited.

Detailed Information About the All States Distilled Spirits Bond:

Distillers usually do not file this one

The most common mistake is a distilled spirits plant buying a separate export bond. 26 U.S.C. 5175(b) says that when the proprietor of the plant withdraws spirits for export, the proprietor's own bond covers the exportation. 27 CFR 28.58 puts the same rule in the regulations: the approved operations or unit bond must cover tax free withdrawals made on the proprietor's notice. The export bonds in 27 CFR 28.61 and 28.62 are filed by an exporter who is not the proprietor of the bonded premises.

Specific or continuing

**TTB Form 5100.25, specific bond (27 CFR 28.61).** Covers one lot. The penal sum may not be less than the tax on the quantity of spirits or wine being withdrawn.
**TTB Form 5100.30, continuing bond (27 CFR 28.62).** Covers withdrawals from time to time. The penal sum must cover the tax on the largest quantity that may remain unaccounted for at any one time.

Both forms carry the same floor and ceiling: never less than $1,000 and never more than $200,000. Spirits stay unaccounted for until evidence of exportation, use, deposit, transfer or loss in transit is filed with TTB, so slow paperwork ties up bond capacity.

Small taxpayer exemption

27 CFR 28.51(b) excuses a taxpayer from filing the bond for spirits for nonindustrial use when the taxpayer reasonably expects to be liable for not more than $50,000 in taxes in the current calendar year, was liable for not more than $50,000 in the prior calendar year, and pays tax on a deferred basis with semimonthly, quarterly or annual returns.

Surety and filing

The surety must hold a certificate of authority listed in Treasury Department Circular 570 (27 CFR 28.52). TTB F 5100.30 also allows collateral, such as Treasury notes or bonds, in place of a corporate surety. The form is filed in duplicate with the Office of Permitting and Taxation, Alcohol and Tobacco Tax and Trade Bureau, 550 Main St., Ste. 8970, Cincinnati, OH 45202-3222.

Manufacturing bonded warehouses use different forms

A manufacturing bonded warehouse proprietor withdrawing spirits tax free uses TTB Form 5100.12 for a specific lot or Form 5110.67 for continuing withdrawals (27 CFR 28.63 and 28.64), with the same $1,000 minimum and $200,000 maximum.

Eligibility and Requirements for a All States Distilled Spirits Bond:

Full legal names of the principal and surety in the bond heading.
Corporate principals list their state of organization and principal office.
Surety holding a certificate of authority under Treasury Department Circular 570, or approved collateral.
Power of attorney or board resolution attached when an agent signs.
Penal sum no lower than $1,000 and no higher than $200,000.

All States Distilled Spirits Bond FAQs:

We run a distilled spirits plant. Do we need a separate export bond?

Generally no. 26 U.S.C. 5175(b) and 27 CFR 28.58 provide that the proprietor's operations or unit bond covers spirits the proprietor withdraws tax free for export. The export bonds on Forms 5100.25 and 5100.30 are filed by exporters who are not the proprietor.

How is the bond amount set?

For a specific bond on Form 5100.25, the penal sum is at least the tax on the quantity withdrawn. For a continuing bond on Form 5100.30, it must cover the tax on the most spirits and wine that may be unaccounted for at any one time. Either way the bond is never less than $1,000 or more than $200,000.

When are the spirits accounted for?

Under 27 CFR 28.62, spirits withdrawn for exportation remain unaccounted for until evidence of exportation, use, deposit, transfer or loss in transit is filed with the appropriate TTB officer. Until then they count against the bond.

Can a small exporter skip the bond?

27 CFR 28.51(b) exempts a taxpayer exporting spirits for nonindustrial use who reasonably expects no more than $50,000 in taxes this calendar year, had no more than $50,000 last year, and pays tax on a deferred basis with semimonthly, quarterly or annual returns.

How does a continuing bond end?

Under 27 CFR 28.71, a continuing bond can be terminated as to future withdrawals on application of the surety, on approval of a superseding bond, or on the principal's written notice that withdrawals have been discontinued.