**Updated May 20, 2020**
On May 18, 2020, the TTB published new guidelines to help answer questions about the production of hand sanitizer that included information on reporting tax-free withdrawals under the CARES Act. For more information on reporting withdrawals in accordance with the CARES Act, please see Reports: CARES Act Reporting (Read Time: 1 min)
To view TTB Public Guidance TTB G 2020-4, please click here: https://www.ttb.gov/public-guidance/ttb-pg-2020-4
Public Guidance TTB G-2020-4 states, "Since the exemptions authorized under TTB’s prior guidance are separate from the CARES Act, distilled spirits permittees can continue to operate under those exemptions even if they also conduct separate operations under the CARES Act... TTB is extending its approval of these exemptions through December 31, 2020."
To view the TTB's response on the Production of Hand Sanitizer to Address the COVID-19 Pandemic, please click here: https://www.ttb.gov/public-guidance/ttb-pg-2020-1a
Disclaimer: This is not legal advice and you should always speak with your TTB Agent for explicit approval.
Key Takeaways from TTB G-2020-1a:
- Any DSPs producing hand sanitizer must denature the spirit according to FDA guidelines.
- Nonbeverage products made with ethanol are not subject to Federal Excise Tax (FET). But again, must be denatured first.
- TTB is exempting DSPs from requirements to request approval to receive denatured or un-denatured spirits in bond from another DSP and requirements to obtain additional bond coverage.
- Both denatured and un-denatured spirits may be withdrawn free of tax to state and local governments, for nonbeverage purposes, including hand sanitizer. Spirit should still be denatured according to FDA guidelines.
- Both denatured and un-denatured spirits may be withdrawn free of tax to hospitals, blood banks, sanitariums, labs, non-profit clinics, and qualifying educational institutions., for nonbeverage purposes, including hand sanitizer. Spirit should still be denatured according to FDA guidelines.
- See our Support Library article for Denaturing Sprits in your Dx5 system
Use your best judgement when deciding whether or not this is something you want to get involved in and speak with your TTB Agent if you have any specific questions.
Hi team - when it says "Both denatured and un-denatured spirits may be withdrawn free of tax to state and local governments, for nonbeverage purposes, including hand sanitizer." should we use the "Withdrawn Free of Tax" designation in the dropdown menu under Withdrawal Reason in Processing for spirits which were not denatured and still used for hand sanitizer? Obviously we would use "Used for Denaturation" for spirit we denatured for the same purpose. - thanks
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