Wine bond specifics

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trekkie951

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Hello all. First post here, and I'm surprised I even have to since this site is so full of good info.

Was looking for anybody who has the know how of wine bonds fresh in their minds to give me a little advice, answer a couple questions, and maybe suggest something I havent thought of yet!

Basically my main question is does the tax credit of $0.90 per gallon apply when figuring out the bond coverage? or only afterward when taxes actually must be paid?(im guessing the latter, but I just want clarification for peace of mind)

Also, a section of the federal application says this: "Taxpaid Wine Storage: Describe where and how any taxpaid wine will be stored on the premises and the means used to segregate and identify taxpaid wine from untaxpaid wine."

that underlined part makes me think I missed something. However, the only reason I can fathom I would have both taxpaid and unpaid is having wine produced from the previous year that wasn't sold yet. Is that correct?

I probably answered both my questions myself right there, but like I said this is more for peace of mind. With reading so many many many pages over the months its easy to get confused and wonder if i missed something amidst it all.

thank you, I love this forum. and look forward to talking to you folks in the future
 
Your best bet is to call the TTB and ask them for yourself. I really am trying to be helpful here, but this is a very complicated thing and I don't want to confuse you more. They really do want to see where the wine, both fermenting and finished will be stored. They will want pictures showing locks on the doors, etc.

Since you mention the .90 credit I am assuming you mean operating as a Farm Winery. Bonding is at a reduced rate over full commercial. The TTB can explain it to you.
 
I only speak from when I had a commercial winery. the bond is there to protect the government when you do not pay your taxes. If you do not pay taxes they use the bond money. We only required a $1000 bond one for the feds and one for the state. we were a farm winery.
with regards to paid and unpaid wine . for the feds once the wine is removed from the bonded area the tax is supposed to be paid. we just maintained an inventory of when wine was moved from the bonded area into the tasting room, which was adjacent to the bonded area. We had a display rack we kept full each day the tasting room was open and kept a daily inventory of the wine movement including that which was used for tasting. The state of Kansas required taxes be paid as soon as the wine was bottled regardless of when moved from the bonded area.
 
I assumed the worst. Even though my winery would be small enough to qualify for the rebate, I based my bonds on the total cost. But when shopping for bonds, my insurance/bond salesperson told me that the minimum they would do is $1000, but for the same price, I could get a $10,000 bond. So, for $400 worth of tax, I got $10K to back me up.
 
I am trying to sort this stuff out myself. It is complicated. I thought unpaid tax was for wine that you would export or ship, not sure. If you produce less than 150000 gal the tax is minimal and the bond amount is $1000. I thought it would be easier and cheaper to just write a check and let them hold it. I agree that a phone call would clear things up. Good luck
 
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