The Internal Revenue Code (IRC) at 26 U.S.C.5001 imposes a Federal excise tax of $13.50 per proof gallon on distilled spirits produced or imported into the United States. However, the IRC at 26 U.S.C. 5111â5114, allows manufacturers of certain nonbeverage products that are unfit for beverage useâmedicines, medicinal preparations, food products, flavors, flavoring extracts, or perfumeâto claim drawback (refund) of all but $1.00 per proof gallon of the excise tax paid on the distilled spirits used in the production of such products. Under these IRC authorities, TTB has issued regulations governing nonbeverage product drawback claims, contained in 27 CFR part 17, which includes a requirement to keep source records supporting such claims. The required source records include information about distilled spirits received, gauge records, evidence of taxes paid, the date spirits were used, the quantity and kind used in each product, receipt and usage of other ingredients (to validate formula compliance), inventory records, records of recovered alcohol, the quantity of intermediate products transferred to other plants, the disposition of each nonbeverage product produced, and the purchasers (except for retail sales). These records are necessary to protect the revenue; the required records help prevent fraudulent claims and the diversion to beverage use of spirits on which nonbeverage product drawback is claimed.
There are no program changes associate with this information collection requirement. As for adjustments, due to a change in agency estimates, TTB is increasing the annual estimated burden associated with this information collection from 501 respondents to 530, from 501 responses to 530, and from 10,521 hours to 11,130. This increase is due to growth in the number of nonbeverage product manufacturers subject to this information collection requirement.
On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).
The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control number;
If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.
1513-0073 Supporting Statement (02-2018).docx
Manufacturers of Nonbeverage Products - Records to Support Claims for Drawback, TTB REC 5530/2