and words in the masculine shall inIclude the feminine. The terms "includes" and "including" do not exclude things not enumerated which are in the same general class.

AFT officer. An officer or employee of the Bureau of Alcohol, Tobacco and Firearms (ATF) authorized to perform any function relating to the administration or enforcement of this subpart.

Condenser. Any apparatus capable of being used when connected with a still, for condensing or liquefying alcoholic or spirituous vapors, but shall not include condensers to be used with laboratory stills or stills used for distilling water or other nonalcoholic materials where the cubic distilling capacity is one gallon or less.

Director. The Director, Bureau of Alcohol, Tobacco and Firearms, the Department of the Treasury, Washington, DC.

Distilling spirits or spirits. That substance known as ethyl alcohol, ethanol, or spirits of wine in any form (including all dilutions and mixtures thereof, from whatever source or by whatever process produced).

Distilling. The conduct by any person of operations that constitute, as defined by 26 U.S.C. 5002, operations as a distiller. Such operations include: (a) The original manufacture of distilled spirits from mash, wort, or wash, or any materials suitable for the production of spirits; (b) the redistillation of spirits in the course of original manufacture; (c) the redistillation of spirits, or products containing spirits; (d) the distillation, redistillation, or recovery of spirits, denatured spirits, or articles containing spirits or denatured spirits; and (e) the redistillation or recovery of tax-free spirits.

Distilling apparatus. A still or condenser, as defined in this section, and any other apparatus to be used for the purpose of distilling.

Executed under the penalties of perjury. Signed with the prescribed declaration under the penalties of perjury as provided on or with respect to any document prescribed under this subpart or, where no form of declaration is prescribed, with the declaration: "I declare under the penalties of perjury that this (insert type of document), including the documents sub

mitted in support thereof, has been examined by me and, to best of my knowledge and belief, is true, correct and complete."

Manufacturer of stills. Any person who manufactures any still or condenser, as defined in this section, or any other apparatus to be used for the purpose of distilling. The term includes a person furnishing separate parts of a complete still or condenser, of any kind, to a person who assembles same into a still or condenser for distilling and a person who procures materials or apparatus and converts same into a still or condenser for distilling.

Person. An individual, a trust, estate, partnership, association, company, or corporation.

Regional director (compliance). The principal ATF regional official responsible for administering regulations in this subpart.

Still. Any apparatus capable of being used for separating alcoholic or spirituous vapors, or spiritous solutions, or spirits, from spirituous solutions or mixtures, but shall not include stills used for laboratory purposes or stills used for distilling water or other nonalcoholic materials where the cubic distilling capacity is one gallon or less.

This chapter. Title 27, Code of Federal Regulations, Chapter I (27 CFR Chapter I).

United States. The several states and the District of Columbia.

U.S.C. The United States Code. [T.D. ATF-207, 50 FR 23682, June 5, 1985; 50 FR 28572, July 15, 1985]

§ 170.47 Notice requirement; manufacture of stills.

(a) General. When required by letter issued by the regional director (compliance) and until notified to the contrary by the regional director (compliance), every person who manufactures any still, boiler (double or pot still), condenser, or other apparatus to be used for the purpose of distilling shall give written notice before the still or distilling apparatus is removed from the place of manufacture.

(b) Preparation. The notice will be prepared in letter form, executed under the penalties of perjury, and show the following information:

(1) The name and address of the manufacturer;

(2) The name and complete address of the person by whom the apparatus is to be used, and of any other person for, by, or through whom the apparatus is ordered or disposed of;

(3) The distilling purpose for which the apparatus is to be used (distillation of spirits, redistillation of spirits or recovery of spirits, including denatured spirits and articles containing spirits or denatured spirits);

(4) The manufacturer's number of the apparatus;

serial

(5) The type and kind of apparatus; (6) The distilling capacity of the apparatus; and

(7) The date the apparatus is to be removed from the place of manufacture.

(c) Filing. The notice will be filed in accordance with the instructions in the letter of the regional director (compliance). A copy of the notice will be retained at the place of manufacture as provided by § 170.59.

(Approved by the Office of Management and Budget under control number 15120341)

(Sec. 843, Pub. L. 98-369, 98 Stat. 818 (26 U.S.C. 5101))

[T.D. ATF-207, 50 FR 23682, June 5, 1985; 50 FR 28572, July 15, 1985]

§ 170.49 Notice requirement; setup of still.

(a) General. When required by letter issued by the regional director (compliance), no still, boiler (double or pot still), condenser, or other distilling apparatus may be set up without the manufacturer of the still or distilling apparatus first giving written notice of that purpose.

(b) Preparation. The notice will be prepared by the manufacturer in letter form, executed under the penalties of perjury, and will contain the information specified in the letter of the regional director (compliance).

(c) Filing. The notice will be filed in accordance with the instructions in the letter of the regional director (compliance). A copy of the notice will be retained at the manufacturer's place of business as provided by § 170.59.

(Approved by the Office of Management and Budget under control number 15120341)

(Sec. 843, Pub. L. 98-369, 98 Stat. 818 (26 U.S.C. 5101))

§ 170.51 Failure to give notice; penalty.

Failure to give notice of manufacture of still or notice of setup of still when required to do so is punishable by a fine of not more than $1,000 or imprisonment for not more than one year, or both, and any still, boiler (double or pot still), condenser, or other distilling apparatus to be used for the purpose of distilling which is removed or set up without the required notice having been given is forfeitable to the Government.

(Sec. 201, Pub. L. 85-859, 72 Stat. 1405, as amended, 1412, as amended (26 U.S.C. 5615, 5687))

§ 170.53 Identification of distilling apparatus.

(a) General. Each still or condenser manufactured will be identified by the manufacturer as follows:

(1) Name of manufacturer.

(2) Address of manufacturer.

(3) Manufacturer's serial number for the apparatus.

(b) Marking requirements. The apparatus will be identified in a legible and durable manner. The required identification marks will be placed on the apparatus in a location where they will not be obscured or concealed.

§ 170.55 Registry of stills and distilling apparatus.

(a) General. Every person having possession, custody, or control of any still or distilling apparatus set up shall, immediately on its being set up, register the still or distilling apparatus, except that a still or distilling apparatus not used or intended for use in the distillation, redistillation, or recovery of distilled spirits is not required to be registered. Registration may be accomplished by describing the still or distilling apparatus on the registration or permit application prescribed in this chapter for qualification under 26 U.S.C. Chapter 51 or, if qualification is not required under 26 U.S.C. Chapter 51, on a letter application, and filing

the application with the regional director (compliance) of the region in which the still or distilling apparatus is located. Approval of the application by the regional director (compliance) will constitute registration of the still or distilling apparatus.

(b) When still is set up. A still will be regarded as set up and subject to registry when it is in position over a furnace, or connected with a boiler so that heat may be applied, irrespective of whether a condenser is in position. This rule is intended merely as an illustration and should not be construed as covering all types of stills or condensers requiring registration.

(c) Change in location or ownership. Where any distilling apparatus registered under this section is to be removed to another location, sold or otherwise disposed of, the registrant shall, prior to the removal or disposition, file a letter notice with the regional director (compliance) of the region in which the apparatus is located. The letter notice will show the intended method of disposition (sale, destruction, or othewise), the name and complete address of the person to whom disposition will be made, and the purpose for which the apparatus will be used. After removal, sale, or other disposal, the person having possession, custody, or control of any distilling apparatus intended for use in distilling shall immediately register the still or distilling apparatus on its being set up or, if already set up, immediately on obtaining possession, custody, or control. The registrant shall also comply with the procedures prescribed in this chapter for amendment of the registration or permit application.

(Approved by the Office of Management and Budget under control number 15120341)

(Sec. 201, Pub. L. 85-859, 72 Stat. 1355, as amended (26 U.S.C. 5179))

[T.D. ATF-207, 50 FR 23682, June 5, 1985; 50 FR 28572, July 15, 1985; 50 FR 30821, July 30, 1985]

§ 170.57 Failure to register; penalty.

Any person having possession, custody, or control of any still or distilling apparatus set up who fails to register the still or distilling apparatus is sub

A copy of each notice of manufacture, or set up, of still required under the provisions of § 170.47, or 170.49, shall be maintained, in chronological order, by the manufacturer at the premises where the still or distilling apparatus is manufactured. In addition, each manufacturer or vendor of stills shall maintain at their premises a record showing all stills and distilling apparatus (including those to be used for purposes other than distilling) manufactured, received, removed, or otherwise disposed of. The record will also show the name and address of the purchaser and the purpose for which each apparatus is to be used. Any commercial document on which all the required information has been recorded may be used for the record. The records will be kept available for a period of three years for inspection by ATF officers.

(Approved by the Office of Management and Budget under control number 15120341)

Subpart D-Floor Stocks Tax on Distilled Spirits and Imported Perfumes Held for Sale on October 1, 1985

AUTHORITY: Section 27, Pub. L. 98-369, 98 Stat. 507, unless otherwise noted.

SOURCE: T.D. ATF-212, 50 FR 34118, Aug. 23, 1985, unless otherwise noted.

§ 170.60 OMB control number.

The recordkeeping and reporting requirements of this subpart have been approved by the Office of Management and Budget under control number 1512-0473.

§ 170.61 Scope of subpart.

The regulations in this subpart relate to the floor stocks tax imposed by Pub. L. 98-369 on all taxpaid or tax

determined distilled spirts held for sale on October 1, 1985, including imported perfumes containing distilled spirits.

§ 170.62 Meaning of terms.

When used in this subpart, terms shall have the meaning ascribed below:

(a) Bulk distilled spirits. The term "bulk distilled spirits" means distilled spirits in a container having a capacity in excess of one gallon.

(b) Controlled group. A related group of dealers under common control. Controlled groups include:

(1) Controlled group of corporations. The term "controlled group of corporations" has the meaning given to that term by 26 U.S.C. 1563(a), except that the phrase "more than 50% percent" shall be substituted for the phrase "at least 80 percent" each time it appears in that subsection. Controlled groups of corporations include, but are not limited to:

controlled

(i) Parent-subsidiary groups as defined in 26 CFR 1.15631(a)(2).

(ii) Brother-sister controlled groups as defined in 26 CFR 1.1563-1(a)(3). (iii) Combined groups as defined in 26 CFR 1.1563-1(a)(4).

(2) Nonincorporated dealers under common control. Dealers are considered to be part of a controlled group when the group would qualify as a controlled group of corporations under the definition in paragraph (b)(1) of this section except that one or more of the dealers is not incorporated.

(3) "Control" States or political subdivisions. Each State or political subdivision of a State that operates as a dealer in distilled spirits, whether as a retailer, wholesaler, or both, shall be regarded as a controlled group.

(c) Dealer. Any person who sells, or offers for sale, any distilled spirits.

(d) Gallon or Wine gallon. The liquid measure equivalent to the volume of 231 cubic inches.

(e) Industry Member. For purposes of the floor stocks tax on imported perfumes, this term shall include importers, wholesale dealers or other persons holding for sale imported perfumes containing distilled spirits. This

term shall not include retail establishments.

(f) Person. This term shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation. It also includes any State or political subdivision thereof, or any agency or instrumentality of a State or political subdivision thereof.

(g) Proof gallon. A gallon of liquid at 60 degrees Fahrenheit which contains 50 percent by volume of ethyl alcohol having a specific gravity of 0.7939 at 60 degrees Fahrenheit referred to water at 60 degrees Fahrenheit as unity, or the alcoholic equivalent thereof.

(h) Retail dealer. Any dealer who sells, or offers for sale, distilled spirits to any person other than a dealer.

(i) Wholesale dealer. Any dealer who sells, or offers for sale, distilled spirits to another dealer.

[T.D. ATF-212, 50 FR 34118, Aug. 23, 1985; 50 FR 39099, Sept. 27, 1985]

§ 170.63 Alternate methods or procedures.

The proprietor, on specific approval by the Director as provided in this paragraph, may use an alternate method or procedure in lieu of a method or procedure specifically prescribed in this subpart. The Director may approve an alternate method or procedure, subject to stated conditions, when he finds that—

(a) Good cause has been shown for the use of the alternate method or procedure;

(b) The alternate method or procedure is within the purpose of, and consistent with the effect intended by, the specifically prescribed method or procedure, and affords equivalent security to the revenue; and

(c) The alternate method or procedure will not be contrary to any provision of law, and will not result in an increase in cost to the Government or hinder the effective administration of this subpart. No alternate method or procedure relating to the assessment, payment, or collection of tax, shall be authorized under this paragraph. Where the proprietor desires to employ an alternate method or procedure, he shall submit a written appli

cation to the regional director (compliance), for transmittal to the Director. The application shall specifically describe the proposed alternate method or procedure, and shall set forth the reasons therefor. Alternate methods or procedures shall not be employed until the application has been approved by the Director. The proprietor shall, during the period of authorization of an alternate method or procedure, comply with the terms of the approved application. Authorization for any alternate method or procedure may be withdrawn whenever in the judgment of the Director the revenue is jeopardized or the effective administration of this subpart is hindered by the continuation of such authorization.

DISTILLED SPIRITS

§ 170.64 Scope of tax.

(a) General. The floor stocks tax is imposed on all Federally taxpaid or tax-determined distilled spirits, not exempt under paragraph (b) of this section, which at the first moment of October 1, 1985, are held by any person for sale. The floor stocks tax does not apply to distilled spirits which are not removed from bonded premises or Customs bond as of the first moment of October 1, 1985.

(b) Exempt dealer stocks. Distilled spirits held by wholesale or retail dealers are exempt from floor stocks tax if, on October 1, 1985, the aggregate liquid volume of distilled spirits held by such dealer does not exceed 500 wine gallons. Dealers claiming this exemption from the floor stocks tax shall comply with the inventory requirements of §§ 170.68 and 170.69, and file a tax return as required by § 170.67.

(c) Controlled groups. Dealers who are component members of a controlled group as described in § 170.62 must apportion the 500 wine gallon exemption allowed under the provisions of paragraph (b) of this section among the members of that group in proportion to the amount each member has in inventory. A controlled group may only claim the exemption if the aggregate liquid volume of distilled spirits held by all members of the controlled

group does not exceed 500 wine gallons.

[T.D. ATF-212, 50 FR 34118, Aug. 23, 1985; 50 FR 39099, Sept. 27, 1985]

§ 170.65 Rate of tax.

(a) General. The rate of floor stocks tax on distilled spirits is $2.00 per proof gallon, and a proportionate tax at the like rate on all fractional parts of a proof gallon.

(b) Credit against tax. Wholesale and retail dealers in distilled spirits are allowed as a credit against the floor stocks tax an amount equal to $800 or the amount of tax liability, whichever is smaller. Dealers who do not owe floor stocks tax as a result of this credit shall comply with the inventory requirements of §§ 170.68 and 170.69, and file a tax return as required by § 170.67.

(c) Controlled group. Dealers who are component members of a controlled group as described in § 170.62 must apportion the $800 credit allowed under paragraph (b) of this section among the members of that group. The credit may be divided equally among the members or apportioned in any other manner agreeable to the members. An attachment shall be made to the tax returns required by § 170.67 for the members of the controlled group showing the name, address, and amount of credit taken by each member of the controlled group. § 170.66 Payment of tax.

(a) General. The floor stocks tax shall be paid by every person who holds for sale, at the first moment of October 1, 1985, Federally taxpaid or tax-determined distilled spirits except those distilled spirits held by dealers that are exempt under § 170.64(b). The floor stocks tax return shall be filed on or before April 1, 1986. Except as provided in paragraph (b) of this section, payment of the tax in full, minus the credit allowed under § 170.65(b), if any, shall accompany the floor stocks tax return. Checks and money orders shall be made payable to the Internal Revenue Service, and shall show the taxpayer's name and employer identification number or social security number if the taxpayer