Winery to-do list
Ten ways to comply with winery rules.
There's a long to-do list for anyone considering starting a winery. For many, siting, sourcing, and financing head up the list.
Also close to the top is compliance with government regulations, says Martha Tebbenkamp, a Portland-based investigator with the Pacific Northwest field office of the Alcohol and Tobacco Tax and Trade Bureau, a division of the U.S.
A top-ten list can help fledgling winery owners deal with some of the federal regulations, Tebbenkamp said during the Washington Association of Wine Grape Growers annual meeting in Kennewick
in early February. Following are her suggestions:
1) Apply early. Approval of permit applications is through a central office in Cincinnati, Ohio, and can take three to four months, she said. By midyear, the office can become buried in applications, and it's wise to submit applications as early as possible to avoid delays.
The permits required depend on the kind of activity. A bonded winery needs a wine producer basic permit, a registry under the Internal Revenue Code, and a bond. A bonded wine cellar needs only the registry and bond. Much of the information about permits is available on the TTB Web site (www.ttb.gov/index.shtml).
2) Build before you apply. "You need a physical premises first before you get a basic permit," Tebbenkamp said. The permit is issued to an entity at a specific location, she said. If there's a change in location, a new application must be filed.
3) Consider bonding more acreage for future growth. Rather than bond just a winery building site, bond the entire site, which could simplify the application process as the winery expands and/or other activities are added.
4) Sell only wine produced on bonded premises. "Home wine is never winery wine," Tebbenkamp said. Regulations allow private parties to produce 100 gallons of wine per year, or 200 gallons if there are two adults in a household, for personal consumption only. Home wine cannot be commercially sold.
5) Keep signing authorities up to date. Tebbenkamp urged winery owners to be careful when assigning signing authority and to keep authorities up to date. The TTB can only talk about applications with people with power of attorney or signing authority. Rescinding signing authority, for example for a former employee, can be accomplished with a letter to the TTB office in Cincinnati. To add names, a TTB form should be used.
6) Know that no production means no tax credit in terms of the federal small producer winery tax credit. The federal excise tax on wine starts at $1.07 per gallon, but small producers can get up to 90 cents per gallon credit.
7) Obtain a Certificate of Label Approval before bottling. Wineries must send in labels for TTB approval. Certain changes, for example changing or deleting a vintage date, can be made without getting new approval. Alcohol content within a tax class can also be changed on the label. But many changes require a new COLA before bottling.
8) Keep a strong record trail. For example, if a label includes a varietal claim or an AVA claim, paperwork is required to back up those claims. Similarly, records are needed to prove the percentage of each varietal used in blends.
9) Select a tax period and system that works best for your winery. There are options for filing excise tax returns, based on gallons produced and the amount of tax owed. For example, some wineries prefer to pay on bottling, some prefer to pay monthly, quarterly, or even annually.
10) Call the TTB with questions. "It's easier to stay on track than to get back on if you derail," Tebbenkamp said.
For more information about TTB regulations governing wine, visit www.ttb.gov/ index.shtml, or phone the TTB's Northwest field office located in Vancouver, Washington, at (360) 696-7900. •