§ 25.93 - Penal sum of bond.

§ 25.93 Penal sum of bond.

(a) General. Except as provided in paragraph (a)(3) of this section, a brewer must furnish a bond of a penal sum as prescribed in this section.

(1) Brewers filing semimonthly tax returns. For brewers filing tax returns and remitting taxes semimonthly who pay taxes using semimonthly periods. In the case of a brewer who pays taxes using semimonthly return periods under § 25.164(c)(21), the penal sum of the brewers bond must be equal to 10 percent of the maximum amount of tax calculated at the rates prescribed by law which the brewer will become liable to pay during a calendar year during the period of the bond on beer:

(i) Removed for transfer to the brewery from other breweries owned by the same brewer;

(ii) Removed without payment of tax for export or for use as supplies on vessels and aircraft;

(iii) Removed without payment of tax for use in research, development, or testing; and

(iv) Removed for consumption or sale.

(2) Brewers filing quarterly tax returns. For brewers who were liable for not more than $50,000 in taxes with respect to beer imposed by 26 U.S.C. 5051 and 7652 in the preceding calendar year, who reasonably expect to be liable for not more than $50,000 in such taxes during the current calendar year, and who file tax returns and remit taxes quarterly who pay taxes using quarterly or annual return periods. In the case of a brewer who pays taxes using annual or quarterly return periods under § 25.164(c)(2) or (c)(3), the penal sum of the brewer's brewers bond is $1,000 and covers :

(i) Beer removed for transfer to the brewery from other breweries owned by the same brewer;

(ii) Beer removed without payment of tax for export or for use as supplies on vessels and aircraft;

(iii) Beer removed without payment of tax for use in research, development, or testing; and

(iv) Beer removed for consumption or sale

the beer described in paragraph (a)(1)(i)–(iv) of this section.

(3) Brewers who are exempt from bond requirements. This section does not apply to a brewer who is exempt from bond requirements under § 25.91(e).

(b) Concentrate. A brewer who concentrates beer under subpart R of this part shall calculate the penal sum of the bond by computing 10 percent of the amount of tax at the rates prescribed by law, on the maximum quantity of beer used in the production of concentrate during a calendar year. The brewer shall add this amount to the penal sum calculated under paragraph (a) of this section to determine the total penal sum of the brewer's bond.

(c) Maximum and minimum penal sums. The maximum penal sum of the bond (or total penal sum if original and strengthening bonds are filed) is not to exceed $150,000 when the tax on beer is to be prepaid, or $500,000 when the tax is to be deferred as provided in § 25.164. The minimum penal sum of a bond is $1,000.

(Sec. 201, Pub. L. 85-85985–859, 72 Stat. 1388, as amended (26 U.S.C. 5401))

[T.D. ATF-224ATF–224, 51 FR 7673, Mar. 5, 1986, as amended by T.D. TTB-41TTB–41, 71 FR 5603, Feb. 2, 2006; T.D. TTB-89TTB–89, 76 FR 3511, Jan. 20, 2011; T.D. TTB-94TTB–94, 76 FR 52862, Aug. 24, 2011; T.D. TTB-109TTB–109, 77 FR 72941, Dec. 7, 2012; T.D. TTB-123TTB–123, 79 FR 58679, Sept. 30, 2014; T.D. TTB–146, 82 FR 1127, Jan. 4, 2017]