Alcohol FAQs

While there is some variation in production methods, extraction products are generally produced by steeping herbs, flowers, gems, or minerals in water, which is used as an extracting agent. The steeping process is believed to extract various elements from the steeped material which are beneficial to the user of the extraction product. The herbs, flowers, gems, or minerals are removed after steeping, and alcohol, usually vodka or brandy, is added to the water as a preservative. In some cases, alcohol may be used as the extracting agent. Extraction products are generally sold as sprays or drops, usually in one or two ounce containers. These products are generally marketed, advertised, and labeled as "essences," but they are not the same as fruit or other essences that are commercially produced and intended for use as flavorings for alcohol beverages or other foods.

TTB's initial testing of extraction products in the marketplace revealed that all of the products tested had 0.5 percent or more alcohol by volume (ABV) which is the threshold alcohol content for products to be regulated as alcohol beverages, unless they are unfit for beverage purposes (See FAQ EP12). The extraction products tested ranged in alcohol content from 3.2 percent to 27.9 percent ABV. Testing by TTB revealed that many of the extraction products were fit for beverage purposes and subject to taxation and regulation, while some were found to be unfit for beverage purposes.

We have analyzed samples of extraction products in the marketplace and tested the samples for alcohol content and fitness for beverage purposes. We will work with producers, distributors, or importers of extraction products so that they may comply with law and regulations and ensure that their products are appropriately labeled. Our primary concern is that consumers be adequately informed about the nature of alcohol beverage products being marketed as something else, such as dietary supplements.

If you are a producer, importer, or wholesaler of extraction products that are alcohol beverages (i.e. 0.5 percent or more ABV and fit for beverage purposes) you may be subject to the permit, labeling, and advertising requirements of the FAA Act, depending on the classification of the alcohol beverage product.* The determination of whether an extraction product, that is an alcohol beverage, falls within the classification of a wine, malt beverage, or distilled spirits product under the FAA Act must be made on a case-by-case basis, depending on the formulation and method of production.

Some alcohol beverages are subject to tax as wine or beer but are not subject to the requirements of the FAA Act. For example, wine containing less than 7 percent alcohol by volume, and beer that is not made with both malted barley and hops, are exempt from the labeling requirements under the FAA Act and must comply with FDA labeling requirements, as well as the marking requirements of the Internal Revenue Code of 1986 (IRC), as amended.

* For more information on the FAA Act, see 27 U.S.C. 201, et seq.

The container of any alcohol beverage product sold or distributed in the United States with an alcohol content of 0.5 percent ABV or more must bear the health warning statement required by the Alcoholic Beverage Labeling Act of 1988 (ABLA).* This requirement applies regardless of whether the product is subject to the labeling requirements of the FAA Act.

* For more information on ABLA and the TTB regulation, see 27 U.S.C. 215 and 27 CFR part 16.

Due to the fact that extraction products are generally sold as dietary supplements or "natural health remedies," TTB has observed that the labels and advertising for the products often contain claims regarding the health effects derived from using the products.

If the products are determined to be alcohol beverages (i.e. 0.5 percent ABV and fit for beverage purposes) any claims on labels or in advertising for the products would be subject to the labeling and advertising requirements of the FAA Act and the TTB regulations at 27 CFR part 4, part 5 or part 7. This includes the regulations regarding health-related statements.

Health-related statements are generally defined as statements related to health, including statements of a curative or therapeutic nature that, expressly or by implication, suggest a relationship between the consumption of alcohol beverages, or any substance found within alcohol beverages, and health benefits or effects on health. Health-related statements include both specific health claims and general references to alleged health benefits, or effects on health as well as health-related directional statements such as those terms which are defined in the regulations. Health-related statements also include statements and claims that imply that a physical or psychological sensation results from consuming the alcohol, as well as statements and claims of nutritional value (e.g., statements of vitamin content).

In general, advertisements may not contain any health-related statement that is untrue in any particular or tends to create a misleading impression as to the effects of alcohol consumption on health. TTB will evaluate such statements on a case-by-case basis and may require as part of the health-related statement a disclaimer, or some other qualifying statement, to dispel any misleading impression conveyed by the health-related statement. Such disclaimer or other qualifying statement must appear as prominent as the health-related statement.

The tax classification of extraction products under the IRC will depend on the formulation and method of manufacture. The alcohol used in all of the extraction products tested by TTB was distilled spirits, and these FAQs address distilled spirits in greater detail than wine or beer. However, it is possible that extraction products could be manufactured with alcohol derived from fermentation, such as wine or beer. If distilled spirits are used in the formulation of the extraction product it will likely be classified as a distilled spirit. If wine is used in the formulation of the extraction product it will likely be classified as a wine and likewise if beer is used in the formulation of the extraction product it will likely be classified as a beer.

Manufacturers of extraction products may submit to the Alcohol Labeling and Formulation Division a formula providing detailed information about the ingredients used in their product, and the method of manufacture. This is necessary in order for us to advise producers about the classification of their products, possible qualification requirements, and potential labeling requirements.

If you produce extraction products that contain 0.5 percent or more ABV and are found to be fit for beverage purposes, you are required to qualify as an alcohol beverage producer. Depending on the type of alcohol used in producing the extraction product you must qualify as a distilled spirits plant, qualify as a wine premises, or qualify as a brewer under 27 CFR part 19, 27 CFR part 24, or 27 CFR part 25 of the TTB regulations respectively. Extraction products that are determined to be alcohol beverages are also subject to excise taxes.

For example, if the extraction product is classified as distilled spirits, the regulations at 27 CFR 19.348 require the proprietor to file a formula on TTB Form 5100.51 that includes a quantitative list of ingredients and a description of the method of manufacture or process of production used to produce the spirits. You must remove your distilled spirits from your premises in containers that comply with the requirements for containers and marks under 27 CFR part 19, subpart S. The product also will be subject to FAA Act requirements and the labeling and advertising requirements of 27 CFR part 5, including standard liquor bottles and standards of fill.

Similar requirements under 27 CFR part 25 will apply if the extraction product is classified as a beer and 27 CFR part 7 will also apply if the extraction product is classified as a malt beverage as defined in the regulations. If the extraction product is classified as a wine, requirements under 27 CFR part 24 will apply and 27 CFR part 4 will apply if the extraction product is classified as a wine and has 7 percent or more ABV. This includes requirements for standard wine containers and standards of fill.

Wines with 7 percent or more ABV and distilled spirits are also subject to the standards of fill requirements at 27 CFR 4.72 and 5.203 respectively.

In addition, as previously noted, if your extraction product contains 0.5 percent or more ABV, your containers must bear the health warning statement, as outlined under 27 CFR part 16.

Last reviewed 9/28/2023

Learn about qualifying as a distilled spirits producer, you may submit an inquiry to the NRC or call toll free at 877-882-3277.

Learn about qualifying as a brewer, you may submit an inquiry to the NRC or call toll free at 877-882-3277.

Learn about qualifying a wine premises, you may submit an inquiry to the NRC or call toll free at 877-882-3277.

You also should contact State and local alcohol regulatory authorities to learn about State and local requirements.

The IRC at 26 U.S.C. 5001 imposes on all distilled spirits produced in or imported into the United States a tax at the rate of $13.50 on each proof gallon and a proportionate tax at the like rate on all fractional parts of a proof gallon.a proof gallon.

Information about taxes on wine can be found at 26 U.S.C. 5041, and information about taxes on beer can be found at 26 U.S.C. 5051.

If the extraction product is a wine, malt beverage, or distilled spirits product subject to the FAA Act, importers and wholesalers of the product must obtain a basic permit from TTB. Additionally, wholesalers and retailers of extraction products that are alcohol beverages must register with TTB as dealers in alcohol beverages, using form TTB F 5630.5d or via Permits Online. Dealers must meet the requirements outlined under the TTB regulations at 27 CFR part 31. Dealers also should contact State and local alcohol regulatory authorities to learn about State and local requirements.

TTB's Nonbeverage Products Laboratory has developed several tools and guidelines that limit subjectivity in determining if a product is unfit for beverage purposes.

To determine if an extraction product is unfit for beverage purposes, TTB may review the ingredients and formulation taking into account the presence of any flavor chemicals or other ingredients that would make the product unfit for beverage purposes.

Due to the extensive guidelines for nonbeverage product formulation, employing organoleptic tasting protocols to determine unfitness for beverage purposes is very rare. When used, it is for the purpose of determining whether the average person would mistake the product for an alcohol beverage.

• See our guidance on how you can be certain your product is unfit for beverage purposes.
• See our tools to help you decide which set of guidelines is relevant to your product.

One way to ensure that an extraction product will not be considered an alcohol beverage is to reduce the alcohol content of the product to less than 0.5 percent ABV in the final container used at retail either by diluting the product or eliminating the use of alcohol in the production process, either as an extraction agent or preservative.

If the alcohol content of the extraction product is 0.5 percent ABV or above and the extraction product is found to be fit for beverage purposes it must be reformulated to make it unfit for beverage purposes in order not to be considered an alcohol beverage. See FAQ EP12 for additional information on how products can be made unfit for beverage purposes.

If you have any questions about whether your product is unfit for beverage purposes, please submit an inquiry to TTB's Nonbeverage Products Laboratory.

Drawback is the portion of excise taxes returned to the manufacturer of nonbeverage products when the tax-paid on the distilled spirits is used to produce approved products unfit for beverage purposes. If you use distilled spirits on which tax was paid to produce your extraction products, you may be able to apply for a drawback of a portion of those taxes. To apply for tax drawback, you must submit a formula on TTB Form 5154.1. To file a drawback claim submit TTB Form 5154.2 with the National Revenue Center.

See more information on Claiming Drawback on Taxpaid Distilled Spirits Used in Manufacturing Nonbeverage Products.

Drawback of tax only applies to domestically produced products. No drawback of tax will be allowed on imported products, and no drawback is allowed for taxpaid wine or beer.