ACTIVITIES ON BONDED
WINE CELLAR PREMISES
Proprietors of bonded wine cellars
and others concerned:
Purpose. This industry circular is issued to call to your attention certain
provisions of 26 CFR Part 240 about which there has been some misunderstanding.
Questions have been raised as to whether heavy bodied blending wine and Spanish type blending sherry may be transferred in bond; what records are required when wine is baked; and whether the regulations authorize the production and storage
of juice or concentrated juice for use in the production of wine on bonded wine
Transfers in bond. Under the provisions of section 240.610, wine may be transferred in bond between bonded wine cellars. The definition of "wine" in section
240.54 includes heavy bodied blending wine and Spanish type blending sherry.
Accordingly, heavy bodied blending wine and Spanish type blending sherry may be
transferred in bond between wine cellars under the authority contained in section
Record of wine baked. Each winemaker who bakes wine must, under section 240.384, maintain a record of the baking, showing the information required by section
240.919. The regulations do not require two separate records of the baking of
wine, one under section 240.384 and another under section 240.919. If a winemaker maintains the information required by section 240.919 in his cellar records
pursuant to section 240.384, such cellar records would also fulfill the requirements
of section 240.919.
Use of juice or concentrated juice in the production of wine. Section 240.130
authorizes the use of bonded wine cellar premises for the production, blending,
cellar treatment, storage, bottling, packaging, and removal of wine, and for the
production, receipt, or storage on the bonded wine cellar premises of materials
authorized for use in the production and cellar treatment of wine. Since the
preparation and use of juice and concentrated juice in natural wine is an
authorized cellar treatment, there is no bar to the production, receipt, or
storage of such products on bonded wine cellar premises.
Regulations. In the next general revision of 26 CFR Part 240 consideration will
be given to changes which will more clearly set out the provisions discussed
Inquiries. Inquiries concerning this circular should refer to its number and be
addressed to your Assistant Regional Commissioner, Alcohol and Tobacco Tax.
Ralph H. Alkire
Acting Director, Alcohol and Tobacco Tax Division