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BECAUSE OF THE C.A.R.E.S. ACT, DSPs CAN WITHDRAW ALCOHOL FOR HAND SANITIZER TAX FREE


Coronavirus Aid, Relief, and Economic Security (CARES) Act passed by Congress allows for Distilled Spirit Plants (DSPs) to withdraw distilled spirits tax-free for use in hand sanitizer that are produced and distributed consistent with FDA guidance related to COVID-19.  They can withdraw distilled spirits with or without denaturants, which are normally added to foul the taste of industrial alcohol for the use of solvents and fuels.  Under the CARES Act, persons who do not have TTB permits may receive tax-free withdrawals of distilled spirits during calendar year 2020 for use in, or contained in, hand sanitizer. FDA compliance is all that is required to meet the tax free threshold.

This subset of the CARES act allows distillers to produce hand sanitizers without the higher costs of beverage alcohol and the TTB has provided guidance in a simple question and answer format. It is a comprehensive publication that goes into labeling and container requirements, tax id reporting and record keeping, as well as what is required for the persons receiving the alcohol to create hand sanitizer. These tax free withdrawals of spirits are valid through December 31st, 2020.

The full TTB Public Guidance on the matter can be found at the link below.


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