Frequently Asked Questions
Who is eligible for the State and Local Government Permit Exemption?
Must be an agency of a State or political subdivision, or an officer/employee thereof acting in an official capacity.
How does the State and Local Government Permit Exemption work?
Exempts agencies of a State or political subdivision from the requirement to obtain a permit to engage in distilled spirits operations.
What law authorizes the State and Local Government Permit Exemption?
The State and Local Government Permit Exemption is authorized under IRC §5171 of the Internal Revenue Code (Title 26, United States Code).
Statutory Text — IRC §5171
Source: Internal Revenue Code, Title 26, United States Code
§ 5171. Establishment(a) Certain operations may be conducted only on bonded premisesExcept as otherwise provided by law, operations as a distiller, warehouseman, or processor may be conducted only on the bonded premises of a distilled spirits plant by a person who is qualified under this subchapter.
(b) Establishment of distilled spirits plantA distilled spirits plant may be established only by a person who intends to conduct at such plant operations as a distiller, as a warehouseman, or as both.
(c) Registration(1) In generalEach person shall, before commencing operations at a distilled spirits plant (and at such other times as the Secretary may by regulations prescribe), make application to the Secretary for, and receive notice of, the registration of such plant.
(2) Application required where new operations are addedNo operation in addition to those set forth in the application made pursuant to paragraph (1) may be conducted at a distilled spirits plant until the person has made application to the Secretary for, and received notice of, the registration of such additional operation.
(3) Secretary may establish minimum capacity and level of activity requirementsThe Secretary may by regulations prescribe for each type of operation minimum capacity and level of activity requirements for qualifying premises as a distilled spirits plant.
(4) Applicant must comply with law and regulationsNo plant (or additional operation) shall be registered under this section until the applicant has complied with the requirements of law and regulations in relation to the qualification of such plant (or additional operation).
(d) Permits(1) RequirementsEach person required to file an application for registration under subsection (c) whose distilled spirits operations (or any part thereof) are not required to be covered by a basic permit under the Federal Alcohol Administration Act (27 U.S.C. secs. 203 and 204) shall, before commencing the operations (or part thereof) not so covered, apply for and obtain a permit under this subsection from the Secretary to engage in such operations (or part thereof). Subsections (b), (c), (d), (e), (f), (g), and (h) of section 5271 are hereby made applicable to persons filing applications and permits required by or issued under this subsection.
(2) Exceptions for agencies of a State or political subdivisionsParagraph (1) shall not apply to any agency of a State or political subdivision thereof or to any officer or employee of any such agency, and no such agency, officer, or employee shall be required to obtain a permit thereunder.
(e) Cross references(1) For penalty for failure of a distiller or processor to file application for registration as required by this section, see section 5601(a)(2).
(2) For penalty for the filing of a false application by a distiller, warehouseman, or processor of distilled spirits, see section 5601(a)(3).
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