On August 12, 2019, the Alcohol and Tobacco Tax and Trade Bureau (TTB) published its updated Formula and Process for Nonbeverage Product, TTB Form 5154.1. The Nonbeverage Product approval process is critical to obtain “drawback” (a refund) on most of the alcohol excise tax on distilled spirits used to make such products deemed “unfit for beverage purposes.” The Nonbeverage Formula Form accordingly is important to producers of flavorings and extracts, soft drink concentrates and other non-beverage products made using potable alcohol.
Nonbeverage drawback claimants, using the Formula Form, must show that taxpaid distilled spirits were used in the manufacture of a product unfit for beverage use. Today, most formulas are submitted online, although TTB’s National Laboratory in Maryland can still accept paper submissions. Notable features of the new form include:
- Previously, the Nonbeverage Formula Form requested information specifically if the finished product (e.g., a flavoring) was to be used in alcohol beverages. The updated form removes these specific questions with the expectation that applicants will include the information in the “Formula and Process” portion of the Form.
- The updated form breaks down the outputs of the manufacturing process into:
- “Theoretical Yield (Weight and Volume);
- “Actual Yield (Weight and Volume);”
- “Density of Final Product (e.g., lbs/gal, g/mL);”
- “Manufacturing Process;” and
- “Unfit for Beverage Purposes Statement.”
- Applicants may provide an organoleptic analysis or use TTB’s Flavor Unfitness Worksheet to demonstrate that a product qualifies as unfit for beverage purposes. Completing this information along with the non-beverage formula submission will help producers determine whether or not the product is unfit for beverage purposes, and thus eligible for drawback claims, prior to production. TTB’s Drawback Tutorial here provides more information on qualifying as “unfit for beverage purposes.”
While a highly technical issue, the Nonbeverage Product Form is important because it unlocks tens of millions of dollars in excise tax refunds each year for US manufacturers using alcohol to produce nonbeverage products.