Distillery and special taxes

[sdtaxman]

I have a client that has opened a distillery and manufactures Vodka. They have their product refined, have a distributor and can only keep up with local demand. It appears like it is going to be a viable business and I am concerned about any special alcohol taxes that need to be paid. They have only been producing the vodka and selling it for three months. Any direction or experience you can share is greatly appreciated.

[Burke]

This may depend on what state they are located in.

[Gary2]

I can't believe they haven't already addressed that. I know that recent laws have made it easier for farm-based distilleries to open, but I thought that they were still subject to bonded warehouse requirements and other supervision, as well as the basic licensing requirements. In other words, they couldn't get a license without the taxes already being managed. Is my belief wrong?

[DaveO]

I'm a partner in a brewery and have looked at the distillery business. There are bonding requirements state and federal. Alcohol is taxed by the proof gallon with reporting and payment of the excise tax twice a month except in September then 3 times. A summary of the excise tax is due monthly or quarterly along with a production report. If they have not kept up to date it may be a short lived adventure.