INSIGHTS AND RESOURCES

New guidance for facilities producing alcohol for hand sanitizer

TAX ALERT  | 

Authored by RSM US LLP


On June 22, 2021 the Alcohol and Tobacco Tax and Trade Bureau (TTB) published new guidance (TTB G 2020-1C) extending rules related to relief from certain TTB requirements for production of hand sanitizer. Under the new guidance, the relief is extended through Sept. 30, 2021. 

TTB G 2020-1C

Due to the continued consequences of the COVID-19 pandemic and the continuation of the Food and Drug Administration’s temporary guidance related to the manufacture of hand sanitizer and denatured alcohol for use in hand sanitizer, the TTB has extended the exemptions and authorizations under its prior guidance through Sept. 30, 2021. The guidance provides:

  • Tax-free ethanol may be used to produce hand sanitizer if it is denatured according to TTB regulations and Food and Drug Administration guidance.
  • Alcohol, whether or not denatured, may be delivered tax-free to state and local governments for non-beverage purposes. The same is true for hospitals, blood banks, sanitariums, certain pathological laboratories, non-profit clinics and qualifying educational institutions, if not for resale or use in the manufacture of any product for sale.
  • TTB is temporarily waiving certain formula approvals for the manufacture of hand sanitizer and expediting certain permit requirements.

For further information, refer to our prior alert.

Takeaway

Because of the continued consequences of the COVID-19 pandemic, producers of ethanol and hand sanitizer can continue to rely on the relief provisions provided by the TTB. TTB will continue to monitor the circumstances to determine whether other extensions or modifications to this guidance are warranted in the future. Affected taxpayers should be aware that TTB may modify or discontinue this guidance prior to Sept. 30, 2021 if FDA discontinues its guidance prior to that date.  

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This article was written by Debbie Gordon, Eugene Boakye and originally appeared on 2021-06-25.
2021 RSM US LLP. All rights reserved.
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