All terms
Distillery glossary
Tax Determination
Tax determination is the point at which the federal excise tax on distilled spirits is fixed, generally when the spirits are removed from bond. The proof gallons at that moment set the tax owed.
Determining the tax means measuring the proof gallons being removed and applying the correct rate. Under CBMA the rate depends on cumulative removals for the calendar year, so the order and timing of removals matters. Tax-determined spirits have had their liability fixed even if payment follows on the return.
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