Winery Recordkeeping Cleanup – a New Year’s Resolution Worth Keeping!

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Blog 27

We all have our New Year’s resolutions – some are personal and some are business.  Nobody knows if we will keep or meet our New Year’s goals – but we sure won’t if we don’t make them!  All business owners aspire to have things run smoother – ideally without monitoring! As an entrepreneur, you are curious and tend to figure out how to make things work.  As a winery owner, you have toiled with the art of enology and perhaps viticulture too.  You are well aware of the fact that this is an extremely regulated industry.  You file operational reports and regular excise tax returns.  However, do your records meet TTB requirements? Do a quick review of these items and you will not only knock out some business resolutions, but you can begin cleaning house for spring as you go through them:

1) You operate your winery under a basic federal permit.

Did you know that if anything changes in that permit that you need to report it to TTB within 30 days? Pull it out and review all pages.  If there are changes in your business structure – either because of a transfer of ownership, an adjustment of operations or something else, you may need to file an amendment and possibly adjust your bond.  Further, if you make an adjustment to your federal permit, you should check with your State licensing body – they may have an interest in your changes too.

2) Have you acquired new tanks for your winery?

Did you know that winery owner surveys show that tanks are the number one equipment item that wineries want to acquire in 2014?  You have probably properly labeled your original tanks (or not).  Every tank must have a serial number, it must be marked by permanent markings or removable signs of durable material to reflect its current use, and if used to store wine made in accordance with a formula, the formula number must be marked or otherwise indicated on the tank.  If you use puncheons, barrels or similar bulk containers, they must be marked just like tanks if they hold over 100 gallons.  If they hold less than 100 gallons, then you can forego the serial number and simply state the number of gallons that the container holds.  All other requirements of tank labeling must be met, however.

3) Are your inventory records compliant?

All winery owners are required to prepare a physical inventory for all wine in storage at the close of business of each tax year.  The dates for the end of the business year vary based on your particular proprietorship.  However, if you are a small winery and file reports on a calendar year basis, then the physical inventory should take place on the last day of the calendar year – December 31. All calendar year proprietors should be filing a Report of Bonded Wine Premises Operations on Form 5120.17.  While you file Form 5120.17 with TTB, you should simply keep a copy of your inventory filed with your Form 5120.17 copy so that it is available for review should TTB perform an onsite premises inspection.

Some things your inventory report should include are a description of the wine – that means a generic name, like “red wine,” or if the wine is marketed with a geographical designation or vintage date, then identify it as such.  If there are fruits or other substances besides grapes, like honey, in the wine, identify that too. Tanks of wine should be listed by tank number.  Bulk containers that are barrels or other containers that contain the same kind of wine can be summarized – by number of barrels and total gallons.  The total volume of one kind of wine in cases, bottles or other containers may be entered as one item.  So, you could state, 23 cases of “X” wine.  Summarize the total volume for the inventory.  Separate bulk wine from bottled or packed wine and calculate the volume in wine gallons or liters.  Separate by tax class.  Your inventory is a complete document in and of itself and TTB expects you to number the pages and swear under oath on the last page that you have personally examined the inventory and believe it to be correct.  That statement is made under penalties of perjury and requires a specific statement set forth in the regulations.  The inventory should then be signed and dated.

4) How quickly do reports need to be submitted?

If you are intent on adopting better business methods for the New Year, start with abiding by the expected method for keeping track of your information.  The federal government expects you to timely record information, but what does that mean? Basically, you should be making entries into your records at the time your operation or transaction occurs – basically contemporaneously with the transaction.  The exception is if records are created from records you put together at the time of the transaction or operation.  If that is the case, then you basically have until the close of business on the third day after the succeeding day of the operation or transaction.  Rather than keeping track of that timing, it is always best to create the records at the time of the action, if at all possible.  If it isn’t possible, then establish a time immediately following the operation or transaction, or set aside time early the next business day before starting physical activities associated with your business operations, to update your records.  If you are moving on to the next operation or transaction and you haven’t updated records, you should review your workflow to determine how you can set aside time for proper recordkeeping.

No doubt all of the above is a tremendous amount of work, however, it is simply a cost of doing business for this industry.  Be sure to keep track of all of the above documentation for at least three years, preferably longer if possible.  The reality is that the regulations require three years, however if the IRS should examine you and allege a substantial understatement of income, they can review your returns, and thus your records, for the last six years.  Should they allege fraud, there is no statute of limitations.  Our office has never had a client regret keeping records too long, so if you have a place to keep them, then keep them.  Certainly electronic storage would work well for the old records to free up physical space.  Should you require assistance or simply have questions about any of the above, don’t hesitate to contact us.

We're Here to Help

Dear friends in the alcoholic beverage industry,

As we as an industry, nation and planet collectively try to navigate this unprecedented period the coronavirus has brought us, We’d like you to know that we at Craft Beverage Consultants (the other CBC!) are here to answer any question you may have (or not know you have) about not just surviving this time but positioning yourself to thrive as soon as social distancing measures allow your business to function at full capacity again.

If you schedule a free 60-minute phone or video conferencing consultation with me or any of my 11 highly specialized colleagues, we’ll help you figure out any of your immediate and/or longterm business needs, or “everything but the staffing,” as we like to say. We’re not high-pressure sales kind of people, especially these days, so you don’t have to worry about fending off annoying pitches. Make an appointment on our website or Facebook page, or just call us the old-fashioned way at 314-768-0220.

Our experts have a combined 150 years in the alcoholic beverage industry, with deep knowledge in everything from sales and distribution, production, and regulatory compliance to marketing, package design, event planning, IT, (social) media, hospitality, and even values-based executive coaching. 

For example, we can coach you through this season when chain accounts have canceled their spring, in some cases, fall resets and distributors have drastically cut orders. Our director of business strategy and compliance can save you money – now – on excise taxes, caution you to avoid naming your beers in ways that risk alienating your buyers (Wuhan Wheat? Coronavirus Cream Ale? Groan. No.), and secure TTB approval for the tastefully named beers you do make. Our creative director and web team can get your e-commerce site up and running and launch a social media campaign that keeps you top of mind for current and future customers. Our director of storytelling can put you in front of the press so you can tell your story to your community. 

Once you’re ready, we can look forward together. Now is the time to talk about post-virus. We all suspect the legal landscape to look different. But how? And how do you prepare yourself in a way that positions you to charge out of the gate ready to maximize the potential and profit of whatever the “new normal” turns out to be? Please get in touch so we can talk about it. 

CBC’s roster includes local and regional clients like Epic Brewing, Logboat Brewing, Piney River Brewing, SudWerk Brewing, Waves Cider and Common Cider Company, just to name a few.  The agency was founded in 2004 by Jacob and Beth Halls, formerly known as Convergence Consulting; Rick Laxague, joined as a partner in charge of sales, marketing and distribution consulting in 2019. 

Rick hase close to 20 years of experience, a bulk of which was with Crescent Crown Distributing in Arizona. His last role there was Area Sales Manager for the dedicated craft beer division, coaching and leading a sales team to be nationally recognized. In early 2014 Rick helped take a regional brewery national as their Director of National Accounts and increase that segment of their business from 30,000 cases to almost 300,000 cases in two years, an increase that equates to $4.8 million in IRI dollar sales. 

Co-founder Jacob Halls brings 17 years of experience in regulatory compliance, business strategy, marketing and craft brand management to the company. In his former position as craft brand manager for the N.H. Scheppers Distributing Company in Columbia, Missouri, Jacob helped lead his team to winning the 2016 Distributor of the Year award from New Belgium and to a nomination for the Brewers Association’s Distributor of the Year award. Jacob is also the founder and director of the South East Craft Beer Fest and several other industry specific charitable event marketing festivities. Beth Halls is Director of Business Operations and Coordinator of Charity Operations for the festivals and events run by CBC, such as the South East Craft Beer Fest, MO Bacon & Bourbon, and many more. 

Again, please reach out to us for anything.  CBC can be reached at (314) 768-0220 or at

We look forward to meeting/talking soon.


Rick Laxague, Jacob Halls, and Beth Halls