Deductions for Certain Losses of Alcoholic Beverages

Florida alcohol distributors get loss tax breaks

Florida alcohol distributors can claim monthly excise-tax deductions for drinks lost to breakage, spoilage, evaporation, expiration, or becoming unsafe to drink. The law takes effect upon becoming law and applies retroactively to January 1, 2025. Standard deductions equal 0.49% of gross tax for wine and 0.15% for spirits. For malt drinks, distributors choose between 0.20% of gross tax and a deduction based on actual gallons lost. That choice lasts one calendar year unless the license transfers or all stock is sold to a new owner. Distributors handling several drink types apply each category’s rules separately. Separate deductions based on actual gallons cover extraordinary losses, including unusual, nonrecurring natural events, shipping accidents, and manufacturer recalls involving destroyed products. Ordinary losses on business premises above the standard deductions do not qualify as extraordinary losses. Distributors must immediately notify the Division of Alcoholic Beverages and Tobacco about extraordinary losses. Proof must include a shipping accident or incident report, state-witnessed or documented on-site losses, or other clear, objective records established by the division. Distributors must document disposal through a statement identifying the location, drink type, gallons, tax category, and disposal site. They must prove the tax was not recovered elsewhere and supply insurance claims and receipts when requested. The division must inspect remaining undamaged, invoiced inventory intended for distribution. Required state forms record actual gallons lost, destruction dates, amounts destroyed by tax category, and a signed statement confirming destruction. The division keeps completed forms for three years and can issue rules and forms to carry out the law.