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Title 26 — Internal Revenue CodeRelease 119-73

§5414 Transfer of Beer Between Bonded Facilities

Title 26 › Subtitle Subtitle E— Alcohol, Tobacco, and Certain Other Excise Taxes › Chapter 51— DISTILLED SPIRITS, WINES, AND BEER › Subchapter G— Breweries › Part II— OPERATIONS › § 5414

Last updated Apr 6, 2026|Official source

Summary

Beer can be shipped from one brewery to another without paying federal excise tax, and mixed with beer at the receiving brewery, under IRS rules. This covers moves between breweries owned by the same brewer, between corporations where one controls the other or the same owners control both, and even between completely independent breweries if the sender gives up all interest in the beer and the receiver accepts responsibility for paying the tax. In that last case, the sender is off the hook starting when the beer leaves its premises or when it gives up its interest, whichever comes later.

Full Legal Text

Title 26, §5414

Internal Revenue Code — Source: USLM XML via OLRC

(a)Beer may be removed from one brewery to another brewery, without payment of tax, and may be mingled with beer at the receiving brewery, subject to such conditions, including payment of the tax, and in such containers, as the Secretary by regulations shall prescribe, which shall include—
(1)any removal from one brewery to another brewery belonging to the same brewer,
(2)any removal from a brewery owned by one corporation to a brewery owned by another corporation when—
(A)one such corporation owns the controlling interest in the other such corporation, or
(B)the controlling interest in each such corporation is owned by the same person or persons, and
(3)any removal from one brewery to another brewery when—
(A)the proprietors of transferring and receiving premises are independent of each other and neither has a proprietary interest, directly or indirectly, in the business of the other, and
(B)the transferor has divested itself of all interest in the beer so transferred and the transferee has accepted responsibility for payment of the tax.
(b)For purposes of subsection (a)(3), such relief from liability shall be effective from the time of removal from the transferor’s premises, or from the time of divestment of interest, whichever is later.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

A prior section 5414, act Aug. 16, 1954, ch. 736, 68A Stat. 675, consisted of provisions similar to those comprising this section, prior to the general revision of this chapter by Pub. L. 85–859.

Amendments

2020—Pub. L. 116–260 amended section generally. Prior to amendment, section related to removals of beer from one brewery to another belonging to the same brewer. 2019—Subsec. (b)(3). Pub. L. 116–94 substituted “
December 31, 2020” for “
December 31, 2019”. 2017—Pub. L. 115–97 designated existing provisions as subsec. (a), inserted heading, and added subsec. (b). 1976—Pub. L. 94–455 struck out “or his delegate” after “Secretary”.

Statutory Notes and Related Subsidiaries

Effective Date

of 2020 Amendment Pub. L. 116–260, div. EE, title I, § 106(c)(2), Dec. 27, 2020, 134 Stat. 3043, provided that: “The amendment made by this subsection [amending this section] shall apply to any calendar quarters beginning after December 31, 2020.”

Effective Date

of 2019 Amendment Pub. L. 116–94, div. Q, title I, § 144(c)(2), Dec. 20, 2019, 133 Stat. 3235, provided that: “The amendment made by this subsection [amending this section] shall apply to calendar quarters beginning after December 31, 2019.”

Effective Date

of 2017 AmendmentAmendment by Pub. L. 115–97 applicable to any calendar quarters beginning after Dec. 31, 2017, see section 13803(c) of Pub. L. 115–97, set out as a note under section 5412 of this title.

Reference

Citations & Metadata

Citation

26 U.S.C. § 5414

Title 26 — Internal Revenue Code

Last Updated

Apr 6, 2026

Release point: 119-73