The Tax and Trade Bureau (TTB) has authorized distilleries to immediately begin producing and distributing hand sanitizer without additional approval to help combat COVID-19.
Who Can Produce Sanitizer?
- Beverage distilled spirits plants (DSP)
- Alcohol fuel plants
- Industrial alcohol user permittees
- Distilleries must still keep records of the production
- The sanitizer must meet FDA guidance
- Producers can use denatured or undenatured ethanol. Tax-free ethanol may be used to produce hand sanitizer if it is denatured according to TTB regulations and FDA guidance.
- Alcohol, whether or not denatured, may be delivered tax-free to state and local governments for non-beverage purposes
- DSP may also remove undenatured or denatured ethanol from bonded premises free of tax for use by hospitals, blood banks, sanitariums, certain pathological laboratories, non-profit clinics and qualifying educational institutions to make hand sanitizer, but it cannot be used for resale or use in the manufacture of any product for sale
- The authorization is in effect through June 30, 2020 but could be extended
The federal CARES Act authorized the production of hand sanitizer free of excise tax, and also waived requirements for labeling and bulk sales under the Federal Alcohol Administration Act and the Alcoholic Beverage Labeling Act.
This is a way to keep some production going, though many distilleries are giving away the sanitizer for free to those in need, like hospitals and first responders. In addition to being a way to keep employees working and helping in a time of crisis, it also helps keep distilleries top of mind as other sales slow down.