Internal Revenue Service
Revenue Ruling

TaxLinks.com   sm

 Rev. Rul. 56-31

1956-1 C.B. 711

Section 5703 -- Tax Liability and Payment Method

IRS Headnote

A vapor recompression device, which is attached to the base of a conventional beer still to conserve steam and which, as an incidental function, recovers and reinjects into the still the residual alcohol contained in low boiling material, thereby preventing loss of alcohol in the stillage, is not taxable either when furnished as an integral part of a new still or when furnished separately and attached to a still already set up.

Full Text

Rev. Rul. 56-31

Advice has been requested whether a certain vapor ecompression device is taxable under section 5101 of the Internal Revenue Code of 1954.

Section 5101 of the Code requires in part that each manufacturer of stills shall pay a special (commodity) tax of $22 for each still or worm for distilling made by him.

Section 196.40(d) of the Regulations relating to Stills provides that a separator or dephlegmator, used solely for separating vapors of lower boiling points from vapors of higher boiling points, allowing the latter to condense and reflux to the still and the former to pass forward to a worm or condenser, is not subject to the $22 tax.

The device in question, when attached to the base of a conventional beer still, acts primarily to conserve steam by recompressing the vapors from the hot stillage at the base of the still. The vapors are returned to the still for use in preheating the feed intake. An incidental function of the device is to recover and reinject into the still the residual alcohol contained in lower boiling material, thereby preventing loss of alcohol in the stillage. In effect, the device performs the function of a combination heat extractor and separator.

This vapor recompression device is analogous in principle to a dephlegmator, which is not taxable. Accordingly, the device is held not to be taxable either when furnished as an integral part of a new still or when furnished separately and attached to a still already set up.