Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 61-84

1961-1 C.B. 793

Caution: Superseded by Rev. Rul. 62-198

Full Text

Rev. Rul. 61-84

Sections 170.613 and 170.617 of the Miscellaneous Regulations Relating to Liquor provide, in part, that manufacturers are not required to pay occupational and rectification taxes with respect to their production of brandied fruits consisting of solidly packaged fruits, either whole or segmented, and liquors not exceeding the quantity and alcohol content necessary for flavoring and preserving. Held , in determining whether the alcohol content of such liquor is excessive, the Internal Revenue Service considers that the alcohol content of the liquid portion may not exceed 12 percent by volume and the solids content (essentially sugar) of such liquid portion may not be less than 60 grams per 100 ml. Where the alcohol content is 12 percent by volume or less, the solids content, expressed in grams per 100 ml., may not be numerically less than five times the percentage of alcohol by volume, and in no case may the solids content be less than 25 grams per 100 ml. Observance of these limitations is deemed essential to establish the nonbeverage character of the liquid portion of the product and thus to avoid liability for occupational and rectification taxes. In the event that these limitations are not observed, the manufacturer must be prepared to establish that he has used such other ingredients as will, in fact, render the liquid portion of the product unfit for use for beverage purposes.

The limitations set forth above are also considered applicable in establishing the nonbeverage character of the alcoholic liquid portion of imported brandied fruits and, thus, to avoid liability for the internal revenue tax imposed by section 5001 of the Code on imported distilled spirits.