Ohio Beer Counsel
Information and Commentary on the Issues Facing Ohio's Craft Beer Community, Breweries and Distilleries - Brewed by the Craft Beer Lawyers of Bruns, Connell, Vollmar & Armstrong's Brewery & Distillery Practice Group
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"Let's Get Physical!" The Joy of Monthly Inventory.

As OBC recently discussed, breweries must keep daily records of 19 separate categories.  As if daily record keeping were not enough, your friends at the TTB require brewers to take a physical inventory of beer and cereal beverage at least once per month.  By the last week of a given month, a brewer must make a record of inventory, under the penalty of perjury, showing the following:

  • Date taken;
  • Quantity of beer and cereal beverage on hand; and
  • Losses, gains and shortages

Monthly inventory must not only be recorded, it must be made available for inspection when requested by a TTB officer.  A brewer may request a variance from the monthly requirement, but whether it's granted is determined by the TTB.

Records, whether they be daily or monthly, serve to assist the TTB in determining a brewery's excise tax.  Therefore, it's important to know the difference between losses and shortages. Losses (generally not taxed) are "known quantities of beer lost due to breakage, casualty, or other unusual cause (i.e., theft)."  A shortage (generally taxed) is "an unaccounted for discrepancy (missing quantity) of beer disclosed by physical inventory."

The failure to record physical inventory on a monthly basis is not only against the law, it may result in payment of additional excise tax.