61A-4.0371. Excise Tax Deduction for Breakage and Spoilage of Alcoholic Beverages

(1) Distributors which distribute malt, vinous, and spirituous beverages shall make an excise tax deduction in their monthly tax report for alcoholic beverages which have become unsaleable through warehouse breakage, spoilage, evaporation, expiration, or which have become unfit for human consumption in an amount equal to .49 percent of gross tax for vinous sales; .15 percent of gross tax for spirituous beverage sales; and .20 percent of gross tax for malt beverage sales or the actual breakage or spoilage destruction witnessed and documented by the division employee or other authorized person. The method of breakage for malt beverages (percentage or actual) must be elected annually and will be effective for 1 year unless the license is transferred or 100 percent of the stock is sold to a new owner. Distributors who engage in the sale of more than one type of alcoholic beverage shall utilize the provisions of this subsection for all sales of malt, wine, and liquor products.

(2) However, extraordinary losses, as defined hereafter in this subsection, of malt, vinous, and spirituous alcoholic beverages shall be excluded from the standard rates applied in subsection (1) above. Extraordinary losses of alcoholic beverages shall constitute unusual losses which are not expected to recur resulting from acts of God or nature, and accidents which occur during interstate or intrastate shipment from manufacturers to distributors, from distributor to distributor, and from distributor to retailer, or products recalled by manufacturers and destroyed by the distributor. Extraordinary losses shall not include losses from evaporation, breakage, or spoilage incurred on the licensed premises in the normal course of business which merely exceed the standard deductions referenced in subsection (1). The distributor shall notify the division immediately upon the occurrence of an extraordinary loss of merchandise. The actual gallonage of the extraordinary loss shall be deducted by the distributor. The distributor shall show proof of the extraordinary loss occurrence prior to recovery or crediting of any excise tax due on unsaleable alcoholic beverages by either providing a copy of a traffic accident investigation or incident report from the investigating agency when the loss occurs in transit, or be witnessed by an authorized division employee where the loss occurs on the premise of the distributor, or other appropriate documentation which clearly and objectively establishes the extraordinary loss. The distributor shall show proof of the destruction, dumping or recycling of the alcoholic beverages involved in the extraordinary loss occurrence by providing a statement to the division from the distributor’s employee responsible for the destruction or recycling. The statement shall include a description of alcoholic beverages, by gallon and tax category, which have been destroyed or recycled and a statement as to the location of the extraordinary loss occurrence and the location of the site of destruction or recycling.

(3) The distributor shall notify the division to witness the remaining undamaged, invoiced inventory which is utilized by the distributor. The distributor reporting extraordinary breakage, spoilage or evaporation shall furnish proof that Florida Excise Taxes have not been recovered from any other source. Copies of all insurance claims and receipt of payments shall be provided by the distributor to the division upon request by the division. The actual gallonage of breakage, spoilage, or evaporation of alcoholic beverages shall be recorded on form BPR-648A effective January 14, 1987 and incorporated herein by reference and will contain the date of product destruction, quantity destroyed by tax classification, and a statement signed by the distributor’s authorized employee or agent that the product was destroyed. A copy of form BPR-648A may be obtained by writing to the Department of Business and Professional Regulation. All completed forms shall be maintained for a period of 3 years.

Specific Authority 561.11 FS. Law Implemented 561.55(1), 563.05, 564.06, 565.12 FS. History–New 3-1-76, Formerly 7A-4.371, Amended 7-1-87, Formerly 7A-4.0371, Amended 2-24-94.