bourbonv wrote:The bonding period is 20 years. This means that after the whiskey is made it is entered into a bonded warehouse for agining. This is a good thing because it allows for the "Angel's Share" to happen without that lost volume being taxed - or a I should say within some limitation, untaxed. There is a formula that tells the tax man how much whiskey there should be in a barrel after a set period of time and if a barrel falls below that limit, then the distiller still pays the tax on what should be there by the government formula. Of course if there is more in a barrel they still pay the taxes on the excess. However since 1984, the guager has played a lesser role and the government allows the tax to be paid on the overall dump so the excess in some barrels makes up for the shortage in others. It works out to be pretty close to the government formula. Still, if you purchase a single barrel of whiskey from a distiller and it falls below the amount called for, you will pay the taxes on the missing whiskey and if there is more than called for you will pay taxes on the extra.
Now after the whiskey is aged and dumped, the distiller gets to bottle the whiskey and pay the taxes when the bottles are shipped. This is one of the big changes from the 1950s that also raised the bonding period from 8 years to 20 years. The advantage here is that the distiller does not ship until the whiskey is sold so if they have whiskey that is over aging they can bottle it and keep those bottles in bonded storage until they sell it.
bourbonv wrote:Twenty years is the maximum period for bonding. You can take the whiskey out of bond anytime you want to, you just have to pay the tax when you do so.
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