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Production of Ethanol-Based Hand Sanitizer During COVID-19 Outbreak

03.31.2020

On March 26, 2020, the Alcohol and Tobacco Tax and Trade Bureau (TTB) updated their guidance on production of hand sanitizer due to the COVID-19 pandemic. The TTB is waiving provisions of internal revenue law for distilled spirits permittees. They are also providing certain exemptions and authorizations for distilled spirits permittees who wish to produce ethanol-based hand sanitizers and/or wish to provide alcohol to certain groups for their own sanitizing needs, in order to address increased needs in their communities.

They are allowing tax-free ethanol to be used to produce hand sanitizer, provided it is denatured according to TTB regulations and FDA guidance. In addition, they are allowing alcohol, whether denatured or not, to be delivered tax-free to certain groups, such as state and local governments, hospitals, blood banks, etc., for non-beverage purposes as long as it is not for resale or use in the manufacture of any product for sale. This guidance shall apply to distilled spirits removed after December 31, 2019, and before January 1, 2021.

Although the TTB is exempting industry members from certain tax requirements, industry members must continue to comply with other federal and state laws and should contact their respective agencies with any questions.

TTB guidance on hand sanitizers: 

  • Any existing distilled spirits plant (DSP) can commence production of hand sanitizer or distilled spirits (ethanol) for use in hand sanitizer without having to obtain authorization first.
  • Permits are not necessary for alcohol fuel plants (AFP) or distilled spirits plants, but they still must keep records of their operations.
  • Hand sanitizer products are not subject to excise tax.
  • For all TTB-permitted DSPs and AFPs: no formula approval is needed if it is comprised of denatured or undenatured ethanol, glycerol (not less than 1.45% of the finished hand sanitizer product on a volume basis) and hydrogen peroxide (not less than 0.125% of the finished hand sanitizer product on a volume basis).
  • The requirements to first obtain approval for transfers in bond for domestic DSPs is being waived, however records of receipts must be retained.
  • For all industrial alcohol users: formula approval is not necessary if using guidance above.

For additional details on this guidance from the TTB, click here.

For more information on the temporary policy on the production of alcohol-based hand sanitizers, please click here.

FDA guidance on hand sanitizers

Throughout the COVID-19 pandemic, the FDA will allow hand sanitizer production as long as it meets their guidelines for consumer use and for use as health care personnel hand rubs. Click here to read the detailed guidance and recommendations from the FDA.

For assistance with your regulatory compliance efforts in the craft beverage space, please contact Michelle Howard, Consulting Manager, Advisory Services, at mhoward@bswllc.com or 314.983.1202.

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