Federal Tax regulation of certain laboratory alcohols
Specially Denatured Spirits
Specially Denatured Spirits (SDS) are alcohol or rum which has been treated with denaturants to make it unfit for beverage use. SDS includes Specially Denatured Alcohol (SDA) and Specially Denatured Rum (SDR). An Industrial Alcohol User Permit is needed to procure, use, recover and/or deal in SDS.
Users and Recoverers of Specially Denatured Spirits
A user of SDS is anyone who purchases SDS to use in a process or in the manufacture of a substance, preparation or product. SDS has many uses, such as:
- In laboratories as a solvent, for cleansing purposes or in the preparation of indicator solutions and reagents.
- In the manufacture of such articles as perfumes, proprietary solvents, tobacco flavors, lotions and sprays.
- In conversion processes to produce other substances, such as vinegar or ethyl acetate.
A recoverer is anyone who reclaims or salvages SDS or articles (substances or preparations containing SDS) during or after the manufacturing process. The recovered SDS may be used again as is (if still sufficiently denatured) or it may be reconditioned.
All users and recoverers of SDS must obtain an Industrial Alcohol User Permit.
If you use only small amounts of a SDS formula for laboratory purposes, consider using reagent alcohol instead of SDS. Reagent alcohol is an ethyl alcohol denatured with approximately 5% methyl alcohol and further denatured with 5 parts per hundred of isopropyl alcohol. It can be obtained from most laboratory supply companies and may be obtained without a permit.
If you obtain reagent alcohol in containers exceeding 4 liters, a letterhead application must be filed with the federal Alcohol and Tobacco Tax and Trade Bureau (TTB) of the US Department of Treasury.
This publication was prepared for environmental, health and safety staff at University of Wisconsin System campuses, to assist in finding resources and information for regulatory compliance. It is not intended to render legal advice.