The Alcohol, Tobacco, and Firearms rules concerning the use of alcohol in cosmetics are straightforward and easy to understand. The first ATF rule is that beverage alcohol may not be used in cosmetics. Technically, the ATF considers you to be selling beverage alcohol without a license, proper reporting, and payment of taxes. That being said, beverage alcohol may be used as a processing aid (such as to reduce foam when filling bottles of liquid soap) or in processes where the natural chemical reaction of the process catalyzes or alters the beverage alcohol from its original form such as in true soap made with beer or wine.

Specially denatured alcohol (SDA) must be used instead. However, many types of denatured alcohol exist in the marketplace, and some contain toxic compounds that are not suitable for skin contact. These forbidden formulas include the paint and lacquer thinners available from the hardware store. Denatured alcohol that is legal for use in cosmetics may be directly distributed only to permitted users. Many of the permitted formulas contain compounds such as phthalates and coumarins. Some formulas use essential oils as denaturants instead, which can restrict your fragrance choices since the denatured alcohol will smell like the essential oil used as the denaturant. SDA 40 B is one of the more popular options because it is denatured with a combination of other alcohols and Bitrex.

To prevent ethyl alcohol in cosmetics from being diverted illegally for use as an alcoholic beverage, the Food & Drug Administration also recommends that it be "denatured." Added "denaturants" make alcohol undrinkable. Among the specially denatured alcohols acceptable for use in various cosmetics are SD Alcohol 23-A, SD Alcohol 40 and SD Alcohol 40-B.

Once you have chosen the SD alcohol compatible with your project, you must legally obtain it to use it in a formulation. Most sellers of SD alcohol can legally allow you to purchase up to 5 gallons of denatured alcohol per the calendar year for testing purposes. Once you purchase 5 gallons or more in a calendar year are required to file for a permit with the Tax & Trade Bureau of the United States. Sellers of SDA alcohol must possess an ATF dealers permit to sell the material and may only sell SD alcohol to permitted users. A permitted user is an individual or an organization that registers with ATF and pays the $250 annual tax.

Obtaining a permit from ATF only allows you to purchase SD alcohol. It does not allow you to sell any products you made from it. ATF must approve your final formulation before you can sell the finished product. You must submit your formula (and possibly samples) to the ATF national laboratory for examination where an ATF agent will approve or reject your recipe. Once approved, it may be sold without restriction to unlicensed individuals who may use it as they desire, but no one may attempt to convert it to beverage alcohol.

After you have procured an ATF license to ship products containing alcohol and paid the required fees, you still need to be aware of the unique requirements for transporting dangerous goods. Two organizations govern the shipment of hazardous products like alcohol.

The Department of Transportation (DOT) has created rules for shipping dangerous goods by ground transport, while the International Air Transport Association (IATA) has guidelines for shipping hazardous materials via air. The IATA rules are much more stringent than the DOT ground shipping rules.

Specially Denatured Alcohol (often called Perfumer’s Alcohol) is considered dangerous because of its flammability. Bulk shipments of SDA alcohols or products containing SDA alcohols must conform to the carrier’s shipping rules. These rules include the selection of a proper container, proper labeling of the container and any packaging, and the preparation of appropriate shipping documents. Additionally, training is required for all shippers to ensure compliance with these requirements.

For the producers of consumer products, exemptions from these rules do exist. DOT allows an exemption from the labeling and documentation requirements for consumer commodities. IATA, however, does not permit exemptions. Consumer commodities are defined as products packaged and designed for direct use by consumers, such as a bottle of perfume or linen spray.

Both DOT and IATA rules provide limits on the size and construction of the inner containers as well as the amount of product per package. Air Parcel, Express and Priority Mail are air shipments. United States Postal Service (USPS) forbids shipment of alcohol via these services. Parcel Post may be used, but there are limits on the percentage of alcohol that may be shipped using this method. Additionally, your outer boxes must be labeled "ORM-D" and "inner packings comply with prescribed requirements."

UPS ground service is the most straightforward option for the shipment of consumer commodities, but even they have some restrictions.

1. UPS will not accept consumer commodities at UPS Stores or drop-off locations.
2. You must have a UPS account and pick-up service.
3. UPS will also allow consumer commodities for air shipments if you label and document the package correctly. Third-party software is required for documentation of all UPS air shipments plus a $35 fee applies to EACH shipment.

UPS ground shipments have several additional requirements:

1. All packages must weigh less than 20 pounds if packed in EC32 boxes (the most common type of single wall box).
2. A label bearing the notation "ORM-D" and the statement "inner packings comply with prescribed requirements" must be affixed to the outside of the box.
3. The inner packages must be tightly sealed and properly cushioned to prevent breakage and spillage. All lids must be sealed to prevent opening during transit. Tape or tamper-evident seals are required. Secondary containment, such as over-bagging, is also desirable.
4. Glass, metal or plastic containers may be used. Glass containers may hold no more than 500 mL. Metal or plastic containers may hold up to one liter.

While these are ground restrictions, air shipments may require smaller containers and additional documentation to be within compliance.

As you can see, there is a great deal of paperwork and expense involved in shipment and resale of hazardous materials like alcohol. While SD Alcohol has its place in cosmetic formulating, it is essential to educate yourself on the safety and regulation of any and all products that you manufacture and ship so that you are aware of the requirements. Feigning ignorance does both your business and your clients a huge disservice. Save yourself unnecessary hassle and expense by educating yourself about compliance; you'll be glad you did!

Feeling undeterred by the taxes, fees and regulatory documentation required for your company to be compliant with manufacturing and shipping non-beverage alcohol products? You will need to acquaint yourself with the regulatory agencies involved:

Alcohol and Tobacco Tax and Trade Bureau (TTB.gov):   https://www.ttb.gov/ssd/faqs.shtml#no
Information for Specially Denatured Spirits Applicants (Application): https://www.ttb.gov/tax_audit/p51503.pdf
Bureau of Alcohol, Tobacco & Firearms (ATF.gov): https://www.ttb.gov/industrial/index.shtml
US Food & Drug Administration (FDA.gov):https://www.fda.gov/cosmetics/labeling/claims/ucm2005201.htm
US Dept. of Transportation Pipeline and Hazardous Materials Safety Administration (PHMSA): https://www.phmsa.dot.gov/registration/registration-overview
US Dept. of Transportation: https://www.phmsa.dot.gov/
International Air Transport Association: https://www.iata.org/whatwedo/cargo/dgr/Pages/index.aspx
Ohio State Liquor License Agency: https://www.com.ohio.gov/liqr/permitClasses.aspx (You will need to check with your own state liquor license agency to be sure you are within local compliance requirements)
US Postal Service (USPS.com): https://www.usps.com/ship/shipping-restrictions.htm
United Parcel Service (UPS.com): https://www.ups.com/us/en/help-center/packaging-and-supplies/special-care-shipments/hazardous-materials/definition.page
Federal Express (FedEx.com): https://www.fedex.com/us/hazardous-materials/