ALCOHOL LAW ADVISOR
ALCOHOL LAW ADVISOR
Regulatory and Distribution Law Updates for the Alcohol Industry
ALCOHOL LAW ADVISOR
Regulatory and Distribution Law Updates for the Alcohol Industry
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Federal Alcohol Excise Taxes 101

There are many laws at both the federal and state level that govern the production and distribution of distilled spirits. For example, craft distillers must comply with licensing and permitting requirements, trade practice laws, advertising restrictions, and, depending on the jurisdiction, alcohol franchise law. One of the most fundamental—and most complex—areas of law governing distilled spirits is excise taxes. An article authored by McDermott’s Bethany K. Hatef in the Winter 2020 issue of Artisan Spirit Magazine provides a high-level overview of the federal alcohol excise tax system and some specific features that apply to distilled spirits, and also explains the current status of the Craft Beverage Modernization Act, the legislation temporarily providing for reduced tax rates for certain amounts of distilled spirits. Access the full article. Originally published in Artisan Spirit Magazine: Winter 2020.

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Further CBP Guidance on Craft Beverage Modernization Act

Earlier this week, US Customs and Border Protection (CBP) issued further guidance on the procedures for importers to take the lower tax rates and credits available under the Craft Beverage Modernization Act (CBMA). Key points of the new guidance: CBP will process drawback claims on an oldest-entry-first basis. Failure to substantiate drawback claims by January 31, 2019, risks a loss of the CBMA rates/credits for the entries in question. Going forward, every entry seeking to claim CBMA rates/credits must be accompanied by a CBMA Spreadsheet based on a template provided by CBP. Each importer must also submit a Controlled Group Spreadsheet, based on a template provided by CBP, for each controlled group it belongs to (foreign producers have the option of providing this information directly to CBP). Importers are responsible for immediately reporting to CBP any changes to the information in the Controlled Group Spreadsheet. Each foreign producer must provide their...

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New CBMA Guidance Further Clarifies Excise Tax Rules for Imported Beverages

Last week Customs & Border Protection (CBP) issued additional guidance on the Craft Beverage Modernization Act (CBMA) rules for applying the CBMA lower excise tax rates (for beer and distilled spirits) and credits (for wine) to alcohol beverages imported from other countries. The new guidance provides further clarity on the procedures required to make claims for drawback (refund) of taxes paid at the non-CBMA rate on product imported since the beginning of calendar 2018. It also indicates that CBP expects to provide additional guidance this month (October) on taking the lower rates and credits contemporaneously with importing additional product going forward. Among other things, CBP apparently will soon publish: (1) a Controlled Group Spreadsheet to track eligibility for the lower rates and credits; and (2) an Assignment Certification that foreign producers must execute and their importers must file in order to claim the CBMA lower rates and credits. In...

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