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24th Annual Wine, Beer & Spirits Law Conference

On September 16–17, CLE International will host the 24rd Annual Wine, Beer & Spirits Law Conference in Charlotte, North Carolina. Those attending will include the alcohol beverage industry’s leading practitioners, including in-house counsel for producers, distributors and retailers, as well as industry lawyers and state administrators. Conference topics include:

  • Updates on TTB developments and trends
  • An overview of recent developments in alcohol trade practice and trademark law
  • The significance of regulatory compliance, and the state of data security and ownership
  • Updates on the cannabis industry, including the latest legalization efforts and how it could affect the alcohol beverage industry

McDermott partner Marc Sorini serves as co-chair for the event and will also present. Other McDermott presenters will be Michael Kimberly and Anthony DeMaio.

Click here for the full agenda and registration information.




Customs and Border Protection Interim Regulations for Refunds of Excise Taxes on Imported Beer, Wine and Spirits

US Customs and Border Protection (CBP) expects to publish tomorrow Interim Regulations authorizing the refund of beer, wine, and spirits excise taxes in connection with the 2017 tax reform act’s reduced rates and credits. The Interim Regulations specify:

  1. Claims must be filed with the National Revenue Center of the Alcohol and Tobacco Tax and Trade Bureau (TTB).
  2. Claims must be filed on TTB Form 5620.8.
  3. A separate claim is required for entries made at each US port or internal revenue region.

The interim regulations will be effective on the date of publication (expected to be August 16, 2018).

CBP also initiated a 60-day comment period that will provide interested parties with opportunities to raise questions or identify issues that are not addressed in the interim regulations.

Please let us know if you have any questions about this development.




An Intro to Distribution Agreements

As a craft distiller, getting your products into the hands of consumers is, of course, critical to your business. As a general matter, state alcohol laws separate the alcohol beverage industry into three tiers (i.e., the three-tier system): the supplier tier, the wholesaler tier, and the retailer tier. To get its product to market, a supplier typically must sell to a wholesaler, which then must sell to a retailer.

Of course, state laws today contain a number of expectations to the three-tier system – for example, many states now license pub distilleries, which may produce spirits on-site (typically a function of a retailer). But generally speaking, a distiller must sell its products through wholesalers. This article will explore the terms that govern the relationship between a distiller and its wholesaler.

Read the full article.

Originally published in Artisan Spirit, Summer 2018.




TTB Issues Further Alcohol Excise Tax Guidance

On Friday, March 2, 2018, Alcohol and Tobacco Tax and Trade Bureau (TTB) issued its next round of guidance concerning the alcohol excise tax provisions of the recently enacted tax law (Tax Act). TTB has not yet addressed some of the biggest ambiguities contained in the Tax Act, such as (i) how foreign producers can assign excise tax credits to US importers and (ii) how the “Single Taxpayer Rule” will work. Nevertheless, TTB continues to make incremental progress in interpreting the Tax Act.

The March 2 guidance features the following:

  1. A new TTB Industry Circular, No. 2018-1 (March 2, 2018), announces the creation of a temporary “alternate procedure” (aka, variance) allowing wine producers to tax determine and tax pay wine of the winery’s own production stored untaxpaid at another bonded wine cellar as if the wine were removed from the producing winery’s bonded premises. Prior law allowed wineries eligible for tax credits under the small winery tax provisions to transfer their credits to another bonded winery. So, for example, an eligible small winery could transfer bulk wine in bond to a larger bonded winery for bottling without losing the tax credits. The new tax law does not contain a similar transfer provision, leading to the prospect of small wineries losing their tax credits because they transferred the wine to a bonded winery that already used up its tax credits available under the Tax Act. The alternate procedure permits a winery to tax pay the wine as if it were removed from the producing winery’s premises, allowing it to take the tax credit. The temporary alternate procedure authorized by Industry Circular 2018-1 expires on June 30, 2018.
  2. Beer, wine and spirits removed from a brewery, winery or distillery but received in bond from elsewhere can benefit from the Tax Act’s reduced rates and/or tax credits only if the taxpaying brewery, winery or distillery “produced,” “distilled” and/or “processed” the beer, wine or spirits in question. Exactly what processing qualifies the taxpaying facility for the reduced rate or tax credits will depend on specific facts and the commodity at issue.
  3. TTB further qualifies the produced/distilled/processed requirement by indicating that any production process should be made “in good faith in the ordinary course of production” and not done for purposes of obtaining a tax advantage.

Please let us know if you have any questions about these developments.




Excise Tax Relief for Breweries, Wineries and Distilleries

This post does not constitute tax advice. It summarizes changes in alcohol beverage excise tax laws to assist industry members in planning to implement the changes. Excise tax calculations and liability must be determined for each taxpayer based on numerous variables.

The new tax law formerly referred to as the Tax Cuts and Jobs Act of 2017, provides a temporary reduction in alcohol beverage excise taxes for US brewers, winemakers, distillers and beverage importers. Temporary tax relief is available for beer, wine and spirits removed from a US manufacturing facility or released from Custom’s custody after January 1, 2018, and prior to December 31, 2019. Several provisions of the new law will require the Alcohol and Tobacco Tax and Trade Bureau (TTB) to quickly promulgate new regulations. (more…)




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