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CBP Issues Guidance on Alcohol Excise Tax Provisions

Yesterday, Customs & Border Protection (CBP) issued Guidance on the alcohol excise tax provisions contained in the Tax Cuts & Jobs Act (Tax Act). Key points

  1. Importers must continue to pay the full excise tax rate (not the rates reduced by the Tax Act’s lower rates or credits) upon importation.
  2. CBP and TTB are working on regulations to allow CBP to issue refunds retroactively.
  3. In anticipation of the new regulations, CBP advises importers to file protests on liquidated entries where a reduced rate or credit may apply.
  4. CBP will not process refund requests any earlier than January 15, 2019.
  5. The Guidance includes a detailed list of information an importer will need to provide in order to substantiate its eligibility to receive reduced rates and/or credits.

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




Five Issues That Impact Craft Brewers

In an article published by The New Brewer, Marc Sorini discusses five issues most likely to have a meaningful impact on craft brewers in the coming years, including:

  1. The Craft Beverage Modernization and Tax Reform Act’s (CBMTRA) new tiered excise tax rate structure, its extending benefits to foreign producers, and its authorization for brewers to transfer beer in bond between breweries of different ownership.
  2. The Sixth Circuit’s published opinion in Byrd v. Tennessee Wine and Spirits Retailers Association, affirming a decision finding that the “durational-residency” requirements imposed by Tennessee law for alcohol beverage retail licensees are unconstitutional under the “dormant” Commerce Clause.
  3. The TTB’s creation of a new unit within its Trade Investigations Division to focus on trade practice enforcement.
  4. The opinion in Mission Beverage Co. v. Pabst Brewing Co. from the California Court of Appeals, which found that “an existing distributor’s receipt of the ‘fair market value of the affected distribution rights’ under [the California statute] does not necessarily make that distributor whole.”
  5. The US District Court for the Northern District of California’s decision in a putative class action alleging that the labeling and marketing of a successful California-based craft brewery was false and deceptive.

Access the full article.

Originally published in The New Brewer, May/June 2018.




TTB Announces Extension of Tax Credits for Wines Stored at Bonded Wine Cellars and Bonded Wineries

On May 17, the Alcohol and Tobacco Tax and Trade Bureau (TTB) issued an Industry Circular, No. 2018-1A, clarifying that under the recently-enacted tax reform legislation (Tax Act), wineries may tax determine and tax pay wine they produce and that is stored untaxpaid at another bonded wine cellar or bonded winery as if the wine were removed from the producing winery’s bonded premises.

Among the Tax Act’s many changes to the Internal Revenue Code, the new legislation (which went into effect on January 1, 2018) prescribed new tax credits for wine and suspended (through 2019) the previous tax credit. The Tax Act also suspended the prior law’s transfer provision, which allowed small wineries eligible for tax credits to transfer their credits to another bonded winery. This threatened to leave small wineries transferring their wines to larger bonded wineries without their tax credits. To apply the tax credits to such wines under the Tax Act, the producing winery would need to physically bring the wine back to its premises and remove and tax pay the wine. (more…)




TTB Publishes Additional Tax Act Guidance on 5010 Wine and Flavor Credits

Today, TTB published additional Tax Act guidance on its website. Three new clarifications address the interaction of the new Tax Act rates/credits with the wine and flavor credits available under 26 U.S.C. § 5010. The clarifications are:

  1. TTB re-confirms that the 5010 credit applies to spirits subject to the Tax Act’s reduced rates, but the 5010 credit cannot reduce the effective rate of tax on any spirit to below zero.
  2. TTB indicates that the effective rate of tax on products receiving 5010 flavor credit will vary, depending on the applicable Tax Act rate applied to the finished product.
  3. The wine base rates, before any reduction through Tax Act credit allowances, are to be used when calculating the wine content credit applied to a spirit under Section 5010.



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