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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Winds of Change Blowing for Craft Brewers

For those who follow developments in the law and craft brewing with equal passion, every year has its share of substantial issues. This year has been no exception, with a pending Supreme Court case; a substantial upswing in federal trade practice enforcement activity; a massive rewrite of US Tax and Trade Bureau (TTB) labeling and advertising regulations; and prospects for extending the biggest cuts in the excise tax on beer since the repeal of Prohibition. As these developments play out over the next year, we may see changes translate into the marketplace. Find out what you can expect. Access the full article. Originally published in The New Brewer, May/June 2019.

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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...

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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. The new law also modifies existing sections of federal excise tax laws so that commonly owned manufacturers and importers get "one bite at the apple" for each beverage...

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“Chairman’s Mark” Includes CBMTRA Provisions to the Tax Cuts and Jobs Act

America's brewers, distillers and wineries cannot yet raise a glass to recalibrated federal excise taxes, but they got one step closer to be able to do that on Tuesday. That is because the provisions of the Craft Beverage Modernization and Tax Reform Act (CBMTRA) (S. 236)—including the excise tax changes that would benefit America's small brewers, distillers and wineries—have been included in Senate Finance Committee Chairman Orrin Hatch's revised "Chairman's Mark" to the Tax Cuts and Jobs Act that is now being considered by the Senate Finance Committee. The inclusion of the CBMTRA is a very significant positive development for all producers of alcoholic beverages, but particularly for small brewers, distillers and wineries. Sen. Rob Portman (R-OH) offered an amendment to include the CBMTRA to the Chairman's "mark" to the underlying bill and Chairman Hatch agreed to that. Co-sponsors of Portman's amendment included Sens. Bill Cassidy (R-LA), Johnny Isakson...

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Approaches to Spirits Direct Shipping

Direct-to-consumer (DTC) sales of alcohol beverages have been a hot topic in the alcohol industry for the last two decades. The wine direct-shipping landscape has changed greatly over the past 15 or so years, most dramatically by the US Supreme Court’s decision in Granholm v. Heald. Today nearly evert state—plus the District of Columbia—allows wineries to ship wine across state lines directly to in-state consumers. The same cannot be said for spirits. There are, however, a few avenues distillers may consider to get their products delivered to consumers around the country. Further, an initiative is underway to pursue litigation to secure DTC rights for spirits. Although it is far too early to speculate about the outcome of any such litigation, the current effort suggests the potential for interstate distiller-to-consumer sales in the coming years. Of course, lingering ambivalence toward spirits (as opposed to wine) by the public, lawmakers, and alcohol...

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