
TTB recently announced a temporary rule concerning reduced federal excise tax rates or credits for certain quantities of beer, wine, and distilled spirits imported into the United States. The temporary rule provides procedures for foreign producers and importers to take advantage of the Craft Beverage Modernization Act (CBMA) tax benefits.
In 2017, the CBMA reduced tax rates for the production and importation of beer and distilled spirits and certain tax credits for wine. For example, with respect to importation, a foreign distilled spirits producer may assign a reduced tax rate of $2.70 per proof gallon on the first 100,000 proof gallons imported, and $13.34 per proof gallon on the next 22,130,000 proof gallons imported into the United States. Thus, if an overseas manufacturer exported over 22,213,000 proof gallons to the US in a given year, this would account for approximately $4.7 million in federal excise tax savings.
Previously, the importer of alcohol who had an assignment from the foreign producer received the reduced excise tax benefit upon import. Under the new changes, importers are no longer eligible for the reduced CBMA tax rates when paying taxes to the CBP; instead, the importer would be required to pay the full tax rate initially to the CBP, and then later submit a refund claim to the TTB.
Importers should be aware of the new process and timing for payment in order to avoid business disruption, and to ensure they receive the reduced tax rates that they are entitled to.
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