Executive summary: Importers must apply to TTB to claim credits for alcohol excise tax
Due to a change in law, effective Jan. 1, 2023, importers of alcohol will need to apply to TTB directly to claim reduced rates or refunds of alcohol excise tax. The TTB issued guidance sets forth the procedures for implementation of the new changes. Specifically, the guidance (1) requires foreign producers to register with TTB prior to assigning tax benefits to importers; (2) establishes the information foreign producers must submit in order to register and assign those benefits; and (3) establishes the information that importers must provide to claim a refund based on the foreign producer’s assignment of tax benefits to them.
The US Department of Treasury Alcohol and Tobacco Tax and Trade Bureau (“TTB”) recently issued a release about the reduced tax rates and tax credits for wine, beer, and distilled spirits produced in the United States.
A change in law transferred responsibility for administering the Craft Beverage Modernization Act (“CBMA”) tax benefits for imported alcohol from U.S. Customs and Border Protection (“CBP”) to the TTB beginning with products entered for consumption in the U.S. on or after Jan. 1, 2023.
In the release, the TTB announced that foreign alcohol producers may now register using the online portal myTTB system for purposes of receiving or assigning tax benefits afforded by the Craft Beverage Modernization Act (“CBMA”). Once the foreign producer’s registration is complete, it will receive a TTB Foreign Producer ID, and will then be able to claim or assign tax benefits to importers through the myTTB system. When filing the refund claim, the foreign producer will provide the importer with its TTB Foreign Producer ID who will then include it in the information submitted to the TTB when a CMBA import refund claim.
A user guide has also been provided for the new system, which provides step-by-step instructions for the foreign producer registration and tax benefit assignment processes.
For more information, please consult with your tax advisor.