New 2023 Rules for Alcohol Importers and Foreign Suppliers
The Craft Beverage Modernization Act (CBMA) is a provision in the Tax Cuts and Jobs Act of 2017 that lowered taxes on all beverage alcohol producers, big and small, foreign and domestic. In 2020, the tax cuts became permanent. Effective as of January 1, 2023, the Treasury Department–particularly, the federal Alcohol and Tobacco Tax and Trade Bureau (TTB)–is in charge of administering the CBMA provisions for imported alcohol, instead of U.S. Customs and Border Protection.
To manage the CBMA import claims, the TTB has developed two separate modules in its online system called “MyTTB”. The first module is for foreign producers who want to assign the CBMA tax benefits for their products. The second module is for importers to submit refund claims to TTB. The modules will allow TTB to receive import claims electronically and validate them by checking them against information from U.S. Customs and Border Protection.
Key Requirements
- Foreign producers must register with the TTB in order to assign the CBMA tax benefits to US importers.
- Importers are required to pay the full tax rate at the time of entry and then submit a refund claim to the Treasury Department to get the lower tax rates.
Registration Required by Foreign Suppliers
Foreign producers must register with TTB before assigning the CBMA tax benefits to importers. The foreign producers will need to provide information such as business details, FDA Food Facility Registration number, and ownership information. Once registered, TTB will issue a TTB Foreign Producer ID, and the foreign producer can make assignments through the online system. To assign benefits to importers, foreign producers will need to provide information such as the year of the assignment, the importer, the commodity, the reduced tax rate, and the quantity of product.
Full Payment and Refund Request Required by Importer
For importers, the full tax rate must be paid to U.S. Customs and Border Protection for beer, wine, and distilled spirits entered for consumption after January 1, 2023. To get the lower tax rates, the importer must file a refund claim with TTB after each calendar quarter. The importer cannot claim a refund unless the foreign producer has assigned their CBMA tax benefits to the importer using the myTTB online system. Before claiming a refund, the importer must submit information in their customs entry filings identifying the products they want to claim a refund for, such as the commodity and quantity.
Detailed information for foreign suppliers and importers is available on the TTB website: https://www.ttb.gov/alcohol/cbma-imports. Federal excise tax rates–both the full Internal Revenue Tax (IRT) rates and the reduced CBMA rates–are available in the TTB’s chart at https://www.ttb.gov/images/pdfs/cbma/ACE_CBMA_Tax_Rates_Table.pdf.
Do you have questions about the new federal rules for alcohol imports? Contact us to schedule a consultation with a beverage attorney.
Because we’re attorneys: Disclaimer. Posted February 5, 2023.
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