To read Malkin Law’s (written by Ashley Hanke) latest for Artisan Spirit magazine on vital tax reductions for craft distillers, click here.     .  

On October 16th, 2018, the CBP issued additional guidance for importers which revised previous CBP guidance on the implementation of the Craft Beverage Modernization Act (CBMA) and provided importers with pointed specifics on how to take advantage of reduced tax rates on imported alcohol beverages.   PROCEDURES AND REQUIREMENTS First, the CBMA flag should be used to identify entry lines for which the importer has received a CBMA assignment from a foreign producer/assigning entity and for which the CBMA rate is claimed.  Effective immediately, importers claiming a reduced tax rate or tax rate incorporating applicable tax credits as permitted by the CBMA (hereinafter “CBMA rate”) should do so at the time of entry summary. If and importer has not already been using the CBMA flag to flag entries, going forward, importers will use the CBMA flag to identify entry lines for which the CBMA rate is claimed and declare the lower tax rate. Additionally, importers should only use the CBMA flag when claiming the CBMA rate, whether at the time of entry summary filing or the filing of a Post Summary Corrections (“PSC”). For entries filed since January 1, 2018 that have not liquidated and for which an importer wants to make a CBMA claim, effective immediately: If not flagged, importers should file a PSC with the CBMA flag and the CBMA rate. If flagged but the CBMA rate has not been claimed, importers should file another PSC with the CBMA rate and the CBMA flag. For any entries filed since…

Domestic alcohol producers are reaping the tax benefits from the Craft Beverage Modernization and Tax Reform Act (CBMA), which took effect January 1, 2018. Importers, who are also eligible for the tax cuts through appointment by foreign producers, have not received much guidance on the implementation of CBMA. Importers will be pleased to hear that Customs and Border Protection (CBP) has recently announced that further specific guidance and instructions on how to receive reduced tax rates and tax credits will be released in mid-October via the CSMS messaging system. An announcement summarized the process that importers of certain limited quantities of distilled spirits, beer, and wine will follow once they are given the green light. For an importer to be eligible to receive the reduced tax rates, they will have to substantiate that the foreign producer/assigning entity has assigned an allotment of its reduced tax rate or tax credits to the distilled spirits, beer, or wine imported into the U.S. CBP will process and liquidate claims for entries made in calendar year 2018, beginning January 31, 2019 for importers. CBP will begin its review with the oldest entry on file with a CBMA claim and work forward chronologically. Any 2018 CBMA claims that are not substantiated with the required documentation byJanuary 31, 2019 are at risk of being liquidated without the benefit of the CBMA rate.  If the importer has a complete and valid claim and the allocation limit has not been reached at the time of CBP review, CBP will liquidate the entry and apply theCBMA rate. As will be discussed in greater detail in the mid-October 2018 CSMS message, importers will signal…