The Craft Beverage Modernization Act (CBMA) provisions of the Internal Revenue Code (IRC) provide for reduced rates or tax credits for certain quantities of beer, wine, and distilled spirits produced in or imported into the United States. A recent change in the law transferred responsibility for administering the CBMA tax benefits for imported alcohol from U.S. Customs and Border Protection (CBP) to Alcohol and Tobacco Tax & Trade Bureau (TTB) beginning with products entered for consumption in the United States on or after January 1st, 2023.
Accordingly, TTB is publishing a temporary rule implementing these provisions and providing procedures for foreign producers and importers. The TTB is also publishing a notice of proposed rulemaking to obtain comments on the provisions in the temporary rule, which are due by November 22, 2022.
Under the new CBMA import refund provisions of the IRC, importers must pay the full rate of tax to CBP on beer, wine, and distilled spirits entered for consumption in the United States on or after January 1, 2023. To take advantage of the CBMA tax benefits, the importer must subsequently file a refund claim with TTB using the new “myTTB online system”. Importers may file refund claims after the close of each calendar quarter covering their entries in that quarter.
An importer cannot claim a refund unless the foreign producer of the imported beer, wine, or distilled spirits has registered with TTB and assigned their CBMA tax benefits to that importer using the myTTB online system. TTB expects the myTTB online system to be available to foreign producers to register and make assignments by the end of October 2022.
In the past, foreign producers assigned CBMA tax benefits to one or more importers using a letterhead template published by CBP. For products imported on or after January 1, 2023, foreign producers will, instead, assign their CBMA tax benefits to importers through the myTTB online system, and assignments by letterhead will no longer be acceptable.
In the coming weeks, TTB has stated that they intend to release additional guidance and training materials related to implementation of the new CBMA import provisions, including the temporary rule requirements and how to use the myTTB online system. For complete instructions on how to comment on the temporary rule, please see Notice No. 215.