The Alcohol and Tobacco Tax and Trade Bureau (TTB) continues to provide updates on upcoming changes in tax benefits under the Craft Beverage Modernization Act (CBMA). Beginning January 1, 2023, the TTB will administer CBMA tax benefits for imported alcohol, following passage of legislation last year transferring administrative responsibility from CBP to TTB.
Importantly, the new law also changes the way in which importers will take advantage of the tax rate reductions on imported alcohol products. Starting January 1, 2023, importers must pay the full tax rate to CBP and then submit a claim to TTB for a refund.
Detailed information is available on TTB’s website.
TTBGov – Imports – Tax Benefits under the Craft Beverage Modernization Act (CBMA)
The Craft Beverage Modernization Act (CBMA) provisions of the U.S. Internal Revenue Code provide for reduced rates or tax credits for beer, wine, and distilled spirits produced in or imported into the United States. These CBMA tax benefits are limited in quantity for each producer, including foreign producers. Foreign producers utilize these CBMA tax benefits by assigning them to U.S. importers of their products. U.S. importers pay the Federal excise tax on imported beer, wine, and distilled spirits, and must receive an assignment of the CBMA tax benefits from the foreign producer to take advantage of the CBMA tax benefits.
From 2018 to 2022, U.S. Customs and Border Protection (CBP) has administered the CBMA tax provisions related to imported products.
A change in the law transferred responsibility for administering the CBMA tax benefits for imported alcohol from CBP to TTB beginning with products entered for consumption in the United States on or after January 1, 2023.
The law also changed the way in which importers will take advantage of tax benefits assigned to them. Starting January 1, 2023, importers who want to take advantage of assigned tax benefits must pay the full tax rate to CBP and then subsequently submit a claim to TTB for a refund.
Further details are available and we encourage all liquor importers to access them.
For any questions regarding this update, please contact your Western Overseas representative.