Importing alcoholic beverages and wondering where your reduced tax rates and credits are? Customs and Border Protection prepares to implement the system to allow you to file for your refunds.
The Craft Beverage Modernization and Tax Reform Act of 2017 didn’t just help domestic producers, it lowered excise taxes for imported beer and distilled spirits and allowed for a tax credit on imported wines in addition to domestic wines. U.S. Customs and Border Protection was tasked with establishing procedures for an importer to receive a lower effective excise tax rate on qualifying imports of beer, wine, and distilled spirits. And the U.S. Customs and Border Protection just announced that importers looking to obtain refunds should be able to start claiming those within the month.
A brief recap of happenings so far:
Back in January, U.S. Customs and Border Protection issued a message to alcohol importers letting them know that:
Until such procedures are established and guidance is issued, importers of beer, wine, and distilled spirits seeking to qualify for excise tax relief, based on qualifying assignments made by a foreign producer, should continue to pay the full excise tax rates. Importers will be provided with the opportunity to seek the applicable excise tax relief, on entries made after the law went into effect, once forthcoming procedures and guidance have been issued.
Then in June, the CBP let everyone know they were working on the guidance and that refund requests would be processed no earlier than January 15, 2019.
In late August, they began implementing the rules for importers to be able to flag assignments – the allotments of the reduced tax rates or tax credits from the foreign producers/assigning entities – to importers to facilitate the implementation of verifying/tracking the right to a refund.
Last week the CBP announced further guidance on the subject and an update to the ongoing implementation and stated that later this month, it would provide documentation and tracking methods for importers to track and to obtain verification of assignment from foreign producers.
For those looking to find out more, the U.S. Customs and Border Protection has been continually updating and FAQ on the subject to help with the guidance and address a host of issues such as:
- I am an importer of spirits and have received a letter approving a reduced tax rate from the Alcohol and Tobacco Tax and Trade Bureau (TTB). Should I utilize the special tax rate?
- What are the maximum quantities that an assigning entity can allocate per tax rate or credit for foreign produced alcohol?
- How can I take new reduced tax rates and tax credits for domestically produced alcohol?
- When should I consider filing a protest using the CBMA issue?
- How do I receive a CBMA reduced tax rate for wine with 14% to 16% alcohol content by volume?
- When should I use the CBMA flag?
- Who can I contact for more information or questions?
- Is there guidance from CBP regarding the tax rate for wines containing more than 14% but not more than 16% alcohol by volume?
- How does an importer identify imported alcohol for which they have received a CBMA allocation from a foreign producer/assigning entity?
- What constitutes a complete CBMA claim?
- How should a Non-paper protest be provided to CBP?
- How is the spreadsheet(s) submitted to CBP for review?
This all means that within the month, importers should be able to start obtaining those lower rates and credits.