I am reaching out to you on behalf of the Alcohol and Tobacco Tax and Trade Bureau (TTB), within the U.S. Department of the Treasury. Effective January 1, 2023, there will be changes to the Craft Beverage Modernization Act (CBMA) procedures for foreign producers who export alcohol beverages into the United States. We are seeking […]
I am reaching out to you on behalf of the Alcohol and Tobacco Tax and Trade Bureau (TTB), within the U.S. Department of the Treasury. Effective January 1, 2023, there will be changes to the Craft Beverage Modernization Act (CBMA) procedures for foreign producers who export alcohol beverages into the United States. We are seeking assistance in sharing this information, including informing your members who export alcohol beverage products to the United States of the publication of a temporary rule implementing these upcoming changes.
As background, beginning in 2018, the CBMA provisions in the Tax Cuts and Jobs Act provided reduced tax rates and tax credits on certain limited quantities of distilled spirits, wine, and beer produced in or imported into the United States. From 2018 through 2022, U.S. Customs and Border Protection (CBP) has administered the application of the tax benefits to imported products.
Subsequent changes to the law transferred responsibility for administering these tax provisions for imported alcohol from CBP to TTB, and changed the method for importers to take the tax benefits to a refund system, effective January 1, 2023. These statutory changes require that importers who want to receive the tax benefits must pay the full tax at importation and then apply for a refund from TTB for the amount of the tax benefit. An importer may not obtain a refund unless the foreign producer has assigned the tax benefits to the importer. Foreign producers have a limited quantity of tax benefits they may assign on distilled spirits, wine, or beer to one or more importers.
Under TTB’s new regulatory provisions, foreign producers seeking to assign tax benefits for their products to importers will need to register online with TTB and assign their tax benefits. Information collected directly from the foreign producer will be used to verify refund claims submitted by the importers who elect to receive the benefits. TTB plans to deploy the foreign producer registration system in October 2022 and the importer claims system by March or April 2023.
This new process will be a change from how foreign producers previously assigned their tax benefits. TTB is currently soliciting comments from interested parties, including foreign producers, on these requirements through a concurrent notice of proposed rulemaking published at Docket No. TTB-2022-0009, Notice No. 215. Please direct your stakeholders to this docket to share comments.
We will issue related guidance and training in the near future and plan to set up informational meetings to further discuss the changes and related guidance. Please let us know if there is a particular contact within the embassy for such communications. In the meantime, if you have specific questions about the CBMA changes, please submit your inquiry using the TTB contact page.
Truly yours,
(Mr.) Trevar D. Kolodny
International Trade Officer
International Affairs Division
Alcohol and Tobacco Tax and Trade Bureau
