For smaller alcohol producers or importers of spirits, wine or beer, the Craft Beverage Modernization Act (CBMA) has helped reduce some tax rates. However, it sometimes proved extremely challenging to actually realize these savings because claims were complex and weren’t always filed properly.
One reason for this is that U.S. Customs and Border Protection (CBP) was put in charge of this process, and many agents also found the process confusing and difficult to address. This led to many small businesses not getting the tax benefits they deserved. Fortunately, this process is set to change as of January 1, 2023.
The TTB will now administer CBMA tax benefits
In some good news for many producers and importers of alcohol, a recent change in the law has transferred responsibility for administering CBMA tax benefits from CBP to the Alcohol and Tobacco Tax and Trade Bureau (TTB). Since the TTB already handles similar responsibilities, the hope among many is that this change will fall more in line with their expertise and capabilities.
This is especially important for foreign manufacturers. The United States is a massive pool of potential buyers. No matter where they brew or produce, companies have been trying to import their products and sell them in the American marketplace for years. This required filing the appropriate paperwork, making proper payments and getting discounts under the CBMA. This new system should now simplify all of these actions for foreign manufacturers.
How do you use the new system?
Before receiving any tax benefits, foreign producers must register through the TTB’s online system. While the new system will not be fully in use until 2023, producers are able to complete their registration now in order to receive their TTB Foreign Producer ID number. This system will then allow them to log in and assign tax benefits to importers for 2023. According to the TTB, foreign producers can designate a representative from their company to create their account, such as an owner, officer or another employee.
After creating your account, foreign producers can take advantage of the resources the TTB has provided on these changes. More information for importers who wish to submit CBMA claims throughout 2023 will be provided shortly.