The Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau has issued a final rule that makes permanent, with two changes, temporary regulations published in September 2022 relating to reduced excise tax rates and tax credits for imported distilled spirits, wines, and beer.
According to TTB, the Craft Beverage Modernization Act provides for reduced rates or tax credits for beer, wine, and distilled spirits produced in or imported into the U.S. CBMA tax benefits are limited in quantity for each producer, including foreign producers. Foreign producers utilize these benefits by assigning them to U.S. importers of their products, which must pay the full tax rate and then submit a claim to TTB for a refund.
TTB states that this new rule (1) finalizes provisions that outline the processes for foreign producers to assign tax benefits to importers and for importers to accept and apply the assigned benefits to imported products, (2) clarifies that only the foreign producer that produces the product may assign the applicable benefits to importers, and (3) extends by one calendar quarter the timeframe for foreign producers to submit these assignments to TTB.
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