The Craft Beverage Modernization Act (CBMA) allows substantially reduced tax rates or credits for both foreign and United States alcohol producers. Some of this was temporary and cumbersome during the past few years, but now that these tax changes appear to be long term, TTB has developed an online system to administer the tax cuts. Most foreign producers should register with TTB if their alcohol products will be imported into the US.
This tax savings opportunity is coming up very fast, and begins in 2023. TTB is allowing signups beginning in late 2022. In the past, TTB had a much different system to handle the rules around this tax reduction.
The excise tax savings can amount to hundreds of thousands of dollars per year per distillery. Upon a proper registration, the excise tax could drop from $13.50 per proof gallon to as low as $2.70. This is an 80% reduction and would take a typical bottle of vodka from $2.14 in federal excise tax to 43 cents. This seems well worth the extra time and expense, for all but the very smallest producers. The tax reductions apply to beer and wine also.
Effective January 1, 2023, foreign alcohol producers who wish to qualify for reduced rates or credits will need to register their plant using...Continue Reading Leave a Comment