CBMA Update Note – Administration of CBMA Tax Benefits for Importers to Transition to TTB

Oct 25, 2022 Miami, FL

By: Louis Terminello, Esq. and Brad Berkman, Esq.

The Craft Beverage Modernization Act, or “CBMA,” created reduced tax rates for smaller producers of beer, wine, and distilled spirits produced. The CBMA also extended the tax benefit to importers of the same products. However, any casual conversation with an importer of wine, beer, and/or spirits quickly revealed that the process and procedures in place for claiming this tax benefit were perplexing. Like most importation issues concerning beverage alcohol, US Customs and Border Protection (“CPB”), was tasked with administering the CBMA. Unfortunately for importers, the CPB process was complex and outside the scope of their expertise. In fact, many customs brokers tasked with clearing alcohol into the US stream of commerce, among virtually all other imported commodities, were just as confused with the process as their importer clients.

Many claims were either never filed or incorrectly filed, resulting in lost importer revenue. Fortunately, (we are optimistic) recent changes have transferred responsibility for the administration of the CBMA to the Alcohol Tax and Trade Bureau (“TTB”) and is to take effect January 1, 2023. TTB has published a temporary rule implementing the new provisions and the procedures for importers to follow, along with their foreign producers, and leaving open the opportunity for comments on the provision by issuing a notice of proposed rulemaking.

TTB on its website indicates that importers will be required to file for drawback. Importers will be required to pay the full amount of excise tax due at entry and then file refund claims on a quarterly basis covering entries for that quarter. Moreover, and importers be cognizant of the following, foreign producers must register with TTB and assign their CMBA benefit to the importer of record using the TTB online system. Assignments on letterhead will not be accepted as they previously have been.

Many upper tier industry members, including importers, are far more familiar with TTB online systems and procedures than CBP procedures. Hopefully, this change of CBMA administration will prove to be an effective vehicle for importers exercising the rights granted to them under the CBMA and ultimately adding to their bottom line.

Feel free to contact us if you need assistance in navigating the claims process. We will advise as to any developments during the comment and rule-making process.

About Greenspoon Marder

Greenspoon Marder LLP is a full-service law firm with over 240 attorneys and more than 20 office locations across the United States. With operations from Miami to New York and from Denver to Los Angeles, our firm attracts some of the nation’s top talent in key markets and innovation hubs. Our core practice areas include Real Estate, Litigation, and Transactional Services, complemented by the capabilities of a full-service firm. Greenspoon Marder has upheld a spot on The American Lawyer’s Am Law 200 as one of the top law firms in the U.S. since 2015, and our goal is to provide exceptional client service by developing a thorough understanding of each client’s business needs and objectives in order to provide strategic, cost-effective solutions.

MEDIA CONTACT

Natalie Villanueva, Director of Marketing
954.333.4308 | [email protected]

This Greenspoon Marder LLP Client Alert is issued for informational purposes only and is not intended to be construed or used as general legal advice nor a solicitation of any type. Please contact the author(s) or your Greenspoon Marder LLP contact if you have any questions regarding the currency of this information. The hiring of a lawyer is an important decision. Before you decide, ask for written information about the lawyer’s legal qualifications and experience.

Previous Next

News

CBMA Update Note – Administration of CBMA Tax Benefits for Importers to Transition to TTB

Share

News & Events

News & Events