U.S. Customs and Border Protection (CBP) today announced the issuance of new procedures and guidance that revises previously issued CBP guidance concerning certain provisions under the part of the new U.S. tax law known as the “Craft Beverage Modernization and Tax Reform Act of 2017” (CBMA).
The CBMA is part of the new U.S. tax law (Pub. L. No. 115-97) enacted December 22, 2017. The provisions of the CBMA are effective for two years, during calendar years 2018 and 2019.
Under the CBMA, reduced tax rates and/or tax credits are available for imports of certain limited quantities of distilled spirits, beer or wine imported from each foreign producer or “assigning entity.”
The assignments of tax credits or reduced tax rates by the foreign producer or assigning entity to all importers may not exceed the quantities allowed by law. Thus, for an importer to be eligible to receive a reduced tax rate or a tax credit, the importer must substantiate that the foreign producer or assigning entity has assigned an allotment of its reduced tax rate or tax credits to the distilled spirits, beer or wine imported by that importer.
Today’s CBP guidance—CSMS #18-00609—addresses the foreign assignment aspect of CBMA for 2018 entries, and states that CBP will issue, at a later date, information about 2019 entries as well as separate procedures and requirements addressing the CBMA’s temporary changes to the tax classification of certain wines—including wines containing more than 14% but not more than 16% alcohol by volume.
Today’s CBP release sets forth instructions and procedures including the following:
Today’s release states that CBP will process and liquidate claims for entries made in calendar year 2018, beginning January 31, 2019. CBP will begin its review with the oldest entry on file with a CBMA claim and work forward chronologically. CBP cautions that any 2018 CBMA claims that are not substantiated with the required documentation by January 31, 2019, are at risk of being liquidated without the benefit of the CBMA rate. If the importer has a complete and valid claim and the assignment limit has not been reached at the time of CBP review, CBP will liquidate the entry and apply the CBMA rate.
For more information, contact a tax professional with KPMG’s Excise Tax Practice group:
Deborah Gordon | +1 (202) 533 5965 | firstname.lastname@example.org
Taylor Cortright | +1 (202) 533 6188 | email@example.com
Or for more information on this topic or to learn more about KPMG’s Trade & Customs Services, contact:
John L. McLoughlin
Luis (Lou) Abad
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