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CBP procedures for implementing alcoholic beverage import measures

Implementing alcoholic beverage import measures

The Craft Beverage Modernization and Tax Reform Act of 2017 (CBMA) (contained in Pub. L. No. 115-97) amended the Internal Revenue Code with respect to the tax treatment of certain alcoholic beverages. The relevant provisions of the CBMA are effective for importations made during calendar years 2018 and 2019.

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U.S. Customs and Border Protection (CBP) today issued a release that describes the procedures and requirements for implementing the CBMA measures.

Under the CBMA, reduced tax rates and/or tax credits apply for imports of certain limited quantities of distilled spirits, beer or wine imported from each foreign producer/assigning entity (as described in the CBMA). The assignments of the tax credits or reduced tax rates by the foreign producer/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, importers must substantiate that the foreign producer/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 and that the quantitative limits have not been exceeded.

CBP guidance

Today’s CBP release sets forth the procedures and requirements with regard to imports made during the 2019 calendar year and claimed to be subject to the CBMA. According to CBP, the primary change from the procedures and requirements from 2018 is the timing of the filing of the supporting documentation.

  • CBP “strongly encourages” importers claiming a reduced tax rate or tax rate incorporating applicable tax credits as permitted by the CBMA for imports made during the 2019 calendar year to do so at the time of entry summary.
  • Importers must use the CBMA flag (Product Claim Code “C”) to identify entry lines for which the importer has received a CBMA assignment from a foreign producer/assigning entity and for which the CBMA rate is claimed, and declare the CBMA rate.
  • Importers are to only use the CBMA flag when claiming the CBMA rate (which is a declaration that the importer has received a CBMA assignment from a foreign producer/assigning entity), whether at the time of entry summary filing or the filing of a post-summary correction.
  • For those importers that have liquidated entries for which they would like to claim the CBMA rate, the importer may file a protest. Importers filing protests claiming the CBMA rate need to identify “CBMA” in the protest issue dropdown.

CBP stated that it will process and liquidate calendar year 2019 CBMA claims on a monthly basis according to date of entry. CBP will begin its review with the oldest entry on file with a CBMA claim and work forward chronologically.  If the importer has a complete, properly submitted 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 entries made after April 2, 2019, 2019 CBMA claimants are directed to file complete 2019 CBMA claims by the 15th calendar day of the month following the month of entry summary date to allow for proper CBP review and liquidation with applicable CBMA benefits. Importers may file a post-summary correction, within the applicable filing period, for completion or substantiation of the CBMA claim.  For liquidated entries, an importer is not precluded from filing a protest to complete or substantiate CBMA claims.

For a complete CBMA claim to be considered, the importer must provide CBP with a complete and accurate CBMA spreadsheet, controlled group spreadsheet, and assignment certification. Missing, incomplete or inaccurate documents may result in the liquidation of entries at the higher non-CBMA rate.


For more information on this topic or to learn more about KPMG’s Trade & Customs Services, contact:

Doug Zuvich
Partner and Global Practice Leader
T: 312-665-1022
E: dzuvich@kpmg.com

John L. McLoughlin
Principal and East Coast Leader
T: 267-256-2614
E: jlmcloughlin@kpmg.com

Andy Siciliano
Partner and National Practice Leader
T: 631-425-6057
E: asiciliano@kpmg.com

Luis (Lou) Abad
Principal, Washington National Tax
T: 212-954-3094
E: labad@kpmg.com

Irina Vaysfeld
Principal
T: 212-872-2973
E: ivaysfeld@kpmg.com

Amie Ahanchian
Managing Director
T: 202-533-3247
E: aahanchian@kpmg.com

Robert Waldrop
Principal
T: 212-954-8117
E: rwaldrop@kpmg.com

Gisele Belotto
Managing Director
T: 305-913-2779
E: gbelotto@kpmg.com

Christopher Young
Principal
T: 312-665-3229
E: christopheryoung@kpmg.com

Andy Doornaert
Managing Director
T: 313-230-3080
E: adoornaert@kpmg.com

George Zaharatos
Principal
T: 404-222-3292
E: gzaharatos@kpmg.com

Jessica Libby
Managing Director
T: 612-305-5533
E: jlibby@kpmg.com

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