TTB announcement: Permanent reduction of excise tax rates for beer and spirits, tax credits for wine

Permanent reduction of excise tax rates for beer

The U.S. Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau (TTB) issued a release noting that the temporary reduced tax rates and tax credits originally made available by the Craft Beverage Modernization Act (CBMA) provisions of the 2017 tax law (Pub. L. No. 115-97), the law that is commonly referred to as the “Tax Cuts and Jobs Act” (TCJA), are now permanent.

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As noted in the TTB release, the Consolidated Appropriations Act, 2021 (enacted December 27, 2020) made permanent most CBMA provisions of the TCJA, including:

  • Reduced federal excise tax rates on beer and distilled spirits, and certain tax credits for wine
  • Adjusted alcohol content for certain still wine tax classes from 14% to 16% alcohol by volume
  • Lower tax rates for certain meads and low alcohol wines
  • Transfers of beer in-bond between brewers that are not of the same ownership

The legislation also provides new measures, including:

  • Restrictions on the transfer of bottled distilled spirits in-bond
  • Changes to the type of processing activities that qualify for reduced tax rates for distilled spirits
  • Changes to the “single taxpayer” provisions

Read TaxNewsFlash


For more information, contact a tax professional with KPMG’s Excise Tax Practice group:

Taylor Cortright | +1 (202) 533 6188 | tcortright@kpmg.com

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