U.S. Customs and Border Protection (CBP) issued a release on implementing federal excise tax relief for imports of beer, wine, and distilled spirits, and that outlines what refund procedures will apply with respect to such imports.
The CBP guidance is Cargo Systems Messaging Service (CSMS) #18-000403
A title of the new tax law (Pub. L. No. 115-97, enacted December 22, 2018), known as the Craft Beverage Modernization and Tax Reform Act of 2017 (CBMA), amended the Internal Revenue Code with respect to the tax treatment of certain alcoholic beverages.
The new legislation made numerous temporary changes to the taxes imposed on beer, wine, and distilled spirits—including a reduced rate of excise tax on qualifying beer and distilled spirits, and a credit on qualifying wines—up to certain gallon thresholds for 2018-2019.
The new tax law provides that the foreign producer is the person eligible for these benefits, but it can assign these rates or tax credits to an importer(s), provided that the quantity assigned to all importers by that producer could not exceed the quantities allowed by law.
CBP in January 2018 stated that until procedures were established and guidance issued, importers of beer, wine, and distilled spirits seeking to qualify for the excise tax relief would need to continue to pay the full excise tax rates.
The CBP guidance provides that:
CBP also provided information required for an importer to substantiate its eligibility to receive the reduced tax rates or the tax credits from the foreign producer. Importers that are assigned reduced tax rates and/or tax credits from multiple foreign producers are directed to maintain this information for each foreign producer.
For more information, contact a tax professional with KPMG’s Excise Tax Practice group:
Deborah Gordon | +1 (202) 533 5965 | email@example.com
Taylor Cortright | +1 (202) 533 6188 | firstname.lastname@example.org
© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.KPMG International Cooperative (“KPMG International”) is a Swiss entity.
Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.