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Imports – Tax Benefits under the Craft Beverage Modernization Act (CBMA)

New Provisions

The Craft Beverage Modernization Act (CBMA) provisions of the U.S. Internal Revenue Code provide for reduced rates or tax credits for beer, wine, and distilled spirits produced in or imported into the United States. These CBMA tax benefits are limited in quantity for each producer, including foreign producers. Foreign producers utilize these CBMA tax benefits by assigning them to U.S. importers of their products.  U.S. importers pay the Federal excise tax on imported beer, wine, and distilled spirits, and must receive an assignment of the CBMA tax benefits from the foreign producer to take advantage of the CBMA tax benefits.

From 2018 to 2022, U.S. Customs and Border Protection (CBP) has administered the CBMA tax provisions related to imported products.

A change in the law transferred responsibility for administering the CBMA tax benefits for imported alcohol from CBP to TTB beginning with products entered for consumption in the United States on or after January 1, 2023.

The law also changed the way in which importers will take advantage of tax benefits assigned to them. Starting January 1, 2023, importers who want to take advantage of assigned tax benefits must pay the full tax rate to CBP and then subsequently submit a claim to TTB for a refund.

 

For more information on TTB’s CBMA import regulations:

 

Overview for Importers ● Overview for Foreign Producers myTTB System User Guides Foreign Producer Registration Questions and Answers
CBMA Tax Benefit Assignment Questions and Answers

 

Summary of CBMA Import Refund Provisions for Distilled Spirits, Wine, and Beer

The following summaries outline the new provisions covering importers and foreign producers.

General: For beer, wine, and distilled spirits entered for consumption in the United States on or after January 1, 2023, an importer must pay the full rate of tax to CBP.

To take advantage of the CBMA reduced tax rates or tax credits, the importer must electronically file a refund claim with TTB. Importers may file refund claims after the close of each calendar quarter covering their entries in that quarter.

An importer cannot claim a refund unless the foreign producer of the imported beer, wine, or distilled spirits has assigned their CBMA tax benefits to that importer using the myTTB online system.


Customs Entry Filings: Before claiming a refund, the importer must submit information in their customs entry filing(s) identifying the products that will be subject to their claim, including:

  • The commodity (i.e., beer, wine, or distilled spirits) and quantity (i.e., beer barrels, wine gallons, or proof gallons) being imported with an assigned CBMA tax benefit;
  • The name and TTB Foreign Producer ID of the foreign producer assigning the CBMA tax benefits; and
  • The specific reduced tax rate or tax credit assigned to the imported quantity.

This information is generally consistent with the information importers were required to submit to CBP to take advantage of CBMA tax benefits prior to 2023, except that TTB will use a new TTB-issued Foreign Producer ID number to identify foreign producers. See Craft Beverage Modernization Act (CBMA) – 2022 Procedures and Requirements, CSMS #50484790 (Dec. 23, 2021).

This information must be submitted electronically as part of the importer’s customs entry filing(s) in CBP’s Automated Commercial Environment (ACE). More detailed information on the entry filing requirements is available in the CBP and Trade Automated Interface Requirements (CATAIR) Entry Summary Create/Update on CBP’s website.

Importers intending to file CBMA importer refund claims must also file the TTB Message Set electronically in ACE.  For instructions, see ACE Filing Instructions for TTB-Regulated Commodities | U.S. Customs and Border Protection (cbp.gov).

Quarterly Refund Claims: An importer can file a quarterly refund claim based on CBMA tax benefits assigned to them after imported products have entered the United States for consumption, and after the importer has paid to CBP the tax due on those products at the full tax rate.  Importers may not file refund claims more frequently than quarterly.  That is, the calendar quarter must end before CBMA import refund claims may be filed for any consumption entries made during that quarter.

Use of myTTB Online System: Importers must submit CBMA refund claims electronically using the myTTB online system.  Importers may authorize third party agents to submit filings on their behalf within the myTTB online system.  Importers are responsible for ensuring that they (or their agents) have submitted accurate data in ACE before submitting a CBMA refund claim to TTB. Additional guidance on filing claims will be provided before April 1, 2023.

General: Foreign producers may assign the CBMA tax benefits to one or more U.S. importers of their products.  An importer cannot take advantage of tax benefits unless the foreign producer has assigned their tax benefits to the importer. 

Quantity Limitations: By law, each foreign producer may only assign a limited quantity of tax benefits for each category of their products imported into the United States (beer, wine, or distilled spirits). Please see FAQ TB-1 for more detailed information on the quantities eligible to be assigned each calendar year.

Use of myTTB Online system:  In the past, foreign producers assigned CBMA tax benefits to one or more importers using a letterhead template published by CBP.  TTB will not accept letterhead assignments for calendar years 2023 and beyond.  For products imported on or after January 1, 2023, foreign producers must use the myTTB online system to assign CBMA tax benefits to importers.

Foreign Producer Registration: Before assigning CBMA tax benefits, a foreign producer must first register with TTB using the online myTTB system and receive a TTB Foreign Producer ID.  A foreign producer will need to provide the following information to register:

  • Basic information about the business (such as business name and address) and contact information for a point of contact for the business (see FAQ FP-1);
  • Their unique U.S. Food and Drug Administration (FDA) Food Facility Registration number(s) (see FAQ FP-2); and
  • Ownership information, if under common ownership with other foreign or U.S. alcohol producers (see FAQ FP-1).

When a foreign producer’s TTB registration is complete, TTB will issue a TTB Foreign Producer ID and the foreign producer will be able to make assignments through the electronic myTTB system. U.S. importers will use the TTB Foreign Producer ID to identify the foreign producer when submitting information to CBP during the entry process as well as when submitting CBMA import refund claim information to TTB.

Assigning Benefits to Importers: To assign CBMA tax benefits to importers, foreign producers will need to provide the following information:

  • The calendar year for which the CBMA tax benefits are being assigned; 
  • The importer to whom the assignment is made, identified by TTB permit number (or TTB-assigned reference number when an importer is not required to have a TTB permit);
  • The commodity (i.e. beer, wine, or distilled spirits) for which the assignment is made; 
  • The specific reduced tax rate or tax credit being assigned; and 
  • The quantity of proof gallons, wine gallons, or beer barrels on which tax benefits are being assigned.

The quantities of tax benefits available to be assigned may be impacted by controlled group rules in cases of common ownership among producers.  Please see FAQs TB-1 - 2 for additional information on quantity limitations.

See the ACE CBMA Tax Rates Table. Use these codes for consumption entries on or after January 1, 2023 when the filer has or reasonably expects to have a CBMA tax benefit assignment from the foreign producer and expects to file a refund claim with TTB based on the assigned lower Internal Revenue Tax (IRT) rate or credit.

 

myTTB System User Guides

Coming in 2023

 

Foreign Producer Registration FAQs

Foreign producers seeking to assign CBMA tax benefits must register online through myTTB in order to receive a TTB Foreign Producer ID and assign tax benefits to a U.S. importer.  In order to complete the registration process, the foreign producer (or their agent, see FAQ FP-4) will need to enter the following information, in the English language, through myTTB.

  • Name, country of residence, and principal business address of the foreign producer;
  • Name, title, country of residence, phone number, and email address of an employee or individual owner of the business who has authority to act for the business;
  • If the person registering the foreign producer is different from the employee or individual owner, the name, address, phone number, and email address of the person who is completing the registration on behalf of the foreign producer; and
  • U.S. Food and Drug Administration (FDA) Food Facility Registration Number(s).

Foreign producers who are under common ownership with other foreign or U.S. distilled spirits operations, wineries, or breweries also assigning CBMA tax benefits or taking advantage of CBMA tax benefits (in the case of U.S. alcohol producers) must also provide the following information for any individual or entity that owns 10 percent or more of the registering foreign producer:

  • The name, address, and phone number of the individual or entity owner; and
  • For entity owners, the Employer Identification Number if the entity is a U.S. entity and has an EIN or the Dun & Bradstreet Data Universal Numbering System (DUNS) number if the entity is a foreign entity and has a DUNS number.

The U.S. Food and Drug Administration (FDA) requires foreign beverage alcohol producers to obtain an FDA Food Facility Registration number for their production facilities before their products are imported into the United States. As part of the TTB registration process, foreign producers who seek to assign reduced rates will be required to submit to TTB each FDA Food Facility Registration number that they have already obtained for FDA purposes prior to the importation of their distilled spirits, wine, or beer, into the United States.

In cases where a foreign producer does not have a Food Facility Registration number because all of their products are further manufactured, processed, or bottled by another foreign facility prior to shipment to the United States, the foreign producer must obtain and submit the Food Facility Registration number of the other facility.  Alternatively, a foreign producer of industrial alcohol may confirm that it does not have an FDA Food Facility Registration because FDA does not require one for its operations. 

The foreign producer contact should be an employee or owner of the foreign producer. This individual will serve as the foreign producer point of contact for TTB and should not be the foreign producer’s agent or any other individual or entity acting on behalf of the foreign producer.

Note that this individual will be the recipient of any notices from TTB regarding the foreign producer’s registration or CBMA tax benefit assignments.

A foreign producer may have a third party agent register the foreign producer with TTB and make assignments of CBMA tax benefits to importers on its behalf. Once a registration has been created for a foreign producer, no additional registration can be completed for that foreign producer because each foreign producer may only have one registration. 

When initially registering the foreign producer, a third party agent must provide basic identifying information about themselves, including their name, address, phone number, and email address. TTB may also request additional information, if necessary, to verify this individual’s identity. Note that, as part of the registration, the agent must still provide a foreign producer contact that is an employee or owner of the foreign producer. See FAQ FP-3.

A third party agent registering a foreign producer must have authorization from the foreign producer to provide the required registration information, and perform other actions in the myTTB online system, including editing the foreign producer’s registration information, designating additional persons who are also authorized by the foreign producer to act on the foreign producer’s behalf or canceling the designations of authorized persons, and making assignments of CBMA tax benefits. The agent must maintain proof of their authority to act on behalf of the foreign producer, and be able to provide TTB a copy of the documentation authorizing them to make binding commitments on the foreign producer’s behalf. See FAQ FP-6 for additional information on acceptable proof of authority.

Foreign producers who register with TTB are required to update their registration within 60 days of any change to the information that was required as part of the original registration. In addition, every year, the myTTB system will prompt the foreign producer to either confirm or update the ownership information on file with their registration. If the foreign producer fails to confirm or update its registration information, the foreign producer will not be able to assign CBMA tax benefits until the required action is completed.

A person acting on behalf of a foreign producer in TTB’s online foreign producer registration and assignment system must maintain written proof of authorization from that foreign producer to act on that foreign producer’s behalf, and must provide that proof to TTB upon request. Proof of authorization from the foreign producer must include the following:

(1) Name and mailing address of the foreign producer, which must be consistent with the name and mailing address for the foreign producer in TTB’s online foreign producer registration;

(2) Name and mailing address of the person whom the foreign producer is authorizing to act on its behalf;

(3) A clear statement by the foreign producer of the scope of authority granted to the authorized person. The foreign producer can either authorize the person to act on its behalf without limitation, or can limit the authorization to perform only the actions listed below. If the latter, the foreign producer must state that the person is authorized to perform each of the following on the foreign producer’s behalf:

(i) Submit and/or edit the foreign producer’s registration information;

(ii) Assign the foreign producer’s CBMA tax benefits to U.S. importers;

(iii) View all information submitted on behalf of the foreign producer in TTB’s online foreign producer registration and assignment system, including information submitted by other authorized persons;

(iv) Receive and respond to communications from TTB regarding the foreign producer; and

(v) (optional) Designate and/or cancel designations of additional persons to act on the foreign producer’s behalf in TTB’s online registration and assignment system.

The proof of authorization must be signed by an individual with authority to legally bind the foreign producer under the laws of the country where the foreign producer is located. This signing individual must attest that they have authority to grant the authorization and must include their printed name, title, and date of signature on the document.

The proof of authorization must also be signed and dated by the individual receiving the authorization to act on behalf of the foreign producer.

 

CBMA Tax Benefit Assignment FAQs

For distilled spirits, reduced tax rates apply to the first 22,230,000 proof gallons of that foreign producer’s product imported into the United States during a calendar year.  These rates are, for each foreign producer, $2.70 per proof gallon on the first 100,000 proof gallons imported, and $13.34 per proof gallon on the next 22.13 million proof gallons imported into the United States.

For beer, a reduced tax rate of $16 per barrel applies to the first 6,000,000 barrels produced by that foreign producer and imported into the United States during a calendar year.

For wine, tax credits apply to the first 750,000 wine gallons of that producer’s product imported into the United States during a calendar year.  The credits are, for each foreign producer, $1 per wine gallon on the first 30,000 wine gallons of wine imported, 90 cents on the next 100,000 wine gallons imported, and 53.5 cents on the next 620,000 wine gallons imported.  The tax credits are available for all wine, except that CBMA provides for adjusted credits for imported wine eligible for the hard cider tax rate (6.2 cents, 5.6 cents, and 3.3 cents, respectively).

A detailed overview of the tax rates and CBMA tax benefits applicable to imported distilled spirits, beer, and wine is available on TTB’s Tax and Fee Rates page.

A foreign producer that is under common ownership with other foreign and/or domestic producers of beer, wine, or distilled spirits are subject to “controlled group” limitations on the quantities of tax benefits that may be assigned when the common ownership creates a “controlled group” under U.S. law. The Internal Revenue Code provides that the quantity limitations for the CBMA tax benefits are applied to the entire controlled group and shall be apportioned among the members of the controlled group. (See 26 U.S.C. 5051(a)(5)(B), 5001(c)(3)(C), and 5041(c)(3).)

For example, if two foreign wineries whose wine is imported into the United States are in a controlled group with each other (e.g., each is wholly owned by the same corporation), the two wineries are treated as if they are one foreign producer for purposes of applying the quantity limitations on the CBMA tax benefits.  In other words, their combined CBMA tax benefit assignments to U.S. importers cannot exceed the quantities allowed by law. See FAQ FP-1.

The principle applies equally to two or more foreign beer producers in a controlled group and to two or more foreign distilled spirits operations that are in a controlled group.

Similarly, if a foreign beer producer whose beer is imported into the United States is in a controlled group with a U.S. beer producer, the beer produced by the foreign members of the controlled group and imported into the United States and the beer produced and removed by all domestic members of the controlled group are treated as if it were the production and removal of one producer for the purpose of applying the quantity limitations on CBMA tax benefits.  In other words, if a foreign producer and a domestic producer are part of a controlled group, the combined removals of their beer into U.S. commerce would be subject to one quantitative limit.

The principle applies equally to a foreign producer of wine that is in a controlled group with a domestic producer of wine as well as to a foreign distilled spirits operation that is in a controlled group with a domestic distiller or domestic distilled spirits processor.

A foreign producer will be able to electronically assign CBMA tax benefits through myTTB after they have completed their online registration and received a TTB Foreign Producer ID. In most cases, a Foreign Producer ID will be issued within five business days of completing the online registration. However, inaccurate or incomplete registration information may delay issuance of the Foreign Producer ID.

Under the regulations, foreign producers may assign tax benefits for a calendar year starting no earlier than October 1 of the year prior, and all assignments must be made on or before December 31 of the calendar year for which the benefits will apply. Assignments do not all need to be entered at one time. Foreign producers may assign additional CBMA tax benefits as needed until quantity limitations are reached. To illustrate, a foreign producer could assign a portion of the CBMA tax benefits for its products to be imported in calendar year 2024 on October 1, 2023. The foreign producer could continue to assign CBMA tax benefits for 2024, up to the maximum quantity allowed by law, through December 31, 2024.

For products to be imported in calendar year 2023, the first year of TTB’s implementation of the CBMA import refund provisions, TTB expects the myTTB system to be available to foreign producers to register and make assignments by the end of October 2022.

For a foreign producer to reassign CBMA tax benefits assigned to a U.S. importer, the importer must first reject the initially-assigned benefits through myTTB’s Importer Claims system (available no later than April 2023). The importer cannot reject an assignment if it has already filed a refund claim using that assignment. Once the importer has properly rejected the assignment, the foreign producer may reassign the rejected benefits through myTTB’s Foreign Producer system. All rules pertaining to the timing of assignments apply to reassignments. See FAQ TB-3.

Green icon with a white phone. CONTACT US

Please send us your questions about tax benefits for imports under CBMA using the Regulations and Rulings Division contact form. TTB is developing responses to questions for future updates to this page.

Please direct correspondence to:

Alcohol and Tobacco Tax and Trade Bureau
Director, Regulations and Rulings Division
1310 G Street, NW, Box 12
Washington, DC 20005

Page last updated: December 6, 2022