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TTB NEWSLETTER | Weekly News

December 30, 2016


IN THIS ISSUE

Greetings! We hope you had a snug and toasty week! We'd also like to wish you all a very happy and healthy 2017. This week's top news includes announcements about changes to the bond requirements and tax return filing periods, and changes to the criterion for eligibility for the Hard Cider tax rate, that will all take effect January 1, 2017, as well as a list of the past week's top informational pages at TTB.gov/.


STATUTORY AMENDMENTS AFFECTING EXCISE TAX DUE DATES AND BOND REQUIREMENTS FOR ELIGIBLE TAXPAYERS BECOME EFFECTIVE; TTB REGULATIONS TO BE PUBLISHED SOON

Changes to excise tax due dates and bond requirements in the Internal Revenue Code of 1986 made by the Protecting Americans from Tax Hikes Act of 2015 (PATH Act) become effective on January 1, 2017.  Briefly, the changes are as follows:

  • Beginning with the calendar quarter that starts on January 1, 2017, taxpayers who reasonably expect to be liable for not more than $1,000 in taxes imposed with respect to distilled spirits, wines, and beer for the calendar year (and who were liable for not more than $1,000 in such taxes in the preceding calendar year) can pay those taxes annually, rather than quarterly.
  • Beginning with the calendar quarter that starts on January 1, 2017, taxpayers are exempt from bond requirements if they reasonably expect to be liable for not more than $50,000 in taxes imposed on distilled spirits, wine, and beer for the calendar year, were liable for not more than $50,000 in such taxes in the preceding calendar year, and pay taxes on a semi-monthly, quarterly, or annual basis. Such taxpayers are exempt from bond requirements with respect to distilled spirits and wine only to the extent those products are for nonindustrial use.

To help alcohol excise taxpayers and applicants for permits and brewers' notices understand these changes and TTB is implementing them, we have also issued Industry Circular 2016-2, which provides an overview of the changes, describes how new applicants for permits and brewers' notices and existing proprietors can communicate their eligibility for the bond exemption, and describes the use of the annual return period.

We have developed regulations to implement these statutory changes, which will be published next week.

If you have any questions regarding these statutory changes or the Industry Circular, please contact TTB's National Revenue Center by e-mail, at TTBInternetQuestions@ttb.gov/, or by telephone, at 877-882-3277.

STATUTORY CHANGES TO CRITERIA FOR "HARD CIDER" TAX RATE BECOME EFFECTIVE; TTB REGULATIONS AND GUIDANCE TO BE PUBLISHED SOON

Changes to the Internal Revenue Code criteria for the "hard cider" tax rate made by the Protecting Americans from Tax Hikes Act of 2015 (PATH Act) will become effective for wines removed from wine premises or customs custody on or after January 1, 2017.  The hard cider tax rate is lower than the tax rate for other wines.  The modified criteria broaden the range of wines eligible for the hard cider tax rate as follows:

  • The allowable alcohol content increases from less than 7 percent to less than (not equal to) 8.5 percent alcohol by volume;
  • The allowable carbonation level increases from 0.392 to 0.64 gram of carbon dioxide per hundred milliliters of wine; and
  • The use of pears and pear juice concentrate is authorized in wine eligible for the hard cider tax rate.

Wine eligible for the hard cider tax rate cannot contain fruit products or fruit flavors other than apple and pear.

We have developed regulations to implement these statutory changes, as well as guidance to assist industry members with compliance.  Both will be published soon.  When the regulations and guidance are available, we will issue separate announcements.

If you have any questions regarding these statutory changes, please contact TTB's Regulations and Rulings Division by email, at wineregs@ttb.gov/, or by telephone, at 202-453-2265.

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