Prepare now to meet Alcohol Importers’ requests for 2023 Tax Benefit Assignments
Now, Foreign Producers of distilled spirits, wine, hard cider, and beer are required to register with U.S. Alcohol and Tobacco Tax and Trade Bureau (TTB) in order to assign U.S. federal excise tax benefits to their Importers. Importers will no longer receive these benefits upon entry, and instead must request refunds directly from TTB using a new system. Start your registration and assignment process now to ensure a smooth transition for your Importers. All shipments will be subject to the new requirements in 2023.
What Does the Tax Benefits Provision Mean for Non-U.S. Producers?
The Craft Beverage Modernization Act (CBMA) allows for reduced U.S. Federal Excise Tax Rates and Tax Credits for Importers on certain shipments of TTB-Regulated beverages. These tax benefits are no longer applied by U.S. Customs and Border Protection (CBP) at the time of entry; instead, Importers must request refunds directly from TTB based on the assignments made by foreign producers.
If your TTB-Regulated Distillery, Winery, or Brewery is located outside of the U.S., your Importers will likely request that you assign them tax benefits available to Importers under this new registration system.
Starting Now, Foreign Producers should register with the TTB. Companies must submit certain information during registration, including their FDA Food Facility Registration (“FFR”) number. Once registered, companies will receive a Foreign Producer ID and can begin making Tax Benefit Assignments which will be linked to their Importers’ associated customs entry data. All shipments arriving on or after January 1, 2023 will only be allocated tax benefits through this system.
How can Registrar Corp help?
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- Registrar Corp will properly submit your company’s TTB Registration so that you receive your US TTB Foreign Producer ID.
- Registrar Corp will help you to properly disperse tax benefits to your Importers throughout the year.
How do you start the TTB Process?
Start today by completing the form on this page.
Frequently Asked Questions Regarding the Craft Beverage Modernization Act (CBMA) Tax Benefits for Foreign (non-U.S.) Producers
Importers must pay federal excise taxes on all TTB-regulated beverages that they import. Each foreign producer qualifies for a reduced tax rate or a tax credit, for a set amount of products that they send to the U.S. The tax benefits are quite substantial, so it is assured that your importers will likely be asking you to participate and register as quickly as possible.
These tax credits and reduced tax rates are due to provisions of the Craft Beverage Modernization Act (CBMA) and the Tax Relief Act.
- Brewers get a reduced rate of $16 per barrel on the first 6,000,000 barrels they send The normal rate is $18.
- Wineries get a tax credit of $1 per gallon on the first 30,000 gallons, 90 cents on the next 100,000 gallons, and 53.5 cents on the next 620,000 gallons. The normal rate varies depending on the type of wine.
- Hard cider producers get a tax credit of 6.2 cents on the first 30,000 gallons, 5.6 cents on the next 100,000 gallons, and 3.3 cents on the next 620,000 gallons. The normal rate is 22.6 cents per gallon.
- Distilleries have a reduced rate of $2.70 per gallon for the first 100,000 gallons, $13.34 per gallon on the next 22.13 million gallons. The normal rate is $13.50 per gallon.
As of January 1, 2023, all non-U.S. producers of alcoholic beverages that qualify for reduced U.S. federal excise taxes must register with the TTB in order to assign the tax benefits for that calendar year to their U.S. importers. TTB is launching a new registration system to manage this process. U.S. Customs will no longer apply these tax benefits when the customs entry is filed. U.S. importers will need to apply for refunds based upon the benefits that their foreign producers have allotted to them in the TTB’s new system.
TTB allows any agent designated by the foreign producer to submit the registration, edit the registration, assign tax benefits, and add or remove users. Registrar Corp serves as an agent to assist companies with the registration process and manage their tax benefit assignments.
The foreign producers must grant Registrar Corp authorization to conduct these activities, per TTB requirements. Registrar Corp must have written proof of authorization and supply it to TTB upon request.
TTB has an online system called myTTB, where importers can get their basic permits, submit tax returns, make payments to TTB, and perform other TTB related activities. A portal has been added for CBMA related activities. Foreign producers and importers will use this system to take advantage of the CBMA tax benefits. Foreign producers will use it to assign tax benefits to specific importers. Importers will claim the refunds due to them, based on the assignment of the benefits from the foreign producers.
The registration includes business name, address, FDA Food Facility Registration Number (FFR), and a point of contact at the company (owner or employee). If the foreign producer has additional owners as part of a “controlled group”, any owner with 10% or more ownership must also be named.
Foreign producers must register using the myTTB system. Registrar Corp will complete this process for your company and include a contact that you have designated. Registrar Corp and the company contact will be “authorized users.” Authorized users must have the authority to receive/respond to TTB communications including notice of contemplated revocation.
Once registered, your company contact will receive a confirmation from TTB by email and will be able to access the registration information. The email from TTB will also give instructions as to how the company contact can access the system. It will require the company contact first to create an account at the following website:
www.login.gov
This is a US government website, which allows people to create accounts to access multiple agencies’ services. After creating the login.gov account, the company contact may enter the myTTB portal at this address, using the login.gov credentials:
my.ttb.gov/sign-in
There the company contact can create a profile and access the registration.
Additional authorized persons may be added as either "manager" or "user". Managers may add or remove additional authorized persons, but users may not.
Once registration is complete, your firm will be issued a “Foreign Producer ID” by TTB. This number must be shared with your importers, as they will need to reference it when claiming their refunds.
Changes to registration information must be updated within 60 days of any change. Unlike for the FDA FFR, change in ownership does not require cancelation of the registration. However, any new FFR information should be submitted within the 60-day window.
Within the TTB portal is a link to “Add assignments” to your importers. You will need to know the importers’ TTB basic permit numbers. You must also select the calendar year that applies to the benefit.
For each importer, you must select the exact tax rate/credit being assigned, and the quantity to be assigned. For example, a brewer may want to assign 4 million barrels to one importer and 2 million barrels to another importer.
ONCE ASSIGNED, THE TAX BENEFIT CANNOT BE CHANGED UNLESS THE IMPORTER REJECTS IT IN THE IMPORTER PORTAL. YOU MUST BE SURE THAT THE ASSIGNMENT IS CORRECT TO AVOID DELAYS OR OTHER ISSUES.
Tax benefits are based on the calendar year. Assignments can be made starting Oct 1 of the year prior (e.g., assignments for 2023 could be made beginning October 1, 2022). Assignments can be made at any time during the calendar year, up until December 31st. To claim the benefit, the importer’s shipment has to have arrived in port in that calendar year.
Importers must also use the myTTB system in order to claim refunds based on the tax benefits that your company has assigned to them. That portal has not been created yet and is scheduled to appear later in 2023. Importers will need your company’s Foreign Producer ID number in order to complete the claims process.
Importers will be able to claim refunds on a quarterly basis. Importers will receive the difference between the full rate (paid on entry) and the amount that would have been paid if the tax liability had been calculated using the tax benefits the foreign producers assigned to them.
