CBP issues alcohol tax refund rule

Importers are still paying rates that were in place prior to enactment of tax reform legislation.

   U.S. Customs and Border Protection on Thursday published an interim final rule (IFR) that will enable the agency to refund alcohol excise taxes importers paid prior to CBP assigning them a reduced tax rate or tax credit for alcoholic beverages, pursuant to the Craft Beverage Modernization Act (CBMA) portion of tax reform legislation signed into law on Dec. 22.
   The IFR is effective as of Thursday, and CBP is accepting comments on it through Oct. 15.
   Subject to requirements, importers may now obtain the benefit of a lower tax rate through CBMA by filing a refund claim with CBP.
   For an importer to be eligible to receive a reduced tax rate or tax credit under the CBMA, the importer must be able to substantiate that the foreign producer assigned an allotment of its reduced tax rate or tax credits to the beer, wine, or distilled spirits imported by that importer, CBP said.
   The new statute “makes it clear that CBP has authority to refund the difference between the full excise taxes an importer pays at the time of entry summary filing and the CBMA’s lower effective tax rate,” the IFR states. “An importer must request and substantiate its entitlement to the reduced tax rate or tax credit appropriately.”
   Refund claims must be executed on Treasury Alcohol and Tobacco Tax and Trade Bureau (TTB) Form 5620.8 (Claim: Alcohol, Tobacco, and Firearms Taxes) and must be filed with the director of TTB’s National Revenue Center, the IFR states.
   Claims may cover refunds under more than one entry, but are limited to refunds under entries filed at the same port and same internal revenue region, CBP said.
   Guidance released by CBP on June 27 said CBMA refund requests would be processed no earlier than Jan. 15, 2019.
   The CBMA stipulates that reduced excise taxes for domestic and imported alcohol be effective throughout 2018 and 2019.
   Domestic alcohol producers are paying CBMA’s lower excise tax rates, but importers are still paying the higher, pre-CBMA rates, and the beverage alcohol industry continues to engage with CBP on the issue.