The U.S. Alcohol and Tobacco Tax and Trade Bureau (TTB) has issued a temporary rule  amending tax assignment regulations based on procedural changes to the administration of the Craft Beverage Modernization Act (CBMA).

Foreign producers of distilled spirits, wine, hard cider, and beer are now required to register with TTB to assign U.S. federal excise tax benefits to their importers. Importers must then request refunds directly from TTB using a new system (myTTB).

As of January 1, 2023, all shipments entering the U.S. only receive tax benefits through this system.

How Did the CBMA Tax Benefits Assignments Change?  

Prior to this temporary rule, reduced rates were applied during the entry process by U.S. Customs and Border Protection (CBP). CBMA transfers the executions of the tax provisions from CBP to TTB. The TTB regulations require foreign producers to assign applicable CBMA tax benefits to importers, who then must elect to receive them. 

The tax savings are substantial, so if your TTB-regulated distillery, winery, or brewery is located outside of the U.S., your importers will likely request that you assign their tax benefits under this new registration system.

For example, distilled spirit importers pay only $2.70 USD per proof gallon for the first 100,000 proof gallons and $13.34 per proof gallon for the next 22.13 million gallons sent by a foreign distillery instead of the normal rate of $13.50 per proof gallon. Similar sizable benefits exist for other alcoholic beverage products. 

Foreign producers may assign benefits to multiple importers provided that the total assignments don’t exceed the total quantity allowed. Amounts are subject to “controlled group” limitations, which apply to producers under common ownership. 

What Does This Mean for Foreign Producers? 

The TTB registration process for foreign producers involves the following steps: 

1. Registration with TTB

The submitter must include the TTB foreign producer’s identifying information and the point of contact at the business. The submitter must also provide their identifying information if they are not the listed point of contact. The submitter may be a proprietor, employee, or any agent that the foreign producer has authorized to act on its behalf.  

Registration also must include submission of the FDA Food Facility Registration (“FFR”) number. Registration information must be updated within 60 days of any change. 

2. Receipt of a TTB-issued Foreign Producer ID

The Foreign Producer ID will link the producer to their importers’ associated customs entry data and refund claims. The Foreign Producer # identifies the foreign producer who made or is expected to make the applicable CBMA tax benefit assignment. This is a new identifier and is different from any identifiers previously reported to CBP. 

3. Assignment of CBMA tax benefits to specified importers

In April 2023, TTB launched myTTB, its portal for tax benefit assignments.

Foreign producers must submit certain information for each tax assignment. Producers may start assigning tax benefits on October 1 of the previous year, but no later than December 31 of the calendar year for which the benefits apply. Once an assignment has been submitted, the producer may not revoke or reduce the assignment unless the importer decides not to receive it. 

All shipments of distilled spirits, wine, hard cider, and beer are subject to the 2023 tax benefit assignment requirements.

If your facility is a TTB-regulated distillery, winery, or brewery, you will likely be asked by your importers to register and assign CBMA tax benefits using the TTB online system, given the significant tax implications.

It’s crucial that foreign producers register with TTB immediately so that their importers receive their tax benefits in a timely manner.  

Registrar Corp will properly submit your company’s TTB Registration so that you receive your Foreign Producer ID and can start assigning benefits. We’ll also help you properly disperse tax benefits to your importers throughout the year.