On September 6, 2018, Trans American arranged a conference call with the Craft Beverage Modernization Act (CBMA) Program Managers at U.S. Customs and Border Protection (CBP) regarding implementation of the CBMA. The following is a summary of the latest updates as advised by CBP.
Foreign Producer Allocations
On August 16, 2018 there was an Interim Rule published in the Federal Register which amended the Customs Regulations (19 CFR 24.36 d) to authorize CBP to refund alcohol excise taxes that are claimed pursuant to the assignment of a reduced tax rate or tax credit allocation to an importer by a foreign producer.
On August 31, 2018, CBP issued CSMS #18-000511 which advised that CBP has established a flag for use at the line level of the Entry Summary, to identify merchandise for which a claim will be filed subject to the CBMA.
PSC (Post Summary Correction) refund claims will be able to be filed up to 300 days from entry date, but no later than 14 days prior to liquidation. After liquidation protests must be filed. CBP advised that it may be better to wait to file refund claims until further guidance is issued, which is expected within the next month.
CBP confirmed if an entry is flagged, but no allocation is actually taken / processed, then there will not be a penalty for failure to file.
CBP is building a mechanism to monitor the allocations from foreign producers. CBP indicated that importers may need to explain the process to producers who are not familiar.
Lower Base Tax Rate on Certain Still Wines
Still wines which are over 14% but not over 16% Alcohol by Volume, imported in 2018 and 2019, are eligible for a lower tax rate of $1.07 per wine gallon (vs. $1.57 per wine gallon).
The 8/16/18 Interim Rule amended the Customs Regulations (19 CFR 24.36 e) to document that claims for the Lower Base Tax Rate on certain Still Wines which are over 14% but not over 16% must be filed through TTB, using form 5620.8.
CBP did not know whether Customs Brokers can file refund claims with TTB on behalf of importers.
CBP is working on system edits to allow the lower tax rate to be claimed at time of entry.
CBP indicated that they would like the Harmonized Tariff Schedule to be updated to reflect the new cutoff for wines not over 16% alcohol by volume, but they do not expect this soon.
CBP also indicated that this lower tax rate may remain in place beyond 2019.
T.A. will continue to provide further updates as they are communicated by U.S. Customs and TTB. Please reach out to your Personal Account Manager for any additional questions.
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