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Craft Brewers: Don’t Overpay Your Federal Excise Taxes

10.02.2019

On Dec. 20, 2017, Congress passed legislation that included a two-year provision of the Craft Beverage Modernization and Tax Reform Act (CBMTRA), which lowered the federal excise tax (FET) rate for breweries, wineries and distilled spirits producers until Dec. 31, 2019.

For breweries, the FET was reduced from $7/barrel to $3.50/barrel on the first 60,000 barrels for domestic brewers producing less than 2 million barrels annually. The FET was reduced from $18/barrel to $16/barrel on the first 6 million barrels for all other brewers and all beer importers. The Tax and Trade Bureau (TTB) has noted that approximately 400 brewers who are eligible to pay the $3.50/barrel federal excise tax rate are still paying the $7/barrel rate.

If you think you have overpaid your taxes, you’ll want to review past tax records and confirm whether your brewery qualifies for the reduced FET rate and submit a refund claim as soon as possible. At this time, the TTB has confirmed the only way for affected brewers to seek a refund of overpayment of tax on beer is by submitting TTB Form 5620.8. Additional guidance on the CBMTRA can be found on the TTB site.

To discuss the significant excise tax savings you may be missing out on, or to learn more about TTB compliance and reporting, please contact Michelle Howard, Advisory Services Consulting Manager, at mhoward@bswllc.com or 314.983.1202.

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