Craft Beverage Modernization Act (CBMA) FAQ’S
What are the maximum quantities that an assigning entity can allocate per tax rate or credit for foreign produced alcohol?
The quantitative limits for CBMA adjusted tax rates or credits are determined per controlled group as defined by the CBMA and 26 U.S.C. 1563. For example, a controlled group may allocate to any number of importers the lower $16.00 per barrel tax rate to a maximum of 6,000,000 barrels in a given calendar year. The sum quantity of beer imported that is receiving a reduced CBMA tax rate and produced by a controlled group may not exceed 6,000,000 barrels. All quantitative limits are specified in the Craft Beverage Modernization and Tax Reform Act of 2017.
U.S. Department of Treasury, Alcohol Tax and Tobacco Tax and Trade Bureau (TTB) is responsible for the collection of tax on domestically produced alcohol products. TTB has issued public guidance and FAQs on the implementation of the Tax Cuts and Jobs Act of 2017 Craft Beverage Modernization and Tax Reform which can be found on their website.
Importers are strongly encouraged to utilize the CBMA flag at time of entry summary. Pursuant to CSMS message # 18-000511, importers will use the CBMA entry summary line level flag (CBMA flag) to identify imported alcohol for which the importer has received a CBMA allocation from a foreign producer/assigning entity. The CBMA flag may be transmitted at time of entry summary filing, or subsequently as a Post Summary Correction (PSC) for unliquidated entry summaries.
Please direct all CBMA related inquiries to CBMA@cbp.dhs.gov.
Follow normal procedures for submission of a paper protest by hand carrying or mailing protest to the port/center. Supporting documentation for CBMA claims (Controlled Group Spreadsheet, CBMA Spreadsheet and Assignment Certification) filed via paper protests should be emailed to CBMA@cbp.dhs.gov. The protest number must be in the subject line of the email.
No, only one Importer of Record should be listed on the assignment certification.
Is there guidance from CBP regarding the tax rate for wines containing more than 14% but not more than 16% alcohol by volume?
In CSMS #18-000708, CBP issued separate procedures and requirements addressing the CBMA‘s temporary changes to the tax classification of certain wines containing more than 14% but not more than 16% alcohol by volume.
A complete CBMA claim must be identified by product claim number ‘C’, either at entry or Post Summary Correction (PSC), claiming the lower rate, and be accompanied by supporting documentation. Supporting documentation consists of the CBMA Spreadsheet, the Controlled Group Spreadsheet, and the Assignment Certification. A claim will not be considered complete until all three documents are on file with CBP.
CBMA documents are to be submitted via the Document Image System (DIS) via DIS email or DIS XML. Importers will submit the CBMA and Controlled Group spreadsheets (.xlsx) and CBMA Assignment Certification (.pdf) via the Document Image System (DIS). If an entry on which the importer is making a CBMA claim has liquidated, the CBMA claim may be filed via a protest, and documents must be uploaded into the Protest Module.
In the event that an assigning entity/foreign producer wishes to provide the Controlled Group spreadsheet to CBP directly and without the importer being able to access the information, the foreign producer/assigning entity can submit the completed Excel (not .pdf) spreadsheet via DIS and link it to the Importer’s Importer of Record (IOR) number.
In Column L of the Controlled Group Spreadsheet how do I report the Total Assignment taken on past claims, as well as the assignment being taken on the current claim on a line by line basis?
To report both the assignment already taken and the assignment on the current claim under Column L, combine the amount from their last entry line claimed (i.e., Column M) with the amount being assigned on the instant line.
If my PSC transmission results in an automatic ‘documents required’ message, what should I submit to CBP?
In response to the automatic ‘documents required’ message, please submit the CBMA supporting documents (Controlled Group Spreadsheet, CBMA Spreadsheet, and Assignment Certification).
The production capacity would be reported in barrels (beer), wine gallons (wine) or proof gallons (spirits).
Report quantities out to the second decimal.
Is it possible to qualify for reduced tax rates or tax credits without an allocation from an assigning entity?
No. Per the CBMA, reduced tax rates and tax credits must be assigned by a foreign producer/assigning entity. The sum quantity of alcohol that is receiving a reduced CBMA tax rate and produced by a single assigning entity may not exceed the quantitative limits set forth in the CBMA. All quantitative limits are specified in the Craft Beverage Modernization and Tax Reform Act of 2017.
CBP has determined that the single taxpayer provision does not apply to foreign transactions as the taxpayer is the importer and the provision applies to producers who are taxpayers.
The wine tax credit is calculated differently from the tax rates. Calculate:
- IRT paid - (Quantity x credit). Refund not to exceed IRT paid.
- Column F, the importer should choose the correct tax credit (not rate) for the designated wine tranche. In column G, they should enter the quantity claimed on the line (in gallons). Column (I) will essentially equal (H: IRT) – (J: Refund).
In instances where an intermediary has sold alcoholic beverages that are potentially eligible for CBMA to an importer, how should a CBMA Assignment Certification be completed?
To be eligible for CBMA rates or credits, a foreign producer/assigning entity must issue an Assignment Certification to the importer. An intermediary supplier who is not the producer may not make an assignment. Please refer to the TTB CBMA website for clarification on who qualifies as the producer.
If I file a protest, should I upload the CBMA Spreadsheet, Assignment Certification, and Controlled Group Spreadsheet only, or do I have to submit the entry package?
For a protest including a CBMA claim, the only additional documents required (above the standard protest requirements as established in 19 CFR 174 Subpart B) are the three CBMA documents. Please be mindful that you have one opportunity to protest, so all issues (even those beyond CBMA) must be raised, following Part 174 requirements.
Should the annual production be the amount allocated to me or the amount that I received from supplier?
Annual production is the total yearly quantity produced by the brewer/distiller/winery. This includes quantities sold globally, not just to U.S. importers.
To be eligible for CBMA, do FTZ withdrawals need to be admitted into the FTZ in 2018 or must goods have been withdrawn from the FTZ in 2018?
To be eligible for CBMA, alcoholic beverages must be imported during calendar years 2018 and 2019. In the case of FTZ, importation occurs before the goods are admitted. Only when the goods are withdrawn for consumption can a CBMA claim be made.
Importers may belong to more than one controlled group. For every controlled group that the importer belong to, a new Controlled Group Spreadsheet is required. On the CBMA spreadsheet, you may have multiple entries on one spreadsheet as long as they pertain to one IOR, which in turn means that you could possibly have goods that were allocated by more than one foreign producer/assigning entity on one CBMA Spreadsheet.
On February 28, 2019, CBP will start reviewing and liquidating CBMA claims, in chronological order. This means that CBP will start reviewing January 2018 entries first. Once reviewed, entries will immediately liquidate, and refunds or bills-in some cases-are issued.
How long do importers have to submit all the protests and post summary corrections (PSC) for their entries for 2018?
That depends on the entry date and liquidation of the entries. You have until the 300th day from the date of entry and up to 15 days from the date of scheduled liquidation, whichever is earlier, to file a PSC to claim CBMA. You have 180 days from the date of liquidation to file a protest to claim CBMA.
I have 200 entries in which I would like to claim CBMA. For DIS purposes, I made one spreadsheet for all 200 entries, is this allowed in DIS since the DIS subject line must indicate the entry number?
One CBMA Spreadsheet can have multiple entry numbers, as long as they pertain to one importer. You will use the entry number with the earliest import date for DIS labeling purposes.
The importer may receive a CBP form 29, Notice of Proposed Action indicating that CBP proposes to liquidate the claim at the higher non-CBMA rate. If CBP receives no response, the action is taken. Additionally, since entries will immediately liquidate, filers/importers may go to CBPs bulletin notice website for liquidation disposition of the CBMA entries.
How do I seek a refund for 14-16% wines which I was previously required to pay the higher rate to CBP? Does 14-16% wine require an Assignment Certification?
The 14-16% does not require an Assignment Certification from a foreign producer in order to take the lower $1.07 rate. You may pay this lower rate at time of entry. If the higher rate was paid at the time of entry and you are seeking a refund, you must go through TTB. Please follow the guidance in CSMS #18-000708, Implementation of the 14-16% wine.
For non-ABI entries (paper), please submit the Assignment Certification, CBMA Spreadsheet, and CBMA Controlled Group Spreadsheet to the CBMA mailbox at CBMA@cbp.dhs.gov.
Spreadsheets should be in XLSX format. Please see note 6 in Appendix B, page 86 which states that XLSX is accepted in DIS for certain programs, such as CBMA.
The Assignment Certification should state the actual credit for wine allowed by CBMA, for example $.1.00, $.90 or $.535.
Can you please explain how to capture sparkling wine vs. still wine tax credits on the CBMA Spreadsheet? The dropdown only gives still wine choice, not sparkling wines.
For all wines, the filer/importer must enter the credit amount allocated to them by the foreign producer/assigning entity and not the rate. The credit can be $1.00, $.90, or $.535. For example, natural sparkling wine for non-CBMA imports is $3.40 per wine gallon, however, with the CBMA $1.00 credit, the rate is $2.40 per wine gallon.
The producer is allocating between 1 to 250,000 wine gallons to me. How do we account for this on the Assignment Certification letter?
On the Assignment Certification, the foreign producer must identify the alcoholic beverage (beer, wine or distilled spirits), quantity and which tranche or tier being allocated to you. For example, 1000 wine gallons at the $1 rate.
Unlike post summary corrections (PSC), filers/importers may include up to 9,999 entries on one protest.
It is possible if both controlled groups assigned the importer full CBMA allocations. Each controlled group may allocate up to 6 million barrels at the $16.00 rate. The two producers must not be part of the same controlled group, as they would exceed the 6 million barrel quantitative limit.
The benefit of the CBMA applies to imports of a given calendar year and can only be “taken” on the imports during that given calendar year. If the goods are imported in 2018 or 2019, CBMA was not claimed at the time of entry, and the entries have not liquidated, however, you may file a post summary correction (PSC) on unliquidated entries within the relevant timeframe (within 300 days from the date of entry and up to 15 days of the scheduled liquidation date, whichever date is earlier) regardless of whether that date falls outside of the 2018-2019 calendar year. If the entry has liquidated without the benefit of CBMA, the filer/importer may file a protest within 180 days of liquidation regardless if that date falls outside of the 2018-2019 calendar year.
When submitting a request to TTB for a refund for 14-16% wine where I paid the higher rate, where should I send my request for a letter from CBP, as mentioned in CSMS# 18-000708?
Pursuant to the regulation, requests may be sent to CBP. Please send requests to the Center that controls the entry. Most of the Alcohol industry aligns with the Agriculture CEE. For the Agriculture CEE, please send requests to the Agriculture Center at CEE-Agriculture@cbp.dhs.gov. Please include the entry numbers and Importer of record number with your requests.