CSMS# 19-000172 - 2019 Procedures and Requirements: Implementing CBMA
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BACKGROUND
Effective January 1, 2018, the Craft Beverage Modernization and Tax Reform Act of 2017 (CBMA) (as contained in Pub. L. No. 115-97) amended the Internal Revenue Code with respect to the tax treatment of certain alcoholic beverages. The relevant provisions of the CBMA are effective for importations made during calendar years 2018 and 2019.
Under the CBMA, reduced tax rates and/or tax credits are applicable to importations of certain limited quantities of distilled spirits, beer or wine imported from each foreign producer/assigning entity (as described in the CBMA). Further, the assignments of the tax credits or reduced tax rates by the foreign producer/assigning entity to all importers may not exceed the quantities allowed by law. Thus, for an importer to be eligible to receive a reduced tax rate or a tax credit, importers must substantiate that the foreign producer/assigning entity has assigned an allotment of its reduced tax rate or tax credits to the distilled spirits, beer, or wine imported by that importer and that the quantitative limits have not been exceeded.
Pursuant to the interim final rule on Refund of Alcohol Excise Tax, 83 Fed. Reg. 40,675 (August 16, 2018), CBP and the Department of Treasury amended 19 CFR 24.36, to authorize CBP to issue refunds owed on entries where the importer received a foreign producer assignment pursuant to the CBMA when appropriate.
On October 16, 2018, CBP issued procedures and requirements regarding the implementation of the CBMA via CSMS message # 18-000609 and updates and clarifications to these procedures and requirements via CSMS # 19-000053. Those procedures and requirements applied to importations made during the 2018 calendar year. The message indicated that CBP would issue further communication for importations made during the 2019 calendar year.
PROCEDURES AND REQUIREMENTS
This communication serves to provide the procedures and requirements with regard to IMPORTATIONS MADE DURING THE 2019 CALENDAR YEAR and claimed to be subject to the CBMA. The primary change from the 2018 CBMA procedures and requirements is the timing of the filing of the supporting documentation.
IDENTIFYING ENTRIES SUBJECT TO CBMA:
CBP strongly encourages importers claiming a reduced tax rate or tax rate incorporating applicable tax credits as permitted by the CBMA (hereinafter “CBMA rate”) for importations made during the 2019 calendar year to do so at the time of entry summary. Importers must use the CBMA flag (Product Claim Code “C”) to identify entry lines for which the importer has received a CBMA assignment from a foreign producer/assigning entity and for which the CBMA rate is claimed, and declare the CBMA rate. Importers should ONLY use the CBMA flag when claiming the CBMA rate (which is a declaration that the importer has received a CBMA assignment from a foreign producer/assigning entity), whether at the time of entry summary filing or the filing of a Post Summary Correction (PSC).
For those importers that have liquidated entries for which they would like to claim the CBMA rate, the importer may file a protest. Importers filing protests claiming the CBMA rate should identify “CBMA” in the protest issue dropdown.
CBP PROCESSING OF 2019 CBMA CLAIMS:
CBP will process and liquidate calendar year 2019 CBMA claims on a monthly basis according to date of entry. CBP will begin its review with the oldest entry on file with a CBMA claim and work forward chronologically. If the importer has a complete, properly submitted and valid claim and the assignment limit has not been reached at the time of CBP review, CBP will liquidate the entry and apply the CBMA rate. For entries made after publication of this message, 2019 CBMA claimants should file complete 2019 CBMA claims by the 15th calendar day of the month following the month of entry summary date to ensure proper CBP review and liquidation with applicable CBMA benefits. Importers may file a PSC, within the applicable PSC filing period, for completion or substantiation of the CBMA claim. For liquidated entries, an importer is not precluded from filing a protest to complete or substantiate CBMA claims.
COMPLETING CBMA CLAIMS
In order to be considered a complete CBMA claim, in addition to flagging each line for which a CBMA claim is asserted, the importer must provide CBP with a complete and accurate CBMA Spreadsheet, Controlled Group Spreadsheet, and Assignment Certification. Missing, incomplete or inaccurate documents may result in the liquidation of entries at the higher non-CBMA rate. Templates for these three documents are posted on CBP.gov at https://www.cbp.gov/trade/basic-import-export/craft-beverage-modernization-tax-reform-act-2017. For CBMA claims submitted at time of entry or PSC, these documents must be uploaded into the Document Image System (DIS). For CBMA claims filed via protest, these documents must be uploaded in the ACE protest module. ONLY supporting documentation for non-ABI (paper) entries and paper protests should be submitted to the CBMA mailbox (cbma@cbp.dhs.gov) with the name of the non-ABI entry number or paper protest number in the subject line.
Importers can submit CBMA documents via the DIS XML as well as via DIS email. If submitting CBMA documents via DIS email, the category in the subject line must be CBMA. Instructions for providing the CBMA supporting documentation via DIS are included in the ACE DIS Implementation Guide at https://www.cbp.gov/document/technical-documentation/ace-dis-implementation-guide.
The CBMA Spreadsheet requires information from the importer and each data field is described in the template posted on CBP.gov at https://www.cbp.gov/document/template/cbma-spreadsheet. Importers will submit the Excel (not .pdf) spreadsheet via DIS. Importers must use the .xlsx extension when submitting the CBMA Spreadsheet; other formats, such as zipped files, .pdf and .msg are unacceptable.
Importers may include multiple entries on the CBMA Spreadsheet as long as they pertain to one Importer of Record (IOR) number. In DIS, link the spreadsheet to the entry with the earliest date of import. Importers/filers are expected to submit their CBMA Spreadsheets at least on a monthly basis – by the 15th day of the following calendar month. Filers should not submit CBMA Spreadsheets that include entry lines that have already been claimed as subject to the CBMA rate on a previously submitted CBMA Spreadsheet except in the case of submitting a replacement CBMA spreadsheet. In the case that a filer discovers errors in a CBMA Spreadsheet already submitted to DIS, the filer should submit immediately a complete and accurate replacement spreadsheet to DIS and link to the entry with the earliest date of import on the spreadsheet. When submitting corrected or replacement documentation, filers should always use the correct file naming convention as prescribed below when submitting the replacement document, regardless of the file name of the original document.
In DIS, importers/filers must use the following file naming convention for CBMA Spreadsheets:
CBP155-[Entry Number the CBMA Spreadsheet is Linked to]_CBMA_Spreadsheet.xlsx.
Importers/filers must replace the text in the brackets with the actual entry number. (Ex: CBP155-99912345678_CBMA_Spreadsheet.xlsx)
Further, importers/filers must use the “CBMA_IMPORTER_SPREADSHEET” Document Label when submitting the CBMA Spreadsheets to DIS.
As a reminder:
•Importers/filers are NOT to remove the validations in the template posted on CBP.gov. These validations are included to help ensure that the correct information is provided. With respect to the field titled “CBMA Tax Rate or Credit Assigned and Requested by Line,” use the dropdown values to select the tax rate (for beer or spirits) or credit (for wine or cider) assigned by the foreign producer/assigning entity and requested by the importer. This field is entered only after completing the “Alcohol Type” field. The rates in this column reflect only CBMA benefits, and do not include any tax reductions accrued from non-CBMA programs or other agencies.
•For the “Quantity Claimed for CBMA Tax Rate or Credit by Line” field, enter only a numeric value in barrels (for beer), gallons (for wine or cider), or proof gallons (for spirits) for the quantity on the entry line number that has a CBMA assignment.
•For the “Excise Tax Claimed to be Owed by Line for Quantity Claimed,” calculate the excise tax claimed to be owed for the quantity that has a CBMA assignment, using the assigned CBMA tax rate or credit, by line. Note, for wine, this is calculated using the following formula: ([Estimated Excise Tax Paid by Line for Quantity Claimed]) – ([Quantity Claimed for CBMA Tax Credit] x [CBMA Tax Credit Assigned]). If the result is negative, then enter”0” for this field. When calculating Excise Tax Owed on a given importation, filers should only include tax rates or credits associated with CBMA.
•For the “Refund” field, calculate the refund as a dollar amount, if any, by subtracting Column I from Column H. Note: For entries claiming the CBMA tax rate or credit at time of entry summary filing, the refund will be $0.00. Do not include any interest assessment in the calculated refund. The refund shall not exceed the “Estimated Excise Tax Paid by Line for Quantity Claimed.” Filers should only include tax rates or credits associated with CBMA.
•The Controlled Group Spreadsheet requires Controlled Group information and each data field is further described in the template posted on CBP.gov at https://www.cbp.gov/document/template/cbma-controlled-group-spreadsheet. A new Controlled Group Spreadsheet is required for calendar year 2019, even if there was no change in the Controlled Group since the original filing. If a change occurs to the information in a Controlled Group spreadsheet during 2019, a new spreadsheet must be submitted immediately and the change and date of change identified. Each importer will submit a separate Controlled Group Spreadsheet for each Controlled Group to which the importer belongs. Controlled Group spreadsheets must identify all domestic producers who are members of the Controlled Group and the alcohol type they produce. Importers submitting the Controlled Group Spreadsheet should upload the Excel (not .pdf) spreadsheet to DIS, and link to the Importer of Record number.
In DIS, importers/filers must use the following file naming convention for Controlled Group Spreadsheets:
CBP154-[Controlled_Group_Name]_[Calendar Year]_Controlled_Group_Spreadsheet.xlsx
Importers/filers must replace the text in brackets with the actual Controlled Group name (Ex: CBP154-BeerWorx_2019_Controlled_Group_Spreadsheet.xlsx)
Further, importers/filers should use the “CBMA_CONTROLLED_GROUP” DIS Document Label when submitting the Controlled Group Spreadsheets to DIS.
A Controlled Group Spreadsheet for calendar year 2019 is required to be on file with CBP pertaining to every entry for which the importer asserts a CBMA claim, even though CBP does not require the filing of the Controlled Group Spreadsheet with every entry on which a CBMA claim is made. In the event that there is a change in the reported Controlled Group or the importer receives an assignment from a new foreign producer/assigning entity, the importer will immediately submit a new Controlled Group Spreadsheet reflecting the updates. NOTE: A Calendar Year 2019 Controlled Group Spreadsheet is required for every 2019 CBMA claim.
In addition to the Controlled Group Spreadsheet provided by the importer, a foreign producer/assigning entity may provide a Controlled Group Spreadsheet to CBP directly via email to CBMA@cbp.dhs.gov for verification purposes. Controlled Group Spreadsheets submitted by the foreign producer/assigning entity will not require the IOR Number.
The Assignment Certification provides proof that a CBMA assignment from a foreign producer/assigning entity has been made and must be issued on the letterhead of the foreign producer/assigning entity. The Assignment Certification is required to be signed by a duly authorized officer or employee of the foreign producer/assigning entity. For CBMA claims submitted at time of entry or PSC, importers will submit the Assignment Certification via DIS, linked to the IOR number.
In DIS, importers/filers must use the following file naming convention for Assignment Certifications:
CBP156-[Assigning_Entity_Name]_[Calendar Year]_Assignment_Certification.pdf
Importers/filers must replace the text in brackets with the actual assigning entity name and calendar year. (Ex: CBP156-BeerWorx_2019_Assignment_Certification.pdf)
Further, importers/filers must use the “CBMA_PRODUCER_CERTIFICATE” DIS Document Label when submitting Assignment Certifications in DIS.
An Assignment Certification validating the assignment for every entry for which the importer asserts a CBMA claim is required to be on file with CBP even though CBP does not require the filing of the Assignment Certification with every entry on which a CBMA claim is made. If there is a change related to the Assignment, the importer will immediately submit a new Assignment Certification reflecting the updates. For each calendar year, importers should submit a new Assignment Certification reflecting the year of the allocation, even if the amount of the allocation is the same from year to year.
All fields in brackets on the Assignment Certification should be complete and accurate or risk the invalidation of the certification and associated CBMA benefits. Importers/filers should clearly denote the foreign producer/assigning entity granting the allocation, the specific rate or credit this allocation authorizes the importer to claim, the amount of importations allocated, the type of alcohol allocated, and the calendar year to which the allocation applies. The template for the Assignment Certification is posted to CBP.gov at https://www.cbp.gov/trade/basic-import-export/craft-beverage-modernization-tax-reform-act-2017/certification.
If you have any questions or require additional information, please contact CBMA@cbp.dhs.gov. CBP encourages trade members to continue to visit the CBMA page on CBP.gov at https://www.cbp.gov/trade/basic-import-export/craft-beverage-modernization-tax-reform-act-2017/certification
BACKGROUND
Effective January 1, 2018, the Craft Beverage Modernization and Tax Reform Act of 2017 (CBMA) (as contained in Pub. L. No. 115-97) amended the Internal Revenue Code with respect to the tax treatment of certain alcoholic beverages. The relevant provisions of the CBMA are effective for importations made during calendar years 2018 and 2019.
Under the CBMA, reduced tax rates and/or tax credits are applicable to importations of certain limited quantities of distilled spirits, beer or wine imported from each foreign producer/assigning entity (as described in the CBMA). Further, the assignments of the tax credits or reduced tax rates by the foreign producer/assigning entity to all importers may not exceed the quantities allowed by law. Thus, for an importer to be eligible to receive a reduced tax rate or a tax credit, importers must substantiate that the foreign producer/assigning entity has assigned an allotment of its reduced tax rate or tax credits to the distilled spirits, beer, or wine imported by that importer and that the quantitative limits have not been exceeded.
Pursuant to the interim final rule on Refund of Alcohol Excise Tax, 83 Fed. Reg. 40,675 (August 16, 2018), CBP and the Department of Treasury amended 19 CFR 24.36, to authorize CBP to issue refunds owed on entries where the importer received a foreign producer assignment pursuant to the CBMA when appropriate.
On October 16, 2018, CBP issued procedures and requirements regarding the implementation of the CBMA via CSMS message # 18-000609 and updates and clarifications to these procedures and requirements via CSMS # 19-000053. Those procedures and requirements applied to importations made during the 2018 calendar year. The message indicated that CBP would issue further communication for importations made during the 2019 calendar year.
PROCEDURES AND REQUIREMENTS
This communication serves to provide the procedures and requirements with regard to IMPORTATIONS MADE DURING THE 2019 CALENDAR YEAR and claimed to be subject to the CBMA. The primary change from the 2018 CBMA procedures and requirements is the timing of the filing of the supporting documentation.
IDENTIFYING ENTRIES SUBJECT TO CBMA:
CBP strongly encourages importers claiming a reduced tax rate or tax rate incorporating applicable tax credits as permitted by the CBMA (hereinafter “CBMA rate”) for importations made during the 2019 calendar year to do so at the time of entry summary. Importers must use the CBMA flag (Product Claim Code “C”) to identify entry lines for which the importer has received a CBMA assignment from a foreign producer/assigning entity and for which the CBMA rate is claimed, and declare the CBMA rate. Importers should ONLY use the CBMA flag when claiming the CBMA rate (which is a declaration that the importer has received a CBMA assignment from a foreign producer/assigning entity), whether at the time of entry summary filing or the filing of a Post Summary Correction (PSC).
For those importers that have liquidated entries for which they would like to claim the CBMA rate, the importer may file a protest. Importers filing protests claiming the CBMA rate should identify “CBMA” in the protest issue dropdown.
CBP PROCESSING OF 2019 CBMA CLAIMS:
CBP will process and liquidate calendar year 2019 CBMA claims on a monthly basis according to date of entry. CBP will begin its review with the oldest entry on file with a CBMA claim and work forward chronologically. If the importer has a complete, properly submitted and valid claim and the assignment limit has not been reached at the time of CBP review, CBP will liquidate the entry and apply the CBMA rate. For entries made after publication of this message, 2019 CBMA claimants should file complete 2019 CBMA claims by the 15th calendar day of the month following the month of entry summary date to ensure proper CBP review and liquidation with applicable CBMA benefits. Importers may file a PSC, within the applicable PSC filing period, for completion or substantiation of the CBMA claim. For liquidated entries, an importer is not precluded from filing a protest to complete or substantiate CBMA claims.
COMPLETING CBMA CLAIMS
In order to be considered a complete CBMA claim, in addition to flagging each line for which a CBMA claim is asserted, the importer must provide CBP with a complete and accurate CBMA Spreadsheet, Controlled Group Spreadsheet, and Assignment Certification. Missing, incomplete or inaccurate documents may result in the liquidation of entries at the higher non-CBMA rate. Templates for these three documents are posted on CBP.gov at https://www.cbp.gov/trade/basic-import-export/craft-beverage-modernization-tax-reform-act-2017. For CBMA claims submitted at time of entry or PSC, these documents must be uploaded into the Document Image System (DIS). For CBMA claims filed via protest, these documents must be uploaded in the ACE protest module. ONLY supporting documentation for non-ABI (paper) entries and paper protests should be submitted to the CBMA mailbox (cbma@cbp.dhs.gov) with the name of the non-ABI entry number or paper protest number in the subject line.
Importers can submit CBMA documents via the DIS XML as well as via DIS email. If submitting CBMA documents via DIS email, the category in the subject line must be CBMA. Instructions for providing the CBMA supporting documentation via DIS are included in the ACE DIS Implementation Guide at https://www.cbp.gov/document/technical-documentation/ace-dis-implementation-guide.
The CBMA Spreadsheet requires information from the importer and each data field is described in the template posted on CBP.gov at https://www.cbp.gov/document/template/cbma-spreadsheet. Importers will submit the Excel (not .pdf) spreadsheet via DIS. Importers must use the .xlsx extension when submitting the CBMA Spreadsheet; other formats, such as zipped files, .pdf and .msg are unacceptable.
Importers may include multiple entries on the CBMA Spreadsheet as long as they pertain to one Importer of Record (IOR) number. In DIS, link the spreadsheet to the entry with the earliest date of import. Importers/filers are expected to submit their CBMA Spreadsheets at least on a monthly basis – by the 15th day of the following calendar month. Filers should not submit CBMA Spreadsheets that include entry lines that have already been claimed as subject to the CBMA rate on a previously submitted CBMA Spreadsheet except in the case of submitting a replacement CBMA spreadsheet. In the case that a filer discovers errors in a CBMA Spreadsheet already submitted to DIS, the filer should submit immediately a complete and accurate replacement spreadsheet to DIS and link to the entry with the earliest date of import on the spreadsheet. When submitting corrected or replacement documentation, filers should always use the correct file naming convention as prescribed below when submitting the replacement document, regardless of the file name of the original document.
In DIS, importers/filers must use the following file naming convention for CBMA Spreadsheets:
CBP155-[Entry Number the CBMA Spreadsheet is Linked to]_CBMA_Spreadsheet.xlsx.
Importers/filers must replace the text in the brackets with the actual entry number. (Ex: CBP155-99912345678_CBMA_Spreadsheet.xlsx)
Further, importers/filers must use the “CBMA_IMPORTER_SPREADSHEET” Document Label when submitting the CBMA Spreadsheets to DIS.
As a reminder:
•Importers/filers are NOT to remove the validations in the template posted on CBP.gov. These validations are included to help ensure that the correct information is provided. With respect to the field titled “CBMA Tax Rate or Credit Assigned and Requested by Line,” use the dropdown values to select the tax rate (for beer or spirits) or credit (for wine or cider) assigned by the foreign producer/assigning entity and requested by the importer. This field is entered only after completing the “Alcohol Type” field. The rates in this column reflect only CBMA benefits, and do not include any tax reductions accrued from non-CBMA programs or other agencies.
•For the “Quantity Claimed for CBMA Tax Rate or Credit by Line” field, enter only a numeric value in barrels (for beer), gallons (for wine or cider), or proof gallons (for spirits) for the quantity on the entry line number that has a CBMA assignment.
•For the “Excise Tax Claimed to be Owed by Line for Quantity Claimed,” calculate the excise tax claimed to be owed for the quantity that has a CBMA assignment, using the assigned CBMA tax rate or credit, by line. Note, for wine, this is calculated using the following formula: ([Estimated Excise Tax Paid by Line for Quantity Claimed]) – ([Quantity Claimed for CBMA Tax Credit] x [CBMA Tax Credit Assigned]). If the result is negative, then enter”0” for this field. When calculating Excise Tax Owed on a given importation, filers should only include tax rates or credits associated with CBMA.
•For the “Refund” field, calculate the refund as a dollar amount, if any, by subtracting Column I from Column H. Note: For entries claiming the CBMA tax rate or credit at time of entry summary filing, the refund will be $0.00. Do not include any interest assessment in the calculated refund. The refund shall not exceed the “Estimated Excise Tax Paid by Line for Quantity Claimed.” Filers should only include tax rates or credits associated with CBMA.
•The Controlled Group Spreadsheet requires Controlled Group information and each data field is further described in the template posted on CBP.gov at https://www.cbp.gov/document/template/cbma-controlled-group-spreadsheet. A new Controlled Group Spreadsheet is required for calendar year 2019, even if there was no change in the Controlled Group since the original filing. If a change occurs to the information in a Controlled Group spreadsheet during 2019, a new spreadsheet must be submitted immediately and the change and date of change identified. Each importer will submit a separate Controlled Group Spreadsheet for each Controlled Group to which the importer belongs. Controlled Group spreadsheets must identify all domestic producers who are members of the Controlled Group and the alcohol type they produce. Importers submitting the Controlled Group Spreadsheet should upload the Excel (not .pdf) spreadsheet to DIS, and link to the Importer of Record number.
In DIS, importers/filers must use the following file naming convention for Controlled Group Spreadsheets:
CBP154-[Controlled_Group_Name]_[Calendar Year]_Controlled_Group_Spreadsheet.xlsx
Importers/filers must replace the text in brackets with the actual Controlled Group name (Ex: CBP154-BeerWorx_2019_Controlled_Group_Spreadsheet.xlsx)
Further, importers/filers should use the “CBMA_CONTROLLED_GROUP” DIS Document Label when submitting the Controlled Group Spreadsheets to DIS.
A Controlled Group Spreadsheet for calendar year 2019 is required to be on file with CBP pertaining to every entry for which the importer asserts a CBMA claim, even though CBP does not require the filing of the Controlled Group Spreadsheet with every entry on which a CBMA claim is made. In the event that there is a change in the reported Controlled Group or the importer receives an assignment from a new foreign producer/assigning entity, the importer will immediately submit a new Controlled Group Spreadsheet reflecting the updates. NOTE: A Calendar Year 2019 Controlled Group Spreadsheet is required for every 2019 CBMA claim.
In addition to the Controlled Group Spreadsheet provided by the importer, a foreign producer/assigning entity may provide a Controlled Group Spreadsheet to CBP directly via email to CBMA@cbp.dhs.gov for verification purposes. Controlled Group Spreadsheets submitted by the foreign producer/assigning entity will not require the IOR Number.
The Assignment Certification provides proof that a CBMA assignment from a foreign producer/assigning entity has been made and must be issued on the letterhead of the foreign producer/assigning entity. The Assignment Certification is required to be signed by a duly authorized officer or employee of the foreign producer/assigning entity. For CBMA claims submitted at time of entry or PSC, importers will submit the Assignment Certification via DIS, linked to the IOR number.
In DIS, importers/filers must use the following file naming convention for Assignment Certifications:
CBP156-[Assigning_Entity_Name]_[Calendar Year]_Assignment_Certification.pdf
Importers/filers must replace the text in brackets with the actual assigning entity name and calendar year. (Ex: CBP156-BeerWorx_2019_Assignment_Certification.pdf)
Further, importers/filers must use the “CBMA_PRODUCER_CERTIFICATE” DIS Document Label when submitting Assignment Certifications in DIS.
An Assignment Certification validating the assignment for every entry for which the importer asserts a CBMA claim is required to be on file with CBP even though CBP does not require the filing of the Assignment Certification with every entry on which a CBMA claim is made. If there is a change related to the Assignment, the importer will immediately submit a new Assignment Certification reflecting the updates. For each calendar year, importers should submit a new Assignment Certification reflecting the year of the allocation, even if the amount of the allocation is the same from year to year.
All fields in brackets on the Assignment Certification should be complete and accurate or risk the invalidation of the certification and associated CBMA benefits. Importers/filers should clearly denote the foreign producer/assigning entity granting the allocation, the specific rate or credit this allocation authorizes the importer to claim, the amount of importations allocated, the type of alcohol allocated, and the calendar year to which the allocation applies. The template for the Assignment Certification is posted to CBP.gov at https://www.cbp.gov/trade/basic-import-export/craft-beverage-modernization-tax-reform-act-2017/certification.
If you have any questions or require additional information, please contact CBMA@cbp.dhs.gov. CBP encourages trade members to continue to visit the CBMA page on CBP.gov at https://www.cbp.gov/trade/basic-import-export/craft-beverage-modernization-tax-reform-act-2017/certification