On January 1, 2018 the Craft Beverage Modernization and Tax Act (CBMA) entered into force allowing for the payment of lower Internal Revenue Tax (IRT), through reduced tax rates or tax credits for certain alcoholic beverages imported into the United States.

The CBMA changed the tax rate structures for beer, wine, and distilled spirits to allow for certain quantities to be imported under these lower tax rates or tax credits when the importer has an approved allocated quantity from the foreign producer. Only imports with an approved allocation from a foreign producer are eligible for the reduced tax rates or tax credits for the specified quantity allowed under the law.

U.S. Customs and Border Protection (CBP) has become aware of certain alcoholic beverage imports entered with the payment of a lower Internal Revenue Tax rate than that required by Internal Revenue Code. While the Automated Commercial Environment may allow for the payment of a lower rate, it is the responsibility of the importer/filer to ensure the proper rate is claimed and paid for imported merchandise. Below you will find CBP’s CBMA Tax Rate Table for imported beer, wine, and distilled spirits.

For example, sparkling wine has an IRT rate of $3.40 per gallon when no CBMA foreign allocation is claimed. The maximum tax credit available under the CBMA for sparkling wine is $1.00 per gallon, making the lowest valid CBMA IRT rate for sparkling wine $2.40 per gallon.

CBP is reminding the trade community of their responsibility to file entries with the correct IRT as part of importers’ obligation to exercise reasonable care and brokers’ responsibility to demonstrate responsible supervision and control over their Customs business.

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.