On August 16, 2018, US Customs and Border Protection (CBP) published in the Federal Register an interim rule soliciting comments [CBP Dec. 18–09; Docket No. USCBP–2018–0033] to revisions updating language in the CBP regulations to reflect the current organization of CBP and the Department of the Treasury. The document also eliminates a restriction pertaining to CBP’s authority to refund excessive duties, taxes, fees, or interest imposed on distilled spirits, wine, and beer to facilitate implementation of Subpart A (Craft Beverage Modernization and Tax Reform) of Part IX of the Tax Cuts and Jobs Act, signed December 22, 2017, commonly referred to as the Craft Beverage Modernization Act (CBMA).
The CBMA amended the Internal Revenue Code for two calendar years with respect to the tax treatment of alcoholic beverages, including beer, wine, and distilled spirits. For an importer to be eligible to receive a reduced tax rate or a tax credit, the importer must be able to substantiate that the foreign producer has assigned an allotment of its reduced tax rate or tax credits to the beer, wine, or distilled spirits imported by that importer. The new 19 C.F.R. § 24.36(d)(10) makes it clear that CBP has authority to refund the difference between the full excise taxes an importer pays at the time of entry summary filing and the CBMA’s lower effective tax rate. An importer must request and substantiate its entitlement to the reduced tax rate or tax credit appropriately.
The interim final rule is effective August 16, 2018; comments must be received by October 15, 2018.
