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Craft Modernization and Tax Reform Act

by | Jan 8, 2018 | ACSA, alcohol beverage law, Craft Spirits, TTB

Senate Bill 51-49 includes a two-year version of the Craft Beverage Modernization and Tax Reform Act, which cuts the federal excise tax on spirits, wine and beer, allows in-bond transfers of bottled spirits and provides for the expensing of certain costs related to the aging process of alcohol.

The Craft Beverage Modernization and Tax Reform Act creates a tiered excise tax rate for distilled spirits, a shift from the flat $13.50 per proof gallon rate. The rate of tax is lowered to $2.70 per proof gallon on the first 100,000 proof gallons of distilled spirits, $13.34 for all proof gallons in excess of that amount but less than 22,130,000 proof gallons, and $13.50 for amounts greater.

Like many others in the alcohol industry, the Alcohol and Tobacco Tax and Trade Bureau (TTB) is experiencing the effects of the Act. Sizeable federal excise tax reductions on beer, wine, and spirits will undoubtedly impact the TTB’s regulations in one way or another, but for the moment TTB officials are still trying to narrow the practical implications of the Act which went into effect January 1, 2018. TTB has not yet released guidance but their website reads “On December 22, 2017, the President signed into law the Tax Cuts and Jobs Act of 2017, which makes extensive changes to the Internal Revenue Code of 1986, including provisions related to alcohol that are administered by TTB. Those changes are effective January 1, 2018. We are currently assessing the impact of these changes on TTB forms, regulations, and systems, and will issue guidance and information in the coming weeks.”


By Ashley Hanke

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The foregoing was prepared as general information. It is not meant to provide legal advice granting any specific matter and should not be acted upon without professional counsel. If you have questions or require additional information regarding these or other related matters, please contact Malkin Law, P.A. This material may be considered attorney advertising under certain rules of professional conduct.