TTB simplifies excise tax regulations for small brewers

To give brewers time to adjust to quarterly filing and reporting, the TTB is delaying the
effective date of T.D. TTB–123 until January 1, 2015.

Last week, in news that we can only describe as strange and baffling, the federal government shunned bureaucracy and made something simpler for its growing tax base in craft beer. The Alcohol and Tobacco Tax and Trade Bureau (TTB) decided to simplify its excise tax regulations for small brewers, and the Beer Institute (and CBB), praised the measure.

“The brewing industry appreciates the work that the TTB has done to refine their rules and regulations to reduce unnecessary bureaucracy,” said Jim McGreevy, Beer Institute president and CEO. “The beer industry is experiencing immense change right now, thanks to efforts like this that open pathways to the marketplace for small brewers.”

This rule is for the benefit of small brewers, essentially defined by TTB as those which produce less than 7,200 barrels (bbls). This final rule, T.D. TTB–123, Small Brewers Bond Reduction and Requirement to File Tax Returns, Remit Tax Payments and Submit Reports Quarterly, adopts as a permanent regulatory change a flat $1,000 penal sum for the brewer’s bond for brewers whose excise tax liability is reasonably expected to be not more than $50,000 in a given calendar year, and who were liable for not more than $50,000 in such taxes during the preceding calendar year. TTB originally set forth this change in a temporary rule issued on Dec. 7, 2012, which was set to expire in December 2015.

In addition, this final rule adopts the TTB proposal outlined in Notice No. 131, Small Brewers Bond Reduction, also issued on Dec. 7, 2012, requiring brewers whose excise tax liability is reasonably expected to be not more than $50,000 in a given calendar year, and who were liable for not more than $50,000 in such taxes during the preceding calendar year, to file federal excise tax returns, pay tax and submit reports of operations on a quarterly basis. TTB expects these amendments to the regulations in 27 CFR Part 25–Beer, to reduce the regulatory burdens on such brewers and reduce their administrative costs, and to create administrative efficiencies for TTB.

The new rules will become effective on Jan. 1, 2015. For more information, the TTB press release can be found here. In September, the Beer Institute joined a chorus of voices in the beverage alcohol industry that urged Congress to fully fund the Obama Administration’s $101 million request for the TTB budget.

“The TTB is vital to the success of the dynamic beer industry,” McGreevy said. “The agency has a proven history of maintaining balanced regulations that support the needs of both consumers and brewers. This is not the time to question the budget of an agency that is integral to job creation and expansion for brewers and beer importers.”