With the start of this year, the Alcohol and Tobacco Tax and Trade Bureau (TTB) has eased regulations on bonds for small scale breweries. If a brewery reasonably expects to be liable for not more than $50,000 in taxes imposed on distilled spirits, wine, and beer for the calendar or the preceding year, it will be exempt from bond requirements.
Practically speaking, breweries making less than 7,143 barrels annually will “no longer have to keep a bond filed with the TTB, which is essentially an advance payment of taxes,” Paul Gatza, director of the Brewers Association (BA) said. It is believed that far more than 90% of all breweries in the U.S. will benefit from the new regulation.
A brewer’s bond is a way of guaranteeing TTB (or states that require them) that production tax, also known as excise tax on beer, is going to get paid. If a brewery fails to make its tax obligations, the bond is going to kick in and cover the deficient amount.