USA: Excise tax cuts for brewers made permanent

Federal excise tax cuts for brewers and importers have finally been made permanent. Last week United States Congress passed a massive USD 2.3 trillion COVID relief bill which contained additional regulations regarding a permanent reduction in the beer tax for smaller breweries. However, the still incumbent US President Donald Trump, initially refused the bill and called it a "disgrace" full of "wasteful" items demanding that various spending provisions, including some foreign aid, be ripped from the budget. After nearly one week he changed his mind, called the enactment of the bill “good news” and finally signed it on Sunday.

The Craft Beverage Modernization and Tax Reform Act (CBMTRA) was implemented on Dec. 20, 2017 as part of the Tax Cuts and Jobs Act in 2017 and lowered the federal excise tax for breweries, wineries, and distilled spirits producers for a period of two years. (, 13.6.2017) In December 2019 CBMTRA was extended for one more year and was set to finally expire on December 31, 2020. (, 20.12.2019)

Lobby groups including the Brewers AssociationBeer InstituteDistilled Spirits Council of the United StatesAmerican Craft Spirits AssociationWine InstituteWineAmerica and the United States Association of Cider Makers have ever since been fighting for a permanent implementation of the CBMTRA and could in the ned convince a bipartisan majority of Congress to vote in favor of the act. (, 11.6.2019)

While some CBMA provisions like the reduced tax rates and tax credits have been made permanent, statutory changes include restrictions on the transfer of bottled distilled spirits in bond, changes to the type of processing activities that qualify for reduced tax rates for distilled spirits, and changes to the single taxpayer provision. The Alcohol and Tobacco Tax Trade Bureau (TTB) will soon issue updated guidance.

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