The Protecting Americans from Tax Hikes Act (the “PATH Act”) took effect on January 1st, 2017. The PATH Act changes the bond requirements for some TTB-permitted producers that are liable for excise taxes on distilled spirits, wine, and beer. Currently, all producers are required to file a bond covering operations and withdrawals of spirits, wine, and beer. The PATH Act provides that producers that reasonably expect not to owe more than $50,000 in excise taxes during the year are no longer required to have a bond on file with the TTB. Beginning this year, a new applicant that indicates that they do not expect to owe more than $50,000 in excise taxes during the first calendar year will not be required to submit a bond with the permit application. Also, an existing producer may request termination of its bond requirement by filing an amendment to its permit, which the TTB will process only after the producer has submitted excise tax returns, payments, and reports for 2016, so that the TTB can determine the producer’s eligibility to terminate its bond. The chart below provides examples of production volumes that would result in annual excise taxes of less than $50,000, meaning that producers under those volumes would not be required to file a bond with the TTB covering operations. The TTB has issued Industry Circular 2016-2 with more information, and will publish regulations to implement the above statutory changes in the near future. For more information regarding the PATH Act and TTB bond requirements, contact one of the attorneys at Strike & Techel for further guidance.
Nobody hopes for an audit, but like cold cloudy summers in San Francisco, they’re bound to happen. Ideally, if you’re selected for an audit by the Alcohol and Tobacco Tax and Trade Bureau (“TTB”), you will have already been following the federal requirements. To aid in compliance, last March the TTB issued a tutorial about the common issues found during TTB audits, which is available here. As the ramp up to harvest begins, this is a good resource to circle back with to ensure compliance. Within the tutorial the TTB listed the most common compliance issues by area, and within that by frequency of occurrence. Further, they provided helpful tips on how to avoid problems in those areas. The issues most frequently seen by the TTB’s Tax Audit Division are: Records: General record keeping; Transfer in bond record; Tax paid removal records; and Export documentations. Inventory: Inventory timing, records and signature; Inventory losses and loss limits; and Records of bottled or packed wine. Reporting and Tax Payment: Timely filing the Report of Wine Premises Operations and correctly completing the form; Calculating and paying tax on wine; Filing claims for wine or spirits lost or destroyed while in bond; Tax payment and filing TTB F5000.24 Excise Tax Returns; and Signature authority. Basic Permit, Registration and Bond: Filing amended applications to report changes; and Maintaining adequate bond coverage. If you would like assistance with a TTB audit or help with TTB compliance matters, please feel free to contact the attorneys at Strike & Techel. Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2010-2011 · All Rights Reserved ·
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