Tag archives for “Federal Alcohol Legislation”

Changes to Small Brewery, Winery and Distillery Bonding, Reporting and Filing Requirements

The general rule for excise tax reporting for alcohol producers is that returns must be filed semi-monthly (i.e. twice a month). A special exception to that rule allows a small producer, who does not reasonably expect to be liable for more than $50,000 in excise tax in the year, to file quarterly returns. Each small producer is required to make a choice of whether to file quarterly or semi-monthly, with that choice impacting the bonding requirements for the production facility. The less frequent the excise tax payment, the higher the required bond amount. Very small wineries currently benefit from even longer reporting and tax deadlines. Wineries that expect to pay less than $1,000 in wine excise taxes in the coming year may file excise tax returns annually. Operations reports may also be filed annually if the winery doesn’t expect to produce more than 20,000 gallons of wine in any one month in the calendar year. Now, under recent guidance from the Alcohol and Tobacco Tax and Trade Bureau (“TTB”), small brewers will be forced to file returns quarterly rather than semi-monthly. This change will affect around 90% of licensed brewers. With the mandatory quarterly filing, the required bond is set at a flat $1,000 amount (previously, the bond for a brewer paying $50,000 in excise tax would have been $5,000 if filing semi-monthly, and close to $15,000 if filing quarterly). A brewery filing quarterly tax returns must also file a quarterly report of operations. To further lessen the burden of reporting for both brewers and TTB employees, the information required in the reports has been revised, with two sections removed. To see the full guidance, click here. In addition to the TTB changes for small breweries, there is also a bill pending in the Senate that could reduce the compliance burden for all small producers. It would exempt small breweries, wineries and distilleries (i.e. not liable for more than $50,000 in excise tax in the year) from all current bonding requirements and would allow any small producer – not just small wineries—owing less than $1,000 a year to file annually. The proposal passed the Senate Finance Committee on February 11, 2015, and is awaiting consideration on the Senate floor. It has not yet been introduced in the House. If you have any questions about brewery, winery or distillery operations reporting or taxes, contact an attorney at Strike & Techel. Imbiblog is published for general informational purposes only and is not intended as legal advice. Copyright © 2015 • All Rights Reserved •

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Federal Legislative Update

In the past few weeks there has been a significant amount of new legislation relating to the alcoholic beverage industry introduced on both the state and federal level. The increased legislative efforts are interesting in light of the fact that in March 1933, 78-years ago, the end of Prohibition was kicked off when Franklin Roosevelt asked Congress to pass “The Beer Act,” which was eventually passed on April 7, 1933. The Twenty-First Amendment was ratified nearly eight months later on December 5, 1933. A re-cap of the two most high-profile pieces of federal proposed legislation is below. Later this week we’ll take a look at key pieces of state proposed legislation. S. 534 – The Brewer’s Employment and Excise Tax Relief Act of 2011, or BEER Act as it is popular referred to, was introduced by Senator John Kerry (D-Mass.) on March 9, 2011. As of today, the Bill has twenty-three cosponsors. The bipartisan bill would reduce the excise tax paid by small brewers from $7.00 to $3.50 per barrel on the first 60,000 barrels produced each year. Small breweries would then pay $16 per barrel for production above 60,000 and up to two million barrels. Currently, all brewers regardless of size pay $18 per barrel for all production above 60,000 barrels. The Bill would also revise the current definition of “small breweries” from those that produce less than two million barrels per year to those that produce less than six million. H.R. 1161– Just over a week after S. 534 was introduced, the Community Alcohol Regulatory Effectiveness Act of 2011 was introduced by Representative Jason Chaffetz (R-UT) on March 17, 2011. As of today, the Bill has eight cosponsors. The Bill is a re-introduction of H.R. 5034, which was hotly contested last year and eventually abandoned. The Bill, depending on which of the three-tiers one is standing in or closest to, is either about protecting states’ rights to regulate alcohol or about allowing Commerce Clause violations to protect alcohol distributor’s interests. As 2011 progresses we are sure to see the heated debate unfold once again. 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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