Tag archives for “Small Brewers”

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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Small Craft Brewers Get Bigger as the Brewers Association Changes Their Bylaws

As the formidable Harry Schuhmacher, editor and publisher of BeerNet, reported last week, the Brewers Association Board recently approved a change to the definition of “small” in their bylaws as it applies to craft brewers. The Brewers Association was formed in 2005, after a merger of two longstanding organizations, The Association of Brewers and Brewers’ Association of America. Its mission is to, “promote and protect small and independent American brewers, their craft beers and the community of brewing enthusiasts.” Currently, their membership includes over 1,000 U.S. brewers. The definition of “small” was changed in their bylaws from those brewing a maximum of 2 million barrels to those brewing a maximum of 6 million barrels. The definition is relevant for both classes of the Brewers Association’s membership, Professional Packaging Brewers and Associates. The change allows brewers that were nearing the 2 million barrel mark to remain a part of the Brewers Association. Boston Beer Co., makers of Samuel Adams and a public company with a current market cap of $1.21 billion, was poised to pass the 2 million barrel mark, but the recent change allows them to remain a member. Regarding the change, Nick Matt, chairman of the Board of Directors, stated, “A lot has changed since 1976. The largest brewer in the U.S. has grown from 45 million barrels to 300 million barrels of global beer production. The craft brewer definition and bylaws now more accurately reflect and align with our governmental affairs efforts.” In 2010, the Brewers Association supported H.R. 4278/S. 3339, which aims to expand a reduced excise tax for certain small brewers. The excise tax for small brewers was established in 1976 and currently applies to those producing 2 million barrels per year or less. The proposed bills would both increase the production allowances for “small brewers” to 6 million barrels per year, and decrease the excise tax for such brewers. In the House, the bill was last referred to the House Committee on Ways and Means, while in the Senate, an identical bill remains in the Committee on Finance. 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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