Craft Beverage Modernization Act (CBMA)

Initial 2020 Messaging – Legislation Extension 2020

Background

Effective January 1, 2018, the Craft Beverage Modernization and Tax Reform Act of 2017 (CBMA) (as contained in Pub. L. No. 115-97) amended the Internal Revenue Code with respect to the tax treatment of certain alcoholic beverages.  The provisions of the CBMA were effective during calendar years 2018 and 2019.  Effective January 1, 2020, CBMA (as contained in Pub. L. No. 116-94) was extended through calendar year 2020.

Under the CBMA, reduced tax rates and/or tax credits are applicable to importations of certain limited quantities of distilled spirits, beer or wine imported from each assigning entity (as described in the CBMA).  Further, the allocations of the tax credits or reduced tax rates by the assigning entity to all importers may not exceed the quantities allowed by law.  As a result, for an importer to be eligible to receive a reduced tax rate or a tax credit, the importer must be able to substantiate that the assigning entity has assigned an allotment of its reduced tax rate or tax credits to the distilled spirits, beer, or wine imported by that importer. 

Guidance

With respect to CBMA claims on entries with a date of import in 2020, CBP advises the trade community to follow the 2018-2019 procedures and requirements currently in place for CBMA.  CBP will issue further instruction on CBMA 2020 claims in early 2020.

Please refer questions to CBMA@cbp.dhs.gov.