Wineries will be allowed to claim the full value of the new federal excise tax credit on wine stored at bonded wine cellars or other wineries through 2019, Alcohol & Tobacco Tax & Trade Bureau said in a new ruling.
Without the ruling, wineries that are storing wine at facilities other than where the wine was produced would have to bring them back to the winery before shipping to its customer in order to claim the credit.
“This will provide wineries with greater clarity and certainty, enabling them to claim the full value of the new credit,” said Robert P. (Bobby) Koch, President/CEO of Wine Institute. The new expanded credit was enacted last December as part of the two-year Craft Beverage Modernization and Tax Reform Act. “We want to thank the TTB for this positive action and acknowledge the work by Members of Congress who encouraged this action.”
WineAmerica was quick to applaud the development, saying it is delighted that wineries throughout the country will now be able to take full advantage of reduced federal excise taxes.
WineAmerica began working on this issue immediately in early March, and while there has been much activity and many meetings with both Republican and Democrat House and Senate members, the association said two key meetings occurred on Thursday, May 10 with Oregon Senators Jeff Merkley and Ron Wyden.
Their constituent, Janie Brooks Heuck, co-owner of Brooks Wines in the Willamette Valley as well as Vice Chair of the WineAmerica Board, met with both Senators in Washington, DC and explained how the TTB’s initial guidelines would significantly affect her winery and hundreds like it nationwide.
Two days earlier, Jana McKamey of the Oregon Winegrowers Association had also spoken with the staff of her Senators.
Immediately after the Thursday morning meeting, Janie was contacted by her Senator’s staff letting her know that TTB officials had agreed to extend the guidelines until the end of next year.
“This continues a pattern of Oregon winery principals, trade associations, and legislators playing leadership roles, starting when Senator Wyden actually initiated the CBMTRA three years ago,” WineAmerica said, adding:
“It’s also a classic example of the power of national grassroots public policy advocacy through WineAmerica’s coordination of individual wineries, state trade associations, and the national association.”
“This ruling now ensures that the Congressional intent of the Craft Beverage Modernization and Tax Reform Act (CMBTRA) will be fulfilled by allowing all wineries to benefit, and also allows more time to seek additional changes to enhance the law’s full potential,” said WineAmerica President Jim Trezise. “We are grateful to our staff, lobbyists, Congressional supporters, and the TTB for this positive development.”
The “alternate procedure” is needed based on TTB’s determination that the new law does not allow for the transferability of the credit during this two-year period. Many wineries use fulfillment houses, custom crush facilities and bonded wine warehouses to store their wine, and the strict interpretation of the bill disallowed these facilities from claiming the credit.
Wine Institute has worked since 2015 to pass the Craft Beverage legislation (H.R. 747/S. 236) which saves California wineries more than $70 million annually in excise tax reductions. Over 300 Representatives and 55 Senators signed on to sponsor the bill, which was introduced by Sen. Ron Wyden (D-OR) and Sen. Roy Blunt (R-MO). Sen. Rob Portman (R-OH) offered the amendment that added the Craft Beverage bill to the broader tax reform legislation.
Wine Institute is continuing to work with a broad coalition of industry groups to extend the provisions of the CBMTRA beyond Dec. 31, 2019.