TTB ISSUES GUIDANCE ON ELIMINATION OF BOND REQUIREMENTS FOR SMALL PRODUCERS
As we discussed in our earlier blog post, as of January 1, 2017, TTB-licensed breweries, distilled spirits plants and wineries that owed less than $50,000 in excise taxes in 2016, and expect to owe less than $50,000 in 2017, will no longer be required to hold a bond. TTB started off the new year by issuing some additional guidance regarding the elimination of the bonding requirement for such producers. You can find the industry circular at this link.
Please note: if you are an existing, licensed, and bonded producer and you feel you are eligible for the bond exemption, TTB will not begin processing your request until it has received your final tax payments for 2016 excise taxes.
Don’t Forget – Starting January 1, Eligible Licensees Can Amend TTB Permits To Eliminate Bonds
As of January 1, 2017, if you are currently licensed with TTB as a brewery, distilled spirits plant or winery and owed less than $50,000 in excise taxes in 2016, and expect to owe less than $50,000 in 2017, you will no longer be required to hold a bond. This is great news for all the small producers out there!
This change, however, does not take place automatically and requires an amendment to your existing TTB permits. As such, after January 1, 2017, if you owed less than $50,000 in excise taxes in 2016 and expect to owe less than $50,000 in excise taxes, you will be able to amend your TTB permits to request exemption from the bond requirements. This amendment can be done online for any licensees that obtained their permits through Permits Online or on paper for any licensees that originally obtained their permits with paper applications.
Note that the bond exemption is applied a bit differently with respect to new permit applicants. Any new applications to operate breweries/brewpubs, distilled spirits plants, or wineries submitted to TTB before January 1, 2017 are still required to include a bond, even if the applicant expects to be eligible for the bond exemption. TTB will review the application and return any bond-related materials if they grant the bond exemption.
Applications submitted after January 1, 2017 for eligible small producers (i.e., those who do not expect to owe less than $50,000 in excise taxes in 2017) will not require a bond.
For further information or for assistance amending your TTB permits, please contact Bahaneh Hobel.