Trade groups urge equal tax deferral for importers

28th April, 2020 by Nicola Carruthers

Six trade associations have written to the US government to call for uniformity in the delay of federal excise tax payments for domestic and imported alcohol amid the pandemic.

The US government will delay excise tax for importers that have suffered “significant financial hardship”

Earlier this month, the Alcohol and Tobacco Tax and Trade Bureau (TTB) allowed all US distillers, brewers and vintners to defer their federal excise tax payments for 90 days in the wake of the coronavirus pandemic.

On 20 April, US federal agency Customs and Border Protection issued guidance for importers that allowed them to postpone their federal excise tax payments, but only if they can prove they have faced a loss of more than 40% in revenue.

Under the recent announcement, importers are required to demonstrate that they suffered a “significant financial hardship” in order to qualify for the extended payment deadline for certain duties, fees and taxes for 90 days.

This “onerous requirement and disparate guidance” will mean importers will not have “critical” funds to project jobs.

On Friday (23 April), six trade bodies wrote a letter to the secretary of the Treasury, Steven Mnuchin, calling for “parity” in the delay of federal tax payments between domestic and imported wine, beer and distilled spirits.

The letter was signed by the Distilled Spirits Council of the US (Discus), American Distilled Spirits Alliance, the National Association of Beverage Importers, Beer Institute, Wine & Spirits Wholesalers of America, and the Wine and Spirits Shippers Association.

The letter urged Customs and Border Protection to bring its policy in line with the TTB.

“We urge the administration to revise its most recent action to provide parity between importers and domestic suppliers in terms of the ability to defer payment of the federal excise tax and extend such deferrals for consumption withdrawals through July 1, 2020,” the letter said.

The groups highlighted that the alcohol industry is an important economic driver in the US, generating millions of jobs and billions of dollars in wages, taxes and employee benefits which are now more critical than ever.

The letter continued: “In these difficult times, the industry has contributed millions to relief efforts including those aimed at helping workers impacted by the closures of restaurants and bars. The importation activities are key components of the supply chain in these essential businesses.”

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