Rule2022-28375
Refund of Alcohol Excise Tax
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
December 30, 2022
Effective
January 1, 2023
Issuing agencies
Homeland Security DepartmentU.S. Customs and Border ProtectionTreasury Department
Abstract
This document amends U.S. Customs and Border Protection regulations to implement certain changes made by the Taxpayer Certainty and Disaster Tax Relief Act of 2020, which amended the Craft Beverage Modernization Act provisions of the Tax Cuts and Jobs Act of 2017. Pursuant to these changes, the responsibility for administering refunds, reduced tax rates, and tax credits on imported alcohol is moving from U.S. Customs and Border Protection (CBP) to the U.S. Department of the Treasury, effective January 1, 2023.
Full Text
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<title>Federal Register, Volume 87 Issue 250 (Friday, December 30, 2022)</title>
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[Federal Register Volume 87, Number 250 (Friday, December 30, 2022)]
[Rules and Regulations]
[Pages 80442-80444]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-28375]
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DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
DEPARTMENT OF THE TREASURY
19 CFR Parts 24
[CBP Dec. 22-26; Docket No. USCBP-2018-0033]
RIN 1515-AE39
Refund of Alcohol Excise Tax
AGENCY: U.S. Customs and Border Protection, Department of Homeland
Security; Department of the Treasury.
ACTION: Interim final rule; request for comments.
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SUMMARY: This document amends U.S. Customs and Border Protection
regulations to implement certain changes made by the Taxpayer Certainty
and Disaster Tax Relief Act of 2020, which amended the Craft Beverage
Modernization Act provisions of the Tax Cuts and Jobs Act of 2017.
Pursuant to these changes, the responsibility for administering
refunds, reduced tax rates, and tax credits on imported alcohol is
moving from U.S. Customs and Border Protection (CBP) to the U.S.
Department of the Treasury, effective January 1, 2023.
DATES: This interim final rule is effective January 1, 2023; comments
must be received by March 2, 2023.
ADDRESSES: You may submit comments, identified by docket number Docket
No. USCBP-2018-0033, by one of the following methods:
<bullet> Federal Rulemaking Portal: <a href="http://www.regulations.gov">http://www.regulations.gov</a>.
Follow the instructions for submitting comments.
<bullet> Mail: Due to COVID-19-related restrictions, CBP has
temporarily suspended its ability to receive public comments by mail.
Instructions: All submissions received must include the agency name
and docket number for this rulemaking. All comments received will be
posted without change to <a href="http://www.regulations.gov">http://www.regulations.gov</a>, including any
personal information provided. For detailed instructions on submitting
comments and additional information on the rulemaking process, see the
`Public Participation' heading of the SUPPLEMENTARY INFORMATION section
of this document.
Docket: For access to the docket to read background documents or
comments received, go to <a href="http://www.regulations.gov">http://www.regulations.gov</a>. Due to the
relevant COVID-19-related restrictions, CBP has temporarily suspended
on-site public inspection of the public comments.
FOR FURTHER INFORMATION CONTACT: Kellee Gross, Branch Chief, Trade
Processes Branch, Office of Trade, 202-815-1699,
<a href="/cdn-cgi/l/email-protection#c4afa1a8a8a1a1eaa9eaa3b6abb7b784a7a6b4eaa0acb7eaa3abb2"><span class="__cf_email__" data-cfemail="741f11181811115a195a13061b0707341716045a101c075a131b02">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Public Participation
Interested persons are invited to participate in this rulemaking by
submitting written data, views or arguments on all aspects of the
interim rule. See ADDRESSES above for information on how to submit
comments. U.S. Customs and Border Protection (CBP) also invites
comments that relate to the effects that might result from this interim
rule. Comments that will provide the most assistance to CBP will
reference a specific portion of the interim rule, explain the reason
for any recommended change, and include data, information, or authority
that supports such recommended change.
II. Background
Sections 13801-13808 of the Tax Cuts and Jobs Act of 2017 (Pub. L.
115-97), signed December 22, 2017, commonly referred to as the Craft
Beverage Modernization Act (CBMA), amended the Internal Revenue Code
for two calendar years with respect to the tax treatment of alcoholic
beverages, including beer, wine, and distilled spirits. The CBMA
authorized reduced tax rates and tax credits for alcoholic beverages.
On August 16, 2018, CBP published an interim final rule, CBP Dec. 18-
09, in the Federal Register (83 FR 40675), updating the language of
title 19 of the Code of Federal Regulations (CFR) to implement the CBMA
and make other technical changes to 19 CFR part 24. Specifically, the
interim final rule amended 19 CFR 24.36 to encompass CBP's authority to
refund the difference between the full excise tax rate paid by an
importer to CBP at the time of entry summary filing and the CBMA's
lower effective tax rate. CBP solicited comments on this interim final
rule. No comments were received. On December 19, 2019, the Further
Consolidated Appropriations Act was signed, which extended the relevant
provisions of the CBMA through calendar year 2020. See Public Law 116-
94.
On December 27, 2020, the Taxpayer Certainty and Disaster Tax
Relief Act of 2020 (Tax Relief Act) was enacted. See Public Law 116-
260, Division EE, sections 106-110. The Tax Relief Act amended and made
permanent the CBMA. Section 107(e) of the Tax Relief Act directed that
the Secretary of the Treasury (or the Secretary's delegate within the
Department of the Treasury (Treasury)) shall implement and administer
the new statutory provisions in coordination with CBP. In June 2021,
Treasury informed Congress that it intended to delegate administration
of the CBMA import refund program, formerly administered by CBP under
19 CFR 24.36(d)(10), to the Alcohol and Tobacco Tax and Trade Bureau
(TTB) in the ``Report to Congress on Administration of Craft Beverage
Modernization Act Refund Claims for Imported Alcohol.'' \1\ The
authority subsequently was delegated to TTB.
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\1\ ``Report to Congress on Administration of Craft Beverage
Modernization Act Refund Claims for Imported Alcohol,'' June 2021,
available at <a href="https://www.ttb.gov/images/pdfs/treasury-cbma-import-claims-report-june-2021.pdf">https://www.ttb.gov/images/pdfs/treasury-cbma-import-claims-report-june-2021.pdf</a>.
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On September 23, 2022, TTB published a temporary rule in the
Federal Register (87 FR 58021) to implement regulations for the
administration of the CBMA. Concurrent with the temporary rule, TTB
published a Notice of Proposed Rulemaking in the Federal Register (87
FR 58043) proposing to make the temporary regulations final and
soliciting comments.
Likewise, CBP is publishing this interim final rule to update the
regulations issued in CBP Dec. 18-09 to reflect the transfer of
authority for administration of the CBMA import refund program to TTB
beginning on January 1, 2023, and to direct the public to the relevant
TTB regulations regarding refunds administered by TTB. CBP is accepting
comments on these changes to the regulations.
III. Discussion of Changes to Sec. 24.36
Section 24.36 deals with refunds of excessive duties, taxes, fees,
or interest. CBP is amending the introductory text to paragraph (d) to
clarify the basis for TTB's authority to administer refunds arising
under the CBMA beginning on January 1, 2023. CBP is amending paragraph
(d)(10) to state that it applies to goods entered or withdrawn from
warehouse on or before December 31, 2022, because after that date TTB
will handle the refunds covered by the paragraph. CBP is also amending
paragraph (d)(10) to reflect that the statutory authorities, giving CBP
the authority to administer claims pertaining to these goods entered or
withdrawn from warehouse on or before December 31, 2022, reauthorized
the CBMA twice.\2\ CBP is also amending
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paragraph (e) by removing the entirety of the existing paragraph and
replacing it with revised paragraphs (e)(1) and (e)(2) to clearly
direct the public to the relevant TTB regulations. Paragraph (e)(1)
directs the public to the TTB regulations governing refunds for
overpayment of alcohol and tobacco excise taxes. Paragraph (e)(2)
directs the public to the TTB regulations governing refunds for alcohol
excise taxes on or after January 1, 2023, based on assignment of a
reduced tax rate or tax credits to an importer by a foreign producer.
The refunds described in paragraph (e) are administered by TTB.
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\2\ The Further Consolidated Appropriations Act, Public Law 116-
94 (December 20, 2019), reauthorized the CBMA for 2020. The Taxpayer
Certainty and Disaster Tax Relief Act of 2020, Public Law 116-260
(December 27, 2020), made the CBMA permanent and gave CBP the
authority to administer CBMA claims through December 31, 2022.
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IV. Statutory and Regulatory Requirements
A. Inapplicability of Notice and Delayed Effective Date
The Administrative Procedure Act (APA) requirements in 5 U.S.C. 553
govern agency rulemaking procedures. Section 553(b) of the APA
generally requires notice and public comment before issuance of a final
rule. In addition, section 553(d) of the APA requires that a final rule
have a 30-day delayed effective date. The APA, however, provides
exceptions from the prior notice and the public comment and the delayed
effective date requirements, when an agency for good cause finds that
such procedures are ``impracticable, unnecessary, or contrary to the
public interest.'' See 5 U.S.C. 553(b)(3)(B), (d)(3). Treasury and CBP
find that prior notice and comment are unnecessary, and that good cause
exists to issue these regulations effective on January 1, 2023. Prior
notice and comment are unnecessary, as required in 5 U.S.C.
553(b)(3)(B), because the rule does not substantively alter the
underlying rights or interests of importers or filers, but instead
corrects the regulations to clarify that the authority to administer
CBMA refund claims is being transferred from CBP to TTB on January 1,
2023, by statute. For the same reason, CBP finds that good cause exists
for dispensing with the requirement for a delayed effective date as
required in 5 U.S.C. 553(d)(3).
B. Executive Orders 13563 and 12866
Executive Orders 13563 and 12866 direct agencies to assess the
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying both costs and
benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. This interim final rule is not a ``significant regulatory
action,'' under section 3(f) of Executive Order 12866. Accordingly, the
Office of Management and Budget (OMB) has not reviewed this regulation.
C. Regulatory Flexibility Act
The Regulatory Flexibility Act (5 U.S.C. 601 et seq.), as amended
by the Small Business Regulatory Enforcement and Fairness Act of 1996,
requires an agency to prepare and make available to the public a
regulatory flexibility analysis that describes the effect of a proposed
rule on small entities (i.e., small businesses, small organizations,
and small governmental jurisdictions) when the agency is required to
publish a general notice of proposed rulemaking for a rule. Since a
general notice of proposed rulemaking is not necessary for this rule,
CBP is not required to prepare a regulatory flexibility analysis for
this rule.
D. Paperwork Reduction Act
The provisions of the Paperwork Reduction Act of 1995, 44 U.S.C.
Chapter 35, and its implementing regulations, 5 CFR part 1320, do not
apply to this final rule, because this final rule does not trigger any
new or revised recordkeeping or reporting.
E. Signing Authority
This regulation is being issued in accordance with 19 CFR 0.1(a)(1)
pertaining to the Secretary of the Treasury's authority (or that of
his/her delegate) to approve regulations related to customs revenue
functions.
Troy A. Miller, the Acting Commissioner of CBP, having reviewed and
approved this document, has delegated the authority to electronically
sign this document to Robert F. Altneu, who is the Director of the
Regulations and Disclosure Law Division for CBP, for purposes of
publication in the Federal Register.
List of Subjects
19 CFR Part 24
Accounting, Claims, Harbors, Reporting and recordkeeping
requirements, Taxes.
Amendments to the Regulations
For the reasons stated above, part 24 of Title 19 of the Code of
Federal Regulations is amended as set forth below:
PART 24--CUSTOMS FINANCIAL AND ACCOUNTING PROCEDURE
0
1. The general and specific authority citations for Part 24 are
revised to read as follows:
Authority: 5 U.S.C. 301; 19 U.S.C. 58a-58c, 66, 1202 (General
Note 3(i), Harmonized Tariff Schedule of the United States), 1505,
1520, 1624; 26 U.S.C. 4461, 4462; 31 U.S.C. 3717, 9701; Pub. L. 107-
296, 116 Stat. 2135 (6 U.S.C. 1 et seq.).
* * * * *
Section 24.36 also issued under 26 U.S.C. 5001(c)(4),
5041(c)(7), 5051(a)(6), 6423; Pub. L. 115-97; Pub. L. 116-260; 134
Stat. 3046.
* * * * *
0
2. Amend Sec. 24.36 by revising paragraph (d) introductory text, and
paragraphs (d)(10) and (e) to read as follows:
Sec. 24.36 Refunds of excessive duties, taxes, etc.
* * * * *
(d) The authority of CBP to make refunds pursuant to paragraphs
(a), (b), and (c) of this section of excessive deposits of alcohol or
tobacco taxes, as defined in section 6423(d)(1), Internal Revenue Code
of 1986, as amended (26 U.S.C. 6423(d)(1)), is confined to cases of the
types which are excepted from the application of section 6423, Internal
Revenue Code of 1986, as amended (26 U.S.C. 6423), and which are not
administered by the Department of the Treasury under section 107(e) of
Public Law 116-260, div. EE, title I (December 27, 2020). The excepted
types of cases and, therefore, the types in which CBP is authorized to
make refunds of such taxes are those in which:
* * * * *
(10) For alcohol excise taxes imposed under the Internal Revenue
Code for goods entered or withdrawn from warehouse for consumption on
or before December 31, 2022, the refund of tax is claimed pursuant to
the assignment of a reduced tax rate or tax credit to an importer by a
foreign producer in accordance with CBP implementation of sections
13801-13808 of Public Law 115-97 (December 22, 2017), as amended. For
goods entered or withdrawn from warehouse for consumption after
December 31, 2022, see the procedures provided in paragraph (e)(2) of
this section.
(e) In any instance in which a refund of an alcohol or tobacco tax
is not of a type covered by paragraph (d) of this section the following
procedures will apply:
(1) Except as provided in paragraph (e)(2), a claim for refund of
any overpayment of internal revenue tax on an entry must be filed with
the Alcohol
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and Tobacco Tax and Trade Bureau (TTB), in accordance with TTB
regulations found in Part 70 of Title 27 of the Code of Federal
Regulations.
(2) A claim for refund of alcohol excise taxes based on the
assignment of a reduced tax rate or tax credit to an importer by a
foreign good producer for goods entered or withdrawn from warehouse for
consumption on or after January 1, 2023, and submitted pursuant to 26
U.S.C. 5001(c)(4), 5041(c)(7), and 5051(a)(6), must be filed with TTB,
in accordance with TTB regulations found in Part 27, subpart P, of
Title 27 of the Code of Federal Regulations.
Robert F. Altneu,
Director, Regulations & Disclosure Law Division, Regulations & Rulings,
Office of Trade, U.S. Customs and Border Protection.
Approved:
Thomas C. West Jr.,
Deputy Assistant Secretary of the Treasury for Tax Policy.
[FR Doc. 2022-28375 Filed 12-29-22; 8:45 am]
BILLING CODE 9111-14-P
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