American ShipperTrade and Compliance

Alcohol tax refund claim processes outlined

A KPMG webinar described how importers should file post-summary corrections and/or protests to claim refunds under the Craft Beverage Modernization and Tax Reform Act.

   U.S. importers of alcoholic beverages seeking refunds in line with the Craft Beverage Modernization and Tax Reform Act (CBMA) are advised to prepare narratives for their post-summary corrections (PSCs) that explain why they are pursuing the compensation, said George Zaharatos, a principal in KPMG’s Trade and Customs practice.
   “Because this is new for Customs as well, being able to provide them information that includes the attachments that are required, just describing what importers are looking for in terms of the refund and why, is … something that we’re seeing that’s important,” he said during a KPMG webinar Wednesday. “So when companies are looking to submit those protests or post-summary corrections and request a refund, preparing a narrative that explains why will help Customs at the port level who are not familiar with this, to … help move it along.”
   Enacted in 2017 as part of sweeping tax reform legislation, CBMA set lower excise tax rates on alcoholic beverage imports for 2018 and 2019.
   U.S. Customs and Border Protection released guidance in the last several months of 2018 directing how importers might claim the lower rates, including processes to seek reimbursement for 2018 claims processed at pre-CBMA rates prior to the issuance of the guidance.
   For unliquidated entries, refunds can be requested through PSCs that are marked with the CBMA flag and the CBMA rate and that are submitted to CBP with three substantiating documents — the CBMA spreadsheet, controlled group spreadsheet and assignment certification — according to Oct. 16 CBP guidance.
   For 2018 entries that have liquidated at pre-CBMA rates, importers seeking the CBMA rate can file a protest with CBP and should identify “CBMA” in the protest issue dropdown, that guidance said.
   It has been difficult for many importers to work through the technical considerations of the new CBMA process, as operational guidance wasn’t issued until the last quarter of 2018, and it involves coordination between importers, producers and customs officials, Florence Lam, a senior manager in KPMG’s Trade and Customs practice, said during the webinar.
   Perhaps further complicating those issues is an ongoing government shutdown, which hit its 34th day Thursday.
   An analysis by Husch Blackwell law firm on the shutdown’s impact on trade agencies states that Customs isn’t processing refunds on any type of normal entry.

Brian Bradley

Based in Washington, D.C., Brian covers international trade policy for American Shipper and FreightWaves. In the past, he covered nuclear defense, environmental cleanup, crime, sports, and trade at various industry and local publications.