The TTB has issued some initial guidance on how the new federal wine excise tax credits will work as implemented by the Tax Cuts and Jobs Act late last month.
First and foremost, it is clear that the tax rates are for the calendar years 2018 and 2019. All 2017 excise tax filing needs to be completed under the old tax rates. Wineries that file excise tax returns for 2018 excise taxes are eligible to take the new tax credits. Once again, the new credits are:
- $1 credit for gallons 0-30,000
- $0.90 credit for gallons 30,001-130,000
- $0.535 credit for gallons 130.001-750,000
- Full tax rate for anything over 750,000
Additionally, the alcohol content threshold for table wine has been increased from 7-14% alcohol by volume to 7-16% alcohol by volume. This is for tax purposes only and the alcohol content tolerances for labeling remain unchanged. The tax credits may be applied to sparkling wine.
WineAmerica has created a tool that will allow you to calculate what your tax savings are (for table wine only) and that can be accessed here: Calculate Your Federal Excise Tax Rates.
For more information on the new excise tax credits, please visit the TTB’s website: https://www.ttb.gov/alcohol/craft-beverage-modernization-and-tax-reform.shtml