CBP Begins Accepting Alcohol Excise Tax Refund Claims After Lengthy Wait

PALM SPRINGS, Calif. -- CBP is now at the point where importers can finally make claims for excise tax refunds under the Craft Beverage Modernization and Tax Reform Act, said John Leonard, CBP executive director-trade policy and programs, on Oct. 19 at the Western Cargo Conference. A CSMS message sent by the agency on Oct. 16 had detailed instructions for submitting additional documentation in the Document Image System (DIS) to support claims (see 1810150010).

That importers are only able to make claims eight or nine months after the law took effect is due to several complexities CBP had to overcome. First, the law covered a lot of territory that CBP does not regulate or have authority over, like foreign producers that must allocate credits to importers. Second, CBP had to put together joint requirements with the Alcohol and Tobacco Tax and Trade Bureau, which took “some time,” Leonard said. Third, the agency had to make changes to its own regulations under 19 CFR 24.36 to allow it to make refunds. Those changes took effect Aug. 16 (see 1808150030).

CBP was also reluctant to dedicate ACE programming dollars to enable excise tax refunds, Leonard said. The law sunsets on Dec. 31, 2019, and there’s still uncertainty over what will happen on that date. “It very well might be carried forward, but it may not have the exact same requirements,” he said.

As described in the CSMS message, there are three components to a complete refund claim: a spreadsheet, a control group spreadsheet, and an assignment certification for the foreign producer. All can be submitted in DIS with the entry. A post-summary correction should be submitted for entries that have already been filed and not yet liquidated, with the same three documents as required for a regular entry. Protests may be filed for entries that have already been liquidated, but “that’s obviously the least attractive solution,” Leonard said. Under CBP’s normal 314-day liquidation clock, entries of eligible products should begin liquidating -- and requiring a protest instead of a PSC -- around Nov. 12 (i.e., for an entry filed Jan. 2).

CBP will begin processing refund requests at the beginning of January 2019. CBP will process them in chronological order, beginning with the oldest eligible entries, those filed in January, first, Leonard said.