As we wrote about earlier this month, the Tax Cuts and Jobs Act (H.R. 1) passed late last year included significant, temporary federal excise tax relief for wine, beer and spirits businesses for 2018 and 2019.  Unfortunately, in an apparent oversight of legislative drafting, the wine excise tax relief (provided in the form of a tax credit) was drafted in such a way that custom-crush facilities and bonded wine cellars were not eligible to receive the credit.

The Alcohol Tax and Trade Bureau earlier this year implemented an alternate procedure to allow affected wineries to make on-paper transfers of wine that effectively corrected the oversight and allowed such wineries to claim the credit.  The alternate procedure was set to expire on June 30th, but the Alcohol Tax and Trade Bureau recently extended that expiration date to the end of 2019, to cover the remainder of the temporary excise tax reduction period.  Wine Spectator has been following this issue closely — see here and here.  As efforts continue to make the two-year tax reductions permanent, wineries should watch to see how Congress addresses the availability of the credit.

If you have questions about tax law changes impacting the beverage industry, please contact one of the attorneys listed below:

Dustin Swanson at 503.294.9262 or dustin.swanson@stoel.com

Todd Friedman at 503.294.9327 or todd.friedman@stoel.com