TTB Brewers Bond Requirement Set to Change
For those familiar with the Alcohol and Tobacco Tax and Trade Bureau ("TTB") brewery application process, a brewers bond is one of the many pieces of information required to obtain a permit. Effective January 1, 2017, not all applicants (and some existing breweries) will be required to obtain a bond.
27 CFR 25.91 requires every person "intending to commence the business of a brewer" to file a bond. In fact, "a person may not begin business or continue business as a brewer until first receiving notice that the appropriate TTB officer has approved the bond. . ." On December 18, 2015, the President signed the PATH Act into law, which, among other things, removes bond requirements for certain eligible taxpayers. Thankfully, brewers are among the eligible taxpayers!
After January 1, 2017, an applicant who expects to owe less than $50,000 in excise taxes in the current year will no longer be required to hold a bond. Existing breweries who expect to owe less than $50,000 in excise taxes in 2017 may be able to request termination of their bonds. However, an existing brewery must have owed (and paid) less than $50,000 in excise taxes in 2016 AND "reasonably expect" the same in 2017 to be eligible.
This exemption may seem insignificant, but any change that makes the TTB application process less onerous is positive. The TTB's Public Guidance 2016-4 on the bond exemption can be found here.
Contact OBC with any questions.