TTB Eliminates Bond Requirements for Small Entities
December 30, 2016
By Kristin Carlton, Vice President of Compliance
As of January 1, 2017, if you are a TTB-permitted entity owing less than $50,000 in excise taxes in the previous year and expect to owe less than $50,000 in the current year on beer, distilled spirits, or wine, you will no longer be required to hold a bond.
CURRENT BOND/PERMIT HOLDERS:
Existing proprietors who are eligible for the bond exemption will be able to request termination of their bonds after January 1, 2017, by amending their permits or brewer’s notices using Permits Online or the applicable paper forms. Because an existing proprietor’s eligibility for the bond exemption is based in part on the proprietor’s tax liability for the preceding calendar year, TTB cannot begin processing a bond termination request until it receives the taxpayer’s final tax payments covering any remaining liability incurred in 2016. In addition, proprietors who have not submitted other required TTB tax returns, tax payments, or reports may have their bond termination requests denied or delayed. If a proprietor has not filed required TTB reports, returns, or tax payments, TTB will not be able to verify the proprietor’s eligibility for the bond exemption.
FOR NEW APPLICANTS:
Because the bond exemption did not go into effect until January 1, 2017, if you have submitted applications to operate breweries/brewpubs, distilled spirits plants, or wineries before that date, you must submit a bond with the application even if you expect to be eligible for the bond exemption when it goes into effect in 2017. Based on current processing times, we do not expect any application received before January 1, 2017, to be processed before that date.
To streamline the application process, TTB added a new data field in the online permit application system to indicate if you expect to owe less than $50,000 in excise taxes in 2017, and thus will be exempt from bond requirements. If you are confirmed to be eligible for the bond exemption, TTB will process your application so that you can operate without a bond upon approval, and they will return any bond-related materials to you upon approval of your permit.
If you have additional questions or are interested in enlisting Compli’s assistance to file for your bond exemption request, please contact Compli at 805.239.4502 or firstname.lastname@example.org.