Keeping up with the TTB: The behind-the-scenes effort to respond to new legislation
Government agencies kissed their holiday break goodbye when President Trump signed the Tax Cuts and Jobs Act on December 22, 2017. Most of the provisions took effect just 10 days later on January 1, 2018. Taxation agencies scrambled to make sense of it all (and many still are), one being the TTB, the Alcohol and Tobacco Tax and Trade Bureau.
We’ve all been studying the same TTB-regulated tax classes for years: Are my still wines less than 14% alcohol by volume (taxed at a rate of $1.07/gallon) or between 14 and 21% (taxed at a rate of $1.57/gallon)? These new regulations have now changed the curriculum. The TTB increased the lower bracket from less than 14% to less than 16%, thus changing the upper bracket to 16-21%.
In general, higher alcohols have been favored in recent years (blame it on stylistic preference, global warming, or millenials if you will) to the detriment of winery excise tax dues. Given that most table wines range from 12% to 16% ABV, this has significant implications for most producers. For wineries that produce wines between 14-16% ABV it’s a welcomed change that will save them hundreds if not thousands of dollars a year.
In order for wineries to realize the financial gain from the lower tax rate TTB reporting needed to get buttoned up… and fast. Wineries that rely on InnoVint to maintain their wine inventories and generate their TTB 5120.17 reports turned to us for answers. We didn’t want to jump the gun and deliver an updated form before the TTB had done so. We patiently waited them to make their move first. January quickly turned into February, and as the first reporting deadline of 2018 (February 15th) crept closer and closer we were all holding our breath for the changes. Finally, on February 9th, the TTB released the updated 5120.17 form and we jumped to action. We highlighted pertinent sections throughout InnoVint and provided thorough instructions to assist with the re-assignment of tax classes.
We understand that maintaining compliant records can sometimes provoke…. strong feelings. We get it: the 5120.17 isn’t everyone’s best friend. Wineries are always on a deadline and when things come down to the wire it can be difficult to pull everything together when your focus has been on winemaking. This is one of many reasons why production software is such a crucial tool for wineries of all sizes. You should be able to trust your software provider to stay up to date with regulatory changes and take action immediately when needed.
At InnoVint we take great pride in our reputation as a reliable, dedicated service provider. The TTB regulatory changes are just one example of our fast response times and our commitment to excellence.
Learn more about how we’re benefitting production operations at www.innovint.us.