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16 Wines&Vines March 2016 wine industry news W ashington, D.C.—Everyone in the wine industry knows that any business involved with al- cohol is heavily regulated at the state and federal levels. On Dec. 18, 2015, that regulatory weight got a little bit lighter for approximately 80% of the wineries across the country. That was the day U.S. president Barack Obama signed the Consolidated Ap- propriations Act (also known as the Fiscal Year 2016 Omnibus Appropriations Bill) into law. Unbeknownst to most wineries, one section of the law, the Protecting Americans from Tax Hikes Act of 2015 (a.k.a. "the PATH Act") included changes to excise tax due dates, bond requirements and the definition of wine eligible for the "hard cider" tax rate. Wineries should note, however, that these changes will not take effect until January 2017. Changes in excise tax due dates According to an announcement issued by the Alcohol and Tobacco Tax and Trade Bureau (TTB) on Jan. 14, "Section 332 of the PATH Act changes the excise tax due dates and eliminates bond requirements for certain eli- gible taxpayers." The announcement contin- ued, "Taxpayers who reasonably expect to be liable for not more than $1,000 in taxes im- posed with respect to distilled spirits, wines and beer for the calendar year (and who were liable for not more than $1,000 in such taxes in the preceding calendar year) can pay those taxes annually rather than quarterly." Under present regulations, wineries that expect to owe up to $50,000 per year in fed- eral excise taxes have to file and pay those taxes on a monthly basis. Under the new law, those wineries will be permitted to pay their taxes on a quarterly basis. According to Mi- chael Kaiser, director of public affairs at WineAmerica, "The new law allows for those wineries to now file and pay their taxes on a quarterly basis, rather than by month. Addi- tionally, those producers liable for not more than $1,000 per year may pay taxes annually, rather than quarterly." In order to determine the size winery that pays less than $1,000 in excise taxes or up to $50,000 in taxes under current regulations, one must look at the formulas employed by TTB. A winery holding a TTB basic winery permit and producing up to up to 100,000 gallons may qualify for the small producers tax credit, which reduces the excise tax rate from $1.07 to 17 cents for wine with less than 14% alcohol. Thomas K. Hogue, who is responsible for answering questions addressed to the TTB, told Wines & Vines, "If a winery produced wine and removed 150,000 wine gallons, the first 100,000 would be at the reduced rate of 17 cents (or $17,000), and the remaining 50,000 wine gallons would incur the full rate of $1.07 (or $53,500). If a winery produces 150,000 to 250,000 gallons per calendar year, a sliding scale is used to determine the credit based on production and applied on the first 100,000 wine gallons removed. The credit is reduced by 1% for every 1,000 gallons produced in excess of 150,000 (i.e., the more wine made, the smaller the credit). If a winery produces TOP STORY Are You Sure You Need a Wine Bond? QST offers its clients……. Professionally fabricated stainless tanks 35 years of tank fabrication experience Performance & reliability guarantees Custom designs & modern features Quick & competitive tank project pricing On site tank repairs & modifications Special application tanks of all sizes "In stock tanks" from 500 to 10,000 gallons 510 Caletti Ave. Windsor, Ca. 95492 Phone 707-837-2721 or Toll-Free 877-598-0672 www.qualitystainless.com Company Website winetanks@aol.com email contact/sales info Custom Fabricated Tanks for the perfect size & fit… or Ready to Ship "Stock Tanks" Either way QST is ready to assist our clients! Call QST today for information or pricing! QUALITY STAINLESS TANKS