02/23/2015 – TTB Issues New Guidance on Annual Filing Requirements for Wineries

This week, the TTB clarified the criteria for filing the Excise Tax return and the Report of Wine Premises Operations on an annual frequency. Read about it HERE

To qualify for annual excise tax filing frequency (as opposed to quarterly or semi-monthly), a winery must have owed less than $1000 in federal excise taxes in the previous calendar year.

So how many cases of wine is this? It depends, but to translate this roughly into case quantities for a small winery:

2474- 9L cases of still wine less than 14% alcohol by volume (tax class 1) OR
628- 9L cases of still wine at 14%-21% alcohol by volume (tax class 2)

Keep in mind, this calculation factors in the full small producer tax credit. If the winery is not eligible for the tax credit, or if sparkling wine is also taxably removed, that $1000 threshold will be reached more quickly. (Sparkling wine is not eligible for the small producer tax credit, and is taxed at a higher rate than still wine). Click HERE to review the TTB excise tax rates.

If your last TTB excise tax payment hit or exceeded $1000, then your winery's future tax returns must be filed on a quarterly filing frequency. Furthermore, the TTB instructs that if the winery is on a quarterly filing frequency for its excise tax returns, it must also file its Reports of Wine Premises Operations (also known as "702s" in the industry) on a quarterly basis as well.  This reporting clarification impacts wineries who don't come near the storage capacity thresholds for quarterly reporting, but who may produce sparkling wine or taxably remove their wines at the time of bottling.  

Confused?  Contact Lea Fainer at Fainer Consulting for guidance specific to your winery operation. If you prefer filing annual reports and returns, there are strategies you can take that could help you stay under the $1000 annual tax liability threshold.