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Earlier This Year, Feds Announced A Suspension Of Excise Tax Payments For Beverage Alcohol Importers & Domestic Suppliers; However, While TTB Extends Relief To All Domestic Suppliers, CBP Requires U.S. Importers – Like NY’s Labatt, Constellation, As Well As Heineken, Anheuser Busch, And Mom And Pop Wine Shops – To Jump Through More Hoops To Get Same Relief

Senator Says NY Importers Should Not Be Left Behind During Recovery & Deserve Same Treatment As Domestic Producers

Schumer To Feds: Don’t Let NY’s Beer, Wine, And Distilled Spirits Importers Go Bottoms Up – Level Playing Field Now & Provide Equal Tax Relief For Our Importers

U.S. Senator Charles E. Schumer today urged the United States Department of the Treasury (Treasury) and Customs and Border Protection (CBP) to revise their existing guidance that unfairly put many New York beverage alcohol importers at a significant disadvantage and delay payments for federal excise taxes on imported beer, wine, and distilled spirits in a manner that matches the deferral granted for domestically-produced beverage alcohol by the Alcohol and Tobacco Tax and Trade Bureau (TTB).

“As Upstate New York reopens and begins to carefully rebuild from the pandemic, the federal government should do everything in its power to brew up additional relief for New York beer and wine importers, distributors, and mom and pop shops that pour jobs into their communities and are essential to the fabric of New York,” said Senator Schumer. “Many of New York’s beer, wine and distilled spirits importers are hurting from the pandemic and I urge the Treasury Department and CBP to immediately level the playing field, extend equal treatment to beverage alcoholic importers and make it easier for New York businesses to tap into federal resources and stay afloat during the ongoing crisis.”

Considering the severe economic consequences of the coronavirus (COVID-19) pandemic. Schumer explained, earlier this spring both the TTB and CBP announced a 90-day deferral of excise tax payments for domestic and imported beer, wine, and distilled spirits.  However, the temporary tax relief provided to importers by CBP is much narrower in scope and duration than the relief provided to domestic producers by TTB and negatively impacts large New York companies like Labatt, Constellation, Anheuser-Busch, and Heineken, as well as smaller wine shops and distributors across the state.

First, the duration of tax relief provided by CBP to importers for products imported in March and April is more limited than the three-month deferral offered to domestic producers by TTB. CBP also requires importers take an additional step of demonstrating “significant financial hardship,” or proving they have suffered more than a 40 percent loss of revenue, in order to qualify for the relief. In contrast, TTB does not impose any showing of “financial hardship” requirement, thus extending relief to all domestic suppliers.

Given the limitations of CBP’s excise tax deferral, New York’s beverage alcohol importers do not have access to the same critical relief as their domestic producer counterparts. Schumer says that aligning CBP’s tax relief with that of TTB would also help ease the financial burden on New York’s smaller distributors, local restaurants, and “mom and pop” shops who rely on these imports and are already struggling to survive the adverse economic effects of COVID-19.

Senator Schumer was joined in his call by FIFCO USA (Labatt USA), Constellation Brands, Inc., Heineken, and Anheuser Busch for additional relief for U.S. beverage alcohol importers.

“We appreciate Senator Schumer’s efforts to defer the federal excise tax for U.S. importers like Labatt USA, which is based in Buffalo, New York. Our employees live here. Our business takes place here and we contribute to the economy and community here. Any temporary tax relief helps continuation of investments to build the business, while improving the trajectory of Labatt USA and our other businesses, which together employ 600-plus people in Buffalo and Rochester combined,” said Rich Andrews, Chief Executive Officer, FIFCO USA (parent-company to Labatt USA).

“Constellation Brands, a leading total beverage alcohol company, founded in the U.S. and headquartered in Upstate, is proud to employ thousands of people throughout the U.S. and work with our many partners in agriculture, wholesale, retail, and others – from barley to barstool – to support our economy during the COVID-19 pandemic. Equal treatment of FET deferrals for U.S. importers and U.S. producers in the beverage alcohol industry is essential for businesses like ours and provides us with the liquidity needed to support the industry, our employees and our consumers during these extraordinary times,” said Matt Stanton, SVP Public Affairs, Constellation Brands, Inc.

“Some importers that we work with have recently closed because of hardship with the Tariff and COVID-19 situation. We have also seen the financial hardship that COVID-19 has caused our customers. Limiting their access to quality affordable products hurts the American consumer and hurts our American business,” said Melissa Winkler, Owner and Sommelier at Winkler & Samuels in Buffalo. “The tariffs on European wines put American wine importers and shops at a disadvantage. These products are sold at price points that enable us to be successful and thereby support domestic wineries. Our success allows us to employ people, generate sales tax revenue, and contribute philanthropically to our community. I wholly support this effort to ensure we’re operating on a level playing field.”  

Schumer urged Treasury to work with CBP and align the agency’s excise tax payment deferral more closely with that of TTB. Schumer says that in order for an excise tax delay to truly provide economic relief for struggling New York importers and businesses who rely on those imports, a policy closer to TTB’s is necessary.

Schumer’s letter to United States Department of the Treasury Secretary Mnuchin can be found below:

Dear Secretary Mnuchin: 

I write to respectfully request that payments for excise taxes on imported beer, wine, and distilled spirits be delayed for 90-days in the same manner as has been extended for domestically-produced beverage alcohol, providing essential relief for U.S. businesses facing adverse economic consequences of the COVID-19 crisis.

New York beverage alcohol importers – as well as smaller distributors, restaurants, and “mom and pop” shops across the state that rely on these imports – have suffered significantly as a result of this pandemic. While I appreciate the action from Customs and Border Protection (CBP) to temporarily suspend the payment of excise taxes for importers, the scope and limitations of this payment deferral does not provide relief that is sufficient or equal to that provided for domestic suppliers through the Alcohol and Tobacco Tax and Trade Bureau (TTB).

On April 19, the Department of the Treasury (Treasury) and CBP announced a 90-day suspension of taxes, duties, and fees for certain beverage alcohol importers. While TTB similarly issued a 90-day deferral of all unpaid taxes due for domestic suppliers between March 1 and July 1, CBP only granted a deferral for merchandise imported in March and April.

CBP also requires importers to demonstrate “significant financial hardship” in order to qualify for the tax deferral, which the agency narrowly defines as a decrease in gross receipts of at least 40 percent compared to the same period in 2019. However, TTB does not require companies to show financial hardship to benefit from the deferral, instead extending this relief to all domestic suppliers. To remedy the discrepancy in treatment, I urge Treasury to work with CBP to amend the scope of the agency’s payment deferral to align more closely with that of TTB and provide parity between U.S. importers and domestic suppliers.

U.S.-based importers of beer, wine, and spirits – just like domestic producers – support a robust U.S. workforce, stimulate economic growth, and invest in their local communities in New York and across the country. I therefore hope that the Department of the Treasury and CBP will expeditiously provide beverage alcohol importers the same relief available to domestic producers and ensure these U.S companies are not unfairly left behind during this crisis.

Thank you for your attention to this important matter, and I look forward to your reply.