[Federal Register Volume 76, Number 164 (Wednesday, August 24, 2011)]
[Rules and Regulations]
[Pages 52862-52865]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-21615]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Parts 24, 25, 26, 40, 41, and 70

[Docket No. TTB-2011-0001; T.D. TTB-94; Re: T.D. TTB-89; Notice No. 
115; T.D. TTB-41; TTB Notice No. 56; T.D. ATF-365; and ATF Notice No. 
813]
RIN 1513-AB43


Time for Payment of Certain Excise Taxes, and Quarterly Excise 
Tax Payments for Small Alcohol Excise Taxpayers

AGENCY: Alcohol and Tobacco Tax and Trade Bureau, Treasury.

ACTION: Final rule; Treasury decision.

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SUMMARY: The Alcohol and Tobacco Tax and Trade Bureau (TTB) is 
adopting, as a final rule, regulations contained in a temporary rule 
pertaining to the semimonthly payments of excise tax on distilled 
spirits, wine, beer, tobacco products, and cigarette papers and tubes, 
and pertaining to the quarterly payment of alcohol excise tax by small 
taxpayers. This final rule action does not include those regulations 
contained in the temporary rule pertaining to part 19 of the TTB 
regulations, which were adopted as a final rule in a separate 
regulatory initiative.

[[Page 52863]]


DATES: Effective Date: This final rule is effective August 24, 2011.

FOR FURTHER INFORMATION CONTACT: For questions concerning tax payment 
procedures and quarterly filing procedures, contact Jackie Feinauer, 
National Revenue Center, Alcohol and Tobacco Tax and Trade Bureau (513-
684-3442). For questions concerning this document, contact Jennifer 
Berry, Regulations and Rulings Division, Alcohol and Tobacco Tax and 
Trade Bureau (540-344-9333).

SUPPLEMENTARY INFORMATION: 

Background

TTB Authority

    The Alcohol and Tobacco Tax and Trade Bureau (TTB) is responsible 
for the administration and enforcement of chapters 51 and 52 of the 
Internal Revenue Code of 1986 (IRC). These provisions of the IRC 
concern the taxation of distilled spirits, wine, beer, tobacco 
products, and cigarette papers and tubes. TTB's responsibilities 
include promulgating regulations to implement the statutory provisions 
pertaining to the time and method for payment of the applicable excise 
taxes. See 26 U.S.C. 5061 pertaining to distilled spirits, wine, and 
beer and 26 U.S.C. 5703 pertaining to tobacco products and cigarette 
papers and tubes. Prior to January 24, 2003, TTB's predecessor agency, 
the Bureau of Alcohol, Tobacco and Firearms (ATF) administered these 
statutory provisions and the regulations thereunder. The regulations 
implementing the times and methods for payment of these Federal excise 
taxes are now found in the TTB regulations at 27 CFR parts 19, 24, 25, 
26, 40, 41, and 70.

Semimonthly Reporting and Payment of Tax

    Generally, the Federal excise taxes on distilled spirits, wine, 
beer, tobacco products, and cigarette papers and tubes are paid on the 
basis of a semimonthly tax return. The semimonthly periods covered by 
the tax return are from the 1st day to the 15th day of each month and 
from the 16th day to the last day of that month. The return must be 
filed and the tax payment must be made no later than the 14th day after 
the last day of each semimonthly period.

Accelerated Payment Requirements for the Second Semimonthly Period in 
September

Uruguay Round Agreements Act

    Section 712 of the Uruguay Round Agreements Act (the URAA), Public 
Law 103-465, 108 Stat. 4809, enacted on December 8, 1994, amended 
sections 5061(d) and 5703(b)(2) of the IRC to accelerate the time for 
payment of taxes for most of the second semimonthly period of 
September. These amendments were adopted in order to ensure receipt of 
these taxes during the fiscal year to which they relate.
    The amendments made by the URAA divided the second semimonthly 
period in September into two payment periods for distilled spirits, 
wine, beer, tobacco products, and cigarette papers and tubes. The first 
of these payment periods runs from September 16 through September 26, 
and the second of these payment periods runs from September 27 through 
September 30. The tax return and payment for the period September 16 
through September 26 are due on or before September 29 except that, for 
taxpayers that are not required to pay taxes through electronic funds 
transfer (EFT), this first payment period ends on September 25 and 
taxes are due on or before September 28. The statutory amendments did 
not include an accelerated payment deadline for the second payment 
period (September 27 through 30) and therefore payment for it is due 
according to the general semimonthly payment rule (that is, on or 
before October 14).
    The amendments made by the URAA also included a ``safe harbor'' 
rule covering the first (accelerated) payment period for taxes due for 
distilled spirits, wine, beer, tobacco products, and cigarette papers 
and tubes, which permits the taxpayer to meet its obligation to pay tax 
for that payment period based on payment of a proportion (11/15ths) of 
the tax liability incurred for the period September 1 through September 
15. In addition to the above, the amendments made by the URAA added a 
special due date rule (that is, the following day) when the due date 
for the new first (accelerated) payment in September falls on a Sunday.

Temporary Rule T.D. ATF-365

    On June 28, 1995, ATF published a temporary rule (T.D. ATF-365) in 
the Federal Register at 60 FR 33665, to implement the changes to 
sections 5061 and 5703 of the IRC made by section 712 of the URAA. 
Specifically in this regard, T.D. ATF-365 amended 27 CFR parts 19, 24, 
25, 70, 250 (now part 26), 270 (now part 40), 275 (now part 41), and 
285 (now part 40), primarily by adding various provisions to those 
parts relating to reporting and tax payment for distilled spirits, 
wine, beer, tobacco products, and cigarette papers and tubes.
    In addition, T.D. ATF-365 made extensive amendments to the firearms 
and ammunition excise tax regulations in 27 CFR part 53, some of which 
were made in response to changes to the IRC by section 712 of the URAA. 
Subsequent legislation substantially changed the affected IRC 
provisions.

Quarterly Excise Tax Filing for Small Alcohol Excise Taxpayers

Safe, Accountable, Flexible, Efficient Transportation Equity Act: A 
Legacy for Users

    Section 11127 of the Safe, Accountable, Flexible, Efficient 
Transportation Equity Act: A Legacy for Users (the SAFETEA), Public Law 
109-59, 119 Stat. 1144, enacted on August 10, 2005, amended IRC section 
5061(d) by redesignating paragraphs (4) and (5) as paragraphs (5) and 
(6), respectively, and adding a new paragraph (4), which allows certain 
small Federal alcohol excise taxpayers to pay taxes quarterly rather 
than on a semimonthly basis as provided in section 5061(d) before the 
amendment. Application of this new provision commenced with quarterly 
tax payment periods beginning on and after January 1, 2006.

Temporary Rule T.D. TTB-41

    On February 2, 2006, TTB published in the Federal Register (71 FR 
5598) a temporary rule, T.D. TTB-41, that amended 27 CFR parts 19, 24, 
25, 26, and 70 to implement the new quarterly tax payment procedures of 
section 5061(d)(4) of the IRC. This temporary rule revised or otherwise 
amended regulatory texts concerning return or payment periods that had 
been adopted in T.D. ATF-365. The affected provisions were: Paragraph 
(a) of Sec.  19.522, paragraph (a) of Sec.  19.523, paragraph (b) and 
the heading of paragraph (c) of Sec.  24.271, paragraphs (c) and (d) of 
Sec.  25.164, the section heading and paragraph (a)(1) of Sec.  
25.164a, and paragraphs (b) and (d) of Sec.  250.112 (now Sec.  
26.112).

Reissuance of T.D. ATF-365 and T.D. TTB-41 as a New Temporary Rule

    When T.D. ATF-365 was published, a notice of proposed rulemaking 
was published in the same issue of the Federal Register inviting public 
comments on that temporary rule; TTB has no record of comments received 
by ATF in response to this comment solicitation, and no action was 
taken by ATF to adopt the T.D. ATF-365 temporary regulations as a final 
rule. A number of subsequent changes to the ATF/TTB regulations were 
made that affected the texts adopted in T.D. ATF-365, the most 
substantively significant of which were the changes to the

[[Page 52864]]

alcohol excise tax payment provisions made by T.D. TTB-41, which 
included some revisions of the provisions implementing the URAA section 
712 special September rule to accommodate the SAFETEA section 11127 
quarterly payment procedure. When T.D. TTB-41 was published, a notice 
of proposed rulemaking was published in the same issue of the Federal 
Register inviting public comments on that temporary rule. Only one 
comment was received in response to that comment solicitation, and that 
commenter expressed support for the rulemaking.
    In view of the fact that the regulatory amendments adopted in T.D. 
TTB-41 in part involved a revision of, and thus depended on, amendments 
previously made by T.D. ATF-365, TTB determined that it would not be 
practical to take final action on the T.D. TTB-41 regulations without 
first finalizing those earlier regulatory amendments. However, because 
of the significant period of time that had elapsed since T.D. ATF-365 
was published, and because there is no record of comments received in 
response to the notice of proposed rulemaking published in connection 
with T.D. ATF-365, TTB decided that the best approach would be to 
publish one new temporary rule that reissued the regulatory texts 
adopted in T.D. ATF-365 and in T.D. TTB-41, with necessary changes to 
the T.D. ATF-365 texts to conform them to later amendments.

Temporary Rule T.D. TTB-89 and Notice No. 115

    Accordingly, on January 20, 2011, TTB published in the Federal 
Register (76 FR 3502) a temporary rule, T.D. TTB-89, which updated and 
reissued the alcohol and tobacco regulations contained in T.D. ATF-365 
and T.D. TTB-41. We note that T.D. ATF-365 included amendments to the 
firearms and ammunition excise tax regulations. Due to the passage of 
the Firearms Excise Tax Improvement Act of 2010 on August 16, 2010, the 
part 53 regulations were not addressed in T.D. TTB-89, and will be 
addressed in a separate rulemaking document rather than in this final 
rule document. In conjunction with the publication of T.D. TTB-89, TTB 
published a notice of proposed rulemaking, Notice No. 115, in the same 
issue of the Federal Register (76 FR 3584) inviting comments on T.D. 
TTB-89. TTB received no comments during the comment period, which 
closed on March 21, 2011.
    The temporary regulations published in T.D. TTB-89 included, with 
updates, the changes to part 19 of the TTB regulations that were 
contained in T.D. ATF-365 and T.D. TTB-41. However, on February 16, 
2011, TTB published a final rule (T.D. TTB-92) in the Federal Register 
at 76 FR 9080, which completely revised the distilled spirits plant 
regulations in 27 CFR part 19 and which took effect on April 18, 2011. 
This revision of part 19 included the substance of the changes to part 
19 contained in T.D. TTB-89, with the only differences involving the 
reorganization of the regulatory sections in question and editorial 
wording changes to enhance the clarity of the texts. In view of the 
adoption of those texts in the T.D. TTB-92 final rule, it is not 
necessary to include them in this final rule action.

TTB Determination

    Accordingly, TTB has determined that, with the exception of the 
amendments to part 19, the temporary regulations published as T.D. TTB-
89 should be adopted as a final rule without change.

Regulatory Flexibility Act

    Pursuant to the requirements of the Regulatory Flexibility Act (5 
U.S.C. chapter 6), we certify that these regulations will not have a 
significant economic impact on a substantial number of small entities. 
Any revenue effects of this rulemaking on small businesses flow 
directly from the underlying statutes. Accordingly, a regulatory 
flexibility analysis is not required.

Executive Order 12866

    This is not a significant regulatory action as defined in E.O. 
12866. Therefore, it requires no regulatory assessment.

Paperwork Reduction Act

    The collections of information in the regulations contained in this 
final rule have been previously reviewed and approved by the Office of 
Management and Budget (OMB) in accordance with the Paperwork Reduction 
Act of 1995 (44 U.S.C. 3506) and assigned control numbers 1513-0009, 
1513-0053, 1513-0083, 1513-0090, and 1513-0104. An agency may not 
conduct or sponsor, and a person is not required to respond to, a 
collection of information unless it displays a valid control number 
assigned by OMB. There is no new collection of information imposed by 
this final rule.

Inapplicability of the Delayed Effective Date Requirement

    Because this final rule document implements provisions of law that 
were effective on January 1, 1995, and January 1, 2006, and the 
regulations adopted in this final rule are already in effect as 
temporary regulations, it has been determined, pursuant to 5 U.S.C. 
553(d)(3), that good cause exists to issue these regulations without a 
delayed effective date.

Drafting Information

    Kara T. Fontaine and Jennifer Berry of the Regulations and Rulings 
Division, Alcohol and Tobacco Tax and Trade Bureau, drafted this 
document.

List of Subjects

27 CFR Part 24

    Administrative practice and procedure, Claims, Electronic funds 
transfers, Excise taxes, Exports, Food additives, Fruit juices, 
Labeling, Liquors, Packaging and containers, Reporting and 
recordkeeping requirements, Research, Scientific equipment, Spices and 
flavorings, Surety bonds, Vinegar, Warehouses, Wine.

27 CFR Part 25

    Beer, Claims, Electronic funds transfers, Excise taxes, Exports, 
Labeling, Packaging and containers, Reporting and recordkeeping 
requirements, Research, Surety bonds.

27 CFR Part 26

    Alcohol and alcoholic beverages, Caribbean Basin Initiative, 
Claims, Customs duties and inspection, Electronic funds transfers, 
Excise taxes, Packaging and containers, Puerto Rico, Reporting and 
recordkeeping requirements, Surety bonds, Virgin Islands, Warehouses.

27 CFR Part 40

    Cigars and cigarettes, Claims, Electronic fund transfers, Excise 
taxes, Labeling, Packaging and containers, Reporting and recordkeeping 
requirements, Surety bonds, Tobacco.

27 CFR Part 41

    Cigars and cigarettes, Claims, Customs duties and inspection, 
Electronic funds transfers, Excise taxes, Imports, Labeling, Packaging 
and containers, Puerto Rico, Reporting and recordkeeping requirements, 
Surety bonds, Tobacco, Virgin Islands, Warehouses.

27 CFR Part 70

    Administrative practice and procedure, Claims, Excise taxes, 
Freedom of Information, Law enforcement, Penalties, Surety bonds.

[[Page 52865]]

Amendments to the Regulations

    For the reasons set forth in the preamble, those portions of the 
temporary rule published as T.D. TTB-89 in the Federal Register at 76 
FR 3502 on January 20, 2011, that amended 27 CFR parts 24, 25, 26, 40, 
41, and 70 are adopted as a final rule without change.

    Signed: June 2, 2011.
John J. Manfreda,
Administrator.
    Approved: June 21, 2011.
Timothy E. Skud,
Deputy Assistant Secretary. (Tax, Trade, and Tariff Policy).
[FR Doc. 2011-21615 Filed 8-23-11; 8:45 am]
BILLING CODE 4810-31-P