[Federal Register Volume 87, Number 250 (Friday, December 30, 2022)]
[Rules and Regulations]
[Pages 80442-80444]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-28375]



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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection

DEPARTMENT OF THE TREASURY

19 CFR Parts 24

[CBP Dec. 22-26; Docket No. USCBP-2018-0033]
RIN 1515-AE39


Refund of Alcohol Excise Tax

AGENCY: U.S. Customs and Border Protection, Department of Homeland 
Security; Department of the Treasury.

ACTION: Interim final rule; request for comments.

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SUMMARY: This document amends U.S. Customs and Border Protection 
regulations to implement certain changes made by the Taxpayer Certainty 
and Disaster Tax Relief Act of 2020, which amended the Craft Beverage 
Modernization Act provisions of the Tax Cuts and Jobs Act of 2017. 
Pursuant to these changes, the responsibility for administering 
refunds, reduced tax rates, and tax credits on imported alcohol is 
moving from U.S. Customs and Border Protection (CBP) to the U.S. 
Department of the Treasury, effective January 1, 2023.

DATES: This interim final rule is effective January 1, 2023; comments 
must be received by March 2, 2023.

ADDRESSES: You may submit comments, identified by docket number Docket 
No. USCBP-2018-0033, by one of the following methods:
     Federal Rulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Due to COVID-19-related restrictions, CBP has 
temporarily suspended its ability to receive public comments by mail.
    Instructions: All submissions received must include the agency name 
and docket number for this rulemaking. All comments received will be 
posted without change to http://www.regulations.gov, including any 
personal information provided. For detailed instructions on submitting 
comments and additional information on the rulemaking process, see the 
`Public Participation' heading of the SUPPLEMENTARY INFORMATION section 
of this document.
    Docket: For access to the docket to read background documents or 
comments received, go to http://www.regulations.gov. Due to the 
relevant COVID-19-related restrictions, CBP has temporarily suspended 
on-site public inspection of the public comments.

FOR FURTHER INFORMATION CONTACT: Kellee Gross, Branch Chief, Trade 
Processes Branch, Office of Trade, 202-815-1699, 
[email protected].

SUPPLEMENTARY INFORMATION: 

I. Public Participation

    Interested persons are invited to participate in this rulemaking by 
submitting written data, views or arguments on all aspects of the 
interim rule. See ADDRESSES above for information on how to submit 
comments. U.S. Customs and Border Protection (CBP) also invites 
comments that relate to the effects that might result from this interim 
rule. Comments that will provide the most assistance to CBP will 
reference a specific portion of the interim rule, explain the reason 
for any recommended change, and include data, information, or authority 
that supports such recommended change.

II. Background

    Sections 13801-13808 of the Tax Cuts and Jobs Act of 2017 (Pub. L. 
115-97), signed December 22, 2017, commonly referred to as the Craft 
Beverage Modernization Act (CBMA), amended the Internal Revenue Code 
for two calendar years with respect to the tax treatment of alcoholic 
beverages, including beer, wine, and distilled spirits. The CBMA 
authorized reduced tax rates and tax credits for alcoholic beverages. 
On August 16, 2018, CBP published an interim final rule, CBP Dec. 18-
09, in the Federal Register (83 FR 40675), updating the language of 
title 19 of the Code of Federal Regulations (CFR) to implement the CBMA 
and make other technical changes to 19 CFR part 24. Specifically, the 
interim final rule amended 19 CFR 24.36 to encompass CBP's authority to 
refund the difference between the full excise tax rate paid by an 
importer to CBP at the time of entry summary filing and the CBMA's 
lower effective tax rate. CBP solicited comments on this interim final 
rule. No comments were received. On December 19, 2019, the Further 
Consolidated Appropriations Act was signed, which extended the relevant 
provisions of the CBMA through calendar year 2020. See Public Law 116-
94.
    On December 27, 2020, the Taxpayer Certainty and Disaster Tax 
Relief Act of 2020 (Tax Relief Act) was enacted. See Public Law 116-
260, Division EE, sections 106-110. The Tax Relief Act amended and made 
permanent the CBMA. Section 107(e) of the Tax Relief Act directed that 
the Secretary of the Treasury (or the Secretary's delegate within the 
Department of the Treasury (Treasury)) shall implement and administer 
the new statutory provisions in coordination with CBP. In June 2021, 
Treasury informed Congress that it intended to delegate administration 
of the CBMA import refund program, formerly administered by CBP under 
19 CFR 24.36(d)(10), to the Alcohol and Tobacco Tax and Trade Bureau 
(TTB) in the ``Report to Congress on Administration of Craft Beverage 
Modernization Act Refund Claims for Imported Alcohol.'' \1\ The 
authority subsequently was delegated to TTB.
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    \1\ ``Report to Congress on Administration of Craft Beverage 
Modernization Act Refund Claims for Imported Alcohol,'' June 2021, 
available at https://www.ttb.gov/images/pdfs/treasury-cbma-import-claims-report-june-2021.pdf.
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    On September 23, 2022, TTB published a temporary rule in the 
Federal Register (87 FR 58021) to implement regulations for the 
administration of the CBMA. Concurrent with the temporary rule, TTB 
published a Notice of Proposed Rulemaking in the Federal Register (87 
FR 58043) proposing to make the temporary regulations final and 
soliciting comments.
    Likewise, CBP is publishing this interim final rule to update the 
regulations issued in CBP Dec. 18-09 to reflect the transfer of 
authority for administration of the CBMA import refund program to TTB 
beginning on January 1, 2023, and to direct the public to the relevant 
TTB regulations regarding refunds administered by TTB. CBP is accepting 
comments on these changes to the regulations.

III. Discussion of Changes to Sec.  24.36

    Section 24.36 deals with refunds of excessive duties, taxes, fees, 
or interest. CBP is amending the introductory text to paragraph (d) to 
clarify the basis for TTB's authority to administer refunds arising 
under the CBMA beginning on January 1, 2023. CBP is amending paragraph 
(d)(10) to state that it applies to goods entered or withdrawn from 
warehouse on or before December 31, 2022, because after that date TTB 
will handle the refunds covered by the paragraph. CBP is also amending 
paragraph (d)(10) to reflect that the statutory authorities, giving CBP 
the authority to administer claims pertaining to these goods entered or 
withdrawn from warehouse on or before December 31, 2022, reauthorized 
the CBMA twice.\2\ CBP is also amending

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paragraph (e) by removing the entirety of the existing paragraph and 
replacing it with revised paragraphs (e)(1) and (e)(2) to clearly 
direct the public to the relevant TTB regulations. Paragraph (e)(1) 
directs the public to the TTB regulations governing refunds for 
overpayment of alcohol and tobacco excise taxes. Paragraph (e)(2) 
directs the public to the TTB regulations governing refunds for alcohol 
excise taxes on or after January 1, 2023, based on assignment of a 
reduced tax rate or tax credits to an importer by a foreign producer. 
The refunds described in paragraph (e) are administered by TTB.
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    \2\ The Further Consolidated Appropriations Act, Public Law 116-
94 (December 20, 2019), reauthorized the CBMA for 2020. The Taxpayer 
Certainty and Disaster Tax Relief Act of 2020, Public Law 116-260 
(December 27, 2020), made the CBMA permanent and gave CBP the 
authority to administer CBMA claims through December 31, 2022.
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IV. Statutory and Regulatory Requirements

A. Inapplicability of Notice and Delayed Effective Date

    The Administrative Procedure Act (APA) requirements in 5 U.S.C. 553 
govern agency rulemaking procedures. Section 553(b) of the APA 
generally requires notice and public comment before issuance of a final 
rule. In addition, section 553(d) of the APA requires that a final rule 
have a 30-day delayed effective date. The APA, however, provides 
exceptions from the prior notice and the public comment and the delayed 
effective date requirements, when an agency for good cause finds that 
such procedures are ``impracticable, unnecessary, or contrary to the 
public interest.'' See 5 U.S.C. 553(b)(3)(B), (d)(3). Treasury and CBP 
find that prior notice and comment are unnecessary, and that good cause 
exists to issue these regulations effective on January 1, 2023. Prior 
notice and comment are unnecessary, as required in 5 U.S.C. 
553(b)(3)(B), because the rule does not substantively alter the 
underlying rights or interests of importers or filers, but instead 
corrects the regulations to clarify that the authority to administer 
CBMA refund claims is being transferred from CBP to TTB on January 1, 
2023, by statute. For the same reason, CBP finds that good cause exists 
for dispensing with the requirement for a delayed effective date as 
required in 5 U.S.C. 553(d)(3).

B. Executive Orders 13563 and 12866

    Executive Orders 13563 and 12866 direct agencies to assess the 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This interim final rule is not a ``significant regulatory 
action,'' under section 3(f) of Executive Order 12866. Accordingly, the 
Office of Management and Budget (OMB) has not reviewed this regulation.

C. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.), as amended 
by the Small Business Regulatory Enforcement and Fairness Act of 1996, 
requires an agency to prepare and make available to the public a 
regulatory flexibility analysis that describes the effect of a proposed 
rule on small entities (i.e., small businesses, small organizations, 
and small governmental jurisdictions) when the agency is required to 
publish a general notice of proposed rulemaking for a rule. Since a 
general notice of proposed rulemaking is not necessary for this rule, 
CBP is not required to prepare a regulatory flexibility analysis for 
this rule.

D. Paperwork Reduction Act

    The provisions of the Paperwork Reduction Act of 1995, 44 U.S.C. 
Chapter 35, and its implementing regulations, 5 CFR part 1320, do not 
apply to this final rule, because this final rule does not trigger any 
new or revised recordkeeping or reporting.

E. Signing Authority

    This regulation is being issued in accordance with 19 CFR 0.1(a)(1) 
pertaining to the Secretary of the Treasury's authority (or that of 
his/her delegate) to approve regulations related to customs revenue 
functions.
    Troy A. Miller, the Acting Commissioner of CBP, having reviewed and 
approved this document, has delegated the authority to electronically 
sign this document to Robert F. Altneu, who is the Director of the 
Regulations and Disclosure Law Division for CBP, for purposes of 
publication in the Federal Register.

List of Subjects

19 CFR Part 24

    Accounting, Claims, Harbors, Reporting and recordkeeping 
requirements, Taxes.

Amendments to the Regulations

    For the reasons stated above, part 24 of Title 19 of the Code of 
Federal Regulations is amended as set forth below:

PART 24--CUSTOMS FINANCIAL AND ACCOUNTING PROCEDURE

0
 1. The general and specific authority citations for Part 24 are 
revised to read as follows:

    Authority: 5 U.S.C. 301; 19 U.S.C. 58a-58c, 66, 1202 (General 
Note 3(i), Harmonized Tariff Schedule of the United States), 1505, 
1520, 1624; 26 U.S.C. 4461, 4462; 31 U.S.C. 3717, 9701; Pub. L. 107-
296, 116 Stat. 2135 (6 U.S.C. 1 et seq.).
* * * * *
     Section 24.36 also issued under 26 U.S.C. 5001(c)(4), 
5041(c)(7), 5051(a)(6), 6423; Pub. L. 115-97; Pub. L. 116-260; 134 
Stat. 3046.
* * * * *

0
2. Amend Sec.  24.36 by revising paragraph (d) introductory text, and 
paragraphs (d)(10) and (e) to read as follows:


Sec.  24.36  Refunds of excessive duties, taxes, etc.

* * * * *
    (d) The authority of CBP to make refunds pursuant to paragraphs 
(a), (b), and (c) of this section of excessive deposits of alcohol or 
tobacco taxes, as defined in section 6423(d)(1), Internal Revenue Code 
of 1986, as amended (26 U.S.C. 6423(d)(1)), is confined to cases of the 
types which are excepted from the application of section 6423, Internal 
Revenue Code of 1986, as amended (26 U.S.C. 6423), and which are not 
administered by the Department of the Treasury under section 107(e) of 
Public Law 116-260, div. EE, title I (December 27, 2020). The excepted 
types of cases and, therefore, the types in which CBP is authorized to 
make refunds of such taxes are those in which:
* * * * *
    (10) For alcohol excise taxes imposed under the Internal Revenue 
Code for goods entered or withdrawn from warehouse for consumption on 
or before December 31, 2022, the refund of tax is claimed pursuant to 
the assignment of a reduced tax rate or tax credit to an importer by a 
foreign producer in accordance with CBP implementation of sections 
13801-13808 of Public Law 115-97 (December 22, 2017), as amended. For 
goods entered or withdrawn from warehouse for consumption after 
December 31, 2022, see the procedures provided in paragraph (e)(2) of 
this section.
    (e) In any instance in which a refund of an alcohol or tobacco tax 
is not of a type covered by paragraph (d) of this section the following 
procedures will apply:
    (1) Except as provided in paragraph (e)(2), a claim for refund of 
any overpayment of internal revenue tax on an entry must be filed with 
the Alcohol

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and Tobacco Tax and Trade Bureau (TTB), in accordance with TTB 
regulations found in Part 70 of Title 27 of the Code of Federal 
Regulations.
    (2) A claim for refund of alcohol excise taxes based on the 
assignment of a reduced tax rate or tax credit to an importer by a 
foreign good producer for goods entered or withdrawn from warehouse for 
consumption on or after January 1, 2023, and submitted pursuant to 26 
U.S.C. 5001(c)(4), 5041(c)(7), and 5051(a)(6), must be filed with TTB, 
in accordance with TTB regulations found in Part 27, subpart P, of 
Title 27 of the Code of Federal Regulations.

Robert F. Altneu,
Director, Regulations & Disclosure Law Division, Regulations & Rulings, 
Office of Trade, U.S. Customs and Border Protection.

    Approved:

Thomas C. West Jr.,
Deputy Assistant Secretary of the Treasury for Tax Policy.
[FR Doc. 2022-28375 Filed 12-29-22; 8:45 am]
BILLING CODE 9111-14-P