Insight

Excise tax news

Stay informed on excise tax-related news with our KPMG TaxNewsFlash archive

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Taylor Cortright

Managing Director, Excise Tax Practice, KPMG US

+1 202-533-6188

Alcohol and Tobacco

TTB release: Craft beverage measures effective January 2021: The U.S. Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau (TTB) today issued a release about the temporary reduced tax rates and tax credits originally made available by the Craft Beverage Modernization Act (CBMA) provisions of the 2017 tax law (Pub. L. No. 115-97), the law that is commonly referred to as the “Tax Cuts and Jobs Act” (TCJA), that are now permanent.
TTB announcement: Permanent reduction of excise tax rates for beer and spirits, tax credits for wine: The U.S. Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau (TTB) issued a release noting that the temporary reduced tax rates and tax credits originally made available by the Craft Beverage Modernization Act (CBMA) provisions of the 2017 tax law (Pub. L. No. 115-97), the law that is commonly referred to as the “Tax Cuts and Jobs Act” (TCJA), are now permanent.
TTB guidance, extended tax-free withdrawal of distilled spirits for hand sanitizers (COVID-19): The U.S. Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau (TTB) today extended the tax-free withdrawal of distilled spirits and products containing distilled spirits for hand sanitizer purposes through June 30, 2021, in response to the coronavirus (COVID-19) pandemic.
TTB reminder: Due date for tax returns, payments for alcohol industry annual filers: The U.S. Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau (TTB) today issued a reminder to alcohol industry members (those that file annually) of the approaching due dates for filing their annual excise tax returns and paying the related tax.
TTB reminder: Alcohol industry, third quarter excise tax returns due October 14: The U.S. Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau (TTB) issued a reminder to alcohol industry members filing quarterly excise tax returns that the due date for the third quarter of 2020 is Wednesday, October 14, 2020.
TTB resources: Distilled spirits plant, resources for determining excise tax owed: The U.S. Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau (TTB) today issued a reminder for distilled spirits plant (DSP) proprietors of the requirement to determine taxes owed on spirits removed from their bonded premises. To do this, DSP proprietors need to “gauge” the spirits—that is, determine the quantity and proof.

TTB release: FAQs on destruction of beer, recovery of taxes paid (COVID-19) : The U.S. Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau (TTB) issued a release that includes a set of “frequently asked questions” (FAQs) regarding the destruction of un-merchantable beer and recovery of taxes paid, including the waiver of certain requirements for beer destructions and using beer to make hand sanitizer at a distillery. The FAQs provide guidance in response to the coronavirus (COVID-19) pandemic. (COVID-19) pandemic. (published May 4, 2020)
Excise tax relief, distilled spirits used to produce hand sanitizers (COVID-19): The U.S. Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau (TTB) today issued a release announcing that it will continue to waive certain excise tax provisions with regard to distilled spirits that are used in the production of hand sanitizers as a response to the coronavirus (COVID-19) pandemic. (published April 20, 20202)
Postponed payment, reporting date for TTB excise taxes (COVID-19): The U.S. Treasury Department announced March 31, 2020, that the date for paying excises taxes for wine, beer, distilled spirits, tobacco products, firearms, and ammunition—excises taxes administered by the Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau (TTB)—has been delayed for 90 days in response to the coronavirus (COVID-19) pandemic. (published April 1, 2020)
Excise tax relief, distilled spirits used to produce hand sanitizers (responding to COVID-19): The U.S. Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau (TTB) on March 18, 2020, issued a release announcing that it was waiving certain excise tax provisions with regard to distilled spirits that are used in the production of hand sanitizers. (published March 19, 2020)
U.S. trade court: “Substitution drawbacks” of wine companies: The U.S. Court of International Trade issued an opinion in a case concerning “substitution drawbacks” of companies importing and exporting wine. (published January 27, 2020)
TTB reminder, federal excise tax return filing dates for 2020: The Alcohol and Tobacco Tax and Trade Bureau (TTB) of the U.S. Treasury Department issued a release that serves as a reminder of the 2020 due dates for filing federal excise tax returns and operational reports. (published January 6, 2020)
Craft beverage excise tax provisions extended through 2020; wine credit transfers: The Alcohol and Tobacco Tax and Trade Bureau (TTB) of the U.S. Treasury Department issued a release noting that the craft beverage modernization and tax reform provisions of the 2017 U.S. tax law (Pub. L. No. 115-97)—the law that is often referred to as the “Tax Cuts and Jobs Act”—have been extended for one additional year, through December 31, 2020. The craft beverage modernization provisions are included in the appropriations legislation that was signed into law by the president on December 20, 2019. (published December 30, 2019)
TTB voluntary disclosure program for unreported changes in control or proprietorship: The Alcohol and Tobacco Tax and Trade Bureau (TTB) of the U.S. Treasury Department today issued a reminder for wholesalers and importers of alcohol beverages of the requirement to file a new permit application within 30 days of a change of control or change in proprietorship. To provide relief for entities that may not have complied with this filing requirement, TTB is offering a temporary voluntary disclosure program through December 31, 2019. (published November 15, 2019)
TTB excise tax penalty relief for industry affected by California wildfires: The Alcohol and Tobacco Tax and Trade Bureau (TTB) of the U.S. Treasury Department issued a release explaining that businesses (such as wineries) affected by the recent wildfires in California may obtain a waiver of excise tax-related penalties for not timely filing or paying excise taxes. (published November 4, 2019)
CBP procedures for implementing alcoholic beverage import measures: The Craft Beverage Modernization and Tax Reform Act of 2017 (CBMA) (contained in Pub. L. No. 115-97) amended the Internal Revenue Code with respect to the tax treatment of certain alcoholic beverages. The relevant provisions of the CBMA are effective for importations made during calendar years 2018 and 2019. (published April 2, 2019)
TTB return is updated, firearms and ammunition excise tax: The U.S. Treasury Department’s Alcohol and Tobacco Trade Tax Bureau (TTB) announced there is an updated version of the return used to report firearms and ammunition excise tax. (published February 25, 2019)

Aviation

Final regulations: Air transportation excise taxes (text of regulations): The IRS today posted to its website a version of the final regulations (T.D. 9948) relating to the excise taxes imposed on certain amounts paid for transportation of persons and property by air.
Excise taxes on air transport of persons or property; aircraft management services exemption: The U.S. Treasury Department and IRS today released for publication in the Federal Register a notice of proposed rulemaking (REG-112042-19) relating to the excise taxes imposed on certain amounts paid for transportation of persons and property by air.
IRS provides FAQs on aviation excise tax holiday under CARES Act (COVID-19). The IRS has provided a set of “frequently asked questions” (FAQs) that address issues related to the aviation excise tax holiday pursuant to relief provided by the “Coronavirus Aid, Relief, and Economic Security Act” (CARES Act) (Pub. L. No. 1161-136).

Automotive

Seventh Circuit: Safe harbor relief from federal excise tax, refurbished heavy truck tractors: The U.S. Court of Appeals for the Seventh Circuit addressed questions of first impression with regard to federal excise tax on heavy trucks and the scope of a statutory safe harbor.
IRS reminder of heavy highway use tax deadline, August 31: The IRS today issued a reminder for taxpayer-owners of heavy highway vehicles of the August 31, 2020 deadline for filing Form 2290, “Heavy Highway Vehicle Use Tax Return” and paying the related federal excise tax.

Energy/Environmental

Section 4611(b) excise tax on domestic crude oil exports violates Export Clause (federal district court): A federal district court this week issued its final judgment in a case in which a taxpayer challenged the excise tax imposed under section 4611(b) on domestic crude oil exports as violating the Export Clause of the U.S. Constitution. The court agreed with the taxpayer, and granted the taxpayer’s claim for a refund of the excise tax.
Notice 2021-4: Extension of temporary dyed fuel tax relief, Wisconsin terminals: The IRS today released an advance version of Notice 2021-4, which provides a “final extension” of the temporary dyed fuel relief for taxable fuel removals from certain Wisconsin terminals due to the shutdown of the West Shore Pipeline.

Federal district court: No alternative tax credit under section 6426 for butane: A magistrate judge recommended denial of a taxpayer’s motion for summary judgment on its claim of refund of excise taxes. In the memorandum and recommendation for the U.S. District Court for the Southern District of Texas, the magistrate explained why the taxpayer was not entitled to an alternative fuel credit under section 6426(e) for butane on summary judgment. (published February 27, 2020)
IRS adds new compliance campaigns on fuel credit, research issues (LB&I division): The IRS Large Business & International (LB&I) division continues to expand its list of compliance campaigns today by adding two new campaigns—bringing the current total to 53 compliance campaigns. (published February 27, 2020)
KPMG report: Claiming retroactively reinstated renewable fuel incentives: Renewable fuel incentives have been retroactively reinstated. (published February 24, 2020)
IRS reminder: First oil spill liability tax due by January 29, 2020: The IRS posted information on its website concerning the semi-monthly oil spill liability tax. (published January 27, 2020)
Notice 2020-4: Extension of temporary dyed fuel tax relief, Wisconsin terminals: Notice 2020-4—which appears in Internal Revenue Bulletin (IRB) 2020-4 (January 21, 2020)—extends for all of 2020 the temporary dyed fuel relief for taxable fuel removals from certain Wisconsin terminals due to the shutdown of the West Shore Pipeline. (published January 17, 2020)
Notice 2020-8: Biodiesel, renewable fuel credits for 2018-2019: The IRS today released an advance version of Notice 2020-8 that provides guidance for making a one-time claim for payment of the credits and payments allowable for biodiesel—including renewable diesel—mixtures and alternative fuels sold or used during calendar years 2018 and 2019. (published January 15, 2020)
Reminder of energy-related excise tax extenders enacted in late 2019: President Trump on December 20, 2019, signed into law H.R. 1865 (“The Further Consolidated Appropriations Act, 2020”)—a government funding bill that includes extensions of 34 expired or expiring provisions. (published January 8, 2020)
Federal Circuit: Alternative mixture fuel credit denial upheld: The U.S. Court of Appeals for the Federal Circuit today affirmed the federal claims court’s grant of summary judgment for the government in a case concerning whether the taxpayer was entitled to almost $20 million in energy tax credits available for certain alternative fuel mixtures under section 6426. (published September 26, 2019)
IRS to waive dyed fuel penalty in Florida; hurricane-related relief: The IRS on Friday, August 30, 2019, announced that it will not impose a penalty when dyed diesel fuel is sold for use or is used on the highway in Florida. (published September 3, 2019)
“Oil spill” excise tax has expired: The “oil spill” excise tax under section 4611 that is imposed on crude oil and imported petroleum products expired at the end of 2018. (published January 3, 2019)
Notice 2019-04: Extension of temporary dyed fuel tax relief, Wisconsin terminals: The IRS today released an advance version of Notice 2019-04 that extends for all of 2019 the temporary dyed fuel relief for taxable fuel removals from certain Wisconsin terminals due to the shutdown of the West Shore Pipeline. (published December 19. 2018)
Federal Circuit: Alternative mixture fuel credit denial upheld: The U.S. Court of Appeals for the Federal Circuit today affirmed the federal claims court’s grant of summary judgment for the government in a case concerning whether the taxpayer was entitled to almost $20 million in energy tax credits available for certain alternative fuel mixtures under section 6426.
Notice 2019-10: Comments requested, fuel excise tax regulations related to power take-off: The IRS released an advance version of Notice 2019-10 that requests comments on possible changes to the rules governing the excise tax treatment of fuel used in a motor vehicle to operate "auxiliary equipment." (published March 12, 2019)
IRS clarifies rules for September oil spill tax calculations: This article published in TaxNotes discusses the IRS rules for oil spill calculations for September (must have a TaxNotes subscription to view this article)
Diesel particulate filters: Taxation and credits: In a byline article for Tax Adviser, KPMG’s Deborah Gordon and Taylor Cortright discuss the federal excise tax treatment of diesel particulate filters (DPFs) and potential fuel tax credits that may be claimed for fuel used to operate DPFs. (published June 1, 2018)
Potential Excise Tax Refunds for Fuel Blenders: Companies engaged in producing mixtures of liquefied petroleum gas (LPG), including butane, and gasoline for sale as a fuel may be entitled to refunds for federal fuel excise taxes paid in 2014, 2015, and 2016. Certain fuel blenders may be entitled to potentially significant excise tax refunds, depending on the volume of LPG used. (published May 12, 2017)
Claiming renewable fuel credits for 2015: With the retroactive reinstatement of certain renewable fuel credits for 2015 and issuance of Notice 2016-5, taxpayers may now claim a one-time excise tax payment for alternative fuel sold for use or used in a motor vehicle or motorboat or used in aviation during 2015. Examples include propane or liquefied hydrogen used in forklifts, and compressed natural gas (CNG) or liquified natural gas (LNG) sold for use in delivery trucks or buses. Taxpayers may also claim a one-time excise tax payment for production of qualifying biodiesel and renewable diesel mixtures in 2015. (published February 29, 2016)
Notice 2016-5: One-time claim for 2015 biodiesel, alternative fuel excise tax incentives: The IRS today released an advance version of Notice 2016-5 providing rules for claimants to make a one-time claim for credits and payments for biodiesel (including renewable diesel) mixtures and alternative fuels sold or used during calendar year 2015. These incentives were retroactively extended by the tax legislation enacted on December 18, 2015. Notice 2016-5 [PDF 29 KB] also provides guidance for claiming the alternative fuel mixture excise tax credit for 2015. Provisions in the “Protecting Americans from Tax Hikes Act of 2015” (PATH Act, enacted December 18, 2015) extend for two years—from January 1, 2015, through December 31, 2016—excise tax credits, income tax credits, and excise tax payments with respect to biodiesel and alternative fuel incentives. The PATH Act also includes a provision directing that guidance be issued to provide for a one-time claim for biodiesel mixtures and alternative fuel incentives and further provides that taxpayers be allowed a 180-day period to file these claims. Today’s notice sets forth procedures for making a one-time claim for the 2015 biodiesel mixture and alternative fuel incentives. This one-time claim can be filed as early as January 15, 2016. All one-time claims must be filed on or before August 8, 2016. The notice does not affect 2015 claims for the nonrefundable income taxes credits for second generation biofuel producers, biodiesel mixtures, biodiesel (unmixed), or small agri-biodiesel producers or 2015 claims for the refundable income tax credit for biodiesel mixtures or alternative fuel. (published January 14, 2016)

Other excise tax news

President signs year-end funding, COVID-19 relief legislation; tax provisions are enacted: President Trump on December 27, 2020 (Sunday evening) signed into law the “Consolidated Appropriations Act, 2021”—legislation that includes over $900 billion for various coronavirus (COVID-19) relief programs, government funding of $1.4 trillion, and myriad tax provisions. Accordingly, the date of enactment is December 27, 2020.
Notice 2020-84: Self-insured health insurance annual fee: The IRS today released an advance version of Notice 2020-84 announcing that the adjusted applicable dollar amount that applies for determining the Patient-Centered Outcomes Research Trust Fund (PCORTF) fee for policy years and plan years ending on or after October 1, 2020, and before October 1, 2021, is equal to $2.66.
Notice 2020-55: Postponed deadline, federal excise tax for sports fishing, archery equipment (COVID-19): The IRS today released an advance version of Notice 2020-55 that provides until October 31, 2020, for filing a Form 720 and paying the related federal excise tax under section 4161(a) on sales of sport fishing equipment and under section 4161(b) on sales of archery equipment (bows and arrows) for the first calendar quarter (January, February, and March) of 2020. This relief is provided in response to the coronavirus (COVID-19) pandemic. (published August 7, 2020)

IRS and TTB agree to whistleblower process regarding federal excise taxes: The IRS today issued a release announcing that a process has been formalized with the Alcohol and Tobacco Tax and Trade Bureau (TTB) to allow for procedures between the IRS and TTB to process claims for whistleblower awards under the excise tax laws that are administered and enforced by TTB. (published December 11, 2019)
State Opioid Taxes: Misuse and abuse of both prescription and illicit opioids have led to a national epidemic. Perhaps inspired by the trend to tax tobacco, alcohol, and even soda, some policymakers have been drawn to the idea of taxing prescription opioids. To deter opioid use and defray some of the costs resulting from the abuse of both prescription and illicit opioids, state legislatures are considering new laws that impose a tax or distributors. (published September 16, 2019)
FY 2017 budget: Green Book—Treasury’s explanation of tax proposals: The U.S. Treasury Department this afternoon released the “Green Book”—a 283-page explanation of the tax proposals in the administration’s FY 2017 budget. The title of the Green Book [PDF 1.85 MB] is “General Explanation of the Administration’s Fiscal Year 2017 Revenue Proposals.” KPMG will shortly provide a discussion of initial impressions of the tax proposals in the FY 2017 budget, to be followed by a more detailed discussion of the tax provisions in the budget. (published February 9, 2016)