Craft Beverage Modernization Act (CBMA) Tax Credits for Wineries & Alcohol Importers: TTB Guide

Last reviewed: October 27, 2026

The Craft Beverage Modernization Act (CBMA)—made permanent under the Internal Revenue Code (26 U.S.C. § 5041(c) for wine, § 5051 for beer, and § 5001 for distilled spirits)—significantly reduces federal alcohol excise taxes for domestic producers and eligible importers. However, TTB’s strict rules governing who “produces” the wine, how tax credits transfer in bond, and how foreign producers assign benefits in myTTB frequently trip up wineries and importers in Napa Valley, Sonoma County, and nationwide.

Claiming CBMA producer tax credits without qualifying fermentation production or proper transfer documentation is one of the fastest ways to trigger a TTB excise tax assessment, interest, and penalties. Here is how domestic wineries and importers can stay compliant with help from Gateway Compliance Napa.

1. Domestic Winery CBMA Tax Credit Tiers (26 U.S.C. § 5041(c))

Under CBMA, a domestic bonded winery that produces wine may claim tiered tax credits against the federal wine excise tax on the first 750,000 wine gallons removed for consumption or sale each calendar year (regardless of total annual production volume):

• Tier 1 (First 30,000 Wine Gallons): $1.00 per gallon credit (reducing the $1.07 standard table wine tax rate up to 16% ABV to an effective rate of $0.07 per gallon; or $0.535 credit for eligible hard cider).
• Tier 2 (Next 100,000 Wine Gallons — 30,001 to 130,000 gal): $0.90 per gallon credit (effective rate of $0.17 per gallon on table wine up to 16% ABV).
• Tier 3 (Next 620,000 Wine Gallons — 130,001 to 750,000 gal): $0.535 per gallon credit (effective rate of $0.535 per gallon on table wine up to 16% ABV).
• Sparkling Wine Eligibility: Under permanent CBMA rules, sparkling wine (normally taxed at $3.40 per gallon) is also eligible for the $1.00, $0.90, and $0.535 producer tax credits when produced by the qualifying winery.

2. The Critical “Produced by Fermentation” Rule (Why Blending or Bottling Alone Does Not Qualify)

To generate CBMA wine tax credits, the bonded winery must actually produce wine by fermentation (or eligible sweetening/addition of wine spirits/amelioration) during the calendar year. Simply purchasing bulk finished wine in bond, cellaring/aging it, blending it, and bottling it at your bonded winery or bonded wine cellar (BWC) does not count as “production” for CBMA credit generation unless the producing winery formally transfers its CBMA tax credit allocation to you with the Transfer in Bond (TIB).

Moreover, a winery’s eligible CBMA credit removals in a calendar year cannot exceed the total gallons of wine that the winery actually produced (plus eligible transferred credits) in alignment with its TTB Form 5120.17 operational reports.

3. CBMA Credits in Alternating Proprietorships, Custom Crush & Bonded Warehouses

• Alternating Proprietors (AP): Because an Alternating Proprietor holds its own TTB Bonded Winery permit and ferments its own wine, the AP generates its own independent 30,000-gallon Tier 1 CBMA credit pool—provided the AP is not part of a “Controlled Group” (common ownership >50%) with another winery and operates as a bona fide independent producer under TTB Industry Circular 2008-4.
• Custom Crush Clients: In a custom-crush arrangement, the host winery is the legal producer. Therefore, any wine removed taxpaid by the host (or transferred in bond to a Bonded Wine Cellar with a CBMA credit transfer) draws from the host winery’s 750,000-gallon CBMA tier allocation, not a separate tier for the custom-crush client.
• Transfers in Bond (TIB) to Bonded Wine Cellars (BWC): A producing Bonded Winery may transfer bulk or bottled wine in bond to a BWC (such as a commercial bonded fulfillment warehouse in Napa or Sonoma) and elect in writing to transfer a specified portion of the producer’s CBMA tax credits so the BWC can claim that rate on its TTB Form 5000.24 excise tax return when shipping the wine.

4. Imported Wine, Beer & Spirits: myTTB CBMA Refund Claims

For imported wine, beer, and distilled spirits, U.S. importers no longer take reduced CBMA tax rates directly at the time of U.S. Customs and Border Protection (CBP) entry. Instead:

1. The foreign winery, brewery, or distillery must register in myTTB Foreign Producer Registration and receive a TTB Foreign Producer ID.
2. The foreign producer must assign its calendar-year CBMA tax benefit quantities to the U.S. Importer’s Basic Permit number in myTTB.
3. The U.S. customs broker transmits the Foreign Producer ID, importer permit, and CBMA flag in the CBP ACE Entry Summary (Form 7501), and the importer pays the full statutory excise tax rate to CBP upon entry.
4. After the close of each calendar quarter, the U.S. importer logs into the myTTB CBMA Importer Claims portal to reconcile ACE entries and claim a direct cash refund from TTB for the difference between the full tax paid and the reduced CBMA rate.

Audit-Proof Your Excise Tax Returns & CBMA Claims

Gateway Compliance Napa manages TTB Form 5000.24 excise tax filings, Form 5120.17 production reconciliations, TIB tax-credit transfer statements, and myTTB Foreign Producer / CBMA Importer refund claims. Contact Taylor Marchand at Gateway Compliance Napa to review your excise tax setup.

This guide provides general educational information and is not legal or tax advice. Confirm current TTB, Internal Revenue Code, and CBP CBMA rules for your specific business and controlled group structure.