83 FR 40675 - Refund of Alcohol Excise Tax

DEPARTMENT OF HOMELAND SECURITY
U.S. Customs and Border Protection
DEPARTMENT OF THE TREASURY

Federal Register Volume 83, Issue 159 (August 16, 2018)

This document updates language in the U.S. Customs and Border Protection (CBP) regulations to reflect the current organization of CBP and the Department of the Treasury. The document also eliminates a restriction pertaining to CBP's authority to refund excessive duties, taxes, fees, or interest imposed on distilled spirits, wine, and beer to facilitate implementation of Subpart A (Craft Beverage Modernization and Tax Reform) of Part IX of the Tax Cuts and Jobs Act, signed December 22, 2017, commonly referred to as the Craft Beverage Modernization Act.

[Federal Register Volume 83, Number 159 (Thursday, August 16, 2018)]
[Rules and Regulations]
[Pages 40675-40677]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-17710]


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DEPARTMENT OF HOMELAND SECURITY

U.S. Customs and Border Protection

DEPARTMENT OF THE TREASURY

19 CFR Part 24

[CBP Dec. 18-09; 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 regulations; solicitation of comments.

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SUMMARY: This document updates language in the U.S. Customs and Border 
Protection (CBP) regulations to reflect the current organization of CBP 
and the Department of the Treasury. The document also eliminates a 
restriction pertaining to CBP's authority to refund excessive duties, 
taxes, fees, or interest imposed on distilled spirits, wine, and beer 
to facilitate implementation of Subpart A (Craft Beverage Modernization 
and Tax Reform) of Part IX of the Tax Cuts and Jobs Act, signed 
December 22, 2017, commonly referred to as the Craft Beverage 
Modernization Act.

DATES: This interim final rule is effective August 16, 2018; comments 
must be received by October 15, 2018.

ADDRESSES: You may submit comments, identified by docket number USCBP-
2018-0033, by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Trade and Commercial Regulations Branch, Regulations 
and Rulings, Office of Trade, U.S. Customs and Border Protection, 90 K 
Street NE, 10th Floor, Washington, DC 20229-1177.
    Instructions: All submissions received must include the agency name 
and docket title for this rulemaking, and must reference docket number 
USCBP-2018-0033. 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 the 
document.
    Docket: For access to the docket to read background documents or 
comments received, go to http://www.regulations.gov. Submitted comments 
may also be inspected during business days between the hours of 9:00 
a.m. and 4:30 p.m. at the Trade and Commercial Regulations Branch, 
Regulations and Rulings, Office of Trade, U.S. Customs and Border 
Protection, 90 K Street NE, 10th Floor, Washington, DC. Arrangements to 
inspect submitted comments should be made in advance by calling Mr. 
Joseph Clark at (202) 325-0118.

FOR FURTHER INFORMATION CONTACT: Sharolyn J. McCann, Supervisory 
Program Manager, Office of Trade, U.S. Customs and Border Protection, 
(571) 468-5478, [email protected].

SUPPLEMENTARY INFORMATION:

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 support such recommended change.

Background

    CBP is amending Sec.  24.36 of title 19 of the Code of Federal 
Regulations (19 CFR 24.36) regarding the authority of CBP to issue 
refunds of excessive duties, taxes, fees, or interest to:
    (1) Reflect changes in departmental organization, a statutory 
citation to account for the Internal Revenue Code of 1986, and current 
form names and numbers. The current text refers to the Department of 
the Treasury's (Treasury) organization that preceded the 1972 transfer 
of certain functions from the Internal Revenue Service to the Bureau of 
Alcohol, Tobacco and Firearms. See Treasury Order 221 (June 6, 1972). 
The Homeland Security Act of 2002 (Pub. L. 107-296, December 25, 2002) 
later transferred these functions described in 19 CFR 24.36(e) to the 
Alcohol and Tobacco Tax and Trade Bureau (TTB).
    The reference to Internal Revenue Form 843 in Sec.  24.36(e)(1) 
predates the 1963 republication of chapter I of title 19 (see 28 FR 
14546, 14815 (Dec. 31, 1963)) and is obsolete. The current IRS Form 843 
is not related to excise tax. Current TTB Form 5620.8, ``Claim--

[[Page 40676]]

Alcohol, Tobacco, and Firearms Taxes,'' is the modern equivalent of the 
form referred to in the regulations.
    CBP is also removing references to the ``port director'' to allow 
for CBP to issue refunds either through electronic methods or by the 
ports or the Centers of Excellence and Expertise, and is making other 
grammatical changes as appropriate.
    (2) Add to CBP's refund authority the ability to refund taxes paid 
prior to assigning a reduced tax rate or tax credit for alcoholic 
beverages, including beer, wine, and distilled spirits, as allowed by 
sections 13801-13808 (Subpart A--Craft Beverage Modernization and Tax 
Reform, of Part IX) 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).
    The 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. For an importer to be eligible to 
receive a reduced tax rate or a tax credit, the importer must be able 
to substantiate that the foreign producer has assigned an allotment of 
its reduced tax rate or tax credits to the beer, wine, or distilled 
spirits imported by that importer. The new Sec.  24.36(d)(10) makes it 
clear that CBP has authority to refund the difference between the full 
excise taxes an importer pays at the time of entry summary filing and 
the CBMA's lower effective tax rate. An importer must request and 
substantiate its entitlement to the reduced tax rate or tax credit 
appropriately.

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 public comment requirement 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.
    Treasury and CBP find that prior notice and comment are unnecessary 
and that good cause exists to issue these regulations effective upon 
publication. Prior notice and comment are unnecessary because the rule 
does not substantively alter the underlying rights or interests of 
importers or filers, but instead makes technical corrections and makes 
clear that importers may obtain the benefit of a lower effective tax 
rate by filing a refund claim with CBP.

Executive Orders 13563, 12866, and 13771

    Executive Orders (E.O.) 13563 (``Improving Regulation and 
Regulatory Review'') and 12866 (``Regulatory Planning and Review'') 
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). E.O. 13563 emphasizes the importance of 
quantifying both costs and benefits, of reducing costs, of harmonizing 
rules, and of promoting flexibility. E.O. 13771 (``Reducing Regulation 
and Controlling Regulatory Costs'') directs agencies to reduce 
regulation and control regulatory costs and provides that ``for every 
one new regulation issued, at least two prior regulations be identified 
for elimination, and that the cost of planned regulations be prudently 
managed and controlled through a budgeting process.''
    This interim rule is not a ``significant regulatory action,'' under 
section 3(f) of E.O. 12866. Accordingly, the Office of Management and 
Budget (OMB) has not reviewed this regulation. As this rule is not a 
significant regulatory action, this rule is exempt from the 
requirements of E.O. 13771. See OMB's Memorandum titled ``Guidance 
Implementing Executive Order 13771, Titled `Reducing Regulation and 
Controlling Regulatory Costs''' (April 5, 2017).

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.

Paperwork Reduction Act (PRA)

    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 
OMB control number. The information collection activities associated 
with the existing requirements related to the submission of a TTB Form 
5620.8 are currently approved by OMB under OMB control number 1513-
0030. There is no change in burden hours as a result of this rule.

Signing Authority

    This document is being issued in accordance with Sec.  0.1(a)(1) of 
the CBP regulations (19 CFR 0.1(a)(1)) pertaining to the authority of 
the Secretary of the Treasury (or his or her delegate) to approve 
regulations related to certain CBP revenue functions.

List of Subjects in 19 CFR Part 24

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

Amendments to Part 24 of the CBP Regulations

    For the reasons set forth in the preamble, 19 CFR part 24 is 
amended as set forth below.

PART 24--CUSTOMS FINANCIAL AND ACCOUNTING PROCEDURE

0
 1. The general citation for part 24 continues, and the specific 
authority citation for Sec.  24.36 is 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. 6423; Pub. L. 115-97.


0
2. In Sec.  24.36:
0
a. Paragraph (d) introductory text is revised;
0
b. Amend paragraph (d)(8) by removing the word ``or'' at the end of the 
paragraph;
0
c. Amend paragraph (d)(9) by removing the period at the end of the 
paragraph and adding in its place ``; or'';
0
d. Paragraph (d)(10) is added; and
0
e. Paragraphs (e)(1) through (3) are revised.
    The revisions and additions 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

[[Page 40677]]

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). 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, 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).
    (e) * * *
    (1) CBP will provide the following notice to the importer of 
record: ``Claim for refund of any overpayment of internal revenue tax 
on this entry must be executed and filed with the Director, National 
Revenue Center, Alcohol and Tobacco Tax and Trade Bureau (TTB), in 
accordance with TTB regulations (Title 27 of the Code of Federal 
Regulations).'' On request of the claimant, CBP will issue a statement 
identifying the entry, showing the amount of internal revenue tax 
deposited with respect to each entry for which a claim on TTB Form 
5620.8 is to be made, and showing the date of issuance of the notice of 
refund of duty.
    (2) The claim must be executed on TTB Form 5620.8 (Claim--Alcohol, 
Tobacco, and Firearms Taxes) and must be filed with the Director, 
National Revenue Center, TTB. The certified statement must be attached 
to and filed in support of such claim which may include refunds under 
more than one entry but is limited to refunds under entries filed at 
the same port and the same internal revenue region. The data to be 
shown on the claim must be as prescribed in TTB regulations, with the 
exception that any data on the certified statement also required to be 
shown in the claim need not be restated in the claim.
    (3) The date of allowance of refund or credit in respect of such 
tax for the purposes of section 6407, Internal Revenue Code of 1986, as 
amended (26 U.S.C. 6407), will be that date on which a claim is 
perfected and the refund is authorized for scheduling under the 
applicable TTB regulations.

Kevin K. McAleenan,
Commissioner.
    Approved: August 13, 2018.
Timothy E. Skud,
Deputy Assistant Secretary of the Treasury.
[FR Doc. 2018-17710 Filed 8-15-18; 8:45 am]
BILLING CODE 9111-14-P