As of Jan. 1 a winery that files its TTB excise taxes annually (owes <$1,000 in excise taxes/year) or quarterly (owes ≤ $50,000 excise taxes/year) will be exempt from the bond requirement. The TTB bond exemption will not be automatically granted. Existing qualifying wineries must notify the TTB that they believe they are eligible for a bond exemption, and request a bond termination, by filing an amended Application to Establish and Operate Wine Premises form and checking the box in question nine stating the winery is not required to hold a bond. Per temporary rule 27 CFR 24.160, TTB will require that all reports, returns and tax payments are filed in order to determine if a bond exemption is in fact available. Wineries can file an amended permit application requesting a bond termination as of Jan. 1, but the bond termination request will not be fully assessed until the winery submits its final 2016 tax return and report of wine premises.
With regard to cash bonds, if an existing winery is no longer required to have a bond, it should file and pay any outstanding excise taxes. The winery should then file the amended application form and state that the winery is not required to hold a bond. Per temporary rule 27 CFR 24.159 “Release of Collateral Security,” the TTB officer will review the amended application and all returns, to determine whether all tax liability has been met and will set a date for the return of the cash bond.
A link to TTB guidance on the topic published Dec. 30, 2016 can be found here. For a link to TTB temporary regulations related to the PATH Act, click here. The TTB is seeking comments on the temporary rules by Mar. 7. If you have suggestions for changes to the published temporary rules, please notify the Oregon Winegrowers Association. For questions, contact the OWA or OWA legal counsel at Davis Wright Tremaine LLP.