TTB Excise Taxes and Disaster Relief Help

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Many wineries, breweries and distilleries were recently affected by Hurricane Sandy and many more are affected every year by blizzards, earthquakes, floods, hurricanes, drought, and other natural disasters.  Given the size of destruction of Sandy, the federal government has recently reminded excise taxpayers that there are provisions under the law that can provide them with some relief when these situations occur. Please note that the comments below apply to all business taxpayers including retailers, wholesalers, importers, export warehouse proprietors,and manufacturers of alcohol products.

The Alcohol and Tobacco Tax and Trade Bureau (TTB) acknowledges that these natural disasters may cause taxpayers to not be able to timely file or timely make payment or deposit of excise taxes.  Congress has passed laws that will allow taxpayers to obtain some relief when they are unable to follow the letter of the law because of these natural disasters.  The relief that is available comes in two parts: (1) relief for those who need to report or pay taxes on products that were not destroyed, but they can’t do so timely, and (2) relief for those who have paid taxes on products that cannot be sold for a variety of reasons.

If the taxpayer is reporting late or paying tax late because of a natural disaster, TTB will entertain abatement requests for those in a Presidentially declared disaster area.  Unfortunately, this is done on a case by case basis, where the taxpayer must show that the issue was due to reasonable cause and not willful neglect. The taxpayer should not assume that relief from penalties will come simply because the taxpayer’s business is located in the disaster zone, but rather because the taxpayer was delayed in filing and/or paying because of the effect of the disaster on the taxpayer’s operations or some other circumstance that prevents timely paying or reporting.

Of great importance is that the Internal Revenue Code allows the TTB to reimburse federal excise taxes paid on alcoholic beverages lost, rendered unmarketable, or condemned by various authorized officials, including the President in the form of a major disaster declaration.

There are time restrictions for filing these claims and specific information to be provided at the time the claim is filed for reimbursement.  You must file your claim with TTB within 6 months from the date of a disaster. If the President declares or determines a major disaster, claims must be filed no later than 6 months from the date the President declared the major disaster.  Further, you must state whether taxes were included in the purchase price of the products. If your claim includes imported products, you must state whether duties were included in the purchase price. Claims for customs duties must be submitted separately to U.S. Customs, but can also be reimbursed.

There are some other somewhat logical requirements for reimbursement. You must prove that you owned the products at the time of the disaster and that you intended to sell them, rather than hold them for personal use. If your goods were in transit, you may be eligible for payment if you hold title to those goods. If any portion of your claim includes goods in transit, it will be necessary to provide information to TTB about who held title at the time of disaster.

It is necessary to properly describe what you are making a claim for and you have to be able to document the items.  This includes informing TTB about the brand, type of alcohol, size and type of units or bottles, along with alcohol content and calculation of tax paid per unit and in total. If your records are destroyed, you must obtain substantiation for your claim from another source such as supplier records, return preparer records, bank records, etc.

Further, the statute indicates that the person claiming reimbursement must not be indemnified by any valid claim of insurance or otherwise in respect of the tax, or duty, on the distilled spirits, wines, or beer covered by the claim.  So, if your insurance coverage is going to reimburse you, or a transporter’s insurance, or some other business associate’s insurance is going to pay a claim that covers the excise tax, then you cannot make a claim to TTB for reimbursement.

When the Secretary of the Treasury has made payment for a claim, the statute requires that the products be destroyed.  Further, the law indicates that the destruction must occur under the supervision of TTB.  TTB has indicated that the taxpayer should contact them to inquire about whether or not the government would like to witness the destruction.  This is an important step that should not be missed and should be properly documented.

Though not a direct result of a natural disaster, it is frequently the case that vandalism, looting and theft can occur shortly thereafter that may cause loss to the taxpayer.  Technically, this type of loss is not reimbursable as part of a disaster claim, but under specific statutory provisions, distillers, brewers and wineries can get relieved from paying excise taxes.

Taxpayers who also have state tax requirements should contact their state ABC to determine if there are similar relief provisions instituted at the state level. Should you require assistance with the claim process, or simply have questions about whether or not you qualify for relief, please don’t hesitate to contact us.

We're Here to Help

Dear friends in the alcoholic beverage industry,

As we as an industry, nation and planet collectively try to navigate this unprecedented period the coronavirus has brought us, We’d like you to know that we at Craft Beverage Consultants (the other CBC!) are here to answer any question you may have (or not know you have) about not just surviving this time but positioning yourself to thrive as soon as social distancing measures allow your business to function at full capacity again.

If you schedule a free 60-minute phone or video conferencing consultation with me or any of my 11 highly specialized colleagues, we’ll help you figure out any of your immediate and/or longterm business needs, or “everything but the staffing,” as we like to say. We’re not high-pressure sales kind of people, especially these days, so you don’t have to worry about fending off annoying pitches. Make an appointment on our website or Facebook page, or just call us the old-fashioned way at 314-768-0220.

Our experts have a combined 150 years in the alcoholic beverage industry, with deep knowledge in everything from sales and distribution, production, and regulatory compliance to marketing, package design, event planning, IT, (social) media, hospitality, and even values-based executive coaching. 

For example, we can coach you through this season when chain accounts have canceled their spring, in some cases, fall resets and distributors have drastically cut orders. Our director of business strategy and compliance can save you money – now – on excise taxes, caution you to avoid naming your beers in ways that risk alienating your buyers (Wuhan Wheat? Coronavirus Cream Ale? Groan. No.), and secure TTB approval for the tastefully named beers you do make. Our creative director and web team can get your e-commerce site up and running and launch a social media campaign that keeps you top of mind for current and future customers. Our director of storytelling can put you in front of the press so you can tell your story to your community. 

Once you’re ready, we can look forward together. Now is the time to talk about post-virus. We all suspect the legal landscape to look different. But how? And how do you prepare yourself in a way that positions you to charge out of the gate ready to maximize the potential and profit of whatever the “new normal” turns out to be? Please get in touch so we can talk about it. 

CBC’s roster includes local and regional clients like Epic Brewing, Logboat Brewing, Piney River Brewing, SudWerk Brewing, Waves Cider and Common Cider Company, just to name a few.  The agency was founded in 2004 by Jacob and Beth Halls, formerly known as Convergence Consulting; Rick Laxague, joined as a partner in charge of sales, marketing and distribution consulting in 2019. 

Rick hase close to 20 years of experience, a bulk of which was with Crescent Crown Distributing in Arizona. His last role there was Area Sales Manager for the dedicated craft beer division, coaching and leading a sales team to be nationally recognized. In early 2014 Rick helped take a regional brewery national as their Director of National Accounts and increase that segment of their business from 30,000 cases to almost 300,000 cases in two years, an increase that equates to $4.8 million in IRI dollar sales. 

Co-founder Jacob Halls brings 17 years of experience in regulatory compliance, business strategy, marketing and craft brand management to the company. In his former position as craft brand manager for the N.H. Scheppers Distributing Company in Columbia, Missouri, Jacob helped lead his team to winning the 2016 Distributor of the Year award from New Belgium and to a nomination for the Brewers Association’s Distributor of the Year award. Jacob is also the founder and director of the South East Craft Beer Fest and several other industry specific charitable event marketing festivities. Beth Halls is Director of Business Operations and Coordinator of Charity Operations for the festivals and events run by CBC, such as the South East Craft Beer Fest, MO Bacon & Bourbon, and many more. 

Again, please reach out to us for anything.  CBC can be reached at (314) 768-0220 or at

We look forward to meeting/talking soon.


Rick Laxague, Jacob Halls, and Beth Halls