CBMA (Craft Beverage Modernization Act)
The CBMA provides reduced federal excise tax rates on the first tiers of distilled spirits a producer removes each calendar year, lowering the tax burden for craft producers.
The reduced rate applies to the first proof gallons removed in a year, with higher rates on volume above each threshold. Because the tiers reset annually and apply cumulatively, your marginal excise rate must be tracked across the whole calendar year to bill and accrue tax correctly.
What are the CBMA tax tiers?
Under the Craft Beverage Modernization Act, the federal excise tax is 2.70 dollars per proof gallon on the first 100,000 proof gallons removed in a calendar year, 13.34 dollars on the next tier up to roughly 22.23 million, and 13.50 dollars above that. The tiers reset every January. See the TTB CBMA overview (ttb.gov).
How do the tiers affect a growing producer?
Because the reduced rate applies only to the first proof gallons each year and the tiers apply cumulatively, your effective rate climbs as annual volume grows. Tracking year-to-date removals is what keeps the marginal rate correct when you bill and accrue excise tax.
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