2016 PATH Act

I read an article in the June 2017 issue of Wines & Vines that will soon have some bearing on us called "What Coming Excise Tax Changes Mean" written by Ann Reynolds. We are not yet a bonded winery, but that is looming in the near future. There was a bill introduced in Congress in January of this year called the Craft Beverage Modernization and Tax Reform Act, which I will write about in another blog.
This impending new bill made me curious to know what the current laws are regarding wine taxes so I looked it up and found an article written in Wines & Vines in February, 2016 called Are You Sure You Need a Wine Bond? This article contained the following information.
On Dec. 18, 2015, President Barack Obama signed the Consolidated Appropriations Act. One section of the law included something called Protecting Americans from Tax Hikes Act of 2015 also known as PATH, which would take effect beginning with the calendar quarter that starts on January 1, 2017. This PATH act contained one section pertinent to people in the wine industry:

• excise tax due dates
• bond requirements
• definition of wine eligible for the “hard cider” tax rate

One take home message from reading this article for us is that under the TTB basic winery permit, we may qualify for the small producers tax credit (SPTC), if we "removed" less than 100,000 gallons of wine. Under that condition, the excise tax rate would fall from $1.07 to $0.17 for wine with less than 14% alcohol.
The article seemed to raise a discrepancy when it came to the first bullet point, excise tax due dates, so I went right to the source: Summary of the PATH Act of 2015. In this summary, the part that pertains to wineries falls under Subtitle C – Additional Provisions, Section 332.
Section 332
Removal of bond requirements and extending filing periods for certain taxpayers with limited excise tax liability. The provision allows producers of alcohol that reasonably expect to be liable for not more than $50,000 per year in alcohol excise taxes to pay such taxes on a quarterly basis rather than twice per month (and those reasonably expecting to be liable for not more than $1,000 per year to pay such taxes annually, rather than on a quarterly basis). The provision also exempts such producers from bonding requirements with the IRS. The provision is effective 90 days after the date of enactment.