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The current federal excise tax rates, how the reduced CBMA rates work, and the one rule that trips up distillers: why bottling bulk spirits won't get you the lower rate.
Select a commodity to see the full rate, the reduced CBMA rates, and who qualifies. Rates shown are federal only, states impose their own excise taxes on top.
| Who / Production Level | First 60,000 bblper barrel | 60,001 – 2M bblper barrel | General Rateper barrel |
|---|---|---|---|
| Domestic brewer, 2M barrels or less/yrProduced by the brewer | $3.50 | $16.00 | — |
| Brewer over 2M bbl/yr, or electing importerFirst 6,000,000 bbl at reduced rate | $16.00 (first 6M bbl) | — | |
| General rateBrewer who didn't produce it, unassigned importer, or exhausted entitlement | $18.00 | ||
Barrel = 31 gallons. Reduced rates apply to beer a brewer actually produced. Rates can be limited by controlled-group or single-taxpayer rules.
| Wine Tax Class | Base Rateper wine gallon | Effective, first 30,000 galafter credit | Effective, 30k–130k galafter credit |
|---|---|---|---|
| Still wine, 16% ABV and under | $1.07 | $0.07 | $0.17 |
| Still wine, over 16–21% ABV | $1.57 | $0.57 | $0.67 |
| Still wine, over 21–24% ABV | $3.15 | $2.15 | $2.25 |
| Sparkling wineNaturally carbonated | $3.40 | $2.40 | $2.50 |
| Artificially carbonated wine | $3.30 | $2.30 | $2.40 |
| Hard cider | $0.226 | $0.164 | $0.17 |
| Mead / low-ABV wineUnder 8.5% ABV, qualifying | $1.07 | $0.07 | $0.17 |
Wine uses tax credits, not separate reduced rates. Domestic producers get $1.00/gal credit on the first 30,000 gallons, 90¢ on the next 100,000, and 53.5¢ on the next 620,000, which produces the low effective rates shown. Hard cider and mead use smaller credits. A further tier (over 130,000 up to 750,000 gal) applies a 53.5¢ credit.
| Who / Production Level | First 100,000 PGper proof gallon | 100k – 22.23M PGper proof gallon | General Rateper proof gallon |
|---|---|---|---|
| DSP that distilled OR processed the spiritsProcessing must be more than bottling (since 2022) | $2.70 | $13.34 | — |
| General rateSpirits you didn't distill or process, or processed only by bottling; unassigned importers; exhausted entitlement | $13.50 | ||
Proof gallon = one liquid gallon at 100 proof (50% ABV). The jump from $2.70 to $13.50 is the single biggest reduced-rate opportunity in beverage alcohol, but for spirits, simply bottling bulk spirits does not qualify. See the processing rules below.
Estimate your annual federal excise tax across the tiered CBMA brackets for beer, wine, or spirits, and see what qualifying for the reduced rate is worth. An estimate, not tax advice.
Estimate using current federal rates and CBMA tiers. Wine is calculated using the credit method. Actual liability depends on product class, controlled-group limits, spirits processing eligibility, and state excise taxes not included here. We calculate it precisely, get in touch.
The reduced distilled spirits rate, $2.70 per proof gallon on the first 100,000 versus the full $13.50, is the largest reduced-rate opportunity in beverage alcohol. But it comes with a condition that catches a lot of new operations off guard.
Since January 1, 2022, bottling alone does not count as processing. A distilled spirit is not treated as "processed" for reduced-rate purposes unless a processing activity other than bottling is performed. If you buy bulk spirits and simply bottle them, those removals are taxed at the full $13.50 per proof gallon, not the reduced $2.70. That's a difference of $10.80 on every proof gallon.
Getting this wrong runs both directions. Claim the reduced rate when you only bottled, and you owe back taxes, interest, and penalties when the TTB reviews your filings. Pay the full rate when you actually qualify, and you overpay by up to $10.80 on every proof gallon. We help distillers document qualifying processing correctly and claim exactly the rate they're entitled to.
Review My Tax Position →Common questions about federal alcohol excise tax rates and qualifying for reduced rates.
Federal excise tax is charged per barrel of beer, per wine gallon of wine, and per proof gallon of distilled spirits. The general rates are $18.00 per barrel of beer, $1.07 per gallon for most still wine, and $13.50 per proof gallon of spirits. Reduced rates and credits under the Craft Beverage Modernization Act (CBMA) can lower these substantially for qualifying producers, for example, $3.50 per barrel on a brewer's first 60,000 barrels, or $2.70 per proof gallon on a distiller's first 100,000 proof gallons.
These are the units federal excise tax is measured in. A barrel of beer is 31 gallons. A wine gallon is one liquid gallon of wine. A proof gallon is one liquid gallon of spirits at 100 proof (50% alcohol by volume), so a gallon at 80 proof counts as 0.8 proof gallons. Getting these measurements and the resulting tax right is a core part of excise tax compliance.
To take the reduced spirits rate ($2.70 per proof gallon on the first 100,000), your DSP must have distilled or processed the spirits, and since January 1, 2022, processing must be something other than bottling. Simply bottling bulk spirits you bought does not qualify, those removals are taxed at the full $13.50 rate. Qualifying processing includes activities like mixing spirits with flavors, wine, or water beyond what's needed for bottling proof, redistilling, or otherwise manufacturing the product. This distinction catches many new operations by surprise.
Before 2022, bottling counted as processing, so companies could buy bulk spirits, bottle them, and claim the reduced rate. Congress changed that. Effective January 1, 2022, a distilled spirit is not treated as "processed" for reduced-rate purposes unless a processing activity other than bottling is performed. The result: if your only activity is bottling sourced bulk spirits, you owe the full $13.50 per proof gallon, not $2.70. If you perform genuine processing, you may qualify. We help distillers structure operations so qualifying activity is documented correctly.
Wine works through tax credits rather than separate reduced rates. Domestic wine producers receive a credit of $1.00 per gallon on the first 30,000 gallons, 90¢ on the next 100,000, and 53.5¢ on the next 620,000. Applied against the base rate, that brings the effective rate on most still wine down to about $0.07 per gallon on the first 30,000 gallons. Credits can also be transferred in specific circumstances, and eligibility can be limited by common ownership.
CBMA is the federal law (made permanent in 2020) that created reduced excise tax rates and credits for beer, wine, and spirits producers, with the biggest benefits aimed at smaller producers. It's why a small brewer pays $3.50 rather than $18.00 per barrel, and a distiller pays $2.70 rather than $13.50 per proof gallon on qualifying removals. CBMA also sets the conditions, including the spirits processing requirement and controlled-group limits, that determine whether you actually qualify.
Not separately in most cases. Reduced rates and credits are limited across a controlled group or a single taxpayer arrangement, meaning commonly owned businesses generally share one set of reduced-rate quantities rather than each getting a full allotment. Structuring ownership without accounting for these rules can lead to overclaiming and back taxes. We help clients understand how the controlled-group rules apply to their situation.
Since 2023, importers pay the full tax rate up front, then file quarterly refund claims with the TTB to receive assigned CBMA benefits. Critically, the foreign producer must register with the TTB and assign its reduced-rate benefit to the importer electronically before a claim can be made. The process is administratively involved, and many importers leave money on the table by not navigating it correctly. We help importers capture the benefits they're entitled to.
Excise tax errors, whether overpaying or underpaying, are common and consequential. Underpaying can lead to back taxes, interest, and penalties when the TTB reviews your filings; overpaying simply costs you money you didn't owe. Because the reduced-rate rules have specific conditions, mistakes often trace back to claiming a rate you didn't qualify for or missing a credit you did. We handle excise tax calculation and filing so it's right, and we can review prior filings for errors.