Source: https://www.federalregister.gov/documents/2012/12/07/2012-29488/small-brewers-bond-reduction
Timestamp: 2018-04-21 12:46:27
Document Index: 561582892

Matched Legal Cases: ['§\u200925', '§\u200925', '§\u200925', '§\u200925', '§\u200925', '§\u200925']

Federal Register :: Small Brewers Bond Reduction
A Rule by the Alcohol and Tobacco Tax and Trade Bureau on 12/07/2012
72939-72941 (3 pages)
https://www.federalregister.gov/d/2012-29488 https://www.federalregister.gov/d/2012-29488
Penal sum amounts of the brewer's bond are set forth in 27 CFR 25.93. For brewers filing tax returns and paying tax semimonthly, the penal sum of the bond must be equal to 10 percent of the maximum amount of tax that the brewer will become liable to pay during the calendar year. For brewers filing tax returns and paying tax quarterly, the penal sum of the bond must be equal to 29 percent of the maximum amount of tax which the brewer will become liable to pay during the calendar year. Under § 25.93(c), the minimum bond amount is set at $1,000 and the maximum bond amount is $500,000.
The effect of § 25.93 is that a brewer who files returns quarterly instead of semimonthly may have to increase its bond coverage. For example, a small brewer with an annual Federal excise tax liability of $40,000 per year who files returns semimonthly must obtain bond coverage of $4,000 (10 percent of $40,000). If the same small brewer opts to file its tax returns quarterly rather than semimonthly, the brewer must increase its bond coverage to 29 percent of its maximum annual tax liability, which would result in a bond amount of $11,600.
The effect of § 25.93 also may mean that small brewers who want to file quarterly would be more than likely ineligible to obtain the minimum bond coverage under § 25.93(c). For example, a small brewer with an annual Federal excise tax liability of $7,000 would have a semimonthly tax liability of less than $300 and would need to obtain only the minimum bond coverage of $1,000. If the same brewer opted to file returns quarterly rather than semimonthly, the quarterly tax liability would be $1,750, making the brewer ineligible for the minimum bond. Instead, the brewer must increase its bond coverage to 29 percent of its maximum annual tax liability, which would be $2,030.
2. Amend § 25.93 by:
a. Amending paragraph (a)(2) by removing the word “For” in the first sentence after the heading and replacing it with the words “Except as provided in paragraph (a)(3) of this section, for”; and
(3) Exception. For a period of three years beginning December 7, 2012 for brewers filing tax returns and remitting taxes quarterly under § 25.164(c)(2), the penal sum of the brewer's bond is $1,000 on beer: