The CBMA Wine Tax Credit, Explained
The Craft Beverage Modernization Act (CBMA) credit cuts the federal excise tax on still wine at 16% ABV or less from a base rate of $1.07 per gallon down to $0.07 per gallon on the first 30,000 gallons a winery removes from bond each calendar year, with two more tiers stepping the rate up as volume grows. The credit is permanent, applies automatically when you file Form 5000.24, and requires no separate application for domestic producers. Its limit is not per label or per bond, it is per controlled group: commonly owned wineries share one set of volume tiers, and a related single taxpayer rule can pull in producers who share a brand or production arrangement even without common ownership. Below is exactly how the tiers work and where the limits actually bind.
What is the CBMA wine tax credit?
The Craft Beverage Modernization Act, first enacted in 2018 and made permanent by the Taxpayer Certainty and Disaster Tax Relief Act of 2020, gives wine producers a tiered credit against the federal excise tax owed on wine removed from bond for domestic sale, per the TTB's CBMA guidance (ttb.gov). It does not change the statutory tax rate itself, which still sits at $1.07 per gallon for still wine at 16% ABV or less. Instead, it lets you subtract a credit per gallon on Schedule B of your excise tax return, which lowers your effective rate for a limited quantity each year.
The mechanism resets on a calendar year basis. Every January 1, your cumulative gallon count for CBMA purposes starts back at zero, and the tiers below apply to gallons removed during that calendar year specifically, not a rolling twelve months.
What are the CBMA credit tiers for 2026?
For still wine at 16% ABV or less, the credit steps down as cumulative annual volume increases:
| Gallons removed per calendar year | CBMA credit per gallon | Effective tax rate |
|---|---|---|
| First 30,000 | $1.00 | $0.07 |
| Over 30,000, up to 130,000 | $0.90 | $0.17 |
| Over 130,000, up to 750,000 | $0.535 | $0.535 |
| Over 750,000 | None | $1.07 (full base rate) |
The practical effect for a small or mid-size winery is significant. A winery removing 25,000 gallons in a year pays roughly $0.07 a gallon on all of it, instead of $1.07, simply by staying under the first tier. Cross into the second tier partway through the year, and only the gallons above 30,000 step down to the $0.90 credit; the first 30,000 keep their full $1.00 credit regardless of what happens later in the year. This is a marginal-rate structure, not a cliff.
Other tax classes, sparkling wine and higher ABV still wine among them, have their own base rates and their own credit interactions, so confirm the applicable class before assuming these exact figures transfer over.
How do I claim the credit on Form 5000.24?
For a domestic producer, there is no separate CBMA application or enrollment step. Form 5000.24 computes your total gross excise tax liability on Line 10, based on gallons removed at the statutory base rate. Adjustments that reduce that liability, including your CBMA credit, go on Schedule B; the net result after Schedule B is the amount actually due with the return. As long as your cumulative removal gallons for the year are tracked accurately, the credit calculation itself is straightforward arithmetic against the tier table above.
This is different from the process foreign producers and importers use. Imported wine takes the CBMA benefit through a separate assignment and refund system administered by the TTB, where a foreign producer assigns its available credit quantity to specific importers, who then file quarterly refund claims. A domestic winery paying its own excise tax never touches that system; it applies the credit directly when filing.
How does the controlled group rule limit the credit?
The volume tiers are not granted per winery license or per bond, they are granted per controlled group, per TTB's CBMA guidance (ttb.gov). If two or more wineries are under common ownership, meeting the parent-subsidiary controlled group definition in the tax code, they share one 30,000 gallon first tier between them, not one each. A holding company that owns two labels does not get to run 30,000 gallons through each label at the top credit rate; the combined removals across both labels count against a single shared ladder.
This matters most for anyone planning a second label, a custom crush relationship with shared ownership, or an acquisition. The tax planning question is never "what does this new entity qualify for on its own," it is "what remains of the group's shared allowance once this entity's volume is added in."
What is the single taxpayer rule?
Separate from common ownership, the single taxpayer rule can group producers together even when they are not commonly owned. Per TTB guidance, two or more entities that produce wine under a shared brand, license, franchise, or similar arrangement are treated as a single taxpayer for CBMA purposes, whether or not they are under common control. This provision exists to prevent a single brand from splitting production across nominally separate entities purely to multiply the number of 30,000 gallon tiers it can claim.
For most independent wineries operating under their own name with no shared brand or licensing arrangement with another producer, this rule simply does not apply. It becomes relevant specifically for custom crush arrangements, contract production deals, and multi-entity brand structures where the branding or licensing relationship, not the ownership structure, is what would otherwise let volume be split across entities.
What does it take to track this correctly all year?
Getting the CBMA credit right on a single return is easy. Getting it right across every return in a calendar year, especially for a winery filing quarterly or monthly, requires a cumulative running total of taxpaid removals that never resets until the tier count says it should, on January 1. Miss that a mid-year removal pushed you past 30,000 gallons, and you either overclaim the credit on gallons that should have stepped down to the next tier, which is an underpayment the TTB will eventually catch, or you underclaim it out of caution and simply leave money on the table every filing period.
The controlled group and single taxpayer rules add a second layer: the running total that matters for the credit is not always your winery's total alone. If your entity is part of a controlled group or a shared-brand arrangement, the count that determines your tier is the group's combined total, which means whoever tracks the credit needs visibility into removals across every entity in that group, not just their own bond.
Frequently asked questions
Is the CBMA wine tax credit permanent?
Yes. The credit was introduced temporarily in 2018 under the Tax Cuts and Jobs Act, then made permanent by the Taxpayer Certainty and Disaster Tax Relief Act of 2020, per the TTB's CBMA guidance (ttb.gov). Wineries do not need to watch for an expiration date or re-authorization each year.
Do I need to apply for the CBMA credit separately?
No, if you are a domestic producer. You apply the credit directly on Schedule B of Form 5000.24 when you file your excise tax return; there is no separate application. Foreign producers and importers go through a different assignment and refund process entirely, which does not apply to a US winery paying its own tax.
What is the single taxpayer rule and does it apply to a small winery?
The single taxpayer rule treats two or more producers as one taxpayer for credit purposes if they produce wine under a shared brand, license, franchise, or similar arrangement, whether or not they are commonly owned. It mainly catches contract and alternating proprietorship arrangements. A single winery with no such arrangement is not affected; it applies to producers who share branding or production arrangements without necessarily sharing ownership.
Does the CBMA credit apply to wine sold within a controlled group?
The credit applies to taxable removals regardless of buyer, but the quantity limitation is what changes. All members of a parent-subsidiary controlled group share one set of volume tiers between them, so a second label under common ownership does not receive its own fresh 30,000 gallon allowance.
What tax class gets the full CBMA credit tiers described here?
Still wine at 16% ABV or less, the tax class most table wine falls into. Sparkling wine, higher ABV still wine, and other classes have their own base rates, and the credit interacts with those rates differently; always confirm the applicable class before assuming these exact dollar figures apply.
The credit rewards precision, not paperwork
The CBMA credit is one of the rare pieces of wine compliance that is unambiguously good news: real money back, permanent, no application. The entire difficulty is arithmetic discipline, keeping one running number correct across every filing period of the year, and knowing whether that number is yours alone or shared across a controlled group. Neither is hard in isolation. Both are easy to get quietly wrong in a spreadsheet that nobody double-checks between January and the annual inventory.
Solera tracks the CBMA gallon count as a byproduct of the taxpaid removals you already log in the TTB Compliance module, tier boundaries included, so Schedule B is correct by construction rather than reconstructed at filing time. It ships on every tier, including the free one.
This guide is informational and not legal or tax advice. Verify current CBMA rates, tiers, and controlled group determinations with the TTB or your tax counsel before filing.