The Internal Revenue Code (IRC) at 26
U.S.C. 5041 imposes six Federal excise tax rates on wine based on a
wine's alcohol and carbon dioxide content, and the lowest of those
rates is the hard cider tax rate, which is listed in section
5041(b)(6). The IRC at 26 U.S.C. 5368(b) also provides that wine
can only be removed in containers bearing the marks and labels
evidencing compliance with chapter 51 of the IRC as the Secretary
of the Treasury may by regulation prescribe. Beginning January 1,
2017, section 335(a) of the Protecting Americans from Tax Hikes Act
of 2015 (PATH Act, Pub. L. 144–113) modified the definition of hard
cider in IRC section 5041(g) to broaden the range of products
eligible for the hard cider tax rate. However, under the authority
of the Federal Alcohol Administration Act (FAA Act), TTB’s wine
labeling regulations in 27 CFR part 4 allow the term “hard cider”
to appear on the labels of products that do not meet the IRC's
definition of “hard cider” for tax purposes. In light of that
difference, in order to adequately identify products eligible for
the hard cider tax rate, the TTB regulations in 27 CFR parts 24 and
27 require that the tax class statement, “Tax class 5041(b)(6),”
appear on containers of domestic and imported wines, respectively,
which are eligible for that tax rate. The placement of the hard
cider tax class statement on such wine labels is necessary to
protect the revenue as it evidences compliance with the IRC’s
statutory requirements and identifies products for which the
taxpayer is claiming the hard cider tax rate.
There are no program changes
associated with this information collection, and TTB is submitting
it for extension purposes only. As for adjustments, due to changes
in agency estimates resulting from continued growth in the number
of respondents producing wines eligible for the hard cider tax rate
as defined in the IRC, TTB is increasing the estimated number of
annual respondents, responses, and burden hours associated with
this information collection from 777 to 820 each.
On behalf of this Federal agency, I certify that
the collection of information encompassed by this request complies
with 5 CFR 1320.9 and the related provisions of 5 CFR
1320.8(b)(3).
The following is a summary of the topics, regarding
the proposed collection of information, that the certification
covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a
benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control
number;
If you are unable to certify compliance with any of
these provisions, identify the item by leaving the box unchecked
and explain the reason in the Supporting Statement.
1513-0138 Supporting Statement (04-2020).docx
Tax Class Statement Required on Hard Cider Labels