Tax Class Statement Required on Hard Cider Labels

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.

The latest form for Tax Class Statement Required on Hard Cider Labels expires 2023-06-30 and can be found here.