1SYNC, a provider of data synchronization services and a subsidiary of global standards group GS1 US, has incorporated the newly-approved standard, the Beverage Country of Bottling attribute, into its data pool solution. This new feature is designed to provide the alcohol beverage industry with greater accuracy in determining tax assessments on distilled spirits. Due to changes in federal tax regulations on domestic and imported spirits, this new data synchronization feature has the potential to generate millions of dollars in tax credit savings annually for liquor distributors.
With the introduction of a newly-ratified GSMP (Global Standard Management Process) standard attribute called the Beverage Country of Bottling, manufacturers and distributors utilizing data synchronization can more easily identify where the spirit was bottled. This attribute will give the alcohol beverage industry a standardized way to identify domestic and imported spirits, synchronize this information between manufacturer and wholesaler, and determine proper taxes accordingly.
Historically, imported alcohol beverage spirit products had an unfair price advantage over comparable products that were produced domestically. Federal excise taxes are required to be paid at the point of purchase by the wholesalers, while the federal excise taxes paid on imported goods could be deferred until after the date the product is actually sold. With the enactment of the Domestic Spirits Tax Equity Act (H.R. 1987, S. 2047), this new law gives qualified wholesalers a tax credit on domestic spirits roughly equal to the excise tax financing charges they incur, which is approximately 20 cents per case.
According to the Distilled Spirits Council of the United States (DISCUS), roughly 170 million cases of spirits were sold in the U.S., with 130 million cases eligible for the tax credit (100 million cases of domestic production and 30 million cases of imported spirits bottled in the U.S.) providing a total industry tax credit of $26 million. However, current systems have made it difficult for wholesalers to identify the 30 million cases of imported spirits bottled in the U.S., which could result in a failure to claim $6 million in tax credits. By utilizing the Beverage Country of Bottling attribute in data synchronization, wholesalers will be able to identify spirits that are eligible for this tax credit.
Bobby Burg, senior vice president and CIO of Southern Wines and Spirits of America, one of the nation’s largest wine and spirits distributors, says, “One of the great values of the entire data synchronization initiative is that when laws and regulations change, we now have a solution that gives our industry the data accuracy and system agility we need to move forward. The recent changes to the federal statutes regarding tax interest credits and the Beverage Country of Bottling attribute is another demonstration of the many ways data synchronization can help business.”