Tax Class Code Update

Since the enactment of the CIDER Act, the cider tax rate applies to products that are under 8.5% ABV, under 0.64 gram of carbon dioxide per 100 milliliters and contain no other fruit than apples or pears. Until very recently, the TTB was requiring a tax class code on all products eligible for the hard cider tax rate. These requirements were part of temporary rules that were put in place in reaction to the expansion of the product types eligible for the reduced rate. They mandated that the code “Tax class 5041(b)(6)” be on the packaging of hard cider tax rate product. These rules have now expired–the reduced tax rate remains.

For now, the TTB is not mandating the use of the statement “Tax class 5041(b)(6).” Nevertheless, the regulations do say that all wines (including cider and fruit cider, all ABVs) must be labeled with enough information for TTB to identify the correct tax class.

“Using ‘Tax class 5041(b)(6)’ will meet that requirement, so no one has to change their label unless they choose to,” said Susan Evans, TTB Director, Office of Industry and State Outreach in an email to the Association.

In the absence of the statement of the Tax class 5041(b)(6), the label must provide enough information for the TTB to know that the product is under 8.5% ABV, under 0.64 gram of carbon dioxide per 100 milliliters and contains no other fruit than apples or pears.

We anticipate that the code requirement will return when the permanent rules are released, and will keep our members informed of such news.