Fermented Malt Beverage Excise Tax

The tax rate is based on the alcohol content as shown in the following table.

Fermented Malt Beverage

A fermented malt beverage is any beer, ale, or other beverage that meets all of the following requirements:

• Made from malt by fermentation
• Has an alcohol content, by volume, of at least 0.5% (one-half of 1%)

Flavored Malt Beverage

A flavored malt beverage is any fermented malt beverage that meets one of the following:

• It contains 6% or less alcohol by volume and derives at least 51% of its alcohol content from the fermentation of grain-derived carbohydrates. That is, 49% or less of the beverage’s overall alcohol content comes from flavors or other added ingredients that contain alcohol.
• It contains more than 6% alcohol by volume and 1.5% or less of its overall alcohol content comes from flavors and other ingredients that contain alcohol.

Note: Flavored malt beverages do not include cider or alcoholic beverages that are obtained primarily by the fermentation of rice (such as sake).

You must file a return and pay any tax due by the 18th of the month for the previous month. If you do not, we will assess penalty and interest. You must file the return even if you had no sales to report.

If your monthly tax liability is minimal, contact us to see if you qualify for a different filing frequency.

Accelerated Payment 

If your alcohol tax liability was $250,000 or more during a fiscal year ending June 30, you must accelerate your June liability for the next year. (Go to Accelerated Payment on Alcoholic Beverage Tax.)

You can file:

• Electronically through our e-Services system (go to File Alcoholic Beverage Tax Electronically)
• On paper using:
  • Form LB40, Fermented Malt Beverages Excise Tax Return (wholesalers and importers)
  • Form LB41, Excise Tax Return for Brewers (brewers)

You can pay this tax:

• Electronically through e-Services, Automated Clearing House (ACH) credit, or debit or credit card
• By check using a payment voucher, unless your business is required to pay electronically (go to Electronic Payment for Business for requirements) 

Go to Make a Payment for more information.

The Minnesota tax rate for fermented malt beverage is based on the 31-gallon barrel. You must convert all measurement of kegs and cases into barrels or percentages of a barrel.

To convert kegs and cases into barrels, divide the total ounces of fermented malt beverage in the kegs or cases by 3,968.

• 1 barrel = 31 gallons
• 1 gallon = 128 fluid ounces
• 1 liter = 0.264172 gallon

This conversion table shows the most common sizes of cases and kegs. Multiply the number of each product by the decimal shown.

Brewers who produce less than 250,000 barrels of fermented malt beverage in a calendar year qualify for the Brewer Credit. For more information, go to Brewer Credit and Annual Production Report.