As a difficult 2020 concludes, distilleries across America have reason for holiday cheer.
U.S. Congress will vote to make permanent the Craft Beverage Modernization & Tax Reform Act, as part of end-of-year legislation.
First passed in 2017, this reform intends to create a fair and equitable tax structure for brewers, winemakers, distillers and importers of all beverage alcohol. Before 2017, distillers had protested that their excise tax requirements were unreasonably higher than other segments of the industry.
Under the act, distillers pay a reduced excise tax rate of $2.70 per proof gallon for the first 100,000 proof gallons of distilled spirits (most craft distillers fall into this category); a rate of $13.34 per proof gallon for the next 22,130,000 proof gallons of distilled spirits; and a rate of $13.50 per proof gallon for production in excess of 22,230,000 proof gallons.
The tax reduction was renewed for one year in 2019, and was set to expire on Dec. 31, 2020.
U.S. distillers in recent months had raised the alarm over Congress not extending this act. Distillers warned that without the tax reduction, the spirits industry would face ruinous financial hardship.
“This is a huge sigh of relief for struggling craft distillers who have been on pins and needles awaiting the outcome of these discussions,” says Distilled Spirits Council President & CEO Chris Swonger, in a release. “While not yet a done deal, making the reduced tax rates permanent will serve as an economic lifeline for beleaguered small distilleries that have had their tasting rooms shut down for months.”
“We will continue to urge Congress to pass this critical piece of legislation, which will protect jobs, boost communities and get these small businesses back on a path of stability and growth,” he adds.
Congress is expected to vote on the broader end-of-year bill today, before sending the legislation to the White House for President Trump’s approval.
The post Excise Tax Reduction for Distillers Set for Permanent Extension first appeared on Beverage Dynamics.
Via Spirits – Beverage Dynamics