The Craft Beverage Modernization and Tax Reform Act is set to be made permanent after Congress included the tax cut in its year-end funding legislation package to help businesses recover from the pandemic.
Senate finance committee ranking member Ron Wyden, who sponsored the bill’s reading in Congress, said in a statement yesterday (20 December) that the Craft Beverage Modernization and Tax Reform Act (CMTRA) for distillers will be made permanent. The move comes 12 months after the tax cut gained a one-year extension and was due to expire on 31 December 2020.
The tax cut was first introduced in 2017 and sees distillers pay US$2.70 per proof gallon for the first 100,000 gallons produced in the calendar year. Previously, distilled spirits were taxed at US$13.50 per proof gallon.
Earlier this month, a coalition of trade groups called for an extension of the act.
In a statement, Wyden said: “Our agreement addresses expiring tax provisions that are critical for families, small businesses and our clean energy future.
“In major wins for Oregon, tax incentives I developed for craft brewers, vintners and distillers are made permanent, and the low-income housing tax credit is expanded to help our state recover from this year’s catastrophic wildfires.
“I’ve seen first-hand how incentives for craft beverage producers have helped Oregon small businesses grow, hire and provide new benefits to their workers. Extending these breaks is especially important given how hard the pandemic has hit these small businesses.”
The decision to extend the tax cut for distillers has been welcomed by trade body the Distilled Spirits Council of the US (Discus), which said the decision provided an ‘economic lifeline’ for businesses.
In a statement, Discus said: “This is a huge sigh of relief for struggling craft distillers who have been on pins and needles awaiting the outcome of these discussions.
“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.”
Both chambers of Congress are due to vote on passing the comprehensive package today (21 December).
Via News – The Spirits Business