20 Mar Beer, wine, and spirits industries toast passage of GOP tax bill
A celebration took place after the passage of the Republican tax reform bill by Congress on Wednesday, December 20th. Some were more delighted than others, but specifically trade organizations representing the beer, wine, and distilled spirits industries were very pleased. They highlighted that a provision reducing excise taxes on the production of these alcoholic beverages would vastly advance growth within their industries.
Under the Craft Beverage Modernization and Tax Reform Act, included in the Republican tax bill, the Federal excise tax on beer will be lowered from $7.00 to $3.50 per barrel on the first 60,000 barrels for brewers producing less than 2 million barrels per year through 2019.
This new provision will save small brewers more than $142 million per year. The Brewers Association, a trade organization representing small and independent craft brewers, says that this “will allow America’s small brewers — who are manufacturers and entrepreneurs — to reinvest in their businesses, expand their operations, and hire more workers.”
Sens. Rob Portman, R-Ohio, and Roy Blunt, R-Mo. and Reps. Peter DeFazio, D-Ore., and Mike Kelly, R-Pa. were personally thanked on Twitter by The Beer Institute, a group that represents American brewers, beer importers, and beer industry suppliers. The Beer Institute saluted them for their stern leadership in the bipartisan effort to include federal excise tax relief in the tax bill.
Many other groups representing the wine and distilled spirits industries also rejoiced in celebration after the passing of the new tax reform bill. The Distilled Spirits Council in particular, who represent producers and marketers of distilled spirits in the United States, issued a press release stating the benefits of the legislation. It “reduces the Federal excise tax on distilled spirits producers for the first time since the Civil War, which will enable more than 1,300 operating distilleries nationwide to re-invest in their businesses and stimulate job growth in their communities.” The tax bill also “creates a more equitable tax structure for distillers, brewers, winemakers and importers of beverage alcohol by equalizing the Federal excise tax on spirits, beer and wine for the first 100,000 proof gallons.”
The Craft Beverage Modernization and Tax Reform Act creates a tiered excise tax rate for distilled spirits, a big shift from the current flat $13.50 rate. The rate of tax is now lowered to $2.70 per proof gallon on the first 100,000 proof gallons of distilled spirits, $13.34 for all proof gallons more than that amount but less than 22,130,000 proof gallons, and $13.50 for amounts greater.
And not to be forgotten, the American wine industry also commended the addition of excise tax relief in the new tax bill. The Wine Institute, a group that represents more than 1,000 California wineries and affiliated organizations responsible for 85 percent of the nation’s wine production, issued a press release calling the tax bill “the first reduction in wine excise taxes in over 80 years and only the second reduction in the nation’s history.” The group highlighted that the legislation would stimulate growth in wineries across the nation, “most of which are small and family owned.”
“These changes will allow our member wineries to further invest in their businesses, which in turn generates substantial benefits for local communities in the form of jobs, tax revenue and support for the hospitality industry,” said Steve Lohr, Chairman of The Wine Institute and CEO of J. Lohr Vineyards & Wines.