Bill to Slash Craft Beverage Taxes Nets Key Senate Support

By Neat Pour Staff |

These days, partisanship is at an all time high inside the Beltway. However, it looks like Americans from across the political spectrum can rally around a shared love of craft spirits, wines, and beers. On Thursday (10.20), the Craft Beverage Modernization and Tax Reform Act (S. 236) (CBMTRA).received a crucial 51st official endorsement from Senator Jim Inhofe (R-OK) meaning the federal excise tax on your favorite craft drinks will likely drop significantly.

“Wine is truly an all-American beverage produced in all 50 states. There are now more than 10,000 wineries with grapes from over 670,000 acres preserving precious agricultural land, The American wine industry’s total economic impact of nearly $220 billion includes 1.7 million jobs and $75 billion in wages,” said Jim Trezise, President of WineAmerica, the national association of American wineries. “We are grateful that so many Senators see wine as an economic engine as well as a delightful beverage that enhances the quality of life.”

Bill S.236 was introduced by Senators Ron Wyden (D-OR) and Roy Blunt (R-MO) in January. On the same day, Representatives Erik Paulsen (R-MN) and Ron Kind (D-WI) proposed H.R.747 in the House. The legislation aims to cut the federal excise tax on small manufacturers. For example, the current $7 per barrel fee would be reduced down to $3.50 per barrel on the first 60,000 barrels for domestic brewers making fewer than two million barrels. Brewers making less than six million barrels would be taxed at $16 a barrel, down from $18. On the spirits side, small distillers would see their tax slashed from $13.50 per proof gallon to $2.70.

The bill boasts 51 bipartisan cosponsors in the Senate and 281 bipartisan cosponsors in the House. However, not everyone in the industry will benefit from the bill. Large producers will see zero reductions. For example, beer manufacturers making over six millions barrels annually will still be charged the existing $18 a barrel fee. The exclusion only serves to extreme already simmering tensions between the industry’s two poles. (See #TakeCraftBack.)

Nonetheless, the measure garnered statements of adulation from every major domestic craft organization including the Beer Institute, Brewers Association, Distilled Spirits Council of the United States, Wine Institute and WineAmerica.

“As the distilling sector continues its growth with more than 1,200 operating distilleries nationwide, lawmakers clearly appreciate the important role these distilleries play in creating jobs, boosting tourism and supporting agriculture,” said Distilled Spirits Council President & CEO Kraig R. Naasz. “Passing this much-needed tax reform legislation will spur further investment and job creation by reducing the excessive tax burden on distillers small and large.”

The next step for the measure will be votes in both chambers. Given the overwhelming support, these are expected to be formalities. Then, the CBMTRA will be sent over to 1600 Pennsylvania Ave. for a final signature.

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