Tax Package Temporarily Slashes Rates for Small Brewers, Distillers, Wineries

By Neat Pour Staff |

The tax bill (H.R. 1) just passed by the Senate is rife with controversial measures. However, at least one bipartisan element managed to make the legislation. An amendment will provide temporary cuts in the federal excise tax for small beer, wine, and liquor producers.

The addition, from Senator Rob Portman (R-OH) of the Senate Finance Committee, introduced key elements of the proposed Craft Beverage Modernization and Tax Reform Act (S. 236) bill (CBMTRA).into the massive tax legislation. Given that CBMTRA already boasted 51 bipartisan cosponsors in the Senate and 281 bipartisan cosponsors in the House, the inclusion was one of the less divisive events of the week.

“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,” previously stated 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.”

The legislative measures aim to cut the federal excise tax on small manufacturers for two years. 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. However, in 2020, these provision will expire unless new legislation is passed to cement the measures.

Big Beer was not included in the original CBMTRA, but they did benefit from tax bill, reaping about $12m in breaks. NPR reported that A-B InBev hired 19! lobbying firms to push their agenda in the new bill.

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