For several years, craft distillers across the country have been fighting for the passage of federal legislation that would bring federal excise tax parity and reduction to this nation’s growing craft distillery movement. This April, we came close to getting an amendment included in the Federal Aviation Appropriations Bill that would accomplish this objective. While that amendment, the Craft Beverage Modernization and Tax Reform Act, was discarded along with a slew of other tax-related amendments, the fight for this reformation continues.
Why is Federal Excise Tax parity and reduction important to craft distillers? Simply put, the proposal is to reduce the excise tax from $13.50 per proof gallon to $2.70 per proof gallon for the first 100,000 proof gallons produced at a distillery. As a craft distiller, we must pay $13.50 per proof gallon of the spirits we make. That is in addition to state excise taxes and any sales tax that consumers pay. By reducing the Federal Excise Tax to $2.70 per proof gallon, small distillers will be able to redirect monies that would have gone to the government to the purchasing of more equipment, upgrading facilities and employing more workers. The proposed reduction will be a major economic boost for this growing industry.
Why is a reduction in the Federal Excise Tax important to consumers? Well, of course all of the reasons set forth above will benefit local economies and help consumers indirectly. But there is also a direct impact on consumers. Much of what consumers pay for a bottle of spirits is comprised of federal and state tax. By reducing the Federal Excise Tax, consumers may see a reduction in price points for craft spirits!
Supporting proposed legislation to reduce the Federal Excise Tax for craft distillers will boost local economies, save consumer’s money and result in more spirits for us all to experience and enjoy. Please take a moment to reach out to your federal representatives and voice your support for this important tax reform.
You can contact your representatives through the links below.
Co-founder of Murray's Fools Distilling Co. | Altona. NY