Federal Issues

Taxes on Distilled Spirits

The current Federal Excise Tax (FET) levied on distilled spirits is a whopping $13.50 per proof gallon, and the distilled spirits sector paid over $6 billion in FET in 2018 alone.  This is a unique and excessive tax burden on the industry.

DISCUS strongly supported a two-year version of the “Craft Beverage Modernization and Tax Reform Act” that was included in the tax reform package passed in December 2017.  The bill creates a more fair and equitable tax structure for brewers, winemakers, distillers and importers of all beverage alcohol.  The Council is now focused on ensuring the lower rates are extended or made permanent, and advocates that members of Congress support the “Craft Beverage Modernization and Tax Reform Act (H.R. 1175/S.362 in the 116th Congress.)   

Fifty-four percent of the price of a typical bottle of distilled spirits is consumed by taxes and fees.  The bill reforms the FET by:

  • Establishing a reduced rate of $2.70 per proof gallon for the first 100,000 proof gallons of distilled spirits produced or imported annually for spirits.
  • Establishing a rate of $13.34 per proof gallon for the next 22,130,000 proof gallons of distilled spirits.
  • Keeping the excise tax rate of $13.50 per proof gallon for production in excess of 22,230,000 proof gallons.

These rates would apply to both domestic producers and importers of distilled spirits, regardless of size, and would mark the first time that taxes on distilled spirits were reduced since the Civil War.

The Council is working with distillers and champions on Capitol Hill to ensure the two-year version of the “Craft Beverage Modernization Tax Reform Act” is extended or made permanent. 

Distilled Spirits Council Statement on Senate Passage of Tax Reform

The Distilled Spirits Council commends Senate Majority Leader Mitch McConnell, Finance Committee Chairman Orrin Hatch and their colleagues for their efforts to enact comprehensive tax reform.


Join Our Efforts

The Distilled Spirits Council Political Action Committee (DISPAC) has promoted the election of pro-business candidates across the United States since 1993. DISPAC exists to help fund the races of candidates and incumbents on both sides of the aisle who support distilled spirits producers and importers. Your voluntary contributions are critical to our role in the political process and have helped us establish our strong political backbone for decades.  The threat of taxation and additional regulatory burdens are always looming so please consider joining our efforts today!

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