We commend Senator Portman and the Senate Finance Committee for recognizing the excessive tax burden faced by the more than 1,200 operating distilleries nationwide, as well as the important role distilleries of all sizes play in generating jobs, supporting agriculture and boosting tourism.
With more than half the cost of a typical bottle of spirits resulting from taxes and fees, a reduction in the federal excise tax will stimulate further investment and job creation in communities across the country.
This common-sense and much-needed amendment is widely supported by nearly 300 cosponsors in the House and 54 in the Senate. We will work with the other Senate cosponsors to ensure that this amendment is included in the final bill that passes the Senate.
The Council and its members have lobbied to support the tax cut legislation in an alcohol producers coalition that includes Beer Institute, Brewers Association, Wine Institute, WineAmerica and the American Craft Spirits Association.
Joint coalition letter sent to the Senate Finance Committee in support of the two-year tax cut contained in the Portman Amendment.
Background:The current Federal Excise Tax (FET) levied on distilled spirits is $13.50 per proof gallon, and the distilled spirits sector paid over $5.5. billion in FET in 2016 alone. This is a unique and excessive tax burden on the industry.
The “Craft Beverage Modernization and Tax Reform Act” (H.R. 747/S.236), introduced by Representatives Erik Paulsen (R-MN-03) and Ron Kind (D-WI-03) and Senators Ron Wyden (D-OR) and Roy Blunt (R-MO) creates a more fair and equitable tax structure for brewers, winemakers, distillers and importers of all beverage alcohol.
Fifty-four percent of the price of a typical bottle of distilled spirits is consumed by taxes and fees. This bill reforms the federal excise tax on spirits 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 Distilled Spirits Council is the national trade association representing producers and marketers of distilled spirits sold in the United States.