Statement by Distilled Spirits Council President & CEO Chris Swonger on
Inclusion of the Craft Beverage Modernization & Tax Reform Act in the Year-End Legislative Package Making Permanent the Federal Excise Tax Reduction for Distillers
“This is a huge sigh of relief for struggling craft distillers who have been on pins and needles awaiting the outcome of these discussions. While not yet a done deal, making the reduced tax rates permanent will serve as an economic lifeline for beleaguered small distilleries that have had their tasting rooms shut down for months. We will continue to urge Congress to pass this critical piece of legislation, which will protect jobs, boost communities and get these small businesses back on a path of stability and growth.”
The Craft Beverage Modernization & Tax Reform Act of 2019 (S.362/H.R.1175), introduced by Senators Ron Wyden (D-Ore.) and Roy Blunt (R-Mo.) and by Representatives Ron Kind (D-Wis.) and Mike Kelly (R-Pa.), includes reforms enacted in 2017 that create a fair and equitable tax structure for brewers, winemakers, distillers and importers of all beverage alcohol. The tax reduction was renewed for 1 year in 2019 and was set to expire on Dec. 31, 2020.
Under the Act, distillers pay a reduced excise tax rate of $2.70 per proof gallon for the first 100,000 proof gallons of distilled spirits (most craft distillers fall into this category); a rate of $13.34 per proof gallon for the next 22,130,000 proof gallons of distilled spirits; and a rate of $13.50 per proof gallon for production in excess of 22,230,000 proof gallons.