Taxes on Distilled Spirits
UPDATE: In December 2020, Congress enacted into law the Craft Beverage Modernization and Tax Reform Act and made the lower federal excise tax rates permanent!
The Craft Beverage Modernization and Tax Reform Act makes permanent the federal excise tax reduction that was first enacted in 2017 and extended for an additional year in 2019 through December 31, 2020. Small distillers across the United States have utilized the tax savings to make significant investments in their businesses, thereby supporting their local communities.
Small distillers are putting the federal excise tax reduction to work by:
- Hiring new staff.
- Purchasing new equipment, like stills.
- Providing healthcare and other benefits to staff.
- Increasing partnerships with local agricultural suppliers.
Without Congressional action, this federal excise tax reduction will expire at the end of 2020 and craft distillers will face a 400% increase in their federal excise taxes on the first 100,000 proof gallons – an increase from $2.70 per proof gallon to $13.50 per proof gallon.
Without tax certainty and permanency, small businesses across the country have difficulty planning for the future. The Distilled Spirits Council supports making permanent the reduced federal excise tax rates so craft distillers can reinvest in their businesses and their communities.
For more examples, check out these news articles:
- “Whiskey rebellion: Texas craft distillers are battling to keep a tax break that helped enable their brisk expansion,” by Sanford Nowlin, San Antonio Current, 12/19/2019
- “Nashville distillers push for tax cut extension; Congress must act by Friday,” by Jamie McGee, Tennessean, 12/18/2019
- “Whiskey distillers brace for 400% tax hike as lawmakers struggle to get anything done,” by Nicole Goodkind, Fortune, 12/17/2019
- “Liquor taxes could go up 400%, thanks to Congressional dysfunction,” by Clay Risen, New York Times, 12/16/2019
- “Craft distillers fight to preserve a valuable tax break,” by Shelly Brisbin, Texas Standard, 12/10/2019
- “Craft distilleries seek tax cut extension,” by Robert Lang, WBAL NewsRadio, 11/11/2019
- “Bipartisan booze? Congress eyes tax break extension,” by Mitchell Miller, WTOP, 9/6/2019
- “Craft distillers come to Capitol Hill to push modernization act,” by Brad Japhe, Forbes, 47/24/2019
- “Craft distillers, facing lower taxes, invest in themselves,” by Robert Simonson, New York Times, 4/23/2018
To learn more about how COVID-19 has affected distillers and the need for federal excise tax relief, check out these letters sent forward by state guilds:
- Joint Letter with Maine Distiller’s Guild (December 2020)
- Joint Letter with Oregon Distillers Guild (November 2020)
- Joint Letter with Arizona Craft Distillers Guild (November 2020)
- Joint Letter with Florida Craft Spirits Association (November 2020)
- Joint Letter with Georgia Distillers Guild (November 2020)
- Indiana Distillers’ Letter to Indiana Congressional Delegation (November 2020)
- Utah Distillers’ Letter to Utah Congressional Delegation (October 2020)
- Joint Letter with Missouri Craft Distillers’ Guild (October 2020)
- Joint Letter with Illinois Craft Distillers Association (October 2020)
- Joint Letter with Washington Distillers Guild (August 2020)
- Joint Letter with Idaho Distillers Association (August 2020)
- Joint letter with Montana Distiller’s Guild (August 2020)
- Joint letter with Distilled Spirits Council of Vermont (August 2020)
- Joint letter with Michigan Craft Distillers Association (August 2020)
- Joint Letter with Louisiana Distillers Guild (August 2020)
- Joint Letter with Alabama Craft Distillers Association (July 2020)
- Joint Letter with South Carolina Craft Distillers Guild (July 2020)
- Joint Letter with Connecticut Spirits Trail (July 2020)
- Joint Letter with the New Jersey Craft Distiller’s Guild (July 2020)
- Joint Letter with the Wisconsin Distillers Guild (June 2020)
- Joint Letter with the Florida Craft Distillers Guild (June 2020)
- Joint Letter with the Ohio Distillers Guild (May 2020)
- Joint Letter with Texas Distilled Spirits Association and Texas Whiskey Association (May 2020)
- Joint Letter with California Artisanal Distillers Guild (May 2020)
- Joint Letter with the Distillers Association of North Carolina (May 2020)
- Joint Letter with the Maryland Distillers Guild (May 2020)
- Joint Letter with the Tennessee Distillers Guild (May 2020)
- Joint Letter with the New York State Distillers Guild (April 2020)
- Joint Letter with Virginia Distillers Association (April 2020)
And to learn more about the Craft Beverage Modernization and Tax Reform Act, view our resources below.
What Distillers Are Saying
According to Dan Garrison of Garrison Brothers Distillery in Austin, Texas, the tax cut has resulted in opportunities to invest in their distillery: “The Craft Beverage Modernization and Tax Reform Act enabled my business to grow from 11 to 40 employees over the past few years. Additionally, we were able to acquire one of the largest custom-built potstills in North America. Finally, distilled spirits producers are now taxed on par with wineries and breweries. If this legislation is not permanently renewed, it will be devastating for our industry.”
Tom Lix of Cleveland Whiskey in Cleveland, Ohio, echoed the sentiment: “Continuing the federal excise tax reduction is essential to continuing our plans for expansion here at Cleveland Whiskey. We’re designing a new and significantly expanded facility, intend to double our staff and make some serious technology investments and it’s the tax savings that allow us to grow.”
“The federal excise tax reduction has had a tremendous impact on the way we’re able to do business at our American Single Malt whisky distillery. We’re in the midst of launching our new Courage & Conviction whisky line and the ability to direct these dollars to efforts that grow the brand, like funding market managers in important markets and investing in capital expenditures to support the growing demand our products are seeing, has been key,” added Gareth Moore of Virginia Distillery Company in Lovingston, Virginia.
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!
How You Can Help
Spirits United is a community of advocates united with a common goal to ensure adult consumers can enjoy distilled spirits where they want, how they want, and when they want. Spirits United brings together professionals in the distilled spirits industry, partners, customers and consumers.