Craft Beverage Bill Gets Majority Support In Congress

WASHINGTON — Legislation pending before Congress to recalibrate the current federal excise tax structure for the nation’s craft brewers and distillers has gained a majority of supporters in both the U.S. Senate and House of Representatives, according to several industry groups.

The Craft Beverage Modernization and Tax Reform Act recently gained 51 co-sponsors as Sens. Barbara Boxer (D-Calif.), Heidi Heitkamp (D-N.D.) and Joni Ernst (R-Iowa) pledged their support. The House companion bill has 284 co-sponsors.

Under the proposal, the federal excise tax on beer would be reduced to $3.50 from $7 per barrel on the first 60,000 barrels produced and to $16 for the first 6 million barrels. The current tax of $18 per barrel would be maintained for more than 6 million barrels, an increase from the current threshold of 60,000 barrels.

For spirits, the excise tax would be $2.70 per proof gallon on the first 100,000 gallons produced. Currently, all distillers are levied a $13.50 per proof gallon tax regardless of the level of production.

“It’s been 40 years since the excise tax has been reformed for American brewers,” said Bob Pease, president and CEO of the Brewers Association. “Now is the time for change.”

Added Paul Hletko, president of the American Craft Spirits Association: “While the craft distilling community is encouraged by reaching a landmark achievement in the fight for a reduction in FET, we will continue to press Congress to do the right thing and pass this historic legislation. A drink is a drink is a drink, and parity with beer and wine is long overdue.”

Additionally, the bill would allow taxpayers who are liable for no more than $50,000 per year in excise taxes on beer, spirits or wine to file and pay such taxes quarterly without the requirement of posting a bond, while allowing producers with a tax liability of $1,000 or less to file annually. It also modifies the definition of “hard cider” for excise tax purposes and exempts home distillery establishments from excise tax and bonding requirements.

Both Ohio senators, Republican Rob Portman and Democrat Sherrod Brown, have signed on as co-sponsors of the bill, which was introduced in the Senate by Sens. Ron Wyden (D-Ore.) and Roy Blunt (R-Mo.). The House companion bill was introduced by Reps. Erik Paulsen (R-Minn.) and Ron Kind (D-Wis.); Ohio Rep. Pat Tiberi (R-12) was an original co-sponsor of the House bill and has been joined by 14 colleagues: Reps. Steve Chabot (R-1), David Joyce (R-14), Michael R. Turner (R-10), James B. Renacci (R-16), Tim Ryan (D-13), Joyce Beatty (D-4), Bill Johnson (R-6), Robert E. Latta (R-5), Marcy Kaptur (D-9), Brad R. Wenstrup (R-2), Marcia L. Fudge (D-11), Bob Gibbs (R-7), Jim Jordan (R-4) and Steve Stivers (R-15).

In addition to the Brewers Association and ACSA, the Craft Beverage Modernization and Tax Reform Act is endorsed by the Beer Institute, the Hop Growers of America, the Can Manufacturers Institute, Glass Packaging Institute, the National Barley Growers Association and the National Corn Growers Association.