Craft Beverage Modernization Act Achieves House Majority

A bit of news from the American Craft Spirits Association American-Craft-Spirits-Association-Logo-1

H.R. 747, the Craft Beverage Modernization and Tax Reform Act, re-introduced earlier this year by Rep. Erik Paulsen (R-MN) and Rep. Ron Kind (D-WI), has crossed the majority threshold in the U.S. House of Representatives, with more than 226 co-sponsors signed onto the bill, representing a clear, bipartisan majority in the U.S. House. The Senate, with a companion bill S. 236, introduced by Sen. Ron Wyden (D-OR) and Sen. Roy Blunt (R-MN) is just shy of a majority as well.

The legislation would for the first time create a reduced Federal Excise Tax (FET) for craft distillers producing less than 100,000 proof gallons a year. This would provide parity with craft brewers and small vintners, who have enjoyed a reduced FET based on their smaller size for many years.

“This House majority landmark of support for the Craft Modernization and Tax Reform Act represents a resounding recognition by Congress that parity in the tax code for craft distillers is both critical to the future growth of our industry and is the right, fair thing to do,” says Mark Shilling, president of the American Craft Spirits Association (ACSA). “Our industry is growing, but that growth is being held back by a burdensome, dated tax structure. We are confident this vast support in the House, as well as the continued momentum in the Senate, makes both of these bills more likely to reach the President’s desk.”

The craft distilling industry is growing, with, on average, one distillery opening per day. There are more than 1,400 craft spirits distilleries operating in the U.S., employing well more than 12,000 people. Investments in the industry in the last decade have now reached over $300 million, according to the Craft Spirits Data Project.

“The Association will continue to press the Congress to pass this bill to enable our small business entrepreneurs to succeed,” says Margie A.S. Lehrman, executive director of ACSA. “A thriving craft spirits industry means a healthy labor force—from the farmers who plant the grain, to the manufacturers who create the stills, to the graphic designers who produce the labels, to the trucks that haul the products—as well as the continued growth of distillery tourism. There are multiple stakeholders impacted by a reduction in the FET, and we will continue to urge action by the House on this issue during our annual Congressional fly-in in on July 25 in D.C.”

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