S. 236, the Craft Beverage Modernization and Tax Reform Act, re-introduced earlier this year by Sen. Ron Wyden (D-OR) and Sen. Roy Blunt (R-MN), has reached a landmark 50 co-sponsors in the Senate, with 28 Democrats, 21 Republicans and one Independent, representing a clear, bipartisan groundswell of support for tax parity.   H.R. 747, the companion bill introduced by Rep. Erik Paulsen (R-MN) and Rep. Ron Kind (D-WI) in the U.S. House of Representatives, which reached a majority back in June, continues to rally support as well, with 278 co-sponsors as of today, which includes three new co-sponsors gained this week alone.

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 Senate majority landmark of support for the Craft Modernization and Tax Reform Act, coupled with the milestone majority reached in the House back in June, represents a resounding recognition by Congress that parity in the tax code for craft distillers is critical to the future growth of our industry,” says Mark Shilling, president of the American Craft Spirits Association.  “Fair and equal application of the federal excise tax will bring parity to all small and independent manufacturers in our industry and will ensure the continued growth and entrepreneurial spirit of craft distillers.“

The craft distilling industry is growing, with, on average, one distillery opening per day.  There are more than 1,500 craft spirits distilleries operating in the U.S. in all 50 states, 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 (2016).

“Now that there is a clear consensus for FET reduction, the Association will call on leadership to ensure this critical reform is included in the forthcoming tax bill,” says Margie A.S. Lehrman, executive director of ACSA. “We are optimistic about this progress to date, but our fight will not end until we have achieved tax reform to better enable our nation’s nascent but growing craft businesses to succeed.”