Across the bev/al spectrum, trade associations joined in praising Congress for including the Craft Beverage Modernization & Tax Reform Act in the Covid-19 Relief package it passed just after midnight yesterday.
“For the past three years, the CBMA tax benefits have proven their value in encouraging and creating employee retention and new hiring expansion as well as the acquisitions of new equipment,” said Robert M. Tobiassen, president, National Association of Beverage Importers. “These are direct benefits to the United States economy and workers. Sunsetting of these tax benefits would have devastated jobs in the import and production, transportation, retailer outlets, including hospitality, sectors and capital investments in new equipment. All workers in the global and domestic supply chains reap from these benefits,” he added, noting the impact of retaliatory tariffs.
“Importers have faced even greater challenges this past year in bearing the burden of retaliatory tariffs on wines and spirits from Europe. Retaliatory tariffs are paid directly by importers and indirectly by consumers. Pyramiding the retaliatory tariffs with the loss of the CBMA benefits would have been clamorous in the present economic downturn” Tobiassen said, adding:
“While importers face some procedural revisions on refunds, the two-year implementation time, a report mandated from the Treasury Department within 6 months, and the required regulations after notice and comment will enable development of a framework workable for the importer industry, administrable by the Treasury Department, sufficient for the distributors and retailers, and beneficial to consumer choice. A win-win-win aspiration.”
Jim McGreevy, president/CEO, Beer Institute, said further action is necessary to help the bar and restaurant industry to recover.
“With the passage of permanent alcohol excise tax relief by the House and the Senate, brewers and beer importers and the millions of American jobs that depend on the beer industry, from farmers to restaurant workers, will have long-term tax certainty that will help them weather the COVID-19 pandemic. I encourage President Trump to quickly sign this legislation so the beer industry can continue to provide jobs to millions of Americans.”
Kentucky Distillers Association hailed the historic passage of the Craft Beverage Modernization and Tax Reform Act. “This has been a tough and trying year for so many, including our distilling community,” KDA President Eric Gregory said. “With the closure of bars and restaurants worldwide and the decimation of the tourism industry due to the pandemic, Kentucky’s distillers – both large and small – have struggled.
“In addition, ongoing trade wars and retaliatory tariffs have sliced Kentucky spirits exports by more than 30% after years of double-digit growth. All these issues have taken a toll our homegrown Bourbon industry, which is an $8.6 billion economic and tourism driver.
“We anxiously await the President’s signature – and pray for an end to the global pandemic – so we can get back to the business of crafting America’s only native spirit and ensure a bright future for the more than 20,000 hard-working Kentuckians employed by our iconic industry.”
Gregory said the permanent reduction of the federal excise tax under the bipartisan CBMTRA, instead of annual extensions that hindered growth and planning, will offer distillers certainty in long-range forecasting and a financial lifeline to maintain and create jobs.
Plus, Gregory said the permanent authorization of the AGED Spirits Act will allow distillers to deduct interest expenses in the year it is paid, rather than at the end of the lengthy aging process for Bourbon. This will free up important capital for investment and job creation.
The KDA also expressed gratitude that many of its Kentucky Bourbon Trail® tourism partners will now be eligible for forgivable loans under the Paycheck Protection Program and other much-needed stimulus measures to help one of Kentucky’s most important industries.