The U.S. House of Representatives passed and sent to the Senate the Craft Beverage Modernization & Tax Reform Act. Once passed by the Senate, President Trump is expected to sign CBMTRA, making a reduced Federal Excise Tax (FET) permanent for the country’s 2,200 craft spirits producers.
FET relief comes as part of an omnibus and stimulus package, giving craft distillers parity with their counterparts in beer and wine, who have enjoyed lower rates for many years. In addition to the hardships the industry faces as it crawls back from distillery closures due to COVID, distillers face a 400 percent tax hike come January 1, 2021 without legislation.
The American Craft Spirits Association applauded the House, as did the Beer Institute. Jim McGreevey, Beer Institute president/ceo, added, however, that more work is needed to support bars, retaurants and craft breweries. Entire communities are built around local breweries, mom and pop diners, and neighborhood bars, he said, adding that across the country, these local businesses support millions of jobs and employ our friends and neighbors.
“The permanent alcohol excise tax relief included in the legislation provides needed certainty at a time of significant economic distress. We look forward to the Senate quickly passing this legislation and it being permanently signed into law.”
Distilled Spirits Council of the U.S. President/CEO, said: “Making the federal tax reduction permanent for craft distillers brings optimism and hope to hundreds of small distilleries across the country that are on the verge of collapse as a result of the pandemic. The distilled spirits industry is grateful to members of the House for recognizing the dire situation facing craft distillers in their districts, and for acting to secure much-needed tax relief for more than 2000 craft distillers nationwide. We urge the Senate to pass this legislation swiftly to accelerate the recovery of these small businesses and their surrounding communities.”