ACSA ‘disappointed’ with craft spirits tax bill

21st December, 2015 by Melita Kiely

The American Craft Spirits Association (ACSA) is “disappointed” at the decision not to include a federal tax excise (FET) reduction in a new bill passed by US Congress this week.

ACSA Discus Craft distillery US

The ACSA has commented on a new bill regarding craft distillers passed by US Congress

Over the last year, the trade body has worked to help craft distillers by campaigning for a reduction in FET, which currently comprises 54% of the cost of a typical spirit product.

The ACSA argued craft spirits producers are in fact at a greater disadvantage to craft brewers and wineries, which receive “significant” reductions in their FET rate, meaning craft spirits producers pay 5.4 times more than craft breweries and 16.4 times more than small wineries.

As such, the ACSA joined the Distilled Spirits Council of the United States (Discus) and other trade associations to gather support for the Craft Beverage Modernisation and Tax Reform Act (CBMTR) in Washington.

Though an amended version of CBMTR was passed by the House and the Senate, House and Senate negotiators decided to exclude FET reduction in the final bill.

“While we are disappointed that FET parity was not included in the bill that was just passed, we came closer than ever before to passing legislation in Congress that will benefit all craft distillers,” said Margie A.S. Lehrman, executive director, ACSA.

“By keeping more money ‘at home’, distillers would have the ability to invest and grow, employing more workers and generating greater agriculture and tourism revenue in their local economies.

“We plan to continue our work with our partners in the industry to fix this unfair issue for our members, and for the broader craft distilling industry.”

Cause for optimism

However, the ACSA remains optimistic as an element of the original CBMTR bill did advance, and will allow small producers paying less than US$50,000 FET annually to file quarterly rather than twice a month and waive the existing bond requirement.

This was deemed an “important victory” for craft distillers by the ACSA.

“The reduction in FET filing frequency and the bond waiver, both benefiting the smallest members of the craft spirits sector, are major victories for our industry,” added Thomas Mooney, president of ACSA and CEO of House Spirits Distillery in Portland, Ore.

“They are also a first step toward comprehensive change that must include FET parity in order to unleash the full entrepreneurial potential of the craft spirits community.

“ACSA will not allow this momentum fade away, and we will push even harder in 2016.”

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