Spirit Act gives tax relief to US craft distillers
New legislation in the US will provide tax relief for smaller distillers who use domestic agricultural ingredients in production.
Yesterday (29 June), the Supporting Producers Through Incentives from Rural Ingredients and Tax Relief Act (Spirit Act) bipartisan legislation was passed.
The legislation was led by congressional craft spirits caucus co-chair representative Jeff Hurd and was co-sponsored by representative Jill Tokuda.
The new regulations will establish a federal excise tax (FET) credit for small distillers who meet the requisite standards.
The American Craft Spirits Association (ACSA) welcomed the Spirit Act.
“Craft spirits producers are among the most agriculture-dependent businesses in beverage alcohol,” said Emily Pennington, chief executive officer of the ACSA.
“Every bottle represents a significant investment in American grain, specialty crops, manufacturing, tourism, and local jobs.
“The Spirit Act recognises that connection and provides meaningful relief to small distillers during a period of economic uncertainty and rising production costs.”
The Act will apply to distillers producing up to 100,000 proof gallons annually.
They would be eligible for a tax reduction of US$2.35 per proof gallon if at least 90% of their agricultural inputs are sourced domestically.
“This bipartisan legislation helps ensure small producers can continue investing in local farmers, creating jobs, and contributing to Colorado’s and America’s manufacturing economy,” said Hurd. “The Spirit Act provides targeted relief while strengthening domestic supply chains.”
Lee Wood, president of the Colorado Distillers Guild, said the legislation reflects the realities facing small distillers throughout the US.
Wood added: “Independent distillers are being squeezed by higher costs across nearly every part of our business – from grain and glass to barrels and transportation.
“This legislation helps small producers reinvest in employees, agriculture, and local economies while encouraging stronger partnerships between distillers and American farmers.”
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