Following up on our blog post from Friday, June 12, (here) Senator Wyden’s (D) proposed legislation, The Craft Beverage Modernization and Tax Reform Act of 2015, also takes aim at regulations and taxes affecting distilleries, wineries and other alcohol beverage categories.
The proposed Act reduces the excise tax for spirits producers on the first 100,000 gallons produced or imported by 80% from $13.50/proof gallon to $2.70/proof gallon.
Wineries making less than a quarter of a million gallons of wine are eligible for the so-called “wine producer tax credit”. The current tax credit structure is 90 cents/gallon up to 100,000 gallons produced. This legislation expands that credit to $1/gallon on the first 30,000 gallons produced by any domestic winery. To further benefit small wineries, Wyden’s bill allows domestic wineries producing less than 2 million gallons to claim an additional 90 cent credit for the first 100,000 gallons produced.
The Act also calls for the exemption of 90% of alcohol producers from filing bi-weekly bonding requirements and exempts all beverage producers from capitalization rules for “aged” products.
As written, The Tax and Trade Bureau of the U.S. Treasury (TTB) would receive additional funding for regulatory and labeling approval activities. The TTB’s increased funding is also intended to help the relevant tax collecting agencies (IRS, DHS, CBP and the Department of the Treasury) to share more information with each other to investigate tax evaders.
To see a copy of the Craft Beverage Modernization and Tax Reform Act of 2015, please visit Senator Wyden’s congressional website, or click on this link. We will continue to closely monitor this proposed legislation and provide updates of its progress.