And with the stroke of a pen, its official, for the first time since the Civil War the Federal Excise Tax (FET) on distilled spirits has been reduced.
In a signing ceremony today at the White House, President Trump signed into law the major tax reform bill called the Tax Cuts and Jobs Act. The legislation contains the tax related provisions of the Craft Beverage Modernization & Tax Reform, which includes a reduction in the Federal Excise Tax for craft distillers. The rate will drop from $13.50 to $2.70 for the first 100,000 proof gallons. The provision will be effective for two years beginning January 1, 2018. The good news is though the final larger tax bill won approval on a partisan basis, the Craft Beverage Modernization & Tax Reform portion had widespread bipartisan support with 303 cosponsors in the House and 54 cosponsors in the Senate. This bipartisan support will be needed to assure its renewal prior to December 31, 2019.
The passage marks the first major legislation in modern history that will directly support and grow America’s 1,589 small craft distillers via a critical, reduced Federal Excise Tax (FET) that finally gives craft spirits parity with its counterparts in beer and wine. The legislation has been American Craft Spirits Associations top legislative priority, and its passage marks a major victory for the distilled spirits industry.
TTB Prepares for Federal Excise Tax Changes for Beverage Makers
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In addition, the legislation contains a new provision that allows distillers to transfer spirits in approved containers other than bulk containers in bond, without payment of tax. The American Craft Spirits Associations Legislative Committee said they, “Will be working with TTB to ensure a smooth transition to the new tax rate and to move quickly to enact rules governing the transfer of spirits between bonded facilities.”
Margie A.S. Lehrman, Executive Director, American Craft Spirits Association added, “The burdensome Federal Excise Tax has been a substantial impediment to economic growth in the craft spirits industry, and we applaud this bipartisan commitment to making change. On this historic occasion, we proudly celebrate with our friends within the beer, wine and spirits industry who have helped rally support for this critical legislation.”
“We look forward to working with the U.S. Department of Treasury’s Tax and Trade Bureau to implement these important tax…” said Distilled Spirits Council of the United States President & CEO Kraig R. Naasz.
Game Changer for Craft Spirits Makers
The Impact on Craft Spirits Makers
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*FET is paid semi-weekly.
Now it’s time to raise a glass to celebrate the official signing of the 2017 Tax Reform and Jobs Act which includes Craft Beverage Modernization & Tax Act.
The Signing Ceremony
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