Devastating 400% Tax Increase Facing Distillers on Jan. 1, 2021 Unless Congress Acts

Merriam-Webster defines ‘Last Call’ as “the time when the customers in a place where drinks are sold (such as a bar) are told that they can order one more drink before it closes.”

In today’s distilled spirits world the phrase ‘Last Call’ is being used as a call to action to get spirits makers, industry suppliers and spirits fans to call their legislators to take action on the Craft Beverage Modernization and Tax Reform Act (CBMTRA). If legislatures don’t take action on this law that is scheduled to sunset on December 31, 2020 there are hundreds of craft spirits distilleries across the country that will be facing last call and permanent closures.

Late in 2017 Congress passed the Craft Beverage Modernization and Tax Reform Act (CBMTRA) and President Trump signed it into law along with a slew of other legislation. The Act reduced the amount of federal excise taxes paid for the first 100,000 proof gallons of distilled spirits from $13.50 to $2.70. That was a monumental change for existing distilleries and was the beginning of a 10% increase in startup distilleries across the United States. The only trouble was the act was temporary and ended on December 31, 2019. The industry worked to get the temporary two year tax reduction made permanent but late in 2019 the Congress kicked the can down the road and voted to renew the measure once again but only for 12 months. The deadline for the second extension is set to expire on December 31, 2020.

DISCUS - Craft Beverage Modernization and Tax Reform Act Coalition, Dec 2020 Call to Action, #STOPCRAFTTAXINCREASE

Now in the middle of this horrific pandemic where the entire hospitality industry is hurting, it’s time to take action and once again plead with Congress to make this legislation permanent. If they don’t take action the results will most certainly be devastating for distilled spirits makers and their partners that provide products and services to the industry like suppliers, bartenders and farmers.

An Urgent Call to Action for Distilled Spirits Makers, Supply Chain Partner and Spirits Fans

Leaders in the beverage alcohol sector are urging industry advocates across the nation to participate in a national Day of Action on December 1 by contacting their members of Congress to urge passage of the Craft Beverage Modernization and Tax Reform Act, S.362/H.R. 1175 (CBMTRA).

“With less than four weeks remaining before the current tax rates expire, the entire industry is mobilizing their networks, consumers and suppliers to send an urgent call to Congress that they must act now,” said the CBMTRA Coalition.

“This year has been incredibly difficult for craft distillers, vintners, brewers, cider makers and mead makers due to COVID-19. These businesses had to make incredibly difficult decisions like closing tasting rooms, stopping production and furloughing staff. A drastic tax hike at the stroke of midnight on December 31 will be a devastating start to the new year for these small businesses that are already struggling to keep their doors open.”

Day of Action participants are encouraged to call, tweet and email their members of Congress to pass this bipartisan legislation and can do so in less than five minutes. Distillers, supply chain partners and spirits fans are encourages to visit the Spirits United page here to urge Congress to #StopCraftTaxIncreases permanently.

The CBMTRA coalition, a group of beverage alcohol trade associations including Distilled Spirits Council of the United States – DISCUS, American Craft Spirits Association – ACSA, American Distilled Spirits Alliance – ADSA, Brewers Association, Beer Institute, Wine Institute, WineAmerica, the United States Association of Cider Makers and American Mead Makers Association.

The campaign is sponsored by the CBMTRA Coalition, a group of beverage alcohol trade associations including

“Whether you are one of the millions of professionals in the beverage alcohol industry, a supply chain partner or a loyal consumer, we need your help to ensure Congress understands the critical nature of passing this legislation by the end of the year,” said the CBMTRA coalition.

“Please join us on the CBMTRA Day of Action on December 1 by calling on your representatives to act now.”

Click here to support local distillers, their partners and spirits fans.

Introduced by Senators Ron Wyden (D-Ore.) and Roy Blunt (R-Mo.) and by Representatives Ron Kind (D-Wis.) and Mike Kelly (R-Pa.), the legislation will make permanent reforms enacted in 2017 that create a fair and equitable tax structure for brewers, winemakers, distillers and importers of all beverage alcohol. The bill currently has 351 sponsors in the House and 77 in the Senate.

Below are the contacts for each of the organizations if you need additional information or would like to find out what additional steps you can take to make a difference in this very important topic.