Congress Cuts Federal Excise Tax on Wine, Beer and Spirits

All wineries, including sparkling wine producers, are eligible for an excise credit.
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WineAmerica, the National Association of American Wineries, hailed the passage of the federal tax reform legislation on Wednesday that contains provisions that cut the federal excise tax on wine, beer and spirits.

House Republicans passed the “Tax Cut and Jobs Act” this afternoon. The Senate approved the final version of the measure—the first to cut federal excise taxes on distillers since the Civil War—early Wednesday morning. The vote was along party lines in both Houses, with no Democrats backing the measure.

The Craft Beverage Modernization and Tax Reform Act was wrapped into the larger measure. WineAmerica, Wine Institute, Distilled Spirits Council and their other beverage coalition partners enlisted 303 House and 54 Senate co-sponsors from both parties.

“We are grateful to all legislative supporters, but particularly Senator Roy Blunt [Republican of Missouri], who led the majority support, Senator Rob Portman [Republican of Ohio] for adding our bill into the broader Senate legislation, and Senator Ron Wyden [Democrat of Oregon], who was the original champion of the entire concept and the language,” said WineAmerica President Jim Trezise.

The legislation includes several benefits that will mean lower excise tax bills for all wineries regardless of size, the Wine Institute said.

Here are some of the highlights relating to wine:

1) It expands the excise tax credit for all wineries. The legislation does away with the existing phase-out based on production size and allows all wineries to claim a credit of between $.535 and $1 per gallon on the first 750,000 gallons of production. The total value of the full credit would be $451,700 per winery, based on producing the full 750,000 gallons.

2) It allows sparkling wine to qualify for the credit. For the first time, sparkling wine would be eligible to receive the tax credits mentioned above.

3) The act increases the Alcohol by Volume (abv) allowed for the $1.07 tax rate to 16% from 14%. Wines with 14% to 16% ABV are currently taxed at $1.57 per gallon. They will be taxed at $1.07.

Published on December 20, 2017
Topics: Latest News
About the Author
Leslie Gevirtz
Contributing Editor, Business

An award-winning journalist, Gevirtz spent more than 20 years covering disasters—natural, political, and financial—before becoming Reuters’ wine correspondent; a beat that guaranteed her colleagues were always glad to see her.




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