A CapitolIntensive Effort Inside the fight for permanent Federal Excise Tax relief BY JEFF CIOLETTI
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he notoriously muggy swampiness of Washington, D.C. probably puts the nation’s capital pretty low on many people’s lists of places to visit during the dog days of summer. So it’s a testament to the commitment and fortitude of America’s craft spirits producers and their industry allies when nearly 150 of them show up in the District of Columbia in late July to convince lawmakers to back the industry’s top legislative priority. Luckily, the oppressive, triple-digit heat wave that engulfed most of the MidAtlantic and Northeast eased at the start of the American Craft Spirits Association and Distilled Spirits Council (DISCUS) Public Policy Conference. But even as the heat and humidity dissipated, the air was still thick—thick with a sense of déjà vu, that is. Many of those in attendance were delivering a similar message last year—and the year before. And the fight rages on. It’s a critical moment for the craft spirits industry—one that could mean the difference between continuing the current robust growth trajectory or watching the momentum grind to a halt. At the end of 2017, Congress passed the Craft Beverage Modernization and Tax Reform Act (CBMTRA), as part of the broader Tax Cuts and Jobs Act of 2017. The CBMTRA was the first major legislation in modern history to directly support and grow America’s craft distillers by reducing the Federal Excise Tax (FET) from $13.50 to $2.70 per gallon for the first 100,000 proof gallons removed from bond. It also helped craft spirits producers achieve parity with small wineries and craft breweries. Small distillers previously paid 5.4 times more FET than craft brewers and 16.4 times more FET than small wineries for equal quantities of beverage alcohol. “This is the very first time since Prohibition that distilled spirits have enjoyed any kind of tax relief,” says ACSA CEO Margie A.S. Lehrman. But there’s always a catch. The FET cut came with an expiration date: December 31, 2019, a little over four months from the publication of this issue. ‘Very Concerned’ For much of the past year, ACSA has been gauging craft spirits producers’ concerns about the expiring FET cut through a series of interactive polls in the Monthly Mash
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