TTB directly to allow its staff to help solve inquiries before they become a compliance problem. Perhaps one of the most notable features of the fly-in was the pep talk provided by Senator Wyden. Appearing at an ACSA breakfast, he noted, it is even more important for strong Senate support with tax reform impending. He reminded all that at the time of this meeting, the Senate stood at only 45 co-sponsors and while strong, it must be at a majority to become a part of the overall tax package. He urged the group to “make the case that there are already the votes in the House and that the Senate’s what’s holding it up.” Sen. Wyden further explained that a key selling point is the fact that a reduction creates greater incentives for small producers by aiding local job creation with small business, manufacturing, tourism, and agriculture. For craft producers and their partners in production, this tax savings is significant. “Getting capital helps small guys grow,” Wyden pointed out. “That would really be the connective tissue here.” Jersey Spirits Distilling Company, represented by Co-Founder and Master Distiller John Granata, agrees. Granata visited Senate offices to reiterate the paramount importance of tax reform for distillers. His message: “A distillery in New Jersey is allowed to produce 20,000 gallons per year. If a single producer achieved its cap, which is not a hard ceiling to hit, they would see over $215,000.00 in excise tax savings. This is a life changing amount of money to any business and means the ability to hire staff, purchase equipment,
and expand.” He was not alone. Wiggly Bridge Distillery, represented by David Woods, focused on another provision of the proposed bill. Woods explained, “We are a small LLC, distillery located in Maine and fill a 53 gallon barrel most days throughout the year. Adoption of this bill [specifically, section 263A] would create a sizable tax savings for Wiggly Bridge of over $75,000 each year. Because the distillery hits a personal tax return in a 37% tax bracket, the raw goods of manufacturing under current law prohibit recognizing the expense (i.e. tax deduction) until the age spirits are bottled. With the passage of CBMTRA all the expenses in the creation of an aged spirit would be deductible each year. And this tax savings could be returned to the business creating profitably for the first time and allowing for expansion sooner than we thought.” Both Granata and Woods, joined by their collective colleagues, repeated the mantra through Senatorial office visits: Pass CBMTRA to allow our small businesses to grow. Senator Wyden’s “heavy lifting” not only on the legislation but for his commitment to the craft spirits industry, earned him recognition with the first of its kind ACSA Champion of Craft Spirits Award. As noted by House Spirits co-owners Tom Mooney and Christian Krogstad, House Spirits would not exist today, but for Senator Wyden’s intervention to move TTB to begin acting on license approvals again while TTB was awaiting the outcome of the Treasury and Department of Homeland Security merger in early 2003. Senator Wyden deserves the industry’s praise.
House Ways and Means Chairman Kevin Brady imparted further guidance (his Committee is the chief tax writing Committee in the Congress and he will be the leader of tax reform in the U.S House). Illuminating the pitfalls of tax reform, he provided tips on how to best persuade Members of Congress to support passage. Current ACSA President, Mark Shilling, of Austin, Texas, credits Rep. Brady with advising our industry to focus on the “parity” argument. After many exhaustive hallway steps in Congress, our distiller community enjoyed a little levity with Congressional staff in the historic Rayburn Building in the U.S. House. Well over 100 people attended and sampled featured spirits from the producerattendees. During that reception, ACSA had yet another opportunity to present to Congressman Erik Paulsen (R-MN) another “Champion of Craft Spirits Award” for his work as chief sponsor of H.R. 747, the House version of S. 236, and for his outstanding work in rounding up over 250 fellow co-sponsors in the House. Congressman Paulsen has been a champion for the burgeoning industry of craft spirits in Minnesota. Now is the time for a fair FET reduction for craft distillers. We will not rest until the task is done.
Margie A.S. Lehrman is Executive Director of American Craft Spirits Association. Visit www.americancraftspirits.org for more information on ACSA and to join. Contact James E. Hyland, Esq. by emailing Jim@PennsylvaniaAvenueGroup.com.
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Published on Sep 19, 2017