U.S. Sen. Ron Wyden and U.S. Sen. Roy Blunt have reintroduced legislation to cut taxes and regulatory hurdles for craft brewers, cider makers, vintners and distillers.
The Craft Beverage Modernization and Tax Reform Act was first introduced in 2015 and again in 2017. Many of its provisions were included in the Tax Cuts and Jobs Act of 2017, but are set to expire at the end of the year.
“People around the world enjoy Oregon wine, craft beer, cider and spirits—providing not only a serious source of home state pride but also a huge boon to our state’s economy,” Wyden, an Oregon Democrat, said in a news release. “By modernizing burdensome rules and taxes for craft beverage producers, this legislation will level the playing field and allow these innovators to further grow and thrive.”
For brewers and cider makers that produce less than 2 million barrels annually, the bill would reduce excise taxes on barrels to $3.50 per barrel on the first 60,000 barrels, effectively including all makers in Clatsop County. They currently pay $7 per barrel. A similar provision was enacted in 2017 and is set to expire at the end of this year.
Many brewers and vintners age beer in barrels as part of a finishing process. Wyden’s bill, introduced with Blunt, a Missouri Republican, would permanently exclude aging for beer, wine and distilled spirits from the production period interest expense capitalization.
The bill would also simplify rules around ingredient approval, brewery collaborations and inventory tracking for breweries.
For distillers, the bill would reduce excise taxes per gallon from $13.50 to $2.70 for the first 100,000 gallons of distilled spirits produced or imported each year, effectively capturing both Pilot House Distilling and Cannon Beach Distillery.
The bill would also remove a prohibition against the transfer of spirits in bottles smaller than 1 gallon between distilleries, allowing such transfers without tax, similar to wine and beer.
“Small and independent craft brewers are grateful for the ongoing bipartisan support for the Craft Beverage Modernization and Tax Reform Act,” Bob Pease, president and CEO of the Brewers Association, said in a news release. “The legislation is not just economically smart but enables Main Street brewers to do what they do best: create and innovate.”