Your Favorite Distilled Beverage May Get a Little Cheaper

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A bipartisan bill was introduced recently that would lower the per gallon excise tax on distilled drinks, including whiskey and rum.

The Distillery Innovation and Excise Tax Reform Act, introduced by Rep. Todd Young (R-Ind.), would relieve distilleries, especially newer ones, of some of the burdens they face when bringing products to market.

Currently, distilled drinks are taxed at $13.50 per proof gallon. Young’s bill seeks to lower the tax to $2.70 per proof gallon on the first 100,000 gallons produced by a distillery and $9 per proof thereafter.

Rep. John Yarmuth (R-Ky.) has cosponsored the bill, which was referred to the House Ways and Means Committee on May 21. Rep. Paul Ryan (R-Wis.) chairs the powerful tax-writing committee.

“All around southern Indiana, many new craft distilleries are popping up, creating jobs and adding to the tax base,” Young said in a release on Wednesday. “But there’s a lot of red tape involved in getting a new distillery off the ground, and this bill helps reduce that burden. In addition, we have many large, established distilleries in our region of the country, and this bill will help them, too.”

The bill has support from the Distilled Spirits Council of the United States (DISCUS) and the American Craft Spirits Association (ACSA). “It is significant that the distillers of all sizes are united behind this important hospitality industry legislation,” Peter Cressy, CEO of DISCUS, said in a joint release with ACSA. “We thank the sponsors for recognizing the economic impact passage of this bill will have for our industry.”

Sen. Gary Peters (D-Mich.) introduced a companion bill in the Senate. Sens. Dan Sullivan (R-Alaska) and Kirsten Gillibrand (D-N.Y.) have signed on as cosponsors of the bill. Although the members represent states with a number of distilleries, the popularity of craft spirits has risen significantly and virtually every state now has distillery.

For the producers, the savings can mean expansion of their operations and more jobs for local communities.

“I started my distillery eight years ago to support Michigan jobs and prove that high quality spirits could be made right here in Michigan,” Rifino Valentine, founder of Valentine Distilling, said in a press release from Peters’ office. “While I’m proud to say we are expanding our facility, so many small distilleries are at a unique disadvantage as a result of the high federal excise tax.”

The bill may be common sense, but similar efforts to lower the excise tax on distilled spirits didn’t move out of committee in the previous Congress.