WASHINGTON, DC – U.S. Senator Gary Peters (MI) today announced that he has cosponsored the Craft Beverage Modernization and Tax Reform Act, a bipartisan bill that would support craft beverage makers by reducing excise taxes, compliance burdens and regulations for brewers, cider makers, vintners, and distillers. This legislation includes measures from a bill Senator Peters introduced earlier this year reducing excise taxes on small distilleries.
“Michigan is home to some of the best brews, wines, and spirits in the country, and helping these industries thrive will strengthen our state’s economy, stimulate tourism, support Michigan agriculture, and boost job creation,” said Senator Peters. “I’m glad to support this legislation that will help small breweries, wineries, and distilleries in Michigan expand their facilities and operations.”
The Craft Beverage Modernization and Tax Reform Act will reduce the burden on craft beverage industries in Michigan and across the country by:
-Reducing excise taxes for brewers to provide more cash flow to reinvest in growing their businesses. The bill reduces the federal excise tax from $18 to $16 per barrel on the first 6 million barrels for all brewers and beer importers. Domestic breweries producing less than 2 million barrels annually would be eligible for a rate of $3.50 per barrel instead of the current $7.00 on the first 60,000 barrels, and $16 per barrel on the subsequent 1,940,000 barrels.
-Reducing excise taxes for craft distilleries to help small businesses get off the ground. This measure contains language from the Distillery Excise Tax Reform Act, a bill Senator Peters introduced in May that would lower the federal excise tax on small distilleries from $13.50 per proof gallon to $2.70 per proof gallon on the first 100,000 gallons produced per year.
-Expanding the wine producer tax credit to increase the benefit, cover more wineries, and promote regional growth. The legislation would provide a new tax credit of $1.00 per wine gallon on the first 30,000 wine gallons produced for any domestic winery regardless of size. Domestic wineries producing less than 2 million wine gallons would be able to claim an additional credit of 90 cents per wine gallon credit for the subsequent 100,000 wine gallons produced.
-Exempting approximately 90 percent of beverage producers from bi-weekly filing, burdensome bonding requirements and complex capitalization rules for aged products, leveling the playing field between U.S. businesses and their international competitors.
This legislation is supported by groups across the beverage industries, including the National Brewer’s Association, the Beer Institute, the U.S. Association of Cider Makers, and the American Craft Spirits Association.
“Michigan’s wine industry has seen tremendous growth in recent years, and reducing excise taxes on small wineries will allow them to create more jobs and economic growth in our state,” said Mike Beck, President, Michigan Wine Producers Association. “The Michigan Wine Producers Association thanks Senator Peters for his support of this legislation and Michigan wineries.”
“The CBMTA would allow continued growth of Michigan’s craft beverage industry by removing unnecessary paperwork requirements and reducing the tax burden on the small brewers in our state,” said Scott Newman-Bale, Partner at Short’s Brewing Company in Bellaire, Michigan. “Such savings will be quickly reinvested to further encourage growth of a local industry that will ultimately lead to more jobs, and we thank Senator Peters for being a strong supporter of our state’s thriving craft beverage industry.”
“This legislation would be a tremendous help to one of Michigan’s fastest growing industries and help our state continue to be a national leader in distilled spirits, creating more jobs and allowing distilleries to purchase more raw materials from Michigan’s farmers,” said Rifino Valentine, President of the Michigan Craft Distillers Association. “Additionally, it would help domestic small distillers compete on a more equal footing with large, imported brands of distilled spirits, and we appreciate Senator Peters’ continued support of Michigan’s craft distilling industry.”
Michigan has the sixth-highest number of craft breweries in the country, with over 150 craft breweries across the state, up from only three in 1991. Over 7,000 jobs are supported by the Michigan beer industry, resulting in over $232 million in wages and a total economic impact of over $608 million in 2014. Additionally, Michigan is home to nearly 40 distilleries, the third-highest in the country, many of which opened in recent years. Estimates show that the growing spirits industry could add up to $400 million to Michigan’s economy, and many Michigan distilleries utilize locally-grown grains and fruits for their products. Michigan’s wine industry contributes over $300 million annually to the state economy, and its vineyard area has doubled in the last 10 years, with over 17,500 acres devoted to grape and wine-grape growing. Additionally, over 115 commercial wineries produce more than 1.4 million gallons of wine annually in Michigan, making the state thirteenth in the country in wine production.
(Information Courtesy of U.S. Senator Gary Peters)