December 19, 2017, Washington, DC– WineAmerica, the National Association of American Wineries, today hailed the passage of federal alcohol excise tax reform legislation as a new opportunity for growth of the American wine industry.
The Tax Cuts and Jobs Act, which President Trump is expected to sign soon, includes key provisions of the Craft Beverage Modernization and Tax Reform Act that will reduce federal excise taxes on wine, beer, and spirits. WineAmerica and its beverage coalition partners enlisted 304 House and 55 Senate co-sponsors from both parties.
“We are grateful to all legislative supporters, but particularly Senator Roy Blunt (R-MO) who led the majority support, Senator Rob Portman (R-OH) for adding our bill into the broader Senate legislation, and Senator Ron Wyden (D-OR) who was the original champion of the entire concept and the language,” said WineAmerica President Jim Trezise. “On the House side, Representative Kevin Brady (R-TX) as Chairman of the Ways and Means Committee played a crucial role.”
The bill will save all wineries, regardless of size, significant money through an excise tax credit mechanism which reduces the effective rate. For example, while the federal excise tax on table wine will remain unchanged at $1.07 per gallon, there will be a new tax credit of $1.00 on the first 30,000 gallons produced, making the effective tax rate $0.07 (seven cents) per gallon. The tax credit on the next 100,000 gallons produced is $0.90, and between 130,000 and 750,000 gallons produced the tax credit will be $0.535. The tax credit limits out at a ceiling of 750,000 gallons. The legislation also increases the allowable alcohol level for table wine from 14% to 16%, reflecting the tangible impact of climate change on grape ripening in some states.
The federal excise tax provisions are programmed to expire on December 31, 2019, which means WineAmerica and its beverage coalition partners will need to work with Congress on making the new rates permanent. WineAmerica’s coalition consists of the American Craft Spirits Association, the Beer Institute, the Brewers Association, the Distilled Spirits Council, and the Wine Institute.
“There are nearly 10,000 wineries across all 50 states, and the vast majority are small, family-owned farms and businesses, so this is a welcome development for growing our entire industry,” said Trent Preszler, PhD, CEO of Bedell Cellars on Long Island and Chairman of the WineAmerica Board of Directors. “The excise tax savings will allow wineries to invest money back into their businesses in countless ways, whether that’s hiring new employees, buying oak barrels, or planting vineyards. Ultimately, such investments will help American wineries be more competitive in the global marketplace.”
WineAmerica recently unveiled a national economic impact study showing that the American wine industry generated a $220 billion benefit to the American economy in 2017, including 1.7 million jobs and $75.8 billion in wages. Of the total impact, $58.8 billion involved the “supplier” sector which includes goods and services like tractors and vineyard supplies; tanks and barrels; packaging and transportation; plus finance, insurance and real estate. Many of these sectors stand to benefit as wineries invest their savings from the tax reduction.
“We also thank WineAmerica Vice President Michael Kaiser and government affairs advisors Larry Meyers and Fran Boyd of Meyers & Associates for all their great work on this initiative,” said Trezise. “WineAmerica specializes in national grassroots public policy advocacy involving our members from all around the country, and these are the people who bring it all together.”
For more details about the actual Tax Cuts and Jobs Act and the Craft Beverage Modernization and Tax Reform Act, contact Michael Kaiser (mkaiser@nullwineamerica.org, 202-223-5172)
For more details about WineAmerica’s national economic impact study, visit www.wineamerica.org/impact or email jimtrezise@nullwineamerica.org.
