Craft-Friendly Amendment Could be Added to FAA Reauthorization Act

Ron Wyden (D-OR)

Ron Wyden (D-OR)

It’s been 10 months since the U.S. Senate formally reviewed the Craft Beverage Modernization and Tax Reform Act (CBMTRA), but the proposed federal excise tax reductions could still hitch a ride through congress thanks to the Federal Aviation Administration (FAA) Reauthorization Act of 2016.

The Senate will continue its review of S.2658 — a “must-pass” bill that would reauthorize the FAA and specified FAA programs – this week. Sen. Ron Wyden (D-OR), the ranking Democratic member of the Finance Committee, first introduced the bipartisan CBMTRA last June. He has hinted that he is considering a beverage-friendly amendment as last-minute addition to the FAA bill.

“Obviously there are members with an interest in energy,” Wyden told reporters last week, according to Politico. “There have been interest in other issues. I’ve obviously cared deeply about a bill to modernize the rules with respect to wine and beer and cider.”

The craft-friendly legislation would lower excise taxes on all brewers, importers, distillers, cider producers and winemakers, and is jointly backed by the Beer Institute and the Brewers Association. As written, CMBTRA reduces the federal excise tax to $3.50 per barrel on the first 60,000 barrels for domestic brewers producing fewer than 2 million barrels annually. It also reduces the federal excise tax to $16 per barrel on the first 6 million barrels for all other brewers and all beer importers.

“There are some tax provisions in the FAA Act which make the craft beverage bill a potential add-on,” Beer Institute president Jim McGreevy told Brewbound. “We have a lot of support in the Senate and a lot of support in the House. There are a lot of members of Congress that think beer tax reform is a good idea, so I am hopeful.”

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The CBMTRA currently has 33 co-sponsors in the Senate and 172 co-sponsors in the House.

It’s unclear if an official amendment that includes the tax breaks for alcoholic beverage producers has been added to the FAA Act, or what form that amendment would be in, but it nevertheless could be tied to energy provisions that were accidentally left out of the $1.1 trillion December tax extender package.

“We are working with our congressional supporters to have it added to the FAA act,” Brewers Association CEO Bob Pease told Brewbound. “We have great confidence in our congressional champions.”

Democratic and Republican Senators are hoping to finalize the FAA bill this week, according to Politico.

Senator Amy Klobuchar (D-MN), a co-sponsor of the CBMTRA who this morning addressed a crowd of about 400 beer distributors attending the National Beer Wholesalers Association’s legislative conference in Washington D.C., said there were some “positive signs” that beer tax reform would ride along with the FAA Act.

Even if a craft-friendly amendment doesn’t make it onto the FAA Act, the support CBMTRA has garnered still serves as a “great firewall to any kind of federal excise tax increases in the future,” according to Pease.