Tax Breaks for Alcohol Producers Included in Final Republican Tax Plan

Members of the U.S. Senate and House of Representatives agreed over the weekend on a sweeping rewrite of the U.S. tax code that will include excise tax relief for alcohol producers and importers.

The Craft Beverage Modernization and Tax Reform Act (CBMTRA) survived a conference committee of the House and Senate and will be included in the final version of the Tax Cuts and Jobs Act. The bill will now receive a final congressional vote — the Senate could vote as early as Tuesday — before advancing to President Donald Trump’s desk for approval.

On Monday afternoon, President Trump tweeted: “As the world watches, we are days away from passing Historic TAX CUTS for American families and businesses. It will be the BIGGEST TAX CUT and TAX REFORM in the HISTORY of our country!”

Beer Institute CEO Jim McGreevy told Brewbound that the tax overhaul for brewers and importers has never been so close to passing.

“We first introduced the bill on June 11, 2015,” he said. “Two-and-a-half years of effort are hopefully coming to successful fruition in the next few days.”

McGreevy added that the Beer Institute is continuing to lobby congressional members to ensure CBMTRA isn’t stripped out of the Republicans’ tax plan.

“Our efforts to promote the measure continue and will until the bill is signed,” he said. “It’s our job to just keep telling anybody who has a vote that this measure has broad bipartisan and bicameral support — more than 300 House members and the majority of the Senate.”

Brewers Association (BA) CEO Bob Pease called the inclusion of CBMTRA into the Tax Cuts and Jobs Act “an enormous step forward for America’s small Main Street brewers.”

“Make no mistake, America’s small brewers – after nine years of hard work including countless meetings and tireless education on Capitol Hill – are one of the main reasons the provisions of the CBMTRA are one step away from being enacted into law, and the federal excise tax for small brewers could soon be recalibrated for the first time in four decades,” Pease wrote to BA members.

As Brewbound previously reported, brewers would enjoy two years of tax cuts through 2019. CBMTRA would reduce the federal excise tax from $7 to $3.50 per barrel on the first 60,000 barrels for domestic brewers producing fewer than 2 million barrels annually. The legislation would also cut the federal excise tax to $16 per barrel on the first 6 million barrels for all other brewers and beer importers while maintaining the $18 per barrel excise tax for brewers producing more than 6 million barrels.

McGreevy said the leadership of senators Roy Blunt (R-Missouri) and Rob Portman (R-Ohio) “was critical to getting the language in the Senate bill.” He added that reps. Mike Kelly (R-Pennsylvania) and Peter DeFazio (D-Oregon), who co-wrote a letter to House members championing the inclusion of the bill last week, played a pivotal role in gaining support for the bill in the House.

A number of alcoholic beverage lobbying groups have backed the legislation, including the Beer Institute, the Brewers Association, Distilled Spirits Council of the United States (DISCUS), American Craft Spirits Association, Wine America and the Wine Institute.

It’s worth noting that the BA has not taken a position on other parts of the Republicans’ massive overhaul of the U.S. tax code. In a note to members earlier this month, Pease wrote that “the BA and its members have had no input on the larger political issues in play on the tax reform bill.”

“The BA, as an institution dedicated to advancing the interests of small and independent brewers, has taken a position only on the provisions affecting our members, such as CBMTRA,” he said.”

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