Senate Finance Committee Report Says Tax Cuts for Alcoholic Beverages Should be Extended
August 15, 2019
The temporary provisions alcohol tax cuts approved in December 2017 should be made permanent, according to a report from the US Senate Finance Committee released this week. The provisions are due to expire in Dec. 31.
The Craft Beverage Modernization and Tax Reform Act was among 40 temporary tax measures under review. The bi-partisan task force was convened to determine whether the measures should be extended, including the law that cuts excise taxes of wineries, breweries and distilleries.
The four US senators who led the task force – Pat Roberts, R-Kan., Robert Menendez, D – N.J., Steve Daines, R-Mont., and Maggie Hassan, D-N.H. – are among the 70 senators who support a bill introduced in February to make the provisions of the Craft Beverage Modernization and Tax Reform Act permanent.
More than 270 legislators support the US House of Representatives’ version of the bill. The U.S. House of Representatives’ Ways and Means Committee earlier this summer approved a one-year extension of the federal excise tax cuts, according to the alcoholic beverage trade associations.
“The Task Force would like not only to have this provision extended, but furthermore see the Craft Beverage Modernization and Tax Reform Act enacted on a permanent basis,” according to the report from the US. Senate Finance task force report released Tuesday.
Charles Jefferson, vice president of federal and international public policy at Wine Institute, welcomed the news, calling the report “very positive.”
Wine Institute, WineAmerica, Beer Institute and other alcoholic beverage trade associations stated in a letter to the task force that the Craft Beverage Modernization and Tax Reform Act, was “principally designed to reduce the extraordinarily high federal excise taxes (FET) paid by all alcohol producers and importers.”
Trade associations noted in their letter to the task force that the tax cuts under the current Craft Beverage Modernization and Tax Reform Act for all alcohol producers and importers to have cost $532 million in 2018 instead of the estimated $1.6 billion. The savings were put in place to spur investments and jobs.
Michael Kaiser, vice president at WineAmerica, said he's not sure what happens next but that “between this and the one year extension that has been suggested by the House, it is clear we are on their radar.”
“The group hopes to have legislation in place by fall,” Kaiser said.
Trade associations that support the Craft Beverage Modernization and Tax Reform Act include Beer Institute, American Craft Spirits Association, Brewers Association, Distilled Spirits Council, and the United States Association of Cider Makers.
“This report marks another step forward in the process to make excise tax relief for all brewers and beer importers permanent,” said Jim McGreevy, president and chief executive officer at Beer Institute. “We agree with the task force that federal excise tax relief for all brewers and beer importers should at least be extended, and at best be made permanent. Ensuring all brewers and beer importers can count on federal excise tax relief is key to making sure our nation’s more than 7,000 active brewers continue to thrive, innovate and provide Americans with more varieties and styles of beer — our nation’s most popular alcohol beverage.”
U.S. Sen. Chuck Grassley, R-Iowa, is chairman of the U.S. Senate Finance Committee while U.S. Sen. Ron Wyden, D-Ore., serves as the committee’s vice chairman. Both senators spoke on the need to bring certainty to tax policy as they released the reports on different temporary tax cuts.
“Tax policy should not be set a year or two at a time,” Wyden said. “We need to find permanent solutions that provide certainty to families and businesses.” Wyden introduced S. 362 in February to make the provisions of the Craft Beverage Modernization and Tax Reform Act permanent.