FOX Business’ Gerri Willis talks about the craft beer obsession in America and international beer expert Stephen Beaumont discusses the movement for bigger breweries buying smaller operations.
Just before a key tax break was set to expire, lawmakers and President Trump gave the alcohol industry a present for the holidays.
Continue Reading Below
The president signed a bill earlier this month that will extend certain tax provisions — initially enacted as part of the Tax Cuts and Jobs Act — through the end of 2020.
Known as the Craft Beverage Modernization and Tax Reform Act, the legislation halves a $7 tax on the first 60,000 barrels of beer from domestic producers that make under 2 million barrels during the calendar year. Instead of $7, eligible producers will pay an alcohol excise tax rate of $3.50 per barrel.
It also reduces the federal excise tax to $16 per barrel on the first 6 million barrels for all other larger brewers and beer importers, from $18. For all barrels over 6 million the rate will return to $18.
For distillers, it reduced the federal excise tax on the first 100,000 proof gallons to $2.70 from $13.50.
For small- and medium-sized wineries, excise tax rate, which vary based on alcohol content and carbonation level, were reduced by as much as 70 percent, according to the Wine Institute.
Excise taxes are levied in addition to other corporate taxes.
GRUBHUB NAMES TOP ORDERS OF 2019 AND UPCOMING FOOD TRENDS
CAVIAR GOES MAINSTREAM WITH PRICES AT RECORD LOW
The American Craft Spirits Association said that without the tax break, the distilled spirits industry, which has historically paid higher rates than beer and wine producers, faced a 400 percent increase.
“In a political climate that is arguably more divided than ever, we applaud Congress for working together on both sides of the aisle to support our community of 2,000 small businesses and do what is vitally important to keep our industry growing,” Margie A.S. Lehrman, CEO of the American Craft Spirits Association said in a statement.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
The Beer Institute also applauded the measure, saying it allows companies to continue growing and reinvesting in their businesses, which includes hiring more workers.
There has been a push among many lobby groups across the beer, wine and distilled spirit sectors to make the tax breaks permanent.
