The Honorable Orrin Hatch
Chairman, Senate Committee on Finance
219 Dirksen Senate Office Building
Washington, DC 20510
Dear Chairman Hatch,
On behalf of the members of National Taxpayers Union (NTU), I urge you to include Portman Amendment #1 in your Manager’s Amendment to the Senate version of H.R 1, the “Tax Cuts and Jobs Act.”
Portman Amendment #1 is a two-year version of S. 236, the “Craft Beverage Modernization and Tax Reform Act of 2017,” which would provide a more fair and comprehensive tax structure for national brewers, microbrewers, and producers of distilled spirits and wine. This bill has overwhelming support in Congress with 54 cosponsors in the Senate and nearly 300 in the House. Passage of Portman Amendment #1 would support a burgeoning industry that is important to our economy.
The current structure of the federal excise tax (FET) code is hindering growth to the U.S. alcohol industry. For smaller brewers who produce fewer than 2 million barrels annually, S. 236 recalibrates the FET to $3.50 (down from $7) on the first 60,000 barrels produced. Larger brewers and importers would see a reduced FET of $16 per barrel on their first 6 million barrels. Further, this bill reduces the FET to $2.70 (down from $13.50) on the first 100,000 proof gallons for craft distillers. It also expands excise tax credits for winemakers and creates a tiered credit system that will benefit vintners of all sizes. Overall, the bill reduces taxes for businesses of all shapes and sizes, and would roughly reduce each segment’s tax liability by a similar percentage. With an estimated $130 million in annual savings, the infusion of capital will allow the industry to boost production, meet growing consumer demand, and innovate to provide consumers with greater choice.
Across the nation, the alcohol beverage industry employs over 4.6 million workers, and generates more than $475 billion in annual economic activity. Permitting businesses in the alcohol industry to keep more of what they earn will allow them to increase employment at the margin and provide them with the means they need to expand their product. NTU is pleased to endorse Portman Amendment #1 and we urge you to include it in your Manager’s Amendment.
Sincerely,
Brandon Arnold
National Taxpayers Union