October 3, 2017
The Honorable Erik Paulsen The Honorable Ron Kind
U.S. House of Representatives U.S. House of Representatives
127 Cannon House Office Building 1502 Longworth House Office Building
Washington, DC 20515 Washington, DC 20515
Dear Congressmen Paulsen and Kind,
On behalf of National Taxpayers Union (NTU), I write to endorse H.R. 747, the “Craft Beverage Modernization and Tax Reform Act of 2017.” I am confident that your legislation will provide a more fair and comprehensive tax structure for national brewers, microbrewers, and producers of distilled spirits and wine. Passage of this legislation will support a burgeoning industry that is important to our national 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, H.R. 747 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 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. 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 alcoholic beverage industry employs over 4.6 million workers, and generates more than $475 billion in annual economic activity. Microbreweries in particular, continue to grow at an unprecedented pace and have become integral small businesses in communities both big and small. Permitting these businesses 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.
With the permanent tax reduction in this bill, businesses will know what to expect and invest in growth that will be sustained over the long term. NTU is pleased to endorse H.R. 747 and urges all Representatives to cosponsor this legislation.
Policy and Government Affairs Associate