Pending legislation could help level the playing field for craft distilleries by reducing the excise tax that a distiller must pay on its spirits.
The Distillery Excise Tax Reform Act (DETRA) aims to significantly cut the current excise tax rate in order to make small distillers more competitive, as well as spur community investment and job creation.
“That reduction will mean more capital investment and will mean more jobs,” said U.S. Sen. Gary Peters (D-MI), during a tour, today, of Grand Rapids-based Long Road Distillers LLC.
Sen. Peters co-introduced the legislation in May 2015 along with Dan Sullivan (R-AK) and Kirsten Gillibrand (D-NY).
The new legislation will lower the excise tax from $13.50 per proof gallon to $2.70 per proof gallon — defined as one liquid gallon of spirits at 50 percent alcohol by volume at 60 degrees fahrenheit — for the first 100,000 proof gallons produced by a distillery in a year.
Additionally, the legislation would also make craft distillers more competitive in the craft beverage landscape. Unlike other craft beverage producers, distillers must pay the same excise tax as large, national producers such as Jim Beam.