Peters Tours Long Road Distillers in Grand Rapids
GRAND RAPIDS, MI – U.S. Senator Gary Peters (MI) today toured Long Road Distillers, where he discussed bipartisan legislation he introduced to lower excise taxes for small craft distilleries. The Distillery Excise Tax Reform Act, which Peters introduced in May with Senators Dan Sullivan (R-AK) and Kirsten Gillibrand (D-NY), would lower the federal excise tax from $13.50 per proof gallon to $2.70 per proof gallon on the first 100,000 gallons produced per year. Michigan has the third highest number of craft distilleries in the country, with nearly 40 across the state, many of which opened in recent years.
“Michigan is home to a growing craft distilling industry that plays a critical role in our state’s economy by hiring workers locally and using Michigan-grown agricultural products to make great spirits,” said Senator Peters, a member of the Senate Small Business and Entrepreneurship Committee. “I’m proud to have introduced bipartisan legislation that will reduce the excise tax on small distilleries and give them a greater opportunity to compete and succeed.”
Long Road Distillers opened earlier this year as the first grain-to-glass distillery in the history of Grand Rapids. At their West Michigan facility, Long Road Distillers utilizes produce and agricultural resources from across Michigan to distill their spirits.
“Long Road Distillers is proud to be based in Grand Rapids, where we use Michigan materials to produce our spirits,” said Jon O’Connor, Co-Founder, Long Road Distillers. “Reducing federal excise taxes will help our business grow and further give back to our West Michigan community. We appreciate Senator Peters’ support for Michigan small businesses.”
For the average young distillery producing 30,000 proof gallons in a year, reducing the excise tax to $2.70 proof gallon is a savings of $324,000 – the price of a new still or 6 new staff. The bill would additionally create distiller tax parity with craft brewers and winemakers – groups that already have an excise tax schedule that recognizes and supports domestic manufacturing growth in their industries.
“Cutting the federal excise tax on craft distilleries is critical to ensuring that our state can continue to be a leader in spirit production,” said Kyle Van Strien, Co-Founder, Long Road Distillers. “Senator Peters’ legislation would allow Long Road Distillers to reinvest in our business and expand our facility more quickly, and we thank Senator Peters for his leadership in supporting small distilleries.”
Small craft distillers facing the costs of purchasing new equipment and hiring new employees are least able to pay these excise taxes, and because of the capital required to buy the stills, distilleries are more difficult to start than microbreweries or wineries.
Estimates show that the growing spirit industry could add up to $400 million to Michigan’s economy, and many Michigan distilleries utilize locally-grown grains and fruits for their products. Across the country, the distilled spirits industry directly employs over 800,000 Americans directly and supports over 1.2 million jobs. According to the American Craft Spirits Association, there are 769 craft distilleries in the United States, up from only about 50 ten years ago.
As a member of the Senate Small Business and Entrepreneurship Committee, Senator Peters has been a strong voice for Michigan small businesses. Last month, Peters cosponsored the Craft Beverage Modernization and Tax Reform Act of 2015, which includes language from Peters’ legislation reducing the excise tax on small distillers. In addition to supporting small distilleries, this bill would also reduce excise taxes for small breweries and wineries, cut burdensome paperwork, and eliminate red tape for distillers, brewers, and vintners.
###
