Fort Wayne, Ind. (WANE) – The clock is ticking to pass a federal bill that would save distilleries and breweries dramatic amounts of money. The bill would make a current tax reduction that these companies are currently enjoying permanent. The deadline for it to pass is December 31. If it fails to pass in the U.S. congress, tax rates will jump back up to what they once were.
The tax reduction were part of a tax reform bill that passed in December 2017. The current Craft Beverage Modernization and Tax Reform Act needs to be made permanent at the end of the year if places like Three Rivers Distilling Company are going to avoid dramatically higher rates.
“For us personally, it equates to tens of thousands of dollars a year that we’ll be paying more in taxes,” said President Marla Schneider.
The tax rate would go up 500 percent. Right now the rate is $2.70 per proof gallon (the industry standard of measurement). It would go back to $13.50 if the bill doesn’t pass.
For craft breweries, it would take the federal excise tax of $3.50 a barrel on the first 60,000 barrels to $7.00.
Schneider said all the money lost to higher taxes would have major effects beyond them.
“Ultimately we would have to raise the price on our alcohol that we sell to our wholesaler and they’re going to raise the price on the liquor stores and the liquor stores are going to raise the price on consumers,” she said. “So it’s going to go down the line if we actually realize that tax increase.”
Indiana Senators Todd Young and Mike Braun, both Republicans, support the extension of the tax reduction. Young has sent a letter to U.S. senate leaders on December 1 expressing this, with 77 senators and 351 representatives in support.
“It’s really important to me that we’re not imposing new taxes on our distillers and our brewers,” Young said. “I think we stand a good chance of making sure that Three Rivers Distilling and Mad Anthony Brewing don’t get new tax increases. Over half the United States senate fortunately supports my efforts to ensure that you’re not suffering from new taxes during a global pandemic as we approach year’s end. We’re going to try and assist you. Help is on the way.”
Young said congress has been hectic since the November election. He expects the bill will pass as part of a larger package of proposed laws by the end of the year.