Reps. Williams, Crow Urge House to Provide Permanent Tax Relief for Craft Beverage Producers
WASHINGTON, D.C. – Congressman Roger Williams (R-TX-25) this week led a bipartisan letter with Congressman Jason Crow (D-CO-6) and 136 of their colleagues to U.S. House Speaker Nancy Pelosi, Minority Leader Kevin McCarthy, and Ways and Means Committee Chairman Richard Neal and Ranking Member Kevin Brady urging a vote on H.R. 1175, the Craft Beverage Modernization and Tax Reform Act.
“TX-25 is home to dozens of craft beverage producers and distilleries that serve as staples in our communities. Having already felt the devastating effects of COVID-19, a 400% tax increase on their growing industry next year would be catastrophic – not only to them, but to businesses who rely on them for support. I’m proud to work alongside these entrepreneurs to roll back regulations and burdensome taxes that put economic growth and Texas jobs at risk,” said Congressman Williams. “I want to thank Congressman Crow for joining me in urging House leadership to bring the Craft Beverage Modernization and Tax Reform Act to the floor so we can provide relief for this industry before it’s too late.”
“Colorado and craft beverages go hand-in-hand. Our craft breweries, distilleries, and cideries help fuel tourism, employ thousands of Coloradans, and serve as community hubs. But the public health and economic crisis brought on by the coronavirus is putting many of these businesses at risk. This relief effort will give craft beverage producers the help they need to stay afloat and continue to be an essential part of our community.” said Congressman Crow.
The letter reads: “With the devastating impacts of COVID-19 sweeping across our country, craft beverage producers have been hit hard as nearly half of all revenue comes from tasting rooms and in person sales.
“Restaurant and bar closures have also had a tremendous impact on sales…Now more than ever, these businesses need certainty that they will not face a substantial tax increase in 2021 so that they can rebuild their businesses once this pandemic begins to subside without fear of further financial turmoil looming.
“Fortunately, Representative Ron Kind and Representative Mike Kelly introduced H.R. 1175, The Craft Beverage Modernization and Tax reform Act. This legislation would make permanent the recalibrated Federal Excise Tax (FET) rates that were passed in 2017, again in 2019, and are set to expire on December 31 of this year.”
To view the full letter, please click here.
Quotes of support from Texas-based craft beverage producers:
Dripping Springs Distilling (Dripping Springs, TX)
“The CBMTRA has had the benefit of creating a level industry playing field for small, family owned spirits businesses like ours. We have been able to increase hiring by 50% while supporting Texas agriculture, tourism, and a host of other economic sectors. In the wake of the disruption caused by Covid-19, a 400% Tax Increase will deal a devastating blow to Craft Distillers in Texas and throughout the nation from which most will never recover. For many in the Craft Industry, the PPP gave them the saving grace to continue. A 400% Tax increase will take it away.”
Treaty Oak Distilling Co. (Dripping Springs, TX)
“I started Treaty Oak Distilling in 2006 with the idea of creating high quality spirits that are representative of the beautiful Texas Hill Country and the impassioned culture of Austin. The recent reduction in FET has allowed our company growth that we had not previously been able to obtain, and we have added numerous employees to help with our upward growth. The passage of the Craft Beverage Modernization and Tax Reform Act is imperative for our local, Texas owned business to maintain and continue our business development and community outreach,” said Daniel Barnes, CEO of Treaty Oak Distilling Co.
“The craft modernization act isn’t a benefit that will go hardly noticed. It’s a lifeline to hundreds of distillers around the country. Big or small distillery, we are all depending on this legislation to be able to operate in 2021 and beyond. This recalibration was necessary before COVID-19 decimated our sales and is now essential to prevent the closing of many craft distilleries. We are simply and only asking for tax parody with beer and wine,” said Nate Powell, Co-owner of Treaty Oak Distilling Co.
Frog Pond Distillery (Dripping Springs, TX)
“As craft distillers at Frog Pond Distillery we greatly appreciate your efforts on our behalf to implement H.R. 1175. This reduction in our excise tax burden has allowed us to hire more staff, purchase supplies and equipment, and frankly has helped us stay in business through thick and thin. Thanks for all your work.”
The Bloody Buddy (Dripping Springs, TX)
“We are a small family run business making a ready to drink Bloody Mary called The Bloody Buddy. When I say small, 4 full timers and 2 part timers, 6 total. We put our everything into making this business run. We bottle it ourselves, do tastings and events, we spend the majority of our time making this work. We’ve only been around for 3+ years and are starting to see some good movement and growth. If this tax gets increased I’m afraid all of our hard work and dedication will have been for nothing. We will not be able to continue making our product because we will not be able to afford the taxes. Please consider the fact that small business makes America what it is and the USA should help these business grow not hinder them.”
Revolution Spirits (Austin, TX)
"Rep. Williams is the consummate defender of small business and Texas manufacturing. This legislation is not just relief, it is critical to the continued existence and growth of the Texas distilled spirits industry,” said Aaron Day, President, Revolution Spirits, Austin, Texas.
Crowded Barrel Whiskey Co. (Austin, TX)
“We’ve been lucky to start our distillery under the safe haven of a lowered tax burden. Even as a tiny distillery in Austin, TX, the money that was saved has allowed us to hire full time management and part time bar staff. When I found out that the tax might be returning to what it was before, I ran the numbers. We would have to lay off 4 staff members immediately. We're a baby distillery. I can't imagine the financial impact on our larger industry colleagues. This tax cut has meant the difference between a struggling business and a thriving, growing business. Making this change permanent could be what keeps us open even in these uncertain economic times.”
Be In Good Spirits (Austin, TX)
“Without the Craft Beverage Modernization and Tax Reform Act, our small business faced a 400% excise tax increase in 2020. Thanks to the past and continued efforts of Congressman Williams (and the other representatives that supported this Act) the Craft Beverage Modernization and Tax Reform Act has allowed us to hire new staff in Texas and six other states. The reduced tax rate has given us the ability to grow our business without being burdened with an excessive excise tax. If this Act is not made permanent, we will undoubtedly have to reduce our staff in order to offset the additional expense.”
Sledge Distillery (Tolar, TX)
“Sledge Distillery is a rural, woman-owned business active in employing technical and hospitality workers contributing to tourism, manufacturing, and logistic efforts in the county. Without the tax relief, we would not be able to expand the business or even forecast for the next year. My faith in our government is infused with hope knowing our representatives understand the business pressures we are under and are willing to stimulate the economy thus providing economic benefits for my hometown that I love so much.”
Valley Mills Vineyards (Waco, TX)
“On behalf of our small, family-run winery, we are very much in favor of H.R. 1175 (the Craft Beverage Modernization and Tax Reform Act). In addition to this federal excise tax, we pay a state excise tax, state sales tax, permit fees, fees to ‘bond our premises,’ fees to have our product labels approved, fees to the health department, federal income tax, federal social security and Medicare payroll tax, federal unemployment tax, state unemployment tax, state franchise tax, local property tax, and local ‘business personal property tax.’ I personally spend a cumulative two weeks each year on reporting and compliance, some of which is under penalty of perjury. We presently employ eleven fantastic people and have been able to retain our team despite over eight weeks of government-mandated closure. Every dollar that we save on taxes is spent hiring amazing people to help us grow grapes and make wine.”
Quotes of support from craft beverage associations:
“At a time when the economy and brewers are undergoing financial hardship due to the COVID-19 pandemic, the Beer Institute thanks Reps. Williams and Crow and the more than 135 members of Congress for urging congressional leadership to make the current federal excise tax rates permanent for all brewers and beer importers, which would prevent a $130 million annual tax increase to our nation’s beer industry,” said Jim McGreevy, Beer Institute president and CEO. “Our nation’s brewers and beer importers operate in every corner of our nation—employing our neighbors, friends and family. Tax certainty will enable the American beer industry to weather the COVID pandemic and rebuild after so it can continue supporting American jobs and the economy.”
American Craft Spirits Association
“Today, our community of craft distilleries is at a crossroads," said Margie A.S. Lehrman, CEO, American Craft Spirits Association. "As we slowly and safely crawl back from tasting room closures and the profound, sweeping impacts of COVID-19 on our businesses, we face the imminent threat of an unfathomable Federal Excise Tax hike come January 1, 2021, one that will certainly seal the unfortunate fate of many of our distilleries who are still struggling to recover, as well as the peripheral industries they support, including agriculture, tourism, and hospitality. Without permanent and immediate reform, the stability of this vibrant industry is bound to be paralyzed.”
“America’s small and independent craft brewers are extremely grateful for the overwhelming bipartisan support for the Craft Beverage Modernization and Tax Reform Act,” said Bob Pease, President and CEO of the Brewers Association, the national trade association for small and independent craft brewers. “We especially want to thank Reps. Williams and Crow for urging key House leaders to support making the provisions of CBMTRA permanent. Making these recalibrated excise tax rates permanent would help provide certainty and stability to the more than 8,000 small and independent brewers located in all 50 states who are struggling to restart their businesses amidst a global health pandemic and economic crisis.”
Distilled Spirits Council of the United States
“Distillers across the country have been severely impacted by the COVID-19 crisis with the closure of tasting rooms, restaurants and bars. Making the lower federal excise tax rates permanent will provide distillers with the certainty and liquidity they need to begin planning their recovery. The current financial uncertainty, coupled with the prospect of a steep tax increase in less than six months, makes it nearly impossible for distillers to be able to get their businesses back on track. We call on Congress to pass the Craft Beverage Modernization and Tax Reform Act and thank all in Congress who are working to highlight this important issue.” said Chris Swonger, President & CEO, Distilled Spirits Council of the United States.
Congressman Roger Williams represents the 25th Congressional District of Texas and serves as a member of the House Committee on Financial Services.