Sen. Ron Wyden, D-Ore. , the top Democrat on the Senate Finance Committee, which oversees excise taxes and alcohol regulations, introduced the Craft Beverage Modernization and Tax Reform Act, S.1562, on Thursday, June 11, 2015. The proposed legislation would promote continued job creation in the growing craft beverage, cider, wine and distillery industries throughout Oregon and the entire country.
In Oregon, those industries are responsible for an estimated 40,000 jobs collectively and generate about $6 billion annually in revenue. “Oregon’s craft beer, wine, cider and spirits producers are both world-renowned and a huge boon to our state’s economy,” said Wyden, co-chair of the Senate Bipartisan Small Brewers Caucus.
“Each of these industries is unique, and this legislation takes targeted approaches to update antiquated rules and reduce taxes for these growing businesses to ensure that these innovators continue to create high-quality jobs for Oregonians, said Wyden.
This legislation builds on a consensus reached among multiple industry groups. And it builds on a number of popular proposals including,
- The Small BREW Act sponsored by Senators Ben Cardin (D-Md.) and Susan Collins (R-Maine);
- The Fair BEER Act sponsored by Senators Roy Blunt (R-Mo.) and Tammy Baldwin (D-Wisc.);
- The Distillery Excise Tax Reform Act sponsored by Senator Gary Peters (D-Mich.);
- The CIDER Act sponsored by Senator Charles Schumer (D-N.Y.);
- The AGED Spirits Act sponsored by Senate Majority Leader Mitch McConnell (R-Ky.); and
- The Craft Beverage Bond Simplification Act, which was approved by the Finance Committee earlier this year.
In addition, Wyden’s legislation includes a variety of new proposals to reduce tax and regulatory burdens for each industry.
Brewers
“As co-chair of the Senate Bipartisan Small Brewers Caucus, Senator Wyden has been a longtime champion for America’s craft brewers and we appreciate his strong support,” said Bob Pease, CEO of the Brewers Association. “He has been diligently working to reduce federal excise taxes for craft brewers through his co-sponsorship of the Small BREW Act. Now with the introduction of the Craft Beverage Modernization and Tax Reform Act, Senator Wyden has gone even further to ensure growth for small and independent brewers.”
“We applaud Senator Wyden for this positive step forward in addressing beer excise tax reform in a fair, equitable and comprehensive way,” said Jim McGreevy, president and CEO of the Beer Institute, a national trade association representing brewers, beer importers and industry suppliers. “The beer-specific provisions of this bill will help brewers and beer importers of all sizes. We look forward to working with the Senator and our industry partners to build support for this important legislation.”
“Oregon’s breweries contribute mightily to our state’s economy and Senator Wyden’s legislation will allow our small businesses to build on what they’ve done naturally for decades – create good-paying jobs all across our state,” said Deschutes Brewery Founder Gary Fish, Board Chair of the Brewers Association. “A fresh approach to eliminating outdated regulations and lowering taxes is a recipe for breweries’ uniquely Oregon success story to continue for years to come.”
Wineries
“The Oregon Winegrowers Association thanks Senator Wyden for his continuing support and leadership on issues that help improve the competitiveness of Oregon’s craft beverage brands,” said Association Board Director and Treasurer Steve Thomson, Executive Vice President at King Estate Winery. “Under his proposal, Oregon’s midsize and small family wineries would see a significant new tax benefit, enabling them to reinvest in their businesses and further fuel the wine industry’s growth and contribution to the Oregon economy. Currently Oregon’s 605 wineries, 950 vineyards, and related businesses account for 17,100 jobs, $208 million in tourism, and $3.35 billion in total annual economic impact spread across Oregon’s 36 counties.”
Cider
“I am excited to a see very progressive and comprehensive approach to positively change the excise tax for the cider industry, dramatically improve the small producer credit so growth is not taxed excessively and at the same time offer our regulating body, the TTB, more funds to assist our growing industry with compliance,’’ said James Kohn, owner of Salem-based Wandering Aengus Ciderworks.
Distilled Spirits
“The Craft Beverage Modernization and Tax Reform Act is a comprehensive piece of legislation that tackles some of the most significant barriers that America’s distillers currently face, and it provides a measure of excise tax parity that will boost investment and create new jobs in communities across the country,’ said Thomas Mooney, President of the American Craft Spirits Association (ACSA) and Co-Owner & CEO of House Spirits Distillery in Portland. “These issues are important to the rapidly growing number of American craft distillers, and this bill comes only days after the introduction of the bipartisan Distillery Innovation and Excise Tax Reform Act of 2015 (HR 2520) in the House. On behalf of more than 700 distillers across the country, and as an Oregon distiller myself, I thank Senator Wyden for his leadership in taking on these important issues in the Senate.”
In addition to providing tax relief for Oregon’s brewers, cider makers, vintners, and distillers, this legislation would also reduce compliance burdens for craft beverage producers by exempting nearly 90 percent of all industry members from complex bonding and bi-weekly tax filing requirements. The bill would exempt aged beers, ciders, wines, and spirits from complicated and burdensome accounting rules. It would reform rules on brewers to encourage more collaboration and streamline regulations. And it would equalize the playing field for all distilled spirits producers. Finally, this bill would cut administrative backlogs by ensuring the Alcohol and Tobacco Tax and Trade Bureau, which is charged with regulating these industries, is sufficiently funded. Additional enforcement funding and authority would help offset the cost of this bill by cracking down on tax cheats.
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