Makers of craft beer, artisanal spirits, hard cider and mead may lift their glasses a bit higher next year as the result of a little noticed provision in the sweeping tax overhaul the U.S. Congress passed this week.
Tucked away in Part IX, sections 13801 through 13808, are sharply lowered excise taxes on a liquor cabinet full of alcoholic beverages made by small producers.
The lowered tax gives the small producers a little more profit that can help them expand, experiment, market or even lower prices. For example, for hard ciders made with any kind of fruit besides apple or pear, the new law substantially lowers the tax to 7 cents a gallon from $1 for small producers. Cider had been taxed depending on what kind of fruit was used.
Small producers of distilled spirits, like gin, vodka or bourbon, will pay $2.70 a gallon in tax on the first 100,000 gallons made compared with $13.34 a gallon levied above that level.
Craft beermakers will pay tax of only $3.50 a barrel on the first 60,000 barrels brewed. Big producers of more than 6 million barrels will pay $18 a barrel, the current level for beer. A beer barrel is set at 31 gallons (117 liters).