House Passes Extension of Wine Excise Tax Reduction
Wine Institute Urges Immediate Senate Action to Extend Craft Beverage Act
Washington, D.C. – Wine Institute applauds today’s vote in the House of Representatives to extend federal excise tax benefits for all wineries and urges the Senate to ensure this legislation becomes law. The appropriations legislation passed by the House today includes a one-year extension of the Craft Beverage Modernization and Tax Reform Act (S. 362/ H.R. 1175), and now must be approved by the Senate before being signed into law by the president.
“This is a critical step towards ensuring that the nearly 4,000 wineries across California can continue to grow and succeed by investing in their businesses and employees,” said Robert P. “Bobby” Koch, President and CEO of Wine Institute. “California wineries were able to re-invest over $150 million in tax savings in 2018 and 2019.”
Wine Institute has been working all year to extend the Craft Beverage legislation before it expires on December 31, 2019. This legislation extends through December 31, 2020 the reforms first enacted at the end of 2017 that create a fair and equitable tax structure for wineries. The Craft Beverage bill has 327 sponsors in the House and 74 in the Senate.
“The craft beverage bill has been an incredible boost for our industry and this extension allows us to continue investing in our wineries by buying new equipment, remodeling tasting rooms, hiring new employees and more,” said Hank Wetzel, founder and family partner of Alexander Valley Vineyards and Chairman of Wine Institute. “All of this benefits local communities in the form of jobs, tax revenue and support for the hospitality industry.”
The legislation will reduce excise tax payments for every winery in the country by expanding the value of the existing producer credit and doing away with the phase-out that has prohibited many wineries from receiving any benefit. Excise tax payments for small- to medium-sized wineries will be reduced 55 – 80+ %. The details on the original Craft Beverage provisions that will be extended can be found here.
Importantly for the wine sector, the legislation also includes a much-needed change that will allow bonded wine cellars and fulfillment centers to once again claim the tax credit on behalf of wineries without being subject to additional administrative burdens. This correction will be made retroactive to January 1, 2018.