Late last night, the Senate Finance Committee passed the Tax Cuts and Jobs Act, which includes significant reductions in the federal excise tax on beer, wine and spirits for two years.
The measure now goes to the full Senate. It’s outlook there is uncertain.
The bill lowers the rate of tax on beer to $16 per barrel on the first six million barrels brewer by a brewer or imported by an importer. The current rate is $18 a barrel. For small brewers, the rate is cut to $3.50 a barrel from $7 on the first 60,000 barrels domestically produced. The $16 rate applies to barrels in excess of 60,000.
The bill also provides a credit against the wine excise tax. The credit amount is $1 per gallon for the first 30,000 gallons of wine; 90 cents per gallon on the next 100,000 gallons, and 53.5 cents per gallon on the next 620,000 gallons.
The measure also lowers the tax on distilled spirts to $2.70 per proof gallon on the first 100,000 proof gallons; $13.34 per proof gallon on the next 22,030,000 proof gallons and $13.50 for amounts thereafter.
In other provisions, the measure also excludes the aging periods for beer, wine and distilled spirits from the production period for purposes of the UNICAP interest capitalization rules.
The measure also permits transfers of beer in bond, removing a requirement that both brewers have common ownership. For distilled spirits, the proposal allows distillers to transfer spirits in approved containers other than bulk containers without payment of tax.
Assuming the measure passes the full Senate, it will have to go to a conference with members of the House to reconcile the two bodies’ tax reform packages. The House measure does not include the CRAFT provisions.
Senate Finance Committee Chairman Orrin Hatch (R-Utah) described the measure as “a strong pro-growth, pro-jobs, pro-family tax overhaul.” He said it doubles the standard deduction, lowers tax rates and doubles that child tax credit.