ACSA, DISCUS Begin Push for Federal Tax Break

FILED MARCH 27, 2015

Just a couple of years removed from the Obama Administration's proposal to get rid of the excise tax credit for spirits with flavor additives, the American Craft Spirits Association (ACSA) and DISCUS have initiated a campaign to reduce the federal excise tax, per a joint release.

In order to avoid a fight with big distillers, ACSA and DISCUS propose to drop the excise tax rate from $13.50 per gallon to $2.70 per gallon for all distillers (and importers) for the first 100,000 gallons produced and a maximum rate of $9 for all gallons after that. See? Everybody wins.

"Legislation reducing the federal excise tax will encourage job creation and further investment by spirits producers across the country, while reducing the burden on consumers and hospitality businesses," says ACSA president Tom Mooney from House Spirits. "This is one of many ways small and large distillers are working together to ensure fair treatment for the entire spirits industry."

You may recall, the ACSA introduce a similar bill last year on its own [see WSD 03-10-2014]. The only difference in this year's proposal is that the fet rate will revert to $9 per gallon after the first 100,000 gallons and not the current rate of $13.50.

Last year, ACSA told WSD that a craft distiller producing just 30,000 proof gallons per year would save approximately $324,000 if the rate went down to $2.70 per gallon. To put it into perspective, Tuthilltown, which is on the larger side of craft distilling, made around 60,000 proof gallons last year.

So why did DISCUS get on board this time around? Because the political climate is different in 2015. For one thing, Republicans now control both the House and Senate. In addition, last year, Dave Camp, chairman of the House Ways and Means Committee, was pushing a draft tax overhaul and told members on his committee not to introduce any tax bills that would distract from his goal, according to DISCUS's vp, federal government relations Michele Famiglietti. "There just wasn't an effort by members to introduce tax bills," she said during the ACSA annual conference earlier this year. However, Dave retired this year after his proposal stalled, reports National Journal.

"I personally, and the folks at DISCUS, feel differently this time around," she continued. "We're seeing lots of industries jumping on board, particularly on the tax front, to introduce bills that had stalled."

The two groups will soon begin the process of drafting language for a bill and trolling for sponsors. We'll keep you updated as this story develops. In the meantime, send any thoughts to emily@winespiritsdaily.com

WSD BRIEFS:

WILLAMETTE VALLEY VINEYARDS UP 14.2%. Oregon-based Willamette Valley Vineyards has revealed that its net sales grew 14.2% to just over $15 million in 2014. The winery sold about 107,400 cases and expects to increase production to 120,000 cases in 2015, per an SEC statement. Founder and chief Jim Bernau says the company is "particularly pleased" with its direct sales, which represented about 28% of the company's sales in 2014.

FOUR ROSES TO ADD $8.4 MILLION BOTTLING PLANT. Four Roses has received preliminary approval for up to $800,000 in tax incentives for an $8.4 million expansion, reports Herald-Leader. The subsidiary of Japan's beer company Kirin will add a new 60,000-square-foot bottling plant they expect to begin operating in spring 2018.

WINES OF SPAIN LAUNCHING NEW CAMPAIGN. The Wines from Spain trade association is launching a new public relations and marketing campaign in the US. The campaign will focus on educating and promoting the diversity of Spanish wines to trade, press, and consumer audiences through media and trade relations, event marketing and dynamic digital media content. Last year, the value of Spanish wine imports to the US grew by 3%, a trend the group hopes to expand on with the launch of this national campaign.

GONZALES BYASS PICKS UP CHAMPAGNE PALMER. Gonzalez Byass US importer Vin Divino has agreed to take on Champagne Palmer. Champagne Palmer is a grower cooperative that began in 1947 and now features more than 200 members. Vin Divino will initially carry Palmer Brut Reserve NV, Palmer Rose Reserve NV, and Palmer Blancs de Blancs Vintage.

WINE & SPIRITS SUMMIT JUNE 2. Don't forget to reserve your spot at Wine & Spirits Daily's annual Summit, taking place June 1-2 at The Phoenician resort in Scottsdale, Arizona. Network with industry executives and take home new knowledge from our excellent speaker line-up . Register and learn more about the event on our website: www.winespiritsdaily.com/summit

Until tomorrow,
Emily

"I love deadlines. I like the whooshing sound they make as they fly by." -- Douglas Adams

THE 2015 WINE & SPIRITS DAILY SUMMIT is taking place at The Phoenician resort in Scottsdale, AZ June 1-2, 2015. Learn more about the event and register here: http://www.winespiritsdaily.com/summit

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