Craft distilleries are facing an uncertain future as they may be facing a 400% tax increase come January 1st. In 2017, a temporary tax cut was enacted that dropped the excise tax on liquor made from small distillers from $13.50 per proof gallon to $2.70 per proof gallon. In addition to the shear amount of the tax, the tax was due when the alcohol left the distiller, so it needed to be paid way before the sales became to come in. With the tax relief many distilleries reinvested in their business, adding employees, equipment and locations.
The tax relief is set to expire at the end of 2019. The Distilled Spirits Council is among the organizations lobbying to make the cuts permanent.
Here’s Herman Mihalich of Dad’s Hat Rye explaining what the cut means to his Bristol, PA distillery.
Here’s how to reach your local legislators to encourage them to support making the tax cuts permanent for craft distillers.