WASHINGTON, D.C. –
Nearly 100 spirits industry professionals from across the country climbed Capitol Hill on Tuesday as part of the ongoing effort to ensure that the reduction in the Federal Excise Tax (FET) passed last December is made permanent.
The Craft Beverage Modernization and Tax Reform Act (CBMTRA)—passed as part of Congress’s broader tax reform bill at the end of 2017—reduced the tax burden on the first 100,000 proof gallons of distilled spirits from $13.50 to $2.70 per gallon. The reduction is set to expire at the end of 2019 and members of The American Craft Spirits Association (ACSA) and the Distilled Spirits Council made preventing that from happening priority No. 1 at the two groups’ joint Public Policy Conference this week.
ACSA Executive Director Margie A.S. Lehrman said it’s okay to take a bit of “victory lap” for CBMTRA’s passage, but it’s also time to refocus on the battle ahead.
“Now is our time to take that same energy—that same vision of where we can go—to Congress and make that happen again,” Lehrman said.
Mark Gorman, Senior Vice President of Government Relations for the Distilled Spirits Council, says the industry is already reaping the benefits of the tax reduction as member companies are putting the money back into their companies. “We’re working overtime to make sure this becomes a permanent part of the U.S. tax code,” Gorman said.
The attending spirits industry professionals were heartened by the words of some allies from the Hill, as Senators and Senatorial staff offered their support in the fight.
Attendees greeted Senator Ron Wyden (D-OR), who co-sponsored the bi-partisan Senate version of the bill with Senator Roy Blunt (R-MO), with a rousing ovation as he entered the conference room at the Senatorial office building.
“You were clapping for me, but just put it on the Congressional record that I am clapping for you,” Wyden told attendees. “This is a product that is on the right side of history.”
Wyden pledged to continue to push to ensure the benefits of the CBMTRA do not expire. “We’re going to keep at it,” Wyden said, “until we make the law you all worked so hard for permanent.”
Attendees greeted Blunt with equally enthusiastic applause, underlining the bi-partisan nature of the tax reform effort. Blunt reminded the audience that the greatest tool they have is their own authentic stories.
“[FET reduction] is a good idea and it would be much better to have it as a permanent idea,” Blunt said. “Make a case for why this matters, make a case for how it allows you to compete, make a case for what this does for you.”
Senator Todd Young (R-IN) also stressed the importance of a good story.
“I went to business school where they tell you all businesses are basically the same,” Young said. “I never really bought into it. I find that some businesses are more fun than others, and I find your business fun. Telling your story has made it easy for me to be a key player in this.”
For example, it will be critical for small distillers to emphasize how the FET reduction is enabling them to hire more staff and re-invest in their companies, spurring economic growth in their home states.
Mark Isakowitz, chief of staff for Senator Rob Portman’s (R-OH) also offered some insight for spirits producers. Portman was instrumental in getting CBMTRA included in the broader tax reform bill at the eleventh hour. The future of FET reduction, he noted, depends greatly on support from both sides of the aisle. “We thought it was a great victory to get [FET reform] in the law and we’ll keep fighting for it,” Isakowitz said. “We’re going to have to make this a bi-partisan to keep it.”
Distillers also heard from Liz Strimer, legislative assistant to Senate Majority Leader Mitch McConnell, who called the larger tax bill—officially, the Tax Cuts and Jobs Act of 2017— “a once in a generation opportunity.”
Earlier in the day, spirits producers heard some encouraging words from the regulatory side of the government. John Manfreda, Administrator of the U.S. Alcohol and Tobacco Tax and Trade Bureau, expressed a desire to see all spirits producers succeed.
“I’m a real believer that that the regulators and the people they regulate should get to know each other,” Manfreda said. “The more we interact, the better we understand each other. And the better we understand each other the better we understand each other’s needs...We’re here to help you comply, we’re not here to put you out of business.”