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Representatives Kind and Kelly Reintroduce Craft Beverage Modernization and Tax Reform Act

February 14, 2019 by control

WineAmerica Set Sights on Permanence

Washington, D.C. • February 13, 2019 – The Craft Beverage Modernization and Tax Reform Act (CBMTRA) was reintroduced in the U.S. House of Representatives today with strong support from a broad group of industry trade associations including the beer, wine, spirits, and cider sectors.

The legislation, which was first introduced in 2015 to recalibrate federal excise taxes and streamline regulations on beverage alcohol producers, was reintroduced in 2017 by Representatives Erik Paulsen (R-MN) and Ron Kind (D-WI), garnering strong support from the majority of Congress as well as industry groups. Legislation that included a two-year provision of CBMTRA passed in December 2017 as part of the broader Tax Cuts and Jobs Act.

Representatives Kind and Mike Kelly (R-PA) are the lead co-sponsors of the bill upon its reintroduction today. They were joined by: Darin LaHood (R-IL), Chellie Pingree (D-ME), Patrick McHenry (R-NC), Earl Blumenaeur (D-OR), Peter DeFazio (D-OR), and Dan Newhouse (R-WA).

Leaders from the Brewers Association (BA), Beer Institute, WineAmerica, Wine Institute, Distilled Spirits Council, American Craft Spirits Association, and U.S. Association of Cider Makers agree that the legislation creates a more fair and equitable tax structure for beverage alcohol producers and their consumers. The legislation empowers these key economic players to continue to invest in their businesses and boost jobs across the country.

“The American wine industry generates more than $220 billion annually for the American economy through investments, jobs, tourism, and taxes,” said Jim Trezise, president of WineAmerica. “The Craft Beverage Modernization and Tax Reform Act enhanced our industry’s ability to contribute even more by channeling tax savings into purchases of new equipment, additional employees, increased wages, expanded distribution, and facility enlargements. The wine business is highly competitive, capital intensive, and labor intensive, so having extra funds available provides a real boost to our industry’s growth. We are deeply grateful for the original legislation, and respectfully urge that it be made permanent.”

###

 

Contact:

Michael Kaiser: mkaiser@wineamerica.org 

 

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About WineAmerica

The mission of WineAmerica is to encourage the dynamic growth and development of American wineries and winegrowing through the advancement and advocacy of sound public policy.

WineAmerica was founded in 1978 as the Association of American Vintners, a trade association of wineries with membership based in the eastern U.S. By 1991, the association had expanded and merged with the National Vintners Association forming the American Vintners Association. The association was renamed WineAmerica in 2003 to reflect its national role.

WineAmerica serves the interests of wineries in all 50 states by leveraging its formidable grassroots advocacy strength to benefit the entire industry.

 

Filed Under: The News Post

Senators Wyden and Blunt Reintroduce Craft Beverage Modernization and Tax Reform Act

February 6, 2019 by control

Beverage Alcohol Producers Set Sights on Permanence

Washington, D.C. • February 06, 2019 –  The Craft Beverage Modernization and Tax Reform Act (CBMTRA) was reintroduced in the U.S. Senate today with strong support from a broad group of industry trade associations including the beer, wine, spirits, and cider sectors.

The legislation, which was first introduced in 2015 to recalibrate federal excise taxes and streamline regulations on alcohol beverage producers, was reintroduced in 2017 by Senators Ron Wyden (D-OR) and Roy Blunt (R-MO), garnering strong support from the majority of Congress as well as industry groups. Legislation that included a two-year provision of CBMTRA passed in December 2017. Senators Wyden and Blunt are once again the lead co-sponsors of the bill upon its reintroduction today.

“People around the world enjoy Oregon wine, craft beer, cider and spirits—providing not only a serious source of home state pride but also a huge boon to our state’s economy,” Wyden said. “By modernizing burdensome rules and taxes for craft beverage producers, this legislation will level the playing field and allow these innovators to further grow and thrive.”

“The craft beverage industry is driven by small businesses that support thousands of jobs and contribute billions in economic output,” said Blunt. “This bill will remove tax and regulatory barriers that are making it harder for Missouri’s brewers, distillers, and winemakers to grow and compete. I’m encouraged by the strong, bipartisan support this measure had in the previous Congress and look forward to working with our colleagues to get it to the president’s desk.”

Leaders from the Brewers Association (BA), Beer Institute, WineAmerica, Wine Institute, Distilled Spirits Council, American Craft Spirits Association, and U.S. Association of Cider Makers agree that the legislation creates a more fair and equitable tax structure for beverage alcohol producers and their consumers. The legislation empowers these key economic players to continue to invest in their businesses and boost jobs across the country.

“Small and independent craft brewers are grateful for the ongoing bipartisan support for the Craft Beverage Modernization and Tax Reform Act,” said Bob Pease, president and CEO of the Brewers Association. “The legislation is not just economically smart but enables Main Street brewers to do what they do best: create and innovate. Our brewers can be found in every state and employ more than 135,000 Americans. They are at the heart of what makes small businesses so important to the nation’s greater economy. We remain hopeful that this legislation will be made permanent to support the small brewers of today and tomorrow.”

“I want to thank Senators Blunt, Portman, and Wyden as well as numerous members of Congress from both sides of the aisle and across the country for their continued commitment to providing excise tax relief to all of our nation’s brewers and beer importers,” said Jim McGreevy, president and CEO of the Beer Institute. “Since our nation’s inception, brewers and beer importers have been integral to our national fabric. Today, America’s beer industry continues to be a crown jewel in our nation’s manufacturing sector, supporting more than 2.2 million good-paying jobs and pouring more than $350 billion into the national economy. Making federal excise tax relief permanent for our nation’s brewers and importers will enable them to continue to innovate, invest in their businesses, support jobs, and give back to their communities.”

“The American wine industry generates more than $220 billion annually for the American economy through investments, jobs, tourism, and taxes,” said Jim Trezise, president of WineAmerica. “The Craft Beverage Modernization and Tax Reform Act enhanced our industry’s ability to contribute even more by channeling tax savings into purchases of new equipment, additional employees, increased wages, expanded distribution, and facility enlargements. The wine business is highly competitive, capital intensive, and labor intensive, so having extra funds available provides a real boost to our industry’s growth. We are deeply grateful for the original legislation, and respectfully urge that it be made permanent.”

“Without a doubt, CBMTRA is having the intended positive effect on wineries all over the country,” said Bobby Koch, president & CEO of the Wine Institute. “Wineries are using the tax savings to invest in the future growth of their businesses, and in doing so, are supporting their families, their employees, and their communities.”

“The Craft Beverage Modernization and Tax Reform Act marked the first federal excise tax reduction for distilled spirits since the Civil War and enabled distilleries to invest back into their businesses and communities across the United States,” said Distilled Spirits Council CEO Chris Swonger. “Making this legislation permanent would provide stability for distillers in moving forward to generate new jobs and support local agriculture and tourism.”  

“Federal excise tax reform has dramatically helped to stimulate craft spirits growth, and a permanent relief is critically important to securing the future of our industry,” added Margie A.S. Lehrman, CEO, American Craft Spirits Association. “As of August 2018, the number of active craft distillers in the U.S. had grown by 15.5% over the last year to nearly 2,000, yet without permanent and immediate reform, the stability of this vibrant industry is bound to be paralyzed. Without the certainty of a long-term reduction, it is impossible for any new or existing distillery to implement a business plan when the wide tax variable threatens the ability to hire new employees,  purchase equipment, provide staff benefits, and continue to grow.”

“Regional-brand cider sales increased 22 percent last year, and more than 100 cideries opened their doors for the first time. Hard cider is now produced in 48 states. Much of the cider category’s growth is attributable to the excise tax credits these companies are now receiving,” said Michelle McGrath, executive director, U.S. Association of Cider Makers. “Small cideries are expanding their staff and operations in a direct response. The industry can continue to support manufacturing, neighborhood renewal projects, rural economies, and orchardists, but we need these credits to stick around on a permanent basis to do so. Sunset clauses are no way to plan a business, and cider taxes are extremely complex—uncertainty makes navigating them even more challenging. We’re hopeful to once more see broad bipartisan support for making these credits permanent with the Craft Beverage Modernization and Tax Reform Act. The margins are so tight in cider that many family-owned cideries are literally depending on it.”

A full list of Craft Beverage Modernization and Tax Reform Act co-sponsors and supporters can be found here.

###

Contact:

Maggie McClain (on behalf of the Brewers Association)

mmcclain@bannerpublicaffairs.com

703.485.6551

Ramsey Cox (on behalf of the Beer Institute)

rcox@beerinstitute.org

202.737.2337

Michael Kaiser (on behalf of WineAmerica)

mkaiser@wineamerica.org

202.223.5172

Gladys Horiuchi (on behalf of the Wine Institute)

Communications@Wineinstitute.org

Frank Coleman (on behalf of the Distilled Spirits Council)

fcoleman@distilledspirits.org

202.682.8840

Alexandra Clough (on behalf of the American Craft Spirits Association)

alexandra@gatherpr.com

516.428.7210

Michelle McGrath (on behalf of the U.S. Association of Cider Makers)

Michelle@ciderassociation.org

503.593.1716

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About the Brewers Association

The Brewers Association (BA) is the not-for-profit trade association dedicated to small and independent American brewers, their beers and the community of brewing enthusiasts. The BA represents 4,800-plus U.S. breweries. The BA’s independent craft brewer seal is a widely adopted symbol that differentiates beers by small and independent craft brewers. The BA organizes events including the World Beer Cup®, Great American Beer Festival®, Craft Brewers Conference® & BrewExpo America®, SAVOR™: An American Craft Beer & Food Experience, Homebrew ConTM, National Homebrew Competition and American Craft Beer Week®. The BA publishes The New Brewer® magazine, and Brewers Publications® is the leading publisher of brewing literature in the U.S. Beer lovers are invited to learn more about the dynamic world of craft beer at CraftBeer.com® and about homebrewing via the BA’s American Homebrewers Association® and the free Brew Guru® mobile app. Follow us on Facebook, Twitter and Instagram.

The Brewers Association is an equal opportunity employer and does not discriminate on the basis of race, color, national origin, gender, religion, age, disability, political beliefs, sexual orientation, or marital/familial status. The BA complies with provisions of Executive Order 11246 and the rules, regulations, and relevant orders of the Secretary of Labor.

About the Beer Institute

The Beer Institute is a national trade association for the American brewing industry, representing brewers of all sizes, as well as beer importers and industry suppliers. First founded in 1862 as the U.S. Brewers Association, the Beer Institute is committed today to the development of sound public policy and to the values of civic duty and personal responsibility. For additional updates from the Beer Institute, visit our website, follow @BeerInstitute on Twitter, like the Beer Institute on Facebook, and follow the Beer Institute on Instagram.

About WineAmerica

The mission of WineAmerica is to encourage the dynamic growth and development of American wineries and winegrowing through the advancement and advocacy of sound public policy.

WineAmerica was founded in 1978 as the Association of American Vintners, a trade association of wineries with membership based in the eastern U.S. By 1991, the association had expanded and merged with the National Vintners Association forming the American Vintners Association. The association was renamed WineAmerica in 2003 to reflect its national role.

WineAmerica serves the interests of wineries in all 50 states by leveraging its formidable grassroots advocacy strength to benefit the entire industry.

About the Wine Institute

Established in 1934, Wine Institute is the public policy advocacy group of nearly 1,000 California wineries and affiliated businesses that works to enhance the environment to responsibly produce, promote and enjoy wine. Wine Institute also supports the economic and environmental health of its communities through its leadership in sustainable winegrowing and a partnership with Visit California to showcase California’s wine and food offerings and the state as a top travel destination. Wine Institute’s membership represents 80 percent of U.S. wine production and over 90 percent of U.S. wine exports. For information visit www.wineinstitute.org or its consumer website at: www.discovercaliforniawines.com.

About the Distilled Spirits Council

The Distilled Spirits Council is the national trade association representing the leading producers and marketers of distilled spirits in the United States. The Council guards the sector against higher taxes and works diligently to reduce trade barriers across the globe, while supporting policies that increase adult market access for spirits products, provide greater convenience and choices for adult consumers, and encourage responsible and moderate consumption. The Council is a go-to resource for sector data, changes in public policy, cultural acceptance programs, U.S. spirits exports to foreign markets, and alcohol and science.  For more information about the Council, go to www.distilledspirits.org.

About the American Craft Spirits Association

The American Craft Spirits Association is the only national, registered non-profit trade association that exclusively represents the U.S. craft spirits industry. Its mission is to elevate and advocate for the community of craft spirits producers, and membership in ACSA is open to anyone.  

ACSA is governed by a Board of Directors elected by the eligible voting members of the Association.  Voting members must be independent, licensed distillers (DSPs) annually removing fewer than 750,000 proof gallons from bond (the amount on which a Federal Excise Tax is paid.) who subscribe to ACSA’s Code of Ethics.

About the United States Association of Cider Makers

The USACM is an organization of cider and perry producers in the United States. Our mission is to grow a diverse and successful U.S. cider industry by providing valuable information, resources and services to our members and by advocating on their behalf.

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Filed Under: The News Post

WineAmerica Elects New Board Members

November 26, 2018 by control

11.26.2018

WineAmerica held its latest Board of Directors election in October, and the results were certified on November 13  at the 2018 Fall Board Retreat in Fredericksburg, Texas. WineAmerica is pleased to welcome three new board members: Scott Osborn of Fox Run Vineyards in the Finger Lakes representing New York; Garrett Portra of Carlson Vineyards in Colorado representing the Rocky Mountain region; and Ryan Pennington of Ste. Michelle Wine Estates in an at-large seat. We are excited to have them on the Board and know they will be excellent additions. We also had a change in the leadership of the State and Regional Associations Advisory Council (SRAAC). With the the retirement of Debbie Reynolds of the Texas Wine and Grape Growers Association, we are pleased to welcome Lori Paulsen from the Nebraska Wine and Grape Growers Association to the WineAmerica Board as the new SRAAC Chair. We thank Debbie for her service and wish her well. Josh McDonald of the Washington Wine Institute is the new SRAAC Vice Chair.  Please see below for the current makeup of the WineAmerica Board of Directors:

 

Northeast

Mario Mazza, Mazza Vineyards, Pennsylvania

New York

Scott Osborn, Fox Run Vineyards

Southeast

Rob Ramsey, Stonehaus Winery, Tennessee

Great Lakes

Dana Huber, Huber Vineyards, Indiana

Midwest

Peter Hofherr, St. James Winery, Missouri

Rocky Mountain

Garrett Portra, Carlson Vineyards, Colorado

Washington

Marty Clubb, L’Ecole No. 41, Chair*

Oregon

Janie Brooks Heuck, Brooks Winery, Vice Chair*

California

Debra Dommen, Treasury Wine Estates, Secretary/Treasurer*

Katie Jackson, Jackson Family Wines

At-Large

Jerry Douglas, Biltmore Estate Wine Company, North Carolina

Max McFarland, Mac’s Creek Vineyards and Winery, Nebraska

Eddie O’Keefe, Chateau Grand Traverse, Michigan

Lori Paulsen, Nebraska Wine and Grapegrowers Association, SRAAC Chair*

Ryan Pennington, Ste. Michelle Wine Estates, Washington, Oregon and California

Michael Walker: Constellation Brands, Government Affairs Committee Chair*

Kirk Wiles, Paradise Springs Winery, California and Virginia

 

*Executive Committee

Filed Under: The News Post

WineAmerica Applauds Excise Tax Law Development

May 17, 2018 by control

For Immediate Release

Thursday, May 17, 2018

WASHINGTON, DC–WineAmerica is delighted that wineries throughout the country will now be able to take full advantage of reduced federal excise taxes due to an announcement by the federal Alcohol and Tobacco Tax and Trade Bureau (TTB) that it is extending an “alternate procedure” through December 31, 2019.

“This ruling now ensures that the Congressional intent of the Craft Beverage Modernization and Tax Reform Act (CMBTRA) will be fulfilled by allowing all wineries to benefit, and also allows more time to seek additional changes to enhance the law’s full potential,” said WineAmerica President Jim Trezise. “We are grateful to our staff, lobbyists, Congressional supporters, and the TTB for this positive development.”

WineAmerica, the National Association of American Wineries, worked on the CBMTRA for three years leading up to its passage last December as part of the broader Tax Cuts and Jobs Act, which went into effect January 1, 2018. The law reduced federal excise taxes on wine through a system of tax credits and other means, giving winery owners new capital to invest in their businesses.

However, during the legislative process some changes in language occurred which TTB then interpreted as allowing the tax cuts to apply only to wines fully controlled by the producer from production to storage and final sale. This would nullify the benefits for the many wineries which use “custom crush” arrangements or store their wines offsite at bonded wine cellars, causing enormous financial hardship.

WineAmerica Vice President Michael Kaiser, accompanied by Larry Meyers and Fran Boyd of Meyers & Associates, immediately got back to work after TTB’s March 2 guidelines created an “alternate procedure” which would allow all wineries to take advantage of the tax credits only until June 30, 2018. After that, those involved with custom crush or bonded wine cellars would have to pay the full excise tax rate, a 15-fold increase for many.

WineAmerica began working on this issue immediately in early March, and while there has been much activity and many meetings with both Republican and Democrat House and Senate members, two key meetings occurred on Thursday, May 10 with Oregon Senators Jeff Merkley and Ron Wyden. Their constituent, Janie Brooks Heuck, co-owner of Brooks Wines in the Willamette Valley as well as Vice Chair of the WineAmerica Board, met with both Senators in Washington, DC and explained how the TTB’s initial guidelines would significantly affect her winery and hundreds like it nationwide. Two days earlier, Jana McKamey of the Oregon Winegrowers Association had also spoken with the staff of her Senators.

Immediately after the Thursday morning meeting, Janie was contacted by her Senator’s staff letting her know that TTB officials had agreed to extend the guidelines until the end of next year. This continues a pattern of Oregon winery principals, trade associations, and legislators playing leadership roles, starting when Senator Wyden actually initiated the CBMTRA three years ago. It’s also a classic example of the power of national grassroots public policy advocacy through WineAmerica’s coordination of individual wineries, state trade associations, and the national association.

Senators Roy Blunt (R- Missouri) and Rob Portman from (R-Ohio) also played key roles both in the inclusion of the CBMTRA in the broader Tax Cuts and Jobs Act, and in clarifying Congressional intent that all American wines were intended to benefit from the tax credits. Their respective states both have robust and growing wine industries, and their leadership on this issue is helping the entire American wine industry. The fact that leading Senators from both parties worked on our behalf to fix this problem illustrates the bipartisan appeal of the CMBTRA and the wine industry in general.

“We are very fortunate to have such strong bipartisan support from our public officials, as well as the dedicated staff at WineAmerica and our lobbying team,” said Janie Brooks Heuck. “Because WineAmerica has winery members from 42 states, we have broad reach in Congress when issues like this arise.”

Still, there is more work to be done on this issue. While the TTB recent policy decision is very encouraging and a big relief, ultimately a statutory change in the legislation needs to be done.  In addition, currently the tax reductions are scheduled to end on December 31, 2019, and WineAmerica will actively seek to make them permanent.

WineAmerica is also grateful for the support of our partners in the alcohol beverage coalition, including Wine Institute, the Distilled Spirits Council, the American Craft Spirits Association, Beer Institute, and the Brewers Association. Our industry coalition was key to passing the CBMTRA in the first place, and the associations in the spirits and beer sectors supported the wine industry on this particular issue even though they themselves were not directly affected. As someone once said, “Diversity is our Strength. Unity is our Power.”

–end–

Media Contact: Michael Kaiser, mkaiser@wineamerica.org, 202-223-5172

 

Filed Under: The News Post

TTB Industry Circular 2018-1 Undermines the Intent of the Craft Beverage Modernization and Tax Reform Act and Threatens American Wine Industry

March 19, 2018 by control

By Michael Kaiser, Vice President

3.19.18

Background

A two- year version of the Craft Beverage Modernization and Tax Reform Act (CBMTRA) was passed as part of the Tax Cuts and Jobs Act. The President signed the bill into law on December 22, 2017, and the new excise tax reforms were implemented on January 1, 2018.

TTB has been gradually issuing guidance on the reforms, including a proposal on March 2 concerning  the tax credits being taken on bonded wine cellars (BWC). Under the existing small producer tax credit, bonded wine cellars were eligible to take the credit for the specific wineries they were storing the wine for, and would bill the wineries based on the taxes paid. TTB has ruled that the temporary tax credits are a suspension of the previous tax credits, and the new credits cannot be applied by a bonded wine cellar.  

Issue

Under the new ruling from TTB, only wine that is produced by the taxpayer and is removed by the same taxpayer is eligible for the new tax credits. Any wine that is removed in bond from a winery and transferred to a bonded wine cellar or another winery is not eligible for the credits. Many small wine brands use what is known as a custom crush facility. That is, a wine brand will make their wine at another winery’s facilities because they do not have their own production space. Without the ability of a bond to bond transfer the smallest wineries in the country will face a substantial tax increase.

As mentioned above, the TTB will no longer allow bonded wine cellars to take tax credits on behalf of other wineries that are storing their wine at their respective facilities. This arrangement was previously allowed in the currently suspended Small Producer Tax Credit. The language of the two -year bill that was passed as part of the Tax Cuts and Jobs Act does not state that the Small Producer Credit was to be eliminated altogether. The original version of the Craft Beverage Modernization and Tax Reform Act stipulated this, and that all bonded wine cellars would be allowed to apply the new tax credits on behalf of wineries. The TTB is applying a strict interpretation of the law’s language, which led to this decision. TTB has permitted wineries to continue to allow bonded wine cellars to take the credits on their behalf until June 30, 2018 using “on paper” transfers of wine in bond (pre-tax).

Implications for Wineries

If this is not fixed regulatorily or legislatively, many wine producers will face sharp tax increases, rather than receive new tax savings as intended by the Craft Beverage Modernization and Tax Reform Act. There are several serious implications for wineries:

  • Not all of the wine sold by a winery may be eligible for the new tax credits because it was produced at another facility, then transferred to and bottled at the winery that sells the wine.
  • Many wineries store significant amounts of wine at bonded wine cellars. Many producers simply do not have the space to store all of their wine produced at that particular production facility. With bonded wine cellars no longer allowed to take credits on the stored wine, many wineries will face significant tax increases.
  • Many wineries will face significant recordkeeping costs if a portion of their wine  production does not qualify for tax credits.
  • Small wineries that qualified for the Small Producer Credit who do not produce their own wine at their own facility will no longer qualify for any tax credits and will pay the full tax rate on their wine. A significant tax increase for many small businesses that was not anticipated and the exact opposite of the intention of the bill.
  • A preliminary survey of wineries indicated that the vast majority intend to use their projected savings from the CBMTRA to invest in their businesses by hiring new people, investing in new facilities, purchasing new equipment, and expanding their marketing. If the current TTB guidelines were implemented, these investments would almost certainly disappear.
  • A major economic impact study sponsored by WineAmerica showed that in 2017 the American wine industry generated $220 billion in economic benefits to the American economy. The vast majority of the roughly 10,000 American wineries in all 50 states are small, family businesses which would be severely hurt by implementation of these guidelines, as would the industry’s overall contribution to the U.S. economy.

Action

WineAmerica is working with industry colleagues, the TTB and Congressional staff to remedy this situation. The first step is to request that TTB either reverse their decision or to extend the “alternative procedure” beyond June 30. They have the regulatory authority to do this.

Secondly, WineAmerica urges the House Ways and Means Committee and the Senate Finance Committee to pass a technical corrections bill as soon as possible. A legislative fix would negate TTB’s decision and would remedy the situation.

Filed Under: The News Post

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