While wineries across the country are working to adjust to the new reality of life under Covid-19, WineAmerica has been hard at work to secure relief from Congress. We have been constantly on the phone with our beer, cider and distilled spirits partners and Congressional staff to outline what the beverage alcohol sector needs to remain a viable industry when this crisis abates. We know many of you have had to shutter your tasting rooms, cancel events and move to take-out sales only. Also, with more and more restrictions placed on what people can do, and where they can go, we will work to make sure that vineyard workers are exempt so you can still have a viable 2020 harvest.
We have asked Congress for the following:
Expand Unemployment Insurance
Make unemployment insurance available for all temporarily laid off or furloughed employees, with no long-term negative impact on employers’ insurance premiums.
Suspend Payroll taxes
Suspending payroll taxes has been a part of different relief proposals, and we support it because we believe it will help our members across the country.
Provide Robust no- and low-interest loan assistance.
Provide for robust funding for Small Business Association (SBA) Disaster Assistance Programs. No- and low-interest loans through SBA are necessary for affected businesses – including craft beverage producers operating on slim margins on the brink of closure, helping them to avoid lay-offs and pay bills. As few limits as possible should be placed on the ability for small businesses to access these loans regardless of existing lines of credit.
Ensure that the terms and conditions of existing and new commercial bank loans mirror those of SBA Disaster Assistance Loans. SBA Disaster Loans represent a critical economic lifeline for our industry, but small businesses must first exhaust access to other lines of credit. Recognizing the extraordinary burden the COVID-19 crisis places on the beverage alcohol industry, we urge Congress to consider ways to modify the conditions of current and new commercial banks loans undertaken during this time to bring them into greater alignment with disaster assistance loans. The government should authorize the SBA and encourage commercial lenders and certified development companies to defer principal and interest payments on business loans for customers.
Establish a beverage alcohol industry coordinator. Because our industry is unique and highly regulated, we would request that the Small Business Administration designate a principal coordinator for our industry and direct business loans for our industry.
Create an Industry stabilization fund
We also request a government-wide grant program from agencies that would prioritize our industry to help these small businesses through the financial crisis. This could include a stabilization fund of $5 billion to provide cash advances to ensure craft beverage businesses have enough receivables to pay their employees and to borrow against. We would ask that the Treasury create the program within 15 days of enactment and provide grants with minimal procedural delay.
Provide federal excise tax relief.
Suspend federal excise taxes on beverage alcohol products and waive penalties and interest fees on late payments, effective from January 1, 2020, through December 31, 2020. Many beverage alcohol producers pay excise taxes on a bi-weekly basis, and this relief will help keep businesses open.
Permanently enact the Craft Beverage Modernization and Tax Reform Act (H.R. 1175/S. 362). Making permanent the current rates for craft beverage producers by enacting a bipartisan bill with 342 House co-sponsors and 73 Senate co-sponsors provides certainty amidst economic instability and helps ensure they will be able to respond to economic duress and withstand this crisis.
Maintain an open commercial border
Our businesses, small and large, are part of a global supply chain that requires goods from abroad. Maintaining a border that is open for commerce will reduce the potential for supply shortages, and price gouging.
Seek the suspension of tariffs on beverage alcohol and their suppliers.
Tariffs are taxes on our business operations, and the elimination or reduction of those tariffs would maintain the health of our businesses and global supply chains.
Some of these items are in the proposal that Senate Majority Leader McConnell (R-KY) introduced last night, but none of the more specific asks we have listed here are in the proposal. We will continue to work the phones and push to get these items included in any new relief proposal. The Senate is expected to work through the weekend, and negotiations with the House have begun.
Meanwhile, Congress has already passed two covid-19 related bills. This week H.R.6201, the Families First Coronavirus Response Act, responds to the coronavirus outbreak by providing paid sick leave and free coronavirus testing, expanding food assistance and unemployment benefits, and requiring employers to provide additional protections for health care workers. To see a full summary of this legislation please go here: https://www.congress.gov/bill/116th-congress/house-bill/6201
This is a fluid situation, please watch for any updates from us in the future.