This Tax Cut for Distilleries Just Became Permanent

The Craft Beverage Modernization and Tax Reform Act offers much-needed relief

John Fedele / Getty Images

While craft distilleries are suffering during the pandemic, there is some good news for the booze industry to end the year: the end of a potentially onerous liquor tax.

Buried within the latest government stimulus package is a permanent continuation of the Craft Beverage Modernization and Tax Reform Act. As noted by the trade publication The Spirits Business, this tax cut was introduced in 2017 and sees distillers pay $2.70 per proof gallon for the first 100,000 gallons produced in a calendar year. Before CMTRA, distilled spirits were taxed at $13.50 per proof gallon.

This tax reduction, extended for a year late in 2019, was certainly a factor in the opening of 2,000 new breweries and 400 new distilleries since the legislation went into effect. And now, it could serve as an important lifeline to those same small businesses.

“I’ve seen first-hand how incentives for craft beverage producers have helped Oregon small businesses grow, hire and provide new benefits to their workers,” said Senate finance committee ranking member Ron Wyden. “Extending these breaks is especially important given how hard the pandemic has hit these small businesses.”

Now: Go support craft spirits. And hope for (and push for) passage of the Restaurants Act, which would more directly help the venues that serve these beverages.


Join America's Fastest Growing Spirits Newsletter THE SPILL. Unlock all the reviews, recipes and revelry — and get 15% off award-winning La Tierra de Acre Mezcal.