The Small Distilleries Fairness Act, a bill cosponsored by Rep. Rick Larsen, is a sensible, straightforward, non-controversial, needed, economic-driven piece of legislation … so we’ll see if it ever makes it out of Congress.
The small distilleries face the same challenge micro breweries and small wineries experienced before them — trying to compete against big-name, big-monied alcohol producers while paying the same federal tax as the large producers. Which brings us to Congress.
The bill gives small distilleries the same help Congress has provided for small breweries and wineries, Herald Writer Dan Catchpole reported this week. Craft beermakers pay about 39 percent of the excise tax that large breweries do, and small wineries pay 18 percent, compared to big-name vintners.
The proposed bill would cut the amount of federal excise tax paid by small distilleries by 80 percent. For Everett’s Bluewater Organic Distilling, that would mean paying $287 in excise tax on a pallet of 56 cases of liquor, instead of the current $1,438, Catchpole reported.
Jason Parker, head of the Washington Distillers Guild and co-owner of Copperworks Distilling Co. in Seattle, which sells vodka and gin, said the bill would save his company nearly $90,000 on the sale of 3,000 cases of vodka and gin this year.
Both distillers told Catchpole they plan to invest the savings back into their businesses by hiring more workers, producing more and in Bluewater’s case, expanding the entire business into a new storefront, and opening a bar.
Larsen sponsored a similar bill in 2013, but it died without getting a vote. The current bill, cosponsored by Ohio Republican Rep. Steve Stivers, has the best chance of succeeding if it is folded into larger tax legislation, Larsen said. That seems an iffy and overused strategy, but that’s Congress.
This legislation is particularly important to our state because, of last year, we led the nation in liquor produced in small distilleries, the Spokesman-Review reported. Of the 450 craft distilleries licensed in the U.S., 113 of them are located in Washington, the most in the nation. And all of them have sprouted since 2008, when the Legislature passed the original craft distillery law, paving the way for Spokane’s Dry Fly Distillery to open — the first such distillery to open in the state since before Prohibition.
The American craft liquors also happen to be a big hit in Europe, the New York Times reported. Young, innovative bartenders in London, Paris and Berlin are impressed with the “handmade authenticity, independence and innovation,” the paper reported. Perhaps some authentic, innovative import fees can replace what’s lost in lower excise taxes on small distilleries. If the bill manages to get folded into some bigger tax legislation, that is.
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