While many provisions of the Tax Reform Act signed into law by President Trump on December 22, 2017 have been widely covered, one provision of the law, which is of incredible importance to craft distillers (distillers producing under 100,000 gallons per year), has gone largely unnoticed. The new law, eases an enormous financial burden placed upon craft distillers, via a huge reduction of 80%, in an excise tax on production (not profits).
The tax, which was $13.50 per 100 proof gallon, has been reduced to $2.70 for craft distillers. To Epec - James FC Hyde Sorgho Whiskey, bottled at 86 proof, it means, as of Jan 1, our per bottle excise tax is reduced from $2.30 to $.46, affording us a production cost savings of $1.84 per bottle. The reduction in the tax frees up capital, that formerly went to the US Treasury, for investments in:
Whatever we decide to do with the savings, one thing is certain, the degree of difficulty in building a craft brand from scratch has gotten less difficult. For that we applaud the wisdom of the bipartisan, "Craft Beverage Modernization" provision which recognizes helping emerging craft distillers become big profitable distillers, and then collecting the $13.50 per gallon and taxes on profits, serves the interest of the US Treasury, craft distillers, their employees, customers, owners and vendors.
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