Welch holds roundtable with distillery industry leaders

News Release — Rep. Peter Welch
June 19, 2015

Contact:
Kirsten Hartman, Communications Director
(202) 225-4115

Congressman announces support for Distiller Innovation and Excise Tax Reform Act

MIDDLEBURY, Vt. – Rep. Peter Welch today convened a meeting of Vermont’s distillery industry leaders to discuss the opportunities and challenges facing this growing sector of Vermont’s economy. At the meeting, he announced his support for bipartisan legislation to provide tax incentives for Vermont’s distilleries.

“Vermont’s distilling industry exemplifies Vermont’s entrepreneurial culture. These vital small businesses are creating good, local jobs all over the state,” Congressman Welch said. “I am happy to support this legislation which will give distillers a boost so they can continue to innovate, expand and succeed.”

Under current law in the distilled spirits industry, 54 percent of an average distiller’s revenues go to taxes and fees. The Distillery Innovation and Excise Tax Reform Act (HR. 2520), would bring distillers on par with the tax rates enjoyed today by brewers and vintners.

The bill would reduce the current federal excise tax from the current $13.50 per proof gallon to $2.70 on the first 100,000 proof gallons produced by a distillery. Any gallon produced over the 100,000 threshold would be taxed at $9.00.

“A lower federal excise tax allows distillers to continue to strengthen the Vermont brand by introducing more high-quality products and marketing them in Vermont and throughout the United States,” Jeremy Elliott, Co-owner of Smugglers’ Notch Distillery and President of the Vermont Distilled Spirits Council, said. “This positive exposure and association benefits all Vermont-made products. A big thanks to Rep. Welch for his support on this effort.”

Welch was joined today at the roundtable by Jeremy Elliot, Owner of Smugglers’ Notch Distillery and President of the Vermont Distilled Spirits Council; Sivan Cotel and Sas Stewart, Co-Owners of Stonecutter Spirits; Leo Gibson of Whistlepig Whiskey; Harold Faircloth and Tim Danahy, Owners of Green Mountain Distillers; and Mimi Buttenheim, President of Mad River Distillers, among others.

 

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  • Barry Clark

    For distilled spirits, the tax was $10.50 per proof gallon in 1951. It was raised in 1991 to $13.50. It has not been increased since then. The hard liquor industry has effectively gotten a tax reduction because of inflation.

    “Under current law, 54 percent of an average distiller’s revenues go to taxes and fees.” This is a frequent claim made by the distillery lobby. What you are not told is that a hefty portion of that figure includes taxes and fees such as real estate and payroll taxes, which non-alcohol businesses also pay. If a distillery buys a computer for its back-office, the sales tax on the computer is part of the taxes that the distillery lobby complains about.

    The fancy marketing by distilleries does not change the fact that their product causes harm. Hard liquor is especially harmful as it is the “go to” drink for alcoholics. If small entrepreneurs want to start businesses, they should find something other than alcohol production. And if Congress wishes to subsidize companies with tax breaks, it could do better than the alcohol industry.

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