Small distilleries are begging Congress to extend legislation that will save them from a 400 percent tax hike before the stopgap spending bill expires Friday — and now lawmakers are one step closer to providing relief.
Continue Reading Below
"We are thrilled that lawmakers included a one-year extension of the federal excise tax reduction for distillers in the year-end legislative package," Chris Swonger, president of the Distilled Spirits Council of the United States, said in a statement Tuesday.
"While not yet a done deal, this is a significant relief for craft distillers across the country who were facing a 400 percent tax increase beginning January 1," Swonger said. 'We will continue to urge Congress to do the right thing, support small businesses and pass this critical piece of legislation."
Industry groups warned of "devastating" consequences should the Craft Beverage Modernization and Tax Reform Act expire on Dec. 31.
"We're all a little dizzy," Margie Lehrman, head of the American Craft Spirits Association, told The New York Times before Congress moved to extend the tax cut. "The congressional leadership seems stuck because of issues much larger than us."
Breweries and distilleries have seen a boom since a tax cut attached to the Tax Cuts and Jobs Act passed at the end of 2017, according to The Times. The tax cut, which reduces what producers pay for their first 100,000 proof gallons, was originally meant to be permanent but now faces a mere year-long extension.
Distillers' anxiety over the tax cut will continue as Congress has just a few days to pass a budget before the stopgap spending bill expires.
Meanwhile, lawmakers from both sides of the aisle are once again rallying around the idea of "no budget, no pay."
Centrist Sen. Kyrsten Sinema, an Arizona Democrat, and Republican Sen. Rick Scott renewed the call for lawmakers to go without pay if they cannot pass a budget in a letter to congressional leaders last week.