Time to celebrate with a glass of wine: Reductions to the Craft Beverage Excise Tax Rate
January 29, 2018 | Authored by Dopkins Tax Advisory Group
January 29, 2018 – The Tax Cuts and Jobs Act of 2017 (H.R.1) was signed by the President on December 22, 2017. Included in the bill was reduced rates of excise tax on certain wines. We have provided a quick update on what’s new.
Excise Tax on Alcohol Content:
OLD LAW:
| Tax | Tax Rates |
| “Still Wines” not more than 14 percent alcohol | $1.07 per wine gallon |
| “Still wines” more than 14 percent, but not more than 21 percent, alcohol | $1.57 per wine gallon |
| “Still wines” more than 21 percent, but not more than 24 percent, alcohol | $3.15 per wine gallon |
| “Still wines” more than 24 percent alcohol | $13.50 per proof gallon (taxed as distilled spirits) |
| Champagne and other sparkling wines | $3.40 per wine gallon |
| Artificially carbonated wines | $3.30 per wine gallon |
NEW LAW:
| Tax | Tax Rates |
| “Still Wines” not more than 16 percent alcohol (Includes “mead” and “certain sparkling wines”) | $1.07 per wine gallon |
| “Still wines” more than 16 percent, but not more than 21 percent, alcohol | $1.57 per wine gallon |
| “Still wines” more than 21 percent, but not more than 24 percent, alcohol | $3.15 per wine gallon |
| “Still wines” more than 24 percent alcohol | $13.50 per proof gallon (taxed as distilled spirits) |
| Champagne and certain sparkling wines | $3.40 per wine gallon |
| Artificially carbonated wines | $3.30 per wine gallon |
Credit available against Excise Tax:
- Old Law: “Small” Wineries were defined as having aggregate annual production not exceeding 250,000 gallons.
- The credit:
- $0.90 per gallon on the first 100,000 gallons of wine domestically produced and removed during a calendar year.
- The credit is reduced by 1% for each 1,000 gallons produced in excess of 150,000 gallons.
- The credit did not apply to sparkling wines.
- The credit:
- New Law: All wineries can join in the fun; the bill removes the 250,000 wine gallon domestic production limitations. The provision also includes sparkling wine producers and importers.
- The credit:
- (1) $1.00 per wine gallon for the first 30,000 wine gallons of wine, plus
- (2) $0.90 per wine gallon on the net 100,000 wine gallons of wine, plus
- (3) 53.5 cents per wine galloon on the next 620,000 wine gallons of wine.
- The credit:
About the Author
Dopkins Tax Advisory Group
Our tax professionals include specialists who are proactive, strategic thinkers who work to maximize your cash flow. In addition to cash flow considerations, we also believe that tax planning is most effective when it is integrated with, and fully supports, your business plan and personal goals. Our approach to tax planning will help you better understand the tax implications of any proposed course of action, and together we can make the right decisions for your business. For more information contact your Dopkins Client Service Coordinator or Gregory Urban at gurban@dopkins.com
