FET Relief Update: Down to the Wire

With less than two months to go, the spirits industry, as a whole, is pushing hard to have provisions of the Craft Beverage Modernization and Tax Reform Act (CBMTRA) of 2017 renewed. As a reminder, the bill lowered the Federal Excise Tax rate from $13.50 to $2.70 per proof gallon; and if the bill fails to secure enough votes, $13.50 is what all DSPs will again be paying come January 1, 2020. For the owners and financial folks, now is the time to do the math and remind yourselves just how significant this legislation is for everyone.

Support for CBMTRA (S.362/H.R. 1175) recently reached an all-time high, with 315 co-sponsors in the United States House of Representatives and 73 in the United States Senate. These numbers are strong, but they also hide just how much has been accomplished by industry members since January 2018. After the 2016 mid-term elections, more than 60 of the bill’s original co-sponsors from the House of Representatives were no longer in office, meaning the American Craft Spirits Association (ACSA) had to start over in many cases to secure the needed votes. 

“With so many new members in Congress, we had a real challenge to get out, educate and convert in such a short period of time. It’s a huge credit to the distillers from around the country who’ve taken time to get engaged,” says ACSA Legislative Committee Chair, Mark Shilling.

While the one-on-one meetings with elected officials continue on a weekly basis, spearheaded by ACSA CEO Margie A.S. Lehrman, with the guidance of veteran Washington lobbyist, Jim Hyland, larger industry-wide action is ongoing. 

This past July at the annual Legislative Policy Conference in Washington, D.C., the ACSA and the Distilled Spirits Council of the United States (DISCUS) jointly organized a hugely successful Fly-In with more than 200 industry members attending two days of meetings with their elected officials. For those members who attended the original DISCUS event in D.C. in 2012, you will recall there were fewer than 20 participants. 

And in October, as a sign of unity, a coalition of ACSA, Beer Institute, Brewer’s Association, DISCUS, U.S. Association of Cider Makers, The Wine Institute and WineAmerica organized a Day of Action with over 2,000 individuals affiliated with the beverage alcohol sector contacting their members of Congress on Oct. 15 to urge passage of the bipartisan CBMTRA. The one-day push resulted in more than 6,000 engagements with congressional offices through emails, phone calls and social media channels. “A choir is oftentimes more powerful than a solo. The joining of our alcohol beverage ‘cousins’ to urge Congress to act, underscored the importance of FET relief to our important manufacturing sector,” says Lehrman.

The ACSA website has sample letter templates available, which can be quickly tailored to give examples of how the lower FET has benefited your business, through the number of new employees added, new equipment purchased or new products being added from the tax savings. And the many state guilds are also taking an active role in mobilizing their members to host events at their distilleries and to contact their elected officials as often as necessary to make the case for renewing the tax bill.

Stephen Johnson is the chair of the ACSA PAC.

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