The Craft Beverage Modernization and Tax Reform Act of 2017 went into effect on January 1, 2018. Thanks to the new act, beer, distilled spirits and wine producers will get a two-year reduction in federal excise taxes worth around $4.2 billion. Small brewers will see their tax rate cut in half, from $7 to $3.50 per barrel for the first 60,000 barrels and Tax rates for distilled spirits will go from $13.50 to $2.70 per proof gallon for the first 100,000 gallons produced or imported and $13.34 per proof gallon on the first 22,130,000 gallons produced or imported.
Legislation also allows for wineries to claim a credit of between $.535 and $1 per gallon on the first 750,000 gallons of production, sparkling wine to qualify for the credit for the first time, increases the Alcohol by Volume allowed for lower tax rates, and increases the carbonation allowed in certain low alcohol wines for the lower tax rate. For more information and specifics on the Craft Modernization and Tax reform Act of 2017, please visit https://www.congress.gov/bill/115th-congress/senate-bill/236/text#toc-HF31E310D105C4401A3EAF3E75E2BB340.