U.S. Rep. Todd Young (R-IN) introduced legislation on Wednesday that would help level the playing field for both small and large distilleries by significantly reducing the excise tax on distilled spirits.
The Distillery Innovation and Excise Tax Reform Act, co-sponsored by John Yarmuth (D-KY), would drop the current tax rate of $13.50 per proof gallon down to $2.70 per proof gallon on the first 100,000 gallons of production for all distillers, and $9 per proof gallon thereafter.
Reports from the Distilled Spirits Council, as well as the American Craft Spirits Association, indicate that the current tax rate, along with regulatory fees, accounts for over half of the purchase price of a bottle of distilled spirits, making it one of the most heavily taxed products in the U.S.
“All around southern Indiana, many new craft distilleries are popping up, creating jobs and adding to the tax base,” Young said. “But there’s a lot of red tape involved in getting a new distillery off the ground, and this bill helps reduce that burden. In addition, we have many large, established distilleries in our region of the country, and this bill will help them, too.”