California Distillers Go to D.C. to Support The Craft Spirits Modernization and Tax Reform Act of 2019

On July 22-23 a small delegation of California distillers went to Washington D.C. to attend the Public Policy Conference hosted by the Distilled Spirits Council of the United States (DISCUS) and the American Craft Spirits Association (ACSA). The primary goal was to meet with lawmakers and their advisers to persuade them to support “The Craft Spirits Modernization and Tax Reform Act of 2019,” HR 1175, which would extend the Federal Excise Tax (FET) cut enacted in 2018.

Our delegation consisted Dan Farbar from Osocalis, Eric Zandona from ADI, Jake Holshue and Jordan Kobert from Old Trestle Distillery, Claudin and John Rydquist from San Francisco Bay Area Distillery and myself from Stark Spirits Distillery.

For the California delegation, DISCUS staff set up 30 minute meetings with the legislative analysis for each of the 16 CA Reps they could schedule meetings. Starting at 10AM we were on the clock going form building to building. Around noon we split up into two groups to make it through the whole list. At the end of the day I had a good feeling we’d had gotten some support. I can report three representative — Eric Swalwell, Mark Takano and Barbara Lee — have signed on to support HR 1175, or.

However, things are not good for distillers in California. There are a few major holdouts not signing on to the bill who have a substantial number of craft distilleries in their district. Below is a table of the remaining uncommitted Representatives we distillers need to convince. California is an importent state, a pivotal state, and with these 19 Representative signing on, the bill would be extremely close going directly to the floor for a vote.

Please meet and talk to your representatives or their legislative staff. Invite them to your distillery. Some talking points: How many employees did you hire since 2017? How much did you invest in new equipment? Explain that this bill would extend tax parity for distillers with breweries and wineries, which they have enjoyed for decades. If the current tax reduction goes away it represents about a 400% hit on our business — especially those who started in 2017. Joint Committee on Taxation report for 2017 estimated that the cost to the government was overvalued and way out of line. Two years of data now show the impact was less than 40% of the original estimate.

This bill really affects small craft distilleries because it applies only to the first 150,000 proof gallons — that’s $1.62 million if you can take advantage of it. Most of us average less than 10,000 PG or $108,000. Give context and how this affects you.

Time is short, Congress is back in session September 9th. My representative, Judy Chu, visited Stark Spirits recently. I do not think she will support the bill, and I could not determine a reason. I will keep after her and staff. Contact your representative now. Can you afford to let this critical tax law expire and say nothing?

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