Bi-Partisan Bill Offers Craft Distillers Some Relief
The current sitting of the US Congress will contend for the title of most unproductive in American history, especially after Trump vetoed the vaunted bi-partisan Housing Bill. But that does not mean it does not have a few more chances to accomplish something for the American people. Congressional Craft Spirits Caucus Co-Chair Representative Jeff Hurd (R-CO) and Representative Jill Tokuda (D-HI) have co-sponsored the Supporting Producers Through Incentives from Rural Ingredients and Tax Relief Act (SPIRIT Act — H.R. 9407).
The legislation would establish a Federal Excise Tax (FET) credit for qualifying small distillers that utilize domestic agricultural ingredients, helping support both rural economies and American manufacturing and independent craft spirits producers who are already facing severe economic hardship in the wake of the trade wars started by Trump in his first and second terms, as well as legislative pressures.
The SPIRIT Act comes at a critical time for the craft spirits industry. According to the most recent Craft Spirits Data Project, the number of U.S. craft distilleries declined for the first time since the report’s inception, while craft spirits sales volumes and investment in the sector also fell.
“Craft distillers are deeply connected to American agriculture and rural communities,” said Representative Jeff Hurd. “This bipartisan legislation helps ensure small producers can continue investing in local farmers, creating jobs, and contributing to Colorado’s and America’s manufacturing economy. The SPIRIT Act provides targeted relief while strengthening domestic supply chains.”
Under the legislation, eligible distillers producing up to 100,000 proof gallons annually would qualify for a tax reduction of $2.35 per proof gallon if at least 90 percent of their agricultural inputs are sourced domestically.
“Craft spirits producers are among the most agriculture-dependent businesses in beverage alcohol,” said Emily Pennington, Chief Executive Officer of the American Craft Spirits Association. “Every bottle represents a significant investment in American grain, specialty crops, manufacturing, tourism, and local jobs. The SPIRIT Act recognizes that connection and provides meaningful relief to small distillers during a period of economic uncertainty and rising production costs.”
Lee Wood, President of the Colorado Distillers Guild, said the legislation reflects the realities facing small distillers nationwide.
“Independent distillers are being squeezed by higher costs across nearly every part of our business—from grain and glass to barrels and transportation,” said Wood. “This legislation helps small producers reinvest in employees, agriculture, and local economies while encouraging stronger partnerships between distillers and American farmers.”
