Colorado House delegation backs letter preserving lower taxes for alcohol

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Washington, D.C.-, June 30, 2020 | comments

In these fractious times, Republicans and Democrats appear to be united on one thing: lower taxes on alcohol.

Colorado's House delegation is part of a bipartisan letter with 136 other members formally asking leaders in both parties to allow a vote on permanently preserving tax breaks for craft beer, wine and liquor, as the nation staggers to its feet after the COVID-19 economic shutdown.

“Colorado and craft beverages go hand-in-hand. Our craft breweries, distilleries, and cideries help fuel tourism, employ thousands of Coloradans, and serve as community hubs," Rep. Jason Crow, a Democrat from Aurora said in a statement Tuesday morning. "But the public health and economic crisis brought on by the coronavirus is putting many of these businesses at risk. This relief effort will give craft beverage producers the help they need to stay afloat and continue to be an essential part of our community.”


The request is also sponsored by fellow Democratic Reps. Diana DeGette of Denver, Joe Neguse of Boulder County and Ed Perlmutter or Arvada, with Republican Reps. Ken Buck of Windsor, Doug Lamborn of Colorado Springs and Scott Tipton of Cortez.

You can read the letter by clicking here.

H.R. 1175, the Craft Beverage Modernization and Tax Reform Act, would preserve the federal excise tax at $3.50 per barrel on the first 60,000 barrels for domestic brewers who yield fewer than 2 million barrels a year, which is half the rate imposed before 2017.  The bill also locks in a $16 a barrel rate on the first 6 million barrels for all other brewers and importers. The current rate is $18 a barrel.


The tax relief also covers transfers between breweries and expanding the list of ingredients for fermented drinks.

The break was originally for two years as part of Republicans' Tax Cuts and Jobs Act in 2017, then it was and was extended for one year by President Trump last December.

Not everyone is raising a class, however. Last September, the Brookings Institute think tank noted:

"A loophole in the Act allows large producers of distilled spirits to ship their product tax free through smaller firms, importers, or even shell company intermediaries, allowing them to claim the lower tax rate that was supposed to be reserved for small, craft businesses. According to estimates from the Joint Committee on Taxation, updated to reflect what they’ve learned from the tax cut’s first-year impacts, most of the $1.2 billion cost of a one-year extension of the bill is associated with producers of distilled spirits who use this loophole, rather than true craft distillers, or beer and wine producers of any size."

Crow's office on Tuesday provided statements from trade associations and others who would benefit from the lowered taxes.

“As a local, independently owned craft brewery, the economic impact of the COVID-19 pandemic has been substantial on our business," stated Kevin Delange, co-owner of Dry Dock Brewing in Aurora. "We’ve had to close both of our tasting rooms and all bars and restaurants and as a result had to destroy a lot of beer that had become expired. Passage of the Craft Beverage Modernization and Tax Reform Act will enable us to continue to keep our staffing levels and will help us recover from the devastating economic impact of the pandemic.”

Content originally published by Colorado Politics on June 30, 2020.
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