A recent cut of the excise tax on spirits and other alcoholic beverages is a boon to small producers, especially in Tennessee, the USA Today reports. The “Craft Beverage Modernization and Tax Reform Act” slashes the excise tax on spirits for the first 100,000 gallons produced from $13.50 per gallon to $2.70 per gallon. Large producers–producing up to 22 million gallons–still receive a cut of 16 cents per gallon. The bipartisan law has a similar effect on craft breweries. Those producers who make fewer than 2 million barrels annually see the tax drop from $7 per barrel to $3.50 on the first 60,000 barrels. Large producers, producing more than 2 million barrels annually, will see a cut from $18 to $16 per barrel. None of the more than 60 breweries in Tennessee falls into this category, though the largest distilleries certainly do.
Advocates hope the tax breaks spur re-investment and growth, especially for the smaller firms. The changes remain in place through 2019. Some owners expressed concern that the changes are not permanent, so the taxes may rise to previous levels in 2020. Risk and re-investment take place ideally with stability. Perhaps lawmakers want to experiment with different rates to study their effects. In any case, the producers hope the changes are made permanent. A savings of 142 million dollars annually is not easily made up elsewhere.
Tax and regulatory regimes change, and at a faster pace than ever before, owing to technology and globalization. Firms must keep pace in order to survive. If you need a Tennessee tax attorney, give Burkhalter & Burkhalter a call. Take advantage of this new environment with an attorney who knows the lay of the land. Your next economic opportunity may be around the next corner. Wouldn’t it be best to have a lawyer who knows where you want to go?