Winery tax reduction in tax bill

A Holiday Gift for American Wineries? Cuts in Alcohol Excise Taxes Are Included in Republicans’ Final Tax Bill

Thoughts on how this could affect the industry and consumers? A respite in price increases? More truth in labeling in the 14-15% ABV range, perhaps?

Really interesting to see - and didn’t realize they were raising the alcohol level of ‘table wine’ to 16%, but it certainly makes sense.

Curious to see if they also change the percentage you can ‘play with’ on labels between 14 and 16% to the same 1.5% that it’s been below 14% since prohibition? That would mean that a 15.9% alcohol wine could be legally labeled as 14.4 now, right? If they are ‘staying consistent’, I don’t see why they would not make that change, but it certainly is curious.

If wineries are receiving excise tax cuts, will this ‘filter down’ to the consumer? Don’t count on it . . .

An interesting thing - do you think more mass market wines will stop using RO or de-alcing now that there is no ‘monetary incentive’ for them to do so?

Cheers.

Doesn’t RO or de-alcing cost money? That should answer the question. (Hate to be cynical, but mass market wines don’t spend money they don’t have to)

Funny how when I post anything “political”, it gets deleted, but guess it’s ok if wineries get more money.

"The alcohol-related tax provisions will only apply for 2018 and 2019 because tax writers had to juggle demands from a vast array of other industries, from big manufacturers to Wall Street. The cost of the alcohol-related provisions will be $4.2 billion, according to congressional tax scorekeepers.

The two-year time frame will force the industries to lobby again soon for renewal before it expires."

It’s on a sliding scale based on production. One winemaker I spoke with said tax will drop from $1.57/gl to $.02/gl for him.

edited - politics. Really? Huh! OK.

The biggest positive impact will be on very large wineries that produce a lot of wines over the 14% range right now. Small wineries that produce sparkling wine appear to be better off as they could not get a small winery tax credit in the past.

And you are correct - there will most likely be a lot less RO and de-alcing going on moving forward . . .

edited- politics

Hard to find exact details but looks like the biggest benefit from this (not yet final) change is for:

• very small wineries (under 10,000 gallons or 4200 cases) get an increased tax credit ($ 0.90 to $1.00 per gallon).

• large wineries (250k - 750k gallons, or 100k -300k cases) get a bigger increased credit (zero currently to $.53 per gallon)

All incorporated wineries will benefit from Corporate tax rate cuts. I’m sure there are other complexities in the new tax code that will be relevant. Wealthy winery owners will benefit with the rest of high tax bracket Americans. Most winery workers will see higher taxes along with most Americans.

The curious (and typical for this congress) thing is the tax cut for wineries in the 100k-300k cases size range. Good for them but this hardly qualifies as ‘craft’.

edited- politics

merely discussing the impact on the taxes isn’t political. If taxes are based on alcohol level, there’s could be a real change to winemaking.

They currently are but with this change a lot of people won’t bother lowering alcohol to fall within a lower tax bracket.

Those taxes are so minimal in my scheme of things that it is not worth mentioning. For larger concerns, it could make a big difference.

Bullshit! Entirely relevant and non-partisan comment about how our system works, and the implication of that in relation to this bill and how it will effect our industry. Censoring the post is a disservice to our industry and this forum. Might as well delete the whole thread since it’s “political”.

Feel free to argue whatever you want wes. But it was not relevant. The bill has passed. Who intended to pass it, why and what their motivations are is irrelevant for consumers.

Did the tax bill “pass?”

Its my understanding they are moving the current break from 14% to 16% and the allowed ranges for labeling with it. So yes 1.5% leeway under 16% and 1% range over 16% is my understanding.

It seems the bubbles producers make out best in regards to savings.

The fact that it’s a temporary two year tax break is relevant.

That fact wasn’t in the original post here, so the discussion was misdirected from the start. I posted a mechanical non-partisan commentary of how our politics work and how it relates to the temporary nature of this amendment.

You deleted my follow up argument which pointed out how the inclusion of this amendment is inherently political, as it’s there to garner industry support for this bill. That makes the existence of this thread inherently political, as it serves that purpose.

You’re wrong in censoring my post. You’re wrong in your assessment of the amendment, since you seem to be predicating your view on it being a permanent cut. You’re wrong about the bill having been passed.

Good catch on it only being for two years. Certainty often has more value, so the effect on winemaking itself might be limited unless this particular provision is given a longer extension in the future.