Winery tax reduction in tax bill

[David_Glasser]

Won’t the decrease in the top business tax rate swamp any effect of the change in alcohol excise taxes?

[Joe_Raymond]

What’s the over under on this thread?? I am going with 24…

[Merrill_Lindquist]

@Joe Raymond

What’s the over under on this thread?? I am going with 24…

Perhaps a trophy for the winner? Hi Joe!

[Joe_S]

@R. Frankel

Most winery workers will see higher taxes along with most Americans.
’.

Please share your example calculations for this statement using the details from the bill. Let’s assume family of 4 making $50-60k per year (you did say most Americans).

Otherwise, I suggest this is a regurgitation of a political viewpoint somewhat related to Armagedon.

[Arv_R]

Even if its only two years I won’t complain.

If I didn’t have to pay sales tax on wine purchases for the next two years, I could buy 8.5% more wine!

[John_Morris]

@c fu

@Wes Barton

@Wes Barton

edited- politics

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.

What baloney! Of course the motivations and who it was enacted for are relevant to consumers! By your logic, we couldn’t discuss how distributors have gotten states to shut down interstate shipping because the motivations are irrelevant.

[John_Morris]

@Joe Webb

@larry schaffer

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.

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.

Are the rules on labeling ABV in a statute or regulation? i don’t recall. if the latter, they might be harder changed by statute.

In any event, it seems to me that the labeling rules could be independent of the tax threshold. The tax is assessed based on the actual ABV, I assume, not the labeled amount. Or can you have a 14.9% wine that qualifies for the lower rate if you take advantage of the leeway in the labeling rules and mark it at 13.9%?

[edited for clarity]

[Eric_Lundblad]

The tax is assessed on the actual ABV.

[Ian_Sutton]

The posts I saw were indeed political, even if I happen to agree with them.

There is a politics forum on this site, so there is nothing to stop the discussion of Trump’s motives continuing there.

[Markus_S]

@Ian Sutton

The posts I saw were indeed political, even if I happen to agree with them.

There is a politics forum on this site, so there is nothing to stop the discussion of Trump’s motives continuing there.

However not true, as ‘political talk’ gets shut down there as well. So much for this place being the equivalent of the neighborhood bar for exchanging ideas. If we cannot discuss things that are important and will affect the future, …what’s the point? Perhaps we ought to simply label everything a ‘93’?

[Ian_Sutton]

Hi Markus
I don’t post on the politics forum any more, but I don’t recall political talk getting shut down there, even despite some pretty foul personal insults and generally obnoxious behaviour. IME it’s a pretty much unmoderated forum (and not for the faint-hearted).
Regards
Ian

[CFu]

@Markus S

@Ian Sutton

The posts I saw were indeed political, even if I happen to agree with them.

There is a politics forum on this site, so there is nothing to stop the discussion of Trump’s motives continuing there.

However not true, as ‘political talk’ gets shut down there as well. So much for this place being the equivalent of the neighborhood bar for exchanging ideas. If we cannot discuss things that are important and will affect the future, …what’s the point? Perhaps we ought to simply label everything a ‘93’?

Uh… the politics forum is completely unmoderated. Don’t know what you’re talking about. I don’t believe you’ve opted into to the politics forum so your statement is based on what?

Like Ian’s said. We don’t touch anything in the politics forum. It’s a very active forum so if you want to discuss and exchange ideas there you are welcome.

[R_Frankel]

@Joe S.

@R. Frankel

Most winery workers will see higher taxes along with most Americans.
’.

Please share your example calculations for this statement using the details from the bill. Let’s assume family of 4 making $50-60k per year (you did say most Americans).

Otherwise, I suggest this is a regurgitation of a political viewpoint somewhat related to Armagedon.

I think if I did get into this detail I’d get shut down for political talk, you’re probably right.

Instead I’d propose sipping ‘96 Margaux as my preferred drink during any Armageddon. Or perhaps this could be a new thread .

[Alan_Rath]

@R. Frankel

@Joe S.

@R. Frankel

Most winery workers will see higher taxes along with most Americans.
’.

Please share your example calculations for this statement using the details from the bill. Let’s assume family of 4 making $50-60k per year (you did say most Americans).

Otherwise, I suggest this is a regurgitation of a political viewpoint somewhat related to Armagedon.

I think if I did get into this detail I’d get shut down for political talk, you’re probably right.

Instead I’d propose sipping ‘96 Margaux as my preferred drink during any Armageddon. Or perhaps this could be a new thread .

I don’t think it’s political to just talk about aspects of the bill. I’ve tried several online calculators that claim to represent what’s in the bill. It’s awfully hard to end up paying more tax up through high upper middle class. In general, if you live in a lower tax state with moderate home prices, you’re unlikely to pay more except at the very high earner levels. If you live in a high tax state like CA or NY, and have high property taxes and mortgage interest, you’ll probably pay more. It’s worse for single than married. But there is really no circumstance where a winery worker will end up paying more - you have to have large deductions, which implies large enough income to afford those payments.

[Kim_Z]

Here’s a run down of the tax reduction:

Congress Passes First Wine Excise Tax Reduction in Eighty Years

Somewhat surprising to see some wine lovers hating less tax on their favorite product. There is a solution since there are no legal restrictions on voluntarily paying additional taxes if that bings you cheer.

[ericleehall]

It’s pretty well known that a lot of very large wineries use a variety of techniques to lower their alcohol levels to 13.9 ONLY to take advantage of the lower tax levels…

Therefore the companies that provide these particular services are going to see the demand for those processes plummeting.

[larry_schaffer]

@ericleehall

It’s pretty well known that a lot of very large wineries use a variety of techniques to lower their alcohol levels to 13.9 ONLY to take advantage of the lower tax levels…

Therefore the companies that provide these particular services are going to see the demand for those processes plummeting.

Agreed in general.

It’ll be interesting to see if most ‘mass market’ wines now show alcs higher than 13.9 moving forward, and if that creates more of a ‘backlash’ against higher alcohol wines or not. My guess is that this will be 'much ado about nothing - and more wineries will continue to LABEL their wines at 13.9 but can legally have them up to 15.4

The other thing to consider - most of the companies that offer RO and de-alcing have diversifyed into VA removal, Velcorin, micro-filtration, etc - there’ll ALWAYS be a need for their services from lots of wineries . . .

Cheers,

[Eric_Lundblad]

The wine related tax changes are good for 2 years only (and will then have to be voted on to continue). Lowering the alc has an effect on the overall profile/perception of the wine. Will producers be willing to do this for, potentially, 2 years benefit? The risk is they’ll lose some consumers and gain others in the change…not a bad thing if it’s a one time change. But producers might think twice if they’ll have to change then change back.

[Wes_Barton]

@Kim Z

Here’s a run down of the tax reduction:

https://www.winebusiness.com/news/?go=getArticle&dataid=193610

Somewhat surprising to see some wine lovers hating less tax on their favorite product. There is a solution since there are no legal restrictions on voluntarily paying additional taxes if that bings you cheer.

As Rich pointed out in post 10, small wineries already got a big tax credit and big wineries didn’t. Changing the credit for small wineries from 90 cents per gallon to a dollar per gallon works out to 2 cents per bottle. For the type of wines us forumites buy, that’s not going to effect anything. For a 1500 case winery, that’s $900/year.

The bill-turned-amendment was written by the Wine Institute, which is the political arm of Gallo. They also lobby for anti-shipping laws. Massive wineries like Gallo are getting 53 cents per gallon from this, which, with their small margins on large production will have a big impact. This info from 2011 puts Gallo at 66 million cases per year sold in the U.S. information: The Top 30 U.S. Wine Company That’s a $33 million/year tax break. Even if it just lasts two years, that’s lobbying cash well spent. The total tax break over two years for those 30 larges producers is over $235 million. Yes, I’m sure some of that money will create jobs - lobbying jobs - to continue the fight against market access for small producers.

[John_Morris]

Thanks for the research, Wes!