Congress Should Extend Craft Beverage Tax Breaks, but Close Loophole for Large Producers, Brookings Says
Tax breaks under the Craft Beverage Modernization Act should be renewed before they expire this year, but in a way that eliminates a loophole that currently sees most savings go to large distillers, Adam Looney said in a Brookings Institution…
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blog post. Currently, large distillers can transfer spirits to smaller producers or importers so that more of their spirits fall under the 100,000-gallon threshold for the low tax rate under CBMA. The law should be changed so that only the first 10,000 gallons from each producer or importer qualifies for the low rate, giving the law its intended effect of only cutting taxes for craft beverage producers, Looney said. Alternatively, the law could be changed to prevent free transfers between producers from qualifying for tax breaks, but that would not stop foreign producers from using multiple small importers to access low rates, he said.