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Reduced Federal Excise Tax- NEED YOUR HELP!


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Small Spirits Makers' Equal Tax Act



We're close to having a bill introduced in the U.S. Congress that the mirrors

the proposal Melkon wrote to create a reduced federal excise tax tier for Micro

Spirits Producers. To refresh everyone's memory, it would lower FET on a 750ml

bottle of 80P spirits from $2.14 to $0.43.

A number of you have already co-signed the proposal -- 107 so far. We need to more...at

least 150 or 200.

Send Melkon anemail today melkon@greenbar.biz

& add your name to the

list of supporters.

I know many of you whose businesses qualify and would benefit directly from this

proposal, or you supply a Micro Spirits Producer and would benefit indirectly from

having healthier clients.

This proposal would create tremendous opportunities for small spirits producers

and it has ADI full support!

- Bill Owens, ADI President

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Some immediate questions arise over this...........

What's the gallon limits on 'small producer'?

How many different small producer distilleries can a large company own at the higher corporate level and still get by paying the reduced tax? You know the big boys will simply spin off smaller corps with different labels. You'll need to have limits on who can own what.

What other limits/regulations are covered in this bill?

Have you read the bill, folks?

Here's a link to the actual bill.


And the single part pertaining to who and what the limits are.

"Reduced excise tax rates should apply to the first 60,000 proof gallons of spirits sold if producers sell no more than 100,000 proof gallons per year. Reduced rate apply to:▪ Brands directly owned by producers▪ Brands manufactured for third parties"

I don't believe for a minute an 'artisan' out there produces 100,000 proof gallons a year. That's 3,500 proof cases a month !

So how long will it take for the mega-distillers to spin off labels to fit those specs?

Sounds like a nice fuzzy idea on the surface, but since we don't pay the tax, we really just pass the tax through from user to Feds, how does it really benefit us? I can only see it as a benefit to the big folks unless it has specific restrictions on ownerships, etc.

What comes to mind as a better measure would be to 'exempt' the first, say 300 cases per month or some other reasonable figure which would cover an artisan, from being taxed at all. That would directly effect small distillers. But a large producer wouldn't find it worth spinning off another label.

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Mega distillers spinning off smaller distilleries? do you think that would really be cost effective? Having hundreds of small distilleries to manage wouldn't be very cost efficient. Has this been happening in the craft beer and wine industry where they already get this break??? I don't think so. The big boys already benefit from economy of scale. This is an attempt to level the playing field a bit. The big boys think much bigger when looking to profit- (review the Diageo/ Virgin Islands deal).

Do you really believe being able to reduce your price to your wholesaler by $1.50+ a bottle won't make you more competitive with the large producers? or that being able to reinvest that $1.50 in your business won't help your business grow? For me that probably allows me to hire a few more people year one. In the long run for some here I'm sure that could make a difference in whether they stay in business or not long term.

It's a good plan, it has been well researched and thought out and benefits from the experience of the craft brewers and winery people. If you really think it won't benefit you then don't add your name to the hundred or so supporters already on the list.

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It would be of great interest just how many current small distilleries which are owned by the mega folks will be helped, killing any effectivness of the bill.

Glaring example appears to be Stranahan's Colorado Whiskey. While it would have fallen in as an artisan, it not any more since it is now owned by Proximo, a mega owner. So will that give the mega owner a break on taxes, lumping them into same boat as a true artisan?

How many other 'small' operations are there who've been bought out but still produce small quantities? Anyone ever research that?

Nope, too many openings in that bill. In fact, it only has 3 or 4 lines that have anything to do with limits, rest of it eco impact statement. It really looks like a good sales job, backed by the mega producers to appease somebody. Nothing in it to help the true small producers. Limits have to be lower and definitations of who can own the biz needs to be tighter.

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A reduced rate has been discussed on these forums and amongst members for over two years. It was developed discussed and tweaked according to the desires of the majority of those giving input. I believe this may have been the first post- http://adiforums.com/index.php?showtopic=200 feel free to do some research yourself there are a few more threads as well.

It was modeled after the reduced rates wineries and breweries currently enjoy.

Despite your big producer sales pitch backed by the mega producers conspiracy theory, I can assure you big producers are not likely to support it.

Read the discussions that took place prior, if you're not happy with this and feel it won't benefit you don't support it. I am happy to report that as of last night there are now more than 200 supporters.

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Fair enough.......All we can hope for is that something good comes from stirring up congress to get some changes made. Those laws have been around way to long.

Good luck with it.


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The big producers actually should support the bill as it'll help the small producers grow. And when the owners get tired of yet another mashing, when the excitement of building a business becomes the drudgery of running one, when they get a little older and the kids aren't interested in Mom and Dad's business, they can be there to help the owners retire. The hard work of building the identity of the company will have been done, and it'll have the hard work, built-it-from-scratch-myself ethos that folks just love to hear.

And if they can spin off the Wathen's, Blanton's and specialty brands to "small" DSP's that benefit from the 60K PG limit all the better. I don't know if these brands would fall into that category, but you get the idea.

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If this goes through, I will be happy to take Porter's $1.50 per bottle that he doesn't want to save in federal tax. I most generously make that offer to everyone else who doesn't support this bill, and I don't care who owns your DSP.

No I want it as I could use the extra 22,000.00 a year. Coop

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