Category: distilled spirits

Buckwheat and Quinoa Whiskey?

Posted on by Patrick Morin
whiskey quinoa buckwheat

The Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau (TTB) has proposed a new rule changing the definition of “grain” to include the seeds of the pseudocereals amaranth, buckwheat and quinoa. Under current regulations, whiskey is considered a grain spirit and, until now, “grain” has been limited to four specific crops: corn, wheat, rye and barley.

This proposed change could be quite beneficial to the creativity in the whiskey industry, as craft distillers constantly look for new ways to distinguish themselves from the competition. The public comment period for the proposed TTB regulation is open until March 2019. Once the comment period closes, the TTB will review comments and consider changes to the proposal. After that any changes are subject to approval by the Treasury Department.

If you have questions about TTB regulations, please contact us at Morsel Law.

New Tax Cuts for Craft Breweries and Distilleries

Posted on by Patrick Morin

The sweeping tax overhaul law passed last week by the U.S. Congress included the Craft Beverage Modernization and Tax Reform Act of 2017 which will lower excise taxes for small brewers and distillers starting January 1, 2018. The tax cuts give small producers more profit that can be used to help them expand, experiment, market or even lower prices. As mentioned in an earlier article, the legislation has been widely supported throughout the alcohol beverage industry as a means to further growth.

Small producers of distilled spirits (i.e., rum, gin, vodka or whiskey) will pay a tax of $2.70 per gallon on the first 100,000 gallons, then $13.34 per gallon thereafter.

Craft breweries will pay a tax of $3.50 per barrel on the first 60,000 barrels. Large producers brewing more than 6 million barrels will continue to pay $18 per barrel, the current level for beer.

While craft beer makes up about 12.3% of the beer market and craft distillers about 12.1% of the spirit sales, the tax savings will probably not translate into cheaper alcohol beverages. Most likely craft brewers and distillers will use the money to expand operations by adding additional employees and move into more markets. But regardless the outcome, this new law is certainly a win for all small alcoholic beverage producers.