ACSA Battles for FET Relief
The Federal Excise Tax (FET) reduction enacted in 2017 will expire on December 31. We have less than one month to get the reduction enacted again or made permanent. ACSA is working overtime to get this done by the end of the year.
In Congress, we have gathered an amazing amount of support. In the House of Representatives, 320 members have co-sponsored H.R. 1175, which would make permanent the reduced rates for craft distillers. Also, close to three-fourths of the U.S. Senate support S.362, a companion measure to the House bill. This is largely due to the extensive grassroots efforts distillers have put into this process, including a coordinated Day of Action that resulted in more than 10,000 engagements from over 3,000 individuals calling on their members of Congress to prioritize the passage of the bipartisan legislation. Read more below about the next Day of Action planned for Dec. 5.
The House Committee on Ways and Means reported out a bill in June extending the FET reduction for one more year, along with many other expiring tax provisions. Per the Constitution, revenue bills originate in the House. Unfortunately, the bill has yet to go to the full House for consideration, but it is widely known that there are backdoor negotiations ongoing between the House and Senate.
Funding for the government will expire on December 20. It is believed that this will be the final opportunity before year-end to carry tax extensions.
In recent weeks, ACSA’s CEO Margie A.S. Lehrman and ACSA’s Public Policy Counsel, Jim Hyland, have met with many of the key players on the tax issue, including both the Senate and House Chairman of the tax writing committees, Senator Chuck Grassley (R-IA) and Congressman Richard Neal (D-MA), respectively. They have also met with leadership of the House and Senate, such as Senators Roy Blunt (R-MO) and John Thune (R-SD), the number two Republican in the Senate, as well as Steny Hoyer (D-MD) and Cheri Bustos (D-IL), key leaders with democrats in Congress. ACSA is literally strategizing with the senior members of Congress on how to get this done.
While there is widespread support for our provisions, the Congressional negotiators are trying to get to a deal on the tax extenders, but they remain far apart on other unrelated issues. Right or wrong, most of it centers on the divide of the progressive wing of the Democrat Caucus seeking more tax fairness for low to moderate income earners as an answer to the broad corporate tax reduction of the Trump tax bill and Republicans who likely would support a straight extension on many expiring provisions.
The ACSA Board will be coming to Washington in mid-December to once again press for a continuation of the FET reduction. We intend to leave nothing on the field in our efforts to get this done. We will be working up until midnight on December 31 if we have to get this completed for our industry.
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Call Congress on Dec. 5 to Pass CBMTRA
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The clock is ticking on reauthorization of the Craft Beverage Modernization and Tax Reform Act (CBMTRA) and Dec. 20, the day Congress is expected to recess, is the last opportunity for action.
December 5, known as Repeal Day, marks an excellent time to remind Congress about the urgency of passing CBMTRA and making tax parity permanent.
As you well know, the current lower Federal Excise Tax (FET) for craft distillers will expire on Dec. 31—in just a few weeks. Please call your Sen ators (202-224-3121) and local Member of Congress (202-225-3121) on Dec. 5 and urge them to co-sponsor and pass S.362 and H.R. 1175.
NOW IS THE TIME TO ACT for FET relief.
Here are some key talking points:
- In 2017, Congress enacted, for the first time, tax parity for spirits and provided a reduced Federal Excise Tax (FET) for craft distillers. Tell your elected legislator that before passage of H.R. 1 in December of 2017, it was a one-size-fits-all flat tax rate on large and small distillers.
- The reduced FET will expire on December 31, 2019. It is urgent Congress acts before that date.
- The tax relief is working just as Congress believed it would. Craft distillers are re-investing in American manufacturing. We have hired new employees, purchased American made equipment and have increased purchases from local agriculture.
- The growth of craft distilling is supporting main street, small business job growth, exports, tourism, rural and urban America economic development, and locally sourced products, the vast majority of which are made and sourced in the U.S.
- Without the tax relief, we may need to lay off employees and our business growth will be put on hold. Many of our businesses will simply need to close.
- The legislation further helps craft brewers and vintners. This is the reason every major beer, wine and spirits group has endorsed these bills.
We’ve previously asked for your support and you’ve answered. It is CRITICAL that you again act. Thank you for being proactive in support of our efforts to make FET parity for you permanent.
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New Benefit for ACSA Members
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ACSA honors your membership and looks for ways to provide additional benefits. Partnering with TIPS (Training for Intervention Procedures), each ACSA member will receive one complimentary registration for an eTIPS certification course, a $40 value.
Additional passports can be offered to your entire team for a reduced ACSA rate. Similarly, if your state requires in-person training, discounts apply. If you are interested in taking advantage of this benefit to educate your servers and emphasize a responsible drinking culture, before the holidays, contact Membership@americancraftspirits.org to obtain your discount code or get more information about this program.
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Discover World-Class Educational Presentations
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We are finalizing the schedule for ACSA’s 7th Annual Distillers’ Convention & Vendor Trade Show in Portland, Oregon. If you have yet to register, click the links below to join us March 29-31, 2020. Here is a snippet of the educational presentations we have in store.
The Science of Whiskey Maturation
Presenter: Jason Parker, Copperworks Distilling Co.
This session will cover types of wood used for barrels; why oak works so well (micrograms of tyloses); medullary rays; sawing patterns for a barrel stave; cellulose; hemicellulose; lignins; tannins; lactones; toasting vs. charring; maturation aspects (additive, subtractive, transformative); warehouse conditions; and entry proof.
The learning objectives for this presentation are to understand which barrel to pick for a desired flavor; how warehouse conditions affect maturation; and how to design a whiskey using barrel flavors.
Cash Flow Management and Optimization
Presenters: Michelle Howard and Amy Julian, Brown Smith Wallace LLC
Cash flow is critical to the success of any business. Businesses that understand and manage their cash cycle enable better business performance. Cash management as a competitive advantage will set your business apart from the competition. Cash management is not easy. It involves many variables and processes that must be controlled. Formalizing your approach to cash flow will unlock liquidity trapped on your balance sheet and enable growth.
This session will help you:
Understand your accounts receivable and create a strategy to improve timely cash receipts; standardize and streamline your payable processes and working capital initiatives; map current relevant processes to help you identify KPIs; improve processes through identification of pain points where manual intervention or other issues are impacting timeliness and accuracy of data; identify credit and past due collections from your customers; identify the value of your accounts payable due in the next 30 days and create annual projections; align terms for receivables and payables; establish polices for managing cash; and build a strong governance plan that is sustainable.
Innovative Avenues to Accelerate Growth for Craft Brands
Presenters: Emily Pennington and Harry Kohlmann, Park Street
This two-part, comprehensive panel series will explore in depth the available channels a craft brand can utilize for distribution.
Part one of the series will feature experts who represent various distribution models including traditional wholesalers (e.g., Southern, Breakthru, RNDC), a wine-focused wholesaler with a craft spirits division (e.g., Heritage, Opici, Winebow), and a distiller who has experienced both aligning with a national distributor and selected wholesalers on a per state basis (e.g. Sagamore Spirit, Cooper Spirit).
Part two of the series will feature experts who represent innovative distribution models including e-commerce (e.g., Drizly, Minibar), exclusive big box partnerships (e.g., Total Wine), and a distiller with successful self-distribution (e.g., Garrison Brothers). This series will explore the advantages and disadvantages of each strategy.
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