Tennessee distilleries get federal tax break, hope for more permanent solution

Posted at 7:00 AM, Dec 29, 2019
and last updated 2019-12-29 08:00:22-05

NASHVILLE, Tenn. — Distillers say they are relieved after federal lawmakers extended tax reductions for another year, but they hope a more permanent fix can happen soon.

The Craft Beverage Modernization and Tax Reform Act created excise tax breaks for distillers across the country. It was first passed in 2017 and was scheduled to expire at the end of 2019. Last Friday, after months of uncertainty, lawmakers passed an extension that keeps the tax breaks around for another year.

Distillers said the tax reduction is especially important in Tennessee, where more than 50 distilleries have opened in the last ten years.

"Big relief that its been extended for a year," Nashville Craft Distillery President Bruce Boeko said. "But presumably we’ll be back in the same situation this time next year, where we don’t know what’s going to happen after that."

Boeko said that uncertainty means smaller distilleries like his, which opened in 2016, can't plan ahead for the new year.

"Not knowing what our tax rate is going to be and possibly having it increase dramatically, it creates a lot of problems," he said. Boeko said if the tax reductions weren't extended, his excise tax would go up about 400 percent. That's why he and other distillers are hoping lawmakers can come to a more permanent agreement, taking the uncertainty out of the equation.

"I'm sure I speak for the rest of the distillers in the state that we’d really want this to not be a year-by-year or even two-year exercise, but something that is made more permanent," Boeko said.