Kentucky Congressman Comes Through For Craft Distillers

Craft distilleries like James E Pepper are breathing a sigh of relief. Photo Courtesy James E Pepper.

Distillers and brewers across the country are starting off 2021 with a sigh of relief – Congress has passed the bi-partisan Craft Beverage Modernization and Tax Reform Act (CMBTRA) as part of their coronavirus relief plan.

And one Kentucky Congressman made sure to deliver for bourbon distillers in his home state. As a provision within the CBMTRA, Congressman Andy Barr’s (KY-06) Aged Distilled Spirits Act creates a level playing field for bourbon distillers, allowing them to deduct interest expenses associated with production in the year it is paid, not when the bourbon is bottled and sold. This legislation also lowers the Federal Excise Tax (FET) rates for distillers and aged spirits. These FET rates were set to expire last month unless Congress acted to make them permanent or provide an extension. 

“Throughout my time in Congress, I have made the creation of a level playing field for our bourbon distillers a priority,” said Congressman Barr in a press release.  “Bourbon is one of our Commonwealth’s most well-known industries and America’s only official native spirit, a lower excise tax allows distillers to invest in their products, create more jobs and creates a better economic environment across central Kentucky.”

Distillers in the industry have expressed their appreciation for the passage of the act.

“The passage of the Craft Beverage Modernization Act was monumental for our distillery in Lexington and for all craft distillers across the nation,” said Amir Peay, Owner of Old Pepper Distillery in Lexington in a press release. 

As an independent whiskey producer it gave us federal excise tax parity with beer and wine, which resulted in a substantial reduction in our costs, and created savings that we are able to reinvest into our business, community and employees. This historic occasion was the result of years of hard work across our industry and with unprecedented bipartisan support in Congress. Congressman Barr was a key supporter throughout the process. His door was always open to hear our concerns and offer ideas to get the bill across the finish line.  We are extremely grateful to him for his pivotal role in the legislation and for his unwavering support for Kentucky Bourbon.”

“We thank Congressman Barr for his on-going support in helping pass the legislation making the CBMA (Craft Beverage Modernization Act) permanent,” said Max Shapira, CEO and Owner of Heaven Hill Distilleries in a press release. “This Congressional action enhances the growing platform of the entire Bourbon industry, setting the stage for continued expansion, both domestically and internationally, in the years to come.”

Link here to learn more about the CBMTRA.

Caroline Paulus is the Senior Editor for The Bourbon Review. She lives and writes in Lexington, Kentucky. Follow her on Instagram @misswhiskeyhistorian to keep up with her latest in bourbon news - and a few old finds, too.