A tax cut might give distilleries and craft breweries a much-needed cash infusion.
When it comes to taxes, most people tend to avoid reading anything about them until they actually have sit down and do their own. But if you live in Tennessee right now, and you work at a small craft beer brewery or a whiskey distillery, you might actually be celebrating your taxes—or to be more precise, your tax cuts.
USA Today reports that a new federal excise tax on spirits has been “slashed” as a result of the Craft Beverage Modernization and Tax Reform Act. That means breweries and distilleries might actually start saving money, which the owners and operators can pour back into their business. That’s all well and good for them, but what does it mean for us? Well, its possible that a consequence of the tax cut could be a boom in the Tennessee spirits industry.
“This is an economic incentive for distilleries to increase production, add more people and buy more supplies,” Will Cheek, “an alcoholic beverage law attorney and partner at Waller Law,” told USA Today.
Small operations will benefit from the tax cut the most: The tax rate per barrel has dropped by 50 percent for the more than 60 craft breweries in the state that produce less than 2 million barrels of beer every year—a total savings of $142 million dollars for the beer industry, according to The Brewers Association. This would be the ideal time for those breweries to experiment with the new flavor profiles and brewing techniques they could never afford to try out before.
This sudden surge in savings could also allow distilleries to amp up their whiskey production. Tennessee is already home to the Jack Daniels, George Dickel and Ole Smoky distilleries—all which could potentially release new lines of whiskey using the money saved from the tax cut. Kris Tatum is the president of the Tennessee Distillers Guild and owns a distillery himself. He says he plans to use his savings to hire more employees (job creation is another benefit) and to upgrade his equipment.
Though the tax cut is only good through 2019, there is potential to make its benefits permanent. Still, we shouldn’t underestimate what brewers and distillers are able to accomplish in two years. If you’re a whiskey lover or a craft beer connoisseur, you might look to Tennessee for your newest obsession.