Legislation
Government Affairs Update: ACA Lauds the CHEERS Act to Support Bars, Restaurants and Venues with Draft Systems
On March 11, U.S. Representatives Darin LaHood (R-IL-16) and Steven Horsford (D-NV-04) introduced the Creating Hospitality Economic Enhancement for Restaurants and Servers Act (CHEERS Act), a bipartisan effort aimed at supporting local businesses, restaurants, and bars with a focus on draft beverage systems. This legislation seeks to revitalize the hospitality industry by expanding tax incentives for investments in energy-efficient systems that include keg and tap property.
The American Cider Association has joined the Beer Institute, the Brewer’s Association, National Beer Wholesalers Association, the National Restaurant Association, the Independent Restaurant Coalition and others in applauding this effort. By offering support for the use of draft lines and keg equipment in establishments, the CHEERS Act recognizes the importance of draft beverages and their connection to a thriving hospitality sector.
Michelle McGrath, CEO of the American Cider Association, highlighted the significance of draft cider sales in the Beer Institute’s press release about the bill on March 11, stating that draft cider accounts for 60% of hard cider consumption at establishments.
“On-premise consumption plays a crucial role in introducing consumers to cider, making restaurants, pubs, taprooms, sports arenas, bars, and movie theaters vital components of the commercial cider ecosystem,” McGrath stated.
The CHEERS Act’s focus on supporting investments in new, energy-efficient draft equipment is welcomed by the cider industry as it provides much-needed relief for the hospitality sector. This legislation acknowledges the importance of draft sales in sustaining local small businesses and aims to contribute to their recovery during these challenging times.
The ACA applauds Representatives LaHood and Horsford for their introduction of the CHEERS Act.
To read more about the CHEERS Act visit the Beer Institute website.
Urge Congress to Support the Bubble Bill
Earlier this year Representatives Earl Blumenauer (OR-D) & Mike Kelly (PA-R) introduced the Bubble Tax Modernization Act of 2024 (HR 7029) to the 118th Congress. The “Bubble Bill” will amend a minor carbonation tax disparity for lower alcohol wine, cider and mead made with fruit. Read the complete bill here.
Despite the popularity of bubbly beverages, the carbonation tax–colloquially called the ‘bubble tax’ on fruit wine, fruit cider, and fruit mead makes carbonating these agricultural products at sparkling levels cost prohibitive. Most craft beverage entrepreneurs can’t afford to carbonate these products at the level the market wants. The result is that an important American agricultural sector is falling flat.
Current tax rates for low-ABV carbonated fruit wine, cider, and mead are $3.30 or $3.40 per gallon. Meanwhile low-ABV carbonated grape wines have a current tax rate of $1.07 per gallon. In addition, fruited beers, seltzers, hard kombucha, and ready-to-drink canned cocktails are carbonating freely to give consumers the bubbles they want.
Raising the floor of the carbonation tax threshold to include ALL low-ABV wine, cider, and mead to 0.64 grams of carbon dioxide per hundred milliliters will allow producers to compete more fairly in the evolving beverage market. The Craft Beverage Modernization and Tax Reform Act of 2020 achieved this for grape-only wines, but fruit-based craft beverages were overlooked. This created an excise tax disparity of $2.00 to $3.00 a gallon depending on the product. For more information download the Understanding Bubble Taxes explanatory document.
Allowing more carbonation will foster more economic opportunities for craft beverage makers, allow for more small producer collaborations, create increased opportunities for farms to stay viable with value-added products, and allow for diversification that could help farms and businesses mitigate disasters such as fires, droughts, floods, or crop disease.
Please ask your Congressional representatives to sign onto the Bubble Bill today to support American craft beverage producers and manufacturers.
Reps. Blumenauer & Kelly Introduce Bubble Bill
Representatives Blumenauer & Kelly Introduce the Bubble Tax Modernization Act
‘Bubble Bill’ Will Spur Innovation for Sparkling Co-fermented and Fruited Cider, Wine, and Mead
Washington, DC—Earlier today Representatives Earl Blumenauer (OR-D) & Mike Kelly (PA-R) introduced the Bubble Tax Modernization Act of 2024 (HR 7029) to the 118th Congress. The bill will amend a minor carbonation tax disparity for lower alcohol wine, cider and mead made with fruit.
Despite the popularity of bubbly beverages, the carbonation tax–colloquially called the ‘bubble tax’ on fruit wine, fruit cider, and fruit mead makes carbonating these agricultural products at sparkling levels cost prohibitive. Most craft beverage entrepreneurs can’t afford to carbonate these products at the level the market wants. The result is that an important American agricultural sector is falling flat.
“The cider industry is a quintessential American story. Pioneers taking what the land gives them and creating something magical. We must take every opportunity to support cidermakers, especially as the craft beverage industry recovers from the ravages of the pandemic. Right now, it is not a level playing field for cider, which is taxed more heavily than other carbonated, fruit-based beverages. My common-sense proposal will ensure cidermakers can create products for their customers, not the tax collector,” Rep. Blumenauer says.
Amie Fields, partner and sales manager at Botanist & Barrel Cidery & Winery in North Carolina, says the bill will enable innovation for their business.
“We are known for creativity and producing unique pet nats and bottle conditioned cider and wine with a range of ABVs, but recently we have been working on a series of lower alcohol content beverages. However, the carbonation tax currently disincentives our creativity, which hampers our ability to fully explore more sessionable beverages and boost our revenue by appealing to new customers,” explains Fields.
Current tax rates for low-ABV carbonated fruit wine, cider, and mead are $3.30 or $3.40 per gallon. Meanwhile low-ABV carbonated grape wines have a current tax rate of $1.07 per gallon. In addition, fruited beers, seltzers, hard kombucha, and ready-to-drink canned cocktails are carbonating freely to give consumers the bubbles they want.
Raising the floor of the carbonation tax threshold to include ALL low-ABV wine, cider, and mead to 0.64 grams of carbon dioxide per hundred milliliters will allow producers to compete more fairly in the evolving beverage market. The Craft Beverage Modernization and Tax Reform Act of 2020 achieved this for grape-only wines, but fruit-based craft beverages were overlooked. This created an excise tax disparity of $2.00 to $3.00 a gallon depending on the product.
Blumenauer’s legislation will address this disparity by changing how carbonation taxes are assessed. It will reduce a barrier for more innovative cider, fruit wine, and mead. In addition, it will create more economic opportunities for craft beverage makers, allow for small producer collaborations, create more opportunities for farms to stay viable with value-added products, and allow for diversification that could help farms and businesses mitigate disasters such as fires, droughts, floods, or disease.
HR 7029 is supported by the American Cider Association, the American Mead Makers Association, and Wine America.
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The American Cider Association is an organization of cider and perry producers in the United States. Our mission is to grow a diverse and successful U.S. cider industry by providing valuable information, resources, and services to our members and by advocating on their behalf. You can learn more about them at www.ciderassociation.org.
Urge Congress to Support the USPS Shipping Equity Act
On May 23 Rep. Dan Newhouse (R-WA) once again introduced the USPS Shipping Equity Act in Congress alongside Rep. Jennifer Wexton (D-VA) and 8 other House co-sponsors. Currently, the U.S. Postal Service is not allowed to ship cider, beer, wine, or distilled spirits, because of a leftover, outdated ban put into effect during the Prohibition era. The USPS Shipping Equity Act would give parity to the US Postal Service, allowing it to ship licensed alcohol for commerce just like FedEex or UPS. Additionally, the USPS Shipping Equity Act gives rural producers access to another option for shipping alcoholic beverages. This bill is critical in leveling the playing field and increasing consumer and manufacturer choice while bringing in millions of dollars in revenue per year that will support small businesses, rural communities, agricultural enterprises and the US Postal Service.
We encourage you to email your Congressional representatives and urge them to cosponsor the USPS Shipping Equity Act. We have set up a campaign with an email template that you can use. Click the button below to be taken to the campaign. After you’ve emailed your reps, we encourage you to take a moment to share your actions on social media and via email to inspire others to reach out to their representatives as well.
Have questions? Please email ACA CEO Michelle McGrath.
ACA Comments on Competition
The Department of the Treasury issued a “Request for Information (RFI) to solicit input regarding the current market structure and conditions of competition in the American markets for …[alcohol producers], including an assessment of any threats to competition and barriers to new entrants.” This RFI was in response to an Executive Order (EO) by President Biden issued on July 9, 2021. The EO focuses broadly on consolidation, but a specific section on beverage alcohol was included in the EO. That section addressed patterns of consolidation and unnecessary trade practice regulations in “wine, beer and spirits markets…that impede market access for smaller and independent brewers, winemakers, and distilleries.” On August 18, 2021, the ACA submitted comments addressing a range of challenges our member cideries face in these areas including wholesaler consolidation, tied-house laws, packaging supply, standards of fill, carbonation taxes, geographic indicators, harvest dates and more. You can read our public comment letter here.
The American Cider Association voices the policy and regulatory needs of cideries in Washington D.C. One of our principal strategic goals is that common sense policies and regulations at the national level support the continued growth and sustainability of the US cider industry. As a big tent organization, we work hard to ensure that all of our members benefit from our advocacy. We are excited to see small producers especially highlighted by the EO. We celebrate this opportunity to address competition and trade practices in the beverage alcohol market and we thank our members for supporting this effort.
You can read all the submitted comments on the EO on the TTB’s comment docket.
For questions or comments, please contact our executive director, Michelle McGrath, at Michelle@ciderassociation.org. To support the ACA’s advocacy work, consider joining as a member today.
Restaurant Revitalization Fund Webinar Now Available!
The recording of the Restaurant Revitalizaiton Fund (RRF) Webinar with the U.S. Small Business Association that took place on April 21, 2021 is now available to American Cider Associations members.
For more information regarding the Restaurant Revitalization Fund, check out our blog post!
Restaurant Revitalization Fund Webinar Recording
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If you were a member and are now seeing this message, please Renew your membership to continue.
Restaurant Revitalization Fund Update
UPDATE 04/27/2021 Registration for the Restaurant Revitalization Fund will begin will begin Friday at 9am and the application period will start on Monday, May 3 at 12pm ET. The online application will remain open to any eligible establishment until all funds are exhausted.
UPDATE 04/22/2021 SBA has announced technology partnerships with several point-of-sale (POS) service providers to help streamline the application process for the Restaurant Revitalization Fund (RRF). Partnerships have been established with Clover, NCR Corporation, Square, and Toast so far. Once SBA announces when applications will be accepted, qualifying businesses can work directly with these POS service providers to help them apply for RRF. The POS service providers will help in different ways, from providing an integrated application process, to supplying pre-packaged POS documentation, to hosting webinars. Check with your POS system to see what they are offering.
While SBA encourages applicants to use the POS ecosystem, applicants without access to point-of-sale service providers can submit their applications electronically at restaurants.sba.gov.
Who is eligible?
- Restaurant, Food Stand, Food Truck, Food Cart
- Snack and Nonalcoholic Beverage Bar
- Caterer
- Bar, Lounge, Saloon, Tavern
- An Inn*
- Brewery, Brewpub, Microbrewery, Taproom, Tasting room*
- Bakery*
- Winery*
- Distillery*
- A licensed facility or premise of a beverage alcohol producer where the public may taste, sample, or purchase products
- Other similar place of business in which the public or patrons assemble for the primary purpose of being served food or alcohol.
*Inns, bakeries, breweries, brewpubs, microbreweries, taprooms, tasting rooms, wineries, and distilleries are limited to those that have onsite sales to the public of 33% or more of gross sales.
What is the maximum grant amount for the RRFG?
The maximum grant amount is $5M per location and $10M total for the eligible businesses with more than one location.
Is a business that applied for and received a Paycheck Protection Program (PPP) loan eligible to apply for an RRFG?
Yes. However, the RRFG will be reduced by the total amount of PPP Loans.
What documents will an eligible business need to prepare to apply for a RRFG? (Please remember that while you can begin to compile information, you cannot yet submit your application to the SBA.)
- SBA Form 3172
- Verification for Tax Information: IRS Form 4506-T, completed and signed by Applicant. Completion of this form digitally on the SBA platform will satisfy this requirement.
- Gross Receipts Documentation: Any of the following documents demonstrating gross receipts and, if applicable, eligible expenses will satisfy this requirement.
- Business tax returns (IRS Form 1120 or IRS 1120-S)
- IRS Forms 1040 Schedule C; IRS Forms 1040 Schedule F
- For a partnership: partnership’s IRS Form 1065 (including K-1s)
- Bank statements
- Externally or internally prepared financial statements such as Income Statements or Profit and Loss Statements
- Point of sale report(s), including IRS Form 1099-K
- For applicants that are a brewpub, tasting room, taproom, brewery, winery, distillery, or bakery:
- Documents proving that onsite sales to the public comprise at least 33.00% of gross receipts for 2019, which may include Tax and Trade Bureau (TTB) Forms 5130.9 or TTB. For businesses who opened in 2020, the Applicant’s original business model should have contemplated at least 33.00% of gross receipts in onsite sales to the public.
What will the RRFG rollout schedule look like?
| Priority Period Days 1 to 21 | SBA will accept applications from all applicants but priority will be given to small businesses that have women, veterans, and socially or economically disadvantaged individuals that have 51% ownership. |
| Open to all Applicants Day 22 through funds exhaustion | SBA will accept applications from all eligible applicants and process applications in the order in which they are approved by SBA. |
Are some RRFG funds set aside for specific groups?
Yes, there are funds set aside for specific groups. They are as follows:
- $5 billion is set aside for applicants with 2019 gross receipts of not more than $500,000
- An additional $4 billion is set-aside for applicants with 2019 gross receipts from $500,001 to $1,500,000
- An additional $500 million is set-aside for applicants with 2019 gross receipts of not more than $50,000
What can my RRFG funds be used for?
- Business payroll costs (including sick leave)
- Payments on any business mortgage obligation
- Business rent payments (note: this does not include prepayment of rent)
- Business debt service (both principal and interest; note: this does not include any prepayment of principal or interest)
- Business utility payments
- Business maintenance expenses
- Construction of outdoor seating
- Business supplies (including protective equipment and cleaning materials)
- Business food and beverage expenses (including raw materials)
- Covered supplier costs
- Business operating expenses
For more information you can check out the RRFG Info Page at SBA or sign-up to receive updates about the RRFG from SBA. In addition, you can download the National Restaurant Association’s FAQ Guide for the Restaurant Revitalization Fund Grants
📣 ACTION ALERT: Renew the Craft Beverage Modernization and Tax Reform Act
Cideries like yours are facing the harsh economic realities of a global pandemic. Congress needs to be proactive in supporting small businesses like yours right now, but they also need to protect you from further economic harm. In a normal year, raising Federal Excise Taxes could significantly damage our industry’s viability. In 2021, raising taxes could force hundreds of cideries to permanently close their doors. Join us in urging Congress to act urgently and make the Craft Beverage Modernization and Tax Reform Act permanent NOW.
This will impact all segments of the cider industry. It’s critical we work together in reaching out to lawmakers today or come January 1, your Federal Excise Taxes may go up significantly.
Please reach out to Congress today and tell them your business needs a break: Make the Craft Beverage Modernization and Tax Reform Act permanent!
Cider Tax News
Federal alcohol excise tax reform is included in the recently passed Tax Cuts and Jobs Act. Beer, wine, spirits and cider all benefit. What’s in it for cider? The threshold for which a cider maker receives the “Small Producer Tax Credit” has been significantly broadened. Previously, you could only receive this tax credit on the first 100,000 gallons produced and only if you made less than 250,000 gallons a year. But a new credit structure has been developed for both the hard cider tax rate and the wine tax rate (which is the rate fruit cider currently falls under). The following language is from Wine America. If your cider does not qualify for the hard cider tax rate, this structure applies to your product.
“The bill will save all wineries, regardless of size, significant money through an excise tax credit mechanism which reduces the effective rate. For example, while the federal excise tax on table wine will remain unchanged at $1.07 per gallon, there will be a new tax credit of $1.00 on the first 30,000 gallons produced, making the effective tax rate $0.07 (seven cents) per gallon. The tax credit on the next 100,000 gallons produced is $0.90, and between 130,000 and 750,000 gallons produced the tax credit will be $0.535.”
For hard cider, the bill will save cideries money through a similar excise tax credit mechanism. While the federal excise tax on hard cider will remain unchanged at $0.226 per gallon, there will be a new tax credit of $0.062 on the first 30,000 gallons produced, making the effective tax rate $0.164 per gallon. The tax credit on the next 100,000 gallons produced is $0.056, and between 130,000 and 750,000 gallons produced the tax credit will be $0.033.”
This reform was passed on a temporary basis. It will expire on December 31, 2019. American Cider Association is looking at ways to increase our presence in the coalition working to make this permanent and to represent the interests of cider in this process moving forward.
Once the President signs this current version into law, it becomes effective on January 1. That does not give the TTB time to create the regulatory process to implement this law. Cideries will likely receive retroactive tax credits after the regulations are created.
For more information about this law, please visit Wine America’s site, or contact Michelle McGrath at michelle@ciderassociation.org.