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.
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!
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
- Bar, Lounge, Saloon, Tavern
- An Inn*
- Brewery, Brewpub, Microbrewery, Taproom, Tasting room*
- 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?
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
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.
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.