Congressmen Earl Blumenauer, D-Ore., and Chris Collins, R-N.Y., introduced the bipartisan Cider Industry Deserves Equal Regulation (CIDER) Act. The act would amend the section of the tax code that deals with wine and related beverages to allow hard cider-makers increased flexibility in their final products without potentially facing increased tax liability.
During the fermentation process, a variety of factors can lead to small changes in the composition of a cider’s alcohol content and carbonation. Because of the way that hard cider currently is defined in the tax code, these variations can lead to cider being taxed at a rate as much as 15 times higher than what the statute clearly intended, according to Blumenauer’s website.
Under current federal law, for example, the definition of hard cider allows for up to 7 percent alcohol by volume before it is taxed as a wine and only a certain level of carbonation before it is subject to the Champagne tax, according to the United States Association of Cider Makers (USACM), Chicago.
The Blumenauer-Collins bill would broaden this definition to include pear as well as apple cider and to greatly reduce the chance that this taxation would occur, it notes. It also would increase the carbonation level for hard cider, thereby meeting customer expectations, and align the alcohol content standard for hard cider with the natural sugar content of apples, according to the USACM.
"We are extremely excited to be working with Congressmen Blumenauer and Collins on this very important legislation for our industry and are deeply appreciative of their leadership on this matter," said Mike Beck, president of the USACM, in a statement. "Reps. Blumenauer and Collins deserve great credit for recognizing that America's cider industry is primed for continued strong growth and that we can increase our competitiveness in international markets and create jobs here in the United States if this legislation is enacted."
"This legislation really is about updating the tax law to reflect the realities in today's cider marketplace," he added. "We are going to work hard with Reps. Blumenauer and Collins to educate other members about this legislation and our industry's needs so that we can increase our competitiveness, grow our industry, and create more jobs. We are hopeful that a Senate companion bill will be introduced soon and that this legislative change will be made part of any tax legislation that is considered by the Congress."