Larsen Puts Forward Bill to Boost Growing Craft Distilleries Industry, Create Jobs

May 2, 2013 Issues: Jobs Labor and the Economy

Larsen, DelBene Unveil the Bill to Cut Taxes on Craft Distilleries in Everett

EVERETT, Wash.—Craft distilleries will be able to grow and create new jobs if Congress passes a new bill authored by Rep. Rick Larsen, WA-02. Larsen is joining Rep. Suzan DelBene, WA-01, a cosponsor of the bill, and Northwest Washington craft distillers to announce the Small Distilleries Fairness Act today in Everett, Washington.

“Dozens of new craft distilleries across Washington state are working hard to make our state a leader in this growing industry,” Larsen said. “My bill will help create jobs by allowing small distilleries to invest in their businesses and encouraging new distilleries to open up shop. Because craft distilleries rely on local farms for their ingredients, this bill will boost local farmers too.”

“In just a few short years, our local craft distilleries have helped make Washington state nationally renowned for quality spirits in addition to our microbrews and wines,” said DelBene. “This legislation will help our local, small and start-up distilleries by lowering their business costs so they can expand and create jobs.”

Washington state is home to more than 60 craft distilleries, making it one of the top producers in the nation. Small distilleries currently pay the same federal tax as large producers, while small breweries and wineries pay a significantly smaller tax rate than their larger competitors. Larsen’s bill will cut federal tax rates by 80 percent for businesses that produce no more than 60,000 proof gallons of distilled spirits a year.

“With a reduction in the federal excise tax, my business could finally consider hiring our first employees and achieve reasonable living wages for us,” said John Lundin, owner of Bluewater Organic Distilling in Everett. “We could confidently invest in equipment and expand marketing efforts. We would become more competitive in pricing our products, allowing us to reach further in our distribution. The small-batch craft distilling industry has the potential to achieve a scale proportionate to the craft brewing and winery industries. In recent years, consolidation has left only a handful of large manufacturers in the liquor market, each of which benefit from tremendous economies of scale. A reduction in the federal excise tax would provide steadier footing for our craft industry, and level the playing field in the market.”

“The Washington Distillers Guild fully supports Congressman Larsen’s bill,” said Jason Parker, secretary of the Washington Distillers Guild and owner of Copperworks Distilling in Seattle. “By our calculations, these changes reduce the cost of sales on an 80 proof bottle by $1.70. Since that $1.70 also receives distributor markup and fees, retailer markup and fees, and state liquor and liter tax, the total price reduction to the consumer would be about $4.00 per bottle. This reduction will allow craft spirits to be much more price competitive, and make distilleries more likely to succeed.”

“Craft distilleries are just starting to flourish in Snohomish County, and Congressman Larsen’s bill would help new distillers open and the industry to thrive here,” said Ryan Hembree, the owner of Skip Rock Distillers in Snohomish and a member of the Snohomish County Craft Beverage Guild. “This bill would go beyond helping just distilleries because craft distilleries like mine use locally farmed ingredients from farmers we know and trust.”

Reps. Jim McDermott, WA-07, Denny Heck, WA-10, and Derek Kilmer, WA-06 are also original cosponsors of the bill.

The text of the Small Distilleries Fairness Act can be found here: https://go.usa.gov/TVje.