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For years, hard cider had been treading a thin line between being considered an alcoholic beverage as beer and being considered a wine. To many, this may not seem like a big deal, but to cider makers, this could mean the difference between being taxed at a normal rate or being taxed an extra excise tax which can be up to fifteen times more than the regular taxation rate! With the explosion of craft beer giving way to creative new beers and styles, these narrow rules on what defines hard cider is really a hindrance on not only cider’s expansion, but also new cider innovation. The new bills being proposed are aiming to end this unfair taxation and level the playing field for cider makers.
HR600 in the house and S1459 in the Senate alternatively called the CIDER Act (Cider Investment and Development through Excise tax Reduction), plan to rewrite the definition of hard cider to broaden the terms and effectively change the IRS taxation code regarding the beverage. HR600 was introduced by House Representatives Earl Blumenauer and Chris Collins, while S1459 was introduced by Senator Charles Schumer. The bill’s major amendments call for changes in the allowed alcohol content, carbonation levels, and looks to include pear cider to the hard cider definition in the tax code. The bills aim to rewrite the definition of hard cider to state: “(1) the carbonation level of which does not exceed 6.4 grams per liter; (2) which is derived primarily from apples, apple juice concentrate and water, pears, or pear juice concentrate and water; (3) which contains no fruit product or fruit flavoring other than apple or pear; and (4) which contains at least one-half of 1% and less than 8.5% alcohol by volume.”
At the current state, many cider makers are unable to experiment and be innovative with cider because a spike in alcohol content or carbonation could mean costly taxation increases and sudden loss in profits. If the new laws pass, it could lead cider makers to take chances on new and more interesting ciders. Further, US cider producers would conform to international standards and be able to compete in the global marketplace. Additionally, the way in which the IRS taxation codes were written for hard cider led to some confusion amongst cider makers as to what taxation their ciders would incur. These new laws were purposely written in a way that is easy to understand and easy for cider makers to navigate.
The HR600 bill was introduced in to the House on January 28, 2015, where it is awaiting a decision, and S1459 bill was introduced into the Senate on May 22, 2015. For a simplified overview, each bill must get passed in the House and the Senate, respectively, in order for it to progress on. If the bill gets the approval from congress, it will move to the president, who has the ability to pass it and make it a law, or veto it. For hard cider lovers who would like to see their cider options expand, you can get involved too! The United States Association of Cider Makers (USACM) has put together a great page with information on how everyone can do their part to help the cider industry, click here to take action!
Last month, the Board of Directors of the USACM met in Washington, DC to gain support for CIDER Act. Together, they met with Congressional members from across the country in support of the proposed legislation on Capitol Hill, and followed the visits with a Cider Reception and Tasting, where invitees got to sample fine craft ciders from around the United States.
Board President, Mike Beck of Uncle John’s Hard Cider Company, said, “Our meetings were very productive and we left a favorable impression on the folks who represent us on Capitol Hill. We are encouraged that Congress will act on this common sense, job creating proposal and unlock the potential of this great industry.”
Contributed by: Eric dos Reis, Staff Writer of Hard Cider News