Bills
| 3.23.22

Adjusting the Tax Code for the Hard Cider Industry (H.R. 600)

Do you support or oppose this bill?

What is H.R. 600?

(Updated July 19, 2017)

This bill would change the way hard ciders are taxed. The definition of “hard cider” would be revised for the excise tax on distilled spirits, wines, and beer so it covers any wine that:

  • Has a carbonation level at or below a level of 6.4 grams per liter;

  • Is derived primarily from apples, apple juice concentrate and water, pears, or pear juice concentrate and water;

  • Contains no fruit product or fruit flavoring other than apple or pear;

  • Contains between 0.5 percent and 8.5 percent alcohol by volume.

These changes would allow cider makers to use natural products that are available to them without increasing their tax burden. The changes would also establish standards for carbonation levels and alcohol content that accounts for the sugar content of apples.

Current law taxes ciders with greater than 7 percent alcohol content at a higher rate, and ciders with too much carbonation are assessed the champagne tax which can be over $3 per gallon. Both of these provisions would be prevented from impacting cider makers by this legislation.

Argument in favor

These are modest reforms that will help the cider industry deliver a quality product to consumers without excessive tax liability.

Argument opposed

Cider makers shouldn't get tax breaks because they don't know how their product's characteristics can fluctuate (alcohol content or carbonation).

Impact

People who are into hard cider, producers and manufacturers of hard cider, the distilled spirit industry, the tax code, and federal agencies that tax and regulate the cider industry.

Cost of H.R. 600

A CBO cost estimate is unavailable.

Additional Info

In-Depth: Sponsoring Rep. Earl Blumenauer (D-OR) introduced this legislation to protect cider makers from increases in their tax liability brought on by the inconsistencies of the fermentation process:

“Cider making is sometimes closer to an art than a science. As the American apple and pear hard cider industry becomes more prominent on the world stage, and cider becomes a beverage choice for more Americans’ developing palettes, we need to ensure that cideries have every opportunity to expand and meet the needs of this growing market without an unfair tax burden.”

This provision was included in the omnibus appropriations package agreed to by Congress and signed into law in December 2015.


Of Note: The cider industry has seen significant growth in recent years, as sales of cider in the U.S. more than tripled between 2012 and 2014 rising from 2.3 million to 7.8 million cases. In the 12 months following November 2013 the cider industry accounted for over $366 million of the $31.7 billion made in the U.S. beer category.


Media:

Summary by Eric Revell
(Photo Credit: Flickr user Mark Dahm)