WASHINGTON -- Hard Cider makers may get a tax break if a redefining of the alcohol drink as a wine moves forward.
The two-year tax extender legislation referred to the House Ways and Means Committee would redefine the hard cider as a wine for the purpose of the excise tax, according to a report in the Daily Caller.
Under current federal tax law, the definition of hard cider only allows for up to 7% alcohol by volume before it is taxed at the more expensive rate for wine, and only a certain level of carbonation before it is subject to the more expensive champagne tax ($3.30 or $3.40/gallon), according to the United States Association of Cider Makers.
The bill 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.
While the cider association supports the above changes, it questions an additional change that would require hard ciders to be made largely from “apples, apple juice concentrate, pears or pear juice concentrate, in combination with water.”
Using fruit, the association said, makes it difficult to control the alcohol content.
“Because many cider producers are small, craft operators, who rely on natural raw materials, they often have little ability to predict and control the precise alcohol content and carbonation level of their product,” the association said. “Meanwhile, cider consumers expect a somewhat high level of carbonation equivalent to that of most beer.”
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