The new tax law contains some special breaks for certain industries. During a webinar, Valuing Wineries in 2018—An Update, Keith Meyers (Perkins & Co.) and Chris Meineke (Brotemarkle, Davis & Co.) presented some key highlights of the changes for the wine industry. The new tax law:
- Expands the excise tax credit for all wineries. The legislation does away with the existing phaseout based on production size and allows all wineries to claim a credit of between $0.535 and $1 per gallon on the first 750,000 gallons of production. The total value of the full credit is $451,700 per year, based on producing the full 750,000 gallons.
- Allows sparkling wine to qualify for the credit. For the first time, sparkling wine is eligible to receive the tax credits mentioned above.
- Increases the alcohol by volume (ABV) allowed for the $1.07 tax rate from 14% to 16% ABV. Wines with 14% to 16% ABV are currently taxed at $1.57 per gallon and will now be taxed at the still wine rate of $1.07 per gallon.
- Increases the carbonation allowed in certain low alcohol wines (8.5% ABV or less) taxed at the $1.07-per-gallon rate from 0.392 to 0.64 grams of carbon dioxide per hundred milliliters.
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