Breweries, distilleries, and wineries face a possible 400% tax increase

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RALEIGH, N.C. (WNCN) — Taxes on liquor, beer and wine could be going up a whopping 400 percent if Congress doesn’t act by the end of the year. 

“The first bourbon since prohibition in Wake County,” said Chris Mielke, the President of Lonerider Spirits.

Lonerider had already been brewing beer for almost a decade when they tried their hand at spirits last year. 

“Beer is kinda slowing down a little bit because there’s so much out there in the marketplace. Well, we noticed that with distilleries there wasn’t as many,” Mielke said.

The Raleigh Rum Company got its start back in 2014. 

 “The Raleigh Rum Company was actually started by three of us. We’re actually friends from high school. We went to Apex High in the area and we actually were just really inspired by the awesome craft beer that was in the area,” Matt Grossman, Co-Founder said.

Both local businesses helped by the Craft Beverage Modernization and Tax Reform Act that Congress passed back in 2017.

It lowered the federal excise tax from $13.50 per proof gallon to $2.70. Per bottle, the tax went down from $2.14 to 43 cents. 

“That was a big impact for us. We were able to kinda reinvest into our business. Operate our equipment a little bit. We were definitely planning on making some hires here pretty soon,” Grossman said.

All of that is now on hold.

That’s because that act is set to expire at the end of the year. It would mean a 400% increase in the federal excise tax for breweries, distilleries, and wineries. 

“It would stifle expansion,” Mielke said.

Both men said in an already competitive market place, raising prices just isn’t an option. 

There is bi-partisan support for a one-year expansion of the tax cut. It’s been added to a broader spending package. 

“Help reduce some of that burden that we’ve got, that tax burden. Help us grow,” Grossman.

The House passed that broader spending package Tuesday. 

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