Congress Passes Permanent Extension of Federal Alcohol Tax Relief

Alex Koral | December 23, 2020

On December 22, Congress passed a new COVID relief measure, providing necessary relief and aid to the still reeling economy.

Included in the bill was the permanent extension of the Craft Beverage Modernization and Tax Reform Act (CBMTRA). This is extremely welcome to the beverage alcohol industry, as suppliers would have faced a huge hike in their federal excise taxes effective January 2021 if Congress had not acted.

The CBMTRA was first enacted in December 2017, providing steep cuts to federal excise taxes on alcohol, including specific allowances for certain product types like ciders, mead, and sparkling wines. A fuller account of what was originally included in CBMTRA, which have now been made permanent, is described in an earlier post on our blog.

This relief is extremely beneficial to the beverage alcohol industry, which has been severely impacted this year by the ongoing COVID crisis. And that the reduced tax rates have been made permanent means that beverage alcohol suppliers do not need to worry about this kind of down-to-the-wire legislating in future years. The CBMTRA has been extremely popular, receiving broad, by-partisan support for years, so it is very positive to see it finally be granted permanent status and have a resolution to the lobbying efforts of many industry organizations.