U.S. Senator Charles E. Schumer of New York has introduced the Bubble Tax Modernization Act to the Senate (S.5442) to amend the Internal Revenue Code to remove the differentiation between mead and low alcohol wine for purposes of the tax imposed on wines. The bill will help cider makers avoid paying a much higher tax if their cider reaches a certain carbonation level.
Carbonation taxes make carbonating agricultural beverages such as fruit wine, fruit cider, and fruit mead at sparkling levels cost prohibitive.
The Craft Beverage Modernization and Tax Reform Act achieved this for grape-only wines, but fruit-based cider, wine, and mead were overlooked. This created an excise tax disparity of $2-$3 a gallon depending on the product.
“There is no reason that craft cidermakers should get hit with a whopping 1,400% tax increase if they want to make bubblier cider or cider that is mixed with other fruits which has soared in popularity. It hurts our craft cidermakers, hurts consumers, hurts our growers, and is slowing the growth of this booming industry in Upstate NY,” said Senator Schumer. “That is why I am proud to support the Bubble Tax Modernization Act to finally pop this convoluted carbonation tax hamstringing the craft cider industry.”
Additionally, extreme weather events can create gaps in apple harvest, making co-fermentation or blending with other desirable fruits necessary in certain harvest years.
“Flexibility in fruit is an important disaster mitigation option for growers,” says Michelle McGrath, CEO of the American Cider Association. “We’ve seen an uptick in co-ferments and fruit blends driven by consumer interest, but also driven by necessity. If your harvest was demolished by a freeze or a hurricane or a heat dome, why wouldn’t you consider blending with other fruit that had a better harvest? The bubble tax makes it harder to pivot when needed,” McGrath continued. “Frankly, bubble taxes are a needless snub at America’s fruit farmers. Don’t they have it hard enough?”
The American Cider Association has set up a page here where industry members and consumers can send a letter to their representative in Congress to support the bill.