The Craft Beverage Modernization and Tax Reform Act (CBMA), which went into effect in 2017 and reduced tax rates on qualified imports of distilled spirits, beer and wine, is set to expire prior to year’s end.

Since its inception, CBMA is estimated to have saved importers and producers of alcohol millions in tax credits. These savings have become even more important given the recent imposition of Section 301 tariffs on certain alcohols imported from the EU.

The CBMA needs to be renewed or made permanent and pass through the House and the Senate prior to December 31st in order for importers and producers to continue to enjoy the benefits in 2020. While most officials recognize the numerous benefits the CBMA has produced, the worry amid pundits is that the CBMA is part of a larger bill with many moving parts. Hence, the extension of the bill is more complicated than evaluating a reduced tax burden on importers and producers of alcoholic beverages.

Despite the complex nature of the larger bill, a coalition of distillers, importers and government officials are confident they can push the bill through Congress and are planning to devote the remainder of the year to ensuring the successful extension of the CBMA.

Shapiro will continue to monitor the situation and provide updates as they become available.