05 Jan New Cider Act Lifts Outdated Restrictions On Alcoholic Cider-Makers
Over the past three years, sales of hard cider have nearly tripled, yet in 2015 those same sales began to marginalize. Hard cider’s growth stall was in part thanks to the hard soda revolution, like
Not Your Father’s Root Beer, and in part because of antiquated taxation laws. However, the Cider Act was passed in hopes of raising the hard cider industry’s success.The Cider Act was passed right before Christmas, as a provision in the Protecting Americans from Tax Hikes (PATH) Act. This provision will “modernize outdated cider regulations by broadening the definition of hard cider to remove the punitive tax on ciders containing pear, carbonation, or alcohol by volume (ABV) over 7 percent,” according to the press release.
“The passage of the Cider Act creates an identity for US cider-makers through a consistent and rational tax that will allow for growth not only for the beverage of cider, but for the agriculture that supports it — the apple growers,’’ said James Kohn, co-owner of Salem-based Wandering Aengus Ciderworks, in the press release.
The Cider Act breaks down into three different sections.
First, the Alcohol by Volume tax ceiling has been raised. Before the Cider Act, hard ciders could be brewed up to 7 percent ABV before being taxed at the higher rate with wines. Now cidermakers can brew up to 8.5 percent ABV without feeling the tax hike.
Second, the “bubble tax”, a tax levied on highly carbonated alcoholic drinks like champagne, will be removed. If the cider contained more than 39 percent carbon dioxide by volume, then the cidermaker would see a tax hike of up to $3.30 per gallon. Now they will enjoy being taxed similar to their beer brethren, $.23 per gallon.
Finally, the Cider Act allows cidermakers to make pear cider with all of the same taxation limits as apple cider.
However, just as the hard cider industry was getting comfortable, along came a newer, sexier competitor that would begin stealing away the same consumers that had once flocked to ciders. Hard soda became the newest craze in 2015, with the national explosion of Small Town Brewery’s “Not Your Father’s Root Beer,” followed by the release of MillerCoors’ “Henry’s Hard Soda” and Anheuser-Busch’s “Best Damned Root Beer.”
Overall, the Cider Act will help break down taxation barriers that have stifled the cider industry, thus allowing the industry to continue their upward growth. In doing so, hard cider will remain a competitor in the beer market alongside new rival hard soda, and against their old foe beer.
No Comments