US Spirit Act: Tax Breaks for Local Craft Distillers

Strengthening Local Supply Chains: US Small Distilleries Receive Federal Tax Credit Support

On June 29, the US formally passed the bipartisan Spirit Act, designed to provide tax relief for small craft distilleries using domestic agricultural raw materials. Led by Jeff Hurd, co-chair of the Congressional Craft Spirits Caucus, and co-sponsored by Jill Tokuda, the act establishes a Federal Excise Tax (FET) credit mechanism. This provides economic support to small distillers meeting production standards, strengthening the bond between the craft spirits industry and local agriculture.

Tax Relief Standards and Measures

The act applies to small distilleries with an annual production of less than 100,000 proof gallons. If at least 90% of a distillery's raw materials are sourced domestically, they qualify for significant tax breaks. Emily Pennington, CEO of ACSA, praised the move, noting that craft spirits are deeply rooted in agriculture. Every bottle represents an investment in local grains, specialty crops, and jobs, providing critical relief for distilleries facing rising production costs.

Countering Cost Pressures and Economic Resilience

Lee Wood, President of the Colorado Distillers Guild, pointed out that independent distilleries are struggling with surging costs for grain, glass, barrels, and logistics. Jeff Hurd believes the bill does more than offer tax relief; it strengthens the domestic supply chain. By reinvesting tax credits into employees and local farms, small distilleries deepen their community partnerships. This measure is seen as a cornerstone for protecting the craft spirits industry and the competitiveness of US manufacturing during economic instability.

📅 Release Date: 2026-06-30

🔗 Source: https://www.thespiritsbusiness.com/2026/06/spirit-act-gives-tax-relief-to-us-craft-distillers/