Americans for Tax Reform today released a coalition letter signed by over 30 organizations and activists urging Treasury Secretary Steven Mnuchin to delay excise tax payments for beer, wine, and distilled spirit manufacturers and importers through the end of 2020.
As the letter notes, COVID-19 has forced the closure of retail establishments, tasting rooms, restaurants and bars, a situation that has weakened consumer spending, and threatened the livelihood of small businesses. This decline in commerce has harmed alcohol manufacturers and importers, especially smaller breweries, distillers, and wineries. Delaying payments of excise taxes is a modest step toward helping manufacturers and importers:
“Deferring excise tax payments will help these businesses receive much needed emergency liquidity and allow them to prioritize paying workers and meeting expenses over making tax payments. This is a modest step toward helping businesses, as these taxes will eventually be repaid.”
Treasury has already utilized its legal authority to postpone excise taxes for the second quarter of 2020. Moving forward, this should be extended through the end of 2020.
In addition, it is imperative that any excise tax deferral apply equally to importers. As the letter notes, there is no reason to exclude or limit importers given they face the same excise taxes as products manufactured in the U.S, and face the same economic challenges.
The Q2 excise tax deferment imposed burdensome requirements on importers by requiring “significant financial hardship,” which U.S. Customs and Border Protection defined as a loss of more than 40 percent in revenue. This is the wrong approach – excise tax deferral should be available equally to all alcohol manufacturers and importers.
Deferring excise tax payments for distillers, breweries and wineries through the end of the year is a simple step that will help manufacturers and importers as they look to survive the damage caused by COVID-19.
The full letter can be found here.