Reform of the USA excise tax has cut costs for foreign wine producers

The United States of America (USA) excise tax has cut costs for foreign wine producers.

From 1 January 2018, there is a lower tax rate payable on alcoholic beverages and the small producer tax credit has been extended to imported wine and sparkling wine. Previously, the small producer tax credit was only available to USA domestic producers of still wine.

The changes mean all producers, including big producers (making over 250,000 gallons) and foreign producers, will be able to claim credits on the first 750,000 gallons of wine produced.

Australian exporters can benefit from this credit by allocating the right to claim the credits to their importer, or allocating the rights between more than one importer, as they wish.

The law sunsets at the end of 2019, but with the possibility that the changes will be made permanent if they prove successful. The Alcohol and Tobacco Tax and Trade Bureau has issued guidance on the new tax along with detailed information on the new tax rates on their website.

More information is also available on the Wine Institute of California website.

Wine Australia’s US Export Market Guide will be updated shortly.