PLATTSBURGH — U.S. Sen. Charles Schumer's proposed CIDER Act has been included in the tax-extenders package.
He says that segment of the Protecting Americans From Tax Hikes Act of 2015 would benefit New York state's apple producers and hard-cider makers.
ALCOHOL LINKED TO TAX
If passed, as is expected, the Cider Investment and Development through Excise-tax Reduction Act would change the definition of hard apple and pear cider in the Internal Revenue Code.
It would increase the allowed volume of alcohol in hard cider from 7 to 8.5 percent. That would allow more products to be labeled and taxed as hard cider instead of the costlier tax structure for wine.
According to the U.S. Treasury Department's Alcohol and Tobacco Tax and Trade Bureau website, the federal excise tax for wine with up to 14 percent alcohol is $1.07 per gallon, while that for hard cider is 23 cents per gallon.
So the savings for hard-cider producers would be significant.
The proposal would also increase the permitted level of carbonation. Those standards presently result in carbonated hard cider being taxed at the same higher rates as sparkling wine.
The tax rate for naturally sparkling wine is $3.40 per gallon, while that for artificially carbonated wine is $3.30 per gallon.
PRODUCER PLEASED
Elf's Farm Winery and Adirondack Cider Company owner Tom Frey welcomed the news that the Cider Act is incorporated in the package.
"It's just a phenomenal law," he said.
Frey said it would allow the Plattsburgh company to increase its variety of cider projects.
They would more often use a process called "sweating" apples, he said, which leads to a slightly higher alcohol content and a more robust cider.
BEER ALTERNATIVE
They would also be able to offer more sparkling ciders, which have become an increasingly popular alternative to beer and ale.
Frey said their Adirondack Hard Cider is a carbonated cider that has not been watered down to reduce its alcohol content.
"In the past, we had to pay a higher excise tax," he said.
"This will provide us more money we can then invest in our infrastructure."
Schumer said the inclusion of the CIDER Act in this legislation would allow New York's apple growers and hard-cider makers to benefit from more fair taxation.
As the second-largest apple producing state in the nation, it should also be at the core of the hard-cider industry, he said.
"Under this legislation, apples that would otherwise be sold at a loss or thrown away, are now ripe for the cider press.
"By modernizing the definition of hard cider, our hard-cider industry would pay less in taxes and be able to expand and compete,” he said in a press release.
STILL FIGHTING
Frey said the act is in line with measures already passed by the state.
"It's just a win-win for us," he said.
Schumer is urging federal legislators on both sides of the aisle and in both chambers of Congress to vote for the bill.
"I have not stopped fighting to pass the CIDER Act, which would increase New York growers’ and producers’ ability to compete overseas and expand their business,” he said.
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