05.26.15

Peters Tours Traverse City Whiskey Company, Highlights Bill Supporting Small Distilleries

TRAVERSE CITY, MI – U.S. Senator Gary Peters (MI) today toured Traverse City Whiskey Company and discussed bipartisan legislation he introduced last week to lower excise taxes for small craft distilleries. The Distillery Excise Tax Reform Act, which Peters introduced with Senators Dan Sullivan (R-AK) and Kirsten Gillibrand (D-NY), would lower the federal excise tax from $13.50 per proof gallon to $2.70 per proof gallon on the first 100,000 gallons produced per year. Michigan has the third highest number of distilleries in the country, with nearly 40 across the state, many of which opened in recent years.

“The craft distilling industry is a fast-growing part of Michigan’s economy, stimulating our agriculture and tourism sectors as new distilleries open across the state. But like many small businesses, craft distilleries often face significant challenges as they start and grow their businesses,” said Senator Peters. “As a member of the Senate Small Business Committee, I’m proud to introduce legislation that will help ensure craft distilleries like Traverse City Whiskey Company can purchase new equipment, hire more employees and continue boosting our state’s economy.”

“Traverse City Whiskey Company is pleased to welcome Senator Peters to Northern Michigan,” said Chris Fredrickson, President and Co-Founder of Traverse City Whiskey Company. “We thank him for listening to the needs of Michigan small business owners and introducing this legislation that recognizes the unique capital demands of starting a distillery and will reduce the burden on craft distilleries like ours, allowing us to expand our facility and operations.”

Traverse City Whiskey Company first opened in 2010 and relocated to its current facility last year. The small distillery aims to continue expanding its facilities and capabilities, and this past February, it finished construction on a 2,400 sq. ft. distillery and tasting room.

Small craft distillers facing the costs of purchasing new equipment and hiring new employees are least able to pay these excise taxes, and because of the capital required to buy the stills, distilleries are more difficult to start than microbreweries or wineries.

For the average young distillery producing 30,000 proof gallons in a year, reducing the excise tax to $2.70 proof gallon is a savings of $324,000 – the price of a new still or 6 new staff. The bill would additionally create distiller tax parity with craft brewers and winemakers – groups that already have an excise tax schedule that recognizes and supports domestic manufacturing growth in their industries.

Estimates show that the growing spirit industry could add up to $400 million to Michigan’s economy, and many Michigan distilleries utilize locally-grown grains and fruits for their products. Across the country, the distilled spirits industry directly employs over 800,000 Americans directly and supports over 1.2 million jobs. There are now over 700 small distilleries across the country, an increase from only 92 as of 2010. 

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