Tax code changes will strengthen cider industry, increase demand for NYS apples
Congressman Chris Collins, NY-27, announced today his sponsorship of the bipartisan Cider Industry Deserves Equal Regulation Act (H.R. 2921), commonly known as the CIDER Act. If passed, the legislation would change the outdated definition of hard cider in federal tax law. Currently, hard cider is taxed at different rates based on its alcohol and carbonation level, both of which can fluctuate, especially for small, craft operators.
Collins detailed the CIDER Act at two stops in New York's 27th Congressional District: BlackBird Cider Works in Barker and LynOaken Farms in Medina. Both operations are examples of the kind of local industry that will benefit from the legislation.
"The hard cider industry is poised for major growth and, unless the federal tax code is reasonably adjusted, our producers and farmers are going to miss out on this economic opportunity," Collins said. "If these simple changes to the tax code are made, not only will the American cider industry expand and become more competitive and profitable, but our local apple growers will see a major demand for their product. On average, every bottle of hard cider contains the juice of three apples."
To improve the taxing regulations for hard cider producers, the bill:
•Increases the carbonation level allowed for hard cider. Cider consumers expect a somewhat high level of carbonation, equivalent to that of most beer. Current federal tax code does not permit this desired carbonation level without reclassifying the project as champagne, which is taxed at a much higher rate.
•Increases the alcohol content allowed in hard cider. This change will align the alcohol content with the natural sugar content of apples. The existing definition of hard cider only allows up to 7 percent alcohol by volume before it is taxed as wine.
•Allows pears to be used in hard cider production. Pear hard cider is a popular flavor in the international hard cider market. Collins' camp said prohibiting it weakens the U.S. cider industry's ability to compete globally and hampers sustainable growth.
Collins is the lead Republican sponsor of the CIDER Act in the House of Representatives. He introduced the bill in August along with Congressman Earl Blumenauer, a democrat from Oregon.
Scott Donovan of BlackBird Cider Works said, "As a small business tapping into the growing demand for craft hard cider, the CIDER Act will bring clarity to the tax code that does not exist now, simplify the way hard cider is taxed, and allow our industry to grow and expand. I want to thank Congressman Collins for his leadership on this issue."
Wendy Oakes Wilson of LynOaken Farms and Leonard Oakes Estate Winery said, "As a member of a family-run farm that both grows apples and produces hard cider, the CIDER Act will help our business. The bill will ensure that we are fairly taxed on the hard cider we produce and the demand for our apples should increase as the American cider industry reaps the business benefits of this proposed change in the tax code. We are grateful for Congressman Collins' support and understanding of this important issue."
Mike Beck, president of the United States Association of Cider Makers, said, "Today, Congressman Collins took a critical first step towards making the United States hard cider industry more competitive internationally and treated more fairly under the tax code. Our industry has tripled in size since 2007, and the existing tax structure is insufficient to deal with this growth. As a result, the potential to stunt this surge exists, and HR 2921 will remedy this problem. On behalf of the United States Association of Cider Makers, I am pleased to fully endorse this legislation and pledge our grassroots efforts to this legislation's success."
Jim Allen, president of NY Apple Association, said, "We applaud Congressman Collins for sponsoring HR 2921, which will greatly benefit NY apple growers and cider makers. Our state has a long and trusted tradition of producing the best apple cider, and with this legislation, this tradition will continue and expand with new cider options. By joining Congressman Blumenauer (D-OR) and working with Sen. Schumer (D-NY), the NY Apple Growers Association is confident that this legislation will garner broad based support in Congress. We are grateful to Mr. Collins for helping to expand New York apple growers' role in growing the New York economy."