If there’s one thing the wine industry in America needs, it’s for the laws around alcohol to get a bit simpler. Slowly, that seems to be happening, if only in the most minute of increments.
Tucked into the recent $900 billion, 6000-page COVID-19 economic relief bill were many regulations, laws, and appropriations, among which was a significant, permanent revision to the tax rates that wineries, distillers, and breweries pay based on their production levels and the alcoholic strength of their products.
Under this set of regulations known collectively as the Craft Beverage Modernization and Tax Reform Act, taxes generally got lowered for smaller producers, which should help out a lot of them. Wineries have long been forced to pay higher taxes on wines they produce that are above 14.5% alcohol (leading many to “fudge” the numbers on their labels to avoid paying the higher tax rate).
Complicating the matter (and making it even easier to cheat), the tolerances for measurement of alcohol level have always been loose. Wines under 14% alcohol have allowed a tolerance of plus or minus 1.5% in their stated alcohol. Meaning that a wine labeled with 13.9% alcohol could technically be legal even if its actual alcohol content were 15.4%. Wines over 14% alcohol are given a 1% tolerance, meaning that 14.8% on the label could mean 15.8% in the bottle.
The previous excise tax schedule that charged steeper taxes ($0.50 per gallon more) for wines over 14% alcohol greatly incentivized any winemaker whose wine was less than 15% in alcohol to lie about alcohol levels on the label. And the greater the size of production, the greater the incentive to fudge the numbers.
Moving forward, all wines under 16% alcohol will be taxed the same. Will this lead to more accurate labeling of alcohol levels for most table wines? It remains to be seen. Not that most consumers, would ever notice, of course.