2017 Hard Cider Federal Tax Changes
The Cider Act will lower the tax structure for many cider makers. Take a look at this video to see how the changes could affect your business and individual products.
- [Carla] On January 1st, 2017, The CIDER Act will go into effect.
This act changes how cider is classified for taxation purposes.
This new law will lower the tax structure for many cider makers.
Follow along to learn how your cider will be classified with this new system.
This is where the major changes have taken place within the classification structure.
If your cider meets the following criteria, the tax rate will be 22.6 cents per gallon.
It must contain less than 8.5 percent alcohol by volume.
Previously to this tax rate, the alcohol by volume level was less than seven percent.
This is good news for the cider industry, since apples are naturally higher in sugar, and often ferment at a higher level, it allows for a purer product.
Also to meet the criteria for this tax rate, the cider must be made from apples, pears, or concentrate of apples or pears and water.
This is the first that pears have been included in the cider taxation structure.
The following tax rates and cider criteria remain the same as in previous years.
Follow along as we go over them briefly.
Hard cider will be taxed as a sparkling wine at $3.40 a gallon if it contains greater than 0.64 grams of carbon dioxide per 100 milliliters, and if the carbon dioxide comes from a secondary fermentation.
Hard cider will be taxed as artificially carbonated at $3.30 a gallon if: it contains greater than 0.64 grams of carbon dioxide per 100 milliliters, it is artificially carbonated.
Hard cider will be taxed as a wine not over 14 percent, at $1.07 a gallon, if: it contains less than or equal to 14 percent alcohol by volume.
Hard cider will be taxed as a wine 14 to 21 percent at $1.57 a gallon if: it contains 14 to 21 percent alcohol by volume.
Hard cider will be taxed as a wine 21 to 24 percent at $3.15 a gallon if: it contains greater than or equal to 21 percent but less than 24 percent alcohol by volume.
For more information about the CIDER Act tax changes, or if you're interested in starting a hard cider business, please visit us at Penn State Extension Hard Cider.