WASHINGTON, DC – U.S. Rep. Mike Thompson (CA-5), senior member of the House Committee on Ways and Means and Co-Chair of the Congressional Wine Caucus, introduced the Wine Excise Tax Modernization Act (H.R. 4934), bipartisan legislation to modernize federal excise taxes on wine to allow winemakers of all sizes and grape growers to create new, innovative products and keep pace with advances in viticulture. U.S. Rep. David Reichert (R-WA) joined Rep. Thompson in introducing this legislation.

“The tax code should not be an impediment to growth and innovation,” said Thompson. “That’s why I’m proud to introduce this legislation, which modernizes an outdated tax structure to allow our wine community – which produces the finest wines in the world – to keep pace with changing consumer demands in the years ahead.”

“Winegrowers across the North Coast have been focused on quality and innovation for decades,” said Debra Sommerfield, president of the Lake County Winegrape Commission. “We are grateful for Congressman Thompson’s in-depth understanding of the issues and appreciate him taking steps to support this innovation.”

Specifically, the Wine Excise Tax Modernization Act:

– Simplifies the small producer tax credit and expands eligibility to all producers: This ensures a level playing field for wineries of all sizes, while also encouraging small- and mid-sized producers to grow without fear of facing the steep phase-out of the current small producer credit.

– Increases the allowable carbonation limit for still wine to 6.4 grams/liter: The current limit is preventing wine producers from developing new products for consumers. The Tax Code should not be an impediment to innovation

– Eliminates the luxury tax on sparkling wine: The current tax rate for sparkling wine, which is significantly higher than that of still wine, was established after World War II when champagne was viewed as a luxury from France and U.S. consumption was low. It is long past time for this rate to be reduced.

– Raises the Alcohol-By-Volume (ABV) limit from 14 to 16 percent:  Changes in winemaking and vineyard practices have led to a steady increase in the ABV level of table wines, but the Tax Code hasn’t kept pace with these developments.

The Wine Excise Tax Modernization Act has been referred to the House Committee on Ways and Means for further consideration.

Congressman Mike Thompson represents California’s Fifth Congressional District, which includes all or part of Contra Costa, Lake, Napa, Solano and Sonoma counties. He is a senior member of the House Ways and Means Committee. Rep. Thompson is also a member of the fiscally conservative Blue Dog Coalition and chairs the bipartisan, bicameral Congressional Wine Caucus.