“Farm to Glass” Legislation Could Have Big Impact on Region’s Beer and Wine Making

New legislation introduced in the House of Representatives would bring tax relief to beer, wine, cider, and mead makers who use a certain percentage of Michigan grown ingredients in their product.
Under the bill, House Bill 5275 sponsored by Representative Doug Geiss (D-Taylor), a tax credit would be available to wine makers, small winemakers, brewers, mircro brewers and brewpubs – which are defined under the act – who use a certain percentage of Michigan grown ingredients between the years 2015 to 2019. Brewers, micro brewers and brewpubs would be eligible for the tax credit where at least 20% of the hops and at least 40% of the other ingredients are grown or produced in Michigan. Wine makers would be eligible when they use at least 40% of ingredients that are grown or produced in Michigan. The tax credit would break down like this:
  • 8 cents per gallon credit on the first 500,000 gallons;
  • 4 cents per gallon credit on next 14.5 million gallons;
  • No credit after 15 million gallons.
Beginning in 2020, the bill would require at least 40% hops and 50% other ingredients for beer to receive the tax credit, and at least 50% of ingredients for wine, cider and mead to receive the credit. Eligible makers would need to submit their claim for the credit within 3 months of the date of sale of their beverage. Wine makers, small wine makers, brewers, micro brewers and brewpubs that meet the threshold of Michigan grown or produced ingredients would be allowed to include the “Michigan Farm to Glass” label on their beverage.
Wine, beer and spirit making is booming in northern Michigan, and this bill could be very positive for both beverage makers, and growers and producers of the “ingredients” like hops and grains. It is likely that all northern Michigan wine makers and brewers would meet the gallon threshold and be able to qualify for the credit. However, what is uncertain is whether enough of the other “ingredients” exist at a state level for brewers to meet the threshold for other ingredients.
House Bill 5275 received a hearing in the House Regulatory Reform committee this past week. A number of northern Michigan wine, beer and mead makers were on hand to follow the proceedings and give testimony.
Time will tell, but the Northern Michigan Chamber Alliance will continue to follow this bill closely to gauge its impact on a booming industry in our region.
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