CIDER Act would boost apple sales

By Tom Rivers, Editor Posted 4 September 2013 at 12:00 am

Collins pushes for tax code changes for cider

Photo By Tom Rivers – Congressman Chris Collins joins members of the Orleans County farm community on Tuesday to promote the Cider Industry Deserves Equal Regulation Act, which would reduce the excise tax on hard cider. Collins is pictured inside the tasting room at Leonard Oakes Estate Winery in Medina.

MEDINA – Hard cider was popular more than a century ago and then went mostly dormant until a recent comeback.

The industry is on a resurgence and its sales have tripled since 2007. But the potential may not be realized due to an outdated tax structure that sometimes taxes hard cider to the same rate as wine.

“Hard cider is growing leaps and bounds,” said Congressman Chris Collins, R-Clarence, who has introduced the Cider Industry Deserves Equal Regulation Act with Earl Blumenauer, a Democrat from Oregon.

The CIDER Act would change the 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.

“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.”

The average bottle of hard cider contains the juice of three apples. If there is more demand for hard cider, New York growers will see more demand for apples, especially those at juice-grade, which will strengthen the apple industry.

“This change would be good for the economy, jobs and Orleans County,” Collins said at Leonard Oakes Estate Winery in Medina.

Wendy Wilson, the winery’s president, said a change in the tax code, taxing hard cider at a reduced rate, would save the winery about $8,000 annually in taxes. That money could be used for more marketing to draw more people to the area, she said.

The CIDER Act proposes three changes for the industry:

Increases the carbonation level allowed for hard cider. Cider consumers expect a 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 outdated 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 and 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 said it could be passed as a standalone bill or perhaps be included in the Farm Bill or other legislation.

Jim Allen, president of the New York Apple Association, said the CIDER Act would be a big benefit to 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,” Allen said.