Small Va. craft distillery asks Congress for tax break

WASHINGTON — As distilleries, big and small, fight to make a name in a market dominated by national brands, local business owners gaining a following for craft whiskey are asking Congress to give them a hand.

The first legal distillery in Loudoun County since prohibition, Catoctin Creek Distilling Company, is finding fans of its organic rye whiskey. And like other small distillers, its owner is asking their representatives for a tax break to help his business grow.

“Our business has been expanding rapidly … we started in 2009 with just two people: my wife and myself. And now we employ about 20 people,” said Catoctin Creek Distilling Company Owner Scott Harris.

Harris said he believes his small distillery could add employees and stir tourism if Congress extended to distilleries the federal excise tax breaks currently given to craft beer makers and small wineries. Right now, Harris and other craft distillers pay the same federal excise tax rate as their big competitors such as Jack Daniels and Jim Beam.

“It’s very hard for smaller companies like ours to compete and to do innovative, new products like we’re doing,” Harris said.

Distillers are asking Congress to cut the federal excise tax on the first 100,000 gallons of spirits produced to $2.70 per gallon for all distillers. The rate would then rise to $13.34 per gallon on alcohol produced after the first 100,000 gallons.

As craft beers broaden their reach in the American marketplace, craft whiskey is showing signs of following.

“When I started this business, there were approximately six craft distillers in Virginia and now there are over 44 in Virginia alone,” Harris said.

Catoctin Creek’s signature product is its Roundstone Rye Whiskey made from scratch in Purcellville, Virginia.

“You get that spicy kick that you get from rye whiskey but with this delicious round, fruity flavor that comes from the grain that we use,” Harris said.

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