New Proposal Would Slash Taxes for California's Wine Makers

And, encourage experimentation

A representative in California is coming through big for the wine industry after introducing a bill that would provide a number of tax breaks to help spur innovation, according to the Santa Rosa Press Democrat.

Mike Thompson, a Democrat, teamed up with fellow representative Dave Reichert from Washington to push the bill through. It contains big benefits for sparkling wine producers by reducing their federal excise taxes from $3.40 a gallon to $1.07 a gallon, which is the current rate for still wine.

Sparkling wine makes up a 5.2 percent portion of the wine market in the United States, according to the Wine Institute, but has been taxed at rates that have stood since the end of Prohibition, the Press Democrat noted.

Other measures included in the bill: An increase in carbonation levels for still wines, which would invite greater experimentation with effervescence, as well as an increase in the alcohol-by-volume level from 14 percent to 16 percent. It also proposes an adjustable tax credit for smaller wine producers, allowing such producers to grow without fear of cutoff, as the Lake County News reported.

Recently, French wine makers have set their sights on California as certain wines like Cabernet Sauvignon are growing in popularity in the region. However weather conditions and wildfires in the past year have posed challenges to the wine industry across the state.

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