Don't Mess With Taxes

UPDATE, May 25, 2017: I suspect Hoda and Kathie Lee are toasting this Thursday, too! Enjoy a glass of your favorite vino and these wine tax facts on National Wine Day 2017.

It's Wednesday. Fans of the fourth hour of NBC's Today show with Hoda Kotb and Kathie Lee Gifford also know it as Winesday.

In addition to regular Winesday on their own show, Kathie Lee and Hoda shared their vino love with Anderson Cooper on his program.

And lucky for Hoda and Kathie Lee (and apparently Anderson, too), today also is National Wine Day.

It's no secret that the two morning show hosts are big wine fans. So are federal and state tax collectors.

Uncle Sam's wine taxes: The federal excise tax on table wine is $1.07 per gallon. That works out to $2.54 per case.

Qualifying small wineries are entitled to a credit which reduces their tax payments. The tax also changes based on the type of wine/alcoholic beverage and its alcohol content.

Below are the current wine excise tax rates based on alcohol percentage, straight from the U.S. Alcohol and Tobacco Tax and Trade Bureau:

If ½ of 1% to not over 14% alcohol = $1.07 per gallon

If more than 14% and not over 21% alcohol = $1.57 per gallon

If more than 21% and not over 24% alcohol = $3.15 per gallon

Artificially Carbonated = $3.30 per gallon

Sparkling = $3.40 per gallon

Hard Cider = $.226 per gallon

So who pays this tax? Again per the federal alcohol bureau, the proprietor of the bonded wine premises who removes the wine from bond for domestic consumption or sale is responsible for paying the tax.

But the argument often is made that wine prices are inflated to help cover the excise tax, meaning consumers essentially help pay this producer's tax.

State taxes, too: Then you must add in the state taxes.

In most places, in addition to the general state and local sales taxes applied to wine purchases, and this is where the fermented grape fan definitely pays his or her share of imbibing, most states also collect their own vino excise taxes.

On Jan. 1, 2017, Alaska's $2.50 per gallon became the highest wine tax rate, according to the Federation of Tax Administrators data. That's more than three times the median state wine excise tax rate of 72 cents per gallon.

Florida is a close second with its $2.25 per gallon tax rate.

Not surprisingly, California, home of many of the United States' finest vineyards, has the lowest excise tax rate, only 20 cents per gallon.

Here in Texas, where Lone Star State wines are giving California a run for its wine-producing money, vino aficionados face just a 20.4 cents-per-gallon excise tax.

Looking to revise U.S. wine taxes: Rep. Mike Thompson, a Democrat whose Congressional district encompasses much of California's wine country, including Napa Valley, in April introduced a bill in the last congressional session to a revamp the federal wine excise tax rates.

A key provision of the Wine Excise Tax Modernization Act (H.R. 4934) would benefit sparkling wine producers. The bill would reduce the federal excise tax on that alcoholic beverage from $3.40 a gallon to $1.07 a gallon, making it the same as for still wine.

Thompson, a member of the tax-writing House Ways and Means Committee and co-chair of the Congressional Wine Caucus, says he wants to modernize the federal excise taxes on wine to allow winemakers and grape growers to create new products and keep pace with advances in viticulture. Rep. David Reichert (R-Wash.) is an original cosponsor of the bill.

"The tax code should not be an impediment to growth and innovation,” said Thompson in announcing the bill's introduction. H.R. 4934's changes, he added, would let many of his constituents -- and to be fair, winemakers and vineyard owners across the country -- "keep pace with changing consumer demands in the years ahead."

Other provisions in the Thompson-Reichert bill include:

• An increase in carbonation levels for still wines,
• An adjustable tax credit for smaller wine producers, and
• An increase in the alcohol-by-volume level from 14 percent to 16 percent.

Down to the last legislative drop: No hearing has been scheduled yet on the bill. And since there's not much time left in this 114th Congress, it's chances of passing are slight it didn't pass. Thompson has yet to reintroduce the bill in the 115th Congress, but I'd bet a bottle of my favorite Cabernet that he will.

I suspect the duo, if voters in their districts return them to Capitol Hill to serve in the 115th Congress that convenes next year, will reintroduce the measure early in that session. That will give it more time for consideration and possible enactment.

In the meantime, if you support Thompson's and Reichert's efforts to revamp the wine portion of the tax code, today's National Wine Day would be the perfect time to raise a glass to its eventual success.

You also might find these items of interest:

• Toasting candidates with partisan beers
• Hard cider makers toasting new tax law changes
• The tax cost of your New Year's Eve Champagne toast