In short: The SPIRIT Act (H.R. 9407) is a bipartisan proposal, introduced in June 2026, that would give craft distillers producing up to 100,000 proof gallons per year a federal excise tax credit of 2 dollars 35 cents per proof gallon when at least 90 percent of their agricultural inputs are grown in the United States. Stacked on the permanent CBMA first-tier rate of 2 dollars 70 cents, a qualifying distiller's effective federal excise on those proof gallons would fall to roughly 35 cents. It is not law yet, and this article is general information, not tax or legal advice.
Where craft distiller excise rates stand today
The Craft Beverage Modernization Act structure is now permanent law. Every distilled spirits plant pays federal excise tax on removals in three tiers per calendar year: 2 dollars 70 cents per proof gallon on the first 100,000 proof gallons, 13 dollars 34 cents on the next 22.13 million, and 13 dollars 50 cents above that. The tiers are cumulative across the calendar year, which is why a distillery's proof gallon ledger, not its intentions, decides what rate applies to any given removal.
What the SPIRIT Act would change
The Supporting Producers Through Incentives from Rural Ingredients and Tax Relief Act, introduced by Representative Jeff Hurd of Colorado with Representative Jill Tokuda of Hawaii, adds a targeted credit rather than a new rate: 2 dollars 35 cents per proof gallon for eligible producers up to the 100,000 proof gallon mark, conditioned on at least 90 percent of agricultural inputs being sourced domestically. The policy intent is straightforward, rewarding small distillers who buy American grain and agricultural products.
For a distillery that qualifies, the arithmetic is dramatic. The first-tier CBMA rate of 2 dollars 70 cents minus the proposed credit of 2 dollars 35 cents leaves roughly 35 cents per proof gallon of federal excise on qualifying removals. On 10,000 proof gallons a year, that is a difference of 23,500 dollars.
The two records that decide eligibility
If the SPIRIT Act passes in anything like its current form, qualifying will come down to proving two things continuously:
Cumulative proof gallons for the calendar year. The 100,000 proof gallon ceiling is measured the same way CBMA tiers already are, cumulatively across the year. A distillery needs its removals tracked in proof gallons, in order, with the running total visible at any moment, because the rate that applies to a removal depends on everything removed before it.
Ingredient provenance. A 90 percent domestic input test is an audit question about your grain and agricultural purchases: which farm, which supplier, which country of origin, in what proportions. Distilleries that already record grain receipts down to the farm and harvest year will be able to demonstrate eligibility from records they keep anyway. Distilleries reconstructing provenance from invoices at filing time will find the credit expensive to claim.
How Spirit Sight handles this today
Spirit Sight tracks every removal in audited proof gallon math with cumulative CBMA tier application across the calendar year, so the reduced rate is applied correctly removal by removal, not estimated at the end. Grain traceability is recorded at receipt, down to supplier, farm, and harvest year where a program needs it, which is exactly the shape of evidence a domestic-input test would require. If the SPIRIT Act becomes law, distilleries running on this kind of system will already have the records; the filing becomes arithmetic instead of archaeology.
This article is general information about proposed legislation and is not tax or legal advice. Track H.R. 9407's status with your trade association and counsel.
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