The 2026 State of Distillery Compliance and Costs
A working reference on the three numbers that quietly run a distillery: federal excise tax under CBMA, the angel's share, and where you can ship direct.
Key findings
- Federal excise tax on distilled spirits is tiered under the Craft Beverage Modernization Act: 2.70 dollars per proof gallon on the first 100,000 proof gallons removed each calendar year, 13.34 dollars up to roughly 22.23 million, and 13.50 dollars above that. The reduced first tier is worth up to 1.08 million dollars a year to a producer at the 100,000 proof gallon threshold.
- The angel's share, the spirit lost to evaporation during aging, runs roughly 2 to 6 percent per year and can total 30 to 40 percent over a long maturation. On a single 53-gallon barrel entered at 125 proof, a mid-range 20 percent five-year loss is about 13.25 proof gallons of saleable spirit gone before bottling.
- Direct-to-consumer shipping of distilled spirits is permitted in only about 13 US jurisdictions as of 2026, versus nearly every state for wine. California opened DTC for 2026 on a one-year pilot under AB-1246.
- These three numbers, the CBMA tier you are in, the loss on every barrel, and the states you can ship to, are the difference between a modeled margin and a real one, yet they typically live in separate spreadsheets.
Federal excise tax under CBMA
The federal excise tax on distilled spirits is charged per proof gallon when spirits are removed from bond. Since the Craft Beverage Modernization Act was made permanent, the rate is tiered by how much a producer removes in a calendar year: a sharply reduced rate on the first tier, a middle rate, and the full rate at high volume.
Because the tiers reset every January and apply cumulatively, your effective rate climbs as the year goes on. A distillery that plans around the standard 13.50 dollar rate, or around only the 2.70 dollar reduced rate, will misstate its tax and its margin. The table below models the tax and the first-tier savings at several annual volumes.
| Annual removals (PG) | Tax at CBMA tiers | Tax at full rate | First-tier savings |
|---|---|---|---|
| 10,000 | $27,000 | $135,000 | $108,000 |
| 25,000 | $67,500 | $337,500 | $270,000 |
| 50,000 | $135,000 | $675,000 | $540,000 |
| 100,000 | $270,000 | $1,350,000 | $1,080,000 |
Modeled from the CBMA statutory tiers (2.70 / 13.34 / 13.50 dollars per proof gallon). Savings is the difference between the full standard rate on every proof gallon and the tiered CBMA rate. Run your own numbers with the excise tax calculator.
The angel's share, as a cost
Every year a barrel ages, some of it evaporates. Public sources put the loss at roughly 2 to 6 percent per year, higher in hot, dry warehouses and on upper floors, totaling around 30 to 40 percent over a long maturation. That lost spirit was made from grain you already paid for and aged at your expense, so it is a real cost, not a rounding error.
The number that matters for pricing is proof gallons lost, because that is what you can no longer sell and what you no longer owe tax on. The worked example below takes a standard 53-gallon barrel entered at 125 proof and applies a mid-range five-year loss.
Loss ranges are from public sources (Distillery Trail; whiskeybarrel.org). The per-barrel figure is modeled at a mid-range 20 percent five-year volume loss on a 53-gallon, 125-proof fill. Model loss for your warehouse.
Where you can ship direct
Direct-to-consumer shipping is the channel most craft producers want and the one most restricted for spirits. While nearly every state allows some wine DTC, only about 13 jurisdictions permit interstate DTC spirits shipping as of 2026, each with its own conditions: producer-size caps, volume limits, licensing, and adult-signature requirements.
California is the headline change, opening DTC for 2026 under the AB-1246 pilot, limited to craft producers and capped per consumer per day, on a one-year term. The lesson for operators is that DTC eligibility is a moving target that has to be checked per destination at the moment of sale.
DTC ruleset mirrors the same sourced data the Spirit Sight platform enforces (Avalara/Sovos DTC spirits guide; Clark Hill on CA AB-1246, 2025-2026). See the full state-by-state DTC map.
Why these three numbers belong together
Each of these is knowable. The problem is that they usually live apart: excise in a tax spreadsheet, loss in a barrel log, DTC rules in someone's memory. When they are disconnected, a distillery prices off a margin that does not survive contact with the actual tax tier, the actual evaporation, and the actual states it can sell into.
The distilleries that price and plan accurately are the ones that keep these numbers in one connected system, where the CBMA tier, the per-barrel loss, and the DTC rule are all current and reconcile to the same inventory.
Sources
- TTB, Craft Beverage Modernization Act
- 26 U.S.C. 5001 (excise tax on distilled spirits), eCFR Title 27
- Distiller Magazine, distillery cost accounting
- Distillery Trail, what is the angel's share
- Sovos ShipCompliant, DTC spirits report
- Distiller Magazine, California legalizes DTC spirits for 2026
Modeled figures are computed from the same formulas the Spirit Sight platform uses and are labeled as modeled. This is general information, not tax or legal advice. Methodology: CBMA tiers per 26 U.S.C. 5001; angel\'s-share ranges from cited public sources applied to a standard barrel; DTC counts from the sourced state ruleset. You may cite or reproduce these figures with attribution to Spirit Sight.
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