Tonawanda News — U.S. Sen. Charles E. Schumer announced Friday he has officially filed his legislation that seeks to boost sales by updating the definition of hard cider to ease the overall tax burden on producers.
The CIDER Act – Cider, Investment & Development through Excise Tax Reduction – will now be referred to the Senate Finance committee for consideration. The bill also has a House of Representatives companion.
Schumer called the legislation a boon for New York’s 20 hard cider producers and 654 apple farms, which produce 29.5 million bushels annually. In Niagara County, there’s only one of those hard cider producers, Black Bird Cider in Barker. But, there are 81 apple farms with 3,317 acres worth of farm land in the county.
“New York is the second largest apple producer in the country and there’s no doubt it should be at the core of the hard cider industry, which is rapidly growing in popularity,” Schumer said. “However, current federal tax rules make it extremely costly for New York producers and consumers alike to produce, market and sell this product, which could prevent New York’s hundreds of apple growers and hard cider producers from fully benefiting from the stable income that comes with this new product.”
The alcohol content of New York’s hard cider fluctuates greatly due to sugar content. Current law often forces some hard cider to be taxed at a higher rate, because the content is similar to items such as wine. Compliance to the law adds a significant financial burden to producers and consumers and an unpredictable nature to the business, which makes it more expensive for cider producers and less attractive for potential new cider producers, Schumer said.
The CIDER Act updates the definition for hard apple and pear cider in the Internal Revenue Code, so that the items would increase their allowed alcohol by volume from 7 percent to 8.5 percent, encompassing significantly more hard cider products and allowing them to be labeled and taxed like hard cider, rather than wine.
Schumer’s legislation would also address existing tax issues related to carbonation levels in hard cider and would put the new definition in line with that of the European Union, so producers can better compete with European products abroad.
According to IBIS World, an analyst of the beverage industry, sales of domestically produced cider have more than tripled to a projected $601 million in 2012, from $178 million in 2007. There has been a distinct spike in consumption of hard cider across the country in recent years, Schumer said, and the demand for specialty apples grown for hard cider production has also been very high, with prices from $20 to $50 per bushel.