SPIRIT Act

This legislative proposal, titled the "SPIRIT Act," aims to create a new tax incentive within the Internal Revenue Code for small distillers. It introduces a small distiller domestic sourcing credit that reduces the federal excise tax on distilled spirits by $2.35 per proof gallon for qualifying producers. To be considered an eligible distiller , a taxpayer must have produced no more than 100,000 proof gallons in both the current and preceding taxable year. Additionally, at least 90 percent of the proof gallons produced must be derived from domestically harvested materials. This credit is designed to support smaller, domestically-focused distilleries and will apply to spirits produced after December 31, 2025.