Schumer said his bill, the CIDER Act (Cider, Investment & Development through Excise Tax Reduction), would update the definition of hard apple and pear cider in the Internal Revenue Code (IRC) by increasing the allowed alcohol content from 7 percent to 8.5 percent. He said that change would allow more hard cider products to be labeled and taxed as hard cider, rather than wine, which has a higher excise tax.
Schumer said alcohol content fluctuates depending on how much sugar is naturally in the apples, making it difficult for hard cider producers to comply with the 7 percent cap.
Schumer said the federal definition of hard cider under the IRC is "restrictive" to current producers as well as growers that would like to start producing hard cider. He said his bill would also address existing tax issues related to carbonation levels in hard cider — if a cider has a high level of carbonation it can be taxed at a higher level as champagne. Schumer said his bill would also put the definition of hard cider in line with the European Union’s definition, so U.S. producers can better compete in European markets.
Currently, if a hard cider has less than 7 percent alcohol content, it is taxed the same as beer, roughly 23 cents per gallon or 17 cents per gallon for smaller producers. But the hard ciders with alcohol content higher than 7 percent are taxed as much as $1.07 per gallon and $3.30 per gallon if it contains as much carbonation as champagne.
Schumer said his bill's changes would help the growing hard cider industry and boost American jobs and manufacturing.