[Congressional Record Volume 141, Number 118 (Thursday, July 20, 1995)]
[Extensions of Remarks]
[Page E1477]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                FAIR TAX TREATMENT FOR HARD APPLE CIDER

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                          HON. RICHARD E. NEAL

                            of massachusetts

                    in the house of representatives

                         Thursday, July 20, 1995
  Mr. NEAL. Mr. Speaker, today Congressmen English, Houghton, and I are 
introducing legislation that will provide fair tax treatment for hard 
apple cider. The purpose of this legislation is to clarify the tax 
treatment of draft cider.
  Under current law, draft apple cider is taxed at a much higher rate 
than beer despite the fact the two beverages have a similar alcohol 
level. Hard apple cider is taxed as wine and is subject to a tax of 
$1.07 per wine gallon. Whereas, beer is subject to a tax of 22.6 cents 
per gallon.
  Hard apple cider has an alcohol level below 7 percent and this is 
much lower than the alcohol level of beer. Also, beer and hard apple 
cider are packaged and marketed in a similar fashion. Hard apple cider 
is becoming a popular alternative to beer.
  This legislation will tax apple cider at the same rate as beer. The 
Joint Committee on Taxation has estimated this legislation would cost 
$5 million over 5 years. This small tax change would allow hard apple 
cider producers to compete fairly with beer. The current tax prohibits 
many apple growers from producing cider. Apple growers and producers in 
our districts would prosper because hard apple cider is made from 
culled apples, the least marketable apples.
  Senator Leahy is introducing companion legislation. I urge you to 
cosponsor this legislation which will provide equity to the draft cider 
industry.


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