SPIRIT Act
- Bill Number
- H.R. 9407
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Taxation
- Status
- Introduced
- Latest Action
- 2026-06-23: Referred to the House Committee on Ways and Means.
- Last Updated
- 2026-07-07T17:12:09Z
AI-Generated Summary
Purpose This legislation amends the Internal Revenue Code of 1986 to create a tax reduction for certain small producers of distilled spirits. Its stated goal is to support domestic agriculture by offering a financial incentive to small distillers that source most of their ingredients from U.S.-harvested materials.
Key Provisions
- Establishes a new tax credit under section 5012 that reduces the federal excise tax on distilled spirits by $2.35 per proof gallon for qualifying producers.
- Defines an “eligible distiller” as a taxpayer that:
- Produced no more than 100,000 proof gallons in the current and prior taxable year, and
- Derived at least 90 percent of its production from domestically harvested materials.
- Treats all members of a controlled group (under section 52 rules) as a single taxpayer for eligibility purposes.
- Allows taxpayers to certify eligibility during a taxable year.
- Imposes a recapture tax if a taxpayer later fails to meet the eligibility requirements for a year in which the reduction was claimed.
- Applies only to spirits produced after December 31, 2025.
Significant Changes to Existing Law The bill adds a new section 5012 to Subpart A of Part I of Subchapter A of Chapter 1 of the Internal Revenue Code, creating a targeted reduction in the distilled spirits tax rate (currently imposed under section 5001) that is available only to small, domestically sourcing producers. No prior similar credit existed in the Code for this purpose.
Potential Impacts
- Government agencies: The Internal Revenue Service would administer the credit, including verification of production volumes and sourcing percentages, and collection of any recapture taxes.
- Citizens and businesses: Small distillers meeting the criteria could receive a per-gallon tax reduction; larger or import-reliant producers would not qualify. Domestic agricultural suppliers of grains and other materials could see increased demand.
- International relations: No direct effects on trade agreements or foreign producers are specified in the bill.
Main Stakeholders Affected
- Small U.S. distillers producing 100,000 proof gallons or fewer annually.
- U.S. farmers and suppliers of domestically harvested ingredients.
- The Internal Revenue Service.
- Larger distillers and importers that do not meet the size or sourcing thresholds.
Notable Legal, Constitutional, or Political Implications The measure is a tax expenditure enacted through the Internal Revenue Code and does not alter regulatory authority outside the tax code. It introduces a domestic-content requirement tied to a tax benefit, which is a common feature of U.S. tax policy but could raise questions about compliance and administration if challenged. No constitutional issues are addressed in the legislation itself.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (1)
Recent Actions
- 2026-06-23: Referred to the House Committee on Ways and Means.
- 2026-06-23: Introduced in House
- 2026-06-23: Introduced in House
Bill Versions
- Supporting Producers through Incentives from Rural Ingredients and Tax Relief Act — issued 2026-06-23 — PDF (3 pages)