It’s November, which means we’re officially knee-deep in flannel shirts, changing leaves, pumpkin spice lattes and another favorite seasonal beverage: hard cider. Cider’s solid marketing, fun packaging and fall goodness all contribute to its popularity around this time of year. But hard cider isn’t fruity, fizzy deliciousness to everyone. One local government is finding this autumnal beverage downright confusing: the state of Massachusetts. And it all comes down to taxes.
You might be surprised to learn that every state in the United States sets its own rate for taxing alcohol, and while those rates vary based on a whole host of factors, beverages with more alcohol — such as spirits and wine — are taxed higher than beverages with less, like beer. In Massachusetts, beer is taxed at 11 cents a gallon, while wine is taxed at 55 cents a gallon. Champagne and sparkling wine are in a category all their own and are taxed at a whopping 70 cents a gallon.
So here’s where it gets tricky. How to classify cider for taxation purposes? Is it more of a beer or more of a wine? While most consumers of craft beer consider cider to be like beer, Massachusetts disagrees, reports Craft Brewery Legal Blog. In fact, according to the Massachusetts State Legislature, “wine gallons” of cider between 3 percent and 6 percent alcohol content are to be taxed at three cents per gallon — less than beer — while ciders containing more than 6 percent alcohol are taxed like sparkling wine — at fully 70 cents a gallon. In other words, if you’re a cider maker deciding how much alcohol to put in your cider, those two extra percentage points could cost you astronomically more in taxes, which would invariably influence the price point, too.
It’s a problem that’s already been addressed at the national level. Last year, Congress lowered federal excise taxes on cider products, the Eagle-Tribune reports. The changes go into effect on Dec. 31, after which most ciders will be taxed like beer, at 22 cents a gallon.
Back in Massachusetts, a bill is being proposed to change the taxation rate, allowing ciders with up to 8.5 percent alcohol to be taxed at three cents per gallon. If passed, it would allow Massachusetts-based cider makers to compete with their national competitors, to say nothing of helping consumers enjoy those cool, fall afternoons with a tall glass of deliciousness. But according to the Worcester Telegram, the state Department of Revenue believes that changing the tax rate for hard apple cider would result in an annual loss of $277,000 in tax revenue. In other words, a lot of people are enjoying themselves some hard cider. Seems a shame to charge them for it. For now however, the moral of the current Massachusetts cider situation is mo’ alcohol, mo’ problems. Or taxes, at least.
