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Whitmer Signs Bill Slashing Distilling Tax Rates

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Governor Gretchen Whitmer was in Traverse City Tuesday, not only to stop in on the festivities of the National Cherry Festival but also to bring big time tax relief to craft distilleries.

Northern Michigan has a multitude of industries that keep the economy running. Two of them are alcohol and agriculture. A new bill signed by Governor Whitmer is going to benefit both, as they work together.

“It’s another bipartisan victory that has good stuff for two different industries in Michigan,” said Whitmer.

With a stroke of her pen, Whitmer provided a major tax break for craft distillers.

“It’s really a booming industry so it’s exciting that we are able to make this more affordable for consumers but also help two critical industries,” said Whitmer.

The other industry being agriculture. The catch with the tax break is if the alcohol uses at least 40% Michigan ingredients.

“This is a game changer,” said Rep. Pat Outman, Republican from Six Lakes and the bill’s sponsor, “Prior to working this legislation, I had no idea that each bottle of liquor is taxed at the level it is.”

Before this bill, distillers were taxed 65% by the state. If they use Michigan ingredients, it’s down to 32.5%.

“Back in 2007, $30 today is equivalent $42,” said Kent Rabish, owner of Grand Traverse Distillery, “And we just you can’t keep eating the inflation cost but with this bill, we’re not going to have to price increase.”

That’s quite the incentive, in order to save that money, they have to use a local source.

“Growers are smart. If they realize that there’s more demand for a particular type of wheat or particular type of rye or corn, they’ll grow it,”  said Rabish, “Just get into a contract with them.”

Michigan, especially this region, is becoming a craft alcohol mecca and this law will lean into that.

“We provided similar incentives to the craft brewing industry a number of years ago,” said Outman, “And we saw the industry takeoff afterwards.”

“I think it tells a uniquely Michigan story,” said Whitmer.

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