Due to tax legislation that Congress passed in December 2015 (amending Section 5041(b)(6) of the Internal Revenue Code), cider —of modest alcoholic strength and bubbles— will soon be taxed at low rates similar to beer. Previously, cider could be taxed at much higher rates, at or exceeding those of wine.
These changes were contained in the CIDER Act, which had been originally introduced in the House of Representatives in 2013 by Representatives Earl Blumenauer and Chris Collins (as the Cider Industry Deserves Equal Regulation Act) as well as in the Senate by Senators Charles Schumer and Patrick Leahy (as the Cider Investment and Development through Excise Tax Reduction Act).
- Any cider with 7 percent alcohol-by-volume (abv) or up had been taxed at $1.17 per gallon, while any cider at 6.9 percent abv or lower had been taxed at $0.22. Now, with the passage of the CIDER Act, the upper abv limit, for the lower tax rate, will be 8.5%.
- Any cider containing 6.4 grams per liter of carbon dioxide or fewer (equivalent to 3.25 volumes of CO2, in other words, like a highly carbonated wheat beer or a lightly carbonated champagne) will now NOT be additionally taxed (which had been a nonsensical situation). Above that carbon dioxide level, however, cider will be taxed at $3.30 per gallon. (The prior limit had been much lower, 3.92 grams of CO2 per liter, equivalent to 2.0 volumes, in other words, like a lightly carbonated cask-conditioned ale.)
- As long as the abv of a pear cider (known as perry), is 8.5% or less, its tax rate will also be decreased, from the wine rate of $1.07 per gallon to the apple cider level of $0.226 per gallon. Above 8.5% abv: $1.17 per gallon. Carbonation will be untaxed, like cider, at or below a level of 6.4 grams CO2 per liter.