Wineries Aren't Dried Up

November 07, 1990

County wineries have been spared a federal tax increase that some winery owners said could have put them out of business.

"I'm quite pleased with how it came out," said Anthony Aellen, president of Linganore Winecellars in Mount Airy.

The new federal budget does not include an increase in an occupational tax paid by wineries, distillers, brewers, wholesalers and importers, said John Volpe, executive director of the National Wine Coalition in Washington.

Wineries currently pay $500 a year if their gross receipts are less than $500,000. They pay $1,000 if receipts are more than $500,000.

President Bush had proposed raising the tax to $20,000 a year.

Aellen and G. Hamilton Mowbray, owner of Montbray Wine Cellars Limited of Westminster, said the increase could have forced them to close.

Aellen and other winery owners across the state started a grass-roots campaign last summer to try to defeat the increase.

"I don't think the wineries had that much pull. I think it was the support from people writing in" that helped, he said.

Aellen wrote letters to Bush and congressional leaders accompanied by petitions.

Wineries weren't spared all tax increases, however.

Congress approved an increase in the excise tax on wine and beer, but small producers, such as the four wineries in Carroll, will be exempt from the increase, Volpe said.

Wineries currently pay 3 cents per bottle in federal excise taxes.

Congress raised the rate to 22 cents per bottle.

Companies that produce less than 250,000 gallons a year received exceptions to the increase, Volpe said.

Aellen's winery produces about 10,000 gallons a year.

But the exception for small wineries may not stand up to a court challenge, Volpe said. Any advantages given to domestic producers also must be given to foreign producers, he said.

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