Michigan farmers, distillers in high spirits over proposed House Bill

LANSING, Mich. (WILX) - Alcohol distilleries in Michigan are taxed 65% when they sell their product to a store, but that could be changing.

Under House Bill 4842, that tax would be cut in half to 32.5% for distilleries that use Michigan crops to produce their spirits.

“This now puts them on somewhat of a level playing field where they can reduce their price or even keep it at the same price, but have a better profit margin and hopefully put that back into expansion, hiring more people and truly using 100% Michigan agriculture which not all do,” said Scott Ellis. “This would take them to where their purchasing all Michigan agriculture, so it’s a really big win also for the farmers.”

Ellis, the owner of Michigrain Distillery, isn’t the only one who believes the law will benefit farmers statewide.

Distilleries use large manufacturers because it is currently the cheaper option. Ellis believes the bill will encourage owners to turn to local farmers and, at the same time, put more money in their pockets.

Grand Traverse Distillery owner Kent Rabish agrees.

“If you want to help Michigan Agriculture, this will go a long way to offer a real financial incentive,” Rabish said.

If House Bill 4842 passes and becomes law, Michigan breweries hope it will keep their drinks on the shelves.

The bill is currently before the House of Representatives for a final vote and would take effect immediately if signed into law by Gov. Gretchen Whitmer.

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