Tucked into the Tax Bill is a Short-Term cut for Distillers

On Friday, December 22, 2017 President Trump signed the $1.5 trillion tax bill also know as "H.R.1 - An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018." Tucked into this massive tax bill was an amendment that reduced the federal excise tax (FET) on distilled spirits but, only for 2018 and 2019. Sometime around December 14th the Senate added an amendment to the tax bill that proposed changing this single FET to a graduated tax.  Before 2018, when a distillery sold distilled spirits to a distributor or a state liquor agency, the distillery paid the US Treasury an excise tax of $13.50 for every proof gallon (a PG is one gallon of spirit at 50% ABV). 

However, starting January 1, 2018 the FET for distilled spirits is now broken down into 3 brackets.

Federal Excise Tax for Distilled Spirits. Graph created by EZdrinking. Not to scale.

Bracket 1: $2.70/PG for the first 100,000 PG; Bracket 2: $13.34/PG up to 22,130,000 PG sold; Bracket 3: $13.50/PG for anything above that. This graduated tax was most recently proposed in the "Craft Beverage Modernization and Tax Reform Act of 2017" as a means to provide small distillers with a tax break and bring the FET for distilled spirits in line with the discounts that small breweries and small wineries receive. But for some reason, when the Senate added the FET reform to the tax bill, it stipulated that the tax reduction would only last though 2019. Though, according to Mark Shilling, a distilling consultant and current president of the American Craft Spirits Association, it is likely to be reauthorized at the end of 2019. At the end of each year Congress reauthorizes a number of tax laws that are set to expire such as the cover-over subsidy which benefits rum distillers in Puerto Rico and the US Virgin Islands. That being said, Shilling stated that distillers will need to reach out to their representatives in Fall 2019 to stress the importance of reauthorizing the new FET structure. 

The other interesting question about the FETs for distilled spirits is what its economic impact will be. We will not know for certain until next year at the earliest however, we can make an estimate. According to TTB in 2016, all Distilled Spirits Producers (DSPs) generated about $4.185 billion in revenue for the US Treasury. If we apply the new FET system to the TTBs data of average taxable removals in proof gallons,  the Treasury would have received $4.088 billion, a difference of $97 million or 2.34%. This is minuscule in relation to the overall Federal budget.

About half of the savings will go to DSPs selling less than 100k PG which will have a significant impact on the large number of small distilleries around the country. With these savings, most small distillers have already indicated that they plan to invest the money in new equipment, and or more employees which will have ripple effects locally and nationally from new sources of income tax, payroll tax, and sales tax just to name a few.

EZdrinking Top 10 Whiskies of 2017

Happy New Year! 2017 was a banner year for me. I was commissioned to write a book about bourbon called The Bourbon Bible which will be published in May 2018, and because of the book and my other spirit reviews, I tasted well over 120 whiskies in 2017. With all of these under my belt I felt like a top 10 list was in order. Now not all of these were newly released in 2017 but for many, it was my first time drinking them.

10. J&B Rare Blended Scotch Whisky

J&B Rare Blended Scotch Whisky is a great value blend that is a little too sharp to drink neat but works great on the rocks, or in a highball. Check this out of you are looking for a good blended Scotch with a bit more smoke and malt character then Johnnie Walker Red Label.

9. George Dickel Classic No.8 Sour Mash Tennessee Whiskey

George Dickel Classic No.8 Sour Mash Tennessee Whiskey has nice notes of apple cider and pear with a light aroma of caramel and oak lingering in the background. The finish is soft sweet and lingers with long notes of caramel, cinnamon, oak and pear. This is a very nice light flavor Whiskey that is slightly sweet and fruity. Excellent neat and works great in a tall refreshing cocktails.

8. Wyoming Whiskey Small Batch Bourbon Whiskey

Wyoming Whiskey Small Batch Bourbon Whiskey has rich notes of caramel, oak, and cinnamon followed by flavors of plums, and peaches. After swallowing, the whiskey is sightly warm in the mouth with a lingering note of stone fruit and vanilla. This is a very fine example of a craft bourbon that should be drunk neat or used in a cocktail.

7. Nelson's First 108 Tennessee Whiskey

Nelson's First 108 Tennessee Whiskey is a special release from the first 108, 30-gallon barrels of their self-distilled and aged spirit. The whiskey is incredibly complex with notes of caramel, vanilla, raisin, prunes, nutmeg, cocoa, tobacco, and rich black earth. This is a complex and interesting Tennessee Whisky that shows incredibly promise for the whiskeys that are likely to come from Nelson's Green Brier.

6. Waitsburg Cask Strength Bourbon Whiskey

Waitsburg Cask Strength Bourbon Whiskey is an aromatic and flavorful bourbon with notes of cinnamon, nutmeg, creme brulee, and rum raisin followed by a touch of oak for balance. Overall this is a big sweet bourbon that is completely drinkable at 58% ABV and definitely a whiskey for those who like sweeter bourbons.

5. Joseph Magnus Straight Bourbon Whiskey

Joseph Magnus Straight Bourbon Whiskey envelops you with deep and complex notes of fruit cake, dried fruit, baking spice, candied orange peel, dark cherries and raisin balanced by tobacco, leather and oak. This is a really fantastic and well balanced bourbon.

4. Johnnie Walker Wine Cask

Johnnie Walker Wine Cask is a really fruity and approachable expression of Johnnie Walker and is a really nice addition to the traditional lineup. This whisky also demonstrates how much character can come through the cask selection. For less than $30 this is a deal.

3. Garrison Brothers Single Barrel Texas Straight Bourbon Whiskey

Garrison Brothers Single Barrel Texas Straight Bourbon Whiskey has rich notes with dark aromas of vanilla, dried fruit, and tobacco, balanced with nice wood notes of cedar and oak accompanies by hints of smoke and dark chocolate. This is an excellent bourbon especially at only 3 years old. It is rich in flavor, incredibly smooth at 94 proof and well worth the investment if you are looking to splurge a little.

2.Elijah Craig Single Barrel Kentucky Straight Bourbon Whiskey Aged 23 Years

Elijah Craig Single Barrel Kentucky Straight Bourbon Whiskey Aged 23 Years is incredibly rich and concentrated with notes of dried fruit, rum raisin, cherries, plum, baking spice, vanilla and caramel, followed by a light bright note of alcohol. This is a rich and decadent bourbon that is both very sweet and well balanced with dryness from the oak. Definitely drink this neat and savory the rich complexity that comes from 23 years of developing and concentrating flavor in a an oak barrel.

1. Kings County Bottled in Bond Straight Bourbon Whiskey

Kings County Bottled in Bond Straight Bourbon Whiskey is rich and decadent with notes of fig, dried fruit, caramel, vanilla and baking spice. the whiskey very smooth with a medium body and slightly sweet on the palate. The finish is long and dry though there is a sense of sweetness from the lingering flavor of vanilla that is intermixed with oak and tobacco. This is a very complex bourbon that is packed full of flavor. Kings County had come into their own and are no longer dominated by small barrel flavors. Drink neat to experience all it's flavor and intensity, or add a little water to soften the alcohol slightly.

Review: Johnnie Walker Wine Cask Blended Scotch

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Bottle purchased by EZdrinking.

Owned by Diageo, Johnnie Walker Blender's Batch Wine Cask Blend Blended Scotch Whisky was distilled and matured in Scotland and bottled at 40% ABV.

AT A GLANCE

• Brand Owner: Diageo

• Distillery Unknown Scottish Distilleries

• Still Type: Column & Pot Stills

• Spirit Type: Blend of Scottish Grain and Malt Whiskies

• Age Statement: NAS

• Strength: 40% ABV

• Price: $30

For over 100 years Johnnie Walker has been making renowned Blended Scotch Whisky. For much of that time Johnnie Walker was represented by its Red and Black label expressions and in more recent years Johnnie Walker expanded their color series to include Double Black, Green, Gold, Platinum, and Blue Labels. Most of these blends played with ratios of grain and malt, more peat or less peat, and the maturity of the whisky.  While each color had a distinct flavor profile they are all basically in the same wheelhouse.

However, around 2007, Johnnie Walker's Master Blender Jim Beveridge began an experiment, maturing some of their whisky in barrels that previously held other wines and spirits. Blender Aimée Gibson, came upon some of these barrels and created a unique blend of Scottish grain and malt whiskies, some of which included whiskies aged in wine barrels. The Blender's Batch Wine Cask Blend is the sixth experiment in this series, and it was first released in September 2017.

Tasting Notes

Nose: The nose is very pleasant and inviting with notes of vanilla and marmalade with a touch of nectarines and sweet cherries.

Palate: On the palate there is an explosion of fruit with notes of sweet orange, nectarines, plum, and a hint of vanilla balance out with oak tannins.

Finish: The finish medium dry and while initially it is very warm, the warmth quickly fades and leaves the lasting notes of sweet white nectarines, with a touch of oak, vanilla, and a flavor reminiscent of a fruity Riesling. 

Conclusion: This is a really fruity and approachable Johnnie Walker that mellows out nicely with a little ice to cut the heat from the alcohol. Overall, it is a very nice addition to the traditional Johnnie Walker lineup and it demonstrates how much character can come through the cask selection. For less than $30 this is a deal and one of the best new, and affordable whiskies of 2017.

Review: Paul John Batch 2 Indian Single Malt Whisky

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Free sample bottle provided by Atom Brands.

At a Glance

• Owned and Distilled by: John Distilleries in Goa, India

• Still Type: Pot Stills

• Spirit Type: Indian Single Malt Whisky

• Age Statement: NAS

• Strength: 54.7% ABV

• Price: $108.12 for 500ml

Paul John Batch 2 Indian Single Malt Whisky was distilled by John Distilleries in Goa, India, aged for 6 Years and bottled by That Boutique-y Whisky Company at 54.7% ABV

Price: $108.12 for 500ml

John Distilleries has been blending whisky since 1992, but in 2008 the company began producing single malt whisky. Their whisky is made with two Indian copper pot stills with a capacity of 3000 liters per day, and the whisky comes out around 63.5% ABV. Once distilled, their whisky is aged in American white oak barrels and once they reach maturity the barrels are vatted and the whisky is bottled without chill filtration. Because of the climate of Goa, the whisky barrels lose quite a to the Angel's Share and for Batch 2, That Boutique-y Whisky Company selected a barrel that came in at 54.7% ABV after 6 years.

Tasting Notes

Nose: The whisky has a strong alcohol nose that carries aromas of malt, oxidized wine, baked apples and caramel. 

Palate: The palate is smooth, round and slightly smokey. The initial taste is subtly sweet with notes of dried or candied fruit and roasted nuts. 

Finish: The finish is medium long, hot, and tastes of malt, nuts and the faintest hint of curry. 

Conclusion: Paul John is an interesting whisky that served neat is obscured by the high proof. With a little water the whisky opens up nicely and shows more of its sweetness and smoke without the burn of the alcohol. With a touch of water, the finish is also much smother and has a nutty flavor, more reminiscent of a classic single malt. While Paul John is definitely a well made spirit, for its age, I'm not sure that I would spend over $100 for this whisky. Though, if you are interested in tasting what is probably some of the best single malt whisky coming out of India, Paul John should be on your short list.

Thank you to Master of Malt and That Boutique-y Whisky Company for providing the free sample.

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Review: Oloroso Gran Barquero

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Bottle purchased by EZdrinking.

Oloroso Gran Barquero is fermented and aged, by Pérez Barquero S.A. in Montilla, Spain and bottled at 19% ABV.

Price: $30

Earlier this Spring Wayne Curtis wrote an article on the effect of sherry on the flavor profile of Scotch Whisky and the somewhat symbiotic relationship they have had for the past 100 years or so. After reading his piece I realized that while I have had sherry in the past, I did not know the flavor profiles well enough to pick out their contribution to the flavor profile of Scotch or any other spirit. I decided to reach out to David Driscol of K&L Wines to ask him for recommendations for an Oloroso and Pedro Ximénez style Sherries since these are two of the more common sherry finishes you find in whiskey. One of his recommendations was for Oloroso Gran Barquero from Pérez Barquero.

Pérez Barquero has been making fortified wines in the Montilla-Moriles region of Spain since 1905. While their oloroso is very similar to an oloroso sherry, it cannot be called sherry because it was not made in the Denominación de Origen region of Jerez-Xérès-Sherry. This fortified wine starts off with 100% Pedro Ximénez grapes and once the wine has fermented Pérez Barquero uses an solera aging system with three layers of criaderas or nurseries and the final solera.

Quickly, the solera uses a system of fractional blending where barrels of younger wine are stacked on top of barrels with older wine. When the wine in the bottom barrels is fully mature Pérez Barquero will remove a fraction of the wine from the solea for bottling. They then top up the solera barrels with wine from the criadera level above. This process is repeated at each level where younger wine is mixed with slightly older wine and left to mature. Now Pérez Barquero says that through this system the oloroso is allowed to age for 15 years before bottling but it is not clear if that 15 years is  the time it takes for new wine to move through the system before bottling or if it is some average age of young wine mixed with "old" wine in the solera. 

Tasting Notes

Noes:  The aromas is amazing. It smells of dried fruit, baking spices and vanilla. The nose is similar to fruit cake or a rum raisins cake.

Palate:  On the palate the oloroso is bright, semi-dry and has a medium body. The flavors are completely different from the aromas; the oloroso tastes nutty like a mix of walnuts, and hazelnuts. There is also a fresh fruit quality to the flavors that remind me of sweet grapefruit and white grape juice.

Finish : The finish is medium long and has a very nutty and slightly doughy character almost like marzipan with the faintest hint raisins and baking spices at the end.

Conclusion:  This oloroso is fascinating. The nose and the palate are complex and so drastically different that it makes the drinking experience a little confusing. For this reason I don't know that Oloroso Great Barquero will become a regular staple in my home but it had peaked my interest to try a few other sherries in this style.