ASHEVILLE – Josie Mielke had a good feeling about her business plan for Urban Orchard Cider Company when the family-owned operation opened not quite a year ago.
…But with an entire family depending on Urban Orchard’s success — Mielke and her husband, parents and two brothers — she hoped growth would come quickly.
“We definitely thought it had the potential to, which is one of the reasons we wanted to get into this business,” she said.
For Mielke and a growing number of other cider makers in Western North Carolina, the sticking point hasn’t been demand. The challenge has come in getting their operations regulated in a way that takes into account how alcoholic cider differs from wine.
Cider makers like Mielke are aligning in support of a bill by U.S. Sen. Charles Schumer called the Cider, Investment & Development through Excise Tax Reduction — or CIDER — Act.
The New York Democrat’s legislation would change the definition of hard apple and pear cider in the federal tax code, increasing the allowed alcohol by volume, lifting carbonation levels and sweeping aside its expensive tax structure.
Cider is now taxed like wine if its alcohol by volume is higher than 7 percent, and taxed like champagne if highly carbonated.
“Cider, to me is in a precarious situation right now, because of its classification,” Mielke said…
…Challenges once faced by beer makers
Asheville’s beer breweries had a similar movement called Pop the Cap. The state’s breweries banded together to demolish a Prohibition-era North Carolina law capping the alcohol content of beer at 6 percent.
The eventual removal of the law in 2005 allowed for greater variety in North Carolina beer, and helped pave the way for Asheville’s now well-known brewery scene.
Then, there were only four breweries in Asheville. Today, there are 17 in Buncombe County with at least five on the way.
Sean Lilly Wilson, founder of Fullsteam Brewery in Durham, was the president and co-founder of the movement.
Pop the Cap didn’t have any direct bearing on Fullsteam, which opened in 2010. But Wilson thinks the movement helped define North Carolina as a state with a thriving brewery industry.
“We wouldn’t have a beer culture if we didn’t have a lot of elements in place to make this a great beer state, and (Pop the Cap) was a big one,” he said.
But taxes are arguably a bigger concern for cider makers than the variety in their product line. Hard cider with a 7 percent or higher ABV is taxed like wine. And more-carbonated cider, like what Urban Orchard sells, is subject to the champagne tax of $3.40 per gallon.
As a point of comparison, beer brewers pay less than 60 cents per gallon in excise tax.
Article Link: Citizen-Times