Tax Relief Critical for Wine and Spirits Distributors, Says WSWA

WSWA Letter Highlights Importance of Tax Deduction for Job Creation and Community Investment

2025-01-16

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WSWA President and CEO Francis Creighton
WSWA President and CEO Francis Creighton

The Wine & Spirits Wholesalers of America (WSWA) has formally urged Congress to extend Section 199A of the 2017 Tax Cuts and Jobs Act (TCJA), emphasizing its critical role in the survival and growth of thousands of family-owned businesses. This request was outlined in a letter addressed to Jason Smith, Chairman of the House Ways and Means Committee, and Richard Neal, its Ranking Member. The provisions of Section 199A are set to expire in 2025 if not renewed.

According to WSWA, Section 199A, which allows a tax deduction on qualified business income, has been pivotal in driving job creation, community investment, and economic growth. Since its inception, nearly 4,200 facilities and over 97,800 employees have benefited directly from the tax savings, enabling these businesses to remain competitive against large publicly traded corporations that operate under lower tax rates.

Francis Creighton, WSWA President and CEO, noted that this tax provision has helped family-owned businesses navigate challenges stemming from the pandemic and inflation. In the letter, Creighton emphasized that without this measure, many businesses would face difficult decisions regarding their workforce, infrastructure, and long-term operations.

Family-owned wine and spirits distributors, often spanning multiple generations, face significant competitive pressures from other distributors and public corporations with greater resources. Without the extension of Section 199A, these businesses would bear a considerably higher tax burden, with rates nearly double those of multinational corporations.

Dina Opici, President of Opici Family Distributing and WSWA Chairwoman, stated that the deduction has been essential for investments in fleets, facilities, and local communities. She highlighted how, since 2017, the policy has enabled family-owned companies to remain viable and contribute to economic development in the areas they serve.

Research by John Dunham and Associates estimates that Section 199A has generated annual investments between $44 million and $54 million, totaling $304 million to $380 million since its implementation. These figures illustrate how distributors have utilized the savings to modernize infrastructure and support local initiatives. For example, Great Lakes Wine & Spirits, based in Michigan, has invested in new facilities while contributing to public services such as police and fire departments.

In 2024, WSWA increased its lobbying efforts, hosting roundtables and facility tours to demonstrate the tangible impact of Section 199A. In October, business leaders in Texas met with Congresswoman Beth Van Duyne in Grand Prairie to discuss the importance of preserving these tax policies. During a recent hearing, Van Duyne stressed the need to prevent what she described as "the largest tax increase in American history," adding that renewing these provisions is vital for working families and small businesses.

WSWA continues to press Congress for swift action to ensure that family businesses can keep investing in their communities and employees. The organization argues that extending Section 199A is essential for economic sustainability and fairness in the tax system.

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