06/05/2026
FET, or Federal Excise Tax can be one of the most costly line items in spirits.
The current federal distilled spirits excise tax structure is:
• First 100,000 proof gallons: $2.70 per proof gallon
• Over 100,000 up to 22.23 million proof gallons: $13.34 per proof gallon
• Over 22.23 million proof gallons: $13.50 per proof gallon
These are annual volumes.
So if you are running everything through a large co-packer, there is a good chance you are not accessing that lower tier at all if they are producing any sizable volumes. That jump catches a lot of brands off guard.
LQD Assets and BRBN Storage have structures in place that allow brands to take advantage of a reduced FET rate.
It is a small detail on paper that can make a big difference on your margins.
If you are planning production, it is worth understanding if this is something you can benefit from. Please reach out with any inquiries!