Sometimes it seems unlikely. Someone has an idea for a new concept that may not have been really a new concept, but simply a new implementation of an old idea. Coffee shops have probably been around for as long as coffee has been grown and sold. But a once small Seattle coffee shop had revenue of $16.45 billion in 2014 from 21,366 stores.
Craft beer is really just an extension of home brewing gone slightly larger. The explosion of that market has been fueled by the interest of local brewers creating a beer that is both different from the mass-market brewers in flavor and volume. Most craft brewers began because they love beer and want to share that enthusiasm with others.
The latest market to see this type of growth is craft distillers, who face many of the challenges that other small businesses face. This market presents particular challenges because of some of the special excise taxes that distilleries face.
Michigan's U.S. Senator Gary Peters is hoping to provide some relief to these small distilleries with his Distillery Excise Tax Reform Act (DETRA). The act would reduce the excise tax to $2.70 per proof gallon, a reduction of $10.80 from its current level on the first 100,000 proof gallons sold.
For one Michigan craft distillery, which estimates they will only produce about 20,000 proof gallons next year, the tax reduction would save $150,000. For a small business starting out, such savings can be tremendously significant and make the difference between ongoing success and Chapter 7.
Because many small businesses begin as a labor of love, the owners often are not accounting or tax specialists. But a love of your business can allow you to forget that there are many tax issues that must be dealt with when you begin your new business.
Assistance from a tax attorney during your startup phase can help prevent inadvertent errors from crippling a young business, such as inadvertent tax debts or being subjected to the rigors of a tax audit.
Source: mibiz.com, "Distillery excise tax reform to benefit small West Michigan distillers," John Wiegand, September 14, 2015