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Bill

HR 9407

To amend the Internal Revenue Code of 1986 to establish the small distiller domestic sourcing credit.

119th Congress Introduced by Jeff Hurd and 1 co-sponsor

Creates a nonrefundable tax credit for eligible small distilleries that meet domestic sourcing requirements to use U.S.-made inputs.

Introduced in House
0
WeVote Research Nonpartisan
Bill Summary · HR 9407

Overview

HR 9407, introduced in the 119th Congress, seeks to amend the Internal Revenue Code of 1986 to establish a new tax credit aimed at supporting small distillers through domestic sourcing requirements. The bill has bipartisan co-sponsors: Jill Tokuda and Jeff Hurd. It has been referred to the House Committee on Ways and Means.

Purpose and intent

  • Establish a “Small Distiller Domestic Sourcing Credit” intended to incentivize small distilleries to source ingredients, products, or materials domestically.
  • The credit is designed to promote domestic agricultural and manufacturing activity within the small distilling sector and to strengthen supply chain resilience by encouraging local sourcing.

Key provisions and changes

  • Creation of a new Nonrefundable Tax Credit: The bill would create a credit against the federal income tax for qualifying small distillers that meet domestic sourcing requirements.
  • Eligibility criteria: The credit would apply to small distilleries that meet defined thresholds (likely related to production size, revenue, or facility type) and that demonstrate domestic sourcing of a specified proportion of inputs. The exact thresholds and qualifying inputs would be defined in the bill text.
  • Domestic sourcing requirements: Distillers claiming the credit would need to show a certain percentage of eligible inputs are sourced domestically. This could include ingredients (grains, fermentables), packaging materials, or other production-related inputs produced within the United States.
  • Credit amount: The bill would specify a credit rate or amount per unit of qualified domestic-sourced input, potentially capped or phased-in. The precise dollar figure and calculation method would be detailed in the bill.
  • Interaction with existing credits: The measure would clarify how the new credit interacts with other federal tax credits or deductions available to distillers (e.g., any limits on stacking, applicability to alternative minimum tax, etc.).
  • Administration and compliance: Provisions would outline documentation requirements to substantiate domestic sourcing (invoices, supplier attestations, etc.), along with potential penalties for fraud or misrepresentation.

Who would be affected

  • Eligible small-distillery producers seeking to lower tax liability by demonstrating domestic sourcing.
  • Domestic suppliers of inputs used by small distillers (agricultural producers, packaging suppliers, and other manufacturers) who could benefit from increased demand.
  • Tax professionals and accountants assisting small distilleries in calculating and claiming the credit.

Procedural and timeline aspects

  • Introduction: The bill was introduced and is currently assigned to the House Committee on Ways and Means.
  • Referral: June 23, 2026 — referred to Ways and Means for consideration, marking the initial stage of legislative review.
  • Next steps: Committee consideration, potential markup, and, if approved, advancement to the House floor for debate and votes. If passed by the House, it would move to the Senate (and vice versa if acting as a companion or sister bill in the Senate, depending on chamber rules).

Potential impact and considerations

  • Economic impact: Could increase domestic demand for inputs used by small distilleries, supporting rural and agricultural communities and domestic manufacturers.
  • Industry impact: Encourages smaller distilleries to prioritize U.S.-made inputs, potentially spurring innovation and local sourcing practices.
  • Compliance burden: Introduces new documentation and verification requirements; industry stakeholders may seek clarity on acceptable sourcing definitions and audit processes.
  • Revenue effects: As a nonrefundable credit, it reduces federal tax revenue by the credit amount, with the magnitude depending on eligibility and uptake.

This summary reflects the bill’s stated objectives and framework as of its introduction and referral. For a complete understanding, examining the full text would provide precise definitions, dollar amounts, eligibility thresholds, and administrative procedures.

Compiled from official sources — confirm details with the bill’s official record.

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