Rock Town Expects More Cash on the Barrelhead, Thanks to Tax Bill

Rock Town Expects More Cash on the Barrelhead, Thanks to Tax Bill
Rock Town Distillery is headed to 1201 Main St. in the SoMa neighborhood.  (Mark Friedman)

Phil Brandon, founder of Rock Town Distillery, is excited about his new building in downtown Little Rock, but he’s even more excited about a little-noticed provision of the tax cut bill that Congress recently passed.

First, the building. Brandon, who opened Rock Town in 2010 in a leased 15,622-SF building at 1216 E. Sixth St. in east Little Rock, is relocating to a 25,250-SF building at 1201 Main St. Brandon is paying $2 million for the former home of USA Images.

The new building is across the street from Community Bakery in the SoMa neighborhood, and Brandon is expecting to have Rock Town, which conducts regular tours of its facility, up and running in the new location by the end of March or sometime in April.

“The SoMa area is a great area,” he said. “There’s a lot more foot traffic, a lot more restaurants close by and that sort of thing. I think people there will be able to discover us, where where we are now, you had to know you were coming here to get here. I’m excited about that. I think the foot traffic aspect is going to be great for us.”

Although the new building is considerably larger, Brandon has no immediate plans to add production capability, but that’s a possibility “down the road.”

In 2017, Rock Town produced about 25,000 9-liter cases of spirits, Brandon said. That’s a big jump from the 10,000 cases the distillery produced in 2015, previously the most recent production figures available to your Whispers staff.

Brandon promises a grand opening event once Rock Town gets situated in its new digs.

As for the big tax cut measure, formally the Tax Cuts & Jobs Act, it lowers the federal excise tax on alcoholic beverages. Brandon calls it a “game changer” for distilleries.

The act incorporated the Craft Beverage Modernization & Tax Reform Act and cut tax rates for small brewers of beer from $7 to $3.50 per barrel for the first 60,000 barrels through 2019. It also expanded tax credits previously limited to small wineries. And as for spirits, it dropped tax rates from $13.50 to $2.70 per gallon for the first 100,000 gallons produced or imported.

“That’s going to be a big deal for distilleries throughout the country for sure and it’s a big deal for me,” Brandon said. Rock Town’s 2017 production of 25,000 9-liter cases translates to about 60,000 gallons.

The industry had been working on passing the Craft Beverage Modernization & Tax Reform Act as a standalone bill for several years, and “we were fortunate enough to get it in this big overhaul package this time,” he said. The bill “makes it more feasible for small distilleries to exist.”