Federal Government Backs Off Plan To Tax Distilleries That Pivoted To Hand Sanitizer For Pandemic

CHICAGO (CBS) -- The federal government is backing off a plan to charge distilleries thousands of dollars – all because they made hand sanitizer during the coronavirus pandemic.

Two Chicago area businesses were told they would have to pay more than $14,000 – KOVAL Distillery in the Ravenswood neighborhood, and 28 Mile Vodka in north suburban Highwood.

Both started making sanitizer instead of spirits back in March.

On Thursday night, the U.S. Department of Health and Human Services held a meeting and decided to ditch the tax.

"2020 has been hard enough for businesses already. I'm in a town of all small businesses that are family-owned, and they're living day-to-day, literally," said Eric Falberg of 28 Mile Vodka, "and for something like that where you're just treated like a huge corporation like Purell- we're not them. we're a small craft distillery."

HHS Chief of Staff Brian Harrison also released a statement Thursday night in response to the reversal, saying, "Small businesses who stepped up to fight COVID-19 should be applauded by their government, not taxed for doing so.I'm pleased to announce we have directed FDA to cease enforcement of these arbitrary, surprise user fees. Happy New Year, distilleries, and cheers to you for helping keep us safe!"

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