Lofted Custom Spirits has introduced an innovative Alternating Proprietorship program that enables craft distillers to significantly reduce production costs through strategic tax optimization. As the leading contract whiskey producer in Kentucky, the company has established a dedicated processing facility where partner brands can operate under their own Distilled Spirits Permit (DSP) license while leveraging Lofted’s infrastructure and expertise. This unique arrangement allows smaller producers to qualify for substantial Craft Beverage Modernization Act (CBMA) tax benefits and potentially save $6 per proof gallon.

Lofted Custom Spirits’ Alternating Proprietorship program specifically addresses a regulatory nuance where only DSPs conducting substantive processing operations — that is, beyond basic bottling — can claim maximum CBMA tax reductions. The initiative reflects Lofted’s broader business philosophy of combining regulatory compliance with operational flexibility for craft distillers.

Image Credit: Lofted Custom Spirits