Health officials this week overturned fees that were being imposed on distilleries that made hand sanitizer early last year amid the COVID-19 pandemic.
Two different fees, including a $14,000 one, were included in the COVID 19 relief package that was signed into law in March. That package made distilleries that produced hand sanitizer “over-the-counter drug monograph facilities” and forced them to pay fees.
The fees were due on Feb. 12. The Food and Drug Administration alerted distilleries this week that the fees needed to be paid. In a public notice, the administration noted it was authorized to collect fees by the CARES Act.
However, a Health and Human Services spokesperson said Thursday that the fees are being reversed.
“Small businesses who stepped up to fight COVID-19 should be applauded by their government, not taxed for doing so,” Brian Harrison, chief of staff for the agency, said in a statement.
“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!”
HHS lawyers found that the fees were issued in a manner that has the force and effect of a legislative rule, which only the HHS secretary has the authority to issue.
The Distilled Spirits Council had reacted to the fees with surprise, issuing a press released urging the Food and Drug Administration to waive them for hundreds of distillers who helped by making hand sanitizer amid the pandemic.
“This incredibly frustrating news comes as a complete shock to the more than 800 distilleries across the country that came to the aid of their local communities and first responders. This unexpected fee serves to punish already struggling distilleries who jumped in at a time of need to do the right thing,” said Distilled Spirits Council President and CEO Chris Swonger in a statement.
“Everyone was totally blindsided by FDA’s announcement,” added Phil McDaniel, CEO of St. Augustine Distillery.
In a statement after the rollback of the fees, Swonger said the move “is such a relief to hundreds of distillers.”
“We want to thank HHS leadership for quickly intervening and protecting distillers from these unwarranted fees,” he said. “Distillers were proud to help make hand sanitizer for their communities and first responders during their time of need.”
