The Sugar Act took place in colonial America in 1764. The act, passed by British Parliament, reduced the tax on molasses and sugar from sixpence to threepence per gallon. This reduction hurt the rum industry of American merchants, who had evaded British taxes by using cheaper French molasses.
The Sugar Act was also known as the American Revenue Act of 1764. It was proposed by Chancellor of the Exchequer and the First Lord of the Treasury, Lord Grenville. While he reduced the tax rate, he instructed the Royal Navy to become more involved in customs. Once the act was passed, American merchants had fewer markets available with which to trade.