Proposed Small Brew Act Seeks to Cut Taxes on Craft Brewers Nationwide

by Hannah Howard on Mar 26, 2015 in Culture
Proposed Small Brew Act Seeks to Cut Taxes on Craft Brewers Nationwide

Change in craft beer taxes are brewing on Capital Hill. Co-sponsored by Sen. Susan Collins, R-ME, and Sen. Ben Cardin, D-MD, the Small BREW Act seeks to cut burdensome taxes on small craft brewers.

With over 3,400 craft breweries in the U.S. and counting, we’re a nation of craft beer brewers and lovers.

The federal tax, first levied on brewers during the 19th century to help finance the Civil War, applies to all brewers, but the craft beer industry is lobbying for a change. 40 percent of what consumers shell out for beer goes straight to federal, state and local taxes, according to the Beer Institute.

Beer makers pay Uncle Sam for each barrel of beer they produce. The little guys—breweries that make less than 2 million barrels of beer annually— pay $7 per barrel in federal taxes on their first 60,000 barrels. After that, they pay $18 per barrel.

The Small BREW Act would halve the existing tax for the first 60,000 barrels—brewers would pay $3.50, not $7. For every barrel past 60,000 and up to 2 million, the tax would be $16. After 2 million barrels, breweries would fork over $18 per barrel to the feds.

The Brewers Association, which represents the craft beer industry, estimates the tax cuts would give back $371.4 million over five years to the nation's small brewers and create 6,000 new jobs over the first 18 months. 

Another bill currently in Congress is the Fair BEER Act. Proponents say it would offer tax relief for all brewers, not just the small ones. It would make all brewers eligible for tax breaks and extend tax cuts to the importers.

Bob Pease, president and CEO of the Brewers Association, says, “We’re making an American product – not many manufacturers in the United States these days can make that claim.” Here’s to hoping Congress shows some love to one of our beloved beverages. 

Photo via Flickr user Vinoth Chandar


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