Key Resource Items

• H.R. 4278
• H.R. 4278 Economic Study
• Lazy Magnolia Brewing Company Excise Tax Reduction Video (YouTube)
• H.R. 4278 Model Letter from Brewer (MS Word)
• H.R. 4278 Model Letter from Brewery Employee (MS Word)
• S.3339
• S. 3339 Model Letter for Brewery CEO/Owner (MS Word)
• S. 3339 Model Letter for Brewery Employee (MS Word)
• News Coverage

H.R. 4278 - Ask Your Representative to Become a Co-Sponsor
Contact information for your U.S. Representative can be found on the U.S. House of Representatives home page by entering your zip code in the box in the upper left-hand corner. Once you've identified your Representative and have the contact information for the Washington, D.C. office, please call, email and/or fax a request that your Representative become a co-sponsor of H.R. 4278. See the list of current bill co-sponsors.

S. 3339 - Ask Your Senators to Become Co-Sponsors
Contact information for your U.S. Senators can be found on the U.S. Senate home page by utilizing the "Find Your Senators" drop down search function in the upper right-hand corner.  Once you've identified your two Senators and have the contact information for their Washington, D.C. offices, please call, email and/or fax a request that your Senators become co-sponsors of S. 3339.  See the list of current bill co-sponsors.

Outline for Calling and/or Writing

Here’s a brief outline to use when calling or writing an email. Express and add your own passion for beer and small brewers to your conversation:

1. Tell them your name, company name (if employed by a brewery or beer related business) and where you are from.
2. Give them your contact information.
3. Your conversation:
   • Thank you for taking the time to hear my request of Representative/Senator XXX.
   • Representatives Richard Neal and Kevin Brady, both members of the House Ways & Means Committee, introduced H.R. 4278 in December, 2009.  Senators John Kerry and Mike Crapo introduced S. 3339 in May, 2010.
   • This legislation would help create jobs for America’s 1,500+ small breweries.  Small breweries are small businesses that employ nearly 100,000 people in local communities throughout America.
   • The legislation will reduce excise tax for the nation’s small breweries from $7 to $3.50 per barrel for the first 60,000 barrels of beer produced. It will also provide a tax reduction from the current rate of $18 per barrel to a reduced rate of $16 for the first 2 million barrels for small brewers that produce less than 6 million barrels. In summary, the bill gives a small excise tax break to the nation’s smallest brewers which employ people in communities throughout America.
   • The estimated cost of the provision is about $44 million per year and less than $500 million over 10 years.
   • A Harvard study of the Economic Impact of H.R. 4278 indicates that:
     • The bill would generate more than 2,700 new jobs over the first year to 18 months, followed by an average of 375 new jobs per year over the following 4 years.
     • Each new job would cost less than $4,000 in foregone government revenue in 2010.
   • Can Representative/Senator XXX consider supporting and co-sponsoring this bill?
   • Thank you for your time.

Background Information

• Reducing the beer excise tax rates paid by smaller brewers is the top legislative priority for Brewers Association members.
• During the current 111th Congress, 241 U.S. Representatives have shown their support for small brewers by joining Representatives Pomeroy and Latham in sponsoring legislation to reduce the beer excise tax rates paid by all brewers (H.R. 836, the Brewers Excise and Economic Relief Act of 2009).
• In the fall of 2009, in response to a request by Representative Neal, the Brewers Association participated in the development of H.R. 4278, a proposal to create a graduated excise tax rate for small brewers.
• The Brewers Association supports H.R. 4278 and the recently introduced S. 3339 and continues its support of H.R. 836 and the Senate companion bill, S. 1058. We strongly encourage Members of Congress to support H.R. 4278 and S. 3339 with the same level of bi-partisan support extended to H.R. 836.
• Leslie and Mark Henderson of Lazy Magnolia Brewing Co. in Kiln, Mississippi produced a video which explains how an excise tax reduction would benefit their brewery and employees. The video was played at the December 2009 meeting of the House Small Brewers Caucus. It is essentially a case study of the beneficial impact of the proposed $3.50/barrel small brewer rate, and we encourage members to view the 4+ minute clip and apply the points Leslie makes to your own businesses.

Talking Points

The following material was developed to educate members of Congress and staff about small brewers, their unique contributions and challenges, and to make the case for cosponsoring H.R. 4278 and S. 3339.

Strengthen Small Businesses and Preserve American Jobs:

The Brewers Association seeks to promote and protect small, independent American brewers, their craft beers and the community of brewing enthusiasts. The Brewers Association represents 1,516 small and independent brewers across the nation. America's small and independent brewers include 63 brewing companies that produce between 15,000 and 6 million barrels of beer per year at their 238 breweries, 474 microbreweries that produce less than 15,000 barrels per year, and 812 brewpubs (brewery restaurants) that sell 25% or more of their beer on site. By comparison, the largest brewer in America produces 107 million barrels per year domestically and more than 300 million barrels worldwide.

Nationally, small and independent brewers employ nearly 100,000 full- and part-time employees and generate more than $3 billion in wages and benefits and pay more than $2.3 billion in business, personal and consumption taxes. These brewers are vital small businesses in communities across the country, typically employing 10 to 50 employees.

Consumer demand for the bold and innovative beers brewed by America's small brewers has grown significantly in recent years. But beer produced by small, independent brewers still represents less than 5% of the beer sold nationwide. As small businesses, small brewers face many economic challenges. Because of differences in economies of scale, small brewers have higher costs for production, raw materials, packaging and market entry than larger, well-established, multi-national competitors. Furthermore, efforts to increase state taxes for all brewers continue to threaten jobs and their economic stability.

To help strengthen American small businesses and preserve Main Street jobs, the Brewers Association supports legislation to reduce the federal beer excise tax rate for America's small brewers.

• Currently, a small brewer that produces less than 2 million barrels of beer per year pays $7.00 per barrel on the first 60,000 barrels produced each year. Reducing this rate to $3.50 per barrel would provide approximately $18.0 million per year to help strengthen our nation's smallest brewers and support their efforts to maintain and generate jobs.
• Once production exceeds 60,000 barrels, a small brewer must pay the same $18 per barrel excise tax rate that the largest brewer (at over 100 million barrels) pays. Lowering the tax rate to $16 per barrel on beer production above 60,000 barrels up to 2 million barrels would provide small brewers with an additional $26.2 million per year that would be used to support significant long-term investments and create jobs by growing their businesses on a regional or national scale.
• The small brewer tax rate was established in 1976 and has never been updated. Since then the annual production of America's largest brewery increased from about 45 million to 107 million barrels. The ceiling defining small breweries is 2 million barrels. We support raising this ceiling to 6 million barrels to more accurately reflect the intent of the original differentiation between large and small brewers in the U.S.

The Brewers Association urges you to co-sponsor H.R. 4278/S. 3339, legislation to create a graduated beer excise tax rate of $3.50 and $16 for America's small brewers. During the 111th Congress, more than 240 U.S. Representatives have shown their support for small brewers by joining Reps. Pomeroy and Latham in sponsoring legislation to reduce both of the beer excise tax rates paid by small brewers (H.R. 836, the Brewers Excise and Economic Relief Act of 2009). We strongly encourage Members of Congress to extend the same level of bi-partisan support to H.R. 4278 and S. 3339.

The following chart summarizes the potential impact of H.R. 4278/S.3339 on our nation’s small and independent brewers, based on 2008 production data:

$7 to $3.50 Excise Tax per Barrel Comparison

$18 to $16 Excise Tax per Barrel Comparison