Unless Congress takes action, on Dec. 31, 2019, the current federal excise tax (FET) rates will expire and breweries across the country will see their rates revert back to 2017 rates. For many breweries, this will be a 100 percent increase in the FET they pay per barrel.
The Brewers Association and our members thanked Congress for passing legislation in 2017 that include a two-year provision that recalibrated federal excise taxes for breweries, wineries and distilleries. As an industry we have long advocated for a reduction on the additional tax breweries pay and once it was, brewers immediately used the savings to reinvest in their businesses, their breweries and their employees. In 2018, the first year the recalibrated rates went into effect, small and independent brewers created 15,000 new jobs. They expanded their tasting rooms, purchased new machinery, increased employee benefits, hired new employees, and increased their charitable giving.
But every day we are one day closer to these rates expiring, and brewers across the country are sharing a sense of urgency to make the lower FET rates permanent. Using their voices as small-business owners across the country, brewers are looking to deliver a clear message to their elected officials: Make the lower FET permanent, or put in jeopardy all the progress in the industry.
Hundreds of other small and independent brewers across the country are meeting with their elected officials during the August recess and contacting their congressional offices, encouraging them to support making the federal excise tax rates permanent.
Some are putting their thoughts in writing. For instance, The Columbus Dispatch in Ohio recently published an op-ed from Collin Castore, co-founder and partner of Seventh Son Brewing and president of the Ohio Craft Brewers Association Board of Directors. “Unlike other tax cuts, brewers use this savings to invest,” Castore wrote. “The lower FET enables us to make important and necessary investments in our people, our community, and in our businesses while confidently continuing to do what we do best: brew the best craft beer in the world—American craft beer.”
Overall, the United States Congress agrees on the importance of this legislation. Earlier this year, the Craft Beverage Modernization and Tax Reform Act (CBMTRA) (H.R. 1175/S.362) was reintroduced by Representatives Ron Kind (D-WI) and Mike Kelly (R-PA) in the House and Senators Ron Wyden (D-OR) and Roy Blunt (R-MO) in the Senate and would make the current FET rates permanent. It is currently supported by more than half of the United States Congress—272 congressmen and 68 senators across both sides of the aisle.
In addition, earlier this summer, the House Ways and Means Committee included a one-year extension of the federal excise tax recalibration in a mark-up of H.R. 3301, and just this month, a Senate Finance Committee Task Force convened to make recommendations on temporary tax policies stated that they would not only like to see the FET recalibration for breweries extended, but that they would like to see the language in the CBMTRA made permanent.
Make Your Voice Heard
There are only a few weeks left in the first half of the 116th legislative session. Your members of Congress need to hear from you about how your brewery would be impacted if the current FET rates are not extended or made permanent. If you wish to connect with your elected officials, there are several ways to do so, including:
- Ask them to co-sponsor the CBMTRA using our contact congress form
- Invite your legislators to visit your brewery
- Contact Katie Marisic, Brewers Association federal affairs manager, with any questions