Small Brewer Tax Reform Reaches Major Milestone

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The Craft Beverage Modernization and Tax Reform Act (S. 236), legislation championed by the Brewers Association, that would lower federal excise taxes for small and independent craft brewers recently added its 51st and 52nd co-sponsors in the Senate, giving the bill the support of more than 50 percent of the United States Congress. Senators James Inhofe (R-OK) and Kamala Harris (D-CA) were the 51st and 52nd co-sponsors of the legislation. They joined a bipartisan group of senators and 281 representatives in the House in support of the bill.

“This bill takes an important step towards reducing the tax burden for hundreds of businesses across California. Breweries, wineries, and distilled-spirit producers are an important part of California’s economy, from Napa to San Diego,” said Senator Harris. “It will create jobs, spur innovation, and just makes economic sense.”

“I am pleased to join my colleagues in the Senate by co-sponsoring the Craft Beverage Modernization and Tax Reform Act,” said Senator Inhofe. “This piece of legislation will modernize outdated regulations and cut federal taxes for small brewers, distillers and winemakers across Oklahoma by 50 percent, allowing them to grow their businesses and create more jobs in Oklahoma.”

(READ: The Demographics of Brewery Visitors)

The legislation which was introduced by Senators Roy Blunt (R-MO) and Ron Wyden (D-OR) and Representatives Erik Paulsen (R-MN) and Ron King (D-WI) will lower federal excise taxes for breweries, wineries and distilled spirits producers. For craft brewers, the federal excise tax would be reduced to $3.50/barrel (from $7/barrel) on the first 60,000 barrels for domestic brewers producing less than two million barrels annually, and reduced to $16/barrel (from $18/barrel) on the first six million barrels for all other brewers and all beer importers. The bill would maintain the current $18/barrel rate for barrelage over 6 million.

Thousands of bills are introduced every year, but very few have the support that the Craft Beverage Modernization and Tax Reform Act (CBMTRA). The legislation’s support is due to a mix of things.

  • Strong grassroots support of craft brewers: with more than 5,600 breweries in the country there are breweries in almost every congressional district in the country. Small and independent brewers and state guilds have been active in asking their legislators to support the CBMTRA. In the past year brewers from across the U.S. have participated in two hill climbs, sent countless grassroots emails and hosted legislators at their breweries.
  • Broad support from alcohol and suppliers trade associations: The CBMTRA began as a compromise bill between the Brewers Association and the Beer Institute and quickly expanded to include Wine America, Wine Institute, Distilled Spirits Council of the United States, the American Craft Spirits Association and supplier’s associations. Most recently, the National Association of Manufacturers, American Farm Bureau Federation, American Gaming Association and National Grocers Association have come out in support of the bill.
  • The CBMTRA is a job creation bill. Just the beer portion of the bill is anticipated to create an additional 9,000 jobs in the first 12-18 months after it is implemented.

(MORE: Economic Impact of Small Breweries)

The Brewers Association will continue to work with the aforementioned associations to continue to grow support for the legislation and look for potential vehicles to get the legislation passed in the 115th Congress. Brewery owners and employees can help by reaching out to their members of Congress using the Brewers Association’s easy to fill out Contact Congress form. If you have any questions please contact me.

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