Strengthen Small Businesses and Preserve American Jobs
The following talking points and resources for brewers were developed to help educate members of Congress and staff about small brewers, their unique contributions and challenges, and to make the case for supporting Federal small brewer excise tax recalibration legislation. Click here for a one-pager you can share with your Representative or Senator.
Legislation in the 115th Congress
On January 30, 2017, the Craft Beverage Modernization and Tax Reform Act (CMBTRA) of 2017, was introduced in the U.S. Senate (S.236) and House of Representatives (747)
The CMBTRA is a broad piece of tax legislation that impacts not just the beer industry, but also wine and distilled spirits. In regards to beer, the bill restructures the federal excise tax, modernizes the Alcohol Tax and Trade Bureau (TTB) labeling requirements and eases certain restrictions on transferring beer between bonded facilities.
Here are the facts:
|Currently, a small brewer that produces less than 2 million barrels of beer per year is eligible to pay $7.00 per barrel on the first 60,000 barrels produced each year.||Adjusting this rate to $3.50 per barrel would provide approximately $37.5 million per year (based on 2014 data) 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 pays at 97 million barrels.||Adjusting the tax rate to $16 per barrel on beer production above 60,000 barrels up to 6 million barrels would provide small brewers with an additional $73 million per year (based on 2016 data) that would be used to support significant long-term investments and create jobs by growing their businesses on a regional or national scale. Foreign based breweries would also benefit from this reduction.|
In addition the Craft Beverage Modernization and Tax Reform Act would:
- Allow for consolidated bookkeeping for brew pubs.
- Expand the list of ingredients that could be automatically included in a beer without approval from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
- Allow brewers to collaborate on new beers by giving them the flexibility to transfer beer between breweries without tax liability.
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 over 5,200 small and independent brewers across the nation.
America’s small and independent brewers include over 180 brewing companies that produce between 15,000 and 6 million barrels of beer per year, more than 3,100 microbreweries that produce less than 15,000 barrels per year and more than 1,850 brewpubs (brewery restaurants) that sell 25 percent or more of their beer on site.
Nationally, small and independent brewers employ over 125,000 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 100 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 only 12 percent 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 multinational competitors. Furthermore, efforts to increase state taxes for all brewers continue to threaten jobs and their economic stability.