Federal Issues

Craft Beverage Modernization and Tax Reform Act

On Dec. 20, 2017, the United States Congress passed legislation that included a two-year provision of the Craft Beverage Modernization and Tax Reform Act (CBMTRA), which lowered the federal excise tax (FET) for breweries, wineries, and distilled spirits producers for a period of two years and is set to expire on Dec. 31, 2019.

In February 2019, Senators Ron Wyden (D-OR) and Roy Blunt (R-MO), and Representatives Ron Kind (D-WI) and Mike Kelly (R-PA) re-introduced the CBMTRA (S. 362/H.R. 1175) with the goal of making the lower FET permanent.


How CBMTRA Could Impact your Brewery

For breweries, the FET was 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 provisions maintain the current $18/barrel rate for barrelage over six million.

Additionally, CBMTRA allows the transfer of beer between bonded facilities. Previous law allowed beer to be transferred between commonly owned breweries without payment of tax. Under the new provisions, all breweries may transfer beers between bonded facilities without tax liability, something that benefits small unaffiliated brewers and gives them the flexibility to collaborate on new beers without facing a tax liability.

Tell us how lower taxes impact your brewery

Potential Economic Benefit

The following chart summarizes the potential benefit for the impacted barrelage tiers.

Brewery Size:
Domestic < 6M
Brewery Size:
Domestic > 6M & Imports
Totals:
29,524,144

Total Barrels

177,587,069

Total Barrels

207,466,352

Total Barrels

$377,136,118

Total Industry Current Tax

$3,196,567,242

Total Industry Current Tax

$3,573,703,360

Total Industry Current Tax

$297,047,129

Total Industry Proposed Tax

$3,134,493,104

Total Industry Proposed Tax

$3,431,540,233

Total Industry Proposed Tax

$80,088,989

Savings

$62,074,138

Savings

$142,163,127

Savings

Brewery Size: Domestic < 6M
29,524,144

Total Barrels

$377,136,118

Total Industry Current Tax

$3,134,493,104

Total Industry Proposed Tax

$80,088,989

Savings

Brewery Size: Domestic > 6M & Imports
177,587,069

Total Barrels

$3,196,567,242

Total Industry Current Tax

$3,134,493,104

Total Industry Proposed Tax

$62,074,138

Savings

Totals:
29,524,144

Total Barrels

$3,573,703,360

Total Industry Current Tax

$3,431,540,233

Total Industry Proposed Tax

$142,163,127

Savings

Who is Allowed to Transfer Between Bonded Facilities?

  • Independently owned breweries where the transferor has divested itself of all interest in the beer so transferred, and the transferee has accepted responsibility for payment of the tax.

  • Breweries that are owned by the same person/entity.

  • A brewery that owns a controlling interest in another brewery.

New Tax Rate is Now in Effect

CBMTRA went into effect on Jan. 1, 2018 and will “sunset” on Dec. 31, 2019. The Alcohol and Tobacco Tax and Trade Bureau (TTB) provided their guidance. The Brewers Association (BA) will continue to monitor developments at TTB and within the broader alcohol beverage industry so that we can provide additional information as soon as it becomes available.

Next Steps for Your Brewery

Making CBMTRA permanent is a priority for the Brewers Association. BA staff will continue to lobby on the issue and there are many ways that you can help:

  • Keep track and share information with the BA. Make note of the changes that you make in your brewery, employees that you hire, new equipment that you purchase etc. Participate in surveys like the Beer Industry Production Survey (BIPS) and let us know how many barrels you are producing, what type of entity your brewery is registered as (LLC, LLP, pass-through, etc.) and other things that can help us when we are advocating on the Hill.

  • Invite your members of Congress to visit your breweries.

  • Participate in Hill climbs with your state guild and the Brewers Association.


Get in Touch with Government Affairs Leaders

Email Us: marisic@brewersassociation.org

Bob Pease

Chief Executive Officer, Brewers Association

Katie Marisic

Federal Affairs Manager, Brewers Association

Tariffs and Trade

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Brewers Association Statement on Steel and Aluminum Tariffs

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U.S. Suspends Proposed Tariffs on Steel Products from China

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Brewery Equipment on List of Tariffs U.S. Imposes on China

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Get in Touch with Government Affairs Leaders

Email Us: marisic@brewersassociation.org

Bob Pease

Chief Executive Officer, Brewers Association

Katie Marisic

Federal Affairs Manager, Brewers Association

Connect with Elected Officials

Building a relationship with your elected officials is one of the most important “government relations” functions you can perform as a member of the craft brewing community.

Brewers Association Board of Directors and staff have made the development of a strong and meaningful government affairs relationship a priority.

Together we’ve achieved some notable results:

  • Twice turning back potential new taxes in the form of TTB user fees

  • Successfully streamlining the excise tax payment schedule for many small brewers

  • Petitioning the TTB to expand the recognition of traditional ingredients and processes

  • Passage of a Congressional Resolution recognizing the valuable contributions of craft brewers

  • Introducing legislation to re-calibrate the federal excise tax rate for small brewers that had the support of more than half the Representatives and Senators in Congress


Arrange a Congressional Visits to your Brewery

It’s Easier than You Think!

The invitation can be made with a quick phone call or email. The visit itself will only take an hour of your time, but will keep paying returns on the local and national levels. And, it’s easy.

Identify Your Elected Officials:

You will typically find specific office contact information in the contact section or footer of an elected officials website. Identify the district office contact information for arranging the visit.

Phone the office to make your request, asking to speak with the scheduler. If there is more than one district office, determine which is the nearest to your brewery and call that one.

If you have any questions or if you need help with contact information for state/district directors or schedulers, please email one of us for assistance. And finally, stay in touch and let us know how your visit goes.

Tips for Planning and Executing a Congressional Visit

  • Call or e-mail the distric or state office of your House member or Senator.

  • Ask to speak to their district scheduling secretary or whoever is in charge of the calendar (Put “ATTN: Scheduling or Invitation” in subject line of e-mails)

  • Invite them to visit in the evening or over a weekend, as they are often attending meetings or events seven days a week and well into the evening.

  • If you are successful in getting your Senators or Representatives to plan a visit, make some basic preparations with your employees

  • Think through a quick tour of your facility that will enable them to see the scope of your business activities and your employees at work (production, packaging, transportation, offices, kitchens, etc.)

Get in Touch with Government Affairs Leaders

Email Us: marisic@brewersassociation.org

Bob Pease

Chief Executive Officer, Brewers Association

Katie Marisic

Federal Affairs Manager, Brewers Association