While the Republican Tax Cut has been dissected and rightfully dismembered for it’s generosity to those needy wealthy folk and corporations who will soon be charging us more for the interwebs, it did also have a nice bit of help for small brewers tucked inside. (Not that it helps the overall picture)
The Craft Beverage Modernization and Tax Reform Act will “recalibrate” according to the Brewers Association, the federal excise tax.
Here’s the gist:
“Under the bill, the federal excise tax on beer will be reduced to $3.50/barrel (from $7/barrel) on the first 60,000 barrels for domestic brewers producing less than 2 million barrels annually, and reduced to $16/barrel (from $18/barrel) on the first 6 million barrels for all other brewers and all beer importers. The bill maintains the current $18/barrel rate for barrelage over 6 million. In total, this represents more than $142 million in annual savings, which will allow America’s small brewers—who are manufacturers and entrepreneurs—to reinvest in their businesses, expand their operations, and hire more workers.
Additionally, CBMTRA increases collaboration between brewers by permitting transfer of beer between bonded facilities without tax liability.”
How breweries will react to these savings and how they use them will be interesting to watch. Will it go to infrastructure like tanks or more to employee benefits? And will it give an extra boost to those bigger breweries at the expense of the smaller? It will certainly impact the #independent beer world in 2018 but tax cuts don’t have the most predictable outcomes. And with most of these taxes sunset-ting to meet budgetary concerns, will they even have 1/2 the effect that is expected.
To get another deeper dive, check out the numbers HERE at the Beervana Blog.