Tag: beer taxes

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Death and Taxes

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.

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Tax Time

With the tax deadline next month, it is a good time to take a gander at this state-by-state comparison of beer taxes.
Beer_map
The Tax Foundation describes itself as a “non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937.”

And no matter what your political view on taxes and government, as craft beer fans we need to be in the loop on how this affects the cost of running a brewery and how it ends up costing us.

And just from a quick scan of the numbers, Oregon and Colorado are really at the low end at 8cents each and not surprisingly have big craft consumption and brewery numbers.

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Something is Right

In my interweb browsing, I came across this tidbit from way back in February…..

“Today, U.S. Senator Charles E. Schumer announced that he is joining more than 20 bipartisan colleagues to introduce legislation that will cut the excise tax on small breweries in half, helping small brewers across New York reinvest in their business, hire new employees, and revitalize downtown communities. Currently, brewers pay a $7 excise tax for the first 60,000 barrels they brew per year. Under the BEER Act that Schumer will introduce, that rate is slashed to $3.50 per barrel, resulting in potential savings of $210,000 per year for the brewery. The bill also cuts the tax by $2 on the next 1,940,000 barrels produced, resulting in potential savings of $3,880,000 each year. This totals over $4 million in potential annual savings for these brewers. Allowing small breweries to reinvest in their companies is good for the surrounding communities, as many build state-of-the-art structures or renovate existing buildings, preventing blight and creating good-paying jobs.

“Small breweries throughout Upstate New York not only brew great beer, they also create great jobs,” Schumer said. “By cutting taxes for these small businesses, we can help grow the economy and put more New Yorkers back to work in stable, good-paying jobs. Breweries are the crown jewels of so many of our communities, and many of them have renovated charming old warehouses in downtowns across the state. Putting more money back into these businesses will be good for economic development, good for jobs, and good for New York.””