​Nailing Down Excise Taxes

It can be said that brewing is 90% cleaning. Well in brewery management, about 90% of the work is probably paperwork. One such task that can be worrisome at the start is determining how much your brewery owes in excise taxes.

Brewer asked breweries that have been open for a while and have experienced growth over those years to share with newer breweries how they track their ad valorem excise taxes.

Seventh Son owner Collin Castore and Brewmaster Colin Vent noted that the TTB is only interested in what’s sold (or anything that could have been sold but was destroyed for some reason).

​”​The TTB lady I spoke with years ago basically said,​ ​’​We’re not interested in the trub you put down the drain​’​ so production losses don’t get tallied up,” they said. The Columbus, Ohio-area brewery uses its packaging for tax determination.

“So once it’s in a keg or can and in our walk-in, it’s now counted towards our taxes,” they said. “That way we’re not paying taxes on the cloudy bit of beer below the standpipe in the brite tanks.”

Seventh Son ​tallies​ up all the production numbers (beer into packaging) from ​its brew logs and record those, and then run reports from ​the taproom POS system and wholesale Quickbooks to get sales numbers​.​ That​ is​ balanced out against ​the ​inventory in the walk-in.

Bret Kollmann Baker​, the Chief of Brewing Operations for Cincinnati‘s ​Urban Artifact Beer, ​said the best strategy is to stay on top of recording.

“It is fairly easy to fill out the forms, but if you aren’t keeping track of your daily going-ons, you’re going to have a bad time when it comes time to get everything together,” he said.

Urban Artifact uses Ekos and Kollmann Baker said the system makes it extremely easy.

“[It] prints out our tax liabilities once a quarter and I transfer onto the proper state and federal paperwork,” he said. “Easy-peasy.”

The Seventh Son team says, though, it never really gets easier to log.

“I’m a lot faster at it now, but there’s still a lot to count and tally up,” he admitted. “We keep a brew log of each batch of beer we produce; it has all the pertinent info recorded such as wort produced, beer into brite tanks and final packaging numbers.”