After seeing both S. 1562 and H.R. 2903 fail to pass under the Obama administration, the craft beer industry and the same Senators and Representatives that started the Craft Beverage Modernization and Tax Reform Act in 2015 have put the wheels in motion again as the new Congress begins with S. 236 and H.R. 747.
Reintroduced by Senators Ron Wyden (D-OR) and Roy Blunt (R-MO), and Representatives Erik Paulsen (R-MN) and Ron Kind (D-WI) in the House, with 12 original sponsors in the Senate and 13 in the House, the comprehensive bill seeks to recalibrate the current federal excise tax structure for the nation’s brewers, fostering economic development and job growth in the brewing industry. It’s the same hope that began in June of 2015 with a majority in both the House and Senate backing the bill.
Now, nearly 40 co-sponsors of the previous House bill are not in office, the climb will begin once again.
Both sides, along with many in the craft beer industry cheered when the 50th and 51st Senators to officially endorse the act in September of 2016. But it never was moved to passing or on to President Obama’s desk. So Wyden, Blunt, Paulsen and Kind quickly got to work in laying the groundwork once again.
“This bill would ensure these industries no longer face the unfair burdens of Prohibition-era rules and taxes,” said Wyden, co-chair of the Senate Bipartisan Small Brewers Caucus. “My targeted approach to modernizing outdated regulations aims to build on the strengths of Oregon’s craft brewers, vintners and distillers so they have every opportunity to keep creating new jobs and economic opportunity in every corner of our state.”
Added Blunt: ““This is an industry driven largely by small business men and women, and the last thing Washington should do is get in the way. This bipartisan bill will help remove barriers to growth for brewers, distillers, and winemakers, making it easier for them to create new jobs and bolster our state’s economy.”
The biggest part of the possible changes would be halving the excise tax for craft breweries that produce under 60,000 barrels per year from $7 per bbl to $3.50. Around 98 percent of America’s craft breweries fall into that category.
Tim Barnes, the Wyoming Brewers Guild president and Black Tooth Brewing co-owner has appeared on Capitol Hill three times to help further this legislation.
“Hopefully this is further evidence of the continued pursuit/influence small brewers are having on Congress as it pertains to excise taxation,” he told Brewer via email back in September. “With passage of this legislation, Wyoming brewers will be able to further expansion plans, and reinvest into not only equipment, but support additional jobs and economic development in local communities across Wyoming.”
The amount of money estimated by lobbying groups for the bill estimate that an additional $320 million could be given back to craft breweries, now nearly a total of 5,000 across the country.
“The House and Senate understand that this is all about four simple letters: J-O-B-S,” said New York State Brewers Association Executive Director Paul Leone for a previous story. “When a brewery can put more money into their pockets through tax cuts and incentives, they immediately reinvest those dollars into equipment and expansion, which translates into new jobs. We see this in New York State with our own tax rebate program, and we know it works.”
The act would also reduce $2 per bbl (from $18 to $16) for breweries that produce between 60,001 to 6 million BBLs annually.
It’s reported that the American beer industry supports 1.75 million jobs, contributes nearly $79 billion in wages and benefits each year to American families, and generates $253 billion for the U.S. economy.