As Federal Excise Bill Gains Traction, Craft Beer Guilds Cheer on Possible Growth

Both sides of the aisles in Washington can say “cheers to that” when it comes to a bill that will help create growth by cutting federal excise taxes for developing craft breweries.

United States Senators Joni Ernst (R-IA) and Heidi Heitkamp (D-N.D.) became the 50th and 51st Senators to officially endorse the Craft Beverage Modernization and Tax Reform Act (S. 1562) recently, making the count 27 Republicans and 24 Democrats that have endorsed the bill.

That has breweries across the country and its guilds very happy.

“The [bill] is similar to beer; it has brought people with differencing opinions, perspectives and party affiliations together in unison, to share and agree in a common point of view,” said Tom McCormick, the executive director of the California Craft Brewers Association.

Added Ryan Krill, the president of the Garden State Craft Brewers Guild: “Reforming the federal excise tax will give small, independent brewers more freedom for innovation and creativity. … We’re pleased to see this bill come to fruition. When passed, this law will eventually give brewers nationwide the opportunity to reinvest in their businesses, create thousands of high-paying jobs, and ultimately redefine the brewing industry in this country.”


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. “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. “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.

Rob Fullmer, the executive director of the Arizona Craft Brewers Guild said not only jobs can be added, but communities can be changed.

“Americans … see their neighborhoods revitalized and transformed by the success of small, independent craft breweries,” he said. “This bill is a common sense measure which creates jobs and strengthens communities. We hope that more of our Arizona Congressmen recognize that this is an important bipartisan measure and follow their colleagues in support.”

The bill would also reduce bonding and filing requirements for the 90 percent of American breweries that pay less than $50,000 per year in federal excise taxes and it would expand the list of ingredients that could be automatically included in beer without federal government approval. It also would allow small, unaffiliated brewers the ability to collaborate on new beers, and giving them the flexibility to transfer beer between breweries without tax liability.

“This act is an important part of supporting these growing businesses as they continue to invest in good jobs in their communities,” said Kansas Craft Brewers Guild president Steve Bradt.

Introduced in the Senate by Senators Ron Wyden (D-OR) and Roy Blunt (R-MO) on June 11, 2015. The House companion bill (H.R. 2903), introduced by Representatives Erik Paulsen (R-MN) and Ron Kind (D-WI) on June 25, 2015, has received official support from 283 members of the House of Representatives as well.

“Now that a majority of both the House and the Senate support the legislation, we look forward to Congress taking up the bill and moving it to President Obama’s desk to become law,” said Jim McGreevy, President and CEO of the Beer Institute in a release.

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.

Guilds in Alaska, Ohio, Iowa and Washington voiced their thanks and applauded state representatives and senators for helping back the bill.

In Rhode Island, guild president Brent Ryan noted that although neither Senator has co-sponsored the bill, he has spoken with their offices and hop as more Senators sign on, the state delegation will be among the extra co-sponsors.

The Hop Growers of America, the Can Manufacturers Institute, Glass Packaging Institute, the National Barley Growers Association, and the National Corn Growers Association have also endorsed the legislation.

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