Industry Lauds Bill Created to Boost Venues with Draft Systems

Happy barista holding glass of draft beer while working at bar counter.

The Beer Institute, the oldest national trade association representing the beer industry, released the following statement after Reps. Darin LaHood (IL-16) and Steven Horsford (NV-04) introduced H.R.7577, the Creating Hospitality Economic Enhancement for Restaurants and Servers (CHEERS) Act.

“Illinois has a rich history of craft brewers and local bars from Chicago to Peoria and beyond,” said Rep. Darin LaHood (IL-16). “Many of our bars, restaurants, and the hospitality sector at large are still feeling the negative effects of the pandemic and subsequent lockdown policies. This bipartisan bill will support these local establishments by incentivizing the expansion of tap lines and keg equipment on commercial premises. Local bars and restaurants are an essential part of the identity of our communities in Illinois, and I am proud to lead this effort to revitalize the hospitality sector, support local jobs, generate economic growth, and promote the use of sustainable tap equipment in bars and restaurants.”

The CHEERS Act would provide a tax deduction for bars, restaurants and entertainment venues with draft beer systems to help revitalize hospitality establishments still struggling years after the pandemic.

“The beer industry is committed to supporting its retail partners in the hospitality industry that were deeply impacted by the pandemic,” said Brian Crawford, president and CEO of the Beer Institute. “That’s why we applaud Reps. LaHood and Horsford for introducing the CHEERS Act, which will provide relief to your favorite local pubs, bars, restaurants and entertainment venues nationwide that serve fresh, ice-cold beer on draft. Beer is America’s favorite alcohol beverage, and with draft systems in tens of thousands of establishments across the country, this bill will allow businesses to create more jobs and stimulate local economies from coast to coast.”

Numerous trade associations and stakeholder groups in the hospitality industry spoke out in support of the bill, saying:

“Small and independent craft brewers know all too well the impacts of the pandemic on the hospitality industry,” said Bob Pease, president and CEO of the Brewers Association. “With 30% of all draft beer sold produced by craft brewers, restaurants, bars, and retail partners are integral parts of the brewing community, and healthy on-premise business and draught service are crucial to the overall health of small and independent craft brewers. We enthusiastically support the introduction of the CHEERS Act and thank Congressmen LaHood and Horsford for supporting legislation that will encourage economic growth and help these important partners.”

Since 2005, the tax code has provided the Section 179D deduction for qualifying investments in energy-efficient systems on commercial premises. This provision would be expanded to apply to all new keg and tap properties, incentivizing the use of draft lines and keg equipment in taprooms, restaurants, bars and entertainment venues. The legislation also would provide an additional benefit for the remodeling of draft property and for lost or stolen kegs. Congress has modified definitions for qualifying property within Section 179D several times in recent years to expand the scope of the deduction. The CHEERS Act expands Section 179D again to include an incentive for energy-efficient draft containers and installation property, providing immediate tax relief to struggling on-premise businesses.

“The hospitality industry is in many ways at the center of our communities and our economy,” said Dan Vorlage, executive director of the Steel Keg Association. “Because these local businesses operate with tight margins and other pressures, it is a challenge to make up-front investments in equipment that unlock lower costs and sustainability benefits over time. The CHEERS Act will make draft beverage systems more affordable, encouraging the use of efficient and sustainable, reusable steel kegs. We raise a glass to the Beer Institute, Reps. LaHood and Harsford, and all of the leaders rallying to support pubs, bars and restaurants.”

In May 2023, the Beer Institute released its latest version of the Beer Serves America report, which showed that the U.S. beer industry contributes more than $409 billion to our economy – equivalent to 1.6% of GDP. The beer industry pays more than $132 billion in wages and $63.8 billion in taxes. Nearly 2.4 million American jobs rely on a strong beer industry, including 92,159 brewer and beer importer jobs, 77,847 manufacturing jobs, 137,420 distribution jobs, 52,220 agricultural jobs and 979,805 retail jobs.

“The American Cider Association recognizes that healthy draft sales are connected to a thriving hospitality sector and are critical to the future of the cider industry,” said Michelle McGrath, CEO of the American Cider Association. “Draft cider represents 60% of hard cider consumed at establishments, and on-premise consumption is an important gateway for consumer adoption of cider. Restaurants, neighborhood pubs, taprooms, sports arenas, bars, movie theaters and more are all important to the commercial cider ecosystem. We appreciate that the CHEERS Act will support investments by draft accounts in new, energy-efficient draft equipment. Relief for the hospitality industry is very needed right now, and the CHEERS Act will help provide some of that relief.”

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