Small and Independent Craft Brewers Face Increased Taxes if Rate Expires on Dec. 31

In less than 30 days, the recalibrated Federal Excise Tax (FET) rate for 72 small and independent breweries in Kentucky will expire. These small businesses are asking Congress to prioritize and pass the Craft Beverage Modernization and Tax Reform Act or extend the current exise tax rates before Dec. 31. Since its enaction at the end of 2017, the reduced FET has enabled small and independent brewers across our state to re-invest in their business, hire new employees and grow their breweries.

“The Craft Beverage Modernization and Tax Reform Act has been crucial to the success of small and independent brewers in Kentucky and needs our full support,” said Derek Selznick, Executive Director of the Kentucky Guild of Brewers. “The craft beer industry has experienced sustained growth in Kentucky and across the country and the current FET rate has gone a long way to empower our brewers to make significant investments into their businesses, adding dozens of jobs and contributing over 700 million to Kentucky’s economy. Breweries operate in every state and nearly every congressional district in the country and if the current rate is allowed to expire, the tax increase may have a chilling effect on job creation.  America’s beer industry is one of the jewels of America’s manufacturing sector—supporting more than 2.1 million jobs – 559,545 of which come from the craft industry.”

The Craft Beverage Modernization and Tax Reform Act is uniquely bipartisan legislation, with support from more than half of the U.S. Congress. Recalibrated FET rates have saved the American craft brewing industry nearly $80 million annually and helped provided certainty and stability for more than 7,500 breweries across the country including over 1,000 in Kentucky. If the legislation is not acted upon, not only will American and Kentucky brewers alike face a massive financial burden, but more than 2,000 new brewers who have only been in operation since Jan. 1, 2018 and who have never before paid the tax, will see a 100 percent tax increase.

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