Tax relief for breweries could be on its way thanks to two pieces of proposed legislation, The Small Brewer Reinvestment and Expanding Workforce Act ("Small BREW Act") and The Brewers Excise and Economic Relief Act of 2013 (“BEER Act”). Under current law, brewers generally pay an $18 excise tax on each barrel brewed. Small brewers, defined as those that brew fewer than 2 million barrels of beer a year, pay a reduced excise tax of $7 per barrel for the first 60,000 barrels brewed each year.
The Small BREW Act would reduce the small brewer rate on the first 60,000 barrels by 50 percent (from $7.00 to $3.50 per barrel) and institute a new rate $16.00 per barrel rate on beer production above 60,000 barrels up to 2 million barrels. Breweries with an annual production of 6 million barrels or less would qualify for these tax rates.
The BEER Act would lower the federal excise tax rate on the first 15,000 barrels to $0. Barrels 15,000 to 60,000 would be taxed at $3.50 per barrel. Additional barrels above the 60,000 mark would be taxed at $9 each.
Thus, the BEER Act is designed to produce tax relief to small and large breweries, while the Small BREW Act is designed to provide relief targeted to small breweries. Proponents of the Small BREW Act argue that it should help promote a competitive balance for craft breweries competing with larger breweries. Proponents of the BEER Act argue that it will help foster economic growth on a larger scale across the United States.
Both the Small BREW Act and BEER Act’s progress can be monitored at the govtrac.us website.
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