It’s a Good Time to be a Craft Beer Drinker

I received another press release from the Brewers Association today, announcing its “Legislator of the Year” awards. Reps. Jim Gerlach (R-Pa.) and Richard E. Neal (D-Mass.) were recognized for their stewardship of the Small Brewer Reinvestment and Expanding Workforce Act (Small BREW Act – clever, eh?).

Yeah, yeah, thumbs up, congratulations and all that, but I did find the release interesting as regards the current and proposed tax rates, and the explosion of small brewers. In a prior article I talked about the excise tax on beer and why six million barrels has become the magic number as to what constitutes a small brewer, but here are the actual dollar amounts.

The Small BREW Act (which has failed to pass thus far but is being taken up again this month) aims to recalibrate the federal excise tax rate structure to further foster the growth of the craft brewing community. Currently, brewers producing less than 2 million barrels of beer per year pay $7 per barrel on the first 60,000 barrels they brew, and $18 per barrel on every barrel thereafter. If the Small BREW Act is adopted, the rate for the smallest brewers and brewpubs would be $3.50 on the first 60,000 barrels. For production between 60,001 and 2 million barrels the rate would be $16.00 per barrel. Any brewer that exceeds 2 million barrels (about 1 percent of the U.S. beer market) would begin paying the full $18 rate. Breweries with an annual production of 6 million barrels or less would qualify for these tax rates.

Nationally, small and independent brewers are a big boon to the economy. These small businesses employ over 100,000 full- and part-time employees and generate more than $3 billion in wages and benefits. They also pay more than $2.3 billion in business, personal and consumption taxes. In 1976, there were approximately 30 small brewers in the United States. Today, there are more than 2,000.

The 70’s must have been some thirsty times.

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