Bipartisan Legislation Would Cut Excise Tax for Craft Breweries / Craft Brewers Sold an Estimated 15.3 million Barrels of Beer in the U.S. in 2013 with Sales Totaling $14.3 billion
Washington, DC – As Philadelphia Beer Week comes into full swing, U.S. Senator Bob Casey (D-PA) called for the passage of S. 375, The Small Brewer Reinvestment and Expanding Workforce or Small BREW Act. The bill, introduced by Senator Casey and a group of bipartisan legislators in February, would provide a reduced rate of excise tax on beer to craft brewers in Pennsylvania and across the nation. The tax relief would help Pennsylvania’s small brewers compete in a rising industry.
“Philadelphia Beer Week spotlights some of the region’s most innovative brewers,” Senator Casey said. “These breweries are creating jobs and helping local economies not only in Pennsylvania but throughout the nation. I am hopeful that we can move forward in Congress with this commonsense piece of legislation and help these small brewers compete.”
Brewers generally pay an $18 excise tax on each barrel brewed (one barrel is 31 gallons). Small brewers (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 of beer they brew each year. The proposed bill would reduce the applicable excise tax in two ways. First, the tax on the initial 60,000 barrels would be reduced to $3.50 per barrel. Second, the tax rate on additional barrels below 2 million per year would be reduced to $16. These tax savings would be available to breweries with an annual production of 6 million barrels or less. The small brewer threshold and tax rate were established in 1976 and have never been updated. Since then, the annual production of America’s largest brewery increased from 45 million barrels to 105 million barrels. Raising the ceiling that defines small breweries from 2 million barrels to 6 million barrels more accurately reflects the intent of the original differentiation between large and small brewers in the U.S.
In March 2013, Harvard University conducted a study that highlighted the economic benefits of the bill: The proposed reduction in the federal excise tax on beer produced by small brewers (i.e., brewers producing up to 6 million barrels of beer per year) would increase economic activity by $183.1 million in 2013 and $1.04 billion over five years.
More information on Philly Beer Week can be found here: LINK.
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