The Small Brewer Reinvestment and Expanding Workforce Act, designed to stimulate regional economies by reducing the excise tax on beer produced by small brewers, was reintroduced by U.S. Sens. Susan Collins (R-ME) and Ben Cardin (D-MD) on Wednesday.
Nicknamed the Small BREW Act, the bill would redefine the category of small brewer to match modern production scales.
“Maine is home to dozens of unique craft breweries and brewpubs that invigorate our economy by providing more than 1,400 jobs and drawing countless tourists into our state,” Collins said. “In meeting with brewers across Maine, they always make clear to me how federal tax policy affects their businesses. Our bill would help reduce the tax burden placed on many small brewers across our country, allowing them to thrive, create jobs and further grow our economy.”
Based on current federal law, the new scale would have a positive effect on every small craft brewer in America.
Today, breweries producing fewer than 2 million barrels per year must pay a tax of $7 per 31-gallon barrel on the first 60,000 barrels they produce and $18 per each additional barrel.
If passed, the Small BREW Act would slide the rate to $3.50 per barrel on the first 60,000 barrels, and $16 per each barrel between 60,001 and 2 million. The rate over 2 million barrels would be $18 per barrel.
These new rates would apply to any brewer producing fewer than 6 million barrels annually.
“Small brewers have been anchors of local communities and America’s economy since the start of our history,” Cardin added. “In addition to making high-quality beers, Maryland craft brewers create jobs and reinvest their profits back into their local economies. The federal government needs to be investing in industries that invest in America and create real jobs here at home. With more than 3,200 small and independent breweries currently operating in the U.S., now is the time to help this industry – and our economy — keep growing stronger.”
Taking into account the economies of scale, small brewers end up with higher costs for raw materials, production, packaging and marketing when compared to larger corporate breweries. The tax adjustment provided by this legislation could free up $65 million to $70 million each year to help offset those costs.
The Small BREW Act has a long list of co-sponsors from both parties, including: Sens. Angus King (I-ME), Tammy Baldwin (D-WI), Thad Cochran (R-MS), Richard Blumenthal (D-CT), Mark Kirk (R-IL), Tom Carper (D-DE), Lisa Murkowski (R-AK), Bob Casey (D-PA), Rob Portman (R-OH), Maria Cantwell (D-WA), Chris Coons (D-DE), Martin Heinrich (D-NM), Mazie Hirono (D-HI), Patrick Leahy (D-VT), Ed Markey (D-MA), Bob Menendez (D-NJ), Jeff Merkley (D-OR), Barbara A. Mikulski (D-MD), Chris Murphy (D-CT), Bernie Sanders (I-VT), Charles Schumer (D-NY), Ron Wyden (D-OR) and Amy Klobuchar (D-MN).