TECH FLASH
Fair BEER Act to reform beer tax
A new bill proposes creating a graduated federal excise tax structure while maintaining a level playing field.
The American beer industry is voicing its support for bipartisan legislation introduced this month that would comprehensively reform the federal beer tax currently imposed on brewers and beer importers.
According to the Beer Institute, the national trade association for the American brewing industry, the bill would “remove barriers to growth in the industry, encouraging capital and workforce investment through simple, fair and broad reform.” If passed, the bill will create a graduated federal excise tax structure while maintaining a level playing field.
Known as the Fair Brewers Excise and Economic Relief Act of 2015 (Fair BEER Act), the bill was introduced by US Rep. Steve Womack, R-AR, and US Rep. Ron Kind, D-WI.
“Our tax policies shouldn’t discourage the growth and continued success of an industry that supports jobs for more than 2 million Americans, and it shouldn’t pick the winners and losers in the market,” says Womack. “This comprehensive reform bill supports brewpubs, microbrewers, national craft brewers, major brewers and importers alike, and encourages their entrepreneurial spirit, which is exactly the spirit we need to get America’s economic engine going again.”
Under the Fair BEER Act, all brewers and beer importers would pay a graduated federal excise tax: no excise tax on the first 7,143 barrels; $3.50/barrel on barrels 7,144-60,000; $16/barrel on barrels 60,001-2 million; and $18/barrel on every barrel above 2 million. The institute says this “laddered” approach gives the greatest relief to small brewers, which account for more than 90 percent of permitted brewers.
By applying this comprehensive reform, the legislation removes barriers to growth. Under current law, small brewers—those that produce up to 2 million barrels—are taxed at a rate of $7/barrel on the first 60,000 barrels and $18 on every barrel thereafter. Current law imposes an $18/barrel federal beer tax on all brewers that supply more than 2 million barrels annually.
"The beer industry has shaped our heritage and history in Wisconsin and plays a crucial role in our state’s economy," says Congressman Kind. “Here in Wisconsin and across the nation, brewers are employing our workers and creating new jobs, and this pro-growth, bipartisan bill will help them continue to expand and produce high-quality products.”
The institute says it expects similar legislation to be introduced in the US Senate shortly.
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