Dive Brief:
- A recently introduced bipartisan tax reformation bill, known as the Fair Brewers Excise and Economic Relief Act, or the Fair BEER Act, could affect the federal excise taxation laws of the beer industry, enacting a rising scale based on quantity of barrels sold.
- This proposal ranges from no federal excise tax on any less than 7,143 barrels and up to the current excise taxation rate, $18 a barrel, which would not be imposed until every barrel over 2 million. As the current law stands, brewers face $7/barrel taxes for the first 60,000 barrels, and $18/barrel for each one after.
- With the current tax structure, about 40% of each beer sold goes to pay for taxes.
Dive Insight:
The Beer Institute, a U.S. trade association representing brewers, beer importers, and industry suppliers, has come out in support of the bill. The association's president and CEO Jim McGreevy said in a statement, "This bill is important for reforming a hidden tax that most beer drinkers don't even know they pay, and because it removes barriers to industry growth. The Fair BEER Act deserves support, because it offers fair reform of the federal beer tax, but it reaches that reform without completely changing the industry structure."
However, not all members of the beer industry are keen on the bill, and some support another similar bill currently on Congress' books: the Small Brewer Reinvestment and Expanding Workforce Act, also know as the Small BREW Act. This includes the Brewers Association, which feels that the Fair BEER Act disproportionately helps larger, multinational brewers rather than supporting the country's more than 3,200 smaller craft breweries.
Brewers Association' CEO Bob Pease said in a statement, "While the Brewers Association supports lowering excise taxes for small brewers, the BEER Act is not the way to do it. There are several problematic issues with this legislation including cost to the country, job creation and fairness. The BEER Act gives further tax advantages to multinational brewing companies that not only already pay lower rates than purely domestic brewers, but also have cut thousands of U.S. jobs in the past six years and export and shelter their U.S. profits."