Will Tax Cuts for Brewers and Distillers Be Part of Tax Reform?

A bipartisan group of lawmakers is looking to reduce the tax burden on small and large brewers and distilleries.  They have introduced the Craft Beverage Modernization Reform Act (H.R. 747) and Senate (S. 236).  This proposed tax reform would cut the excise taxes on small breweries while also providing tax relief for small vineyards, distilleries and larger breweries like SABMiller and Anheuser-Busch InBev.

In the past, small producers in the craft beer industry have looked to gain a competitive advantage over the large producers through lobbying efforts and vice versa.  This bill seeks to provide benefits for all sizes of producers to spur industry growth.  Currently, the craft beer industry is nearing a saturation point with the explosion of new craft breweries over the past 10 years.  Economists are skeptical that tax reform specific to this industry will generate substantial growth.

This bill currently has 46 Senate and 252 House co-sponsors and appears to be very close to having enough support to be passed.  It's too early to tell if this bill will be packaged as part of larger tax reform that has been promised by the Trump administration.

Specifically, this tax cut would reduce the excise tax on a small brewer's first 60,000 barrels to $3.50 per barrel from the current tax of $7 per barrel.  The tax on the next 1.94 million barrels would be reduced from $18 per barrel to $16 per barrel.  In addition, this bill would also reduce the per gallon tax from $13.50 to $2.70 on the first 100,000 gallons of distilled liquor and cut the taxes from $13.50 to $13.34 for the next 22.13 million gallons.  This could have a major impact on distillers.  While this bill is being sold as an economic boost for small brewers, it is projected the distilleries would receive $177 million in tax benefits, more than any other industry.

Stay tuned to see if this proposed law will be passed or become part of larger overall tax reform.  Who knows, maybe you will see the impact on your next bar tab, but I wouldn't bet a drink on it.

For more information, contact Schneider Downs or visit the Our Thoughts On blog.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at [email protected].

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2022 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on
An Introduction to Industry 4.0
Inflation Tracking and Cost Pass-through Analysis
Reshoring to Combat Global Supply Chain Disruptions
Automobile, Tax BY Steven Barber
LIFO Relief Update
Superfund Excise Taxes Are Back Under the Infrastructure Investment and Jobs Act Effective July 1, 2022
The Sting of Section 163(j) for Private Equity-Owned Companies
Register to receive our weekly newsletter with our most recent columns and insights.
Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us
contact us

This site uses cookies to ensure that we give you the best user experience. Cookies assist in navigation, analyzing traffic and in our marketing efforts as described in our Privacy Policy.

×