ust days before the start of American Craft Beers Week, U.S. Senators Ben Cardin (D-MD) and Susan Collins (R-ME), have introduced a bill to stimulate regional economies nationwide with a reduction in the excise tax on each barrel of beer (one barrel is 31 gallons) brewed by small brewers. Joining as original cosponsors of the "Small BREW Act" (S. 917, The Small Brewer Reinvestment and Expanding Workforce Act) are Senators Tammy Baldwin (D-WI), Mark Begich (D-AK), Tom Carper (D-DE), Thad Cochran (R-MS), Chris Coons (D-DE), William Cowan (D-MA), Bob Menendez (D-NJ), Jeff Merkley (D-OR), Barbara A. Mikulski (D-MD), Rob Portman (R-OH), Bernie Sanders (I-VT), Charles Schumer (D-NY), Jon Tester (D-MT), Roger Wicker (R-MS), Ron Wyden (D-OR), and Angus King (I-ME).
Under current law, brewers generally pay an $18 excise tax on each barrel brewed. Small brewers, currently defined as 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 Cardin-Collins Small BREW Act would reduce the excise tax applicable to brewers producing up to 6 million barrels per year to just $3.50 on the first 60,000 barrels and $16 on additional barrels below 2 million per year.
"Small brewers have been anchors of local communities and America's economy since the start of our history. In addition to making high-quality beers, Maryland craft brewers like Flying Dog, Heavy Seas and Union Craft, Ruddy Duck, Baying Hound and Evolution create jobs and reinvest their profits back into their local economies," said Senator Cardin, a member of the Senate Finance and Small Business committees. "The federal government needs to be investing in industries that invest in America and create real jobs here at home. With more than 2,400 small and independent breweries currently operating in the US, now is the time to take meaningful action to help them and our economy grow."
"Maine is home to dozens of unique craft breweries and brewpubs that invigorate our economy by providing more than 1,000 jobs and drawing countless tourists into our state," Senator Collins said. "In meeting with brewers across Maine, they always make clear to me how federal tax policy affects their businesses. This bill, which I support, 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."
An economic impact study by Dr. John Friedman at Harvard University found that the bill would generate $183.1 million in economic activity in the first year and almost $1.04 billion over five years and would also create nearly 5,230 jobs in just the first year. Maryland is home to 29 craft brewers, with at least 24 more in the planning stages. Maine has 36 craft brewers, with at least a dozen more in the planning stages.
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.
"Alaska small brewers do more than help Alaskans thaw out over the long winter with their frosty brews: they create thousands of jobs and put millions of dollars back into our economy. Many businesses like the Alaskan Brewing Co. and the Midnight Sun Brewery have even proved to be cutting edge innovators with a commitment to energy efficiency," said Senator Begich. "I'm pleased to sponsor "The Small BREW Act" because Alaskans are proud of their local small breweries and we should be doing all we can to help them hop ahead like other small businesses."
"From Dogfish Head and Twin Lakes to Iron Hill and Fordham, among many more, small brewers are invigorating communities across Delaware, creating jobs and brewing unique products that are shipped across the country and enjoyed by millions of Americans," said Senator Carper, a member of the Senate Finance Committee. "The role of government is to create a nurturing environment for job creation, and a big part of that is ensuring that small businesses have a fair tax burden that helps them grow early, hire more workers and thrive for the long haul. This bill aims to do just that."
"Delaware's craft breweries are not only an important part of our state's economy, but its personality," Senator Coons said. "Craft breweries innately have a high potential for local growth and the Small BREW Act will help more of them fulfill that potential. Helping our small breweries grow and create more jobs in our communities in this targeted way is a smart investment."
"Maryland's small businesses are the backbone of our economy. They create jobs. And they are important to the communities they serve," said Senator Mikulski, a member of the Senate Small Brewers Caucus. "My great-grandparents owned a local bakery and my father ran a grocery store. I learned how small businesses help weave social fabric by hiring local workers and investing in their communities. By leveling the playing field for our small brewers, we will raise a glass to support small business jobs."
"Small breweries throughout New York and across the country not only brew great beer, they also pour jobs into communities across the country," said Senator Schumer. "Craft breweries are the crown jewels of so many of our communities, and often set up shop in vacant buildings and warehouses and revitalize downtowns across the country. By cutting taxes for these small breweries, we can help put more money back into their businesses and brew further economic development and growth."
"From Fat Jack's in Laurel to Blackfoot in Helena and Great Northern in Whitefish, Montana's small brewers are growing the Big Sky State's economy and creating new jobs," Senator Tester said. "Making it easier for our brewers to expand and build their businesses will double-down on their success and strengthen Montana's reputation for great-tasting beer and as the most beautiful place in the country to drink it."
"Whether talking about a small business creating the next innovation online or a microbrewery making the next great craft brew, the U.S. economy relies on the job creation and investments these businesses make in their communities," Senator Wyden said. "Oregon has long recognized the value of small craft breweries and the agriculture sector provides the raw ingredients for brewers in Oregon and across the country. Breweries in the state employ more than 6300 full and part-time employees and this legislation will make it easier for those intrepid entrepreneurs to grow, create more jobs and improve the economic conditions in their cities."
"Maine has an incredible array of small, independent craft brewers that deliver world-class products and stable jobs," Senator King said. "By reducing the tax burden on our brewers, this important piece of legislation will give them a vital boost and enable them to further invest in their businesses and our communities -- a winning combination that will create real jobs in Maine and across the nation."
American Craft Beer Week, May 13-19, is a weeklong celebration of America's small and independent craft brewers and their contributions to America's communities and our economy.