U.S. Senators Tom Carper and Chris Coons (both D-Del.) cosponsored legislation introduced Thursday to help Delaware's small breweries grow and create jobs. The Small Brewer Reinvestment and Expanding Workforce Act, or Small BREW Act, would reduce the excise tax on each barrel of beer brewed by small brewers.
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 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.
"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," Senator Carper, a member of the Senate Finance Committee, said. "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."
An economic impact study by Dr. John Friedman at Harvard University found that the bill would generate $153 million in economic activity in the first year and almost $865 million over five years and create nearly 4,400 jobs in just the first year.
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.
The Small BREW Act was introduced by Senators Ben Cardin (D-Md.) and Susan Collins (R-Maine.), cosponsored by -- in addition to Senators Carper and Coons -- Senators Tammy Baldwin (D-Wis.), Mark Begich (D-Alaska), Thad Cochran (R-Miss.), Mo Cowan (D-Mass.), Bob Menendez (D-N.J.), Jeff Merkley (D-Ore.), Barbara A. Mikulski (D-Md.), Rob Portman (R-Ohio), Bernie Sanders (I-Vt.), Charles Schumer (D-N.Y.), Jon Tester (D-Mont.), Roger Wicker (R-Miss.) and Ron Wyden (D-Ore.).
Senators Carper and Coons also cosponsored the bill in the last Congress, then known as the Brewer's Employment and Excise Relief Act.
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.