Small Brewery Tax Bill Would Create Jobs, Open Markets

Washington, D.C.  - Senators Mike Crapo (R-Idaho) and John Kerry (D-Massachusetts) today introduced legislation to reduce the beer excise tax for America's small brewers. The Brewer's Employment and Excise Relief (BEER) Act will help create jobs at more than 1,600 small breweries nationwide, which collectively employ nearly 100,000 people. Idaho and Massachusetts are home to dozens of small breweries. 

"Like any private business, craft brewing is all about supply and demand," said Crapo. "In touring Idaho last year, I met with many craft brewers who are seeking to expand their business because they are seeing increased demand for their product.  In addition, this legislation will expand the ready markets for our barley, wheat and hops producers in Idaho.  I remain optimistic this bill will pass this year to create new jobs and new markets." 

"The craft beer revolution started right here in Massachusetts and they've been going toe to toe with multi-national beer companies ever since," said Kerry. "This bill will help ensure that these small businesses keep people on the payroll and create jobs even during tight economic times." 

Because of differences in economies of scale, small brewers have higher costs for production, raw materials, packaging and market entry than larger, well-established multi-national competitors. The BEER Act also helps states that produce barley, hops and other ingredients used by these small brewers. In addition to Senators Crapo and Kerry, the legislation is co-sponsored by a bipartisan coalition of 16 additional Senators. 

Currently, a small brewer that produces less than two million barrels of beer per year is eligible to pay $7.00 per barrel on the first 60,000 barrels produced each year.  This legislation will reduce this rate to $3.50 per barrel, giving our nation's smallest brewers approximately $19.9 million per year to expand and generate jobs.  This change helps approximately 1,525 breweries nationwide.

Currently, once production exceeds 60,000 barrels, a small brewer must pay the same $18 per barrel excise tax rate that the largest brewer pays while producing more than 100 million barrels.  This legislation will lower the tax rate to $16 per barrel on beer production above 60,000 barrels, up to two million barrels, providing small brewers with an additional $27.1 million per year that can be used to support significant long-term investments and create jobs by growing their businesses on a regional or national scale.

The small brewer tax rate was established in 1976 and has never been updated.  This legislation would update the ceiling defining small breweries by increasing it from two million barrels to six million barrels.  Raising the ceiling to six million barrels more accurately reflects the intent of the original differentiation between large and small brewers in the U.S.