Dear Member of Congress:
On behalf of the362,000 members of the National Taxpayers Union (NTU), I urge you to supportthe Brewer’s Employment and Excise Relief (BEER) Act. Introduced as S. 534 bySen. Kerry (D-MA) and Sen. Crapo (R-ID) and as H.R. 1236 by Rep. Gerlach (R-PA)and Rep. Neal (D-MA), this bill would lower the excise tax on small brewers inorder to create jobs and economic growth.
Despite theunintelligible system of overlapping taxes, fees, and regulations imposed atthe local, state, and federal levels, the brewing industry has seen astonishinggrowth over the past 40 years. In 1970 there were fewer than 100 breweries inthe United States. Today, there are more than 1,700 small breweries, employingnearly 100,000 workers. While the industry has rapidly evolved, federal tax lawshave not developed with it. Currently, small brewers, defined as those that producefewer than 2 million barrels per year, pay a federal excise tax of $7 perbarrel on the first 60,000 barrels produced. Once that low threshold isreached, all brewers, regardless of size, pay an onerous $18 tax per barrel.These provisions serve as disincentives for small brewers to invest for futureexpansion.
The BEER Act establishesa new excise schedule for small brewers that would reduce the tax rate on thefirst 60,000 barrels a firm produces to $3.50 and institute a $16 levy onsubsequent amounts, up to 2 million barrels. Furthermore, the legislation broadenseligibility for these reduced rates by revising the antiquated definition ofsmall brewer. The bill would raise the production ceiling for the small brewerclassification from 2 million barrels in annual output to 6 million barrels.Although NTU would prefer doing away with this distinction entirely, andremains committed to providing a fair tax shake for all participants in thealcoholic beverage industry, the legislation represents a positive step toward easingthe harsh regulatory and tax regimes imposed on American brewers.
These smallchanges could have a considerable impact on economy growth. Despite accountingfor just 5 percent of the total beer sold nationwide, craft brewers represent50 percent of the brewery jobs and deliver an outsized down-the-line benefitfor agricultural, manufacturing, hospitality, and other crucial industries.According to a study conducted by John Friedman of Harvard University, passingthe BEER Act could increase economic activity by $115.6 million and generatemore than 2,700 new jobs in just its first year.
With the economysputtering, the BEER Act would be a valuable demonstration of Congress’willingness to lighten government’s often-stifling gripon the business development necessary for a lasting recovery. For that reason,NTU encourages you to support the Brewer’s Employment and Excise Relief Act andany roll call votes will be significantly weighted in our annual Rating of Congress.
Sincerely,
Brandon GreifeFederalGovernment Affairs Manager108 North AlfredStreet Ø Alexandria, Virginia 22314 Ø Phone: (703) 683-5700 Ø Fax: (703) 683-5722 Ø Web: www.ntu.org