Beer Institute Survey: Majority of Consumers Support Federal Excise Tax Relief

A majority of Americans support extending federal excise tax cuts that were enacted as part of the Tax Cuts and Jobs Act in 2017, according to a survey commissioned by industry trade group the Beer Institute (BI).

“As lawmakers head back to Washington to close out the 116th Congress, a bipartisan majority of Americans agree members of Congress should make excise tax relief for the beer industry permanent,” BI president and CEO Jim McGreevy said in a press release issued today.

Under the current federal excise tax (FET) relief that was first passed in December 2017 and later included in a tax extension package and signed into law December 2019, domestic brewers producing fewer than 2 million barrels annually pay $3.50 per barrel on their first 60,000 barrels. Beer importers and domestic brewers producing more than 6 million barrels annually pay $16 per barrel on the first 6 million barrels and $18 per barrel after that.

Without tax relief, smaller brewers’ tax bill would double, as they would pay $7 per barrel, and larger brewers and importers $18 per barrel. The current extension is slated to sunset on December 31.

The survey of 1,000 adults older than 21 and conducted August 21-23 found that the majority of respondents from all political ideologies said they supported Congress making FET relief permanent: 66% of Republicans, 64% of Democrats, and 58% of independents.

“The COVID-19 pandemic has weighed heavily on our economy, including brewers and beer

importers who have faced significant economic losses from the closure of bars, restaurants,

taprooms, and sports venues,” McGreevy said in the release. “Making tax relief permanent will ensure brewers and beer importers have the long-term tax certainty to stay open, innovate, and reinvest in their businesses.”

The Craft Beverage Modernization and Tax Reform Act (CBMTRA), S. 362 and H.R. 1175, has been introduced in Congress with bipartisan support in both houses. In the Senate, it has been co-sponsored by 37 Republicans, 36 Democrats and one independent. In the House of Representatives, it has 178 Democratic co-sponsors and 168 Republican co-sponsors.

Both bills were introduced in their respective chambers in February 2019, but have not advanced beyond the Senate Finance Committee and the House Ways and Means Committee. However, language to extend FET relief was included in a larger tax relief package late last year.

If that temporary tax cut is not made permanent or extended, American brewers face tax increases of $154 million on January 1, 2021.

CBMTRA was introduced in the House by Reps. Ron Kind (D-WI) and Mike Kelly (R-PA) and in the Senate by Sens. Ron Wyden (D-OR) and Roy Blunt (R-MO).

In the same survey, the BI found that 72% of respondents supported the federal government investigating aluminum premiums. Like support for FET relief, a majority of each political ideological group supported further investigation of aluminum premiums — 81% of Democrats, 66% of Republicans, and 66% of Independents.

In the U.S., most aluminum is priced according to the Midwest Premium, the regional price for aluminum in the Midwest, set according to an independent assessment by S&P Global Platts.

After the COVID-19 pandemic shuttered bars, restaurants, taprooms and sporting venues, drinkers’ beer consumption habits shifted away from draft service and into packaged goods, causing a spike in the need for aluminum cans.

Last month, President Donald Trump ended Canada’s exemption on the aluminum tariff he enacted in 2018, which added 10% to the price of imported primary aluminum. Historically, the price of domestic aluminum rises to match the price of tariffed imported aluminum.

“Investigating the aluminum market will bring to light why brewers are paying a

tariff-price for recycled aluminum already in the United States,” McGreevy said in the release. “These two commonsense proposals enjoy broad support from Americans across the political spectrum, and we look forward to members of Congress passing them before the end of the year.”