The Majority of US Senators Now Endorse Beer Excise Tax Reform

A majority of U.S. Senate members now support legislation that would reduce excise taxes on all brewers and importers.

According to a press release jointly produced by six beverage lobbying groups, including the Beer Institute and the Brewers Association, 51 senators have co-sponsored Senate Bill 236, known as the Craft Beverage Modernization and Tax Reform Act (CBMTRA).

The legislation, which was introduced into the Senate on January 30 by Ron Wyden (D-OR) and Roy Blunt (R-MO), also has majority support from 281 members of the U.S. House of Representatives who have backed a companion bill (H.R. 747).

“Beer is bipartisan, and I want to thank the broad coalition of Senators and House members from across the country for supporting this commonsense legislation that will provide critical tax relief to America’s brewers and beer importers,” Jim McGreevy, the CEO of the Beer Institute, which represents the interests of all brewers, importers and supply industries, said via a press release.

“I look forward to Congress taking up the bill and moving it to President Trump for his signature so that brewers and beer importers can continue to invest in their businesses to meet consumers’ demand for beer,” he added.

According to McGreevy, the reform effort, which would cut the federal excise tax to $3.50 per barrel (currently $7) on the first 60,000 barrels for domestic brewers making fewer than 2 million barrels annually, is on the verge of adding a “few more” Senate co-sponsors in the coming weeks.

“We continue to hear from leaders and President Trump that comprehensive tax reform will be done before the end of the year,” he told Brewbound. “We are planning for that to happen, and we want people to understand that we should be a part of it.”

The CBMTRA would also cut the federal excise tax to $16 per barrel on the first 6 million barrels for all other brewers and all beer importers while maintaining the $18 per barrel excise tax for brewers producing more than 6 million barrels.

“We are small Main Street manufacturers located in virtually every Congressional District in the country, and employing more than 130,000 Americans,” Brewers Association CEO Bob Pease said via the release. “We truly are an American success story built on the passion that our small brewers have for their craft and their communities. Members of Congress see that passion, determination, and success, and want to foster it.”

As Brewbound has previously reported, attempts to pass CBMTRA fell short in 2015 and 2016, but not before garnering support from 289 Republican and Democratic co-sponsors in the House and 52 bipartisan co-sponsors in the Senate.

One potential challenge to securing additional support from congressional members, however, could be the continued belief that the beer industry is not united.

Earlier this week, the BA launched a divisive media campaign that attacked the category’s largest player, Anheuser-Busch InBev.

According to McGreevy, who described the so-called “Take Craft Back” campaign as a “gimmick,” it is more difficult to convince House and Senate members that brewers are “serious about trying to work together” when the industry is divided.

“It’s disappointing,” he said of the BA’s initiative, noting that legislators and aides on Capitol Hill are “aware” of the campaign. “I think it was a gimmick that doesn’t advance the category of beer in the marketplace or in politics.”

In addition to the BA and BI, other backers of CBMTRA include the Distilled Spirits Council of the United States (DISCUS), American Craft Spirits Association, Wine America and the Wine Institute; the legislation also includes excise tax reductions for certain wine and spirits products.

As for CBMTRA’s chances of passing, McGreevy said he was hopeful that the findings of the recent “Beer Serves America” study, which was jointly commissioned by the BI and the National Beer Wholesalers Association (NBWA), would help sway Congress.

“We see in our work on ‘the hill,’ and with opinion leaders, that economic contribution is singularly important,” he told Brewbound. “Industry trade groups telling that story is important, not just as a sector, but altogether, which is what the Beer Serves America survey does.”

According to that study, the U.S. beer industry was responsible for creating more than 2.23 million jobs that paid a combined $103.3 billion in wages and benefits in 2016.

“People understand how beer is helping the economies in their district, in their state, and across the nation,” McGreevy added.

In a press release, the Brewers Association also shared comments from six U.S. craft brewers who advocated for the passage of CBMTRA. Those quotes, along with the release itself, have been included below.

Brewers Association, Beer Institute, Distilled Spirits Council of the United States, American Craft Spirits Association, Wine Institute and WineAmerica praise majority support in both House and Senate for Craft Beverage Modernization and Tax Reform Act

WASHINGTON, DC — Leaders of the Beer Institute, Brewers Association, Distilled Spirits Council of the United States, American Craft Spirits Association, Wine Institute and WineAmerica released the following statement after Senator Jim Inhofe (R-Oklahoma) became the 51st member of the United States Senate to officially endorse the Craft Beverage Modernization and Tax Reform Act (S. 236). Senator Inhofe co-sponsoring the bill means that now a majority of members from both the House of Representatives and United States Senate support this legislation.

“Beer is bipartisan, and I want to thank the broad coalition of Senators and House members from across the country for supporting this common-sense legislation that will provide critical tax relief to America’s brewers and beer importers,” said Jim McGreevy, President and CEO of the Beer Institute, which represents brewers, beer importers and supply industries. “The beer industry helps to support more than 2.2 million American jobs in every congressional district across the country. I look forward to Congress taking up the bill and moving it to President Trump for his signature so that brewers and beer importers can continue to invest in their businesses to meet consumers’ demand for beer.”

“America’s small craft brewers are incredibly proud and appreciative of the strong bipartisan and bicameral support that we have received from the United States Congress,” said Bob Pease, President and CEO of the Brewers Association. “We are small Main Street manufacturers located in virtually every Congressional District in the country, and employing more than 130,000 Americans. We truly are an American success story built on the passion that our small brewers have for their craft and their communities. Members of Congress see that passion, determination and success, and want to foster it. That is why more than half the United States Congress has co-sponsored the Craft Beverage Modernization and Tax Reform Act. We are hopeful that this consensus legislation can be enacted this year.”

“As the distilling sector continues its growth with more than 1,200 operating distilleries nationwide, lawmakers clearly appreciate the important role these distilleries play in creating jobs, boosting tourism and supporting agriculture,” said Distilled Spirits Council President & CEO Kraig R. Naasz. “Passing this much-needed tax reform legislation will spur further investment and job creation by reducing the excessive tax burden on distillers small and large.”“California wine is a signature industry for our state and nation. This legislation will simplify and reduce the tax burden on our 4,700 wineries, which produce 85% of U.S. wine,” said Robert P. (Bobby) Koch, President and CEO of Wine Institute. “As the very epitome of value-added agriculture, wine and vineyards represent a long-term commitment uniquely tied to the land, generating jobs, tax revenue, trade, tourism and international appeal.”

“Wine is truly an all-American beverage produced in all 50 states. There are now more than 10,000 wineries with grapes from over 670,000 acres preserving precious agricultural land, The American wine industry’s total economic impact of nearly $220 billion includes 1.7 million jobs and $75 billion in wages,” said Jim Trezise, President of WineAmerica, the national association of American wineries. “We are grateful that so many Senators see wine as an economic engine as well as a delightful beverage that enhances the quality of life.”

Introduced by Senators Ron Wyden (D-OR) and Roy Blunt (R-MO) in January, the bipartisan legislation creates a fair and equitable tax structure for brewers, winemakers, distillers and importers of all beverage alcohol, which will allow them to continue to invest in their businesses and grow jobs across the country.

H.R. 747, identical legislation introduced in the U.S. House of Representatives by Representatives Erik Paulsen (R-MN) and Ron Kind (D-WI), has also garnered 281 co-sponsors from both sides of the aisle.

Craft brewers across the country are enthusiastic about the legislation:

“At around 1,000 barrels projected for 2018, on the surface, tax reform for a company our size doesn’t seem like such a big deal. However, that assumption could not be farther from the truth. Tax reform initiatives like CBMTRA directly impact the workable cash flow that allows for small producers like us to build infrastructure. Expanding infrastructure is essential to growth and job creation. Small breweries like ours are providing jobs, supporting families, and building an American industry to replace those that have dried up. It’s cyclical. The tax savings help us purchase more equipment while creating more manufacturing jobs. Additional labor and equipment allow us to create more beer. Creating more beer requires more positions to aid in sales of the product. Ultimately, more sales equate to additional tax revenues. When it comes down to it, the abilities that breweries have been afforded with recent legislative changes concerning the brewing industry and tax relief have opened up vehicles for growth. It has allowed us to have a higher cash flow that is immediately reinvested into the business. By continuing tax relief efforts, breweries like Zeroday can continue to grow and help support the people and places they employ and populate.” – Brandalynn Armstrong, Zeroday Brewing Co. Harrisburg PADouble digit annual growth, keeps us in a constant state of hiring and production/ construction. Relief from bi- weekly debt of over $100,000 would result in additional hiring, bricks and mortar construction, environmental improvements and economic stability for this growing business. 60 million dollars of impact in this rural struggling region is important.”– Deb Carey, New Glarus Brewing, New Glarus WI “With the CBMTRA’s reduction in federal excise tax, we would offer a combination of pay increases, job creation and increased innovation in our beer program, which would sell more beer and grow our company.”– Leah Wong Ashburn, Highland Brewing Company, Asheville NC