CAPE MAY, N.J. — Cape May Brewing Company congratulates the bi-partisan New Jersey delegation to Congress on being one of the first states to sign on as co-sponsors of the Craft Beverage Modernization and Tax Reform Act (CBMTRA) of 2019 (H.R. 1175 and S. 362). The bill would make permanent the reduction in excise taxes on the brewing industry, first signed into law as part of the Tax Cut and Jobs Act of 2017, set to expire on December 31, 2019.
CBMTRA would retain the $3.50 per barrel rate for domestic breweries that produce less than two million barrels of beer per year and make permanent the tax rate of $16 per barrel rate on beer production above 60,000 barrels up to six million barrels per year. Any beer produced above six million barrels will remain subject to the $18/barrel rate.
“We’re glad to see that New Jersey’s delegation to Congress has signed on to support this common-sense legislation,” said Ryan Krill, CEO and co-owner of Cape May Brewing Company. “In the time that CBMTRA has been law, we’ve expanded from distributing to ten counties in New Jersey and five in Pennsylvania at the beginning of 2018 to delivering beer to all 21 counties in New Jersey and nine in Pennsylvania, nearly doubling our workforce in the process.
“We’d love to see that meteoric rise continue, and this reduction to our excise taxes will help.”
Taxes on beer account for 40% of the price paid by the consumer. Between state sales tax, state alcohol tax, federal excise tax, and various other taxes, nearly five ounces of a 12-ounce can of beer go directly to various governments. CBMTRA has helped to alleviate that.
In 2018, the reduction in excise tax saved New Jersey’s breweries over $500,000, enabling reinvestment in these small businesses across the state, stimulating local economies. Nationwide, breweries both large and small are expected to save over $142 million, with more than half that savings — over $80 million — realized by the small and independent brewers under the six million barrel limit.
Nationally, those small and independent brewers employ over 150,000 full- and part-time employees, generating more than $3 billion in wages and benefits. In 2018, New Jersey’s 109 breweries were responsible for an employment impact of nearly 11,000 jobs, adding $1.6 billion to the state’s economy.
“America’s small and independent craft brewers are thrilled to see such strong bipartisan support for the Craft Beverage Modernization and Tax Reform Act from New Jersey’s federally-elected officials,” said Bob Pease, president and CEO of the Brewers Association. “The craft brewing industry is an important economic driver in New Jersey, contributing 10,948 jobs and more than $1.6 billion to the state economy. We are grateful for the support from the entire New Jersey delegation and hope to see this important legislation made permanent in 2019.”
Since the reduction of excise taxes was made law, 73% of craft breweries nationwide are purchasing new equipment or upgrading their tasting rooms and breweries, 53% are hiring new employees, 39% are increasing their employee benefits by raising pay, offering insurance and expanding vacation time, and 21% are increasing their charitable contributions, with 58% of craft breweries nationwide doing two or more of those things.
“I am proud to cosponsor the Craft Beverage Modernization and Tax Reform Act to provide tax relief to small, independent brewers like Cape May Brewery, support craft breweries across New Jersey, and help spur economic growth and create jobs,” said U.S. Senator Bob Menendez. “New Jersey’s 109 craft breweries support nearly 11,000 jobs and are primed for growth. That’s why I led a bipartisan Congressional Task Force that recommended the Craft Beverage Modernization and Tax Reform Act be signed into law so we can unlock the state’s burgeoning craft beverage industry’s full potential by reducing the excise tax, providing regulatory relief and ending tax uncertainty for small businesses.”
Congressman Jeff Van Drew (D-2) agrees. A Cape May County native, he’s thrilled to see so many breweries opening in his district.
“It’s exciting,” says Congressman Jeff Van Drew. “It’s exciting to see the opportunity for new — very often young — entrepreneurs who can express their entrepreneurial abilities and are also able to express their individual art. It’s a special thing, a craft brewery because it allows you to really express all of the different kinds of brews and beers. It’s an exciting, fun, economically advantageous enterprise that fits particularly well in South Jersey because we have so much tourism and so much that’s related to the outdoors. We want to make sure that economic engine keeps moving, and one way to do that is through legislation like this where you reduce the tax burden and you incentivize the actual business itself and encourage it to grow and to expand. This is the kind of legislation I like to see.”
Statewide, over 160 new jobs have been created within the craft brewing industry between 2017 and 2018. Each time a new job is added by craft brewers, it supports 7.4 jobs throughout New Jersey in associated industries. In all, New Jersey’s brewing industry as a whole, including macrobrewing, supports more than 45,000 jobs in New Jersey.
“As a New Jersey native, I couldn’t be prouder that our entire delegation supports important, bipartisan legislation that recognizes the critical role breweries play in America’s economy,” said Jim McGreevy, President and CEO of the Beer Institute, a nationwide organization representing the interests of brewers both large and small. “The beer industry supports 2.1 million good-paying U.S. jobs, including more than 45,000 in New Jersey. Ensuring all brewers and beer importers can continue to count on federal excise tax relief is key to making sure our nation’s more than 7,000 active brewers continue to thrive, innovate and provide Americans with more varieties and styles of beer — our nation’s most popular alcohol beverage.”
Currently, CMBTRA has 288 cosponsors from 48 states in the House and 70 cosponsors in 44 states in the Senate, a supermajority in both houses, making this legislation a surefire win should it come up for a vote.
As part of his continued advocacy, next week, CMBC CEO and co-owner Ryan Krill will participate in the Beer Institute’s annual Hill Climb, an effort to further persuade New Jersey’s congressional delegation to support legislation germane to the brewing industry.
For more information on Cape May Brewing Company, including for tours and tastings, see their website at capemaybrewery.com, or call (609) 849-9933.
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About Cape May Brewing Company:
Once upon a time, 20-something Ryan Krill earned a six-figure salary working in finance and real estate development in Manhattan, while his college roommate, Chris Henke, designed commercial satellites. During a summer weekend at the Jersey shore, they brewed a batch of beer with Ryan’s dad. “Should we open a brewery?” Ryan asked, only half-serious. But, by the following year, the three guys had secured a space at Cape May Airport where they concocted a makeshift brew system and honed their beer-making skills. In 2011, they started with one client. Today, there are hundreds of accounts in New Jersey and Pennsylvania proudly serving the guys’ award-winning recipes. And CMBC’s fearless leaders have never looked back.