Posted on Dec 20, 2017
Congress passes historic tax reform for small brewers

The 115th Congress passed the provisions of the Craft Beverage Modernization and Tax Reform Act (CBMTRA), which lowers the federal excise tax for breweries, on December 20, 2017.

Under the bill, the federal excise tax will be reduced to $3.50/barrel (from $7/barrel) on the first 60,000 barrels for domestic brewers producing less than 2 million barrels annually, and reduced to $16/barrel (from $18/barrel) on the first 6 million barrels for all other brewers and all beer importers. The bill would maintain the current $18/barrel rate for barrelage over 6 million. The savings will allow Alabama’s 34 small brewers, all manufacturers and entrepreneurs, to reinvest in their businesses, expand their operations and hire more workers. The legislation is currently written as a 2-year provision.

The effort to bring meaningful federal excise tax relief to small brewers has been a primary political objective for the Brewers Association and the Alabama Brewers Guild for almost 10 years.

“Brewers from across Alabama worked tireless over the years to join the Brewers Association on Capitol Hill climbs and district meetings to emphasize the importance of this legislation and how it will help stimulate economic growth across Alabama,” said Dan Roberts, executive director of the Alabama Brewers Guild.

“Our expectation is that small brewers will use their savings related to the recalibration of the federal excise tax on beer to invest in their breweries, expand their operations, create more jobs and hire more American workers,” said Bob Pease, president and CEO, Brewers Association. “We are very appreciative that Congress has enacted these bipartisan, strongly supported measures.”

“Like many small business brewers, we strive to meet consumer demand for our products and be a great place to work for our employees,” said James Foley, managing partner at Fairhope Brewing Co. “This is a welcome relief that will enable us to invest in our team and grow our production. We are currently considering a 12% capacity expansion as a direct result of this news.”

Currently, craft brewing contributes $616 million to the Alabama economy according to the Brewers Association.

We would like to thank Senator Luther Strange and Representatives Mo Brooks, Bradley Byrne, Martha Roby, and Mike Rogers for joining 54 Senate and 303 House colleagues as co-sponsors of this bill. Their support will help Alabama’s 34 small and independent brewers continue to grow and thrive.