Craft Beer Tax Reform

House Bill would lower excise tax for small brewers

HR 4278, a bill seeking to enact a graduated beer excise tax rate of $3.50 and $16 for America’s small brewers has been introduced on the floor of the U.S. House of Representatives by Congressman Richard Neal of Massachusetts.

With Congressman Kevin Brady of Texas as an original cosponsor, this bipartisan bill is the result of months of intensive effort on the part of these Members of Congress, many craft brewers and the Brewers Association to ensure American small brewers are given the best chance to remain strong and competitive.

Currently, a small brewer that produces less than 2 million barrels of beer per year is eligible to pay $7.00 per barrel on the first 60,000 barrels produced each year. Reducing this rate to $3.50 per barrel would provide approximately $15.5 million per year to help strengthen our nation’s smallest brewers and support their efforts to maintain and generate jobs.

Once production exceeds 60,000 barrels, a small brewer must pay the same $18 per barrel excise tax rate that the largest brewer pays at over 100 million barrels. Lowering the tax rate to $16 per barrel on beer production above 60,000 barrels up to 2 million barrels would provide small brewers with an additional $26.2 million per year that would be used to support significant long-term investments and create jobs by growing their businesses on a regional or national scale.

The small brewer tax rate was established in 1976 and has never been updated. Since then the annual production of America’s largest brewery increased from about 45 million to 107 million barrels. The ceiling defining small breweries is 2 million barrels. We support raising this ceiling to 6 million barrels to more accurately reflect the intent of the original differentiation between large and small brewers in the US.


  1. Sulfur says

    Well, you all seem to have it better than here! We pay $79.05 per Barrel here. Really! We are not in the same tax code as mainland brewers (even though part of the US), that’s why. I racked 30hl yesterday, and the tax bill in black and white was over $2000. Count the blessings you have 🙁 !

  2. gitchegumee says

    Hey Sulfur, on OUR island we don’t pay ANY beer tax. I haven’t seen or signed a tax form of any kind in ten years. The government understands that our brewery is one of (if not THE largest) manufacturing endeavors on-island and that we help keep the money here rather than shipping it off in exchange for a container of warm, outdated, yellow, fizzy megabrew from somewhere else. BTW, Don’t have label laws either.
    Anyway, back to this thread; what are the chances of this bill passing when it’s a net loss for the government? Wouldn’t it work better if the offset from less taxes on smaller brewers was paid for by a small increase on the largest brewers?

  3. Sulfur says

    G.G. you guys are lucky. For now. You know how politicians are, I’m sure at some point someone will come up with an idea to tax you. Enjoy while you can.

    Taxes are like weeds. If you don’t do anything they increase and take over. Good luck on the mainland.

  4. jason.koehler says

    Good luck US small breweries!

    The new government in Japan is considering abolishing the small tax break the little guys get here, which amounts to a 5% increase. It might not sound so bad, until you figure that the total tax rate comes out to something like $280 per barrel! 😮 It’s sad to see things moving in the opposite direction here…

  5. South County says

    Sulfur wrote: Taxes are like weeds. If you don’t do anything they increase and take over. Good luck on the mainland.

    Well said, and that is the issue here. If we have any chance of combating unnecessary increases in taxes, we should. As opposed to the sentiment “well were lucky we don’t live in X.” I’ll be damned if I roll over and except arbitrary taxes increases to cover yet another defunct fed program that is broke or suffering state budget. Yet all this gets justified because beer is “bad” and sin taxes are necessary because of our industries (and tobaccos..etc..) contribution to rising cost. Welcome to the welfare state where everything is free and there is no personal accountability.