The Craft Beverage Modernization and Tax Reform Act (CBMTRA) has been reintroduced in the U.S. House of Representatives. The legislation would make permanent the tax and other provisions passed as part of the Tax Cut and Jobs Act which was signed into law in the closing days of 2017 on a temporary, two-year basis. If the current legislation fails, brewers will revert back to the excise tax levels prior to 2018.
The legislation was first introduced in 2015 to recalibrate federal excise taxes and streamline regulations on alcohol beverage producers enjoyed broad support in the 115th legislative session with more than half the U.S. Congress (303 representatives and 56 senators) supporting the bill. Legislation that included a two-year provision of the language from CBMTRA was passed in December 2017 and is set to expire on December 2019. The current bill was re-introduced to make the current federal excise rate language permanent. If the legislation fails, brewers will revert back to paying federal excise tax at previous levels.
Specific tax provisions relating to beer include: reducing the federal excise tax to $3.50 per barrel on the first 60,000 barrels for domestic brewers producing fewer than 2 million barrels annually; reducing the federal excise tax to $16 per barrel on the first 6 million barrels for all other brewers and all beer importers; keeping the excise tax at the current $18 per barrel rate for barrelage over 6 million. Additional provisions address the transfer of beer between breweries and expanding the list of ingredients considered traditional in the production of fermented beverages.