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.