Pitting Big Beer Against Small Beer, The Beer Act vs. The Small BREW Act

There are two big bills happening in Congress, both of which are aimed at readjusting the beer excise tax, a tax which hasn’t been adjusted in over 22 years. The issue, Mike LaCouture of Broken Goblet Brewery said, is that its “pitting big beer against small beer.”

It’s an issue that will not only impact local breweries like Broken Goblet and Neshaminy Creek, but the local economy as well.

According to a study by the Beer Institute and the National Beer Wholesalers Association, the beer industry alone is responsible for roughly 2 million American jobs and $40 million in revenue across the federal, state and local levels.

“There are two things happening here – The BEER Act and The Small BREW Act. I have mixed feelings regarding whether ‘big beer’ should get massive tax cuts, but I wholeheartedly support the cuts in excise tax for the smaller guys, especially the start-ups like us,” said LaCouture.

LaCouture and and his three buddies are responsible for opening Broken Goblet Brewery in Bristol over the summer. It’s trendy and cutting-edge atmosphere is paying off, LaCouture said they can’t keep the beer stocked enough to be open to the public more often. Read their story here.

Truth is though, big beer and small beer will fight in Congress, and the outcome may determine who will weather the storm.

The BEER Act, or the Brewers Excise and Economic Relief Act of 2013, would reduce the federal excise tax on beer for all brewers and importers. Under the act, small brewers would pay no federal excise tax on the first 15,000 barrels; small brewers would pay $3.50 on bbls 15,001 to 60,000, $9 per bbl for every barrel over $60,000 and up to 2 million bbls. Brewers producing more than 2 million bbls annually, and for all beer importers regardless of size, the federal excise tax rate would be $9 per barrel.

The Small BREW Act takes a different spin on the matter because it is backed by the Brewers Association, a supporter of craft and small scale breweries across America.

Under current federal law, brewers who make less than 2 million bbls annually pay $7 per barrel on the first 60,000 bbls they produce and $18 per bbl on every barrel thereafter. The new Small BREW Act, in an effort to support the evolution of small, local, craft breweries adjusts the rate so that the smallest brewers and brewpubs would only pay $3.50 on the first 60,000 bbls.

“Cutting [the excise] tax in half means jobs. Right now, we are pumping everything back into the brewery. If we could save on some of the tax, we could put that into some form of payroll. The more payroll we can carry, the more beer we can make and the more expansion we can enjoy, which in turn gets us more savings on the taxes,” said LaCouture. “It’s a win-win. But excise taxes are just one of the many hurdles we, and our comrades, have faced and will continue to face.”