This is important, and time is running out. Craft breweries are getting crushed during the pandemic. Many are hanging on by a government PPP string. The Denver Post recently reported that at least 170 independent craft breweries closed during the first half of 2020. The number is likely to be much larger at present. Most of these small businesses are in a bad way. The government needs to get off its rear to help out.
In 2017, Congress provided a temporary reduction in federal excise taxes on beer through the Tax Cuts and Jobs Act (specifically the Craft Beverage Modernization and Tax Reform Act (S. 362/H.R. 1175)). What did these reductions mean? It reduced the federal excise tax for breweries producing fewer than 2 million barrels annually from $7.50 to $3.50 per barrel for the first 60,000 barrels. By the way, this grouping encompasses the vast majority of 8000+ independent craft breweries in the U.S. It did some other stuff too, but those benefits were for gargantuan mega breweries and importers so not the focus here. Especially during COVID and the serious decline in sales for independent breweries, this $4.00 savings per barrel is extremely important.
What’s the problem? The Act is set to expire on December 31, 2020. If Congress does not act, independent breweries (more than 2000 have opened since the Act went into effect) will see their taxes essentially double. Really? At a time like this? Frankly, many independent breweries simply can’t take the hit and will have to close up shop.
It doesn’t matter if you don’t like beer. I bet you like jobs. According to the Brewers Association, craft beer provided 580,000 jobs in the US in 2019. While that number has certainly shrunk since the 2019 stats came in. We should all want to stop the bleeding of breweries and their half-million plus jobs.
And it’s not like it’s controversial. The Beer Institute provides that the Act had largely bipartisan support in both the Senate and the House. 340 members of the House and nearly three quarters of the Senate to be specific. We should push Congress to extend the Act to allow breweries to invest in their survival through COVID, to allow brewery employees to remain gainfully employed, and to allow us hangers on to drink their fine products. If there has to be a fight about it, please, lawmakers, make it after the pandemic. Now get to work.
Let your representatives know that you care about your local breweries and that you support extending the Craft Beverage Modernization and Tax Reform Act. They’ll be too busy bickering, I’m sure. But being heard is a start.
Cheers. And let me know what you think.