USA: Beer excise tax reform now endorsed by majority of US senators

A majority of U.S. Senate members now support legislation that would reduce excise taxes on all brewers and importers, Brewbound reported on October 20.

According to a press release jointly produced by six beverage lobbying groups, including the Beer Institute and the Brewers Association, 51 senators have co-sponsored Senate Bill 236, known as the Craft Beverage Modernization and Tax Reform Act (CBMTRA).

The legislation, which was introduced into the Senate on January 30 by Ron Wyden (D-OR) and Roy Blunt (R-MO), also has majority support from 281 members of the U.S. House of Representatives who have backed a companion bill (H.R. 747).

“Beer is bipartisan, and I want to thank the broad coalition of Senators and House members from across the country for supporting this commonsense legislation that will provide critical tax relief to America’s brewers and beer importers,” Jim McGreevy, the CEO of the Beer Institute, which represents the interests of all brewers, importers and supply industries, said via a press release.

“I look forward to Congress taking up the bill and moving it to President Trump for his signature so that brewers and beer importers can continue to invest in their businesses to meet consumers’ demand for beer,” he added.

According to McGreevy, the reform effort, which would cut the federal excise tax to $3.50 per barrel (currently $7) on the first 60,000 barrels for domestic brewers making fewer than 2 million barrels annually, is on the verge of adding a “few more” Senate co-sponsors in the coming weeks.

“We continue to hear from leaders and President Trump that comprehensive tax reform will be done before the end of the year,” he told Brewbound. “We are planning for that to happen, and we want people to understand that we should be a part of it.”

The CBMTRA would also cut the federal excise tax to $16 per barrel on the first 6 million barrels for all other brewers and all beer importers while maintaining the $18 per barrel excise tax for brewers producing more than 6 million barrels.

“We are small Main Street manufacturers located in virtually every Congressional District in the country, and employing more than 130,000 Americans,” Brewers Association CEO Bob Pease said via the release. “We truly are an American success story built on the passion that our small brewers have for their craft and their communities. Members of Congress see that passion, determination, and success, and want to foster it.”

As Brewbound has previously reported, attempts to pass CBMTRA fell short in 2015 and 2016, but not before garnering support from 289 Republican and Democratic co-sponsors in the House and 52 bipartisan co-sponsors in the Senate.

One potential challenge to securing additional support from congressional members, however, could be the continued belief that the beer industry is not united.

Earlier this week, the BA launched a divisive media campaign that attacked the category’s largest player, Anheuser-Busch InBev.

According to McGreevy, who described the so-called “Take Craft Back” campaign as a “gimmick,” it is more difficult to convince House and Senate members that brewers are “serious about trying to work together” when the industry is divided.

“It’s disappointing,” he said of the BA’s initiative, noting that legislators and aides on Capitol Hill are “aware” of the campaign. “I think it was a gimmick that doesn’t advance the category of beer in the marketplace or in politics.”

In addition to the BA and BI, other backers of CBMTRA include the Distilled Spirits Council of the United States (DISCUS), American Craft Spirits Association, Wine America and the Wine Institute; the legislation also includes excise tax reductions for certain wine and spirits products.

As for CBMTRA’s chances of passing, McGreevy said he was hopeful that the findings of the recent “Beer Serves America” study, which was jointly commissioned by the BI and the National Beer Wholesalers Association (NBWA), would help sway Congress.

“We see in our work on ‘the hill,’ and with opinion leaders, that economic contribution is singularly important,” he told Brewbound. “Industry trade groups telling that story is important, not just as a sector, but altogether, which is what the Beer Serves America survey does.”

According to that study, the U.S. beer industry was responsible for creating more than 2.23 million jobs that paid a combined $103.3 billion in wages and benefits in 2016.

“People understand how beer is helping the economies in their district, in their state, and across the nation,” McGreevy added.

In a press release, the Brewers Association also shared comments from six U.S. craft brewers who advocated for the passage of CBMTRA. Those quotes, along with the release itself, have been included below.

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