USA: Brewers attempting to ease beer tax

Tim Herzog, president of Flying Bison Brewing Co., is one of hundreds of independent brewers and distributors expected to participate in the annual lobbying effort to revoke the excise tax. Herzog will make the long drive to Washington, D.C., May 8 to try to convince lawmakers to give his business a break, Buffalo’s Business First issued in May 08.

The federal excise tax was created during the Civil War to support the Union Army, with brewers paying a tax for each barrel of beer sold. Lawmakers made changes in 1990, increasing taxes on luxury items and beer. For large brewers, the beer excise tax doubled from $9 to $18 per barrel. In the years since, most of the luxury tax increases have been repealed, but the beer excise tax remains.

"It was taken off for luxury cars, luxury boats and items like fur coats, but was never taken off beer," Herzog said.

How much of an impact does the tax have on brewers? As a small brewer, Herzog pays $7.50 per barrel or $3.75 per keg. That's in addition to the state tax and sales tax.

"Most people don't realize about 40 percent of the cost of a glass or bottle of beer is tax," he said. "Beer is taxed three times before it gets into the hands of the consumer."

In Washington, Herzog and other small brewers and distributors - including Lancaster-based Try-It Distributing - will meet with lawmakers in an effort to show how those taxes hurt his business. Getting involved, he said, is the only way to try to push for a change. Herzog is also pushing the issue as a board member for the New York State Brewers Association and the government affairs committee for the Federal Brewers Association.

"There's an old saying: 'If you're in small business and not involved in government, then the government will be involved in your small business,'" he said.

For all the lobbying, the trip to Washington also gives Herzog a chance to get Flying Bison's beer into the hands of distributors from across the country. Herzog is driving down so he can bring some product with him for the conference receptions.

Flying Bison has been producing beer since 2000, operating from a 7,000-square-foot warehouse site in Riverside. The business has five employees and distributes its product in upstate New York, Boston, Philadelphia and Long Island.