Senators Roy Blunt and Tammy Baldwin Introduce the Fair BEER Act
Senators Roy Blunt and Tammy Baldwin Introduce the Fair BEER Act

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Senators Roy Blunt and Tammy Baldwin Introduce the Fair BEER Act

December 3, 2014

Bipartisan Legislation Seeks Broad Reform of Federal Beer Tax

WASHINGTON, DC – The American beer industry welcomed the Senate introduction of bipartisan legislation to comprehensively reform the federal beer tax imposed on brewers and beer importers. The bill would remove barriers to growth in the industry, encouraging capital and workforce investment through simple, fair and broad reform.

Introduced by Sens. Roy Blunt (R-Mo.) and Tammy Baldwin (D-Wis.), the Fair Brewers Excise and Economic Relief Act of 2015 (Fair BEER Act) (S. 807) creates a graduated federal excise tax structure while maintaining a level playing field. Companion legislation was introduced in the U.S. House of Representatives on February 5 and currently has 40 bipartisan cosponsors.

“Missouri is home to small and large breweries that provide thousands of good-paying jobs across the state,” said Sen. Blunt. “This bipartisan bill will encourage investment and job growth to help families, workers, and communities across Missouri.”

“Our breweries are vital to our state’s Made In Wisconsin economy and our heritage,” said Sen. Baldwin. “Wisconsin beer makers not only brew famous lagers, they create jobs and spur investment in communities throughout the state. I am proud to support bipartisan legislation that will give Wisconsin businesses the ability to continue to thrive and hire more hardworking Wisconsinites.”

Under the Fair BEER Act, all brewers and beer importers would pay a graduated scale of federal beer excise tax:

  • No excise tax on the first 7,143 barrels;
  • $3.50/barrel on barrels 7,144-60,000;
  • $16/barrel on barrels 60,001-2 million; and
  • $18/barrel on every barrel above 2 million.

By imposing this “laddered” approach to all brewers and beer importers, the legislation reforms the overall tax structure to provide the greatest relief to the very smallest brewers. More than 90 percent of permitted brewers produce 7,143 barrels or less and would see their excise tax rates reduced from $7/barrel to zero. The 7,143 barrel threshold was designed to meet the definition of a “small brewer” set forth by the U.S. Department of Treasury’s Alcohol and Tobacco Tax and Trade Bureau (TTB), the agency which regulates the alcohol industry.

By applying comprehensive reform across brewers, the legislation removes barriers to growth. Under current law, small brewers are defined as those which produce up to 2 million barrels, and are taxed at $7/barrel on the first 60,000 barrels and $18 on every barrel thereafter. Current law imposes an $18/barrel federal beer tax on all suppliers of more than 2 million barrels annually.

“We deeply appreciate the support we received from lawmakers in the Senate to introduce this bill. The Fair BEER Act is important for reforming a hidden tax that most beer drinkers don’t even know they pay,” said Jim McGreevy, president and CEO of the Beer Institute, the nation’s leading trade association representing brewers, beer importers and industry suppliers. “This legislation is growing support on both sides of the aisle and in both houses of Congress because it offers fair reform of the federal beer tax, but it reaches that reform without completely changing the industry structure.”

By offering tax reform across the category, from pennies on the barrel for major suppliers to an $18/barrel tax break for the smallest brewers, the Fair BEER Act offers members of Congress an opportunity to support all brewers, from the smallest brewpubs to the biggest job creators. The Fair BEER Act also serves to fix a significant policy issue around trade by protecting small brewers from potentially losing their tax relief.

For more information, please visit www.BeerInstitute.org/beertax.

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The Beer Institute is a national trade association for the American brewing industry, representing both large and small brewers, as well as importers and industry suppliers. First founded in 1862 as the U.S. Brewers Association, the Beer Institute is committed today to the development of sound public policy and to the values of civic duty and personal responsibility: www.BeerInstitute.org. Connect with us @BeerInstitute and on Facebook.

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