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house Bill H.R. 232

Should Small Beer Brewers Get A Tax Break?

Argument in favor

Small breweries are the fastest growing arm of the U.S. beer industry and reducing excise taxes will help producers and consumers alike.

bart's Opinion
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02/12/2015
Taxes on alcoholic beverages are suprisingly high (with some precedent). These same taxes make it particularly difficult for small brewers to get into business in the first place. Let's give them a break, so they can get started and we can enjoy their product.
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EricRevell's Opinion
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02/23/2015
Lower taxes on beer production → Less overhead for producers → Cheaper beer for consumers.
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Richard's Opinion
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11/28/2016
Small businesses + tax break = increased competition, bigger pie for everyone, lots of tasty beer
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Argument opposed

Losing tax revenue for the federal government aside, why doesn’t this tax cut apply to all brewers — small and large?

Stephen's Opinion
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05/26/2015
No, we don't need to make the tax code more complicated. Instead, the excise tax on beer should be repealed completely.
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Mark's Opinion
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02/26/2016
This amounts to a subsidy. Subsidies are abhorrent.
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Curmudgeon's Opinion
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07/02/2015
Again we are discussing doing more of the anti constitutional business of picking winners and losers.
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What is House Bill H.R. 232?

This bill would change the tax code to lower the amount of excise tax levied on small breweries. How small is small? Any brewer producing less than 6,000,000 barrels of beer in a calendar year.

According to the Brewer's Association, the 6,000,000 barrels per year cut off makes this bill apply exclusively to "craft breweries." And at 31 gallons to the barrel, this quantity of beer encompasses a huge swath of U.S. based breweries.

Current law taxes small brewers at a level of $7 per barrel for the first 60,000 barrels, and $18 per barrel beyond that.

This legislation would change the excise tax per barrel to $3.50 on each of the first 60,000 barrels. On the first 1,940,000 barrels of production (excluding the first 60,000), the tax rate per barrel would be lowered to $16.

Impact

Beer drinkers; brewers producing less than 6,000,000 barrels of beer per year; prospective employees, the beer industry; and the Treasury Department.

Cost of House Bill H.R. 232

A CBO cost estimate is unavailable. However, the Brewers Association conducted an economic analysis using 2013 sales data which estimated that net government tax revenue would decrease by about $20 million in the first year, and a total of $130 million over five years. It would also increase economic activity by over $200 million in the first year, and more than $1.2 billion over five years.

More Information

Of Note: Beer has been a mainstay in American life throughout the country’s history, even pre-dating the establishment of North America’s first known brewery in 1612 near what became Manhattan. American soldiers were given beer rations (1 quart per day) during the Revolutionary War, and during the first year of his presidency George Washington announced that he would only drink beer brewed in the U.S.  


Today, the beer industry contributes $246 billion to the U.S. economy and over $49 billion in tax revenue to governments at all levels, while employing more than 2 million Americans. There are over 2500 microbreweries and brewpubs, which account for the majority of the growth in the industry. The Beer Institute estimates that at least 40 percent of the money a consumer spends on beer goes to paying taxes at the federal and state level.


The taxation of alcohol has been controversial in the U.S. since 1791, when whiskey became the first domestic product to be taxed by the federal government. The excise tax applied to all distilled beverages, but whiskey’s enormous popularity led to what became known as the Whiskey Rebellion, where Americans resisted the collection of the taxes - sometimes violently. The first tax on beer was introduced in 1862, and the $1 per barrel excise tax was used to finance the government’s operations during the Civil War.


In-Depth: A version of this bill had been introduced in the previous session of Congress, but it failed to receive a vote on the House floor despite having over 180 co-sponsors. Its introduction stirred up controversy when larger brewers pushed for legislation that reduces excise taxes for all brewers regardless of size.


Media:

Summary by Eric Revell
(Photo Credit: Flickr user x-ray delta one

AKA

Small BREW Act

Official Title

To amend the Internal Revenue Code of 1986 to provide a reduced rate of excise tax on beer produced domestically by certain qualifying producers.

bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate has not voted
  • The house has not voted
      house Committees
      Committee on Ways and Means
    IntroducedJanuary 8th, 2015