Craft brewers seek tax cuts as industry grows
Craft beer makers across the country are seeking a federal tax cut that they say would help them increase production and hire additional employees, the New York Times reports.
The Small Brewer Reinvestment and Expanding Workforce Act, or Small BREW Act, would reduce the tax that brewers pay on each of their first 60,000 barrels from $7 to $3.50. For every barrel beyond 60,000 but under 2 million, the tax would be reduced from $18 to $16. After 2 million barrels, breweries would pay the $18 tax.
Arbor Brewing Company in downtown Ann Arbor.
Melanie Maxwell | AnnArbor.com
The tax reduction would apply to any brewery that produces fewer than 6 million barrels a year. About 95 percent of the country’s craft breweries and brewpubs produce less than 15,000 barrels a year, the report says.
The craft beer industry is booming in markets across the country, including in the state of Michigan where 17 breweries opened in 2011.
The Brewers Association says 409 small breweries and brewpubs opened in the U.S. in 2012, up 18.5 percent from the previous year. Overall beer sales were up 1 percent in 2012, but specialty brewers grew their share of the market by 6.5 percent.
In Washtenaw County, the Chelsea Alehouse opened this year and Grizzly Peak is in the midst of increasing its brewing capacity in preparation of the Old German opening.
Meanwhile, the Arbor Brewing Company owners opened their first international brewpub in India in 2012, and Wolverine State Brewing expanded its tap room and brewing capacity.
.Lizzy Alfs is a business reporter for AnnArbor.com. Reach her at 734-623-2584 or email her at lizzyalfs@annarbor.com. Follow her on Twitter at http://twitter.com/lizzyalfs.
Comments
clownfish
Wed, Apr 3, 2013 : 12:59 p.m.
Local brewpubs get upwards of $6/pint, and they are complaining about a $7 tax on a 31 gallon barrel? Sorry, love the work you guys do, but no sympathy here today.
drew_blows
Tue, Apr 2, 2013 : 6:33 p.m.
Yay. More tax cuts for business owners and the private sector. Cant the private sector do anything on their own without corporate welfare. After all are ntthe business owners and the private sector the "chosen ones". The ones that do no wrong and had absolutely nothing to do with the recession. You want free parking to with that tax cut too?
a2cents
Tue, Apr 2, 2013 : 6:22 p.m.
I'm sure the savings will be passed along to the consumers at least.
Top Cat
Tue, Apr 2, 2013 : 4:48 p.m.
If we had to subsidize anything, I would prefer that it be something that makes people a bit more pleasant.
JB SHOOTER
Tue, Apr 2, 2013 : 3:35 p.m.
The industry is booming, but needs a tax break? I can't drink to that.
Brian Kuehn
Tue, Apr 2, 2013 : 7:09 p.m.
I also agree. Smaller brewers are succeeding at the current tax rate.
average joe
Tue, Apr 2, 2013 : 4:38 p.m.
I agree. If the industry is booming, they probably are hiring new employees, without the tax break. And I would guess that the brewers will not be passing the savings on to the consumer.
aabikes
Tue, Apr 2, 2013 : 3:34 p.m.
I'd rather subsidize barrels of beer than barrels of oil.
Ignatz
Tue, Apr 2, 2013 : 3:12 p.m.
I'm a big craft beer supporter, but I'd rather not see taxes reduced. This nation is broke enough as it is. It seems the current tax is not onerous enough to prevent the rapid growth of the industry, so it's not an impediment.
tdw
Tue, Apr 2, 2013 : 3:38 p.m.
Hey why don't you send Washington a bigger check then ? You do realize if they hire more people those people will be paying taxes don't you ?
a2cents
Tue, Apr 2, 2013 : 2:52 p.m.
Meanwhile, other efforts include discouraging law enforcement from those pesky DUI's.
Lizzy Alfs
Tue, Apr 2, 2013 : 2:28 p.m.
I wrote a story last year about local brewers finding success as craft beer sales increase across the country. http://www.annarbor.com/business-review/craft-beer-industry-local-brewers-finding-success-with-sales-increasing-nationwide/ Ron Jeffries with Jolly Pumpkin started out selling 160 barrels of beer in 2004, and last year, he was selling 12 times that amount in the U.S. and overseas. In 2011, Arbor Brewing Company and Corner Brewery sold 4,200 barrels in Michigan.