Nationally, small and independent brewers employ nearly 100,000 full- and part-time employees and generate more than $3 billion in wages and benefits and pay more than $2.3 billion in business, personal and consumption taxes. These brewers are vital small businesses in communities across the country, typically employing 10 to 50 employees.
Consumer demand for the bold and innovative beers brewed by America's small brewers has grown significantly in recent years. But beer produced by small, independent brewers still represents less than 5% of the beer sold nationwide. As small businesses, small brewers face many economic challenges. Because of differences in economies of scale, small brewers have higher costs for production, raw materials, packaging and market entry than larger, well-established, multi-national competitors. Furthermore, efforts to increase state taxes for all brewers continue to threaten jobs and their economic stability.
To help strengthen American small businesses and preserve Main Street jobs, the Brewers Association supports legislation to reduce the federal beer excise tax rate for America's small brewers.
- Currently, a small brewer that produces less than 2 million barrels of beer per year pays $7.00 per barrel on the first 60,000 barrels produced each year. Reducing this rate to $3.50 per barrel would provide approximately $18.0 million per year to help strengthen our nation's smallest brewers and support their efforts to maintain and generate jobs.
- Once production exceeds 60,000 barrels, a small brewer must pay the same $18 per barrel excise tax rate that the largest brewer (at over 100 million barrels) pays. Lowering the tax rate to $16 per barrel on beer production above 60,000 barrels up to 2 million barrels would provide small brewers with an additional $26.2 million per year that would be used to support significant long-term investments and create jobs by growing their businesses on a regional or national scale.
The small brewer tax rate was
established in 1976 and has never been
updated. Since then the annual
production of America's largest brewery
increased from about 45 million to 107
million barrels. The ceiling defining
small breweries is 2 million barrels. We
support raising this ceiling to 6
million barrels to more accurately
reflect the intent of the original
differentiation between large and small
brewers in the U.S.
The Brewers Association urges you to co-sponsor H.R. 4278/S. 3339, legislation to create a graduated beer excise tax rate of $3.50 and $16 for America's small brewers. During the 111th Congress, more than 240 U.S. Representatives have shown their support for small brewers by joining Reps. Pomeroy and Latham in sponsoring legislation to reduce both of the beer excise tax rates paid by small brewers (H.R. 836, the Brewers Excise and Economic Relief Act of 2009). We strongly encourage Members of Congress to extend the same level of bi-partisan support to H.R. 4278 and S. 3339.