- For breweries producing less than 60,000 barrels, the per-barrel tax would drop from $7 to $3.50
- For larger breweries, the tax on all barrels produced between 60,000 and 2 million would be taxed at $16, rather than the current $18.
- All barrels over 2 million would be taxed at $18 per barrel.
For an idea of how this would affect breweries, here are some calculations I made for various sizes of breweries:
5,000 Barrel BreweryAlthough it's not embeddable, there's a great news video from Colorado describing the legislation here. A pdf of the legislation is here.
Current law: $35,000
HR 4278: $17,500
30,000 Barrel Brewery
Current law: $210,000
HR 4278: $105,000
75,000 Barrel Brewery
Current law: $690,000
HR 4278: $450,000
150,000 Barrel Brewery
Current law: $2,040,000
HR 4278: $1,650,000
The Brewers Association favors it, and no doubt all breweries do, too. This could add up to tens or hundreds of thousands of dollars to a brewery or brewpub. However, the policy wonk in me wonders why we'd be lowering taxes on small breweries now. It's a tiny drop in the bucket to the federal budget (costing the government just a hair over $40 m). But of all the sectors of the economy that could use stimulating, craft brewing seems like the last in a very long line. Some breweries have no doubt suffered in this economy, but as a whole, craft breweries continue to grow and prosper. The idea of federal stimulus is to get stalled industries moving. Any job's a good job, and this will definitely create jobs, but should we be handing out tax breaks to a healthy sector when others are dying on the vine?
But hey, don't let me be the diacetyl in the beer--this would be good for Beervana if it passes.
Hat tip to JG for flagging this down and emailing me the news.