Legislators in both houses of Congress have proposed the Craft Beverage Modernization and Tax Reform Act. If enacted, the bill would provide tax relief to all brewers and beer importers.
The Beer Institute believes the comprehensive new bill provides fair and equitable reform of the federal excise tax on beer and supports America’s brewers and beer importers, according to Food Manufacturing. The beer industry in the U.S. supports more than 1.75 million jobs and generates approximately $253 billion in economic activity a year.
This legislation could be a big help to the U.S. beer industry. It would allow America’s beer industry to keep up with some of the imported beers that are gaining a larger market share, including beer from Mexico. Sen. Ron Wyden (D-OR), sponsor of the bill and co-chair of the Senate Bipartisan Small Brewers Caucus, said in a press release that it would ensure craft beer would “no longer face the unfair burdens of Prohibition-era rules and taxes.”
Still, a Brewers Association report from last year showed production volume in the U.S. is up 16%, and the number of craft breweries has increased by nearly 700 since the middle of 2014.
If passed, the bill would reduce the tax on beer to $3.50 a barrel for the first 60,000 barrels for domestic producers that make less than 2 million barrels a year. Additionally, it would lower the tax to $16 per barrel on the first 6 million barrels for all the other brewers and all beer importers.
The bill would also expand the list of ingredients that could be included in beer without federal government approval, including “wholesome fruits, vegetables, and spices suitable for human food consumption.”
Both the House and Senate versions of the bill have Democrat and Republican sponsors, which could make the bill more likely to get through Congress. And with an administration that is prioritizing domestic production, this bill could be seen as a way to help a U.S. industry.