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posted by cmn32480 on Saturday June 27 2015, @10:15AM   Printer-friendly
from the the-other-brown-liquid-of-life dept.

Good news, beer drinkers. U.S. federal taxes on beer could be going down soon, especially for small "craft" breweries. But certain bigger "craft" breweries could see less benefit:

For years, the Brewers Association craft beer industry group offered its definition of a craft brewer, using metrics like barrels of production, percentage of a brewery owned by a non-craft brewer and more "traditional" aspects. However, it changed its barrel-production limit from 2 million to 6 million in 2010 to accommodate the growth of Boston Beer Co. and its Samuel Adams brand. And the trade group changed the "traditional" portion of its definition last year to include pre-prohibition brewers including D.G. Yuengling & Son and August Schell, which have brewed with maize (once deemed non-traditional by BA) throughout their existence.

However, on June 11, Sen. Ron Wyden, a Democrat from Oregon, introduced the Craft Beverage Modernization and Tax Reform Act (S. 1562) that would not only cut excise taxes imposed on brewers, but would finally settle who's a craft brewer and who isn't. The text of that bill hasn't been released yet, but the folks at the Beer Institute, a Washington, D.C.-based beer industry lobbying group, spelled out three of its key effects.

1. It reduces the federal beer excise tax to $3.50 per barrel on the first 60,000 barrels produced by domestic brewers producing fewer than 2 million barrels annually.

2. It cuts that same tax to $16 per barrel on the first 6 million barrels for all other brewers and all beer importers.

3. It maintains the current $18-per-barrel excise tax for any barrels beyond 6 million.

[...] That distinction is incredibly important, considering that Boston Beer's production in 2009 was roughly half of its 2014 total. That's an average of more than 20% growth each year. If that rate of growth continues, Boston Beer will be over the 6 million bar in less than three years and, for tax purposes, would be considered a macro. [...] Bemoaning the eventual departure of Samuel Adams from the craft club misses the bigger point of this bill. Craft beer didn't need a tax break. The number of breweries in the U.S. has grown steadily from 1,447 in 2005 to more than 3,400 today. Craft beer, meanwhile, has grabbed an 11% share of the beer market by volume and a more than 19% share of that same market in dollars. It's a nearly $20 billion industry that's grown by double-digit percentage points for the past decade.


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  • (Score: 3, Insightful) by BK on Saturday June 27 2015, @04:35PM

    by BK (4868) on Saturday June 27 2015, @04:35PM (#202109)

    I for one am comfortable with taxes on commercially produced beer. It's a high demand product and the taxes seem quite reasonable. I certainly haven't heard of a brewer being driven out of business by excessive taxation.

    If the taxes seem too high, brew your own.

    --
    ...but you HAVE heard of me.
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  • (Score: 2) by schad on Saturday June 27 2015, @06:52PM

    by schad (2398) on Saturday June 27 2015, @06:52PM (#202180)

    I for one am comfortable with taxes on commercially produced beer.

    I am too, but I'm not certain that it's being done right. There are definite costs to booze: safety (drunk driving), health care (alcohol poisoning, long-term stuff like cirrhosis), and social (alcoholism), to name just a few. To the extent that you can put a dollar figure on those costs, that's what beer taxes should be going to. And the tax rate should be set so that tax revenues are reasonably close to the costs. Of course it will never be perfect, but that's OK. Close is good enough.

    So without more information on costs, I can't say whether the current tax rate is reasonable or not. It might be too high. It might be too low. If you put a gun to my head and made me guess, I'd guess that they're far too low.

    And I don't see why it matters how big the brewer is. If beer ought to be taxed, then it doesn't matter who makes it. Sure, make exemptions for home-brewing. I don't see how we could realistically tax that anyway. But why does it matter who makes the beer? If you want to tax beer-makers, fine. That's what the corporate income tax is for. Not this, which is closer to a really terrible VAT-like thing.

  • (Score: 2) by CirclesInSand on Sunday June 28 2015, @12:23AM

    by CirclesInSand (2899) on Sunday June 28 2015, @12:23AM (#202270)

    Sure. You get your own page the 9000 pages of tax legislation. Everyone has some special thing that they want to tax or exempt, and it results in the horrible mess of broken and corrupt tax code we have.

    Next time you think "I'm ok with a different tax rule for..." , try multiplying that by 300million other Americans who also want their special rule. Then realize why your idea, no matter how much of a good idea you think it is, is a bad idea.