Kerry Bill to Decrease Excise Tax for Breweries

13 May

Senate Bill 3339, introduced yesterday in the Senate by John Kerry, would decrease excise taxes for about 1,500 small breweries.  The bill is similar to one introduced in the House in December, and would cut the excise tax from $7 to $3.50 on small breweries first 60,000 barrels.  It would also decrease the tax from $18 to $16 on all subsequent barrels up to 2 million.

A small brewery is defined as one that produces no more than 6 million barrels of beer per year.  San Diego, a haven for quality microbreweries, would be greatly benefitted if this bill is passed.  It would also be valuable for those that enjoy drinking craft beers, who should see the decrease in excise taxes reflected in their beer prices.

Regarding the bill, Senator Kerry stated, “Small and independent brewers are vital small businesses,” and that “relieving their tax burden will keep them hiring and expanding”.

A study of the potential impact of the bill shows it to be advantageous and efficient.  The bill is expected to create 2,700 new jobs in the beer industry in its first year, and around 375 new jobs in each year after that.  The increased income and payroll taxes collected from these jobs would offset the loss in government revenue, and cost the government only $10.6 million in the first year of the bill being implemented.  At the same time, the bill would increase economic activity by $115 million in the first year, which when calculated out means that for every dollar lost in government revenue, overall economic activity would increase by nearly $11.  The bill is a huge win-win situation if the research is true.

This bill will likely be passed, as it is one of the few bills of late to have bipartisan co-sponsorship and support in both the House and Senate.  There should be more smart and cost-effective bills like this that increase economic activity and build jobs with minimal cost to the government.  Brewers and beer enthusiasts should be ecstatic about this proposed change in beer tax rates.  Legislators should look into introducing an analogous bill for the wine industry that could spur similar growth.

Image credit to Ahmet Guler / FreeDigitalPhotos.net

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