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Lawmakers Push To Slash Beer Excise Taxes

Sen. Jon Tester, D-Montana, joined a growing chorus of lawmakers Friday in a bid to slash the national beer excise tax, a move that would reportedly increase beer demand and cause barley and hops sales to skyrocket.

The Brewers Excise and Economic Relief Act, or BEER Act, as proposed by senators from Missouri, Utah and other states, would cut the beer excise tax in half, from $18 per barrel to $9 per barrel, saving $1.68 billion in taxes per year, according to the National Center for Policy Analysis.

“Making it easier for our brewers to expand and build their businesses will double down on their success and strengthen Montana’s reputation for great-tasting beer,” Tester said in a press release.

Tony Herbert, executive director of the Montana Brewers Association, echoed the sentiments, saying, “This bill will help breweries in Montana reinvest in jobs and in needed production growth to keep up with the fast pace of our industry.”

In addition to increased beer demand, if the BEER Act passes, the annual barley demand is expected to increase by almost $1.5 million, according to MillerCoors, brewer of Blue Moon, Miller, and Coors beers in Montana.

The BEER Act is only one piece of legislation in a patchwork of alcohol-related tax breaks slated for action in 2014.

Tester and other legislators are also pushing the Small Brewer Reinvestment and Expanding Workforce Act, or Small BREW Act, which would reduce the excise tax specifically for small brewers from $7.00 per barrel to $3.50 per barrel on the first 60,000 barrels produced by small breweries.

Even specific types of beverages are being backed by legislators, with Sen. Joe Manchin, D-W.Va., and Charles Schumer, D-NY, sponsoring the Cider Investment and Development through Excise Tax Reduction Act, or CIDER Act, in November. The act would modernize the definition of “hard cider” in the Internal Revenue Code to reduce excise taxes on ciders containing alcohol, treating the beverages as beer instead of wine.

The CIDER Act would also increase the allowed alcohol by volume level in cider beverages from 7 percent to 8.5 percent, and specifically allows “hard cider” to include the use of pear products as well as apple ones.

The bills are receiving support from small and large breweries alike.

Tony Lubold, head brewer at New Hampshire-based Seven Barrel Brewery, said of the BREW Act in a press release, “As a small brewery we don’t have the ‘discretionary’ cash flow to spend on advertising and other things that the larger breweries seem to have, [so the] BREW Act would make it easier for us to remain a strong part of the New Hampshire marketplace.”

Source: Law 360