Beer Taxes: DC versus Salem
As you know, Salem is considering raising the excise tax on beer. Strangely, in Washington, they're considering exactly the opposite:
An interesting wrinkle in the whole excise tax debate. Stay tuned.
[Update: In comments, Jim added a clarifier to his earlier piece. "The small brewers rate is actually $7 on the first 60,000 barrels. The differential actually dates back to 1976 -- before the 1991 increase. Henry King of the U.S. Brewers Association got the small brewers' tax dropped to $7 from $9 for the first 60,000 barrels. In 1991 when the excise tax doubled, the small brewers' rate stayed the $7."]
Washington, DC- The Beer Institute and the Brewers Association today applauded members of the United States House of Representatives for the introduction of H.R. 836 the Brewers Excise and Economic Relief (BEER) Act, which effectively returns the federal beer excise tax back to its pre-1991 level of $9 per barrel [from the current rate of $18].And important note. Jim Parker informs me that there's a provision for small brewers in the '91 legislation. Breweries producing less two million barrels (essentially every craft brewery) only pay half the tax--nine bucks--on their first 60,000 barrels. So this wouldn't affect smaller craft breweries unless the Brewers Association is able to preserve the deal and reduce the tax on small breweries to $4.50 a barrel for the first 60k. And they're working to do that.
Today, there are over 2,053 brewing companies in the United States operated by national brewers, regional brewers, regional craft brewers, microbrewers, and brewpubs. These job-creating businesses are in every state in the nation. In fact, a majority of Americans live within 10 miles of a brewery. In addition to reducing the tax burden on large brewers and beer importers the legislation introduced today provides specific relief to small brewers by reducing their tax burden from $7.00 to $3.50 per barrel.
The 1991 doubling of the federal excise tax remains the only so-called "luxury tax" still in place. All of the taxes on luxury products such as yachts and jewelry that were increased that same year have since been repealed due to the devastating consequences they had on jobs, the economy and the industries impacted. Today, more than 40 percent of the retail price of beer is comprised of various taxes, and beer taxes at all levels of government add up to more than $36 billion annually.
An interesting wrinkle in the whole excise tax debate. Stay tuned.
[Update: In comments, Jim added a clarifier to his earlier piece. "The small brewers rate is actually $7 on the first 60,000 barrels. The differential actually dates back to 1976 -- before the 1991 increase. Henry King of the U.S. Brewers Association got the small brewers' tax dropped to $7 from $9 for the first 60,000 barrels. In 1991 when the excise tax doubled, the small brewers' rate stayed the $7."]