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Congress Passes Tax Reform that Benefits Small Breweries

This week in Washington, DC, a couple of different things happened that help small breweries. First up, Congress passed tax reforms that will provide substantial benefits for small breweries. Next, the Alcohol and Tobacco Tax & Trade Bureau (TTB) expanded and updated the formula rule, which previously encumbered breweries that use stuff like spices and fruit in their beers.

Today, breweries file their federal taxes every two weeks. The reform allows them to do it quarterly. But that’s just the beginning. Below, the Brewers Association* explains it in more details.

The tax extenders package for small beverage alcohol producers includes favorable reforms related to bond requirements and extended filing periods. The plan makes the tax cuts for equipment permanent, while also significantly raising the qualifying threshold. Additionally, the bill includes language that would keep any of the funds made available by this or any other act to be used to implement or enforce any provision of the FDA Food Safety Modernization Act.

“These filing and bonding requirements are an important victory for small and independent brewers, and we are thrilled that these provisions have been included in the tax extenders bill,” said Bob Pease, chief executive officer, Brewers Association. “We are extremely grateful to Sen. Ron Wyden (D-OR) for his leadership in bringing the entire beverage alcohol space behind well thought out proposals that benefit us all. We also appreciate Reps. Earl Blumenauer (D-OR) and Mike Kelly (R-PA) making this legislation a priority to help small alcohol producers across the country.”

“Small brewers, vintners and distillers are fermenting economic growth in every corner of Oregon and across the United States,” Wyden said. “Passing this bill means less red tape for small business that are such an important economic multiplier. I hope this is only the first round of common sense legislation to cut taxes and unnecessary regulations for America’s craft beverage industry.”

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“As co-chairman of the Small Brewers Caucus, I’m pleased to have worked on this bipartisan legislation to simplify the paperwork that small brewers in Pennsylvania have to file with the IRS,” Kelly said. “Now they’ll be able to file their excise taxes quarterly instead of every two weeks, which means they’ll be able to spend less time filing out tax forms‎ and can get back to what they do best—brewing quality craft beverages in the Commonwealth.”

“From cider to wine, beer and spirits, the craft beverage industry holds an important and growing role in Oregon’s and the nation’s economy,” said Blumenauer. “Passage of this bill will better target the rules governing these industries and will expand opportunities for small entrepreneurs across the country.”

Separately, the Alcohol and Tobacco Tax & Trade Bureau (TTB) updated and expanded the formula rule, exempting ingredients and processes used in the production of beer from being subjected to formula requirements.

“This is also a key win, given the revival and growing popularity of numerous beer styles, such as fruit and spice beers,” added Pease. “It takes a substantial burden off the brewer of having to specifically label ingredients that are already well known to the trade and consumers by their flavor designation.”

*The Brewers Association is the not-for-profit trade association dedicated to small and independent American brewers, their beers and the community of brewing enthusiasts.