The Proposed Beer Tax – Facts & Opinions

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By now, you have probably heard about Governor Inslee’s proposed budget and his plan to expand and extend the beer tax. If you are like most people, you really do not know what it all means. Heck, maybe you understand it better than I do. Below, I try to explain it to you.

Nutshell Opinion: I love living in a state with a vibrant and growing craft beer industry. I recognize that the Washington Brewers Guild wants to protect what I love. As I often do, on this issue I stand in support of the Washington Brewers Guild. If they tell me to contact my congressional representatives in opposition to this tax proposal, that is what I will do.

Why do I think we need to protect and foster the beer industry? Washington’s beer industry, from grains to glass, is responsible for about $4.3 billion in revenue and about 42,000 jobs. Click here to read the report on MyNortwest.com. Currently, there are about 175 breweries in Washington. The number is nebulous because of how fast it is growing.

And Now…

I really wish there was a quick and easy way to address this issue. There isn’t. I hope you will bear with me while I try to explain it in a just manner. Correct me, share information, but know that I’m not trying to sound like I know everything. Be nice. Be civil. If you are smarter than me, you aren’t the first, so please don’t rub it in.

Maybe you don’t want to think about this too much and you just want someone to tell you what to think. I’ve talked to quite a few people in the brewing industry over the past few days. If you only need to know one thing, understand that the brewing industry is freaking out about this tax. It is immense. It is drastic. They want your help. From the largest craft brewery in the state to the smallest nano-brewery, I cannot imagine that anyone in the beer-making business thinks this is a good tax.

I happened to be hanging out with a brewery owner last week shortly after we’d both found out about the proposal. He was visibly upset. In his words, “This is the kind of stuff that keeps me awake at night.” He explained what it would mean for his young, growing business. It was drastic. HAVING to raise his prices in order for his business to stay viable, yet still having to compete with out-of-state breweries not paying the tax. He worried about pissing off customers who would not understand why he had to raise his prices. And more ugly stuff.

I couldn’t help thinking that his words would have convinced anyone to oppose this tax proposal. Even Governor Inslee himself.

If that’s all you need to know, there it is.

FYI – The Washington Brewers Guild is a trade organization that represents the state’s breweries in matters of politics and policy. The Guild is a voluntary organization. Not all breweries opt to be members of the Guild. Do not confuse The Guild with the Washington Beer Commission—they are two separate entities with two different missions. The Guild is politics and policy. The Commission is marketing and promotions. This is the Guild’s fight.

Just Another Sin Tax

No, strictly speaking, this is not a sin tax. This is an excise tax. If it were a sin tax, they would be taxing beer drinkers directly and making us pay for our sins. The beer-drinking public is a large and powerful lobby. They probably don’t want to mess with us. Consumers will only end up paying the trickle down of this tax. It will be significant for consumers, but it will be drastic for breweries.

Understand that this tax is only paid by Washington’s breweries. It is not paid by Washington’s distilleries or wineries. Even if it were a sin tax, it would only be a tax on the sin of brewing beer.

I know you want to know how much $$$$. Stay tuned.

Understand that this a state excise tax. It will only be levied against breweries in Washington.

The Facts

Fact: Washington breweries already pay an excise tax on every drop of beer they produce. It is already one of the highest in the nation. This proposal would drastically increase the excise tax.

Fact: In 2010 a new, additional beer tax was imposed on Washington’s breweries. “The beer tax was originally enacted as a temporary response to an economic recession,” said State Representative Eileen Cody in a response letter I received this morning from her office. The tax is scheduled to end in July of this year.  The Governor now proposes extending it beyond the sunset date. This tax was intended to be temporary. That is an irrefutable fact.

Opinion: That’s what they mean by “extend.” They told us it was temporary. They lied. Now let’s talk about “expand.”

I know you want to know how much $$$$. Stay tuned.

Fact: Expanding the tax. This is the meat of the matter. Up until now, this tax only affected breweries that produced more than 60,000 barrels per year. In other words, it only affected Redhook, which is the only brewery in the state producing that much beer. The first 60,000 barrels a brewery produces are exempt from this tax. That means, up until now, only Redhook paid this tax. And they only paid it on the beer they produced in excess of the 60,000 threshold.

“Expanding” this tax means eliminating the 60,000 barrel threshold so that all breweries in the state have to pay this tax on all beer they produce. Not just Red Hook, but Elysian, Diamond Knot, MT Head, Mount Tabor, Foggy Noggin, and Birdsview Brewing will now pay this tax on every drop of beer they brew. Every brewery in the state will now have to start paying this tax on every drop of beer they brew. That’s a fact.

I know you want to know how much $$$$. Stay tuned.

Opinion: The supporters will tell you that this is not a new tax. Instead, they call it “extending and expanding an existing tax.” They are lying. Right now, Airways Brewing does not pay this tax. If it comes to be, Airways Brewing must start paying this tax. How is that not a new tax?

Also, they call it “extending and expanding” instead of what it really is – an obscenely humungous excise tax increase that threatens to cripple the industry. And now…

The Numbers

Numbers can be fudged so I hesitate to call them facts. Take mine with a grain of salt, but I’m trying. Many have summed up the tax, rightly so, as the “50 cent per gallon tax.”

I admit that reading SB 5039 (the actual Senate Bill we are discussing) and trying to extract meaningful numbers is difficult. I must believe what I’ve been told by people who actually have a horse in this race. I’ve been told it would raise Washington’s per-barrel tax from about $8 to about $23.

Someone check my math. That can’t be real. An almost 300 percent increase?

FYI: In Oregon, the tax rate is $2.60 per barrel. In Idaho the rate is about $4.60 per barrel. Even as the taxes exist right now, our Washington breweries are at a severe disadvantage.

Please, go read other stuff to learn more about the numbers. Numbers can be fudged, but nobody can fudge theses numbers and make them look pretty.

Opinion

I love living in a state with a vibrant and growing craft beer industry. I recognize that the Washington Brewers Guild wants to protect what I love. As usual, on this issue I stand in support of the Washington Brewers Guild. If they tell me to contact my congressional representatives in opposition to this tax proposal, that is what I will do. In fact, that is what I’ve already done.

I think this tax will be devastating, especially for new breweries, and would-be-breweries. It will seriously affect their ability to recoup the massive cost of startup. Beer is already a small-margin game and breweries are already paying their fair share of taxes.

I refuse to see it as anything but a new tax. Breweries that are not paying the tax now will suddenly have to pay this tax. How is that anything but new? You can call it an increase if you want, but I see it as a new tax.

It is drastic. It’s like raising the state sales tax to 30 percent with the stroke of a pen. Can you imagine them trying to do that?

I think our lawmakers feel like they can just slip this one past us, hoping nobody will notice what a stupid thing this is. Heck, they even announced this proposal during the Craft Brewers Conference. Did it on the downlow. When the Governor made his announcement, many of our state’s brewers (including the President of the Washington Brewers Guild) were on the other side of the nation at an industry convention. How convenient. That’s dirty pool.

I think it is unfair to target the brewing industry just because it is a growing industry.

If it’s a sin tax, spirits and wine should also be impacted.

Why did we legalize weed? Weren’t taxes supposed to be involved?

I think our lawmakers should foster the brewing industry. Not coddle it, but foster it. Breweries are notorious job-creation machines. They create a lot of jobs, especially when compared to other businesses of their financial size.

Nationwide, craft beer is a growth industry. Let’s continue to lead the way. For sure, let’s not fall behind.

I understand that the state needs money, but I think it is unfair to put so much of the burden on this one industry.

My Letter

Feel free to cut and paste, if you like. Click here to find and contact your legislators. It is very easy.

I am writing to tell you that I stand in opposition to the current plan to extend and expand the beer tax. I believe this is an unfair and unwise proposal. The craft beer industry is one of Washington’s few growth industries. It should not be attacked. It should be fostered and nourished.  Washington has long been a leader where craft beer is concerned. Now that craft beer is becoming a nationwide phenomenon, let’s not hamstring our local breweries. Let this industry grow and prosper. This proposed tax threatens the industry’s ability to continue growing and further contribute to the state’s revenue stream. The current excise tax on barrel production is already high enough. Our state’s breweries are already paying their fair share.

End This Beer Tax Now dot com

There is a website out there (endthebeertaxnow.com) receiving a lot of attention from beer geeks. It’s a good source for information. I am glad it is there. As with any information, you must consider the source. In this case, an organization called End The Beer Tax Now Coalition. As I understand it, that organization came into existence when this beer tax was originally introduced a few years ago. Christine Gregoire was Governor at the time and a hotly contested gubernatorial race lingered in the air.

There might be a political message behind some of the things said on endthisbeertaxnow.com. In some cases, the message might stretch beyond the beer tax. Maybe you agree with that message, maybe you don’t. The Washington Brewers Guild is not affiliated with the End The Beer Tax Now. At least not yet. Maybe they will join forces. Maybe they won’t. They certainly share a common goal, at least on the surface.

27 Responses to The Proposed Beer Tax – Facts & Opinions
  1. Jack Hatley
    April 1, 2013 | 2:52 pm

    For those of you who don’t care or understand, think back to the days of the $400 per year car tabs and what that did you.
    The state already gets license fees from small brewers and charges an excise on production. This is not a small increase. Raise your voice in protest!

  2. Eliot Olson
    April 1, 2013 | 3:19 pm

    I am a resident of Ballard and this is the area-specific letter I wrote (using your paragraph as a jumping off point… thanks!) Our area has such a great booming beer scene and it would be so sad to see those places close down.

    Anyone from the Ballard/Fremont/Greenwood/Crown Hill area is welcome to cut and past from my letter. Our representatives are Kohl-Welles, Tarleton, and Carlyle, but you can find yours exactly using the link provided above. Here is what I wrote:

    —————-

    I am writing to tell you that I stand in opposition to the current plan to extend and expand the beer tax. I believe this is an unfair and unwise proposal. The craft beer industry is one of Washington’s few growth industries. It should not be attacked. It should be fostered and nourished. Washington has long been a leader where craft beer is concerned. Now that craft beer is becoming a nationwide phenomenon, let’s not hamstring our local breweries. Let this industry grow and prosper. This proposed tax threatens the industry’s ability to continue growing and further contribute to the state’s revenue stream. The current excise tax on barrel production is already high enough. Our state’s breweries are already paying their fair share.

    To speak specifically about the Ballard area, I hope you understand how much craft beer and the small business owners who make it are doing to support our local economy. Small nano/microbreweries are opening up all over Ballard, and just this weekend a group of friends and I patronized four such businesses — Reuben’s, Populuxe, Peddler, and Hilliards. Hale’s Ales is a staple of the Fremont-Ballard area. NW Peaks fosters a wonderful outdoor community of beer and mountain climbing enthusiasts. These places are doing great work in our community/local economy, partnering with local food trucks and restaurants to not only provide a great service for the people of Ballard (i.e. kid-friendly establishments where adults can enjoy fine, handcrafted beer) but also draw people from all over Seattle and Puget Sound to Ballard.

    This beer tax was supposed to be temporary. This beer tax hurts local businesses by allowing out-of-state competitors to undercut pricing. This beer tax is unfair in the way that it does not affect wineries or distilleries. This beer tax is already the highest in the nation and SB 5039 would increase it ten times over. This beer tax should not kick in instantly on every drop of beer a brewery makes — tax the larger ones a little more (as the tax stands currently) if you must, but please spare the little guy. Expanding it in this way will destroy local business owners who already deal with low margins and competition from larger out-of-state corporations. Three Ballard breweries just opened in the last six months and are gaining traction and local support — I’ve had friends visit from all over western washington to enjoy the fine beer Ballard has to offer. Don’t stop this booming part of our local economy by enacting an unfair tax. Please take a stand.

    I urge you to support your local business owners and stand with the little guy. If you vote for this bill without putting your foot down for reasonable changes to it, you will not receive my support in future elections and will make enemies of all the people in this state who love great beer made with care by local business owners.

  3. Nick
    April 1, 2013 | 3:33 pm

    So I tried to tally up the numbers and here is what I got:

    Section 1.1.a says 1.30 per barrel.
    Section 1.2 says 2.00 per barrel.
    Section 1.3.a says 4.78 per barrel.
    Section 1.4 says 1.482 per barrel.
    Section 1.5.a says 15.50 per barrel.

    This totals 25.062 per barrel. What I do not understand, however, is that there are two sections that still exempt smaller breweries. Maybe I’m not reading it right?

    In regards to the 4.78 per barrel, Section 1.3.b says: The additional tax imposed under this subsection does not apply to the sale of the first sixty thousand barrels of beer each year by breweries that are entitled to a reduced rate of tax under 26 U.S.C. Sec. 5051, as existing on July 1, 1993, or such subsequent date as may be provided by the board by rule consistent with the purposes of this exemption.

    And in regards to the 15.50 per barrel, Section 1.5.b says the same. Section 1.5.a is the section that changes the date from June 30, 2013 to December 31, 2016.

    So if they qualify for those exemptions under the federal code (produce less that 60,000 barrels annually), it seems they should be paying only 4.782 per barrel.

    But, yeah, check my math: http://search.leg.wa.gov/search.aspx and do a document search for SB 5039.

  4. Robert Barra
    April 1, 2013 | 3:49 pm

    I think I need to disagree with a big part of this article. From what I read: http://apps.leg.wa.gov/documents/billdocs/2013-14/Pdf/Bills/Senate%20Bills/5039.pdf, there is no change whatsoever in expanding the beer tax to breweries producing less than 60,000 barrels. I’m not saying taxes are good, but the information you report as “the meat of the matter” seems to be wrong.

  5. Russell
    April 1, 2013 | 4:20 pm

    The number I keep hearing is $23.58, which is everything but the section 1.4 tax. But lets not forget that we also pay $7/bbl in Federal excise taxes too. So now we’re looking at nearly a dollar a gallon in total excise taxes.

    We’re just putting a new fermenter online and I crunched the numbers a little bit ago and figure that with our new increased capacity this bill would cost us more than $13,000 in additional taxes next year. That’s investment in new kegs, the cost of a new fermenter, or other equipment to grow the brewery. That’s bonuses to my employees, and for once a small profit for our investors. That’s the salary of our recently hired seventh employee, working part-time in the taproom.

    So beer prices would have to go up. I’d have about $200 in extra taxes per 10bbl batch to cover. And we’re still comparatively tiny, for some of the larger WA craft brewers this could run in the hundreds of thousands of dollars. Meanwhile Oregon breweries pay about 8 cents a gallon and their beer is crossing the border every day.

    We are in a systemic budget shortfall and I do believe taxes must, and should, go up. But a 500% increase on a tiny but thankfully growing sector of small businesses? Come on.

    Todd Flanders: “Daddy, what do taxes pay for?”
    Ned Flanders: “Oh, why, everything! Policemen, trees, sunshine! And let’s not forget the folks who just don’t feel like working, God bless ‘em!”

  6. Eliot Olson
    April 1, 2013 | 4:26 pm

    I am also confused. The text of the bill currently available online still says that the “first 60,000-barrel” exemption is in place, but other places seem to imply that the “first 60,000-barrel” exemption is going away.

    This really needs to be clarified, because I personally see that exemption as the point that the entire argument hinges upon. I am most concerned about applying the higher tax rate to small businesses. If Red Hook has to pay a little extra because they sell so much more beer than everyone else (through sports stadium contracts, major distribution, etc) I guess I’m okay with it, I just don’t want to see my small neighborhood microbreweries take an unfairly big hit.

  7. Steve Body
    April 1, 2013 | 4:58 pm

    I read your letter and I have to say you, sir, are the model of comportment. Mine is going to be nowhere near that nice. I voted for that silly ass and I intend to get all up in his grill in my blog and in Olympia, if necessary. This is one of the most idiotic, punitive, small-minded ideas ever hatched in this hotbed state for governmental lunacy and they cannot be allowed to get away with it. This is nothing more than the legislature’s punishment for the voters deciding to put the state out of the liquor business and is going to cripple one of the country’s most dynamic brewing communities. I’m all the way in on ANY efforts to fight this and will write it up in my blog by Friday.

  8. Chris
    April 1, 2013 | 6:13 pm

    I work in the beer distributer industry. While I am still against this tax continuing, I do have to say that this artical is inaccurate. The continuation of this bill will not directly breweries under the 60,000 barrel mark, and even if it did, this tax is being imposed all all brewers selling in Washington, not just Washington brewers. Large breweries such as miller Coors and bud raised prices based on the tax. This actually brought added value to craft beer, given the smaller gap in price between domestic and craft beers. While this might be a boost for local or small breweries, it hurts the industry as a whole, especially for the companies that are distributing the beer we all enjoy.

  9. Andy
    April 1, 2013 | 6:50 pm

    I located the bill at the following link: http://apps.leg.wa.gov/documents/billdocs/2013-14/Pdf/Bills/Senate%20Bills/5039.pdf. Looking at the construction of this document, and at the language in the current RCW, it would seem that this is merely an extension to an existing tax on brewers who produce more than 60,000 bbls. You’ll notice in the pdf the exact changes in the form of crossed out and new language. There are a smattering of changes to change “shall”s to “must”s, and then the change to section 5a to extend that provision to December 31st, 2016.

    I don’t see how this affects anyone other than Redhook.

  10. Kendall Jones
    April 1, 2013 | 6:55 pm

    Understand that as the bill exists right now, the 60k exemption is in place. As I understand it, and from all the people to whom I’ve spoken, Governor Inslee’s plan -which he introduced last week– included extending the tax and expanding it to impact all breweries. This could be wrong. Everyone could be wrong. If this is wrong, I am not alone in my misunderstanding. Also, they could be back-pedaling, which would be fine by me. However, as I understand it, the Governor intends (or intended) to expand the tax, eliminating the 60k exemption. Or at least he intended to propose that the tax me extended and expanded. That’s what started this whole sh*tstorm.

    And I didn’t get a denial from Representative Cody. But she might know either (yet).

    I follow up with, and will seek clarification from, the Washington Brewers Guild.

    And Steve, nice use of the word comportment.

  11. Ursula Y. Wulf
    April 1, 2013 | 7:06 pm

    This is only going to hurt the small businesses-craft and micro breweries! They won’t be able to stay in business!

  12. Kendall Jones
    April 1, 2013 | 8:41 pm

    I spoke with the Brewers Guild this evening. They are still very much of the understanding that the proposal includes removing the exemption. The Washington Brewers Guild has already started receiving calls of support from members of congress, pledging to oppose plans to the remove the exemption.

    The bill was modified last year to include the extension. But the amended version didn’t pass. That’s what you’re seeing online. Bill was not accepted as amended. So the law still exists as it is. Exists as I explained in my post. The bill has not yet been amended to include the changes that were recently proposed by the Governor.

    The Governor proposed it. Someone in congress will have to sponsor the proposed changes and reintroduce the amended bill. Then it will have to be accepted – have to pass congress. Then the law will changed to include the extension and the exemption.

    I will be in contact with the Guild all week. If anything changes, read about it here. And things will change.

  13. Ryan
    April 2, 2013 | 8:03 am

    Gotta say, I’m a little disappointed with the overall attitude surrounding the 60k barrel issue. People are up in arms if it affects their local shop (small guys) but it sounds like if it just affects Redhook everyone’s ok with it. Here’s my two problems with it:

    1. This is what politicians do. They screw around with the semantics to make awful things sound benign and they ultimately make a grab for your wallet. The issue isn’t who this tax affects; the issue is that it was proposed and passed as temporary and now (shocking) it’s being extended.

    2. Redhook is a good neighbor AND a good steward for the craft beer industry overall. I know it’s not as cool as sitting in the small taproom down the road that just opened but being successful shouldn’t put a target on your back. They’ve done great things for the industry (you might argue that the scene wouldn’t be so good if it weren’t for them in the first place) and they are one of the few spots on the Eastside that cater to families and beer drinkers alike. I would think that Redhook deserves our support; are their employees and customers less important than everybody else’s?

    Maybe my view is simplistic; maybe I’m just cranky this morning. But the attitude I see with people not respecting and advocating for our local businesses and employees is disgusting. I hope to one day get in the game myself of opening up a beer bar; I would hate to think that people might become insensitive to the need to protect profits, people, and product if I were to get “too corporate/big”.

    Here’s something to think about…and yes, it definitely sounds dramatic (but the sentiment is the same):

    First they came for the socialists,
    and I didn’t speak out because I wasn’t a socialist.

    Then they came for the trade unionists,
    and I didn’t speak out because I wasn’t a trade unionist.

    Then they came for the Jews,
    and I didn’t speak out because I wasn’t a Jew.

    Then they came for me,
    and there was no one left to speak for me.
    __________________________________________

    Kendall-

    I sincerely enjoy reading your blog and periodic pieces in the local publications around the NW; keep up the fantastic work.

    Just my .02 guys…now back to your regularly scheduled programming :)

  14. Joe Montero
    April 2, 2013 | 8:44 am

    Here is something that will help put this into prospective. Current average cost per barrel of production at my brewery is $67.96. This includes the cost of grain, hops, yeast, federal tax @ $7 and state tax @ $4.78 per BBL. If the state tax is increased to $25.06 per barrel it would make my cost per barrel go to $88.24. This represents a 30% increase in cost to manufacture beer. It will force us to increase the wholesale price of kegs by at least $10 each. It will make other Washington breweries either lower margins or increase sales price by that $10 per keg.

    If we increase the sales price, it will make Washington beers less competitive in the marketplace. A $10 increase in wholesale price is about 7.4% increased cost to retailers. This will make them less likely to buy Washington beers versus other beers which have better margins. If breweries lower margins, this represents a whopping 30% loss of profits. Not a good situation in either scenario for a budding craft brewing industry.

    Please help put a stop to this.

  15. Kendall Jones
    April 2, 2013 | 9:20 am

    Hey Ryan, I agree. I think ALL of our breweries already pay a high enough state excise tax, IMHO. I hope you didn’t think I was attacking Redhook. I wasn’t

    Thanks Joe, as a brewery owner/operator your input is certainly appreciated.

  16. Kendall Jones
    April 2, 2013 | 9:24 am

    Also, I don’t want to be one of those complainers who never offers solutions. I have an idea of where the state can actually get some revenue (from our large and growing craft beer marketplace) and I will talk about that in an upcoming post.

  17. Ryan
    April 2, 2013 | 9:34 am

    Kendall-

    I don’t think anybody is attacking Redhook directly; I think it’s more of the “oh, it only affects redhook” mentality that bothers me. People are irate when it affects the owner they talk to locally but seem less concerned when it’s one of the bigger guys. All of our local breweries are important…top to bottom.

    I would guess I’ve been to more breweries than most of your readers and I do not go to Redhook all that often; but that doesn’t mean I won’t take the time to send a letter on their (and others) behalf.

    This is why I don’t vote btw; heads they win, tails you lose.

  18. Andy
    April 2, 2013 | 11:36 am

    I imagine I’m one of the commenters here that Ryan believes is of the mindset that “who cares if it only affects Redhook”. That’s not the case at all. My parting comment was really just the key observation, given the data I can find today about the current bill’s language. I’ll start searching for updated language, though it sounds like it is still being formed.

    I do find one thing interesting. The site – http://endthebeertaxnow.com/ – is registered with GoDaddy and the owner is listed as “Domains by Proxy”. Going to their website you learn that their mission is to protect the identity of the registered party. Not trying to suggest a redhook conspiracy, but it does make me wonder if they registered the site. It seems to me that a group truly dedicated to ending such a tax wouldn’t have to hide.

  19. Courtney
    April 2, 2013 | 12:32 pm

    Using a Whois Guard like service is hardly grounds for calling something out. Maybe one person registered the domain before any company documents were formed and didn’t want his home address and phone number accessible to anyone on the internet? Some places auto add on hiding to domain name purchases these days too. You’re reaching, Andy.

  20. Sean Cecil
    April 2, 2013 | 5:17 pm

    For the life of me, I can’t figure out how this bill does anything but extend the current (insanely high) tax on beer production in excess of 60,000 barrels/year.

    Section 1a imposes a $1.30/bbl tax, section 2 adds $2.31 (both previously existing taxes on all beer produced). Section 3 expressly exempts the first 60,000 barrels from its additional taxes. Section 4 adds $1.482 of tax (previously existing). Section 5 extends the $15.50/barrel tax on production in excess of 60,000 barrels, through 2016. This is really the only substantive change in the law proposed by Senate Bill.
    (Nice: Section 6 of the existing bill also allows for the possibility a tax refund for taxes paid for beer shipped out of the state. I have no idea if this actually happens. This law appears to favor small brewers because it essentially imposes the tax on production in excess of 60,000 barrels for consumption within the State of Washington.)

    Unless we are talking about law that is found somewhere other than SB 5039, I think there is no increase proposed for micros and nanos. 5039 is an active bill as far as I can tell; any other proposal that is not currently found in proposed legislation will not pass this legislative session.
    __________________________________
    ps:
    I also enjoy your work Kendall and dig the blog.

  21. Kendall Jones
    April 3, 2013 | 7:35 am

    Sean, and all,
    The bill has not yet been modified to remove the exemption. The bill was modified last year (but not passed) to extend the expiration date of the tax. That modification did not include removing the exemption. If I recall PoliSci 101 correctly, the Governor needs to find a sponsor to amend the bill and remove the exemption. He has stated that he plans to do that. At this point we are fighting an idea, we are addressing a proposal, not an actual bill. Sorry you missed my previous comment explaining this.

  22. Brian Jeffries
    April 3, 2013 | 11:36 am

    Kendall, et al,

    The governor does not write the state budget, the legislature does. He can only suggest a budget and/or budget priorities plus veto sections of the budget — he cannot even veto line items like other governors or the president, i.e., he does not have “line item veto” authority.

    Therefore, the governor does not have the authority to extend and/or expand this tax. The legislature, including both the House and the Senate would have to agree to this extension and expansion and the governor would have to sign it. In the short-term, if people are opposed to the extension and/or expansion of this tax, it is imperative that they contact their legislators and/or the Senate and House budget writers — Andy Hill (R) in the Senate and Ross Hunter (D) in the House.

    Finally, Kendall, this has nothing to do with Congress — those are the guys and gals in the other Washington. We are talking about the legislature.

    Brian

  23. Sean
    April 3, 2013 | 11:43 am

    Kendall my mistake I did miss it. Also, this idea to “expand” the tax to smaller breweries is found on page 9 of Governor Inslee’s document “Budget Priorities for a Working Washington” http://www.ofm.wa.gov/budget13inslee/full_budgetpriorities.pdf :

    “The Governor also supports continuing certain tax rates that are set to expire June 30. In 2010, lawmakers approved a 0.3 percent increase to the B&O tax paid by doctors, lawyers, accountants and others, and a 50-cent-per-gallon beer tax. Continuing both — and including small brewers in the beer tax — will yield more than $660 million in the next biennium.”

    Thanks for increasing our awareness of this issue, it sounds like something they were hoping to do without much attention!

  24. Kendall Jones
    April 3, 2013 | 2:51 pm

    Sorry I used the word Congress in error, Brian. I know better. And yes, I understand the Governor’s role, or lack thereof, in setting the budget. Sorry I made myself sound so stupid. Then again, I do know and appreciate how much people enjoy telling me how stupid I am, so maybe sounding like an idiot isn’t such a bad thing. I would really rather be writing about stuff that matters so much less. I’d rather be writing about beer than trying to moderate a political talk radio show.

  25. Brian Jeffries
    April 4, 2013 | 10:48 am

    Kendall, I did not intend to belittle you in any way and certainly don’t think you’re stupid. I appreciate so much all the things you do. I just wanted others to get specific and accurate information so that their time and effort is spent efficiently, e.g., calling members of Congress would be a waste of time.

    You provide an invaluable service in even raising this important issue. The policy geeks like me can help by providing detailed information that is more aligned to our expertise. There’s no reason why you should feel stupid for not knowing (or inaccurately reporting) the oftentimes confusing details of the legislative process.

    Respectfully, Brian

  26. Leslie C
    April 6, 2013 | 11:26 am

    Here in SW Washington the craft and brew pub scene is very healthy and alive. Just in the small towns of Camas/Washougal alone we have 2 new brew pubs, and another set to open in a month or two. This at a time when other businesses are struggling, and closing. The LAST thing these local small businesses brew pubs need is to be singled out for a higher tax burden.

    Now I understand the need to raise revenue. But this is the wrong way.

  27. BeerFan
    April 7, 2013 | 1:39 pm

    It should be noted that any out of state brewery who sells their beer into WA must also pay this excise tax.

    There seems to be a misunderstanding that Oregonian brewers can manufacture beer at their low tax rates and then have a huge advantage here in WA, this simply isn’t true, this taxation affects ALL beer sold in WA state.

    On the flip side, this lunacy would cause all WA beer to be MUCH less competitive than other states brew when it comes to interstate distribution.

    Silver lining: This regressive, narrowly focused, and inane taxation scheme will keep the big guys big, and the small guys down, BMC prices will be comparatively less in this already high priced market. Further, as the craft brewers die off there will be more space in the planogram for the 20 pack of Chiller Extra Genuine Lite cans that I’ve been missing since they replaced them with the 18 and 24 packs… Man those 20 packs were the ish!