Recently, at a Washington Brewers Guild meeting, we learned that Senator Maria Cantwell intended to pledge her support for the Brewers Employment and Excise Relief Act (the BEER Act). Yesterday we received a press release from Senator Cantwell’s office that makes it official. We share the press release below.
To date, Senator Patty Murray has not pledged her support for the BEER Act, which is what we want her to do. We congratulate and thank Senator Cantwell for signing on as a cosponsor and now we want Senator Murray to do the same.
The Washington Beer Blog first started telling you about this issue a year ago when Democratic Representative Richie Neal (D-MA) and Republican Representative Kevin Brady (D-TX) introduced a bill to redefined a “small brewery” and reduce the beer excise tax paid by small breweries. Although both the House and Senate versions of the bill enjoyed bipartisan support last year, neither of the bills even came up for a vote. Now the issue must be reintroduced. Thanks to Senators John Kerry (D-MA) and Mike Crapo (R-ID), and the others that are now signed on as cosponsors, the BEER Act has been introduced for this congress. This year, we need it to pass.
More Information
See our previous stories about this issue.
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You can learn more about the BEER Act on the Brewers Association website. Though they’re still talking about it in terms of last year’s proposed bills, this year’s version is very much the same.
Increasing Economic Activity and Creating Jobs
The BEER Act does not simply save a few bucks for craft brewers. Sure, it can be classified as a tax break, but it is also a revenue generator. Last year an economic impact study conducted by Harvard University showed that the excise tax reduction proposed for the newly redefined small breweries would increase economic activity and create jobs. Compared to many other types of small businesses, breweries are particularly efficient at creating jobs. Small breweries are also tax generators, paying many state and local taxes beyond the federal excise tax.
The Harvard study concluded that the increased economic activity and new jobs would generate revenue growth that outweighs any losses resulting from the tax reduction. In short, the economic experts say that this is a good tax cut—a rare situation when reducing a tax increases revenue. Just because it is viable and enjoys bipartisan support, there is no guarantee that the BEER Act will make it to the floor for a vote.
If there is a reasonable and intelligent argument that a fellow beer lover can make against the BEER Act, I’d love to hear it.
Senator Murray Still Needs to Sign On
Unlike Senator Cantwell, Senator Patty Murray has not yet stepped up in support of the Brewers Employment and Excise Relief Act. On behalf of the Washington Brewers Guild and the Brewers Association (the largest organization of brewers in the United States), The Washington Beer Blog asks that you contact Senator Murray’s office and ask her to support the BEER Act.
As an American, I urge you to contact Senator Murray even if you do not support the BEER Act. However you feel about this issue, our democracy works best when our elected officials hear from their constituents.
To contact Senator Murray’s office you can fill out a simple form online. In the Topic field, select Taxes. Click here to fill out the online form.
Better yet, make a phone call. It is incredibly easy to do. They are not scary people and it is their job to field calls from constituents like you. (202) 224-2621 or toll free (866) 481-9186. I called today and did some of the leg work for you.
Ask for Lauren
When you make the call, remember they are in the Eastern Time Zone. You can leave your message with whichever staffer answers the phone, but it is even better if you ask to speak with Lauren Overman, the Senator’s staff member dealing with tax issues. Ask Lauren where the Senator stands on the Brewers Excise and Employment Relief Act. Make sure the Senator knows that we have 140 small breweries in Washington and that they are growing and creating jobs.
Tell Senator Murray that you want her to join Senator Cantwell in supporting the Beer Excise and Employment Relief Act. Tell her that the BEER Act is good for Washington’s growing craft beer industry and makes economic sense for the nation.
Here is yesterday’s press release from Senator Cantwell:
For Immediate Release
March 9, 2011
Contact: Press Office
(202) 224-8277Cantwell Introduces Small Business Tax Cut to Help Craft Brewers Expand and Create Jobs
With 139 small breweries, WA has one of the biggest small brewing industries in the country
WASHINGTON, D.C. – Today, Senator Maria Cantwell (D-WA) joined in introducing bipartisan legislation that would help small American craft brewers grow their businesses and create jobs. The Brewers Employment and Excise Relief (BEER) Act, led by Senators John Kerry (D-MA) and Mike Crapo (R-ID) and cosponsored by 15 Senators, would reduce the excise tax for small, domestic beer producers, promoting growth and job creation within an industry that employs nearly 100,000 people nationwide.
This bill would benefit both small business craft brewers and hop farmers. Washington state has one of the biggest craft brewery industries in the country, with approximately 139 small breweries across the state, including Pyramid Breweries Inc., Elysian Brewing Co., Georgetown Brewing Co., Redhook Ale Brewery, Schooner EXACT Brewing Co., and Mac & Jack’s Brewery Inc. Washington state also grows the majority of the country’s total hop production – 77 percent in 2010, according to the Hop Growers of America.
“This bill is a winner for Washington small business jobs and for the Washington agricultural industry,” Senator Cantwell said. “Even during these tough economic times, Washington state continues to have a thriving small craft brewing industry that contributes jobs and dollars to our local economy. This bill will build on their success, helping to level the playing field so these small businesses can expand and create jobs in communities across the country.”
The BEER Act would reduce the excise tax for small, domestic beer producers from $7 per barrel to $3.50 per barrel on the first 60,000 barrels produced each year. This reduction would provide approximately $19.9 million per year to help strengthen the nation’s smallest brewers and support their efforts to maintain and create jobs.
In addition, the legislation would reduce the excise tax from $18 per barrel to $16 per barrel on beer production between 60,000 and 2 million barrels, providing small brewers with an estimated additional $27.1 million per year to grow their businesses and create jobs.
The legislation would also raise the production ceiling that defines a small brewer from two million barrels per year to six million barrels per year to more accurately reflect the state of the industry. Since the small brewer tax rate was established in 1976, the annual production of America’s large brewers has grown from approximately 45 million to 105 million barrels while the ceiling defining a small brewer has remained the same.
A March 2010 economic impact study by Dr. John Friedman of Harvard University, which assumed a passage date of January 1, 2010, found that the proposed reduction in the federal excise tax on beer produced by small brewers would increase economic activity by $116 million in 2010 and $734 million over five years. The same study found that the bill would create 4,200 jobs over the next five years, with 2,700 of those jobs created in the first year and 375 in each subsequent year. The study also listed Washington state as one of ten states that would receive the highest impact in terms of increased economic activity and jobs created in the state.
