Wyden bill would make craft brewers’ tax reform permanent

Senate Finance Committee Ranking Member Ron Wyden, D-Ore., and Senator Roy Blunt, R-Mo., introduced legislation Wednesday they said is designed to help ensure the continued growth of America’s craft beverage industry by making permanent tax reform and rule modernization adopted in 2017 but set to expire at the end of the year.

The Craft Beverage Modernization and Tax Reform Act would permanently establish reduced taxes and modernized regulations for brewers, cider makers, vintners and distillers to further promote job creation in each industry, the pair said.

In 2016, the brewing industry alone contributed more than $350 billion to the U.S. economy, directly and indirectly employing about 2.23 million Americans, the lawmakers said. The wine industry contributed $220 billion and 1.7 million jobs, and spirits contributed more than $173 billion and 1.5 million jobs.

“People around the world enjoy Oregon wine, craft beer, cider and spirits — providing not only a serious source of home state pride but also a huge boon to our state’s economy,” Wyden said. “By modernizing burdensome rules and taxes for craft beverage producers, this legislation will level the playing field and allow these innovators to further grow and thrive.”

“The craft beverage industry is driven by small businesses that support thousands of jobs and contribute billions in economic output,” said Blunt. “This bill will remove tax and regulatory barriers that are making it harder for Missouri’s brewers, distillers, and winemakers to grow and compete. I’m encouraged by the strong, bipartisan support this measure had in the previous Congress and look forward to working with our colleagues to get it to the president’s desk.”

The Craft Beverage Modernization and Tax Reform Act is co-sponsored by Sens. Thomas R. Carper, D-Del., Pat Roberts, R-Kan., Debbie Stabenow, D-Mich., Jerry Moran, R-Kan., Robert P. Casey Jr., D-Pa., Rob Portman, R-Ohio, Michael F. Bennet, D-Colo., Shelley Moore Capito, R-W. Va., Tammy Baldwin, D-Wis., and Cory Gardner, R-Colo.

A one-page summary of the legislative proposal can be found here. A longer, section-by-section summary can be found here and legislative text can be found here.

Dan Engler, President of the Oregon Brewers Guild and founder of Occidental Brewing: “The Oregon Brewers Guild is pleased to support Senator Wyden’s efforts to pass the CBMTRA. The Act is a critical step toward bringing regulation of beer and other beverage industries into the twenty first century. By reducing excise taxes and streamlining regulations, as well as funding regulators, the CBMTRA will help small brewers free up valuable financial and human resources they can use to maintain a vibrant and thriving industry, continuing to innovate and be economic drivers in their communities.”

Tom Danowski, President and Chief Executive Officer of Oregon Winegrowers Association: “Oregon’s family winemakers and growers, along with the other businesses propelling our state’s $5.6 billion wine economy, will see a range of important benefits from this legislation. Lower taxes, reduced regulation and the flexibility to respond to each vintage’s unique conditions will enable increased investments to enhance wine quality, expand distribution and improve efficiencies allowing Oregon to compete more effectively in the intensely competitive global market for fine wines. Accelerating Oregon’s wine sector drives job creation, tourism revenue and asset appreciation in Oregon’s rural communities.”

Gary Fish, Founder of Deschutes Brewery and former Chairman of the Brewers Association Board of Directors: “We remain thankful to Senator Wyden for his dedication to small brewers and small business. His support of the Craft Beverage Modernization and Tax Reform Act has helped small brewers not just in Oregon, but across the U.S. to sustain and grow their businesses; hiring workers and helping their communities. Making this temporary act permanent would help insure the long-term viability of the industry and thousands of small, family owned businesses like ours. Senator Wyden and his support for these businesses has been, and is, critical.”

Anne Hubatch, Co-owner of Alter Ego Cider and Vice President of the Northwest Cider Association: “The Craft Beverage Modernization Act has made real and lasting impacts to my small business. As a micro-craft cidery, this act helps us to save on our excise taxes which in turn keep more money in the business to grow and invest in more staff and equipment.”

Thomas Mooney, founder of Portland, Oregon’s Westward Whiskey and the inaugural President of the American Craft Spirits Association: “We are grateful for Senator Wyden’s fervent and unwavering support for equitable Federal Excise Tax rates. The temporary rates in place since January 1, 2018 have allowed our community of nearly 2,000 craft distillers to grow dramatically, and to create thousands of new jobs across America. Now, we are at a crossroads. Permanent extension of current FET rates will allow our nation’s craft distillers to continue on their job-creating growth trajectory, whereas allowing FET rates to revert to pre-2018 levels would pose an imminent threat to our industry and to the jobs we have worked so diligently to create.”

Ed King, CEO and Co-Founder of King Estates Winery: “Senator Ron Wyden’s remarkable Craft Beverage Modernization and Reform bill is a powerful approach to righting many wrongs in modern craft alcohol beverage regulation. The bill addresses beer, wine and spirits issues across the US–targeting many heavy, illogical bureaucratic requirements and reducing the taxes that limit business growth. Each of the beverage groups–beer, wine, and spirits–have their own specific treatment here, as should be the case.”

Jeff Parish, Co-Founder of Portland Cider Company and Committee Member of the United States Association of Cider Makers: “As a cider maker, the temporary CBMTRA allowed me to purchase new equipment, hire new staff and grow my business. If the excise tax credits go away, I have to reverse those choices. We’re hopeful the permanent version of the bill passes, so we can plan with certainty for a growth-future.”