Bend brewers back cut in excise tax on beer

For every beer we drink, there is a tax factored in that breweries pay long before the suds even hit your lips.

It’s not much for a single pint of beer, but by the barrel, it adds up fast for local breweries — money they say could instead go to hiring more workers.

“It’s a significant amount of money paid regardless of whether or not the company is profitable,” said Gary Fish, president of Deschutes Brewery.

Now lawmakers from Oregon are pushing others in Congress to cut the excise tax for breweries.

The move would save thousands dollars for local breweries in Central Oregon.

Fish says his fast-growing company is on track to produce 250,000 barrels of beer just this year.

“We pay on the first 60,000 barrels a reduced rate of $7 per barrel,” Fish said. “Once we hit 60,000, that rate goes up to $18 a barrel.”

Breaking down the numbers, the company will pay about $3.8 million in just federal excise taxes this year.

Deschutes Brewery says cutting the tax for the first 60,000 barrels in half and trimming the $18 per-barrel tax to $16 would be good for Central Oregon.

“It’s going to right around $500,000 a year (in lower taxes) to us, which we will use to continue to grow and hire more people,” said Fish.

Across town, at 10 Barrel Brewing, the message is much of the same for the fast-growing brewery.

“We are in a situation now where just like everyone else in every other industry, we are battling rising raw material costs, fuel costs — I mean, these are things our industry absolutely depends on,” said Garrett Wales of 10 Barrel Brewing

Brewers say relief on the excise tax that only companies in that industry pay would be big for their bottom line.

“It’s a large burden that we carry with that tax,” said Wales. “So any reduction in that is obviously very welcome and would really feel more fair.”

Critics of the proposed tax cut say it would deal another blow to moves to balance the federal budget while preserving needed programs.

As more beer continues to brew in Central Oregon, the debate in the nations capital continues, whether or not to cut a tax established during the civil war.