Wyden, Merkley back bill to cut craft brewers’ excise tax

Sens. Ron Wyden and Jeff Merkley, D-Ore., announced Thursday they are co-sponsoring a bill to stimulate the growing craft brewing industry in Oregon and nationwide by reducing the excise tax on each barrel of beer brewed by small brewers.

The bill, S. 375, the Small Brewer Reinvestment and Expanding Workforce Act, or Small BREW Act, would also change the threshold definition of a small brewer to better reflect modern production.

A reduced excise tax and a more accurate definition of a small brewer would have a huge impact in Oregon, which ranks No. 1 in breweries per capita with 221 small and independent breweries directly employing more than 6,600 people and contributing more than $2.8 billion to Oregon’s economy.

“It’s no surprise that Oregon small brewers are an economic powerhouse in our state when they make some of the world’s best beer,” said Wyden, Ranking Member of the Senate Finance Committee, which oversees excise taxes, and Co-chair of the Senate Bipartisan Small Brewers Caucus. “Helping this industry helps to grow our state’s economy, and that’s worth toasting any day of the week.”

“This bill is an opportunity to create jobs while supporting Oregonians who take immense pride in their craft and brew a darn good pint of beer,” said Merkley.

The Small BREW Act of 2015 would reduce the federal excise tax on every one of America’s small craft brewers.

Under federal law, brewers producing fewer than 2 million barrels annually pay $7 per barrel in federal excise taxes on the first 60,000 barrels they brew, and $18 per barrel on every additional barrel (one barrel = 31 gallons).

Under the Small BREW Act, the rate would be $3.50 per barrel on the first 60,000 barrels. For production between 60,001 and 2 million barrels, the rate would be $16 per barrel. Then, the rate would be $18 per barrel.Breweries with annual production of 6 million or fewer barrels would qualify for these new tax rates.

“We would like to thank Senator Wyden and Senator Merkley for being co-sponsors of the Small Brewer Reinvestment and Expanding Workforce Act,” said Brian Butenschoen, executive director of the Oregon Brewers Guild. “The bill would allow the 179 brewing companies operating 221 breweries in 71 cities across Oregon to expand their operations, hire more workers and to continue to support local farmers, tradespeople and manufacturers.

Both senators have been advocates for small-brewer issues, and their support for S. 375 will help small brewers create new jobs, grow and support both rural and urban communities across Oregon.”

Because of differences in economies of scale, small brewers have higher costs for raw materials, production, packaging and market entry compared to larger, well-established multinational competitors, the senators noted.

Adjusting the excise tax rate would provide small brewers nationally with an additional $65-$70 million each year they could use to start or expand their businesses on a local, regional, or national scale.

The small-brewer threshold and tax rate were established in 1976 and have never been updated. Since then, the largest multinational producer of beer has increased its annual production from 45 million barrels to 97 million barrels domestically and 325 million barrels globally.

Raising the ceiling that defines small breweries from two million barrels to six million barrels more accurately reflects the intent of the original differentiation between large and small brewers in the U.S.

Original co-sponsors on the bipartisan bill introduced this week by Sens. Ben Cardin (D-Md.) and Susan Collins (R-Maine) include Senators Tammy Baldwin (D-Wis.), Thad Cochran (R-Miss.), Richard Blumenthal (D-Conn.), Mark Kirk (R-Ill.), Tom Carper (D-Del.), Lisa Murkowski (R-Alaska), Bob Casey (D-Penn.), Rob Portman (R-Ohio), Maria Cantwell (D-Wash.), Chris Coons (D-Del.), Martin Heinrich (D-N.M.), Mazie Hirono (D-Hawaii), Angus King (I-Maine), Patrick Leahy (D-Vt.), Ed Markey (D-Mass.), Bob Menendez (D-N.J.). Barbara Mikulski (D-Md.), Chris Murphy (D-Conn.), Bernie Sanders (I-Vt.), Charles Schumer (D-N.Y.) and Amy Klobuchar (D-Minn.).