Small craft breweries to save big under new tax law

On Monday, the new Republican-passed tax reform plan will take effect, and some High Desert craft breweries stand to benefit in a big way.

When the tax bill becomes law, $4.2 billion in tax cuts will be given to breweries nationwide that produce under 2 million barrels a year. Currently, small craft breweries pay an excise tax of $7 on each barrel of beer. The new rules cut that in half for the first 60,000 barrels of beer. So what was once $7 a barrel in federal excise taxes will be just $3.50.

GoodLife Brewing in Bend produces about 20,000 barrels of beer a year. The brewery’s co-owner, Jason Stuwe, said Thursday they are looking forward to what the tax plan has to offer.

“I know on the excise tax alone, we’re probably looking in the neighborhood of $70,000 that we’re going to save,” Stuwe said. “That money is going to just go right back in the pockets of the brewery, which is going to be turned into more equipment expansion, and bodies and labor as well.”

Stuwe said the new equipment could include tanks, fermentation vessels and a bottling line down the road.

Oregon has about 230 breweries that qualify for the tax cuts. And at last report, Central Oregon had 36 breweries producing less than 2 million barrels a year.

According to the Brewers Institute, the tax breaks could encourage $320 million in yearly economic growth for the industry.