USA: Majority of Congress in favor of permanent tax cut for brewers

The majority of Congress is now in favor of a permanent implementation of the Craft Beverage Modernization and Tax Reform Act (CBMTRA), which offers a significant tax cut especially for craft brewers, small wineries and spirit makers.

The support for the legislation by the majority of the House and Senate was celebrated by a coalition of U.S. alcohol trade associations including the Brewers Association, Beer Institute, Distilled Spirits Council of the United States, American Craft Spirits Association, Wine Institute, WineAmerica and the United States Association of Cider Makers.

The CBMTRA was implemented as part of the Tax Cuts and Jobs Act in 2017 and was set to expire at the end of 2019 (, 13.6.2017). With the support in both chambers the permanent extension of the act is now very likely to be made permanent if called for a vote.

“This level of bipartisan, bicameral support for a bill in a divided Congress is rare, but because of your help, we’ve been able to reach this level of support in record time,” Jim McGreevy, president and CEO of the Beer Institute (BI) wrote in an email to its members on Thursday.

“This commonsense legislation will provide a much-needed certainty, so all brewers and beer importers can continue to innovate and invest in their companies to meet consumer demand for America’s most popular alcohol beverage – beer,” McGreevy said.

“As a result of the changes made in the Tax Cuts and Jobs Act, 99% of U.S. breweries’ excise tax payments will be reduced by 50%. Large and regional beer suppliers, which jointly provide 58% of beer’s direct brewing jobs, will see their excise tax payments reduced by an average of 3%. In fact, 73% of the beer volume sold in the U.S. will continue to be taxed at $18 per barrel,” the BI stated on its website.

“This is not a bill about lowering alcohol prices or beer prices,” said Bob Pease, president and CEO of the U.S. Brewers Association. “This is about small business, job creation, economic revitalization and urban manufacturing.”

“I recently met with brewers, and one told me that tax breaks have allowed them to offer health insurance for the first time,” United States Senator for Oregon Ron Wyden told CNN. “These small businesses need certainty to plan for the future, which is why it’s so important to make these reforms permanent.”

The CBMTRA provides for the following tax reductions:

  • Reduction of the federal excise tax to USD 3.50 per barrel on the first 60,000 barrels for domestic brewers producing fewer than 2 million barrels annually;
  • Reduction of the federal excise tax to USD 16 per barrel on the first 6 million barrels for all other brewers and all beer importers; and
  • No reduction and payment of USD 18 per barrel rate for barrelage over 6 million.

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