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Brewers do battle again over US beer tax with rival proposals

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The battle between US craft brewers and big beer firms over beer tax has entered US Congress again after two competing bills were re-introduced. 

The fight over how US excise taxes on beer should be levied has        re-started

The fight over how US excise taxes on beer should be levied has re-started

The Beer Institute, whose biggest members include Anheuser-Busch InBev and MillerCoors, is backing the Fair Brewers Excise and Economic Relief Act, branded the 'Fair Beer' Act. Under the plans, brewers would pay a “rising scale” of excise tax.

No duty would be paid on the first 7,143 barrels produced, which would cover around 90% of all US brewers. On top of that would be three extra rate levels, with the highest rate seeing brewers taxed $18 per barrel on every barrel produced after the 2m threshold. 

"This comprehensive reform bill supports brewpubs, microbrewers, national craft brewers, major brewers, and importers alike and encourages their entrepreneurial spirit, which is exactly the spirit we need to get America's economic engine going again,” said Republican Representative Steve Womack, who is sponsoring the bill.

Under current law, small brewers are defined as those which produce up to 2m barrels, and are taxed at $7/barrel on the first 60,000 barrels and $18 on every barrel thereafter. 

However Bob Pease, CEO of the Brewers Association's (BA), representing small, independent producers, claimed that the 'Fair Beer Act' will give “further tax advantages to multinational brewing companies”.

Instead, the BA favours the Small Brewer Reinvestment and Expanding Workforce Act (BREW) Act, known as the 'Small Brew Act'. The Act would see the smallest brewers and brewpubs pay $3.50 tax on their first 60,000 barrels. Brewers producing between 60,001 and 2m barrels, would be taxed at $16 per barrel. Firms producing more than 2m barrels per year would be taxed at the current rate of $18 per barrel. 

The Act also changes the threshold definition of a small brewer so that breweries with annual production of 6m or fewer barrels would qualify for the new tax rates.

Pease added: “We stand firmly rooted in our support for the Small Brew Act, fair legislation that will allow small brewers to remain competitive in the marketplace, reinvest in their businesses, reinvigorate local economies and continue their role in rejuvenating the job market in the US.”

In the last session of Congress, the 'Small Brew Act' gained signatures from 182 House members and 47 in the Senate. The BEER Act, which was a different version, attracted support from 114 in the House and 12 senators, according to the The Hill website

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