Blog: Tax issue is no small beer for US brewers
James Wilmore | 17 May 2013
The gloves are off in Washington DC as the big (and the not so big) brewers tussle with small brewers over tax.
In the red corner, are the likes of Anheuser-Busch InBev and MillerCoors, who are backing the 'Brewers Excise and Economic Relief Act of 2013', otherwise known as the BEER Act.
Under the Act, introduced in the House of Representatives last week, the federal excise tax on beer for all brewers and beer importers would be cut.
This is the proposal:
· Small brewers would pay no federal excise tax on the first 15,000 barrels; US$3.50 on 15,001 to 60,000 barrels and $9 per barrel for every barrel over 60,000 and up to 2m barrels
· Brewers producing more than 2m barrels annually, and for all beer importers regardless of size, the federal excise tax rate would be $9 per barrel for every barrel
The Beer Institute, the US trade body which represents the big brewers, claims this a "fair, equitable tax policy".
However, in the blue corner representing smaller, craft brewers, the Brewers Association (BA) is not impressed. An alternative act, the Small BREW Act, which reached the Senate last week, seeks cuts only for smaller scale producers.
But it is a tangled web, as Jason Notte explains, writing on The Street website. For one, Brooklyn Brewery is among those supporting the BEER Act. Meanwhile, he suggests that the levels proposed in the Act would imply that Boston Beer Company is not a craft brewer, which is part of the reason the BA changed its defintion two years ago.
Meanwhile, Deschutes Brewery founder Gary Fish also found himself caught between the two.
Who'll be left standing?
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