The biggest expense for breweries, large and small, is often excise taxes. Brewers must pay a tax on every barrel of beer they create, whether that beer is sold or not. This is particularly hard on small breweries which often have very small profit margins.
The Brewers Association has been working for some time to get the government to lower excise taxes for small brewers and has seen some progress on the issue. Bills are working their way through the House and Senate right now which would give some much needed tax relief for small brewers.
Beer and alcohol are often villainized in the media so it’s nice to see this piece from ABC explaining how reducing excise taxes could mean a boost for the economy. (Beware there is video on the page which begins with a loud commercial as soon as the page loads, which is why I chose not to embed it here.)
According to an estimate in a Harvard University study, reducing the excise tax would create more than 2,700 new jobs in the first year to 18 months and an average of 375 new jobs per year over the following four years.
Brady, the co-author of the bill, said although it isn’t a priority for Congress to do, it is a serious bill that could create a lot of jobs.
“I know, considering we are fighting a war, the economy and the oil spill, this isn’t the top of Congress’ agenda, but this is a chance to increase jobs,” Brady said. “Beer has gone global. We have these small craft brewers that can bring amazing new tastes in the market.”
The video features some well-known craft brewers and is worth watching, once you get past the commercial.