If anything can unify Congress, it may be the steady flow of jobs and new investment being poured into communities coast-to-coast from beverage alcohol retailers — to the tune of more than $300 billion a year.
In 2017, more than 300 House members banded together in support of a gift to breweries, wineries and distilleries included as part of the Tax Cut and Jobs Act, recalibrating their excise tax payments in hopes of boosting job creation and economic development.
But without any action, those perks are set to lapse on Dec. 31 — threatening to dampen what producers such as Greenwood’s Good Times brewery might be able to churn out in the future.
“It allows us to chug forward that much faster. For us, we’re constantly taking our revenues and investing in expansion, and that basically allows us to continue with that, or add to it,” said Gianpaolo “Geep” Bonaca, owner of the Maxwell Avenue-based brewery.
With companion bills in the House and Senate introduced to make permanent those perks, the Craft Beverage Modernization and Tax Reform Act of 2019 has found allies from both sides of the aisle — including U.S. Rep. Jeff Duncan, R-3rd District.
“There’s no doubt the Tax Cuts and Jobs Act has allowed our economy to flourish, enabled Americans to keep more of their hard-earned money and helped businesses grow and create jobs — including the craft beverage industry,” Duncan told the Index-Journal in a statement. “We should build on the success of the tax reform legislation to ensure these businesses can continue to expand and succeed into the future.”
Beer producers such as Good Times would shoulder a $130 million annual excise tax increase in 2020 without the legislation.
Provisions of the bill include:
- Making permanent a $3.50 excise tax on the first 60,000 barrels and $16 on all subsequent barrels for domestic brewers producing fewer than 2 million barrels a year
- Preserving the $16 per barrel excise tax on the first 6 million barrels for all other brewers and importers
- Maintaining the excise tax of $18 per barrel after the first 6 million barrels
In a letter to Congress, the heads of major industry groups including the Beer Institute, Brewers Association, WineAmerica, the Distilled Spirits Council and United Association of Cider Makers all urged approval of the act.
“Thanks to the overwhelming support of a bipartisan group of over 300 co-sponsors, a two-year version of this bill was included in legislation that was signed into law at the end of 2017. However, without action by this Congress the provisions will expire at the end of this year. Our member companies are actively using the tax savings provided by the Craft Beverage bill to reinvest directly back into their businesses by purchasing new equipment and hiring new employees and this bill will give them the certainty they need to continue that growth,” they said.
“Additionally, our manufacturing and supply chain partners — from can and glass makers to agricultural producers — are also seeing a positive impact. Every state is home to breweries, cideries, distilleries and wineries. These businesses and their employees are active participants in their communities and create billions in economic development and tourism dollars.”