BEER Act brews up tax relief for small producers

COEUR d’ALENE — It’s a brew-friendly bill that would help all the smaller suds producers across the nation.

And it has big names and bipartisan support behind it.

Drafted by U.S. Sens. Mike Crapo of Idaho and John Kerry of Massachusetts, the Brewer’s Employment and Excise Relief — or BEER — Act would reduce the beer excise tax by half for America’s small brewers.

Think big relief for smaller venues.

“We do pay quite a bit of tax,” said Fred Colby, owner of Laughing Dog Brewing, a Ponderay establishment that plans on brewing 3,000 to 5,000 barrels this year. “It’s always nice to get a little bit of a break, especially for small businesses like us.”

The change would implement a $3.50 graduated beer excise tax rate per barrel — down from the current $7 — for producers who turn out 20,000 barrels of beer or less each year.

If it’s adopted, Colby would saving around $15,000, money that he would likely use to hire more employees for his six-year-old business.

“It does even the playing field out a little bit,” he said.

Crapo toured the brewery last year and talked with Colby about possibly reducing the tax.

On a bigger scale, it could help about 1,525 breweries nationwide save around $19.9 million per year to expand and generate jobs, according to a press release from Crapo’s office.

The proposal would also knock the tax rate from producers that turn out between 60,000 and 2 million barrels a year from $18 to $16 per barrel, allowing brewers to pocket an additional $27.1 million per year.

Around 100,000 people work at the roughly 1,600 small breweries that would be affected.

“It had good, strong, bipartisan support, but last session there was too much other stuff that came up,” said Lindsay Nothern, press secretary for Crapo’s office. “We think for all the right reasons, it has a lot of merit.”

It was introduced March 9.

Nothern said it could be three months before anything is decided, but Crapo, a Republican, is also on the Finance Committee that deals with tax topics.

“I think it’s got a lot better chance to go forward this year,” Nothern said.

The small brewer tax rate was established in 1976 and has never been updated. Kerry and Crapo meanwhile, spearheaded the proposed change since Idaho and Massachusetts are home to dozens of small breweries.

“I met with many craft brewers who are seeking to expand their business because they are seeing increased demand for their product,” Crapo said in the release about touring Idaho breweries last year. “In addition, this legislation will expand the ready markets for our barley, wheat and hops producers in Idaho.”

Kerry said the change would help small businesses stay competitive with bigger brewers.

 Co-sponoring it as well is Sen. Matt Brown, also of Massachusetts.

“This bill will help ensure that these small businesses keep people on the payroll and create jobs even during tight economic times,” Kerry said.

Chase Sanborn, owner of The Wallace Brewing Company, said the bill would cut his tax bill by half.

That’s big savings for the 2-year-old business in downtown Wallace that could expand in the future.

“We’re still in a growth state, it’s just going to help out,” he said of his 2,000 barrel-a-year business.

One thing is certain, he said, Idaho and breweries have a long history together, including in Wallace, where a brewery in some form has been there since 1890.

“I think it is a good part of the tradition,” he said. “Whenever you have natural resources like mining and logging, you’re going to have alcohol producers.”