Author Topic: Beer Excise tax legislation  (Read 636 times)

Offline phunhog

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Beer Excise tax legislation
« on: February 17, 2015, 01:27:11 AM »
I noticed that the BA has put forth legislation to reduce beer excise taxes. I also noticed that "Big Beer" also has a competing excise tax reduction bill.   http://www.craftbrewingbusiness.com/news/the-beer-act-vs-the-small-brew-act-whats-the-difference/     Here is what I don't get....it appears that the BA tax plan cuts excise taxes in half for small breweries (under 60k bbl) but under the "Big Beer" legislation it completely eliminates excise taxes for breweries for under 15k bbl!! It has the same tax rate for breweries as the BA plan for breweries  15K-60k.  Doesn't the BA have this backwards?  Shouldn't they be putting forth legislation that eliminates excise taxes on the breweries under 60k bbl production?  I am thinking of my small local breweries.  Under the BA plan their federal excise taxes are cut in half but under the Big Beer plan they are eliminated.  What am I missing here?

Offline 69franx

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Re: Beer Excise tax legislation
« Reply #1 on: February 17, 2015, 01:40:28 AM »
Big beer seems to be pushing to help themselves. BA is looking to help the small guy who can't stay in business with heavy taxation. Big beer likes that idea if it includes them, so they are trying to push their own agenda
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Offline 69franx

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Re: Beer Excise tax legislation
« Reply #2 on: February 17, 2015, 01:41:42 AM »
That's just what I have heard here, not involved, not a lawyer, but rooting for the little guy all the way
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Offline BrewingRover

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Re: Beer Excise tax legislation
« Reply #3 on: February 17, 2015, 01:48:22 AM »
Think about the incentives under the big beer plan -- no excise tax as long as you stay small and then bam!, hit with a huge tax burden as soon as you hit 15,001. Your incentive is to stay under that 15K. I'd prefer to be paying a small rate  starting out, so I could go up to 60K and not worry about the increase in tax.
It's such a fine line between stupid and clever.

Offline phunhog

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Re: Beer Excise tax legislation
« Reply #4 on: February 17, 2015, 02:27:28 AM »
Think about the incentives under the big beer plan -- no excise tax as long as you stay small and then bam!, hit with a huge tax burden as soon as you hit 15,001. Your incentive is to stay under that 15K. I'd prefer to be paying a small rate  starting out, so I could go up to 60K and not worry about the increase in tax.

I am not so sure about that.  I am guessing it is like the federal income tax. You start paying tax on every barrel of beer over 15k.  So if you produced 16k bbl you would only be taxed on 1k bbl. 
It just seems like the vast majority of craft breweries are easily under 15k bbl.  So they would pay no excise tax!  Under the BA plan a 10k bbl craft brewery would pay 35k in excise taxes yet under the "Big Beer"  bill the same craft brewery would pay nothing!  Like I said I must be missing something since I can't imagine the BA would have a worse plan for small breweries.

Offline Thirsty_Monk

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Re: Beer Excise tax legislation
« Reply #5 on: February 17, 2015, 02:29:45 AM »
15,000 BBL is a lot of beer to sell if you ask me.
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Offline BrewingRover

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Re: Beer Excise tax legislation
« Reply #6 on: February 17, 2015, 02:35:47 AM »
Think about the incentives under the big beer plan -- no excise tax as long as you stay small and then bam!, hit with a huge tax burden as soon as you hit 15,001. Your incentive is to stay under that 15K. I'd prefer to be paying a small rate  starting out, so I could go up to 60K and not worry about the increase in tax.

I am not so sure about that.  I am guessing it is like the federal income tax. You start paying tax on every barrel of beer over 15k.  So if you produced 16k bbl you would only be taxed on 1k bbl. 
It just seems like the vast majority of craft breweries are easily under 15k bbl.  So they would pay no excise tax!  Under the BA plan a 10k bbl craft brewery would pay 35k in excise taxes yet under the "Big Beer"  bill the same craft brewery would pay nothing!  Like I said I must be missing something since I can't imagine the BA would have a worse plan for small breweries.
You're right, it doesn't kick in on the first 15K. The BA statement isn't very helpful, either. There's a big infographic that throws numbers around, but doesn't explain why.
http://www.brewersassociation.org/press-releases/statement-on-beer-act/
It's such a fine line between stupid and clever.

Offline phunhog

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Re: Beer Excise tax legislation
« Reply #7 on: February 17, 2015, 02:40:43 AM »
15,000 BBL is a lot of beer to sell if you ask me.
Thirsty...you are a pro brewer right?  Love to hear your take on it! Why would the BA draft legislation that only cuts small brewers taxes in half when the competing legislation eliminates it completely?  For a small brewery I can only imagine how huge that would be to not pay federal excise taxes.

Offline Thirsty_Monk

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Beer Excise tax legislation
« Reply #8 on: February 17, 2015, 02:49:51 AM »
I am familiar with BA effort but not the other one.

Everybody situation is just a little different and less we pay better it is.

I do not produce large amount of beer and filing the paperwork is more annoying then $ amount we pay. But then it is the rule to obey and we knew it before we started.

So I really do not have strong opinion.
If I would not pay federal portion I could buy one pallet of 1/2 BBL kegs. That's about it.
« Last Edit: February 17, 2015, 02:52:22 AM by Thirsty_Monk »
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On Tap At The TapRoom:
Bohemian Pilsner
Bohemian Dark Lager
Smoked Bock
MaiBock
American Brown Ale
Marzen
Root beer

Offline gatza

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Re: Beer Excise tax legislation
« Reply #9 on: February 17, 2015, 07:06:33 PM »
The Small BREW Act is the bill supported by the Brewers Association. The Small BREW Act is constructed so that it has an actual chance to pass. The BEER Act, pushed by the group (Beer Institute) that represents the large, global companies and two major importers is constructed as a defensive bill aimed at preventing excise tax increases. Of course the legislative efforts do not "belong" to either organization, but are under the control of member of Congress. The infographic at http://www.brewersassociation.org/wp-content/uploads/2015/02/FET-GRAPHIC.pdf goes through the detail of the two bills. The Beer Institute's bill is not aimed at passage, but aims to block the Small BREW Act from passage by causing confusion and doesn't claim to be a jobs creation bill, but instead provides huge benefit to foreign brewers and their importers who expatriate their profits. Why should the U.S. Congress give away tens of millions of dollars to foreign companies?
It should be noted that the BEER Act moved significantly closer to what the Small BREW Act calls for in this session of Congress. The BEER Act no longer calls for a $1.5 billion-plus tax cut for the global giant brewers. The element that looks good with the BEER Act is the elimination of federal excise tax for brewers under 15k barrels per year. If our legislative champions wish to include that provision down the road, I do not think the Brewers Association board of directors would object. It just isn't realistic in the current budget environment.  The BEER Act doesn't have a realistic chance of passage. The BEER Act has always been aimed at signing up co-sponsors to say beer deserves a tax break so that it would be harder for members of Congress to support a tax increase. It is a defensive bill aimed to clog the system. The Small BREW Act has a chance to pass and will create jobs.

Bob Pease & Paul Gatza
Brewers Association staff