Author Topic: The most expensive ingredient in beer...  (Read 3154 times)

Offline duboman

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Re: The most expensive ingredient in beer...
« Reply #15 on: February 25, 2015, 11:37:26 PM »

Keep in mind we are still paying taxes on ingredients we buy. $7 a bbl plus the state taxes end up being a huge chunk when you add that ontop on everything else.
You pay taxes on malt, hops, and yeast? I've always thought they were exempt as food.
Here in Chicago we pay taxes on everything, state, local and federal, I would love to live somewhere tax was exempt on food and food products, 10% is the minimum on most goods, food is 8 and alcohol and gas, OMG, its ridiculous and our state is still bankrupt!
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Online brewday

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Re: The most expensive ingredient in beer...
« Reply #16 on: February 25, 2015, 11:45:31 PM »

Keep in mind we are still paying taxes on ingredients we buy. $7 a bbl plus the state taxes end up being a huge chunk when you add that ontop on everything else.
You pay taxes on malt, hops, and yeast? I've always thought they were exempt as food.
Here in Chicago we pay taxes on everything, state, local and federal, I would love to live somewhere tax was exempt on food and food products, 10% is the minimum on most goods, food is 8 and alcohol and gas, OMG, its ridiculous and our state is still bankrupt!

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Offline narvin

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Re: The most expensive ingredient in beer...
« Reply #17 on: February 26, 2015, 02:16:07 AM »
I'm not sure about every state, but in most a business purchasing raw ingredients for resale in a manufactured product is exempt from sales tax.
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Offline majorvices

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Re: The most expensive ingredient in beer...
« Reply #18 on: February 26, 2015, 12:42:15 PM »


And don't even get me started about the taxes on gasoline that are hidden in the purchase price.  Should we include that as a brewery tax as well?

Hell, why not.

Offline anthony

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Re: The most expensive ingredient in beer...
« Reply #19 on: February 26, 2015, 03:16:12 PM »
I'm not sure about every state, but in most a business purchasing raw ingredients for resale in a manufactured product is exempt from sales tax.

In Illinois, you simply provide a CRT-61 to the vendor/store/supplier/whatever.

Offline Slowbrew

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Re: The most expensive ingredient in beer...
« Reply #20 on: February 26, 2015, 03:33:23 PM »


And don't even get me started about the taxes on gasoline that are hidden in the purchase price.  Should we include that as a brewery tax as well?

Hell, why not.

Our gas tax here in Iowa goes up by $.10/gallon on Sunday.  Law was signed this week.  The explanation was literally "gas prices are down, now is the time to raise the taxes before the prices go up again".  I don't deny we need funds to repair roadways but they could, at the very least, not openly sell it as "the public is too stupid to notice the tax went up and will blame the oil companies".

Iowa liquor stores (they were all state owned at one time) used to have a poster that had a liquor bottle on it with %'s of the cost marked off.  Under 10% was product cost.  The rest was taxes. 

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Offline dwl

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Re: The most expensive ingredient in beer...
« Reply #21 on: March 21, 2015, 07:41:56 PM »
There are many taxes, all of which end up as a percentage of beer production cost.

Most states you pay property taxes on the building.  In some you also pay property tax on all the equipment, vehicles, supplies, etc.  In Oregon you will pay property tax on every bit of equipment of any kind that is not already being taxed as part of the building.  Also all sales material, brochures, glassware, and office supplies down to paper clips -- everything used except ingredients to make beer or finished beer inventory.  It's nuts.

Also, if you have employees you will be paying FICA tax, workers comp, unemployment, and probably more depending on state and city.  And if you manage so show income after all expenses then you will be paying income tax on that too.

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Offline nateo

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Re: The most expensive ingredient in beer...
« Reply #22 on: April 06, 2015, 10:54:28 PM »
Is it just raw material? RM+ labor? RM + Labor + utilities and rent? How about amortization on equipment?

Exactly. The most expensive ingredient in beer is time.
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Offline Pawtucket Patriot

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Re: The most expensive ingredient in beer...
« Reply #23 on: April 29, 2015, 12:58:26 AM »
I don't think our taxes are as high as 40% of our costs, but they definitely add up. We pay federal excise tax on what we produce (fortunately, we are exempt from state excise taxes...for now). Then, we pay sales tax on what we sell at retail in our taproom. Sales tax is levied against us at a higher rate than normal in our city because the product we're selling is an alcoholic beverage. I would assume that's fairly common in most larger metropolitan areas.

We don't get taxed on our raw materials, thankfully. But I would guess that there are import tariffs levied on the importers/suppliers that get passed on to us in the form of higher ingredient costs. The vast majority of our malt comes from overseas, as we specialize in what we refer to as "iconic lager styles" (read: lots of imported European malt). You could count the huge fees we pay to the city and state for licensure (both to operate as a brewer and as a retail taproom) as tax-like fees – the hit we take from those fees is pretty substantial.

edit: Oh, and then we get taxed on our income on both the state and federal level, which is generated from beer sales that have already been subject to excise tax, sales tax or both. Lots of double (maybe even triple) taxation going on there.
« Last Edit: April 29, 2015, 01:01:55 AM by Pawtucket Patriot »
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Re: The most expensive ingredient in beer...
« Reply #24 on: April 29, 2015, 12:49:48 PM »
I don't think our taxes are as high as 40% of our costs, but they definitely add up. We pay federal excise tax on what we produce (fortunately, we are exempt from state excise taxes...for now). Then, we pay sales tax on what we sell at retail in our taproom. Sales tax is levied against us at a higher rate than normal in our city because the product we're selling is an alcoholic beverage. I would assume that's fairly common in most larger metropolitan areas.

We don't get taxed on our raw materials, thankfully. But I would guess that there are import tariffs levied on the importers/suppliers that get passed on to us in the form of higher ingredient costs. The vast majority of our malt comes from overseas, as we specialize in what we refer to as "iconic lager styles" (read: lots of imported European malt). You could count the huge fees we pay to the city and state for licensure (both to operate as a brewer and as a retail taproom) as tax-like fees – the hit we take from those fees is pretty substantial.

edit: Oh, and then we get taxed on our income on both the state and federal level, which is generated from beer sales that have already been subject to excise tax, sales tax or both. Lots of double (maybe even triple) taxation going on there.

Sorry for the off-topic Matt, what is your brewery? ( I am in MN as well) Thanks

Offline boulderbrewer

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Re: The most expensive ingredient in beer...
« Reply #25 on: April 29, 2015, 01:31:15 PM »
Just in case Matt doesn't answer. Here is a link.

 http://bauhausbrewlabs.com/
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rabeb25

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Re: The most expensive ingredient in beer...
« Reply #26 on: April 29, 2015, 01:33:47 PM »
Oh, no s***!?? I have been there..

Offline Pawtucket Patriot

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Re: The most expensive ingredient in beer...
« Reply #27 on: April 29, 2015, 02:41:57 PM »
Oh, no s***!?? I have been there..

Nice - hope you had a good time!
Matt Schwandt | Minneapolis, MN
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