- Senate Republicans added an amendment to the Trump-backed GOP tax plan that would cut craft brewers’ excise tax in half.
- The craft-beer industry has been fighting to cut taxes for years.
- According to a craft-beer industry leader, this would be “monumental” if passed.
The GOP tax plan could slash a tax on craft beer in half.
The long list of changes that Senate Republicans made to their tax plan Tuesday night includes an amendment that reduces craft brewers’ excise tax from $US7 per barrel to just $US3.50 per barrel on their first 60,000 barrels.
That effectively halves almost every American craft brewers’ tax rate, dropping to 22.6 cents a gallon from roughly 58 cents a gallon.
“If that amendment … were to become law, it would be monumental for small and independent craft brewers,” Bob Pease, the CEO of the Brewers Association, told Business Insider.
The amendment would also cut excise taxes for bigger brewers from $US18 a barrel to $US16 a barrel.
Originally, Pease said, craft brewers pushed for tax reduction exclusively for small, independent brewers, but they found more congressional support when Big Beer also had something to gain.
Craft brewers have been fighting for this change for years. The amendment added on Tuesday is a variation on legislation that was introduced previously but hadn’t yet passed, despite garnering support from the majority of US senators.
However, don’t expect prices on your favourite beers to drop just because they’re paying less in taxes. According to Pease, craft brewers see this as a way to reinvest more money into their businesses, rather than reduce beer prices.
“When small and independent brewers make more beer, they hire more workers,” Pease said. “Our members, our segment have created 130,000 jobs in the last 25 years.”
Business Insider Emails & Alerts
Site highlights each day to your inbox.