By: Brian Pedersen
First published in Lehigh Valley Business on January 17, 2020, which you may view if you have a subscription.
The extension of the excise tax on brewing is a win-win, says Chris Lampe, president of the Brewers of Pennsylvania and an owner of Weyerbacher Brewing Co. in Easton.
Brewers can breathe a little easier. And so can beer drinkers.
Congress enacted legislation that will avoid a massive tax hike on beer in 2020.
For now.
As 2019 ended, the Brewers of Pennsylvania and other beer industry groups lobbied Congress to pass the Craft Beverage Modernization and Tax Reform Act, or extend the current excise tax rate before Dec. 31.
They extended the tax.
Not doing so would have meant higher taxes for brewers across the state and potentially, higher prices for consumers. However, for brewers, the $3.50 per barrel tax will remain. Had Congress not acted, the tax would have returned to its $7 rate.
In a statement, Jim McGreevy, president and CEO of the Beer Institute, said the recently signed legislation extending excise tax relief for all brewers and beer importers provides brewers and beer importers the certainty they need to continue growing and reinvesting in their businesses.
“More than two-thirds of Americans across the political spectrum want excise tax relief for the beer industry, which supports more than 2.1 million American jobs,” McGreevy said. “As we look forward to 2020, Congress must continue working to pass the extremely popular bipartisan, bicameral Craft Beverage Modernization and Tax Reform Act, and make the current beer excise tax rates permanent.”
Making the current excise tax rates permanent for all brewers would avoid a repeat of the uncertainty leading up to the end of the year, uncertainty that affects decision-making, job growth and planning for all brewers.
Chris Lampe, president of the Brewers of Pennsylvania and an owner of Weyerbacher Brewing Co. in Easton, said the National Brewers Association has been working hard to get the excise tax extended again.
“I don’t know how it’s going to affect Weyerbacher this year,” Lampe said. “For brewers in general, it’s a win-win because you can use the credit to purchase equipment. If you purchase equipment you can roll money back into the business.”
For one growing brewery, the news of the extension proved particularly welcoming.
“It is so beneficial to craft brewing, to what we do,” said Fred Maier, co-founder and vice president of Susquehanna Brewing Co. in Pittston, Luzerne County.
With 35 full- and part-time employees, and seven years in business, Maier has been hiring more employees and constantly buying equipment to advance the business.
“We haven’t stopped buying new equipment,” he said. “We probably would have had to spend it regardless. We are always investing back into the brewery.”
Susquehanna Brewing recently installed a can production line, which he said was a necessary investment.
He wasn’t certain that the federal government would extend the excise tax and said he was thankful for what the brewers could get.
“We were making plans on kissing it goodbye,” Maier said. “Until it’s made permanent, we don’t act like it’s permanent.”
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume you consent to our cookie policy. Learn more