20New legislation has been proposed in both the House (H.R. 2903) and the Senate (S. 1562), in the form of the Craft Beverage Modification and Tax Reform Act of 2015, which, if it passes and is signed into law, could be big for small breweries across the United State. The bills (both are identical, just introduced separately) would overhaul the federal excise tax structure for craft brewing, simplify the bonding and filing requirements for a large majority of craft breweries in the US, modernize the Alcohol Tax and Trade Bureau (TTB) labeling requirements and ease some restrictions on transferring beer between bonded facilities. The bills also contain provisions for the distilled spirits, wine, and cider industries.
Of note within the brewing industry, the federal excise tax would be reduced from $7.00 per barrel to $3.50 per barrel for the first 60,000 barrels produced each year. Federal excise taxes for barrels 60,0001 – 6 million would be reduced from $18 per barrel to $16 per barrel. All brewers and importers of larger sizes would also pay $16 per barrel. The goal of these reductions is to spur job creation and increase the growth of the craft brewing industry.
Other than reducing and simplifying excise taxes, the bills would also simplify other regulations on the brewing industry. Of note, breweries that pay less than $50,000 in annual federal excise taxes would be exempt from bi-weekly filing and bonding requirements. Brew pubs could consolidate bookkeeping. As most brewers know, the TTB is generally a giant frustrating maze of red tape and restrictive rules and procedures. These bills would loosen those rules and procedures significantly by expanding the list of ingredients that can be included in beer without approval from the TTB. The bills would also allow small, unaffiliated breweries to transfer beer between breweries without tax liability, encouraging increased collaboration. Finally, the bills would exempt beverage producers from very complex capitalization rules for aged products, allowing domestic brewers to better compete with international breweries.
The Brewers Association is asking all craft beer supporters/lovers to write your representatives and senators to strongly urge them to support this bill, which will have significant job creation and economic growth impact within North Carolina. For a list of NC Senators and Representatives (and their contact information), go here: https://www.govtrack.us/congress/members/NC.
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