The Craft Beverage Modernization and Tax Reform Act (CBMTRA) is becoming a holiday tradition. Since 2017, the legislation, which keeps excise taxes reasonable for craft brewers, distillers, has hovered in a state of uncertainty. On Friday, the CBMTRA received another year of life when President Trump signed a one year extension.
The new law was a rare bipartisan and bicameral effort. Sponsored by Senators Ron Wyden (D-Ore.) and Roy Blunt (R-Mo.) as well as Representatives Ron Kind (D-Wis.) and Mike Kelly (R-Pa.), the measure was tacked onto the tax package which passed Congress last week.
“This bill supports small businesses and helps craft distillers reinvest in their employees, their businesses and their communities. Because of the president’s support, more than 2,000 craft distillers no longer have to worry about waking up to a huge tax increase come January,” said DISCUS President and CEO Chris Swonger in a statement. “Instead, they can focus on creating more jobs, buying more grains from farmers and stimulating local economies.”
The legislative package aim to cut the federal excise tax on small manufacturers for two years. For example, the current $7 per barrel fee would be reduced down to $3.50 per barrel on the first 60,000 barrels for domestic brewers making fewer than two million barrels. Brewers making less than six million barrels would be taxed at $16 a barrel, down from $18. On the spirits side, small distillers would see their tax slashed from $13.50 per proof gallon to $2.70.
“The lower FET rates have been a boon to small and independent brewers located in all 50 states and nearly every congressional district,” Brewers Association president and CEO Bob Pease said in a press release. “These savings empowered brewers to reinvest in their businesses and resulted in an annual tax savings of more than $80 million.”
Big Beer was not included in the original CBMTRA, but they did benefit from tax bill, reaping about $12m in breaks annually. NPR reported that A-B InBev hired 19! lobbying firms to push their agenda in the new bill.
However, those lobbyists will be back at work soon. The protections will expire for everyone on December 30, 2020.