Tax reform victories for craft breweries achieved, says Brewers Association

The Brewers Association, the not-for-profit trade association dedicated to small and independent American brewers, is hyped to report that Congress has passed favorable tax reforms that will significantly benefit small brewers. Additionally, the Alcohol and Tobacco Tax & Trade Bureau (TTB) updated and expanded the formula rule, providing long-sought-after exemptions for the industry.

The tax extenders package for small beverage alcohol producers includes favorable reforms related to bond requirements and extended filing periods. The plan makes the tax cuts for equipment permanent, while also significantly raising the qualifying threshold. Additionally, the bill includes language that would keep any of the funds made available by this or any other act to be used to implement or enforce any provision of the FDA Food Safety Modernization Act.

RELATED: How tax legislation affects the ‘craft beer’ definition (is Sam Adams out?)

“These filing and bonding requirements are an important victory for small and independent brewers, and we are thrilled that these provisions have been included in the tax extenders bill,” said Bob Pease, chief executive officer, Brewers Association. “We are extremely grateful to Sen. Ron Wyden [D-OR] for his leadership in bringing the entire beverage alcohol space behind well thought out proposals that benefit us all. We also appreciate Reps. Earl Blumenauer [D-OR] and Mike Kelly [R-PA] making this legislation a priority to help small alcohol producers across the country.”

“Small brewers, vintners and distillers are fermenting economic growth in every corner of Oregon and across the United States,” Wyden said. “Passing this bill means less red tape for small business that are such an important economic multiplier. I hope this is only the first round of common sense legislation to cut taxes and unnecessary regulations for America’s craft beverage industry.”

“As co-chairman of the Small Brewers Caucus, I’m pleased to have worked on this bipartisan legislation to simplify the paperwork that small brewers in Pennsylvania have to file with the IRS,” Kelly said. “Now they’ll be able to file their excise taxes quarterly instead of every two weeks, which means they’ll be able to spend less time filing out tax forms‎ and can get back to what they do best — brewing quality craft beverages in the Commonwealth.”

RELATED: Most common brewery compliance tax issues

“From cider to wine, beer and spirits, the craft beverage industry holds an important and growing role in Oregon’s and the nation’s economy,” said Blumenauer. “Passage of this bill will better target the rules governing these industries and will expand opportunities for small entrepreneurs across the country.”

Separately, the TTB updated and expanded the formula rule, exempting ingredients and processes used in the production of beer from being subjected to formula requirements.

“This is also a key win, given the revival and growing popularity of numerous beer styles, such as fruit and spice beers,” added Pease. “It takes a substantial burden off the brewer of having to specifically label ingredients that are already well known to the trade and consumers by their flavor designation.”