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Craft Beverage Modernization and Tax Reform Act reintroduced in U.S. Senate

Discussion in 'Beer News & Releases' started by jmdrpi, Feb 13, 2019.

  1. jmdrpi

    jmdrpi Poo-Bah (5,903) Dec 11, 2008 Pennsylvania
    Society

    https://www.brewersassociation.org/...ft-beverage-modernization-and-tax-reform-act/
    Considering it is supported both by the Brewers Association and the Beer Insitute, I assume this will benefit all sized breweries?
    It appears that this might just be making previously temporary tax rates permanent, but the news release is short on details though. Anyone have more detailed info?
     
    #1 jmdrpi, Feb 13, 2019
    Last edited: Feb 13, 2019
    beergoot likes this.
  2. jesskidden

    jesskidden Meyvn (1,440) Aug 10, 2005 New Jersey
    Society

    Check out the TTB's page for the Tax Cuts and Jobs Act of 2017 which expires at the end of this year.
     
    LuskusDelph and jmdrpi like this.
  3. jvgoor3786

    jvgoor3786 Poo-Bah (1,559) May 28, 2015 Arkansas
    Society Trader

    Glad Congress is working on the important stuff. The budget and the national debt can wait.
     
    beergoot, DrumKid003, GOBLIN and 3 others like this.
  4. Greyvtrayn

    Greyvtrayn Aspirant (207) Feb 17, 2017 New Jersey
    Trader

    **Checks browser** Yes, this is BeerAdvocate.

    Copied directly from the TTB website:
    "In general, the Act provides for a tax rate of $16 per barrel on the first six million barrels of beer brewed by the brewer and removed during the calendar year or imported by the importer into the United States during the calendar year. The Act provides for a rate of $18 per barrel on the remaining barrels not subject to the $16 rate.
    • Small Domestic Brewers: In the case of brewers in the United States who produce no more than two million barrels of beer during the calendar year, the Act provides for a rate of $3.50 per barrel on the first 60,000 barrels removed during such calendar year which have been brewed or produced by such brewer."
    Huge benefit to the craft beer brewers it would seem as I imagine the vast majority of them do not come close to 60k barrels per year, let alone 2M.
     
  5. jmdrpi

    jmdrpi Poo-Bah (5,903) Dec 11, 2008 Pennsylvania
    Society

    If not renewed, do you know what it would revert back to for small breweries?
     
  6. jesskidden

    jesskidden Meyvn (1,440) Aug 10, 2005 New Jersey
    Society

    https://www.ttb.gov/tax_audit/taxrates.shtml
    page down to "Applies to Calendar Years 2017-earlier for Alcohol"

    Even $7 per barrel is quite a reduction of the Excise Tax on Beer since Repeal as a percentage of the price of the product at any level (brewer/distributor/retailer) - when the tax was $5/bbl. That's when beer cost about 10¢ bottle off-premise retail, not $1.50.

    Or, another way to look at it - $5 in 1933 dollars equals $97.56 today (according to the DoL).
     
    #6 jesskidden, Feb 14, 2019
    Last edited: Feb 14, 2019
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  7. deadwolfbones

    deadwolfbones Initiate (90) Jun 21, 2014 Oregon

    Yes, because Congress can only work on one thing at a time.
     
  8. HouseofWortship

    HouseofWortship Zealot (581) May 3, 2016 Illinois
    Trader

    I look forward to the cost savings being passed on to consumers....
     
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  9. jesskidden

    jesskidden Meyvn (1,440) Aug 10, 2005 New Jersey
    Society

    1¢ a 12 oz. bottle, according to the TTB.
    Of course, for a lot of us, them pennies'll add up. :wink: I'm adding mine to my 401k.
     
  10. Jwhit

    Jwhit Initiate (37) Aug 4, 2018 Kansas

    I took his point to mean that Congress, like all of us (since we are all people after all), is not as effective trying to do too many things at once. A point to which I wholeheartedly agree.
     
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  11. Greyvtrayn

    Greyvtrayn Aspirant (207) Feb 17, 2017 New Jersey
    Trader

    Well, unless I'm reading this wrong (within the realm of possibility considering I have poor reading comprehension) the breweries have been operating under these rules for the last couple years temporarily but the bill intends to make the rules permanent. So one could argue, you are already reaping the benefits of said program and should they not succeed in making the rules permanent, you can surely count on the increase in costs/taxes being passed along to the consumer.
     
  12. jvgoor3786

    jvgoor3786 Poo-Bah (1,559) May 28, 2015 Arkansas
    Society Trader

    I think it's fine to discuss a beer tax on this site. My comment was on the effectiveness of Congress who can't even pass a basic budget. Good for the tax decrease. However I'm not going to celebrate a tax on beer production (whether or not it sells) that will be taxed again when it generates profits then taxed again when the consumer buys it with income that was already taxed. All those taxes and we still have an ever-increasing $22 trillion deficit.

    Actually, if you've payed attention recently, doing even one thing would be an improvement.
     
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  13. jesskidden

    jesskidden Meyvn (1,440) Aug 10, 2005 New Jersey
    Society

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  14. jvgoor3786

    jvgoor3786 Poo-Bah (1,559) May 28, 2015 Arkansas
    Society Trader

    Thanks for the clarification. That makes much more sense. But I think my overall point is still valid.
     
  15. oldbean

    oldbean Aspirant (298) Jun 30, 2005 Massachusetts

    Congress is very well staffed. They can do lots of stuff at once. It's fine.

    Airline food though, am I right folks?
     
  16. emannths

    emannths Aspirant (225) Sep 21, 2007 Massachusetts

    I don't think I'd call it "huge." It's a difference of $0.19 per case or $1.75 per keg. I suspect those increments are literally lost in the rounding when brewers set their prices. If the tax cut expired and brewers raised their prices to compensate, no one would notice.
     
  17. rgordon

    rgordon Savant (909) Apr 26, 2012 North Carolina

    I know of a few instances where state ABC folks had to be present to witness product destruction. Proof of less product sold as an adjustment to ending inventory is required. Otherwise old beer "could" find its way into varied markets; like that never happens!
     
  18. HouseofWortship

    HouseofWortship Zealot (581) May 3, 2016 Illinois
    Trader


    If a brewer dumps beer, are they able to write off the dumped beer?
     
  19. jesskidden

    jesskidden Meyvn (1,440) Aug 10, 2005 New Jersey
    Society

    As far as the excise tax, in most cases they probably wouldn't have paid it yet.
    Quarterly Excise Tax Payment Procedure For Small Alcohol Excise Taxpayers

    Or as noted by the TTB:
     
  20. rgordon

    rgordon Savant (909) Apr 26, 2012 North Carolina

    If it is proven to the satisfaction of the state ABC personnel that the beer was indeed destroyed. Then the paid excise tax could be credited (adjusted).
     
  21. Greyvtrayn

    Greyvtrayn Aspirant (207) Feb 17, 2017 New Jersey
    Trader

    I don't think I would say "no one would notice" a price increase in beers being sold at these small breweries. There are plenty of people on these forums alone who talk about price per oz and the difference between $.30 and $.35 per oz. People will notice and people would complain (and other people will not think it's a big deal).
     
  22. emannths

    emannths Aspirant (225) Sep 21, 2007 Massachusetts

    That $0.05/oz is over 50x larger than the $0.0009/oz impact of the tax. No one will notice.
     
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  23. Greyvtrayn

    Greyvtrayn Aspirant (207) Feb 17, 2017 New Jersey
    Trader

    Luckily for us the bill is going to pass in all likelihood so we will never know for sure.
     
  24. jesskidden

    jesskidden Meyvn (1,440) Aug 10, 2005 New Jersey
    Society

    Well, we know that the price of beer did not decrease from those breweries under 60k bbl/yr that had their excise tax rate cut in half for '18 and '19 - from $7/bbl. to $3.50/bbl.
    Again, on a 16 oz. can of beer, that meant a tax cut of approx. 1½¢, so either way the actual increases/decreases per unit are so small, few would notice if, to paraphrase how @emannths put it, "...brewers raised their prices [only] to compensate..."
    TTB EXCISE TAX RATES