Whether a beer brewer is labeled as a \u201ccraft brewer\u201d is determined by parameters set by the Brewers Association, a non-profit trade group that represents small and independent craft brewers.\u00a0 The Association looks at things like barrels of production (less than 6 million per year), the percentage of the brewery that is owned by a non-craft brewer (less than 25%) and whether the majority of a brewer\u2019s total alcohol volume in beers is derived from \u201ctraditional or innovative brewing ingredients and their fermentation.”<\/p>\n
<\/p>\n
However, the criteria set forth by the Association can be pretty malleable.\u00a0 In 2010 the Association changed its barrel production limit from 2 million to 6 million (to accommodate Boston Beer Co. aka Samuel Adams).\u00a0 Last year when the Association changed the definition of \u201ctraditional\u201d to allow inclusion of pre-prohibition brewers like D.G. Yuengling & Son and August Schell who used maize, which was once deemed non-traditional.<\/p>\n
Despite fitting the Association\u2019s criteria, do we consider Yuengling and Samuel Adams to be craft brewers?<\/p>\n
Well, new legislative proposals may have the effect of differentiating among craft brewers, ultimately separating the \u201ctrue\u201d craft breweries from their more commercial counterparts.\u00a0 What is the purpose of the government getting involved, you ask.\u00a0 For tax purposes, of course!<\/p>\n
As of right now, a brewer that produces more than 2 million barrels a year is charged an $18 federal excise tax per barrel.\u00a0 A brewer that produces less than 2 million barrels per year pays an excise tax of $7 on the first 60,000 barrels and $18 for every barrel after 60,000.\u00a0 In other words, you only get a small tax break if you produce less than 2 million barrels a year.<\/p>\n
Two proposed legislative measures \u00a0both called \u201cCraft Beverage Modernization and Tax Reform Act\u201d have been introduced in the House and Senate.\u00a0 The Acts mirror one another and cut the federal excise taxes imposed on brewers.\u00a0 However, \u00a0depending on a brewer\u2019s annual barrel-production number, the new taxes will affect breweries differently.\u00a0\u00a0 The actual text of the Acts have not been released yet, but they are reported to have the following effects:<\/p>\n
The federal beer excise tax will be reduced to $3.50 per barrel on the first 60,000 barrels produced by domestic brewers who only produce less than 2 million barrels annually.<\/p>\n
The tax will be reduced to $16 per barrel on the first 6 million barrels for all other brewers and all beer importers.<\/p>\n
The tax maintains the current $18 per barrel tax on any barrels over 6 million.<\/p>\n
The Acts essentially put brewers into three categories.\u00a0 Arguably, any brewer producing more than 6 million barrels per year probably will not be considered a \u201ccraft brewer\u201d if the Acts pass.\u00a0 Creating this hard line at 6 million barrels could tie the Brewers Association\u2019s hands in increasing the barrel-production number again, like it did in 2010.<\/p>\n
Regardless of where a brewer will fall in the classification scale, its undeniable that all brewers will receive more favorable tax treatment if the Acts are passed.<\/p>\n
Stay tuned.<\/p>\n","protected":false},"excerpt":{"rendered":"
Whether a beer brewer is labeled as a “craft brewer” is determined by parameters set by the Brewers Association, a non-profit trade group that represents small and independent craft brewers. The Association looks at things like barrels of production (less than 6 million per year), the percentage of the brewery…<\/p>\n","protected":false},"author":31,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_links_to":"","_links_to_target":""},"categories":[1],"tags":[],"class_list":["post-232","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"yoast_head":"\n