U.S. Senate Minority Leader Charles E. Schumer (D-N.Y.) announced that he is joining a bipartisan effort to fight for legislation that will cut the excise tax on small breweries in half.
Tax cuts for small brewers enacted last year expire in 2019, but under the Craft Beverage Modernization & Tax Reform Act (CBMTRA), brewers would permanently pay $3.50 instead of $7 per barrel.
In announcing his support, Schumer detailed how his legislation could benefit the growing number of craft breweries. For example, Brewery Ommegang in Cooperstown, N.Y, produces 40,000 barrels of beer a year. Ommegang employs 103 individuals.
Under CBMTRA, based on current production, the brewery would save over $160,000 at its Cooperstown brewery and over $1.5M per year across its sister breweries in excise taxes. These savings could be reinvested straight back into the company in the form of new hires or expanded business.
In addition, Schumer pushed for funding needed by the Alcohol & Tobacco Tax & Trade Bureau (TTB) to hire additional federal inspectors to review and approve now-delayed permit applications needed by breweries, wineries, and distilleries to expand and sell their products.
Schumer explained that TTB staff levels are back to 2007 levels with about 500 employees, while TTB label approvals have increased 20% from 2013 to 2016 and increased 6% last year.
“Small breweries, like Brewery Ommegang, not only brew great beer, they also pour jobs into the community,” said Senator Schumer. “By cutting taxes for breweries and increasing the number of federal inspectors to approve basic things like new beer labels, we can help breweries like Brewery Ommegang buy new equipment, hire more employees, and truly allow them capitalize on the growing craft beer culture in the Southern Tier.
“I have always said breweries are the crown jewels of so many of our communities, and many of them bring an added benefit by reinvesting into their local communities, just like Brewery Ommegang did with their new visitor center. So by putting more money back into these businesses and making sure they are not choked off by bureaucratic red tape and delays, breweries like Brewery Ommegang can really begin to tap into their full potential.”