DC Beer’s Richard sits down with Katie Marisic, the Federal Affairs Manager for the Brewers Association (BA), to talk about BA’s advocacy role for the 8,000 craft breweries across the United States. Katie discusses the BA’s craft beer legislative victories in 2019 and previews the exciting activities coming up in 2020.
Recap of 2019: Extension of the Excise Tax Break
Breweries have been subject to excise taxes since the Civil War. Excise taxes are placed on each barrel of beer produced by a US brewery (and foreign beer imports). In 2017, the BA successfully helped pass the Tax Cuts and Jobs Act to lower the per-barrel excise tax from $7/barrel to $3.50/barrel for the first 60,000 barrels for domestic brewers producing fewer than 2 million barrels annually. It also cut rates for breweries producing more than 2 million barrels annually and foreign importers. This tax cut was in effect from January 1, 2018 to January 1, 2020.
Katie and Richard discussed the wide-ranging benefits of the excise tax cuts since the original passage in 2017. Local craft breweries have reinvested the tax savings into their business operations, hired new employees and increased benefits for employees, and improved quality control and assurance mechanisms. Breweries are also using tax savings to invest into local and national charities.
The entire beer supply chain has felt the effects of the tax cuts. The agricultural industry (specifically hops and barley growers) continue to expand operations and create new products. The BA also helps these growers apply for R&D grant funding to improve cultivation.
The number one legislative goal for the BA is to make these excise tax cuts permanent. Although the BA did not achieve this ambitious goal in 2019, it was able to secure a one-year extension of the tax cut when Congress passed the Craft Beverage Modernization and Tax Reform Act of 2019 in late December.
Looking Forward to 2020: The Fight for A Permanent Excise Tax Cut
The BA has the same goal for 2020: to make these beer excise tax cuts permanent. Katie will continue to tell the story of small craft breweries that continue to help grow local economies and play positive roles in their communities–but need legal and regulatory certainty to thrive. As such, the BA seeks to either make the tax cuts permanent, or at the very least, ensure that tax cut extensions are passed earlier in the year, as opposed to another “last minute” December bill passage.
Katie noted that some in Congress have expressed a few concerns about permanent tax cuts. First, some believe that the tax cuts will lower the cost of beer (and thus promote excessive drinking). Second, they believe that the tax cuts will result in a large loss in government revenues. Katie laid both concerns to rest by noting that tax savings instead lead to reinvestment into beer operations and more jobs, while the tax cuts will yield only minimal revenue losses for the US government.
Upcoming Brewer’s Association Events in Washington
Part of the BA’s mission is to bring breweries to DC to speak with their local representatives. In May, the BA will hold its annual “Hill Climb,” in which breweries from across the country will descend upon DC to lobby members of Congress and their staff. The Hill Climb coincides with the annual SAVOR Week.
In November, the BA will also host its annual Homebrew Contest, in which Congressional staffers will compete in a homebrew challenge. This is a great way to spread the word about the BA and its affiliate, the American Homebrewers Association (AHA).
To help support the BA, you can call your Representative and Senators to advocate for a permanent excise tax cut for brewers. You can also sign up for the “Support Your Local Brewery” initiative to stay in touch on federal- and state-level policies that are important to your local breweries.