Breweries are bracing for the possible expiration of a federal tax break at the end of this year.
“If Congress allows the incentive to expire it’s going to have a very detrimental impact on the small and independent brewing community across the country,” Bob Pease, president and CEO of the Brewers Association, a nonprofit trade group, told The Center Square.
The excise tax relief, which began in January 2018, means brewers pay $3.50 a barrel instead of $7.
“Collectively, the updated rates represent an $80 million savings from 2017,” according to Pease. “Our brewery members have taken that savings and plowed that money right back into their businesses.”
There are roughly 7,500 small and independent breweries across country, most employing between 5 and 50 people. “They are brewing their own brands of beer, they are very closely tied to their communities,” Pease said.
The most recent data available from the Maine Brewers’ Guild shows 117 active, licensed breweries in the state last year.
“Maine is a huge success story for craft beers,” Pease said, adding that Allagash Brewing Co. has funded nursing scholarships at the Barbara Bush Children’s Hospital; Maine Beer Co. in Freeport gives back through an environmental initiative, 1 Percent for the Planet.
Pease noted that U.S. Sens. Susan Collins and Angus King and U.S. Rep. Chellie Pingree all have been steadfast supporters of Maine’s brewing community.
Craft brewing is a relatively new phenomenon in the U.S., Pease said. “It’s only about 30 years old. It used to be a couple styles and now there’s thousands of beers, and the men and women who own these breweries are your quintessential American success story.”
Pease estimated that small and independent breweries have created 150,000 jobs in the last three decades.
Legislation to extend the tax break, the Craft Beverage Modernization and Tax Reform Act of 2019, has received bicameral and bipartisan support.
Pease hopes it will pass and lead to further economic development.
“Just easing the tax burden somewhat on brewers comes back to the communities in job creation,” he said.