Ohio Beer Counsel
Information and Commentary on the Issues Facing Ohio's Craft Beer Community, Breweries and Distilleries - Brewed by the Craft Beer Lawyers of Bruns, Connell, Vollmar & Armstrong's Brewery & Distillery Practice Group



Small BREW v. Fair BEER fight over? New Beer Excise Tax Legislation is More Comprehensive and Has Broad Support

Recently introduced federal legislation is seemingly aimed at compromising competing efforts by craft brewers and big brewers to modify the federal excise tax.  Senators Ron Wyden of Oregon and Roy Blunt of Missouri introduced the Craft Beverage Modernization and Tax Reform Act of 2015 (S. 1562) ("CBMA") with the support of the U.S. House (H.R. 2902).

This bill would reset the federal excise tax on beer brewed by small and big brewers.  On small brewers the tax would be set at $3.50 per barrel for the first 60,000 barrels.  For all brewers and importers, the tax would be set at $16 per barrel up to 6 million barrels. This proposal attempts to compromise efforts by competing brewers over the desired excise tax rates.  The current excise tax of $7 per barrel for the first 60,000 barrels and $18 per barrel after that for brewers that produce less than 2 million barrels.  The tax is $18 per barrel on brewers that produce more than 2 million barrels per year. 

In the past few years, two other pieces of federal legislation were introduced by craft brewers and big brewers.  The Small BREW Act and the Fair BEER Act proposed new tax structures aimed at changing the current system for rates perceived by both groups as “more fair.”  (See the comparison chart below)

The Craft Beverage Modernization Act also has additional provisions which Small BREW and Fair BEER both lack.  The CBMA allows for more simplified accounting for brew pubs and simplifies TTB processes for bonding and adding ingredients to beer.  Finally, CBMA relaxes current restrictions on transferring beer between bonded facilities. 

The Craft Beverage Modernization Act enjoys support from craft and big beer.  On July 8, the Beer Institute and the Brewers Association sent a joint letter to Congress asking for support of the Wyden bill. Stay tuned for updates at once.  As always, please direct questions to your friendly beer lawyer.