RALEIGH — When the National Beer Wholesalers Association hosted a beer tasting reception for members of Congress last week, five out of the 30 participating craft breweries from around the country were from North Carolina. The craft beer community in our state is thriving, and a measure in the U.S. House called the Small Brewer Reinvestment and Expanding Workforce Act could spur further growth.
The bill, commonly referred to as the Small BREW Act, would reduce the excise tax rate of small breweries in the United States on their first 60,000 barrels of beer by 50 percent (from $7 to $3.50 per barrel). For every barrel over 60,000 and up to 2 million, a new rate of $16 per barrel would be imposed, as opposed to the rate of $18 per barrel that currently applies even to breweries that produce over 100 million barrels. To qualify for the reduced and new tax rates, a brewery could not produce greater than 6 million barrels per year.
All 52 craft breweries that are members of the N.C. Brewers Guild, a nonprofit trade organization of brewers, vendors, retailers and craft beer enthusiasts, would qualify under the proposed bill. This means that passage of the Small BREW Act would cut the excise tax rate of every craft brewery in the state in half.
For example, Fullsteam Brewery in Durham, which brewed around 2,000 barrels in its first year of operation (some of the beer was made with North Carolina sweet potatoes, grits or persimmons), would have its excise taxes cut from $14,000 to $7,000. Nationwide, the bill would help approximately 1,525 breweries save around $19.9 million per year to expand and generate jobs, according to Idaho Sen. Mike Crapo, who helped draft the Senate version of the bill.
These tax savings would further stimulate the craft beer industry in North Carolina by allowing these small, local, start-up breweries to allocate more money toward purchasing state-grown ingredients, creating new jobs and offering health insurance and other benefits for existing employees.
As of this writing, however, Reps. Walter Jones, David Price and Mike McIntyre are the only House members from North Carolina to co-sponsor the Small BREW Act. Fortunately, our senators, Richard Burr and Kay Hagan, have both signed onto the act's counterpart in the Senate.
According to the Beer Institute, North Carolina's independent craft breweries have contributed 37,000 jobs to the state and $3.8 billion to its economy as of May 2011. Allowing these breweries to reinvest half of what they would have paid in excise taxes to fuel the growth of brewery jobs and the craft beer market in North Carolina will only increase both of these numbers on the path to recovery for the state. And we can all say cheers to that.
Win Bassett is co-founder and a freelance writer at ncbrewing.org. He is the interim secretary of the North American Guild of Beer Writers and a member of the N.C. Brewers Guild.